HomeMy WebLinkAboutTINY TIM LP (C/O COMMUNITY DEVELOPMENT PARTNERS) (2)A-2019-058
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FREE RECORDING REQUESTED PURSUANT Recorded in Official Records, Orange County
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2019000146849 8:00 am 05/03/19
City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, Califomia 92702
Attention: Clerk of the Council
PL/Rd
47 422 Al2 107
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LOAN AGREEMENT
by and between the
CITY OF SANTA ANA
and
FREE RECORDING REQUESTED
[Government Code Section 6103]
Tiny Tim LP, a California limited partnership
(2223 West Fifth Street, Santa Ana, California)
Dated: April 16, 2019
Exam
from fee per GC 27388.1(a) (2);
retarded concurrently "In c00e01011 with"
a transfer subJJ'ect to the Imppoosltlon of
�pgymmtary Ermiltor tAx (D1T),
LOAN AGREEMENT
INCLUSIONARY HOUSING PROGRAM
THIS LOAN AGREEMENT ("Agreement") dated, for identification purposes
only, as of April 16, 2019, is made and entered into by and between the City of Santa Ana,
a charter city and municipal corporation ("City"), and Tiny Tim LP, a California limited
partnership ("Developer") with reference to the following:
RECITALS:
A. The City's Housing Opportunity Ordinance ("Ordinance") was originally
adopted by the City Council on November 28, 2011 (Ordinance No. NS-2825), and is
codified in Article XVIILI of the Santa Ana Municipal Code ("SAMC"). The Ordinance
was amended by the City Council on September 1, 2015 (Ordinance No. NS-2881), and on
October 6, 2015 (Ordinance No. NS-2885). The Ordinance established standards and
procedures to encourage the development of housing that is affordable to a range of
households with varying income levels. Pursuant to SAMC section 41-1904(c), developers
may pay an in -lieu fee in certain instances to satisfy the inclusionary requirements. These
fiords are deposited into the Inclusionary Housing Fund, as defined by SAMC section 41-
1901, and are to be used to increase and improve the supply of affordable housing per
SAMC section 41-1909.
B. Developer, acting by and through its representative and agent, Community
Development Partners, a California corporation ("CDP") requested financial assistance in
connection with the proposed development of a fifty-one (51) unit affordable housing
complex ("Project") to be located at 2223 West Fifth Street, Santa Ana, California, and
legally described within Exhibit A attached hereto and incorporated herein ("Property").
At least fifteen (15) of the units will be affordable to family households earning no more
than 30% of the Area Median Income ("AMI"); five (5) of the units affordable to family
households earning no more than 50% of the AMI; and thirty (30) of the units affordable
to family households earning no more than 60% of the AMI. Office space within the
development will be provided for use as a police substation which at a minimum will have
room for a desk, phone, and computer that could be set up by the Santa Ana Police
Department ("SAPD"), dependent upon their available staffing and resources. The unit
mix consists of:
Bedroom
Size
30%
AMI
50%
AMI
60%
AMI
Manager's
Unit
Total
Two Bedroom
6
3
10
1
20
Three Bedroom
8
2
19
29
Four Bedroom
1
1
2
Totals
15
5
30
1
51
On -site amenities will include a community plaza, an art center, urban farm, and
mini park with outdoor gym and jogging track. Mercy House Living Centers ("Mercy
House") will manage onsite residential services coordination for all households.
C. The City and the Housing Authority of the City of Santa Ana ("Housing
Authority") reviewed Developer's request for assistance and at the City Council/Housing
Authority meeting on June 20, 2017, the City Council authorized and approved issuance
of a conditional, pre -commitment letter evidencing the preliminary award of $1,300,00 of
funds to the Project ("Inclusionary Loan"), to be funded exclusively from the Inclusionary
Housing Fund.
D. The amount of the Inclusionary Loan was determined based upon the City's
review of the Developer's request for the receipt of the Inclusionary Loan and the
development proforma and projected cash flows for the Project submitted by the Developer
to the City as of March 29, 2017 ("Proforma"). The City Project Manager has authority to
approve revised development proformas and projected cash flows for the Project; provided,
however, that the Inclusionary Loan is not materially increased or extended.
E. In furtherance of the Inclusionary Housing Program, Developer has applied
to the City for a loan with which to:
1. Acquire, develop and construct the project, and
2. Thereafter to maintain, operate and professionally manage the Project
as decent, safe, sanitary and affordable rental housing.
F. The City, on certain terms and conditions, desires to make such Inclusionary
Loan to Developer in order to make possible the acquisition, development, construction,
ownership, maintenance, and operation of the Project, thereby expanding the supply of decent,
safe, sanitary and affordable housing within the City.
G. If there is any inconsistency between Federal, State, and local guidelines
with regard to any of the terms and conditions contained herein, the more stringent shall
apply.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
herein contained, City and Developer agree as follows:
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. All capitalized teens used herein, including, without
limitation, in the Recitals above and in all other Project Documents, unless otherwise
expressly defined, are defined where first used in this Agreement and/or as set forth in this
Article 1.
"Administrative General Partner" means Tiny Tim CDP LLC, a
California limited liability company.
"Affordability Restrictions on Transfer of Property" means that certain
document affecting real property benefiting the City, attached hereto and incorporated
herein as Exhibit B.
"Affordable Housing" means the total housing costs paid by a qualifying
household, which shall not exceed the fraction of gross income specified, as follows, in
accordance with Sections 50052.5 and 50053 of the Health & Safety Code and the U.S.
Department of Housing and Urban Development (HUD):
Very Low -Income Households. Thirty (30) percent of the income of a household
earning fifty (50) percent of the Median Income for the Area adjusted for family
size appropriate for the unit.
Low -Income Households. Thirty (30) percent of the income of a household earning
seventy (70) percent of the Median Income for the Area for for -sale units, and thirty
(30) percent of the income of a household earning sixty (60) percent of the Orange
County median income for rental units, adjusted in either case for family size
appropriate for the unit.
In the event of a conflict between the fractions specified in this definition and those
found in Sections 50052.5 and 50053 of the Health & Safety Code and HUD, the
fractions specified by HUD shall control.
"Affordable Rent" means the monthly rents which do not exceed the
maximum amount applicable to Extremely Low, Very Low and Low Income households,
as promulgated by the California Tax Credit Allocation Committee (TCAC), or by the State
of California, as applicable.
"Agency" means the Housing Authority of the City of Santa Ana, acting as
the Housing Successor Agency, a public body, corporate and politic, exercising
governmentalfrmctions and powers, and organized and existing under the CRL. The
principal office of the Agency is located at 20 Civic Center Plaza, Santa Ana, California
92702. "Agency" shall also refer to the City where the context dictates, to the effect that
City shall have all rights granted to the Agency hereunder.
"Building Permit" means the building permit(s) issued by City and
required for the construction.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which Santa Ana City Hall is open to the public for the conduct of City affairs.
"Calendar Year" means each consecutive twelve (12) month period from
January 1 to December 31.
"Certificate of Completion" has the meaning set forth in Article 17.
"City" means the City of Santa Ana, California, a charter city and
municipal corporation. "City" shall also refer to the Agency where the context dictates, to
the effect that the Agency shall have all the rights granted to the City hereunder.
"City Project Manager" shall mean the City's Housing Manager and/or
his/her designee.
"Close of Escrow" shall mean the date upon which the Inclusionary Loan
Agreement and Inclusionary Deed of Trust is recorded in the Official Records of the
County.
"Co -General Partner" means IH CDP Partnership LLC, a California
limited liability company.
"County" means the County of Orange, California.
"Developer" means Tiny Tim LP, a California limited partnership.
"Developer's Representative" shall mean a representative of the
Administrative General Partner designated from time to time by the Administrative
General Partner of Developer or his/her designee.
"Escrow" is the escrow opened for the closing of the Senior Loan, Agency
Loan and Inclusionary City Loan.
"Escrow Holder" is Commonwealth Land Title Company.
"Event of Default" has the meaning set forth in Section 20.1.
"Extremely Low Income" means an adjusted income which does not
exceed thirty percent (30%) of the Median Income for the Area, adjusted for household
size, as published by the U.S. Department of Housing and Urban Development.
"General Partner" means collectively, jointly and severally the
Administrative General Partner, the Co -General Partner and the Managing General Partner.
"Governmental Authority" means any governmental or quasi -
governmental agency, board, bureau, commission, department, court, administrative
tribunal or other instrumentality or authority, and any public utility.
"Hazardous Materials" means flammable materials, explosives,
radioactive materials, hazardous wastes, toxic substances and similar substances and
materials, including all substances and materials defined as hazardous or toxic wastes,
substances or materials under any applicable law, including without limitation the
Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §§ 9601, et seq., as amended. Hazardous Material shall not include (i) construction
products, household cleaners and office materials of the type and quantity ordinarily used
in the normal construction, operation, ownership, occupancy and maintenance of properties
similar to the Project or (ii) small amounts of household mold to the extent promptly
remediated upon discovery.
"Housing Authority" means the Housing Authority of the City of Santa
Ana (CA093), a public body, corporate and politic.
"HUD" means the United States (U.S.) Department of Housing and Urban
Development, and any successors or assigns thereof.
"Improvements" means all improvements and fixtures now and hereafter
comprising any portion of the Property, including, without limitation, landscaping, trees
and plant materials; and offsite improvements, as required through the City of Santa Ana
Planning and Building Agency entitlement process.
"Inclusionary Deed of Trust" means the deed of trust encumbering the
Property, in the form attached hereto as Exhibit C, to be executed by Developer pursuant
to Section 5.13.1 in order to secure the Inclusionary Loan Note.
"Inclusionary Loan" or "Inclusionary City Loan" means a loan in the
original principal amount of up to one -million, three -hundred thousand dollars
($1,300,000) to be made to Developer by the City to be funded exclusively from the
Inclusionary Housing Fund.
"Inclusionary Promissory Note" means that certain promissory note for
Inclusionary Loan funds in the original principal amount of $1,300,000 in the form attached
hereto as Exhibit D, and to be executed by Developer in favor of City to evidence the
obligation of Developer to repay the Inclusionary Loan through residual receipts as further
described in the Inclusionary Promissory Note.
"Indemnitees" has the meaning set forth in Section 14.5.
"Investor Limited Partner" means R4 TTCA Acquisition LLC, or its
permitted successors or assigns.
"Laws" means all statutes, laws, ordinances, regulations, orders, writs,
judgments, injunctions, decrees or awards of the United States or any state, county,
municipality or other Governmental Authority.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, including any conditional sale or other title retention agreement,
any lease in the nature thereof, and any agreement to give any lien or security interest.
"Loan Documents" or "Inclusionary Loan Documents" means,
collectively, this Agreement, the Inclusionary Promissory Note, the Inclusionary Deed of
Trust, and the Affordability Restrictions on Transfer of Property, and any other agreement,
document, or instrument that the City reasonably requires in connection with the execution
of this Agreement or from time to time to effectuate the purposes of this Agreement.
"Low Income" means an adjusted income which does not exceed eighty
percent (80%) of the Median Income for the Area, adjusted for household size, as published
by the U.S. Department of Housing and Urban Development (HUD).
"Managing General Partner" means Tiny Tim Mercy House CHDO
LLC, a California limited liability company.
"Median Income for the Area" means the median income for the Orange
County, California PMSA as most recently determined by HUD. Also may be referred to
interchangeably in the Inclusionary Loan Documents as "Area Median Income" or "AMP'.
"Partnership Agreement" means the Amended and Restated Agreement
of Limited Partnership of the Developer, dated as of May 1, 2019, as may be amended,
modified or supplemented.
"Project" means the construction of the Improvements upon the Property
by Developer pursuant to this Agreement.
"Project Budget" means the line -item budget for the Project attached
hereto as Exhibit E, as modified from time to time in accordance with this Agreement.
"Project Costs" means all costs of any nature incurred in connection with
the Project in accordance with generally accepted accounting principles.
"Property" means the property that is located at 2223 West Fifth Street in
the City of Santa Ana, and as more fiilly described in the "Legal Description" of the Property
attached hereto as Exhibit A and incorporated herein by reference.
"Scope of Work/Schedule of Performance" means the detailed statement
of the work to be performed by Developer on and to the Property pursuant to this
Agreement, along with the Schedule of Performance setting forth timeframes for certain
tasks, which document is attached hereto as Exhibit F.
"Senior Lender" means a commercial or institutional financial institution
providing the Senior Loan or any other holder of the Senior Loan Note.
"Senior Loan" means a loan from the Senior Lender concurrent to the
Inclusionary Loan for payment of a portion of the acquisition and construction costs, and
shall include any subsequent loan that permanently refinances the initial Senior Loan.
"Senior Loan Deed of Trust" means the first deed(s) of trust securing the
Senior Loan by encumbering the Property.
"Senior Loan Documents" means, collectively, the loan agreement
governing the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any
other agreement, document or instrurnent that the Senior Lender requires in connection
with the Senior Loan.
"Senior Loan Note" means the promissory note evidencing the Senior
Loan from the Senior Lender.
"Term of Affordability" means the terms and conditions contained herein
shall remain in effect for fifty-five (55) years from the date of issuance of the Certificate
of Occupancy for the Project, or repayment of the Inclusionary Loan, whichever is longer.
"Very Low Income" means an adjusted income which does not exceed
fifty percent (50%) of the Median Income for the Area, adjusted for household size, as
published by the U.S. Department of Housing and Urban Development .
1.2 Singular and Plural Terms. Any defined term used in the plural in this
Agreement shall refer to all members of the relevant class and any defined term used in the
singular shall refer to any number of the members of the relevant class.
1.3 References and Other Terms. Any reference to this Agreement shall
include such document both as originally executed and as it may from time to time be
modified. References herein to Articles, Sections and Exhibits shall be construed as
references to this Agreement unless a different doctument is named. References to
subparagraphs shall be construed as references to the same Section in which the reference
appears. The term "document" is used in its broadest sense and encompasses agreements,
certificates, opinions, consents, instruments and other written material of every kind. The
terms "including" and "include" mean "including (include) without limitation."
1.4 Exhibits Incorporated. All attachments and exhibits to this Agreement,
as now existing and as the same may from time to time be modified, are incorporated herein
by this reference.
[RESERVED]
SCOPE OF WORIQPROJECT BUDGET
A "Scope of Work" and "Schedule of Performance" for the Property is attached
hereto as Exhibit F. Any material change to the Scope of Work/Schedule of Performance
requested by the Developer shall be subject to the prior written approval of the City Project
Manager. The Scope of Work/Schedule sets forth the construction work that shall be
performed on the Property and timeframes for approvals of such work.
A line -item budget for the Project, including a summary of statement of sources
and uses of funds, is incorporated into Exhibit E ('Project Budget"). Any material change
to the Project Budget requested by Developer shall be subject to the prior written approval
of the City Project Manager.
4. [RESERVED]
INCLUSIONARY LOAN:
The Inclusionary Loan shall be evidenced by the Inclusionary Promissory Note in
the form attached hereto as Exhibit D. The Inclusionary Loan shall be secured by the
Inclusionary Deed of Trust in the form attached hereto as Exhibit C. The terms and
conditions of the Inclusionary Loan are as set forth in the Inclusionary Promissory Note.
The Tenn of Affordability for the Project is fifty-five (55) years from the date of issuance
of Certificate of Occupancy for the Project, or repayment of the Inclusionary Loan,
whichever is longer.
5.1. Inclusionary Funds:
A. Amount and Purpose. Subject to the terms and conditions of this
Agreement, City agrees to make a loan to Developer from the Inclusionary Housing Fund
in the principal amount of up to $1,300,000.00 for the acquisition, construction, ownership,
operation, rehabilitation and other costs of the Project.
6. CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS
6.1 Conditions Precedent. City's obligation to disburse the loan is subject to
the satisfaction of the following conditions precedent:
(a) City Council. Review and approval of the documents evidencing
the Inclusionary Loan by the City Council of the City of Santa Ana.
(b) Code Compliance. Compliance with California Health and Safety
Code and applicable regulations set forth in Section 34176.
(c) Environmental Review. Compliance with and completion of
environmental review of the Project pursuant to the California Environmental Quality Act
("CEQA") and approval thereof.
(d) Affordability Restrictions. The finding of $1,300,000 is from the
Inclusionary Housing Fund. Fifty (50) of the "Housing Units" at the Project shall and will
be restricted to affordable rents pursuant to the Maximum Rents published yearly by the
California Tax Credit Allocation Committee (TCAC) and referenced in the regulatory
agreement containing conditions, covenants and restrictions executed by Developer and
TCAC for a period not less than fifty-five (55) years recorded against the Project in the
Official Records, County of Orange, California. At least fifteen (15) of the Housing Units
at the Project shall and will be restricted to households earning 30% or less of the AMI.
One (1) Housing Unit will be rented to an on -site property manager; the manager's unit
will not be rent restricted.
(e) Loan Documents. Developer shall have delivered to the Escrow
Holder, signed by the authorized officer or officers of Developer, with such signature(s)
acknowledged where necessary, each of the following documents:
(i) this hnclusionary Loan Agreement;
(ii) the Inclusionary Promissory Note ($1,300,000);
(iii) the Inclusionary Deed of Trust; and,
(iv) the Affordability Restrictions on Transfer of Property.
(f) Title Insurance. City shall have received an American Land Title
Association (ALTA) Extended (LP-10) Loan Policy (6-17-06), or evidence of a
commitment therefore satisfactory to City, issued by Commonwealth Land Title Company
and in form and substance satisfactory to City, together with all endorsements and binders
required, naming City as the insured, in a policy amount of not less than the total
Inclusionary Loan Amount, showing Developer as the fee owner of the Property and
insuring the Inclusionary Deed of Trust to be a valid priority lien on the Property. This
Agreement, the Inclusionary Promissory Note, and the Inclusionary Deed of Trust shall all
be subordinate to the Senior Loan Note and Senior Loan Deed of Trust.
(g) Affordability Restrictions on Transfer of Property. Developer shall
have delivered to the Escrow Holder, in the form attached hereto as Exhibit B, the
Affordability Restrictions on Transfer of Property pursuant to which, among other things,
Developer agrees that the Property shall be used only for decent, safe, sanitary and
Affordable Housing pursuant to the affordability requirements of California Health and
Safety Code ("H&S") sections 50052.5 and 33334.3, as applicable. The City's
Affordability Restrictions on Transfer of Property shall remain in superior position to the
Senior Loan Documents and shall not be subordinated.
(h) Documents Recorded. This Loan Agreement, Inclusionary Deed of
Trust, and the Affordability Restrictions on Transfer of Property shall have been recorded
in the Official Records of the County.
(i) Request for Notice. For the benefit of City, Escrow Holder shall
have recorded a request for notice of default of the Senior Loan (the "Request for Notice
of Default").
0) Insurance. City shall have received evidence satisfactory to the City
Attorney that all of the policies of insurance required by Section 19 of this Agreement are
in fall force and effect.
(1c) Representations and Warranties. The representations and warranties
of Developer contained in this Agreement and the other Loan Documents shall be correct
in all material respects as of the Close of Escrow as though made on and as of that date,
and if requested by the City Project Manager, City shall have received a certificate to that
effect signed by Developer's Representative.
(1) No Default. No Event of Default by Developer shall have occurred,
and no event shall have occurred which, with the giving of notice or the passage of time or
both, would constitute an Event of Default by Developer under this Agreement, and if
requested by the City Project Manager, City shall have received a certificate to that effect
signed by Developer's Representative.
(in) The City's obligation to provide the Inclusionary Loan is and shall
remain subject to all covenants, conditions, and restrictions set forth in this Loan
Agreement, and in particular City's analysis of the available funding sources and
development and operating costs of the Project and the overall economic feasibility of the
Project.
6.2 Disbursement Procedures for Loan. The Inclusionary Loan proceeds shall be
disbursed through Escrow to finance the acquisition, development and construction of the
Project (as evidenced in the Project Budget, attached as Exhibit E). The Inclusionary Loan
proceeds shall not be used for any purpose other than for acquisition, development and
construction related costs, including Developer fee and soft costs related to the development
of the Project (costs all subject to City's prior review).
6.3 First Disbursement. City's obligation to make the first disbursement of the
Loan is subject to satisfaction of the following conditions precedent:
(a) All grading permits shall have been issued or the City shall have
issued a letter stating that Building Permits are ready to issue, subject only to payment of
fees and the completion of grading of the Project site.
(b) Developer shall have secured all necessary financing and funding
for the construction and operation of the Project. Such financing and funding shall be
sufficient to pay all Project development costs, through lease -up, as set forth in the final
budget consistent with the approved Proforma (or as otherwise approved by the City).
(c) Developer shall have provided evidence to the City that the
Developer has obtained insurance policies and certificates or endorsements acceptable to
the City, as described in this Agreement.
(d) Developer shall have provided constriction security in favor of the
City, which may include a completion guarantee from Developer and/or a letter of credit
and/or performance and payment bonds from the general contractor for the Project (or some
combination of these), in an amount sufficient to ensure the Project will be completed and
placed in service within the time set forth in the Project schedule approved by the City.
(e) Developer shall submit and obtain the City Project Manager's
approval of the construction contract, the identity and qualifications of the General
Contractor, the Partnership Agreement for the limited partnership entity to be formed to
own and operate the Project, and management, marketing and tenant selection plans for the
Project.
6.4 Termination for Failure of Condition. If (a) any of the conditions set
forth herein are not timely satisfied (subject to applicable notice and cure rights), and (b)
City is not in default under this Agreement, City may terminate this Agreement without
any further liability on its part by giving written notice of termination to Developer. Upon
the giving of such notice, all principal, interest and other amounts owing under the
Agreement shall be due and payable.
6.5 Any Disbursement. City's obligation to make any disbursement of the
Loan, including the first and final disbursements, is subject to the satisfaction of the
following conditions precedent:
(a) SatisfactorProgress. The City Project Manager shall be satisfied
that, based on his/her own inspections or other reliable information, the construction is
progressing satisfactorily in conformance with all applicable laws and other requirements.
(b) Condition of Title. Either (i) the City Project Manager reasonably
believes that no event has occurred since the Close of Escrow that would give rise to a
colorable claim against the Property (e.g., a mechanic's lien) superior to the claim of City
against the Property with respect to the subject disbursement, or if such claim is made, then
City Project Manager shall receive satisfactory evidence that such claim has been bonded
over until its resolution; or (ii) City must have received, at Developer's expense but payable
out of the Loan proceeds from the title insurer who issued City's LP-10 Title Policy, all
endorsements thereto then reasonably required by City (including, without limitation,
CLTA Form 122 -- priority of advance endorsements).
(c) Representations and Warranties. The representations and warranties
of Developer contained in this Agreement and the other Inclusionary Loan Documents
shall be correct in all material respects as of the date of the disbursement as though made
on and as of that date.
(d) No Default. No Event of Default by Developer shall remain uncured
(unless, to the extent permitted under this Agreement, Developer is diligently taking action
to cure such default) and no event shall have occurred which, with the giving of notice or
the passage of time or both, would constitute an Event of Default by Developer.
6.6 Final Disbursement. City's obligation to disburse that portion of the Loan
funds retained pursuant to Section 6.12 is subject to the satisfaction of the following
additional conditions precedent:
(a) Construction complete. The construction of the Project shall be
complete.
(b) Certificate of Occupancy Issued. Any portion of the construction work
requiring inspection or certification by any Governmental Authority shall have been
inspected and certified as complete. Developer shall request that the City of Santa Ana
Planning and Building Agency issue a Certificate of Occupancy, a copy of which shall be
delivered to the City Project Manager, in order for final disbursement to occur.
(c) Lien Free. At least one of the following shall have occurred:
(i) Thirty-five (35) days shall have passed since the recording of a
valid notice of completion for the construction, and no mechanic's or materialman's lien
shall be outstanding; or
(ii) Ninety-five (95) days shall have passed since actual completion
of the construction, and no mechanic's or materialman's lien shall be outstanding, or
Developer shall have bonded over any such lien to City's reasonable satisfaction.
6.7 Waiver of Conditions. The conditions set forth pertaining to City's
obligation to make disbursements of the Loan proceeds are for City's benefit only and the
City Project Manager may waive all or any part of such rights by written notice to
Developer.
6.8 Disbursement Requests. The Loan proceeds shall be disbursed on a line -
item by line -item basis in accordance with the Project Budget and subject to the conditions
in this section. In no event shall City have any obligation to disburse any amount for any
item in excess of the amount allocated to such item in the Project Budget. Disbursements
shall be made only upon Developer's written request in the form of a Disbursement Request
showing all costs which Developer intends to fund with such disbursement, itemized in
such detail as City may reasonably require, accompanied in each case by (a) invoices and
lien releases satisfactory to City, including in any event partial lien releases executed by
each contractor and subcontractor who has received any payment for work performed, and
(b) all other documents and information reasonably required by City. Disbursement
Requests shall be submitted no less than ten (10) Business Days prior to the date of the
requested disbursement, and shall not be submitted more often than monthly.
Prior to each disbursement by City of proceeds of the loan, Developer shall deliver
to City a draw request ("Draw Request"), and all required supporting information as set
forth in the Inclusionary Loan Documents or as otherwise reasonably required by City in
order to provide information for evaluating the requested disbursement pursuant to
customary constriction lending practices of institutional lenders in Southern California.
City shall notify the Developer of approval or disapproval of each Draw Request
within five (5) Business Days after receipt of the Draw Request, using the City's
"Disbursement/Change Order Approval Notice". City shall have the right, but not the
obligation, to discontinue processing Draw Requests unless and until receipt of notification
from the other lenders of approval or disapproval of each outstanding Draw Request.
6.9 Manner of Disbursement. City may make any disbursement by check
payable to Developer; or on a voucher basis; or by check payable jointly to Developer and
any contractor, subcontractor or other claimant; or directly to any such claimant; or by any
other means reasonably selected by City.
6.10 Cost Overruns. In the event that, at any time and for any reason, (a) the
actual cost reasonably estimated by Developer to be required to complete all matters
included in any line item in the Project Budget exceeds the amount allocated to that line
item in the Project Budget, (b) Project Costs for any matters not covered by a specific line
item have been or will be incurred, or (c) the undisbursed portion of the Loan proceeds and
all other approved financing sources are or may be insufficient to pay all construction of
the Project that may be payable under the Inclusionary Loan Documents or otherwise in
connection with the construction, Developer shall, within ten (10) days after it receives
written notice thereof from City of any of the foregoing matters, do one or more of the
following:
(a) provide satisfactory evidence to City that Developer has previously
paid such excess or otherwise provided for such insufficiency (collectively, the "Excess
Cost") with funds from a source other than the Inclusionary Loan;
(b) reallocate sufficient funds to pay the Excess Cost from funds
allocated to "Contingency" in the Project Budget; provided, however, that the City Project
Manager's consent to any such reallocation shall be required; or
(c) deposit an amount equal to the Excess Cost in a non -interest bearing
account (the "Overrun Account") with City from which withdrawals may be made only
with the consent of the City Project Manager but which will be exhausted prior to any
further disbursement for any line item, so that any resulting surplus in any line item of the
Project Budget will then be reallocated to the line item(s) in which the Excess Costs are
expected to be incurred.
City shall have no obligation to make further disbursements until Developer has
paid or otherwise provided for the overrun as required above. Amounts deposited by
Developer in the Overrun Account for any Excess Costs shall be disbursed by City prior to
the disbursement of any remaining Loan proceeds in the manner described in subsection
9.3(c).
6.11 Cost Savings. Upon completion of and disbursement for all matters covered
by any line items in the Project Budget, any remaining undisbursed amounts allocated to
that line item shall be reallocated to "Contingency" and thereafter be available for
disbursement in accordance with the terns of this Agreement.
6.12 Retainage. City will withhold a Retainage of 10% from each
Disbursement for each of the Hard Cost line items of the Project Cost Breakdown (and
other line items thereof designated for withholding of retainage) until all conditions to the
final Disbursement of Hard Costs have been satisfied. In lieu of City's withholding
Retainage, Developer can by written notice to City elect not to draw any overhead or profit
as would otherwise be pernitted under the Construction Contract until such time as
Retainage would otherwise have been released.
6.13 [Reserved].
6.14 Waiver of Disbursement Conditions. Unless City otherwise agrees in
writing, the malting by City of any disbursement with knowledge that any condition to such
disbursement is not fulfilled shall constitute a waiver of such condition only with respect
to the particular disbursement made, and such condition shall be conditioned to all further
disbursements until fulfilled.
6.15 Modification of Disbursement Conditions and Procedures. The City
Project Manager shall have the authority to modify the disbursement conditions and
procedures set forth herein in order to conform there to the payment provisions of the
contract for construction.
6.16 Other Terms and Conditions of Loan.
A. The Note shall become immediately due and payable, in the event of any
of the following:
(1) Failure to complete the Project within three (3) years of the date on which
the Inclusionary Deed of Trust is recorded, unless extended due to Force Majeure delays;
(2) Violation of any of the use covenants and restrictions contained in this
Agreement after the expiration of any applicable notice and cure periods; or,
(3) An Event of Default by Developer which is not timely cured after
expiration of any applicable notice and cure periods pursuant to the terms of this Agreement.
6.17 Closing Costs and Fees. Developer shall pay (a) all escrow fees and
charges, (b) all recording fees and charges on any document recorded pursuant to this
Agreement, and (c) the premium for the title insurance required hereunder.
7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE
PROJECT
7.1 Use Covenants and Restrictions. Developer agrees and covenants, which
covenants shall nun with the land and bind Developer, its successors, its assign and every
successor in interest to the Property that Developer will make all of the rental units on the
Property available to extremely low, very low and low income households at rents affordable
to such households for fifty-five (55) years (except for one (1) unit for the onsite manager).
The Project shall consist of fifty-one (51) residential units. Enforceability of restrictions
on the fifty (50) units shall be enforced until the date that is fifty-five (55) years after the date
on which the Certificate of Occupancy is issued.
7.2 Affordability Levels/Unit Mix:
The unit mix and levels of affordability are as follows:
Bedroom
Size
30%
AMI
50%
AMI
60%
AMI
Manager's
Unit
Total
Two Bedroom
6
3
10
1
20
Three Bedroom
8
2
19
29
Four Bedroom
1
1
2
Totals
15
5
30
1
51
a. The Affordable Rents charged at the Project must comply with the standards
set forth by the California Tax Credit Allocation Committee (TCAC).
b. Utility allowances must be deducted from the Maximum Gross Monthly Rent.
The Housing Authority of the City of Santa Ana publishes a Utility Allowance
Schedule on an annual basis.
c. Based on the unit mix and bedroom sizes provided above, at least fifteen (15)
of the units will be affordable to family households earning no more than 30%
of the AMI; five (5) of the units affordable to family households earning no
more than 50% of the AMI; and thirty (30) of the units affordable to family
households earning no more than 60% of the AMI.
7.3 Rent Increases: On an annual basis, the City shall provide the Developer with
the maximum allowable schedule of rents for the Property which shall correspond to the
maximum rent increase allowed by TCAC. In no event can Developer charge any tenant more
than such amount.
7.4 Maintenance of the Property. Solely at Developer's expense, Developer
agrees to maintain the Property in a clean and orderly condition and in good condition and
repair and keep the Property free from any accumulation of debris and waste materials. If at
any time Developer fails to maintain, or cause to be maintained, the Property as required by
this section, and said condition is not corrected after the expiration of a reasonable period of
time not to exceed thirty (30) days from the date of written notice from the City, unless such
condition cannot reasonably be cured within thirty (30) days, in which case Developer shall
have such additional time as reasonably necessary to complete such cure, the City may
perform the necessary maintenance and Developer shall pay all reasonable costs incurred for
such maintenance. The City shall inspect the Property annually after the date of issuance of
the Certificate of Completion as described in Section 17 of this Agreement.
7.5 Obligation to Refrain from Discrimination. Developer covenants and agrees
for itself, its successors, its assigns and every successor in interest to the Property or any part
thereof, that there shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, disability, religion, sex, marital status, ancestry or
national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the Property nor shall Developer itself or any person claiming under or through him 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 Property. The foregoing covenants shall run with the land and shall remain in
effect for the term of the Agreement.
8. DEFAULTS AND REMEDIES
8.1 Event of Default. Failure or delay by either party to perform any term or
provision of this Agreement within the time periods provided herein for such performance
constitutes a default under the Agreement. If any party defaults in performance of its
obligations, covenants or agreements hereunder, the defaulting party shall be entitled to cure
the default in accordance with this section. The injured party shall give written notice of
default to the party in default, specifying the default complained of by the injured party. Delay
in giving such notice shall not constitute a waiver of any default nor shall it change the time
of default. The defaulting party must, within thirty (30) days following service of said written
notice, commence to cure, correct or remedy such failure or delay and shall complete such
cure, correction, or remedy with reasonable diligence. Upon a default by Developer which is
not cured within thirty (30) days following service of said notice, unless such default cannot
reasonably be cured within thirty (30) days, in which case Developer shall have such
additional time as reasonably necessary to complete such cure but no more than ninety (90)
days, the City shall have the right to terminate this Agreement by delivery of written notice
of termination to Developer.
8.2 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
economic damages for any default, or to obtain any other remedy consistent with the purpose
of this Agreement.
8.3 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.
8.4 Damages. In the event that the City is liable for damages to Developer, such
liability shall not exceed costs incurred by the Developer in the performance of this
Agreement and shall not extend to compensation for loss of future income, profits or assets.
8.5 Nonrecourse Liability. Neither Developer, nor any partner of Developer, nor
any member of any partner of Developer, nor any member, partner, officer, director,
employee, agent or representative of any member of any partner of Developer, shall have any
personal liability under this Agreement, or the attached Note and Deed of Trust, and any
judgment, decree or order for the payment of money obtained in any action to enforce the
obligation of Developer to repay the loan evidenced by such documents shall be enforceable
against Developer only to the extent of Developer's interest in the Property.
GENERAL PROVISIONS AND WARRANTIES
As a material inducement to City to enter into this Agreement, Developer represents
and warrants as follows, which representations and warranties are made solely by
Developer and not by or on behalf of any partner of Developer:
9.1 Formation. Qualification and Compliance. Tiny Tim LP is a California
limited partnership. Developer is in compliance with all laws applicable to its business and
has obtained all approvals, licenses, exemptions and other authorizations from, and has
accomplished all filings, registrations and qualifications with, any Governmental Authority
that are necessary for the transaction of its business.
9.2 Execution and Performance of Inclusionary Loan Documents.
9.2.1 Developer has all requisite authority to execute and perform its
obligations under the Inelusionary Loan Documents.
9.2.2 The execution and delivery by Developer of, and the performance
by Developer of its obligations under, each Loan Document that has been authorized by all
necessary action and does not and will not:
(a) require any consent or approval not heretofore
obtained of any person having any interest in Developer;
(b) violate any provision of, or require any consent or
approval not heretofore obtained under, any articles of incorporation, by-laws or other
governing document applicable to Developer;
(c) result in or require the creation of any lien, claim,
charge or other right of others of any kind (other than under the Inclusionary Loan
Documents) on or with respect to any property now or hereafter owned or leased by
Developer;
(d) to the best of its knowledge, violate any provision of
any law presently in effect; or
(e) constitute a breach or default under, or permit the
acceleration of obligations owed under, any contract, loan agreement, lease or other
agreement or document to which Developer is a party or by which Developer or any of its
property is bound.
9.2.3 Developer is not in default, in any respect that is materially adverse
to the interests of City under the Inclusionary Loan Documents or that would have any
material adverse effect on the financial condition of Developer or the conduct of its
business, under any law, contract, lease or other agreement or document described in sub-
paragraph (d) or (e) of the previous subsection.
9.2.4 No approval, license, exemption or other authorization from, or
filing, registration or qualification with, any Governmental Authority is required which has
not been previously obtained in connection with:
(a) the execution by Developer of, and the performance
by Developer of its obligations under, the Inclusionary Loan Documents; and
(b) the creation of the liens described in the Inclusionary
Loan Documents.
9.3 Financial and Other Information. To the best of Developer's knowledge,
all financial information furnished to City by the Developer or any affiliate thereof with
respect to Developer in connection with the Loan (a) is complete and correct in all material
respects as of the date of preparation thereof, (b) accurately presents the financial condition
of Developer, and (c) has been prepared in accordance with generally accepted accounting
principles consistently applied or in accordance with such other principles or methods as
are reasonably acceptable to City. To the best of Developer's knowledge, all other
documents and information furnished to City by the Developer or any affiliate thereof with
respect to Developer, in connection with the Loan, are correct and complete insofar as
completeness is necessary to give the City accurate knowledge of the subject matter. To
the best of Developer's knowledge Developer has no material liability or contingent
liability not disclosed to City in writing and there is no material lien, claim, charge or other
right of others of any kinds (including liens or retained security titles of conditional
vendors) on any property of Developer not disclosed in such financial statements or
otherwise disclosed to City in writing.
9.4 No Material Adverse Change. There has been no material adverse change
in the condition, financial or otherwise, of Developer since the dates of the latest financial
statements furnished to City. Since those dates, Developer has not entered into any
material transaction not disclosed in such financial statements or otherwise disclosed to
City in writing.
9.5 Tax Liability. Developer has filed all required federal, state and local tax
returns and has paid all taxes (including interest and penalties, but subject to lawful
extensions disclosed to City in writing) other than taxes being promptly and actively
contested in good faith and by appropriate proceedings. Developer is maintaining adequate
reserves for tax liabilities (including contested liabilities) in accordance with generally
accepted accounting principles or in accordance with such other principles or methods as
are reasonably acceptable to City.
9.6 Governmental Requirements. To best of its knowledge, Developer is in
compliance with all laws relating to the Property and all Governmental Authority
approvals, including zoning, land use, planning requirements, and requirements arising
from or relating to the adoption or amendment of, any applicable general plan, subdivision
and parcel map requirement; environmental requirements, including the requirements of
the California Environmental Quality Act and the National Environmental Policy Act, and
the preparation and approval of all required enviromnental impact statements and reports;
use, occupancy and building permit requirements; and public utilities requirements.
9.7 Riizhts of Others. Developer is in compliance with all covenants,
conditions, restrictions, easements, rights of way and other rights of third parties relating
to the Property.
9.8 Litigation. There are no material actions or proceedings pending or, to the
best of the Developer's knowledge, threatened against or affecting Developer or any
property of Developer before any Governmental Authority, except as disclosed to City in
writing prior to the execution of this Agreement.
9.9 Bankruptcy. To the best of Developer's knowledge, no attachments,
execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending or threatened against Developer, nor are
any of such proceedings contemplated by Developer.
9.10 Information Accurate. To the best of Developer's knowledge, all
information, regardless of its form, conveyed by Developer to City, by whatever means, is
accurate, and correct in all material respects and is sufficiently complete to give City true
and accurate knowledge of its subject matter, and does not contain any material
misrepresentation or omission.
9.11 Conflicts of Interest. No member, official or employee of the City 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 this Agreement which affects his/her
personal interests or the interests of any corporation, partnership or association in which
he/she has a direct or indirect financial interest. The Developer warrants that it neither has
paid nor given, nor will pay or give, any third party any money or other consideration for
obtaining this Agreement.
9.12 Nonliability of City Officials and Employees. No member, official or
employee of the City shall be personally liable to the Developer in the event of any default or
breach by the City or for any amount which may become due to Developer or on any
obligations under the terms of this Agreement.
9.13 No Assignment. Developer expressly acknowledges and agrees that the City
has only agreed to assist the Developer as a means by which to induce the
construction/development of the Project. Accordingly, Developer further expressly
acknowledges and agrees that this Agreement is a personal right of Developer that is neither
negotiable, transferable, nor assignable except as set forth herein. Developer may assign some
or all of its rights under the Agreement only with the prior written consent of the City Project
Manager, except that no prior consent is necessary for an assignment by a limited partner of
Developer to an affiliate, for the inclusion of tax credit investors in the Agreement, or as
otherwise provided in the Inclusionary Deed of Trust.
9.14 Applicable Law. This Agreement shall be interpreted, governed and
enforced under federal and California state law with venue in Orange County, California.
9.15 Third Parties. This Agreement is made for the sole benefit of Developer and
the City and their successors and assigns, and no other person or persons shall have any rights
or remedies under or by reason of this Agreement or any right to the exercise of any right or
power of the City hereunder or arising from any default by Developer, nor shall the City owe
any duty whatsoever to any claimant for labor performed or materials furnished in connection
with the construction of the Property.
9.16 Control of Property. The parties acknowledge that the City has not at
anytime participated in any manner in the management or operation of the Property, and will
not so participate at any time hereafter.
10. CONDITIONS FOR CONSTRUCTION
10.1 Permits and Approvals. Developer shall diligently obtain all permits,
including all Building Permits, licenses, approvals, exemptions and other authorizations of
Governmental Agencies required in connection with the construction and conversion of the
Property.
10.2 Commencement and Completion of Construction. The construction of
the Project shall be considered complete for purposes of this Agreement only when (a) all
work described has been completed and fully paid for, and (b) all work requiring inspection
or certification by Governmental Authority has been completed and all requisite
certificates, approvals and other necessary authorizations (including required final
certificates of occupancy) have been obtained.
10.3 Change Orders. The contract for construction shall not be modified except
pursuant to change orders. All change orders in excess of $10,000:
(a) Shall be in writing, numbered in sequence, signed by
Developer and submitted to City prior to the proposed effectiveness thereof and
accompanied by any working drawings and a written narrative of the proposed change;
and,
(b) Shall be subject to the City Project Manager's prior written
approval.
10.4 Entry and Inspection. At all times prior to completion of the construction,
upon reasonable prior written notice and subject to reasonable job site safety riles, City
and its agents shall have (a) the right of free access to the Property and all sites away from
the Property where materials for the construction are stored, (b) the right to inspect all labor
performed and materials furnished for the construction, and (c) the right to inspect and
copy all documents pertaining to the construction.
10.5 [RESERVED]
10.6 Construction Information. From time to time during the course of the
construction, within ten (10) Business Days following City's written demand therefore,
Developer shall furnish requested reports of Project Costs, progress schedules and
contractors' costs breakdowns for the construction, itemized as to trade description and
item, showing the name of the contractor(s) and/or subcontractor(s), and including such
indirect costs as real estate taxes, legal and accounting fees, insurance, architects' and
engineers' fees, loan fees, interest during construction and contractors' overhead.
10.7 Protection Against Liens: Developer shall diligently file a valid Notice of
Completion upon completion of the construction, diligently file a notice of cessation in the
event of a cessation of labor on the construction for a period of thirty (30) days or more,
and take all actions reasonably required to prevent the assertion of claims of lien against
the Property. In the event that any claim of lien is asserted against the property or any stop
notice or claim is asserted against the City by any person furnishing labor or materials to
the Property, Developer shall immediately give written notice of the same to City and shall,
promptly and in any event within ten (10) Business Days after written demand therefor, (a)
pay and discharge the same, (b) effect the release thereof by delivering to City a surety
bond complying with the requirement of applicable laws for such release, or (c) take such
other action as City may require to release City from any obligation or liability with respect
to such stop notice or claim.
11. PROJECT COVENANTS
11.1 Affordable Rent Schedule. The rents shall be determined by the
regulatory agreements entered into between the Developer and the California Tax Credit
Allocation Committee governing the Project.
11.2 Qualification as Affordable Housing. As more particularly provided in the
Affordability Restrictions on Transfer of Property, Developer shall use, manage and
operate the Property in accordance with the requirements of California Health and Safety
Code section 50052.5 so as to qualify the housing on the Property as Affordable Housing
with Affordable Rents.
11.3 Local Preference. Local preference for Santa Ana residents and workers in
tenant selection shall be a requirement of the Project. Subject to the prohibition of
discrimination and the granting of preferences in housing occupancy imposed by federal
laws and regulations, the State of California, and by the City of Santa Ana Affordable
Housing Ftmds Policies and Procedures, the Developer shall use its best efforts to lease
units in the following order of priority:
First priority shall be given to persons who have been permanently displaced or
face pernanent displacement from housing in Santa Ana as a result of any of the
following:
a. A redevelopment project undertaken pursuant to California's Community
Redevelopment Law (Health & Safety Code Sections 33000, et seq.) --
applicable only to projects funded by the Low and Moderate Income
Housing Asset Fund.
b. Ellis Act, owner -occupancy, or removal permit eviction;
c. Earthquake, fire, flood, or other natural disaster;
d. Cancellation of a Housing Choice Voucher HAP Contract by property
owner; or
e. Governmental Action, such as Code Enforcement.
2. Second priority shall be given to persons who are either:
a. Residents of Santa Ana and/or
b. Working in Santa Ana at least 32 hours per week for at least the last 6
months.
11.4 Application and Financial Preparedness. Developer shall submit for
review and approval by the City a booklet to inform interested persons regarding minimum
application and eligibility requirements and to assist interested persons with application
and financial preparedness and eligibility for residency at the Project at the initial leasing
of the affordable units. ,Developer shall also work with the City to hold a minimum of two
(2) workshops to be coordinated by the Developer at least twelve (12) months prior to the
initial leasing of the affordable units.
11.5 Handicapped Accessibility. Developer shall comply with: (a) Section 504
of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR 8C; and (b) the
Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR 35-36
in order to make the Project readily accessible to and usable by individuals with disabilities.
11.6 Onsite Supportive Services, Programs and Amenities. Developer shall
provide residents of the Project access to discounted or no -cost onsite supportive services,
programming, and amenities that promote child development, youth development, and
economic mobility, and include, but are not limited to health and wellness services,
transportation services, social activities, and physical or recreational amenities as expressly
set forth in and required by the Affordability Restrictions on Transfer of Property.
11.7 Local Sourcing Plan. Developer agrees to make a good faith effort to
encourage contractors and suppliers to hire and procure locally. Prior to issuance of any
Building Permit, Developer shall develop and submit to the City a local sourcing plan for
the Project targeting, to the extent feasible, the hiring of qualified workers, construction
contractors, or the purchasing of goods locally within the City of Santa Ana.
11.8 Lead -Based Paint. Developer shall comply with the requirements, as
applicable of the Lead -Based Paint Poisoning Prevention Act.
11.9 Affirmative Marketing. Prior to the issuance of a Certificate of
Occupancy, Developer shall prepare and obtain City's approval of an affirmative
marketing program for leasing the affordable units at the Project.
11.10 Equal Opportunity and Fair Housing. Developer shall carry out the
construction and perform its obligations under this Agreement in compliance with all of
the state and federal laws and regulations regarding equal opportunity and fair housing.
Developer must also follow the requirements of California Health and Safety Code section
33435.
11.11 Property Standards. Developer shall cause the Property to rneet all
applicable local, state and federal codes and ordinances, including zoning ordinances.
Developer shall also cause the Property to meet the current edition of the Model Energy
Code published by the Council of American Building Officials.
11.12 Alternative Transportation and Energy Source, Resource
Conservation, and LEER Certification. In recognition of the City's desire to optimize
the energy efficiency of the Project, Developer agrees to consult with the Project design
team, a CABEC certified 2016 Certified Energy Analyst, a LEED AP Homes (low-rise and
mid -rise), LEED AP BD+C (high rise), National Green Building Standard (NGBS) Green
Verifier, or GreenPoint Rater (one person may meet both of these latter qualifications)
early in the Project design process to evaluate abuilding energy model analysis and identify
and consider energy efficiency or generation measures beyond those required by the TCAC
minimum construction standards.
11.13 Maintenance. At all times during the term of this Agreement, Developer
shall cause the Property and the Project to be maintained in a decent, safe and sanitary
manner, regardless of cause of the disrepair. Developer shallbe fully and solely responsible
for costs of maintenance, repair, addition and improvements. City, and any of its
employees, agents, contractors or designees, shall have the right to enter upon the Property
at reasonable times and in a reasonable manner to inspect the Project.
11.14 Property Maintenance Agreement. Developer shall execute a
maintenance agreement with the City prior to occupancy, which shall be recorded against
the Property, and which shall be in a form reasonably satisfactory to the City Attorney.
11.15 Management Plan. Prior to issuance of a Certificate of Occupancy,
Developer shall submit for the reasonable approval of the City a "Management Plan" that
sets forth in detail Developer's property management duties, a tenant selection process in
accordance with this Agreement, a security system and crime prevention program, the
procedures for the collection of rent, the procedures for eviction of tenants, the rules and
regulations for the Property and manner of enforcement, a standard lease form, an operating
budget, the identity and emergency contact information of the professional property
management company to be contracted with to provide onsite property management
services at the Property, and other matters relevant to the management of the Property.
11.16 Crime Free Housing. Developer shall work with City staff to develop a
crime free housing policy, procedure, and design plan.
11.17 Onsite Parking Management Plan. Developer shall provide onsite
parking for residents and visitors of the Project and actively monitor the parking demand
of the Project site. Developer shall continually monitor and take appropriate measures to
manage the parking demand of the Project site to mitigate the use of offsite parking spaces
on private or public properties and/or right-of-way. Prior to issuance of a Certificate of
Occupancy, Developer shall submit a Parking Management Plan which will include but
not be limited to: 1) a list of requirements for any tenants who park their vehicles on -site;
2) pre -conditions and ongoing conditions associated with all on -site parking; and 3) towing
policies and practices of management. Developer shall obtain approval from the City for
said plan.
11.18 Conflict of Interest. Developer shall comply with and be bound by the
conflict of interest provisions set forth in all applicable state regulations pertaining to
conflict of interest.
11.19 Monitoring. Developer shall allow the City to conduct periodic inspections
of each of the assisted units on the Property after the date of construction completion, with
reasonable notice. Developer shall cure any defects or deficiencies found by the City while
conducting such inspections within ten (10) business days of written notice thereof, or such
longer period as is reasonable within the sole discretion of the City.
11.20 Recertification of Tenant Income.
(a) Developer shall take all necessary steps to review the income of all
tenants prior to renting to them, as well as reviewing current tenants on an amival basis.
At a minimum, every fifth (5th) year, Developer shall require new original income
documents to be submitted by tenants.
(b) Developer shall allow the City to conduct periodic reviews of tenant
files and files relating to affirmative marketing and outreach to ensure the Project's
compliance with applicable regulations and guidelines.
(c) City assisted units continue to qualify as affordable housing despite a
temporary non-compliance caused by increases in the incomes of existing tenants if actions
satisfactory by the City are being taken to ensure that all vacancies are filled in accordance
with this section until the non-compliance is corrected.
11.21 Housing Opportunity Ordinance Requirements. Developer shall comply
with all other applicable requirements of the City's Housing Opportunity Ordinance,
including the following:
(a) Onsite Services: The Developer shall provide on -site services that
are available to the residents and shall report to the City annually
the services provided.
(b) Coordination with the WORD Center: The Developer and the
Property Manager shall coordinate with the City's WORD Center
to provide services and outreach to tenants, as well as provide
information on employment during the construction ofthe Project.
(c) Tenant Satisfaction Survey: The Developer shall complete and
submit to the City biennial tenant satisfaction surveys of tenants.
(d) Rental Inclusionary Housing Manual: The Developer shall also
maintain compliance with the City's Inclusionary Housing
Manual for Rental Projects.
11.22 Controlling Covenants. If there is a discrepancy between local, state and
federal law with regard to any of the aforementioned covenants, the more stringent shall
apply.
12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND
REPAIR OF PROPERTY
12.1 Maintenance. Developer shall maintain the Property (and all abutting
grounds, sidewalks, roads, parking and landscape areas which Developer is otherwise
required to maintain) in good condition and repair; shall operate the Property in a business-
like manner; shall prudently preserve and protect its own as well as the City's interests in
connection with the Property; shall not commit or permit any waste or deterioration of the
Property (except for normal wear and tear); shall not abandon any portion of the Property
or leave the Property unguarded or unprotected; and shall not otherwise act, or fail to act,
in such a way as to unreasonably increase the risk of any damage to the Property or of any
other impairment of City's interests under the Inclusionary Loan Documents. Without
limiting the generality of the foregoing, and except as otherwise agreed by City in writing
from time to time, Developer shall promptly and faithfully perform and observe each of
the following provisions:
12.1.1 Alterations and Repair. Developer shall not remove, demolish or
materially alter any Improvement without City's prior consent, except to make non-
structural repairs which preserve or increase the Property's value, and shall promptly
restore, in a good and professional manner, any Improvement (or other aspect or portion of
the Property) that is damaged or destroyed from any cause.
12.2 Compliance. Developer shall comply with all laws and requirements of
Governmental Authority (including, without limitation, all requirements relating to the
obtaining of Governmental Authority approvals), all Governmental Authority approvals
and all rights of third parties, relating to Developer, the Property or Developer's business
thereon.
12.3 Taxes and Impositions. Subject to any property tax abatement available
to the Developer, Developer shall pay, prior to delinquency, all of the following
(collectively, the "Impositions"): (a) all general and special real property taxes and
assessments imposed on the Property; (b) all other taxes and assessments and charges of
every kind that are assessed upon the Property (or upon the owner and/or operator of the
Property) and that create or may create a lien upon the Property (or upon any personal
property or fixtures used in connection with the Property), including, without limitation,
non -governmental levies and assessments pursuant to applicable covenants, conditions or
restrictions; and (c) all license fees, taxes and assessments imposed on City (other than
City's income or franchise taxes) which are measured by or based upon (in whole or in
part) the amount of the obligations secured by the Property. If permitted by law, Developer
may pay any Imposition in installments (together with any accrued interest).
12.3.1 Right to Contest. Developer shall not be required to pay any
Imposition so long as: (a) its validity is being actively contested in good faith and by
appropriate proceedings; (b) Developer has demonstrated to City's reasonable satisfaction
that leaving such Imposition unpaid pending the outcome of such proceedings could not
result in conveyance of the Property in satisfaction of such Imposition or otherwise impair
the City's interests under the Inclusionary Loan Documents; and, (c) Developer has
furnished City with a bond or other security satisfactory in an amount not less than 100%
of the applicable claim (including interest and penalties).
12.3.2 Evidence of Payment. Upon demand by City from time to time,
Developer shall deliver to City, within thirty (30) days following the due date of any
Imposition, evidence of payment reasonably satisfactory to City.
12.3.3 Books and Records. Developer shall maintain complete books of
account and other records reflecting its operations (in connection with any other businesses
as well as with respect to the Property), in accordance with generally accepted accounting
principles applied on a consistent basis or in accordance with such other principles or
methods as are reasonably acceptable to City.
12.4 [RESERVED]
12.5 Proiect Operating Budget. Developer must promptly deposit all Gross
Revenues (as defined in the Project Note) directly into a segregated depository account
established exclusively for the Project ("Project Operating Account") pursuant to the
agreement with the property management company. Withdrawals from the Project
Operating Account may be made only in accordance with the provisions of this Agreement
and the approved Project Budget, as it may be revised from time to time with prior City
approval. Developer may make withdrawals from the Project Operating Account solely
for the payment of Operating Expenses (as defined in the Project Note). Withdrawals from
the Project Operating Account for other purposes may be made only with the prior written
approval of the City. Notwithstanding anything to the contrary contained herein, neither
capital contributions from the Investor Limited Partner or proceeds from any loans made
to the Developer (other than loans to address operating deficits pursuant to the terms of the
Partnership Agreement) shall be deposited in the Project Operating Account.
12.6 Replacement Reserve Account. Developer must establish or cause to be
established a segregated replacement reserve depository account ("Replacement Reserve
Account") no later than the commencement of the permanent financing period for the
Project. Developer must make monthly deposits from project income into the Replacement
Reserve Account in accordance with Developer's Project Budget, and the requirements of
the Senior Lender, as amended from time to time. Developer may withdraw funds from
the Replacement Reserve Account solely to fund capital improvements for the Project and
as otherwise is permitted under the Senior Loan Documents and including, but not limited
to, capital repair or replacement, such as replacing or repairing structural elements,
furniture, fixtures or equipment of the Project that are reasonably required to preserve the
Project. Developer may not withdraw funds from the Replacement Reserve Account for
any other purpose without the prior written approval of the City.
13. NONDISCRIMINATION COVENANTS
13.1 Obligation to Refrain from Discrimination. Developer covenants and
agrees that:
(a) In Use of Property. There shall be no discrimination against or
segregation of any person, or group of persons, on account of race, color, creed, disability,
religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the Property, nor shall Developer or any person
claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees, or vendors of the Property.
(b) In Affordable Housing Restrictions. The foregoing covenant
shall: (a) be included in the Affordability Restrictions on Transfer of Property; (b) run with
the land; and, (c) remain effective for the temp of the Agreement (for 55 years).
(c) In Employment. In construction on the Property, Developer shall
not discriminate against any employee or applicant because of race, color, creed, religion,
sex, marital status, disability, national origin, or ancestry. Developer shall take affirmative
action to ensure that applicants are employed, and that employees are treated during
employment, without regard to their race, color, disability, creed, religion, sex, marital
status, disability, national origin, or ancestry.
(d) In all Contracts. Developer shall cause the foregoing covenants to
be inserted in all contracts for any work covered by this Agreement so that such provisions
will be binding upon each contractor for the benefit of City, provided that the foregoing
covenant shall not apply to contracts or subcontracts for standard commercial supplies or
raw materials.
14. ENVIRONMENTAL MATTERS
14.1 Representation and Warranty. Except as disclosed in writing to the City,
Developer has no knowledge: (a) of the presence on, under or about the Property, now or
in the past, of any Hazardous Materials, or of the transportation to or from the Property of
any Hazardous Materials; (b) that asbestos or polychlorinated biphenyls (PCBs) are
contained in or stored on the Property; or, (c) that there are any underground storage tanks
located in, on or under the Property.
14.2 Compliance with Environmental Laws. Developer shall: (a) comply with
all environmental laws and environmental permits applicable to the construction of the
Property; (b) immediately pay or cause to be paid all costs and expenses incurred by reason
of such compliance; (c) keep the Property free and clear of any environmental claims or
liens imposed pursuant to any environmental law; and, (d) obtain and renew all
environmental permits required for ownership or use of the Property.
14.3 Presence of Hazardous Materials. Developer shall not, and shall not
permit anyone else to, generate, use, treat, store, handle, release, or dispose of Hazardous
Materials on the Property, or transport or permit the transportation of Hazardous Materials
to or from the Property, except for de minimis quantities used at the Property in compliance
with all applicable environmental laws and required in connection with the routine
operation and maintenance of the Property.
14.4 Notice of Environmental Matters. Developer shall immediately advise City
in writing of any of the following: (a) any pending or threatened environmental claim
against Developer or the Property; or (b) any condition or occurrence that: (i) results in
noncompliance with any applicable environmental law; (ii) could reasonably be anticipated
to cause the Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of the Property under any environmental Law; or, (iii) could reasonably be
anticipated to form the basis of an environmental claim against the Property or Developer.
14.5 Environmental Indemnification by the Developer. Developer agrees to
defend, indemnify and hold harmless the City and its respective officers, directors,
employees and agents (collectively the "Indemnitees") from and against any and all
obligations (including removal and remediation), losses, claims (including third party
claims), suits, judgments, liabilities, penalties, damages (including consequential and
punitive damages), costs and expenses (including consultants, and attorneys' fees) of
whatever kind or nature whatsoever that may at any time be incurred by, imposed on, or
asserted against the Indemnitees directly or indirectly based on, or arising or resulting from
the actual or alleged presence of Hazardous Materials on the Property, other than resulting
from the gross negligence or willful misconduct of any Indemnitee.
15. OTHER AFFIRMATIVE COVENANTS
While any obligation of Developer under the Inclusionary Promissory Note or
Inclusionary Deed of Trust remain outstanding, the following provisions shall apply,
except to the extent that City Project Manager otherwise consents in writing:
15.1 Existence. The sole member of Developer's managing general partner shall
maintain its existence in good standing under the laws of the State of California, and
Developer shall provide documentation of such status annually to the City.
15.2 Protection of Lien. Developer shall maintain the lien of the Inclusionary
Deed of Trust as a deed of trust on the Property in the same priority as at the
commencement of construction and take all actions to execute and deliver to City all
documents, reasonably required by City from time to time in connection therewith.
15.3 Notice of Certain Matters. Developer shall give notice to City, within ten
(10) days of Developer's learning thereof, of each of the following:
(a) any filed litigation or claim affecting or relating to the
Property and involving an amount in excess of $5,000; and any litigation or claim that
might subject Developer or any general partner to liability in excess of $5,000, whether
covered by insurance or not;
(b) any dispute between Developer and a Governmental
Authority relating to the Property, the adverse determination of which might materially
affect the Property;
(c) any change in Developer's principal place of business;
(d) any aspect of the Improvements that is not in substantial
conformity with the plans or code;
(e) any event which after the giving of all required notices and
the expiration of all applicable cure periods, would constitute an Event of Default;
M any material default by Developer or any other party under
any Senior Loan document, or the receipt by Developer of any notice of default under any
Senior Loan document;
(g) the creation or imposition of any mechanics' or
materialmans' lien or other lien against the Property which might materially affect the
Property, which is not bonded over or released; and/or
(h) any material adverse change in the financial condition of
Developer.
15.4 Further Assurances. Developer shall execute and acknowledge (or cause
to be executed and acknowledged) and deliver to City all documents, and take all actions,
reasonably required by City from time to time to confirm the rights created or now or
hereafter intended to be created under the Inclusionary Loan Documents; to protect and
further the validity, priority and enforceability of the Inclusionary Deed of Trust; to subject
to the Deed of Trust any property intended by the terns of any Loan Document(s) to be
covered by the Inclusionary Deed of Trust or otherwise to carry out the purposes of the
Inclusionary Loan Documents and the transactions contemplated thereunder.
15.5 Annual Financial Statements. Developer shall deliver the following to
City within one hundred and fifty (150) days after the end of each Calendar Year: (a) a
certified public accountant reviewed balance sheet for Developer as of the end of such
Calendar Year and a certified public accountant reviewed statement of profit and loss for
Developer and for Developer's operations in connection with the Property for such
Calendar Year, together with all supporting schedules; (b) a certificate of such certified
public accountant that such documents were reviewed by such certified public accountant
in accordance with generally accepted accounting principles and otherwise comply with
generally accepted accounting principles review requirements; and, (c) a certificate of
Developer's chief financial officer that such documents: (i) were prepared in accordance
with generally accepted accounting principles applied on a consistent basis or in
accordance with such other principles or methods as are reasonably acceptable to City; (ii)
fairly present Developer's financial condition; (iii) show all material liabilities, direct and
contingent; and, (iv) fairly present the results of Developer's operations. Developer shall
also provide the City with any other annual audit reports issued by other monitoring
agencies. Developer shall include in said reports a document in the "Form of Residual
Receipts Report" attached hereto as Exhibit G and incorporated herein.
15.6 Audits and Access to Records. Developer agrees that City or any of its
authorized representatives shall have the right of access, upon reasonable notice and during
normal business hours, to any books, documents, papers, or other records of Developer that
are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts
or transcripts. Developer will maintain all books and records pertaining to this Agreement
for a period of not less than five (5) years after all matters pertaining to this Agreement
(i.e., audit, disputes or litigation) are resolved in accordance with applicable federal or state
laws, regulations or policies, and when a period of affordability or recapture applies to
Developer's activities, for a period of not less than five (5) years after the affordability or
recapture period ends.
15.7 Termite Inspection Report. Developer shall deliver a termite report
pertaining to the Property to the City every fifth (5t) year following the date of issuance
of the Certificate of Occupancy.
16. OTHER COVENANTS
While any obligation of Developer under the Inclusionary Note or Inclusionary
Deed of Trust remain outstanding, the following provisions shall apply, except to the extent
that City Project Manager otherwise consents in writing:
16.1 Default on Senior Loan. Developer shall not default on any of the Senior
Loan Documents, provided however, that Developer shall have such period as is provided
in the Senior Loan Documents during which to effectuate a cure.
16.2 Sale or Lease of Property. Unless and until Developer has received a
Certificate of Completion for the construction from City, Developer shall not sell, lease
(other than to tenants meeting the requirements set forth in this Agreement), sublease or
otherwise transfer all or any part of the Property or any interest therein without the prior
written consent of the City Project Manager, which consent may be withheld in the City
Project Manager's reasonable discretion. In connection with the foregoing consent
requirements, Developer acknowledges that City relied upon Developer's particular
expertise in entering into this Agreement and continues to rely on such expertise to ensure
the satisfactory completion of the construction.
Notwithstanding anything to the contrary contained herein, a "transfer" shall not
include: (i) a transfer of a General Partner's interest in Developer when made in connection
with the exercise by the Developer's limited partner (the "Limited Partner") of its rights
upon a default by a General Partner tinder the Developer's Partnership Agreement (the
"Partnership Agreement") or upon a General Partner's withdrawal in violation of the
Partnership Agreement, so long as the removal and substitution of the defaulting General
Partner is made within thirty (30) days of such default or, if such removal and substitution
cannot reasonably be completed within thirty (30) days, so long as the Limited Partner
commences to take action to remove and substitute the General Partner within a reasonable
period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of
the Property to one or more of the General Partners pursuant to the purchase option, as
provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner's
interest in connection with a default by the Limited Partner under and in accordance with
the Partnership Agreement; and, (iv) any sale, transfer or other disposition of the Limited
Partner's interest in the Developer or of an interest in the Limited Partner.
16.3 Transfer of Developer Limited Partner's Interest. Notwithstanding
anything to the contrary in this Agreement or the Loan Documents, no consent shall be
required of the City (and it shall not be deemed a default or an Event of Default under any
of the Loan Documents), in connection with the transfer and/or the assignment by the
Developer's limited partner of its interest in the Developer to an entity controlled or
managed by an entity which is related to or under common control with the Developer's
limited partner.
16.4 Removal of Developer's General Partner. Notwithstanding anything to
the contrary in this Agreement or the Loan Documents, the removal and/or replacement of
a General Partner for cause in accordance with the Partnership Agreement shall not require
the consent of the City and shall not shall not constitute a default or an Event of Default
under this Agreement or the Loan Documents or accelerate the maturity of the Inclusionary
Loan. If the Developer's limited partner exercises its right to remove a General Partner,
City will not unreasonably withhold its consent to the substitute general partner; provided
however, the consent of either the City shall not be required if the substitute general partner
is an affiliate of the Developer's limited partner. The substitute general partner shall
assume all of the rights and obligations of the removed general partner hereunder.
17. CERTIFICATE OF COMPLETION
Upon satisfactory completion of the construction and upon the request of
Developer, or at its own election, the City shall issue a Certificate of Completion. Such
Certificate of Completion shall be, and shall so state, conclusive determination of
satisfactory completion of the construction.
If City declines to famish a Certificate of Completion after written request from
Developer, the City Project Manager shall, within thirty (30) days after receipt of the
request, provide Developer with a written statement of the reasons therefore. The statement
shall contain a description of the action Developer must take to obtain a Certificate of
Completion. If the reason therefore is that the Developer has not completed a minor portion
of the construction, City may, in its sole and absolute discretion, issue the Certificate of
Completion upon the posting with City of a bond or other form of security acceptable to
the City Project Manager in the amount of the fair value of the uncompleted work.
A Certificate of Completion is not evidence of compliance with or satisfaction of
the Inclusionary Loan Documents or any obligation of Developer to any other party
whatsoever, including any holder of a mortgage or deed of trust. A Certificate of
Completion is not "notice of completion" referred to in Section 3093 of the California Civil
Code.
18. INDEMNIFICATION
18.1 Nonliability of City. Developer acknowledges and agrees that:
(a) The relationship between Developer and the City is and shall
remain solely that of Developer and lender. City neither undertakes nor assumes any
responsibility to review, inspect, supervise, approve (other than for aesthetics) or inform
Developer of any matter in connection with the construction, including matters relating to:
(i) the perfonnance of the construction work; (ii) architects, contractors, subcontractors and
materialmen, or the workmanship of or materials used by any of them; or, (iii) the progress
of the construction; and Developer shall rely entirely on its own judgment with respect to
such matters and acknowledges that any review, inspection, supervision, approval or
infonnation supplied to Developer by City in connection with such matters is solely for the
protection of City, and that neither Developer nor any third party is entitled to rely on it;
(b) Notwithstanding any other provision of any Loan Document: (i)
the City is not a partner, joint venture, alter -ego, manager, controlling person or other
business associate or participant of any kind of Developer, and City does not intend to ever
assume any such status; (ii) City's activities in connection with the Loan shall not be
"outside the scope of the activities of a lender of money" within the meaning of California
Civil Code Section 3434, as modified or recodified from time to time, and City does not
intend to ever assume any responsibility to any person for the quality or safety of the
Property; and, (iii) City shall not be deemed responsible for or a participant in any acts,
omissions or decisions of Developer;
(c) City shall not be directly or indirectly liable or responsible for any
loss or injury of any kind to any person or property resulting from any construction on, or
occupancy or use of, the Property, whether arising from: (i) any defect in any building,
grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of
Developer or any of Developer's agents, employees, independent contractors, licensees or
invitees; or (iii) any accident on the Property or any fire or other casualty or hazard thereon;
and,
(d) By accepting or approving anything required to be performed or
given to City under the Loan Documents, including any certificate, financial statement,
survey, appraisal or insurance policy, City shall not be deemed to have warranted or
represented the sufficiency or legal effect of the same, and no such acceptance or approval
shall constitute a warranty or representation by City to anyone.
18.2 Indemnity. Developer shall defend (by counsel reasonably satisfactory to
City), indemnify and save and hold harmless the Indemnitees from and against all claims,
damages, demands, actions, losses, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees and court costs) arising from or relating to: (i) this
Agreement; (ii) the malting of the Loan(s); (iii) a claim, demand or cause of action that any
person has or asserts against Developer; (iv) any act or omission of Developer, any
contractor, subcontractor or material supplier, engineer, architect or other person with
respect to the Property; or, (vi) the ownership, occupancy or use of the Property.
Notwithstanding the foregoing, Developer shall not be obligated to indemnify City with
respect to the consequences of any act of gross negligence or willful misconduct of City.
Developer's obligations under this Section shall survive the cancellation of the Inclusionary
Promissory Note, release and reconveyance of the Inclusionary Deed of Trust, issuance of
the Certificate of Completion, and termination of this Agreement.
18.2.1 Notwithstanding the foregoing, neither Developer, nor any of its
partners, shall be personally liable for any indemnification obligation hereunder that would
result as the repayment of principal and/or interest under the Loan.
18.3 Reimbursement of City. Developer shall reimburse City immediately
upon written demand for all costs reasonably incurred by City (including the reasonable
fees and expenses of attorneys, accountants, appraisers and other consultants, whether the
same are independent contractors or employees of City) in connection with the
enforcement of the Loan Documents and all related matters, including all claims, demands,
causes of action, liabilities, losses, commissions and other costs against which City is
indemnified under the Loan Documents. Such reimbursement obligations shall bear
interest from the date occurring twenty (20) days after City gives written demand to
Developer and shall be secured by the Inclusionary Deed of Trust. Such reimbursement
obligations shall survive the cancellation of the Loan Note, release and reconveyance of
the Inclusionary Deed of Trust, issuance of a Certificate of Completion, and termination of
this Agreement
19. INSURANCE, CASUALTY AND CONDEMNATION
19.1 Policies Required. While any obligation of Developer under the Loan
Documents remains outstanding, Developer shall maintain at Developer's sole expense,
with insurers either: (i) admitted in California; or, (ii) are not admitted to California but
have an A.M. Best Rating of "A" or above and reasonably approved by the City, the
following policies of insurance in form and substance reasonably satisfactory to the City
Attorney:
(a) worker's compensation insurance and any other insurance required
by law in connection with the constriction;
(b) prior to commencement and following completion of the
construction, fire and hazard "all risk" insurance covering 100% of the replacement cost of
the Improvements in the event of fire, lightning, windstorm, vandalism, malicious mischief
and all other risks normally covered by "all risk" coverage policies in the area where the
Property is located (including loss by flood if the Property is in an area designated as
subject to the danger of flood);
(c) upon commencement of the construction and at all times prior to
completion of the construction, builder's risk -all risk insurance covering 100% of the
replacement cost of all Improvements (including offsite materials) during the course of
construction in the event of fire, lightning; windstorm, vandalism, earthquake, malicious
mischief and all other risks normally covered by "all risk" coverage policies in the area
where the Property is located (including loss by flood if the Property is in an area
designated as subject to the danger of flood);
(d) public liability insurance in amounts reasonably required by City
from time to time, and in no event less than $1,000,000 for "single occurrence;"
(e) property damage insurance in amounts reasonably required by the
City from time to time, and in no event less than $1,000,000; and
(f) any other insurance reasonably required by City that is available at
commercially reasonable rates.
All such insurance shall provide that it may not be canceled or materially modified
without thirty (30) days prior written notice to City. The policies required under
subparagraphs (b) and (c) shall include a "lender's loss payable endorsement" in form and
substance satisfactory to City, showing the City as encumbrance. The City shall be named
as an additional insured in the policies required under subparagraphs (d) and (e).
Certificates of insurance for the above policies (and/or original policies, if required by City)
shall be primary and delivered within ten (10) days after demand therefore, and prior to
start of any constriction work. All policies insuring against damage to the Improvements
shall contain an agreed value clause sufficient to eliminate any risk of co-insurance. No
less than thirty (30) days prior to the expiration of each policy, Developer shall deliver to
City evidence of renewal or replacement of such policy reasonably satisfactory to the City
Attorney.
19.2 City Attorney May Modify, The City Attorney may modify the type and
amounts of insurance required pursuant to this Section.
19.3 Claims and Proceedings. Developer shall give City immediate notice
of any material casualty to any portion of the Property, whether or not covered by
insurance, and of the initiation or threatened initiation of any proceeding for the
condemnation or other taking for public or quasi -public use of any portion of the Property
(collectively, "Condemnation"), and shall provide City with copies of all documents which
pertain to any such casualty or Condemnation. Developer shall take all action reasonably
required by City in connection therewith to protect the interests of Developer and/or City,
and City shall be entitled (without regard to the adequacy of its security) to participate in
any action, claim, adjustment or proceeding and to be represented therein by counsel of its
choice. Developer shall not settle, adjust, or compromise any claim, action, adjustment or
proceeding without prior written approval, which approval shall not be unreasonably
withheld or delayed.
19.4 Delivery of Proceeds to City. In the event that, notwithstanding the
"lender's loss payable endorsement" requirement set forth above, the proceeds of any
casualty insurance policy described herein are paid to Developer, Developer shall, subject
to any superior rights of the Senior Lender, deliver such proceeds to the City immediately
upon receipt.
19.5 Application of Casualty Insurance Proceeds. Any proceeds collected (the
"Proceeds") under any casualty insurance policy described in this Agreement shall be
disbursed to Developer as provided below, but only upon fulfillment of each of the
following conditions (the "Restoration Conditions") within ninety (90) days (unless
extended by mutual agreement of Developer and City) following the occurrence of the
receipt of the Proceeds:
(a) Developer shall demonstrate to City's reasonable satisfaction
that the Proceeds (together with amounts deposited by Developer pursuant to subparagraph
(b) and any undisbursed loan and tax credit proceeds available to the Developer) will be
adequate to repair the Improvements and to restore the fair market value of the Property,
within a time period reasonably determined by City, to at least the value it had immediately
prior to sustaining the damage. Such demonstration shall include delivery to City of (i)
plans and specifications reasonably satisfactory to City; and, (ii) a construction contract in
form and content, and with a contractor, reasonably satisfactory to City;
(b) To the extent that the Proceeds (together with all
undisbursed Loan proceeds and any other financing proceeds available to the Developer)
are insufficient to accomplish the restoration required above, Developer shall deliver to
City funds (the "Shortfall Funds") in the amount of such shortfall, which funds shall be
assigned to City as security for Developer's obligation hereunder and held and disbursed
in the same mariner as the Proceeds;
(c) Developer shall execute such documents as City reasonably
requires to evidence and secure Developer's obligation to use all amounts disbursed for the
diligent restoration of the Property; and,
(d) No Event of Default shall remain uncured.
19.6 Method of Disbursement and Undisbursed Funds. Any Proceeds and
Shortfall Funds to be disbursed to Developer shall be held by the Senior Lender if a Senior
Loan is outstanding, and disbursed in accordance with the Senior Loan Documents or, if
no Senior Loan, then held by the City and disbursed in accordance with the City's then
customary disbursement procedures and related provisions. Any amounts remaining
undisbursed following completion of such restoration shall be returned to Developer up to
the amount of any Shortfall Funds deposited by Developer, and any other amounts
remaining shall either be paid to Developer or applied by the Senior Lender, or the City in
the absence of a Senior Loan, as the case may be against any obligations that are secured
by a lien on the Property, as they elect in their sole and absolute discretion.
19.7 Failure to Satisfy Conditions. hi the event that Developer fails to fulfill
the Restoration Conditions within one hundred and eighty (180) days (unless extended
pursuant to Section 19.5) following the date Proceeds are received, the Proceeds shall be
applied by City against any obligations to City that are secured by a lien on the Property,
and the selection of which such obligations to apply the Proceeds against shall be made by
City in its sole and absolute discretion.
19.8 Restoration. Nothing in this Section 19 shall be construed to excuse
Developer from repairing and restoring all damage to the Property in accordance with other
Loan Document provisions, regardless of whether insurance proceeds are available or
sufficient.
19.9 Condemnation; Treatment of Compensation. Subject to any
superior rights of Senior Lender, Developer hereby assigns to the City, as security for all
obligations to City secured by a lien on the 'Property, all amounts payable to Developer in
connection with any Condemnation, and any proceeds of any related settlement
(collectively, "Compensation"). Subject to any superior rights of Senior Lender, Developer
shall deliver such remaining Compensation to City immediately upon receipt. If the taking
results in a loss of the Property to an extent that, in the reasonable opinion of City, renders
or is likely to render the Property not economically viable or if, in City's reasonable
judgment Developer's security is otherwise impaired, City may apply the Compensation
received due to judgment or settlement in connection with any condemnation or other
taking to reduce the unpaid obligations secured in such order as City may determine, and
without any adjustment in the amount or due dates of payments due under the Note. If so
applied, any award in excess of the unpaid balance of the Note and other sums due to City
shall be paid to Developer or Developer's assignee. City shall have no obligation to take
any action in connection with any actual or threatened condemnation or other proceeding.
19.9.1 Notwithstanding the foregoing, as long as the value of City's liens
are not impaired, any condemnation proceeds may be used by the Developer for repair
and/or restoration of the Project.
19.9.2 Notwithstanding the foregoing, during the tax credit compliance
period for the Project, as determined under Section 42 of the Internal Revenue Code, any
condemnation proceeds may be used by the Developer for repair and/or restoration of the
Project.
19.10 Waiver of Subroeation. Developer hereby waives all rights to recover
against the City (or any officer, employee, agent or representative of City) for any loss
incurred by Developer from any cause insured against or required by any Loan Document,
to be insured against; provided, however, that this waiver of subrogation shall not be
effective with respect to any insurance policy if the coverage thereunder would be
materially reduced or impaired as a result. Developer shall use its best efforts to obtain
only policies that permit the foregoing waiver of subrogation.
20. DEFAULTS AND
20.1 Events of Default. The occurrence of any of the following, whatever the
reason therefore which is not cured, shall constitute an Event of Default by Developer:
(a) Developer fails to make any payment of principal or interest
under the Inclusionary Promissory Note when due, and such failure is not cured within ten
(10) Business Days after Developer's receipt of written notice that such payment was not
received when due;
(b) Developer fails to perform any other obligation for the
payment of money under any Loan Document, and such failure is not cured within ten (10)
Business Days after Developer's receipt of written notice that such obligation was not
performed when due;
(e) Developer fails to perform any obligation (other than the
obligations described in subparagraphs (a) and (b) above) under any Loan Document, and
such failure is not cured within thirty (30) days after Developer's receipt of written notice
that such obligation was not performed; provided that, if cure cannot reasonably be effected
within such thirty (30)-day period, such failure shall not be an Event of Default so long as
Developer (in any event, within ten (10) Business Days after receipt of such notice)
commences to cure, and thereafter diligently (in any event within ninety (90) days after
receipt of such notice) prosecutes such cure to completion;
(d) Any representation or warranty in any Loan Document
proves to have been incorrect in any material respect when made;
(e) The Property is materially damaged or destroyed by fire or
other casualty unless Developer fulfills the Restoration Conditions set forth in the
insurance provisions of this Agreement within one hundred eighty (180) days (unless
extended pursuant to Section 19.5) and thereafter diligently restores the Property in
accordance with this Agreement;
(f) Work on the construction ceases for thirty (30) consecutive
days for any reason (other than governmental orders, decrees or regulations, acts of God or
any other deity, strikes or other causes beyond Developer's reasonable control);
(g) Developer is enjoined or otherwise prohibited by any
Governmental Authority from constructing and/or occupying the Improvements and such
injunction or prohibition continues unstayed for sixty (60) days or more for any reason;
(h) Developer is dissolved, liquidated or terminated, or all or
substantially all of the assets of Developer are sold or otherwise transferred without the
City Project Manager's prior written consent;
(i) Developer is the subject of an order for relief by a
bankruptcy court, or is unable or admits its inability to pay its debts as they mature, or
makes an assignment for the benefit of creditors; or Developer applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or any part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without the application
or consent of Developer and the appointment continues undischarged or unstayed for
ninety (90) days; or Developer institutes or consents to any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, custodianship,
conservatorship, liquidation, construction or similar proceeding relating to it or any part of
its property; or any similar proceeding is instituted without the consent of Developer and
continues undismissed or unstayed for ninety (90) days; or any judgment, writ, warrant of
attachment or execution, or similar process is issued or levied against any property of
Developer and is not released, vacated or fully bonded within ninety (90) days after its
issue or levy; or
0) (i) any of the Senior Loan Documents is revoked or
terminated, in whole or in part and for any reason (except due to repayment of such loans),
without the City Project Manager's prior written consent, or (ii) Developer defaults or
otherwise fails to perform any of its duties or obligations under or in connection with any
of the Senior Loan Documents, subj ect to all applicable notice and cure periods, or (iii) any
of the Senior Loan Documents is amended, supplemented or otherwise modified without
City's prior written consent, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary contained herein, City hereby agrees that
any cure of any default made or tendered under this Agreement or under the other
Inclusionary Loan Documents by Developer's Limited Partner shall be deemed to be a cure
by Developer and shall be accepted or rejected on the same basis as if made or tendered by
Developer.
20.2 Remedies Upon Default. Upon the occurrence of any Event of Default,
City may, at its option and in its absolute discretion, do any or all of the following:
(a) By written notice to Developer, declare the principal of all amounts
owing under the Loan Documents, together with all accrued interest and other amounts
owing in connection therewith, to be immediately due and payable, regardless of any other
specified due date; provided that any Event of Default described in Section 20.1 (e) shall
automatically, without notice or other action on City's part, cause all such amounts to be
immediately due and payable;
(b) In its own right or by a court -appointed receiver, take possession of
the Property, enter into contracts for and otherwise proceed with the completion of the
construction by expenditure of its own funds;
(c) Exercise any of its rights under the Loan Documents and any rights
provided by law, including, without limitation, the right to seek specific performance and
the right to foreclose on any security and exercise any other rights with respect to any
security, all in such order and manner as City elects in its sole and absolute discretion; and,
(d) Suspend or terminate the award of City funds if Developer fails to
comply with any term of such award.
20.3 Cumulative Remedies: No Waiver. City's rights and remedies under the
Loan Documents are cumulative and in addition to all rights and remedies provided by law.
The exercise by City of any right or remedy shall not constitute a cure or waiver of any
default, nor invalidate any notice of default or any act done pursuant to any such notice,
nor prejudice the City in the exercise of any other right or remedy. No waiver of any default
shall be implied from any omission by City to take action on account of such default if
such default persists or is repeated. No waiver of any default shall affect any default other
than the default expressly waived, and any such waiver shall be operative only for the time
and to the extent stated. No waiver of any provision of any Loan Document shall be
construed as a waiver of any subsequent breach of the same provision. City's consent to or
approval of any act by Developer requiring further consent or approval shall not be deemed
to waive or render unnecessary City's consent to or approval of any subsequent act. The
City's acceptance of the late performance of any obligation shall not constitute a waiver by
City of the right to require prompt performance of all further obligations; City's acceptance
of any performance following the sending or filing of any notice of default shall not
constitute a waiver of either party's right to proceed with the exercise of its remedies for
any unfulfilled obligations; and City's acceptance of any partial perfon mane shall not
constitute a waiver by City of any rights.
21. MISCELLANEOUS
21.1 Obligations Unconditional and Independent. Notwithstanding the
existence at any time of any obligation or liability of City to Developer, or any other claim
by developer against City, in connection with the Loan or otherwise, Developer hereby
waives any right it might otherwise have: (a) to offset any such obligation, liability or claim
against Developer's obligations under the Loan Documents; or, (b) to claim that the
existence of any such outstanding obligation, liability or claim excuses the nonperformance
by Developer of any of its obligations under the Loan Docrnnents.
21.2 Notices. All notices, demands, approvals and other communications
provided for in the Loan Documents shall be in writing and be delivered to the appropriate
party by personal service or U.S. mail at its address as follows:
If to Developer: Tiny Tim, LP
c/o Community Development Partners
3416 Via Oporto, Suite 301
Newport Beach, CA 92663
Attention: Kyle Paine
With a copy to: Law Offices of Patrick R. Sabelhaus
1724 10"' Street, Suite 110
Sacramento, CA 95811
Attention: Stephen A. Strain, Esq.
With a copy to: Tiny Tim Mercy House CHDO LLC
P.O. BOX 1905
Santa Ana, CA 92702
Attn: Larry Haynes
With a copy to: IH CDP Partnership LLC
4 Venture, Suite 295
Irvine, CA 92618
Attention: Philip Wood
With a copy to: R4 TTCA Acquisition LLC
c/o R4 Capital LLC
780 Third Avenue, 16th Floor
New York, New York 10017
Attention: Marc Schnitzer
With a copy to: Frost Brown Todd LLC
400 West Market Street, Suite 3200
Louisville, KY 40202
Attention: Amy Curry, Esq.
If to City: Community' Development Agency of the City of Santa Ana
Housing Manager
20 Civic Center Plaza (M-26)
P.O. Box 1988
Santa Ana, California 92702
With a copy to: Office of the City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor (M-29)
Santa Ana, California 92702
Addresses for notice may be changed as required by written notice to all other
parties. All notices personally served shall be effective when actually received. All notices
mailed shall be effective three (3) days after deposit in the U.S. Mail, postage prepaid. The
foregoing notwithstanding, the non -receipt of any notice as the result of a change of address
of which the sending party was not notified or as the result of a refusal to accept delivery
shall be deemed receipt of such notice.
21.3 Survival of Representations and Warranties. All representations and
warranties in the Loan Documents shall survive the making of the Loan(s) described herein
and have been or will be relied on by City notwithstanding any investigation made by either
ply.
21.4 No Third Parties Benefited. This Agreement is made for the purpose of
setting forth rights and obligations of Developer and the City, and no other person shall
have any rights hereunder or by reason hereof.
21.5 Binding Effect; Assignment of Obligations. This Agreement shall bind,
and shall inure to the benefit of, Developer and City and their respective successors and
assigns. Other than as expressly provided to the contrary in this Agreement, Developer
shall not assign any of its rights or obligations under any Loan Docinnent without the prior
written consent of City, which consent may be withheld in City's sole and absolute
discretion. Any such assignment without such consent shall, at City's option, be void.
21.6 Prior Agreements; Amendments; Consents. This Agreement (together
with all other Loan Documents) contains the entire agreement between the City and
Developer with respect to the Loan and the Property, and all prior negotiations,
understandings and agreements are superseded by this Agreement and such other Loan
Documents. No modification of any Loan Document (including waivers of rights and
conditions) shall be effective unless in writing and signed by the party against whom
enforcement of such modification is sought, and then only in the specific instance and for
the specific purpose given.
21.7 Governing Law. All of the Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of California and Federal
law, whichever is more stringent. Developer irrevocably and unconditionally submits to
the jurisdiction of the Superior Court of the State of California for the County of Orange
or the United States District Court of the Central District of California, as City may deem
appropriate, in connection with any legal action or proceeding arising out of or relating to
this Agreement or the Loan Documents. Assuming proper service of process, Developer
also waives any objection regarding personal or in rem jurisdiction or venue.
21.8 Severability of Provisions. No provision of any Loan Document that is
held to be unenforceable or invalid shall affect the remaining provisions, and to this end all
provisions of the Loan Documents are hereby declared to be severable.
21.9 Headings. Article and section headings are included in the Loan
Documents for convenience of reference only and shall not be used in construing the Loan
Documents.
21.10 Conflicts. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, this Agreement, unless otherwise
expressly provided, shall prevail; provided however that, with respect to any matter
addressed in both such documents, the fact that one document provides for greater, lesser
or different rights or obligations than the other shall not be deemed a conflict unless the
applicable provisions are inconsistent and could not be simultaneously enforced or
performed.
21.11 Time of the Essence. Time is of the essence under this Agreement and in
the performance of every term, covenant, and obligation contained herein.
21.12 Conflict of Interest. No member, official or employee of the City shall
have any direct or indirect interest in this Agreement, nor participate in any decision
relating to the Agreement which is prohibited by law.
21.13 Warranty Against Payment of Consideration. Developer warrants that
it has not paid or given, and will not pay or give, any third person any money or other
consideration for obtaining this Agreement.
21.14 [RESERVED]
21.15 Plans and Data. Where Developer does not proceed with the work and
constriction of the Project, and when this Agreement is terminated with respect thereto for
any reason, Developer shall deliver to City any and all plans and data concerning the
Property, and City or any person or entity designated by City shall have the right to use
such plans and data without compensation to Developer. Such right of City shall be subject
to any right of the preparer of the plans to their use.
21.16 Authority to Enter Agreement. Each undersigned represents and warrants
that its signature hereinbelow has the power, authority and right to bind their respective parties
to each of the terms of this Agreement, and shall indemnify the City fully, including
reasonable costs and attorney's fees, for any injuries or damages to City in the event that such
authority or power is not, in fact, held by the signatory or is withdrawn.
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
executed on the date set forth at the beginning of this Agreement.
ATTEST:
Norma Mitre
Acting Clerk of the Council
APPROVED AS TO FORM
Sonia R. Carvalho
City Attorney
City
RECOMMENDED FOR APPROVAL
Steven A. Mendoza
Executive Director
Community Development Agency
CITY OF SANTA ANA
Steven A. Mendoza
Acting City Manager
{Signatures continue on following page}
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Orange )
On April 23, 2019 before me, Claudia M. Fernandez -Shaw Notary Public
(insert name and title of the officer)
personally appeared Steven A. Mendoza
who proved to me on the basis of satisfactory evidence to be the person(;) whose name ewe
subscribed to the within instrument and acknowledged to me thatCl�sh they executed the same in
h0h&r4ttr4Ir authorized capacity(i ), and that byai /her/Mff signature(Fs on the instrument the
person(�j, or the entity upon behbIf of which the person( acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
re
CLAUDIA M. FERNANDEbSHAW
Notary Public - California
Orange County
Commission u 2228084
z My Comm. Expires Jan 25, 2022
DEVELOPER:
Tiny Tim, LP, a California limited partnership
By: Tiny Tim CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By: `y,✓{. V
Kyle Paine
Its: President
By: Tiny Tim Mercy House CHDO LLC,
a California limited liability company
Its: Managing General Partner
Signed in counterpart
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By:
Stephanie Miles
Its: Board Secretary
By: IH CDP Partnership LLC,
a California limited liability company
Its: Co -General Partner
By: Affordable Housing Alliance II, Inc.,
a Colorado nonprofit corporation
which will do business in the State of California as
Integrity Housing
Its: Sole Managing Member
Philip Wood
Its: President
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Orange
On April 23, 2019 before me, Diana Mueller, Notary Public
(insert name and title of the officer)
personally appeared Kyle Paine
who proved to me on the basis of satisfactory evidence to be the persona whose name(s):is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
hi her/their authorized capacity0e6), and that by his/her/their signatureo) on the instrument the
personal, or the entity upon behalf of which the personfoacted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
=1AE�RWITNESS my hand and official seal. S to952 2a:.a;; a Notaifornia2 r y oM Com14, 2021
Signature Y ' l� (Seal)
DEVELOPER:
Tiny Tim, LP, a California limited partnership
By: Tiny Tim CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
Lo
Kyle Paine
Its: President
By: Tiny Tim Mercy House CHDO LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit
Its: Sole Managing Member
I0
Its: Board
EM
Signed in counterpart
By: IH CDP Partnership LLC,
a California limited liability company
Its: Co -General Partner
By: Affordable Housing Alliance II, Inc.,
a Colorado nonprofit corporation
which will do business in the State of California as
Integrity Housing
Its: Sole Managing Member
By:
Philip Wood
Its: President
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL ..
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of ID
On l lA-PA 1 1 2O A before me,
Date
personally appeared
o •e
� U Ot l A IC bn — 1y Ul lu. t
Here Insert Name and Title of the Officer
•—
^-0'
Names) of Signer(s)
who proved to me on the basis of satisfactory evidence to be the persons) whose narn*)®/are—
subscribed to the within instrument and acknowledged to me that +mfei 'they executed the same in
tft S0/tHeir authorized capacity(ies), and that by lus/J&their signature(*on the instrument the person(s),
or the entity upon behalf of which the person(a)acted, executed the instrument.
--------------------
ANALILIA CALESTI
Commission N 2121926 =
c' -. Notary Public - California
= Orange County
M Comm. E Ires Aug29, 20191
Place Notary Seal Above
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph
is true and correct.
WITNESS my hand and official seal.
Signature
_,�, ( �
ignature of Notary Public
OPTIONAL
Though this section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document:
Number of Pages:
Document Date:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner — ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
Signer's Name:
❑ Corporate Officer — Title(s):
[]Partner — ❑ Limited ❑ General
❑ Individual ❑ Attomey in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
4�"v�: •✓4�.4�.4'•✓i- v4.,.vi - v4'v v •✓G✓G�.:L. ' vim.:' �4"/4V 'ey5t✓ v4�4'✓4L✓, 4'•v:L.4�,:-✓4
$2014 National• - • • • • - • • :11 • :0 91
DEVELOPER:
Tiny Tim, LP, a California limited partnership
By: Tiny Tim CDP LLC, Signed in counterpart
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By:
Kyle Paine
Its: President
By: Tiny Tim Mercy House CHDO LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By:
Stephanie Miles
Its: Board Secretary
By: III CDP Partnership LLC,
a California limited liability company
Its: Co -General Partner
By: Affordable Housing Alliance 1I, Inc.,
a Colorado nonprofit corporation
which will do business in the State of California as
Integrity Housing
Its: Sole Managing Member
01
Philip Wood
Its: President
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL ..
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of ' Ri )
On �_" 221 )q before me, 3y\�c F" ma, 1 eta U( 6L j NUt-nva pk�
Date Here Insert Name and Title of the Officer
personally appeared�Q
Name((o of Signerfp4
who proved to me on the basis of satisfactory evidence to be the person(,sj' whose name(4 is/?A/e
subscribed to the within instrument and acknowledged to me that he/s)4/txy executed the same in
his/InpAtAir authorized capacity(, and that by his/Iat r/t6Air signature,(s) on the instrument the persons!
or the entity upon behalf of which the person() acted, executed the instrument.
--------------------
.. JULIE FRANCES MACOUILLIAM
•� Notary Public - California
i ,•=® - Orange County z
Z Commission # 2169858
My Comm. Expires Oct 28, 2020
Place Notary Seal Above
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph
is true and correct.
WITNESS my
Signature
OPTIONAL
and official seal.
of
Though this section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document:
Document Date:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner — ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
Number of Pages:
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner — ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
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EXHIBITS
A. Legal Description
B. Affordability Restrictions on Transfer of Property
C. Inclusionary Deed of Trust
D. Inclusionary Promissory Note
E. Project Budget
F. Scope of Work / Schedule of Perfonnance
G. Form of Residual Receipts Report
Exhibit A:
Legal Description
LEGAL DESCRIPTION
APN: 007-313-15
007-313-16
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SANTA
ANA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED
AS FOLLOWS:
LOT 39 OF TRACT NO. 1341, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE,
STATE OF CALIFORNIA,
AS SHOWN ON A MAP RECORDED IN BOOK 57, PAGES 47 AND 48 OF
MISCELLANEOUS MAPS, RECORDS
OF ORANGE COUNTY. CALIFORNIA
./+
All that certain real property situated in the County of Orange, State of California,
described as follows:
LOT 39 OF TRACT NO. 1341, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE
OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 57, PAGES 47 AND 48 OF
MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA.
SAID LAND IS SHOWN AS PARCEL 1 ON VOLUNTARY LOT MERGER NO. 2019-01
RECORDED APRIL 30, 2019, AS INSTRUMENT NO 2019000142225, OFFICIAL RECORDS
OF SAID COUNTY.
APN:007-313-15 and 007-313-16
legal rev. (010698)
Exhibit Bo.
Affordability
Restrictions on
Transfer of Property
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 6103 & 27383
When Recorded Mail to:
City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
{Address: 2223 West Fifth Street, Santa Ana, California)
THESE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (the
"Restrictions") are entered into by and between Tiny Tim LP, a California limited partnership
("Developer") and the City of Santa Ana, a charter city and municipal corporation ("City").
RECITALS:
A. The City's Housing Opportunity Ordinance ("Ordinance") was originally adopted
by the City Council on November 28, 2011 (Ordinance No. NS-2825), and is codified in Article
XVIILI of the Santa Ana Municipal Code ("SAMC"). The Ordinance was amended by the City
Council on September 1, 2015 (Ordinance No. NS-2881), and on October 6, 2015 (Ordinance No.
NS-2885). The Ordinance established standards and procedures to encourage the development of
housing that is affordable to a range of households with varying income levels. Pursuant to SAMC
section 41-1904(c), developers may pay an in -lieu fee in certain instances to satisfy the
inclusionary requirements. These funds are deposited into the Inclusionary Housing Fund, as
defined by SAMC section 41-1901, and are to be used to increase and improve the supply of
affordable housing per SAMC section 41-1909.
B. Developer, acting by and through its representative and agent, Community
Development Partners, a California corporation ("CDP") requested financial assistance in
connection with the proposed acquisition, development, construction, ownership, occupancy, and
operation of a fifty-one (51) unit affordable housing complex ("Project") to be located at 2223
West Fifth Street, Santa Ana, California, and legally described within Exhibit A of the
Inclusionary Loan Agreement hereto and incorporated herein ("Property"). At least fifteen (15)
of the units will be affordable to family households earning no more than 30% of the Area Median
Income ("AMI"); five (5) of the units affordable to family households earning no more than 50%
of the AMI; and thirty (30) of the units affordable to family households earning no more than 60%
of the AMI. Office space within the development will be provided for use as a police substation
which at a minimum will have room for a desk, phone, and computer that could be set up by the
1076\53\1379664.2
Santa Ana Police Department ("SAPD"), dependent upon their available staffing and resources.
The unit mix consists of:
Bedroom
Size
30%
AMI
50%
AMI
60%
AMI
Manager's
Unit
Total
Two Bedroom
6
3
10
1
20
Three Bedroom
8
2
19
29
Four Bedroom
1
1
2
Totals
15
5
30
1
51
On -site amenities will include a community plaza, an art center, urban farm, and mini park
with outdoor gym and jogging track. Mercy House Living Centers ("Mercy House") will manage
onsite residential services coordination for all households.
C. The City and the Housing Authority of the City of Santa Ana ("Housing Authority")
reviewed Developer's request for assistance and at the City Cormcil/Housing Authority meeting
on June 20, 2017, the City Council authorized and approved issuance of a conditional, pre -
commitment letter evidencing the preliminary award of $1,300,000 of funds to the Project
("Inclusionary Loan"), to be funded exclusively from the Inclusionary Housing Fund.
D. The amount of the Inclusionary Loan was determined based upon the City's review
of the Developer's request for the receipt of the Inclusionary Loan and the development profonna
and projected cash flows for the Project submitted by the Developer to the City as of March 29,
2017 ("Proforma"). The City Manager has authority to approve revised development profonnas
and projected cash flows for the Project; provided, however, that the Inclusionary Loan is not
materially increased or extended.
E. In furtherance of the Inclusionary Housing Program, Developer has applied to the
City for a loan with which to:
1. Acquire, develop and construct the project, and
2. Thereafter to maintain, operate and professionally manage the Project as decent,
safe, sanitary and affordable rental housing.
F. The City, on certain terms and conditions, desires to make such Inclusionary Loan
to Developer in order to make possible the acquisition, development, construction, ownership,
maintenance and operation of the Project, thereby expanding the supply of decent, safe, sanitary and
affordable housing within the City.
G. If there is any inconsistency between State, and local guidelines with regard to any
of the terms and conditions contained herein, the more stringent sball apply.
H. The Inclusionary Loan Agreement, Inclusionary Deed of Trust, Inclusionary
Promissory Note and these Restrictions, dated concurrently herewith (collectively the
"Inclusionary Loan Documents") are entered into for the purpose of providing for affordable
2
residential rental units in the City of Santa Ana pursuant to the Inclusionary Housing Fund
regulations and guidance.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained, City and Developer agree as follows:
1. Definitions:
"Affordable Housing" means the total housing costs paid by a qualifying household,
which shall not exceed the fraction of gross income specified, as follows, in accordance with
Sections 50052.5 and 50053 of the Health & Safety Code and the U. S. Department of Housing and
Urban Development (HUD):
Very Low -Income Households. Thirty (30) percent of the income of a household earning
fifty (50) percent of the Orange County median income adjusted for family size appropriate
for the unit.
Low -Income Households. Thirty (30) percent of the income of a household earning seventy
(70) percent of the Median Income for the Area for for -sale units, and thirty (30) percent
of the income of a household earning sixty (60) percent of the Median Income for the Area
for rental units, adjusted in either case for family size appropriate for the unit.
In the event of a conflict between the fractions specified in this definition and those found
in Sections 50052.5 and 50053 of the Health & Safety Code and HUD, the fractions
specified by HUD shall control.
"Affordable Rent" means the monthly rents which do not exceed the maximum amount
applicable to Extremely Low, Very Low and Low Income households, as promulgated by the
California Tax Credit Allocation Committee (TCAC), or by the State of California, as applicable.
"Agency" means the Housing Authority of the City of Santa Ana, acting as the Housing
Successor Agency, a public body, corporate and politic, exercising governmental functions and
powers, and organized and existing under the CRL. The principal office of the Agency is located
at 20 Civic Center Plaza, Santa Ana, California 92702. "Agency" shall also refer to the City where
the context dictates, to the effect that City shall have all rights granted to the Agency hereunder.
"Agreement" means the Loan Agreement by and between the City and Developer for
Inclusionary Housing Funds.
"Applicable Law" shall mean those federal, state and local laws, ordinances, regulations,
policies and procedures applicable to the Inclusionary Housing Funds.
"Building Permit" means the building permit(s) issued by the City of Santa Ana and
required for the construction.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on which
Santa Ana City Hall is open to the public for the conduct of City affairs.
"Calendar Year" means each consecutive twelve (12) month period from January 1 to
December 31.
"Certificate of Completion" has the meaning set forth in Article 17 of the Agreement.
"City" means the City of Santa Ana, California, a charter city and municipal corporation.
"City" shall also refer to the Agency where the context dictates, to the effect that the Agency shall
have all the rights granted to the City hereunder.
"City Project Manager" shall mean the City's Housing Manager and/or his/her
designee.
"County" means the County of Orange, California.
"Developer" means Tiny Tim LP, a California limited partnership.
"Event of Default" has the meaning set forth in Section 20.1 of the Agreement.
"Extremely Low Income" means an adjusted income which does not exceed thirty percent
(30%) of the Median Income for the Area, adjusted for household size, as published by the U.S.
Department of Housing and Urban Development.
"Governmental Authority" means any governmental or quasi -governmental agency,
board, bureau, commission, department, court, administrative tribunal or other instrumentality or
authority, and any public utility.
"Housing Authority" means the Housing Authority of the City of Santa Ana (CA093), a
public body, corporate and politic.
"HUD" means the United States (U.S.) Department of Housing and Urban Development,
and any successors or assigns thereof.
"Improvements" means all improvements and fixtures now and hereafter comprising any
portion of the Property, including, without limitation, landscaping, trees and plant materials; and
offsite improvements, as required through the City of Santa Ana Planning and Building Agency
entitlement process.
"Inclusionary Deed of Trust" means the deed of trust encumbering the Property, in the
form attached hereto as Exhibit C, to be executed by Developer pursuant to Section 5.13.1 in order
to secure the Inclusionary Loan Note.
"Inclusionary Loan" or "Inclusionary City Loan" means a loan in the original principal
amount of up to one -million, three -hundred thousand dollars ($1,300,000) to be made to Developer
by the City to be funded exclusively from the Inclusionary Housing Fund.
4
"Inclusionary Promissory Note" means that certain promissory note for Inclusionary
Loan funds in the original principal amount of $1,300,000 in the form attached hereto as Exhibit
D, and to be executed by Developer in favor of City to evidence the obligation of Developer to
repay the Inclusionary Loan through residual receipts as further described in the Inclusionary
Promissory Note.
"Laws" means all statutes, laws, ordinances, regulations, orders, writs, judgments,
injunctions, decrees or awards of the United States or any state, county, municipality or other
Governmental Authority.
"Lien" means any lien, mortgage, pledge, security interest, charge or encumbrance of any
kind, including any conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any lien or security interest.
"Loan Documents" or "Inclusioanry Loan Documents" means, collectively, the
Agreement, the Inclusionary Promissory Note, the Inclusionary Deed of Trust, and these
Restrictions, and any other agreement, document, or instrument that the City reasonably requires
in connection with the execution of these Restrictions or from time to time to effectuate the
purposes of these Restrictions.
"Low Income" means an adjusted income which does not exceed eighty percent (80%) of
the Median Income for the Area, adjusted for household size, as published by the U.S. Department
of Housing and Urban Development (HUD).
"Median Income for the Area" means the median income for Orange County, California
PMSA as most recently determined by HUD. Also may be referred to interchangeably in the
Inclusionary Loan Documents as "Area Median Income" or "AMI".
"Project" means the construction of the Improvements upon the Property by Developer
pursuant to the Agreement.
"Property" means the property that is located at 2223 West Fifth Street in the City of Santa
Ana, and as more fully described in the "Legal 'Description" of the Property attached as Exhibit A to
the Agreement.
"Restricted Units" means fifty (50) of the "Housing Units" at the Project shall and will
be restricted to affordable rents pursuant to the Maximum Rents published yearly by the California
Tax Credit Allocation Committee (TCAC) and referenced in the regulatory agreement containing
conditions, covenants and restrictions executed by Developer and TCAC for a period not less than
fifty-five (55) years recorded against the Project in the Official Records, County of Orange,
California. At least fifteen (15) of the Housing Units at the Project shall and will be restricted to
households earning 30% or less of the AMI. One (1) Housing Unit will be rented to an on -site
property manager; the manager's unit will not be rent restricted.
"Senior Lender" means a commercial or institutional financial institution providing the
Senior Loan or any other holder of the Senior Loan Note.
"Senior Loan" means a loan from the Senior Lender concurrent to the Inclusionary Loan
for payment of a portion of the acquisition and rehabilitation costs, and shall include any
subsequent loan that refinances the initial Senior Loan.
"Senior Loan Deed of Trust" means the first deed(s) of trust securing the Senior Loan
by encumbering the Property.
"Senior Loan Documents" means, collectively, the loan agreement governing the Senior
Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other agreement, document
or instrument that the Senior Lender requires in connection with the Senior Loan.
"Senior Loan Note" means the promissory note evidencing the Senior Loan from the
Senior Lender.
"Term of Affordability" or "Affordability Period" means the terms and conditions
contained herein shall remain in effect for fifty-five (55) years from the date of issuance of the
Certificate of Occupancy for the Project, or repayment of the Inclusioamy Loan, whichever is
longer.
"Very Low Income" means an adjusted income which does not exceed fifty percent (50%)
of the Median Income for the Area, adjusted for household size, as published by the U.S.
Department of Housing and Urban Development.
2. Use of the Property. Developer covenants and agrees, for itself, its successors, its
assigns, and every successor in interest to the Property of any part thereof, that Developer, such
successors, and assigns shall use the Property to provide Affordable Housing, for low-, very -low,
and extremely -low-income households, as provided in the Inclusionary Loan Agreement and these
Restrictions. Developer agrees that the Property shall be used only for decent, safe, sanitary and
Affordable Housing pursuant to the affordability requirements of California Health and Safety
Code ("H&S") sections 50052.5 and 33334.3, as applicable.
3. Affordability Requirements, Use and Maintenance of the Property.
3.1 Use Covenants and Restrictions:
A. Developer agrees and covenants, which covenants shall ram with the land and braid
Developer, its successors, its assign and every successor in interest to the Property that Developer will
make all rental units on the Property available to extremely -low, very low and low income households
at rents affordable to such households pursuant to these Restrictions for fifty-five (55) years from
the date of issuance of the Certificate of Occupancy for the Project, or repayment of the
Inclusionary Loan, whichever is longer.
B. These Restrictions shall be recorded in the Official Records of the County, and shall
remain in first position on title and shall not be subordinated.
3.2 Affordability Levels/Unit Mix:
A. The Project shall consist of fifty-one (51) residential units (except for one (1) unit
for the onsite manager). The unit mix and levels of affordability are as follows:
Bedroom
Size
30%
AMI
50%
AMI
60%
AMI
Manager's
Unit
Total
Two Bedroom
6
3
to
1
20
Three Bedroom
8
2
19
29
Four Bedroom
1
1
2
Totals
15
5
30
1
51
B. The affordable rents charged at the Project must comply with the standards set forth
by the California Tax Credit Allocation Committee (TCAC).
C. Utility allowances must be deducted from the maximum gross monthly Affordable
Rent. The Housing Authority of the City of Santa Ana publishes a Utility Allowance
Schedule on an annual basis.
3.3 Calculation of Rent:
A. The affordable rents charged at the Project must comply with the standards set forth
by the California Tax Credit Allocation Committee (TCAC).
B. Utility allowances must be deducted from the maximum gross monthly Affordable
Rent. The Housing Authority publishes a Utility Allowance Schedule on an annual basis.
C. On an annual basis, the City shall provide the Developer with the maximum allowable
schedule of incomes and rents (less utility allowance appropriate for the Restricted Units for the
Property), which shall correspond to the maximum rent increase allowed by TCAC. In no event can
Developer charge any tenant more than such amount.
D. Developer, its successors and assigns, shall not charge rents for the Restricted' Units
in excess of the amounts set forth in the tables as adjusted from time -to -time by TCAC. The City's
Project Manager, or designee, shall notify Owner in writing of the adjusted allowable maximum
incomes and rents as allowed by TCAC.
E. In no event shall the rent charged to the tenant of a Restricted Unit be more than that
amount of the rent as published by TCAC on an annual basis.
F. Utility allowances must be deducted from the maximum gross monthly Affordable
Rent. Utility allowances are deducted from rents using the amounts set annually by the Housing
Authority,
G. Recertification of Tenant Income:
(1) Developer shall take all necessary steps to review the income of all tenants
prior to renting to them, as well as reviewing current tenants on an annual
basis. At a minimum, every fifth (5th) year, Developer shall require new
original income documents to be submitted by tenants.
(2) Developer shall allow the City to conduct periodic reviews of tenant files
and files relating to affirmative marketing and outreach to ensure the
Project's compliance with applicable regulations and guidelines.
(3) City assisted units continue to qualify as Affordable Housing despite a
temporary non-compliance caused by increases in the incomes of existing
tenants if actions satisfactory to the City are being taken to ensure that all
vacancies are filled in accordance with this section until the non-compliance
is corrected.
3.4 Construction and Maintenance of the Property:
A. Construction and Maintenance. Solely at Developer's expense, Developer agrees to
maintain the Property (and all abutting grounds, sidewalks, roads, parking and landscape areas which
Developer is otherwise required to maintain) in a clean and good condition and repair in compliance
with all applicable housing quality standards and state and local code requirements, and keep the
Property free from any accumulation of debris and waste materials. City, and any of its employees,
agents, contractors or designees, shall have the right to enter upon the Property at reasonable times
and in a reasonable manner to inspect the Project. If at any time Developer fails to maintain, or cause
to be maintained, the Property as required by this section, and said condition is not corrected after the
expiration of a reasonable period of time not to exceed thirty (30) days from the date of written notice
from the City, unless such condition cannot reasonably be cured within thirty (30) days, in which case
Developer shall have such additional time as reasonably necessary to complete such cure, the City
may perform the necessary maintenance and Developer shall pay all reasonable costs incurred for
such maintenance. The City shall inspect the Property annually after the date of issuance of the
Certificate of Completion as described in Section 17 of the Agreement.
B. Renovations. Developer shall not remove, demolish or materially alter any
Improvement without City's prior consent, except to make non-structural repairs, which preserve
or increase the Property's value, and shall promptly restore, in a good and professional manner,
any Improvement (or other aspect or portion of the Property) that is damaged or destroyed from
any cause.
C. Handicapped Accessibility. Developer shall comply with: (a) Section 504 of the
Rehabilitation Act of 1973, and implementing regulations at 24 CFR 8C; and (b) the Americans
I
r
with Disabilities Act of 1990, and implementing regulations at 28 CFR 35-36 in order to make the
Project readily accessible to and usable by individuals with disabilities.
D. Local Sourcing Plan. Developer agrees to make a good faith effort to encourage
contractors and suppliers to hire and procure locally. Prior to issuance of any Building Permit,
Developer shall develop and submit to the City a local sourcing plan for the Project targeting, to
the extent feasible, the hiring of qualified workers, construction contractors, or the purchasing of
goods locally within the City of Santa Ana.
E. Lead -Based Paint. Developer shall comply with the requirements, as applicable of
the Lead -Based Paint Poisoning Prevention Act.
F. Equal Opportunity and Fair Housing. Developer shall carry out the construction
and perform its obligations under this Agreement in compliance with all of the state and federal
laws and regulations regarding equal opportunity and fair housing. Developer must also follow
the requirements of California Health and Safety Code section 33435.
G. Property Standards. Developer shall cause the Property to meet all applicable local,
state and federal codes and ordinances, including zoning ordinances. Developer shall also cause
the Property to meet the current edition of the Model Energy Code published by the Council of
American Building Officials.
H. Alternative Transportation and Energy Source, Resource Conservation, and LEED
Certification. In recognition of the City's desire to optimize the energy efficiency of the Project,
Developer agrees to consult with the Project design team, a CABEC certified 2016 Certified
Energy Analyst, a LEED AP Homes (low-rise and mid -rise), LEED AP BD+C (high rise), National
Green Building Standard (NGBS) Green Verifier, or GreenPoint Rater (one person may meet both
of these latter qualifications) early in the Project design process to evaluate a building energy
model analysis and identify and consider energy efficiency or generation measures beyond those
required by the TCAC minimum constriction standards.
I. Property Maintenance Agreement. Developer shall execute a maintenance
agreement with the City prior to occupancy, which shall be recorded against the Property, and
which shall be in a form reasonably satisfactory to the City Attorney.
J. Monitoring. Developer shall allow the City to conduct periodic inspections of each
of the assisted units on the Property as required by the Housing Opportunity Ordinance after the
date of construction completion, with reasonable notice. Developer shall cure any defects or
deficiencies found by the City while conducting such inspections within two weeks of written
notice thereof, or such longer period as is reasonable within the sole discretion of the City.
3.5 Management Plan:
A. Management Plan. Prior to issuance of a Certificate of Occupancy, Developer shall
submit for the reasonable approval of the City a "Management Plan" that sets forth in detail
Developer's property management duties, a tenant selection process in accordance with this
9
Agreement, a security system and crime prevention program, the procedures for the collection of
rent, the procedures for eviction of tenants, the rules and regulations for the Property and manner
of enforcement, a standard lease form, an operating budget, the identity and emergency contact
information of the professional property management company to be contracted with to provide
onsite property management services at the Property, and other matters relevant to the management
of the Property, including, but not limited to, the following:
(1) Management Agent. Developer shall submit the name and qualifications
of the proposed Management Agent. The City Project Manager shall
approve or disapprove the proposed Management Agent in writing based on
the experience and qualifications of the Management Agent.
(2) Management Agreement. Developer shall submit a copy of the
proposed management agreement specifying the amount of the management
fee, and the relationship and division of responsibilities between Developer
and Management Agent.
(3) Annual Budget and Projected Cash Flows. Prior to the issuance of a
certificate of occupancy for the Project, and annually thereafter not later
than one hundred fifty (150) days after the close of each Calendar Year
thereafter, Developer shall submit an updated operating budget and cash
flow to the City Project Manager. The budget and cash flow shall be in a
form that is reasonably acceptable to the City Project Manager.
(4) Tenant Selection Policies. Developer shall adopt and include as part of its
Management Plan, written tenant selection policies and criteria for the
Restricted Units that meet the following requirements:
(a) Are consistent with the purpose of providing housing for Extremely -
Low, Very -Low and Low Income households;
(b) Are reasonably related to program eligibility and the applicants'
ability to perform the obligations of the lease;
(c) Provide for:
(i) the selection of tenants from a written waiting list in the
chronological order of their application, insofar as is
practicable; and,
(ii) the prompt written notification to any rejected applicant of
the grounds for any rejection;
(d) Carry out the Affirmative Marketing procedures of the City of Santa
Ana, which are designed to provide information and otherwise
attract eligible persons from all racial, ethnic and gender groups in
10
the housing market area to the Restricted Units. Developer shall
cooperate to effectuate this provision prior to the initial renting, or
upon occurrence of a vacancy, and the re -renting of any Restricted
Units;
(5) Local Preference. Local preference for Santa Ana residents and workers in
tenant selection shall be a requirement of the Project. Subject to the
prohibition of discrimination and the granting of preferences in housing
occupancy imposed by federal laws and regulations, the State of California,
and by the City of Santa Ana Affordable Housing Funds Policies and
Procedures, the Developer shall use its best efforts to lease units in the
following order of priority:
1. First priority shall be given to persons who have been
permanently displaced or face permanent displacement from
housing in Santa Ana as a result of any of the following:
a. A redevelopment project undertaken pursuant to
California's Community Redevelopment Law (Health
& Safety Code Sections 33000, et seq.) -- applicable
only to projects funded by the Low and Moderate
Income Housing Asset Fund.
b. Ellis Act, owner -occupancy, or removal permit
eviction;
c. Earthquake, fire, flood, or other natural disaster;
d. Cancellation of a Housing Choice Voucher HAP
Contract by property owner; or
e. Governmental Action, such as Code Enforcement.
2. Second priority shall be given to persons who are either:
a. Residents of Santa Ana and/or
b. Working in Santa Ana at least 32 hours per week for at
least the last 6 months.
(6) Affirmative Marketing. Prior to the issuance of a Certificate of Occupancy,
Developer shall prepare and obtain City's approval of an affirmative
marketing program for leasing the affordable units at the Project.
(7) Crime Free Housing. Developer shall work with City staff to develop a
crime free housing policy, procedure, and design plan.
11
(8) Onsite Parking Management Plan. Developer shall provide onsite parking
for residents and visitors of the Project and actively monitor the parking
demand of the Project site. Developer shall continually monitor and take
appropriate measures to manage the parking demand of the Project site to
mitigate the use of of£site parking spaces on private or public properties
and/or right-of-way. Prior to issuance of a Certificate of Occupancy,
Developer shall submit a Parking Management Plan and obtain approval
from the City for said plan.
(9) Tenant Satisfaction Survey. The Developer shall complete and submit to
the City biennial tenant satisfaction surveys of tenants.
B. Rental Inclusionmy Housing Manual. The Developer shall also maintain
compliance with the City's Inclusionary Housing Manual for Rental Projects.
C. Cure Period. If at any time the City determines that the Restricted Units are not
being managed or maintained in accordance with the approved Management Plan, City shall
provide Developer and Investor Limited Partner (as defined in the Agreement) with notice thereof
which notice shall include a reasonable cure period not less than thirty (30) days. If the deficiencies
are not cured within the cure period provided in the City notice, Developer shall change the
management agent or the practices complained of, upon receipt of written notice from the City
Project Manager. The City Project Manager may require Developer to change management
practices or to terminate the management contract and designate and retain a different management
agent. The management agreement shall provide that it is subject to tennination by Developer
without penalty, upon thirty (30) days prior written notice, at the direction of the City Project
Manager. Within ten (10) days following a direction of the City 'Project Manager to replace the
management agent, the Developer shall select another management agent or make other
arrangements satisfactory to the City Project Manager or designee for continuing management of
the Restricted Units.
3.6 Supportive Services:
A. Onsite Services. The Developer shall provide on -site services that are available to
the residents and shall report to the City annually the services provided.
B. Application and Financial Preparedness. Developer shall submit for review and
approval by the City a booklet to inform interested persons regarding minimum application and
eligibility requirements and to assist interested persons with application and financial preparedness
and eligibility for residency at the Project at the initial leasing of the affordable units. Developer
shall also work with the City to hold a minimum of two (2) workshops to be coordinated by the
Developer at least twelve (12) months prior to the initial leasing of the affordable units.
C. Programs and Amenities. Developer shall provide residents of the Project access
to discounted or no -cost onsite supportive services, programming, and amenities that promote
child development, youth development, and economic mobility, and include, but are not limited to
12
health and wellness services, transportation services, social activities, and physical or recreational
amenities.
D. WORK Center. The Developer and the Property Manager shall coordinate with the
City's WORK Center to provide services and outreach to tenants, as well as provide information
on employment during the construction of the Project.
3.7 Obligation to Refrain from Discrimination:
A. In Use of Property. Developer covenants and agrees for itself, its successors, its
assigns and every successor in interest to the Property or any part thereof, that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
creed, religion, disability, sex, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property nor shall Developer itself or any person
claiming under or through it establish or pen -nit 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 Property, as required by the Title VI of the Civil Rights Act
of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age
Discrimination Act of 1975, and all implementing regulations.
B. In Affordable Housing Restrictions. Developer, its successors and assigns, shall
not refuse to lease a unit to a holder of a rental voucher under 24 CFR part 887 (Housing Choice
Voucher Program) or to a holder of a comparable document evidencing participation in a federally
funded tenant -based assistance program because of the status of the prospective tenant as a holder
of such certificate of family participation, rental voucher, or comparable tenant -based assistance
document.
C. In Employment. Developer shall take affirmative action to ensure that applicants
are employed, and that employees are treated during employment, without regard to their race,
color, disability, creed, religion, sex, marital status, disability, national origin, or ancestry.
D. In all Contracts. Developer shall cause the foregoing covenants to be inserted in
all contracts for any work covered by this Agreement so that such provisions will be binding upon
each contractor for the benefit of City, provided that the foregoing covenant shall not apply to
contracts or subcontracts for standard commercial supplies or raw materials.
4. Miscellaneous Provisions:
A. Any lease of any of the Restricted Units must be for not less than one year, unless
by mutual agreement between the tenant and the Developer. Should the tenant and Developer
agree to a term of less than one year, said agreement shall be expressed in written form, signed by
the tenant, and maintained in the tenant's rental file held by the Developer. The lease may not
contain any of the following provisions (in which references to "Developer" shall mean the
Developer, its successors or assigns):
13
(1) Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor
of the Developer in a lawsuit brought in connection with the lease;
(2) Agreement by the tenant that the Developer may take, hold, or sell personal
property of household members without notice to the tenant and a court
decision on the rights of the parties. This prohibition, however, does not
apply to an agreement by the tenant concerning disposition of personal
property remaining in the Restricted Unit after the tenant has moved out of
the Restricted Unit. The Developer may dispose of this personal property
in accordance with state law;
(3) Agreement by the tenant not to hold the Developer or the Developer's agent
legally responsible for any action or failure to act, whether intentional or
negligent;
(4) Agreement of the tenant that the Developer may institute a lawsuit without
notice to the tenant;
(5) Agreement by the tenant that the Developer may evict the tenant or
household mernbers without instituting a civil court proceeding in which
the tenant has the opportunity to present a defense, or before a court decision
on the rights of the parties;
(6) Agreement by the tenant to waive any right to a trial by jury;
(7) Agreement by the tenant to waive the tenant's right to appeal, or to otherwise
challenge in court, a court decision in cormection with the lease; and,
(8) Agreement by the tenant to pay attorney's fees or other legal costs even if
the tenant wins in a court proceeding by the Developer against the tenant.
The tenant, however, may be obligated to pay costs if the tenant loses.
B. Developer, its successors or assigns, must adhere to state law requirements with
regard to termination of tenancy.
C. Developer shall comply with and be bound by the conflict of interest provisions set
forth in all applicable state regulations pertaining to conflict of interest.
D. The covenants established in these Restrictions, and any amendments hereto
approved by the City, shall be binding for the benefit of and in favor of the City and its respective
successors and assigns, without regard to technical classification and designation. These
Restrictions shall remain in effect for fifty-five (55) years from the date of issuance of the
Certificate of Occupancy for the Project, or repayment of the Inclusionary Loan, whichever is
longer. In its discretion, the City may defer repayment of the Loan or the City may agree to such
reasonable modifications to the requirements of these Restrictions, as the City may determine are
14
necessary for the continued maintenance and operation of the Restricted Units. The covenants
against discrimination shall remain in effect for the period of these Restrictions.
E. Records and Audits.
(1) Owner shall maintain the following general program records, and make
them available for inspection by the City, the State or HUD:
(a) Records which demonstrate compliance with the Equal Opportunity
and Fair Housing requirements outlined in these Restrictions,
including:
(i) data on the extent to which each racial and ethnic group and
single head of household (by gender of head of household)
have applied for, participated in, or benefited from, any
program or activity funded in whole or in part;
(ii) documentation of actions undertaken to meet the equal
opportunity requirements of 24 CFR 92.350, which
implements Section 3 of the Housing Development Act of
1968, as amended (12 U.S.C. 1701u); and,
(iii) documentation and data on the steps taken to implement
Owner's outreach programs to minority -owned and women -
owned businesses to meet the minority outreach
requirements of 24 CFR 92.350;
(b) If applicable, records which demonstrate compliance with the
requirements relating to relocation of displaced persons, as
described in 24 CFR 92.353. At a minimum, these shall include
project occupancy lists identifying the name and address of all
persons occupying the Project Property up until the date on which
Developer obtained ownership of the Property; and,
(c) Any other reports issued by other monitoring agencies.
(2) All records pertaining to each Calendar Year of Inclusionary Housing funds
must be retained for the most recent five year period, except that for rental
housing projects, records may be retained for five years after the Project
completion date; except that records of individual tenant income
verifications, Project rents and Project inspections must be retained for the
most recent five year period, until five years after the Affordability Period
terminates. Developer shall cooperate with the City to retain all books and
records relevant to the Loan Agreement for a minimum of five years after
the expiration of the Loan Agreement and any and all amendments hereto,
or for five years after the conclusion or resolution of any and all audits or
15
litigation relevant to the Loan Agreement, whichever is later. The City, the
State, and/or their representatives shall have unrestricted reasonable access
to all locations, books, and records for the purpose of monitoring, auditing,
or otherwise examining said locations, books, and records with or without
prior notice.
(3) If so directed by the City upon termination of the Loan Agreement,
Developer shall cause all records, accounts, documentation and all other
materials relevant to the work to be delivered to the City, as depository.
(4) All records, accounts, documentation and other materials relevant to the
Project shall be accessible at any time to the authorized representatives of
the City on reasonable prior notice, for the purpose of examination or audit.
(5) The City shall perform an annual audit at the close of each Calendar Year
in which these Restrictions are in effect. Developer shall reasonably
cooperate with City in performing such audit.
(6) Developer shall permit the City to perform an Annual Physical Inspection
of the Property with at least ten (10) Business Days notice. Developer shall
cooperate with this Inspection and shall take all steps necessary to quickly
correct any code deficiencies identified during the Inspection.
F. If there is a discrepancy between local, state and federal law with regard to any of
the aforementioned covenants, the more stringent shall apply.
G. The City is the beneficiary of the terms and provisions of these Restrictions and the
covenants herein, both for and in its own right and for the purposes of protecting the interests of
the community and other parties, public or private, for whose benefit these Restrictions and the
covenants running with the land have been provided. The City shall have the right if the 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 they or any
other beneficiaries of these Restrictions and covenants are entitled.
H. The covenants and agreements contained herein shall run with the land and shall
remain in effect for the term of the Agreement. Upon the sale, conveyance or other transfer of the
Property (a "Transfer") and the assimrption of the obligations hereunder by a transferee,
Developer's liability for performance shall be terminated as to any obligation to be performed
hereunder after the date of such Transfer.
L Upon a Transfer of the Property, the transferee will be obligated to meet with the
City prior to closing of the Transfer to review the terns of these Restrictions and requirements of
the transferee therein. Any failure of transferee to meet with the City as required would constitute
a default under these Restrictions.
16
J. The Agreement and all of its attachments shall be enforceable by the City in
accordance with the terns thereof. Each of the Loan Documents, provide a means of enforcement
by the City if Developer is in breach of its obligations hereunder and thereunder, including liens
on the Property, deed restrictions and covenants running with the land.
K. The City agrees to provide Developer's Investor Limited Partner (as defined in the
Agreement) with notice of and an opportunity to cure any default. Any cure made or tendered by
the Limited Partner shall be deemed a cure by Developer.
17
IN WITNESS WHEREOF, the parties hereto have caused these Affordability Restrictions on
Transfer of Property to be executed on the date set forth at the beginning of these Restrictions.
ATTEST:
Norma Mitre
Acting Clerk of the Council
APPROVED AS TO FORM
Sonia R. Carvalho
City Attorney
By: Ryan O. Hodge
Assistant City Attorney
RECOMMENDED FOR APPROVAL
Steven A. Mendoza
Executive Director
Community Development Agency
{Signatures continue on following page}
CITY OF SANTA ANA
Steven A. Mendoza
Acting City Manager
Im
DEVELOPER:
Tiny Tim, LP, a California limited partnership
By: Tiny Tim CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By:
Kyle Paine
Its: President
By: Tiny Tim Mercy House CHDO LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By:
Stephanie Miles
Its: Board Secretary
By: IH CDP Partnership LLC,
a California limited liability company
Its: Co -General Partner
By: Affordable Housing Alliance II, Inc.,
a Colorado nonprofit corporation
which will do business in the State of California as
Integrity Housing
Its: Sole Managing Member
By:
Philip Wood
Its: President
19
Exhibit C:
Inclusionary Deed of
Trust
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 6103 & 27383
When Recorded Mail to:
City of Santa Ana
Cleric of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
INCLUSIONARY DEED OF TRUST
AND ASSIGNMENT OF RENTS
(2223 West Fifth Street, Santa Ana, California)
THIS INCLUSIONARY DEED OF TRUST AND ASSIGNMENT OF RENTS (the "Deed
of Trust") made this 16 day of April, 2019, by and between Tiny Tim LP, a California limited
partnership (the "Trustor"), Commonwealth Land Title Company, a California corporation (the
"Trustee"), and the City of Santa Ana, a charter city and municipal corporation (the "Beneficiary").
Capitalized terms not defined in this Deed of Trust shall have the meanings given such terms in the
Agreement (defined in Section 1 below and in the Inclusionary Promissory Note).
Trustor, in consideration of the promises herein recited and the trust herein created,
irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property
located in the City of Santa Ana, County of Orange, State of California, described in the attached
Exhibit A and more commonly known as 2223 West Fifth Street, Santa Ana, California (the
'Property");
TOGETHER with all the improvements now or hereafter erected on the Property, and all
easements, rights, appurtenances and all fixtures now or hereafter attached to the 'Property, all of
which, including replacements and additions thereto, shall be deemed to be and remain a part of the
Property covered by this Inclusionary Deed of Trust; provided that so long as Trustor is not in
default hereunder, it shall be permitted to control the Property in accordance with the requirements
of that certain Inclusionary Loan Agreement entered into between the Trustor and the Beneficiary,
dated concurrently herewith, which Agreement is on file with the Beneficiary as a public record;
TOGETHER with the right, power and authority during the continuance of this Trust, to
collect the rents, issues, and profits of the Property, reserving unto the Trustor the right, prior to any
default by Trustor in payment of the indebtedness secured by this Deed of Trust or in the performance
of any agreement under this Deed of Trust, to collect and retain these rents, issues and profits as they
become due and payable; and,
TOGETHER with all articles of personal property or fixtures now or hereafter attached to or
used in and about the building or buildings now erected, or hereafter to be erected, on the Property
1076A53\1379660.2
which are necessary to the complete and comfortable use and occupancy of such building or buildings
for the purposes for which they were or are to be erected, including all other goods and chattels and
personal property as are ever used or furnished in operating a building, or the activities conducted
therein, similar to the one herein described and referred to, and all renewals or replacements thereof
or articles in substitution therefor, whether or not the same are, or shall be attached to said building
or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to
as the "Security';
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever; and,
TO SECURE to the Beneficiary: (a) the repayment of the sums evidenced by a Promissory
Note to the Beneficiary executed by Trustor of even date herewith in the principal amount of one -
million, three -hundred thousand dollars ($1,300,000) (the "Inclusionary Promissory Note"); (b) the
performance of the covenants and agreements of Borrower contained in a certain Agreement as
hereinafter defined; and, (c) the payment of all other sums, with interest thereon, advanced in
accordance herewith to protect the security of this Deed of Trust; and the performance of the
covenants and agreements of Trustor contained herein.
TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS:
1. The Agreement. This Deed of Trust is executed and delivered, along with the
Inclusionary Promissory Note, the Inclusionary Loan Agreement, and Affordability Restrictions on
Transfer of Property to benefit the Property. A copy of said Inclusionary Loan Agreement is on file
as a public record with the Beneficiary and is incorporated herein by reference (the "Agreement").
Trustor acknowledges that but for the execution of this Deed of Trust, the Beneficiary would not enter
into the Agreement or hlclusionary Promissory Note secured by this Deed of Trust.
2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and has the
right to grant and convey the Security; that other than this Deed of Trust, the Security is not
encumbered except for obligations secured by deeds of trust, or any other security agreement, to
secure financing or refinancing for the purchase and rehabilitation of the Property.
3. Repayment of the Loan. Trustor will promptly repay, when due, the principal loan
amount, as required by the Inclusionary Promissory Note secured by this Deed of Trust.
4. Subordination. This obligation secured by this Deed of Trust shall be subordinated to
the Senior Loan and the Senior Loan Deed of Trust, but the Inclusionary Affordability Restrictions
on Transfer of Property shall remain in a senior position to the Senior Loan and the Senor Loan Deed
of Trust.
5. Prior Mortgages and Deeds of Trust; Charges; Liens. Trustor shall perform all of
Trustor's obligations under any mortgage, deed of trust or other security agreement with a lien that
has priority over this Instrument, including Trustor's covenants to make payments when due (subject
to all applicable notice and cure provisions). Trustor will pay all taxes, assessments and other charges,
fines and impositions attributable to the Security that may attain a priority over this Deed of Trust, by
Trustor making any payment, when due, directly to the payee thereof. Trustor will promptly furnish
to the Beneficiary all notices of amounts due under this paragraph, and in the event Trustor makes
2
payment directly, Trustor will promptly discharge any lien that has priority over this Deed of Trust;
provided that Trustor will not be required to discharge the lien of the Deed of Trust securing any
senior lender or any other lien described in this paragraph so long as Trustor will agree in writing to
the payment of the obligation secured by such lien in a manner acceptable to the Beneficiary, or will,
in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings, which
operate to prevent the enforcement of the lien or forfeiture of the Security, or any part thereof.
6. Hazard Insurance. Trustor will keep the Security insured by such insurance policies
in such amounts and for such periods as called for in the Agreement. All insurance policies and
renewals thereof will include a standard mortgagee clause with standard lender's endorsement in favor
of the holder of any Senior Lender and the Beneficiary as their interests may appear and in a form
acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated
agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beneficiary,
or its designated agent, the original insurance policies or certificates of insurance, all renewal notices
and all receipts of paid premiums subject to the rights of any senior lender. In the event of loss,
Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent.
The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor.
The Beneficiary shall receive thirty (30) days advance notice of cancellation of any insurance policies
required under this Section.
Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds, subject to
the rights of any senior lender, will be applied to restoration or repair of the Security damaged,
provided such restoration or repair is economically feasible and the security of this Deed of Trust is
not thereby impaired. If such restoration or repair is not economically feasible or if the security of
this Deed of Trust would be impaired, again, subject to the rights of any senior lender, the insurance
proceeds will be used to repay the loan secured by this Deed of Trust, with the excess, if any, paid to
Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or
its designated agent within thirty (30) days from the date notice is mailed by either of them to Trustor
that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its
designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option,
either to restoration or repair of the Security or to repay the loan.
If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in and to
any insurance policy, and in and to the proceeds thereof resulting from damage to the Security prior
to the sale or acquisition, will pass to the Beneficiary to the extent of the sums secured by this Deed
of Trust immediately prior to such sale or acquisition, subject to the rights of any senior lender.
7. Preservation and Maintenance of Security. Trustor will keep the Security in good
repair and will not commit waste or permit impairment or deterioration of the Security.
S. Protection of the Beneficiary's Security. If Trustor fails to perform the covenants and
agreements contained in this Deed of Trust, or if any action or proceeding is commenced that
materially affects the Beneficiary's interest in the Security, including, but not limited to, default under
the Deed of Trust securing any senior lender, eminent domain, insolvency, code enforcement, or
arrangements or proceedings involving a bankniptcy or decedent, then the Beneficiary, at the
Beneficiary's option, upon notice to Trustor, may make such appearances, disburse such sums and
take such action as it determines necessary to protect the Beneficiary's interest, including, but not
limited to, disbursement of reasonable attorneys' fees and entry upon the Security to make repairs.
3
Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest thereon,
will become an indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and the
Beneficiary agree to other terms of payment, such amount will be payable upon notice from the
Beneficiary to Trustor requesting payment thereof, and will bear interest from the date of
disbursement at the rate payable from time to time on outstanding principal under the Inclusionary
Promissory Note, unless payment of interest at such rate would be contrary to applicable law, in which
event such amounts will bear interest at the highest rate pennissible under applicable law. Nothing
contained in this paragraph will require the Beneficiary to insure any expense or take any action
hereunder.
9. hispection. The Beneficiary may make, or cause to be made, reasonable entries upon
and inspections of the Security upon reasonable prior notice during normal business hours; provided
that, the Beneficiary will give Truster reasonable notice of inspection.
10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the Beneficiary in
exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The
procurement of insurance or the payment of taxes or other liens or charges by the Beneficiary will not
be a waiver of the Beneficiary's right to accelerate the maturity of the indebtedness secured by this
Deed of Trust.
11. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and
cumulative to any other right or remedy under this Deed of Trust, or any other document, or afforded
by law or equity, and may be exercised concurrently, independently or successively.
12. Successors and Assigns Bound. The covenants and agreements herein contained shall
bind, and the rights hereunder shall inure to, the respective successors and assigns of the Beneficiary
and Truster subject to the provisions of this Deed of Trust.
13. Joint and Several Liability. All covenants and agreements of Trustor shall be joint
and several.
14. Notice. Except for any notice required under applicable law to be given in another
manner: (a) any notice to Trustor provided for in this Inclusionary Deed of Trust will be given by
certified mail, return receipt requested, addressed to Trustor at 3416 Via Oporto, Suite 301, Newport
Beach, CA 92663 with a copy to R4 Capital LLC at 780 Third Avenue, 16t" Floor, New York, New
York 10017, Attention: Marc Schnitzer, and to Frost Brown Todd LLC at 400 West Market Street,
Suite 3200, Louisville, Kentucky 40202, Attention: Amy Curry, Esq.; (b) any notice to the
Beneficiary will be given by certified mail, return receipt requested, to the Beneficiary at 20 Civic
Center Plaza, P.O. Box 1988, Santa Ana, California 92702, Attention: Housing Division Manager, or
at such other address as the Beneficiary may designate by notice to Trustor as provided above; and,
(c) to Trustee at 888 S. Figueroa Street, Suite 2100, Los Angeles, CA 90017. Notice shall be effective
as of the date received as shown on the return receipt.
15. Governing Law. This Deed of Trust shall be governed by the laws of the State of
California with venue in Orange County.
M
16. Severability. In the event that any provision or clause of this Deed of Trust or the
hiclusionary Promissory Note conflicts with applicable law, such conflict will not affect other
provisions of this Deed of Trust or the Inclusionary Promissory Note that can be given effect without
the conflicting provision, and to this end the provisions of the Deed of Trust and the Inclusionary
Promissory Note are declared to be severable.
17. Captions. The captions and headings in this Deed of Trust are for convenience only
and are not to be used to interpret or define the provisions hereof.
18. Default in Foreclosure; Remedies. Upon Trustor's breach of any covenant or
agreement of Trustor in this Deed of Trust or the Inclusionary Promissory Note secured by this Deed
of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed
of Trust, the Beneficiary may declare all sums secured by this Deed of Trust immediately due and
payable by delivering to Trustor notice thereof, specifying: (1) the breach; (2) the action required to
cure such breach; (3) a date not less than thirty (30) days from the date the notice is received by
Trustor, as shown on the return receipt, by which such breach is to be cured, provided, however, that
if such default is not reasonably susceptible to being cured within thirty (30) days, Trustor shall have
a reasonable period to cure the defect, so long as Trustor is diligently prosecuting the cure to
completion; and, (4) that failure to cure such breach on or before the date specified in the notice may
result in acceleration of the sums secured by this Deed of Trust and sale of the Security. The notice
will also inform Trustor of Tr ustor's right to reinstate after acceleration and the right to bring a court
action to assert the non-existence of default, or any other defense of Trustor to acceleration and sale.
Notwithstanding anything to the contrary contained herein, a "default" shall not include
any transaction not considered a "transfer' under Section 16.2 of the Agreement or permitted under
Section 16.3 or 16.4 of the Agreement.
If the breach is not cured on or before the date specified in the notice, or such longer period
as provided above or in the Inclusionary Promissory Note or the Agreement, the Beneficiary, at the
Beneficiary's option, may: (a) declare all of the sums secured by this Deed of Trust to be immediately
due and payable without further demand and may invoke the power of sale and any other remedies
permitted by California law; (b) either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security,
enter upon the Security and take possession thereof (or any part thereof) and of any of the Security,
in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable
to preserve the value or marketability of the Property, or part thereof or interest therein, increase the
income therefrom or protect the security thereof. The entering upon and taking possession of the
Security shall not cure or waive any breach hereunder or invalidate any act done in response to such
breach and, notwithstanding the continuance in possession of the Security, the Beneficiary shall be
entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any
uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose
this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants
hereof, (d) deliver to the Trustee a written declaration of default and demand for sale, pursuant to the
provisions for notice of sale found at California Civil Code sections 2924, et seq., as amended from
time to time; or, (e) exercise all other rights and remedies provided herein, in the instruments by which
Trustor acquires title to any Security, or in any other document or agreement now or hereafter
evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by
law.
5
Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any cure of any
default made or tendered by Truster's limited partner shall be deemed to be a cure by Truster and
shall be accepted or rejected on the same basis as if made or tendered by Truster.
The Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in
pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys'
fees.
19. Trustor's Right to Reinstate. Notwithstanding the Beneficiary's acceleration of the
sums secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by the
Beneficiary to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale
of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to
entry of a judgment enforcing this Deed of Trust if: (a) Truster pays the Beneficiary all sums that
would be then due under this Deed of Trust, and no acceleration under the Inclusionary Promissory
Note has occurred; (b) Truster cures all breaches of any other covenants or agreements of Truster
contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by the Beneficiary
and the Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust
and in enforcing the Beneficiary's and the Trustee's remedies, including, but not limited to, reasonable
attorneys' fees; and, (d) Trustor takes such action as the Beneficiary may reasonably require to assure
that the lien of this Deed of Trust, the Beneficiary's interest in the Security and Truster's obligation
to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and
cure by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and
effect as if no acceleration had occurred.
20. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to
notify any party to this Deed of Trust of pending sale under any other deed of trust or any action or
proceeding in which Trustor, Beneficiary, or Trustee shall be a party, unless brought by Trustee.
21. Reconveyance. Upon payment of all sums secured by this Deed of Trust, the
Beneficiary will request the Trustee to reconvey the Security and will surrender this Deed of Trust
and the Inclusionary Promissory Note to the Trustee. The Trustee will reconvey the Security without
warranty and without charge to the person or persons legally entitled thereto. Such person or persons
will pay all costs of recordation, if any.
22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from time to
time remove the Trustee and appoint a successor trustee to any Trustee appointed hereunder. The
successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and
by applicable law.
23. Request for Notice. Trustor requests that copies of the notice of default and notice of
sale be sent to Trustee at the address set forth in Section 14 above.
24. Nonrecourse Liability. Neither Trustor nor any partner of Trustor nor any other
person or entity shall have any personal liability under the Agreement, Inclusionary
Promissory Note, or this Deed of Trust, and any judgment, decree or order for payment of
money obtained in any action to enforce the obligation of Trustor to repay the loan evidenced
10
by such documents shall be enforceable against Trustor only to the extent of Trustor's interest
in the Property.
25. Beneficiary agrees to provide Trustor's Investor Limited Partner (as defined in the
Agreement) with notice of and an opportunity to cure any default hereunder. Any cure made or
tendered by the Limited Partner shall be deemed a cure by Trustor.
(Signatures on Following Page)
IN WITNESS WHEREOF, Truster has executed this Deed of Trust as of the date first written above.
Tiny Tim, LP, a California limited partnership
By: Tiny Tim CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By:
Kyle Paine
Its: President
By: Tiny Tim Mercy House CHDO LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By:
Stephanie Miles
Its: Board Secretary
By: IH CDP Partnership LLC,
a California limited liability company
Its: Co -General Partner
By: Affordable Housing Alliance II, Inc.,
a Colorado nonprofit corporation
which will do business in the State of California as
Integrity Housing
Its: Sole Managing Member
By:
Philip Wood
Its: President
Exhibit Do.
Inclusionary
Promissory Note
INCLUSIONARY HOUSING FUNDS PROMISSORY NOTE
SECURED BY SUBORDINATED DEED OF TRUST
TO THE CITY OF SANTA ANA
(2223 West Fifth Street, Santa Ana, California)
$1,300,000.00 April 16, 2019
Santa Ana, California
1. Principal Amount of Loan
FOR VALUE RECEIVED, Tiny Tim LP, a California limited partnership ("Borrower"),
hereby promises to pay to the City of Santa Ana, a charter city and municipal corporation ("City"),
or order, a principal amount not to exceed ONE -MILLION, THREE -HUNDRED THOUSAND
DOLLARS ($1,300,000), or so much thereof as may be advanced by the City to the Borrower, due
and payable with 3 % interest by residual receipts over the fifty-five (55) year teen, pursuant to the
Inclusionary Loan Agreement (said "Agreement") between Borrower and the City dated
concurrently herewith, which is incorporated herein by this reference. This loan is funded
exclusively from the Inclusionary Housing Fund held by the City (the "City Funds"). Any
capitalized term not otherwise defined in this Inclusionary Promissory Note ("Note") shall have
the meaning ascribed to such term in the Agreement. The obligation of Borrower to City hereunder
is subject to the terms of said Agreement, the Affordability Restrictions on Transfer of Property,
Inclusionary Deed of Trust and this Note. Said documents are public records on file in the offices
of the City, and the provisions of said documents are incorporated herein by this reference.
This Note, said Agreement, the Affordability Restrictions on Transfer of Property, and the
Inclusionary Deed of Trust are sometimes collectively referred to herein as the "Loan Documents".
The rights and responsibilities provided for in the Loan Documents shall inure to the benefit of the
City. Any capitalized term that is not otherwise defined herein shall have the meaning ascribed to
such term in the Agreement.
This Note evidences the obligation of Borrower to the City for repayment of the
Inclusionary Loan of Inclusionary Housing Funds attributable to the acquisition, development, and
construction of the Property, and related soft costs.
This Note is payable at the principal office of the City of Santa Ana — Community
Development Agency, 20 Civic Center Drive, Santa Ana, California 92702, Attn: Housing
Division, or at such other place as the holder hereof may inform Borrower in writing, in lawful
money of the United States.
Definitions.
For the purpose of calculating the payments to be made by Borrower to City pursuant to
this Note, the following terms shall have the following respective meanings:
1076A53\1379659.2
"Agreement" means the Inclusionary Loan Agreement between the City and the
Developer, and any attachments or amendments thereto.
"Applicable Law" shall mean those federal, state and local laws, ordinances, regulations,
policies and procedures applicable to the City Housing Program, and the Inclusionary Housing
Funds.
"Area Median Income" means the median income for the Orange County, California
PMSA as most recently determined by the U.S. Department of Housing and Urban Development
("HUD"). Also may be referred to interchangeably in the Inclusionary Loan Documents as
"Median Income for the Area" or "AMI".
"Borrower" means Tiny Tim LP, a California limited partnership.
"Calendar Year" means each consecutive twelve (12) month period from January I to
December 31.
"City Assisted Units" shall mean those affordable rental units constructed on the Property,
which are subject to the 55-year Tenn of Affordability.
"City's Percentage" with reference to the Residual Receipts, shall mean fifty percent (50%)
of the total Residual Receipts from the Property as further described in section 5 hereof.
"Closing Costs" shall mean:
(i) In the case of a Sale, reasonable brokerage commissions payable to a broker
as a result of the Sale, which shall not in any event exceed the customary
amount charged for similar transactions in the immediate market place,
costs of title insurance premiums, documentary stamp taxes, escrow fees,
recording charges, loan repayment charges and other costs reasonably
incurred with respect to the Property, in each case actually paid by Borrower
as a condition of the Sale.
(ii) In the case of a Refinancing, the reasonable and necessary costs of
consuunnating such Refinancing, including, without limitation, loan fees,
loan repayment charges, costs of title insurance premiums, escrow fees,
recording fees and attorneys' fees.
"Extremely Low Income" means an adjusted income which does not exceed thirty percent
(30%) of the area median income for the Orange County, California PMSA, adjusted for household
size, as published by HUD.
"Gross Revenues" shall mean all revenues and receipts of every kind actually received by
Borrower from operating the Property, and all parts thereof, including, but not limited to, income
from both cash and credit transactions, rental from leased and/or subleased spaces and parking fees
and charges, but not including security deposits and other tenant deposits, except to the extent such
deposits are forfeited to the Borrower under the tenant's lease. Gross Revenues also includes any
casualty insurance proceeds in excess of those used to restore the Property, and any rental
interruption insurance proceeds. Any credit consideration shall be included in Gross Revenues at
the time cash proceeds (principal and/or other) are received. Borrower shall establish and maintain
accounts for the Gross Revenues (the "Project Accounts") that are segregated from revenues and
income received by Borrower from all other projects. Gross Revenues shall also include all interest
earned on the Project Accounts, and shall specifically exclude any capital contributions made by
the Investor Limited Partner.
"Inclusionary Deed of Trust" shall mean the deed of trust encumbering the Property, in the
form attached to the Agreement as Exhibit C, which is incorporated herein by this reference, to be
executed by Developer pursuant to section 6.1(e) of the Agreement in order to secure the
Inclusionary Promissory Note.
"Inclusionary Housing Funds" shall mean the money provided by the City from the
Inclusionary Housing Fund for the construction of the City Assisted Units hereunder,
"Inclusionaryan" means a loan in the original principal amount of up to one -million,
three -hundred thousand dollars ($1,300,000) to be made to Developer by the City to be funded
exclusively from the Inclusionary Housing Fund held by the City.
"Interest" shall mean that the NOTE shall bear simple interest at the rate of Tfiree percent
(3%) per annum, from the date of issuance of the Certificate of Occupancy/Completion.
"Low Income" means an adjusted income which does not exceed eighty percent (80%) of
the area median income for the Orange County, California. PMSA, adjusted for household size, as
published by HUD.
"Operating Expenses" shall mean the sum of the following:
(i) payments of principal and interest and all other charges relating to the
Senior Loan(s);
(ii) property management fee not to exceed 5% of gross rents;
(iii) owner administration fee not to exceed 5% of gross rents which will include
Investor Limited Partner local administration fee of $5,500 per year, which
shall increase by 3% per year, and other fees payable to the General Partner
pursuant to the Partnership Agreement;
(iv) deposits into required reserves;
(v) any deferred developer fee;
(vi) all other actual, reasonable cash operating costs and expenses, calculated on
an annual basis, that are directly attributable to managing and operating the
Property, including, without limiting the generality of the foregoing, the
following: costs and expenses for real and personal property taxes, special
assessments or similar charges; water, fuel, electricity and other utilities;
heating, ventilation and air conditioning expenses; labor; supplies; tools;
equipment; insurance; advertising and marketing; accounting and legal fees;
brokerage commissions and other leasing expenses; reasonable reserves for
all anticipated expenses as approved by the City; and other such items
constituting operation, maintenance and repair costs actually paid by the
Borrower, subject to the following conditions:
(a) Depreciation and amortization expenses shall not be considered
Operating Expenses, except as otherwise provided herein; and,
(b) Any expenses, compensation or fees paid to any affiliate of
Borrower, excluding those payable under (iii), shall only be
included as Operating Expenses to the extent they are not in excess
of the reasonable expenses, compensation or fees that would be
payable to unrelated third parties in arms -length transactions for
similar services in the Orange County, California area;
(vii) Any other expenses necessary to meet Senior Lender requirements, and
requirements of the Investor Limited Partner, or its assignee, as set forth in
Borrower's Amended and Restated Agreement of Limited Partnership dated
as of May 1, 2019, as may be amended (the "Partnership Agreement").
"Property" shall mean that property located at 2223 West Fifth Street, Santa Ana,
California.
"Refinancine" shall mean changing the then existing financing on the Property by, without
limitation, modifying the interest rate and/or the term of the existing Senior Loan, increasing or
reducing the amount of the existing Senior Loan, paying off the existing Senior Loan and obtaining
new Senior Loan, except for the payoff of the construction loan and its replacement with permanent
financing as contemplated by that [Citi Commitment with Freddie Mac dated as of 2019]
and except for the payoff of the conventional lender's acquisition loan for the Property.
"Refinancing Proceeds" shall be disbursed as set forth in section 6 hereof.
"Residual Receipts" shall mean the Gross Revenues from the Property for each year, less
deductions for Operating Expenses from the sane Property, applicable to each such year to the
extent not previously deducted as an Operating Expense.
"Sale" shall mean any transfer, assignment, conveyance or lease of the Property, or any
portion thereof, or any interest therein by the Borrower. Sale includes a sale in condemnation or
4
under threat thereof. Sale does not include dedications and grants of easements to public and
private utility companies of the kind customary in real estate development. Notwithstanding
anything to the contrary contained herein, a "Sale" shall not include any transaction not considered
a "transfer' under section 13, or under Section 16.2 of the Agreement or as otherwise permitted
under Section 16.3 or 16.4 of the Agreement.
"Senior Loan" shall mean a loan from the Senior Lender concurrent to the Inclusionary
Loan for payment of a portion of the acquisition and construction costs, and shall include any
subsequent loan that refinances the initial Senior Loan.
"Term of Affordability" or "Term" means the terns and conditions contained herein shall
remain in effect for fifty-five (55) years from the date of issuance of the Certificate of Occupancy
for the Project, or repayment of the Inclusionary Loan, whichever is longer.
"Very Low Income" means an adjusted income which does not exceed fifty percent (50%)
of the area median income for the Orange County, California PMSA, adjusted for household size,
as published by HUD.
3. Loan Repayment.
Borrower shall make payments to the City as provided in sections 5 (Residual Receipts), 6
(Refinancing Proceeds), 7 (Sale Proceeds) and 9 (Accelerated Loan Repayment) of this Note.
4. Operating Capital Improvement Loan.
If the replacement reserve account ("Reserves") is depleted due to unforeseen.repairs and
the General Partner makes a loan to the Partnership, the Reserves must be fully funded prior to
payment of said loan. The outstanding loan balance will be reflected in the annual report.
5. Annual Loan Repayment/ Residual Receipts.
a. Commencing on the date one hundred and fifty (150) days after the close of the initial
Calendar Year following the issuance of the Certificate of Occupancy, and on or before the 150'
day of each Calendar Year thereafter, the Borrower shall thereafter make a loan payment, including
any payment processing fee charged by the City's loan processor, as applicable, to the City
annually, in the amount of the lesser of the outstanding balance due under this Note or the City's
Percentage of the Residual Receipts, as provided herein.
b. Within one hundred and fifty (150) days after the close of the initial Calendar Year,
following the Issuance of the Certificate of Occupancy, and on or before the 150th day of each
Calendar Year thereafter, the Borrower shall submit to the City an audited financial statement of
Gross Revenues and Operating Expenses attributable to the Property for the applicable Calendar
Year, along with a computation of the amount of the Residual Receipts applicable to such Calendar
Year with which to make an Inclusionary Loan payment then due.
c. Except as otherwise provided, the Borrower shall pay to the City the City's Percentage
of the Residual Receipts as payment of the Agency LMIHAF Loan and City Inclusionary Loan
pursuant to Section 5(d) below. At least fifty percent (50%) of the Residual Receipts shall remain
with the Borrower, with all Residual Receipts remaining with Borrower, once both the Agency
LMIHAF Loan and City Inclusionary Loan have been fully repaid.
d. Borrower shall retain fifty percent (50%) of the Residual Receipts. The other fifty
percent (50%), shall be divided with seventy-eight percent (78%) to be applied to the Agency
LMIHAF Loan, and twenty-two percent (22%) to be applied to this Inclusionary City Loan. As
Borrower repays this Loan and the Agency LMIHAF Loan, the payment percentage applied to the
remaining loans shall increase.
C. The Residual Receipts payment shall be made no later than one hundred and fifty
(150) days after the close of the Calendar Year. Such payment shall be applied first to any late
fees, then to reduce the principal balance of the loan.
6. Loan Repayment from Refinancing Proceeds.
The Borrower shall make a loan payment to the City from every Refinancing that occurs
during the term of this Note (other than refinancing of the Senior Loan), not to exceed the
outstanding balance of principal on this Note, to the extent of the City's Percentage of the
Refinancing Proceeds (if any), as follows: the cash proceeds from such Refinancing shall be
applied first to pay Closing Costs; next, the amount necessary to parry in full the balance remaining
on the Senior Loan; next, the amount necessary to pay any deferred developer fee in full; and next,
the Borrower shall pay to the City the City's Percentage of the Refinancing Proceeds of which City
Percentage shall be used seventy-eight percent (78%) to repay the LMIHAF Agency Loan, and
twenty-two percent (221/4) to repay this Inclusionary City Loan, to the extent of the outstanding
balance on this Note. All remaining Refinancing proceeds shall remain with the Borrower to the
extent the outstanding balance (including interest) of the Note has been fully paid. Such payment
shall be due on the date of such Refinancing, and shall be applied to reduce the principal balance
of the Loan in accordance with this Section 6. The City shall not be required to reconvey the lien.
of the Deed of Trust if Refinancing Proceeds are insufficient to repay the Loan in full.
7. Loan Repayment from Sale Proceeds.
The Borrower shall make a loan payment, not to exceed the outstanding balance of
principal on this Note, subject to section 14 herein, to the City from any Sale that occurs during
the tern of the Inclusionary Loan, to the extent of the City's Percentage of the Sale Proceeds, as
follows: gross sale proceeds are applied first to pay Closing Costs; next, to pay in full the balance
remaining on the Senior Loan; next, the amount necessary to pay any deferred developer fee in
full; and next, the Borrower shall pay to the City the City's Percentage of the Refinancing Proceeds
of which City Percentage shall be used seventy-eight percent (78%) to repay the LMIHAF Agency
Loan, and twenty-two percent (22%) to repay the Inclusionary City Loan, not to exceed the
outstanding amount of principal due on this Note. All remaining Sale Proceeds shall remain with
the Borrower to the extent the outstanding balance (including interest) of the Note has been fully
6
paid. Such payment shall be due on the date of such Sale, and shall be applied to reduce the
principal balance of the Loan in accordance with this Section 7. The City shall not be required to
reconvey the lien of the Deed of Trust if Sale Proceeds are insufficient to repay the Loan in full.
8. Accelerated Loan Payment.
The fall principal amount outstanding shall be due and payable on the earlier to occur of
the following:
a. Sale or Refinancing of the Property as provided further in section 13 hereof, unless:
(i) in the case of a Sale in which the Sale Proceeds are insufficient to repay in full the Inclusionary
Loan, the City approves such sale and the purchaser assumes the balance of the Inclusionary Loan
in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the
Refinancing Proceeds are insufficient to repay in fall the Inclusionary Loan, the City approves
such Refinancing and the Borrower remains obligated pursuant to the terms of this Note;
b. In the event of default (subject to any applicable notice and cure provisions)
pursuant to any of the Loan Documents or the Senior Loan Documents;
c. Any default (subject to any applicable notice and cure provisions) by Borrower as
to any other loan or loans by City to Borrower with respect to the Property; or
d. The date that is fifty-five (55) years after the date of execution of this Note. To
the extent the Loan is not repaid by that date, the City agrees to review the performance of the
Property and consider in good faith any reasonable request by Borrower to modify the terms or
extend the Term of this Inclusionary Note, if applicable.
9. Prepayment
Borrower may prepay the outstanding principal balance under this Note, in whole or in
part, at any time without penalty. However, the Affordability Covenants and Restrictions will
remain for the entire Affordability Period of fifty-five (55) years.
10. Lawful Money.
Principal is payable in lawful money of the United States of America.
11. Application of payments; Late Charges.
a. Any payments received by the City pursuant to the terms hereof shall be applied
first to sums, other than principal, due the City pursuant to this Note, and the balance, if any, to
the payment of principal.
b. If any payment is not received by the City within ten (10) Business Days after
Developer's receipt of written notice that such payment was not received when due; then in
7
addition to the remedies conferred upon the City pursuant to this Note and the other Loan
Documents: (i) a late charge of four percent (4%) of the amount due and unpaid will be added to
the delinquent amount to compensate the City for the expense of handling the delinquency; and,
(ii) the amount due and unpaid, excluding the late charge, shall bear interest at the highest annual
rate which may lawfully be charged and collected under applicable law on the obligation,
evidenced by this Note, computed from the date on which the amount was due and payable until
paid. Without prejudice to the rights of the City hereunder, or under any of the other Loan
Documents, Borrower shall indemnify the City against, and shall pay the City on demand, any
expense or loss which it may sustain or incur as a result of the failure by Borrower to pay when
due any installment of principal, fees, or other amounts payable to the City under this Note or any
other Loan Document that exceeds the amount of the late charge described above, to the extent
that any such expense or loss is not recovered pursuant to such foregoing provisions. A certificate
of the City setting forth the basis for the determination of the amounts necessary to indemnify the
City in respect of such expenses or direct loss, submitted to Borrower by the City, shall be
conclusive and binding for all purposes except as immediately corrected by Borrower notice to
City.
12. Securi
This Note is secured by the recorded Deed of Trust.
13. Acceleration by Reason of Transfer or Financine.
a. In order to induce City to make the loan evidenced hereby, Borrower agrees that
in the event of any transfer of the Property without the prior written consent of City (other than a
transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder
of the Senior Loan Deed of Trust), City shall have the absolute right at its option, without prior
demand or notice, to declare all sums secured hereby immediately due and payable. Consent to
one such transaction shall not be deemed to be a waiver of the right to require consent to future or
successive transactions. City may grant or deny such consent in its sole discretion and, if consent
should be given, any such transfer shall be subject to this section 13, and any such transferee shall
assume all obligations hereunder and agree to be bound by all provisions contained herein. Such
assumption shall not, however, release Borrower from any liability thereunder without the prior
written consent of City.
b. As used herein, "transfer" includes the Sale, agreement to sell, transfer or
conveyance of the Property, or any portion thereof or interest therein, whether voluntary,
involuntary, by operation of law or otherwise, the execution of any installment land sale contract
or similar instrument affecting all or a portion of the Property, or the lease of all or substantially
all of the Property. 'Transfer' shall not include the leasing of individual residential units on the
Property, so long as Borrower complies with the provisions of the Agreement and the Affordability
Covenants and Restrictions relating to such leasing activity, nor shall it include a conveyance of
the Property to a limited partnership in which Borrower is a general partner, or to a corporation or
limited liability company that is wholly owned by the Borrower or its affiliates and that is fonmed
for the sole purpose of owning and operating the Property, or the sale back to the Borrower. In the
8
event of any Refinancing or partial Refinancing in an amount in excess of the balance of the Senior
Loan, without the prior written consent of City (which consent City may grant or deny in its sole
discretion), then the entire outstanding balance of the Inclusionary Loan shall be repaid to the City
at the time of each Refinancing or partial Refinancing. Additionally, a "Transfer" shall not include
any transaction not considered a "transfer' under section 16.2 of the Agreement or which is
otherwise permitted under Section 16.3 or 16.4 of the Agreement.
14. Event of Default.
Subject to the provisions of Sections 21 and 23 hereof, the occurrence of any of the
following shall be deemed to be an event of default which is not cured within the applicable time
period described therein ("Event of Default") hereunder: (a) failure by Borrower to make any
payments provided for herein, and if such default is not made good within ten (10) Business Days
after Developer's receipt of written notice that such payment was not received when due; (b) failure
by Borrower to perform any covenant or agreement in the Deed of Trust, the Agreement, or the
Affordability Covenants and Restrictions within thirty (30) days after written demand therefor by
City (or, in the event that more than thirty (30) days is reasonably required to cure such default,
should Borrower fail to promptly commence such cure, and diligently and continuously prosecute
same to completion); or (c) a default under the Senior Loan Deed of Trust that remains uncured
after any applicable notice has been provided and the expiration of any applicable cure period
therefore, if any, provided therein.
15. Remedies.
Upon the occurrence of an Event of Default, after any applicable notice has been provided
and the expiration of any applicable cure period therefore, City may declare all sums evidenced
hereby immediately due and payable by delivery to the Trustee named in the Deed of Trust
securing this Note, and to Borrower, written declaration of default and demand for sale, and written
notice of default and of election to cause the Property to be sold, which notice Trustee shall cause
to be duly filed for record and City may foreclose on the Deed of Trust. City shall also deposit
with Trustee the Deed of Trust, this Note and all documents evidencing expenditures secured
thereby and evidenced hereby. Upon the occurrence of an Event of Default (and so long as such
Event of ,Default shall continue), the entire balance of principal shall bear interest at the rate of the
Note plus four percent (4%). No delay or omission on the part of the City in exercising any right
under this Note or under any of the other Loan Documents shall operate as a waiver of such right.
16. Attorney Fees.
If this Inclusionary Promissory Note is not paid when due or if any Event of Default occurs,
Borrower promises to pay all costs of enforcement and collection, including, but not limited to,
reasonable attorneys' fees, whether or not any action or proceeding is brought to enforce the
provisions hereof.
9
17. Severability.
Every provision of this Note is intended to be severable. In the event any term or provision
hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions
hereof, which terms and provisions shall remain binding and enforceable.
18. Number and Gender.
In this Note the singular shall include the plural and the masculine shall include the
feminine and neuter gender, and vice versa, if the context so requires.
19. Non -recourse.
The Inclusionary Loan is a nonrecourse obligation of the Borrower. Neither Borrower, nor
its partners, nor any other person or entity shall have any personal liability for repayment of the
Inclusionary Loan or for any other amounts trader any of the documentation evidencing, securing
or describing the Inclusionary Loan. The sole recourse of City under this Note and the Deed of
Trust for repayment of the Inclusionary Loan and for such other amounts arising therefrom shall
be the exercise of its rights against the Property and related security thereunder.
20. Subordination.
It is hereby expressly agreed and acknowledged by Borrower and City that the Deed of
Trust is a subordinate deed of trust, and that this Note is subject and subordinate to any Senior
Deed of Trust.
21. Notice of Default.
a. Subject to the applicable cure periods set forth in section 14, and subject to the further
provisions of this section 21, failure or delay by the Borrower to perform any term or provision of
this Note constitutes a default under this Note. The Borrower must commence to cure, correct, or
remedy such failure or delay and shall complete such cure, correction or remedy with reasonable
diligence.
b. The City shall give written notice of default to the Borrower and the Investor Limited
Partner (as defined in the Agreement) specifying the default complained of by the City. Delay in
giving such notice shall not constitute a waiver of any default nor shall it change the time of default.
c. Except in the case of a monetary event of default, the Borrower shall not be in default
so long as it endeavors to complete such cure, correction or remedy with reasonable diligence,
provided such cure, correction or remedy is completed within the applicable time period set forth
10
herein after receipt of written notice (or such additional time as may be deemed by the City to be
reasonably necessary to correct the default).
d. Any failures or delays by the City in asserting any of its rights and remedies as to any
default shall not operate as a waiver of any default or of any such rights or remedies. Delays by
the City in asserting any of its rights and remedies shall not deprive the City of its right to institute
and maintain any actions or proceedings that it may deem necessary to protect, assert, or enforce
any such rights or remedies.
c. If a monetary event of default occurs under the terms of this Note or the Deed of Trust,
prior to exercising any remedies thereunder, City shall give Borrower written notice of such
default. Borrower shall have a period of ten (10) Business Days after such notice is received within
which to cure the default prior to exercise of remedies by City under this Note and the Deed of
Trust.
f If a non -monetary event of default occurs under the teens of this Note or the Deed of
Trust, prior to exercising any remedies thereunder, City shall give Borrower notice of such default.
If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have
such period to effect a cure prior to exercise of remedies by the City under this Note and the Deed
of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30)
days, and Borrower: (i) initiates corrective action within said period; and, (ii) diligently,
continually, and in good faith works to effect a cure as soon as possible, then borrower shall have
such additional time as is reasonably necessary to cure the default prior to exercise ofany remedies
by City. In no event shall City be precluded from exercising remedies if its security becomes or is
about to become materially jeopardized by any failure to cure a default or the default is not cured
within one hundred and eighty (180) days after the first notice of default is given.
23. Insurance and Condemnation.
to the event of any fire or other casualty to the Property or eminent domain ;proceedings
resulting in condemnation of the Property, or any part thereof, Borrower shall have the right to
rebuild the Property, and to use all available insurance or condemnation proceeds therefor,
provided that: (a) such proceeds are sufficient to keep the Inclusionary Loan in balance and rebuild
the Property in a manner that provides adequate security to City for repayment of the Inclusionary
Loan, or if such proceeds are insufficient, then Borrower shall have funded any deficiency; (b)
City shall have the right to approve plans and specifications for any major rebuilding, and the right
to approve disbursements of insurance or condemnation proceeds for rebuilding Linder a
construction escrow or similar arrangement; and, (e) no material uncured default then exists under
this Note or the Deed of Trust. If the casualty or condemnation affects only part of the Property
and total rebuilding is infeasible, then ;proceeds may be used for partial rebuilding and partial
repayment of the Inclusionary Loan in a mam7er that provides adequate security for repayment of
the remaining balance of the Inclusionary Loan.
11
23. Force Majeure.
Notwithstanding specific provisions of this Note, performance hereunder shall not be
deemed to be in default where delays or defaults are due to: war; terrorism; insurrection; strikes;
lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public
enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation;
governmental restrictions or priority; litigation; unusually severe weather; inability to secure
necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party;
acts or failure to act of the City or any other public or governmental Agency or entity (except that
any act or failure to act of City shall not excuse performance by City); or any other causes beyond
the reasonable 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 the party claiming such extension gives notice to the other party,
provided notice by the party claiming such extension is given within thirty (30) days after the
commencement of the cause. Times of performance under this Note may also be extended in
writing by the City and the Borrower.
24. Assignments.
The City, and the assignee of the City, shall have the right to assign this Note and the Deed
of Trust securing this Note, without any further act of Borrower. The assignee shall give notice to
Borrower as soon as practicable after such assignment.
12
This Inclusionary Promissory Note is hereby agreed to and executed on the date first set forth
above.
"BORROWER"
Tiny Tim, LP, a California limited partnership
By: Tiny Tim CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By:
Kyle Paine
Its: President
By: Tiny Tim Mercy House CHDO LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By:
Stephanie Miles
Its: Board Secretary
[Signatures Continue on Following Page]
13
By: IH CDP Partnership LLC,
a California limited liability company
Its: Co -General Partner
By: Affordable Housing Alliance II, Inc.,
a Colorado nonprofit corporation
which will do business in the State of California as
Integrity Housing
Its: Sole Managing Member
Philip Wood
Its: President
0130080.0718261 4822-0627-1373v2
14
Exhibit Ee.
EXHIBIT E
Tiny Tim Apartments
JACQUISITION
COSTS
FUNDING
SOURCES
9%tax smelts
Faddle Mao
Local
Local
Ptivate
Privets
Residential
Rental
Component
Costa
Cammerclel
Component
Costs
Total
Development
Cast.
MHTO Equity-
R4
Permanent
Loan- Freddie
Mao
City of Santa
Ana Funds-
LMIHAF
City of Santa
Ana Fund.-
Incluslonary
NOI During
Construction
Deferred
Developer Fee
SOURCES
TOTAL
Leaser of Lend Coal or V.W.
$3,542,000
$3060004$4,21V�h
$121,789
$2,428.211
$1,W0,000
$3,860,OOD
Demolition
$0
Legal& Closing Coale
$0
Verifiable Carrying Cosl.
$418,000
$418 000
$418.005
Subtotal
$3.960,000
- $306,0000
$0
$121,789
$2,846,211
$1.300,000
$0
$0
.,$4,268,000
Existing Improvements Cost
$o
Other'. s ecif
0
$0
Total AcquisitlOn
$3,mems
$3Ueap00
$0
5121,I00
$2,046,211
$1,300,p00
$0
$0
$4,263,11M
Off -Site Im mvements
$1,601,500
0
$1,631600
$1631600
Envlmnmantel Remedletlon
D
$0
Site Work herd costa
D
$0
Shucluree herd coats
$13,998,30B
$1.119,804
$15, 116,812
E0,322,322
$5,T93,4B0
$15116,812
PV lnstallatlon
., $D
60
General Re uilemenis
$781,390
$]2, T68
$054,160
$864158
-.. $B5A,158
Conbaclor Over head
$060,835
$g3,513
$512,363
$512,3o,
`. $512,353
CophaclolProfIt
$408,835
$43,510
$612,353
$512,353
$512,353
General LiabilitynsOmnCe
$15fi,2T0
ci ,B03
: $1 man
$1]1, 181
$171,1B1
Bond Premium
$96031
$L810
- 41T6,849
$1,616
$175,031
-$1To,64.
Total Oo0s4ucllon
$II,8I8,1T0
- $1,RB6,B29
$18,0]0,006
$19,005,g0q
$5]93,g90
E1 ]6,031
$0
EO
EO
- E18974,009
JAIRCHITECTURAL
Deal n
$A9,6B9
$]]9,689
$TT8,50B
III
$779,6B9
Su ervislon
$0
>:$0
Total Anhlt. Wal Coals
$])9 689
EO
-. $]]B 530
§]]B,609
§0
$0
$0
$o
$0
$779,589
En me
$36258q
$352,fi0q
$352,60q
- $362,504
ALTA Land Surva
$6,000
$5,000
$6,000
8 C Ins arin
Total ]CONTINGENCYOSTS
- $350,36q
EO
$J68,304
: $353,]Bq
$0
§0
EO
$0
$0
$358,384
E353,q
Hard Cost COntln BCC
$618, 117
$64,781
$$43,607
6$63,900
$BB3,000
$oftC n enc
$43,60]
$g3,pW
643,60]
$g3,607
iu
Total COntln enc Co.is
.hq
CQN$TRUCTION PERIOD EXPENSES
$002,)2q
$84 TB1
$B2T,515
592),515
EO
EO
to
Con.lmot on Loan Inlelest
$1,3g6 q]D
$1,946,4]0
$BAB,68fi
$496904
$1, Stu 470
Orl inefion Fee
$160,000
$160,000
$160,000
.$160,000
Credit Enhancement BA .Fee
$D
$0
Own Paid Bondsunsulanco
$0
60
Lender inaction Foes
$3$500
$35,B00
$35,600
am Soo
Taxes Budn Conslmcllo0
$6]]41
$07,741
$6]]41
$67,741
Prevallln Wa . Monitor
V
SD
Insurance Bunn CCnare.tion
$172,205
$172205
$172,206
-_ $172, 205
Title and R.-id[ Fees
sm ".
$36.000
$m 000
: $35,Oc0
C ,enccflon M mt.&Thatln
$106000
$100,000
$1 De o0c
- $1011, c
Predevelo ment Interest Exp.
$0
$h
Other
$0
IT
$h
Other
$0
$0
$0
Total Construe ion Ex eneea
$1,923,916
$0
$11ma,918
$26,000
$1,233132
' $160 000
$0
$dBS,]BA
$0
$1,921,916
Loan Ori (nation Fee a
-. $o
$D
Credit Enhancement B Ap,Foe
$10,000
slue"
$10.0op
some
Tllle and RecoMln
$5,000
$6.000
§5,000
Pm art Taxes7
$e
Insurance
dE$5,0�e
gD
Other: Conversion
see.
$18.500
$1e,5DD
Other: (specify)
$D
Total Permanent FinancingE33,bp0
LEGAL FEES
533,50,
EO
$33,Wp
$0
$0
$p
Pe
$33,600
Contraction Lentler Le al Ex en
$90'M
i cul '221
i$Bc,000
$90,000
Permanent Lender Legal FOos
$D
$0
5 onser Legal Fees
5i0Q.000
$100po0
I
1
$100,000
Or onlz0tionol
1
1 $D
$0
Syndication Legal Fees
$60.000
1 $6p000
I
I
I $50,000
$60,000
Other'
I Sol
I
Sc
Total Le al Fe a.
$24p,000
$0
$2d0,000
$0
$B
$2 g0,000
$0
EO
$0
$2g0,090
0 eratln Reserve
$202,322
$202,322
$202,322
$202,322
Re Iacemanl Reserve
60
$c
Rent-U Reserve
SO
$0
TmneiMen Reserve
Sa
$0
Other. a odfI
6a
$0
OIM1er. s ecif
$c
$D
Tatar Ca Itallaed Reserve.
$202,J22
EO
E202,322
$0
$202,322
$0
$0
$0
$0
$R02,322
A misal s
$3,600
$3,500
$3.500
$3,500
Markel Stud
$6,0he
$6,800
66.800
PM1 Slcal Needs Assessment
$c
$0
Envlmnmental Studies
$4,439
$4.439
84,gK
Other'. Geotech
$22000
$22.W0
$22,000
Other'. ALTA
EM
$9500
fe'.,
$c,boo
Otherl ASBullte
: $1]500
$ll,500
$17,500
Olhor'. s ecif
$c$0
Total Re orts & Studies
$0
$62,739
$0
1
$40 600
$o
$o
E0
$62 TJB
OTHER
TCAC A IAIIoc.IMonitor Fees
$141,855
$14LB66 5191,866
5141.665
CDLAC False
ad
$O
Local Pennlf Fees
$214,075
$214,W6 $214,0]6
"""a5
Marketing ILeaseu
$o
Marketln ILaaseu
Mun
$20,000
S20,000
$20,Bc0
Parke & Recleatlon
$264,404
$264,404
$264,404
til 404
StactWSi nals
$53, 055
S6U55
$53,955
$53,055
TrafficFeee
$0
So
Waste Water
$197,790
$197.760
$1071760
11W 7tin
Water Fecillf
$76,604
$75,594
$75.5.
$75,5t14
Other lm sct Fees
$OaAdt
$235,430
Mti,430
$230,430
Other Costs of Bond Issuance
$0
- $0
5 ndloodi I Investor Fees & Experrads,
$0
$0
Fumishin s
$163,000
$153,OOo
$113,000
filoo00
Final Cost AudIt Expense
1 $21,600
521,600
$21,600
1 $21,600
Marketing
to
$0
Financial Consupin
so
$0
Other'. Entitlainents
$195,740
$195]40
$195]40
$105,]40
Misc'. Special Ins eclions
$50po0
a_000
$5g000
SW,000
Others eoif
so
$9
Other'. s .df
$0
$9
Total Other Costs
td,aN.Ial
$0
$1,624,2131
$0
$386,2551
$1.237,958
$0
EO
$0
$1624,213
SUBTOTAL
DEVELOPER COSTS
$2T)R5,66J
$1,6fis,fi20
529,3Bq iB3
-515,105,9)2
$T]92,42)
-E4,T00000
Et,300,000
$495,]64
SO
$29,394,t83
Develo er FeelOverheadlPmft
$1,BW,0a
$1,a9],0H0
$302,926
$1,564,1]9
$1,66].099
Total DBVBO Br COefe
$1,68),OBB
$0
$1,88),099
$0
E302,926
$0
$0
$0
$1,58q,1 )4
5166],OBB
TOTAL DEVELOPMENT COST
$29,612,662
$1,665,620
$3t,281,202
$15,1o5,W2
$8,095,352
$4J00,000
$1,300,000
$496,T34
t1,5a4,94
$$31,P81,282
Exhibit F:
Scope of
Work/Schedule of
Performance
EXHIBIT F
SCOPE OF WORK & SCHEDULE OF PERFORMANCE
SCOPE OF WORK
The project includes construction of a 51-unit affordable residential community for large
families, rehabilitation of the existing commercial buildings at the north and east portions
of the site, new site amenities, landscaping and improvements to Fifth and Hawley
streets.
The residential portion of the project includes demolition of the existing, vacant
mechanic shop at 2237 West Fifth Street (corner of Fifth and Hawley streets) to
construct the residential rental community. The residential community includes three
levels of stick framed units on top of an on -grade podium parking garage. The ground
floor level will contain community space for services and activities, services and
property management offices along Fifth Street. A secured parking garage for residents
is tucked behind the street facing community space. The second level includes a
courtyard with playground equipment, outdoor BBQ area, an artificial turf recreation
area and clubhouse. The structure has been designed in a contemporary Mexican
architectural style that incorporates large facades, repetitive window placement, with
natural vegetation and public art.
The commercial component of the project is the renovation of the existing commercial
center at 2223 West Fifth Street. Improvements to the storefront facades include new
windows, signage, paint, siding, HVAC, parking area and driveway. These
improvements will establish a uniform contemporary architectural style among all
buildings on the project site and improve the existing businesses' ability to attract new
customers.
The site improvements component of the project also includes new landscape and
hardscape, as well as the construction of a new mini -park between the two commercial
buildings. Additional site upgrades include construction of community garden spaces
behind the commercial buildings, outdoor play equipment in the residential courtyard, an
entry plaza at the new residential structure, running track around the exterior of the site
and an outdoor fitness area. The proposed landscape palette includes drought -tolerant
plants, and hardscape complement the contemporary architectural style of the buildings.
New sidewalks, curbs, and street trees will be constructed or installed along the
project's frontages on both streets.
II. SCHEDULE OF PERFORMANCE
Conditions Prior to Disbursement. The City/Agency Loan Agreements shall
provide that each of the following conditions shall be met prior to the disbursement
of any portion of the Loans:
PERMITS. All grading permits shall have been issued and the City shall have
issued a letter stating that building permits are ready to issue, subject only to
payment of fees and the completion of grading of the Project site.
b. FINANCING. Developer shall have secured all necessary financing and funding
for the construction and operation of the Project. Such financing and funding
shall be sufficient to pay all Project development costs, through lease -up, as set
forth in a final budget consistent with the approved Proforma (or as otherwise
approved by the City/Agency).
c. INSURANCE. The Developer shall have provided evidence to the City/Agency
that the. Developer has obtained insurance policies and certificates or
endorsements acceptable to the City/Agency, as described in the Loan
Agreements.
d. SECURITY. The Developer shall have provided construction security in favor of
the City/Agency, which may include a completion guarantee from Community
Development Partners and/or a letter of credit and/or performance & payment
bonds from the general contractor for the Project (or some combination of these),
in an amount sufficient to ensure the Project will be completed and placed in
service within the time set forth in the Project schedule approved by the
City/Agency.
e. APPROVALS. Developer shall submit and obtain the City Manager / Executive
Director of the Housing Authority's approval of the following:
1. Construction Contract
2. Limited partnership agreement for the limited partnership entity to be
formed to own and operate the Project
3. Management plan for the Project
4. Marketing plan for the Project
5. Tenant selection plan for the Project.
2. Commencement of Construction of the Improvements. Developer shall cause
the Construction of the Improvements to be commenced by Contractor no later than
June 1, 2019
3. Completion of Construction of Residential Improvements. Developer shall
complete all work of the Construction of the Residential Improvements on or before
February 1, 2021 (subject to extension by City based upon substantial progress
toward completion of construction by Developer).
4. Completion of Construction of the Improvements. Developer shall complete all
work of the Construction of the Improvements on or before February 1, 2021
(subject to extension by City based upon substantial progress toward completion of
construction by Developer).
The Schedule of Performance is subject to revision from time to time as mutually
agreed upon in writing between Developer and the City Manager or his/her designee
("City Manager"), and City Manager is authorized on behalf of City to agree to make
such revisions as he deems reasonably necessary. The City Manager, in his/her sole
discretion, may elect to bring to the City Council for consideration and action any
modifications to this Schedule of Performance. It is understood that the Schedule of
Performance is subject to all of the terms and conditions set forth in the text of the
Agreement. The summary of the items of performance in the Schedule of Performance
is not intended to supersede or modify the more complete description in the text of the
Agreement; in the event of any inconsistency between the Schedule of Performance
and the text of the Agreement, the text shall govern. In the event the City Manager
deems it necessary to bring to City Council for consideration one or more modifications
to this Schedule of Performance, the discretion to do so is expressly reserved to the
City Manager. The time periods set forth herein for City approval of plans and drawings
and other submittals that are submitted to City by Developer shall only apply and
commence upon Developer's complete submittal of all the required information. In no
event shall an incomplete submittal by Developer trigger any City obligations of review
and/or approval hereunder; provided, however, that City shall notify Developer of an
incomplete submittal as soon as is practicable and in no event later than the applicable
time set forth for City action on the particular item in question. If any of the foregoing
performance measurements are not met then it will be deemed a default as defined in
Section 20 and any remedies shall be cured according to said Section of the
Agreement.
Exhibit Go.
Form of Residual
Receipts Report
EXHIBIT G
FORM OF RESIDUAL RECEIPTS REPORT
Community Development Agency of the City of Santa Ana
Residual Receipts Report
for the Year Ending,
Date Prepared
Please complete the following information and execute the certification at the bottom of this form.
Annual Project Revenue
Please report Annual Project Revenue for the year ending on the following lines:
Rent Payments (including Section 8 tenant assistance payments, if any) (1)
Interest Income (do naLinclude interest income from replacement and operating
reserves nor interest income on tenant security deposits) (2) $
Additional Income (for example, vending machine income, tenant forfeited
deposits, laundry income not paid to the residents' association) (3)
Total Annual Project Revenue (Add lines 1, 2, and 3) (4)
Operating Expenses'
Please report Operating Expenses incurred for the year ending _
on the following lines:
Operating and Maintenance Expenses (5)
Utilities (6)
Property Management Expenses and On -Site Staff Payroll (7)
Administrative Expenses (8)
Property Taxes (9)
Insurance (10)
Other Expenses
Please list these expenses:
Total Annual Operating Expenses for the Housing Project
(Add lines 5, 6, 7, 8, 9, 10, and 11)
Net Operating Income (Subtract Line 12 from Line 4)
Do not include expense unrelated to the operation ofthe Rental Portion of the
Project, such as depreciation, amortization, accrued principal and interest
expense on deferred payment debt, or capital expenditures.
Additional Cash Flow Payments
Obligated First Mortgage Debt Service Payments (as approved by the Agency and
other parties that may have such approval rights) and Obligated Secondary
Subordinate Debt Service Payments (as approved by the Agency and other parties
that may have such approval rights)
Scheduled Deposits to Reserves (as approved by the Agency)
Additional Payment Obligations (such as partnership management fees, deferred
developer fees, or repayments on loans to partners, as approved by the Agency to
have priority over Residual Receipt Payment to the Agency)
Total Additional Cash Flow Payments (Add lines 14, 15, and 16)
Residual Receipts for Year Ending
(Subtract Line 17 from Line 13)
Percentage of Residual Receipts to be Paid to the Agency (as shown in the
Promissory Note by and between the Agency and Borrower dated
Amount Payable to the Agency (Multiply Line 18 by Line 19)
(12) $
(13)
(14) $
The amount payable to the Agency listed on Line 20 is subject to payment according to the terms of the
Promissory Note by and between the Agency and Borrower dated . If Line 20 is
$0.00 or negative, you owe nothing to the Agency this year. If Line 20 is a positive number, remit check
payable to and attach to this report.