HomeMy WebLinkAboutWASHINGTON SANTA ANA HOUSING PARTNERS, L (4).Pr ail)
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`4 City of Santa Ana 202200025926612:43 pm 07/26/22
106 407A R29 25
Clerk of the Council 0.00 0.00 0.00 0.00 72.00 0.00 0.000.000.00 0.00
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
SPACEABOVETBIS LINE FORRECORDING USE`II
FREE RECORDING REQUESTED `JJJ
INSURANCE NOT REQUIRED [Government Code Section6t631j
WORK MAY PROCEED Z?SY3 U'J/
CLERK OF COUNCIL A-2022-133-02
DATE: NEIGHBORHOOD STABILIZATION PROGRAM
0. AFFORDABILITY RESTRICTIONS
Cp frCO) WV1 ON TRANSFER OF PROPERTY
( Cla`Aly"I'L (1126, 1136 & 1146 East Washington Avenue, Santa Ana, California)
THESE NEIGHBORHOOD STABILIZATION PROGRAM (NSP)
AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (the
"Restrictions") are entered into as of July 21, 2022, by and between and Washington Santa
Ana Housing Partners, L.P., a California limited partnership ("Developer"), and the City
of Santa Ana, a charter city and municipal corporation ("City").
IJIKNYIVIC`A
A. The Housing Authority of the City of Santa Ana ("Housing Authority") owns one
parcel located at 1136 East Washington Avenue (APN 398-092-14) totaling approximately
1.43 acres of land area ("Housing Authority Parcel'). The County of Orange ("County")
owns an adjacent parcel (APN 398-092-13) totaling approximately 0.85 acres of land area
("County Parcel'). The two parcels will be merged into one parcel ("Property") and co -
owned by the Housing Authority and the County as Tenants -In -Common. The Property is
located in the City of Santa Ana, more particularly described in Exhibit A, which is
attached hereto and incorporated herein by this reference.
B. The Housing Authority and the County will ground lease the Property to the
Developer for sixty-two (62) years from the Certificate of Completion, but no more than sixty-
five (65) years from the date of execution of the Ground Lease.
C. The Developer and the City have entered into that certain NSP Loan Agreement,
dated on or about the date hereof ("Loan Agreement'), for the purpose of providing eighty-
six (86) units of housing that will be affordable to Extremely Low Income households
("Restricted Units"), with one un-restricted unit reserved for an on -site manager, to which
these Restrictions are attached as Exhibit F (any capitalized term that is not otherwise
The Crossroads at Washington
City NSP Affordability Restrictions on Transfer of Property
defined in these Restrictions shall have the meaning ascribed to such term in the Loan
Agreement).
D. The Loan Agreement provides, among other things, for the use of the Property for
affordable housing with all Restricted Units being restricted to Extremely Low Income
households, at Affordable Rent(s).
E. The Loan Agreement contains certain provisions relating to the use of the Property.
NOW, THEREFORE, CITY AND DEVELOPER COVENANT AND AGREE AS
FOLLOWS:
1. Developer covenants and agrees (for itself, its successors, its assigns, and every
successor in interest to the Property or any part thereof) that Developer, such successors,
and such assigns shall use the Property exclusively to provide affordable housing of
Extremely Low Income households, as provided in these Restrictions and in the Loan
Agreement.
2. Developer, for itself and its successors and assigns, hereby covenants and agrees
that all of the apartments in the Property (less one manager's unit) (the "Units") shall be
rented exclusively, at Affordable Rent, to Extremely Low Income households to the extent
provided for herein. Area median income levels and Affordable Rents are subject to
adjustment from time to time as provided in Section 3 below.
3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF
THE PROPERTY
3.1. Use Covenants and Restrictions.
(a) The Project shall consist of eighty-six (86) units, including one (1)
on -site manager's unit. Developer agrees and covenants, which covenants shall run with
the land and bind Developer, its successors, its assigns and every successor in interest to
the Property that Developer will make all Restricted Units on the Property available to
Extremely Low Income households at rents affordable to such households for sixty-two
(62) years from the issuance of the Certificate of Completion. The City permits the
Developer to limit the eligibility and/or give preference to a particular segment of the
population in accordance with applicable state and federal laws.
(b) At initial lease up, households in the Restricted Units cannot earn
more than the Extremely Low Income limits (30% of AMI) as published by HUD for the
Orange County, California PMSA, adjusted for household size. Rental increases shall be
in conformance with federal and state law.
(c) Initial rents for the Restricted Units must not exceed the applicable
rents for the 30% Income Level for Extremely Low Income units as published by the
California Tax Credit Allocation Committee (TCAC).
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City NSP Affordability Restrictions on Tinnsfer of Property
(d) Forty-three (43) Extremely Low Income Units, consisting of sixteen
(16) studio units, twenty-six (26) one -bedroom units, and one (1) two -bedroom unit shall
be designated as permanent supportive housing (PSH) units for persons experiencing
homelessness.
(e) Maximum Occupancy will be two (2) people per room plus one (1).
Example for a two -bedroom unit, five (5) people would be maximum occupancy.
(t) Developer must have a written lease between tenant and owner for
a period of at least one year, unless a shorter period is mutually agreed upon. Leases must
be consistent with Section 7.
3.2. Affordability Levels/Unit Mix:
The affordability levels/unit mix for the Restricted Units in the Project are as follows:
Unit Size
30% TCAC AMI
No.
Units
Current
Rent
Studio
16
$711
1 Bedroom
26
$762
2 Bedroom
21
$915
3 Bedroom
17
$1,057
4 Bedroom
5
$1,179
Total
85
The remaining unit will be an un-restricted 2-bedroom unit reserved for the onsite manager.
(1) Annually with the financial statements, the Developer shall provide an annual report
of rents and occupancy of all Restricted Units to verify compliance with affordability
requirements.
The affordable rents charged at the Project for the Restricted Units must comply with the
standards set forth by the California Tax Credit Allocation Committee (TCAC), and during
the HOME Compliance Period, the HOME requirements for the HOME assisted units.
A utility allowance must be deducted from the maximum affordable rent charged at the
Project for each Restricted Unit.
Initial rents may be recalculated to allowable rental amounts at the time of initial lease -up
following completion of construction in accordance with any changes in allowable rent and
income tables as published by HUD and TCAC.
3.3. Rent Increases.
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City NSP Affordability Restrictions on Trunsfer of Property
On an annual basis, the City shall provide Developer with the maximum allowable
schedule of rents for the Property in accordance with changes in allowable rent and income
tables published by HUD and TCAC. In no event can Developer charge any tenant more
than such amount.
All rent increases on the Restricted Units are subject to City approval pursuant to
the terms of this Section. No later than sixty (60) days prior to the proposed
implementation of any rent increase, Developer shall submit to the City a schedule of any
proposed increase in the rent. The City will disapprove a rent increase if it does not comply
with the restrictions set forth in Section 3.2 above.
(a) Termination of Tenancy. Developer may not terminate the tenancy
or refuse to renew the lease of tenant except for serious or repeated violation of the terms
and conditions of the Lease; for violation of applicable federal, state, or local law; for
completion of the transitional housing tenancy period (if the housing is transitional); or for
other good cause. Any termination or refusal to renew must be preceded by not less than
thirty (30) days by the Developer's service upon the tenant of a written notice specifying
the grounds for the action.
(b) Non-Oualifyinu Adjusted Income. Subject to the applicable
requirements and provisions of, and changes to, Section 42 and 142(d) of the Internal
Revenue Code of 1986, as amended (the "Code"), if, upon recertification of the income of
a tenant of a Restricted Unit, the Developer determines that a tenant has an adjusted income
exceeding 30% of the applicable Median Income for the Area in each case, adjusted for
household size as provided in Section 3.2 above, such tenant may be permitted to continue
to occupy the Restricted Unit at the rental rate as provided for in Section 3.2 above, until
the tenant chooses to vacate the Restricted Unit. After the Restricted Unit is vacated, the
Restricted Unit shall be re -rented to a tenant pursuant to the terms, covenants and
conditions of these Restrictions.
3.4. Loss of Project -Based Voucher Subsidy.
It is anticipated that during the Term of Agreement the Project will maintain not
less than fifteen (15) Project -Based Voucher ("PBV") Restricted Units ("PBV Restricted
Units") provided by the Housing Authority and forty three (43) Project -Based Vouchers
provided by Orange County (the "County PBV Restricted Units"), supported by Project -
Based Section 8 rental subsidy payments ("Rental Subsidy"). If, during the Term of
Agreement, there is a reduction, termination or nonrenewal of the Housing Authority's or
County's Rental Subsidy through no fault of Developer, such that the Rental Subsidy
shown on the Project Budget is no longer available (or available in a lesser amount),
Developer may request approval of the City (a) to allow households with adjusted incomes
that do not exceed sixty percent (60%) of AMI, adjusted for actual household size, to
occupy the extremely -low income units (i.e., a unit previously restricted to households with
adjusted incomes that do not exceed 30% of AMI), and (b) to increase the rent on one or
more of the Restricted Units, to rents that are affordable to households with an adjusted
income that does not exceed sixty percent (60%) of AMI, adjusted for household size
appropriate for the Restricted Unit.
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City NSP Affordability Restrictions on Tinnsfer of Property
The rent increase is subject to the following requirements: (a) concurrently with the
request, Developer shall provide the City with evidence of the anticipated reduction,
termination, or nonrenewal of the Rental Subsidy; (b) a Management Plan (as defined in
Section 6.1(d) of the Loan Agreement) for the Project for the City's approval pursuant to
Sections 6.1(d) and Exhibit G of the Loan Agreement, showing the impact of the loss or
reduction of the Rental Subsidy; (c) a proposed operating budget reflecting the rent
increases (the "Operating Budget"); and (d) a description of efforts to obtain alternate
sources of rent. The number of the PBV Restricted Units subject to the rent increase and
the amount of the proposed increase may not be greater than the number or amount required
to ensure that the Project generates sufficient income to cover its operating costs, required
deposits to replacement reserves, and debt service on approved financing as shown on the
Operating Budget, and as is necessary to maintain the financial stability of the Project. In
addition, upon a reduction, termination or nonrenewal of the Rental Subsidy as described
above, Developer hereby agrees to the following:
(a) Developer shall use good faith commercially reasonable efforts to
obtain alternative sources of rental subsidies and shall provide the City with annual
progress reports on efforts to obtain alternative sources of rental subsidies that would allow
the rents to be reduced. Upon receipt of any alternative rental subsidies, Developer shall
reduce the rents back to the original restrictions to the extent that the alternative rental
subsidies provide sufficient income to cover the operating costs, required replacement
reserves and debt service of the Project as shown on the Operating Budget.
(b) Developer shall provide tenants in the Restricted Units with notice
of any rent increase pursuant to this Section 3.4, and shall notify the tenant that if they have
received a tenant -based voucher from the Housing Authority of the City of Santa Ana they
may use the tenant -based voucher for their PBV Restricted Unit.
(c) All rent increases for the Restricted Units are subject to City
approval pursuant to the terms of this Section 3.4. No later than sixty (60) days prior to
the proposed implementation of any rent increase, Developer shall submit to the City a
schedule of any proposed increase in the rent. The City will disapprove a rent increase if
it does not comply with the restrictions set forth in this Section 3.4. Notwithstanding the
foregoing, rent increases for the PBV Restricted Units shall be subject to review and
approval of the City.
Developer shall give tenants of all Restricted Units written notice at least sixty (60)
days prior to any rent increase.
3.5. Reserved.
The Crossroads at Washington
City NSP Affordability Restrictions on Transfer of Property,
4. Developer, its successors and assigns shall not charge rents for the Restricted Units
in excess of the amounts set forth herein, as adjusted on the basis of the revised schedules
of area median incomes issued from time -to -time by HUD. The City shall notify Developer
in writing of the adjusted allowable maximum incomes and rents.
5. Developer shall adopt and include as part of its Management Plan (described in
Section I 1 below), written tenant selection policies and criteria for the Restricted Units that
meet the following requirements:
5.1. Are consistent with the purpose of providing housing for Extremely Low
Income households;
5.2. Are reasonably related to program eligibility and the applicants' ability to
perform the obligations of the lease;
5.3. Give reasonable consideration to the housing needs of households that
would have a preference under 42 CFR §906.211 (Federal selection preferences for
admission to Public Housing);
5.4. Provide for:
(a) The selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable; and
(b) The prompt written notification to any rejected applicant of the
grounds for any rejection;
5.5. Except with regard to persons experiencing homelessness referred off of the
County of Orange coordinated entry system due to the layer of forty-three (43) PBVs
provided by the Orange County Housing Authority, and subject to compliance with the
HOME Regulations, the requirements of Section 142(d) of the Code, Section 42 of the
Code, the County of Orange coordinated entry system and applicable California and federal
fair housing laws, local preference for Santa Ana residents and workers in tenant selection
shall be a requirement of the Project. Subject to applicable laws and regulations governing
nondiscrimination and preferences in housing occupancy required by Section 142(d) of the
Code, Section 42 of the Code, HUD or the State of California, as well as the City of Santa
Ana Affordable Housing Funds Policies and Procedures, the Developer shall give
preference in leasing units in the following order of priority:
(a) 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:
(i) 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;
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City NSP Affordability Restrictions on Transfer of Properly
property owner; or
(ii) Ellis Act, owner -occupancy, or removal permit eviction;
(iii) Earthquake, fire, flood, or other natural disaster;
(iv) Cancellation of a Housing Choice Voucher HAP Contract by
(v) Governmental Action, such as Code Enforcement.
(b) Second priority shall be given to persons who are either:
(i) Residents of Santa Ana; and/or
(ii) Working in Santa Ana at least 32 hours per week for at least
the last 6 months.
The Restricted Units will still be available to the general public, as required under
Section 142(d) of the Code and Section 42 of the Code, and these preferences do not restrict
the availability of the units to the general public.
5.6. 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 the housing market area to the units.
6. Developer, its successors and assigns, shall not refuse to lease a unit to a holder of
a rental voucher under 24 CFR part 982 (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 Total rents charged to the tenant for the tenant's share of rent shall not exceed
the allowable rents as described above.
7. Any lease of any of the 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 some type of 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 "owner"
shall mean the Developer, its successors or assigns):
7.1. Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor
of the owner in a lawsuit brought in connection with the lease;
7.2. Agreement by the tenant that the owner 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 housing Unit after the
tenant has moved out of the Unit. The owner may dispose of this personal property in
accordance with state law;
7.3. Agreement by the tenant not to hold the owner or the owner's agent legally
responsible for any action or failure to act, whether intentional or negligent;
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City NSP Affordability Restrictions on Transfer of Property
7.4. Agreement of the tenant that the owner may institute a lawsuit without
notice to the tenant;
7.5. Agreement by the tenant that the owner may evict the tenant or household
members 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;
7.6. Agreement by the tenant to waive any right to a trial by jury;
7.7. Agreement by the tenant to waive the tenant's right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease; and
7.8. Agreement by the tenant to pay attorney's fees or other legal costs even if
the tenant wins in a court proceeding by the owner against the tenant. The tenant, however,
may be obligated to pay costs if the tenant loses.
The Crossroads at Washington
City NSP Affordability Restrictions on Transfer of Property
8. Developer, its successors or assigns, must adhere to state law requirements with
regard to termination of tenancy.
9. Developer shall maintain the improvements on the Property in compliance with all
applicable housing quality standards [24CFR 92.504 (c)(6)] and state and local code
requirements (California Health and Safety Code section 33418), and shall keep the
Property free from any unreasonable accumulation of debris or waste materials. Developer
shall also maintain in a healthy condition any landscaping planted on the Property.
10. Developer covenants and agrees for itself, its successors, its assigns and every
successor in interest to the Property or any part thereof, there shall be no discrimination
against or segregation of any person, or group of persons, on account of race, color, creed,
religion, sex, mental or physical disability, marital status, national origin or ancestry in the
sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the
Developer itself or any person claiming under or through it establish or permit any such
practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees
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.
11. Not later than fifteen (15) business days prior to the Close of Escrow, Developer
shall submit to the Executive Director a Management Plan in a form that is acceptable to
the Executive Director, including, but not limited to, the components listed below.
Approval of the Management Plan must be obtained from the Executive Director not later
than the time for the Close of Escrow. Developer shall manage the Restricted Units in
accordance with the approved Management Plan, including such amendments as may be
approved in writing from time to time by the Executive Director, for the term of the income
and rent restrictions contained in these Restrictions. The components of the Management
Plan shall include:
11.1. Management Agent. Developer shall submit the name and qualifications
of the proposed Management Agent. The Executive Director shall approve or disapprove
the proposed Management Agent in writing based on the experience and qualifications of
the Management Agent.
11.2. 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.
11.3. Annual Budget and Projected Cash Flows. Prior to the Closing, and
annually thereafter not less than sixty (60) days prior to the close of each calendar year
thereafter until the Loan is repaid in full, Developer shall submit a projected operating
budget and cash flow to the Executive Director for the following calendar year. The budget
and cash flow shall be in a form that is acceptable to the Executive Director.
11.4. Tenant Selection Policies. Developer shall include in the Management
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City NSP Affordability Restrictions on Transfer of Property
Plan the tenant selection policies in accordance with Section 5, above.
12. If at any time the City determines that the units are not being managed or
maintained in accordance with the approved Management Plan, the City shall send the
Developer a detailed description of the management deficiencies (a "Deficiency Notice").
If the deficiencies set forth in the Deficiency Notice are not cured within sixty (60) days
(or such longer period as may be reasonably required to cure the deficiency), the Executive
Director 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 termination by Developer without
penalty, upon thirty (30) days prior written notice, at the direction of the Executive Director
upon failure to cure a Deficiency Notice within the time period specified above. Within
thirty (30) days following a direction of the Executive Director to replace the management
agent in accordance with the terms hereof, the Developer shall select another management
agent or make other arrangements satisfactory to the Executive Director or designee for
continuing management of the units.
12.1. Marketing Plan. The marketing plan will apply to all of the units in the
Project, except the one manager's unit. The Developer shall submit a marketing plan for
review and approval by the Executive Director which approval will not be unreasonably
withheld, conditioned or delayed. The marketing plan must contain procedures that ensure
marketing of the Restricted Units to Extremely Low Income households throughout the
City. Such procedures shall be applicable for initial rent -up and ongoing marketing of the
units throughout the term of these Restrictions. Developer shall advertise vacancies of the
Restricted Units in general distribution newspapers that circulate throughout the City.
Where the Developer utilizes other forms of advertising, such advertising shall also be
distributed throughout the City.
13. The covenants established in these Restrictions and any amendments hereto
approved by the City and Developer shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the City and their respective
successors and assigns. These Restrictions shall remain in effect for sixty-two (62) years
from the issuance of the Certificate of Completion. In its discretion, the City may defer
repayment of the NSP Loan or the City may agree to such reasonable modifications to the
requirements of these Restrictions, as they may determine are 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.
14. Developer shall not request disbursement of NSP funds until the funds are needed
to pay eligible costs. The City shall have the right to disapprove any request if the City
determines the request is for an ineligible item or is otherwise not in compliance with or
inconsistent with the Loan Agreement and these Restrictions [24 CFR 92.504 (c)(10)].
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City NSP Affordability Restrictions on Transfer of Property
15. Maintenance; Compliance with Law.
During the term of these Restrictions, Developer agrees to maintain all interior and
exterior improvements, including landscaping, on the Project in good condition, repair and
sanitary condition (and, as to landscaping, in a healthy condition) and in accordance with
any Management Plan approved by the City under these Restrictions (including without
limitation any landscaping and signage), as the same may be amended from time to time,
and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state,
county, municipal, and other governmental agencies and bodies having or claiming
jurisdiction and all their respective departments, bureaus, and officials. Developer
acknowledges the great emphasis the City places on quality maintenance to protect its
investment and to provide quality low income housing for its constituents and to ensure
that all City subsidized affordable housing projects within the City are not allowed to
deteriorate due to deficient maintenance. In addition, Developer shall keep the Project free
from all graffiti and any accumulation of debris or waste material. Developer shall
promptly make all repairs and replacements necessary to keep the Project in good condition
and repair and shall promptly eliminate all graffiti and replace dead and diseased plants
and landscaping with comparable approved materials.
In the event that Developer breaches any of the covenants contained in this Section
15 and such default continues for a period of five (5) days after written notice from the City
(with respect to graffiti, debris, waste material, and general maintenance) or thirty (30)
days after written notice from the City (with respect to landscaping and building
improvements), then the City, in addition to whatever other right or remedy it may have
under the Loan Agreement, the other Loan Documents, these Restrictions or at law or in
equity, shall have the right to enter upon the Project and perform or cause to be performed
all such acts and work necessary to cure the default. Pursuant to such right of entry, the
City shall be permitted (but is not required) to enter upon the Project and. perform all acts
and work necessary to protect, maintain and preserve the improvements and landscaped
areas on the Project. Developer shall promptly pay to the City, as applicable, the amount
of the expenditure arising from such acts and work of protection, maintenance, and
preservation by the City and/or costs of such cure, including a fifteen percent (15%)
administrative charge.
16. Developer shall prepare, maintain and submit to the City, as appropriate, the
following records and reports in compliance with 24 CFR 92.504 (c)(12):]
16.1. Annual Reports. Developer shall file with the City an Annual Report
(herein referred to as the "Annual Report") by June 15th of each calendar year,
commencing with the end of the calendar year (or portion thereof) in which the Real Estate
Closing occurs. The Annual Report shall contain a certification by Developer as to such
information as the City Executive Director may then require, including, but not limited to,
the following:
(a) The fiscal condition of the Project, including the Annual Budget and
Project Cash Flow report required by Section 11.3 which shall include a financial statement
for the previous calendar year that includes a balance sheet and a profit and loss statement
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City NSP Affordability Restrictions on Transfer of Property
indicating any surplus or deficit in operating accounts; a detailed itemized listing of income
and expenses; and the amounts of any fiscal reserves. Such Annual Budget and financial
statement shall be prepared in accordance with generally accepted accounting practices.
The City Executive Director may require that the financial statement be audited at
Developer's expense by an independent certified public accountant acceptable to the
Executive Director.
(b) Any substantial physical defects in the Project, including a
description of any major repair or maintenance work undertaken or needed in the previous
and current years. Such statement shall describe what steps Developer has taken in order
to maintain the Project in a safe and sanitary condition in accordance with applicable
housing and building codes and the property standards set forth in 24 CFR 92.251.
(c) The occupancy of the units indicating the income of each current
resident and the current rents charged each resident and whether those rents include
utilities, including records that demonstrate that the Project meets the requirements of 24
CFR 92.253 for tenant and participant protection and this Agreement.
(d) General management performance, including tenant relations and
other relevant information.
(e) Records that demonstrate that the units meet the affordability
requirements of 24 CFR 92.252, for the required period of affordability.
(f) Evidence of a currently paid hazard insurance policy in accordance
with the requirements of Section 3 of the City/NSP Deed of Trust, with a loss payable
endorsement naming the City as a loss payee(s) together with other approved lenders (as
their interests may appear), with a "Replacement Cost Endorsement" in amount sufficient
to prevent Developer or City from becoming a co-insurer under the terms of the policy, but
in any event in an amount not less than 100% of the then full replacement cost, to be
determined at least once annually and subject to reasonable approval by the Executive
Director.
(g) Evidence of a currently paid liability insurance policy, naming the
City as additional insured and in a form approved by the City Attorney with coverage as
described in the Loan Agreement.
(h) Termite reports pertaining to the Property every fifth (5t11) year.
(i) Such other information as may be reasonably required by the
Executive Director or his/her designee.
16.2. Records and Audits. Developer shall maintain the following general
program records, and make them available for inspection by the City, the State or HUD:
(a) records which demonstrate that the project meets the property
standard specified in 24 CFR 92.251;
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City NSP Affordability Restrictions on Transfer of Property
(b) records which demonstrates that the project meets the requirements
of 24 CFR 92.252;
(c) records which demonstrate compliance with the tenant and
participant protections, as specified in 24 Section 29.253;
(d) records which demonstrate compliance with the Equal Opportunity
and Fair Housing requirements outlined in these Restrictions
(i) Intentionally Omitted;
(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);
(iii) documentation and data on the steps taken to implement
Developer's outreach programs to minority -owned and women -owned businesses to meet
the minority outreach requirements of 24 CFR 92.350;
(e) documentation of the steps taken to carry out an affirmative
marketing program in accordance with 24 CFR 92.351, if applicable;
(f) 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 of the Real Estate Closing
(i.e., the date on which Developer obtained site control);
(g) if applicable, records concerning lead -based paint in accordance
with 24 CFR 92.355;
(h) if applicable, records which support any requests for waivers of the
conflict of interest prohibition as stated in 24 CFR 92.356;
(i) records of certifications of contractor qualifications as they relate to
the debarment and suspension requirement as stated in 24 CFR 92.357 and 24 CFR Part
24; and
0) any other reports issued by other monitoring agencies.
16.3. All records pertaining to each calendar year of NSP funds must be retained
for the most recent five year period, 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 (24 CFR 92.508).
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 litigation relevant to the Loan Agreement, whichever is later. The City,
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City NSP Affordability Restrictions on Transfer of Propeity
the State, the Office of the Auditor General of HUD, 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.
16.4. If so directed by the City, the State or HUD 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, the State or HUD, as depository.
16.5. All records, accounts, documentation and other materials relevant to the
Project sh�ll be accessible at any time to the authorized representatives of the City, the
State or HUD, on reasonable prior notice, for the purpose of examination or audit.
16.6. Pursuant to 24 CFR Part 44, 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.
17. If an event of default occurs under the terms of these Restrictions, prior to
exercising any remedies hereunder, City shall give Developer written notice of such
default. If the default is reasonably capable of being cured within thirty (30) days,
Developer shall have such period to effect a cure prior to exercise of remedies by the City
under these Restrictions. If the default is such that it is not reasonably capable of being
cured within thirty (30) days, and Developer: (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 Developer shall have such additional time as is reasonably necessary to
cure the default prior to exercise of any remedies by City. Any cure made or tendered by
such limited partner shall be accepted as if made by Developer.
The City is a beneficiary of the terms and provisions of these Restrictions and the
covenants herein, both for and in their 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. Upon the
occurrence of an event of default and the expiration of the notice and cure period specified
above, the City shall have the right 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.
18. Default.
Each of the following shall constitute an "Event of Default' by Developer under
these Restrictions:
18.1. Failure to Make Payments. Developer fails to make any payment due the
City under these Restrictions within thirty (30) days after receiving written notice for said
payment from the City;
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City NSP Affordability Restrictions on Transfer of Property
18.2. Non -Monetary Failure to Perform. Developer fails to timely perform,
comply with or observe any of the terms, covenants, or conditions of these Restrictions
(other than those provisions elsewhere referred to in this Section 18) and such failure
continues uncured or without Developer commencing to diligently cure for thirty (30) days
after notice thereof in writing is given by the City to Developer, provided that if Developer
has commenced cure but cannot complete such cure reasonably within thirty (30) days,
Developer shall have ninety (90) days from the date of notice to cure such failure without
such failure constituting an event of default;
18.3. Senior Loan Document Breach. Any default or breach of Developer which
continues uncured after the expiration of any applicable cure period under the Loan
Agreement (including, but not limited to, the obligations of the Developer under Section 6
of the Loan Agreement), any Loan Document or any other loan document including, but
not limited to, the Senior Loan Documents, as defined and set forth in the Loan Agreement;
18.4. Voluntary Sus ep nsion. The voluntary suspension of Developer's business
or the dissolution or termination of the partnership (if any) constituting Developer;
18.5. Unauthorized Transfer. Developer's sale or other transfer of the Project in
violation of this Agreement;
18.6. Fraud or Material Misstatement or Omissions. Any fraudulent act or
intentional material omission of Developer pertaining to or made in connection with the
Loan, Loan Documents or the Project that is not cured within thirty (30) days after written
notice to Developer, unless such act or omission is not capable of cure;
18.7. Insolvency. A court having jurisdiction shall have made or entered any
decree or order: (i) adjudging Developer to be bankrupt or insolvent; (ii) approving as
properly filed a petition seeking reorganization of Developer or seeking any arrangement
for Developer under the bankruptcy law or any other applicable debtor's relief law or statute
of the United States or any state or other jurisdiction; (iii) appointing a receiver, trustee,
liquidator, or assignee of Developer in bankruptcy or insolvency or for any of their
properties; or (iv) directing the winding up or liquidation of Developer, if any such decree
or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or
undischarged for a period of ninety (90) days, unless a lesser time period is permitted for
cure under any other mortgage on the Property, in which event such lesser time period will
apply under this section as well; or Developer shall have admitted in writing its inability to
pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking
any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence
of any of the events of default in this paragraph shall act to accelerate automatically,
without the need for any action by the City, the indebtedness evidenced by the Note; or
18.8. Project Monies. Developer's intentional misapplication or embezzlement
of Project monies.
19. Reserved.
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City NSP Affordability Restrictions on Transfer of Property
20. Remedies.
The occurrence of any Event of Default shall, either at the option of the City or
automatically where so specified, relieve the City of any obligation to make or continue
the Loan and shall give the City the right to proceed with any and all remedies set forth in
these Restrictions or otherwise available at law or in equity or by statute (and all of the
City's rights and remedies shall be cumulative), including but not limited to the following:
20.1. Acceleration of Note. The City shall have the right to cause all indebtedness
of the Developer to the City under the Note, together with any accrued interest thereon, to
become immediately due and payable. The Developer waives all right to presentment,
demand, protest or notice of protest, or dishonor. The City may proceed to enforce payment
of the indebtedness and to exercise any or all rights afforded to the City as a creditor and
secured party under the law, including the Uniform Commercial Code, including
foreclosure under the Deed of Trust. The Developer shall be liable to pay the City on
demand all expenses, costs and fees (including, without limitation, reasonable attorneys'
fees and expenses) paid or incurred by the City in connection with the enforcement of this
provision, provided that such expenses, costs and fees shall be subordinate to the Senior
Loan made to Developer and the Senior Loan Documents.
20.2. Specific Performance. The City shall have the right to mandamus or other
suit, action or proceeding at law or in equity to require Developer to perform its obligations
and covenants under these Restrictions or to enjoin acts on things, which may be unlawful,
or in violation of the provisions of these Restrictions. The Developer shall be liable to pay
the City on demand all expenses, costs and fees (including, without limitation, reasonable
attorneys' fees and expenses) paid or incurred by the City in connection with the
enforcement of these Restrictions.
20.3. Right to Cure at Developer's Expense. The City shall have the right to cure
any monetary Event of Default by Developer under these Restrictions. The Developer
agrees to reimburse the City for any funds advanced by the City to cure a monetary default
by Developer upon demand therefore, together with interest thereon at the rate of twelve
percent (12%) per annum or the maximum rate permitted by law, whichever rate is lesser,
from the date of expenditure until the date of reimbursement.
20.4. Remedies Cumulative. No right, power, or remedy given to the City by the
terms of these Restrictions is intended to be exclusive of any other right, power, or remedy;
and each and every such right, power, or remedy shall be cumulative and in addition to
every other right, power, or remedy given to the City by the terms of any such instrument,
or by any statute or otherwise against Developer and any other person. Neither the failure
nor any delay on the part of the City to exercise any such rights and remedies shall operate
as a waiver thereof, nor shall any single or partial exercise by the City of any such right or
remedy preclude any other or further exercise of such right or remedy, or any other right
or remedy.
20.5. Waiver of Terms and Conditions. No waiver of any default or breach by
Developer hereunder shall be implied from any omission by the City to take action on
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The Crossroads at Washington
City NSP Affordability Restrictions on Transfer of Property
account of such default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the waiver, and such waiver shall be
operative only for the time and to the extent therein stated. Waivers of any covenant, term,
or condition contained herein shall not be construed as a waiver of any subsequent breach
of the same covenant, term, or condition. The consent or approval by the City to or of any
act by Developer requiring further consent or approval shall not be deemed to waive or
render unnecessary the consent or approval to or of any subsequent similar act. The
exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of
any default under these Restrictions or the Loan Documents, nor shall it invalidate any act
done pursuant to notice of default, or prejudice the City in the exercise of any right, power,
or remedy hereunder or under the Loan Documents, unless in the exercise of any such right,
power, or remedy all obligations of Developer to City are paid and discharged in full.
21. The covenants and agreements contained herein shall run with the land and not be
personal obligations of Developer. Upon the sale, conveyance or other transfer of the
leasehold interest in the Property (a "Transfer") and the assumption 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.
22. The Loan Agreement and all of its attachments shall be enforceable by City in
accordance with the terms thereof Each of the Loan Agreement, the Affordability
Restrictions on Transfer of Property, the City/NSP Loan Note and the City/NSP Deed of
Trust provide a means of enforcement by the City if Developer is in breach of its
obligations hereunder and thereunder, including liens on the Property, use and deed
restrictions and covenants running with the land [24 CFR 92.504 (c) (13)].
23. Additional Terms.
23.1. Indemnity. To the fullest extent permitted by law, the Developer agrees to
indemnify, hold harmless and defend the City and its elected officials, officers, governing
members, employees, attorneys and agents (collectively, the "Indemnified Parties"), from
and against any and all losses, damages, claims, actions, liabilities, costs and expenses of
any and every conceivable nature, kind or character (including, without limitation,
reasonable attorneys' fees, litigation and court costs, amounts paid in settlement and
amounts paid to discharge judgments) to which the Indemnified Parties, or any of them,
may become subject to under any statutory law (including federal or state securities laws)
or at common law or otherwise, arising out of or based upon or in any way relating to:
(a) these Restrictions or the execution or amendment thereof in
connection with the transactions contemplated thereby;
(b) Developer's ownership or operation of the Property and the Project
or any act or omission of the Developer or any of its agents, contractors, servants,
employees or licensees in connection with the Property and the Project, the operation of
the Project, or the condition, environmental or otherwise, occupancy, use, possession,
conduct or management of work done in or about, or from the planning, design, acquisition,
installation, operation or rehabilitation of, the Project or any part thereof;
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City NSP Affordability Restdetions on Transfer of Property
(c) any lien or charge upon payments by the Developer to the City, or
any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments,
impositions and other charges imposed on the City in respect of any portion of the Project;
(d) any violation of any environmental law, rule or regulation with
respect to, or the release of any toxic substance from, the Property or the Project or any
part thereof; or
(e) any untrue statement or misleading statement or alleged untrue
statement or alleged misleading statement of a material fact by the Developer contained in
any Loan Document or any of the documents or instruments relating to said Loan
Documents that the City relied upon in making the Loan; except to the extent such damages
are caused by the gross negligence or willful misconduct of such Indemnified Party. In the
event that any action or proceeding is brought against any Indemnified Party with respect
to which indemnity may be sought hereunder, the Developer, upon written notice from the
Indemnified Party, shall assume the investigation and defense thereof, including the
employment and payment for of counsel selected by the Indemnified Party, and shall
assume the payment of all expenses related thereto, with full power to litigate, compromise
or settle the same; provided that the Indemnified Party shall have the right to review and
approve or disapprove any such compromise or settlement.
23.2. Time. Time is of the essence in these Restrictions.
23.3. Construction. Except where the context otherwise requires, words
imparting the singular number shall include the plural number and vice versa, words
imparting persons shall include firms, associations, partnerships and corporations, and
words of either gender shall include the other gender.
23.4. Waiver of Jury Trial. Unless prohibited by Federal, State or local laws,
each party to these Restrictions hereby expressly waives any right to trial by jury of any
claim, demand, action or cause of action arising under any Loan Document or in any way
connected with or related or incidental to the dealings of the parties hereto or any of them
with respect to any Loan Document, or the transactions related thereto, in each case
whether now existing or hereafter arising, and whether sounding in contract or tort or
otherwise; and each party hereby agrees and consents that any such claim, demand, action
or cause of action shall be decided by court trial without a jury, and that any party to these
Restrictions may file an original counterpart or a copy of this section with any court as
written evidence of the consent of the parties hereto to the waiver of their right to trial by
jury.
23.5. Nonliability. By accepting or approving anything required to be performed
or given to City under these Restrictions, 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.
23.6. Obligations Unconditional and Independent. Notwithstanding the existence
at any time of any obligation or liability of City to Developer, or any claim by Developer
against City, in connection with these Restrictions or otherwise, Developer hereby waives
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City NSP Affordability Reshictions on Transfer of Property
any right it might otherwise have: (a) to offset any such obligation, liability or claim against
Developer's obligations under these Restrictions; or (b) to claim that the existence of any
such obligation, liability or claim excuses the nonperformance by Developer of any of its
obligations under these Restrictions.
24. Reserved. .
25. 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: Washington Santa Ana Housing Partners, L.P.,
a California limited partnership
With a copy to:
If to City: City of Santa Ana
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P .0. Box 1988
Santa Ana, California 92702
With a copy to: 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.
(signatures on following page)
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City NSP Affordability Restrictions on Transfer of Property
A-2022-133-02
IN WITNESS WHEREOF, the parties hereto have caused these Affordability
Restrictions on Transfer of Property to be executed on the date set forth hereinabove.
ATTEST:
0
Daisy Gomez
Clerk of the Council
Dated: 1- I � —26 ZZ
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
By: (a) 4
Ryan o e
Assist t City Attorney
Dated:
RECOMMENDED FOR APPROVAL:
Steven A. Mendoza
Executive Director
Community Development Agency
CITY OF SANTA ANA
Kristine Ridge
City Manager
Dated: -7 4,41 V r
20
The Crossroads at Washington
City NSP Affordability Restrictions on Transfer of Property
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 July 15, 2022 before me, Claudia M. Fernandez -Shaw, Notary Public
(insert name and title of the officer)
personally appeared Kristine Ridge
who proved to me on the basis of satisfactory evidence to be the persq�V whose name
subscribed to the within instrument and acknowledged to me that - executed the same in
{fit lwtbeir authorized capacity(ieA), and that by44 F; rsignature(pl on the instrument the
person(s), or the entity upon behalf of which the personV 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
0053PE4
LAUDIA M. FERNANDEZ-SHAW
Notary Public - Catiforma
Orange Co6nty
Commission S 2388597
y Comm. Expires Jan 25, 2026
DEVELOPER
Washington Santa Ana Housing Partners, L.P.,
a California limited partnership
By: Related/Washington Santa Ana Development Co., LLC,
a California limited liability company,
its Administrative General Partner
By: �i� �'^� "4 ^
Frank Cardone, President
By: Supportive Housing LLC,
a California limited liability company,
its Managing General Partner
By: A Community of Friends,
a California nonprofit public benefit corporation,
its sole member/manager
By:
Dora Ong Gallo,
President and Chief Executive Officer
21
The Crossroads at Washington
City NSP Affordability Restrictions on Transfer of Property
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 July 18, 2022 before me, Ala �/YA/1L/t�" r Notary Public
(insert name and title of the officer)
personally appeared Frank Cardone
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
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
(Seal)
rSWA KERAA AT
,� _ votary public - California
Orange County
Commission # 2403693
`'�� O°�"� My Comm. Expires May 9, 2026 y
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 July 18, 2022
before me, Q5,2(Z �. rem r Notary Public
(insert name and title of the officer)
personally appeared Dora Leong Gallo
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
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 _ (Seal)
GAIL P. FEE
Notary Public - California
� Orange County �
Commission X 2270789
o' My Comm. Expires Jan 70, 2023
ORDER NO.: 1117020721.2
EXHIBIT A
The land referred to is situated in the County of Orange, City of Santa Ana, State of California,
and is described as follows:
That portion of the Rancho Santiago De Santa Ana in the City of Santa Ana, County of Orange,
State of California per Map recorded in Book 3 Page 420 of Patents, Records of Los Angeles
County in the Office of the County Recorder, described as follows:
Beginning at the southwest terminus of that certain course on the southwest line of said land
shown as having a bearing and distance of "North 60005'57" East 133.86 feet" per Record of
Survey No. 2002-1059 recorded in Book 194 Pages 28 through 36 of Records of Surveys in the
Orange County records; thence along said southwest line North 60105'57" East, 133.81 feet;
thence North 64053'54" East, 193.71 feet; thence North 21000'44" West, 62.74 feet; thence
North 21000'43" West, 224.19 feet; thence North 32046'09" West, 150.43 feet to the beginning
of a non -tangent curve, concave northerly and having a radius of 45.00 feet, a radial line to
said beginning of curve bears North 82028'26" East; thence southerly along said curve, 166.04
feet, through a central angle of 211024'37" to the beginning of a reverse curve, concave
westerly and having a radius of 71.00 feet, a radial line to said beginning of curve bears South
66006'57" East; thence northeasterly along said curve, 52.77 feet, through a central angle of
42035'14"; thence North 55021'04" West, 25.14 feet; thence South 00016'37" West, 621.36 feet
to the point of beginning.
Per lot merger recorded July 20, 2022, Instrument No. 2022000253305
APN'S 398-092-13 & 398-092-14
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