HomeMy WebLinkAboutORANGE COUNTY HOUSING FINANCE TRUST (2)Commonwealth Land Title Comoany
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail to:
City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
INSURANCE
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
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20230000661931:37 pm 03/23/23
90 CRSC06 S13 12
0.00 0.00 0.00 0.00 33.00 0.00 0.000.000.00 0.00
A-2023-030
WORK MAY PROCEED SUBORDINATION AGREEMENT
CITY OF SANTA ANA AND ORANGE COUNTY HOUSING FINANCE TRUST
CLERK OF THE COUNCIL
DATE: This Subordination Agreement (this "Subordination Agreement") is dated for reference
purposes as of March 23, 2023, and is executed by and between the CITY OF SANTA ANA, a
CalifoTi charter city (the "City"), and the ORANGE COUNTY HOUSING FINANCE
r TRUST, a joint Dowers authority (the "OCHFT").
a�v )6- q.Dol5umdiviSiew of
00 W 5+^a flf Factual Background
A. City has agreed to make a permanent loan to North Broadway Housing Partners L.P., a
a- California limited partnership (the "Borrower"), in the original principal amount of up to
d Five Million Two Hundred Fifty Six Thousand Three Hundred Twenty Seven Dollars
($5,256,327) (the "City Loan") to assist in financing the construction of an affordable
a. Cb4
(04AAial&.pj) multifamily residential development (the "Project") on property located at 1411 N.
(SN� Broadway in Santa Ana, and more particularly described in Exhibit A attached hereto and
incorporated herein (the "Property").
B. The City Loan is evidenced by a City HOME -ARP Loan Agreement dated as of March
23, 2023, and executed by and between Borrower and the City (the "City Loan
Agreement") and a City HOME -ARP Promissory Note executed by the Borrower in
favor of the City dated as of March 23, 2023 (the "City Note"). The City Loan is secured
by a City HOME -ARP Deed of Trust, dated as of March 23, 2023, that will be recorded
in the official records of (range County ("Official Records") substantially concurrently
herewith (the "CIty Deed of Trust"). The City Loan Agreement, the City Note, and the
City Deed of Trust are collectively referred to herein as the "City Loan Documents." In
connection with the City Loan, Borrower and City will execute that certain Affordability
Restrictions on the Transfer of Property, which will be recorded substantially
concurrently herewith (the "City Regulatory Agreement").
C. Pursuant to an Orange County Housing Finance Trust ("OCHFT') Loan Agreement
dated as of March 23, 2023, between OCHFT and Borrower ("OCHFT Loan
Commonwealth Land Title Company
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail to:
City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
CITY OF SANTA ANA AND ORANGE COUNTY HOUSING FINANCE TRUST
This Subordination Agreement (this "Subordination Agreement') is dated for reference
purposes as of March 23, 2023, and is executed by and between the CITY OF SANTA ANA, a
California charter city (the "City"), and the ORANGE COUNTY HOUSING FINANCE
TRUST a joint Dowers authority (the "OCHFT").
1C p--Po1i4-1c0-Q- 5c44diV1'5lon o�
44,L 51&a Factual Background
A. City has agreed to make a permanent loan to North Broadway Housing Partners L.P., a
California limited partnership (the 'Borrower"), in the original principal amount of up to
Five Million Two Hundred Fifty Six Thousand Three Hundred Twenty Seven Dollars
($5,256,327) (the "City Loan") to assist in financing the construction of an affordable
multifamily residential development (the "Project') on property located at 1411 N.
Broadway in Santa Ana, and more particularly described in Exhibit A attached hereto and
incorporated herein (the "Property").
B. The City Loan is evidenced by a City HOME -ARP Loan Agreement dated as of March
23, 2023, and executed by and between Borrower and the City (the "City Loan
Agreement') and a City HOME -ARP Promissory Note executed by the Borrower in
favor of the City dated as of March 23, 2023 (the "City Note"). The City Loan is secured
by a City HOME -ARP Deed of Trust, dated as of March 23, 2023, that will be recorded
in the official records of Orange County ("Official Records") substantially concurrently
herewith (the "City Deed of Trust'). The City Loan Agreement, the City Note, and the
City Deed of Trust are collectively referred to herein as the "City Loan Documents." In
connection with the City Loan, Borrower and City will execute that certain Affordability
Restrictions on the Transfer of Property, which will be recorded substantially
concurrently herewith (the "City Regulatory Agreement').
C. Pursuant to an Orange County Housing Finance Trust ("OCHFT") Loan Agreement
dated as of March 23, 2023, between OCHFT and Borrower ("OCHFT Loan
Agreement"), OCHFT has made or is making a loan to Borrower in the maximum
principal amount of Two Million Four Hundred Eighty Thousand Thirty Dollars ($
2,480,030) ("OCHFT Loan"). The OCHFT Loan is secured by an OCHFT Deed of
Trust dated as of March 23, 2023 ("OCHFT Deed of Trust") encumbering all or a
portion of the Mortgaged Property. In connection with the OCHFT Loan, Borrower and
OCHFT have entered into that certain Amended and Restated Rent Limitation and
Regulatory Agreement by and between Borrower and City to be recorded with the
Recording Office on or about the date hereof (the "OCHFT Regulatory Agreement").
AGREEMENT
1. Subordination.
1.1 The City Deed of Trust, and any and all renewals, modifications permitted
hereunder, extensions, or protective advances (including those costs to cure Borrower's default)
thereunder (including interest thereon), is and will remain at all times, a lien, claim, or charge on
the Property prior and superior to the OCHFT Deed of Trust. OCHFT acknowledges that it has
had an opportunity to review the City Loan Documents, and OCHFT intentionally subordinates
the lien of the OCHFT Deed of Trust to the City Deed of Trust.
1.2 The City Regulatory Agreement, and any and all renewals, modifications
permitted hereunder, extensions, or protective advances (including those costs to cure
Borrower's default) thereunder (including interest thereon), is and will remain at all times, a lien,
claim, or charge on the Property prior and superior to the OCHFT Regulatory Agreement.
OCHFT acknowledges that it has had an opportunity to review the City Regulatory Agreement,
and OCHFT intentionally subordinates the OCHFT Regulatory Agreement to the City
Regulatory Agreement.
2. Amendments Require Consent. OCHFT agrees that it will not amend or modify
the OCHFT Loan Documents to shorten the maturity date, increase the principal amount,
accelerate the repayment schedule (excluding any acceleration of the OCHFT Note due to
Borrower's default) or increase the interest rate payable under the OCHFT Loan Documents
without City's prior written consent. City agrees that it will not amend or modify the City Loan
Documents to shorten the maturity date, increase the principal amount, accelerate the repayment
schedule (excluding any acceleration of the OCHFT Note due to Borrower's default) or increase
the interest rate payable under the City Loan Documents without OCHFT's prior written consent.
3. Notice and Cure Rights.
3.1 Definitions: For purposes of this Section 31 the following capitalized words
and terms shall have the following meanings.
"Cure Period" means a period of a ninety (90) consecutive days from the giving of a
Default Notice.
"Defaulted Lender" means the party giving a Default Notice.
2
"Default Notice" means written notice of the default(s) or Event(s) of Default giving rise
to a parry's right to complete a Foreclosure Remedy.
"Foreclosure Remedy" means the completion of a foreclosure sale of the Property or the
recording of a deed -in -lieu of foreclosure with respect to the Property.
"Noticed Defaults" means the noticed default(s) or Event(s) of Default set forth in a
Default Notice.
"Notice Party" means the party receiving a Default Notice.
3.2 Notice and Cure Rights.
(a) Notice and Cure Rights of Citv. OCHFT agrees that concurrently
with OCHFT's provision of any notice of default (including without limitation any Default
Notice) to Borrower under the OCHFT Loan Documents, OCHFT shall provide a copy of such
notice to City at the address specified below. OCHFT agrees that City shall have the right to
cure any default of Borrower within the same period of time provided to Borrower under the
OCHFT Loan Documents, extended by a period of ninety (90) days. OCHFT further agrees that
it shall not complete a Foreclosure Remedy unless and until City has first been given a Default
Notice, and City has failed to cure the Noticed Defaults within the Cure Period or such longer
period provided pursuant to this Section; provided, however, that OCHFT shall be entitled
during the Cure Period to continue to pursue all of its rights and remedies under the OCHFT
Loan Documents, including but not limited to acceleration of the OCHFT Note (subject to the
de -acceleration provisions set forth below), commencement and pursuit of foreclosure (but not
completion of the foreclosure sale), any guaranty (subject to any notice and cure provisions
contained therein), and/or any other OCHFT Loan Document. It is the express intent of the
parties hereunder that OCHFT shall have the right to pursue all rights and remedies except
completion of a Foreclosure Remedy without liability to City for failure to provide notice to
City, and that the OCHFT's liability hereunder shall be expressly limited to actual damages to
City directly caused by the OCHFT's completion of a Foreclosure Remedy without City
receiving the notice and opportunity to cure described above. Except as specifically provided
herein, or otherwise agreed in writing, OCHFT's failure to give any such notice for any reason
shall not act to impair or waive any remedy or right of OCHFT under this Subordination
Agreement or any of the Loan Documents.
(b) Notice and Cure Rights of OCHFT. City agrees that concurrently
with City's provision of any notice of default (including without limitation any Default Notice)
to Borrower under the City Loan Documents, City shall provide a copy of such notice to OCHFT
at the address specified below. City agrees that OCHFT shall have the right to cure any default
of Borrower within the same period of time provided to Borrower under the City Loan
Documents, extended by a period of ninety (90) days. City agrees that it shall not complete a
Foreclosure Remedy unless and until OCHFT has first been given a Default Notice, and OCHFT
has failed to cure the Noticed Defaults with the Cure Period; provided, however, that City shall
be entitled during the Cure Period to continue to pursue all of its rights and remedies under City
Loan Documents including but not limited to acceleration of the City Note (subject to the
de -acceleration provisions set forth below), commencement and pursuit of foreclosure (but not
3
completion of the foreclosure sale), any guaranty (subject to any notice and cure provisions
contained therein), and/or any other City Loan Document. It is the express intent of the parties
hereunder that City shall have the right to pursue all rights and remedies except completion of a
Foreclosure Remedy without liability to OCHFT for failure to provide notice to OCHFT, and
that the City's liability hereunder shall be expressly limited to actual damages to OCHFT directly
caused by the City's completion of a Foreclosure Remedy without OCHFT receiving the notice
and opportunity to cure described above. Except as specifically provided herein, or otherwise
agreed in writing, City's failure to give any such notice for any reason shall not act to impair or
waive any remedy or right of City under this Subordination Agreement or any of the City Loan
Documents.
3.3 Exercise of Cure Rights. With respect to the exercise of the cure rights
provided in Section 3.2 above, the following shall apply:
(a) Each Notice Party, whether OCHFT or City, shall have the right,
but not the obligation, to elect to cure the Noticed Defaults by giving the Defaulted Lender
written notice of its intention to cure the Noticed Defaults within the Cure Period and thereafter
curing all Noticed Defaults within the Cure Period.
(b) If a cure of all the Noticed Defaults is completed within the Cure
Period, the Defaulted Lender will rescind any notice of default recorded and request dismissal of
any receiver who has been appointed, after reimbursement of all of Defaulted Lender's costs,
including, without limitation, reasonable attorneys' fees and costs.
(c) Following the timely cure of all Noticed Defaults by a Notice
Party, the Defaulted Lender will not exercise its right to accelerate (or will de -accelerate) the
amounts due under the Defaulted Lender's loan documents by reason of the Noticed Defaults
cured by such Notice Party; provided, however that nothing herein shall be construed to waive
or limit any of Defaulted Lender's rights or remedies as to any uncured Noticed Default, or any
subsequent default, by Borrower.
(d) Nothing in this Section is intended to limit or modify any
covenant, term, or condition contained in the OCHFT Loan Documents or the City Loan
Documents, including, without limitation, any covenant against creating or recording any liens or
encumbrances against the Property without OCHFT's or City's prior written approval, and any
acceleration clause in the OCHFT Deed of Trust and/or the City Deed of Trust.
4. Integration; No Waiver. This Subordination Agreement is the whole and only
agreement with regard to the subordination of the liens, claims, and charges of the City Deed of
Trust to the OCHFT Deed of Trust. This Subordination Agreement may not be modified or
amended except by a written agreement signed by the party against whom enforcement is sought.
No waiver shall be deemed to be made by any party of any of its rights hereunder unless the
same shall be in writing signed by such party, and each such waiver, if any, shall be a waiver
only with respect to the specific matter or matters to which the waiver relates and shall in no way
impair the rights of such party or the obligations of Borrower to City or OCHFT in any other
respect at any other time.
5. Successors and Assigns. This Subordination Agreement is binding on and inures
to the benefit of the legal representatives, successors, and assigns of the parties.
6. Creditor's Rights. City and OCHFT each agree not to commence or join with
any other creditor of Borrower in commencing any bankruptcy, reorganization, or insolvency
proceedings against the Borrower without the prior written consent of the other party.
7. Governing Law. This Subordination Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, without regard to the choice of
law rules of that State, except to the extent that any of such laws may now or hereafter be
preempted by Federal law. The parties hereto consent to the jurisdiction of any Federal or State
court having jurisdiction within the OCHFT of Orange, California, submits to venue in such
jurisdiction, and also consents to service of process by any means authorized by Federal law or
the law of the State of California. Without limiting the generality of the foregoing, the parties
hereby waive and agree not to assert by way of motion, defense, or otherwise in such suit, action, or
proceeding, any claim that (i) any such party is not subject to the jurisdiction of the courts of the
above -referenced jurisdiction or the United States District Court for such jurisdiction, or (ii) such
suit, action, or proceeding is brought in an inconvenient forum, or (iii) the venue of such suit, action,
or proceeding is improper.
8. Notices. All notices given under this Subordination Agreement shall be in
writing and be given by personal delivery, overnight receipted courier (such as Airborne, UPS,
or Federal Express) or by registered or certified United States mail, postage prepaid, sent to the
party at its address appearing below its signature. Notices shall be effective upon the first to
occur of receipt, when proper delivery is refused, or the expiration of forty-eight (48) hours after
deposit in registered or certified United States mail as described above. Addresses for notice
may be changed by any party by notice to any other party in accordance with this Section.
9. Counterparts. This Subordination Agreement may be executed in counterparts,
and all counterparts constitute but one and the same document.
10. Exhibits and Recitals. The above Recitals and the attached exhibits are
incorporated into this Agreement.
(Remainder of page intentionally left blank.)
5
IN WITNESS WHEREOF, the parties have executed this Subordination Agreement.
ATTEST:
Jennifer L. Hall
Clerk of the Co'
Dated:
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
By: -�� 6,
Matthew Cody
Best, Best & Krieger
Special Counsel for the City
Dated: 31ft/Z3
RECOMMENDED FOR APPKOVAL:
Michael L. 4
Executive E
Community
Agency
CITY OF SANTA ANA
Kristine Ridge
City Manager
Dated:
Signed in Counterpart
q-2023-030
IN WITNESS WHEREOF, the parties have executed this Subordination Agreement.
ATTEST: —
e .H
Clerk of the Council
Dated:
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
0
Best, Best &)Crieger
Special Co sel for the City
Dated:
RECOMMENDED FOR APPROVAL:
Michael L. Garcia
Executive Director
Community Development Agency
CITY OF SANTA ANAL Q, Oid `U
chi- &%
Kristine Ridge
City Manager
Dated:
Signed in Counterpart
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 March 15, 2023 before me, Claudia M. Femandez-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 person(gO whose name(,a�slam
Hel+ Ythep subscribed to the within instrument and acknowledged to me that-xecuted the same in
-MiajiiRiheirauthorized capacity(ies), and that by.14adQ/theirsignatureWon 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.
cow"
CLAUDiA M. FERNANDE2-SHAW
my hand and official eal. NatUry ange - CaiHornia
orange #238OLnty
Commissions Ja 2597y Comm. Expires Jan 25, 2026
ORANGE COUNTY HOUSING FINANCE TRUST,
a political subdivision of the State of California
By:
Date: 3 20 2
APPROVED AS TO FORM AND LEGALITY
laro-eh ktawv-
By: Lauren Kramer (Mar 20, 202310:50 PDn Mar 20, 2023
Address for notices to OCHFT:
Orange County Housing Finance Trust
Attn: Adam Eliason, Manager
1 League #62335
Irvine, CA 92602
/TW ►lelAW4*0kyj1:1►k1
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 March 20, 2023
before me, Eduardo Vasquez, Notary Public
(insert name and title of the officer)
personally appeared Adam B Eliason
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. `oOV'oG,,,4
WITNESS my hand and official seal. �ASO
�P
e
a oo bin U
Signatur (Seal) ��49q `^'='.•••
��i.NGE CCJ.•`�
EXHIBIT A
LEGAL DESCRIPTION
n n o - ��
Exhibit A
i
E l('. � %%%� leii
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE COUNTY OF ORANGE,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
A PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE FINAL
DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS
ENTERED SEPTEMBER 12, 1868, IN BOOK `B", PAGE 410 OF JUDGMENTS OF THE
DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES
COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:
COMMENCING AT THE CENTERLINE INTERSECTION OF 15TH STREET AND
SYCAMORE STREET AS SHOWN ON THE RECORD OF SURVEY NO 85-1067,
RECORDED IN BOOK 111, PAGE 38, OF RECORD OF SURVEYS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CENTERLINE OF SYCAMORE
STREET BEING DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT
CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929
IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY,
CALIFORNIA; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE
STREET SOUTH 000 14' 46" WEST, 90 FEET AND SOUTH 00° 04' 48" EAST, 213.42 FEET
TO THE POINT OF BEGINNING; THENCE LEAVING SAID CENTERLINE NORTH 89° 58'
21" WEST, 312.17 FEET TO THE CENTERLINE OF BROADWAY, THENCE NORTHERLY
ALONG SAID CENTERLINE OF BROADWAY NORTH 00° 16' 10" EAST, 75.00 FEET TO
THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J. MULLINIX
RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE
COUNTY; THENCE EASTERLY ALONG SAID SOUTHERLY LINE OF SAID DEED TO T.
J. MULLINLY SOUTH 890 58' 10" EAST, 181.72 FEET TO THE WESTERLY LINE OF THE
EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS
DESCRIBED IN THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE
SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12,1869 IN BOOK `B", PAGE 410 OF
JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND
FOR LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTHERLY, ALONG SAID
WESTERLY LINE NORTH 00° 04' 48" WEST, 77.08 FEET; THENCE SOUTH 89°58'10"
EAST, 130.00 FEET TO THE ABOVE MENTIONED CENTERLINE OF SYCAMORE
STREET; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET,
SOUTH 00004'48" EAST, 152.06 FEET TO THE POINT OF BEGINNING.
SAID LAND IS SHOWN AS LOT 1 ON VOLUNTARY LOT MERGER NO. 2022-06
RECORDED JANUARY 26, 2023 AS INSTRUMENT NO. 2023000018589, OFFICIAL
RECORDS OF SAID COUNTY.
APN: 398-523-04
4874-2727-9960v.1 4900000-002383