HomeMy WebLinkAboutR33-Economic Development Agency
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CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
FROM: Maggie Pacheco
Executive Director
SUBJECT:
Owner Participation Agreement with GFC
Enterprises, LLC, regarding Lynwood Housing
Development (IVDA Redevelopment Project
Area)
DATE:
Septemher 24, 2007
Svnoosis of Pre,'ious Commission/Council/Committee Action(s),
On Septemher 6, 2007, Redevelopment Committee Members Estrada, Johnson and Baxter Uttanimously voted to recommend
that the Community Development Commission consider this action for approval.
Recommended Motion(s):
(Community Develonment Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing
the Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency") to execute (1) a
Redevelopment Cooperation Agreement by and between the Agency and the Inland Valley Development Agency
("IVDA") and (2) a Single Family Inclusionary Housing Owner Participation Agreement ("OPA") by and between
the Agency and GFC Enterprises, LLC, for the development of Lynwood Housing Development (IVDA
Redevelopment Project Area)
Contact Person(s):
Maggie Pacheco
Phone:
(909) 663-1044
Y 7 rv'd
Project Area(s):
Supporting Data Attached:
IVDA
Ward(s):
o Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s)
Fill<1)ING REQUIREMENTS:
Amount: $ 370,000
RDA LowlMod Housing Funds
2007-2008 RDA Budget
Source:
Budget Authority:
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Signature: ,1 ~ V 4'7-
Maggie Pacheco, Executive Director
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Fiscal Review:
Barbara Lindseth, Administrative Services Director
Commission/Council Notes:
P:\.AlmdasIComm De\' CommisslOn\CDC 2007'.10-01-07 OFC Enlrrprisn OPA SR.OOc
COMMISSION MEETING AGENDA
Meeting Date: 1010112007
Agenda Item Number: ~_
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ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
OWNER PARTICIPATION AGREEMENT WITH GFC ENTERPRISES, LLC, REGARDING
L YNWOOD HOUSING DEVELOPMENT (IVDA REDEVELOPMENT PROJECT AREA)
BACKGROUND:
GFR Enterprises, Inc., is a local developer (the "Developer") with a main office located at 343 North
Second Street, Upland, California, and has over 30 years of experience in real estate development
comprising over 7,000 residential properties built and sold. The Developer recently completed the
Paraiso Estates development of 54 elegant and luxury single-family homes near Belmont Avenue, in
the Verdemont Area of the City of San Bernardino (the "City"). The Developer has been developing
up-scale and luxury homes in the City for decades and 3 years ago, the Developer, Century Crowell
and the Redevelopment Agency of the City of San Bernardino (the "Agency") embarked upon the
development of approximately 30 acres of land previously owned by the Agency in order to pave the
way for development of a new 107 single-family home subdivision and 5-acre park along the area of
Palm and lrvington Avenues within the Verdemont Area.
The Developer (dba GFC Enterprises, LLC) owns 7.7 acres of vacant land (APN: OII91-231-40 and
41) located on the east side of Lynwood Way between Byron and Amanda Streets (See attached
Location Map), in the Inland Valley Development Agency ("IVDA") Redevelopment Project Area
("Project Area"). On September 19, 2006, the Planning Commission approved Tentative Tract Map
("TTM") No. I 7793 (Subdivision No. 05-48), Variance No. 06-02, and Development Permit Type 3
No. 06-03 to develop 18 single-family detached residential homes ("Project"). In compliance with the
California Environmental Quality Act ("CEQA"), the Planning Commission also made an
environmental finding and adopted a mitigated negative declaration for the Project.
The Developer initially proposed 3 models with 2 different exterior styles and treatments in the
approved TTM No. 17793. Each model consisted of 4 bedrooms, 3 bathrooms, a 2-car garage, a
porch, stucco siding and a concrete-tile roof, ranging in size from 2,399 to 3,195 square feet.
Architectural treatments included cultured stone or rock on front elevations, alternating hip-style and
gable roofs, multi-planed roofs, porches and various window styles. The Project development cost was
estimated at $7.5 million and the homes were proposed to be sold at prices ranging from $389,990 to
$439,990.
Since the Planning Commission's approval of the TIM, the housing market has changed and the
Developer believes it is no longer feasible to develop the 18 homes as approved and has resubmitted a
revised development concept plan to the Planning Department to reduce the sizes of the new homes to
a range of 1,453 to 1,644 square feet. The proposed Model No. I will have 3 bedrooms, 2 bathrooms
and a 2-car garage and the remaining 2 models will have 4 bedrooms, 2 bathrooms and 2-car garages
(See attached Site Plan) with sales prices ranging from $349,990 to $369,990 at an estimated
development cost of $5.6 million. Additionally, the Developer is required, as a condition of approval
for the revised TTM, to complete some off-site public improvements and install a new traffic signal,
sidewalk, curbs and gutter at an additional Project cost.
P,\AJC'IldasICornn De" Cmmtission\CDC 2001\10.01.07 GFC Enla"pl'1SeS OPA SRaoc
COMMISSION MEETING AGENDA
Meeting Date: 1010112007
Agenda Item Number: G
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Economic Development Agency Staff Report
GFC Enterprises OPA
Page 2
The Project is located in the NDA Project Area, as a result, inclusionary housing requirement applies
to the Project per California Community Redevelopment Law ("CRL"). Section 33413(b)(2)(A)(i)
require that at least 15% of all new development or substantially rehabilitated dwelling units by public
or private entities shall be made available at affordable housing costs to persons of low- or moderate-
income and shall be occupied by these persons or families. The Developer has agreed to set aside at
least 15% of 18 units, which equals to 3 units that must be sold at affordable housing costs and
occupied by low- and moderate-income persons or households.
On October 8, 2003, the IVDA Board approved Resolution No. 2003-11, which adopted a policy
agreeing to allocate tax increment funds to its members for certain redevelopment or development
projects developed within the IVDA boundaries. Essentially, this policy allows the members to seek a
cooperation agreement with the NDA to collect a portion of the tax increment generated from a
specific project that is developed in the NDA Project Area.
CURRENT ISSUE:
On March 8, 2007, the Redevelopment Committee recommended to the Community Development
Commission of the City of San Bernardino ("Commission") approval of (1) an Agreement by and
between the Agency and IVDA and (2) an Owner Participation Agreement ("OPA") with the
Developer. On September 5, 2007, the Planning Commission approved the revisions to the Project to
reduce the size of the homes. On September 6, 2007, the Redevelopment Committee reviewed and.
recommended the revised Project for consideration and approval to the Commission. Agency Staff is
requesting that the Commission consider the proposed revisions in addition to the following facts that
were presented at the September 6, 2007, Redevelopment Committee meeting:
· Developer will construct the 18 units and will set aside and sell 3 affordable housing units
(inclusionary housing requirement to accommodate households earning up to 120% of the
area median income) and complete the construction and sale of the affordable new homes to
eligible buyers no later than December 31, 2008; and
· Developer has the option of providing the required 3 affordable new homes as follows on:
1) develop in-fill lots in other areas of the Project Area; 2) acquisition by the Developer and
rehabilitation of a vacant single-family dwelling unit; or 3) such other construction or
rehabilitation of single- family dwelling units as may be approved by the Agency within the
City limit such as the "Operation Phoenix Area."
· Agency will reserve and allocate the sum of $270,000 from the Agency's Housing Fund to
assist 3 eligible homebuyers with down payment assistance and in return, the Agency will
receive a 45-year affordability and maintenance covenant (CC&R's) for each unit. The
CC&R's are required by the CRL on all newly constructed housing units that are assisted in
this manner; and
· Agency will reserve and allocate the sum of $100,000 from the Agency's Housing Fund to
assist the Developer with the reimbursement of a portion of the Development hnpactFees
attributed to the development of the 3 affordable housing units; and
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P.\A......\Co~D"C.......~'ax:200N..I-07GFC..........OPAS."'" COMMISSION MEETING AGENDA
Meeting Date: 10/0112007
Agenda Item Number:
l33
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Economic Development Agency Staff Report
GFC Enterprises OPA
Page 3
. Developer will share with the Agency, 50% of any profits, if any, generated from the
development and sale of the Project that is in excess of a reasonable rate of return on
investment ("Profit Percentage") determined to be 10% per the Developer's pro forma;
these profit participation funds could potentially be used to off-set the Agency's Housing
Fund contribution for the 3 affordable housing units.
Additionally,
. The Agency and the IVDA will enter into a Cooperation Agreement whereby the Agency
will receive the IVDA's share (approximately 30% of the 1% property tax) of the tax
increment revenues generated from the sale of the Project; the estimated sales value of the
18 new homes is $6.2 million, or $62,000 annually in new property taxes. Hence, the
IVDA or the Agency's share will be equal to approximately $18,600 yearly. The Agency
will collect the approximately $18,600 each year from the IVDA until the $370,000 is
repaid to the Agency.
ENVIRONMENTAL IMP ACT:
This request is exempt under CEQA, pursuant to Section 15332, Class 32, which consists of projects
characterized as in-fill development meeting the following conditions: (a) the Project is consistent with
the applicable general plan, zoning designation and regulations; (b) the Project occurs within the city
limits and is not more than 5 acres; (c) the Project site has no value as habitat for endangered, rare or
threatened species; (d) the Project would not result in any significant effects relating to traffic, noise,
air quality, or water quality; and (e) the Project is adequately served by all required utilities and public
services.
FISCAL IMPACT:
$370,000 ($270,000 for downpayment assistance and $100,000 for reimbursement of certain
Development Impact Fees) is available in the Agency's 2007-2008 Housing Fund for this Project. The
Agency will recapture said amount through the proposed Cooperation Agreement between the Agency
and the IVDA.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
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Maggie Pacheco, Executive Director
P'^Kcndu\Cornm DevCommission\CDC 2007\10-01-07 GFC EmerpriSES OPA SR doe
COMMISSION MEETING AGENDA
Meeting Date: 1010111007
Agenda Item Number: i,33
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE (1) A
REDEVELOPMENT COOPERATION AGREEMENT BY AND BETWEEN
THE AGENCY AND THE INLAND VALLEY DEVELOPMENT AGENCY
("IVDA") AND (2) A SINGLE FAMILY INCLUSIONARY HOUSING
OWNER PARTICIPATION AGREEMENT ("OPA") BY AND BETWEEN
THE AGENCY AND GFC ENTERPRISES, LLC, FOR THE
DEVELOPMENT OF L YNWOOD HOUSING DEVELOPMENT (IVDA
REDEVELOPMENT PROJECT AREA)
WHEREAS, GFC Enterprises, LLC ("Developer"), owns 7.7 acres of vacant land (APN:
01191-231-40 and 41) located on the east side of Lynwood Way between Byron and Amanda
Streets (the "Property") as illustrated on the approved Site Plan in the Inland Valley Development
Agency ("IVDA") Redevelopment Project Area ("Project Area"); and
WHEREAS, on September 5, 2007, the Planning Commission approved the revisions to
Tentative Tract Map No. 17793 (Subdivision No. 05-48), Variance No. 06-02, and Development
Permit Type 3 No. 06-03 to develop 18 single-family detached residential homes (the "Project")
consisting of 3 models with 2 different exterior styles and treatments; and
18
WHEREAS, on February 3, 2003, the Community Development Commission of the City 0
San Bernardino ("Commission") agreed to assume the responsibility for implementing,
19
administering and managing the IVDA Project Area inclusionary and replacement housing
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requirements as required per Section 33413 of the California Community Redevelopment Law
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("CRL"); specifically, Section 33413, requires redevelopment agencies to ensure that at least 15%
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of all new and substantially rehabilitated dwelling units developed within a project area by public or
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private entities or persons other than the Agency be made available at affordable housing cost to,
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and occupied by, persons and families of low- or moderate-income, and not less than 40% of said
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units shall be made available to very low-income households; and
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WHEREAS, a moderate-income household is considered to be a household that eams less
than 120% of the area median income for the County of San Bernardino ("County"), and the
28
County's income levels for such households range from $48,300 for a family size of I to $91,100
P\Allendas\Rcsollltion$\Rcsoll.ltions~OO7l]O_O] .07 GFC EntCl'plises COC Rcso doc
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1 for a family size of 8 which income limits are modified annually by HUD and State HCD; and
e 2 WHEREAS, on October 8, 2003, the IVDA Board adopted a policy allowing member
3 jurisdictions to undertake redevelopment activities within the Project Area pursuant to a generic
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4 Cooperation Agreement adopted through Resolution 2003-11 of the IVDA; and
5 WHEREAS, the Developer's Project is located within the IVDA Project Area, and as such,
6 the Inclusionary Housing Requirements apply to the Project and the Developer will set aside and
7 sell 3 of the 18 units to households earning up to 120% of the area median income ("Affordable
8 New Homes"); and
9 WHEREAS, the Agency will reserve and allocate the sum of $270,000 from the Agency's
10 Housing Fund to assist 3 eligible homebuyers with down payment assistance and $100,000 to
11 reimburse the Developer for certain development impact fees related to the Affordable New Homes
12 and in return, the Agency will receive a 45-year affordable and maintenance covenant (CC&R's) on
13 the Affordable New Homes; and
WHEREAS, the Agency and the IVDA will enter into a Redevelopment Cooperation
Agreement to receive the IVDA's share of the tax increment revenues generated from the Project to
assist the Agency with its financial obligations under the OP A; and
WHEREAS, on January 22, 2007, the Commission approved the Agency's Housing
Implementation Plan (the "Plan") which incorporated the CRL requirements related to the IVDA's
responsibility as noted above for inclusionary housing and the number of units that needed to be
produced within the IVDA Project Area during the IO-year term of the Plan; and
WHEREAS, on September 5, 2007, the Planning Commission approved a Mitigated
Negative Declaration for the Project in compliance with the California Environmental Quality Act
("CEQA") and its requirements under Section 21081.6 and adopted a monitoring and reporting
program designated to ensure compliance during the Project implementation, and the Agency will
rely on these environmental findings in order to consider approval of the Single Family
Inclusionary Housing Owner Participation Agreement ("OP A"); and
WHEREAS, it is appropriate for the Commission to take action with respect to the OP A
28 and the Cooperation Agreement.
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P:\Agendas\Rcsolutions\Resolutions\2007\lO.OI-07 GK Enlerprises CDC Re$O doc
1 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY
e 2 OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS:
3 Section 1. The Commission hereby approves (1) the Redevelopment Cooperation
4 Agreement by and between the Agency and the IVDA and (2) the OPA by and between the Agency
5 and the Developer in the form as presented at the meeting of the Commission at which this
6 Resolution is adopted, and the Commission further authorizes the Executive Director of the Agency
7 to execute said agreements and to take all actions set forth in the agreements and make such
8 technical and conforming changes as may be approved by the Agency Counsel.
9 Section 2. The Commission hereby finds and relies on the September 5, 2007, Planning
10 Commission approved Mitigated Negative Declaration for approval of the Project in compliance
11 with CEQA and its requirements under Section 21081.6, and the Notice of Determination will be
12 prepared and filed with the County Clerk within 5 days from the date of the action of the
13 Commission to approve this Resolution.
The Resolution shall become effective immediately upon its adoption.
14 Section 3.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE (1) A
REDEVELOPMENT COOPERATION AGREEMENT BY AND BETWEEN
THE AGENCY AND THE INLAND V ALLEY DEVELOPMENT AGENCY
("IVDA") AND (2) A SINGLE FAMILY INCLUSIONARY HOUSING
OWNER PARTICIPATION AGREEMENT ("OPA") BY AND BETWEEN
THE AGENCY AND GFC ENTERPRISES, LLC, FOR THE
DEVELOPMENT OF LYNWOOD HOUSING DEVELOPMENT (IVDA
REDEVELOPMENT PROJECT AREA)
8 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
9 Development Commission of the City of San Bernardino at a
meeting
10 thereof, held on the day of , 2007, by the following vote to wit:
11 Commission Members: Aves Navs Abstain Absent
12 ESTRADA
13 BAXTER
14 BRINKER
e 15 DERRY
16 KELLEY
17 JOHNSON
18 MC CAMMACK
19
20 Secretary
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The foregoing Resolution is hereby approved this day of ,2007.
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23 Patrick J. Morris, Chairperson
24 Community Development Commission
of the City of San Bernardino
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Approved as to Form:
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27 By: /S/5inuJ.tfJg. 7. sa&.
e Agency Counsel
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P\AIflIdas\ResoIUliDnsIResollltions'ZOO7' 10_01_07 QFC Enlerprises CDC Rcso dot
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REDEVELOPMENT COOPERATION AGREEMENT
BY AND BETWEEN THE
INLAND VALLEY DEVELOPMENT AGENCY
AND THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
(GFC Enterprises, LLC - Lynwood Housing Development Project)
This Redevelopment Cooperation Agreement (this "Agreement") is dated as of October 1,
2007, and is by and between the Inland Valley Development Agency (the "IVDA"), a joint ppwers
authority, established under the laws of the State of California, and the Redevelopment Agency of the
City of San Bernardino (the "Agency"), a public body, corporate and politic, and is entered into with
respect to the following facts set forth in the Recitals:
- RECITALS -
WHEREAS, the City of San Bernardino (the "City") and the Agency have been engaged in
efforts to address blighting conditions in a portion of the City location on the east side of Lynwood
e Way between Byron Street and Amanda Street (APN: 01191-231-40 and 41) (the "Property"); and
WHEREAS, GFC Enterprises, LLC (the "Developer"), will undertake the development of a
project on the Property consisting of7.7 acres of vacant land to develop 18 single-family detached
residential homes (the "Project"), to be sold to homebuyers, with three (3) of the new homes to be
sold to eligible low- or moderate-income households earning not more than 120% of the Area
Median Income for the County; and
WHEREAS, the three (3) eligible "Dew homebuyers will require downpayment financial
assistance of approximately Two Hundred Seventy Thousand Dollars ($270,000) in the aggregate to
qualify for the first mortgage financing and an additional One Hundred Thousand DoIIars
($100,000) will be used to reimburse the Developer for City imposed development impact fees, and
the Agency has allocated funds in its 2007-2008 budget to assist the homebuyers as contemplated
by this Agreement; and
WHEREAS, it is necessary and appropriate for the Agency to enter into this Agreement
between the Agency and the IVDA in order to provide for the IVDA to transfer authority to the
Agency to undertake the implementation of the Project with the Developer, and to receive any net tax
increment generated from the Project to the extent that the Agency is able to assist each homebuyer;
and
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WHEREAS, the Project, as defined herein, is situated within the IVDA Redevelopment Project
Area ("Project Area") which is a redevelopment project area administered by the IVDA; and
4843.3479-{)912.1 I
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WHEREAS, the IVDA has been established, pursuant to a joint exercise of powers agreement
in January 1990, for the purpose of assisting in the conversion, redevelopment and civilian reuse of the
former Norton Air Force Base ("NAFB") located within the City; and
WHEREAS, the member governmental entities of the IVDA include the County of San
Bernardino, a political subdivision of the State of California, and the City of Colton, a municipal
corporation, and the City ofLoma Linda, a municipal corporation, and the City, a charter city; and
WHEREAS, the IVDA has been granted specific powers by the State Legislature in 1989
(Stats. 1989 c.545 and See Now Stats 1997, c.580 and Health and Safety Code Section 33492.40, et
seq.) to assist in the redevelopment of the NAFB and the lands in proximity thereto pursuant to the
California Community Redevelopment Law (Health and Safety Code Section 33000, et seq.,
hereinafter referred to as the "CRL"); and
WHEREAS, the IVDA has adopted the redevelopment plan for the IVDA Project Area (the
"Redevelopment Plan") in accordance with the provisions of the CRL, and the Redevelopment Plan
provides for certain redevelopment activities to be undertaken within the redevelopment project area as
more fully described in the Redevelopment Plan; and
WHEREAS, at the present time, substantially all the financial and administrative staff
resources available to the IVDA are devoted to the implementation of certain agreements affecting the
NAFB, including an agreement entitled "Agreement between the Department of the Air Force and the
Inland Valley Development Agency," dated March 7, 1995, as amended, and an agreement entitled
"Master Disposition and Development Agreement", dated November 6, 2002, both of which
specifically relate to the civilian reuse and redevelopment of the lands comprising the NAFB; and
WHEREAS, the Agency seeks to initiate certain redevelopment activities affecting the Project,
as defined herein, which is situated within the Project Area but which is not part of the NAFB; and
WHEREAS, the IVDA and the Agency deem that the approval and implementation of this
Agreement are consistent with the Redevelopment Plan and the purposes and intent of the CRL and in
particular Health and Safety Code Section 33492.40, et seq., to expeditiously accomplish the
redevelopment of certain lands located in the City which are also within the Project Area.
NOW, THEREFORE, THE INLAND V ALLEY DEVELOPMENT AGENCY AND THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO DO HEREBY
MUTUALLY AGREE AS FOLLOWS:
Section 1. Recitals. The parties acknowledge and agree that the recitals as set forth above
are accurate and correct in all respects.
Section 2. Accomplishment of Public purposes. The parties acknowledge and agree that
this Agreement provides the IVDA, and the Agency with a means to foster the redevelopment of a
portion of the Project Area located within the municipal boundaries of the City of which could not
otherwise be accomplished within the foreseeable future unless the parties to this Agreement agree to
exercise certain responsibilities as set forth herein. This Agreement is intended to be consistent with
the intent and legal requirements of the CRL and in particular, Health and Safety Code Section 33413,
et seq., and shall be considered as an agreement entered into by and between the IVDA and the Agency
4843-3479-0912.1 2
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to accomplish the removal of blighting conditions within the Project Area and to compliment the
civilian reuse and redevelopment of certain lands nearby the NAFB in the Project Area. This
Agreement shall provide the IVDA with additional assistance from the Agency to undertake
redevelopment activities in the portion of the Project Area where the Project is located, as more fully
depicted in Attachment "A" attached hereto. The parties presently anticipate that an Owner
Participation Agreement for the redevelopment of the Project site shall be executed with GFC
Enterprises, LLC, by the Agency.
Section 3.
Grant of Redevelooment Powers to the Agencv for the Proiect.
(a) Except as set forth in Section 3(b) and Section 3(c) of this Agreement, the IVDA hereby
grants to the Agency, acting by and through the Community Development Commission of the City of
San Bernardino (the "Commission") and to the legislative body of the Agency acting by and through
the Mayor and Common Council of the City of San Bernardino, as applicable, the right, power and
authority to act for and on behalf of the IVDA for the purpose of exercising all redevelopment powers
legally available to the IVDA as set forth in the Redevelopment Plan, the CRL and in particular, the
provisions of Health and Safety Code Section 33492.40, et seq., affecting any lands and property
situated within the Project.
In addition to any other powers which the City and/or the Agency may have, the Agency may,
either in its name or on behalf of the IVDA, exercise all of the powers, rights and authorities of the
IVDA as set forth in the Redevelopment Plan with respect to the lands and property situated within the
Project, including, but not limited to, the right to acquire and dispose of real and personal property, to .
either exercise the power of eminent domain directly on behalf of the IVDA or request the IVDA to
consider the exercise of such powers in support of the Agency and at the sole discretion of the IVDA,
sue and be sued, enter into agreements and undertake such other actions as appropriate to the intent of
this Agreement.
No such action of the City or the Agency, as applicable, with respect to the exercise of such
redevelopment powers affecting the Project, need be consented to, ratified or confirmed by the IVDA
unless such ratification, consent or confirmation by the IVDA is otherwise requested at the discretion
of the City or the Agency. In the event the IVDA is so requested in writing by either the City or the
Agency to ratify, consent or confirm any action or intended action of the City or the Agency with the
respect to the Project pursuant to this Agreement, the IVDA shall consider such matter as soon as
practicable after receipt of such written request.
The City and the Agency shall be solely responsible for the payment of all costs and expenses
as may be associated with the implementation of any redevelopment activity as may hereafter be
undertaken by the City and the Agency in the Project as authorized by this Agreement.
(b) Notwithstanding the provisions of Section 3(a), the City and the Agency shall not
mll1ate any amendment of the Redevelopment Plan or any amendment or supplement to the
Implementation Plan for the IVDA Redevelopment Project Area without first obtaining the written
approval of the IVDA in its sole and absolute discretion.
(c) Notwithstanding the provisions of Section 3(a) or any other part of this Agreement, the
City and the Agency shall take no action under this Agreement which causes the IVDA to incur an
indebtedness which is payable from any funds, revenues or assets of the IVDA, except from "Transfer
Revenues", if any, as this term is defined in Section 4.
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Section 4. Transfer of a Certain Portion of the IVDA Tax Increment Funds for the
RedeveloDment of the Project.
(a) In addition to the meaning of certain words and phrases as set forth in the preceding
Recital paragraphs and sections of this Agreement, the following definitions shall apply to usage of the
terms set forth in this Agreement:
(i) "Project Properties Base Year" means and refers to the secured property tax roll assessed
valuation of the properties within the Project Properties for ad valorem property tax
purposes, for the 2006-2007 fiscal year of the IVDA as shown on the secured property tax
assessment rolls of the County Assessor;
(ii) "Project Properties Indebtedness" means and refers to the indebtedness which the Agency
may incur on or after the date of this Agreement with respect to the Project;
(iii) "Project Properties" means and refers to the approximately 7.7 acres ofland in the Project
which is also depicted in Attachment "A";
(iv) "GFC Enterprises, LLC - Lynwood Housing Development Project" means and refers to a
community redevelopment project of the Agency, and the related activities which may
hereafter be undertaken by the Agency in the Project. The Project shall be more
particularly identified in the written notice provided to the IVDA by the Agency under
Section 4(e);
(v) "Tax Increment Revenue" means and refers to those revenues, if any, received by the IVDA
under Article VII, Section B(702) of the Redevelopment Plan as related to the Project
Properties;
(vi) "Transfer Revenue" means and refers to a portion of the tax increment revenue of the
IVDA attributable to the Project Properties described in Section 4(b) which the IVDA shall
pay to the Agency each year during the term of this Agreement with respect to indebtedness
incurred by the Agency in connection with the redevelopment of the Project Properties
subject to the conditions set forth in Section 4.
(b) Transfer Revenue is a portion of the tax increment revenue of the IVDA generated by
the Project Properties by virtue of the Project, if any, each fiscal year, in excess of such tax increment
revenue of the IVDA attributed to the Project Properties Base Year, net of the low- and moderate-
income housing set-aside obligation of the IVDA with respect to such tax increment revenue in each
such fiscal year, and further net of the portion of such tax increment revenue of the IVDA with respect
to the Project Properties which is payable by the IVDA in such fiscal year under the School District
Agreements as set forth in Section 4(f).
(c) Provided the Agency has given the IVDA the notice described in Section 4(e),
commencing no sooner than the 2007-2008 fiscal year of the IVDA, and for each fiscal year of the
IVDA thereafter during the term of this Agreement, the IVDA hereby agrees to pay to the Agency the
Transfer Revenue attributable to the Project Properties, if any, for each such fiscal year following the
Project Properties Base Year. The obligation of the IVDA to pay the Transfer Revenue to the Agency
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is a special fund obligation of the IVDA payable solely from the portion of the tax increment revenue
of the IVDA generated by the Project Properties by virtue of the Project, if any, in the amount as
calculated each fiscal year under the formula set forth in Section 4(b). No Transfer Revenues shaH be
payable by the IVDA to the Agency for any fiscal year of the IVDA after June 30, 2030. Any unpaid
balance of the Project Properties Indebtedness as may exist as of July I, 2030, shall be discharged,
released and forgiven by the Agency.
(d) The IVDA shall only remit the Transfer Revenues calculated pursuant to Section (b) to
the extent that the Agency has incurred on or after July 1, 2007, funds, or incurred indebtedness in
connection with the redevelopment of all or any portion of the Project Properties Indebtedness,
including, without limitation, indebtedness incurred under one (1) or more separate agreements by and
between the Agency and the City or indebtedness to a noteholder, bondholder, trustee or other creditor
of the Agency related to costs incurred or paid by the Agency for the redevelopment of the Project.
The Agency shall, as a condition precedent to the receipt of Transfer Revenue on each May 1,
commencing on May I, 2008, submit to the IVDA, a suitably detailed written statement of the
outstanding unpaid balance of Project Properties Indebtedness incurred by the Agency, including the
relevant terms of repayment of such Project Properties Indebtedness.
(e) By a date not later than April 30, 2008, the Agency shall give notice to the IVDA that
the Agency entered into one (1) or more written agreements with third-parties for the redevelopment of
the land included in the Project. Such notice shall contain a suitably detailed description of the Project
and the current balance, as of the date of such notice, of the Project Properties Indebtedness.
Concurrently with such notice, the Agency shall also deliver to the IVDA a copy of such written
agreements. In the event that such notice is not given by the Agency, then in such event, no Transfer
Revenues shall be payable to the Agency by the IVDA under this Agreement.
(I) This Agreement and the amounts of Transfer Revenue to be remitted by the IVDA to
the Agency shall at all times be subject to the provisions of the various school district pass-through
agreements between the IVDA and the San Bernardino City Unified School District, Colton Joint
Unified School District, Redlands Unified School District, County Superintendent of Schools and the
San Bernardino Valley College District (collectively, the "School District Pass-Through Agreements")
as the same are applicable to the increases in the tax increment revenues generated by the Project
Properties. The calculation of the amount of the Transfer Revenue to be remitted by the IVDA to the
Agency shall be net of all amounts required to be paid by the IVDA to the various school districts
pursuant to the School District Pass-Through Agreements. The IVDA shall be solely responsible for
the administration of the School District Pass-Through Agreements and the IVDA may charge a
proportion of fee against the Tax Revenues for third-party costs associated with such administration.
(g) The IVDA has established the Low- and Moderate-Income Housing Fund for the Inland
Valley Redevelopment Project, and twenty percent (20%) of tax increment revenues received by the
IVDA are deposited into such fund each year, subject to certain decreases authorized under applicable
law. Said twenty percent (20%) figure may be decreased pursuant to Health and Safety Code Section
33334.2(a)(1) and (2) from time-to-time by the IVDA. If the IVDA determines for the entire Project
Area, inclusive of the Project Properties, to deposit less than the said twenty percent (20%) figure for a
particular fiscal year, as permitted by Health and Safety Code Section 33492.40(e) and
33334.2(a)(2)(A), or if the IVDA determines to make no deposit into the Low- and Moderate-Income
Housing Fund for the entire Project Area, inclusive of the Project Properties, as permitted by Health
and Safety Code Section 33334.2(a)(1)(A), then in any such event, the Transfer Revenue calculation as
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set forth in Section 4(b) of this Agreement for the particular fiscal year or fiscal years, as applicable, in
which such a finding is made by the IVDA, shall not be subject to any off-set or adjustment
corresponding to any amounts of such tax increment revenue that the IVDA has not deposited into the
IVDA Low- and Moderate-Income Housing Fund.
(h) The obligation of the IVDA to remit any portion of the Transfer Revenue to the Agency
pursuant to this Agreement is, at all times, subordinate to the obligations of the IVDA incurred
pursuant to any and all tax allocation bonds, notes or other forms of indebtedness, and all refinancings
of any of these, issued or incurred by the IVDA to the holders of publicly issued bonds, notes or other
forms of indebtedness considered municipal securities sold in the municipal bond market.
(i) The IVDA and the Agency will cooperate in each year during the term of this
Agreement in the preparation of the Statement of Indebtedness for the IVDA as the same relates to the
Project Properties Indebtedness and the Transfer Revenue payable by the IVDA to the Agency for the
Project Properties Indebtedness. The IVDA and the Agency further agree, upon thirty (30) days
written request, to exchange suitably detailed and written accounting and audit records related to the
Project Properties Indebtedness and the Transfer Revenue, including the estimates and final remittance
amounts of Transfer Revenue each fiscal year as calculated by the IVDA, and the Project Properties
Indebtedness amounts incurred by the Agency with respect to the redevelopment of the Project
Properties.
(j) Except as set forth in this Agreement as it relates to Transfer Revenues, no other tax
increment revenue or other funds or assets of the IVDA are subject to this Agreement. The IVDA
may, but shall not be required, unless subsequently approved by the IVDA on a case-by-case basis,
advance, loan or otherwise transfer to the Agency other tax increment revenue as may then be available
to the IVDA from the Project Area, subject to applicable law.
Section 5. Pre-June 30, 2007 Indebtedness of the Agencv relating to the Proiect. As of
June 30, 2007, the Agency has incurred no debt in redevelopment indebtedness with respect to its
efforts to address conditions of blight in the Project, including indebtedness incurred for the acquisition
of the property. No cost, expense or indebtedness incurred by the Agency with respect to the Project
prior to June 30, 2007, shall be deemed to be an eligible cost or indebtedness of the Agency for
purposes of calculating the Project Properties Indebtedness.
Section 6. Notices. Formal notices, demands and communications between the IVDA and
the Agency shall be deemed sufficiently given if (i) dispatched registered or certified mail via United
States Postal Service, postage prepaid, return receipt requested, as designated in this Section 6; (ii) by
personal delivery; (iii) express delivery service with written verification of delivery; or (iv) by
electronic transmittal including fax transmissions with telephonic verification of receipt. Such written
notices, demands and communications may be sent in the same manner to such other addresses as any
party may, from time-to-time, designate by written notice to the other parties.
Copies of all notices, demands and communications shall be sent as follows:
IVDA: Inland Valley Development Agency
Attention: Executive Director
294 South Leland Norton Way
San Bernardino, California 92408
4843-3479-0912.1 6
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AGENCY:
Redevelopment Agency of the City of San Bernardino
Attention: Maggie Pacheco, Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
Notices which are dispatched by registered or certified mail through the United States Postal
Service shall be deemed to be given three (3) business days after deposit with the United States Postal
Service, and notices which are given by personal delivery shall be deemed given upon such personal
delivery. Notices dispatched by express delivery service shall be deemed to have been given upon
receipt by the party receiving such notice and execution of the delivery receipt, and notices dispatched
through electronic transmittals shall be deemed to have been given upon telephonic verification of
receipt.
Section 7. Indemnification and Hold Harmless. The Agency hereby agree to indemrufy,
defend and hold harmless the IVDA and each of its officers, officials and employees from any and all
loss, liability, claim, cost, expense or judgment, including attorney's fees, that may result from the
implementation of this Agreement by the Agency. The Agency will also defend, indemnify and
provide the cost of defense on behalf of the IVDA with respect to any third party challenge to the
legality or enforceability of this Agreement pursuant to the CRL. Such indemnification and hold
harmless shall apply whether or not the City and/or the Agency, or either of them was at fault or in any
manner contributed to any such loss, liability, claim, cost, expense or judgment.
.
Section 8. Entire Agreement of the Parties. This Agreement represents the entire
agreement by and between the IVDA and the Agency with respect to the transfer of the redevelopment
powers of the IVDA affecting the Project.
Section 9. Invaliditv of anv Provision. In the event it is determined that any provision of
this Agreement is invalid or unenforceable as between the parties, the remaining provisions which are
determined to be valid and enforceable shall remain in full force and effect.
Section 10. Approval and Effective Date of Agreement. This Agreement has been duly
approved and authorized for execution and delivery by the governing board of the IVDA and by the
Commission on behalf of the Agency, and this Agreement has been duly executed and delivered by the
parties hereto. This Agreement may be executed in counterparts and when fully executed by the
parties, it shall be effective for all purposes as of the date set forth in the introductory paragraph.
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THIS AGREEMENT HAS BEEN DULY EXECUTED BY THE AUTHORIZED
REPRESENTATIVES OF THE PARTIES HERETO AS SET FORTH BELOW.
Date:
(SEAL)
ATTEST:
By:
Clerk of the Board
Approved as to Form:
By:
General Counsel
Date:
(SEAL)
ATTEST:
By:
Don Gee, Assistant Secretary
Approved as to Form and Legal Content:
By: /S/5inuJtfI!J 7. Sa&.
Agency Counsel
IVDA
Inland Valley Development Agency,
a joint powers authority
By:
Co-Chair
By:
Co-Chair
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
By:
Maggie Pacheco, Executive Director
4843.3479'{)912.! 8
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ATTACHMENT "A"
Map ofGFC Enterprises, LLC - Lynwood Housing Development Project
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ATTACHMENT A
Location Map
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2007
SINGLE FAMILY INCLUSIONARY HOUSING
OWNER PARTICIPATION AGREEMENT
BY AND BETWEEN
THE REDEVELOPMENT AGENCY OF THE
tit CITY OF SAN BERNARDINO
AND
GFC ENTERPRISES, LLC
(L YNWOOD HOUSING DEVELOPMENT - IVDA REDEVELOPMENT PROJECT AREA)
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2007
SINGLE FAMILY INCLUSIONARY HOUSING
OWNER PARTICIPATION AGREEMENT
((L YNWOOD HOUSING DEVELOPMENT -IVDA REDEVELOPMENT PROJECT AREA)
This 2007 Single-Family Inciusionary Housing Owner Participation Agreement (IVDA
Redevelopment Project Area) (this "Agreement") is dated as of October 1,2007, by and between
the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate
and politic, and GFC Enterprises, LLC, a limited liability company dba Lynwood - GFC
Enterprises, LLC (the "Developer"), in light of the facts set forth in the following paragraphs of the
Recitals:
RECITALS
WHEREAS, as of the "Effective Date" of this Agreement (as this term is defined below),
the Developer owns approximately 7.7 acres of property located on the east side of Lynwood Way
between Byron Street and Amanda Street (APN: 01191-231-40 and 41) (the "Property'') in the
Residential Suburban (RS) land use district of the City of San Bernardino (the "City") which
Property is also within the Inland Valley Development Agency Redevelopment Project Area (the
"Project Area") as adopted by the Inland Valley Development Agency (the "IVDA") in July 1990,
and which Property is being subdivided by the Developer into eighteen (18) residential lots pursuant
to the revised Tentative Tract Map No. 17793 approved by the Planning Commission on September
5,2007; and
WHEREAS, the Developer shall develop and improve each of the eighteen (18) residential
lots pursuant to this Agreement with a New Home, and shall reserve three (3) of such New Homes
for occupancy by Homebuyers whose household income level is that of a person or family of low-
or moderate-income (a "Low- or Moderate-lncome Homebuyer") or the Developer may substitute
other homes or housing units within the Project Area in lieu of said three (3) New Homes in the
manner as hereinafter provided; and
WHEREAS, each of the New Homes under this Agreement shall be developed and
improved under design and improvement standards which are consistent with the City's General
Plan and Development Standards, and such further separate review and approval by the City of the
specific plan of improvement of each lot by the Developer as may hereafter be indicated; and
WHEREAS, the Developer has the background, experience and fmancial capability of
developing the Project as hereinafter described and appears well qualified to secure a construction
financing commitment from a commercial lending institution in support of the Project; and
WHEREAS, the Agency is responsible for complying with the requirements of the
California Community Redevelopment Law ("CRL") and the Redevelopment Plan for the Project
Area which require that fifteen percent (15%) of the housing units developed by private parties
within the Project Area must be set-aside for persons and households who meet the requirements of
low- and moderate-income as established by the CRL.
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NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE AGENCY
AND THE DEVELOPER HEREBY AGREE AS FOLLOWS:
ARTICLE I
TERMS AND CONDITIONS
Section 1.0 I. Integration of all Agreements relating to the Proiect and Definition of Terms.
(a) This Agreement integrates all of the terms and conditions mentioned herein and
supersedes all negotiations, discussions and understandings between the parties with respect to the
Project and all items of assistance, which the Agency may hereafter provide to the Developer.
(b) In addition to the words, which have defined meanings as set forth in the preceding
paragraphs of this Agreement, certain other phrases or terms as used in this Agreement shall have
the meaning set forth as follows:
Adjusted Family Income. The words "Adjusted Family Income" mean "gross income" as
this term is defined in 25 California Code of Regulations Section 6914, for the total annual
income of each individual or family residing or deemed to be residing in the Affordable
New Home.
Affordability Covenant. The words "Affordability Covenant" mean the Agency,
Community Redevelopment Housing Affordability Covenants and Restrictions, by and
between the Low- or Moderate-Income Homebuyer and the Agency pertaining to a
particular Affordable New Home, which has been constructed and completed. A form of
Affordability Covenant is attached hereto as Exhibit "A" and incorporated by this reference
into the text of this Agreement. An Affordability Covenant in appropriate final form shall
be recorded concurrently with the close of each Affordable New Home Escrow for the sale
of each Affordable New Home.
Affordable Housing Cost. The words "Affordable Housing Cost" shall have the meaning
as set forth in Health and Safety Code Section 50052.5, as this section may hereafter be
amended from time-to-time by the State of California. A Low- or Moderate-Income
Homebuyer, and/or the Successor-In-Interest of such Low- or Moderate-Income
Homebuyer, if any, shall pay as its purchase price for the Affordable New Home no more
than the appropriate Affordable Housing Cost as of the applicable Delivery Date.
Affordable New Home. The words "Affordable New Home" mean and refer to each of the
(i) three (3) single-family residential units to be designed, constructed and improved by the
Developer and reserved for sale and occupancy to a Low- or Moderate-Income Homebuyer;
(ii) such other three (3) single-family residential units located elsewhere within the Project
Area for which the Developer has either constructed or caused to be constructed three (3)
new single-family residential dwelling units or has rehabilitated single-family dwelling units
that were previously vacant and not in a habitable condition; and (iii) such other substitute
single-family dwelling units within the Project Area that may be approved in writing by the
Executive Director of the Agency as complying with the requirements of this Agreement.
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Affordable New Home Escrow. The words "Affordable New Home Escrow" mean and
refer to the real estate conveyance transaction or escrow by and between the Developer and
each Low- or Moderate-Income Homebuyer and, subsequently, by and between the Low- or
Moderate-Income Homebuyer and their Successor-in-Interest, during the conveyance and
sale of the Affordable New Home, which shall be accomplished upon the close of the
Affordable New Home Escrow.
Affordable New Home Escrow Holder. The words "Affordable New Home Escrow
Holder" mean and refer to the escrow company designated by the Developer who shall serve
as the escrow holder under the Affordable New Home Escrow by and among such New
Home Escrow Holder, the Developer and a Low- or Moderate-Income Homebuyer, for the
transfer and sale by the Developer of each of the three (3) completed Affordable New
Homes.
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Agency Downpayment Assistance Funds. The words "Agency Downpayment Assistance
Funds" mean and refer to the Agency Low and Moderate Income Housing Funds, which the
Agency may hereafter provide to no more than three (3) Low- or Moderate-Income
Homebuyers of a completed Affordable New Home. The maximum amount of Agency
Downpayment Assistance Funds which may hereafter be provided to each of the three (3)
Low- or Moderate-Income Homebuyers shall not exceed thirty percent (30%) of the gross
sales price of the completed Affordable New Home as provided herein in Section 4.08, but
in no event shall exceed Two Hundred Seventy Thousand Dollars ($270,000) in the
aggregate for the Affordable New Homes.
Agency Low and Moderate Income Housing Fund. The words "Agency Low and
Moderate Income Housing Fund" mean and refer to the special affordable housing fund
established by the Agency for each of its redevelopment project areas and for similar funds
received by the IVDA from those portions of the Project Area within the City in accordance
with the provisions of Health and Safety Code Section 33334.2, et seq.
Completed New Home. The words "Completed New Home" mean and refer to each of the
eighteen (18) new single-family residential units to be designed, constructed and improved
by the Developer and reserved for sale and occupancy to Homebuyers. Three (3) Completed
New Homes shall be constructed and reserved and made available for sale and occupancy by
a Low- or Moderate-Income Homebuyer designated by the Developer unless such New
Homes as substituted in a manner as hereinafter provided.
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Completed New Home Purchase Price. The words "Completed New Home Purchase
Price" mean and refer to the applicable purchase price payable by the Homebuyer to the
Developer for the purchase of each Completed New Home at the close of the applicable
New Home Escrow. The Completed New Home Purchase Price includes the cost of options
and upgrades to the Completed New Home, which are installed in the New Home prior to
the close of the New Home Escrow and paid for by the Homebuyer. The Completed New
Home Purchase Price for an Affordable New Home shall be an amount which does not
exceed the affordability requirements for Low- or Moderate-Income Households under
California Health and Safety Code Section 50052.5(b)(3) and (4), as applicable, at the time
of the close of the Affordable New Home Escrow.
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Delivery Date. The words "Delivery Date" mean the close of a New Home Escrow for a
particular Completed New Home, at which time, title and possession of a Completed New
Home shall be delivered by the Developer to the Homebuyer.
Development Project Cost Pro Forma. The words "Development Project Cost Pro
Forma" mean and refer to the Development Project Cost Pro Forma dated July 18, 2007, on
file with the Agency Secretary. The Development Project Cost Pro Forma sets forth the
Developer's best estimate as of the Effective Date of the cost to develop, construct and sell
each of the Completed New Homes to Homebuyers, in accordance with the terms of this
Agreement. The Development Project Cost Pro Forma includes an estimated gross sales
price for each Completed New Home and an estimate of the total amount of New Home
Sales Costs.
Effective Date. The words "Effective Date" mean and refer to the date on which this
Agreement has been fully executed by the officers or representatives of the parties and the
conditions of Section 1.05 have been satisfied.
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Environmental Laws. The words "Environmental Laws" mean all federal, state, local, or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or
requirements of any government authority regulating, relating to, or imposing liability of
standards of conduct concerning any hazardous substance (as later defined), or pertaining to
occupational health or industrial hygiene (and only to the extent that the occupational health
or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on,
under, or about the Site), occupational or environmental conditions on, under, or about the
Site or Sales Office, as now or may at any later time be in effect, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA") [42 USC Section 9601, et seq.]; the Resource Conservation and
Recovery Act of 1976 ("RCRA") [42 USC Section 6901 ,et seq.]; the Clean Water Act, also
known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251, et
seq.]; the Toxic Substances Control Act (''TSCA'') [15 USC Section 2601, et seq.]; the
Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801, et seq.]; the
Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901, et seq.]; the Clean Air Act
[42 use Section 7401, et seq.]; the Safe Drinking Water Act [42 USC Section 300(f), et
seq.]; the Solid Waste Disposal Act [42 use Section 6901, et seq.]; the Surface Mining
Control and Reclamation Act [30 USC Section 101, et seq.]; the Emergency Planning and
Community Right to Know Act [42 USC Section 11001, et seq.]; the Occupational Safety
and Health Act [29 USC Section 655 and 657]; the California Underground Storage of
Hazardous Substances Act [H & S C Section 25288, et seq.]; the California Hazardous
Substances Account Act [H & S C Section 25300, et seq.]; the California Safe Drinking
Water and Toxic Enforcement Act [H & S C Section 24249.5, et seq.]; and the Porter-
Cologne Water Quality Act [Water Code Section 13000, et seq.] together with any
amendments of or regulations promulgated under the statutes cited above and any other
federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted
that pertains to occupational health or industrial hygiene, and only to the extent the
occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous
substances on, under, or about the Site, or the regulation or protection of the environment,
including ambient air, soil, soil vapor, groundwater, surface water or land use.
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Hazardous Substances. The words "Hazardous Substances" mean and include, without
limitation:
those substances included within the definiteness of "hazardous substance,"
"hazardous waste," "hazardous material," "toxic substance," "solid waste," or
"pollutant or contaminate" in CERCLA, RCRA, TSCA, HMTA, or under any other
environmental law; and
those substances listed in the United States Department of Transportation (DOT)
Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous
substances [40 CFR Part 302]; and
other substances, materials, and wastes that are or become regulated or classified as
hazardous or toxic under federal, state, or local laws or regulations; and
any material, waste or substance that is:
(I) a petroleum or refined petroleum product,
(2) asbestos,
(3) polychlorinated biphenyl,
(4)
designated as a hazardous substance pursuant to 33 USC Section 1321
or listed pursuant to 33 USC Section 1317,
(5) a flammable explosive, or
(6) a radioactive material.
Homebuyer. The word "Homebuyer" means and refers to each person or family who may
hereafter purchase one (1) of the eighteen (18) Completed New Homes from the Developer,
and includes a Low- or Moderate-Income Homebuyer.
Impact Fees. The words "Impact Fees" mean and refer to those certain City imposed
development impact fees that are currently in effect or are hereafter applicable to the
construction and development of the New Homes during the term of this Agreement. The
Agency assistance in an amount equal to One Hundred Thousand Dollars ($100,000) shall
be used and applied by the Developer for the payment in part of the Impact Fees attributable
to the three (3) Affordable New Homes.
Low- or Moderate-Income Household. The words "Low- or Moderate-Income
Household" mean and refer to "persons and families of low- or moderate-income" as this
term is defined in Health and Safety Code Section 50093, as this section may be hereafter
amended, from time to time, by the State of California.
Low- or Moderate-Income Homebuyer. The words "Low- or Moderate-Income
Homebuyer" mean and refer to each of the three (3) purchasers ofa constructed Affordable
New Home that has been designated by the Developer to receive Agency Downpayment
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Assistance Funds, and includes all persons identified as having a vested property ownership
interest in the Affordable New Home as of the close of the Affordable New Home Escrow.
At the close of each Affordable New Home Escrow, such occupants shall have an annual
Adjusted Family Income which does not exceed the household income qualification limits
of a Low- or Moderate-Income Household.
New Home. The words "New Home" mean and refer to each of the eighteen (18) single-
family residential dwelling units (including the associated landscape improvements) as shall
be constructed and installed by the Developer.
New Home Escrow. The words "New Home Escrow" mean andrefer to the real estate
conveyance transaction or escrow by and between the Developer and each Homebuyer in the
Project, except for the three (3) Low- or Moderate-Income Homebuyers.
New Home Escrow Holder. The words "New Home Escrow Holder" mean and refer to the
escrow company designated by the Developer who shall serve as the escrow holder under
the New Home Escrow by and among such New Home Escrow Holder, the Developer and a
Homebuyer, other than a Low- or Moderate-Income Homebuyer, for the transfer and sale by
the Developer of the each Completed New Home.
Notice of Agency Concurrence. The words "Notice of Agency Concurrence" mean and
refer to the acknowledgment executed by the Executive Director of the Agency and
delivered to the holder of the Affordable New Home Escrow in which the Agency confirms
that the proposed Low- or Moderate-Income Homebuyer appears to satisfy all of the
Adjusted Family Income and other requirements of the Affordability Covenant for
occupancy ofthe Affordable New Home.
Project. The word "Project" means and refers to the development of a New Home on each
of the eighteen (18) residential lots by the Developer located on approximately 7.7 acres on
the east side of Lynwood Way between Payton Street and Amanda Street (APN: 01191-231-
40 and 41), and the reservation of three (3) of these New Homes for occupancy by a Low- or
Moderate-Income Homebuyer. The Project is more particularly described herein in the
Scope of Development by the Developer in Section 3.01. The Project shall be undertaken
by the Developer in accordance with the dates set forth in the Schedule of Performance
requirements described herein in Section 3.02.
Qualified Residence Period. The words "Qualified Residence Period" mean in the case of
each completed Affordable New Home, the forty-five (45) year period of time beginning on
the Delivery Date and ending on that date, forty-five (45) years thereafter.
Real Estate Sales and Marketing Work. The words "Real Estate Sales and Marketing
Work" refer to the services to be provided by the Developer which relate to the marketing of
each Completed New Home for sale to a Homebuyer. The Real Estate Sales and Marketing
Work includes, without limitation, the presentation of each Completed New Home to one (1)
or more Homebuyers for the purpose of causing such prospective Homebuyer to purchase a
Completed New Home from the Developer.
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Section 1.02. Parties to the Agreement.
(a) The Agencv. The Agency is a public body, corporate and politic, exercising
governmental functions and powers and organized and existing under Chapter 2 of the CRL of the
State of California (Health and Safety Code Section 33000, et seq.). The principal office of the
Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401.
(b) The Developer. The Developer is GFC Enterprises, LLC, a limited liability
company, dba Lynwood - GFC Enterprises, LLC, for the completion of the Project. The principal
office and mailing address of the Developer for purposes of this Agreement is 434 North Second
Avenue, Upland, California 91786.
Section 1.03. Prohibition against Change In Ownership. Management and Control of
Developer and Assignment of Agreement.
The qualifications and identity of the Developer are of particular concern to the Agency. It
is because of those qualifications and identity that the Agency has entered into this Agreement with
the Developer. No voluntary or involuntary successor-in-interest of the Developer shall acquire any
rights or powers under this Agreement except as expressly set forth herein.
Except as set forth herein in Section 3.04, prior to the completion of the Project, the
Developer shall not assign all or any part of this Agreement, or any rights hereunder, without the
prior written approval of the Executive Director of the Agency.
The Developer shall promptly notify the Agency in writing of any material change in the
identity of the parties either comprising or in control of the Developer, as well as any and all
changes in the interest or the degree of control of the Developer by any such party, of which
information the Developer or any of its partners or officers has been notified or may otherwise have
knowledge or information. This Agreement may be terminated by the Agency prior to the full
execution of this Agreement, if there is any material change, whether voluntary or involuntary, in
membership, ownership, management or control of the Developer (other than such changes
occasioned by the death or incapacity of any individual shareholder or officer) that has not been
approved by the Agency prior to the time of such change or the Agency may seek other appropriate
relief in the event that at any time following the full execution of this Agreement such a material
change occurs in the ownership or control of the Developer, or the Developer's interest under the
Agreement; provided, however, that the Agency shall first notify the Developer in writing as set
forth in Section 6.01, of its intention to terminate this Agreement or assert any other remedy under
this Agreement.
Notwithstanding any other provision of this Agreement to the contrary, Agency approval of
an assignment of this Agreement shall not be required in connection with any transfer to a limited
liability company, partnership, corporation, or other entity or entities in which GFC Enterprises,
LLC or other such affiliate retains management and control of the transferee entity.
For the purpose of this Section 1.03, the words "material change" refer to any total or partial
sale, assignment, or conveyance, or any trust power or any transfer in any other mode or form by
the Developer of more than a forty-nine percent (49%) interest of the ownership of the Developer
and/or a series of such sales, assignments or conveyances which in the aggregate exceed a
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disposition or change of more than a forty-nine percent (49%) interest of the ownership of the
Developer.
Section 1.04. Benefit to Proiect Area.
The Agency has determined that the development of the Project by the Developer in
accordance with this Agreement will eliminate blight and provide needed affordable housing to the
Project Area, as well as to areas in proximity thereto, which housing is needed due to the
insufficiency of new affordable housing within the City, generally, the development of the Project
within the Project Area to make available the three (3) Affordable New Homes will assist the
Agency in complying with the inc1usionary housing requirements as set forth in the CRL.
Section 1.05. Effective Date.
(a) The Effective Date shall occur when this Agreement has been fully executed by the
parties and the Executive Director of the Agency has confirmed that the Developer has provided the
Agency with satisfactory evidence of the Developer's compliance with the insurance coverage
protections in favor of the Agency as set forth in Section 3.03.
(b) In the event that the Developer fails to provide satisfactory evidence of insurance
coverage within sixty (60) days following the full execution of this Agreement, then regardless of
whether this Agreement may have been executed by one (1) of the parties prior to such date,
thereafter, this Agreement shall have no further force and effect and the parties shall be mutually
discharged from any further responsibility or liability to the other party which may otherwise arise
under this Agreement; provided, however, that the Developer shall have the obligation to provide
the three (3) Affordable New Homes as required by the conditions of approval as imposed upon the
Developer and the Project through the City approval and entitlement process
ARTICLE II
Section 2.01. Satisfaction of Conditions.
Each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfY any
of the conditions of this Agreement, and if the condition requires the approval of a party, such
approval shall be the respective party's sole and absolute responsibility.
Either party may waive any of the conditions set forth in this Agreement, but any such
waiver shall be effective only if contained in a writing signed by both parties.
Section 2.02. Termination.
In addition to the right of the Agency to terminate this Agreement pursuant to Section 1.03,
in the event that any condition set forth in this Agreement, whether explicitly stated or implied, is
not satisfied within one hundred eighty (180) days after the Effective Date of this Agreement or
waived by the applicable party pursuant to Section 2.01, either party may, at its option, terminate
this Agreement, thereby releasing the parties from further obligations hereunder, and thereafter, all
documents delivered by the Developer to the Agency shall be returned to the Developer and all
documents delivered by the Agency to the Developer shall be returned to the Agency. Nothing in
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this Section 2.02 shall be construed as releasing any party from liability for any default of its
obligations hereunder or breach of its representations and warranties under this Agreement
occurring prior to the termination of this Agreement. The obligations of the Developer to provide
the three (3) Affordable New Homes shall survive any termination of this Agreement unless and
until either (i) the Developer has provided the three (3) Affordable New Homes .or substitute
dwelling units as allowed pursuant to this Agreement, or (ii) the zoning for the Property has been
changed to a zoning designation other than residential and a development other than a residential
development has been constructed upon the Property.
Section 2.03. Representations and Warranties.
(a) Warranties and Representations bv the Agencv. The Agency hereby makes the
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by the Developer has been made in material reliance by the Developer on ~uch
covenants, representations and warranties:
(i) Warranties True. Each and every undertaking and obligation of the Agency
under this Agreement shall be performed by the Agency timely when due; and all
representations and warranties of the Agency under this Agreement and its Exhibits shall be
true in all material respects as of the Effective Date.
(ii) Due Organization. The Agency is a community redevelopment agency, duly
formed and operating under the laws of the State of California. The Agency has the legal
power, right and authority to enter into this Agreement and to execute the instruments and
documents referenced herein, and to consummate the transactions contemplated hereby.
(iii) ReQuisite Action. The execution of this Agreement has been duly approved
by the governing body of the Agency.
(iv) Execution of Agreement. The persons executing any instruments for or on
behalf of the Agency have been authorized to act on behalf of the Agency in furtherance of
the implementation and fulfillment of the Agency commitments under this Agreement.
(v) Use of Agencv Low- and Moderate-Income Housing Funds. The sole source
of funds, which the Agency will use to provide the Agency Down Payment Assistance and
the Impact Fees, has been derived from the Agency's Low- and Moderate-Income Housing
Funds and from no other source of funds of the Agency or the City as contemplated pursuant
to Labor Code Section 1720(c)(4), and the Agency reasonably believes that the use of the
Agency's Low- and Moderate-Income Housing Fund does not require the construction of
any of the New Homes to be deemed a "public work" pursuant to Labor Code Section 1720.
The Agency understands that the Developer is relying on this representation in determining
whether the construction of the New Homes portion of the Project is a "public work" under
Labor Code Section 1720.
(b) Warranties and Reoresentations bv the Developer. The Developer hereby, to the best
of its knowledge, makes the following representations, covenants and warranties and acknowledges
that the execution of this Agreement by the Agency has been made in material reliance by the
Agency on such covenants, representations and warranties:
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(i) The Developer is a duly organized and validly existing California lirnited
liability company. The Developer has the legal right, power and authority to enter into this
Agreement and the instruments and documents referenced herein and to consummate the
transactions contemplated hereby. The persons executing this Agreement and the
instruments referenced herein on behalf of the Developer hereby represent and warrant that
such persons have the power, right and authority to bind the Developer.
(ii) The Developer has taken all requisite action and obtained all requIsIte
consents in connection with entering into this Agreement and the instruments and
documents referenced herein and the consummation of the transactions contemplated
hereby, and no consent of any other party is required for the Developer's authorization to
enter into this Agreement.
(iii) This Agreement is, and all agreements, instruments and documents to be
executed by the Developer pursuant to this Agreement shall be, duly executed by and are or
shall be valid and legally binding upon the Developer and enforceable in accordance with
their respective terms.
(iv) The Development Project Cost Pro Forma dated July 18, 2007, as prepared
by the Developer and on file with the Agency Secretary, is to the best information and belief
of the Developer, a fair and reasonable presentation of the costs, expenses and gross
Completed New Home sale proceeds which the Developer expects to incur as of the
Effective Date with respect to the development of the Project.
(v) The books and accounting records of the Developer with respect to the
improvement of the Completed New Homes and performance of any of the work and the
final accounting for New Home Sales Cost Certificate for Completed New Homes, shall
conform to the financial accountability standards of the Office of Management and Budget
Circular A-II 0, as evidenced by a notarized statement by the certified public accountant.
(vi) Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby shall result in a breach of or constitute a default under any
other agreement, document, instrument or other obligation to which the Developer is a party
or by which the Developer may be bound, or under law, statute, ordinance, rule,
governmental regulation or any writ, injunction, order or decree of any court or
governmental body applicable to the Developer.
(vii) The Developer represents and warrants to the Agency that the Developer
shall not accept any other financial assistance from any other public agency in connection
with the Project, including the City, unless the Developer first complies with the applicable
provisions of Labor Code Section 1720 in connection with its acceptance of such other
assistance.
(viii) The representations and warranties of the Developer contained in this Section
2.03(b) shall be based upon the actual knowledge of only those employees of the Developer
who have participated in the negotiation of this transaction and preparation of this
Agreement.
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All representations and warranties contained in this Section 2.03(b) are true and correct on
the date hereof and on the Effective Date.
(c) Change in Facts. If either party becomes aware of any act or circumstance which
would change or render incorrect, in whole or in part, any representation or warranty made by such
party under this Agreement, whether as of the Effective Date or any time thereafter, and whether or
not such representation or warranty was based upon such party's knowledge and/or belief as of a
certain date, such party will give immediate written notice of such changed fact or circumstance to
the other party, but such notice shall not release such party of its liabilities or obligations with
respect thereto.
ARTICLE III
DEVELOPMENT OF THE PROJECT
Section 3.01. Scope of Development bv Developer.
(a) It is the intent of the parties that the Project shall be developed as follows: (i) the
construction by the Developer on each of the eighteen (18) residential lots, with a minimum lot size
of 11,000 square feet, a single-family detached residential home, together with all on- and off-site
improvements such as streets, curbs, sidewalks, storm drains, gutters, utilities, etc., with three (3) of
such New Homes to be reserved for occupancy by a Low- or Moderate-Income Homebuyer as
Affordable New Homes. The specific components of the design construction and improvement of
each Completed New Home is more particularly set forth herein. The approval of this Agreement
by the Agency shall concurrently approve the Scope of Development. Any material change to the
Scope of Development (or a series of individual changes which are cumulatively material) shall be
subject to the prior review and approval of the Agency through the Executive Director of the
Agency.
(b) The City's zoning ordinance and building requirements will be applicable to the
development and use of the Completed New Homes on each residential lot. The Developer
acknowledges that the plan for development of the New Homes as set forth in the Scope of
Development shall be subject to the City's zoning ordinance and building requirements. No action
by the Agency or the City with respect to the consideration, review or approval of this Agreement
or related documents shall be deemed to constitute a waiver of any lawful City requirements which
are applicable to the Developer or the Project, or to any successor-in-interest of the Developer, or
any successor-in-interest pertaining to the Project, except by modification or development variance
as may specifically relate to such proposed work of improvement by the Developer which is
approved by the City.
(c) The Completed New Homes shall be constructed and improved on the residential
lots in conformance with the Scope of Development and any and all other plans, specifications and
similar development documents required by this Agreement, except for such changes as may be
mutually agreed upon in writing by and between the Developer and the Agency, which mutual
approval of any such change shall not be unreasonably conditioned, withheld or delayed. The
approval by the City of any element of the Project, which may be subject to the ministerial
regulatory review of the City, shall be deemed to be approved by the Agency.
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(d) The approval of the Scope of Development by the Agency hereunder shall not be
binding upon the Mayor and Common Council of the City or the Planning Commission of the City
with respect to any regulatory approvals relating to the improvement of the Project or the
Completed New Homes and/or the public improvements necessary for the development of the
Project as may be required by such other public agencies. If any material change of the Scope of
Development as previously approved by the Agency shall be required by another government
official, agency, department or bureau having jurisdiction over the development of the Project, the
Agency shall not umeasonably withhold or delay approval of such revisions to the Scope of
Development as the Developer may reasonably request.
(e) Subject to the Developer's right to seek an appeal or modification of one (1) or more
development conditions relating to the Project, as may hereafter be imposed by the City or any other
regulatory agency with jurisdiction over the Project, the Developer agrees to accept and comply
fully with any and all lawful and reasonable final conditions of approval applicable to all permits
and other govermnental actions affecting the Project or the improvement of each residential lot with
a Completed New Horne.
(f) The Developer shall cause landscaping plans for the front yard only in connection
with the improvement of each New Horne on each residential lot to be prepared by a licensed
landscape contractor or architect. The Developer shall prepare and submit preliminary and final
landscaping plans for the front yard as part of the improvement of each New Horne to the City for
its approval, which are consistent with City Code requirements. These plans shall be timely
prepared, submitted and approved so as to complete the Project within the time specified in Section
3.02 herein.
(g) The Developer shall prepare and submit development plans, construction drawings
and related documents for the improvement of each of the eighteen (18) New Homes consistent
with the Scope of Development and the Schedule of Performance to the City. The development
plans, construction drawings and related documents submitted by the Developer to the City shall be
in the form of final drawings, plans and specifications. Such final drawings, plans and
specifications are hereby defined as those which contain sufficient detail necessary to obtain a
building permit from the City for the construction of each New Home.
(h) During the preparation of all drawings and plans in connection with the improvement
of the New Homes and the public improvements necessary for the Project, the Developer shall
provide to the Agency, regular progress reports to advise the Agency of the status of the preparation
by the Developer, and the submission to and review by the City of construction plans and related
documents. The Developer shall communicate and consult with the Agency as frequently as is
necessary to ensure that any such plans and related documents submitted by the Developer to the
City are being processed in a timely manner.
(i) The Agency shall have the right to review all plans, drawings and related documents
pertinent to the development of the improvement of each New Home in order to ensure that-they are
consistent with this Agreement and with the Scope of Development.
(j) The Developer shall timely submit to the City for its review and approval, any and
all plans, drawings and related documents pertinent to the development of the Project, as required
by the City. The Agency shall cooperate with and shall assist the Developer in order for the
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Developer to obtain the approval of any and all development plans, construction drawings and
related documents consistent with this Agreement submitted by the Developer to the City as
promptly as feasible following the City's receipt of such plans. Any failure by the City to approve
any of such plans or to issue necessary permits for the development of the Project within sixty (60)
calendar days following submission by the Developer to the City of complete and correct plans shall
constitute an enforced delay hereunder, and the Schedule of Performance shall be extended by that
period of time beyond a sixty (60) calendar day period in which the City approves said plans;
provided, however, that in the event that the City disapproves of any of such plans, the Developer
shall within thirty (30) calendar days after receipt of such disapproval revise and resubmit such
plans in accordance with the City's requirements and in such form and substance so as to obtain the
City's approval thereof.
(k) [RESERVED]
(I) The Agency shall approve any modified or revised plans, drawings and related
documents to which reference is made in this Agreement as long as such modified or revised plans,
drawings and related documents are generally consistent with the Scope of Development, and do
not, in the reasonable opinion of the Executive Director of the Agency, require a material change or
adjustment in the estimated New Home Sale Costs shown in the Development Project Cost Pro
Forma and are consistent with the other plans for the improvement of the New Homes which have
been approved by the Agency. Upon any disapproval of such modified or revised plans, drawings
or related documents, including the Development Project Cost Pro Forma, the Agency shall state in
writing the reasons for such disapproval. The Developer, upon receipt of any notice of disapproval,
shall promptly revise such disapproved portions of the plans, drawings or related documents in a
manner that addresses the reasons for disapproval and reasonably meets the requirements of the
Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such
revised plans, drawings and related documents to the Agency as soon as possible after its receipt of
the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The
Agency shall approve or disapprove such revised plans, drawings and related documents in the
same manner and within the same times as provided in this Section for approval or disapproval of
plans, drawings and related documents initially submitted to the Agency, and ifno specific time for
approval is specified then the Agency shall so approve or disapprove the proposed modifications or
revisions promptly upon the written request of the Developer.
(m) If the Developer desires to make any material change in the final construction
drawings, plans and specifications or related documents, including the Development Project Cost
Pro Forma after their approval by the Agency and/or the City, the Developer shall submit the
proposed change in writing to the Agency and/or the City for approval. The Agency shall notify the
Developer of approval or disapproval thereof in writing within thirty (30) calendar days after
submission to the Agency. This thirty (30) calendar day period may be extended by mutual consent
of the Developer and the Agency. Any such change shall, in any event, be deemed to be approved
by the Agency unless rejected, in whole or in part, by written notice thereof submitted by the
Agency to the Developer, setting forth in detail the reasons therefore, and such rejection shall be
made within said thirty (30) calendar day period unless extended as permitted herein. The Agency
shall use its best efforts to cause the City to review.and approve or disapprove any such change as
provided in Section 3.01(j) hereof.
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(n) The Developer, upon receipt of written notice of disapproval of a proposed change in
construction drawings, plans and specifications by the Agency and/or the City, may revise such
portions of the proposed change in construction drawings, plans and specifications and related
documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the City
for approval in the manner provided in Section 3.01(j) hereof.
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(0) The Developer shall have the right, during the course of construction, to make
changes in construction concerning the interior design of the New Homes and "minor field
changes" with respect to the New Homes, and to make "minor field changes" to the public
improvements necessary for the development of the Project without seeking the approval of the
Agency; provided, however, that such changes do not materially affect the costs or income for the
Project as presented in the Development Project Cost Pro Forma or the ability of the City to approve
the completion of construction of the New Home for purposes of authorizing the lawful occupancy
thereof, or the acceptance by the City of the public improvements necessary for the development of
the Project; and further, provided that the City has approved any such "minor field changes" to
either a New Home or the public improvements necessary for the development of the Project in
accordance with the standards and practices of the City Building Department and/or City Public
Works Department, as applicable. Said "minor field changes" shall be defined as those changes
from the approved final construction drawings, plans and specifications which have no substantial .
effect on the improvements and are made in order to expedite the work of construction in response
to field conditions. Nothing contained in this subsection shall be deemed to constitute a waiver of
or change in the City's Building Code or Public Works Department requirements governing such
"minor field changes" or in any and all approvals by the City otherwise required for such "minor
field changes".
(P) The cost of constructing the New Homes and all other improvements on the Project
shall be paid for by the Developer. To the extent that the Developer may be eligible to seek a
credit, which is generally available to any other similarly situated owner of land on which a former
residential dwelling unit has been demolished, for the payment of public school capital facilities
impact fees, in whole, or in part, upon the construction of a New Home, the Developer may seek
and obtain such a credit from the San Bernardino City Unified School District.
(q) The Developer shall pay the school capital facility development improvement fees as
required and at the time specified by the San Bernardino City Unified School District; provided that
the Developer may seek exemptions or modifications to the required fees. All other development
fees imposed by the City as a condition of issuance of any permit for the development of the Project
shall be paid by the Developer to the City at the time of issuance of each such permit or, subject to
the approval of the City in its discretion, at the close of each New Home Escrow, or Affordable
New Home Escrow, pursuant to the terms of the City's Development Fee Deferral program as may
then be in effect.
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(r) The Developer shall, at its expense, cause to be prepared, and shall pay any and all
fees pertaining to the review and approval thereof by the City, all required construction, planning
and other documents reasonably required by governmental bodies pertinent to the development of
the Project hereunder, including, but not limited to, the public improvements necessary for the
development of the Project and to the specifications, drawings, plans, maps, permit applications,
land use applications, zoning applications and design review documents for the New Homes.
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(s) The Developer shall pay for any and all costs, including, but not limited to, the costs
of design, construction, relocation and securing of permits for utility improvements and
connections, which may be required in developing the Project. The Developer shall obtain any and
all necessary approvals prior to the commencement of applicable portions of the construction of the
Project, and the Developer shall take reasonable precautions to ensure the safety and habitability of
surrounding properties during the construction of the Project.
(t) The Developer shall begin and complete all construction and development of the
Project and timely undertake all obligations and responsibilities of the Developer in order to
complete the Project within twelve (12) months from the Effective Date of this Agreement as set
forth in the Schedule of Performance and the dates as provided in Section 3.02 hereof, or within
such reasonable extensions of such times as may be granted by the Executive Director of the
Agency or as otherwise provided for in this Agreement. The Schedule of Performance shall be
subject to revisions, from time to time, as mutually agreed upon in writing by and betweeR the
Developer and the Executive Director of the Agency. Any and all deadlines for performance by the
parties shall be extended for any times attributable to delays which are not the fault of the
performing party and are caused by the other party, other than periods for review and approval or
reasonable disapprovals of plans, drawings and related documents, specifications or applications for
permits as provided in this Agreement.
(u) The Developer shall, at its own expense, secure or shall cause to be secured, any and
all permits, which may be required for the construction, development or work of the Project by the
City or any other governmental agency having jurisdiction thereof.
(v) Officers, employees, agents, or representatives of the Agency and the City shall have
the right of reasonable access to the Project site, during normal business hours, during the period of
construction for the purposes of monitoring the Developer's performance under this Agreement
upon not less than forty-eight (48) hours prior written notice to the Developer.
Section 3.02. Schedule of Performance.
The Developer shall construct the eighteen (18) single-family detached residential homes, of
which three (3) shall be Affordable New Homes, within twelve (12) months after the Effective Date
of this Agreement, and shall. ensure the timely delivery of all Completed New Homes by December
31,2008, and the sale to Homebuyers on or before said date, including the three (3) Affordable
New Homes.
The Agency expressly requires that each of the three (3) Affordable New Home Escrow
closings occur no later than December 31, 2008. The Developer understands such Agency
limitation and hereby acknowledges that in the event the three (3) Affordable New Home Escrow
closings have not occurred by December 31, 2008, no Agency Downpayment Assistance Funds will
thereafter be made available for the Project.
Section 3.03. Insurance Coverage of Develooer.
By no later than the date indicated in Section 1.05, the Developer shall furnish, or shall.
cause to be furnished to the Agency, duplicate originals or appropriate certificates of public
indemnity and liability insurance in the amount of Two Million Dollars ($2,000,000) combined
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single limit, naming the Agency, the City and the elected officers, officials, employees, attorneys
and agents of both such public entities, as additional insureds. Said insurance shall cover
comprehensive general liability including, but not limited to, contractual liability; acts of
subcontractors; premises-operations; explosion, collapse and underground hazards, if applicable;
broad form property damage, and personal injury including libel, slander and false arrest. In
addition, the Developer shall provide to the Agency, adequate proof of comprehensive automobile
liability insurance covering owned, non-owned and hired vehicles, combined single limit in the
amount of One Million Dollars ($1,000,000) for each occurrence; and proof of workers'
compensation insurance. Any and all insurance policies required hereunder shall be obtained from
insurance companies admitted in the State of California and rated at least a B+: XII in Best's
Insurance Guide, or in special circumstances, be pre-approved by both the Executive Director of the
Agency and the Agency Counsel. All said insurance policies shall provide that they may not be
cancelled unless the Agency and the City receive written notice of cancellation at least thirty (30)
calendar days prior to the effective date of cancellation. Any and all insurance obtained by the
Developer hereunder shall be primary to any and all insurance which the Agency and/or the City
may otherwise carry, including self insurance, which for all purposes of this Agreement shall be
separate and apart from the requirements of this Agreement. Any insurance policies governing the
Project as obtained by the Agency shall not be transferred from the Agency to the Developer.
Appropriate insurance means those insurance policies approved by the Agency Counsel consistent
with the foregoing. Any and all insurance required hereunder shall be maintained and kept in force
until the "Release Date" as this term is defined in Section 4.10.
Section 3.04. Prohibition against Transfer Prior to Release Date.
(a) Prior to the Release Date, the Developer shall not, without prior written approval of
the Agency or except as permitted by this Agreement, (i) assign or attempt to assign this Agreement
or any right herein or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or
assignment of any portion of the Project, or permit to be placed on any portion of the Project any
unauthorized mortgage, trust deed, deed of trust, encumbrance or lien. This prohibition shall not
apply to any of the following: (1) the reasonable grant by the Developer of utility easements or
permits to facilitate the development of the Project; (2) the assignment of all of the Developer's
rights and obligations in this Agreement to a limited liability company of which the Developer
and/or an affiliate of the Developer is the managing member (and the assumption of such obligation
by such limited liability company); (3) any permitted construction financing interest under Section
3.05; and (4) sales by the Developer of individual Completed New Homes, subject to the provision
of Section 4.10.
(b) In the absence of any specific written agreement or approval by the Agency, no
unauthorized sale, transfer, conveyance, lease, leaseback or assignment of any portion of the Project
shall be deemed to relieve the Developer or any other party from any obligations under this
Agreement.
(c) The Developer shall not lease or rent any Completed New Home for commercial or
residential occupancy by any person, pending final sale to a Homebuyer, or in the case of an
Affordable New Home pending final sale to a Low- or Moderate-Income Homebuyer.
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Section 3.05. Securitv Financing; Right of Holders.
(a) The words "mortgage" and "deed of trust" as used herein shan be deemed to include
an other customary and appropriate modes of financing real estate construction and land
development. Notwithstanding any provision of Section 3.03 to the contrary, mortgages, deeds of
trust, or any other form of lien required for any reasonable method of financing the construction and
improvement of the Project are permitted before the completion of the Project. The Developer shall
notify the Agency, in writing, in advance of any mortgage, deed of trust, or other form of lien for
fmancing of the Project, which the Developer proposes to be secured by the Project before the
recordation of any such Project-related construction financing security interests. The Developer
shall not enter into any such conveyance for construction fmancing without the prior written
approval of the Agency, which approval the Agency shall grant if: (i) any such conveyance is given
to a responsible financial or lending institution including, without limitation, banks, savings and
loan institutions, insurance companies, real estate investment trusts, pension programs and the like,
or other acceptable persons or entities for the purpose of financing the construction of the New
Homes, and (ii) such loan contains customary construction lender disbursement controls.
(b) The Developer shall promptly notifY the Agency of any mortgage, deed of trust or
other refinancing, encumbrance or lien that has been created or attached thereto prior to completion
of the construction of the New Homes whether by voluntary act of the Developer or otherwise;
provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given
by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien.
(c) The holder of any mortgage, deed of trust or other security interest authorized by this
Agreement shan in no manner be obligated by the provisions of this Agreement to construct or
complete the Project or to guarantee such construction or completion; provided, however, that each
surety under any completion and payment surety bond delivered by the Developer to the City, if
any, under the terms of any off-site improvement permit issued by the City to the Developer, shan
not, by the virtue of any term of this Agreement, be deemed to be discharged from its obligation to
the City as arises under such surety.
(d) In the event of a default or breach by the Developer of a mortgage, deed of trust or
other security interest with respect to the Project prior to the completion of the Project, and the
holder of such security interest has not exercised its option to complete the Project, the Agency may
cure the default of the Developer, but is under no obligation to do so prior to completion of any
foreclosure. In the event that the Agency may cure any such default by the Developer, the Agency
shall be entitled to reimbursement from the Developer of an costs and expenses incurred by the
Agency in curing the default. The Agency shan also be deemed to have a lien of the Agency as
may arise under this Section 3.05(d) upon the Project to the extent of such costs and disbursements.
Any such lien shan be subordinate and subject to mortgage, deed of trust or other security
instrument executed by the Developer encumbering the Project.
Section 3.06. Prooertv Taxes and Assessments.
The Developer shall pay, prior to delinquency, all real property taxes and assessments
assessed and levied on or against the Project property between the time of the full execution of this
Agreement and prior to the close of each New Home Escrow or Affordable New Horne Escrow.
Nothing herein shall be deemed to prohibit the Developer from contesting the validity or amounts of
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any tax assessment, encumbrance or lien, on any lot within the Project following the full execution
of this Agreement, nor to limit the remedies available to the Developer in respect thereto.
ARTICLE IV
USE AND DISPOSITION OF THE AFFORDABLE NEW HOMES BY THE DEVELOPER
Section 4.01. Uses of the Affordable New Homes.
(a) The Developer covenants and agrees for itself, its successors and assigns that three
(3) of the eighteen (18) residential lots within the Project shall be developed, constructed, improved
with an Affordable New Home as set forth in Section 3.01, and each of these completed Affordable
New Homes shall be reserved by the Developer for sale and occupancy by Low- or Moderate-
Income Homebuyers, whose Adjusted Family Income at the time of initial occupancy of a
completed Affordable New Home does not exceed the household income qualification limits of a
Low- or Moderate-Income Household.
(b) The Developer shall cause to be recorded, at the time of closing of each Affordable
New Home Escrow, the fully executed form of the Affordability Covenant. The final form of the
Affordability Covenant shall be delivered to the Affordable New Home Escrow Holder for
execution by the Developer and the Low- or Moderate-Income Homebuyer at the time of closing of
each applicable Affordable New Home Escrow. If the Low- or Moderate-Income Homebuyer may
use Agency Downpayment Assistance Funds for the purchase of the Affordable New Home from
the Developer, the Low- or Moderate-Income Homebuyer and the Agency shall execute a separate
set of affordability covenants in favor of the Agency to evidence the obligation of the Low- or
Moderate-Income Homebuyer to the Agency which arise by virtue of the Qualified Homebuyer's
acceptance of Agency Downpayment Assistance Funds under such Agency program.
(c) The Developer further covenants and agrees for itself, its successors and assigns that
each of the three (3) lots within the Project designated for an Affordable New Home shall be
improved, developed and used in accordance with the Scope of Development in Section 3.01.
Developer covenants to develop and use the designated Affordable New Home lots in conformity
with all applicable laws.
Section 4.02. Disposition of the Completed New Homes to Homebuvers and Special
Provisions for Affordable New Home Escrows.
(a) Each Completed New Home shall be transferred and sold to a Homebuyer through a
New Home Escrow.
(b) Upon the completion of improvement of an Affordable New Home by the Developer
on each of three (3) lots as may later be determined by the Developer, the Developer shall transfer
and sell all of its right, title and interest in such completed Affordable New Home to a Low- or
Moderate-Income Homebuyer designated by the Developer. The gross sales price of each
completed Affordable New Home will be set by the Developer at the time of sale to a Homebuyer,
based upon market conditions at the time of such sale to the particular Homebuyer; provided,
however, that the first lien purchase money mortgage amount and other housing costs payable by
such Low- or Moderate-Income Homebuyer for the completed Affordable New Home, shall be an
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amount which does not exceed an Affordable Housing Cost for the Low- or Moderate-Income
Homebuyer. The Completed New Home purchase price payable by a Homebuyer for a New Home
which is not subject to the affordability covenants of this Agreement shall not be subject to such an
Affordable Housing Cost sales price restriction or limitation.
(c) The disposition of each Completed New Home to a Homebuyer shall take place
through a New Home Escrow or an Affordable New Home Escrow, as applicable, to be
administered by the New Home Escrow Holder and Affordable New Home Escrow Holder,
respectively. Each of the New Home Escrows or Affordable New Home Escrows shall be deemed
open ("Opening of New Home Escrow"), upon delivery of a fully executed copy of the Completed
New Home sales contract by and between the Homebuyer and the Developer. The Escrow Holder
shall promptly confirm to the parties the escrow number and the title insurance order number
assigned to such escrow. The Escrow Holder shall be a title company or escrow service acceptable
to the Developer and the Homebuyer. The Agency shall not be a party to any such New Home
Escrow or Affordable New Home Escrow. Notwithstanding the preceding sentence, the Developer
shall instruct the Escrow Holder to comply with the provisions of Section 4.02(f) of this Agreement
and at the close of each New Home Escrow or Affordable New Home Escrow, the Escrow Holder
shall provide the Agency with a copy of both the "seller's" and the "buyer's" closing statement,
together with a complete copy of the real estate sales agreement between the Developer and the
Homebuyer for the Completed New Home.
(d) In the case of an Affordable New Home Escrow, the Developer shall deliver to the
Agency, the information relating to each Low- or Moderate-Income Homebuyer described in
Section 2(e) of the Affordability Covenant, within five (5) calendar days following the Developer's
designation of such Low- or Moderate-Income Homebuyer as the prospective purchaser of the
completed Affordable New Home. Concurrently, upon the Developer's delivery to the Agency of
the household income and occupancy information described in Section 2(e) of the Affordability
Covenant, the Developer shall also request that the Agency issue its Notice of Agency Concurrence
with respect to the Low- or Moderate-Income Homebuyer designated by the Developer. Within ten
(10) calendar days following its receipt of such written information and request from the Developer
relating to the Low- or Moderate-Income Hornebuyer, the Agency shall provide the Developer with
a preliminary confumation of the approval or rejection of the income and household occupancy
qualifications of the proposed Low- or Moderate-Income Homebuyer. In the event that the Agency
may request additional information relating to the confirmation of the matters described in the
preceding sentence with respect to the Low- or Moderate-Income Homebuyer, the Developer shall
cause such additional information to be provided to the Agency as promptly as feasible. The
Executive Director of the Agency shall issue a preliminary determination of concurrence of the
eligibility of the Low- or Moderate-Income Homebuyer within ten (10) calendar days following
receipt of such completed income and household occupancy information. Provided that the
proposed Low- or Moderate-Income Homebuyer also qualifies to obtain purchase money mortgage
financing for the purchase of the completed Affordable New Home with terms and costs not in
excess of an Affordable Housing Cost for such Low- or Moderate-Income Homebuyer, as
evidenced by a written mortgage lender's prequalification for such Low- or Moderate-Income
Homebuyer, the Executive Director of the Agency shall issue a Notice of Agency Concurrence with
respect to such Low- or Moderate-Income Homebuyer to the Escrow Holder. In the event that the
Agency may later discover that the written information provided to it in support of a request for
issuance of a Notice of Agency Concurrence is false or incorrect in any material respect, then in
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such event, the Agency may exercise aH of its remedies to enforce the provisions of this Agreement
and the Affordability Covenant, if applicable, notwithstanding the fact that a Notice of Agency
Concurrence may have been issued in favor of a particular Low- or Moderate-Income Homebuyer.
(e) The Developer and the Agency mutuaHy covenant and agree to execute aH necessary
or appropriate written escrow instructions relating to the application of this Agreement to a
particular New Home Escrow or Affordable New Home Escrow as may be reasonably requested by
the New Home Escrow Holder or the Affordable New Home Escrow Holder, respectively, in
connection with the administration of a New Home Escrow or Affordable New Home Escrow.
(I) Each New Home Escrow or Affordable New Home Escrow shaH close upon
satisfaction of the applicable escrow conditions by and between the Developer and such
Homebuyer, as consistent with this Agreement, when the New Home Escrow Holder or Affordable
New Home Escrow Holder confirms that:
(A) the New Home Escrow Holder or Affordable New Home Escrow Holder has
provided the Agency with a copy of the buyer's and the seHer's estimated settlement statements for
the escrow;
(B) if the escrow relates to an Affordable New Home, then the Affordable New
Home Escrow Holder shaH also provide adequate information or documentation to confirm to the
Agency the following:
(i) it is in receipt of the Notice of Agency Concurrence for the Low- or
Moderate-Income Homebuyer regarding a completed Affordable New Home;
(ii) it has received and is in a position to record a fuHy executed form of
the Affordability Covenant for the completed Affordable New Home;
(iii) it is in a position to provide the Agency with assurance reasonably
satisfactory to the Agency that the Affordability Covenant shaH, upon the close of
the Affordable New Home Escrow, be subject only to the lien for property taxes and
the lien in the completed Affordable New Home of the senior purchase money
mortgage lender to the Low- or Moderate-Income Homebuyer;
(iv) the Low- or Moderate-Income Homebuyer has executed aH of the
Agency program documents relating to the Agency Downpayment Assistance Funds,
if any, provided by the Agency to such Low- or Moderate-Income Homebuyer;
(v) it is in a position to comply with such other instructions of the
Developer, the Low- or Moderate-Income Homebuyer, the senior purchase money
mortgage lender and the Agency relating to the completed Affordable New Home.
(g) In the event that after it is opened, a New Home Escrow or Affordable New Home
Escrow may fail to close for any reason, the Developer may cause such escrow to be canceHed
without further notice of instruction to the Agency. The Developer shaH pay for all of the costs and
expenses of such a canceHed New Home Escrow or Affordable New Home Escrow and shaH
indemnify, defend and hold the Agency harmless from any claim, loss or damage which may be
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asserted or arise against the Agency by a third party as a result of the cancellation of any such
escrow.
(h) Within five (5) calendar days following the close of each New Horne Escrow or
Affordable New Horne Escrow, the Developer shall provide the Agency with a true. and correct
copy of the final escrow settlement statement for the buyer and the seller. Within sixty (60)
calendar days following the close of each New Horne Escrow or Affordable New Horne Escrow, the
Developer shall deliver its New Horne Sale Costs Certificate to the Agency.
Section 4.03. Maintenance of the Prooertv.
The Developer covenants and agrees for itself, its successors, and assigns to maintain each
of the eighteen (18) Project lots upon which New Homes have been constructed in a good condition,
and free from any accumulation of debris or waste material, subject to normal construction job-site
conditions, and shall maintain in a neat, orderly, healthy and good condition, the landscaping on
each lot required to be planted in accordance with the Scope of Development in Section 3.01. In the
event the Developer, or its successors or assigns, fails to perform the maintenance as required
herein, the Agency shall have the right, but not the obligation, to enter any such lot and undertake
such maintenance activities. In such event, the Developer shall reimburse the Agency for all
reasonable sums incurred by it for such maintenance activities. The obligation of the Developer
under this Section 4.03, with respect to the Project lots, shall be discharged for each lot on the
applicable Delivery Date for each Completed New Horne. The Developer's maintenance obligation
to the Agency as arises under this Section 4.03, with respect to the common area of the Project (if
any common area exists), will be discharged upon conveyance by the Developer of any such
common area to a homeowner's association, if any.
Section 4.04. Obligation to Refrain from Discrimination.
The Developer covenants and agrees for itself, its successors, its assigns and every
successor-in-interest to the Property, that there shall be no discrimination against or segregation of
any person, or group of persons, on account of sex, marital status, race, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment
of any lot; nor shall the Developer itself, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees
ofthe Property.
Section 4.05. Form of Nondiscrimination and Nonsegregation Clauses.
The Developer covenants and agrees for itself, its successors, its assigns, and every
successor-in-interest to the Affordable New Homes, and each of them, or any part thereof, that the
Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease,
rental, transfer, use, occupancy, tenure or enjoyment of each of the Affordable New Homes, on the
basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person.
All deeds, leases or contracts pertaining thereto shall contain or be subject to, substantially, the
following nondiscrimination or nonsegregation clauses:
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(a) In deeds: "The grantee herein covenants by and for itself, its successors and assigns,
and all persons claiming under or through them, that there shaH be no discrimination against or
segregation of, any person or group of persons on account of race, color, creed, religion, sex,
marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming
under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sub lessees, or vendees in the premises herein conveyed. The foregoing covenants shall
run with the land".
(b) In leases: "The Lessee herein covenants by and for itself, its successors and assigns,
and aH persons claiming under or through them, and this lease is made and accepted upon and
subject to the following conditions: That there shall be no discrimination against or segregation of
any person or group of persons, on account of race, color, creed, religion, sex, marital status,
national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the premises herein leased nor shaH the lessee itself, or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased".
(c) In contracts: "There shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or
ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises
herein conveyed or leased, nor shall the transferee or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or
vendees of the premises herein transferred". The foregoing provision shall be binding upon and
shall obligate the contracting party or parties and any subcontracting party or parties, or other
transferees under the instrument.
Section 4.06. Effect and Duration of Covenants under Section 4.05 and Section 4.06.
(a) The covenants established under Section 4.05 against discrimination shall remain in
effect in perpetuity.
(b) The covenant of the Developer respecting use and occupancy of each Completed
New Home shall remain in effect until the Release Date, except for the three (3) completed
Affordable New Homes, which shall remain in effect for the Qualified Residence Period of each
such completed Affordable New Home, and shall run with the land and shall constitute equitable
servitudes thereon, and shall, without regard to technical classification and designation, be binding
for the benefit and in favor of the Agency, its successors and assigns and the City.
(c) The Agency is deemed the beneficiary of the terms and provisions of this Agreement
and of the covenants running with the land for and in its own rights and for the purposes of
protecting the interests of the community. The Agency shaH have the right, if such covenants are
breached, to exercise all rights and remedies and to maintain any actions or suits at law or in equity
or such other proper proceedings to enforce the curing of such breaches to which it or any other
beneficiary of such covenants may be entitled, including, without limitation, to specific
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performance, damages and injunctive relief. The Agency shall have the right to assign all of its
rights and benefits hereunder to the City.
Section 4.07. Develooment Proiect Cost Pro Forma.
(a) As of the Effective Date of this Agreement, the Developer has presented the Agency
with a Development Project Cost Pro Forma which is part of the Scope of Development.
(b) The Developer shall maintain accounting books and records of Project development
costs, the New Home Sales Costs and all income and proceeds realized by the Developer from the
Project in accordance with generally accepted principles of business accounting. The Agency and
its accountants and auditors shall have the right to conduct, at its expense, an inspection and review
of the accounting books and records of the Developer relating to the Project upon the request of the
Agency. Provided the Agency has given the Developer at least ten (10) calendar days' prior written
notice, the Developer shall cooperate with the Agency in the production of its accounting books and
records as reasonably required by the Agency and its auditors to conduct an audit of actual New
Home Sales Costs and all income and proceeds realized by the Developer from the Project. Matters
discovered by the Agency shall not be disclosed to third parties unless required by law or unless
otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights of
the Agency hereunder. The Developer shall also have the right, at all reasonable times, to inspect
the books and records of the Agency pertaining to the Project and/or the development thereof as
pertinent to the purposes of this Agreement.
(c) The Developer represents and warrants to the Agency, that as of the Effective Date,
the expected fair market value of each Completed New Home is not less than the sum indicated in
the Development Project Cost Pro Forma submitted to the Agency for each New Home, as shall be
constructed by the Developer on each lot. The Developer agrees to remit to the Agency within
thirty (30) calendar days after (i) the completion of the Project; (ii) the payment of all costs and
expenses; and (iii) the receipt of all income and other receivables with respect to the Project, a profit
sharing distribution to the Agency equal to fifty percent (50%) of all profits generated from the
Project that are in excess of a ten percent (10%) rate of return on investment ("Profit Percentage")
as illustrated in the Development Project Cost Pro Forma.
Section 4.08. Agency Downoavrnent Assistance Funds.
(a) As of the Effective Date, the Agency shall appropriate and reserve the sum of Two
Hundred Seventy Thousand Dollars ($270,000) from the Agency Low and Moderate Income
Housing Funds to provide Agency Downpayment Assistance Funds for Low- or Moderate-Income
Homebuyers of completed Affordable New Homes as set forth in this Section 4.08. Agency
Downpayment Assistance may hereafter be provided for not to exceed three (3) Low- or Moderate-
Income Homebuyers upon the close of each Affordable New Home Escrow for a completed
Affordable New Home, subject to the terms and conditions of the Agency program for the use of
such Agency Low and Moderate Income Housing Funds and the underwriting and credit evaluation
by the Agency of each such Low- or Moderate-Income Homebuyer.
(b) Provided that a Low- or Moderate-Income Homebuyer is determined by the Agency
to be eligible for Agency Downpayment Assistance, as part of its acquisition of a completed
Affordable New Home upon the close of the Affordable New Home Escrow, such Low- or
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Moderate-Income Homebuyer shall execute a promissory note, deed of trust and related Agency
Downpayment Assistance loan documents as the Agency may direct.
(c) The amount, if any, of the Agency Downpayment Assistance which may be provided
to one (I) or more but in no event, more than three (3) Low- or Moderate-Income Homebuyers for
an Affordable Lot shall not exceed thirty percent (30%) of the gross sales price of the particular
completed Affordable New Home ifit is sold to a person or household whose income is not greater
than that of a low- or moderate-income household, and shall be disbursed for the account of such
Low- or moderate-income Homebuyer through the applicable Affordable New Home Escrow.
(d) Notwithstanding any other provision of this Section 4.08, the Agency shall have no
obligation to disburse any Agency Downpayment Assistance Funds to originate a mortgage loan for
a Low- or moderate-income Homebuyer of a completed Affordable New Home after December 31,
2008, regardless of when the purchase contract was entered into by the Developer and the Low- or
moderate-income Homebuyer.
Section 4.09. Developer Obligation to provide Additional Subsidies to Low- or moderate-
income Homebuvers.
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The Developer shall have the sole obligation to provide such additional amounts of
assistance or to obtain such primary mortgage financing for each Affordable New Home so that
such Affordable New Homes are sold to Low- or moderate-income Homebuyers who qualify, under
all respects, for the Affordable New Homes as required by this Agreement. Nothing shall prevent
the Developer from transferring funds to the Agency to fund additional amounts of Agency
Downpayment Assistance or to reduce the sales prices of the Affordable New Homes, all as may be
determined by the Developer at its election.
Section 4.10. Substitution of other Single-Familv Dwelling Units for Affordable New
Homes.
(a) The Agency agrees that the Developer may substitute other single-family residential
dwelling units in lieu of the three (3) Affordable New Homes as presently contemplated under this
Agreement for purchase by Low and Moderate Income Homebuyers. The Developer may elect to
designate such substitute qualifying housing units at any time on and after the Effective Date of this
Agreement. Such substitute qualifying housing units may include residential in-fill lots in other
areas of the Project Area, the acquisition by the Developer and rehabilitation of presently vacant
single-family dwelling units, or such other construction or rehabilitation of single-family dwelling
units, as may be approved by the Executive Director of the Agency.
(b) The Developer agrees to initially focus any attempts to obtain substitute single-
family dwelling units in the area of the City within the Project Area commonly referred to as
"Operation Phoenix" located generally north of Baseline Avenue and west of Waterman Avenue.
Any such substitute single-family dwelling units proposed by the Developer to be in lieu of the
three (3) Affordable New Homes shall be subject to the reasonable approval of the Executive
Director of the Agency.
e (c) In the event the Developer elects to substitute other single-family dwelling units in
lieu of one (1) or more of the Affordable New Homes to produce at least three (3) single-family
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homes for Low- or moderate-income Homebuyers, all provisions of this Agreement shall apply to
the substitute single-family homes in the same manner as the provision of this Agreement would
have applied to the Affordable New Homes. The Developer may provide a combination of one (I)
or more Affordable New Homes together with substitute single-family dwelling units so that at least
three (3) Low and Moderate Income Homebuyers have been obtained so that the Agency will then
be in compliance with the requirements of the CRL pertaining to the inciusionary housing
requirements. The Agency is entering into this Agreement in reliance upon the representations of
the Developer to assure compliance with the inclusionary housing requirements in the Project Area,
as are applicable to the Project and the Agency.
Section 4.11. Partial Reimbursement for hnoact Fees. The Developer shall be obligated
pursuant to the ordinances and other requirements of the City to pay in whole the hnpact Fees for
the construction and development of the eighteen (18) New Homes constituting the Project. The
Developer shall submit to the Agency on or before the close of escrow for the first New Home
appropriate written evidence of payment by the Developer to the effect that the total hnpact Fees as
paid by the Developer to the City for the development of the three (3) Affordable New Homes was
equal to or in excess of One Hundred Thousand Dollars ($100,000). Upon verification by the
Agency staff of the dollar amount of the hnpact Fees as paid by the Developer directly for the three
(3) Affordable New Homes, the Agency shall reimburse the Developer for all or the appropriate
portion of the One Hundred Thousand Dollars ($100,000) amount that has been verified as having
been previously paid by the Developer to the City. In no event shall the Agency reimbursement
obligation to the Developer for the hnpact Fees with respect to the three (3) Affordable New Homes
exceed the dollar amount as actually paid by the Developer with respect to each such Affordable
New Home and provided further that the reimbursement obligation of the Agency under this
Section 4.11 shall not exceed One Hundred Thousand Dollars ($100,000) in the aggregate.
ARTICLE V
ARTICLE V DEFAULTS. REMEDIES AND TERMINATION
Section 5.01. Defaults - General.
(a) Subject to the extensions of time set forth in Section 5.05 hereof, failure or delay by
either party to perform any term or provision of this Agreement shall constitute a default under this
Agreement; provided, however, that if a party otherwise in default commences to cure, correct or
remedy such default within thirty (30) calendar days after receipt of written notice specifying such
default and shall diligently and continuously prosecute such cure, correction or remedy to
completion (and where any time limits for the completion of such cure, correction or remedy are
specifically set forth in this Agreement, then within said time limits), such party shall not be
deemed to be in default hereunder.
(b) The injured party shall give written notice of default to the party in default,
specifying the default complained of by the non-defaulting party. Delay in giving such notice shall
not constitute a waiver of any default nor shall it change the time of default.
(c) Any failure or delays by either 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 such rights or remedies. Delays by
either party in asserting any of its rights and remedies shall not deprive either party of its right to
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institute and maintain any actions or proceedings which it may deem necessary to protect, assert or
enforce any such rights or remedies.
Section 5.02. Legal Actions.
(a) In addition to any other rights or remedies, either party may institute legal action to
cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement including, on behalf of the Agency,
requiring the Developer to comply with the obligation to provide the three (3) Affordable New
Homes or to pay such damages to the Agency as a court may determine to compensate the Agency
for the loss of such number of Affordable New Homes. Such legal actions must be instituted in the
Superior Court of the County of San Bernardino, State of California, in any other appropriate court
in that County, or in the Federal District Court in the Central District of the State of California.
(b) The laws of the State of California shall govern the interpretation and enforcement of
this Agreement.
(c) In the event that any legal action is commenced by the Developer against the
Agency, service of process on the Agency shall be made by personal service upon the Executive
Director of the Agency, or in such other manner as may be provided by law.
(d) In the event that any legal action is commenced by the Agency against the
Developer, service of process on the Developer shall be made by personal service on any officer of
the Developer (or such other agent for service of process and at such address as may be specified in
written notice to the Agency), or in such other manner as may be provided by law, and shall be
valid whether made within or without the State of California.
Section 5.03. Rights and Remedies are Cumulative.
Except with respect to any rights and remedies expressly declared to be exclusive in this
Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of
one (1) 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.
Section 5.04. Default and Damages.
If either party defaults with regard to any provision of this Agreement following the full
execution of this Agreement, the non-defaulting party shall serve written notice of such default
upon the defaulting party. If the defaulting party does not diligently commence to cure such default
within thirty (30) calendar days after service of the notice of default and promptly complete the cure
of such default within a reasonable amount of time, not to exceed ninety (90) calendar days (or such
shorter period as may otherwise be specified in this Agreement for any specific default), after the
service of written notice of such default, the defaulting party shall be liable to the other party for
damages caused by such default.
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Section 5.05. Agencv Audit Costs.
In the event that based upon the results of its audit of the Developer's New Home Sales
Costs Certificate for one (I) or more Completed New Homes, the Agency may reasonably
determine that the amounts set forth in such New Home Sales Costs Certificate of the Developer is
more than ten percent (10%) in excess of the aggregate amount stated by the Developer at the time
when such New Home Sales Costs Certificates are delivered to the Agency or pursuant to the
Developer Project Cost Pro Forma, then in such event, in addition to any other sums as may then be
payable by the Developer to the Agency, the Developer shall also reimburse the Agency for the
reasonable costs the Agency incurred in connection with the Agency's audit of such New Home
Sales Costs Certificates within thirty (30) days following the Agency's written request for such
reimbursement.
In the event that the Agency may incur third-party audit costs and expense after the date on
which final audited financial statement of the Developer for the Project has been submitted to the
Agency, which Agency audit may indicate that increases in the costs of the Completed New Homes
exceeded the amount specified in the preceding paragraph from deviations from those costs set forth
in the New Home Sales Costs Certificate, the Developer shall also reimburse the Agency for its
third-party accounting expenses within thirty (30) days written demand, therefore, from the Agency.
ARTICLE VI
GENERAL PROVISIONS
Section 6.01. Notices. Demands and Communications between the Parties.
(a) Any and all notices, demands or communications submitted by any party to another
party pursuant to or as required by this Agreement shall be proper, if in writing, and dispatched by
messenger for immediate personal delivery, or by registered or certified United States mail, postage
prepaid, return receipt requested, to the principal office of the Agency and the Developer, as
applicable, as designated in Section L05(a) and Section L05(b) hereof. Such written notices,
demands and communications may be sent in the same manner to such other addresses as either
party may, from time-to-time, designate as provided in this Section. Any such notice, demand or
communication shall be deemed to be received by the addressee, regardless of whether or when any
return receipt is received by the sender or the date set forth on such return receipt, on the day that it
is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is
placed in the United States mail, as heretofore provided.
(b) In addition to the submission of notices, demands or communications to the parties
as set forth above, copies of all notices shall also be delivered by facsimile as follows:
To the Developer:
GFC Enterprises, LLC
Attn.: Chuck Crowell, Vice President
434 North Second Avenue
Upland, California 91786
Fax: (909) 949-6091
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To the Agency:
Redevelopment Agency of the City of San Bernardino
Attn.: Maggie Pacheco, Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
Fax: (909) 663-2294
Section 6.02. Conflict of Interest.
No member, official or employee of the Agency having any conflict of interest, direct or
indirect, related to this Agreement, or in the development of the Site, shall participate in any
decision relating to this Agreement. The parties represent and warrant that they do not have
knowledge of any such conflict of interest.
Section 6.03. Warranty against Pavment of Consideration for Agreement.
The Developer warrants that it has not paid or given, and will not payor give, any third
party any money or other consideration for obtaining this Agreement. Third parties, for the
purposes of this Section, shall not include persons to whom fees are paid for professional services if
rendered by attorneys, financial consultants, accountants, engineers, architects and the like when
such fees are considered necessary by the Developer.
Section 6.04. Nonliabilitv of Agency Officials and Employees.
No member, official or employee of the Agency shall be personally liable to the Developer,
or any successor-in-interest, in the event of any default or breach by the Agency or for any amount
which may become due to the Developer or to its successor, or on any obligations under the terms
of this Agreement, except for gross negligence or willful acts of such member, officer or employee.
Section 6.05. Enforced Delay: Extension of Time of Performance.
In addition to specific provisions of this Agreement, performance by either party hereunder
shall not be deemed to be in default, or considered to be a default, where delays or defaults are due
to the force majeure events of war, terrorism, insurrection, strikes, lockouts, riots, floods,
earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine
restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure
necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are
not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to
act of any public or governmental agency or entity (provided that acts or failure to act of the City or
the Agency shall not extend the time for the Agency to act hereunder except for delays associated
with lawsuit or injunction including, but without limitation, to lawsuits pertaining to the approval of
the Agreement, and the like). An extension of time for any such force majeure cause shall be for
the period of the enforced delay and shall commence to run from the date of occurrence of the
delay; provided, howeyer, that the party which claims the existence of the delay has first proyided
the other party with written notice of the occurrence of the delay within ten (10) calendar days after
the commencement of such occurrence of delay.
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The inability of the Developer to obtain a satisfactory commitment from a construction
lender for the improvement of the Project or to satisfy any other condition of this Agreement
relating to the redevelopment of the Project, if applicable, shall not be deemed to be a force majeure
event or otherwise provide grounds for the assertion of the existence of a delay under this Section
6.05. The parties hereto expressly acknowledge and agree that changes in either general economic
conditions or changes in the economic assumptions of any of them which may have provided a
basis for entering into this Agreement and which occur at any time after the execution of this
Agreement, are not force majeure events and do not provide any party with grounds for asserting
the existence of a delay in the performance of any covenant or undertaking which may arise under
this Agreement. Each party expressly assumes the risk that changes in general economic conditions
or changes in such economic assumptions relating to the terms and covenants of this Agreement
could impose an inconvenience or hardship on the continued performance of such party under this
Agreement, but that such inconvenience or hardship is not a force majeure event and does not
excuse the performance by such party of its obligations under this Agreement.
Section 6.06. Insoection of Books and Records.
The Agency shall have the right, at all reasonable times, at the Agency's cost and expense,
to inspect the books and records of the Developer pertaining to the Project, as necessary for the
Agency, in its reasonable discretion, to enforce its rights under this Agreement. Matters discovered
by the Agency shall not be disclosed to third parties unless required by law or unless otherwise
resulting from or related to the pursuit of any remedies or the assertion of any rights of the Agency
hereunder. The Developer shall also have the right, at all reasonable times, to inspect the books and
records of the Agency pertaining to the Site and/or the development thereof, as pertinent to the
purposes of this Agreement.
Section 6.07. Aoorovals.
(a) Except as otherwise provided in this Agreement, approvals required of the Agency or
the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not
be unreasonably withheld and approval or disapproval shall be given within the time set forth in the
Schedule of Performance or, ifno time is given, within a reasonable amount of time.
(b) The Executive Director of the Agency is authorized to sign on his or her own
authority, all escrow documents and other documents on behalf of the Agency, as necessary for the
Agency to perform its obligations under this Agreement, and the Executive Director of the Agency
is further authorized to execute on behalf of the Agency, amendments to this Agreement which are
of routine or technical nature, including minor adjustments to the Schedule of Performance.
Section 6.08. Real Estate Commissions.
The Agency shall not be liable for any real estate commissions, brokerage fees or finder
fees, which may arise or be purported to arise from or related to this Agreement.
Section 6.09. Indenmification.
The Developer agrees to indenmify and hold the City, the Agency, and the elected officers,
officials, employees, attorneys and agents of either of them, harmless from and against all damages,
judgments, costs, expenses and fees arising from or related to any act or omission of the Developer
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in performing its obligations hereunder; provided, however, that such obligation of the Developer to
indemnify the City and the Agency and the elected officers, officials, employees, attorneys and
agents of either of them shall not apply to any matter arising from the negligence or willful
misconduct of the City or the Agency or the elected officers, officials, employees, attorneys or
agents of either of them. The Agency agrees to indemnify and hold the Developer and its officers,
employees and agents, harmless from and against all damages, judgments, costs, expenses and fees
arising from or related to any act or omission of the Agency in performing its obligations hereunder;
provided, however, that such obligation of the Agency to indemnify the Developer and its officers,
employees, and agents shall not apply to any matter arising from the negligence or willful
misconduct of the Developer, its officers, employees and agents.
Section 6.10. Attornevs' Fees.
If either party hereto files any action or brings any action or proceeding against the other
arising out of this Agreement, or is made a party to any action or proceeding brought by the Escrow
Holder or a third party, then as between the Developer and the Agency, the prevailing party shall be
entitled to recover, as an element of its costs of suit, and not as damages, its reasonable attorneys'
fees as fixed by the Court in such action or proceeding or in a separate action or proceeding brought
to recover such attorneys' fees. For the purposes hereof, the words "reasonable attorneys' fees"
mean and include, in the case of the Agency, salaries and expenses of the lawyers employed by the
Office of the City Attorney (allocated on an hourly basis) who may provide legal services to the
Agency in connection with the representation of the Agency in any such matter.
Section 6.11. Effect.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, legal representatives, successors and assigns.
ARTICLE VII
ENTIRE AGREEMENT, W AlYERS AND AMENDMENT
Section 7.01. Entire Agreement.
(a) This Agreement shall be executed in three (3) originals, each of which is deemed to
be an original. This Agreement includes thirty-two (32) pages and two (2) Exhibits, which
constitute the entire understanding and agreement of the parties.
(b) All waivers of the provisions of this Agreement and all amendments hereto must be
in writing and signed by the appropriate representations of the Agency and the Developer.
/1/
/1/
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
dates set forth below.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Dated:
By:
Maggie Pacheco, Executive Director
Approved as to Form and Legal Content:
By: /S/5imot1lt; 1. Sak
Agency Counsel
DEVELOPER
GFC Enterprises LLC,
a California limited liability company
Dated:
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EXlDBIT "A"
FORM OF AFFORDABILlTY COVENANT
(On file with the Agency)
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