2017 05 17 HC SpecialtaQ��
GEM of the DESERT
HC agendas and staff reports are now available
on the City's web page: www.laquintaca.gov
HOUSING COMMISSION
AGENDA
Community Room at Washington Street Apartments
42-800 Washington Street, La Quinta
SPECIAL MEETING
WEDNESDAY, MAY 17, 2017 AT 6:00 P.M.
CALL TO ORDER
1. ROLL CALL
PLEDGE OF ALLEGIANCE
PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA
At this time, members of the public may address the Housing Commission on any
matter not listed on the agenda. Please complete a "Request to Speak" form and limit
your comments to three minutes. The Housing Commission values your comments;
however in accordance with State law, no action shall be taken on any item not
appearing on the agenda unless it is an emergency item authorized by GC 54954.2(b).
CONFIRMATION OF AGENDA
CONSENT CALENDAR
1. APPROVE MINUTES OF APRIL 12, 2017
BUSINESS SESSION
1. REVIEW AND RECOMMEND AN AFFORDABLE HOUSING AND PROPERTY
DISPOSITION AGREEMENT AND ASSCOCIATED SUMMARY REPORT BETWEEN THE
LA QUINTA HOUSING AUTHORITY AND COACHELLA VALLEY HOUSING
COALITION TO PURCHASE PROPERTY LOCATED AT THE SOUTHEAST CORNER OF
HIDDEN RIVER ROAD AND WASHINGTON STREET FOR THE PURPOSE OF
REHABILITATING CONSTRUCTING AND OPERATING AFFORDABLE RENTAL
HOUSING
HOUSING COMMISSION AGENDA 1 MAY 17, 2017
SPECIAL MEETING
STUDY SESSION - NONE
DEPARTMENT REPORTS
ESTABLISHMENT OF A HOUSING AUTHORITY LOCAL AGENCY INVESTMENT FUND
(LAIF) ACCOUNT
REPORTS AND INFORMATIONAL ITEMS
COMMISSIONERS' ITEMS
ADJOURNMENT
The next regular meeting of the La Quinta Housing Commission will be held on June 7,
2017, commencing at 6:00 p.m. at the La Quinta Study Session Room, 78-495 Calle
Tampico, La Quinta, CA 92253.
DECLARATION OF POSTING
I, Gilbert Villalpando, Housing Coordinator, of the City of La Quinta, do hereby declare
that the foregoing Agenda for the Housing Commission meeting was posted on the
City's website, near the entrance to the Council Chambers at 78-495 Calle Tampico,
and the bulletin boards at the Stater Brothers Supermarket at 78-630 Highway 111,
and the La Quinta Cove Post Office at 51-321 Avenida Bermudas, on May 12, 2017.
DATED: May 12, 2017
Gilbert C. Villalpando, Housing Coordinator
City of La Quinta, California
PUBLIC NOTICES
The La Quinta City Study Session Room is handicapped accessible. If special equipment is needed for the
hearing impaired, please call the City Clerk's office at 777-7103, twenty-four (24) hours in advance of the
meeting and accommodations will be made.
If special electronic equipment is needed to make presentations to the Commission, arrangements should be
made in advance by contacting the City Clerk's office at 777-7103. A one (1) week notice is required.
If background material is to be presented to the Commission during a Housing Commission meeting, please be
advised that eight (8) copies of all documents, exhibits, etc., must be supplied to the Secretary for distribution.
It is requested that this take place prior to the beginning of the meeting.
Any writings or documents provided to a majority of the Commission regarding any item(s) on this agenda will
be made available for public inspection at The Hub counter at City Hall located at 78-495 Calle Tampico, La
Quinta, California, 92253, during normal business hours.
HOUSING COMMISSION AGENDA 2 MAY 17, 2017
SPECIAL MEETING
CONSENT CALENDAR ITEM NO. 1
HOUSING COMMISSION
MINUTES
WEDNESDAY, APRIL 12, 2017
A regular meeting of the Housing Commission was called to order at 6:00 p.m. by
Chairperson Rogers.
PRESENT: Commission Members Johnson, Long and Chair Rogers
ABSENT: None
PLEDGE OF ALLEGIANCE
PUBLIC COMMENT ON MATTERS NOT ON AGENDA - None
CONFIRMATION OF AGENDA - Confirmed
CONSENT CALENDAR
1. APPROVE MINUTES OF MARCH 22, 2017
Motion - A motion was made and seconded by Commissioners Long/Johnson to
approve the Consent Calendar as recommended. Motion passed unanimously.
BUSINESS SESSION
1. REVIEW AND RECOMMEND AMENDMENT NO. 3 TO THE AFFORDABLE HOUSING
AGREEMENT BY AND BETWEEN THE LA QUINTA HOUSING AUTHORITY AND
HABITAT FOR HUMANITY OF THE COACHELLA VALLEY, INC.
Management Specialist Villapando presented the staff, which is on file in the Clerk's
Office.
Motion - A motion was made and seconded by Commissioners Long/Johnson to
approve Amendment No. 3 to the Affordable Housing Agreement as recomended.
Motion passed unanimously.
2. REVIEW LA QUINTA HOUSING AUTHORITY ANNUAL REPORT FOR FISCAL YEAR
2015/16 PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34328.
Management Specialist Villapando presented the staff report, which is on file in the
Clerk's Office.
HOUSING COMMISSION MINUTES
1
APRIL 12, 2017
3
Motion - A motion was made and seconded by Commissioners Long/Johnson to
approve the Fiscal Year 2015-16 Housing Authority Annual Report as recommended.
Motion passed unanimously.
STUDY SESSION - None
DEPARTMENT REPORTS
1. VERBAL REPORT FROM STAFF ON DISPOSITION AND DEVELOPMENT AGREEMENT
FOR WASHINGTON STREET APARTMENTS
Development Consultant McMillen provided a verbal update on the project.
PUBLIC SPEAKER: Ms. Linda Gunnett, La Quinta - requested clarification on the cost of
the development.
Staff explained the funding of the project.
REPORTS AND INFORMATIONAL ITEMS - None
COMMISSIONER ITEMS - None
DIRECTOR ITEMS - None
ADJOURNMENT
A motion was made and seconded by Commission Members Long/Johnson to adjourn
the meeting at 6:47 p.m. Motion passed unanimously.
Respectfully submitted,
Marilyn Monreal, Management Assistant
HOUSING COMMISSION MINUTES 2 APRIL 12, 2017
4
BUSINESS SESSION ITEM N0.1
City of La Quinta
HOUSING COMMISION MEETING: May 17, 2017
STAFF REPORT
AGENDA TITLE: REVIEW AND RECOMMEND AN AFFORDABLE HOUSING AND PROPERTY
DISPOSITION AGREEMENT AND ASSCOCIATED SUMMARY REPORT BETWEEN THE LA
QUINTA HOUSING AUTHORITY AND COACHELLA VALLEY HOUSING COALITION TO
PURCHASE PROPERTY LOCATED AT THE SOUTHEAST CORNER OF HIDDEN RIVER ROAD AND
WASHINGTON STREET FOR THE PURPOSE OF REHABILITATING CONSTRUCTING AND
OPERATING AFFORDABLE RENTAL HOUSING
RECOMMENDATION
Recommend an Affordable Housing and Property Disposition Agreement and Associated
Summary Report by and between the La Quinta Housing Authority and Coachella Valley
Housing Coalition.
EXECUTIVE SUMMARY
October 2008 - the La Quinta Redevelopment Agency (Agency) purchased the
Washington Street Apartments (WSA) and the unimproved real property adjacent
to the complex.
The Agency has been dissolved and the Sites, together with the other housing
assets of the Agency, have been transferred to the La Quinta Housing Authority
(Authority) for development of housing projects.
The Summary Report (attachment 1) sets forth certain details of the proposed
Affordable Housing and Property Disposition Agreement (AHPDA) (attachment 2)
by and between the Coachella Valley Housing Coalition (Developer) and the
Authority. The Agreement facilitates the transfer of the existing Washington
Street Apartments and an adjacent vacant land parcel ("Site"), and the renovation,
development and operation thereon of a 138 unit senior and disabled adult
complex.
FISCAL IMPACT - The AHPDA will obligate the Authority to invest $10,400,000 to the
project. To date, the Authority has expended $8,783,738 to acquire property, design
roadway and utility infrastructure improvements, prepare a specific plan, and conduct the
environmental review process.
BACKGROUND/ANALYSIS
In October 2008, the Agency purchased the Washington Street Apartments (WSA), a 72-
unit senior and adults with disabilities affordable housing complex on approximately 4.7
acres. The Agency also purchased approximately 6.8 acres of unimproved real property
5
adjacent to WSA for the development of future affordable rental housing. The properties
were purchased with tax increment funds that have an obligation to improve and
increase the supply of affordable housing within the City.
To effectuate the development of affordable housing, the Authority negotiated the
proposed AHPDA with Developer to rehabilitate the existing WSA units and develop
additional units on the WSA property and the adjacent unimproved real property. The
project details and development terms and conditions are defined in the AHPDA.
The WSA units were built in 1980, and are in need of substantial rehabilitation. The WSA
property will undergo the rehabilitation of the existing 72-units, demolition of the
community building and attached managers unit, and construction of twenty-six (26)
new one bedroom units, a new community building, and related amenities and site
improvements. The unimproved real property will have the construction of forty-two (42)
new one bedroom units, a new community building, and related amenities and site
improvements.
The proposed project meets the goals and objectives of the Agency while increasing the
supply of affordable housing and eliminating blight in the city.
• The proposed projects(s) should further the goals, policies and programs of the
Authority's Housing Element and comply with the Housing Successor affordable
housing requirements as defined in the California Health and Safety Code.
• Provide a mix of units affordable to lower -income households at various levels,
such as extremely low, very low, and low-income households, especially intended
to address workforce housing needs.
• Include units that could be reserved for and/or generally available to special needs
households, which may include seniors and disabled adults households defined as
having special housing needs.
• Include long-term enhancement of both the economic and physical development
of the current area, as well as create a balanced, housing environment that would
attract a more diverse and vibrant community.
The Agreement will be the subject of a joint public hearing of the Authority Board and City
Council on June 6, 2017, at 5:00 PM or thereafter in the City Council Chambers of the City
of La Quinta located at 78-495 Calle Tampico, La Quinta, California.
ALTERNATIVES
Staff does not recommend an alternative as approval is required for the application of
tax credits by the Developer.
Prepared by: Gil Villalpando, Management Specialist
Attachments: 1. Summary Report
2. Washington Street Apartments AHPDA
FT
ATTACHMENT 1
SUMMARY REPORT
Affordable Housing and Property Disposition Agreement
Coachella Valley Housing Coalition
and the
La Quinta Housing Authority
June 6, 2017
INTRODUCTION
This document is the Summary Report ("Report") for the Affordable Housing and
Disposition Agreement ("Agreement") by and between Coachella Valley Housing Coalition
("Developer") and the La Quinta Housing Authority ("Authority"). The Agreement
facilitates the transfer of the existing Washington Street Apartments and an adjacent
vacant land parcel ("Site"), and the renovation, development and operation thereon of a
138 unit senior and disabled adult complex ("Development"). The Site is located
immediately adjacent to and east of Washington Street, and south of Hidden River Road.
The dwellings will be affordable to extremely low-, very low-, low- and moderate -income
senior and disabled adult households, with 2 remaining manager units affordable to
moderate income households.
This Report has been prepared pursuant to California Government Code Section 52201 and
presents the following:
• A summary of the proposed Development.
• The cost of the Agreement to the Authority.
• The estimated value of the interest to be conveyed, determined at the highest and
best uses permitted.
• An explanation of why the sale of the property pursuant to the Agreement will assist
in the elimination of blight.
THE DEVELOPMENT
City and Former Redevelopment Agency (Agencyl
Both the City of La Quinta ("City") and the Agency are mandated by the State of California to
continually seek opportunities to increase and improve the supply of housing affordable to
very low-, low- and moderate -income households. State Planning Laws mandate that the
City pursue a housing mix that accommodates both local and regional housing demand for
affordable dwellings. The CRL provides that the Agency insure that a minimum of 15% of
all new and substantially rehabilitated dwellings within its redevelopment project areas
7
are affordable to very low-, low- and moderate -income households, and of these, 40% must
be affordable to very low-income households. If these dwellings are owner occupied, they
must be affordable for 45 years; if they are rental units, they must remain affordable for 55
years.
The Site
The Site is located in La Quinta Redevelopment Project Area No. 2 ("Project Area No. 2"),
directly adjacent to and east of Washington Street and south of Hidden River Road. It
consists of the existing Washington Street Apartments and a 6.8 acre vacant land parcel
immediately adjacent to the south. The Apartment site is 4.79 acres and was constructed in
1980, consisting of nine, single story, steel and wood framed apartment buildings, and a
single story community building with attached managers unit. The Agency purchased the
properties in 2007 and 2008 respectively for the purposes of preserving and developing
affordable housing. The existing apartment complex operates as a United States
Department of Agriculture (USDA) Rural Development (RD) project, providing rental
subsidy to 72 senior and disabled adult households.
The City of La Quinta General Plan designates the Site as Medium/High Density Residential.
There is an underlying zoning designation identified as High Density Residential,
permitting the proposed development.
Project Description
In 2008, as part of the conditions to approve the purchase of the Apartments by the Agency,
USDA required that a future substantial rehabilitation and modernization of the project be
constructed. The Agency underwrote site planning, engineering and design efforts to
secure entitlements for the project. In 2011 the Project was suspended when the California
Legislature dissolved all redevelopment agency's in the State of California, including the
Agency. Prior to the dissolution of the Agency, the City of La Quinta ("City") established the
Authority, which now has State approval to utilize 2014 and 2016 housing bonds. These
funds when combined with 9% tax credit equity that the Developer proposes are sufficient
to construct the project as designed and entitled.
The project, located on approximately 11.5 acres, will include the substantial rehabilitation
of all existing units, construction of 68 new units, construction of 2 new community
buildings, laundry facilities, a health center, and 2 swimming pools. The construction of the
project is wood frame with color stucco walls and low sloping roofs constructed on
concrete slab foundations. Formal outdoor recreation areas include roughly 2 acres of
parkway/green belt for recreation and social gatherings, a dog park, two swimming pools
and new sound wall along Washington Street. Project to be constructed per the plans and
specifications developed by Studio E Architects Inc. and consistent with the project
entitlements: SDP 2015-003 and SDP 2016-0002.
2
8
Affordable Housing Mix
The Developer will be using 9% tax credit financing to fund a portion of the design and
construction costs. In order to qualify for this financing, 138 dwellings will be affordable to
extremely low, very low- and low-income family households; the remaining 2 dwellings
(the on -site manager units) will be affordable to moderate -income households.
The dwellings will remain affordable to said households for a minimum of 55 years. 24
units will be affordable to extremely low-income senior and disabled adult households, 110
units will be affordable to very low-income senior and disabled adult households, 4 units
will be affordable to low-income senior and disabled adult households, and 2 managers
units will be affordable to moderate -income family households.
In 2017 extremely low income is defined as households earning less than or equal to
$14,100 (one person) or $16,100 (two person); very low-income is defined as households
who earn $23,450 (one person) to $26,800 (two person); low-income is defined as
households who earn $37,550 (one person) to $42,900 (two person); and moderate -
income is defined as households who earn $54,600 (one person) to $78,000 (four person).
Inconic
catogory
Number of Parsons
1
2
3
4
Extr[,m[.ly Low Incximt,.
14,100
16,100
Very Low Income
25,450
26,800
Low I n ro m c
37,550
42,900
Moderate I n co m('_
54,600
62,400
70,200
78,000
THE COST OF THE AGREEMENT TO THE AUTHORITY
The cost of the Agreement to the Authority as outlined in the table below will be
$30,962,918 of which there is $8,783,738 in property and acquisition cost, $2,362,057 in
planning, design, engineering, management, relocation and final disposition costs,
$10,400,000 in development costs, and $9,417,123 of total interest cost associated with the
2014 and 2016 housing bonds.
Agency costs
Apartments and Existing Lend
$
-8,78,1,73S
Planning, D€-,signr Engin�rring, Management,
Relocation, Final Disposition
$
2,162,057
2014 and 2016 Bond Pr€ rcrds
$
10,400,000
Total Interest 2014 and 2016 Bonds
$
9,417,122
TOTALCOST
.$
30,962,918
3
9
The Authority transfer of the Site including reserve accounts and $9,400,000 of 2016 Bond
Proceeds will be secured by a deed of trust that will accrue interest at 0%, There will be a
second deed of trust referred to as a "plan loan" that will consist of Authority work
completed, relocation, and $1,000,000 of remaining 2014 housing bond proceeds. This
deed of trust in the amount of $2,366,722 will accrue interest at applicable federal rate
(AFR) (approximately 2.7%).
Authority Loan Detail
Exi3ting Apartments 73 units
3,325.25Z
Retii-.rves fram exiatinp apartrnents
1,07q.M6
Adja�ant var_ant land parrf l
$
1,2.fiD,DDD
201fi Hpusinq Bands
9,40D,DDD
Totall Lnan
1:.9,0.9R.7RD
Autharity work mmpletE�d
1,366,777.
2014 Hnai4ing, Band,
1,CK?D,DDD
Totall "Plan Loan"
Totall of Authority Loan.
17,47.9.D1 D
The Housing Bond proceeds in the amount $10,400,000 will be disbursed as work is
completed consistent with the development budget as attached in the Agreement.
Per the Agreement, the Authority Loans will be repaid by the Developer through a sharing
of residual receipt income, the Authority receiving 50% of the residual receipt payments
(revenue that remains after operating costs and debt service payments on the USDA loan).
Following industry standards for 9% tax credit transactions, the Authority has agreed to an
allocation of the residual receipt income of 50% to the Authority and 50% to the Developer.
The total residual receipt income is projected to be $376,548 after year 5 of operation,
$649,613 after year 10 of operation, and $767,503 after year 15 of operation; the Agency
would receive 50% of this income.
Property Acquisition
The former Redevelopment Agency purchased the 6.8 acre vacant land parcel in 2007 for
$4,608,962 or $15.56 per square foot of land area. In 2008 the Agency finalized the
purchase of Washington Street Apartments for a total cost of $6,507,529. After the Agency
assumed the existing loans on the property the net cash investment was $4,174,777.
Project Area No. 2 Low- and Moderate -Income Housing Fund revenue was used to fund
acquisition costs for both properties.
Planning, Design, Engineering and Relocation Costs
The Authority contracted for the planning, design, engineering, and relocation services
required for the development of the project. These contracts with the exception of
relocation will be assigned to the Developer when the Agreement is executed. Relocation
services and associated costs of approximately $375,000 will be charged back to the
4
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project and paid for by the Developer. The total of these costs is $1,366,722 and is a portion
of the "plan loan" as identified below.
Development Costs
The Developer projects final design and construction costs, including land, of $46,907,072
per unit. The sources of funds are as follows:
So rct?s
US 515 Inan
F,2R,F,4CI
Net Valkin Vacant Lanrirand hpararn�nts'`
2014 Bond Prac�ad:4 ( Plan Lois n)
2, 9fi S. 72 2.
201 fi Band Proci-.ed ti
9,40D. DDO
6p.nu.ral Partnp.r Fquity
7,.576
Tax Cri-.d it Fq u ity (9 ., c r�d itti7
2 ,909, R%
TOTAL
46,970. D7)
Inc_la dF i rp.servR accaunt halanr.PS
h i;;h lightL rd it pms rL�present ALitlhority i ny-p.stm ink
Note that minor variances in the amounts listed above will occur depending on actual
reserve balances, loan balances, and yield on tax credit equity at the time of closing. The
Authority's investment of housing bond proceeds is not subject to change.
Source and Cost of Authority Funds
The Authority's expenditure of 2014 and 2016 housing bond proceeds in the combined
amount of $12,762,057 carries interest expense over the term of the bonds of
approximately $9,417,123. As mentioned in the property acquisition section above the
former Redevelopment Agency purchased the Site in 2007 and 2008 with $8,783,738 of
Project Area No. 2 Low- and Moderate -Income Housing Fund revenue.
ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED
Two appraisals from Froboese Realty Group, Inc. identified value opinions, as of May 5,
2017 and May 10, 2017, respectively. The un-restricted (market rents) value opinion of the
existing apartments is $5,500,000 and $1,260,000 for the vacant land.
ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED, DETERMINED AT THE USE
AND WITH THE CONDITIONS, COVENANTS AND DEVELOPMENT COSTS REQUIRED BY
THE AGREEMENT
The Authority will have two separate loans with the Developer. A plan loan in the amount
of $2,366,722 with interest accruing at applicable federal rate (AFR) or roughly 2.7% and a
loan representing the value of land and structures combined with 2016 bond proceeds for
5
11
construction costs in the amount of $15,058,288 at 0%. Payments for both of these loans
will be generated from 50% of the residual receipt income payable annually and be due in
full at the end of the 55 year term.
EXPLANATION OF WHY THE SALE OF THE PROPERTY PUSUANT TO THE AGREEMENT
WILL ASSIST IN THE ELIMINATION OF BLIGHT
The conveyance of the existing apartments and adjacent vacant land parcel and
construction of the development will address the following blighting conditions within
Project Area No. 2:
• Increase and improve the supply of affordable housing within the community
through the renovation, construction and operation of 138 dwellings that will be
affordable to extremely low, very low-, and low-income senior and disabled adult
households, with 2 remaining manager units affordable to moderate income
households.
The Development has been identified in the former RDA's Five Year Implementation Plan.
The Agreement will be the subject of a joint public hearing of the Authority Board and City
Council on June 6, 2017, at 5:00 PM or thereafter in the City Council Chambers of the City of
La Quinta located at 78-495 Calle Tampico, La Quinta, California.
6
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ATTACHMENT 2
AFFORDABLE HOUSING AND PROPERTY DISPOSITION AGREEMENT
By and Between
LA QUINTA HOUSING AUTHORITY
and
COACHELLA VALLEY HOUSING COALITION
Dated as of 2017
882/015610-0040
9930825.4 a05/12/17
13
AFFORDABLE HOUSING AND PROPERTY DISPOSITION AGREEMENT
THIS AFFORDABLE HOUSING AND PROPERTY DISPOSITION
AGREEMENT (the "Agreement") is made and entered into as of ,
2017 (the "Effective Date"), by and between the LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic (the "Authority"), and COACHELLA VALLEY
HOUSING COALITION, a California nonprofit public benefit corporation
(the "Developer"), with reference to the following:
RECITALS
A. Authority is the owner in fee of that certain real property (the "WSA Real
Property") located at 42-800 Washington Street, in the City of La Quinta, County of
Riverside, State of California, more particularly described in Attachment No. 1A, which
WSA Real Property is improved with an apartment complex commonly known as the
Washington Street Apartments consisting of seventy-three (73) apartment units (the
"Existing WSA Units"). The WSA Real Property comprises approximately four and
seven tenths (4.7) acres.
B. Authority is also the owner in fee of that certain real property (the
"Unimproved Real Property") located adjacent to the WSA Real Property, in the City
of La Quinta, County of Riverside, State of California, more particularly described
in Attachment No.1 B. The Unimproved Real Property is unimproved, and comprises
approximately five and seven tenths (5.7) acres.
C. Developer is an experienced developer and operator of multifamily rental
affordable Projects in California.
D. Authority was established to increase, improve, and preserve the City of
La Quinta's supply of low and moderate income housing. Pursuant to Health and
Safety Code section 34176(b) and Resolution No. 12-11, adopted by the City Council of
the City of La Quinta ("City") on January 10, 2012, the Authority is the housing
successor entity to the former La Quinta Redevelopment Agency (the "Agency").
Pursuant to said resolution, all housing assets and functions of the Agency were
transferred to Authority on February 1, 2012.
E. Authority has processed through the City and obtained approval from the
City of all land use entitlements, plans, and construction drawings necessary to provide
for the following: (i) on the WSA Real Property, the rehabilitation of seventy-two (72) of
the Existing WSA Units, demolition of one (1) of the Existing WSA Units, and
construction of twenty-six (26) new apartment units, a new community building, and
related amenities and site improvements; and (ii) on the Unimproved Real Property, the
construction of forty-two (42) new apartment units, a new community building, and
related amenities and site improvements.
F. The purpose of this Agreement is to set forth the terms and conditions
pursuant to which (i) Authority will sell the "Property" (as defined below) to Developer,
882/015610-0040
9930825.4 a05/12/17 -2-
14
(ii) Developer will perform the rehabilitation and construction activities described in
Recital E above and thereafter operate all but two (2) of the new and rehabilitated
apartment units (which two (2) units shall be managers' units) as a cohesive and
comprehensive senior affordable rental housing development with long-term
affordability restrictions; and (iii) Authority will provide one or more loans to Developer to
assist Developer with the costs Developer incurs to acquire the Property and perform
the foregoing rehabilitation and construction activities.
G. Authority's sale of the Property to Developer and provision of financial
assistance to Developer, and Developer's rehabilitation, development, and operation on
the Property of an affordable rental housing development pursuant to the terms of this
Agreement, are in furtherance of Authority's goals to provide affordable housing and to
preserve existing affordable housing units in the City of La Quinta, and in furtherance of
Developer's purpose to develop, operate, and manage affordable housing for low
income households.
NOW, THEREFORE, for and in consideration of the foregoing Recitals, which
are incorporated herein by this reference, and the mutual promises, covenants, and
conditions herein contained, Authority and Developer hereto agree as follows:
1. DEFINITIONS
As used in this Agreement, capitalized terms are defined where first used or as
set forth in this Section 1. Capitalized terms used in an attachment attached hereto and
not defined therein shall also have the meanings set forth in this Section 1.
"Affiliate" means any person or entity directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with Developer
which, if Developer is a partnership or limited liability company, shall include each of the
constituent members or partners, respectively thereof. The term "control" as used in
the immediately preceding sentence, means, with respect to a person that is a
corporation, the right to the exercise, directly or indirectly, of more than fifty percent
(50%) of the voting rights attributable to the shares of the controlled corporation, and,
with respect to a person that is not a corporation, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of the
controlled person.
"Agency" has the meaning set forth in Recital D of this Agreement.
"Assignment of Contracts" means an assignment of contracts, permits,
intangible property, warranties and guaranties substantially in the form attached hereto
and incorporated herein as Attachment No. 9, to be executed by Authority for purposes
of transferring and assigning to Developer certain contracts and other documents and
rights held by Authority, including, without limitation, the WSA Contracts.
"Assignment of Leases" means an assignment substantially in the form
attached hereto and incorporated herein as Attachment No.7, to be executed by
882/015610-0040
9930825.4 a05/12/17 -3-
15
Authority for purposes of transferring and assigning to Developer the WSA Tenant
Leases.
"Authority" means the La Quinta Housing Authority, a nonprofit public benefit
corporation.
"Authority Deed of Trust (Plans)" means a deed of trust substantially in the
form attached hereto and incorporated herein as Attachment No. 15A, to be executed by
Developer pursuant to Section 5.2(a) in order to secure repayment of the Authority Note
(Plans).
"Authority Deed of Trust (Property and Construction)" means a deed of trust
substantially in the form attached hereto and incorporated herein as Attachment
No.1513, to be executed by Developer pursuant to Section 5.2(a) in order to secure
repayment of the Authority Note (Property and Construction).
"Authority Loan (Plans)" has the meaning set forth in Section 5.2(a) of this
Agreement.
"Authority Loan (Property and Construction)" has the meaning set forth in
Section 5.2(a) of this Agreement.
"Authority Loans" means the Authority Loan (Plans) and the Authority Loan
(Property and Construction).
"Authority Note (Plans)" means a promissory note substantially in the form
attached hereto and incorporated herein as Attachment No.14A, to be executed by
Developer in favor of Authority to evidence the obligation of Developer to repay the
Authority Loan (Plans).
"Authority Note (Property and Construction)" means a promissory note
substantially in the form attached hereto and incorporated herein as Attachment
No.1413, to be executed by Developer in favor of Authority to evidence the obligation of
Developer to repay the Authority Loan (Property and Construction).
"Authority Regulatory Agreement" means a regulatory agreement substantially
in the form attached hereto and incorporated herein as Attachment No.17, which will
establish certain restrictive covenants against the Property.
"Authority Title Policy" has the meaning set forth in Section 6.2(o) of this
Agreement.
"Building Permit" means all permits issued by City and required for
commencement of construction of the Project.
"City" means the City of La Quinta, California.
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"Close of Escrow" and/or the "Closing" shall mean the consummation of the
transactions contemplated by this Agreement to occur through the Escrow including the
conveyance of fee title to the Property from Authority to Developer.
"Closing Date" shall mean the date that the Grant Deed is recorded in the
Official Records of Riverside County, which shall occur, if at all, no later than the
Outside Closing Date.
"Construction Contract" has the meaning set forth in Section 6.2(f) of this
Agreement.
"Construction Lender" means the lender that provides construction financing for
the Project. The Construction Lender may or may not also be the Take -Out Lender, if
any. The Construction Lender shall be an Institutional Lender.
"Construction Loan" means the construction loan for the Project, in the
anticipated amount of [Twenty -Six Million Five Hundred Forty Thousand Four Hundred
Twenty -Nine Dollars ($26,540,429)], which is secured by the Construction Loan Security
Documents.
"Construction Loan Security Documents" means the documents and
instruments required by the Construction Lender to secure the Construction Loan.
"County" means the County of Riverside, California.
"Conversion Date" has the meaning set forth in the Construction Loan Security
Documents, or, if such term is not defined therein, means the date the Construction
Loan converts from a construction loan to a permanent loan.
"Design and Engineering Agreements" means all agreements with design and
engineering professionals for preparation of the plans, drawings and specifications upon
which the Building Permit will be issued.
"Developer" means Coachella Valley Housing Coalition, a California nonprofit
public benefit corporation.
"Developer Title Policy" has the meaning set forth in Section 6.30) of this
Agreement.
"Disbursement Request" has the meaning set forth in Section 5.2(b) of this
Agreement.
"Escrow" means the escrow to be opened with Escrow Holder for the
conveyance of the Property by City to Developer.
"Escrow Holder" means Lawyers' Title Insurance Company, with its offices
located at 888 S. Figueroa Street, Suite 2100, Los Angeles, California 90017, or such
other escrow company as may be agreed to by Developer and the Executive Director.
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"Event of Default" has the meaning set forth in Section 12.1 of this Agreement.
"Executive Director" means the person duly appointed to the position of
Executive Director of Authority, or his or her designee. The Executive Director shall
represent Authority in all matters pertaining to this Agreement. Whenever a reference is
made herein to an action or approval to be undertaken by Authority, the Executive
Director is authorized to act unless this Agreement specifically provides otherwise or the
context should otherwise require.
"Existing Indebtedness" means the outstanding indebtedness represented by
(i) the USDA Note, and (ii) the Provident Note.
"Existing Loan Documents" means the USDA Note, the USDA 2nd Deed of
Trust, the Provident Note, the Provident Deed of Trust, and all other documents
creating, evidencing, securing or otherwise relating to the Existing Indebtedness and all
amendments, modifications, renewals and extensions thereof.
"Existing WSA Tenants" means the residential tenants residing in the Existing
WSA Units as of the Effective Date.
"Existing WSA Units" has the meaning set forth in Recital A of this Agreement.
"Final Construction Documents" means the plans, drawings and specifications
prepared pursuant to the Design and Engineering Agreements, upon which the Building
Permit will be issued.
"First Round" means the first round for allocations of 9% Tax Credits following
the Effective Date.
"Frank R. Goodman" means Frank R. Goodman and Associates, a California
limited partnership.
"General Contractor" has the meaning set forth in Section 6.2(e) of this
Agreement.
"Governmental Requirements" means all laws, ordinances, statutes, codes,
rules, regulations, orders and decrees, of the United States, the State of California, the
County of Riverside, the City and of any other political subdivision, agency or
instrumentality exercising jurisdiction over Authority, Developer, the Property, and/or the
Project.
"Grant Deed" means a grant deed substantially in the form attached hereto and
incorporated herein as Attachment No.5, pursuant to which Authority will transfer fee
title to the Property to Developer.
"Hazardous Materials" means any substance, material, or waste which is or
becomes regulated by any local governmental authority, the State of California, or the
United States Government, including, but not limited to, any material or substance
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which is (i) defined as a "hazardous waste", "acutely hazardous waste", "extremely
hazardous waste", or "restricted hazardous waste" under Section 25115, 25117 or
25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code, Division 20,
Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined
as a "hazardous material", "hazardous substance", or "hazardous waste" under
Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release Response Plans and Inventory), (iv) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances),
(v) petroleum, (vi) asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or
defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of
the California Code of Regulations, Chapter 20, (ix) designated as "hazardous
substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317),
(x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section
6903), (xi) defined as "hazardous substances" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
Section 9601 et seq., (xii) methyl -tertiary butyl ether, (xiii) perchlorate or (xiv) any other
substance, whether in the form of a solid, liquid, gas or any other form whatsoever,
which by any governmental requirements either requires special handling in its use,
transportation, generation, collection, storage, handling, treatment or disposal, or is
defined as "hazardous" or harmful to the environment. For purposes hereof,
"Hazardous Materials" excludes materials and substances in quantities as are
commonly used in the construction and operation of an apartment complex, provided
that such materials and substances are used in accordance with all applicable laws.
"HUD" means the United States Department of Housing and Urban
Development.
"Indemnitees" means Authority, City, and their respective directors, officers,
officials, members, employees, representatives, agents and volunteers.
"Institutional Lender" means any of the following institutions having assets or
deposits in the aggregate of not less than One Hundred Million Dollars ($100,000,000):
a California chartered bank; a bank created and operated under and pursuant to the
laws of the United States of America; an "incorporated admitted insurer" (as that term
is used in Section 1100.1 of the California Insurance Code); a "foreign (other state)
bank" (as that term is defined in Section 1700(1) of the California Financial Code); a
federal savings and loan association (Cal. Fin. Code Section 8600); a commercial
finance lender (within the meaning of Sections 2600 et seq. of the California Financial
Code); a "foreign (other nation) bank" provided it is licensed to maintain an office in
California, is licensed or otherwise authorized by another state to maintain an agency or
branch office in that state, or maintains a federal agency or federal branch in any state
(Section 1716 of the California Financial Code); a bank holding company or a subsidiary
of a bank holding company which is not a bank (Section 3707 of the California Financial
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Code); a trust company, savings and loan association, insurance company, investment
banker; college or university; pension or retirement fund or system, either governmental
or private, or any pension or retirement fund or system of which any of the foregoing
shall be trustee, provided the same be organized under the laws of the United States or
of any state thereof; and a Real Estate Investment Trust, as defined in Section 856 of
the Internal Revenue Code of 1986, as amended, provided such trust is listed on either
the American Stock Exchange or the New York Stock Exchange. is
hereby deemed to be an Institutional Lender.
"Investor" means the investor limited partner of the Partnership.
"Lead -Based Paint Disclosure and Acknowledgment" means a disclosure and
acknowledgment substantially in the form attached hereto and incorporated herein
as Attachment No. 12.
"Non -Foreign Affidavit" means an affidavit substantially in the form attached
hereto and incorporated herein as Attachment No.8.
"Notice of Affordability" means a Notice of Affordability Restrictions on Transfer
of Property substantially in the form attached hereto and incorporated herein
as Attachment No. 18, to be executed by Authority and Developer and recorded in the
Official Records to notify members of the public regarding the affordability restrictions
for the Property.
"Notices" has the meaning set forth in Section 13 of this Agreement.
"Notice to Tenants" means a notice substantially in the form attached hereto
and incorporated herein as Attachment No.11, advising the Existing WSA Tenants of
the transfer of title and assumption by Developer of the landlord's obligations under the
WSA Tenant Leases.
"Official Records" means the Official Records of the County.
"Outside Closing Date" means (i) the date that is six (6) months after the date
TCAC awards allocations of Tax Credits for the First Round if Developer obtains an
allocation of Tax Credits in the First Round, (ii) the date that is six (6) months after the
date TCAC awards allocations of Tax Credits for the Second Round if, despite
Developer's timely submittal of a complete application in the First Round, Developer
does not obtain an allocation of Tax Credits in the First Round and submits an
application for the Second Round, or (iii) the date that is six (6) months after the date
TCAC awards allocations of Tax Credits for the Third Round if, despite Developer's
timely submittal of a complete application in the Second Round, Developer does not
obtain an allocation of Tax Credits in the Second Round and submits an application for
the Third Round.
"Partnership" has the meaning set forth in Section 14.1 of this Agreement.
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"Partnership Agreement" means the agreement that sets forth the terms of the
Partnership.
"Permitted Encumbrances" means the Construction Loan Security Documents
and such other exceptions to title approved by the Executive Director.
"Phase 1" means that certain Report of Phase I Environmental Site Assessment
prepared for the Agency on the WSA Property by Earth Systems Southwest dated
October 6, 2006.
"Project" means, (i) with respect to the WSA Real Property, Developer's (a)
rehabilitation of seventy-two (72) of the apartment units thereon, (b) demolition of one
(1) of the apartment units thereon, and construction thereon of twenty-six (26) new
apartment units, a new community building, and related amenities and site
improvements, and (c) relocation of the Existing WSA Tenants; (ii) with respect to the
Unimproved Real Property, Developer's construction thereon of forty-two (42) new
apartment units, a new community building, and related amenities and site
improvements; and (iii) with respect to the Property, Developer's construction of all
required on -site improvements necessary to serve the apartment units in accordance
with this Agreement, including, without limitation, in accordance with the Scope of
Development and the Final Construction Documents.
"Project Budget" mean that certain budget attached hereto and incorporated
herein as Attachment No.16.
"Project Costs" means all costs of any nature incurred in connection with the
construction of the Project.
"Project Documents" means, collectively, this Agreement, the Authority Note
(Plans), the Authority Note (Property and Construction), the Authority Deed of Trust
(Plans), the Authority Deed of Trust (Property and Construction), the Authority
Regulatory Agreement, the Notice of Affordability, and any other agreement, document
or instrument that Developer and Authority enter into pursuant to this Agreement or in
order to effectuate the purposes of this Agreement.
"Project Financing" has the meaning set forth in Section 5.1 of this Agreement.
"Property" means the WSA Property and Unimproved Property.
"Provident 1st Deed of Trust" means that certain Deed of Trust dated July 19,
2001, executed by Frank R. Goodman, as Trustor, in favor of Provident Savings Bank,
as beneficiary, recorded August 3, 2001, as Instrument No. 3387200, in the Official
Records. The Provident 1st Deed of Trust was assumed by the Agency pursuant to that
certain Loan Assumption Agreement dated October 28, 2008, and recorded in the
Official Records on October 31, 2008, as Instrument No. 2008-0582812. The USDA
has subordinated the USDA 2nd Deed of Trust to the Provident 1st Deed of Trust.
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"Provident Note" means that certain Promissory Note Secured by Deed of Trust
dated July 19, 2001, executed by Frank R. Goodman, as maker, in favor of Provident
Savings Bank, a mutual savings bank chartered under the laws of the United States of
America, as holder, in the original principal amount of ONE MILLION SIX HUNDRED
NINETY-SIX THOUSAND DOLLARS ($1,696,000). The Provident Note is secured by
the Provident 1st Deed of Trust. The Provident Note was assumed by the Agency
pursuant to that certain Loan Assumption Agreement dated October 28, 2008, and
recorded in the Official Records on October 31, 2008, as Instrument No. 2008-0582812.
The amount currently outstanding under the Provident Note is approximately ONE
MILLION TWO HUNDRED EIGHTY-FOUR THOUSAND FIFTY-THREE DOLLARS
($1,284,053).
"Release of Construction Covenants" means a release document substantially
in the form attached hereto and incorporated herein as Attachment No. 19, to be
executed by Authority and recorded in the Official Records upon Developer's
completion of the Project, as described in Section 9.15.
"Relocation Laws and Regulations" the California Relocation Assistance Act of
1970 (California Government Code § 7260 et sec..) and its implementing regulations (25
Cal. Code Regs. § 6000, et seq.), and the United States Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970 (42 U.S.C. § 4601, et seq.), and its
implementing regulations promulgated by the United States Department of
Transportation (49 C.F.R. § 24.1, et seq.).
"Relocation Plan" means that certain Washington Street Apartments Relocation
Plan prepared by Authority, approved by Authority on about the Effective Date.
"Request for Notice" has the meaning set forth in Section 6.2(I) of this
Agreement
"Schedule of Performance" means the Schedule of Performance attached
hereto and incorporated herein as Attachment No. 3.
"Scope of Development" means the Scope of Development attached hereto and
incorporated herein as Attachment No. 4.
"Second Round" means the second round for allocations of 9% Tax Credits
following the Effective Date.
"Sources and Uses of Funds Statement" means the Sources and Uses of
Funds statement attached to the Project Budget.
"Site Plan" means the site plan attached hereto and incorporated herein
as Attachment No.2.
"Take -Out Lender" means the lending institution that makes the Take -Out Loan,
if any. The Take -Out Lender may or may not also be the Construction Lender. The
Take -Out Lender shall be an Institutional Lender.
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"Take -Out Loan" means the long-term loan, if any, made by the Take -Out
Lender to Developer in order to take out the Construction Loan.
"Tax Credits" has the meaning set forth in Section 5.1(b) of this Agreement.
"Tax Credit Funds" has the meaning set forth in Section 6.2(c) of this
Agreement.
"Tax Credit Program" means the low-income housing tax credit program
authorized pursuant to Internal Revenue Code Section 42, California Health and Safety
Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5,
17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4
California Code of Regulations Sections 10300-10340.
"TCAC" means the California Tax Credit Allocation Committee.
"Third Round" means the third round for allocations of 9% Tax Credits following
the Effective Date.
"Title Company" means Lawyers' Title Insurance Company, with its offices
located at 888 S. Figueroa Street, Suite 2100, Los Angeles, California 90017, or such
other title insurance company as may be agreed to by Developer and the Executive
Director.
"Unimproved Property" means Authority's fee estate in and to the Unimproved
Real Property, including all right, title and interest of Authority in and to any land lying in
the bed of any existing or proposed highway, street, road, avenue or alley abutting or
adjoining the Unimproved Real Property and all right, title and interests of Authority in
and to any strips or gores of land adjoining the Unimproved Real Property, including the
right to any unpaid award for damage by reason of any condemnation proceedings or
change of grade of any highway, street, road or avenue, and all tenements,
hereditaments and appurtenances thereto.
"USDA" means the United States of America, acting through the Farmer's Home
Administration, United States Department of Agriculture.
"USDA 2nd Deed of Trust" means that certain Real Estate Deed of Trust for
California with Assignment of Rents, dated November 18, 1980, executed by Frank R.
Goodman, as trustor, in favor of USDA, as beneficiary, recorded November 21, 1980,
as Instrument No. 218151, in the Official Records. The USDA 2nd Deed of Trust was
assumed by the Agency pursuant to that certain Multifamily Housing Assumption
Agreement dated October 14, 2008.
"USDA Note" means that certain Promissory Note dated December 18, 1980,
executed by Frank R. Goodman, as maker, in favor of the USDA, as holder, in the
original principal amount of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000). The USDA Note is secured by the USDA 2nd Deed of Trust. The USDA
Note was assumed by the Agency pursuant to that certain Multifamily Housing
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Assumption Agreement dated October 14, 2008 and recorded in the Official Records on
, as Instrument No. . The amount currently outstanding
under the USDA Note is approximately SIX HUNDRED FORTY THOUSAND DOLLARS
($640,000).
"WSA Bill of Sale" means a bill of sale substantially in the form attached hereto
and incorporated herein as Attachment No. 6, pursuant to which Authority will convey
the WSA Personal Property to Developer.
"WSA Contracts" means (i) all labor, service, supply, property management,
insurance, brokerage leasing and maintenance contracts relating to the WSA
Improvements or the WSA Real Property, and (ii) the Design and Engineering
Agreements, all of which are to be assumed by Developer pursuant to Section 4.2(a)
below. The WSA Contracts are listed in Attachment No.9
"WSA Improvements" means any improvements and appurtenances located on
the WSA Real Property that are owned by Authority, including, as applicable, the
buildings, parking areas, improvements and fixtures, roads, streets, parking areas,
curbs, sidewalks, landscaping, recreation facilities, sewers and other utilities now or
hereafter located on the Property.
"WSA Intangible Personal Property" means all signs, logos, trade names,
trademarks or styles relating to the WSA Real Property owned by Authority (specifically
including the name "Washington Street Apartments") and all other intangible
property owned or hereafter to be acquired by Authority in connection with the WSA
Real Property, WSA Improvements and WSA Personal Property including, but not
limited to, licenses, use, occupancy and operating permits, brochures, manuals, lists of
prospective tenants, advertising materials and assignable telephone numbers),
warranties and guaranties in effect, all plans, specifications, including, without
limitation, all working drawings and "as -built" drawings, approvals, reports and studies.
"WSA Personal Property" means all furniture, personal property, machinery,
apparatus and equipment owned by Authority and currently used in the operation,
repair and maintenance of the WSA Improvements. The WSA Personal Property to be
conveyed are listed in the inventory attached as Attachment No. 9.
"WSA Property" means (i) Authority's fee estate in and to the WSA Real
Property together with the WSA Improvements, including all right, title and interest of
Authority in and to any land lying in the bed of any existing or proposed highway, street,
road, avenue or alley abutting or adjoining the WSA Real Property, all right, title and
interests of Authority in and to any strips or gores of land adjoining the WSA Real
Property, including the right to any unpaid award for damage by reason of any
condemnation proceedings or change of grade of any highway, street, road or avenue,
and all tenements, hereditaments and appurtenances thereto, (ii) the WSA
Improvements, (iii) the WSA Personal Property, (iv) the WSA Intangible Personal
Property, (v) the WSA Contracts, and (vi) the WSA Tenant Leases.
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"WSA Rent Roll" means a rent roll of the WSA Property, identifying and listing in
detail by tenant or vacant area, as applicable, (i) tenant name, square footage, monthly
rent, deposits, all concessions (financial and other), lease term, defaults (financial or
otherwise), and lease obligations of Authority, if any; and (ii) to the extent Authority is
not legally prohibited from providing, all legal matters relating to the WSA Tenant
Leases. The WSA Rent Roll shall be in one or more reports in the form customarily
used by Authority; provided such reports contain all of the information described above.
During the pendency of Escrow, Authority shall provide Developer an updated Rent Roll
on or before the fifteenth (15th) day of each month.
"WSA Tenant Leases" means all leases of the WSA Real Property or the WSA
Improvements disclosed in the WSA Rent Roll, and all lease deposits, prepaid rentals
and whatever rights of any kind or nature related thereto.
2. PARTIES
2.1 Authority. Authority is a public body, corporate and politic. Authority's
principal office and mailing address is 78-495 Calle Tampico, La Quinta, CA 92253.
Authority was activated to help the City ensure that its residents are able to secure
decent and affordable housing.
2.2 Developer. Developer is Coachella Valley Housing Coalition, a California
nonprofit public benefit corporation, and any successor to its rights, powers, and
responsibilities, and any assignee of Developer's rights and obligations hereunder,
permitted in accordance with this Agreement. Developer's principal offices are located
at 45701 Monroe Street, Suite G, Indio, California, 92201.
3. SCHEDULE OF PERFORMANCE
The Schedule of Performance sets forth the times by which the parties are
required to perform certain obligations set forth in this Agreement.
4. DUE DILIGENCE PERIOD; INSPECTIONS AND REVIEW PERMISSION TO
ENTER PROPERTY; AS -IS; PHYSICAL AND ENVIRONMENTAL CONDITION
4.1 Due Diligence Items Already Provided. Prior to the execution of this
Agreement, Authority has provided to Developer copies or originals of the following
documents and items:
(a) Copies of the operating, income, expense and capital expenditure
records for the Property for calendar years 2015-2016, and the latest available
for calendar year 2017, including statements of current working capital accounts
and capital reserve (i.e., capital replacement reserve accounts).
(b) A schedule of rental rates and occupancy percentages by year
covering the calendar years 2015 to date.
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(c) A copy of real property tax and assessment bills for the Property for
the 2015-2016 and 2016-2017 fiscal years.
(d) Copies of the Existing Loan Documents.
(e) A copy of the Phase 1.
4.2 Due Diligence Items to be Provided. Within five (5) business days after
the execution of this Agreement, Authority shall deliver copies or originals of the
following documents and items (collectively with the documents and items provided
pursuant to Section 4.1, the "Due Diligence Items") to Developer:
(a) All WSA Contracts, and any and all amendments thereto, provided
that such WSA Contracts shall affect the Property following the Close of Escrow,
and all WSA Tenant Leases, and any and all amendments thereto, provided that
such WSA Tenant Leases shall affect the Property following the Close of Escrow.
Developer shall, not later than the later of (i) ninety (90) days after full and
complete delivery of all of the WSA Contracts and WSA Tenant Leases to
Developer, or (ii) thirty (30) days prior to the Close of Escrow, advise Authority in
writing of the WSA Contracts and WSA Tenant Leases which Developer elects to
assume.
(b) All certificates of occupancy, licenses, and permits pertaining to the
Property in the possession of Authority or Authority's agents or representatives.
(c) Authority's standard form of lease ("Form Lease") used for the
Property.
(d) A current Rent Roll.
(e) Copies of all asbestos, lead -based paint, soils, seismic, geologic,
drainage, toxic waste, engineering, environmental and similar type reports and
surveys (including, but not limited to, the Phase I, ALTA surveys, building grading
plans, drawings (including "as -built" plans and specifications), schematics,
blueprints and working drawings for the Property or any major capital
improvements thereto, zoning ordinances, conditional use permits and
correspondence relating thereto, business licenses, and CC&Rs within
Authority's possession.
(f) Notices of violations, including, but not limited to, zoning
ordinances, building codes, fire codes, CC&Rs or other agreements affecting the
Property to the extent in the possession and control of Authority.
(g)
collection
Authority.
(h)
Disclosure of any legal matters affecting the Property or the
of rents or deposits to the extent in the possession and control of
An aging of accounts receivable and current staffing schedules.
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(i) A Lead -Based Paint Disclosure and Acknowledgement.
0) Copies of all current insurance policies and premiums, and the
same covering for the preceding two (2) calendar years.
(k) To the extent Authority can reasonably obtain Estoppel certificates
from each Tenant certifying to the monthly amount of rent paid by such Tenant to
Authority the "Estoppel Certificates"), to be provided to Developer within thirty
(30) days after the execution of this Agreement.
(1) The Relocation Plan.
(m) Existing balances (including principal, accrued, outstanding
interest, and any other amounts outstanding) on the USDA Note and Provident
Note.
4.3 Environmental/Physical Property Condition Due Diligence. For a period of
ninety (90) days, which may be extended by Developer for an additional period of thirty
(30) days if Developer determines that a "Phase 11" environmental assessment is
necessary, after the opening of the Escrow (the "Environmental/Physical Property
Condition Due Diligence Period"), Developer shall have the right to examine, inspect
and investigate the Property and, at Developer's sole and absolute discretion, to
determine whether the physical and environmental condition of the Property is
acceptable to Developer. Authority shall permit Developer, its engineers, analysts,
contractors, lenders and agents to enter upon the Property in order to conduct physical
inspections of the Property, including the structural, electrical and mechanical aspects
of the WSA Improvements, the interiors of all buildings, supports, site work, foundations,
soil, subsurface soils, drainage, seismic and other geological and topographical matters,
location of asbestos, toxic substances, hazardous materials or wastes, if any, and any
other investigations as Developer deems prudent with respect to the physical condition
of the Property. Such investigations may be made by Developer and/or its agents
during any normal business hours. Developer shall also have the right to investigate all
matters relating to the zoning, use and compliance with other applicable laws which
relate to the use and occupancy of the Property. Authority shall reasonably cooperate
to assist Developer in completing such inspections and special investigations. Such
physical inspections and investigations of the Property shall be conducted only upon no
less than twenty-four (24) hours' notice to Authority and shall be conducted at such
times and in such a manner as to minimize any disruption to any of the WSA Tenants
upon the Property. As a condition to Developer's entry onto the Property, Developer
shall provide to Authority a copy of all reports, studies and test results prepared by
Developer's consultants, without representation or warranty. As an additional condition
of such entry, Developer shall (i) conduct all work or studies in a diligent, expeditious,
and safe manner and not allow any dangerous or hazardous conditions to occur on the
Property during or after the investigation; (ii) obtain any required governmental permits
and comply with all applicable laws and governmental regulations; (iii) keep the
Property free and clear of all materialmen's liens, lis pendens and other liens arising out
of the entry and work performed under this paragraph; (iv) maintain or assure
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maintenance of workers' compensation insurance (or state approved self-insurance) for
all persons entering the Property in the amounts required by the State of California; and
(v) provide to Authority prior to initial entry a certificate of insurance evidencing that
Developer and/or the persons entering the Property have procured and have in effect
commercial general liability insurance that satisfies the requirements set forth in Section
9.6 hereof. Authority shall have the right, but not the obligation, to accompany
Developer during such investigations and/or inspections but shall not interfere therewith.
Developer shall repair any and all damage to the Property or to any WSA Tenants'
property caused by such inspections or investigations in a timely manner and shall
indemnify and defend the Authority from and against any liability arising from
Developer's physical inspection hereunder. Developer shall notify Authority and Escrow
Holder in writing ("Developer's Environmental/Physical Property Condition Due
Diligence Notice") on or before the expiration of the Environmental/Physical Property
Condition Due Diligence Period of Developer's approval or disapproval of the Due
Diligence Items provided pursuant to Section 4.1 or 4.2 above, the condition of the
Property, and Developer's investigations with respect thereto. Developer's failure to
deliver Developer's Environmental/Physical Property Condition Due Diligence Notice on
or before the expiration of the Environmental/Physical Property Condition Due Diligence
Period shall be conclusively deemed Developer's approval thereof.
4.4 Financial/Operational Condition Due Diligence Period; New Indebtedness;
Developer's Equity. For a period of ninety (90) days after the opening of the Escrow
("Developer's Financial/Operational Condition Due Diligence Period"), Developer
shall have the right to determine, in its sole and absolute discretion and at no cost to
Authority, the financial and operational feasibility of developing and operating the
Project. Such Due Diligence Items shall include but not be limited to (a) Developer's
review of the WSA Rent Roll, WSA Tenant Leases, WSA Contracts, the copies of the
financial, operational, contractual, and legal records and disclosures provided by
Authority pursuant to Section 4.1 or to be provided by Authority pursuant to Section 4.2;
and (b) review of arrangements with the County of Riverside Housing Authority
including Section 8 support. Developer shall notify Authority and Escrow Holder in
writing of Developer's approval or disapproval of such Due Diligence Items
("Developer's Financial/Operational Condition Due Diligence Notice"). Developer's
failure to deliver Developer's Financial/Operational Condition Due Diligence Notice on
or before the expiration of Developer's Financial/Operational Condition Due Diligence
Period shall be conclusively deemed to be Developer's approval thereof.
4.5 Preliminary Title Report. Within five (5) days following the opening of the
Escrow, or as soon thereafter as feasible, Escrow Holder shall deliver to Developer a
preliminary title report or title commitment for an ALTA extended coverage policy of title
insurance issued by Title Company dated not earlier than the date of opening of the
Escrow, describing the state of title of the Property, together with copies of all
exceptions specified therein and with all easements plotted in color (collectively, the
"Preliminary Title Report"). Within the later of (a) thirty (30) days after Developer's
receipt of the "Survey" (as defined in Section 4.6 below), and (b) sixty (60) days after
Developer's receipt of the Preliminary Title Report (the "Title Due Diligence Period"),
Developer shall notify Authority in writing ("Developer's Title Objection Notice") of any
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objections Developer may have to title exceptions contained in the Preliminary Title
Report. Authority shall have a period of ten (10) days after receipt of Developer's Title
Objection Notice in which to deliver written notice to Developer ("Authority's Title
Notice") of Authority's election to either (i) agree to remove the objectionable items prior
to the Close of Escrow, or (ii) decline to remove any such title exceptions and terminate
the Escrow and this Agreement; provided, however, that with the exception of the
Existing Indebtedness, Authority shall be required to remove all monetary liens and
encumbrances created by or as a result of Authority's activities, suffered by Authority or
assumed by Authority. Other than the Existing Indebtedness, Authority shall be
responsible for all yield maintenance, prepayment penalties and/or any other similar
fees and charges required by any lender of a Project -related loan that has been
approved by Authority to remove existing financing encumbrances and Authority shall
have no right to decline to remove same pursuant to the foregoing. If Authority notifies
Developer of its election to terminate Escrow rather than remove the objectionable
items (other than the Existing Indebtedness, which shall not constitute an objectionable
item), Developer shall have the right, by written notice delivered to Authority within five
(5) days after Developer's receipt of Authority's Title Notice, to agree to accept the
Property subject to the objectionable items, in which event Authority's election to
terminate the Escrow shall be of no effect, and Developer shall take title at the Close of
Escrow subject to such objectionable items. Upon the issuance of any amendment or
supplement to the Preliminary Title Report which adds additional exceptions (including,
but not limited to, adding additional exceptions for matters shown on the Survey, the
foregoing right of review and approval shall also apply to said amendment or
supplement (provided that the period for Developer to review such amendment or
supplement shall be the later of the expiration of the Title Due Diligence Period or ten
(10) days from receipt of the amendment or supplement) and Escrow shall be deemed
extended by the amount of time necessary to allow such review and approval in the
time and manner set forth above; provided, however, that in no event shall the Close of
Escrow be extended as a result of such delay for more than thirty (30) days.
4.6 Survey. Developer shall obtain a survey of the Property, at Developer's
cost, prepared by a land surveyor duly licensed by the State of California and in
compliance with ALTA/ACSM standards ("Survey") or an update to an existing Survey
prepared for or on behalf of Authority, in a form acceptable to the Title Company for the
deletion of the standard survey exception in the Title Policy relating to boundaries,
without the addition of further exceptions unless the same are acceptable to Developer
in its sole and absolute discretion. Provided Developer obtains the Survey within forty-
five (45) days after the Effective Date, Developer shall have until the end of the Title
Due Diligence Period to examine the Survey and to notify Authority in writing of any
objections Developer has to the Survey ("Developer's Survey Objection Notice").
Authority shall have a period of ten (10) days after receipt of Developer's Survey
Objection Notice in which to deliver written notice to Developer ("Authority's Survey
Notice") of Authority's election to either (1) agree to remove the objectionable items
prior to the Close of Escrow or (2) decline to remove such items and terminate the
Escrow and this Agreement. If Authority notifies Developer of its intention to not remove
the objectionable items and terminate the Escrow and this Agreement, Developer shall
have the right, by written notice delivered to Authority within five (5) days after
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Developer's receipt of Authority's Survey Notice, to agree to accept the Property subject
to the objectionable items, in which event, Authority's election to terminate the Escrow
shall be of no effect, and Developer shall accept the Property on the Close of Escrow
subject to such objectionable items. Prior to the Closing, the Survey shall be recertified
to Developer, Investor, Title Company, and Developer's lender(s) of the New
Indebtedness (if any).
4.7 USDA Matters. For a period of ninety (90) days after the date Developer
obtains from Authority copies of the Existing Loan Documents ("USDA Condition Due
Diligence Period"), Developer shall have the right, at no cost to Authority, to retain a
certified inspector (the "Compliance Inspector") for purposes of performing a capital
needs assessment of the property to determine if the property is in compliance with all
of USDA's requirements pertaining to the Authority's operation of the Property, as
required under the Existing Loan Documents (collectively, the "USDA Requirements").
In the event the Compliance Inspector determines that the Property is not currently
compliant with all of the USDA Requirements, Developer shall notify Authority in writing
of the nature and extent of the corrective work required ("USDA Compliance Notice").
Authority shall have ten (10) days after receipt of Developer's USDA Compliance Notice
in which to deliver written notice to Developer ("Authority's USDA Response Notice")
of Authority's election to either (i) agree to make necessary corrections and
modifications as determined necessary by the Compliance Inspector, at Authority's
expense, or (ii) terminate this Agreement and the Escrow by giving written notice
thereof to Escrow Holder and Developer. If Authority notifies Developer of its election to
terminate this Agreement and the Escrow rather than make the necessary corrections,
Developer shall have the right by written notice delivered to Authority within three (3)
days after Developer's receipt of Authority's USDA Notice Response to terminate this
Agreement and the Escrow, to agree to accept the Property subject to the non-
compliant items, in which event Authority's election to terminate this Agreement and the
Escrow shall be of no effect. The failure of Developer to deliver the USDA Compliance
Notice to Authority in a timely manner shall be conclusively deemed to be Developer's
approval of the Property's compliance with the USDA Requirements.
During the USDA Condition Due Diligence Period, Developer shall also have the
right, at no cost to Authority, to review, and to negotiate an assignment and assumption
of, the Existing Indebtedness and the USDA Requirements with the USDA and/or with
Provident, and other terms and conditions, all as acceptable to Developer in
Developer's sole and absolute discretion (collectively, the "Assumption Agreements").
Such other terms and conditions may include modification of the existing affordability
restrictions, additional financing from USDA, modification of the terms of the Existing
Indebtedness and USDA Restrictions, and subordination of the Existing Indebtedness to
the New Indebtedness (if any). In the event Developer is unable to negotiate the
Assumption Agreements on terms acceptable to Developer in Developer's sole and
absolute discretion, Developer shall deliver written notice to Authority terminating this
Agreement. If Developer negotiates the Assumption Agreements, on terms satisfactory
to Developer, in Developer's sole and absolute discretion, the USDA Condition Due
Diligence Period shall be extended for an additional thirty (30) days to allow Developer's
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governing board, Provident, and the USDA to effect approval of the Assumption
Agreements prior to the Closing Date.
The foregoing notwithstanding, Developer's contacts with USDA and Provident
shall constitute negotiations only and any modifications or proposed modifications shall
be in no way binding upon Authority unless and until Close of Escrow occurs in the
manner provided herein, and be at no cost or liability to Authority (and Developer shall
defend, indemnify and hold Authority free and harmless with respect to same).
4.8 Books and Records. For a period of ninety (90) days after opening of
Escrow, Developer shall be afforded full opportunity by Authority to examine all books
and records which relate to the Property for calendar years 2011 to -date in the
possession of Authority and/or Authority's agents or employees, including the
reasonable right to make copies of such books and records, and Authority shall make all
such books and records available to Developer. Such right shall extend to all operating
books of account, copies of all WSA Tenant Leases and all amendments thereto, rental
applications and any other agreements, correspondence or other documents relating to
the WSA Tenant Leases, tenant files, rent rolls, operating statements, budgets,
accounting support for bills, inventories of WSA Personal Property, service contracts,
management contracts, maintenance contracts, warranties, general ledgers, journals,
vendor files, bank statements, invoices, operating manuals, maintenance records
(including replacements of carpeting and appliances), utility bills, marketing data
(including brochures), historical occupancy reports, traffic reports of tenant activities,
rental histories, leasing floor plans and any summaries of such items. The foregoing
notwithstanding, Authority shall have no obligation to provide information relating to
tenants which Authority is legally prohibited from providing.
4.9 "AS -IS". Developer acknowledges and agrees that it is acquiring the
Property from Authority solely in reliance on its own investigation, and that no
representations and/or warranties of any kind whatsoever, express or implied, have
been made by Authority, or the City or by any of their respective directors, officers,
officials, employees, representatives or agents. Developer further acknowledges and
agrees that Developer will be acquiring the Property in "AS IS" condition with all faults
and conditions then existing in and on the Property, whether known or unknown.
Notwithstanding the foregoing, Authority acknowledges and agrees that neither this
Section 4.9, nor any other term, provision or condition of this Agreement obligates
Developer to remediate, or to incur any cost to remediate, any Hazardous Materials that
were released or existed on the Property prior to the Close of Escrow. Developer
acknowledges and agrees that, as between it and Authority, nothing in this Agreement
or in the Regulatory Agreement shall ever be deemed, construed, or interpreted to
obligate Authority to remediate, or to incur any expense to remediate, any Hazardous
Materials discovered on the Property either before or after the Close of Escrow unless
and until Authority expressly agrees to do so in writing.
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5. FINANCING PLAN FOR THE PROJECT
5.1 Financing Plan. It is contemplated that Developer will finance the Project
(the "Project Financing") through a combination of:
(a) Construction Loan; Take -Out Loan. The Construction Loan and
Take -Out Loan (if any);
(b) Tax Credits. Developer equity, consisting of equity raised by the
syndication to reputable investors of nine percent (9%) federal low-income
housing credits obtained pursuant to 26 U.S.C. §42 (the "Tax Credits");
(c) Authority Loans. The Authority Loans, as more particularly
provided in Section 5.2 below;
Notwithstanding the foregoing, Developer shall continue to pursue
additional sources of funds that may be available to assist with the costs of developing
the Project.
5.2 Authority Loans.
(a) Amount of Authority Loans. Subject to the terms and conditions of
this Agreement, Authority agrees to make the following loans to Developer: (i) a
loan in the principal amount of Two Million Three Hundred Sixty -Six Thousand
Seven Hundred Twenty -Two Dollars ($2,366,722) (the "Authority Loan
(Plans)") to fund the costs Authority incurred in preparing engineering and
architectural plans and drawings for the Project; (ii) a loan in the principal amount
of Fifteen Million Fifty -Eight Thousand Two Hundred Eighty -Eight Dollars
($15,058,288) (the "Authority Loan (Property and Construction)") to fund
Developer's acquisition of the Property from Authority, in the amount of Four
Million Five Hundred Eighty -Five Thousand Four Hundred Ninety -Two Dollars
(4,585,492), a portion of the construction costs of the Project, in the amount of
Nine Million Four Hundred Thousand Dollars ($9,400,000) ("Construction
portion of Authority Loan (Property and Construction)"), and the reserve
account being transferred to Developer at the Close of Escrow, in the
approximate amount of One Million Seventy -Three Thousand Thirty -Six Dollars
($1,073,036). The Authority Loan (Plans) shall be evidenced by the Authority
Note (Plans), and shall be secured by the Authority Deed of Trust (Plans), and
the Authority Loan (Property and Construction) shall be evidenced by the
Authority Note (Property and Construction), and shall be secured by the Authority
Deed of Trust (Property and Construction).
(b) Disbursement Requests. Commencing as of the Close of Escrow,
portions of the Construction Portion of Authority Loan (Property and
Construction) shall be disbursed on a line -item by line -item basis in accordance
with the Project Budget. In no event shall Authority have any obligation to
disburse any amount for any item in excess of the amount allocated to such item
in the Project Budget, unless approved, in writing, by the Executive Director;
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provided, however, that upon completion and payment of all work for a particular
line item, Developer may move any amounts remaining in such line to any other
line item where payment for work has not been completed, and no Authority
consent shall be required therefor. Disbursement shall be made only upon
Developer's written request in the form attached hereto as Attachment No.13 (a
"Disbursement Request") showing all costs that Developer intends to fund with
such disbursement, itemized in such detail as the Executive Director may
reasonably require, accompanied in each case by (a) invoices and lien releases
(if such work could give rise to mechanic's or materialmen's liens) reasonably
satisfactory to the Executive Director, including in any event conditional lien
releases executed by each contractor and subcontractor who has received any
payment for work performed, and (b) all other documents and information
reasonably required by the Executive Director. Authority agrees to fund each
Disbursement Request within twenty-one (21) days after Authority's receipt of the
Disbursement Request in completed form with all required supporting
documentation, and reasonable determination by Authority that all of the
conditions to disbursement set forth in this Section 5.2(b) have been satisfied, or
waived by Authority.
(c) Manner of Disbursement. Authority may make any disbursement
(i) by check payable to Developer; (ii) on a voucher basis; (iii) by check payable
jointly to Developer and any contractor, subcontractor other claimant; or (iv) by
any other means reasonably selected by the Executive Director. Authority
reserves the right to deposit the Construction Portion of Authority Loan (Property
and Construction) into an escrow account with the Escrow Holder for
disbursement directly by the Escrow Holder. In such event, the Escrow Holder
shall be instructed to disburse portions of the Construction Portion of Authority
Loan (Property and Construction) on receipt of a Disbursement Request that has
been approved, in writing, by Authority.
5.3 Tax Credit Application. Developer shall (i) prepare and submit a complete
application to TCAC for an allocation of Tax Credits in the First Round; and (ii) apply to
reputable institutional investors and syndicators qualified to act as the Investor. If
Developer does not receive a reservation of Tax Credits in the First Round, then in the
Second Round Developer shall prepare and submit a complete second application to
TCAC for an allocation of Tax Credits. If Developer does not receive a reservation of
Tax Credits in the Second Round, then in the Third Round Developer shall prepare and
submit a complete third application to TCAC for an allocation of Tax Credits. If
Developer does not receive a reservation of Tax Credits in the Third Round, then
Developer or Authority may terminate this Agreement pursuant to Section 5.6(a) or
5.7(a), respectively, upon written notice to the other; provided, however, that Authority's
Board may, in its sole and absolute discretion, permit Developer to make one (1) more
additional reapplication (e.g., a fourth application). In such event, (x) Developer shall
not be required to repay any amounts of the Construction Portion of Authority Loan
(Property and Construction) disbursed to Developer for predevelopment costs and any
amounts loaned to Developer by Authority for payment of predevelopment costs shall
be forgiven; (y) Developer shall deliver to Authority any reports, studies, drawings, plans
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and specifications; and (z) with the exception of any indemnity obligations of Developer
and any other obligations of Developer that are expressly stated in this Agreement to
survive the termination of this Agreement, Developer shall have no further obligations
under this Agreement.
Developer agrees to promptly submit to Authority all of the following documents
at such time as the same are submitted by Developer to TCAC or other applicable body
or when such documents are received by Developer, as applicable (any documents
submitted prior to the Effective Date of this Agreement shall also have been submitted
by Developer to Authority and reviewed by Authority prior to the Effective Date of this
Agreement):
(1) A true and correct copy of the preliminary reservation letter from
TCAC, a copy of the letter of intent from the Investor reflecting the total amount of the
syndication proceeds and the timing of the payment of such proceeds.
(2) A complete copy of the Tax Credit Regulatory Agreement (4
California Code of Regulations § 10340(c)). (As more fully discussed in Section 4.14 of
Authority Regulatory Agreement, should Authority be prevented by a final order of a
court of competent jurisdiction, applicable and binding appellate opinion, or regulatory
body with jurisdiction from enforcing, for any reason, the affordability restrictions set
forth in this Agreement, to the extent legally permitted, Authority shall be a third -party
beneficiary under said agreement and shall have full authority to enforce any breach or
default by Developer thereunder in the same manner as though it were a breach or
default under this Agreement.)
(3) Complete copies of all correspondence or transmittals from TCAC
or other jurisdiction (such as the Internal Revenue Service) containing any notification
regarding the Project's noncompliance with applicable provisions of the Tax Credit
Program.
5.4 Project Budget. The Project Budget includes all of the following: (i) a
detailed budget; (ii) a Sources and Uses of Funds Statement; (iii) a Cash Flow
Projection; and (iv) a First Year Operating Budget.
5.5 Financing Commitments. Not later than the time provided in the Schedule
of Performance, Developer shall submit to the Executive Director for approval
commitments for the Project Financing. The Executive Director's right to approve such
commitments shall be limited to determining whether the commitments (i) provide
sufficient funds to undertake and complete the development of the Project in
accordance with the Project Budget and approved plans and specifications, and (ii) are
from an Institutional Lender. Developer shall have diligently requested not less than
three (3) competitive bids from qualified parties for the Tax Credits.
5.6 Developer Right to Terminate. Prior to the Close of Escrow, Developer, if
it is not then in material default under this Agreement (subject to the notice and cure
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provisions of Section 12.1), may terminate this Agreement by giving thirty (30) days'
written notice to Authority on the occurrence of either of the following:
(a) Failure to Obtain Tax Credits. Developer, despite having made
commercially reasonable efforts and by the time provided in the Schedule of
Performance, has been unable to obtain from TCAC an allocation for Tax Credits
under the application filed pursuant to Section 5.3 above.
(b) Failure to Obtain Other Project Financing. Developer, despite
having obtained from TCAC an allocation for Tax Credits and despite having
made commercially reasonable efforts, has been unable, by the time provide in
the Schedule of Performance, to obtain the balance of the Project Financing set
forth in the Project Budget.
(c) Project Infeasibility_. It becomes reasonably evident to Developer
that the Project cannot be constructed within the Project Budget, and Developer
is unwilling or unable to make up the shortfall from funds from a source other
than Authority and reasonably acceptable to the Executive Director.
In the event of a termination pursuant to this Section 5.6, (i) Developer shall not
be required to repay any amounts of the Construction Portion of Authority Loan
(Property and Construction) disbursed to Developer for predevelopment costs and any
amounts loaned to Developer by Authority for payment of predevelopment costs shall
be forgiven; (ii) Developer shall deliver to Authority any reports, studies, drawings,
plans and specifications; and (ii) with the exception of any indemnity obligations of
Developer and any other obligations of Developer that are expressly stated in this
Agreement to survive the termination of this Agreement, Developer shall have no
further obligations under this Agreement.
5.7 Authority Right to Terminate. Prior to the Close of Escrow, Authority, if it
is not then in material default under this Agreement (subject to the notice and cure
provisions of Section 12.1), may terminate this Agreement by giving written notice to
Developer on the occurrence of any of the following:
(a) Developer's Failure to Obtain Allocation. Developer, by the time
provided in the Schedule of Performance, fails to obtain from TCAC an allocation
for Tax Credits under the application filed pursuant to Section 5.3, above for the
Third Round.
(b) Developer's Failure to Obtain Other Project Financing. Developer,
despite having obtained from TCAC an allocation for Tax Credits, has been
unable, by the time provided in the Schedule of Performance, to obtain the
balance of the Project Financing set forth in the Project Budget.
(c) Project Infeasibility. It becomes reasonably evident to Authority
that the Project cannot be constructed within the Project Budget, and Developer
is unwilling or unable to make up the shortfall from funds from a source other
than Authority and reasonably acceptable to the Executive Director.
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In the event of a termination pursuant to this Section 5.7, provided that if the
termination is pursuant to paragraph (a) or (b) above Developer has made
commercially reasonable efforts to obtain from TCAC an allocation of Tax Credits and
the balance of the Project Financing set forth in the Project Budget, then (i) Developer
shall not be required to repay any amounts of the Construction Portion of Authority
Loan (Property and Construction) disbursed to Developer for predevelopment costs
and any amounts loaned to Developer by Authority for payment of predevelopment
costs shall be forgiven; (ii) Developer shall deliver to Authority any reports, studies,
drawings, plans and specifications; and (ii) with the exception of any indemnity
obligations of Developer and any other obligations of Developer that are expressly
stated in this Agreement to survive the termination of this Agreement, Developer shall
have no further obligations under this Agreement.
5.8 Developer Fee. The parties acknowledge and agree that Developer shall
not be entitled to any fee for developing the Project except as expressly set forth in the
Project Budget.
5.9 Cost Savings Obligation. Subject to the requirements of TCAC and other
lenders providing loans to the Project that have been approved by Authority, Developer
hereby agrees to provide and pay to Authority a "Cost Savings" payment for the Project
in an amount to be determined based on the "Audit" (as those terms are described in
subparagraph (a) below) to be conducted upon completion of construction of the
Project.
(a) Audit to Determine Cost Savings Amount. The actual amount of
Cost Savings to be paid to Authority shall be determined after the Audit, as
hereafter described, and the amount of such Cost Savings shall be equal to the
amount by which the total sources of permanent financing for the Project (which
financing includes, but is not limited to, the Authority Loans, the Take -Out Loan,
and the equity raised by the sale of the Tax Credits exceed the costs of
development incurred for the Project (which costs include, but are not limited to,
the hard and soft costs incurred by Developer to develop the Project, and the
amount spent to reduce the principal balance of the Construction Loan to the
principal balance of the Take -Out Loan). Within sixty (60) days following the
completion of lease -up of the Project, Developer shall cause its certified public
accountant(s) to perform a final audit of the costs of development of the Project
in accordance with the requirements of the Tax Credits and generally accepted
accounting principles ("GAAP") and generally accepted auditing standards
(herein referred to as "Audit"). If the Audit determines that the total sources of
permanent financing for the Project (which financing includes, but is not limited
to, the Authority Loans, the Take -Out Loan, and the equity raised by the sale of
the Tax Credits exceed Developer's total costs to develop the Project (which
costs include, but are not limited to, the hard and soft costs incurred by
Developer to develop the Project, and the amount spent to reduce the principal
balance of the Construction Loan to the principal balance of the Take -Out Loan),
such excess shall be considered the "Cost Savings" for the Project.
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(b) Cost Savings Payment as Payment of Principal on Authority Loans.
Subject to the requirements of TCAC and other lenders providing loans to the
Project that have been approved by Authority, the Cost Savings for the Project,
once determined by the Audit pursuant to Section 5.9(a) above and subject to
Section 5.9(c) below, shall be due and paid by Developer to Authority and
allocated and credited as a principal payment on the Construction Portion of
Authority Loan (Property and Construction), as and when paid. Alternatively, the
Cost Savings may be used to fund a social services reserve to be used for the
Project.
(c) Timing of Payment of Cost Savings. The Cost Savings for the
Project shall become due and payable by Developer to Authority upon the later of
(i) sixty (60) days after receipt by Developer of the final Tax Credit equity, and
(ii) completion of construction of the Project, as evidenced by Authority's
issuance of a Release of Construction Covenants.
6. DISPOSITION OF PROPERTY
6.1 Agreement. Authority, subject to the conditions set forth in Section 6.2
below, agrees to sell the Property to Developer, and Developer, subject to the
conditions set forth in Section 6.3 below, agrees to purchase the Property from
Authority. Subject to each party's reserved rights hereunder, the parties shall cooperate
with one another and shall exercise commercially reasonable diligence in an effort to
ensure that the conditions precedent set forth in Sections 6.2 and 6.3 are timely
satisfied.
6.2 Conditions for Authority's Benefit. Authority's obligation to sell the
Property to Developer shall be subject to satisfaction of all of the following conditions
precedent or Authority's written waiver of such conditions precedent in its sole and
absolute discretion:
(a) Organizational Documents. The Executive Director shall have
received and approved a copy of such portions of the organizational documents
of Developer or Developer's successor -in -interest as the Executive Director
deems reasonably necessary to document the power and authority of Developer
to perform its obligations set forth in this Agreement. Developer shall have made
full disclosure to Authority of the names and addresses of all persons and entities
that have a beneficial interest in Developer.
(b) Insurance. Developer shall have submitted to Authority and
Authority shall have approved Developer's evidence of the liability insurance
required pursuant to Section 9.6 hereof.
(c) Evidence of Project Financing. The Executive Director shall have
received and reasonably approved the following:
(i) Construction Loan. True and complete copies of the
Construction Loan documents evidencing the obligation of an Institutional
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Lender to make the Construction Loan to Developer, subject only to
reasonable and customary conditions.
(ii) Tax Credit Financing. Documentary evidence reasonably
acceptable to the Executive Director that Developer has committed, or
caused to be committed, funds from the syndication of the Tax Credits
(the "Tax Credit Funds") for construction of the Project, subject only to
reasonable and customary conditions.
(iii) Take -Out Loan Commitment. If applicable, a commitment
from an Institutional Lender to make a permanent loan to Developer, with
a term of not less than fifteen (15) years, in sum sufficient, when added to
any Tax Credit Funds to be disbursed for such purpose, to take-out any
existing short-term financing, subject only to reasonable and customary
conditions.
(d) USDA Approval. USDA shall have approved the transfer and sale
of the WSA Property to Developer, and Developer shall have executed all
documents required by USDA to effect the transfer and sale.
(e) General Contractor. The general contractor for the Project (the
"General Contractor") shall have been approved by the Executive Director.
(f) Construction Contract. Authority shall have received a true and
complete copy of a contract by and between Developer and the General
Contractor pursuant to which the General Contractor has agreed to construct the
Project at a cost consistent with the costs set forth therefor in the Project Budget
(the "Construction Contract") and the Executive Director shall have approved
said Construction Contract.
(g) Completion Bond. If the Construction Lender or the Investor
require that a completion bond be posted by the General Contractor, then such
completion bond shall name Authority as a co -obligee.
(h) Completion Guaranty. If the Construction Lender or the Investor
require a completion guaranty from Developer, or any Affiliate thereof, then
Authority shall have also received a completion guaranty from Developer in
similar form and content.
(i) Building Permit. The Building Permit for the Project shall have
issued or shall be ready to issue subject only to the payment of applicable fees,
the posting of required security, or both.
Q) Construction to Commence. The Executive Director shall be
reasonably satisfied that construction of the Project will commence not later than
thirty (30) days after the Close of Escrow and thereafter will be pursued to
completion in a diligent and continuous manner.
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(k) Assignment of Construction Contract. Developer shall have
conditionally assigned to Authority the Construction Contract by an instrument
substantially in the form attached hereto and incorporated herein as Attachment
No. 10, including obtaining the consent thereto of the General Contractor, which
assignment shall be subordinated to any pledge or assignment to the
Construction Lender.
(1) Request for Notice of Default. Escrow Holder shall be ready to
record a request for notice of default pursuant to Civil Code Section 2924(b),
requesting that any beneficiaries of liens securing the Project Financing notify
Authority of any default under the instrument creating the lien (the "Request for
Notice").
(m) Documents Executed. Developer shall have duly executed the
Grant Deed, the Authority Note (Plans), the Authority Note (Property and
Construction), the Authority Deed of Trust (Plans), the Authority Deed of Trust
(Property and Construction), Authority Regulatory Agreement, and Notice of
Affordability, with signatures acknowledged (as applicable) and deposited them
into Escrow.
(n) Settlement Statement. Authority shall have approved the
settlement statement prepared by Escrow Holder for the Close of Escrow.
(o) Title Policy. Title Company is prepared to issue its LP-10 loan
policy of title insurance naming Authority as the insured, in a policy amount not
less than the principal amount of Authority Loans, showing Developer as the fee
owner of the Property and insuring each of the Authority Deed of Trust (Plans)
and Authority Deed of Trust (Property and Construction) to be a valid lien on the
Property subject only to exceptions approved by Authority (the "Authority Title
Policy").
(p) Total Project Cost. Nothing shall have come to the attention of
Developer and/or Authority to indicate that the Project cannot be completed at a
cost consistent with the Project Budget and, if there has been such an indication,
Developer has provided evidence, reasonably satisfactory to Executive Director,
of the availability of funding sources other than Authority to complete the Project.
If Developer becomes aware of any such information, Developer shall promptly
give notice thereof to Authority.
(q) Representations and Warranties. The representations of
Developer contained in this Agreement shall be correct in all material respects as
of the date of the disbursement as though made on and as of that date and, if
requested by the Executive Director, Authority shall have received a certificate to
that effect signed by Developer.
(r) No Default. No Event of Default by Developer shall then exist, and
no event shall then exist which, with the giving of notice or the passage of time or
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both, would constitute an Event of Default by Developer and, if requested by
Executive Director, Authority shall have received a certificate to that effect signed
by Developer.
6.3 Conditions for Developer's Benefit. Developer's obligation to purchase the
Property from Authority shall be subject to satisfaction of all of the following conditions
precedent or Developer's written waiver of such conditions precedent in its sole and
absolute discretion:
(a) Condition of Property. No material changes shall have occurred
after the Effective Date with respect to the condition of the Property.
(b) No Termination. Developer shall have approved the environmental
condition of the Property pursuant to Section 4.3, the financial condition of the
Property pursuant to Section 4.4, the condition of title to the Property pursuant to
Section 4.5, the Survey pursuant to Section 4.5, and the USDA matters pursuant
to Section 4.7.
(c) Evidence of Project Financing. The Developer shall have received
commitments for the Construction Loan, Tax Credit Financing, and Take -Out
Loan (if any) in form and substance acceptable to the Developer, and the
Construction Loan and Tax Credit financing shall close concurrently with Close of
Escrow.
(d) Total Project Cost. Nothing shall have come to the attention of
Developer and/or Authority to indicate that the Project cannot be completed at a
cost consistent with the Project Budget and, if there has been such an indication,
Developer has provided evidence, reasonably satisfactory to Executive Director,
of the availability of funding sources other than Authority to complete the Project.
(e) Additional Authority Deliverables. Authority shall have delivered to
Escrow Holder all of the following:
(i) Two (2) duplicate original copies of the WSA Bill of Sale,
duly executed by Authority;
(ii) Two (2) duplicate originals of the Assignment of WSA
Tenant Leases, duly executed by Authority;
(iii) All of the original WSA Tenant Leases including any
amendments, modifications, letter agreements and correspondence
relating thereto (to be delivered to Developer at the Property upon Close
of Escrow);
(iv) A Rent Roll, dated no earlier than three (3) days prior to the
Closing Date;
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(v) A Non -Foreign Affidavit and a California Franchise Tax
Board Form 590-RE executed by Authority;
(vi) Originals, if available, and copies if originals are unavailable,
of all WSA Contracts which Developer elects to assume pursuant to
Section 4.2 hereof (to be delivered to Developer at the Property upon
Close of Escrow);
(vii) Originals or, if unavailable, copies of all Intangible Personal
Property which Authority has in its possession (to be delivered to
Developer at the Property upon Close of Escrow);
(viii) Two (2) duplicate originals of an Assignment of Contracts
that includes all WSA Contracts which Developer has elected to assume
pursuant to Section 4.2, duly executed by Authority;
(ix) All soils, seismic, geologic, drainage, toxic waste and
environmental reports, surveys, "as -built" plans and specifications,
working drawings, grading plans, elevations and similar information with
respect to the WSA Real Property and Additional Real Property heretofore
obtained by Authority which Authority has in its possession to the extent
that originals of such items have not been delivered previously by
Authority to Developer pursuant to Section 4.1 or 4.2 (to be delivered to
Developer at the Property upon Close of Escrow);
(x) Two (2) duplicate originals of the Notice to Tenants;
(xi) All keys to the WSA Improvements which Authority or
Authority's agents have in their possession, which keys shall include all
"master" keys and apartment unit keys in the possession of Authority or
its agents or representative, which keys shall be properly tagged for
identification (to be delivered to Developer at the Property upon Close of
Escrow);
(xii) A report to be ordered and obtained by Escrow Holder
prepared by Title Company or a search firm reasonable acceptable to
Developer of all UCC liens filed in the California Secretary of State's Office
against the WSA Property, to be delivered to Developer at least five (5)
days prior to the Closing Date;
(f) USDA and Provident Approvals. Each of USDA and Provident
shall have approved the transfer and sale of the WSA Property to Developer, and
the assignment and assumption of the USDA Loan and Provident Loan,
respectively, to Developer, and Authority shall have executed all documents
required by USDA and Provident to effect the transfer and sale and assignments.
(g) Assignment of Design and Engineering Agreements. Authority
shall have, concurrent with the Close of Escrow, assigned to Developer the
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Design and Engineering Agreements for the Project pursuant to the Assignment
of Contracts, which assignment shall be subordinated to any pledge or
assignment to the Construction Lender. Authority shall have also delivered to
Developer the written consent of the other party to each such Design and
Engineering Agreement to said assignment in the form included as part of said
Assignment of Contracts including, without limitation, to the use by Developer of
the Design and Engineering Agreements, as well as the ideas, designs, and
concepts contained within them.
(h) Building Permit. The Building Permit for the Project shall have
issued or shall be ready to issue subject only to the payment of applicable fees,
the posting of required security, or both.
(i) Settlement Statement. Developer shall have approved the
settlement statement prepared by Escrow Holder for the Close of Escrow.
Q) Title Insurance. The Title Company shall be prepared to issue an
ALTA extended policy of title insurance, with liability in the amount required by
the Investor, but in no event less than the total of the equity raised from the sale
of the Tax Credits plus the principal amounts of the Take -Out Loan and Authority
Loans, showing title to the Property vested in Developer, free and clear of all
recorded liens, encumbrances, encroachments, assessments, leases and taxes
except (i) the Project Documents being recorded at the Close of Escrow pursuant
to the terms of this Agreement, (ii) the lien of the Construction Loan Security
Documents, (iii) the exceptions set forth in that certain preliminary title report
issued by the Title Company as its Order Number FS1699, dated April 17, 2017
(the "Title Report"), and (iv) the standard conditions and exceptions contained in
an ALTA standard owner's policy of title insurance that is regularly issued by the
Title Company in transactions similar to the one contemplated by this Agreement
(the "Developer Title Policy"). With respect to the forgoing, Developer
acknowledges that prior to the Effective Date, Authority has caused the Title
Company to deliver to Developer a copy of the Title Report, together with legible
copies of the documents underlying the exceptions set forth therein, and
Developer has approved all of the same. The Title Company shall provide the
City with a copy of Developer Title Policy.
(k) No Default. No Event of Default by Authority shall then exist, and
no event shall then exist which, with only the giving of notice or the passage of
time or both, would constitute an Event of Default by Authority.
6.4 Developer Right to Terminate. If, by the time provided in the Schedule of
Performance, any of the conditions set forth in Section 6.3 have not been satisfied, or
waived by Developer, then Developer, provided that it is not then in material default
under this Agreement (subject to the notice and cure provisions of Section 12.1), may
terminate this Agreement by giving thirty (30) days' written notice to Authority. In the
event of such termination, (i) Developer shall not be required to repay any amounts of
the Construction Portion of Authority Loan (Property and Construction) disbursed to
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Developer for predevelopment costs and any amounts loaned to Developer by Authority
for payment of predevelopment costs shall be forgiven; (ii) Developer shall deliver to
Authority any reports, studies, drawings, plans and specifications; and (ii) with the
exception of any indemnity obligations of Developer and any other obligations of
Developer that are expressly stated in this Agreement to survive the termination of this
Agreement, Developer shall have no further obligations under this Agreement.
6.5 Developer's Failure to Satisfy Conditions. If, by the time provided in the
Schedule of Performance, any of the conditions set forth in Section 6.2 have not been
satisfied, or waived by Authority, then Authority, provided that it is not then in material
default under this Agreement (subject to the notice and cure provisions of Section 12.1),
may terminate this Agreement by giving thirty (30) days' written notice to Developer.
6.6 Waiver of Conditions. The conditions set forth in Section 6.2 are for
Authority's benefit only and the Executive Director may waive all or any part of such
rights by written notice to Developer. The conditions set forth in Section 6.3 are for
Developer's benefit only and Developer may waive all or any part of such rights by
written notice to Authority.
7. CLOSE OF ESCROW; ESCROW EXPENSES
7.1 Close of Escrow. Upon receipt by the Escrow Holder of all funds and
documents required to conduct the Close of Escrow in accordance with this Agreement,
and when the conditions precedent described in Section 6.2 have been satisfied, or
waived by the Executive Director, and the conditions precedent described in Section 6.3
have been satisfied, or waived by Developer, the Escrow Holder shall take all of the
following actions:
(a) Recordation. Escrow Holder shall record the following documents
in the Official Records in the following order:
(i) Grant Deed;
(ii) Authority Regulatory Agreement;
(iii) the Construction Loan Security Documents;
(iv) the Authority Deed of Trust (Plans);
(v) the Authority Deed of Trust (Property and Construction);
(vi) the Request for Notice;
(vii) the Notice of Affordability; and
(viii) such other documents required to close the Escrow in
accordance with this Agreement;
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(b) Deliveries to Authority. Escrow Holder shall deliver to Authority:
(i) a conformed copy of each of the documents recorded
pursuant to paragraph (a) above;
(i i) the original recorded Authority Regulatory Agreement,
Authority Deed of Trust (Plans), Authority Deed of Trust (Property and
Construction), Request for Notice, and Notice of Affordability; and
(iii) Authority Title Policy;
(c) Deliveries to Developer. Escrow Holder shall deliver to Developer:
(i) a conformed copy of each of each of the documents
recorded pursuant to paragraph (a) above;
(i i) the original recorded Grant Deed; and
(iii) Developer Title Policy.
(d) Property Taxes. Authority is exempt from the payment of property
taxes and will not be required to pay any taxes for the Property. Developer shall
pay all property taxes and assessments for the Property from and after the Close
of Escrow.
7.2 Expenses of Developer. Developer shall pay: (a) any and all
documentary transfer taxes and recording fees arising from the conveyance of the
Property from Authority to Developer, (b) the Escrow fee, (c) the premium for the
Authority Title Policy and Developer Title Policy, and (d) all such other costs and
expenses related to the Escrow and not expressly provided for herein.
7.3 Instruction to Escrow Holder Regarding Waiver of Transfer Taxes and
Recording Fees. The Escrow Holder is hereby instructed to seek such waivers and
exemptions from transfer taxes and recording fees as are available pursuant to
Revenue and Taxation Code Section 11922 and Government Code Sections 6103 and
27383, respectively.
7.4 Broker's Commissions. Developer represents and warrants to Authority
that Developer has not engaged any broker, agent or finder in connection with this
Agreement, and Developer agrees to indemnify, protect, hold harmless, and defend the
Indemnitees from any claim by any brokers, agents or finders retained by Developer.
Authority represents and warrants to Developer that Authority has not engaged any
broker, agent, or finder in connection with this Agreement, and Authority agrees to
indemnify, protect, hold harmless, and defend Developer and its officers, officials,
members, employees, representatives, agents, and volunteers from any claim by any
brokers, agents, or finders retained by Authority.
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8. OTHER ESCROW INSTRUCTIONS
8.1 Funds in Escrow. All funds received in the Escrow shall be deposited by
the Escrow Holder in a general escrow account with any state or national bank doing
business in the State of California and reasonably approved by the Executive Director
and Developer, and such funds may be combined with other escrow funds of the
Escrow Holder. All disbursements shall be made on the basis of a thirty (30) day
month.
8.2 Failure to Close. If the Close of Escrow does not occur on or before the
(applicable) Outside Closing Date, either party not then in default may, in writing,
demand the return of its money, papers, or documents from the Escrow Holder. No
demand for return shall be recognized until fifteen (15) days after the Escrow Holder (or
the party making such demand) shall have mailed copies of such demand to the other
party. Objections, if any, shall be raised by written notice to the Escrow Holder and to
the other party within the fifteen (15) day period, in which event the Escrow Holder is
authorized to hold all money, papers and documents until instructed by mutual
agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. If
no such demands are made, the Escrow Holder shall close the Escrow as soon as
possible.
If objections are raised in the manner provided above, the Escrow Holder shall
not be obligated to return any such money, papers or documents except upon the
written instructions of both the Executive Director and Developer, or until the party
entitled thereto has been determined by a final decision of a court of competent
jurisdiction. If no such objections are made within said fifteen (15) day period, the
Escrow Holder shall immediately return the demanded money, papers or documents.
8.3 Amendments. Any amendment to these Escrow instructions shall be in
writing and signed by the Executive Director or Authority Counsel and Developer. At
the time of any amendment, the Escrow Holder shall agree to carry out its duties as the
Escrow Holder under such amendment.
8.4 Notices. All Notices from the Escrow Holder to Authority or Developer
shall be given in the manner provided in Section 13.
8.5 Liability. The liability of the Escrow Holder under this Agreement is limited
to performance of the obligations imposed upon it under Sections 6, 7 and 8 and such
additional general or special instructions as may be prepared by the Escrow Holder and
approved and executed by the parties.
9. DEVELOPMENT OF THE PROJECT
9.1 Scope of Development. Developer shall construct the Project on the
Property in accordance with all applicable Governmental Requirements, the approved
Land Use Entitlements, and the Scope of Development. In the event of any conflict
between the approved Land Use Entitlements and the Scope of Development, the
approved Land Use Entitlements shall govern and control. Subject to Section 16.10
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below, Developer shall commence and complete construction of the Project on the
Property by the respective times established therefor in the Schedule of Performance.
9.2 Additional Governmental Permits and Approvals. Before commencement
of construction or development of any buildings, structures or other works of
improvement upon the Property by Developer, Developer shall, at its own expense,
secure or cause to be secured any and all permits and approvals not included in the
Land Use Entitlements which may be required by the City or any other governmental
agency affected by or with jurisdiction over such construction, development or work,
including, without limitation, a Building Permit. Developer shall pay all necessary fees.
Authority will, without obligation to incur liability or expense therefor, use its reasonable
efforts to expedite issuance of building permits and certificates of occupancy for
construction that meets the requirements of the La Quinta Municipal Code.
9.3 Displacement; Relocation. Developer acknowledges that each of the
Existing WSA Tenants will be displaced in order to complete the demolition of one (1) of
the Existing WSA Units and rehabilitation work planned for seventy-two (72) of the
Existing WSA Units. Developer acknowledges and agrees that it is the purpose and
intent of Authority to minimize the disruption to the Existing WSA Tenants. In
furtherance of the foregoing, Developer shall not displace any Existing WSA Tenant
until such time as Developer has either completed construction of a New WSA Unit or
completed rehabilitation of an Existing WSA Unit, as evidenced by the City's issuance of
a certificate of occupancy for such New WSA Unit or rehabilitated Existing WSA Unit, as
applicable, and the Existing WSA Tenant is relocated to such New WSA Unit or
rehabilitated Existing WSA Unit, as applicable. In carrying out the construction of the
Project, Developer shall comply with the Relocation Plan and Relocation Laws and
Regulations.
9.4 Cost of Project. With the exception of the Authority Loans that Authority
has agreed to provide Developer hereunder to assist Developer with the costs to
acquire the Property and construct the Project, all Project Costs shall be borne
exclusively by Developer. The Developer shall also bear all costs related to discharging
the duties of Developer set forth in this Agreement. The Developer shall be responsible
for all fees associated with construction of the Project, including, but not limited to,
school facilities fees and development impact fees.
9.5 Indemnity. Developer shall defend (by counsel satisfactory to Authority),
reimburse, indemnify, protect, and hold harmless the Indemnitees on demand, for any
and all claims, including claims for injunctive, equitable, or declaratory relief, losses,
costs, liabilities of any kind (including strict liability), including liability for damage to
property or injuries to persons, including accidental death, damages, expenses
(including reasonable attorneys' fees incurred in connection with any of the foregoing
and incurred in connection with enforcing this provision), penalties or fines, of any kind
whatsoever, paid, incurred, or suffered by or asserted against any of the Indemnitees by
any person (collectively "Claims"), in connection with, arising out of or resulting in any
way whatsoever from any of the following (except to the extent arising or resulting from
the gross negligence or willful misconduct of any Indemnitee):
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(a) the activities or performance of Developer or any of Developer's
employees, agents, representatives, contractors, or subcontractors under this
Agreement;
(b) the making of the Authority Loans;
(c) any act or omission of Developer, any of Developer's contractors,
subcontractors or material suppliers, engineers, architects or other persons with
respect to the Property;
(d) the acquisition, occupancy or use of the Property by Developer; or
(e) Developer's failure to comply with the Relocation Plan or
Relocation Laws and Regulations.
9.6 Insurance Requirements.
(a) Commencing on the Close of Escrow and continuing throughout the
term of the Authority Regulatory Agreement, Developer shall procure and
maintain, at its sole cost and expense, in a form and content satisfactory to
Authority's Executive Director, the following policies of insurance:
(i) Commercial General Liability Insurance covering bodily
injury, property damage, personal injury and advertising injury written on a
per -occurrence and not a claims -made basis containing the following
minimum limits: (i) general aggregate limit of Three Million Dollars
($3,000,000); (ii) products -completed operations aggregate limit of Three
Million Dollars ($3,000,000); (iii) personal and advertising injury limit of
One Million Dollars ($1,000,000); and (iv) each occurrence limit of One
Million Dollars ($1,000,000). Said policy shall include the following
coverages: (i) blanket contractual liability (specifically covering the
indemnification clause contained in Section 9.5 hereof); (ii) products and
completed operations; (iii) independent contractors; (iv) Owner's broad
form property damage; (v) severability of interest; (vi) cross liability; and
(vii) property damage liability arising out of the so-called "XCU" hazards
(explosion, collapse and underground hazards). The policy shall be
endorsed to have the general aggregate apply to this Project only.
(ii) A policy of worker's compensation insurance in such amount
as will fully comply with the laws of the State of California and which shall
indemnify, insure, and provide legal defense for Authority and Developer
against any loss, claim or damage arising from any injuries or
occupational diseases occurring to any worker employed by or any
persons retained by Developer in the course of carrying out the work or
services contemplated in this Agreement, and Employers Liability
Insurance in an amount not less than One Million Dollars ($1,000,000)
combined single limit for all damages arising from each accident or
occupational disease.
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(iii) A policy of comprehensive automobile liability insurance
written on a per -occurrence basis in an amount not less than Two Million
Dollars ($2,000,000) combined single limit covering all owned, non -owned,
leased and hired vehicles used in connection with the Work.
(b) Commencing on the date of the Close of Escrow and continuing
until Authority issues a Release of Construction Covenants for the Project,
Developer shall procure and maintain, at its sole cost and expense, in a form and
content reasonably satisfactory to Authority's Executive Director, Builder's Risk
(course of construction) insurance coverage in an amount equal to the full cost of
the hard construction costs of the Project. Such insurance shall cover, at a
minimum: all work, materials, and equipment to be incorporated into the Project;
the Project during construction; the completed Project until such time as the City
issues a final certificate of occupancy for the Project, and storage and
transportation risks. Such insurance shall protect/insure the interests of
Developer/owner and all of Developer's contractor(s), and subcontractors, as
each of their interests may appear. If such insurance includes an exclusion for
"design error," such exclusion shall only be for the object or portion which failed.
Authority shall be a loss payee under such policy or policies and such insurance
shall contain a replacement cost endorsement
(c) Prior to commencing any activities hereunder, Developer shall
cause any general contractor with whom it has contracted for the performance of
work on the Property to secure and thereafter to maintain insurance that satisfies
all of the requirements of this Section 9.6.
(d) Commencing on the date Authority issues a Release of
Construction Covenants, and continuing throughout the term of the Regulatory
Agreement, Developer shall procure and maintain, at its sole cost and expense,
in a form and content satisfactory to Authority's Executive Director, the following
types of insurance:
(i) Insurance against fire, extended coverage, vandalism, and
malicious mischief, and such other additional perils, hazards, and risks as
now are or may be included in the standard "all risk" form in general use in
Riverside County, California, with the standard form fire insurance
coverage in an amount equal to full actual replacement cost thereof, as
the same may change from time to time. The above insurance policy or
policies shall include coverage for earthquakes to the extent generally and
commercially available at commercially reasonable rates, if such
insurance is generally obtained for affordable Projects in the county of
Riverside. Authority shall be a loss payee under such policy or policies
and such insurance shall contain a replacement cost endorsement.
(ii) Business interruption and extra expense insurance to protect
Developer and Authority covering loss of revenues and/or extra expense
incurred by reason of the total or partial suspension or delay of, or
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interruption in, the operation of the Project caused by loss or damage to,
or destruction of, any part of the insurable real property structures or
equipment as a result of the perils insured against under the all risk
physical damage insurance, covering a period of suspension, delay or
interruption of at least twelve (12) months, in an amount not less than the
amount required to cover such business interruption and/or extra expense
loss during such period.
(iii) Boiler and machinery insurance in the aggregate amount of
the full replacement value of the equipment typically covered by such
insurance.
(e) The following additional requirements shall apply to all of the above
policies of insurance:
(i) All of the above policies of insurance shall be primary
insurance and, except the Worker's Compensation, Employer Liability
insurance, and automobile liability insurance, shall name the Indemnitees
as additional insureds on an ISO Form CG 20:10 (current version) or
substantially similar form and not an ISO Form CG 20:09. The insurer
shall waive all rights of subrogation and contribution it may have against
the Indemnitees and their respective insurers. All of said policies of
insurance shall provide that said insurance may not be amended or
cancelled without providing thirty (30) days' prior written notice to
Authority. In the event any of said policies of insurance are cancelled,
Developer shall, prior to the cancellation date, submit new evidence of
insurance in conformance with this Section to the Executive Director. Not
later than the Effective Date, Developer shall provide the Executive
Director with Certificates of Insurance or appropriate insurance binders
evidencing the above insurance coverages and said Certificates of
Insurance or binders shall be subject to the reasonable approval of the
Executive Director.
(ii) The policies of insurance required by this Agreement shall
be satisfactory only if issued by companies of recognized good standing
authorized to do business in California, rated "A-" or better in the most
recent edition of Best Rating Guide, The Key Rating Guide or in the
Federal Register, and only if they are of a financial category Class VII or
better, unless such requirements are waived by the Executive Director due
to unique circumstances.
(iii) The Developer agrees that the provisions of this Section
shall not be construed as limiting in any way Authority's right to
indemnification or the extent to which Developer may be held responsible
for the payment of damages to any persons or property resulting from
Developer's activities or the activities of any person or persons for which
Developer is otherwise responsible.
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9.7 Remedies for Defaults Re: Insurance. In addition to any other remedies
Authority may have, if Developer commits a default hereunder by failing to provide or
maintain any insurance policies or policy endorsements to the extent and within the time
herein required, Authority may, at its sole option, obtain such insurance and either
deduct the amount of the premium for such insurance from any sums due to Developer
by Authority from the Authority Loans or invoice the Developer for the amount of said
premium. Exercise of the remedy set forth herein, however, is an alternative to other
remedies Authority may have and is not the exclusive remedy for Developer's failure to
maintain insurance or secure appropriate endorsements.
9.8 Obligation to Repair and Restore Damage Due to Casualty Covered by
Insurance. If the Project shall be totally or partially destroyed or rendered uninhabitable
by fire or other casualty required to be insured against by Developer, Developer shall,
subject to the rights of the Construction Lender promptly proceed to obtain all available
insurance proceeds and, to the extent proceeds are available, take all steps necessary
to begin reconstruction and, immediately upon receipt of insurance proceeds, to
promptly and diligently commence the repair or replacement of the Project to
substantially the same condition as it existed prior to the casualty and Developer shall
complete or cause to be completed the same as soon as possible thereafter so that the
Project can be operated in accordance with this Agreement. The Authority shall
cooperate with Developer, at no expense to Authority, in an effort to obtain any
governmental permits required for such repair, replacement, or restoration.
9.9 Rights of Access. For purposes of assuring compliance with this
Agreement, representatives of Authority and the City shall have the right of access to
the Property without charges or fees, at normal business hours during the construction
of the Project (subject to reasonable job safety rules as may be imposed by Developer
or the General Contractor), including, but not limited to, the inspection of the work being
performed in constructing the Project, so long as they comply with all safety rules. Such
representatives of Authority or of the City shall be those who are so identified in writing
by the Executive Director of Authority. The Authority shall repair any damage arising
out of the activities of Authority and the City as referred to in this Section 9.10.
9.10 Compliance with Laws; Compliance with Prevailing Wage Laws.
(a) Compliance with Laws. The Developer shall carry out the
construction, development and operation of the Project in conformity with all
Governmental Requirements, including without limitation all applicable state labor
standards, City zoning and development standards, building, plumbing,
mechanical and electrical codes, and all other provisions of the City's Municipal
Code, and all applicable disabled and handicapped access requirements,
including without limitation the Americans With Disabilities Act, 42 U.S.C. Section
12101, et seq., Government Code Section 4450, et seq., Government Code
Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et
seq.
(b) Compliance with Prevailing Wage Laws.
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(i) Developer shall carry out the construction through
completion of the Project and the overall development of the Property in
conformity with all applicable Governmental Requirements relating to the
payment of prevailing wages and compliance with prevailing wage rules,
including, without limitation, if applicable, the requirements to pay
prevailing wages under federal law (the Davis -Bacon Act, 40 U.S.C.
Section 3141, et seq., and the regulations promulgated thereunder set
forth at 29 CFR Part 1 (collectively, "Davis -Bacon")) and California law
(Labor Code Section 1720, et seq.) ("California Prevailing Wage Law").
The parties acknowledge that a financing structure utilizing certain federal
and/or state funding sources and financing scenarios may trigger
compliance with applicable state and federal prevailing wage laws and
regulations. Developer shall determine the applicability of federal, state,
and local prevailing wage laws based upon the final financing structure
and sources of funding of the Project, as approved by the Executive
Director.
(ii) Developer shall be solely responsible, expressly or impliedly
and legally and financially, for determining and effectuating compliance
with all applicable federal, state, and local public works requirements,
prevailing wage laws, and labor laws and standards, and Authority makes
no representation, either legally and/or financially, as to the applicability or
non -applicability of any federal, state, and local laws to the construction of
the Project. Developer expressly, knowingly, and voluntarily
acknowledges and agrees that neither Authority nor the City have
previously represented to Developer or to any representative, agent, or
Affiliate of Developer, or any contractor(s) or any subcontractor(s) for the
demolition work, construction, or development of the Project, in writing or
otherwise, in a call for bids or otherwise, that the work and construction of
the Project is (or is not) a "public work," as defined in Section 1720 of the
Labor Code or under Davis -Bacon.
(iii) Developer knowingly and voluntarily agrees that Developer
shall have the obligation to provide any and all disclosures or
identifications as may be required by Labor Code Section 1781 and/or by
Davis Bacon, as the same may be amended from time to time, or any
other similar law or regulation, to the extent applicable to the work and
construction of the Project. Developer shall indemnify, protect, pay for,
defend, and hold harmless the Indemnitees, with legal counsel reasonably
acceptable to Authority, from and against any and all loss, liability,
damage, claim, cost, expense, and/or "increased costs" (including
reasonable attorneys fees, court and litigation costs, and fees of expert
witnesses) which, in connection with the development, construction (as
defined by applicable law) and/or operation of the Project, including,
without limitation, any and all public works (as defined by applicable law),
results or arises in any way from any of the following: (i) the
noncompliance by Developer or its contractor with any applicable local,
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state, and/or federal law or regulation, including, without limitation, any
applicable federal and/or state labor laws or regulations (including, without
limitation, if applicable, the requirement to pay state and/or federal
prevailing wages and hire apprentices); (ii) the implementation of Section
1781 of the Labor Code and/or of Davis Bacon, as the same may be
amended from time to time, or any other similar law or regulation; and/or
(iii) failure by Developer to provide any required disclosure or identification
as required by Labor Code Section 1781 and/or by Davis Bacon, as the
same may be amended from time to time, or any other similar law or
regulation. It is agreed by the parties that, in connection with the
demolition work, development, and construction (as defined by applicable
law or regulation) of the Project, including, without limitation, any and all
public works (as defined by applicable law or regulation), Developer shall
bear all risks of payment or non-payment of prevailing wages under
applicable federal, state, and local law or regulation and/or the
implementation of Labor Code Section 1781 and/or by Davis Bacon, as
the same may be amended from time to time, and/or any other similar law
or regulation. The foregoing indemnity shall survive termination of this
Agreement and shall continue after completion of the construction and
development of the Project by Developer.
(iv) "Increased costs," as used in this Section 9.10, shall have
the meaning ascribed to it in Labor Code Section 1781, as the same may
be amended from time to time.
9.11 Anti -Discrimination. Pursuant to Section 33050 of the California
Community Redevelopment Law, Developer for itself and its successors and assigns,
agrees, that in the construction of the Project on the Property or other performance
under this Agreement, Developer shall not discriminate against any employee or
applicant for employment on any basis listed in subdivision (a) or (d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and
Section 12955.2 of the Government Code.
9.12 Taxes and Assessments. After the Close of Escrow, Developer shall pay
prior to delinquency all real estate taxes and assessments on the Property so long as
Developer retains any interest therein. Developer shall remove or have removed any
levy or attachment made on the Site or any part thereof, or assure the satisfaction
thereof within a reasonable time but in any event prior to any sale or transfer of all or
any portions thereof. Notwithstanding the above, Developer shall have the right to
contest the validity or amounts of any tax, assessment, or encumbrance available to
Developer in respect thereto, or obtain any available exemptions.
9.13 Right of Authority to Satisfy Other Liens on the Property(s). At any time
prior to the completion of construction, and after Developer has had written notice and
has failed after a reasonable time, but in any event not less than forty-five (45) days, to
challenge, cure, adequately bond against, or satisfy any liens or encumbrances on the
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Property which are not otherwise permitted under this Agreement, Authority shall have
the right but no obligation to satisfy any such liens or encumbrances. Notwithstanding
the above, Developer shall have the right to contest the validity or amounts of any liens
or encumbrance available to Developer in respect thereto.
9.14 Non -liability of Authority. Developer acknowledges and agrees that:
(a) Authority neither undertakes nor assumes any responsibility to
review, inspect, supervise, approve (other than for aesthetics) or inform
Developer of any matter in connection with the development of the Project,
including matters relating to: (i) contractors, subcontractors and materialmen, or
the workmanship of or materials used by any of them, and/or (ii) the progress of
the Project and its conformity with the Final Construction Documents; and
Developer shall rely entirely on its own judgment with respect to such matters
and acknowledge that any review, inspection, supervision, approval or
information supplied to Developer by Authority in connection with such matters is
solely for the protection of Authority and that neither Developer nor any third
party is entitled to rely on it;
(b) Authority is not a partner, joint venturer, alter -ego, manager,
controlling person or other business associate or participant of any kind of
Developer and Authority does not intend to ever assume any such status; and
Authority shall not be deemed responsible for or a participant in any acts,
omissions or decisions of Developer;
(c) Authority shall not be directly or indirectly liable or responsible for
any loss or injury of any kind to any person or property resulting from any
construction on, or occupancy or use of, the Property whether arising from:
(i) any defect in any building, grading, landscaping or other onsite or offsite
improvement; (ii) any act or omission of Developer or any of Developer's agents,
employees, contractors, licensees or invitees; or (iii) from and after the Close of
Escrow any accident on the Property or any fire or other casualty or hazard
thereon not caused by the Indemnitees; and
(d) By accepting or approving anything required to be performed or
given to Authority under this Agreement, including any certificate, financial
statement, survey, appraisal or insurance policy, Authority shall not be deemed
to have warranted or represented the sufficiency or legal effect of the same, and
no such acceptance or approval shall constitute a warranty or representation by
Authority to anyone.
9.15 Release of Construction Covenants. Promptly after completion of
construction of the Project by Developer in conformity with this Agreement, Authority
shall furnish Developer with a Release of Construction Covenants upon written request
therefor by Developer. Authority shall not unreasonably withhold such Release of
Construction Covenants. Such Release of Construction Covenants shall be a
conclusive determination of satisfactory completion of the construction required by this
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Agreement and the Release of Construction Covenants shall so state. The Release of
Construction Covenants shall be in the form attached hereto as Attachment No. 19 or
such other similar form as to permit it to be recorded in the Official Records. If Authority
refuses or fails to furnish a Release of Construction Covenants for the Project after
written request from Developer, Authority shall, within fifteen (15) days of written
request therefor, provide Developer with a written statement of the reasons Authority
refused or failed to furnish the requested Release of Construction Covenants. The
statement shall also contain Authority's opinion of the actions Developer must take to
obtain the Release of Construction Covenants. If the reason for such refusal is confined
to the immediate unavailability of specific items of materials for landscaping or other
minor "punch list" items, Authority shall issue its Release of Construction Covenants
upon the posting of cash, a bond, or other security acceptable to Authority in Authority's
sole discretion by Developer with Authority in an amount representing the fair value of
the work not yet completed, and Developer shall thereafter complete the "punch list"
work with reasonable diligence and in no event later than sixty (60) days after
Authority's issuance of the Release of Construction Covenants. A Release of
Construction Covenants shall not constitute evidence of compliance with or satisfaction
of any obligation of Developer to any holder of any mortgage or any insurer of a
mortgage securing money loaned to finance the improvements, or any part of this
Agreement, or a release of any obligations under this Agreement which survives
issuance of the Release of Construction Covenants. A Release of Construction
Covenants is not a notice of completion as referred to in the California Civil Code
Section 3093.
10. AFFORDABILITY COVENANTS
As more particularly provided in the Authority Regulatory Agreement, for a period
of fifty-five (55) years, (i) twenty-four (24) of the dwelling units in the Project shall be
rented to households whose incomes do not exceed the qualifying limits under
California law for "extremely low income households," as established by HUD, and as
published periodically by HCD; (ii) fifty (50) of the dwelling units in the Project shall be
rented to households whose incomes do not exceed forty percent (40%) of the area
median income for Riverside County, as established by HUD, and as published
periodically by HCD; (iii) sixty (60) of the dwelling units in the Project shall be rented to
households whose incomes do not exceed the qualifying limits under California law for
"very low income households," as established by HUD, and as published periodically by
HCD; and (iv) four (4) of the dwelling units in the Project shall be rented to households
whose incomes do not exceed sixty percent (60%) of the area median income for
Riverside County, as established by HUD, and as published periodically by HCD, with
all of such dwelling units rented at an affordable rent, pursuant to Health and Safety
Code Section 50053(b). The remaining two (2) of the dwelling units at the Project shall
be occupied by management and maintenance staff for the Project whose incomes do
not exceed the qualifying limits under California law for "moderate income households"
as established by HUD, and as published periodically by HCD.
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11. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
11.1 Developer's Formation, Qualification and Compliance. Developer
represents and warrants that (a) it is validly existing and in good standing under the
laws of the State of California, (b) it has all requisite authority to conduct its business
and own and lease its properties, (c) it has all requisite authority to execute and perform
its obligations under this Agreement, (d) this Agreement is binding upon Developer in
accordance with its terms, and (e) the individuals executing this Agreement on behalf of
Developer are duly authorized to execute and deliver this Agreement on behalf of
Developer.
11.2 Litigation. Developer represents and warrants that there are no actions,
lawsuits or proceedings pending or, to the best of Developer's knowledge, threatened
against or affecting Developer, the adverse outcome of which could have a material
adverse effect on Developer's ability to perform its obligations under this Agreement.
11.3 Authority. Authority represents and warrants that (a) it is validly existing
and in good standing under the laws of the State of California, (b) it has all requisite
authority to conduct its business and own and lease its properties, (c) it has all requisite
authority to execute and perform its obligations under this Agreement, (d) this
Agreement is binding upon Authority in accordance with its terms, and (e) the
individuals executing this Agreement on behalf of Authority are duly authorized to
execute and deliver this Agreement on behalf of Authority.
12. DEFAULTS AND REMEDIES
12.1 Event of Default. Any of the following events or occurrences with respect
to either party shall constitute a material breach of this Agreement and, after the
expiration of any applicable cure period, shall constitute an "Event of Default" by such
party:
(a) The failure by either party to pay any amount in full when it is due
under this Agreement, if the failure has continued for a period of ten (10) days
after the party entitled to payment demands in writing that the other party cure
that failure.
(b) The failure by either party to perform any other obligation under this
Agreement, if the failure has continued for a period of thirty (30) days after
demand in writing that such party cure the failure, or such shorter time period as
may be provided for in one of the other Project Documents. If, however, by its
nature the failure cannot reasonably be cured within said time period, such party
may have such longer period of time as is reasonably necessary to cure the
failure, provided that such party commences said cure within said thirty (30) day
period, and thereafter diligently prosecutes said cure to completion.
12.2 No Waiver. Except as otherwise expressly provided in this Agreement,
any failure or delay by either party in asserting any of its rights or remedies as to any
default shall not operate as a waiver of any default, or of any such rights or remedies, or
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deprive any such party of its right to institute and maintain any actions or proceedings
which it may deem necessary to protect, assert or enforce any such rights or remedies.
12.3 Legal Actions.
(a) Specific Performance. The non -defaulting party, upon expiration of
applicable notice and cure periods, shall be permitted, but not obligated, to
commence an action for specific performance of the terms of this Agreement, or
to cure, correct or remedy any default hereunder or to obtain any other legal or
equitable remedy consistent with the purpose of this Agreement. In this regard,
Developer specifically acknowledges that Authority is entering into this
Agreement for the purpose of assisting in the redevelopment of the Property and
the provision of affordable housing and not for the purpose of enabling Developer
to speculate in land. Authority shall also have the right to pursue damages for
Developer's defaults but in no event shall Developer be entitled to damages of
any kind from Authority, including, without limitation, damages for economic loss,
lost profits, or any other economic or consequential damages of any kind. The
foregoing sentence shall not affect the right of the Developer to receive attorney's
fees pursuant to Section 12.3(c) below.
(b) Institution of Legal Actions. —Any legal actions must be instituted in
the Superior Court of the County of Riverside, State of California, or in the
Federal District Court in the Central District of California.
(c) Attorney's Fees. If either party to this Agreement is required to
initiate or defend litigation in any way connected with this Agreement, the
prevailing party in such litigation, in addition to any other relief which may be
granted, whether legal or equitable, shall be entitled to reasonable attorneys'
fees. If either party to this Agreement is required to initiate or defend litigation
with a third party because of the violation of any term or provision of this
Agreement by the other party, then the party so litigating shall be entitled to
reasonable attorneys' fees from the other party to this Agreement. Attorneys'
fees shall include attorney's fees on any appeal, and in addition a party entitled
to attorney's fees shall be entitled to all other reasonable costs for investigating
such action, retaining expert witnesses, taking depositions and discovery, and all
other necessary costs incurred with respect to such litigation. All such fees shall
be deemed to have accrued on commencement of such action and shall be
enforceable whether or not such action is prosecuted to judgment.
(d) Applicable Law. The internal laws of the State of California shall
govern the interpretation and enforcement of this Agreement, without regard to
conflict of law principles.
(e) Acceptance of Service of Process.
(i) In the event that any legal action is commenced by the
Developer against Authority, service of process on Authority shall be
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made by personal service upon the Executive Director or in such other
manner as may be provided by law.
(ii) In the event that any legal action is commenced by Authority
against Developer, service of process on Developer shall be made by
personal service upon any officer or director of Developer and shall be
valid whether made within or without the State of California or in such
other manner as may be provided by law.
(f) Rights and Remedies a
expressly stated in this Agreement, th
cumulative, and the exercise by either
remedies shall not preclude the exercis
e
12.4 Reimbursement of Authority. Within fifteen (15) days after its receipt of
written demand from Authority, Developer shall reimburse Authority for all costs
reasonably incurred by Authority (including the reasonable fees and expenses of
attorneys, accountants, appraisers and other consultants) in connection with Authority
enforcement of the Project Documents and all related matters, including, without
limitation, the following: (a) Authority's commencement of, appearance in, or defense of
any action or proceeding purporting to affect the rights or obligations of the parties to
any Project Document; and (b) all claims, demands, causes of action, liabilities, losses,
and other costs against which any of the Indemnitees is indemnified under the Project
Documents. Such reimbursement obligations shall bear interest from the date occurring
fifteen (15) days after Authority makes written demand to Developer at the rate of ten
percent (10%) per annum or the maximum legal rate, whichever is less. Such
reimbursement obligations shall survive termination of this Agreement.
13. NOTICES
All notices, consents, demands, approvals and other communications (the
"Notices") that are given pursuant to this Agreement shall be in writing to the
appropriate party and shall be deemed to have been fully given when delivered,
including personal delivery, delivery by reputable commercial delivery service that
provides a receipt with the time and date of delivery, or if deposited in the United States
mail, certified or registered, postage prepaid, within two (2) days after deposit. All
Notices shall be addressed as follows:
If to Developer: Coachella Valley Housing Coalition
45701 Monroe Street, Suite G
Indio, California, 92201
Phone No.:
Attention:
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with a copy to:
Gubb & Barshay LLP
505 14t" Street, Suite 1050
Oakland, CA 94612
Phone No.:
Attention: Scott R. Barshay, Esq.
If to Authority: La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Phone No.:
Attention: Executive Director
with a copy to Rutan & Tucker, LLP
611 Anton, Suite 1400
Costa Mesa, CA 92626
Phone No.: 714-641-5100
Attention: William H. Ihrke, Esq.
Addresses for notice may be changed from time to time by notice to the other party.
Notwithstanding that Notices shall be deemed given when delivered, the non -receipt of
any Notice as the result of a change of address of which the sending party was not
notified shall be deemed receipt of such Notice.
14. ASSIGNMENT
14.1 Generally Prohibited. Except as otherwise expressly provided to the
contrary in this Agreement, Developer shall not assign any of its rights or delegate any
of its duties under this Agreement, nor shall any changes occur with respect to the
ownership and/or control of Developer, including, without limitation, stock transfers, or
transfers, sales or issuances of membership or ownership interests, or statutory
conversions, without the prior written consent of the Executive Director, which consent
may be withheld in his or her sole and absolute discretion. Any such assignment or
delegation without such consent shall, at Authority's option, be void. Notwithstanding
the foregoing, however, (i) Developer may transfer and assign its rights and duties
hereunder to a limited partnership in which Developer or an Affiliate of Developer is the
general partner (the "Partnership") without obtaining any consent, the Investor may be
admitted to the Partnership as a Tax Credit limited partner without obtaining any
consent, and the Investor may assign its interests as a Tax Credit limited partner to a
subsequent reputable institutional investor without any consent; (ii) the Investor may
remove the general partner for a default under the Partnership Agreement, provided the
replacement general partner is reasonably acceptable to Authority; and (iii) Developer
may grant to the general partner an option and right of first refusal to purchase the
Project or the Investor's limited partnership interest, and the general partner, or its
Affiliate, may exercise such option or right of first refusal to acquire the Project or the
limited partnership interest. For purposes of this Section 14.1, if the Investor transfers
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to an entity in which the Investor or an Affiliate of the Investor is the managing general
partner or managing member such transferee entity shall be deemed to be a "reputable
institutional investor." This Section 14.1 shall not be applicable to the leasing of
individual dwelling units to income eligible households in accordance with the Authority
Regulatory Agreement.
14.2 Release of Developer. Upon any such assignment made in compliance
with Section 14.1 above which is evidenced by a written assignment and assumption
agreement in a form approved by Authority's counsel, the transferor shall be released
from any liability under this Agreement arising from and after the effective date of such
assignment.
15. ADMINISTRATION
Following approval of this Agreement by Authority, this Agreement shall be
administered and executed on behalf of Authority by the Executive Director. The
Executive Director shall have the authority to issue interpretations, waive terms and
conditions, enter into subordination agreements with public funding sources where the
public funding source's regulations require such subordination, or with other funding
sources if such subordination agreements do not result in the subordination of the
Authority Regulatory Agreement, and enter into amendments of this Agreement
(including, without limitation, to the Schedule of Performance) on behalf of Authority
provided that such actions do not substantially change the uses or development
permitted on the Property or materially add to the costs or obligations or impair the
rights or remedies of Authority provided herein. . All other waivers or amendments
shall require the formal consent of the Board of Directors of Authority.
16. MISCELLANEOUS
16.1 Counterparts. This Agreement may be executed in counterparts, all of
which, taken together, shall be deemed to be one and the same document.
16.2 Prior Agreements; Amendments. This Agreement contains the entire
agreement between Authority and Developer with respect to the Project and the
Property, and all prior negotiations, understandings and agreements are superseded by
this Agreement. No modification of this Agreement (including waivers of rights and
conditions) shall be effective unless in writing and signed by the party against whom
enforcement of such modification is sought, and then only in the specific instance and
for the specific purpose given. Authority agrees to consider in good faith making
reasonable modifications to this Agreement that are necessary to finance the
development of the Project.
16.3 Severability of Provisions. No provision of this Agreement that is held to
be unenforceable or invalid shall affect the remaining provisions if and to the extent that
the primary purposes of this Agreement can still be accomplished without materially
impairing the rights or increasing the obligations or risks of each party, as reasonably
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determined by that party, and to that extent all provisions of this Agreement are hereby
declared to be severable.
16.4 Interpretation. Both parties have participated in the drafting of this
Agreement and any ambiguities in this Agreement shall not be construed for or against
either party on account of the authorship or presumed authorship hereof. Article and
section headings are included in this Agreement for convenience of reference only and
shall not be used in construing this Agreement. Any defined term used in the plural in
this Agreement shall refer to all members of the relevant class and any defined term
used in the singular shall refer to any of the members of the relevant class. References
herein to Articles, Sections, and Attachments shall be construed as references to this
Agreement unless a different document is named. References to subparagraphs shall
be construed as references to the same Section in which the reference appears. The
terms "including" and "include" mean "including (include) without limitation."
16.5 Accounting Principles. Any accounting term used and not specifically
defined in this Agreement shall be construed, and all financial data required to be
submitted under this Agreement shall be prepared, in conformity with generally
accepted accounting principles applied on a consistent basis or in accordance with such
other principles or methods as are reasonably acceptable to Authority.
16.6 Attachments Incorporated. All attachments to this Agreement, as now
existing and as the same may from time to time be modified, are incorporated herein by
this reference.
16.7 Time of the Essence. Time is of the essence of this Agreement.
16.8 Warranty Against Payment of Consideration. Developer warrants that it
has not paid or given, and will not pay or give, any third person any money or other
consideration for obtaining this Agreement.
16.9 Non -liability of Authority Officials and Employees. No member, director,
officer, employee, or volunteer of Authority shall be personally liable to Developer, or
any successor in interest, in the event of any default or breach by Authority or for any
amount which may become due to Developer or successor, or on any obligation under
the terms of this Agreement.
16.10 Force Majeure. In addition to specific provisions of this Agreement,
performance by either party hereunder shall not be deemed to be in default where
delays or defaults are due to war; insurrection; strikes; lockouts; riots; floods;
earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; litigation beyond the reasonable
control of a party; unusually severe weather; inability, despite commercially reasonable
efforts, to secure necessary labor, materials or tools; delays of any contractor,
subcontractor or supplier beyond the reasonable control of a party; acts of the other
party; acts or the failure to act of any public or governmental entity (except that acts or
the failure to act of Authority shall not excuse performance by Authority); or any other
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acts or causes beyond the reasonable control of the party claiming an extension of time
to perform. An extension of time for any such cause shall be for the period of the
enforced delay and shall commence to run from the time of the commencement of the
cause, if notice by the party claiming such extension is sent to the other party within
thirty (30) days of the commencement of the cause. Force Majeure shall serve also to
extend the time by which any condition, for the benefit of either party, shall be satisfied
under this Agreement. Notwithstanding any provision of this Agreement to the contrary,
in no event shall adverse market conditions, interest rates, the lack of funding or
difficulty obtaining the financing necessary to complete the Project constitute grounds of
enforced delay pursuant to this Section.
16.11 Nondiscrimination Covenants. Developer covenants by and for itself and
any successors in interest that there shall be no discrimination against or segregation
of, any person or group of persons on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the Government Code, as those bases are defined in Sections
12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer,
use, occupancy, tenure, or enjoyment of the Property, nor shall the grantee or any
person claiming under or through him or her, establish or permit any practice or
practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in
the Property. The foregoing covenants shall run with the land.
Developer shall refrain from restricting the rental, sale or lease of the Property on
any of the bases listed above in this Section 16.11. All such deeds, leases or contracts
shall contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(a) In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases
are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of
the premises herein conveyed, nor shall the grantee or any person claiming
under or through him or her, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land."
(b) In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through him or her, and this lease is made and accepted upon
and subject to the following conditions:
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"That there shall be no discrimination against or segregation
of any person or group of persons, on account of any basis
listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections
12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the
Government Code, in the leasing, subleasing, transferring,
use, occupancy, tenure, or enjoyment of the premises herein
leased nor shall the lessee himself or herself, or any person
claiming under or through him or her, establish or permit any
such practice or practices of discrimination or segregation
with reference to the selection, location, number, use, or
occupancy, of tenants, lessees, sublessees, subtenants, or
vendees in the premises herein leased."
(c) In contracts: "There shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases
are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of
the premises which are the subject of this Agreement, nor shall the grantee or
any person claiming under or through him or her, establish or permit any practice
or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees,
or vendees in the premises herein conveyed. The foregoing covenants shall run
with the land."
The covenants established in this Section 16.11 shall, without regard to technical
classification and designation, be binding for the benefit and in favor of Authority and its
successors and assigns, and shall remain in effect in perpetuity.
16.12 Consents and Approvals. Unless otherwise expressly set forth in this
Agreement, any consents or approvals to be given by a party under this Agreement
shall not be unreasonably withheld, conditioned or delayed.
16.13 Third Party Beneficiary. The City is an intended third party beneficiary of
this Agreement and shall have the right, but not the obligation, to enforce its terms
including the rights and benefits that Authority has under this Agreement. Except as
provided in this Section 16.13, no person or entity other than Authority, Developer, and
the City, and the permitted successors and assigns of each of them, shall be authorized
to enforce the provisions of this Agreement.
[End of Agreement — Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed.
ATTEST:
Susan Maysels, City Clerk
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
William H. Ihrke, City Attorney
"Authority"
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
Ao-
Frank J. Spevacek, Executive Director
"Developer"
COACHELLA VALLEY HOUSING
COALITION,
a California nonprofit public benefit
corporation
By:
Its:
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ATTACHMENTS
1 - Legal Description and Depiction of the Property
2 - Site Plan
3 - Schedule of Performance
4 - Scope of Development
5 - Form of Grant Deed
6 - Form of Warranty Bill of Sale
7 - Form of Assignment of Leases
8 - Form of Non -Foreign Affidavit
9 - Form of Assignment of Contracts, Permits, Intangible Personal Property,
Warranties, and Guaranties (to Developer)
10 - Form of Assignment of Contracts, Permits, Intangible Personal Property,
Warranties, and Guaranties (to Authority)
11 - Form of Notice to Tenants
12 - Lead -Based Paint Disclosure and Acknowledgement
13 - Form of Disbursement Request
14A - Form of Authority Note (Plans)
14B Form of Authority Note (Property and Construction)
15A - Form of Authority Deed of Trust (Plans)
15B Form of Authority Deed of Trust (Property and Construction)
16 - Project Budget
17 - Form of Authority Regulatory Agreement
18 - Form of Notice of Affordability
19 - Form of Release of Construction Covenants
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ATTACHMENT NO. 1A
LEGAL DESCRIPTION OF PROPERTY
All that certain real property situated in the County of Riverside, State of California,
described as follows:
Parcel A: (Assessor's Parcel No: 609-040-007, 023)
Parcel 1 of that certain Certificate of Compliance No. COC 2008-026 in the City of La
Quinta, County of Riverside, State of California, recorded October 31, 2008 as
Instrument No. 2008-0582811 of Official Records, described as follows:
A portion of Parcel "A" of Lot Line Adjustment No. 5167, recorded October 15, 2007 as
Instrument No. 2007-0636486, of Official Records County of Riverside, State of
California, in the South half of the South half of the Northwest Quarter of Section 18,
Township 5 South, Range 7 East, of the San Bernardino Base and Meridian, in the City
of La Quinta, County or Riverside, State of California, being more particularly described
as follows:
Commencing at the West one -quarter corner of Section 18, Township 5 South, Range 7
East of the San Bernardino Base and Meridian, County of Riverside, State of California,
said point being on the centerline of Washington Street; thence North 89°39'27" East
along the East — West one -quarter Section line of said Section 18, a distance of 40.00
feet to the Southwest corner of Parcel "A" of Lot Line Adjustment No. 5167, recorded
October 15, 2007 as Instrument No. 2007-0636486 of Official Records County of
Riverside State of California, and the Easterly line of said Washington Street, said point
being 40.00 feet Easterly of the centerline of said Washington Street, as measured at
right angles thereto; thence North 00008'34" East along the Easterly line of said
Washington Street and the Westerly line of Parcel "A" of said Lot Line Adjustment No.
5167, a distance of 133.75 feet to the true point of beginning;
Thence North 00°08'34" East continuing along the Easterly line of said Washington
Street and the Westerly line of Parcel "A" of said Lot Line Adjustment No. 5167, a
distance of 530.32 feet to the Northwest corner of Parcel "A" of said Lot Line Adjustment
No. 5167, and the centerline of Hidden River Road;
Thence North 89°34'27" East along the centerline of said Hidden River Road and the
Northerly line of Parcel "A" of said Lot Line Adjustment No. 5167, a distance of 435.29
feet;
Thence South 00008'34" West along the Easterly line of Parcel "A" of said Lot Line
Adjustment No. 5167, a distance of 400.32 feet to the Northerly line of Parcel "A" of said
Lot Line Adjustment No. 5167 and the Southerly line of Parcel 2 of Parcel Map No.
12323, filed in Parcel Map Book 56, Pages 27 and 28, of Official Records County of
Riverside, State of California;
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Thence South 89034'27" West, a distance of 105.27 feet;
Thence South 00°08'34" West, a distance of 130.01 feet;
Thence South 89034'27" West, a distance of 330.03 feet to the point of beginning.
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ATTACHMENT NO. 1113
LEGAL DESCRIPTION OF PROPERTY
All that certain real property situated in the County of Riverside, State of California,
described as follows:
Parcel B: (Assessor's Parcel No: 609-040-028)
Parcel 2 of that certain Certificate of Compliance No. COC 2008-026 in the City of La
Quinta, County of Riverside, State of California, recorded October 31, 2008 as
Instrument No. 2008-0582811 of Official Records, described as follows:
A portion of Parcel "A" of Lot Line Adjustment No. 5167, recorded October 15, 2007 as
Instrument No. 2007-0636486 of Official Records County of Riverside, State of
California, said point conveyed as Parcel B to the La Quinta Redevelopment Agency, a
public body corporate and politic, by deed recorded October 15, 2007 as Instrument No.
2007-0636489 of Official Records, County of Riverside, State of California, in the South
half of the South half of the Northwest Quarter of Section 18, Township 5 South, Range
7 East of the San Bernardino Meridian, in the City of La Quinta, County of Riverside,
State of California, being more particularly described as follows:
Commencing at the West one -quarter corner of Section 18, Township 5 South, Range 7
East, of the San Bernardino Base and Meridian, County of Riverside, State of California,
said point being on the centerline of Washington Street; thence North 89°39'27" East
along the East — West one -quarter Section line of said Section 18, a distance of 40.00
feet to the Southwest corner of Parcel A of Lot Line Adjustment No. 5167, recorded
October 15, 2007 as Instrument No. 2007-0636486, of Official Records County of
Riverside, State of California, and the Easterly line of said Washington Street, said point
being 40.00 feet Easterly of the centerline of said Washington Street, as measured at
right angles thereto, being also the true point of beginning;
Thence North 00°08'34" East along the Easterly line of said Washington Street and the
Westerly line of Parcel A of said Lot Line Adjustment No. 5167, a distance of 133.75
feet;
Thence North 89034'27" East, a distance of 330.03 feet;
Thence North 00°08'34" East, a distance of 130.01 feet;
Thence North 89034'27' East a distance of 105.27 feet to an angle point in the Northerly
line of Parcel A of said Lot Line Adjustment No. 5167, said point being also on the
Southerly line of Parcel 2 of Parcel Map No. 12323, filed in Parcel Map Book 56, Pages
27 and 28 of Official Records County of Riverside, State of California;
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Thence North 89°34'27" East continuing along the Northerly line of Parcel A of said Lot
Line Adjustment No. 5167 and the Southerly line of Parcels 2 and 3 of said Parcel Map
No. 12323, a distance of 849.27 feet to the Northerly corner common to Parcels A and
B of said Lot Line Adjustment No. 5167;
Thence South 00°20'33" East along the common line between Parcels A and B of said
Lot Line Adjustment No. 5167, a distance of 265.62 feet to the Southerly corner
common to Parcels A and B of said Lot Line Adjustment No. 5167 and the East — West
one -quarter Section line of said Section 18;
Thence South 89039'27" West along the East — West one -quarter Section line of said
Section 18 and the Southerly line of Parcel A of said Lot Line Adjustment No. 5167, a
distance of 1286.80 feet to the point of beginning.
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Ri
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HIDDEN RIVER ROAD
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ATTACHMENT NO. 2
SITE PLAN
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9930825.4 a05/12/17 ATTACHMENT NO. 2
2.
3.
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7
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ATTACHMENT NO. 3
SCHEDULE OF PERFORMANCE
Task/Event
Developer submits application to
TCAC for Tax Credits
Developer submits to Authority
preliminary commitment for the Project
Financing.
Developer submits to Authority
Evidence of Financing Commitments.
Developer submits second application
to TCAC for Tax Credits if Developer is
unsuccessful in first round of
applications.
Developer submits third application to
TCAC for Tax Credits if Developer is
unsuccessful in second round of
applications
Developer and Authority open Escrow
Developer causes the conditions set
forth in Section 7.2 to be satisfied and
the Close of Escrow occurs.
Developer commences construction of
Project.
Developer submits to and obtains
approval from Authority for Marketing
Plan and Management Agreement in
compliance with Section 7 of Authority
Regulatory Agreement.
Developer completes construction of
Project.
Time for Performance
By application deadline for first round
following Effective Date.
By application deadline for second
round following Effective Date.
By application deadline for third round
following Effective Date.
Within five (5) days after Developer
obtains allocation of Tax Credits.
Upon satisfaction of the conditions set
forth in Section 7.2, but not later than
the Outside Closing Date.
Within 30 days after the Close of
Escrow.
Not later than twelve (12) months after
Close of Escrow, and prior to
completion of construction of Project.
Within 24 months after
commencement of construction.
11. Developer commences leasing the Within 15 days after completion of
dwelling units construction.
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12. Developer completes leasing of all Not later than three months after
dwelling units. completion of construction.
It is expressly understood and agreed by the Parties that the foregoing schedule
of performance is subject to all of the terms and conditions set forth in the text of the
Agreement including, without limitation, extension due to Force Majeure. Times of
performance under the Agreement may be extended by request of any Party
memorialized by a mutual written agreement between the Parties, which agreement
may be granted or denied in the non -requesting Party's sole and absolute discretion.
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ATTACHMENT NO. 4
SCOPE OF DEVELOPMENT
The Project, located on approximately 11.5 acres, will include the substantial
rehabilitation of all existing units, the construction of 68 new units, the construction of 2
new community buildings, laundry facilities, a health center, and 2 swimming pools.
The construction of the improvements is wood frame with color stucco walls and flat
roofs constructed on concrete slab foundations. Formal outdoor recreation areas
include roughly 2 acres of parkway/green belt for recreation and social gatherings, a
dog park, and two swimming pools. Ample space and free flowing paths provide
opportunities for informal social interactions.
The Project will be constructed per the plans and specifications developed by Studio E
Architects Inc. and consistent with the following Project entitlements, issued by the City
of La Quinta: SDP 2015-003 and SDP 2016-0002.
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ATTACHMENT NO. 5
FORM OF GRANT DEED
[See following document]
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73
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Coachella Valley Housing Coalition
45701 Monroe Street, Suite G
Indio, California, 92201
AND ALL TAX STATEMENTS TO:
WTI
` _ f L .. • 21
[SPACE ABOVE THIS LINE FOR RECORDER'S USE]
[EXEMPT FROM RECORDER'S FEE PURSUANT TO GOVERNMENT CODE SECTION 27383]
DOCUMENTARY TRANSFER TAX $
Computed on the consideration of the full value of property conveyed.
GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic ("Grantor"),
hereby grants to , a California limited partnership
("Grantee"), the real property located in the City of La Quinta, County of Riverside,
State of California, described on Exhibit 1 attached hereto and made a part hereof (the
"Property"), with all improvements thereon, subject to all matters of record and subject
to the following:
Grantee, on behalf of itself and its successors and assigns to all or any portion of
the Property, covenants and agrees as follows:
1. Nondiscrimination Covenants. That there shall be no discrimination
against or segregation of any person, or group of persons on any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision
(p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any part
thereof, nor shall Grantee, or any person claiming under or through him or her, establish
or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees of the Property, or any part thereof. The foregoing covenants
shall run with the land.
2. Nondiscrimination Clauses in Agreements. Grantee agrees for itself and
any successor in interest that Grantee shall refrain from restricting the rental, sale, or
lease of any portion of the Property, or contracts relating to the Property, on the basis of
882/015610-0040
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74
race, color, creed, religion, sex, marital status, ancestry, or national origin of any
person. All such deeds, leases or contracts shall contain or be subject to substantially
the following nondiscrimination or nonsegregation clauses:
i. In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision
(p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed, nor shall the grantee or any person claiming under or through him or her,
establish or permit any practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing
covenants shall run with the land."
ii. In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through him or her, and this lease is made and accepted upon and
subject to the following conditions: "That there shall be no discrimination against or
segregation of any person or group of persons, on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision
(p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing,
subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein
leased nor shall the lessee himself or herself, or any person claiming under or through
him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy, of
tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased."
iii. In contracts relating to the sale, transfer, or leasing of the land or
any interest therein: "There shall be no discrimination against or segregation of, any
person or group of persons on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises which are the subject of this
agreement, nor shall the grantee or any person claiming under or through him or her,
establish or permit any practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing
covenants shall run with the land."
The foregoing nondiscrimination covenants shall remain in effect in perpetuity.
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[Signatures on next page]
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Date:
ATTEST:
Susan Maysels, City Clerk
APPROVED AS TO FORM:
RUTAN &TUCKER, LLP
William H. Ihrke, City Attorney
Date:
GRANTOR:
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
0
Frank J. Spevacek, Executive Director
GRANTEE:
a California limited partnershp
By:
Its:
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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 , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
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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 , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
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Exhibit 1 to Grant Deed
Legal Description
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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ATTACHMENT NO. 6
FORM OF WARRANTY BILL OF SALE
[See following document]
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WARRANTY BILL OF SALE
For good and valuable consideration, the receipt of which is hereby
acknowledged, LA QUINTA HOUSING AUTHORITY, a public body, corporate and
politic ("Seller"), does hereby sell, transfer and convey to
, a California limited partnership ("Buyer"), all personal
property of Seller described in Schedule No. 2 attached hereto which is located on and
used in the operation, repair and maintenance of the real property described in
Schedule No. 1 attached hereto, which personal property Seller warrants to be free and
clear of all encumbrances.
Seller does hereby covenant with Buyer that Seller is the lawful owner of such
personal property, free and clear of all liens, encumbrances, security agreements and
financing statements, that such personal property is owned and not leased by Seller
and that Seller has good right to sell the same as aforesaid and will warrant and defend
the title thereto unto Buyer, its successors and assigns, against the claims and
demands of all persons.
Dated this day of 120
"SELLER"
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
By:
Frank J. Spevacek, Executive
Director
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SCHEDULE NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS
FOLLOWS:
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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SCHEDULE NO. 2
LIST OF PERSONAL PROPERTY
Individual Apartments (72 Tenants + Manager)
72 - 40 gallon water heaters
1 - 83 gallon water heater
73 Refrigerators
73 air conditioning units
73 gas stoves
1 GE washer (mgr)
1 GE dryer (mgr)
On -Site Office
1 office desk
1 - 4 drawer filing cabinet
1 - 2 drawer filing cabinet
1 Cannon copier
1 HP Laserjet 1200 printer
1 Brother fax machine
1 Dell Computer + monitor/keyboard
2 office guest chairs
1 office chair w/wheels
1 shredder
1 Cannon calculator
1 AT&T answering machine
1 V-tech phone
Miscellaneous office supplies
Common Area/Grounds
2 outdoor benches
3 plastic chairs
4 picnic tables
2 cigarette ash cans
Recreation Room
1 air conditioning unit
1 Refrigerator
4 round tables
16 club chairs
1 computer desk
1 E-machine computer + monitor/keyboard
2 office guest chairs
1 RCA flat screen T.V.
1 large wooden clock
2 easy chairs
2 sofas
1 stereo
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6 conference room chairs
2 coffee tables
1 microwave
1 coffee maker
1 supply cabinet
Workshop/Garage Storage
1 swamp cooler
1 portable swamp cooler
1 portable air conditioning unit
1 Hampton Bay window A/C unit
1 Porter 25 gallon air compressor with hose (135 PSI)
3 Rainbird sprinkler controls
1 Refrigerator (used for parts)
Miscellaneous tools & maintenance inventory
2 air conditioning units in stock for emergency installation use
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ATTACHMENT NO. 7
FORM OF ASSIGNMENT OF LEASES
[See following document]
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ASSIGNMENT OF TENANT LEASES
This ASSIGNMENT OF TENANT LEASES ("Assignment") is made as of
, 20, by and between LA QUINTA HOUSING AUTHORITY, a public
body, corporate and politic ("Assignor"), and a
California limited partner ("Assignee").
RECITALS:
A. Concurrently with the delivery of this Assignment, Assignor has conveyed
to Assignee and Assignee has acquired from Assignor a fee simple estate in and to
certain real property located in the County of Riverside, State of California, more
particularly described in Appendix No. 1 attached hereto (the "Real Property") pursuant
to that certain Affordable Housing and Property Disposition Agreement dated
, 2017 (the "AHPDA").
B. Pursuant to the AHPDA, Assignor is to assign to Assignee and Assignee
is to assume certain rights and obligations under those certain leases affecting the
Property as amended or modified (collectively, the "Tenant Leases"), which Tenant
Leases are more particularly described in Appendix No.2 attached hereto and
incorporated herein by this reference.
NOW, THEREFORE, Assignor and Assignee agree as follows:
FAMEAMMEW
ASSIGNMENT OF TENANT LEASES
1.1 Assignment. Assignor hereby assigns to Assignee all of Assignor's right,
title and interest in and to all Tenant Leases affecting the Property as of the Effective
Date, including, but not limited to, all security and other deposits and prepaid rents paid
thereunder (hereafter defined).
1.2 Assumption. Assignee hereby accepts the foregoing assignment,
assumes the Tenant Leases and agrees to timely keep, perform and discharge all of the
obligations of the lessor under the Tenant Leases that accrue from and after the
Effective Date hereof.
1.3 Indemnification. Assignor shall indemnify, protect, defend and hold
Assignee harmless from all losses, damages, claims, liabilities, demands, costs, offset
rights and expenses, including, without limitation, attorneys' fees arising out of any
failure of Assignor to keep, perform and discharge all of the obligations of landlord
under the Tenant Leases prior to the Effective Date. Assignee shall indemnify, protect,
defend and hold Assignor harmless from all losses, demands, damages, claims,
liabilities, demands, costs, expenses and offset rights, including, without limitation,
attorneys' fees arising out of any failure of Assignee to so keep, perform and discharge
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all of the obligations of the lessor under the Tenant Leases that accrue from and after
the Effective Date.
1.4 Effective Date. The "Effective Date" of this Assignment shall be the date
that Assignee acquires the Real Property.
1.5 Consistency with AHPDA. Nothing in this Assignment shall be construed
to modify or limit any provisions of the AHPDA and in the event of any inconsistency
between this Assignment and the AHPDA, the AHPDA shall control.
ARTH-1 F II
MISCELLANEOUS
2.1 Attorneys' Fees. In the event of any action between Assignor and
Assignee seeking enforcement of any of the terms and conditions to this Assignment,
the prevailing party in such action, whether by fixed judgment or settlement, shall be
entitled to recover, in addition to damages, injunctive or other relief, its actual costs and
expenses, including, but not limited to, actual attorneys' fees, court costs and expert
witness fees. Such costs shall include attorneys' fees, costs and expenses incurred in
(a) post -judgment motions, (b) contempt proceedings, (c) garnishment, levy and debtor
and third -party examination, (d) discovery, and (e) bankruptcy litigation.
2.2 Inurement. This Assignment shall inure to the benefit of Assignor and
Assignee, and their respective heirs, assigns and successors in interest.
2.3 Counterparts. This Assignment may be signed by the parties in different
counterparts and the signature pages combined to create a document binding on all
parties.
2.4 Governing Law. This Assignment shall be governed by and construed in
accordance with the internal laws of the State of California without regard to conflicts of
law.
[end — signatures on next page]
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IN WITNESS WHEREOF, the parties have executed this Assignment as of the
day and year first above written to be effective as of the Effective Date defined in
Paragraph 1.4 hereof.
ATTEST:
Authority Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
IN
Authority Counsel
"ASSIGNOR"
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
By:
Frank J. Spevacek, Executive
Director
"ASSIGNEE"
a California limited partnership
By:
Its:
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APPENDIX NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS
FOLLOWS:
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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APPENDIX NO. 2
SCHEDULE OF TENANT LEASES
Seller shall prepare a list of the Tenant Leases affecting the Real Property
including any amendments or modifications thereto and all security and other deposits
and prepaid rents thereunder. Such list shall be inserted as Appendix No. 2 to the
Assignment prior to its execution.
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ATTACHMENT NO. 8
FORM OF NON -FOREIGN AFFIDAVIT
[See following document]
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92
NON -FOREIGN AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that the transferee of an
interest in real property located in the United States must withhold tax if the transferor is
a foreign person. To inform Buyer, , a California
limited partnership ("Transferee"), that withholding of tax is not required upon the sale
by LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic
("Transferor"), of its fee simple interest in that certain real property sold pursuant to the
Affordable Housing and Property Disposition Agreement dated , 2017,
which real property is described in Attachment No. 1, attached hereto and made a part
hereof, the undersigned hereby certifies the following:
1. The Transferor is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue Code and
the income tax regulations promulgated thereunder);
2. The Transferor's United States Taxpayer Identification Number is
3. The Transferor's office address is 78 -495 Calle Tampico, La Quinta,
California 92253; and
4. The Internal Revenue Service has not issued any notice with respect to
Transferor or listed Transferor as a person whose affidavit may not be relied upon for
purposes of Section 1445 of the Internal Revenue Code.
The Transferor understands that this certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein could be
punished by fine, imprisonment or both.
[continued on next page]
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Under penalty of perjury, I declare that I have examined this certification and to
the best of my knowledge and belief it is true, correct and complete, and I further
declare that I am the Executive Director of the La Quinta Housing Authority and that I
have authority to sign this document on behalf of the Transferor.
Date:
"TRANSFEROR"
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
Frank J. Spevacek, Executive Director
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ATTACHMENT NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS
FOLLOWS:
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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95
ATTACHMENT NO. 9
FORM OF ASSIGNMENT OF CONTRACTS, PERMITS, INTANGIBLE PERSONAL
PROPERTY, WARRANTIES, AND GUARANTIES
[See following document]
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96
ASSIGNMENT OF CONTRACTS, PERMITS, INTANGIBLE
PERSONAL PROPERTY, WARRANTIES AND GUARANTIES
This ASSIGNMENT OF CONTRACTS, PERMITS, INTANGIBLE PERSONAL
PROPERTY, WARRANTIES AND GUARANTIES ("Assignment") is made and entered
into this day of , 20, by and between LA QUINTA HOUSING
AUTHORITY, a public body, corporate and politic ("Assignor"), and
, a California limited partnership ("Assignee").
RECITALS:
This Assignment is made with reference to the following facts and intentions of
the parties:
A. Concurrently with the delivery of this Assignment, Assignor has conveyed
to Assignee and Assignee has acquired from Assignor a fee simple estate in and to
certain real property located in the County of Riverside, State of California, more
particularly described in Schedule No. 1 attached hereto (the "Real Property") pursuant
to that certain Affordable Housing and Property Disposition Agreement dated
,2017 (the "AHPDA").
B. Assignor, in connection with the orderly operation of the Real Property,
has entered into certain labor service, supply maintenance, landscape, property
management, leasing, insurance and other contracts, copies of which have been given
to and approved by Assignee (the Assignor Operating Contracts"). Assignor, in
connection with the preparation of engineering and architectural plans and drawings,
has entered into certain design and engineering contracts, copies of which have been
given to and approved by Assignee (the "Assignor Design and Engineering
Contracts") In accordance with the terms and conditions of the AHPDA, Assignor has
agreed to assign to Assignee and Assignee has agreed to accept the assignment of all
Assignor Design and Engineering Contracts, and all Assignor Operating Contracts
which Assignee elects to assume. A schedule of all such contracts are attached hereto
as Schedule No. 2 (collectively, "Contracts").
C. Assignor is the owner of or holder of certain permits, licenses, plans and
specifications and certificates of occupancy relating to the Real Property (collectively,
"Permits") including but not limited to those permits, licenses, plans and specifications
and certificates of occupancy set forth in the schedule attached hereto as Schedule
No. 3.
D. Assignor is the owner and possessor of certain trade names, logos, signs,
trademarks, styles, telephone listings and numbers, manuals, lists of prospective
tenants, advertising materials, all plans and specifications, specifications relating to the
improvements and fixtures located on the Real Property, including all working drawings
and "as -built" drawings and all reports and studies relating to the Property (as defined in
the AHPDA) and similar items included within, related to or otherwise pertaining to the
Property (collectively, "Intangible Personal Property"), including but not limited to the
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97
Intangible Personal Property set forth in the schedule attached hereto as Schedule
No. 4.
E. Assignor is the owner or holder of certain warranties and guaranties now
in effect with respect to the Property (collectively, "Warranties and Guaranties"),
including, but not limited to, the warranties and guaranties listed in the schedule set
forth in Schedule No. 5 attached hereto.
F. Pursuant to the terms of the APHDA, Assignor has agreed to assign to
Assignee all of its right, title and interest in and to the Contracts, Permits, Intangible
Personal Property and Warranties and Guaranties.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the parties agree as follows:
ARTICLE I
ASSIGNMENT OF CONTRACTS, PERMITS, INTANGIBLE
PERSONAL PROPERTY. WARRANTIES AND GUARANTIES
1.1 Assignment of Contracts. Assignor hereby assigns, transfers and conveys
to Assignee all of Assignor's right, title and interest in and to all of the Contracts set forth
in Schedule No. 2, and Assignee accepts and agrees to assume the obligations of
Assignor under the Contracts occurring after the Effective Date (as hereinafter defined).
1.2 Assignment of Permits, Intangible Personal Property, Warranties and
Guaranties. As of the Effective Date, Assignor hereby assigns to Assignee all of
Assignor's right, title and interest in and to all Permits, Intangible Personal Property and
Warranties and Guaranties relating to the Real Property, including, without limitation,
those Permits, Intangible Personal Property and Warranties and Guaranties described
in Schedule Nos. 3, 4, and 5, respectively. As of the Effective Date, Assignee hereby
accepts the foregoing assignment of any and all Permits, Intangible Personal Property
and Warranties and Guaranties now in effect with respect to the Property.
1.3 No Liability; Indemnification. This Assignment and its acceptance by
Assignee shall not impose any liability on Assignee for any default by Assignor under
the Contracts, Permits, Intangible Personal Property, and Warranties and Guaranties
occurring prior to the Effective Date. Assignor shall indemnify, protect, defend and hold
Assignee harmless from any and all losses, demands, damages, claims, liabilities, costs
and expenses, including, but not limited to, attorneys' fees arising out of or in
connection with any default by Assignor under the Contracts, Permits, Intangible
Personal Property, and Warranties and Guarantees occurring prior to the Effective
Date. Assignee shall indemnify, protect, defend and hold Assignor harmless from any
and all losses, damages, claims, liabilities, costs and expenses including, without
limitation, attorneys' fees, arising out of or in connection with any default by Assignee
under the Contracts, Permits, Intangible Personal Property, and Warranties and
Guarantees that occurs after the Effective Date.
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1.4
that Assigne
e
1.5 Consistency with AHPDA. Nothing in this Assignment shall be construed
to modify or limit any provisions in the AHPDA and in the event of any inconsistency
between this Assignment and the AHPDA, the latter shall govern and control.
ARTICLE II
MISCELLANEOUS
2.1 Attorneys' Fees. In the event of any action between Assignor and
Assignee seeking enforcement of any of the terms and conditions to this Assignment,
the prevailing party in such action, whether by fixed judgment or settlement, shall be
entitled to recover, in addition to damages, injunctive or other relief, its actual costs and
expenses, including, but not limited to, actual attorneys' fees, court costs and expert
witness fees. Such costs shall include attorneys' fees, costs and expenses incurred in
(a) post -judgment motions, (b) contempt proceedings, (c) garnishment, levy and debtor
and third -party examination, (d) discovery, and (e) bankruptcy litigation.
2.2 Inurement. This Assignment shall inure to the benefit of Assignor and
Assignee, and their respective heirs, assigns and successors in interest.
2.3 Counterparts. This Assignment may be signed by the parties in different
counterparts and the signature pages combined to create a document binding on all
parties.
2.4 Governing Law. This Assignment shall be governed by and construed in
accordance with the internal laws of the State of California without regard to conflicts of
law.
[end — signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
of the date first above written to be effective as of the Effective Date.
"ASSIGNOR"
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
By:
Frank J. Spevacek, Executive
Director
"ASSIGNEE"
a California limited partnership
By:
Its:
ATTEST:
Authority Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Authority Counsel
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SCHEDULE NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS
FOLLOWS:
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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101
SCHEDULE NO. 2
SCHEDULE OF CONTRACTS ASSIGNED
Prior to execution of this document, Assignor shall provide a list of all Contracts
and, from that list, Assignee shall prepare and insert a schedule of all of the Contracts it
elects to assume pursuant to this Assignment prior to execution of this Assignment.
1. [PSA with STUDIO E ARCHITECTS]
2. [PSA with ALTUM GROUP, INC.]
3. [PSA with RGA LANDSCAPES ARCHITECTS, INC.]
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SCHEDULE NO. 3
SCHEDULE OF PERMITS, LICENSES AND CERTIFICATES OF OCCUPANCY
A list of any and all permits, licenses and certificates of occupancy in Assignor's
possession issued or obtained for the Property, or any part thereof, shall be prepared by
Assignor and approved by Assignee and inserted herein prior to the execution of this
Assignment.
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SCHEDULE NO. 4
SCHEDULE OF INTANGIBLE PERSONAL PROPERTY
A list of any and all Intangible Personal Property included within the Property
shall be prepared by Assignor and approved by Assignee and inserted herein prior to
execution of this Assignment.
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SCHEDULE NO. 5
SCHEDULE OF WARRANTIES AND GUARANTIES
Prior to execution of the Assignment, Assignor shall prepare a list to be approved
by Assignee of any and all warranties and guaranties then in effect with respect to the
Property conveyed to Assignee.
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105
ATTACHMENT NO. 10
FORM OF ASSIGNMENT OF CONSTRUCTION CONTRACT
[See following document]
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106
ASSIGNMENT OF ARCHITECTURAL AGREEMENTS
AND PLANS AND SPECIFICATIONS
FOR VALUE RECEIVED, the undersigned, PARTNERS,
L.P., a California limited partnership ("Developer"), assigns to LA QUINTA HOUSING
AUTHORITY, a public body, corporate and politic ("Authority"), all of its right, title and
interest in and to:
1. All architectural, design, engineering and development agreements, and
any and all amendments, modifications, supplements, addenda and general conditions
thereto (collectively, "Architectural Agreements"), and
2. All plans and specifications, blueprints, sketches, shop drawings, working
drawings, landscape plans, utilities plans, soils reports, noise studies, environmental
assessment reports, and grading plans, and all amendments, modifications, changes,
supplements, general conditions and addenda thereto (collectively, "Plans and
Specifications"), heretofore or hereafter entered into or prepared by any architect,
engineer or other person or entity (collectively, "Architect"), for or on behalf of
Developer in connection with the Real Property described on Exhibit "A" attached
hereto. The Plans and Specifications, as of the date hereof, are those which Developer
have heretofore, or will hereafter deliver to Authority. The Architectural Agreements
include, but are not limited to, the architectural agreement or contract between
and . dated
This ASSIGNMENT OF ARCHITECTURAL AGREEMENTS AND PLANS AND
SPECIFICATIONS ("Assignment") constitutes a present, absolute and unconditional
assignment to Authority.
Developer acknowledges that by accepting this Assignment, Authority does not
assume any of Developer's obligations under the Architectural Agreements with respect
to the Plans and Specifications.
Developer represents and warrants to Authority that: (a) no default by
Developer, or event which would constitute a default by Developer after notice or the
passage of time, or both, exists with respect to said Architectural Agreements, and (b)
all copies of the Architectural Agreements and Plans and Specifications delivered to
Authority are complete and correct. Developer has not assigned any of its rights under
the Architectural Agreements or with respect to the Plans and Specifications.
Notwithstanding the foregoing, this Assignment shall be subordinated to any
assignment required to be made by Developer to the "Construction Lender" (as that
term is defined in that certain Affordable Housing and Property Disposition Agreement
entered into by and between Authority and Developer on or about , 2017 (the
"AHPDA")) at the close of the "Escrow" (as that term is defined in the AHPDA).
This Assignment shall be governed by the laws of the State of California, except
to the extent that federal laws preempt the laws of the State of California, and
882/015610-0040
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Developer consents to the jurisdiction of any federal or state court within the State of
California having proper venue for the filing and maintenance of any action arising
hereunder and agrees that the prevailing party in any such action shall be entitled, in
addition to any other recovery, to reasonable attorneys' fees and costs.
This Assignment shall be binding upon and inure to the benefit of the heirs, legal
representatives, assigns, and successors -in -interest of Developer and Authority.
The attached Architect's/Engineer's Consent and Exhibit "A" are incorporated by
reference.
Executed by on , 2017.
"Developer"
Date: , 2017 PARTNERS,
L.P., a California limited partnership
a
Its: General Partner
"Authority"
LA QUINTA HOUSING AUTHORITY, a
public body, corporate and politic
Date: 12017 By:
Executive Director
ATTEST:
Authority Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Authority Counsel
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ARCHITECT'S/ENGINEER'S CONSENT
The undersigned architect and/or engineer (collectively referred to as "Architect")
hereby consents to the foregoing Assignment to which this Architect's/Engineer's
Consent ("Consent") is a part, and acknowledges that there presently exists no unpaid
claims due to the Architect/Engineer arising out of the preparation and delivery of the
Plans and Specifications to and/or the performance of the Architect's
obligations under the Architectural Agreements described in the Assignment.
Architect agrees that, by virtue of the foregoing Assignment, Authority has
succeeded to all of I right, title and interest in, to and under the
Architectural Agreements and the Plans and Specifications and, therefore, so long as
the Architect continues to receive the compensation called for under the Architectural
Agreements, Authority and its successors and assigns may, at their option, use and rely
on the Plans and Specifications for the purposes for which they were prepared, and
Architect will continue to perform its obligations under the Architectural Agreements for
the benefit and account of Authority and its successors and assigns in the same manner
as if performed for the benefit or account of in the absence of the
Assignment.
Architect warrants and presents that it/he has no knowledge of any prior
assignment(s) of any interest in either the Plans and Specifications and/or the
Architectural Agreements. Except as otherwise defined herein, the terms used herein
shall have the meanings given them in the Assignment.
Executed on 2017.
"Architect"
a
By:
Name:
Its:
Architect's Address:
Phone No.: ( )
Fax No.: ( )
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EXHIBIT "A"
PROPERTY DESCRIPTION
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ATTACHMENT NO. 11
FORM OF NOTICE TO TENANTS
[See following document]
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111
NOTICE TO TENANTS
TO: All Tenants of WASHINGTON STREET APARTMENTS ("Apartments")
Please be advised that the Apartments has, on the date hereof, been sold by the
undersigned Seller to
All rent payments will continue to be made to the on -site manager, and will
continue to be made payable to "Washington Street Apartments."
Your security deposit in the amount of $ has been assigned to the
new owner who will be responsible for complying with the provisions of the California
Civil Code with respect to return of the deposit.
If you have any questions, notify:
Dated: , 20
Date:
"SELLER"
LA QUINTA HOUSING AUTHORITY, a
public body, corporate and politic
Frank J. Spevacek, Executive Director
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ATTACHMENT NO. 12
FORM OF LEAD -BASED PAINT DISCLOSURE AND ACKNOWLEDGEMENT
[See following document]
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113
LEAD -BASED PAINT DISCLOSURE AND ACKNOWLEDGMENT
LEAD WARNING STATEMENT:
Every purchaser of any interest in residential real property on which a residential
dwelling was built prior to 1978 is notified that such property may present exposure to
lead from lead -based paint, paint chips and dust that may place young children at risk of
developing lead poisoning. Lead can pose health hazards if not taken care of properly.
Lead poisoning in young children may produce permanent neurological damage,
including learning disabilities, reduced intelligence quotient, behavioral problems, and
impaired memory. Lead poisoning also poses a particular risk to pregnant women. The
seller of any interest in pre-1978 residential real property, prior to the sale, is required
to: (a) provide the buyer with any information on lead -based paint hazards from risk
assessments or inspections in the seller's possession; (b) notify the buyer of any known
lead -based paint hazards; and (c) give the buyer a Federally approved pamphlet on
lead poisoning prevention. A risk assessment or inspection for possible lead -based
paint hazards is recommended prior to purchase.
SELLER'S DISCLOSURE
(A) Presence of lead -based paint and lead -based paint hazards (check one
below):
o Known lead -based paint and/or lead -based paint hazards are present in
the housing. (Explanation:
o Seller has no knowledge of lead -based paint and/or lead -based paint
hazards in the housing.
(B) Records and reports available to the seller (check one below):
o Seller has provided the purchaser with all available records and reports
pertaining to lead -based paint and/or lead -based paint hazardous in the
housing. (List documents:)
o Seller has no reports or records pertaining to lead -based paint and/or
lead -based paint hazards in the housing.
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CERTIFICATION OF ACCURACY
The undersigned has reviewed the information above and certifies, to the best of its
knowledge, that the information provided by the signatory is true and accurate.
Date:
"SELLER"
LA QUINTA HOUSING AUTHORITY, a
public body, corporate and politic
M
Frank J. Spevacek, Executive Director
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-2-
115
ATTACHMENT NO. 13
FORM OF DISBURSEMENT REQUEST FORM
[See following document]
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116
Property Address:
Disbursement No.
DISBURSEMENT REQUEST FORM
, La Quinta, California
The undersigned, on behalf of , L.P., a
California limited partnership ("Developer"), hereby requests a disbursement in the
amount, and on the date, set forth below, pursuant to that certain Affordable Housing
and Property Disposition Agreement (the "Agreement") dated as of
201, between LA QUINTA HOUSING AUTHORITY, a public body, corporate and
politic ("Authority"), and COACHELLA VALLEY HOUSING COALITION, a California
nonprofit public benefit corporation ("CVHC"), and assigned by CVHC to Developer.
Capitalized terms used and not otherwise defined herein shall have the meanings set
forth for them in the Agreement.
REQUEST AMOUNT:
REQUEST DATE:
Developer hereby represents and warrants to Authority that:
1. The requested disbursement shall be applied to pay costs in accordance
with the itemized Payment Request attached hereto.
2. All costs shown in all prior Disbursement Requests (and Payment
Requests) have been paid in full, Developer has received valid lien releases or waivers
from all contractors, subcontractors and materialmen with respect to all payments made
for work and materials if the work or materials could give rise to a mechanic's or a
materialmen's lien against the Property, and Developer has no knowledge of any
mechanic's lien claims against the Property.
3. The work is being performed in substantial conformance with the Scope of
Development, and all applicable governmental requirements, and the work has
progressed to the point indicated on the attached Payment Request.
4. The attached Payment Request is an accurate and complete statement of
all amounts previously paid or now due and all amounts expected to be incurred in
connection with the completion of the work.
5. All representations and warranties in the Agreement and the other Project
Documents are true and correct in all material respects as of the date of this request as
if made on and as of the date of this request. No Event of Default by Developer
remains uncured, and no event has occurred which, with the giving of notice or the
passage of time or both, would constitute an Event of Default by Developer.
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117
DATE:
Designated Representative
Contractor hereby certifies that Paragraphs 2 (with respect to costs covered by
Contractor's Contract), 3 (with respect to work covered by Contractor's Contract), 4
(with respect to costs and work covered by Contractor's Contract) and 5, above, are
true to the best of Contractor's knowledge.
Contractor
i9e�-d•r:4,1re3»0•0511:11•1
Authority Inspector Authority Officer
APPROVED CHANGE ORDERS:
(briar NJ \A/nrk Itam Amni int
Approved Date
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ATTACHMENT NO. 14A
FORM OF AUTHORITY NOTE (PLANS
[See following document]
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119
AUTHORITY PROMISSORY NOTE
(PLANS)
$2,366,722
, 20
La Quinta, California
FOR VALUE RECEIVED, , L.P., a California limited
partnership ("Borrower"), as maker and obligor, promises to pay to the LA QUINTA
HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), as holder
and beneficiary, or order, at Authority's office 78-495 Calle Tampico, La Quinta,
California 92253, or such other place as Authority may designate in writing, the sum of
(a) Two Million Three Hundred Sixty -Six Thousand Seven Hundred Twenty -Two Dollars
($2,366,722), or so much thereof as may be disbursed hereunder ("Note Amount"),
and (b) all costs and expenses payable hereunder, in currency of the United States of
America, which at the time of payment is lawful for the payment of public and private
debts.
1. Agreement. This Authority Promissory Note ("Note") is given in
accordance with that certain Affordable Housing and Property Disposition Agreement
executed by Authority and Coachella Valley Housing Coalition, a California nonprofit
public benefit corporation ("CVHC"), as "Developer", and thereafter assigned by CVHC
to Borrower, dated as of , 2017 ("Agreement"). The rights
and obligations of Borrower and Authority under this Note shall be governed by the
Agreement and by the additional terms set forth in this Note. In the event of any
inconsistencies between the terms of this Note and the terms of the Agreement or any
other document related to the Note Amount, the terms of this Note shall prevail. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Agreement. An Event of Default by Developer under any of the
provisions of the Agreement, and/or a default under any and all attachments and all
breakout documents executed, attested and/or recorded in implementation of the
Agreement, including, without limitation, the Authority Deed of Trust or Authority
Regulatory Agreement, or the income and/or rent restrictions as set forth in the Tax
Credit Regulatory Agreement (collectively, the "Transaction Documents") shall, after
the expiration of any cure period under the respective agreement or document, be a
default under this Note (a "Default"), and a default under this Note, after notice and
expiration of a ten (10) day cure period, shall be an Event of Default under the
Agreement and a default under the Transaction Documents.
2. Interest. The Note Amount shall bear simple interest at three percent
(3%) per annum.
3. Repayment of Note Amount. The Note Amount shall be paid by the
Borrower's annual payment to Authority of an amount equal to fifty percent (50%) of the
Residual Receipts from operation of the Project, as determined by a Residual Receipts
calculation from the operation of the Project the preceding calendar year; provided,
however, that if there are other "soft" loans to the Project that require repayment out of
882/015610-0040
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120
the Residual Receipts from the operation of the Project (any such loans, a "Soft Loan"),
then the amount payable to Authority shall be a proportional amount of fifty percent
(50%) of said Residual Receipts, which proportional amount shall be equal to the
percentage the principal amount of the Note Amount bears to the total collective
principal amount of the Note Amount and the principal amount of all other Soft Loans.
Annual Residual Receipts payments shall be made by the Borrower by cashier's
check and shall be delivered on or before May 1 for each year during the term of this
Note commencing in the first fiscal year following the Conversion Date until the Note
Amount and all unpaid interest thereon has been repaid in full. Additionally, the Note
Amount shall be paid by any or all of the following: (i) one hundred percent (100%) of
the Refinancing Net Proceeds immediately upon any refinancing of the loans secured
by the Property (or any part thereof), (ii) one hundred percent (100%) of the Transfer
Net Proceeds immediately upon any transfer in whole or in part of the Project, and
(iii) any Cost Savings, pursuant to Section 6.9 of the Agreement.
Notwithstanding anything in this Note to the contrary, repayment of this Note
shall not commence until such time as the outstanding balance owed on that certain
Authority Promissory Note in the amount of Fifteen Million Fifty -Eight Thousand Two
Hundred Eighty -Eight Dollars ($15,058,288), executed by Borrower concurrently
herewith, has been fully repaid according to its terms.
As used herein, "Affiliate" means any person or entity directly or indirectly,
through one or more intermediaries, controlling, controlled by or under common control
with Borrower which, if Borrower is a partnership or limited liability company, shall
include each of the constituent members or partners, respectively thereof. The term
"control" as used in the immediately preceding sentence, means, with respect to a
person that is a corporation, the right to the exercise, directly or indirectly, of more than
fifty percent (50%) of the voting rights attributable to the shares of the controlled
corporation, and, with respect to a person that is not a corporation, the possession,
directly or indirectly, of the power to direct or cause the direction of the management or
policies of the controlled person.
As used herein, "Annual Financial Statement" shall mean each certified
financial statement of Borrower for the Project using generally accepted accounting
principles ("GAAP"), as separately accounted for this Project, including Operating
Expenses and Annual Project Revenue, prepared annually at Borrower's expense, by
an independent certified public accountant reasonably acceptable to Authority.
As used herein, "Annual Project Revenue" means all gross income and all
revenues of any kind from the Project in a calendar year, of whatever form or nature,
whether direct or indirect, with the exception of the items excluded below, actually
received by or paid to or for the account or benefit of Borrower or any Affiliate of
Borrower or any of their agents or employees, from any and all sources, resulting from
or attributable to the ownership, operation, leasing and occupancy of the Project,
determined on the basis of generally accepted accounting principles applied on a
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consistent basis, and shall include, but not be limited to: (i) gross rentals paid by tenants
of the Project under leases, and payments and subsidies of whatever nature, including
without limitation any payments, vouchers or subsidies from the U.S. Department of
Housing and Urban Development or any other person or organization, received on
behalf of tenants under their leases, (ii) amounts paid by residents of the Project to
Borrower or any Affiliate of Borrower on account of Operating Expenses for further
disbursement by Borrower or such Affiliate to a third party or parties, (iii) late charges
and interest paid on rentals, (iv) rents and receipts from licenses, concessions, vending
machines, coin laundry and similar sources, (v) other fees, charges or payments not
denominated as rental but payable to Borrower in connection with the rental of office,
retail, storage, or other space in the Project, (vi) consideration received in whole or in
part for the cancellation, modification, extension or renewal of leases, and (vii) interest
and other investment earnings on security deposits, reserve accounts and other Project
accounts to the extent disbursed for other than the purpose of the reserve.
Notwithstanding the foregoing, gross income shall not include the following items:
(a) security deposits from tenants (except when applied by Borrower to rent or other
amounts owing by tenants); (b) capital contributions to Borrower by its members,
partners or shareholders (including capital contributions required to pay any Deferred
Developer Fee); (c) condemnation or insurance proceeds; (d) funds received from any
source actually and directly used for initial development of the Project; (e) receipt by an
Affiliate of management fees or other bona fide arms -length payments for reasonable
and necessary Operating Expenses associated with the Project; (f) Transfer Net
Proceeds; or (g) Refinancing Net Proceeds.
As used herein "Capital Replacement Reserve" shall have the meaning
ascribed thereto in the Authority Regulatory Agreement.
As used herein, "CPI Adjustment" means the increase in the cost of living index,
as measured by the Consumer Price Index for all urban consumers, Los Angeles -
Riverside -Orange statistical area, all items (1982-84 = 100) published by the United
States Department of Labor, Bureau of Labor Statistics ("CPI") in effect as of the date
on which the Certificate of Occupancy is issued for the Project to the CPI in effect as of
the date on which an adjustment is made. If such index is discontinued or revised, such
other index with which such index is replaced (or if not replaced, another index which
reasonably reflects and monitors consumer prices) shall be used in order to obtain
substantially the same results as would have been obtained if the discontinued index
had not been discontinued or revised. If the CPI is changed so that the base year is
other than 1982-84, the CPI shall be converted in accordance with the conversion factor
published by the United States Department of Labor, Bureau of Labor Statistics.
As used herein, "Debt Service" shall mean payments made in a calendar year
pursuant to the approved Construction Loan or the Take -Out Loan, as applicable,
obtained for the construction/development, and ownership of the Project, as set forth in
the Project Budget, or any permitted refinancing or modification thereof, but excluding
payments made pursuant to this Note.
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As used herein, "Deferred Developer Fee" shall mean the portion of the
Borrower's development fee, if any, that is payable out of the Annual Project Revenue
and not from capital sources, as set forth in the Project Budget. Disbursement of the
Deferred Developer Fee (all or any part thereof) shall be subject to the provisions of the
next paragraph.
In connection with Borrower's eligibility to disburse all or any part of the Deferred
Developer Fee, in the event the cost of completing the Project exceeds the amount set
forth in the final Budget; then, to the extent necessary, the funds otherwise available to
pay the developer fee from capital sources shall be expended and used to pay the
remaining costs of completing the Project to the extent necessary to ensure the
completion of the Project and the balance of the developer fee shall be paid as Deferred
Developer Fee in accordance with the priority set forth in the Partnership Agreement,
and/or payable from the proceeds of any approved refinancing or transfer of the
Property and/or the Project. In no event shall Borrower be eligible for disbursement of
the Deferred Developer Fee or any part thereof prior to completion of the Project, as
approved by the Executive Director as evidenced by the issuance by Authority of the
Release of Construction Covenants.
As used herein, "Operating Expenses" shall mean actual, reasonable and
customary (for comparable high quality rental Projects in Riverside County) costs, fees
and expenses directly incurred, paid, and attributable to the operation, maintenance and
management of the Project in a calendar year, which are in accordance with the annual
Operating Budget approved by Authority pursuant to Section 9 of Authority Regulatory
Agreement, including, without limitation, painting, cleaning, repairs, alterations,
landscaping, utilities, refuse removal, certificates, permits and licenses, sewer charges,
real and personal property taxes, assessments, insurance, security, advertising and
promotion, janitorial services, cleaning and building supplies, purchase, repair, servicing
and installation of appliances, equipment, fixtures and furnishings, fees and expenses of
property management, fees and expenses of accountants, attorneys and other
professionals, asset management fees paid to the Investor in the amount of
Dollars ($ ), which shall be increased annually by
percent ( %) per year, partnership management fees paid to the
general partner of Borrower in the amount of Dollars ($ ),
which shall be increased annually by percent ( %) per year, and
other actual, reasonable and customary operating costs which are directly incurred and
paid by Borrower, but which are not paid from or eligible to be paid from the Operating
Reserve or any other reserve accounts. In addition, Operating Expenses shall include a
social services fee in the amount of Dollars ($ ) for calendar
year 20_, which shall be increased annually by percent ( %) per
year, provided Borrower provides the social services described in (a) the Tenant
Services Agreement that was included in Borrower's tax credit application, and (b) the
Scope of Development. Operating Expenses shall not include any of the following:
(i) salaries of employees of Borrower or Borrower's general overhead expenses, or
expenses, costs and fees paid to an Affiliate of Borrower, to the extent any of the
foregoing exceed the expenses, costs or fees that would be payable in a bona fide
arms' length transaction between unrelated parties in the Riverside County area for the
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same work or services; (ii) any amounts paid directly by a tenant of the Project to a third
party in connection with expenses which, if incurred by Borrower, would be Operating
Expenses; (iii) optional or elective payments with respect to the Construction Loan;
(iv) any payments with respect to any Project -related loan or financing that has not been
approved by Authority; (v) expenses, expenditures, and charges of any nature
whatsoever arising or incurred by Borrower prior to completion of the Project with
respect to the development of the Project, or any portion thereof, including, without
limitation, all predevelopment and preconstruction activities conducted by Borrower in
connection with the Project, including without limitation, the preparation of all plans and
the performance of any tests, studies, investigations or other work, and the construction
of the Project and any on site or off site work in connection therewith; or
(vi) depreciation, amortization, and accrued principal and interest expense on deferred
payment debt.
As used herein, "Operating Reserve" shall have the meaning ascribed thereto in
the Authority Regulatory Agreement.
As used herein, "Partnership Agreement" means the agreement which sets
forth the terms of the Borrower's limited partnership, as such agreement may be
amended from time to time.
As used herein, "Refinancing Net Proceeds" means the proceeds of any
approved refinancing of the Construction Loan or other approved financing secured by
the Property, net of the following actual costs and fees incurred: (i) the amount of the
financing which is satisfied out of such proceeds, (ii) reasonable and customary costs
and expenses incurred in connection with the refinancing, (iii) the balance, if any, of the
Deferred Developer Fee, (iv) the balance, if any, of authorized loans to the Project
made by the limited partners of Borrower, including interest at the rate set forth in the
Partnership Agreement for such loans, (v) the balance, if any, of authorized operating
loans or development loans made by the general partners of a limited partnership that
succeeds to Borrower's interest in the Agreement and the Project, including interest at
the rate set forth in the Partnership Agreement for such loans, (vi) the return of capital
contributions, if any, to the Project made by the general partners of a limited partnership
that succeeds to Borrower's interest in the Agreement and the Project that were used to
pay the Deferred Developer Fee, and (vii) the amount of proceeds required to be
reserved for the repair, rehabilitation, reconstruction or refurbishment of the Project.
As used herein, "Reserve Deposits" shall mean any payments to the Capital
Replacement Reserve account and payments to the Operating Reserve account
pursuant to Sections 10 and 11, respectively, of Authority Regulatory Agreement or
such higher amounts as may be otherwise required by (i) any lender of a Project -related
loan that has been approved by Authority, or (ii) the Investor, pursuant to the terms of
the Partnership Agreement.
As used herein, "Residual Receipts" shall mean Annual Project Revenue less
the sum of:
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(i) Operating Expenses;
(ii) Debt Service;
(iii) Reserve Deposits to the Capital Replacement Reserve;
(iv) Reserve Deposits to the Operating Reserve;
(v) Deferred Developer Fees;
(vi) Unpaid Tax Credit adjustment amounts, if any, pursuant to the Partnership
Agreement;
(viii) Repayment of loans to the Project, if any, made by the limited partner(s) of
Borrower pursuant to the Partnership Agreement, including interest at the rate set forth
in the Partnership Agreement, for eligible development and/or operating expense
deficits or other eligible loans (provided that if made during the compliance period
Borrower shall provide to Executive Director documentation showing the propriety of
such loan(s) and if made subsequent to the expiration of the compliance period each
such loan must be reasonably approved by the Executive Director before being
provided to the Project after review of documentation provided by Borrower showing
propriety of such loans);
(ix) Repayment to the administrative and/or managing general partners of
Borrower for loans to the Project for development advance(s) pursuant to the
Partnership Agreement, operating deficit advance(s) pursuant to the Partnership
Agreement), credit adjuster payment(s) pursuant to the Partnership Agreement), and/or
development fee advance(s) pursuant to the Partnership Agreement, and with all such
loans to be repaid without interest (provided that if made during the compliance period
Borrower shall provide to Executive Director documentation showing the propriety of
such loan(s) and if made subsequent to the expiration of the compliance period each
such loan must be reasonably approved by the Executive Director before being
provided to the Project after review of documentation provided by Borrower showing
propriety of such loans);
(x) Repayment to the administrative and/or managing general partners of
Borrower of certain loans made to the Project after the expiration or earlier termination
of the Partnership Agreement to cover shortfalls in funding for Operating Expenses in
excess of the Operating Expenses included in the approved annual Operating Budget
for the year in which such loan is made (if at all), all such loans to be repaid without
interest (provided that if made during the compliance period Borrower shall provide to
Executive Director documentation showing the propriety of such loan(s) and if made
subsequent to the expiration of the compliance period each such loan must be
reasonably approved by the Executive Director before being provided to the Project
after review of documentation provided by Borrower showing propriety of such loans);
and
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(xi) Capital contributions to the Project, if any, made by the general partners of
Borrower that were used to pay developer fee.
In the event any calculation of Annual Project Revenue less subsections
(i) through (xi) inclusive above results in a negative number, then Residual Receipts
shall be zero ($0) for that year and shall not carry over to the next or any other
subsequent year.
In addition, none of the fees, costs, expenses, or items described above in
calculation of Residual Receipts shall include any duplicate entry/item, or double
accounting for a cost item. The calculation of Residual Receipts shall be conducted at
Borrower's sole cost and expense, by a third party auditor and submitted to Borrower
annually, along with Borrower's payment of Residual Receipts.
As used herein, "Transfer Net Proceeds" shall mean the proceeds of any sale
or other transfer, in whole or part, of the Property or Borrower's interests therein, net
only of (i) the reasonable and customary costs and expenses incurred in connection
with such transfer; (ii) the amount of the financing which is satisfied out of such
proceeds, (iii) the balance, if any, of the Deferred Developer Fee, (iv) the balance, if
any, of loans to the Project made by the limited partners of Borrower, including interest
thereon as provided in the Partnership Agreement, (v) the balance, if any, of operating
loans or development loans made by the general partners of Borrower, including
interest thereon as provided in the Partnership Agreement, and (vi) the return of capital
contributions, if any, to the Project made by the general partners of Borrower that were
used to pay the Deferred Developer Fee.
4. Security. Borrower's obligations under this Note and the Agreement
shall, at all times during which any amount remains outstanding hereunder, be secured
by the Authority Deed of Trust, which Authority Deed of Trust shall only be subordinated
to the approved deed(s) of trust for the Construction Loan and such encumbrances
approved by Authority in writing, pursuant to a written subordination agreement in a
form approved by Authority counsel. Upon execution of the same, the terms of the
Authority Deed of Trust are incorporated herein and made a part hereof to the same
extent and with the same force and effect as if fully set forth herein.
5. Maturity. This Note shall be due and payable on the fifty-seventh (57th)
anniversary of the date of execution hereof by Borrower.
6. Application of Payments. All payments shall be applied (i) first, to costs
and fees owing under this Note, (ii) second, to the payment of unpaid accrued interest
owing under this Note for each calendar year in which no payment was made by
Borrower pursuant to Section 3 above, (iii) third, to the payment of accrued interest for
the preceding calendar year, and (iv) fourth, to payment of principal.
7. Waivers.
(a) Borrower expressly agrees that this Note or any payment
hereunder may be extended from time to time at Authority's sole discretion and that
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Authority may accept security in consideration for any such extension or release any
security for this Note at its sole discretion all without in any way affecting the liability of
Borrower.
(b) No extension of time for payment of this Note made by agreement
by Authority with any person now or hereafter liable for the payment of this Note shall
operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
(c) The obligations of Borrower under this Note shall be absolute and
Borrower waives any and all rights to offset, deduct or withhold any payments or
charges due under this Note for any reasons whatsoever.
(d) Borrower waives presentment, demand, notice of protest and
nonpayment, notice of default or delinquency, notice of acceleration, notice of costs,
expenses or leases or interest thereon, notice of dishonor, diligence in collection or in
proceeding against any of the rights or interests in or to properties securing this Note,
and the benefit of any exemption under any homestead exemption laws, if applicable.
(e) No previous waiver and no failure or delay by Authority in acting
with respect to the terms of this Note or the Authority Deed of Trust shall constitute a
waiver of any breach, default, or failure or condition under this Note, the Authority Deed
of Trust or the obligations secured thereby. A waiver of any term of this Note, the
Authority Deed of Trust or of any of the obligations secured thereby must be made in
writing and shall be limited to the express written terms of such waiver.
8. Attorneys' Fees and Costs. Borrower agrees that if any amounts due
under this Note are not paid when due, Borrower will pay all costs and expenses of
collection and reasonable attorneys' fees paid or incurred in connection with the
collection or enforcement of this Note, whether or not suit is filed.
9. Joint and Several Obligation. This Note is the joint and several
obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon
them and their heirs, successors and assigns.
10. Amendments and Modifications. This Note may not be changed orally,
but only by an amendment approved by Authority and evidenced in a writing signed by
Borrower and by Authority.
11. Authority May Assign. Authority may, at its option, assign its right to
receive payment under this Note without necessity of obtaining the consent of the
Borrower.
12. Borrower Assignment Prohibited. In no event shall Borrower assign or
transfer any portion of this Note without the prior express written consent of Authority,
which consent shall not unreasonably be withheld, except pursuant to a transfer that is
authorized under Section 15 of the Agreement.
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13. Acceleration and Other Remedies. Upon the occurrence of a Default,
Authority may, at Authority's option, declare the outstanding principal amount of this
Note, together with the then accrued and unpaid interest thereon and other charges
hereunder, and all other sums secured by the Authority Deed of Trust, to be due and
payable immediately, and upon such declaration, such principal and interest and other
sums shall immediately become and be due and payable without demand or notice, all
as further set forth in the Authority Deed of Trust. All costs of collection, including, but
not limited to, reasonable attorneys' fees and all expenses incurred in connection with
protection of, or realization on, the security for this Note, may be added to the principal
hereunder, and shall accrue interest as provided herein. Authority shall at all times
have the right to proceed against any portion of the security for this Note in such order
and in such manner as Authority may consider appropriate, without waiving any rights
with respect to any of the security. Any delay or omission on the part of Authority in
exercising any right hereunder, under the Agreement or under the Authority Deed of
Trust shall not operate as a waiver of such right, or of any other right. No single or
partial exercise of any right or remedy hereunder or under the Agreement or any other
document or agreement shall preclude other or further exercises thereof, or the exercise
of any other right or remedy. The acceptance of payment of any sum payable
hereunder, or part thereof, after the due date of such payment shall not be a waiver of
Authority's right to either require prompt payment when due of all other sums payable
hereunder or to declare a Default for failure to make prompt or complete payment.
14. Alternate Rate. Upon the occurrence of any Default, or upon the maturity
hereof (by acceleration or otherwise), the entire unpaid principal sum, at the option of
Authority, shall bear interest, from the date of occurrence of such Default or maturity
and after judgment and until collection, at the "Alternate Rate", such rate being the
highest interest rate then permitted by law. Interest calculated at the Alternate Rate,
when and if applicable, shall be due and payable immediately without notice or demand.
Borrower agrees that in the event of any Default, Authority will incur additional expense
in servicing the loan evidenced by this Note and will suffer damage and loss resulting
from such Default. Borrower agrees that in such event Authority shall be entitled to
damages for the detriment caused thereby, which damages are extremely difficult and
impractical to ascertain. Therefore, Borrower agrees that the Alternate Rate (as applied
to the unpaid principal balance, accrued interest, fees, costs and expenses incurred) is
a reasonable estimate of such damages to Authority, and Borrower agrees to pay such
sum on demand.
15. Consents. Borrower hereby consents to: (a) any extension (whether one
or more) of the time of payment under this Note, (b) the release or surrender or
exchange or substitution of all or any part of the security, whether real or personal, or
direct or indirect, for the payment hereof, (c) the granting of any other indulgences to
Borrower, and (d) the taking or releasing of other or additional parties primarily or
contingently liable hereunder. Any such extension, release, surrender, exchange or
substitution may be made without notice to Borrower or to any endorser, guarantor or
surety hereof, and without affecting the liability of said parties hereunder.
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16. Interest Rate Limitation. Authority and Borrower stipulate and agree that
none of the terms and provisions contained herein or in any of the loan instruments
shall ever be construed to create a contract for the use, forbearance or detention of
money requiring payment of interest at a rate in excess of the maximum interest rate
permitted to be charged by the laws of the State of California. In such event, if any
holder of this Note shall collect monies which are deemed to constitute interest which
would otherwise increase the effective interest rate on this Note to a rate in excess of
the maximum rate permitted to be charged by the laws of the State of California, all
such sums deemed to constitute interest in excess of such maximum rate shall, at the
option of such holder, be credited to the payment of the sums due hereunder or
returned to Borrower.
17. Successors and Assigns. Whenever "Authority" is referred to in this
Note, such reference shall be deemed to include the La Quinta Housing Authority and
its successors and assigns, including, without limitation, any successor to its rights,
powers, and responsibilities, and any subsequent assignee or holder of this Note. All
covenants, provisions and agreements by or on behalf of Borrower, and on behalf of
any makers, endorsers, guarantors and sureties hereof which are contained herein shall
inure to the benefit of Authority and Authority's successors and assigns.
18. Miscellaneous. Time is of the essence hereof. This Note shall be
governed by and construed under the laws of the State of California except to the extent
Federal laws preempt the laws of the State of California. Borrower irrevocably and
unconditionally submits to the jurisdiction of the Superior Court of the State of California
for the County of Riverside or the United States District Court of the Central District of
California, as Authority may deem appropriate, in connection with any legal action or
proceeding arising out of or relating to this Note. Borrower also waives any objection
regarding personal or in rem jurisdiction or venue.
19. Non -Recourse Obligation. Borrower and its partners shall not be
personally liable for the payment of this Note or for the payment of any deficiency
established after judicial foreclosure or trustee's sale; provided, however, that the
foregoing shall not in any way affect any rights Authority may have (as a secured party
or otherwise) hereunder or under the Agreement or the Authority Deed of Trust to
recover directly from Borrower any amounts, or any funds, damages or costs (including
without limitation reasonable attorneys' fees and costs) incurred by Authority as a result
of fraud, intentional misrepresentation or bad faith, waste, and any costs and expenses
incurred by Authority in connection therewith (including without limitation reasonable
attorneys' fees and costs).
20. Accounting.
(a) Accounting Terms and Determinations. Unless otherwise
specified herein, (i) all accounting terms used herein shall be interpreted, (ii) all
accounting determinations hereunder shall be made, and (c) all books, records and
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, consistently applied, except for changes approved by Authority.
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(b) Financial Reporting and Accounting Covenants. Borrower shall
permit the representatives of Authority at any time or from time to time, upon three (3)
business days' notice and during normal business hours, to inspect, audit, and copy all
of Borrower's books, records, and accounts relating to the Property. Borrower shall
furnish or cause to be furnished to Authority the following:
(i) Annual Financial Statement. Borrower shall submit to
Authority, on or before May 1 of each year commencing in the first year after the
issuance of the first certificate of occupancy for the Project, an Annual Financial
Statement, with respect to the Project that has been reviewed by an independent
certified public accountant, together with an expressed written opinion of the certified
public accountant that such Annual Financial Statement presents the financial position,
results of operations, and cash flows of the Project fairly and in accordance with GAAP.
(ii) Tax Returns. As soon as available, but in no event later
than thirty (30) days after the time of filing with the Internal Revenue Service, the federal
tax returns (and supporting schedules, if any) of Borrower.
(iii) Audit Reports. Not later than ten (10) days after receipt
thereof by Borrower, copies of all reports submitted to Borrower by independent public
accountants in connection with each annual, interim or special audit of the financial
statements of Borrower, made by such accountants, including the comment letter
submitted by such accountants to management in connection with their annual audit. If
any such audit report results in Borrower restating Residual Receipts upward for any
fiscal year, then Borrower shall accompany delivery of such audit report to Authority
with the additional payment to Authority resulting from said restatement pursuant to
Section 3 of this Note. If any such audit report results in Borrower restating Residual
Receipts downward for any fiscal year, Borrower may carry forward the overpayment
made to Authority pursuant to such Section 3 as a credit against payments thereunder
in subsequent fiscal years.
(c) Late Payment. If any annual payment required pursuant to
Section 3 above is not received by Authority within ten (10) calendar days after payment
is due, Borrower shall pay to Authority a late charge of five percent (5%) of such
payment, such late charge to be immediately due and payable without demand by
Authority.
(d) Dispute Regarding Annual Financial Statement. If Authority
disputes any Annual Financial Statement, Authority shall notify Borrower of such dispute
within sixty (60) days after receipt of an Annual Financial Statement and the parties
shall cause their representatives to meet and confer concerning the dispute and to use
all reasonable efforts to reach a mutually acceptable resolution of the matter in question
within thirty (30) days after Authority's notice of such dispute. If the parties are unable
to reach a mutually acceptable resolution within such thirty (30) day period, then, within
twenty (20) days after the expiration of such period, Borrower and Authority shall
appoint a national firm of certified public accountants to review the dispute and to make
a determination as to the matter in question within thirty (30) days after such
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appointment. If the parties cannot, within ten (10) days, agree upon the firm to be
appointed, then, upon the application of either party, such firm shall be appointed by the
Presiding Judge of the Superior Court for the County of Riverside, California. Such
firm's determination shall be final and binding upon the parties. Such firm shall have full
access to the books, records and accounts of Borrower and the Property.
(e) Underpayment. If any audit by Authority reports an underpayment
by Borrower on this Note, Borrower shall pay the amount of such underpayment,
together with the late charge set forth in Section 20(c) of this Note, to Authority within
ten (10) days after written notice thereof to Borrower or, in the event of a dispute, after
timely notice to Borrower of the resolution of such dispute by the independent firm of
certified public accountants, as the case may be, and if such underpayment amounts to
more than five percent (5%) of the disputed payment for the period audited, then,
notwithstanding anything to the contrary in this section, Borrower shall pay to Authority,
within ten (10) days after written demand, Authority's reasonable costs and expenses in
conducting such audit and exercising its rights under this Section 20 of this Note.
BORROWER:
L.P.,
a California limited partnership
Date: , 20 By:
Its:
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ATTACHMENT NO. 14B
FORM OF AUTHORITY NOTE (PROPERTY AND CONSTRUCTION
[See following document]
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132
AUTHORITY PROMISSORY NOTE
(PROPERTY AND CONSTRUCTION)
$15,058,288
, 20
La Quinta, California
FOR VALUE RECEIVED, , L.P., a California limited
partnership ("Borrower"), as maker and obligor, promises to pay to the LA QUINTA
HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), as holder
and beneficiary, or order, at Authority's office 78-495 Calle Tampico, La Quinta,
California 92253, or such other place as Authority may designate in writing, the sum of
(a) Fifteen Million Fifty -Eight Thousand Two Hundred Eighty -Eight Dollars
($15,058,288), or so much thereof as may be disbursed hereunder ("Note Amount"),
and (b) all costs and expenses payable hereunder, in currency of the United States of
America, which at the time of payment is lawful for the payment of public and private
debts.
1. Agreement. This Authority Promissory Note ("Note") is given in
accordance with that certain Affordable Housing and Property Disposition Agreement
executed by Authority and Coachella Valley Housing Coalition, a California nonprofit
public benefit corporation ("CVHC"), as "Developer", and thereafter assigned by CVHC
to Borrower, dated as of , 2017 ("Agreement"). The rights
and obligations of Borrower and Authority under this Note shall be governed by the
Agreement and by the additional terms set forth in this Note. In the event of any
inconsistencies between the terms of this Note and the terms of the Agreement or any
other document related to the Note Amount, the terms of this Note shall prevail. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Agreement. An Event of Default by Developer under any of the
provisions of the Agreement, and/or a default under any and all attachments and all
breakout documents executed, attested and/or recorded in implementation of the
Agreement, including, without limitation, the Authority Deed of Trust or Authority
Regulatory Agreement, or the income and/or rent restrictions as set forth in the Tax
Credit Regulatory Agreement (collectively, the "Transaction Documents") shall, after
the expiration of any cure period under the respective agreement or document, be a
default under this Note (a "Default"), and a default under this Note, after notice and
expiration of a ten (10) day cure period, shall be an Event of Default under the
Agreement and a default under the Transaction Documents.
2. Interest. The Note Amount shall bear simple interest at three percent
(3%) per annum.
3. Repayment of Note Amount. The Note Amount shall be paid by the
Borrower's annual payment to Authority of an amount equal to fifty percent (50%) of the
Residual Receipts from operation of the Project, as determined by a Residual Receipts
calculation from the operation of the Project the preceding calendar year; provided,
however, that if there are other "soft" loans to the Project that require repayment out of
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the Residual Receipts from the operation of the Project (any such loans, a "Soft Loan"),
then the amount payable to Authority shall be a proportional amount of fifty percent
(50%) of said Residual Receipts, which proportional amount shall be equal to the
percentage the principal amount of the Note Amount bears to the total collective
principal amount of the Note Amount and the principal amount of all other Soft Loans.
Annual Residual Receipts payments shall be made by the Borrower by cashier's
check and shall be delivered on or before May 1 for each year during the term of this
Note commencing in the first fiscal year following the Conversion Date until the Note
Amount and all unpaid interest thereon has been repaid in full. Additionally, the Note
Amount shall be paid by any or all of the following: (i) one hundred percent (100%) of
the Refinancing Net Proceeds immediately upon any refinancing of the loans secured
by the Property (or any part thereof), (ii) one hundred percent (100%) of the Transfer
Net Proceeds immediately upon any transfer in whole or in part of the Project, and
(iii) any Cost Savings, pursuant to Section 6.9 of the Agreement.
As used herein, "Affiliate" means any person or entity directly or indirectly,
through one or more intermediaries, controlling, controlled by or under common control
with Borrower which, if Borrower is a partnership or limited liability company, shall
include each of the constituent members or partners, respectively thereof. The term
"control" as used in the immediately preceding sentence, means, with respect to a
person that is a corporation, the right to the exercise, directly or indirectly, of more than
fifty percent (50%) of the voting rights attributable to the shares of the controlled
corporation, and, with respect to a person that is not a corporation, the possession,
directly or indirectly, of the power to direct or cause the direction of the management or
policies of the controlled person.
As used herein, "Annual Financial Statement" shall mean each certified
financial statement of Borrower for the Project using generally accepted accounting
principles ("GAAP"), as separately accounted for this Project, including Operating
Expenses and Annual Project Revenue, prepared annually at Borrower's expense, by
an independent certified public accountant reasonably acceptable to Authority.
As used herein, "Annual Project Revenue" means all gross income and all
revenues of any kind from the Project in a calendar year, of whatever form or nature,
whether direct or indirect, with the exception of the items excluded below, actually
received by or paid to or for the account or benefit of Borrower or any Affiliate of
Borrower or any of their agents or employees, from any and all sources, resulting from
or attributable to the ownership, operation, leasing and occupancy of the Project,
determined on the basis of generally accepted accounting principles applied on a
consistent basis, and shall include, but not be limited to: (i) gross rentals paid by tenants
of the Project under leases, and payments and subsidies of whatever nature, including
without limitation any payments, vouchers or subsidies from the U.S. Department of
Housing and Urban Development or any other person or organization, received on
behalf of tenants under their leases, (ii) amounts paid by residents of the Project to
Borrower or any Affiliate of Borrower on account of Operating Expenses for further
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disbursement by Borrower or such Affiliate to a third party or parties, (iii) late charges
and interest paid on rentals, (iv) rents and receipts from licenses, concessions, vending
machines, coin laundry and similar sources, (v) other fees, charges or payments not
denominated as rental but payable to Borrower in connection with the rental of office,
retail, storage, or other space in the Project, (vi) consideration received in whole or in
part for the cancellation, modification, extension or renewal of leases, and (vii) interest
and other investment earnings on security deposits, reserve accounts and other Project
accounts to the extent disbursed for other than the purpose of the reserve.
Notwithstanding the foregoing, gross income shall not include the following items:
(a) security deposits from tenants (except when applied by Borrower to rent or other
amounts owing by tenants); (b) capital contributions to Borrower by its members,
partners or shareholders (including capital contributions required to pay any Deferred
Developer Fee); (c) condemnation or insurance proceeds; (d) funds received from any
source actually and directly used for initial development of the Project; (e) receipt by an
Affiliate of management fees or other bona fide arms -length payments for reasonable
and necessary Operating Expenses associated with the Project; (f) Transfer Net
Proceeds; or (g) Refinancing Net Proceeds.
As used herein "Capital Replacement Reserve" shall have the meaning
ascribed thereto in the Authority Regulatory Agreement.
As used herein, "CPI Adjustment" means the increase in the cost of living index,
as measured by the Consumer Price Index for all urban consumers, Los Angeles -
Riverside -Orange statistical area, all items (1982-84 = 100) published by the United
States Department of Labor, Bureau of Labor Statistics ("CPI") in effect as of the date
on which the Certificate of Occupancy is issued for the Project to the CPI in effect as of
the date on which an adjustment is made. If such index is discontinued or revised, such
other index with which such index is replaced (or if not replaced, another index which
reasonably reflects and monitors consumer prices) shall be used in order to obtain
substantially the same results as would have been obtained if the discontinued index
had not been discontinued or revised. If the CPI is changed so that the base year is
other than 1982-84, the CPI shall be converted in accordance with the conversion factor
published by the United States Department of Labor, Bureau of Labor Statistics.
As used herein, "Debt Service" shall mean payments made in a calendar year
pursuant to the approved Construction Loan or the Take -Out Loan, as applicable,
obtained for the construction/development, and ownership of the Project, as set forth in
the Project Budget, or any permitted refinancing or modification thereof, but excluding
payments made pursuant to this Note.
As used herein, "Deferred Developer Fee" shall mean the portion of the
Borrower's development fee, if any, that is payable out of the Annual Project Revenue
and not from capital sources, as set forth in the Project Budget. Disbursement of the
Deferred Developer Fee (all or any part thereof) shall be subject to the provisions of the
next paragraph.
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In connection with Borrower's eligibility to disburse all or any part of the Deferred
Developer Fee, in the event the cost of completing the Project exceeds the amount set
forth in the final Budget; then, to the extent necessary, the funds otherwise available to
pay the developer fee from capital sources shall be expended and used to pay the
remaining costs of completing the Project to the extent necessary to ensure the
completion of the Project and the balance of the developer fee shall be paid as Deferred
Developer Fee in accordance with the priority set forth in the Partnership Agreement,
and/or payable from the proceeds of any approved refinancing or transfer of the
Property and/or the Project. In no event shall Borrower be eligible for disbursement of
the Deferred Developer Fee or any part thereof prior to completion of the Project, as
approved by the Executive Director as evidenced by the issuance by Authority of the
Release of Construction Covenants.
As used herein, "Operating Expenses" shall mean actual, reasonable and
customary (for comparable high quality rental Projects in Riverside County) costs, fees
and expenses directly incurred, paid, and attributable to the operation, maintenance and
management of the Project in a calendar year, which are in accordance with the annual
Operating Budget approved by Authority pursuant to Section 9 of Authority Regulatory
Agreement, including, without limitation, painting, cleaning, repairs, alterations,
landscaping, utilities, refuse removal, certificates, permits and licenses, sewer charges,
real and personal property taxes, assessments, insurance, security, advertising and
promotion, janitorial services, cleaning and building supplies, purchase, repair, servicing
and installation of appliances, equipment, fixtures and furnishings, fees and expenses of
property management, fees and expenses of accountants, attorneys and other
professionals, asset management fees paid to the Investor in the amount of
Dollars ($ ), which shall be increased annually by
percent ( %) per year, partnership management fees paid to the
general partner of Borrower in the amount of Dollars ($ ),
which shall be increased annually by percent ( %) per year, and
other actual, reasonable and customary operating costs which are directly incurred and
paid by Borrower, but which are not paid from or eligible to be paid from the Operating
Reserve or any other reserve accounts. In addition, Operating Expenses shall include a
social services fee in the amount of Dollars ($ ) for calendar
year 20_, which shall be increased annually by percent ( %) per
year, provided Borrower provides the social services described in (a) the Tenant
Services Agreement that was included in Borrower's tax credit application, and (b) the
Scope of Development. Operating Expenses shall not include any of the following:
(i) salaries of employees of Borrower or Borrower's general overhead expenses, or
expenses, costs and fees paid to an Affiliate of Borrower, to the extent any of the
foregoing exceed the expenses, costs or fees that would be payable in a bona fide
arms' length transaction between unrelated parties in the Riverside County area for the
same work or services; (ii) any amounts paid directly by a tenant of the Project to a third
party in connection with expenses which, if incurred by Borrower, would be Operating
Expenses; (iii) optional or elective payments with respect to the Construction Loan;
(iv) any payments with respect to any Project -related loan or financing that has not been
approved by Authority; (v) expenses, expenditures, and charges of any nature
whatsoever arising or incurred by Borrower prior to completion of the Project with
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respect to the development of the Project, or any portion thereof, including, without
limitation, all predevelopment and preconstruction activities conducted by Borrower in
connection with the Project, including without limitation, the preparation of all plans and
the performance of any tests, studies, investigations or other work, and the construction
of the Project and any on site or off site work in connection therewith; or
(vi) depreciation, amortization, and accrued principal and interest expense on deferred
payment debt.
As used herein, "Operating Reserve" shall have the meaning ascribed thereto in
the Authority Regulatory Agreement.
As used herein, "Partnership Agreement" means the agreement which sets
forth the terms of the Borrower's limited partnership, as such agreement may be
amended from time to time.
As used herein, "Refinancing Net Proceeds" means the proceeds of any
approved refinancing of the Construction Loan or other approved financing secured by
the Property, net of the following actual costs and fees incurred: (i) the amount of the
financing which is satisfied out of such proceeds, (ii) reasonable and customary costs
and expenses incurred in connection with the refinancing, (iii) the balance, if any, of the
Deferred Developer Fee, (iv) the balance, if any, of authorized loans to the Project
made by the limited partners of Borrower, including interest at the rate set forth in the
Partnership Agreement for such loans, (v) the balance, if any, of authorized operating
loans or development loans made by the general partners of a limited partnership that
succeeds to Borrower's interest in the Agreement and the Project, including interest at
the rate set forth in the Partnership Agreement for such loans, (vi) the return of capital
contributions, if any, to the Project made by the general partners of a limited partnership
that succeeds to Borrower's interest in the Agreement and the Project that were used to
pay the Deferred Developer Fee, and (vii) the amount of proceeds required to be
reserved for the repair, rehabilitation, reconstruction or refurbishment of the Project.
As used herein, "Reserve Deposits" shall mean any payments to the Capital
Replacement Reserve account and payments to the Operating Reserve account
pursuant to Sections 10 and 11, respectively, of Authority Regulatory Agreement or
such higher amounts as may be otherwise required by (i) any lender of a Project -related
loan that has been approved by Authority, or (ii) the Investor, pursuant to the terms of
the Partnership Agreement.
As used herein, "Residual Receipts" shall mean Annual Project Revenue less
the sum of:
(i) Operating Expenses;
(ii) Debt Service;
(iii) Reserve Deposits to the Capital Replacement Reserve;
(iv) Reserve Deposits to the Operating Reserve;
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(v) Deferred Developer Fees;
(vi) Unpaid Tax Credit adjustment amounts, if any, pursuant to the Partnership
Agreement;
(viii) Repayment of loans to the Project, if any, made by the limited partner(s) of
Borrower pursuant to the Partnership Agreement, including interest at the rate set forth
in the Partnership Agreement, for eligible development and/or operating expense
deficits or other eligible loans (provided that if made during the compliance period
Borrower shall provide to Executive Director documentation showing the propriety of
such loan(s) and if made subsequent to the expiration of the compliance period each
such loan must be reasonably approved by the Executive Director before being
provided to the Project after review of documentation provided by Borrower showing
propriety of such loans);
(ix) Repayment to the administrative and/or managing general partners of
Borrower for loans to the Project for development advance(s) pursuant to the
Partnership Agreement, operating deficit advance(s) pursuant to the Partnership
Agreement), credit adjuster payment(s) pursuant to the Partnership Agreement), and/or
development fee advance(s) pursuant to the Partnership Agreement, and with all such
loans to be repaid without interest (provided that if made during the compliance period
Borrower shall provide to Executive Director documentation showing the propriety of
such loan(s) and if made subsequent to the expiration of the compliance period each
such loan must be reasonably approved by the Executive Director before being
provided to the Project after review of documentation provided by Borrower showing
propriety of such loans);
(x) Repayment to the administrative and/or managing general partners of
Borrower of certain loans made to the Project after the expiration or earlier termination
of the Partnership Agreement to cover shortfalls in funding for Operating Expenses in
excess of the Operating Expenses included in the approved annual Operating Budget
for the year in which such loan is made (if at all), all such loans to be repaid without
interest (provided that if made during the compliance period Borrower shall provide to
Executive Director documentation showing the propriety of such loan(s) and if made
subsequent to the expiration of the compliance period each such loan must be
reasonably approved by the Executive Director before being provided to the Project
after review of documentation provided by Borrower showing propriety of such loans);
and
(xi) Capital contributions to the Project, if any, made by the general partners of
Borrower that were used to pay developer fee.
In the event any calculation of Annual Project Revenue less subsections
(i) through (xi) inclusive above results in a negative number, then Residual Receipts
shall be zero ($0) for that year and shall not carry over to the next or any other
subsequent year.
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In addition, none of the fees, costs, expenses, or items described above in
calculation of Residual Receipts shall include any duplicate entry/item, or double
accounting for a cost item. The calculation of Residual Receipts shall be conducted at
Borrower's sole cost and expense, by a third party auditor and submitted to Borrower
annually, along with Borrower's payment of Residual Receipts.
As used herein, "Transfer Net Proceeds" shall mean the proceeds of any sale
or other transfer, in whole or part, of the Property or Borrower's interests therein, net
only of (i) the reasonable and customary costs and expenses incurred in connection
with such transfer; (ii) the amount of the financing which is satisfied out of such
proceeds, (iii) the balance, if any, of the Deferred Developer Fee, (iv) the balance, if
any, of loans to the Project made by the limited partners of Borrower, including interest
thereon as provided in the Partnership Agreement, (v) the balance, if any, of operating
loans or development loans made by the general partners of Borrower, including
interest thereon as provided in the Partnership Agreement, and (vi) the return of capital
contributions, if any, to the Project made by the general partners of Borrower that were
used to pay the Deferred Developer Fee.
4. Security. Borrower's obligations under this Note and the Agreement
shall, at all times during which any amount remains outstanding hereunder, be secured
by the Authority Deed of Trust, which Authority Deed of Trust shall only be subordinated
to the approved deed(s) of trust for the Construction Loan and such encumbrances
approved by Authority in writing, pursuant to a written subordination agreement in a
form approved by Authority counsel. Upon execution of the same, the terms of the
Authority Deed of Trust are incorporated herein and made a part hereof to the same
extent and with the same force and effect as if fully set forth herein.
5. Maturity. This Note shall be due and payable on the fifty-seventh (57tn)
anniversary of the date of execution hereof by Borrower.
6. Application of Payments. All payments shall be applied (i) first, to costs
and fees owing under this Note, (ii) second, to the payment of unpaid accrued interest
owing under this Note for each calendar year in which no payment was made by
Borrower pursuant to Section 3 above, (iii) third, to the payment of accrued interest for
the preceding calendar year, and (iv) fourth, to payment of principal.
7. Waivers.
(a) Borrower expressly agrees that this Note or any payment
hereunder may be extended from time to time at Authority's sole discretion and that
Authority may accept security in consideration for any such extension or release any
security for this Note at its sole discretion all without in any way affecting the liability of
Borrower.
(b) No extension of time for payment of this Note made by agreement
by Authority with any person now or hereafter liable for the payment of this Note shall
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operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
(c) The obligations of Borrower under this Note shall be absolute and
Borrower waives any and all rights to offset, deduct or withhold any payments or
charges due under this Note for any reasons whatsoever.
(d) Borrower waives presentment, demand, notice of protest and
nonpayment, notice of default or delinquency, notice of acceleration, notice of costs,
expenses or leases or interest thereon, notice of dishonor, diligence in collection or in
proceeding against any of the rights or interests in or to properties securing this Note,
and the benefit of any exemption under any homestead exemption laws, if applicable.
(e) No previous waiver and no failure or delay by Authority in acting
with respect to the terms of this Note or the Authority Deed of Trust shall constitute a
waiver of any breach, default, or failure or condition under this Note, the Authority Deed
of Trust or the obligations secured thereby. A waiver of any term of this Note, the
Authority Deed of Trust or of any of the obligations secured thereby must be made in
writing and shall be limited to the express written terms of such waiver.
8. Attorneys' Fees and Costs. Borrower agrees that if any amounts due
under this Note are not paid when due, Borrower will pay all costs and expenses of
collection and reasonable attorneys' fees paid or incurred in connection with the
collection or enforcement of this Note, whether or not suit is filed.
9. Joint and Several Obligation. This Note is the joint and several
obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon
them and their heirs, successors and assigns.
10. Amendments and Modifications. This Note may not be changed orally,
but only by an amendment approved by Authority and evidenced in a writing signed by
Borrower and by Authority.
11. Authority May Assign. Authority may, at its option, assign its right to
receive payment under this Note without necessity of obtaining the consent of the
Borrower.
12. Borrower Assignment Prohibited. In no event shall Borrower assign or
transfer any portion of this Note without the prior express written consent of Authority,
which consent shall not unreasonably be withheld, except pursuant to a transfer that is
authorized under Section 15 of the Agreement.
13. Acceleration and Other Remedies. Upon the occurrence of a Default,
Authority may, at Authority's option, declare the outstanding principal amount of this
Note, together with the then accrued and unpaid interest thereon and other charges
hereunder, and all other sums secured by the Authority Deed of Trust, to be due and
payable immediately, and upon such declaration, such principal and interest and other
sums shall immediately become and be due and payable without demand or notice, all
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as further set forth in the Authority Deed of Trust. All costs of collection, including, but
not limited to, reasonable attorneys' fees and all expenses incurred in connection with
protection of, or realization on, the security for this Note, may be added to the principal
hereunder, and shall accrue interest as provided herein. Authority shall at all times
have the right to proceed against any portion of the security for this Note in such order
and in such manner as Authority may consider appropriate, without waiving any rights
with respect to any of the security. Any delay or omission on the part of Authority in
exercising any right hereunder, under the Agreement or under the Authority Deed of
Trust shall not operate as a waiver of such right, or of any other right. No single or
partial exercise of any right or remedy hereunder or under the Agreement or any other
document or agreement shall preclude other or further exercises thereof, or the exercise
of any other right or remedy. The acceptance of payment of any sum payable
hereunder, or part thereof, after the due date of such payment shall not be a waiver of
Authority's right to either require prompt payment when due of all other sums payable
hereunder or to declare a Default for failure to make prompt or complete payment.
14. Alternate Rate. Upon the occurrence of any Default, or upon the maturity
hereof (by acceleration or otherwise), the entire unpaid principal sum, at the option of
Authority, shall bear interest, from the date of occurrence of such Default or maturity
and after judgment and until collection, at the "Alternate Rate", such rate being the
highest interest rate then permitted by law. Interest calculated at the Alternate Rate,
when and if applicable, shall be due and payable immediately without notice or demand.
Borrower agrees that in the event of any Default, Authority will incur additional expense
in servicing the loan evidenced by this Note and will suffer damage and loss resulting
from such Default. Borrower agrees that in such event Authority shall be entitled to
damages for the detriment caused thereby, which damages are extremely difficult and
impractical to ascertain. Therefore, Borrower agrees that the Alternate Rate (as applied
to the unpaid principal balance, accrued interest, fees, costs and expenses incurred) is
a reasonable estimate of such damages to Authority, and Borrower agrees to pay such
sum on demand.
15. Consents. Borrower hereby consents to: (a) any extension (whether one
or more) of the time of payment under this Note, (b) the release or surrender or
exchange or substitution of all or any part of the security, whether real or personal, or
direct or indirect, for the payment hereof, (c) the granting of any other indulgences to
Borrower, and (d) the taking or releasing of other or additional parties primarily or
contingently liable hereunder. Any such extension, release, surrender, exchange or
substitution may be made without notice to Borrower or to any endorser, guarantor or
surety hereof, and without affecting the liability of said parties hereunder.
16. Interest Rate Limitation. Authority and Borrower stipulate and agree that
none of the terms and provisions contained herein or in any of the loan instruments
shall ever be construed to create a contract for the use, forbearance or detention of
money requiring payment of interest at a rate in excess of the maximum interest rate
permitted to be charged by the laws of the State of California. In such event, if any
holder of this Note shall collect monies which are deemed to constitute interest which
would otherwise increase the effective interest rate on this Note to a rate in excess of
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the maximum rate permitted to be charged by the laws of the State of California, all
such sums deemed to constitute interest in excess of such maximum rate shall, at the
option of such holder, be credited to the payment of the sums due hereunder or
returned to Borrower.
17. Successors and Assigns. Whenever "Authority" is referred to in this
Note, such reference shall be deemed to include the La Quinta Housing Authority and
its successors and assigns, including, without limitation, any successor to its rights,
powers, and responsibilities, and any subsequent assignee or holder of this Note. All
covenants, provisions and agreements by or on behalf of Borrower, and on behalf of
any makers, endorsers, guarantors and sureties hereof which are contained herein shall
inure to the benefit of Authority and Authority's successors and assigns.
18. Miscellaneous. Time is of the essence hereof. This Note shall be
governed by and construed under the laws of the State of California except to the extent
Federal laws preempt the laws of the State of California. Borrower irrevocably and
unconditionally submits to the jurisdiction of the Superior Court of the State of California
for the County of Riverside or the United States District Court of the Central District of
California, as Authority may deem appropriate, in connection with any legal action or
proceeding arising out of or relating to this Note. Borrower also waives any objection
regarding personal or in rem jurisdiction or venue.
19. Non -Recourse Obligation. Borrower and its partners shall not be
personally liable for the payment of this Note or for the payment of any deficiency
established after judicial foreclosure or trustee's sale; provided, however, that the
foregoing shall not in any way affect any rights Authority may have (as a secured party
or otherwise) hereunder or under the Agreement or the Authority Deed of Trust to
recover directly from Borrower any amounts, or any funds, damages or costs (including
without limitation reasonable attorneys' fees and costs) incurred by Authority as a result
of fraud, intentional misrepresentation or bad faith, waste, and any costs and expenses
incurred by Authority in connection therewith (including without limitation reasonable
attorneys' fees and costs).
20. Accounting.
(a) Accounting Terms and Determinations. Unless otherwise
specified herein, (i) all accounting terms used herein shall be interpreted, (ii) all
accounting determinations hereunder shall be made, and (c) all books, records and
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, consistently applied, except for changes approved by Authority.
(b) Financial Reporting and Accounting Covenants. Borrower shall
permit the representatives of Authority at any time or from time to time, upon three (3)
business days' notice and during normal business hours, to inspect, audit, and copy all
of Borrower's books, records, and accounts relating to the Property. Borrower shall
furnish or cause to be furnished to Authority the following:
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(i) Annual Financial Statement. Borrower shall submit to
Authority, on or before May 1 of each year commencing in the first year after the
issuance of the first certificate of occupancy for the Project, an Annual Financial
Statement, with respect to the Project that has been reviewed by an independent
certified public accountant, together with an expressed written opinion of the certified
public accountant that such Annual Financial Statement presents the financial position,
results of operations, and cash flows of the Project fairly and in accordance with GAAP.
(ii) Tax Returns. As soon as available, but in no event later
than thirty (30) days after the time of filing with the Internal Revenue Service, the federal
tax returns (and supporting schedules, if any) of Borrower.
(iii) Audit Reports. Not later than ten (10) days after receipt
thereof by Borrower, copies of all reports submitted to Borrower by independent public
accountants in connection with each annual, interim or special audit of the financial
statements of Borrower, made by such accountants, including the comment letter
submitted by such accountants to management in connection with their annual audit. If
any such audit report results in Borrower restating Residual Receipts upward for any
fiscal year, then Borrower shall accompany delivery of such audit report to Authority
with the additional payment to Authority resulting from said restatement pursuant to
Section 3 of this Note. If any such audit report results in Borrower restating Residual
Receipts downward for any fiscal year, Borrower may carry forward the overpayment
made to Authority pursuant to such Section 3 as a credit against payments thereunder
in subsequent fiscal years.
(c) Late Payment. If any annual payment required pursuant to
Section 3 above is not received by Authority within ten (10) calendar days after payment
is due, Borrower shall pay to Authority a late charge of five percent (5%) of such
payment, such late charge to be immediately due and payable without demand by
Authority.
(d) Dispute Regarding Annual Financial Statement. If Authority
disputes any Annual Financial Statement, Authority shall notify Borrower of such dispute
within sixty (60) days after receipt of an Annual Financial Statement and the parties
shall cause their representatives to meet and confer concerning the dispute and to use
all reasonable efforts to reach a mutually acceptable resolution of the matter in question
within thirty (30) days after Authority's notice of such dispute. If the parties are unable
to reach a mutually acceptable resolution within such thirty (30) day period, then, within
twenty (20) days after the expiration of such period, Borrower and Authority shall
appoint a national firm of certified public accountants to review the dispute and to make
a determination as to the matter in question within thirty (30) days after such
appointment. If the parties cannot, within ten (10) days, agree upon the firm to be
appointed, then, upon the application of either party, such firm shall be appointed by the
Presiding Judge of the Superior Court for the County of Riverside, California. Such
firm's determination shall be final and binding upon the parties. Such firm shall have full
access to the books, records and accounts of Borrower and the Property.
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(e) Underpayment. If any audit by Authority reports an underpayment
by Borrower on this Note, Borrower shall pay the amount of such underpayment,
together with the late charge set forth in Section 20(c) of this Note, to Authority within
ten (10) days after written notice thereof to Borrower or, in the event of a dispute, after
timely notice to Borrower of the resolution of such dispute by the independent firm of
certified public accountants, as the case may be, and if such underpayment amounts to
more than five percent (5%) of the disputed payment for the period audited, then,
notwithstanding anything to the contrary in this section, Borrower shall pay to Authority,
within ten (10) days after written demand, Authority's reasonable costs and expenses in
conducting such audit and exercising its rights under this Section 20 of this Note.
BORROWER:
L.P.,
a California limited partnership
Date: , 20 By:
Its:
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ATTACHMENT NO. 15A
FORM OF AUTHORITY DEED OF TRUST (PLANS
[See following document]
882/015610-0040
9930825.4 a05/12/17 ATTACHMENT NO. 15A
145
RECORDING REQUESTED BY:
AND WHEN RECORDED RETURN TO:
La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
APN: 104-413-02 and 104-413-13
Government Code Sections 6103 and 27383]
DEED OF TRUST
WITH ASSIGNMENT OF RENTS
(PLANS)
NOTE: RIDER ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY
AGREEMENT AND FIXTURE FILING.
This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO ("Deed of
Trust"), is made I , between a California Limited
Partnership, herein called TRUSTOR, whose address is , La Quinta, CA
TITLE INSURANCE COMPANY, a California nonprofit public benefit
corporation, herein called TRUSTEE, and LA QUINTA HOUSING AUTHORITY, a public body, corporate
and politic, herein called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's estate, dated on or
about the date hereof, in that property in the City of La Quinta, State of California, described in Exhibit "A"
(the "Property"),
together with the rents, issues and profits thereof, subject, however, to the right, power and authority
hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for
the purpose of securing (1) payment of the sum of TWO MILLION THREE HUNDRED SIXTY-SIX
THOUSAND SEVEN HUNDRED TWENTY-TWO DOLLARS ($2,366,722), with interest thereon according
to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of
Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Trustor
incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon
which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory
note or notes reciting that they are secured by this Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor
expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by
each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and
all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange
County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official
Records in the office of the county recorder of the county where said property is located, noted below
opposite the name of such county, namely:
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
Alameda
1288
556
Kings
858
713
Placer
1028
379
Sierra
38
187
Alpine
3
130-31
Lake
437
110
Plumas
166
1307
Siskiyou
506
762
Amador
133
438
Lassen
192
367
Riverside
3778
347
Solano
1287
621
Butte
1330
513
Los Angeles
T-3878
874
Sacramento
5039
124
Sonoma
2067
427
Calaveras
185
338
Madera
911
136
San Benito
300
405
Stanislaus
1970
56
Colusa
323
391
Marin
1849
122
San Bernardino
6213
768
Sutter
655
585
Contra Costa
4684
1
Mariposa
90
453
San Francisco
A-804
596
Tehama
457
183
Del Norte
101
549
Mendocino
667
99
San Joaquin
2855
283
Trinity
108
595
[Free Re
882/015610-0040
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COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
El Dorado
704
635
Merced
1660
753
San Luis Obispo
1311
137
Tulare
2530
108
Fresno
5052
623
Modoc
191
93
San Mateo
4778
175
Tuolumne
177
160
Glenn
469
76
Mono
69
302
Santa Barbara
2065
881
Ventura
2607
237
Humboldt
801
83
Monterey
357
239
Santa Clara
6626
664
Yolo
769
16
Imperial
1189
701
Napa
704
742
Santa Cruz
1638
607
Yuba
398
693
Inyo
165
672
Nevada
363
94
Shasta
800
633
Kern
3756
690
Orange
7182
18
San Diego
SERIES
5 Book 1964, Page 149774
shall inure to and bind the parties hereto, with respect to the property above described. Said agreements,
terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on
pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this
Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a
statement regarding the obligation secured hereby, provided the charge therefor does not exceed the
maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder
be mailed to him at his address hereinbefore set forth.
SEE RIDERS ATTACHED TO THIS DEED OF TRUST
STATE OF CALIFORNIA
COUNTY OF
State of California )
County of )
On before me,
(here insert name and title of the officer)
Notary Public, personally appeared
Signature of Trustor
}
}
a California Limited Partnership
who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and
acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
By:
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DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the
foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees
1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete
or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon
and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property
or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or
permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from
the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general.
2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness
secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or
any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers
of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable
sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to
foreclose this Deed.
4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any
part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without
obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may:
make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or
Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting
to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any
encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such
powers, pay necessary expenses, employ counsel and pay his or her reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the
date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in
effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the
maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
1) That any award in connection with any condemnation for public use of or injury to said property or any part
thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same
manner and with the same effect as above provided for disposition of proceeds of fire or other insurance.
2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right
either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
3) That at any time or from time to time, without liability therefor and without notice, upon written request of
Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person
for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any
map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon
surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion
may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals
in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such
reconveyance may be described as "the person or persons legally entitled thereto".
5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority,
during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior
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to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to
collect and retain such rents, issues and profits as they become due and payable. Upon any such default (beyond any applicable
cure period, and during the continuance of such default), Beneficiary may at any time without notice, either in person, by agent, or
be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured,
enter upon and take possession of said property or any part thereof, in its own name sue for or otherwise collect such rents, issues,
and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including
reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering
upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid,
shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any
agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of
written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property,
which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice
of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place
fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to
the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any
portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such
sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters
or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter
defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection
with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with
accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if
any, to the person or persons legally entitled thereto.
7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by
instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument,
executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said
property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without
conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name
and address of the new Trustee.
8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees,
administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of
the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as
provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
DO NOT RECORD REQUEST FOR FULL RECONVEYANCE
TO TRUSTEE:
The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed
of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied;
and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to
cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you
herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said
Deed of Trust, all the estate now held by you under the same.
Dated
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Please mail Deed of Trust,
Note and Reconveyance to
Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
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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 , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature,
(Seal)
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
executed this day of by , L.P., a
California limited partnership, herein "Trustor," in favor of the LA QUINTA HOUSING
AUTHORITY, a public body, corporate and politic, herein "Beneficiary," the same
parties to that certain form Deed of Trust With Assignment of Rents, of even date
hereto, to which this Rider is attached. This Rider is made a part of and is incorporated
into said Deed of Trust. This Rider shall supersede any conflicting term or provision of
the form Deed of Trust to which it is attached.
Reference is made to (i) that certain Authority Promissory Note (Plans) executed
by Trustor on or about the date set forth above, the repayment of which by Trustor is
secured by this Deed of Trust ("Authority Note"), (ii) that certain Affordable Housing
and Property Disposition Agreement between Coachella Valley Housing Coalition, a
California nonprofit public benefit corporation, and Beneficiary dated for identification
purposes only as of , 2017 as assigned to and assumed by the Trustor
(collectively, the "Agreement"), and (iii) that certain Affordable Housing Regulatory
Agreement, by and between Trustor and Beneficiary, for the benefit of Beneficiary, and
recorded concurrently herewith in the Office of the Riverside County Recorder
("Authority Regulatory Agreement").
The parties hereto agree:
1. Property. The estate subject to this Deed of Trust is Trustor's estate in the
real property legally described in the foregoing Deed of Trust to which this Rider is
attached (the "Property").
2. Obligations Secured. Trustor makes this grant and assignment for the
purpose of securing the following obligations ("Secured Obligations"):
a. Payment to Beneficiary of all indebtedness at any time owing under
the terms of the Authority Note;
b. Payment and performance of all obligations of Trustor under this
Deed of Trust;
C. Payment and performance of all obligations of Trustor under the
Agreement and the Authority Regulatory Agreement.
d. Payment and performance of all future advances and other
obligations of Trustor or any other person, firm, or entity with the
approval of Trustor, may agree to pay and/or perform (whether as
principal, surety or guarantor) for the benefit of Beneficiary, when
the obligation is evidenced by a writing which recites that it is
secured by this Deed of Trust; and
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e. All modifications, extensions and renewals of any of the obligations
secured hereby, however evidenced.
3. Obligations. The term "obligations" is used herein in its broadest and
most comprehensive sense and shall be deemed to include, without limitation, all
interest and charges, prepayment charges, late charges and fees at any time accruing
or assessed on any of the Secured Obligations.
4. Incorporation. All terms of the Authority Note, Agreement, and Authority
Regulatory Agreement, and the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall be
deemed to have notice of the terms of all of the foregoing documents.
5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the
Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder
shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in
any manner with respect to the Property, unless Beneficiary, in person or by agent,
assumes actual possession thereof. Nor shall appointment of a receiver for the
Property by any court at the request of Beneficiary or by agreement with Trustor, or the
entering into possession of the Property by such receiver, be deemed to make
Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect
to the Property.
6. No Cure. In the event Beneficiary collects and receives any rents under
the Deed of Trust upon any default hereof, such collection or receipt shall in no way
constitute a curing of the default, except if and to the extent the same are sufficient to
cure all monetary defaults and no other defaults then exist.
7. Possession Upon Default. Upon the occurrence of and during the
continuation of a default, Beneficiary, after having given notice and the applicable cure
periods having expired with the default having not been cured (hereinafter, a "default"),
may, at its option, without any action on its part being required and without in any way
waiving such default, take possession of the Property in accordance with applicable law
and have, hold, manage, lease and operate the same, on such terms and for such
period of time as Beneficiary may deem proper, and may collect and receive all rents
and profits, with full power to make, from time to time, all commercially reasonable
alterations, renovations, repairs or replacements thereto as may seem proper to
Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such
alterations, renovations, repairs and replacements, and all costs and expenses incident
to taking and retaining possession of the Property, and the management and operation
thereof, and keeping the same properly insured; (b) all taxes, charges, claims,
assessments, and any other liens which may be prior in lien or payment of the Authority
Note, and premiums for insurance, with interest on all such items; and (c) the
indebtedness secured hereby, together with all costs and attorney's fees, in such order
or priority as to any of such items as Beneficiary in its sole discretion may determine,
any statute, law, custom or use to the contrary notwithstanding. Any amounts received
by Beneficiary or its agents in the performance of any acts prohibited by the terms of
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this assignment, including, but not limited to, any amounts received in connection with
any cancellation, modification or amendment of any lease prohibited by the terms of this
assignment and any rents and profits received by Trustor after the occurrence of a
default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be
accounted for to Beneficiary and shall not be commingled with other funds of the
Trustor. Any person receiving any portion of such trust funds shall receive the same in
trust for Beneficiary as if such person had actual or constructive notice that such funds
were impressed with a trust in accordance therewith.
8. Receiver. In addition to any and all other remedies of Beneficiary set forth
under this Deed of Trust or permitted at law or in equity, if a default shall have occurred
and not have been cured within any applicable cure period, Beneficiary, to the extent
permitted by law and without regard to the value, adequacy or occupancy of the security
for the Note and other sums secured hereby, shall be entitled as a matter of right if it so
elects to the appointment of a receiver to enter upon and take possession of the
Property and to collect all rents and profits and apply the same as the court may direct,
and such receiver may be appointed by any court of competent jurisdiction by ex parte
application and without notice, notice of hearing being hereby expressly waived. The
expenses, including receiver's fees, attorneys' fees, costs and agent's compensation,
incurred pursuant to the power herein contained shall be secured by this Deed of Trust.
9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary
addressed to:
La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
10. Notice to Limited Partner; Limited Partner Cure Rights. Beneficiary shall
give Trustor's limited partner written notice of any default under the Loan Documents, and
the cure periods contained in this Paragraph 10 shall commence on the effective date of
any such notice, at the following address:
With copies to:
Notwithstanding anything to the contrary set forth in this Deed of Trust,
Beneficiary shall not exercise any right hereunder without providing the limited partner
of Trustor with not less than thirty (30) days prior written notice and right to cure any
default giving rise to the exercise of said remedy (or such longer period as reasonably
necessary provided the limited partner commences to cure the default within the initial
30 days and diligently prosecutes such cure to completion). Beneficiary agrees that any
cure tendered by the limited partner of Trustor shall be accepted or rejected on the
same terms and conditions as if tendered directly by Trustor.
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11. Subordination Acknowledgement. Beneficiary hereby acknowledges that
the loan secured by this Deed of Trust is also subordinate to the extended use
agreement required to be executed by Borrower pursuant to Section 42(h)(6)(B) of the
Internal Revenue Code, for purposes of the low-income housing tax credits to be
allocated to Trustor. In addition, Beneficiary hereby acknowledges that the loan
secured by this Deed of Trust is further subordinate to Section 42(h)(6)(e)(ii) of the
Internal Revenue Code, which prohibits the eviction or termination of a tenancy, other
than for good cause, of an existing tenant of any low-income housing tax credit unit or
any increase in the gross rent with respect to such unit, not otherwise permitted under
Section 42, for a period of three (3) years after the date the Property is acquired by
Beneficiary through foreclosure or instrument in lieu of foreclosure.
[signatures on next page]
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IN WITNESS WHEREOF, Trustor has executed this Rider on the date of
Trustor's acknowledgment herein below, to be effective for all purposes as of the day
and year first set forth above.
TRUSTOR:
, L.P.,
a California Limited Partnership
0
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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 Riverside
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
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ATTACHMENT NO. 15B
FORM OF AUTHORITY DEED OF TRUST (PROPERTY AND CONSTRUCTIO
[See following document]
882/015610-0040
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159
RECORDING REQUESTED BY:
AND WHEN RECORDED RETURN TO:
La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
APN: 104-413-02 and 104-413-13
Government Code Sections 6103 and 27383]
DEED OF TRUST
WITH ASSIGNMENT OF RENTS
(PROPERTY AND CONSTRUCTION)
NOTE: RIDER ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY
AGREEMENT AND FIXTURE FILING.
This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO ("Deed of
Trust"), is made I , between a California Limited
Partnership, herein called TRUSTOR, whose address is , La Quinta, CA
TITLE INSURANCE COMPANY, a California nonprofit public benefit
corporation, herein called TRUSTEE, and LA QUINTA HOUSING AUTHORITY, a public body, corporate
and politic, herein called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's estate, dated on or
about the date hereof, in that property in the City of La Quinta, State of California, described in Exhibit "A"
(the "Property"),
together with the rents, issues and profits thereof, subject, however, to the right, power and authority
hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for
the purpose of securing (1) payment of the sum of FIFTEEN MILLION FIFTY-EIGHT THOUSAND TWO
HUNDRED EIGHTY-EIGHT DOLLARS ($15,058,288), with interest thereon according to the terms of a
promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and
extensions or renewals thereof; (2) the performance of each agreement of Trustor incorporated by
reference or contained herein; and (3) payment of additional sums and interest thereon which may
hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or
notes reciting that they are secured by this Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor
expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by
each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and
all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange
County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official
Records in the office of the county recorder of the county where said property is located, noted below
opposite the name of such county, namely:
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
Alameda
1288
556
Kings
858
713
Placer
1028
379
Sierra
38
187
Alpine
3
130-31
Lake
437
110
Plumas
166
1307
Siskiyou
506
762
Amador
133
438
Lassen
192
367
Riverside
3778
347
Solano
1287
621
Butte
1330
513
Los Angeles
T-3878
874
Sacramento
5039
124
Sonoma
2067
427
Calaveras
185
338
Madera
911
136
San Benito
300
405
Stanislaus
1970
56
Colusa
323
391
Marin
1849
122
San Bernardino
6213
768
Sutter
655
585
Contra Costa
4684
1
Mariposa
90
453
San Francisco
A-804
596
Tehama
457
183
Del Norte
101
549
Mendocino
667
99
San Joaquin
2855
283
Trinity
108
595
[Free Re
882/015610-0040
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160
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
El Dorado
704
635
Merced
1660
753
San Luis Obispo
1311
137
Tulare
2530
108
Fresno
5052
623
Modoc
191
93
San Mateo
4778
175
Tuolumne
177
160
Glenn
469
76
Mono
69
302
Santa Barbara
2065
881
Ventura
2607
237
Humboldt
801
83
Monterey
357
239
Santa Clara
6626
664
Yolo
769
16
Imperial
1189
701
Napa
704
742
Santa Cruz
1638
607
Yuba
398
693
Inyo
165
672
Nevada
363
94
Shasta
800
633
Kern
3756
690
Orange
7182
18
San Diego
SERIES
5 Book 1964, Page 149774
shall inure to and bind the parties hereto, with respect to the property above described. Said agreements,
terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on
pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this
Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a
statement regarding the obligation secured hereby, provided the charge therefor does not exceed the
maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder
be mailed to him at his address hereinbefore set forth.
SEE RIDERS ATTACHED TO THIS DEED OF TRUST
STATE OF CALIFORNIA
COUNTY OF
State of California )
County of )
On before me,
(here insert name and title of the officer)
Notary Public, personally appeared
Signature of Trustor
}
}
a California Limited Partnership
who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and
acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
By:
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DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the
foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees:
1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete
or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon
and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property
or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or
permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from
the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general.
2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness
secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or
any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers
of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable
sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to
foreclose this Deed.
4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any
part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without
obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may:
make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or
Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting
to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any
encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such
powers, pay necessary expenses, employ counsel and pay his or her reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the
date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in
effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the
maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
1) That any award in connection with any condemnation for public use of or injury to said property or any part
thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same
manner and with the same effect as above provided for disposition of proceeds of fire or other insurance.
2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right
either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
3) That at any time or from time to time, without liability therefor and without notice, upon written request of
Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person
for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any
map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon
surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion
may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals
in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such
reconveyance may be described as "the person or persons legally entitled thereto".
5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority,
during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior
882/015610-0040
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to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to
collect and retain such rents, issues and profits as they become due and payable. Upon any such default (beyond any applicable
cure period, and during the continuance of such default), Beneficiary may at any time without notice, either in person, by agent, or
be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured,
enter upon and take possession of said property or any part thereof, in its own name sue for or otherwise collect such rents, issues,
and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including
reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering
upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid,
shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any
agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of
written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property,
which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice
of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place
fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to
the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any
portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such
sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters
or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter
defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection
with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with
accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if
any, to the person or persons legally entitled thereto.
7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by
instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument,
executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said
property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without
conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name
and address of the new Trustee.
8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees,
administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of
the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as
provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
DO NOT RECORD REQUEST FOR FULL RECONVEYANCE
TO TRUSTEE:
The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed
of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied;
and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to
cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you
herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said
Deed of Trust, all the estate now held by you under the same.
Dated
882/015610-0040
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Please mail Deed of Trust,
Note and Reconveyance to
Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
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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 , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature,
(Seal)
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
executed this day of by , L.P., a
California limited partnership, herein "Trustor," in favor of the LA QUINTA HOUSING
AUTHORITY, a public body, corporate and politic, herein "Beneficiary," the same
parties to that certain form Deed of Trust With Assignment of Rents, of even date
hereto, to which this Rider is attached. This Rider is made a part of and is incorporated
into said Deed of Trust. This Rider shall supersede any conflicting term or provision of
the form Deed of Trust to which it is attached.
Reference is made to (i) that certain Authority Promissory Note (Property and
Construction) executed by Trustor on or about the date set forth above, the repayment
of which by Trustor is secured by this Deed of Trust ("Authority Note"), (ii) that certain
Affordable Housing and Property Disposition Agreement between Coachella Valley
Housing Coalition, a California nonprofit public benefit corporation, and Beneficiary
dated for identification purposes only as of , 2017 as assigned to and
assumed by the Trustor (collectively, the "Agreement"), and (iii) that certain Affordable
Housing Regulatory Agreement, by and between Trustor and Beneficiary, for the benefit
of Beneficiary, and recorded concurrently herewith in the Office of the Riverside County
Recorder ("Authority Regulatory Agreement").
The parties hereto agree:
1. Property. The estate subject to this Deed of Trust is Trustor's estate in the
real property legally described in the foregoing Deed of Trust to which this Rider is
attached (the "Property").
2. Obligations Secured. Trustor makes this grant and assignment for the
purpose of securing the following obligations ("Secured Obligations"):
a. Payment to Beneficiary of all indebtedness at any time owing under
the terms of the Authority Note;
b. Payment and performance of all obligations of Trustor under this
Deed of Trust;
C. Payment and performance of all obligations of Trustor under the
Agreement and the Authority Regulatory Agreement.
d. Payment and performance of all future advances and other
obligations of Trustor or any other person, firm, or entity with the
approval of Trustor, may agree to pay and/or perform (whether as
principal, surety or guarantor) for the benefit of Beneficiary, when
the obligation is evidenced by a writing which recites that it is
secured by this Deed of Trust; and
882/015610-0040
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e. All modifications, extensions and renewals of any of the obligations
secured hereby, however evidenced.
3. Obligations. The term "obligations" is used herein in its broadest and
most comprehensive sense and shall be deemed to include, without limitation, all
interest and charges, prepayment charges, late charges and fees at any time accruing
or assessed on any of the Secured Obligations.
4. Incorporation. All terms of the Authority Note, Agreement, and Authority
Regulatory Agreement, and the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall be
deemed to have notice of the terms of all of the foregoing documents.
5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the
Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder
shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in
any manner with respect to the Property, unless Beneficiary, in person or by agent,
assumes actual possession thereof. Nor shall appointment of a receiver for the
Property by any court at the request of Beneficiary or by agreement with Trustor, or the
entering into possession of the Property by such receiver, be deemed to make
Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect
to the Property.
6. No Cure. In the event Beneficiary collects and receives any rents under
the Deed of Trust upon any default hereof, such collection or receipt shall in no way
constitute a curing of the default, except if and to the extent the same are sufficient to
cure all monetary defaults and no other defaults then exist.
7. Possession Upon Default. Upon the occurrence of and during the
continuation of a default, Beneficiary, after having given notice and the applicable cure
periods having expired with the default having not been cured (hereinafter, a "default"),
may, at its option, without any action on its part being required and without in any way
waiving such default, take possession of the Property in accordance with applicable law
and have, hold, manage, lease and operate the same, on such terms and for such
period of time as Beneficiary may deem proper, and may collect and receive all rents
and profits, with full power to make, from time to time, all commercially reasonable
alterations, renovations, repairs or replacements thereto as may seem proper to
Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such
alterations, renovations, repairs and replacements, and all costs and expenses incident
to taking and retaining possession of the Property, and the management and operation
thereof, and keeping the same properly insured; (b) all taxes, charges, claims,
assessments, and any other liens which may be prior in lien or payment of the Authority
Note, and premiums for insurance, with interest on all such items; and (c) the
indebtedness secured hereby, together with all costs and attorney's fees, in such order
or priority as to any of such items as Beneficiary in its sole discretion may determine,
any statute, law, custom or use to the contrary notwithstanding. Any amounts received
by Beneficiary or its agents in the performance of any acts prohibited by the terms of
882/015610-0040
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168
this assignment, including, but not limited to, any amounts received in connection with
any cancellation, modification or amendment of any lease prohibited by the terms of this
assignment and any rents and profits received by Trustor after the occurrence of a
default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be
accounted for to Beneficiary and shall not be commingled with other funds of the
Trustor. Any person receiving any portion of such trust funds shall receive the same in
trust for Beneficiary as if such person had actual or constructive notice that such funds
were impressed with a trust in accordance therewith.
8. Receiver. In addition to any and all other remedies of Beneficiary set forth
under this Deed of Trust or permitted at law or in equity, if a default shall have occurred
and not have been cured within any applicable cure period, Beneficiary, to the extent
permitted by law and without regard to the value, adequacy or occupancy of the security
for the Note and other sums secured hereby, shall be entitled as a matter of right if it so
elects to the appointment of a receiver to enter upon and take possession of the
Property and to collect all rents and profits and apply the same as the court may direct,
and such receiver may be appointed by any court of competent jurisdiction by ex parte
application and without notice, notice of hearing being hereby expressly waived. The
expenses, including receiver's fees, attorneys' fees, costs and agent's compensation,
incurred pursuant to the power herein contained shall be secured by this Deed of Trust.
9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary
addressed to:
La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
10. Notice to Limited Partners; Limited Partner Cure Rights. Beneficiary shall
give Trustor's limited partner written notice of any default under the Loan Documents, and
the cure periods contained in this Paragraph 10 shall commence on the effective date of
any such notice, at the following address:
With copies to:
Notwithstanding anything to the contrary set forth herein, Beneficiary shall not
exercise any right under this Deed of Trust without providing the limited partner of
Trustor with not less than thirty (30) days prior written notice and right to cure any
default giving rise to the exercise of said remedy (or such longer period as reasonably
necessary provided the limited partner commences to cure the default within the initial
30 days and diligently prosecutes such cure to completion). Beneficiary agrees that any
cure tendered by the limited partner of Trustor shall be accepted or rejected on the
same terms and conditions as if tendered directly by Trustor.
882/015610-0040
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169
11. Subordination Acknowledgement. Beneficiary hereby acknowledges that
the loan secured by this Deed of Trust is also subordinate to the extended use
agreement required to be executed by Borrower pursuant to Section 42(h)(6)(B) of the
Internal Revenue Code, for purposes of the low-income housing tax credits to be
allocated to Trustor. In addition, Beneficiary hereby acknowledges that the loan
secured by this Deed of Trust is further subordinate to Section 42(h)(6)(e)(ii) of the
Internal Revenue Code, which prohibits the eviction or termination of a tenancy, other
than for good cause, of an existing tenant of any low-income housing tax credit unit or
any increase in the gross rent with respect to such unit, not otherwise permitted under
Section 42, for a period of three (3) years after the date the Property is acquired by
Beneficiary through foreclosure or instrument in lieu of foreclosure.
[signatures on next page]
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170
IN WITNESS WHEREOF, Trustor has executed this Rider on the date of
Trustor's acknowledgment herein below, to be effective for all purposes as of the day
and year first set forth above.
TRUSTOR:
, L.P.,
a California Limited Partnership
0
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171
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 Riverside
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
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172
ATTACHMENT NO. 16
PROJECT BUDGET
[See following pages]
882/015610-0040
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173
PROJECT BUDGET
SOURCES
Existing USDA 515 Loan $628,640
Plan Loan $2,366,722
Property and Construction Loan $15,058,288
Tax Credit Equity $28,908,896
Deferred Developer Fee/General Partner Equity $7,526
Total Sources $46,970,072
USES OF FUNDS
LAND COST/ACQUISITION
Existing Structure Value
$5,500,000
Adjacent Vacant Site
$1,260,000
Carrying Costs
$25,000
Legal & Closing Costs
Off -Site Improvements
Total Acquisition Cost -
$6,785,000
REHABILITATION
Site Work
$4,806,182
Structures
$6,371,231
General Requirements
$558,871
Contractor Insurance & Bond
$250,000
Contractor Overhead
$307,379
Contractor Profit
$307,379
Total Rehabilitation Cost
$12,601,042
NEW CONSTRUCTION -
Site Work and Utilities
$3,170,167
Structures
$10,387,777
General Requirements
$574,580
Contractor Insurance & Bond
$404,378
Contractor Overhead
$372,843
Contractor Profit
$335,078
Total New Construction Costs
$15,244,823
ARCHITECTURAL FEES
Design
$503,140
Supervision
$125,785
Total Architectural Costs
$628,925
Survey and Engineering, incl testing
$340,000
CONSTR. INTEREST & FEES
882/015610-0040
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174
Construction Loan Interest During Construction
$955,455
Construction Loan Interest Post Construction
$530,809
Construction loan fee and expenses
$229,053
Taxes
$10,000
Insurance
$103,946
Title and Recording
$50,000
Total Construction Interest and Fees
$1,879,263
PERMANENT FINANCING
Loan Fees
$0
Title and Recording
$20,000
Other Financing Costs --
legal
$10,000
Total Permanent Financing Costs
$30,000
LEGAL FEES
Lender Legal Costs Paid by Applicant
$35,000
Other - Owner Legal
$40,000
Total Attorney Costs
$75,000
RESERVES
Operating Reserve @ 6 mo ops
$372,269
Current Reserve Balance
$700,767
Section 8 reserve
Total Reserve Costs
$1,073,036
Total Appraisal Costs
$10,000
Total Construction Contingency Costs
$4,044,691
OTHER
Tax Credit App./Alloc./Monitoring fees
$154,033
Local Development Impact Fees
$1,269,259
Permit Processing Fees and utility hookups
$500,000
Market Study
$10,000
Marketing & Lease up
$30,000
Environmental Review
$70,000
Staking and Inspections
$100,000
Furnishings
$25,000
Relocation
$375,000
Soft Cost Contingency
$235,000
Total Other Costs
$2,768,292
Total Project Cost
$45,480,072
DEVELOPER COSTS
Developer Overhead/Profit
$1,400,000
Total Developer Costs
$1,400,000
TOTAL PROJECT COST
Syndication Costs
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Legal - Syndication/Organization
Audit
Consultant - Syndication
Total Syndication Costs
TOTAL PROJECT COSTS INCL. SYNDICATION
$40,000
$10,000
$40,000
$90,000
$46,970,072
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ATTACHMENT NO. 17
FORM OF AUTHORITY REGULATORY AGREEMENT
[See following document]
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REQUESTED BY
AND WHEN RECORDED MAIL TO:
La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
This document is exempt from a recording fee pursuant to
Government Code Sections 6103 and 27383.
AFFORDABLE HOUSING REGULATORY AGREEMENT
This AFFORDABLE HOUSING REGULATORY AGREEMENT (this "Regulatory
Agreement"), dated for purposes of identification only as of (the
"Effective Date of Regulatory Agreement"), is entered by and between the LA
QUINTA HOUSING AUTHORITY, a public body, corporate and politic, (the
"Authority"), and a California limited partnership (the
"Developer").
RECITALS
The following recitals are a substantive part of this Regulatory Agreement; all
capitalized terms set forth in the Recitals shall have the meanings ascribed to such
terms in Section 1 hereof.
A. Authority is a public body, corporate and politic.
B. Authority was established to increase, improve, and preserve the City of
La Quinta's supply of low and moderate income housing.
C. Authority owns fee title to that certain real property located in the City of
La Quinta, County of Riverside, State of California more particularly
described in Exhibit "A", which is attached hereto and incorporated herein
by this reference (the "Property"). The Property is comprised of the WSA
Property and the Unimproved Property.
D. Developer is controlled by an experienced owner, developer and manager
of affordable housing for low and moderate -income families.
E. Authority entered
Agreement with
general partner
("Agreement").
into an Affordable Housing and Property
Coachella Valley Housing Coalition, the
of Developer, dated as of
Disposition
2U1 /
F. The Agreement provides for Authority to sell the Property to Developer,
and for Developer to rehabilitate the improvements on the WSA Property,
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construct new apartment units on the WSA Property and Unimproved
Property, and thereafter operate a one hundred forty (140) unit multifamily
apartment project with all but two of such units restricted for occupancy by
low and very low income households (the "Project"). The Agreement
further provides that the Parties execute and record this Regulatory
Agreement against the Property.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
SECTION 1. DEFINITIONS.
"40% Very Low Income Household" means those person(s) or households
whose income does not exceed forty percent (40%) of AMI, adjusted for household size.
"40% Very Low Income Units" means the fifty (50) Affordable Units that are
required to be rented to and occupied by 40% Very Low Income Households.
"60% Low Income Household" means those person(s) or households whose
income does not exceed sixty percent (60%) of AMI, adjusted for household size.
"60% Low Income Units" means the four (4) Affordable Units that are required
to be rented to and occupied by 60% Low Income Households.
"Additional Regulatory Agreements" means the Tax Credit Regulatory
Agreement and any other regulatory agreement Developer is required to execute as a
condition to obtaining financing to develop and/or operate the Project.
"Affiliate" means any person or entity directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with Developer
which, if Developer is a partnership or limited liability company, shall include each of the
constituent members or partners, respectively thereof. The term "control" as used in
the immediately preceding sentence, means, with respect to a person that is a
corporation, the right to the exercise, directly or indirectly, of more than fifty percent
(50%) of the voting rights attributable to the shares of the controlled corporation, and,
with respect to a person that is not a corporation, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of the
controlled person.
"Affordability Period" means the period commencing on the date on which this
Regulatory Agreement is recorded in the Official Records and ending on the fifty-
seventh (57th) anniversary of said date.
"Affordable Rent" means the maximum Monthly Rent that may be charged to
and paid by Extremely Low Income Households, 40% Very Low Income Households,
Very Low Income Households, or 60% Low Income Households, as applicable, for the
Affordable Units, as annually determined pursuant to Health and Safety Code Section
50053(b) and based on a household size of two (2) persons, and the regulations
promulgated pursuant to and incorporated therein.
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"Affordable Units" means the one hundred thirty-eight (138) one (1) bedroom,
one (1) bath rental units in the Project.
"Agreement" is defined in Recital E hereof.
"AMI" means the median family income (adjusted for household size) for the
Riverside County area promulgated and published annually by HCD pursuant to Title
25, Section 6932 of the California Code of Regulations. If HCD ceases to annually
publish median incomes, the Parties shall agree upon an adequate substituted manner
for determining AMI.
"Annual Project Revenue" has the meaning ascribed thereto in each of the
Authority Notes.
"Approved Financing" means the financing approved by Authority pursuant to
the Agreement, as set forth in the Project Budget attached to the Agreement, obtained
by Developer for the acquisition of the Property and the construction and ownership of
the Project. In addition, "Approved Financing" shall include any refinancing of the
Approved Financing which has been approved by Authority.
"Approved Pro Forma" means that certain pro forma created in connection with
the Project Budget attached to the Agreement.
"Authority" means the La Quinta Housing Authority, a public body, corporate
and politic, and any assignee of or successor to its rights, powers and responsibilities.
"Authority Deeds of Trust" means those certain deeds of trust executed by
Developer, as "Trustor," in favor of Authority, as "Beneficiary," securing Developer's
repayment under the Authority Notes.
"Authority Loans" means the loans provided by Authority to Developer pursuant
to the Agreement to assist the Developer acquire the Property and with the costs
Developer incurs in developing the Project.
"Authority Notes" means those certain Authority Promissory Notes executed by
Developer on or about that evidence Developer's obligation to repay the
Authority Loans.
"Capital Replacement Reserve" means a capital replacement reserve for the
Project (i) initially consisting of not less than Dollars ($ ) (or
such greater amount required under any Additional Regulatory Agreement, under the
Partnership Agreement, or by any lender of a Project -related loan that has been
approved by Authority) set aside in a separate interest -bearing trust account,
commencing upon the rental of the newly constructed Affordable Units, and
(ii) replenished from annual deposits of Dollars ($ ) per Unit
(e.g., $ ) of Annual Project Revenue, adjusted annually by the CPI
Adjustment (unless otherwise agreed to by Developer and Authority) or as required
under the Partnership Agreement (or such greater amount required under any
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Additional Regulatory Agreement, or under the Partnership Agreement).
Notwithstanding the foregoing, commencing as of Effective Date of Regulatory
Agreement, and until the rental of any newly constructed Affordable Units, the Capital
Replacement Reserve means the capital replacement reserve funds for the Existing
WSA Units that were transferred to Developer by Authority in connection with
Developer's acquisition of the WSA Property from Authority, in the amount of
"Certification of Continuing Program Compliance" means an annual
recertification form substantially in the form attached hereto and incorporated herein as
Fxhihit F
"Certificate of Occupancy" means the final certificate of occupancy issued by
the City for the completion of construction of the Project.
"City" means the City of La Quinta, a California municipal corporation and charter
city.
"Construction Financing" means a loan in an amount not less than
Dollars ($ ) from an Institutional Lender to be
secured by a deed of trust.
"CPI Adjustment" means the percentage increase in the cost of living index, as
measured by the Consumer Price Index for all urban consumers, Los Angeles -
Riverside -Orange statistical area, all items (1982-84 = 100) published by the United
States Department of Labor, Bureau of Labor Statistics ("CPI") between the CPI figure
in effect as of the date on which the Certificate of Occupancy is issued and the CPI
figure in effect as of the date on which an adjustment is made. If such index is
discontinued or revised, such other index with which such index is replaced (or if not
replaced, another index which reasonably reflects and monitors consumer prices) shall
be used in order to obtain substantially the same results as would have been obtained if
the discontinued index had not been discontinued or revised. If the CPI is changed so
that the base year is other than 1982-84, the CPI shall be converted in accordance with
the conversion factor published by the United States Department of Labor, Bureau of
Labor Statistics.
"Default" means the failure of a Party to perform any action or covenant required
by the Agreement or hereunder within the time periods provided in the Agreement or
hereunder, respectively, following notice and opportunity to cure, as set forth in Section
13.1 of the Agreement and Section 16.01 hereof, respectively.
"Developer" means
and any permitted assignees of Developer.
hereof.
a California limited partnership,
"Effective Date of Regulatory Agreement" is defined in the initial paragraph
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"Eligible Tenant" means a household which satisfies all of the following
requirements: (i) at least one member of the household is a "qualifying resident" or
"senior citizen" (as those terms are defined in California Civil Code Section 51.3(b)(1))
that is fifty-five (55) years of age or older; (ii) each other member of the household is
either a "qualifying resident" or "senior citizen" that is fifty-five (55) years of age or older,
or is a "qualified permanent resident" or "permitted health care resident" within the
meaning of California Civil Code section 51.3(b)(2), (3), and (7); and (iii) such
household qualifies as (a) with respect to an Extremely Low Income Unit, an Extremely
Low Income Household, (b) with respect to a 40% Very Low Income Unit, a 40% Very
Low Income Household, (c) with respect to a Very Low Income Unit, a Very Low Income
Household, and with respect to a 60% Low Income Unit, a 60% Low Income Household.
"Environmental Laws" means (i) Sections 25115, 25117, 25122.7 or 25140 of
the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste
Control Law)), (ii) Section 25316 of the California Health and Safety Code, Division 20,
Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act),
(iii) Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release Response Plans and Inventory), (iv) Section 25281 of
the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage
of Hazardous Substances), (v) Article 9 or Article 11 of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (vi) Section 311 of the Clean Water Act (33
U.S.C. §1317), (vii) Section 1004 of the Resource Conservation and Recovery Act, 42
U.S.C. §6901 et seq. (42 U.S.C. §6903) or (viii) Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq.
"Executive Director" means the person duly appointed to the position of
Executive Director of Authority, or his or her designee. The Executive Director shall
represent Authority in all matters pertaining to this Regulatory Agreement. Whenever a
reference is made herein to an action or approval to be undertaken by Authority, the
Executive Director is authorized to act unless this Regulatory Agreement specifically
provides otherwise or the context should otherwise require.
"Existing WSA Units" means the seventy-three (73) apartment units existing on
the WSA Property as of the Effective Date of Regulatory Agreement.
"Extremely Low Income Household" means those person(s) or households
whose income does not exceed the qualifying limit for "extremely low income
households", adjusted for household size, pursuant to Health and Safety Code Section
50105, which, as of the date of this Regulatory Agreement means persons and families
whose income does not exceed the qualifying limit for extremely low income
households, adjusted for household size, as established and amended from time to time
pursuant to Section 8 of the United States Housing Act of 1937, as published from time
to time by HCD in the California Code of Regulations.
"Extremely Low Income Units" means the twenty-four (24) Affordable Units that
are required to be rented to and occupied by Very Low Income Households.
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"Governmental Requirements" means all laws, ordinances, statutes, codes,
rules, regulations, orders and decrees, of the United States, the State of California, the
County of Riverside, the City, and any other political subdivision, agency,
instrumentality, or other entity exercising jurisdiction over Authority, Developer, the
Project, or the Property.
"Hazardous Materials" means any substance, material, or waste which is or
becomes regulated by any local governmental authority, the State of California, or the
United States Government, including, but not limited to, any material or substance
which is (i) defined as a "hazardous waste", "acutely hazardous waste", "extremely
hazardous waste", or "restricted hazardous waste" under Section 25115, 25117 or
25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code, Division 20,
Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined
as a "hazardous material", "hazardous substance", or "hazardous waste" under Section
25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous
Materials Release Response Plans and Inventory), (iv) defined as a "hazardous
substance" under Section 25281 of the California Health and Safety Code, Division 20,
Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum,
(vi) asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as
"hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California
Code of Regulations, Chapter 20, (ix) designated as "hazardous substances" pursuant
to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., (xii)
methyl -tertiary butyl ether, (xiii) perchlorate, or (xiv) any other substance, whether in the
form of a solid, liquid, gas or any other form whatsoever, which by any Governmental
Requirements either requires special handling in its use, transportation, generation,
collection, storage, handling, treatment or disposal, or is defined as "hazardous" or
harmful to the environment. For purposes hereof, "Hazardous Materials" excludes
materials and substances in quantities as are commonly used in constructing and
operating apartment complexes, provided such materials and substances are used in
accordance with all applicable laws.
"Hazardous Materials Contamination" means the contamination (whether
presently existing or hereafter occurring) of the improvements, facilities, soil,
groundwater, air or other elements on, in or of the Property by Hazardous Materials, or
the contamination of the buildings, facilities, soil, groundwater, air or other elements on,
in or of any other property as a result of Hazardous Materials at any time emanating
from the Property.
"HCD" means the California Department of Housing and Community
Development.
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"HUD" means the United States Department of Housing and Urban
Development.
"Institutional Lender" means any of the following institutions having assets or
deposits in the aggregate of not less than One Hundred Million Dollars ($100,000,000):
California chartered bank; a bank created and operated under and pursuant to the laws
of the United States of America; an "incorporated admitted insurer" (as that term is used
in Section 1100.1 of the California Insurance Code); a "foreign (other state) bank" (as
that term is defined in Section 1700(1) of the California Financial Code); a federal
savings and loan association (Cal. Fin. Code Section 8600); a commercial finance
lender (within the meaning of Sections 2600 et seq. of the California Financial Code); a
"foreign (other nation) bank" provided it is licensed to maintain an office in California, is
licensed or otherwise authorized by another state to maintain an agency or branch
office in that state, or maintains a federal agency or federal branch in any state (Section
1716 of the California Financial Code); a bank holding company or a subsidiary of a
bank holding company which is not a bank (Section 3707 of the California Financial
Code); a trust company, savings and loan association, insurance company, investment
banker; college or university; pension or retirement fund or system, either governmental
or private, or any pension or retirement fund or system of which any of the foregoing
shall be trustee, provided the same be organized under the laws of the United States or
of any state thereof; and a Real Estate Investment Trust, as defined in Section 856 of
the Internal Revenue Code of 1986, as amended, provided such trust is listed on either
the American Stock Exchange or the New York Stock Exchange. Each of
and are hereby deemed to be an Institutional
Lender.
"Legal Description" means that certain legal description of the Property which is
attached hereto and incorporated herein as Exhibit A.
"Management Units" means two (2) dwelling units located or to be located on
the WSA Property that are not Affordable Units. The Management Units shall be used
for on -site management and maintenance personnel. Each household occupying the
Management Units shall, upon initial occupancy, qualify as "persons and families of
moderate income" pursuant to Health and Safety Code section 50093. Subsequent to
initial occupancy, no recertification shall be required of the on -site management and
maintenance personnel.
"Map" means a map depicting the Property which is attached hereto and
incorporated herein as Exhibit B.
"Marketing Plan" means the marketing plan for the rental of the Affordable Units
which provides, to the extent authorized by applicable federal, state and local laws and
regulations, that a preference be given to tenants who are currently residents of the City
or currently work in the City. The Marketing Plan includes a tenant selection system in
conformance with fair housing laws and the Tax Credit Rules which establishes a
chronological waiting list system for selection of tenants. Developer shall not revise the
Marketing Plan approved by Authority pursuant to the Agreement in any material
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respect without obtaining the prior written consent of the Executive Director, which shall
not be unreasonably withheld, conditioned, or delayed.
"Monthly Rent" means the total of monthly payments for (a) use and occupancy
of each Affordable Unit and land and facilities associated therewith, (b) any separately
charged fees or service charges assessed by Developer which are required of all
tenants, other than security deposits, (c) a reasonable allowance for an adequate level
of service of utilities not included in (a) or (b) above, including garbage collection,
sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not
including telephone or cable service, and (d) possessory interest, taxes or other fees or
charges assessed for use of the land and facilities associated therewith by a public or
private entity other than Developer. In the event that all utility charges are paid by the
landlord rather than the tenant, no utility allowance shall be deducted from the rent.
"Notice" means a notice in the form prescribed by Section 17.01 hereof.
"Official Records" means the Official Records of the County of Riverside,
California.
"Operating Budget" means an operating budget for the Project, which budget
shall be subject to the annual written approval of Authority in accordance with Section
9.01 hereof.
"Operating Expenses" has the meaning ascribed thereto in each of the Authority
Notes.
"Operating Reserve" means an operating reserve for the Project (i) initially
consisting of not less than One Hundred Fifty -Nine Thousand Five Hundred Forty -One
Dollars ($159,541) (or such greater amount required under any Additional Regulatory
Agreement, under the Partnership Agreement, or by any lender of a Project -related loan
that has been approved by Authority) set aside in a separate interest -bearing trust
account, commencing upon the rental of the newly constructed Affordable Units, and
(ii) replenished to Dollars ($ ) from annual deposits
of the Annual Project Revenue, to the extent available, such that the balance of the
Operating Reserve consists of not less than three (3) months of projected Operating
Expenses, adjusted annually by the CPI Adjustment (unless otherwise agreed to by
Developer and Authority) or as required under the Partnership Agreement (or such
greater amount required under any Additional Regulatory Agreement, or under the
Partnership Agreement), provided in no event shall the balance in such account exceed
a sum equal to one (1) year of debt service for the Project (or such greater amount
required under the Tax Credit Regulatory Agreement, pursuant to any of the Approved
Financing or under the Partnership Agreement). Developer's requirement to maintain
the Operating Reserve shall terminate at such time as the Project has achieved a
minimum annual debt service ratio of 1.15 for three (3) years following the date
Developer has initially rented ninety-five percent (95%) of the Affordable Units to
Eligible Tenants in accordance with the terms of this Regulatory Agreement.
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"Outside Construction Commencement Date" means that date which is thirty
(30) days after the Effective Date of Regulatory Agreement.
"Parties" means jointly, Authority and Developer; Authority and Developer are
each a "Party."
"Partnership Agreement" means the agreement which sets forth the terms of
Developer's limited partnership, as such agreement may be amended from time to time.
"Permanent Financing" means a loan in an amount not to exceed the amount of
the Construction Financing from an Institutional Lender to be secured by a deed of trust
against the Property which replaces the Construction Financing upon Developer's
completion of the construction and stabilization of the Project.
"Project" means , (i) with respect to the WSA Property, Developer's (a)
rehabilitation of seventy-two (72) of the apartment units thereon, (b) demolition of one
(1) of the apartment units thereon, and construction thereon of twenty-six (26) new
apartment units, a new community building, and related amenities and site
improvements, and (c) relocation of the Existing WSA Tenants; (ii) with respect to the
Unimproved Real Property, Developer's construction thereon of forty-two (42) new
apartment units, a new community building, and related amenities and site
improvements; and (iii) with respect to the Property, Developer's construction of all
required on -site improvements necessary to serve the apartment units in accordance
with this Agreement, including, without limitation, in accordance with the Scope of
Development, and the Final Construction Documents; and (iii) operation of the Property
as a single cohesive affordable rental Project consisting of one hundred forty (140)
residential dwelling units.
"Property" means the WSA Property and Unimproved Property.
"Regulatory Agreement" means this Regulatory Agreement.
"Release of Construction Covenants" means the document which evidences
Developer's satisfactory completion of construction of the Project, as set forth in Section
9.15 of the Agreement, substantially in the form which is attached thereto as Attachment
No. 19 and incorporated therein by reference.
"Scope of Development" means that certain Scope of Development which is
attached to the Agreement as Attachment No. 4 and incorporated therein by reference.
The Scope of Development describes the scope, amount and quality of the construction
to be done by Developer pursuant to the terms and conditions of the Agreement and
this Regulatory Agreement.
"Tax Credits" means Low Income Housing Tax Credits granted pursuant to
Section 42 of the Internal Revenue Code and/or California Revenue and Taxation Code
Sections 17057.5, 17058, 23610.4 and 23610.5 and California Health and Safety Code
Section 50199, et seq.
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"Tax Credit Regulatory Agreement" means the regulatory agreement which
may be required to be recorded against the Property with respect to the issuance of Tax
Credits for the Project.
"Tax Credit Rules" means Section 42 of the Internal Revenue Code and/or
California Revenue and Taxation Code Sections 17057.5, 17058, 23610.4 and 23610.5
and California Health and Safety Code Section 50199, et seq., and the rules and
regulations implementing the foregoing, as the same may be amended from time to
time.
"TCAC" means the California Tax Credit Allocation Committee.
"Unimproved Real Property" means that certain real property located adjacent
to the WSA Property, in the City of La Quinta, County of Riverside, State of California
more particularly described in Exhibit "A". The Unimproved Real Property is
unimproved, and comprises approximately 5.7 acres
"USDA" means the United States of America, acting through the Farmer's Home
Administration, United States Department of Agriculture.
"USDA Requirements" means all requirements imposed on the Property by the
USDA in connection with any loans provided to the Property and any rental subsidies
provided to the tenants at the Property.
"Very Low Income Household" means those person(s) or households whose
income does not exceed the qualifying limit for "very low income households," adjusted
for household size, pursuant to Health and Safety Code Section 50105, which, as of the
date of this Regulatory Agreement means persons and families whose income does not
exceed the qualifying limit for very low income households, adjusted for household size,
as established and amended from time to time pursuant to Section 8 of the United
States Housing Act of 1937, as published from time to time by HCD in the California
Code of Regulations.
"Very Low Income Units" means the sixty (60) Affordable Units that are required
to be rented to and occupied by Very Low Income Households.
"WSA Property" is that certain real property located at 42-800 Washington
Street, in the City of La Quinta, County of Riverside, State of California more particularly
described in Exhibit "A". The WSA Property is improved with an apartment complex
commonly known as the Washington Street Apartments consisting of the Existing WSA
Units. The WSA Real Property comprises approximately 4.7 acres.
SECTION 2. COVENANTS REGARDING CONSTRUCTION OF THE
IMPROVEMENTS.
Developer shall carry out the design, construction, and operation of the Project in
compliance with applicable Governmental Requirements and all of the terms and
conditions set forth in the Agreement.
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SECTION 3. COVENANTS REGARDING USE.
3.01 Covenants To Use In Accordance With La Quinta Municipal Code And
Agreement. Developer covenants and agrees for itself, its successors, assigns, and
every successor in interest to Developer's interest in the Property or any part thereof,
that Developer shall devote the Property to the uses specified in this Regulatory
Agreement until the expiration of the Affordability Period. All uses conducted on the
Property, including, without limitation, all activities undertaken by Developer pursuant to
this Regulatory Agreement, shall conform to all applicable provisions of the La Quinta
Municipal Code. The foregoing covenants shall run with the land.
3.02 Covenant Regarding rding Specific Uses. Developer covenants and agrees for
itself, its successors, assigns, and every successor in interest to Developer's interest in
the Property or any part thereof, that Developer shall use the Property to operate the
Project until the expiration of the Affordability Period.
3.03 Covenants Regarding Term And Priority f Agreement. This Regulatory
Agreement shall remain in effect throughout the Affordability Period, notwithstanding the
payment in full of the Authority Loans. Developer's performance under this Regulatory
Agreement is secured by the Authority Deeds of Trust, and Developer shall not be
entitled to a reconveyance of the Authority Deeds of Trust prior to the expiration of the
Affordability Period; provided that, upon Developer's repayment of the Authority Loans,
Developer shall be entitled to a partial reconveyance of the Authority Deeds of Trust
solely to release therefrom Developer's obligations to repay such loan. This Regulatory
Agreement shall unconditionally be and remain at all times prior and superior to the
liens created by the Construction Financing, the Permanent Financing, the Tax Credit
Regulatory Agreement, any other Additional Regulatory Agreement, and any other
documents related to any of the foregoing and all of the terms and conditions contained
therein, and to the lien of any new mortgage debt which is for the purpose of refinancing
all or any part of the Construction Financing or Permanent Financing. Authority
acknowledges and agrees, however, that the lien of any financing provided by USDA
prior to the Effective Date of Regulatory Agreement that is secured by the WSA
Property is superior to the lien of this Regulatory Agreement.
SECTION 4. COVENANTS REGARDING AFFORDABLE UNITS.
Developer shall provide for the Affordable Units in accordance with this Section.
4.01 Residential Use. Without Authority's prior written consent, which consent
may be given or withheld in Authority's sole and absolute discretion, none of the
Affordable Units in the Project will at any time be utilized on a transient basis or will ever
be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house,
nursing home, hospital, sanitarium, or trailer court or park, nor shall the Affordable Units
be used as a place of business except as may otherwise be allowed by applicable law.
4.02 Provision of Affordable Units. Developer shall make available, restrict
occupancy to, and rent the Affordable Units to Eligible Tenants at Affordable Rents
throughout the Affordability Period.
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4.03 Selection of Tenants. Developer, in consultation with Authority, shall be
responsible for the selection of tenants for the Affordable Units in compliance with all
lawful and reasonable criteria, as set forth in the Marketing Plan. Prior to selecting any
tenant for an Affordable Unit, Developer shall provide all information and documentation
received by Developer with respect to such prospective tenants to Authority for review
and approval. Developer shall not refuse to lease to (i) a holder of a certificate of family
participation under 24 CFR part 882 (Rental Certificate Program) or a rental voucher
under 24 CFR part 887 (Rental Voucher Program) or to the holder of a comparable
document evidencing participation in a Section 8 program or other tenant -based
assistance program, who is otherwise qualified to be a tenant in accordance with the
approved tenant selection criteria, or (ii) an applicant who would be qualified to be a
tenant in accordance with the approved tenant selection criteria but for a poor credit
rating resulting from a foreclosure of a mortgage on a single family home previously
owned by the applicant.
4.04 Occupancy By Eligible Tenant. An Affordable Unit occupied by an Eligible
Tenant who qualified as an Eligible Tenant at the commencement of the occupancy
shall be treated as occupied by an Eligible Tenant until a recertification of such Eligible
Tenant's income in accordance with Section 4.08 below demonstrates that such tenant
no longer qualifies as an Eligible Tenant at the applicable income level. An Affordable
Unit previously occupied by an Eligible Tenant and then vacated shall be considered
occupied by an Eligible Tenant until the Affordable Unit is reoccupied, provided
Developer uses its best efforts to re -lease the vacant Affordable Unit to an Eligible
Tenant. Any vacated Affordable Unit shall be held vacant until re -leased to an Eligible
Tenant. Developer shall take any or all of the following actions, as necessary, to locate
Eligible Tenants for the Project: (i) notification to the Authority of the available
Affordable Unit; and (ii) advertisement of the available Affordable Unit in a newspaper of
general circulation in the City of La Quinta.
4.05 Occupancy Restrictions. The maximum number of occupants that may
reside in an Affordable Unit shall be as follows: three (3) persons in a one (1) bedroom
Affordable Unit, and five (5) persons in a two (2) bedroom Affordable Unit.
4.06 Income Computation and Certification. Immediately prior to an Eligible
Tenant's occupancy of an Affordable Unit, Developer shall obtain an Income
Computation and Certification Form in the form attached hereto and incorporated herein
as Exhibit "C", or on a similar form required by any Additional Regulatory Agreement if
such form requires inclusion of the same information as required in Exhibit "C", from
each such Eligible Tenant dated no more than 90 days prior to the date of initial
occupancy in the Project by such Eligible Tenant. In addition, Developer shall provide
such further information as may be reasonably required in the future by Authority for
purposes of verifying a tenant's status as an Eligible Tenant. Developer shall use good
faith efforts to verify that the income provided by an applicant is accurate by taking the
following steps as a part of the verification process:(i) obtain three (3) pay stubs for the
most recent pay periods; (ii) obtain a written verification of income and employment
from the applicant's current employer; (iii) obtain an income verification form from the
Social Security Administration, California Department of Social Services, and/or
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California Employment Development Department if the applicant receives assistance
from any of said agencies; (iv) if an applicant is unemployed or did not file a tax return
for the previous calendar year, obtain other evidence and/or verification of such
applicant's total income received during the calendar year from any source, taxable or
nontaxable, or such other information as is satisfactory to Authority. Developer shall
maintain in its records each Income Computation and Certification Form obtained
pursuant to this section for a minimum of five (5) years.
4.07 Rental Priority. Subject to all applicable Governmental Requirements, and
any funding obtained by Developer to operate and/or develop the Project that has been
approved by Authority, during the term of this Regulatory Agreement, Developer shall
use its reasonable commercial efforts to lease the Affordable Units to credit -worthy
Eligible Tenants in the following order of priority: (a) Eligible Tenants who have been
displaced by the former La Quinta Redevelopment Agency, or who have been or will be
displaced by an activity of the Authority, or (b) Eligible Tenants who live and/or work in
the City of La Quinta. Should multiple tenants be equally eligible (as to income, credit
history, and other nondiscriminatory criteria) and qualified to rent a unit, Developer shall
rent available Affordable Units to Eligible Tenants on a first -come, first -served basis.
4.08 Recertification. Within sixty (60) days prior to the first anniversary date of
the occupancy of an Affordable Unit by an Eligible Tenant, and on each anniversary
date thereafter, Developer shall recertify the income of such Eligible Tenant by
obtaining a completed Income Recertification Form, in the form attached hereto and
incorporated herein as Exhibit "D", based upon the current income of each known
occupant of the Affordable Unit; provided, however, that if any Additional Regulatory
Agreement requires Developer to obtain a recertification form which requires inclusion
of the same information as required in Exhibit "D", then Developer shall not be deemed
to be in default hereunder if during the term of such Additional Regulatory Agreement
Developer obtains from each Eligible Tenant the recertification form required pursuant
to said Additional Regulatory Agreement.
If, after renting a Very Low Income Unit, the household income increases above
the income level permitted for the Very Low Income Unit, but meets the income level
permitted for a Low Income Unit, the household shall continue to be permitted to reside
in such Affordable Unit provided that Developer shall increase the rent for such
Affordable Unit to the rent level designated for a Low Income Unit, and shall restrict and
designate as a Very Low Income Unit, the next available Affordable Unit with the same
number of bedrooms that is not already designated hereunder as a Very Low Income
Unit.
If, after renting an Affordable Unit, the household income increases above the
income level permitted for a Low Income Unit, that household may not be permitted to
remain in the unit unless requiring such household to move will violate the Tax Credit
Rules or other applicable law. In such event, Developer shall notify Authority in writing
of such occurrence, and shall inform Authority of (1) its plans for removing the
household from the Affordable Unit, or (2) the specific rule in the Tax Credit Rules that
prohibits such action providing written evidence of the same.
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4.09 Certification of Continuing Program Compliance. During the term of this
Regulatory Agreement, on or before each March 1 following the date Authority issues a
Release of Construction Covenants for the Project, Developer shall annually advise
Authority of the occupancy of the Project during the preceding calendar year by
delivering a Certification of Continuing Program Compliance in the form attached hereto
and incorporated herein as Exhibit "E", stating (i) the Affordable Units of the Project
which have been rented to and are occupied by Eligible Tenants and (ii) that to the
knowledge of Developer either (a) no unremedied default has occurred under this
Regulatory Agreement, or (b) a default has occurred, in which event said certification
shall describe the nature of the default and set forth the measures being taken by
Developer to remedy such default.
4.10 Leases; Rental Agreements for Affordable Units. Developer shall submit a
standard lease form, which shall comply with the requirements of this Regulatory
Agreement, to Authority for its approval. Authority shall reasonably approve such lease
form upon finding that such lease form is consistent with this Regulatory Agreement.
Developer shall enter into a written lease, in the form approved by Authority, with each
tenant/tenant household of the Affordable Units. Developer shall not make any material
changes to such form of lease without obtaining Authority's prior written consent. Any
proposed increase in the monthly rent to be charged to an Eligible Household is hereby
deemed material and shall require Authority's written consent prior to imposition of the
same.
4.11 Reliance on Tenant Representations. Each tenant lease shall contain a
provision to the effect that Developer has relied on the income certification and
supporting information supplied by the tenant in determining qualification for occupancy
of the Affordable Unit, and that any material misstatement in such certification (whether
or not intentional) will be cause for immediate termination of such lease, subject to
applicable law.
4.12 Monitoring and Record Keeping. Representatives of Authority shall be
entitled to enter the Property during normal business hours, upon not less than twenty-
four (24) hours' notice, to monitor compliance with this Regulatory Agreement, to
inspect the records of the Property, and to conduct an independent audit or inspection
of such records. Developer agrees to cooperate with Authority in making the Property
and all Affordable Units thereon available for such inspection or audit. Developer
agrees to maintain records in a businesslike manner, and to maintain copies of original
tenant certifications for fifteen (15) years (or such longer period as required under the
Tax Credit Rules) and all other records pertaining to the Project for five (5) years.
4.13 Remedy For Violation of Rental Requirements.
(a) It shall constitute a default for Developer to charge or accept for
any Affordable Unit rent amounts in excess of the amount provided for in Section
4.02 of this Regulatory Agreement. In the event that Developer charges or
receives such higher rental amounts, Developer shall be required to reimburse
the tenant that occupied said Affordable Unit at the time the excess rent was
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received for the entire amount of such excess rent received, provided that such
tenant can be found following reasonable inquiry, and to pay to such tenant
interest on said excess amount, at the rate of six percent (6%) per annum, for the
period commencing on the date the first excess rent was received from said
tenant and ending on the date reimbursement is made to the tenant. For
purposes of this Section 4.13, "reasonable inquiry" shall include Developer's
review of information provided by the tenant as part of the tenant's application,
and forwarding information provided by the tenant, and Developer's reasonable
attempts to contact the tenant and any other persons listed in either of such
documents. If, after such reasonable inquiry, Developer is unable to locate the
tenant, Developer shall pay all of such amounts otherwise to be paid to the
tenant to Authority.
(b) Except as otherwise provided in this Regulatory Agreement, it shall
constitute a default for Developer to knowingly (or without inquiry and diligent
review as required herein) initially rent any Affordable Unit to a tenant who is not
an Eligible Tenant. In the event Developer violates this Section, in addition to
any other equitable remedy Authority shall have for such default, Developer, for
each separate violation, shall be required to pay to Authority an amount equal to
(i) the greater of (A) the total rent Developer received from such ineligible tenant,
or (B) the total rent Developer was entitled to receive for renting that Affordable
Unit, plus (ii) any relocation expenses incurred by Authority or the City as a result
of Developer having rented to such ineligible person. The terms of this Section
shall not apply if Developer rents to an ineligible person as a result of such
person's fraud or misrepresentation.
(c) It shall constitute a default for Developer to knowingly (or without
inquiry and diligent review as required herein) rent an Affordable Unit in violation
of the leasing preference requirements of Section 4.07 of this Regulatory
Agreement. In the event Developer violates this Section, in addition to any other
equitable remedy Authority shall have for such default, Developer, for each
separate violation, shall be required to pay Authority an amount equal to two (2)
months of rental charges.
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN THIS
SECTION 4.13 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASONABLE
APPROXIMATION OF THE ACTUAL DAMAGES THAT AUTHORITY WOULD
SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH IN THIS SECTION
4.13, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE
EFFECTIVE DATE OF REGULATORY AGREEMENT, INCLUDING THE
RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO
AUTHORITY AND ACCOMPLISHMENT OF AUTHORITY'S PURPOSE OF ASSISTING
IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT
REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF
OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS
SET FORTH IN THIS SECTION 4.13 SHALL BE THE SOLE MONETARY DAMAGES
REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 4.13, BUT NOTHING
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IN THIS SECTION 4.13 SHALL BE INTERPRETED TO LIMIT AUTHORITY'S REMEDY
FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD
AUTHORITY MAY DECLARE A DEFAULT UNDER THE TERMS OF EITHER OR
BOTH OF THE AUTHORITY NOTES, THE AGREEMENT, OR OTHER AGREEMENTS
ENTERED INTO BY AND BETWEEN AUTHORITY AND DEVELOPER. IN PLACING
ITS INITIALS AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY
SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE
AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL
WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES
PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS REGULATORY
AGREEMENT.
DEVELOPER'S INITIALS: AUTHORITY'S INITIALS:
4.14 Relationship to Additional Regulatory Agreements. Notwithstanding any
other provisions set forth in this Regulatory Agreement and subject to the following
sentence, to the extent that the provisions related to tenant selection, tenant income
levels and unit rent levels set forth in any Additional Regulatory Agreement are less
restrictive than those provisions set forth in this Section 4, then the provisions set forth
in this Section 4 shall govern and control. To the extent of any inconsistency between
this Regulatory Agreement and any Additional Regulatory Agreement regarding
Affordable Rent for the Affordable Units, the more restrictive agreement or covenants
shall prevail unless compliance with such more restrictive provisions would violate the
provisions of the less restrictive document.
Developer agrees to perform all of Developer's obligations under this Regulatory
Agreement, and under each of the Additional Regulatory Agreements. In the event
Authority is prevented by a final, non -appealable order of a court of competent
jurisdiction in a lawsuit involving the Project, or by an applicable and binding published
appellate opinion, or by a final, non -appealable order of a regulatory body having
jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this
Regulatory Agreement or in the Agreement, then in such event Authority shall be a
third -party beneficiary under the Additional Regulatory Agreements, and shall have full
authority to enforce any breach or default by Developer thereunder in the same manner
as though it were a breach or default hereunder. Without Authority's prior written
consent, which consent may be withheld in Authority's sole and absolute discretion,
Developer shall not consent to any amendment of or modification to any of the
Additional Regulatory Agreements which (i) shortens the term of the affordability
restrictions on the Affordable Units or (ii) modifies the affordability mix.
SECTION 5. COVENANT TO PAY TAXES AND ASSESSMENTS.
Developer shall pay prior to delinquency all ad valorem real estate taxes, special
taxes, assessments and special assessments levied against the Property, subject to
Developer's right to contest any such tax in good faith and any property tax exemption.
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SECTION 6. COVENANTS REGARDING MAINTENANCE.
Developer shall maintain the Property and all improvements thereon, including
lighting and signage, in good condition, reasonable wear and tear excepted, free of
debris, waste and graffiti, and in compliance with all applicable provisions of the City of
La Quinta Municipal Code, and in accordance with HUD's Housing Quality Standards.
Developer shall maintain the improvements and landscaping on the Property in
accordance with the "Maintenance Standards," as hereinafter defined. Such
Maintenance Standards shall apply to all buildings, signage, lighting, landscaping,
irrigation of landscaping, architectural elements identifying the Property and any and all
other improvements on the Property. To accomplish the maintenance, Developer shall
either staff or contract with and hire licensed and qualified personnel to perform the
maintenance work, including the provision of labor, equipment, materials, support
facilities, and any and all other items necessary to comply with the requirements of this
Regulatory Agreement.
Developer and its maintenance staff, contractors or subcontractors shall comply
with the following standards (the "Maintenance Standards"):
(a) The Property shall be maintained in good condition and in
accordance with the custom and practice generally applicable to comparable
high quality, well -managed apartment complexes, including but not limited to
painting and cleaning of all exterior surfaces and other exterior facades
comprising all private improvements and public improvements to the curbline.
(b) Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and
shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy,
natural appearance and safe road conditions and visibility, and irrigation
coverage; replacement, as needed, of all plant materials; control of weeds in all
planters, shrubs, lawns, ground covers, or other planted areas; and staking for
support of trees.
(c) Clean-up maintenance shall include, but not be limited to:
maintenance of all sidewalks, paths, and other paved areas in clean and
weed -free condition; maintenance of all such areas clear of dirt, mud, trash,
debris, or other matter which is unsafe or unsightly; removal of all trash, litter,
and other debris from improvements and landscaping prior to mowing; clearance
and cleaning of all areas maintained prior to the end of the day on which the
maintenance operations are performed to ensure that all cuttings, weeds, leaves,
and other debris are properly disposed of by maintenance workers.
Upon Authority's written notification to Developer of any maintenance deficiency,
Developer shall have thirty (30) days within which to correct, remedy or cure the
deficiency, or such longer period as is reasonably necessary to complete the cure,
provided Developer commences the correction, remedy, or cure within such thirty (30)
day period and diligently pursues such correction, remedy, or cure to completion.
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SECTION 7. COVENANTS REGARDING MANAGEMENT.
Developer shall provide for the management of the Project in accordance with
this Section.
7.01 Property Manager. Developer shall manage or cause the Project, and all
appurtenances thereto that are a part of the Project, to be managed in a prudent and
business -like manner, consistent with property management standards for other
comparable high quality, well -managed rental housing projects in Riverside County,
California. Developer may contract with a property management company or property
manager to operate and maintain the Project in accordance with the terms of this
Section ("Property Manager"); provided, however, the selection and hiring of the
Property Manager (and each successor or assignee) is and shall be subject to prior
written approval of Authority. Developer shall conduct due diligence and background
evaluation of any potential outside property manager or property management company
to evaluate experience, references, credit worthiness, and related qualifications as a
property manager. Any proposed property manager shall have prior experience with
projects and properties comparable to the Project and the references and credit record
of such manager/company shall be investigated (or caused to be investigated) by
Developer prior to submitting the name and qualifications of such proposed property
manager to Authority for review and approval. A complete and true copy of the results
of such background evaluation shall be provided to Authority. Approval of a Property
Manager by Authority shall not be unreasonably withheld or delayed and shall be in
Authority's reasonable discretion, and Authority shall use good faith efforts to respond
as promptly as practicable in order to facilitate effective and ongoing management of
the Project. Furthermore, the identity and retention of any approved Property Manager
shall not be changed without the prior written approval of Authority, which approval shall
not be unreasonably delayed, and shall be in Authority's reasonable discretion. The
selection by Developer of any new Property Manager also shall be subject to the
foregoing requirements. Authority hereby approves as the Property
Manager.
7.02 Management Plan. Prior to and as one of Authority's conditions to the
Property Closing under the Agreement, Developer shall have prepared and submitted to
the Executive Director for review and approval an updated and supplemented
management plan which includes a detailed plan and strategy for long-term marketing
for the Affordable Units, operation, maintenance, repair, and security of the Project,
method of selection of tenants, rules and regulations for tenants, and other rental
policies for the Affordable Units (the "Management Plan"). Subsequent to approval of
the Management Plan by the Executive Director, the ongoing management and
operation of the Project shall be in compliance with the approved Management Plan.
Developer and Property Manager may from time to time submit to the Executive
Director proposed amendments to the Management Plan, which are also subject to the
prior written approval of the Executive Director.
7.03 Social Services. Developer shall create a comprehensive social service
program that is targeted to the needs of the residents of the Project which shall include,
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in addition to all of the services listed in Developer's applications for Tax Credits, the
following services: - , and the availability of a
bona fide services coordinator or social worker to the tenants. Developer shall ensure
that all personnel providing or coordinating all social services shall be adequately
trained and counseled, including with respect to the appropriate means and methods of
communicating and interacting with residents. Any substantive change in the scope,
amount, or type of supportive services to be provided at the Property shall be subject to
prior reasonable approval of Authority. Authority shall respond to any such proposed
changes within thirty (30) days after submittal to Authority by Developer.
7.04 Gross Mismanagement. In the event of "Gross Mismanagement" (as that
term is defined below) of the Affordable Units or any part of the Project, Authority shall
have and retain the authority to direct and require any condition(s), acts, or inactions of
Gross Mismanagement to cease and/or be corrected immediately, and further to direct
and require the immediate removal of the Property Manager and replacement with a
new qualified and approved Property Manager, if such condition(s) is/are not ceased
and/or corrected after expiration of sixty (60) days from the date of Notice from
Authority. If such condition(s) acts, or inactions of gross mismanagement do persist
beyond such period, Authority shall have the sole and absolute right to immediately and
without further notice to Developer (or to Property Manager or any other person/entity)
replace the Property Manager with a new property manager of Authority's selection at
the sole cost and expense of Developer. If Developer takes steps to select a new
property manager that selection is subject to the requirements set forth above for
selection of a Property Manager.
For purposes of this Regulatory Agreement, the term "Gross Mismanagement"
shall mean management of any part of the Project in a manner which materially violates
the terms and/or intention of this Regulatory Agreement to operate a high quality, well -
managed residential complex, and shall include, but is not limited to, any one or more of
the following:
(a) knowingly leasing Affordable Units to tenants who exceed the
prescribed income levels;
(b) knowingly allowing the tenants of Affordable Units to exceed the
prescribed occupancy levels without taking immediate action to stop such
overcrowding;
(c) underfunding Capital Replacement or Operating Reserve accounts,
unless funds are not available to deposit in such accounts;
(d) failing to timely maintain the Project in accordance with the
Management Plan and the manner prescribed herein;
(e) failing to submit timely and/or adequate annual reports to Authority
as required herein;
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(f) committing fraud or embezzlement with respect to Project funds,
including without limitation funds in the reserve accounts;
(g) failing to reasonably cooperate with the Riverside County Sheriff's
Department or other local law enforcement agency(ies) with jurisdiction over the
Project, in maintaining a crime -free environment within the Project;
(h) failing to reasonably cooperate with the Fire District or other local
public safety agency(ies) with jurisdiction over the Project, in maintaining a safe
environment within the Project;
(i) failing to reasonably cooperate with the La Quinta Planning &
Building Department, including the Code Enforcement Division, or other local
health and safety enforcement agency(ies) with jurisdiction over the Property
and/or Project, in maintaining a safe environment within the Project; and
Q) spending funds from the Capital Reserve account(s) for items that
are not defined as capital costs under the standards imposed by generally
accepted accounting principles (GAAP) (and/or, as applicable, generally
accepted auditing principles), except as required by any lender or a Project -
related loan that has been approved by Authority, the Investor, or TCAC.
Notwithstanding the requirements of the Property Manager to correct any
condition of Gross Mismanagement as described above, Developer is obligated and
shall use its best efforts to correct any defects in property management or operations at
the earliest feasible time and, if necessary, to replace the Property Manager as provided
above. Developer shall include advisement and provisions of the foregoing
requirements and requirements of this Regulatory Agreement within any contract
between Developer and its Property Manager.
7.05 Code Enforcement. Developer acknowledges and agrees that the City
and its employees and authorized agents shall have the right to conduct code
compliance and/or code enforcement inspections of the Project and the individual
Affordable Units, both exterior and interior, at reasonable times and upon reasonable
notice (not less than 48 hours prior notice) to Developer and/or an individual tenant. If
such notice is provided by City or its representative(s) to Developer, then Developer (or
its Property Manager) shall immediately and directly advise tenants of such upcoming
inspection and cause access to the area(s) and/or units to be made available and open
for inspection. Developer shall include express advisement of such inspection rights
within the lease/rental agreements for each Affordable Unit in order for each and every
tenant and tenant household to be aware of this inspection right.
7.06 Drug Free Covenant. Developer shall use its best efforts to maintain a
drug free environment on the Property. Developer covenants to Authority that
Developer shall use its best efforts to ensure that all persons working or residing on the
Property shall not unlawfully manufacture, distribute, dispense, possess or use
controlled substances, as said term is defined in 21 United States Code Section 812
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and California Health and Safety Code Section 11007 (or successor statutes), including
marijuana, heroin, cocaine, and amphetamines on the Property.
SECTION 8. COVENANTS REGARDING NONDISCRIMINATION.
Developer covenants by and for itself and any successors in interest that there
shall be no discrimination against or segregation of any person, or group of persons on
any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1)
of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in
the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
Property, or any part thereof, nor shall Developer, or any person claiming under or
through him or her, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use, or occupancy of
tenants, lessees, subtenants, sublessees, or vendees of the Property, or any part
thereof. The foregoing covenants shall run with the land.
Developer agrees for itself and any successor in interest that Developer shall
refrain from restricting the rental, sale, or lease of any portion of the Property, or
contracts relating to the Property, on the basis of race, color, creed, religion, sex, marital
status, ancestry, or national origin of any person. All such deeds, leases, or contracts
shall contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(a) In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases
are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of
the premises herein conveyed, nor shall the grantee or any person claiming
under or through him or her, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number,
use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land."
(b) In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through him or her, and this lease is made and accepted upon
and subject to the following conditions: "That there shall be no discrimination
against or segregation of any person or group of persons, on account of any
basis listed in subdivision (a) or (d) of Section 12955 of the Government Code,
as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
Government Code, in the leasing, subleasing, transferring, use, occupancy,
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tenure, or enjoyment of the premises herein leased nor shall the lessee himself
or herself, or any person claiming under or through him or her, establish or permit
any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use, or occupancy, of tenants, lessees,
sublessees, subtenants, or vendees in the premises herein leased."
(c) In contracts pertaining to the realty: "There shall be no
discrimination against or segregation of, any person or group of persons on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer,
use, occupancy, tenure, or enjoyment of the premises which are the subject of
this agreement, nor shall the grantee or any person claiming under or through
him or her, establish or permit any practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy
of tenants, lessees, subtenants, sublessees, or vendees in the premises herein
conveyed. The foregoing covenants shall run with the land."
The covenants established in this Regulatory Agreement shall, without regard to
technical classification and designation, be binding for the benefit and in favor of
Authority, its successors and assigns, the City and any successor in interest to the
Property, together with any property acquired by Developer pursuant to this Regulatory
Agreement, or any part thereof. The covenants against discrimination shall remain in
effect in perpetuity.
SECTION 9. OPERATING BUDGET OR ANNUAL BUDGET; ANNUAL REPORTS
9.01 Operating Budget. Developer shall submit to Authority on or before
December 1 of each year during the Affordability Period an operating budget for the
Project ("Operating Budget" or "Annual Budget"), which budget, including the format
thereof, shall be subject to the written approval of the Executive Director or designee,
which approval shall not be unreasonably withheld or conditioned so long as such
budget is not inconsistent with this Regulatory Agreement. The Executive Director's
discretion in review and approval of each proposed annual Operating Budget or Annual
Budget shall include, without limitation, authority to review individual categories, line
items, and accounts, such as the following: extent, type, and amount for social services
at or associated with the Project; existing balance(s) in and proposed deposits to the
Capital Replacement Reserve to evaluate shortfalls and/or cumulative
unexpended/unencumbered deposits (provided that required annual deposits thereto
are not required to exceed $ /per unit unless required by any other lender or the
Investor); reasonableness and conformity to prevailing market rates in Riverside County
and rates and fees for goods and services to be provided by Developer or any Affiliate
thereof. In the event Developer requires an amendment to an approved Annual Budget
during an applicable year of the Affordability Period, then Developer shall submit a
written request to the Executive Director explaining the requested amendment and
reasons therefor; the Executive Director shall reasonably review and approve (or
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disapprove) each request for an amendment to an approved Annual Budget. The
Executive Director shall communicate to Developer his or her reasonable approval or
disapproval of a proposed annual Operating Budget or Annual Budget within thirty (30)
days after receipt thereof; as to each amendment, the Executive Developer shall
communicate to Developer his or her reasonable approval or disapproval within fifteen
(15) days after receipt of a complete submittal requesting an amendment to an
approved Annual Budget. In the event the Executive Director fails to approve a
proposed annual Operating Budget or Annual Budget within thirty (30) days after receipt
thereof, Developer may operate the Project in accordance with such proposed annual
Operating Budget or Annual Budget until the Executive Director notifies Developer that
such proposed annual Operating Budget or Annual Budget is not approved; provided,
however, that in such case any expenditure made by Developer prior to the Executive
Director's notification that the proposed annual Operating Budget or Annual Budget is
not approved shall be deemed an approved expenditure.
9.02 Annual Reports. Developer covenants and agrees to submit to Authority
an annual report (the "Annual Report"), which shall include the information required by
California Health & Safety Code Section 33418.The Annual Report shall include for
each Affordable Unit the rental rate and the income and family size of the occupants.
The Developer shall submit the Annual Report on or before February 15 of the year
following the year covered by the Annual Report. The Developer shall provide for the
submission of household information and certification in its leases with tenants.
SECTION 10. COVENANTS REGARDING CAPITAL REPLACEMENT RESERVE.
Promptly upon the issuance of the Certificate of Occupancy, Developer shall
establish the Capital Replacement Reserve. Funds in the Capital Replacement
Reserve shall be used only for capital repairs, improvements, and replacements to the
Project fixtures and equipment which are normally capitalized under generally accepted
accounting principles or as otherwise required by any lender of a Project -related loan
that has been approved by Authority, the Investor, or TCAC. The non -availability of
funds in the Capital Replacement Reserve does not in any manner relieve or lessen
Developer's obligation to undertake any and all necessary capital repairs,
improvements, or replacements and to continue to maintain the Project in the manner
prescribed herein. Not less than once per year, Developer, at its expense, shall submit
to Authority an accounting for the Capital Replacement Reserve. Unless required by
any lender of a Project -related loan that has been approved by Authority, the Investor,
or TCAC, capital repairs to and replacement of the Project shall include only those items
with a long useful life, including, without limitation, the following: carpet and drape
replacement; appliance replacement; exterior painting, including exterior trim; hot water
heater replacement; plumbing fixtures replacement, including tubs and showers, toilets,
lavatories, sinks, faucets; air conditioning and heating replacement; asphalt repair and
replacement, and seal coating; roofing repair and replacement; landscape tree
replacement; irrigation pipe and controls replacement; sewer line replacement; water
line replacement; gas line pipe replacement; lighting fixture replacement; elevator
replacement and upgrade work; miscellaneous motors and blowers; common area
furniture replacement; and common area repainting.
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SECTION 11. COVENANTS REGARDING OPERATING RESERVE.
Promptly upon the issuance of the Certificate of Occupancy, Developer shall
establish the Operating Reserve. The Operating Reserve shall be used to cover
shortfalls between Annual Project Revenue and actual operating expenses, but shall in
no event be used to pay for capital items or capital costs properly payable from the
Capital Replacement Reserve. Developer shall, not less than once per every twelve
(12) months, submit to Authority evidence reasonably satisfactory to Authority of
compliance herewith.
SECTION 12. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF
THIS REGULATORY AGREEMENT AFTER COMPLETION OF
CONSTRUCTION.
Authority is deemed the beneficiary of the terms and provisions of this Regulatory
Agreement and of the covenants running with the land, without regard to whether
Authority has been, remains or is an owner of any land or interest therein in the
Property or in the Project. Authority shall have the right, if this Regulatory Agreement or
any of the covenants herein are breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce
the curing of such breaches to which it or any other beneficiaries of this Regulatory
Agreement and covenants may be entitled. The City is hereby deemed to be a third
party beneficiary of this Regulatory Agreement and the covenants contained herein with
the right, but not the obligation, to enforce the terms hereof. Except as provided in the
following sentence, the covenants contained in this Regulatory Agreement shall remain
in effect until the expiration of the Affordability Period. The covenants regarding
discrimination as set forth in Section 8 shall remain in effect in perpetuity.
SECTION 13. COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS.
13.01 Compliance With Laws. Developer shall comply with (i) all Governmental
Requirements applicable to the Project and/or Property, and (ii) all rules and regulations
of any assessment district of the City with jurisdiction over the Property.
13.02 Indemnity. Developer shall save, protect, defend, indemnify and hold
harmless Authority and the City and their respective officers, officials, directors,
members, employees, agents, and representatives from and against any and all
liabilities, suits, actions, claims, demands, penalties, damages (including, without
limitation, penalties, fines, and monetary sanctions), losses, costs or expenses
(including, without limitation, consultants' fees, investigation and laboratory fees,
reasonable attorneys' fees, and remedial and response costs) (the foregoing are
hereinafter collectively referred to as "Liabilities") which may now or in the future be
incurred or suffered by Authority or City or their respective officers, officials, directors,
members, employees, agents, or representatives by reason of, resulting from, in
connection with, or existing in any manner whatsoever as a direct or indirect result of
(i) Developer's placement on or under the Property of any Hazardous Materials or
Hazardous Materials Contamination, (ii) the escape, seepage, leakage, spillage,
discharge, emission or release from the Property of any Hazardous Materials or
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Hazardous Materials Contamination that first accrues and occurs after the Property
Closing Date, or (iii) any Liabilities incurred under any Governmental Requirements
relating to the acts described in the foregoing clauses (i) and (ii). Notwithstanding the
foregoing, Developer shall have no liability or indemnification obligation resulting from
any Hazardous Materials or Hazardous Materials Contamination that occurred or first
accrued prior to the Property Closing Date (any of the foregoing, "Preexisting
Contamination").
13.03 Duty to Prevent Hazardous Material Contamination. Developer shall take
commercially reasonable action to prevent the release of any Hazardous Materials into
the environment. Such precautions shall include compliance with all Governmental
Requirements with respect to Hazardous Materials. In addition, Developer shall install
and utilize such equipment and implement and adhere to such procedures as are
consistent with the standards generally applied by apartment complexes in Riverside
County, California as respects the disclosure, storage, use, removal, and disposal of
Hazardous Materials.
13.04 Obligation of Developer to Remediate Premises. Notwithstanding the
obligation of Developer to indemnify Authority, City, and their respective officers,
officials, members, employees, agents, and representatives pursuant to Section 13.02,
and provided no Hazardous Materials exist on the Property as a result of Authority's
actions or any Preexisting Contamination, Developer shall, at its sole cost and expense,
promptly take (i) all actions required by any federal, state, regional, or local
governmental agency or political subdivision or any Governmental Requirements and
(ii) all actions necessary to make full economic use of the Property for the purposes
contemplated by this Regulatory Agreement and the Agreement, which requirements or
necessity arise from the presence upon, about or beneath the Property, of any
Hazardous Materials or Hazardous Materials Contamination. Such actions shall
include, but not be limited to, the investigation of the environmental condition of the
Property, the preparation of any feasibility studies or reports and the performance of any
cleanup, remedial, removal or restoration work.
13.05 Environmental Inquiries. Developer, when it has received any notices of
violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease
and desist orders related to Hazardous Materials or Hazardous Materials
Contamination, or when Developer is required to report to any governmental agency
any violation or potential violation of any Governmental Requirement pertaining to
Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify
the Executive Director, and provide to him/her a copy or copies, of the environmental
permits, disclosures, applications, entitlements, or inquiries relating to the Property, the
notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders,
cease and desist orders, reports filed pursuant to self -reporting requirements, and
reports filed or applications made pursuant to any Governmental Requirement relating
to Hazardous Materials and underground tanks, and Developer shall report to the
Executive Director, as soon as possible after each incident, any unusual, potentially
important incidents.
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In the event of a responsible release of any Hazardous Materials into the
environment, Developer shall, as soon as possible after it becomes aware of the
release, furnish to the Executive Director a copy of any and all reports relating thereto
and copies of all correspondence with governmental agencies relating to the release.
Upon request of the Executive Director, Developer shall furnish to the Executive
Director a copy or copies of any and all other environmental entitlements or inquiries
relating to or affecting the Property including, but not limited to, all permit applications,
permits and reports including, without limitation, those reports and other matters which
may be characterized as confidential.
SECTION 14. INSURANCE REQUIREMENTS.
14.01 Commercial General Automobile Liability; Worker's Compensation.
Commencing on the Property Closing Date and continuing throughout the term of this
Agreement, Developer shall procure and maintain, at its sole cost and expense, in a
form and content satisfactory to the Executive Director, the following policies of
insurance:
(a) Commercial General Liability Insurance covering bodily injury,
property damage, personal injury and advertising injury written on a per -
occurrence and not a claims -made basis containing the following minimum
limits:(i) general aggregate limit of Three Million Dollars ($3,000,000.00);
(ii) products -completed operations aggregate limit of Three Million Dollars
($3,000,000.00); (iii) personal and advertising injury limit of One Million Dollars
($1,000,000.00); and (iv) each occurrence limit of One Million Dollars
($1,000,000.00).Said policy shall include the following coverages:(i) blanket
contractual liability (specifically covering the indemnification clause contained
below); (ii) products and completed operations; (iii) independent contractors;
(iv) Owner's broad form property damage; (v) severability of interest; (vi) cross
liability; and (vii) property damage liability arising out of the so-called "XCU"
hazards (explosion, collapse and underground hazards). The policy shall be
endorsed to have the general aggregate apply to this Project only.
(b) A policy of worker's compensation insurance in such amount as will
fully comply with the laws of the State of California and which shall indemnify,
insure, and provide legal defense for Authority and Developer against any loss,
claim or damage arising from any injuries or occupational diseases occurring to
any worker employed by or any persons retained by Developer in the course of
carrying out the work or services contemplated in this Regulatory Agreement,
and Employers Liability Insurance in an amount not less than One Million Dollars
($1,000,000) combined single limit for all damages arising from each accident or
occupational disease.
(c) A policy of comprehensive automobile liability insurance written on
a per -occurrence basis in an amount not less than Two Million Dollars
($2,000,000.00) combined single limit covering all owned, non -owned, leased
and hired vehicles used in connection with the Work.
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14.02 Builder's Risk. Commencing on the Property Closing Date and continuing
until Authority issues a Release of Construction Covenants for the Project, Developer
shall procure and maintain, at its sole cost and expense, in a form and content
satisfactory to Authority's Executive Director, Builder's Risk (course of construction)
insurance coverage in an amount equal to the full cost of the hard construction costs of
the Project. Such insurance shall cover, at a minimum: all work, materials, and
equipment to be incorporated into the Project; the Project during construction; the
completed Project until such time as the City issues a final certificate of occupancy for
the Project, and storage and transportation risks. Such insurance shall protect/insure
the interests of Developer/owner and all of Developer's contractor(s), and
subcontractors, as each of their interests may appear. If such insurance includes an
exclusion for "design error," such exclusion shall only be for the object or portion which
failed. Authority shall be a loss payee under such policy or policies and such insurance
shall contain a replacement cost endorsement.
14.03 Property; Business Interruption; Boiler and Machinery Insurance.
Commencing on the date Authority issues a Release of Construction Covenants for the
Project and continuing throughout the Affordability Term, Developer shall procure and
maintain, at its sole cost and expense, in a form and content satisfactory to Authority's
Executive Director, the following insurance:
(a) Insurance against fire, extended coverage, vandalism, and
malicious mischief, and such other additional perils, hazards, and risks as now
are or may be included in the standard "all risk" form in general use in Riverside
County, California, with the standard form fire insurance coverage in an amount
equal to full actual replacement cost thereof, as the same may change from time
to time. The above insurance policy or policies shall include coverage for
earthquakes to the extent generally and commercially available at commercially
reasonable rates, if such insurance is generally obtained for affordable Projects
in the county of Riverside. Authority shall be a loss payee under such policy or
policies and such insurance shall contain a replacement cost endorsement.
(b) Business interruption and extra expense insurance to protect
Authority and Developer covering loss of revenues and/or extra expense incurred
by reason of the total or partial suspension or delay of, or interruption in, the
operation of the Project caused by loss or damage to, or destruction of, any part
of the insurable real property structures or equipment as a result of the perils
insured against under the all risk physical damage insurance, covering a period
of suspension, delay or interruption of at least twelve (12) months, in an amount
not less than the amount required to cover such business interruption and/or
extra expense loss during such period.
(c) Boiler and machinery insurance in the aggregate amount of the full
replacement value of the equipment typically covered by such insurance.
14.04 Contract Insurance Requirements. Developer shall cause any general
contractor with whom it has contracted for the performance of work on the Property to
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secure, prior to commencing any activities hereunder and maintain insurance that
satisfies all of the requirements of this Section 14.
14.05 Additional Requirements. The following additional requirements shall
apply to all of the above policies of insurance:
(a) All of the above policies of insurance shall be primary insurance
and, except the Worker's Compensation, Employer Liability insurance, and
automobile liability insurance, shall name Authority, City and their respective
officers, officials, directors, members, employees, agents, and representatives
(collectively, "Authority and City and Authority and City Personnel") as
additional insureds on an ISO Form CG 20:10 (current version) or substantially
similar form and not an ISO Form CG 20:09. The insurer shall waive all rights of
subrogation and contribution it may have against Authority and City and Authority
and City Personnel and their respective insurers. All of said policies of insurance
shall provide that said insurance may not be amended or cancelled without
providing thirty (30) days' prior written notice to Authority. In the event any of
said policies of insurance are cancelled, Developer shall, prior to the cancellation
date, submit new evidence of insurance in conformance with this Section to the
Executive Director. Not later than the Effective, Developer shall provide the
Executive Director with Certificates of Insurance or appropriate insurance binders
evidencing the above insurance coverages and said Certificates of Insurance or
binders shall be subject to the reasonable approval of the Executive Director.
(b) The policies of insurance required by this Regulatory Agreement
shall be satisfactory only if issued by companies of recognized good standing
authorized to do business in California, rated "A-" or better in the most recent
edition of Best Rating Guide, The Key Rating Guide or in the Federal Register,
and only if they are of a financial category Class VII or better, unless such
requirements are waived by the Executive Director due to unique circumstances.
(c) The Executive Director is hereby authorized to reduce or otherwise
modify Developer's insurance requirements set forth herein in the event they
collectively determine, in their sole and absolute discretion, that such reduction or
modification is consistent with reasonable commercial practices.
(d) The Developer agrees that the provisions of this Section shall not
be construed as limiting in any way Authority's right to indemnification or the
extent to which Developer may be held responsible for the payment of damages
to any persons or property resulting from Developer's activities or the activities of
any person or persons for which Developer is otherwise responsible.
14.06 Indemnification. Developer shall defend (by counsel satisfactory to
Authority), assume all responsibility for and hold Authority and the City, and their
respective officers, officials, directors, members, agents, representatives, and
employees, harmless from all claims or suits for, and damages to, property and injuries
to persons, including accidental death (including expert witness fees, attorneys fees and
costs), which may be caused by the activities or performance of Developer or any of
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Developer's employees, agents, representatives, contractors, or subcontractors under
(i) this Regulatory Agreement, (ii) a claim, demand or cause of action that any person
has or asserts against Developer; (iii) any act or omission of Developer, any contractor,
subcontractor or material supplier, engineer, architect or other person with respect to
the Property; or (iv) the ownership, occupancy or use of the Property by Developer,
whether such damage shall accrue or be discovered before or after termination of this
Regulatory Agreement. Notwithstanding the foregoing, Developer shall have no
obligation under this section 14.06 to indemnify, defend or hold harmless Authority, the
City, or their respective officers, officials, directors, members, agents, representatives,
or employees to the extent the claim, damage or injury results from the gross
negligence or willful misconduct of any of the foregoing indemnified parties. The
obligations and indemnifications in this Section 14.06 shall constitute covenants running
with the land.
SECTION 15. ASSIGNMENT.
15.01 Generally Prohibited. Except as otherwise expressly provided to the
contrary in this Regulatory Agreement or the Agreement, Developer shall not assign any
of its rights or delegate any of its duties under this Regulatory Agreement, nor shall any
changes occur with respect to the ownership and/or control of Developer, including,
without limitation, stock transfers, sales of issuances, or transfers, sales or issuances of
membership or ownership interests, or statutory conversions, without the prior written
consent of the Executive Director, which consent may be withheld in his or her sole and
absolute discretion. Any such assignment or delegation without such consent shall, at
Authority's option, be void. Notwithstanding the foregoing, however, (i) Developer may
admit Developer's Tax Credit investor as a Tax Credit limited partner without obtaining
any consent, and such Tax Credit investor may assign its interests as a Tax Credit
limited partner to a subsequent reputable institutional investor without any consent;
(ii) the Tax Credit investor may remove the general partner for a default under the
Partnership Agreement, provided the replacement general partner is reasonably
acceptable to Authority; and (iii) Developer may grant to the general partner an option
and right of first refusal to purchase the Project or the Investor's limited partnership
interest, and the general partner, or its affiliate, may exercise such option or right of first
refusal to acquire the Project or the limited partnership interest . For purposes of this
Section 15.01, if the Tax Credit investor transfers to an entity in which the Tax Credit
investor or an Affiliate of the Tax Credit investor is the general partner or managing
member such transferee entity shall be deemed to be a "reputable institutional investor."
This Section 15.01 shall not be applicable to the leasing of Affordable Units to Eligible
Tenants in accordance with this Regulatory Agreement.
15.02 Release of Developer. Upon any such assignment made in compliance
with Section 15.01 above which is evidenced by a written assignment and assumption
agreement in a form approved by Authority's counsel, Developer shall be released from
any liability under this Regulatory Agreement arising from and after the date of such
assignment.
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SECTION 16. DEFAULTS AND REMEDIES.
16.01 Default. Subject to the extensions of time set forth in Section 17.02 of this
Regulatory Agreement, failure by either Party to perform any action or covenant
required by this Regulatory Agreement or under the Agreement within the time periods
provided herein and therein following Notice and failure to cure as described hereafter,
constitutes a "Default" under this Regulatory Agreement. A Party claiming a Default
shall give written Notice of Default to the other Party specifying such Default. Except as
otherwise expressly provided in this Regulatory Agreement or in the Agreement, the
claimant shall not institute any proceeding against any other Party, and the other Party
shall not be in Default if such party within thirty (30) days from receipt of such Notice,
cures, corrects or remedies such failure or delay, or if such Default cannot reasonably
be cured within thirty (30) days, such Party commences such cure within thirty (30) days
of receipt of such Notice and thereafter diligently prosecutes such cure to completion.
The Investor limited partner of Developer shall have the notice and cure rights set forth
in the Deed of Trust.
16.02 Remedies; Institution of Legal Actions. Developer's sole remedy for
Authority's breach of this Regulatory Agreement shall be to institute an action at law or
equity to seek specific performance of the terms of this Regulatory Agreement.
Developer shall not be entitled to recover damages for any Default of Authority
hereunder. Authority shall be entitled to seek any remedy available at law and in equity
for Developer's breach of this Regulatory Agreement. All legal actions must be
instituted in the Superior Court of the County of Riverside, State of California, or in the
United States District Court for District of California in which Riverside County is
located.
16.03 Acceptance of Service of Process. In the event that any legal action is
commenced by Developer against Authority, service of process on Authority shall be
made by personal service upon the Executive Director or in such other manner as may
be provided by law. In the event that any legal action is commenced by Authority
against Developer, service of process on Developer shall be made in such manner as
may be provided by law.
16.04 Rights and Remedies Are Cumulative. Except as otherwise expressly
stated in this Regulatory Agreement, the rights and remedies of the Parties are
cumulative, and the exercise by either Party of one or more of such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same Default or any other Default by the other Party.
16.05 Inaction Not a Waiver of Default. Any failures or delays by either Party in
asserting any of its rights and remedies as to any Default shall not operate as a waiver
of any Default or of any such rights or remedies, or deprive either such Party of its right
to institute and maintain any actions or proceedings which it may deem necessary to
protect, assert or enforce any such rights or remedies.
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16.06 Applicable Law. The internal laws of the State of California shall govern
the interpretation and enforcement of this Regulatory Agreement, without regard to
conflict of law principles.
SECTION 17. GENERAL PROVISIONS.
17.01 Notices, Demands and Communications Between the Parties. Any
notices, requests, demands, documents, approvals or disapprovals given or sent under
this Regulatory Agreement from one Party to another (collectively, "Notices") may be
personally delivered, delivered by reputable courier that provides a receipt with the date
and time of delivery, or deposited with the United States Postal Service for mailing,
postage prepaid, to the address of the other Party as stated in this Section, and shall be
deemed to have been given or sent at the time of personal delivery, delivery by courier,
or, if mailed, on the second day following the date of deposit in the course of
transmission with the United States Postal Service. Notices shall be sent as follows:
If to Authority: La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Phone No.:
Facsimile No.:
Attention: Executive Director
With copies to: Rutan & Tucker, LLP
611 Anton, Suite 1400
Costa Mesa, CA92626
Phone No.: 714-641-5100
Facsimile No.: 714-546-9035
Attention: William H. Ihrke, Esq.
If to Developer: Phone No.:
Facsimile No.:
Attention:
With a copy to:
17.02 Enforced Delay; Extension of Times of Performance. In addition to
specific provisions of this Regulatory Agreement, performance by either Party
hereunder shall not be deemed to be in Default, and all performance and other dates
specified in this Regulatory Agreement shall be extended, where delays or Defaults are
due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties;
acts of God; acts of the public enemy; epidemics; quarantine; restrictions; freight
embargoes; lack of transportation; governmental restrictions or priority; litigation;
unusually severe weather; inability to secure necessary labor, materials or tools; delays
of any contractor, subcontractor or supplier; acts or omissions of the other Party; acts or
failures to act of the City or any other public or governmental agency or entity (other
than the acts or failures to act of Authority which shall not excuse performance by
Authority); or any other causes beyond the control or without the fault of the Party
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claiming an extension of time to perform. Notwithstanding anything to the contrary in
this Regulatory Agreement, an extension of time for any such cause shall be for the
period of the enforced delay and shall commence to run from the time of the
commencement of the cause, if notice by the Party claiming such extension is sent to
the other party within ten (10) days of the commencement of the cause. Times of
performance under this Regulatory Agreement may also be extended in writing by the
mutual agreement of Authority and Developer. Notwithstanding any provision of this
Regulatory Agreement to the contrary, the lack of funding to complete the construction
of the Project shall not constitute grounds of enforced delay pursuant to this Section.
17.03 Relationship Between Authority and Developer. It is hereby
acknowledged by Developer that the relationship between Authority and Developer is
not that of a partnership or joint venture and that Authority and Developer shall not be
deemed or construed for any purpose to be the agent of the other. Accordingly,
Authority shall have no rights, powers, duties or obligations with respect to the
development, operation, maintenance or management of the Project. Developer agrees
to indemnify, hold harmless and defend Authority from any claim made against Authority
arising from a claimed relationship of partnership or joint venture between Authority and
Developer with respect to the development, operation, maintenance or management of
the Property or the Project, except to the extent occasioned by the active negligence or
willful misconduct of Authority or its designated agents or employees.
17.04 No Third Party Rights. With the exception of the City, the Parties intend
that no rights nor remedies be granted to any third party as a beneficiary of this
Regulatory Agreement or of any covenant, duty, obligation or undertaking established
herein.
17.05 Authority Approvals and Actions. Whenever a reference is made herein to
an action or approval to be undertaken by Authority, the Executive Director is authorized
to act on behalf of Authority unless this Regulatory Agreement specifically provides
otherwise or the context should require otherwise.
17.06 Counterparts. This Regulatory Agreement may be signed in multiple
counterparts which, when signed by all Parties, shall constitute a binding agreement.
17.07 Integration. This Regulatory Agreement contains the entire understanding
between the parties relating to the transaction contemplated by this Regulatory
Agreement. Each Party is entering this Regulatory Agreement based solely upon the
representations set forth herein and upon each Party's own independent investigation of
any and all facts such party deems material. This Regulatory Agreement constitutes the
entire understanding and agreement of the Parties, notwithstanding any previous
negotiations or agreements between the parties or their predecessors in interest with
respect to all or any part of the subject matter hereof.
17.08 Real Estate Brokerage Commission. Authority and Developer each
represent and warrant to the other that no broker or finder is entitled to any commission
or finder's fee in connection with this transaction, and each agrees to defend and hold
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harmless the other from any claim to any such commission or fee resulting from any
action on its part.
17.09 Attorneys' Fees. In any action between the Parties to interpret, enforce,
reform, modify, rescind, or otherwise in connection with, any of the terms or provisions
of this Regulatory Agreement, the prevailing Party in the action shall be entitled, in
addition to damages, injunctive relief, or any other relief to which it might be entitled,
reasonable costs, expenses including, without limitation, litigation costs, reasonable
attorneys' fees, and expert witness fees.
17.10 Titles and Captions. Titles and captions are for convenience of reference
only and do not define, describe, or limit the scope or the intent of this Regulatory
Agreement or of any of its terms. Reference to section numbers are to sections in this
Regulatory Agreement, unless expressly stated otherwise.
17.11 Interpretation. As used in this Regulatory Agreement, masculine,
feminine, or neuter gender and the singular or plural number shall each be deemed to
include the others where and when the context so dictates. The word "including" shall
be construed as if followed by the words "without limitation." This Regulatory
Agreement shall be interpreted as though prepared jointly by both Parties.
17.12 No Waiver. All waivers of the provisions of this Regulatory Agreement
must be in writing by the appropriate authorities of Developer and Authority. A waiver
by either Party of a breach of any of the covenants, conditions or agreements under this
Regulatory Agreement to be performed by the other Party shall not be construed as a
waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions of this Regulatory Agreement.
17.13 Modifications. Any alteration, change or modification of or to this
Regulatory Agreement, in order to become effective, shall be made in writing and in
each instance signed on behalf of each Party.
17.14 Severability. If any term, provision, condition or covenant of this
Regulatory Agreement or its application to any party or circumstances shall be held, to
any extent, invalid or unenforceable, the remainder of this Regulatory Agreement, or the
application of the 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, and shall be valid and enforceable to the fullest extent permitted by law.
17.15 Computation of Time. The time in which any act is to be done under this
Regulatory Agreement is computed by excluding the first day (such as the day escrow
opens), and including the last day, unless the last day is a holiday or Saturday or
Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays
as specified in Section 6700 and 6701 of the California Government Code. If any act is
to be done by a particular time during a day, that time shall be Pacific Time Zone time.
17.16 Legal Advice. Each Party represents and warrants to the other the
following: they have carefully read this Regulatory Agreement, and in signing this
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Regulatory Agreement, they do so with full knowledge of any right which they may have;
they have received independent legal advice from their respective legal counsel as to
the matters set forth in this Regulatory Agreement, or have knowingly chosen not to
consult legal counsel as to the matters set forth in this Regulatory Agreement; and, they
have freely signed this Regulatory Agreement without any reliance upon any
agreement, promise, statement or representation by or on behalf of the other Party, or
their respective agents, employees, or attorneys, except as specifically set forth in this
Regulatory Agreement, and without duress or coercion, whether economic or otherwise.
17.17 Time of Essence. Time is expressly made of the essence with respect to
the performance by Authority and Developer of each and every obligation and condition
of this Regulatory Agreement.
17.18 Cooperation. Each Party agrees to cooperate with the other in this
transaction and, in that regard, to sign any and all documents which may be reasonably
necessary, helpful, or appropriate to carry out the purposes and intent of this Regulatory
Agreement including, but not limited to, releases or additional agreements.
17.19 Non -Liability of Officials and Employees of Authority. No member, director,
officer, employee, or volunteer of Authority shall be personally liable to Developer, or
any successor in interest, in the event of any Default or breach by Authority or for any
amount which may become due to Developer or its successors, or on any obligations
under the terms of this Regulatory Agreement. Developer hereby waives and releases
any claim it may have against the members, directors, officers, employees, and
volunteers of Authority with respect to any Default or breach by Authority or for any
amount which may become due to Developer or its successors, or on any obligations
under the terms of this Regulatory Agreement. Developer makes such release with full
knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder
to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil
Code provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him
or her must have materially affected his or her settlement
with the debtor."
Developer's Initials
[End — signatures on next page]
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IN WITNESS WHEREOF, the parties have executed this Regulatory Agreement
as of the respective dates set forth below.
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"Authority"
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
By:
Frank J. Spevacek, Executive
Director
"Developer"
a California limited partnership
By:
Its:
212
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 , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature,
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(Seal)
213
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 , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature,
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(Seal)
214
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
All of that certain real property located in the City of La Quinta, County of
Riverside, State of California, described as follows:
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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215
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EXHIBIT B
MAP
[See following page]
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EXHIBIT C
INCOME COMPUTATION AND CERTIFICATION FORM
(See following document)
i m
217
LA QUINTA HOUSING AUTHORITY
78-495 Calle Tampico, La Quinta, CA 92253
INCOME COMPUTATION AND CERTIFICATION FORM
(Affordable Housing Eligibility for Renter Occupied Unit
PART I. PROPERTY FINANCED WITH GOVERNMENT ASSISTANCE
Property Address:
PART II. TENANT HOUSEHOLD INFORMATION
Date of Birth Soc. Sec. # Relationship
TOTAL NUMBER OF PERSONS IN HOUSEHOLD: (Please list information on other household members
below)
Mailing Address:
Telephone Numbers: Work( )
Home( )
PART III. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as
specified below. Attach a note explaining any significant changes in household income between the previous year
and the current year. INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUSEHOLD AGE 18 OR
OLDER REGARDLESS OF WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are
not required to file a tax return, please indicate this in Part V by your signature.
ANN INCOME
ANN INCOME
INCOME SOURCES
for owner
others in
hshld
VERIFICATIONS (needed for file)
A. Employment earnings
Last tax return & last 3 pay stubs,
employer verification
B. Self-employment earnings
Last 2 tax returns & current financial
stmt
C. Social Security (OASDI)
Annual award letter
D. Supplemental Security Income
(SSI)
Annual award letter
E. Public assistance (AFDC, general
Current benefit statement
assistance, unemployment, etc.)
F. Pension (s)
Annual award letter, year end stmt,
W-2
G. Interest income
Last 2 statements for all accounts
H. Investment income (stocks,
bonds,
Last 2 statements for all accounts
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real estate, etc.)
I. Room rental
Rental agreement, copies of checks,
etc.
J. Other income (list type/source)
K. TOTAL INCOME (sum of A thru J)
/ 12 months = mo.
income
PART IV. PROPERTY STATUS
Will this property be your primary residence?
Will someone other than the individuals listed above be occupying this property?
If yes - Name of occupants:
Telephone Number:
My/our housing expenses are as follows:
1.Monthly tenant rent
2.Average monthly utilities
PART V. TENANT CERTIFICATION
Mailing Address:
I/We understand that after the initial eligibility determination, completion of monitoring forms is required on an
annual basis. I/We certify that I/we have disclosed all information pertaining to my/our application and that the
information presented in the foregoing Sections I through IV is true and accurate to the best of my (our) knowledge.
Tenant Date
Tenant Date
For more information regarding this application, please contact management staff at (760)
FOR OFFICE USE ONLY
Information verified
Income category
Maximum allowable annual income ( % of median)
Applicant's annual income gross monthly max housing costs
Comments:
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Management Staff Date
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EXHIBIT D
INCOME RECERTIFICATION FORM
(See following document)
in
221
LA QUINTA HOUSING AUTHORITY
78-495 Calle Tampico, La Quinta, CA 92253
INCOME RECERTIFICATION FORM
(Renter Occupied Unit)
PART I. GENERAL INFORMATION
1. Property Owner Name
2. Renter Name
3. Property Address
La Quinta, CA 92623(Please include P.O. Box No. if applicable)
4. Has there been a change in ownership of this property during the
preceding 12 month period?
Yes( )No( )
(If yes, please explain)
PART II. UNIT INFORMATION
5. Number of Bedrooms
6. Number of Occupants
Names:
PART III. AFFIDAVIT OF RENTER
I, , and I, , as renters of units
assisted pursuant to the La Quinta Housing Authority's (the "Authority") Affordable
Housing Program (the "Program"), do hereby represent and warrant that the following
computation includes all income (1/we) anticipate receiving for the 12-month period
commencing on January 1, 20 (including the renter(s) and all family members of
the renters):
business)
(a) amount of wages, salaries, overtime pay, commissions, fees,
tips and bonuses, and payments in lieu of earnings, such as
unemployment and disability compensation, worker's compensation
and severance pay (before payroll deduction)
(b) net income from business or profession or rental of property
(without deduction for repayment of debts or expansion of
(c) interest and dividends
(d) periodic receipts such as social security, annuities, pensions,
retirement funds, insurance policies, disability or death benefits,
alimony, child support, regular contributions or gifts
from persons not occupying unit
(e) public assistance allowance or grant plus excess of maximum
allowable for shelter or utilities over the actual allowance for
such purposes
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(f) regular and special pay and allowances of a member of
armed services (whether or not living in the dwelling)
who is head of the family or spouse _
Subtotal (a) through (f)
LESS: Portion of above items which are income of a family member
who is less than 18 years old or a full-time student ( )
TOTAL ELIGIBLE INCOME
NOTE: The following items are not considered income: casual or sporadic gifts;
amounts specifically for or in reimbursement of medical expenses; lump sum
payment such as inheritances, insurance payments, capital gains and settlement
for personal or property losses; educational scholarships paid directly to the
student or educational institution; government benefits to a veteran for education;
special pay to a serviceman head of family away from home and under hostile
fire; foster child care payments; value of coupon allotments for purpose of food
under Food Stamp Act of 1964 which is in excess of amount actually charged the
eligible household; relocation payments under Title II of Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970; payments
received pursuant to participation in the following programs: VISTA, Service
Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired
Senior Volunteer Program, Foster Grandparent Program, Older American
Community Services Program, and National Volunteer Program to Assist Small
Business Experience.
2. This affidavit is made with the knowledge that it will be relied upon by the
Landlord and Authority to determine maximum income for eligibility and
(I/we) warrant that all information set forth in this Part III is true, correct
and complete and based upon information (1/we) deem reliable and that
the estimate contained in paragraph 1 is reasonable and based upon such
investigation as the undersigned deemed necessary.
3. (I/We) will assist the Landlord and Authority in obtaining any information or
documents required to verify the statements made in this Part III and have
attached hereto a copy of our federal income tax return for the last
year (20 ).
4. (I/We) acknowledge that (1/we) have been advised that the making of any
misrepresentation or misstatement in this affidavit will constitute a material
breach of (my/our) agreement with the Landlord to rent the unit and will
additionally enable Authority to initiate and pursue all applicable legal and
equitable remedies with respect to the unit and to me/us.
B. (My/Our) monthly housing expenses are limited to the following:
Base rent
2. Average Monthly Utilities
3. Other (explain)
(I/We) understand that completion of monitoring forms is required on an annual basis
and agree to notify the La Quinta Housing Authority in writing of any change in
ownership or rental of the unit.(I/We) do hereby swear under penalty of perjury that the
foregoing statements are true and correct.
Date
Renter(s)
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EXHIBIT E
FORM OF CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
882/015610-0040
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(See following document)
-47-
224
CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
The undersigned, being duly authorized to execute this certificate on behalf of
, owner of the Project, hereby
represents and warrants that:
1. He/she has read and is thoroughly familiar with the provisions of the
Affordable Housing Regulatory Agreement between the La Quinta Housing Authority
and
2. As of June 30, 20_, the following number of residential units in the
Project (i) are currently occupied by tenants qualifying as Extremely Low Income
Households at Affordable Rents; (ii) are currently occupied by tenants qualifying as 45%
Very Low Income Households at Affordable Rents; (iii) are currently occupied by
tenants qualifying as Very Low Income Households at Affordable Rents; or (iv) are
currently vacant and being held available for occupancy by Eligible Tenants and have
been so held continuously since the date Eligible Tenants vacated such unit, as
indicated:
Units occupied by Extremely Low Income Households
ii. Units occupied by 45% Very Low Income Households
iii. Units occupied by Very Low Income Households
iv. vacant Units
3. The unit number, unit size, rental amount charged and collected, number
of occupants, and the income of the occupants for each Affordable Unit in the Project
are set forth on the attached list. All Affordable Units in the Project are rented at
Affordable Rent.
DEVELOPER NAME
a California limited partnership
Dated: , 20_ By:
(Printed name and title)
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225
ATTACHMENT NO. 18
FORM OF NOTICE OF AFFORDABILITY RESTRICTIONS
[See following document]
882/015610-0040
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226
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
Exempt From Recording Fee Pursuant to Government Code § 27383
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
Important notice to owners, purchasers, tenants, lenders, brokers,
escrow and title companies, and other persons, regarding affordable
housing restrictions on the real property described in this Notice:
Affordable housing restrictions have been recorded with respect to the
property described below (referred to in this Notice as the "Property")
which require that the Property be developed as an affordable rental
housing development and that all of the units be rented to and occupied by
persons and households of limited income at affordable rents.
Title of Document Containing Affordable Housing Restrictions:
Affordable Housing Regulatory Agreement ("Agreement").
Parties to Agreement: , a California limited
partnership ("Developer"), and the La Quinta Housing Authority, a public
body, corporate and politic ("Authority").
The Agreement is recorded concurrently with this Notice, in the
Official Records of Riverside County.
Legal Description of Property: See Exhibit "A" attached hereto and
incorporated herein by this reference.
Property Location: Located at 42-800 Washington Street, in the
City of La Quinta.
882/015610-0040
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227
M
Assessor's Parcel Numbers of Property: 609-040-007, 023, and
Summary of Agreement:
o The Agreement provides for the rehabilitation of seventy-two
(72) existing affordable units, demolition of one (1) existing
affordable unit, and construction of forty-eight (48) new
apartment units, new community facilities, and related
amenities and site improvements
o The Agreement restricts the rental of (i) (_) units to
households whose annual income does not exceed the
qualifying limits under California law for "extremely low income
households"; (ii) (_) units to households
whose annual income does not exceed percent of the
median income for the Riverside County area; and
(iii) (_) units to households whose annual
income does not exceed the qualifying limits under California
law for "very low income households", all as established by
HUD, and as published periodically by HCD.
o The Regulatory Agreement restricts the rents that may be
charged to such households to the maximum amount of rent,
including a reasonable utility allowance, that does not exceed
the rent permitted to be charged to the applicable household,
as the case may be, determined pursuant to Health and Safety
Code Section 50053(b).
o The term of the Agreement is fifty-seven (57) years.
This Notice does not contain a full description of the details of all of
the terms and conditions of the Agreement. You will need to obtain and
read the Agreement to fully understand the restrictions and requirements
which apply to the Property.
This Notice is being recorded and filed in compliance with Health and
Safety Code Section 33334.3(f)(3) and (4), and shall be indexed against
Authority and the Owner of the Property.
882/015610-0040
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228
[signature on next page]
882/015610-0040
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229
"Authority"
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
Date: , 201 _ By:
Frank J. Spevacek, Executive
Director
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230
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 , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature,
(Seal)
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231
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
All of that certain real property located in the City of La Quinta, County of
Riverside, State of California, described as follows:
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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232
ATTACHMENT NO. 19
FORM OF RELEASE OF CONSTRUCTION COVENANTS
[See following document]
882/015610-0040
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233
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
La Quinta Housing Authority
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
(Space Above for Recorder's Use)
Exempt from Recordation Fee per Gov. Code § 27383
RELEASE OF CONSTRUCTION COVENANTS
This RELEASE OF CONSTRUCTION COVENANTS ("Release") is made this
day of , by the LA QUINTA HOUSING AUTHORITY, a public
body, corporate and politic ("Authority"), in favor of
, a California limited partnership ("Developer").
RECITALS
A. Developer is the fee owner of that certain real property 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" ("Property").
B. On or about , 2017, Authority and Coachella Valley
Housing Coalition ("CVHC") entered into that certain Affordable Housing and Property
Disposition Agreement ("Agreement") which provides for CVHC to rehabilitate a
seventy-three (73) unit affordable rental apartment development and construct sixty-
eight (68) new apartment units on the Property, as more particularly described therein
as the "Project." CVHC has assigned to Developer, and Developer has assumed from
CVHC, all of CVHC's rights and obligations in and to the Agreement.
C. Pursuant to the Agreement, Authority is required to furnish Developer with
this Release upon request by Developer after completion of construction of the Project.
D. The issuance by Authority of this Release shall be conclusive evidence
that Developer has complied with the terms of the Agreement pertaining to the
construction of the Project.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are
incorporated herein by this reference, the parties hereto agree as follows:
1. As provided in the Agreement, Authority does hereby certify that the
construction of the Project has been satisfactorily performed and completed, and that
such development and construction work complies with the Agreement.
882/015610-0040
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2. This Release does not constitute evidence of compliance with or
satisfaction of any obligation of Developer to any holder of a mortgage or any insurer of
a mortgage security money loaned to finance the work of construction of improvements
and development of the Property, or any part of thereof.
3. This Release is not a notice of completion as referred to in Section 3093
of the California Civil Code.
4. This Release does not terminate any other agreement or document
executed by Developer in connection with the Agreement, including, without limitation,
that certain Affordable Housing Regulatory Agreement recorded on , as
Instrument No. , in the Official Records of the County of Riverside
(the "Official Records"), and that certain Deed of Trust recorded on , as
Instrument No. in the Official Records, all of which shall survive
recordation of this Release.
IN WITNESS WHEREOF, Authority has executed this Release as of the date set
forth above.
Date:
LA QUINTA HOUSING AUTHORITY,
a public body, corporate and politic
Frank J. Spevacek, Executive Director
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235
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 Riverside
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
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236
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
All of that certain real property located in the City of La Quinta, County of Riverside,
State of California, described as follows:
[Legal description to be added at such time as a parcel map subdividing the Property
has been recorded in the Official Records of the County of Riverside, which shall be
prior to the finalization and execution of this document]
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TABLE OF CONTENTS
Page
1. DEFINITIONS.....................................................................................................3
2. PARTIES..........................................................................................................13
2.1 Authority.................................................................................................13
2.2 Developer..............................................................................................13
3. SCHEDULE OF PERFORMANCE...................................................................13
4. DUE DILIGENCE PERIOD; INSPECTIONS AND REVIEW
PERMISSION TO ENTER PROPERTY; AS -IS; PHYSICAL AND
ENVIRONMENTAL CONDITION......................................................................13
4.1
Due Diligence Items Already Provided..................................................13
4.2
Due Diligence Items to be Provided.......................................................13
4.3
Environmental/Physical Property Condition Due Diligence....................15
4.4
Financial/Operational Condition Due Diligence Period; New
Indebtedness; Developer's Equity.........................................................16
4.5
Preliminary Title Report.........................................................................16
4.6
Survey....................................................................................................17
4.7
USDA Matters........................................................................................17
4.8
Books and Records...............................................................................18
4.9
"AS-IS"...................................................................................................19
5. FINANCING PLAN FOR THE PROJECT.........................................................19
5.1 Financing Plan.......................................................................................19
5.2 Authority Loans......................................................................................20
5.3 Tax Credit Application............................................................................21
5.4 Project Budget....................................................................................... 22
5.5 Financing Commitments........................................................................22
5.6 Developer Right to Terminate................................................................ 22
5.7 Authority Right to Terminate..................................................................23
5.8 Developer Fee.......................................................................................23
6. DISPOSITION OF PROPERTY........................................................................24
6.1 Agreement............................................................................................. 24
6.2 Conditions for Authority's Benefit...........................................................24
6.3 Conditions for Developer's Benefit.........................................................27
6.4 Developer Right to Terminate................................................................ 30
6.5 Developer's Failure to Satisfy Conditions..............................................30
6.6 Waiver of Conditions..............................................................................30
7. CLOSE OF ESCROW; ESCROW EXPENSES ................................................ 30
7.1 Close of Escrow.....................................................................................30
7.2 Expenses of Developer..........................................................................31
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Page
7.3 Instruction to Escrow Holder Regarding Waiver of Transfer Taxes
and Recording Fees..............................................................................31
7.4 Broker's Commissions........................................................................... 32
8. OTHER ESCROW INSTRUCTIONS................................................................32
8.1 Funds in Escrow.................................................................................... 32
8.2 Failure to Close......................................................................................32
8.3 Amendments..........................................................................................32
8.4 Notices...................................................................................................32
8.5 Liability...................................................................................................32
9. DEVELOPMENT OF THE PROJECT...............................................................33
9.1
Scope of Development...........................................................................33
9.2
Additional Governmental Permits and Approvals...................................33
9.3
Displacement; Relocation......................................................................
33
9.4
Cost of Project.......................................................................................
33
9.5
Indemnity...............................................................................................33
9.6
Insurance Requirements........................................................................34
9.7
Remedies for Defaults Re: Insurance....................................................37
9.8
Obligation to Repair and Restore Damage Due to Casualty Covered
byInsurance..........................................................................................37
9.9
Rights of Access....................................................................................
37
9.10
Compliance with Laws; Compliance with Prevailing Wage Laws ...........
38
9.11
Anti-Discrimination.................................................................................39
9.12
Taxes and Assessments........................................................................40
9.13
Right of Authority to Satisfy Other Liens on the Property(s)...................40
9.14
Non -liability of Authority.........................................................................40
9.15
Release of Construction Covenants......................................................41
10. AFFORDABILITY COVENANTS......................................................................41
11. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS ........... 42
11.1 Developer's Formation, Qualification and Compliance ..........................42
11.2 Litigation................................................................................................42
11.3 Authority.................................................................................................42
12. DEFAULTS AND REMEDIES...........................................................................42
12.1 Event of Default.....................................................................................42
12.2 No Waiver..............................................................................................43
12.3 Legal Actions.........................................................................................43
12.4 Reimbursement of Authority..................................................................44
13. NOTICES.........................................................................................................44
14. ASSIGNMENT..................................................................................................45
14.1 Generally Prohibited..............................................................................45
882/015610-0040
9930825.4 a05/12/17 -I I-
239
Page
14.2 Release of Developer............................................................................46
15. ADMINISTRATION...........................................................................................46
16. MISCELLANEOUS...........................................................................................46
16.1
Counterparts..........................................................................................46
16.2
Prior Agreements; Amendments............................................................46
16.3
Severability of Provisions.......................................................................46
16.4
Interpretation..........................................................................................47
16.5
Accounting Principles.............................................................................47
16.6
Attachments Incorporated......................................................................47
16.7
Time of the Essence..............................................................................47
16.8
Warranty Against Payment of Consideration.........................................47
16.9
Non -liability of Authority Officials and Employees..................................47
16.10
Force Majeure........................................................................................47
16.11
Nondiscrimination Covenants................................................................48
16.12
Consents and Approvals........................................................................49
16.13
Third Party Beneficiary...........................................................................49
List of Attachments:
1 - Legal Description and Depiction of the Property
2 - Site Plan
3 - Schedule of Performance
4 - Scope of Development
5 - Form of Grant Deed
6 - Form of Warranty Bill of Sale
7 - Form of Assignment of Leases
8 - Form of Non -Foreign Affidavit
9 - Form of Assignment of Contracts, Permits, Intangible Personal Property,
Warranties, and Guaranties (to Developer)
10 - Form of Assignment of Contracts, Permits, Intangible Personal Property,
Warranties, and Guaranties (to Authority)
11 - Form of Notice to Tenants
12 - Form of Lead -Based Paint Disclosure and Acknowledgement
13 - Form of Disbursement Request
14A - Form of Authority Note (Plans)
14B Form of Authority Note (Property and Construction)
15A - Form of Authority Deed of Trust (Plans)
15B Form of Authority Deed of Trust (Property and Construction)
16 - Project Budget
17 - Form of Authority Regulatory Agreement
18 - Form of Notice of Affordability
19 - Form of Release of Construction Covenants
882/015610-0040
9930825.4 a05/12/17 -I I I-
240
DEPARTMENT REPORT ITEM NO. 1
City of La Quinta
CITY COUNCIL MEETING
DEPARTMENT REPORT
TO: Members of the Housing Commission
FROM: Karla Campos, Authority Treasurer
DATE: May 17, 2017
SUBJECT: ESTABLISHMENT OF A HOUSING AUTHORITY LOCAL AGENCY INVESTMENT
FUND (LAIF) ACCOUNT
The bond expenditure agreement was approved by City Council and the Successor
Agency in July 2016 and by the Department of Finance (DOF) on August 23, 2016. The
bond expenditure agreement included both housing and non -housing bond proceeds.
The housing proceeds are being temporarily held in a depository trust account with
U.S. Bank. These funds were released to the trust account after the 2016 Taxable
Series A bond refinancing was completed on December 22, 2016. Subsequently the
expenditure agreement was included as an enforceable obligation on the fiscal year
2017/18 Recognized Obligation Payment Schedule (ROPS) which was approved by DOF
on March 10, 2017. This DOF approval released the use of the bond expenditure funds
for the purposes outlined in the agreement.
Since the DOF has now approved the 1) bond expenditure agreement, 2) bond
refinancing, and 3) 2017/18 ROPS; the City may now withdraw funds from the
depository trust account. The City intends to establish a separate LAIF account for the
housing proceeds. This account will be limited to Housing Authority funds and any
interest earned will be recognized solely in the Housing Authority Fund. Use of funds
will continue to be limited to the bond expenditure agreement for their originally
intended purposes.
LAIF is an authorized investment in the City's current investment policy. Annually, the
Housing Authority Treasurer submits the City's Investment Policy to LAIF. Pursuant to
Chapter 730 of the statutes of 1976, Section 16429.1 was added to the California
Government Code to create LAIF in the State Treasury for the deposit of money of a
local agency for purposes of investment. Since 2007 LAIF mandates that in addition to
the City's Investment Policies, the La Quinta Housing Authority authorize the deposits
and withdrawals of City monies in LAIF by city officers, or their successors in office, via
241
a resolution. The City allows the Housing Authority Executive Director (City Manager)
and the Housing Authority Treasurer (Finance Director/City Treasurer) to make
deposits and withdrawals.
LOCAL AGENCY INVESTMENT FUND (LAIF) BACKGROUND
LAIF was established in 1977 and is administered by the California State Treasurer's
Office as an investment alternative for California's local governments and special
districts. The program operates a major portfolio investing hundreds of millions of
dollars with in-house investment expertise. The Local Investment Advisory Board
(LIAB) provides oversight for LAIF and consists of the following five members as
designated by statute: the State Treasurer, two members appointed by the State
Treasurer with training and experience in the fields of investment or finance, and two
members who are treasurers or finance/fiscal officers of a California local agency.
Moneys deposited in LAIF are afforded certain statutory protection. Government Code
Section 16429.3 states that "moneys placed with the Treasurer for deposit in the Local
Agency Investment Fund by cities, counties, special districts, nonprofit corporations, or
qualified quasigovernmental agencies shall not be subject to either of the following:
(a) transfer or loan pursuant to Sections 16310, 16312, or 16313, or (b) impoundment
or seizure by any state official or state agency."
Government Code Section 16429.4 was added in 2002 to provide further protection.
This section states that "the right of a city, county, city and county, special district,
nonprofit corporation, or qualified quasi -governmental agency to withdraw its
deposited moneys from the Local Agency Investment Fund, upon demand, may not
be altered, impaired, or denied, in any way, by any state official or state agency based
upon the state's failure to adopt a State Budget by July 1 of each new fiscal year."
LAIF has grown from 293 participants and $468 million in 1977 to 2,450 participants
and $21.3 billion at the end of March 2017. LAIF is part of the state's Pooled Money
Investment Account, which had a $76.5 billion portfolio at the end of April 2017.
INVESTMENT COST & MANAGEMENT
The goals for investment of the portfolio are safety, liquidity, and yield, in that order.
The current daily invest yield is 0.92% as of May 10, 2017. The portfolio yield is
updated weekly. A LAIF performance report (attachment C) is presented to this report.
LAIF administrative costs are assessed quarterly. The Government Code states that
administrative costs are not to exceed 5% of quarterly earnings of the fund. These
fees cover actual costs to administer the LAIF program and are deducted from
quarterly earnings prior to interest posting. Interest is calculated on a dollar -day basis
to guarantee equitable distribution among all member funds and is paid quarterly.
242
LAIF accounts are limited to 15 transactions per month with a minimum transaction
amount of $5,000. There is no minimum balance requirement; however, the maximum
investment is capped at $65 million per account. A 24-hour notice is required for
withdrawals over $10 million. There is no fee for wires into or out of LAIF.
The State Treasurer's Office is audited by the Bureau of State Audits on an annual
basis and the resulting audit report is posted to the State Treasurer's Office website
following its publication. The Bureau of State Audits also has a continuing audit
process throughout the year. All investment and LAIF claims are audited daily by the
State Controller's Office as well as through an in-house audit process.
243
HAND OUTS
HOUSING
COMMISSION
MEETING
MAY 17P 2017
Print
HOUSI NG OOMMI SSI ON MEETING- MAY 17, 2017 - HAND OUT
CONSENT CALENDAR I TEM NO. 1 -APPROVE MINUTES OF AM L 12, 2017
Page 1 of 1
Subject: HC Minutes
From: LINDA GUNNETT (luiukazoo@yahoo.com)
To: joysworldl9@yahoo.com; ehowardlong@gmail.com;
Date: Wednesday, May 17, 2017 5:07 PM
Dear Chairman Rogers, and Commissioners Johnson and Long:
I would like to request a change to the HC Minutes that have been submitted for approval for this
evenings meeting. Specifically, the minutes state only that Linda Gunnett asked for clarification of
funding. It is important to me that the Minutes reflect that I asked why it has taken so long to get the
Washington Street Apartment project started and I asked about the increase in costs for the WSA
project, which was listed on the DOF ROPS originally at approximately $21 million and now the
costs have gone up to $38 million. Consultant McMillen gave an answer which I could not hear
enough of to repeat.
Over the years I have written to the City of LQ inquiring of various issues and often I hear from them
that I should have asked that question at the time the proposal was before the Council. In this instance
of the development of WSA I would like the record to reflect that I did ask questions about delays and
costs so that questions about those matters in the future will be responded to appropriately
without making an attempt to deflect attention from the issue I am trying to address.
Thank you,
Linda Gunnett
51-321 Avenida Bermudas #484
La Quinta, CA 92247
760-564-5972
https://us-mg6.mail.yahoo.com/neo/launch?.rand=5jh6gadnj 14b4 5/17/2017
HOUSI NG OOMMI SSI ON MEETING- MAY 17, 2017 - HAND-OUT
BUST NESSSESSI ON ITEM NO. 1 - WSA SUMMARY REPORTAND AHPDA
SUBMITTED BY MR WILLIAM CAIN
WASHINGTON STREET APARTMENT PROJECT
How much was the original USDA loan and did The city of La Quinta purchase this
apartment complex. Is the $628,640 figure the remainder of the loan.
Was the total cost for the apartment complex and land $6,750 000 and who made the
appraisal for both ? In what year ?
Who is the developer submiting to the state for approval of the project and tax credits.
What if the developer is unable to obtain investors to take on tax credits and how much
is the developer applying for. Is the developer receiving a fee or commission for selling
tax credits? If so how much is coming off the top ? If the developer is a non profit
organization why are they entitled to a fee/commission for reselling tax credits ?
How many developers have been advised of the city's desire to produce low income
housing or is it just a locked in circle.?
It is my understanding that the first phase is the rehabilitation of 72 existing
units.Looking at the figures I have to wonder why such a high price per unit when in fact
the city could probably buy already built condos or houses for a lot less. 72 units at an
average cost of $200,000 = $14,400,000
If the city is spending more than $30.000.00 per unit they are not doing due diligence
and should rethink there expenditures.
I noticed there was $4,800.000 for site work on rehab for the older unit site and an
additional $3,200.000 for the new site work for a total of $8,000.000 dollars site
work.What is involved and why so costly.
Rehab structure is listed at $6,400,000 and for new site structures $10,400,000 for a
total of $17,000,000 which equal $ 118,000 per unit.
If we allow $30,000.00 per unit for the older structures x 72
units +$ 2,160.000 were looking at 3 time more than what a fair and resonable rehab
cost should be. Why
What exactly is involved with structural rehab as the developer and city define it
Just an aside you could probably buy a decent condo in Palm Springs for $161,000
each which is what the value of both the cost acquisition for the old structure and your
rehab cost are per unit.
Who is the primary contractor and is there an open bid proceeds in place.As an aside
the contractors profit seems to be abnormally low for a project this size.Please explain.
Why is the contractors profit and overhead broken out separately ?
Is there a list of the amenities for the site and a list of the improvements that the site and
each unit is receiving.
Old site $12,600,000 equal $175,000.00 each
New site rehab $15,245,.0000 divide by 72 units = $211,736,00 thousand per unit
Is the developer the contractor ?
What is the time frame for the rehab of both the older units and new unit.
Who is the guarantor on the permeant loan ?
POWER POINTS
HOUSING
COMMISSION
MEETING
MAY 1712017
PROPOSEDMEVELOPM ENTIN
0
0
• H I STO RY®
o FORM ERMDAF?l
o 2007MN D12008[PU RCHASE3JSDA1'[RD[N
CON DITIONSO
0
• E NTITLE M E NTSO
o WSAD-1721RECONSTRUCTED,1263N EWIIJ N ITS/0
COM MONSIJCOVEREDTARKI NG/IliARDSCAPED
o420-N EWM N ITS/[EOM MONS/MOVEREDLPARKI NGF?]
AFFORDABILITYWIXm
0
Income
Category
Number of Persons
1
2
24
Extremely Low
14,0100
16,100
110
Very Low
231450
261800
4
Low
371550
421900
2
Moderate
54,600
621#400
Agency Costs
Apartments and Existing Land $ 81783,738
Planning, Design, Engineering, $ 21362,057
Management, Relocation, Disposition
2014 and 2016 Bond Proceeds $ 10/400/000
Total Interest 2014 and 2016 Bonds $ 91417,123
TOTAL COST $ 30,962,p918
0
0 0
Authority Loan Detail
Existing Apartments 73 units
Reserves from existing apartments
Adjacent vacant land parcel
2016 Housing Bonds
Total Loan
$ 31325,1252
$ 110731036
$ 11260,000
$ 914001000
$151058,288
Authority work completed
2014 Housing Bonds
Total "Plan Loan"
$
$
$
1,366,722
110001000
213661722
Total of Authority Loans
$17,14251010 0
SOURCES
Existing USDA 515 Loan
Plan Loan
Property and Construction Loan
Tax Credit Equity
Deferred Developer Fee/GP Equity
Total Sources
628,640
21366,722
15,0581288
28,9081896
7,526
46,970,072 0
USE OF FUNDS
Acquisition Cost -
607851000
Rehabilitation Cost
12,6011042
New Construction Costs
15,1244.1823
Architectural Costs
6281925
Survey and Engineering, incl testing
3401000
Construction Interest and Fees
1,8791263
Permanent Financing Costs
301000
Attorney Costs
751000
Reserve Costs
11073,036
Appraisal Costs
101000
Construction Contingency Costs
4104419691
Other Costs
21P768,292
Developer Fee
11400,000
Syndication Costs
901000
TOTAL PROJECT COSTS
46,97%072
0