2002 11 19 RDAT4tyl 4 .fP Q"
Redevelopment Agency Agendas are
available on the City s Web Page
@ www.la-quinta.org
Redevelopment Agency
Agenda
CITY COUNCIL CHAMBER
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
Tuesday November 19, 2002 - 2:00 P.M.
Beginning Res. No. RA 2002-20
CALL TO ORDER
Roll Call:
Board Members: Adolph, Pena, Perkins, Sniff, Chairperson Henderson
PUBLIC COMMENT
At this time, members of the public may address the Redevelopment Agency on any matter not
listed on the agenda. Please complete a "request to speak" form and limit your comments to
three minutes. Please watch the timing device on the podium.
CLOSED SESSION
1. CONFERENCE WITH THE AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS,
PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL
TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY
LOCATED AT THE NORTHWEST CORNER OF AVENUE 52 AND JEFFERSON STREET
(APN 772-220-007). PROPERTY OWNER/NEGOTIATOR: SUSAN HARVEY.
2. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS,
PURSUANT TO GOVERNMENT ODE SECTION 54956.8 CONCERNING POTENTIAL
TERMS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED ON THE
NORTH SIDE OF CALLE TAMPICO, WEST OF DESERT CLUB DRIVE, EMBASSY SUITES
(TENTATIVE PARCEL MAP 29909, PARCEL 8). PROPERTY OWNER/NEGOTIATOR:
DANNY BROWN, BISON HOTEL GROUP.
3. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS,
PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL
TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY
LOCATED SOUTHEAST OF THE MILES AVENUE AND WASHINGTON STREET
INTERSECTION AND NORTH OF THE WHITEWATER CHANNEL (APN's 604-040-012/013
AND 604-040-022/023). PROPERTY OWNER/NEGOTIATOR: RICHARD OLIPHANT,
CALIFORNIA INTELLIGENT COMMUNITIES, LLC. 001
Redevelopment Agency Agenda
Page 1
November 19, 2002
Iva
V
VI
VII
4. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS,
PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL
TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF A 20-FOOT WIDE
EASEMENT RUNNING EAST/WEST GENERALLY LOCATED BETWEEN AVENIDA
BERMUDAS AT DESERT CLUB DRIVE, NORTH OF AVENIDA LA FONDA AND SOUTH OF
CALLE TAMPICO. PROPERTY OWNER/NEGOTIATOR: LA QUINTA ARTS FOUNDATION.
NOTE: Time permitting, the Redevelopment Agency Board may conduct Closed Session
discussions during the dinner recess. In addition, when the Agency is considering acquisition
of property, persons identified as negotiating parties are not invited into the Closed Session
Meeting.
RECONVENE AT 3:00 PM
PUBLIC COMMENT
At this time members of the public may address the Agency Board on items that appear within
the Consent Calendar or matters that are not listed on the agenda. Please complete a "request
to speak" form and limit your comments to three minutes. When you are called to speak,
please come forward and state your name for the record. Please watch the timing device on
the podium.
For all Agency Business Session matters or Public Hearings on the agenda, a completed
"request to speak" form should be filed with the City Clerk prior to the Agency beginning
consideration of that item.
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
APPROVAL OF THE MINUTES OF NOVEMBER 5, 2002.
CONSENT CALENDAR
Note: Consent Calendar items are considered to be routine in nature and will be approved by
one motion.
APPROVAL OF DEMAND REGISTER FOR NOVEMBER 19, 2002.
2. TRANSMITTAL OF TREASURER'S REPORT AS OF SEPTEMBER 30, 2002.
3. TRANSMITTAL OF REVENUE AND EXPENDITURES REPORT DATED SEPTEMBER 30,
2002.
4. APPROVAL OF THE SEPARATELY -ISSUED LA QUINTA REDEVELOPMENT AGENCY
ANNUAL AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2002.
5. APPROVAL OF AMENDMENT NO. 1 TO THE EARLY ENTRY AGREEMENT WITH
CALIFORNIA INTELLIGENT COMMUNITIES, LLC.
Redevelopment Agency Agenda Page 2 November 19, 2002 0001
'1
Vill. BUSINESS SESSION
1. CONSIDERATION OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE
YEAR ENDED JUNE 30, 2002.
A. MINUTE ORDER ACTION
2. CONSIDERATION OF ADOPTION OF A RESOLUTION APPROVING AN AFFORDABLE
HOUSING AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY
AND APARTMENTS AT LA QUINTA VILLAGE, L.P., FOR THE PROPERTY LOCATED ON
THE EAST SIDE OF EISENHOWER DRIVE, NORTH OF CALLE TAMPICO, AND WEST OF
AVENIDA BERMUDAS.
A. RESOLUTION ACTION
IX. CHAIR AND BOARD MEMBERS' ITEMS
X. PUBLIC HEARINGS - NONE
XI. ADJOURNMENT
Adjourn to a regularly scheduled Meeting of the Redevelopment Agency to be held on December
3, 2002, commencing with closed session at 2:00 p.m. and open session at the conclusion of
the 3:00 p.m. City Council business session in the City Council Chambers, 78-495 Calle
Tampico, La Quinta, CA 92253.
DECLARATION OF POSTING
I, June S. Greek, Secretary of the La Quinta Redevelopment Agency, do hereby declare that the
foregoing agenda for the La Quinta Redevelopment Agency meeting of Tuesday, November 19, 2002,
was posted on the outside entry to the Council Chambers, 78-495 Calle Tampico and on the bulletin
board at the La Quinta Chamber of Commerce, 78-371 Highway 1 1 1, and at Stater Bros., 78-630
Highway 1 1 1, on Friday, November 15, 2002.
DATED: November 15, 2002
JUNE S. GREEK, CMC, Agency Secretary
City of La Quinta, California
PUBLIC NOTICES
The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the
hearing impaired, please call the City Clerk's Office at 777-7025, 24-hours in advance of the meeting
and accommodations will be made
f
Redevelopment Agency Agenda Page 3 November 19, 200P "'
� 14Q�rw
AGENDA CATEGORY:
BUSINESS SESSION
COUNCIL/RDA MEETING DATE: NOVEMBER 19, 2002
CONSENT CALENDAR
ITEM TITLE:
Demand Register Dated November 19, 2002
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
STUDY SESSION
PUBLIC HEARING
Receive and File the Demand Register Dated November 19, 2002 of whict $15,100.00
represents Redevelopment Agency Expenditures.
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
�` 004
OF T1 9 AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: November 19, 2002
ITEM TITLE:
Transmittal of Treasurer's Report
dated September 30, 2002
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and file.
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
TWT 4 etP Q"
AGENDA CATEGORY:
BUSINESS SESSION:
COUNCIL/RDA MEETING DATE: November 19, 2002 CONSENT CALENDAR:
ITEM TITLE: STUDY SESSION:
Transmittal of Revenue and Expenditure
PUBLIC HEARING:
Report dated September 30, 2002
RECOMMENDATION:
Receive and File
BACKGROUND AND OVERVIEW:
Transmittal of the September 30, 2002 Statement of Revenue and Expenditures for the
La Quinta Redevelopment Agency.
Respectfully submitted,
ohn M. Falconer; Finance Director
A roved for submission
C
Thomas P. Genovese, Executive Director
Attachments 1 : Revenue and Expenditures, September 30, 2002
LA QUINTA REDEVELOPMENT AGENCY
07/01/2002 - 09/3012002
REMAINING
%
EXPENDITURE SUMMARY
BUDGET
EXPENDITURES
ENCUMBERED
BUDGET
EXPENDED
PROJECT AREA NO. 1:
DEBT SERVICE FUND:
SERVICES
586,870.00
0.00
0.00
586,870.00
0.0%
BOND PRINCIPAL
1,567,022.00
1,567,788.00
0.00
(766.00)
100.0%
BONDINTEREST
6,991,075.00
3,278,260.92
0.00
3,712,814.08
46.9%
INTEREST CITY ADVANCE
490,757.00
122,689.31
0.00
368,067.69
25.0 %
PASS THROUGH PAYMENTS
8,418,042.00
0.00
0.00
8,418,042.00
0.0%
TRANSFERS OUT
0.00
0.00
0.00
0.0%
TOTAL DEBT SERVICE
18,053,766.00
4,968,738.23
0.00
13,085,027.77
27.5%
CAPITAL IMPROVEMENT FUND:
PERSONNEL
4,900.00
1,645.85
0.00
3,254.15
33.6%
SERVICES
214,379.00
42,458.05
0.00
171,920.95
19.8%
LAND ACQUISITION
0.00
0.00
0.00
0.00
0.0%
ASSESSMENT DISTRICT
0.00
0.00
0.00
0.00
0.0%
ECONOMIC DEVELOPMENT
569,382.00
65,973.15
0.00
503,408.85
11.6%
BOND ISSUANCE COSTS
199,880.00
19,663.11
0.00
180,216.89
9.8%
CAPITAL - BUILDING
0.00
0.00
0.00
0.00
0.0%
REIMBURSEMENT TO GEN FUND
1,086,106.00
271,526.52
0,00
814,579.48
25.0%
TRANSFERS OUT
9,315,509.77
499,439.92
0.00
8,816,069.85
5.4%
TOTAL CAPITAL IMPROVEMENT
11,390,156.77
900,706.60
0.00
10,489,450.17
7.9%
LOW/MODERATE TAX FUND:
PERSONNEL
4,900.00
1,645.85
0.00
3,254.15
33.6%
SERVICES
239,315.00
16,015.07
0.00
223,299.93
6.7 %
BUILDING HORIZONS
210,000.00
80,000.00
0.00
130,000.00
38.1 %
LQ RENTAL PROGRAM
829,000.00
104,044.19
0.00
724,955.81
12.6%
LQ HOUSING PROGRAM
2,500,000.00
296,460.00
0.00
2,203,540.00
11.9%
APARTMENT REHABILITATION
626,000.00
0.00
0.00
626,000.00
0.0%
FORECLOSURE ACQUISITION
75,000.00
0.00
0.00
75,000.00
0.0 %
REIMBURSEMENT TO GEN FUND
206,485.00
51,621.21
0.00
154,863.79
25.0 %
TRANSFERS OUT
3,953,426.00
0.00
0.00
3,953,426.00
0.0%
TOTAL LOW/MOD TAX
8,644,126.00
549,786.32
0.00
8,094,339.68
6.4%
LOW/MODERATE BOND FUND
PERSONNEL
0.00
0.00
0.00
0.0%
SERVICES
0.00
0.00
0.00
0.0%
REIMBURSEMENT TO GEN FUND
0,00
0.00
0.00
0.0%
HOUSING PROJECTS
0.00
0.00
0.00
0.0%
TRANSFERS OUT
0.00
0.00
0.00
0.00
0.0%
TOTAL LOW/MOD BOND
0.00
0.00
0.00
0.00
0.0%
007
0V 0
LA QUINTA REDEVELOPMENT AGENCY
REMAINING
%
REVENUE SUMMARY
BUDGET
RECEIVED
BUDGET
RECEIVED
PROJECT AREA NO. 1:
DEBT SERVICE FUND:
Tax Increment
18,048,724.00
(95,456.15)
18,144,180.15
-0.530%
Allocated Interest
19,671.11
(19,671.11)
0.000%
Non Allocated Interest
6,553.18
(6,553.18)
0,000%
Interst - County Loan
0.00
0.00
0.000%
Interest Advance Proceeds
490,757.00
0.00
490,757.00
0.000%
Transfers In
1,738,783.00
0.00
1,738,783.00
0.000%
TOTAL DEBT SERVICE
20,278,264.00
(69,231.86)
20,347,495.86
-0.340%
CAPITAL IMPROVEMENT FUND:
Pooled Cash Allocated Interest
1,208.80
(1,208.80)
0.000%
Non Allocated Interest
125,000.00
194,153.22
(69,153.22)
155.320%
Litigation Settlement Revenue
0,00
0.00
0.000%
Loan Proceeds
0.00
0.00
0.000%
Rental Income
41,500.00
0.00
41,500.00
0.000%
Transfers In
0.00
0.00
0.000%
TOTAL CAPITAL IMPROVEMENT
166,500.00
195,362.02
(28,862.02)
117,330%
LOW/MODERATE TAX FUND:
Tax Increment
4,512,181.00
(23,864.03)
4,536,045.03
-0.530%
Allocated Interest
200,000.00
7,522.16
192,477.84
3.760%
Non Allocated Interest
0.00
0.00
0.000%
Miscellaneous revenue
0.00
0.00
0.000%
Non Allocated Interest
0.00
0.00
0.000%
LQRP-Rent Revenue
341,000.00
95,043.00
245,957.00
27.870%
Home Sales Proceeds
150,000.00
0.00
150,000.00
0.000%
Sale of Land
0.00
0.00
0.000%
Sewer Subsidy Reimbursements
20,873.35
(20,873.35)
0.000%
Rehabilitation Loan Repayments
14,342.22
(14,342.22)
0.000%
Transfer In
0.00
0.00
0.000%
TOTAL LOW/MOD TAX
5,203,181.00
113,916.70
5,089,264.30
2.190%
LOW/MODERATE BOND FUND:
Allocated Interest
0.00
0.00
0.000%
Home Sale Proceeds
0.00
0.00
0.000%
Non Allocated Interest
6,516.26
(6,516.26)
0.000%
Transfer In
0.00
0.00
0.000%
TOTAL LOW/MOD BOND
0.00
6,516.26
(6,516.26)
0.000%
008
U61
LA QUINTA REDEVELOPMENT AGENCY
REMAINING
%
REVENUE SUMMARY
BUDGET
RECEIVED
BUDGET
RECEIVED
PROJECT AREA NO. 2:
DEBT SERVICE FUND:
Tax Increment
7.585,373.00
29.08
7,585,343.92
0.000%
Allocated Interest
4,902.16
(4,902.16)
0.000%
Non Allocated Interest
198.47
(198.47)
0.000%
Interest Advance Proceeds
882,433.00
0.00
882,433.00
0.000%
Transfer In
338,895.00
0.00
338,895.00
0.000%
TOTAL DEBT SERVICE
8,806,701.00
5,129.71
8,801,571.29
0.060%
CAPITAL IMPROVEMENT FUND:
Allocated Interest
8,328.05
(8,328.05)
0.000%
Non Allocated Interest
20,000.00
3.12
19,996.88
0.020%
Developer Agreement
0.00
0.00
0.000%
Transfers In
0.00
0.00
0.000%
Proceeds from City Loan
1,100,000.00
0.00
1,100,000.00
0.000%
TOTAL CAPITAL IMPROVEMENT
1,120,000.00
8,331.17
1,111,668.83
0.740%
LOW/MODERATE TAX FUND:
Tax Increment
1,896,343.00
(21,502.77)
1,917,845.77
-1.130%
Developer Funding
0.00
0.00
0.000%
Allocated Interest
20,700.00
14,397.22
6,302.78
69.550%
Non Allocated Interest
0.00
0.00
0.000%
Sale of Land
0.00
0.00
0.000%
Transfer In
0.00
0.00
0.000%
TOTAL LOW/MOD TAX
1,917,043.00
(7,105.55)
1,924,148.55
-0.370%
LOW/MODERATE BOND FUND:
Allocated Interest
0.00
0.00
0.000%
Non Allocated Interest
1,534.49
(1,534.49)
0.000%
Transfer In
0.00
0.00
0.000%
TOTAL LOW/MOD BOND
0.00
1,534.49
(1,534.49)
0.000%
LA QUINTA REDEVELOPMENT AGENCY
07/01/2002 - 09/30/2002
REMAINING
%
EXPENDITURE SUMMARY
BUDGET
EXPENDITURES
ENCUMBERED
BUDGET
EXPENDED
PROJECT AREA NO. 2:
DEBT SERVICE FUND:
SERVICES
161,020.00
3,050.00
0.00
157,970.00
1.9%
BOND PRINCIPAL
172,978.00
248,496.40
0.00
(75,518.40)
143.7%
BOND INTEREST
586,665.00
217,763.77
0.00
368,901.23
37.1 %
INTEREST CITY ADVANCE
761,433.00
198,878.50
0.00
562,554.50
26.1 %
PASS THROUGH PAYMENTS
6,440,423.00
0.00
0.00
6,440,423.00
0.0%
TRANSFERS OUT
0.00
0.00
0.00
0.00
0.0%
TOTAL DEBT SERVICE
8,122,519.00
668,188.67
0.00
7,454,330.33
8.2%
CAPITAL IMPROVEMENT FUND:
PERSONNEL
2,900.00
995.85
0.00
1,904.15
34.3%
SERVICES
158,774.00
14,346.42
0.00
144,427.58
9.0%
ECONOMIC DEVELOPMENT ACTIVITY
126,725.00
15,400.00
0.00
111,325.00
12.2%
REIMBURSEMENT TO GEN FUND
34,111.00
8,527.80
0.00
25,583.20
25.0%
TRANSFERS OUT
(128,433.14)
(177,054.00)
0.00
48,620.86
137.9%
TOTAL CAPITAL IMPROVEMENT
194,076.86
(137,783.93)
0.00
331,860.79
-71.0 %
LOW/MODERATE TAX FUND:
PERSONNEL
2,900.00
995.85
0.00
1,904.15
34.3%
SERVICES
197,049.00
16,310.81
0.00
180,738.19
8.3%
SEWER SUBSIDIES
0.00
0.00
0.00
0.0%
LQ RENTAL PROGRAM
500,000.00
34,040.00
0.00
465,960.00
6.8%
ADAMS 48TH PLANNING
50,000.00
0.00
0.00
50,000.00
0.0%
LOW MOD HOUSING PROJECTS
1,598,000.00
0.00
0.00
1,598,000.00
0.0%
FORECLOSURE ACQUISITION
15,000.00
0.00
0.00
15,000.00
0.0%
REIMBURSEMENT TO GEN FUND
71,298.00
17,824.47
0.00
53,473.53
25.0 %
TRANSFERS OUT
2,623,586.69
89,329.89
0.00
2,534,256.80
3.4%
TOTAL LOW/MOD TAX
5,057,833.69
158,501.02
0.00
4,899,332.67
3.1
LOWIMODERATE BOND FUND
PERSONNEL
0.00
0.00
0.00
0.0%
SERVICES
0.00
0.00
0.00
0.0%
REIMBURSEMENT TO GEN FUND
0.00
0.00
0.00
0.0%
TRANSFERS OUT
2,358,964.46
0.00
0.00
2,358,964.46
0.0%
TOTAL LOW/MOD BOND
2,358,964.46
0.00
0.00
2,358,964.46
0.0%
0.10
V kJ
U
GF�r OF AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: November 19, 2002
ITEM TITLE:
Approval of the Separated Issued
La Quinta Redevelopment Agency
Annual Audited Financial Statements
for the Year Ended June 30, 2002
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
Approve, receive and file the Annual Audited Financial Statement for the year ended
June 30, 2002 (Attachment 1).
FISCAL IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
At the end of every fiscal year, the Redevelopment Agency prepares an audited
financial report.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Redevelopment Agency Board include:
1 . Approve, receive and file the Annual Audited Financial Statement for the year
ended June 30, 2002; or
2. Do not approve, receive and file the Annual Audited Financial Statement for the
year ended June 30, 2002; or
3. Provide staff with alternative direction.
1 011
Respectfully submitted,
Join M ralconerjinance Director
Approved for submission by:
Thomas P. Genovese, City Manager
Attachment: 1 . Annual Audited Financial Statement for the year ended June 30, 2002
LA QUINTA REDEVELOPMENT AGENCY
Financial Statements and
Supplemental Data
Year ended June 30, 2002
(with Independent Auditors' Report Thereon)
oll
U�J
LA QUINTA REDEVELOPMENT AGENCY
Low/Moderate Bond Fund - PA No. 2
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2002
Variance with Prior
Budget Final Budget Year
Original Final Actual Positive (negative) Actual
Revenues:
Investment income $ - - 16,964
Total revenues -
-
16,964
Other financing sources (uses):
Transfers to the City of La Quint -
(2,582,881)
(223,917)
Total other financing
sources (uses) -
(2,582,881)
(223,917)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures and
other financing uses -
(2,582,881)
(206,953)
Fund balances at beginning of year 2,582,881
2,582,881
2,582,881
Fund balances at end of year $ 2,582,881
-
2,375,928
16,964
16,964
2,358,964
2,358,964
2,375,928
2,375,928
74,163
74,163
74,163
2,508,718
2,582,881
014
43
LA QUINTA REDEVELOPMENT AGENCY
Financial Statements and Supplemental Data
Year ended June 30, 2002
TABLE OF CONTENTS
Page
Independent Auditors' Report 1
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Assets
2
Statement of Activities
3
Fund Financial Statements:
Governmental Funds:
Balance Sheet
4
Reconciliation of the Balance Sheets of Governmental Funds to the
Statement of Net Assets
6
Statement of Revenues, Expenditures and Changes in Fund Balances
7
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
10
Notes to the Basic Financial Statements
11
Required Supplementary Information:
Notes to Required Supplementary Information
39
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
Budget and Actual:
Low/Moderate Income Housing Fund — PA No. 1
40
Low/Moderate Income Housing Fund — PA No. 2
41
Low/Moderate Bond Fund — PA No.1
42
Low/Moderate Bond Fund — PA No. 2
43
Report on Compliance and on Internal Control Over Financial Reporting
Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards 44
015
0 U 7
(This page intentionally left blank)
0 1 R
CONRADAND
ASSOCIATES, L.L.P.
Board of Directors
La Quinta Redevelopment Agency
La Quinta, California
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
We have audited the accompanying basic financial statements of the La Quinta Redevelopment
Agency, a component unit of the City of La Quinta, California as of and for the year ended
June 30, 2002, as listed in the table of contents. These basic financial statements are the
responsibility of the management of the La Quinta Redevelopment Agency. Our responsibility is
to express an opinion on these basic financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the basic financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
basic financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material
respects, the financial position of the La Quinta Redevelopment Agency at June 30, 2002, and
the results of its operations for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
The La Quinta Redevelopment Agency has not presented Management's Discussion and
Analysis that the Governmental Accounting Standards Board has determined is necessary to
supplement, although not required to be part of, the basic financial statements.
The information identified in the accompanying table of contents as required supplementary
information is not a required part of the basic financial statements but is supplementary
information required by the Governmental Accounting Standards Board. We have applied certain
limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the supplementary information. However, we did
not audit the information and express no opinion on it.
In accordance with Government Auditing Standards, we have also issued a report dated
August 16, 2002 on our consideration of the Agency's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts and
grants.
Ca�A-P7 jAse L.L .sue
017
August 16, 2002 v t g
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
LA QUINTA REDEVELOPMENT AGENCY
Statement of Net Assets
June 30, 2002
Governmental Activities
2002
2001
Assets:
Cash and investments (note 2)
$ 21,358,275
18,662,739
Accounts receivable
166,984
149,199
Prepaid items
-
3,515
Interest receivable
-
833
Notes receivable (note 3)
12,509,966
8,861,382
Due from the City of La Quinta
2,294,106
-
Due from other governments
693,210
260,388
Advances from the City of La Quinta
1,249,728
-
Restricted assets:
Cash and investments with fiscal agent (note 2)
39,447,831
9,714,808
Capital assets (note 6):
Land
51,450,306
9,065,319
Other capital assets, net
644,000
704,000
Total assets
129,814,406
47,422,183
Liabilities:
Accounts payable
188,307
55,226
Accrued salaries and benefits
-
16,469
Interest payable
2,222,309
1,376,631
Deposits payable
15,788
14,283
Due to the City of La Quinta
2,805,860
767,170
Due to other governments
-
730,884
Noncurrent liabilities (notes 8 to 13):
Due within one year
2,537,918
11,074,078
Due in more than one year
167,496,980
84,381,709
Total liabilities
175,267,162
98,416,450
Net assets:
Invested in capital assets, net of related debt
1,182,033
-
Restricted for:
Low moderate housing
20,617,434
18,287,655
Capital projects
39,769,632
16,510,117
Unrestricted
(107,021,855)
(85,792,039)
Total net assets $ (45,452,756) (50,994,267)
See accompanying notes to the basic financial statements. 018
2
Governmental activities:
Planning and
development
Low and moderate
housing
Interest expense
Total governmental
activities
LA QUINTA REDEVELOPMENT AGENCY
Statement of Activities
Year ended June 30, 2002
Program Revenues
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Governmental Activities
2002 2001
$ 5,968,560 - -
996,861 (4,971,699)
(4,969,455)
5,633,451 - -
3,548,584 (2,084,867)
612,856
7,387,676 - -
- (7,387,676)
(5,432,682)
$ 18,989,687 - -
4,545,445 (14,444,242)
(9,789,281)
General revenues:
Taxes:
Property taxes
18,899,329
15,324,183
Investment income
761,259
1,195,109
Rental income '
321,145
388,121
Gain (loss) on sale of capital assets
(21,397)
318,461
Miscellaneous revenues
25,417
25,096
Total general revenues
19,985,753
17,250,970
Change in net assets
5,541,511
7,461,689
Net assets (deficit) at beginning of year
(50,994,267)
(58,455,956)
Net assets (deficit) at end of year
$ (45,452,756)
(50,994,267)
See accompanying notes to the basic financial statements.
3
LA QUINTA REDEVELOPMENT AGENCY
Governmental Funds - Balance Sheet
June 30, 2002
Assets
Cash and investments
Cash and investments
with fiscal agent
Accounts receivable
Prepaid items
Interest receivable
Notes receivable
Due from other funds (note 4)
Due from the City of La Quinta
Due from other governments
Advances to other funds (note 5)
Advances to the City of La Quinta
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Accrued salaries and benefits
Deferred revenue
Deposits payable
Due to other funds (note 4)
Due to the City of La Quinta
Due to other governments
Advances from other funds (note 5)
Advances from the City of
La Quinta (notes 8 and 13)
Total liabilities
Fund balances:
Reserved for:
Bond projects
Debt service
Prepaid items
Notes receivable
Advances to other funds
Advances to the City of La Quinta
Unreserved, reported in:
Special Revenue Funds
Low/Moderate
Low/Moderate Low/Moderate
Low/Moderate
Income Housing -
Income Housing - Bond -
Bond -
PA No. 1
PA No. 2 PA No. 1
PA No. 2
$ 3,278,978
4,633,313 -
342,643
- - 213,022 2,030,747
106,084 - - -
3,009,966 10,205,840 - -
- - - 2,538
72,504 66,138 - -
- 39,135 - -
$ 6,467,532 14,944,426 213,022 2,375,928
$ 34,496 26,805 - -
873,855 10,205,840 - -
15,788 - - -
5,907 5,688 150,348 -
930,046 10,238,333 150,348
2,136,111 - - -
- 39,135 - -
Special revenue funds 3,401,375 4,666,958
Debt service funds - -
Capital projects funds - -
Total fund balances 5,537,486 4,706,093
Total liabilities and fund balances $ 6,467,532 14,944,426
See accompanying notes to the basic financial statements.
4
62,674 2,375,928
62,674 2,375,928
213,022 2,375,928 n
GOP)
l�
U ��.
Debt Service Funds Capital Projects Funds
Redevelopment Redevelopment Redevelopment Redevelopment
Agency - Agency - Agency - Agency - Totals
PA No. 1 PA No. 2 PA No. 1 PA No. 2 2002 2001
9,584,722 1,768,561 - 1,750,058 21,358,275 18,662,739
115,367
290,015
9,990,104
97,068
4,907,565
5,004,633
264,553
2,033,114
2,538
39,135
7,614,325
7,655,998
37,087,727
2,176,682
1,249,728
40,514,137
20,452
2,642,491
2,662,943
- - 37,087,727
4,985,471 - -
1,249,728
(5,622,884) -
- - (486,261)
4,985,471 (5,622,884) 37,851,194
9,990,104 2,033,114 40,514,137
968
391,447,831
9,714,808
60,900
166,984
149,199
-
-
3,515
-
-
833
-
13,215,806
13,488,554
-
2,538
100,000
117,424
2,294,106
-
-
693,210
260,388
-
39,135
551,038
-
1,249,728
-
1,929,350
78,467,613
42,931,074
9,486
188,307
55,226
-
-
16,469
-
11,079,695
11,378,904
-
15,788
14,283
-
2,538
100,000
1,426
2,805,860
767,170
-
-
730,884
-
39,135
551,038
- 12,521,890 -
10,912 26,653,213 13,613,974
968 37,088,695
9,512,701
- 4,985,471
4,583,507
- -
3,515
- 2,136,111
2,109,650
- 39,135
551,038
- 1,249,728
-
- 10,506,935
6,271,969
- (5,622,884)
-
1,917,470 1,431,209
6,284,720
1,918,438 51,814,400 29,317,100
1,929,350 78,467,613 42,931,074
021.
5
Ui�
LA QUINTA REDEVELOPMENT AGENCY
Governmental Funds
Reconcilation of the Balance Sheet of Governmental Funds to
the Statement of Net Assets
June 30, 2002
Fund balances of governmental funds $ 51,814,400
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets, net of depreciation, have not been included
as financial resouces in governmental fund activity. 52,094,306
Long term debt from the General Long Term Debt Account Group
that have not been included in the governmental fund activity. (157,513,008)
Accrued interest payable for the current portion of interest due on
Long term debt has not been reported in the governmental funds. (2,222,309)
Revenues that are measurable but not available. Amounts are recorded
as deferred revenue under the modified accrual basis of accounting. 10,373,855
Net assets of governmental activities $ (45,452,756)
See accompanying notes to the basic financial statements. O
6 t
(This page intentionally left blank)
��5
LA QUINTA REDEVELOPMENT AGENCY
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
Year ended June 30, 2002
Special Revenue Funds
Low/Moderate Low/Moderate Low/Moderate Low/Moderate
Income Housing - Income Housing - Bond - Bond -
PA No. 1 PA No. 2 PA No. 1 PA No. 2
Revenues:
Taxes
$ 4,488,497
2,025,212
-
-
Developer fees
48,584
-
-
-
Investment income
266,303
115,748
62,674
16,964
Rental income
321,145
-
-
-
Miscellaneous revenues
25,417
-
-
-
Total revenues
5,149,936
2,140,960
62,674
16,964
Expenditures:
Current:
Planning and development
3,729,333
682,703
-
-
Capital outlay
-
-
-
-
Debt service:
Principal
-
-
-
-
Interest
-
-
-
-
Payments under pass -through
obligations
-
-
-
-
Total expenditures
3,729,333
682,703
-
-
Excess (deficiency) of
revenues over (under)
expenditures
1,420,603
1,458,257
62,674
16,964
Other financing sources (uses):
Proceeds of tax allocation bonds
-
-
-
-
Proceeds of advances from City
-
-
-
-
Sale of capital assets
146,603
-
-
-
Transfers in (note 15)
-
-
-
-
Transfers out (note 15)
(1,737,006)
(338,442)
-
-
Transfers to the City of La Quinta
-
(164,568)
(832,930)
(223,917)
Total other financing
sources (uses)
(1,590,403)
(503,010)
(832,930)
(223,917)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
(169,800)
955,247
(770,256)
(206,953)
Fund balances (deficit) at
beginning of year, as restated (note 16)
5,707,286
3,750,846
832,930
2,582,881
Fund balances (deficit) at end of year
$ 5,537,486
4,706,093
62,674
2,375,928
0�4
See accompanying notes to the basic financial statements.
616
8
Debt Service Funds Capital Projects Funds
Redevelopment Redevelopment Redevelopment Redevelopment
Agency - Agency - Agency - Agency -
PA No. 1 PA No. 2 PA No. 1 PA No. 2
Totals
2002 2001
17,953,949
8,100,847
-
-
32,568,495
26,273,564
-
-
-
-
48,584
50,848
344,259
28,769
728,658
72,622
1,635,997
1,518,648
-
-
-
-
321,145
388,121
-
-
-
-
25,417
25,096
18,298,208
8,129,616
728,658
72,622
34,599,638
28,256,277
285,551
123,147
4,892,719
227,402
9,940,855
5,545,313
-
-
-
-
-
46,040
10,126,122
947,956
-
-
11,074,078
3,505,075
5,255,819
1,286,179
-
-
6,541,998
5,458,291
8,194,449
5,474,717
-
-
13,669,166
10,949,381
23,861,941
7,831,999
4,892,719
227,402
41,226,097
25,504,100
(5,563,733)
297,617
(4,164,061)
(154,780)
(6,626,459)
2,752,177
-
-
88,000,000
-
88,000,000
-
-
-
-
-
-
1,034,867
-
-
-
-
146,603
406,461
11,090,291
338,442
-
-
11,428,733
7,196,643
-
-
(9,353,285)
-
(11,428,733)
(7,196,643)
-
-
(44,936,017)
(1,481,875)
(47,639,307)
(5,277,463)
11,090,291
338,442
33,710,698
(1,481,875)
40,507,296
(3,836,135)
5,526,558
636,059
29,546,637
(1,636,655)
33,880,837
(1,083,958)
(541,087)
(6,258,943)
8,304,557
3,555,093
17,933,563
30,401,058
4,985,471
(5,622,884)
37,851,194
1,918,438
51,814,400
29,317, Qr}C
.l
1
9
LA QUINTA REDEVELOPMENT AGENCY
Reconcilation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Year ended June 30, 2002
Net changes in fund balances - total governmental funds
Amounts reported for governmental activities in the statement of
activities is different because:
Governmental funds report capital outlay as expenditures. However, in the
statement of activities, th cost of those assets is allocated over their estimated
useful lives as depreciation expense. This is the amount by which capital
outlays exceeded depreciation in the current period.
Governmental funds report gross proceeds from property sales . In the
statement of activities, proceeds are netted against book value.
Proceeds of long term debt is recorded as an other financing source in
governmental funds. In the statement of activities, new debt increases liabilities
Repayment of bond principal is an expenditure in the governmental funds,
but the repayment reduces long-term liabilities in the statement of net assets
Bond issuance costs are recorded as an expenditure in the governmental
funds while full accrual requires the amortization of these costs
over the life the debt.
The statement of net assets includes accrued interest on long term debt.
Revenues that are measurable but not available. Amounts are not recorded
as revenues under the modified accrual basis of accounting.
Changes in net assets of governmental activities
See accompanying notes to the basic financial statements.
$ 33,880,837
42,492,987
(168,000)
(88,000,000)
11,074,078
3,485,164
(845,678)
3,622,123
$ 5,541,511
0 ? A
10
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
Year ended June 30, 2002
(1) Summary of Significant Accounting Policies
The following is a summary of the significant accounting policies of the La Quinta
Redevelopment Agency:
(a) Organization and Tax Increment Financing
Redevelopment Goals and Objectives
The general objective of the Redevelopment Plan adopted by the Agency is to
encourage investment in the Redevelopment Project Areas by the private sector. The
Redevelopment Plan provides for the demolition of buildings and improvements, the
relocation of any displaced occupants, and the construction of streets, parking
facilities, utilities and other public improvements. The Redevelopment Plan also
includes the ability to redevelop land by private enterprise or public agencies, the
rehabilitation of structures, the rehabilitation or construction of single family and low
and moderate income housing, and participation by owners and tenants of properties in
the Redevelopment Project.
Redevelopment Project Areas
The Agency has established two redevelopment project areas. On November 29, 1983
the City Council approved and adopted the Redevelopment Plan for the La Quinta
Redevelopment Project Area No. 1. On May 16, 1989 the City Council approved and
adopted the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2.
These plans provide for the elimination of blight and deterioration that was found to
exist in the project areas.
Tax Increment Financing
The Law provides a means for financing redevelopment projects based upon an
allocation of taxes collected within a redevelopment project. The assessed valuation of
a redevelopment project last equalized prior to adoption of a redevelopment plan or
amendment to such redevelopment plan, or "base roll", is established and, except for
any period during which the assessed valuation drops below the base year level, the
taxing bodies, thereafter, receive the taxes produced by the levy of the current tax rate
upon the base roll. Taxes collected upon any increase in assessed valuation over the
base roll ("tax increment") are paid and may be pledged by a redevelopment agency to
the repayment of any indebtedness incurred in financing or refinancing a
redevelopment project. Redevelopment agencies themselves have no authority to levy
property taxes.
11
0?7
i� l
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the Agency are composed of the following:
• Government -wide financial statements
• Fund financial statements
• Notes to the financial statements
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements include
separate columns for the governmental and business -type activities of the primary
government (including its blended component units), as well as its discreetly presented
component units. The La Quinta Redevelopment Agency has no business -type
activities or discretely presented component units. Eliminations have been made in the
Statement of Activities so that certain allocated expenses are recorded only once (by
the function to which they were allocated). However, general government expenses
have not been allocated as indirect expenses to the various functions of the Agency.
The accompanying government -wide financial statements for the Agency present
negative net assets because the primary activity of the Agency is to issue debt to
construct infrastructure that will be owned and maintained by the City.
Government -wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic resources
measurement focus, all (both current and long-term) economic resources and
obligations of the reporting government are reported in the government -wide financial
statements. Basis of accounting refers to when revenues and expenditures are
recognized in the accounts and reported in the financial statements. Under the accrual
basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting
from exchange and exchange -like transactions are recognized when the exchange takes
place. Revenues, expenses, gains, losses, assets, and liabilities resulting from
nonexchange transaction are recognized in accordance with the requirements of GASB
Statement No. 33.
o?g
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Program revenues include charges for service and payments made by parties outside of
the reporting government's citizenry if that money is restricted to a particular program.
Program revenues are netted with program expenses in the statement of activities to
present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the government -wide
financial statements, rather than reported as an expenditure. Proceeds of long-term
debt are recorded as a liability in the government -wide financial statements, rather than
as an other financing source. Amounts paid to reduce long-term indebtedness of the
reporting government are reported as a reduction of the related liability, rather than as
an expenditure.
Fund Financial Statements
The underlying accounting system of the Agency is organized and operated on the
basis of separate funds, each of which is considered to be a separate accounting entity.
The operations of each fund are accounted for with a separate set of self -balancing
accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or
expenses, as appropriate. Governmental resources are allocated to and accounted for in
individual funds based upon the purposes for which they are to be spent and the means
by which spending activities are controlled.
Fund financial statements for the primary government's governmental, proprietary,
and fiduciary funds are presented after the government -wide financial statements.
These statements display information about major funds individually and nonmajor
funds in the aggregate for governmental and enterprise funds. Fiduciary statements
include financial information for fiduciary funds and similar component units.
Fiduciary funds primarily represent assets held by the Agency in a custodial capacity
for other individuals or organizations. The Agency has no nonmajor funds, enterprise
funds, or fiduciary funds.
Governmental Funds
In the fund financial statements, governmental funds and agency funds are presented
using the modified -accrual basis of accounting. Their revenues are recognized when
they become measurable and available as net current assets. Measurable means that
the amounts can be estimated, or otherwise determined. Available means that the
amounts were collected during the reporting period or soon enough thereafter to be
available to finance the expenditures accrued for the reporting period. The Agency
uses a sixty day availability period.
tr
13 ! �_ i
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Revenue recognition is subject to the measurable and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related goods or
services are provided). Locally imposed derived tax revenues are recognized as
revenues in the period in which the underlying exchange transaction upon which they
are based takes place. Imposed non -exchange transactions are recognized as revenues
in the period for which they were imposed. If the period of use is not specified, they
are recognized as revenues when an enforceable legal claim to the revenues arises or
when they are received, whichever occurs first. Government -mandated and voluntary
non -exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the current
financial resources measurement focus. This means that only current assets and
current liabilities are generally included on their balance sheets. The reported fund
balance (net current assets) is considered to be a measure of "available spendable
resources." Governmental fund operating statements present increases (revenues and
other financing sources) and decreases (expenditures and other financing uses) in net
current assets. Accordingly, they are said to present a summary of sources and uses of
"available spendable resources" during a period.
Non -current portions of long-term receivables due to governmental funds are reported
on their balance sheets in spite of their spending measurement focus. Special reporting
treatments are used to indicate, however, that they should not be considered "available
spendable resources," since they do not represent net current assets. Recognition of
governmental fund type revenues represented by noncurrent receivables are deferred
until they become current receivables. Noncurrent portions of other long-term
receivables are offset by fund balance reserve accounts.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities. Since
they do not affect net current assets, such long-term amounts are not recognized as
governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year
that resources were expended, rather than as fund assets. The proceeds of long-term
debt are recorded as an other financing sources rather than as a fund liability. Amounts
paid to reduce long-term indebtedness are reported as fund expenditures.
When both restricted and unrestricted resources are combined in a fund, expenses are
considered to be paid first from restricted resources, and then from unrestricted
resources.
14
010
6 � ka
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(c) Activities in Major Funds
The following funds are presented as major funds in the accompanying basic financial
statements:
Special Revenue, Low and Moderate Income Housing P.A. No. 1 and No. 2 Funds —
To account for the required 20% set aside of property tax increments that is legally
restricted for increasing or improving housing for low and moderate income
households.
Special Revenue, Low and Moderate Bond Fund P.A. No. 1 and No. 2 Funds — To
account for bond proceeds and expenditures of bond -financed low and moderate
income housing programs.
Debt Service Funds, P.A. No. 1 and No. 2 — To account for the accumulation of
resources for the payment of debt service for bond principal, interest and trustee
fees.
Capital Projects Funds, P.A. No. 1 and No. 2 — To account for the bond proceeds,
interest and other funding that will be used for development, planning, construction
and land acquisition.
"Total fund balances" of the Agency's governmental funds of $51,814,400 differs
from "net assets" of governmental activities of $(45,452,756) reported on the
Statement of Net Assets. The difference primarily results from the long-term economic
focus of the Statement of Net Assets versus the current financial resources focus of the
governmental funds balance sheets.
Reclassifications and Eliminations
Interfund balances must generally be eliminated in the government -wide statements.
Due to/from other funds $ 2,538
Advances from/to other funds 39,135
Total reclassifications and eliminations 41 673
15
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(d) Explanation of Differences between Governmental Funds
Balance Sheet and the Statement of Net Assets
Total
Governmental
Capital
Accumulated
Funds
Assets
Depreciation
Assets:
Cash and investments
$ 21,358,275
-
-
Cash with fiscal agent
39,447,831
-
-
Accounts receivable
166,984
-
-
Notes receivable
13,215,806
-
-
Due from other funds
2,538
-
-
Due from the City of La Quinta
2,294,106
-
-
Due from other governments
693,210
-
-
Advances to other funds
3 9,13 5
-
-
Advances to the City of La Quinta
1,249,728
-
-
Land
-
51,450,306
-
Buildings, net
-
840,000
(196,000)
Total assets
$ 78,467,613
52,290,306
(196,000)
Liabilities:
Accounts payable
$ 188,307 - -
Interest payable
- - -
Deferred revenue
11,079,695 - -
Deposits payable
15,788 - -
Due to other funds
2,538 - -
Due to the City of La Quinta
2,805,860 - -
Advances from other funds
39,135 - -
Advances from the City of La Quinta
12,521,890 - -
Long term liabilities
- - -
Total liabilities
26,653,213 - -
Fund balances/net assets
51,814,400 52,290,306 (196,000)
Total liabilities and fund
balances/net assets $ 78,467,613 52,290,306 (196,000)
16�
Long-term
Certain
Reclassifications
Statement of
Debt Interest
Deferred
and
Net Assets
Transactions Payable
Revenue
Eliminations
Totals
21,358,275
3 9,447, 831
166,984
(705,840) - 12,509,966
_ - - (2,538) -
2,294,106
693,210
(39,135) -
1,249,728
51,450,306
_ - 644,000
(705,840) (41,673) 129,814,406
- - - 188,307
2,222,309 - - 2,222,309
- (11,079,695) - -
- 15,788
(2,538) -
- 2,805,860
(39,135) -
12,521,890
157,513,008 - - - 157,513,008
157,513,008 2,222,309 (11,079,695) (41,673) 175,267,162
(157,513,008) (2,222,309) 10,373,855 - (45,452,756)
705,840 (41,673) 129,814,406
0 ')
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
The "net change in fund balances" for governmental funds of $33,880,837 differs from
the "change in net assets" for governmental activities of $5,541,511 reported on the
Statement of Activities. The difference primarily results from the long term economic
focus of the Statement of Activities versus the current financial resources focus of the
governmental funds balance sheets.
Reclassifications and Eliminations
Interfund balances must generally be eliminated in the government -wide statements.
Transfers to/from other funds $ 11,428,733
Reclassification of pass -through payments 13,669,166
Total reclassifications and eliminations $ 25,097,899
0'?4
18
u�6
(This page intentionally left blank.)
19
0 ;0- 7
LA QUI TA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(e) Explanation of Differences between Governmental Funds
Operating Statements and the Statement of Activities
Revenues:
Taxes
Developer fees
Investment income
Rental income
Miscellaneous revenues
Total revenues
Expenditures:
Current:
Planning and development
Debt service:
Principal
Interest
Payments under pass -through
obligations
Total expenditures
Other financing sources (uses):
Proceeds of tax allocation bonds
Sale of capital assets
Transfers in
Transfers out
Transfers to the City of La Quinta
Total other financing sources (uses)
Net change in fund balances/net assets
Fund balances/net assets,
beginning of year
Fund balances/net assets,
end of year
Total
Governmental Capital Accumulated
Funds Assets Depreciation
$ 32,568,495 - -
48,584 - -
1,635,997 - -
321,145 - -
25,417 - -
34,599,638 - -
9,940,855 - 28,000
11,074,078 - -
6,541,998 - -
13,669,166 - -
41,226,097 - 28,000
88,000,000
- -
146,603
(176,000) 8,000
11,428,733
- -
(11,428,733)
- -
(47,639,307)
42,520,987 -
40,507,296
42,344,987 8,000
33,880,837
42,344,987 (20,000)
17,933,563 9,945,319 176,000
$ 51,814,400 52,290,306 196,000 O *�
20
Long-term Certain
Reclassifications
Statement
Debt Interest Deferred
and
of Activities
Transactions Payable Revenue
Eliminations
Totals
- - -
(13,669,166)
18,899,329
- - 3,500,000
-
3,548,584
- - 122,123
-
1,758,120
(3,485,164) -
(11,074,078) -
845,678
(14,559,242) 845,678
(88,000,000) -
321,145
25,417
3,622,123 (13,669,166) 24,552,595
6,483,691
7,3 87,676
(13,669,166) -
- (13,669,166) 13,871,367
(88,000,000) - -
(73,440,758) (845,678) 3,622,123
(84,072,250) 1,376,631 6,751,732
(157,513,008) 2,222,309 10,373,855
21
(21,397)
(11,428,733)
11,428,733 -
- (5,118,320)
(5,139,717)
5,541,511
(50,994,267)
(45,452,756) 7
w.
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(f) Cash and Investments
For financial reporting purposes, investments are adjusted to their fair value whenever
the difference between fair value and the carrying amount is material.
Changes in fair value that occur during a fiscal year are recognized as investment
income reported for that fiscal year. Investment income includes interest earnings,
changes in fair value, and any gains or losses realized upon the liquidation or sale of
investments.
(g) Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical records
are available and at an estimated historical cost where no historical records exist.
Contributed fixed assets are valued at their estimated fair market value at the date of
the contribution. Generally, fixed asset purchases in excess of $500 are capitalized if
they have an expected useful life of three years or more. Buildings are depreciated
over a useful life of thirty years.
Capital assets include public domain (infrastructure) general fixed assets consisting of
certain improvements including roads, streets, sidewalks, medians, and storm drains.
(2) Cash and Investments
Cash and investments held by the Agency at June 30, 2002 consisted of the following:
Equity in State of California Local Agency Investment Fund $ 6,267,584
Equity in City cash and investment pool 15,090,691
Total cash and investments held by the Agency $21,358,275
Cash and investments held by fiscal agent at June 30, 2002 consisted of the following:
Mutual funds - First American Treasury Obligations $39,447,831
Total cash and investments held by fiscal agent $39,447,831
The Agency is authorized by the City's investment policy to invest in the following types of
investments:
22
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Investment Type
Government Pools
U.S. government and agency securities
Commercial Paper
Mutual Funds
Certificates of Deposit
Restriction
$30 million and 20% of portfolio
100% of portfolio
$2 million per ,issuer, and 90 days
20%
60%
All investments have a maximum maturity of two years.
Investments of cities in securities are classified in three categories to give an indication of
the level of custodial risk assumed by the entity.
Category 1 - includes investments that are insured or registered or for which the securities
are held by the Agency or the Agency's custodial agent (which must be a different
institution other than the party through which the Agency purchased the securities) in the
Agency's name. Investments held "in the Agency's name" include securities held in a
separate custodial or fiduciary account and identified as owned by the Agency in the
custodian's internal accounting records.
Category 2 - includes uninsured and unregistered investments for which the securities are
held in the Agency's name by the dealer's agent (or by the trust department of the dealer if
the dealer was a financial institution and another department of the institution purchased the
securities for the Agency.)
Category 3 - includes uninsured and unregistered investments for which the securities are
held by the dealer's trust department or agent, but not in the Agency's name. Category 3
also includes all securities held by the broker -dealer agent of the Agency (the party that
purchased the securities for the Agency) regardless of whether or not the securities are being
held in the Agency's name.
23 6 ." 1
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Carrying
Category Amount
1 2 3
Investments subject to categorization $ - - -
Investments held by the City not subject to categorization:
Investment in State of California Local Agency Investment Fund 6,267,584
Equity in City cash and investment pool 15,090,691
Investments held by fiscal agent not subject to categorization:
Investment in mutual funds:
First American Treasury Obligation Fund 39,447,831
60,806,106
The Agency is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by California Government Code Section 16429 under the oversight of the
Treasurer of the State of California. The fair value of the City's investment in this pool is
reported in the accompanying financial statements at amounts based upon the City's pro-rata
share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the
amortized cost of that portfolio). The balance available for withdrawal is based on the
accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage -
backed securities, other asset -backed securities, loans to certain state funds, and floating rate
securities issued by federal agencies, government -sponsored enterprises, and corporations.
010
24 r 0
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
Outstanding
(3) Notes Receivable Balance at
June 30, 2002
In September 1994, the Agency sold certain real property to
LINC Housing for $2,112,847. The property was used to
construct single-family homes and rental units to increase the
City's supply of low and moderate income housing. The note
bears interest at 6% per annum and is due in full on June 15,
2029. $ 2,909,244
In December 2000, the Agency entered into an agreement with
DC&TC, LLC to receive $9,500,000 as a reimbursement for
Agency costs incurred for the construction of infrastructure
related to the development of senior apartments. Payments are
due to the Agency in the amount of annual positive cash flow
generated by the rental of the units. All unpaid principal and
interest on the note are due fifty-five years after the completion
of the project. Interest on the note accrues at three percent per
annum. 9,500,000
Other notes receivable 100,722
Total notes receivable $12,509,966
(4) Due From and To Other Funds
Current interfund receivables and payables balances at June 30, 2002 are as follows:
Due to Special Revenue — Low/Moderate Bond — PA No. 2 Fund from:
Debt Service Project Area No. 2
2 538
The interfund receivable and payable is to cover short-term cash deficiencies.
0.41
25 J
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
5) Advances To and From Other Funds
Long-term interfund receivables and payables at June 30, 2002 are as follows:
Advances from Special Revenue — Low/Moderate Income Housing — Project Area No. 2
Fund to:
Debt Service Project Area No. 2 $39,135
The Agency elected to borrow $39,135 from Project Area No. 2, of the Low/Moderate
Income Housing Fund to make the ERAF payment in fiscal year ended June 30, 1994. The
Redevelopment Agency Project Area No. 2 Debt Service Fund will repay the Low/Moderate
Income Housing Special Revenue Fund. The Agency has ten years to repay this loan. The
Agency has elected to make repayment in the tenth year (2003-04).
(6) Capital Assets
Capital asset activity for the year ended June 30, 2002 was as follows:
Buildings
Total cost of depreciable assets
Less accumulated depreciation for:
Buildings
Net depreciable assets
Capital assets not depreciated:
Land
Capital assets, net
7) ProDertv Taxes
Balances at
Balances at
June 30, 2001 Additions
Deletions
June 30, 2002
$ 880,000 -
(40,000)
840,000
880,000 -
(40,000)
840,000
(176,000) (28,000)
8,000
(196,000)
704,000 (28,000)
(32,000)
644,000
9,065,319 42,520,987 (136,000) 51,450,306
$9,769,319 42,492 987 �168 000) 52z094,306
Under California law, property taxes are assessed and collected by the counties up to 1 %
of assessed value, plus other increases approved by the voters. The property taxes are
recorded initially in a pool, and are then allocated to the cities based on complex
formulas. Accordingly, the City of La Quinta accrues only those taxes that are received
from the County within sixty days after year-end.
U4'
26
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(7) Property Taxes, (Continued)
Lien date January 1
Levy date July 1
Due dates November 1 and February 1
Collection dates December 10 and April 10
The La Quinta Redevelopment Agency's primary source of revenue comes from property
taxes. Property taxes allocated to the Agency are computed in the following manner:
(a) The assessed valuation of all property within the project area is determined on the
date of adoption of the Redevelopment Plan.
(b) Property taxes related to the incremental increase in assessed values after the
adoption of the Redevelopment Plan are allocated to the Agency; all taxes on the
"frozen" assessed valuation of the property are allocated to the City and other
districts.
The Agency has no power to levy and collect taxes and any legislative property tax shift
might reduce the amount of tax revenues that would otherwise be available to pay the
principal of, and interest on, debt. Broadened property tax exemptions could have a
similar effect. Conversely, any increase in the tax rate or assessed valuation, or any
reduction or elimination of present exemptions would increase the amount of tax
revenues that would be available to pay principal and interest on debt.
0111
27
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(8) Long -Term Liabilities
Long-term liability activity for the year ended June 30, 2002 was as follows:
Amounts
Balance at
Balance at
due within
June 30, 2001
Additions
Deletions
June 30, 2002
one year
Project Area No. 1:
1994 Tax Allocation Bonds
$ 20,865.000
-
(1,195,000)
19,670,000
1.260,000
1995 Housing Tax Allocation Bonds
16,625,149
-
(291.277)
16.333,872
307.022
1998 Tax Allocation Bonds
15,760,000
-
-
15,760,000
-
2001 Tar Allocation Bonds
-
46,124,932
46,124,932
-
2002 Tar Allocation Bonds
-
38,389,904
-
38,389,904
Pass -through agreements payable:
Due to County of Riverside
8,639,845
-
(8,639,845)
-
-
Coachella Valley Unified School District
8,747,405
-
(684,233)
8,063,172
697,918
Advances from City of La Quinta
4,461,423
446,142
-
4,907.565
-
Project Area No. 2:
1995 Housing Tax Allocation Bonds
4,494,851
-
(78,723)
4,416,128
82,978
1998 Tax Allocation Bonds
6,590,000
-
(85,000)
6.505.000
90.000
Due to County of Riverside
2,350,000
-
(100,000)
2,250,000
100,000
Advances from City of La Quinta
6,922.1 14
692,211
7.614,325
Total long-term liabilities
$ %5 455 787
85653J89
(11 074,078)
1.70 034,898
2 537,918
(9) Tax Allocation Bonds
Tax Allocation Refunding Bonds, Series 1994
Tax allocation refunding bonds, Series 1994, in the amount of $26,665,000 were issued by
the Agency to refund the outstanding aggregate principal amount of the Agency's Tax
Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance
certain capital improvements within the La Quinta Redevelopment Project Area No. 1.
Interest rates on the bonds ranges from 3.80% to 8% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the bonds
are payable solely from pledged tax increment revenues. The bonds are not subject to
redemption prior to maturity. There are certain limitations regarding the issuance of parity
debt as further described in the official statement. A portion of the proceeds was used to
obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of
outstanding bonds at June 30, 2002 is $19,670,000.
014
28 0 :; 6
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(9) Tax Allocation Bonds, (Continued)
Tax Allocation Refunding Bonds, Series 1998 - Project Area No. 1
Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued
by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax
Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain
capital improvements within the La Quinta Redevelopment Project Area No. 1.
Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the
bonds are payable from pledged tax increment revenues. There are certain limitations
regarding the issuance of parity debt as further described in the official statement.
Term Bonds maturing September 1, 2028 are subject to mandatory sinking fund
redemption, in part by lot, on September 1, 2013 and on each September 1 thereafter,
through September 1, 2028, at a price equal to the principal amount thereof plus accrued
interest. A portion of the proceeds was used to obtain a surety agreement to satisfy the
bond reserve requirement. The principal balance of outstanding bonds at June 30, 2002 is
$15,760,000.
Tax Allocation Refunding Bonds, Series 1998 - Project Area No. 2
Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by
the Agency to refund the outstanding aggregate principal amount of the Agency's Tax
Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain
capital improvements within the La Quinta Redevelopment Project Area No. 2.
Interest rates on the bonds range from 3.75% to 5.25% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the
bonds are payable solely from pledged tax increment revenues of Project Area No. 2.
Term Bonds maturing September 1, 2028 and September 1, 2033 are subject to
mandatory sinking fund redemption, in part by lot, on September 1, 2009 and
September 1, 2019, respectively, and on each September 1 thereafter at a price equal to
the principal amount thereof plus accrued interest. There are certain limitations regarding
the issuance of parity debt as further described in the official statement. A portion of the
proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement.
The principal balance of outstanding bonds at June 30, 2002 is $6,505,000.
0 )
29 0 .:
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(9) Tax Allocation Bonds, (Continued)
Tax Allocation Bonds, Series 2001 — Project Area No. 1
On August 15, 2001, the Agency issued tax allocation bonds in the amount of
$48,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project
Area No. 1. The 2001 tax allocation bonds were issued at a discount of $422,400 and
issuance costs of $1,517,325.
The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature
on September 1, 2021 and $30,720,000 of term bonds that accrue interest at 5.18% and
mature on September 1, 2031. The interest and principal on the bonds are payable from
pledged tax increment revenues.
A portion of the proceeds were used to obtain a surety agreement to satisfy the bond
reserve requirement. The principal balance of outstanding bonds at June 30, 2002 is
$46,124,932 ($48,000,000 net of unamortized discount and issuance costs of $1,875,068).
Tax Allocation Bonds, Series 2002 — Project Area No. 1
On June 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000
to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1.
The 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs
of $1,250,096. At June 30, 2002, the unexpended balance of bond proceeds is
$37,087,727.
The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest
rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on
March 1 and September 1 of each year until maturity. Term bonds accrue interest at
5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023. The
interest and principal on the bonds are payable from pledged tax increment revenues.
A portion of the proceeds were used to obtain a surety agreement to satisfy the bond
reserve requirement. The principal balance of outstanding bonds at June 30, 2002 is
$38,389,904 ($40,000,000 net of unamortized discount and issuance costs of $1,610,096).
p4
30 0 8
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(9) Tax Allocation Bonds, (Continued)
The minimum annual requirements (including sinking fund requirements) to amortize tax allocation bonds as of
June 30, 2002 are as follows:
Project Area No. I
Project Area No. 2
1994 Tax Allocation Bonds
1998 Tax Allocation Bonds
2001 Tax Allocation Bonds
2002 Tax Allocation Bonds
1998 Tax Allocation Bonds
June 30
Principal Interest
Principal
Interest
Principal
Interest
Principal
Interest
Principal
Interest
2003
$ 1,260,000 1,360,855
-
819,520
-
2,430,720
-
1,433.076
90,000
330,747
2004
1,325,000 1,274,465
-
819,520
-
2,430,720
565,000
1,905.825
90.000
327,080
2005
1,430.000 1,182,140
-
819,520
-
2,430,720
575,000
1,895.131
95.000
323,264
2006
1,510.000 1,087,700
-
819,520
-
2,430,720
585,000
1.982.361
100,000
319,168
2007
1,620,000 973,455
-
819,520
-
2,430,720
600,000
1,867.091
105.000
314,785
2008
1,740.000 850,815
-
819,520
-
2,430,720
615,000
1.849.617
110,000
310,135
2009
1,865,000 719,233
-
819,520
-
2,430,720
635,000
1,829.914
115,000
305,184
2010
2,000.000 578,160
919,520
-
2,430,720
660,000
1,807.557
120.000
299,550
2011
2,145.000 426,868
-
819,520
-
2,430,720
680,000
1,782.926
125,000
293,272
2012
2.3 5,000 264,443
819,520
-
2,430,720
705.000
1,756.430
130,000
286,737
2013
2,470,000 90,155
819,520
-
2,430,720
735,000
1,727.981
140.000
279.819
2014
- -
655,000
802,490
1,565.000
2.391.595
705,000
1,695.656
145,000
272,516
2015
-
690,000
767.520
1,645,000
2.311.345
735,000
1,639.656
150.000
264,956
2016
- -
725,000
730,730
1,730,000
1226,970
770,000
1.622.031
160,000
257,013
2017
- -
765,000
691.990
1,815,000
2,138,345
810,000
1,582.531
170.000
248,556
2018
- -
800,000
651,300
1,905,000
2,045,345
855,000
1,540.906
175.000
239,716
2019
- -
845,000
608.530
2,000,000
1,947,720
895.000
1,497,156
185.000
230,491
2020
- -
890,000
563,420
2,100,000
1,845,220
940,000
1,451,281
195,000
220,631
2021
- -
935,000
515,970
2,205,000
1,737,595
985,000
1,403.156
205,000
210,131
2022
-
985,000
466,050
2,315,000
1,624,595
1,035,000
1,352.656
215,000
199,106
2023
-
1,035,000
413,530
2,430,000
1,504,755
1,090,000
1,299,531
230,000
187,425
2024
-
1,090,000
358,280
2,555,000
1,377,637
1,140,000
1,243,069
240,C00
175,097
2025
- -
1,145,000
300,170
2,685,000
1,244,018
1,200,000
1,183,106
255,000
162,094
2026
- -
1,205,000
239,070
2,820,000
1,103,640
1,265,000
1.119.941
265,000
148A44
2027
- -
1,265,000
174,850
2,965,000
956,123
1,330,000
1,053.444
280.000
134,138
2028
-
1,330,000
107,380
3,120,000
800,955
1,395,000
983,615
295,000
119,044
2029
-
1,400,000
36,400
3,275,000
637,882
1,470,000
910,200
310,000
103,163
2030
- -
-
-
3,445,000
466,523
3,015,000
795,272
325.000
86,494
2031
- -
-
-
3,620,000
286,365
3,170,000
636.781
345,000
68.906
2032
- -
-
3,805,000
97,027
3,335,000
470.091
360,000
50,400
2033
- -
-
-
7,505.000
192.316
380,000
30,975
2034
- -
-
-
-
400.000
10,500
$ 19.670,000 8,808,289 15,760,000 16,442.400 48.000,000 53,481,575 40.000,000 43.430.304 6,505,000 6,809.527
31
017
0 9
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(10) 1995 Housing Tax Allocation Bonds
La Quinta Redevelopment Project Areas Nos. 1 and 2 1995 Housing Tax Allocation
Bonds, were issued by the Agency, July 1, 1995, in the amount of $22,455,000 to
increase, improve and/or preserve the supply of low and moderate income housing in the
City.
Interest is payable semi-annually on March 1 and September 1 of each year commencing
March 1, 1996. Interest payments range from 4% to 6% per annum. The interest and
principal of the bonds are payable from pledged tax increment revenues of both project
areas.
Term Bonds maturing on September 1, 2025 are subject to mandatory sinking fund
redemption, in part by lot, on September 1, 2011 and on each September 1, thereafter,
through September 1, 2025, at a price equal to the principal amount plus accrued interest.
A portion of the proceeds was used to obtain a surety agreement to satisfy the bond
reserve requirement. There are certain limitations regarding the issuance of parity debt as
further described in the official statement. The principal balance of outstanding bonds at
June 30, 2002 is $20,750,000.
048
32 1 0 ! 0
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(10) 1995 Housing Tax Allocation Bonds, (Continued)
The minimum annual requirements (including sinking fund requirements) to amortize
housing tax allocation bonds as of June 30, 2002 are as follows:
1995 Housing TAB'S
June 30
Principal
Interest
2003
$ 390,000
1,202,820
2004
405,000
1,183,538
2005
425,000
1,162,000
2006
450,000
1,140,890
2007
530,000
1,115,502
2008
560,000
1,086,470
2009
590,000
1,055,125
2010
620,000
1,021,540
2011
655,000
985,840
2012
695,000
946,650
2013
735,000
903,750
2014
780,000
858,300
2015
825,000
810,150
2016
875,000
759,150
2017
925,000
705,150
2018
985,000
647,850
2019
1,040,000
587,100
2020
1,105,000
522,750
2021
1,170,000
454,500
2022
1,240,000
382,200
2023
1,315,000
305,550
2024
1,395,000
224,250
2025
1,475,000
138,150
2026
1,565,000
46,950
$20,750,000 18,246,175
n41
33 � �i
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(11) Due to County of Riverside
Project Area No. 2
Based on an agreement dated July 5, 1989 between the Agency and the County, until the
tax increment reaches $5,000,000 annually in Project Area No. 2, the Agency will pay to
the County 50% of the County portion of tax increment. At the County's option, the
County's pass -through portion can be retained by the Agency to finance new County
facilities or land costs that benefit the County and serve the La Quinta population. Per the
agreement, the Agency must repay all amounts withheld from the County. The tax
increment is to be paid to the County in amounts ranging from $100,000 to $250,000
over a payment schedule through June 30, 2015. Interest does not accrue on this
obligation. The balance at June 30, 2002 is $2,250,000.
The minimum annual requirement to amortize due to County of Riverside as of June 30,
2002 are as follows:
June 30
Principal
2003
$ 100,000
2004
100,000
2005
100,000
2006
100,000
2007
100,000
2008
150,000
2009
200,000
2010
200,000
2011
200,000
2012
250,000
2013
250,000
2014
250,000
2015
250,000
2 250 000
(12) Notes Payable to Coachella Valley Unified School District
An agreement was entered into in 1991 between the Agency, the City of La Quinta and
the Coachella Valley Unified School District (District), which provides for the payment
to the District a portion of tax increment revenue associated with properties within
District confines. Such payments are subordinate to other indebtedness of the Agency
incurred in furtherance of the Redevelopment Plan for Project Area No. 1. This tax
increment is paid to the District over a payment schedule through August 1, 2012 in
amounts ranging from $474,517 to $834,076 for a total amount of $15,284,042. Tax
increment payments outstanding at June 30, 2002 totaled $8,063,172. The District agrees
to use such funds to provide classroom and other construction costs, site acquisition,
school buses, expansion or rehabilitation of current facilities.
00
34 0, ��
2
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(12) Notes Payable to Coachella Valley Unified School District, (Continued)
The minimum annual requirements to amortize payable to Coachella Valley Unified School
District as of June 30, 2002 are as follows:
June 30
Principal
2003
$ 697,918
2004
711,877
2005
726,114
2006
740,636
2007
755,449
2008
770,558
2009
785,968
2010
801,688
2011
817,722
2012
834,076
2013
421,166
(13) Advances from the City of La Quinta
The City of La Quinta advances money to the Redevelopment Agency to cover operating
and capital shortfalls. There is no stipulated repayment date established for the City
advance. Interest accrues at 10% per annum. At June 30, 2002, the outstanding balances
for Project Area No. 1 and Project Area No. 2 are $4,907,565 and $7,614,325,
respectively.
(14) Pledged Tax Revenues
All tax revenues received by the Agency other than the amount required by law to be
deposited in a low and moderate income housing fund, are required to be used to meet
debt service requirements of the bond indentures before any payments may be made on
other obligations of the Agency.
05
35 iJ'1 v
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(15) Transfers In and Out
The following transfers were made during the year ended June 30, 2002:
Transfers to the Debt Service — Project Area No. 1 Fund from:
Capital Projects — Project Area No. 1 $ 9,353,285
Special Revenue — Low/Moderate Income
Housing — Project Area No. 1 1,737,006
11,090,291
Transfers to the Debt Service — Project Area No. 2 Fund from:
Special Revenue — Low/Moderate Income
Housing — Project Area No. 2 338,442
Total transfers $11,428,733
(16) Restatement of Fund Balances
The following fund balances were restated at July 1, 2001 as follows:
Fund balances at July 1, 2001
Debt Service Debt Service
PA No. 1 PA No. 2
$3,920,336 663,171
To record the effects of removing advances from
the City of La Quinta from the long-term debt
account group and recording the liability in the fund
responsible for repayment (4,461,423) (6,922,114)
Fund balances (deficit) at July 1, 2001, as restated (541,087) 6 258 943
05^
36
REQUIRED SUPPLEMENTARY INFORMATION
37
(This page intentionally left blank)
Q�
4
38
LA QUINTA REDEVELOPMENT AGENCY
Notes to Required Supplementary Information
Year ended June 30, 2002
(1) Budgets and Budgetary Accounting
The Agency adopts an annual budget prepared on the modified accrual basis of
accounting for its governmental funds. The City Manager or his designee is authorized to
transfer budgeted amounts between the accounts of any department. Revisions that alter
the total appropriations of any department or fund are approved by City Council.
Appropriations were reduced by $94,194 during the year. Prior year appropriations lapse
unless they are approved for carryover into the following fiscal year. Expenditures may
not legally exceed appropriations at the department level. Reserves for encumbrances are
not recorded by the City of La Quinta.
O, 7
39 0 ,1: 7
LA QUINTA REDEVELOPMENT AGENCY
Low/Moderate Income Housing Fund - PA No. 1
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2002
Variance with
Prior
Budget
Final Budget
Year
Original
Final
Actual
Positive (negative)
Actual
Revenues:
Taxes
$ 3,591,327
4,205,626
4,488,487
282,861
3,737,113
Developer fees
-
-
48,584
48,584
45,848
Investment income
200,000
50,000
266,302
216,302
96,383
Rental income
341,000
341,000
321,145
(19,855)
388,121
Miscellaneous revenues
-
-
25,418
25,418
25,096
Total revenues
4,132,327
4,596,626
5,149,936
553,310
4.292.561
Expenditures:
Current:
Planning and development
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Sale of capital assets
Transfers out
Total other financing
sources (uses)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures and
other financing uses
Fund balances at beginning of year
Fund balances at end of year
4,640,731 5,345,808 3,729,333 1,616,475
4,640,731 5,345,808 3,729,333 1.616,475
(508,404) (749,182) 1,420,603 2,169,785
150,000 150,000 146,603 (3,397)
(1,737,006) (3,951,649) (1,737,006) 2,214,643
(1,587,006) (3,801,649) (1,590,403) 2,211,246
1,265,008
3,265,008
1.027.553
406,461
(1.739.031)
0.332,570)
(2,095,410)
(4,550,831)
(169,800) 4,381,031
(305,017)
5,707,286
5,707,286
5,707,286 -
6.012.303
$ 3.611.876
1.156.455
5.537.486 4.381.031
5.707,286
6.18
40
LA QUINTA REDEVELOPMENT AGENCY
Low/Moderate Income Housing Fund - PA No. 2
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2002
Revenues:
Taxes
Investment income
Total revenues
Expenditures:
Current:
Planning and development
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Transfers out
Transfers to the City of La Quinta
Total other financing
sources (uses)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures and
other financing uses
Fund balances at beginning of year
Fund balances at end of year
Budget
Original Final
Variance with
Final Budget
Actual Positive (negative)
Prior
Year
A _-_-t
$ 1,452,654
1,841,110
2,025,212
184,102
1,517,600
20,700
20,700
115,747
95,047
185,625
1,473,354
1,861,810
2,140,959
279,149
1,703,225
2,827,167
2,027,896
682,702
1,345,194
837,605
2,827,167
2,027,896
682,702
1,345,194
837,605
(1,353,813) (166,086) 1,458,257 1,624,343 865,620
(338,442) (338,442) (338,442) -
- (2,449,259) (164,568) 2,284,691
(338,442) (2,787,701) (503,010) 2,284,691
(1,692,255) (2,953,787) 955,247
3,750,846 3,750,846 3,750,846
$ 2.058,591 797.059 4.706.093
3,909,034
3.909.034
(338,760)
(153,379)
(492,139)
373,481
3,377,365
3.750.846
0 F
s�
0,,9
41
LA QUINTA REDEVELOPMENT AGENCY
Low/Moderate Bond Fund - PA No. 1
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2002
Variance with Prior
Budget Final Budget Year
Original Final Actual Positive (negative) Actual
Revenues:
Investment income $ -
-
62,674
62,674
268,391
Total revenues -
-
62,674
62,674
268,391
Other financing sources (uses):
Transfers to the City of La Quinta -
(832,930)
(832,930)
-
(1.177,000)
Total other financing
sources (uses) -
(832,930)
(832,930)
-
(1,177,000)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures and
other financing uses -
(832,930)
(770,256)
62,674
(908,609)
Fund balances at beginning of year 832,930
832,930
_832,930
-
1,741,539
Fund balances at end of year $ 832.930
-
61674
62.674
832.930
v 0
42
LA QUINTA REDEVELOPMENT AGENCY
Low/Moderate Bond Fund - PA No. 2
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Year ended June 30, 2002
Variance with Prior
Budget Final Budget Year
Original Final Actual Positive (negative) Actual
Revenues:
Investment income $ - - 16,964 16,964 74,163
Total revenues - - 16,964 16,964 74,163
Other financing sources (uses):
Transfers to the City of La Quint -
(2,582,881)
(223,917)
2,358,964 -
Total other financing
sources (uses) -
(2,582,881)
(223,917)
2,358,964 -
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures and
other financing uses -
(2,582,881)
(206,953)
2,375,928 74,163
Fund balances at beginning of year 2,582,881
2,582,881
2,582,881
- 2,508,718
Fund balances at end of year $ 2,582,881
-
2,375,928
2,375,928 2,582,881
43
CONRADAND
CERTIFIED PUBLIC ACCOUNTANTS
ASSOCIATES, L.L.P. IRV NE,E, CALIFORNIA 92614
(949) 474-2020
Board of Directors Fax (949) 263-5520
La Quinta Redevelopment Agency
La Quinta, California
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
TN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS
We have audited the financial statements of the La Quinta Redevelopment Agency as of and for the
year ended June 30, 2002, and have issued our report thereon dated August 16, 2002. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the financial statements of the La Quinta
Redevelopment Agency are free of material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts and grants, noncompliance with which could
have a direct and material effect on the determination of financial statement amounts. Such
provisions include those provisions of laws and regulations identified in the Guidelines for
Compliance Audits of California Redevelopment Agencies, issued by the State Controller. However,
providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the La Quinta Redevelopment Agency's
internal control over financial reporting in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and not to provide assurance on the
internal control over financial reporting. Our consideration of the internal control over financial
reporting would not necessarily disclose all matters in the internal control over financial reporting
that might be material weaknesses. A material weakness is a condition in which the design or
operation of one or more misstatements in amounts that would be material in relation to the
financial statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over financial reporting and its operation that we consider to be
material weaknesses.
This report is intended solely for the information and use of the Audit committee, management, and
the State Controller and is not intended to be and should not be used by anyone other than those
specified parties.
��.uda-yt��SO�Q� L .L.�•
August 16, 2002
44 v F-
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
TWit 4 s4� Q"
AGENDA CATEGORY:
BUSINESS SESSION:
COUNCIL/RDA MEETING DATE: November 19, 2002
CONSENT CALENDAR:
ITEM TITLE: STUDY SESSION:
Approval of Amendment No. 1 to the Early PUBLIC HEARING:
Entry Agreement with California Intelligent
Communities, LLC
RECOMMENDATION:
Approve authorization for the Executive Director to execute Amendment No. 1 to
the Early Entry Agreement with California Intelligent Communities, LLC.
FISCAL IMPLICATIONS:
None.
CHARTER CITY IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
The La Quinta Redevelopment Agency authorized the Executive Director to enter
into an Exclusive Negotiation Agreement and Early Entry Agreement with California
Intelligent Communities, LLC (e.g., CIC) for property located at the southeast
corner of Miles Avenue and Washington Street at its regular meeting of July 16,
2002. CIC has indicated a desire to amend the Early Entry Agreement to allow
installation of, and access to, a sales trailer in an area on the site designated as the
Marketing Area (see Attachment 1). CIC plans to process a Temporary Use Permit
through the City's Community Development Department if this Amendment is
approved.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1 . Approve authorization for the Executive Director to execute Amendment No.
1 to the Early Entry Agreement with California Intelligent Communities, LLC;
0S1
2. Do not approve authorization for the Executive Director to execute
Amendment No. 1; or
3. Provide staff with alternative direction.
Respectfully submitted,
Mark Weiss
Assistant Executive Director
Approved for submission by:
Thomas P. Genovese
Executive Director
Attachment: 1 . Amendment to Early Entry Agreement
ATTACHMENT 1
AMENDMENT NO. 1 TO EARLY ENTRY AGREEMENT
THIS AMENDMENT NO. I TO EARLY ENTRY AGREEMENT ("Amendment No. I ")
is made and entered into as of the day of , 2002 ("Effective Date"), by and
between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic
("Agency"), and CALIFORNIA INTELLIGENT COMMUNITIES, LLC, a California limited
liability company ("Developer").
RECITALS
A. On or about , 2002, Agency and Developer entered into that certain
Exclusive Negotiation Agreement with Developer ("ENA"), pursuant to which Agency and
Developer agreed to negotiate the possible purchase of certain real property owned by Agency
and located in the City of La Quinta ("City"), California ("Property") for Developer's
development thereon of a commercial project consisting of a hotel, a medical facility, and a
single family residential development (collectively, the "Project").
B. Pursuant to the ENA, Agency and Developer entered into that certain Early Entry
Agreement ("Agreement") to permit Developer to enter onto and about the Property to perform
certain work specified therein, in accordance with the terms thereof.
C. Developer and Agency now wish to amend the Agreement to permit Developer to
temporarily park a trailer on a certain portion of the Property (the "Marketing Area") for
purposes of conducting sales and marketing activities therein regarding the Project. A depiction
of the Marketing Area is attached hereto and incorporated herein as Exhibit "I".
AMENDMENT:
In consideration of the foregoing Recitals and the covenants and promises hereinafter
contained, and for good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. The first paragraph of Section I of the Agreement is replaced, in its
entirety, with the following:
Agency hereby grants to Developer and its employees, agents, consultants, and
contractors ("Related Parties") a license for the term set forth in Paragraph 3
("License") to (i) enter upon the Property, for purposes of inspecting, surveying
and testing, including geotechnical, soils and environmental tests, on said real
property in connection with the proposed use of purchase thereof for development
of the Project; and (ii) park a sales trailer within the Marketing Area, for purposes
of conducting sales and marketing activities. The activities, testing, surveying,
and inspections described in items (1) and (ii) above are collectively referred to
herein as the "Permitted Work," and may be conducted daily, but only between
the hours of 8:00 a.m. and 6:00 p.m. Notwithstanding the above, at least forty-
eight (48) hours prior to any of the Related Parties entering the Property,
060
882/015610-0061
341282.01 PM02 I �� 4
Developer shall notify Agency of its intention of the same. Said notice shall be
provided by facsimile, addressed to the person listed in Section 8.8 hereof at the
number provided therein. Agency may reject any proposed entry by providing
telephonic notification to Developer at least twenty-four (24) hours prior to
Developer's proposed entry, to the person listed in Section 8.8 hereof, at the
number provided therein.
Section 2. Section 3 of the Agreement is replaced, in its entirety, with the following:
Term. The term of the License shall commence on full execution hereof and shall
terminate on the date the ENA is terminated or, if the parties enter into a
disposition and development agreement ("DDA") and the DDA is later
terminated, the date the DDA is terminated.
Section 3. The sales and marketing activities described in Section 1 of this
Amendment No. 1 shall be conducted in accordance with a Temporary Use Permit to be
processed by Developer through the City.
Section 4. Except as expressly provided in this Amendment No. 1, all of the terms,
conditions, and provisions set forth in the Agreement shall remain in full force and effect.
Section 5. The Effective Date of this Amendment No. 1 shall be the later of the dates
set forth next to the signatures of the parties hereto, after the parties hereto have signed this
Amendment No. 1, which date shall be inserted into the preamble to this Amendment No. 1.
Section 6. This Amendment No. 1 may be executed in counterparts, each of which,
when all the parties hereto have signed this Amendment No. 1, shall be deemed an original.
[END - SIGNATURE PAGE FOLLOWS]
am
IN WITNESS WHEREOF, the Agency and Developer have signed this Amendment No. I on the
respective dates set forth below.
"Agency"
LA QUINTA REDEVELOPMENT AGENCY
By:
Date: , 2002 Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta
Redevelopment Agency
"Developer"
CALIFORNIA INTELLIGENT
COMMUNITIES, LLC, a California limited
Date: , 2002 liability company
IN
Name:
Its:
U6>
006
EXHIBIT " 1 "
Depiction of Marketing Area
[See following page]
0FF
EXHIBIT 1
0 6 �
008
Tityl 4 e4& Q"
COUNCIL/RDA MEETING DATE: November 19, 2002
ITEM TITLE:
Consideration of the Comprehensive
Annual Financial Report for the year
ended June 30, 2002
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and file.
AGENDA CATEGORY:
BUSINESS SESSION: /
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
firq
c&ht 4 4 Q"
AGENDA CATEGORY:
BUSINESS SESSION: II
COUNCIL/RDA MEETING DATE: November 19, 2002
CONSENT CALENDAR:
ITEM TITLE: STUDY SESSION:
Consideration of Adoption of a Resolution Approving
an Affordable Housing Agreement by and Between PUBLIC HEARING:
the La Quinta Redevelopment Agency and Apartments
at La Quinta Village, LP for the Property Located on
the East Side of Eisenhower Drive, North of Calle
Tampico, and West of Avenida Bermudas
RECOMMENDATION:
Adopt a Resolution of the Redevelopment Agency that approves the Affordable
Housing Agreement, authorize the Agency Chair and Executive Director to execute the
necessary documents to fund up to $3,000,000 in expenditures from the Project Area
1 Low and Moderate Income Housing Accounts for this project, re -appropriate
$500,000 from Project Area 1 Low and Moderate Income Housing Account 245-903-
683-675, appropriate $675,000 from Project Area 1 Low and Moderate Income
Housing Account 245-000-300-290 fund balances, approve the transfer of
$1,825,000 from the Project Area 2 Low and Moderate Income Housing Account
funds, re -appropriate $1,000,000 from Project Area 2 Low and Moderate Income
Housing Account 246-906-684-000, and appropriate $825,000 from Project Area 2
Low and Moderate Income Housing Account 246-000-300-290 fund balances.
FISCAL IMPLICATIONS:
The Affordable Housing Agreement ("Agreement") (Attachment 1) will result in the
expenditure of $3,000,000 to reserve the 75 units at rents affordable to moderate -
income households for 55 years. These funds would be expended over a 24 month
period as the apartment community is constructed. The funds would be derived, in
part, from reallocating $1 .0 million from the Avenue 47/Adams Street Project and
$500,000 from the rehabilitation component of the La Quinta Housing Program. Since
the 2002-2003 Budget was adopted, the Avenue 47/Adams Street Project has been
structured wherein the Agency will not have to invest this amount to secure these
affordable units. This project was approved on October 15, 2002. Review of the
demand for property rehabilitation loans indicates there will not be a demand for the
$829,000 currently budgeted in this account during this fiscal year. If these funds are
reallocated, $329,000 will remain in this account to fund rehabilitation loans. The
remaining $1,500,000 will be derived from Low and Moderate Income Housing fund
balances that have not been appropriated to date. O F 9
G:\WPDOCS\CC Stf Rpts\CameoAFA.wpd.doc
BACKGROUND AND OVERVIEW:
Apartments at La Quinta Village, LP ("Participant") is a development affiliate of Cameo
Homes, a Southern California builder who has developed and managed apartment
communities for over 30 years. The Participant purchased the Eisenhower Drive/Calle
Tampico property from KSL Recreation, and on October 15, 2002, they received City
Council approval to develop up to 200 apartment units at this location. When the
entitlement applications were being processed Agency staff explored the opportunity
to secure units in this complex that would be affordable to moderate -income
households. After considerable negotiations, the Participant agreed to reserve 75 units
at affordable rents to said households for 55 years. In return the Agency would invest
$3,000,000 towards land, site improvement and building construction costs that
would lower both construction and permanent loan amounts and associated costs.
The reduced costs allow the Participant to reserve the 75 units for the 55-year period.
The rental apartment community will consist of 32 two-story buildings containing 200
one, two, and three -bedroom units, ranging from 670 to 1,1 17 square feet in size.
Amenities will include a community room, fitness center, billiards room, resident
business center, swimming pool and spa, and covered parking in a gated setting.
Seventy-five of the units will be covenanted for affordability for 55 years pursuant to
a recorded regulatory agreement for persons of moderate income (those earning
between 80% and 120% of the Riverside County median income).
The Agreement provides that the Participant will receive $3,000,000 in Agency
housing assistance that will be disbursed as follows:
• $800,000 when the Agreement is executed; this amount will be credited
toward the land costs associated with the 75 affordable units;
• $1,800,000 which disbursed to fund municipal permit and fees, grading, and
wet and dry utility infrastructure expenses associated with the 75 affordable
units;
• $400,000 at the issuance of a Certificate of Occupancy by the City of La
Quinta and release of the Agency's Construction Covenants.
These funds will be secured by a Deed of Trust that will be subordinated only to the
construction and permanent loans. When the Agency's Construction Covenants are
released, then the Agency's Deed of Trust will be released and covenants and
restrictions imposed by a regulatory agreement will insure that 75 units will remain
affordable to moderate -income households for 55 years.
The City and Redevelopment Agency must achieve State mandates that require a
housing mix that addresses the needs of all income groups. The Agency must secure
1,601 affordable units with long-term affordability covenants by 2004. To date the
Agency has secured 36% of this need, or 573 units. This proposal will assist in
moving closer to achieving the redevelopment requirements; however, additional 070
G:\WPDOCS\CC Stf Rpts\CameoAFA.wpd.doc
initiatives are needed. Staff is exploring new approaches that will be brought forward
for Agency Board consideration during the first quarter of 2003. Our goal is to identify
the means, and development or redevelopment opportunities, that will achieve the
Agency's redevelopment mandates.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1 . Adopt a Resolution of the Redevelopment Agency that approves the Affordable
Housing Agreement, authorize the Agency Chair and Executive Director to
execute the necessary documents to fund up to $3,000,000 in expenditures
from the Project Area 1 Low and Moderate Income Housing Accounts for this
project, re -appropriate $500,000 from Project Area 1 Low and Moderate Income
Housing Account 245-903-683-675, appropriate $675,000 from Project Area
1 Low and Moderate Income Housing Account 245-000-300-290 fund
balances, approve the transfer of $1,825,000 from the Project Area 2 Low and
Moderate Income Housing Account funds, re -appropriate $1,000,000 from
Project Area 2 Low and Moderate Income Housing Account 246-906-684-000,
and appropriate $825,000 from Project Area 2 Low and Moderate Income
Housing Account 246-000-300-290 fund balances.
2. Do not approve the Resolution approving the Affordable Housing Agreement;
or
3. Provide staff with alternative direction.
Respectfully submitted,
erry 7erman
:ommunity Development Director
Approved for submission by,
Thomas P. Genovese, Executive Director
Attachments:
1. Affordable Housing Agreement
G:\WPDOCS\CC SO Rpts\CameoAFA.wpd.doc
0'71.
RESOLUTION RDA NO.
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT
AGENCY APPROVING AN AFFORDABLE HOUSING
AGREEMENT BETWEEN THE AGENCY AND APARTMENTS
AT LA QUINTA VILLAGE, LP FOR THE PROPERTY
LOCATED ON THE EAST SIDE OF EISENHOWER DRIVE,
NORTH OF CALLE TAMPICO
WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a public
body, corporate and politic, organized and existing under the California Community
Redevelopment Law ("Health & Safety Code § 33000 et seq.) ("CRL"); and
WHEREAS, pursuant to the CRL, the Agency and the City Council of the
City of La Quinta ("City" or "City Council," as applicable) previously approved and
adopted the Redevelopment Plan, as amended ("Redevelopment Plan") for Project Area
No. 2 ("Project Area"); and
WHEREAS, a fundamental purpose of the CRL is to expand the supply of
low- and moderate -income housing (Health & Saf. Code, § 33071); and
WHEREAS, Health and Safety Code Section 33449 authorizes the Agency
to construct structures in order to provide housing for persons and families of low- or
moderate -income; and
WHEREAS, the Agency is engaged in activities leading to increasing and
improving the supply of affordable housing within and outside the Project Area; and
WHEREAS, Apartments at La Quinta Village, LP, a California limited
partnership ("Participant") recently acquired that certain real property located on the
east side of Eisenhower Drive, North of Calle Tampico, legally described as: Parcel 3
of Parcel Map 30721 as filed in Book 203, pages 30 through 31, inclusive of Parcel
Maps, Official Records of Riverside County, California (the "Property"); and
WHEREAS, Agency staff has negotiated an Affordable Housing
Agreement ("Agreement") with Participant which provides for (i) Participant's
construction of a rental apartment complex on the Property with related interior and
exterior amenities, including, but not limited to, a private recreation center (collectively,
the "Project"); and (ii) the Agency's provision of financial assistance to Participant in
the amount of Three Million Dollars ($3,000,000) from the Agency's Low and
Moderate Income Housing Tax Increment Fund ("Agency Assistance") to reimburse
Participant for a portion of Participant's cost to acquire the Property and to assist
Participant with developing the Project; and
G:\WPDOCS\CCReso-COA\CCResoCameo-AHA.doc 1 1 7
I
Resolution RDA No.
Apartments at La Quinta Village, LP
Adopted: November 19, 2002
WHEREAS, pursuant to the Agreement, Participant, as a condition to
receipt of the Agency assistance, shall record against the Property a Regulatory
Agreement and Declaration of Covenants and Restrictions that requires that not fewer
than seventy-five (75) of the apartment units (the "Restricted Units") in the Project be
rented at an affordable housing cost to, and occupied by, persons and families of
"moderate income," i.e., persons and families whose income does not exceed 120%
of the median income for Riverside County, adjusted for family size ("Moderate Income
Persons"); and
WHEREAS, the Agreement provides that the Agency Assistance shall be
evidenced by a note and a deed of trust, which note shall be cancelled and deed of
trust reconveyed when Participant completes construction of the Project; and
WHEREAS, the Agreement provides for other conditions, time schedules,
and requirements all as set forth in the Agreement; and
WHEREAS, all actions required of the Agency to be taken precedent to
review and consideration of the Agreement by the Agency have been taken in
accordance with applicable law;
NOW, THEREFORE, BE IT RESOLVED, that the La Quinta Redevelopment
Agency hereby resolves as follows:
1. The Agency finds and determines that the Agreement effectuates the purposes
of the Community Redevelopment Law (Health & Safety Code § 33000 et seq.)
and of the Plan and is in the best interests of the citizens of the City of La
Quinta.
2. The Agreement, a copy of which is on file with the Agency Secretary, is hereby
approved. The Agency Executive Director and Agency Counsel are hereby
authorized and directed to make final modifications to the Agreement that are
consistent with the substantive terms of the Agreement approved hereby, and
the Agency Executive Director is authorized to thereafter sign the Agreement
on behalf of the Agency.
3. The Agency Executive Director is authorized and directed, on behalf of the
Agency, to (i) sign such other and further documents, including but not limited
to subordination agreements and escrow instructions that require the Agency's
signature, and (ii) take such other and further actions, as may be necessary and
proper to carry out the terms of the Agreement.
G:\WPDOCS\CCReso-COA\CCResoCameo-AHA.doc 071
Resolution RDA No.
Apartments at La Quinta Village, LP
Adopted: November 19, 2002
PASSED, APPROVED, AND ADOPTED at a regular meeting of the La
Quinta Redevelopment Agency held this 19th day of November, 2002, by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
TERRY HENDERSON, Agency Chair
City of La Quinta, California
ATTEST:
JUNE S. GREEK, Agency Secretary
City of La Quinta, California
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
City of La Quinta, California
G:\WPDOCS\CCReso-COA\CCResoCameo-AHA.doc 074
ATTACHMENT #1
AFFORDABLE HOUSING AGREEMENT
BY AND AMONG
LA QUINTA REDEVELOPMENT AGENCY
D
APARTMENTS AT LA QUINTA VILLAGE, LP
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TABLE OF CONTENTS
Page
1.0 DEFINITIONS..................................................................................................................2
1.1 Agency Deed of Trust.........................................................................................2
1.2 Agency Loan.........................................................................................................2
1.3 Agency Loan Documents......................................................................................3
1.4 Agency Note......................................................................................................... 3
1.5 Agency Regulatory Agreement............................................................................. 3
1.6 Approved Project Plans and Permits.....................................................................3
1.7 CEQA.................................................................................................................... 3
1.8 City........................................................................................................................3
1.9 Days...................................................................................................................... 3
1.10 Effective Date....................................................................................................... 3
1.11 Enforced Delay..................................................................................................... 3
1.12 Executive Director................................................................................................ 3
1.13 Hazardous Materials............................................................................................. 3
1.14 Landaq...................................................................................................................4
1.15 Landaq Restrictions..............................................................................................4
1.16 Participant.............................................................................................................4
1.17 Project...................................................................................................................4
1.18 Project Area..........................................................................................................4
1.19 Redevelopment Plan.............................................................................................4
1.20 Release of Construction Covenants......................................................................4
1.21 Restricted Units.....................................................................................................4
1.22 Sale Escrow Instructions.......................................................................................4
1.23 Schedule of Performance...................................................................................... 5
1.24 Site........................................................................................................................ 5
1.25 Title Company...................................................................................................... 5
1.26 Unrestricted Units................................................................................................. 5
2.0 PURPOSE OF AGREEMENT.........................................................................................5
3.0 CURRENT OWNERSHIP OF THE SITE; PARTICIPANT ACQUISITION
OFTHE SITE...................................................................................................................5
3.1 Ownership of the Site............................................................................................ 5
3.2 Agency Title Policy.............................................................................................. 6
3.3 Conditions to Agency's Performance................................................................... 6
3.4 Brokerage Commissions....................................................................................... 7
3.5 Taxes and Assessments and Liens........................................................................ 7
4.0 AGENCY LOAN; PHYSICAL CONDITION OF SITE.................................................7
4.1 Agency Loan; Disbursement.................................................................................7
4.2 Agency Note; Agency Deed of Trust.................................................................... 7
4.3 Physical Condition of Site.................................................................................... 7
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Page
5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES ...................................... 8
5.1 Effective Date of Representations and Warranties ............................................... 8
5.2 Representations and Warranties............................................................................8
6.0 PROJECT DEVELOPMENT...........................................................................................9
6.1 Construction of the Project...................................................................................9
6.2 Indemnification...................................................................................................11
6.3 Applicable Laws.................................................................................................11
6.4 Release of Construction Covenants....................................................................12
7.0 TRANSFER AND ASSIGNMENT................................................................................12
7.1 Sale or Transfer of the Project............................................................................12
7.2 Transfer Defined.................................................................................................12
7.3 Agency Approval of Transfer Required.............................................................13
7.4 Assignment and Assumption Agreement............................................................14
7.5 Permitted Transferee...........................................................................................14
8.0 INSURANCE..................................................................................................................14
8.1 Required Minimum Policies...............................................................................14
9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE ........... 14
9.1 Definitions...........................................................................................................14
9.2 Limitation on Encumbrances..............................................................................15
9.3 Participant's Breach Does Not Defeat Mortgage Lien.......................................15
9.4 Notice of Default to Mortgagee, Deed of Trust or Other Security
InterestHolders...................................................................................................15
9.5 Right of the Agency to Satisfy Other Liens on the Property After
Conveyanceof Title............................................................................................15
10.0 USE OF THE SITE.........................................................................................................15
10.1 Use of the Site.....................................................................................................15
10.2 No Inconsistent Uses...........................................................................................16
10.3 Obligation to Refrain from Discrimination.........................................................16
10.4 Effect of Covenants.............................................................................................16
11.0 DEFAULT; ENFORCEMENT.......................................................................................16
11.1 Defaults, Right to Cure and Waivers..................................................................16
11.2 Legal Actions......................................................................................................17
11.3 Rights and Remedies are Cumulative.................................................................17
11.4 Attorneys' Fees...................................................................................................17
12.0 MISCELLANEOUS.......................................................................................................18
12.1 Notices................................................................................................................ Is
12.2 Nonliability of Agency Officials and Employees...............................................19
12.3 Time of Essence..................................................................................................19
12.4 Enforced Delay: Extension of Times of Performance.......................................19
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Page
12.5 Books and Records.............................................................................................19
12.6 Ownership of Documents...................................................................................20
12.7 Modifications...................................................................................................... 20
12.8 Binding Effect of Agreement..............................................................................20
12.9 Severability......................................................................................................... 20
12.10 Interpretation....................................................................................................... 20
12.11 Entire Agreement................................................................................................ 20
12.12 Waiver; Amendments.........................................................................................20
12.13 Counterparts........................................................................................................ 21
12.14 Authority.............................................................................................................21
12.15 Exhibits............................................................................................................... 21
12.16 Effective Date.....................................................................................................21
LIST OF EXHIBITS
Exhibit "A"
Legal Description of Site
Exhibit `B"
Site Map
Exhibit "C"
Scope of Development
Exhibit "D"
Schedule of Performance
Exhibit "E"
Form of Agency Note
Exhibit "F"
Form of Agency Deed of Trust
Exhibit "G"
Form of Agency Regulatory Agreement
Exhibit "H"
Form of Release of Construction Covenants
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AFFORDABLE HOUSING AGREEMENT
THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of
(the "Effective Date") by and between the LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and
APARTMENTS AT LA QUINTA VILLAGE, LP, a California limited partnership
("Participant").
RECITALS
A. Agency is a public body, corporate and politic, exercising governmental functions
and powers and organized and existing under the Community Redevelopment Law of the State
of California (California Health and Safety Code Section 33000 et sew.).
B. Participant has recently acquired fee title to that certain unimproved real property
located approximately 630 feet north of Calle Tampico and 150 feet east of Eisenhower Drive, in
the City of La Quinta (the "Site").
C. Agency desires to meet its affordable housing goals by assisting Participant in the
development of an affordable rental housing complex on the Site with not less than two hundred
(200) units, of which seventy-five (75) units shall be the "Restricted Units" (as defined below)
and related interior and exterior improvements, by making certain financial assistance available
to Participant for the Project from the Agency's Low and Moderate Income Housing Fund
(Health & Safety Code §§ 33334.2 et sue.).
D. Agency has determined that providing assistance to Participant for the Project is
in the best interests of the City of La Quinta ("City") and the welfare of its citizens. Therefore,
the parties desire to execute this Agreement for the Project on the terms and conditions set forth
below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and
promises hereinafter contained, and for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, Agency and Participant hereby agree as follows:
1.0 DEFINITIONS.
1.1 Agency Deed of Trust. The term "Agency Deed of Trust" shall mean that certain
Deed of Trust With Assignment of Rents to secure the Agency Note, in the form attached hereto
and incorporated herein as Exhibit "F".
1.2 Agency Loan. The term "Agency Loan" shall mean the loan by Agency to
Participant in the amount set forth in Section 4.1, as evidenced by the Agency Loan Documents,
for the purposes of acquiring the Site and constructing the Project on the Site.
071
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0
1.3 Agency Loan Documents. The term "Agency Loan Documents" shall mean,
collectively, the Agency Note, Agency Deed of Trust and Agency Regulatory Agreement.
1.4 Agency Note. The term "Agency Note" shall mean that certain promissory note,
in the form attached hereto and incorporated herein as Exhibit ` E", in favor of Agency,
evidencing the loan by Agency to Participant.
1.5 Agency Regulatory Agreement. The term "Agency Regulatory Agreement" shall
mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions, in the
form attached hereto and incorporated herein as Exhibit "G".
1.6 Approved Project Plans and Permits. The term "Approved Project Plans and
Permits" shall mean, collectively, the Scope of Development attached hereto and incorporated
herein as Exhibit "C", and all of the plans and permits approved by the Agency and the City for
the Project, including any changes thereto as may be subsequently approved in writing by
Participant, Agency, and City.
1.7 CEQA. The term "CEQA" shall mean the California Environmental Quality Act,
Public Resources Code Section 21000 et seq., as amended.
1.8 City. The term "City" shall mean the City of La Quinta, a municipal corporation,
having its offices at 78-495 Calle Tampico, La Quinta, CA 92253. The City is not a party to this
Agreement and shall have no obligations hereunder.
1.9 Days. The term "days" shall mean calendar days and the statement of any time
period herein shall be calendar days, and not business days, unless otherwise specified.
1.10 Effective Date. The Effective Date of this Agreement shall occur after approval
hereof by Agency and shall mean the later of the dates this Agreement is executed on behalf of
Agency and Participant.
1.11 Enforced Delay. The term "Enforced Delay" shall have the meaning set forth in
Section 12.4.
1.12 Executive Director. The term "Executive Director" shall mean the individual
duly appointed to the position of Executive Director of Agency, or his or her authorized
designee. Whenever an administrative action is required by Agency to implement the terms of
this Agreement, the Agency Executive Director, or his or her authorized designee, shall have
authority to act on behalf of Agency, except with respect to matters reserved for Agency Board
determination.
1.13 Hazardous Materials. The term "Hazardous Materials" shall mean (i) any
hazardous or toxic substance, material or waste which is or becomes regulated by any local or
regional governmental authority, the State of California, or the United States Government and/or
(ii) any substance or material identified by the United States Government, the State of California,
County of Riverside, or any local or regional governmental authority as hazardous or toxic and
which is included on any list of such substances published by any such governmental entity and
shall specifically include petroleum, petroleum -based products, asbestos and PCBs. 00
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1.14 Landaq. The term "Landaq" shall mean Landaq, Inc., a Delaware corporation,
which is the entity from which Participant acquired the Site.
1.15 Landaq Restrictions. The term "Landaq Restrictions" shall mean, collectively, (i)
the covenants and restrictions contained in the grant deed pursuant to which Landaq conveyed
the Site to Participant; (ii) that certain Declaration of Development Covenants, Conditions and
Restrictions entered into and recorded on , as Instrument No. , in the
Official Records of the County of Riverside, by and between Landaq, as the "Company," and
Participant, as the "Builder," which sets forth certain development and use restrictions with
which Participant is required to comply; and (ill) that certain Option Agreement and Escrow
Instructions entered into on , by and between Landaq, as the "Company," and
Participant, as the "Builder," which provides for Participant's grant to Landaq of an option to
repurchase the Site in accordance with the terms thereof, as memorialized by that certain
Memorandum of Option entered into by those parties and recorded on as
Instrument No. , in the Official Records of the County of Riverside.
1.16 Participant. The term "Participant" shall mean Apartments at La Quinta Village,
LP, a California limited partnership, and any permitted assignees and successors of same as set
forth in Section 7.0.
1.17 Project. The term "Project" shall mean the construction on the Site of an
affordable rental housing complex with not less than two hundred (200) units, of which seventy-
five (75) units shall be the Restricted Units, and related interior and exterior improvements,
including, but not limited to, a private recreation center. The Project is more particularly
described in the Scope of Development attached hereto and incorporated herein as Exhibit "C".
1.18 Project Area. The term "Project Area" shall mean Redevelopment Project Area
No. 1 which is located in the City of La Quinta, California. The exact boundaries of the Project
Area are specifically described in the Redevelopment Plan.
1.19 Redevelopment Plan. The term "Redevelopment Plan" shall mean the
Redevelopment Plan for the Project Area, as the same has been amended prior to the Effective
Date and as it may be further amended from time to time. A copy of the Redevelopment Plan in
effect on the Effective Date is on file in the Office of the City Clerk of the City. The
Redevelopment Plan is incorporated herein by this reference as though fully set forth herein.
1.20 Release of Construction Covenants. The term "Release of Construction
Covenants" shall mean that certain Release of Construction Covenants, in the form attached
hereto and incorporated herein as Exhibit "H".
1.21 Restricted Units. The term "Restricted Units" shall mean the seventy-five (75)
rental apartment dwelling units in the Project that are covenanted for affordability, occupancy,
and with respect to other matters pursuant to this Agreement and the Agency Regulatory
Agreement. Any individual such unit shall be referred to as a "Restricted Unit."
1.22 Sale Escrow Instructions. The term "Sale Escrow Instructions" shall mean,
collectively, (1) that certain Agreement of Purchase and Sale and Joint Escrow Instructions
("Purchase Agreement") between Landaq, as "Seller," and Participant, as "Buyer," dated
882/015610-0063 4
325173.02 AM02
�' 3
October 24, 2002, pursuant to which Participant purchased from Landaq, and Landaq sold to
Participant, the Site, along with certain adjacent real property ("Property Adjacent To Site"); and
(ii) all of the documents attached to the Purchase Agreement as exhibits thereto.
1.23 Schedule of Performance. The term "Schedule of Performance" shall mean that
certain Schedule attached hereto and incorporated herein as Exhibit "D".
1.24 Site. The term "Site" shall mean that certain undeveloped real property, located
approximately 630 feet north of Calle Tampico and 150 feet east of Eisenhower Drive, in the
City of La Quinta. The Site is legally described as Exhibit "A", and is shown on the Site Map
attached hereto and incorporated herein as Exhibit `B".
1.25 Title Company. The term "Title Company" shall mean the title company
approved by Agency and Participant responsible for issuing a lender's policy of title insurance to
the Agency insuring the priority of the Agency Deed of Trust and Agency Regulatory
Agreement.
1.26 Unrestricted Units. The term "Unrestricted Units" shall mean the one hundred
twenty-five (125) rental apartment dwelling units in the Project that are not restricted for
affordability. Any individual such unit shall be referred to herein as an "Unrestricted Unit."
2.0 PURPOSE OF AGREEMENT.
The purpose of this Agreement is to effectuate the Redevelopment Plan for the Project
Area by providing for Participant's construction of the Project on the Site and thereby assisting
in the provision of adequate housing affordable to moderate income households within the City.
The development of the Project on the Site and the fulfillment generally of this Agreement are in
the best interests of the City and the welfare of its residents and are in accordance with the public
purposes and provisions of applicable federal, state, and local laws and regulations, pursuant to
which the Project is being undertaken.
3.0 CURRENT OWNERSHIP OF THE SITE; PARTICIPANT ACOUISITION OF
THE SITE.
3.1 Ownership of the Site. Participant is the owner of fee title to the Site. Prior to the
execution of this Agreement, Participant has delivered to Agency a true and correct copy of the
fully signed Sale Escrow Instructions and a copy of the grant deed conveying the Site to
Participant (the "Grant Deed"). Participant represents that the Sale Escrow Instructions (a)
provide that Participant's purchase price for the Site and the Property Adjacent To Site is equal to
Two Million Dollars ($2,000,000); and (b) do not contain any terms that would cause the escrow
or other fees to be charged to Participant at the close of escrow to be higher than what would
normally be charged for a similar transaction in Riverside County. Participant further represents
to Agency that the portion of said purchase price that represents the purchase price of the Site is
One Million Seven Hundred Thirty -Eight Thousand Three Hundred Fourteen Dollars
($1,738,314). Based on the foregoing, Participant qualifies as an "owner -participant" within the
meaning of the California Community Redevelopment Law (Health & Safety Code § 33000 et
seq.). Participant shall indemnify, defend, and hold Agency harmless from and against all
liability, loss, damage, cost, and expense (including expert witness fees, attorney's fees, and n
882/015610-0063 5
325173.02 AM02
t
defense costs) arising from or related to any dispute related to the Sale Escrow Instructions or
any other agreement or document pertaining to Participant's acquisition of the Site.
3.2 Agency Title Policy. On November _, 2002, the Title Company delivered to
Agency a proposed ALTA lender's policy of title insurance, together with copies of all
underlying documents as may be revealed by the proposed title policy (collectively, the
"Proposed Title Policy"). Participant shall, at no cost to Agency, cause the Title Company to
issue and deliver to Agency an ALTA lender's policy of title insurance, together with such
endorsements as may be reasonably requested by Agency, with liability in the amount of the
Agency Note, covering the Site, showing title vested in Participant and insuring the validity and
priority of, respectively, the Agency Deed of Trust and Agency Regulatory Agreement (the
"Agency Title Policy") subject only to:
3.2.1 those exceptions to title set forth in the Proposed Title Policy that the
Executive Director has approved, in writing, as "acceptable;" provided, however, that Agency
may only object to those exceptions that adversely affect the developability of the Site;
3.2.1 all nondelinquent general and special real property taxes and assessments;
3.2.2 the Grant Deed; and
3.2.3 such other matters as may be approved in writing by the Executive
Director.
3.3 Conditions to Agency's Performance. As a further condition precedent to
Agency's performance of its obligations set forth in this Agreement, all of the following shall
have been performed or completed by the date set forth in the Schedule of Performance):
3.3.1 Participant shall have executed (and acknowledged where required) and
submitted to Agency the Agency Note, Agency Deed of Trust and Agency Regulatory
Agreement, and all other agreements and documents reasonably required to be signed by
Participant pursuant to this Agreement and the agreements and documents referenced in this
Agreement.
3.3.2 The Executive Director shall have reviewed and approved the title
condition and the Title Company shall have issued the Agency Title Policy with only those
exceptions pre -approved in this Agreement or as approved by the Executive Director in his/her
sole and absolute discretion.
3.3.3 Participant shall have submitted to the Executive Director the evidence of
insurance required by the Agency Regulatory Agreement, with such insurance coverages to be
effective as of the Effective Date.
3.3.4 Participant shall have obtained all necessary land use entitlements to
construct the Project.
3.3.5 Participant is not in material default of any of the terms of (i) this
Agreement; or (ii) the Sale Escrow Instructions.
P ,; I
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3.4 Brokerage Commissions. Participant and Agency shall each indemnify, defend,
and hold harmless the other from and against all liabilities, costs, damages, and expenses,
including, without limitation, attorneys' fees, resulting from any claims for fees or commissions,
based upon agreements by the other or any person or entity affiliated with the other, if any, to
pay a broker's commission and/or finder's fee pertaining to Participant's acquisition of the Site.
No such fee(s), if any, shall be paid out of the Agency Loan.
3.5 Taxes and Assessments and Liens. Participant shall pay, when due, all real estate
taxes and assessments assessed or levied against all or any portion of the Site subsequent to
conveyance of title.
4.0 AGENCY LOAN, PHYSICAL CONDITION OF SITE.
4.1 Agency Loan, Disbursement. Subject to the terms and conditions of this
Agreement, including, but not limited to, the conditions to disbursement set forth in the Agency
Note, Agency shall assist in the financing of the construction of the Project by providing
Participant with the Agency Loan from the Agency's Low and Moderate Income Housing Fund
in the amount of THREE MILLION DOLLARS ($3,000,000.00). The Agency Loan shall be
disbursed in accordance with the terms of the Agency Note.
The Agency Loan shall be evidenced by the Agency Note and Agency Deed of Trust.
Interest, in the amount of seven percent (7%) per annum, shall accrue on each portion of the
Agency Loan commencing on the date such portion is disbursed.
4.2 Agency Note; Agency Deed of Trust. Repayment of the Agency Loan shall be in
accordance with the terms of the Agency Note, attached hereto and incorporated herein as
Exhibit "E." Repayment of the Agency Note shall be partially secured by the Agency Deed of
Trust. Notwithstanding any of the foregoing, however, the Agency Note shall be automatically
cancelled, and the Agency Deed of Trust shall be reconveyed, at such time when the Agency has
issued a Release of Construction Covenants for the Project.
4.3 Physical Condition of Site.
4.3.1 Disclaimer of Warranties. Participant acknowledges that neither the
Agency nor any of its officials, employees, agents, contractors, or representatives have made any
representations, warranties or agreements to or with Participant on behalf of Agency as to any
matters concerning the Site, the present use thereof, or the suitability of Participant's intended or
contemplated use of the Site. The foregoing disclaimer includes, without limitation, topography,
climate, air, water rights, utilities, present and future zoning, soil, subsoil, Hazardous Materials,
patent and latent physical conditions or defects, the purposes to which the Site is suited,
drainage, access to public roads, and the availability of governmental permits or approvals of any
kind. Participant represents and warrants to Agency that it has investigated the Site, and has
knowledge of the operative governmental laws and regulations (including, but not limited to,
zoning, environmental, hazardous waste and land use laws and regulations) to which the Site
may be subject, and has acquired the Site on the basis of its review and determination of the
application and effect of such laws and regulations. Participant has neither received nor relied
upon any representations concerning such laws and regulations made by Agency or its
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employees, agents, contractors, or representatives, or any other person acting on the behalf of
Agency except as set forth in this Agreement. Any agreements, warranties, or representations
not expressly contained in this Agreement shall in no way bind Agency. Participant
acknowledges that it is fully responsible for obtaining any and all permits from the City and
other governmental entities as may be required for the Project. Nothing in this paragraph is
intended to defeat or declare void any permits, approvals, or entitlements that Participant has
obtained with respect to the Site prior to the date of this Agreement.
4.3.2 Participant Indemnity Regarding Physical Condition of the Site. From and
after the Effective Date, Participant shall indemnify, defend, and hold Agency harmless from and
against any and all claims, suits, penalties, expenses, losses, damages, attorney's fees, judgments,
or any other action or damage of any kind or nature arising out of or related to any of the matters
described in Section 4.3.1. Notwithstanding any other provision of this Agreement to the
contrary, Participant's indemnification as set forth in this Section 4.3.2 shall survive the
termination of this Agreement and shall continue in perpetuity.
5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES.
5.1 Effective Date of Representations and Warranties. All of the representations and
warranties set forth in this Section 5.0 are valid as of Effective Date and shall remain valid, true,
and correct unless Participant discloses to Agency in writing a change in any of the
representations or warranties set forth herein.
5.2 Representations and Warranties. In addition to other representations and
warranties of Participant set forth in this Agreement, Participant hereby makes the following
representations, covenants, and warranties for the benefit of Agency and Agency's successors
and assigns, and acknowledges that the execution of this Agreement by Agency has been made
in material reliance by Agency on such representations and warranties:
5.2.1 No Default. Other than the consents obtained as set forth in this
Agreement, the execution and delivery of this Agreement and all other documents to be executed
by Participant pursuant to this Agreement will not constitute or result in any default or event that
with notice or the lapse of time, or both, would be a default, breach, or violation of any other
agreement, instrument, or arrangement by which Participant is bound.
5.2.2 No Violation. The execution and delivery of this Agreement and all other
documents to be executed by Participant pursuant to this Agreement and the consummation of
the transactions contemplated herein will not violate any provision of or require any consent,
authorization, or approval under any law or administrative regulation or any other order, award,
judgment, writ, injunction or decree applicable to, or any governmental permit or license issued
to Participant.
5.2.3 No Bankruptcy. Participant has not filed or been the subject of any filing
of a petition under the Federal Bankruptcy Law or any insolvency laws, or any laws for the
discharge of indebtedness or for the reorganization of debtors.
5.2.4 No Misrepresentation. No representation, warranty, or covenant of
Participant in this Agreement, or in any document or certificate furnished or to be furnished to (} Q J
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4 �
Agency pursuant to this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
5.2.5 Due Execution. This Agreement and all other documents to be executed
by Participant pursuant to this Agreement have been or will be duly executed by Participant and
constitute valid, binding, and enforceable obligations of Participant. If other than an individual,
Participant has complied with all laws and regulations concerning its organization, existence, and
transaction of business.
5.2.6 No Extraneous Consideration. Participant has not paid or given to, and
will not pay or give to, Agency or any official or agent of Agency any money or other
consideration for obtaining this Agreement, except as may be expressly provided herein.
5.2.7 Financial Information. All financial information delivered to Agency,
including, without limitation, information relating to the financial condition of Participant, the
Site, and the Project accurately represents such financial condition and has been prepared in
accordance with accepted accounting principles consistently applied, unless otherwise noted in
such information. Participant shall notify Agency in writing of any material changes to such
information delivered to the Agency.
6.0 PROJECT DEVELOPMENT.
6.1 Construction of the Project.
6.1.1 Development In Accordance With Plans. Participant shall develop the
Project in accordance with this Agreement and the Approved Plans and Permits. As completed,
the Project: (a) shall comply with all applicable laws and ordinances of all governmental
authorities, including, without limitation, all laws and ordinances necessary to permit
rehabilitation of the Site as permitted by this Agreement; and (b) will be wholly in compliance
with any enforceable building restriction laws, however established, and will not violate any
enforceable use, easement, license, covenant, condition, or other restriction affecting the Site.
6.1.2 Evolution of Development Plans. Within the times set forth in the
Schedule of Performance, Participant shall submit to the City preliminary and final drawings and
specifications for development of the Project in accordance with the Scope of Development, the
concept drawings, and in accordance with the City's requirements. The term preliminary and
final drawings shall be deemed to include, unless otherwise waived by City, site plans, building
plans and elevations, landscaping plans, parking plans, and all other plans, drawings, and
specifications required to obtain site plan approval and, with respect to final drawings, to obtain
a building permit. Said plans, drawings and specifications shall be consistent with the Scope of
Development and the various development approvals referenced hereinabove, except as such
items may be amended by City (if applicable) and by mutual consent of City, Agency, and
Participant. Plans, (concept, preliminary and construction) shall be progressively more detailed.
6.1.3 Other Governmental Permits. Before commencement of construction or
development of any buildings, structures, or other work of improvement upon the Site,
Participant shall secure or cause to be secured any and all permits and approvals which may be
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J
required by City or any other governmental agency affected by such construction, development,
or work to be performed by Participant pursuant to the Scope of Development, including, but not
limited to, necessary building permits and all approvals required under CEQA. Not by way of
limiting the foregoing, in constructing the Project, Participant shall comply with all applicable
development standards in City's Municipal Code and shall comply with all building code,
landscaping, signage, and parking requirements except as may be permitted through approved
variances and modifications. Agency agrees, at no cost to Agency, to reasonably assist
Participant in its efforts to obtain permits and approvals for the Project; provided, however, that
Agency does not represent, warrant, or guarantee that any permit or approval will be granted or
issued or that any such permit or approval will be granted or issued with or without any
particular conditions.
6.1.4 Cost of Construction, Subordination. Except for the Agency Loan,
Participant shall bear all costs of preparing and developing the Project and constructing and
rehabilitating all improvements on the Site, including, but not limited to, any and all costs for
construction, architectural and engineering plans, preparation of the Site, costs associated with
meeting applicable seismic standards, interim and permanent financing, and fees or charges for
development and building.
The Agency agrees to subordinate the Agency Deed of Trust and Regulatory
Agreement to Participant's construction loan, provided that (i) the maximum cumulative
principal amount of the construction loan shall not exceed ninety percent (90%) of the lender's
appraised value of the Site upon completion of the Project, which amount shall be verified in
writing to Agency Executive Director's reasonable satisfaction; (ii) the loan(s) shall obligate
Participant to expend loan proceeds for no other purpose than the Project; and (iii) the loan(s)
shall provide that any notice of Participant breach or default shall also be sent to the Agency at
the address listed in Section 12.1 and that upon receipt of such notice, Agency shall have the
right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed
breach or default, and (C) purchase the property from Participant subject to the construction
lender's deed of trust, without the consent of Participant or the holder of the construction
lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of
itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan.
In agreeing to provide the subordination referred to in the preceding sentence, Agency hereby
incorporates the finding required to be made in accordance with Health and Safety Code Section
33334.14.
6.1.5 Construction Schedule: Reports. Participant shall commence and
complete construction of the Project within the times set forth in the Schedule of Performance.
Once construction is commenced, Participant shall diligently pursue such construction to
completion and Participant shall not abandon such construction for more than ten (10)
consecutive business days. Participant shall keep Agency informed of the progress of
construction and submit to the Executive Director written reports of the progress of construction
when and in the form requested.
6.1.6 Drawin sg and Specifications. Participant shall construct the Project upon
the Site in accordance with the construction drawings, working specifications, and related
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documents that shall be submitted to and approved by the Agency and City in advance and in
writing.
6.1.7 Nondiscrimination During Construction. Participant, for itself and its
successors and assigns, agrees that during the construction of the Project, Participant shall not
discriminate against any employee or applicant for employment because of race, color, creed,
religion, sex, marital status, national origin, or ancestry.
6.1.8 Rights of Access. Representatives of Agency shall have the reasonable
right of access to the Site without charges or fees, at any time during normal construction hours
during the period of construction, for the purpose of assuring compliance with this Agreement,
including but not limited to the inspection of the construction work being performed by or on
behalf of Participant. Each such representative(s) of Agency shall identify himself or herself at
the job site office upon his or her entrance to the Site, and shall provide Participant, or the
construction superintendent or similar person in charge on the Site, a reasonable opportunity to
have a representative accompany him or her during the observation. Agency shall indemnify,
defend, and hold Participant harmless from any injury or property damage caused or liability
arising out of Agency's exercise of this right of access, except and to the extent that such injury,
damage, or liability is caused by the negligence or willful misconduct of Participant and/or
Participant's agents, servants, employees or contractors. Any observation, examination, or
inspection occurring by Agency during its/their access pursuant to this Section shall not be
construed or deemed as an inspection pursuant to any building codes or the Municipal Codes or
any other inspection that may be performed by City or any other public entity.
6.1.9 Construction Contract. The Agency acknowledges and agrees that
Participant shall act as the general contractor for the improvements required to be constructed by
Participant for the Project. Participant shall comply with all applicable laws and regulations
pertaining to the contracting of work for construction of the improvements, including but not
limited to the payment of wages for services engaged and bills for materials, supplies, and
equipment. Participant shall not permit any mechanics' or materialmens' liens to be recorded
against the Site.
6.2 Indemnification. During the period of any construction of the improvements
pursuant to this Agreement and until such time as the Agency issues its Release of Construction
Covenants for the Project, Participant agrees to and shall indemnify and hold Agency and City
and their respective agents, servants, employees, or contractors harmless from and against all
liability, loss, damage, cost, or expense (including expert witness fees and reasonable attorneys'
fees and court costs) arising from or as a result of the death of any person or any accident, injury,
loss, or damage whatsoever caused to any person or to the property of any person which shall
occur on the Site and which shall be directly or indirectly caused by the acts done thereon or any
errors or omissions of Participant or its agents, servants, employees, invitees, or contractors
except and to the extent such liability, loss, damage, costs, or expense is caused by the active
negligence or willful misconduct of Agency. The provisions of this Section shall survive the
termination of this Agreement.
6.3 Applicable Laws. Participant shall construct the Project in conformity with all
applicable federal, state, and local laws, rules, and regulations, including, but not limited to,
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applicable wage and labor laws. Participant agrees to indemnify, defend, and hold Agency and
City harmless from and against all liability, loss, damage, cost, or expense (including expert
witness fees and reasonable attorney's fees and costs) arising from or as a result of any violation
of any applicable law, ordinance, statute, rule or regulation, including, but not limited to,
prevailing wage laws, except to the extent such violation arises from the active negligence of
Agency.
6.4 Release of Construction Covenants. Upon written request by Participant, and
upon satisfactory completion of the Project, as evidenced by City's issuance of a certificate of
occupancy (excluding a temporary certificate of occupancy issued by City), Agency shall issue
to Participant a Release of Construction Covenants as long as Participant is not in default under
this Agreement or any documents related hereto. The Release of Construction Covenants shall
be, and shall so state, a conclusive determination of satisfactory completion of construction of
the Project. After the date Participant is entitled to issuance of the Release of Construction
Covenants, and notwithstanding any other provision of this Agreement to the contrary, any party
then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall
not (because of any such ownership, purchase, lease, or acquisition) incur any obligation or
liability under this Agreement, except that such party shall be bound by the covenants that
survive the issuance of the Release of Construction Covenants, including as set forth in the
Regulatory Agreement. The Release of Construction Covenants is not a notice of completion as
referred to in California Civil Code section 3093.
If Agency refuses or fails to furnish a Release of Construction Covenants after written
request from Participant, Agency shall, within fifteen (15) days after the written request, provide
the Participant a written statement of the reasons Agency refused or failed to furnish a Release of
Construction Covenants. The statement shall also contain the Agency's opinion of the action
Participant must take to obtain a Release of Construction Covenants. If Agency shall have failed
to provide such written statement within said fifteen (15) day period, Participant shall be deemed
entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the
Release of Construction Covenants for the reason that specific minor non -life safety items or
materials are not available or landscaping is not complete and the cost thereof is less than two
percent (2%) of the Agency Loan amount, as set forth in the Project Budget, Agency shall issue
the Release of Construction Covenants upon the posting by Participant with Agency of a cash
deposit, bond, or irrevocable letter of credit (in a form acceptable to Agency), at Participant's
option, in an amount representing one hundred percent (100%) of the fair value of the work not
yet completed.
7.0 TRANSFER AND ASSIGNMENT.
7.1 Sale or Transfer of the Project. Participant covenants that during the term of this
Agreement and the Agency Regulatory Agreement Participant shall not assign this Agreement or
transfer the Site or any of its interests therein except as provided in this Section 7.0.
7.2 Transfer Defined. As used in this Section 7.0, the term "Transfer" shall include
any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this
Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to
any person, entity, or group of persons or entities acting in concert of more than fifty percent
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(50%) (in the aggregate) of the present ownership and/or control of any person or entity
constituting Participant, taking all transfers into account on a cumulative basis. In the event any
entity constituting Participant, its successor or the constituent partners or members of Participant
or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of
the issued and outstanding capital stock of such corporation, or of beneficial interests of such
trust; in the event that any entity constituting Participant, its successor or the constituent partners
of Participant or any successor of Participant is a limited or general partnership, such transfer
shall refer to the transfer of more than fifty percent (50%) of such limited or general partnership
interest; in the event that any entity constituting Participant, its successor or the constituent
members of Participant or any successor of Participant is a limited liability company, such
transfer shall refer to the transfer of more than fifty percent (50%) of such membership interest;
in the event that any entity constituting Participant, its successor or the constituent partners of
Participant or any successor of Participant is a joint venture, such transfer shall refer to the
transfer of more than fifty percent (50%) of the ownership and/or control of any such joint
venture partner, taking all transfers into account on a cumulative basis.
7.3 Agency Approval of Transfer Required. Except as set forth below, Participant
shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the
Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law,
without the prior written approval of Agency, which approval shall not be unreasonably
withheld, conditioned, or delayed, and any such purported Transfer without such approval shall
be null and void. Notwithstanding the foregoing, the following types of transfers shall not
require Agency approval but as with all Transfers shall be subject to Section 7.4:
(i) Transfers to any entity or entities owned or controlled by Participant or
any of its respective shareholders or partners, or to any parent corporation
or subsidiary corporation of any partners of Participant, or to any entity or
entities controlled by any such shareholders or partners;
(ii) The leasing of individual rental units on the Site provided that such leasing
is in accordance with the terms of this Agreement and of the Agency
Regulatory Agreement;
(iii) Transfers resulting from the death or mental or physical incapacity of an
individual;
(iv) Transfers in trust for the benefit of a spouse, children, grandchildren, or
other family member, or for charitable purposes;
(v) Transfers of stock in a publicly -held corporation or of the beneficial
interest in any publicly -held partnership or real estate investment trust;
(vi) Any mortgage, deed of trust, sale and leaseback, or other form of
conveyance required for any reasonable method of financing or
refinancing the acquisition of the Site and development of the Project
thereon, including all direct and indirect costs related thereto; or
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(vii) The conveyance or dedication or portions of the Site to the City or other
governmental entity, or the granting of easements or permits to facilitate
the development of the Site.
Agency shall reasonably consider approving a transfer to an entity not owned or
controlled by Participant provided such entity has both of the following: (A) the financial
strength and capability, equal to or greater than the financial strength and capability of
Participant, to perform Participant's obligations hereunder; and (B) the experience and expertise,
at levels equal to or greater than the experience and expertise of Participant, in the planning,
financing, development, ownership and operation of similar projects.
7.4 Assignment and Assumption Agreement. In the absence of specific written
agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or
this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve
Participant or any successor party from the obligation to timely complete construction of the
Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be
effective unless and until Participant and the transferee or successor party execute and deliver to
Agency a binding assignment and assumption agreement in a form reasonably approved by
Agency's legal counsel.
7.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a
transferee or assignee that either (i), has been approved by the Executive Director, or (ii) is a
transferee of a Transfer not requiring the approval of the Executive Director pursuant to the
terms of this Agreement, and both the cases described in the foregoing clauses (i) and (ii) has
executed and delivered to the Executive Director an assignment and assumption agreement
pursuant to Section 7.4.
8.0 INSURANCE.
From and after the Effective Date, and for the term of the Agency Regulatory Agreement,
Participant shall procure and maintain, at its sole cost and expense, the insurance set forth in the
Agency Regulatory Agreement. Not later than the Effective Date of this Agreement, Participant
shall provide the Executive Director with Certificates of Insurance or appropriate insurance
binders evidencing said insurance coverages and said Certificates of Insurance or binders shall
be subject to the reasonable approval of the Executive Director.
Participant agrees that the provisions of this Section shall not be construed as limiting in
any way the extent to which Participant may be held responsible for the payment of damages to
any persons or property resulting from the Participant's activities or the activities of any person
or persons for which the Participant is otherwise responsible.
9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE.
9.1 Definitions. As used in this Section 9.0, the term "mortgage" shall include any
mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security interest, or
sale and lease -back, or any other form of conveyance for financing. The term "holder" shall
include the holder of any such mortgage, deed of trust, or other security interest, or the lessor
under a lease -back, or the grantee under any other conveyance for financing.
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9.2 Limitation on Encumbrances. Except as otherwise permitted by this Agreement,
including but not limited to clause (f) of Section 7.3, Participant shall not mortgage the Site or
any portion thereof or any interest therein, any other mortgages or conveyances for financing that
encumber the Site or any portion thereof, without the prior written approval of the Executive
Director.
9.3 Participant's Breach Does Not Defeat Mortgage Lien. Participant's breach of any
of the covenants or restrictions contained in this Agreement or in the Agency Regulatory
Agreement shall not defeat or render invalid the lien of any mortgage permitted pursuant to this
Agreement, made in good faith and for value as to the Site, or any part thereof or interest therein,
but unless otherwise provided herein, the terms, conditions, covenants, restrictions, easements,
and reservations of this Agreement shall be binding and effective against the owner of the Site
where such owner, including any lender, acquires the Site by foreclosure, trustee's sale, or
otherwise.
9.4 Notice of Default to Mortgagee, Deed of Trust or Other Security Interest Holders.
Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or
default by Participant hereunder, Agency shall at the same time deliver a copy of such notice or
demand to each holder of record of any mortgage who has previously made a written request to
Agency therefor, or to the representative of such lender as may be identified in such a written
request by the lender. No notice of default shall be effective as to the holder unless such notice
is given.
9.5 Right of the Agency to Satisfy Other Liens on the Property After Conveyance of
Title. Prior to the recordation of the Release of Construction Covenants for the Project, and after
Participant has had a reasonable time to challenge, cure, or satisfy any liens or encumbrances on
the Site or any portion thereof, Agency shall have the right to satisfy any such liens or
encumbrances; provided, however, that nothing in this Agreement shall require Participant to pay
or make provision for the payment of any tax, assessment, lien or charge so long as Participant in
good faith shall contest the validity or amount thereof, and so long as such delay in payment
shall not subject the Site or any portion thereof to forfeiture or sale. Agency shall have the right
to reimbursement from Participant for any amount expended pursuant to this Section, which right
of reimbursement shall be secured by a lien on the Site, with power of sale.
10.0 USE OF THE SITE.
10.1 Use of the Site.
10.1.1 Dwelling Units. Participant hereby covenants and agrees, for itself and its
successors and assigns, to use and maintain the Site only as a rental apartment housing project
with two hundred (200) apartment dwelling units ("Units"), with not fewer than seventy-five
(75) of the Units to be rented to persons and families whose income does not exceed 120% of the
median income for Riverside County, adjusted for family size, as determined by the California
Department of Housing and Community Development ("Restricted Units"), all as more fully
described in the Agency Regulatory Agreement. The balance of the Units shall be available for
rent without restriction and are referred to herein as the "Unrestricted Units."
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10.2 No Inconsistent Uses. Participant covenants and agrees that it shall not devote the
Site to uses inconsistent with the Redevelopment Plan, the applicable zoning restrictions, this
Agreement, the Agency Regulatory Agreement, or the Agency Loan Documents. Agency
hereby confirms that multifamily residential use (and associated parking) is a use permitted by
the Redevelopment Plan.
10.3 Obligation to Refrain from Discrimination. There shall be no discrimination
against, or segregation of, any persons, or group of persons, on account of race, color, creed,
religion, sex, marital status, ancestry, or national origin in the rental, sale, lease, sublease,
transfer, use, occupancy, or enjoyment of the Site, or any portion thereof, nor shall Participant, or
any person claiming under or through Participant, 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 Site or any portion
thereof. The nondiscrimination and nonsegregation covenants contained herein shall remain in
effect in perpetuity.
10.4 Effect of Covenants. Agency is deemed a beneficiary of the terms and provisions
of this Agreement and of the restrictions and covenants running with the land, whether or not
appearing in the Agency Regulatory Agreement, for and in its own right and for the purposes of
protecting the interests of the community in whose favor and for whose benefit the covenants
running with the land have been provided. The covenants in favor of Agency shall run with the
land without regard to whether Agency has been, remains, or is an owner of any land or interest
therein in the Site, or in the Redevelopment Project Area, and shall be effective as both
covenants and equitable servitudes against the Site. Agency shall have the right, if any of the
covenants set forth in this Agreement which are provided for its benefit 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 may be entitled. The covenants
running with the land and their duration are set forth in the Agency Regulatory Agreement.
11.0 DEFAULT; ENFORCEMENT.
11.1 Defaults, Right to Cure and Waivers.
1 L l .l Subject to any Enforced Delay, and unless otherwise more specifically
provided in this Agreement, failure or delay by either party to timely perform any covenant of
this Agreement constitutes a default under this Agreement, but only if the party who so fails or
delays does not commence to cure, correct or remedy such failure or delay within thirty (30)
days after receipt of a written notice specifying such failure or delay, and does not thereafter
prosecute such cure, correction or remedy with diligence to completion.
11.1.2 Any default by Participant under this Agreement, or of the Agency Note,
or of the Agency Deed of Trust, or of the Agency Regulatory Agreement, or of any of the
Landaq Restrictions, shall constitute a default of all of the foregoing agreements entitling
Agency to pursue whatever remedies to which it is entitled under such agreements; provided that
the required notice of default under Section 11.1.1 has been given and the time period to
commence and complete a cure, correction, or remedy of such noticed default has expired
without such default having been cured, corrected, or remedied.
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11.1.3 The injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Except as required to protect
against further damages, the injured party may not institute proceedings against the party in
default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall
not constitute a waiver of any default, nor shall it change the time of default.
11.1.4 Except as otherwise provided in this Agreement, waiver by either party of
the performance of any covenant, condition, or promise, shall not invalidate this Agreement, nor
shall it be considered a waiver of any other covenant, condition, or promise. Waiver by either
party of the time for performing any act shall not constitute a waiver of time for performing any
other act or an identical act required to be performed at a later time. The delay or forbearance by
either party in exercising any remedy or right as to any default shall not operate as a waiver of
any default or of any rights or remedies or to deprive 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.
11.2 Legal Actions.
11.2.1 Institution of Legal Actions. In addition to any other rights or remedies,
and subject to the requirements of Section 11.1, either party may institute legal or equitable
action to cure, correct or remedy any default, to recover damages for any default, or to obtain any
other remedy consistent with the purpose of this Agreement; provided, however, that
notwithstanding the foregoing, in no event shall Participant be entitled to damages related to
economic loss, lost profits, or any other damages of like or similar kind or nature. Actions must
be instituted and maintained in the Superior Court of the County of Riverside, State of
California, in any other appropriate court in that county, or in the appropriate federal district
court.
11.2.2 Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
11.2.3 Acceptance of Service of Process. In the event that any legal action is
commenced by Participant against Agency, or by Agency against Participant, service of process
shall be made in such manner as may be provided by California law for service on such entity.
11.3 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party
of one or more of its 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.
11.4 Attorneys' Fees. If either party to this Agreement is required to initiate or defend
any action or proceeding in any way arising out of the parties' agreement to, or performance of,
this Agreement, or is made a party to any such action or proceeding by a third party, such that
the parties hereto are adversarial, the prevailing party, as between the Participant and Agency, in
such action or proceeding, in addition to any other relief which may be granted, whether legal or
equitable, shall be entitled to its/their expert witness fees and reasonable attorneys' fees from the
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other. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled
to attorneys' fees shall be entitled to all other reasonable costs for investigating such action,
taking depositions and discovery and all other necessary costs the court allows which are
incurred in 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.
12.0 MISCELLANEOUS.
12.1 Notices. Formal notices, demands, and communications between Agency and
Participant shall be sufficiently given if (1) personally delivered, (ii) delivered by a reputable
same -day or overnight courier service that provides a receipt showing date and time of delivery,
(iii) delivered by United States mail, registered or certified, postage prepaid, return receipt
requested, or (iv) delivered by facsimile transmission, provided the original of the faxed
communication is delivered within twenty-four (24) hours by one of methods described in
clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses:
If to Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
Fax: (760) 777-7101
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: M. Katherine Jenson, Esq.
Fax: (714) 546-9035
If to Participant: Apartments at La Quinta Village, LP
1105 Quail Street
Newport Beach, CA 92655
Attn: Victor Mahoney
Fax: (949) 250-8574
With a copy to: Palmieri, Tyler, Wiener, Wilhelm
& Waldron, LLP
2603 Main Street, Ste. 1300
P.O. Box 19712
Irvine, CA, 92014-0220
Attn: Robert Ihrke
Fax: (949) 851-1554
Notices that are personally delivered, delivered by messenger/courier, or by fax (provided
there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt.
Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the
addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States
Postal System in the manner described in this Section. Such written notices, demands, and
OW
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communications may be sent in the same manner to such other addresses as a party may from
time to time designate by mail.
12.2 Nonliabilit�of Agency Officials and Employees. No member, official, employee,
or consultant of Agency shall be personally liable to Participant, or any successor in interest of
Participant, in the event of any default or breach by Agency or for any amount which may
become due to Participant or to its successor, or on any obligations under the terms of this
Agreement.
12.3 Time of Essence. Time is of the essence in the performance of this Agreement.
12.4 Enforced Delay: Extension of Times of Performance. Notwithstanding the
foregoing, 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; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes;
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; acts of the other party; acts or the failure to act of a
public or governmental agency or entity (except that acts or the failure to act of Agency shall not
excuse performance by Agency unless the act or failure is caused by the acts or omissions of
Participant); or any other causes beyond the reasonable control or without the fault of the party
claiming an extension of time to perform. In the event of such a delay (herein "Enforced
Delay"), the party delayed shall continue to exercise commercially reasonable efforts to
minimize the period of the delay. An extension of time for any such cause shall be limited to the
period of the Enforced Delay, and shall commence to run from the time of the commencement of
the cause, provided notice by the party claiming such extension is sent to the other party within
fifteen (15) days following the commencement of the cause. The following shall not be
considered as events or causes beyond the control of Participant, and shall not entitle Participant
to an extension of time to perform: (i) Participant's failure to obtain financing for the Project, (ii)
Participant's failure to negotiate agreements with prospective tenants or users for the Project, (iii)
interest rates or (iv) economic or market conditions. Times of performance under this
Agreement may also be extended by mutual written agreement by Agency and Participant. The
Executive Director shall also have the authority on behalf of Agency to administratively approve
extensions of time not to exceed a cumulative total of one (1) year.
12.5 Books and Records.
12.5.1 Maintenance of Books and Records. Participant shall prepare and
maintain all books, records, and reports necessary to substantiate Participant's compliance with
the terms of this Agreement.
12.5.2 Right to Inspect. Agency shall have the right, upon not less than twenty-
four (24) hours' notice, at all reasonable times, to inspect the books and records of the Participant
pertinent to the purposes of this Agreement. Said right of inspection shall not extend to
documents privileged under attorney -client or other such privileges.
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12.6 Ownership of Documents. Copies of all drawings, specifications, reports,
records, documents and other materials prepared by Participant, its employees, agents and
subcontractors, in the performance of this Agreement, which documents are in the possession of
Participant and are not confidential or to which other persons have rights, shall be delivered to
Agency upon request in the event of a termination of this Agreement, and Participant shall have
no claim for additional compensation as a result of the exercise by Agency of their respective
rights hereunder. Agency shall have an unrestricted right to use such documents and materials as
if it were in all respects the owner of the same. Participant makes no warranty or representation
regarding the accuracy or sufficiency of such documents for any future use by Agency, and
Participant shall have no liability therefor.
12.7 Modifications. Any alteration, change or modification of or to this Agreement, in
order to become effective, shall be made by written instrument or endorsement thereon and in
each such instance executed on behalf of each party hereto.
12.8 Binding Effect of Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their legal representatives, successors, and assigns. This
Agreement shall likewise be binding upon and obligate the Site and the successors in interest,
owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Site.
12.9 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law. If, however, any
provision of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
12.10 Interpretation. The terms of this Agreement shall be construed in accordance with
the meaning of the language used and shall not be construed for or against either party by reason
of the authorship of this Agreement or any other rule of construction which might otherwise
apply. The Section headings are for purposes of convenience only, and shall not be construed to
limit or extend the meaning of this Agreement.
12.11 Entire Agreement. This Agreement and all documents incorporated herein
contain the entire understanding among the parties hereto relating to the transactions
contemplated herein and all prior or contemporaneous agreements, understandings,
representations, and statements, oral or written, are merged herein and shall be of no further
force or effect.
12.12 Waiver; Amendments. All waivers of the provisions of this Agreement, unless
specified otherwise herein, must be in writing and signed by the appropriate authorities of
Agency or Participant, as applicable. No delay or omission by either party hereto in exercising
any right or power accruing upon the compliance or failure of performance by the other party
hereto under the provisions of this Agreement shall impair any such right or power or be
construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the
covenants, conditions or agreements hereof to be performed by the other party shall not be
construed as a waiver of any succeeding breach of the same or other covenants, agreements,
0%
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restrictions or conditions hereof. All amendments hereto must be in writing and signed by the
appropriate authorities of Agency and Participant.
12.13 Counterparts. This Agreement may be executed in counterparts, each of which,
when this Agreement shall have been signed by all the parties hereto, shall be deemed to be an
original, and such counterparts shall constitute one and the same instrument.
12.14 Authority. Agency represents and warrants that: (i) it is a redevelopment agency
duly organized and existing under the laws of the State of California; (ii) by proper action of
Agency, Agency has been duly authorized to execute and deliver this Agreement, acting by and
through its duly authorized officers; and (iii) the entering into this Agreement by Agency does
not violate any provision of any other agreement to which Agency is a party. Participant
represents and warrants that: (i) it is duly organized and existing under the laws of the State of
California; (ii) by proper action of Participant, Participant has been duly authorized to execute
and deliver this Agreement, acting by and through its duly authorized principals or officers; and
(iii) the entering into this Agreement by Participant does not violate any provision of any other
agreement to which Participant is a party to which consent has not been obtained.
12.15 Exhibits. This Agreement includes all exhibits and attachments attached hereto,
which by this reference are incorporated in this Agreement in their entirety. This Agreement
also includes the Redevelopment Plan and any other documents incorporated herein by
reference, as though fully set forth herein.
12.16 Effective Date. The effective date of this Agreement shall be the latest of the
dates set next to the signatures of the parties hereto after all the parties hereto have signed this
Agreement, which latest date shall be inserted into the preamble to this Agreement.
[END - SIGNATURE PAGE AND EXHIBITS FOLLOW]
n91
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IN WITNESS WHEREOF, Agency and Participant have executed this Agreement as of
the Effective Date.
ATTEST:
1-2
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
M.
Attorneys for La Quinta
Redevelopment Agency
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
LIZA
Thomas Genovese, Executive Director
"PARTICIPANT"
APARTMENTS AT LA QUINTA VILLAGE,
LP, a California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
0911
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE SITE:
Parcel 3 of Parcel Map 30721, recorded on October 23, 2002, in
Book 203, Pages 30 through 31, of Parcel Maps, filed in the Office
of the County Recorder of Riverside County, State of California.
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i
EXHIBIT "B"
SITE MAP
[SEE FOLLOWING PAGE]
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x
[REPLACE THIS PAGE WITH SITE MAP]
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. J
EXHIBIT "C"
SCOPE OF DEVELOPMENT
PROJECT LOCATION: The Project will be constructed on a 12-acre site near the intersection
of Eisenhower Drive and Calle Tampico.
PROJECT DESCRIPTION: The Project will consist of (i) 32 two-story, architecturally
distinctive buildings, containing 200 one, two and three -bedroom for -lease units, ranging from
670 to 1,117 square feet, and (ii) a private recreation center, with a community room, fitness
center, billiards room, resident business center, swimming pool and spa, and other recreational
amenities, in a gated setting. Seventy-five of the units will be provided for moderate -income
households (those earning between 80% and 120% of the median income for Riverside County).
ARCHITECTURAL THEME: The architectural context of the Project will be predominated
by an earth -tone color palette of whitewashed stucco over adobe brick with red tile roofs,
consistent with the architectural expression of the historic La Quinta Resort and adjacent
grounds.
The home entries will be articulated as a focal point of a building's front elevation through the
use of roof elements, columns, porticos, recesses, window treatments and other architectural
features.
LANDSCAPING: Indigenous, naturalized and drought -resistant plants have been selected for
their appropriateness to the neighborhood architectural theme, climatic and soil conditions, and
to facilitate ease of plant maintenance.
CAMEO HOMES: The Project will be constructed by Cameo Homes, a Southern California
Corporation that has been in the development business for more than 30 years. The dwelling
units will be managed by Mesa Management, a subsidiary of Cameo Homes.
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EXHIBIT "D"
SCHEDULE OF PERFORMANCE
ITEM
TIME FOR
NO.
ITEM OF PERFORMANCE
PERFORMANCE
REFERENCE
1.
Participant submits evidence of
Concurrent with or prior to
§ 8.0, Agency
insurance required by Agency
Effective Date of Agreement.
Regulatory
Regulatory Agreement.
Agreement, § 7.0
2.
Participant submits complete
Not later than one hundred
§ 6.1.2, 6.1.3
application on Project to City,
twenty (120) days after
including all required preliminary
Effective Date.
and final drawings and permit
applications, and City has approved
same and is ready to issue building
permits for the Project upon
payment of fees, and Participant has
obtained all permits and approvals
required to commence construction
of the Project.
3.
Participant delivers to Agency for
Not later than five (5) days
§ 3.2-3.3
recordation (as applicable) executed
after the Effective Date.
Agency Note, Agency Deed of
Trust, and Agency Regulatory
Agreement.
4.
Agency disburses Agency Loan.
Per terms of the Agreement.
§ 4.1
5.
Participant commences construction
Fourteen (14) days after
§ 6.2.5.
of the Project.
issuance of building pen -nits.
6.
Participant completes construction
Within twenty-four (24)
§ 6.1.5, 6.4.
of the Project, obtains a certificate
months after performance of
of occupancy from the City (if
Item No. 5.
applicable), and requests Agency
issuance of the Release of
Construction Covenants.
7.
Agency issues Release of
Within fifteen (15) business
§ 6.4
Construction Covenants.
days after Participant's
request, if Participant is
entitled thereto.
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ITEM
NO.
ITEM OF PERFORMANCE
TIME FOR
PERFORMANCE
REFERENCE
8.
Agency cancels Agency Note and
Within ten (10) business days
§ 4.2
reconveys Agency Deed of Trust.
after Participant's completion
of Item No. 7.
9.
Participant submits annual report
Not later than the September I
Agency
pursuant to Health and Safety Code
following the June 30 end of
Regulatory
Section 33418 to Agency.
each fiscal year for term of the
Agreement, § 3.7
Regulatory Agreement.
It is understood that this Schedule of Performance is subject to all of the terms and
conditions of the text of the Agreement, including, but not limited to, the enforced delay
provisions contained in Section 12.4. The summary of the items performance in this Schedule of
Performance is not intended to supersede or modify the more complete description in the text; in
the event of any conflict or inconsistency between this Schedule of Performance and the text of
the Agreement, the text shall govern.
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EXHIBIT "E"
AGENCY NOTE
[SEE FOLLOWING PAGES]
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NOTE
2002 ("Note Date") $3,000,000 ("Loan Amount")
FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to
pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate
and politic ("Holder" or "Agency"), at a place designated by Holder, the principal sum of
THREE MILLION DOLLARS ($3,000,000) ("Note Amount"), plus accrued interest, or such
lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof.
The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth herein
and in that certain Affordable Housing Agreement by and among Maker and Holder, dated
("AHA"), pertaining to Maker's redevelopment of certain real property
defined in the AHA as the "Site."
Reference is also made to the following additional agreements and documents, of even
date herewith, involving Maker and Holder and/or pertaining to the Site:
(i) Deed of Trust with Assignment of Rents by and between Maker as borrower,
Holder as beneficiary, and as Trustee, and
recorded in the Office of the Riverside County Recorder ("Agency Deed of
Trust"). The Agency Deed of Trust partially secures repayment of this Note.
(ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and
between Maker and Holder, for the benefit of Holder, and recorded in the Office
of the Riverside County Recorder ("Agency Regulatory Agreement").
The AHA, Agency Deed of Trust, and Agency Regulatory Agreement are referred to
herein collectively as the "Agency Agreements." The Agency Agreements are incorporated
herein as though fully set forth. Except as otherwise provided herein, the defined terms used in
this Note shall have the same meaning as set forth in the AHA.
1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of
reimbursing Maker for a portion of Maker's Site acquisition costs and for assisting Maker with
Maker's costs for constructing the Project on the Site in accordance with the AHA.
2. Principal Amount. The principal amount of this loan shall be THREE MILLION
DOLLARS ($3,000,000) ("Loan Amount"). Simple interest shall accrue on the outstanding
principal amount at seven percent (7%) per annum, compounded annually. Interest shall accrue
as set forth in Section 4 in the event of a Maker default.
3. Disbursement of Agency Loan.
3.1 The Agency Loan shall be disbursed in four disbursements, in accordance with
this Section 3.
3.2 A portion of the Agency Loan in the amount of Six Hundred Fifty Thousand
Dollars ($650,000) ("Agency Acquisition Assistance") shall be disbursed to Maker to reimburse
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Maker for a portion of Maker's purchase price for the Site. Maker has submitted to Holder
evidence satisfactory to Holder that Maker has acquired fee title to the Site and certain adjacent
property for the purchase price of Two Million Dollars ($2,000,000) and that the portion of said
purchase price representing the purchase price for the Site is One Million Seven Hundred Thirty -
Eight Thousand Three Hundred Fourteen Dollars ($1,738,314). Notwithstanding the Holder's
acceptance of Maker's evidence, as set forth in the immediately preceding sentence, Maker
represents and to Holder that all of said evidence submitted to Holder is true and correct. Maker
agrees that if any of the evidence submitted to Holder is false or inaccurate, Maker shall
promptly reimburse Holder for any amount of the Agency Acquisition Assistance for which
Holder determines Maker was ineligible. Holder shall disburse the Agency Acquisition
Assistance to Maker within fifteen (15) business days after Maker's satisfaction of all of the
conditions to disbursement set forth in Section 3.6 below (except the condition set forth in
Section 3.6(K)).
3.3 A portion of the Agency Loan in the amount of One Hundred Fifty Thousand
Dollars ($150,000) ("Agency Architectural/Engineering Assistance") shall be disbursed to Maker
to reimburse Maker for architectural and engineering costs Maker incurs in designing the Project.
Once all conditions precedent to disbursement of the Agency Loan set forth in Section 3.6 below
have been satisfied, Maker may obtain disbursement of the Agency Architectural/Engineering
Assistance or portion thereof by (a) notifying Holder's Executive Director in writing of the
amount required; (b) providing Holder with supporting documentation showing the architectural
and engineering work performed and the actual cost thereof; and (c) providing Holder with
unconditional waiver and releases in the form set forth in Civil Code Section 3262; provided,
however, that Maker may obtain disbursement of the Agency Architectural/Engineering
Assistance prior to such time that Maker has obtained all of the Approved Plans and Permits, as
set forth in Section 3.6(K). If the requested disbursement is permitted under the terms of this
Note, Holder's Executive Director shall promptly, but in no event later than fifteen (15) business
days after Holder's receipt of all of the items listed in clauses (a)-(c) of this Section 3.3, effect
payment directly to Maker by check.
3.4 A portion of the Agency Loan in the amount of One Million Eight Hundred
Thousand Dollars ($1,800,000) ("Agency Sitework Assistance") shall be disbursed to Maker to
reimburse Maker for permit fees Maker is required to pay to construct the Project and for costs
Maker incurs in grading the Site and installing the wet and dry utility infrastructure necessary for
the Project. Once all conditions precedent to disbursement of the Agency Loan set forth in
Section 3.6 below have been satisfied, Maker may obtain disbursement of the Agency Sitework
Assistance or portion thereof by (a) notifying Holder's Executive Director in writing of the
amount required; (b) providing Holder with supporting documentation showing the sitework
work performed and the actual cost thereof; and (c) providing Holder with unconditional waiver
and releases in the form set forth in Civil Code Section 3262. If the requested disbursement is
permitted under the terms of this Note, Holder's Executive Director shall promptly, but in no
event later than fifteen (15) business days after Holder's receipt of all of the items listed in
clauses (a)-(c) of this Section 3.4, effect payment directly to Maker by check.
3.5 A portion of the Agency Loan in the amount of Four Hundred Thousand Dollars
($400,000) ("Agency Completion Assistance") shall be disbursed, by check, to Maker within
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fifteen (15) business days after Maker completes construction of the Project, as evidenced by
Holder's issuance to Maker of a Release of Construction Covenants.
3.6 The following shall be conditions precedent to Holder's disbursement of any
portions of the Agency Loan:
(A) Holder shall have executed the AFA;
(B) Holder shall have accepted Agency's Title Policy for the Site, in
accordance with Section 3.3 of the AFA.
(C) Maker shall have timely submitted to the Executive Director of Holder
and obtained approval from same, of Maker's evidence of insurance;
(D) Maker shall have signed the Agency Regulatory Agreement and delivered
same to Holder for recordation;
(E) Maker shall have signed this Note and delivered same to Holder;
(F) Maker shall have signed the Agency Deed of Trust and delivered same to
Holder for recordation and filing;
(G) Maker shall not be in default of its obligations under the AHA, this Note,
or under the Agency Regulatory Agreement;
(H) Maker shall not be in default of any of the terms and conditions of the Sale
Escrow Instructions;
(I) Owner shall have executed, and Maker shall have recorded, a
subordination agreement, subordinating the Landaq Restrictions to the Agency Deed of Trust
and Agency Regulatory Agreement;
(J) Maker shall have obtained all of the necessary land use entitlements to
construct the Project; and
(K) Maker shall have timely obtained all of the Approved Plans and Permits,
including, but not limited to, building permits to construct the Project (except that Maker may
obtain disbursement of the Agency Acquisition Assistance and the Agency
Architectural/Engineering Assistance prior to the time it satisfies this condition).
4. Term of Note; Repay. Repayment of the Loan Amount, as adjusted and redefined as
the "Adjusted Loan Amount" pursuant to this Section 4, shall be through monthly installment
repayment amounts.
4.1 Subject to the provisions of (a) Section 5 herein which provide for acceleration of
the then outstanding principal and accrued interest and immediate payment thereof in the event
of a default by Maker and (b) Sections 4.2 through 4.4 below, which provide for the cancellation
of this Note in the event certain specified conditions are met:
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- J
(A) Maker shall not be required to make any payments of principal or interest
on this Note for a period of twenty-eight (28) months following the Note Date ("Grace Period").
(B) Maker agrees that interest shall accrue on any amounts of the Agency
Loan that have been disbursed prior to the expiration of the Grace Period, and that as a result
thereof, as of the first day of the next calendar month following expiration of the Grace Period
(the "Repayment Commencement Date"), the outstanding principal and accrued interest to date
due Holder on which payments are to be made shall be adjusted to reflect said accrual ("Adjusted
Loan Amount"), and interest shall continue to accrue, on the Adjusted Loan Amount, at the rate
of seven percent (7%) per annum, compounded annually.
(C) Maker shall commence repayment of the Adjusted Loan Amount and
interest thereon (at the rate specified in Paragraph 1) in sixty (60) equal monthly installments of
an amount set forth in a repayment schedule to be prepared by Holder within sixty (60) days
after the Holder's disbursement to Maker of the Agency Completion Assistance.
4.2 Notwithstanding the foregoing, this Note shall be deemed paid in full when
Maker, through monthly payments, has repaid the Holder an amount equal to the Adjusted Loan
Amount plus interest, as set forth in this Note.
4.3 Notwithstanding anything to the contrary herein, this Note shall be automatically
cancelled, as evidenced by Holder's return to Maker of the original of this Note marked
"cancelled," and the Deed of Trust shall be immediately reconveyed, at such time that Holder has
issued a Release of Construction Covenants for the Project.
4.4 Maker shall have the right to prepay all or any portion of this Note at any time
without penalty, and upon such repayment the Agency Deed of Trust shall be reconveyed.
Prepayment shall not affect the Agency Regulatory Agreement or the term of the Agency
Regulatory Agreement.
4.5 Any payments made by Maker in payment of this Note shall be applied in the
following order: (i) first to the interest then accrued and due on the unpaid principal balance
under this Note, (ii) second to reduction of the principal balance of this Note.
5. Default, Acceleration, Cross -Default. In the event:
5.1 Maker fails to timely make a payment required by this Note within ten (10) days
following the due date of any payment due hereunder; or
5.1 Maker fails to timely make any other payment due hereunder; or
5.2 Maker is in material default of any of the covenants, terms, or provisions of this
Note, any of the Agency Agreements, or any of the terms or conditions of the Sale Escrow
Instructions and Maker fails to timely cure such default under the terms of the applicable
agreement, it being understood and agreed by Maker that a default of this Note, or of any of the
Agency Agreements or of the Sale Escrow Instructions shall be a default of all of the foregoing
listed documents;
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then Maker shall be in default of this Note, and all portions of the Loan Amount that have been
disbursed to Maker and all accrued interest thereon shall become immediately due and payable.
The rate of interest applicable to periods of default for the defaults set forth in this Section 5 shall
be calculated at the lesser of ten percent (10%) per annum or the maximum legal rate, and shall
accrue as of the date such payment was originally due.
6. Collection Costs, Attorneys' Fees. If, because of any event of default under this Note or
any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend any
provision of this instrument, whether or not suit is filed hereon, then Maker shall pay upon
demand reasonable attorneys' fees, expert witness fees and all costs so incurred by Holder
together with interest thereon until paid at the applicable rate of interest payable hereunder, as if
such fees and costs had been added to the principal owing hereunder.
7. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become
liable on this Note waive presentment, protest and demand, notice of protest, demand and
dishonor and nonpayment of this Note and any and all other notices or matters of a like nature,
and consent to any and all renewals and extensions near the time of payment hereof and agree
further that at any time and from time to time without notice, the terms of payment herein may
be modified or the security described in any documents securing this Note released in whole or
in part, or increased, changed or exchanged by agreement between Holder and any owner of the
premises affected by said documents securing this Note, without in any way affecting the
liability of any party to this Note or any persons liable or to become liable with respect to any
indebtedness evidenced hereby.
7. Severability. The unenforceability or invalidity of any provision or provisions of this
Note as to any persons or circumstances shall not render that provision or those provisions
unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in
all other respects, shall remain valid and enforceable.
8. Modifications. Neither this Note nor any term hereof may be waived, amended,
discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof
be effective except by an instrument in writing signed by Maker and Holder. No delay or
omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such
right or of any other right under this Note.
9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the
terms of this Note shall be implied from any failure of the Holder of this Note to take, or any
delay be implied from any failure by the Holder in taking action with respect to such breach,
default or failure from any prior waiver of any similar or unrelated breach, default or failure.
10. Usury. Notwithstanding any provision in this Note, the total liability for payment in the
nature of interest shall not exceed the limit imposed by applicable laws of the State of California.
11. Nonassi ng ability. Maker may only Transfer (as that term is defined in the AHA) this
Note in accordance with provisions and restrictions pertaining to a transfer of the AHA as set
forth in the AHA. Holder may freely Transfer Holder's interest in this Note in any manner, at
11.1.
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Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers the
AHA to such transferee.
12. Governing Law. This Note has been executed and delivered by Maker in the State of
California and is to be governed and construed in accordance with the laws thereof.
13. Time of Essence. Time is of the essence in the performance of the obligations and
provisions set forth in this Note.
IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date.
"MAKER"
APARTMENTS AT LA QUINTA VILLAGE,
LP, a California limited partnership
By: Apartments at La Quinta Village,
LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
882/015610-0063
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EXHIBIT "F"
AGENCY DEED OF TRUST
[SEE FOLLOWING PAGES]
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Recording Requested By And
When Recorded Return to:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
SPACE ABOVE THIS LINE FOR RECORDER'S USE
EXEMPT FROM RECORDING FEE PER GOV. CODE § 6103
DEED OF TRUST WITH ASSIGNMENT OF RENTS
AND RIDER ATTACHED HERETO
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 APARTMENTS AT LA QUINTA VILLAGE, LP,
a California limited partnership, herein called TRUSTOR, whose address is 1105 Quail Street, Newport Beach, CA,
92658, , a California corporation, herein called TRUSTEE, and LA QUINTA
REDEVELOPMENT AGENCY, 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, County of Riverside, State of California, described as:
Parcel 3 of Parcel Map No. 30721, recorded on October 23, 2002, in Book 203, Pages 30 through 31, of Parcel
Maps, filed in the Office of the County Recorder of Riverside County, State of California.
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 THREE MILLION DOLLARS ($3,000,000), 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 his 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
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
16 114
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COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK PAGE COUNTY BOOK PAGE
Imperial
1189
701
Napa
704
742
Santa Cruz
1638 607 Yuba 398 693
Inyo
165
672
Nevada
363
94
Shasta
Soo 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 RIDER ATTACHED TO THIS DEED OF TRUST
STATE OF CALIFORNIA
COUNTY OF
On
before me,
personally appeared JAMES GIANULIAS, personally
known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose
names(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 signatures(s) on the instrument the
person(s) or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
Signature of Trustor
APARTMENTS AT LA QUINTA VILLAGE, LP, a
California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
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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:
I ) 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 maybe 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 of 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 is such
manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said
property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior
or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from 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:
I) 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 his 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 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, 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 his own name sue for or otherwise collect such rents, issues, and profits, including those past
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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 Truster, 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
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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RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS
THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
executed this day of , by APARTMENTS
AT LA QUINTA VILLAGE, LP, a California limited partnership, herein "Trustor," in favor of
the LA QUINTA REDEVELOPMENT AGENCY, 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 Note by and between Trustor and Beneficiary, dated
on or about the date set forth above, the repayment of which by Trustor is secured by this Deed
of Trust ("Agency Note"), and (ii) to the Agency Agreements which are described in the Agency
Note.
The parties hereto agree:
1. PropertX. The estate subject to this Deed of Trust is Trustor's fee 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 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 Agency
Agreements.
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
e. All modifications, extensions and renewals of any of the obligations
secured hereby, however evidenced.
3. Obli atg ions. 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.
1IS
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4. Subordination. Beneficiary agrees to subordinate this Deed of Trust to Trustor's
construction loan, provided that (i) the maximum cumulative principal amount of the
construction loan shall not exceed ninety percent (90%) of the lender's appraised value of the
Property upon completion of the affordable housing project described in the Agency Agreements
("Project"), which amount shall be verified in writing to Beneficiary's Executive Director's
reasonable satisfaction; (ii) the loan(s) shall obligate Trustor to expend loan proceeds for no
other purpose than the Project; and (iii) the loan(s) shall provide that any notice of Trustor breach
or default shall also be sent to the Beneficiary at the address listed in Section 10 and that upon
receipt of such notice, Beneficiary shall have the right to (A) cure the noticed breach or default,
(B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the
Property from Trustor subject to the construction lender's deed of trust, without the consent of
Trustor or the holder of the construction lender's deed of trust, and that Beneficiary's exercise of
the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to
accelerate the amounts due under the loan. In agreeing to provide the subordination referred to
in the preceding sentence, Beneficiary hereby incorporates the finding required to be made in
accordance with Health and Safety Code Section 33334.14.
5. Incorporation. All terms of the Agency Note, Agency Agreements, 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.
6. 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.
7. 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.
8. 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
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liens which may be prior in lien or payment of the 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 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.
9. 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, 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.
10. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary
addressed to:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92263
Attn: Executive Director
[SIGNATURE ON NEXT PAGE]
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IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's
acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set
forth above.
TRUSTOR:
APARTMENTS AT LA QUINTA VILLAGE, LP, a
California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
882/015610-0063 4
325173.02 AM02
STATE OF CALIFORNIA
ss.
COUNTY OF
On before me, , personally
appeared , personally known to me (or
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.
Witness my hand and official seal.
Notary Public
[SEAL]
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EXHIBIT "G"
AGENCY REGULATORY AGREEMENT
[SEE FOLLOWING PAGES]
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code 6103)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement") is made and entered into this day of ,
("Effective Date"), by and between LA QUINTA REDEVELOPMENT AGENCY, a
public body, corporate and politic ("Agency") and APARTMENTS AT LA QUINTA
VILLAGE, LP, a California limited partnership ("Participant").
RECITALS:
A. Participant is the owner of fee title to that certain real property more particularly
described in Attachment No. 1, attached hereto and incorporated by reference herein (the "Site").
B. Pursuant to an Affordable Housing Agreement, by and between Participant and
Agency, dated (the "AHA"), Agency has agreed to provide financial
assistance to Participant in the sum of Three Million Dollars ($3,000,000) (the "Agency Loan")
for the purpose of (i) reimbursing Participant for a portion of Participant's purchase price for the
Site and (ii) Participant's subsequent construction thereon of a rental apartment complex (the
"Project"). The ABA requires Participant to enter into this Agreement, which provides, among
other requirements, that the rental and occupancy of not fewer than seventy-five (75) of the
apartment units within the Project be rented to and occupied by persons and families whose
household income does not exceed 120% of the median income for Riverside County, in effect
from time to time.
C. Reference is also made to the following documents, of even date herewith:
(i) Note, by Participant as Maker and borrower in favor of the Agency as
lender, ("Agency Note"). The Agency Note evidences the Agency Loan.
(ii) Deed of Trust with Assignment of Rents, by and between Participant as
borrower and Agency as beneficiary, and recorded in the Office of the Riverside County
Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of
the Agency Note.
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The AHA and both of the foregoing listed documents are referred to herein collectively
as the "Agency Agreements." The Agency Agreements are incorporated herein as if fully set
forth.
D. Pursuant to the AHA and the Agency Agreements, Participant has agreed to
rehabilitate the Site and develop thereon, and thereafter maintain, a rental housing project with
not fewer than seventy-five (75) units restricted to rental and occupancy to persons and families
whose household income does not exceed 120% of the median income for Riverside County.
E. Agency and Participant now desire to place restrictions upon the use and
operation of the Site, in order to ensure that the Site shall be operated continuously as a rental
apartment complex in accordance with the terms hereof.
AGREEMENT:
NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for
themselves, their heirs, executors, administrators, successors and assigns, and all persons
claiming under or through them, that, for a term equal to fifty-five (55) years commencing upon
the date of the recordation of the Release of Construction Covenants for the Site in accordance
with the AHA, as follows:
1.0 DEFINITIONS.
1.1 Riverside County Median Income. For purposes of this Agreement, the
"Riverside County Median Income" as of any date shall be determined by reference to the
regulations published by the California Department of Housing and Community Development
pursuant to Health and Safety Code Section 50093, or its successor, as of such date.
1.2 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental
apartment dwelling unit on the Site.
1.3 Restricted Unit. As used in this Agreement, the term "Restricted Unit" shall
mean not fewer than seventy-five (75) Units to be rented to and occupied by Eligible Tenants.
1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant' shall refer
to a Moderate Income Tenant.
1.5 Moderate Income. As used in this Agreement, the term "Moderate Income" shall
mean household income, adjusted for family size, which does not exceed one hundred twenty
percent (120%) of the Riverside County Median Income.
1.6 Moderate Income Tenant. As used in this Agreement, the term "Moderate
Income Tenant' shall mean a tenant whose household income does not exceed Moderate Income
and who is otherwise eligible to rent, and does rent, a Restricted Unit and thus is an Eligible
Tenant for a Restricted Unit.
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1.7 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall
mean an annual rent amount that does not exceed the maximum percentage of income that can be
devoted to rent by a Moderate Income Tenant as set by California law.
1.8 Unrestricted Unit. As used in this Agreement, the term "Unrestricted Unit" shall
mean a Unit that is not a Restricted Unit, i.e., a Unit that is not subject to the affordability
covenants that apply to the Restricted Units.
2.0 RESIDENTIAL RENTAL PROPERTY.
2.1 Construction of the Project on the Site. Participant shall construct the Project on
the Site in accordance with the Agency Agreements, including the Schedule of Performance set
forth in the AHA, for the purpose of providing the Restricted Units described herein and in the
Agency Agreements. The Project shall be owned, managed, and operated as a rental apartment
project, with not fewer than seventy-five (75) Units rented and occupied as Restricted Units as
provided in this Agreement.
2.2 Facilities. All of the dwelling units in the Project shall contain facilities for
living, sleeping, eating, cooking and sanitation in accordance with the this Agreement, the AHA,
the Agency Agreements, and all of the permits and approvals for the Project.
2.3 Residential Use. Without the Agency's prior written consent, which consent may
be given or withheld in its sole and absolute discretion, none of the dwelling 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 Units be used for day care facilities or as a place of business except as
may otherwise be allowed by applicable law.
2.4 Conversion of Units. No part of the Project will at any time be owned by a
cooperative housing corporation, nor shall the Participant take any steps in connection with the
conversion to such ownership or uses to condominiums, or to any other form of ownership,
without the prior written approval of Agency which approval may be given or withheld in its sole
and absolute discretion.
2.5 Preference to Eligible Tenants. All of the dwelling units will be available for
rental in accordance with the terms of this Agreement, and the Participant shall not give
preference to any particular class or group in renting the dwelling units in the Project, except to
the extent that the Restricted Units are required to be leased or rented to Eligible Tenants and
except as provided in Section 3.5 below.
2.6 Resident Manager and Staff Units. A resident manager or staff unit or units may
be counted as a Restricted Unit only if the tenants of such Unit(s) are Eligible Tenants.
2.7 Liability of Participant. Participant and any manager it employs shall not incur
any liability under this Agreement as a result of fraud or intentional misrepresentation by a
tenant.
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3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS.
Participant hereby represents, warrants, and covenants as follows:
3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of
this Agreement, the Restricted Units shall be continuously occupied or held vacant and available
for occupancy by Eligible Tenants.
3.2 Rental Rates. Participant hereby agrees to and shall rent Restricted Units
occupied by Eligible Tenants at no greater than Affordable Rent.
3.3 Occupancy By Eligible Tenant. A Restricted Unit occupied by an Eligible Tenant
who qualified as a Moderate Income Tenant at the commencement of the occupancy shall be
treated as occupied by an Eligible Tenant at such income level until a recertification of such
Eligible Tenant's income in accordance with Section 3.7 below demonstrates that such tenant no
longer qualifies as an Eligible Tenant at that income level. A Restricted Unit previously
occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible
Tenant until the Restricted Unit is reoccupied, provided Participant notifies Agency in writing of
such vacancy within five (5) business days thereafter, and uses its commercially reasonable
efforts to re -lease the vacant Restricted Unit to an Eligible Tenant. Any vacated Restricted Unit
shall be held vacant until re -leased to an Eligible Tenant, unless there are sufficient numbers of
Eligible Tenants then leasing and occupying Units.
3.4 Income Computation Certificate. Immediately prior to an Eligible Tenant's
occupancy of a Restricted Unit, Participant shall obtain and maintain on file an Income
Computation and Certification form (which form shall be approved in advance by the Agency
Executive Director) from each such Eligible Tenant dated immediately prior to the date of initial
occupancy in the Project by such Eligible Tenant. In addition, Participant shall provide such
further information as may be required in the future by the Agency for purposes of verifying a
tenant's status as an Eligible Tenant. Participant shall use its best 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 applicant's current employer; (iii) obtain an
income verification form from the Social Security Administration and/or California Department
of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is
unemployed or did not file a tax return for the previous calendar year, obtain other verification of
such applicant's income as is satisfactory to the Agency; and (v) obtain such other information as
may be requested by the Agency. A copy of each such Income Computation and Certification
shall be filed with the Agency prior to the occupancy of a Restricted Unit by an Eligible Tenant
whenever possible, but in no event more than thirty (30) days after initial occupancy by said
tenant.
3.5 Rental Priority. During the term of this Agreement, Participant shall use its
reasonable commercial efforts to lease Restricted Units to credit -worthy Eligible Tenants in the
following order of priority: (i) displaced persons entitled to a preference pursuant to California
Health and Safety Code Section 33411.3 or successor statute; and (ii) other persons meeting the
eligibility requirements of this Agreement. Participant shall, and Agency may, maintain a list
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(the "Housing List") of persons who have notified Participant and/or Agency of their desire to
rent a Restricted Unit in the Project and who have incomes which would qualify them as an
Eligible Tenant, and Participant shall offer to rent units on the above -referenced priority basis.
Should multiple tenants be equally eligible (as to income, credit history, and other
nondiscriminatory criteria) and qualified to rent a unit, Participant shall rent available Restricted
Units to Eligible Tenants on a first -come, first -served basis.
3.6 Recertification. Immediately prior to the first anniversary date of the occupancy
of a Restricted Unit by an Eligible Tenant, and on each anniversary date thereafter, Participant
shall recertify the income of such Eligible Tenant by obtaining a completed Income Computation
and Certification based upon the current income of each occupant of the Restricted Unit. If,
upon recertification, the occupants do not qualify as an Eligible Tenant (or the occupants fail to
provide a completed Income Computation and Certification to Participant) such occupants may
be allowed to remain but their Unit shall be redesignated as an Unrestricted Unit. In that event,
Participant shall (i) redesignate the next vacant Unrestricted Unit as a Restricted Unit; (ii) notify
Agency in writing that it is redesignating such vacant Unrestricted Unit as a Restricted Unit, and
(iii) thereafter rent such redesignated unit to an Eligible Tenant; provided, however, that
Participant shall not be required to redesignate the next vacant Unrestricted Unit as a Restricted
Unit if, prior to the time an Unrestricted Unit becomes vacant, Participant identifies an occupant
of an Unrestricted Unit as qualifying as an Eligible Tenant, completes an Income Computation
Certificate and any other required documentation to confirm that such occupant(s) is an Eligible
Tenant, redesignates that unit as a Restricted Unit, and notifies the Agency in writing of such
redesignation. Participant shall provide the Agency with a copy of each such recertification with
the next submission of Certificate of Continuing Program Compliance pursuant to Section 3.7.
Each lease agreement with an Eligible Tenant shall reference this Section and inform such
Eligible Tenant of the recertification requirements herein and the ramifications for failing to
comply therewith.
3.7 Certificate of ContinuingProuam Compliance. Upon the issuance of the Release
of Construction Covenants, and by September 1 following the end of the immediately preceding
fiscal year ending on June 1, Participant shall annually advise the Agency of the occupancy of
the Project by delivering a Certificate of Continuing Program Compliance in the form required
by Agency (or complying with this section if no form is provided), stating (i) the dwelling units
of the Project which were Restricted Units during such period and (ii) that to the knowledge of
Participant either (a) no unremedied default has occurred under this Agreement, or (b) a default
has occurred, in which event the Certificate shall describe the nature of the default and set forth
the measures being taken by the Participant to remedy such default. Participant shall pay to
Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not
exceed FIVE HUNDRED DOLLARS ($500) as such amount shall be permitted to increase by
the Consumer Price Index ("CPI") published by the United States Department of Labor, Bureau
of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Beach -
Anaheim Average, All Items (1984=100), from and after the date of this Agreement, or, if the
CPI is discontinued, such official index as may then be in existence and which is most nearly
equivalent to the CPI.
3.8 Maintenance of Records. Participant shall maintain complete and accurate
records pertaining to the Units, and shall permit any duly authorized representative of the
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Agency to inspect the books and records of Participant pertaining to the Project including, but
not limited to, those records pertaining to the occupancy of the Restricted Units.
3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision
to the effect that Participant has relied on the income certification and supporting information
supplied by the tenant in determining qualification for occupancy of the unit, and that any
material misstatement in such certification (whether or not intentional) will be cause for
immediate termination of such lease.
3.10 Remedy For Excessive Rent Charge.
3.10.1 It shall constitute a default for Participant to charge or accept for a
Restricted Unit rent amounts in excess of the amount provided for in Section 3.2 of this
Agreement. In the event that Participant charges or receives such higher rental amounts, in
addition to any other remedy Agency shall have for such default, Participant shall be required to
pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of
the amount permitted pursuant to this Agreement.
3.10.2 It shall constitute a default for Participant to rent any Restricted Unit to
a tenant who is not an Eligible Tenant. In the event Participant rents a Restricted Unit to an
ineligible tenant, in addition to any other equitable remedy Agency shall have for such default,
Participant, for each separate violation, shall be required to pay to Agency an amount equal to (i)
two times the greater of (A) the total rent Participant received from such ineligible tenant, or (B)
the total rent Participant was entitled to receive for renting that Restricted Unit, plus (ii) any
relocation expenses incurred by Agency or the City of La Quinta as a result of Participant having
rented to such ineligible person.
3.10.3 It shall constitute a default for Participant to rent any of the Restricted
Units in violation of the leasing preference requirements of Sections 3.5 of this Agreement. In
the event Participant rents a unit in violation of the leasing preference requirements, in addition
to any other equitable remedy Agency shall have for such default, Participant, for each separate
violation, shall be required to pay Agency an amount equal to two (2) months of rental charges.
The terms of this Section shall not apply if Participant rents to an ineligible person as a result of
such person's fraud or misrepresentation.
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN
SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A
REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT
AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT
SET FORTH IN SECTIONS 3.10.1 THROUGH 3.10.3, CONSIDERING ALL
OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF
THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE
AMOUNTS TO THE RANGE OF HARM TO AGENCY AND
ACCOMPLISHMENT OF AGENCY'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
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INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.10
SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE
DEFAULTS SET FORTH IN THIS SECTION 3.10, BUT NOTHING IN THIS
SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY
FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT
REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF
THE NOTE OR OTHER OF THE AGENCY AGREEMENTS. IN PLACING
ITS INITIAL 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 AGREEMENT.
PARTICIPANT'S INITIALS: AGENCY'S INITIALS:
4.0 MAINTENANCE.
4.1 Maintenance Obligation. Participant agrees to and shall maintain all interior and
exterior improvements, including landscaping, on the Site in good condition and repair (and, as
to landscaping, in a healthy condition) and in accordance with all of the permits and approvals
for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all
federal, state, county, municipal, and other governmental agencies and bodies having or claiming
jurisdiction and all their respective departments, bureaus, and officials. Agency places prime
importance on quality maintenance to protect its investment and to ensure that all Agency -
assisted affordable housing projects within the City are not allowed to deteriorate due to below -
average maintenance. Normal wear and tear of the Site improvements will be acceptable to
Agency assuming Participant agrees to perform all necessary Site improvements to assure the
Site is maintained in good condition. Maintenance requirements shall include that: (a) no
improperly maintained landscaping shall be visible from public rights -of -way, including (i) no
lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other
plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or
shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be
likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and/or other
vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded
furniture, appliances, or other household equipment stored in yard areas for periods exceeding
one (1) week, (ii) no packing boxes, lumber, trash, dirt, or other debris stored in yards for periods
exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no
unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from
public property or neighboring properties, and (iv) no vehicles parked or stored in areas other
than approved parking areas; (c) no buildings may be left in an unmaintained condition,
including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that
constitutes an unsightly appearance that detracts from the aesthetics or property value of the
subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped,
cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or
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malicious mischief, and (v) no graffiti or accumulation of waste or debris. Participant shall make
all repairs and replacements necessary to keep the improvements in good condition and repair
and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping
with comparable approved materials. In the event that Participant breaches any of the covenants
contained in this Section and Participant does not commence to cure such breach within five (5)
days after written notice from Agency (with respect to graffiti, debris, waste material,
landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with
respect to building improvements), and after commencing the cure to diligently prosecute such
cure to completion, then Agency, in addition to whatever other remedy it may have at law or in
equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and
work necessary to protect, maintain, and preserve the improvements and landscaped areas on the
Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures
arising from such acts and work of protection, maintenance, and preservation by Agency and/or
costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall
be promptly paid by Participant to Agency upon demand.
4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty
(30) days after Participant's receipt of notice thereof, the same shall be deemed delinquent, and
the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until
paid. Any and all delinquent amounts, together with said interest, costs and reasonable
attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of
Participant, and the rents, issues and profits of such property. Agency may bring an action at law
against Participant to pay any such sums or foreclose the lien against Participant's property
interests. Any such lien may be enforced by sale by the Agency following recordation of a
Notice of Default of Sale given in the manner and time required by law as in the case of a deed
of trust; such sale to be conducted in accordance with the provisions of Section 2924, et sue., of
the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of
trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this
Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust.
5.0 MANAGEMENT.
5.1 Gross Mismanagement. In the event of "Gross Mismanagement" (as that term is
defined below) of the Project, Agency shall have the authority to require that such Gross
Mismanagement cease immediately, and further to require the immediate replacement of the
manager. Agency shall provide written notice to Participant of the event(s) of Gross
Mismanagement occurring and Participant shall have five (5) business days after receipt of such
notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified
in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect
such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to
thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of
this Agreement the term "Gross Mismanagement" shall mean management of the Project in a
manner which violates the terms and/or intention of this Agreement to operate an affordable
rental housing complex of the highest standard, and shall include, but is not limited to, the
following:
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5.1.1 Knowingly leasing Restricted Units to ineligible tenants or tenants whose
income exceeds the prescribed levels;
5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels
without taking immediate steps to stop such overcrowding;
5.1.3 Failing to timely maintain the Project and the Site in the manner required
by this Agreement or failing to submit materially complete reports;
5.1.4 Failing to timely submit the reports as required by this Agreement;
5.1.5 Fraud in connection with any document or representation relating to this
Agreement or embezzlement of Project monies; and
5.1.6 Failing to fully cooperate with law enforcement in maintaining a crime -
free environment on the Site.
5.2 Lease Approval. The initial form lease agreement to be used by Participant for
the rental of any of the Units ("Lease Agreement"), and any changes to such form Lease
Agreement regarding the provisions required by Section 3.6 and Section 3.9 to be included in the
form Lease Agreement shall be reasonably approved in advance by Agency's Executive Director
prior to the initial use of the lease form and prior to the first use of the changed form.
6.0 COMPLIANCE WITH LAWS, ENVIRONMENTAL MATTERS.
6.1 Compliance With Laws. Participant shall comply with (i) all ordinances,
regulations and standards of the City, Agency, County of Riverside, any regional governmental
entity, State of California, and federal government applicable to the Property; (ii) all rules and
regulations of any assessment district of the City with jurisdiction over the Property; and (iii) all
applicable labor standards of California law and federal law, including the payment of prevailing
wages; and (iv) the requirements of California law and federal law with respect to the
employment of undocumented workers or illegal aliens.
6.2 Environmental Matters.
6.2.1 Definitions. For the purposes of this Agreement, unless the context
otherwise specifies or requires, the following terms shall have the meanings herein specified:
6.2.1.1 The term "Hazardous Materials" shall mean any substance,
material, or waste which is or becomes regulated by any local governmental authority, the
County of Riverside, the State of California, a regional governmental authority, or the United
States Government, including, but not limited to, any material or substance which is (i) defined
as a "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
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.. J
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) friable asbestos, (vii) polychlorinated byphenyls,
(viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix)
designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C.
1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et M. (42 U.S.C. 6903) or (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601 et se .
6.2.1.2 The term "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing or hereafter occurring) of the improvements, facilities,
soil, groundwater, air or other elements on, in or of the Site 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 Site.
6.2.1.3 The term "Governmental Requirements" shall mean all past,
present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the
United States, the state, the county, the city, or any other political subdivision in which the Site is
located, and any other state, county city, political subdivision, agency, instrumentality or other
entity exercising jurisdiction over the Site.
6.2.2 Indemnity. Participant shall save, protect, defend, indemnify and hold
harmless Agency and the City and their respective officers, officials, 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 Agency or City or their respective officers, officials, 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) Participant's placement on or under
the Site of any Hazardous Materials or Hazardous Materials Contamination on or after the date
of this Agreement, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from
the Site of any Hazardous Materials or Hazardous Materials Contamination on or after the date
of this Agreement, or (iii) any Liabilities incurred under any Governmental Requirements
relating to the acts described in the foregoing clauses (i) and (ii).
6.3 Duty to Prevent Hazardous Material Contamination. Participant 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, Participant 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.
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6.4 Obligation of Participant to Remediate Premises. Notwithstanding the obligation
of Participant to indemnify Agency, City, and their respective officers, officials, members,
employees, agents, and representatives pursuant to Section 6.2.2, Participant 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 Site for the purposes contemplated by this
Agreement and the AHA, which requirements or necessity arise from the presence upon, about
or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination for which
Participant is responsible. Such actions shall include, but not be limited to, the investigation of
the environmental condition of the Site, the preparation of any feasibility studies or reports and
the performance of any cleanup, remedial, removal or restoration work.
6.5 Environmental Inquiries. Participant, 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
Participant 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 Agency's Executive Director, and provide to him/her a
copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries
relating to the Site, 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 Participant shall report to the Executive
Director, as soon as possible after each incident, any unusual, potentially important incidents.
In the event of a responsible release of any Hazardous Materials into the environment,
Participant 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,
Participant shall furnish to the Executive Director a copy or copies of any and all other
environmental entitlements or inquiries relating to or affecting the Site 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.
7.0 INSURANCE.
7.1 Duty to Procure Insurance. Participant, for the term of this Agreement, shall
procure and keep in full force and effect or cause to be procured and kept in full force and effect
for the mutual benefit of Participant and Agency, and shall provide Agency evidence reasonably
acceptable to Agency Executive Director, insurance policies meeting the minimum requirements
set forth below:
7.1.1 Commercial General Liability insurance with respect to the Site and the
operations of or on behalf of Participant, in an amount not less than One Million Dollars
($1,000,000) per occurrence combined single limit including products, completed operations,
contractual, bodily injury, personal injury, death and property damage liability per occurrence,
subject to such increases in amount as Agency may reasonably require from time to time;
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provided, that the percentage increase in coverage shall not be required to exceed the percentage
increase in the Consumer Price Index published by the United States Department of Labor,
Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long
Beach -Anaheim Average, All Items (1984 = 100) (the "Index"), from and after the date of this
Agreement, or, if said Index is discontinued, such official index as may then be in existence and
which is most nearly equivalent to said Index (the "CPI Adjustment"). Unless otherwise
approved in advance by the Agency Executive Director, the insurance to be provided by
Participant may provide for a deductible or self -insured retention of not more than Ten Thousand
Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic
increases in the minimum amount of total insurance coverage set forth above.
7.1.2 With respect to the improvements and any fixtures and furnishings to be
owned by Participant on the Site, 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. Agency shall be a loss payee under such policy or policies and such insurance
shall contain a replacement cost endorsement.
7.2 Policy Requirements. All policies of insurance required to be carried by
Participant shall meet the following requirements and contain the following endorsements,
provisions, or clauses (as applicable):
7.2.1 The policies shall be written by responsible and solvent insurance
companies licensed in the State of California and having policyholders' rating of A or better, in
the most recent addition of `Best's Key Rating Guide -- Property and Casualty." A copy of each
paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a
certificate of the insurer, certifying that such policy has been issued, providing the coverage
required herein, and containing the provisions specified herein, shall be delivered to Agency on
or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30)
days prior to the expiration of coverage. Agency may, at any time, and from time to time,
inspect and/or copy any and all insurance policies required to be procured by Participant
hereunder. In no event shall the limits of any policy be considered as limiting the liability of
Participant hereunder.
7.2.2 The insurer shall not cancel or materially alter the coverage provided by
such policy in a manner adverse to the interest of the insured without first giving Agency a
minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and
7.2.3 A waiver by the insurer of any right to subrogation against Agency and
City, and their respective officers, officials, members, employees, agents, and representatives,
which arises or might arise by reason of any payment under such policy or policies or by reason
of any act or omission of Agency or City or their respective officers, officials, members,
employees, agents, or representatives.
13 c)
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7.2.4 The Agency and the City and their respective officers, officials, members,
employees, agents, and representatives shall be named as additional insureds on the Commercial
General Liability policies.
7.2.5 Coverage provided by these policies shall be primary and non-
contributory to any insurance carried by the Agency or City or their respective officers, officials,
members, employees, agents, or representatives.
7.2.6 Failure to comply with reporting provisions shall not affect coverage
provided to Agency and its officers, officials, members, employees, agents, or representatives.
7.3 Failure to Procure Insurance. If Participant fails to procure and maintain the
above -required insurance despite its availability, then Agency, in addition to any other remedy
which Agency may have hereunder for Participant's failure to procure, maintain, and/or pay for
the insurance required herein, may (but without any obligation to do so) at any time or from time
to time, after thirty (30) days written notice to Participant, procure such insurance and pay the
premiums therefor, in which event Participant shall immediately repay Agency all sums so paid
by Agency together with interest thereon at the maximum legal rate.
8.0 OBLIGATION TO REPAIR.
8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance.
Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered
wholly or partly uninhabitable by fire or other casualty required to be insured against by
Participant, Participant shall promptly proceed to obtain insurance proceeds and 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 the Project is required to be maintained in pursuant to this Agreement, whether
or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or
restoration, and Participant shall complete the same as soon as possible thereafter so that the
Project can continue to be operated and occupied as an affordable housing project in accordance
with this Agreement. Subject to extensions of time for "Enforced Delay" as defined in Section
22 of this Agreement, in no event shall the repair, replacement, or restoration period exceed one
(1) year from the date Participant obtains insurance proceeds unless the Agency Executive
Director, in his or her sole and absolute discretion, approves a longer period of time. Agency
shall cooperate with Participant, at no expense to Agency, in obtaining any governmental permits
required for the repair, replacement, or restoration and, upon issuance of such permits Agency
shall promptly release control of any insurance proceeds within Agency's control. If, however,
the then -existing laws of any other governmental agencies with jurisdiction over the Property do
not permit the repair, replacement, or restoration, Participant may elect not to repair, replace, or
restore the Project by giving notice to Agency (in which event Participant shall be entitled to all
insurance proceeds but Participant shall be required to remove all debris from the Property) or
Participant may reconstruct such other improvements on the Property as are consistent with
applicable land use regulations and approved by the City, Agency, and the other governmental
agency or agencies with jurisdiction. In such event, the Agency Agreements, including this
Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency
Agreements from title.
I'G
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�1
If Participant fails to obtain insurance as required by this Agreement (and Agency has not
procured such insurance and charged Participant for the cost), Participant shall be obligated to
reconstruct and repair any partial or total damage to the Project and improvements located on the
site in accordance with this Section 8.1.
8.2 Continued Operations. During any period of repair, Participant shall continue, or
cause the continuation of, the operation of the apartment complex on the Site to the extent
reasonably practicable from the standpoint of prudent business management. The number of
Restricted Units shall be reduced in proportion to the number of Units not habitable as a result of
the casualty during such period of repair.
8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance.
If the improvements comprising the Project are completely destroyed or substantially damaged
by a casualty for which Participant is not required to (and has not) insured against, then
Participant shall not be required to repair, replace, or restore such improvements and may elect
not to do so by providing Agency with written notice of election not to repair, replace, or restore
within ninety (90) days after such substantial damage or destruction. In such event, (i)
Participant shall remove all debris from the Property, and (ii) the Agency Agreements, including
this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency
Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty
not required to be (and not) covered by insurance shall mean damage or destruction which is fifty
percent (50%) or more of the replacement cost of the improvements comprising the Project. In
the event Participant does not timely elect not to repair, replace, or restore the improvements as
set forth in the first sentence of this Section 8.3, Participant shall be conclusively deemed to have
waived its right not to repair, replace, or restore the improvements and thereafter Participant shall
promptly commence and complete the repair, replacement, or restoration of the damaged or
destroyed improvements in accordance with Section 8.1 above and continue operation of the
apartment complex during the period of repair (if practicable) in accordance with Section 8.2
above.
9.0 LIMITATION ON TRANSFERS.
9.1 Sale or Transfer of the Project. Participant covenants that during the term of this
Agreement Participant shall not assign this Agreement or transfer the Site or any of its interests
therein except as provided in this Section 9.0.
9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include
any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this
Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to
any person, entity, or group of persons or entities acting in concert of more than fifty percent
(50%) (in the aggregate) of the present ownership and/or control of any person or entity
constituting Participant, taking all transfers into account on a cumulative basis. In the event any
entity constituting Participant, or the constituent partners or members of Participant or any
successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the
issued and outstanding capital stock of such corporation, or of beneficial interests of such trust;
in the event that any entity constituting Participant, or the constituent partners of Participant or
any successor of Participant is a limited or general partnership, such transfer shall refer to the
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transfer of more than fifty percent (50%) of such limited or general partnership interest; in the
event that any entity constituting Participant, or the constituent members of Participant or any
successor of Participant is a limited liability company, such transfer shall refer to the transfer of
more than fifty percent (50%) of such membership interest; in the event that any entity
constituting Participant, or the constituent partners of Participant or any successor of Participant
is a joint venture, such transfer shall refer to the transfer of more than fifty percent (50%) of the
ownership and/or control of any such joint venture partner, taking all transfers into account on a
cumulative basis.
9.3 Agency Approval of Transfer Required. Except as set forth below, Participant
shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the
Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law,
without the prior written approval of Agency, which approval shall not be unreasonably
withheld, conditioned, or delayed, and any such purported Transfer without such approval shall
be null and void. In addition to the foregoing and notwithstanding anything in this Section to the
contrary, so long as the Project is encumbered by a deed of trust (other than a deed of trust the
beneficiary of which is the Agency), any proposed transferee or assignee must also receive the
prior written consent of the beneficiary of such deed of trust, if required by such deed of trust,
before Agency shall approve such transfer or assignment; provided, however, that such consent
of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the
foregoing, the following types of transfers shall not require Agency approval but as with all
Transfers shall be subject to Section 9.4:
(a) transfers to any entity or entities owned or controlled by Participant or any
of its respective shareholders or partners, or to any parent corporation or
subsidiary corporation of any partners of Participant, or to any entity or
entities controlled by any such shareholders or partners;
(b) any mortgage, deed of trust, sale and leaseback, or other form of
conveyance required for any reasonable method of financing or
refinancing the acquisition of the Site and development of the Project
thereon, including all direct and indirect costs related thereto; or
(c) the leasing of individual rental units on the Site provided that such leasing
is in accordance with the terms of this Agreement;
(d) Transfers resulting from the death or mental or physical incapacity of an
individual;
(e) Transfers in trust for the benefit of a spouse, children, grandchildren, or
other family member, or for charitable purposes;
(f) Transfers of stock in a publicly -held corporation or of the beneficial
interest in ay publicly -held partnership or real estate investment trust; or
(g) the conveyance or dedication of portions of the Site to the City or other
governmental entity, or the granting of easements or permits to facilitate
the development of the Site. p
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Agency shall reasonably consider approving a transfer to an entity not owned or
controlled by Participant provided such entity has both of the following: (A) the financial
strength and capability, equal to or greater than the financial strength and capability of
Participant, to perform Participant's obligations hereunder; and (B) the experience and expertise,
at levels equal to or greater than the experience and expertise of Participant, in the planning,
financing, development, ownership and operation of similar projects.
9.4 Assignment and Assumption Agreement. In the absence of specific written
agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or
this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve
Participant or any successor party from the obligation to timely complete construction of the
Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be
effective unless and until Participant and the transferee or successor party execute and deliver to
Agency a binding assignment and assumption agreement in a form reasonably approved by
Agency's legal counsel.
9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a
transferee or assignee that either, (i) has been approved by the Agency Executive Director or (ii)
is a transferee of a Transfer not requiring the approval of the Agency Executive Director
pursuant to the terms of this Agreement, and in both the cases described in the foregoing clauses
(i) and (ii) has executed and delivered to the Agency Executive Director an assignment and
assumption agreement pursuant to Section 9.4.
10.0 EVENTS OF DEFAULT BY PARTICIPANT.
Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one
or more of any of the following events shall constitute an "Event of Default" by Participant
hereunder if Participant shall have not cured, corrected, or remedied such failure within, unless a
shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty
(30) days following the service on Participant of a written notice from Agency specifying the
failure complained of, or if it is not practicable to cure or remedy such failure within such thirty
(30) day period (which impracticality shall not apply to monetary defaults), within such longer
period as shall be reasonable under the circumstances provided that Participant has commenced
to cure within the same thirty (30) day period and has diligently prosecuted such cure to
completion:
10.1 Construction of the Project on the Site has not commenced within the time set
forth in the AHA; or
10.2 Construction of the Project on the Site is not completed within the time set forth
in the AHA; or
10.3 Participant shall abandon or surrender the Site; or
10.4 Participant is in default of the Note and has not cured such default within the cure
period applicable to such default as set forth in the Note; or
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10.5 Participant is in material default of any of the covenants, terms or provisions of
this Agreement or any of the Agency Agreements; or
10.6 Participant voluntarily files or has involuntarily filed against it any petition under
any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60)
days thereafter; or
10.7 Participant is adjudicated a bankrupt; or
10.8 Participant makes a general assignment for the benefit of creditors in violation of
the terms of this Agreement or any of the Agency Agreements.
10.9 Participant is in default of its obligations under that certain Agreement of
Purchase and Sale and Joint Escrow Instructions entered into by and between Participant, as
"Buyer," and Landaq Inc., a Delaware corporation ("Landaq") as "Seller", pursuant to which
Participant purchased the Site from Landaq ("Purchase Agreement") or any of the documents
attached to the Purchase Agreement as exhibits thereto, including, but not limited to, (i) the grant
deed pursuant to which Landaq conveyed the Site to Participant; (ii) that certain Declaration of
Development Covenants, Conditions and Restrictions entered into and recorded on
, as Instrument No. , in the Official Records of the County of
Riverside, by and between Landaq, as the "Company," and Participant, as the "Builder," which
sets forth certain development and use restrictions with which Participant is required to comply;
and (iii) that certain Option Agreement and Escrow Instructions entered into on
, by and between Landaq, as the "Company," and Participant, as the "Builder,"
which provides for Participant's grant to Landaq of an option to repurchase the Site in
accordance with the terms thereof, as memorialized by that certain Memorandum of Option
entered into by those parties and recorded on , as Instrument No. , in the
Official Records of the County of Riverside.
11.0 REMEDIES OF AGENCY.
In the event Participant defaults in the performance or observance of any covenant,
agreement or obligation of Participant pursuant to this Agreement, and if such default remains
uncured for a period of thirty (30) days after written notice thereof shall have been given by
Agency (or such lesser period as may apply under Section 4.1), or, in the event said default
cannot be cured within said time period, Participant has failed to commence to cure such default
within the applicable time period and diligently prosecute said cure to completion, then Agency
shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one
or more of the following steps:
11.1 With respect to (i) the physical condition of the Site, or (ii) Participant's Gross
Mismanagement of the Project, enter the Site and correct or cause to be corrected said default
and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to
the account of Participant, which charge shall be due and payable within thirty (30) days after
presentation by Agency of a statement of all or part of said costs, and if such bill is not timely
paid then to place a lien on the Site for said amount due plus interest at the maximum legal rate;
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11.2 Correct or cause to be corrected said default and pay the costs thereof (including
costs incurred by Agency in enforcing this provision) from the proceeds of any insurance;
11.3 Exercise its right to maintain any and all actions at law or suits in equity to
compel Participant to correct or cause to be corrected said default;
11.4 Have a receiver appointed to take possession of Participant's interest in the Site,
with power in said receiver to administer Participant's interest in the Site, to collect all funds
available to Participant in connection with its operation and maintenance of the Site, and to
perform all other actions consistent with Participant's obligations under this Agreement as the
court deems proper;
11.5 Terminate this Agreement by written notice to Participant and seek repayments of
any remaining principal and accrued interest then owing on the Agency Note.
Except as otherwise expressly stated in this Agreement, the rights and remedies of the
parties are cumulative, and the exercise by any party of one or more of its 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 another party.
12.0 NONDISCRIMINATION.
12.1 Antidiscrimination. There shall be no discrimination against or segregation of
any person, or group of persons, on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Site, or any part thereof, nor shall Participant, or any person claiming under or
through it, 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 Site, or any part thereof (except as permitted by this
Agreement).
12.2 Anti -Discrimination Clauses in Agreements. Participant agrees for itself and any
successor in interest that Participant shall refrain from restricting the rental, sale, or lease of any
portion of the Site, or contracts relating to the Site, 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:
12.2.1 In deeds: "The grantee herein covenants by and for itself, its 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
race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall
the grantee itself, or any persons claiming under or through it, 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 in the land
herein conveyed. The foregoing covenants shall run with the land."
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12.2.2 In leases: "The lessee herein covenants by and for itself, its heirs,
executors, administrators, and assigns, and all persons claiming under or through them, 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 status, race, color, creed, religion, sex, marital
status, ancestry, or national origin in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee
itself, or any person claiming under or through it, 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 land herein leased."
12.2.3 In contracts: "There shall be no discrimination against or segregation of
any persons or group of persons on account of status, race, color, creed, religion, sex, marital
status, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or
enjoyment of land, nor shall the transferee itself, or any person claiming under or through it,
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 land."
13.0 COVENANTS TO RUN WITH THE LAND.
Participant hereby subjects the Site to the covenants, reservations, and restrictions set
forth in this Agreement. Agency and Participant hereby declare their express intent that all such
covenants, reservations, and restrictions shall be deemed covenants running with the land, and
shall pass to and be binding upon the Participant's successors in title to the Site; provided,
however, that on the termination of this Agreement said covenants, reservations and restrictions
shall expire. All covenants established in this Agreement shall, without regard to technical
classification or designation, be binding for the benefit of the Agency, and such covenants shall
run in favor of the Agency for the entire term of this Agreement, without regard to whether the
Agency is or remains an owner of any land or interest therein to which such covenants relate.
Each and every contract, deed or other instrument hereafter executed covering or conveying the
Site or any portion thereof shall conclusively be held to have been executed, delivered and
accepted subject to such covenants, reservations, and restrictions, regardless of whether such
covenants, reservations, and restrictions are set forth in such contract, deed or other instrument.
Agency and Participant hereby declare their understanding and intent that the burden of
the covenants set forth herein touch and concern the land in that Participant's legal interest in the
Site is rendered less valuable thereby. Agency and Participant further hereby declare their
understanding and intent that the benefit of such covenants touch and concern the land by
enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended
beneficiaries of such covenants, reservations, and restrictions, and by furthering the public
purposes for which the Agency was formed.
Participant, in exchange for the Agency entering into the AHA, hereby agrees to hold,
sell, and convey the Site subject to the terms of this Agreement. Participant also grants to the
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Agency the right and power to enforce the terms of this Agreement against the Participant and all
persons having any right, title or interest in the Site or any part thereof, their heirs, successive
owners and assigns.
The covenants set forth in Article 12.0 of this Agreement shall remain in effect in
perpetuity. All other covenants set forth in this Agreement shall remain in effect for a period of
fifty-five (55) years following the date this Agreement is recorded in the office of the Riverside
County Recorder.
14.0 INDEMNIFICATION.
Participant agrees for itself and its successors and assigns to indemnify, defend, and hold
harmless Agency, City, and their respective officers, officials, members, employees, agents, and
representatives from and against any loss, liability, claim, or judgment relating in any manner to
the Project excepting only any such loss, liability, claim, or judgment arising out of the
intentional wrongdoing or gross negligence of Agency, City, or their respective officers,
officials, members, employees, agents, or representatives.
15.0 UTILITIES AND TAXES.
Participant, while in possession of the Property, and each successor or assign of
Participant while in possession of the Property, shall remain fully obligated for the payment of (i)
real and personal property taxes and assessments in connection with the Property, and (ii) all
charges for all utilities serving the Property for which Participant is responsible.
16.0 ATTORNEYS' FEES.
In the event that a party to this Agreement brings an action against the other party hereto
by reason of the breach of any condition, covenant, representation or warranty in this Agreement,
or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to
recover from the other expert witness fees, and its reasonable attorney's fees and costs.
Attorney's 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,
including the conducting of discovery.
17.0 AMENDMENTS.
This Agreement shall be amended only by a written instrument executed by the parties
hereto or their successors in title, and duly recorded in the real property records of the County of
Riverside.
18.0 NOTICE.
Formal notices, demands, and communications between Agency and Participant shall be
sufficiently given if (1) personally delivered, (ii) delivered by a reputable same -day or overnight
courier services that provides a receipt showing date and time of delivery, (iii) delivered by
United States mail, registered or certified, postage prepaid, return receipt requested, or (iv)
delivered by facsimile transmission, provided the original of the faxed communication is 141
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i
delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of
the foregoing. Delivery shall be made to the following addresses:
If to Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
Fax: (760) 777-7101
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: M. Katherine Jenson, Esq.
Fax: (714) 546-9035
If to Participant: Apartments at La Quinta Village, LP
1105 Quail Street
Newport Beach, CA 92658
Attn: Victor Mahoney
Fax: (949) 250-8574
With a copy to: Palmieri, Tyler, Wiener, Wilhelm
& Waldron, LLP
2603 Main Street, Ste. 1300
P.O. Box 19712
Irvine, CA, 92014-0220
Attn: Robert Ihrke
Fax: (949) 851-1554
Notices that are personally delivered, delivered by messenger/courier, or by fax (provided
there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt.
Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the
addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States
Postal System in the manner described in this Section. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as a party may from
time to time designate by mail.
19.0 NONLIABILITY OF AGENCY OFFICIALS.
No officer, official, member, employee, agent, or representative of Agency shall be
personally liable to Participant, or any successor in interest, in the event of any default or breach
by Agency or for any amount which may become due to Participant or successor or on any
obligations under the terms of this Agreement or any of the Agency Agreements.
20.0 TRANSACTIONS WITH AFFILIATES.
Participant shall have the right to enter into contracts with subsidiaries, affiliates and
other related entities for the purpose of providing cleaning, maintenance and repair services,
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insurance policies and other purposes related to the operation of the Site, provided that all such
costs and charges are competitive with the costs, charges, rent and other sums which would be
paid by or to, as the case may be, an unrelated third party, and further provided that all such
contracts and transactions are disclosed to Agency's Executive Director, including the costs and
charges of such contracts and transactions. Agency acknowledges and agrees that Participant
may act as its own general contractor for the constructions of any improvements on the Site and
that will be entitled in so doing to earn a commercially reasonable fee.
21.0 SEVERABILITY/WAIVER/INTEGRATION.
21.1 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not
in any way be affected or impaired thereby.
21.2 Waiver. A waiver by either party of the performance of any covenant or
condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any
other covenants or conditions, nor shall the delay or forbearance by either party in exercising any
remedy or right be considered a waiver of, or an estoppel against, the later exercise of such
remedy or right.
21.3 Inte rag_ tion. This Agreement contains the entire Agreement between the parties
concerning the subject matter hereof and neither party relies on any warranty or representation
not contained in this Agreement.
22.0 ENFORCED DELAY; EXTENSIONS OF TIME.
Performance by a party hereunder shall not be deemed to be in default where delays or
defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires;
casualties; supernatural causes; 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; acts of the other
party; acts or the failure to act of a public or governmental agency or entity (except that acts or
the failure to act of Agency or City shall not excuse performance by Agency or City unless the
act or failure is caused by the acts or omissions of Participant); or any other causes beyond the
reasonable control or without the fault of the party claiming an extension of time to perform. In
the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise
reasonable diligence to minimize the period of the delay. An extension of time for any such
cause shall be limited to the period of the Enforced Delay, and shall commence to run from the
time of the commencement of the cause, provided notice by the party claiming such extension is
sent to the other party within fifteen (15) days of the commencement of the cause. The following
shall not be considered as events or causes beyond the control of Participant, and shall not entitle
Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the
Project, (ii) Participant's failure to negotiate agreements with prospective tenants or users for the
Project, or (iii) interest rates or economic or market conditions. Times of performance under this
Agreement may also be extended by mutual written agreement by Agency and Participant. The
Agency Executive Director shall also have the authority on behalf of Agency to administratively
approve extensions of time not to exceed a cumulative total of one (1) year.
147)
882/015610-0063 �y
325173.02 AM02 24
23.0 THIRD PARTY BENEFICIARY.
The City of La Quinta is deemed a third party beneficiary of the terms and covenants
contained in this Agreement and has the right, but not the obligation, to enforce the terms and
covenants contained herein.
24.0 FUTURE ENFORCEMENT.
The parties hereby agree that should the Agency cease to exist as an entity at any time
during the term of this Agreement, the City of La Quinta shall have the right to enforce all of the
terms and conditions herein, unless the Agency had previously specified another entity to enforce
this Agreement.
25.0 GOVERNING LAW.
This Agreement shall be governed by the laws of the State of California.
26.0 NO MERGER.
The covenants, terms, and provisions of this Agreement shall not merge with any grant
deed or other instrument pertaining to the conveyance of any interest in real property.
27. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which shall
constitute one original and all of which shall be one and the same instrument.
[end - signature page follows]
882/015610-0063 25
325173.02 AM02
IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory
Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on
the date first written hereinabove.
ATTEST:
I0
Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta
Redevelopment Agency
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY, a
public body, corporate and politic
Thomas Genovese
Executive Director
"PARTICIPANT"
APARTMENTS AT LA QUINTA VILLAGE, LP,
a California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
147
882/015610-0063
325173.02 AM02 26
STATE OF CALIFORNIA
ss.
COUNTY OF
On before me, , personally
appeared , personally known to me (or 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.
Witness my hand and official seal.
[SEAL]
STATE OF CALIFORNIA
ss.
COUNTY OF
Notary Public
On before me, , personally
appeared , personally known to me (or 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.
Witness my hand and official seal.
Notary Public
[SEAL]
log
882/015610-0063
325173.02 AM02 27
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF SITE
Parcel 3 of Parcel Map No. 30721, recorded on October 23, 2002, in Book 203, pages 30 through
31, of Parcel Maps, filed in the Office of the County Recorder of Riverside County, State of
California.
882/015610-0063
325173.02 AM02_
EXHIBIT "H"
FORM OF RELEASE OF CONSTRUCTION COVENANTS
[SEE FOLLOWING PAGES]
882/015610-0063
325173.02 AM02
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta„ CA 92253
Attn: Executive Director
[NOTE: RECORD
AS PARTIAL RELEASE
OF AGREEMENT]
(Space Above Line for Recorder's Use Only)
(Exempt from Recording Fee per Gov. Code 6103)
RELEASE OF CONSTRUCTION COVENANTS
WHEREAS, APARTMENTS AT LA QUINTA VILLAGE, LP, a California limited
partnership, is the owner of fee title to that certain real property legally described in Attachment
No. 1 attached hereto (the "Site") and incorporated herein by reference, according to the terms
and conditions of said Agreement; and
WHEREAS, by an Affordable Housing Agreement (hereinafter referred to as the
"Agreement") dated , by and between Participant and the La Quinta
Redevelopment Agency, a public body corporate and politic ("Agency"), Participant has
redeveloped and rehabilitated the Site in accordance with the Agreement; and
WHEREAS, pursuant to Section 6.5 of the Agreement, promptly after completion of all
rehabilitation work by Participant upon the Site, and upon request by Participant, Agency shall
furnish Participant with a Release of Construction Covenants in such form as to permit it to be
recorded in the Official Records of the County of Riverside; and
WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be
conclusive evidence that Participant has complied with the terms of the Agreement pertaining to
the rehabilitation of the Site; and
WHEREAS, Participant has requested that Agency furnish Participant with the Release
of Construction Covenants; and
WHEREAS, Agency has conclusively determined that the rehabilitation of the Site has
been satisfactorily completed as required by the Agreement;
NOW, THEREFORE:
1. As provided in the Agreement, Agency does hereby certify that rehabilitation of
the Site has been fully and satisfactorily performed and completed, and that such rehabilitation is
in full compliance with said Agreement.
111
882/015610-0063
325173.02 AM02 A
2. This Release of Construction Covenants shall not constitute evidence of
Participant's compliance with the following agreements, the provisions of which shall continue
to run with the land until termination thereof in accordance with the terms thereof-
(1) Deed of Trust with Assignment of Rents, Security Agreement and Fixture
Filing, by and between Participant as borrower and Agency as beneficiary, dated
and recorded on , as Instrument No.
, in the Office of the Riverside County; and
(ii) Regulatory Agreement and Declaration of Covenants and Restrictions by
and between Participant and Agency, and recorded on , as Instrument
No. in the Office of the Riverside County Recorder.
3. This Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of Participant to any holder of a mortgage, or
any insurer of a mortgage, securing money loaned to finance construction work on the Site, or
any part thereof.
4. This Release of Construction Covenants is not a Notice of Completion as referred
to in California Civil Code Section 3093.
5. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the Agreement or any other provisions of any agreements or
documents referenced therein.
IN WITNESS WHEREOF, Agency has executed this Release of Construction Covenants
as of this day of ,
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Executive Director
882/015610-0063 2
325173.02 AM02
i J
CONSENT TO RECORDATION
APARTMENTS AT LA QUINTA VILLAGE, LP ("Owner"), owner of the fee interest in the
real property legally described in Attachment No. I hereto, hereby consents to the recordation of
the foregoing Release of Construction Covenants against said real property.
APARTMENTS AT LA QUINTA VILLAGE, LP,
a California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
IM
J.C. Gianulias
Its: President
882/015610-0063
325173.02 AM02
STATE OF CALIFORNIA
ss.
COUNTY OF
On before me, , personally
appeared , personally known to me (or
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.
Witness my hand and official seal.
[SEAL]
STATE OF CALIFORNIA
ss.
COUNTY OF
Notary Public
On before me, , personally
appeared personally known to me (or
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.
Witness my hand and official seal.
Notary Public
[SEAL]
882/015610-0063 " 1
325173.02 AM02 - ,
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF SITE
Parcel 3 of Parcel Map No. 30721, recorded on October 23, 2002, in Book 203, pages 30 through
31, of Parcel Maps, filed in the Office of the County Recorder of Riverside County, State of
California.
1 �r
882/015610-0063
325173.02 AM02 h
1
�.L ec w-"--�' 1 l a a--
q�w1
MEMORANDUM
TO: Honorable Chairwoman Henderson and Boardmembers of the La Quinta
Redevelopment Agency
FROM: M. Katherine Jenson, Agency Counsel
DATE: November 19, 2002
FILE NO.: 015610-0052
RE: Revisions to Affordable Housing Agreement with Apartments at La Quinta
Village, LP
On Friday, November 15, 2002, we participated in a conference call with Apartments at
La Quinta Village, LP ("Participant"), Frank Spevacek, and Nancy Madrid to discuss various
provisions of the agreement referenced above ("Agreement"). After lengthy discussions, we
agreed to make several changes, which I have summarized below:
1. Added missing information regarding the documents Participant recorded against
the property at the close of escrow and the title commitment we received regarding the property,
and deleted references to Participant's purchase and sale agreement. (Agreement: 1.15, 122,
3.1-3.3; Note: 3.6(H), 5.2; Regulatory Agreement and Declaration of Covenants and Restrictions
("Regulatory Agreement"): 10.9.)
2. Clarified that the Agency will subordinate the Regulatory Agreement and deed
of trust to a permanent loan obtained by Participant, and authorized the Agency's Executive
Director to make changes to the subordination requirements set forth in the Agreement to
accommodate the reasonable requests of a lender. (Agreement: 6.1.4; Rider to Deed of Trust:
4.)
3. Clarified that Participant's requirement to abide by its construction schedule is
subject to force majeure and corrected a typographical error. (Agreement: 6.1.5.)
4. Clarified that certain requirements tied to the Agency's issuance of a Release of
Construction Covenants may instead be tied to the time Agency is required to issue a Release of
Construction Covenants to account for the possibility that the Agency does not timely issue the
document. (Agreement: 6.2, 6.4, 9.5.)
5. Clarified that approved transfers of the property include transfers to entities
owned or controlled directly or indirectly by Participant. (Agreement: 7.3, Regulatory
Agreement: 9.3 . )
6. Revised provisions regarding rights of holders of security interests to provide that
(1) the Agency may not unreasonably withhold its approval of a mortgage or other financing on
the property, (ii) in the event of a foreclosure the terms of the agreement are only enforceable
882 0 156 10-0063
346829.01 a1119.02
Honorable Chairwoman Henderson and
Boardmembers of the La Quinta
Redevelopment Agency
November 19, 2002
Page 2
against the new owner at the time the new owner takes title, and (111) the Agency must give
notice to Participant prior to satisfying a lien against the property. (Agreement: 9.2, 9.5. )
7. Revised the Scope of Development to accurately reflect the entities which will be
construct and manage the project and to correct the stated acreage of the site. (Scope of
Development.)
8. Revised the Schedule of Performance to require Participant to take all necessary
actions to obtain approvals from the City, rather than to actually obtain the approvals, since
Participant has no actual control over City actions. (Schedule of Performance: Item 2.)
9. Added a requirement in the Note that the Agency give notice of default
thereunder to Participant. (Note: 5.1.)
10. Clarified that Agency's right under the Deed of Trust to enter the property and
take possession and/or to appoint a receiver is after expiration of cure period. (Deed of Trust:
B.5; Rider to Deed of Trust: 9.)
11. Revised Rider to Deed of Trust to provide that if the Agency exercises its rights to
collect rents thereunder and the rents are sufficient to cure all monetary defaults, then the
Agency's collection will constitute a curing of the default. (Rider to Deed of Trust: 7.)
12. Clarified that Participant's obligation to operate a rental apartment complex under
the regulatory agreement is 55 years. (Regulatory Agreement: Recital E.)
13. Streamlined the income certification and reporting requirements in accordance
with the current practice of RGC and to attach RGC sample forms. (Regulatory Agreement: 3.3,
3.4. 3.6, 3.7.)
14. Clarified that Participant need not prequalify persons who inquire regarding the
availability of an affordable rental unit, but instead may wait until such time as a unit is
available. (Regulatory Agreement: 3.5.)
15. Clarified that failure to comply with leasing preferences or that renting a restricted
unit to an ineligible tenant is not a violation under the agreement unless Participant acts
"knowingly." (RegulatoryAgreement: 3.10.2, 3.10.3.)
16. Added that an ineligible tenant may remain in the apartment complex if
Participant leases and redesignates the next available unrestricted unit to an affordable renter.
(Regulatory Agreement: 3.10.2.)
r ►�
1
882 %O 156 10-0063
346829.01 all'19'02
Honorable Chairwoman Henderson and
Boardmembers of the La Quinta
Redevelopment Agency
November 19, 2002
Page 3
17. Clarified that violations must be "material" to constitute gross mismanagement.
(Regulatory Agreement: 5.1.)
18. Deleted express requirement that Participant comply with prevailing wage law,
since project does not trigger the payment of prevailing wages. (Regulatory Agreement: 6.1.)
19. Explained that Participant is not required to indemnify Agency for hazardous
materials contamination that occurs after the Agency acquires title to the property through a
foreclosure sale. (Regulatory Agreement: 6.2, 6.4.)
20. Added that Participant must obtain earthquake insurance only if earthquake
insurance is generally obtained for similar rental apartment projects in the counties of Los
Angeles, Orange, Riverside, and San Bernardino. (Regulatory Agreement: 7.12.)
21 Added that Participant's requirement to obtain insurance proceeds in the event of
damage for which Participant has insurance is subject to the senior lender making such proceeds
available to Participant. (Regulatory Agreement: 8.1.)
22. Added language to waiver provision to require all waivers to be in writing.
(Regulatory Agreement: 21.2.)
23. Added that the time to invoke enforced delay is triggered by a party's awareness
of the occurrence that gives rise to their ability to invoke the clause. (Regulatory Agreement.
22.)
24. Revised Release of Construction Covenants to accurately reflect the section in the
agreement that addresses the document and to include similar language as that contained in the
agreement. (Release of Construction Covenants.)
882 015610-0063 o
346829.01 all 19,02
AFFORDABLE HOUSING AGREEMENT
BY AND AMONG
LA QUINTA REDEVELOPMENT AGENCY
AND
APARTMENTS AT LA QUINTA VILLAGE, LP
882/015610-0063
325173.04 al1/19/02
TABLE OF CONTENTS
Page
1.0 DEFINITIONS..................................................................................................................1
1.1 Agency Deed of Trust...........................................................................................1
1.2 Agency Loan.........................................................................................................1
1.3 Agency Loan Documents......................................................................................2
1.4 Agency Note......................................................................................................... 2
1.5 Agency Regulatory Agreement.............................................................................2
1.6 Approved Project Plans and Permits.....................................................................2
1.7 CEQA....................................................................................................................2
1.8 City........................................................................................................................2
1.9 Days........................................................................................................................
1.10 Effective Date.......................................................................................................2
1.11 Enforced Delay..................................................................................................... 2
1.12 Executive Director................................................................................................ 2
1.13 Hazardous Materials.............................................................................................2
1.14 Landaq...................................................................................................................3
1.15 Landaq Restrictions..............................................................................................3
1.16 Participant............................................................................................................. 3
1.17 Proj ect................................................................................................................... 3
1.18 Project Area..........................................................................................................3
1.19 Redevelopment Plan............................................................................................. 3
1.20 Release of Construction Covenants...................................................................... 3
1.21 Restricted Units.....................................................................................................3
MR]
1.22 Schedule of Performance......................................................................................4
4,24
1.23 Site........................................................................................................................4
1.24 Title Company......................................................................................................4
1.25 Unrestricted Units.................................................................................................4
2.0 PURPOSE OF AGREEMENT.........................................................................................4
3.0 CURRENT OWNERSHIP OF THE SITE; PARTICIPANT ACQUISITION
OFTHE SITE...................................................................................................................4
3.1 Ownership of the Site............................................................................................4
3.2 Agency Title Policy.............................................................................................. 5
3.3 Conditions to Agency's Performance.............................................................:..... 5
3.4 Brokerage Commissions....................................................................................... 6
3.5 Taxes and Assessments and Liens........................................................................ 6
4.0 AGENCY LOAN; PHYSICAL CONDITION OF SITE.................................................6
882/015610-0063
325173.04 al1/19/02 _j_
Page
4.1 Agency Loan; Disbursement.................................................................................6
4.2 Agency Note; Agency Deed of Trust.................................................................... 6
4.3 Physical Condition of Site....................................................................................6
5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES ...................................... 7
5.1 Effective Date of Representations and Warranties ............................................... 7
5.2 Representations and Warranties............................................................................7
6.0 PROJECT DEVELOPMENT........................................................................................... 8
6.1 Construction of the Project................................................................................... 8
6.2 Indemnification...................................................................................................11
6.3 Applicable Laws.................................................................................................11
6.4 Release of Construction Covenants.................................................................... I I
7.0 TRANSFER AND ASSIGNMENT................................................................................12
7.1 Sale or Transfer of the Project............................................................................12
7.2 Transfer Defined.................................................................................................12
7.3 Agency Approval of Transfer Required.............................................................12
7.4 Assignment and Assumption Agreement............................................................13
7.5 Permitted Transferee...........................................................................................13
8.0 INSURANCE..................................................................................................................14
4 1 Requir-ed Nd;,-,;m,,.,, Deheies t o
9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE ........... 14
9.1 Definitions...........................................................................................................14
9.2 Limitation on Encumbrances..............................................................................14
9.3 Participant's Breach Does Not Defeat Mortgage Lien.......................................14
9.4 Notice of Default to Mortgagee, Deed of Trust or Other Security
InterestHolders...................................................................................................14
9.5 Right of the Agency to Satisfy Other Liens on the Property After
Conveyanceof Title............................................................................................14
10.0 USE OF THE SITE.........................................................................................................15
10.1 Use of the Site.....................................................................................................15
10.2 No Inconsistent Uses...........................................................................................15
10.3 Obligation to Refrain from Discrimination.........................................................15
10.4 Effect of Covenants.............................................................................................15
11.0 DEFAULT; ENFORCEMENT.......................................................................................16
11.1 Defaults, Right to Cure and Waivers..................................................................16
11.2 Legal Actions......................................................................................................16
11.3 Rights and Remedies are Cumulative.................................................................17
11.4 Attorneys' Fees...................................................................................................17
12.0 MISCELLANEOUS.......................................................................................................17
882/015610-0063 1
325173.04 al/19/02 -n-
Page
12.1
Notices................................................................................................................17
12.2
Nonliability of Agency Officials and Employees...............................................18
12.3
Time of Essence..................................................................................................18
12.4
Enforced Delay: Extension of Times of Performance.......................................18
12.5
Books and Records.............................................................................................19
12.6
Ownership of Documents...................................................................................19
12.7
Modifications......................................................................................................19
12.8
Binding Effect of Agreement..............................................................................19
12.9
Severability.........................................................................................................19
12.10
Interpretation.......................................................................................................
20
12.11
Entire Agreement................................................................................................
20
12.12
Waiver; Amendments.........................................................................................20
12.13
Counterparts........................................................................................................20
12.14
Authority.............................................................................................................20
12.15
Exhibits...............................................................................................................
20
12.16
Effective Date.....................................................................................................21
LIST OF EXHIBITS
Exhibit "A"
Legal Description of Site
Exhibit `B"
Site Map
Exhibit "C"
Scope of Development
Exhibit "D"
Schedule of Performance
Exhibit "E"
Form of Agency Note
Exhibit "F"
Form of Agency Deed of Trust
Exhibit "G"
Form of Agency Regulatory Agreement
Exhibit "H"
Form of Release of Construction Covenants
882/015610-0063 2
325173.04 a11/19/02 -111-
AFFORDABLE HOUSING AGREEMENT
THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of
(the "Effective Date") by and between the LA QUINITA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and
APARTMENTS AT LA QUINTA VILLAGE, LP, a California limited partnership
("Participant").
RECITALS
A. Agency is a public body, corporate and politic, exercising governmental functions
and powers and organized and existing under the Community Redevelopment Law of the State
of California (California. Health and Safety Code Section 33000 et seg.).
B. Participant has recently acquired fee title to that certain unimproved real property
located approximately 630 feet north of Calle Tampico and 150 feet east of Eisenhower Drive, in
the City of La Quinta (the "Site").
C. Agency desires to meet its affordable housing goals by assisting Participant in the
development of an affordable rental housing complex on the Site with not less than two hundred
(200) units, of which seventy-five (75) units shall be the "Restricted Units" (as defined below)
and related interior and exterior improvements, by making certain financial assistance available
to Participant for the Project from the Agency's Low and Moderate Income Housing Fund
(Health & Safety Code §§ 33334.2 et seq.).
D. Agency has determined that providing assistance to Participant for the Project is
in the best interests of the City of La Quinta ("City") and the welfare of its citizens. Therefore,
the parties desire to execute this Agreement for the Project on the terms and conditions set forth
below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and
promises hereinafter contained, and for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, Agency and Participant hereby agree as follows:
1.0 DEFINITIONS.
1.1 Agency Deed of Trust. The term "Agency Deed of Trust" shall mean that certain
Deed of Trust With Assignment of Rents to secure the Agency Note, in the form attached hereto
and incorporated herein as Exhibit "F".
1.2 Agency Loan. The term "Agency Loan" shall mean the loan by Agency to
Participant in the amount set forth in Section 4.1, as evidenced by the Agency Loan Documents,
for the purposes of acquiring the Site and constructing the Project on the Site.
882/015610-0063 ,
325173.04 al1/19/02
1.3 Agency Loan Documents. The term "Agency Loan Documents" shall mean,
collectively, the Agency Note, Agency Deed of Trust and Agency Regulatory Agreement.
1.4 Agency Note. The term "Agency Note" shall mean that certain promissory note,
in the form attached hereto and incorporated herein as Exhibit "E", in favor of Agency,
evidencing the loan by Agency to Participant.
1.5 Agency Regulatory_ Agreement. The term "Agency Regulatory Agreement" shall
mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions, in the
form attached hereto and incorporated herein as Exhibit "G".
1.6 Approved Project Plans and Pen -nits. The term "Approved Project Plans and
Permits" shall mean, collectively, the Scope of Development attached hereto and incorporated
herein as Exhibit "C", and all of the plans and permits approved by the Agency and the City for
the Project, including any changes thereto as may be subsequently approved in writing by
Participant, Agency, and City.
1.7 CEQA. The term "CEQA" shall mean the California Environmental Quality Act,
Public Resources Code Section 21000 et seq., as amended.
1.8 City. The term "City" shall mean the City of La Quinta, a municipal corporation,
having its offices at 78-495 Calle Tampico, La Quinta, CA 92253. The City is not a party to this
Agreement and shall have no obligations hereunder.
1.9 Days. The term "days" shall mean calendar days and the statement of any time
period herein shall be calendar days, and not business days, unless otherwise specified.
1.10 Effective Date. The Effective Date of this Agreement shall occur after approval
hereof by Agency and shall mean the later of the dates this Agreement is executed on behalf of
Agency and Participant.
1.11 Enforced Delay. The term "Enforced Delay" shall have the meaning set forth in
Section 12.4.
1.12 Executive Director. The term "Executive Director" shall mean the individual
duly appointed to the position of Executive Director of Agency, or his or her authorized
designee. Whenever an administrative action is required by Agency to implement the terns of
this Agreement, the Agency Executive Director, or his or her authorized designee, shall have
authority to act on behalf of Agency, except with respect to matters reserved for Agency Board
determination.
1.13 Hazardous Materials. The term "Hazardous Materials" shall mean (i) any
hazardous or toxic substance, material or waste which is or becomes regulated by any local or
regional governmental authority, the State of California, or the United States Government and/or
(ii) any substance or material identified by the United States Government, the State of California,
County of Riverside, or any local or regional governmental authority as hazardous or toxic and
which is included on any list of such substances published by any such governmental entity and
shall specifically include petroleum, petroleum -based products, asbestos and PCBs.
882/015610-0063 2 163 4
325173.04 a11/19/02
1.14 Landaq. The term "Landaq" shall mean Landaq, Inc., a Delaware corporation,
which is the entity from which Participant acquired the Site.
1.15 Landaq Restrictions. The term "Landaq Restrictions" shall mean, collectively, (1)
the covenants and restrictions contained in the grant deed pursuant to which Landaq conveyed
the Site to Participant ("Grant Deed"), which Grant Deed was recorded on October 24,
2002, as Instrument No. 2002-600846, in the Official Records of the County of Riverside
ffi
("Official Records"l; (ii) that certain Declaration of Development Covenants, Conditions and
Restrictions entered into and recorded on October 242002, as Instrument
No. 2002-600848, in the Official Records of the r,,u ty �� v;..o, �;aa, by and between
Landaq, as the "Company," and Participant, as the "Builder," which sets forth certain
development and use restrictions with which Participant is required to comply; and (iii) that
certain Option Agreement and Escrow Instructions entered into on or about
October 24, 2002, by and between Landaq, as the "Company," and Participant, as the "Builder,"
which provides for Participant's grant to Landaq of an option to repurchase the Site in
accordance with the terms thereof, as memorialized by that certain Memorandum of Option
entered into by those parties and recorded on October 24, 2002, as Instrument
No. 2002-600849, in the Official Records. of the County fRiyo,-si
1.16 Participant. The term "Participant" shall mean Apartments at La Quinta Village,
LP, a California limited partnership, and any permitted assignees and successors of same as set
forth in Section 7.0.
1.17 Project. The term "Project" shall mean the construction on the Site of an
affordable rental housing complex with not less than two hundred (200) units, of which seventy-
five (75) units shall be the Restricted Units, and related interior and exterior improvements,
including, but not limited to, a private recreation center. The Project is more particularly
described in the Scope of Development attached hereto and incorporated herein as Exhibit "C".
1.18 Project Area. The term "Project Area" shall mean Redevelopment Project Area
No. 1 which is located in the City of La Quinta, California. The exact boundaries of the Project
Area are specifically described in the Redevelopment Plan.
1.19 Redevelopment Plan. The term "Redevelopment Plan" shall mean the
Redevelopment Plan for the Project Area, as the same has been amended prior to the Effective
Date and as it may be further amended from time to time. A copy of the Redevelopment Plan in
effect on the Effective Date is on file in the Office of the City Clerk of the City. The
Redevelopment Plan is incorporated herein by this reference as though fully set forth herein.
1.20 Release of Construction Covenants. The term "Release of Construction
Covenants" shall mean that certain Release of Construction Covenants, in the form attached
hereto and incorporated herein as Exhibit "H".
1.21 Restricted Units. The term "Restricted Units" shall mean the seventy-five (75)
rental apartment dwelling units in the Project that are covenanted for affordability, occupancy,
and with respect to other matters pursuant to this Agreement and the Agency Regulatory
Agreement. Any individual such unit shall be referred to as a "Restricted Unit."
882/015610-0063 3 1 r'
325173.04 a11/19/02
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1.23 4-.2-3 Schedule of Performance. The term "Schedule of Performance" shall mean
that certain Schedule attached hereto and incorporated herein as Exhibit "D".
1.24 1-14
1.25 Site. The term "Site" shall mean that certain undeveloped real property, located
approximately 630 feet north of Calle Tampico and 150 feet east of Eisenhower Drive, in the
City of La Quinta. The Site is legally described as Exhibit "A", and is shown on the Site Map
attached hereto and incorporated herein as Exhibit "B".
1.26 4425
1.27 Title Company. The term "Title Company" shall mean the title company
approved by Agency and Participant responsible for issuing a lender's policy of title insurance to
the Agency insuring the priority of the Agency Deed of Trust and Agency Regulatory
Agreement.
1.28 446
1.29 Unrestricted Units. The term "Unrestricted Units" shall mean the one hundred
twenty-five (125) rental apartment dwelling units in the Project that are not restricted for
affordability. Any individual such unit shall be referred to herein as an "Unrestricted Unit."
2.0 PURPOSE OF AGREEMENT.
The purpose of this Agreement is to effectuate the Redevelopment Plan for the Project
Area by providing for Participant's construction of the Project on the Site and thereby assisting
in the provision of adequate housing affordable to moderate income households within the City.
The development of the Project on the Site and the fulfillment generally of this Agreement are in
the best interests of the City and the welfare of its residents and are in accordance with the public
purposes and provisions of applicable federal, state, and local laws and regulations, pursuant to
which the Project is being undertaken.
3.0 CURRENT OWNERSHIP OF THE SITE; PARTICIPANT ACQUISITION OF
THE SITE.
3.1 Ownership of the Site. Participant is the owner of fee title to the Site. Prior to the
execution of this Agreement, Participant has delivered to Agency a 'f e and eeffeet eepy of the
fully signed Sale Esefew histfuetiens and a eepy of the gfant deed eonveying the Site to Im
and correct and fully executed conies of the documents setting forth the Landaa
Restrictions, including -a cony of the Grant Deed. Participant a—Vat Deed"). D-ai4i^aii
16
882/015610-0063
325173.04 a11/19/02 4
represents that t1, Sale Eser-ew Inst fu etions (a) p ide that Participant's purchase price for the
Site and the Pr^^erty Adjaeefit To Sites certain real property adjacent to the Site was equal
to Two Million Dollars ($2,000,000). ; and (b) do not „t^;,, ^ toffs that would ,samba
wouldeser-ew or- ether- fees to be ehar-ged to -PaAieipant at the elese of e—f-A-VII te be, higher- than 'A'
r lly be ,.>1a fged f ^similar- t,-ansaetie ,,, River -side County Participant further
represents to Agency that the portion of said purchase price that represents the purchase price of
the Site is One Million Seven Hundred Thirty -Eight Thousand Three Hundred Fourteen Dollars
($1,738,314). Based on the foregoing, Participant qualifies as an "owner -participant" within the
meaning of the California Community Redevelopment Law (Health & Safety Code § 33000 et
sec .). Participant shall indemnify, defend, and hold Agency harmless from and against all
liability, loss, damage, cost, and expense (including expert witness fees, attorney's fees, and
defense costs) arising from or related to any dispute related to the Salo > ser-ow instfuetions of
Qfth
Landaa Restrictions,
3.2 Agency Title Policy. On November —15, 2002, the Title Company delivered to
Agency an updated commitment for title
insurance dated November 4, 2002, as Order No. 219891, together with copies of all
underlying documents as may be revealed by the preposed title pelie5 updated commitment
(collectively, the "Proposed Tito Polie =" )"Title Commitment" 1. Participant shall, at no cost to
Agency, cause the Title Company to issue and deliver to Agency an ALTA lender's policy of
title insurance, together with such endorsements as may be reasonably requested by Agency,
with liability in the amount of the Agency Note, covering the Site, showing title vested in
Participant and insuring the validity and priority of, respectively, the Agency Deed of Trust and
Agency Regulatory Agreement (the "Agency Title Policy") subject only to:
3.2.1 those exceptions to title set forth in the Pfepesed Title P&�
Commitment that the Executive Director has approved, in writing, as "acceptable;" provided,
however, that Agency may only object to those exceptions that adversely affect the
developability of the Site;
3.2.1 all nondelinquent general and special real property taxes and assessments;
3.2.2 the Grant Deed; and
3.2.3 such other matters as may be approved in writing by the Executive
Director.
3.3 Conditions to Agency's Performance. As a further condition precedent to
Agency's performance of its obligations set forth in this Agreement, all of the following shall
have been performed or completed by the date set forth in the Schedule of Performance):
3.3.1 Participant shall have executed (and acknowledged where required) and
submitted to Agency the Agency Note, Agency Deed of Trust and Agency Regulatory
Agreement, and all other agreements and documents reasonably required to be signed by
Participant pursuant to this Agreement and the agreements and documents referenced in this
Agreement.
882/015610-0063 325173.04 al1/19/02 5 167
3.3.2 The Executive Director shall have reviewed and approved the title
condition and the Title Company shall have issued the Agency Title Policy with only those
exceptions pre -approved in this Agreement or as approved by the Executive Director in his/her
sole and absolute discretion.
3.3.3 Participant shall have submitted to the Executive Director the evidence of
insurance required by the Agency Regulatory Agreement, with such insurance coverages to be
effective as of the Effective Date.
3.3.4 Participant shall have obtained all necessary land use entitlements to
construct the Project.
3.3.5 Participant is not in material default of Q any of the terms of (i4 this
Agreement; or (ii) the Sale > ser-ow Instf,,,.ti any of the Landaa Restrictions.
3.4 Brokerage Commissions. Participant and Agency shall each indemnify, defend,
and hold harmless the other from and against all liabilities, costs, damages, and expenses,
including, without limitation, attorneys' fees, resulting from any claims for fees or commissions,
based upon agreements by the other or any person or entity affiliated with the other, if any, to
pay a broker's commission and/or finder's fee pertaining to Participant's acquisition of the Site.
No such fee(s), if any, shall be paid out of the Agency Loan.
3.5 Taxes and Assessments and Liens. Participant shall pay, when due, all real estate
taxes and assessments assessed or levied against all or any portion of the Site subsequent to
conveyance of title.
4.0 AGENCY LOAN; PHYSICAL CONDITION OF SITE.
4.1 Agency Loan; Disbursement. Subject to the terms and conditions of this
Agreement, including, but not limited to, the conditions to disbursement set forth in the Agency
Note, Agency shall assist in the financing of the construction of the Project by providing
Participant with the Agency Loan from the Agency's Low and Moderate Income Housing Fund
in the amount of THREE MILLION DOLLARS ($3,000,000.00). The Agency Loan shall be
disbursed in accordance with the terms of the Agency Note.
The Agency Loan shall be evidenced by the Agency Note and Agency Deed of Trust.
Interest, in the amount of seven percent (7%) per annum, shall accrue on each portion of the
Agency Loan commencing on the date such portion is disbursed.
4.2 Agency Note; Agency Deed of Trust. Repayment of the Agency Loan shall be in
accordance with the terms of the Agency Note, attached hereto and incorporated herein as
Exhibit "E." Repayment of the Agency Note shall be partially secured by the Agency Deed of
Trust. Notwithstanding any of the foregoing, however, the Agency Note shall be automatically
cancelled, and the Agency Deed of Trust shall be reconveyed, at such time when the Agency has
issued a Release of Construction Covenants for the Project.
4.3 Phvsical Condition of Site.
882/015610-0063 1 � 11
325173.04 a]1/19/02 6
4.3.1 Disclaimer of Warranties. Participant acknowledges that neither the
Agency nor any of its officials, employees, agents, contractors, or representatives have made any
representations, warranties or agreements to or with Participant on behalf of Agency as to any
matters concerning the Site, the present use thereof, or the suitability of Participant's intended or
contemplated use of the Site. The foregoing disclaimer includes, without limitation, topography,
climate, air, water rights, utilities, present and future zoning, soil, subsoil, Hazardous Materials,
patent and latent physical conditions or defects, the purposes to which the Site is suited,
drainage, access to public roads, and the availability of governmental permits or approvals of any
kind. Participant represents and warrants to Agency that it has investigated the Site, and has
knowledge of the operative governmental laws and regulations (including, but not limited to,
zoning, environmental, hazardous waste and land use laws and regulations) to which the Site
may be subject, and has acquired the Site on the basis of its review and determination of the
application and effect of such laws and regulations. Participant has neither received nor relied
upon any representations concerning such laws and regulations made by Agency or its
employees, agents, contractors, or representatives, or any other person acting on the behalf of
Agency except as set forth in this Agreement. Any agreements, warranties, or representations
not expressly contained in this Agreement shall in no way bind Agency. Participant
acknowledges that it is fully responsible for obtaining any and all permits from the City and
other governmental entities as may be required for the Project. Nothing in this paragraph is
intended to defeat or declare void any permits, approvals, or entitlements that Participant has
obtained with respect to the Site prior to the date of this Agreement.
4.3.2 Participant Indemnity Regarding Physical Condition of the Site. From and
after the Effective Date, Participant shall indemnify, defend, and hold Agency harmless from and
against any and all claims, suits, penalties, expenses, losses, damages, attorney's fees, judgments,
or any other action or damage of any kind or nature arising out of or related to any of the matters
described in Section 4.3.1. Notwithstanding any other provision of this Agreement to the
contrary, Participant's indemnification as set forth in this Section 4.3.2 shall survive the
termination of this Agreement and shall continue in perpetuity.
5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES.
5.1 Effective Date of Representations and Warranties. All of the representations and
warranties set forth in this Section 5.0 are valid as of Effective Date and shall remain valid, true,
and correct unless Participant discloses to Agency in writing a change in any of the
representations or warranties set forth herein.
5.2 Representations and Warranties. In addition to other representations and
warranties of Participant set forth in this Agreement, Participant hereby makes the following
representations, covenants, and warranties for the benefit of Agency and Agency's successors
and assigns, and acknowledges that the execution of this Agreement by Agency has been made
in material reliance by Agency on such representations and warranties:
5.2.1 No Default. Other than the consents obtained as set forth in this
Agreement, the execution and delivery of this Agreement and all other documents to be executed
by Participant pursuant to this Agreement will not constitute or result in any default or event that
882/015610-0063
325173.04 all/19/02 7
with notice or the lapse of time, or both, would be a default, breach, or violation of any other
agreement, instrument, or arrangement by which Participant is bound.
5.2.2 No Violation. The execution and delivery of this Agreement and all other
documents to be executed by Participant pursuant to this Agreement and the consummation of
the transactions contemplated herein will not violate any provision of or require any consent,
authorization, or approval under any law or administrative regulation or any other order, award,
judgment, writ, injunction or decree applicable to, or any governmental permit or license issued
to Participant.
5.2.3 No Bankruptcy. Participant has not filed or been the subject of any filing
of a petition under the Federal Bankruptcy Law or any insolvency laws, or any laws for the
discharge of indebtedness or for the reorganization of debtors.
5.2.4 No Misrepresentation. No representation, warranty, or covenant of
Participant in this Agreement, or in any document or certificate furnished or to be furnished to
Agency pursuant to this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
5.2.5 Due Execution. This Agreement and all other documents to be executed
by Participant pursuant to this Agreement have been or will be duly executed by Participant and
constitute valid, binding, and enforceable obligations of Participant. If other than an individual,
Participant has complied with all laws and regulations concerning its organization, existence, and
transaction of business.
5.2.6 No Extraneous Consideration. Participant has not paid or given to, and
will not pay or give to, Agency or any official or agent of Agency any money or other
consideration for obtaining this Agreement, except as may be expressly provided herein.
5.2.7 Financial Information. All financial information delivered to Agency,
including, without limitation, information relating to the financial condition of Participant, the
Site, and the Project accurately represents such financial condition and has been prepared in
accordance with accepted accounting principles consistently applied, unless otherwise noted in
such information. Participant shall notify Agency in writing of any material changes to such
information delivered to the Agency.
6.0 PROJECT DEVELOPMENT.
6.1 Construction of the Project.
6.1.1 Development In Accordance With Plans. Participant shall develop the
Project in accordance with this Agreement and the Approved Plans and Permits. As completed,
the Project: (a) shall comply with all applicable laws and ordinances of all governmental
authorities, including, without limitation, all laws and ordinances necessary to permit
rehabilitation of the Site as permitted by this Agreement; and (b) will be wholly in compliance
with any enforceable building restriction laws, however established, and will not violate any
enforceable use, easement, license, covenant, condition, or other restriction affecting the Site.
882/015610-0063 g
325173.04 a11/19/02
6.1.2 Evolution of Development Plans. Within the times set forth in the
Schedule of Performance, Participant shall submit to the City preliminary and final drawings and
specifications for development of the Project in accordance with the Scope of Development, the
concept drawings, and in accordance with the City's requirements. The term preliminary and
final drawings shall be deemed to include, unless otherwise waived by City, site plans, building
plans and elevations, landscaping plans, parking plans, and all other plans, drawings, and
specifications required to obtain site plan approval and, with respect to final drawings, to obtain
a building permit. Said plans, drawings and specifications shall be consistent with the Scope of
Development and the various development approvals referenced hereinabove, except as such
items may be amended by City (if applicable) and by mutual consent of City, Agency, and
Participant. Plans, (concept, preliminary and construction) shall be progressively more detailed.
6.1.3 Other Governmental Permits. Before commencement of construction or
development of any buildings, structures, or other work of improvement upon the Site,
Participant shall secure or cause to be secured any and all permits and approvals which may be
required by City or any other governmental agency affected by such construction, development,
or work to be performed by Participant pursuant to the Scope of Development, including, but not
limited to, necessary building permits and all approvals required under CEQA. Not by way of
limiting the foregoing, in constructing the Project, Participant shall comply with all applicable
development standards in City's Municipal Code and shall comply with all building code,
landscaping, signage, and parking requirements except as may be permitted through approved
variances and modifications. Agency agrees, at no cost to Agency, to reasonably assist
Participant in its efforts to obtain permits and approvals for the Project; provided, however, that
Agency does not represent, warrant, or guarantee that any permit or approval will be granted or
issued or that any such permit or approval will be granted or issued with or without any
particular conditions.
6.1.4 Cost of Construction; Subordination. Except for the Agency Loan,
Participant shall bear all costs of preparing and developing the Project and constructing and
rehabilitating all improvements on the Site, including, but not limited to, any and all costs for
construction, architectural and engineering plans, preparation of the Site, costs associated with
meeting applicable seismic standards, interim and permanent financing, and fees or charges for
development and building.
The Agency agrees to subordinate the Agency Deed of Trust and Regulatory
Agreement to Participant's construction loan or subsequent permanent loan, provided that (i)
the maximum cumulative principal amount of the construction loan shall not exceed ninety
percent (90%) of the lender's appraised value of the Site upon completion of the Project, which
amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; (ii)
the loan(s) shall obligate Participant to expend loan proceeds for no other purpose than the
Project; and (iii) the loan(s) shall provide that any notice of Participant breach or default shall
also be sent to the Agency at the address listed in Section 12.1 and that upon receipt of such
notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with
the lender regarding the noticed breach or default, and (C) purchase the property from Participant
subject to the construction lender's deed of trust, without the consent of Participant or the holder
of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall
not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due
882/015610-0063 9 �`
325173.04 al 1/19/02
under the loan. Agency agrees that the lender may, during the period of default, proceed
with its rights and remedies against Participant as a result of such default, subject only to
he cure rights provided above. Agency's Executive Director is hereby authorized to make
technical modifications to the requirements set forth above for any subordination executed
pursuant to this Section to accommodate the reasonable requests of a lender. In agreeing to
provide the subordination referred to in the this Section, Agency hereby
incorporates the finding required to be made in accordance with Health and Safety Code Section
33334.14.
6.1.5 Construction Schedule; Reports. Participant shall commence and
complete construction of the Project within the times set forth in the Schedule of Performance.
Once construction is commenced, Participant shall diligently pursue such construction to
completion and, subject to Section 12.4 hereof, Participant shall not abandon such construction
for more than ten (10) consecutive business days. Participant shall keep Agency informed of the
progress of construction and submit to the Executive Director written reports of the progress of
construction when and in the form requested.
6.1.6 Drawings and Specifications. Participant shall construct the Project upon
the Site in accordance with the construction drawings, working specifications, and related
documents that shall be submitted to and approved by the Agency and City in advance and in
writing.
6.1.7 Nondiscrimination During Construction. Participant, for itself and its
successors and assigns, agrees that during the construction of the Project, Participant shall not
discriminate against any employee or applicant for employment because of race, color, creed,
religion, sex, marital status, national origin, or ancestry.
6.1.8 Rights of Access. Representatives of Agency shall have the reasonable
right of access to the Site without charges or fees, at any time during normal construction hours
during the period of construction, for the purpose of assuring compliance with this Agreement,
including but not limited to the inspection of the construction work being performed by or on
behalf of Participant. Each such representative(s) of Agency shall identify himself or herself at
the job site office upon his or her entrance to the Site, and shall provide Participant, or the
construction superintendent or similar person in charge on the Site, a reasonable opportunity to
have a representative accompany him or her during the observation. Agency shall indemnify,
defend, and hold Participant harmless from any injury or property damage caused or liability
arising out of Agency's exercise of this right of access, except and to the extent that such injury,
damage, or liability is caused by the negligence or willful misconduct of Participant and/or
Participant's agents, servants, employees or contractors. Any observation, examination, or
inspection occurring by Agency during its/their access pursuant to this Section shall not be
construed or deemed as an inspection pursuant to any building codes or the Municipal Codes or
any other inspection that may be performed by City or any other public entity.
6.1.9 Construction Contract. The Agency acknowledges and agrees that
Participant shall act as the general contractor for the improvements required to be constructed by
Participant for the Project. Participant shall comply with all applicable laws and regulations
pertaining to the contracting of work for construction of the improvements, including but not
882/015610-0063 1
325173.04 al1/19/02 10 ( �'
limited to the payment of wages for services engaged and bills for materials, supplies, and
equipment. Participant shall not permit any mechanics' or materialmens' liens to be recorded
against the Site.
6.2 Indemnification. During the period of any construction of the improvements
pursuant to this Agreement and until such time as the Agency issues is re uired to issue its
Release of Construction Covenants for the Project, Participant agrees to and shall indemnify and
hold Agency and City and their respective agents, servants, employees, or contractors harmless
from and against all liability, loss, damage, cost, or expense (including expert witness fees and
reasonable attorneys' fees and court costs) arising from or as a result of the death of any person
or any accident, injury, loss, or damage whatsoever caused to any person or to the property of
any person which shall occur on the Site and which shall be directly or indirectly caused by the
acts done thereon or any errors or omissions of Participant or its agents, servants, employees,
invitees, or contractors except and to the extent such liability, loss, damage, costs, or expense is
caused by the active negligence or willful misconduct of Agency. The provisions of this Section
shall survive the termination of this Agreement.
6.3 Applicable Laws. Participant shall construct the Project in conformity with all
applicable federal, state, and local laws, rules, and regulations, including, but not limited to,
applicable wage and labor laws. Participant agrees to indemnify, defend, and hold Agency and
City harmless from and against all liability, loss, damage, cost, or expense (including expert
witness fees and reasonable attorney's fees and costs) arising from or as a result of any violation
of any applicable law, ordinance, statute, rule or regulation, including, but not limited to,
prevailing wage laws, except to the extent such violation arises from the active negligence of
Agency.
6.4 Release of Construction Covenants. Upon written request by Participant, and
upon satisfactory completion of the Project, as evidenced by City's issuance of a certificate of
occupancy (excluding a temporary certificate of occupancy issued by City), Agency shall issue
to Participant a Release of Construction Covenants as long as Participant is not in default under
this Agreement or any documents related hereto. The Release of Construction Covenants shall
be, and shall so state, a conclusive determination of satisfactory completion of construction of
the Project. After the date Participant is entitled to issuance of the Release of Construction
Covenants, and notwithstanding any other provision of this Agreement to the contrary, any party
then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall
not (because of any such ownership, purchase, lease, or acquisition) incur any obligation or
liability under this Agreement, except that such party shall be bound by the covenants that
survive the issuance of the Release of Construction Covenants, including as set forth in the
Regulatory Agreement. The Release of Construction Covenants is not a notice of completion as
referred to in California Civil Code section 3093.
If Agency refuses or fails to furnish a Release of Construction Covenants after written
request from Participant, Agency shall, within fifteen (15) days after the written request, provide
the Participant a written statement of the reasons Agency refused or failed to furnish a Release of
Construction Covenants. The statement shall also contain the Agency's opinion of the action
Participant must take to obtain a Release of Construction Covenants. If Agency shall have failed
to provide such written statement within said fifteen (15) day period, Participant shall be deemed
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325173.04 al1/19/02 1 1
entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the
Release of Construction Covenants for the reason that specific minor non -life safety items or
materials are not available or landscaping i-s or other punch -list items are not complete and the
cost thereof is less than two percent (2%) of the Agency Loan amount, as set forth in the Project
Budget, Agency shall issue the Release of Construction Covenants upon the posting by
Participant with Agency of a cash deposit, bond, or irrevocable letter of credit (in a form
acceptable to Agency), at Participant's option, in an amount representing one hundred percent
(100%) of the fair value of the work not yet completed.
7.0 TRANSFER AND ASSIGNMENT.
7.1 Sale or Transfer of the Project. Participant covenants that during the term of this
Agreement and the Agency Regulatory Agreement Participant shall not assign this Agreement or
transfer the Site or any of its interests therein except as provided in this Section 7.0.
7.2 Transfer Defined. As used in this Section 7.0, the term "Transfer" shall include
any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this
Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to
any person, entity, or group of persons or entities acting in concert of more than fifty percent
(50%) (in the aggregate) of the present ownership and/or control of any person or entity
constituting Participant, taking all transfers into account on a cumulative basis. In the event any
entity constituting Participant, its successor or the constituent partners or members of Participant
or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of
the issued and outstanding capital stock of such corporation, or of beneficial interests of such
trust; in the event that any entity constituting Participant, its successor or the constituent partners
of Participant or any successor of Participant is a limited or general partnership, such transfer
shall refer to the transfer of more than fifty percent (50%) of such limited or general partnership
interest; in the event that any entity constituting Participant, its successor or the constituent
members of Participant or any successor of Participant is a limited liability company, such
transfer shall refer to the transfer of more than fifty percent (50%) of such membership interest;
in the event that any entity constituting Participant, its successor or the constituent partners of
Participant or any successor of Participant is a joint venture, such transfer shall refer to the
transfer of more than fifty percent (50%) of the ownership and/or control of any such joint
venture partner, taking all transfers into account on a cumulative basis.
7.3 Agency Approval of Transfer Required. Except as set forth below, Participant
shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the
Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law,
without the prior written approval of Agency, which approval shall not be unreasonably
withheld, conditioned, or delayed, and any such purported Transfer without such approval shall
be null and void. Notwithstanding the foregoing, the following types of transfers shall not
require Agency approval but as with all Transfers shall be subject to Section 7.4:
(i) Transfers to any entity or entities owned or controlled directly or
indirectly by Participant or any of its respective shareholders or partners,
or to any parent corporation or subsidiary corporation of any partners of
Participant, or to any entity or entities controlled by any such shareholders
882/015610-0063 1 4
325173.04 al 1/19/02 12
or partners, or to any members of any entity which is a partner of
Participant, or to any of its constituent members or partners;
(ii) The leasing of individual rental units on the Site provided that such leasing
is in accordance with the terms of this Agreement and of the Agency
Regulatory Agreement;
(iii) Transfers resulting from the death or mental or physical incapacity of an
individual;
(iv) Transfers in trust for the benefit of a spouse, children, grandchildren, or
other family member, or for charitable purposes;
(v) Transfers of stock in a publicly -held corporation or of the beneficial
interest in any publicly -held partnership or real estate investment trust;
(vi) Any mortgage, deed of trust, sale and leaseback, or other form of
conveyance required for any reasonable method of financing or
refinancing the acquisition of the Site and development of the Project
thereon, including all direct and indirect costs related thereto; or
(vii) The conveyance or dedication or portions of the Site to the City or other
governmental entity, or the granting of easements or permits to facilitate
the development of the Site.
Agency shall reasonably consider approving a transfer to an entity not owned or
controlled by Participant provided such entity has both of the following: (A) the financial
strength and capability, equal to or greater than the financial strength and capability of
Participant, to perform Participant's obligations hereunder; and (B) the experience and expertise,
at levels equal to or greater than the experience and expertise of Participant, in the planning,
financing, development, ownership and operation of similar projects.
7.4 Assignment and Assumption Agreement. In the absence of specific written
agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or
this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve
Participant or any successor party from the obligation to timely complete construction of the
Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be
effective unless and until Participant and the transferee or successor party execute and deliver to
Agency a binding assignment and assumption agreement in a form reasonably approved by
Agency's legal counsel.
7.5 Pennitted Transferee. A "Permitted Transferee" under this Agreement shall be a
transferee or assignee that either (i), has been approved by the Executive Director, or (ii) is a
transferee of a Transfer not requiring the approval of the Executive Director pursuant to the
terms of this Agreement, and both the cases described in the foregoing clauses (i) and (ii) has
executed and delivered to the Executive Director an assignment and assumption agreement
pursuant to Section 7.4.
882/015610-0063 1
325173.04 al1/19/02 13
8.0 INSURANCE.
From and after the Effective Date, and for the term of the Agency Regulatory Agreement,
Participant shall procure and maintain, at its sole cost and expense, the insurance set forth in the
Agency Regulatory Agreement. Not later than the Effective Date of this Agreement, Participant
shall provide the Executive Director with Certificates of Insurance or appropriate insurance
binders evidencing said insurance coverages and said Certificates of Insurance or binders shall
be subject to the reasonable approval of the Executive Director.
Participant agrees that the provisions of this Section shall not be construed as limiting in
any way the extent to which Participant may be held responsible for the payment of damages to
any persons or property resulting from the Participant's activities or the activities of any person
or persons for which the Participant is otherwise responsible.
9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE.
9.1 Definitions. As used in this Section 9.0, the term "mortgage" shall include any
mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security interest, or
sale and lease -back, or any other form of conveyance for financing. The term "holder" shall
include the holder of any such mortgage, deed of trust, or other security interest, or the lessor
under a lease -back, or the grantee under any other conveyance for financing.
9.2 Limitation on Encumbrances. Except as otherwise permitted by this Agreement,
including but not limited to clause (f) vi of Section 7.3, Participant shall not mortgage the Site
or any portion thereof or any interest therein, any other mortgages or conveyances for financing
that encumber the Site or any portion thereof, without the prior written approval of the Executive
Director, which approval shall not be unreasonably withheld.
9.3 Participant's Breach Does Not Defeat Mortgyage Lien. Participant's breach of any
of the covenants or restrictions contained in this Agreement or in the Agency Regulatory
Agreement shall not defeat or render invalid the lien of any mortgage permitted pursuant to this
Agreement, made in good faith and for value as to the Site, or any part thereof or interest therein,
but unless otherwise provided herein, the terms, conditions, covenants, restrictions, easements,
and reservations of this Agreement shall be binding and effective against the owner of the Site
where, from and after such time said owner, including any lender, acquires the Site by
foreclosure, trustee's sale, or otherwise.
9.4 Notice of Default to Mortgagee Deed of Trust or Other Security Interest Holders.
Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or
default by Participant hereunder, Agency shall at the same time deliver a copy of such notice or
demand to each holder of record of any mortgage who has previously made a written request to
Agency therefor, or to the representative of such lender as may be identified in such a written
request by the lender. No notice of default shall be effective as to the holder unless such notice
is given.
9.5 Right of the Agency to Satisfy Other Liens on the Property After Conveyance of
Title. Prior to the recordation of the Release of Construction Covenants for the Project 4h
date Agency is required to issue the Release of Construction Covenants, if earlier), and after
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Participant has had a reasonable time to challenge, cure, or satisfy any liens or encumbrances on
the Site or any portion thereof which have not been approved by Agency, Agency shall have
the right to satisfy any such liens or encumbrances; provided, however, that it Agency shall
notiffy Participant at least ten (10) days prior to satisfying any liens or encumbrance
pursuant to this Section 9.5, and (h) nothing in this Agreement shall require Participant to pay
or make provision for the payment of any tax, assessment, lien or charge so long as Participant in
good faith shall contest the validity or amount thereof, and so long as such delay in payment
shall not subject the Site or any portion thereof to forfeiture or sale. Agency shall have the right
to reimbursement from Participant for any amount expended pursuant to this Section, which right
of reimbursement shall be secured by a lien on the Site, with power of sale.
10.0 USE OF THE SITE.
10.1 Use of the Site.
10.1.1 Dwelling Units. Participant hereby covenants and agrees, for itself and its
successors and assigns, to use and maintain the Site only as a rental apartment housing project
with two hundred (200) apartment dwelling units ("Units"), with not fewer than seventy-five
(75) of the Units to be rented to persons and families whose income does not exceed 120% of the
median income for Riverside County, adjusted for family size, as determined by the California
Department of Housing and Community Development ("Restricted Units"), all as more fully
described in the Agency Regulatory Agreement. The balance of the Units shall be available for
rent without restriction and are referred to herein as the "Unrestricted Units."
10.2 No Inconsistent Uses. Participant covenants and agrees that it shall not devote the
Site to uses inconsistent with the Redevelopment Plan, the applicable zoning restrictions, this
Agreement, the Agency Regulatory Agreement, or the Agency Loan Documents. Agency
hereby confirms that multifamily residential use (and associated parking) is a use permitted by
the Redevelopment Plan.
10.3 Obligation to Refrain from Discrimination. There shall be no discrimination
against, or segregation of, any persons, or group of persons, on account of race, color, creed,
religion, sex, marital status, ancestry, or national origin in the rental, sale, lease, sublease,
transfer, use, occupancy, or enjoyment of the Site, or any portion thereof, nor shall Participant, or
any person claiming under or through Participant, 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 Site or any portion
thereof. The nondiscrimination and nonsegregation covenants contained herein shall remain in
effect in perpetuity.
10.4 Effect of Covenants. Agency is deemed a beneficiary of the terms and provisions
of this Agreement and of the restrictions and covenants running with the land, whether or not
appearing in the Agency Regulatory Agreement, for and in its own right and for the purposes of
protecting the interests of the community in whose favor and for whose benefit the covenants
running with the land have been provided. The covenants in favor of Agency shall run with the
land without regard to whether Agency has been, remains, or is an owner of any land or interest
therein in the Site, or in the Redevelopment Project Area, and shall be effective as both
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covenants and equitable servitudes against the Site. Agency shall have the right, if any of the
covenants set forth in this Agreement which are provided for its benefit 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 may be entitled. The covenants
running with the land and their duration are set forth in the Agency Regulatory Agreement.
11.0 DEFAULT; ENFORCEMENT.
11.1 Defaults, Right to Cure and Waivers.
11.1.1 Subject to any Enforced Delay, and unless otherwise more specifically
provided in this Agreement, failure or delay by either party to timely perform any covenant of
this Agreement constitutes a default under this Agreement, but only if the party who so fails or
delays does not commence to cure, correct or remedy such failure or delay within thirty (30)
days after receipt of a written notice specifying such failure or delay, and does not thereafter
prosecute such cure, correction or remedy with diligence to completion.
11.1.2 Any default by Participant under this Agreement, or of the Agency Note,
or of the Agency Deed of Trust, or of the Agency Regulatory Agreement, or of any of the
Landaq Restrictions, shall constitute a default of all of the foregoing agreements entitling
Agency to pursue whatever remedies to which it is entitled under such agreements; provided that
the required notice of default under Section 11.1.1 has been given and the time period to
commence and complete a cure, correction, or remedy of such noticed default has expired
without such default having been cured, corrected, or remedied.
11.1.3 The injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Except as required to protect
against further damages, the injured party may not institute proceedings against the party in
default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall
not constitute a waiver of any default, nor shall it change the time of default.
11.1.4 Except as otherwise provided in this Agreement, waiver by either party of
the performance of any covenant, condition, or promise, shall not invalidate this Agreement, nor
shall it be considered a waiver of any other covenant, condition, or promise. Waiver by either
party of the time for performing any act shall not constitute a waiver of time for performing any
other act or an identical act required to be performed at a later time. The delay or forbearance by
either party in exercising any remedy or right as to any default shall not operate as a waiver of
any default or of any rights or remedies or to deprive 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.
11.2 Legal Actions.
11.2.1 Institution of Legal Actions. In addition to any other rights or remedies,
and subject to the requirements of Section 11.1, either party may institute legal or equitable
action to cure, correct or remedy any default, to recover damages for any default, or to obtain any
other remedy consistent with the purpose of this Agreement; provided, however, that
notwithstanding the foregoing, in no event shall Participant be entitled to damages related to
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economic loss, lost profits, or any other damages of like or similar kind or nature. Actions must
be instituted and maintained in the Superior Court of the County of Riverside, State of
California, in any other appropriate court in that county, or in the appropriate federal district
court.
11.2.2 Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
11.2.3 Acceptance of Service of Process. In the event that any legal action is
commenced by Participant against Agency, or by Agency against Participant, service of process
shall be made in such manner as may be provided by California law for service on such entity.
11.3 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party
of one or more of its 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.
11.4 Attorneys' Fees. If either party to this Agreement is required to initiate or defend
any action or proceeding in any way arising out of the parties' agreement to, or performance of,
this Agreement, or is made a party to any such action or proceeding by a third party, such that
the parties hereto are adversarial, the prevailing party, as between the Participant and Agency, in
such action or proceeding, in addition to any other relief which may be granted, whether legal or
equitable, shall be entitled to its/their expert witness fees and reasonable attorneys' fees from the
other. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled
to attorneys' fees shall be entitled to all other reasonable costs for investigating such action,
taking depositions and discovery and all other necessary costs the court allows which are
incurred in 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.
12.0 MISCELLANEOUS.
12.1 Notices. Formal notices, demands, and communications between Agency and
Participant shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable
same -day or overnight courier service that provides a receipt showing date and time of delivery,
(iii) delivered by United States mail, registered or certified, postage prepaid, return receipt
requested, or (iv) delivered by facsimile transmission, provided the original of the faxed
communication is delivered within twenty-four (24) hours by one of methods described in
clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses:
If to Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
Fax: (760) 777-7101
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With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: M. Katherine Jenson, Esq.
Fax: (714) 546-9035
If to Participant: Apartments at La Quinta Village, LP
1105 Quail Street
Newport Beach, CA 92655
Attn: Victor Mahoney
Fax: (949) 250-8574
With a copy to: Palmieri, Tyler, Wiener, Wilhelm
& Waldron, LLP
2603 Main Street, Ste. 1300
P.O. Box 19712
Irvine, CA, 92014-0220
Attn: Robert Ihrke
Fax: (949) 851-1554
Notices that are personally delivered, delivered by messenger/courier, or by fax (provided
there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt.
Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the
addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States
Postal System in the manner described in this Section. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as a party may from
time to time designate by mail.
12.2 Nonliability of Agency Officials and Employ. No member, official, employee,
or consultant of Agency shall be personally liable to Participant, or any successor in interest of
Participant, in the event of any default or breach by Agency or for any amount which may
become due to Participant or to its successor, or on any obligations under the terms of this
Agreement.
12.3 Time of Essence. Time is of the essence in the performance of this Agreement.
12.4 Enforced Delay: Extension of Times of Perfonnance. Notwithstanding the
foregoing, 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; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes;
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; acts of the other party; acts or the failure to act of a
public or governmental agency or entity (except that acts or the failure to act of Agency shall not
excuse performance by Agency unless the act or failure is caused by the acts or omissions of
Participant); or any other causes beyond the reasonable control or without the fault of the party
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claiming an extension of time to perform. In the event of such a delay (herein "Enforced
Delay"), the party delayed shall continue to exercise commercially reasonable efforts to
minimize the period of the delay. An extension of time for any such cause shall be limited to the
period of the Enforced Delay, and shall commence to run from the time of the commencement of
the cause, provided notice by the party claiming such extension is sent to the other party within
fifteen (15) days following the commencement of the cause. The following shall not be
considered as events or causes beyond the control of Participant, and shall not entitle Participant
to an extension of time to perform: (i) Participant's failure to obtain financing for the Project, (ii)
Participant's failure to negotiate agreements with prospective tenants or users for the Project, (iii)
interest rates or (iv) economic or market conditions. Times of performance under this
Agreement may also be extended by mutual written agreement by Agency and Participant. The
Executive Director shall also have the authority on behalf of Agency to administratively approve
extensions of time not to exceed a cumulative total of one (1) year.
12.5 Books and Records.
12.5.1 Maintenance of Books and Records. Participant shall prepare and
maintain all books, records, and reports necessary to substantiate Participant's compliance with
the terms of this Agreement.
12.5.2 Right to Inspect. Agency shall have the right, upon not less than twenty-
four (24) hours' notice, at all reasonable times, to inspect the books and records of the Participant
pertinent to the purposes of this Agreement. Said right of inspection shall not extend to
documents privileged under attorney -client or other such privileges.
12.6 Ownership of Documents. Copies of all drawings, specifications, reports,
records, documents and other materials prepared by Participant, its employees, agents and
subcontractors, in the performance of this Agreement, which documents are in the possession of
Participant and are not confidential or to which other persons have rights, shall be delivered to
Agency upon request in the event of a termination of this Agreement, and Participant shall have
no claim for additional compensation as a result of the exercise by Agency of their respective
rights hereunder. Agency shall have an unrestricted right to use such documents and materials as
if it were in all respects the owner of the same. Participant makes no warranty or representation
regarding the accuracy or sufficiency of such documents for any future use by Agency, and
Participant shall have no liability therefor.
12.7 Modifications. Any alteration, change or modification of or to this Agreement, in
order to become effective, shall be made by written instrument or endorsement thereon and in
each such instance executed on behalf of each party hereto.
12.8 Binding Effect of Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their legal representatives, successors, and assigns. This
Agreement shall likewise be binding upon and obligate the Site and the successors in interest,
owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Site.
12.9 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law. If, however, any
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provision of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
12.10 Interpretation. The terms of this Agreement shall be construed in accordance with
the meaning of the language used and shall not be construed for or against either party by reason
of the authorship of this Agreement or any other rule of construction which might otherwise
apply. The Section headings are for purposes of convenience only, and shall not be construed to
limit or extend the meaning of this Agreement.
12.11 Entire Agreement. This Agreement and all documents incorporated herein
contain the entire understanding among the parties hereto relating to the transactions
contemplated herein and all prior or contemporaneous agreements, understandings,
representations, and statements, oral or written, are merged herein and shall be of no further
force or effect.
12.12 Waiver; Amendments. All waivers of the provisions of this Agreement, unless
specified otherwise herein, must be in writing and signed by the appropriate authorities of
Agency or Participant, as applicable. No delay or omission by either party hereto in exercising
any right or power accruing upon the compliance or failure of performance by the other party
hereto under the provisions of this Agreement shall impair any such right or power or be
construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the
covenants, conditions or agreements hereof to be performed by the other party shall not be
construed as a waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions hereof. All amendments hereto must be in writing and signed by the
appropriate authorities of Agency and Participant.
12.13 Counterparts. This Agreement may be executed in counterparts, each of which,
when this Agreement shall have been signed by all the parties hereto, shall be deemed to be an
original, and such counterparts shall constitute one and the same instrument.
12.14 Authority. Agency represents and warrants that: (1) it is a redevelopment agency
duly organized and existing under the laws of the State of California; (ii) by proper action of
Agency, Agency has been duly authorized to execute and deliver this Agreement, acting by and
through its duly authorized officers; and (iii) the entering into this Agreement by Agency does
not violate any provision of any other agreement to which Agency is a party. Participant
represents and warrants that: (i) it is duly organized and existing under the laws of the State of
California; (ii) by proper action of Participant, Participant has been duly authorized to execute
and deliver this Agreement, acting by and through its duly authorized principals or officers; and
(iii) the entering into this Agreement by Participant does not violate any provision of any other
agreement to which Participant is a party to which consent has not been obtained.
12.15 Exhibits. This Agreement includes all exhibits and attachments attached hereto,
which by this reference are incorporated in this Agreement in their entirety. This Agreement
also includes the Redevelopment Plan and any other documents incorporated herein by
reference, as though fully set forth herein.
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12.16 Effective Date. The effective date of this Agreement shall be the latest of the
dates set next to the signatures of the parties hereto after all the parties hereto have signed this
Agreement, which latest date shall be inserted into the preamble to this Agreement.
[END - SIGNATURE PAGE AND EXHIBITS FOLLOW]
IN WITNESS WHEREOF, Agency and Participant have executed this Agreement as of
the Effective Date.
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for La Quinta
Redevelopment Agency
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Thomas Genovese, Executive Director
"PARTICIPANT"
APARTMENTS AT LA QUINTA VILLAGE,
LP, a California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
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1�4
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE SITE:
Parcel 3 of Parcel Map 30721, recorded on October 23, 2002, in
Book 203, Pages 30 through 31, of Parcel Maps, filed in the Office
of the County Recorder of Riverside County, State of California.
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EXHIBIT "B"
SITE MAP
[SEE FOLLOWING PAGE]
i
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[REPLACE THIS PAGE WITH SITE MAP]
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EXHIBIT "C"
SCOPE OF DEVELOPMENT
PROJECT LOCATION: The Project will be constructed on a 4-2 1 1-acre site near the
intersection of Eisenhower Drive and Calle Tampico.
PROJECT DESCRIPTION: The Project will consist of (i) 32 two-story, architecturally
distinctive buildings, containing 200 one, two and three -bedroom for -lease units, ranging from
670 to 1,117 square feet, and (ii) a private recreation center, with a community room, fitness
center, billiards room, resident business center, swimming pool and spa, and other recreational
amenities, in a gated setting. Seventy-five of the units will be provided for moderate -income
households (those earning between 80% and 120% of the median income for Riverside County).
ARCHITECTURAL THEME: The architectural context of the Project will be predominated
by an earth -tone color palette of whitewashed stucco over adobe brick with red tile roofs,
consistent with the architectural expression of the historic La Quinta Resort and adjacent
grounds.
The home entries will be articulated as a focal point of a building's front elevation through the
use of roof elements, columns, porticos, recesses, window treatments and other architectural
features.
LANDSCAPING: Indigenous, naturalized and drought -resistant plants have been selected for
their appropriateness to the neighborhood architectural theme, climatic and soil conditions, and
to facilitate ease of plant maintenance.
CONSTRUCTION AND MANAGEMENT ENTITIES: The Project will be constructed by
Apartments at La Ouinta Village, LLC. The dwelling units will be managed by Cameo
Homes, a Southern California Corporation that has been in the development business for more
than 30 years. The dwelling t ill be managed by Mesa Management, a subs=a_,,,... 4'Cameo
Homes.
1 u is
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EXHIBIT "D"
SCHEDULE OF PERFORMANCE
ITEM
TIME FOR
NO.
ITEM OF PERFORMANCE
PERFORMANCE
REFERENCE
1.
Participant submits evidence of
Concurrent with or prior to
§ 8.0, Agency
insurance required by Agency
Effective Date of Agreement.
Regulatory
Regulatory Agreement.
Agreement, § 7.0
2.
Participant submits complete
Not later than one hundred
§ 6.1.2, 6.1.3
application on Project to City,
twenty (120) days after
including all required preliminary
Effective Date.
and final drawings and permit
applications, and City has n ed
.l is to issue building
same add
fees, Pat4ieip h nt has
parRe.,t of and
,,,.,its n nl
obtained all and
of the Pr-ejee4 has taken all other
actions necessary to obtain Citv's
approval of the same.
3.
Participant delivers to Agency for
Not later than five (5) days
§ 3.2-3.3
recordation (as applicable) executed
after the Effective Date.
Agency Note, Agency Deed of
Trust, and Agency Regulatory
Agreement.
4.
Agency disburses Agency Loan.
Per terms of the Agreement.
§ 4.1
5.
Participant commences construction
Fourteen (14) days after
§ 6.2.5.
of the Project.
issuance of building permits.
6.
Participant completes construction
Within twenty-four (24)
§ 6.1.5, 6.4.
of the Project, obtains a certificate
months after performance of
of occupancy from the City (if
Item No. 5.
applicable), and requests Agency
issuance of the Release of
Construction Covenants.
1 Q'I
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ITEM
TIME FOR
NO.
ITEM OF PERFORMANCE
PERFORMANCE
REFERENCE
7.
Agency issues Release of
Within fifteen (15) business
§ 6.4
Construction Covenants.
days after Participant's
request, if Participant is
entitled thereto.
8.
Agency cancels Agency Note and
Within ten (10) business days
§ 4.2
reconveys Agency Deed of Trust.
after Participant's completion
of Item No. 7.
9.
Participant submits annual report
Not later than the September 1
Agency
pursuant to Health and Safety Code
following the June 30 end of
Regulatory
Section 33418 to Agency.
each fiscal year for term of the
Agreement, § 3.7
Regulatory Agreement.
It is understood that this Schedule of Performance is subject to all of the terms and
conditions of the text of the Agreement, including, but not limited to, the enforced delay
provisions contained in Section 12.4. The summary of the items performance in this Schedule of
Performance is not intended to supersede or modify the more complete description in the text; in
the event of any conflict or inconsistency between this Schedule of Performance and the text of
the Agreement, the text shall govern.
110
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EXHIBIT "E"
AGENCY NOTE
[SEE FOLLOWING PAGES]
19 t
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NOTE
2002 ("Note Date") $3,000,000 ("Loan Amount")
FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to
pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate
and politic ("Holder" or "Agency"), at a place designated by Holder, the principal sum of
THREE MILLION DOLLARS ($3,000,000) ("Note Amount"), plus accrued interest, or such
lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof.
The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth herein
and in that certain Affordable Housing Agreement by and among Maker and Holder, dated
("AHA"), pertaining to Maker's redevelopment of certain real property
defined in the AHA as the "Site."
Reference is also made to the following additional agreements and documents, of even
date herewith, involving Maker and Holder and/or pertaining to the Site:
(i) Deed of Trust with Assignment of Rents by and between Maker as borrower,
Holder as beneficiary, and as Trustee, and
recorded in the Office of the Riverside County Recorder ("Agency Deed of
Trust"). The Agency Deed of Trust partially secures repayment of this Note.
(ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and
between Maker and Holder, for the benefit of Holder, and recorded in the Office
of the Riverside County Recorder ("Agency Regulatory Agreement").
The AHA, Agency Deed of Trust, and Agency Regulatory Agreement are referred to
herein collectively as the "Agency Agreements." The Agency Agreements are incorporated
herein as though fully set forth. Except as otherwise provided herein, the defined terms used in
this Note shall have the same meaning as set forth in the AHA.
1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of
reimbursing Maker for a portion of Maker's Site acquisition costs and for assisting Maker with
Maker's costs for constructing the Project on the Site in accordance with the AHA.
2. Principal Amount. The principal amount of this loan shall be THREE MILLION
DOLLARS ($3,000,000) ("Loan Amount"). Simple interest shall accrue on the outstanding
principal amount at seven percent (7%) per annum, compounded annually. Interest shall accrue
as set forth in Section 4 in the event of a Maker default.
3. Disbursement of Agency Loan.
3.1 The Agency Loan shall be disbursed in four disbursements, in accordance with
this Section 3.
3.2 A portion of the Agency Loan in the amount of Six Hundred Fifty Thousand
Dollars ($650,000) ("Agency Acquisition Assistance") shall be disbursed to Maker to reimburse
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Maker for a portion of Maker's purchase price for the Site. Maker has submitted to Holder
evidence satisfactory to Holder that Maker has acquired fee title to the Site and certain adjacent
property for the purchase price of Two Million Dollars ($2,000,000) and that the portion of said
purchase price representing the purchase price for the Site is One Million Seven Hundred Thirty -
Eight Thousand Three Hundred Fourteen Dollars ($1,738,314). Notwithstanding the Holder's
acceptance of Maker's evidence, as set forth in the immediately preceding sentence, Maker
represents and to Holder that all of said evidence submitted to Holder is true and correct. Maker
agrees that if any of the evidence submitted to Holder is false or inaccurate, Maker shall
promptly reimburse Holder for any amount of the Agency Acquisition Assistance for which
Holder determines Maker was ineligible. Holder shall disburse the Agency Acquisition
Assistance to Maker within fifteen (15) business days after Maker's satisfaction of all of the
conditions to disbursement set forth in Section 3.6 below (except the condition set forth in
Section 3.6(K)).
3.3 A portion of the Agency Loan in the amount of One Hundred Fifty Thousand
Dollars ($150,000) ("Agency Architectural/Engineering Assistance") shall be disbursed to Maker
to reimburse Maker for architectural and engineering costs Maker incurs in designing the Project.
Once all conditions precedent to disbursement of the Agency Loan set forth in Section 3.6 below
have been satisfied, Maker may obtain disbursement of the Agency Architectural/Engineering
Assistance or portion thereof by (a) notifying Holder's Executive Director in writing of the
amount required; (b) providing Holder with supporting documentation showing the architectural
and engineering work performed and the actual cost thereof; and (c) providing Holder with
unconditional waiver and releases in the form set forth in Civil Code Section 3262; provided,
however, that Maker may obtain disbursement of the Agency Architectural/Engineering
Assistance prior to such time that Maker has obtained all of the Approved Plans and Permits, as
set forth in Section 3.6(K). If the requested disbursement is permitted under the terms of this
Note, Holder's Executive Director shall promptly, but in no event later than fifteen (15) business
days after Holder's receipt of all of the items listed in clauses (a)-(c) of this Section 3.3, effect
payment directly to Maker by check.
3.4 A portion of the Agency Loan in the amount of One Million Eight Hundred
Thousand Dollars ($1,800,000) ("Agency Sitework Assistance") shall be disbursed to Maker to
reimburse Maker for permit fees Maker is required to pay to construct the Project and for costs
Maker incurs in grading the Site and installing the wet and dry utility infrastructure necessary for
the Project. Once all conditions precedent to disbursement of the Agency Loan set forth in
Section 3.6 below have been satisfied, Maker may obtain disbursement of the Agency Sitework
Assistance or portion thereof by (a) notifying Holder's Executive Director in writing of the
amount required; (b) providing Holder with supporting documentation showing the sitework
work performed and the actual cost thereof, and (c) providing Holder with unconditional waiver
and releases in the form set forth in Civil Code Section 3262. If the requested disbursement is
permitted under the terms of this Note, Holder's Executive Director shall promptly, but in no
event later than fifteen (15) business days after Holder's receipt of all of the items listed in
clauses (a)-(c) of this Section 3.4, effect payment directly to Maker by check.
3.5 A portion of the Agency Loan in the amount of Four Hundred Thousand Dollars
($400,000) ("Agency Completion Assistance") shall be disbursed, by check, to Maker within
882/015610-0063 2 1 Q I
325173.04 al1/19/02
fifteen (15) business days after Maker completes construction of the Project, as evidenced by
Holder's issuance to Maker of a Release of Construction Covenants.
3.6 The following shall be conditions precedent to Holder's disbursement of any
portions of the Agency Loan:
(A) Holder shall have executed the AFA;
(B) Holder shall have accepted Agency's Title Policy for the Site, in
accordance with Section 3.3 of the AFA.
(C) Maker shall have timely submitted to the Executive Director of Holder
and obtained approval from same, of Maker's evidence of insurance;
(D) Maker shall have signed the Agency Regulatory Agreement and delivered
same to Holder for recordation;
(E) Maker shall have signed this Note and delivered same to Holder;
(F) Maker shall have signed the Agency Deed of Trust and delivered same to
Holder for recordation and filing;
(G) Maker shall not be in default of its obligations under the AHA, this Note,
or under the Agency Regulatory Agreement;
(H) Maker shall not be in default of any of the tefms and eenditiens of the Sale
Esefew instr etie ; Landag Restri ions•
(I) Owner shall have executed, and Maker shall have recorded, a
subordination agreement, subordinating the Landaq Restrictions to the Agency Deed of Trust
and Agency Regulatory Agreement;
(J) Maker shall have obtained all of the necessary land use entitlements to
construct the Project; and
(K) Maker shall have timely obtained all of the Approved Plans and Permits,
including, but not limited to, building permits to construct the Project (except that Maker may
obtain disbursement of the Agency Acquisition Assistance and the Agency
Architectural/Engineering Assistance prior to the time it satisfies this condition).
4. Term of Note; Repa ram. Repayment of the Loan Amount, as adjusted and redefined as
the "Adjusted Loan Amount" pursuant to this Section 4, shall be through monthly installment
repayment amounts.
4.1 Subject to the provisions of (a) Section 5 herein which provide for acceleration of
the then outstanding principal and accrued interest and immediate payment thereof in the event
of a default by Maker and (b) Sections 4.2 through 4.4 below, which provide for the cancellation
of this Note in the event certain specified conditions are met:
l4
882/015610-0063 3
325173.04 al 1/19/02
(A) Maker shall not be required to make any payments of principal or interest
on this Note for a period of twenty-eight (28) months following the Note Date ("Grace Period").
(B) Maker agrees that interest shall accrue on any amounts of the Agency
Loan that have been disbursed prior to the expiration of the Grace Period, and that as a result
thereof, as of the first day of the next calendar month following expiration of the Grace Period
(the "Repayment Commencement Date"), the outstanding principal and accrued interest to date
due Holder on which payments are to be made shall be adjusted to reflect said accrual ("Adjusted
Loan Amount"), and interest shall continue to accrue, on the Adjusted Loan Amount, at the rate
of seven percent (7%) per annum, compounded annually.
(C) Maker shall commence repayment of the Adjusted Loan Amount and
interest thereon (at the rate specified in Paragraph 1) in sixty (60) equal monthly installments of
an amount set forth in a repayment schedule to be prepared by Holder within sixty (60) days
after the Holder's disbursement to Maker of the Agency Completion Assistance.
4.2 Notwithstanding the foregoing, this Note shall be deemed paid in full when
Maker, through monthly payments, has repaid the Holder an amount equal to the Adjusted Loan
Amount plus interest, as set forth in this Note.
4.3 Notwithstanding anything to the contrary herein, this Note shall be automatically
cancelled, as evidenced by Holder's return to Maker of the original of this Note marked
"cancelled," and the Deed of Trust shall be immediately reconveyed, at such time that Holder has
issued a Release of Construction Covenants for the Project.
4.4 Maker shall have the right to prepay all or any portion of this Note at any time
without penalty, and upon such repayment the Agency Deed of Trust shall be reconveyed.
Prepayment shall not affect the Agency Regulatory Agreement or the term of the Agency
Regulatory Agreement.
4.5 Any payments made by Maker in payment of this Note shall be applied in the
following order: (i) first to the interest then accrued and due on the unpaid principal balance
under this Note, (ii) second to reduction of the principal balance of this Note.
5. Default; Acceleration; Cross -Default. In the event:
5.1 Maker fails to timely make a payment required by this Note within ten (10) days
following the due date of any payment due hereunder; or
5.1 Maker fails to timely make any other payment due hereunder within ten (101
days after notice thereof from Holder; or
5.2 Maker is in material default of any of the covenants, terms, or provisions of this
Note, any of the Agency Agreements, or any of the T�f eenditiens of the Sale Esere-
rrtts Landau. Restrictions and Maker fails to timely cure such default under the terms of
the applicable agreement, it being understood and agreed by Maker that a default of this Note, or
of any of the Agency Agreements or of the Sale Eser-ow histf etio s Landaa Restrictions shall
be a default of all of the foregoing listed documents;
882/015610-0063 19
325173.04 al1/19/02 4
then Maker shall be in default of this Note, and all portions of the Loan Amount that have been
disbursed to Maker and all accrued interest thereon shall become immediately due and payable.
The rate of interest applicable to periods of default for the defaults set forth in this Section 5 shall
be calculated at the lesser of ten percent (10%) per annum or the maximum legal rate, and shall
accrue as of the date such payment was originally due.
6. Collection Costs; Attorneys' Fees. If, because of any event of default under this Note or
any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend any
provision of this instrument, whether or not suit is filed hereon, then Maker shall pay upon
demand reasonable attorneys' fees, expert witness fees and all costs so incurred by Holder
together with interest thereon until paid at the applicable rate of interest payable hereunder, as if
such fees and costs had been added to the principal owing hereunder.
7. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become
liable on this Note waive presentment, protest and demand, notice of protest, demand and
dishonor and nonpayment of this Note and any and all other notices or matters of a like nature,
and consent to any and all renewals and extensions near the time of payment hereof and agree
further that at any time and from time to time without notice, the terms of payment herein may
be modified or the security described in any documents securing this Note released in whole or
in part, or increased, changed or exchanged by agreement between Holder and any owner of the
premises affected by said documents securing this Note, without in any way affecting the
liability of any party to this Note or any persons liable or to become liable with respect to any
indebtedness evidenced hereby.
7. Severability. The unenforceability or invalidity of any provision or provisions of this
Note as to any persons or circumstances shall not render that provision or those provisions
unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in
all other respects, shall remain valid and enforceable.
8. Modifications. Neither this Note nor any term hereof may be waived, amended,
discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof
be effective except by an instrument in writing signed by Maker and Holder. No delay or
omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such
right or of any other right under this Note.
9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the
terms of this Note shall be implied from any failure of the Holder of this Note to take, or any
delay be implied from any failure by the Holder in taking action with respect to such breach,
default or failure from any prior waiver of any similar or unrelated breach, default or failure.
10. Usury. Notwithstanding any provision in this Note, the total liability for payment in the
nature of interest shall not exceed the limit imposed by applicable laws of the State of California.
11. Nonassignability. Maker may only Transfer (as that term is defined in the ABA) this
Note in accordance with provisions and restrictions pertaining to a transfer of the AHA as set
forth in the AHA. Holder may freely Transfer Holder's interest in this Note in any manner, at
882/015610-0063
325173.04 al1/19/02 5
Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers the
AHA to such transferee.
12. Governing Law. This Note has been executed and delivered by Maker in the State of
California and is to be governed and construed in accordance with the laws thereof.
13. Time of Essence. Time is of the essence in the performance of the obligations and
provisions set forth in this Note.
IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date.
"MAKER"
APARTMENTS AT LA QUINTA VILLAGE,
LP, a California limited partnership
By: Apartments at La Quinta Village,
LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
1()7
882/015610-0063 6
325173.04 al1/19/02
EXHIBIT "F"
AGENCY DEED OF TRUST
[SEE FOLLOWING PAGES]
882/015610-0063 R
325173.04 a11/19/02
Recording Requested By And
When Recorded Return to:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
SPACE ABOVE THIS LINE FOR RECORDER'S USE
EXEMPT FROM RECORDING FEE PER GOV. CODE § 6103
DEED OF TRUST WITH ASSIGNMENT OF RENTS
AND RIDER ATTACHED HERETO
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 1 , between APARTMENTS AT LA QUINTA VILLAGE, LP,
a California limited partnership, herein called TRUSTOR, whose address is 1105 Quail Street, Newport Beach, CA,
92658, , a California corporation, herein called TRUSTEE, and LA QUINTA
REDEVELOPMENT AGENCY, 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, County of Riverside, State of California, described as:
Parcel 3 of Parcel Map No. 30721, recorded on October 23, 2002, in Book 203, Pages 30 through 31, of Parcel
Maps, filed in the Office of the County Recorder of Riverside County, State of California.
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 THREE MILLION DOLLARS ($3,000,000), 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 his 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
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
882/015610-0063
325173.04 al1/19/02
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
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 RIDER ATTACHED TO THIS DEED OF TRUST
STATE OF CALIFORNIA
COUNTY OF
On
before me,
personally appeared JAMES GIANULIAS, personally
known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose
names(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 signatures(s) on the instrument the
person(s) or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
Signature of Trustor
APARTMENTS AT LA QUINTA VILLAGE, LP, a
California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
1
882/015610-0063
325173.04 at 1/19/02 2
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 apart 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 of 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 is such
manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said
property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior
or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from 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 his 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 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
�, 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 his own
882/015610-0063 S
325173.04 at1/19/02
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 Truster, 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 Truster, 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
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.
r1 882/015610-0063
325173.04 a11/19/02 2
RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS
THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
executed this day of I , by APARTMENTS
AT LA QUINTA VILLAGE, LP, a California limited partnership, herein "Trustor," in favor of
the LA QUINTA REDEVELOPMENT AGENCY, 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 Note by and between Trustor and Beneficiary, dated
on or about the date set forth above, the repayment of which by Trustor is secured by this Deed
of Trust ("Agency Note"), and (ii) to the Agency Agreements which are described in the Agency
Note.
The parties hereto agree:
1. Propert . The estate subject to this Deed of Trust is Trustor's fee 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 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 Agency
Agreements.
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
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.
882/015610-0063
325173.04 al1/19/02
4. Subordination. Beneficiary agrees to subordinate this Deed of Trust to Trustor's
construction loan, provided that (i) the maximum cumulative principal amount of the
construction loan shall not exceed ninety percent (90%) of the lender's appraised value of the
Property upon completion of the affordable housing project described in the Agency Agreements
("Project"), which amount shall be verified in writing to Beneficiary's Executive Director's
reasonable satisfaction; (ii) the loan(s) shall obligate Trustor to expend loan proceeds for no
other purpose than the Project; and (iii) the loan(s) shall provide that any notice of Trustor breach
or default shall also be sent to the Beneficiary at the address listed in Section 10 and that upon
receipt of such notice, Beneficiary shall have the right to (A) cure the noticed breach or default,
(B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the
Property from Trustor subject to the construction lender's deed of trust, without the consent of
Trustor or the holder of the construction lender's deed of trust, and that Beneficiary's exercise of
the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to
accelerate the amounts due under the loan. Beneficiary agrees that the lender may, during the
period of default, proceed with its rights and remedies against Trustor as a result of such
default subject only to the cure rights provided above. Beneficiary's Executive Director ii
hereby authorized to make technical modifications to the requirements set forth above for
any subordination executed pursuant to this Section to accommodate the reasonable
requests of a lender. In agreeing to provide the subordination referred to in the preceding
sentence, Beneficiary hereby incorporates the finding required to be made in accordance with
Health and Safety Code Section 33334.14.
5. Incorporation. All terms of the Agency Note, Agency Agreements, 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.
6. 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.
7. 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.
8. 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
2r4
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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 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 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.
9. 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.
10. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary
addressed to:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92263
Attn: Executive Director
[SIGNATURE ON NEXT PAGE]
IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's
acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set
forth above.
TRUSTOR:
r);-ir
882/015610-0063
325173.04 all/19/02
APARTMENTS AT LA QUINTA VILLAGE, LP, a
California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
882/015610-0063 4 ? i 1
325173.04 all/19/02
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, , personally
appeared , personally known to me (or
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.
Witness my hand and official seal.
Notary Public
[SEAL]
882/015610-0063 %)
325173.04 al1/19/02
EXHIBIT "G"
AGENCY REGULATORY AGREEMENT
[SEE FOLLOWING PAGES]
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code 6103)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement") is made and entered into this day of ,
("Effective Date"), by and between LA QUINTA REDEVELOPMENT AGENCY, a
public body, corporate and politic ("Agency") and APARTMENTS AT LA QUINTA
VILLAGE, LP, a California limited partnership ("Participant").
RECITALS:
A. Participant is the owner of fee title to that certain real property more particularly
described in Attachment No. 1, attached hereto and incorporated by reference herein (the "Site").
B. Pursuant to an Affordable Housing Agreement, by and between Participant and
Agency, dated (the "AHA"), Agency has agreed to provide financial
assistance to Participant in the sum of Three Million Dollars ($3,000,000) (the "Agency Loan")
for the purpose of (i) reimbursing Participant for a portion of Participant's purchase price for the
Site and (ii) Participant's subsequent construction thereon of a rental apartment complex (the
"Project"). The AHA requires Participant to enter into this Agreement, which provides, among
other requirements, that the rental and occupancy of not fewer than seventy-five (75) of the
apartment units within the Project be rented to and occupied by persons and families whose
household income does not exceed 120% of the median income for Riverside County, in effect
from time to time.
C. Reference is also made to the following documents, of even date herewith:
(i) Note, by Participant as Maker and borrower in favor of the Agency as
lender, ("Agency Note"). The Agency Note evidences the Agency Loan.
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(ii) Deed of Trust with Assignment of Rents, by and between Participant as
borrower and Agency as beneficiary, and recorded in the Office of the Riverside County
Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of
the Agency Note.
The AHA and both of the foregoing listed documents are referred to herein collectively
as the "Agency Agreements." The Agency Agreements are incorporated herein as if fully set
forth.
D. Pursuant to the AHA and the Agency Agreements, Participant has agreed to
rehabilitate the Site and develop thereon, and thereafter maintain, a rental housing project with
not fewer than seventy-five (75) units restricted to rental and occupancy to persons and families
whose household income does not exceed 120% of the median income for Riverside County.
E. Agency and Participant now desire to place restrictions upon the use and
operation of the Site, in order to ensure that the Site shall be operated continuously, for a period
of fifty-five (55) years, as a rental apartment complex in accordance with the terms hereof.
AGREEMENT:
NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for
themselves, their heirs, executors, administrators, successors and assigns, and all persons
claiming under or through them, that, for a term equal to fifty-five (55) years commencing upon
the date of the recordation of the Release of Construction Covenants for the Site in accordance
with the AHA, as follows:
1.0 DEFINITIONS.
1.1 Riverside County Median Income. For purposes of this Agreement, the
"Riverside County Median Income" as of any date shall be determined by reference to the
regulations published by the California Department of Housing and Community Development
pursuant to Health and Safety Code Section 50093, or its successor, as of such date.
1.2 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental
apartment dwelling unit on the Site.
1.3 Restricted Unit. As used in this Agreement, the term "Restricted Unit" shall
mean not fewer than seventy-five (75) Units to be rented to and occupied by Eligible Tenants.
1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer
to a Moderate Income Tenant.
1.5 Moderate Income. As used in this Agreement, the term "Moderate Income" shall
mean household income, adjusted for family size, which does not exceed one hundred twenty
percent (120%) of the Riverside County Median Income.
1.6 Moderate Income Tenant. As used in this Agreement, the term "Moderate
Income Tenant" shall mean a tenant whose household income does not exceed Moderate Income
882/015610-0063 f ,9
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and who is otherwise eligible to rent, and does rent, a Restricted Unit and thus is an Eligible
Tenant for a Restricted Unit.
1.7 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall
mean an annual rent amount that does not exceed the maximum percentage of income that can be
devoted to rent by a Moderate Income Tenant as set by California law.
1.8 Unrestricted Unit. As used in this Agreement, the term "Unrestricted Unit" shall
mean a Unit that is not a Restricted Unit, i.e., a Unit that is not subject to the affordability
covenants that apply to the Restricted Units.
2.0 RESIDENTIAL RENTAL PROPERTY.
2.1 Construction of the Project on the Site. Participant shall construct the Project on
the Site in accordance with the Agency Agreements, including the Schedule of Performance set
forth in the AHA, for the purpose of providing the Restricted Units described herein and in the
Agency Agreements. The Project shall be owned, managed, and operated as a rental apartment
project, with not fewer than seventy-five (75) Units rented and occupied as Restricted Units as
provided in this Agreement.
2.2 Facilities. All of the dwelling units in the Project shall contain facilities for
living, sleeping, eating, cooking and sanitation in accordance with the this Agreement, the AHA,
the Agency Agreements, and all of the permits and approvals for the Project.
2.3 Residential Use. Without the Agency's prior written consent, which consent may
be given or withheld in its sole and absolute discretion, none of the dwelling 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 Units be used for day care facilities or as a place of business except as
may otherwise be allowed by applicable law.
2.4 Conversion of Units. No part of the Project will at any time be owned by a
cooperative housing corporation, nor shall the Participant take any steps in connection with the
conversion to such ownership or uses to condominiums, or to any other form of ownership,
without the prior written approval of Agency which approval may be given or withheld in its sole
and absolute discretion.
2.5 Preference to Eligible Tenants. All of the dwelling units will be available for
rental in accordance with the terms of this Agreement, and the Participant shall not give
preference to any particular class or group in renting the dwelling units in the Project, except to
the extent that the Restricted Units are required to be leased or rented to Eligible Tenants and
except as provided in Section 3.5 below.
2.6 Resident Manager and Staff Units. A resident manager or staff unit or units may
be counted as a Restricted Unit only if the tenants of such Unit(s) are Eligible Tenants.
882/015610-0063 4
325173.04 a11/19/02
2.7 Liability of Participant. Participant and any manager it employs shall not incur
any liability under this Agreement as a result of fraud or intentional misrepresentation by a
tenant.
3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS.
Participant hereby represents, warrants, and covenants as follows:
3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of
this Agreement, the Restricted Units shall be continuously occupied or held vacant and available
for occupancy by Eligible Tenants.
3.2 Rental Rates. Participant hereby agrees to and shall rent Restricted Units
occupied by Eligible Tenants at no greater than Affordable Rent.
3.3 Occupancy By Eligible Tenant. A Restricted Unit occupied by an Eligible Tenant
who qualified as a Moderate Income Tenant at the commencement of the occupancy shall be
treated as occupied by an Eligible Tenant at such income level until a recertification of such
Eligible Tenant's income in accordance with Section 3.7 below demonstrates that such tenant no
longer qualifies as an Eligible Tenant at that income level. A Restricted Unit previously
occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible
Tenant until the Restricted Unit is reoccupied, provided Participant netiffes Age rt of
suehvaea-ney „within five (5) business days _the -e fter-, u:.0 uses its commercially reasonable
efforts to re -lease the vacant Restricted Unit to an Eligible Tenant. Any vacated Restricted Unit
shall be held vacant until re -leased to an Eligible Tenant, unless there are sufficient numbers of
Eligible Tenants then leasing and occupying Units.
3.4 Income Computation rye and Certification. Immediately prior to an
Eligible Tenant's occupancy of a Restricted Unit, Participant shall obtain and Maintain on file an
Income Computation and Certification fefm (whieh fafm shall be appr-eved in .,dvaneo- the
n eney Exee tive Director-) Form in the form attached hereto and incorporated herein as
Attachment No. 2 from each such Eligible Tenant dated immediately prior to the date of initial
occupancy in the Project by such Eligible Tenant. In addition, Participant shall provide such
further information as may be required in the future by the Agency for purposes of verifying a
tenant's status as an Eligible Tenant. Participant shall use its best 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 applicant's current employer; (iii) obtain an
income verification form from the Social Security Administration and/or California Department
of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is
unemployed or did not file a tax return for the previous calendar year, obtain other verification of
such applicant's income as is satisfactory to the Agency; and (v) obtain such other information as
may be requested by the Agency. A eepy e Participant shall maintain in its records each
such Income Computation and Certification shall be filed —with the Ageney pnof t Ih-
eeetipaney of a v tr-icted Unit by an Eligibie Tenant=a:henever-pesrible, but in ne event '~,
than thii4. (30) a., ^fto initial eeeupaney b said ten uiForm obtained pursuant to this
i�.
section for a minimum of five (51 years.
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3.5 Rental Priority. During the term of this Agreement, Participant shall use its
reasonable commercial efforts to lease Restricted Units to credit -worthy Eligible Tenants in the
following order of priority: (i) displaced persons entitled to a preference pursuant to California
Health and Safety Code Section 33411.3 or successor statute; and (ii) other persons meeting the
eligibility requirements of this Agreement. Participant shall, and Agency may, maintain a list
(the "Housing List") of persons who have notified Participant and/or Agency of their desire to
rent a Restricted Unit in the Project and who have incomes which would qualify them as an
Eligible Tenant, and Participant shall offer to rent units on the above -referenced priority basis}
provided however, that Participant shall not be required to prequalify persons on the
Housing List. Should multiple tenants be equally eligible (as to income, credit history, and
other nondiscriminatory criteria) and qualified to rent a unit, Participant shall rent available
Restricted Units to Eligible Tenants on a first -come, first -served basis.
3.6 Recertification. Immediately prior to the first anniversary date of the occupancy
of a Restricted Unit by an Eligible Tenant, and on each anniversary date thereafter, Participant
shall recertify the income of such Eligible Tenant by obtaining a completed Income COMptitatiOn
and Gertifie tie Recertification Form, in the form attached hereto and incorporated herein
as Attachment No. 3, based upon the current income of each occupant of the Restricted Unit.
If, upon recertification, the occupants do not qualify as an Eligible Tenant (or the occupants fail
to provide a completed Income Computation and Gei4i ieation Recertification Form to
Participant) such occupants may be allowed to remain but their Unit shall be redesignated as an
Unrestricted Unit. In that event, Participant shall 0) redesignate the next vacant Unrestricted
Unit as a Restricted Unit Y • (ii) J of O ^J, " r- tin that it is redesignating stieh vacant
T T * ' * a Unit as a n * ' a Unit, it, and 44) thereafter rent such redesignated unit to an
Eligible Tenant; provided, however, that Participant shall not be required to redesignate the next
vacant Unrestricted Unit as a Restricted Unit if, prior to the time an Unrestricted Unit becomes
vacant, Participant identifies an occupant of an Unrestricted Unit as qualifying as an Eligible
Tenant, completes an Income Computation rertifieate Recertification Form and any other
required documentation to confirm that such occupant(s) is an Eligible Tenant, redesignates that
unit as a Restricted Unit, and notifies the Agency in writing of such redesignation. Paftieipant
shall pr-evide the Ageney with a eepy of eaeh such r-eeeftifieatien with the flext s bmissien of
Geftifieate f Continuing Gemplianee pursuant to Se et; Each lease agreement
with an Eligible Tenant shall reference this Section and inform such Eligible Tenant of the
recertification requirements herein and the ramifications for failing to comply therewith.
3.7 r'�eate Certification of Continuing Program Compliance. Upon the issuance
of the Release of Construction Covenants, and by September 1 following the end of the
immediately preceding fiscal year ending on June 1, Participant shall annually advise the Agency
of the occupancy of the Project by delivering a Ceftifieate Certification of Continuing Program
Compliance in the form required b ^ (or eemplying with this se,etio ;f n feffli is
preuided) attached hereto and incorporated herein as Attachment No. 4, stating (i) the
dwelling units of the Project which were Restricted Units during such period (including an
explanation for any of the Units which were redesignated during such period) and (ii) that to
the knowledge of Participant either (a) no unremedied default has occurred under this
Agreement, or (b) a default has occurred, in which evert the Gertifieate Certification shall
describe the nature of the default and set forth the measures being taken by the Participant to
remedy such default. Participant shall pay to Agency an annual fee pursuant to Health and
4— _
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Safety Code Section 33418(c) which shall not exceed FIVE HUNDRED DOLLARS ($500) as
such amount shall be permitted to increase by the Consumer Price Index ("CPI") published by
the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and
Clerical Workers, Los Angeles -Long Beach -Anaheim Average, All Items (1984=100), from and
after the date of this Agreement, or, if the CPI is discontinued, such official index as may then be
in existence and which is most nearly equivalent to the CPI.
3.8 Maintenance of Records. Participant shall maintain complete and accurate
records pertaining to the Units, and shall permit any duly authorized representative of the
Agency to inspect the books and records of Participant pertaining to the Project including, but
not limited to, those records pertaining to the occupancy of the Restricted Units.
3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision
to the effect that Participant has relied on the income certification and supporting information
supplied by the tenant in determining qualification for occupancy of the unit, and that any
material misstatement in such certification (whether or not intentional) will be cause for
immediate termination of such lease.
3.10 Remedy For Excessive Rent Charge.
3.10.1 It shall constitute a default for Participant to charge or accept for a
Restricted Unit rent amounts in excess of the amount provided for in Section 3.2 of this
Agreement. In the event that Participant charges or receives such higher rental amounts, in
addition to any other remedy Agency shall have for such default, Participant shall be required to
pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of
the amount permitted pursuant to this Agreement.
3.10.2 It shall constitute a default for Participant to knowingly (or without
investigation as required herein) rent any Restricted Unit to a tenant who is not an Eligible
Tenant. In the event Participant r-ents a v t + a Unit •t t an ineligible Ve::µ::t violates this
ti n, in addition to any other equitable remedy Agency shall have for such default,
Participant, for each separate violation, shall be required to pay to Agency an amount equal to (i)
two times the greater of (A) the total rent Participant received from such ineligible tenant, or (B)
the total rent Participant was entitled to receive for renting that Restricted Unit, plus (ii) any
relocation expenses incurred by Agency or the City of La Quinta as a result of Participant having
rented to such ineligible person: provided, however, that in such event Participant may
permit the ineligible tenant to remain in the Restricted Unit if Participant redesignates an
Unrestricted Unit as a Restricted Unit in accordance with the process described in Section
3.6 hereof.
3.10.3 It shall constitute a default for Participant to knowingly (or without
investigation as required herein) rent any of the Restricted Units in violation of the leasing
preference requirements of Sections 3.5 of this Agreement. In the event Participant reams -a unit
violationin fthe leasing prof r-e-, re^--oment-s violates this Section, in addition to any other
equitable remedy Agency shall have for such default, Participant, for each separate violation,
shall be required to pay Agency an amount equal to two (2) months of rental charges. The terms
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of this Section shall not apply if Participant rents to an ineligible person as a result of such
person's fraud or misrepresentation.
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN
SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A
REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT
AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT
SET FORTH IN SECTIONS 3.10.1 THROUGH 3.10.3, CONSIDERING ALL
OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF
THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE
AMOUNTS TO THE RANGE OF HARM TO AGENCY AND
ACCOMPLISHMENT OF AGENCY'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 3.10
SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE
DEFAULTS SET FORTH IN THIS SECTION 3.10, BUT NOTHING IN THIS
SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY
FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT
REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF
THE NOTE OR OTHER OF THE AGENCY AGREEMENTS. IN PLACING
ITS INITIAL 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 AGREEMENT.
PARTICIPANT'S INITIALS: AGENCY'S INITIALS:
4.0 MAINTENANCE.
4.1 Maintenance Obligation. Participant agrees to and shall maintain all interior and
exterior improvements, including landscaping, on the Site in good condition and repair (and, as
to landscaping, in a healthy condition) and in accordance with all of the permits and approvals
for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all
federal, state, county, municipal, and other governmental agencies and bodies having or claiming
jurisdiction and all their respective departments, bureaus, and officials. Agency places prime
importance on quality maintenance to protect its investment and to ensure that all Agency -
assisted affordable housing projects within the City are not allowed to deteriorate due to below -
average maintenance. Normal wear and tear of the Site improvements will be acceptable to
Agency assuming Participant agrees to perform all necessary Site improvements to assure the
Site is maintained in good condition. Maintenance requirements shall include that: (a) no
improperly maintained landscaping shall be visible from public rights -of -way, including (i) no
882/015610-0063 g'
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lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other
plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or
shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be
likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and/or other
vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded
furniture, appliances, or other household equipment stored in yard areas for periods exceeding
one (1) week, (ii) no packing boxes, lumber, trash, dirt, or other debris stored in yards for periods
exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no
unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from
public property or neighboring properties, and (iv) no vehicles parked or stored in areas other
than approved parking areas; (c) no buildings may be left in an unmaintained condition,
including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that
constitutes an unsightly appearance that detracts from the aesthetics or property value of the
subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped,
cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or
malicious mischief, and (v) no graffiti or accumulation of waste or debris. Participant shall make
all repairs and replacements necessary to keep the improvements in good condition and repair
and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping
with comparable approved materials. In the event that Participant breaches any of the covenants
contained in this Section and Participant does not commence to cure such breach within five (5)
days after written notice from Agency (with respect to graffiti, debris, waste material,
landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with
respect to building improvements), and after commencing the cure to diligently prosecute such
cure to completion, then Agency, in addition to whatever other remedy it may have at law or in
equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and
work necessary to protect, maintain, and preserve the improvements and landscaped areas on the
Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures
arising from such acts and work of protection, maintenance, and preservation by Agency and/or
costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall
be promptly paid by Participant to Agency upon demand.
4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty
(30) days after Participant's receipt of notice thereof, the same shall be deemed delinquent, and
the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until
paid. Any and all delinquent amounts, together with said interest, costs and reasonable
attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of
Participant, and the rents, issues and profits of such property. Agency may bring an action at law
against Participant to pay any such sums or foreclose the lien against Participant's property
interests. Any such lien may be enforced by sale by the Agency following recordation of a
Notice of Default of Sale given in the manner and time required by law as in the case of a deed
of trust; such sale to be conducted in accordance with the provisions of Section 2924, et M., of
the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of
trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this
Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust.
5.0 MANAGEMENT.
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5.1 Gross Mismana e� ment. In the event of "Gross Mismanagement" (as that term is
defined below) of the Project, Agency shall have the authority to require that such Gross
Mismanagement cease immediately, and further to require the immediate replacement of the
manager. Agency shall provide written notice to Participant of the event(s) of Gross
Mismanagement occurring and Participant shall have five (5) business days after receipt of such
notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified
in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect
such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to
thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of
this Agreement the term "Gross Mismanagement" shall mean management of the Project in a
manner which materially violates the terms and/or intention of this Agreement to operate an
affordable rental housing complex of the highest standard, and shall include, but is not limited to,
the following:
5.1.1 Knowingly leasing Restricted Units to ineligible tenants or tenants whose
income exceeds the prescribed levels;
5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels
without taking immediate steps to stop such overcrowding;
5.1.3 Failing to timely maintain the Project and the Site in the manner required
by this Agreement or failing to submit materially complete reports;
5.1.4 Failing to timely submit the reports as required by this Agreement;
5.1.5 Fraud in connection with any document or representation relating to this
Agreement or embezzlement of Project monies; and
5.1.6 Failing to fully cooperate with law enforcement in maintaining a crime -
free environment on the Site.
5.2 Lease Approval. The initial form lease agreement to be used by Participant for
the rental of any of the Units ("Lease Agreement"), and any changes to such form Lease
Agreement regarding the provisions required by Section 3.6 and Section 3.9 to be included in the
form Lease Agreement shall be reasonably approved in advance by Agency's Executive Director
prior to the initial use of the lease form and prior to the first use of the changed form.
6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS.
6.1 Compliance With Laws. Participant shall comply with (1) all ordinances,
regulations and standards of the City, Agency, County of Riverside, any regional governmental
entity, State of California, and federal government applicable to the Property; (ii) all rules and
regulations of any assessment district of the City with jurisdiction over the Property; and (iii) all
applicable labor standards of California law and federal law, inelu inn the ..^,,. ent ofpfevailing
wages; and (iv) the requirements of California law and federal law with respect to the
employment of undocumented workers or illegal aliens.
6.2 Environmental Matters.
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6.2.1 Definitions. For the purposes of this Agreement, unless the context
otherwise specifies or requires, the following terms shall have the meanings herein specified:
6.2.1.1 The term "Hazardous Materials" shall mean any substance,
material, or waste which is or becomes regulated by any local governmental authority, the
County of Riverside, the State of California, a regional governmental authority, or the United
States Government, including, but not limited to, any material or substance which is (i) defined
as a "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) friable asbestos, (vii) polychlorinated byphenyls,
(viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix)
designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C.
1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et seg. (42 U.S.C. 6903) or (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601 et seq.
6.2.1.2 The term "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing or hereafter occurring) of the improvements, facilities,
soil, groundwater, air or other elements on, in or of the Site 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 Site.
6.2.1.3 The term "Governmental Requirements" shall mean all past,
present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the
United States, the state, the county, the city, or any other political subdivision in which the Site is
located, and any other state, county city, political subdivision, agency, instrumentality or other
entity exercising jurisdiction over the Site.
6.2.2 Indemnity. Participant shall save, protect, defend, indemnify and hold
harmless Agency and the City and their respective officers, officials, 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 Agency or City or their respective officers, officials, 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) Participant's placement on or under
017
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the Site of any Hazardous Materials or Hazardous Materials Contamination on or after the date
of this Agreement, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from
the Site of any Hazardous Materials or Hazardous Materials Contamination on or after the date
of this Agreement, or (iii) any Liabilities incurred under any Governmental Requirements
relating to the acts described in the foregoing clauses (i) and (ii); provided, however. that the
same shall not apply to acts or omissions following Agency's or City's conduct of a
foreclosure sale or acceptance of a deed in lieu thereof.
6.3 Duty to Prevent Hazardous Material Contamination. Participant 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, Participant 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.
6.4 Obligation of Participant to Remediate Premises. Notwithstanding the obligation
of Participant to indemnify Agency, City, and their respective officers, officials, members,
employees, agents, and representatives pursuant to Section 6.2.2, Participant 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 Site for the purposes contemplated by this
Agreement and the AHA, which requirements or necessity arise from the presence upon, about
or beneath the Site, prior to Agency's or City's conduct of a foreclosure sale or acceptance of
a deed in lieu thereof, of any Hazardous Materials or Hazardous Materials Contamination for
which Participant is responsible. Such actions shall include, but not be limited to, the
investigation of the environmental condition of the Site, the preparation of any feasibility studies
or reports and the performance of any cleanup, remedial, removal or restoration work.
6.5 Environmental Inquiries. Participant, 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
Participant 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 Agency's Executive Director, and provide to him/her a
copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries
relating to the Site, 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 Participant shall report to the Executive
Director, as soon as possible after each incident, any unusual, potentially important incidents.
In the event of a responsible release of any Hazardous Materials into the environment,
Participant 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,
Participant shall furnish to the Executive Director a copy or copies of any and all other
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325173.04 al 1/19/02 12
environmental entitlements or inquiries relating to or affecting the Site 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.
7.0 INSURANCE.
7.1 Duty to Procure Insurance. Participant, for the term of this Agreement, shall
procure and keep in full force and effect or cause to be procured and kept in full force and effect
for the mutual benefit of Participant and Agency, and shall provide Agency evidence reasonably
acceptable to Agency Executive Director, insurance policies meeting the minimum requirements
set forth below:
7.1.1 Commercial General Liability insurance with respect to the Site and the
operations of or on behalf of Participant, in an amount not less than One Million Dollars
($1,000,000) per occurrence combined single limit including products, completed operations,
contractual, bodily injury, personal injury, death and property damage liability per occurrence,
subject to such increases in amount as Agency may reasonably require from time to time;
provided, that the percentage increase in coverage shall not be required to exceed the percentage
increase in the Consumer Price Index published by the United States Department of Labor,
Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long
Beach -Anaheim Average, All Items (1984 = 100) (the "Index"), from and after the date of this
Agreement, or, if said Index is discontinued, such official index as may then be in existence and
which is most nearly equivalent to said Index (the "CPI Adjustment"). Unless otherwise
approved in advance by the Agency Executive Director, the insurance to be provided by
Participant may provide for a deductible or self -insured retention of not more than Ten Thousand
Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic
increases in the minimum amount of total insurance coverage set forth above.
7.1.2 With respect to the improvements and any fixtures and furnishings to be
owned by Participant on the Site, 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 rental apartment projects of this
size and type in the counties of Los Angeles, Orange County. Riverside, and San
Bernardino. Agency shall be a loss payee under such policy or policies and such insurance
shall contain a replacement cost endorsement.
7.2 Policy Requirements. All policies of insurance required to be carried by
Participant shall meet the following requirements and contain the following endorsements,
provisions, or clauses (as applicable):
7.2.1 The policies shall be written by responsible and solvent insurance
companies licensed in the State of California and having policyholders' rating of A or better, in
the most recent addition of `Best's Key Rating Guide -- Property and Casualty." A copy of each
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325173.04 a/9/02
paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a
certificate of the insurer, certifying that such policy has been issued, providing the coverage
required herein, and containing the provisions specified herein, shall be delivered to Agency on
or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30)
days prior to the expiration of coverage. Agency may, at any time, and from time to time,
inspect and/or copy any and all insurance policies required to be procured by Participant
hereunder. In no event shall the limits of any policy be considered as limiting the liability of
Participant hereunder.
7.2.2 The insurer shall not cancel or materially alter the coverage provided by
such policy in a manner adverse to the interest of the insured without first giving Agency a
minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and
7.2.3 A waiver by the insurer of any right to subrogation against Agency and
City, and their respective officers, officials, members, employees, agents, and representatives,
which arises or might arise by reason of any payment under such policy or policies or by reason
of any act or omission of Agency or City or their respective officers, officials, members,
employees, agents, or representatives.
7.2.4 The Agency and the City and their respective officers, officials, members,
employees, agents, and representatives shall be named as additional insureds on the Commercial
General Liability policies.
7.2.5 Coverage provided by these policies shall be primary and non-
contributory to any insurance carried by the Agency or City or their respective officers, officials,
members, employees, agents, or representatives.
7.2.6 Failure to comply with reporting provisions shall not affect coverage
provided to Agency and its officers, officials, members, employees, agents, or representatives.
7.3 Failure to Procure Insurance. If Participant fails to procure and maintain the
above -required insurance despite its availability, then Agency, in addition to any other remedy
which Agency may have hereunder for Participant's failure to procure, maintain, and/or pay for
the insurance required herein, may (but without any obligation to do so) at any time or from time
to time, after thirty (30) days written notice to Participant, procure such insurance and pay the
premiums therefor, in which event Participant shall immediately repay Agency all sums so paid
by Agency together with interest thereon at the maximum legal rate.
8.0 OBLIGATION TO REPAIR.
8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance.
Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered
wholly or partly uninhabitable by fire or other casualty required to be insured against by
Participant, Participant shall promptly proceed to obtain insurance proceeds to the extent made
available by the senior lender, if any, and 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 the Project is required to be
maintained in pursuant to this Agreement, whether or not the insurance proceeds are sufficient to
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cover the actual cost of repair, replacement, or restoration, and Participant shall complete the
same as soon as possible thereafter so that the Project can continue to be operated and occupied
as an affordable housing project in accordance with this Agreement. Subject to extensions of
time for "Enforced Delay" as defined in Section 22 of this Agreement, in no event shall the
repair, replacement, or restoration period exceed one (1) year from the date Participant obtains
insurance proceeds unless the Agency Executive Director, in his or her sole and absolute
discretion, approves a longer period of time. Agency shall cooperate with Participant, at no
expense to Agency, in obtaining any governmental permits required for the repair, replacement,
or restoration and, upon issuance of such permits Agency shall promptly release control of any
insurance proceeds within Agency's control. If, however, the then -existing laws of any other
governmental agencies with jurisdiction over the Property do not permit the repair, replacement,
or restoration, Participant may elect not to repair, replace, or restore the Project by giving notice
to Agency (in which event Participant shall be entitled to all insurance proceeds but Participant
shall be required to remove all debris from the Property) or Participant may reconstruct such
other improvements on the Property as are consistent with applicable land use regulations and
approved by the City, Agency, and the other governmental agency or agencies with jurisdiction.
In such event, the Agency Agreements, including this Agreement, shall automatically terminate
and Agency shall cooperate to remove the Agency Agreements from title.
If Participant fails to obtain insurance as required by this Agreement (and Agency has not
procured such insurance and charged Participant for the cost), Participant shall be obligated to
reconstruct and repair any partial or total damage to the Project and improvements located on the
site in accordance with this Section 8.1.
8.2 Continued Operations. During any period of repair, Participant shall continua,, or
cause the continuation of, the operation of the apartment complex on the Site to the extent
reasonably practicable from the standpoint of prudent business management. The number of
Restricted Units shall be reduced in proportion to the number of Units not habitable as a result of
the casualty during such period of repair.
8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance.
If the improvements comprising the Project are completely destroyed or substantially damaged
by a casualty for which Participant is not required to (and has not) insured against, then
Participant shall not be required to repair, replace, or restore such improvements and may elect
not to do so by providing Agency with written notice of election not to repair, replace, or restore
within ninety (90) days after such substantial damage or destruction. In such event, (i)
Participant shall remove all debris from the Property, and (ii) the Agency Agreements, including
this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency
Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty
not required to be (and not) covered by insurance shall mean damage or destruction which is fifty
percent (50%) or more of the replacement cost of the improvements comprising the Project. In
the event Participant does not timely elect not to repair, replace, or restore the improvements as
set forth in the first sentence of this Section 8.3, Participant shall be conclusively deemed to have
waived its right not to repair, replace, or restore the improvements and thereafter Participant shall
promptly commence and complete the repair, replacement, or restoration of the damaged or
destroyed improvements in accordance with Section 8.1 above and continue operation of the
not
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apartment complex during the period of repair (if practicable) in accordance with Section 8.2
above.
9.0 LIMITATION ON TRANSFERS.
9.1 Sale or Transfer of the Project. Participant covenants that during the term of this
Agreement Participant shall not assign this Agreement or transfer the Site or any of its interests
therein except as provided in this Section 9.0.
9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include
any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this
Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to
any person, entity, or group of persons or entities acting in concert of more than fifty percent
(50%) (in the aggregate) of the present ownership and/or control of any person or entity
constituting Participant, taking all transfers into account on a cumulative basis. In the event any
entity constituting Participant, or the constituent partners or members of Participant or any
successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the
issued and outstanding capital stock of such corporation, or of beneficial interests of such trust;
in the event that any entity constituting Participant, or the constituent partners of Participant or
any successor of Participant is a limited or general partnership, such transfer shall refer to the
transfer of more than fifty percent (50%) of such limited or general partnership interest; in the
event that any entity constituting Participant, or the constituent members of Participant or any
successor of Participant is a limited liability company, such transfer shall refer to the transfer of
more than fifty percent (50%) of such membership interest; in the event that any entity
constituting Participant, or the constituent partners of Participant or any successor of Participant
is a joint venture, such transfer shall. refer to the transfer of more than fifty percent (50%) of the
ownership and/or control of any such joint venture partner, taking all transfers into account on a
cumulative basis.
9.3 Agency Approval of Transfer Required. Except as set forth below, Participant
shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the
Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law,
without the prior written approval of Agency, which approval shall not be unreasonably
withheld, conditioned, or delayed, and any such purported Transfer without such approval shall
be null and void. In addition to the foregoing and notwithstanding anything in this Section to the
contrary, so long as the Project is encumbered by a deed of trust (other than a deed of trust the
beneficiary of which is the Agency), any proposed transferee or assignee must also receive the
prior written consent of the beneficiary of such deed of trust, if required by such deed of trust,
before Agency shall approve such transfer or assignment; provided, however, that such consent
of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the
foregoing, the following types of transfers shall not require Agency approval but as with all
Transfers shall be subject to Section 9.4:
(a) transfers to any entity or entities owned or controlled it ctly or
indirectly by Participant or any of its respective shareholders or partners,
or to any parent corporation or subsidiary corporation of any partners of
Participant, or to any entity or entities controlled by any such shareholders
n/
r)
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325173.04 al1/19/02
or partners, or to any members of any entity which is a partner of
Participant or to any of its constituent members or partners;
(b) any mortgage, deed of trust, sale and leaseback, or other form of
conveyance required for any reasonable method of financing or
refinancing the acquisition of the Site and development of the Project
thereon, including all direct and indirect costs related thereto; or
(c) the leasing of individual rental units on the Site provided that such leasing
is in accordance with the terms of this Agreement;
(d) Transfers resulting from the death or mental or physical incapacity of an
individual;
(e) Transfers in trust for the benefit of a spouse, children, grandchildren, or
other family member, or for charitable purposes;
(f) Transfers of stock in a publicly -held corporation or of the beneficial
interest in ay publicly -held partnership or real estate investment trust; or
(g) the conveyance or dedication of portions of the Site to the City or other
governmental entity, or the granting of easements or permits to facilitate
the development of the Site.
Agency shall reasonably consider approving a transfer to an entity not owned or
controlled by Participant provided such entity has both of the following: (A) the financial
strength and capability, equal to or greater than the financial strength and capability of
Participant, to perform Participant's obligations hereunder; and (B) the experience and expertise,
at levels equal to or greater than the experience and expertise of Participant, in the planning,
financing, development, ownership and operation of similar projects.
9.4 Assignment and Assumption Agreement. In the absence of specific written
agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or
this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve
Participant or any successor party from the obligation to timely complete construction of the
Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be
effective unless and until Participant and the transferee or successor party execute and deliver to
Agency a binding assignment and assumption agreement in a form reasonably approved by
Agency's legal counsel.
9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a
transferee or assignee that either, (i) has been approved by the Agency Executive Director or (ii)
is a transferee of a Transfer not requiring the approval of the Agency Executive Director
pursuant to the terms of this Agreement, and in both the cases described in the foregoing clauses
(i) and (ii) has executed and delivered to the Agency Executive Director an assignment and
assumption agreement pursuant to Section 9.4.
10.0 EVENTS OF DEFAULT BY PARTICIPANT.
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325173.04 al1/19/02 17
Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one
or more of any of the following events shall constitute an "Event of Default" by Participant
hereunder if Participant shall have not cured, corrected, or remedied such failure within, unless a
shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty
(30) days following the service on Participant of a written notice from Agency specifying the
failure complained of, or if it is not practicable to cure or remedy such failure within such thirty
(30) day period (which impracticality shall not apply to monetary defaults), within such longer
period as shall be reasonable under the circumstances provided that Participant has commenced
to cure within the same thirty (30) day period and has diligently prosecuted such cure to
completion:
10.1 Construction of the Project on the Site has not commenced within the time set
forth in the AHA; or
10.2 Construction of the Project on the Site is not completed within the time set forth
in the AHA; or
10.3 Participant shall abandon or surrender the Site; or
10.4 Participant is in default of the Note and has not cured such default within the cure
period applicable to such default as set forth in the Note; or
10.5 Participant is in material default of any of the covenants, terms or provisions of
this Agreement or any of the Agency Agreements; or
10.6 Participant voluntarily files or has involuntarily filed against it any petition under
any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60)
days thereafter; or
10.7 Participant is adjudicated a bankrupt; or
10.8 Participant makes a general assignment for the benefit of creditors in violation of
the terms of this Agreement or any of the Agency Agreements.
10.9 Participant is in default of its obligations nder that eei4ain Agfeement Of
Pumhase and Sale and joint Eser-ow lnstfiaetiens entered into by and between Pal4ieipant-,-as
"Buyer-,' any of the following: (i) the covenants and restrictions contained in the grant
deed pursuant to which Landaq Inc., a Delaware corporation ("Landaq") as "Seller-",
(i) the gfant deed pursuant to whieh r ^^a^^"Seller" conveyed the Site to Participant r n
Deed"), which Grant Deed was recorded on October 24, 2002, as Instrument No. 2002-
600846, in the Official Records of the County of Riverside ("Official Records"l; (ii) that
certain Declaration of Development Covenants, Conditions and Restrictions entered into and
recorded on October 24, 2002, as Instrument No. 2002-600848, in
the Official Records , by and between Landaq, as the "Company," and
Participant, as the "Builder," which sets forth certain development and use restrictions with
which Participant is required to comply; and or (Ili) that certain Option Agreement and Escrow
882/015610-0063
325173.04 al 1/19/02 18 !� ��
Instructions entered into on or about October 24, 2002, by and between
Landaq, as the "Company," and Participant, as the "Builder," which provides for Participant's
grant to Landaq of an option to repurchase the Site in accordance with the terms thereof, as
memorialized by that certain Memorandum of Option entered into by those parties and recorded
on October 24, 2002, as Instrument No. 2002-600849, in the Official
Records. of the County f Rive. -side
11.0 REMEDIES OF AGENCY.
In the event Participant defaults in the performance or observance of any covenant,
agreement or obligation of Participant pursuant to this Agreement, and if such default remains
uncured for a period of thirty (30) days after written notice thereof shall have been given by
Agency (or such lesser period as may apply under Section 4.1), or, in the event said default
cannot be cured within said time period, Participant has failed to commence to cure such default
within the applicable time period and diligently prosecute said cure to completion, then Agency
shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one
or more of the following steps:
11.1 With respect to (i) the physical condition of the Site, or (ii) Participant's Gross
Mismanagement of the Project, enter the Site and correct or cause to be corrected said default
and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to
the account of Participant, which charge shall be due and payable within thirty (30) days after
presentation by Agency of a statement of all or part of said costs, and if such bill is not timely
paid then to place a lien on the Site for said amount due plus interest at the maximum legal rate;
11.2 Correct or cause to be corrected said default and pay the costs thereof (including
costs incurred by Agency in enforcing this provision) from the proceeds of any insurance;
11.3 Exercise its right to maintain any and all actions at law or suits in equity to
compel Participant to correct or cause to be corrected said default;
11.4 Have a receiver appointed to take possession of Participant's interest in the Site,
with power in said receiver to administer Participant's interest in the Site, to collect all funds
available to Participant in connection with its operation and maintenance of the Site, and to
perform all other actions consistent with Participant's obligations under this Agreement as the
court deems proper;
11.5 Terminate this Agreement by written notice to Participant and seek repayments of
any remaining principal and accrued interest then owing on the Agency Note.
Except as otherwise expressly stated in this Agreement, the rights and remedies of the
parties are cumulative, and the exercise by any party of one or more of its 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 another party.
882/015610-0063 1 9
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12.0 NONDISCRIMINATION.
12.1 Antidiscrimination. There shall be no discrimination against or segregation of
any person, or group of persons, on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Site, or any part thereof, nor shall Participant, or any person claiming under or
through it, 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 Site, or any part thereof (except as permitted by this
Agreement).
12.2 Anti -Discrimination Clauses in Agreements. Participant agrees for itself and any
successor in interest that Participant shall refrain from restricting the rental, sale, or lease of any
portion of the Site, or contracts relating to the Site, 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:
12.2.1 In deeds: "The grantee herein covenants by and for itself, its 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
race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall
the grantee itself, or any persons claiming under or through it, 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 in the land
herein conveyed. The foregoing covenants shall run with the land."
12.2.2 In leases: "The lessee herein ccvenants by and for itself, its heirs,
executors, administrators, and assigns, and all persons claiming under or through them, 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 status, race, color, creed, religion, sex, marital
status, ancestry, or national origin in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee
itself, or any person claiming under or through it, 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 land herein leased."
12.2.3 In contracts: "There shall be no discrimination against or segregation of
any persons or group of persons on account of status, race, color, creed, religion, sex, marital
status, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or
enjoyment of land, nor shall the transferee itself, or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference
882/015610-0063 20
325173.04 a11/19/02
to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees,
or vendees of land."
13.0 COVENANTS TO RUN WITH THE LAND.
Participant hereby subjects the Site to the covenants, reservations, and restrictions set
forth in this Agreement. Agency and Participant hereby declare their express intent that all such
covenants, reservations, and restrictions shall be deemed covenants running with the land, and
shall pass to and be binding upon the Participant's successors in title to the Site; provided,
however, that on the termination of this Agreement said covenants, reservations and restrictions
shall automatically expire. All covenants established in this Agreement shall, without regard to
technical classification or designation, be binding for the benefit of the Agency, and such
covenants shall run in favor of the Agency for the entire term of this Agreement, without regard
to whether the Agency is or remains an owner of any land or interest therein to which such
covenants relate. Each and every contract, deed or other instrument hereafter executed covering
or conveying the Site or any portion thereof shall conclusively be held to have been executed,
delivered and accepted subject to such covenants, reservations, and restrictions, regardless of
whether such covenants, reservations, and restrictions are set forth in such contract, deed or other
instrument.
Agency and Participant hereby declare their understanding and intent that the burden of
the covenants set forth herein touch and concern the land in that Participant's legal interest in the
Site is rendered less valuable thereby. Agency and Participant further hereby declare their
understanding and intent that the benefit of such covenants touch and concern the land by
enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended
beneficiaries of such covenants, reservations, and restrictions, and by furthering the public
purposes for which the Agency was formed.
Participant, in exchange for the Agency entering into the AHA, hereby agrees to hold,
sell, and convey the Site subject to the terms of this Agreement. Participant also grants to the
Agency the right and power to enforce the terms of this Agreement against the Participant and all
persons having any right, title or interest in the Site or any part thereof, their heirs, successive
owners and assigns.
The covenants set forth in Article 12.0 of this Agreement shall remain in effect in
perpetuity. All other covenants set forth in this Agreement shall remain in effect for a period of
fifty-five (55) years following the date this Agreement is recorded in the office of the Riverside
County Recorder.
14.0 INDEMNIFICATION.
Participant agrees for itself and its successors and assigns to indemnify, defend, and hold
harmless Agency, City, and their respective officers, officials, members, employees, agents, and
representatives from and against any loss, liability, claim, or judgment relating in any manner to
the Project excepting only any such loss, liability, claim, or judgment arising out of the
intentional wrongdoing or gross negligence of Agency, City, or their respective officers,
officials, members, employees, agents, or representatives.
882/015610-0063 2 1
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7
15.0 UTILITIES AND TAXES.
Participant, while in possession of the Property, and each successor or assign of
Participant while in possession of the Property, shall remain fully obligated for the payment of (i)
real and personal property taxes and assessments in connection with the Property, and (ii) all
charges for all utilities serving the Property for which Participant is responsible.
16.0 ATTORNEYS' FEES.
In the event that a party to this Agreement brings an action against the other party hereto
by reason of the breach of any condition, covenant, representation or warranty in this Agreement,
or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to
recover from the other expert witness fees, and its reasonable attorney's fees and costs.
Attorney's 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,
including the conducting of discovery.
17.0 AMENDMENTS.
This Agreement shall be amended only by a written instrument executed by the parties
hereto or their successors in title, and duly recorded in the real property records of the County of
Riverside.
18.0 NOTICE.
Formal notices, demands, and communications between Agency and Participant shall be
sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight
courier services that provides a receipt showing date and time of delivery, (iii) delivered by
United States mail, registered or certified, postage prepaid, return receipt requested, or (iv)
delivered by facsimile transmission, provided the original of the faxed communication is
delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of
the foregoing. Delivery shall be made to the following addresses:
If to Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
Fax: (760) 777-7101
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: M. Katherine Jenson, Esq.
Fax: (714) 546-9035
882/015610-0063 `? . Q
325173.04 al1/19/02 22
If to Participant: Apartments at La Quinta Village, LP
1105 Quail Street
Newport Beach, CA 92658
Attn: Victor Mahoney
Fax: (949) 250-8574
With a copy to: Palmieri, Tyler, Wiener, Wilhelm
& Waldron, LLP
2603 Main Street, Ste. 1300
P.O. Box 19712
Irvine, CA, 92014-0220
Attn: Robert Ihrke
Fax: (949) 851-1554
Notices that are personally delivered, delivered by messenger/courier, or by fax (provided
there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt.
Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the
addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States
Postal System in the manner described in this Section. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as a party may from
time to time designate by mail.
19.0 NONLIABILITY OF AGENCY OFFICIALS.
No officer, official, member, employee, agent, or representative of Agency shall be
personally liable to Participant, or any successor in interest, in the event of any default or breach
by Agency or for any amount which may become due to Participant or successor or on any
obligations under the terms of this Agreement or any of the Agency Agreements.
20.0 TRANSACTIONS WITH AFFILIATES.
Participant shall have the right to enter into contracts with subsidiaries, affiliates and
other related entities for the purpose of providing cleaning, maintenance and repair services,
insurance policies and other purposes related to the operation of the Site, provided that all such
costs and charges are competitive with the costs, charges, rent and other sums which would be
paid by or to, as the case may be, an unrelated third party, and further provided that all such
contracts and transactions are disclosed to Agency's Executive Director, including the costs and
charges of such contracts and transactions. Agency acknowledges and agrees that Participant
may act as its own general contractor for the constructions of any improvements on the Site and
that will be entitled in so doing to earn a commercially reasonable fee.
21.0 SEVERABILITY/WAIVER/INTEGRATION.
21.1 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not
in any way be affected or impaired thereby.
2?1
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21.2 Waiver. All waivers of the provisions of this Agreement, unless specified
otherwise herein, must be in writing and signed by the appropriate authorities of Agency
or Participant as applicable No delay or omission by either party hereto in exercising any
right or power accruing upon the compliance or failure of performance by the other party
hereto under the provisions of this Agreement shall impair any such right or power or be
construed to be a waiver thereof. A waiver by either party of the perf ^ranee of any eaven n
endit on he fe hereto of a breach of any of the covenants, _conditions or agreements
hereof to be performed by the other party shall not invalidate this Agreement nor shall it be
eensider-ed awaiver- of any other- eevenants or- eenditions, nor- shall the delay of fe�ear-aflee by
either- pa. t-, edy or right be eensidered a waiver- of-, ef an esteppel against,
�the later- exer-cT;,e o-r-sueh r-em.�..:b... construed as a waiver of any succeeding breach o
the same or other covenants agreements restrictions or conditions hereof.
21.3 Integration. This Agreement contains the entire Agreement between the parties
concerning the subject matter hereof and neither party relies on any warranty or representation
not contained in this Agreement.
22.0 ENFORCED DELAY; EXTENSIONS OF TIME.
Performance by a party hereunder shall not be deemed to be in default where delays or
defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires;
casualties; supernatural causes; 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; acts of the other
party; acts or the failure to act of a public or governmental agency or entity (except that acts or
the failure to act of Agency or City shall not excuse performance by Agency or City unless the
act or failure is caused by the acts or omissions of Participant); or any other causes beyond the
reasonable control or without the fault of the party claiming an extension of time to perform. In
the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise
reasonable diligence to minimize the period of the delay. An extension of time for any such
cause shall be limited to the period of the Enforced Delay, and shall commence to run from the
time of the commencement of the cause, provided notice by the party claiming such extension is
sent to the other party within fifteen (15) days after the sending party has knowledge, or
should have obtained knowledge of the commencement of the cause. The following shall not
be considered as events or causes beyond the control of Participant, and shall not entitle
Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the
Project, (ii) Participant's failure to negotiate agreements with prospective tenants or users for the
Project, or (iii) interest rates or economic or market conditions. Times of performance under this
Agreement may also be extended by mutual written agreement by Agency and Participant. The
Agency Executive Director shall also have the authority on behalf of Agency to administratively
approve extensions of time not to exceed a cumulative total of one (1) year.
23.0 THIRD PARTY BENEFICIARY.
The City of La Quinta is deemed a third party beneficiary of the terms and covenants
contained in this Agreement and has the right, but not the obligation, to enforce the terms and
covenants contained herein.
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24.0 FUTURE ENFORCEMENT.
The parties hereby agree that should the Agency cease to exist as an entity at any time
during the term of this Agreement, the City of La Quinta shall have the right to enforce all of the
terms and conditions herein, unless the Agency had previously specified another entity to enforce
this Agreement.
25.0 GOVERNING LAW.
This Agreement shall be governed by the laws of the State of California.
26.0 NO MERGER.
The covenants, terms, and provisions of this Agreement shall not merge with any grant
deed or other instrument pertaining to the conveyance of any interest in real property.
27. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which shall
constitute one original and all of which shall be one and the same instrument.
[end - signature page follows]
IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory
Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on
the date first written hereinabove.
ATTEST:
Lo
Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta
Redevelopment Agency
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY, a
public body, corporate and politic
Thomas Genovese
Executive Director
"PARTICIPANT"
APARTMENTS AT LA QUINTA VILLAGE, LP,
a California limited partnership
2 r�
882/015610-0063 2 5
325173.04 al1/19/02
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, , personally
appeared , personally known to me (or 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.
Witness my hand and official seal.
[SEAL]
STATE OF CALIFORNIA
ss.
COUNTY OF
Notary Public
On before me, , personally
appeared , personally known to me (or 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
"
882/015610-0063 ��
325173.04 al1/19/02
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.
Witness my hand and official seal.
Notary Public
[SEAL]
882/015610-0063 2 7
325173.04 al1/19/02
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF SITE
Parcel 3 of Parcel Map No. 30721, recorded on October 23, 2002, in Book 203, pages 30 through
31, of Parcel Maps, filed in the Office of the County Recorder of Riverside County, State of
California.
ATTACHMENT NO, 2
INCOME COMPUTATION AND CERTIFICATION FORM
[See following pages]
ATTACHMENT NO.3
INCOME RECERTIFICATION FORM
[See following pages]
ATTACHMENT NO. 4
CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
[See following page]
882/015610-0063
325173.04 all/19/02
EXHIBIT "H"
FORM OF RELEASE OF CONSTRUCTION COVENANTS
[SEE FOLLOWING PAGES]
882/015610-0063 n ? r
325173.04 al1/19/02
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta„ CA 92253
Attn: Executive Director
[NOTE: RECORD
AS PARTIAL RELEASE
OF AGREEMENT]
(Space Above Line for Recorder's Use Only)
(Exempt from Recording Fee per Gov. Code 6103)
RELEASE OF CONSTRUCTION COVENANTS
WHEREAS, APARTMENTS AT LA QUINTA VILLAGE, LP, a California limited
partnership, is the owner of fee title to that certain real property legally described in Attachment
No. 1 attached hereto and incorporated herein by reference , aeeer- iag to the terms
and ^ nditions of said A T en}(the "Site"l; and
WHEREAS, by an Affordable Housing Agreement (hereinafter referred to as the
"Agreement") dated , by and between Participant and the La Quinta
Redevelopment Agency, a public body corporate and politic ("Agency"), Participant has
redeveloped the Site in accordance with the Agreement; and
WHEREAS, pursuant to Section 6.44 of the Agreement, promptly after Participant's
completion of all rehabilitation , wo -v 1it the "Project" (as that term is defined in
the Agreement) upon the Site, and upon request by Participant, Agency shall furnish Participant
with a Release of Construction Covenants in such form as to permit it to be recorded in the
Official Records of the County of Riverside; and
WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be
conclusive evidence that Participant has complied with the terms of the Agreement pertaining to
the rehabilitation of the Site; and
WHEREAS, Participant has requested that Agency furnish Participant with the Release
of Construction Covenants; and
WHEREAS, Agency has conclusively determined that the rehabilitation of the Site has
been satisfactorily completed as required by the Agreement;
NOW, THEREFORE:
1. As provided in the Agreement, Agency does hereby certify that rehabilitation of
the Site has been fully and satisfactorily performed and completed, and that such rehabilitation is
in full compliance with said Agreement.
r1 r2 [►
882/015610-0063 f)
325173.04 all/19/02
2. This Release of Construction Covenants shall not constitute evidence of
Participant's compliance with the following agreements, the provisions of which shall continue
to run with the land until termination thereof in accordance with the terms thereof:
(i) Deed of Trust with Assignment of Rents, Security Agreement and Fixture
Filing, by and between Participant as borrower and Agency as beneficiary, dated
and recorded on , as Instrument No.
, in the Office of the Riverside County; and
(ii) Regulatory Agreement and Declaration of Covenants and Restrictions by
and between Participant and Agency, and recorded on , as Instrument
No. in the Office of the Riverside County Recorder.
3. This Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of Participant to any holder of a mortgage, or
any insurer of a mortgage, securing money loaned to finance construction work on the Site, or
any part thereof.
4. This Release of Construction Covenants is not a Notice of Completion as referred
to in California Civil Code Section 3093.
5. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the Agreement or any other provisions of any agreements or
documents referenced therein.
IN WITNESS WHEREOF, Agency has executed this Release of Construction Covenants
as of this day of ,
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Executive Director
CONSENT TO RECORDATION
APARTMENTS AT LA QUINTA VILLAGE, LP ("Owner"), owner of the fee interest in the
real property legally described in Attachment No. I hereto, hereby consents to the recordation of
the foregoing Release of Construction Covenants against said real property.
APARTMENTS AT LA QUINTA VILLAGE, LP,
a California limited partnership
By: Apartments at La Quinta Village, LLC,
a California limited liability company
Its: General Partner
882/015610-0063 2 '
325173.04 a11/19/02
By: Cameo Homes, a California
corporation
Its: Managing Member
By:
J.C. Gianulias
Its: President
882/015610-0063
325173.04 a11/19/02
STATE OF CALIFORNIA
ss.
COUNTY OF
On before me, , personally
appeared , personally known to me (or
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.
Witness my hand and official seal.
[SEAL]
STATE OF CALIFORNIA
ss.
COUNTY OF
Notary Public
On before me, , personally
appeared , personally known to me (or
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.
Witness my hand and official seal.
[SEAL]
Notary Public
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF SITE
882/015610-0063 n -�
325173.04 ail/19/02
Parcel 3 of Parcel Map No. 30721, recorded on October 23, 2002, in Book 203, pages 30 through
31, of Parcel Maps, filed in the Office of the County Recorder of Riverside County, State of
California.
882/015610-0063
325173.04 a11/19/02