HomeMy WebLinkAboutR31-Economic Development Agency CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marzullo SUBJECT: Joint Public Hearing-TELACU Housing- San
Interim Executive Director Bernardino IV, Inc., 2008 HOME Funds Loan
and Grant Development Agreement (IVDA
Redevelopment Project Area)
DATE: February 26,2008
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Synopsis of Previous Commission/Council/Committee Action(s):
On July 19,2007,Redevelopment Committee Members Estrada,Johnson and Baxter unanimously voted to recommend that the
Community Development Commission consider this action for approval.
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Recommended Motion(s):
Open/Close Joint Public Hearing
(Mayor and Common Council)
A: Resolution of the Mayor and Common Council of the City of San Bernardino approving 1) an amendment to the
City's 2005-2010 Five-Year Consolidated Plan and the 2007-2008 Annual Action Plan, and 2)the allocation of$3.2
million in Federal HOME CHDO Grant Funds to TELACU Housing - San Bernardino IV, Inc., a California non-
profit public benefit corporation("Developer")(IVDA Redevelopment Project Area)
(Community Development Commission)
B: Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing
the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency")to execute
the 2008 HOME Funds Loan and Grant Development Agreement by and between the Agency and TELACU Housing
- San Bernardino IV, Inc., a California non-profit public benefit corporation ("Developer") (IVDA Redevelopment
Project Area)
Contact Person(s): Musibau Arogundade Phone: (909)663-1044
Project Area(s): IVDA Redevelopment Project Area Ward(s): 4
Supporting Data Attached: R1 Staff Report Rl Resolution(s) ElAgreement(s)/Contract(s) El Map(s) ❑Letter(s)
FUNDING REQUIREMENTS: Amount: $ 3.2 Million Source: Federal HOME CHDO Funds
Budget Authority: 2007-2008 EDA Budget
SIGNATURE: Fiscal Review: Cc
Emil A.Marzullo,Interim Executive Director Barbara Lindseth,Administrative Services Director
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Commission/Council Notes: eP5y vL 3 f�
iv _
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P:\Agendas\ConunDev Commission\CDC 2008\03-03-08 TELACU Housing IV SR(Con't).doc COMMISSION MEETING AGENDA
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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JOINT PUBLIC HEARING-TELACU HOUSING - SAN BERNARDINO IV,INC.,
2008 HOME FUNDS LOAN AND GRANT DEVELOPMENT AGREEMENT
(IVDA REDEVELOPMENT PROJECT AREA)
BACKGROUND AND CURRENT ISSUE:
TELACU Housing — San Bernardino IV, Inc. ("Developer"), is a non-profit public benefit community
development corporation founded in the late 1960's to promote community and economic development
activity. For the past 20 years, the Developer has participated in the United States Department of Housing
and Urban Development("HUD") Section 202 Program ("Program"). The Developer has developed senior
housing throughout many communities in California such as Baldwin Park, El Monte, Alhambra and
Monterey Park. The Program provides grants to qualified non-profits to finance the construction and
management of affordable rental housing for seniors. The Developer presently has 2 senior housing
projects through the Program in the City of San Bernardino's ("City") downtown area and 1 on East
Commercial Road east of Waterman Avenue (225 units).
In November 2006, the Developer applied for a HUD Section 202 Grant ("202 Grant") and received
approval notification for a $12.97 million grant (Exhibit `B" - approximately $11.2 million of these funds
can be used for construction costs only)to construct and operate 90 units for seniors on the property located
on the southeast corner of Highland and Central Avenues consisting of approximately 3.4 acres (the
"Site").
The Site will be developed with a 90-unit, 3 story senior citizen housing complex with a community center
of which 89 of the units will be 1 bedroom with a living room, kitchen and bathroom containing
approximately 540 square feet and the manager's unit will have 2 bedrooms ("Project"). The Project will
contain plush and ample landscaping around the building with a water fountain at the corner of Highland
and Central Avenues, a common multi-purpose kitchen, library, laundry room, storage space, an attractive
lobby/foyer and offices. The Site Plan prepared by Gregory Villanueva Architects is attached as Exhibit
«A»
The projected Project budget is estimated at $14.4 million. The budget includes land costs, construction
costs, development and architectural fees, ancillary fees and off-site improvements, which are not covered
by the 202 Grant. Through several consultation meetings with the prior City Engineer, Mark Lancaster, it
is understood that as a condition of development approval, the Developer will be required to mitigate the
on- and off-site drainage and off-site traffic signal issues affecting the Site at a cost of approximately $2.2
million. Although the City will contribute $200,000 from the 2007-2012 budgeted Capital Improvement
Fund to the improvements, this leaves a shortfall of$2 million. The Developer will need to advance the $2
million for off-sites with the understanding that the City will reimburse the Developer or the Agency a
prorated share of the off-site improvement costs under a future Reimbursement Agreement between the
City and the Agency. Such Agreement will be submitted at a later date for City and Agency approval.
On March 22, 2006, the Developer entered into a Granting Option to Purchase Agreement with Bradley
McCall, LLC, to purchase the Site for the sum of $1 million. Per the Option to Purchase Agreement's
provisions, the Site was to have been purchased by August 31, 2007, or the Developer would have lost its
exclusive right and option to purchase the Site. However, the Developer was unable to acquire the Site by
PAAgendas\Comm Dev Commission\CDC 2008\03-03-08 TELACU Housing IV SR(Cont).doc COMMISSION MEETING AGENDA
Meeting Date: 03/03/2008
Agenda Item Number:
Economic Development Agency Staff Report
TELACU Housing IV
Page 2
the August 31, 2007, date because the property owner re-evaluated the property and requested $1.3 million
for the property. On December 12,2007,the Developer and the property owner settled on$1.3 million and
executed a Purchase and Sale Agreement and opened escrow with a closing date of March 31, 2008. The
land purchase price will initially be funded by a loan from the Agency equal to $1.3 million to be converted
to a portion of the total Agency Grant upon funding of the 202 Grant.
Agency Staff has certified the Developer as a Community Housing Development Organization ("CHDO")
as per Federal HOME Partnership Act requirements under 24 CFR 92.300. The Developer is eligible to
receive HOME funding under the 15% CHDO requirement and the 5% building capacity category as
approved in the 2005-2010 5-Year Consolidated Plan and the 2007-2008 Annual Action Plan
("Consolidated Plans"). Under Federal HOME Regulation 24 CFR 92.300 and 301, the Agency may
allocate HOME Funds to eligible CHDO's such as the Developer for approved projects.
According to HUD regulations, the 202 Grant will not be released until the Project's plans, specifications
o
and building permits are approved by the City. Previously, t he Community Development Commission of
the City of San Bernardino ("Commission") was advised of the various off-site improvements such as
drainage channels, storm drains, street improvements and traffic signal required to be installed prior to the
Project proceeding. The Commission was previously presented with this matter in concept and based upon
favorable Commission reaction towards the Project, Agency Staff is now bringing forward the formal
approval for Agency funding for the requested gap amount.
Agency Staff is recommending that a "loan" in the amount of$1.3 million be made available to TELACU
for site acquisition. Said loan will have a 2-year term without interest provided that the loan repayment to
the Agency occurs within the 2-year maturity and at such time as when HUD releases the "HUD Grant"
monies. In the event that the loan is not paid on or before the maturity dated, then it shall bear interest at
three percent (3%)per annum. The HOME Agreement will be structured as a loan and the property will be
encumbered and secured with a Promissory Note and Deed of Trust. After the HUD funds are released,the
Agency loan of $1.3 million will convert to a grant and be combined with the additional $1.9 million
Agency funded grant to cover the construction gap estimated at $3.2 million for various on- and off-site
improvements.
Given the volume of development projects currently being processed by the City's Development Services
Department ("Development Services"), plans and building permits could be issued no later than Fall 2008.
After this occurs, the Developer will submit an entire development package in addition to the approved
plans and permits to HUD for approval,which is estimated to occur in late Spring 2009.
Considering the amount of the 202 Grant and the Project cost estimated at $14.4 million, the Developer is
requesting the Agency's assistance to cover the shortfall of$3.2 million. The $3.2 million will be used for
site acquisition and to off-set land cost, related development, architectural and on- and off-site
improvements on the Project. In summary, it is proposed that the Agency enter into the 2008 HOME
Funds Loan and Grant Development Agreement ("Agreement") with the Developer to provide for the
development of the Project as attached to the Commission Resolution submitted with this agenda item.
After the Developer receives approval from the Agency, the Developer will commence the preparation of
their working drawings, submit plans to Development Services for review and Planning Commission
approval, submit for a firm HUD commitment and commence construction in September 2009.
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PA\Agendas\Comm Dev Commission\CDC 2008\03-03-08 TELACU Housing IV SR(Con't).doc COMMISSION MEETING AGENDA
Meeting Date: 03/03/2008
Agenda Item Number:
Economic Development Agency Staff Report
TELACU Housing IV
Page 3
Prior to the approval of the Agreement, an amendment to the City's Consolidated Plans are required to
allocate $3.2 million in Federal HOME CHDO Funds to the Developer in compliance with the HOME
Program Regulations 24 CFR 570.302 and 24 CFR 91.105 and the City approved Citizen's Participation
Plan. On January 17, 2008, and again on February 17, 2008, public notices were published in the San
Bernardino County Sun newspaper informing the general public of this joint public hearing of the Council
and Commission and requesting inputs on the proposed amendment to the Plans. To date, Staff has not
received any oral or written comments regarding the amendment.
ENVIRONMENTAL IMPACT:
This request is exempt under the National Environmental Policy Act ("NEPA"), pursuant to 24 CFR
58.35(a) and the California Environmental Quality Act ("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, applicable zoning designation and regulations; (b) the
proposed Project occurs within 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.
Prior to the release of any Federal Funds, the Agency must adhere to the NEPA environmental guidelines.
All mandated notices of release of funds would be noticed prior to the disbursement of HOME Funds.
FISCAL IMPACT:
The $3.2 million combined Loan and Grant funds obligation will be funded from the Agency's prior years'
Federal HOME and CHDO Grant Program Funds approved in the 2007-2008 Budget.
RECOMMENDATION:
That the Mayor and Common Council and the Community Development Commission adopt the attached
Resolutions.
Emil A. Marzullo,Interim Executive Director
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P'\Agendas\Comm Dev Commission\CDC 2008\03-03-08 TELACU Housing IV SR(Con't).doc COMMISSION MEETING AGENDA
Meeting Date: 03/03/20�08
Agenda Item Number: �/f 0 Q
EXHIBIT "A"
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I RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
3 OF SAN BERNARDINO APPROVING (1) AN AMENDMENT TO THE
CITY'S 2005-2010 FIVE-YEAR CONSOLIDATED PLAN AND THE 2007-
4 2008 ANNUAL ACTION PLAN, AND (2) THE ALLOCATION OF $3.2
MILLION IN FEDERAL HOME CHDO GRANT FUNDS TO TELACU
5 HOUSING - SAN BERNARDINO IV, INC., A CALIFORNIA NON-PROFIT
6 PUBLIC BENEFIT CORPORATION ("DEVELOPER") (IVDA
REDEVELOPMENT PROJECT AREA)
7
WHEREAS, the City of San Bernardino (the "City") is an entitlement jurisdiction and
8
annually receives certain federal funds under the HOME Investment Partnership Act (the "HOME
9
Program") from the United States Department of Housing and Urban Development ("HUD") in
10
order to carry-out eligible affordable housing activities within the City in accordance with the
11
HOME Program Regulations set forth in Title 24 Code of Federal Regulations Part 92, et seq. (24
12
CFR Part 92); and
13
WHEREAS, on May 7, 2007, the Mayor and Common Council of the City of San
14
Bernardino ("Council") approved the City's 2005-2010 Five-Year Consolidated Plan and the 2007-
15
2008 Annual Action Plan ("Consolidated Plans"); and
16
WHEREAS, in compliance with the City's approved Citizens Participation Plan and
17
CDBG/HOME Regulations under 24 CFR 570.302 and 24 CFR 91.105, on January 17, 2008, and
18
again on February 17, 2008, the required public notice of this amendment to the Consolidated Plans
19
were published in the San Bernardino County Sun newspaper, inviting and requesting citizens to
20
provide written and/or oral comments with regards to this amendment at this Joint Public hearing,
21
and to date, Staff has not received any oral or written comments regarding this amendment; and
22
WHEREAS, the Council desires to amend the Consolidated Plans and allocate $3.2 million
23
of Federal HOME CHDO Grants to TELACU Housing — San Bernardino IV, Inc. ("Developer")
24
(IVDA Redevelopment Project Area).
25
NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY
26
THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
27
FOLLOWS:
28
1
P:\Agendas\Resolutions\tesolutionsV.008\03-17-08 TELACU Housing N MCC Reso(Con't).do
I Section 1. The Council hereby approves the amendment to the Consolidated Plans
2 allocating $3.2 million in Federal HOME CHDO Grants to the Developer. At the Joint Public
3 hearing of the Council and Commission, oral and written comments were considered before
4 adoption of this Resolution.
5 Section 2. This Resolution shall take effect upon its adoption and execution in the
6 manner as required by the City Charter.
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P:\Agendas\Resolutions\Resolutions\2008\03-17-08 TELACU Housing N MCC Reso(Con't).doc
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO APPROVING (1) AN AMENDMENT TO THE
2 CITY'S 2005-2010 FIVE-YEAR CONSOLIDATED PLAN AND THE 2007-
3 2008 ANNUAL ACTION PLAN, AND (2) THE ALLOCATION OF $3.2
MILLION IN FEDERAL HOME CHDO GRANT FUNDS TO TELACU
4 HOUSING - SAN BERNARDINO IV, INC., A CALIFORNIA NON-PROFIT
PUBLIC BENEFIT CORPORATION ("DEVELOPER") (IVDA
5 REDEVELOPMENT PROJECT AREA)
6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a meeting
8 thereof, held on the day of , 2008, by the following vote to wit:
9 Council Members: Ayes Nays Abstain Absent
10 ESTRADA
11 BAXTER
12 BRINKER
13 DERRY
14 KELLEY
15
JOHNSON
16 MC CAMMACK
17
18 Rachel G. Clark, City Clerk
19
20 The foregoing Resolution is hereby approved this day of , 2008.
21
22 Patrick J. Morris, Mayor
23 City of San Bernardino
24 Approved as to Form:
,1
25
:
By
26
James F. Penman, City Attorney
27
28
1
3
P:Wgendas\Resolutions\Resolutions\2008\03-17-08 TELACU Housing IV MCC Reso(Con't).doc
COPY
I RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
3 THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
4 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE THE 2008 HOME FUNDS LOAN AND GRANT DEVELOPMENT
5 AGREEMENT BY AND BETWEEN THE AGENCY AND TELACU
6 HOUSING — SAN BERNARDINO IV, INC., A CALIFORNIA NON-PROFIT
PUBLIC BENEFIT CORPORATION ("DEVELOPER") (IVDA
7 REDEVELOPMENT PROJECT AREA)
8 WHEREAS, the City of San Bernardino (the "City") is an entitlement jurisdiction and
9 receives annually certain federal funds under the HOME Investment Partnership Act (the "HOME
10 program") from the United States Department of Housing and Urban Development ("HUD") in
11 order to carry-out eligible affordable housing activities within the City in accordance with the
12 HOME Program Regulations set forth in Title 24 Code of Federal Regulations Part 92, et seq. (24
13 CFR Part 92); and
14
WHEREAS, the City has designated and authorized the Agency to administer and
15 implement the HOME Program of the City; and
16 WHEREAS, the HOME Program Funds of the City may be used by the Agency for locally
17
based non-profit housing entities to carry-out affordable housing activities in compliance with the
18
HOME Program Regulations, including, without limitation, "Senior Housing" development projects
19
as this term is defined at 24 CFR Part 92.2; and
20 WHEREAS, the Mayor and Common Council of the City of San Bernardino ("Council")
21 have approved an amendment to the 2005-2010 Five-Year Consolidated Plan and the 2007-2008
22 Annual Action Plan ("Plans") allocating $3.2 million of Federal HOME CHDO Grants to TELACU
23
Housing—San Bernardino IV, Inc., (the"Developer") (IVDA Redevelopment Project Area); and
24 WHEREAS, the Developer is a national and locally certified, approved and experienced
25
non-profit housing organization that has obtained approval from HUD of a Section 202 Grant in the
26 sum of $11,226,200 for the construction and operation of a 90-unit senior housing facility (the
27 "Project") and a 3-year rental subsidy of$1,304,700; and
28
1
P:\Agendas\Resolutions\Resolutions\2008\03-17-08 TELACU Housing IV CDC Reso(Con t).doc
1 WHEREAS, the Agency deems that the activities to be undertaken herein are consistent with
2 and supportive of the HOME Program Regulations and that the financial assistance of the Agency in
3 the loan amount of $1.3 million with repayment expected in 2 years with the 1-year option,
4 extension for land acquisition cost as necessary; and
5 WHEREAS, if the repayment of the loan is not made within 2 years and the 1-year option
6 extension is granted, the loan will convert to monthly interest only payment for the duration of the
7 1-year extension period at the rate of 3% per annum or up to the date of HUD 202 closing and
8 becomes payable in full 3-years and will thereafter convert to a grant at the closing of the HUD 202
9 Grant funds; the $1.3 million loan repayment combined with a Grant amount of$1.9 million for a
10 total of $3.2 million are needed for the Project to include, but not limited to, on- and off-site
11 improvements necessary and appropriate for the completion of the senior housing development as
12 set forth herein; and
13 WHEREAS, the Agency deems it desirable to enter into this 2008 HOME Funds Loan and
14 Grant Development Agreement ("Agreement") with the Developer in order to provide HOME
15 Program Funds for the acquisition and construction of a 90-unit senior housing facility for the
16 provision of affordable rental housing to low-income seniors in accordance with the HOME
17 Program guidelines; and
18 WHEREAS, the Project is exempt from the National Environmental Policy Act ("NEPA")
19 and the California Environmental Quality Act ("CEQA"), pursuant to Section 15332, in-fill
20 development, and no further environmental document is required pursuant to Section 15168 of the
21 CEQA guidelines.
22 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY
23 OF SAN BERNARDINO DOES HEREBY RESOLVE,DETERMINE AND ORDER,AS FOLLOWS:
24- .SecthiA 1. The Community Development Commission of the City of San Bernardino
25 ("Commission") finds and determines that the acquisition of the Property and construction of the
26 Project as described in the Agreement is within the scope, terms and provisions of the
27 Redevelopment Plan for the Project Area, is consistent with the Agency's Housing Implementation
28 Plan, the City's Consolidated Plan and will help eliminate blighting conditions in the Project Area
2
P.\Agendu\Resolutions\Aesolutions\2008\03-17-08 TELACU Housing N CDC Reso(Coo't).doc
1 by creating affordable rental housing opportunities for Seniors who meet the income eligibility
2 guidelines.
3 Section 2. The Commission authorizes the appropriation in the sum of$3.2 million from
4 the Federal HOME CHDO Program Funds, fiscal years 2001-2002 through 2006-2007 for the
5 Developer to carry-out the Project and the Interim Executive Director of the Agency is authorized to
6 execute the Agreement and any such other documents as may be necessary to implement the
7 Agreement and to make any necessary non-substantive changes in the Agreement as may be
8 approved by Agency Counsel, provided such changes do not increase the Agency's financial
9 contribution of $3.2 million to the Project. At the Joint Public hearing of the Council and
10 Commission, oral and written comments were considered before adoption of this Resolution.
11 Section 3. The Commission makes a finding that the Project is exempt from NEPA and
12 CEQA, pursuant to Section 15332 of the CEQA Guidelines, constitutes an in-fill development, and
13 no further environmental document is required pursuant to Section 15168 of the CEQA guidelines,
14 and the Commission further authorizes and directs that the necessary Notices of Determination and
15 Exemption be filed with HUD and the County Clerk.
16 Section 4. This Resolution shall become effective immediately upon its adoption.
17 Ill
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P.\Agendas\Resolutions\Resolutions\2008 10 3-1 7-08 TELACU Housing IV CDC Reso(Con't).doc
I RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
2 THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
3 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE THE 2008 HOME FUNDS LOAN AND GRANT DEVELOPMENT
4 AGREEMENT BY AND BETWEEN THE AGENCY AND TELACU
HOUSING — SAN BERNARDINO IV, INC., A CALIFORNIA NON-PROFIT
5 PUBLIC BENEFIT CORPORATION ("DEVELOPER") (IVDA
REDEVELOPMENT PROJECT AREA)
6
7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8 Development Commission of the City of San Bernardino at a meeting
9 thereof, held on the day of_ , 2008, by the following vote to wit:
10 Commission Members: Ayes Nays Abstain Absent
11 ESTRADA
BAXTER
12
BRINKER
13
DERRY
14
KELLEY
15
JOHNSON
16
MC CAMMACK
17
18
19 Secretary
20 The foregoing Resolution is hereby approved this day of 52008.
21
22
Patrick J. Morris, Chairperson
23 Community Development Commission
of the City of San Bernardino
24 Approved as to Form:
25
By:
26 Agency Co nsel
27
28
4
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2008
HOME FUNDS LOAN AND GRANT DEVELOPMENT AGREEMENT
By and Between
Redevelopment Agency of the City of San Bernardino
(Agency)
and
TELACU Housing- - San Bernardino IV, Inc.,
a California non-profit public benefit corporation
(Developer)
90 Units Three (3) Story Elderly Housing
Southeast corner of Highland Avenue and Central Avenue
(Inland Valley Development Agency Redevelopment Project Area)
4822-0965-4786.1
2008
HOME FUNDS LOAN AND GRANT DEVELOPMENT AGREEMENT
TELACU Housing- - San Bernardino IV, Inc.,
a California non-profit public benefit corporation
(TELACU Housing- San Bernardino IV)
THIS 2008 HOME FUNDS LOAN AND GRANT DEVELOPMENT AGREEMENT (this
"Agreement") is entered into on March 17, 2008, by and between the REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO (the "Agency"), a public body, corporate and politic, and
TELACU Housing - - San Bernardino IV, Inc., a California non-profit public benefit corporation (the
"Developer").
The Agency and the Developer hereby covenant and agree as follows:
I. [§100] SUBJECT OF AGREEMENT
A. [§101] Recitals
This Agreement is made and entered into with the respect to the following facts:
1. The Developer desires to construct and operate a Senior Housing Complex
consisting of eighty-nine (89) one (1) bedroom affordable senior housing units and one (1) two (2)
bedroom manager's unit(hereafter the "Project"); and
2. The Project is entitled, "TELACU Housing - San Bernardino IV, Inc." and is
designated as Project No. 143-EE063-WAH-NP/CA431-061-002; and
3. The Project is proposed to be located on certain real property located within the
City of San Bernardino (the "City") and within the Inland Valley Development Agency
Redevelopment Project Area (the "Project Area") referred to herein as the "Site". The Site is depicted
on Exhibit "A" and more particularly described on Exhibit "B," attached hereto and incorporated
herein by this reference; and
4. The Developer has obtained a fund reservation from the United States
Department of Housing and Urban Development ("HUD") for Section 202 Capital Advance Program
Funding for the Project in the amount of$11,226,200 and a three (3) year rental subsidy of$434,900
with a total budget authorization of $1,304,700; and the Developer will enter into HUD Capital
Advance Documents (as hereinafter defined)with HUD at the time of the initial HUD closing; and
5. The Agency is desirous of aiding the Developer in the interim acquisition
financing of the Site and in the construction of the Project by defraying a portion of certain on-site and
off-site construction costs of the Project; and
6. The Agency's participation in the Project is limited to the amounts to be set
forth in this Agreement; and
4822-09654786.1 -1-
P:UgendasWgenda AttachmentskAgrmts-Amend 2008\03-17-08 Final TELACU IV-Home Funds Loan and Grant Development Agreement.doc
7. The Developer is responsible for the construction of the said Project at its sole
expense, from the funding sources described above, and any other funding source available to it for
that purpose; and
8. The Agency has determined that the development of the Site pursuant to this
Agreement and the fulfillment generally of this Agreement are in the vital and best interest of the City
and the Agency.
B. [§102] The Site
The Site is located in the City of San Bernardino and the Inland Valley Development Agency
Redevelopment Project Area (the "Project Area") and is shown on the "Site Map" which is attached to
this Agreement as Exhibit "A". The Site is described in the "Legal Description" which is attached
hereto as Exhibit "B", and is located on the southeast corner of Highland Avenue and Central Avenue
(APN: 1191-282-01 and 1191-282-02) in the City of San Bernardino, California.
C. [§103] Parties to this Agreement
1. [§104] The Agency
The Agency is a public body, corporate and politic, exercising governmental functions
and powers, and organized and existing under the Community Redevelopment Law of the State of
California.
The principal office of the Agency is located at 201 North "E" Street, Suite 301, San
Bernardino, California 92401.
The term "Agency" as used in this Agreement includes the Redevelopment Agency of
the City of San Bernardino and any assignee or successor to its rights, powers; and responsibilities.
2. [§105] The Developer
The Developer is TELACU Housing - - San Bernardino IV, Inc., a California non-profit
public benefit corporation. The principal office of the Developer is located at 5400 East Olympic
Boulevard, Suite 300, Los Angeles, California 90022.
The term "Developer" as used in this Agreement includes the Developer and any
assignee or successor to its rights, powers, and responsibilities.
3. [§106] Prohibition Against Change in Ownership, Management and Control of
' the Developer
The qualifications and identity of the Developer are of particular concern to the City
and 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.
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The Developer shall not assign all or any part of this Agreement without the prior
written approval of the Agency. This Agreement may be terminated by the Agency if there is any
significant change (voluntary or involuntary) in the management or control of the Developer.
Notwithstanding anything in this Section to the contrary, so long as the Project
contemplated by this Agreement is encumbered by a U.S. Department' of Housing and Urban
Development ("HUD") Deed of Trust and/or Regulatory Agreement, any proposed transferee or
assignee must have the prior written consent of HUD. This Agreement shall not be terminated by the
Agency if a transferee or assignee of this Agreement has the approval of HUD or during the period of
time that Developer continues to control not less than fifty-one percent (51%) of the members and
directors of Developer.
Nothing herein shall prohibit the Developer from transferring the Site to HUD or its
transferee without the prior approval of the Agency.
II. [§200] ACQUISITION OF THE SITE
A. [§201] Acquisition of the Site
The Developer represents that it has entered into a contract to acquire the Site, and the
Developer shall acquire title to the Site on or before three (3) business days after receipt of the
proceeds of the Agency Loan.
III. [§300] DEVELOPMENT OF THE SITE
A. [§301] Development of the Site
1. [§302] Scope of Development
The Scope of Development shall be consistent with this Agreement and contain
requirements, standards and limitations customary for comparable projects financed by the Agency.
The Scope of Development is attached to this Agreement as Exhibit "C" and incorporated herein by
this reference. The Developer shall prepare plans for the development of the Site in accordance with
the Scope of Development. "Improvements" shall mean the multifamily housing development to be
constructed on the Site, consisting of ninety (90) dwelling units and amenities as more particularly
described in the Scope of Development.
2. [§303] (Intentionally Omitted)
3. [§304] Cost of Work
The cost of all work required by this Agreement as set forth in the Scope of
Development, Exhibit "C", shall be borne by the Developer, except for work or costs expressly set
forth in this Agreement as per Section 400. Notwithstanding the foregoing, in the event that the
Agency requires design standards inconsistent with HUD's cost containment guidelines, the Agency
4W shall pay the incremental cost (including but not limited to architects' fees, if any) attributable to the
design requirement inconsistent with HUD's cost containment guidelines, but not to exceed the amount
of the Agency Grant set forth in Section 406.
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4. [§305] Schedule of Performance
The Developer shall begin and complete all work within the time specified in the
Schedule of Performance (Exhibit "D") or within such extensions of such times as may be granted by
the Agency Interim Executive Director or as provided for in Section 605 of this Agreement. The
Schedule of Performance is also subject to revision from time to time as mutually agreed upon in
writing by and between the Developer and the Agency.
5. [§306] Indemnification; Bodily Injury and Property Damage Insurance
a. During the period of construction on the Site, and throughout the term of
the Agency Loan and the Agency Grant, as applicable, the Developer agrees to and shall defend,
indemnify and hold the Agency and the City harmless from and against all liability, loss, damage, costs
or expenses (including attorney fees and court costs) arising from or as a result of the death of any
person or any accident, injury, loss and damage whatsoever caused to any person or to the property or
any person which shall occur on or adjacent to such Site and which shall be directly or indirectly
caused by any acts done thereon or any errors or omissions of the Developer and its agents, servants,
employees and contractors, but excluding any such liability, loss, damage, costs or expenses arising out
of the negligence of the Agency or a breach by or misrepresentation of the Agency under this
Agreement.
b. Prior to the Closing or prior to receiving any other advance under the
Agency Loan or the Agency Grant, the Developer shall furnish or cause to be furnished to the Agency
duplicate originals of the insurance policy or policies required by this Agreement. The Developer
shall, until the Developer's obligations under this Agreement are paid and discharged in full, maintain
and keep in full force and effect any insurance required by Agency, issued by companies approved by
the Agency including, without limitation:
(1) Fire insurance in an amount not less than the full insurable value
of the Improvements, with extended coverage, including vandalism, malicious mischief, and a loss
payable endorsement naming the Agency as loss payee; and during the construction period and until a
certificate of occupancy for the completed Improvements has been issued by the City, a course of
construction endorsement.
(2) Public liability insurance, to protect against loss from liability
imposed by law for damages on account of personal injury, including death therefrom, suffered or
alleged to be suffered by any person or persons whomsoever on or about the Site and the
Improvements, or in connection with the operation thereof, resulting directly or indirectly from any
acts or activities of the Agency or the Developer or any person acting for the Agency or the Developer,
or under their respective control or direction, and also to protect against loss from liability imposed by
law for damages to any property of any person occurring on or about the Site and the Improvements, or
in connection with the operation thereof, caused directly or indirectly by or from acts or activities of
the Agency or the Developer or its tenants or any person acting for the Agency or the Developer, or
under their respective control or direction. Such property damage and personal injury insurance shall
also provide for and protect the Agency against incurring any legal cost in defending claims for alleged
loss. Such personal injury and property damage insurance shall name the Agency and the City as
additional insureds. Initially, such personal injury and property damage insurance shall be in the
following amounts: a general aggregate amount of not less than $3,000,000; not less than $2,000,000
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of property damage insurance; and not less than $2,000,000 of personal and bodily injury; provided,
however, the limitation on the amount of insurance shall not limit the responsibility of the Developer
to indemnify the Agency or pay damages on account of injury to persons or property resulting from the
Developer's activities or the activities of any other person or persons for which the Developer is
otherwise responsible. The insurance requirements of this subsection shall be modified if the premium
cost for the same is not approved by HUD.
(3) Use and occupancy or business interruption or rental income
insurance with respect to the Improvements against the perils of fire, lightning, vandalism, malicious
mischief, riot and civil commotion, and such other perils ordinarily included in extended coverage fire
insurance policies, in an amount that is acceptable to the Agency (except if the premium cost for such
insurance is not approved by HUD).
(4) Workers' compensation insurance issued by a responsible carrier
authorized under the laws of the State of California to insure employers against liability for
compensation under the workers compensation laws now in force in California, or any laws hereafter
enacted as an amendment or supplement thereto or in lieu thereof. Such workers' compensation
insurance shall cover all persons employed by the Developer in connection with the Site and the
Improvements and shall cover liability within statutory limits for compensation under any such act
aforesaid, based upon death or bodily injury claims made by, for, or on behalf of any person incurring
or suffering injury or death in connection with the Site or the Improvements or the operation thereof by
the Developer.
(5) All required insurance policies shall provide that such insurance
policies shall not be subject to change, cancellation, reduction in coverage, or non-renewal except after
notice in writing shall have been sent by registered mail addressed to the Agency not less than thirty
(30) calendar days prior to the effective date thereof. All policies shall name the Agency and the City
and their elective and appointive boards, officers, agents and employees as additional insureds and
provide that such additional insureds shall not be held liable for any premium or expense of any nature
on such policies or any extensions thereof. All such policies also shall provide that such policy and
coverage as is afforded to the City and the Agency and their elective and appointive boards, officers,
agents and employees shall be primary insurance and not contributing with any other insurance
maintained by the City or the Agency.
(6) The term "full insurable value" as used in paragraph (1) above
shall mean the actual replacement cost (excluding the cost of excavation, foundation and footings
below the lowest floor and without deduction for depreciation) of the Improvements immediately
before such casualty or other loss, including the cost of construction of the Improvements, architectural
and engineering fees, and inspection and supervision. To ascertain the amount of coverage required,
the Developer shall cause the full insurable value to be determined from time to time by appraisal by
the insurer, by agreement between the Agency and the Developer or by an appraiser mutually
acceptable to the Agency and the Developer, not less often than once every three (3) years.
(7) All insurance provided under this Section 306b. shall be for the
benefit of the Developer, HUD, the Agency and the City, any mortgagee, and any contractor at the
Developer's discretion. The Developer agrees to timely pay all premiums for such insurance and, at its
sole cost and expense, to comply and secure compliance with all insurance requirements necessary for
the maintenance of such insurance.
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(8) The Developer shall submit policies of all insurance required by
this Section to the Agency prior to disbursement of any portion of the Agency or the Agency Grant, as
applicable, as set forth in this Section 306b. At least thirty (30) calendar days prior to expiration of
any such policy, copies of renewal policies shall be submitted to the Agency.
(9) All insurance provided for in this Agreement shall be effected
under policies issued by insurers of recognized responsibility, licensed or permitted to do business in
the State of California reasonably approved by the Agency.
(10) All policies of insurance shall provide that such policies shall not
be canceled or limited in any manner without at least thirty (30) calendar days prior written notice to
the Agency.
(11) If the Developer fails or refuses to procure or maintain insurance
as required by this Agreement, the Agency shall have the right, at the Agency's election and upon ten
(10) calendar days' prior written notice to the Developer and all mortgagees entitled to notice, to
procure and maintain such insurance. The premiums paid by the Agency shall be deemed to be an
additional draw against the principal amount of the Agency Grant provided that the Agency has not
previously concluded all disbursements of the Agency Grant proceeds within the time limitations
required herein or fully funded the principal amount of the Agency Grant.
(12) During the term of the HUD Capital Advance Documents
(defined collectively as the HUD Note, Deed of Trust, Regulatory Agreement, Use Agreement,-Capital
Advance Agreement, and Project Rental Assistance Contract), compliance with the insurance
requirements of HUD shall be deemed to satisfy the insurance requirements of this Agreement. The
City and the Agency and their representatives shall be named as additional insureds on any policies of
insurance. In the event of loss covered by fire and extended coverage insurance, the insurance
proceeds, to the extent of the Capital Advance (defined as the amount to be provided in a grant from
HUD) then remaining unpaid, shall be paid to the beneficiary of the HUD deed of trust and, at the
option of the beneficiary, may be applied to the Capital Advance or released for the repair or
rebuilding of the Project. Any balance remaining of insurance proceeds shall be paid to the additional
insured and, at the option of such additional insured, may be applied to the indebtedness owed to such
insured or be released for repair or rebuilding of the Project. Surplus insurance proceeds thereafter
may be dispersed to the Owner of the Project.
6. [§307] Nondiscrimination During Construction; Equal Opportunity
The Developer, for itself and its successors and assigns, agrees that in the construction
of the Improvements on the Site provided for in this Agreement:
a. The Developer will not discriminate against any employee or applicant
for employment because of race, color, religion, national origin, sex, disability, marital status, sexual
preference, creed, ancestry, medical condition, Acquired Immune Deficiency Syndrome ("AIDS"),
acquired or perceived, or retaliation for having filed a discrimination complaint. The Developer will
take affirmative action to ensure that applicants are employed, and that employees are treated during
employment without regard to their race, color, religion, national origin, sex, disability, marital status,
sexual preference, creed, ancestry, medical condition, AIDS, acquired. or perceived, or retaliation for
having filed a discrimination complaint. Such action shall include, but not be limited to, the following:
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employment, upgrading, demotion, or transfer; recruitment or recruitment advertising, layoff or
termination; rates of pay or other forms of compensation; and selection for training, including
apprenticeship. The Developer agrees to post in conspicuous places, available to employees and
applicants for employment, notices to be provided by the Agency setting forth the provisions of this
nondiscrimination clause.
b. The Developer will, in all solicitations or advertisements for employees
placed by or on behalf of the Developer, state that all qualified applicants will receive consideration for
employment without regard to race, color, religion, national origin, sex, age, disability, marital status,
sexual preference, creed, ancestry, medical condition, AIDS, acquired or perceived, or retaliation for
having filed a discrimination complaint.
C. The Developer will cause the foregoing provisions to be inserted in all
contracts for any work covered by this Agreement so that such provisions will be binding upon each
contractor and subcontractor, provided that the foregoing provisions shall not apply to contracts or
subcontracts for standard commercial supplies or raw materials.
d. Not later than the date established in the Schedule of Performance
(Exhibit "D"), the Developer shall meet with the Agency's or the City's Equal Opportunity
Department staff for a pre-construction briefing on all Agency construction requirements.
7. [§308] Local, State and Federal Laws
When and if the Developer undertakes the development work contemplated by this
Agreement, the Developer shall carry out the construction of the improvements on the Site in
conformity with all applicable laws, including all applicable federal and state labor standards for the
payment of the required prevailing wage rates.
8. [§309] Prohibition Against Transfer
a. The Developer shall not, except as permitted by this Agreement, assign
or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer,
conveyance or assignment of the whole or any part of the Site or the Improvements thereon, without
the prior written approval of the Agency. This prohibition shall not be deemed to prevent the granting
of easements or permits to facilitate the development of the Site or to prohibit or restrict the renting for
occupancy of residential units to be constructed on the Site, nor shall it prohibit granting any security
interests permitted in this Agreement for financing the development of the Site. The provisions of this
Section 309 shall remain in effect for the duration of the Agency Loan and the Agency Grant, as
applicable.
b. Any proposed transferee shall have the development experience,
qualifications and financial ability necessary to fulfill the obligations undertaken in this Agreement by
the Developer. Any proposed transferee shall expressly assume all of the obligations of the Developer
under this Agreement and shall agree, in a written agreement with the Agency, to be subject to all of
the conditions and restrictions to which the Developer is subject pursuant to this Agreement. The
Developer shall submit to the Agency for review all instruments and other legal documents proposed
to effect any such transfer. Any proposed transferee shall also meet HUD requirements under the
HUD Section 202 Capital Advance Documents.
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C. In the absence of specific written agreement by the Agency, no
unauthorized sale, transfer, conveyance or assignment of the Site, the Improvements or any part
thereof or interest therein shall be deemed to relieve the Developer or any other party from any
obligations under this Agreement.
d. Notwithstanding anything in this Section 309 to the contrary, the
Developer shall at all times have the right to convey the Site to HUD or its transferee, and so long as
any portion of the HUD Section 202 Capital Advance Documents remain outstanding and the HUD
Regulatory Agreement is in effect, the Agency shall approve any sale, transfer, conveyance or
assignment of the Site that first has been approved in writing by HUD; provided, however, that in the
event of any such sale, transfer, conveyance or assignment, the Developer shall not be released from
any obligation under this Agreement without the prior written consent of the Agency. Notwithstanding
the foregoing, Developer may, without Agency approval, assign and transfer its rights under this
Agreement provided (i) such assignee has the approval of HUD; or (ii) the Developer continues to
control not less than fifty-one (51%) of the members and directors of such assignee; and (iii) such
assignee expressly assumes the obligations of this Agreement.
9. [§310] Security Financing
a. [§311] Encumbrances Permitted
Notwithstanding Section 309, mortgages, deeds of trust, or any other form of
conveyance required for financing are permitted to be recorded against the Site or the Improvements
(the "Security Instruments") for the purpose of securing funds for the construction of the
Improvements. The Developer shall notify the Agency in advance of any proposed conveyance for
financing. The Developer shall promptly notify the Agency of any Security Instrument or security
interest relating thereto that has been created or attached to the Site or the Improvements, whether by
voluntary act of the Developer or otherwise.
b. [§312] Holder Not Obligated to Construct Improvements
The holder of any Security Instrument authorized by this Agreement ("Holder")
shall in no way be obligated by the provisions of this Agreement to construct or complete the
Improvements or to guarantee such construction or completion. Nothing in this Agreement shall be
deemed to permit or authorize any such Holder to devote the Site to any uses, or to construct any
improvements thereon, other than those uses or improvements provided for or authorized by this
Agreement.
C. [§313] Notice of Default to Mortgage, Deed of Trust or Other Security
Interest Holders: Right to Cure
Whenever the Agency shall deliver any notice or demand to the Developer with
respect to any breach or default by the Developer in completion of the Improvements on the Site, the
Agency shall at the same time deliver to each Holder, of which the Agency has received notice
pursuant to Section 311 hereof, a copy of such notice or demand. The Agency will cooperate with any
such Holder to the extent reasonably necessary to modify the provisions of this Section 313 to meet the
requirements of such lender. Each such Holder shall (insofar as the rights of the Agency are
concerned) have the right at its option within ninety (90) calendar days after the receipt of the notice to
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cure or remedy any such default and to add the cost thereof to the security interest debt and the lien on
its security interest. If such default shall be a default which can only be remedied or cured by such
Holder upon obtaining possession, such Holder shall seek to obtain possession with diligence and
continuity through a receiver or otherwise, and shall remedy or cure such default within ninety (90)
calendar days after obtaining possession; provided that in the case of a default which cannot with
diligence be remedied or cured, or the remedy or cure of which cannot be commenced within such 90-
day period, such Holder shall have such additional time as reasonable necessary to remedy or cure
such default of the Developer. Nothing contained in this Agreement shall be deemed to permit or
authorize such Holder to undertake or continue the construction or completion of the Improvements
(beyond the extent necessary to conserve or protect the Improvements or construction already made)
without first having expressly assumed the Developer's obligations to the Agency by written agreement
satisfactory to the Agency. The Holder in that event must agree to complete, in the manner provided in
this Agreement, the Improvements to which the lien or title of such Holder relates, and submit
evidence satisfactory to the Agency that it has the qualifications and financial capabilities necessary to
perform such obligations. The foregoing provisions of this section shall not apply to HUD during the
term the HUD Capital Advance Documents are in effect.
d. [§314] Failure of Holder to Complete Improvements
In any case where six (6) months after default by the Developer in the
completion of the Improvements the Holder has not exercised the option to complete the construction
of the Improvements, or if it has exercised the option but has not proceeded diligently to complete the
Improvements, the Agency may purchase the Security Instrument by payment to the Holder of the
amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the
Improvements has vested in the Holder, the Agency, if it so desires, shall be entitled to a conveyance
from the Holder to the Agency upon payment to the Holder of an amount equal to the sum of the
following:
(1) The unpaid balance secured by the Security Instrument at the
time such title became vested in the Holder(less all appropriate credits, including those resulting from
collection and application of rentals and other income received during foreclosure proceedings).
(2) All expenses with respect to foreclosure.
(3) The net expenses, if any (exclusive of general overhead),
incurred by the Holder as a direct result of the subsequent ownership or management of the
Improvements, such as insurance premiums and real estate taxes.
(4) The costs of any improvements made by such Holder.
(5) An amount equivalent to the interest that would have accrued on
the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt
and such debt had continued in existence to the date of payment by the Agency.
The foregoing provisions of this Section shall not apply during the term of the HUD Capital
Advance Documents.
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e. [§315] Right of Agency to Cure Mortgage, Deed of Trust or Other
Security Interest Default
In the event of a default or breach by the Developer of any Security Instrument
prior to the completion of the construction of the Improvements, and the Holder has not exercised its
option to complete such construction, the Agency may cure the default prior to completion of any
foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all
costs and expenses incurred by the Agency in curing the default. The Agency shall also be entitled to a
lien upon the Developer's interest in the Site and ownership of the Improvements (or any portion
thereof) to the extent of such costs and disbursements. Any such lien shall be subordinate and subject
to the Security Instruments recorded against the Site and the Improvements as authorized herein. Any
such lien shall also be subject to the prior written approval of HUD during the term of the HUD
Capital Advance Documents.
10. [§316] (Intentionally Omitted)
11. [§317] Use of the Site
a. [§318] Uses
The Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest that during construction and thereafter, the Developer, its successors and
assignees shall develop the Site with eighty-nine (89) rental units and one (1) on-site manager's unit in
the apartment complex in which each person in residence in each dwelling unit is required to be a
Senior Citizen of sixty-two (62) years of age or older, or a "Qualifying Permanent Resident" as defined
in California Civil Code Section 51.3 and as amended from time to time, and as set forth below
(hereinafter collectively referred to as a "Senior Citizen"). The use of the project shall be at all times
rental units and not be converted to condominiums or other non-rental use. The foregoing covenant
shall run with the land.
Compliance by the Developer with the requirements of the HUD Section 202
program during the term of the HUD Capital Advance Documents shall be deemed to satisfy the
requirements of this section, and in the event of a conflict, HUD requirements shall prevail.
b. [§319] Obligation to Refrain From Discrimination
Except as otherwise required by the HUD Section 202 program rental
requirements, the Developer covenants by and for itself and any successors in interest 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, ancestry or national origin in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person
claiming under or through the Developer 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 of the Site. The foregoing covenants shall run with
the land.
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C. [§320] Form of Nondiscrimination and Nonsegregation Clauses
The Developer shall refrain from restricting the rental, sale or lease of the Site
on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person.
All such deeds, leases (including rental agreements) or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
(1) In deeds: "Except as otherwise required by the HUD Section 202
program rental requirements, the grantee herein covenants by and for himself or herself, his or her
heirs, executors, administrators and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee
himself or herself, or any person claiming under or through him or her, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein
conveyed. The foregoing covenants shall run with the land."
(2) In leases: "Except as otherwise required by the HUD Section 202
program rental requirements, the lessee herein covenants by and for himself or herself, his or her heirs,
executors, administrators and assigns, and all persons claiming under or through him or her, 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 shall the lessee himself or herself, or any person claiming under or through
him or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the premises herein leased."
(3) In contracts: "Except as otherwise required by the HUD Section
202 program rental requirements, 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, nor
shall the transferee himself or herself, or any person claiming under or through him or her, 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 of the land."
d. [§321] Effect and Duration of Covenants
The covenants contained in this Agreement and the Regulatory Agreement and
Declaration of Restrictive Covenants (the "Agency Regulatory Agreement"), attached as Exhibit `B"
to this Agreement shall remain in effect for fifty-five (55) years following the initial occupancy of the
first dwelling unit to be developed pursuant to this Agreement, except that the covenants against
discrimination shall remain in perpetuity. The covenants established in this Agreement and the grant
deed shall, without regard to technical classification and designation, be binding for the benefit and in
favor of the Agency, its successors and assigns, the City and any successor in interest to the Site or any
part thereof.
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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 purpose of
protecting the interests of the community and other parties, public or private, in whose favor and for
whose benefit this Agreement and the covenants running with the land have been provided. This
Agreement and the covenants shall run in favor of the Agency without regard to whether the Agency
has been, remains or is an owner of any land or interest therein in the Site, any parcel or subparcel, or
in the Project Area. The Agency shall have the right, if the Agreement or covenants are breached, to
exercise all rights and remedies and to maintain any actions or suits at law or in equity or other proper
proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this
Agreement and covenants may be entitled.
e. [§322] Rights of Access—Public Improvements and Facilities
The Agency, for itself and for the City and other public agencies, at their sole
risk and expense, reserves the right to enter the Site or any part thereof at all reasonable times and with
as little interference as possible for the purposes of construction, reconstruction, maintenance, repair or
service of any public improvements or public facilities located on the Site. Any such entry shall be
made only after reasonable notices to the Developer, and the Agency shall indemnify and hold the
Developer harmless from any claims or liabilities pertaining to any entry. Any damage or injury to the
Site resulting from such entry shall be promptly repaired at the sole expense of the public agency
responsible for the entry.
f. [§323] Affordability Restriction and Tenant Selection
All completed and occupied residential dwelling units on the Site shall, for a
fifty-five (55) year period, be rented at Affordable rental rates to Very Low income households in
accordance with the requirements of Section 33334.2, et seq., of the California Health & Safety Code
and pursuant to this Section and 24 CFR Part 92. Compliance by the Developer with the requirements
of the HUD Section 202 program during the term of the HUD Capital Advance Documents shall be
deemed to satisfy the requirements of this Section and, in the event of a conflict, HUD requirements
shall prevail.
g. [§324] Definitions
For the purposes of this Agreement, the following definitions shall apply:
"Very Low income households" means persons and families whose income does
not exceed fifty percent (50%) of Area median income, adjusted for family size in accordance with
adjustment factors adopted and amended from time to time by the United States Department of
Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937. The
determination of a household's status as a Very Low income household shall be made upon the initial
occupancy of a unit by the household.
"Area median income" means the median family income of a geographic area of
the state, as annually estimated in accordance with the United States Housing Act of 1937.
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"Affordable rental rates" (including a utility allowance) may not exceed thirty
percent (30%) of fifty percent (50%) of the Area median income for the annual rent, adjusted for
family size appropriate for the unit.
"Qualified Permanent Resident" means a person who meets all of the following
requirement: was residing with the qualifying resident or Senior Citizen prior to the death,
hospitalization, or other prolonged absence of, or the dissolution of marriage with, the qualifying
resident or Senior Citizen
"Qualifying Resident or Senior Citizen" means a person who is sixty-two (62)
years of age or older, as defined in Section 51.3 of the California Civil Code, and as amended from
time to time.
"Utility allowance" means that amount required for utilities, which are not paid
for by the Developer.
In addition, the following HUD definitions shall apply:
"HUD" shall mean the United States Department of Housing and Urban
Development.
"HUD Capital Advance" shall mean the financial assistance to be provided by
HUD to the Developer for the acquisition of the Development Parcel and the development of the
Project thereon.
"HUD Capital Advance Agreement" shall mean the agreement between HUD
and the Developer pursuant to which HUD provides a HUD Capital Advance to Developer for the
Project.
"HUD Capital Advance Documents" shall collectively refer to the HUD Note,
Deed of Trust, Regulatory Agreement, Use Agreement, Capital Advance Agreement and Project
Rental Assistance Contract as required by Section 202 of the Housing Act of 1959, as amended (the
"Act"
"HUD Capital Advance Program" means the program established under the Act.
"HUD Closing" shall mean the point in time when all conditions of the HUD
Firm Commitment are satisfied permitting the Project to commence construction.
"HUD Deed of Trust" means that Deed of Trust securing the HUD Capital
Advance in favor of HUD.
"HUD Firm Commitment" shall mean the written commitment by HUD to the
Developer to provide the HUD Capital Advance on terms set forth in such commitment.
"HUD Note" means the Promissory Note evidencing the HUD Capital Advance
in favor of HUD and secured by the HUD Deed of Trust.
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"HUD Regulatory Agreement" means the Regulatory Agreement encumbering
the Development Parcel by and between the Developer and the Secretary of HUD.
IV. [§400) FINANCING
A. [§401] Method of Financing Acquisition and Development
1. [§402] Sources of Financing
The Agency and the Developer anticipate that the acquisition of the Site and
development of the Improvements shall be financed with a combination of grants, as follows:
Construction and Permanent Financing:
Estimated Amount of Section 202 $11,226,200
Capital Advance
Estimated Amount of Agency Grant $3,200,000
Total Estimated Development Cost $14,426,200
2. [§403] Submittal of Financing Documents
Developer shall obtain the Capital Advance from HUD secured by a first priority deed
of trust in an amount sufficient, together with the Agency Grant, to pay all costs of the Improvements.
Within the time provided therefore in the Schedule of Performance, Developer shall submit for Agency
review and approval copies of the Capital Advance Documents required to obtain the Capital Advance.
Developer shall provide written certification to the Agency that such Capital Advance Documents are
correct copies of the actual documents to be executed by Developer on or before the closing date of the
HUD Section 202 Capital Advance.
A-1. [§403.1] Agency Loan
The Agency hereby agrees to fund an interim loan to the Developer, which for purposes of this
Agreement is herein defined to be the "Agency Loan". The Agency Loan shall be in a principal
amount not to exceed $1,300,000 in principal amount and the funds representing the Agency Loan
shall be deposited by the Agency as may be requested by the Developer into the escrow to be
established by the Developer for the purchase of the Site. Such deposit by the Agency shall be made
not more than three (3) business days prior to the anticipated close of escrow for the purchase of the
Site by the Developer. The Developer and the escrow agent shall jointly inform the Agency in writing
as to the date, precise dollar amount and wiring instructions for the deposit of the proceeds of the
Agency Loan into said escrow. The Agency Loan shall not be funded in a principal amount in excess
of that amount as determined by the escrow agent to be necessary for the close of escrow for the Site to
occur together with the payment of all third party costs and fees related to such escrow closing. No
portion of the Agency Loan shall be payable to the Developer whether for direct payments or for
reimbursements of any costs associated with the acquisition of the Site. The Agency Loan proceeds
shall only be used for the acquisition of the Site through the payment of the purchase price thereof and
the payment of the related escrow closing costs and for no other purposes of the Developer, including,
but not limited to, payment of other costs of the Improvements, engineering or architectural design,
and obtaining.permits and paying of fees related to the Improvements.
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A-2. [§403.2] Promissory Note and Deed of Trust
The Agency Loan shall be evidenced by the Promissory Note substantially in the form as
attached hereto as Exhibit "F" which shall be duly executed and delivered by the Developer and
deposited into the escrow for the acquisition of the Site and released to the possession of the Agency
immediately upon funding the acquisition of the Site and the recordation of the Deed of Trust .
substantially in the form as attached hereto as Exhibit "G". The Deed of Trust shall be duly executed
and delivered by the Developer designating the Agency as the beneficiary thereof to secure the
repayment of the Agency Loan as shall be evidenced by the Promissory Note. Such Deed of Trust
shall be a duly recorded first lien upon the Site subject only to general and special property taxes that
have not then been levied by the County of San Bernardino. The Deed of Trust shall not be subject to
subordination by the Agency under any circumstances, except with regard to the HUD Capital
Advance Documents. It is the intent and understanding of the Developer that the Developer will be
required to repay the Agency Loan in whole in order to seek a reconveyance of the Deed of Trust. The
Developer represents and warrants that funds are not available within the line item budget of the HUD
Section 202 Capital Advance for the payment of the land acquisition costs by the Developer from such
HUD Section 202 Capital Advance, and it is necessary for the Agency to provide for the conversion of
the Agency Loan to a portion of the Agency Grant as provided in Section 406 hereof to assist in the
land acquisition. Such amount of the Agency Grant equal to $1,300,000 shall be deemed to be used
and applied by the Developer for the repayment in whole of the Agency Loan provided that such event
occurs on or before the maturity date of the Agency Loan.
A-3. [§403.3] Terms of Agency Loan
The Agency Loan shall have a term of two (2) years plus one (1) optional one-year extension
period in the event that the HUD 202 closing has not occurred by the two year anniversary date from
the date of the Agency Loan. During such optional one-year period, the loan will convert to monthly
interest only payments calculated as described below for the duration of the one-year period or up to
the date of the HUD 202 closing, whichever occurs first. The Agency Loan shall be due and payable
in full as of said maturity date, which shall be the earlier of three (3) years from the date of the Agency
Loan or at the time of the HUD 202 closing, whichever occurs first. In the event that the Agency Loan
is paid in whole within the first two-year period of time, the Agency Loan shall not bear interest.
However, in the event all or any portion of the Agency Loan is not paid on or before the two-year
anniversary date from the date of the Agency Loan and the optional one-year extension period is
required, that portion of the principal amount thereof which remains unpaid as of the two-year
anniversary date shall bear interest at the rate of interest equal to three percent (3%) per annum,
payable monthly in the amount of$3,250 per month for the duration of the one-year optional period or
up to the date of the HUD 202 closing, whichever occurs first.
B. [§404] Agency Grant
In accordance with and subject to the terms and conditions of this Agreement, and provided
that the Agency Loan has been repaid in whole prior to the maturity date thereof, the Agency agrees to
grant to the Developer, and the Developer agrees to accept from the Agency, funds in an amount set
forth in Section 406 for construction and permanent financing of site improvements and design
amenities only. The Developer recognizes and agrees that the sole source of funds for the funding of
the Agency Grant shall be the repayment amounts of the Agency Loan as shall be remitted by the
Developer to the Agency in accordance with the Agency Loan as shall be evidenced by the Promissory
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Note. In the event the source of funds from the Agency which shall be used to fund the Agency Loan
and thereafter the Agency Grant are HOME Funds, the use of such funds shall be subject to all
requirements of the HOME Funds program and in the event of a conflict between the HUD
requirements and the HOME requirements, the matter shall be submitted to HUD for determination.
The parties acknowledge that the HOME Funds are to be utilized to pay costs not included within the
HUD Capital Advance Funds proceeds and such funds shall be disbursed to the Developer in such
escrow as HUD approves to be paid out in the course of construction. The Agency acknowledges that
the Agency Grant funds are to pay for costs not included within the HUD Capital Advance to include
only those items enumerated as follows: off-site and adjacent public improvements within street
rights-of-way including street roadways, sidewalks, curb and gutter, street lighting, undergrounding of
overhead utilities and installation of signal lights ("Off-Site Improvements"); construction of
additional amenities and upgrades to the Improvements which the Agency Interim Executive Director
and the Developer may hereafter mutually agree are beneficial to upgrade the exterior of the
Improvements by the expenditure of funds in excess of those funds which are available to the
Developer from the HUD Capital Advance proceeds ("Exterior Amenity Upgrades"); and any other
amenities and upgrades within the dwelling units which the Agency Interim Executive Director and the
Developer may hereafter agree are beneficial to the Improvements by the expenditure of funds in
excess of those funds which are available to the Developer from the HUD Capital Advance proceeds
("Interior Amenity Upgrades"). For purposes hereof, the Off-Site Improvements, the Exterior
Amenity Upgrades and the Interior Amenity Upgrades are collectively referred to herein as the
"Agency Grant Eligible Improvements". The Agency Grant funds shall be disbursed only after it has
been mutually agreed upon in the manner as set forth above. Notwithstanding the above, upon the
request of either the Agency or the Developer, and after mutual agreement thereto, the obligation of the
Developer to repay the Agency Loan may be offset against the obligation of the Agency to provide the
grant to the Developer.
1. [§405] Submittal of Proposed Budget for Agency Grant Eligible Improvements
As soon as practicable after the date of this Agreement, the Developer shall submit to the
Agency a proposed budget setting forth by line item those expenditures plus the dollar amounts thereof
which are then considered by the Developer to constitute the Agency Grant Eligible Improvements.
The Agency Interim Executive Director or designee shall have the sole discretion to approve or
disapprove any such line item and the decision of the Agency Interim Executive Director or designee
shall be final and non-appealable. The Developer shall not undertake any item, which was denied for
approval by the Agency Interim Executive Director or designee except with other available funds of
the Developer and not from the Agency Grant. The actual dollar amount of each of the Agency Grant
Eligible Improvements shall be based upon invoices received by the Developer and submitted to the
Agency for the payment thereof from the proceeds of the Agency Grant for those qualifying Agency
Grant Eligible Improvements. In the event that the total cost of the Agency Grant Eligible
Improvements should exceed the principal amount of the Agency Grant, the Agency shall have no
further obligation or duty to remit any further amounts to the account of the Developer, and the
Developer shall seek other sources of funds for the payment of all such excess costs of the Agency
Grant Eligible Improvements and the remainder of the Improvements if not funded from the HUD 202
Capital Advance.
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2. [§406] Amount of Agency Grant; Time Limitations
The final principal amount of the Agency Grant shall not exceed the lesser of (i)
$3,200,000 or (ii) the actual costs of the Agency Grant Eligible Improvement costs. It is recognized
and agreed that $1,300,000 of said $3,200,000 figure shall represent the land acquisition costs to be
incurred by the Developer for which the Agency shall credit towards the repayment of the principal
amount of the Agency Loan to thus reduce the original balance of the Agency Grant from the
$3,200,000 figure to thus produce the remaining $1,900,000 balance which shall be used and applied
by the Developer for the Agency Grant Eligible Improvements; provided, however, that such credit of
the $1,300,000 amount shall occur prior to the 2-year maturity date of the Agency Loan to avoid the
incurrence of the interest thereon as set forth in Section 403.3. Any such credit of$1,300,000 credited
toward the amounts to be disbursed under the Agency Grant shall act as a corresponding offset of any
amounts owed on the $1,300,000 Agency Loan (the "Offset"). Any amounts owed for interest charges
on the Agency Loan, however, shall not be offset against the Agency Grant but rather, Developer shall
make other arrangements to pay such charges out of residual receipts, as defined by HUD and as may
be approved in advance in writing by HUD. At the time of such Offset, the Agency shall within 30
days, cancel the note evidencing the Agency Loan and cause a reconveyance to be recorded on any
outstanding deed of trust securing the Agency Loan. The Agency Grant, except for off-site funds
which may be escrowed and disbursed periodically throughout construction of the Project, shall be
disbursed prior to or concurrently with the HUD Capital Advance and shall be funded prior to the date
that the City issues its certificate of occupancy for the Improvements as then may have been
constructed upon the Site. The Agency shall have no further authority or obligation to the Developer
under this Agreement to disburse any portion of the Agency Grant after the date that the City so issues
its Certificate of Occupancy for the Improvements.
3. [§407] Conditions Precedent to Closing of Agency Loan
On or before 12:00 noon on the business day preceding the Closing Date, the Agency
shall deliver to the Escrow Holder a copy of the Grant Deed evidencing title to the subject property,
along with a policy of title insurance insuring that the property consists of a legal lot pursuant to the
Subdivision Map Act with fee title vested in the Developer and subject only to:
(1) non-delinquent real property taxes;
(2) non-monetary title exceptions approved by the Agency; and
(3) the fully executed Deed of Trust.
4. [§408] Conditions Precedent to Closing of Agency Grant
Disbursement of the Agency Grant shall be conditioned on the Developer meeting all
conditions of the HUD Firm Commitment for Section 202 Capital Advance funding acceptable to the
Developer in compliance with all requirements of the City including plans and specifications approved
by the City, all building permits, execution of all certificates for all insurance policies required as set
forth in Section 306 of this Agreement.
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At the time established in the Schedule of Performance and, in any event, prior to
disbursement of any portion of the Agency Grant, the Developer shall deliver to the Agency the
following documents or instruments, all of which shall be in full force and effect at the time of
disbursement of any portion of the Agency Grant:
a. All building permits.
b. A proposed construction contract between the Developer and a licensed
general contractor approved by HUD covering all construction required by this Agreement.
C. A construction budget, current as of the date of disbursement,
demonstrating to the satisfaction of the Agency the availability of sufficient funds to construct the
Improvements.
d. A copy of a completion bond and a payment bond, each in the amount of
one hundred percent (100%) of the amount of the construction contract in favor of HUD and the
Developer or, alternatively, evidence satisfactory to HUD of a cash deposit of twenty-five percent
(25%) of such amount.
e. A copy of the Firm Commitment for the HUD Section 202 Capital
Advance acceptable to the Developer. The Developer shall also provide the Agency with evidence that
equity funds are available to fund the portion of Development Costs, if any, not funded by the HUD
Section 202 Capital Advance and the Agency Grant.
f. A soils report satisfactory to the Agency, including a statement of
whether or not the Site is in an earthquake hazard area and an engineering study regarding earthquake
design, and the qualifications and experience of the soils engineer preparing such report.
g. An environmental assessment prepared by a qualified engineer
acceptable to the Agency relating to the presence of Hazardous Substances in, on or around the Site,
and confirming that all Hazardous Substances described in such assessment have been removed or
mitigated in accordance with law, and that the condition of the Site will not result in liability for
cleanup of the Site by the Developer or the Agency under applicable law.
h. Duplicate originals of all insurance policies required as set forth in
Section 306 of this Agreement.
i. Documents relating to the Developer's corporate existence, including:
copies of Developer's Articles of Incorporation together with any and all amendments thereto, certified
as of a recent date by the Secretary of State of California; a certified copy of the Developer's Bylaws
together with any and all amendments thereto; and a certificate of status of the Developer, issued on a
recent date by the California Secretary of State.
j. Deposit in escrow of the financing documents required to cause the HUD
Section 202 Capital Advance proceeds to be committed and available, in an amount sufficient, when
combined with the Agency Grant, to complete the construction of the Improvements.
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5. [§409] Defaults Following Closing of Agency Grant
In the event that the Developer, on or before the date established in the Schedule of
Performance for such action, fails:
a. to complete construction of the Improvements within the time provided
in the Schedule of Performance;
b. to fulfill its obligations to the Agency under this Agreement, or any
agreement or instrument executed in connection herewith; or
C. to close the HUD Section 202 Capital Advance.
The Agency, at its option, may declare the Developer to be in default and require repayment of the
Agency Grant; provided, however, that during the period the HUD Capital Advance Documents are in
effect, the Agency may not declare acceleration of repayment of the Agency Grant.
6. [§410] Repayment of Agency Grant
a. The Agency Grant shall be repaid immediately if the Project, or any
portion thereof or interest therein, is sold, transferred, assigned or refinanced without the prior written
consent of the Agency; provided, however, that during the term of the HUD Capital Advance
Documents the foregoing shall not apply to a transfer to HUD or to a transferee approved by HUD and
any such repayment shall be made only from residual receipts and is subject to the approval of HUD.
b. In the event the Project is sold or refinanced during the term of this
Agreement, with or without the prior written consent of the Agency, the Net Proceeds of such sale or
refinancing shall be paid to the Agency to the extent necessary to repay in full the Agency Grant,
provided that during the term of the HUD Capital Advance Documents any such proceeds be first
applied to pay any project expenses, repairs and reserves required by HUD.
C. The term of this Agreement shall be fifty-five (55) years from the date of
issuance of the Certificate of Occupancy but not before the maturity date of the HUD Capital Advance
Documents.
V. [§500] DEFAULTS,REMEDIES AND TERMINATION
A. [§501] Defaults- General
Subject to the extensions of time set forth in Section 605, failure or delay by either party to
perform any term or provision of this Agreement, or the breach of any representation or warranty,
constitutes a default under this Agreement. The party who so fails or delays shall immediately
commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or
remedy with reasonable diligence and, during any period of curing, shall not be otherwise in default of
this Agreement.
The injured party shall given written notice of default to the party in default, specifying the
default complained of by the injured party.
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Any failures or delays by either party in asserting any of its rights and remedies as to any
default under this Agreement shall not operate as a waiver of any default or of any such rights or
remedies arising pursuant to such default; nor shall it change the time of default following written
notification from the non-defaulting party. Any such delays or failure by either party in asserting any
of its rights and remedies shall not deprive any party of its right to institute and maintain any actions or
proceedings, which it may deem necessary to protect, assert or enforce any such rights or remedies.
B. [§502] Legal Actions
1. [§503] Institution of Legal Actions
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 purpose of this Agreement. 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 for the Central District of California.
2. [§504] Applicable Law
The laws of the State of California shall govern the interpretation and enforcement of
this Agreement.
3. [§505] Acceptance of Service of Process
If 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 Agency Interim Executive Director
or designee of the Agency, or in such other manner as may be provided by law.
If any legal action is commenced by the Agency against the Developer, service of
process on the Developer shall be made by personal service upon an authorized officer or general
partner or managing member, as applicable, or in such manner as may be provided by law, and shall be
valid whether made within or outside the State of California.
C. [§506] Rights and Remedies are Cumulative
Except with respect to 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 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.
D. [§507] Damages; Specific Performance
If either party defaults with regard to any of the provisions of this Agreement, the non-
defaulting party shall serve written notice of such default upon the defaulting party. If the default is
not cured by the defaulting party within ninety (90) calendar days after service of the notice of default,
or if the default is not commenced to be cured within ninety (90) calendar days after service of the
notice of default and is not cured diligently within a reasonable period of time after commencement,
the defaulting party shall be liable to the other party for damages caused by such default, and the non-
defaulting party, at its option, may institute an action for specific performance of the terms of this
Agreement.
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E. [§508] Remedies and Rights of Termination
1. [§509] Termination by the Developer
The Developer, at its option, may terminate this Agreement if the Agency is in default
of its obligations under this Agreement and such default is not cured within ninety (90) calendar days
after written notice by the Developer, or if the Developer fails to obtain a Firm Commitment for
Capital Advance Financing from HUD on terms satisfactory to the Developer. Termination by the
Developer shall not terminate the provisions of the Promissory Note and Deed of Trust and all other
covenants contained herein which run with the land.
2. [§510] Termination by Agency
The Agency, at its option, may terminate this Agreement if any of the following occur:
(i) the Developer assigns or attempts to assign this Agreement, or any rights herein, or makes any total
or partial sale, sublease, transfer or conveyance of the whole or any part of the Site or the Project,
except as permitted by this Agreement; and (ii) subject to force majeure, the Developer is in default of
any of its obligations under this Agreement, and such default is not cured within ninety (90) calendar
days after the date of written demand therefore by the Agency provided, however, that this Agreement
shall not be terminated during the term of the HUD Capital Advance Documents without the prior
written approval of HUD.
VI. [§600] GENERAL PROVISIONS
A. [§601] Notices, Demands and Communications Between the Parties
Formal notices, demands and communications between the Agency and the Developer shall be
sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt
requested, to the principal offices of the Agency and the Developer as designated in Section 104 and
105 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 by mail as provided in this
Section 601.
B. [§602] Conflict of Interests
No member, official or employee of the Agency shall have any personal interest, direct or
indirect, in this Agreement nor shall any such member, official or employee participate in any decision
relating to the Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is directly or indirectly interested.
C. [§603] Warranty Against Payment of Consideration for Agreement
The Developer warrants that it has not paid or given, and will not pay or give, any third party
any money or other consideration for obtaining this Agreement.
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D. [§604] Non-liability of Agency Officials and Employees
No member, official or employee of the Agency or of the Developer shall be personally liable
to the other party or any successor in interest, in the event of any default or breach by the Agency or
the Developer for any amount which may become due to the Developer or the Agency or its successor,
or on any obligations under the terms of this Agreement.
E. [§605] Enforced Delay; Extension of Time of Performance
Notwithstanding specific provisions of this Agreement, performance by either party hereunder
shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lock-
outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics,
quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority,
litigation including litigation challenging the validity of this transaction or any element thereof,
unusually severe weather, inability to secure necessary labor, materials or tools, delays of any
contractor, subcontractor, or suppliers, acts of the other party, acts or failure to act of the City, the
Agency or any other public or governmental agency or entity (other than that acts or failure to act of
the Agency or the City shall not excuse performance by the Agency), or any other causes beyond the
control or without the fault of the party claiming an extension of time to perform.
An extension of time for any such cause shall be for the period of the enforced delay and shall
commence to run from the time of the commencement of the cause, if notice by the party claiming
such extension is sent to the other party within thirty (30) calendar days after the commencement of the
cause. Times of performance under this Agreement may also be extended in writing by the Agency
and the Developer.
F. [§606] Inspection of Books and Records
The Agency or its designee has the right at all reasonable times to inspect the books, records
and other documents of the Developer pertaining to the Site, the Agency Grant Eligible Improvements
and/or the Project pertinent to the purposes of this Agreement.
G. [§607] Approvals
Approvals required of 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, if
no time is given, within a reasonable time.
H. [§608] Minor Modifications to Agreement
The Developer and the Agency presently believe that the terms and provisions of this
Agreement are consistent with and accommodate the final form of the HUD Section 202 Capital
Advance Documents as may hereafter be required by HUD. However, the Developer and the Agency
acknowledge and recognize that certain minor modifications of this Agreement may be necessary to
accommodate the final form of one or more of the various HUD Section 202 Capital Advance
Documents for the Project as may be reasonably required by HUD. The Agency Interim Executive
Director, with the advice of Agency counsel, shall be the Agency officer authorized to act for the
Agency pursuant to this Section 608.
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Accordingly, the Agency and the Developer agree on a best efforts basis to consider making
reasonable accommodations and if necessary to approve such minor technical and conforming
appropriate written modifications of this Agreement (and any exhibit attached hereto) as required to
accommodate the final form of the HUD Section 202 Capital Advance Documents for the Project and
to close the escrow for the acquisition of the Site with the proceeds of the Agency Loan; provided,
however, that the acknowledgment of the parties under this Section 608, shall not be deemed to require
or compel the approval of any particular technical or conforming modification of this Agreement by
either party based upon a good faith exercise of business judgment of a party and the failure of either
party to approve such a technical or conforming modification of this Agreement shall not be deemed to
be a default hereunder
VII. [§700] ENTIRE AGREEMENT, WAIVERS, AMENDMENTS AND HUD PROVISIONS
This Agreement shall be executed in three (3) duplicate originals, each of which is deemed to
be an original. This Agreement includes twenty-four (24) pages and seven (7) Exhibits, which
constitute the entire understanding and agreement of the parties.
This Agreement integrates all of the terms and conditions mentioned herein or incidental
hereto, and supersedes all negotiations or previous agreements between the parties with respect to the
Agency Loan and the Agency Grant.
All waivers of the provisions of this Agreement must be in writing and signed by the
appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing
and signed by the appropriate authorities of the Agency and the Developer.
Notwithstanding anything to the contrary in this Agreement, if any provision of this Agreement
tends to contradict, modify or in any way change the terms of the Regulatory Agreement encumbering
the Site to be entered into between the Secretary of HUD and the Developer, the terms of the
Regulatory Agreement shall prevail and govern; or if any provision of this Agreement in any way
tends to limit the Secretary of HUD in his administration of the Housing Act of 1959, as amended, or
the regulations pursuant thereto, this Agreement shall be deemed amended so as to comply with the
Act, Regulations and the Regulatory Agreement. No other amendment to this Agreement shall be
effective without the prior written approval of the Secretary. Notwithstanding anything herein to the
contrary, if the Secretary of HUD should take title to the Site through foreclosure, deed in lieu of
foreclosure, or otherwise, all covenants, conditions and restrictions set forth in this Agreement shall
cease and terminate and be of no further force and effect.
VIII. [§800] TIME OF ACCEPTANCE OF AGREEMENT BY AGENCY
This Agreement, when executed by the Developer and delivered to the Agency, must be
authorized, executed and delivered by the Agency within thirty (30) calendar days after the date of
signature by the Developer, or this Agreement may be terminated by the Developer on written notice
to the Agency.
IX. [§900] PARTIAL INVALIDITY
If any term or provision of this Agreement or of the Exhibits hereto shall to any extent be
determined invalid or unenforceable by a court of competent jurisdiction, the remainder of all such
documents and instruments and each term and provision thereof shall be valid and be enforced to the
fullest extent permitted by law.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates written
opposite their signature below.
AGENCY
Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic
Date: By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Co el
DEVELOPER
TELACU Housing-San Bernardino IV, Inc.,
I a California nonprofit public benefit corporation
Date: By:
Tom F. Provencio, Treasurer
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EXHIBIT "A"
SITE MAP
4822-0965-4786.1
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EXHIBIT "B"
LEGAL DESCRIPTION OF SITE
REAL PROPERTY IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL NO. 1: (APN: 1191-282-01)
ALL THAT PORTION OF THE NORTHEAST 1/4 OF SECTION 32, TOWNSHIP 1 NORTH,
RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTH 1/4 CORNER OF SAID SECTION 32; THENCE ALONG THE
WEST LINE OF SAID NORTHEAST 1/4, SOUTH 0° 21' 40", EAST 41.25 FEET TO THE TRUE
POINT OF BEGINNING, SAID POINT BEING ALONG THE SOUTHERLY LINE OF HIGHLAND
AVENUE, 82.50 FEET WIDE; THENCE ALONG THE SOUTHERLY LINE OF HIGHLAND
AVENUE, NORTH 89° 40' 05" EAST, 261.52 FEET; THENCE SOUTH 0° 21 ` 40" EAST 261.52
FEET; THENCE SOUTH 89° 40' 05" WEST 261.52 FEET TO THE WEST LINE OF SAID
SOUTHEAST 1/4; THENCE ALONG THE WEST LINE OF SAID NORTHEAST 1/4 NORTH 0°
21' 40" WEST, 261.52 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL NO. 2: (APN: 1191-282-02)
ALL THAT PORTION OF THE NORTHEAST 1/4 OF SECTION 32, TOWNSHIP 1 NORTH,
RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTH 1/4 CORNER OF SAID SECTION 32; THENCE ALONG THE
WEST LINE OF SAID NORTHEAST 1/4, SOUTH 0° 21' 40" EAST 41.25 FEET TO A PONT ON
THE SOUTHERLY LINE OF HIGHLAND AVENUE, 82.50 FEET WIDE; THENCE ALONG THE
SOUTHERLY LINE OF HIGHLAND AVENUE, NORTH 89° 40' 05" EAST 261.52 FEET TO THE
TRUE POINT OF BEGINNING; THENCE SOUTH 0° 21' 40" EAST 261.52 FEET; THENCE 89°
44' 45" WEST 105 FEET FROM THE EAST LINE OF THE NORTHWEST 1/4 OF THE
NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SAID SECTION 32; THENCE ALONG A LINE
PARALLEL TO SAID EAST LINE, NORTH 00 26' 05" WEST 111.52 FEET; THENCE NORTH 89°
40' 05" EAST 21 FEET; THENCE NORTH 0' 26' 05" WEST 150 FEET, MORE OR LESS, TO THE
SOUTHERLY LINE OF SAID HIGHLAND AVENUE; THENCE ALONG THE SOUTHERLY
LINE OF HIGHLAND AVENUE SOUTH 890 40' 05" WEST 316.86 FEET TO THE TRUE POINT
OF BEGINNING.
4822-0965-4786.1
EXHIBIT "C"
SCOPE OF DEVELOPMENT
A. General Project Description
The Site contains approximately 107,157 square feet. The Project shall consist of the
construction of eighty-nine (89) one (1) bedroom units designated as Affordable Housing for
senior citizens of Very Low Income, as defined by federal law and regulations, and one (1) two
(2) bedroom manager's unit.
B. Design Objectives
The following is a statement of design objectives for development of the Site:
1. The creation and achievement of an attractive and pleasant environment reflecting a
high level of concern for architectural and urban design principles both in terms of the
development itself and its compatibility and suitability with the surrounding
community.
2. The provision of a pleasing, safe and well-maintained living environment and vehicle
parking in an urban environment.
C. Development Standards
The Project shall be designed and constructed in accordance with the approved terms
and conditions of approval of the land use entitlements approved by the City of San
Bernardino for this Project, attached hereto and incorporated herein by reference.
D. Lot Consolidation
The Developer shall be responsible for consolidating the parcels and shall adhere to the
City's Public Works requirements when consolidating lots.
4822-0965-4786.1
EXHIBIT "D"
SCHEDULE OF PERFORMANCE
Execution of Agreement On or before March 17, 2008.
Agreement shall be authorized,
executed and delivered by Developer to Agency.
Evidence of Insurance Prior to the closing of the Agency escrow
Developer shall furnish to the Agency, a loan for acquisition.
Certificate of Insurance as set forth in
Section 306 of the Agreement.
Opening and closing of escrow on land acquisition On or before March 31, 2008.
Developer shall close escrow with Property Owner
on the land acquisition.
Evidencing of Financing On or before February 29, 2009,
Developer shall provide Agency with unless extended for up to 6 months by
evidence of financing for the Project HUD.
pursuant to Section 400 of the Agreement.
Design No later than March 1, 2009.
Developer shall prepare all plans and
specifications and obtain all required permits.
Opening of Escrow Within 30 calendar days of written
Agency and Developer shall open escrow request from the Developer.
to complete HUD Initial Closing.
Agency Funding On or before HUD Initial Closing.
HUD Initial Closing On or before November 30, 2009.
Commencement of Construction Within 10 calendar days of HUD
Developer shall commence construction Initial Closing.
of the improvements of the Site pursuant
to Section 305 and Exhibit"D".
Completion of Construction Within the contract term accepted by
Developer shall complete the construction HUD at Initial Closing or as extended
of all improvements on the Site as well as by HUD, but not later than July 31, 2010.
off-site improvements.
4822-09654786.1
EXHIBIT "D"
SCHEDULE OF PERFORMANCE CONTINUED
It is understood that this Schedule of Performance is subject to all of the terms and conditions of the
text of the Agreement. The summary of the items performance in this Schedule of Performance is not
intended to supersede or modify the more complete description in the text; in the event of any conflict
of or inconsistency between this Schedule of Performance and the text of the Agreement, the text shall
govern.
The time periods set forth in this Schedule of Performance may be altered or amended only by written
agreement signed by both the Developer and the Agency. The Interim Executive Director of the
Agency shall have the authority to approve extensions of time without action of the Council
Development Commission of the Agency not to exceed a cumulative total of 180 days.
Notwithstanding the foregoing, during the term of the HUD Capital Advance Documents, any
extensions of time granted by HUD shall be reflected by a corresponding extension of time to the dates
set forth in this Schedule of Performance without requiring the approval of Agency, if such extension
is required by HUD.
* This schedule is based on the City's commitment to the planning process.
4822-09654786.1
EXHIBIT"E"
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
4822-0965-0786.1
e
I RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Redevelopment Agency )
of the City of San Bernardino )
Attn.: Interim Executive Director )
201 North"E" Street, Suite 301 )
San Bernardino, California 92401 )
I )
Recording Fee Exempt Pursuant to Government Code Section 6103
I
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AGENCY REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
(HOME Program 24 Code of Federal Regulation
Part 92; Health and Safety Code Section 33334.2)
THIS AGENCY REGULATORY AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS (the "Agency Regulatory Agreement") is made and entered into
as of this day of 2008, by and between the Redevelopment Agency of the
City of San Bernardino, a body corporate and politic (the "Agency") and TELACU Housing-San
Bernardino IV, Inc., a California nonprofit public benefit corporation(the "Developer").
--RECITALS--
A. The Agency and the Developer have entered into that certain HOME Grant
Development Agreement, dated as of (the "Agreement"). A copy of the Agreement
is on file with the Agency Secretary.
B. Pursuant to the terms of the Agreement, the Agency will provide resources to the
Developer for improvement of the "Project" subject to the conditions of the "HUD Capital
Advance Documents", as these terms are more specifically described in the Agreement, and the
Agency has agreed to provide the Developer with an Agency HOME Grant Development
Agreement in support of the Project, subject to certain conditions.
C. In consideration for the Agency HOME Grant Development Agreement, the
Developer has agreed to maintain a certain number of the rental dwelling units in the Project as
available at "affordable rent" to "Very Low income households" of "Qualified Permanent
Residents" for Senior Citizens as these terms are defined in the Agreement for the term of this
Agency Regulatory Agreement and to further agree to observe all the terms and conditions set
forth below.
D. The Agency has agreed to provide the Agency HOME Grant Development
Agreement on the condition that the Project be maintained and operated in accordance with
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Health and Safety Code Sections 33334.2 and 33413 and in accordance with certain additional
restrictions concerning affordability, operation, and maintenance of the Project, as specified in
this Agency Regulatory Agreement.
E. In order to ensure that the Project will be used and operated in accordance with
these conditions and restrictions, the Agency, and the Developer wish to enter into this Agency
Regulatory Agreement for themselves and their successors and assigns.
THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, ITS SUCCESSORS AND ASSIGNS AND DEVELOPER, ITS SUCCESSORS
AND ASSIGNS HEREBY COVENANT AND AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS
1.1 Definitions. When used in this Agency Regulatory Agreement, certain terms and
phrases as denoted by an initially capitalized letter shall have the same meaning as found in the
Agreement unless the specific context of the usage of a term or phrase may otherwise require,
and certain additional defined terms which appear below in this Section 1.1 shall have the
meaning in this Agency Regulatory Agreement as ascribed below:
a. "Adjusted Income" shall mean the total anticipated annual income of all persons in a
household which occupies (or is proposed to occupy) a Unit as calculated in
accordance with 25 California Code of Regulations Section 6914 or pursuant to a
successor state housing program regulation that utilizes a reasonably similar method
of calculation of adjusted annual income. In the event that no such program exists,
the Agency shall provide the Developer with a reasonably similar method of
calculation of adjusted income as provided in 25 California Code of Regulations
Section 6914.
b. "Agency Regulatory Agreement" means that certain Agency Regulatory
Agreement and Declaration of Restrictive Covenants dated as of
. 2008, by and between the Developer and the Agency. A copy
of the Agency Regulatory Agreement is on file with the Agency Secretary and is
incorporated herein by this reference.
C. "Certificate of Occupancy Date" means the date of issuance by the City of the
initial Certificate of Occupancy for the Project.
d. "City"shall mean the City of San Bernardino,California.
e. "Closing Date" shall mean the date of recordation of this Agency Regulatory
Agreement.
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f. "Developer" shall mean TELACU Housing — San Bernardino IV, Inc., a
California nonprofit public benefit corporation.
g. "HOME Assisted Units" shall mean the eighty-nine (89) rental Units in the
Project.
h. "HUD Capital Advance Documents" shall collectively refer to the HUD Note,
Deed of Trust, Regulatory Agreement, Use Agreement, Capital Advance
Agreement and Project Rental Assistance Contract as required by Section 202 of
the Housing Act of 1959, as amended (the "Act").
i. "Management Agent" shall mean the experienced management agent selected by
the Developer for the management of Project as provided in Section 5.2 of this
Agency Regulatory Agreement.
j. "Site" shall mean the real property described in Exhibit "A" attached hereto and
incorporated herein.
k. [RESERVED --NO TEXT.]
1. "Rent" shall mean the total of each monthly payment by the tenants of a Unit to
the Developer for the following: use and occupancy of the Unit and land and
associated facilities, including parking (other than parking services acquired by
tenants on an optional basis); any separately charged fees or service charges
assessed by the Developer which are required of all tenants, other than security
deposits; the cost of an adequate level of service for utilities paid by the tenant,
including garbage collection, sewer, common area, water, electricity, gas and
other heating, and refrigeration costs, but not telephone service; any other interest,
taxes, fees or charges for use of the land or associated facilities and assessed by a
public or private entity other than the Developer, and paid by the tenant.
M. "Restricted Units" shall mean the eighty-nine (89) Units which are Affordable
Rent- restricted pursuant to this Agency Regulatory Agreement.
n. "Senior Citizen Households" shall have the meaning as set forth in the
Agreement.
o. "Term" shall mean the period of fifty-five (55) years, beginning on the date of
recordation of the Agency Regulatory Agreement and ending on the fifty fifth
(55`") anniversary following such date.
P. "Very Low and Low Income" shall mean the annual income for very low and low
income households with an Adjusted Income as established and amended from
time to time pursuant to Section 8 of the United States Housing Act of 1937, as
amended, and as published by the State of California Department of Housing and
Community Development.
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q. "Units" shall mean the eighty-nine (89) Senior Citizen Household rental dwelling
units and one (1) manager's unit to be constructed on the Site.
ARTICLE 2
SENIOR CITIZEN HOUSEHOLD RESTRICTED UNITS
-- RENT AND OCCUPANCY AFFORDABILITY COVENANTS --
2.1 Occupancy Requirement. During the first forty (40) years of the Term of this
Agreement not less than eighty-nine (89) of the Units (the Restricted Units) shall be rented or
occupied by, or if vacant, available for rental and occupancy by Very Low Income Senior
Citizen Households. Thereafter for the additional fifteen (15) year Term of this Agreement, but
not before the expiration of the term of the HUD Capital Advance Documents, the Restricted
Units shall be rented and occupied by, or if vacant, available for rental and occupancy by Low
Income tenants as defined in Health and Safety Code Section 50093.
2.2 Allowable Rent for Restricted Units.
a. Subject to Section 2.3 below, the Rent charged the occupants of the Restricted
Units shall not exceed thirty percent (30%) of one-twelfth of Lower Income, adjusted for
household size.
b. In calculating the allowable Rent for the Restricted Units, the household size shall
be assumed to be one (1) person per Unit.
C. At least one hundred eighty (180) calendar days prior to increasing Rent on any
Restricted Unit, the Developer shall submit to the Agency for review and approval a written
request for such increase. Households occupying Units shall be given at least ninety (90) days
written notice prior to any increase in Rent.
Rent for a Restricted Unit may only be increased one time per year and the Rent levels
following an increase, or upon a new occupancy, shall not exceed the applicable Rent levels set
forth in Section 2.2.a., above.
2.3 Increased Income of a Senior Citizen Household Occupancy of a Restricted Unit.
a. In the event, upon recertification of an occupant household's income for a
Restricted Unit, the Developer discovers that a Very Low and/or Low Income Household no
longer qualifies as a Very Low and/or Low Income household, then such household shall not be
required to vacate the Project and the Rent Chargeable to that household shall be increased to an
amount of Rent which is the lesser amount of(i) thirty percent (30%) of that household's actual
monthly income; or (ii) the amount payable by the tenant under State or local law. However,
when the Restricted Unit is vacated by that household or another unrestricted Unit is vacated, the
Unit shall be rented to a Very Low and/or Low Income household at the Rent level allowed in
Section 2.2 for a Restricted Unit as of the date of commencement of such a new occupancy.
Moreover, a Unit occupied by a Very Low and/or Low Income household shall be deemed, upon
the termination of such Very Low and/or Low Income household's tenancy to be continuously
occupied by a Very Low and/or Low Income household until that Unit is reoccupied.
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i
b. If the Project is subject to state or federal rules governing low income housing tax
credits, the provisions of those rules regarding continued occupancy by, and Rent charged to,
households whose incomes exceed the eligible income limitation shall apply in place of the
provisions set forth in Section 2.3.a., above.
2.4 Lease Provisions.
a. The Developer shall include in leases or rental agreements for all Restricted Units
provisions which authorize the Management Agent to immediately terminate the tenancy of any
household one or more of whose members misrepresented any fact material to the household's
qualification as a Low Income and/or Senior Citizen Household and for all Units (except the on-
site manager's unit) any misrepresentation relating to the Senior Citizen Household qualification.
Each lease or rental agreement for a Restricted Unit shall also provide that the household is
subject to annual certification in accordance with Section 4.1 below, and that, if the household's
income increases above the applicable limits for a Low Income Household such household's
Rent may be subject to increase to the lesser of(i) thirty percent (30%) of that household's actual
adjusted monthly income; or (ii) the amount payable by the Tenant under the State or local law,
or the household may be required to vacate the Unit. The form of lease approved by HUD shall
be deemed acceptable to the Agency.
b. The leases for Restricted Units shall provide that if the Project is subject to state
or federal rules governing low income housing tax credits, the provisions of those rules regarding
continued occupancy by, and increases in Rent for households whose incomes exceed the
eligible income limitation shall apply in place of the provisions set forth in Section 2.4.a, above.
2.5 HUD Compliance. During the period of time when the HUD Capital Advance
Documents are in effect with respect to the Project, compliance by the Developer with the
requirements of the HUD Section 202 program and the HUD Capital Advance Documents shall
be deemed compliance by the Developer with requirements of this ARTICLE 2, and Section 3.1,
and ARTICLE 4, and in the event of a conflict between any such provision of this Agreement
and the HUD Capital Advance Documents, the requirements of the HUD Capital Advance
Documents shall control. During the term of the HUD Capital Advance Documents, no remedies
shall be sought or defaults declared under this Agency Regulatory Agreement without the prior
written approval of HUD. During the term of the HUD Capital Advance Documents, any sums
due Agency by Developer under this Agency Regulatory Agreement shall be payable only from
residual receipts as defined by the HUD Regulatory Agreement and are subject to the prior
written approval of HUD.
ARTICLE 3
OPERATION AND MAINTENANCE OF THE PROJECT
3.1 Use as Senior Citizen Rental Housing. The Project shall be operated only as
rental housing for Senior Citizen Households, except for not more than one (1) of the Units,
which may be used and occupied by on-site resident manager(s) employed by the Developer
and/or the Management Agent. No part of the Project shall be operated as transient housing.
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3.2 Compliance with the Agreement. The Developer shall comply with all the terms
and provisions of the Agreement.
3.3 [RESERVED--NO TEXT]
3.4 Taxes and Assessments. The Developer shall pay all real and personal property
taxes, assessments and charges and all franchise, income, employment, withholding, sales, and
other taxes assessed against it, or payable by it, at such times and in such manner as to prevent
any penalty from accruing, or any lien or charge from attaching to the Site; provided, however,
that the Developer shall have the right to contest in good faith, any such taxes, assessments, or
charges. In the event the Developer exercises its right to contest any tax, assessment, or charge
against it, the Developer, on final determination of the proceeding or contest, shall immediately
pay or discharge any decision or judgment rendered against it, together with all costs, charges
and interest. Nothing herein shall prohibit the Developer from applying for or obtaining any
exemption, abatement or reduction from real estate taxes as allowed by law.
3.5 Nondiscrimination. Except as otherwise required by the rental requirements of
the HUD Section 202 program and the HUD Capital Advance Documents, all of the Units shall
be available for occupancy on a continuous basis to Senior Citizen Household members of the
general public (who are also income eligible with respect to the Restricted Units). The
Developer shall not give preference to any particular class or group of persons in renting the
Units. There shall be no discrimination against or segregation of any person or group of persons,
on account of race, color, creed, religion, sex, sexual orientation, age, marital status, national
origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment
of any Unit. Neither the Developer nor any person claiming under or through the Developer,
shall 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 any Unit or in connection with the employment of persons for the
operation and management of any Unit. All deeds, leases or contracts made or entered into by
owner as to the Units or the Site or portion thereof, shall contain covenants prohibiting
discrimination as prescribed herein. The Developer shall include a statement in all
advertisements, notices and signs for the availability of Units for rent to the effect that owner is
an Equal Housing Opportunity Provider.
ARTICLE 4
SENIOR CITIZEN HOUSEHOLD AND INCOME
CERTIFICATION AND REPORTING
4.1 Age and Income Certification.
a. The Developer shall obtain and complete prior to initial occupancy, and thereafter
maintain on file, income certifications from each tenant household renting any of the Restricted
Units. The Developer shall make a good faith effort to verify that the income provided by an
applicant or occupying Senior Citizen Household in an income certification is accurate by taking
one or more of the following steps as a part of the verification process: (1) obtain an income tax
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return for the most recent tax year; (2) conduct a credit agency or similar search; (3) obtain an
income verification form from the applicant's current employer; (4) obtain an income
verification form from the United States Social Security Administration and/or the California
Department of Social Services if the applicant receives assistance from either of such agencies;
or (5) if the applicant is unemployed and has no such tax return, obtain another form of
independent verification. On the anniversary of the occupancy of such Restricted Unit, the
Developer shall recertify the household income of the Senior Citizen Household occupying the
Restricted Unit. Copies of all tenant income certifications shall be available to the Agency upon
request.
b. The Developer shall verify, prior to the occupancy of each Unit that the Senior
Citizen Household satisfies the requirements of a Qualified Permanent Resident as provided in
the Agreement. Thereafter, the Developer shall annually verify that the Senior Citizen
Household retains its qualification as a Senior Citizen Household. For purposes of this Section
4.Lb, the Developer may conclusively rely upon the evidence of the age of the occupant(s) of the
Unit as presented in a valid California Driver's License, other form of identification issued by the
state or federal government, which includes a date of birth.
4.2 Annual Restricted Unit Rental Affordability Report to Agency. Commencing on
the June 30 next following the Certificate of Occupancy Date and on each June 30 thereafter
during the Term of the Agency Regulatory Agreement, the Developer shall submit a report to the
Agency, in a form approved by the Agency. The annual report shall include for each Restricted
Unit covered by this Agency Regulatory Agreement, the Rent and the income and family size of
the Senior Citizen Household occupying the Restricted Unit. The report shall also state the date
the tenancy commenced for each Restricted Unit and such other information as the Agency may
be required by law to obtain; provided, however, that the Agency shall take reasonable steps to
maintain the confidential nature of the information contained therein relating to any Restricted
Unit.
4.3 Additional Information. The Developer shall provide any additional information
reasonably requested by the Agency, including without limitation such Project-related income
and expense accounting information. The Agency shall have the right to examine and make
copies of all books, records or other documents of Developer, which pertain to any Unit;
provided, however, that the Agency shall take reasonable steps to maintain the confidential
nature of the information contained therein.
4.4 Records. The Developer shall maintain complete, accurate and current records
pertaining to the Units, and shall permit any duly authorized representative of the Agency
(during business hours and upon not less than seventy-two (72) hours notice) to inspect records,
including records pertaining to income and household size of tenant households of Restricted
Units; provided, however, that the Agency shall take reasonable steps to maintain the
confidential nature of the information contained therein relating to any household.
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ARTICLE 5
PROPERTY MANAGEMENT
5.1 Management Responsibilities. The Developer shall . be responsible for
management of the Project, including, without limitation, the selection of tenants, certification
and recertification of household size, verification of income for the Restricted Units and the age
of the head of household of all Units, evictions, collection of rents and deposits, maintenance,
landscaping, routine and extraordinary repairs, replacement of capital items, and security. The
Agency shall have no responsibility for the management or operation of the Site or the Project.
5.2 Management Agent. The Project shall at all times be managed by an experienced,
qualified Management Agent reasonably acceptable to the Agency, with demonstrated ability to
operate Senior Citizen residential rental facilities similar to the Project in a manner that will
provide decent, safe, and sanitary housing. For the purposes hereof, if the Developer directly
performs the functions of the Management Agency by its employees or by means of a service
contract with an entity owned or controlled by the Developer, such a Management Agent shall be
deemed approved by the Agency. If the Management Agent is an entity or person other than the
Developer, its employees or an entity owned or controlled by the Developer, the Developer shall
submit for the Agency's approval the identity of any proposed Management Agent, together with
additional information relevant to the background, experience and financial condition of any
proposed Management Agent as reasonably requested by the Agency. If the proposed
Management Agent meets the standard for an experienced qualified Management Agent as set
forth above, the Agency shall approve the proposed Management Agent by notifying the
Developer in writing. Unless the proposed Management Agent is disapproved by the Agency
within thirty (30) days, which disapproval shall state with reasonable specificity the basis for
disapproval, the proposed Management Agent shall be deemed approved. The Developer is
hereby approved by the Agency as the Management Agent for the Project. Any Management
Agent approved by HUD during the term of the HUD Capital Advance Documents shall be
deemed approved by the Agency.
5.3. Maintenance of the Site and the Project.
a. The Developer shall maintain the Site and the Project in good repair and a neat,
clean and orderly condition, ordinary wear and tear excepted. In the event that, at any time
during the term of this Agency Regulatory Agreement, there is an occurrence of an adverse
condition on any area of the Site in contravention of the general maintenance standard described
above (a "Maintenance Deficiency"), then the Agency shall notify the Developer in writing of
the Maintenance Deficiency and give the Developer sixty (60) days from receipt of such notice
to cure the Maintenance Deficiency as identified in the notice. In the event the Developer fails to
cure or commence to cure the Maintenance Deficiency within the time allowed, the Agency may
conduct a public hearing following transmittal of written notice thereof to the Developer ten(10)
days prior to the scheduled date of such public hearing in order to verity whether a Maintenance
Deficiency exists and whether the Developer has failed to comply with the provision of this
Section 5.3a. If, upon the conclusion of a public hearing, the Agency makes a finding that a
Maintenance Deficiency exists and that there appears to be non-compliance with the general
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maintenance standard, as described above, thereafter the Agency shall have the right to enter the
Site and perform all acts necessary to cure the Maintenance Deficiency, or take other action at
law or equity the Agency may then have to accomplish the abatement of the Maintenance
Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency
as authorized by this Section 5.3a shall become a lien on the Site. If the amount of the lien is not
paid within thirty (30) days after written demand for payment by the City has been presented to
the Developer, the Agency shall have the right to enforce the lien in the manner as provided in
Section 5.3c.
b. Graffiti which is visible from any public right-of-way adjacent or contiguous to
the Site shall be removed by the Developer in the following manner: (1) from any exterior
surface of a structure or improvement on the Site by painting over the evidence of such
vandalism with a paint which has been color-matched to the surface on which the paint is applied
or (2) from all other surfaces graffiti may be removed with solvents, detergents or water as
appropriate. In the event that graffiti is placed on the Site and such graffiti is visible from an
adjacent or contiguous public right-of-way and, thereafter such graffiti is not removed within
seventy-two (72) hours following the time of its application, then in such event and without
notice to the Developer, the Agency shall have the right to enter the property and remove the
graffiti. Notwithstanding any provision of Section 5.3 to the contrary, any sum expended by the
Agency for the removal of graffiti from the Site as authorized by this Section 5.b, shall become a
lien on the Site. If the amount of the lien is not paid within thirty (30) days after written demand
for payment by the Agency to the Developer, the Agency shall have the right to enforce its lien
in the manner as provided in Section 5.3c.
C. The parties hereto further mutually understand and agree that the rights conferred
upon the Agency under this Section 5.3 expressly include the power to establish and enforce a
lien or other encumbrance against the Site, or any portion thereof, in the manner provided under
Civil Code Sections 2924, 2924b and 2924c in the amount reasonably necessary to restore the
Site to the maintenance standard required under Section 5.3a, or Section 5.3b, including
reasonable attorneys fees and costs of the Agency associated with the abatement of the
Maintenance Deficiency or removal of graffiti and the collection of the costs of the Agency in
connection with such action. The provisions of this Section 5.3 shall be a covenant running with
the land for the Term of the Agency Regulatory Agreement and shall be enforceable by the
Agency, and its successors and assigns. Nothing in the foregoing provisions of this Section 5.3
shall be deemed to preclude the Developer from making any alternations, additions, or other
changes to any structure or improvement or landscaping on the Site, provided that such changes
comply with applicable law. No lien as may arise under this Section 5.3 shall interfere with or
be superior to the security interest of any mortgage secured by the Site.
5.4 Insurance Coverage. The Developer shall cause to have in full force and effect
during the term of this Agency Regulatory Agreement insurance coverage as follows:
(i) If any building or improvements erected by the Developer on the Site shall be
damaged or destroyed by an insurable cause, the Developer shall diligently repair
or restore the Site and the Project consistent with the original plans and
specifications for the Project. Such work or repair shall be commenced within
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one hundred twenty (120) days after the damage or loss occurs and shall be
completed within one year thereafter. All insurance proceeds collected for such
damage or destruction shall be applied to the cost of such repairs or restoration.
Developer shall ensure that there is at all times during the term of this Agency
Regulatory Agreement sufficient insurance coverage to adequately fund any
repair or restoration of the site.
(ii) A policy of comprehensive general liability insurance written on a per occurrence
basis in an amount not less than either (i) an aggregate single limit of THREE
MILLION DOLLARS ($3,000,000.00) or (ii) bodily injury limits of ONE
MILLION DOLLARS ($1,000,000.00) per occurrence and property damage
limits of ONE MILLION DOLLARS ($1,000,000.00) per occurrence.
(iii) A policy of workers' compensation insurance in such amount as will fully comply
with the laws of the State of California and which shall indemnify, insure and
provide legal defense for both the Developer, the Agency, and the City against
any loss, claim or damage arising from any injuries or occupational diseases
occurring to any worker employed by or any persons retained by the Developer in
the course of carrying out the activities in this Agency Regulatory Agreement.
(iv) A policy of comprehensive automobile liability insurance written on a per
occurrence basis in an amount not less than either (i) bodily injury liability limits
of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) per person
and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per occurrence
and property damage liability limits of ONE HUNDRED THOUSAND
DOLLARS ($100,000.00) per occurrence and ONE HUNDRED THOUSAND
DOLLARS ($100,000.00) in the aggregate or (ii) combined single limit liability
of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00). Said policy shall
include coverage for owned, non-owned, leased and hired vehicles. (If
applicable).
All of the above policies of insurance shall be primary insurance and shall name the City
and the Agency, and their officers, employees, and agents as additional insureds. The insurer
shall waive all rights of subrogation and contribution it may have against the City and the
Agency and their officers, employees and agents and their respective insurers. All of said
policies of insurance shall provide that said insurance may not be amended or canceled without
providing thirty (30) days prior written notice by registered mail to Agency. In the event any of
said policies of insurance are canceled, the Developer shall, prior to the cancellation date, submit
new evidence of insurance in conformance with this Section 5.4 to the Interim Executive
Director. No operation of the Project shall commence until the Developer has provided Agency
with certificates of insurance or appropriate insurance binders evidencing the above insurance
coverages, and said certificates of insurance or binders are approved by Agency.
The policies of insurance required by this Agreement shall be satisfactory only if issued
by companies qualified to do business in California, rated at least "A(vii)" or better in the most
recent edition of Bests Insurance Rating Guide or an equivalent rating in The Key Rating Guide
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or in the Federal Register unless such requirements are modified or waived by the Interim
Executive Director of the Agency due to unique circumstances.
Compliance by the Developer with the insurance requirements of HUD under the HUD
Capital Advance Documents shall be deemed to meet the foregoing requirements during the
period that the HUD Capital Advance Documents are in effect so long as the Agency, City and
their officers, employees, and agents are listed as additional insureds on all said policies as
evidenced by certificates of insurance issued to the City and the Agency.
The Developer agrees that the provisions of this Section shall not be construed as limiting
in any way the extent to which the Developer may be held responsible for the payment of
damages to any persons or property resulting from the Developer's activities or the activities of
any person or persons for which the Developer is otherwise responsible.
ARTICLE 6
MISCELLANEOUS AND PRIORITY OF HUD
CAPITAL ADVANCE DOCUMENTS
6.1 Term. The provisions of this Agency Regulatory Agreement shall apply to the
Site for the entire Term. This Agency Regulatory Agreement shall bind any successor, heir or
assign of the Developer, whether a change in interest occurs voluntarily or involuntarily, by
operation of law or otherwise, with or without the approval of the Agency, except as expressly
released by the Agency.
6.2 Priority of HUD Capital Advance Documents. This Agency Regulatory
Agreement shall be subject to and subordinate to the terms and provisions of the HUD Capital
Advance Documents and any other documents entered into by and between the Developer and
the Secretary of Housing and Urban Development in connection with the improvement or
operation of the Project. Notwithstanding anything contained herein to the contrary, in the event
the Secretary of HUD (Secretary) should take title to the Site through foreclosure, deed in lieu of
foreclosure, or otherwise as set forth in the HUD Capital Advance Documents, all covenants,
conditions and restrictions set forth this Agency Regulatory Agreement shall cease and terminate
and be of no further force or effect. Notwithstanding anything in this Agency Regulatory
Agreement to the contrary, in the event any provision in this Agency Regulatory Agreement
tends to contradict, modify, or in any way change the terms of the HUD Capital Advance
Documents, the term of the HUD Capital Advance Documents shall prevail and govern; or if any
provision of this Agency Regulatory Agreement in any way tends to limit the Secretary in its
administration of the National Housing Act of 1937, as amended, or the Housing Act of 1959, as
amended, or the regulations pursuant thereto, this Agency Regulatory Agreement shall be
deemed amended so as to comply with such acts, regulations and HUD Capital Advance
Documents.
6.3 [RESERVED--NO TEXT]
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6.4 Non-Liability of Officials, Employees and Agents. The Agency shall not be
personally liable to the Developer for any obligation created under the terms of this Agency
Regulatory Agreement except in the case of actual fraud or willful misconduct by such person.
6.5 Covenants to Run With the Land. Subject to the provisions of Section 6.2, the
Agency and the Developer hereby declare their express intent that the covenants and restrictions
set forth in this Agency Regulatory Agreement are affordable redevelopment housing covenants
and that each and every provision of this Agency Regulatory Agreement shall run with the land,
and shall bind all successors in title to the Site and/or the Project; provided, however, that on the
expiration of the Term of this Agency Regulatory Agreement said covenants and restrictions
shall expire.
6.6 Enforcement by the Agency. If the Developer fails to perform any obligation
under this Agency Regulatory Agreement, and fails to cure the default within thirty (30) days
after the Agency has notified the Developer in writing of the default or, if the default cannot be
cured within thirty (30) days, fails to commence to cure within thirty (30) days and thereafter
diligently pursue such cure, the Agency shall have the right to enforce this Agency Regulatory
Agreement by any or all of the following actions, or any other remedy provided by law:
a. Action to Compel Performance or for Damages. The Agency may bring an action
at law or in equity to compel the performance of the obligations of the Developer
under this Agency Regulatory Agreement, and/or for damages.
b. Enforce Liens. The Agency may enforce and execute upon the lien rights of the
Agency as conferred under Section 5.3 of this Agency Regulatory Agreement;
provided that during the term of the HUD Capital Advance Documents, HUD has
consented in writing to any such enforcement action.
6.7 Attorneys' Fees and Costs. In any action brought to enforce this Agency
Regulatory Agreement, the prevailing party shall be entitled to all costs and expenses of suit,
including attorneys' fees. This section shall be interpreted in accordance with California Civil
Code Section 1717 and judicial decisions interpreting that statute. For the purposes of this
Section 6.7, the salary, fringe benefits and overhead expenses of lawyers employed in the Office
of City Attorney of the City of San Bernardino shall be deemed to be attorney's fees.
6.8 Recording and Filing. The Agency and the Developer shall cause this Agency
Regulatory Agreement, and all amendments and supplements to it, to be recorded in the Official
Records of the County of San Bernardino, California.
6.9 Governing. This Agency Regulatory Agreement shall be governed by the
laws of the State of California, except those provisions preempted by federal law.
6.10 Amendments. This Agency Regulatory Agreement may be amended only by a
written instrument executed by all the parties hereto or their successors in title, and duly recorded
in the real property records of the County of San Bernardino, California; provided, however, that
during the period of time when the provisions of the HUD Capital Advance Documents are in
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effect this Agency Regulatory Agreement may not be amended without the prior written
approval of the Secretary of HUD.
6.11 Notice. All notices given or certificates delivered under this Agency Regulatory
Agreement shall be deemed received on the delivery or refusal date shown on the delivery
receipt, if: (i) personally delivered by a commercial service which furnishes signed receipts of
delivery or (ii) mailed by certified mail, return receipt requested, postage prepaid, addressed as
shown on the signature page. Any of the parties may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates or communications shall
be sent.
6.12 Severability. If any provision of this Agency Regulatory Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
portions of this Agency Regulatory Agreement shall not in any way be affected or impaired
thereby.
6.13 [RESERVED--NO TEXT]
6.14 Relationship of Parties. The relationship between the Agency and the Developer
during the term of this Agency Regulatory Agreement shall not be construed as a joint venture,
equity venture, or partnership. The Agency does not undertake or assume any responsibility or
duty to the Developer or any third party with respect to the ownership of the Site or the operation
of the Project or the actions of the Developer. The Developer shall have no authority to act as an
agent of the Agency or to bind the Agency to any obligation.
6.15 Waiver. Any waiver by the Agency of any obligation in this Agency Regulatory
Agreement must be in writing. No waiver will be implied from any delay or failure by the
Agency to take action on any breach or default of the Developer or to pursue any remedy
allowed under this Agency Regulatory Agreement or applicable law. Any extension of time
granted to the Developer to perform any obligation under this Agency Regulatory Agreement
shall not operate as a waiver or release from any of its obligations under this Agency Regulatory
Agreement. Consent by the Agency to any act or omission by the Developer shall not be
construed to be a consent to any other or subsequent act or omission or to waive the requirement
for the Agency's written consent to future waivers.
6.16 Other Agreements. The Developer represents that it has not entered into any
agreements that would restrict or compromise its ability to comply with the terms of this Agency
Regulatory Agreement. Except for the HUD Capital Advance Documents and any other
documents required by HUD under the HUD Section 202 program, the Developer shall not enter
into any agreements that are inconsistent with the terms of this Agency Regulatory Agreement
without the express approval by the Agency.
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IN WITNESS WHEREOF, the Agency and the Developer have for themselves and their
successors and assigns executed this Agency Regulatory Agreement by duly authorized
representatives in counterpart original copies, all as of the date first written above.
AGENCY
e
Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic
Date: By:
Emil Marzullo, Interim Executive Director
l
Approved as to Form and Legal Content:
By:
Agency Counsel
DEVELOPER
TELACU Housing-San Bernardino IV, Inc.,
a California nonprofit public benefit corporation
Date: By:
By:
[ALL OFFICER/PRINCIPAL SIGNATURES TO BE NOTARIZED]
F
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE SITE
REAL PROPERTY IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA,DESCRIBED AS FOLLOWS:
PARCEL NO. 1: (APN: 1191-282-01)
ALL THAT PORTION OF THE NORTHEAST 1/4 OF SECTION 32, TOWNSHIP 1 NORTH,
RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT
THEREOF, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTH 1/4 CORNER OF SAID SECTION 32; THENCE ALONG
THE WEST LINE OF SAID NORTHEAST 1/4, SOUTH 0° 21' 40", EAST 41.25 FEET TO
THE TRUE POINT OF BEGINNING, SAID POINT BEING ALONG THE SOUTHERLY
LINE OF HIGHLAND AVENUE, 82.50 FEET WIDE; THENCE ALONG THE SOUTHERLY
LINE OF HIGHLAND AVENUE, NORTH 890 40' 05" EAST, 261.52 FEET; THENCE
SOUTH 0° 21 ` 40" EAST 261.52 FEET; THENCE SOUTH 89° 40' 05" WEST 261.52 FEET
TO THE WEST LINE OF SAID SOUTHEAST 1/4; THENCE ALONG THE WEST LINE OF
SAID NORTHEAST 1/4 NORTH 00 21' 40" WEST, 261.52 FEET TO THE TRUE POINT OF
BEGINNING.
PARCEL NO. 2: (APN: 1191-282-02)
ALL THAT PORTION OF THE NORTHEAST 1/4 OF SECTION 32, TOWNSHIP 1 NORTH,
RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGINNING AT THE NORTH 1/4 CORNER OF SAID SECTION 32; THENCE ALONG
THE WEST LINE OF SAID NORTHEAST 1/4, SOUTH 0° 21' 40" EAST 41.25 FEET TO A
PONT ON THE SOUTHERLY LINE OF HIGHLAND AVENUE, 82.50 FEET WIDE;
THENCE ALONG THE SOUTHERLY LINE OF HIGHLAND AVENUE,NORTH 890 40' 05"
EAST 261.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 0° 21' 40"
EAST 261.52 FEET; THENCE 89° 44' 45" WEST 105 FEET FROM THE EAST LINE OF
THE NORTHWEST 1/4 OF THE NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SAID
SECTION 32; THENCE ALONG A LINE PARALLEL TO SAID EAST LINE, NORTH 00 26'
05" WEST 111.52 FEET; THENCE NORTH 89° 40' 05" EAST 21 FEET; THENCE NORTH
0° 26' 05" WEST 150 FEET, MORE OR LESS, TO THE SOUTHERLY LINE OF SAID
HIGHLAND AVENUE; THENCE ALONG THE SOUTHERLY LINE OF HIGHLAND
AVENUE SOUTH 890 40' 05" WEST 316.86 FEET TO THE TRUE POINT OF BEGINNING.
4837-9634-2530.1 15
EXHBIIT "F"
PROMISSORY NOTE
I .
4822-09654786.1
PURCHASE PRICE PROMISSORY NOTE
SECURED BY RECORDED DEED OF TRUST
WITH UCC FILING
Borrower: Lender:
TELACU Housing-San Bernardino IV, Inc. Redevelopment Agency
5400 East Olympic Boulevard, #300 of the City of San Bernardino
Los Angeles, California 90022 Attention: Interim Executive Director
201 North"E" Street, Suite 301
San Bernardino, California 92401
FAX: (909) 888-9413
Principal Amount: Date of Purchase Price Promissory Note:
$1,300,000.00 March , 2008
Interest Rate: 0% for first two (2) years;
during third year, interest only monthly payments
at 3% per annum, for a monthly payment of
$3,250 per month to Maturity or prior payment
in whole.
[Date of Disbursement of Agency Loan]
[3% Fixed on Any Amount Not Paid at Maturity]
Maturity Date of Promissory Note:
The earlier of three (3) years from the Date of Disbursement of Agency Loan, or at the time of
the HUD 202 closing, whichever occurs first, which Date of Disbursement of Agency Loan shall
be the date of deposit of the Principal Amount of One Million Three Hundred Thousand Dollars
($1,300,000.00) ("Agency Loan") by the Agency into the escrow to be established by the
Developer for the purchase of the "Site" as such term is defined in the 2008 HOME Funds Loan
and Grant Agreement (hereafter "Agreement"), which deposit by the Agency shall be made not
more than three (3) business days prior to the anticipated close of escrow for the purchase of the
Site by the Developer.
PROMISE TO PAY. The Undersigned TELACU Housing-San Bernardino IV, Inc., a
California nonprofit public benefit corporation, (the "Borrower"), promise to pay to the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public agency (the
"Lender"), or its order, in lawful money of the United States of America, the principal amount of
One Million Three Hundred Thousand Dollars ($1,300,000.00), or so much as may be
outstanding, together with any accrued unpaid monthly interest and concomitant late charge, if
any, plus interest on the unpaid outstanding principal balance at maturity, pursuant to this
Purchase Price Promissory Note Secured by Recorded Deed of Trust and UCC Filing (this
"Purchase Price Promissory Note") until repayment in whole of the outstanding principal balance
and all accrued and unpaid interest hereunder.
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INDEBTEDNESS. This Purchase Price Promissory Note evidences the indebtedness of the
Borrower to the Lender, and shall supercede, void and cancel any and all prior agreements made
between the Borrower and the Lender with respect to the payment of the principal amount set
forth in this Purchase Price Promissory Note.
PAYMENT. In the event that the Agency Loan is paid in whole within the first two-year
period of time from the date of the Agency Loan, the Agency Loan shall not bear interest.
However, in the event the Agency Loan is not paid in whole within such two-year period, and in
the event that the HUD 202 closing has not occurred by the two year anniversary date from the
date of the Agency Loan, the term of such loan shall be extended for one (1) optional one-year
period During such optional one-year period, the loan will convert to monthly interest only
payments calculated at 3% per annum for a monthly payment of $3,250 per month for the
duration of the one-year optional period or up to the date of the HUD 202 closing, whichever
occurs first. Interest due at maturity shall be calculated on a daily basis on a 365/366 actual
calendar days basis from the three year anniversary date of the Agency Loan or the HUD
Closing Date, whichever occurs first, until paid thereafter in whole or in part as to any partial
principal payment, calculated on the unpaid principal balance of the Agency Loan for any
principal amounts thereof that are not paid on or before the maturity date hereof with interest to
thereupon be calculated on such unpaid amount from the three year anniversary date from the
original date of the Agency Loan or the HUD Closing Date, whichever occurs first. The
Borrower shall make all payments of interest and principal to the Lender at the address of the
Lender: 201 North "E" Street, Suite 301, San Bernardino, California, 92401, or at such other
place as the Lender may designate in writing. Unless otherwise agreed to by the Lender, in
writing or required by applicable law, payments will be applied first to any unpaid collection
costs and any late charges, then to any interest due, and then any remaining amount to principal.
INTEREST RATE. Interest shall accrue on the outstanding principal balance of this Purchase
Price Promissory Note commencing on the two-year anniversary date of the Date of
Disbursement of Agency Loan at the rate of three percent (3%) per annum, payable monthly
starting in the third year at a monthly payment of $3,250 per month until maturity or prior
payment in whole. .
LATE CHARGE. If an installment payment is ten (10) days or more late, the Borrower shall
I also be charged $250.00 as a late charge for each such late payment of an installment.
DEFAULT. The Borrower shall be in default under the terms of this Purchase Price Promissory
Note if any of the following occurs:
(a) The Borrower fails to make any payment when due.
(b) The Borrower defaults on any promise the Borrower has made to the
Lender or if the Borrower otherwise fails to comply with or to perform
when due any other term, obligation, covenant or condition contained in
this Purchase Price Promissory Note or any agreement related to this
Purchase Price Promissory Note.
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(c) The Borrower defaults under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person that may materially affect any of the
Borrower's property or the Borrower's ability to repay this Purchase Price
Promissory Note or the ability of the Borrower to perform its other
obligations under this Promissory Note.
(d) Any representation or statement made or furnished to the Lender by the
Borrower or on the Borrower's behalf that is false or misleading in any
material respect either now or at the time made or furnished.
(e) Either of the parties who have executed this Purchase Price Promissory
Note on behalf of the Borrower dies or becomes insolvent, or if a receiver
is appointed for any part of the Borrower's property, or if the Borrower
makes an assignment for the benefit of creditors, or any proceeding is
commenced either by the Borrower or against the Borrower under any
bankruptcy or insolvency laws.
(f) Any creditor tries to take any of the Borrower's property on or in which
the Lender has a lien or security interest.
(g) A material adverse change occurs in the Borrower's financial condition, or
the Lender believes the prospect of payment or performance of the
indebtedness evidenced by this Purchase Price Promissory Note is
impaired.
If any default is curable and if the Borrower has not been given a notice of a breach of the same
provision of this Purchase Price Promissory Note within the preceding twelve (12) months, it
may be cured (and in such event no default will be deemed to have occurred) if the Borrower,
after receiving written notice from the Lender demanding cure of such default:
(i) cures the default within fifteen(15) days; or
(ii) if the cure requires more than fifteen (15) days, immediately initiates steps
which the Lender deems in its sole discretion to be sufficient to cure the
default, and thereafter Borrower continues and cures such default within
the time expressly authorized in writing by Lender.
RIGHTS/REMEDIES OF THE LENDER/HOLDER. Upon default, the Lender or its assign
(a"Holder"), as the case may then be, may exercise any of the Lender's rights, including without
limitation, the declaration by the Lender/Holder that the entire unpaid principal balance on this
Purchase Price Promissory Note and all accrued unpaid interest is immediately due, without
notice, and then the Borrower shall pay that amount. The Lender/Holder may hire or pay
someone else to help collect this Purchase Price Promissory Note if the Borrower does not pay.
The Borrower also will pay the Lender/Holder that amount for hiring or payment to enforce such
collection, including without limitation, subject to any limits under applicable law, any and all of
the attorneys' fees and the legal expenses incurred by the Lender/Holder whether or not there is a
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lawsuit, including efforts to modify or vacate any automatic stay or injunction, appeals, and any
anticipated post judgment collection services incurred by the Lender/Holder, in addition to such
other relief as may be granted in an action or proceeding, whether at trial or on appeal, to be paid
by Borrower to Lender/Holder for all out-of-pocket costs and expenses incurred as a result
thereof. The Borrower also shall pay any and all court costs, in addition to all other sums due the
Lender/Holder provided by law. This Purchase Price Promissory Note has been delivered to the
Lender/Holder and accepted by the Lender/Holder in the State of California. If there is a lawsuit
arising under this Purchase Price Promissory Note, the Superior Court of the State of California
in and for the County of San Bernardino shall have jurisdiction of such lawsuit. This Purchase
Price Promissory Note shall be governed by and construed in accordance with the laws of the
State of California.
Notwithstanding any other provision contained in this Note, it is agreed that the execution of this
Note is not intended to impose personal liability on any corporate officer or agent of the
Borrower for payment of the indebtedness evidenced hereby. In the event of a default, and
provided that the Borrower or any corporate officer or agent thereof is not complicit in any act,
whether authorized or ultra vires, of commission or omission, that caused, directly or indirectly,
the occurrence of the default, the Lender under this Note shall look solely to the property
described in the Deed of Trust in satisfaction of the indebtedness evidenced hereby, and will not
seek or obtain any deficiency or personal judgment against any corporate officer or agent of the
Borrower, except such judgment or decree as may be necessary to foreclose and bar its interest in
the Property and all other mortgaged, pledged, conveyed or assigned to secure payment of this
Note, and except as set out in the Deed of Trust given to secure this indebtedness.
COLLATERAL. The Borrower acknowledges this Purchase Price Promissory Note is secured
by a Deed of Trust of even date herewith. The Deed of Trust affects Assessor's Parcel Numbers
1191-282-01 and 1191-282-02 (collectively, the "Property"). The Deed of Trust contains the
following due on sale provision:
"The Trustee (or the Beneficiary) may, at its option, declare
immediately due and payable all sums secured by this Deed of
Trust upon the sale, transfer or further encumbrance without the
prior written consent of the Trustee (or the Beneficiary), of all or
any part of the Real Property, or any interest in the Real Property.
A "sale, transfer or encumbrance" means the conveyance of the
Real Property or any right, title or interest therein; whether legal,
beneficial, or equitable; whether voluntary or involuntary; whether
by outright sale, deed, the creation of a new installment sale
contract, land contract, contract for deed, leasehold interest in the
Property with a term greater than one (1) year, lease-option
contract, or by sale, assignment, or transfer of any beneficial
interest in or to any land trust holding title to the Property, or by
any other method of conveyance of property interest."
I
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GENERAL PROVISIONS. The Lender/Holder may delay or forego enforcing any of its rights
t or remedies under this Purchase Price Promissory Note without losing them. The Borrower and
any other person who signs, guarantees or endorses this Purchase Price Promissory Note, to the
extent allowed by law, waive any applicable statute of limitations, presentment, demand for
payment, offsets, claims, protest and notice of dishonor. Upon any change in the terms of this
Purchase Price Promissory Note, and unless otherwise expressly stated in writing, no party who
signs this Purchase Price Promissory Note, whether as maker, guarantor, accommodation maker
or endorser, shall be released from liability. All such parties agree that the Lender/Holder may
renew or extend (repeatedly and for any length of time) this Purchase Price Promissory Note, or
release any party, or guarantor or collateral, and take any other action deemed necessary by the
Lender/Holder in its sole discretion without the consent of or notice to anyone. All such parties
also agree that the Lender/Holder may modify this Purchase Price Promissory Note without the
consent of or notice to anyone other than the party with whom the modification is made.
The terms contained herein shall be given the same definitions and meanings as those contained
in the Agreement; in the event of a conflict between this Purchase Price Promissory Note and the
Agreement, such conflict shall be submitted to and resolved by HUD.
This note is non-negotiable and may not be sold, transferred, assigned or pledged by the Lender
except with the prior written approval of the Secretary of HUD (the "Secretary"). During the
term of the HUD Capital Advance Documents, if HUD should at any time require this Purchase
Price Promissory Note to be replaced with a HUD approved form Note, the parties shall within
30 days of HUD's request, replace this Purchase Price Promissory Note with such Note approved
by HUD, and Lender shall immediately thereafter cancel this Purchase Price Promissory Note.
During the term of the HUD Capital Advance Documents, and/or during the term of any
regulatory agreement between the Secretary and the Borrower, Beneficiary shall not declare a
breach or default under this Purchase Price Promissory Note without the Secretary's prior written
approval.
PRIOR TO SIGNING THIS PURCHASE PRICE PROMISSORY NOTE, THE BORROWER
HAS READ AND UNDERSTANDS ALL OF ITS PROVISIONS. THE BORROWER
AGREES TO THE TERMS OF THIS PURCHASE PRICE PROMISSORY NOTE AND
ACKNOWLEDGES RECEIPT OF A COPY HEREOF.
BORROWER
TELACU Housing-San Bernardino IV, Inc.,
a California nonprofit public benefit corporation
Date: By:
Title:
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EXHIBIT "G"
DEED OF TRUST
4822-0965-4786.1
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Redevelopment Agency
of the City of San Bernardino
Attn.: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, CA 92401
(Space Above Line for Recorder's Use Only)
Recording Fee Exempt Pursuant to Government Code Section 6103
DEED OF TRUST WITH UCC FILING
(Redevelopment Agency of the City of San Bernardino)
THIS DEED OF TRUST WITH UCC FILING ("Deed of Trust"), dated ,
2008, is made by TELACU Housing-San Bernardino IV, Inc., a California nonprofit public
benefit corporation, whose address is 5400 East Olympic Boulevard, Suite 300, Los Angeles,
California 90022 (the "Trustor"), in favor of Orange Coast Title Insurance Company (the
"Trustee"), whose address is 1955 Hunts Lane, 2"d Floor, San Bernardino, California 92408, for
the benefit of the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a
public body, corporate and politic whose address is 201 North "E" Street, Suite 301, San
Bernardino, California 92401 ("Beneficiary"). This Deed of Trust is executed to secure the
payment of a note of even date herewith in the principal amount of One Million Three Hundred
Thousand Dollars ($1,300,000.00), and all accrued interest thereon.
1. General.
1.1. Real Property. The "Real Property" includes:
(a) the land described in Exhibit "A" attached to this Deed of Trust
and incorporated in this Deed of Trust by this reference (the "Land"); and
(b) all buildings, structures and other improvements now or in the
future located or to be constructed on the Land (collectively, the "Improvements"); and
(c) all tenements, hereditaments, appurtenances, privileges and other
rights and interests now or in the future benefiting or otherwise relating to the Land or the
Improvements, including, but riot limited to, easements, rights-of-way, development rights
(including any mineral rights, water rights and water stock that Trustor may have of whatever
kind or character, surface or underground) (collectively, the "Appurtenances"); provided,
however, if any such Appurtenances benefit both the Real Property and other real property
owned by Trustor that is not encumbered by this Deed of Trust (e.g., utility or access easements
mutually benefiting both properties), Trustor reserves the right to use such Appurtenances for the
benefit of such other appurtenant property that Trustor owns and that is not encumbered by this
Deed of Trust.
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1.2. Rights. The "Rights" include:
(a) subject to the assignment to Beneficiary as set forth in Section 4
below, all moneys, issues, income, revenues, royalties and profits now or in the future payable
with respect to or otherwise derived from the Real Property or the ownership, use, management,
operation, leasing or occupancy of the Real Property, including, without limitation, any such
moneys, issues, income, revenues, royalties and profits which are past due and/or unpaid
(collectively, the "Moneys");
(b) the Appurtenances;
(c) all present and future right, title and interest of Trustor in and to all
accounts, general intangibles, chattel paper, deposit accounts, money, instruments and
documents (as those terms are defined in the California Uniform Commercial Code, hereinafter
the "UCC"), and all other agreements, obligations, rights and written materials, now or in the
future, relating to or otherwise arising in connection with or derived from the Real Property or
the ownership, use, development, construction, maintenance, management, operation, marketing,
leasing, occupancy, sale or financing of the Real Property, including the following (collectively,
the "Intangibles"):
(i) permits, approvals and other governmental authorizations;
(ii) improvement plans and specifications and architectural drawings;
(iii) agreements with contractors, subcontractors, suppliers, project
managers and supervisors, designers, architects, engineers, sales
agents, leasing agents, consultants and property managers;
(iv) takeout, refinancing and permanent loan commitments;
(v) warranties, guaranties, indemnities and insurance policies, together
with insurance payments and unearned insurance premiums;
(vi) claims, demands, awards, settlements and other payments arising
or resulting from or otherwise relating to any insurance or any loss
or destruction of, injury or damage to, whether or not required,
trespass on or taking, condemnation (or conveyance in lieu of
condemnation) or public use of any of the Real Property;
(vii) leases, subleases, rental agreements, license agreements, service
and maintenance agreements, purchase and sale agreements and
purchase options, whether written or verbal, now or in later effect,
together with advance payments, security deposits and other
amounts paid to or deposited with Trustor under any such
agreements;
(viii) reserves, deposits, bonds, deferred payments, refunds, rebates,
discounts, cost savings, escrow proceeds, sale proceeds and other
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rights to the payment of money, trade names, trademarks, goodwill
and all other types of intangible personal property of any kind or
nature; and
(ix) all supplements, modifications, amendments, renewals, extensions,
proceeds, replacements and substitutions of or to any of such
property.
1.3. Personal Property. The "Personal Property" includes (a) the Intangibles,
and (b) and all present and future right, title and interest of Trustor in and to all inventory,
equipment, fixtures and other goods (as those terms are defined in the UCC), now or in the future
located at, upon or about, or affixed or attached to or installed in, the Real Property or used or to
be used in connection with or otherwise relating to the Real Property or the ownership, use,
development, construction, maintenance, management, operation, marketing, leasing or
occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building
materials and supplies, generators, boilers, furnaces, water tanks, heating, ventilating and air
conditioning equipment, and all other types of tangible personal property of any kind or nature,
and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and
substitutions of or to any of such property (collectively, the "Goods"); provided that "Personal
Property" shall not include construction equipment and other personal property used during
construction of improvements on the Real Property that are intended to be removed from the
Real Property upon completion of construction.
2. Grant of Security Interest. Trustor further grants to Beneficiary, pursuant to the
UCC, a security interest in all present and future right, title and interest of Trustor in and to all
Personal Property in which a security interest may be created under the UCC.
3. Fixture Filing. This Deed of Trust covers certain Goods which are or are to
become fixtures related to the Real Property and constitutes a "fixture filing" with respect to
such Goods executed by Trustor (as "debtor") in favor of Beneficiary (as a"secured party").
4. Assignment of Moneys. Trustor irrevocably grants, transfers and assigns to
Beneficiary, during the continuance of this Deed of Trust, six and four/tenths percent (6.4%) of
all of Trustor's right, title and interest in and to moneys ("Moneys") payable to the Trustor from
the Trustor's project consisting of the redevelopment, improvement and use of approximately
107,157 square feet, more or less, generally situated on the southeast corner of Highland and
Central Avenues within the City of San Bernardino, CA, and referred to as Assessor's Parcel
Number(s) 1191-282-01 and 1191-282-02, consisting of the construction of eighty-nine (89) one
(1) bedroom units designated as Affordable housing for Senior Citizens of Very Low income, as
defined by federal law and regulations, and one (1) two (2) bedroom manager's unit (the
"Project"). Notwithstanding such assignment, so long as no Event of Default has occurred,
Trustor shall have the right to collect, receive, hold and dispose of the Moneys as the same
become due and payable, provided that unless Beneficiary otherwise consents in writing: (a) any
such Moneys paid more than thirty (30) days in advance of the date when due shall be delivered
to Beneficiary and held by Beneficiary, to be released and applied on the date when due (or, if an
Event of Default has occurred, at such other time or times and in such manner as Beneficiary
may determine), and (b) if an Event of Default has occurred, Trustor's right to collect and
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receive the Moneys shall cease and Beneficiary shall have the sole right, with or without taking
possession of the Real Property, to collect all Moneys, including those past due and unpaid. Any
such collection of Moneys by Beneficiary shall not cure or waive any Event of Default or notice
of default, or invalidate any act done pursuant to such notice. Failure or discontinuance of
Beneficiary at any time or from time to time, to collect the Moneys shall not in any manner
affect the subsequent enforcement by Beneficiary of the right to collect the same. Nothing
contained in this Deed of Trust, nor the exercise of the right by Beneficiary to collect the
Moneys, shall be deemed to make Beneficiary a "mortgagee in possession" or shall be or be
construed to be, an affirmation by Beneficiary of or an assumption of liability by Beneficiary
under or a subordination of the lien of this Deed of Trust to any tenancy, lease or option. During
an Event of Default, any and all Moneys collected or received by Trustor shall be accepted and
held for Beneficiary in trust and shall not be commingled with Trustor's funds and property, but
shall be promptly paid over to Beneficiary.
5. Oblimations Secured. This Deed of Trust is given for the purpose of securing
payment and performance of each and every agreement and obligation of Trustor under the
Promissory Note, with a principal amount of One Million Three Hundred Thousand Dollars
($1,300,000.00) (the "Note", the terms of which are incorporated herein by this reference), or
contained herein or hereafter to be loaned to Trustor, or its successors or assigns, when
evidenced in writing that they are secured by this Deed of Trust (the "Secured Obligation").
6. Trustor's Covenants. TO MAINTAIN AND PROTECT THE SECURITY OF
THIS DEED OF TRUST, TO SECURE FULL AND TIMELY PERFORMANCE BY
TRUSTOR OF EACH AND EVERY OBLIGATION, COVENANT AND AGREEMENT OF
TRUSTOR UNDER THE NOTE, AND AS ADDITIONAL CONSIDERATION FOR THE
INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THE NOTE, TRUSTOR HEREBY
COVENANTS, REPRESENTS AND AGREES AS FOLLOWS:
6.1. Pavment and Performance of Secured Oblilzations. Trustor shall pay
and perform all Secured Obligation in accordance with the respective terms of the Note.
6.2. Maintenance of Trust Estate. Unless Beneficiary otherwise consents in
writing, Trustor shall, at its sole cost and expense:
(a) keep the Real Property and Goods in good condition and repair,
and promptly and in a good and workmanlike manner (and with new materials of good quality),
complete any Improvements to be constructed on the Land, repair or restore any part of the Real
Property that may be injured, damaged or destroyed, and repair, restore or replace (at equal or
greater value) any Goods that may be injured, damaged, destroyed or lost, or that may be or
become obsolete, defective or worn out (except that Trustor shall not be required to repair,
restore or replace any such Goods of insignificant value which are not reasonably necessary or
appropriate to the efficient operation of the Trust Estate), and in each case pay when due all valid
claims for labor, service, equipment and material and any other costs incurred in connection with
any such action, and not permit any mechanic's lien to arise against the Real Property or Goods,
or adequately furnish a loss or liability bond against such lien claim;
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(b) except as otherwise consented to by Beneficiary in writing, not
remove, demolish or materially alter any Improvements;
(c) not construct any Improvements on the Land or undertake any site
development work unless approved by any applicable governmental agencies;
(d) not commit or permit any waste of any part of the Real Property;
(e) not permit or consent to any restriction that would prevent or
otherwise impair the use or development of the Real Property;
(f) comply in all material respects with all applicable laws and other
governmental requirements, present or future, and not commit or permit any material violation of
any applicable laws or other governmental requirements, which affect any part of the Trust
Estate or require any alterations or improvements to be made to any part of the Real Property;
(g) take such action from time to time as may be reasonably necessary
or appropriate, or as Beneficiary may reasonably require, to protect the physical security of the
Real Property and Goods;
(h) except as otherwise consented to by Beneficiary in writing, not
part with possession of or abandon any part of the Trust Estate or Goods or cause or permit any
interest in any part of the Trust Estate to be sold, transferred, leased, encumbered, released,
relinquished, terminated or otherwise disposed of(whether voluntarily, by operation of law or
otherwise), other than to an affiliate of Trustor (which such affiliate shall mean an entity owned
by Trustor or its principals and Trustor or its principals shall be responsible for the day-to-day
management of its activities);
(i) take all other action which may be reasonably necessary or
appropriate to preserve, maintain and protect the Trust Estate and Goods, including the
enforcement or performance of any rights or obligations of Trustor or any conditions with
respect to any Rights;
0) provide to Beneficiary, within five (5) days following receipt of
Beneficiary's request, copies of all lease and sale agreements of any kind encumbering the Real
Property or Goods, certified by Trustor to be true and correct copies of valid agreements, as well
as any other documentation reasonably requested by Beneficiary; and
(k) notify Beneficiary in writing if any condition at or on the Real
Property may have a significant and measurable effect on its market value.
6.3. Insurance, Condemnation and Damage Claims. Trustor shall maintain
"all risks" and general public liability insurance on the Real Property to the extent and in the
form required by Beneficiary. All proceeds of any claim, demand, award, settlement or other
payment arising or resulting from or otherwise relating to any such insurance or any loss or
destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu
of condemnation) or public use of any of the Real Property (a"Damage Claim")are assigned and
shall be payable and delivered to Beneficiary (any such proceeds of any Damage Claim being
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referred to in this Deed of Trust as "Damage Proceeds"). Trustor shall take all action reasonably
necessary or required by Beneficiary in order to protect Trustor's and Beneficiary's rights and
interests with respect to any Damage Claim, including the commencement of, appearance in and
prosecution of any appropriate action or other proceeding, and Beneficiary may in its discretion
participate in any such action or proceeding at the expense of Trustor.,
So long as no Event of Default has occurred, Trustor may settle, compromise or
adjust any Damage Claim. Upon the occurrence of any Event of Default, Beneficiary shall have
the sole right to settle, compromise or adjust any Damage Claim in such manner as Beneficiary .
may determine, and for this purpose Beneficiary may, in its own name or in the name of Trustor,
take such action as Beneficiary deems appropriate to realize on any such Damage Claim. In
either case, all Damage Proceeds payable in connection with any such Damage Claim shall be
delivered directly to Beneficiary as provided in the preceding paragraph.
Any Damage Proceeds received by Beneficiary may be applied by Beneficiary in
payment of the Secured Obligations in such order and manner as Beneficiary may determine,
provided that so long as no Event of Default has occurred, Beneficiary shall release such
Damage Proceeds to Trustor for the repair and restoration of the Real Property, except that
Beneficiary shall not be required to release such Damage Proceeds (and may apply such Damage
Proceeds to the Secured Obligation as set forth above) to the extent that such Damage Proceeds
relate to any condemnation, seizure or other appropriation by any governmental agency of all or
any portion of the Real Property(including Damage Proceeds payable in lieu of any such action),
or if Beneficiary has reasonably determined that the security of this Deed of Trust has been
impaired, or will be impaired upon release of Damage Proceeds to Trustor.
6.4. Liens and Taxes. Trustor shall pay, prior to delinquency, all taxes,
charges, fees, costs and expenses which are or may become a lien affecting any part of the Trust
Estate (including assessments on appurtenant water stock), and Trustor shall pay and perform
when due all other obligations secured by or constituting a lien affecting any part of the Trust
Estate. If Trustor is in default under this Deed of Trust or the Note, regardless of whether the
Default has been cured, then Beneficiary or Trustee may at any subsequent time, at its option to
be exercised on thirty (30) days written notice to Trustor, require Trustor to deposit with
Beneficiary or its designee, at the time of each payment of an installment of interest or principal
under the Note, an additional amount sufficient to discharge the obligations of Trustor under this
Section 6. The calculation of the amount payable and of the fractional part of it to be deposited
with Beneficiary shall be made by Beneficiary in its sole and absolute discretion. If the amounts
deposited are in excess of the actual obligations for which they were deposited, Beneficiary may
refund any such excess, or at its sole option, may hold the excess in a reserve account, not in
trust and not bearing interest, and reduce proportionately the required deposits for the ensuing
year.
6.5. Claims. Trustor shall appear in and defend any claim or any action or
other proceeding purporting to affect title or other interests relating to any part of the Trust
Estate, the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee, and
give Beneficiary prompt written notice of any such claim, action or proceeding. Beneficiary and
Trustee may, at the expense of Trustor, appear in and defend any such claim, action or
proceeding and any claim, action or other proceeding asserted or brought against Beneficiary
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(and Beneficiary's general partners, agents, employees, partners, unitholders, shareholders,
` affiliates, officers and directors, each a "Beneficiary Indemnitee"), or Trustee in connection with
or relating to any part of the Trust Estate or this Deed of Trust.
6.6 Leases of Real Property. At Beneficiary's request, Trustor shall furnish
Beneficiary with executed copies of all leases of the Real Property or any portion of it.
6.7 Uniform Commercial Code Security Agreement. This Deed of Trust is
intended to be and shall constitute a security agreement under the California UCC for any of the
Personal Property noted herein, that, under law may be subject to a security interest under the
UCC, and Trustor grants to Beneficiary a security interest in those items. Trustor authorizes
Beneficiary to file financing statements in all states, counties and other jurisdictions as
Beneficiary may elect, without Trustor's signature if permitted by law. Trustor agrees that
Beneficiary may file this Deed of Trust, or a copy of it, in the real estate records or in the Office
of the Secretary of State of the State of California, and such other states Beneficiary may elect,
as a financing statement for any of the items specified above.
7. Default
7.1. Events of Default. For all purposes in this Deed of Trust, the term "Event
of Default" or"default" shall mean:
(a) The Trustor fails to make any payment when due.
(b) The Trustor defaults on any promise the Trustor has made to the Trustee
or Beneficiary or if the Trustor otherwise fails to comply with or to
perform ,when due any other term, obligation, covenant or condition
contained in this Deed of Trust or any agreement related to this Deed of
Trust.
(c) The Trustor defaults under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person that may materially affect any of the
Trustor's property or the Trustor's ability to repay the Note or the ability
of the Trustor to perform its other obligations under this Deed of Trust.
(d) Any representation or statement made or furnished to the Trustee or the
Beneficiary by the Trustor or on the Trustor's behalf is false or misleading
in any material respect either now or at the time made or furnished.
(e) If the Trustor becomes insolvent, or if a receiver is appointed for any part
of the Trustor's property, or if the Trustor makes an assignment for the
benefit of creditors, or any proceeding is commenced either by the Trustor
or against the Trustor under any bankruptcy or insolvency laws.
(f) Any creditor tries to take any of the Trustor's property on or in which the
Trustee or the Beneficiary has a lien or security interest.
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(g) A material adverse change occurs in the Trustor's financial condition, or
the Trustee or Beneficiary believes the prospect of payment or
performance of the indebtedness evidenced by this Deed of Trust is
impaired.
(h) The failure for any reason of this Deed of Trust to remain at all times a
valid first lien upon the Trust Estate, unless the Trustee or the Beneficiary
consents in writing to the subordination of this Deed of Trust;
(i) The sale, transfer, assignment, conveyance, mortgage or hypothecation of
all or any portion or interest in the Trust Estate without obtaining the prior
written consent of Beneficiary, other than to an affiliate of Trustor, which
such affiliate shall mean an entity owned by Trustor or its principals and
Trustor or its principals shall be responsible for the day-to-day
management of its activities.
(j) Notwithstanding Sections 7.1(b) through (i) above, Trustor shall not be in
default unless Trustor fails to cure a breach within fifteen (15) business
days after receipt of written notice from Trustee or Beneficiary of such
breach, and if any other provision of this Deed of Trust or any provision of
the Secured Obligation shall provide for a greater period of time within
which to cure any event or condition, then an Event of Default shall not be
deemed to have occurred unless Trustor shall fail to cure such event or
condition within such specified greater period of time.
7.2. Remedies. Upon the occurrence of any Event of Default Trustor shall
then be in default under this Deed of Trust, and upon acceleration of the maturity of the Secured
Obligation, the Secured Obligation shall immediately become due and payable without further
notice to Trustor, and Beneficiary may, without notice to or demand upon Trustor, which notice
and/or demand are expressly waived by Trustor (except for notices or demands otherwise
required by applicable laws to the extent not effectively waived by Trustor and any notices or
demands specified below), and without releasing Trustor from any of its obligations, either
directly or through an agent or court-appointed receiver, and without regard to the adequacy of
any security for the Secured Obligation, exercise any one or more of the following remedies, as
Beneficiary may determine in its sole and absolute discretion:
(a) enter, take possession of, manage, operate, protect, preserve and
maintain and exercise any other rights of an owner of the Trust Estate, and use any other
properties or facilities of Trustor relating to the Trust Estate, all without payment of rent or other
compensation to Trustor;
(b) enter into such contracts and take such other action as Beneficiary
deems appropriate to complete all or any part of the Trust Estate including but not limited to any
construction of Improvements on the Land, subject to such modifications and other changes in
any plan of development as Beneficiary may deem appropriate in its sole and absolute discretion;
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(c) make, cancel, enforce or modify sale or lease agreements, sale
prices, lease rates or marketing plans and, in its own name or in the name of Trustor, otherwise
conduct any business of Trustor in relation to the Trust Estate and deal with Trustor's creditors,
debtors, tenants, prospective tenants, agents and employees and any other persons having any
relationship with Trustor in relation to the Trust Estate, and amend any contracts between them,
in any manner Beneficiary may determine with Trustor executing a power of attorney or similar
document required in order for Beneficiary to exercise such rights;
(d) either with or without taking possession of the Trust Estate, notify
obligors on any rights that all payments and other performance are to be made and rendered
directly and exclusively to Beneficiary, and in its own name supplement, modify, amend, renew,
extend, accelerate, accept partial payments or performance on, make allowances and adjustments
and issue credits with respect to, give approvals, waivers and consents under, release, settle,
compromise, compound, sue for, collect or otherwise liquidate, enforce or deal with any rights,
including collection of amounts past due and unpaid, except that Trustor agrees not to take any
such action after the occurrence of an Event of Default without prior written authorization from
Beneficiary;
(e) endorse, in the name of Trustor, all checks, drafts and other
evidences of payment relating to the Trust Estate, and receive, open and dispose of all mail
addressed to Trustor and notify the postal authorities to change the address for delivery of such
mail to such address as Beneficiary may designate, with Trustor executing a power of attorney or
similar document required in order for Beneficiary to exercise such rights;
(f) take any such other action as Beneficiary deems appropriate to
protect the security of this Deed of Trust; and
(g) Notwithstanding Sections 7.2(a) through (g), neither Beneficiary
nor Trustee shall be under any obligation to preserve, maintain or protect the Trust Estate or any
of Trustor's rights or interests in the Trust Estate, or make or give any presentments, demands for
performance, protests, notices of nonperformance, protest or dishonor or other notices of any
kind in connection with any rights, or take any other action with respect to any other matters
relating to the Trust Estate. Beneficiary and Trustee do not assume and shall have no liability
for, and shall not be obligated to perform, any of Trustor's obligations with respect to any rights
or any other matters relating to the Trust Estate, and nothing contained in this Deed of Trust shall
release Trustor from any such obligations.
7.3. Foreclosure Remedy. Beneficiary, in its sole and absolute discretion,
may execute and deliver to Trustee written declaration of default and demand for sale and
written notice of default and of election to cause all or any part of the Trust Estate to be sold,
which notice Trustee shall cause to be filed for record; and after the lapse of such time as may
then be required by law following the recordation of such notice of default, and notice of sale
having been given as then required by law, Trustee, without demand on Trustor, shall sell such
Trust Estate property at the time and place fixed by Trustee in such notice of sale, either as a
whole or in separate parcels and in such order as Beneficiary may direct (Trustor waiving any
right to direct the order of sale), at public auction to the highest bidder for cash in lawful money
of the United States (or cash equivalents acceptable to Trustee to the extent permitted by
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applicable law), payable at the time of sale. Trustee may postpone the sale of all or any part of
the Trust Estate by public announcement at such time and place of sale, and from time to time
after any such postponement may postpone such sale by public announcement at the time fixed
by the preceding postponement. Trustee shall deliver to the purchaser at such sale its deed
conveying the property so sold, but without any covenant or warranty, express or implied, and
the recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness
thereof. Any such sale shall be free and clear of any interest of Trustor and any purchase
agreement, encumbrance or other matter affecting the property sold which is subject or
subordinate to this Deed of Trust, unless Beneficiary consents to otherwise in writing. Any
person, including Trustee or Beneficiary, may purchase all or any part of the Trust Estate at such
sale. Any bid by Beneficiary may be, in whole or in part, in the form of cancellation of all or any
part of the Secured Obligation (the "Credit Bid").
7.4. Secured Creditor Remedy. With respect to any Personal Property,
Beneficiary shall have in any jurisdiction where enforcement of this Deed of Trust is sought, all
remedies of a secured party under the UCC and may require Trustor, on demand, to assemble all
Personal Property and make it available to Beneficiary at places that Beneficiary may select that
are reasonably convenient for both parties.
7.5. Other Remedies. Beneficiary may proceed to protect, exercise and
enforce any and all other Remedies provided under the Secured Obligation or by applicable laws.
Each of the remedies provided in this Deed of Trust is cumulative and not exclusive of, and shall
not prejudice, any other remedy provided in this Deed of Trust, the Secured Obligation or
pursuant to all applicable laws. Each remedy may be exercised from time to time as often as
deemed necessary by Trustee and Beneficiary, and in such order and manner as Beneficiary may
determine. This Deed of Trust is independent of any other security for the Secured Obligation,
and upon the occurrence of an Event of Default, Trustee or Beneficiary may proceed in the
enforcement of this Deed of Trust independently of any other remedy that Trustee or Beneficiary
may at any time hold with respect to the Trust Estate or the Secured Obligations or any other
security. Trustor, for itself and for any other person claiming by or through Trustor, waives, to
the fullest extent permitted by applicable laws, all rights to require a marshalling of assets by
Trustee or Beneficiary or to require Trustee or Beneficiary to first resort to any particular portion
of the Trust Estate or any other security (whether such portion shall have been retained or
conveyed by Trustor) before resorting to any other portion, and all rights of redemption, stay and
appraisal.
7.6. Application of Sums. Unless otherwise specified in this Deed of Trust or
the Secured Obligation, all sums received by Beneficiary under this Deed of Trust, shall be
applied to: (i) all costs and expenses incurred by Beneficiary, Trustee or any receiver under this
Deed of Trust, including without limitation, attorneys fees; and (ii) the remainder, in payment of
the Secured Obligation in such order and manner as Beneficiary shall determine in its sole
discretion; provided, however, that Beneficiary shall have no liability for funds not actually
received by Beneficiary.
7.7. Costs, Fees and Expenses. Trustor shall pay on demand all costs, fees,
expenses, advances, charges, losses and liabilities of Trustee and Beneficiary under or in
connection with this Deed of Trust or the enforcement of, or the exercise of any remedy or any
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other action taken by Trustee or Beneficiary under, this Deed of Trust or the collection of the
Secured Obligations, in each case including but not limited to: (a) reconveyance and foreclosure
fees of Trustee; (b) costs and expenses of Beneficiary or Trustee or any receiver appointed under
this Deed of Trust in connection with the operation, maintenance, management, protection,
preservation, collection, sale or other liquidation of the Trust Estate or foreclosure of this Deed
of Trust; (c) advances made by Beneficiary to complete or partially construct all or any part of
the Improvements or any other construction on the Land or otherwise to protect the security of
this Deed of Trust; (d) cost of evidence of title; and (e) the reasonable fees and expenses of
Trustee's and Beneficiary's legal counsel and other out-of-pocket expenses, and the reasonable
charges of Beneficiary's internal legal counsel incurred as a result of an Event of Default;
together with interest on all such amounts until paid (i) at the Default Rate (as defined in the
Note) in the case of any such interest payable to Beneficiary and (ii) at the rate provided by law
in the case of any such interest payable to Trustee.
7.8. Late Payments. By accepting payment of any part of the Secured
Obligation after its due date, Beneficiary does not waive its right either to require prompt
payment when due of all other portions of the Secured Obligation or to declare a default for
failure to so pay.
7.9. Action by Trustee. At any time and from time to time upon written
request of Beneficiary and presentation of this Deed of Trust for endorsement, and without
affecting the personal liability of any person for payment of the Secured Obligation or the
security of this Deed of Trust for the full amount of the Secured Obligations on all property
remaining subject to this Deed of Trust, Trustee may, without notice and without liability for
such action, and notwithstanding the absence of any payment on the Secured Obligations or any
other consideration: (a) reconvey all or any part of the Trust Estate; (b) consent to the making
and recording, or either, of any map or plat of the Land; (c) join in granting any easement
affecting the Land; or (d) join in or consent to any extension agreement or any agreement
subordinating the lien of this Deed of Trust. Trustee is not obligated to notify Trustor or
Beneficiary of any pending sale under any other deed of trust or of any action or other
proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee.
8. Reconveyance. Upon Beneficiary's written request and surrender of this Deed of
Trust and the Notes to Trustee for cancellation or endorsement, Trustee shall reconvey, without
warranty, all or any part of the Trust Estate then subject to this Deed of Trust that Beneficiary so
instructs. Any reconveyance, whether full or partial, may be made in terms to "the person or
persons legally entitled thereto," and the recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. Beneficiary shall not be required to cause
any Trust Estate to be released from this Deed of Trust until final payment and performance in
full of the Secured Obligation and termination of all obligations of Beneficiary under or in
connection with the Note.
9. Hazardous Materials.
9.1. Definitions. For the purposes of this Deed of Trust: (a) "Hazardous
Materials" shall mean oil and other petroleum products, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, hazardous waste, toxic or contaminated
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substances or similar materials, including, without limitation, any substances which are
"hazardous substances", "hazardous waste", "hazardous materials", or "toxic substances" under
applicable environmental laws, ordinances or regulations; (b) "Hazardous Materials Laws" shall
mean all statutes, ordinances, rules and regulations relating to Hazardous Materials, including,
without limitation, those relating to soil and groundwater conditions; and (c) "Hazardous
Materials Claims" shall mean claims or actions pending or threatened against Trustor or the Real
Property by any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to Hazardous Materials Laws.
9.2. Trustor's Obligations. Except in the ordinary course of Trustor's
business, Trustor shall not cause or permit the Real Property to be used as a site for the use,
generation, manufacture, storage, treatment, release, discharge, disposal, transportation or
presence of any Hazardous Materials. Trustor shall comply and cause the Real Property to
comply with all Hazardous Materials Laws. Trustor shall immediately notify Beneficiary in
writing of. (i) the discovery of any Hazardous Materials on, under or about the Real Property; (ii)
any knowledge by Trustor that the Real Property does not comply with any Hazardous Materials
Laws or (iii) any Hazardous Materials Claim. After such notice, Beneficiary shall have the right
to inspect the Real Property. Beneficiary may request and Trustor shall provide at its sole costs
and expense, within sixty (60) days, a report from a qualified engineering company or other
qualified consultant acceptable to Beneficiary, with respect to an investigation and audit of the
Real Property satisfactory to Beneficiary. Additionally, in response to the presence of any
Hazardous Materials on, under or about the Real Property, Trustor shall immediately take, at
Trustor's sole cost, all remedial action required by any Hazardous Materials Laws or any
judgment, consent, decree, settlement or compromise in respect of any Hazardous Materials
Claims.
10. Miscellaneous.
10.1. Deed of Trust Is Due on Sale. The Trustee (or the Beneficiary) may, at
its option, declare immediately due and payable all sums secured by this Deed of Trust upon the
sale, transfer or further encumbrance without the prior written consent of the Trustee (or the
Beneficiary), of all or any part of the Real Property, or any interest in the Real Property. A"sale,
transfer or encumbrance" means the conveyance of the Real Property or any right, title or interest
therein; whether legal, beneficial, or equitable; whether voluntary or involuntary; whether by
outright sale, deed, the creation of a new installment sale contract, land contract, contract for
deed, leasehold interest in the Property with a term greater than one (1). year, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust
holding title to the Property, or by any other method of conveyance of property interest.
Notwithstanding the foregoing, during the term of the HUD Capital Advance Documents, the
Property may be transferred to HUD or a HUD approved transferee without the prior approval of
Beneficiary or Trustee without causing an acceleration hereof.
10.2. Successors and Assigns. This Deed of Trust applies to and shall be
binding on and inure to the benefit of all parties to this Deed of "Trust and their respective
successors and assigns.
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10.3. Acceptance. Notice of acceptance of this Deed of Trust by Beneficiary or
Trustee is waived by Trustor. Trustee accepts this Deed of Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law.
10.4. Beneficiary's Statements. For any statement regarding the Secured
Obligations, Beneficiary may charge the maximum amount permitted by law at the time of the
request for such statement.
10.5. Governing Law. This Deed of Trust shall be governed by and construed
and enforced in accordance with,the laws of the State of California.
10.6. Request for Notice. Trustor requests that a copy of any notice of default
and a copy of any notice of sale be mailed to Trustor at Trustor's address as first set forth above.
10.7. Attorney's Fees. Should either party commence an action of any kind
whatsoever against the other to enforce any obligation under this Agreement, the prevailing party
shall be entitled to recover its costs and reasonable attorneys' fees (including disbursements)
from the other, whether or not such action is pursued to judgment.
10.8. Substitution of Trustee. Beneficiary may from time to time, by
instrument in writing, substitute a successor or successors to any Trustee named in or acting
under this Deed of Trust, which instrument, when executed by Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or counties where the
Land is situated, shall be conclusive proof of proper substitution of such successor Trustee or
Trustees who shall, without conveyance from the predecessor Trustee, succeed to all of its title,
estate, rights, powers and duties. Such instrument shall contain the name of the original Trustor,
Trustee and Beneficiary, the book and page where this Deed of Trust is recorded (or the date of
recording and instrument number) and the name and address of the new Trustee.
10.9. HUD Provisions
This Deed of Trust is subject and subordinate to the lien of a first Deed of Trust in
the amount of $11,226,200 in favor of the Secretary of housing and Urban Development
("Secretary of HUD") to be recorded securing a Capital Advance to be made by the Secretary of
HUD pursuant to the Cranston-Gonzalez National Affordable Housing Act, as amended, and to a
Regulatory Agreement and to a Use Agreement between Trustor/Owner and the Secretary.
During the period the HUD Regulatory Agreement or use Agreement is in effect,
no default or breach under this Deed of Trust may be declared by Agency without the prior
written approval of the Secretary of HUD.
In the event that during the period the HUD Regulatory Agreement or Use
Agreement is in effect, the Secretary of HUD acquires title to the property by foreclosure or by
deed in lieu of foreclosure, or otherwise, the lien of this Deed of Trust shall automatically
terminate.
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This Deed of Trust shall not be modified during the period of the HUD
Regulatory Agreement or Use Agreement is in effect without the prior written approval of the
Secretary of HUD.
During the period the HUD Regulatory Agreement or Use Agreement is in effect,
in the event of any conflict between any provisions of this Deed of Trust and the Cranston-
Gonzalez National Affordable Housing Act, as amended, HUD regulations, or the HUD
Regulatory Agreement, this Deed of Trust shall be deemed amended to comply with said Act,
regulations and HUD Regulatory Agreement.
Approval by the Secretary of HUD of a Transfer of Physical Assets ("TPA") of
the Project or Property referred to in the Regulatory Agreement shall constitute approval of the
TPA by Beneficiary.
During the term of the HUD Capital Advance Documents, any sums due
Beneficiary by Trustor arising under this Deed of Trust shall be payable only from residual
receipts as defined by the HUD Regulatory Agreement and subject to the prior written consent of
HUD.
Beneficiary shall not exercise the rights provided in Sections 4, 6.4, 6.5, 7.1-7.9,
and 10.1 inclusive, without the prior written approval of HUD during the term of the HUD
Regulatory Agreement.
IN WITNESS WHEREOF, Trustor hereby executes this Deed of Trust as of the
date set forth below.
"TRUSTOR":
TELACU Housing-San Bernardino IV, Inc.,
a California nonprofit public benefit corporation
Date: By:
Title:
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EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
REAL PROPERTY IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL NO. 1: (APN: 1191-282-01)
ALL THAT PORTION OF THE NORTHEAST 1/4 OF SECTION 32, TOWNSHIP 1 NORTH,
RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT
THEREOF, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTH 1/4 CORNER OF SAID SECTION 32; THENCE ALONG
THE WEST LINE OF SAID NORTHEAST 1/4, SOUTH 0° 21' 40", EAST 41.25 FEET TO
THE TRUE POINT OF BEGINNING, SAID POINT BEING ALONG THE SOUTHERLY
LINE OF HIGHLAND AVENUE, 82.50 FEET WIDE; THENCE ALONG THE SOUTHERLY
LINE OF HIGHLAND AVENUE, NORTH 890 40' 05" EAST, 261.52 FEET; THENCE
SOUTH 00 21 ` 40" EAST 261.52 FEET; THENCE SOUTH 89° 40' 05" WEST 261.52 FEET
TO THE WEST LINE OF SAID SOUTHEAST 1/4; THENCE ALONG THE WEST LINE OF
SAID NORTHEAST 1/4 NORTH 00 21' 40" WEST, 261.52 FEET TO THE TRUE POINT OF
BEGINNING.
PARCEL NO. 2: (APN: 1191-282-02)
ALL THAT PORTION OF THE NORTHEAST 1/4 OF SECTION 32, TOWNSHIP 1 NORTH,
RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGINNING AT THE NORTH 1/4 CORNER OF SAID SECTION 32; THENCE ALONG
THE WEST LINE OF SAID NORTHEAST 1/4, SOUTH 0° 21' 40" EAST 41.25 FEET TO A
PONT ON THE SOUTHERLY LINE OF HIGHLAND AVENUE, 82.50 FEET WIDE;
THENCE ALONG THE SOUTHERLY LINE OF HIGHLAND AVENUE,NORTH 89° 40' 05"
EAST.261.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 0° 21' 40"
EAST 261.52 FEET; THENCE 89° 44' 45" WEST 105 FEET FROM THE EAST LINE OF
THE NORTHWEST 1/4 OF THE NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SAID
SECTION 32; THENCE ALONG A LINE PARALLEL TO SAID EAST LINE, NORTH 00 26'
05" WEST 111.52 FEET; THENCE NORTH 89° 40' 05" EAST 21 FEET; THENCE NORTH
00 26' 05" WEST 150 FEET, MORE OR LESS, TO THE SOUTHERLY LINE OF SAID
HIGHLAND AVENUE; THENCE ALONG THE SOUTHERLY LINE OF HIGHLAND
AVENUE SOUTH 890 40' 05" WEST 316.86 FEET TO THE TRUE POINT OF BEGINNING.
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