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CONDITIONAL GRANT AGREEMENT
INCLUSIONARY HOUSING PROGRAM
A-2020-264
THIS CONDITIONAL GRANT AGREEMENT ("Agreement") dated, for
identification purposes only, as of November 17, 2020, is made and entered into by and
between the City of Santa Ana, a charter city and municipal corporation ('City"), and
Habitat for Humanity of Orange County, a nonprofit organization ("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 XV IILI of the Santa Ana Municipal Code ("SAMC"). The Ordinance
was amended by the City Council on September 1, 2015 (Ordinance No. NS-2881), on
October 6, 2015 (Ordinance No. NS-2885), and on September 1, 2020 (Ordinance No. NS-
2994). 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. The Developer, Habitat for Humanity of Orange County, a nonprofit
organization ("Habitat for Humanity") requested financial assistance in connection with
the proposed development of two (2) single-family detached homes restricted for sale to
moderate income families eaming no more than 120% of the Orange County Area Median
Income ("Project") to be located at 416 Vance Street (APN 398-041-18) and 826 N. Lacy
Street (APN 398-041-22) (collectively, the "Property"). The two (2) units will be affordable
to family households earning no more than 120% of the Area Median Income ("AMI").
C. On March 5, 2019, the City of Santa Ana authorized the City Manager and the
Clerk of the Council to execute a pre -loan commitment letter with Habitat for Humanity of
Orange County for $231,494 in Inclusionary Housing Funds for the development of the Project
located at 416 Vance Street (APN 398-041-18) and 826 N. Lacy Street (APN 398-041-22),
subject to non -substantive changes approved by the City Manager and City Attorney.
D. On November 17, 2020, the Santa Ana City Council agreed to change the terms
of the pre -loan commitment from a loan to a conditional grant.
E. The amount of the Conditional Inclusionary Grant was determined based
upon the City's review of the Developer's request for the receipt of the Inclusionary Grant
and the development proforma and projected cash flows for the Project submitted by the
Developer to the City ("Profomma"). The City Project Manager has authority to approve
revised development proformas and projected cash flows for the Project; provided,
however, that the Inclusionary Grant is not materially increased or extended.
"County" means the County of Orange, California.
"Developer" means Habitat for Humanity of Orange Cormty, a nonprofit
organization.
"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 sec., 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.
"Rousing 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 Grant" or "Inclusionary City Grant" means a grant in the
original principal amount of up to two hundred, thirty-one thousand, four hundred and
ninety-four dollars ($231,494) to be made to Developer by the City to be funded
exclusively from the Inclusionary Housing Fund.
"Indemnitees" has the meaning set forth in Section 11.5.
"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.
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"Project" means the construction of the Improvements generally described
in the attached Exhibit A upon the Property by Developer pursuant to this Agreement.
"Project Budget" means the line -item budget for the Project attached
hereto as Exhibit C, as modified from time to time in accordance with this Agreement.
"Property" means the property that is located at 416 Vance Street (APN
398-041-18) and 826 N. Lacy Street (APN 398-041-22), Santa Ana, CA 92701 in the City of
Santa Ana.
"Scope of Work/Schedule of Performance" means the detailed statement
of the work to be performed by Developer on and to the Property for the Project pursuant
to this Agreement, along with the Schedule of Performance setting forth timeframes for
certain tasks, which document is attached hereto as Exhibit B.
"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
Inclusionaiy Grant for payment of a portion of the 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 instrument that the Senior Lender requires in connection
with the Senior Loan.
1.2 SinEular and Plural Terms. Any defined term used in the plural in this
Agreement shall refer to all members of the relevant class and any defied 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 document 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.
C
2. SCOPE OF WORK/PROJECT BUDGET
The Project is generally described in the attached Exhibit A. The "Scope of Work"
and "Schedule of Performance" for the Project is attached hereto as Exhibit B. 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 for the Project and timeframes for approvals of such work.
A line -item budget for the Project, including a surmnary of statement of sources
and uses of funds, is incorporated into Exhibit C ("Project Budget").
3. CONDITIONAL INCLUSIONARY GRANT:
Provided Developer constructs the Project according to the Scope of Work and
Schedule of Performance, the Developer will be subject to no repayment obligation. Upon
the City's issuance of a Certificate of Completion, this Agreement shall automatically
terminate. In the event the Project is not constructed in compliance with the Scope of Work
and Schedule of Performance within two (2) years from the date of the first disbursement
of the Grant finds, the City may terminate this Agreement and may seek repayment of
Inclusionary Grant monies not expended on development and constriction of the Project
pursuant to the default remedy provisions of this Agreement set forth in Section 6.1.
3.1. Inclusionary Funds:
(a) Amount and Purpose. Subject to the terms and conditions of this
Agreement, City agrees to make a grant to Developer from the Inclusionary Housing Fund
in the principal amount of up to two hundred, thirty-one thousand, four hundred and ninety-
four dollars ($231,494) for the development and construction of the Project.
4. CONDITIONS TO DISBURSEMENT OF GRANT PROCEEDS
4.1 Conditions Precedent. City's obligation to disburse the grant is subject to
the satisfaction of the following conditions precedent:
(a) City Council. Review, approval and execution of this Agreement,
the Affordability and Maintenance Restrictions, and of the Ground Leases for the two
Property parcels 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.
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(d) Recordation of Affordability Restrictions. The finding of two
hundred, thirty-one thousand, four hundred and ninety-four dollars ($231,494) is from the
Inclusionary Housing Fund. The two (2) "Housing Units" at the Project shall and will be
restricted to an affordable home purchase price based on the California Health and Safety
Code Section 50052.5 calculation methodology and the median incomes distributed by
HUD. The Property shall remain affordable for a period of not less than ninety-nine (99)
years recorded against the Project in the Official Records, County of Orange, California,
as required by the Ground Leases.
(e) 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 full force and effect.
(1) Representations and Warranties. The representations and warranties
of Developer contained in this Agreement shall be correct in all material respects as of the
date of disbursement 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.
(g) 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.
(h) The City's obligation to provide the Conditional Inclusionary Grant
is and shall remain subject to all covenants, conditions, and restrictions set forth in this
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.
4.2 Disbursement Procedures for Grant. The Conditional Inclusionary Grant
proceeds shall be disbursed to Developer to finance the development and construction of the
Project (as evidenced in the Project Budget, attached as Exhibit Q. The Inclusionary Grant
proceeds shall not be used for anypurpose other than for 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).
4.3 First Disbursement. City's obligation to make the first disbursement of the
Grant, which first disbursement shall be ninety percent (90%) of the Grant funds, 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, 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 construction 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 fi•om 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.
4.4 Termination for Failure of Condition. If (a) any of the conditions
precedent set forth herein are not timely satisfied within two (2) years of the date of this
Agreement (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, the City shall not be obligated to pay to Developer any grant or other amounts owing
under the Agreement, and Developer shall be required to return to the City any funds not
expended on the Project as of the date of the notice of termination.
4.5 Any Disbursement. City's obligation to make any disbursement of the
Grant, including the test and final disbursements, is subject to the satisfaction of the
following conditions precedent:
(a) Satisfactory Progress. 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. The City Project Manager reasonably believes
that no event has occurred 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;.
(c) Representations and Warranties The representations and warranties
of Developer contained in this Agreement 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.
4.6 Final Disbursement. City's obligation to disburse that portion of the Grant
funds retained pursuant to Section 6.12 (the final ten percent (10%) of the Grant funds) 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, or similar document as
applicable, 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.
4.7 Waiver of Conditions. The conditions set forth pertaining to City's
obligation to make disbursements of the Grant 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.
4.8 Manner of Disbursement. City may make any disbursement by check or
wire transfer payable to Developer.
4.9 Waiver of Disbursement Conditions. Unless City otherwise agrees in
writing, the making 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.
4.10 Other Terms and Conditions of Grant.
(a) Any disbursed Grant amounts not already expended for development and
construction shall become immediately due and payable by Developer back to City, in the
event of any of the following:
(1) Failure to complete the Project within two (2) years of the date of the first
disbursement, unless extended due to Force Majeue 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.
4.11 Costs and Fees. Developer shall pay all recording fees and charges on any
document recorded pursuant to this Agreement.
5. USE AND MAINTENANCE OF THE PROPERTY
5.1 Reserved,
5.2 Reserved.
5.3 Maintenance of the Property. During construction of the homes, 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. Following the Certificate of
Completion for construction of the homes, the Property maintenance shall be governed by the
provisions of the Ground Leases and Affordability and Maintenance Restrictions.
5.4 Oblieation to Refrain from Discrimination. Developer covenants and agrees
for itself, its successors, its assigns and every successor in interest to the Property or any pail;
thereof, that there shall be no discrinnination 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 development and construction of the Property nor shall Developer itself
or any person claiming under or through him establish or pennit any such practice or practices
of discrimination or segregation with reference to the development and construction of the
Property. The foregoing covenants shall run with the land and shall remain in effect until
termination of the Agreement. Following the Certificate of Completion for construction of
the homes, the Developer's obligation to refrain from discrimination shall be governed by the
provisions of the Ground Leases and Affordability and Maintenance Restrictions.
5.4.1 In Employment. hi 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 anedstiy. 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.
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5.4.2 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.
6. DEFAULTS AND REMEDIES
6.1 Event of Default. Failure or delay by either party to perform any material
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 material 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 carmot reasonably be cured within thirty (30) days, in which case Developer shall
have such additional time as reasonably necessary to complete such cue 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, at which time Developer would be required to
repay any portion of the Grant proceeds disbursed to Developer not already expended for
development and construction of the Project pursuant to the Project Budget and the City may
enforce the Developer's construction security to complete those portions of the Project not
already completed.
6.2 City Remedies for Default. Upon termination of this Agreement for
Developer default, should the Developer not provide repayment of available unexpended
Grant proceeds or should Developer prevent City resort to the construction security, the City,
as its sole remedy, shall be entitled to foreclose on the construction security and to cause
completion of the Project, and all Developer obligations under this Agreement shall cease.
6.3 Limitation of Developer Remedies. 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 fuh e
income, profits or assets.
6.4 Liability. Developer shall have liability under this Agreement for any
judgment, decree or order for the payment of money obtained in any action to enforce the
obligation of Developer to repay grant.
GENERAL PROVISIONS AND WARRANTIES
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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:
7.1 Formation, Qualification and Compliance. Habitat for Humanity is a
nonprofit organization. Developer is in compliance with all laws applicable to its business
and has obtained all approvals, licenses, exemptions and other authorizations fiom, and has
accomplished all filings, registrations and qualifications with, any Governmental Authority
that are necessary for the transaction of its business.
7.2 Execution and Performance of Inclusionary Grant Documents.
7.2.1 Developer has all requisite authority to execute and perform its
obligations under this Agreement.
7.2.2 The execution and delivery by Developer of, and the performance
by Developer of its obligations under, this Agreement 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 this Agreement and under the
contemplated the Senior 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.
7.2.3 Developer is not in default, in any respect that is materially
adverse to the interests of City mxler this Agreement 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.
7.2.4 Except for the development and construction permitting
contemplated to be subsequently obtained under this Agreement, no approval, license,
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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 the execution by Developer of, and the performance by Developer of its obligations
under, this Agreement.
7.3 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 Grant (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 famished to City by the Developer or any affiliate thereof with
respect to Developer, in connection with the Grant, 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.
7.4 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, except for Senior Loan Documents that have been disclosed
to the 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.
7.5 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.
7.6 Governmental Requirements. Except for the development and
construction permitting contemplated to be subsequently obtained under this Agreement,
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 reap 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
environmental impact statements and reports; use, occupancy and building permit
requirements; and public utilities requirements.
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7.7 Rights 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 as may be shown on title for the Property
T8 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.
7.9 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.
7.10 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.
7.11 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 so cb 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.
7.12 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.
7.13 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 assigmnent by a limited partner of
Developer to an affiliate, for the inclusion of tax credit investors in the Agreement.
7.14 Applicable Law. This Agreement shall be interpreted, governed and
enforced under federal and California state law with venue in Orange County, California.
7.15 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
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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.
8. CONDITIONS FOR CONSTRUCTION
8.1 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. Developer shall follow Best Management Practices, as applicable, during
construction.
8.2 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 fiilly 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.
8.3 Entry and Inspection. At all times prior to completion of the construction,
upon reasonable prior written notice and subject to reasonable job site safety rules, 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 (e) the right to inspect and
copy all documents pertaining to the construction.
8.4 Construction Information. From time to time, as needed, 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.
8.5 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.
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8.6 Prevailin2 Waees.
8.6.1 DEVELOPER SHALL ASSUME ANY AND ALL
RESPONSIBILITY AND BE SOLELY RESPONSIBLE FOR DETERMINING WHETHER
OR NOT LABORERS EMPLOYED RELATIVE TO THE CONSTRUCTION OR
INSTALLATION OF THE PROJECT MUST BE PAID THE PREVAILING PER DIEM
WAGE RATE. FOR THEIR LABOR CLASSIFICATION, AS DETERMINED BY THE
STATE, PURSUANT TO LABOR CODE SECTIONS 1720, ET SEQ.
8.6.2 DEVELOPER, ON BEHALF OF ITSELF, ITS SUCCESSORS, AND
ASSIGNS, WAIVES AND RELEASES THE CITY FROM ANY RIGHT OF ACTION THAT
MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO LABOR CODE SECTION
1781. DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE
SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS
SECTION 8.6, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR IIER SETTLEMENT WITH THE
DEBTOR.
8.6.3 BY INITIALING BELOW, DEVELOPER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF TFIIS SECTION 8.6:
8.6.4 ADDITIONALLY, DEVELOPER SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS THE CITY AGAINST ANY CLAIMS PURSUANT TO LABOR
CODE SECTION 1781 ARISING FROM THIS AGREEMENT OR THE CONSTRUCTION
OR INSTALLATION OF ALL OR ANY PORTION OF THE PROJECT.
8.7 Developer's Assurance of Construction Completion. Prior to
commencement of construction of the Project Improvements, Developer shall furnish to City
evidence that assures Developer that sufficient monies will be available to complete the
proposed construction. The amount of money available shall be at least the total estimated
construction cost. Such evidence may take one of the following forms:
8.7.1. Performance bond and labor and materials bond in a principal sum equal
to the total estimated construction cost supplied by Contractor or subcontractors, provided said
bonds are issued jointly to Developer, City and any Senior Lenders as obligees.
8.7.2. brrevocable letter of credit issued to City from a financial itnstilatien to
be in effect until City acknowledges satisfactory Completion of Construction;
8.7.3. Cash deposited with the City (may be in the form of cashier's check or
money order or may be electronically deposited);
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8.7.4. A completion guaranty, in favor of City from an Affiliate of Developer,
in a form reasonably acceptable to City, coupled with a repayment guaranty in favor of the
Senior construction Lender for its loan;
8.7.5. Any combination of the above.
All bonds and letters of credit must be issued by a company qualified to do business in the
State of California and acceptable to City. All bonds and letters of credit shall be in a form
acceptable to the City's Risk Manager in its reasonable discretion, and shall insure faithful and
full observance and performance by Developer of all terms, conditions, covenants, and
agreements relating to the construction of improvements within the Property.
Developer shall provide or cause its Contractor to provide payment and/or performance bonds
in connection with the construction of the Project Improvements, and shall name the City as
an additional obligee on, with the right to enforce, any such bonds.
9. PROJECT COVENANTS
9.1 Local Sourcing Plan. Developer agrees to make a good faith effort to
encourage subcontractors 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.
9.2 Lead -Based Paint. Developer shall comply with the requirements, as
applicable of the Lead -Based Paint Poisoning Prevention Act.
9.3 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.
9.4 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 minimum
construction standards.
9.5 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.
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9.6 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 homeowner selection
process, a security systern and crime prevention program, the procedures for the sale of the
units, the rules and regulations for the Property and manner of enforcement, an operating
budget, the identity and emergency contact information of the professional property
manager who will provide property management services for the Property, and other
matters relevant to the management of the Property.
9.7 Crime Free Housing. Developer shall work with City staff to develop a
crime free housing policy, procedure, and design plan.
9.8 Onsite Parking. Developer shall provide onsite parking for residents and
visitors of the Project as required by the building code requirements.
9.9 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.
9.10 Right to Work and Minimum Wage Laws.
9.10.2. Pursuant to the United States of America Fair Labor Standard Act
of 1938, as amended, and State of California Labor Code, Section 1178.5, Developer shall
pay no less than the greater of the Federal or California Minimum Wage to all its employees
that directly or indirectly service the Property, in any manner whatsoever. Developer shall
require and verify that all its subcontractors or other persons servicing the Property on
behalf of the Developer also pay their employees no less than the greater of the Federal or
California Minimum Wage.
9.10.3. Developer shall comply and verify that its subcontractors comply
with all other Federal and State of California laws for minimum wage, overtime pay, record
keeping, and child labor standards pursuant to the servicing of the Property or terms and
conditions of this Lease
10. ENVIRONMENTAL MATTERS
10.1 Representation and Warranty. Except as disclosed in writing to the City,
Developer represents that it 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.
10.2 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
IR
liens imposed pursuant to any environmental law; and, (d) obtain and renew all
environmental permits required for ownership or use of the Property.
10.3 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 construction of
the homes and the routine operation and maintenance of the Property.
10.4 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 enviromnental claim against the Property or Developer.
10.5 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
any Hazardous Materials on the Property, other than resulting from the gross negligence or
willful misconduct of any Indemnitee.
11. OTHER AFFIRMATIVE COVENANTS
The following provisions shall apply, except to the extent that City Project Manager
otherwise consents in writing:
11.1 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.
11.2 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) I 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;
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(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;
(f) 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.
11.3 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 this Agreement.
12. OTHER COVENANTS
The following provisions shall apply, except to the extent that the City Project
Manager otherwise consents in writing:
12.1 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.
12.2 Sale or Lease of Property. Developer shall not sell, lease (other than to
qualified homeowners 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 sole discretion. In connection with the foregoing consent requirements,
Developer aclanowledges 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.
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13. 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 furnish 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 "notice of completion" referred to in Section
3093 of the California Civil Code.
14. INDEMNIFICATION
14.1 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 grantor. 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 performance of the construction work; (ii) architects, contractors, subcontractors and
materialmen, or the worlananship 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
information 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 this Agreement: (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 Grant 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
21
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 this Agreement, 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.
14.2 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 Grant(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. Developer's obligations under this Section shall survive the
issuance of the Certificate of Completion, and termination of this Agreement.
14.2.1 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 the Grant.
14.3 Reimbursement of City. With respect to the indemnification obligations
under this Article 14, ,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 Grant
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
Grant Documents. Such reimbursement obligations shall bear interest from the date
occurring twenty (20) days after City gives written demand to Developer. Such
reimbursement obligations shall survive the issuance of a Certificate of Completion and
termination of this Agreement.
15. INSURANCE, CASUALTY AND CONDEMNATION
15.1 Policies Required. 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:
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(a) worker's compensation insurance and any other insurance required
by law in connection with the construction;
(b) 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) 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 construction 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.
The City Attorney may modify the type and amounts of insurance required pursuant
to this Section if the requirements of the City changes.
15.2 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 Condennation. Developer shall take all action reasonably required by City
23
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.
15.3 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.
15.4 Application of Casualty Insurance Proceeds. Subject to any superior
rights of the Senior Lender, 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)) 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 Grant 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 manner 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.
15.5 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
24
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 lien on the Property, as they elect in their sole and absolute discretion.
15.6 Failure to Satisfy Conditions. In the event that Developer fails to fulfill
the Restoration Conditions within one hundred and eighty (180) days (unless extended
pursuant to Section 15.4) 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.
15.7 Restoration. Nothing in this Article 15 shall be construed to excuse
Developer from repairing and restoring all damage to the Property in accordance with other
Grant Document provisions.
15.8 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
repay the Grant. If so applied, any award in excess of the Grant repayment 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.
15.8.1 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.
15.9 Waiver of Subrosation. 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; provided, however, that this waiver of
subrogation shall not be effective with respect to any insurance policy if the coverage
theretmder 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.
16. DEFAULTS AND REMEDIES
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16.1 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 perform any obligation for the payment of
money under this Agreement, 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;
(b) Developer fails to perform any obligation (other than the
obligations described in subparagraph (a) above) under this Agreement, 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;
(c) Any representation or warranty in this Agreement proves to
have been incorrect in any material respect when made;
(d) 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;
(e) 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);
(f) 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;
(g) 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;
(h) 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
M
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
(i)
Notwithstanding anything to the contrary contained herein, City hereby agrees that
any cure of any default made or tendered under this Agreement by an entity on behalf of
Developer 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.
16.2 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 balance of all amounts
owing under this Agreement, 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 16.1 (d) shall
automatically, without notice or other action on City's part, cause all such amounts to be
immediately due and payable;
(b) By written notice to Develop, require repayment of all or some portion
of the Grant proceeds disbursed to Developer back to the City proportionate to the scale and
duration of the uncorrected noncompliance relative to the 99-year Term of Affordability;
(c) 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;
(d) Exercise any of its rights under this Agreement 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,
(e) Suspend or terminate the award of City funds if Developer fails to
comply with any term of such award.
16.3 Cumulative Remedies: No Waiver. City's rights and remedies under the
Grant Documents are cumulative and in addition to all rights and rcnedies 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
27
and to the extent stated. No waiver of any provision of any Grant 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 performance shall not
constitute a waiver by City of any rights.
17. MISCELLANEOUS
17.1 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 Grant 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 this Agreement; 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 wider this Agreement.
17.2 Notices. All notices, demands, approvals and other communications
provided for in this Agreement 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: Habitat for Humanity of Orange County
2200 S. Ritchey Street
Santa Ana, CA 92705
Attention: Executive Director or Chief Executive Officer
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.
R3
17.3 Survival of Representations and Warranties. All representations and
warranties in this Agreement shall survive the making of the Grant(s) described herein until
the City determination of Completion of Construction and have been or will be relied on
by City notwithstanding any investigation made by either party.
17.4 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.
17.5 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 this Agreement 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.
17.6 Prior Agreements; Amendments; Consents. This Agreement contains
the entire agreement between the City and Developer with respect to the Grant, and all
prior negotiations, understandings and agreements are superseded by this Agreement. No
modification of this Agreement (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.
17.7 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California. 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. Assuming proper service of
process, Developer also waives any objection regarding personal or in rem jurisdiction or
venue.
17.8 Severability of Provisions. No provision of this Agreement that is held to
be unenforceable or invalid shall affect the remaining provisions, and to this end all
provisions of this Agreement are hereby declared to be severable.
17.9 Headings. Article and section headings are included in this Agreement for
convenience of reference only and shall not be used in construing this Agreement.
17.10 Conflicts. In the event of any conflict between the provisions of this
Agreement and those of the Ground Lease or the Affordability and Maintenance
Restrictions, this Agreement, unless otherwise expressly provided, shall prevail; provided
however that, with respect to any matter addressed in the other such documents, the fact
that one document provides for greater, lesser or different rights or obligations than the
29
others shall not be deemed a conflict unless the applicable provisions are inconsistent and
could not be simultaneously enforced or performed.
17.11 Time of the Essence. Time is of the essence under this Agreement and in
the performance of every term, covenant, and obligation contained herein.
17.12 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.
17.13 Warranty Asainst 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.
17.14 Plans and Data. Where Developer does not proceed with the work and
construction 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.
17.15 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.
{Signatures onfollowingpage)
30
A-2020-264
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the date set forth at the beginning of this Agreement.
ATTEST:
Daisy Gomez
Clerk of the Council
APPROVED AS TO FORM
Sonia R. Caivalho
City Atttoi iey
I0
City
RECOMMENDED FOR APPROVAL
Steven A. Mendoza
Executive Director
Community Development Agency
CITY OF SANTA ANA
Kfistine Ridge
City Manager
(Signatures continue on following page)
31
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 December 17, 2020 before me, Claudia M. Fernandez -Shaw, Notary Public
(insert name and title of the officer)
personally appeared Kristine Ridge
who proved tome on the basis of satisfactory evidence to be the person ) whose name /are--
subscribed to the within instrument and acknowledged to me tha xecuted the same in
y(kQj44eirauthorized capacity), and that by-M��C t signatureV on the instrument the
personA, or the entity upon behalf of which the personA 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.
.,,� CLAUDIA M. FERNANDEZ-SHAW
WITNESS my han d official seal. NotaryPublic— California
_ Orange Count >
Commission B 2228084
M Comm. Eapire9 Jan 25. 2022
DEVELOPER:
Habitat for Humanity of Orange County, Inc.,
a California nonprofit religious corporation
By. !l4%�/l/
aron Ellis
Its: President/CEO
32
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California )
) ss.
County of Orange )
On ]eGEM'bER 1 2020, before me, Rita A. Ross, a Notary Public, personally
(Here Inert IHe name and H&.f IHeoffi—)
appeared SH? 1!P J �uj-s
who proved to me on the basis of satisfactory evidence to be the person(-,) whose name( 3are
subscribed to the within instrument and acknowledged to me that he sh f;;tey executed the
same in dt6r authorized capacity("), and that by his r signature($) on the
instrument the person*), or the entity upon behalf of which the person(g) 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.
Signature
ROSS
hand and of 'cial seal.RITA Public
- Cal
Notary Pu61ic -California
^ Orange County
/ I Commission: 2282009
_ My Comm. Expires Apr 15, 2023 a
[Seal]
Attached to: i
EXHIBITS
A. The Project
B. Scope of Work / Schedule of Performance
C. Project Budget
D. Best Management Practices
33
EXHIBIT A
THE PROJECT
The proposed project includes the development of two (2) single-family detached homes
restricted for sale to moderate income families earning no more than 120% of the Orange
County Area Median Income. The project location is at the SW corner of Lacy and Vance
Streets and is comprised of two single-family lots within the "Historic French Park"
community.
Construction will consist of two (2) single-family detached homes. The design and
constriction of the homes shall reflect the architectural elements and finishes that are present
in the "Historic French Park" community. Habitat for Humanity will create two distinct floor
plans for this project whose sizes are proportionate to the approximately 7,500 sq. ft. lots on
which they will be built. Specifically, the two (2) single-family detached homes will consist
of:
• A single -story "Craftsman -style" home. This residence will be a three bedroom, two
and a half bath of approximately 1,500 sq. ft.
A second home that will be influenced by the "Victorian -Style" of architecture. This
will be a two-story residence with four bedrooms and three bathrooms and will be
approximately 1,700 sq. ft.
These homes will be made available to qualifying moderate income families (up to 120% of
Area Median Income). Construction will comply with all City of Santa Ana building
standards, as well as the "Historic French Park" community. The project will comply with
the design guidelines of the French Park Historic District and will require review by the
French Park Design Committee.
The construction of all required improvements associated with the development will be the
responsibility of Habitat for Humanity. Materials will include composite roofing material,
wood, or simulated wood siding, concrete -paving surfaces, and professionally designed
landscape. The two homes will be constructed concurrently.
34
EXHIBIT B
SCOPE OF WORI{/SCHEDULE OF PERFORMANCE
35
Exhibit B
Scope of Work/Schedule of Performance
Scope of Work
The scope of work shall include the preparation of plans, processing for permits, all
necessary site work for the construction of two single-family homes with detached
garages, and front -yard landscaping/fencing.
Schedule of Performance
Months
Site Acquisition/Due Diligence
3
Preparation of Plans
3
City Processing/Permits
4
Grading/Site Improvements
2
House Construction
10
Home Sales
2
Total Schedule
24
EXHIBIT C
PROJECT BUDGET
36
Exhibit C
Project Budget/Sources & Uses
Project Budget:
Site Improvements
155,000
Impact Fees
50,000
Direct Construction
404,000
Indirect Construction
336,000
Insurance
21,000
Finance
33,000
Overhead
157,000
Warranty
20,000
Contingency
40,000
1,216,000
Sources
City Grant
231,494
Habitat Fundraising
284,506
Construction Loan
700,000
Total Sources
1,216,000
Uses:
Site Improvements
155,000
Impact Fees
50,000
Direct Construction
404,000
Indirects/Soft Costs
607,000
Total Uses
1,216,000
EXHIBIT D
BEST MANAGEMENT PRACTICES
("BMPs" Fact Sheets)
Best Management Practices can be found at: http://www.ocwatersheds.coin/documents/ in
which website may change from time to time.
BMPs apply to the Project and BMPs also apply to Developer and its subcontractors,
therefore Developer shall be responsible and shall cause its subcontractors to be responsible
for implementing and complying with all BMP Fact Sheet requirements that apply to
construction activity with respect to the Project, and also including, without limiting the
generality of the foregoing, site preparation, landscaping, installation of utilities, street
construction or improvement and grading or filling in or on the Property. Developer is to be
aware that the BMP clause within this Lease, along with all related BMP Exhibits, may be
revised, and may incorporate more than what is initially being presented in this Agreement.
Suggested BMPs Fact Sheets may include, but may not be limited to, the following list
shown below and can be found at:
http://www.ocwatersheds com/documents/bmp/industrialcoim-nercialbusinessesactivities
(which website may change from time to time):
IC3 Building Maintenance
IC4 Carpet Cleaning
IC6 Contaminated or Erodible Surface Areas
IC7 Landscape Maintenance
IC9 Outdoor Drainage from Indoor Areas
IC10 Outdoor Loading/Unloading of Materials
IC12 Outdoor Storage of Raw Materials, Products, and Containers
IC14 Painting, Finishing, and Coatings of Vehicles, Boats, Buildings, and Equipment
IC15 Parking & Storage Area Maintenance
IC17 Spill Prevention and Cleanup
IC21 Waste Handling and Disposal
IC22 Eating and Drinking Establishments
IC23 Fire Sprinkler Testing/Maintenance
IC24 Wastewater Disposal Guidelines
37
CONDITIONAL GRANT AGREEMENT
by and between the
CITY OF SANTA ANA
and
HABITAT FOR HUMANITY OF ORANGE COUNTY, a nonprofit organization
41.6 Vance Street (APN 398-041-18) and 826 N. Lacy Street (APN 398-041-22)
Dated: November 17, 2020