HomeMy WebLinkAboutHousing Authority - HOME - Droge Mixed Use Project - 2012·
Recorded at the Request of
and When Recorded Return to:
City of Fresno
City Clerk
2600 Fresno Street, Room 2133
Fresno, CA 93721-3603
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(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONL Y)
This Agreement is recorded at the request and for the benefit of the City of Fresno and is
exempt from the payment of a recording fee pursuant to Government Code Section 6103.
By:---=__-=~=-=-.::....:-=---_
Mark Scott
It's: City Manager
Date:9'-~e:O -/?
CITY OF FRESNO
HOME INVESTMENT PARTNERSHIPS (HOME)AGREEMENT
by and between
CITY OF FRESNO,
a municipal corporation
and
Housing Authority of the City of Fresno
regarding
Droge Mixed-Use Residential and Retail Project
802 and 814 Van Ness Avenue, Fresno California 93721 (APN:468-252-05/06)
TABLE OF CONTENTS
ARTICLE 1.DEFINITIONS 2
ARTICLE 2.TERMS OF THE LOAN 7
ARTICLE 3.REPRESENTATIONS AND WARRANTIES OF DEVELOPER 8
ARTICLE 4.COVENANTS OF DEVELOPER 9
ARTICLE 5.PROPERTY MAINTENANCE 16
ARTICLE 6.DISBURSEMENT OF HOME FUNDS 19
ARTICLE 7.DEVELOPMENT AND CONSTRUCTION OF THE PROJECT .: 22
ARTICLE 8.PROJECT OPERATIONS 27
ARTICLE 9.INSURANCE AND INDEMNITY 31
ARTICLE 10.DEFAULT AND REMEDIES 33
ARTICLE 11.GENERAL PROVISIONS 35
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
This HOME Investment Partnerships Program Agr ernent (hereinafter referred to
as the "Agreement")is entered into this , 2012, by and
between the City of Fresno, a municipal corporation,ting through its Development
and Resource Management Department - Housing and Community Development
Division (hereinafter referred to as the "CITY"), and the Housing Authority of the City of
Fresno, a body corporate and politic (hereinafter referred to as "DEVELOPER").
RECITALS
A. The CITY has received a HOME Investment Partnerships Program (hereinafter
referred to as "HOME Program")grant funds from the U.S.Department of Housing and
Urban Development (hereinafter referred to as "HUD"), under Title II of the Cranston-
Gonzalez National Affordable Rental Housing Act of 1990, as amended (hereinafter
referred to as the "Act").
B. To advance the supply of Affordable rental housing within the City of Fresno, the
CITY desires, among other things, to encourage investment in the affordable rental
housing market.
C. The project will provide for the demolition of the Droge bulldinq and the adjacent D.
Yezdan building and redevelopment of the sites into a residential/retail project to include
45 residential units of which eleven (11) units will be designated as HOME-assisted
affordable rental housing units ("HOME assisted"),one (1)manager unit, and parking at
the Property identified in EXHIBIT "A" (the "Project"). .
D. The DEVELOPER desires to act as the owner/developer exercising effective project
control, as to the demolition and redevelopment of the Droge and D. Yezdan sites into a
forty-five (45) unit residential complex of which eleven (11) units will be HOME-assisted
units and shall be preserved as Very Low- and Low-Income rental housing, as defined
by the HOME Program, and related on-site and off-site improvements,hereinafter
referred to as the "Project", as more particularly described in the Project Description
attached hereto as EXHIBIT "B",incorporated herein.
E. The Project will be constructed upon HOME Program eligible Property owned/to be
owned by the DEVELOPER and located within the boundaries of the City of Fresno, as
more particularly described in the attached EXHIBIT "A".
F. To further its goal to increase the supply of Affordable Rental Housing within the
City of Fresno, the CITY desires to assist the DEVELOPER by providing a One Million
Eight Hundred Thousand dollars and 00/100 ($1,800,000.00)residual receipts HOME
Program Loan to the Project (hereinafter referred to as "Loan"), for a term of fifty-five
(55) years, for payment of the HOME Program eligible costs, as further identified in the
Project Budget,EXHIBIT "C",variously to be secured by the underlying real property
and the Affordable Rental Housing covenants,upon the terms and conditions in this
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Agreement.The simple interest will be at 2%annually.Principal and interest will be
payable from annual residual receipts at times prior to the Maturity Date and in full upon
the Maturity Date.
G ..An August 25, 2011,environmental review of the Project pursuant to the National
Environmental Policy Act ("NEPA")guidelines resulted in a Finding of No Significant
Impact.Additionally,June 6,2012,environmental review of the Project pursuant to the
California Environmental Quality Act ("CEQA")guidelines resulted in a Mitigated
Negative Declaration.
H. The CITY has determined that this Agreement is in the best interests of, and will
materially contribute to, the Housing Element of the General Plan. Further, the CITY
has found that the Project: (i) will have a positive influence in the neighborhood and
surrounding environs:(ii) is in the vital and best interests of the CITY, and the health,
safety, and welfare of CITY residents:(iii)complies with applicable federal,state, and
local laws and requirements:(iv) will increase,improve, and preserve the community's
supply of Low-Income Housing available at Affordable Rental Housing cost to Very Low-
and Low-Income households,as defined hereunder:(v)planning and administrative
expenses incurred in pursuit hereof are necessary for the production,improvement,or
preservation of Very Low- to Low-Income Housing, and (vi) will comply with any and all
owner participation rules and criteria applicable thereto.
I. The CITY and DEVELOPER have determined that the Project's HOME Assisted
Units constitute routine programmatic/grantee lender activities utilizing available and
allocated program/grantee funding,outside the reach of California Constitution Article
XXXIV and enabling legislation.
J. The parties acknowledge and agree that the obligations and liabilities of the
DEVELOPER hereunder shall be joint and several unless and except to any extent
expressly provided otherwise.
K. On August 8,2012,the Housing and Community Development Commission of the
City of Fresno reviewed this Agreement and recommended approval.
L.On August 1, 2012, the DEVELOPER's Board reviewed and approved the
development and authorized entry of a HOME Program Project agreement.
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 acknowledged,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.
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1.1 ADA means the Americans with Disabilities Act of 1990,as most recently
amended.
1.2 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 Units,as hereinafter defined.
1.3 Affordability Period means the minimum period of fifty-five (55)years
commencing from the date the City entered Project and tenant information into HUD's
Integrated Disbursement and Information System (IDIS).
1.4 Affordable Project Unit means the construction of forty-five (45)affordable
housing units and related on-site and off-site improvements,all as described in the
Project Description attached hereto and incorporated herein as EXHIBIT "B", to be
located upon the Affordable Project Property.Three (3)of the forty-five (45) units will be
rented as floating Very Low-Income housing and eight (8)of the forty-five (45)units will
be rented as floating Low-Income housing in accordance with the HOME Program
requirements..
1.5 Affordable Project Property means the portion of the Property on which
the Affordable Project Units will be located which is described on EXHIBIT "A".
1.6 Affordable Rental Housing means the forty-five (45) to fifty (50)rental
housing units to be constructed on the portion of the Affordable Project Property of which
eleven (11)floating units will be required to meet the affordability requirements of 24·
C.F.R.92.252.
1.7 Budgetmeans the pro-forma Project Budget attached hereto as EXHIBIT
"C",for the Project,as may be amended upon the approval of the CITY's Housing and
Community Development Division Manager,provided any increase in HOME Program'
Funds hereunder requires City Council Approval.
1.8'Certificate of Completion means that certificate issued,in the form
attached as EXHIBIT "E" to be issued to the DEVELOPER by the CITY evidencing
completion of the Project,a release of construction related covenants for the purposes
of the Agreement.
1.9 CFR means the Code of Federal Regulations.
1.10 Commencement of Construction means the date that the DEVELOPER or
DEVELOPER's construction contractor begins substantial physical work on the
Property,including,without limitation,delivery of materials and any work,beyond
maintenance of the Property in its status quo condition,and not later than sixty (60)
calendar days follOWing the CITY's approval of commencement of construction.
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1.11 Completion Date means the date that the CITY issues a recorded
Certificate of Completion for the Project. The Completion of the Project is identified in
EXHIBIT "B".
1.12 Debt Service means payments made in a calendar year pursuant to the
financing obtained for the acquisition,construction,operation and/or ownership of the
Project, but excluding payments made pursuant to the Note.
1.13.Declaration of Restrictions means the Declaration of Restrictions, as
outlined substantially in the form attached hereto as EXHIBIT "H", which shall be
recorded against the Property no later than the date of disbursement of Loan funds,
setting out the requirements of this Agreement which shall run with the land.
1.14 Deed of Trust means that standard,subordinate no worse than third (3rd)
position including assignment of rents and security agreement given by the
DEVELOPER,as Trustor, to the CITY as beneficiary, issued through an escrow
established by the DEVELOPER at its sole cost and expense, with a title company
acceptable to the 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 shall
be substantially the form attached hereto as EXHIBIT "G".
1.15 Eligible Costs means any and all HOME Program eligible Project costs of
HOME assisted units as may be reimbursed by the Loan,consistent With the "HOME"
column and the row entitled "Basic Construction Contract" of the Budget, attached as
EXHIBIT "C", allowable under 24 C.F.R..Part 92, as specified in 24 C.F.R. 92.205 and
92.206, Notice CPO 98-2 and not disallowed by 24 C.F.R. 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.
1.16 Event of Default shall have the meaning assigned to such term under
Section 10.1 hereunder.
1.17 Family has the same meaning given that term in 24 C.F.R. 5.403.
1.18 Federal HOME Investment Partnerships Funds (also referred to in this
Agreement as "HOME Funds" or "HOME Program Funds") means the federal HOME
Program monies consisting of the Loan, in an amount not to exceed the sum of One
Million Eight Hundred Thousand dollars and 00/100 ($1,800,000.00)to be used for
eligible Project costs.
1.19 Funding Sources means: (i) The CITY's HOME Funds;(ii)the Low Income
Housing Tax Credits; (iii) Deferred DEVELOPER's fee referred in the Budget as
source(s)of funding for the Project, and any other financing sources that may become
available.
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1.20 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.
1.21 Household means one or more persons occupying a Unit in the proposed
Project.
1.22 HUD means the United States Department of Housing and Urban
Development.
1.23 Loan means the non-assumable,loan of HOME Funds, in an amount not
to exceed the lesser of the sum of One Million Eight Hundred Thousand dollars and
00/100 ($1,800,000.00)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 made
available by the CITY to the DEVELOPER for the Affordable Project Units pursuant to
this Agreement, as more specifically described in the Budget attached hereto as
EXHIBIT "C", and in the Note attached hereto as EXHIBIT "F".
1.24 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.
1.25 Low-Income for the purposes of this Agreement means those whose
annual income does not exceed percent (60%) of the median income for the Fresno
County area as determined by HUD,except as HUD may establish income ceilings
higher or lower than 60% of the median for the area on the basis of HUD findings that
such variations are necessary.
1.26 Note means the non-assumable,HOME Program Loan 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 the DEVELOPER as promissor, in favor of the CITY
as promissee,evidencing the Loan and performance of the affordability and other
covenants and restrictions set forth in this Agreement,secured by the 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 Affordable Project funding hereunder, an exemplar of
which 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.
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1.27 Operating Expenses means actual, reasonable and customary (for
comparable quality,construction of rental housing in Fresno County) costs, fees and
expenses directly incurred, paid, and attributable to the operation,maintenance and
management of the 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 the DEVELOPER,its successors or assigns, and other actual
operating costs and capital costs which are incurred and paid by the DEVELOPER, but
which are not paid from reserve accounts.
1.28 Program Income has the meaning provided in the HOME Program
included in 24 C.F.R. 92.503.
1.29 Project Schedule means the schedule for commencement and completion
of the Project included within the Project Description and Schedule, EXHIBIT "B".
1.30 Project Units means the forty-five (45) residential housing units
constructed on the property of which eleven (11) units will be preserved as Affordable
HOME-assisted Units ..
1.31 Property means the parcel located at 802 Van Ness Avenue, Fresno,
California, 93721, (APN:468-252-05),and the parcel located at 814 Van Ness Avenue,
Fresno, California, 93721, (APN:468-252-06),more specifically described in the
attached EXHIBIT "A", including an existing poured in place concrete building.
1.32 Rent means the total monthly payment a tenant pays for an Affordable
Unit including the following: use and occupancy of the Unit and land and associated
facilities, including parking, provided by the DEVELOPER(other than parking services
acquired by tenants on an optional basis), any separately charged fees or service
charges assessed by the DEVELOPER which are required of all tenants (other than
security deposits),the cost of an adequate level of service for utilities paid by the tenant
(including garbage collection, sewer, water, common area electricity, but not telephone
service), any other interest, taxes, fees or charges for use of the land or associated
facilities and assessed by a public or private entity other than the DEVELOPER, and
paid by the tenant. Rent does not include payments for any optional services provided
by the DEVELOPER.
1.33 Residual Receipts means Residual Receipts as defined in EXHIBIT "F".
1.34 Senior Financing means the financing for the Project set forth on the
BUdgetand Finance Plan which shall be senior to the Loan.
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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 Project.
1.37 Very Low-Income For the purposes of this Agreement means those whose
annual income does not exceed fifty-percent (50%) of the median income for the
Fresno, California area as determined by HUD, except as HUD may establish income
ceilings higher or lower than 50% of the median income for the area on the basis of
HUD findings that such variations are necessary.
ARTICLE 2. TERMS OF THE LOAN
2.1 Loan of HOME Funds. The CITY agrees to provide a Loan of HOME
Funds to the DEVELOPER in an amount not to exceed One Million Eight Hundred
Thousand dollars and 00/100 ($1,800,000.00)under the terms and conditions provided
in this Agreement. The HOME Funds shall only be used for payment of HOME Eligible
Costs.
2.2 Loan Documents. The DEVELOPER shall execute and deliver to the
Note to the CITY and the Deed of Trust to the Title Company for recordation against the
Property, as provided for in this Agreement.
2.3 Term of Agreement. This Agreement is effective upon the date of
execution and shall remain in force with respect to the Project forthe duration of the
Affordability Period unless earlier terminated as provided herein, After the fifty-five (55)
year Affordability Period, this Agreement will expire. It is understood and agreed upon,
however, that if for any reason this Agreement should be terminated in whole or in part
as provided hereunder, without default, by the DEVELOPER prior to disbursement of
HOME Program funding hereunder, the CITY agrees to record a Notice of Cancellation
regarding this Agreement, upon the written request of the DEVELOPER.
2.4 Loan Repayment and Maturity. The Loan will be due and payable in
accordance with the Note and not later than the maturity date provided in the Note.
. 2.5 Incorporation of Documents. The Loan Documents, the Act and HUD
regulations at 24 CFR Part 85,92, CPD 98-2 and all exhibits, attachments, documents
and instruments referenced herein, as now in effect and as may be amended from time
to time, constitute part of this Agreement and are incorporated herein by reference. All
such documents have been provided to the parties herewith or have been otherwise
provided to/procured by the parties and reviewed by each of them prior to execution
hereof..
2.6 Covenants of DEVELOPER. The' DEVELOPER for itself and its
agents/assigns covenants and agrees to comply with all the terms and conditions of this
Agreement and the requirements of 24 C.F.R. Part 92 that are applicable to the project,
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2.7 Subordination.This Agreement and the Deed of Trust may be
subordinated to certain approved financing (in each case, a "Senior Lender"), to no
worse than 3
rd 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 construction or permanent financing for the Project
consistent with an approved financing plan; (b)DEVELOPER must demonstrate to the
CITY's reasonable satisfaction that subordination of Deed of Trust is necessary to
secure adequate construction or permanent financing to ensure the viability of the
Project; (c) the subordination agreement must provide the CITY with adequate rights to
cure any defaults by the DEVELOPER including providing the CITY or its successor
with copies of any notices of default; (d) upon a determination by the City Manager that
the conditions in this Section have been satisfied, the City Manager or his/her designee
will be authorized to execute the approved subordination agreement,inter-creditor
agreements,standslill agreements,and/or other documents as may be reasonably
requested by the Lender to evidence subordination to the Project financing, without the
necessity of any further action or approval 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 financing policies, and further
provided that the City Attorney approves such document(s)as to form.,
ARTICLE 3.REPRESENTATIONS AND WARRANTIES OF DEVELOPER
3.1 Existence and Qualification.The DEVELOPER represents and warrants
to the CITY as of the date hereof, that the DEVELOPER is a duly organized California
public agency in good standing with the State of California; the DEVELOPER 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,
delivery,performance,and observance of its obligations under this Agreement.This
Agreement,when executed and delivered by the DEVELOPER and the CITY, shall
constitute the legal, valid, and binding obligations of the DEVELOPER enforceable
against the DEVELOPER in accordance with its respective terms,except as such
enforceability may be limited by (a) bankruptcy, insolvency,fraudulent conveyance,
reorganization,moratorium,or other similar laws of general applicability affecting the
enforcement of creditors' rights generally, and (b) the application of general principles of
equity without the joinder of any other party.
3.2 No Litigation Material to Financial Condition.The DEVELOPER
represents and warrants as of the date hereof that,except as disclosed to and approved
by the CITY in writing, no litigation or administrative proceeding before any court or
governmental body or agency is now pending, nor, to the best of the DEVELOPER's
knowledge, is any such litigation or proceeding now threatened,or anticipated against
the DEVELOPER that, if adversely determined,would have a material adverse effect on
the financial condition, business, or assets of the DEVELOPER or on the operation of
the Project.
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3.3 No Conflict of Interest. The DEVELOPER represents and warrants to the
CITY as of the date hereof that no official, officer, agent, or employee of the CITY
directly or indirectly owns or controls any interest in the DEVELOPER, and no person,
directly or indirectly owning or controlling any interest in the DEVELOPER, is an official,
officer, agent, or employee of the CITY.
3.4 No Legal Bar. The DEVELOPER represents and warrants to the CITY as
of the date hereof that the execution,delivery, performance, or observance by the
DEVELOPER of this Agreement will not, to the best of the DEVELOPER's knowledge,
materially violate or contravene any provisions of: (a) any existing law or regulation, or
any order of decree of any court,governmental authority, bureau, or agency applicable
to the DEVELOPER;(b) governing documents and instruments of the DEVELOPER;or
(c) any mortgage, indenture, security agreement, contract, undertaking, or other
agreement or instrument to which the DEVELOPER is a party or that is binding on any
of its properties or assets, the result of which would materially or substantially impair the
DEVELOPER's ability to perform and discharge its obligations or its ability to complete
the Project under this Agreement.
3.5 Assurance of Governmental Approvals and Licenses. The DEVELOPER
represents and warrants, as of the date hereof, that the DEVELOPER has obtained
and,to the best of the DEVELOPER's knowledge, is in compliance with all federal,
state, local governmental reviews, consents,authorizations,approvals, and licenses
presently required by law to be obtained by the DEVELOPER for the Project as of the
date hereof.
ARTICLE 4.COVENANTS OF THE DEVELOPER
The DEVELOPER,for itself and its development team, represents and warrants that:
4.1 Accessibility.The DEVELOPER covenants and agrees with the CITY 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),
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 (U.F.A.S.) or a standard that is equivalent or stricker. These mandates can
be found al24 C.F.R. 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:
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(i) Provide at least one accessible building entrance on an
accessible route.
(ii)Construct accessible and usable public and common use areas.
(iii) Construct all doors to be accessible and usable by persons in
wheelchairs.
(iv) Provide an accessible route into and through the covered
dwelling unit.
(v) Provide light switches, electrical outlets, thermostats and other
environmental controls in accessible locations.
(vi)Construct reinforced bathroom walls for later installation of grab
bars around toilets, tubs, shower stalls and shower seats, where
such facilities are provided.
(vii) Provide usable kitchens and bathrooms such that an individual
who uses a wheelchair can maneuver about the space.
C. Title III of the Americans with Disability Act of 1990 (ADA) as it relates
to the required accessibility of public and common use area of the Project.
D. The design and construction requirements as required by the CITY's
Universal Design Ordinance pursuant to FMC 11-110, including, but not limited to the
following requirements:
i. No step accessible entryway;
ii. All interior doorways and passageways at least 32
inches wide;
iii. One downstairs "flex room" and accessible bathroom
with reinforcements for grab bars;
iv. Six square feet of accessible kitchen counter space;
and
v. Hallways at least 42 inches wide.
4.2 Affirmative Marketing. The DEVELOPER warrants, covenants and agrees
that it shall comply with all affirmative marketing requirements, including without
limitation, those set out at24 C.F.R. 92.350, 24 C.F.R. 92.351, in order to provide
information and otherwise attract eligible persons from all racial, ethnic and gender
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groups in the housing market. The DEVELOPER shall be responsible for complying
.with the CITY's "Affirmative Marketing Policy"document,as amended from time to time.
The DEVELOPER shall maintain records of actions taken to affirmatively market units,
and to assess the results of these actions.
4.3 Availabilitv of HOME Funds. The DEVELOPER understands and agrees
that the availability of HOME Funds is subject to the control of HUD, or other federal
agencies, and should the HOME Funds be encumbered,withdrawn or otherwise made
unavailable to the CITY,weather earned by or promised to the DEVELOPER,and/or
should the 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 to the Project.
4.4 Compliance with Agreement.The DEVELOPER warrants,covenants and
agrees that, in accordance with the requirements of 24 CFR 92.252 and 24 CFR Part
85, upon any uncured default by the DEVELOPER within the meaning of Article 10 of
this Agreement, the CITY may suspend or terminate this Agreement and all other
agreements with the DEVELOPER without waiver or limitation of rights/remedies
otherwise available to the CITY.
4.5 Conflict of Interest. The DEVELOPER warrants,covenants and agrees
that it shall comply with the Conflict of Interest requirements of 24 C.F.R. 92.356
including,without limitation, that no officer, employee,agent or consultant of the
DEVELOPER (other than an employee or agent of the DEVELOPER)who occupies a
Unit as the property manager or maintenance worker) may occupy an Affordable Project
Unit. The DEVELOPER understands and acknowledges that no employee, agent;
consultant, officer or elected official or appointed official of the CITY, who exercises or
has exercised any functions or responsibilities with respect to the Affordable Project, or
who is in a position to participate in a decision making process or gain inside
information with regard to these activities, may obtain a financial interest or benefit from
the Affordable 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 C.F.R. 92.356(f), no owner,developer or
sponsor of the Affordable Project, or officer, employee, agent or consultant thereof, may
occupy an Affordable Project Unit.
4.6 Construction Standards. The DEVELOPER shall construct the proposed
Project Units assisted under this Agreement in compliance with all applicable local
codes,ordinances and zoning requirements in effect at the time of issuance of CITY
building permits.
4.7 Covenants and Restrictions to Run with the Land. The CITY and the
DEVELOPER expressly warrant,covenant and agree to ensure that the covenants and
restrictions set forth in this Agreement are recorded and will run with the land, provided,
however, that, on expiration of this Agreement such covenants and restrictions shall
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expire.,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 financing policies, and further provided that City Attorney approves such
document(s)as to form.
A. The CITY and the DEVELOPER hereby declare their
understanding and intent that the covenants and restrictions set forth herein directly
...benefit the land; (a) by enhancing and increasing the enjoyment and ownership of the
proposed Project by certain Very Low- and Low-Income households, and (b) by making
possible the obtaining of advantageous financing for construction.
B. The DEVELOPER covenants and agrees that after issuance of a
recorded Certification of Completion for the Project until the expiration of the
Affordability Period it shall cause three (3) of the Units to be rented as Affordable
Housing for Very Low-Income households and Eight (8) of the Units to be rented as
Affordable Housing for Low-Income households..
C.Without waiver or limitation,the CITY shall be entitled to injunctive
or other equitable relief against any violation or attempted violation of any covenants
and restrictions, and shall, in addition, be entitled to damages available under law or
contract for any injuries or losses resulting from any violations thereof.
D. All present and future owners of the Property and other persons
claiming by, through, or under them shall be subject to and shall comply with the
covenants and restrictions. The acceptance of a deed of conveyance to the Property
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
Property, all as though such covenants and restrictions were recited and stipulated at
length in each and every deed,conveyance,mortgage or lease thereof.
E. The failure or delay at any time of the CITY or any other person
entitled to enforce any such covenants or restrictions shall in no event be deemed a
waiver of the same, or of the right to enforce the same at any time or from time to time
thereafter, or an estoppel against the enforcement thereof.
4.8 Displacement of Persons. The DEVELOPER covenants and agrees with
the CITY that pursuant to 24 C.F.R. 92.353, it will take all reasonable steps to minimize
the displacement of any persons (families,individuals,businesses,nonprofit
organizations and farms). The parties acknowledge and agree that the Property is not
occupied with tenants.
4.9 Initial and Annual Income Certification.The DEVELOPER covenants and
agrees with the CITY that it shall comply with the procedures for annual income
determinations at 24 C.F.R. 92.203 for the eleven (11)Affordable Units. The
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DEVELOPER shall obtain, complete and maintain on file,immediately prior to initial
occupancy, and annually thereafter, income certifications from each tenant Household
renting any HOME-assisted Unit. The DEVELOPER shall make a good faith effort to
verify that the income provided by an applicant or occupying Household in an income
certification is accurate by taking one or more of the following steps as part of the
verification process: (1) obtain a pay stub for the most recent pay period; (2) obtain an
income verification form from the applicant's current employer; (3) obtain an income
verification form from the Social Security Administration and California Department of
Social Services if the applicant receives assistance from either of such agencies; or (4)
if the applicant is unemployed,obtain another form of independent verification.Copies
of household income certification and verification must be available for review by the
CITY. The DEVELOPER further warrants,covenants and agrees that it shall cooperate
with the CITY in the CITY's income certification/affordability monitoring activities.
4.10 Lead-Based Paint. The DEVELOPER covenants and agrees with the
CITY that it shall comply with all applicable requirements of the Lead-Based Paint
Poisoning Prevention Act of 42 U.S.C. 4821 et seq., 24 CFR Part 35, including the HUD
1012 Rule, and 24 CFR 982.4010),and any amendments thereto, and EPA Section
402( c)(3) of the Toxic Substances Control Act 9TSCA) 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 Project. The DEVELOPER shall incorporate or
cause incorporation of this provision in all contracts and subcontracts for work
performed on the Project, which involve the application of paint. The DEVELOPER
shall be responsible for all disclosure,inspection,testing, evaluation, and control and
abatement activities.
4.11 Minority Outreach Activities.The DEVELOPER covenants and agrees
with the CITY that it shall comply with all federal laws and regulations described in
Subpart H of 24 CFR Part 92, including,without limitation, any requirement that the
DEVELOPER comply with the CITY's minority outreach program.
4.12 Other Laws and Regulations. The DEVELOPER covenants and agrees
with the CITY that, in addition to complying with the federal laws and regulations already
cited in this Agreement, the DEVELOPER has reviewed, and shall comply with and
require all its contractors and subcontractors on this Project comply with, all other
federal laws and regulations that apply to the HOME Program, including, without
limitation,requirements of 24 CFR 58.6 and the Flood Disaster Protection Act of 1973,
as amended (42 U.S.C.4001-4128)and the following:
A. The DEVELOPER does not intend to use any financing that is
secured by a mortgage insured by HUD in connection with the Project as part of its
demolition or construction of the Project.
B. The Project is not located in a tract identified by the Federal
Emergency Management Agency as having special flood requirements.
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C. The Project requirements, Subpart F of 24 CFR Part 92, as
applicable and in accordance with the type of Affordable Units assisted, including, but
not limited to, the limit on the HOME per-unit subsidy amount at 24 CFR 92.250.
D. The property standards at 24 CFR 92.251.
E.The Project "Labor"requirements, as applicable, of 24 CFR 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 CFR Part 5).
F. The provisions of Section 102 and 107 of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of
Labor Regulations (29 CFR Part 5), in regards to the construction and management of
the proposed Project.
G. The DEVELOPER and its contractors,subcontractors and service
providers for the Project, shall comply with all applicable local, state and federal
requirements concerning equal employment opportunity, including compliance with
Executive Order (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 CFR part 60, "Office of Federal Contract
Compliance Programs, Equal Employment Opportunity, Department of Labor."
H. The provisions of the Copeland "Anti-Kickback" Act (18 U.S.C.
874), as supplemented by Department of Labor regulations (29 CFR part 3,
"Contractors and Subcontractors on Public Building or Public Work Financed in Whole
or in Part by Loans or Grants from the United States").
I.The provisions of the Clean Air Act (42 U.S.C. 7401 et seq.) and
the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), as amended.
J.The provisions of the Byrd Anti-Lobbying Amendment (31 U.S.C.
1352).
K. The provision of E.O.s 12549 and 12689, "Debarment and
Suspension," as set forth at 24 CFR part 24.
L. The provisions of the Drug-Free Workplace Act of 1988 (42 U.S.C.
701), in accordance with the Act and with HUD's rules at 24 CFR part 24, subpart F.
M. Title 8 of the Civil Rights Act of 1968 PL. 90-284.
N. Executive Order 11063 on Equal Opportunity and Housing.
O. Section 3 of the Housing and Urban Development Act of 1968.
P. The Housing and Community Development Act of 1974.
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Q. Clean Water Requirements 33 U.S.C. 1251
R. Civil Rights Requirements,29 U.S.C.§623, 42 U.S.C.§2000, 42
U.S.C.§6102, 42 U.S.C.§12112, 42 U.S.C.§12132, 49 U.S.C.§5332, 29 CFR Part
1630,41 C.F.R. Parts 60et seq.
4.13 Faith Based Organizations.The DEVELOPER warrants,covenants and
agrees that it shall not engage in any prohibited activities described 24 CFR 92.257.
4.14 Reporting Reguirements.The DEVELOPER warrants,covenants and
agrees with the qTY that it shall submit performance reports to the CITY as detailed in
Section 7.18.Furthermore,the DEVELOPER agrees to provide, at the sole cost of the
DEVELOPER,annual audited Financial Statements for the Project expenses and
ongoing financial transactions which occur as a result of this Agreement as detailed in
Section 5.6. The DEVELOPER agrees to account for the expenditure of HOME Funds
using generally accepted accounting principles, which financial documentation shall be
made available to the CITY and HUD, upon their respective written requestts),
4.15 Housing Affordabilitv.The DEVELOPER covenants and agrees with the
CITY that eleven (11) of the Project Units will be affordable to Very Low- and Low-
Income households and other requirements of 24 CFR 92.252 during the Affordability
Period. Three (3) Units, 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 fifty percent (50%), and Eight (8) Units
shall, at a minimum, be rented to and occupied by or, if vacant available for rental and
occupancy (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 rent consistent with HOME Program
regulations, for the Affordability Period except upon foreclosure or other transfer in lieu
of foreclosure following default under a Deed of Trust. However, if at any time following
a 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 those whom such owner of
record has or had business ties, obtains an ownership interest in the Project or the
Property, the Affordability Period shall be revived according to its original terms. In the
event the DEVELOPER fails to comply with this Section or the Affordability Period is not
revived following transfer by foreclosure or transfer in lieu of foreclosure,the
DEVELOPER shall return to the CITY all HOME Funds disbursed to the DEVELOPER
by the CITY.
4.16 Terminated Project. The DEVELOPER understands and agrees that, if
the Project is terminated before the completion,either voluntary or otherwise,such
constitutes an ineligible activity and the CITY not be required to provide any further
HOME Program assistance funding to the Project Units.
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ARTICLE 5.PROPERTY MAINTENANCE
The DEVELOPER covenants and agrees, for the entire term of the Agreement,the
following:
5.1 Adequate Repair and Maintenance.After construction of the Project, the
DEVELOPER shall maintain the Project and Property in compliance with all applicable
codes, laws, and ordinances.
5.2 Affordable Rental Housing. The DEVELOPER covenants and agrees that
the Affordable Project shall constitute at least eleven (11) affordable rental housing units
preserved as floating Very Low- to Low-Income Rental Housing (as provided at 24
C.F.R. 92.252) during the entire Affordability Period. This covenant shall remain in
effect and run with and restrict the land during the entirety of the Affordability Period. In
the event that the DEVELOPER fails to comply with the time period in which the
Affordable Units constitute Affordable Housing, the CITY shall without waiver or
limitation be entitled to injunctive relief, as the DEVELOPER acknowledges that
damages are not an adequate remedy at law for such breach.
5.3 Compliance with Environmental Laws. The DEVELOPER shall cause the
Affordable Units to be in compliance with, and not to cause or permit the Project to be in
violation of, any Hazardous Materials law, rule, regulation, ordinance, or statute.
Although the CITY will utilize its employees and agents for regular inspection and
testing of the eligible Property, the DEVELOPER agrees that, if the CITY has
reasonable grounds to suspect any such violation, the DEVELOPER shall be entitled to
thirty (30) days' notice and opportunity to cure such violation. If the suspected violation
is not cured, the CITY shall have the right to retain an independent consultant to inspect
and test the Property for such violation. If a violation is discovered,the DEVELOPER
shall pay for the reasonable cost of the independent consultant.
Additionally,the DEVELOPER agrees:
A. That the CITY shall not be directly or indirectly responsible,
obligated or liable with the inspection, testing, removal or abatement of asbestos or
other hazardous or toxic chemicals, materials, substances, or wastes and that all cost,
expense and liability for such work shall be and remain solely with the DEVELOPER;
B. Not to transport to or from the proposed Property, or use, generate,
manufacture,produce, store, release,discharge,or dispose of on, under, or about the
Property, or surrounding real estate, or transport to or from the Property, or surrounding
real estate, any hazardous or toxic chemicals, materials, substance, or wastes or allow
any person or entity to do so except in such amounts and under such terms and
conditions permitted by applicable laws, rules, regulations, ordinances, and statutes;
C. To give prompt written notice to the CITY of the following:
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(i) 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
(ii) All claims made or threatened by any third party against the
DEVELOPER or such properties relating to any lossor injury resulting from any
hazardous or toxic chemicals, materials, substance, or waste; and
(iii) The DEVELOPER's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of such properties that would cause such
properties or underlying or surrounding real estate or part thereof to be subject to any
restrictions on the ownership, occupancy, transferability, or use of the property under
any environmental law, rule, regulation,ordinance or statute; and
D. To indemnify, defend, and hold the CITY harmless from any and all
claims, actions, causes of action, demand,judgments,damages, injuries,administrative
orders,consent agreements,orders, liabilities, penalties, costs,expenses (including
attorney's fees and expenses), and disputes of any kind whatsoever arising out of or
relating to the DEVELOPER or any other party's use of release of any hazardous or
toxic chemicals, materials, substance, or wastes on the Property regardless of cause or
origin, including any and all liability arising out of or relating to any investigation,site
monitoring, containment, cleanup, removal, restoration, or other remedial work of any
kind or nature.
5.4 Compliance with Laws. The DEVELOPER shall be responsible for and
promptly and faithfully comply with, conform to and obey all present and future federal,
state and local statutes, regulations, rules,ordinances and other legal requirements
applicable by reason of this Agreement or otherwise to the Project including without
limitation prevailing wage requirements. The DEVELOPER acknowledges that the use
of federal funds on the Project is subject to extensive federal regulation and covenants
and agrees that it shall comply with, conform to and obey (and take such steps as are
required of the DEVELOPER to enable the CITY to comply with, conform to and obey)
all federal statutes, regulations, rules and policies applicable to the Project.
5.5 Existence.Qualification.and Authoritv. The DEVELOPER shall provide to
the CITY any evidence required or requested by the CITY to demonstrate the continuing
existence,qualification,and authority of the DEVELOPER to execute this Agreement
and to perform the acts necessary to carry out the Project.
5.6 Financial Statements and Audits. The DEVELOPER (or its successor who
shall receive federal financial assistance),as a recipient offederal 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 federal funds are disbursed
hereunder,and 2) the end of fiscal year(s) in which this contract shall terminate, and
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otherwise upon the CITY's, written request during the term of this Agreement,
DEVELOPER, at its sole cost and expense shall submit to the CITY:
A.Audited annual financial statements of the DEVELOPER that are
current, signed, and prepared according to generally accepted accounting principles
consistently applied (except as otherwise disclosed therein).
B. Audited Financial Statements covering all the income and
expenses and financial transactions for the Affordable Project during the prior fiscal
year. .
5.7 Inspection and Audit of Books. Records and Documents.The
DEVELOPER shall be accountable to the CITY for HOME Funds disbursed for the
Affordable Units pursuant to this Agreement.Any duly authorized representative of the
CITY or HUD shall, at all reasonable times, have access to and the right to inspect,
copy, make excerpts or transcripts,audit, and examine all books of accounts, records,
files and other papers or property, and other documents of the DEVELOPER pertaining
to the Project and for up to six (6) years after the expiration or termination of this
Agreement.
A.The DEVELOPER will maintain books and records for the Project
using generally accepted accounting principles. The DEVELOPER 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.
B. The CITY may audit any conditions relating to this Agreement at
the CITY's expense, unless such audit shows a significant discrepancy in information
reported by the DEVELOPER in which case the DEVELOPER shall bear the cost of
such audit.The DEVELOPER 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. The DEVELOPER will cooperate fully with the CITY and HUD in
connection with any interim or final audit relating to the Programs and the Project that
may be performed relative to the performance of this Agreement.
5.8 Inspection of Property. Any duly authorized representative of the CITY 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.
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5.9 No Other Liens. The DEVELOPER shall not create or incur, or suffer to
be created or incurred,or to exist,any additional mortgage,pledge,encumbrance,lien,
charge,or other security interest of any kind on the eligible Property,other than those
related to construction or pre-development loans in relation to the Project consistent
with the attached BUdget without prior written consent of the CITY.
5.10 Nondiscrimination.The DEVELOPER shall comply with and cause any
and all contractors and subcontractors to comply with any and all federal,state, and
local laws with regard to illegal discrimination,and the DEVELOPER shall not illegally
discriminate against any persons on account of race,religion,sex,family status,
handicap,or place of national origin in its performance of this Agreement and the
completion of the Project.
5.11 Ownership.Except as required in pursuit hereof,the DEVELOPER shall
not sell,lease,transfer,assign or otherwise dispose of ("Transfer")all or any material
part of any interest it might hold in the Property or the Project without prior written
consent of the CITY,which consent shall not be unreasonably withheld or delayed.
"Transfer"shall exclude the leasing of any single Unit in the Project.
A. The DEVELOPER shall request CITY's written approval of the granting
of the security interests in the Property described in Section 5.9 above.
B.The DEVELOPER anticipates syndicating the low income housing tax
credits that will be generated by the Project,which syndication will require the transfer
of limited partnership interests.The CITY hereby approves the initial Transfer-of the
limited partner interest to affiliates of the investor,provided that in each instance the
CITY is given prior written notice.
5.12 Payment of Liabilities.The DEVELOPER shall pay and discharge in the
ordinary course of its business all material obligations and liabilities,the nonpayment of
which could have a material or adverse impact on its financial condition,business,or
assets or on the operation of the Project,except such obligations and liabilities that
have been disclosed to the CITY in writing and are being contested in good faith.
5.13 Report of Events of Default.The DEVELOPER shall promptly give written
notice to the CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 6.DISBURSEMENT OF HOME FUNDS
Without waiver of limitation,the parties agree as follows,regarding disbursement of
HOME Funds:
6.1 Loan Commitments and Financing Plan.The DEVELOPER shall submit
its most current Finance Plan for the 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
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its Development and Resource Management Department, Housing and Community
Development Division, will review the Finance Plan and deliver notice to the
DEVELOPER either approving or disapproving the Finance Plan in its reasonable
discretion.If the CITY disapproves the Finance Plan, it will specify the reason for the
disapproval and ask the DEVELOPER to provide any additional information the CITY
may need to approve the Finance Plan. The failure of the CITY to send notice within
such thirty (30) day time period shall be deemed an approval of the Finance Plan.
6.2 Finance Plan Content. The Finance Plan shall contain all Project pre-
construction and post-construction,permanent loan or letters of intent from one or more
qualified public/private lenders or funding sources, in sufficient amounts, combined with
any other developer financing, for the DEVELOPER to complete construction of the
Project. The total amount of the liens to be recorded against the Property as presented
in the Finance Plan shall not exceed the DEVELOPER's estimated construction Budget.
6.3 Use of HOME Funds. The DEVELOPER warrants, covenants and agrees
.that it shall request HOME Funds only for reimbursement of eligible costs incurred as
identified in the attached Budget, attached hereto as EXHIBIT "C", including costs
allowable under 24 C.F.R. 92.206, aggregating not more than One Million Eight
Hundred Thousand dollars and 00/100 ($1,800,000.00).The CITY's obligations shall in
no event exceed the HOME Funds amount specified in this Agreement.
A.If any such funds shall be determined to have been requested
.and/or used by the DEVELOPER for costs other than for eligible costs, and subject to
the notice and cure provisions of Section 10.2 hereunder, an equal amount from
nonpublic funds shall become immediately due and payable by the DEVELOPER to the
CITY; provided, however, that the DEVELOPER shall,subject to its'full cooperation with
the CITY, be entitled to participate in any opportunity to remedy, contest, or appeal such
determination.
B. In the event HOME Funds are requested to reimburse Eligible
Costs which subsequently lose eligibility as Eligible Costs, the DEVELOPER shall
immediately return such HOME Funds to the CITY.
C. The CITY will disburse HOME Funds, only to the DEVELOPER
through proper invoicing, for eligible costs of the Affordable Units as provided in this
Article 6.
6.4 Conditions Precedent to Disbursement. The CITY shall not be obligated
to make or authorize any disbursements of HOME Funds unless all the following
conditions are satisfied:
A. There exists no Event of Default as provided in Article 10, nor any
act, failure, omission or condition that with the giving of notice would constitute an Event
of Default.
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B. The DEVELOPER has submitted the Finance Plan to the CITY, and
if required, the CITY has approved the Finance Plan.
C.
Project costs.
The CITY has approved the requested reimbursement of eligible
D. The DEVELOPER has obtained insurance coverage and delivered
to the CITY evidence of insurance as required in Article 9.
E. The DEVELOPER is current with its compliance of all reporting
requirements set forth in this Agreement.
F. The DEVELOPER has provided the CITY with a written request for
Funds (in a CITY-approved Form), for reimbursement of eligible Project costs, and
detailing such Eligible Costs applicable to the request.
G. The CITY has received Certification required by Section 6.6 of this
Agreement.
H.
HOME Funds.
The CITY has received, and continues to have the right to disburse,
6.5 Request for and Disbursement of HOME Funds. The DEVELOPER shall
request disbursement of HOME Funds using the CITY's Request for Disbursement of
Funds form. The DEVELOPER shall only request a maximum of One Million Eight
Hundred Thousand dollars and 00/100 ($1,800,000.00)in HOME Program assistance
for the Affordable Units. All requests must provide in detail such Eligible Costs
applicable to the request. All requests for HOME Funds disbursement shall be
accompanied with the Certification required by Section 6.6 of this Agreement and
demonstrate they are in compliance with the requirements set forth in CPO 98-2 for
"floating" units.
6.6 DEVELOPER Certification. The DEVELOPER shall submit to the CITY a
written certification that, as of the date of the Request for Disbursement ("Certification"):
A. The representations and warranties contained in or incorporated by
reference in this Agreement continue to be true, complete and accurate in all material
respects;
B. The DEVELOPER has carried out all of its obligations and is in
compliance with all the material 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. The DEVELOPER has not committed or suffered an act, event,
occurrence, or circumstance that constitutes an Event of Default or that with giving of
notice would constitute an Event of Default; and
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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 Affordable Units.
6.7 Disbursement of Funds.Disbursements of HOME Program Loan
proceeds shall occur within the normal course of business (approximately thirty (30)
days)after the CITY receives the Certification and to the extent of annually allocated
and available HOME Funds.
ARTICLE 7.DEVELOPMENT AND CONSTRUCTION OF THE PROJECT
Without waiver of limitation, the parties agree as follows:
7.1 Pre-construction Meeting Regarding Program Processes and Procedures.
The CITY will schedule, and the DEVELOPER shall attend a meeting prior to
construction with the CITY for the purpose of outlining Project processes and
.procedures.
7.2 Commencement and Completion of Project.The DEVELOPER shall
commence construction and, record a Notice of Completion upon completion of
construction of the Project in accordance with the Project Schedule as identified in
EXHIBIT "B".
7.3 Contracts and Subcontracts.Consistent with Section 5.3, all demolition,
hazardous waste abatement,construction work and professional services for the Project
shall be performed by persons or entities licensed or otherwise legally authorized to
perform the applicable work or service in the State of California and the City of Fresno.'
The DEVELOPER shall provide the CITY with copies of all agreements it has entered
into with any and all general contractors for the Project. The DEVELOPER shall require
that each such general contractor agreement contain a provision whereby the party(ies)
to the agreement other than the DEVELOPER agree to: (i) notify the CITY immediately
of any event of default by the DEVELOPER thereunder; (ii) notify the CITY immediately
of the filing of a mechanic's lien, (iii) notify the CITY immediately of termination or
cancellation of the agreement; and (iv) provide the CITY, upon the CITY's request, an _
Estoppel Certificate certifying that the agreement is in full force and effect and the
DEVELOPER is not in default thereunder. The DEVELOPER agrees to notify the CITY
immediately of termination or cancellation of any such agreement(s),notice of filing of a
mechanic's lien, or breach or default by other party(ies)thereto.
7.4 Damage to Property. To the extent consistent with the requirements of
any permitted encumbrance,or as otherwise approved by the CITY, and subject to
Article 9 of this Agreement,if any building or improvement constructed on the Property
is damaged or destroyed by an insurable cause, the DEVELOPER shall, at its cost and
expense,diligently undertake to repair or restore said buildings and improvements
consistent with the original Plans and Specifications of the Project. Such work or repair
shall commence within ninety (90) days after the insurance proceeds are made
available to the DEVELOPER and shall be complete within two (2) years thereafter. All
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insurance proceeds collected for such damage or destruction shall be applied to the
cost of such repairs or restoration and, if such insurance proceeds shall be insufficient
for such purpose, the DEVELOPER shall make up the deficiency.
7.5 Fees, Taxes and Other Levies. The DEVELOPER shall be responsible for
payment of all fees, assessments, taxes,charges and levies imposed by any public
authority or utility company with respect to the Project Property, and shall pay such
charges prior to delinquency.However, the DEVELOPER shall not be required to pay
and discharge any such charge so long as: (a) the legality thereof is being contested
diligently and in good faith and by appropriate proceedings,and (b) if requested by the
CITY, the DEVELOPER deposits 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.The DEVELOPER
shall have the right to apply for and obtain an abatement and/or exemption of the
Project from real property taxes in accordance with all applicable rules and regulations,
including Section 214(g) of the California Revenue and Taxation Code.
7.6 Financing. The DEVELOPER shall promptly inform the CITY of any new
financing or funding not included in the Budget for the Project, and the DEVELOPER
shall provide the CITY copies of all agreements with any and all Funding Sources for
the Project. The DEVELOPER shall require each agreement with any and all Funding
Sources not included in the Budget to contain a provision whereby the party(ies) to the
agreer:nent other than the DEVELOPER, if permitted by the parties' applicable rules and
regulations, agree to notify the CITY immediately of any event of default by the
DEVELOPER thereunder. Should the DEVELOPER not comply with all obligations of
this section, the loan shall become immediately due and payable as provided for in this
Agreement. This section shall survive expiration or termination of this Agreement.
7.7 Identification Signage. Before the start of construction,the DEVELOPER
shall place a poster or sign, with a minimum four feet by four feet in size, identifying the
City of Fresno as a Project participant. The sign shall also include the CITY's Housing
Logo, as well as HUD's 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 remain in place throughout the Project construction.
7.8 Inspections.The DEVELOPER shall permit, facilitate, and require its
contractors and consultants to permit and facilitate observation and inspection at the job
site by the CITY and other public authorities during reasonable business hours, for
determining compliance with this Agreement,including without limitation biennial on-site
inspections required by the CITY by 24 C.F.R. 92.504(d).
7.9 Utilities. The DEVELOPER 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
Project.
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7.10 Insurance and Bonds. Upon the CITY's reasonable request, the
DEVELOPER shall submit for CITY approval, bonds, certificates, and/or applicable
endorsements for all insurance and bonds required by this Agreement in accordance
with Article 9.
7.11 Mechanic's Liens and Stop Notices. If any claim of lien is filed against the
Property or a stop notice affecting any financing, HOME Funds or Funding Sources for
the Project, is served on the CITY or any other third party in connection with the Project,
the DEVELOPER shall, within twenty (20) days of such filing or service,either pay and .
fully discharge the lien or stop notice, effect the release of such lien or stop notice by
delivering to the CITY a surety bond in sufficient form and amount, or provide the CITY
with other assurance satisfactory to the CITY that the claim of lien or stop notice will be
paid or discharged.
A.If the DEVELOPER fails to discharge, bond or otherwise satisfy
the CITY with respect to any lien,encumbrance,charge or claim referred to in this
Section 7.11, then, in addition to any other right or remedy, the CITY may, but shall not
be obligated to,discharge such lien,encumbrance,charge, or claim at the
DEVELOPER's expense.Alternatively,the CITY may require the DEVELOPER to
immediately deposit with the CITY the amount necessary to satisfy such lien or claim
and any costs, pending resolution thereof. The CITY may use such deposit to satisfy
any claim or lien that is adversely determined against the DEVELOPER.The
DEVELOPER hereby agrees to indemnify and hold the CITY harmless from liability for
such liens,encumbrances,charges or claims together with all related costs and
expenses.
7.12 Permits and Licenses. Upon CITY's reasonable request, the
DEVELOPER shall submit, for CITY approval, all the necessary permits and licenses
required for Commencement of construction of the Project. As the CITY may
reasonably request, the DEVELOPER,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 Project, and for its stated purposes in
accordance with all applicable building,environmental,ecological, landmark,
.subdivision, zoning codes, laws, and regulations.
7.13 Plans and Specifications.
A. The DEVELOPER has submitted to the CITY preliminary plans and
specifications for the Project under Conditional Use Permit file number
~==::::;:::==='("Project Preliminary Plans"). The DEVELOPER will construct the
Project in full conformance with the CITY-approved Conditional Use Permit and plans
and specifications and modifications thereto approved by the CITY. The DEVELOPER
shall obtain the CITY's prior written approval for any modifications to the plans and
specifications.
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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.
C. Before Commencement of Construction,the DEVELOPER shall
submit to the CITY, for its review and approval, the final Plans and Specifications for the
Project. The DEVELOPER will construct the Affordable Rental Housing in full
conformance with the Plans and Specifications and modifications thereto approved by
the CITY. The DEVELOPER shall obtain the CITY's prior written approval for any
modifications to the Plans and Specifications.
7.14 Project Responsibilities/Public Work-Prevailing Wage Reguirements. The
DEVELOPER shall be solely responsible for all aspects of the DEVELOPER's conduct
in connection with the Project, including but not limited to, compliance with all local,
state and federal laws including without limitation, as to prevailing wage and public
bidding requirements.The Council of the City of Fresno has adopted Resolution No.
82-297 ascertaining the general prevailing rate of per diem wages and per diem wages
for holidays and overtime in the Fresno area for each craft, classification or type of
workman needed in the execution of contracts for the CITY. A copy of the resolution is
on file at the Office of the City Clerk. Actual wage schedules are available upon request
at the City's Construction Management Office.Without limiting the foregoing, the
DEVELOPER shall be solely responsible for the quality and suitability ofthe work
completed and the supervision of all contracted work,qualifications and financial
conditions of and performance of all contracts,subcontractors,consultants and
suppliers. Any review or inspection undertaken by the CITY with reference to the
Project and/or payroll monitoring/auditing is solely for the purpose of determining
whether the DEVELOPER is properly discharging its obligation to the CITY, and shall
not be relied upon by the DEVELOPER or by any third parties as a warranty or
representation by the CITY as to governmental compliance and/or the quality of work
completed for the Project.
7.15 Propertv Condition. The DEVELOPER shall maintain the Property and all
improvements on site in a reasonably good condition and repair (and, as to
landscaping, in a healthy condition),all according to the basic design and related plans,
as amended from time to time. The DEVELOPER and those taking direction under the
DEVELOPER shall: (i) maintain all on-site improvements according to all other
applicable law, rules,governmental agencies and bodies having or claiming jurisdiction
and all their respective departments,bureaus, and officials; (ii) keep the improvements
free from graffiti; (iii) keep the 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 plans and/or landscaping (if any) with
comparable materials.
7.16 Qualitv of Work. The DEVELOPER shall ensure that construction of the
proposed Project employs building materials of a quality suitable for the requirements of
the Project. The DEVELOPER shall cause completion of the construction of the
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proposed Project in full conformance with applicable local, state and federal laws,
statutes,regulations,and building and housing codes.
7.17 Relocation.If and to the extent that construction of the proposed Project
results in the permanent or temporary displacement of residential tenants,homeowners
or businesses,the DEVELOPER shall comply with all applicable local, state, and
federal statutes and regulatory with respect to relocation planning,advisory assistance
and payment of monetary benefits. The DEVELOPER shall be solely responsible for
payment of any relocation benefit to any displaced persons and any other obligations
associated with complying with said relocation laws.
7.18 Reporting Requirements.The HOUSING AUTHORITY shall submit to the
CITY the following Project reports:
A. From the date of the execution of the Agreement,until issuance of
the recorded Certificate ofCompletion,the HOUSING AUTHORITY shall submit a
Quarterly Report,"in a form approved by the CITY, which will include the progress of
construction of the Project and affirmative marketing efforts (as applicable).The
Quarterly Reports are due within 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 Certificate of Completion,and continuing until the termination of
the Agreement,the DEVELOPER shall submit an Annual Report to the CITY, in a form
approved by the CITY. The Annual Report shall include, at a minimum, the following
information:the rents, the annual income and the family size of the Households,the
date tenancy commenced for each Affordable rental Unit, certification from an officer of
the DEVELOPER that the Units are in compliance with the Affordable Rental Unit
Requirements,and such other information the CITY may be required by law to obtain.
The DEVELOPER shall provide any additional information reasonably requested by the
CITY.
C. Annually,beginning on the first day of the month following the
CITY's issuance of the recorded Certificate of Completion for the Project, and
continuing until the expiration of the Agreement,the DEVELOPER shall submit proof of
insurance as required in Article 9.
7.19 Schedulinq and Extension of Time:Unavoidable Delay in Performance.It
shall be the responsibility of the DEVELOPER to coordinate and schedule the work to
be performed so that the Commencement of the Project and issuance of the Certificate
of Completion will take place in accordance with the provlslons of the Agreement and
Project Schedule.The time for performance contained in the Project Schedule shall be
automatically extended upon the following:
A. The time for performance of provisions of the Agreement by either
party shall be extended for a period equal to the period of any delay directly affecting
the Project or this Agreement which is caused by: war,insurrection,strike or other labor
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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 shall be granted only if written notice by the party claiming such extension is
sent to the other party within thirty (30)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 of the CITY's Housing and Community Development Division Manager and
the DEVELOPER and shall not cumulatively exceed one hundred eighty (180) days.
7.20 Certificate(sl of Completion.Upon completion of the construction of the
Project, the HOUSING AUTHORITY shall: 1)certify in writing to the CITY that the
Project has been constructed in accordance with the Final Plans and CUP; 2)submit to
the CITY a cost-certifying final budget for the Project where the DEVELOPER shall
identify the actual costs of construction of the Project; 3)submit to.the CITY a Certificate
of Occupancy for the Project; 4)submit to the CITY a recorded Notice of Completion for
the Project; and 5)submit to the CITY an Architect's certification in a form reasonably
acceptable by the CITY. Upon a determination by the CITY that the DEVELOPER is in
compliance with all of the DEVELOPER's construction obligations,as specified in this
Agreement,the CITY shall furnish,within thirty (30)calendar days of a written request
by the DEVELOPER,a recorded Certificate of Completion for the Project in the form
attached hereto as EXHIBIT "E". The CITY will not unreasonably withhold or delay
furnishing the recorded Certificate of Completion.If the CITY fails to provide the
recorded Certificate of Completion within the specified time, it shall provide the
DEVELOPER with a written statement indicating in what respects the DEVELOPER has
failed to complete the Project in conformance with this Agreement or has otherwise
failed to comply with the terms of this Agreement,and what measures the DEVELOPER
will need to take or what standards it will need to meet in order to obtain the recorded
Certificate of Completion.Upon the DEVELOPER taking the specified measures and
meeting the specified standards,the DEVELOPER will certify to the CITY in writing of
such compliance and the CITY shall deliver the recorded Certificate of Completion to
the DEVELOPER in accordance with the provisions of this section.
ARTICLE 8.PROJECT OPERATIONS
8.1 Operation of the Project. The DEVELOPER shall lease,operate and
manage the Project in full conformity with the terms of this Agreement.
8.2 Occupancy Requirements.Three (3)of the HOME Assisted Affordable
Units shall be rented and occupied by, or if vacant,available for rental occupancy by
those whose annual household income at the time of initial occupancy is not greater
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than fifty percent (50%) of the most recent annual median income, calculated and
published by HUD for the Fresno Metropolitan Statistical Area, applicable to such
household's size, and at an affordable rent consistent with HOME Program regulations
(as provided at 24 C.F.R. 92.252) for the term of this Agreement. Eight (8) of the HOME
Assisted Affordable Units shall be rented and occupied by, or if vacant,available for
rental occupancy by those whose annual household income at the time of initial
occupancy is not greater than sixty percent (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 rent consistent with HOME
Program regulations (as provided at 24 CFR 92.252) for the term of this Agreement.
The DEVELOPER shall comply with the income targeting requirements of 24 CFR
92.216.
8.3 Leasing the HOME Units. Before leasing any Affordable Units, the
DEVELOPER shall submit its proposed form of lease agreement for the CITY's review
and approval. The DEVELOPER covenants and agrees to utilize only leases that have
been approved in advance by the CITY. The CITY shall respond to the DEVELOPER's
submission of a sample lease agreement within thirty (30) days. Should the CITY not
respond within thirty (30) days of the lease agreement submittal, the DEVELOPER shall
be authorized to use the submitted sample lease agreement. Additionally, the
DEVELOPER agrees not to terminate the tenancy or to refuse to renew or lease with a
tenant of the Units assisted with HOME Funds except for serious or repeated violation
of the terms and conditions of the lease agreement, for violation of applicable federal,
state, or local law, or for other good cause. Any such termination or refusal to renew
must be preceded by not less than thirty (30) days' written notice served by the
DEVELOPER or its authorized management entity upon the tenant specifying the
grounds for such action. The DEVELOPER agrees it shall annually report to the CITY
the number of leases that were not renewed or terminated and the reason for such non-
renewal or termination.
8.4 Lease of HOME Units Provisions. In addition to the requirements of 24
C.F.R. 92.253, the leases are subject to the following:
A. The DEVELOPER shall include in its Leases for the HOME-
assisted Units,provisions which authorize the DEVELOPER to immediately terminate
the tenancy of any Household of which one or more of its members misrepresented any
fact material to the Household's qualification as a Very Low- or Low-Income Household.
Each such lease agreement 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 Low-Income, such Household's rent may be SUbject to increase to the lesser
of: 1) the amount payable by tenant under state or local law; or 2) thirty percent (30%)
of the Household's actual adjusted monthly income,except that,consonant with the
Act, tenants of HOME Funds-assisted units that have been allocated low income
housing tax credits by a housing credit agency pursuant to section 42 of the internal
Revenue Code of 1986 (26 U.S.C. 42) must pay rent governed by section 42.
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8.5 Final Management Plan. Before leasing and at least sixty (60)calendar
days prior to the construction Completion Date, the DEVELOPER shall submit to the
CITY, for review and approval, a plan for marketing and managing the proposed
Affordable Units ("Final Management Plan"). The Final Management Plan shall address
in detail how the DEVELOPER or its designated management entity plans to market the
availabitity of the Affordable Units to prospective tenants and how the DEVELOPER
plans to certify the eligibility of potential tenants. The Final Management Plan shall also
address how the DEVELOPER and/or the management entity plan to manage and
maintain the Affordable Units in accordance with HOME Program regulations at Section
92.251 Property Standards, 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;
• Criminal background checks;
•Deposit amounts, purpose, use and refund policy;
•Employment/Income verification;
•.Occupancy restrictions;
• Income Limits;
• 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 the DEVELOPER proposes to enter into with the Very Low-
and Low-Income tenants. The DEVELOPER shall abide by the terms of this Final
Management Plan, approved by the CITY, in marketing, managing and maintaining the
Affordable Units.
At least ninety (90)calendar days prior to the Project Completion Date, the
DEVELOPER shall also submit any proposed management contract to the CITY for
prior review. The CITY shall have the right to review any proposed amendments,other
than renewals to the management contract, and any new management contracts during
the term of this Agreement.Such management contract(s)shall contain a provision
expressing this right.
8.6 Property Management.The DEVELOPER shall comply with the following:
A.Management Responsibilities.The DEVELOPER directly and/or
through its designated management entity, is specifically responsible for all
management functions with respect to the Project including,without limitation, the
selection of tenants,certification and re-certification of Household size and income,
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evictions, collection of Rents and deposits,construction management,affirmative
marketing,maintenance,landscaping, routine and extraordinary repairs,replacement of
capital items and security. The CITY shall have no responsibility for such management
of the Project.
8.7 Maintenance and Security. The DEVELOPER shall (i) at its own expense
maintain the Project in good condition, in good repair and in decent, safe, sanitary,
habitable and tenantable living conditions for the benefit of the Unit occupants. The
DEVELOPER shall not commit or permit any waste on or to the Project, and shall
prevent and/or rectify any physical deterioration of the Project. The DEVELOPER shall
maintain the housing Units in conformance with all applicable federal, state and local
laws, ordinances, codes and regulations, the Final Management Plan, and this
Agreement.
8.8 Nondiscrimination.All of the HOME Assisted Units shall be available for
occupancy on a continuous basis to households who are income eligible. The
DEVELOPER shall not illegally discriminate or segregate in the constructed complex,
the use,enjoyment,occupancy or conveyance of any part of the Project or Property on
the basis of race, color, ancestry, national origin, religion, sex, marital status, family
status, source of income/rental assistance subsidy, physical or mental disability,
Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related conditions (ARC),
sexual orientation, or any other arbitrary basis. The DEVELOPER shall otherwise
comply with all applicable local, state and federal laws concerning nondiscrimination in
housing.Neither the DEVELOPER nor any person claiming under or through the
DEVELOPER,shall establish or permit any such practice or practices of illegal
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants or vendees of any Affordable Unit or in connection with
employment of persons for the construction of any Affordable Unit. All deeds or
contracts made or entered into by the DEVELOPER as to the Affordable Units or the
Project or portion thereof, shall contain covenants concerning nondiscrimination
consistent with this section. The DEVELOPER shall include a statement in all
advertisements,notices and signs for availability of Affordable Units for rent to the effect
that the DEVELOPER is an Equal Housing Opportunity Provider.
A. Nothing in this section is intended to require the DEVELOPER to
change the character, design, use or operation of the Project; or to require the
DEVELOPER to obtain licenses or permits other than those required for the Project.
8.9 Rent Schedule and Utility Allowances.The DEVELOPER covenants and
agrees not to charge rent to tenants for HOME Units in an amount which exceeds those
rents prescribed to the Project as they associate with particular income and rent
limitations levels as established annually by HUD,consistent with the HOME Program
requirements applicable to the Affordable Units in the Fresno, California area, as
established by HUD, and further covenants not to impose a monthly allowance for utility
services to tenants of such Affordable Units in excess of an amount approved by HUD
in accordance with 24 CFR 92.252. The DEVELOPER agrees to furnish to the CITY
with a certificate setting forth the maximum monthly rentals for the HOME Units and the
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monthly allowances for utilities and services to be charged during any annual period
until the expiration of the Affordability Period. The DEVELOPER shall reexamine the
income of each tenant Household living in the Affordable Units at least annually.
ARTICLE 9.INSURANCE AND INDEMNITY
Without waiver of limitation, the parties agree as follows regarding the DEVELOPER's
Insurance and Indemnity Obligations:
9.1 Indemnification.The DEVELOPER shall indemnify,hold harmless and
defend the CITY and each of its officers,officials,employees,agents and volunteers
from any and all loss, liability, fines,penalties,forfeitures,costs and damages (whether
in contract, tort or strict liability, including but not limited to personal injury, death at any
time and property damage)incurred by the CITY, the HOUSING AUTHORITY or any
other person, and from any and all claims,demands and actions in law or equity
(including attorney's fees and litigation expenses),arising or alleged to have arisen
directly or indirectly out of performance of this Agreement.The HOUSING
AUTHORITY's obligations under the preceding sentence shall apply regardless of
whether CITY or any of its officers, officials,employees,agents or authorized volunteers
are negligent,but shall not apply to any loss, liability, fines, penalties, forfeitures, costs
or damages caused solely by the gross negligence,or caused by the willful misconduct,
of CITY or any of its officers, officials,employees,agents or authorized volunteers.
A. If the DEVELOPER should contract all or any portion of the work to
be performed under this Agreement,the DEVELOPER shall require each contractor and
subcontractor to indemnify,hold harmless and defend the CITY and each of its officers,
officials,employees,agents and volunteers in accordance with the terms of the
'preceding paragraph.
B. This section shall survive termination or expiration of this
Agreement.
9.2 Insurance.Throughout the life of this Agreement,the DEVELOPER shall
itself and/or through its consultant(s),assignee(s),nominee(s),contractors and
subcontractors pay for and maintain in full force and effect all policy(ies)of insurance
required hereunder with (an)insurance company(ies)either (1) admitted by the
California Insurance Commissioner to do business in the State of California and rated
not less than "A-VII" in Best's Insurance Rating Guide, or (2)authorized by the CITY's
Risk Manager.The following policies of insurance are required:
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-
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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 two (2) years of the annual rent
generated by the improvements.Coverage for business income, including "rental
value", shall be at least as broad as the most current version of Insurance Service
Office (ISO)Commercial Property Form CP 00 30.
1. The above described policy(ies) of insurance shall be endorsed to
provide that the coverage shall not be cancelled,non-renewed,reduced in coverage or
in limits except after thirty (30)calendar day written notice has been given to CITY an
unrestricted thirty (30) day written notice in favor of the CITY, of policy cancellation,
change or reduction of coverage. Upon issuance by the insurer, broker, or agent of a
notice of cancellation,non-renewal,change or reduction in coverage, the DEVELOPER
or its contractors/subcontractors,as the case may be, shall furnish CITY with a new
certificate and applicable endorsements for such policy(ies). In the event the policy is
due to expire during the term of this Agreement,the DEVELOPER shall provide a new
certificate,and applicable endorsements,a new certificate evidencing renewal of such
policy shall be provided not less than fifteen (15) days prior to the expiration date of the
expiring policy. Upon issuance by the insurer, broker, or agent of a notice of
cancellation,change or reduction in coverage, the DEVELOPER or its
contractors/subcontractors,as the case may be, shall file with the CITY a certified copy
of the new or renewal policy and certificates for such policy.
2.The Builders Risk (Course of Construction)and Property Insurance
policies shall name the CITY as loss payee. The insurance required herein shall
contain no special limitations on the scope of protection afforded to the City.
3. If at any time during the life of this Agreement or any extension,the
DEVELOPER fails to maintain the required insurance in full force and effect, all work
under this Agreement shall be discontinued immediately, until notice is received by the
CITY that the required insurance has been restored to full force and effect and that the
premiums therefore have been paid for a period satisfactory to the CITY. Any failure to
maintain the required insurance, subject to notice and cure requirements herein, shall
be sufficient cause for the CITY to terminate this Agreement.
9.3 Bonds.DEVELOPER shall pay for and maintain good and sufficient
surety bonds from a corporate surety, admitted by the California Insurance
Commissioner to do business in the State of California and Treasury-listed,in a form
satisfactory to the CITY and naming the CITY as Co-Obligee.
A.The "Faithful Performance Bond" shall be at least equal to one
hundred percent (100%) of the DEVELOPER's estimated construction costs, as
reflected in the DEVELOPER'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.
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B. The "Material and Labor Bond" shall be at least equal to one
hundred percent (100%) of the DEVELOPER's estimated construction costs, as
reflected in the DEVELOPER's pro forma budget, attached hereto as EXHIBIT "C", to
satisfy claims of material supplies and of mechanics and laborers employed for this
Project. The bond shall be maintained by the DEVELOPER 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 the DEVELOPER an Irrevocable Standby Letter of Credit issued with the
CITY named as the sole beneficiary in the amount(s)of the bonds required above. The
Irrevocable Standby Letter of Credit is to be issued by a bank, and in a form,acceptable
to CITY. This Irrevocable Standby Letter of Credit shall be maintained by the
DEVELOPER in full force and effect until CITY is provided with a recorded Notice of
Completion for construction of the Project and shall be subject to and governed by the
laws of the State' of California."
ARTICLE 10.DEFAULT AND REMEDIES
10.1 Events of Default. Each of the following shall constitute an "Event of
Default"for purposes of this Agreement after the cure period in Section 10.2 has
expired without a cure:
A.DEVELOPER's use of HOME Funds, for costs other than Eligible
Costs or for uses not permitted by the terms of this Agreement;
B.DEVELOPER's failure to obtain and maintain the insurance
coverage as required under this Agreement;
C. Except as otherwise provided in this Agreement,the failure of the
DEVELOPER"to punctually and properly perform any other covenant or agreement
contained in this Agreement including without limitation the following:(1) the
DEVELOPER's substantial deviation in the construction of the Project from the Final
Plans/CUP,without the CITY's prior written consent;(2) the DEVELOPER's use of
defective or unauthorized materials or defective workmanship in pursuit of the Project;
(3) the DEVELOPER's failure to commence or complete the Project, unless delay is
permitted under Section 7.19 of this Agreement;(4) the cessation of work on the Project
for a period of more than fifteen (15)consecutive days (other than as provided at
Section 7.19 of this Agreement)prior to submitting to the CITY,pursuant to Section
7.20,certification that the Project is complete;(5) any material adverse change in the
financial condition of the DEVELOPER or the Project that gives the CITY reasonable
cause to believe that the Project cannot be completed by the Completion Date
according to the terms of this Agreement;(6) the DEVELOPER's failure to remedy any
deficiencies in record keeping or failure to provide records to the CITY upon the CITY's
request; (7) the DEVELOPER's failure to substantially comply with any federal, state or
local laws or applicable CITY restrictions governing the Project, including but not limited
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to provisions of this Agreement pertaining to equal employment opportunity,
nondiscrimination and lead-based paint;
D. Any representation,warranty, or certificate given or furnished by or
on behalf of the DEVELOPER shall prove to be materially false as of the date of which
the representation,warranty, or certification was given, or that the DEVELOPER
concealed or failed to disclose a material fact to the CITY, provided, however, that if any
representation,warranty, or certification that proves to be materially false is due merely
to the DEVELOPER's inadvertence,the DEVELOPER shall have a thirty (30) day
opportunity after written notice thereof to cause such representation,warranty, or
certification to be true and complete in every respect;
E. The DEVELOPER shall file, or have filed against it, a petition of
bankruptcy, insolvency, or similar law, state or federal, or shall file any petition or
answer seeking, consenting to, or acquiescing in any reorganization, arrangement,
composition,readjustment, liquidation, dissolution, or similar relief, and such petition
shall not have been vacated within ninety (90) 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 ninety (90) days;
F. The DEVELOPER's failure, inability or admission in writing of its
inability to pay its debts as they become due or the DEVELOPER's assignment for the
benefit of creditors;
G. A receiver, trustee, or liquidator shall be appointed for the
DEVELOPER or any substantial part of the DEVELOPER's assets or properties, and
not be removed within ten (10) days;
H.DEVELOPER's breach of any other material condition, covenant,
warranty, promise or representation contained in this Agreement not otherwise identified
within this Section;
I. Any substantial or continuous breach by the DEVELOPER of any
material obligation owed by the DEVELOPER imposed by any other agreement with
respect to the financing, of the Project,whether or not the CITY is a party to such
agreement after expiration of all notice and cure periods contained within such
document.
10.2 Notice of Default and Opportunity to Cure. The CITY shall give written
notice to the DEVELOPER of any Event of Default by specifying: 1) the nature of the
event or deficiency giving rise to the default; 2) the action required to cure the
deficiency,if any action to cure is possible; and 3) a date, which shall not be less than
the lesser of any time period provided in this Agreement, 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, the
DEVELOPER shall have an additional reasonable period to cure so long as it
commences cure within the specified time and thereafter diligently pursues the cure in
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good faith. The CITY acknowledges and agrees that the DEVELOPER shall have the
right to cure any defaults hereunder and that notice and cure rights hereunder shall
extend to any and all partners of the DEVELOPER that are prior identified in a writing
delivered to the CITY in the manner provided in this Agreement.
10.3 Remedies Upon an Event of Default. Upon the happening of an Event of
Default by the DEVELOPER and a failure to cure said Event of Default within the time
specified,the CITY's obligation to disburse any undisbursed 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.
DEVELOPER;
Terminate this Agreement immediately upon written notice to the
B. Bring an action in equitable relief (1)seeking specific performance
by the DEVELOPER of the terms and conditions of this Agreement,and/or (2)enjoining,
abating or preventing any violation of said terms and conditions,and/or (3) seeking
declaratory relief; and
C. Pursue any other remedy allowed by law or in equity or under this
Agreement.
ARTICLE 11.GENERAL PROVISIONS .
Without waiver of limitation, the parties agree that the following general provisions shall
apply in the performance hereof:
11.1 Amendments.No modification or amendment of any provision of this
Agreement shall be effective unless made in writing and signed by the parties hereto.
The CITY recognizes that other Project funders and equity investors may require
revisions to the Loan Documents to be consistent with their funding and investing
requirements.The CITY agrees to reasonably consider and negotiate as to any
reasonable amendments to this Agreement to address such requirements,subject to
any necessary City Council approval and approval as to form by the City Attorney.
11.2 Attorney's Fees. If either party is required to commence any proceeding
or legal action to enforce or interpret any term,covenant or condition of this Agreement,
the prevailing party will be entitled to recover from the other party its reasonable
attorney's fees and legal expenses.
11.3 Binding on All Successors and Assigns. Unless otherwise expressly
provided in this Agreement,all the terms and provisions of this Agreement shall be
binding on and inure to the benefit of the parties hereto, and their respective nominees,
heirs,successors,assigns, and legal representatives.
Page 35 of39
I droge -home_agreement cae rev28-24-12.docx
11.4 Counterparts.This Agreement may be executed in counterparts,each of
which when executed and delivered will be deemed an original, and all of which
together will constitute one instrument. The execution of this Agreement by any party
hereto will not become effective until counterparts hereof have been executed by all
parties hereto.
11.5 Disclaimer of Relationship.Nothing contained in this Agreement,nor any
act of the CITY or of the DEVELOPER,or of any other person, shall in and by itself be
deemed or construed by any person to create any relationship of third party beneficiary,
or of principal and agent, of limited or general partnership, or of joint venture.
11.6 Discretionarv Governmental Actions. Certain planning, land use, zoning
and other permits and public actions required in connection with the Project inclUding,
without limitation, the approval of this Agreement,the environmental review and
analysis under NEPA, CEQA or any other statute, and other transactions contemplated
by this Agreement are discretionary government actions. Nothing in this Agreement
obligates the CITY or any other governmental entity to grant final approval of any matter
described herein. Such actions are legislative,quasi-judicial,or otherwise discretionary
in nature. The CITY cannot take action with respect to such matters before completing
the environmental assessment of the Project under NEPA, CEQA and any other
applicable statutes. The CITY cannot and does not commit in advance that it will give
final approval to any matter. The CITY shall not be liable, in contract, law or equity, to
the DEVELOPER or any of its executors,administrators,transferees,successors-in-
interest or assigns for any failure of any governmental entity to grant approval on any
matter subject to discretionary approval.
11.7 Effective Date. This Agreement shall be effective upon the Parties'
complete execution following City Council approval.
11.8 Entire Agreement.This Agreement represents the entire and integrated
agreement of the parties with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations,representations or agreements,either written or oral.
11.9 Exhibits. Each exhibit and attachment referenced in this Agreement is, by
the reference,incorporated into and made a part of this Agreement.
11.10 Expenses Incurred Upon Event of Default. The DEVELOPER shall
reimburse the CITY for all reasonable expenses and costs of collection and
enforcement,including reasonable attorney's fees, incurred by the CITY as a result of
one or more Events of Default by the DEVELOPER under this Agreement.
11.11 Governing Law and Venue. Except to the extent preempted by applicable
federal law, the laws of the State of California shall govern all aspects of this
Agreement,including execution,interpretation,performance, and enforcement.Venue
for filing any action to enforce or interpret this Agreement will be Fresno, California.
Page 36 of 39
I droge-home_agreement caorev2 8-24-12.docx
11.12 Headings. The headings of the articles, sections, and paragraphs used in
this Agreement are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
11.13 Interpretation.This Agreement in its final form is the result of the
combined efforts of the parties. Any ambiguity will not be construed in favor or against
any party, but rather by construing the terms in accordance with their generally
accepted meaning.
11.14 No Assignment or Succession.The DEVELOPER shall not sell, lease,
transfer, assign or otherwise dispose of all or any material part of any interest it might
hold in the Property without the prior written consent of the CITY, which consent shall
not be unreasonably withheld or delayed.Notwithstanding the foregoing, upon prior
written notice to the CITY, the DEVELOPER shall be permitted to assign its rights and
obligations under this Agreement with respect to the Project to the Partnership without
the CITY's consent.
11.15 No Third-Party Beneficiary. No contractor,subcontractor,mechanic,
materialman, laborer, vendor, or other person hired or retained by the DEVELOPER
shall be, nor shall any of them be deemed to be,third-party beneficiaries of this
Agreement,but each such person shall be deemed to have agreed (a) that they shall
look to the DEVELOPER as their sole source of recovery if not paid, and (b)except as
otherwise agreed to by the CITY and any such person in writing, they may not enter any
claim or bring any such action against the CITY under any circumstances.Except as
provided by law, or as otherwise agreed to in writing between the CITY and such
person, each such person shall be deemed to have waived in writing all right to seek
redress from the CITY under any circumstances whatsoever.
11.16 No Waiver.Neither failure nor delay on the part of the CITY in exercising
any right under this Agreement shall operate as a waiver of such right, nor shall any
single or partial exercise of any such right preclude any further exercise thereof or the
exercise of any other right. No waiver of any provision of this Agreement or consent to
any departure by the DEVELOPER therefrom shall be effective unless the same shall
be in writing, signed on behalf of the CITY by a duly authorized officer thereof, and the
same shall be effective only in the specific instance for which it is given. No notice to or
demand on the DEVELOPER in any case shall entitle the DEVELOPER to any other or
further notices or demands in similar or other circumstances,or constitute a waiver of
any of the CITY's right to take other or further action in any circumstances without notice
or demand.
11.17 Nonreliance. The DEVELOPER hereby acknowledges having obtained
such independent legal or other advice as it has deemed necessary and declares that in
no manner has it relied on the CITY, it agents,employees or attorneys in entering into
this Agreement.
11.18 Notice. Any notice to be given to either party under the terms of this
Agreement shall be given by certified United States mail, postage prepaid, return receipt
Page 37 of 39
droge·home_agreement cae rev28·24-12.docx
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
Downtown and Community Revitalization Department
Housing and Community Development Division
Attention: Manager
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
If to DEVELOPER:DEVELOPER of the City of Fresno
Attention: Executive Director
1331 Fulton Mall
Fresno, CA 93721
11.19 Precedence of Documents. In the event of any conflict between the body
of this Agreement and any exhibit or attachment hereto or document incorporated
herein, the terms and conditions of the body of this Agreement will control.
11.20 Recording of Documents. The DEVELOPER agrees to cooperate with the
CITY and execute any documents required,promptly upon the CITY's request, the
Deed of Trust, and any other documentslinstruments that the CITY requires to be
recorded, in the Official Records of Fresno County, California,consistent with this
Agreement.
11.21 Remedies Cumulative. All powers and remedies given by this Agreement
shall be cumulative and in addition to those otherwise provided by law.
11.22 Severability. The invalidity, illegality, or un-enforceability of anyone or
more of the provisions of this Agreement shall not affect the validity, legality, or
enforceability of the remaining provisions hereof or thereof.
III
III
III
Page 38 of 39
I droge-home_agreement caorev2 8-24-12.docx
IN WITNESS WHEREOF,the parties have executed this Agreement in Fresno,
California, the day and year first above written.
CITY OF FRESNO,a Municipal Corporation
BY:~~
Mark Scott, City Manager
(Attach notary certificate of acknowledgment)
Date:?r --~{)-/2-
ATTEST:
YVONNE SPENCE,CMC
City Clerk
APPROVED AS TO FORM:
JAMES SANCHEZ
City Attorney
~:.-::::::==;:p===--
By:~
)t ,(b"'<f'"s Deputy City Attorney
Date:BOd /UI"2-'
By:-,-,.'-+-"--"--=-----:!-_.",.-,---=:-_--,-----=-,---_
Pr ston Prince,CEO/Executive Director
(Attach notary certificate of acknowledgment)
HOUSING AUTHORITY OF THE CITY OF FRESNO, CA
a bod rp rate and politic-:
Date:_---''--f-"=-i'-'-__
Attachments:
EXHIBIT A:
EXHIBIT B:
EXHIBIT C:
EXHIBIT D:
EXHIBIT E:
EXHIBIT F:
EXHIBIT G:
EXHIBIT H:
PROPERTY DESCRIPTION
PROJECT DESCRIPTION AND SCHEDULE
BUDGET
55-YEAR CASH FLOW STATEMENT
CERTIFICATE OF COMPLETION
PROMISSORY NOTE
DEED OF TRUST
DECLARATION OF RESTRICTIONS
Page 39 of 39
I droge -home_agreement caD rev2 8-24-12.docx
CALIFORNIA ALL-PURPOSE
CERTIFICATE OF ACKNOWLEDGMENT
State of California
Countyof ~~V45uN~O=-__
eM IY\"L(Here~nse~~:f~d title1leb aU"G
({\k(/L .scotf
before me,-...J;..dL.lLJ~=---l.,,;;;-...L.,~~~-r:-7:-'U.?p:::I.g..:~-J-.!,~==-----On -----'-..i£::'1-'-=------
personally appeared ----1-J---'-''--'---''='-----'J-'''''''-I--'---------------------
who proved to me on the basis of satisfactory evidence to be the personts)whose namekS)is/ars-subscribed to
the within instrument and acknowledged to me that he/!ilfelt,hey executed the same in his/I;IeT/thetr authorized
capacitytijs),and that by his/her/their signaturejs)on the instrument the personjs),or the entity upon behalf of
which the personts)acted,executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the foregoing paragraph
is true and correct.
WITNESS my hand and official seal.
~if!:ypu~&L
•
(Notary Seal)
•
(Title or description ofattached document)
(Title or description of attached document continued)
DESCRIPTION OF THE A ITACHED DOCUMENT
ADDITIONAL OPTIONAL INFORMATION
INSTRUCTIONS FOR COMPLETING lHIS FORM
Any acknowledgment completed in California must contain verbiage exactly as
appears above in the notary section or a separate acknowledgment form must be
properly completed and attached to that document. The only exception is if a
document is to be recorded outside of California.In such instances. any alternative
acknowledgment verbiage as may be printed on s!lch a document so long as the
verbiage does not require the notary to do something /J,o/is illegal for a notary in
California (i.e. certifying the authorized capacity of the signer). Please check the
document carefullyfor proper notarial wording and attach Ihisform ifrequired.
Number of Pages __Document Dale _
(Additional information)
CAPACITY CLAlMED BY THE SIGNER
o Individual (s)
o Corporate Officer
(Title)
o Partner(s)
o Attorney-in-Fact
o Trustee(s)o Other _
•State and County information must be the State and County where the document
signer(s)personally appeared before the notary public for acknowledgment
•Date of notarization must be:the date that the signer(s)personally appeared which
must also be the same date the acknowledgment is completed.
•The notary public must print his or her name as it appears within his or her
commission followed by a comma and then your title (notary public).
• Print the name(s)of document signer(s)who personally appear at the time of
notarization.
•Indicate the correct singular or plural fonns by erossing off incorrect forms (i.e.
Mls~is 1fW&)or circling the correct fonns.Failure to correctly indicate this
information roay lead to rejection of document recording.
• The notary seal impression must be clear and photographically reproducible.
Impression must not cover text or lines.If seat impression smudges,re-seal if a
sufficient area permits,otherwise complete a different acknowledgment form.
•Signature of the notary public must match the signature on file with the office of
the county clerk.
0:.Additional information is not required but could help to ensure this
acknowledgment is not misused or attached to a different document
<.Indicate title or type of attached document,number of pages and date.
.:.Indicate the capacity claimed by the signer.If (he claimed capacity is a
corporate officer,indicate the tide (i.e.CEO.CFO,Secretary).
•Securely attach this document to the signed document
2008 Version CAPA vI2.IO.07 800-873-9865 www.NotmyClasse:s.com
'"-.§i!.,1-"if"
CALIFORNIA
ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of FRESNO
u.J::5&c:£
eared,Preston Prince.
who proved to me on the basis of satisfactory evidence to the person(s)whose name(s)is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
I certify under PENAL TVOF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
(Notary Seal)
Description of the Attached Document (optional)
Cityof Fresno HomeInvestment Partnerships (HOME)Agreement
Titleor description of attached document
Numberof Pages __39_DocumentDate __"--_
Droge Development
(Additional In/ormation)
EXHIBIT "An
PROPERTY DESCRIPTION
APN:468-252-05
Legal Description:
Real Property in the Cityof Fresno,County of Fresno,State of California,described as
follows:
LOT 17, 18,AND191NBLOCK96OFTHE TOWN (NOW CITY)OF FRESNO,
ACCORDING TO THE MAP THEREOF RECORDER IN BOOK1 PAGE 2 OF MAPS,
RECORDS OFSAID COUNTY.
APN:468-252-06
Legal Description:
Real property inthe Cityof Fresno,Countyof Fresno,Stateof California,described as
follows:
LOT20 ANDTHE SOUTHEAST 10FEETOF LOT 21,IN BLOCK 96OFTHETOWN OF
FRESNO,INTHE CITYOF FRESNO,COUNTY OF FRESNO,STATE OF CALIFORNIA,
ACCORDING TO THE MAP THEREOF RECORDED IN BOOK 1,PAGE 2 OF PLATS,
FRESNO COUNTY RECORDS.
Page1of 1
EXHIBIT "B"
PROJECT DESCRIPTION AND SCHEDULE
The Project will consist of demolition,related on- and off-site improvements,
construction of common areas,management offices, retail on the ground floor,
parking,and construction of forty-five (45) housing units on the upper-floors,of which
eleven (11) units will be HOME Program-assisted floating units preserved as Very
Low and Low-Income Housing Units in accordance with the following chart:
HOME FUNDED FIXED UNITS
Percent of One Bedroom Units Two Bedroom Units
Median Income
50%-1--2-
60%-2--6-
Total -3--8-
Eleven (11) of the units will be reserved as Very Low- and Low-Income Affordable
Units for a period of fifty-five (55) years.
HOME Funds will be made available by the CITY for payment of HOME eligible costs
not to exceed the lesser of One Million Eight Hundred Thousand dollars and 00/100
($1,800,000.00),the aggregate HOME Program per unit cap (24 C.F.R. 92.250) for
the eleven (11)HOME-assisted Units as determined by the CITY, as needed, for
HOME eligible project development costs.
PROJECT SCHEDULE
Obtain Buildina Permits Julv 2013
Start Construction Julv 2013
Complete Construction Auqust 2014
Complete Lease Up February 2015
Page 1 of 1
>.
EXHIBIT "C"
PROJECT BUDGET
r~W~4;aa5,351 1,800,000 1,350,000 1,735,357
,_,,430 71,430
·~76,304.76,304
_500427 508,427
·~18.625 16,625
,~5,774 121,534 174,240
~,~!89,591
1",,--, ,
I 3,500 ,~:1 ",-30405-4 ~J~,OOO ,.0 ,2,~54
~'3,'2'5 13,215
~.$J2,,4;3 682,143
_35,~16 35,316
(~1i,OOO 5,000a56,8l1O 56,800
"'·,40000 40,000
~20,20,000
~~,32,32,500
'_30,000 30,000
.:SO~OOO 60,000
.£5,000 55,000
~:S5,OOO 55,000
;_!,!5<l.ooo 450,000 700,000
'_:>3750 23,750
r W8,719 8,719
~6.959 6,959
10:000 10,000
'......1·7.134 17,134
I ..0
2,0011628 ---.0 .1.tlO1;626 -ftl."'-'100;000"--0_."-
1 ·"iti:1"l:OOO 12,000
~.,73:73,285
"",.'""
~611,ooo 168,000
,000 450,000
......,17.sn 117,537,
~_OO,ooll 30,000
1~.12,OOO 12,000
79.54$179,5-48
~12.000 12,000
i@ 0
:-47{430 47,430
~67,573 67,573
«I,40,000tiE2S;OOD 28,000
60,00<1 60,000
~2;1:t3 62,713
1~'35;OOO,35,00<1
~,300 95,300
,if..".r
1:,~l',490,386 .':~.::p ~37a ,
"O"1;:tW.~
4,4SO
660,000
Rundlrt ;SO~~~
F';;""',',...~';..,.
.'
_4~
:....Fl.
Demolition/Abatement
Other.
SUBTOTAl
Development
Appraisal
Ardriteclural
Envlronmental Assessment
Geotechnical Sludy
SUTVeYJEngineering
L....
Cons!Closing
PermOoslng
Organization of Partner'5hip
Syndication
Lender Counsel
Bond Counsel
SyndicationConsuftan1
Developer Fee
Project Management
TCAC AppmIonltoringFee
COLAC and CCIACFees
Bond IssuerFee
Other ConsurtanfB:Mar1tet Study
Other.Planning Consutl8nt
OtherlMisc
SUBTOTAL
Other oeveklpmeT'lt
Real EstateTaxesdtning AcqIConst
Insurance during construclion
Relocation
Bidding Costs
Pennlts,Fees &Hookups
fmpactlMltlgatIon Fees
SoftCost Contingency
Pre-Development Interest
Closing,Tille &Recording coste-Const
ClOSIng,Tille &Recording ccsie-Perm
ConstnJction loan Interest· Tax Exempt B
Construction lnspeclion Fees
Other.
Construction Loan Interest - son Debt
Lender Origination Fees
Lender Expenses
Aud"rtI Cos!certification
Furnishings
MartcetinglLeaslng Expenses
Rent Up Account
CapitalizedOperatingReserve
Reptacement Reserves:
SUBTOTAL
Acquisllion Costs:
Purchase Price
LJens
TltlelRecordJnglEscrowllegal-Acq
Extension Payment
Olhec _
SUBTOTAL
Construction
Basic ConsbuctlonContract
Bond Premium
Builder'sRisk Insurance
Contruction OH,P.GC
SIte tmprovementsJLandscaP8
Constructlon Contingency
Total Development Costs Ki!iiY!i!&006..1,800,000 2,950,000 1.350,000 700,000 3,600,000
EXHIBIT "0"
55-YEAR CASH FLOW STATEMENT
,t
DROGE RESIDENTIAL COMPONENT -S5 YEAR CASH FLOW ANALYSIS
INCOME FROM HOUSING UNITS Inflation Year1 Year 2 Year3 Year 4 Year 5 Year6 Year 7 Year8 Year9 Year10 Year11 Year12
,
Schedule Rental Income
Vacancy Loss
EFFECTIVE GROSS INCOME
~.,
2.5%$,319,932 $327,930 $336,129 s 344,532 $353,145 $361,974 $371,023 $380,299 $389,806 $399,551 $409,540 $419,779
-7.0%$(22,395)$(22,955)$(23,529)$(24,117)$(24,720)$(25,338)s (25,972)$(26,621)$(27,286)$(27,969)$(28,668)$(29,384)
$297,537 $304,975 .$312,600 $320,415 $328,425 $336,636 $345,051 $353,678 $362,520 $371,583 $380,872 $390,394
OPERATING EXPENSES &RESERVE DEPOSITS
Operating Expenses
Replacement Reserve
TOTAL EXPENSES &RESERVES
NET OPERATING INCOME
HARD DEBT SERVICE
Bank Loan(1st Lien)
CASH FLOW AVAILABLE FOR SOFT DEBT
SOFT DEBT SERVICE
3.5%$184,500 s 190,958 $197,641 $204,558 $211,718 $219,128 .$226,798 s 234,736 $242,951 s 251,455 s 260,255 $269,364
$11,250 $1i,250 $11;250 s 11,250 $11,250 $11,250 '$11,250 $11,250 $11,250 $11,250 $11,250 $11;250
$195,750 $202,208 $208,891 $215,808 $222,968 $230,378 $238,048 $245,986 $254,201 $262,705 $271,505 $280,614
$101,787 $102,768 $103,709 $104,606 $105,457 $106,257 s 107,004 $107,692 $108,318 s 108,878 $109,367 $109,780
$84,000 s 84,000 $84,000 $84,000 $84,000 $84,OOP $84,000 $84,000 $84,000 $84,000 $84,000 $84,000
$17,787 $18,768 $19,709 $20,606 $21,457 $22,257 $23,004 $23,692 $24,318 $24,878 $25,367 $25,780
HARD DEBT SERVICE COVERAGE RATIO
Fresno HA (2nd Lien)
Cityof Fresno (3rd Lien)
(62%)
(38%)
$2,950,000
s 1,800,000,
1
I
1
j,
'Ill
11,028
6,759
1.21
11,636
7,132
1.22
12,219
7,489
1.23
12,776
7,830
1.25
13,303
8,154
1.26
13,800
8,458
1.26
14,262
8,741
1.27
14,689
9,003
1.28
15,077 .
9,241
1.29,
15,424 '
9,454
1.30
•
15,727
9,639
1.30
15,983
9,796
1.31
..
DROGE RESIDENTIAL COMPONENT - .
INCOME FROM HOUSING UNITS Inflation I Year 13 Year 14 Year15 Year 16 Year 17 Year 18 Year 19 Year20 Year 21 Year 22 Year 23 Year24
Schedule Rental Income
Vacancy Loss
EFFECTIVE GROSS INCOME
2.5%$430,273 $441,030 $452,056 $463,357 $474,941 s 486,814 $498,985 $511,459 $524,246 $537,352 $550,786 $564,555
-7.0%$(30,119)$(30,872)$(31,644)$(32,435)$(33,246)$(34,077)$(34,929)$(35,802)$(36,697)$(37,615)$(38,555)$(39,519)
$400,154 $410,158 $ 420,412 $430,922 $441,695 $452,737 $ 464,056 $ 475,657 $487,549 $ 499,737 $512,231 $ 525,037
OPERATING EXPENSES &RESERVE DEPOSITS I
Operating Expenses
Replacement Reserve
TOTAL EXPENSES &RESERVES
NET OPERATING INCOME
HARD DEBT SERVICE
Bank Loan(1st lien)
CASH FLOW AVAILABLE FOR SOFT DEBT
3.5%$278,792 s 288,550 $298,649 $309,102 $319,920 $331,118 $342,707 s 354,701 $367,116 $379,965 $393,264 $407,028
$11,250 $11,250 $11,250 $11,250 $11,250 $11,250 $11,250 $11,250 $11,250 $11,250 $11,250 $11,250
$290,042 $299,800 $ 309,899 $320,352 $331,170 $342,368 $ 353,957 $ 365,951 $378,366 $ 391,215 $404,514 $ 418,278
$110,112 $110,358 $110,513 $110,570 $110,525 $110,370 $110,099 $109,706 $109,183 $108,522 $107,717 $ 106,758
$84,000 $84,000 $84,000 $84,000 $84,000 $84,000 $84,000 $84,000 $84,000 $84,000 $84,000 $84,000
$26,112 $26,358 $ 26,513 $26,570 $ 26,525 $26,370 $ 26,099 $ 25,706 $ 25,183 $ 24,522 $23,717 $ 22,758
HARD DEBT SERVICE COVERAGE RATIO
50FT DEBT SERVICE
Fresno HA (2nd Lien)(62%)
Cityof Fresno (3rd Lie~)(38%)
s 2,950,000
$1,800,000·
'I1·
I,
ij
~
It
II
,,-
16,189
9,922
1.31
16,342
10,016
1.31
16,438
10,075
1.32 .
16,473
10,097
1.32
16,445
10,079
1.32
16,349
10,020
1.31
16,181
9,918
1.31
15,938
9,768
.1.31
15,613
9,569
1.30
15,204
9,318
1.29
14,704
9,012
1.28
.
14,110
8,648
1.27
DROGE RESIDENTIAL COMPONENT - .
INCOME FROM HOUSING UNITS Inflation 1 Year 2S Year26 Year 27 Year 28 Year 29 Year 30 Year31 Year32 Year33 Year 34 Year3S Year36
Schedule Rental Income
VacancyLoss
EFFECTIVE GROSS INCOME
2.5% $578,669 $593,136 $607,964 $ 623,164 $638,743 $ 654,711 $671,079 $ 687,856 $ 705,052 $722,679 $ 740,746 $759,264
-7.0% $ (40,507)$(41,520) $ (42,558) $ (43,621) $ (44,712) $ (45,830) $ (46,976) $ (48,150) $ (49,354) $ (50,588) $ (51,852)$(53,148)
$538,162 $551,617 $565,407 $ 579,542 $594,031 $608,881 $624,103 $ 639,706 $ 655,699 $672,091 $ 688,893 $706,116
OPERATING EXPENSES &RESERVE DEPOSITS 1
Operating Expenses
Replacement Reserve
TOTAL EXPENSES &RESERVES
NET OPERATING INCOME
HARD DEBT SERVICE
BankLoan(1st Lien)
CASH FLOW AVAIlABLE FOR SOFT DEBT
3.5% $421,274 $ 436,019 $451,279 $467,074 $483,422 $500,341 $517,853 $535,978 $ 554,738 $574,153 s 594,249 $615,047
$ 11,250 $ 11,250 $11,250 $11,250'$11,250 $ 11,250 $11,250 $ 11,250 $ 11,250 $11,250 $ 11,250 $11,250
.s 432,524 $ 447,269 $462,529 $ 478,324 $494,672 $511,591 $529,103 $547,228 $ 565,988 $585,403 $ 605,499 $626,297
$105,638 $ 104,348 $102,878 $101,218 $99,359 $97,290 $95,000 $ 92,478 $ 89,711 $86,688 $ 83,395 $79,818
$84,000 $ 84,000 $84,000 s 84,000 $84,000 $84,000
• I
$21,638 $ 20,348 $18,878 $ 17,218 $15,359 $13,290 $95,000 $92,478 $ 89,711 $86,688 $ 83,395 $79,818
SOFT DEBT SERVICE 1-,--
HARD DEBT SERVICE COVERAGE RATIO
Fresno HA (2nd Lien)
Sitv of Fresno (3rd Lien)
(62%)
(38%)
$:2,950,000 '
$1,800,000
"
II
iIi
1/
II
:1
~'
'lll
'13,416
8,223
1.26
12,616
7;732
1.24
11,704
7,173
1.22
10,675
6,543
1.20
9,523
5,836
1.18
;
•
8;240
5,050
1.16
,
58,900
36,100
57,336
35,142
55,621
34,090
53,746
32,941
51,705
31,690
49,487
30,331
•
DROGE RESIDENTIAL COMPONENT -.
INCOME FROM HOUSING UNITS Inflation I Year 37 Year38 Year 39 Year40 Year41 Year42 Year43 Year 44 Year4S Year46 Year47 Year48
Schedule Rental Income
Vacancy loss
EFFECTIVE GROSS INCOME
2.5% $ 778,246 $ 797,702 $817,645 $838,086 $ 859,038 $880,514 $902,527 $925,090 $ 948,217 $ 971,922 s 996,221 s 1,021,126
-7.0% $ (54,477) $ (55,839) $ (57,235) $ (58,666) $ (60,133) $ (61,636) $ (63,177) $ (64,756) $ (66,375) $ (68,035) $ (69,735) $ (71,479)
$ 723,769 $741,863 $760,409,$779,420 $ 798,905 '$818,878 $839,350 $860,334 $ 881,842 $ 903,888 s 926,485 $ 949,647
$75,945 $71,759 ,$67,245 $ 62,389 $ 57,172 $51,577 $45,588 $39,183 $ 32,345 $ 25,053 $17,284
OPERATING EXPENSES &RESERVE DEPOSITS I
Operating Expenses
Replacement Reserve
TOTAL EXPENSES &RESERVES
NET OPERATING INCOME
HARD DEBT SERVICE
Bank loan (1st lien)
3.5% $636,574
s 11,250
$647,824
s 658,854
$ 11,250
$670,104
$681,914
$11,250
$693,164
$ 705,781
$ 11,250
$ 717,031
$ 730,483
$ 11,250
s 741,733
$756,050
s 11,250
$767,300
$ 782,512
$ 11,250
$793,762
s 809,900
s 11,250
$821,150
$ 838,247
s 11,250
·$849,497
$ 867,585
$ 11,250
$ 878,835
$ 897,951 $
,$11,250 s
$909,201 $
$
929,379
11,250.
940,629
9,018
CASH FLOW AVAILAIJLE FOR SOFT DEIJT $ 75,945 $ 71,759 $67,245 $62,389 $ 57,172 $51,577 $45,588 $39,183 $ 32,345 $ 25,053 $17,284 $9,018
SOFT DEBT SERVICE
Fresno HA (2nd lien)(62%)
Cityof Fresno (3rd lien).(38%)
s 2,950,000
$1,800,000
47,086
28,859
44,490
27,268
41,692
25,553
38,681
23,708
35,447
21,725
31,978
19,599
28,264
17,323
24,294
14,890
20,054
12,291
15,533
9,520
10,716
6,568
5,591
3,427
HARD DEBT SERVICE COVERAGE RATIO
j
1
I'
•,
I,!
';..'
(0.
•
•
~
DROGE RESIDENTIAL COMPONENT -.
•
INCOME FROM HOUSING UNITS Inflation I Year 49 Year SO Year 51 Year 52 Year 53 Year 54 Year 55
Schedule Rental Income
Vacancy Loss
.EFFECTIVE GROSS INCOME •
2.5%$1,046,654 $1,072,821 $1,099,641 $1,127,132 $1,155,310 $1,184,193 $1,213,798
-7.0%s (73,266)s (75,097)s (76,975)s (78,899)s (80,872)s (82,894)$(84,966)
$973,388 $997,723 $1,022,666 $1,048,233 $1,074,439 $1,101,300 $1,128,832
OPERATING EXPENSES &RESERVE DEPOSITS I
HARD DEBT SERVICE I
•
Operating Expenses
Replacement Reserve
TOTAL EXPENSES &RESERVES
NETOPERATINGINCOME
Bank Loan (1st Lien)
3.5%s
$
$
$
961,907 .$995,574 $1,030,419 $1,066,484 $1,103,811 s 1,t42,444 $1,182,430
11,250 $11,250 $11,2.50 $11,250 $11,250 $11,250 $11,250
973,157 $1,006,824 $1,041,669 $1,077,734 $1,115,061 $1,153,694 $1,193,680
231 $(9,101)$(19,003)$(29,501)$(40,622)$(52,394)$(64,847)
CASHFLOW AVAILABLE FORSOFT DEBT
SOFT DEBT SERVICE I
$231 $(9,101)$(19,003)$(29,501)$(40,622)$(52,394)$(64,847)
••
Fresno HA(2nd Lien)
City of Fresno (3rd Lien)
(62%)
(38%)
s 2,950,000
$1,800,000
143
88
HARD DEBT SERVICE COVERAGE RATIO
I'
,i
"J
I,
~I
I
"! •
/./7.
•j
$.
1
.
..
EXHIBIT "E"
RECORDEDAT THE REQUESTOF
AND WHEN RECORDED RETURN TO:
City of Fresno
Developmentand Resource Management
Department
Housing and Community Development Division
Attention: Manager
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
(SPACE ABOVETHISLINEFOR RECORDER'S USE)
CERTIFICATE OF COMPLETION
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:468-252-05
APN:468-252-06
City of Fresno
By::::::::::==========~=Craig Scharton,Assistant Director
Development and Resource
Management Department
Date:-===============
Page 1 of 3
APN: 468-252-05
APN: 468-252-06
Recitals:
A.By a City of Fresno ("CITY") HOME Investment Partnerships Program
("Program")Agreement dated ., 2012,("HOME Agreement") the Housing
Authority of the City of Fresno a California public benefit corporation (hereinafter referred to
as "DEVELOPER"),as may be amended from time to time, DEVELOPER agreed to
redevelopthe Droge and adjacent D. Yezdan sites into a forty-five (45) unit residential/retail
complex, reserving eight (8) rental units for Low-Income households ("Project"), upon the
premises legally described in EXHIBIT "A" attached to the HOMEAgreement, made a part
hereof by this reference (the "Property"),with the assistanceof HOME Funds while meeting
the affordable housing, income targeting and other requirements of 24 C.F.R. 92 according
to the terms and conditions of the HOME Agreement and the Loan Documents and other
documenUinstruments referenced therein.
B. The HOME Agreement or a memorandum of it was recorded on =====
as InstrumentNo.in the Official Recordsof FresnoCounty, California...
C. Under the terms of the HOME Agreement,after the DEVELOPER completes
the Project,the DEVELOPER mayask CITY to record a Certificateof Completion.
D. The DEVELOPER has asked CITY to furnish DEVELOPERwith a recordable
Certificate of Completion.
E.The CITY's issuance of this Certificate of Completion is conclusive evidence
that the DEVELOPER has completed reconstruction the Project as set forth in the HOME
Agreement.
NOW THEREFORE:
1. The CITY certifies that the DEVELOPER commenced the Project on
--=====-and completed the Project on and has done so in full compliance
with the HOMEAgreement.
2. This Certificate of Completion is not evidence of the DEVELOPER's
compliance with, or satisfaction of, any obligation to any mortgage or security interest
holder, or any mortgage or security interest insurer,securing money lent to finance work on
the Propertyor Project, or any part of the Propertyor Project.
3. This Certificate of Completion is not a notice of completion as referred
to in California Civil Code Section 3093.
4. Nothing contained herein modifies any provision of the HOME
Agreement.
Page 2 of 3
IN WITNESS WHEREOF, CITY has executed this Certificate of Completion
as of this ====<day of -, 20 .
CITY OF FRESNO
By.:·~=:=::::=:==:=::::::::=:::::===:=c==:c..
Craig Scharton, Assistant Director
Developmentand ResourceManagementDepartment
ATTEST:
CITY CLERK
By:-=================-_
Deputy
Date:-=================_
APPROVEDAS TO FORM:
JAMES SANCHEZ,CITY ATTORNEY
By:.:::=::=:=::::::::======::....-_
AssistanUDeputy
Date:-===========-_
HOUSING AUTHORITY OF THE CITY OF FRESNO
a California public benefit corporation
By:--.::~~:;:::==~============
Name: CEO/Preston Prince
Title: Executive Director
(Attach notary certificate of acknowledgment)
Date:===============-
Page 3 of 3
EXHIBIT "F"
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to Borrower for
Cancellation.
PROMISSORY NOTE
Loan Amount: $1,800,000.00
Fresno, California
Date:=======-,2012
For value received, the undersigned, Housing Authority of the City of Fresno, a
California public benefit corporation ("Borrower"), promises to pay to the order of the City of
Fresno, a California municipal corporation,("Lender"),the sum of One Million Eight Hundred
Thousand dollars and 00/100 ($1,800,000), to the extent that such funds are loaned to
Borrower, with interest on the unpaid principal balance running from the date of disbursement
with' simple interest at the rate of 2% annually in accordance with the HOME Investment
Partnerships Agreement dated , 2012, entered into between the Lender and
BORROWER, ("Agreement"), with all principal and interest due and payable on or before the
earlier of (i) Borrower's uncured default under the Agreement with respect to the Project, and
(ii) fifty-five (55) years from the date of this Note, ("Maturity Date"), on which date the unpaid
balance of principal with unpaid interest thereon shall be due and payable, along with
attorney's fees and costs of collection, and without relief from valuation and appraisement
laws.
This is a Residual Receipts Note. Principal and interest payments equal to 100% of
annual Residual Receipts,to the extent that Residual Receipts exist and are 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 Project converts to
its permanent phase under the 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 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 respectto the Project and Note.
Residual Receipts means in each operating year after the conversion of the Project financing
to its permanent phase, the sum of: (i) all cash received by the 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,
and (b) interest on reserves not available for distribution, 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) the Project related annual fee
payable to the investment limited partner and the annual fees payable to the nonprofit
56929\126525v3 Page 1 of 5
managing general partner; (ii) all payments on account of any loans (including unpaid
principal and accrued reasonable interest) made for the benefit of the Project by the
Borrowers pursuant to the terms of any equity investor limited partnership agreement, and;
(iii) payments towards the deferred developer fee (including repayment of loans or capital
contributions made by a partner to a partnership specifically for the purpose of paying the
deferred developer fee); (iv) 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 Project for the operation
of the Project not to exceed the amount required by the Project's permanent lender, annually
adjusted in proportion to the average increase of the following indices (a) the United States
Bureau of Labor Statistics for Hourly Wage Rates of all workers in manufacturing, and (b) of
all Commodity Wholesale Prices,said indices shall be re-defined to the mutual satisfaction of
the parties in the event of change in form and basis of indices, all increases shall use the
indices for calendar year 2010 as their base; (v) the payment of principal and interest, and
any associated fees, expenses, and costs, with respect to the Financing; (vi) payments made
to the investors which are required to reimburse the investors a portion of its capital
contribution in relation to the Project when there is a shortfall in funding initially promised
pursuant to any equity investor or partnership agreement; (vii) the payment of any deferred
development costs.
All capitalized terms used in this Note, unless otherwise defined, will have the respective
meanings specified in the Agreement. In addition, as used in this Note, the following terms
will have the following meanings:
Business Day means any day other than Saturday, Sunday, or public holiday or the
equivalent for banks generally under the laws of California. Whenever any payment
to be made under this Note is stated to be due on a day other than a Business Day,
that payment may be made on the next succeeding Business Day.
Note Maturitv Date means fifty-five (55) years from the date the permanent loan
converts.
This Note, and any extensions or renewals hereof, is secured by a Deed of Trust
and 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 3
rd position lien on the
Property.
Time is of the essence. It will be a default under this Note if Borrower defaults
under the Agreement, any other Loan Document with the Lender, or this Note and such
default continues beyond the notice and cure period as provided in such documents. In the
event of a default by Borrower with respect to any sum payable under this Note and the
failure to cure such default within ten (10) days, 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 an uncured 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
56929\126525v3 Page 2 of 5
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. Lender acknowledges and agrees that it shall send notice of any default hereunder
to the limited partners of Borrower and shall accept any cure offered by such limited partners
on the same basis as it would accept a cure from Borrower.
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 interestandthen 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.
Borrower agrees to pay all costs including, without limitation, reasonable attomey
fees, incurred by the holder of this Note in the successful enforcement of payment, whether
or not suit is filed, and including, without limitation, all costs, reasonable attorney fees, and
expenses incurred by the holder of this Note in connection with any bankruptcy,
reorganization, arrangement, or other similar proceedings involving the Borrower 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.
Any notice, demand, or request relating to any matter set forth herein shall be in
writing and shall be given as provided in the 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:
Except as provided herein or in the Agreement, if the Trustor/Grantor shall sell,
conveyor 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 havethe 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.
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
56929\126525v3 Page 3 of 5
'.......~"
"
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 anyone 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 and Lender agree that this Note will be deemed to have been made under
and will be govemed 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 and Borrower may consent to in a
writing duly signed by Borrower or Lender or its authorized agents.
This Note shall be nonrecourse to Borrowerand all its constituent members and may
be prepaid at any time without penalty. Neither Borrower 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 pursuant to the Deed of Trust and Lender shall have no right to
seek or recover any deficiency amount from Borroweror any partner of Borrower.
11/
11/
III
56929\126525v3 Page 4 of 5
IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be
executed as of the date and year first abovewritten.
HOUSING AUTHORITY OF THE CITY OF FRESNO
a California public benefit corporation
By:===================--_Preston Prince, CEO/Executive Director
(Attach notary certificate of acknowledgment)
Date:==================-
,56929\126525v3 Page 5 of 5
EXHIBIT "G"
RECORDING REQUESTED BY
Chicago Title Company
AND WHEN RECORDED MAIL TO:
City of Fresno
Housing and Community Dev.Division
2600 Fresno Street,Room 3070
Fresno CA 93721-3605
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
File No.:;;::;:;::;:::====:-,.
A.P.N.:468-252-05
A.P.N.:468-252-06
DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, made this,-=======,,.<2012,by
TRUSTOR:Housing Authority of Citv of Fresno,a California public benefit corporation
whose address is 802 Van Ness Avenue.Fresno.California 93721
TRUSTEE:First American 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 HOME Agreement entered between Housing Authority of City of Fresno,a Califomia public
benefit corporation and Beneficiarydated , 2012.
2. Payment of the indebtednessevidenced by a Promissory Note of even date herewith,and any extension or
renewal thereof, in the principal sum of $1,SOO,000 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) recitingit is so secured.
TO PROTECT THE SECURITYOF 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
56929\126543v3 Page I of4
character or use of said property may be reasonably necessary, the specific enumerations herein not
excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary
upon indebtedness secured hereby and in such order as Beneficiary may determine, or at option of
Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or
release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant
to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and
attomeys'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 (10) 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 Trustorfail 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 (5) years after
issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in
such request to retain them.).
(10) That as additional security,Trustor hereby gives to and confers upon Beneficiary the right, power and
authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property,
reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured
56929\126543v3 Page 2 of4
hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as
they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in
person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession of said property or any part
thereof, in his own name sue for or otherwise collect such rents, issues and profits, including those past due
and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable
attorneys' fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine.
The entering upon and taking possession of said property, the collection of such rents, issues and profits and
the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or
invalidate any act pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any
agreement hereunder after expiration of all applicable cure periods, Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for
saie 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 hi!)hest 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, inures 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.
56929\126543v3 • Page 3 of4
(16) The withdrawal, removal and/or replacement of (where applicable) general partner of Trustor pursuant to
the terms of a partnership agreement due to a violation by a general partner of the terms of a partnership
agreement, or a voluntary withdrawal from a partnership by a general partner, and any transfer of limited
partnership interests or interests in the same, shall not constitute a default under any of the Loan Documents,
and any such actions shall not accelerate the maturity of the Loan.
(17) Beneficiary agrees that the lien of this Deed of Trust shall be subordinate to any extended low-income
housing commitment (as such term is defined in Section 42(h)(6)(B) of the Intemal 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, (where applicable) 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:
In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default
and a copy of any Notice of Sale be mailed to Trustor at Trustor's address hereinbefore set forth, or if none
shown, to Trustor at property address.
NOTICE:A COpy OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY
TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES,A
NEW REQUEST MUST BE RECORDED.
Except as provided herein or in the HOME Agreement, if the Trustor/Grantor shall sell,conveyor 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.
Signature of Trustor(s):
By:::~~~~~~~~~~~~Its:~
ALL SIGNATURES MUST BE NOTARIZED
56929\126543v3 Page4 of4
EXHIBIT "A"
PROPERTY DESCRIPTION
APN:468-252-05
Legal Description:
Real Property in the City of Fresno, County of Fresno, State of California,described as
follows:
LOT 17,18,AND 191N BLOCK 96 OF THE TOWN (NOW CITY) OF FRESNO,
ACCORDING TO THE MAP THEREOF RECORDER IN BOOK 1 PAGE 2 OF MAPS,
RECORDS OF SAID COUNTY.
APN:468-252-06
Legal Description:
Real property in the City of Fresno, County of Fresno, State of California,described as
follows:
LOT 20 AND THE SOUTHEAST 10 FEET OF LOT 21, IN BLOCK 96 OF THE TOWN OF
FRESNO,IN THE CITY OF FRESNO,COUNTY OF FRESNO, STATE OF CALIFORNIA,
ACCORDING TO THE MAP THEREOF RECORDED IN BOOK 1, PAGE 2 OF PLATS,
FRESNO COUNTY RECORDS .
•
Page 1 of 1
EXHIBIT "H"
RECORDING REQUESTED BY AND for the benefit
of the City of Fresno and is exempt from the
payment of a recording fee in accordance with
GovernmentCode Sections 6103 and 27383.
ANDWHEN RECORDED MAIL TO:
CITYOF FRESNO
Housing and Community Development Division
2600 FresnoStreet,Rm.3070
Fresno,CA 93721-3605
Title Order Noco.===-Escrow No.-===
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
DECLARATION OF RESTRICTIONS
THIS DECLARATION OF RESTRICTIONS,("Declaration"),is executed as of this--
of ,2012 by the HousingAuthority of City of Fresno, a California public benefit
corporation ("Declarant") in favor of the City of Fresno, acting by and through its Downtown
and Community Revitalization Department,Housing and Community Development Division,
("CITY").
WHEREAS, Declarant is the owner of the real estate in the county of Fresno, state of
California, consisting of APN: 468-252-05 and APN: 468-252-06, which is more particularly
described in Exhibit "A", attached hereto and made a part hereof (the "Property"); and
WHEREAS, Pursuant to a certain HOME Investment Partnerships Program
Agreement dated , 2012 incorporated herein ("HOME Agreement") and
instruments referenced therein, Declarant agrees to utilize, and CITY agrees to provide,
certain HOME Program Funds from the United States Department of Housing and Urban
Development (HUD), to Declarant and Declarant agrees to preserve no less than three (3)
units as Affordable Very Low-Income units reserved for households earning fifty percent
(50%), or below, of the area median income for the Fresno MSA and eight (8) units as
Affordable Low-mcorne units reserved for households earning sixty percent (60%), or
below, of the area median income for the Fresno MSA ("Affordable Units"). All eleven (11)
Affordable Units shall be one- and two-bedroom Units 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 owned the Declarant, which affordability restrictions shall be
enforceable for a fifty-five (55) year period; and
WHEREAS, these restrictions are intended to bind Declarant and all purchasers and
their successors.
NOW THEREFORE, Declarant declares that the Property is held and will be held,
56929\126532v3 Page1 of 5
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 Units. 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 contractof salecovering 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 commencing on
the date the Declarant is notified by the City that the Affordable Unit tenant information has
been entered into the HUD's Integrated Disbursement and Information System (IDIS),
constituting the commencement of the fifty-five (55) year ("Afford ability Period").
1. Declarations. Declarant hereby declares that the Property is and shall be
subject to the covenants and restrictions'hereinafterset 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
considerationfor CITY entering intothe HOMEAgreementwith 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 the CITY. These covenants
and restrictionsare as follows:
a. Declarant for itself and its successor(s)on title covenants and agrees
that from the date of recordation of the CITY's Certificateof Completion,until the expiration
of the Affordability Period it shall cause eleven (11) of the Affordable Units to be used as
Affordable rental housing Units. Declarant further agrees to file a recordable document
setting forth the Project Completion Date(s) and the Affordability Period when determined
by the CITY. Unless otherwise provided in the HOME Agreement,the term Affordable Units
shall include, without limitation, compliancewith the folloWing requirements:
(i)Nondiscrimination.There shall be no discrimination against nor
segregation of any person or group of persons on account of race,color, creed,religion,
sex, marital status, national origin, ancestry, or handicap in the sale, transfer, use,
occupancy, tenure, or enjoyment of any of the Property,nor shall Declarant or any person
claiming under the Declarant, establish or permit any practice of discrimination or
segregation with reference to the selection, location,number,use or occupancy of owners
or vendees of the Project and/or Property.
(ii)Principal Residence. Each of the Affordable Units within the
Project upon the Property shall be leased only to eligible Very Low- and Low-Income
households, who shall occupy the Affordable,Units as their a principal residence. The
foregoing requirement that the Property tenants occupy the Affordable Units as their
principal residence does not apply to persons,other than natural persons, who acquire the
Property or portion thereof by foreclosure or deed in lieu of foreclosure or HUD qualified
entities that acquire the Propertyor portion thereof, withthe consentof the CITY.
(iii) Income Requirements.A total of three (3) Affordable Units may
be leased only to eligible householdswhose annual household income at the time of initial
56929\126532v3 Page 2 of 5
occupancy is not greater than fifty percent (50%) of the most recent annual median income
calculated and published by HUDfor the Fresno Metropolitan StatisticalArea and a total of
eight (8) Affordable Units may be leased only to eligible households whose annual
household income at the time of initial occupancy is not greater than sixty percent (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 rent
consistent HOME Program regulations.
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.
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 leasethereof.
Notwithstanding the foregoing,upon foreclosure by a lender or other transfer
in lieu of foreclosure, or assignment of an FHA-insured mortgage to HUD, the Affordability
Period shall be terminated if the foreclosure or other transfer in lieu of foreclosure or
assignment recognizes any contractual or legal rights of public agencies,nonprofit
sponsors, or others to take actions that would avoid the termination of low-income
affordability.However, the requirements with respect to Affordable Units 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 Projector 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 the 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 estoppelagainst the enforcement
thereof.
6. Costs and Attorney's Fees. In any proceeding arising because of failure of
Declarant or any future owner of the Propertyto complywith the Covenant and Restrictions
required by this Declaration, as may be amended from time to time, the CITY shall be
entitled to recover its costs and reasonable attorney's fees incurred in connection with the
successfulenforcement of such defaultor 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
56929\126532v3 Page 3 of 5
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 enforceableto the greatestextent permitted by law.
9. Pronouns. Any referenceto the masculine,feminine,or neuter gender herein
shall, unless the context clearly requires the contrary,be deemedto 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 Declarationor any provision hereof.
11. Amendment. No amendment or modification of this Declaration shall be
permitted without the prior written consent of the CITYand Declarant.
12. Recordation. Declarant acknowledges that this Declaration will be filed of
record in the Office of the Recorderof county of Fresno,Stateof California.
13. Capitalized Terms. All capitalized terms used in this Declaration, unless
otherwise defined herein, shall have the meanings assigned to such terms in the
Agreement.
14. Headings. The headingsof 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.
15. Neither Declarant nor any of its general and limited partners shall have any
personal liability for the obligations under this Declaration.The sole recourse of the City
shall be the exercise of its rights against the Property pursuant to the Deed of Trust and
Lender shall have no right to seek or recover any deficiencyamount from Declarant or any
partner of Declarant.
III
III
III
56929\126532v3 Page 4 of 5
IN WITNESS WHEREOF, Declarant has executed this Declaration of Restrictions on the
date first written above.
DECLARANT:
HOUSING AUTHORITY OF CITY OF FRESNO
a California public benefit corporation
By:-=======================-Preston Prince, CEO/Executive Director
(Attach notary certificate of acknowledgment)
DATE:-================-
56929\126532v3 Page 50f5
p;;p
EXHIBIT "An
PROPERTY DESCRIPTION
APN:468-252-05
Legal Description:
;
Real Property in the City of Fresno,County of Fresno, State of California, described as
follows:
LOT 17, 18, AND 19 IN BLOCK 96 OF THE TOWN (NOW CITY) OF FRESNO,
ACCORDING TO THE MAP THEREOF RECORDER IN BOOK 1 PAGE 2 OF MAPS,
RECORDS OF SAID COUNTY.
APN:468-252-06
Legal Description:
Real property in the City of Fresno, County of Fresno, State of California, described as
follows:
LOT 20 AND THE SOUTHEAST 10 FEET OF LOT 21, IN BLOCK 96 OF THE TOWN OF
FRESNO, IN THE CITY OF FRESNO,COUNTY OF FRESNO, STATE OF CALIFORNIA,
ACCORDING TO THE MAP THEREOF RECORDED IN BOOK 1, PAGE 2 OF PLATS,
FRESNO COUNTY RECORDS.
Page 1 of 1
,.-:-;-.~
~.
AGENDA ITEM NO.GA - D
COUNCIL MEETING August 16.2012
APPROVED BY
DEPARTMENT DIRECTORCRAIG SCHARTO sSlstant Director
Development and Resource Management
•City of ,.
r.,~••~\IV-.-nE~."iji~~~REPORT TO THE CITY COUNCIL
CITY MANA
CLAUDIA CAZARES,Division nag~~
Housingand CommunityDevelop ent Division ~U-·
FROM:
August 16,2012
By:.CORRINA NUNEZ,ProjectMan
Housingand CommunityDevelop
SUBJECT: CONSIDER AND ADOPT THE ENVIRONMENTAL FINDING OF A MITIGATED NEGATIVE
DECLARATION PREPARED FOR ENVIRONMENTAL ASSESSMENT NO.EA-12-009,
PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT,AND
APPROVE A $1.8 MILLION HOME INVESTMENT PARTNERSHIPS PROGRAM.
AGREEMENT WITH THE HOUSING AUTHORITY OF THE CITY OF FRESNO FOR
DEMOLITION OF THE DROGE BUILDING (AT 802 VAN NESS AVE.lAPN: 468-252-05) AND
THE D. YEZDAN BUILDING (AT 814 VAN NESS AVE.lAPN: 468-252-06), AND
REDEVELOPMENT OF THE SITES INTO A FOUR-STORY RESIDENTIAL WORKFORCE
HOUSING/RETAIL DEVELOPMENT
Presented to City Council
RECOMMENDATIONS Oat,~"Z..i
DiSPositiontrfJ""-
Staff recommends the City Council:
1)Consider and adopt the environmental finding of a Mitigated Negative Declaration (MND)
prepared.for Environmental Assessment No. EA-12-009, pursuant to the California
Environmental Quality Act (CEQA) (please see Exhibit "F"- CEQA Mitigated Negative
Declaration);and'.
2) Approve a $1.8 million HOME Investment Partnerships (HOME) Program Agreement
(please see Exhibit "B"~HOME Program Agreement),substantially in the form attached
and subject to the City Attorney's prior approval as to form, with the Housing Authority of
the City of Fresno (Housing Authority), for demolition of the Droge building (at 802 Van
Ness Ave.lAPN:468-252-05)and the D. Yezdan building (at 814 Van Ness Ave.lAPN:
468-252-06), and redevelopment of the sites into a four-story residential workforce
housing/retail development (please see Exhibit "C"-Project Location Map).
EXECUTIVESUMMARY
If approved as recommended,$1.8 million'in HOMEProgramfunds will be providedto the HousingAuthorityin
the form of a 55-year loan at 2%interest,with principal and interest repaid from 38% of the project's annual
residual receipts. Once completed, the development will consist of approximately 45 units of residential
workforce housing, with a common area,management offices,parking,and retail space.The demolition and
SUbsequent development cost is estimated at $10.4 million, of which $1.8 million in HOME Program funds is
requested to help finance 11 affordable housing units.An estimated$2.95 million in Housing Authority funds,
REPORT TO COUNCIL
ADOPT CEQAAND APPROVE HOME PROGRAM AGREEMENT WITH HOUSING AUTHORITY FOR THE
DROGE PROJECT
August 16,2012
Page 20f4
$1.35 million in conventional permanent loan funds, $700,000 in deferred costs, and $3.6 million in 4% Low
Income Housing Tax Credits (L1HTC)will finance the balance to complete the project (please see Exhibit "A" -
Residential Project Cost Information and Budget). The estimated completion date of the redevelopment
project is scheduled for August 2014.
BACKGROUND·-
In an effort to create downtown workforce housing, the HousingAuthority purchased the Droge building on July
2,2010 for $203,000 and is proposing to purchase the adjacent D. Yezdan building, to the north, for $310,000.
In addition to the property purchase, the Housing Authority will invest $3.81 million to help sponsor the
proposed demolition and redevelopment activities..
Shortly after the Housing Authority started planning its proposed Droge project, the City received, on October
28, 2010, a HOME Program funding requesting $1.8 million to help finance 11 affordable housing units.
The Droge building (also known as the Tumer building), was originally constructed in 1922, and in 1980 was
considered for eligibility to the Fresno Local Register of Historic Resources. However, the nomination was
denied by the Historic Preservation Commission (HPC) based on the extensive alterations that were performed
to the bUilding's exterior in 1948 and again in 1952, which diminished the building's historic value. On March
26, 2012, the HPC again reviewed the eligibility of the Droge building, based on additional research, and on a
5-0 vote recommended to the City Council, the designation of the building. On May 17,2012,the City Council
found that the Droge had insufficient integrity for the building to be designated, but designated the site itself to
the Local Register of Historic Resources. Also, Resolution No. 2012-90, stipulates that the property owner is
not restricted from making changes to the building due to the site's designation. The building sits on .26 acres
at the gateway of Fresno's downtown and has been vacant for over 24 years. The Droge structure is severely
dilapidated with the walls currently being supported with multiple steel beams (please see Exhibit "0" - Existing
Conditions).
Immediately adjacent to the Droge building is the D. Yezdan building which is a single-story masonry brick
building located at 814 Van Ness Ave. (APN: 468-252-06). This building sits on .16 acres and has also been
vacant for the past several years. On May 23, 2011, the Housing Authority entered into a Purchase and Sale
Agreement with the current owner to purchase the 1,750 square foot building for $310,000. It is proposed that
this additional site will enhance the development of the project. A June 22, 2011, appraisal,compfetedby
James G. Palmer Appraisals, Inc., determined the market value of the building and property to be $305,000.
The Housing Authority and the current owner mutually agreed to settle on the initial $310,000··price.The D.
Yezdan building was completely renovated in 2009, and therefore has no historic significance. It is also not
eligible for the National Register of Historic Places, nor is it eligible for listing on the Local Register of Historic
Resources..
The Housing Authority is proposing to demolish the dilapidated Droge building and the adjacent D. Yezdan
building and redevelop the sites into residential workforce housing with ground floor retail. There will be a 45-
unit mix of studios, one-bedroom, and two-bedroom units that will range in size from 475 to 900 square feet,
with rents ranging from $469 to $732 depending on unit size and location. Eleven of the 45 units will be
reserved as affordable to very low- to 'low-income households earning no more than 60% of area median
income.The project will'also include a common area, management offices, and retail space (please see
Exhibit "E" - Site Plan and Elevations). The estimated completion date of the redevelopment project is
scheduled for August 2014.
·,
t~~r;;-
,;~
...REPORT TO COUNCIL
ADOPT CEQA AND APPROVE HOME PROGRAM AGREEMENT WITH HOUSING AUTHORITY FOR THE
DROGE PROJECT
August 16,2012
Page 3 of4
'Also, the development proposes to provide approximately 27 tenant parking stalls. The Housing Authority
continues to be in discussions with the City of Fresno for additional parking stalls at the spiral garage located
directly across the street on Van Ness Ave. Staff is requesting that Council allow flexibility to the current
proposed site plan so that, if desired, the Housing Authority may eliminate the proposed on-site parking and
expand the newly constructed building footprint to occupy both sites. If the Housing Authority eliminates the
on-site parking, it will not affect the CEQA finding attached as Exhibit "F". Staff has included an addendum to
the CEQA should the plan design change to eliminate the on-site parking.The building sites are in close
proximity to Highway 41 and the FresnoArea Express(FAX) bus route 28.
The cost of the proposed demolitionlredevelopment project is estimated at $10.4 million of which $1.8 million in
HOME Program funds is requested to help finance 11 affordable housing units. A majority of the project
financing is expected to be funded with 4%L1HTC.Disbursement of HOME funds to the Housing Authority will
be contingent upon an award of 4% tax credits to the project. The cost per residential square foot is estimated.
at $233, which is within the target range previouslyidentified by Council.'
To date, the following have been completed: preliminary design of the project, environmental assessment,
asbestos abatement plan, development of a financing plan, and execution a Purchase and SaleAgreement for
the adjacent D. Yezdan building.
The term workforce housing refers to residential units that are available to those who are gainfully employed
regardless of employment type, and are lower income.These individuals are often referred to as "essential
workers" in the community. Workforce housing is generally understood to mean affordable housing for
households with earned income that is insufficient to secure housing in reasonable proximity to the workplace.
This workforce housing project targets workers that earn between 50% and 60% of area median income. The
target market is single residents, couples,roommates, and urban professionals.This will be the first project of
its kind in Fresno, and will help the City with the revitalization of the downtown area and help fill a tremendous
need for workforce housing. This workforce housing project is also located in an area of downtown that is in
close proximity to services, amenities, and transportation, and will enhance the gateway to downtown.
This is a major redevelopment project that requires an experienced developer such as the Housing
Authority.Over the past 60 years, the Housing Authority has successfully developed,managed,and
owned hundreds of affordable housing units for lower income households. The Housing Authority was the
developer of a recently completed 215-unit complex in central Fresno, one of the largest multi-family
apartment complexes built in the area. Its mission is to provide housing within an environment that
fosters the advancement of low- to moderate-income households from a position of dependency to one of
self-sufficiency.The Housing Authority provides service rich programs to its tenants to promote self-
sufficiency.The completed redevelopment project will assist the Housing Authority with achieving its
affordable housing goals..
In addition,the project will assist the City in meeting its affordable housing goals as identified in the
Housing Element of the 2025 General Plan, the 2010-2014 Consolidated Plan, and the HOME Program
funding priorities for new housing development.The project will also make a positive impact toward
revitalizing the,downtown area by demolishing a dilapidated building and redeveloping the sites into a
residential/retail project.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
The item was placed on the August 8, 2012, Housing and Community Development Commission (HCDC)
agenda for consideration. Due to scheduling matters, the .Council staff report was routed on August 8, 2012,
....-.
REPORT TO COUNCIL
ADOPT CEQAANDAPPROVE HOME PROGRAM AGREEMENT WITH HOUSING AUTHORITY FORTHE
DROGE PROJECT
August 16,2012
Page 4 of4
prior to the HCDC meeting, for signatures and subsequent placement on the City Council agenda for August
16,2012.
ENVIRONMENTAL COMPLIANCE
In anticipation of HOME Program funding approval and the subsequent commencement of the
redevelopment activities, a National Environmental Policy Act assessment was completed on August 25,
2011,and resulted in a Finding of No Significant Impact. The City received authorization to use grant
funds from HUD on October 17,2011.
Also, on June 6, 2012, a CEQA environmental assessment was completed and resulted in a MND for this
project in accordance with the requirements of the CEQA Guidelines. The Initial Study resulted in staff
concluding that a finding of a MND was appropriate since the proposed project has been determined to
not be fully within the scope of Master Environmental Impact Report No.10130/SCH No.2001071097
prepared for the 2025 Fresno General Plan ("MEIR") and MND No. A-09-02/SCH No.2009051016 ("Air
Quality MND"). With all applicable mitigation measures of the MEIR applied to the project, together with
project specific mitigation measures, impacts have been reduced to less than significant, and the project
will not cause significant adverse cumulative impacts, growth inducing impacts and irreversible significant
effects beyond those identified by MEIR and the Air Quality MND. No substantial changes have occurred
with respect to the circumstances under which the MEIR was certified and no new information, which was
not known and could not have been known at the time the MEIR was certified as complete and the Air
Quality MND was adopted, has become available. Therefore, based on the attached environmental
assessment and the list of identified mitigation measures, staff recommends the City Council to find that
the project will not have a significant impact on the environment and that the filing of a MND is
appropriate in accordance with the provisions of CEQA Section 21157.5(a)(2) and CEQA Guidelines
Section 15178(b)(1)and (2). A Notice of Intent to Adopt the MND was noticed and published on JUly6,
2012,with no comments received within the 20-day comment period.
FISCAL IMPACT
HOME Program funds for the proposed rehabilitation project are available in the Development and Resource
Management Department'sFiscalYear 2013 Budget.
•
Attachments:
Exhibit A - ResidentialProject Cost Information and Budget
Exhibit B - HOMEProgramAgreement
Exhibit C - Project location Map
Exhibit 0 -Existing Conditions
Exhibit E - SitePlan and Elevations
Exhibit F - CEQA MitigatedNegative Declaration
K:\HOUSINGIPROCEDURES MIINUALICHAPTER 21HCDC&COUNCILICouncillSTAFF REPORTS\2012CDUNCIL 8-16-12 Droge Project
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