So California Presbyterian/Property Option 01OPTION AGREEMENT
This OPTION AGREEMENT (the "Option" or "Agreement") is entered into as of
April 17, 2001, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public
body, corporate and politic ("Agency"), and SOUTHERN CALIFORNIA PRESBYTERIAN
HOMES, a non-profit, public benefit corporation ("Optionee").
RECITALS
A. Agency is the owner in fee of that certain real property consisting of
approximately eight acres located in the City of La Quinta, County of Riverside, State
of California, more particularly described in the legal description attached hereto as
Exhibit "A" (the "Agency Parcel").
B. Agency and Optionee desire to enter into this Agreement to provide for
Agency to grant to Optionee, and Optionee to obtain from Agency, upon the terms set
forth in this Agreement, an option to acquire the Agency Parcel and all improvements
now or hereafter constructed thereon and easements, licenses and interests
appurtenant thereto (collectively, the "Property."
AGREEMENT
Based upon the foregoing Recitals, which are incorporated herein by this
reference, and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Agency and Optionee agree as follows:
OPTION TO ACQUIRE.
1.1 Grant of Option: Option Period. Agency, subject to the terms and
conditions set forth herein, hereby grants to Optionee an option to purchase the
Property ("Option"). This Option shall commence on the date hereof and shall
continue until the "Option Termination Date" (the "Option Period"). The Option
Terminate Date shall be dependent on whether Optionee receives notice from the
United States Department of Housing and Urban Development ("HUD") on or prior to
December 31, 2001, that Optionee's application for a fund reservation under Section
202 of the Housing Act of 1959, 12 U.S.C. Section 1701 q ("Fund Reservation") has
been approved. If Optionee does not receive the Fund Reservation approval on or prior
to December 31, 2001, the Option Termination Date shall be the earlier of (i) 4:00
p.m. on December 31, 2001; or (ii) the date Optionee receives notice that the
application for a Fund Reservation has been rejected provided that if such notice of
rejection is received by Optionee prior to December 31, 2001, Optionee shall have
until December 31, 2001, to obtain a reversal of such rejection. If Optionee's
application for the Fund Reservation is approved by HUD, the Option Termination Date
shall be the date that is eighteen (18) months after the date that HUD approved the
Fund Reservation. Notwithstanding anything in the foregoing to the contrary, in no
event shall the Option Period expire earlier than November 30, 2001.
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1 .2 Purpose of Option. The parties agree that the purpose of this Option is
for the specific purpose of facilitating the acquisition of the Property and the
development thereon of an affordable senior citizen housing project containing eighty
(80) units (the "Project").
1.3 Consideration for Option. As consideration for the granting of the Option,
Optionee shall pay to Agency the sum of Ten Dollars ($10.00), the sufficiency of
which is hereby acknowledged. Said Option consideration shall not be applicable to
the Purchase Price.
1.4 Exercise of 01tion. In the event Optionee elects to exercise the Option
to purchase the Property and has performed all acts in the time and manner as required
by the terms hereof, and is not in default under any provision of this Agreement,
Optionee shall exercise the Option by delivering to Agency, on or before 4:00 p.m. on
the last day of the Option Period, written notice of Optionee's election to acquire the
Property together with a copy of HUD's approval of the Fund Reservation.
1.5 Automatic Termination. This Option shall automatically terminate without
any notice to Optionee, and all rights of Optionee in and to the Property shall then and
there cease if Optionee does not exercise the Option to purchase the Property in the
manner set forth in Section 1.4 of this Agreement prior to the expiration of the Option
Period set forth in Section 1.1. Such termination shall not release Optionee from its
obligations to pay sums due and owing pursuant to the terms hereof up to and
including the date of such termination, nor from Optionee's obligations pursuant to
Sections 1.6, 5.1, and 5.3 hereof.
1.6 Document to Remove Cloud. This Agreement constitutes only an Option
to purchase the Property, and although the Option granted hereby shall automatically
terminate with respect to the Property unless exercised within the times provided for
herein, or shall otherwise terminate as provided in Section 1.4, Optionee nonetheless
in all events agrees to execute, acknowledge and deliver to Agency within ten 0 0)
days after Agency's request therefor, any quitclaim deed or other document(s) required
by a reputable title company of Agency's choice, which said title company might
require to remove any cloud from the title of Agency to the Property that might arise
as a result of the Option herein granted.
2. INSPECTIONS AND REVIEW.
2.1 Title Review. If Optionee receives the Fund Reservation, then thirty (30)
days after Agency has received written notice from Optionee that Optionee has
received the Fund Reservation, Agency shall deliver to Optionee a preliminary title
report for the Property, together with copies of all written instruments creating the
exceptions specified therein (collectively, the "Title Report"). Within thirty (30) days
after receipt of the Title Report, Optionee shall notify Option in writing ("Optionee's
Title Notice") of any matters of title disapproved by Optionee (the "Disapproved
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Exceptions"). Optionee's failure to deliver Optionee's Title Notice within said thirty
(30) day period shall constitute Optionee's approval of all the title exceptions in the
Title Report. Agency shall have a period of thirty (30) days after receipt of Optionee's
Title Notice in which to notify Optionee in writing ("Agency's Title Notice") of
Agency's election to either agree to remove the Disapproved Exceptions prior to the
close of escrow for the conveyance of the Property to Optionee or to decline to
remove the Disapproved Exceptions. Agency's failure to provide Optionee with
Agency's Title Notice within said thirty (30) day period shall be deemed Agency's
election to decline to remove the Disapproved Title Exceptions. In the event Optionee
elects to exercise the Option, Optionee shall be deemed to have agreed to accept title
to the Property subject to any Disapproved Exceptions which Agency in Agency's Title
Notice notified Optionee it was declining to remove or which Agency shall be deemed
to have decline to remove by its failure to deliver the Agency Title Notice ("Approved
Title Exceptions"). The deadlines set forth in this Section 2.1 may be extended by
mutual agreement of the parties.
2.2 Investigation of Property. Optionee, at its sole cost and expense, shall
have the right to make such independent investigations, inspections, tests, reviews,
studies or surveys (collectively, the "Investigations") as Optionee deems necessary or
appropriate concerning the condition or suitability for ownership, use, subdivision,
development, construction, or sale of the Property by Optionee, including, without
limitation, any desired Investigations of the soils or groundwater conditions, including
a study and determination as to the existence of any noxious, toxic, flammable,
explosive or radioactive matter or any hazardous materials or hazardous substances
or any crude oil or byproducts of crude oil. During the Option Period, Agency hereby
grants to Optionee and its representatives, agents, consultants, contractors, and
designees a non-exclusive right of entry onto the Property for the purposes of
conducting the Investigations. Optionee shall provide at least 48-hours advanced
written notice to Agency when Optionee desires to exercise its right of entry. Agency
shall have the right to reasonably refuse entry if such entry shall interfere with
Agency's use of the Property. Optionee agrees to repair any damage or disturbance
that Optionee or its agents, representatives, or contractors cause to the Property, and
Optionee shall indemnify, defend, and hold Agency harmless from and against any and
all claims, expenses, demands, lawsuits, causes of action, attorney's fees, and the like
arising out of or related to the exercise by Optionee or its agents, representatives, or
contractors, of the right of entry granted by Agency to Optionee pursuant to this
Section 2.2.
3. FUND RESERVATION.
As additional consideration for the granting of this Option, Optionee hereby
agrees to submit to HUD an application for the Fund Reservation on or before the
deadline date for such submission occurring in May 2001 as imposed by HUD, and,
thereafter, Optionee shall perform all actions as may be reasonably required to secure
the Fund Reservation from HUD. Optionee shall request that HUD provide copies of
all correspondence and notices regarding the Fund Reservation to Agency.
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4. CONDITIONS TO CLOSE OF ESCROW.
If Optionee receives the Fund Reservation and exercises the Option described
herein, the Agency and Optionee shall open escrow as provided for in subsection (d)
below and the following shall be conditions to close of escrow for the conveyance of
the Property by Agency to Optionee:
a. Conveyance of the Property for the agreed -upon purchase price
("Purchase Price"). With respect to the Purchase Price, the Purchase Price for
the Property shall be $1,000,000 or the HUD determination of value for a "fully
improved site" whichever is less. The Optionee agrees to consult with the
Agency if HUD requires Optionee to obtain its appraisal by utilizing an appraiser
from the list of appraisers approved by HUD.
b. Agency and Optionee shall have entered into a Disposition and
Development Agreement acceptable to HUD. The DDA shall contain the usual
and customary terms of such agreements entered into by the Agency for
affordable housing projects, shall contain provisions for the sale of real property
for the Purchase Price, and shall refer to or include, as applicable, the other
terms set forth in this Section 4.
C. A regulatory agreement containing covenants, conditions, and
restrictions pertaining to the development, operation, and maintenance of the
Property of an 80-unit senior citizen rental housing project, with all of the units
to be leased at rents not exceeding the maximum "affordable rent" under
California law for persons and families of "very low income," i.e., persons and
families whose income does not exceed fifty percent (50%) of the median
income for Riverside County, adjusted for family size. The regulatory agreement
shall run for not less than thirty (30) years from the date Project construction
is completed. The regulatory agreement shall further provide that the Project
shall comply with all HUD requirements with respect to rental rates, rental
policies, availability to the general, public, maintenance, reporting requirements
arid any other matter which is the subject of applicable HUD regulations. The
regulatory agreement shall be subject to HUD approval.
d. An escrow shall be opened with the Escrow Department at First
American Title Insurance Company or other escrow company mutually
acceptable to Optionee and Agency, within five(5) business days of the exercise
of the Option, with the following terms applicable:
(i) the Purchase Price shall be paid at close of escrow;
(ii) Agency shall pay the premium for a CLTA standard owner's
policy of title insurance in the amount of the Purchase Price subject to
the Approved Title Exceptions and the exceptions Optionee approved or
deemed to have approved pursuant to Section 2.1, and Optionee shall
pay for any extended or additional coverage or endorsements.
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(iii) Agency shall pay for documentary stamps on the deed;
(iv) Agency and Optionee shall each pay for one-half of the
escrow charges;
(v) taxes and assessments shall be prorated to close of escrow;
and
(vi) escrow closing shall be subject to Optionee obtaining a Firm
Commitment for Capital Advance Financing from HUD and any other
funds required for the project, with the closing of the HUD and any other
financing occurring concurrently with the close of escrow for the
Property.
e. The close of escrow for the conveyance of the Property shall be
on or before the date that is sixty (60) days following Optionee's exercise of the
Option.
f. Optionee shall accept the Property in its "As -Is", "Where -Is" and
"With -All -Faults" condition. Agency staff has no actual knowledge of the
presence of hazardous substances or materials in, under, or upon the Property.
g. Agency's reasonable approval of Optionee's Project financing other
than the HUD Capital Advance including sources and uses of funds and a
Project pro forma.
h. Approval by the City of La Quinta of any land use approvals
required for the Project, including but not limited to a Site Development Permit.
5. MISCELLANEOUS.
5.1 Attorney's Fees. In the event of any dispute between the parties hereto
involving the covenants or conditions contained in this Option or arising out of the
subject matter of the Option, the prevailing party shall be entitled to recover, and the
other party agrees to pay, all reasonable fees, expenses and costs, including, but not
limited, to attorneys' fees and expert witness fees.
5.2 Notices. All notices required to be delivered under this Agreement to the
other party must be in writing and shall be effective (i) when personally delivered by
the other party or messenger or courier thereof; (ii) three (3) business days after
deposit in the United States mail, registered or certified; (iii) twenty-four (24) hours
after deposit before the daily deadline time with a reputable overnight courier or
service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy of
such transmission shall be thereafter delivered in one of the methods described in the
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foregoing (i) through (iii); in each case postage fully prepaid and addressed to the
respective parties as set forth below or to such other address and to such other
persons as the parties may hereafter designate by written notice to the other parties
hereto:
To Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Thomas P. Genovese, Executive Director
Telecopier: (760) 777-7101
Copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Fourteenth Floor
Costa Mesa, California 92626
Attn: M. Katherine Jenson, Esq.
Telecopier: (714) 546-9035
To Optionee: Southern California Presbyterian Homes
516 Burchett Street
Glendale, California 91203
Attn: Sally Little
Telecopier: (818) 247-3871
5.3 Broker's Fees. Agency and Optionee each represents and warrants to the
other than no third party is entitled to a real estate or broker's commission and/or
finder's fee with respect to the transactions contemplated by this Agreement. Each
party agrees to indemnify and hold the other harmless from and against all liabilities,
costs, damages and expenses, including, without limitation, attorney's fees, resulting
from any claims or fees or commissions, based upon agreements by it, if any, to pay
broker's commissions and/or finder's fees.
5.4 Assignment. Optionee shall have no right to assign the Option herein
granted or any right or privilege Optionee might have in the Option, by operation of law
or otherwise, without the prior written consent of Agency, which consent may be
withheld in Agency's sole and absolute discretion. Any attempt by Optionee to make
an assignment other than with the prior written consent of Agency shall be null and
void. Notwithstanding the foregoing, without the consent of Agency, Optionee shall
have the right to assign this Agreement to a non-profit corporation formed for the sole
purpose of owning and operating the project as required by HUD, but such consent
shall not be effective unless and until the assigness agrees in writing to carry out and
observe Optionee's agreements hereunder.
5.5 Time of the Essence. Time is of the essence with respect to each of the
terms, covenants and conditions of this Agreement.
5.6 Binding on Heirs. Subject to the limitations set forth in Section 5.4
above, this Agreement shall be binding upon and inure to the benefit of the successors
and assigns of the respective parties hereto.
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5.7 Modification Waivers and Entire Agreement. Any amendments or
modifications to this Agreement must be in writing and executed by both parties to
this Agreement. No delay or omission by either party hereto in exercising any right or
power accruing upon the compliance or failure of performance by the other party
hereto under the provisions of this Agreement shall impair any such right or power or
be construed to be a waiver thereof. A waiver by either party hereto of a breach of any
of the covenants, conditions or agreements hereof to be performed by the party shall
not be construed as a waiver of any succeeding breach of the same or other
covenants, agreements, restrictions or conditions thereof This Agreement contains the
entire agreement of the parties hereto with respect to the matters covered hereby, and
all negotiations and agreements, statements or promises between the parties hereto
or their agents with respect to this transaction are merged in this Agreement, which
alone expresses the parties' rights and obligations. No prior agreements or
understandings not contained herein shall be binding or valid against either of the
parties hereto.
5.8 Interpretation• Governing Law; Forum. This Agreement shall be construed
according to its fair meaning and as if prepared by both parties hereto. This Agreement
shall be construed in accordance with the laws of the State of California in effect at
the time of the execution of this Agreement. Title and captions are for convenience
only and shall not constitute a portion of this Agreement. As used in this Agreement,
masculine, feminine or neuter gender and the singular or plural number shall each be
deemed to include the others wherever and whenever the context so dictates. In the
event of any litigation between the parties hereto, the Municipal and Superior Courts
of the State of California in and for the County of Riverside shall have exclusive
jurisdiction.
5.9 Severability. If any term, provision, condition or covenant of this
Agreement Ior the application thereof to any party or circumstances shall, to any
extent, be held invalid or unenforceable, the remainder of this instrument, or the
application of such term, provision, condition or covenant to persons or circumstances
other than those as to whom or which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
5.10 Authority to Execute. The person(s) executing this Agreement on behalf
of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they
are duly authorized to execute and deliver this Agreement on behalf of said party, (iii)
by so executing this Agreement, such party is formally bound to the provisions of this
Agreement, and (iv) the entering into this Agreement does not violate any provision
of any other agreement to which said party is bound.
5.11 Execution in Counterpart. This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement binding on all parties
hereto, notwithstanding that all parties are not signatories to the original or the same
counterpart.
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5.1 2 No Recordation. Optionee shall not cause or allow this Agreement, short
form, memorandum or assignment hereof to become of record in any public office
without Agency's prior written consent, which consent may be withheld in Agency's
sole discretion and absolute discretion.
5.13 Exhibit. Exhibit "A" attached hereto is hereby incorporated herein by this
reference.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement the day and year first above written.
ATTEST:
�T
JU E GREEK, Agency Se4etary
APPROVED AS TO FORM
UTAN & TUCKER, LLP
C �, A �7�
M. ATH RINE JENSON,
Ad
e cy Legal Counsel
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and
politic II
TERRY H NDERSON, Chairperson
"AGENCY"
SOUTHERN CALIFORNIA
PRESBYTERIAN HOMES, a California
non prof, public b efit corporation
By:
affordable
Its: Vice President, Project Development
"OPTIONEE"
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EXHIBIT "A"
LEGAL DESCRIPTION OF AGENCY PARCEL
[TO BE INSERTED]
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EXHIBIT "A"
LEGAL DESCRIPTION OF AGENCY PARCEL
Lot 285 of Tract 24230, as shown by Map on file in Book 214, Pages 69 through 82,
inclusive, of maps, records of Riverside County, California.
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