HomeMy WebLinkAboutJAMBOREE HOUSING CORPORATION-2017INSURANCE NOT ON FILE
WORK MAY &Z PROCEED
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FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 6103 & 2738?
When Recorded Mail to:
City of Santa Ana
Cleric of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Cleric of the Council
A-2017-015
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
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SPACE ABOVE THILLINE FOR RECORDING USE C
` L D A ,4, FREE RECORDING REQUESTED l
[Government Code Section 64.9-3]
17rn>g1 iert'- 2-1353
LOAN AGREEMENT
by and between the
CITY OF SANTA ANA
And
Wakeham - Grant Apartments, L.P.
a California Limited Partnershin
(8 10 S. Minnie Street, Santa Ana, California)
Dated: September 27, 2017
LOAN AGREEMENT
HOMEPROGRAM
THIS LOAN AGREEMENT (the "Agreement") dated, for identification purposes only,
as of September 27, 2017, is made and entered into by and between the City of Santa
Ana, a charter city and municipal corporation (referred to herein as "City") and Wakeham
— Grant Apartments, L.P., a California limited partnership, with reference to the following:
RECITALS:
A. City has received an allocation of funds from the United States Department of
Housing and Urban Development ("HUD") under the HOME Investment Partnership
Program (the "HOME Program") (42 U.S.C. §12701, et seq.,) to be used in accordance
with applicable statutory requirements and regulations (the "HOME Regulations") (24
CFR Part 92);
B. A portion of City's allocation of HOME Program funds is reserved for
Community Housing Development Organizations (the "HOME Program/CHDO funds"),
and Jamboree Housing Corporation, the managing general partner for Wakeham —Grant
Apartments, L.P. has qualified and is in good standing as a Community Housing
Development Organization;
C. Among the purposes of the HOME Program are (1) to expand the supply
of decent, safe, sanitary, and affordable housing, with primary attention to rental housing,
for very low-income and low-income Americans; and (2) to provide participating
jurisdictions, on a coordinated basis, with the various forms of federal housing assistance,
including capital investment, mortgage insurance, rental assistance, and other federal
assistance, needed (a) to promote the development of partnerships among the federal
government, states and units of general local government, private industry, and nonprofit
organizations able to utilize all available resources to provide more of such housing, and
(b) to expand the capacity of nonprofit Community Housing Development Organizations
to develop and manage decent, safe, sanitary and affordable housing;
D. Developer is the owner of that certain property commonly Irnown as the
Wakeham — Grant Apartments, within the City of Santa Ana, California, and legally
described in Exhibit A attached hereto (the "Property"). The loans referenced herein shall
assist in the acquisition, new construction and/or rehabilitation of said Property that is
improved for a multifamily or single-family residential housing development.
E. Developer is on the City Approved List of Community Housing
Development Organizations and has been certified and approved to utilize HOME
Program/CFIDO funds.
F. In furtherance of the HOME Program, Developer has applied to City for a
loan with which to:
1. provide deeper affordability for a longer term, as well as rehabilitate
the Property, and
2. thereafter to maintain, operate and professionally manage the Property
as decent, safe, sanitary and affordable rental housing.
G. City, on certain terms and conditions, desire to make such loan
to Developer in order to make possible the rehabilitation of the Property, thereby
eliminating blight while expanding the supply of decent, safe, sanitary and affordable
housing.
H. If there is any discrepancy between Federal and State guidelines with regard
to any of the terms and conditions contained herein, the more stringent shall apply.
I. This 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/HOME Loan Note and the
City/HOME 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)].
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, City and Developer agree as follows:
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. All capitalized terms used herein, including, without
limitation, in the Recitals above and in all other Project Documents, unless otherwise
expressly defined, are defined where first used in this Agreement and/or as set forth in
this Article 1.
"Affordable Housing" means housing operated in accordance with the
requirements of 24 CFR 92.252 and the rents governed by HUD.
"Affordability Restrictions on Transfer of Property" means that
certain document affecting real property benefiting the City, attached hereto as Exhibit G.
"Affordable Rent" means the monthly rents that are set forth in more
detail in Section 7 of this Agreement.
"Building Permit" means the building permit(s) issued by City and
required for the rehabilitation, if any.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which Santa Ana City Hall is open to the public for the conduct of City affairs.
"Calendar Year" means each consecutive twelve (12) month period from
January 1 to December 31.
"Certificate of Completion" has the meaning set forth in Article 17
"CHDO" means Community Housing Development Organization under
the HOME Program.
"City" means the City of Santa Ana, California, a charter city and
municipal corporation.
"City/HOME Loan" means the loan to be made to Developer by City
from HOME funds pursuant to Article 5 of this Agreement.
"City/HOME Loan Deed of Trust" means the deed of trust encumbering
the Property, in the form attached hereto as Exhibit E,,to be executed by Developer
pursuant to Section 5.13.2 in order to secure the Loan Note.
"City/HOME Loan Note" means that certain promissory note in the
original principal amount of $93,032.00 in the form attached hereto as Exhibit F, and to
be executed by Developer in favor of City to evidence the obligation of Developer to
repay the City/HOME Loan.
"Close of Loan" shall mean the date upon which the City/HOME Loan
Deed of Trust is recorded in the Official Records of the County.
"Closing Statement" means the final statement of Developer's
account for the purchase and sale of the 'Property pursuant to the Purchase Contract.
"County" means the County of Orange, California.
"Developer" means Wakeham — Grant Apartments L.P., a California
limited partnership, its successors and assigns.
"Developer's Representative" shall mean the Chief Executive Officer of
the Managing General Partner of Developer or his/her designee.
"Event of Default" has the meaning set forth in Section 20.1.
"Executive Director" means the Executive Director of the Community
Development Agency, or his/her designee.
"Extremely Low Income" an adjusted income which does not exceed
thirty percent (30%) of the area median income for the Orange County, California
PMSA, adjusted for household size, as published by HUD.
"General Partner(s)" means the General Partners of Developer,
Wakeham— Grant Apartments, L.P., and their respective successors and assigns.
"Governmental Authority" means any governmental or quasi
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governmental agency, board, bureau, commission, department, court, administrative
tribunal or other instrumentality or authority with jurisdiction over the Property, 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 SeMC ., and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §§ 9601, et seq., as amended.
"HOME Compliance Period" is for a period of five (5) years.
"HOME Program" has the meaning set forth in Recital "A" above.
"HOME Regulations" has the meaning set forth in Recital "A" above.
"HUD" means the United States 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 (including, without limitation, streets,
curbs, storm drains, and adjacent street lighting).
"Indebtedness" of a person means (a) all indebtedness for borrowed
money, (b) notes payable and drafts accepted representing extensions of credit, whether
or not representing obligations for borrowed money, (c) any obligation for the purchase
of property or services in excess of $10,000 in the aggregate that is (i) deferred for more
than six (6) months, or (ii) evidenced by a note or similar instrument, and ( d) all recourse
and all non-recourse indebtedness secured by any Lien on any property or asset of such
person (whether or not assumed by such person).
"Indemnitees" has the meaning set forth in Section 14.5.
"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).
"Limited Partner" means the Limited Partners of Developer, Wakeham —
Grant Apartments, L.P., and their successors and assigns.
"Loan Documents" means, collectively, this Agreement, the City/HOME
Loan Note, the City/HOME Deed of Trust, the Affordability Restrictions on Transfer of
Property, and any other agreement, document, or instrument that the City reasonably
requires in connection with the execution of this Agreement or from time to time to
effectuate the purposes of this Agreement.
"Low Income" means an adjusted income which does not exceed eighty
percent (80%) of the area median income for the Orange County, California PMSA,
adjusted for household size, as published by HUD.
"Median Income for the Area" means the median income for the Orange
County, California PMSA as most recently determined by HUD. Also may be referred to
interchangeably in the Loan Documents as "Area Median Income" or "AMP'.
"Partnership Agreement" means the First Amended and Restated
Agreement of Limited Partnership dated December 11, 2001, as said Partnership
Agreement may be amended from time to time.
"Permitted Encumbrances for the Affordable Housing Restrictions"
means, collectively, the Senior Loan Deed of Trust and all other title exceptions and
limitations with respect to the Property hereafter approved by the Executive Director in
writing.
"Permitted Encumbrances for the City/HOME Loan Deed of Trust"
means, collectively, the Senior Loan Deed of Trust and all other title exceptions and
limitations with respect to the Property hereafter approved by the Executive Director in
writing.
"Project" means the rehabilitation of 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.
"Project Costs" means all costs of any nature incurred in connection with
the Project in accordance with generally accepted accounting principles.
"Property" means the Property that is located at 810 S. Minnie Street,
within the City of Santa Ana, and is more fully described in the "Legal Description" of the
Property attached hereto as Exhibit A and incorporated herein by reference.
"Term" the terns and conditions contained herein shall remain in effect
for fifty-five (55) years.
"Very Low Income" means an adjusted income which does not exceed
fifty percent (50%) of the area median income for the Orange County, California PMSA,
adjusted for household size, as published by HUD.
1.2 Singular and Plural Terms. Any defined term used in the plural in this
Agreement or any other City/HOME Loan Document shall refer to all members of the
relevant class and any defined term used in the singular shall refer to any number of the
members of the relevant class.
1.3 References and Other Terms. Any reference to this Agreement or any
Loan Document 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)
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.
2. [RESERVED]
SCOPE OF WORK/ PROJECT BUDGET
A "Scope of Work" for the Property is attached hereto as Exhibit B. Any material
change to the Scope of Work requested by the Developer shall be subject to the prior
written approval of the Executive Director.
A line -item budget for the Project, including a summary statement of sources and
uses of funds, is incorporated into Exhibit C (the 'Project Budget"). Any material change
to the Project Budget requested by Developer shall be subject to the prior written
approval of the Executive Director. A "Schedule of Performance" for the Property is
attached hereto as Exhibit D.
4. [RESERVED]
5. LOANS
A. CITY/HOME LOAN:
1. Amount and Purpose. Subject to the terms and conditions of this Agreement,
City agrees to make a loan of HOME funds to Developer in the principal amount of up to
$93,032 (the "City/HOME Loan") for the rehabilitation of the Property.
2. Citv/130ME Note and Deed of Trust. The City/HOME Loan shall be
evidenced by the City/HOME Loan Note in the form attached hereto as Exhibit F. The
City/HOME Loan shall be secured by the City/HOME Loan Deed of Trust in the form
attached hereto as Exhibit E. The City/HOME Deed of Trust shall be a deed of trust
encumbering the Property, subordinate to the Senior Loan(s) made to Developer.
3. City/HOME Loan Terms. The terms and conditions of the City/HOME
Loan are as set forth in the City/HOME Loan Note which is a residual receipts note. The
HOME compliance period is five (5) years, commencing on the date that all work is
complete and the Property is fully occupied.
6. CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS
6.1 Conditions Precedent. City's obligation to disburse the Loan Amount is subject
to the satisfaction, or waiver by the Executive Director, of the following conditions
precedent:
(a) Loan Documents. Developer shall have delivered to the
Loan Holder, signed by the authorized officer or officers of Developer, with such
signature(s) acknowledged where necessary, each of the following documents:
(i) the Loan Agreement;
(ii) The City/HOME Loan Note;
(iii) The City/HOME Deed of Trust; and,
(iv) The Affordability Restrictions on Transfer of Property.
(b) Title Insurance. City shall have received an LP -10 ALTA Lender's
loan policy of title insurance (2006 edition), or evidence of a commitment therefore
satisfactory to City, issued by First American Title Insurance Company and in form and
substance satisfactory to City, together with all endorsements and binders required,
naming City as the insured, in a policy amount of not less than the City/HOME Loan
Amount, showing Developer as the fee owner of the Property and insuring the
City/HOME Deed of Trust to be valid priority liens on the Property. The City/HOME
Loan Note and Deed of Trust shall be subordinate to the Senior Loan Note and First
Deed.
(c) Affordability Restrictions on Transfer of Property. Developer
shall have delivered to the Loan Holder, in the form attached hereto as Exhibit G, the
Affordability Restrictions on Transfer of Title pursuant to which, among other things,
Developer agrees that the Property shall be used only for decent, safe, sanitary and
affordable rental housing pursuant to the affordability requirements of Code of Federal
Regulations ("CFR") section 92.252 or 92.254 and California Health and Safety Code
("H&S") sections 50052.5, as applicable.
(d) Documents Recorded. This Loan Agreement, the City/HOME Loan
Deed of Trust and the Affordability Restrictions on Transfer of Property shall have been
recorded in the Official Records of the County.
(e) Request for Notice. For the benefit of City, Loan Holder shall
have recorded a request for notice of default of the Senior Loan (the "Request for Notice
of Default").
(f) 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.
(g) Representations and Warranties. The representations and
warranties of Developer contained in this Agreement and the other Loan Documents shall
be correct as of the Close of Loan as though made on and as of that date, and if requested
by the Executive Director, City shall have received a certificate to that effect signed by
Developer's Representative.
(h) 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 Executive Director, City shall have received a certificate to that effect
signed by Developer's Representative.
6.2 Disbursement Procedures for Loan.
A portion of the Loan proceeds shall be disbursed through Escrow to finance the
rehabilitation of the ,Property (as evidenced in Exhibit Q. The Loan proceeds shall not be
used for any purpose other than for rehabilitation costs of the Property, including a
Developer fee and soft costs related to development of the Project (costs all subject to City's
prior review). The City allows for eligible costs to be paid by HOME loan funds that were
incurred not more than 24 months prior to the HOME funds commitment date of this loan
agreement in accordance with HOME regulations.
6.3 First Disbursement. Agency/City's obligation to make the first disbursement of
the Rehabilitation Proceeds is subject to satisfaction of the following conditions
precedent:
(a) General Contractor. If the Executive Director has not yet approved the General
Contractor, the Executive Director shall have approved the identity and qualifications of
the General Contractor.
(b) Rehabilitation Contract. If the Executive Director has not yet approved the
Rehabilitation Contract, the Executive Director shall have approved the Rehabilitation
Contract.
(c) Relocation Plan. If the relocation of any existing tenants is
contemplated by the parties, the Executive Director shall have approved a plan for the
relocation of such tenants of the Property determined by the Executive Director to be
eligible for relocation assistance.
6.4 Termination for Failure of Condition. If (a) any of the conditions set forth
herein are not timely satisfied or waived by the Executive Director, and (b) Agency/City
is not in default under this Agreement, Agency/City may terminate this Agreement
without any further liability on its part by giving written notice of termination to
Developer. Upon the giving of such notice, all principal, interest and other amounts
owing under the City/HOME Loan Note(s) shall be immediately due and payable,
regardless of any other specified due date.
6.5 Any Disbursement. City's obligation to make any disbursement of the
Rehabilitation Proceeds (including the first and final disbursements) is subject to the
satisfaction of the following conditions precedent:
(a) Satisfactory Progress. The Executive Director shall be satisfied,
based on his/her own inspections or other reliable information, that the rehabilitation is
progressing satisfactorily in conformance with all applicable laws and other requirements
(including HOME regulations).
(b) Condition of Title. Either (i) the Executive Director reasonably
believes that no event has occurred since the Close of Loan 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 (ii) City must have
received, at Developer's expense but payable out of the Rehabilitation Proceeds, from the
title insurer who issued City's LP -10 Title Policy, all endorsements thereto then
reasonably required by City.
(c) Representations and Warranties. The representations and
warranties of Developer contained in this Agreement and the other City/HOME Loan
Documents shall be correct 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 and no event shall have occurred which, with the giving of notice or the passage
of time or both, would constitute an Event of Default by Developer.
6.6 Final Disbursement. City's obligation to disburse that portion of the
rehabilitation portion retained pursuant to Section 6.12 is subject to the satisfaction of the
following additional conditions precedent:
(a) Rehabilitation Complete. The rehabilitation shall be complete.
(b) Certificate of Occupancy Issued. Any portion of the rehabilitation
requiring inspection or certification by any Governmental Authority
shall have been inspected and certified as complete. Developer shall
request that the Building Department issue a Certificate of Occupancy,
a copy of which shall be delivered to the Executive Director, in order
for final disbursement to occur.
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(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 rehabilitation, and no mechanic's or
material man's lien shall be outstanding; or
(ii) Ninety-five (95) days shall have passed since actual
completion of the rehabilitation and/or construction, and no mechanic's or materialman's
lien shall be outstanding, or Developer shall have bonded over any such lien to City's
reasonable satisfaction.
6.7 Waiver of Conditions. The conditions set forth pertaining to City's
obligation to make disbursements of the rehabilitation or construction portion are for
City's benefit only and the Executive Director may waive all or any part of such rights by
written notice to Developer.
6.8 Disbursement Requests. The rehabilitation proceeds shall be
disbursed on a line -item by line -item basis in accordance with the Project Budget and
subject to the conditions in this section. In no event shall City have any obligation to
disburse any amount for any item in excess of the amount allocated to such item in the
Project Budget. Disbursements shall be made only upon Developer's written request in
the form of a Disbursement Request showing all costs which Developer intends to fund
with such disbursement, itemized in such detail as City may reasonably require,
accompanied in each case by (a) invoices and lien releases satisfactory to City, including
in any event partial lien releases executed by each contractor and subcontractor who has
received any payment for work performed, and (b ) all other documents and information
reasonably required by City. Disbursement Requests shall be submitted no less than ten
(10) Business Days prior to the date of the requested disbursement, and shall not be
submitted more often than monthly.
Prior to each disbursement by City of proceeds of the City/HOME Loan, Borrower shall
deliver to City a draw request ("Draw Request"), and all required supporting information
as set forth in the Loan Documents or as otherwise reasonably required by City in order
to provide information for evaluating the requested disbursement pursuant to customary
construction lending practices of institutional lenders in Southern California.
City shall notify Borrower of approval or disapproval of each Draw Request within five
(5) business days after receipt of the Draw Request in writing.
6.9 Manner of Disbursement. City may make any disbursement by check payable
to Developer; or on a voucher basis; or by check payable jointly to Developer and any
contractor, subcontractor or other claimant; or directly to any such claimant; or by any
other means reasonably selected by City. Disbursement will be made fifteen (15) days
from approval.
6.10 Cost Overruns. In the event that, at any time and for any reason, (a) the
actual cost reasonably estimated by City or Developer to be required to complete all
matters included in any line item in the Project Budget exceeds the amount allocated to
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that line item in the Project Budget, (b) rehabilitation costs for any matters not covered by
a specific line item have been or will be incurred, or (c) the undisbursed portion of the
rehabilitation portion is or may be insufficient to pay all rehabilitation costs that may be
payable under the City/HOME Loan Documents or otherwise in connection with the
rehabilitation, Developer shall, within ten (10) days after it receives written notice thereof
from City of any of the foregoing matters, do one or more of the following:
(a) provide satisfactory evidence to City that Developer has
previously paid such excess or otherwise provided for such insufficiency (collectively,
the "Excess Cost") with funds from a source other than the City/HOME Loan;
(b) reallocate sufficient funds to pay the Excess Cost from funds
allocated to "Contingency" in the Project Budget; provided, however, that the
Executive Director's consent to any such reallocation shall be required; or
(c) deposit an amount equal to the Excess Cost in a non-interest
bearing account (the "Overrun Account") with City from which withdrawals may be
made only with the consent of the Executive Director but which will be exhausted prior
to any further disbursement for any line item, so that any resulting surplus in any line
item of the Project Budget will then be reallocated to the line item(s) in which the Excess
Costs are expected to be incurred.
City shall have no obligation to make further disbursements until Developer has paid or
otherwise provided for the overrun as required above. Amounts deposited by Developer
in the Overrun Account for any Excess Costs shall be disbursed by City prior to the
disbursement of any remaining rehabilitation portion proceeds in the manner described in
subsection 9.3(c).
6.11 Cost Savings. Upon completion of and disbursement for all matters covered by
any line items in the Project Budget, any remaining undisbursed amounts allocated to that
line item shall be reallocated to "Contingency" and thereafter be available for
disbursement in accordance with the terms of this Agreement.
6.12 Retainage. City will withhold a Retainage of 10% from each Disbursement
for each of the hard cost line items of the project cost breakdown (and other line items
thereof designated for withholding of retainage) until all conditions to the final
disbursement of hard costs have been satisfied. In lieu of City's withholding Retainage,
Developer can by written notice to City elect not to draw any overhead or profit as would
otherwise be permitted under the Construction Contract until such time as Retainage
would otherwise have been released.
City shall not retain funds for building materials purchased by Developer for which
Developer supplies documentation to City proving payment in full or for soft costs.
6.12.1 Holdback. The retainage otherwise available for disbursement
shall be subject to a holdback of one hundred twenty-five percent (125%) of the
estimated cost (as determined by the Executive Director) for "punch -list" items. Such
12
holdback will be released when all punch -list items have been completed to the
satisfaction of City.
6.13 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.
6.14 Modification of Disbursement Conditions and Procedures. The
Executive Director shall have the authority to modify the disbursement conditions and
procedures set forth herein in order to conform them to the payment provisions of the
Rehabilitation Contract.
6.15 Other Terms and Conditions of Loan.
A. The Note shall become immediately due and payable, in the event of any
of the following:
(1) failure to complete the Project within four (4) years of the
recording date;
(2) HOME rental units must achieve initial occupancy within 18
months of project completion.
(3) violation of any of the use covenants and restrictions contained in
this Agreement after the expiration of any applicable notice and cure
periods;
(4) an Event of Default by Developer which is not timely cured after
expiration of any applicable notice and cure periods pursuant to the
terms of this Agreement.
6 .16 Closing Costs and Fees. Developer shall pay (a) all escrow fees and charges,
(b) all recording fees and charges on any document recorded pursuant to this Agreement,
and (c) the premium for the title insurance required hereunder.
7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE
PROPERTY
7.1 Use Covenants and Restrictions.
A. 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 rental units on the Property available to low- or very low-income
households at rents affordable to such households for five (5) years from the effective date
of this Agreement. The HOME restrictions for the ten (10) HOME assisted units shall be
enforced until the date that is 'five (5) years after the date on which the City reports the
Project as complete to the Department of Housing and Urban Development. The City
permits
13
the Developer to limit the eligibility and/or give preference to a particular segment of the
population in accordance with 24 CFR 92.253(d).
B. The Project shall consist of seventeen (17) One -Bedroom units. There shall be ten
(10) HOME assisted units. The HOME assisted units shall be fixed units with comparable
amenities to the other units (Units 810-02, 810-03, 810-04, 810-05, 810-06, 810-07, 810-
10, 810-12, 810-14, and 810-16). The affordability mix for the Project is as follows:
Unit T e AMI Level # of Units
1 BD 50%AMI 10
C. At initial lease up, households in the HOME assisted units cannot earn more than
50% of AMI, however existing tenants at the Property who are otherwise eligible under
the HOME Program may continue their tenancy at the Property. Rental increases shall be
in conformance with federal and state law. After the five (5) year HOME compliance
period, the City shall require that the units remain affordable, with rents calculated based
on assumed household size at the same income levels
D. All of the HOME units will be restricted to occupancy by households at Very Low
Incomes (50%) of the Area Median Income (AMI) or less. Current residents whose
incomes exceed Very Low (50%) of the AMI will be increased to either Thirty (30%)
percent of their monthly household income or market rent for the neighborhood, whichever
is lower.
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.
F. Affordable rents shall be governed by California Health and Safety Code Sections
50052.5 and 50053(b)(2), and as provided in the HOME Regulations 24 CFR section 92.2.
G. 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 HOME Regulations 24 CFR section 92.209(g).
H. Rents During Construction/Rehabilitation:
(a) All HOME units shall be charged not more than the Low HOME rent, as
amended from time to time (currently $978 for a One Bedroom unit).
7.2 Affordable Gross Startine Rents (Less Reasonable Utility Allowance): 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.
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A. HOME Assisted Units
# of Units Max Gross Monthly Rent
10 $97WUnit
(1) In no event shall the rent charged to the HOME assisted tenants be more
than that amount of the low rent as published by HUD, as amended from
time to time.
(2) Utility allowances must be deducted from the Maximum Gross Monthly
Rent. The Housing Authority of the City of Santa Ana publishes the
Utility Allowance Schedule.
(3) At the time of project completion, the Developer shall provide to the
City the address and/or unit number of each of the HOME assisted units.
(4) Annually with the financial statements, the Developer shall provide an
annual report of rents and occupancy of assisted units, including HOME -
assisted units, to verify compliance with affordability requirements. For
the HOME units, information on unit substitution and filling vacancies
shall be provided to ensure that the project maintains the required unit
mix.
7.3 Rent Increases: On an annual basis, the City shall provide the Developer with the
maximum allowable schedule of rents for the Property. In no event can Developer charge
any tenant more than such amount.
7.4 Prohibited Fees. The Developer and subsequent owner is prohibited from charging
fees that are not customary, consistent with HOME ;Regulations 24 CFR section
92.504(c)(3)(xi). The Developer and subsequent owner can charge reasonable application
fees to prospective tenants; other fees only to the extent that they are reasonable and
customary for the project area; and fees for services provided to tenants, provided that these
services are not mandatory.
7.5 Maintenance of the Property. Solely at Developer's expense, Developer agrees to
maintain the Property in a clean and orderly condition and in good condition and repair and
keep the Property free from any accumulation of debris and waste materials. If at any time
Developer fails to maintain, or cause to be maintained, the Property as required by this
section, and said condition is not corrected after the expiration of a reasonable period of time
not to exceed thirty (30) days from the date of written notice from the City, unless such
condition cannot reasonably be cured within thirty (30) days, in which case Developer shall
have such additional time as reasonably necessary to complete such cure, the City may
perform the necessary maintenance and Developer shall pay all reasonable costs incurred for
such maintenance. The City shall inspect the Property annually after the date of issuance of
the Certificate of Completion as described in Article 17 of this Agreement. During the
affordability period, the Property inust meet all applicable State and local codes. The
Property must be free of all health and safety defects during the affordability period.
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7.6 Obligation to Refrain from Discrimination. Developer covenants and agrees for
itself, its successors, its assigns and every successor in interest to the Property or any part
thereof, that there shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, religion, sex, mental or physical disability, marital
status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure
or enjoyment of the Property nor shall Developer itself or any person claiming Linder or
through him establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall
run with the land and shall remain in effect for the tenn of the Agreement.
8. DEFAULTS AND REMEDIES
8.1 Event of Default. Failure or delay by either party to perform any term of provision of
this Agreement within the time periods provided herein for such performance constitutes a
default under the Agreement. If any party defaults in performance of its obligations,
covenants or agreements hereunder, the defaulting party shall be entitled to cure the default
in accordance with this section. The injured party shall give written notice of default to the
party in default, specifying the default complained of by the injured party. Delay in giving
such notice shall not constitute a waiver of any default nor shall it change the time of
default. The defaulting party must, within thirty (30) days following service of said written
notice, commence to cure, correct or remedy such failure or delay and shall complete such
cure, correction, or remedy with reasonable diligence. Upon a default by Developer which
is not cured within thirty (30) days following service of said notice, unless such default
cannot reasonably be cured within thirty (30) days, in which case Developer shall have such
additional time as reasonably necessary to complete such cure but no more than ninety (90)
days, the City shall have the right to terminate this Agreement by delivery of written notice
of termination to Developer.
8.2 Institution of Legal Actions. In addition to any other rights or remedies, either party
may institute legal action to cure, correct or remedy any default to recover damages for any
default, or to obtain any other remedy consistent with the purpose of this Agreement.
8.3 Rights and Remedies are Cumulative. Except with respect to rights and remedies
expressly declared to be exclusive in this Agreement, the rights and remedies of the parties
are cumulative and the exercise by either party of one or more of such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by the other party.
8.4 Damages. In the event that the City is liable for damages to Developer, such liability
shall not exceed costs incurred by the Developer in the performance of this Agreement and
shall not extend to compensation for loss of future income, profits or assets; provided,
however, Developer's only remedy for any breach of this Agreement by the City shall be an
action for specific performance of such party's obligations.
8.5 Nonrecourse Liability. Neither Developer, nor any partner of Developer, shall have
any personal liability under this Agreement, or the attached Note and Deed of Trust, and any
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judgment, decree or order for the payment of money obtained in any action to enforce the
obligation of Developer to repay the loan evidenced by such documents shall be enforceable
against Developer only to the extent of Developer's interest in the Property.
GENERAL PROVISIONS AND WARRANTIES
As a material inducement to City to enter into this Agreement, Developer
represents and warrants as follows:
9.1 Formation, Qualification and Compliance. Jamboree Housing Corporation, the
managing general partner of Developer (a) is a non-profit public -benefit corporation,
validly existing and in good standing under the laws of the State of California, (b) has all
requisite authority to conduct its business and own and lease its properties, and (c) is
qualified and in good standing in every jurisdiction in which the nature of its business
snakes qualification necessary or where failure to qualify could have a material adverse
effect on its financial condition or the performance of its obligations under the Loan
Documents. Developer is in compliance with all laws applicable to its business and has
obtained all approvals, licenses, exemptions and other authorizations from, and has
accomplished all filings, registrations and qualifications with, any Governmental
Authority that are necessary for the transaction of its business.
9.2 Execution and Performance of Loan Documents.
9.2.1 Developer has all requisite authority to execute and
perform its obligations under the Loan Documents.
9.2.2 The execution and delivery of Developer of, and the
performance by Developer of its obligations under, each Loan Document has been
authorized by all necessary action and does not and will not:
(a) require any consent or approval not heretofore
obtained of any person having any interest in Developer;
(b) violate any provision of, or require any consent or
approval not heretofore obtained under, any articles of incorporation, by-laws or other
governing document applicable to Developer;
(c) result in or require the creation of any lien, claim,
charge or other right of others of any kind (other than under the City/HOME Loan
Documents) on or with respect to any property now or hereafter owned or leased by
Developer;
or
(d) violate any provision of any law presently in effect;
(e) constitute a breach or default under, or permit the
17
acceleration of obligations owed under, any contract, loan agreement, lease or other
agreement or document to which Developer is a party or by which Developer or any of its
property is bound.
9.2.3 Developer is not in default, in any respect that is materially adverse
to the interests of City under the Loan Documents or that would have any material
adverse effect on the financial condition of Developer or the conduct of its business,
under any law, contract, lease or other agreement or document described in sub-
paragraph (d) or (e) of the previous subsection.
9.2.4 No approval, license, exemption or other authorization from, or
filing, registration or qualification with, any Governmental Authority is required which
has not been previously obtained in connection with:
(a) the execution of Developer of, and the
performance by Developer of its obligations under, the Loan Documents; and
(b) the creation of the liens described in the Loan
Documents.
9.3 Financial and Other Information. To the best of Developer's knowledge,
all financial information furnished to City with respect to Developer in connection with
the Loan (a) is complete and correct in all material respects as of the date of preparation
thereof, (b) accurately presents the financial condition of Developer, and (c) has been
prepared in accordance with generally accepted accounting principles consistently
applied or in accordance with such other principles or methods as are reasonably
acceptable to City. To the best of Developer's knowledge, all other documents and
information furnished to City with respect to Developer, in connection with the Loans,
are correct and complete insofar as completeness is necessary to give the City accurate
knowledge of the subject matter. To the best of Developer's knowledge Developer has
no material liability or contingent liability not disclosed to City in writing and there is no
material lien, claim, charge or other right of others of any kinds (including liens or
retained security titles of conditional vendors) on any property of Developer not disclosed
in such financial statements or otherwise disclosed to City in writing.
9.4 No Material Adverse Chance. There has been no material adverse change in
the condition, financial or otherwise, of Developer since the dates of the latest financial
statements furnished to City. Since those dates, Developer has not entered into any
material transaction not disclosed in such financial statements or otherwise disclosed to
City in writing.
9.5 Tax Liability. Developer has filed all required federal, state and local tax returns
and has paid all taxes (including interest and penalties, but subject to lawful extensions
disclosed to City in writing) other than taxes being promptly and actively contested in
good faith and by appropriate proceedings. Developer is maintaining adequate reserves
for tax liabilities (including contested liabilities) in accordance with generally accepted
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accounting principles or in accordance with such other principles or methods as are
reasonably acceptable to City.
9.6 Governmental Reauirements. Developer is in compliance with all laws
relating to the Property and all Governmental Authority approvals, including zoning, land
use, planning requirements, and requirements arising from or relating to the adoption or
amendment of, any applicable general plan, subdivision and parcel map requirement;
environmental requirements, including the requirements of the California Environmental
Quality Act and the National Environmental Policy Act and the preparation and approval
of all required environmental impact statements and reports; use, occupancy and building
permit requirements; and public utilities requirements.
9.7 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.
9.8 Litigation. There are no material actions or proceedings pending or, to the best of
the Developer's knowledge, threatened against or affecting Developer or any property of
Developer before any Governmental Authority, except as disclosed to City in writing
prior to the execution of this Agreement.
9.9 Bankruptcy. To the best of Developer's knowledge, no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending or threatened against Developer, nor are
any of such proceedings contemplated by Developer.
9.10 Information Accurate. To the best of Developer's knowledge, all information,
regardless of its form, conveyed by Developer to City, by whatever means, is accurate,
correct and sufficiently complete to give City true and accurate knowledge of its subject
matter, and does not contain any misrepresentation or omission.
9.11 Conflicts of Interest. No member, official or employee of the City shall have any
personal interest, direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to this Agreement which affects his/her
personal interests or the interests of any corporation, partnership or association in which
he/she has a direct or indirect financial interest. The Developer warrants that it neither has
paid nor given, nor will pay or give, any third party any money or other consideration for
obtaining this Agreement.
9.1.2 Nonliability of City Officials and Employees. No member, official or employee of
the City shall be personally liable to the Developer in the event of any default or breach by
the City or for any amount which may become due to Developer or on any obligations under
the terms of this Agreement.
9.13 No Assignment. Developer expressly acknowledges and agrees that the City has
only agreed to assist the Developer as a means by which to induce the
acquisition/rehabilitation/development of the Property. Accordingly, Developer further
expressly acknowledges and agrees that this Agreement is a personal right of Developer that
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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 Executive Director (such consent not to be unreasonably withheld), except that no prior
consent is necessary for an assignment by a limited partner of Developer to an affiliate, or as
otherwise provided in the Deed of Trust.
9.14 Applicable Law. This Agreement shall be interpreted, governed and enforced under
federal and state laws.
9.15 Third Parties. This Agreement is made for the sole benefit of Developer and the
City and their successors and assigns, and no other person or persons shall have any rights
or remedies under or by reason of this Agreement or any right to the exercise of any right or
power of the City hereunder or arising from any default by Developer, nor shall the City
owe any duty whatsoever to any claimant for labor performed or materials furnished in
connection with the rehabilitation of the Property.
9.16 Control of Property. The parties acknowledge that the City has not at any time
participated in any manner in the management or operation of the Property, and will not so
participate at any time hereafter.
10. CONDITIONS FOR REHABILITATION
10.1 Permits and Approvals. Developer shall diligently obtain all
permits, including all building permits, licenses, approvals, exemptions and other
authorizations of Governmental Authority required in connection with the rehabilitation
and conversion of the Property.
10.2 Commencement and Completion of Rehabilitation.
The rehabilitation shall be considered complete for purposes of this Agreement
only when (a) all work described has been completed and fully paid for, and (b) all work
requiring inspection or certification by Governmental Authority has been completed and
all requisite certificates, approvals and other necessary authorizations (including required
final certificates of occupancy) have been obtained.
10.3 Change Orders. The Rehabilitation Contract shall not be modified
except pursuant to change orders. All change orders:
(a) shall be in writing, numbered in sequence, signed
by Developer and submitted to City prior to the proposed effectiveness thereof and
accompanied by any working drawings and a written narrative of the proposed change.
(b) Shall be subject to the Executive Director's
prior written approval.
10.4 Entry and Inspection. At all times prior to completion of the
rehabilitation, upon reasonable notice, City and their agents shall have (a) the right of free
access to the Property and all sites away from the Property where materials for the
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rehabilitation are stored, (b) the right to inspect all labor performed and materials
furnished for the rehabilitation, and (c) the right to inspect and copy all documents
pertaining to the rehabilitation. Developer may reasonably require City and their agents
to be accompanied by Developer representatives.
10.5 Compliance with Section 3 Clause. Section 3 of the Housing and
Urban Development Act of 1968, 12 U.S.C. 1701u, as amended by Section 915 of the
Housing and Community Development Act of 1992 requires that economic opportunities
generated by HUD financial assistance for housing and community development
programs be targeted toward low- and very low- income persons. Whenever HUD
assistance generates opportunities for employment or contracting, state and local
grantees, as well as other recipients of HUD housing assistance funds must, to the
greatest extent feasible, provide these opportunities to low- and very low- income persons
and to businesses owned by or employing low- and very low- income persons. Section 3
applies to projects for which HUD's share of project costs exceeds $200,000 and
contracts and subcontracts awarded on projects for which HUD's share or project costs
exceeds $200,000 and the contract or subcontract exceeds $100,000.
For purposes of this Section 3 Clause and compliance thereto, whenever
the word "contractor" is used it shall mean and include, as applicable, the Developer, and
its contractor and subcontractor(s), if any. The particular text to be utilized in any and all
contracts of any contractor doing work covered by Section 3 shall be in substantially the
form of the following, as reasonably determined by the City, or as directed by HUD or its
representative, and shall be executed by the applicable contractor under penalty of
perjury:
"(a) The work to be performed under this contract is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as
amended, 12 U.S.C. 170lu ("Section 3"). The purpose of Section 3 is to ensure
that employment and other economic opportunities generated by HUD assistance
or HUD -assisted projects covered by Section 3, shall, to the greatest extent
feasible, be directed to low- and very low-income persons [inclusive of Very Low
Income Persons, Very Low Income Households, and Very Low Income Tenants
served by the Project], particularly persons who are recipients of HUD assistance
for housing.
(b) The parties to this contract agree to comply with HUD's
regulations in 24 CFR part 135, which implement Section 3. As evidenced by
their execution of this contract, the parties to this contract certify that they are
under no contractual or other impediment that would prevent them from
complying with the part 135 regulations.
(c) The contractor agrees to send to each labor organization or
representative of workers with which the contractor has a collective bargaining
agreement or other understanding, if any, a notice advising the labor organization
or workers' representative of the contractor's commitments under this Section 3
clause, and will post copies of notices in conspicuous places at the work site
where both employees and applicants for training and employment positions can
21
see the notice. The notice shall describe the Section 3 preference, shall set forth
minimum number of job titles subject to hire, availability of apprenticeship and
training positions, the qualifications for each; and the name and location of
person(s) taking applications for each of the position; and the anticipated date the
work shall begin.
(d) The contractor agrees to include this Section 3 clause in every
subcontract subject to compliance with regulations in 24 CFR part 135, and
agrees to take appropriate action, as provided in an applicable provision of the
subcontract or in this Section 3 clause, upon a finding that the subcontractor is in
violation of the regulations in 24 CFR part 135. The contractor will not
subcontract with any subcontractor where the contractor has notice or knowledge
that the subcontractor has been found in violation of the regulations in 24 CFR
part 135.
(e) The contractor will certify that any vacant employment positions,
including training positions, that are filled (a) after the contractor is selected but
before the contract is executed, and (b) with persons other than those to whom the
regulations of 24 CFR part 135 require employment opportunities to be directed,
were not filled to circumvent the contractor's obligations under 24 CFR part 135.
(f) Noncompliance with HUD's regulations in 24 CFR part 135 may
result in sanctions, termination of this contract for default, and debarment or
suspension from future HUD assisted contracts."
After the foregoing Section 3 Clause, there shall be a signature block for
the contractor, as applicable, the following text shall be included immediately above the
signature block: "The contractor/provider by his/her signature affixed hereto declares
under penalty of perjury that contractor has read the requirements of the Section 3 Clause
and accepts all its requirements contained therein for all of his/her operations related to
this contract."
To the extent applicable, the Developer shall comply and/or cause
compliance with Section 3 Clause requirements for the Project. For example, when and
if Developer or its contractor(s)/subcontractor(s) hire(s) full time employees, rather than
volunteer labor or materials, Section 3 is applicable and all disclosure and reporting
requirements apply.
10.6 Rehabilitation Information. From time to time during the course of the
rehabilitation, 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 rehabilitation, itemized as to trade description and
item, showing the name of the contractor(s) and/or subcontractor(s), and including such
indirect costs as real estate taxes, legal and accounting fees, insurance, architects' and
engineers' fees, loan fees, interest during construction and contractors' overhead.
10.7 Protection Against Liens. Developer shall diligently file a valid
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Notice of Completion upon completion of the rehabilitation, diligently file a notice of
cessation in the event of a cessation of labor on the rehabilitation 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.
10.8 General Contractors who are Related Parties to the Developer. If the
Project is developed with general contractors who are Related Parties to the Developer,
the Developer must be audited to the subcontractor level by an outside auditing firm
approved by the City. The Developer shall pay for the audit to the subcontractor level by
an outside auditing firm.
11. FEDERAL (HOME PROGRAM) COVENANTS
11.1 CHDO. Jamboree Housing Corporation, the managing general
partner of Developer, represents and warrants that it qualifies and is in good standing as a
Community Housing Development Organization under the HOME Program. Developer
hereby covenants and agrees to maintain such status throughout the term of this
Agreement, and to provide the Agency and City with written documentation necessary to
demonstrate maintenance of said status on an annual basis.
11.2 Qualification as Affordable Housing. As more particularly provided in
the Affordability Restrictions on Transfer of Property, Developer shall use, manage and
operate the Property in accordance with the requirements of 24 CFR 92.252 so as to
qualify the housing on the Property as Affordable Housing with affordable rents.
11.3 Tenant and Participant Protection. Developer shall comply with the
requirements of 24 CFR 92.253.
11.4 [Intentionally Omitted]
11.5 Handicapped Accessibility. Developer shall comply with (a) Section
504 of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR 8C
governing accessibility of projects assisted under the HOME Program; and (b) the
Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR 35-36
in order to provide handicapped accessibility to the extent readily achievable.
11.6 Use of Debarred. Suspended, or Ineligible Participants. Developer shall
comply with the provisions of 24 CFR 24 relating to the employment, engagement of
services, awarding of contracts, or funding of any contractor or subcontractor during any
period of debarment, suspension, or placement in ineligibility status.
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11.7 Maintenance of Drug -Free Workplace. Developer shall certify that
Developer will provide a drug-free workplace in accordance with 24 CFR 84.13.
11.8 Lead -Based Paint. Developer shall comply with the requirements of the
Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846) and implementing
regulations at 24 CFR 92.355, as applicable.
11.9 Affirmative Marketing. Developer shall implement and perform such
affirmative marketing procedures and requirements for the Property (24 CFR 92.351) in
compliance with the City's adopted Program (a copy of which is attached hereto and
incorporated herein as Exhibit H).
11.10 EE ual Opportunity and Fair Housing. Developer shall carry out the
rehabilitation and perform its obligations under this Agreement in compliance with all of
the state and federal laws and regulations regarding equal opportunity and fair housing
described in 24 CFR 92.350.
11.11 Pro pertv Standards. Developer shall cause the Property to meet the
housing quality standards set forth in 24 CFR 92.251 and 24 CFR 882.109, as well as all
applicable local, state and federal codes and ordinances, including zoning ordinances.
Developer shall also cause the Property to meet the current edition of the Model Energy
Code published by the Council of American Building Officials.
11.12 Displacement and Relocation. Developer acknowledges and agrees
that, pursuant to 24 CFR 92.353 and consistent with the other goals and objectives of this
part, City must ensure that it has taken all reasonable steps to minimize the displacement
of persons as a result of the Project. Furthermore, to the extent feasible, residential
tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent,
safe, sanitary and affordable dwelling unit on the Property upon completion of the
rehabilitation. Developer agrees to cooperate fully and completely with City in meeting
the requirements of 24 CFR 92.253 and shall take all actions and measures reasonably
required by the Executive Director in connection therewith. All applicable state
guidelines must also be followed.
(a) Developer acknowledges and agrees to hire a Relocation
Consultant to provide relocation services, pursuant to the Uniform
Relocation Act and Real Property Acquisition Policies Act of 1970
("URA") and 24 CFR 92.253.
(b) The City, Developer, and Relocation Consultant will meet
periodically during the relocation to provide updates and review
tenant files, including at Project approval and prior to final benefit
calculations. The Developer and Relocation Consultant shall carry
out activity in compliance with URA and the City's Acquisition
and Relocation Policy and Procedures Manual ("Manual").
(c) The Developer and Relocation Consultant shall maintain accurate
records and files pertaining to the temporary and permanent
24
relocation of tenants, in accordance with URA and the City's
Manual.
(d) The Developer and Relocation Consultant shall provide all
relocation and tenant files to the City once relocation is complete
at the Project.
11.13 Other Program Requirements. Developer shall carry out each activity
in compliance with all federal laws and regulations described in subpart H of 24 CFR 92,
except that Developer does not assume City's responsibilities for environmental review in
24 CFR 92.352 or the intergovernmental review process in 24 CFR 92.359.
11.14 Request for Disbursements of Funds. Notwithstanding anything
contained in this Agreement to the contrary, Developer may not request disbursements of
funds under this Agreement until the funds are needed for payment of eligible costs (such
funds shall be used solely towards the rehabilitation of the Property). The amount of each
request shall be limited to the amount needed.
11.15 Eligible Costs. Developer shall use HOME Funds to pay costs defined as
"eligible costs" pursuant to 24 CFR 92.206.
11.16 Records and Reports. Developer shall maintain and from time to time
submit to City such records, reports and information as the Executive Director may
reasonably require in order to permit City to meet the record keeping and reporting
requirements required of it pursuant to 24 CFR 92.508.
11.17 Uniform Administrative Requirements, Cost Principles and Audit
Requirements for Federal Awards. Developer shall comply with the requirements and
standards of 2 CFR 200.
11.18 Conflict of Interest. Developer shall comply with and be bound by the
conflict of interest provisions set forth at 24 CFR 570.611, as well as state regulations
pertaining to conflict of interest.
11.19 Monitoring. Developer shall allow the City to conduct periodic
inspections of the HOME assisted units on the Property as required by the Program after
the date of rehabilitation completion, with reasonable notice. Developer shall cure any
defects or deficiencies found by the City while conducting such inspections within two
weeks of written notice thereof, or such longer period as is reasonable within the sole
discretion of the City.
11.20 Recertification of Tenant Income.
(A) Developer shall take all necessary steps to review the income of all tenants
prior to renting to them, as well as reviewing current tenants on an annual basis,
in accordance with HOME regulations and guidelines. Every fifth (5th) year,
Developer shall require new original income documents to be submitted by
tenants. Tenants in HOME assisted units whose incomes no longer comply with
25
federal income guidelines shall have their rents adjusted in accordance with
federal HOME guidelines (24 CFR 92.252-92.253).
(B) HOME assisted units continue to qualify as affordable housing despite a
temporary non-compliance caused by increases in the incomes of existing tenants
if actions satisfactory to HUD are being taken to ensure that all vacancies are
filled in accordance with this section until the non-compliance is corrected.
11.21 Other HOME Program Requirements. Developer shall comply with all
other applicable requirements of the HOME Program.
11.22 Controlling Covenants. If there is a discrepancy between State and
Federal law with regard to any of the aforementioned covenants, the more stringent shall
apply.
12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION
AND REPAIR OF PROPERTY
1.2.1 Maintenance. Developer shall maintain the Property (and all abutting
grounds, sidewalks, roads, parking and landscape areas which Developer is otherwise
required to maintain) in good condition and repair; shall operate the Property in a
businesslike manner; shall prudently preserve and protect its own as well as the City's
interests in connection with the Property; shall not commit or permit any waste or
deterioration of the Property (except for normal wear and tear); shall not abandon any
portion of the Property or leave the Property unguarded or unprotected; and shall not
otherwise act, or fail to act, in such a way as to unreasonably increase the risk of any
damage to the Property or of any other impairment of City's interests under the Loan
Documents. Without limiting the generality of the foregoing, and except as otherwise
agreed by City in writing from time to time, Developer shall promptly and faithfully
perform and observe each of the following provisions:
12.1.1 Alterations and Repair. Developer shall not remove, demolish or
materially alter any Improvement without City's prior consent, except to make non-
structural repairs which preserve or increase the Property's value, and shall promptly
restore, in a good and professional manner, any Improvement (or other aspect or portion
of the Property) that is damaged or destroyed from any cause.
12.2 Compliance. Developer shall comply with all laws and requirements of
Governmental Authority (including, without limitation, all requirements relating to the
obtaining of Governmental Authority approvals), all Governmental Authority approvals
and all rights of third parties, relating to Developer, the Property or Developer's business
thereon.
1.2.3 Taxes and Impositions. Developer shall pay, prior to delinquency,
all of the following (collectively, the "Impositions"): (a) all general and special real
property taxes and assessments imposed on the Property; (b) all other taxes and
assessments and charges of every kind that are assessed upon the Property (or upon the
owner and/or operator of the Property) and that create or may create a lien upon the
26
Property (or upon any personal property or fixtures used in connection with the Property),
including, without limitation, non-governmental levies and assessments pursuant to
applicable covenants, conditions or restrictions; and (c) all license fees, taxes and
assessments imposed on City (other than City's income or franchise taxes) which are
measured by or based upon (in whole or in part) the amount of the obligations secured by
the Property. If permitted by law, Developer may pay any Imposition in installments
(together with any accrued interest).
12.1.3.1 Right to Contest. Developer shall not be required to pay any
Imposition so long as (a) its validity is being actively contested in good faith and by
appropriate proceedings, (b) Developer has demonstrated to City's reasonable satisfaction
that leaving such Imposition unpaid pending the outcome of such proceedings could not
result in conveyance of the Property in satisfaction of such Imposition or otherwise
impair City's interests under the Loan Documents, and (c) Developer has furnished City
with a bond or other security satisfactory in an amount not less than 100% of the
applicable claim (including interest and penalties).
12.1.3.2 Evidence of Payment. Upon demand by City from
time to time, Developer shall deliver to City, within thirty (30) days following the due
date of any Imposition, evidence of payment reasonably satisfactory to City.
12.1.3.3 Books and Records. Developer shall maintain complete books of
account and other records reflecting its operations (in connection with any other
businesses as well as with respect to the Property), in accordance with generally accepted
accounting principles applied on a consistent basis or in accordance with such other
principles or methods as are reasonably acceptable to City, in accordance with 24 CFR
92.508.
12.4 Prosect Operating Account. Subject to the requirements of the Senior
Lender, Developer must promptly deposit all project income directly into a segregated
depository account established exclusively for the Project ("Project Operating Account").
Withdrawals from this account may be made only in accordance with the provisions of
this Agreement and the approved Project Budget, as it may be revised from time to time
with City approval. Developer may make withdrawals from this account solely for the
payment of project expenses (including, without limitation, funding reserves and the
making of debt service payments), project fees and permitted distributions to the partners
of the Developer. Withdrawals from this account for other purposes may be made only
with the prior written approval of the City.
12.5 Replacement Reserve Account. Developer must establish or cause to be
established a segregated interest-bearing replacement reserve depository account
("Replacement Reserve Account") no later than sixty (60) days after the Certificate of
Completion is filed. Developer must make monthly deposits from project income into
the Replacement Reserve in accordance with Developer's Budget, as amended from time
to time. Developer may withdraw funds from the Replacement Reserve Account solely
to fund capital improvements for the Project, such as replacing or repairing structural
elements, furniture, fixtures or equipment of the Project that are reasonably required to
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preserve the Project. Developer may not withdraw funds from the Replacement Reserve
Account for any other purpose without the prior written approval of the City.
13. NONDISCRIMINATION COVENANTS
13.1 Obligation to Refrain from Discrimination. Developer covenants and
agrees that:
A. In Use of Property. There shall be no discrimination
against or segregation of any person, or group of persons, on account of race, color,
creed, religion, sex, mental or physical disability, marital status, national origin, or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property, nor shall Developer or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendors of the Property.
B. In Affordable Housing Restrictions. The
foregoing covenant shall (a) be included in the Affordability Restrictions on Transfer of
Property, (b) run with the land, and (c) remain effective for the term of the contract (for
55 years).
C. In Employment. In rehabilitation of the
Property, Developer shall not discriminate against any employee or applicant because of
race, color, creed, religion, sex, marital status, mental or physical disability, national
origin, or ancestry. Developer shall take affirmative action to ensure that applicants are
employed, and that employees are treated during employment, without regard to their
race, color, creed, religion, sex, marital status, national origin, or ancestry.
D. In all Contracts. Developer shall cause the foregoing
covenants to be inserted in all contracts for any work covered by this Agreement so that
such provisions will be binding upon each contractor and subcontractor for the benefit of
City, provided that the foregoing covenant shall not apply to contracts or subcontracts for
standard commercial supplies or raw materials.
14. ENVIRONMENTAL MATTERS
14.1 Representation and Warranty. Except as disclosed in writing to the
City, Developer has no knowledge (a) of the presence on, under or about the Property,
now or in the past, of any Hazardous Materials, or of the transportation to or from the
Property of any Hazardous Materials, (b) that asbestos or polychlorinated biphenyls
(PCBs) are contained in or stored on the Property, or (c) that there are any underground
storage tanks located in, on or under the Property.
14.2 Compliance with Environmental Laws. Developer shall (a) comply with
all environmental laws and environmental permits applicable to the Rehabilitation of the
Property, (b) immediately pay or cause to be paid all costs and expenses incurred by
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reason of such compliance, (c) keep the Property free and clear of any environmental
claims or liens imposed pursuant to any environmental law, and (d) obtain and renew all
environmental permits required for ownership or use of the Property.
14.3 Presence of Hazardous Materials. Developer shall not, and shall not
permit anyone else to, generate, use, treat, store, handle, release, or dispose of Hazardous
Materials on the Property, or transport or permit the transportation of Hazardous
Materials to or from the Property except for de minimis quantities used at the Property in
compliance with all applicable environmental laws and required in connection with the
routine operation and maintenance of the Property.
14.4 Notice of Environmental Matters. Developer shall immediately advise
City in writing, upon Developer's learning thereof of any of the following: (a) any
pending or threatened environmental claim against Developer or the Property, (b) any
condition or occurrence that (i) results in noncompliance with any applicable
environmental law, (ii) could reasonably be anticipated to cause the Property to be
subject to any restrictions on the ownership, occupancy, use or transferability of the
Property under any environmental Law, or (iii) could reasonably be anticipated to form
the basis of an environmental claim against the Property or Developer.
14.5 Environmental Indemnification by the Developer. Developer agrees to
defend, indemnify and hold harmless the City and their respective officers, directors,
employees and agents (collectively the "Indemnitees ") from and against any and all
obligations (including removal and remediation), losses, claims (including third party
claims), suits, judgments, liabilities, penalties, damages (including consequential and
punitive damages), costs and expenses (including consultants, and attorneys' fees) of
whatever kind or nature whatsoever that may at any time be incurred by, imposed on, or
asserted against the Indemnitees directly or indirectly based on, or arising or resulting
from the actual or alleged presence of Hazardous Materials on the Property other than
arising from the gross negligence, willful misconduct and/or illegal actions of any
Indemnitee.
1.5. OTHER AFFIRMATIVE COVENANTS
While any obligation of Developer under the City/HOME Loan Note or Deed of
Trust remain outstanding, the following provisions shall apply, except to the extent that
Executive Director otherwise consents in writing:
15.1 Existence. Developer's Managing General Partner shall maintain its
existence in good standing under the laws of the State of California, and
Developer shall provide documentation of such status annually to the City.
15.2 Protection of Lien. Developer shall maintain the lien of the City
Deed of Trust as a valid second priority deed of trust on the Property and take all
actions, and execute and deliver to City all documents, reasonably required by
City from time to time in connection therewith.
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15.3 Notice of Certain Matters. Developer shall give notice to City, within ten
(10) days of Developer's learning thereof, of each of the following:
(a) any filed litigation or claim affecting or relating to the
Property and involving an amount in excess of $5,000; and any litigation or claim that
might subject Developer or any general partner to liability in excess of $5,000, whether
covered by insurance or not;
(b) any dispute between Developer and a Governmental
Authority relating to the Property, the adverse determination of which might materially
affect the Property;
(c) any change in Developer's principal place of business;
(d) any aspect of the Improvements that is not in
substantial conformity with the plans or code;
(e) any Event of Default or event which, with the giving of
notice or the passage of time or both, 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; and/or
(h) any material adverse change in the financial condition of
Developer.
1.5.4 Further Assurances. Developer shall execute and acknowledge (or cause
to be executed and acknowledged) and deliver to City all documents, and take all actions,
reasonably required by City from time to time to confirm the rights created or now or
hereafter intended to be created under the Loan Documents; to protect and further the
validity, priority and enforceability of the City Deed of Trust; to subject to the Deed of
Trust any property intended by the terns of any Loan Document(s) to be covered by the
City Deed of Trust or otherwise to carry out the purposes of the Loan Documents and the
transactions contemplated thereunder. Notwithstanding anything to the contrary set forth
herein, the Developer shall have no obligation to execute any document, or take any
action, which would (i) change a material tern of any Loan Document, (ii) change or
impair any material right of Developer and/or (iii) increase the liability of Developer or
any partner thereof.
15.5 Annual Financial Statements. Developer shall deliver to City, within
one hundred twenty (120) days after the end of each Calendar Year, (a) a certified public
accountant reviewed balance sheet for Developer as of the end of such Calendar Year and
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a certified public accountant reviewed statement of profit and loss for Developer and for
Developer's operations in connection with the Property for such Calendar Year, together
with all supporting schedules, (b) a certificate of such certified public accountant that
such documents were reviewed by such certified public accountant in accordance with
generally accepted accounting principles and otherwise comply with generally accepted
accounting principles review requirements, and (c) a certificate of Developer's
Administrative General Partner that such documents: (i) were prepared in accordance
with generally accepted accounting principles applied on a consistent basis or in
accordance with such other principles or methods as are reasonably acceptable to City,
(ii) fairly present Developer's financial condition, (iii) show all material liabilities, direct
and contingent, and (iv) fairly present the results of Developer's operations. Developer
shall also provide the City with any other annual audit reports issued by other monitoring
agencies.
15.6 Audits and Access to Records. Developer agrees that City, the U.S.
Department of Housing and Urban Development, the Comptroller General of the United
States or any of their authorized representatives shall have the right of access, upon
reasonable notice, to any books, documents, papers, or other records of Developer which
are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts
or transcripts. Developer will maintain all books and records pertaining to this Agreement
for a period of not less than five (5) years after all matters pertaining to this Agreement
(i.e., audit, disputes or litigation) are resolved in accordance with applicable federal or
state laws, regulations or policies, and when a period of affordability or recapture applies
to Developer's activities, for a period of not less than five (5) years after the affordability
period ends.
15.7 Termite Inspection Report. Developer shall deliver a termite report
pertaining to the Property to the City every fifth (5t') year beginning 2018.
16. OTHER NEGATIVE COVENANTS
While any obligation of Developer under the City Note or City Deed of Trust
remain outstanding, the following provisions shall apply, except to the extent that
Executive Director otherwise consents in writing:
16.1 Default on Senior Loan. Developer shall not default on any of the
Senior Loan documents, provided however, that Developer shall have such period as is
provided in the Senior Loan Documents during which to effectuate a cure.
16.2 Sale or Lease of Property. Unless and until Developer has received a
Certificate of Completion for the rehabilitation from City, Developer shall not sell, lease,
sublease or otherwise transfer all or any part of the Property or any interest therein
without the prior written consent of the Executive Director, which consent may be
withheld in the Executive Director's reasonable discretion. In connection with the
foregoing consent requirements, Developer acknowledges that City relied upon
Developer's particular expertise in entering into this Agreement and continues to rely on
such expertise to ensure the satisfactory completion of the rehabilitation.
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Notwithstanding anything to the contrary contained herein, a "transfer" shall not
include (i) a transfer of a General Partner's interest in Developer when made in
connection with the exercise by the Developer's limited partner (the "Limited Partner")
of its rights upon a default by a General Partner under the Developer's Partnership
Agreement (the "Partnership Agreement") or upon a General Partner's withdrawal in
violation of the Partnership Agreement, so long as the removal and substitution of the
defaulting General Partner is made within thirty (30) days of such default or, if such
removal and substitution cannot reasonably be completed within thirty (30) days, so long
as the Limited Partner commences to take action to remove and substitute the General
Partner with a reasonable period and thereafter diligently proceeds to complete such
substitution; (ii) any transfer of the Property to the Managing General Partner pursuant to
the right of first refusal or to the General Partners pursuant to the purchase option, as
provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner's
interest in connection with a default by the Limited Partner under and in accordance with
the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in
a limited partner of the Developer.
17. CERTIFICATE OF COMPLETION
Upon satisfactory completion of the rehabilitation and upon the request of
Developer, or at its own election, the City of Santa Ana shall issue a Certificate of
Completion. Such Certificate of Completion shall be, and shall so state, conclusive
determination of satisfactory completion of the rehabilitation.
If City declines to famish a Certificate of Completion after written request from
Developer, the Executive Director 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 Rehabilitation, 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 Executive Director in the amount of the fair value of the
uncompleted work.
A Certificate of Completion is not evidence of compliance with or satisfaction of
the Loan Documents or any obligation of Developer to any other party whatsoever,
including any holder of a mortgage or deed of trust. A Certificate of Completion is not
"notice of completion" referred to in Section 3093 of the California Civil Code.
18. INDEMNIFICATION
18.1 Nonliability. of City. Developer acknowledges and agrees that:
(a) The relationship between Developer and City is and
shall remain solely that of borrower and lender, City neither undertakes nor assumes any
responsibility to review, inspect, supervise, approve (other than for aesthetics) or inform
Developer of any matter in connection with the rehabilitation, including matters relating
to: (i) the performance of the rehabilitation work, (ii) architects, contractors,
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subcontractors and materialmen, or the workmanship of or materials used by any of them,
or (iii) the progress of the rehabilitation; 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 any Loan Document: (i)
the City is not a partner, joint venture, alter -ego, manager, controlling person or other
business associate or participant of any kind of Developer and City does not intend to
ever assume any such status; (ii) City's activities in connection with the Loan(s) shall not
be "outside the scope of the activities of a lender of money" within the meaning of
California Civil Code Section 3434, as modified or recodified from time to time, and City
does not intend to ever assume any responsibility to any person for the quality or safety
of the Property; and (iii) City shall not be deemed responsible for or a participant in any
acts, omissions or decisions of Developer;
(c) City shall not be directly or indirectly liable or responsible for any
loss or injury of any kind to any person or property resulting from any construction on, or
occupancy or use of, the Property, whether arising from: (i) any defect in any building,
grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of
Developer or any of Developer's agents, employees, independent contractors, licensees
or invitees; or (iii) any accident on the Property or any fire or other casualty or hazard
thereon; and
(d) By accepting or approving anything required to be performed or
given to City under the Loan Documents, including any certificate, financial statement,
survey, appraisal or insurance policy, City shall not be deemed to have warranted or
represented the sufficiency or legal effect of the same, and no such acceptance or
approval shall constitute a warranty or representation by City to anyone.
18.2 Indemnity. Developer shall defend (by counsel 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, attorneys' fees and court costs) arising from or relating to (i) this Agreement;
(ii) the making of the Loan(s); (iii) a claim, demand or cause of action that any person has
or asserts against Developer; (iv) any act or omission of Developer, any contractor,
subcontractor or material supplier, engineer, architect or other person with respect to the
Property; or (vi) the ownership, occupancy or use of the Property. Notwithstanding the
foregoing, Developer shall not be obligated to indemnify City with respect to the
consequences of any act of illegal conduct, gross negligence or willful misconduct of
City. Developer's obligations under this Section shall survive the cancellation of the
City/HOME Loan Note, release and reconveyance of the City ,Deed of Trust, issuance of
the Certificate of Completion, and termination of this Agreement.
18.2.1 Nothwithstanding the foregoing, neither Developer, nor any of its partners,
shall be personally liable for any indemnification obligation hereunder
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which would result as the repayment of principal and/or interest under the
Loan.
18.3 Reimbursement of City. Developer shall reimburse City immediately
upon written demand for all costs reasonably incurred by City (including the reasonable
fees and expenses of attorneys, accountants, appraisers and other consultants, whether the
same are independent contractors or employees of City) in connection with the
enforcement of the Loan Documents and all related matters including all claims,
demands, causes of action, liabilities, losses, commissions and other costs against which
City is indemnified under the Loan Documents. Such reimbursement obligations shall
bear interest from the date occurring twenty (20) days after City gives written demand to
Developer and shall be secured by the City Deed of Trust. Such reimbursement
obligations shall survive the cancellation of the Loan Note, release and reconveyance of
the City Deed of Trust, issuance of a Certificate of Completion, and termination of this
Agreement
19. INSURANCE, CASUALTY AND CONDEMNATION
19.1 Policies Required. While any obligation of Developer under the Loan
Documents remains outstanding, Developer shall maintain at Developer's sole expense,
with insurers either (i) admitted in California or (ii) are not admitted to California but
have an A.M. Best Rating of "A" or above and reasonably approved by the City, the
following policies of insurance in form and substance reasonably satisfactory to the City
Attorney:
(a) worker's compensation insurance and any other insurance
required by law in connection with the rehabilitation;
(b) prior to commencement and following completion of the
rehabilitation, fire and hazard "all risk" insurance covering 100% of the replacement cost
of the Improvements in the event of fire, lightning, windstorm, vandalism, malicious
mischief and all other risks normally covered by "all risk" coverage policies in the area
where the Property is located (including loss by flood if the Property is in an area
designated as subject to the danger of flood);
(c) upon commencement of the rehabilitation and at all
times prior to completion of the rehabilitation, 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 City from time to time, and in no event less than $1,000,000; and
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(f) any other insurance reasonably required by City.
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(s) in the policies required under subparagraphs (d) and (e)
with primary coverage. Certificates of insurance for the above policies (and/or original
policies, if required by City) shall be delivered within ten (10) days after demand
therefore, and prior to start of any rehabilitation 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 City Attorney.
19.2 City Attorney May Modify. The City Attorney
may modify the type and amounts of insurance required pursuant to this Section.
19.3 Claims and Proceedings. Developer shall give City
immediate notice of any material casualty to any portion of the Property, whether or not
covered by insurance, and of the initiation or threatened initiation of any proceeding for
the condemnation or other taking for public or quasi -public use of any portion of the
Property (collectively, "Condemnation"), and shall provide City with copies of all
documents which pertain to any such casualty or Condemnation. Developer shall take all
action reasonably required by City in connection therewith to protect the interests of
Developer and/or City, and City shall be entitled (without regard to the adequacy of its
security) to participate in any action, claim, adjustment or proceeding and to be
represented therein by counsel of its choice. Developer shall not settle, adjust, or
compromise any claim, action, adjustment or proceeding without prior written approval,
which approval shall not be unreasonably withheld or delayed.
19.4 Delivery of Proceeds to City. In the event that,
notwithstanding the "lender's loss payable endorsement" requirement set forth above, the
proceeds of any casualty insurance policy described herein are paid to Developer,
Developer shall, subject to any superior rights of the Senior Lender, deliver such
proceeds to the City immediately upon receipt.
19.5 Application of Casualty Insurance Proceeds. Any
proceeds collected (the "Proceeds") under any casualty insurance policy described in this
Agreement shall be disbursed to Developer as provided below, but only upon fulfillment
of each of the following conditions (the "Restoration Conditions") within ninety (90)
days (unless extended by mutual agreement of Developer and City) following the
occurrence of the damage for which the Proceeds are collected:
(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
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market value of the Property, within two years (or such longer 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 rehabilitation contract in form and content, and
with a contractor, reasonably satisfactory to City.
(b) To the extent that the Proceeds are insufficient to
accomplish the restoration required above, Developer shall deliver to City (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 requires to
evidence and secure Developer's obligation to use all amounts disbursed for the diligent
restoration of the Property.
(d) No Event of Default shall remain uncured.
19.6 Method of Disbursement and Undisbursed Funds.
Any Proceeds and Shortfall Funds to be disbursed to Developer shall be held by City and
disbursed in accordance with then customary disbursement procedures and related
provisions. Any amounts remaining undisbursed following completion of such restoration
shall be returned to Developer up to the amount of any Shortfall Funds deposited by
Developer, and any other amounts remaining shall either be paid to Developer or applied
by City against any obligations to City that are secured by a lien on the Property, as they
elect in their sole and absolute discretion.
19.7 Failure to Satisfy Conditions. In the event that Developer
fails to fulfill the Restoration Conditions within ninety (90) days (unless extended
pursuant to Section 19.5) following the date on which the damage occurs, 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 their sole and absolute discretion.
19.8 Restoration. Nothing in this Article 19 shall be
construed to excuse Developer from repairing and restoring all damage to the Property in
accordance with other Loan Document provisions, regardless of whether insurance
proceeds are available or sufficient.
19.9 Condemnation; Treatment of Compensation. Subject to any
superior rights of Senior Lender, Developer hereby assigns to the City, as security for all
obligations to City secured by a lien on the Property, all amounts payable to Developer in
connection with any Condemnation, and any proceeds of any related settlement
(collectively, "Compensation"). Subject to any superior rights of Senior Lender,
Developer shall deliver such remaining Compensation to City immediately upon receipt.
If the taking results in a loss of the Property to an extent that, in the reasonable opinion of
City, renders or is likely to render the Property not economically viable or if, in City's
reasonable judgment Developer's security is otherwise impaired, City may apply the
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Compensation received due to judgment or settlement in connection with any
condemnation or other taking to reduce the unpaid obligations secured in such order as
City may determine, and without any adjustment in the amount or due dates of payments
due under the Note. If so applied, any award in excess of the unpaid balance of the Note
and other sums due to City shall be paid to Developer or Developer's assignee. City shall
have no obligation to take any action in connection with any actual or threatened
condemnation or other proceeding.
19.9.1 Notwithstanding the foregoing, as long as the value of
City's liens are not impaired, any condemnation proceeds may be used by the Borrower
for repair and/or restoration of the Project.
19.10 Waiver of Subrogation. Developer hereby waives all rights to
recover against the City (or any officer, employee, agent or representative of the City) for
any loss incurred by Developer from any cause insured against or required by any Loan
Document, to be insured against; provided, however, that this waiver of subrogation shall
not be effective with respect to any insurance policy if the coverage thereunder would be
materially reduced or impaired as a result. Developer shall use its best efforts to obtain
only policies which permit the foregoing waiver of subrogation.
20. DEFAULTS AND REMEDIES
20.1 Events of Default. The occurrence of any of the following, whatever the
reason therefore, shall constitute an Event of Default by Developer:
(a) Developer fails to make any payment of principal or
interest under the City/HOME Loan Note when due, and such failure is not cured within
fifteen (15) Business Days after Developer's receipt of written notice that such payment
was not received when due;
(b) Developer fails to perform any other obligation for the
payment of money under any Loan Document, and such failure is not cured within fifteen
(15) Business Days after Developer's receipt of written notice that such obligation was
not performed when due;
(c) Developer fails to perform any obligation (other than the
obligations described in subparagraphs (a) and (b) above) under any Loan Document, and
such failure is not cured within thirty (3 0) 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) days after receipt of such notice)
commences to cure, and thereafter diligently (in any event within ninety (90) days after
receipt of such notice) prosecutes such cure to completion;
(d) Any representation or warranty in any Loan Document proves to
have been incorrect in any material respect when made;
(e) The Property is materially damaged or destroyed by fire or other
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casualty unless Developer fulfills the Restoration Conditions set forth in the insurance
provisions of this Agreement within ninety (90) days (unless extended pursuant to
Section 19.5) and thereafter diligently restores the Property in accordance with this
Agreement;
(f) Work on the rehabilitation ceases for thirty (3 0)
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), provided that the same do not, in the aggregate and in the City's reasonable
judgment, threaten to delay the completion of the rehabilitation beyond the required
completion date set forth in this Agreement;
(g) Developer is enjoined or otherwise prohibited by any
Governmental Authority from constructing and/or occupying the improvements and such
injunction or prohibition continues unstayed for sixty (60) days or more for any reason;
(h) Developer is dissolved, liquidated or terminated, or all or
substantially all of the assets of Developer are sold or otherwise transferred without the
Executive Director's prior written consent;
(i) Developer is the subject of an order for relief by a bankruptcy
court, or is unable or admits its inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors; or Developer applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or any part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without the
application or consent of Developer and the appointment continues undischarged or
unstayed for ninety (90) days; or Developer institutes or consents to any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship,
conservatorship, liquidation, rehabilitation or similar proceeding relating to it or any part
of its property; or any similar proceeding is instituted without the consent of Developer
and continues undismissed or unstayed for ninety (90) days; or any judgment, writ,
warrant of attachment or execution, or similar process is issued or levied against any
property of Developer and is not released, vacated or fully bonded within ninety (90)
days after its issue or levy; or
0) any of the Senior Loan documents is revoked or terminated, in
whole or in part and for any reason (except due to repayment of such loans), without the
Executive Director's prior written consent, or (ii) Developer defaults or otherwise fails to
perform any of its duties or obligations under or in connection with any of the Senior
Loan documents, subject to all applicable notice and cure periods, or (iii) any of the
Senior Loan documents is amended, supplemented or otherwise modified without City's
prior written consent, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary contained herein, City hereby agrees that any
cure of any default made or tendered by Developer's Limited Partner shall be deemed to
be a cure by Developer and shall be accepted or rejected on the same basis as if made or
tendered by Developer.
In
20.2 Remedies Upon Default. Upon the occurrence of any Event of Default,
City may, at its option and in its absolute discretion, do any or all of the following:
(a) By written notice to Developer, declare the principal of all
amounts owing under the Loan Documents, together with all accrued interest and other
amounts owing in connection therewith, to be immediately due and payable, regardless of
any other specified due date; provided that any Event of Default described in Section
20.1 shall automatically, without notice or other action on City's part, cause all such
amounts to be immediately due and payable;
(b) In its own right or by a court-appointed receiver, take
possession of the Property, enter into contracts for and otherwise proceed with the
completion of the rehabilitation by expenditure of its own funds;
(c) Exercise any of its rights under the Loan Documents and any rights
provided by law, including, without limitation, the right to seek specific performance and
the right to foreclose on any security and exercise any other rights with respect to any
security, all in such order and manner as City elects in its sole and absolute discretion;
and,
(d) Suspend or terminate the award of HOME funds if Developer fails
to comply with any term of that award.
20.3 Cumulative Remedies: No Waiver. City's rights and remedies under the
Loan Documents are cumulative and in addition to all rights and remedies provided by
law. The exercise by City of any right or remedy shall not constitute a cure or waiver of
any default, nor invalidate any notice of default or any act done pursuant to any such
notice, nor prejudice the City in the exercise of any other right or remedy. No waiver of
any default shall be implied from any omission by City to take action on account of such
default if such default persists or is repeated. No waiver of any default shall affect any
default other than the default expressly waived, and any such waiver shall be operative
only for the time and to the extent stated. No waiver of any provision of any Loan
Document shall be construed as a waiver of any subsequent breach of the same provision.
City's consent to or approval of any act by Developer requiring further consent or
approval shall not be deemed to waive or render unnecessary City's consent to or
approval of any subsequent act. The City's acceptance of the late performance of any
obligation shall not constitute a waiver by City of the right to require prompt performance
of all further obligations; City's acceptance of any performance following the sending or
filing of any notice of default shall not constitute a waiver of either party's right to
proceed with the exercise of its remedies for any unfulfilled obligations; and City's
acceptance of any partial performance shall not constitute a waiver by City of any rights.
21. MISCELLANEOUS
21.1 Obligations Unconditional and Independent. Notwithstanding the
existence at any time of any obligation or liability of City to Developer, or any other
claim by developer against City, in connection with the Loan or otherwise, Developer
hereby waives any right it might otherwise have (a) to offset any such obligation, liability
39
or claim against Developer's obligations under the Loan Documents, or (b) to claim that
the existence of any such outstanding obligation, liability or claim excuses the
nonperformance by Developer of any of its obligations under the Loan Documents.
21.2 Notices. All notices, demands, approvals and other communications
provided for in the Loan Documents shall be in writing and be delivered to the
appropriate party by personal service or U.S. mail at its address as follows:
If to Developer: Vice President, Asset Management
17701 Cowan Ave, Suite 200
Irvine, CA 92614
With a copy to: Patrick McCalla
Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626-1931
If to City: City of Santa Ana
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P.O. 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.
21.3 Survival of Representations and Warranties. All representations and
warranties in the Loan Documents shall survive the making of the Loan described herein
and have been or will be relied on by City notwithstanding any investigation made by
either party.
21.4 No Third Parties Benefited. This Agreement is made for the purpose of
setting forth rights and obligations of Developer and the City, and no other person shall
have any rights hereunder or by reason hereof.
21.5 Binding Effect, Assignment of Obligations. This Agreement shall bind,
and shall inure to the benefit of, Developer and City and their respective successors and
assigns. Other than as expressly provided to the contrary in this Agreement, Developer
shall not assign any of its rights or obligations under any Loan Document without the
prior written consent of City, which consent may be withheld in City's sole and absolute
discretion. Any such assignment without such consent shall, at City's option, be void.
21.6 Prior Agreements; Amendments; Consents. This Agreement (together
with the other Loan Documents) contains the entire agreement between the City and
Developer with respect to the Loan and the Property, and all prior negotiations,
understandings and agreements are superseded by this Agreement and such other Loan
Documents. No modification of any Loan Document (including waivers of rights and
conditions) shall be effective unless in writing and signed by the party against whom
enforcement of such modification is sought, and then only in the specific instance and for
the specific purpose given.
21.7 Governing Law. All of the Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of California and
Federal law, whichever is more stringent. Developer irrevocably and unconditionally
submits to the jurisdiction of the Superior Court of the State of California for the County
of Orange or the United States District Court of the Central District of California, as City
may deem appropriate, in connection with any legal action or proceeding arising out of or
relating to this Agreement or the Loan Documents. Assurning proper service of process,
Developer also waives any objection regarding personal or in rem jurisdiction or venue.
21.8 Severability of Provisions. No provision of any Loan Document that is
held to be unenforceable or invalid shall affect the remaining provisions, and to this end
all provisions of the Loan Documents are hereby declared to be severable.
21.9 Headings. Article and section headings are included in the Loan
Documents for convenience of reference only and shall not be used in construing the
Loan Documents.
21.10 Conflicts. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, this Agreement, unless otherwise
expressly provided, shall prevail; provided however that, with respect to any matter
addressed in both such documents, the fact that one document provides for greater, lesser
or different rights or obligations than the other shall not be deemed a conflict unless the
applicable provisions are inconsistent and could not be simultaneously enforced or
performed.
21.11 Time of the Essence. Time is of the essence under this Agreement and in
the performance of every term, covenant, and obligation contained herein.
21.12 Conflict of Interest. No member, official or employee of the City shall
have any direct or indirect interest in this Agreement, nor participate in any decision
relating to the Agreement which is prohibited by law.
21.13 Warranty Against Payment of Consideration. Developer warrants that
it has not paid or given, and will not pay or give, any third person any money or other
consideration for obtaining this Agreement.
41
21.14 Nonliability of City Officials and Employees. No member, official or
employee of City shall be personally liable to Developer, or any successor in interest, in
the event of any default or breach by City or for any amount which may become due to
Developer or successor, or on any obligation under the terms of this Agreement.
21.15 Plans and Data. Where Developer does not proceed with the
work and rehabilitation of the Property, and when this Agreement is terminated with
respect thereto for any reason, Developer shall deliver to City any and all plans and data
concerning the Property, and City or any person or entity designated by City shall have
the right to use such plans and data without compensation to Developer. Such right of
City shall be subject to any right of the preparer of the plans to their use.
21.16 Authority to Enter Agreement. Each undersigned represents and warrants
that its signature hereinbelow has the power, authority and right to bind their respective
parties to each of the terms of this Agreement, and shall indemnify the City fully, including
reasonable costs and attorney's fees, for any injuries or damages to City in the event that
such authority or power is not, in fact, held by the signatory or is withdrawn.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date set forth at the beginning of this Agreement.
WAKEHAM-GRANT APARTMENTS,
LP, a California Limited Partnership
By: JHC-Cornerstone LLC, a California
Limited liability company, Managing General Partner
By: JAMBOREE HOUSING
CORPORATION, a California non-profit
Public benefit corporation, Its Managing Member
By:
Laura Archuleta, President
Dated: qt 1/71 a
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 9.27.17
before me, R.L. deCordova-Brittain, Notary Public
(insert name and title of the officer)
personally appeared Laura Archuleta
who proved to me on the basis of satisfactory evidence to be the personN whose names) Wasp,
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
Ris/her/the.ir 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(*.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.
R. L. OECORDOVA•6RITTAIN
WITNESS my hand and official seal =rip
y Notary Pub
"90 CalCO#Jiorma
\I Comm4aion Ar2t77359
M Comm
Ex Irp 040 26, 2020
Cleric of the Council
APPROVED AS TO FORM
Sonia R. Carvalho
City ,,,ttornex
CITY OF SANTA ANA
Attorney Interim Cityz Manager
RECOMMENDED FOR APPROVAL:
Robert M. Zar Sch ied
Acting Ui ecutive r
Community Development Agency
44
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 September 27, 2017 before me, Rosa A. Flores, Notary Public
(insert name and title of the officer)
personally appeared Robert C. Cortez who proved to me on the basis of satisfactory evidence to
be the personW whose name(o is /ere subscribed to the within instrument and acknowledged to me
that he/ahe/the>y executed the same in his/1herhheir authorized capacity(ies-r and that by histherAheir-
signature* on the instrument the person,(O, or the entity upon behalf of which the persortwacted,
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.Rosa A. - - -
Commission 8 2057129
Yhh-s e.
Z p, Notary Public -California i
z ' Orange CounPy >
M Comm. Expires Feb 7, 201
l -
Signature k'09 C/l (Seal)
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 September 28, 2017 before me, Rosa A. Flores Notary Public
(insert name and title of the officer)
personally appeared Cynthia J. Kurtz who proved to me on the basis of satisfactory evidence to
be the person.(-a'jwhose name(.s') isc/eFe subscribed to the within instrument and acknowledged to me
that he/she%they executed the same in his/her/tlir authorized capacity(ies , and that by-his/her/theeir
signature(a) on the instrument the personko, or the entity upon behalf of which the person,* acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal. ROSA A. FLORES
Commission # 2057129
Notary Public - California a
Orange County
�^^f� M Camm. Ex Tres Feb 7, 2018
Signature lh, (W (Seal)
A.
B.
C.
D.
E.
F.
G.
H.
I.
EXHIBITS
Legal Description
Scope of Work
Project Budget
Schedule of Performance
HOME Loan Deed of Trust
HOME Loan Promissory Note
Affordability Restrictions on Transfer of Property
Sample Affirmative Marketing Program Guidelines
Sample Form of Residual Receipts Report
Rehab Standards
45
Exhibit A —Property
Description
Exhibit A
PROPERTY DESCRIPTION
OWNER: Wakeham — Grant Apartments LP
PROJECT ADDRESS: 810 S. Minnie Street
Legal Description:
LOTS 1 AND 2, INCLUSIVE OF TRACT NO.3547, IN THE CITY OF SANTA ANA,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED
IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
Exhibit B —Scope of
�V�
Exhibit B
SCOPE OF WORK
OWNER: Wakeham — Grant Apartments LP
PROJECT ADDRESS: 810 S. Minnie Street
The rehabilitation scope is intended to include the following:
ROOF
Reroof of 810 S. Minnie Street —this will include removal of the existing built up roof membrane
and sheathing and replacement with new plywood and a TPO cool roof per the provided
specifications. Included in this will be the insulation of the joist bays once they are exposed
following the removal of the existing plywood sheathing.
PLUMBLING
Repipe of existing waste lines from exterior of building envelope to point of connection in street.
This will include all 4 waste stacks for 810 S. Minnie Street and installation of cleanouts.
DECKING
Repair of existing upstairs deck — there is an area where the upstairs deck is softening due to
water penetration and some expected dry rot. Any structural damage to be repaired and new Pli-
Dek or equivalent waterproofing system to be installed.
ADA IMPROVEMENTS
ADA improvements — to include the installation of one ADA parking stall and the necessary
signage and striping as well as repair of the existing ADA ramp in front of the management office
to bring into compliance.
ADDITIONAL ITEMS
HOME inspection items — pursuant to the most recent City inspection report (dated 9/19/17),
resolve all instances of inoperable GFCI outlets and inoperable smoke alarms.
Exhibit C —Project
W=!
Exhibit C
PROJECT BUDGET
OWNER: Wakeham — Grant Apartments LP
PROJECT ADDRESS: 810 S. Minnie Street
DOW
Description
Costs
Comments
1
GENERAL CONDITIONS/REQUIREMENTS
$
-
See below
2
SITEWORI{
Demolition (All)
$
4,500
Saw cut, sidewalk removal
& sewer line replacement
AC paving
$
6,000
2 accessible parking stall
overlay & sewer patch
Sidewalks, Concrete
$
18,000
New ADA entry walk/ramp,
501F of public sidewalk &
sewer patch swale
3
METALS
Railings
Incl. in concrete
4
CARPENTRY
Framing
$
5,500
Sheathing incl. - new
pressure blkg with vent
screeds
5
THERMAL & MOISTURE PROTECTION
Waterproofing
$
17,164
Pli-deck patch work
Insulation
$
14,245
R-21 attic insulation
Roof
$
48,840
8,140 SF TPO re -roof
6
FINISHES
Exterior Painting
$
2,500
Accessible parking & blkg.
7
SPECIALTIES
Signage
$
1,500
Parking stall signage
Gutters & Downspouts
$
2,800
8
MECHANICAL
Plumbing
$
17,000
2601F new 4" sewer line
Subtotal
$
138,049
Contingency* -15%
$
20,707
General Conditions - 7%
$
9,663
Subtotal Construction Costs
$
147,712
Contractor Fee - 7%
$
10,340
General Liability/PLPD - 2%
$
2,954
Total Lump Sum Costs
$
161,006
Sources of Funds
Developer Equity — 42% $ 67,974
HOME CHDO Funds- 58% $ 93,032
Total $ 161,006
*Final Contingency Amount will be distributed proportionately between sources of funds
Exhibit D —Schedule
Exhibit D
SCHEDULE OF PERFORMANCE
OWNER: Wakeham — Grant Apartments LP
PROJECT ADDRESS: 810 S. Minnie Street
Month
Milestone
Execution of CHDO Loan Agreement
Review / approval of scope, budget, and General
Contractor contract by City
Execution of General Contractor contract
Pull building permits
Mobilization onsite / start of construction
6 Completion of construction work
Final permit signoffs
8 Termination of General Contractor Lien Period
Exhibit E —HOME
Loan Deed of Trust
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 DEED OF TRUST
AND ASSIGNMENT OF RENTS
(8 10 S. Minnie Street, Santa Ana)
THIS CITY DEED OF TRUST AND ASSIGNMENT OF RENTS (the "City Deed
of Trust") made this 27`x' day of September, 2017 by Wakeham — Grant Apartments LP, a
California limited partnership (the "Trustor"), AMERINAT., a Minnesota corporation (the
"Trustee"), and the City of Santa Ana, a charter city and municipal corporation (the
'Beneficiary").
Trustor, in consideration of the promises herein recited and the trust herein created,
irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the
property located in the City of Santa Ana, County of Orange, State of California, described
in the attached Exhibit A and more commonly known as 810 S. Minnie Street, Santa Ana
(the 'Property");
TOGETHER with all the improvements now or hereafter erected on the Property,
and all easements, rights, appurtenances and all fixtures now or hereafter attached to the
Property, all of which, including replacements and additions thereto, shall be deemed to be
and remain a part of the Property covered by this City Deed of Trust;
TOGETHER with the right, power and authority during the continuance of these
Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Trustor the
right, prior to any default by Trustor in payment of the indebtedness secured by this City
Deed of Trust or in the performance of any agreement under this City Deed of Trust, to
collect and retain these rents, issues and profits as they become due and payable; and,
TOGETHER with all articles of personal property or fixtures now or hereafter
attached to or used in and about the building or buildings now erected, or hereafter to be
erected, on the Property which are necessary to the complete and comfortable use and
occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one
herein described and referred to, and all renewals or replacements thereof or articles in
substitution therefor, whether or not the same are, or shall be attached to said building or
buildings in any manner; and all of the foregoing, together with the Property, is herein
referred to as the "Security';
To have and to hold the Security together with acquittances to the Trustee, its
successors and assigns forever;
TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by a
promissory note to the Beneficiary executed by Trustor of even date herewith in the
principal amount of ninety-three thousand, thirty-two dollars ($93,032) (the "City Loan
Note"); (b) the performance of the covenants and agreements of Borrower contained in a
certain Loan Agreement as hereinafter defined; and (c) the payment of all other sums, with
interest thereon, advanced in accordance herewith to protect the security of this City Deed of
Trust; and the performance of the covenants and agreements of Trustor contained herein.
TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS:
1. The Loan Agreement. This City Deed of Trust is executed and delivered,
along with the City Loan Note and the Loan Agreement, to benefit the Property. A copy of
said Loan Agreement is on file as a public record with the Beneficiary and is incorporated
herein by reference (the "Agreement"). Trustor acknowledges that but for the execution of
this City Deed of Trust, the Beneficiary would not enter into the Agreement or City Loan
Note secured by this City Deed of Trust.
2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and
has the right to grant and convey the Security; that other than this City Deed of Trust, the
Security is not encumbered except for obligations secured by deeds of bust, or any other
security agreement, to secure financing or refinancing for the purchase and rehabilitation of
the Property.
3. Repayment of the Loan. Trustor will promptly repay, when due, the
principal and interest, as required by the City Loan Note secured by this City Deed of Trust.
4. Subordination. This obligation secured by this City Deed of Trust shall be
subordinated to the Senior Loan and to the City Deed of Trust and Note.
5. Prior Mortgages and Deeds of Trust Charges: Liens. Trustor shall perform
all of Trustor's obligations under any mortgage, deed of trust or other security agreement
with a lien which has priority over this Instrument, including Trustor's covenants to make
payments when due (subject to an applicable notice and cure provisions). Trustor will pay
all taxes, assessments and other charges, fines and impositions attributable to the Security
which may attain a priority over this Deed of Trust, by Trustor making any payment, when
due, directly to the payee thereof. Trustor will promptly furnish to the Beneficiary all
notices of amounts due under this paragraph, and in the event Trustor makes payment
directly, Trustor will promptly discharge any lien which has priority over this Deed of Trust;
provided that Trustor will not be required to discharge the lien of the Deed of Trust securing
any senior lender or any other lien described in this paragraph so long as Trustor will agree
in writing to the payment of the obligation secured by such lien in a manner acceptable to
the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such
lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture
of the Security or any part thereof.
6. Hazard Insurance. Trustor will keep the Security insured by such insurance
policies in such amounts and for such periods as called for in the Agreement. All insurance
policies and renewals thereof will include a standard mortgagee clause with standard
lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their
interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall
have the right to hold, or cause its designated agent to hold, the policies and renewals
thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the
original insurance policies or certificates of insurance, all renewal notices and all receipts of
paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier
and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may
make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days
advance notice of cancellation of any insurance policies required under this Section.
Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds,
subject to the rights of any senior lender, will be applied to restoration or repair of the
Security damaged, provided such restoration or repair is economically feasible and the
security of this City Deed of Trust is not thereby impaired. If such restoration or repair is
not economically feasible or if the security of this City Deed of Trust would be impaired,
again, subject to the rights of any senior lender, the insurance proceeds will be used to repay
the loan secured by this Deed of Trust, with the excess, if any, paid to Trustor. If the
Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its
designated agent within 30 days from the date notice is mailed by either of them to Trustor
that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its
designated agent, is authorized to collect and apply the insurance proceeds at the
Beneficiary's option either to restoration or repair of the Security or to repay the loan.
If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in
and to any insurance policy and in and to the proceeds thereof resulting from damage to the
Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the stuns
secured by this City Deed of Trust immediately prior to such sale or acquisition subject to
the rights of any senior lender.
7. Preservation and Maintenance of Security. Trustor will keep the Security in
good repair and will not commit waste or permit impairment or deterioration of the Security.
8. Protection of the Beneficiary's Security. If Trustor fails to perform the
covenants and agreements contained in this City Deed of Trust or if any action or
proceeding is commenced which materially affects the Beneficiary's interest in the Security,
including, but not limited to, default under the City Deed of Trust securing any senior
lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon
notice to Trustor, may make such appearances, disburse such stuns and take such action as it
determines necessary to protect the Beneficiary's interest, including, but not limited to,
disbursement of reasonable attorneys' fees and entry upon the Security to make repairs.
Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest
thereon, will become an indebtedness of Trustor secured by this City Deed of Trust. Unless
Trustor and the Beneficiary agree to other terms of payment, such amount will be payable
upon notice from the Beneficiary to Trustor requesting payment thereof, and will bear
interest from the date of disbursement at the rate payable from time to time on outstanding
principal under the City Loan Note unless payment of interest at such rate would be contrary
to applicable law, in which event such amounts will bear interest at the highest rate
permissible under applicable law. Nothing contained in this paragraph will require the
Beneficiary to insure any expense or take any action hereunder.
9. Inspection. The Beneficiary may make, or cause to be made, reasonable
entries upon and inspections of the Security during normal business hours; provided that the
Beneficiary will give Trustor reasonable notice of inspection.
10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the
Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any
such right or remedy. The procurement of insurance or the payment of taxes or other liens
or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the
maturity of the indebtedness secured by this City Deed of Trust.
11. Remedies Cumulative. All remedies provided in this City Deed of Trust are
distinct and cumulative to any other right or remedy under this City Deed of Trust or any
other document, or afforded by law or equity, and may be exercised concurrently,
independently or successively.
12. Successors and Assigns Bound. The covenants and agreements herein
contained shall bind, and the rights hereunder shall inure to, the respective successors and
assigns of the Beneficiary and Trustor subject to the provisions of this City Deed of Trust.
13. Joint and Several Liabitity. All covenants and agreements of Trustor shall be
joint and several.
14. Notice. Except for any notice required under applicable law to be given in
another manner, (a) any notice to Trustor provided for in this City Deed of Trust will be
given by certified mail, return receipt requested, addressed to Trustor at 17701 Cowan Ave
#200, Irvine, CA 92614 (b) any notice to the Beneficiary will be given by certified mail,
return receipt requested, to the Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa
Ana, California 92702, Attention: Housing Division Manager, or at such other address as
the Beneficiary may designate by notice to Trustor as provided above, and (c) to Trustee at
8121 E. Florence Avenue, Downey, California 90240. Notice shall be effective as of the
date received as shown on the return receipt.
15. Governing Law. This City Deed of Trust shall be governed by the laws of
the State of California.
16. Severability. In the event that any provision or clause of this City Deed of
Trust or the City Loan Note conflicts with applicable law, such conflict will not affect other
provisions of this City Deed of Trust or the City Loan Note which can be given effect
without the conflicting provision, and to this end the provisions of the City Deed of Trust
and the City Loan Note are declared to be severable.
17. Captions. The captions and headings in this City Deed of Trust are for
convenience only and are not to be used to interpret or define the provisions hereof.
18. Default in Foreclosure: Remedies. Upon Trustor's breach of any covenant or
agreement of Trustor in this City Deed of Trust or the City Loan Note secured by this City
Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums
secured by this City Deed of Trust, the Beneficiary may declare all sums secured by this
City Deed of Trust immediately due and payable by delivering to Trustor notice thereof
specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less
than 30 days from the date the notice is received by Trustor as shown on the return receipt,
by which such breach is to be cured provided, however, that if such default is not reasonable
susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the
defect so long as Trustor is diligently prosecuting the cure to completion; and (4) that failure
to cure such breach on or before the date specified in the notice may result in acceleration of
the sums secured by this City Deed of Trust and sale of the Security. The notice will also
inform Trustor of Trustor's right to reinstate after acceleration and the right to bring a court
action to assert the non-existence of default or any other defense of Trustor to acceleration
and sale.
Notwithstanding anything to the contrary contained herein, a "default" shall not
include (i) a transfer of a general partner's interest in Trustor when made in connection
with the exercise by the Trustor's limited partner (the "Limited Partner") of its rights
upon a default by a general partner under the Trustor's Agreement of Limited Partnership
agreement (the "Partnership Agreement") or upon a general partner's withdrawal in
violation of the Partnership Agreement, so long as the removal and substitution of the
defaulting general partner is made within thirty (30) days of such default or, if such
removal and substitution cannot reasonably be completed within thirty (30) days, so long
as the Limited Partner commences to take action to remove and substitute the general
partner with a reasonable period and thereafter diligently proceeds to complete such
substitution; (ii) any transfer of the Property to the managing general partner of Trustor
pursuant to the right of first refusal or to the general partners of Trustor pursuant to the
purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the
Limited Partner's interest in connection with a default by the Limited Partner under and
in accordance with the Partnership Agreement; and (iv) any sale, transfer or other
disposition of an interest in a limited partner of the Trustor, provided that after any such
sale, transfer or other disposition an affiliate of Trustor remains the managing member or
general partner of such limited partner.
If the breach is not cured on or before the date specified in the notice or such longer
period as provided above or in the City Loan Note or the Agreement, the Beneficiary, at the
Beneficiary's option, may: (a) declare all of the sums secured by this City Deed of Trust to
be immediately due and payable without further demand and may invoke the power of sale
and any other remedies permitted by California law; (b) either in person or by agent, with or
without bringing any action or proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of its security, enter upon the Security and take possession
thereof (or any part thereof) and of any of the Security, in its own name or in the name of the
Trustee, and do any acts which it deems necessary or desirable to preserve the value or
marketability of the Property, or part thereof or interest therein, increase the income
therefrom or protect the security thereof. The entering upon and taking possession of the
Security shall not cure or waive any breach hereunder or invalidate any act done in response
to such breach and, notwithstanding the continuance in possession of the Security, the
Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by
law upon occurrence of any uncured breach, including the right to exercise the power of
sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a
receiver, or specifically enforce any of the covenants hereof; (d) deliver to the Trustee a
written declaration of default and demand for sale, pursuant to the provisions for notice of
sale found at California Civil Code Sections 2924, et M., as amended from time to time; or
(e) exercise all other rights and remedies provided herein, in the instruments by which
Trustor acquires title to any Security, or in any other document or agreement now or
hereafter evidencing, creating or securing all or any portion of the obligations secured
hereby, or provided by law.
Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any
cure of any default made or tendered by Trustor's limited partner shall be deemed to be a
cure by Trustor and shall be accepted or rejected on the same basis as if made or tendered by
Trustor.
The Beneficiary shall be entitled to collect all reasonable costs and expenses
incurred in pursuing the remedies provided in this paragraph, including, but not limited to,
reasonable attorneys' fees.
19. Trustor's Right to Reinstate. Notwithstanding the Beneficiary's acceleration
of the sums secured by this City Deed of Trust, Trustor will have the right to have any
proceedings begun by the Beneficiary to enforce this City Deed of Trust discontinued at any
time prior to 5 days before sale of the Security pursuant to the power of sale contained in
this City Deed of Trust or at any time prior to entry of ajudgment enforcing this City Deed
of Trust if: (a) Trustor pays the Beneficiary all sums which would be then due under this
City Deed of Trust and no acceleration under the City Loan Note has occurred; (b) Trustor
cures all breaches of any other covenants or agreements of Trustor contained in this Deed of
Trust and the Affordability Restrictions on Transfer of Property; (c) Trustor pays all
reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants
and agreements of Trustor contained in this City Deed of Trust and the Affordability
Restrictions on transfer of property, and in enforcing the Beneficiary's and the Trustee's
remedies, including, but not limited to, reasonable attorneys' fees; and (d) Trustor takes such
action as the Beneficiary may reasonably require to assure that the lien of this City Deed of
Trust, the Beneficiary's interest in the Security and Trustor's obligation to pay the sums
secured by this City Deed of Trust shall continue unimpaired. Upon such payment and cure
by Trustor, this City Deed of Trust and the obligations secured hereby will remain in full
force and effect as if no acceleration had occurred.
20. Acceptance by Trustee Trustee accepts this Trust when this City Deed of
Trust, duly executed and acknowledged, is made a public record as provided by law.
Trustee is not obligated to notify any party to this City Deed of Trust of pending sale under
any other deed of trust or any action or proceeding in which Trustor, Beneficiary, or Trustee
shall be a party unless brought by Trustee.
21. Reconvevance. Upon payment or forgiveness of all sums secured by this
City Deed of Trust, the Beneficiary will request the Trustee to reconvey the Security and
will surrender this City Deed of Trust and the City Loan Note to the Trustee. The Trustee
will reconvey the Security without warranty and without charge to the person or persons
legally entitled thereto. Such person or persons will pay all costs of recordation, if any.
22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from
time to time remove the Trustee and appoint a successor trustee to any Trustee appointed
hereunder. The successor trustee will succeed to all the title, power and duties conferred
upon the Trustee herein and by applicable law.
23. Request for Notice. Trustor requests that copies of the notice of default and
notice of sale be sent to Trustee at the address set forth in Section 14 above.
24. Nonrecourse Liability, Neither Trustor nor any partner of Trustor shall
have any personal liability under the Loan Agreement, City Loan Note, and this City Deed
of Trust and any judgment, decree or order for payment of money obtained in any action to
enforce the obligation of Trustor to repay the loan evidenced by such documents shall be
enforceable against Trustor only to the extent of Trustor's interest in the Property.
IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date first
written above.
"TRUSTOR"
Wakeham — Grant Apartments LP, a California limited partnership
MANAGING GENERAL PARTNER
By: JHC-Cornerstone LLC
a California Limited liability company
MANAGING MEMBER
JAMBOREE HOUSING CORPORATION
a California non-profit Public benefit corporation
By: Wax,�L�
Laura Archuleta„ President
Dated: g 1 V 1 C 0
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 9.27.17 before me, R.L. deCordova-Brittain, Notary Public
(insert name and title of the officer)
personally appeared Laura Archuleta
who proved to me on the basis of satisfactory evidence to be the person(s).whose name(* is/afe
subscribed to the within instrument and acknowledged to me that'h@/she/they executed the same in
�Fris/her/their authorized capacity, and that by Risher/Meif signatureNs ,on the instrument the
person(&)., or the entity upon behalf of which the person(`&). acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
R. 1. OECORDOVA-BA ItTAIN
WITNESS my hand nd official seal. a Notary public- California
1 z • : Orange County
commisslonA 2177359
M Comm. Expires Dec 25.2020+
Exhibit F —HOME
Loan Note
CITY LOAN NOTE
SECURED BY SUBORDINATED DEED OF TRUST
TO THE CITY OF SANTA ANA, CALIFORNIA
$93,032 September 27, 2017
Santa Ana, California
1. Principal Amount of Loan
For value received, and Wakeham — Grant Apartments, LP, a California limited
partnership (`Borrower") promises to pay to the order of THE CITY OF SANTA ANA ("City"),
at 20 Civic Center Plaza, 6th Floor, Santa Ana, California 92701, or at such other place as the
City may from time to time designate in writing, or to the assignee of the City, the principal sum
of ninety-three thousand, thirty-two dollars ($93,032) or so much thereof as shall be disbursed
hereunder, with three percent interest (3%) commencing upon filing of Notice of Completion.
City and Borrower have heretofore entered into that certain Loan Agreement dated
concurrently herewith (the "Loan Agreement"), pertaining to the rehabilitation of certain real
property described in the Loan Agreement as the "Property," commonly known as the Wakeham
— Grant Apartments, LP, and the operation of the Property as affordable housing for Extremely -
Low and Very -Low Income households. This Note is made pursuant to, entitled to the benefits of
and referred to as the City Loan Note in the Loan Agreement; that certain "Affordability
Restrictions on Transfer of Property" between Borrower and City, dated on or about the date
hereof; and that certain Subordinated City Deed of Trust and Assignment of Rents between
Borrower and City, dated on or about the date hereof (the "City Deed of Trust"). This Note, the
Loan Agreement, the Affordability Restrictions on Transfer of Property, and the City Deed of
Trust are sometimes collectively referred to herein as the "Loan Documents." The Loan
Documents and the rights and responsibilities of the Borrower inure to the benefit of the City of
Santa Ana. Any capitalized term which is not otherwise defined herein shall have the meaning
ascribed to such term in the Loan Agreement.
2. Definitions.
For the purpose of calculating the payments to be made by Borrower to City pursuant to
this Note, the following terms shall have the following respective meanings:
"City Loan" shall mean the loan evidenced by this Note.
"City's Percentage" with reference to the Residual Receipts, shall mean fifty percent
(50%) of the City's share of the total Residual Receipts from the Property as further described in
Section 5 hereof...
"Calendar Year" means each consecutive twelve (12) month period from January 1 to
December 31.
"Closing Costs" shall mean:
(i) In the case of a Sale, reasonable brokerage commissions payable to a broker as a
result of the Sale, which shall not in any event exceed the customary amount charged -for similar
transactions in the immediate market place, costs of title insurance premiums, documentary
stamp taxes, escrow fees, recording charges, loan repayment charges and other costs reasonably
incurred with respect to the Property, in each case actually paid by Borrower as a condition of
the Sale.
(ii) In the case of a Refinancing, the reasonable and necessary costs of
consummating such Refinancing, including, without limitation, loan fees, loan repayment
charges, costs of title insurance premiums, escrow fees, recording fees and attorneys' fees.
"Gross Revenues" shall mean all revenues and receipts of every kind actually received
by Borrower from operating the Property, and all parts thereof, including, but not limited to,
income from both cash and credit transactions, rental from leased and/or subleased spaces and
parking fees and charges (but not including security deposits and other tenant deposits, except to
the extent such deposits are forfeited to the Borrower under the tenant's lease). Gross Revenues
also includes any casualty insurance proceeds in excess of those used to restore the Property and
any rental interruption insurance proceeds. Any credit consideration shall be included in Gross
Revenues at the time cash proceeds (principal, interest and/or other) are received. Borrower shall
establish and maintain accounts for the Gross Revenues (the "'Project Accounts") that are
segregated from revenues and income received by Borrower from all other projects. Gross
Revenues shall also include all interest earned on the Project Accounts.
"Operating Expenses" shall mean the sum of the following:
(i) payments of principal and interest and all other charges relating to the Senior
Loan(s);
(ii) a property management fee no greater than 8% of gross rents, unless expressly
approved by the Executive Director or other City designee;
Owner Partnership Management and Asset Management Fees not to exceed 8%
of gross rents;
(iv) Deposits into required reserves, including social services fees if necessary;
(v) all other actual, reasonable cash operating costs and expenses, calculated on an
annual basis, that are directly attributable to managing and operating the Property, including,
without limiting the generality of the foregoing, the following: costs and expenses for real and
personal property taxes, special assessments or similar charges; water, fuel, electricity and other
2
utilities; heating, ventilation and air conditioning expenses; labor; supplies; tools; equipment;
insurance; advertising and marketing; accounting and legal fees; brokerage commissions and
other leasing expenses; reasonable reserves for all anticipated expenses as approved by the City;
and other such items constituting operation, maintenance and repair costs actually paid by the
Borrower, subject to the following conditions:
(a) Depreciation and amortization expenses shall not be considered
Operating Expenses, except as otherwise provided herein.
(b) Reserved.
(c) Any expenses, compensation or fees paid to any affiliate of Borrower
shall only be included as Operating Expenses to the extent they are not in excess of the
reasonable expenses, compensation or fees which would be payable to unrelated third parties in
arms -length transactions for similar services in the Santa Ana, California area.
(vi) Any other expenses necessary to meet senior lender requirements and requirements
of Borrower's limited partner, or its assignee, as set forth in Borrower's Agreement of Limited
Partnership (the "Partnership Agreement").
(vii) Deferred Developer Fees.
"Project" shall mean the acquisition and rehabilitation of the Property by Borrower
pursuant to the Loan Agreement.
"Property" shall mean the real property located at 810 S. Minnie Street, Santa Ana,
California described in the City Deed of Trust.
"Refinancing" shall mean changing the then existing financing on the Property by,
without limitation, modifying the interest rate and/or the term of the existing Senior Loan,
increasing or reducing the amount of the existing Senior Loan, paying off the existing Senior
Loan and obtaining new Senior Loan.
"Refinancing Proceeds" shall be disbursed as set forth in Section 7 hereof.
"Residual Receipts" shall mean the Gross Revenues from the Properties located at 810
S. Minnie Street, for each year, less deductions for Operating Expenses from the same buildings,
applicable to each such year less the items listed in the Amended and Restated Limited
Partnership Agreement, to the extent not already deducted as an Operating Expense.
"Sale" shall mean any transfer, assignment, conveyance or lease (other than to a tenant
for occupancy or a transaction set forth in, Section 15(c) hereof) of the Property or any portion
thereof, or any interest therein by the Borrower, and includes any transfer, assignment or sale of
any partnership interest in the Borrower by an individual or entity which is a general or limited
partner in the Borrower, or any interest by any individual or entity which holds an interest in any
such general or limited partner in the Borrower, which brings the cumulative total of all such
direct and indirect transfers, assignments and sales during the term of this Note to more than
thirty-five percent (35%) of the ownership interests in the Borrower, and any such transfer,
assignment or sale of a direct or indirect partnership interest thereafter. Sale includes a sale in
condemnation or under threat thereof. Sale does not include dedications and grants of easements
to public and private utility companies of the kind customary in real estate development.
"Sale Proceeds" shall be disbursed as set forth in Section 8 hereof.
"Senior Loan" shall mean the existing senior loan previously made by US Bank, NA.
"Term" the term for repayment of this Note shall mean fifty-five (55) years from the
date of recording.
3. Loan Repavment.
Borrower shall make payments to the City as provided in Sections 5 (Residual Receipts),
7 (Refinancing Proceeds), 8 (Sale Proceeds) and 10 (Accelerated Loan Repayment),
4. Operating Capital Improvement Loan
If the replacement reserve account ("reserves") is depleted due to unforeseen repairs and
the General Partner makes a loan to the Partnership, the reserves must be fully funded prior to
repayment of said loan. Such loan shall be repaid with net cash flow prior to the residual receipt
split. The outstanding loan balance will be reflected in the annual report.
5. Annual Loan Repayment.
a. After any deferred Developer Fee has been paid, as set forth hereinabove, the
Borrower shall thereafter make a loan payment to the City annually, in the amount of the lesser
of the outstanding balance due under this Note or the City's Percentage of the Residual Receipts,
as provided in this Section 5.
b. Within one hundred twenty (120) days after the year in which the rehabilitation of
the Project is completed,_ and on or before the 120th day of each Calendar Year thereafter, the
Borrower shall submit to the City a detailed statement of Gross Revenues and Operating
Expenses attributable to the Property for the applicable Calendar Year, along with a computation
of the amount of the Residual Receipts applicable to such Calendar Year with which to snake a
City Loan payment then due.
c. Except as otherwise provided in Section 4, the Borrower shall pay to the City the
fifty percent (50%) of the Residual Receipts as payment of principal and interest Linder their
loans. The remaining amount of the Residual Receipts shall remain with the Borrower to be
used by Borrower as determined by the General Partners of Borrower, including, without
limitation, for distribution to the partners of the Borrower.
4
d. The Residual Receipts payment shall be made not later than one hundred fifty (150)
days after the close of the Calendar Year. Such payment shall be applied first to any accrued but
unpaid interest, if any, then to reduce the principal balance of the loans.
6. Reserved.
Loan Repayment from Refinancing Proceeds.
The Borrower shall make a loan payment to the City from every Refinancing that occurs
during the term of this Note not to exceed the outstanding balance of principal and interest on
this Note, to the extent of the City's Percentage of the Refinancing Proceeds (if any), as follows:
the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the
amount necessary to pay in full the balance remaining on the Senior Loan; next, the Borrower
shall pay to the City fifty percent (50%) of the Refinancing Proceeds to the extent of the
outstanding balance on this Note. The remaining Refinancing proceeds shall remain with
Borrower to be used by Borrower as determined by the General Partners of Borrower, including,
without limitation, for distribution to the partners of the Borrower. Such payment shall be due on
the date of such Refinancing, and shall be applied first to any accrued but unpaid interest, then to
reduce the principal balance of the City Loans. The City shall not be required to reconvey the
lien of the City Deed of Trust if Sale Proceeds are insufficient to repay the Loan in full.
S. Loan Repayment from Sale Proceeds.
The Borrower shall make a loan payment, not to exceed the outstanding balance of
principal and interest on this Note, to the City from any Sale that occurs during the term of the
City Loan, to the extent of the City's Percentage of the Sale Proceeds, as follows: gross sale
proceeds are applied first to pay Closing Costs, next to pay in hull the balance remaining on the
Senior Loan; next the Borrower shall pay to the City fifty percent (50%) of the total Sale
Proceeds, not to exceed the outstanding amount of principal and interest due on this Note. This
fifty percent (50%) represents the total payment due under the City Note. The remaining Sale
Proceeds shall remain with Borrower. Such payment shall be due on the date of such Sale, and
shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of
the Loans. The City shall not be required to reconvey the lien of the City Deed of Trust if Sale
Proceeds are insufficient to repay the City Loan in full.
9. Buy Out Option.
Prior to the initial disbursement under this Note, the Borrower shall grant to the City a
Right of First Refusal (subject to any purchase option and/or right for first refusal granted to one
or more of the general partners of the Borrower) (the "City Right of First Refusal") to acquire the
Property if Borrower desires to transfer the Property to an entity which is not affiliated with one
or more of Borrower's general partners. The City Right of First Refusal shall be in form and
substance acceptable to the City and shall comply with all applicable Tax Credit requirements.
10. Accelerated Loan Pavment.
The full principal amount outstanding plus accrued but unpaid interest thereon, shall be
due and payable on the earlier to occur of the following:
a. Sale or Refinancing of the Property as provided further in Section 15 hereof;
unless: (i) in the case of a Sale in which the Sale Proceeds are insufficient to repay in full the
City Loan, the City approves such sale -and the purchaser assumes the balance of the City Loan
in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the
Refinancing Proceeds are insufficient to repay in full the City Loan, the City approves such
Refinancing and the Borrower remains obligated pursuant to the terms of this Note.
b. In event of default pursuant to any of the Loan Documents or the Senior Loan
Documents.
c. Any default by Borrower as to any other loan or loans by City to Borrower
with respect to the Property; or
d. The date that is fifty five (55) years after the date of execution of this Note. On
that date, the City agrees to review the performance of the Property and consider in good faith
any reasonable request by Borrower to modify the terms or extend the Term of this City Loan
Note.
11. Prepayment
Borrower may prepay the outstanding principal balance under this Note, in whole or in
part, together with any accrued but unpaid interest, if any, and other sums owed to the City under
this Note, if any, at any time without penalty.
12. Lawful Money.
Principal and interest are payable in lawful money of the United States of America.
13. Application of Payments, Late Charges.
a. Any payments received by the City pursuant to the terms hereof shall be
applied first to sums, other than principal and interest, due the City pursuant to this Note, next to
the payment of all interest accrued to the date of such payment, and the balance, if any, to the
payment of principal.
b. If any payment is not received by the City within ten (10) days following the
due date thereof, then in addition to the remedies conferred upon the City pursuant to this Note
and the other Loan DOcuments, (i) a late charge of four percent (4%) of the amount due and
unpaid will be added to the delinquent amount to compensate the City for the expense of
handling the delinquency and (ii) the amount due and unpaid, excluding the late charge, shall
99
bear interest at the highest annual rate which may lawfully be charged and collected under
applicable law on the obligation evidenced by this Note, computed from the date on which the
amount was due and payable until paid. Without prejudice to the rights of the City hereunder or
under any of the other Loan Documents, Borrower shall indemnify the City against, and shall
pay the City on demand, any reasonable expense or loss which it may sustain or incur as a result
of the failure by Borrower to pay when due any installment of interest and/or principal, fees, or
other amounts payable to the City under this Note or any other Loan Document, to the extent that
any such expense or loss is not recovered pursuant to such foregoing provisions. A certificate of
the City setting forth the basis for the determination of the amounts necessary to indemnify the
City in respect of such reasonable expenses or direct loss, submitted to Borrower by the City,
shall be conclusive and binding for all purposes except as immediately corrected by Borrower
notice to City.
14. SecturilK
This Note is secured by the City Deed of Trust.
15. Acceleration by Reason of Transfer or Financing.
a. In order to induce City to make the loan evidenced hereby, Borrower
agrees that in the event of any transfer of the Property without the prior written consent of City
(other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure,
by the holder of the Senior Loan Deed of Trust), City shall have the absolute right at its option,
without prior demand or notice, to declare all sums secured hereby immediately due and payable.
Consent to one such transaction shall not be deemed to be a waiver of the right to require consent
to future or successive transactions. City may grant or deny such consent in its sole discretion
and, if consent should be given, any such transfer shall be subject to this Section 15, and any
such transferee shall assume all obligations hereunder and agree to be bound by all provisions
contained herein. Such assumption shall not, however, release Borrower from any liability
thereunder without the prior written consent of City.
b. As used herein, "transfer" includes the Sale, agreement to sell, transfer or
conveyance of the Property, or any portion thereof or interest therein, whether voluntary,
involuntary, by operation of law or otherwise, the execution of any installment land sale contract
or similar instrument affecting all or a portion of the Property, or the lease of all or substantially
all of the Property. 'Transfer' shall not include the leasing of individual residential units on the
Property, so long as Borrower complies with the provisions of the Loan Agreement and the
Affordable Housing Restrictions relating to such leasing activity, nor shall it include a
conveyance of the Property to a limited partnership in which Borrower or its' affiliate is a
general partner, or to a corporation that is wholly owned by the Borrower or its' affiliate and that
is formed for the sole purpose of owning and operating the Property, or the sale back to the
Borrower. In the event of any Refinancing or partial Refinancing in an amount in excess of the
balance of the Senior Loan, without the prior written consent of City (which consent City may
grant or deny in its sole discretion), then the entire outstanding balance of the City Loan together
7
with all accrued and unpaid interest, shall be repaid to the City at the time of each Refinancing or
partial Refinancing.
c. Notwithstanding anything to the contrary contained herein, a "transfer" shall
not include (i) a transfer of any general partner's interest in Borrower when made in connection
with the exercise by the Borrower's limited partner (the "Limited Partner") of its rights upon a
default by a general partner under the Borrower's partnership agreement (the "Partnership
Agreement") or upon a general partner's withdrawal in violation of the Partnership Agreement,
so long as the removal and substitution of the defaulting general partner is made within thirty
(30) days of such default or, if such removal and substitution cannot reasonably be completed
within thirty (30) days, so long as the Limited Partner commences to take action to remove and
substitute the general partner with a reasonable period and thereafter diligently proceeds to
complete such substitution; (ii) any transfer of the Property to the managing general partner of
Borrower pursuant to the right of first refusal or to the general partners of Borrower pursuant to
the purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the
Limited Partner's interest in accordance with the Partnership Agreement; and (iv) any sale,
transfer or other disposition of an interest in a limited partner of the Borrower.
16. Event of Default.
Subject to the provisions of Sections 23 and 25 hereof, the occurrence of any of the
following shall be deemed to be an event of default ("Event of Default") hereunder: (a) failure by
Borrower to make any payments provided for herein, and if such default is not made good within
thirty (30) days of the due date; (b) failure by Borrower to perform any covenant or agreement in
the Deed of Trust, the Loan Agreement, or the Affordability Restrictions on Transfer of Property
within thirty (30) days after written demand therefor by City (or, in the event that more than
thirty (30) days is reasonably required to cure such default, should Borrower fail to promptly
commence such cure, and diligently and continuously prosecute same to completion); or (c) a
default under the Senior Loan Deed of Trust that remains uncured after the cure period, if any,
provided therein.
17. Remedies.
Upon the occurrence of an Event of Default, after any applicable notice has been
provided and the expiration of any applicable cure period therefore, City may declare all sums
evidenced hereby immediately due and payable by delivery to the Trustee named in the City
Deed of Trust securing this Note, and to Borrower, written declaration of default and demand for
sale, and written notice of default and of election to cause the Property to be sold, which notice
Trustee shall cause to be duly filed for record and City may foreclose on the City Deed of Trust.
City shall also. deposit with Trustee the Deed of Trust, this Note and all documents evidencing
expenditures secured thereby and evidenced hereby. Upon the occurrence of an Event of Default
(and so long as such Event of Default shall continue), the entire balance of principal together
with all accrued interest shall bear interest at the 11 m District Cost of Funds reference rate on the
due date of the delinquent payment plus four percent (4%). No delay or omission on the part of
the City in exercising any right under this Note or under any of the other Loan Documents shall
operate as a waiver of such right.
18. Attorneys' Fees.
If this City Loan Note is not paid when due or if any Event of Default occurs, Borrower
promises to pay all reasonable costs of enforcement and collection, including but not limited to,
reasonable attorneys' fees, whether or not any action or proceeding is brought to enforce the
provisions hereof.
19. Severability.
Every provision of this Note is intended to be severable. In the event any term or
provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain binding and enforceable.
20. Number and Gender.
In this Note the singular shall include the plural and the masculine shall include the
feminine and neuter gender, and vice versa, if the context so requires.
21. Non-recourse.
The City Loan is a nonrecourse obligation of the Borrower. Neither Borrower, nor any
partner of the Borrower, nor any other party shalt have any personal liability for repayment of
the City Loan or for any other amounts ander any of the documentation evidencing, securing or
describing the City Loan. The sole recourse of City under this Note and the Deed of Trust for
repayment of the City Loan and for such other amounts arising therefrom shall be the exercise of
its rights against the Property and related security thereunder.
22. Subordination.
It is hereby expressly agreed and acknowledged by Borrower and City that the City Deed
of Trust is a subordinate deed of trust, and that this Note is subject and subordinate to the Senior
Loan Deed of Trust held by US Bank, NA.
23. Notice of Default.
a. Subject to the applicable cure periods set forth in Section 16 and extensions of time
set forth in Section 25, and subject to the further provisions of this Section 23, failure or delay by
the Borrower to perform any term or provision of this Note constitutes a default under this Note.
The Borrower must immediately commence to cure, correct, or remedy such failure or delay and
shall complete such cure, correction or remedy -with reasonable diligence and during any period
of curing shall not be in default.
b. The City shall give written notice of default to the Borrower, specifying the
default complained of by the City. Delay in giving such notice shall not constitute a waiver of
any default nor shall it change the time of default.
C. Except in the case of a monetary event of default, the Borrower shall not be in
default so long as it endeavors to complete such cure, correction or remedy with reasonable
diligence, provided such cure, correction or remedy is completed within the applicable time
period set forth herein after receipt of written notice (or such additional time as may be deemed
by the City to be reasonably necessary to correct the default).
d. Any failures or delays by the City in asserting any of its rights and remedies as to
any default shall not operate as a waiver of any default or of any such rights or remedies. Delays
by the City in asserting any of its rights and remedies shall not deprive the City of its right to
institute and maintain any actions or proceedings which it may deem necessary to protect, assert,
or enforce any such rights or remedies.
e. If a monetary event of default occurs under the terms of this Note or the City Deed
of Trust, prior to exercising any remedies thereunder City shall give Borrower written notice of
such default. Borrower shall have a period of thirty (30) days after such notice is given within
which to cure the default prior to exercise of remedies by City under this Note and the City Deed
of Trust.
f If a non -monetary event of default occurs under the terms of this Note or the City
Deed of Trust, prior to exercising any remedies thereunder, City shall give Borrower notice of
such default. If the default is reasonably capable of being cured within thirty (30) days, Borrower
shall have such period to effect a cure prior to exercise of remedies by the City under this Note
and the Deed of Trust. If the default is such that it is not reasonably capable of being cured
within thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii)
diligently, continually, and in good faith works to effect a cure as soon as possible, then
borrower shall have such additional time as is reasonably necessary to cure the default prior to
exercise of any remedies by City. In no event shall City be precluded from exercising remedies if
its security becomes or is about to become materially jeopardized by any failure to cure a default
or the default is not cured within one hundred eighty (180) days after the first notice of default is
given.
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24. Insurance and Condemnation
24.1 Policies Required. While any obligation of Developer under the Loan
Documents remains outstanding, Developer shall maintain at Developer's sole expense, with
insurers either (i) admitted in California or (ii) are not admitted to California but have an A.M.
Best Rating of "A" or above and reasonably approved by the City, the following policies of
insurance in form and substance reasonably satisfactory to the City Attorney:
(a) worker's compensation insurance and any other insurance
required by law in connection with the rehabilitation;
(b) prior to commencement and following completion of the
rehabilitation, fire and hazard "all risk" insurance covering 100% of the replacement cost of the
Improvements in the event of fire, lightning, windstorm, vandalism, malicious mischief and all
other risks normally covered by "all risk" coverage policies in the area where the Property is
located (including loss by flood if the Property is in an area designated as subject to the danger of
flood);
(c) upon commencement of the rehabilitation and at all
times prior to completion of the rehabilitation, 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 City from time to time, and in no event less than $1,000,000; and
(f) any other insurance reasonably required by City.
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(s) in the
policies required under subparagraphs (d) and (e) with primary coverage. Certificates of
insurance for the above policies (and/or original policies, if required by City) shall be delivered
within ten (10) days after demand therefore, and prior to start of any rehabilitation 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 City Attorney.
11
24.2 City Attorney May Modify. The City Attorney may modify the type and
amounts of insurance required pursuant to this Section.
24.3 Claims and Proceedings. Developer shall give City immediate notice of
any material casualty to any portion of the Property, whether or not covered by insurance, and of
the initiation or threatened initiation of any proceeding for the condemnation or other taking for
public or quasi -public use of any portion of the Property (collectively, "Condemnation"), and
shall provide City with copies of all documents which pertain to any such casualty or
Condemnation. Developer shall take all action reasonably required by City in connection
therewith to protect the interests of Developer and/or City, and City shall be entitled (without
regard to the adequacy of its security) to participate in any action, claim, adjustment or
proceeding and to be represented therein by counsel of its choice subject to the rights of the
Senior Lender. Developer shall not settle, adjust, or compromise any claim, action, adjustment or
proceeding, subject to the rights of the Senior Lender without prior written approval, which
approval shall not be unreasonably withheld or delayed.
24.4 Delivery of Proceeds to City. In the event that, notwithstanding the
"lender's loss payable endorsement" requirement set forth above, the proceeds of any casualty
insurance policy described herein are paid to Developer, Developer shall, subject to any superior
rights of the Senior Lender, deliver such proceeds to the City immediately upon receipt.
24.5 Application of Casualty Insurance Proceeds. Any proceeds collected
(the "Proceeds") under any casualty insurance policy described in this Agreement shall be
disbursed to Developer as provided below, but only upon fulfillment of each of the following
conditions (the "Restoration Conditions") within ninety (90) days (unless extended by mutual
agreement of Developer and City) following the occurrence of the damage for which the
Proceeds are collected:
(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 two years (or such longer 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 rehabilitation contract in form and content, and with a contractor, reasonably satisfactory to
City.
(b) To the extent that the Proceeds are insufficient to
accomplish the restoration required above, , Developer shall deliver to City (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 requires to
12
evidence and secure Developer's obligation to use all amounts disbursed for the diligent
restoration of the Property.
(d) No Event of Default shall remain uncured.
24.6 Method of Disbursement and Undisbursed Funds
Subject to the rights of the Senior Lender, any Proceeds and Shortfall Funds to be disbursed to
Developer shall be held by City and disbursed in accordance with then customary disbursement
procedures and related provisions. Any amounts remaining undisbursed following completion of
such restoration shall be returned to Developer up to the amount of any Shortfall Funds
deposited by Developer, and any other amounts remaining shall either be paid to Developer or
applied by City against any obligations to City that are secured by a lien on the Property, as they
elects in their sole and absolute discretion.
24.7 Failure to Satisfy Conditions. In the event that Developer
fails to fulfill the Restoration Conditions within ninety (90) days (unless extended pursuant to
Section 24.5) following the date on which the damage occurs, 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 their sole and
absolute discretion.
24.8 Restoration. Nothing in this Article 24 shall be
construed to excuse Developer from repairing and restoring all damage to the Property in
accordance with other Loan Document provisions, regardless of whether insurance proceeds are
available or sufficient.
24.9 Condemnation, Treatment of Compensation
Subject to any superior rights of Senior Lender, Developer hereby assigns to the City, as security
for all obligations to City secured by a lien on the Property, all amounts payable to Developer in
connection with any Condemnation, and any proceeds of any related settlement (collectively,
"Compensation"). Subject to any superior rights of Senior Lender, Developer shall deliver such
remaining Compensation to City immediately upon receipt. If the taking results in a loss of the
Property to an extent that, in the reasonable opinion of City, renders or is likely to render the
Property not economically viable or if, in City's reasonable judgment Developer's security is
otherwise impaired, subject to any City may apply the Compensation received due to judgment
or settlement in connection with any condemnation or other taking to reduce the unpaid
obligations secured in such order as City may determine, and without any adjustment in the
amount or due dates of payments due under the Note. If so applied, any award in excess of the
unpaid balance of the Note and other stuns 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.
24.9.1 Notwithstanding the foregoing, as long as the value of City's liens are not
impaired, any condemnation proceeds may be used by the Borrower for repair and/or restoration
of the Project.
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24_10 Waiver of Subrogation. Developer hereby waives all rights to
recover against the City (or any officer, employee, agent or representative of the City) for any
loss incurred by Developer from any cause insured against or required by any Loan Document,
to be insured against; provided, however, that this waiver of subrogation shall not be effective
with respect to any insurance policy if the coverage thereunder would be materially reduced or
impaired as a result. Developer shall use its commercially reasonable efforts to obtain only
policies which permit the foregoing waiver of subrogation.
25. Force Majeure.
Notwithstanding specific provisions of this Note, performance hereunder shall not be
deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs;
riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor,
materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to
act of the City or any other public or governmental agency or entity (except that any act or
failure to act of City shall not excuse performance by City); or any other causes beyond the
reasonable control or without the fault of the party claiming an extension of time to perform. An
extension of time for any such cause shall be for the period of the enforced delay and shall
commence to run from the time the party claiming such extension gives notice to the other party,
provided notice by the party claiming such extension is given within thirty (30) days after the
commencement of the cause. Times of performance under this Note may also be extended in
writing by the City and the Borrower.
26. Assignments.
The City, and the assignee of the City, shall have the right to assign this Note and the
City Deed of Trust securing this Note, without any further act of Borrower. The assignee shall
give notice to Borrower as soon as practicable after such assignment.
14
This City Note is hereby agreed to and executed on the date first set forth above.
"BORROWER"
WAKEHAM-GRANT APARTMENTS LP, a California Limited Partnership
MANAGING GENERAL PARTNER
By: JHC-Cornerstone LLC
a California Limited liability company
IfflOgrx"k,10101 M
JAMBOREE HOUSING CORPORATION
a California non-profit Public benefit corporation
By: TUA r n
Laura Archuleta], President
Dated: dt 9 1
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 9.27.17
before me, R.L. deCordova-Brittain, Notary Public
(insert name and title of the officer)
personally appeared Laura Archuleta
who proved to me on the basis of satisfactory evidence to be the persort(4 whose name(s), is/are-
subscribed to the within instrument and acknowledged to me that h/she/they executed the same in
Elis/her/th-eir authorized capacit"&4, and that by his/her/their signature(son 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.
=DECORIDOVA-BRITTAINVA-BRITTAIN. Californiaounty = 2177359 Dec 26, 2020
I)
Exhibit G —
Affordability
Restrictions on
Transfer of Property
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN 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
SPACE ABOVE THIS LINE FOR RECORDING USE
FREE RECORDING REQUESTED
[Government Code Section 6103]
AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
(8 10 S. Minnie Street, Santa Ana)
THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF
PROPERTY (the "Restrictions") are entered into as of September 27, 2017, by and among
and Wakeham — Grant Apartments, LP, (referred to herein as the "Developer") a
California limited partnership, the City of Santa Ana, a charter city and municipal
corporation (the "City").
RECITALS:
A. Developer is the owner of that certain real property located at 810 S. Minnie
Street, (the "Property") located in the City of Santa Ana more particularly described in
Exhibit A, which is attached hereto and incorporated herein by this reference.
B. For the purpose of providing ten (10) units of housing that will be affordable to
Extremely -Low and Very -Low households ("Assisted Units"), the Developer and the City
have entered into that certain Loan Agreement, dated on or about the date hereof (the
"Loan Agreement") to which these Restrictions are attached as Exhibit G, which, along
with all of its attachments, is incorporated herein by this reference (any capitalized term
that is not otherwise defined in these Restrictions shall have the meaning ascribed to such
term in the Loan Agreement).
C. The Loan Agreement provides, among other things, for the use of the Property
for affordable housing with all Assisted Units being restricted to Extremely -Low and
Very -Low households, at Affordable Rent(s).
D. 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 and Very -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 and Very -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. Developer agrees and covenants, which covenants shall run with the land and bind
Developer, its successors, its assign and every successor in interest to the Property that
Developer will make all rental units on the Property available to extremely low and very low
households at rents affordable to such households for fifty-five (55) years from the effective
date of this Agreement. The HOME restrictions for the ten (10) HOME assisted units shall
be enforced until the date that is five (5) years after the date on which the City reports the
Project as complete to the Department of Housing and Urban Development. Upon expiration
of the 5 year HOME compliance period, the City will enforce affordability of the ten (10)
HOME assisted units) with the same income and rent restrictions as the other units, pursuant
to City guidelines and the California Health and Safety Code. The City permits the Developer
to limit the eligibility and/or give preference to a particular segment of the population in
accordance with 24 CFR 92.253(d).
B. The Project shall consist of seventeen (17) One -Bedroom units. There shall be ten
(10) HOME assisted units. The HOME assisted units shall be fixed units with comparable
amenities to the other units (Units 810-02, 810-03, 810-04, 810-05, 810-06, 810-07, 810-10,
810-12, 810-14, and 810-16). The affordability mix for the Project is as follows:
UnitT e
AMI Level
4 of Units
One -Bedroom
I 50%AMI
1 10
C. At initial lease up, households in the HOME assisted units cannot earn more than
50% of AMI, however existing tenants at the Property who are otherwise eligible under
the HOME Program may continue their tenancy at the Property. Rental increases shall be
in conformance with federal and state law. After the five (5) year HOME compliance
period, the City shall require that the units remain affordable, with rents calculated based
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on assumed household size at the same income levels, as required by the California Health
& Safety Code.
D. All of the HOME units will be restricted to occupancy by fifty percent (501/o) of the Area
Median Income (AMI). Current residents whose incomes exceed eighty percent (80%) of the
AMI will be allowed to remain. Rents for these households will be increased to either thirty
(30%) percent of their monthly household income or market rent for the neighborhood,
whichever is lower.
E. Affordable rents shall be governed by California Health and Safety Code Sections
50052.5 and 50053(b)(1), and as provided in the HOME Regulations 24 CFR section 92.252.
F. Rents During Construction/Rehabilitation:
(a) All HOME units shall be charged the Low HOME rent, as amended from time to
time (currently $978 for One -Bedroom unit).
3.2 Affordable Gross Startine Rents (Less Reasonable Utility Allowanee): Initial rents
may be recalculated to allowable rental amounts at the time of initial lease -rip following
completion of construction in accordance with any changes in allowable rent and income
tables as published by IND. Rents for non -HOME assisted units will be based on the rents
published annually by California Tax Credit Allocation Cormnittee (TCAC).
A. HOME Assisted Units
# of Units Max Gross Monthly Reny
Very Low 1 Bedroom 10 $ 978
(1) In no event shall the rent charged to the tenant of the HOME assisted units be
more than that amount of the low rent as published by HUD, as amended from time to
time.
(2) Utility allowances must be deducted from the Maximum Gross Monthly Rent.
The Housing Authority of the City of Santa Ana publishes the Utility Allowance
Schedule.
(3) At the time of project completion, the Developer shall provide to the City the
address and/or unit number of each of the HOME assisted units.
(4) Annually with the financial statements, the Developer shall provide an annual
report of rents and occupancy of assisted units, including HOME -assisted units, to
verify compliance with affordability requirements. For the HOME units, information
on unit substitution and tilling vacancies shall be provided to ensure that the project
maintains the required unit mix.
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3.3 Rent Increases: On an annual basis, the City shall provide the Developer with the
maximum allowable schedule of rents for the Property. In no event can Developer charge
any tenant more than such amount.
4. Developer, its successors and assigns shall not charge rents for the 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 11 below), written tenant selection policies and criteria for the Units,
that meet the following requirements:
(a) Are consistent with the purpose of providing housing for Extremely
Low and Very Low Income households;
(b) Are reasonably related to program eligibility and the applicants'
ability to perform the obligations of the lease;
(c) 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);
(d) Provide for:
(i) The selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable; and
(ii) The prompt written notification to any rejected applicant of
the grounds for any rejection;
(e) Provide first priority in the selection of qualified eligible tenants to
households that are referred by the City; and
(f) 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.
Developer shall cooperate with the City to effectuate this provision prior to the initial
renting, or upon occurrence of a vacancy, and the re -renting of any Assisted Units (24
CFR 92.351).
6. Developer, its successors and assigns, shall not refuse to lease a unit to a
holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or
to a holder of a comparable document evidencing participation in a HOME 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 HOME tenant -based
assistance document. Total rents charged to such tenants, including the tenant
contribution and rental assistance, shall not exceed the allowable rents as described above.
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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):
(a) 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;
(b) 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;
(c) 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;
(d) Agreement of the tenant that the owner may institute a lawsuit
without notice to the tenant;
(e) 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;
(f) Agreement by the tenant to waive any right to a trial by jury;
(g) 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
(h) 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.
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
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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 five (5) business days prior to the execution of the
documents, Developer shall submit to the Executive Director a Management Plan in a
form that is reasonably 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 Closing. Developer shall manage the
Assisted 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:
(a) 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. The City hereby approves the John Stewart
Company as the initial Management Agent.
(b) 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.
(c) Annual Budget and Projected Cash Flows Prior to the Close of
Loan, and annually thereafter not later than ninety (90) days after the close of each
calendar year thereafter, Developer shall submit a projected operating budget and cash
flow to the Executive Director. The budget and cash flow shall be in a forth that is
reasonably acceptable to the Executive Director.
(d) Tenant Selection Policies. Developer shall include in the
Management Plan the tenant selection policies in accordance with Section 4, 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 thirty (3 0) days
(or such longer period as may be reasonably necessary to effect such cure by the City),
with the exception of HOME regulations that require a shorter period, 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
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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. Within ten (10) 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 reasonably satisfactory to the
Executive Director or designee for continuing management of the units.
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 fifty-five (55) years.
In its reasonable discretion, the City may defer repayment of the HOME Loan or the City
may agree to such reasonable modifications to the requirements of these Restrictions, as
the City reasonably determines are necessary for the continued maintenance and operation
of the Assisted Units. The covenants against discrimination shall remain in effect for the
period of these Restrictions.
14. Developer shall not request disbursement of HOME funds until the finds
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)].
15. 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):
a. Annual Reports. Developer shall file with the City an Annual Report
(herein referred to as the "Annual Report") within one hundred twenty (120) days
following the end of each calendar year, commencing with the end of the calendar year (or
portion thereof) in which the Close of Loan occurs. The Annual Report shall contain a
certification by Developer as to such information as the City Executive Director may then
reasonably require, including, but not limited to, the following:
(1) The fiscal condition of the Project, including the Annual Budget and
Project Cash Flow report required by Section 11 (c) of the Affordable Housing
Restrictions which shall include a financial statement for the previous calendar year that
includes a balance sheet and a profit and loss statement 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.
(2) 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.
7of1.2
(3) The occupancy of the units indicating the income of each current
HOME assisted unit 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 under the HOME Program.
(4) General management performance, including tenant relations and
other relevant information.
(5) Records that demonstrate that the units meet the affordability
requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and
Safety Code, for the required period of affordability according to section 33334.3 of the
California Health and Safety Code.
(6) Evidence of a currently paid hazard insurance policy in accordance
with the requirements of Section 6 of the City/HOME 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.
(7) 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.
(8) Termite reports pertaining to the Property every fifth (5`h) year.
(9)
Such other information as may be reasonably required by the
Executive Director or his/her designee.
b. Records and Audits. Developer shall maintain the following general
program records, and make them available for inspection by the City, the State or IIUD
(1) records which demonstrate that the HOME assisted units meet the
standard specified in 24 CFR 92.251;
(2) records, for each HOME Assisted Unit, which demonstrates that the
project meets the requirements of 24 CFR 92.252.
(3) records which demonstrate compliance with the tenant and
participant protections, as specified in 24 Section 29.253 for the HOME assisted units;
(4) records which demonstrate compliance with the Equal Opportunity
and Fair Housing requirements outlined in these Restrictions, including:
(A) data on the extent to which each racial and ethnic group and
8of12
single head of household (by gender of head of household) have applied for, participated
in, or benefited from, any program or activity funded in whole or in part with HOME
funds;
(B) 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);
(C) 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;
(5) documentation of the steps taken to carry out an affirmative
marketing program in accordance with 24 CFR 92.351, if applicable;
(6) 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 Close of Loan
(i.e., the date on which Developer closes funding of the CHDO loan);
(7) records concerning lead-based paint in accordance with 24 CFR
92.355;
(8) if applicable, records which support any requests for waivers of the
conflict of interest prohibition as stated in 24 CFR 92.356;
(9) 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
(10) any other reports issued by other monitoring agencies.
C. All records for the HOME assisted units pertaining to each calendar year of
HOME funds
must be retained for the most recent five year period, except that for rental housing
projects, records may be retained for five years after the project completion date; except
that records of individual tenant income verifications, project rents and project inspections
must be retained for the most recent five year period, until five years after the affordability
period terminates (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, 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.
9of12
d. 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.
e. All records, accounts, documentation and other materials relevant to the
Project shall be reasonably 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.
f. 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.
16. 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. The City shall
have the right if the covenants are breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce the
curing of such breaches to which they or any other beneficiaries of these Restrictions and
covenants are entitled.
17. 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 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.
18. 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/HOME Loan Note and the City/HOME
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 (e) (13)].
10 of 12
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:
Maria D. Ruizar
Clerk of the Council
APPROVED AS TO FORM
Sonia R. Carvalho
RECOMMENDED FOR APPROVAL:
Robert M. Zur Sclu ie
Acting Executive
Community Development Agency
CITY OF SANTA ANA
ynthia J. Kurtz
Interim City Manager
11 of 12
WAKEHAM-GRANT APARTMENTS LP, a California Limited Partnership
MANAGING GENERAL PARTNER
By: JHC-Cornerstone LLC
a California Limited liability company
MANAGING MEMBER
JAMBOREE HOUSING CORPORATION
a California non-profit Public benefit corporation
By: `p�`(I t A , �—
Laura Archuleta, President
Dated: ct 1'?,/ 7 C 1]
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 September 28 2017 before me, . Rosa A Flores Notary Public
(insert name and title of the officer)
personally appeared Cynthia J. Kurtz who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(z) is4are subscribed to the within instrument and acknowledged to me
that hefshe/they executed the same in his/her/##teir authorized capacity(ies), and that by his/her -/their
signature,( on the instrument the person(4, or the entity upon behalf of which the person(aj 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. }�+�+s�
ROSA A. # 2057
7 Commission # 2057129
Notary Public • California i
Orange County >
/1 M Comm. Expires Feb 7, 2010
Signature a, Q- (Seal)
ACKNOWLEDGMENT
A notary public or ather 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 9.27,17
before me, R.L. deCordova-Brittain, Notary Public
(insert name and title of the officer)
personally appeared Laura Archuleta
who proved to me on the basis of satisfactory evidence to be the personXwhose name(b) is/are-
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ibs), and that by his/.her/th®ir. signature(s) on the instrument the
person(,&), or the entity upon behalf of which the person(sa 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.
R. L. DECORDOVA-BRITTAIN
WITNESS my hand and official l. Notary Public - California
_ sea<:=u Orange County z
z Commission # 2177359
M Comm. Ex Tres Dec 26, 2020
Exhibit H —Sample
Affirmative
WE=
Guidelines
EXHIBIT H
2/24/03LS
CITY OF SANTA ANA
4L EIRMATIVE MARKETING AND MINORITY OUTREACH PROGRAM
AFFIRMATIVE MARKETING PROGRAM
The City of Santa Ana is a participating jurisdiction in the feder
Partnership Program (HOME) and the Community.Development
(CDBG). Federal law requires that all. participating jurisdictic
marketing policies that.include:
Methods to inform the public
affirmative marketing policy;
Procedures owners must use to
housing market area who are i
outreach;
Records that owners and the
to affirmatively market units
housing without special
the actions they have taken
results of these actions; and
assess me success ,
actions are needed.
and requirements for rental and homebuyer
CDBG-assisted housing units are set forth
constitute the City's Affirmative Marketing
its do not apply to .families with Section•&
imilies with tenant -based rental assistance
the public about federal fair housing Imps:
will display the Equal Housing logotype or slogan in housing -related
°ases and solicitations for owners, and on the website page for the City's
and Neighborhood Development Division.
'The City will request that the County of Orange include information on the City's
HOME and CABG -assisted rental units in its countywide Affordable Housing
List maintained by the County. This list can be found on the internet at
http://�N,ti-,�v.oc.ca..oy/housing/AffordableHousinaList.htm. The City will
maintain a link to this website on the website page for the City's Housing and
EXHIBIT l
Resolution No. 2003-031
Page 3 of 5
Neighborhood Development. Division and for the Santa -Ana Housing Authority.
Copies of the list will be available at the public reception counters for the Housing
and Neighborhood Development Division and the Santa Ana Housing Authority.
B. Requirements and practices owners must adhere to: -
❖ The City will require owners of City HOME and CDBG-as",
covered under this marketing plan. to display the Equal Htiu
logotype or slogan in all correspondence ,,vith current or potenti
lease agreements. The City will require them to display the fair
their leasing offices, and to develop written procedures for
These procedures must meet the following criteria.;,.
o They must be consistent with
low-income and low-income f
" o They must be reasonably relat
ability to perform the obligatio
o They must give reasonable col
that would have a federal prefe
o They must provideor�the self
in chronological order oftheir:
o They must call for prompt,writ
the grounds for any rejection,:,
C
P.
on
very
Oto the housing needs of families
Jer section 60(4)(A) of the Act;
tenants from a written waiting list
m, insofar as is practicable;
ication to any rejected applicant of
The City will require owners of City, HOME and CDBG-assisted rental units to
continuously review.tdemographic makeup of their tenants. If and when such
revlew,indicates that thetrtenants no longer reflect the City's minority population,
theyw ltbe'required to hielm the City of that fact and request City review and
al p; val of steps they will take to correct that deficiency.
Cozripliancg`°with the City's affumative mark ng and procedures
will tie,nade an obligation of all rental property owners receiving HOME or
CDBG assistance from the City of Santa Ana, and will be enforceable by means
of appropriate actions described in loan documents recorded through the County
The City will require owners of its HOME and- CDBG-assisted rental units
covered under this marketing plan to make an annual report to the City detailing
the steps they have taken to comply with this program. They will also be required
to report on the ethnicity of their tenants, as well as rents, income levels, and other
household characteristics. Reports will be made on a form that is acceptable to
Resolution No, 2003-031 EXHIBIT 1
Page 4 of 5
2/24/03LS,
the City of Santa Ana, and that will enable the City to capture the data it needs to
_ evaluate owner compliance with this program.
❖ The City will maintain records on owner reports and its evalualid, of those
reports for a period of not less than ten years after expiration of the affordability
period required by applicable HUD regulations.
E. Annual assessment:
•S Upon receipt of owner reports, the City will evaluate the ethnic"
characteristics of tenants being served to determine if they reflect:'
housing market. If they do not, the City will,"direct the owner to tz
affirmative marketing steps to correct the imbalance. The City will
evaluate the steps taken to ensure they have the desirpa'effect.
As a participating jurisdiction, the City isaiso required to adopt certain affirmative steps
to ensure maximum feasible participation'Jri'HOME ;and CDBG-funded projects by
minority business enterprises, women's business enterprises, labor surplus area firms and
other small businesses. These affrmiative steps are listed below and constitute the City's
Minority -Outreach Procedures and Requirements Program for HOME and CDBG-funded
projects.
The City will ,,,place qualified small and minority businesses and women's
business enterprises on solicitation lists;
t-
B• The City will assure that small and minority businesses, and women's business
enteipiises are solicited whenever they are potential sources;
Thi ity will,divide tataI'requirenients, when economically feasible, into smaller
taslIs or, quantities to'pennit maximum participation by small and minority
11
business; and women's business enterprises;
•. Thd Citywill use the services and . assistance of the Small Business
Administration and the Minority Business Development Agency of the
Depa tincht of Commerce; and
City will require the prime contractor, if subcontracts are to be let, to take the
mative steps listed above.
The City will annually review the results of these procedures to determine if additional
steps should be taken,
EXHIBIT .I
Resolution No. 2003-031
Page 6 of 5
Exhibit I -
Form of Residual
EXHIBIT I
Property Taxes
Insurance
Other Expenses
Please list these expenses:
Total Annual Operating Expenses for the Housing Project
(Add lines 5, 6, 7, 8, 9, 10, and 11)
Net Operating Income (Subtract Line 12 from Line 4)
Do not include expense unrelated to the operation of the Rental Portion of the
Project, such as depreciation, amortization, accrued principal and interest
expense on deferred payment debt, or capital expenditures.
Additional Cash Flow Payments
Obligated First Mortgage Debt Service Payments (as
other parties that may have such approval rights) and
Subordinate Debt Service Payments (as approved by
that may have such approval rights)
Scheduled Deposits to Reserves (as approved
Additional Payment Obligations (such as
developer fees, or repayments on loans to
have priority over Residual Receipt Paym
Residual Receipts
(Subtract Line 17
Percentage ofResidual $ecerpts to_pePaid,to the Agency (as shown in the
Promissory Note by and hetwe6 the�Agency`and Borrower dated
(Multiply Line 18 by Line 19)
Agency listed on Line 20 is subject to payment according to the terms of the
tween the Agency and Borrower dated . If Line 20
nothing to the Agency this year. If Line 20 is a positive number, remit check
and attach to this report.
Exhibit J —Rehab
EXHIBIT)
CITY OF SANTA ANA REHABILITATION STANDARDS
PREFACE
The primary purpose of these standards is to address the quality of workmanship and materials expected, and to
achieve consistency throughout the program activities administered by the City of Santa Ana. These standards
are not intended to reduce or exclude the requirements of any federal, state or local codes, standards,
ordinances and regulations that apply to residential rehabilitation.
WORKMANSHIP
• All work shall be performed in a professional and workmanlike manner.
• The quality and durability of the work shall meet or exceed the standards established by the
construction industry and various trades.
MATERIALS & EQUIPMENT
• All materials and equipment shall comply with and be installed in accordance with the
manufacturer's requirements and all applicable codes, standards, ordinances and regulations. If
a discrepancy occurs between the requirements, the more stringent shall prevail.
• Unless otherwise specified, all materials and equipment shall be medium grade.
• Economy grade materials and equipment are unacceptable.
• All materials and equipment shall be new, in excellent condition, and delivered to the job in the
manufacturer's original packaging.
• The description of materials and equipment found in this document establish a minimum
standard.
ENERGY EFFICIENCY, WATER CONSERVATION & RECYCLED MATERIALS
To the extent possible and practical, standard measures related to energy conservation, energy efficiency, water
conservation and the use of recycled materials have been incorporated herein. Gut rehabilitation or new
construction of residential buildings up to three stories will be designed to meet the standard for Energy Star
Qualified New Homes. Gut rehabilitation or new construction of mid or high rise multi -family housing must be
designed to meet the American Society of heating, Refrigerating and Air -Conditioning Engineers (ASHRAE)
Standard 90.1-2004, Appendix G plus 20 percent.
LEAD-BASED PAINT
All housing built before 1978 must comply with 24 CFR Part 35 Subpart J and HUD's Lead Safe Housing Rule
regarding the evaluation and control of lead-based paint hazards. HUD's guidelines are available at
http:(Lwww.hud.gov/offices/lead/Ibp/hudguidelines /index.cfm.
BUILDING STANDARDS
Minimum Standard • The site shall be hazard -free and sanitary.
• The site and all paving shall drain away from the dwelling and
accessory buildings, but not onto adjacent properties.
• Paving and walkways shall be hazard -free and intact.
• Landscaping and irrigation systems shall be hazard -free and in
° � I
Minimum Standard • Roofs shall be safe and structurally sound.
• Roof coverings shall be intact and watertight.
• Roofing metal and flashing shall be intact and rust free.
• Gutters and downspouts shall be intact and rust free.
• Roof coverings with five or less years of useful life shall be
replaced.
Rehabilitation Roofs that do not meet the minimum standard shall be replaced.
Practical, cost effective repairs are acceptable as long as compliance
with the minimum standard will be achieved.
• The replacement of roofing includes the replacement of all metal
(roof jacks and flashing).
• Gutters and downspouts shall be installed to properly discharge rain
water run-off.
Roof Coverings • 25 -year, 3 -tab, self-sealing composition shingle. Built-up
membrane (hot ino system on all flat roofs.
relatively good condition. All dead vegetation shall be removed.
• Fencing, walls and gates hazard -free and intact. All gates shall be
in good working order.
• The site shall be free from trash, debris and hazardous materials.
• Accessor buildin s shall be safe and sound.
Paving
• All new paving and walkways shall be constructed with concrete
(2,000 PSI @ 28 days).
• Driveways shall be reinforced with wire mesh. Sawn expansion -
contraction joints shall be placed every 8 feet in both directions.
• All paving and walkways shall be finished with a light broom
texture.
• All walkways shall be at least 3 feet wide. Sawn expansion -
contraction joints shall b 31aced every 4 feet.
Landscaping &
• To the extent possible and practical all new landscaping shall be
Irrigation
drought resistant.
• When a lawn is being replaced, the new lawn area shall be reduced
to aid in the reduction of water consumption.
• New irrigation controllers shall be weather or sensor based and EPA
Water -Sense qualified.
• All new irrigations stems shall be designed to conserve water.
_ _
Fences, Walls & Gates
All new wood fences shall be made from good quality materials.
They shall be properly supported with 4X4 pressure treated posts (8
feet O.C.) and 2X4 rails (top and bottom). The posts shall be embedded
in a concrete footing at least 18" deep.
• All new block walls shall be constructed with 6X8X16 concrete
block. They shall be properly supported by a continuous footing
and reinforced with steel bar.
° � I
Minimum Standard • Roofs shall be safe and structurally sound.
• Roof coverings shall be intact and watertight.
• Roofing metal and flashing shall be intact and rust free.
• Gutters and downspouts shall be intact and rust free.
• Roof coverings with five or less years of useful life shall be
replaced.
Rehabilitation Roofs that do not meet the minimum standard shall be replaced.
Practical, cost effective repairs are acceptable as long as compliance
with the minimum standard will be achieved.
• The replacement of roofing includes the replacement of all metal
(roof jacks and flashing).
• Gutters and downspouts shall be installed to properly discharge rain
water run-off.
Roof Coverings • 25 -year, 3 -tab, self-sealing composition shingle. Built-up
membrane (hot ino system on all flat roofs.
• Lighter colored coverin s are referred for ener efficienc .
Minimum Standard • Safe, structurally sound and waterti ht.
Rehabilitation • Decks, balconies and railing that do not meet the minimum standard
shall be replaced. Practical, cost effective repairs are acceptable as long
as compliance with the minimum standard will be achieved.
Finishes • Zero or low VOC primers, paint and coatines.
Minimum Standard • Safe and structurally sound.
Rehabilitation • Ext. steps, stairways and railing that do not meet the minimum
standard shall be replaced. Practical, cost effective repairs are
acceptable as long as compliance with the minimum standard will be
_ achieved.
Finishes Zero or low VOC primers, paint and coatines.
Minimum Standard • Safe and structurally sound. _
Rehabilitation • Foundations that do not meet the minimum standard shall be
replaced. Practical, cost effective repairs are acceptable as long as
compliance with the minimum standard will be achieved.
• If the project involves a gut rehab, raised foundations shall be
completely insulated.
Concrete • 2,000 --PSImum).
Minimum Standard • Safe, structurally sound and watert�ht. _
Rehabilitation • Exterior walls that do not meet the minimum standard shall be
replaced. Practical, cost effective repairs are acceptable as long as
compliance with the minimum standard will be achieved.
• If the project involves a gut rehab, all exterior walls shall be
insulated.
Minimum Standard •_ Safe, sound, weather -tight and in good working order.
Rehabilitation Exterior doors that do not meet the minimum standard shall be
replaced. Practical, cost effective repairs are acceptable as long as
compliance with the minimum standard will be achieved.
New Doors • EPA Enemy Star qualified, zero or low VOC finish.
New Hardware • Reputable manufacturer, lifetime finish.
Minimum Standard • Safe, sound and in good working order. Doors shall be
impermeable (primed and painted).
• Five or more years of practical utility.
Rehabilitation • Garage doors and openers that do not meet the minimum standard
shall be replaced. Practical, cost effective repairs are acceptable as
long as compliance with the minimum standard will be achieved.
Minimum Standard • Windows shall be safe, sound, weather -tight and in good working
order.
• Windows that can be opened shall have a tight -fitting insect screen.
• Five or more years of ractical utili
Rehabilitation • Windows that do not meet the minimum standard shall be replaced.
Practical, cost effective repairs are acceptable as long as compliance
with the minimum standard will be achieved.
New Windows Y Reputable manufacturer.
• EPA Energy Star qualified.
Minimum Standard • Homes built before 1978 must comply with 24 CFR Part 35 Subpart
J and HUD's Lead Safe Housing Rule regarding the evaluation and
control of lead-based paint hazards.
• All exterior paint shall be intact and free of corrosion.
• Five or more ears of practical utility. _
Rehabilitation • All surfaces to be painted shall be prepared properly. All loose
material and peeling paint shall be removed.
• All holes and cracks shall be filled and finished so that they blend
into the surrounding area.
• All stucco surfaces to be painted shall receive a complete and even
coverage of stucco paint.
• All wood surfaces to be painted shall receive a complete and even
coverage of flat exterior paint.
•_Poor workmanship will not be tolerated.
New Paint • Reputable manufacturer.
• Highest quality available.
• Zero or low VOC paint, caulking and fillers.
Minimum Standard • Safe and structurally sound.
• All plaster, drywall and aneling shall be safe and intact.
Rehabilitation • Walls and wall coverings that do not meet the minimum standard
shall be replaced. Practical, cost effective repairs are acceptable as long
as compliance with the minimum standard will be achieved.
0 If the project involves a gut rehab, the attic, walls and floor on
raised foundations shall be insulated
Minimum Standard • Safe, sound and sanitary.
• Five or more years of practical utility.
Rehabilitation • Floor coverings that do not meet the minimum standard shall be
replaced. Practical, cost effective repairs are acceptable as long as
compliance with the minimum standard will be achieved.
Replacement Floor • Carpet & Pad (Reputable manufacturer, recycled materials).
Coverings • Resilient Flooring (Reputable manufacturer, 10 year wear
warranty).
• Ceramic Tile (Reputable manufacturer
Minimum Standard • Homes built before 1978 must comply with 24 CPR Part 35 Subpart
J and HUD's Lead Safe Housing Rule regarding the evaluation and
control of lead-based paint hazards.
• All interior paint shall be intact and corrosion -free.
• Five or more years of practical utility.
Rehabilitation • All surfaces to be painted shall be prepared properly. All loose
material and peeling paint shall be removed.
• All holes and cracks shall be filled and finished so that they blend
into the surrounding area.
• All surfaces to be painted shall receive a complete and even
coverage of flat paint (semi -gloss in kitchens, bathrooms and laundry
rooms).
• Poor workmanship will not be tolerated.
New Paint • Reputable manufacturer.
• Highest quality available.
_ • Zero or low VOC paint, caulking and fillers.
Minimum Standard • Cabinets shall be safe, sound, sanitary and in good working order.
• Countertops shall be safe, sound, sanitary and watertight.
• Five or more years of practical utilitv.
Rehabilitation • Cabinets and countertops that do not meet the minimum standard
shall be replaced. Practical, cost effective repairs are acceptable as
long as compliance with the minimum standard will be achieved.
Replacement Cabinets • Reputable manufacturer.
• Solid hardwood face -frames, door -frames and drawer fronts.
• Metal and nylon drawer guides.
• Low or zero VOC adhesives and finishes.
Replacement • Reputable manufacturer.
Countertops • 4" ceramic tile, 6" backsplash, bull -nose edge•
t
Minimum Standard
•
Safe, sound, sanitary and in good working order.
•
Faucets shall (at a minimum) be equipped with a low -flow aerator.
•
Five or more ears of ractical utility.
Rehabilitation
•
Kitchen fixtures, equipment and appliances that do not meet the
minimum standard shall be replaced. Practical, cost effective
repairs are acceptable as long as compliance with the minimum
standard will be achieved.
Replacement Sinks
•
Reputable manufacturer.
•
18 -gee minimum) stainless steel.
_
Replacement Faucets
•
EPA Water -Sense qualified.
•
Reputable manufacturer.
•
Brass construction, metal housing.
Replacement Disposals
•
Reputable manufacturer.
•
%2 HP motor (minimum).
•
Stainless steel swivel lugs.
Replacement
•
EPA Energy Star qualified.
Dishwashers
•
Reputable manufacturer.
Replacement Range
•
EPA Energy Star qualified.
Hoods
•
Reputable manufacturer. m
Replacement Ranges
!
Reputable manufacturer.
•
Pilot -free ignition.
•
Four sealed burners.
•
Self-cleaning oven with timer.
Replacement Cook Tops
•
Reputable manufacturer.
•
Pilot -free ignition.
•
Four sealed burners.
Wall Ovens
•
Reputable manufacturer. ___ _ _ __
•
Pilot -free ignition.
•
Self cleanin og ven with timer.
Minimum Standard • Safe, sound, sanitary and in good working order.
•
Faucets shall (at a minimum) be equipped with a low -flow aerator.
•
Showerheads shall (at a minimum) be equipped with low -flow
aerator.
•
Porcelain sinks shall be free from any cracks or chips.
•
Steel sinks shall be free from any rust or corrosion.
•
Five or more years of practical utility.
Rehabilitation •
Bathroom fixtures and equipment that do not meet the minimum
standard shall be replaced. Practical, cost effective repairs are
acceptable as long as compliance with the minimum standard will
be achieved.
•
Toilets that require more than 1.6 GPF shall be replaced regardless
of
their condition.
Replacement Sinks •
Reputable manufacturer.
•
Cast iron, white enamel finish.
Replacement Faucets •
EPA Water -Sense qualified.
•
Reputable manufacturer.
•
Brass construction, metal housing.
Replacement Toilets •
Reputable manufacturer.
•
EPA Water -Sense qualified (1.28 GPF)
Replacement Tubs •
Reputable manufacturer. u_
•
Cast iron body, white enamel finish, slip resistant bottom.
•
EPA Water -Sense qualified plumbing fixtures.
Replacement •
Reputable manufacturer.
Combination •
Cast iron body, white enamel finish, slip resistant bottom.
Tub -Showers •
4" ceramic tile surround.
•
Anodized aluminum doors with tempered glass.
_ •
EPA Water -Sense qualified plumbinfixtures.
Replacement Showers !
Reputable manufacturer.
•
4" ceramic tile.
•
Anodized aluminum door with tempered glass.
•
EPA Water -Sens qualifiedplumbing fixtures.
_
Replacement •
Reputable manufacturer.
Medicine Cabinets •
Steel body, beveled mirror door.
_
Towel Bars & Toilet •
Reputable manufacturer.
Paper Holders •
Metal construction, Polished chrome finish.
Minimum Standard Safe, sound and leak -free.
RehabilitationPiping (supply, waste and vent) that does not meet the minimum
standard shall be replaced. Practical, cost effective repairs are
acceptable as long as compliance with the minimum standard will
be achieved.
Replacement�� _ • Copper, type "L".
Replacement Schedule 40 ABS.
Waste & Vent Pipine
Minimum Standard Safe, sound and in good working order.
• Five or more ears of ractical utility.
Rehabilitation Water heaters that do not meet the minimum standard shall be
replaced. Practical, cost effective repairs are acceptable as long as
compliance with the minimum standard will be achieved.
Replacement i Reputable manufacturer.
Water Heaters (Tank) • EPA Energy Star qualified.
• 40 -gallon insulated tank.
Replacement • Reputable manufacturer.
Water Heater • EPA Energy Star qualified.
(Tank -Less
Minimum Standard • Safe, sound and in good working order.
• 100 -ampere minimum service.
Rehabilitation • Electrical service panels, breakers and wiring that do not meet the
minimum standard shall be replaced. Practical, cost effective
repairs are acceptable as long as compliance with the minimum
standard will be achieved.
• Knob and tube wiring shall be replaced regardless of its condition.
• Overhead wiring from a dwelling to a detached garage or accessory
building shall be installed underground regardless of its condition.
Replacement • Reputable manufacturer.
Service • 100 -ampere (minimum).
Replacement • Romex (NM cable).
Minimum Standard • Safe, sound and in good working order.
• Light fixtures shall (at a minimum) be equipped with CFL bulbs.
• Exterior lighting fixtures used for security shall be equipped with a
_ motion sensor. _
Rehabilitation • Electrical switches, outlets and lighting fixtures that do not meet the
minimum standard shall be replaced. Practical, cost effective
repairs are acceptable as long as compliance with the minimum
standard will be achieved.
• All new light fixtures shall be U.L. approved and Energy Star
qualified.
• Outlets located within 6 feet of a source of water shall be eround
Minimum Standard
ii i i 11
•
i Hill ii ON
Safe, sound and in good working order.
•
Five or more ears of practical utility.
Rehabilitation
•
HVAC that does not meet the minimum standard shall be replaced.
Practical, cost effective repairs are acceptable as long as compliance
with the minimum standard will be achieved.
•
Tune-up all HVAC equipment (as a minimum).
•
Seal all ducts (as a minimum).
•
All new HVAC equipment shall be sized pro2erly.
Furnaces
•
Reputable manufacturer.
•
EPA Enemy Star qualified.
Central Air
•
Reputable manufacturer.
Conditioners
•
EPA Energy Star qualified.
Thermostats
•
Reputable manufacturer.
•
EPA Energy Star qualified.
•
Programmable.
Minimum Standard • Additions and alterations that were constructed without a building
permit and are clearly substandard shall be removed.
• Garages converted to living quarters shall be returned to their
original use.
• Additions and alterations that were constructed without a building
permit, but appear to be compliant, shall be inspected by the City's
Building Official to determine if a building permit can be issued
and they can be saved.
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN 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
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
NO FEE
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201700041583612:07 pm 09129117
175 415 R29 C38 30
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SPACE ABOVE THIS LINE FOR RECORDING USE
FREE RECORDING REQUESTED
[Government Code Section 4103}
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AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
(8 10 S. Minnie Street, Santa Ana)
THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF
PROPERTY (the "Restrictions") are entered into as of September 27, 2017, by and among
and Wakeham — Grant Apartments, LP, (referred to herein as the "Developer") a
California limited partnership, the City of Santa Ana, a charter city and municipal
corporation (the "City").
RECITALS:
A. Developer is the owner of that certain real property located at 810 S. Minnie
Street, (the "Property") located in the City of Santa Ana more particularly described in
Exhibit A' ;which is attached hereto and incorporated herein by this reference.
B. For the purpose of providing ten (10) units of housing that will be affordable to
Extremely -Low and Very -Low households ("Assisted Units"), the Developer and the City
have entered into that certain Loan Agreement, dated on or about the date hereof (the
"Loan Agreement") to which these Restrictions are attached as Exhibit G; which, along
with all of its attachments, is incorporated herein by this reference (any capitalized term
that is not otherwise defined in these Restrictions shall have the meaning ascribed to such
term in the Loan Agreement).
C. The Loan Agreement provides, among other things, for the use of the Property
for affordable housing with all Assisted Units being restricted to Extremely -Low and
Very -Low households, at Affordable Rent(s).
D. 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 and Very -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 and Very -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. Developer agrees and covenants, which covenants shall run with the land and bind
Developer, its successors, its assign and every successor in interest to the Property that
Developer will make all rental units on the Property available to extremely low and very low
households at rents affordable to such households for fifty-five (55) years from the effective
date of this Agreement. The HOME restrictions for the ten (10) HOME assisted units shall
be enforced until the date that is five (5) years after the date on which the City reports the
Project as complete to the Department of Housing and Urban Development. Upon expiration
of the 5 year HOME compliance period, the City will enforce affordability of the ten (10)
HOME assisted units) with the same income and rent restrictions as the other units, pursuant
to City guidelines and the California Health and Safety Code. The City permits the Developer
to limit the eligibility and/or give preference to a particular segment of the population in
accordance with 24 CFR 92.253(d).
B. The Project shall consist of seventeen (17) One -Bedroom units. There shall be ten
(10) HOME assisted units. The HOME assisted units shall be fixed units with comparable
amenities to the other units (Units 810-02, 810-03, 810-04, 810-05, 810-06, 810-07, 810-10,
810-12, 810-14, and 810-16). The affordability mix for the Project is as follows:
Unit Type
AMI Level
# of Units
One -Bedroom
50 %AMI
10
C. At initial lease up, households in the HOME assisted units cannot earn more than
50% of AMI, however existing tenants at the Property who are otherwise eligible under
the HOME Program may continue their tenancy at the Property. Rental increases shall be
in conformance with federal and state law. After the five (5) year HOME compliance
period, the City shall require that the units remain affordable, with rents calculated based
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on assumed household size at the same income levels, as required by the California Health
& Safety Code.
D. All of the HOME units will be restricted to occupancy by fifty percent (50%) of the Area
Median Income (AMI). Current residents whose incomes exceed eighty percent (801/o) of the
AMI will be allowed to remain. Rents for these households will be increased to either thirty
(30%) percent of their monthly household income or market rent for the neighborhood,
whichever is lower.
E. Affordable rents shall be governed by California Health and Safety Code Sections
50052.5 and 50053(b)(1), and as provided in the HOME Regulations 24 CFR section 92.252.
Rents During Construction/Rehabilitation:
(a) All HOME units shall be charged the Low HOME rent, as amended from time to
time (currently $978 for One -Bedroom unit).
3.2 Affordable Gross Startine Rents (Less Reasonable Utility Allowance): 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. Rents for non -HOME assisted units will be based on the rents
published annually by California Tax Credit Allocation Committee (TCAC).
A. HOME Assisted Units
# of Units Max Gross Monthly Rent
Very Low l Bedroom 10 $ 978
(1) In no event shall the rent charged to the tenant of the HOME assisted units be
more than that amount of the low rent as published by HUD, as amended from time to
time.
(2) Utility allowances must be deducted from the Maximum Gross Monthly Rent.
The Housing Authority of the City of Santa Ana publishes the Utility Allowance
Schedule.
(3) At the time of project completion, the Developer shall provide to the City the
address and/or unit number of each of the HOME assisted units.
(4) Annually with the financial statements, the Developer shall provide an annual
report of rents and occupancy of assisted units, including HOME -assisted units, to
verify compliance with affordability requirements. For the HOME units, information
on unit substitution and filling vacancies shall be provided to ensure that the project
maintains the required unit mix.
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3.3 Rent Increases: On an annual basis, the City shall provide the Developer with the
maximum allowable schedule of rents for the Property. In no event can Developer charge
any tenant more than such amount.
4. Developer, its successors and assigns shall not charge rents for the Units in
excess of the amounts set forth herein, as adjusted on the basis of the revised schedules of
area median incomes issued from tune -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 11 below), written tenant selection policies and criteria for the Units,
that meet the following requirements:
(a) Are consistent with the purpose of providing housing for Extremely
Low and Very Low Income households;
(b) Are reasonably related to program eligibility and the applicants'
ability to perform the obligations of the lease;
(c) 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);
(d) Provide for:
(i) The selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable; and
(ii) The prompt written notification to any rejected applicant of
the grounds for any rejection;
(e) Provide first priority in the selection of qualified eligible tenants to
households that are referred by the City; and
(f) 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.
Developer shall cooperate with the City to effectuate this provision prior to the initial
renting, or upon occurrence of a vacancy, and the re -renting of any Assisted Units (24
CFR 92.351)
6. Developer, its successors and assigns, shall not refuse to lease a unit to a
holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or
to a holder of a comparable document evidencing participation in a HOME 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 HOME tenant -based
assistance document. Total rents charged to such tenants, including the tenant
contribution and rental assistance, shall not exceed the allowable rents as described above.
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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):
(a) 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;
(b) 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;
(c) 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;
(d) Agreement of the tenant that the owner may institute a lawsuit
without notice to the tenant;
(e) 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;
(f) Agreement by the tenant to waive any right to a trial by jury;
(g) 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
(h) 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.
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
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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 five (5) business days prior to the execution of the
documents, Developer shall submit to the Executive Director a Management Plan in a
form that is reasonably 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 Closing. Developer shall manage the
Assisted 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:
(a) 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. The City hereby approves the John Stewart
Company as the initial Management Agent.
(b) 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.
(c) Annual Budget and Projected Cash Flows Prior to the Close of
Loan, and annually thereafter not later than ninety (90) days after the close of each
calendar year thereafter, Developer shall submit a projected operating budget and cash
flow to the Executive Director. The budget and cash flow shall be in a form that is
reasonably acceptable to the Executive Director.
(d) Tenant Selection Policies. Developer shall include in the
Management Plan the tenant selection policies in accordance with Section 4, 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 thirty (30) days
(or such longer period as may be reasonably necessary to effect such cure by the City),
with the exception of HOME regulations that require a shorter period, 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
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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. Within ten (10) 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 reasonably satisfactory to the
Executive Director or designee for continuing management of the units.
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 fifty-five (55) years.
In its reasonable discretion, the City may defer repayment of the HOME Loan or the City
may agree to such reasonable modifications to the requirements of these Restrictions, as
the City reasonably determines are necessary for the continued maintenance and operation
of the Assisted Units. The covenants against discrimination shall remain in effect for the
period of these Restrictions.
14. Developer shall not request disbursement of HOME funds until the finds
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)].
15. 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):
a. Annual Reports. Developer shall file with the City an Annual Report
(herein referred to as the "Annual Report") within one hundred twenty (120) days
following the end of each calendar year, commencing with the end of the calendar year (or
portion thereof) in which the Close of Loan occurs. The Annual Report shall contain a
certification by Developer as to such information as the City Executive Director may then
reasonably require, including, but not limited to, the following:
(1) The fiscal condition of the Project, including the Annual Budget and
Project Cash Flow report required by Section 11 (c) of the Affordable Housing
Restrictions which shall include a financial statement for the previous calendar year that
includes a balance sheet and a profit and loss statement 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.
(2) 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.
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(3) The occupancy of the units indicating the income of each current
HOME assisted unit 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 under the HOME Program.
(4) General management performance, including tenant relations and
other relevant information.
(5) Records that demonstrate that the units meet the affordability
requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and
Safety Code, for the required period of affordability according to section 33334.3 of the
California Health and Safety Code.
(6) Evidence of a currently paid hazard insurance policy in accordance
with the requirements of Section 6 of the City/HOME 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.
(7) 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.
(8) Termite reports pertaining to the Property every fifth (5th) year.
(9) Such other information as may be reasonably required by the
Executive Director or his/her designee.
b. Records and Audits. Developer shall maintain the following general
program records, and make them available for inspection by the City, the State or HUD:
(1) records which demonstrate that the HOME assisted units meet the
standard specified in 24 CFR 92.251;
(2) records, for each HOME Assisted Unit, which demonstrates that the
project meets the requirements of 24 CFR 92.252.
(3) records which demonstrate compliance with the tenant and
participant protections, as specified in 24 Section 29.253 for the HOME assisted units;
(4) records which demonstrate compliance with the Equal Opportunity
and Fair Housing requirements outlined in these Restrictions, including:
(A) data on the extent to which each racial and ethnic group and
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single head of household (by gender of head of household) have applied for, participated
in, or benefited from, any program or activity funded in whole or in part with HOME
funds;
(B) 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);
(C) 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;
(5) documentation of the steps taken to carry out an affirmative
marketing program in accordance with 24 CFR 92.351, if applicable;
(6) 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 Close of Loan
(i.e., the date on which Developer closes funding of the CHDO loan);
(7) records concerning lead-based paint in accordance with 24 CFR
92.355;
(8) if applicable, records which support any requests for waivers of the
conflict of interest prohibition as stated in 24 CFR 92.356;
(9) 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
(10) any other reports issued by other monitoring agencies.
c. All records for the HOME assisted units pertaining to each calendar year of
HOME funds
must be retained for the most recent five year period, except that for rental housing
projects, records may be retained for five years after the project completion date; except
that records of individual tenant income verifications, project rents and project inspections
must be retained for the most recent five year period, until five years after the affordability
period terminates (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, 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.
9of12
d. 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.
e. All records, accounts, documentation and other materials relevant to the
Project shall be reasonably 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.
f 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.
16. 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. The City shall
have the right if the covenants are breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce the
curing of such breaches to which they or any other beneficiaries of these Restrictions and
covenants are entitled.
17. 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 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.
is. The Loan Agreement and all of its attachments shall be enforceable by
City in accordance with the terns thereof. Each of the Loan Agreement, the Affordability
Restrictions on Transfer of Property, the City/HOME Loan Note and the City/HOME
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)].
10 of 12
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:
i ---)
Maria D. Auizar
Clerk of the Council
APPROVED AS TO FORINT
Sonia R. Carvalho
FOR APPROVAL:
RertM. Zur Sch ie
Acting Executive
Community Development Agency
CITY OF SANTA ANA
c r
ynthia J. Kurtz
Interim City Manager
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WAKEHAM-GRANT APARTMENTS LP, a California Limited Partnership
MANAGING GENERAL PARTNER
By: JHC-Cornerstone LLC
a California Limited liability company
MANAGING MEMBER
JAMBOREE HOUSING CORPORATION
a California non-profit Public benefit corporation
By:
Laura Archuleta,, President
Dated: fit 1 1717 ( 17
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 September 28. 2017 before me, Rosa A. Flores, Notary Public
(insert name and title of the officer)
personally appeared Cynthia J. Kurtz who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(g) 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/heF/V:reir
signature(g) on the instrument the person(a)s or the entity upon behalf of which the person,*racted,
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. ftOsn A. FLOItEs
commission # 2057129
Notary Public • California s
Orange County
M Comm. Ex ires Feb 7, 2018'
Signature Q (Seal)
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 9.27.17
before me, R.L. deCordova-Brittain, Notary Public
(insert name and title of the officer)
personally appeared Laura Archuleta
who proved to me on the basis of satisfactory evidence to be the personXwhose name(N�ls/arre—
subscribed to the within instrument and acknowledged to me that helshe/they executed the same in
Elis/her/their authorized capacity les), and that by hislher/theix signature(s) on the instrument the
person(s), or the entity upon behalf of which the persons 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.
06
R. L. DECORDOVA-BRITTAIN
WITNESS m hand and offi iql seal. Notary Dubuc - Coulilnty rnta
Y & ; =r Orange County
z Commission # 2177359
r M Camm. Ex ires Dec 26, 2020
Exhibit A
PROPERTY DESCRIPTION
OWNER: Wakeham — Grant Apartments LP
PROJECT ADDRESS: 810 S. Minnie Street
Legal Description:
LOTS 1 AND 2, INCLUSIVE OF TRACT NO.3547, IN THE CITY OF SANTA ANA,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED
IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
Affordability
Transfer of Property
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN 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
SPACE ABOVE THIS LINE FOR RECORDING USE
FREE RECORDING REQUESTED
[Government Code Section 6103]
AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
(8 10 S. Minnie Street, Santa Ana)
THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF
PROPERTY (the "Restrictions") are entered into as of September 27, 2017, by and among
and Wakeham — Grant Apartments, LP, (referred to herein as the "Developer") a
California limited partnership, the City of Santa Ana, a charter city and municipal
corporation (the "City").
RECITALS:
A. Developer is the owner of that certain real property located at 810 S. Minnie
Street, (the "Property") located in the City of Santa Ana more particularly described in
Exhibit A, which is attached hereto and incorporated herein by this reference.
B. For the purpose of providing ten (10) units of housing that will be affordable to
Extremely -Low and Very -Low households ("Assisted Units"), the Developer and the City
have entered into that certain Loan Agreement, dated on or about the date hereof (the
"Loan Agreement") to which these Restrictions are attached asExhibit G, which, along
with all of its attachments, is incorporated herein by this reference (any capitalized term
that is not otherwise defined in these Restrictions shall have the meaning ascribed to such
term in the Loan Agreement).
C. The Loan Agreement provides, among other things, for the use of the Property
for affordable housing with all Assisted Units being restricted to Extremely -Low and
Very -Low households, at Affordable Rent(s).
D. 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 and Very -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 and Very -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. Developer agrees and covenants, which covenants shall run with the land and bind
Developer, its successors, its assign and every successor in interest to the Property that
Developer will make all rental units on the Property available to extremely low and very low
households at rents affordable to such households for fifty-five (55) years from the effective
date of this Agreement. The HOME restrictions for the ten (10) HOME assisted units shall
be enforced until the date that is five (5) years after the date on which the City reports the
Project as complete to the Department of Housing and Urban Development. Upon expiration
of the 5 year HOME compliance period, the City will enforce affordability of the ten (10)
HOME assisted units) with the same income and rent restrictions as the other units, pursuant
to City guidelines and the California Health and Safety Code. The City permits the Developer
to limit the eligibility and/or give preference to a particular segment of the population in
accordance with 24 CFR 92.253(d).
B. The Project shall consist of seventeen (17) One -Bedroom units. There shall be ten
(10) HOME assisted units. The HOME assisted units shall be fixed units with comparable
amenities to the other units (Units 810-02, 810-03, 810-04, 810-05, 810-06, 810-07, 810-10,
810-12, 810-14, and 810-16). The affordability mix for the Project is as follows:
Unit Type
AMI Level
# of Units
One -Bedroom
50 %AMI
10
C. At initial lease up, households in the HOME assisted units cannot earn more than
50% of AMI, however existing tenants at the Property who are otherwise eligible under
the HOME Program may continue their tenancy at the Property. Rental increases shall be
in conformance with federal and state law. After the 'five (5) year HOME compliance
period, the City shall require that the units remain affordable, with rents calculated based
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on assumed household size at the same income levels, as required by the California Health
& Safety Code.
D. All of the HOME units will be restricted to occupancy by fifty percent (50%) of the Area
Median Income (AMD. Current residents whose incomes exceed eighty percent (80%) of the
AMI will be allowed to remain. Rents for these households will be increased to either thirty
(30%) percent of their monthly household income or market rent for the neighborhood,
whichever is lower.
E. Affordable rents shall be governed by California Health and Safety Code Sections
50052.5 and 50053(b)(1), and as provided in the HOME Regulations 24 CFR section 92.252.
F. Rents During Construction/Rehabilitation:
(a) All HOME units shall be charged the Low HOME rent, as amended from time to
time (currently $978 for One -Bedroom unit).
3.2 Affordable Gross Starting Rents (Less Reasonable Utility Allowance): 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. Rents for non -HOME assisted units will be based on the rents
published annually by California Tax Credit Allocation Committee (TCAC).
A. HOME Assisted Units
# of Units Max Gross Monthly Rent
Very Low 1 Bedroom 10 $ 978
(1) In no event shall the rent charged to the tenant of the HOME assisted units be
more than that amount of the low rent as published by HUD, as amended from time to
time.
(2) Utility allowances must be deducted from the Maximum Gross Monthly Rent.
The Housing Authority of the City of Santa Ana publishes the Utility Allowance
Schedule.
(3) At the time of project completion, the Developer shall provide to the City the
address and/or unit number of each of the HOME assisted units.
(4) Annually with the financial statements, the Developer shall provide an annual
report of rents and occupancy of assisted omits, including HOME -assisted units, to
verify compliance with affordability requirements. For the HOME units, information
on unit substitution and filling vacancies shall be provided to ensure that the project
maintains the required unit mix.
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3.3 Rent Increases: On an annual basis, the City shall provide the Developer with the
maximum allowable schedule of rents for the Property. In no event can Developer charge
any tenant more than such amount.
4. Developer, its successors and assigns shall not charge rents for the 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 11 below), written tenant selection policies and criteria for the Units,
that meet the following requirements:
(a) Are consistent with the purpose of providing housing for Extremely
Low and Very Low Income households;
(b) Are reasonably related to program eligibility and the applicants'
ability to perform the obligations of the lease;
(c) 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);
(d) Provide for:
(i) The selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable; and
(ii) The prompt written notification to any rejected applicant of
the grounds for any rejection;
(e) Provide first priority in the selection of qualified eligible tenants to
households that are referred by the City; and
(f) 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.
Developer shall cooperate with the City to effectuate this provision prior to the initial
renting, or upon occurrence of a vacancy, and the re -renting of any Assisted Units (24
CFR 92.351).
6. Developer, its successors and assigns, shall not refuse to lease a unit to a
holder of a rental voucher Linder 24 CFR part 887 (Housing Choice Voucher Program) or
to a holder of a comparable document evidencing participation in a HOME 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 HOME tenant -based
assistance document. Total rents charged to such tenants, including the tenant
contribution and rental assistance, shall not exceed the allowable rents as described above.
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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):
(a) 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;
(b) 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;
(c) 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;
(d) Agreement of the tenant that the owner may institute a lawsuit
without notice to the tenant;
(e) 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;
(f) Agreement by the tenant to waive any right to a trial by jury;
(g) 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
(h) 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.
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
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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 five (5) business days prior to the execution of the
documents, Developer shall submit to the Executive Director a Management Plan in a
form that is reasonably 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 Closing. Developer shall manage the
Assisted 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:
(a) 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. The City hereby approves the John Stewart
Company as the initial Management Agent.
(b) 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.
(c) Annual Budget and Projected Cash Flows Prior to the Close of
Loan, and annually thereafter not later than ninety (90) days after the close of each
calendar year thereafter, Developer shall submit a projected operating budget and cash
flow to the Executive Director. The budget and cash flow shall be in a form that is
reasonably acceptable to the Executive Director.
(d) Tenant Selection Policies Developer shall include in the
Management Plan the tenant selection policies in accordance with Section 4, 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 thirty (30) days
(or such longer period as may be reasonably necessary to effect such cure by the City),
with the exception of HOME regulations that require a shorter period, 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
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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. Within ten (10) days following a direction of the Executive Director to replace
the management agent in accordance with the terns hereof, the Developer shall select
another management agent or make other arrangements reasonably satisfactory to the
Executive Director or designee for continuing management of the units.
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 fifty-five (55) years.
In its reasonable discretion, the City may defer repayment of the HOME Loan or the City
may agree to such reasonable modifications to the requirements of these Restrictions, as
the City reasonably determines are necessary for the continued maintenance and operation
of the Assisted Units. The covenants against discrimination shall remain in effect for the
period of these Restrictions.
14. Developer shall not request disbursement of HOME 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)(10A.
15. 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):
a. Annual Reports. Developer shall file with the City an Annual Report
(herein referred to as the "Annual Report") within one hundred twenty (120) days
following the end of each calendar year, commencing with the end of the calendar year (or
portion thereof) in which the Close of Loan occurs. The Annual Report shall contain a
certification by Developer as to such information as the City Executive Director may then
reasonably require, including, but not limited to, the following:
(1) The fiscal condition of the Project, including the Annual Budget and
Project Cash Flow report required by Section 11 (c) of the Affordable Housing
Restrictions which shall include a financial statement for the previous calendar year that
includes a balance sheet and a profit and loss statement 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.
(2) 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.
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(3) The occupancy of the units indicating the income of each current
HOME assisted unit 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 under the HOME Program.
(4) General management performance, including tenant relations and
other relevant information.
(5) Records that demonstrate that the units meet the affordability
requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and
Safety Code, for the required period of affordability according to section 33334.3 of the
California Health and Safety Code.
(6) Evidence of a currently paid hazard insurance policy in accordance
with the requirements of Section 6 of the City/HOME 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.
(7) 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.
(8) Termite reports pertaining to the Property every fifth (5t1') year.
(9) Such other information as may be reasonably required by the
Executive Director or his/her designee.
b. Records and Audits. Developer shall maintain the following general
program records, and make them available for inspection by the City, the State or HUD:
(1) records which demonstrate that the HOME assisted units meet the
standard specified in 24 CFR 92.251;
(2) records, for each IIOME Assisted Unit, which demonstrates that the
project meets the requirements of 24 CFR 92.252.
(3) records which demonstrate compliance with the tenant and
participant protections, as specified in 24 Section 29.253 for the HOME assisted units;
(4) records which demonstrate compliance with the Equal Opportunity
and Fair Housing requirements outlined in these Restrictions, including:
(A) data on the extent to which each racial and ethnic group and
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single head of household (by gender of head of household) have applied for, participated
in, or benefited from, any program or activity funded in whole or in part with HOME
funds;
(B) 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);
(C) 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;
(5) documentation of the steps taken to carry out an affirmative
marketing program in accordance with 24 CFR 92.351, if applicable;
(6) 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 Close of Loan
(i.e., the date on which Developer closes funding of the CHDO loan);
92.355; (7) records concerning lead-based paint in accordance with 24 CFR
(8) if applicable, records which support any requests for waivers of the
conflict of interest prohibition as stated in 24 CFR 92.356;
(9) 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
(10) any other reports issued by other monitoring agencies.
C. All records for the HOME assisted units pertaining to each calendar year of
HOME fonds
must be retained for the most recent five year period, except that for rental housing
projects, records may be retained for five years after the project completion date; except
that records of individual tenant income verifications, project rents and project inspections
must be retained for the most recent five year period, until five years after the affordability
period terminates (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, 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.
9of12
d. 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.
e. All records, accounts, documentation and other materials relevant to the
Project shall be reasonably 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.
f. 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.
16. 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. The City shall
have the right if the covenants are breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce the
curing of such breaches to which they or any other beneficiaries of these Restrictions and
covenants are entitled.
17. 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 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.
18. The Loan Agreement and all of its attachments shall be enforceable by
City in accordance with the teens thereof. Each of the Loan Agreement, the Affordability
Restrictions on Transfer of Property, the City/HOME Loan Note and the City/HOME
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 ruining with the land [24 CFR 92.504 (c) (13)].
10 of 12
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:
Maria D. Hlaizar
Clerk of the Council
APPROVED AS TO FORM
Sonia R. Carvalho
RECOMMENDED FOR APPROVAL:
RobertM. Zru Sclu ie
Acting Executive
Community Development Agency
CITY OF SANTA ANA
/Cynthia J. Kurtz ^�
Interim City Manager
11 of 12
WAKEHAM-GRANT APARTMENTS LP, a California Limited Partnership
MANAGING GENERAL PARTNER
By: JHC-Cornerstone LLC
a California Limited liability company
MANAGING MEMBER
JAMBOREE HOUSING CORPORATION
a California non-profit Public benefit corporation
By:
Laura Archuleta{, President j
Dated: c(, 1'7,7 t L 7
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 September 28 2017 before me, Rosa A Flores Notary Public
(Insert name and title of the officer)
personally appeared Cynthia J. Kurtz who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(g) isaare subscribed to the within instrument and acknowledged to me
that heishe/they executed the same in-his/her/their authorized capacity(ies), and that by his/heFAIheir
signature(s) on the instrument the person(sj; or the entity upon behalf of which the person( acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
ROSA A. FLORES
Commission # 2057129
�? Notary Public • California z
Orange County >
/ M Comm. Ex fres Feb 7, 2018 [
Signature �C� Q ` til (Seal)
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
9.27.17
before me, R.L. deCordova-Brittain, Notary Public
(insert name and title of the officer)
personally appeared Laura Archuleta
who proved to me on the basis of satisfactory evidence to be the person whose name(§�is/gre—
subscribed to the within instrument and acknowledged to me that hel-she/they executed the same in
his/her/their authorized capacity les), and that by his/.her/their: signature(s) on the instrument the
person(s) or the entity upon behalf of which the person(€,), acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct. yyyaaa...���sss
R. L. DECORDOVA-BRITTAIN
WITNESS m hand and offi ' 1 seal. Notary Public - County California z
Y a : =o Orange County
z ` Commission # 2177359
�f� �� �� �
My Comm. Expires Dec'L6, 2g2C
Recorded in Official Records, Orange County r'>"
Hugh Nguyen, Clerk -Recorder
III[111111[111111111111[1111111[I[I11111I11111[1111111111[1111111111111 NO FEE
*$ R 0 0 0 9 5 9 8 4 0 2$
201700041585612:13 pm 09129117
175 415 D11 A36 10
0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail to:
7
77City
of Santa Ana
Clerk of the Council
/ op
20 Civic Center Plaza (M-30)
Alf
/�
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk ofthe Council
CITY DEED OF TRUST
AND ASSIGNMENT OF RENTS
(810 S. Minnie Street, Santa Ana)
THIS CITY DEED OF TRUST AND ASSIGNMENT OF RENTS (the "City Deed
of Trust") made this 27t" day of September, 2017 by Wakeham — Grant Apartments LP, a
California limited partnership (the "Trustor"), AMERINAT., a Minnesota corporation (the
"Trustee"), and the City of Santa Ana, a charter city and municipal corporation (the
'Beneficiary").
Trustor, in consideration of the promises herein recited and the trust herein created,
irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the
property located in the City of Santa Ana, County of Orange, State of California, described
in the attached Exhibit Nand more commonly known as 810 S. Minnie Street, Santa Ana
(the "Property");
TOGETHER with all the improvements now or hereafter erected on the Property,
and all easements, rights, appurtenances and all fixtures now or hereafter attached to the
Property, all of which, including replacements and additions thereto, shall be deemed to be
and remain apart of the Property covered by this City Deed of Trust;
TOGETHER with the right, power and authority during the continuance of these
Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Trustor the
right, prior to any default by Trustor in payment of the indebtedness secured by this City
Deed of Trust or in the performance of any agreement under this City Deed of Trust, to
collect and retain these rents, issues and profits as they become due and payable; and,
TOGETHER with all articles of personal property or fixtures now or hereafter
attached to or used in and about the building or buildings now erected, or hereafter to be
erected, on the Property which are necessary to the complete and comfortable use and
occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one
herein described and referred to, and all renewals or replacements thereof or articles in
substitution therefor, whether or not the same are, or shall be attached to said building or
buildings in any manner; and all of the foregoing, together with the Property, is herein
referred to as the "Security";
To have and to hold the Security together with acquittances to the Trustee, its
successors and assigns forever;
TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by a
promissory note to the Beneficiary executed by Trustor of even date herewith in the
principal amount of ninety-three thousand, thirty-two dollars ($93,032) (the "City Loan
Note"); (b) the performance of the covenants and agreements of Borrower contained in a
certain Loan Agreement as hereinafter defined; and (c) the payment of all other sums, with
interest thereon, advanced in accordance herewith to protect the security of this City Deed of
Trust; and the performance of the covenants and agreements of Trustor contained herein.
TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS:
1. The Loan Agreement. This City Deed of Trust is executed and delivered,
along with the City Loan Note and the Loan Agreement, to benefit the Property. A copy of
said Loan Agreement is on file as a public record with the Beneficiary and is incorporated
herein by reference (the "Agreement"). Trustor acknowledges that but for the execution of
this City Deed of Trust, the Beneficiary would not enter into the Agreement or City Loan
Note secured by this City Deed of Trust.
2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and
has the right to grant and convey the Security; that other than this City Deed of Trust, the
Security is not encumbered except for obligations secured by deeds of trust, or any other
security agreement, to secure financing or refinancing for the purchase and rehabilitation of
the Property.
3. Repayment of the Loan. Trustor will promptly repay, when due, the
principal and interest, as required by the City Loan Note secured by this City Deed of Trust.
4. Subordination. This obligation secured by this City Deed of Trust shall be
subordinated to the Senior Loan and to the City Deed of Trust and Note.
5. Prior Mortgages and Deeds of Trust; Charges; Liens. Trustor shall perform
all of Trustor's obligations under any mortgage, deed of trust or other security agreement
with a lien which has priority over this Instrument, including Trustor's covenants to make
payments when due (subject to an applicable notice and cure provisions). Trustor will pay
all taxes, assessments and other charges, fines and impositions attributable to the Security
which may attain a priority over this Deed of Trust, by Trustor making any payment, when
due, directly to the payee thereof. Trustor will promptly furnish to the Beneficiary all
notices of amounts due under this paragraph, and in the event Trustor makes payment
directly, Trustor will promptly discharge any lien which has priority over this Deed of Trust;
provided that Trustor will not be required to discharge the lien of the Deed of Trust securing
any senior lender or any other lien described in this paragraph so long as Trustor will agree
in writing to the payment of the obligation secured by such lien in a manner acceptable to
the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such
lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture
of the Security or any part thereof.
6. Hazard Insurance. Trustor will keep the Security insured by such insurance
policies in such amounts and for such periods as called for in the Agreement. All insurance
policies and renewals thereof will include a standard mortgagee clause with standard
lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their
interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall
have the right to hold, or cause its designated agent to hold, the policies and renewals
thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the
original insurance policies or certificates of insurance, all renewal notices and all receipts of
paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier
and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may
make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days
advance notice of cancellation of any insurance policies required under this Section.
Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds,
subject to the rights of any senior lender, will be applied to restoration or repair of the
Security damaged, provided such restoration or repair is economically feasible and the
security of this City Deed of Trust is not thereby impaired. If such restoration or repair is
not economically feasible or if the security of this City Deed of Trust would be impaired,
again, subject to the rights of any senior lender, the insurance proceeds will be used to repay
the loan secured by this Deed of Trust, with the excess, if any, paid to Trustor. If the
Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its
designated agent within 30 days from the date notice is mailed by either of them to Trustor
that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its
designated agent, is authorized to collect and apply the insurance proceeds at the
Beneficiary's option either to restoration or repair of the Security or to repay the loan.
If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in
and to any insurance policy and in and to the proceeds thereof resulting from damage to the
Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums
secured by this City Deed of Trust immediately prior to such sale or acquisition subject to
the rights of any senior lender.
7. Preservation and Maintenance of Security. Trustor will keep the Security in
good repair and will not commit waste or permit impairment or deterioration of the Security.
8. Protection of the Beneficiary's Security. If Trustor fails to perform the
covenants and agreements contained in this City Deed of Trust or if any action or
proceeding is commenced which materially affects the Beneficiary's interest in the Security,
including, but not limited to, default under the City Deed of Trust securing any senior
lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon
notice to Trustor, may make such appearances, disburse such sums and take such action as it
determines necessary to protect the Beneficiary's interest, including, but not limited to,
disbursement of reasonable attorneys' fees and entry upon the Security to make repairs.
Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest
thereon, will become an indebtedness of Trustor secured by this City Deed of Trust. Unless
Trustor and the Beneficiary agree to other terms of payment, such amount will be payable
upon notice from the Beneficiary to Trustor requesting payment thereof, and will bear
interest from the date of disbursement at the rate payable from time to time on outstanding
principal under the City Loan Note unless payment of interest at such rate would be contrary
to applicable law, in which event such amounts will bear interest at the highest rate
permissible under applicable law. Nothing contained in this paragraph will require the
Beneficiary to insure any expense or take any action hereunder.
9. Inspection. The Beneficiary may make, or cause to be made, reasonable
entries upon and inspections of the Security during normal business hours; provided that the
Beneficiary will give Trustor reasonable notice of inspection.
10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the
Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any
such right or remedy. The procurement of insurance or the payment of taxes or other liens
or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the
maturity of the indebtedness secured by this City Deed of Trust.
11. Remedies Cumulative. All remedies provided in this City Deed of Trust are
distinct and cumulative to any other right or remedy under this City Deed of Trust or any
other document, or afforded by law or equity, and may be exercised concurrently,
independently or successively.
12. Successors and Assigns Bound. The covenants and agreements herein
contained shall bind, and the rights hereunder shall inure to, the respective successors and
assigns of the Beneficiary and Trustor subject to the provisions of this City Deed of Trust.
13. Joint and Several Liability. All covenants and agreements of Trustor shall be
joint and several.
14. Notice. Except for any notice required under applicable law to be given in
another manner, (a) any notice to Trustor provided for in this City Deed of Trust will be
given by certified mail, return receipt requested, addressed to Trustor at 17701 Cowan Ave
#200, Irvine, CA 92614 (b) any notice to the Beneficiary will be given by certified mail,
return receipt requested, to the Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa
Ana, California 92702, Attention: Housing Division Manager, or at such other address as
the Beneficiary may designate by notice to Trustor as provided above, and (c) to Trustee at
8121 E. Florence Avenue, Downey, California 90240. Notice shall be effective as of the
date received as shown on the return receipt.
15. Governing Law. This City Deed of Trust shall be governed by the laws of
the State of California.
16. Severability. In the event that any provision or clause of this City Deed of
Trust or the City Loan Note conflicts with applicable law, such conflict will not affect other
provisions of this City Deed of Trust or the City Loan Note which can be given effect
without the conflicting provision, and to this end the provisions of the City Deed of Trust
and the City Loan Note are declared to be severable.
17. Ca tp ions. The captions and headings in this City Deed of Trust are for
convenience only and are not to be used to interpret or define the provisions hereof.
18. Default in Foreclosure: Remedies. Upon Trustor's breach of any covenant or
agreement of Trustor in this City Deed of Trust or the City Loan Note secured by this City
Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums
secured by this City Deed of Trust, the Beneficiary may declare all sums secured by this
City Deed of Trust immediately due and payable by delivering to Trustor notice thereof
specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less
than 30 days from the date the notice is received by Trustor as shown on the return receipt,
by which such breach is to be cured provided, however, that if such default is not reasonable
susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the
defect so long as Trustor is diligently prosecuting the cure to completion; and (4) that failure
to cure such breach on or before the date specified in the notice may result in acceleration of
the sums secured by this City Deed of Trust and sale of the Security. The notice will also
inform Trustor of Trustor's right to reinstate after acceleration and the right to bring a court
action to assert the non-existence of default or any other defense of Trustor to acceleration
and sale.
Notwithstanding anything to the contrary contained herein, a "default" shall not
include (i) a transfer of a general partner's interest in Trustor when made in connection
with the exercise by the Trustor's limited partner (the "Limited Partner") of its rights
upon a default by a general partner under the Trustor's Agreement of Limited Partnership
agreement (the "Partnership Agreement") or upon a general partner's withdrawal in
violation of the Partnership Agreement, so long as the removal and substitution of the
defaulting general partner is made within thirty (30) days of such default or, if such
removal and substitution cannot reasonably be completed within thirty (30) days, so long
as the Limited Partner commences to take action to remove and substitute the general
partner with a reasonable period and thereafter diligently proceeds to complete such
substitution; (ii) any transfer of the Property to the managing general partner of Trustor
pursuant to the right of first refusal or to the general partners of Trustor pursuant to the
purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the
Limited Partner's interest in connection with a default by the Limited Partner under and
in accordance with the Partnership Agreement; and (iv) any sale, transfer or other
disposition of an interest in a limited partner of the Trustor, provided that after any such
sale, transfer or other disposition an affiliate of Trustor remains the managing member or
general partner of such limited partner.
If the breach is not cured on or before the date specified in the notice or such longer
period as provided above or in the City Loan Note or the Agreement, the Beneficiary, at the
Beneficiary's option, may: (a) declare all of the sums secured by this City Deed of Trust to
be immediately due and payable without further demand and may invoke the power of sale
and any other remedies permitted by California law; (b) either in person or by agent, with or
without bringing any action or proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of its security, enter upon the Security and take possession
thereof (or any part thereof) and of any of the Security, in its own name or in the name of the
Trustee, and do any acts which it deems necessary or desirable to preserve the value or
marketability of the Property, or part thereof or interest therein, increase the income
therefrom or protect the security thereof. The entering upon and taking possession of the
Security shall not cure or waive any breach hereunder or invalidate any act done in response
to such breach and, notwithstanding the continuance in possession of the Security, the
Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by
law upon occurrence of any uncured breach, including the right to exercise the power of
sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a
receiver, or specifically enforce any of the covenants hereof; (d) deliver to the Trustee a
written declaration of default and demand for sale, pursuant to the provisions for notice of
sale found at California Civil Code Sections 2924, et 5eq., as amended from time to time; or
(e) exercise all other rights and remedies provided herein, in the instruments by which
Trustor acquires title to any Security, or in any other document or agreement now or
hereafter evidencing, creating or securing all or any portion of the obligations secured
hereby, or provided by law.
Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any
cure of any default made or tendered by Trustor's limited partner shall be deemed to be a
cure by Trustor and shall be accepted or rejected on the same basis as if made or tendered by
Trustor.
The Beneficiary shall be entitled to collect all reasonable costs and expenses
incurred in pursuing the remedies provided in this paragraph, including, but not limited to,
reasonable attorneys' fees.
19. Trustor's Right to Reinstate. Notwithstanding the Beneficiary's acceleration
of the sums secured by this City Deed of Trust, Trustor will have the right to have any
proceedings begun by the Beneficiary to enforce this City Deed of Trust discontinued at any
time prior to 5 days before sale of the Security pursuant to the power of sale contained in
this City Deed of Trust or at any time prior to entry of a judgment enforcing this City Deed
of Trust if: (a) Trustor pays the Beneficiary all sums which would be then due under this
City Deed of Trust and no acceleration under the City Loan Note has occurred; (b) Trustor
cures all breaches of any other covenants or agreements of Trustor contained in this Deed of
Trust and the Affordability Restrictions on Transfer of Property; (c) Trustor pays all
reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants
and agreements of Trustor contained in this City Deed of Trust and the Affordability
Restrictions on transfer of property, and in enforcing the Beneficiary's and the Trustee's
remedies, including, but not limited to, reasonable attorneys' fees; and (d) Trustor takes such
action as the Beneficiary may reasonably require to assure that the lien of this City Deed of
Trust, the Beneficiary's interest in the Security and Trustor's obligation to pay the sums
secured by this City Deed of Trust shall continue unimpaired. Upon such payment and cure
by Trustor, this City Deed of Trust and the obligations secured hereby will remain in full
force and effect as if no acceleration had occurred.
20. Acceptance by Trustee. Trustee accepts this Trust when this City Deed of
Trust, duly executed and acknowledged, is made a public record as provided by law.
Trustee is not obligated to notify any party to this City Deed of Trust of pending sale under
any other deed of trust or any action or proceeding in which Trustor, Beneficiary, or Trustee
shall be a party unless brought by Trustee.
21. Reconveyance. Upon payment or forgiveness of all sums secured by this
City Deed of Trust, the Beneficiary will request the Trustee to reconvey the Security and
will surrender this City Deed of Trust and the City Loan Note to the Trustee. The Trustee
will reconvey the Security without warranty and without charge to the person or persons
legally entitled thereto. Such person or persons will pay all costs of recordation, if any.
22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from
time to time remove the Trustee and appoint a successor trustee to any Trustee appointed
hereunder. The successor trustee will succeed to all the title, power and duties conferred
upon the Trustee herein and by applicable law.
23. Request for Notice. Trustor requests that copies of the notice of default and
notice of sale be sent to Trustee at the address set forth in Section 14 above.
24. Nonrecourse Liabilitv. Neither Trustor nor any partner of Trustor shall
have any personal liability under the Loan Agreement, City Loan Note, and this City Deed
of Trust and any judgment, decree or order for payment of money obtained in any action to
enforce the obligation of Trustor to repay the loan evidenced by such documents shall be
enforceable against Trustor only to the extent of Trustor's interest in the Property.
IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date first
written above.
"TRUSTOR"
Wakeham — Grant Apartments LP, a California limited partnership
MANAGING GENERAL PARTNER
By: JHC-Cornerstone LLC
a California Limited liability company
MANAGING MEMBER
JAMBOREE HOUSING CORPORATION
a California non-profit Public benefit corporation
By:
Laura Archuleta, President
Dated: q [ ( (7
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 9.27.17
before me, R.L. deCordova-Brittain, Notary Public
(insert name and title of the officer)
personally appeared Laura Archuleta
who proved to me on the basis of satisfactory evidence to be the person(s).whose name(* is/are
subscribed to the within instrument and acknowledged to me that'ro@/she/they executed the same in
This/her/4heir authorized capacity, and that by Risher/their signaturelt).on the instrument the
person(s.)., or the entity upon behalf of which the person(* acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct. ]]]���YYY�VY�
DECo"OVA-BHI PAIN
WITNESS my hand d official seal. Notary Public - California
Oranps County
z Commission # 2177359
Ja M Comm. Expires Dec 26, 2020
Si nat6i:
Exhibit A
PROPERTY DESCRIPTION
OWNER: Wakeham — Grant Apartments LP
PROJECT ADDRESS: 810 S. Minnie Street
Legal Description:
LOTS 1 AND 2, INCLUSIVE OF TRACT NO.3547, IN THE CITY OF SANTA ANA,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED
IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.