HomeMy WebLinkAboutAMCAL Allied Fund LP - Allied Senior Apartments Phase I APN 470-052-02T Portion 717 South seventh StreetRecorded at the Request of
and When Recorded Return to:
City of Fresno
City Clerk
2600 Fresno Street, Room 2133
Fresno, CA 93721-3603
FOR
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,
Mark Scott
It's: City Manager
CITY OF FRESNO
DISPOSITION AND DEVELOPMENT AGREEMENT
AND
HOME PROGRAM AGREEMENT
by and between
CITY OF FRESNO,
a municipal corporation
and
AMCAL ALLIED FUND, L.P.
a California limited partnership
regarding
"Allied Plaza Senior Apartments, Phase I"
(APN: 470-052-02T Portion)
717 South Seventh Street, Fresno, CA 93702
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TABLE OF CONTENTS
Page
RECITALS........................................................................................................................... 3
ARTICLE 1.
DEFINITIONS................................................................................................. 4
ARTICLE 2.
TRANSFER OF AFFORDABLE PROPERTY.........................................8
PROJECT DESCRIPTION AND SCHEDULE
ARTICLE3.
TERMS.........................................................................................................
11
ARTICLE 4.
GENERAL REPRESENTATIONS/WARRANTIES.......................................
12
ARTICLE 5.
HOME PROGRAM REPRESENTATION/WARRANTIES ............................13
EXHIBIT G:
ARTICLE 6.
COVENANTS AND AGREEMENTS of ALLIED ..........................................
19
ARTICLE 7.
DISBURSEMENT OF HOME FUNDS.. ........................................................
23
ARTICLE 8.
DEVELOPMENT AND CONSTRUCTION OF PROJECT ............................
25
ARTICLE 9.
PROJECT OPERATIONS............................................................................
30
ARTICLE 10.
INSURANCE AND INDEMNITY.................................................................
33
ARTICLE 11.
DEFAULT AND REMEDIES.......................................................................
35
ARTICLE 12.
GENERAL PROVISIONS...........................................................................
37
EXHIBITS
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
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DISPOSITION AND DEVELOPMENT AGREEMENT
AND
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
This Disposition and Development Agreement and HOME Investment Partnerships
Program Agreement (hereinafter referred to as the "Agreement") dated for convenience
this, , 2011, is entered by and between the CITY OF FRESNO, a municipal
corporation, acting through its Development and Resource Management Department -
Housing and Community Development Division (hereinafter referred to as the "CITY"), and
AMCAL ALLIED FUND, L.P., a California limited partnership, in good standing with its
principal office in Agoura Hills, California, (hereinafter referred to as "ALLIED").
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. The CITY and AMCAL Multi -Housing, Inc., are parties to an August 17, 2010
Exclusive Negotiation Agreement (herein referred to as "ENA"), pursuant to which AMCAL
Multi -Housing, Inc., created a limited partnership to construct the proposed Allied Plaza
Senior Apartments, Phase I, a fifty-one (51) unit apartment housing complex for seniors,
and related improvements, of which eleven (11) units will be HOME -assisted Extremely
Low- to Low Income Senior rental housing units, and one (1) manager's unit on the
Property conveyed by the CITY more specifically identified in EXHIBIT "A" which will be
owned in fee by ALLIED.
C. The Affordable Project will further the City's goal to increase the supply of Affordable
Rental Senior Housing within the City of Fresno, the CITY desires, among other things, to
assist ALLIED by providing a total of up to Eight Hundred Eighteen Thousand Thirty Four
dollars and 001100 ($$18,034.00) in annually allocated and available fiscal year 2012
funds for a residual receipts HOME Program Loan (hereinafter referred to as "Loan"), for
the term of fifty-five (55) years, for payment of HOME eligible Project costs, as further
indentified in the Project Budget and Cash Flow Statement EXHIBIT "C", to be secured by
the Affordable Project Property, the Affordable Rental Housing covenants, and upon the
terms and conditions in this Agreement. The loan interest will be at three percent (3%)
annually. Principal and interest will be payable from Residual Receipts at times prior to the
Maturity Date and in full upon the Maturity Date, as provided in EXHIBIT "F" hereto.
D. ALLIED desires to act as owner and developer exercising effective project control,
as to the construction of the fifty-two (52) unit apartment complex of which eleven (11) units
shall be constructed and preserved as Extremely Low- to Low -Income Senior Rental
Housing as defined by the HOME Investment Partnerships Program and related on-site
and off-site improvements, hereinafter referred to as the "Project", as more particularly
described in the Project Description and Schedule attached hereto as EXHIBIT "B",
incorporated herein.
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E. On April 26, 2007, the CITY completed an environmental review of the Project
pursuant to the National Environmental Policy Act ("NEPA") resulting in a Finding of No
Significant Impact. On July 11, 2007, the CITY received related federal approval for
release of HOME funds pursuant to 24 CFR Part 58. Additionally, this Project has been
assessed under the California Environmental Quality Act (CEQA) as provided through
escrow.
F. 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
Extremely Low- to Low -Income Housing available at Affordable Rental Housing cost to
seniors of Extremely Low- to Low -Income, as defined hereunder; (v) planning and
administrative expenses incurred in pursuit hereof are necessary for the production,
improvement, or preservation of Extremely Low- to Low -Income Housing; and (vi) will
comply with any and all owner participation rules and criteria applicable thereto.
G. The CITY and ALLIED 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.
H. On August 15, 2011, the Housing and Community Development Commission of the
City of Fresno reviewed this Agreement and recommended approval.
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.
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 has entered project and tenant information into HUD's
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Integrated Disbursement and Information System (IDIS), as more fully described in the
Declaration of Restrictions, attached hereto as EXHIBIT "D".
1.5 Affordable Project. means the construction of a fifty-one (51) unit apartment
complex and related on-site and off-site improvements, all as described in the Project
Description and Schedule attached here to and incorporated herein as EXHIBIT "B", to be
located upon the Affordable Project Property. Eleven (11) of the Units shall be floating
HOME -units and rented to Extremely Low- to Low -Income Seniors in accordance with the
HOME Program requirements.
1.6 Affordable Project PropertV, means the HOME Program eligible property
located at 717 S. Seventh Street (APN: 470-052-02T portion), Fresno, California, more
specifically described in the attached EXHIBIT "A", to be acquired by ALLIED, and
developed for Affordable Senior Rental Housing
1.7 Affordable Senior Rental Housing. means the rental housing units to be
constructed on the Affordable Project Property of which eleven (11) floating units will be
required to meet the affordability requirements of 24 CFR 92.252,
1.8 Budget means the pro -forma Project Budget and Cash Flow Statement,
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.
1.9 Certificate of Completion. means that certificate issued, in the form attached
as EXHIBIT "E" to ALLIED by the CITY evidencing completion of the Affordable Project and
a release of construction related covenants for the purposes of the Agreement.
1.10 CFR means the Code of Federal Regulations.
1.11 Commencement of Construction. means the time ALLIED's construction
contractor begins substantial physical work on the Affordable Project 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.
1.12 Completion Date. means the date the CITY issues a Certificate of Completion
for the Affordable Project. The Completion Date for the Affordable Project is identified in
EXHIBIT "B".
1.13 Debt Service. rneans 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.
1.14 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 requirements of this Agreement
which shall run with the land.
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1.15 Deed of Trust. means that standard, subordinate no worse than third (3rd)
position Deed of Trust including assignment of rents and security agreement given by
ALLIED, as Trustor, to the CITY as beneficiary, issued through an escrow established by
ALLIED 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 terms of any such Deed of Trust are hereby incorporated into this Agreement
by this reference.
1.16 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.
1.17 Event of Default. shall have the meaning assigned to such term under
Section 11.1 hereunder.
1.18 Extremely Low Income. means families whose annual income does not
exceed thirty percent (30%) of the median income as established by HUD for the Fresno,
California area, except as HUD may establish income ceilings higher or lower than thirty
percent (30%) of the median for the area on the basis of HUD findings that such variations
are necessary.
1.19 Family. has the same meaning given that term in 24 CFR 5.403.
1.20 Funding Sources. means (i) Equity raised from the syndication of State or
Federal Low Income Housing Tax Credits, (ii) the CITY's HOME Funds, (iii) any other
financing sources described in the Project Budget.
1.21 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.
1.22 HOME Investment Partnerships 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 Eight Hundred Eighteen Thousand Thirty
Four dollars and 00/100 ($818,034.00) to be used for HOME Program eligible Project
costs.
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1.23 Household. means one or more persons occupying a Unit in the proposed
Affordable Rental Senior Housing Project.
1.24 HUD. means the United States Department of Housing and Urban
Development,
1.25 Loan. means the non -assumable (except as set forth in Section 6.11 below)
loan of HOME Funds, in an amount not to exceed the sum of Eight Hundred Eighteen
Thousand Thirty Four dollars and 00/100 ($818,034.00) 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.
1.26 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.
1.27 Low -Income. means families whose annual income does not exceed eighty
percent (80%) of the median income as established by HUD for the Fresno, California area,
except as HUD may establish income ceilings higher or lower than eighty percent (80%) of
the median for the area on the basis of HUD findings that such variations are necessary.
1.28 Note. means the non -assumable (except as set forth in Section 6.11 below)
Project Note in a principal amount not to exceed the HOME Program per unit cap (24
C.F.R. 92.250) as determined by the CITY, given by ALLIED 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 3rd position lien upon the Property, 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.
1.29 Program Income. has the meaning provided in the HOME program including
24 CFR 92.503.
1.30 Project 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.
1.31 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 ALLIED which are required of all
tenants (other than security deposits), the cost of an adequate level of service for utilities
paid 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 ALLIED, and paid
by the tenant.
1.32 Residual Receipts. means Residual Receipts as defined in EXHIBIT "F"
1.33 Senior. means a person age fifty-five (55) years or older or other qualified
permanent resident as defined in California Civil Code Section 51.3.
1.34 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.
1.35 Senior Lender. means one or more lenders providing the Senior Financing for
the Affordable Project.
1.36 Unit. means a dwelling unit of the Rental Housing.
1.37 Very Low. 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 TRANSFER OF PROPERTY
2.1 Purchase and Sale. The CITY agrees to sell the Affordable Project Property
to ALLIED and ALLIED agrees to purchase the Affordable Project Property from the CITY
upon the terms and conditions set forth in this Agreement.
2.2 Purchase Price. The purchase price for the Affordable Project Property shall
be Three Hundred Sixty One Thousand One Hundred dollars and 00/100 ($361,100.00)
("Purchase Price"). ALLIED and the CITY agree that the Purchase Price is based on an
October 2, 2006 fair market value.
The purchase price shall be paid as follows:
A. ALLIED and the CITY, shall open escrow (the "Escrow") with Chicago Title
Company, 7330 N. Palm Avenue, Suite 101, Fresno, CA 93711 (Cherie Zuniga, Senior
Escrow Officer at 559-451-3700). At the close of escrow, ALLIED shall deliver the Note to
the CITY in the full amount of the Eight Hundred Eighteen Thousand Thirty Four dollars
and 00/100 ($818,034.00) for full satisfaction of the Property Purchase Price and remaining
Loan amount.
B. ALLIED shall pay all escrow fees and closing costs, including document
preparation fees and recording fees, and the premium for the buyer's policy of title
insurance.
2.3 Closing. Closing means the exchange of documents as described in this
Article 2, and that Escrow is otherwise able to close in accordance with the parties'
instructions, and the Escrow Holder holds and can record the documents described in this
Agreement, and the Title Company is irrevocably and unconditionally committed to issue
the Title Policy, and ALLIED has delivered the duly executed Note and Deed of Trust to the
Escrow Holder.
2.4 Condition of Title. Upon the Closing, the CITY shall convey to ALLIED
marketable and insurable fee simple title to the Property by duly executing and
acknowledged standard Title Company form grant deed(s) ("Deed"). Evidence of delivery
of marketable and insurable fee simple title shall be the issuance by Chicago Title
Company (the "Title Company") to ALLIED an ALTA Owner's Policy of Title Insurance
insuring fee simple title to the Property, ALLIED will accept title with exceptions one
through eleven as shown on that certain Preliminary Title Report prepared by the Chicago
Title Company under Order Number 11 -45032307 -A -CW, dated April 25, 2011 (the "Title
Policy").
2.5 Conditions Precedent to Closing. The following are conditions precedent to
Escrow close, and performance of obligation under this Agreement (the "Project Conditions
Precedent"). The Project Conditions Precedent are intended for the benefit of both parties
and may be waived only by both parties in writing. In the event of the failure of the
satisfaction of any of the Project Conditions Precedent, either party shall have the right, but
not the obligation, in its sole and absolute discretion to terminate the Escrow and
documents therein, i.e., a "no project option", with respect to the Project without liability for
breach or otherwise.
A. The City Council shall have reviewed the California Environmental
Quality Act (CEQA) assessment including any mitigated measures therein, adopted the
CEQA findings based upon Council's independent review and approved Project
entitlements and based thereon made through supplemental instructions in Escrow any
modifications to the documents in Escrow in Council's discretion and consented close of
escrow in writing to the Escrow Officer.
B. ALLIED shall have received the unconditional commitment of Title
Company to issue the Title Policy upon the Closing in the form approved by ALLIED as
buyer.
C. ALLIED shall have approved the amount of the construction financing
required for the development of the Housing Project.
D. ALLIED shall have given written notice to the CITY within ninety days
(90) after the effective date of this Agreement that it has inspected the Property and shall
accept the Property in AS IS condition. If ALLIED, after its inspection of the Property and
review of an environmental reports disapproves of the Property's environmental or other
conditions or aspect of the Property or Project in its sole and absolute discretion, then
ALLIED may terminate the Escrow by written notice to the Escrow Officer without liability
for breach or otherwise.
E. ALLIED shall confirm that the CITY has received all necessary
approvals from HUD, received the HOME funds and be irrevocably committed to fund the
Loan at Closing.
F. ALLIED has submitted the Project Finance Plan to the CITY and the
CITY has approved the Project Finance Plan.
G. ALLIED shall concurrently close the construction period financing
contemplated in the Budget in form and substance acceptable to ALLIED.
2.6 Access to the Property. ALLIED shall be permitted to enter the Property
during reasonable daylight hours, upon ALLIED's satisfaction of liability insurance
requirements of this Agreement. ALLIED will give the CITY 24 hours' written notice of its
intent to enter onto the Property.
2.7 Joint Escrow Instructions, This Agreement, when signed by both parties and
deposited with the Escrow Holder will be the parties' initial joint escrow instructions.
ALLIED and the CITY shall sign any other form instructions required by the Escrow Holder.
The CITY and ALLIED will deposit all instruments, documents, money, and other items with
the Escrow Holder that are: (i) identified in this Agreement, or (ii) required by the Escrow
Holder to effect the closing. Either party may tender supplemental escrow instructions
consistent with this agreement.
2.8 Escrow Closing_ The parties intend for the Closing to take place not later
than one hundred and seventy-five (175) days after ALLIED's receipt of Low Income
Housing Tax Credits (the "Closing Date").
A. At or before the Closing, the CITY shall deliver to the Escrow Holder or
ALLIED the following:
(i) A duly executed and acknowledged Deed(s); and
(ii) CITY's written consent to close Escrow and any other instrument,
records or correspondence called for hereunder which have not
previously been delivered.
B. At or before Closing, ALLIED shall deliver to the Escrow Holder or the
CITY the following:
(i) A duly executed (and acknowledged where required) Loan
Documents; and
(ii) Any other instrument, records or correspondence called for
hereunder which have not previously been delivered.
C. As further condition to closing, ALLIED shall have received the
unconditional commitment of Title Company to issue the Title Policy upon the Closing in
the form approved by ALLIED as buyer.
2.9 Possession. Possession of the Property shall be delivered to ALLIED on the
Closing Date free of any and all other tenancies and/or occupancy rights. The parties
acknowledge and agree that each has inspected the Property and determined it is vacant
and unoccupied.
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ARTICLE 3 TERMS
3.1 Loan of HOME Funds. The CITY agrees to provide the Loan of HOME
Funds to ALLIED in an amount not to exceed Eight Hundred Eighteen Thousand Thirty
Four dollars and 00/100 ($818,034.00) under the terms and conditions provided in this
Agreement. The HOME Funds shall only be used for payment of HOME eligible costs. The
Loan shall be a credit in Escrow for the Property purchase price with the balance disbursed
by City outside of Escrow as provided in this Agreement.
3.2 Loan Documents. ALLIED 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.
3.3 Term of Agreement. This Agreement is effective upon the date of Escrow
close 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.
3.4 Loan Repayment and Maturit . The Loan will be due and payable in
accordance with the Note and not later than the maturity date provided in the Note.
3.5 Incorporation of Documents. ALLIED's proposal dated March 4, 2010, the
CITY Council approved Minutes of September 29, 2011, finally 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.
3.5 Covenants of ALLIED. ALLIED, 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.
3.6 Subordination. The Deed of Trust and/or Declaration of Restrictions may be
subordinated to certain approved financing (in each case, a "Senior Loan"), to no worse
than third (3'd) 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) ALLIED 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 ALLIED 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.
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ARTICLE 4 GENERAL_ REPRESENTATIONS AND WARRANTIES OF ALLIED
4.1 Existence and Qualification. ALLIED represents and warrants as of the date
hereof, that it is a duly organized California limited partnership in good standing with its
principal office in Agoura Hills, California, 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 ALLIED enforceable
against ALLIED 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.
4.2 No Litigation Material to Financial Condition. ALLIED represents and
warrants 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 ALLIED's knowledge, is any such litigation or proceeding
now threatened, or anticipated against ALLIED that, if adversely determined, would have a
material adverse effect on the financial condition, business, or assets of ALLIED or on the
operation of the Project.
4.3 No Conflict of Interest. ALLIED 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 ALLIED, and no person, directly or indirectly owning or controlling any
interest in ALLIED, is an official, officer, agent, or employee of the CITY.
4.4 No Legal Bar. ALLIED represents and warrants as of the date hereof that the
execution, delivery, performance, or observance by ALLIED of this Agreement will not, to
the best of ALLIED'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 ALLIED; or (c) any
mortgage, indenture, security agreement, contract, undertaking, or other agreement or
instrument to which ALLIED is/are a party or that is binding on any of its properties or
assets, the result of which would materially or substantially impair ALLIED's ability to
perform and discharge its/their obligations or its/their ability to complete the Project under
this Agreement.
4.5 No Violation of Law. ALLIED represents and warrants as of the date hereof
that, to the best of ALLIED's knowledge, this Agreement and the operation of the Project as
contemplated by ALLIED, do not violate any existing federal, state, or local laws or
regulations.
4.6 No Litigation Material to Project. ALLIED represents and warrants as of the
date hereof that, except as disclosed to, and approved by the CITY in writing, there is no
action, proceeding, or investigation now pending, or any basis therefor known or believed
to exist by ALLIED that questions the validity of this Agreement, or of any action to be
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taken under this Agreement., that would, if adversely determined, materially or substantially
impair ALLIED's ability to perform and observe its obligations under this Agreement, or that
would either directly or indirectly have an adverse effect on or impair the completion of the
Project.
4.7 Assurance of Governmental Approvals and Licenses. ALLIED represents
and warrants, as of the date hereof, that ALLIED has obtained and, to the best of ALLIED'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 ALLIED for the Project as of the date hereof.
ARTICLE 5 HOME PROGRAM REPRESENTATION AND WARRANTIES BY ALLIED
ALLIED, for itself and its development team, represents and warrants that
5.1 Accessibilitv. ALLIED 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 three (3)
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.
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.
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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.
5.2 Affirmative Marketing. ALLIED 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.
ALLIED shall be responsible for complying with the CITY's "Affirmative Marketing Policy"
document, incorporated herein, as amended from time to time. ALLIED shall maintain
records of actions taken to affirmatively market units, and to assess the results of these
actions.
5.3 Availability of HOME Funds. ALLIED 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 ALLIED, 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.
5.4 Compliance, with Agreement. ALLIED 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 ALLIED within the meaning of Article 11 of this Agreement, the CITY
may suspend or terminate this Agreement and all other agreements with ALLIED without
waiver or limitation of rights/remedies otherwise available to the CITY.
5.5 Conflict of Interest. ALLIED 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 ALLIED (other than an
employee or agent of ALLIED who occupies a unit as the project manager or maintenance
worker) may occupy a Project Unit. ALLIED 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
14
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.
5.6 Construction Standards. ALLIED 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, ALLIED agrees to comply with the applicable
standards identified in 24 CFR 92.251.
5.7 Covenants and Restrictions to Run with the Land. The CITY and ALLIED
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. ALLIED 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 ALLIED hereby declares their understanding and intent
that the covenants and restrictions set forth herein directly benefit the land by: a) enhancing
and increasing the enjoyment and ownership of the proposed Project by certain Extremely
Low- and Low -Income Senior Households, and b) making possible the obtaining of
advantageous financing for construction.
B. ALLIED covenants and agrees that until the expiration of the
Affordability Period it shall cause the Affordable Rental Housing to be used for Affordable
Housing for Extremely Low- to Low -Income Senior 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 Senior Rental Housing and other
15
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 Senior 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.
5.8 Displacement of Persons. ALLIED 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).
5.9 Initial and Annual Income Certification. ALLIED warrants, covenants and
agrees that it shall comply with the procedures for annual income determinations at 24
CFR 92.203. ALLIED shall obtain, complete and maintain on file, immediately prior to initial
occupancy, and annually thereafter, income certifications from each tenant Household
renting any Unit. ALLIED shall make a good faith effort to verify that the income provided
by an applicant or occupying Senior 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. ALLIED further warrants, covenants and agrees that it
shall cooperate with the CITY in the CITY's income certification/affordability monitoring
activities.
5.10 Lead -Based Paint. ALLIED covenants and agrees with the CITY that it shall
comply with all applicable requirements of the Lead -Based Paint Poisoning Prevention Act
of 42 U.S.C. 4821 et seq., 24 CFR Part 35, including the HUD 1012 Rule, 24 CFR
982.4010), 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. ALLIED 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. ALLIED shall be responsible for all disclosure, inspection, testing,
evaluation, and control and abatement activities.
5.11 Minority Outreach Activities. ALLIED 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 ALLIED comply with the CITY's
minority outreach program.
5.12 Other Laws and Regulations. ALLIED warrants, covenants and agrees that,
in addition to complying with the federal laws and regulations already cited in this
Agreement, ALLIED has 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. ALLIED 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 C.F.R. Part 92, as
applicable and in accordance with the type of Project assisted, including, but not limited to,
the limit on the per-unit subsidy amount at 24 C.F.R. 92.250.
D. The property standards at 24 C.F.R. 92.251.
E. The Project "Labor" requirements, as applicable, of 24 C.F.R. 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 C.F.R. 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 C.F.R. Part 5), in regards to the construction and management of the
proposed Project.
G. ALLIED 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 E.O. 11246, "Equal
Employment Opportunity," as amended by E.O. 11375, "Amending Executive Order 11246
Relating to Equal Employment Opportunity," and as supplemented by regulations at 41
C.F.R. 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.
The provisions of the Byrd Anti -Lobbying Amendment (31 U.S.C.
17
1352).
K. The provision of E.O.s 12549 and 12689, "Debarment and
Suspension," as set forth at 24 C.F.R. 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 C.F.R. 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 C.F.R. Part
1630, 41 C.F.R. Parts 60 et seq.
5.13 Faith Based Activities. ALLIED warrants, covenants and agrees that it
shall not engage in any prohibited activities described in 24 C.F.R. 92.257.
5.14 Reporting Requirements. ALLIED warrants, covenants and agrees that it
shall submit performance reports to the CITY as detailed in Section 8.19. Furthermore,
ALLIED agree to provide, at the sole cost of ALLIED, annual audited Financial Statements
for the Project expenses and ongoing financial transactions which occur as a result of this
Agreement as detailed in Sections 6.6 and 6.7. ALLIED 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).
5.15 Housing Affordability. ALLIED warrants, covenants and agrees that the
Project will meet the Affordable Rental Housing income targeting and other requirements of
24 C.F.R. 92.252 during the Affordability Period. The Units shall, at a minimum, be rented
to 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 thirty percent
(30%) for Extremely Low -Income and eighty percent (80%) for Low -Income, 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. 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
EM
revived according to its original terms. In the event ALLIED fails to comply with this Section
or the Affordability Period is not revived following transfer by foreclosure or transfer in lieu
of foreclosure, ALLIED shall return to the CITY all HOME Funds disbursed to ALLIED by
the CITY.
5.16 Terminated Proiects s . ALLIED understands and agrees that, if the Project
is terminated before completion, either voluntarily or otherwise, such constitutes an
ineligible activity and the CITY will not be required to provide any further HOME Program
assistance funding to the Project Units, and the City may seek available relief.
ARTICLE 6 COVENANTS AND AGREEMENTS OF ALLIED
ALLIED covenants and agrees to the following, for the entire term of the Agreement
6.1 Adequate Repair and Maintenance. After construction of the Project is
complete, ALLIED shall maintain the Project and Property in compliance with all applicable
codes, laws, and ordinances.
6.2 Affordable Rental Housing. ALLIED covenants and agrees that the Project
shall constitute Affordable Housing with at least eleven (11) units preserved as Extremely
Low- to Low -Income Rental Senior Housing (as variously provided at 24 C.F.R. 92.252), as
more specifically provided herein, 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 ALLIED 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 ALLIED acknowledges that damages
are not an adequate remedy at law for such breach.
6.3 Compliance With Environmental Laws. ALLIED 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, ALLIED
agrees that, if the CITY has reasonable grounds to suspect any such violation, ALLIED
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 an independent
consultant to inspect and test the eligible Property for such violation. If a violation is
discovered, ALLIED shall pay for the reasonable cost of the independent consultant.
Additionally, ALLIED 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 ALLIED;
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,
IN
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 ALLIED
or such properties relating to any loss or injury resulting from any hazardous or toxic
chemicals, materials, substance, or waste; and
3. ALLIED'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
D. 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 ALLIED 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.
6.4 Compliance With Laws. ALLIED 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 to
prevailing wage requirements. ALLIED 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
ALLIED to enable the CITY to comply with, conform to and obey) all federal statutes,
regulations, rules and policies applicable to the Project. The CITY and ALLIED
acknowledge that: (i) pursuant to 24 C.F.R. 92.354, a contract for the construction
(rehabilitation or new construction) of housing that includes fewer than 12 units assisted
with HOME funds need not contain a provision requiring the payment of the wages
prevailing in the locality, as predetermined by the Secretary of Labor pursuant to the
Davis -Bacon Act (40 U.S.C. 276a -276a- 5), to all laborers and mechanics employed in the
development of any part of the housing, or the overtime provisions, as applicable, of the
Contract Work Hours and Safety Standards Act (40 U.S.C. 327-332), and (ii) pursuant to
Cal. Labor Code 1720, the public participation in the project that would otherwise meet the
criteria of a public work for which State prevailing is required under Cal. Lab. Code 1720 et
seq. is exempt where the public funding is in the form of below-market interest rate loans
m
for a project in which occupancy of at least 40 percent of the units is restricted for at least
20 years, by deed or regulatory agreement, to individuals or families earning no more than
80 percent of the area median income. Nonetheless ALLIED shall be solely responsible for
determining and effectuating compliance. Notwithstanding anything to the contrary
contained herein, nothing in this Agreement shall be construed as imposing any
independent prevailing wage requirements that are different from those imposed by
applicable federal or state law.
6.5 Existence, Qualification. and Authority. ALLIED shall provide to the CITY any
evidence required or requested by the CITY to demonstrate the continuing existence,
qualification, and authority of ALLIED to execute this Agreement and to perform the acts
necessary to carry out the Project.
6.6 Financial Statements and Audits. ALLIED, 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, ALLIED,
at its sole cost 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.
6.7 Inspection and Audit of Books Records and Documents. ALLIED 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, upon reasonable prior written notice 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 ALLIED 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. ALLIED will maintain books and records for the Project using generally
accepted accounting principles. ALLIED agrees 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.
9
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 ALLIED in which case ALLIED shall bear the cost of such audit. ALLIED shall also
comply with any applicable audit requirements of 24 C.F.R. 92.506. This section shall
survive the termination of this Agreement.
C. ALLIED 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.
6.8 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 seventy-two (72) hours written notice, subject to the rights of the tenants.
6.9 No Other Liens. ALLIED 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, permanent, or pre -development loans in relation to the Affordable Rental
Senior Housing Project consistent with the attached EXHIBIT "C" Project Budget (as such
may be amended pursuant to Section 1.8 above), without the prior written consent of the
CITY.
6.10 Nondiscrimination. ALLIED 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 ALLIED 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.
6.11 Ownership. Except as required in pursuit hereof, ALLIED 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. ALLIED may request the City's written approval of the granting of the
security interests in the Property described in Section 6.9 above.
B. ALLIED 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 approves of such transfer in writing. The CITY also hereby
approves the removal of ALLIED's general partners by ALLIED's limited partners for cause
in accordance with the terms of the developer's partnership agreement.
22
C. The City hereby approves a Transfer of the Property from ALLIED to
Foundation for Affordable Housing V, Inc., a non-profit affiliate of ALLIED, and an
assumption of the Loan by such transferee at or before the end of the fifteen (15) -year
compliance period as described in Section 42(1)(1) of the Internal Revenue Code of 1986
(26 U.S.C. Section 42 (i)(1)), pursuant to an option agreement as described in ALLIED's
partnership agreement, provided that the City is in each instance given prior written notice
thereof, that there are then no defaults hereunder, and the City approves such transfer in
writing.
6.12 Payment of Liabilities. ALLIED 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.
6.13 Report of Events of Default. ALLIED shall promptly give written notice to the
CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 7 DISBURSEMENT OF HOME FUNDS
Without waiver of limitation, the parties agree as follows, regarding disbursement of HOME
Funds:
7.1 Loan Commitments and Financing Plan. ALLIED 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 ALLIED 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 ALLIED 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.
7.2 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 ALLIED 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 ALLIED's estimated construction Budget.
7.3 Use of HOME Program Funds. ALLIED warrants covenants and agrees that it
shall request HOME Program Funds only for HOME eligible costs as identified in the
Budget, attached hereto as EXHIBIT "C", including costs allowable under 24 C.F.R. 92.206,
aggregating not more than Eight Hundred Eighteen Thousand Thirty Four dollars and
00/100 ($818,034.00). The CITY's obligations shall in no event exceed the HOME Funds
amount specified in this Agreement.
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A. If any such Funds shall be determined to have been requested and/or
used by ALLIED for something other than for HOME eligible costs, and subject to the
notice and cure provisions of Section 11.2 hereunder, an equal amount from nonpublic
funds shall become immediately due and payable by ALLIED to the CITY; provided,
however, that ALLIED 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, ALLIED shall immediately return
such HOME Funds to the CITY.
C. The CITY will disburse HOME Funds, only to ALLIED through proper
invoicing, for HOME eligible costs of the Project as provided in this Article 7.
7.4 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 11, 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. ALLIED has submitted evidence that the combined monies from the
Funding Sources and the HOME Funds are not less than Eight Million Eight Hundred
Eleven Thousand Nine Hundred Fourteen dollars and 00/100 ($8,811,914) 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. ALLIED has acquired insurance coverage and delivered to the CITY
evidence of insurance as required in Article 10.
E. ALLIED is current with its compliance of all reporting requirements set
forth in this Agreement.
F. ALLIED 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 7.6 of this
Agreement.
H. The CITY has received, and continues to the have the right to
disburse, HOME Funds.
7.5 Request for and Disbursement of HOME Program Funds. ALLIED shall
request disbursement of HOME Funds using the CITY's Request for Disbursement of
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Funds Form, or a similar document. ALLIED shall only request a maximum of Eight
Hundred Eighteen Thousand Thirty Four dollars and 00/100 ($818,034.00) 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 7.6 of this Agreement.
7.6 ALLIED Certification. ALLIED 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. ALLIED has carried out all of its obligations and is in compliance with
all the obligations or covenants specified in this Agreement, to the extent 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. ALLIED 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.
7.7 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 8 DEVELOPMENT AND CONSTRUCTION OF PROJECT
Without waiver of limitation, the parties agree as follows
8.1 Pre -construction Meeting Regarding HOME Program Processes and
Procedures. The CITY will schedule, and ALLIED 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.
8.2 Commencement and Completion of Project ALLIED shall commence and
complete construction in accordance with the Project Description and Schedule as
identified in EXHIBIT "B".
8.3 Contracts and Subcontracts. Consistent with Section 6.3, 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.
ALLIED shall provide the CITY with copies of all agreements it has entered into with any
and all general contractors for the Affordable Project. ALLIED shall require that each such
general contractor agreement contain a provision whereby the party(ies) to the agreement
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other than the ALLIED agree; to: (i) notify the CITY immediately of any event of default by
ALLIED 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 ALLIED is not in default thereunder. ALLIED
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.
8.4 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, ALLIED shall, at its cost and expense, diligently
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 ALLIED 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, ALLIED shall make up the
deficiency.
8.5 Fees, Taxes and Other Levies. ALLIED 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, ALLIED 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, ALLIED 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.
8.6 Financing. ALLIED shall promptly inform the CITY of any new financing or
funding, and ALLIED shall provide the CITY copies of all agreements with any and all
Funding Sources for this Project. ALLIED agrees to notify the CITY immediately of
termination or cancellation of any such agreement(s) or receipt of notice of default/default
thereunder. ALLIED 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
ALLIED 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.
8.7 Identification Signage. Before the start of construction, ALLIED 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.
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8.8 Inspections. ALLIED 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 C.F.R. 92.504(d).
8.9 Utilities. ALLIED shall be 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 Affordable
Project.
8.10 Insurance and Bonds. Upon CITY's reasonable request, ALLIED shall
submit for CITY approval bonds, certificates and applicable endorsements for all insurance
and bonds required by this Agreement in accordance with Article 10.
8.11 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, ALLIED 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 ALLIED fails to discharge, bond or otherwise satisfy the CITY with
respect to any lien, encumbrance, charge or claim referred to in this Section 8.10, 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 ALLIED's expense. Alternatively, the CITY
may require ALLIED 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 ALLIED. ALLIED
hereby agrees to indemnify and hold the CITY harmless from liability for such liens,
encumbrances, charges or claims together with all related costs and expenses.
8.12 Permits and Licenses. Upon CITY's reasonable request, ALLIED shall
submit, for CITY approval, all the necessary permits and licenses required for
Commencement of Construction. As the CITY may reasonably request, ALLIED, at its sole
cost and expense, shall 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
Senior Housing Project, and for its stated purposes in accordance with all applicable
building, environmental, ecological, landmark, subdivision, zoning codes, laws, and
regulations. ALLIED 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.
8.13 Plans and Specifications.
A. ALLIED has submitted to the CITY preliminary plans and specifications
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for the Project under Conditional Use Permit file number C-11-128 ("Affordable Preliminary
Plans"). ALLIED will reconstruct 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.
8.14 Before Commencement of Construction, ALLIED 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.
8.15 Project Responsibilities/Public Work -Prevailing Wage Requirements.
ALLIED shall be solely responsible for all aspects of ALLIED'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. This
Project is a "public work" project for federal purposes including Davis Bacon and Related
Acts wage requirements absent written direction/determination otherwise by HUD or a
court of competent jurisdiction. This project is a "public work" project for state purposes
including California Labor Code Section 1720 et seq. wage requirements, to which Section
1771 applies, absent written direction/determination otherwise by the California Department
of Industrial Relations or a court of competent jurisdiction. Based thereon ALLIED shall
cause the Project work to be performed as a "public work." 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, ALLIED 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 ALLIED is properly
discharging its obligation to the CITY, and shall not be relied upon by ALLIED 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.
8.16 Property Condition. ALLIED 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. ALLIED and those taking direction under ALLIED 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
M.
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.
8.17 Quality of Work. ALLIED shall ensure that construction of the proposed
Project employs building materials of a quality suitable for the requirements of the Project.
ALLIED 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.
8.18 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, ALLIED shall comply with all applicable local, state and federal statutes and
regulations with respect to relocation planning, advisory assistance and payment of
monetary benefits. ALLIED shall be solely responsible for payment of any relocation
benefits to any displaced persons and any other obligations associated with complying with
said relocation laws.
8.19 Reporting Requirements. ALLIED 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, ALLIED shall submit a Quarterly Report, in a form provided
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 31St, June 30th, September 30th, and December 31St,
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, ALLIED 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: 1) the
rents, 2) the annual income and the family size of the Households; 3) the date of tenancy
commenced for each rental Unit: 4) tenant recertification information, and 5) an owner
certification from an officer of ALLIED 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. ALLIED 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, ALLIED shall submit proof of insurance as required in Article 10.
8.20 Scheduling and Extension of Time: Unavoidable Delay in Performance. It
shall be the responsibility of ALLIED 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:
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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.
B. Any and all extensions hereunder shall be by mutual written
agreement by the CITY's Housing and Community Development Division Manager and
ALLIED, shall not cumulatively exceed one hundred eighty (180) days.
8.21 Certificate of Completion. Upon completion of the construction of the
Project, ALLIED shall certify in writing to the CITY that the Affordable Rental Senior
Housing has been constructed in accordance with the plans and specifications approved by
the CITY, and Conditional Use Permit. Upon completion of the Affordable Rental Senior
Housing, ALLIED shall also submit to the CITY a cost -certifying final budget where ALLIED
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 ALLIED is in compliance with all of ALLIED's construction obligations, as
specified in this Agreement, the CITY shall furnish, within thirty (30) calendar days of a
written request by ALLIED, 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 ALLIED with a written statement
indicating in what respects ALLIED 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 ALLIED will need to take or what standards it will need to meet in order to
obtain the Certificate of Completion. Upon ALLIED taking the specified measures and
meeting the specified standards, ALLIED will certify to the CITY in writing of such
compliance and the CITY shall deliver the recordable Certificate of Completion to ALLIED
in accordance with the provisions of this section.
ARTICLE 9 PROJECT OPERATIONS
9.1 Operation of the Project. ALLIED shall lease, operate and manage the
Project in full conformity with the terms of this Agreement.
9.2 Occupancy Requirements. Of the fifty-one (51) Project Units, six (6) shall be
rented and occupied by, or if vacant, available for rental occupancy by (a) person(s) whose
annual household income at the time of initial occupancy is not greater than thirty percent
(30%), thirty-three (33) shall be occupied by, or if vacant, available for rental occupancy by
(a) person(s) whose annual household income a the time of initial occupancy is not greater
30
that fifty (50%), and twelve (12) shall be rented and occupied by, or if vacant, available for
rental occupancy by (a) person(s) whose annual household income at the time of initial
occupancy is not greater than sixty (60%), 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.
ALLIED shall comply with the income targeting requirements of 24 CFR 92.216. One (1)
Project unit shall be reserved as an on-site property manager unit.
9.3 Leasinq the Project. Before leasing any Units, ALLIED shall submit its
proposed form of Lease for CTTY's review and approval. ALLIED covenant and agree to
utilize only Leases that have been approved in advance by CITY. The CITY shall respond
to ALLIED submission of a sample Lease within thirty (30) days. Should CITY not respond
within thirty (30) days of Lease submittal, ALLIED shall be authorized to use the submitted
sample Lease. Additionally, ALLIED 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 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 30 days written notice
served by ALLIED or its authorized management entity upon the tenant specifying the
grounds for such action. ALLIED 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.
9.4 Lease Provisions. In addition to the requirements of 24 C.F.R. 92.253, the
Leases are subject to the following:
A. ALLIED shall include in Leases for all Units, provisions which authorize
ALLIED to immediately terminate the tenancy of any Household of which one or more
members misrepresented any fact material as to the qualification as a Extremely Low- to
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 Extremely Low- to 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°in) of the Household's actual adjusted monthly income.
B. In addition, the leases for Units shall provide that if the Affordable
Project is subject to state or federal rules governing Low Income Housing Tax Credits, the
provision of those rules regarding continued occupancy by, and increases in Rent for,
Households whose incomes exceed the eligible income limitation shall apply in place of the
provisions set forth in subsection (A) above.
9.5 Final Manaaement Plan. Before leasing the Affordable Rental Housing and
at least sixty (60) calendar days prior to the Project Completion Date, ALLIED 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 ALLIED or its designated property management entity plans to
market the availability of Units to prospective tenants and how ALLIED plans to certify the
eligibility of potential tenants. The Final Management Plan shall also address how ALLIED
31
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;
• Credit reports and checks;
• Criminal background checks;
• Deposit amounts, purpose, use and refund policy;
• Employment/Income verification;
9 Occupancy restrictions;
• Income Limit;
• Equal Housing Opportunity Statement;
• Restrictions on use of the premises; and
• 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 ALLIED proposes to enter into with Project tenants. ALLIED 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,
ALLIED 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.
9.6 Property Mana ement. With respect to the Project, ALLIED shall comply with
the following:
A. Management Responsibilities. ALLIED directly and/or through its
designated management entity, is specifically responsible for all management functions
with respect to the Affordable Rental Senior 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.
9.7 Maintenance and Securitv. ALLIED 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. ALLIED
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. ALLIED shall maintain the
housing in conformance with all applicable federal, state and local laws, ordinances, codes
32
and regulations, the Final Management Plan, and this Agreement
9.8 Nondiscrimination. All of the Units shall be available for occupancy on a
continuous basis to senior individuals who are income eligible. ALLIED shall not illegally
discriminate or segregate in the development, construction, use, enjoyment, occupancy or
conveyance of any part of the Affordable Rental Senior 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. ALLIED shall otherwise comply with all applicable local, state
and federal laws concerning nondiscrimination in housing. ALLIED nor any person
claiming under or through ALLIED, 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
ALLIED as to the Units or the housing project or portion thereof, shall contain covenants
concerning nondiscrimination consistent with this section. ALLIED shall include a statement
in all advertisements, notices and signs for availability of Units for rent to the effect that
ALLIED is an Equal Housing Opportunity Provider.
A. Nothing in this section is intended to require ALLIED to change the
character, design, use or operation of the Project, or to require ALLIED to obtain licenses
or permits other than those required for the Project.
9.9 Rent Schedule and Utility Allowances. ALLIED 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 C.F.R. 92.252. ALLIED 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. ALLIED shall re-examine the income of each tenant Household living in the Unit on
an annual basis.
ARTICLE 10 INSURANCE AND INDEMNITY
Without waiver of limitation, the parties agree as follows regarding ALLIED's insurance and
indemnity obligations:
10.1 Indemnification. ALLIED shall indemnify, hold harmless and defend the
CITY, HUD and each of their 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, HUD, ALLIED 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 our of performance of this
Agreement. ALLIED's obligation under the preceding sentence shall apply regardless of
whether the CITY, HUD or any of their officers, officials, employees, agents or volunteers
33
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 the
CITY, HUD or any of their officers, officials, employees, agents or volunteers.
A. If ALLIED should contract all or any portion of the work to be
performed under this Agreement, the ALLIED 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.
10.2 Insurance. Throughout the life of this Agreement, ALLIED 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:
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, ALLIED 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, ALLIED 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,
ALLIED 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.
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2. The Builders Risk (Course of Construction) and Property Insurance
policies shall name the CITY as 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,
ALLIED 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.
10.3 Bonds. ALLIED 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 Obligee.
A. The "Faithful Performance Bond" shall be at least equal to one
hundred percent (100%) of ALLIED's estimated construction costs, as reflected in
ALLIED's pro forma budget, attached hereto as EXHIBIT "C", to guarantee faithful
performance of the 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 ALLIED's estimated construction costs, as reflected in ALLIED's pro
forma budget, attached hereto as EXHIBIT "C", to satisfy claims of material supplies and of
mechanics and laborers employed for this Project. The bond shall be maintained by
ALLIED in full force and effect until the 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 ALLIED 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 ALLIED in full force and effect
until CITY is provided with a recorded Notice of Completion for construction of the Project
and shall be subject to and governed by the laws of the State of California."
ARTICLE 11 DEFAULT AND REMEDIES
11.1 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 11.2
has expired without a cure:
A. ALLIED's use of HOME Funds for costs other than Eligible Costs or for
uses not permitted by the terms of this Agreement;
35
B. ALLIED's failure to obtain and maintain the insurance coverage
required under this Agreement;
C. Except as otherwise provided in this Agreement, the failure of ALLIED
to punctually and properly perform any other covenant or agreement contained in this
Agreement including without limitation the following: 1) ALLIED'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) ALLIED's use of defective or unauthorized materials or
defective workmanship in pursuit of the Project; 3) ALLIED's failure to commence or
complete the Project, as specified in this Agreement, unless delay is permitted under
Section 8.20 of this Agreement; 4) ALLIED's cessation of the Project for a period of more
than fifteen (15) consecutive days (other than as provided at Section 8.20 of this
Agreement) prior to submitting to the CITY, pursuant to Section 8.21, certification that the
Project is complete; 5) any material adverse change in the condition of ALLIED 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)
ALLIED's failure to remedy any deficiencies in record keeping or failure to provide records
to the CITY upon the CITY's request; or 7) ALLIED'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 ALLIED shall prove to be materially false as of the date of which the
representation, warranty, or certification was given, or that ALLIED 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 ALLIED
inadvertence, ALLIED 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. ALLIED 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. ALLIED's failure, inability or admission in writing of its inability to pay
its debts as they become due or ALLIED's assignment for the benefit of creditors;
G. A receiver, trustee, or liquidator shall be appointed for ALLIED or any
substantial part of ALLIED's assets or properties, and not be removed within ten (10) days;
H. ALLIED's breach of any other material condition, covenant, warranty,
promise or representation contained in this Agreement not otherwise identified within this
Section; and
36
I. Any substantial or continuous breach by ALLIED of any material
obligation owed by ALLIED 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.
11.2 Notice of Default and Opportunity to Cure. The CITY shall give written notice
to ALLIED 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, ALLIED shall have an additional reasonable
period to cure so long as it commences cure within the specified time and thereafter
diligently pursues the cure in good faith. The CITY acknowledges and agrees that ALLIED
shall have the right to cure any defaults hereunder and that notice and cure rights
hereunder shall extend to any and all partners of ALLIED that are previously identified in
writing delivered to the CITY in the manner provided in this Agreement.
11.3 Remedies Upon an Event of Default. Upon the happening of an Event of
Default by ALLIED 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 ALLIED;
B. Bring an action in equitable relief: 1) seeking specific performance by
ALLIED 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.
11.4 Cure by Limited Partner. Any cure tendered by ALLIED's limited partner shall
be accepted or rejected on the same term and conditions as any cure.
ARTICLE 12 GENERAL PROVISIONS
Without waiver of limitation, the parties agree that the following general provisions shall
apply in the performance hereof:
12.1 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
37
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.
12.2 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 entitled to recover from the other party its reasonable attorney's fees
and legal expenses.
12.3 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.
12.4 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 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.
12.5 Disclaimer of Relationship. Nothing contained in this Agreement, nor any act
of the CITY or of ALLIED, 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.
12.6 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 ALLIED 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.
12.7 Effective Date. This Agreement shall be effective upon the close of Escrow
following City Council approval to close Escrow.
12.8 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.
12.9 Exhibits. Each exhibit and attachment referenced in this Agreement is, by the
reference, incorporated into and made a part of this Agreement.
W.
12.10 Expenses Incurred Upon Event of Default. ALLIED 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
ALLIED under this Agreement.
12.11 Governing Law and Venue. Except to the extent preempted by applicable
federal law, the laws of the :sate 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.
12.12 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.
12.13 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.
12.14 No Assignment or Succession. Except as may be otherwise expressly
provided by this Agreement, neither this Agreement, nor any interest of ALLIED in, under,
or to this Agreement, or the Project, may be assigned or transferred by ALLIED 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.
12.15 No Third -Party Beneficiary. No contractor, subcontractor, mechanic,
materialman, laborer, vendor, or other person hired or retained by ALLIED 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: 1) that they shall look to ALLIED as their
sole source of recovery if not paid, and 2) 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.
12.16 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 ALLIED 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 ALLIED in any
case shall entitle ALLIED 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.
12.17 Nonreliance. ALLIED hereby acknowledges having obtained such
independent legal or other advice as it has deemed necessary and declares that in no
39
manner has it relied on the CITY, it agents, employees or attorneys in entering into this
Agreement.
12.18 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 ALLIED: AMCAL ALLIED FUND, L.P.
c/o AMCAL Multi -Housing, Inc.
30141 Agoura Road, Suite 100
Agoura Hills, CA 91301
12.19 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.
12.20 Recording of Documents. ALLIED 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.
12.21 Remedies Cumulative. All powers and remedies given by this Agreement
shall be cumulative and in addition to those otherwise provided by law.
12.22 Severability. 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.
,m
IN WITNESS WHERI_OF, the parties have executed this Agreement in Fresno,
California, the day and year first above written.
CITY OF FRESNO, a Municipal Corporation
By: / � �44 -, 4-�� �,
Mark Scott, City Manager
(Attach notary certificate of acknowledgment)
Date:
ATTEST:
REBECCA E. KLISCH
City Clerk
By:
Date: 9-01 Y -r1
AMCAL ALLIED FUND, L.P.
a California limited partnership
By: AMCAL Multi -Housing, Inc.
a California Corporation,
it's General Partner
By:
Arjun Naga katti, President
(Attach notary certificate of acknowledgment)
Date:
Attachments:
APPROVED AS TO FORM:
JAMES SANCHEZ
City Attorney
By: _ I. r�1i I,
Senior Deputy City Attoen y
Date: q -- M-11
f
By: Foundation for Affordable Housing V,
Inc., a California nonprofit public
benefit corporation, its General Partner
Deborrah A. Willard, President
(Attach notary certificate of acknowledgment)
Date:
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
E151
ACKNOWLEDGMENT
State of California
County of Los Angeles )
On September 26, 2011 before me,
Dawn Janel Zusman, Notary Public
(insert name and title of the officer)
personally appeared Arjun Nagarkatti
who proved to me on the basis of satisfactory evidence to be the person($) whose name($) ishre
subscribed to the within instrument and acknowledged to me that helsi°tekFrey executed the same in
hislbe0therr authorized capacity(ips), and that by his/ eir signaturekg) on the instrument the
persona, 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.
DAWN JANEL ZUS MAN
WITNESS myhand and official seal. _ COMMISsion # 1854068
Q+� Notary Public - California z
° Los Angeles County a
My Comm, Expires Jan 14, 2013
Signature (Seal)
EXHIBIT A: PROPERTY DESCRIPTION
Legal Description (717 South Seventh Street Portion)
PHASE 1:
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF FRESNO, COUNTY OF
FRESNO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PORTION OF PARCEL 2:
THAT PORTION OF KENMOOR.E PARK, ACCORDING THE MAP THEREOF RECORDED
NOVEMBER 8, 1911 IN BOOK 7 PAGE 4 OF RECORD OF SURVEYS AND THAT PORTION OF
LINCOLN HILL ADDITION, FRESNO COUNTY RECORDS IN THE CITY OF FRESNO, COUNTY OF
FRESNO, STATE OF CALIFORNIA, DESCRIBED AS A WHOLE AS FOLLOWS:
COMMENCING AT THE NORTH '/4 COR OF SECTION 11, T.14S, R.20E. M.D.B&M. THENCE
SOUTH 89029'08" EAST ALONG THE NORTH LINE OF SAID SECTION 11, A DISTANCE OF
391.78 FEET, THENCE SOUTH 00025'07" WEST, A DISTANCE OF 200.23 FEET TO THE TRUE
POINT OF BEGINNING, SAID POINT ALSO BEING THE SOUTHWEST CORNER OF SAID
PARCEL "1 ".
THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL "1", NORTH 89039'33"
WEST, A DISTANCE OF 83.82 FEET, THENCE NORTHERLY ALONG THE WEST LINE OF SAID
PARCEL "A", NORTH 00029'22" EAST, A DISTANCE OF 150 FEET TO A POINT, SAID POINT
ALSO BEING THE NORTHEAST CORNER OF PARCEL "1", THENCE SOUTH 89°29'06" EAST, A
DISTANCE OF 250 FEET, THENCE SOUTH 00029'22" WEST, A DISTANCE OF 267.25 FEET,
THENCE NORTH 89029'06" WEST, A DISTANCE OF 101.56 FEET, THENCE NORTH 00°30'54"
EAST, A DISTANCE OF 3.50 FEET, THENCE NORTH 89029'06" WEST, A DISTANCE OF 232.12
FEET, THENCE NORTH 00025'07" EAST, A DISTANCE OF 113.50 FEET TO THE TRUE POINT OF
BEGINNING.
CONTAINING 1.74 ACRES MORE OR LESS.
PORTION OF APN: 470-052-02T
Page 1 of Exhibit B
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 fifty-one (51) one- and two-bedroom affordable senior
housing units (and one (1) manager unit) of which eleven (11) will be HOME -Assisted and
preserved as Extremely Low- to Low -Income Senior Housing in accordance with the chart
below:
HOME FUNDED UNITS
% of Median Units
30% or less 2
45% 4
50% 4
60% 1
Totals 1,1
One (1) two-bedroom unit will be designated as an on-site property manager unit.
HOME Funds will be made available by the CITY for payment of HOME eligible costs not to
exceed the lesser of Eight Hundred Eighteen Thousand Thirty Four dollars and 00/100
($818,034.00), and the aggregate HOME Program per unit cap (24 C.F.R. 92.250) for the
eleven (11) HOME -assisted Units as determined by the CITY, as needed, for HOME eligible
project development costs.
PROJECT SCHEDULE:
Start Construction: November 15, 2012
Complete Construction: December 13, 2013
Complete Lease Up: March 1, 2014
Page 2 of Exhibit B
EXHIBIT C: BUDGET AND CASH FLOW STATEMENT
Total
Development
_Costs
Residential
Total
Fundino Sources
Consic/
Tax Credit Perm
HOME RDA Loan
3,593,588
Acquisition Costs:
34,023
—__Equity_
34,023
Purchase Price _ _ 361,000
_ Off-site improvements
361,000
264,202
Closing, Title & Recording 20 000
20,000
SUBTOTAL _ 381,000
381,000
—�
327,959
I_ Construction
Basic Construction Contract
3,729,722
_ 3,593,588
136,134
3,593,588
Bond Premium
34,023
_
34,023
_
_ Off-site improvements
264,202
264,202
Infrastructure Improvements
General Requirements
327,959
327939
Contractor Overhead
132,815
_
_
132,815
Contractor Pofit_
132,815
132,815
Construction Contingency
241,446
_
241,446
SUBTOTAL
4,862,962
�
400,336
1 3,869,057
593,569
Page 1 of Exhibit C
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EXHIBIT D; DECLARATION OF RESTRICTIONS
RECORDING REQUESTED BY
benefit of the City of Fresno and
the payment of a recording fee in <
Government Code Sections 6103 a
AND WHEN RECORDED MAIL TC
CITY OF FRESNO
City Clerk
2600 Fresno Street, Room 2132
Fresno, CA 93721-3603
Title Order No.
Escrow No.
THIS DECLARATION OF RESTRICTIONS, ("Declaration"), is executed as of this
oA day of Sat• ` 2011 by AMCAL ALLIED FUNDS, L.P., a California limited
partnership in good standing with its principal office in Agoura Hills, California, referred
herein as " ("Declarant") in favor of the City of Fresno, acting by and through its
Development and Resources 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: 470-052-02T Portion, which is more
particularly described in Exhibit "A", attached hereto and made a part hereof (the
"Property"); and
WHEREAS, Pursuant to a certain Development and Disposition and HOME
Investment Partnerships Program Agreement dated, 2011 incorporated herein,
("HOME Agreement") and instruments referenced therein, Declarant agrees to utilize
and the City agrees to provide certain HOME Program Funds from the United States
Department of Housing and Urban Development ("HUD"), to Declarant for certain
Affordable Senior Rental dousing (the "Project") upon the Property, with no less than
fifty-one (51) of the proposed fifty-one (51) Units to be preserved as Extremely Low- to
Low -Income Affordable Rental Housing for tenants earning up to eighty (80%) 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 commencing from the
date the CITY enters the project completion information into HUD's Integrated
Disbursement and Information System; and
Page 1 of Exhibit D
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 Declaration, all of which are
declared and agreed to be in furtherance of the proposed Affordable Rental Housing
Project, the City's General Plan, Consolidated and Annual Action Plans, and Housing
Element, and therein 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 the Declarant is 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 from the date the project tenant information is entered into the Integrated
Disbursement and Information System, 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
Page 2 of Exhibit D
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 msidence does not apply to: 1) persons, other than natural
persons, who acquire the Project Property or portion thereof by foreclosure or deed in
lieu of foreclosure; or (ii) HUD qualified entities that acquire the Property or portion
thereof, with the consent of the City.
(iii) Income Requirements. A total of fifty-one (51) Units
constituting Affordable Rental Senior Housing upon the Property may be leased only to
(a) person(s) whose annual household income at the time of initial occupancy is not
greater than eighty percent (80%) 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, as
more specifically provided in the HOME Agreement.
(iv) Injunctive Relief and Recapture. Should any of the
Extremely Low- to Low -Income Units constituting Affordable Rental Senior 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 eighty
percent (80%) of the most recent annual median income, the City shall be entitled to
injunctive relief and recapture.
3. Enforcement of Restrictions. 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.
4. 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 -
Page 3 of Exhibit D
income affordability. However, the requirements with respect to this Affordable Rental
Senior Housing Project, 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. Amendment. No amendment or modification of this Declaration shall be
permitted without the prior written consent of City and Declarant.
Page 4 of Exhibit D
12. Recordation. Declarant acknowledges that this Declaration will be filed of
record in the Office of the Recorder of county of Fresno, State of California.
13. 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.
14. 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 5 of Exhibit D
IN WITNESS WHEREOF,
Restrictions on the date first written
DECLARANT:
AMCAL ALLIED FUND, LP
a California limited partnership
Declarant has executed this Declaration of
above.
By: AMCAL MULTI -HOUSING, INC
a California Corporation
By:
_ =j'=� *--
(Attach notary certificate of acknowledgement)
Title: A_ rjun Nagarkatti, Vice President
Date: --'1 &
Page 6 of Exhibit D
EXHIBIT "A" TO DECLARATION OF RESTRICTIONS
Legal Description (717 South Seventh Street Portion)
PHASE 1:
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PORTION OF PARCEL 2:
THAT PORTION OF KENMOORE PARK, ACCORDING THE MAP THEREOF
RECORDED NOVEMBER 8, 1911 IN BOOK 7 PAGE 4 OF RECORD OF SURVEYS
AND THAT PORTION OF LINCOLN HILL ADDITION, FRESNO COUNTY RECORDS
IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA,
DESCRIBED AS A WHOLE AS FOLLOWS:
COMMENCING AT THE NORTH'/4 COR OF SECTION 11, T. 14S, R.20E. M.D.B&M.
THENCE SOUTH 89029'08" EAST ALONG THE NORTH LINE OF SAID SECTION 11,
A DISTANCE OF 391.78 FEET, THENCE SOUTH 00025'07" WEST, A DISTANCE OF
200.23 FEET TO THE TRUE POINT OF BEGINNING, SAID POINT ALSO BEING THE
SOUTHWEST CORNER OF SAID PARCEL 1".
THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL 1", NORTH
89039'33" WEST, A DISTANCE OF 83.82 FEET, THENCE NORTHERLY ALONG THE
WEST LINE OF SAID PARCEL "A", NORTH 00029'22" EAST, A DISTANCE OF 150
FEET TO A POINT, SAID POINT ALSO BEING THE NORTHEAST CORNER OF
PARCEL "1", THENCE SOUTH 89029'06" EAST, A DISTANCE OF 250 FEET,
THENCE SOUTH 00029'22" WEST, A DISTANCE OF 267.25 FEET, THENCE NORTH
89029'06" WEST, A DISTANCE OF 101.56 FEET, THENCE NORTH 00030'54" EAST,
A DISTANCE OF 3.50 FEET, THENCE NORTH 89029'06" WEST, A DISTANCE OF
232.12 FEET, THENCE NORTH 00025'07" EAST, A DISTANCE OF 113.50 FEET TO
THE TRUE POINT OF BEGINNING.
CONTAINING 1.74 ACRES MORE OR LESS.
PORTION OF APN: 470-052-02T
EXHIBIT" E: CERTIFICATE OF COMPLETION
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
City of Fresno
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
(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: 470-052-02T portion
City of Fresno
Craig Scharton, Assistant Director
Development and Resource
Management Department
Page 1 of Exhibit E
CERTIFICATE OF COMPLETION
APN: 470-052-02T
Recitals:
A. By a City of Fresno ("CITY") Development and Disposition Agreement and HOME
Investment Partnerships Program Agreement dated 12011 ("HOME Agreement"),
AMCAL Allied Fund, L.P. , a California limited partnership in good standing with its principal
office in Agoura Hills, California, ("ALLIED") agreed to develop a fifty-one (51) unit affordable
senior rental housing project (and one (1) manager's unit), of which eleven (11) units are
HOME Assisted units to be reserved for rental by Extremely Low to Low -Income Seniors
("Project"), upon the premises legally described in EXHIBIT "A" attached to the HOME
Agreement and made a part hereof by this reference, (the "Property") for the purposes of
Affordable Senior 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 ALLIED completes the Project,
ALLIED may ask CITY to record a Certificate of Completion.
D. ALLIED has asked CITY to furnish ALLIED with a recordable Certificate of Completion.
E. The CITY's issuance of this Certificate of Completion is conclusive evidence that
ALLIED has completed construction the Project as set forth in the HOME Agreement.
NOW THEREFORE:
1. The CITY certifies that ALLIED commenced the Project on , 20_
and completed the Project on 20_, and has done so in full compliance with the
HOME Agreement.
2. This Certificate of Completion is not evidence of the ALLIED'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.
Agreement.
4. Nothing contained herein modifies any provision of the HOME
Page 2 of Exhibit E
IN WITNESS WHEREOF, CITY has executed this Certificate of Completion as of this
day of , 20.
CITY OF FRESNO
Craig Scharton, Assistant Director
Development and Resource Management Department
ATTEST:
CITY CLERK
By:
Deputy
Date:
AMCAL ALLIED FUNDS, LP
a California limited partnership
BY: AMCAL MULTI -HOUSING, INC.
a California corporation
Its General Partner
By:
(Attach notary certificate of acknowledgement)
NAME: Arjun Nagarkatti
TITLE: Executive Vice President
APPROVED AS TO FORM:
CITY ATTORNEY
By:
Assistant/Deputy
Name:
Date:
Page 3 of Exhibit E
EXHIBIT F: PROMISSORY NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to Borrower for
Cancellation.
PROMISSORY NOTE
Loan Amount: $818,034.00
Fresno, California
Date: , 2011
For value received, the undersigned, AMCAL ALLIED FUND, L.P., a California limited
partnership ("Borrower"), promises to pay to the order of the City of Fresno, a California
municipal corporation, ("Lencler"), the sum of Eight Hundred Eighteen Thousand Thirty Four
Seven dollars and 001100 ($818,034.00), 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 three percent (3%) annually in
accordance with the HOME Agreement regarding Affordable Senior Housing Project, dated
-2011, entered into between AMCAL ALLIED FUND, L.P. and the City of Fresno,
wi h principal and interest due and payable annually from 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 Senior
Housing Project, along with attorney's fees and costs of collection, and without relief from
valuation and appraisement laws, or (ii) fifty-five (55) years from the permanent loan
conversion date ("Maturity Date").
This is a Residual Receipts Note. Principal and interest payments in the amount of Residual
Receipts, 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, fifty percent (50%) of the
sum of: (i) all cash received by the Affordable Rental Senior Housing Project from (A) 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), (B)
payments from HUD under a Housing Assistance Program Section 8 Contract to the Project,
if any, and excluding (a) tenant security or other deposits required by law to be segregated,
Page 1 of Exhibit F
(b) interest on reserves not available for distribution, and (c) loan and capital contribution
proceeds, 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; (iv) payments towards the deferred developer fee
and any interest thereon (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
k , 2011, incorporated herein, ("HOME Agreement") and instruments referenced
therein. In addition, as used in this Note, the following terms will have the following
meanings:
Business Da means any day other than Saturday, Sunday, or public holiday or the
Page 2 of Exhibit F
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 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 3`d 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.
Page 3 of Exhibit F
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.
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. A sale or
transfer shall not include those matters excluded from the definition of "Transfer" in Section
6.11 of the HOME Program Agreement.
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.
Page 4 of Exhibit F
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.
Page 5 of Exhibit F
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.
BORROWER: AMCAL ALLIED FUND, L.P.
a California limited partnership
By: AMCAL MULTI -HOUSING, INC.
a California corporation, its general partner
By. =_A�e
(Attach notary certificate if acknowledgment)
Name: Arun Na arkatti
Title: President
Date:
Page 6 of Exhibit F
ACKNOWLEDGMENT
State of California
County of Los Angeles )
On September 26, 2011 before me,
Dawn Janel Zusman, Notary Public
(insert name and title of the officer)
personally appeared Arjun Nagarkatti
who proved to me on the basis of satisfactory evidence to be the person(g) whose name($') iskw-&
subscribed to the within instrument and acknowledged to me that he/sit- t y executed the same in
his44e4their authorized capacity(i94), and that by his/herf miw signatureW on the instrument the
person($), or the entity upon behalf of which the personal 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.
DAWN JANEL ZUSMAN
WITNESS my hand and official seal a 'q CammI5SlOn # t854068
Z E Notary Public - California z
z
Los Angeles County r
My Comm. Expires Jun 14, 2013
Signature (Seal)
RECORDING REQUESTED BY
Chicago Title Company
AND WI IEN RECORDED MAIL TO:
City of Fresno
I ousing and Community Development Division
2600 Fresno Street, Room 3070
Fresno CA 93721-3605
A.P.N.:
Space Above chis l,.ine boi Recoi(lei's Use Only
File No.:
DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, made this , 2011, by
TRUSTOR: AMCAL Allied Fund, L.P., a California limited partnership
whose address is 30141 Agoura Road, Suite 100, Agoura Hills, California, 91301,
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, issues, 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 Development and Disposition and HOME Program
Agreement entered between [--_] and Beneficiary dated [, 200_]. 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 $818,034.00 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.
56929A126543v3 Page I of
(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, "> rustor 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
56929\ 1265430 Paae 2 of 4
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.
56929V1265430 Pace 3 of 4
(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:
30141 Agoura Road, Suite 100
Augoura Hills, CA 91301
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
$ 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 DDA, 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]
i6929v 26543N Paee 4 of 4
EXHIBIT "A" TO DEED OF TRUST
Legal Description (717 South Seventh Street Portion)
PHASE 1:
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PORTION OF PARCEL 2:
THAT PORTION OF KENMOORE PARK, ACCORDING THE MAP THEREOF
RECORDED NOVEMBER 8, 1911 IN BOOK 7 PAGE 4 OF RECORD OF SURVEYS
AND THAT PORTION OF LINCOLN HILL ADDITION, FRESNO COUNTY RECORDS
IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA,
DESCRIBED AS A WHOLE AS FOLLOWS:
COMMENCING AT THE NORTH ''Y4 COR OF SECTION 11, T.14S, R.20E. M.D.B&M.
THENCE SOUTH 89029'08" EAST ALONG THE NORTH LINE OF SAID SECTION 11,
A DISTANCE OF 391.78 FEET, THENCE SOUTH 00°25'07" WEST, A DISTANCE OF
200.23 FEET TO THE TRUE POINT OF BEGINNING, SAID POINT ALSO BEING THE
SOUTHWEST CORNER OF SAID PARCEL "1".
THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL "1", NORTH
89039'33" WEST, A DISTANCE OF 83.82 FEET, THENCE NORTHERLY ALONG THE
WEST LINE OF SAID PARCEL "A", NORTH 00029'22" EAST, A DISTANCE OF 150
FEET TO A POINT, SAID POINT ALSO BEING THE NORTHEAST CORNER OF
PARCEL "1", THENCE SOUTH 89029'06" EAST, A DISTANCE OF 250 FEET,
THENCE SOUTH 00029'22" WEST, A DISTANCE OF 267.25 FEET, THENCE NORTH
89029'06" WEST, A DISTANCE OF 101.56 FEET, THENCE NORTH 00°30'54" EAST,
A DISTANCE OF 3.50 FEET, THENCE NORTH 89°29'06" WEST, A DISTANCE OF
232.12 FEET, THENCE NORTH 00025'07" EAST, A DISTANCE OF 113.50 FEET TO
THE TRUE POINT OF BEGINNING.
CONTAINING 1.74 ACRES MORE OR LESS.
PORTION OF APN: 470-052-02T
cly of
ICS■' do
REPORT 1`0 THE CITY COUNCIL AGENDA ITEM NO.
COUNCIL MEETING September 29 2011
September 29, 2011 APPROVED BY
FROM: CRAIG SCHARTON, Assistant Direaof "L `25PAR ENT DIRECT
Development and Resource Management
CITY MANA���
-
CLAUDIA CAZARES, Division Manag�lc.�. r
Housing and Community Development Division`'
By: CORRINA NUNEZ, Project Mana
Housing and Community Develop t ivision
Presentee# to U4, co I.. d I
Date
Disposition _
UV
SUBJECT: CONTINGENT APPROVAL OF A $818,034 DISPOSITION AND DEVELOPMENT AND
HOME AGREEMENT WITH AMCAL ALLIED FUND, LP, FOR DEVELOPMENT OF THE
ALLIED PLAZA SE IJIOR APARTMENTS, PHASE I, A 52 -UNIT AFFORDABLE SENIOR
HOUSING PROJECT TO BE LOCATED ON THE SOUTH SIDE OF VENTURA BETWEEN
SEVENTH STREET AND EIGHTH STREET IN SOUTHEAST FRESNO
RECOMMENDATIONS
Staff recommends that the City Council approve a $818,034 Disposition and Development and HOME
Agreement (DDA/HOME Agreement) with AMCAL Allied Fund, LP, substantially in the form attached as
Exhibit "B" — DDA/HOME Agreement, for development of the Allied Plaza Senior Apartments, a 52 -unit
affordable senior housing project to be located on the south side of Ventura Avenue between Seventh St.
and Eighth St., in southeast Fresno, a portion of APN: 470-052-02 (please see Exhibit °C" — Project
Location Maps), subject to prior approval as to form by the City Attorney's Office.
EXECUTIVE SUMMARY
In August 2010, AMCAL entered into a joint City/RDA Exclusive Negotiation Agreement (ENA) to
negotiate pre -development project matters. AMCAL and the City are now ready to take certain steps
necessary to encumber federal HOME funds for the project, and seek Council authorization to: (i)
negotiate final terms and conditions of the DDA/HOME Agreement, (ii) open a project escrow, and (iii)
execute and tender into escrow the project DDA/HOME Agreement, documents, instruments and
instructions. Staff will return to the Housing and Community Development Commission (HCDC) and
Council at a later date for approval of California Environmental Quality Act (CEQA) findings, entitlements,
the DDA/HOME Agreement as it relates to CEQA findings and to close escrow. The DDA/HOME
Agreement provides $818,034 to the project, as a loan at 3% interest with principal and interest repaid
from 50% of the project's annual residual receipts. Cost of the Phase I is estimated at $8.8 million, of which
a majority of financing is expected to come from the California Tax Credit Allocation Committee (TCAC), Low
Income Housing Tax Credits (LIHTC:) Program. Upon final approval by Council, the City will convey, through
escrow, a portion of the Seventh Street property to AMCAL Allied Fund, LP, for Phase I.
BACKGROUND
In 2005, the City of Fresno began negotiations with the FUSD for the purchase of a vacant 2.85-arce
parcel located at 717 Seventh Street to facilitate a mixed-use project consisting of affordable residential
units and commercial/retail space. At the end of 2008, the purchase was complete and City and RDA staff
began seeking a developer to develop a viable project for the site. A proposed project was to consist of
REPORT TO COUNCIL
Disposition and Development and HOME Agreement with AMCAL Allied Fund for a 52 -Unit Senior Apartment
Project
September 29, 2011
Page 2 of 3
housing with a possible commercial/retail component. In March 2010, the City and RDA completed a
formal request for proposals process for selection of a developer for the project. The evaluation team for
selection of a developer consistec of City staff from the Housing and Community Development Division
and RDA staff. In April, 2010, the City and RDA selected AMCAL as the most qualified and experienced
developer. The selection was based on AMCAL's experience as a developer, manager, and owner of
quality affordable housing.
AMCAL has over 30 years of residential development experience and has successfully developed over 40
affordable family, senior, and farmworker housing projects throughout California; a total of 3,534 units.
AMCAL is also the developer of the recently completed Summer Hill Place Apartments, a 50 -unit
affordable workforce housing project and Sandstone Apartments, a 69 -unit affordable multifamily housing
project, located in southwest Fresno. In 2007, AMCAL, a southern California development company,
opened a Fresno office as a result of the flourishing development activities in the central region. AMCAL's
Fresno office staff will be overseeing development of the proposed project.
In August, 2010, in preparation for development, the City, RDA, and AMCAL entered in to an ENA to
negotiate pre -development matters for a proposed project. During the negotiation agreement period, the
City, RDA, and AMCAL were able to resolve a number of issues in regards to development of the site.
The site is now ready for development (please see Exhibit "E" — Current Property Conditions). However,
due to the extreme competitive nature of the tax credits, AMCAL is proposing to complete the development in
two phases. Phasing will position AMCAL with a competitive advantage by lowering the number of units to be
funded with tax credits and increasing the public subsidy per unit. This strategy should produce a LIHTC tie-
breaker score that will be high enough to secure an award of approximately $5.7 million in tax credits.
AMCAL and the City are now prepared to take certain interim steps necessary to encumber federal
HOME funds for Phase I, and seek Council authorization to: (i) negotiate final terms and conditions of the
DDA/HOME Agreement, (ii) open a project escrow, and (iii) execute and tender into escrow the project
DDA/HOME Agreement, documents, instruments and instructions. Staff will return to HCDC and Council
at a later date for approval of the CEQA findings, entitlements, final DDA/HOME Agreement to include
CEQA approval, and to close escrow.
Cost of the proposed Phase I is estimated at $8.8 million of which $818,034 in HOME Program funds will'.
serve as gap financing. Of the $818,034, $361,100 represents one-half of the cost the City initially paid
for the property. The other half of the property costs will be allocated to Phase II of this development.
HOME funding for Phase II (44 units) will be presented to Council for consideration at a later date. The
$456,934 balance will be used to fund other Phase I project costs. The $818,034 in City HOME funds will
be provided to AMCAL as a loan at 3% interest, with principal and interest to be repaid from 50% of the
project's annual residual receipts. AMCAL is anticipating that $5.6 million of the project cost will be
financed with LIHTC (please see Exhibit "A" — Project Cost Information/Budget).
Phase I will consist of 51 units of affordable senior housing, one manager's unit, a community clubhouse,
ground floor commercial/retail space on Ventura, a swimming pool, outdoor recreation area, and parking.
The buildings will be two- and three-story structures. One -bedroom units will have approximately 661
square feet of living space and the two-bedroom units will have approximately 804 square feet of living
space. Phase I also consists of a commercial/retail component on the ground floor fronting Ventura
Street (please see Exhibit "D" — Plans and Elevations). The project's residential cost per square foot is
estimated at $180.51, the community building cost per square foot is estimated at $58.65 and the
commercial area cost per square foot is estimated at $44.59. The total development cost per gross
square foot is $166.14. The grounds will incorporate landscaping that will include a variety of trees,
REPORT TO COUNCIL
Disposition and Development and HOME Agreement with AMCAL Allied Fund for a 52 -Unit Senior Apartment
Project
September 29, 2011
Page 3 of 3
flowers, shrubs, walkways, and a sitting area. Additionally, the project will meet the Leadership in Energy
and Environmental Design standards and incorporate the City's Universal Design features.
Once completed, the Allied Plaza Senior Apartments 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 City's revitalization efforts for the
Ventura/Kings Canyon corridor.
ENVIRONMENTAL FINDING
In anticipation of the funding, the City completed a National Environmental Policy Act assessment on April 26,
2007 (EA No. H-2005-03), which resulted in a Finding of No Significant Impact. On June 11, 2007, the City
received HUD environmental clearance and authorization for use of HOME funds for the proposed mixed-use
project. Staff is currently conducting a project environmental assessment for the purposes of CEQA. Staff will
return to Council this fall, for approval of the CEQA findings, entitlements, final DDA/HOME Agreement,
and to close escrow.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
The Housing and Community Development Commission considered and recommended this item for approval
on September 14, 2011.
FISCAL IMPACT
HOME Program funds for the Allied Plaza Senior Housing project are available in the Development and
Resource Management Department's Fiscal Year 2012 Budget. The project's total property acquisition and
construction cost is estimated at $8.8 million, of which $818,034 in HOME Program funds is proposed to be
provided as gap financing. An estimated $5.7 million in LIHTC funds is expected to finance a majority of the
project costs, with the balance to come from other funding sources.
I_ 9:24,04101 IN
Exhibit A — Project Cost Information/Budget
Exhibit B — Disposition and Development and HOME Agreement
Exhibit C — Project Location Maps
Exhibit D — Plans and Elevations
Exhibit E — Current Property Conditions
EXHIBIT "A"
PROJECT COST INFORMATION/BUDGET
PROJECT COST INFORMATION
Residential
Protect Name:
Allied Plaza Senior Apartments
Location:
District 5: 3740 E. Ventura Street (south
side of Ventura between Seventh and
Eighth).
Total No. of Housin Units:
52
Total No. of HOME Units:
11
Gross Square Foot Residential:
47,176
Residential Construction (Hard Costs):
$4,557,312
Soft Costs:
_
$3,421,056
Land Cost:
$381,000
Reserves:
$156,477
Development Costs Residential:
$8,515,845
Cost Per Unit:
$163,766
Residential Cost Per GSF:
$180.51
Community Building
Gross Square Foot Community: 2,961
Construction Hard Costs): $173,650
Cost Per GSF: $58.65
Commercial
Gross Square Foot Residential: 2,960
Construction (Hard Costs): $132,000
Cost Per GSF: $44.59
Total Development Cost: $8,821,495
Total Cost Per GSF: $166.14
PROJECT BUDGET
Total
Development Resident;
Costs al Total
Funtlin Sources
HOME RDA
Tax Credit Constr./Perm
Eguity Loan
_
Acquisition Costs:
Purchase Price
361,000
361,000
Closin Title & Recordin
20,000
20,000
SUBTOTAL
_
381,000
_
381,000
Construction
_
Basic Construction Contract
3,729,722
31593588
136,134
3,593,588
Bond Premium
34,023
34,023
_ Off-site improvements
264,202
264,202
_
Infrastructure Improvements
General Requirements _
327,939
_
327,939
__- Contractor Overhead
132,815
_
132,815
Contractor Profit
132 815
_
___
132.815
Construction Contingency-
ontin enc
241446
_ _
241446
SUBTOTAL
4,862,962
_
_
400,336
3,869,057 593,569
Development
Appraisal _
10,000
10,000
Architect/Engineer
835,000
689,698
145,302
_
Boundary & Topographic
Sury
15,000
15 000
-----
70,000
70,000
Developer Fee _
1,050,651
_
1,002,107
48544
Market Study
810001
8.000
_ SUBTOTAL
1,988,651
r8g,6981
1,250,409
48,544
Other Develo ment
Real Estate Tax _
9.025
9,025
------ Insurance _
58,660
58,660
Relocation
0
_
Permits, Fees & Hookups
127,500
127,500
Impiact/Mitigation Fees
739,500
457,034 282,466
Construction Loan Fees
32,858
32.858
Construction Interest
198,572
198,672
Ori ;nation Fee
55,159
55,159
Other Accrued Interest HA
LIHTC Fees __
44731
44,731
Environmental Audit
Accounting/Audit
30,000
30,000
Soft Cost Contin encs
52 250
__ _
52,260
Marketing/Leasing
Expenses _
84,150
_
84,150
_,_„_Operating_Reserves
143,727
143,727
-_--
_Replacement Reserves:
12,750
_.
12,750
SUBTOTAL
1568882
_
457,034 409,966
578,155 143,727
Total Develo ment Costs
8,821,495
838,0341 1,500,000
5,697 621 785,840