HomeMy WebLinkAboutCFNT Holding LLC - Grant Agrmnt - 11-1-2022STATE AND LOCAL FISCAL RECOVERY FUNDS
(PART OF THE AMERICAN RESCUE PLAN)
GRANT AGREEMENT
FOR CREATION OF A MIXED INCOME NEIGHBORHOOD TRUST
This State and Local Fiscal Recovery Funds Agreement (Agreement) is entered into
on November _1_, 2022, by and between the City of Fresno, a municipal corporation,
(CITY), and CFNT Holdings LLC, a California limited liability company (CFNT).
RECITALS
A. WHEREAS, the CITY has received State and Local Fiscal Recovery Funds
(SLFRF) from the U.S. Department of the Treasury under the American Rescue Plan Act
(Pub.L. 117-2) (Act) and is subject to any constraints set forth therein including but not
limited to, the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Final Rule (31
CFR Part 35).
B. WHEREAS, the City has elected to use a portion of the SLFRF allocation to
support the COVID-19 Public Health and Economic Response to address impact on
households by using funds to support affordable housing development, an eligible use of
funds under the Act.
C. WHEREAS, the Project, as defined below, serves the intent of the SLFRF
Program by selecting households that meet the qualifications of the U.S Department of
Housing and Urban Development, HOME Investment Partnerships Program.
D. WHEREAS, 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.
E. WHEREAS, CFNT desires to act as the owner/developer/operator exercising
effective P roject control, as to the acquisition/rehabilitation of mixed -income units
assisted with SLFRF and preserved as Low- to Moderate -Income rental housing, as
defined by the SLFRF Program, and related on -site and off -site improvements as more
particularly described in EXHIBIT "A" — Project Description and Schedule, incorporated
herein (Project).
F. WHEREAS, CFNT will acquire and rehabilitate units upon SLFRF Program -
eligible Property (Property) to be owned by CFNT.
G. WHEREAS, due to the needs of the local rental market, and the severe under
production of homes for families of low and moderate -income, the community as a whole is
negatively impacted such that an income restriction of up to 80% of annual median income
is justified in Fresno.
H. WHEREAS, to further its goal to increase the supply of Affordable Housing
within the City of Fresno, the CITY desires to assist CFNT by providing a One Million Nine
Hundred Fifty Thousand Dollars and 00/100 ($1,950,000.00) SLFRF Program Grant to the
Project (Grant) upon the terms and conditions in this Agreement.
I. WHEREAS, the CITY has determined that this Agreement is in the best
interest 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
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neighborhood and surrounding environs, (ii) is in the vital and best interest 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- to Moderate -Income Housing available at an affordable cost to
Low- to Moderate -Income household, as defined hereunder, (v) planning and
administrative expenses incurred in pursuit hereof are necessary for the production,
improvement, or preservation of Low- to Moderate -Income Housing, and (vi) will comply
with any and all owner participation rules and criteria applicable thereto.
J. WHEREAS, the CITY and CFNT have determined that CFNT activities
constitute routine programmatic/grantee activities utilizing available and allocated
program/grantee funding, outside the reach of the California Constitution Article XXXIV and
enabling legislation.
K. WHEREAS, the parties acknowledge and agree that the obligations and
liabilities of CFNT hereunder shall be joint and several unless and except to any extent
expressly provided otherwise.
L. WHEREAS, on October 28, 2022, CFNT's Board reviewed and approved the
Project and SLFRF Application for funding.
NOW, THEREFORE, IN CONSIDERATION of the above recitals, which recitals are
contractual in nature, the mutual promises herein contained, and for other good and
valuable consideration hereby acknowledge, the parties agree as follows:
ARTICLE 1. DEFINITIONS
The following terms have the meaning and content set forth in this Article wherever used in
this Agreement, attached exhibits or attachments that are incorporated into this Agreement
by reference.
1.1 Acquisition isition means vesting of the Property in fee title to CFNT.
1.2 Affirmative Marketer means a good faith effort to attract eligible persons of
all racial, ethnic and gender groups, in the Central Fresno housing market area, to rent the
proposed Housing Units proposed for construction on the eligible Property, as hereinafter
defined.
1.3 Affordability Period means the minimum period of 55 years from the date of
execution of this Agreement
1.4 Affordable Housing or Affordable Rental Housing means all the 50 Units
required to meet the affordability requirements of the SLFRF for 55 years.
1.5 Certificate of Completion means that certificate issued, in a form substantially
similar to that attached as EXHIBIT "B" (Exemplar Certificate of Completion), to CFNT by
the CITY evidencing completion of a Project property and a release of related covenants
for the purposes of the Agreement.
1.6 CFR means the Code of Federal Regulations.
1.7 Completion Date means the date the City issues a recorded Certificate of
Completion for Project property. The Completion of the Project is identified in EXHIBIT "B
1.8 Declaration of Restrictions means the Declaration of Restrictions in the form
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attached hereto as Exhibit "C", which contains the affordability covenants and income level
restrictions of this Agreement which shall run with the land and which the GRANTEE shall
record or cause to be recorded against the Project Property at the close of Escrow.
1.9 Eligible Costs means the SLFRF eligible acquisition/rehabilitation costs
funded by the Grant allowable under SLFRF regulations, however, costs incurred in
connection with any activity that is determined to be ineligible under the SLFRF shall not
constitute Eligible Costs.
1.10 Event of Default shall have the meaning assigned to such term under Section
10.1 hereunder.
1.11 Family has the same meaning given that term in 24 CFR 5.403.
1.12 Federal SLFRF Funds (also referred to in this Agreement as "SLFRF Funds"
or "Funds") means the federal SLFRF monies consisting of the Grant, in an amount not to
exceed the sum of One Million Nine Hundred Fifty Thousand Dollars and 00/100
($1,950,000.00) to be used for eligible Project rehabilitation/construction costs.
1.13 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.
1.14 Household means the group of persons occupying a given SLFRF-Assisted
Unit within the Project.
1.15 HUD means the United States Department of Housing and Urban
Development.
1.16 Low- to Moderate -Income Households are those with (i) income at or below
300% of the Federal Poverty Guidelines for the size of the household based on the most
recently published poverty guidelines or (ii) income at or below 65 to 80% of the area
median income for the county and size of household based on the most recently published
data.
1.17 Project means the acquisition, rehabilitation, and leasing of 50 affordable
housing units to be preserved as Affordable Rental Housing.
1.18 Project Schedule means the schedule for commencement and completion of
the Project included in EXHIBIT "A".
1.19 Property or Project Property means the properties to be acquired by CFNT
and owned and operated by CFNT.
1.20 Unit, Project Unit, or Affordable Units means one or more of the 50 SLFRF-
assisted Units to be acquired/rehabilitated upon eligible Property and preserved as
Affordable Housing Units for the duration of the 55-year Affordability Period.
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1.21 U.S. Department of Treasury means the United States Department of
Treasury.
ARTICLE 2. TERMS OF THE GRANT
2.1 Grant of SLFRF Funds. The CITY agrees to provide a Grant of SLFRF
Funds to CFNT, in an amount not to exceed One Million Nine Hundred Fifty Thousand
Dollars and 00/100 ($1,950,000.00), all under the terms and conditions provided in this
Agreement. The SLFRF Funds shall be used for payment of eligible
acquisition/rehabilitation costs.
2.2 Term of Agreement. This Agreement is effective upon the date of full
execution and shall remain in force with respect to the Project for the duration of the
Affordability Period unless earlier terminated as provided herein. After the 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, the CITY agrees to record a Notice of Cancellation
regarding this Agreement upon the written request of CFNT.
2.3 Incorporation of Documents. If applicable, the CITY Council approved
minutes approving this Agreement, the Grant Documents, the SLFRF regulations 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.
2.4 Covenants of CFNT. CFNT for itself and its agents/assigns covenants and
agrees to comply with all the terms and conditions of this Agreement and the requirements
of the SLFRF, as amended.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF CFNT
3.1 Existence and Qualification. CFNT represents and warrants to the CITY as of
the date hereof, that CFNT is a duly organized California limited liability company in good
standing with the State of California; CFNT has the requisite power, right, and legal
authority to execute, deliver, and perform its obligations under the 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 CFNT [is] enforceable against CFNT 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. CFNT represents and warrants
to the CITY 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 CFNT's knowledge, is any such litigation or
proceeding now threatened, or anticipated against CFNT that, if adversely determined,
would have a material adverse effect on the financial condition, business, or assets of
CFNT or on the operation of the Project.
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3.3 No Conflict of Interest. CFNT represents and warrants to the CITY as of
the date hereof that no officer, agent, or employee of the CITY directly or indirectly owns or
controls any interest in CFNT, and no person, directly or indirectly owning or controlling any
interest in CFNT, is an official, officer, agent, or employee of the CITY.
3.4 No Legal Bar. CFNT represents and warrants to the CITY, as of the date
hereof that the execution, delivery, performance, or observance by CFNT of this
Agreement will not, to the best of CFNT's knowledge, materially violate or contravene any
provisions of: (a) any existing law or regulation, or any order of decree of any court, -
governmental authority, bureau, or agency; (b) governing documents and instruments of
CFNT; or (c) any mortgage, indenture, security agreement, contract, undertaking, or other
agreement or instrument to which CFNT is a party or that is binding on any of its properties
or assets, the result of which would materially or substantially impair CFNT's ability to
perform and discharge its obligations or its ability to complete the Project under this
Agreement.
3.5 No Violation of Law. CFNT represents and warrants to the CITY as of the date
hereof that, to the best of CFNT's knowledge, this Agreement and the operation of the
Project as contemplated by CFNT, do not violate any existing federal, State, or local laws
of regulations.
3.6 No Litigation Material to Project. CFNT represents and warrants to the CITY
as of the date hereof, except as disclosed to, and approved by the CITY in writing, there is
no action, proceeding, or investigation now pending, or any basis therefor known or
believed to exist by CFNT that questions the validity of this Agreement, or of any action to
be taken under this Agreement, that would, if adversely determined, materially or
substantially impair CFNT's ability to perform and observe its obligations under this
Agreement, or that would either directly or indirectly have an adverse effect or impair the
completion of the Project.
3.7 Assurance of Governmental Approvals and Licenses. CFNT represents and
warrants to the CITY, as of the date hereof, that CFNT has obtained and, to the best of the
CFNT's knowledge, is in compliance with all federal, State, and local governmental
reviews, consents, authorizations, approvals, and licenses presently required by law to be
obtained by CFNT for the Project as of the date hereof.
ARTICLE 4. WARRANTIES AND COVENANTS OF CFNT
CFNT, for itself and its development team covenants and warrants that:
4.1 Affirmative Marketing. CFNT warrants, covenants and agrees with the CITY
that it shall comply with all affirmative marketing requirements, including without limitation,
those set out at 24 CFR 92.350 and 92.351, in order to provide information and otherwise
attract eligible persons from all racial, ethnic and gender groups in the Central Fresno
housing market in the rental of the Project Units. CFNT shall maintain records of actions
taken to affirmatively market units acquired/rehabilitated in the future, and to assess the
results of these actions.
4.2 Availability of SLFRF Funds. CFNT understands and agrees that the
availability of SLFRF Funds is subject to the control of the Department of the Treasury, or
other federal agencies, and should said Funds be encumbered, withdrawn or otherwise
made unavailable to the CITY, whether earned by or promised to CFNT, and/or should the
CITY in any fiscal year hereunder fail to allocate said Funds, the CITY shall not provide
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said Funds unless and until they are made available for payment to the CITY by the
Department of the Treasury and the CITY receives and allocates said Funds. No other
funds owned or controlled by the CITY shall be obligated under this Agreement.
4.3 Compliance with Agreement. CFNT warrants, covenants and agrees that, in
accordance with the requirements of the SLFRF Act, upon any uncured default by CFNT
within the meaning of Article 10.1 of this Agreement, the CITY may suspend or terminate
this Agreement and all other agreements with CFNT without waiver or limitation of
rights/remedies otherwise available to the CITY.
4.4 Conflict of Interest. CFNT warrants, covenants and agrees that it shall
comply with the Conflict -of -Interest requirements including, without limitation, that no
officer, employee, agent, or consultant of CFNT, unless otherwise explicitly provided
herein, may occupy a Project Unit. CFNT understands and acknowledges that no
employee, agent, consultant, officer or elected official or appointed official of the CITY, who
exercises any functions or responsibilities with respect to the Project, or who is in a position
to participate in a decision making process or gain inside information with regard to these
activities, may obtain a financial interest or benefit from the Project, or have an interest in
any contract, subcontract or agreement with respect thereto, or the proceeds thereunder,
either for him or herself or for anyone with which that person has family or business ties,
during his or her tenure or for one year thereafter.
A. Notwithstanding the restrictions outlined in Section 4.4, occupants of a
Project Unit serving as members of CFNT's governing bodies (including its board of
managers and the stewardship committee governing any trust holding CFNT's Class
A membership interest) may, on a case by case basis, be exempt from Conflict of
Interest requirements, provided that these individuals do not comprise a majority of
their respective governing body.
B. Notwithstanding the restrictions outlined in Section 4.4, CFNT may
request limited exemption from Conflict -of -Interest requirements for Project Unit
occupants desiring to perform specific tasks in advancement of the Project.
Approvals of such requests shall be addressed promptly and shall not be
unreasonably withheld.
4.5 Covenants and Restrictions to Run with the Land. The CITY and CFNT
expressly warrant, covenant and agree to ensure that the covenants and restrictions set
forth in this Agreement are recorded and will run with the land, provided, however, that, on
expiration of this Agreement such covenants and restrictions shall expire.
A. The CITY and CFNT hereby declare their understanding and intent
that the covenants and restrictions set forth herein directly benefit the land by: (a)
enhancing and increasing the enjoyment and occupancy of the proposed Project by
a certain Low- to Moderate -Income Households, and (b) making possible the
obtaining of advantageous financing for acquisition/rehabilitation. CFNT covenants
and agrees with the CITY that after issuance of a recorded Certification of
Completion for the Project until the expiration of the Affordability Period it shall
cause all Affordable Units to be rented as Affordable Housing for Low- to
Moderate -Income H ouseholds.
B. Without waiver or limitation, the CITY shall be entitled to injunctive
or other equitable relief against any violation or attempted violation of any covenants
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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.
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. Notwithstanding the foregoing, CFNT may request exemption from this
clause if property sales are necessary to cover debt service, fund repairs, or
otherwise provide for support of CFNT's operation as a going concern.
C. 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.
4.6 Displacement of Persons. CFNT covenants and agrees with the CITY that
pursuant to 24 CFR 92.353, it will take reasonable steps to minimize the displacement of
any persons (families, individuals, businesses, nonprofit organizations and farms).
4.7 Initial and Annual Income Certification and Retorting. CFNT covenants and
agrees with the CITY that it shall comply with the procedures for annual income
determination. CFNT, shall obtain, complete and maintain on file, immediately prior to
initial occupancy, and annually thereafter, income certifications from the Project Unit
Household members. CFNT 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 three most recent pay periods; (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; (4) obtain income tax return for the most recent
year; (5) if the applicant is unemployed and/or does not have the ability to provide (1)
through (4), obtain another form of independent verification. Copies of Household income
certification and verification must be available for review and approval by the CITY prior to
initial lease up. CFNT further warrants, covenants and agrees that it will cooperate with the
CITY in the CITY's income certification/affordability monitoring activities, provided such
activities are not unreasonably burdensome on CFNT's operations.
4.8 Lead -Based Paint. CFNT 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 amendment thereto, and Environmental Protection Agency (EPA)
Section 402 (c)(3) of the Toxic Substances Control Act (TSCA) to address lead -based
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
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and common areas of the Project. CFNT 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. CFNT shall be responsible for all disclosure, inspection, testing,
evaluation, and control and abatement activities.
4.9 Minority Outreach Activities. CFNT 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 CFNT comply with the CITY's
minority outreach program.
4.10 Other Laws and Regulations. CFNT covenants and agrees with the CITY
that, in addition to complying with the federal laws and regulations already cited in this
Agreement, CFNT has reviewed, and shall comply with and require all its contractors and
subcontractors on the Project to comply with, all other federal laws and regulations that
apply to the SLFRF, including, without limitation, requirements of the Act (Pub.L. 117-2),
CSLFRF Final Rule (31 CFR Part 35), 24 CFR 58.6 and the Flood Disaster Protection Act
of 1973, as amended (42 U.S.C. 4001-4128) and the following:
A. CFNT 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 land
acquisition and rehabilitation costs of the Project. The Project is not located in a tract
identified by the Federal Emergency Management Agency as having special flood
requirements.
B. The property standards at 24 CFR 92.251.
C. The Project "Labor" requirements, as applicable, of 24 C.F.R. 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 CFR Part 5). The provisions
of Section 102 and 107 of the Contract Work Hours and Safety Standards Act (40
U.S.C. 327-333), as applicable as supplemented by Department of Labor
Regulations (29 CFR Part 5), in regards to the construction and management of the
proposed Project. CFNT 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 E.O. 11246 Relating to Equal Employment Opportunity), and as
supplemented by regulations at 41 CFR chapter 60, "Office of Federal Contract
Compliance Programs, Equal Employment Opportunity, Department of Labor".
D. 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").
E. 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.
F. The provisions of the Byrd Anti -Lobbying Amendment (31 U.S.C.
1352).
G. The provision of E.O.s 12549 and 12689, "Debarment and
Suspension," as set forth at 24 CFR part 24.
H. 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.
Title 8 of the Civil Rights Act of 1968 PL. 90-284.
J. E.O. 11063 on Equal Opportunity and Housing.
K. Section 3 of the Housing and Urban Development Act of 1968.
L. The Housing and Community Development Act of 1974.
M. Clean Water Requirements 33 U.S.C. 1251.
N. Civil Rights Requirements, 29 U.S.C. 623, 42 U.S.C. 2000, 42 U.S.C.
6102, 42 U.S.0 12112, 42 U.S.C. 12132, 49 U.S.0 5332, 29 C.F.R. Part 1630, 41
C.F.R. and Part 60 et seq.
O. Recipients of SLFRF Funds shall comply with 2 CFR Part 200, Office
of Management and Budget's (OMB) Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (commonly called the
`Uniform Guidance').
P. Violence Against Women Act (VAWA), 24 CFR 92.359 and 24 CFR
92.504(c)(3)(v)(F), including but not limited to notice requirements, obligations under
emergency transfer plan, bifurcation of lease requirements, imposition of
requirements for the duration of the period of affordability, and inclusion of VAWA
lease addendum requirements.
Q. CFNT shall comply with broadband infrastructure requirements for new
housing and rehabilitation projects as set forth in 24 CRF 92.251.
4.11 Faith Based Activities. CFNT warrants, covenants and agrees with the CITY
that it shall not engage in any prohibited activities described in 24 CFR 92.257.
4.12 Reporting Requirements. CFNT warrants, covenants and agrees with the
CITY that it shall submit performance reports to the CITY as detailed in Section 7.17.
Furthermore, CFNT agrees to provide, at the sole cost of CFNT, an annual audited
Financial Statement for the Project expenses and ongoing financial transactions which
occur as a result of this Agreement as detailed in Section 5.6. CFNT agrees to account for
the expenditure of SLFRF Funds using generally accepted accounting principles, which
financial documentation shall be made available to the CITY upon written request(s).
Recipients of SLFRF Funds shall comply with 2 CFR Part 200, Office of Management and
Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (commonly called the "Uniform Guidance").
4.13 Housing Affordability. CFNT covenants and agrees with the CITY that all
Affordable Units will be rented to Low- to Moderate -Income Households 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 CFNT fails to comply with this
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Section or the Affordability Period is not revived following transfer by foreclosure or transfer
in lieu of foreclosure, CFNT shall receive no further reimbursements from the City.
4.14 Terminated Projects. CFNT understands and agrees that, if the Project is
terminated before completion, either voluntarily or otherwise, such constitutes an ineligible
activity, and the CITY will not be required to provide any further SLFRF assistance funding
to the Project Units.
ARTICLE 5. PROPERTY MAINTENANCE
CFNT covenants and agrees to the following, for the entire term of the Agreement.
5.1 Adequate Repair and Maintenance. CFNT during its time on title shall cause
the maintenance to the properties to be in compliance with all applicable codes, laws, and
ordinances.
5.2 Affordable Rental Housing_ CFNT covenants and agrees that the Project shall
constitute a total of fifty Units for rent be preserved as Affordable Rental Housing 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 CFNT 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 CFNT acknowledges that
damages are not adequate remedy at law for such breach.
5.3 Compliance with Environmental Laws. CFNT 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,
CFNT agrees that, if the CITY has reasonable grounds to suspect any such violation,
CFNT shall be entitled to 30 days' notice and opportunity to cure such violation, provided
that if the specified deficiency or default cannot reasonably be cured within the specified
time, CFNT shall have an additional reasonable period to cure so long as it commences
cure within the specified time and thereafter diligently pursues the cure in good faith. If
the suspected violation is not cured, the CITY shall have the right to retain an independent
consultant to inspect and test the eligible Property for such violation. If a violation is
discovered, CFNT shall pay for the reasonable cost of the independent consultant.
Additionally, CFNT 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 CFNT or its
contractors or subcontractors,
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 Project site, 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,
(ii) All claims made or threatened by any third party against CFNT,
or such properties relating to any loss or injury resulting from any hazardous
or toxic chemicals, materials, substance, or waste; and
(iii) CFNT'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 CFNT or any other party's use of release of
any hazardous or toxic chemicals, materials, substance, or waste 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
related remedial work of any kind or nature.
5.4 Compliance with Laws. CFNT shall 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.
In the absence of existing applicable State or local code requirements and
ordinances, at a minimum, CFNT shall comply with all inspectable items and inspectable
areas specified by HUD based on the HUD physical inspection procedures (24 CFR 92.2,
Uniform Physical Condition Standards (UPCS)) prescribed by HUD pursuant to 24 CFR
5.705. UPCS means uniform national standards established by HUD pursuant to 24 CFR
5.703 for housing that is decent, safe, sanitary, and in good repair. Standards are
established for inspectable items for each of the following areas: site, building exterior,
building systems, dwelling units, and common areas, but do not require the use of any
scoring, item weight, or level of criticality.
5.5 Existence. Qualification, and Authority. CFNT shall provide to the CITY any
evidence required or requested by the CITY to demonstrate the continuing existence,
qualification, and authority of CFNT to execute this Agreement and to perform the acts
necessary to carry out the Project.
5.6 Financial Statements and Audits. Annually, within 180 days following: 1) the
end of fiscal year(s) in which the SLFRF Funds are disbursed hereunder, and 2) the end of
fiscal year(s) in which this contract shall terminate, and otherwise upon the CITY's, written
request during the term of this Agreement, CFNT, at its sole cost and expense shall submit
to the CITY:
A. Audited annual financial statements with notes that are current, signed,
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and prepared according to generally accepted accounting principles consistently
applied (except as otherwise disclosed therein).
B. Audited Financial Statements with the management notes covering the
income and expenses, and the financial transactions for the Project during the prior
fiscal year.
5.7 Inspection and Audit of Books. Records and Documents. CFNT shall account
for all SLFRF Funds disbursed for the Project pursuant to this Agreement. Any duly
authorized representative of the CITY 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 CFNT
pertaining to the Project or all matters covered in this Agreement and for up to six years
after the expiration or termination of this Agreement.
A. CFNT will maintain books and records for the Project using generally
accepted accounting principles in compliance with Uniform Guidance and in
particular, 24 CFR 92.506. CFNT agrees to maintain books and records that
accurately and fully show the date, amount, purpose and payee of all expenditures
financed with SLFRF Funds and to keep all invoices, receipts and other documents
related to expenditures financed with SLFRF Funds for not less than six 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 CFNT in which case CFNT shall bear the cost of such audit. CFNT shall
also comply with any applicable audit requirements of 24 CFR 92.506. This section
shall survive the termination of this Agreement.
C. CFNT will cooperate fully with the CITY in connection with any interim
or final audit relating to 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 shall,
at all reasonable times and with 72 hours' written notice, have access and the right to
inspect the Affordable Housing until completion of the Project expiration of the applicable
Affordability Period, subject to the rights of the tenants.
5.9 Nondiscrimination. CFNT 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 CFNT shall not illegally discriminate against any persons on
account of race, religion, sex, family status, age, handicap, or place of national origin in its
performance of this Agreement and the completion of the Project.
5.10 Ownership. Except as required in pursuit hereof, CFNT shall not sell, lease,
transfer, assign or otherwise dispose (Transfer) all or any material part of any interest it
might hold in the Property or the Project without the prior written consent of the CITY,
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which consent shall not be unreasonably withheld or delayed. "Transfer" shall exclude the
leasing or renting of any single Unit in the Project.
5.11 Payment of Liabilities. CFNT 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.
5.12 Report of Events of Default. CFNT shall promptly give written notice to the
CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 6. DISBURSEMENT OF SLFRF FUNDS
Without waiver of limitation, the parties agree as follows, regarding SLFRF Funds:
6.1 Use of SLFRF Funds. CFNT warrants, covenants and agrees that it shall
request SLFRF Funds only for reimbursement of eligible acquisition and rehabilitation costs
incurred and as allowable under the SLFRF, aggregating not more than One Million Nine
Hundred Fifty Thousand Dollars and 00/100 ($1,950,000.00). The CITY's obligations shall
in no event exceed the SLFRF amount specified in this Agreement. Funds must be used to
cover costs incurred by CFNT between March 3, 2021, and December 31, 2024, and funds
must be expended by December 31, 2026. All such costs and expenditures must be
eligible for payment and in compliance with the allowable expenditures pursuant to Title 31
CFR, Part 35, including but not limited to § 35.6 subsections b 3 ii A 5 and (11),
CFNT may use Funds for only the projected cost of the Grant.
A. If any such Funds shall be determined to have been requested and/or
used by CFNT for costs other than for eligible acquisition and rehabilitation 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 CFNT
to the CITY; provided, however, that CFNT 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 SLFRF Funds are requested to reimburse Eligible Costs
which subsequently lose eligibility as Eligible Costs, the CITY shall immediately
notify CFNT of such development, and CFNT shall immediately return such SLFRF
to the CITY provided that the funds have not already been spent and are
recoverable without incurrence of substantial loss.
C. The CITY will disburse SLFRF Funds to CFNT through proper
invoicing for Eligible Costs of the Affordable Units as provided in this Article 6.
6.2 Conditions Precedent to Disbursement. The CITY shall not be obligated to
make or authorize any disbursements of SLFRF Funds unless the following conditions are
satisfied:
A. Prior to execution of this Agreement by the City, CFNT will permit CITY
staff to conduct a risk assessment, as required under the Uniform Guidance (2 CFR
200.332(b)). Failure to allow City staff to conduct this risk assessment may result in
the City terminating this Agreement. Additionally, CFNT's failure to be certified by
City staff at the end of the risk assessment as having adequate internal controls to
manage the funding provided in this agreement may result in the City terminating
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this Agreement.
B. There exists no Event of Default as provided in Article 10, nor any act,
failure, omission, or condition that with the passage of time or the giving of notice or
both would constitute an Event of Default.
C. The CITY has approved the requested reimbursement of Eligible
Costs.
D. CFNT has obtained insurance coverage and delivered to the City
evidence of insurance as required in Article 9.
E. CFNT is current with its compliance of reporting requirements set forth
in this Agreement.
F. CFNT has provided the CITY with a written request for SLFRF Funds
(provided by the CITY), for reimbursement of eligible Project construction costs, and
detailing such Eligible Costs applicable to the request.
G. The CITY has received certification required by Section 6.4 of this
Agreement.
H. The CITY has received, and continues to have the right to disburse,
SLFRF Funds.
6.3 Requests for Reimbursement of SLFRF Funds. CFNT shall request that the
CITY reimburse funds for eligible acquisition and rehabilitation cost using the CITY's
Request for Disbursement of Funds form. CFNT shall only request a maximum of One
Million Dollars ($1,00,000.00) in SLFRF assistance for reimbursement until the following
conditions are met:
A. Ten Project Units are completed.
B. Proof of Two Million Dollars ($2,000,000) in additional capital has been
raised by CFNT for the Project; for the avoidance of doubt, additional capital shall
include, without limitation, a committed guidance line from a financial institution, as
evidenced by a letter of commitment.
All requests should provide in detail such Eligible Costs applicable to the request.
After the conditions in this Section have been met, CFNT may request reimbursement for
the remaining $950,000 of the Grant. All requests for SLFRF reimbursement shall be
accompanied with the Certification required by Section 6.4 of this Agreement.
6.4 CFNT Certification. CFNT shall submit to the CITY a written certification that,
as of the date of the Request for Reimbursement (Certification):
A. The representations and warranties contained in or incorporated by
reference in this Agreement continue to be true, complete and accurate in material
respects.
B. CFNT has carried out all of its obligations and is in compliance with all
the obligations or covenants specified in this Agreement, to the extent that such
obligations or covenants are required to have been carried out or are applicable at
the time of the Request for Reimbursement; and
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C. CFNT has not committed or suffered an act, event, occurrence, or
circumstance that constitutes an Event of Default or that with the passage of time or
giving of notice or both would constitute an Event of Default; and
D. The disbursement of funds shall be used solely for reimbursement of
Eligible construction Costs identified in this Agreement and must be supported by
the itemized obligations that have been properly incurred, expended and are
properly chargeable in connection with construction of the Project.
6.5 Disbursement of Funds. The disbursement of SLFRF Program Grant Funds
shall occur within the normal course of CITY business (approximately 30 days) after the
CITY receives the Certification and Request for Reimbursement with correct supporting
documentation and to the extent of annually allocated and available SLFRF Funds.
ARTICLE 7. ACQUISITION AND REHABILITATION OF THE PROJECT
Without waiver of limitation, the parties agree as follows:
7.1 Commencement and Completion of Project. CFNT shall commence acquisition
and rehabilitation of the Project, and when a Project property is completed, record a Notice
of Completion and provide the CITY with a copy of the recordation.
7.2 Contracts and Subcontracts. Consistent with Section 5.3, all 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. CFNT shall
provide the CITY with copies of all agreements it has entered into with any and all general
contractors or subcontractors for this Project. CFNT shall require that each such general
contractor agreement contain a provision whereby the party(ies) to the agreement, agree
to: (i) notify the CITY immediately of any event of default 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 construction agreement on the Project, and (iv) provide the CITY,
upon the CITY's request, an Estoppel Certificate certifying that the agreement is in full
force and effect and CFNT is not in default thereunder. CFNT 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.
7.3 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 on the Property is damaged or destroyed by
an insurable cause, CFNT 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 occur within 90 days after the
insurance proceeds are made available to CFNT and shall be completed within two years
thereafter. All insurance proceeds collected for such damage or destruction shall be
applied to the cost of such repairs or restoration and, if such insurance proceeds shall be
insufficient for such purpose, CFNT shall use its best efforts to make up the deficiency.
7.4 Fees. Taxes and Other Levies. CFNT shall be responsible for payment of all
fees, assessments, taxes, charges, and levies imposed by any public authority or utility
company with respect to the Property or the Project and shall pay such charges prior to
delinquency. However, CFNT 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
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appropriate proceedings, and (b) if requested by the CITY, CFNT 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. CFNT 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.
7.5 Identification Si na e. Before the start of rehabilitation of a given Affordable
Unit, the City will provide CFNT with a poster or sign, with a minimum four feet by four feet
in size, identifying the City of Fresno Planning and Development Department, Housing and
Community Development Division as a Project participant. The sign shall also include the
CITY's Housing logo, as well as the Equal Housing Opportunity logo. The font size shall be
a minimum of 4 inches. The poster/sign shall be appropriately placed at the Affordable
Unit's site and shall remain in place throughout construction/rehabilitation.
7.6 Inspections. CFNT shall permit, facilitate, and require its contractors and
consultants to permit and facilitate observation and inspection at the Project sites by the
CITY and other public authorities during reasonable business hours, for the purpose of
determining compliance with this Agreement, including without limitation those annual on -
site inspections required by the CITY.
7.7 Utilities. CFNT 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.
7.8 Insurance and Bonds. CFNT shall submit for CITY approval bonds,
certificates and applicable endorsements for all insurance and bonds required by this
Agreement in accordance with Article 9.
7.9 Mechanic's Liens andStop Notices. If any claim of lien is filed against the
Property or a stop notice affecting any financing, SLFRF Program Funds or funding
sources for the Project is served on the CITY or any other third party in connection with the
Project, CFNT shall, within 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 CFNT fails to discharge, bond or otherwise satisfy the CITY with
respect to any lien, encumbrance, charge or claim referred to in Section 7.9 above,
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 CFNT's
expense. Alternatively, the CITY may require CFNT 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 CFNT. CFNT 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.
7.10 Permits and Licenses. CFNT shall submit, for CITY approval, all the
necessary permits and licenses required for commencement of acquisition and
rehabilitation. As the CITY may reasonably request, CFNT, at its sole cost and expense,
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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. CFNT is responsible at its sole cost and
expense to determine the location of any utilities on the Property and to negotiate with the
utility companies for and to relocate the utilities, if any, as necessary to complete the
Project.
7.11 Plans and Specifications. CFNT shall submit to the CITY preliminary plans
and specifications for each Project activity (Project Preliminary Plans). CFNT will
rehabilitate the Project in full conformance with the CITY -approved Development Permit
and plans and specifications and modifications thereto approved by the CITY. CFNT shall
obtain the CITY's prior written approval for any modifications to the plans and
specifications. CITY approval of such plans, specifications, and modifications shall not be
unreasonably withheld.
A. Before commencement of rehabilitation, CFNT shall submit to the
CITY, for its review and approval, the final Plans and Specifications for the Project.
CFNT will rehabilitate the Affordable Housing in full conformance with the Plans and
Specifications and modifications thereto approved by the CITY. CFNT shall obtain
the CITY's prior written approval for any modifications to the Plans and
Specifications. CITY approval of such plans, specifications, and modifications shall
not be unreasonably withheld.
7.12 Protect Responsibilities/Public Work -Prevailing Wage Requirements. CFNT
shall be solely responsible for all aspects of CFNT's conduct in connection with the Project,
including but not limited to, compliance with all applicable 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, CFNT shall be solely responsible for the quality and
suitability of the work completed and the supervision of all contracted work, qualifications,
and financial conditions of and performance of all 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
CFNT is properly discharging its obligation to the CITY and shall not be relied upon by
CFNT 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.
7.13 Property Condition. CFNT shall maintain the Units 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. CFNT and those taking direction under CFNT 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 Units free from any
17
accumulation of debris or waste material; (iv) promptly make repairs and replacements to
on -site improvements; (iv) promptly replace any dead, or diseased plants and/or
landscaping (if any) with comparable materials, and (v) enforce tenant lease terms.
7.14 Quality of Work. CFNT shall ensure that rehabilitation of the Units employs
building materials of a quality suitable for the requirements of the Project.
7.15 Relocation. If and to the extent that the construction of the proposed Project
results in the permanent or temporary displacement of residential tenants, CFNT shall
comply with all applicable local, State, and federal statutes and regulations with respect to
relocation planning, advisory assistance, and payment of monetary benefits. CFNT shall be
solely responsible for payment of any relocation benefits to any displaced persons and any
other obligations associated with complying with said relocation laws.
7.16 Reporting Requirements. CFNT shall submit to the CITY the following
Project reports:
A. From the date of execution of this Agreement, until issuance of the
final Certificate of Completion, CFNT shall submit a Quarterly Report, in a form
approved by the CITY, which will include, at a minimum, the following information:
progress of the Project and affirmative marketing efforts. The Quarterly Reports are
due 15 days after each March 31st, June 30th, September 30th, and December
31 st, during said period. Approval of such form shall not be unreasonably withheld.
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, CFNT shall submit an Annual Rent Roll Report to the CITY, in a form
approved by the CITY. The Annual Report shall include, at a minimum, the following
information: occupancy of each Project Unit including the annual income and the
household size, the date occupancy commenced, certification from an officer of
CFNT that the Project is in compliance with the Affordability requirements, and such
other information the CITY may be required by federal or state law to obtain. CFNT
shall provide any additional information reasonably requested by the CITY upon
request and at the annual monitoring of the Affordable Rental Housing.
C. Annually beginning on the first day of the month following the CITY's
issuance of the final Certificate of Completion, evidencing the completion of the
Project, and continuing until the expiration of the Agreement, CFNT shall submit
proof of property and liability insurance, as required in Article 9, listing the CITY as
loss payee.
7.17 Scheduling and Extension of Time; Unavoidable Delay in Performance. It
shall be the responsibility of CFNT to coordinate and schedule the work to be performed so
that the commencement of the rehabilitation and issuance of the Notice of Completion will
take place in accordance with the provisions of the Agreement and Project Schedule. The
time for performance contained in the Project Schedule shall be automatically extended
upon the following:
A. The time for performance of provisions of the Agreement by either
party shall be extended for a period equal to the period of any delay directly affecting
the Project or this Agreement which is caused by: war, insurrection, strike or other
labor disputes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God,
acts of a public enemy, epidemics and pandemics, quarantine restrictions, freight
embargoes, lack of transportation, suits filed by third parties concerning or arising
out of this Agreement, or unseasonable weather conditions (force majeure). An
extension of time for any of the above specified causes will be granted only if written
notice by the party claiming such extension is sent to the other party within ten
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 180
calendar days after the scheduled completion date specified in this Agreement,
notwithstanding any delay caused by that included in this Section.
7.18 Certificate of Completion. Upon completion of a Project Property, CFNT shall
submit to the CITY: 1) certification in writing that the Project Property has been completed
in accordance with the plans and specifications, approved by the CITY; 2) a recorded
Notice of Completion; 3) a cost -certifying final budget where CFNT shall identify the actual
costs, in line -item format, and 4) a request for a recorded Certification of Completion. Upon
a determination by the CITY that CFNT is in compliance with all of CFNT's construction
obligations, as specified in this Agreement, the CITY shall furnish, within 30 calendar days
of a written request by CFNT, a recordable Certificate of Completion for the Project
Property in the form substantially similar to EXHIBIT "B" attached hereto. The CITY will not
unreasonably withhold or delay furnishing the Certificate of Completion. If the CITY fails to
provide the Certificate of Completion within the specified time, it shall provide CFNT a
written statement indicating in what respects CFNT has failed to complete the Project Unit
in conformance with this Agreement or has otherwise failed to comply with the terms of this
Agreement, and what measures CFNT will need to take or what standards it will need to
meet in order to obtain the Certificate of Completion. Upon CFNT taking the specified
measures and meeting the specified standards, CFNT will certify to the CITY in writing of
such compliance and the CITY shall deliver the recordable Certificate of Completion to
CFNT in accordance with the provisions of this Section. CITY shall also provide CFNT with
a Certificate of Completion upon completion of the Project pursuant to the same conditions
set forth in this Section.
ARTICLE 8. OPERATIONS OF THE PROJECT
8.1 Operation of the Project. CFNT shall own, operate, and manage the Project
in full conformity with the terms of this Agreement.
8.2 Occupancy Requirements. All of the Units acquired and/or rehabilitated shall
be rented and occupied by, or if vacant, available for rental occupancy by Low- to
Moderate -Income Households, at or below 300% of the Federal Poverty Guideline or (ii)
income at or below 65 to 80% of the area median income for the county and size of
household based on the most recently published data that have been disproportionately
impacted by Covid 19 and are presumed to continue experiencing lack of affordable
housing. CFNT shall comply with the income targeting requirements of the SLFRF.
8.3 Leasing the SLFRF-Assisted Affordable Units. Within 120 days of this
Agreement, CFNT shall submit its proposed form of lease agreement for the CITY's review
and approval which shall not be unreasonably withheld. CFNT covenants and agrees to
utilize only leases that have been approved in advance by the CITY. The CITY shall
respond to CFNT's submission of a sample lease agreement within 30 days. Should the
CITY not respond within 30 days of the lease agreement submittal, CFNT shall be
authorized to use the submitted sample lease agreement. Additionally, CFNT agrees not
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to terminate the tenancy or to refuse to renew or lease with a tenant of the Units assisted
with SLFRF Funds except for serious or repeated violations 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 30
days' written notice served by CFNT or its authorized management entity upon the tenant
specifying the grounds for such action. CFNT 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 SLFRF-Assisted Affordable Units Provisions. In addition to the
SLFRF requirements and the VAWA lease addendum required in accordance with 24 CFR
92.359(e), the leases are subject to the following:
A. CFNT shall include in its Leases for the SLFRF-assisted Affordable
Units, provisions which authorize CFNT 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 Low- to Moderate -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- to Moderate- Income household, 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) 30% of the Household's actual adjusted monthly income.
8.5 Final Management Plan. Within 120 days of this Agreement , CFNT 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 CFNT plans to market the availability of the Affordable Units to
prospective tenants and how CFNT plans to certify the eligibility of potential tenants. The
Final Management Plan shall also address how CFNT plans to manage and maintain the
Affordable Units in accordance with SLFRF regulations for 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
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lease agreement that CFNT proposes to enter into with the Low- to Moderate -income
tenants. CFNT shall abide by the terms of this Final Management Plan, approved by the
CITY, in marketing, managing, and maintaining the SLFRF-Assisted Affordable Units.
8.6 Property Management. CFNT shall comply with the following:
A. Management Responsibilities. CFNT specifically is 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,
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. CFNT 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 Affordable Unit occupants. CFNT shall not
commit or permit any waste on or to the Project and shall prevent and/or rectify any
physical deterioration of the Project. CFNT shall maintain the 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. The SLFRF-Assisted Affordable Units shall be available
for occupancy on a continuous basis to households who are income eligible. CFNT 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.
CFNT shall otherwise comply with all applicable local, State, and federal laws concerning
nondiscrimination in housing. Neither CFNT nor any person claiming under or through
CFNT, 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 CFNT
as to the Affordable Units or the Project or portion thereof, shall contain covenants
concerning nondiscrimination consistent with this section. CFNT shall include a statement
in all advertisements, notices, and signs for availability of Affordable Units for rent to the
effect that CFNT is an Equal Housing Opportunity Provider.
A. Nothing in this section is intended to require CFNT to change the
character, design, use or operation of the Project; or to require CFNT to obtain
licenses or permits other than those required for the Project.
8.9 Rent Schedule and Utility Allowances. CFNT covenants and agrees to
charge rent to tenants occupying the SLFRF-Assisted Units in an amount which does not
exceed those rents prescribed to the Project as they associate with particular rent limit
established annually by the Department of the Treasury, consistent with the SLFRF
Program requirements applicable to the Affordable Units in the Fresno, California area, and
further covenants to provide a monthly allowance to tenants occupying the SLFRF Units.
CFNT agrees to furnish the CITY with an annual rent roll setting forth the maximum
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monthly rent and utility allowance for the SLFRF-Assisted Units until the expiration of the
Affordability Period. CFNT shall reexamine the rent, utility allowance, and tenant income
for the SLFRF Units at least annually.
8.10 Rental HoLIsing Fees. CFNT covenants and agrees not to charge fees that
are not customarily charged in rental housing such as laundry room access fees, and other
fees in accordance with 24 CFR 92.504(c)(3)(xi).
ARTICLE 9. INSURANCE AND INDEMNITY AND BONDS
Without waiver of limitation, the parties agree as follows regarding CFNT's Insurance and
Indemnity Obligations:
9.1 Insurance Requirements. Throughout the life of this Agreement, CFNT shall
pay for and maintain in full force and effect all policies of insurance hereunder with an
insurance company(ies) either (i) 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 (ii) authorized by the CITY's Risk Manager. The following policies of insurance
are required:
Best's Insurance Rating Guide, or (ii) authorized by the CITY's Risk Manager. The
following policies of insurance are required:
(i) COMMERCIAL GENERAL LIABILITY insurance which shall be at least
as broad as the most current version of Insurance Services Office (ISO) Commercial
General Liability Coverage Form CG 00 01 and include insurance for "bodily injury,"
"property damage" and "personal and advertising injury" with coverage for premises
and operations (including the use of owned and non -owned equipment), products
and completed operations, and contractual liability (including, without limitation,
indemnity obligations under the Agreement) with limits of liability of not less than the
following:
damage
a. $2,000,000 per occurrence for bodily injury and property
b. $2,000,000 per occurrence for personal and advertising injury
C. $4,000,000 aggregate for products and completed operations
d. $4,000,000 general aggregate applying separately to work
performed under the Agreement
(ii) COMMERCIAL AUTOMOBILE LIABILITY insurance which shall
be at least as broad as the most current version of Insurance Service Office (ISO)
Business Auto Coverage Form CA 00 01, and include coverage for all owned, hired,
and non -owned automobiles or other licensed vehicles (Code 1-Any Auto) with limits
of liability of not less than $1,000,000 per accident for bodily injury and property
damage.
(iii) WORKERS' COMPENSATION insurance as required under the
California Labor Code
(iv) EMPLOYEE LIABILITY insurance with limits of liability of not less than
$1000,000 each accident, $1,000,000 disease policy limit and $1,000,000 diseased
each employee.
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(v) BUILDERS RISK (Course of Construction) insurance, obtained by
CFNT or subcontractor in an amount equal to the completion value of the Project
with no coinsurance penalty provisions. (Only required if the project includes new
construction of a building; or renovation of, or addition to, an existing building.)
(vi) CONTRACTOR POLLUTION LIABILITY with coverage for bodily
injury, property damage or pollution clean-up costs that could result from of pollution
condition, both sudden and gradual. Including a discharge of pollutants brought to
the work site, a release of pre-existing pollutants at the site, or other pollution
conditions with limits of liability of not less than the following:
a. $1,000,000 per occurrence
b. $2,000,000 general aggregate per annual policy period
In the event CFNT purchases an Umbrella or Excess insurance policy(ies) to meet the
minimum limits of insurance set forth above, this insurance policy(ies) shall "follow form"
and afford no less coverage than the primary insurance policy(ies). In addition, such
Umbrella or Excess insurance policy(ies) shall also apply on a primary and non-
contributory basis for the benefit of the CITY, its officers, officials, employees, agents, and
volunteers.
In the event CFNT involves any lead -based, mold or asbestos environmental hazard, either
the Automobile Liability insurance policy or the Pollution Liability insurance policy shall be
endorsed to include Transportation Pollution Liability insurance covering materials to be
transported by CFNT pursuant to the SLFRF Agreement.
In the event CFNT involves any lead -based environmental hazard (e.g., lead- based paint),
CFNT's Pollution Liability insurance policy shall be endorsed to include coverage for lead
based environmental hazards. In the event CFNT involves any asbestos environmental
hazard (e.g., asbestos remediation), the CFNT's Pollution Liability insurance policy shall be
endorsed to include coverage for asbestos environmental hazards. In the event the SLFRF
Agreement involves any mold environmental hazard (e.g., mold remediation), the Pollution
Liability insurance policy shall be endorsed to include coverage for mold environmental
hazards and "microbial matter including mold" within the definition of "Pollution" under the
policy.
CFNT shall be responsible for payment of any deductibles contained in any insurance
policies required hereunder and CFNT shall also be responsible for payment of any self -
insured retentions. Any deductibles or self -insured retentions must be declared to, and
approved by, the CITY's Risk Manager or his/her designee. At the option of the CITY's
Risk Manager or his/her designee, either (i) the insurer shall reduce or eliminate such
deductibles or self -insured retentions as respects to the CITY, its officers, officials,
employees, agents, and volunteers; or (ii) CFNT shall provide a financial guarantee,
satisfactory to the CITY's Risk Manager or his/her designee, guaranteeing payment of
losses and related investigations, claim administration and defense expenses. At no time
shall the CITY be responsible for the payment of any deductibles or self -insured retentions.
All policies of insurance required hereunder shall be endorsed to provide that the coverage
shall not be cancelled, non -renewed, reduced in coverage or in limits except after 30
calendar day written notice has been given to the CITY. Upon issuance by the insurer,
broker, or agent of a notice of cancellation, non -renewal, or reduction in coverage or in
limits, CFNT shall furnish the CITY with a new certificate and applicable endorsements for
23
such policy(ies). In the event any policy is due to expire during the work to be performed
for the CITY, CFNT shall provide a new certificate, and applicable endorsements,
evidencing renewal of such policy not less than 15 calendar days prior to the expiration
date of the expiring policy.
The General Liability, Automobile and Pollution Liability insurance policies shall be written
on an occurrence form. The General Liability, Automobile Liability and Pollution Liability
insurance policies shall name the CITY, its officers, officials, agents, employees, and
volunteers as an additional insured. All such policies of insurance shall be endorsed so the
CFNT's insurance shall be primary and no contribution shall be required of the CITY. The
coverage shall contain no special limitations on the scope of protection afforded to the
CITY, its officers, officials, employees, agents, and volunteers. If CFNT maintains higher
limits of liability than the minimums shown above, the CITY requires and shall be entitled to
coverage for the higher limits of liability maintained by CFNT. The General and Pollution
Liability insurance policy shall also name the CITY, its officers, officials, agents, employees,
and volunteers as additional insureds for all ongoing and completed operations. The
Builders Risk (Course of Construction) insurance policy shall be endorsed to name the
CITY as loss payee. All insurance policies required including the Workers' Compensation
insurance policy shall contain a waiver of subrogation as to the City, its officers, officials,
agents, employees, and volunteers.
CFNT shall furnish the CITY with all certificate(s) and applicable endorsements effecting
coverage required hereunder. All certificates and applicable endorsements are to be
received and approved by the CITY's Risk Manager or his/her designee before work
commences. Upon request of the CITY, CFNT shall immediately furnish the CITY with a
complete copy of any insurance policy required under this Agreement, including all
endorsements, with said copy certified by the underwriter to be a true and correct copy of
the original policy. This requirement shall survive expiration or termination of this
Agreement.
Claims -Made Policies - If any coverage required is written on a claims -made coverage
form:
(i) The retroactive date must be shown and must be before the effective
date of the commencement of work by CFNT.
(ii) Insurance must be maintained and evidence of insurance must be
provided for at least five years after completion of the work or termination of the
Agreement, whichever first occurs.
(iii) If coverage is canceled or non -renewed, and not replaced with another
claims -made policy form with a retroactive date prior to the effective date of the
Agreement, or work commencement date, CFNT must purchase extended reporting
period coverage for a minimum of five years after completion of the work or
termination of the SLFRF Agreement, whichever first occurs.
(iv) A copy of the claims reporting requirements must be submitted to the
CITY for review.
(v) These requirements shall survive expiration or termination of the
Agreement.
PZ
If at any time during the life of the Agreement or any extension, CFNT, its contractor, or any
of its subcontractors fail to maintain any required insurance in full force and effect, all work
under this Agreement shall be discontinued immediately, and all payments due or that
become due to CFNT shall be withheld 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 shall be sufficient cause for the CITY to terminate this Agreement. No
action taken by CITY hereunder shall in any way relieve CFNT of its responsibilities under
this Agreement. The phrase "fail to maintain any required insurance" shall include, without
limitation, notification received by the CITY that an insurer has commenced proceedings, or
has had proceedings commenced against it, indicating that the insurer is insolvent.
The fact that insurance is obtained by CFNT shall not be deemed to release or diminish the
liability of CFNT, including, without limitation, liability under the indemnity provisions of this
Agreement. The duty to indemnify the CITY shall apply to all claims and liability regardless
of whether any insurance policies are applicable. The policy limits do not act as a limitation
upon the amount of indemnification to be provided by CFNT. Approval or purchase of any
insurance contracts or policies shall in no way relieve from liability nor limit the liability of
CFNT, its principals, officers, agents, employees, persons under the supervision of CFNT,
vendors, suppliers, invitees, consultants, sub -consultants, subcontractors, or anyone
employed directly or indirectly by any of them.
In the event of a partial or total destruction by the perils insured against of any or all of the
work and/or materials herein provided for at any time prior to the final completion of the
Agreement and the final acceptance by the CITY of the work or materials to be performed
or supplied thereunder, CFNT shall promptly reconstruct, repair, replace, or restore all work
or materials so destroyed or injured at his/her sole cost and expense. Nothing herein
provided for shall in any way excuse CFNT or his/her insurance company from the
obligation of furnishing all the required materials and completing the work in full compliance
with the terms of this Agreement.
SUBCONTRACTORS — CFNT's subcontracts any or all of the services to be performed
under this Agreement, CFNT shall require, at the discretion of the CITY Risk Manager or
designee, subcontractor(s) to enter into a separate Side Agreement with the City to provide
required indemnification and insurance protection. Any required Side Agreement(s) and
associated insurance documents for the subcontractor must be reviewed and preapproved
by CITY Risk Manager or designee. If no Side Agreement is required, CONTRACTOR will
be solely responsible for ensuring that its subcontractors maintain insurance coverage at
levels no less than those required by applicable law and is customary in the relevant
industry. The above -described policies of insurance shall be endorsed to provide an
unrestricted 30 day written notice in favor of the CITY, of policy cancellation, change or
reduction of coverage. In the event any policy is due to expire during the term of this
Agreement, a new certificate evidencing renewal of such policy shall be provided not less
than 15 days prior to the expiration date of the expiring policy(ies). Upon issuance by the
insurer, broker, or agent of a notice of cancellation, change or reduction in coverage, CFNT
or its contractors, as the case may be, shall file with the CITY a certified copy of the new or
renewal policy and certificates for such policy. CFNT shall furnish the CITY with the
certificate(s) and applicable endorsements for ALL required insurance prior to the CITY's
execution of this Agreement. CFNT shall furnish the CITY with copies of the actual policies
upon the request of the CITY at any time during the life of the Agreement or any extension.
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At all times hereunder CFNT shall maintain the required insurance in full force and effect.
9.2 Indemnity. To the furthest extent allowed by law, CFNT 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, CFNT or any other person, and
from any and all claims, demands and actions in law or equity (including attorney's fees,
litigation expenses, and costs to enforce this agreement), arising or alleged to have arisen
directly or indirectly out of performance of this Agreement. The CFNT's obligations under
the preceding sentence shall apply regardless of whether the CITY or any of its officers,
officials, employees, agents, or volunteers are passively negligent, but shall not apply to
any loss, liability, fines, penalties, forfeitures, costs, or damages caused by the gross
negligence or by the willful misconduct of the CITY or any of its officers, officials,
employees, agents, or volunteers.
This section shall survive termination or expiration of this Agreement.
9.3 Property Insurance. CFNT shall maintain in full force and effect, throughout
the remaining life of this Agreement, a policy or policies of property insurance acceptable to
the CITY, covering the Project premises, with limits reflective of the value of the Project
premises upon issuance of the Certificate of Completion or substantial completion of the
project referenced in this agreement, including fire and Extended Comprehensive Exposure
(ECE) coverage in an amount, form, substance, and quality as acceptable to the CITY's
Risk Manager. The CITY shall be added by endorsement as a loss payee thereon.
9.4 Bond Obligations. CFNT or its General Contractor shall obtain, pay for and
deliver good and sufficient payment and performance bonds along with a Primary Obligee,
Co -Obligee or Multiple Obligee Rider in a form acceptable to the CITY from a corporate
surety, admitted by the California Insurance Commissioner to do business in the State of
California and Treasury -listed, in a form satisfactory to the CITY and naming the CITY as
Obligee.
A. The "Faithful Performance Bond" shall be at least equal to 100% of
CFNT's estimated construction costs as reflected in the CFNT's pro forma budget, to
the guarantee faithful performance of the Project, within the time prescribed, in a
manner satisfactory to the CITY, consistent with this Agreement, and that all
material and workmanship will be free from original or developed defects.
B. The "Payment Bond" shall be at least equal to 100% of construction
costs approved by the CITY to satisfy claims of material supplies and of mechanics
and laborers employed for this Project. The bond shall be maintained by CFNT in
full force and effect until the Project is completed and until all claims for materials
and labor are paid and as required by the applicable provisions of Chapter 7, Title
15, Part 4, Division 3 of the California Civil Code.
C. The "Material and Labor Bond" shall be at least equal to 100% of the
CFNT's estimated construction costs as reflected in the CFNT's pro forma budget, to
satisfy claims of material supplies and of mechanics and laborers employed for this
Project. The bond shall be maintained by CFNT 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 provision of the
4
California Code.
ARTICLE 10. DEFAULT AND REMEDIES
10.1 Events of Default, The parties agree that each of the following shall
constitute an "Event of Default" by CFNT for purposes of this Agreement after the cure
period in Section 10.2 has expired without a cure:
A. The CFNT's use of SLFRF Funds for costs other than Eligible Costs or
for uses not permitted by the terms of this Agreement; except that there shall be no
Event of Default if the CFNTS's use of the SLFRF were for costs that were Eligible
Costs at the time they were incurred but subsequently lose eligibility;
B. CFNT's Failure to obtain and maintain the insurance coverage
required under this Agreement;
C. Except as otherwise provided in this Agreement, the failure of CFNT to
punctually and properly perform any other covenant or agreement contained in this
Agreement including without limitation the following: (1) CFNT's material deviation
in the Project work specified in the Project Description as identified in this
Agreement, without the CITY's prior written consent; (2) CFNT's use of defective or
unauthorized materials or defective workmanship in pursuit of the Project; (3)
CFNT's failure to commence or complete the Project, as specified in this Agreement,
unless delay is permitted under Section 7.18 of this Agreement; (4) cessation of the
Project for a period of more than 15 consecutive days (other than as provided at
Section 7.18 of this Agreement) prior to submitting to the CITY certification that the
Project is complete; (5) any material adverse change in the condition of CFNT or its
development team, or the Project that gives the CITY reasonable cause to believe
that the Project cannot be completed by the scheduled completion date according to
the terms of this Agreement; (6) CFNT's failure to remedy any deficiencies in record
keeping or failure to provide records to the CITY upon the CITY's request; or (7)
CFNT's failure to comply with any federal, State or local laws or applicable CITY
restrictions governing the Project, including but not limited to provisions of this
Agreement pertaining to equal employment opportunity, nondiscrimination and lead -
based paint;
D. Any representation, warranty, or certificate given or furnished by or on
behalf of CFNT shall prove to be materially false as of the date of which the
representation, warranty, or certification was given, or that CFNT 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 CFNT's
inadvertence, CFNT shall have a 30 day opportunity after written notice thereof to
cause such representation, warranty, or certification to be true and complete in
every respect;
E. CFNT 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 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 90 days;
27
F. CFNT's failure, inability or admission in writing of its inability to pay its
debts as they become due or CFNT assignment for the benefit of creditors;
G. A receiver, trustee, or liquidator shall be appointed for CFNT or any
substantial part of CFNT's assets or properties, and not be removed within ten days;
H. CFNT'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 CFNT of any material
obligation owned by CFNT 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 CFNT of any Event of Default by specifying: (1) the nature of the event or deficiency
giving rise to the default; (2) the action required to cure the deficiency, if any action to cure
is possible, and (3) a date, which shall not be less than the lesser of any time period
provided in this Agreement, any time period provided for in the notice no less than ten
days, or 30 calendar days from the date of the notice, by which such deficiency must be
cured, provided that if the specified deficiency or default cannot reasonably be cured within
the specified time, with the CITY's written consent, CFNT shall have an additional
reasonable period to cure so long as it commences cure within the specified time and
thereafter diligently pursues the cure in good faith. The CITY acknowledges and agrees
that CFNT shall have the right to cure any defaults hereunder and that notice and cure
rights hereunder shall extend to any and all partners of CFNT that are previously identified
in writing delivered to the CITY in the manner provided in this Agreement.
10.3 Remedies Upon an Event of Default. Upon the happening of an Event of
Default and a failure to cure said Event of Default within the time specified, the CITY's
obligation to disburse SLFRF shall terminate. The CITY may also at its option and without
notice institute any action, suit, or other proceeding in law, in equity or otherwise, which it
shall deem necessary or proper for the protection of its interests and may without limitation
proceed with any or all of the following remedies in any order or combination that the CITY
may choose in its sole discretion:
A. Terminate this Agreement immediately upon written notice;
B. Bring an action in equitable relief: (1) seeking specific performance 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;
C. Pursue any other remedy allowed by law or in equity or under this
Agreement; and
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 Agreement 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 approval as to form by the City
Attorney's Office.
11.2 Attorneys 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 heirs, successors, assigns,
and legal representatives.
11.4 Counterparts, This Agreement may be executed in counterparts, each of
which when executed and delivered will be deemed an original, and all of which together
will 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 CFNT, or of any other person, shall in and by itself be deemed or
construed by any person to create any relationship of third -party beneficiary, or of principal
and agent, of limited or general partnership, or of joint venture.
11.6 Discretionary Governmental Actions. Certain planning, land use, zoning and
other permits and public actions required in connection with the Project including, without
limitation, the approval of this Agreement, the environmental review and analysis under
NEPA 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 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 CFNT or any of its executors, administrators,
transferees, successors -in -interest or assigns for any failure of any governmental entity to
grant approval on any matter subject to discretionary approval.
11.7 Effective Date, This Agreement shall be effective upon the date first above
written, upon the CITY and CFNT's complete execution following City Council approval and
recordation of related documents.
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. CFNT shall reimburse the CITY
for all reasonable expenses and costs of collection and enforcement, including reasonable
29
attorney's fees, incurred by the CITY as a result of one or more Events of Default by CFNT
under this Agreement.
11.11 Governing Law and Venue. Except to the extent preempted by applicable
federal law, the laws of the State of California shall govern all aspects of this Agreement,
including execution, interpretation, performance, and enforcement. Venue for filing any
action to enforce or interpret this Agreement will be Fresno, California.
11.12 Headings. The headings of the articles, sections, and paragraphs used in
this Agreement are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
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 Third -Party Beneficia . No contractor, subcontractor, mechanic,
materialman, laborer, vendor, or other person hired or retained by CFNT 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 at CFNT 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.
11.15 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 CFNT 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 CFNT in any case shall
entitle CFNT 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.
11.16 Nonreliance. CFNT 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, its agents, employees, or attorneys in entering into this Agreement.
11.17 Notice. Any notice to be given to either party under the terms of this
Agreement shall be given by certified United States mail, postage prepaid, return receipt
requested, at the addresses specified below, or at such other addresses as may be
specified in writing by the parties.
If to the CITY:
City of Fresno - Planning and Development Department
Housing and Community Development Division
2600 Fresno Street, Room 3065
Fresno, CA 93721-3605
30
If CFNT:
CFNT
240 N. Calaveras Street
Fresno, CA 93701
11.18 Precedence of Documents. In the event of any conflict between the body of
this Agreement and any exhibit or attachment hereto, the terms and conditions of the body
of this Agreement will control.
11.19 Remedies Cumulative_ All powers and remedies given by this Agreement
shall be cumulative and in addition to those otherwise provided by law.
11.20 Severab_iiit_y. The invalidity, illegality, or un-enforceability of any one or more
of the provisions of this Agreement shall not affect the validity, legality, or enforceability of
the remaining provisions hereof or thereof.
[SIGNATURE PAGE TO FOLLOW]
31
IN WITNESS WHEREOF, the parties have executed this Agreement in Fresno,
California, the day and year first above written.
CITY OF FRESNO,
a California municipal cor oration
Central Fresno Neighborhood Trust
Holdings, LLC, a California limited liability
company
By:
Name: G o geanne A. White By, G
Title: City anager Name: Esther Carver
(Attach notary certificate of acknowledgment) Title: LLC Member, Board Director
(Attach notary certificate
acknowledgment)
APPROVED AS TO FORM:
ANDREW JANZ
City Attorney
By:
Fouw-,,a,
Name:By:
Title:
Name: Tracy Parvanian Date
(Attach notary certificate
Title: Supervising Deputy City Attorney
acknowledgment)
ATTEST:
TODD STERMER, CMC
City Clerl�
99
'► �� � j ' It �-:,_ �. -
Attachments-.
EXHIBIT A: PROJECT DESCRIPTION AND SCHEDULE
EXHIBIT B: EXEMPLAR CERTIFICATE OF COMPLETION
EXHIBIT C: EXEMPLAR DECLARATION OF RESTRICTIONS
of
of
CALIFORNIA ACKNOWLEDGMENT
CIVIL CODE § 1189
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
On //-z�� y before me,� dh�6t7 r'Q��; '
Date ,,--�� Here Insert Name and Titleof the Officer
personally appeared e_L`�<. ��L,'"� ✓
Name(s) of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
amy
GERRE 6RENNEMAN
Notary Public - CaliforniaFresno CountyCommission # 2295615
Comm. Expires Jun 30, 2023
Place Notary Seal and/or Stamp Above
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public
OPTIONAL -
Completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document _
Title or Type of Document: WZ e f Lz-ca,( R5Qai �ovt"� e-�TiAr ly CA CrIA+- aare yxe4-
Document Date: I"3 e 2Z Number of Pages:
Signer(s) Other Than Named Above: CqQ Trac4an,a
Capacity(ies) Claimed by Signer(s)
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner — ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer is Representing
02018 National Notary Association
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner — ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
rl nthPr-
Signer is Representing:
EXHIBIT "A"
PROJECT DESCRIPTION AND SCHEDULE
PROJECT DESCRIPTION
SLFRF Funds will be made available by the CITY for payment of SLFRF eligible acquisition
and rehabilitation costs not to exceed One Million Nine Hundred Fifty Thousand Dollars
and 00/100 ($1,950,000.00), the aggregate for SLFRF-assisted Units as determined by the
CITY, as needed.
II. PROJECT SCHEDULE
Commencement of Acquisition/Rehabilitation:
Completion of Acquisition and Rehabilitation:
Notice of Completion to City:
EXHIBIT "B"
CERTIFICATE OF COMPLETION
Recorded at the Request of
and When Recorded Return to.
City of Fresno
Planning and Development Department
Housing and Community Development Division
2600 Fresno Street, Room 3065
Fresno. CA 93721-3605
(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY)
This Certificate of Completion is recorded at the request and for the benefit of the City of Fresno
and is exempt from the payment of a recording fee pursuant to Government Code Section 6103.
APN
City of Fresno
Planning and Development Department
Date
Certificate of Completion
Recitals:
A. By a State and Local Fiscal Recovery Funds (SLFRF) Agreement dated , 2022,
(SLFRF Agreement) between the City of Fresno, a municipal corporation (CITY), and Central Fresno
Neighborhood Trust Holdings, LLC, a California limited liability company (CFNT). CFNT agreed to
acquire and rehabilitate 50 rental units, of which are to be SLFRF-assisted units while meeting the
affordable housing, income targeting and other requirements of the SLFRF according to the terms
and conditions of the SLFRF Agreement and other documents/instruments referenced therein.
B. The SLFRF Agreement was entered into on 12022.
C. Under the terms of the SLFRF Agreement, after CFNT completes a Project property,
CFNT may ask the CITY to record a Certificate of Completion.
D. CFNT has asked the CITY on _ to furnish CFNT with a recordable
Certificate of Completion.
E. The CITY's issuance of this Certificate of Completion is conclusive evidence that CFNT
has completed the property as set forth in the SLFRF Agreement.
NOW THEREFORE:
1. The CITY certifies that CFNT commenced the Project property on , 20XX and
completed the Project property on 20XX and has done so in full compliance with the
SLFRF Agreement.
2. This Certificate of Completion is not evidence of CFNT 's compliance with, or
satisfaction of, any obligation to any mortgage or security interest holder, or any mortgage or security
interest insurer, securing money lent to finance work on the Property or Project, or any part of the
Property or Project.
3. This Certificate of Completion is not a notice of completion as referred to in California
Civil Code Section 3093.
4. Nothing contained herein modifies any provision of the SLFRF Agreement.
H
IN WITNESS WHEREOF, CITY has executed this Certificate of Completion as of this_ _
day of , 20XX.
CITY OF FRESNO
Planning & Development Department
(Attach notary certificate of acknowledgment)
ATTEST:
TODD STERMER, CMC
CITY CLERK
11
uepury
Date:
Date
APPROVED AS TO FORM-
RINA M. GONZALES
Interim City Attorney
By -
Tracy N. Parvanian
Supervising Deputy City Attorney
Date:
Central Fresno Neighborhood Trust Holdings, LLC, a California limited liability company
By:
Name: Esther Carver
Title: LLC Member, Board Director
(Attach notary certificate of acknowledgment)
By:
Name:
Title:
(Attach notary certificate of acknowledgment)
CFNT
(Attach notary certificate of acknowledgment)
EXHIBIT "C"
EXEMPLAR DECLARATION OF RESTRICTIONS
Recorded at the Request of
and When Recorded Return to.
City of Fresno
Planning and Development Dept.
Housing and Community Development Division
2600 Fresno Street, Room 3065
Fresno, CA 93721-3605
APNs:
(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY)
The document is exempt from the payment of a recording fee in accordance with Government Code Sections 6103 and 27383.
DECLARATION OF RESTRICTIONS
THIS DECLARATION OF RESTRICTIONS (Declaration) is executed as of this day of ,
2022, by Central Fresno Neighborhood Trust Holdings, LLC, a California limited liability company
(DECLARANT), in favor of the CITY OF FRESNO, a California municipal corporation (CITY).
WHEREAS, the DECLARANT is the owner of the real estate in the City of Fresno, County of
Fresno, California, [address] ([APN(s)]), which is more particularly described in EXHIBIT "A" —
Property Description, attached hereto and made a part hereof, including the improvements thereon
(Property); and
WHEREAS, pursuant to a certain City of Fresno SLFRF Grant Agreement dated
2022, incorporated herein by reference (Agreement) and instruments referenced therein, the
DECLARANT agrees to utilize, and the CITY agrees to provide, certain funds from the United States
Treasury to the DECLARANT and the DECLARANT agrees to acquire and rehabilitate 50 rental
housing units which will be reserved as Affordable Rental Housing available as Low- and Moderate
Income units, subject to the terms and conditions set forth in the Grant Agreement for households
earning 80%, or below, of the area median income for the Fresno Metropolitan Statistical Area
(FMSA).
WHEREAS, the Agreement imposes certain affordability requirements upon property owned by
the DECLARANT, which affordability restrictions shall be enforceable for a 55-year period; and
WHEREAS, these restrictions are intended to bind the DECLARANT, and all purchasers of the
Property and their successors.
NOW THEREFORE, the DECLARANT declares that the Property is held and will be held,
transferred, encumbered, used, sold, conveyed and occupied subject to the covenants, restrictions,
and limitations set forth in this Declaration, all of which are declared and agreed to be in furtherance
of the Project. All of the restrictions, covenants and limitations will run with the land and will be
binding on all parties having or acquiring any right, title or interest in the Property or any part thereof,
will inure to the benefit of the CITY, and will be enforceable by it. Any purchaser under a contract of
sale covering any right, title or interest in any part of the Property, by accepting a deed or a contract
of sale or agreement of purchase, accepts the document subject to, and agrees to be bound by, any
and all restrictions, covenant, and limitations set forth in this Declaration commencing on the date the
DECLARANT is notified by the CITY that the Affordable Rental Housing has begun as provided in the
Agreement, constituting the commencement of the 55-year Affordability Period.
1. Declarations. The DECLARANT hereby declares that the Property is and shall be
subject to the covenants and restrictions hereinafter set forth, all of which are declared to be in
furtherance of the Project and the Agreement and are established and agreed upon for the purpose of
enhancing and protecting the value of the Property and in consideration of the CITY entering into the
Agreement with the 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 the CITY and shall run with the
Property and be binding on any future owners of the Property and inure to the benefit of and be
enforceable by CITY. These covenants and restrictions are as follows:
a. The DECLARANT for itself and its successor(s) on title covenants and agrees
that from the date the Project is complete, until the expiration of the Affordability Period, it shall cause
50 Affordable Housing Rental Units to be used as rental affordable housing to Low- to Moderate
Households with an income of 80%, or less, of area median income. Unless otherwise provided in the
Agreement, all Affordable Rental Housing shall include, without limitation, compliance with the
following requirements:
i. Nondiscrimination. There shall be no discrimination against nor
segregation of any persons 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 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. The Affordable Rental Housing shall be leased only
to eligible natural persons, who shall occupy the Affordable Rental Housing as the tenants' principal
place of residence.
iii. Household Income Re uig rements. The 50 Affordable Rental Housing
constructed on the Project Property may be conveyed only to a natural person(s) whose annual
Household income at the time of rental is not greater than 80% of the most recent annual area
median income.
Item (a) above is hereinafter referred to as the Covenant and Restriction.
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 Restriction. The acceptance of a deed of conveyance to the Property shall constitute an
agreement that the Covenant and Restriction, as may be amended or supplemented from time to
time, are accepted and ratified by future owners, tenant or occupant, and such Covenant and
Restriction shall be a covenant running with the land and shall bind any person having at any time
any interest or estate in the Property, all as though such Covenant and Restriction was recited and
stipulated at length in each and every deed, conveyance, mortgage or lease thereof.
Notwithstanding the foregoing, upon foreclosure by a lender or other transfer in lieu of
foreclosure, or assignment of an FHA -insured mortgage to HUD, the Affordability Period shall be
terminated unless the foreclosure or other transfer in lieu of foreclosure or assignment recognizes any
contractual or legal rights of public agencies, nonprofit sponsors, or others to take actions that would
avoid the termination of low-income affordability. However, the requirements with respect to
Affordable Rental Housing shall be revived according to their original terms, if during the original
Affordability Period, the owner of record before the foreclosure or other transfer, or any entity that
includes the former owner of those with whom the former owner has or had formally, family or
business ties, obtains an ownership interest in the Project or the Property, the Affordability Period
shall be revived according to its original terms.
5. Benefit. This Declaration shall run with and bind the Property for a term commencing
on the Project property Completion date until the expiration of the 55-year Affordability Period.
The failure or delay at any time of CITY and/or any other person entitled to enforce this Declaration
shall in no event be deemed a waiver of the same, or of the right to enforce the same at any time or
from time to time thereafter, or an estoppel against the enforcement thereof.
6. Costs and Attorney's Fees. In any proceeding arising because of failure of the
DECLARANT or any future owner of the Property to comply with the Covenant and Restriction
required by this Declaration, as may be amended from time to time, the CITY shall be entitled to
recover its respective costs and reasonable attorney's fees incurred in connection with such default or
failure.
7. Waiver. Neither the DECLARANT nor any future owner of the Property may exempt
itself from liability for failure to comply with the Covenant and Restriction required in this Declaration;
provided however, that upon the transfer of the Property, the transferring owner may be released
from liability hereunder, upon the CITY's written consent of such transfer, which consent shall not be
unreasonably withheld, conditioned, or delayed.
8. Severability. The invalidity of the Covenant and Restriction or any other covenant,
restriction, condition, limitation, or other provision of this Declaration shall not impair or affect in any
manner the validity, enforceability, or effect of the rest of this Declaration and each shall be
enforceable to the greatest extent permitted by law.
9. Pronouns. Any reference to the masculine, feminine, or neuter gender herein shall,
unless the context clearly requires the contrary, be deemed to refer to and include all genders. Words
in the singular shall include and refer to the plural, and vice versa, as appropriate.
10. Interpretation. The captions and titles of the various articles, sections, subsections,
paragraphs, and subparagraphs of this Declaration are inserted herein for ease and convenience of
reference only and shall not be used as an aid in interpreting or construing this Declaration or any
provision hereof.
11. Amendments or Modifications. No Amendments or modifications shall be permitted
without the prior written consent of the CITY and the DECLARANT.
12. Recordation. The DECLARANT acknowledges that this Declaration will be file of record
in the County of Fresno Recorder's Office, State of California.
13. Capitalized Terms. All capitalized terms used in this Declaration, unless otherwise
defined herein, shall have the meanings assigned to such terms in the Agreement.
14. Headings. The headings of the articles, sections, and paragraphs used in this
Declaration are for convenience only and shall not be read or construed to affect the meaning or
construction of any provision.
H
IN WITNESS WHEREOF, DECLARANT has executed this Declaration of Restrictions on the
date first written above.
DECLARANT:
By: _
Name:
Title:
(Attach notary certificate of acknowledgment)
Date: