HomeMy WebLinkAboutHousing Authority - HOME - 1555 Santa Clara - 2011Recorded at the Request of and
When Recorded Return to:
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City of Fresno
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Clerk's Office
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2600 Fresno Street, Room 2133
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Fresno, CA 93721-3603
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This Agreement is recorded at the request and for the benefit of the City of Fresno and is exempt from the
payment of a recording fee pursuant to Government Code Section 6103.
By:
Mark Scott, City Manager
Date:
City of Fresno HOME Investment Partnerships (HOME) Agreement
CITY OF FRESNO HOME PROGRAM AGREEMENT
HOME Investment Partnerships Program
by and between
CITY OF FRESNO,
a municipal corporation
and
Housing Authority of the City of Fresno
a body, corporate and politic
and
1555 Santa Clara Street, LP
Silvercrest, Inc.
regarding
"Renaissance at Santa Clara"
APN: 467-082-03, 467-082-20 (portion), and 467-082-04 (portion)
An Affordable Multi -Family Apartment Project
TABLE OF CONTENTS
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RECITALS............................................................................................................................3
ARTICLE 1. DEFINITIONS..................................................................................................4
ARTICLE2. TERMS............................................................................................................8
ARTICLE 3. GENERAL REPRESENTATIONS/WARRANTIES.........................................9
ARTICLE 4. HOME PROGRAM REPRESENTATION/WARRANTIES ...........................10
ARTICLE 5. COVENANTS/AGREEMENTS OF DEVELOPER.........................................16
ARTICLE 6. DISBURSEMENT OF HOME FUNDS...........................................................20
ARTICLE 7. DEVELOPMENT AND CONSTRUCTION OF PROJECT .............................22
ARTICLE 8. PROJECT OPERATIONS .............................................................................27
ARTICLE 9. INSURANCE AND INDEMNITY., ........................................... ...................... 30
ARTICLE 10. DEFAULT AND REMEDIES.......................................................................32
ARTICLE 11. GENERAL PROVISIONS............................................................................34
Page 2
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
This HOME Investment Partnerships Progra��M Agreement (hereinafter referred to as
the "Agreement") is entered into this, �SI�_S , 2011, by and among
the CITY OF FRESNO, a municipal corpora cont , acting through its Development and
Resource Management Department - Housing and Community Development Division
(hereinafter referred to as the "CITY"), and the Housing Authority of the City of Fresno,
"Housing Authority", a body corporate and politic, and 1555 Santa Clara Street, LP, a
California Limited Partnership "LP", and Silvercrest, Inc., "Silvercrest"; the Housing Authority,
LP, and Silvercrest herein collectively "Developer".
RECITALS
A. The CITY has received a HOME Investment Partnerships Program (hereinafter
referred to as "HOME Program") grant from the U.S. Department of Housing and Urban
Development (hereinafter referred to as "HUD"), under Title II of the Cranston -Gonzalez
National Affordable Rental Housing Act of 1990, as amended (hereinafter referred to as the
"ACT").
B. To advance the supply of Affordable Rental Housing within the City of Fresno, the
CITY desires, among other things, to encourage private investment in the affordable rental
housing market.
C. The Project will provide for the construction of sixty-nine (69) affordable housing units,
of which fifteen (15) units will be HOME -assisted affordable rental housing units, and one (1)
manager unit at the Property identified in EXHIBIT "A".
D. The DEVELOPER desires to act as owner and developer exercising effective project
control, as to the construction of seventy (70) unit apartment complex, of which fifteen (15)
floating units shall be constructed and preserved as Very Low -Income Rental Housing, as
defined by the HOME Program, and related on-site and off-site improvements, hereinafter
referred to as the "Project", as more particularly described in the Project Description attached
hereto as EXHIBIT "B", incorporated herein.
E. The Project will be constructed upon HOME eligible Property owned/to be owned by
the DEVELOPER located within the boundaries of the City of Fresno, as more particularly
described in the attached EXHIBIT "A".
F. To further its goal to increase the supply of Affordable Rental Housing within the City of
Fresno, the CITY desires to assist the DEVELOPER by providing a One Million Five Hundred
Thousand dollar and 00/100 ($1,500,000) residual receipts HOME Program Loan to the
Project (hereinafter referred to as "Loan"), for a term of fifty-five (55) years, for payment of
HOME eligible Project costs, as further identified in Project Budget and Cash Flow Statement
(EXHIBIT "C"), variously to be secured by the underlying real property and the Affordable
Rental Housing covenants, upon the terms and conditions in this Agreement. The interest will
be at 1% annually. Principal and interest will be payable beginning at year forty (40) from
20% of annual residual receipts at times prior to the Maturity Date and in full upon the loan
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Maturity Date.
G. The DEVELOPER has conducted an environmental review of the Project pursuant to
the National Environmental Policy Act ("NEPA") resulting in a Finding of No Significant
Impact. The DEVELOPER has received related federal approval for release of HOME funds
pursuant to 24 CFR Part 58. Additionally, the CITY has conducted an environmental review
of the Project pursuant to the California Environmental Quality Act ("CEQX) resulting in a
Finding of Conformity with the Master Environmental Impact Report No. 10130 prepared for
the 2025 Fresno General Plan.
H. The CITY has determined that this Agreement is in the best interests of, and will
materially contribute to, the Housing Element of the General Plan. Further, the CITY has
found that the Project: (i) will have a positive influence in the neighborhood and surrounding
environs; (ii) is in the vital and best interests of the CITY, and the health, safety, and welfare
of CITY residents; (iii) complies with applicable federal, state, and local laws and
requirements; (iv) will increase, improve, and preserve the community's supply of Very Low -
Income Housing available at Affordable Rental Housing cost to persons and families of Very
Low -Income, as defined hereunder; (v) planning and administrative expenses incurred in
pursuit hereof are necessary for the production, improvement, or preservation of Very Low -
Income Housing; and (vi) will comply with any and all owner participation rules and criteria
applicable thereto.
The CITY and the DEVELOPER have determined that the HOME Assisted Units constitutes
routine programmatic/grantee lender activities utilizing available and allocated
program/grantee funding, outside the reach of California Constitution Article XXXIV and
enabling legislation.
I. On August 24, 2011, the Housing and Community Development Commission of the City
of Fresno reviewed this Agreement.
J. The parties acknowledge and agree that the obligations and liabilities of the
DEVELOPER hereunder shall be joint and several unless and except to any extent expressly
provided otherwise.
NOW, THEREFORE, IN CONSIDERATION of the above recitals, which recitals are
contractual in nature, the mutual promises herein contained, and for other good and valuable
consideration hereby acknowledge, the parties agree as follows:
ARTICLE 1. DEFINITIONS
The following terms have the meaning and content set forth in this Article wherever used in
this Agreement, attached exhibits or attachments that are incorporated into this Agreement
by reference.
1.1 ADA means the Americans with Disabilities Act of 1990, as most recently
amended.
1.2 Acquisition means vesting of the Property in fee title.
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1.3 Affirmative Marketing means a good faith effort to attract eligible persons of all
racial, ethnic and gender groups, in the housing market area, to rent the proposed Affordable
Rental Housing Project units that are proposed for construction on the eligible Property, as
hereinafter defined.
1.4 Affordability Period means the minimum period of fifty-five (55) years
commencing from the date the CITY entered project and tenant information in HUD's
Integrated Disbursement and Information System (IDIS), as more fully described in the
Declaration of Restrictions (attached hereto as EXHIBIT "D").
1.5 Affordable Rental Housing means the rental housing units of which nine (9)
units will be required to meet the affordability requirements of 24 CFR 92.252.
1.6 Budget means the pro -forma Project Budget, attached hereto as EXHIBIT "C",
as may be amended upon the approval of the CITY's Housing and Community Development
Division Manager, provided any increase in HOME Funds hereunder requires City Council
Approval.
1.7 Certificate of Completion means that certificate issued, in the form attached as
EXHIBIT "E" ("Certificate of Completion"), to the DEVELOPER by the CITY evidencing
completion of the Project and a release of construction related covenants for the purposes of
the Agreement.
1.8 CFR means the Code of Federal Regulations.
1.9 Commencement of Construction means the time the DEVELOPER or
DEVELOPER's construction contractor begins substantial physical work on the Property,
including, without limitation, delivery of materials and any work, beyond maintenance of the
Property in its status quo condition, and not later than sixty (60) calendar days following the
CITY's approval of commencement of construction.
1.10 Debt Service means payments made in a calendar year pursuant to the
financing obtained for the acquisition, construction, operation and/or ownership of the
Affordable Project, but excluding payments made pursuant to the Note.
1.11 Declaration of Restrictions means the Declaration of Restrictions in the form
attached hereto as EXHIBIT "D", which shall be recorded against the Property no later than
the date of disbursement of Loan proceeds, setting out the Affordable Rental Housing
covenants and requirements of this Agreement which shall run with the land.
1.12 Deed of Trust means that standard, no worse than third (3`d) position Deed of
Trust (subject to Section 2.7 and 4.7 below) including assignment of rents and security
agreement given by the DEVELOPER, as Trustor, to the CITY as beneficiary, issued through
an escrow established by the DEVELOPER at its sole cost and expense with a title company
acceptable to CITY, recorded against the Property, insured in the full amount of the Loan and
acceptable to the City Attorney, as well as any amendments to, modifications of and
restatements of said Deed of Trust. The Deed of Trust shall secure repayment of the Note.
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1. 13 Eligible Costs means any and all HOME Program eligible Project costs as may
be reimbursed/paid by the Loan, consistent with the Budget, attached as EXHIBIT "C",
allowable under 24 CFR Part 92, as specified in 24 CFR 92.205 and 92.206, and not
disallowed by 24 CFR 92.214, provided, however, that costs incurred in connection with any
activity that is determined to be ineligible under the Program by HUD or the CITY shall not
constitute Eligible Costs.
1.14 Event of Default shall have the meaning assigned to such term under Section
10.1 hereunder.
1.15 Family has the same meaning given that term in 24 CFR 5.403.
1.16 Funding Sources means (i) CITY's HOME Funds: (ii) Low Income Housing Tax
Credits, (iii) Housing Authority Relinquished Fund Corporation; and (iv) Mental Health
Services Act funds referenced in the Budget as source(s) of funding for the Affordable
Project, and any other financing sources described in the Budget.
1.17 Hazardous Materials means any hazardous or toxic substances, materials,
wastes, pollutants or contaminants which are defined, regulated or listed as "hazardous
substances," "hazardous wastes," "hazardous materials," "pollutants," "contaminants" or
"toxic substances" under federal or state environmental and health safety laws and
regulations, including without limitation, petroleum and petroleum byproducts, flammable
explosives, urea formaldehyde insulation, radioactive materials, asbestos and lead.
Hazardous Materials do not include substances that are used or consumed in the normal
course of developing, operating or occupying a housing project, to the extent and degree that
such substances are stored, used and disposed of in the manner and in amounts that are
consistent with normal practice and legal standards.
1.18 HOME Investments Partnership Funds (also referred to in this Agreement as
HOME Funds or HOME Program Funds) means the HOME Program monies including the
Loan, in an amount not to exceed the sum of One Million Five Hundred Thousand dollars and
00/100 ($1,500,000) to be used for HOME Program eligible Project costs.
1.19 Household means one or more persons occupying a Unit in the proposed
Affordable Rental Housing Project.
1.20 HUD means the United States Department of Housing and Urban Development.
1.21 Loan means the non -assumable (except as set forth in Section 5.11 below) loan
of HOME Funds, in an amount not to exceed the sum of One Million Five Hundred Thousand
dollars and 00/100 ($1,500,000) made available by the CITY to the Project pursuant to this
Agreement, as more specifically described in the Budget and in the Promissory Note
attached hereto as EXHIBITS "C" and "F" respectively.
1.22 Loan Documents are collectively this Agreement, the Note, Deed of Trust,
Declaration of Restrictions and all related documents/instruments as they may be amended,
modified or restated from time to time along with all exhibits and attachments thereto, relative
to the Loan.
1.23 Note means the non -assumable (except as set forth in Section 5.11 below),
Project Note in the principal amount of the loan not to exceed the HOME Program per unit
cap (24 C.F.R. 92.250) as determined by the CITY, given by the DEVELOPER as promissor,
in favor of the CITY as promissee, evidencing the Loan and performance of the affordability
and other covenants and restrictions set forth in this Agreement, secured by a standard Deed
of Trust as third (3`d) position lien upon the Property, (subject to Section 2.7 and 4.7 below)
naming the CITY as beneficiary and provided to the CITY no later than the date of Project
funding hereunder, an exemplar of which Note is attached hereto as EXHIBIT "F", and
incorporated herein, as well as any amendments to, modifications of and restatements of said
Note consented to by CITY.
1.24 Program Income has the meaning provided in the HOME program including 24
CFR 92.503.
1.25 Project means each and all of the sixty-nine (69) Very Low -Income Affordable
Rental Housing Units (and one (1) manager unit) to be constructed, marketed, and rented as
Very Low -Income Housing, and related on-site and off-site improvements, all as described in
the Project Description attached hereto and incorporated herein as EXHIBIT "B", upon the
Property as more particularly described in EXHIBIT "A". Fifteen (15) HOME -units will be
rented to Very Low -Income Households as identified in the Project Description and shall meet
HOME Program requirements.
1.26 Project Completion Date means the date that the CITY shall have determined
that the Project has reached completion in accordance with this Agreement. The Project
Completion Date for this project is identified in EXHIBIT "B".
1.27 Proiect Schedule means the schedule for completion of the Project included
within the EXHIBIT "B" Project Description and Schedule, consistent with the above Project
Completion Date.
1.28 Property means the HOME Program eligible property located at 503 "G" Street,
512 "F" Street, and 1555 Santa Clara Street (APNs: 467-082-03, portion of 467-082-20,
and portion of 467-082-04), Fresno, California, more specifically described in the attached
EXHIBIT "A", owned/to be acquired by the DEVELOPER, and developed for Affordable
Rental Housing.
1.29 Senior Lender means one or more lenders providing the Senior Financing for
the Affordable Project.
1.30 Senior Financing means the financing for the Affordable Project set forth in the
Budget and the Finance Plan which shall be senior to the Loan.
1.31 Rent means the total monthly payments a tenant pays for a Unit including the
following: use and occupancy of the Unit and land and associated facilities, including parking
(other than parking services acquired by tenants on an optional basis), any separately
charged fees or service charges assessed by the DEVELOPER which are required of all
tenants (other than security deposits), the cost of an adequate level of service for utilities paid
. m
by the tenant (including garbage collection, sewer, water, common area electricity, but not
telephone service), any other interest, taxes, fees or charges for use of the land or associated
facilities and assessed by a public or private entity other than the DEVELOPER, and paid by
the tenant.
1.32 Residual Receipts means Residual Receipts as defined in Exhibit "F"
1.33 Unit means a dwelling unit of the Rental Housing.
1.34 Very Low -Income means families whose annual income does not exceed fifty
percent (50%) of the median income as established by HUD for the Fresno, California area,
except as HUD may establish income ceilings higher or lower than fifty percent (50%) of the
median for the area on the basis of HUD findings that such variations are necessary.
ARTICLE 2. TERMS
2.1 Loan of HOME Funds. The CITY agrees to provide the Loan of HOME Funds
to the DEVELOPER in an amount not to exceed One Million Five Hundred Thousand dollars
and 00/100 ($1,500,000) under the terms and conditions provided in this Agreement. The
HOME Funds shall only be used for payment of HOME eligible costs.
2.2 Loan Documents. The DEVELOPER shall execute and deliver to the CITY the
Loan Documents including the Note and the Deed of Trust that shall be recorded against the
Property, as provided for in this Agreement.
2.3 Term of Agreement. This Agreement is effective upon the effective date and
shall remain in force for the. duration of the Affordability Period unless earlier terminated as
provided herein. After the fifty-five (55) year Affordability Period, this Agreement will expire
except as to financial obligations then due and owing. It is understood and agreed upon,
however, that if for any reason this Agreement should be terminated in whole or in part as
provided hereunder, without default, by the DEVELOPER prior to disbursement of HOME
Program Funding hereunder, the CITY agrees to record a Notice of Cancellation regarding
this Agreement, upon the written request of the DEVELOPER.
2.4 Loan Repayment and Maturity. The Loan will be due and payable in
accordance with the Note and not later than the maturity date provided in the Note.
2.5 Incorporation of Documents. The DEVELOPER's proposal dated November 4,
2010, the DEVELOPER's Board Minutes dated June 23, 2010, the CITY Council approved
Minutes of August 25, 2011, approving this Agreement, the Loan Documents, the Act and
HUD regulations at 24 CFR Part 92, and all exhibits, attachments, documents and
instruments referenced herein, as now in effect and as may be amended from time to time,
constitute part of this Agreement and are incorporated herein by reference. All such
documents have been provided to the parties herewith or have been otherwise provided
to/procured by the parties and reviewed by each of them prior to execution hereof.
2.6 Covenants of DEVELOPER. The DEVELOPER, jointly and severally for
themselves and their respective assigns covenant and agree to comply with all the terms and
conditions of this Agreement and the requirements of 24 CFR Part 92.
2.7 Subordination. The Deed of Trust and/or Declaration of Restrictions may be
subordinated to certain approved financing as provided herein (in each case, a "Senior
Loan"), to no worse than third (3r) position, but only on condition that all of the following
conditions are satisfied: (a) All of the proceeds of the proposed Senior Loan, less any
transaction costs, must be used to provide acquisition, construction and/or permanent
financing for the Project consistent with an approved financing plan; (b) DEVELOPER must
demonstrate to the CITY's reasonable satisfaction that subordination of the Deed of Trust
and/or Declaration of Restrictions is necessary to secure adequate acquisition and
construction and/or permanent financing to ensure the viability of the Project; (c) The
subordination agreement must provide the CITY with adequate rights to cure any defaults by
the DEVELOPER including providing the CITY or its successor with copies of any notices of
default; (d) Upon a determination by the City Manager that the conditions in this Section have
been satisfied, the City Manager or his/her designee will be authorized to execute the
approved subordination agreement without the necessity of any further action or approval,
subject to prior approval to form by the Fresno City Attorney.
ARTICLE 3. GENERAL REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER
3.1 Existence and Qualification. The DEVELOPER represents and warrants as of
the date hereof, that it is a duly organized California public agency in good standing. The
DEVELOPER represents and warrants as of the date hereof, that it is a duly organized public
entity formed under the California Health and Safety Code, in good standing, and has the
requisite power, right and legal authority to execute, deliver, and perform its obligations under
this Agreement and has taken all actions necessary to authorize the execution, deliver,
performance, and observance of its obligations under this Agreement. This Agreement, when
executed and delivered, shall constitute the legal, valid, and binding obligations of the
DEVELOPER enforceable against the DEVELOPER in accordance with its respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or other similar laws of general applicability
affecting the enforcement of creditors' rights generally, and (b) the application of general
principles of equity without the joinder of any other party.
3.2 No Litigation Material to Financial Condition. The DEVELOPER represent and
warrant as of the date hereof that, except as disclosed to and approved by CITY in writing, no
litigation or administrative proceeding before any court or governmental body or agency is
now pending, nor, to the best of the DEVELOPER's knowledge, is any such litigation or
proceeding now threatened, or anticipated against the DEVELOPER that, if adversely
determined, would have a material adverse effect on the financial condition, business, or
assets of the DEVELOPER or on the operation of the Project.
3.3 No Conflict of Interest. The DEVELOPER represent and warrant as of the date
hereof that no official, officer, agent, or employee of the CITY directly or indirectly owns or
controls any interest in the DEVELOPER, and no person, directly or indirectly owning or
controlling any interest in the DEVELOPER, is an official, officer, agent, or employee of the
CITY.
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3.4 No Legal Bar. The DEVELOPER represent and warrant as of the date hereof
that the execution, delivery, performance, or observance by the DEVELOPER of this
Agreement will not, to the best of DEVELOPER's knowledge, materially violate or contravene
any provisions of: (a) any existing law or regulation, or any order of decree of any court,
governmental authority, bureau, or agency; (b) governing documents and instruments of the
DEVELOPER; or (c) any mortgage, indenture, security agreement, contract, undertaking, or
other agreement or instrument to which the DEVELOPER is/are a party or that is binding on
any of its properties or assets, the result of which would materially or substantially impair the
DEVELOPER's ability to perform and discharge its/their obligations or its/their ability to
complete the Project under this Agreement.
3.5 Assurance of Governmental Approvals and Licenses. The DEVELOPER
represent and warrant, as of the date hereof, that the DEVELOPER have obtained and, to the
best of the DEVELOPER's knowledge, is in compliance with all federal, state, and local
governmental reviews, consents, authorizations, approvals, and licenses presently required
by law to be obtained by the DEVELOPER for the Project as of the date hereof.
ARTICLE 4. HOME PROGRAM REPRESENTATION AND WARRANTIES
BY THE DEVELOPER
The DEVELOPER, for itself and its development team, represents and warrants that:
4.1 Accessibility. The DEVELOPER warrants, covenants and agrees that it shall
comply with all federal regulations concerning accessibility requirements in federally funded
housing, including, but not limited to the following:
A. At least five percent (5%) of the dwelling units, or at least four (4) units,
whichever is greater, must be constructed to be accessible for persons with mobility
disabilities. An additional two percent (2%) of the dwelling units, or at least one (1) unit,
whichever is greater, must be accessible for persons with hearing or visual disabilities.
These units must be constructed in accordance with the Uniform Federal Accessibility
Standards (UFAS) or a standard that is equivalent or stricter. These mandates can be found
in 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C.
794).
B. The design and construction requirements of the Fair Housing Act (Title
VIII of the Civil Rights Act of 1968, as amended), including the following seven (7)
requirements of the Fair Housing Accessibility Guidelines:
Provide at least one accessible building entrance on an
accessible route.
ii. Construct accessible and usable public and common use areas.
iii. Construct all doors to be accessible and usable by persons in
wheelchairs.
iv. Provide an accessible route into and through the covered dwelling
unit.
V. Provide light switches, electrical outlets, thermostats and other
environmental controls in accessible locations.
vi. Construct reinforced bathroom walls for later installation of grab
bars around toilets, tub, shower stalls and shower seats, where
such facilities are provided.
vii. Provide usable kitchens and bathrooms such that an individual
who uses a wheelchair can maneuver about the space.
C. Title III of the Americans with Disabilities Act of 1990 (ADA) as it relates
to the required accessibility of public and common use areas of the Project.
D. The design and construction requirements as required by the
CITY'S Universal Design Ordinance pursuant to FMC 11-110, including, but not limited to the
following requirements:
i. No step accessible entryway;
ii. All interior doorways and passageways at least 32 inches wide;
iii. One downstairs "flex room" and accessible bathroom with
reinforcements for grab bars;
iv. Six square feet of accessible kitchen counter space; and
V. Hallways at least 42 inches wide.
4.2 Affirmative Marketing. The DEVELOPER warrants, covenants and agrees that
it shall comply with all affirmative marketing requirements, including without limitation, those
set out at 24 CFR 92.350, 24 CFR 92.351, in order to provide information and otherwise
attract eligible persons from all racial, ethnic and gender groups in the housing market. The
DEVELOPER shall be responsible for complying with the CITY's "Affirmative Marketing
Policy" document, incorporated herein, as amended from time to time. The DEVELOPER
shall maintain records of actions taken to affirmatively market units, and to assess the results
of these actions.
4.3 Availability of HOME Funds. The DEVELOPER understands and agrees that
the availability of HOME Funds is subject to the control of HUD, or other federal agencies,
and should said Funds be encumbered, withdrawn or otherwise made unavailable to the
CITY, whether earned by or promised to the DEVELOPER, and/or should CITY in any fiscal
year hereunder fail to allocate said Funds, the CITY shall not provide said Funds unless and
until they are made available for payment to the CITY by HUD and the CITY receives and
allocates said Funds. No other funds owned or controlled by the CITY shall be obligated
under this Agreement.
4.4 Compliance with Agreement. The DEVELOPER warrants, covenants and
agrees that, in accordance with the requirements of 24 CFR 92.252 and 24 CFR Part 85,
upon any uncured default by the DEVELOPER within the meaning of Article 10 of this
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Agreement, the CITY may suspend or terminate this Agreement and all other agreements
with the DEVELOPER without waiver or limitation of rights/remedies otherwise available to
the CITY.
4.5 Conflict of Interest. The DEVELOPER warrants, covenants and agrees that it
shall comply with the Conflict of Interest requirements of 24 CFR 92.356 including, without
limitation, that no officer, employee, agent or consultant of the DEVELOPER (other than an
employee or agent of the DEVELOPER who occupies a unit as the project manager or
maintenance worker) may occupy a Project Unit. The DEVELOPER understands and
acknowledges that no employee, agent, consultant, officer or elected official or appointed
official of the CITY, who exercises or has exercised any functions or responsibilities with
respect to the Project, or who is in a position to participate in a decision making process or
gain inside information with regard to these activities, may obtain a financial interest or
benefit from the Project, or have an interest in any contract, subcontract or agreement with
respect thereto, or the proceeds thereunder, either for him or herself or for anyone with which
that person has family or business ties, during his or her tenure or for one year thereafter. To
the extent provided at 24 CFR 92.356(f), no owner, developer or sponsor of the Project, or
officer, employee, agent or consultant thereof, may occupy a Project Unit.
4.6 Construction Standards. The DEVELOPER shall construct the proposed
housing units assisted under this Agreement in compliance with all applicable local codes,
ordinances and zoning requirements in effect at the time of issuance of Certification of
Completion. In the absence of a local code for construction, the DEVELOPER agrees to
comply with the applicable standards identified in 24 CFR 92.251.
4.7 Covenants and Restrictions to Run with the Land. The CITY and the
DEVELOPER expressly warrant, covenant and agree to ensure that the covenants and
restrictions set forth in this Agreement are recorded and will run with the land, provided,
however, that, on expiration of this Agreement such covenants and restrictions shall expire.
The DEVELOPER further warrant, covenant and agree that the covenants and restrictions
set forth herein shall run in favor of the CITY. The CITY agrees that this Agreement, the
Note, the Deed of Trust and the Declaration of Restrictions shall be made junior and
subordinate to liens given in connection with the Project financing, including any refinancing
thereof established and obtained pursuant to and in compliance with the provisions of this
Agreement, and to any tax credit or other regulatory agreement. The City Manager of the
CITY is hereby authorized and directed to execute such subordination agreements, inter -
creditor agreements, standstill agreements, and/or other documents as may be reasonably
requested by the Lender to evidence subordination to the Project financing, without further
authorization from the CITY, provided that such agreements contain written provisions that
are no more onerous and which are consistent with the customary standard requirements
imposed by the financing source(s), on subordinate cash flow obligations under their then
existing senior tax exempt bond financing policies, and further provided that City Attorney
reasonably approves of such document as to form.
A. The CITY and the DEVELOPER hereby declare their understanding and
intent that the covenants and restrictions set forth herein directly benefit the land: (a) by
enhancing and increasing the enjoyment and ownership of the proposed Project by certain
Very Low -Income Households; and (b) by making possible the obtaining of advantageous
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financing for construction.
B. The DEVELOPER covenant and agree that until the expiration of the
Affordability Period it shall cause the Affordable Rental Housing to be used for Affordable
Housing for Very Low -Income Households.
C. Without waiver or limitation, the CITY shall be entitled to injunctive or
other equitable relief against any violation or attempted violation of any covenants and
restrictions, and shall, in addition, be entitled to damages available under law or contract for
any injuries or losses resulting from any violations thereof.
D. All present and future owners of the Rental Housing and other persons
claiming by, through, or under them shall be subject to and shall comply with the covenants
and restrictions. The acceptance of a deed of conveyance to the Rental Housing shall
constitute an agreement that the covenants and restrictions, as may be amended or
supplemented from time to time, are accepted and ratified by such future owners, tenant or
occupant, and all such covenants and restrictions shall be covenants running with the land
and shall bind any person having at any time any interest or estate in the Rental Housing, all
as though such covenants and restrictions were recited and stipulated at length in each and
every deed, conveyance, mortgage or lease thereof.
E. The failure or delay at any time of the CITY or any other person entitled
to enforce any such covenants or restrictions shall in no event be deemed a waiver of the
same, or of the right to enforce the same at any time or from time to time thereafter, or an
estoppel against the enforcement thereof.
4.8 Displacement of Persons. The DEVELOPER warrants, covenants and agrees
that pursuant to 24 CFR 92.353, it will take all reasonable steps to minimize the displacement
of any persons (families, individuals, businesses, nonprofit organizations and farms).
4.9 Initial and Annual Income Certification. The DEVELOPER warrants, covenants
and agrees that it shall comply with the procedures for annual income determinations at 24
CFR 92.203. The DEVELOPER shall obtain, complete and maintain on file, immediately
prior to initial occupancy, and annually thereafter, income certifications from each tenant
Household renting any Unit. The DEVELOPER shall make a good faith effort to verify that
the income provided by an applicant or occupying Household in an income certification is
accurate by taking one or more of the following steps as part of the verification process: (1)
obtain a pay stub for the most recent pay period; (2) obtain an income verification form from
the applicant's current employer; (3) obtain an income verification form from the Social
Security Administration and California Department of Social Services if the applicant receives
assistance from either of such agencies; or (4) obtain another form of independent
verification. Copies of household income certification and verification must be available for
review and approval by the CITY. The DEVELOPER further warrants, covenants and agrees
that it shall cooperate with the CITY in the CITY's income certification/affordability monitoring
activities.
4.10 Lead -Based Paint. The DEVELOPER covenants and agrees with the CITY that
it shall comply with all applicable requirements of the Lead -Based Paint Poisoning Prevention
Page 13
Act of 42 U.S.C. 4821 et seq., 24 CFR Part 35, including the HUD 1012 Rule, 24 CFR
982.401 Q), and any amendments thereto, and EPA Section 402(c)(3) of the Toxic
Substances Control Act (TSCA) to address lead-based paint hazards created by renovation,
repair, and painting activities that disturb lead-based paint in target housing and child -
occupied facilities. Contractors performing renovations in lead-based paint units must be
EPA -certified renovators. These requirements apply to all Units and common areas of the
Affordable Project. The DEVELOPER shall incorporate or cause incorporation of this
provision in all contracts and subcontracts for work performed on the Affordable Project,
which involve the application of paint. The DEVELOPER shall be responsible for all
disclosure, inspection, testing, evaluation, and control and abatement activities.
4.11 Minority Outreach Activities. The DEVELOPER warrants, covenants and
agrees that it shall comply with all federal laws and regulations described in Subpart H of 24
CFR Part 92, including, without limitation, any requirement that the DEVELOPER comply with
the CITY'S minority outreach program.
4.12 Other Laws and Regulations. The DEVELOPER warrants, covenants and
agrees that, in addition to complying with the federal laws and regulations already cited in this
Agreement, the DEVELOPER have reviewed, and shall comply with, all other federal laws
and regulations that apply to the HOME Program, including, without limitation, requirements
of 24 CFR 58.6 and the Flood Disaster Protection Act of 1973, as amended (42 U.S.C.
4001-4128) and the following:
A. The DEVELOPER does not intend to use any financing that is secured
by a mortgage insured by HUD in connection with the Project as part of its acquisition and/or
construction of this Project.
B. The Project is not located in a tract identified by the Federal Emergency
Management Agency as having special flood requirements.
C. The Project requirements, Subpart F of 24 CFR Part 92, as applicable
and in accordance with the type of Project assisted, including, but not limited to, the limit on
per-unit subsidy amount at 24 CFR 92.250.
D. The property standards at 24 CFR 92.251.
E. The Project "Labor" requirements, as applicable, of 24 CFR 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 CFR Part 5).
F. The provisions of Section 102 and 107 of the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of Labor
Regulations (29 CFR Part 5), in regards to the construction and management of the proposed
Project.
G. The DEVELOPER and its contractors, subcontractors and service
providers for the Project, shall comply with all applicable local, state and federal requirements
concerning equal employment opportunity, including compliance with Executive Order
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("E.O."). 11246, "Equal Employment Opportunity," as amended by E.O. 11375, "Amending
E.O. 11246 Relating to Equal Employment Opportunity," and as supplemented by regulations
at 41 CFR part 60, "Office of Federal Contract Compliance Programs, Equal Employment
Opportunity, Department of Labor."
H. The provisions of the Copeland "Anti -Kickback" Act (18 U.S.C. 874), as
supplemented by Department of Labor regulations (29 CFR part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or
Grants from the United States").
I. The provisions of the Clean Air Act (42 U.S.C. 7401 et seq.) and the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), as amended.
J. The provisions of the Byrd Anti -Lobbying Amendment (31 U.S.C. 1352).
K. The provision of E.O.s 12549 and 12689, "Debarment and Suspension,"
as set forth at 24 CFR part 24.
L. The provisions of the Drug -Free Workplace Act of 1988 (42 U.S.C. 701),
in accordance with the Act and with HUD's rules at 24 CFR part 24, subpart F.
M. Title 8 of the Civil Rights Act of 1968 PL. 90-284.
N. Executive Order 11063 on Equal Opportunity and Housing.
O. Section 3 of the Housing and Urban Development Act of 1968.
P. The Housing and Community Development Act of 1974.
Q. Clean Water Requirements 33 U.S.C. 1251.
R. Civil Rights Requirements, 29 U.S.C. § 623, 42 U.S.C. § 2000, 42 U.S.C.
§ 6102, 42 U.S.C. § 12112, 42 U.S.C. § 12132, 49 U.S.C. § 5332, 29 CFR Part 1630, and 41
CFR Parts 60 et seq.
4.13 Faith Based Activities. The DEVELOPER warrants, covenants and agrees that
it shall not engage in any prohibited activities described in 24 CFR 92.257.
4.14 Reporting Requirements. The DEVELOPER warrants, covenants and agrees
that it shall submit performance reports to the CITY as detailed in Section 7.17. Furthermore,
The DEVELOPER agree to provide, at the sole cost of The DEVELOPER, annual audited
Financial Statements for the Project expenses and ongoing financial transactions which occur
as a result of this Agreement: as detailed in Sections 5.6 and 5.7. The DEVELOPER agrees
to account for the expenditure of HOME Funds using generally accepted accounting
principles, which financial documentation shall be made available to the CITY and HUD upon
their respective written request(s).
4.15 Housing Affordability. The DEVELOPER warrants, covenants and agrees that
the Project will meet the Affordable Rental Housing, income targeting and other requirements
of 24 CFR 92.252 during the Affordability Period. The Units shall, at a minimum, be rented to
Page 15
and occupied by, or, if vacant, available for rental and occupancy by (a) person(s) whose
annual household income at the time of initial occupancy is not greater than fifty percent
(50%) of the most recent annual median income calculated and published by HUD for the
Fresno Metropolitan Statistical Area applicable to such household's size, and at an affordable
price consistent with HOME Program regulations, for the Affordability Period except upon
foreclosure by a lender or transfer in lieu of foreclosure following default under a Deed of
Trust provided the CITY has an opportunity to avoid termination of affordability. However, if
at any time following transfer by foreclosure or transfer in lieu of foreclosure, but still during
the Affordability Period, the owner of record prior to the foreclosure or transfer in lieu of
foreclosure, or any newly formed entity that includes such owner of record or those whom
such owner of record has or had family or business ties, obtains an ownership interest in the
Project or Property, the Affordability Period shall be revived according to its original terms. In
the event the DEVELOPER fails to comply with this Section or the Affordability Period is not
revived following transfer by foreclosure or transfer in lieu of foreclosure, the DEVELOPER
shall return to CITY all HOME Funds disbursed to the DEVELOPER by CITY.
4.16 Terminated Projects(s). The DEVELOPER understands and agrees that, if the
Project is terminated before completion, either voluntarily or otherwise, such constitutes an
ineligible activity and the CITY without waives or limitation upon other rights and remedies will
not be required to provide any further HOME Program assistance funding to the Project
Units.
ARTICLE 5. COVENANTS AND AGREEMENTS OF THE DEVELOPER
The DEVELOPER covenants and agrees to the following, for the entire term of the
Agreement.
5.1 Adequate Repair and Maintenance. After construction of the Project is
complete, the DEVELOPER shall maintain the Project and Property in compliance with all
applicable codes, laws, and ordinances.
5.2 Affordable Rental Housing. The DEVELOPER covenants and agrees that the
Project shall constitute Affordable Housing with fifteen (15) units preserved as Very Low -
Income Rental Housing (as variously provided at 24 CFR 92.252) during the entire
Affordability Period. This covenant as to Affordable Housing shall remain in effect and run
with and restrict the land during the entirety of the Affordability Period. In the event that the
DEVELOPER fails to comply with the time period in which the Project must constitute
Affordable Housing, the CITY shall without waiver or limitation, be entitled to injunctive relief,
as the DEVELOPER acknowledges that damages are not an adequate remedy at law for
such breach.
5.3 Compliance With Environmental Laws. The DEVELOPER shall cause the
Project to be in compliance with, and not to cause or permit the housing project to be in
violation of, any environmental law, rule, regulation, ordinance, or statute. Although the CITY
will utilize its employees and agents for regular inspection and testing of the eligible Property,
the DEVELOPER agrees that, if the CITY has reasonable grounds to suspect any such
violation, the DEVELOPER shall be entitled to thirty (30) days' notice and opportunity to cure
such violation. If the suspected violation is not cured, the CITY shall have the right to retain
Page 16
an independent consultant to inspect and test the eligible Property for such violation. If a
violation is discovered, the DEVELOPER shall pay for the reasonable cost of the independent
consultant.
Additionally, the DEVELOPER agrees:
A. That the CITY shall not be directly or indirectly involved with the
inspection, testing, removal or abatement of asbestos or other hazardous or toxic chemicals,
materials, substances, or wastes and that all cost, expense and liability for such work shall be
and remain solely with the DEVELOPER;
B. Not to transport to or from the proposed project site(s), or use, generate,
manufacture, produce, store, release, discharge, or dispose of on, under, or about the project
site(s), or surrounding real estate, or transport to or from the project site(s), or surrounding
real estate, any hazardous or toxic chemicals, materials, substance, or wastes or allow any
person or entity to do so except in such amounts and under such terms and conditions
permitted by applicable laws, rules, regulations, ordinances, and statutes;
C. To give prompt written notice to the CITY of the following:
1. Any proceeding or inquiry by any governmental authority with
respect to the presence of any hazardous or toxic chemicals, materials, substance, or waste
in or on the eligible Property or the surrounding real estate or the migration thereof from or to
other property; and
2. All claims made or threatened by any third party against the
DEVELOPER or such properties relating to any loss or injury resulting from any hazardous or
toxic chemicals, materials, substance, or waste; and
3. The DEVELOPER's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of such properties that would cause such
properties or underlying or surrounding real estate or part thereof to be subject to any
restrictions on the ownership, occupancy, transferability, or use of the property under any
environmental law, rule, regulation, ordinance or statute; and
4. To indemnify, defend, and hold the CITY harmless from any and
all claims, actions, causes of action, demands, judgments, damages, injuries, administrative
orders, consent agreements, orders, liabilities, penalties, costs, expenses (including
attorney's fees and expenses), and disputes of any kind whatsoever arising out of or relating
to the DEVELOPER or any other party's use or release of any hazardous or toxic chemicals,
materials, substance, or wastes on the eligible Property regardless of cause or origin,
including any and all liability arising out of or relating to any investigation, site monitoring,
containment, cleanup, removal, restoration, or other remedial work of any kind or nature.
5.4 Compliance With Laws. The DEVELOPER shall be responsible for and
promptly and faithfully comply with, conform to and obey all present and future federal, state
and local statutes, regulations, rules, ordinances and other legal requirements applicable by
reason of this Agreement or otherwise to the Affordable Project including without limitation as
Page 17
to prevailing wage requirements. The DEVELOPER acknowledges that the use of HOME
Funds subjects the Affordable Project to extensive federal regulation and covenants and
agrees that it shall comply with, conform to and obey (and take such steps as are required of
the DEVELOPER to enable the CITY to comply with, conform to and obey) all federal
statutes, regulations, rules and policies applicable to the Project.
5.5 Existence. Qualification, and Authority. The DEVELOPER shall provide to the
CITY any evidence required or requested by the CITY to demonstrate the continuing
existence, qualification, and authority of the DEVELOPER to execute this Agreement and to
perform the acts necessary to carry out the Project.
5.6 Financial Statements and Audits. The DEVELOPER, as a subrecipient of
federal financial assistance, is required to comply with the provisions of the Single Audit Act
of 1984 (31 U.S.C. Sections 7501 et seq.), as amended. Annually, within one hundred and
eighty (180) days following: 1) the end of fiscal year(s) in which the HOME Funds are
disbursed hereunder, and 2) the end of fiscal year(s) in which this contract shall terminate,
and otherwise upon the CITY's, written request during the term of this Agreement, the
DEVELOPER, at its sole cosi: and expense shall submit to the CITY:
A. Audited annual financial statements that are current, signed, and
prepared according to generally accepted accounting principles consistently applied (except
as otherwise disclosed therein).
B. Audited Financial Statements covering the income and expenses, and
the financial transactions for the Project during the prior fiscal year.
5.7 Inspection and Audit of Books Records and Documents. The DEVELOPER
shall be accountable to the CITY for all HOME Funds disbursed for this project pursuant to
this Agreement. Any duly authorized representative of the CITY, the State, or HUD shall, at
all reasonable times, have access to and the right to inspect, copy, make excerpts or
transcripts, audit, and examine all books of accounts, records, files and other papers or
property, and other documents of the DEVELOPER pertaining to the Project or all matters
covered in this Agreement and for up to six (6) years after the expiration or termination of this
Agreement.
A. The DEVELOPER will maintain books and records for the Project using
generally accepted accounting principles. The DEVELOPER agree to maintain books and
records that accurately and fully show the date, amount, purpose and payee of all
expenditures financed with HOME Funds and to keep all invoices, receipts and other
documents related to expenditures financed with HOME Funds for not less than six (6) years
after the expiration or termination of the Agreement. Books and records must be kept
accurate and current. For purposes of this section, "books, records and documents" include,
without limitation; plans, drawings, specifications, ledgers, journals, statements,
contracts/agreements, funding information, funding applications, purchase orders, invoices,
loan documents, computer printouts, correspondence, memoranda, and electronically stored
versions of the foregoing. This section shall survive the termination of this Agreement.
B. The CITY may audit any conditions relating to this Agreement at the
CITY's expense, unless such audit shows a significant discrepancy in information reported by
the DEVELOPER in which ease the DEVELOPER shall bear the cost of such audit. The
DEVELOPER shall also comply with any applicable audit requirements of 24 CFR 92.506.
This section shall survive the termination of this Agreement.
C. The DEVELOPER will cooperate fully with the CITY, the State, and HUD
in connection with any interim or final audit relating to the Programs and the Project that may
be performed relative to the performance of this Agreement.
5.8 Inspection of Property. Any duly authorized representative of the CITY, the
State, or HUD shall, at all reasonable times, have access and the right to inspect the Property
until completion of the Project and expiration of the applicable Affordability Period within 72
hours written notice, subject to rights of the tenants.
5.9 No Other Liens. The DEVELOPER shall not create or incur, or suffer to be
created or incurred, or to exist, any additional mortgage, pledge, encumbrance, lien, charge,
or other security interest of any kind on the eligible Property, other than those related to
construction or pre -development loans in relation to the Affordable Rental Housing Project
consistent with the attached Budget EXHIBIT "C".
5.10 Nondiscrimination. The DEVELOPER shall comply with and cause any and all
contractors and subcontractors to comply with any and all federal, state, and local laws with
regard to illegal discrimination, and the DEVELOPER shall not illegally discriminate against
any persons on account of race, religion, sex, family status, age, handicap, or place of
national origin in its performance of this Agreement and the completion of the Project.
5.11 Ownership. Except as required in pursuit hereof, the DEVELOPER shall not
sell, lease, transfer, assign or otherwise dispose of ("Transfer") all or any material part of any
interest it might hold in the Property or the Project without the prior written consent of the
CITY, which consent shall not be unreasonably withheld or delayed. "Transfer" shall exclude
the leasing of any single Unit in the Project.
A. The DEVELOPER may request CITY's written approval of the granting of
the security interests in the Property described in Section 5.9 above.
B. The DEVELOPER anticipates syndicating the low income housing tax
credits that will be generated by the Project, which syndication will require the transfer of
limited partnership interests. The CITY hereby approves the initial Transfer of the limited
partnership interest to a tax credit investor and future Transfers of the limited partner interest
to affiliates of the investor, provided that in each instance the CITY is given prior written
notice, and the CITY approvers of such transfer in writing.
5.12 Payment of Liabilities. The DEVELOPER shall pay and discharge in the
ordinary course of its business all material obligations and liabilities, the nonpayment of which
could have a material or adverse impact on its financial condition, business, or assets or on
the operation of the Project(s), except such obligations and liabilities that have been
disclosed to the CITY in writing and are being contested in good faith.
Page 19
5.13 Report of Events of Default. The DEVELOPER shall promptly give written
notice to the CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 6. DISBURSEMENT OF HOME FUNDS
Without waiver of limitation, the parties agree as follows, regarding disbursement of HOME
Funds:
6.1 Loan Commitments and Financing Plan. The DEVELOPER shall submit its
most current Finance Plan for the Affordable Project to the CITY within the time frame
provided in the Project Schedule. So long as the Finance Plan is consistent with the Budget,
the CITY shall accept the Finance Plan. If the Finance Plan is not consistent with the Budget,
then within thirty (30) days after receiving the Finance Plan, the CITY, through its
Development and Resource Management Department, Housing and Community
Development Division, will review the Finance Plan and deliver notice to the DEVELOPER
either approving or disapproving the Finance Plan in its reasonable discretion. If the CITY
disapproves the Finance Plan, it will specify the reason for the disapproval and ask the
DEVELOPER to provide any additional information the CITY may need to approve the
Finance Plan. The failure of the CITY to send notice within such thirty (30) day time period
shall be deemed an approval of the Finance Plan.
6.2 Finance Plan Content, The Finance Plan shall contain all Affordable Project
pre -construction and construction permanent loan or letters of intent from one or more
qualified public/private lenders or funding sources, in sufficient amounts, combined with any
other developer financing, for the DEVELOPER to complete construction of the Affordable
Project. The total amount of the liens to be recorded against the Property as presented in the
Finance Plan shall not exceed the DEVELOPER's estimated construction Budget.
6.3 Use of HOME Program Funds. The DEVELOPER warrants covenants and
agrees that it shall request HOME Program Funds only for reimbursement/payment of HOME
eligible costs as identified in the attached Budget, limited to the amount needed for the
affordable units. The City's obligations shall in no event exceed the HOME Fund amount
specified in the Agreement.
A. If any such Funds shall be determined to have been requested and/or
used by the DEVELOPER for something other than for HOME eligible costs, and subject to
the notice and cure provisions of Section 10.2 hereunder, an equal amount from nonpublic
funds shall become immediately due and payable by the DEVELOPER to the CITY; provided,
however, that the DEVELOPER shall, subject to its full cooperation with the CITY, be entitled
to participate in any opportunity to remedy, contest, or appeal such determination.
B. In the event HOME Funds are requested to reimburse/pay for Eligible
Costs which subsequently lose eligibility as Eligible Costs, the DEVELOPER shall
immediately return such HOME Funds to the CITY.
C. The CITY will disburse HOME Funds, only to the DEVELOPER through
proper invoicing, for HOME eligible costs of the Project as provided in this Article 6.
Page 20
6.4 Conditions Precedent to Disbursement. The CITY shall not be obligated to
make or authorize any disbursements of HOME Funds or take any other action under this
Agreement unless the following conditions are satisfied:
A. There exists no Event of Default as provided in Article 10, nor any act,
failure, omission or condition that with the passage of time or the giving of notice or both
would constitute an Event of Default.
B. The DEVELOPER has submitted evidence that the combined monies
from the Funding Sources and the HOME Funds are not less than Eleven Million Seven
Hundred Fifty Six Thousand Nine Hundred Seventy Six dollars and 00/100 ($11,756,976)
attached hereto in EXHIBIT "C", the amount necessary to complete the Project;
C. The CITY has approved the requested payment of HOME eligible
Project/Property costs.
D. The DEVELOPER has acquired insurance coverage and delivered to the
CITY evidence of insurance as required in Article 9.
E. The DEVELOPER is current with its compliance of all reporting
requirements set forth in this Agreement.
F. The DEVELOPER has provided the CITY with a written request for
HOME Funds (in CITY -approved Form), for payment of HOME eligible Project costs, and
detailing such Eligible Costs applicable to the request.
G. The CITY has received Certification required by Section 6.6 of this
Agreement.
H. The CITY has received, and continues to the have the right to disburse,
HOME Funds.
6.5 Request for and Disbursement of HOME Program Funds. The DEVELOPER
shall request disbursement of HOME Funds using the CITY's Request for Disbursement of
Funds Form, or a similar document. The DEVELOPER shall only request a maximum of One
Million Five Hundred Thousand dollars and 00/100 ($1,500,000) in HOME Program
assistance. All requests should provide in detail such Eligible Costs applicable to the
request. All requests for HOME funds disbursement shall be accompanied with the
Certification required by Section 6.6 of this Agreement.
6.6 DEVELOPER Certification. The DEVELOPER shall submit to the CITY a
written certification that, as of the date of the Request for Disbursement ("Certification"):
A. The representations and warranties contained in or incorporated by
reference in this Agreement continue to be true, complete and accurate in material respects;
B. The DEVELOPER has carried out all of its obligations and is in
compliance with all the obligations or covenants specified in this Agreement, to the extent
Page 21
that such obligations or covenants are required to have been carried out or are applicable at
the time of the request for the Disbursement;
C. The DEVELOPER has not committed or suffered an act, event,
occurrence, or circumstance that constitutes an Event of Default or that with the passage of
time or giving of notice or both would constitute an Event of Default; and
D. The Disbursement requested will be used solely for reimbursement of
eligible costs and must be supported by the itemized obligations that have been properly
incurred and are properly chargeable in connection with the Project.
6.7 Disbursement of Funds. Disbursements of HOME Program Loan proceeds
shall occur within thirty (30) days after the CITY receives the Certification and to the extent of
annually allocated and available HOME Funds,
ARTICLE 7. DEVELOPMENT AND CONSTRUCTION OF PROJECT
Without waiver of limitation, the parties agree as follows
7.1 Pre -construction Meeting Regarding HOME Program Processes and
Procedures. CITY will schedule, and the DEVELOPER shall attend a meeting prior to
construction with the CITY's Housing and Community Development Division for the purpose
of outlining HOME program processes and procedures.
7.2 Commencement and Completion of Project. The DEVELOPER shall
commence construction and, record a Notice of Completion upon completion of construction
in accordance with the project schedule.
7.3 Contracts and Subcontracts. Consistent with Section 5.3, all demolition,
hazardous waste abatement, construction work and professional services for the Affordable
Project shall be performed by persons or entities licensed or otherwise legally authorized to
perform the applicable work or service in the State of California and the City of Fresno. The
DEVELOPER shall provide the CITY with copies of all agreements it has entered into with
any and all general contractors for the Affordable Project. The DEVELOPER shall require
that each such general contractor agreement contain a provision whereby the party(ies) to
the agreement other than the DEVELOPER agree to: (i) notify the CITY immediately of any
event of default by the DEVELOPER thereunder; (ii) notify the CITY immediately of the filing
of a mechanic's lien, (iii) notify the CITY immediately of termination or cancellation of the
agreement; and (iv) provide the CITY, upon the CITY's request, an Estoppel Certificate
certifying that the agreement is in full force and effect and the DEVELOPER is not in default
thereunder. The DEVELOPER agrees to notify the CITY immediately of termination or
cancellation of any such agreement(s), notice of filing of a mechanic's lien, or breach or
default by other party(ies) thereto.
7.4 Damage to Property. To the extent consistent with the requirements of any
permitted encumbrance, or as otherwise approved by the CITY, and subject to Article 9 of
this Agreement, if any building or improvement constructed on the Property is damaged or
destroyed by an insurable cause, the DEVELOPER shall, at its cost and expense, diligently
Page 22
undertake to repair or restore said buildings and improvements consistent with the original
Plans and Specifications of the Project Unit. Such work or repair shall commence within
ninety (90) days after the insurance proceeds are made available to the DEVELOPER and
shall be complete within one (1) year thereafter. All insurance proceeds collected for such
damage or destruction shall be applied to the cost of such repairs or restoration and, if such
insurance proceeds shall be insufficient for such purpose, the DEVELOPER shall make up
the deficiency.
7.5 Fees, Taxes and Other Levies. The DEVELOPER shall be responsible for
payment of all fees, assessments, taxes, charges and levies imposed by any public authority
or utility company with respect to the Property or the Project, and shall pay such charges
prior to delinquency. However, the DEVELOPER shall not be required to pay and discharge
any such charge so long as: (a) the legality thereof is being contested diligently and in good
faith and by appropriate proceedings, and (b) if requested by the CITY, the DEVELOPER
shall deposit with the CITY any funds or other forms of assurances that the CITY, in good
faith, may determine from time to time are appropriate to protect the CITY from the
consequences of the contest being unsuccessful.
7.6 Financing. The DEVELOPER shall promptly inform the CITY of any new
financing or funding, and the DEVELOPER shall provide the CITY copies of all agreements
with any and all Funding Sources for this Project. The DEVELOPER agrees to notify the
CITY immediately of termination or cancellation of any such agreement(s) or receipt of notice
of default/default thereunder. The DEVELOPER shall comply with all obligations of any such
agreement(s) with any and all Funding Sources until the respective expiration of such
agreement(s). In the event the DEVELOPER fails to comply with its obligations of this
section, the loan shall become immediately due and payable as provided for in this
Agreement. This section shall survive expiration or termination of this Agreement.
7.7 Identification Signage. Before the start of construction, the DEVELOPER shall
place a poster or sign, with a minimum four feet by four feet in size, identifying the City of
Fresno Development and Resource Management Department, Housing and Community
Development Division as a Project participant. The sign shall also include the CITY's
Housing Logo, as well as the Equal Housing Opportunity logo, as mandated by HUD. Font
size shall be a minimum of 4 inches. The poster/sign shall be appropriately placed, and shall
be in place throughout the Project construction.
7.8 Inspections. 'The DEVELOPER shall permit, facilitate, and require its
contractors and consultants to permit and facilitate observation and inspection at the job site
by the CITY and other public authorities during reasonable business hours, for determining
compliance with this Agreement, including without limitation those biennial on-site inspections
required of the CITY by 24 CFR 92.504(d).
7.9 Utilities. The DEVELOPER shall be responsible, at its sole cost and expense,
to determine the location oi' any utilities on the Property and to negotiate with the utility
companies for and to relocate the utilities, if any, as necessary to complete the Project.
7.10 Insurance and Bonds. Upon CITY's reasonable request, the DEVELOPER
Page 23
shall submit for CITY approval bonds, certificates and applicable endorsements for all
insurance and bonds required by this Agreement in accordance with Article 9.
7.11 Mechanic's Liens and Stop Notices. If any claim of lien is filed against the
Property or a stop notice affecting any financing, HOME Program Funds or Funding Sources
for the Project is served on the CITY or any other third party in connection with the Project, the
DEVELOPER shall, within twenty (20) days of such filing or service, either pay and fully
discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to
the CITY a surety bond in sufficient form and amount, or provide the CITY with other
assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or
discharged.
A. If the DEVELOPER fails to discharge, bond or otherwise satisfy the CITY
with respect to any lien, encrambrance, charge or claim referred to in this Section 7.10, then,
in addition to any other right or remedy, the CITY may, but shall not be obligated to,
discharge such lien, encumbrance, charge, or claim at the DEVELOPER expense.
Alternatively, the CITY may require the DEVELOPER to immediately deposit with the CITY
the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof.
The CITY may use such deposit to satisfy any claim or lien that is adversely determined
against the DEVELOPER. The DEVELOPER hereby agree to indemnify and hold the CITY
harmless from liability for such liens, encumbrances, charges or claims together with all
related costs and expenses.
7.12 Permits and Licenses. Upon CITY's reasonable request, the DEVELOPER
shall submit, for CITY approval, all the necessary permits and licenses required for
Commencement of Construction. As the CITY may reasonably request, the DEVELOPER, at
its sole cost and expense, s call provide to the CITY copies of any and all permit approvals
and authorizations including plot plan, plat, zoning variances, sewer, building, and other
permits required by governmental authorities other than the CITY in pursuit of the Affordable
Rental Housing Project, and for its stated purposes in accordance with all applicable building,
environmental, ecological, landmark, subdivision, zoning codes, laws, and regulations. The
DEVELOPER is responsible at its sole cost and expense, to determine the location of any
utilities on the Property and to negotiate with the utility companies for and to relocate the
utilities, if any, as necessary to complete the Project.
7.13 Plans and Specifications.
A. The DEVELOPER has submitted to the CITY preliminary plans and
specifications for the Project under Conditional Use Permit Application No. C-10-085
("Affordable Preliminary Plans"). The DEVELOPER will construct the Project in full
conformance with the CITY -approved Conditional Use Permit and plans and specifications
and modifications thereto approved by the CITY. The DEVELOPER shall obtain the CITY's
prior written approval for any modifications to the plans and specifications.
B. The HOME Agreement shall contain by reference the design and site
plan of the Project; such design must be approved by the City Council with the HOME
Agreement.
Page 24
7.14 Before Commencement of Construction, the DEVELOPER submit to the CITY,
for its review and approval, the final Plans and Specifications for the Project. The
DEVELOPER will construct the Affordable Rental Housing in full conformance with the Plans
and Specifications and modifications thereto approved by the CITY. The DEVELOPER shall
obtain the CITY's prior written approval for any modifications to the Plans and Specifications.
7.15 Project Responsibilities/Public Work -Prevailing Wage Requirements. The
DEVELOPER shall be sole!y responsible for all aspects of the DEVELOPER's conduct in
connection with the Project, including but not limited to, compliance with all local, state and
federal laws including, without limitation, as to prevailing wage and public bidding
requirements. The Council of the City of Fresno has adopted Resolution No. 82-297
ascertaining the general prevailing rate of per diem wages and per diem wages for holidays
and overtime in the Fresno area for each craft, classification, or type of workman needed in
the execution of contracts for the CITY. A copy of the resolution is on file at the Office of the
City Clerk. Actual wage schedules are available upon request at CITY's Construction
Management Office. Without limiting the foregoing, the DEVELOPER shall be solely
responsible for the quality and suitability of the work completed and the supervision of all
contracted work, qualifications and financial conditions of and performance of all contractors,
subcontractors, consultants and suppliers. Any review or inspection undertaken by the CITY
with reference to the Project and/or payroll monitoring/auditing is solely for the purpose of
determining whether the DEVELOPER are properly discharging its obligation to the CITY,
and shall not be relied upon by the DEVELOPER or by any third parties as a warranty or
representation by the CITY as to governmental compliance and/or the quality of the work
completed for the Project.
7.16 Property Condition. The DEVELOPER shall maintain the Affordable Project
Property and all improvements on site in a reasonably good condition and repair (and, as to
landscaping, in a healthy condition), all according to the basic design and related plans, as
amended from time to time. The DEVELOPER and those taking direction under the
DEVELOPER shall: (i) maintain all on-site improvements according to all other applicable
law, rules, governmental agencies and bodies having or claiming jurisdiction and all their
respective departments, bureaus, and officials; (ii) keep the improvements free from graffiti;
(iii) keep the Affordable Project Property free from any accumulation of debris or waste
material; (iv) promptly make repairs and replacements to on-site improvements; and (v)
promptly replace any dead, or diseased plants and/or landscaping (if any) with comparable
materials.
7.17 Quality of Work. The DEVELOPER shall ensure that construction of the
proposed Project employs building materials of a quality suitable for the requirements of the
Project. The DEVELOPER shall cause completion of construction of the proposed Project on
the Property in full conformance with applicable local, state and federal laws, statutes,
regulations, and building and housing codes.
7.18 Relocation. If and to the extent that construction of the proposed Project results
in the permanent or temporary displacement of residential tenants, homeowners or
businesses, the DEVELOPER shall comply with all applicable local, state and federal statutes
and regulations with respect to relocation planning, advisory assistance and payment of
monetary benefits. The DEVELOPER shall be solely responsible for payment of any
Page 25
relocation benefits to any displaced persons and any other obligations associated with
complying with said relocation laws.
7.19 Reporting Requirements. The DEVELOPER shall submit to the CITY the
following Project reports:
A. From the date of Commencement of the Project, until issuance of the
final Certificate of Completion, the DEVELOPER shall submit a Quarterly Report, in a form
approved by the CITY, which will include, at a minimum, the following information: progress
of the Project and affirmative marketing efforts (as applicable). The Quarterly Reports are
due fifteen (15) days after each March 3151, June 30th, September 30th, and December 3151
during said period.
B. Annually, beginning on the first day of the month following the CITY's
issuance of the final Certificate of Completion, and continuing until the termination of the
Agreement, the DEVELOPER shall submit an Annual Report to the CITY, in a form approved
by the CITY. The Annual Report shall include, at a minimum, the following information: the
rents, the annual income and the family size of the Households, the date of tenancy
commenced for each rental Unit, tenant recertification information, and an owner certification
from an officer of the DEVELOPER that the Project is in compliance with the Affordable
Rental Housing Requirements, and such other information the CITY may be required by law
to obtain. The DEVELOPER shall provide any additional information reasonably requested
by the CITY.
C. Annually, beginning on the first day of the month following the CITY's
issuance of the final Certificate of Completion, and continuing until the expiration of the
Agreement, the DEVELOPER shall submit proof of insurance as required in Article 9.
7.20 Schedulinq and Extension of Time; Unavoidable Delay in Performance. It shall
be the responsibility of the DEVELOPER to coordinate and schedule the work to be
performed so that the Commencement of the Project and issuance of the Certificate of
Completion will take place in accordance with the provisions of the Agreement and Project
Schedule. The time for performance contained in the Project Schedule shall be automatically
extended upon the following:
A. The time for performance of provisions of the Agreement by either party
shall be extended for a period equal to the period of any delay directly affecting the Project or
this Agreement which is caused by: war, insurrection, strike or other labor disputes, lock -outs,
riots, floods, earthquakes, fires, casualties, acts of God, acts of a public enemy, epidemics,
quarantine restrictions, freight embargoes, lack of transportation, suits filed by third parties
concerning or arising out of this Agreement, or unseasonable weather conditions. An
extension of time for any of the above specified causes will be granted only if written notice
by the party claiming such extension is sent to the other party within ten (10) calendar days
from the date the affected party learns of the commencement of the cause and the resulting
delay and such extension of time is accepted by the other party in writing. In any event, the
Project must be completed no later than one hundred eighty (180) calendar days after the
scheduled completion date specified in this Agreement, notwithstanding any delay caused by
that included in this section.
Page 26
B. Any and all extensions hereunder shall be by mutual written agreement
of the CITY's Housing and Community Development Division Manager and the DEVELOPER
and shall not cumulatively exceed one hundred eighty (180) days.
7.21 Certificate of Completion. Upon completion of the construction of the Project,
the DEVELOPER shall certify in writing to the CITY that the Affordable Rental Housing has
been constructed in accordance with the plans and specifications approved by the CITY.
Upon completion of the Affordable Rental Housing, the DEVELOPER shall also submit to the
CITY a cost -certifying final budget where the DEVELOPER shall identify the actual costs of
construction of the Project. This final cost -certification shall identify costs in line -item format,
consistent with the Project Budget, Upon a determination by the CITY that the DEVELOPER
is in compliance with all of the DEVELOPER's construction obligations, as specified in this
Agreement, the CITY shall furnish, within thirty (30) calendar days of a written request by the
DEVELOPER, a recordable Certificate of Completion for the Project in the form attached
hereto as EXHIBIT "E". The CITY will not unreasonably withhold or delay furnishing the
Certificate of Completion. If the CITY fails to provide the Certificate of Completion within the
specified time, it shall provide the DEVELOPER with a written statement indicating in what
respects the DEVELOPER has failed to complete the Project in conformance with this
Agreement or has otherwise failed to comply with the terms of this Agreement, and what
measures the DEVELOPER will need to take or what standards it will need to meet in order
to obtain the Certificate of Completion. Upon the DEVELOPER taking the specified
measures and meeting the specified standards, the DEVELOPER will certify to the CITY in
writing of such compliance and the CITY shall deliver the recordable Certificate of Completion
to the DEVELOPER in accordance with the provisions of this section.
ARTICLE 8. PROJECT OPERATIONS
8.1 Operation of the Project. The DEVELOPER shall lease, operate and manage
the Project in full conformity with the terms of this Agreement.
8.2 Occupancy Requirements. Fifteen (15) Project HOME Units shall be rented
and occupied by, or if vacant, available for rental occupancy by person(s) whose annual
household income at the time of initial occupancy is not greater than fifty percent (50%) of the
most recent annual median income, calculated and published by HUD for the Fresno
Metropolitan Statistical Area, applicable to such household's size, and at an affordable price
consistent with HOME Program regulations (as variously provided at 24 CFR 92.252) for the
term of this Agreement. The DEVELOPER shall comply with the income targeting
requirements of 24 CFR 92.216.
8.3 Leasing the Project. Before leasing any Units, the DEVELOPER shall submit
its proposed form of Lease for CITY's review and approval. The DEVELOPER covenant and
agree to utilize only Leases that have been approved in advance by CITY. The CITY shall
respond to the DEVELOPER submission of a sample Lease within thirty (30) days. Should
CITY not respond within thirty (30) days of Lease submittal, the DEVELOPER shall be
authorized to use the submitted sample Lease. Additionally, the DEVELOPER agrees not to
terminate the tenancy or to refuse to renew a Lease with a tenant of the Affordable Rental
Housing assisted with HOME Funds except for serious or repeated violation of the terms and
Page 27
conditions of the Lease, for violation of applicable federal, state, or local law, or for other
good cause. Any such termination or refusal to renew must be preceded by not less than
thirty (30) days written notice served by the DEVELOPER or its authorized management
entity upon the tenant specifying the grounds for such action. The DEVELOPER agrees it
shall annually report to CITY the number of Leases that were not renewed or terminated and
the reason for such non -renewal or termination.
8.4 Lease Provisions. In addition to the requirements of 24 CFR 92.253, the
Leases are subject to the following:
A. The DEVELOPER shall include in Leases for all Units, provisions which
authorize the DEVELOPER to immediately terminate the tenancy of any Household of which
one or more members misrepresented any fact material as to the qualification as a Very Low -
Income Household. Each such Lease shall also provide that the Household is subject to
annual certification, and that, if the Household's annual income increases above the
applicable limits for Very Low -Income Families such Household's rent may be subject to
increase to the lesser of: 1) the amount payable by tenant under state or local law; or 2) thirty
percent (30%) of the Household's actual adjusted monthly income, whichever is greater.
8.5 Final Management Plan. Before leasing the Affordable Rental Housing and at
least sixty (60) calendar days prior to the Project Completion Date, the DEVELOPER shall
submit to the CITY, for review and approval, a plan for marketing and managing the proposed
Affordable Rental Housing ("Final Management Plan"). The Final Management Plan shall
address in detail how the DEVELOPER or its designated property management entity plans
to market the availability of Units to prospective tenants and how the DEVELOPER plans to
certify the eligibility of potential tenants. The Final Management Plan shall also address how
the DEVELOPER and/or the property management entity plan to manage and maintain the
Affordable Rental Housing, and shall include appropriate financial information and
documentation. The Final Management Plan shall contain detailed descriptions of policies
and procedures with respect to tenant selections and evictions. Topics to be covered in
these procedures shall include at a minimum the following:
® Interviewing procedures for prospective tenants;
• Previous rental history of tenants with references;
i Credit reports and checks;
• Criminal background checks;
• Deposit amounts, purpose, use and refund policy;
• Employrnent/Income verification;
O Occupancy restrictions;
• Income Limits;
f Equal Housing Opportunity Statement;
• Restrictions on use of the premises; and
o Tenant/Landlord dispute resolution procedures.
The Final Management Plan shall contain copies of all standardized forms
associated with the above listed topics. The Final Management Plan shall include a form
Lease agreement that the DEVELOPER proposes to enter into with Project tenants. The
DEVELOPER shall abide by the terms of this Final Management Plan, approved by the CITY,
in marketing, managing and maintaining the Housing.
At least ninety (90) calendar days prior to the Project Completion Date, the
DEVELOPER shall also submit any proposed management contract to the CITY for prior
review. The CITY shall have the right to review any proposed amendments, other than
renewals to the management contract, and any new management contracts during the term
of this Agreement. Such management contract(s) shall contain a provision expressing this
right.
8.6 Property Management. With respect to the Project, the DEVELOPER shall
comply with the following:
A. Management Responsibilities. The DEVELOPER and/or through its
designated management entity, is specifically responsible for all management functions with
respect to the Affordable Rental Housing Project including, without limitation, the selection of
tenants, certification and re -certification of Household size and income, evictions, collection of
Rents and deposits, construction management, affirmative marketing, maintenance,
landscaping, routine and extraordinary repairs, replacement of capital items and security.
The CITY shall have no responsibility for such management of the Project.
8.7 Maintenance and Security. The DEVELOPER shall at its own expense
maintain the Affordable Rental Housing in good condition, in good repair and in decent, safe,
sanitary, habitable and tenantable living conditions for the benefit of the Unit occupants. The
DEVELOPER shall not commit or permit any waste on or to the Affordable Rental Housing,
and shall prevent and/or rectify any physical deterioration of the housing. The DEVELOPER
shall maintain the housing in conformance with all applicable federal, state and local laws,
ordinances, codes and regulations, the Final Management Plan, and this Agreement.
8.8 Nondiscrimination. All of the Units shall be available for occupancy on a
continuous basis to members of the general public who are income eligible. The
DEVELOPER shall not illegally discriminate or segregate in the development, construction,
use, enjoyment, occupancy or conveyance of any part of the Affordable Rental Housing
Project or Property on the basis of race, color, ancestry, national origin, religion, sex, age,
marital status, family status, source of income/rental assistance subsidy, physical or mental
disability, Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related conditions (ARC),
sexual orientation, or any other arbitrary basis. The DEVELOPER shall otherwise comply
with all applicable local, state and federal laws concerning nondiscrimination in housing. The
DEVELOPER nor any person claiming under or through the DEVELOPER, shall establish or
permit any such practice or practices of illegal discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants or vendees of any Unit or in
connection with employment of persons for the construction of any Unit. All deeds or
contracts made or entered into by the DEVELOPER as to the Units or the housing project or
portion thereof, shall contain covenants concerning nondiscrimination consistent with this
section. The DEVELOPER shall include a statement in all advertisements, notices and signs
for availability of Units for rent to the effect that the DEVELOPER is an Equal Housing
Opportunity Provider.
Page 29
A. Nothing in this section is intended to require the DEVELOPER to change
the character, design, use or operation of the Project; or to require the DEVELOPER to
obtain licenses or permits other than those required for the Project.
8.9 Rent Schedule and Utility Allowances. The DEVELOPER covenants and
agrees not to charge rent for Units in an amount which exceeds those rents prescribed in the
HOME Program requirements applicable to Affordable Housing in the Fresno, California area,
as established by HUD, and further covenants and agrees not to impose a monthly allowance
for utility services to tenants of such Units in excess of an amount approved by HUD in
accordance with 24 CFR 92.252. The DEVELOPER agrees to furnish to the CITY a
certificate setting forth the maximum monthly rentals for Units and the monthly allowances for
utilities and services to be charged during any annual period until the expiration of the
Affordability Period. The DEVELOPER shall re-examine the income of each tenant
Household living in the Unit on an annual basis.
ARTICLE 9. INSURANCE AND INDEMNITY
Without waiver of limitation, the parties agree as follows regarding the DEVELOPER's
insurance and indemnity obligations:
9.1 Indemnification_, The DEVELOPER shall indemnify, hold harmless and defend
the CITY and each of its officers, officials, employees, agents and volunteers from any and all
loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or
strict liability, including but not limited to personal injury, death at any time and property
damage) incurred by the CITY, the DEVELOPER or any other person, and from any and all
claims, demands and actions in law or equity (including attorney's fees and litigation
expenses), arising or alleged to have arisen directly or indirectly out of performance of this
Agreement. The DEVELOPER's obligations under the preceding sentence shall apply
regardless of whether CITY or any of its officers, officials, employees, agents or volunteers
are negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or
damages caused solely by the gross negligence, or caused by the willful misconduct, of CITY
or any of its officers, officials, employees, agents or volunteers.
A. If the DEVELOPER should contract all or any portion of the work to be
performed under this Agreement, the DEVELOPER shall require each contractor and
subcontractor to indemnify, hold harmless and defend the CITY and each of its officers,
officials, employees, agents and volunteers in accordance with the terms of the preceding
paragraph.
B. This section shall survive termination or expiration of this Agreement.
9.2 Insurance. Throughout the life of this Agreement, the DEVELOPER shall itself
and/or through its consultant(s), assignee(s), nominee(s), contractors and subcontractors pay
for and maintain in full force and effect all policy(ies) of insurance required hereunder with
(an) insurance company(ies) either: 1) admitted by the California Insurance Commissioner to
do business in the State of California and rated not less than "A -VII" in Best's Insurance
Rating Guide, or 2) authorized by the CITY's Risk Manager. The following policies of
insurance are required:
Page 30
A. Until issuance of Certificate(s) of Completion, BUILDERS RISK (Course
of Construction) insurance in an amount equal to the completed value of the Affordable
Project with no coinsurance penalty provisions.
B. Following issuance of Certificate(s) of Completion, Commercial Property
insurance which shall be at least as broad as the most current version of Insurance Service
Office (ISO) Commercial Property Form CP 10 30 (Cause of Loss — Special Form), with limits
of insurance in an amount equal to full one hundred percent (100%) replacement cost
(without deduction for depreciation) of the improvements with no coinsurance penalty
provisions. Such insurance shall include coverage for business income, including "rental
value", in an amount equal to the two (2) years of the annual rent generated by the
improvements. Coverage for business income, including "rental value", shall be at least as
broad as the most current version of Insurance Service Office (ISO) Commercial Property
Form CP 00 30.
1. The above described policy(ies) of insurance shall be endorsed to
provide that the coverage shall not be cancelled, non -renewed, reduced in coverage or in
limits except after thirty (30) calendar day written notice has been given to CITY an
unrestricted thirty (30) day written notice in favor of the CITY, of policy cancellation, change
or reduction of coverage. Upon issuance by the insurer, broker, or agent of a notice of
cancellation, non -renewal, change or reduction in coverage, the DEVELOPER or its
contractors/subcontractors, as the case may be, shall furnish CITY with a new certificate and
applicable endorsements for such policy(ies). In the event the policy is due to expire during
the term of this Agreement, the DEVELOPER shall provide a new certificate, and applicable
endorsements, a new certificate evidencing renewal of such policy shall be provided not less
than fifteen (15) days prior to the expiration date of the expiring policy. Upon issuance by the
insurer, broker, or agent of a notice of cancellation, change or reduction in coverage, the
DEVELOPER or its contractors/subcontractors, as the case may be, shall file with the CITY a
certified copy of the new or renewal policy and certificates for such policy.
2. The Builders Risk (Course of Construction) and Property insurance
policies shall name the CITY as a loss payee. The insurance required herein shall contain no
special limitations on the scope of protection afforded to the CITY.
3. If at any time during the life of this Agreement or any extension, the
DEVELOPER fails to maintain the required insurance in full force and effect, all work under
this Agreement shall be discontinued immediately, until notice is received by the CITY that
the required insurance has been restored to full force and effect and that the premiums
therefore have been paid for a period satisfactory to the CITY. Any failure to maintain the
required insurance, subject to notice and cure requirements herein, shall be sufficient cause
for the CITY to terminate this Agreement.
9.3 Bonds. The DEVELOPER shall pay for and maintain good and sufficient surety
bonds from a corporate surety, admitted by the California Insurance Commissioner to do
business in the State of California and Treasury -listed, in a form satisfactory to the CITY and
naming the CITY as Co -Obligee.
A. The "Faithful Performance Bond" shall be at least equal to one hundred
percent (100%) of the DEVELOPER's estimated construction costs, as reflected in the
Page 31
DEVELOPER's pro forma budget, attached hereto as EXHIBIT "C", to guarantee faithful
performance of the Affordable Project, within the time prescribed, in a manner satisfactory to
the CITY, consistent with this Agreement, and that all materials and workmanship will be free
from original or developed defects.
B. The "Material and Labor Bond" shall be at least equal to one hundred
percent (100%) of the DEVELOPER's estimated construction costs, as reflected in the
DEVELOPER's pro forma budget, attached hereto as EXHIBIT "C", to satisfy claims of
material supplies and of mechanics and laborers employed for this Affordable Project. The
bond shall be maintained by the DEVELOPER in full force and effect until the Affordable
Project is completed, and until all claims for materials and labor are paid, released, or time
barred, and shall otherwise comply with any applicable provisions of the California Civil Code.
C. In lieu of the bonds required above, CITY, in its sole discretion, may
accept from the DEVELOPER an Irrevocable Standby Letter of Credit issued with the CITY
named as the sole beneficiary in the amount(s) of the bonds required above. The Irrevocable
Standby Letter of Credit is to be issued by a bank, and in a form, acceptable to CITY. This
Irrevocable Standby Letter of Credit shall be maintained by the DEVELOPER in full force and
effect until CITY is provided with a recorded Notice of Completion for construction of the
Affordable Project and shall be subject to and governed by the laws of the State of
California."
ARTICLE 10. DEFAULT AND REMEDIES
10.1 Events of Default. The parties agree that each of the following shall constitute
an "Event of Default" for purposes of this Agreement after the cure period in Section 10.2 has
expired without a cure:
A. The DEVELOPER's use of HOME Funds for costs other than Eligible
Costs or for uses not permitted by the terms of this Agreement;
B. The DEVELOPER's failure to obtain and maintain the insurance
coverage required under this Agreement;
C. Except as otherwise provided in this Agreement, the failure of
DEVELOPER to punctually and properly perform any other covenant or agreement contained
in this Agreement including without limitation the following: 1) the DEVELOPER's substantial
deviation in the Project work specified in the Project Description as identified in this
Agreement, without the CITY's prior written consent; 2) DEVELOPER's use of defective or
unauthorized materials or defective workmanship in pursuit of the Project; 3) the
DEVELOPER's failure to commence or complete the Project, as specified in this Agreement,
unless delay is permitted under Section 7.20 of this Agreement; 4) the cessation of the
Project for a period of more than fifteen (15) consecutive days (other than as provided at
Section 7.20 of this Agreement) prior to submitting to the CITY, pursuant to Section 7.21,
certification that the Project is complete; 5) any material adverse change in the condition of
DEVELOPER or the Project that gives the CITY reasonable cause to believe that the Project
cannot be completed by the scheduled completion date according to the terms of this
Agreement; 6) the DEVELOPER's failure to remedy any deficiencies in record keeping or
Page 32
failure to provide records to the CITY upon the CITY's request; 7) the DEVELOPER's failure
to substantially comply with any federal, state or local laws or applicable CITY restrictions
governing the Project, including but not limited to provisions of this Agreement pertaining to
equal employment opportunity, nondiscrimination and lead-based paint;
D. Any representation, warranty, or certificate given or furnished by or on
behalf of the DEVELOPER shall prove to be materially false as of the date of which the
representation, warranty, or certification was given, or that the DEVELOPER concealed or
failed to disclose a material fact to the CITY, provided, however, that if any representation,
warranty, or certification that proves to be materially false is due merely to the DEVELOPER
inadvertence, the DEVELOPER shall have a thirty (30) day opportunity after written notice
thereof to cause such representation, warranty, or certification to be true and complete in
every respect;
E. The DEVELOPER shall file, or have filed against it, a petition of
bankruptcy, insolvency, or similar law, state or federal, or shall file any petition or answer
seeking, consenting to, or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief, and such petition shall not have been
vacated within fourteen (14) days; or shall be adjudicated bankrupt or insolvent, under any
present or future statute, law, regulation, under state or federal law, and such judgment or
decree is not vacated or set aside within fourteen (14) days;
F. The DEVELOPER failure, inability or admission in writing of its inability to
pay its debts as they become due or the DEVELOPER's assignment for the benefit of
creditors;
G. A receiver, trustee, or liquidator shall be appointed for the DEVELOPER
or any substantial part of the DEVELOPER's assets or properties, and not be removed within
ten (10) days;
H. The DEVELOPER's breach of any other material condition, covenant,
warranty, promise or representation contained in this Agreement not otherwise identified
within this Section; and
I. Any substantial or continuous breach by the DEVELOPER of any
material obligation owed by the DEVELOPER imposed by any other agreement with respect
to the financing, development, construction or operation of the Project, whether or not the
CITY is a party to such agreement.
10.2 Notice of Default and Opportunity to Cure. The CITY shall give written notice to
the DEVELOPER of any Event of Default by specifying: 1) the nature of the event or
deficiency giving rise to the default; 2) the action required to cure the deficiency, if any action
to cure is possible; and 3) a date, which shall not be less than the lesser of any time period
provided in this Agreement, any time period provided for in the notice, or thirty (30) calendar
days from the date of the notice, by which such deficiency must be cured, provided that if the
specified deficiency or default cannot reasonably be cured within the specified time, with the
CITY's written consent, the DEVELOPER shall have an additional reasonable period to cure
so long as it commences cure within the specified time and thereafter diligently pursues the
Page 33
cure in good faith. The CITY acknowledges and agrees that the DEVELOPER shall have the
right to cure any defaults hereunder and that notice and cure rights hereunder shall extend to
any and all partners of the DEVELOPER that are previously identified in writing delivered to
the CITY in the manner provided in this Agreement.
10.3 Remedies Upon an Event of Default. Upon the happening of an Event of
Default by the DEVELOPER and a failure to cure said Event of Default within the time
specified, the CITY's obligation to disburse HOME Funds shall terminate. The CITY may
also at its option and without notice institute any action, suit, or other proceeding in law, in
equity or otherwise, which it shall deem necessary or proper for the protection of its interests
and may without limitation proceed with any or all of the following remedies in any order or
combination that the CITY may choose in its sole discretion:
A. Terminate this Agreement immediately upon written notice to the
DEVELOPER;
B. Bring an action in equitable relief: 1) seeking specific performance by
DEVELOPER of the terms and conditions of this Agreement, and/or 2) enjoining, abating or
preventing any violation of said terms and conditions, and/or 3) seeking declaratory relief;
and
C. Pursue any other remedy allowed by law or in equity or under this
Agreement.
ARTICLE 11. GENERAL PROVISIONS
Without waiver of limitation, the parties agree that the following general provisions shall apply
in the performance hereof:
11.1 Amendments. No modification or amendment of any provision of this
Agreement shall be effective unless made in writing and signed by the parties hereto. The
CITY recognizes that other Project funders and equity investors may require revisions to the
Loan Documents to be consistent with their funding and investing requirements. The CITY
agrees to reasonably consider and negotiate as to any reasonable amendments to this
Agreement to address such requirements, subject to any necessary City Council approval.
11.2 Attorney's Fees. If either party is required to commence any proceeding or
legal action to enforce or interpret any term, covenant or condition of this Agreement, the
prevailing party will be entitlE:d to recover from the other party its reasonable attorney's fees
and legal expenses.
11.3 Binding on All Successors and Assigns. Unless otherwise expressly provided
in this Agreement, all the terms and provisions of this Agreement shall be binding on and
inure to the benefit of the parties hereto, and their respective heirs, successors, assigns, and
legal representatives.
11.4 Counterparts. This Agreement may be executed in counterparts, each of which
when executed and delivered will be deemed an original, and all of which together will
Page 34
constitute one instrument. The execution of this Agreement by any party hereto will not
become effective until counterparts hereof have been executed by all parties hereto.
11.5 Disclaimer of Relationship. Nothing contained in this Agreement, nor any act of
the CITY or of the DEVELOPER, or of any other person, shall in and by itself be deemed or
construed by any person to create any relationship of third party beneficiary, or of principal
and agent, of limited or general partnership, or of joint venture.
11.6 Discretionary Governmental Actions. Certain planning, land use, zoning and
other permits and public actions required in connection with the Project including, without
limitation, the approval of this Agreement, the environmental review and analysis under
NEPA, CEQA or any other statute, and other transactions contemplated by this Agreement
are discretionary government actions. Nothing in this Agreement obligates the CITY or any
other governmental entity to grant final approval of any matter described herein. Such
actions are legislative, quasi-judicial, or otherwise discretionary in nature. The CITY cannot
take action with respect to such matters before completing the environmental assessment of
the Project under NEPA, CEQA and any other applicable statutes. The CITY cannot and
does not commit in advance that it will give final approval to any matter. The CITY shall not
be liable, in contract, law or equity, to the DEVELOPER or any of its executors,
administrators, transferees, successors -in -interest or assigns for any failure of any
governmental entity to grant approval on any matter subject to discretionary approval.
11.7 Effective Date. This Agreement shall be effective upon the date first above
written on Page 1, upon the CITY's and DEVELOPER's complete execution following City
Council approval.
11.8 Entire Agreement. This Agreement represents the entire and integrated
agreement of the parties with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations, representations or agreements, either written or oral.
11.9 Exhibits. Each exhibit and attachment referenced in this Agreement is, by the
reference, incorporated into and made a part of this Agreement.
11.10 Expenses Incurred Upon Event of Default. The DEVELOPER shall reimburse
the CITY for all reasonable expenses and costs of collection and enforcement, including
reasonable attorney's fees, incurred by the CITY as a result of one or more Events of Default
by the DEVELOPER under this Agreement.
11.11 Governing Law and Venue. Except to the extent preempted by applicable
federal law, the laws of the State of California shall govern all aspects of this Agreement,
including execution, interpretation, performance, and enforcement. Venue for filing any
action to enforce or interpret this Agreement will be Fresno, California.
11.12 Headings. The headings of the articles, sections, and paragraphs used in this
Agreement are for convenience only and shall not be read or construed to affect the meaning
or construction of any provision.
Page 35
11.13 Interpretation. This Agreement in its final form is the result of the combined
efforts of the parties. Any ambiguity will not be construed in favor or against any party, but
rather by construing the terms in accordance with their generally accepted meaning.
11.14 No Assignment or Succession. Except as may be otherwise expressly provided
by this Agreement, neither this Agreement, nor any interest of DEVELOPER in, under, or to
this Agreement, or the Project, may be assigned or transferred by the DEVELOPER without
the prior written consent of the CITY, which consent shall not be unreasonably withheld or
delayed. Any assignment without consent is null and void.
11.15 No Third -Party Beneficiary. No contractor, subcontractor, mechanic,
materialman, laborer, vendor, or other person hired or retained by the DEVELOPER shall be,
nor shall any of them be deemed to be, third -party beneficiaries of this Agreement, but each
such person shall be deemed to have agreed: (a) that they shall look to the DEVELOPER as
their sole source of recovery if not paid, and (b) except as otherwise agreed to by the CITY
and any such person in writing, they may not enter any claim or bring any such action against
the CITY under any circumstances. Except as provided by law, or as otherwise agreed to in
writing between the CITY and such person, each such person shall be deemed to have
waived in writing all right to seek redress from the CITY under any circumstances
whatsoever.
11.16 No Waiver. Neither failure nor delay on the part of the CITY in exercising any
right under this Agreement shall operate as a waiver of such right, nor shall any single or
partial exercise of any such right preclude any further exercise thereof or the exercise of any
other right. No waiver of any provision of this Agreement or consent to any departure by the
DEVELOPER therefrom shall be effective unless the same shall be in writing, signed on
behalf of the CITY by a duly authorized officer thereof, and the same shall be effective only in
the specific instance for which it is given. No notice to or demand on the DEVELOPER in any
case shall entitle the DEVELOPER to any other or further notices or demands in similar or
other circumstances, or constitute a waiver of any of the CITY's right to take other or further
action in any circumstances without notice or demand.
11.17 Nonreliance. The DEVELOPER hereby acknowledge having obtained such
independent legal or other advice as it has deemed necessary and declares that in no
manner has it relied on the CITY, it agents, employees or attorneys in entering into this
Agreement.
11.18 Notice. Any notice to be given to either party under the terms of this Agreement
shall be given by certified United States mail, postage prepaid, return receipt requested, at
the addresses specified below, or at such other addresses as may be specified in writing by
the parties.
If to the CITY: City of Fresno
Development and Resource Management Department
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
If to the HOUSING AUTHORITY:
Housing Authority of the City of Fresno
1331 Fulton Mall
Fresno, CA 93721
If to Silvercrest: Housing Authority of the City of Fresno
1331 Fulton Mall
Fresno, CA 93721
If to 1555 Santa Clara Street, LP:
1331 Fulton Mall
Fresno, CA 93721
11.19 Precedence of Documents. In the event of any conflict between the body of this
Agreement and any exhibit or attachment hereto, the terms and conditions of the body of this
Agreement will control.
11.20 Recording of Documents. The DEVELOPER agrees to cooperate with the
CITY and execute any documents required, promptly upon the CITY's request, the Deed of
Trust, and any other documents/instruments that the CITY requires to be recorded, in the
Official Records of Fresno County, California, consistent with this Agreement.
11.21 Remedies Cumulative. All powers and remedies given by this Agreement shall
be cumulative and in addition to those otherwise provided by law.
11.22 Severabilitv. The invalidity, illegality, or un -enforceability of any one or more of
the provisions of this Agreement shall not affect the validity, legality, or enforceability of the
remaining provisions hereof or thereof.
Page 37
IN WITNESS WHEREOF, the parties have executed this Agreement in Fresno,
California, the day and year first above written.
CITY OF FRESNO, a Municipal Corporation
By;
Mark Scott, Ci y Manager
(Attach notary certificate of acknowledgment)
Date: 8' - 3 0 � //
ATTEST:
REBECCA E. KLISCH
City CI rk
By: Gb
Deputy
APPROVED AS TO FORM:
JAMES SANCHEZ
City Attorney
By: L -9_y
Senior Deputy City A`,Attorney
l4ie0.
USI G TH0 IPF'THE CITY OF FRESNO,
By:
Pre ton Prince, thief Executive Office
(Attach notary certificate of acknowledgment)
Date. 091ti
1555 Santa Clara Street, LP
a CWtonPrince.,
rtnership
ByManaging General Partner
By:
C
esident
(Attach not certificate of acknowledgment)
Date:
Attachments:
CA, a body corporate and politic
EXHIBIT A:
PROPERTY DESCRIPTION
EXHIBIT B:
PROJECT DESCRIPTION AND SCHEDULE
EXHIBIT C:
BUDGET AND CASH FLOW STATEMENT
EXHIBIT D:
DECLARATION OF RESTRICTIONS
EXHIBIT E:
CERTIFICATE OF COMPLETION
EXHIBIT F.
PROMISSORY NOTE
EXHIBIT G:
DEED OF TRUST ASSIGNMENT OF RENTS
Page 38
CERTIFICATE OF ACKNOWLEDGMENT
State of California }
County of F- C-Sn ( }
On/1/I l before me, rno Gckt-c l'of PO��1�,
Date {here insert name and title of the officer)
personally appeared
Name(s) of Signer(s)
who proved to me on the basis of satisfactory evidence to be
the person (s) whose name (s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity (ies), and that by
his/her/their signature (s) on the instrument the person (s),
or the entity upon behalf of which the person (s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the
State of California that the foregoing paragraph is true and
correct.
WITNESS my hand and official seal.
*2M #18105 Z�
to 96
.:12
Signature 11U Place Notary Seal Above
Signature of Notary Public
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of (,
On before me, " r, � 5 ���C� �j a+m / P,6 r
Date `Here eIInsert Name and Title of the Officer
personally appeared �� k S C D
Names} of Signer(s)
ERICA CASTANEDA
Commission * 1837909
Z r' Notary Public - California i
Fresno County
MY Comm. Ex ares Mar 22.2013
who proved to me on the basis of satisfactory
evidence to be the persotT(s-} whose name(&) is/am
subscribed to the within instrument and acknowledged
to me that he/shef hey executed the same in
his/herftFTeir-authorized capacity(Tes), and that by
his/he0heir signature(-&'Fon 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.
WITNESS my hand and official seal.
Signature:
Place Notary Seal Above OPTIONAL Signature of Notary Public
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Document
Title or Type of Document:
Documenr5ate:
Signer(s) Other Than d Above:
Capacity(lies) Claimed by ftm
Signer's Name:
❑ Corporate Officer— Title(s):
❑ Individual
❑ Partner ---- ❑ Limited D General Top of thumb here
❑ Attorney in Fact
❑ Trustee
❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
-D.3 (1�v7- Oda JO(
7- Gyz-d 5�(7•o��iik,}
Number of Pages: l
Signer's Name:
❑ Corporate Officer — Title (s):
❑ Partner Limited ❑ General
❑ Attorney in Fac
❑ Trustee
❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
w zuua ivai onai Notary Associanon • Nauonawotary.org - 1 -800 -US NOTARY (1.800-676-6827) Item 05907
EXHIBIT A: PROPERTY DESCRIPTION
The Property is located at 503 "G" STREET, 512 "F" STREET, and 1555 SANTA CLARA
STREET.
Legal Description
Parcel (APN: 467-082-20)
LOTS 13 THROUGH 16 INCLUSIVE, IN BLOCK 55, OF THE TOWN (NOW CITY) OF
FRESNO, ACCORDING TO THE SUPPLEMENTAL MAP OF THE TOWN (NOW CITY)
OF FRESNO, RECORDED IN BOOK 1, PAGE 2 OF PLATS, RECORDS OF SAID
COUNTY
Parcel 2 (APN: 467-082-03)
LOTS 17,18, 19 BLK 55, OF THE TOWN (NOW CITY), IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO THE MAP
THEROF RECORDED IN BOOK 1 PAGE 2 OF MAPS, FRESNO COUNTY RECORDS.
Parcel 3 (APN: 467-082-04)
LOT 20 IN BLOCK 55 OF 'FHE TOWN (NOW CITY) OF FRESNO, IN THE CITY OF
FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO THE
MAP THEREOF RECORDED IN BOOK 1 PAGE 2 OF MAPS, FRESNO COUNTY
RECORDS.
1
EXHIBIT B: PROJECT DESCRIPTION AND SCHEDULE
PROJECT DESCRIPTION
The Project consists of the acquisition of property, construction of related on-site
and off-site improvements, and construction of one (1) on-site manger's unit and
sixty-nine (69) studio apartment complex, of which fifteen (15) units will be
HOME -Assisted and to be preserved as Very Low -Income Housing in
accordance with the chart below:
HOME FUNDED UNITS
50% 15
F
HOME Funds will be made available by the CITY for payment of HOME eligible
costs not to exceed the lesser of One Million Five Hundred Thousand dollars and
00/100 ($1,500,000), and the aggregate HOME Program per unit cap (24 CFR
92.250) for the fifteen (15) HOME -assisted Units as determined by the CITY, as
needed, for HOME eligible project development costs.
PROJECT SCHEDULE
Start Construction November 28, 2011
Complete Construction February 28, 2013
Complete Lease Up August 28, 2013
EXHIBIT C: BUDGET AND CASH FLOW STATEMENT
Acquisition Costs:
Purchase Price
Liens
Closing, Title & Recording Costs
Extension Payment
Other:
SUBTOTAL
Construction
Hard Costs -Residential
Hard Costs-Sitework
Bond Premium
Infrastructure Improvements
Hazardous Abate. & Monitoring
Construction Contingency ( 10%)
Contractor Overhead
Contractor Profit
SUBTOTAL
Development
Appraisal
Architect/Engineer
Environmental Assessment
Legal
Developer Fee
Other Consultants: -Financial
Other: Soft Cost Contingency
SUBTOTAL
Other Development
Real Estate Tax
Insurance
Relocation
Const Loan Title/Recording
Permits, Fees & Hookups
Impact/Mitigation Fees
Construction Loan Fees
Construction Interest
Other Loan Fees (State HF, etc.)
LIHTC Fees
Accounting/Audit
Marketing/Leasing Expenses
Rent Subsidy Reserve
Operating Reserves
Furnishings/Appliances
SUBTOTAL
Total Development Costs
'arta$
$5,153,846
$950,000
$511,347
$2,692,499
$1,000,000
-0-
';"`
$300,000
-0-
$300,000
-0-
-0-
-0-
;ut%.-
-0'
-0-
$0
-0-
-0-
-0-
`'"i:-^
$250,000
-0-
.�`.".
$135,000
-0-
-0-
$67,501 -0- $67,499
rx
-0-
-0-
-0-
-0- -0- -0-
-0-
$40,000 1
-0-
-0-
$40,000 -0- -0-
4,
-0-
-0-
-0-
-0- -0- -0-
-0-
$283,416
-0-
-0-
-0-
:' •-
$175,000
-0- 1
-0- 1
$107,501 1 -0- $67,499
'arta$
$5,153,846
$950,000
$511,347
$2,692,499
$1,000,000
-0-
';"`
$300,000
-0-
$300,000
-0-
-0-
-0-
;ut%.-
-0'
-0-
$0
-0-
-0-
-0-
`'"i:-^
$250,000
-0-
$250,000
-0-
-0-
-0-
0-
$35,000
$ 1,115,400
-0-
$1,115,400
-0-
0-
-0-
- .�
$627,700
-0-
$627,700
-0-
-0-
-0-
`;,`?K
$283,416
-0-
$283,416
-0-
-0-
-0-
't.:
$283,416
-0-
$283,416
-0-
-0-
-0-
"�` -,
$6,898,378
$950,000
$2,255,879
$2,692,499
$1,000,000
-0-
'arta$
$18,000
-0-
$18,000
-0-
-0-
-0-
.a'3 , ;a
$332,500
-0-
$332,500
-0-
-0-
-0-
_?_,Qs,
$10,000
-0-
$10,000
-0-
-0-
-0-
-0-
$130,000
-0-
$130,000
-0-
-0-
-0-
$35,000
$ 1,115,400
-0-
$1,115,400
-0-
-0-
-0-
- .�
$50,000
-0-
$50,000
-0-
-0-
-0-
$43,611
$250,000
-0-
$250,000
-0-
-0-
-0-
$40,884
-0-
1 $1,905,900
-0-
-0-
-0-
l�'•:'tV, '
"._�.
+
$6,667
-0-
$6,667
-0-
-0-
-0-
-'h -
'
$60,226
-0-
$60,226
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
0-
5,0 0
5,000
-0-
$35,000
-0-
-0-
-0
-n
0`l
$150,000
-0-
$150000
-0-
-0-
-0-
E;"'$3*.'- '
$43,611
-0-
$43,611
-0-
-0-
-0-
,.
$40,884
-0-
$40,884
-0-
-0-
-0-
$191,929
-0-
$191,929
-0-
-0-
-0-
,~"
$57,000
-0-
$57,000
-0.
-0-
-0-
�..��
$62,241
-0-
$62,241
-0-
-0-
-0-
$20,000
-0-
$20,000
-0-
-0-
-0-
,:'~
$154,000
-0-
$154,000
-0-
-0-
-0-
ae,-,; "x.,=sn
•. .
$1,750,000
-0-
$1,750,000
-0-
_
-0-
-0-
$ 113,140
$113,140
-0-
-0-
-0-
e.
$93,000
-0-
$93,000
-0-
-0-
-0-
�`$'�<;,$2,777,698
-0-
$2,777,698
-0-
-0-
-0-
$11,756,976 $11,756,976 $950,000 $6,939,477 $2,800,000 $1,000,000 $67,499
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EXHIBIT D: DECLARATION OF RESTRICTIONS
Recorded at the Request of and
When Recorded Return to:
City of Fresno
City Clerk's Office
2600 Fresno Street, Room 2133
Fresno, CA 93721-3603
City of Fresno Declaration of Restrictions
DECLARATION OF RESTRICTIONS
THIS DECLARATION OF RESTRICTIONS, ("Declaration"), is executed as of this
day of ,2011 by the HOUSING AUTHORITY, a body corporate and
politic, and 1555 anta Clara Street, LP, a California Limited Partnership, referred
collectively as " ("DECLARANT") in favor of the City of Fresno, acting by and through its
Development and Resource Management Department, Housing and Community
Development Division ("CITY").
WHEREAS, DECLARANT is the owner/developer of the real estate in the county
of Fresno, state of California, consisting of APN: 467-082-03, portion of 467-082-20, and
portion of 467-082-04), which is more particularly described in Exhibit "A", attached
hereto and made a part hereof (the "Property"); and
WHEREAS, Pursuant to a certain HOME Investment Partnerships Program
Agreement dated &5 , 2011 incorporated herein ("HOME Agreement"), and
instruments referenced therein, DECLARANT agrees to utilize and CITY agrees to
provide certain HOME Program Funds from the United States Department of Housing
and Urban Development ("HUD"), to DECLARANT for certain Affordable Rental
Housing (the "Project") upon the Property, with no less than fifteen (15) of the proposed
seventy (70) Units to be preserved as Very Low -Income Affordable Rental Housing for
tenants earning 50% or below of the area median income for the Fresno MSA, subject
to the terms and conditions set forth in the HOME Agreement, and
WHEREAS, the HOME Program regulations promulgated by HUD, including
without limitation 24 CFR Section 92.252, and the HOME Agreement impose certain
affordability requirements upon property benefited thereby, which affordability
restrictions shall be enforceable for a fifty-five (55) year period; and
WHEREAS, these restrictions are intended to bind DECLARANT and all
purchasers and their successors.
NOW THEREFORE, DECLARANT declares that the Property is held and will be
held, transferred, encumbered, used, sold, conveyed and occupied subject to the
covenants, restrictions, and limitations set forth in this DECLARANT, all of which are
declared and agreed to be in furtherance of the proposed Affordable Rental Housing
Project, the CITY's general, Consolidated and Annual Action Plans and Housing
Element therein and HOME Program requirements. All of the restrictions, covenants
and limitations will run with the land and will be binding on all parties having or acquiring
any right, title or interest in the Property or any part thereof, will inure to the benefit of
the CITY, and will be enforceable by it. Any purchaser under a contract of sale covering
any right, title or interest in any part of the Property, by accepting a deed or a contract of
sale or agreement of purchase, accepts the document subject to, and agrees to be
bound by, any and all restrictions, covenants, and limitations set forth in this Declaration
for the period of fifty-five (55) years commencing from the date set forth in section 1.4 of
1
the Agreement, the DECLARANT shall be notified in writing by the CITY that the
Affordability Period has begun.
1. Declarations. DECLARANT hereby declares that the Property is and shall
be subject to the covenants and restrictions hereinafter set forth, all of which are
declared to be in furtherance of the Project and the HOME Agreement, and are
established and agreed upon for the purpose of enhancing and protecting the value of
the Property and in consideration for CITY entering into the HOME Agreement with
DECLARANT.
2. Restrictions. The following covenants and restrictions on the use and
enjoyment of the Property shall be in addition to any other covenants and restrictions
affecting the Property, and all such covenants and restrictions are for the benefit and
protection of CITY, and shall run with the Property and be binding on any future owner's
of the Property and inure to the benefit of and be enforceable by CITY. These
covenants and restrictions are as follows:
a. DECLARANT for itself and its successor(s) on title covenants and
agrees that, until the expiration of the Affordability Period it shall cause the Project Units
to be used as Affordable Rental Housing. Declarant further agrees to file a recordable
document setting forth the Project Completion Date when determined by the CITY.
Unless otherwise provided in the HOME Agreement, the term Affordable Rental
Housing shall include, without limitation, compliance with the following requirements:
(i) Nondiscrimination. There shall be no discrimination against
nor segregation of any person or group of persons on account of race, color, creed,
religion, sex, marital status, national origin, ancestry, or handicap in the sale, transfer,
use, occupancy, tenure, or enjoyment of any of the Property, nor shall DECLARANT or
any person claiming under the DECLARANT, establish or permit any practice of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of owners or vendees of the Project Property.
(ii) Principal Residence. Each of the Units constituting the
Project upon the Property shall be leased only to persons, who shall occupy such as a
principal residence. The foregoing requirement that the Property tenants occupy the
Units as their principal residence does not apply to persons, other than natural persons,
who acquire the Project Property or portion thereof by foreclosure or deed in lieu of
foreclosure or HUD qualified entities that acquire the Property or portion thereof, with
the consent of the CITY.
(iii) Income Requirements. A total of fifteen (15) Units
constituting Affordable Rental Housing upon the Property may be leased only to
person(s) whose annual household income at the time of initial occupancy is not greater
than fifty percent (50%) of the most recent annual median income calculated and
published by HUD for the Fresno Metropolitan Statistical Area applicable to such
household's size, and at an affordable price consistent HOME Program regulations.
7
(iv) Injunctive Relief and Recapture. Should any of the Very
Low -Income Units constituting Affordable Rental Housing upon the Property not
continue to be, after the time of initial occupancy, the principal residence of a Household
whose annual household income is not greater than fifty percent (50%) of the most
recent annual median income, then without waiver or limitation, the CITY shall be
entitled to injunctive or other equitable relief against any violation or attempted violation
of any Covenant and Restriction, and shall, in addition, be entitled to damages for any
injuries or losses resulting from any violations thereof.
3. Acceptance and Ratification. All present and future owners of the
Property and other persons claiming by, through, or under them shall be subject to and
shall comply with the Covenant and Restrictions. The acceptance of a deed of
conveyance to the Property shall constitute an agreement that the Covenant and
Restrictions, as may be amended or supplemented from time to time, are accepted and
ratified by such future owners, tenant or occupant, and such Covenant and Restriction
shall be a covenant running with the land and shall bind any person having at any time
any interest or estate in the Property, all as though such Covenant and Restriction was
recited and stipulated at length in each and every deed, conveyance, mortgage or lease
thereof.
Notwithstanding the foregoing, upon foreclosure by a lender or other
transfer in lieu of foreclosure, or assignment of an FHA -insured mortgage to HUD, the
Affordability Period shall be terminated if the foreclosure or other transfer in lieu of
foreclosure or assignment recognizes any contractual or legal rights of public agencies,
nonprofit sponsors, or others to take actions that would avoid the termination of low-
income affordability. However, the requirements with respect to Affordable Rental
Housing shall be revived according to their original terms, if during the original
Affordability Period, the owner of record before the foreclosure or other transfer, or any
entity that includes the former owner or those with whom the former owner has or had
formerly, family or business ties, obtains an ownership interest in the Project or the
Property, the Affordability Period shall be revived according to its original terms.
4. Benefit. This Declaration shall run with and bind the Property for a term
commencing on the date this Declaration is recorded in the Office of the Recorder of the
County of Fresno, state of California, and expiring upon the expiration of the
Affordability Period. The failure or delay at any time of CITY or any other person
entitled to enforce this Declaration shall in no event be deemed a waiver of the same, or
of the right to enforce the same at any time or from time to time thereafter, or an
estoppel against the enforcement thereof. The obligations and liabilities of
DECLARANT and each of them hereunder, shall be joint and several.
5. Costs and Attorney's Fees. In any proceeding arising because of failure
of DECLARANT or any future owner of the Property to comply with the Covenant and
Restrictions required by this Declaration, as may be amended from time to time, CITY
shall be entitled to recover its costs and reasonable attorney's fees incurred in
connection with such default or failure.
3
6. Waiver. Neither DECLARANT nor any future owner of the Property may
exempt itself from liability for failure to comply with the Covenant and Restrictions
required in this Declaration; provided however, that upon the transfer of the Property,
the transferring owner shall be released from liability hereunder, upon CITY's written
consent of such transfer, which consent shall not be unreasonably withheld, conditioned
or delayed.
7. Severability. The invalidity of the Covenant and Restrictions or any other
covenant, restriction, condition, limitation, or other provision of this Declaration shall not
impair or affect in any manner the validity, enforceability, or effect of the rest of this
Declaration and each shall be enforceable to the greatest extent permitted by law.
8. Pronouns. Any reference to the masculine, feminine, or neuter gender
herein shall, unless the context clearly requires the contrary, be deemed to refer to and
include all genders. Words in the singular shall include and refer to the plural, and vice
versa, as appropriate.
9. Interpretation. The captions and titles of the various articles, sections,
subsections, paragraphs, and subparagraphs of this Declaration are inserted herein for
ease and convenience of reference only and shall not be used as an aid in interpreting
or construing this Declaration or any provision hereof.
10. Amendment. No amendment or modification of this Declaration shall be
permitted without the prior written consent of CITY and DECLARANT.
11. Recordation. DECLARANT acknowledges that this Declaration will be
filed of record in the Office of the Recorder of county of Fresno, State of California.
12. Capitalized Terms. All capitalized terms used in this Declaration, unless
otherwise defined herein, shall have the meanings assigned to such terms in that
certain HOME Agreement by and between DECLARANT and CITY.
13. Headings. The headings of the articles, sections, and paragraphs used in
this Agreement are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
rd
IN WITNESS WHEREOF, DECLARANT has executed this Declaration of
Restrictions on the date first written above.
DECLARANT:
HOUSING AUTHORITY OF THE CITY OF FRESNO, CA
a bo ra d politic
By.
( tach not ry certificate of acknowledgement)
NAME:
TITLE:
Date:_ sJ
1555 Santa Clara Street, LP
a California limited partnership
By -In n , its Managing General Partnership
By:-=-—�
(Attach n tary certificate of acknowledgment)
Name:
Title:
Date:
.01
CERTIFICATE OF ACKNOWLEDGMENT
State of California }
County of -F(e-sn,,)
On 1 before me, Twv-, C7a rc-I�
Date(here insert name and title of the officer)
personally appeared ,,lc.�
Name(s) of Signer(s)
who proved to me on the basis of satisfactory evidence to be
the person (s) whose name (s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity (ies), and that by
his/her/their signature (s) on the instrument the person (s),
or the entity upon behalf of which the person (s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the
State of California that the foregoing paragraph is true and
correct.
WITNESS my hand and official seal.
0MA WMA
Y. IRcomm. #1810596 �n
Notary Puhlio-Cwifomia
W FRESNO COU
MY em", Exp. AUG 24, 2012
SignaturePlace Notary Seal Above
Signature of Notary Public
EXHIBIT "A" TO DECLARATION OF RESTRICTIONS
PROPERTY DESCRIPTION
The Property is located at 503 "G" STREET, 512 "F" STREET, and 1555 SANTA CLARA
STREET.
Legal Description
Parcel (APN: 467-082-20)
LOTS 13 THROUGH 16 INCLUSIVE, IN BLOCK 55, OF THE TOWN (NOW CITY) OF
FRESNO, ACCORDING TO THE SUPPLEMENTAL MAP OF THE TOWN (NOW CITY)
OF FRESNO, RECORDED IN BOOK 1, PAGE 2 OF PLATS, RECORDS OF SAID
COUNTY
Parcel 2 (APN: 467-082-03)
LOTS 17,18, 19 BLK 55, OF THE TOWN (NOW CITY), IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO THE MAP
THEROF RECORDED IN BOOK 1 PAGE 2 OF MAPS, FRESNO COUNTY RECORDS.
Parcel 3 (APN: 467-082-04)
LOT 20 IN BLOCK 55 OF THE TOWN (NOW CITY) OF FRESNO, IN THE CITY OF
FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO THE
MAP THEREOF RECORDED IN BOOK 1 PAGE 2 OF MAPS, FRESNO COUNTY
RECORDS.
EXHIBIT E: CERTIFICATE OF COMPLETION
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
City of Fresno
Development and Resources
Management Department
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
Attention: Manager
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
This Certificate of Completion is recorded at the request and for the benefit of the City of
Fresno and is exempt from the payment of a recording fee pursuant to Government Code
Section 6103.
APN:
City of Fresno
By:
Craig Scharton, Assistant Director
Development and Resource
Management Department
Date:
CERTIFICATE OF COMPLETION
APN: 467-082-03, portion of 467-082-20, and portion of 467-082-04
Recitals:
A. By a HOME Investment Partnerships Program Agreement dated , 2011, ("HOME
Agreement") between the City of Fresno, a municipal corporation ("CITY"), the Housing Authority of
the City of Fresno, a body corporate and politic, 1555 Santa Clara Street, LP, and Silvercrest, Inc.
(collectively "DEVELOPER") agreed to develop a seventy (70) unit affordable rental housing project,
of which fifteen (15) units will be reserved for rental by Very Low -Income households ("Project"), upon
the premises legally described in EXHIBIT "A" attached to the HOME Agreement as amended from
time to time, made a part hereof by this reference, (the "Property") for the purposes of Affordable
Rental Housing, with the assistance of HOME funds while meeting the affordable housing, income
targeting and other requirements of 24 CFR 92 according to the terms and conditions of the HOME
Agreement and the Loan Documents and other document/instruments referenced therein.
B. The HOME Agreement or a memorandum of it was recorded on , 20_
as Instrument No. in the Official Records of Fresno County, California.
C. Under the terms of the HOME Agreement, after the DEVELOPER completes the Project, the
DEVELOPER may ask CITY to record a Certificate of Completion.
D. The Developer has asked CITY to furnish the DEVELOPER with a recordable Certificate of
Completion.
E. The CITY's issuance of this Certificate of Completion is conclusive evidence that the
DEVELOPER has completed construction the Project as set forth in the HOME Agreement.
NOW THEREFORE:
1. CITY certifies that the DEVELOPER commenced the Project on
2011 and completed the Project on 20_, and has done so in
compliance with the HOME Agreement.
full
2. This Certificate of Completion is not evidence of the DEVELOPER's compliance
with, or satisfaction of, any obligation to any mortgage or security interest holder, or any mortgage or
security interest insurer, securing money lent to finance work on the Property or Project, or any part of
the Property or Project.
3. This Certificate of Completion is not a notice of completion as referred to in
California Civil Code Section 3093.
4. Nothing contained herein modifies any provision of the HOME Agreement.
1 of 2
IN WITNESS WHEREOF, CITY has executed this Certificate of Completion as of this
_ day of 120_.
CITY OF FRESNO
Date:
Craig Scharton, Assistant Director
Development and Resource Management Department
(Attach notary certificate of acknowledgement)
ATTEST:
CITY CLERK
By:
Deputy
Date:
Housing Authority of the City of Fresno, CA
a body corporate and politic
(Attach notary certificate of acknowledgement)
NAME:
TITLE:
Date:
APPROVED AS TO FORM:
CITY ATTORNEY
0
Senior Deputy City Attorney
Date:
1555 Santa Clara Street, LP
a California non-profit corporation
By: Silvercrest, Inc., a California non-profit corporation,
its Managing General Partner
By:
(Attach notary certificate of acknowledgment)
Title:
Date:
2 of 2
EXHIBIT F: PROMISSORY NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to Borrower for
Cancellation.
PROMISSORY NOTE
Loan Amount: $1,500,000 Date: August 25, 2011
Fresno. California
For value received, the undersigned, 1555 Santa Clara, LP, a California limited partner
("Borrower"), promises to pay to the order of the City of Fresno, a California municipal
corporation, ("Lender"), the sum of One Million Five Hundred Thousand dollars and 00/100
($1,500,000), to the extent that such funds are loaned to Borrower, with interest on the unpaid
principal balance running from the date of the permanent loan conversion with simple interest at
the rate of one percent (1%) annually in accordance with the HOME Agreement regarding
Affordable Housing Project, dated August 25, 2011, entered into between the Housing Authority
of the City of Fresno and Slivercrest and 1555 Santa Clara, LP, with principal and interest due
and payable beginning in year 40 and annually thereafter from twenty percent (20%) of annual
Residual Receipts, as provided herein, and with all remaining principal and interest due and
payable on or before the earlier of: (i) Borrower's uncured default under the Agreement with
respect to the Affordable Housing Project, or (ii) fifty-five (55) years from the permanent loan
conversion date, ("Maturity Date"), along with attorney's fees and costs of collection, and without
relief from valuation and appraisement laws.
This is a Residual Receipts Note. Principal and interest payments in the amount of twenty
percent (20%) of annual Residual Receipts beginning in year 40 and annually thereafter, to the
extent that Residual Receipts exist and itemized in audited financial statements supplied to
Lender with each payment hereunder, shall be due one hundred eighty (180) days following the
end of the year in which the Affordable Project converts to its permanent financing phase under
the Senior Financing, and said payment continues each successive year thereafter until the
Maturity Date, upon which all principal and interest shall be due and payable (prorated amounts
to be paid for the first and last year of the Note). Any failure to make a payment required
hereunder within ten (10) days after such payments are due shall constitute a default under the
Agreement with respect to the Affordable Project and this Note. It shall not be a default
hereunder if no payment was made because Project Residual Receipts did not exist for any
particular year. Additionally any failure to timely submit to Lender audited financial statements
within thirty (30) days after such financial statements are due shall constitute a default under the
Agreement with respect to the Affordable Project and Note.
Residual Receipts means in each operating year after the conversion of the Affordable Rental
Housing Project financing to its permanent financing phase, the sum of: (i) all cash received by
the Affordable Rental Housing Project from rents, lease payments, and all sources generally
considered in the apartment industry to be "other income" (which does not include payments for
optional services provided by Borrower), payments from HUD under a Housing Assistance
Program Section 8 Contract to the Project, if any, and excluding tenant security or other
deposits required by law to be segregated, and interest on reserves not available for distribution;
1
and (ii) the net proceeds of any insurance (including rental interruption insurance), other than
fire and extended coverage and title insurance, to the extent not reinvested, less the sum of: (i)
all cash expenditures, and all expenses unpaid but properly accrued, which are Operating
Expenses incurred in the operation of the Affordable Project's business, excluding expenditures
paid from any reserve account (whether or not such expenditure is deducted, amortized or
capitalized for tax purposes); (ii) the Affordable Project related annual fee payable to the
investment limited partner and the annual fees payable to the nonprofit managing general
partner; (iii) all payments on account of any loans (including unpaid principal and accrued
reasonable interest) made for the benefit of the Affordable Project by the partners of the
Borrower pursuant to the terms of the amended and restated limited partnership agreement of
the Partnership; and, (iv) payments towards the deferred developer fee (including repayment of
loans or capital contributions made by the general partner to the partnership specifically for the
purpose of paying the deferred developer fee); (v) contributions to any prudent and reasonable
cash reserves for working capital, capital expenditures, repairs, replacements and anticipated
expenditures, in such amounts as may be reasonably required by the lenders to the Affordable
Project and the limited partners of the Borrower for the operation of the Project not to exceed
the amount required by the Affordable Project's permanent lender, annually adjusted if required
by the permanent lender or limited partners; (vi) the payment of principal and interest, and any
associated fees, expenses, and costs, with respect to Senior Financing; and (vii) payments
made to the investor limited partner which are required to reimburse the investor a portion of its
capital contribution in relation to the Affordable Project when there is a shortfall in the tax credits
initially promised to the investor pursuant to the terms of the amended and restated limited
partnership agreement of the Borrower.
Operating Expenses means actual, reasonable and customary (for comparable quality, newly
constructed rental housing developments in Fresno County) costs, fees and expenses directly
incurred, paid, and attributable to the operation, maintenance and management of the
Affordable Project in a calendar year, including, without limitation: painting, cleaning, repairs,
alterations, landscaping, utilities, refuse removal, certificates, permits and licenses, sewer
charges, real and personal property taxes, assessments, insurance, security, advertising and
promotion, janitorial services, cleaning and building supplies, purchase, repair, servicing and
installation of appliances, equipment, fixtures and furnishings which are not paid from the capital
replacement reserve, fees and expenses of property management and common area expenses,
fees and expenses of accountants, attorneys and other professionals, the cost of social
services, repayment of any completion or operating loans including any and all deferred
contractor's fees per the Budget, made to Borrower, its successors or assigns, and other actual
operating costs and capital costs which are incurred and paid by Borrower, but which are not
paid from reserve accounts.
All capitalized terms used in this Note, unless otherwise defined, will have the respective
meanings specified in a certain HOME Investment Partnerships Program Agreement dated
, incorporated herein, ("HOME Agreement") and instruments referenced therein. In
addition, as used in this Note, the following terms will have the following meanings:
Business Day means any day other than Saturday, Sunday, or public holiday or the equivalent
for banks generally under the laws of California. Whenever any payment to be made under this
Note is stated to be due on a day other than a Business Day, that payment may be made on the
next succeeding Business Day. However, if the extension would cause the payment to be made
2
in a new calendar month, that payment will be made on the next preceding Business Day.
This Note, and any extensions or renewals hereof, is secured by a Deed of Trust, Security
Agreement and Fixture Filing with Assignment of Rents on real estate in Fresno County,
California, that provides for acceleration upon stated events, dated as of the same date as this
Note, and executed in favor of and delivered to the Lender ("Deed of Trust'), insured as a not
worse than 3rd position lien on the Property.
Time is of the essence. It will be a default under this Note if Borrower defaults under the HOME
Agreement, defaults under any other Loan Documents, or if Borrower fails to pay when due any
sum payable under this Note. In the event of a default by Borrower, the Borrower shall pay a
late charge equal to the lesser of two percent (2%) of any outstanding payment or the maximum
amount allowed by law. All payments collected shall be applied first to payment of any costs,
fees or other charges due under this Note or any other Loan Documents then to the interest and
then to principal balance. On the occurrence of a default or on the occurrence of any other
event that under the terms of the Loan Documents give rise to the right to accelerate the
balance of the indebtedness, then, at the option of Lender, this Note or any notes or other
instruments that may be taken in renewal or extension of all or any part of the indebtedness will
immediately become due without any further presentment, demand, protest, or notice of any
kind.
The indebtedness evidenced by this Note may, at the option of the Borrower, be prepaid in
whole or in part without penalty. Lender will apply all the prepayments first to the payment of
any costs, fees, late charges, or other charges due under this Note or under any of the other
Loan Documents and then to the interest and then to the principal balance.
All Loan payments are payable in lawful money of the United States of America at any place
that Lender or the legal holders of this Note may, from time to time, in writing designate, and in
the absence of that designation at:
City of Fresno — Finance Department
Accounts Receivable
2600 Fresno Street, Room 2156
Fresno, CA 93721
Borrower agrees to pay all costs including, without limitation, attorney fees, incurred by the
holder of this Note in enforcing payment, whether or not suit is filed, and including, without
limitation, all costs, attorney fees, and expenses incurred by the holder of this Note in
connection with any bankruptcy, reorganization, arrangement, or other similar proceedings
involving the undersigned that in any way affects the exercise by the holder of this Note of its
rights and remedies under this Note. All costs incurred by the holder of this Note in any action
undertaken to obtain relief from the stay of bankruptcy statutes are specifically included in those
costs and expenses to be paid by Borrower. Borrower will pay to Lender all attorney fees and
other costs referred to in this paragraph on demand.
Any notice, demand, or request relating to any matter set forth herein shall be in writing and
shall be given as provided in the HOME Agreement.
3
No delay or omission of Lender in exercising any right or power arising in connection with any
default will be construed as a waiver or as acquiescence, nor will any single or partial exercise
preclude any further exercise. Lender may waive any of the conditions in this Note and no
waiver will be deemed to be a waiver of Lender's rights under this Note, but rather will be
deemed to have been made in pursuance of this Note and not in modification. No waiver of any
default will be construed to be a waiver of or acquiescence in or consent to any preceding or
subsequent default.
The Deed of Trust provides as follows:
DUE ON SALE—CONSENT BY BENEFICIARY. Beneficiary may, at its option, declare
immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer,
without the Beneficiary's prior written consent, of all or any part of the Property, or any interest in
the Property. A "sale or transfer" means the conveyance of the Property or any right, title or
interest therein; whether legal, beneficial or equitable; whether voluntary or involuntary; whether
by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold
interest with a term greater than three (3) years, lease -option contract, or by sale, assignment,
or transfer of any beneficial interest in or to any land trust holding title to the Property, or by any
other method of conveyance of land interest. If any Trustor is a corporation, partnership or
limited liability, company, transfer also includes any change in ownership of more than
twenty-five percent (25%) of the voting stock, partnership interests or limited liability company
interests, as the case may be, of Trustor. However, this option shall not be exercised by
Beneficiary if such exercise is prohibited by applicable law.
Lender may transfer this Note and deliver to the transferee all or any part of the Property then
held by it as security under this Note, and the transferee will then become vested with all the
powers and rights given to Lender; and Lender will then be forever relieved from any liability or
responsibility in the matter, but Lender will retain all rights and powers given by this Note with
respect to Property not transferred.
If any one or more of the provisions in this Note is held to be invalid, illegal, or unenforceable in
any respect by a court of competent jurisdiction, the validity, legality, and enforceability of the
remaining provisions will not in any way be affected or impaired. This Note will be binding on
and inure to the benefit of Borrower, Lender, and their respective successors and assigns.
Borrower agrees that this Note will be deemed to have been made under and will be governed
by the laws of California in all respects, including matters of construction, validity, and
performance, and that none of its terms or provisions may be waived, altered, modified, or
amended except as Lender may consent to in a writing duly signed by Lender or its authorized
agents.
Neither the Borrower, nor any general or limited partner of the Borrower, shall have any direct or
indirect personal liability for payment of the principal of, and interest on, the Loan. Following
recordation of the Deed of Trust, the sole recourse of the City with respect to the principal of,
and interest on, the Note and defaults by Borrower in the performance of its Loan covenants
under the Deed of Trust shall be to the property described in the Deed of Trust.
9
IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be executed
by its authorized agent(s) as of the date and year first above written.
BORROW - The Housing Authority of the City of Fresno, CA
a body corpo tea itic
4
By:
(Attach nota certiflcate of know1edg ent)
Name:Yr
Title: 3 1�:i v
Date: 2=tf
BORR R: 1555 Santa Clara Street, LP
a Cali ornia ' pa nership
By:
(Attach notp ry certificat of acknow edgment)
Name: ilk N1
Title: re-6jclp 14
Date:
5
CERTIFICATE OF ACKNOWLEDGMENT
State of California )
County of 6re5>n o )
On gbs/l / before me, 7Sfmc, G»cic , No -kr Pik lkl��
Date (here insert name and title oft e officer)
personally appeared Pf e5 r,n (--,p
Names) of Signers}
who proved to me on the basis of satisfactory evidence to be
the person (s) whose name (s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity (ies), and that by
his/her/their signature (s) on the instrument the person (s),
or the entity upon behalf of which the person (s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the
State of California that the foregoing paragraph is true and
correct.
WITNESS my hand and official seal.
,RMA GARCw
COMM. #1810596
Notary Puwo-uiforwa
FRESNO COUNTY -a
aN Comm. Exp. AUG 24, 2012
Signature Lam --R Place Notary Seal Above
Signature of Notary Public
RECORDING REQUESTED BY
Chicago Title Company
AND WHEN RECORDED MAIL TO:
City of Fresno
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno CA 93721-3605
Space Above'rhis Linc for Recorder's Use Only
A.P.N.: 467_0$2-03/467-082-0_4/467-082-20 File No.:
DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, made this , 2011, by
TRUSTOR: , a California limited partnership
whose address is 503 "G" Street, 512 "F" Street and 1555 Santa Clara, California, 93721
TRUSTEE: Chicago Title Company, a California corporation
and BENEFICIARY: City of Fresno, a California municipal corporation.
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST, WITH
POWER OF SALE, that property in the City of Fresno, Fresno County, State of California, described as:
See Exhibit A attached hereto.
TOGETHER WITH the rents, issue:?, and profits thereof, SUBJECT, HOWEVER, to the right, power and
authority given to and conferred upon Beneficiary by paragraph 10 of the provisions, incorporated by
reference, to collect and apply such rents, issues and profits.
FOR THE PURPOSE OF SECURING: 1. Performance of each agreement of Trustor, incorporated by reference
or contained herein, including without limitation the HOME Agreement entered into between [ ]
and Beneficiary dated [ , 2011. 2. Payment of the indebtedness evidenced by a Promissory Note of even
date herewith, and any extension or renewal thereof, in the principal sum of $1,500,000.00 to City of
Fresno executed by Trustor in favor of Beneficiary or order, 3. Payment of such further sums as the then
record Owner of said property hereafter may borrow from Beneficiary, when evidenced by another Note (or
Notes) reciting it is so secured.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
(1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to
complete or restore promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed thereon, and to pay when due all claims for labor performed and materials furnished
therefore; to comply with all laws affecting said property or requiring any alterations or improvements to be
made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said
property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from
the character or use of said property may be reasonably necessary, the specific enumerations herein not
excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary
upon indebtedness secured hereby and in such order as Beneficiary may determine, or at option of
Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or
release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant
to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and
attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may
appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust.
(4) To pay: at least ten days before delinquency, all taxes and assessments affecting said property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on
said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of
this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but
without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from
any obligation hereof, may: make or do the same in such manner and to such extent as either may deem
necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property
for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or
the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance,
charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any
such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest
from date of expenditure at the rate called for in the note secured hereby, or at the amount allowed by law at
date of expenditure, whichever is greater, and to pay for any statement provided for by law in effect at the
date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed
the maximum allowed by law at the time when said statement is demanded.
(6) That any award of damages in connection with any condemnation for public use of or injury to said
property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release
such moneys received by him in this same manner and with the same effect as above provided for disposition
of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his
right either to require prompt payment when due of all other sums so secured or to declare default for failure
so to pay.
(8) That at any time or from time to time, without liability therefore and without notice, upon written request
of Beneficiary and presentation of this Deed of Trust and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any
part of said property; consent to the making of any map or plat thereof; join in granting any easement
thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon
surrender of this Deed of Trust and said Note to Trustee for cancellation and retention and upon payment of
its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee is
such reconveyance may be described as "the person or persons legally entitled thereto." Five years after
issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in
such request to retain them.)
(10) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and
authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property,
reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured
hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as
they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in
person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession of said property or any part
thereof, in his own name sue for or otherwise collect such rents, issues and profits, including those past due
and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable
attorneys' fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The
entering upon and taking possession of said property, the collection of such rents, issues and profits and the
application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or
invalidate any act pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any
agreement hereunder after expiration of all applicable cure periods, Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for
sale and of written notice of default and of election to cause to be sold said property, which notice Trustee
shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said Note(s)
and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of
default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor,
shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate
parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale.
Trustee may postpone sale of all or any portion of said property by public announcement at such time and
place of sale, and from time to time thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property
so sold, but without any covenant or warranty, express or implied. The recitals in such deed of matters or
facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or
Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all reasonable costs, fees and expenses of Trustee and of this Trust, including cost of
evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums
expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in
effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the persons or
persons legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness secured hereby may, from time to time,
by instrument in writing, substitute a successor or successors to any Trustee named herein or acting
hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office
of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper
substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee
predecessor, succeed to all its title, estate, rights, powers and duties, must contain the name of the original
Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the
name and address of the new Trustee.
(13) That this Deed of Trust applies to, insures to the benefit of, and binds all parties hereto, their heirs,
legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledgees, of the Note secured hereby, whether or not named as Beneficiary
herein. In this Deed of Trust, whenever the context so required, the masculine gender includes the feminine
and/or neuter, and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a
public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under
any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be party
unless brought by Trustee.
(15) The Loan is a nonrecourse obligation of Trustor. Neither Trustor nor any of its general and limited
partners shall have any personal liability for repayment of the Loan. The sole recourse of the Lender under
the Loan Documents for repayment of the Loan shall be the exercise of its rights against the Property.
(16) The withdrawal, removal and/or replacement of a general partner of Trustor pursuant to the terms of
the Partnership Agreement due to a violation by a general partner of the terms of the Partnership Agreement,
or a voluntary withdrawal from the Partnership by a general partner, and any transfer of limited partnership
interests or interests in the same, shall not constitute a default under any of the Loan Documents, and any
such actions shall not accelerate the maturity of the Loan.
(17) Beneficiary agrees that the lien of this Deed of Trust shall be subordinate to any extended low-income
housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the
"Extended Use Agreement") recorded against the Property, provided that such Extended Use Agreement, by
its terms, must terminate upon foreclosure under this Deed of Trust or upon a transfer of the Property by
instrument in lieu of foreclosure, in accordance with Section 42(h)(6)(E) of the Internal Revenue Code,
subject to the limitations upon evictions, terminations of tenancies and increases in gross rents of tenants of
low-income units as provided in that Section.
(18) Prior to declaring or taking any remedy permitted under Loan Documents, Trustor's limited partners
shall have an additional period of not less than thirty (30) days to cure such alleged default. Notwithstanding
the foregoing, in the case of a default that cannot with reasonable diligence be remedied or cured within
thirty (30) days, Trustor's limited partners shall have such additional time as reasonably necessary to remedy
or cure such default, but in no event more than ninety (90) days from the expiration of the initial thirty (30)
day period above, and if the Trustor's limited partners reasonably believe that in order to cure such default,
Trustor's limited partners must remove one or both of Trustor's general partners in order to cure such default,
Trustor's limited partners shall have and additional thirty (30) days following the effective date of such
removal to cure such default.
(19) Beneficiary shall give the Trustor's limited partners notice of any default under the Loan Documents at
the following address:
The indebtedness evidenced by the Note and the Deed of Trust is and shall be subordinate in right of
payment to the prior payment in full of all amounts then due and payable (including, but not limited to, all
amounts due and payable by virtue of any default or acceleration or upon maturity) with respect to the
indebtedness evidenced by a Multifamily Note, dated as of in the original principal amount of
$1,500,000.00, executed by the Borrower and payable to ("Issuer"), as assigned to
("Trustee"), to the extent and in the manner provided in that certain Subordination and
Intercreditor Agreement, dated as of , among the Beneficiary, the Trustee and the Borrower
(the "Subordination Agreement"). The rights and remedies of the payee and each subsequent holder of the
Note and this Deed of Trust shall be deemed, by virtue of such holder's acquisition of this Note, to have
agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by the
"Junior Lender" under the Subordination Agreement.
In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default
and a copy of any Notice of Sale be mailed to Trustor at Trustor's address hereinbefore set forth, or if none
shown, to Trustor at property address.
NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT
ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS
CHANGES, A NEW REQUEST MUST BE RECORDED.
Except as provided herein or in the HOME Agreement, if the Trustor/Grantor shall sell, convey or alienate said
property, or any part thereof, or any interest therein, or shall be divested of his title or any interest therein in
any manner or way, whether voluntarily or involuntarily, without the written consent of the Beneficiary being
first had and obtained, Beneficiary shall have the right, at its option, except as prohibited by law, to declare
any indebtedness or obligations secured hereby, irrespective of the maturity date specified in any Note
evidencing the same, immediately due and payable.
Dated: 2011
Signature of Trustor(s):
By:
Its:
[ALL SIGNATURES MUST BE NOTARIZED]
0
EXHIBIT "A" TO DEED OF TRUST ASSIGNMENT OF RENTS
PROPERTY DESCRIPTION
The Property is located at 503 "G" STREET, 512 "F" STREET, and 1555 SANTA CLARA
STREET.
Legal Description
Parcel (APN: 467-082-20)
LOTS 13 THROUGH 16 INCLUSIVE, IN BLOCK 55, OF THE TOWN (NOW CITY) OF
FRESNO, ACCORDING TO THE SUPPLEMENTAL MAP OF THE TOWN (NOW CITY)
OF FRESNO, RECORDED IN BOOK 1, PAGE 2 OF PLATS, RECORDS OF SAID
COUNTY
Parcel 2 (APN: 467-082-03)
LOTS 17,18, 19 BILK 55, OF THE TOWN (NOW CITY), IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO THE MAP
THEROF RECORDED IN BOOK 1 PAGE 2 OF MAPS, FRESNO COUNTY RECORDS.
Parcel 3 (APN: 467-082-04)
LOT 20 IN BLOCK 55 OF THE TOWN (NOW CITY) OF FRESNO, IN THE CITY OF
FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA, ACCORDING TO THE
MAP THEREOF RECORDED IN BOOK 1 PAGE 2 OF MAPS, FRESNO COUNTY
RECORDS.
City of
r/lll��li ��►� REPORT '1"0 THE CITY COUNCIL AGENDA ITEM NO. 9 :00arrm B
August 25, 2011
COUNCIL MEETING August25,2011
APPROVED BY
FROM: CRAIG SCHARTON, Assistant Direc r DEPARTMENT DIRECTOR
Development and Resource Manage
CITY MANAGER
CLAUDIA CAZARES, Division Mang (�
Housing and Community Develop ent Division
By: CORRINA NUNEZ, Project Mana r
Housing and Community Develop nt ivision
SUBJECT: ADOPT A FINDING OF CONFORMITY THAT DETERMINED THE RENAISSANCE AT
SANTA CLARA SUPPORTIVE RENTAL HOUSING PROJECT IS IN CONFORMITY
WITH THE MASTE=R ENVIRONMENTAL IMPACT REPORT NO. 10130 (SCH NO.
2001071097) OF "rHE 2025 GENERAL PLAN AND AIR QUALITY MITIGATED
NEGATIVE DECLARATION (A-09-002; SCH# 2009051016), AND APPROVE A $1.5
MILLION HOME INVESTMENT PARTNERSHIPS AGREEMENT WITH 1555 SANTA
CLARA STREET, LP, FOR CONSTRUCTION OF THE RENAISSANCE AT SANTA
CLARA, A 70 -UNIT PERMANENT SUPPORTIVE RENTAL HOUSING PROJECT TO
BE LOCATED AY' 503 "G" STREET, 512 "F" STREET, AND 1555 SANTA CLARA
STREET IN THE HISTORIC CHINATOWN AREA.
Presented to City Nncil
Date
S25 11 —�
RECOMMENDATIONS Disposition
Staff recommends that the City Council:
1) Adopt a Finding of Conformity that determines the Renaissance at Santa Clara Supportive
Rental Housing Project is in conformity with the Master Environmental Impact Report No.
10130 (SCH No. 200171097) of the 2025 General Plan and Air Quality Mitigated Negative
Declaration (A-09-002; SCH4 2009051016); and
2) Approve a $1.5 million HOME Investment Partnerships (HOME) Program Agreement
(Please see Exhibit "A" — HOME Agreement) with 1555 Santa Clara Street, LP
(Developer), for construction of the Renaissance at Santa Clara, a 70 -unit permanent
supportive rental housing project to be located at 503 "G" Street, 512 "F" Street, and
1555 Santa Clara Street {APN: 467-082-03, 467-082-20, and 467-082-04), in the
Historic Chinatown area (Pease see Exhibit "B" — Project Location Maps), subject to
prior approval as to form by the City Attorney's Office.
EXECUTIVE SUMMARY
If approved as recommended, $1.5 million in HOME Program funds will be provided to the Developer in
the form of a 55 -year loan at 1 % ir!terest, with principal and interest repaid beginning at year 40 from 20%
of the project's annual residual receipts, with the unpaid balance due at loan maturity. The Housing
Authority of the City of Fresno (Housing Authority) applied for the HOME loan as general partner of the
LP. The Renaissance at Santa Clara will consist of a 69 -unit studio apartment complex for very low-income
and homeless individuals and one on-site manager's unit. Of the 70 units, 15 units will be HOME -assisted
REPORT TO COUNCIL
HOME AGREEMENT WITH RENAISSANCE AT SANTA CLARA, LP, FOR CONSTRUCTION OF THE
RENAISSANCE AT SANTA CLARA
August 25, 2011
Page 2 of 3
units. The cost of the proposed project is estimated at $11.8 million, of which $1.5 million in HOME Program
funds will serve as gap financing. A majority of the project financing will be funded by the State of California
Tax Credit Allocation Committee (TCAC), Low Income Housing Tax Credits (LIHTC) and the Housing
Relinquished Fund. Disbursement of HOME funds to the Developer will be contingent upon finalization of an
award of LIHTC to the project. Staff recommends that the Council adopt the environmental finding and approve
the HOME Agreement.
BACKGROUND
On November 4, 2010, the City received a $1.5 million HOME Program funding request from the Housing
Authority for construction of a proposed Renaissance at Santa Clara project, a 70 -unit permanent
supportive housing apartment project for homeless individuals. Fifteen of the 70 units will be HOME -
assisted units with carry 55 -year affordability covenants. The project will be located in the City's Historic
Chinatown area.
The total project cost is estimated at $11.8 million, of which HOME Program funds are proposed to be
provided in the form of a 55 -year loan at 1% interest, with principal and interest to be repaid beginning at
year 40 from 20% of the project's annual residual receipts, with the unpaid balance due at loan maturity.
In an effort to secure a majority of the financing to complete the project, the Developer submitted a LIHTC
application on March 23, 2011, The Developer has received notice of an $8.1 million award of LIHTC.
The actual cash received from the investors will be approximately $6.5 million, which is expected to
finance a majority of the project cost. A summary of the project's budget is shown on the attached Exhibit
"C" — Project Sources and Uses of funds.
The project site is a vacant .69 -acre parcel located at 503 "G" Street, 512 "F" Street, and 1555 Santa
Clara Street, and is located in close proximity to numerous amenities including transit, markets, park,
medical facility, and social service providers.
The site will consist of six two-story buildings (Please see Exhibit "D" — Plans and Elevations). Each
studio will have approximately 340 square feet of living space which will include a kitchen, restroom
facility, and a desk nook. Complex amenities will include a 2,400 square foot community room consisting
of a kitchenette, lounge, community service room, restroom facilities, a property management office, a
community services manager office, and a laundry room. The project's per square foot cost is estimated
at $190. The complex grounds will incorporate security patrol, and extensive landscaping to include a
variety of trees, flower beds, walkways, a sitting area, and parking. Additionally, development of the
project will exceed Title 24 energy standards by fifteen percent.
Predevelopment activities of the Renaissance at Santa Clara Apartments project are approximately 95%
complete and the project is ready to proceed pending complete financing approval. A Conditional Use
Permit (No. C-10-085), as amended (No. C-10-201), has been issued for the project.
The estimated completion date of the Renaissance at Santa Clara project is scheduled for February 2013.
Once construction is completed, the units will be available to very low-income and/or homeless individuals
earning 50%, or less, of the area median income. This affordability period will extend 55 years. Typical rents
for the studio apartments will be approximately $493.00 per month.
The Housing Authority, as general partner of the developer, is an experienced developer, manager, and
owner of affordable housing and has served as a lower income housing provider to the City of Fresno for
over 60 years. The Housing Authority has constructed hundreds of housing units for Fresno's low-income
REPORT TO COUNCIL
HOME AGREEMENT WITH RENAISSANCE AT SANTA CLARA, LP, FOR CONSTRUCTION OF THE
RENAISSANCE AT SANTA CLARA
August 25, 2011
Page 3 of 3
households and recently completed construction of a 215 -unit apartment complex in central Fresno. Its
mission is to provide housing within an environment that fosters the advancement of low-income
households from a position of dependency to one of self-sufficiency. Cypress Independent Living
Services has entered into a 10 -year agreement with the Housing Authority to provide human/social
services to the project tenants. In addition, the tenants can use the services already provided to the
community at large by the Poverello House, which is within walking distance of the proposed project. The
Poverello House is a private non-profit organization that has provided services to Fresno's hungry and
homeless individuals for over 37 years. Its mission is to enrich the lives and spirits of all those who pass
their way.
As with the Housing Authority's other residential
management company will be under agreement to
once the complex is occupied, to ensure on-going
requirements.
developments, an experienced and local property
manage the Renaissance at Santa Clara property
compliance with HOME Program property standard
Once completed, the Renaissance at Santa Clara project will assist the City in meeting its affordable housing
goals as identified in the Housing Element of the 2025 General Plan, the 2010-2014 Consolidated Plan, the
HOME Program funding priorities for new housing development, and the 10 -year Plan to End Chronic
Homelessness. The Renaissance at Santa Clara will also make a positive impact toward the City's efforts to
revitalize the Historic Chinatown area by offering new, quality, durable, sustainable, affordable housing.
ENVIRONMENTAL FINDING
In anticipation of funding approval and the subsequent commencement of the construction activities, a
National Environmental Policy Act assessment was completed on April 12, 2011, and resulted in a
Finding of No Significant Impact. The City received authorization to use grant funds from HUD on July 6,
2011. Additionally, a California Environmental Quality Act (CEQA) initial study was prepared for the
above-described project, which staff determined to be a subsequent project fully within the scope of the
Master Environmental Impact Report No. 10130 ("MEIR) prepared for the 2025 Fresno General Plan
(SCH # 2001071097) and Mitigated Negative Declaration prepared for Plan Amendment No. A-09-02
(SCH # 2009051016) (Air Quality MND). With the mitigation imposed, there is no substantial evidence in
the record that this project may have additional significant, direct, indirect or cumulative effects on the
environment that are significant and that were not identified and analyzed in the MEIR or Air Quality
MND. After conducting a review of the adequacy of the MEIR and Air Quality MND pursuant to Public
Resources Code, Section 21157.6(b)(1), staff has determined no substantial changes have occurred with
respect to the circumstances under which the MEIR was certified and the Air Quality MND was adopted
and that no new information, which was not known and could not have been known at the time that the
MEIR was certified as complete and the Air Quality MND was adopted, has become available. The
project is not located on a site which is included on any of the lists enumerated under Section 65962.5 of
the Government Code including, but not limited to, lists of hazardous waste facilities, land designated as
hazardous waste property, hazardous waste disposal sites and others, and the information in the
Hazardous Waste and Substances Statement required under subdivision (f) of that Section. Therefore,
any necessary environmental review required by CEQA has been completed for the project.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
The Housing and Community Development Commission considered and recommended this item for approval
on August 24, 2011.
REPORT TO COUNCIL
HOME AGREEMENT WITH RENAISSANCE AT SANTA CLARA, LP, FOR CONSTRUCTION OF THE
RENAISSANCE AT SANTA CLARA
August 25, 2091
Page 4 of 3
FISCAL IMPACT
HOME Program funds for the Renaissance at Santa Clara project are available in the Development and
Resource Management Department's Fiscal Year 2012 Budget,
APPENDICES
Exhibit A - HOME Program Agreement
Exhibit B - Project Location Maps
Exhibit C - Project Sources and Uses of Funds
Exhibit D - Plans and Elevations
Exhibit E — Notice of Intent to Adopt Finding of Conformity
1. Finding of Conformity;
2. Modified Appendix G To Analyze Subsequent Project Identified In MEIR No. 10130/MND
For Plan Amendment A-09-02 (Air Quality MND)/Initial Study for Environmental
Assessment No. 20100251;
3. MEIR/ Air Quality MND Review Summary; and
4. MEIR/Air Quality MND Mitigation Monitoring Checklist.