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HomeMy WebLinkAboutR28- Economic Development Agency ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Ronald E.Winkler SUBJECT: OSBORNE DEVELOPMENT- Development Director OWNER PARTICIPATION AGREEMENT DATE: February 5, 1999 OR/61"1 NA L Synopsis of Previous Commission/Council/Committee Action(s): On January 14, 1999,the Redevelopment Committee adopted a motion to recommend approval of the subject agreement by the Community Development Commission. Recommended Motion(s): (Community Development Commission) MOTION: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING A CERTAIN OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND OSBORNE DEVELOPMENT CORPORATION Contact Person(s): Ronald E.Winkler/ Phone: 5081 Project Area(s) N/A Ward(s): Five(5) Supporting Data Attached: ® Staff Report O Resolution(s)®Agreement(s)/Contract(s)O Map(s)0 Letter/Memo FUNDING REQUIREMENTS Amount: $ 75,000 Source: Housing Set-Aside Budget Authority: Requested l r SIGNATURE: Gary s el,Executive 96ector 'on ald E. )lVinkler,Director E59domic Development Ag ncy Development Department Commission/Council Notes: ................................—-------------—---—----—---—----—----------—-------------------------------------------------------- REW:lag:99-02-15 Osborne COMMISSION MEETING AGENDA Meeting Date: 02/15/1999 Agenda Item Number: R2 o ECONOMIC DEVELOPMENT AGENCY STAFF REPORT --------------------------------------------------------------------------------------------------------------------- Osborne Development-Owner Participation Agreement Agency staff recently received the attached information regarding development of residential units at the intersection of Mountain Drive and North Park Boulevard. The proposed development consists of 98 single-family homes priced at $125,000 to $150,000. This pricing allows sale to families earning between $37,000 to $55,000 per year which is considered at or below 120% of median income. The developer is Osborne Development Corporation, a firm which has built single family residential units in San Bernardino under prior agreements with the Agency. In past years, the Agency has provided down payment assistance to buyers earning 120% of median income or less under our Mortgage Assistance Program (MAP). This assistance was provided through use of tax increment set-aside funds. However, because of prior commitments, these funds are not currently available. Thus, the Agency presently provides down payment assistance using HOME funds which are restricted to buyers with income of 80% of median or less by federal regulation. Since the developer wishes to offer down payment assistance to higher income buyers, they propose loaning the Agency $75,000 and gifting the Agency another $75,000 to fund MAP loans. Under their proposal, the $75,000 loan would be repaid over a three-year period at 3%simple interest. However, it should be noted that actual repayment of the loan could be extended over a longer period since the three-year period actually commences with each MAP loan. A similar program was used by the developer to assist in the sale of units in the City of Rialto. The$150,000 provided would fund down payment assistance for approximately 25 buyers. Also,the $75,000 gift of funds represents a 100%match to the Agency's loan obligation. Initially,the entire program is developer funded with each MAP loan a future benefit to the Agency. Execution of the recommended agreement would obligate the Agency to annual payments of approximately$25,750 over the next three years from housing set-aside funds. Staff feels efforts should be made to attract higher income buyers to San Bernardino whenever possible. Further,it is anticipated that tax increment set-aside funds will become available in future years to repay the developer loan. Upon reviewing this matter, the Redevelopment Committee recommends that the Community Development Commission authorize execution of the attached agreement. RECOMMENDATION That the Community Development Commission authorize the Executive Director to execute an Owner Participation Agreement with Osborne Development. Ronald E. W' kler,Director Deve1c, Deparbnent ------------------------------------------------------------------------------------------------------------------------------------------- REW:lag:99-02-15 Osborne COMMISSION MEETING AGENDA Meeting Date: 02/15/1999 Agenda Item Number: 1 RESOLUTION NO. 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT 3 COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING A CERTAIN OWNER PARTICIPATION 4 AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND 5 OSBORNE DEVELOPMENT CORPORATION 6 7 WHEREAS, the Community Development Commission of the City 8 of San Bernardino (the "Commission") on behalf of the Redevelopment 9 Agency of the City of San Bernardino (the "Agency") , is a 10 redevelopment agency, a public body of the State of California, 11 organized and existing pursuant to the Community Redevelopment Law 12 (Part 1 of Division 24) commencing with Section 33000 of the Health 13 and Safety Code of the State of California; and i 14 15 WHEREAS, Osborne . Development Corporation is a California 16 corporation (the "Participant") which proposes to build and sell 17 high quality single family detached residential units on certain 18 property located adjacent to the State College Redevelopment 19 Project Area (the "Site") in the City of San Bernardino (the 20 "City") ; and 21 22 WHEREAS, the Agency and Participant desire to enter into 23 the Owner Participation Agreement attached hereto as Exhibit "A" 24 and incorporated herein by this reference (the "Agreement") , 25 pursuant to which the Agency would assist the Participant with the 26 development and marketability of the Site; and 27 28 - 1 - I WHEREAS, as consideration for the Agency' s assistance, 2 the Participant shall supplement the Agency' s existing mortgage 3 assistance program (the "MAP") to provide for the sale and 4 occupancy of at least twenty-five percent (25%) of the units 5 situated upon the Site by low- and moderate income households at 6 affordable housing cost (the "Project") ; and 7 8 WHEREAS, the Agreement provides that the Agency shall 9 assist purchasers of the low and moderate units comprising the 10 Project, as more fully described therein, in a total amount not to 11 exceed Seventy-Five Thousand Dollars ($75, 000) ; and 12 13 WHEREAS, the development of the Site in conjunction with 14 the Agency' s assistance to Participant is in that vital and best 15 interests of the City and the health, safety and welfare of its 16 residents . 17 18 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION, 19 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF 20 SAN BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS 21 FOLLOWS: 22 23 Section 1 . The Commission hereby finds and determines 24 that the assistance to Participant as described in the Agreement is 25 within the redevelopment goals and objectives of the Agency, will 26 help eliminate blighting conditions within the City by increasing 27 the assessed valuation of real property and creating significant 28 - 2 - I employment opportunities and shall provide much needed low and 2 moderate income housing. 3 4 Section 2 . The Commission hereby authorizes the 5 Executive Director of the Agency to execute the Agreement and such 6 other documents as may be necessary to implement the Agreement and 7 to make any necessary nonsubstantive changes to the Agreement as 8 may be approved by Agency Special Counsel . 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 � r 28 - 3 - © 1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING A CERTAIN OWNER PARTICIPATION AGREEMENT BY 2 AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND OSBORNE DEVELOPMENT CORPORATION 3 Section 3 . This Resolution shall take effect upon the 4 date of its adoption. 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly 7 adopted by the Community Development Commission of the City of 8 San Bernardino at a meeting 9 thereof, held on the day of 1999, 10 by the following vote, to wit : 11 Commission: AYES NAYS ABSTAIN ABSENT 12 ESTRADA LIEN 13 McGINNIS SCHNETZ 14 DEVLIN ANDERSON 15 MILLER 16 17 Secretary 18 The foregoing resolution is hereby approved this 19 day of 1999. 20 Judith Valles, Chairperson 21 Community Development Commission of the 22 City of San Bernardino 23 Approved s t for a d 1 ga content: 24 By; 1 25 Agency Counsel 26 27 SBEO/0001/DOC/3450 28 2/5/99 1030 ct - 4 - �I i I STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) ss 2 CITY OF SAN BERNARDINO ) 3 I, Secretary of the Community Development Commission of the City of San Bernardino, DO HEREBY 4 CERTIFY that the foregoing and attached copy of Community Development Commission of the City of San Bernardino Resolution No. 5 is a full, true and correct copy of that now on file in this office. 6 IN WITNESS WHEREOF, I have hereunto set my hand and 7 affixed the official seal of the Community Development Commission of the City of San Bernardino this day of February, 1999 . 8 9 Secretary of the 10 Community Development Commission of the City of San Bernardino 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I ` Y i RECORDING REQUESTED BY: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND WHEN RECORDED RETURN TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street, Suite 301 San Bernardino, California 92901 Attn: Development Director (Space Above for Recorder' s Use) V REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OMER PARTICIPATION AGREEMENT (MORTGAGE ASSISTANCE PROGRAM/RANCHO ESTATES) By and Among REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and OSBORNE DEVELOPMENT CORPORATION, a California corporation TABLE OF CONTENTS Page I . [100] SUBJECT OF AGREEMENT . . . . . . . . . . . . . . 1 A. [101] PlIrpose of Agreement . . . . . . . . . . . 1 B. [102] The Site . . . . . . . . . . . . . . . . . 2 C. [103] Parties to the Agreement . . . . . . . . . 2 1 . [104] The Agency . . . . . . . . . . . . . . 2 2 . [105] The Participant . . . . . . . . . . . 2 3 . [106] Prohibition Against Assignment of Agreement . . . . . . . . . . . . . . 3 4 . [107] Benefit to Project Areas . . . . . . . 5 II . [200] AGENCY ASSISTANCE/PARTICIPANT ASSISTANCE . . . . 5 © A. [201] The Project . . . . . . . . . . . . . . . . 5 B. [202] Agency Assistance/Participant Assistance 6 1 . Option (a) . . . . . . . . . . . . . . . . . . . 9 2 . Option (b) . . . . . . . . . . . . . . . . . . 10 3 . Option (c) . . . . . . . . . . . . . . . . . . 10 C. [203] Term of the Agency Assistance . . . . . . 12 D. [204] Affordable Housing Cost . . . . . . 13 III . [300] IMPROVEMENT OF THE SITES . . . . . . . . . . . 13 A. [301] Improvement by Participant . . . . . . . 13 1 . [302] Cost of Construction . . . . . . . . 14 2 . [303] Bodily Injury and Property Damage Insurance . . . . . . . . . . . . . 14 ® 3 . [304] City and Other Governmental Agency Permits 16 4 . [305] Rights of Access . . . . . . . . . . 17 5. [306] Local State and Federal Laws . . . 17 6. (307] Antidiscrimination During Construction18 B. [308] Release of Agreement . . . . . . . . . . 18 IV. [400] USES OF SITE; AFFORDABILITY COVENANTS . . . . 19 A. [401] Use - Covenants Running With the Land 19 1 . In deeds . . . . . . . . . . . . . . . . . . . 22 2 . In leases . . . . . . . . . . . . . . . . . . 22 3 . In contracts . . . . . . . . . . . . . . . . . 23 B. [402] Maintenance of the Site . . . . . . . . . 24 C. [403] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction . . . . . . . . . . . . . . . . . . . . 25 GV. [500] GENERAL PROVISIONS . . . . . . . . . . . . 26 A. [501] Notices. Demands and Communications Between the Parties 26 3 B. [502] Conflicts of Interest; Nonliability . . . 26 C. [503] Enforced Delay; Extension of Times of Performance . . . . . . . . . . . . . . . . . . . . 27 D. [504] Inspection of Books and Records . . . . . 28 VI . [600] DEFAULTS AND REMEDIES . . . . . . . . . . . . 29 A. [601] Defaults - - General . . . . . . . . . . 29 B. [602] Leaal Actions . . . . . . . . . . . . . . 29 1 1 . [603] Institution of Legal Actions . . . . 29 2 . [604] Applicable Law . . . . . . . . . . . 30 Q3 . [ 605] Acceptance of Service of Process . . 30 C . [606] Rights and Remedies are Cumulative . . . 30 D. [ 607 ] Inaction Not a Waiver of Default . . . . 31 E. [608] Remedies . . . . . . . . . . . . . . . . 31 1 . [609] Damaaes . . . . . . . . . . . . . . 31 VII . [700] SPECIAL PROVISIONS . . . . . . . . . . . . . . 32 A. [701] Submission of Documents to Agency for Approval . . . . . . . . . . . . . . . . . . . . 32 B. [702] Successors in Interest . . . . . . . 32 IX. [900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY . . 34 A. [901] Time for Acceptance . . . . . . . . . . . 34 j j i ATTACHMENT NO. 1 - PROMISSORY NOTE SECURED BY DEED OF TRUST ATTACHMENT NO. 2 - DEED OF TRUST ATTACHMENT NO. 3 - HEALTH AND SAFETY CODE SECTION 50052 . 5 G OWNER PARTICIPATION AGREEMENT THIS AGREEMENT IS ENTERED INTO this day of February, 1999, by and among the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (the "Agency") and OSBORNE DEVELOPMENT CORPORATION, a California corporation ("Participant") . Agency and Participant hereby agree as follows: I . [100] SUBJECT OF AGREEMENT A. [101] Purpose of Agreement The purpose of this Agreement is to effectuate various redevelopment plans for the City of San Bernardino (the "City") by © assisting low- and moderate-income homebuyers in acquiring affordable housing and by providing for Agency Assistance, as hereinafter defined to Participant to cause the residential development of a single family housing tract (the "Site") , as hereinafter defined, within the City. In addition, the Agency assistance will also benefit Participant by improving the marketability of homes . The development of the Site pursuant to this Agreement is in the vital and best interests of the City and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws . The Agency has determined that the development and uses contemplated by this Agreement will benefit the low- and moderate- 0 income housing needs of the City as well as the various redevelopment project areas of the City, and has authorized the use of funds for such purposes . i B. [102] The Site The Site, which is designated as Tract No. 14448, shall consist of approximately NINETY-EIGHT (98) lots with a single family detached residential home to be built on each lot. The provisions of this Agreement are applicable to the entire Site. The Agency Assistance, as hereinafter defined, has been allocated for use in connection with the Site. C. [103] Parties to the Agreement 1 . [104] The Agency © The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, et sea. ) The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401 . 2 . [105] The Participant The Participant is Osborne Development Corporation, a California corporation. The principal office and mailing address of the Participant for purposes of this Agreement is: 30001 Comercio, Rancho Santa Margarita, California 92688 . 2 O 3 . [106] Prohibition Against Assignment of Agreement The qualifications and identity of the Participant are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant. No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein. © The Participant shall not assign all or any part of this Agreement or any rights hereunder without the prior written approval of the Development Director of the Agency, which approval the Development Director of the Agency will not unreasonably withhold. In the event of such transfer or assignment : (1) the assignee shall expressly assume the obligations of the Participant pursuant to this Agreement in a writing satisfactory to the Agency; (2) the original Participant shall remain fully responsible for the performance and liable for the obligations of the Participant pursuant to this Agreement; and (3) any guarantees provided to assure the performance of the Participant' s obligations under this Agreement shall remain in full force and effect unless otherwise agreed to in writing by the Agency. 3 OIn the absence of specific written agreement by the Agency, no such transfer, assignment or approval by the Agency shall be deemed to relieve the Participant or any other party from any obligation under this Agreement. All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Participant and the permitted successors and assigns of the Participant. Whenever the term "Participant" is used herein, such term shall include any other permitted successors and assigns as herein provided. The restrictions of this Section 106 shall terminate and be of no further force and effect upon completion of all obligations under this Agreement. Nothing in this Section 106 shall act to restrict the sale of the entire Site or a portion thereof to homebuilders or completed residential units developed on a Site to qualified purchasers if said sales are otherwise in compliance with the terms of this Agreement. 4 . [107] Benefit to Project Areas The Agency has determined that the development of the Site in accordance with this Agreement will eliminate blight and © provide needed low- and moderate-income housing to the various project areas of the Agency as well as to areas in proximity 4 0 thereto, which housing is needed due to the insufficiency of such housing within the City generally. II . [200] AGENCY ASSISTANCE/PARTICIPANT ASSISTANCE A. [201] The Project The Participant proposes to build and sell high quality single family detached residential units on the Site. The Agency, through the provision of the Agency Assistance, as hereinafter defined, and the Participant, through the provision of the Participant Assistance, as hereinafter defined, will supplement the Agency' s existing mortgage assistance program within the City (the 0 "MAP") in order to provide for the sale and occupancy of at least twenty five percent (25%) of the units by low- and moderate-income households at a ffordable housin g cost (t he "Project") . Any residential units which are sold to homebuyers who receive financial assistance in accordance with this Agreement, shall, subject to the conditions of this Agreement which apply to individual residential lots, be reserved for low- and moderate- income households and shall hereinafter be referred to as the "Low and Moderate Units" . B. [202] Agcy Assistance/Participant Assistance In order to assist in the development of the Site and marketability of the Site, the Agency agrees to provide certain © Agency assistance to qualified purchasers of Low and Moderate Units comprising the Project in a total amount of not to exceed Seventy 5 Five Thousand Dollars ($75, 000) (the "Agency Assistance") to be used to provide homebuyer mortgage write down/downpayment and/or closing cost assistance. The Agency Assistance shall be funded by a loan to the Agency from the Participant in an amount of Seventy Five Thousand Dollars ($75, 000) , which shall be funded in installments. Loan proceeds shall be deposited in the account established by the Agency in connection with the MAP (the "MAP Account") . The loan to the Agency shall be repaid to the Participant out of the Agency' s low and moderate-income housing fund established pursuant to Health and Safety Code Section 33334 . 3 in three (3) equal installments over a three (3) year period from © the date of a recorded grant deed and promissory note on each individual property. The loan to the Agency shall accrue simple interest at the rate of three percent (3%) per annum on the outstanding balance until paid; provided, however, that no interest shall accrue during the first year after funding the loan. The Agency Assistance shall only be offered to certain eligible purchasers who are of low- and moderate-income as defined in Health and Safety Code Section 50093 and who seek to purchase homes located on the Site. In addition to the Agency Assistance, the Participant agrees to deposit into the MAP Account Participant funds in an amount of Seventy Five Thousand Dollars ($75, 000) ("Participant Assistance") to be used for the same purpose as the Agency 6 Assistance so that the total MAP Account monies available for assistance of persons buying homes within the Site will be One Hundred Fifty Thousand Dollars ($150, 000) . The parties agree that the first Seventy Five Thousand Dollars ($75, 000) of MAP funds expended on the Project will be deemed to have been the Participant Assistance and the second Seventy Five Thousand Dollars ($75, 000) of MAP funds expended on the Project will be deemed to have been the Agency Assistance. Neither Agency nor City shall be in any way obligated to ever repay all or any portion of the Participant Assistance, even though loans made to homebuyers partially utilizing Participant Assistance will be repaid solely to Agency. © To the extent Participant deems desirable, Participant may, at its sole discretion, increase the amount of the Participant Assistance; provided, however, that Participant' s contribution of additional Participant Assistance shall in no way obligate Agency to provide any additional Agency Assistance. The obligation of the Participant to deposit moneys into the MAP Account shall be contingent upon the Agency' s prior deposit of the Agency' s I Assistance into the MAP Account; provided, however, that there shall be no disbursement of any funds representing the Agency Assistance to any potential home buyer until matching Participant Assistance has been deposited into the MAP Account. If the Participant Assistance has not been deposited on or prior to Juy 1, Q1999, the obligations of the parties hereunder shall be forgiven and this Agreement shall be deemed terminated. The Agency 7 Assistance and the Participant Assistance, when placed together in the MAP Account, shall be designated as NORTH PARK II MAP Funds ("NORTH PARK II MAP Funds") . Any time that Participant seeks to sell a Low and Moderate Unit within the Site at affordable housing cost to low- and moderate-income households, the Participant shall request in writing that the Agency use NORTH PARK II MAP Funds to provide certain downpayment/mortgage assistance in accordance with one (1) or any combination of three (3) options as more fully described hereinafter, provided that the total mortgage assistance per unit does not exceed five percent (5%) of the purchase price of the home . 1 . Option (a) . The Participant or home builder may request that mortgage assistance be provided to fund all or a portion of the downpayment requirements in connection with the establishment of an escrow for the sale of the applicable Low and Moderate Unit, in an amount not to exceed five percent (5%) of the purchase price per unit; or 2 . Option (b) . The Participant may request that mortgage assistance be provided for the payment of fees and closing © costs in connection with the establishment of an escrow for the 1 i 8 © sale of the applicable Low and Moderate Unit in an amount not to exceed five percent (58) of the purchase price per unit; or 3 . Option (c) . The Participant may request that the downpayment mortgage assistance be provided through the up front buy down of a purchase mortgage interest rate in an amount equal to five percent (5%) of the purchase price per unit. In order to qualify for the use of NORTH PARK II MAP Funds, and notwithstanding the use of NORTH PARK II MAP Funds, each home buyer must provide at least one percent (1%) of the purchase price out of his/her or their personal funds as part of © the down payment to be applied against the purchase price . In consideration for the Agency' s contribution of the Agency Assistance, the Participant shall, as a prerequisite to the close of escrow for any Low and Moderate Unit, cause each homebuyer who receives a portion of the NORTH PARK II MAP Funds to execute a Promissory Note, in favor of the Agency, in the principal amount of the NORTH PARK II MAP Funds loaned to the homebuyer, which Promissory Note shall be in substantially the form of Attachment No. 1 hereto and incorporated herein by this reference and shall be secured by a second Deed of Trust in favor of the Agency ® substantially in the form of Attachment No. 2 hereto and incorporated herein by this reference. Each Promissory Note shall 9 (25) years. The Promissory Notes shall provide that they will bear interest at three percent (3%) simple interest during the first five (5) years and, beginning with the sixth year, five percent (5%) simple interest during the last twenty (20) years . No payments of principal or interest will be due under the Promissory Notes until the earlier of (i) transfer or sale of the property which is the subject of the Promissory Note or (ii) the end of the twenty-five year term of the Promissory Note. The Promissory Notes shall also provide that they are not assignable without the prior written consent of the Agency. The Promissory Notes shall be immediately due and payable in full upon any sale, reconveyance, disposition, lease or other transfer of a Low and Moderate Unit to a household, person or entity that does not pre-qualify directly with the Agency as a low- or moderate-income household. All payments received on each Promissory Note will be deposited by the Agency into the MAP Account, and Participant expressly waives and releases the Agency from and against any and all claims in or to said payments. All assistance provided by the Agency under this Agreement will be in compliance with the Agency' s Mortgage Assistance Program Guidelines as attached hereto as Attachment No. 0 4 as may be amended from time-to-time; provided, however, that any such amendment does not place any greater burden or obligation on 10 such amendment does not place any greater burden or obligation on Participant or homebuyer of a Low and Moderate Unit other than as set forth herein. The aggregate amount of the NORTH PARK II MAP Funds for the 1998-99 fiscal year shall not exceed One Hundred Fifty Thousand Dollars ($150, 000) , unless the Participant voluntarily contributes more than Seventy Five Thousand Dollars ($75, 000) in Participant Assistance. All interest earned on the MAP Account shall be deposited into the MAP Account. QC. [203] Term of the Agency Assistance The Agency and the Participant agree that the provision of the Agency Assistance shall only apply until One Hundred Fifty Thousand Dollars ($150, 000) of the NORTH PARK II MAP Funds are expended on home purchases within the Site, or two years from the execution of this Agreement, whichever is earlier. D. (209] Affordable Housing Cost For the purposes of complying with this Agreement, all Low and Moderate Units, upon completion of the construction work, shall be sold to low and moderate income households at affordable housing costs as such term is defined in Health and Safety Code ® Section 50052 . 5, a copy of which is attached hereto as Attachment No. 3 and incorporated herein by this reference. 11 0 III . [300] IMPROVEMENT OF THE SITES A. [301] Improvement by Participant Participant and Agency agree that the central purpose of this Agreement is to cause the construction on the Site of single . family detached residences and to assist homebuyers in the purchase thereof in a manner consistent with the redevelopment goals of the Agency. All of the Low and Moderate Units will be of high quality and will be developed in accordance with guidelines of the City of San Bernardino, Department of Community Development. 1 . [302] Cost of onstruction oThe costs of undertaking the Project, including the costs of construction of the improvements, marketing and sales shall be borne solely by Participant and/or its successors and assigns. The Agency shall have no obligations, other than as expressly set forth herein, with respect to the funding of the Project. 2 . [303] Bodily Injury and Property Damage Insurance Participant shall defend, assume all responsibility for and hold the Agency, the City and their respective officers, agents and employees, harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death o (including attorneys ' fees and costs) , which may be caused by any of Participant' s activities under this Agreement, whether such 12 0 activities or performance thereof be by the Participant or anyone directly or indirectly employed or contracted with by Participant and whether such damage shall accrue or be discovered before or after termination of this Agreement. Participant shall take out and maintain a comprehensive liability and property damage policy in the amount of One Million Dollars ($1, 000, 000) combined single limit policy, including contractual public liability, as shall protect Participant, City and Agency from claims for such damages from the commencement of the Project until two (2) years after the sale of all Low and Moderate Units . © Participant shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance coverage . This countersigned certificate shall name the City and Agency and their respective officers, agents, and employees as additional insureds under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by Participant shall be primary insurance and not © contributing with any insurance maintained by Agency or City, and 1 the policy shall contain such an endorsement. The insurance policy 13 i or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and Agency. Participant shall furnish or cause to be furnished to Agency evidence satisfactory to Agency that any contractor with whom it has contracted for the performance of work on any Site or otherwise pursuant to this Agreement carries workers ' compensation insurance as required by law. 3 . [309] City and Other Governmental Agency Permits Before providing the Agency Assistance or any portion © thereof and/or commencement of construction or development of any buildings, structures or other works of improvement upon the Site, any and all permits for all necessary off-site improvements which may be required by the City or any other governmental agency having jurisdiction over such construction, development or work shall have been obtained. - Nothing contained in this Agreement shall be deemed to be an approval by the City of any application or permit required to be obtained by Participants or any other person or entity from the City. 14 0 4 . [305] Rights of Access For the purpose of assuring compliance with this Agreement, representatives of Agency and the City shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of work for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the improvements, so long as they comply with all safety rules . Such representatives of Agency or of the City shall be those who are so identified in writing by the Development Director of Agency. The Agency shall hold the Participant harmless from any bodily injury or related © damages arising out of the activities of Agency and the City as referred to in this Section 305 and resulting from the gross negligence or willful misconduct of the City or Agency. This Section 305 shall not be deemed to diminish or limit any rights which the City or Agency may have by operation of law irrespective of the Agreement . 5 . [306] Local , State and Federal Laws The construction of the Project and all related activities on the Site shall be carried out in conformity with all applicable laws, including all applicable federal and state labor standards; provided, however, Participant and its contractors, Qsuccessors, assigns, transferees, and lessees are not waiving their rights to contest any such laws, rules or standards . 15 6. [307] Antidiscrimination During Construction Participant, for itself and its successors and assigns, agree that in the construction of the improvements provided for in this Agreement, Participant shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, national origin or ancestry. B. [308] Release of Agreement Upon (i) the repayment in full of any Promissory Note n applicable to a Low and Moderate Unit, the restrictions of this �r Agreement may be released if, simultaneously with such release, there are recorded against the applicable property, covenants, conditions and restrictions in favor of the Agency which ensure that the discrimination provisions as provided in Section 401 hereof and the maintenance provisions as provided in Section 402 hereof remain in effect for the periods set forth in this Agreement IV. [400] USES OF SITE; AFFORDABILITY COVENANTS A. [401] Uses - Covenants Running With the Land Participant covenants and agrees for itself, its © successors, their assigns, and every successor in interest to a Low and Moderate Unit or any part thereof, that for a period of ten 16 (10) years commencing on the date of the issuance by the City of the Certificate of Occupancy on each of the Low and Moderate Units and except as otherwise provided herein, each Low and Moderate Unit will be devoted to and available for sale solely to persons or families with an income which are low and moderate to very low, as those terms are defined in Health and Safety Code Sections 50093 (low and moderate income) and 50105 (very low income) , with sales costs of each Low and Moderate Unit to be at an affordable housing cost (as such term is defined in Health and Safety Code Section 50052 .5, a copy of which is attached hereto as Attachment No. 5) . QThe foregoing covenants shall run with the land for ten (10) years commencing on the date that the City issues the certificate of occupancy on each of the Low and Moderate Units . The Agency shall, after the date of this Agreement, consider and adopt guidelines and restrictions substantially in the form of Attachment No. 3 for compliance with the provisions contained in the California Community Redevelopment Law and in particular, those Sections thereof that permit the use of the Agency' s Low- and Moderate-Income Housing Fund. The Participant acknowledges that the source of funds to be utilized to fulfill the © Agency' s financial commitments under this Agreement shall be tax increment revenues on deposit in the Agency' s Low- and Moderate- 17 D Income Housing Fund. The Community Redevelopment Law, and in particular, Health and Safety Code Section 33334 .3, requires the Agency to impose certain limitations on the income of prospective purchasers of the Low and Moderate Units, based upon affordability as may be determined by the Agency. Said limitations are set forth on Attachment No. 4, attached hereto and incorporated herein by this reference . The Participant agrees to include within the content of the grant deed and any other appropriate disclosure documents as may be reasonably necessary to implement this Agreement, such provisions as are necessary in furtherance of the guidelines and restrictions to be adopted by the Agency pursuant to this section as a means of complying with the intent of said Health �r and Safety Code Section 33334 . 3 . Participant 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, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Participants themselves or any person claiming under or through them 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, 18 C sublessees or vendees of the Site . The foregoing covenants shall run with the land. All deeds, leases or contracts pertaining to the Site shall contain or be subject to substantially the following nondiscrimination or non-segregation clauses: 1 . In deeds : "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 Ogroup of persons on account of race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land 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 land herein conveyed. The foregoing covenants shall run with the land. " 2 . In leases: "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, that 19 this lease is made and accepted upon and subject to the following conditions : "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, handicap, age, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment sale, lease, sublease, transfer, 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 practices or practices of discrimination or segregation with reference to the selection, location, number, use © or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased. " 3 . In contracts : "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, ancestry or national origin, 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 premises . " 20 I B. [402] Maintenance of the Site Participant, its successors and assigns, shall, as their sole responsibility and at their sole expense until sale of each of the residential units, maintain the Site or portions thereof which remain unsold and all other improvements on the Site and shall keep the Site free from any accumulation of debris or waste materials. Participant, its successors and assigns, further agree to maintain the Site in a neat and attractive manner until construction of the improvements described in this Agreement is complete so as not to, in the reasonable determination of an © appropriate officer of the City, be a public nuisance, or be detrimental to the health, safety and welfare of the public, or impair value of property within one thousand (1, 000) feet of the Site, and agree that in the event Participant, its successors and assigns fail to do so, Agency may enter upon the Site for the purposes of performing necessary and desirable maintenance, that Participant will be responsible for the cost of any such maintenance undertaken by Agency, which shall be paid within thirty (30) days after receipt by Participant of written demand therefor. 21 C. [903] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of Agency, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Agreement shall remain in effect until June 30, 2010 unless an earlier date is specified. The covenants against racial discrimination shall remain in perpetuity. © Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community 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. Agency shall have the right, if this 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 1 of this Agreement and covenants may be entitled. I a 22 i V. [5001 GENERAL PROVISIONS A. [501] Notices Demands and Communications Between the Parties Written notices, demands and communications between Agency and Participant shall be sufficiently given if delivered by hand (and a receipt therefor is obtained or is refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of Agency and Participant as set forth in Section 105 . Such written notices, demands and communications may be sent in the same manner to such other addresses as such party may from time to time designate by © mail as provided in this Section 501 . Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the tenth day from the date it is postmarked if delivered by registered or certified mail . B. [502] Conflicts of Interest: Nonliability No member, official or employee of Agency or the City shall have any personal interest, direct or indirect, in this Agreement. No member, official or employee shall participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. No 23 member, official or employee of Agency or the City shall be personally liable to Participant, or any successor in interest, in the event of any default or breach by Agency or Participant, or for any amount which may become due to Participant or its successors or on any obligations under the terms of this Agreement. Participant represents and warrants that it has not paid or given, and shall not pay or give, any third party any money or other consideration for obtaining this Agreement. C . [503) Enforced Delay; Extension of Times of QPerformance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrections; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; freight embargoes; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of another party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of Agency which shall not excuse performance by Agency) ; or any other causes beyond the control or © without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this 24 1 3 i i Agreement, 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) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Participant. D. [504] Inspection of Books and Records Agency has the right at all reasonable times to inspect the books and records of Participant pertaining to the Site as © pertinent to the purposes of this Agreement. Participant has the right at all reasonable times to inspect the public records of Agency pertaining to the Site as pertinent to the purposes of the Agreement. VI . [600] DEFAULTS AND REMEDIES A. [601] Defaults - - General Subject to the extensions of time set forth in Section 503, failure or delay by any party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and © shall complete such cure, correction or remedy with diligence . 25 The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. The injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. B. [602] Legal Actions 1 . [603] Institution of Legal Actions In addition to any other rights or remedies hereunder, © Agency or Participant 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. Any legal actions initiated pursuant to this Agreement or otherwise with respect to this subject matter must be instituted in the Superior Court of the County of San Bernardino, State of California, or in an appropriate municipal court in that county. 2 . [609] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 26 Q 3 . [605] Acceptance of Service of Process In the event that any legal action is commenced by any party against another party, service of process on such party shall be made by personal service upon such party or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. C. [606] Rights and Remedies are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any 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 any other party. D. [607] Inaction Not a Waiver of Default Any failures or delays by any party in asserting any of its right and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or 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 . Q 27 E. [608] Remedies 1 . [609] Damaaes Prior to completion of the Project, if either Participant or Agency 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 or if a cure has not been commenced and is being diligently pursued to completion by the defaulting party within thirty (30) days after service of the notice of default, the defaulting party shall be liable to the other for any damages caused by such default, and for attorneys' fees associated with enforcement of this Agreement and the non-defaulting party shall have the right to seek specific performance and such other remedies as are available in law or equity. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement on behalf of the Agency shall be considered as "attorneys' fees" for the purposes of this paragraph. VII . [700] SPECIAL PROVISIONS A. [701] Submission of Documents to Agency for Approval Whenever this Agreement requires Participant to submit any document to Agency for approval, which shall be deemed approved if not acted on by Agency within the specified time, said document shall be accompanied by a letter stating that it is being submitted and will be deemed approved unless rejected by Agency within the 28 ® stated time. If there is not a time specified herein for such Agency action, Participant may submit a letter requiring Agency approval or rejection of documents within thirty (30) days after submission to Agency or such documents shall be deemed approved. B. [702] Successors in Interest The terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of Participant. VIII . [800] ENTIRE AGREEMENT, WAIVERS © This Agreement is executed in four (4) duplicate originals, each of which is deemed to be an original . This Agreement includes 6 Attachments, which together with this Agreement constitute the entire understanding and agreement of the parties . No private entity shall be deemed to be a third party beneficiary with respect to any provisions of this Agreement . This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements among the parties or their 29 i predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and Participants, and all amendments hereto must be in writing by the appropriate authorities of Agency and Participants, except that the Executive Director of Agency may agree to non-substantive changes hereto with concurrence by Agency Counsel. Each individual signing below represents and warrants that he has the authority to execute this Agreement on behalf of and bind the party he purports to represent. IX. [900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY A. [901] Time for Acceptance This Agreement, when executed by Participant and delivered to Agency, must be authorized, executed and delivered by Agency on or before thirty (30) days after signing and delivery of this Agreement by Participant or this Agreement shall be void, except to the extent that Participant shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency as evidenced © by the date first above shown. 30 IN WITNESS WHEREOF, Agency and Participant have executed this Agreement on the day and date first above shown. "Agency" REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Gary Van Osdel EXECUTIVE DIRECTOR APPROVED P.S TO FORM AND LEGAL CO E By: Agency Counsel "Participant" OSBORNE DEVEL PMENT CORPORATION, a Califo corporation By: Its• By: Its : P:\APPS\YPOKSA\S.00\0001\OPA\001.WPD 31 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) On before me, O(`1 ( VSor) (here i r name an t t e of the officer) , personal y appeared Tin of E. QS6pr new , personally known to me (or proved to me dn the basis of satisfactory evidence) to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity (ies) , and that by his/her/their signature (s) on the instrument the person (s) , or the entity upon behalf of which the person (s) acte xecuted the instrument. WITNESS my ha and official seal. Sign e (Seal) LORIFERGUSON; Comm. 41141829 NOTARY PUBLIC CALIFORNIA9 © ORANGE COUNTY Comm. Exp.June 73,2001 + 32 III I II STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) On before me, (here insert name and title of the officer) , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies) , and that by his/her/their signature (s) on the instrument the person (s) , or the entity upon behalf of which the person (s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 33 ATTACHMENT N0. t PROMISSORY NOTE S San Bernardino, California February 2 1999 FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to the Redevelopment Agency of the City of San Bernardino ("Holder") at 201 North"E" Street, Third Floor, San Bernardino,California 92401, or at such other address as Holder may direct from time to time in writing, Dollars(L _ )(the "Note Amount"). All sums hereunder shall be payable in lawful money of the United States of America. 1. Loan Agreement This Promissory Note is made and delivered pursuant to and in implementation of the Loan Agreement entered by and between the Holder and the Maker dated _ (the "Agreement'), a copy of which is on file as a public record with the Holder and is incorporated herein © by reference. The Maker acknowledges that but for the execution of this Promissory Note, the Holder would not enter into the Agreement or make the loan contemplated therein. Unless definitions of terms have been expressly set out at length herein, each terns shall have the same definition as set forth in the Agreement. 2. Interest Rate Except as provided in Section 5 herein, no interest shall accrue on the Note Amount. ;. Maturity Date/Acceleration The whole of the Note Amount and all other payments due hereunder and under the Loan Agreement shall become due and be immediately payable to the Holder by the Maker upon the occurrence of any one of the following events: (a) Maker sells the Property; (b) Maker transfers any interest in the Property; (c) Maker refinances any lien or encumbrance to which the Agency Deed of Trust is subordinate for a loan amount in excess of the then current loan balance secured by such lien or encumbrance; or © (d) Maker fails to occupy the Property or is in default of any obligation under the Loan Agreement between the Holder and Maker dated 4. Interest Amount In the event that(1)the Note Amount becomes due and payable pursuant to Section 3 above, and (ii) the Maker meets the requirements of Section 4.A. or 4.B. below, then, in addition to the principal amount of the Note under the Agency Loan becoming due and payable, the Maker shall pay to Holder concurrent with such sale, transfer, refinancing, or default an amount equal to the Interest Amount,as hereinafter defined. The"Interest Amount"shall mean an amount equal to fifteen percent (15%)of the Note Amount per annum, compounded annually, and calculated from the date the loan was made; however, in no event shall Maker pay more than the Maximum Interest Amount, as hereinafter defined. Thus,if under the terms of Section 4.A. the proposed Buyer of the Property from the Maker is not a person of low to moderate income and/or the proposed Sales Price(as the term is hereinafter defined) is not available at an affordable housing cost to such Buyer, or, if the Maker defaults under the terms of Section 4.B., the principal amount of the Note under the Agency Loan and the Interest Amount are due and payable. The Maximum Interest Amount shall be determined by multiplying a percentage factor(the "Applicable Factor") by the difference between the Sales Price and the Purchase Price (as defined below). The Applicable Factor shall be calculated by dividing the amount of the Note Amount by the Purchase Price. (For example, if the Note Amount equals $20,000 and the Purchase Price equals $200,000,the Applicable Factor equals 10%. The Maximum Interest Amount would then equal 10% ® x(Sales Price minus $200,000). The"Purchase Price"is the original Purchase Price paid by the Maker to the Seller for Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The"Sales Price"is the price to be paid by the Buyer of the Property to Maker for Maker's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. At the election of the Holder, the Holder may appoint a certified, independent appraiser to conduct an appraisal of the Property, at Maker's expense to assist the Holder in determining if the Sales Price is at or near the fair market value of the Property at such time. If the Sales Price is determined by the appraisal to be three percent (3%) or more below the fair market value of the Property as estimated in said appraisal, then the "Sales Price" for purposes of determining the Maximum Interest Amount shall be the fair market value of the Property established in said appraisal. The value of all capital improvements to the Property made while Maker owned the Property may be deducted from the Sales Price when calculating the Maximum Interest Amount, if Maker complies with the following: C 5. Maximum Interest. No provision of this Promissory Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable law. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument,the provisions of this paragraph shall govern, and neither Maker or any endorsers of this Promissory Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 6. Security for Note. This Promissory Note shall be secured by a second deed of trust encumbering the Property (the "Agency Deed of Trust"), executed by Maker as Trustor in favor of Holder as Beneficiary. 7. prepayment of Note Amount. Maker may prepay to Holder the full Note Amount,with no penalty thereon, at any time prior to the due date of the Note Amount. S. Holder May Assign. Holder may, at its option, assign its right to receive payment under this Promissory Note without necessity of obtaining the consent of the Maker. 9. Maker Assignment Prohibited In no event shall Maker assign or transfer any portion of this Promissory Note and/or the Agency Loan without the prior express written consent of the Holder, which consent may be given or withheld in the Holder's sole discretion. This Section shall not affect or diminish the Holder's right to assign all or any portion of its rights to the loan proceeds hereunder. 10. Attorney's Fees and Costs. 1 In the event that any action is instituted to enforce payment under this Promissory Note, the parties agree the prevailing party shall be entitled to all court costs and all attorney's fees incurred in enforcing this Note. 11. Non-Waiver. I3 Failure or delay in giving any notice required hereunder shall not constitute a waiver of any 1 default or late payment, nor shall it change the time for any default or payment. i 12. Successors Bound. This Promissory Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. "Maker" By Printed Name By: \ Printed Name: By: Printed Name: No capital improvements valued at more than two thousand five hundred dollars ($2,500) shall be deducted from the Sales Price unless within sixty(60) days following completion of such capital improvements to the Property, Maker shall send the following to the Holder; (I) an itemized list of the improvements, (ii) proof of completion of the improvements (as evidenced e.g., by final building permits), and (iii) evidence of the cost of the improvements. The costs incurred by the Maker for capital improvements which cost less than two thousand five hundred dollars ($2,500) shall be deducted from the Sales Price upon Maker's submission of evidence of such costs to the Holder, in a form reasonably satisfactory to the Holder, upon the due date of the Note Amount. A. Interest Amount Payable upon Sale or Transfer to Non-Low to Moderate Income Buyer. It is the intent of the Holder that if and when the Property is sold by the Maker, said sale will be to a Buyer of low to moderate income, as defined in Health and Safety Code Section 50093, and the Sales Price is at an "affordable housing cost," as defined under Health and Safety Code Section 50052.5,to the Buyer. Therefore, the Interest Amount shall be payable to the Holder upon sale or transfer of the Property pursuant to the requirements of Section 3 of this Note to a Buyer who is not a person or family of low to moderate income, as defined under Health and Safety Code Section 50052.5. If the Holder is unable to verify the Buyer's income shall be deemed to exceed such median income limit and the Interest Amount shall be due and payable concurrent with the repayment of the Note Amount. However, if the Buyer is a person or family of low to moderate income and purchasing the Property at an affordable housing cost, as defined herein, then no Interest Amount is due to Holder upon such sale to the Buyer, and only the principal amount of the Note is due and payable. B Interest Amount Payable Upon Refinancing Failure to Occupy or Default The Interest Amount shall be due and payable as provided in the Agreement upon the earlier of(I) a sale or transfer of the Property as provided in Section A hereof, (ii) the refinancing of the First Lien for a loan amount in excess of the then current loan balance secured by the First Lien, or(iii) such time if or when Maker is no longer an occupant of the Property or is in default of any other obligation under the Agreement. At the request of Participant, the Agency may, in its sole discretion, in writing waive the aforementioned requirements and defer repayment and/or extend the term of the Agency Loan. The "Sale Price" for purposes of determining the Maximum Interest Amount shall be determined by an appraisal of the Property. The Holder shall appoint a certified, independent appraiser to conduct an appraisal of the Property, at Maker's expense. Maker agrees that in such event the Maximum Interest Amount shall be the Applicable Factor multiplied by the difference between the Purchase Price and"Sale Price" as established by the appraised value of the Property at the time of such refinancing, failure to occupy or default in this Promissory Note. V I ATTACHMENT N0. 2 DEED OF TRUST RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) REDEVELOPMENT AGENCY OF THE ) CITY OF SAN BERNARDINO ) ATTN: HOUSING DIVISION ) 201 NORTH"E" STREET ) SAN BERNARDINO,CA 92401-1507 ) (Space Above for Recorder's Use) DEED OF TRUST WITH ASSIGNMENT OF RENTS Deed of trust made on by AS HIS SOLE AND SEPARATE PROPERTY, hereinafter called"Trustor",whose address is 1014 © San Bernardino California 92405, to Gateway Title Company, a California Corporation, hereinafter referred to as"Trustee",whose business address is 935 South Mt. Vernon Avenue, #110, Colton, California 92324, in favor of the Redevelopment Agency of the City of San Bernardino, hereinafter referred to as"Beneficiary",whose business address is 201 North"E" Street, Third Floor, San Bernardino, California 92401. Trustor irrevocably grants, transfers, and assigns, to Trustee in trust, with power of sale, all that property, including all easements and rights of way used in connection therewith or as a means of access thereto, in the City of San Bernardino, County of San Bernardino, State of California, described as follows: That certain property located in the City of San Bernardino, County of San Bernardino, State of California, more particularly described as: See Legal Description attached hereto and made a part hereof as Exhibit "A" together with the rents, issues and profits thereof, subject however to the right reserved by Truster to collect and apply such rents, issues and profits, prior to any default hereunder; for the purpose of securing performance in a timely manner of all of Trustor's obligations under that -°rtain Promissory Note dated as of even date herewith (the"Promissory Note's and that certain Loan Agreement (the "Agreement") dated in the amount of and performance of each �+ agreement to Trustor incorporated herein by reference or contained herein. V 4 A. To protect the security of this Deed of Trust, Trustor agrees: 1. To maintain the property in good condition and repair; not to remove or demolish any building or improvement thereon; to complete promptly in workmanlike manner any improvement hereafter constructed thereon and to restore promptly in workmanlike manner any improvement thereon that is damaged or destroyed, and to pay when due all costs incurred therefor or in connection therewith; to comply with all laws, ordinances, regulations, covenants, conditions and restrictions affecting the property; not to commit or permit any waste thereof or any act upon the property in violation of law or of covenants, conditions or restrictions affecting the property. 2. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and also, if at any time Beneficiary or Trustee is a party to or appears in any such action or proceeding, or in any action or proceeding to enforce any obligation hereby secured, to pay all cost and expenses paid or incurred by them or either of them in connection therewith, including, but not limited to, cost of evidence of title and attorney's fees in a reasonable sum. 3. To pay(a)at least ten(10) days before delinquency, all taxes and assessments affecting the property, all assessment upon water company stock, and all rents, assessments and charges for water appurtenant to or used in connection with the property; (b) when due, all © encumbrances,charges and liens, with interest, on the property or any part thereof, which appear to be prior or superior hereto; and ( c) all costs, fees and expenses of this trust. 4. If Trustor fails to make any payment or to do any act as herein provided, then Beneficiary or Trustee (but without obligation so to do, and with or without notice to or demand upon Trustor,and without releasing Trustor from any obligation hereof)may(a) make or do the same in such manner and to such extent as either deems necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the property for such purpose; (b) appear in or commence any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; ( c ) pay, purchase, contest, or compromise any encumbrance, charge or lien that,in thejudgement of either, appears to be superior hereto; and in exercising any such power, Beneficiary or Trustee may incur necessary expenses, including reasonable attorney's fees. 5. To pay immediately and without demand all sums expended hereunder by Beneficiary or Trustee, with interest from date of expenditure at the annual rate of five percentage points over Bank of America's published prime rate. B. It is mutually agreed that: Any award of damages made in connection with the condemnation for public use of or injury to the property or any part thereof is hereby assigned and shall be paid to Beneficiary, who © may apply or release such moneys received therefor upon any indebtedness secured hereby in such order as Beneficiary determines,or at the option of Beneficiary the entire amount so received or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 1. The acceptance by Beneficiary of any payment less that the amount then due shall be deemed an acceptance on account only and shall not constitute a waiver of the obligation of Trustor to pay the entire sum then due or of Beneficiary's right either to require prompt payment of all sums then due or to declare default. The acceptance of payment of any sum secured hereby after its due date will not waive the right of Beneficiary either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. No waiver of any default shall be a waiver of any preceding or succeeding default of any kind. 2. At any time upon the occurrence of a default, without liability therefor and with or without notice, upon written request of Beneficiary and presentation of this deed for endorsement, and without effecting the personal liability of any person, Trustee may reconvey any part of the property,consent to the making of any map or plat thereof,join in granting any easement or join in any extension agreement or any agreement subordinating the lien or charge thereof. 3. Upon written request of Beneficiary, surrender of this deed to Trustee for cancellation and retention, and payment of its fees, Trustee shall reconvey, without warranty the property then held hereunder. The recitals in such reconveyance shall be conclusive proof of the truthfulness thereof. The grantee may be designated in such reconveyance as"the person or persons legally entitled thereto." 4. Trustor may give such notice to Beneficiary at any time before there is a trustee's sale of the property. At any time Trustor is in default in payments to be made to Beneficiary hereunder,any amounts paid to and received by Beneficiary for execution of releases pursuant to the terms of this paragraph after notice of default and election to sell has been recorded shall not, unless the requirements of Section 2924c of the Civil Code are fully met by or on behalf of Trustor, waive the right of Beneficiary to continue its plans to have the property sold, nor shall they have any effect on the exercise by Beneficiary of the acceleration privilege contained herein, except to entitle the person effecting such payment to the release of the property for which the release amount was paid, and insofar as Beneficiary is concerned, to constitute a credit against the secured debt. 5. If Trustor or any subsequent owner of the property covered hereby shall occupy the property, or any part thereof, after any default, Trustor or such owner shall pay to Beneficiary in advance on the first day of each month a reasonable rental for the premises so occupied. On failure to pay such reasonable rental, Trustor or such owner may be removed from the premises by summary dispossession proceedings or by any other appropriate action or proceeding. 6. If default is made in performance of any agreement hereby secured, then Beneficiary, with or without notice to Trustor,may institute suit for the foreclosure of this deed, or by delivering to Trustee a written declaration of default and demand for sale, as well as a written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be filed for 1 record. If such declaration is delivered to Trustee, Beneficiary shall deposit with Trustee this deed, and all documents evidencing expenditures secured hereby. i i i 7. After the time then required by law has elapsed after recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, with or without demand on Trustor, shall sell the property at the time and place fixed in the notice of sale, either as a whole or in separate parcels and in such order as Trustee determines, at public auction, to the highest bidder,for cash in lawful money of the United States,payable at the time of sale, Trustee may postpone from time to time sale of all or any portion of the property by public announcement at the time and place of sale originally fixed or at the last preceding postponed time. Trustee shall deliver to the purchaser its deed conveying the property sold,but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor, Trustee, Beneficiary or any other person may purchase at the sale. 8. After deducting all costs,fees and expenses of Trustee and of this trust, including cost of evidence of title and reasonable attorney's fees in connection with sale, Trustee shall apply the proceeds of sale to payment of(a) all sums expended under the terms hereof and not theretofore repaid, with accrued interest at five percentage points over Bank of America's published prime rate per annum,and (b) all other sums then secured hereby in such order as Beneficiary, in the exercise of its sole discretion, directs. The remainder, if any, shall be paid to the person or persons legally entitled thereto. Q 9. Before Trustee's sale, Beneficiary may rescind such notices of default and of election to cause the property to be sold by delivering to Trustee a written notice of rescission, which notice, when recorded, shall cancel any prior declaration of default, demand for sale and acceleration of maturity. The exercise of such a right of rescission shall not constitute a waiver of any default then existing or subsequently occurring, or impair the right of Beneficiary to deliver to Trustee other declarations of default and demands for sale or notices of default and of election to cause the property to be sold, or otherwise affect any provision of the secured note or of this deed or any of rights, obligations or remedies of Beneficiary or Trustee hereunder. 10. Beneficiary may,from time to time as provided by statute, or by a writing signed and acknowledged by him and recorded in the office of the county recorder of the county in which the land or such party thereof as is then affected by this deed of trust is situated, appoint another trustee instead and of Trustee herein named; and thereupon, the Trustee herein named shall be discharged, and the trustee so appointed shall be substituted as Trustee hereunder with the same effect as if originally named Trustee herein. 11. If two or more persons are designated as Trustee herein, any or all powers granted herein to Trustee may be exercised by any of such persons if the other person or persons is unable, for any reason,to act. Any recital of such inability in any instrument executed by any of such persons shall be conclusive against Trustor, his heirs and assigns. 12. All leases of any structures on the Site which utilize the Project as defined in the © Agreement, now or hereafter affecting the property are hereby assigned and transferred to Beneficiary by Trustor. Trustor hereby covenants that none of such leases will be modified or terminated without the written consent of Beneficiary. 13. If a default is made in the performance of any agreement hereby secured.Trustor when requested to do so, shall give such further written assignments of rent, royalties, issues and profits; of all security for the performance of leases; and of all money payable under any option to purchase, and shall give executed originals of all leases, now or hereafter on or affecting the property. 14. Trustor reserves the right, prior to any default in payment of any indebtedness or performance of any obligation secured hereby, to collect all such rents, royalties, issues and profits, as but not before they become due. Upon any such default, Trustor's right to collect such moneys shall cease, not only as to amounts accruing thereafter, but also as to amounts then accrued and unpaid. In the event of default, i , Beneficiary, with or without notice and without regard to the 1 ry, adequacy of security for the indebtedness hereby secured, either in person or by agent, or by a receiver to be appointed by the court, (a) may enter upon and take possession of the property at any time and manage and control it in Beneficiary's discretion, and (b) with or without taking possession, may sue for or otherwise collect the rents,issues and profits thereof, whether past due or coming due thereafter, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any obligation secured hereby and in such order as Beneficiary determines. None of the aforesaid acts shall cure or waive any default hereunder or invalidate any act done pursuant to such notice. Beneficiary shall not be required to act diligently in the care or management of the property or in collecting any rents, royalties or other profits that it is hereby © authorized to collect, and shall be accountable only for the sums actually received. 15. Without affecting the liability of Trustor or of any other party now or hereafter bound by the terms hereof, from time to time and with or without notice,Beneficiary may release any person now or hereafter liable for performance of such obligation, and may extend the time for payment or performance, accept additional security, and alter, substitute or release any security. 16. In any judicial action brought to foreclose this deed or to enforce any right of Beneficiary or of Trustee hereunder, Trustor shall pay to Beneficiary and to Trustee attorney's fees in a reasonable sum, to be fixed by the court. 17. No remedy hereby given to Beneficiary or Trustee is exclusive of any other remedy hereunder or under any present or future law. 18. The pleading of any statute of limitations as a defense to any and all obligations secured by this deed is hereby waived, to the full extent permissible by law. 19. Trustor shall,upon request made by Beneficiary, furnish the Beneficiary with annual statements covering the operations of the property. 20. Beneficiary may collect a"late charge"not to exceed an amount equal to five percent (5%) on the amount past due and remaining unpaid on any installment that is not paid within ten(10) days from the due date thereof,to cover the extra expense involved in handling delinquent payments. j 21. This deed applies to, inures to the benefit of and binds all parties hereto, their heirs, 1 a C legatees,devisers, administrators,executors, successors,successors in interest, and assigns. The term "Beneficiary" means the owner and holder, including pledgers, of the Agreement secured hereby, whether or not named as Beneficiary herein. In this deed, whenever the context so requires, the masculine gender includes the feminine and neuter, and the singular number includes the plural, and all obligations of each Trustor hereunder are joint and several. 22. Trustee accepts this trust when this deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee. Trustor requests that a copy of notice of default and of any notice of sale hereunder shall be mailed to him at the address indicated in the first paragraph of this Deed of Trust. Executed at San Bernardino, California, on the date first above written. Title:(/Trustor Title: Trustor Title: Trustor �V EXHIBIT "A" © LEGAL DESCRIPTION i g 7 f i 3 I I i I 1 a 1 I , i Q STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) On _ —before me, personally appeared _ personally known to me (or proved to me on the basis of satisfactory evidence ) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature — — _ — (Seal) v ATTACHMENT NO. 3 HEALTH AND SAFETY CODE SECTION 50052 . 5 ATT. 3 - Page 1 ATTACFLMENT N0. 3 fill HEALTH AND SAFETY CODE SECTION 50052 . 5 Health i Safety Code Chapter 2. DEFINITIONS Section 50062.5. Definitions. 50052.5. Affordable housing cost ' (a) For any omer-oetvpled housing which receives ass Lstanes prior to January if 1991 and a condition of that Aesiatanec is compliance vich this ' section affordable housing coat" a * * vith reap ace to lover Lncome. household, * * * shall not exceed 25 percent of grass income, (b) For any ovner-occupied housing which receives assistance an or after January 1 1991 and a Condit Lon of that assistance is Co,ppliance with ter s action, f'afforAable housing cost" shall not exceed the following: (1) For veq low income households the product of 30 yyercent time, SO percent of the area median income adjusted for family alze appropriate for the unit. (2) For lover income households vhoae Riosa lacamta exceed the mammon income for very low income householda and do not exceed 70 perceat of the are media, income adjusted for family area, sire, the product of 3o percent times 70 percent of the area median income adjusted for famllY size appropriate for the unit. In addition, for nay lover income household that has a ream Lncome that equals or exceeds 70 percoat of the area median Income adjusted for family site it shall be optional for any stare or local funding agency to require that affordable housing cast not exceed 30 percent of the grass income of the household. (3) For moderate income households, affordable hovain6 cast shall Lot be leas than 28 percent of the gross income of the household, nor called the Product of 35 percent times 110 percent of area median Income adjusted for family sire appropriate for the wait. In addition, for any moderate income household that has A gross income chat exceeds 110 percent of the area medlar income adjusted for f,elly site, it shall be aptionel Cor any state or local funding agency to require that affordable housing coot roe exceed 35 Percent of the dross income of the household. (e) The department shall, by regulation, adapt criteria definintt and proviiding for determination of gross income, adjustments for family size a roprlate to the unit, and housing cost for purposes of determining affordable housing cast 0 a * under this section. These regulations may provide alternative criteria where necessary to be consistent with pertinent Cederal statutes and regulations governing federallyy assts ted howelnC• T11c s gency may, by toggulatSon, •do t aloe rnative cr it erl a, and pursuant to subdivision (f) 0f Section 50462 alternative percentages of income may be adopted for agency-assisted housing development. With reseppcz to moderate and lower income households who are tenants of rental housing developments and members or shareholders of cooperative housing d eve Iopmenta, or limited equity tooperatives affordable housing cost^ has the same meaning as affordable rent, as defined lrt'Section 50053. theomulmumntone[ruc[ldepartment morc6aga also ordcaleMethod p leftha[evi111mnke housing ava ilablt to an Income erdup at affordable housing cost. income For purposes of this faction, 'Arne median income" shall mean area median as P Y p pursuant to Section 50093. For purposes of th Ss section„"code rate Income household" shall have the A AM meaning as persons and families of moderate income,, as defined In Section 50097. For purposes of this section, and provided there are no pertinent federal ■tatues applicatle to a project of program "ad Meted for family sit, a proprlate to the unit" shall mean Cot a Aouse old of one Person In the cane vp a studio unit, two persons In the case e! a one-bedroom Pert, three persons In the case of • two-bedroom unit, four persona In the of a three-bedroom unit, and five persons In the cue of a tour-bedroom unit. (Anendcd by Stats. 1990, e. 152) (S.B. 1852), 1.) ATT. 3 - Page 2 ATTACHMENT No. 4 LOW AND MODERATE INCOME LIMITS INCOME LIMITS JANUARY 1998 NUMBER OF PERSONS IN FAMILY CCLW7Y STANDARD 1 2 3 4 5 6 _ 7___ 8 -iANBERNARDINO Very low income 16300 18600 20900 23250 25100 26950 28850 30700 Area median: Lower income 26050 29750 33500 37200 40150 43150 46150 49100 $46,500 Median income 32550 37200 41850 46500 50200 53950 57650 61400 Moderate income 39050 44650 50200 55800 60250 64750 69200 73650 Note: subject to annual adjustment C I T Y OF S A N B E R N A R D I N O INTEROFFICE MEMORANDUM CITY CLERK'S OFFICE DATE: February 17, 1999 TO: Barbara Lindseth, EDA, FROM: Josie Alvarez, Clerk III/Liens SUBJECT: Transmittal for signatures to return to City Clerk for filing with Resolution No. CDC/99-6` COPIES : file Attached are the following: Three original agreements to be filed with Res. CDC/99-6 auhotirzing and directing the execution of an owner Participation Agreement with Redevelopment Agency of the City of San Bernardino and Osborne Development Corporation. Please obtain signatures on all documents and return one (1) fully executed original to the City Clerk' s office for filing with said resolution. If you have any questions, please do not hesitate to call the undersigned at 5102 . Thank you. I Josie Alvarez, Account Clerk III I hereby acknowledge eceipt of the above mentioned documents . Signed. Dated: ja enclosures