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HomeMy WebLinkAboutMLK Square - Subordination - 2021 Fresno County Recorder Paul Dictos, CPA Escrow Nurn"r:gm, 2021 -0071156 RECORDING REQUESTED BY: Recorded at the request of: Chicago Title Company SPL, EAGLE ROCK AND WHEN RECORDED MAIL DOCUMENT TO: 04/29/2021 02:38 59 Thomas P.Wild Esq, Titles: 1 Pages: 15 Wild&Kearney LLC Fees:$61.00 475 Wall Street CA S132 Fees:$0.00 Princeton NJ 08540 Taxes: $0.00 Total: $61.00 36302098 SPACE ABOVE FOR RECOROEWS USE ONLY 917,2,l ?,*zJ Subordination Agreement ro : 2 I - Spy/y ( � -��� vrP�r~nT -�7V7Y— %Vv/.P(brSl��re�.0 axT Pursuant to Senate Bill 2-Building Homes and Jobs Act(GC Code Section 27388.1),effective January 1,2018,a fee of seventy-five dollars($75.00)shall be paid at the time of recording of every real estate instrument,paper,or notice required or permitted by law to be recorded,except those expressly exempted from payment of recording fees,per each single transaction per parcel of real property.The fee imposed by this section shall not exceed two hundred twenty-five dollars($225.00). ❑ Exempt from the The per GC 27388.1 (a)(2);This document is subject to Documentary Transfer Tax. ® Exempt from fee per GC 27308.1 (a)(2);recorded concurrently"in connection with"a transfer subject to the imposition of documentary transfer tax(OTT). ❑ Exempt from fee per GC 27388.1 (a)(2);recorded concurrently"in connection with"a transfer of real property that is a residential dwelling to an owner-occupier. ❑ Exempt from fee per GC 27388.1 (a)(1);fee ccp of$225.00 reached. ❑ Exempt from the fee per GC 27388.1 (a)(1);not related to real property. ® Exempt from fee per GC 27388.1 (a)(2);dor�ment is executed or recorded by the federal government in accordance with the Uniform Federal Lien Registration Act(Title 7(commencing with section 2100)of Part 4 of the Code of Civil Procedure). MAIL TAX STATEMENTS TO THE RETURN ADDRESS NOTED ABOVE THIS COVER SHEET ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) DOC#2021-0071156 Page 2 of 15 Freddie Mac Loan Number: 508318378 Property Name: Martin Luther King Square SUBORDINATION AGREEMENT-REGULATORY AGUEEMENT ONLY GOVERNMENTAL ENTITY (NO SUBORDINATE DEBT) (Revised 1-29-2018) THIS SUBORDINATION AGREEMENT FOR REGULATORY AGI, ,,EMENT ("Agreement")is effective as of the 29`h day of April,2021 by the CITY OF FRESNO, in its capacity.as HOUSING SUCCESSOR to the Redevelopment Agency of the City of Fresno, (Fresno Housing Successor)and the CITY OF FRESNO, a municipal corporation(City)(the Fresno Housing Successor and the City are hereinafter,collectively,the Governmental Entity), and MARTIN.LUTHER KING SQUARE,LP,a California limited partn�zship(Borrower),for the benefit of CBRE CAPITAL MARKETS,INC., a Texas corporation(Lender). RECITALS A. Simultaneously herewith Borrower is refinsmuing a loan secumd by certain improved real property:located in the County of Fresno, State of California,as more particularly described on Exhibit A attached hereto(Property). B. Borrower has assumed certain obligations under the Owner Participation Agreement dated April 4, 2006(OPA)between the Governmental Entity and Martin Luther King Square.-LLC(Prior Owner)and recorded on title to the Property on April 28,2006 as Dociuylent:No. 2006-0090189 in the Fresno County, California.Official Records (Official Records),and the Declaration of Restrictions,dated April 28,2006(Declaration)between the Governmental Entity and Prior Owner and recorded on title to the Property on April 28,2006 as Document No. 2006-0090190 in the Official Record: (the OPA and the Declaration are hereinafter collectively the Regulatory Agreement)pursuant to which the Property was subjected to certain restrictions by Governmental Entity in connection with the prior development or rehabilitation of the Property. C. In connection with the refinancing of the loan secured by the Property by Borrower, Lender is making a Ioan to Borrower in the original principal amount of$7,447,000.00 (Loan)pursuant to a Multifamily Loan and Security Agreement between Lender and Borrower(as supplemented or amended from time to time,the Loan Agreement) and evidenced by a Multifamily Note by Borrower to Lender(as supplemented or amended from time to time,the Note). The Loan is to be secured by a Multifamily Deed of Trust, Assignment of Rents and Security Agreement that will be recorded among the Official Records(as supplemented or amended from time to time,the Mortgage)(the Loan Agreement,the Note and the Mortgage,together with all other documents executed with respect to the Loan, are hereinafter collectively referred to as the Loan Documents). Subordination Agreement—Regulatory Agreement Only Page 2 the Mortgage, together with all other documents executed with respect to the Loan, are hereinafter collectively referred to as the Loan Documents). D, As a condition to making the Loan, Lender requires that the Loan Documents be a lien on the Property superior to the lien of the Regulatory Agreement and that the rights of Lender under the Loan Documents be superior to the rights of Governmental Entity and Borrower under the Regulatory Agreement. Lender will not make the Loan unless Governmental Entity and Borrower agree to subordinate their rights and obligations under the Regulatory Agreement. E. Borrower and Governmental Entity hereby agree to subordinate the Regulatory Agreement on and subject to the terms, conditions and requirements set forth in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Recitals. The foregoing Recitals are hereby incorporated into this Agreement as agreements among the parties. 2. Subordination. The Governmental Entity hereby covenants and agrees that the Regulatory Agreement is and will at all times continue to be, subordinate, subject and inferior to the rights of Lender under the Loan Documents and that the liens, rights (including approval and consent rights), remedies, payment interests, priority interests, and security interests granted to Governmental Entity pursuant to or in connection with the Regulatory Agreement are hereby expressly acknowledged to be in all respects and at all times, subject, subordinate and inferior in all respects to the liens, rights (including approval and consent rights), remedies, payment, priority and security interests granted to Lender pursuant to the Loan Documents and the terms, covenants, conditions, operations and effects thereof. Notwithstanding the above, Governmental Entity may exercise the remedies of specific performance or injunctive relief. 3. Financing, Encumbrance and Transfer Approval. Governmental Entity hereby approves the financing evidenced by the Mortgage. Governmental Entity further agrees that any transfer of the Property in connection with foreclosure or deed in lieu thereof will not require Governmental Entity's consent. 4. Reserved. 5. Lender Notice of Default. In consideration of Governmental Entity's agreements contained in this Agreement, Lender agrees that in the event of any default by Borrower under the Loan Documents, Governmental Entity will be entitled to receive a copy of any notice of default given by Lender to Borrower under the Loan Documents. Neither the giving nor the failure to give a notice to Governmental Entity pursuant to this Section 5 will affect the validity of any notice. given by Lender to the Borrower. Subordination Agreement—Regulatory Agreement Only Page 3 6 Governmental Entity Notice of Default. Governmental Entity must give Lender a concurrent copy of each material notice (including without limitation each notice of default) given by Governmental Entity under or with respect to the Regulatory Agreement, and agrees that Lender, at Lender's sole election, will have the right (but not the obligation) to cure any default by Borrower under the Regulatory Agreement on its and/or Borrower's behalf. Governmental Entity hereby represents and warrants that, to the best of its knowledge, there is no current default under the Regulatory Agreement. 7. Governmental Entity's Rights. Except as set forth in Sections 2 and 8 of this Agreement, nothing in this Agreement is intended to abridge or adversely affect any right or obligation of Borrower and/or Governmental Entity, respectively, under the Regulatory Agreement; provided that, (A) the Regulatory Agreement may not be modified, amended, changed or altered without the prior written consent of Lender so long as the Loan is secured by the Property and (B) for so long as the Loan is secured by the Property, notwithstanding the terms of the Regulatory Agreement to the contrary, neither Borrower nor Governmental Entity will, without Lender's prior written consent, exercise or seek any right or remedy under the Regulatory Agreement or available at law or in equity which will or could result in (i) a transfer of possession of the Property or the control, operations or management thereof, (ii) collection or possession of rents or revenues from or with respect to the Property by any party other than Borrower or Lender; (iii) appointment of a receiver for the Property; (iv) application of insurance or condemnation proceeds other than as approved by Lender pursuant to the Loan Documents; (v) removal or replacement of the existing property manager of the Property; or (vi) a material adverse effect on Lender's security for the Loan. 8. Foreclosure by Lender. In the event of foreclosure, deed in lieu of foreclosure, or similar disposition of the Property by Lender, no consent will be required from Governmental Entity. 9. Refinancing. Governmental Entity agrees that its agreement to subordinate hereunder will extend to any new mortgage debt which is for the purpose of refinancing all or any part of the indebtedness evidenced by the Loan Documents (including reasonable and necessary costs associated with the closing and/or the refinancing, and any reasonable increase in proceeds for rehabilitation in the context of a preservation transaction). All terms and covenants of this Agreement will inure to the benefit of any holder of any such refinanced debt, and all references to the Loan Documents and Lender will mean, respectively, the refinance loan documents and the holder of such refinanced debt. 10. Miscellaneous Provisions. (a) This Agreement represents the entire understanding and agreement between the parties with regard to the matters addressed herein, and will supersede and cancel any prior agreements with regard to such matters. Subordination Agreement—Regulatory Agreement Only Page 4 (b) If there is any conflict or inconsistency between the terms of the Regulatory Agreement and the terms of this Agreement, then the terms of this Agreement will control. (c) This Agreement will be binding upon and will inure to the benefit of the respective legal successors and permitted assigns of the parties to this Agreement, which will include with regard to the Governmental Entity any permitted successor or assign of the Governmental Entity under or pursuant to the terms of the Regulatory Agreement and, with regard to Lender, any subsequent holder of the Note. No other party will be entitled to any benefits hereunder, whether as a third-party beneficiary or otherwise. (d) If any one or more of the provisions contained in this Agreement, or any application of any such provisions, is invalid, illegal, or unenforceable in any respect, the validity, legality, enforceability, and application of the remaining provisions contained in this Agreement will not in any way be affected or impaired. (e) Each notice, request, demand, consent, approval or other communication (collectively, Notices, and singly, a Notice) which is required or permitted to be given pursuant to this Agreement will be in writing and will be deemed to have been duly and sufficiently given if (i) personally delivered with proof of delivery (any Notice so delivered will be deemed to have been received at the time so delivered), or (ii) sent by a national overnight courier service (such as FedEx) designating earliest available delivery (any Notice so delivered will be deemed to have been received on the next Business Day following receipt by the courier), or (iii) sent by United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any Notice so sent will be deemed to have been received on the date of delivery as confirmed by the return receipt), addressed to the respective parties as follows.- If to Governmental Entity: City of Fresno Housing and Community Development Division 2600 Fresno Street, Room 3065 Fresno, California 93721 Attention: AWW qc,,(- Fresno Housing Successor 848 M Street Third Floor Fresno, CA 93721 Attention., If to Lender: CBRE Capital Markets, Inc. c/o CBRE Loan Services, Inc., Subordination Agreement—Regulatory Agreement Only Page 5 929 Gessner Road, Suite 1700, Houston, Texas 77024 Attention: Chief Legal Officer If to Borrower: Martin Luther King Square, LP 1990 N. California Boulevard #1070 Walnut Creek, California 94596 Attention: Basil Rallis Any party, by Notice given pursuant to this Section, may change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses, for its Notices, but Notice of a change of address will only be effective upon receipt. Neither party will refuse or reject delivery of any Notice given in accordance with this Section. (f) Each of the parties will, whenever and as often as they are requested to do so by the other, execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such further instruments and documents as may be reasonably necessary to carry out the intent and purpose of this Agreement, and to do any and all further acts reasonably necessary to carry out the intent and purpose of this Agreement. (g) This Agreement will be governed by the laws of the State in which the Property is located. (h) Each person executing this Agreement on behalf of a party hereto represents and warrants that such person is duly and validly authorized to do so on behalf of such party with full right and authority to execute this Agreement and to bind such party with respect to all of its obligations under this Agreement. (i) No failure or delay on the part of any party to this Agreement in exercising any right, power, or remedy under this Agreement will operate as a waiver of such right, power, or remedy, nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise of such right, power, or remedy or the exercise of any other right, power or remedy under this Agreement, Q) Each party to this Agreement acknowledges that if any party fails to comply with its obligations under this Agreement, the other parties will have all rights available at law and in equity, including the right to obtain specific performance of the obligations of such defaulting party and injunctive relief. (k) This Agreement may be assigned at any time by Lender to any subsequent holder of the Note. Subordination Agreement—Regulatory Agreement Only Page 6 (1) This Agreement may be amended, changed, modified, altered or terminated only by a written instrument signed by the parties to this Agreement or their successors or assigns. (m) This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. (n) Nothing in this Agreement is intended, nor will it be construed, to in any way limit the exercise by Governmental Entity of its governmental powers (including police, regulatory and taxing powers) with respect to Borrower or the Property to the same extent as if it were not a party to this Agreement or the transactions contemplated by this Agreement. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE REGULATORY AGREEMENT BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF THE MORTGAGE. [SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOW] Subordination Agreement—Regulatory Agreement Only Page 7 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year above written. GOVERNMENTAL ENTITY CITY OF FRESNO, a Californi unici al corporation By: Date: Name: Thoma s ue Title: City Ma a (Attach notarkq ifi&e of acknowledgment) APPROVED AS TO FORM: DOUGLAS T. SLOAN City Itorney 2vCQ Date: 7 g 3 ' J-/ e: Trac P ry nian Title: Senior DeWy City Attorney ATTEST: YVONNE SPENCE, MMC City Clerk By: - W)l Date: W/u, 'Lo tit Name: f4wx, [ [�r�t-�•� T Title: Deputy Subordination Agreement—Regulatory Agreement Only Page 8 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or j validity of that document. State of California County of Fresno On April 23, 2021 before me, Linda Cunha Reitz, Notary Public (insert name and title of the officer) personally appeared Thomas Esqueda who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. LINDA CUNHA REITZ Notary Public-California WITNESS my hand and official seal. 3 w Fresno County Commission aY 2215504 v irrvaK • My Comm.Expires Sep 23,2021 Signature j (Seas) CLERK'S CERTIFICATION A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document State of California } County of Fresno } On April 26, 2021 before me, Marco Martinez. Deputy City Clerk, personally appeared, Thomas Esqueda, City Manager, City of Fresno, who proved to me on the basis of satisfactory evidence, to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal YVONNE SPENCE, MMC CRM City Clerk, City of Fresno °F * �o a d �yArea acY.tia By Marco Martinez, Deputy GOVERNMENTAL ENTITY CITY OF FRESNO in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno By: Date: L-2__ Name:Marlene Murphey Title: Executive Director (Attach notary certificate of acknowledgment) APPROVED AS TO FORM: DOUGLAS T. SLOAN City Attorney C/ By: aA41 POA V Date: Name: racv P anian Title: Senior ❑eVuty City Attorney ATTEST: YVONNE SPENCE, MMC City Clerk By: Date: Name: Title: Deputy Subordination Agreement—Regulatory Agreement Only Page 10 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the trUthl"U[ness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss: COUNTY OF On thisO day of Qt �L-. , 2021 before me, Notary Public, personally appeared Q r , who, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed in the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. a°y Pi HARTZ Notary z Fresno County > Commission#2215603 Y7 My Comm.Expires Sep 23,2021 k;iIIIIA nival here) Signature of Notary Public Subordination Agreement—Regulatory Agreement Only Page 11 CLERK'S CERTIFICATION A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document,to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document State of California } County of Fresno } On April 26, 2021 before me, Marco Martinez, Deputy City Clerk, personally appeared, Marlene Murphey, Executive Director, City of Fresno as Housing Successor to the Redevelopment Agency of the City of Fresno who proved to me on the basis of satisfactory evidence, to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal YVONNE SPENCE, MMC CRM City Clerk, City of Fresno n ��"rrn oss.*s w By Marco Martinez, Deputy BORROWER: MARTIN LUTHER KING SQUARE,LP a California limited partnership By: Hearthstone Housing undation a California Nonprof corporation Managing Gener er By: Name: Title: xecuti irector By: Bayside Multi, LLC a Delaware limited liability company Administrative General partner By: Bayside Communities, LLC a Delaware limited liability company By: Name: Title: Subordination Agreement—Regulatory Agreement Only Page 12 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Orange ) On 4/6/2021 before me, Ashley Walker, Notary Public (insert name and title of the officer) personally appeared Socorro Vasquez who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. rsHQV wALKet moray"k-CJIMorMa cunmr° N vrrz I comet.E Gc Q.202, 'Signature (Seal) Subordination Agreement—Regulatory Agreement Only Page 13 BORROWER: MARTIN LUTHER KING SQUARE,LP a California limited partnership By: Hearthstone Housing Foundation a California Nonprofit corporation Managing General partner By: Name: Title: By: Bayside Multi,LLC a Delaware limited liability company Administrative General partner By: Bayside Communities, LLC a Delaware ' nited 1' ' ity com y By: Name: a it P.Nilis Title: President& SOD Subordination Agreement—Regulatory Agreement Only Page' A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validLtX of that document. STATE OF CALIFORNIA ) ss: COUNTY OF On this day of aqwcd , 2021 before me,41, CJ� a - Notary Public, personally apgeared . t5i'LQ L!� , w v proved to on the basis of satisfactory evidence to be the person whose name is subscribed in the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. H,oRTEGA-ANAVAT NotaryPublic-California YYl � m 1C Alameda County YY 1 Commission N 2212498 My Comm.Expires Sep 2,2111 - (affix seal here) Si na NNE No u is Subordination Agreement—Regulatory Agreement Only Page 0 LENDER CBRE CAPITAL MARKETS,INC., a Texas corporation By: Name: Title: Melissa Majewsltl Vice President ACKNOWLEDGMENT STATE OF TEXAS ) COUNTY OF HARP-IS ) This instrument was acknowledged before me this 7 da of APRIL 2021, by MELISSA MAJEWSKI the VICE F ll - T of CB Capital Markets,Inc.,a Texas corporation,on behalf of t e c a i r r GAB CHAAMAINE LEE Signa re of atary SA !::Notary Public,State of Texas Comm,Expires 11-07-9023'+. °;,,,'+•`'' Notary ID 1322438.92 Nota 'Public HARRIS COUNTY Title My Commission expires: 11/07/2023 �tr F�es= Subordination Agreement—Regulatory Agreement Only Page ly EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA,AND IS DESCRIBED AS FOLLOWS: PARCEL I: PARCEL D, AS SHOWN ON THAT CERTAIN PARCEL MAP 72-36 FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF FRESNO, STATE OF CALIFORNIA, ON AUGUST 8, 1972, IN BOOK 4 OF PARCEL MAPS PAGE(S) 10 AND I 1 AND AS PER CERTIFICATE OF CORRECTION RECORDED MAY 9, 1973 IN BOOK 6162, PAGE 550 OF OFFICIAL RECORDS. PARCEL 2: PARCEL B, AS SHOWN ON THAT CERTAIN PARCEL MAP NO. 71-39 FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF FRESNO, STATE OF CALIFORNIA ON DUNE 27, 1972 IN BOOK 3 OF PARCEL MAPS AT PAGE 86. PARCEL 3: PARCEL A, AS SHOWN ON THAT CERTAIN PARCEL MAP NO. 71-39 FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF FRESNO, STATE OF CALIFORNIA ON JUNE 27, 1972, IN BOOK 3 OF PARCEL MAPS AT PAGE 86. APN: 478-030-54 and 478-114-38 \%r Subordination Agreement—Regulatory Agreement Only Page 16