Loading...
2006 12 19 RDAea# 4 4V OdA Redevelopment Agency agendas are available on the City's web page @ www.la-quinta.org REDEVELOPMENT AGENCY AGENDA CITY COUNCIL CHAMBERS 78-495 Calls Tampico La Quints, California 92253 Regular Meeting TUESDAY, DECEMBER 19, 2006 - 3:00 P.M. Beginning Resolution No. RA 2006-017 CALL TO ORDER Roll Call: Agency Board Members: Adolph, Henderson, Kirk, Sniff, and Chairman Osborne 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. CLOSED SESSION NOTE: Time permitting the Redevelopment Agency Board may conduct Closed Session discussions during the dinner recess. In addition, persons identified as negotiating parties are not invited into the Closed Session meeting when acquisition of real property is considered. 1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED AT THE SOUTHEAST AND NORTHEAST CORNERS OF AVENUE 50 AND WASHINGTON STREET (APNS: 646-070-013 AND 770-040-012). PROPERTY OWNER/ NEGOTIATOR: URBAN HOUSING COMMUNITIES, ROGER DAVILA. Redevelopment Agency Agenda 1 December 19, 2006 2. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY IDENTIFIED AS: APN 649-030-016, -017, AND -040. OWNER/NEGOTIATOR: MICHAEL SHOVLIN. 3. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED SOUTHWEST OF THE INTERSECTION OF HIGHWAY 111 AND LA QUINTA CENTRE DRIVE. PROPERTY OWNER/NEGOTIATOR: TORRE NISSAN, GEORGE VELARDE. RECESS TO CLOSED SESSION RECONVENE AT 4:00 P.M. 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. CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1. APPROVAL OF MINUTES OF DECEMBER 5, 2006 CONSENT CALENDAR NOTE: Consent Calendar items are considered to be routine in nature and will be approved by one motion. 1. APPROVAL OF DEMAND REGISTER DATED DECEMBER 19, 2006. 2. RECEIVE AND FILE TREASURER'S REPORT DATED OCTOBER 31, 2006. 3. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED OCTOBER 31, 2006. 4. APPROVAL OF LA QUINTA REDEVELOPMENT AGENCY FINANCIAL REPORTS IN ACCORDANCE WITH SECTION 33080 OF THE HEALTH AND SAFETY CODE. -,-,n Redevelopment Agency Agenda 2 December 19, 2006 J -, , 5. APPROVAL OF SETTLEMENT AGREEMENT WITH WEITZ GOLF AND APPROPRIATION OF FUNDS. BUSINESS SESSION.- NONE STUDY SESSION - NONE CHAIR AND BOARD MEMBERS' ITEMS - NONE PUBLIC HEARINGS For all Public Hearings on the agenda, a completed "request to speak" form must be filed with the City Clerk prior to consideration of that item. 1. JOINT PUBLIC HEARING BETWEEN THE CITY COUNCIL AND REDEVELOPMENT AGENCY TO CONSIDER A REVISED AFFORDABLE HOUSING AGREEMENT BETWEEN THE AGENCY AND SANTA ROSA DEVELOPMENT, INC., TO INCREASE THE AGENCY'S FUNDING FOR THE HOMEBUYER SILENT SECOND TRUST DEED MORTGAGE LOANS BY $4.5 MILLION, THUS EXPANDING THE INCOME LEVELS OF THE HOMEBUYERS FOR THE PROPERTY LOCATED WITHIN THE WATERCOLORS HOUSING PROJECT AT AVENUE 48 AND ADAMS STREET. A. STAFF IS RECOMMENDING THIS ITEM BE CONTINUED TO JANUARY 2, 2007 2. JOINT PUBLIC HEARING BETWEEN THE CITY COUNCIL AND REDEVELOPMENT AGENCY TO CONSIDER A REVISED AFFORDABLE HOUSING AGREEMENT BETWEEN THE AGENCY AND SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION TO CONVEY CERTAIN PROPERTY LOCATED AT 78-990 MILES AVENUE IN THE CITY OF LA QUINTA, CALIFORNIA, AND SCHDC'S SUBSEQUENT OWNERSHIP AND OPERATION OF AN AFFORDABLE RENTAL HOUSING DEVELOPMENT CONSISTING OF 80 DWELLING UNITS RESTRICTED FOR RENTAL TO, AND OCCUPANCY BY, VERY LOW-INCOME FAMILY HOUSEHOLDS AT A RENT AFFORDABLE TO SUCH HOUSEHOLDS. A. MINUTE ORDER ACTION Redevelopment Agency Agenda 3 December 19, 2006 ADJOURNMENT Adjourn to a regularly scheduled, meeting of the Redevelopment Agency to be held on January 2, 2007 commencing with closed session at 3:00 p.m. and open session at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Redevelopment Agency meeting of December 19, 2006 was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 5 1 -321 Avenida Bermudas and 78-630 Highway 111, on December 15, 2006. DATED: pECEMBER 15, 2006 VERONICA J. ECINO, CMC, City Clerk City of La Quiftfa, California " 4 Redevelopment Agency Agenda 4 December 19, 2006 c&'r^F1aCl AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: December 19, 2006 BUSINESS SESSION: ITEM TITLE: Demand Register Dated Dec. 19, 2006 CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and File the Demand Register Dated Dec. 19, 2006 of which S181,083.44 represents Redevelopment Agency Expenditures. PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA _2 J J wut�v 4 4 otubtraj COUNCIL/RDA MEETING DATE: December 19, 2006 AGENDA CATEGORY: _ ITEM TITLE: Receive and File Treasurer's Report BUSINESS SESSION: dated October 31, 2006 CONSENT CALENDAR: 02 STUDY SESSION: PUBLIC HEARING: RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and file. PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: December 19, 2006 BUSINESS SESSION: ITEM TITLE: Receive and File Revenue and 3 Expenditure Report dated October 31, 2006 CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Receive and File BACKGROUND AND OVERVIEW: Transmittal of the October 31, 2006 Statement of Revenue and Expenditures for the La Quinta Redevelopment Agency. Re`spectf/ulljly submitted, John M. Falconer, Finance Director �Approved for submission by: Thomas P. Genovese, Executive Director Attachments: 1. Revenue and Expenditures, October 31, 2005 LA OUINTA REDEVELOPMENT AGENCY REVENUE SUMMARY PROJECT AREA NO.1: 0710112006-1013112006 REMAINING % BUDGET RECEIVED BUDGET RECEIVED LOW/MODERATE BOND FUND: Allocated Interest Nome Sale Proceeds Non Allocated Interest Transfer In TOTAL LOWIMOD BOND LOW/MODERATE TAX FUND: Tax Increment Allocated Interest Non Allocated Interest Miscellaneous revenue Non Allocated Interest LORP-Rem Revenue Home Sales Proceeds Sale of Land Sever Subsidy Reimbursements Rehabilitation Loan Repayments 2nd Trust Deed Repayment Transfer In TOTAL LOWIMOD TAX 0.00 0.00 0.00 0.D00% 000 0.00 0.00 0000% 0.00 0.00 0.00 0.000% 0.00 0 00 0.00 0.000% 0.00 02.00 000 0.000% 8,915,10000 271,98327 8.643,116.73 3.05D% 333,300.00 100,526.05 232,773.96 30.160% 000 702.87 (702,87) 0.000% 0.00 0.00 000 0.000% 0.00 0.00 0.00 0000% 252,000.00 71.902.42 180.097.58 28 630% 480,0D0.00 311,092.38 168,907.62 64.810% 0.00 0.00 0.00 0000% 0.00 13,030.27 113,030.27) 0.000% 0.00 0.00 0.00 0.000% 0.00 535,430.40 (535,43040) 0000% 140,000.00 1D0 000 00 40 000.00 71.430% 10,120,400.00 1.404,667.66 8,715,73284 13.880% DEBT SERVICE FUND: Tax Increment 35,430,90000 1,D87,93311 34,342,966.89 3.070% Allocated interest 93,100.D0 154.543.07 (61,443.07) 166000% Non Allocated Interest 0.D0 0.00 0.00 0.000% Interst - County Loan 000 000 0.00 0.000% Interest Advance Proceeds 0.00 0DO 000 0.000% Transfers In 4,448,304 00 2,896,145.09 1 552 158.91 65.110% TOTAL DEBT SERVICE 39,972,304.00 4,138,621.27 35,833,68273 10.350% CAPITAL IMPROVEMENT FUND -NON-TAXABLE Pooled Cash Allocated Interest 12,50000 58,77744 (46,27-7,44) 470.220% Non Allocated Interest 500,000 DO 331,083 64 168.916.36 66.220% Lsgation Settlement Revenue 000 0.00 0.00 0.000% Loan Proceeds 0.00 0.00 0.00 0,000% Rental Income 0.00 000 0.00 0.000% Transfers In 2,500,000.00 000 2,500,000.00 0.000% TOTAL CAPITAL IMPROVEMENT 3,012,500.00 389,861.08 2,622,638.92 12940% CAPITAL IMPROVEMENT FUND -TAXABLE Pooled Cash Allocated Interest 0.00 0.00 0.00 0 00D% Non Allocated Interest 0.00 000 0.00 0.000% Litigation Settlement Revenue 0.00 O.DO 0.00 0.000% Bond proceeds 000 0.00 0.00 0.000% Rental Income 0.00 OOD 000 0.000% Transfers In 0.00 000 000 0.000% TOTAL CAPITAL IMPROVEMENT 0.00 0.00 O.DO 0.000% E LA OUINTA REDEVELOPMENT AGENCY 07101/2006.1013112000 REMAINING EXPENDITURE SUMMARY BUDGET EXPENDITURES ENCUMBERED BUDGET PROJECT AREA NO, 1: LOWIMODERATE BOND FUND PERSONNEL 0DO 0.00 000 0.00 SERVICES 0.00 000 000 000 REIMBURSEMENT TO GEN 000 000 000 000 HOUSING PROJECTS 0OD 000 000 000 TRANSFERS OUT 000 0DO _000 0.00 000 TOTAL LOWIMOD BOND 000 0 w 000 LOW/MODERATE TAX FUND: PERSONNEL 4,90000 1,703.80 000 3.19620 SERVICES 3 ASI 00 59,Wl 63 000 W9,57937 BUILDING HORIZONS 25."W 000 000 250,00000 LO RENTAL PROGRAM 200,00000 88,77641 000 111,22359 2nd TRUST DEED PROGRP 500,00000 000 000 500,00000 LAND ACQUISITION 8,800,000.00 100,000,00 000 8,700,0D0.00 FORECLOSURE 160,000.00 000 000 150,00000 REIMBURSEMENT TO GEN 484,127.00 181.37524 000 322,751.76 TRANSFERS OUT 4.448,30400 2,898,145D9 000 1,552,158.91 TOTAL LOWIMOD TAX DEBT SERVICE FUND: SERVICES ]p9000 000 449, low BOND PRINCIPAL 640,00000 2,840,00000 000 03 0.1,30 BOND 7,858,90000 3,867,59213 3,867,59213 000 TEREST CITY ADVANCE 34o,wo Do576.57466 000 600.30707 68Q00000 PASS THROUGH PAVMENI PASS 7A08,000.00 17,108,84000 57fi,57000 000 18,532,07134 RANSHIFT 000 090 000 000 TRANSFERS TR 6,608,515.00 9' 2,800,93077 000 4,007,58402 TOTAL DEBT SERVICE TOTAL DEBT 6m CAPITAL IMPROVEMENT FUND: PERSONNEL 4,90000 1,703.80 0.00 3,19520 SERVICES 541,71000 173,895.50 000 367.81450 LANDACQUISITION 000 0.00 000 000 ASSESSMENT DISTRICT 000 000 000 0DO ADVERTISING -ECONOMIC 0.00 000 0.00 000 ECONOMIC DEVELOPMEN 000 0DO 000 0.00 BOND ISSUANCE COSTS 000 000 000 0.00 CAPITAL - BUILDING 000 000 000 0.00 REIMBURSEMENT TO GEN 213.016W 71,00532 000 142,01068 CAPITAL IMPROVEMENT FUNDMAXABLE BOND BOND ISSUANCE COSTS 000 000 000 000 TRANSFERS OUT (42807001 0DO 000 (42.80700) TOTALCAPITAL IMPROVEMENT 7001 i_ _ 9 uI . 3 LA QUINTA REDEVELOPMENT AGENCY REVENUE SUMMARY PROJECT AREA NO.2: 0710112006-1013112006 REMAINING % BUDGET RECEIVED BUDGET RECEIVED LOWIMODERATE BOND FUND: Allocated Interest Non Allocated Interest Bond proceeds (net) Transfer In TOTAL LOWIMOD BOND LOWIMODERATE TAX FUND: Tex Increment Allocated Interest Non Allocated Interest Developer funding Vista Dunes MHP Rental Rev 2nd Trust Deed Repayment ERAF Shift - Interest Sale of Land Transfer In TOTAL LOW/MOD TAX 2004 LOWIMODERATE BOND FUND: Allocated Interest Home Sale Proceeds Non Allocated Interest Transfer In TOTAL LOWIMOD BOND 0.00 000 000 0DDO% 000 0.00 0.00 0.000% 000 0.00 000 O.ODO% 000 000 0.00 0.000% 0.00 00O 0.00 0.000% 4,670,40000 147,045.22 4,723,35478 3020% 275,300 DO 95,99328 179,3DE72 34.870% 0 DD 0.00 0.00 0 000% 0.00 0.00 0.00 0.000 % 0.90 0.00 0.00 0.000% 0.00 59,409.08 (59,40908) 0.000% 0.00 0.00 0.00 0 000% 13,11IK301.00 0.00 13,994,301.00 0 000% 000 000 000 O.00D% 19,140,001.00 302,447.58 18,837,553.42 1.580% 000 0.00 0.00 0 000% 000 0.00 0.00 0 000% 2,000,00000 1,040,045.75 959,954.25 52.00D% 0.00 000 0.00 0.000% 2,000,000.00 1,040,045.75 959,954.25 52.000% DEBT SERVICE FUND: Tax Increment 19.668,60000 588,18087 19,070,41913 2.990% Allocated Interest 273,9W.DO 81,965.76 191,93424 29930% Non Allocated Interest 000 0.00 0.00 0.000% Interest Advance Proceeds 000 000 000 0.000% Transfer In 1,954,642.00 1,231,801.83 722 840.17 63.020% TOTAL DEBT SERVICE 21.887.142.00 1,901,948.46 19,985,193.54 BMW% CAPITAL IMPROVEMENT FUND: Allocated Interest 105,600 DO 25,649 11 79.950.89 24.290% Non Allocated Interest 0 OD 0.00 000 0 000% Developer Agreement 00D 0.00 0.00 0000% Transfers In 0.00 0.00 0.00 0000% TOTAL CAPITAL IMPROVEMENT 105,600.00 25,849.11 79,950.89 24.290% n LA OUINTA REDEVELOPMENT AGENCY 0710112006-1013112006 REMAINING EXPENDITURE SUMMARY BUDGET EXPENDITURES ENCUMBERED BUDGET PROJECT AREA NO.2: LOWMODERATE BOND FUND 0.00 000 000 2M TRUST DEEDS LAND 0.00 000 0DO 000 0DO BOND ISSUANCE COSTS 000 000 0.00 000 TRANSFERS OUT 000 000 000 000 TOTAL LOWIMOD BOND LOWMODERATE TAX FUND: PERSONNEL 2,9D000 1,03108 000 1,86892 SERVICES 324,111.00 56,99964 0DO 267.11136 2ND TRUST DEEDS 000 000 000 000 FORECLOSURE ACOUISITI 15Q000,00 000 0W 150,OWOD REIMBURSEMENT TO GEN 284,52300 88.173.88 0.00 176,34912 TRANSFERS OUT 1,993,0970D 1,231,90183 000 781,19517 TOTAL LOWMOD TAX 1.am 2004 LOWMODERATE BOND FUND HOUSING PROGRAMS 6.283,00000 643.00000 000 5,640,000.00 LAND 000 000 000 000 TRANSFERS OUT 53,091,79500 1,727,41638 000 51,364.37862 TOTAL LOWMOD BOND DEBT SERVICE FUND: SERVICES 000 170,05000 BOND PRINCIPAL 205,100 DO 5,00000 158,52125 100,00000 BOND INTEREST 314,78500 314,78500 158,52125 0DO 000 156,283.75 INTEREST CITY ADVANCE 1,OOO,00000 333,33328 000 666,666.72 PASS THROUGH PAYMENI 16,419,465 0D 72,6T 87 0.00 16.346,78713 TRANSFERS OUT 1,954,642.00 1,231,80183 000 722,84017 TOTAL DEBT SERVICE CAPITAL IMPROVEMENT FUND: PERSONNEL 2.90000 1.03032 0.00 1,86968 SERVICES 133,043.00 10.16962 0W 122,873.18 ADVERTISING -ECONOMIC 000 000 000 000 ECONOMIC DEVELOPMEN 000 000 000 0.00 REIMBURSEMENT TO GEN 36,534.00 12,17756 000 24,35644 5 �r 9 C `y OF'ft� COUNCIL/RDA MEETING DATE: December 1 9, 2006 ITEM TITLE: Approval of La Quinta Redevelopment Agency Financial Reports in Accordance with Section 33080 of the Health and Safety Code RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve the La Quinta Redevelopment Agency Financial Reports in accordance with Section 33080 of the Health and Safety Code. FISCAL IMPLICATIONS: None. BACKGROUND AND OVERVIEW: Section 33080 of the Health and Safety Code requires certain reports to be prepared and submitted to the governing body by December 31" of each year, which are as follows: Audited Financial Report - (Previously submitted) Redevelopment Agency State Controller's Report (Attachment 1) Statement of Indebtedness (Attachment 2) Housing and Community Development Report (Attachment 3) 619 FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Approve the La Quinta Redevelopment Agency Financial Reports in accordance with Section 33080 of the Health and Safety Code; or 2. Do not approve the La Quinta Redevelopment Agency Financial Reports in accordance with Section 33080 of the Health and Safety Code; or 3. Provide staff with alternative direction. Respectfully submitted, John M. Falconer, Finance Director Approved for submission by: Thomas P. Genovese, Executive Director Attachments: 1. Redevelopment Agency State Controller's Report 2. Statement of Indebtedness 3. Housing and Community Development Report F ATTACHMENT 1 S � o � n n r r . W C7 Wi LO a. i LL f 8 E F m U a m � V a IV 9 a m c� 8 h E � � o q � o m oc co U `a 3 $ 2 !!! |;! !!� 22 f a)! �k\k ■B. E t kk�\ !080 u!a H a m m m ah g c n N p o E } Omi ZCL Q f� o S _ r LL m s � 9mm p m M U O 0 a O a g a W a W a n n n 2 y ¢ a g y 1 AL a m i� aWi 4 9 .tm.. � N E S r x 16 xm E W a SF r,W x c t a m LL c d m x E E o 0 8 z `6 9 E3 O 3 g. r o 6 y g a`mFF m 2 O c o n N g M ii m U O a m m v c a r �y < w 0 M V m a �' K E m m LL c m o W o LL E 8 F C? N W W pg5� G co da co W W V Q@' c m a Q �j .. j O m W m m a c m ILALd m m w o a d r TTc��¢ 8$« - a F E o 3 Q E C a Q �` m m n o .Emk 'Q a m a .� O a 0: S K i $ S, c 16 gcgpp m q«c� m 'jj�- R 0« - « n L' i L' i W LU i w` o i a i 3 itz w z 'm a a o O y m _ T m c G LD p C OLm I..� bi Ems aT « ofiQ `m m Mc o m m Mm> mCrn _ c p5� 06O-�c O a 7c�mEmmt' _ Oa m..o Q�O spa ao zpU W' °m W J I a c y m m 0 g W a>� m �08 oax° �m u m�QE$ off£ �. �tf m O °A y t3 m H t3 o m E @ m m C�m y AL Rom m 'o E o 0 0 a E rn S m? m 6 W a a6o o�x� rn n� =3 a w w Wov mca 3ad� U 1 l! 5 a OF O W m M N °' 0 OR N O 9 m a LL=m s mII m m n g m ¢ ma a n II n < m a Q �C N m a � m d a ae o y u' £ qm`� S Q 'o22 p Z 's �' O ` O U - 0 S O L y y /Lm 0. = �"i O.' K m Q o g C2 mN ELL E; ati LL > m o w p c ¢$ 'o C a n w¢ v ¢u v c m$ ¢ m II } �'S P o N m r^ o o a 0 m m m a a Q m �` �� o c E c m L ` Q c C3 16 c ui f n 9 W ' w` d o f o 2 ww z) a a 'o N om mT € m O 2 p� c Cc oa n Dt m a c€ m E c c m i m•-Y m .2 0y o mE m o E c v�y Sa ca ap'7 'pEppoom O rnd �mo o amy C2°�3Nm E'smo " ac i'cmc E a m c+� a a£o' 'o$I: m Eai =3 a w iz 0 d u W n m 0. P 7 \\ ƒ' ! } -. / k N E i ;2 - \§ » ' \ �I. t � ! §i - 149 k ) / - x -§ ■ \» B ° k ƒ ! � / )\ \ \ k \ k$ ! �\ ]$ ) /2O 91 /21 10 \ | 2 CIL -' I a f # 0 | " ! | a - ! . © { J ■ m e < m � § ; k 0 0 §) Q#! c ! k k ! & - k . ■ ! - \ 11 � $ f � ! N 2 , - = Q 0 - � ƒ _ ƒ , § � k . k § - - £ � . ; ■ . (23 12 � ! | 2 cc �) \ !��}}ƒ`! °2{ �00 ! k! " - f !. $ RKct s s 2 / cli `!§ � ! _ikk2 §CL _=tea }/\ kkkkE kkk$$$ *»«!!! � ■ k \ { ƒ { J � zk . ki \k k{ !J . d0. 8! $2 CO l a 77 % 008 / /\ { (/! ` 13 N O } Z a LL Q 16 m O N tr d Q C O S X W " LL } IL IIG00 W a �y C } 4 E w $ FT c m} O 0 5 s m Q EE d a c a N 6 n c a o E' C' C ST 3 C W E i' � Q cc a 00 W d Q' 0 G Q d q� ¢= U a o a a m IL C N q� 'O EE££ d a c a LL O� Sc o Q a c a c 'O Q n c a q� Y c 10 a c m m 0 0 h r N C C O IO 0 O L Q O1 C O N m c m �p LL. N Y8 O d Z 0 c oW N d oa Q£ U r .$ co_ t n� C t a� 46 o oF- ch m rm�U =S (O 3 m cZ m c � O y m m 000 o - 1� m m s Q N c r J c 14 m � � � k! z -k �s to E� � f CL 3)�5Z 00°/JI ca;L` 0 k,-!I! 0k!|! #{ !! „ \§k !�[ }k\}\\ d(7k\k V; \$!!!£ U � ! § \ k � � ) k � # / 0 J . \ k ` ze kk 00 X0 k) \% k� �f k| � - M0 )2 {k 15 -T ■ LL ! ,){ �\ k)\\\} w a ƒiL�l, °2r ` .! � ! # 7� ■;\ rL ■ ;$%\k �CL c LL (\0|`� `!kk\ k !#$$ $?!!££ � a LL ! ! ( k ƒ 0. k ! t k i / k\ s \ Z JIM m Y d Z d a a } a LL in O g2 O a L Q 'o a` 2 'o a` m a' .9 C%y m } D m O nj m m� N� w 00 C N > w } LL D t c EIL °E00o a c a¢ cIS C m O ul aci QD C Q qLL LL. C p E0E d 6 a OI C E Q a L LL c O E Q c a c W ? C ° I a a C E Q c a= ' obi a F m° a 17 2 ! t � _ $ z kIL 02 , \ k ( k&$\ki j\//( !!! ) 0 0 »&!§kL®lf07- }§# !!�«!lkkkl-c / / |� 1k/f\// l k� f! �o \{lu >. 0 ! 0 M k b2] \ ) \ ) 2 18 r r r 0 C 0 p O v O � Z � W �m 40 CO Y `o o P N a o p $ W N IL LL p� W $m pW = c ❑ � '� W m m > � o O= 8 E r m a L m E W m C L N C> C 0 > C p O C N W S ❑ y= C m 9 c m W« a 'o 'o m w EOE m =o =o o EOE a =o w o Q EE Q Q m a ❑ } a 5 Q Q '8 O D 8 o d Q d Q n n'i3IS '0 L '3 a Q o e m m a v v c c O. o E tT a w m> a a D. i g ¢¢ a s a` a m 0 0 M N a c 0 m 0 0 .c _ Q rn c � m rn `m a ai t zs Z2 0.2 oW 00 as E f O G m C C _ am oQ F WN U �a m� ay �d m ill o �Z m c O r0 m ❑ UP Q $ � J J Q c m FW- J m 19 [ k � � ■ % � § 16 2 �| A� — �� cc ■ 0 f !�§\l�a�t•alf;§#\ �r�E.■#fekk!#««!#� 0�CL(La `k! §16v ` §a,;-!ka®§° �Sk�k ®|# 20 ! | !-�k�klk® :f!!!�C_ }/r ( 13 2 $ ! ¥ § k , { $ 0 { # \! £ 2f %/ §00. . !k �! 27 CO§ CO0 ) !| )) � x0 A m 0 m 0 0 0 Lo N O > Z a N W jC a E cd m m > a>? E o 9 `o o m a O m a' Q m .� c a c Q m .� `= a` o 0 g a > @ m 0 L� m i 10 > w m 0" = `" g W c m c > �. c a m omca m c o o ¢¢ a Q W c E _ o v a a a .92 � d 000 d @ c 'c a U LL c E ¢ o C 'c a we c d a c 'c a t'1 I V ei " 21 0 !k , k �� , k!%\k(||1771k< k(iiIL 2c 'N===I\\�R//0 ILILIL,. ■ <!Ia!! f/2 .1\.1 k k { ! k k i a » 0 j]J \ ) 2 22 ! � � , 2 -k CL E °�f ! 2;}�ƒka !$k \l•,2! §/k " |2 ,! = � \ \ 06 a � {/\ �k�l�� Ts )L 0!! f$!!!! � a \ k � /33 23 ! § z . $ �� §� | §;„!00$0 co»mom I\7.® ; r | ]/ / j$ ! ! k a` a;!| ■ƒkk \)JLU \}�)g #faff !!a #I#c� `kak � ,` ■(a! /53 § \ \ { < 24 � 00 U. ; §� +� & k � ■ 0 $ 11. 0. SSl CCL \N §\ k § § f LLL k2 } ) `k.5U. g \ �■ 2 }E0%(|•-�k��� af,§; |!§k7cc )§fE�� --�`! �kILU—) £ ■ � k § k § Oyu 25 c Ih F c E if Li' M IL 9 8 2 0 2 iz & 717 --------------- 0 LQ 0 Ct 0 0 M. Obi ODD LE a coy, C;l L L L L IIILIL LILILI L c .2 XM 0 :2 > CX c E v c E 0 LJ E LT-Sco 0 8 ZE 8 8 E c 0 La 0 :s -a m n o o m 0. (o .5 (' m o 26 2 �) ■ awl:r Rita I E `\ 1-� § C33 / 27 � !} kk §� �. kUO k � k ! ! _ ! - $ §k a \ }$jL ( | ! ` k k \ / \ } / k) k !k 2 R �a. k vi «« j\ - k a !2 k � � k§ � X ! _ z ») �f 2 $ 0 § a 2 n $ - ! i k ! z % ! ! ! 16 . a § ■ k / \ § \ E) k / k � ! E ; a | t ° c t 2 3 a $ ! IL ) § } ) § k I \! » ! & £ \ � 29 � k ■ ;{ § ff k $ -0. ,# ■ 32 ) \ �| � 2 0 kk ;a|$� @ |.IE \ »! § £ #c § 0 ! k! ( % ! ƒ § , - §! { ° ! j | k Q. ! | , ° 2 !\ ! ■ on |E ! ! k§ E 7 a Br R /! iz 0)£ 1iL� 2}I 30 i 4" M• W+ !9 O� 1�. � aa0; M� pi Mi thi ; Nj i Oi CO A; � aNOj uuuuuuu uul�u LL o V J o V o a Cc c S m Q a m g c a¢ U G NamN' U a mm Q LL m m 0 m N i 5 m c n O C C ¢ E Tj m f 0 0 +E C E u F C a o m 3 m o C c IL F 31 — -�.—. \ \ LLI k) � !3 \ { \ ; u CIL \� $ k Za y f , :ems!! . § $ � � cc >E} / & 22k I ! ! | C__ , ! 2 .� ; \\: k)_k k \ LL § / bl] � - ---- § . 7 GCFI� cil§ \ � .2 `! ). k0 - �c \ƒ !c ° . ! 2 _ $' Z ; ! k \ k IL!CL ° ■� � \| (. i $ k ® ■ - ) a� \. {`!3!` ; \ \ )k ©f § ƒ I ! # ! I ! k ! ■ 0kEkkk E ! 7 , 0 ) / k ! \ 2 0 0 \ ° } kf / /} \k , ( �a § i ■ ; k IL c �� 0 ! \� & ; 2 ■ | � A § . �. l ) I - ����\/; ! ! U. !2 ! � f � ■ � - B � k � 3 a �� e« i f ■� §! ■�� . §4� \ a 35 m®®®mm1 I I lr a yO w m d o E a e y m w W m �a cE c ' w m 0= m ac m om q 0 �yv Om } C 'Q J SgI O QIL O� Cy E Em �o d E _� ?w� W� LL Ci$$p r O w Ci U.w W QN a F-a �$O [J 36 it 2 �wm ! / ) |) 2 \/{ Q ■ ,.lz,■-,al-lam �g�!°;a•!�.! a C kk�kto�o��=�!lCcaf -;!»!§��°&#�)!a .!! )�fk�ccokk�����" 13 S,te� <! § § k � ■ \ k 37 ! ~ , %2- ■ E E c \ k a $cm \ \ § ` 2!i K j § 0� \ \ !! \ ® \ £' o ® § ƒ rz � k \ wi k k ` � . ! | � � E§ ■ ! !£ s. � |■ ! !I Cl) �� § / \) ƒ �k k | ��■ �{ « /i� 38 7 J f;Cc . ` E ) o 9 ( a 39 H 1 1 Hl.MVICIY 1 c C w O d L N d ao+ a� O }. A W p A N 64 49ol v�i O N N b a Q00 W 7 ✓1 h �N�pp Vi O v Yf (A iA Vi O ti N Pl v v a W a o w w o � 03 03 u � c a as 7 d � y F a C U� oa07 Ez 40 W % d Y Y gyp' Ip elf is � N '-• N Vl � h 1� N h N h V�1 h O N N V�1 OD Q K 6N9 � 6N9 Vf (A f9 69 69 M� K bh9 "a atli Q G to us Y r m o g @ o a n a a a o a a a is N O u u buy pu u u a a m m mm � a , a ^ U Q V Q U U a Y r3tl-1 fri c W� e g �8 41 M- PA cc �d d� ^ td �d JO anHo oo�o n N O ° p�p K N N P� a u Q a d O F m 8 w w M N P W a 7 H H H H H H H yj d u u u e d e rn 0 0 0 0 0 0 ° q h i M M O d d o e o O M W N H q q q C C C fA H h O N Y1 N m, o q j�yy �vJ `93 d 6 6 s s 3 s s -1w - 6,)3 x yp O W V91 N N 1911 42 § � § § $ � k\ . - g 2 \ \ \ X3 !�! R , 0 ;k } ! ! � } k a 2 S ) d } ) ) ! ) • \ ) � \ ) § a e k 2 � k \ u R a 4!| E EE« |#! !!f I/| /54 ƒ&EEREE oa � 6 g �^• � H yy ey y K y vi � ' : � w 1 a, vOi a � a °- g B d d .d^ T rpOyy �+ 9 G e aa a M n V W C•pS � s C QI 0 �Ai tVJ R V1 h 06 °. o � a d y 0p 0 0 p e w d 9 FI a aw a w e o d e y9 M y 0 C O b b a N Cil u k7 � ro ow w � M rn Iq O" � Q' c � tal Yql � .mow .y N M ^ N O Yar W Vl !A 69 Vf 69 � Vf K C b '� �= 5a V thry O u ti 0 PC, « A A p T a N CI 0 W h W h06 �' w dCpp y N a OIy W Vl H K W iN Vf M p$ (�y O H H q Y y F.1 � aO g eyed 15 on w v ( 1 _ of °u to u q Y „ d ° m. � ° m. � m. � m.S m.5 m 3 u ti F , e �+ a a W ..l a �-1 O F IL � O O r, 45 vl O O. �p N 00 e 7 ep w � p � 7 'ia e all G Fw 1 N m M b O1 c M b H M y w M b °i W y y H y y H H a ggffigq � -,. UI L' tQ � y y H N aon cov H p fA 8 q d v m o a M n a0 OD O' b N h a A NN Q9 'a B 00 on W r ^ ^ v a h � � Q •`� P N `V V ° d I� d e y p y N pq yp N f1 N Oy u C u r qO F. N N p? . P. � N w W r�- u 00 a 0.. r�i a w �y . m m .. _ eo O 46 C'. N L7 m V P �O wI w �g a 0 � B Vp H H H H K H H y G p s o psi Ti N ,P.i p Q V H H H � W a � d W 0.11 u W w H o h � w can w o P 0 a 5 Y W H N H V (A d GGQ dI '� d M O O qSq �p �O O r 0 e s � I7 a a4 �`pQ( N N N T7 Y U I�1 a E � G Ua.7��aaa.3a u m •p Y w a Y m C w Y hp C Y m Y tti . u W aa u a Y MIL Lep4^ LT. Q N o 'C Y m u m Y m u ou u op a u u s ,c Y c F 47 Footnotes to Reconciliation Statement Name of Agency La Quints Redevelopment Agency Name of Project Area La Quints Redevelopment Agency Project No. I Tax Year: Fiscal Year Beginning July 1. 2006 Reconciliation Dates: From July 1. 2005 To June 30, 2006 i Low & Moderate Housine Set Aside Increases: $ 59,213,330 Adjustment of Forecast Remaining to 2032-33 59,213,330 County of Riverside Pass Through Increases: $ 98,891,079 Adjustment of Forecast Retraining to 2032-33 98,891,079 Desert Sands Unified School District Increases: $ 15,191,038 Forecast Remaining to 2032-33 15,191,038 Desert Community College District Increases: $ 4,151,486 Forecast Remaining to 2032-33 4,151,486 Coachella Valley Mm. Abat. District Coachella Va11ey�Water District Overhead/Administration Increases: Adjustment of Forecast Remaining to 2032-33 Increases: Adjustment of Forecast Remaining to 2032-33 Increases: Adjustment of Forecast $ 1,593,362 1,593,362 $ 3,579,966 3,579,966 $ 68,665 68,665 City of La Ouinta Loan Increases: $ 7,578,160 Additional Principal 7,578,160 Pagel of 3 48 Footnotes to Reconciliation Statement Name of Agency La Quinta Redevelopment Agency Name of Project Area La Quints Redevelopment Agency Project No. 1 Tax Year: Fiscal Year Beginning July 1, 2006 County Superintendent of Schools Cemetery District Reconciliation Dates: From July 1.2005 To June 30, 2006 Increases: Adjustment of Forecast Increases: Adjustment of Forecast $ 2,748,649 2,748,649 $ 226,281 226,281 Recreation & Park District Increases: $ 1,390,963 Adjustment of Forecast 1,390,963 Resource Conservation District Increases: $ 26,621 Adjustment of Forecast 26,621 County Administration Fee (SB 2557) Increases: $ 2,945,977 Adjustment of Forecast 2,945,977 Economic Development Activities Decreases: $ (25,000) Eliminated from 2006-07 Budget (25,000) vital Improvement Program City Loan - Museum Site Increases: Adjustment of Forecast Decreases: Adjustment of Principal $ 1,503,354 1,503,354 $ (199,000) (199,000) Page 2 of 3 49 Footnotes to Reconciliation Statement Name of Agency La Quinta Redevelopment Agency Name of Project Area La Qainta Redevelopment Agency Project No. I Tax Year: Fiscal Year Beginning July 1. 2006 Reconciliation Dates: From July 1, 2005 To June 30, 2006 ERAF Loan Increases: Principal Amount Issued 2,903,657 $ 2,903,657 Page 3 of 3 50 CALCULATION OF AVAILABLE REVENUES AGENCY NAME LA OUINTA REDEVELOPMENT AGENCY PROJECT AREA LA OUINTA REDEVELOPMENT AGENCY PROJECT NO. 1 TAX YEAR Fiscal Year Beginning July 1, 2006 RECONCILIATION DATES: JULY 1, 2005 TO JUNE 30, 2006 1. Beginning Balance, Available Revenues $5,112,974 (Per 2004-05 Statement of Indebtedness) 2. Tax Increment Received — Gross: $43,054,372 All Tax Increment Revenues, to include any Tax Increment passed through to other local taxing agencies. 3. All other Available Revenues Received $3,993,000 (See Instructions) 4. Revenues from any other source, included in Column E of the Reconciliation Statement, but not included in (1-3) above $0 5. Sum of Lines 1 through 4 $52,160,346 6. Total amounts paid against indebtedness in previous year. (D +Eon Reconciliation Statement) $53,581,039 7. Available Revenues, End of Year (5 - 6) ($1,420,694) FORWARD THIS AMOUNT TO STATEMENT OF INDEBTEDNESS, COVER PAGE, LINE 4 NOTES Tax Increment Revenues: The only amount(s) to be excluded as Tax Increment Revenues are any amounts passed through to other local taxing agencies pursuant to Health and Safety Code Section 33676. Tax Increment Revenue set -aside in the Low and Moderate Income Housing Fund will be washed in the above calculation, and therefor omitted from Available Revenues at year end. Item 4. above: This represents any payments from any source other titan Tax increment OR available revenues. For instance, an agency funds a project with a bond issue. The previous SOI included a Disposition Development Agreement (DDA) which was fully satisfied with these bond proceeds. The DDA would be shown on the Reconciliation Statement as fully repaid under the 'other" column (Col E), but with funds that were neither Tax Increment, nor "Available Revenues" as defined. The amounts used to satisfy this DDA would be included on line 4 above in order to accurately determine ending "Available Revenues." Rev. 9/27/20% 51 M d d m � E+ qeqo a 'G A A a rn d rn rn � ry A .� N N N N N O f9 N E+ G is us ..i vi H N m v a N Irl F � M YI �a Iwo Q ° t U d u C c a PO � a u O 'p 0 F O q a e a a ow,e .a w^U k„�'a,C7 � o ri0• o > � wz m E O U W 52 r7 a S o 00oci 0�pan} o0 '9 n O M O M 00 O a 00 asV M M e a a A U a �°+f 4 O h � rQi" p � � � sN9 b9 W f/i 49 Nf fA di b9 O O d F p O k O C C O okp C O k O C O C O C C o�p k rr 10 q p. p q qr p q q q E 0 d d U u w � ¢� & 0 ° N A « lE d O A 0 F o A F w m v y « 4 ° c x v v w 3 u a> 5 t v ix p; o o w :9 ti V o �� h d 000 ,.a U o U v A o V o U m A U o U aki P: i w y, � y ,� Pla A ¢ m u A Ell El 6 x ��. i 6 3 O g W li 14 li C L a 53 !� !� f�! . « � ; ) i 7 0 k ~ $ § « ! ! ! CFl \ ( \ \ k 2 \ \ 2 ! a ) O u s 2 < m u ; ) � � EEssEJ ZEEaEE C/5 54 i Ti �W 69 nM Vyy T iQ W P �: O � M • WI Q b h m Y O N vOi N N N O d 0. 0 a •O �'9 r/Oj Y ♦sib � O O O O O O O O O O O � � w y q33 u S 'OSO O yy oo a N a .9 � O p q h M O O m y N N r{ h oD N Y y m O P W Nm M bpp� d Y QI Ci moo_ a ao vNi a "� y moo' •C p �JqT F69 H H fag H H H H K H H C O �o Y Fl a H H Y ,70 a rxd lot { ggIR oan a �'}' i iQI ai N w M O h a m a P wt b m �' q q A Y n (n M O M Y � I e Y +9 d e $ S e 9 o w m ri P4 O u rW. O eo�N „m e e eA'3 Y q S^ >' 0 C o° S � $3 (a > p> o a q 9 ..a o va 8a�y 8� ��s Qa a: �« Z r�q '� NC o> � O m � Y � Q � V1 U Y % •� � � � COC T d •� o. C .S mm.5 v, •Uw.awaa.a a.a o. .�a, .a a.aaa Y F O O k' a �' a z 56 pO N y� W M. p Yy 1W1 N V O �p O Y q vi Q� Vl O C N O m e n W ,p Q� FI d Y W 0 ao' T � Q m N a .fir m e p a Ul E N O O O O O O O O a� � d e QI W N yi O H N b09 O b Y a CW h ��+f N N V •" e O C si v >pp u u w r 0 a 0 cc � s e ,d i a m Y y I Y 0 i� z d M •�. m m C m .5 m [ m q m ..C. m C m •9 O N •F 57 Footnotes to Reconciliation Statement Name of Agency La Quint& Redevelopment Agency Name of Project Area La Quints, Redevelopment Agency Project No. 2 Tax Year Fiscal Year BeOanina July 1. 2006 Reconciliation Dat From July 12005 To June 39.2006 Low & Moderate H2iWu Set Aside Increases: S 32.118.ti02 Adjustment of Forecast remaining to 2038-39 32,118,602 County of Riverside Pass Throueh Increases: S 55,332.203 Adjustment of Forecast remaining to 2038-39 55,332,703 Desert Sands Unified School Increases: S 30,055,343 Adjustment of Forecast remaining to 2038.39 30,055,343 Coachella Valley Water District Increases: S 12-392,665 Adjustment of Forecast remaining to 2038-39 12,392,665 County Suoerinteadeat of Schools loereases: S 3-383,417 Adjustment of Forecast remaining to 2039.39 3,383,417 Desert Community Colleae Distri Increases: S 6,244,197 Adjustment of Forecast remaining to 2038-39 6,244,197 Coachella Valley Park & Rce Increases: S 2-999,974 Adjustment of Forecast remaining to 2038-39 2,999,974 Coach Valley Mosauit Abasement Increases: S 2-279-638 Adjustment of Forecast remaining to 2038-39 2,279,638 Rent Reimbursement Decreases: $ (4,030) Adjustment of Forecast remaining to 2038-39 (4,030) Overhead/AdalinistraGon Increases: $ 380,537 2006-07 Budget Estimate 380,537 City of La Quinta Advance Decreases: S 8,614,854 - Adjustment of Forecast 8,614,854 C Amty Administrative Fa (SB 2577) Increases: S 192,111 Adjustment of Forecast remaining to 2039-39 192,111 - Ut)� Page 1 of 1 58 CALCULATION OF AVAILABLE REVENUES AGENCY NAME LA OUINTA REDEVELOPMENT AGENCY PROJECT AREA LA OUINTA REDEVELOPMENT AGENCY PROJECT NO. 2 TAX YEAR Fiscal Year Beginning duly 1, 2006 RECONCILIATION DATES: JULY 1, 2005 TO JUNE 30, 2006 1. Beginning Balance, Available Revenues $22,774,711 (Per 2004-05 Statement of Indebtedness) 2. Tax Increment Received — Gross: $23,814,573 All Tax Increment Revenues, to include any Tax Increment passed through to other local taxing agencies. 3. All other Available Revenues Received $2,685,600 (See Instructions) 4. Revenues from any other source, included in Column E of the Reconciliation Statement, but not included in (1-3) above $0 5. Sum of Lines 1 through 4 $49,274,894 6. Total amounts paid against indebtedness in previous year. (D +Eon Reconciliation Statement) $36,565,849 7. Available Revenues, End of Year (5 - 6) $12,709,036 FORWARD THIS AMOUNT TO STATEMENT OF INDEBTEDNESS, COVER PAGE, LINE 4 NOTES Tax Increment Revenues: The only amount(s) to be excluded as Tax Increment Revenues are any amounts passed through to other local taxing agencies pursuant to Health and Safety Code Section 33676, Tax Increment Revenue set -aside in the Low and Moderate Income Housing Fund will be washed in the above calculation, and therefor omitted from Available Revenues at year end. Item 4. above: This represents any payments from any source other than Tax increment OR available revenues. For instance, an agency finds a project with a bond issue. The previous SOI included a Disposition Development Agreement (DDA) which was fully satisfied with these bond proceeds. The DDA would be shown on the Reconciliation Statement as fully repaid under the "other" column (Col E), but with fiords that were neither Tax Increment, nor "Available Revenues" as defined. The amounts used to satisfy this DDA.would be included on r line 4 above in order to accurately determine ending "Available Revenues." (i Rev. 9127/2006 . 59 ATTACHMENT 3 CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT REDEVELOPMENT AGENCY ANNUAL HOUSING ACTIVITY REPORT FY ENDING: _6_J_30_/_2006_ Name and Address: County of Jurisdiction: Riverside Health & Safety Code Section 33080.1 requires agencies (RDAs) to annually report on their Low & Moderate Income Housing Fund and housing activities for the Department of Housing and Community Development (HCD) to report on RDAs' activities in accordance with Section 31090.6. Please answer each auesdon below. Your answers determine how to complete the HCD report I. Check one of the items below to identify the Agency's status at the end of the reporting period: ❑ New (Agency formation occurred during reporting ygal. No financial transactions were completed). ® Active financial and/or housing transactions occurred during the reporting year) ❑ Inactive (No financial and/or housing transactions occurred during the retorting veer). ONLY COMPLETE ITEM 7 ❑ Dismantled (Agency adopted an ordinance and dissolved itself before start of reporting year). ONLY COMPLETE ITEM 7 2. During rovorling how many adopted rM ect areas existed? __2_ Of these, how many were merged during year? if the agency has on o�project area& complete SCHEDULE HCD-A foreach pn ecr (im• If the agency has noapted project areas. DO NOT complete SCHEDULE HCD-A (refer to next question). 3. Within an area outside of any adopted project area(s): (a)"die agency destroy or remove any dwelling units or displace any households over the reporting period. (b) does the agency intend to displace any households over the next reporting period, (c) Qld the agency permit the sale of any owner -occupied unit prior to the expiration of land use controls over the reporting period, and/or (d) did_ the agency execute a contract or agreement for the construction of any affordable units over the next two years? ❑ Yes (any question). Complete SCHEDULE HCD-B. ® No (all questions). DO NOT complete SCHEDULE HCD-B (refer to next question). 4. Did the agency's Low & Moderate Income Housing Fund have any assets during the reporting period? ® Yes. Complete SCHEDULE HCD-C. ❑ No. DO NOT complete SCHEDULE HCD-C. 5. During the reporting period, were housing units "ompleed within a rxoject area and/or assisted by the agencv outside a project area? ® Yes. Complete all applicable HCD SCHEDULES Dl-D7 for each housing oroied comaleted and HCD SCHEDULE E. ❑ No. DO NOT complete HCD SCHEDULES DI-D7 or HCD SCHEDULE E 6. Specify whether method A and/or B was used to report financial and housing activity information to HCD: [A. Forms. All required err'^ SCHEDULES A. B C. Dl 17 and E are atwcled. El B. On -tine (htrp:lAvww.hcd cagovlydal)"Lock Repoli" date: HCD SCHEDUI F not required. (lock date is shown under "Admin" Area and "Report Change History") 7. To "t of ykrwledg� n m above and (b) agency i ormation reported are correct• ` r of th zed�lLe Re resenµtative Dort` ef�/yt prr` � i 4 C., To �-- Title -1 o N� yf b 1 1 ^ 11, S Q Telephone Numb" • IF NOT REQUIRED TO REPORT, SUBMIT ONLYAPAPER COPY OFTHIS PAGE, e IF REQUIRED TO REPORT, AND REPORTING BY USING PAPER FORMS (IN PLACE OF REPORTING ONdINEI SUBMIT THIS PAGE AND AIL APPLICABLEHCO FORMS (SCHEDULES A-E) WIT11 ACOPY OFAGENCY'S AUDIT: • IF REPORTING ON-LINE, PRINT AND SUBMIT "CONFIRMATION LETTER" UPON LOCKING REPORT MA L A COPY OF (a) CONFIRMATION LETTER (IF HCD REPORT WAS ELECTRONICALLY FILED) QR_ (b) COMPLETED FORMSAND (c) AUDrT REPORT TO BO7Tl HCD AND THE SCOT Deparhment of Housing & Community Development Division of Housing Polley Redevelopment Seedon 18003'`Stree4 Suite 430 Sacramento, CA95814 The State Controller Division of Accounting and Reporting Local Government Reporting Section 3301 C Street Suite 500 Sacramento, CA 95816 ,. y HCD-Cover Redevetopmenl Agency Annual Report - Fiscal Year 2005-2006 r...... numF ,, 60 SCHEDULE HCD-A Inside Project Area Activity for Fiscal Year that Ended —fi-J• 30 / 06 Agency Name: la Ouinta Redevelopment ARelIv Project Area Name: kwj2q °'ea No I Preparees Name, Title: Nlichael Benjamin Associate pteparees &Mail Address: mheniamin@webrm.com pneparees Telephone No: 714-541.4585 ext 124 Preparces Facsimile No: 714 54] 1175 GENERAL INFORMATION 1. Project Area Information e. 1. Year I a plan for project area was adopted: 1983 2. Year that plan was last amended (if applicable): 1995 3. Was plan amended after 2001 to extend time limits per Senate Bill 211 (Chapter 741, Statutes of 2001)? Yes_ No 3� 4. Current expiration of plan: mo day yr b. If project area name has changed, give previous name(s) or c. Year(s) of any mergers of the project area: Identify former project areas that merged:. d. Year(s)project area plan was amended involving real property that either. (1) Added property to plan: (2) Removed property from plan: 2. Affordable Housing Replacement and/or Inclusionary or Production Requirements (Section 33413). pre 1976 moject areas not subsseeuendy amended after 1975: Pursuant to Section 33413(d), only Section 33413(a) replacement requirements apply to dwelling units destroyed or removed after 1995. The Agency can choose to apply all or part of Section 33413 to a project area plan adopted before 1976. If the agency has elected to apply all or part of Section 33413, provide the date Of the resolution and the applicable Section 33413 requirements addressed in the scope of the resolution. Dom: _ J_—J— Resolution Scope (applicable Section 33413 requirements) - ran day yr post-] 935 orouect areas aril Reog nhic areas added by amendment after 1975 to ore-1976 KWect areas: Both replacement and inclusionary or production requirements of Section 33413 apply. NOTE: Amounts to report on HCD-A lines 301), 3b-3f, and 3i. can be taken from what is reported to the Stafe Controller's Office (SCO) on the Statement of Income and Expenditures as part of the Redevelopment Agency's Financial Transactions Report, except for (be reclassifying of Traffifers-In from Internal Fords and the repotting of Other Sources as discussed below: TraWers_ln from other htter ild funds: Report the amount of transferred funds on applicable HCD•A, line 3o j. For example, report the amount transferred from the Debt Service Fund to the Housing Fund for the deposit of the required set -aside percentage/amount by repotting gross tax increment on HCD-A, Lane 3a(1) and report the Honing Furld's share of expenditures for debt service on HCD-C, Line 4c. Do rr`m ♦ r I— 4eri\ anion reemrtinR debt Other Sources: Non-GAAP (Generally Acceptable Accounting Principles) revenues such as from land sales for those agencies using the Land Held for Resale method to record land sales should be reported on HCD-A Line 3d. Housing fund receipts for the repayment of loan principal should be included on HCD-A Line 3h. HCD-A California Redevelopment Agencies — Fiscal Year 2005-2006 page I of Sch A (7/I/06) U 61 Agency Name: L a Otdnta Redevelopment Agency ProjectArea Name: Project Area No I Project Area Housing Fund Revenues and Other Sources 3. Report all revenues and other sources of funds from this project area which accrued to the Housing Fund over the reporting year. Any income related to agency -assisted housing located outside the project area(s) should be reported as "Other Revenue" on Line 3j. (of this Schedule A), if this MgWt area is named as hetteficimv in the authorizing resolution. Any other revenue sources not reported on lines 3s.-3i., should also be reported on Line 3j. Enter on Line 38(1) the full 100% of gross Tax Increment allocated Wor to applicable pass through of funds and deductions for fees (refer to Sections 33401, 33446, & 33676). Compute the required minimum percentage (%) of gross Tax Inurement and enter the amount on Line 3a(2)(A) or 3a(2XB). Next, report the amount of Tax Increment set -aside before any exemption and/or deferral (if amount set -aside is less than required minimum (%) explain the di a reel. if any amount of Tax Increment was exempted or deferred, in addition to comoleting lines 3at4) and/or 3a(5) complete t.me 4 artdlor Line 5. To determine the amount of Tax Increment deposited to the Housing Fund (Line 3a(6)1, subtract allowable amounts exempted [Line 3a(4)) or deferred [line 3a(5)] from the actual amount allocated to the Housing Fund [Line 3a(3)]. a Tax Increment: (1) 100% of Gross Allocation: $ 45,632,751 (2) Calculate only 1 set -aside amount: either (A) or (B) below: (A) 20% required by 33334.2 (Line 3a(1) x 20%): $ 9,126,550 (B) 30%required by 33333.10(g) (Line 3a(1) x 29%): $ (Senate Bill 211, Chapter 741. Statutes of 2001) (3) Amount of set -aside (Line 3s(2)) allocated to Housing Fund $ o t 2e 550 • If, pursuant to Section 33334.3(i), less than the minimum % of Gross Tax Increment (see 3a(2) above) is being allocated from this project area, identify the project area(s) contributing the difference. Explain any other reason(s): (4) Amount Exempted [Health & Safety Code Section 33334.21 (if there is an amount exempted, also complete question #4, next page): ($ ) (3) Amount Deferred [Health & Safety Code Section 33334.61 (if there is an amount deferred, also complete question #5, next page): ($ ) (6) Total deposit to the Housing Fund [result of Line 3a(3) through 3a(5)]: $ 9,126.55 $ 1632 614 b. Interest Income: Rental/Lease Income (combine amounts separately reported to the SCO): $ 294'205 c. $ 384,812 d. Sale of Real Estate: e. Grams (combine amounts separately reported to the SCO): $ f. Bond Administrative Fees: $ g. Deferral Repayments (also complete Line 5c(2) on the next page): $ $ 1,320,719 It. Loan Repayments: i. Debt Proceeds: j. Other Revenue(s) [Explain and identify amount(s)]: lvhscellaneous Revenue $ 310,227 $ $ 310,227 L Total Project Area Receipts Deposited to Housing Fund (add lines 3a(6). through 3j.): $ 13,259,127 Califomia Redevelopment Agencies — Fiscal Year 2005-2006 Sch A(7/1/06) HCD-A Page,20 j` U 62 Agency Name: La Ouinta Red velo2=nt AAeencv Project Area Name: Meet Area No 1 Exemptiork(s) 4. a. if an exemption was claimed on Page 2, Line 3a(4) to deposit less than the required amount, complete the following information: Check only one of the Health and Safety Cade Sections below providing a basis for the exemption: ❑ Section 33334.2(axl): No need in community to increasetiimprove supply of lower of moderate income housing. ❑ Section 33334.2(ax2): Less than the minimum set -aside % (20% or 30%) is sufficient to meet the need. ❑ Section 33334.2(ax3): Community is matting substantial effort equivalent in value to minimum set -aside % (20% or 30%) and has specific contractual obligations incurred before May I, 1991 requiring continued use of this funding. Note: Pursuant to Section 33334.2(ax3XQ. this exemption expired on June 30,1993 but contracts entered into prior to May 1,1991 may not be subject to the ' n sunset. ❑ Other: Specify code section and reason(s): b. For any exemption claimed on Page 2, Line 3a(4) andlor Line 4a above, identify: Date that initial (la) finding was adopted: Resolution # Date sent to HCD: yr r o day mo day yr Adoption date of rting year finding _—J--J Resolution # Date sent to HCD: mo day yr mo day yr Dderrul(s) 5. a Specify the authority for deferring any set -aside on Line 3a(5). Cheek only one Health and Safety Code Section boxes: ❑ Section 33334.6(d): Applicable to project areas approved before 1986 in which the required resolution was sent to HCD before September 1986 regarding heeding tax increment to meet existing obligations. Existing obligations can include those incurred after 1985, if net proceeds were used to refinance pre-1986 listed obligations. Note The deferrul previously authorized by Section 33334.6(e) expired It was only allowable in euh fiscal year prior to July 1,1996 with certain restrIctions. ❑ Other: Specify code Section and reason: b. For any deferral claimed on Page 2, Line 3a(5) and/or Line 5a above, identify: Date that initial (P) finding was adopted: Resolution # - mo day yr Adoption date of re.,oning veer finding: __j__I_ Resolution # mo day yr Date sent to HCD: mo day day yr Date sent to HCD:�— mo day yr c. A deferred set -aside pursuant to Section 33334.6(d) constitutes indebtedness to the Housing Fund. Summarize the amount(s) of set -aside deferred over the reporting year and cumulatively as of the end of the reporting year: Amount of Prior Cumulative Amount Amount Deferred Deferrals Repaid Deferred (Net of Any Fiscal Year This Reporting FY rnrcino Reoordng C Amouat(s) Repaid) (1) Last Reporting FY $« (2) This Reporting FY $ $ • The Cumulative amount of deferred set -aside should also be shown on HCD-C, Line 8a. If the prior FY cumulative deferral shown above differs from what was reported on the last HCD report (HCD-A and HCD-C), indicate the amount of difference and the reason: Difference: $ Reason(* Catifomia Redevelopmau Agencies — Fiscal Year 2005-2006 Sch A (711106) r +� HCD-AJ Page 3 of 6 63 Agency Name: La Ouinta RedevelOmrrem Agprlcv e s (continued) Project Area Name: Project Area Na I 5. d. Section 33334.6(g) requires any agency which defers set -asides to adapt a plan o eliminate the deficit in subsequent Years. If this agency has deferred set -asides, has it adapted such a plan? Yes ❑ No [I If yes, by what date is the deficit to be eliminated? . _—]--J— mo day yr If yes, when was the original plan adopted for the claimed deferral? mo day yr Identify Resolution # Date Resolution sent to HCD mo day yr When was the last amended plan adopted for the claimed deferral? __f mo day yr Identify Resolution # Date Resolution sent to HCD �_J mo day yr �carar rroiee* Area Htatseholds Iipsplaced and Units and Bedrooms Lost Over ReoottioQ Yeart 6. a. Redevdaoment Project Activity. Pursuant to Sections 33080.4(a)(I) and (a)(3), report by income category the number of elderly and nonelderly households permanently displaced and the number of units and bedrooms removed or destroyed, over the reporting year (refer to Section 33413 for unit and bedroom replacement requirements). Number of Househotds�uurrsnsearoorre Project Activity VL L M AM Total Households Permanently Displaced . Elderly Households Permanently Displaced - Non Elderly Households Permanemly Displaced -Total Units Lost (Removed or Destroyed) and Required to be Replaced Bedrooms Lost (Removed or Destroyed) and Required to he Replaced Above Moderate Units Lost That Agency is Not Required to Replace etvwn Mndarate Bedrooms Lost That Agency is Not Required to Replace b. Other Activity. Pursuant to Sections 33080.4(a)(1) and (a)(3) based on activities other than the destruction or removal of dwelling units and bedrooms retorted on Line 6a report by income category the number of elderly and toneldedy households rermanendv displaced over die retorting yeAr ' Narnba' of Hottsdtolds Other Activity VIL L M AM Total Households Permanently Dis laced - Eldert Households Permanently Displaced -Non Elderly Households Permanently Displaced -Total C. required in Section 3 er tre he poRine veer each replacement housing plan required to be adopted before the permanent displacement, identify, gv bement, destruction, and/or removal of dwelling units and bedrooms impacting the households reported on lines 6a. and 6b. Date _� f_ Name of Agency Custodian mo day yr Date _J—J Name of Agency Custodian mo day yr Please attach a separate sheet of pager listing any additional housing plans adopted. Cslirornia Redevelolmrenl Agencies - fiscal Yes 2005-2006 sch A (7I106) HCD-9. j Page 4 of 64 Agency Name: La Ouinta Redevelopment Aaencv Project Area Name: ProiectArea No 1 Estimated Project Area Households to be Permanently Displaced Over Current Fiscal year: 7. a. As required in Section 33090.4(ax2) for a redevelopment project of the agency, estimate over the current fiscal year, the number of elderly and nareldedy households, by income category, expected to be permanently displaced. (Note: actual displacements will be reported for the next reporting year on Line 6). Number of Households Projed Activity A L M AM Total Households Permanerdly Displaced - Elderly Households Permanently Displaced - Non Elderly EA Households Permanently Displaced - Total b. As required in Section 33413.5, for the current fiscal year, identify each replacement housing plan required to be adopted before the permanent displacement, destruction, and/or removal of dwelling units and bedrooms impacting the households reported in 7a. Date _1—�— mo day yr Date _—J_!— mo day yr Name of Agency Custodian Name of Agency Custodian Please attach a separate sheet of paper listing any additional housing plans ted. Units Developed Inside the Proiect Area to Fulfill R uire rents of Other Pmiect Areafs) g. Pursuant to Section 33413(bx2XAxv), agencies may choose one or more project areas to fulfill anther project area's requirement to construct new or substantially rehabilitate dwelling units, provided the agency conducts a public hearing and finds, based on substantial evidence, that the aggregation of dwelling units in one or more project areas will not cause or exacerbate racial, ethnic, or economic segregation. Were any dwelling units in this project area developed to partially or completely satisfy another project area's requirement to construct new or substantially rehabilitate dwelling units? ® No. ❑ Yes. Date initial finding was adopted? _1,/— Resolution # Date seat to HCD: /_J_ mo day yr mo day yr Catifomia Re&wIOp=nl Agenda — Fiscal Your 2005-2006 Sch A (7/1/06) HCD-A r•.In Page 5 of`'G t 0 65 Agency Name: La Ouinta Redevelopment Avencv Project Area Name: f'oiect Area No l Saks of Ovmer Occupied Units Inside the ProieM Area Prior to the Expiration of Lend Use Controls 9. Section 33413(c)(2XA) specifies that pursuant to an adopted program, which includes but is not limited to an equity sharing program, agencies may permit the sale of owneroccupied units prior to the expiration of the period of the land use controls established by the agency. Agencies must deposit sale proceeds into the Low and Moderate income Hawing fund and within three (3) years from the date the unit was sold, expend funds to make another unit equal in affordability, at the same income level, to the unit sold. a. Sales. Did the agency permit the sale of any owner -occupied units during the reporting year? b, FAUAI Units. ®No ❑Yes Were reporting year funds spent to make units equal in affordability to units sold over the last three'repornng Years" t— Total LMRW Spent On Equal Units Over Number of Units Re rlia Yesr VL L M Total ESALES l This R rting Yr to Units Sold Over This Reporting Yr al This Reporting Yr to Unis Sold One Reporting Yr A o al This Reporting Yr to Units Sold Two ReptiIal This Reoortma Yr to Units Sold Three Reporting Yr. Ago Affordable Units to be Constnuted Inside the Protect Area W ithin Two Years 10. pursuant to Section 33080.4(axlo), report the number of very low, low, and moderate income units to be financed by any federal, of state, local, or private source in order for construction to be completed i hirs from the data thea t=M0l or contract executed over the e000rtine veer. Identity the project and/or contractor, date of the executed agmement or contract, and estimated completion date. Specify the amount reported as an encumbrance on HCD�C, Line 6a. and/or any applicable amount designated on HCD-C, Line 7a. such as for capital outlay or budgeted funds intended to be encumbered for project use within two years from the reporting years agreement or contract date. DO NOT REPORT ANY UNITS ON THIS SCHEDULE A THAT ARE REPORTED ON OTHER HCD-As, B, OR Ds. 1 A Hanks of Project and/or Contractor Agreement Execution Date Col C ColD Col R Estimated Sch C Amount Bch C Amount Completion Date Encumbered Designated L fp Total wfin 2 of Col B $ Line so Line 7a s s s $ s Please attach a separate shed of paper to list additional information. CalifMia Redevelopment Agencies — Fhsoal Year 2005-2006 Sch A (711106) HCD-A (� Page 6 of 6 ITV SCHEDULE HCD-A Inside project Area Activity for Fiscal Year that Ended Agency Name: La Ouinta Redevelopment Aeencv project Area Name: Project Area No 2 preparees Name, Title: Michael Benjamin Associate preparces E-Mail Address: mbeniamin@wehMe com preparees Telephone No: 714-541-4585 ext124 preparer'sFacsimileNo: 714541-1175 GENERAL INFORMATION 1. project Area Information 1989 a I. Year 1" plan for project area was adopted: 003 2. Year that plan was last amended (if applicable): 2003 3. Was plan amended after 2001 to extend time limits per Senate Bill 211(Chapter 741, Statutes of 2001)? Yes_ No�C 4. Current expiration of plan: �� mo day yr b. If project area name has changed, give Previous names) or c. Year(s) of any mergersof the project area: Identify former project areas that merged:- d. Year(s) project area plan was amended involving real property that either: (1) Added property to plan: (2) Removed property from plan: 2. Affordable Housing Replacement andlor Inclusionary or production Requirements (Section 33413). fte-I976 project areas not subsequently amended after 1975: Pursuant to Section 33413(d), only Section 33413(a) replacement requirements apply to dwelling units destroyed or removed after 1995. The Agency can choose to apply all or part of Section 33413 to a project area plan adopted before 1976. If the agency has elected to apply all or part of Section 33413, provide the dale of the resolution and the applicable Section 33413 requirements addressed in the scope of the resolution. Date: _J_ J Resolution Scope (applicable Section 33413 requirements): mo day yr POSA-1975 VWOecl areas and eeo is areas added by amendment after 197 to ore.1976 oroiect areas: Both replaeetncm and inclusjonary or production requirements of Section 33413 apply. NOTE: Amounts to report on HCD-A fines 3a(I), 3b-3f, and 3i. can be taken from what is retorted to the State Controller's Office (SCO) on Report, Statement of Income and Expenditures oansferss--Infrrol of Intl Foods and reporting of � Other Transactions Report, except for the reclassaryiag Sources as discussed below - Transfers -In from other internal funds: Report the amount of transferred funds on applicable: HCD-A, lines Say. For extun rle, report the amount transferred from the Debt Service Fund to the Housing Fund for the deposit of the required set -aside percentage/amonat by reporting gross tax increment on HCD-A, Luce 3a(1) and report the Housing Fund's share of expenditures for debt service on HCD-C, LLine 4c. Q debt r 1. 3at31 when other Sources: Non-GAAP LGenerally Acceptable Accounting Principles) revenues such as from land sales for those agencies using the Land Held for Resale method to record land sales should be reported on HCD-A Lice 3d. Housing fund receipts for the repayment of loan principal should be included on HCD-A Line 3h. HCD-A Catifomia Redevelopment Agencies — Fiscal Year 2005-2006 page 1 of 6 Sch A (7/l/06) rt � if 1 J 67 Agency Name: I a Ouinta Redeveloument Agency Project Area Name: Project Area No 2 p--_-d Area Housing Fund Revenues and Other Sources 3. Report all revenues and other sources of funds from this project area which accrued to die Housing Fund over the reporting year. Any income related to agency -assisted housing located outside the project area(s) should be reported as "Other Revenue" on Line 3j. (of this Schedule A), if this plpieo area is named as beneficiary in dre�orizing resolution. Any other revenue sources not reported on lines 3a: 3i., should also be reported on Line 3j. Enter on Lice 3a(1) the full 100% of grrss Tax Increment allocated prior to awrlieable nags duough of funds and deductions for fees (refer to Sections 33401, 33446, & 33676). Compute the required minimum Percentage (%) of gross Tax Increment and enter the amount on tine 3a(2)(A) or 3a(2XB). Next, report die amount of Tax increment set -aside before any exemption and/or deferral (if amount set aside is less than required minimum M. explain ibe difference). If any amount of Tex Increment was exempted or deferred, in addition to comoletine lines 3a(4) and/or 3a(5) ammlete Ltne 4 and/or Line 5. To determine the amount of Tax Increment deposited to the Housing Fund [Line 3a(6)], subtract allowable amounts exempted [Line 3a(4)] or deferred [Line 3a(5)] from the actual amount allocated to the Housing Fund [Line 3a(3)]. a. Tax Increment: (1) 100% of Gross Allocation. $ 24812,367 (2) Calculate only 1 set -aside amount: either A or M below: (A) 20%required by 33334.2 (Une 3a(1) xLO%): $ 4.962,473 (B) 30% required by 33333.10(g) (Line 3a(1) x LO%): $ (senate Bill 211, Chapter 741, Statutes of 2001) (3) Amount of set -aside (Line 3a(2)) allocated to Housing Fund $ 4962.474 _' If, pursuant to Section 33334.3(i), less than the minimum % of Gross Tax Increment (see 3a(2) above) is being allocated from (his project area, identify the project area(s) contributing the difference. Explain any other reason(s): (4) Amount Exempted [Health & Safety Code Section 33334.21 ) (if there is an amount exempted also complete question #4, next page): ($ (5) Amount Deferred [Health & Safety Code Section 33334.6) ) (if there is an amount deferred, also complete question #5, next page): ($ (6) Total deposit to the Housing Fund [result of Line 3a(3) through 3a(5)]: $ 4.962.474 $ 1090656 b. Interest Income: c. RentaUf ease Income (combine amounts separately reported to the SCO): $ 15,320 d. Sale of Real Estate: $ e. Grants (combine amowas separately reported to the SCO): $ f. Bond Administrative Fees: $ g. Deferral Repayments (also complete Une 5c(2) on the next page): $ $LL— h. Loan Repayments: $ i. Debt Proceeds: j. other Revenue(s) [Explain and identify ar ount(s)]: $ k Total Project Area Receipts Deposited to Housing Fund (add lines 3a(6). through 30: $ 6,369581 HCD-A California Rc&wlopmem Agencies — Fiscal year 2005-2006 Page 2 of 6 Sch A (7ti/06) r1 (] V I 1 68 Agency Name: La Ouinta Redevelotmtent Agency Project Area Name: Pm)ect Area No 2 &SM&onUs 4. a. If an exemption was claimed on Page 2, Line 3a(4) to deposit less than the required amoun4 complete the following information: Check only one of the Health and Safety Code Sections below providing a basis for the exemption: ❑ Section 33334.2(axl): No reed in community to incneasefimprove supply of lower or moderate income housing. ❑ Section 33334.2(ax2): Less than the minimum set -aside % (20% or 30%) is sufficient to meet the need ❑ Section 33334.2(ax3): Community is making substantial effort equivalent in value to minimum set -aside % (20% or 30%) —A h*c erwrifr rontmetual obligations incurred before May 1, 1991 requiring continued use of this funding. Note: Pursuant to Sectton 33334.Z(ex3)(C), this exemption expired an June 30,1993 but contracts entered unto prior a 1,1991 may not be subject to the exemption sunset. ❑ Other: Specify code section and reason(s): b. For any exemption claimed on Page 2, line 3a(4) and/or Line 4a above, identify: Date that initial 0") findine was adopted: tt o ! Resolution # Date sent to HCD: mho day yr Yyr Adoption date of =gjljng veer findine: _I—/_ Resolution # Date sent to HCD: mo day yr mo day yr Defelral(sl 5. a. Specify the authority for deferring any set -aside on Line 3a(5). Check only one Health and Safety Code Section boxes: ❑ Section 33334.6(d): Applicable to project areas approved before 1996 in which the required resolution was sent to HCD before September 1986 regarding needing tax increment to meet existing obligations. Existing obligations can include those incurred after 1995, if net proceeds were used to refinance pre-1986listed obligations. Note: The deferral previously authorized by Section 33334,6(e) expired. It was only allowable in each rrscal year prior to July 1,1996 with certain restrictions. ❑ Other. Specify code Section and reason: b. For any deferral claimed on Page 2, Line 3a(5) and/or Line 5a above, identify: Date that initial f I ") fndin was adopted: mo day / Resolution # Date sent to HCD: mo day yr Adoption date of renomina year findine: —! /_ Resolution # Date sent to HCD: m day / yr Too day yr c. A deferred set -aside pursuant to Section 33334.6(d) constitutes indebtedness to the Housing Fund Summarize the amount(s) Of set -aside deferred over the reporting year and cumulatively as of the end of the reporting year: Fiscal Year (1) Last Reporting FY Amount of Prior Cumulative Amount Amount Deferred Deferrals Repaid Deferred (Net of Any This Reoortine FY nnri�fte FY Amount(s) Repaid) (2) This Reporting FY I $ I $ I $ * J� * The cumulative amount of deferred set -aside should also be shown on HCD-C, Line 8 If the prior FY cumulative deferral shown above differs from what was reported on the last HCD report (HCD-A and HCD-C), indicate the amount of difference and the reason: Difference:5 Reason(s): csiirwT is Redevelopment Agencies — F-al Year 200`2006 Sch A (7i1106) HCD-A page,3tef 6 �.J J J m Agency Name: I a Ouinta Redevelopment A¢encv e 1s (continued) Project Area Name: hWeetAreallo Z — 5' which defers set -asides to adopt a plan to eliminate the deficit in subsequent years. d. Section 33334.6(g) requires any agency If this agency has deferred set -asides, has it adopted such a plan? Yes ❑ No ❑ If yes, by what date is the deficit to be eliminated? mo day yr If yes, when was the 2dgW plan adopted for the claimed deferral? mo day yr Identify Resolution # Date Resolution sent to HCD mo day yr When was the last amended plan adopted for the claimed deferral?mo day yr Identify Resolution # Date Resolution sent to HCD mo day yr A,yu t t Ana Households Displaced atd Units end Bedrooms Lost Ova Reportine Year• R�levelopment ProieM Aetivi". Pursuant to Sections 33080.4(a)(1) and (ax3), report by income category the number of elderler y and noneldery households permanently displaced and the number of units and bedrooms removed or destroyed vpv A,n .rm,fian vrar. (refer to Section 33413 for unit and bedroom replacement requirements). 6. b. C. raw day yr Date __ _ J— uno day yr Please attach Other Activity. Pursuant to Sections 33080.4(axl) and (ax3) based on activities other than the destruction or removat or dwelling units and bedrooms reported on Line 6% report by income category the number of elderly and noneldedy households _----- I.. A:.-I.,AA nary thY renting Year: As required in Section 33413.5, identify, over the reportin¢ year, each replacement housing plan required to be adopted before the permanent displacement, destruction, andfor removal of dwelling units and bedrooms impacting the households reported on lines 6a. and 6b. Date _J_1_ Name of Agency Custodian Name of Agency Custodian Cgifomia Redevelopment Agencies - Fiscal Year 2W5-2006 Sch A (711/06) additional HCD-A Paaggeff4 of 6 tJQ1 70 Agency Name: l Ouinta Redevelopment A eg_ncy Project Area Name: Project Area No 2 ]Estimated project Areagmwholds to be Permanently Di9nlaeed Over Current Fiscal Year. 7. a. As required in Section 33090.4(a)(2) for a redevelopment projea of the agency, estimate over the current fiscal year the number of elderly and nonelderly households, by income category, expected to be permanently displaced. (Note: actual displacements will be repotted for the (text repotting year on True 6). N.....l.e. nr irnnaelydda Pr ACtlVWV Vl L -- - M AM Total Households Permanent/ Displaced - Elder/ Households Permanently Displaced - Non Elderly Households Permanently Displaced - Total b. As required in Section 33413.5, for the cmrent fiscal year. identify each replacement housing plan required to be adopted before the permanent displacement, destruction, and/or removal of dwelling wits and bedrooms impacting the households reported in 7, Date mo day yr Date _J--J— mo day Yr Please attach a Name of Agency Custodian Name of Agency Custodian sheet of Units Deveiolred Inside the Project Ares to FatCdi Resuirm oats of Other Project Areas) g. Pursuant to Section 33413(bX2XAXv), agencies may choose one or more project areas to fulfill another project area's requirement to construct new or substantially rehabilitate dwelling units, provided the agency conducts a public hearing and finds, based on substantial evidence, that the aggregation of dwelling units in one or more project areas will not cause Of exacerbate meial. ethnic, or economic segregation. Were any dwelling units in this project area developed to partially or completely satisfy another project area's requirement to construct new or substantially rehabilitate dwelling units? ® No. ❑ Yes. Date initial finding was adopted? _JJ Resolution # Date sent to HCD: --j.—J— mo day yr mo day Yr Cstifomin Redevelopment Agencies — FSeal Year 2005.2006 Sch A(711/06) HCD-A Pa e5of6 71 Agency Name: I a Ouinta Redevelopment AMmy project Area Name: Projeet Area No 2 Sales of OwM-Oceuriled Units Inside the Proiect Area Prior to the Expiration of Land Use Controls 9. Section 33413(cx2XA) specifies that pursuant to an adopted program which includes but is not limited to an equity sharing program, agencies may permit the sale of owner -occupied units prior to the expiration of the period of the land use controls established by the agency. Agencies must deposit sale proceeds into the Low and Moderate Income Housing Fund and within three (3) years from the date the unit was sold expend funds to snake another unit equal in affordability, at the same income level, to the unit sold. a Sales. Did the agency permit the sale of any owner -occupied units during the reporting year? ®No C]Yes a— Total Proceeds From Sales Over Reporting Year Number of Units b. Were reporting year funds spent to snake units equal in affordability to units sold over the last three reporting years? $ F Total LMIHF Spent On Equal Units OverbrIM Vamoer or tints ReportingYear SALES Units Made Equal This Reporting Yr to Units Sold Over This Repottin YrUnits Made Equal This Reporting Yr to Units Sold One Reporting Yr AgoUnits Made Equal This R rtiYr to Units Sold Two RsporUn Yrs AgoUn-Its Made Equal This Reporting Yr to Units Sold Three Reporting Yrs Ag UnitsAffor Althle be Constructed inside the Project Area Within Two Years to. Pursuant to Section 33090.4(ax10), report the number of very low, low, and moderate income units to be financed by any federal, state, local, or private source in order for construction to be completed within two years from the date of the areement or contract executed over the reppr ina veer. identify the project and/or contractor, date of the executed agreement or contract, and estimated completion date. Specify the amount reported as an encumbrance on HCD-C, line 6a. and/or any applicable amount designated on HCD-C, Lice 7a. such as for capital outlay or budgeted funds intended to be encumbered for project use within two years from the reporting year's agreement or contract date. DO NOT REPORT ANY UNITS ON THIS SCHEDULE A THAT ARE REPORTED ON OTHER HCD-As, B, OR Ds. AM nt n Col C Estimated Completion Date Win 2 of Col BVL Munwe X L M Total Please attach a separate sheet of paper to list additional information. California Redeveloprtxnt Agencies — Fswl Year 2005-2006 Sch A (711106) HCD-A '691d6 72 SCHEDULE HCD-C Agency -wide Activity for Fiscal Year Ended A I� Agency Name: La Outnta Redevelopment Agency County: Riverside - ,chael Beniamin Associate Preparers E-Mail Address: m eniaminQWbng.epm_ Prepares s Name, Title: M' preparer's Telephone No: 714-541-4585 ext. 124 Preparer's Facsimile No: 714-541-1175 Low & Moderate Income Housing Funds Report on the "status and use of the agency's Low and Moderate Income Hosing Fund." Most information reported here should be based on information reported to the State Controller. 1, Hegjouing Balance (Use "Net Resources Avaaable" from last fiscal year report to HCD) $ 76 209.136 a. If Begmnt ag Balance reouires adjustment(s).describe and Mvide dollar mount (positive/nevative) making uD total adjustment: Use < $ > for negative amounts or amounts to be subtracted. $ $ s b. Adjusted Beginning Balance [Beginning Balance plus + or minus <-> Total Adjusbnent(s)) $ 76,209036 2. project Area(s) Receipts and Housing Fund Revenues IL Total Project Areas) Receipts Total Summed amount of HCD-Schedule A(s) (from Line 3k) $ 19 62L708 b. Housing Fund Resources Lot- reported on HCD Schedule -A(s) Describe and provide Dollar Amount(s) (Positive/Negative) Making Up Total Housing Fund Resources $ $ c. Total Hosing Fund Resources $ 3. Total Resources (Line I b. +Line 2a +Line 2c.) $ 95,837,844 NOTES: Many amounts to report as Expenditures and Other Uses (beginning on the next page) should be taken from amounts reported to the State Controllers Office (SCO). Review the SCO's Redevelopment Agencies Financial Transactions Report. Housing Fund "transfers -out' to other internal Agency funds: Report the specific use of all transferred funds on applicable lines 4a: k of Schedule C. For example, transfers from the Housing Fund to the Debt Service Fund for the repayment of principal and interest of debt proceeds deposited to the Housing Fund should be reported on the applicable item comprising HCD-C Line 4c, providing tax increment (gross and deposit amounts) were reported on Sch-As. External transfers out of the Agency should be reported on HCD-C Lira; 4j (e.g.: transfer of excess surplus to the County Housing Authority). Other Uses: Non-GAAP (_Generally Accepted Accounting principles) recording of expenditures such as land purchases for agencies using the Land Held for Resale method to record land purchases should be reported on HCD-C Line 40(1). Funds spent resulting in loans to the Housing Fund should be included in HCD-C lines 4b., 4f., 4g., 4h., and 4i as appropriate. The statutory cite pertaining to Community Redevelopment law (CRL) is provided for preparers to review to determine the appropriateness of Low and Moderate Income Housing Fund (IMIRF) expenditures and other uses. HCD does not represent that line items identifying any expenditures and other uses are allowable. CRL is accessible on the Internet lwebsite: htlp7//www-1 Rinfic.ca.gov/ (California Law)] beginning with Section 33000 of the Health and Sefety Code. California Redevelopment Agencies - Fiscal Year 2005-2006 sch c (7/1/06) HCD-C U - 4 page 1 of 10 VIC] Agency Name: La Ouinta Redevelgpment Agency 4. Expenditures, Loans, and Other Uses IL Acquisition of Property & Building Sites 193434 2(eH Ill & Housing 133334 2(t)(MI: (1) Land Purchases (Irtyestment - (and Held for Resale) * $ (2) Housing Assets (Fixed Asset) * $ (3) Acquisition Expense $ 56,590 (4) Operation of Acquired Property $ 1,075 (5) Relocation Costs $ (6) Relocation Payments $ 111,936 (7) Site Clearance Costs $ (8) Disposal Costs $ (9) Other [Explain and identify amount(s)]: $ $ $ * Reported to SCO as part of Assets and Other Debts (10) Subtotal Property/Building Sites/Housing Acquisition (Sum of Lines 1 - 9) $ 169,601 b. Subsidies (1) (2) (3) (4) from Low and Moderate Income Housing Fund (LMIKD! I" Time Homebuyer Down Payment Assistance Rental Subsidies purchase of Affordability Covenants [33413(b)2(B)l Other (Explain and identify amount(s)]: $ $ $ $ $ 331,050 $ $ (5) Subtotal Subsidies from LMIHF (Sum of Lines 1- 4) $ 331,050 Debt Gry cc 133334.2(elML If paid from LMIHF, report LMBff's share of debt service. If paid from C. Debt Service Fund, ensure "gross' tax increment is reported on HCD-A(s) Line 3a(l). (1) Debt Principal Payments $ 5,652,556 (a) Tax Allocation, Bonds & Notes (b) Revenue Bonds & Certificates of Participation $ (c) City/County Advances & Loans $ 2,875,538 (d) U. S. State & Other Long Term Debt $ (2) Interest Expense $ (3) Debt Issuance Costs $ (4) 'Other (Explain and identify amount(s)]: (5) Subtotal Debt ;m- ce (Sum of Lines 1 - 4) $ 8,528,094 d. Planning and Administration Costs 133334 3(el(Ill $ 516,043 (1) Administration Costs (2) Professional Services (non VrWect specific) $ (3) Planning/SurveyMesign (non projects ' rcl $$1,021.412 (4) Indirect Nonprofit Costs (333343(exlxB)1 (5) Other [Explain and identify amount(s)]: $ $ $ (6) Subtotal Planning and Administration (Sum of Lines 1 - 5) $ 1,541,455 O CJ HCD-C Catiromia Redevelopment Agencies -Fiscal Year 2005-2006 Page 2 of 10 Sch C (711/06) 74 Agency Name: La Ouiala Redevelonment Agency 4. Expenditures, Loans, and Other Uses (continued) e. On/Off-Site Improvements [33334.2(e)(2)] Complete item 13 $ f. Housing Construction [33334.2(e)(5)] $ g. Housing Rehabilitation [33334.2(e)(7)) $ 540,839 h. Maintain Supply of Mobilehome Parks [33334.2(e)(10)] $ i. Preservation of At -Risk Units [33334.2(e)(I 1)] $ j. Transfers Out of Agency (1) For Transit village Development Plan (33334.19) $ (2) Excess Surplus [33334.12(a)(1)(A)] (3) Other (specify code section authorizing transfer and amount) A. Section $ B. Section $ Other Transfers Subtotal $ (4) Subtotal Transfers Out of Agency (Sum of j(1) through j(3)) $ 540,839 k. Other Expenditures, Loans, and Uses [Explain and identify amount(s)]: Sexed Trust Doeds $ 957,002 S S Subtotal Other Expenditures, Loans, and Uses $ 957,002 1. Total Expenditures, Loans, and Other Uses (Sum of lines 4a-k.) $ 12,068,041 S. Net Resources Available [End of Reporting Fiscal Year] [Page 1, Line 3, Total Resoutces minus Total Expenditures, Loans, and Other Uses on Lice 411 6. Encumbrances and Unencumbered Balance a. Encumbrancer. Amount of Line 5 reserved for future payment of legal commact(s) or alleerwnt(s). See Section 33334.12(gH2) for definition. Refer to item 10 on Sch-A(s) and item 4 on Sch-B. It. Unencumbered Balance (Line 5 minus Line 6a). Also enter on Page 4, Line 1 la 7. Designated/Undesignated Amount of Available Funds a Designated From lace 6b- Budgetedlplanned to use near -term $ Refer to item 10 on Sch-A(s) and item 4 on Sch-B b. Undesignated From Line 6b- Portion not yg budgeted/planned to use $ $ 60,732,221 $ 23,037,982 $ 83,769,803 8. Other Housing Fund Assets (non recurrent receivables) not included as part of line 5 a. Indebtedness from Deferrals of Tax Increment (Sec. 33334.6) $ [refer to Scb-A(s), Dane 5c (2)]. b. Value of Land Purchased with Housing Funds and Held for Development of Affordable Housing. Complete Sch-C item 14. S e. Loans Receivable for Housing Activities d. Residual Receipt Loans (periodictfluctuating payments) $ e. ERAF Loans Receivable (all years) (Sec. 33681) $ f. Other Assets [Explain and identify amount(s)k S S $ g. Total her Housing Fund Assets (Sum of lines 8a-f.) F $ 83,7�69,Ho3 9. TOTAL FUND EQUITY[L[ne 5 (Net Resources Available) +89 (Total Other Housing and Asaeisl Compare Line 9 to the below amount reported to the SCO (Balance Sheet of Redevelopment ngcnutca Financial Transactions Report. [Explain differences and identify amount($)]: $ ENTBR IAW-MOD FUND TOTAL FAUITIES (BALANCE SI1EEf) REPORTED TO SCO $ 83,769,803 nj Califomia R0&ve1optwn1 Agencies — Fiscal Year 2WS-2006 Page 3 of ge 3 of 0 t l0 Sch C (711/06) VIP Agency Name: La Ouinta Redevelopment Agency Excess Surplus Information pursuant to Section 33080.7 and Section 33334.12(gx 1), report on Excess Surplus that is required to be determined on the first day of a fiscal year. Excess Surplus exists when the Adjusted Balance exceeds the greater of: (1) $1,000,000 or (2) the aggregate amount of tax increment deposited to the Housing Fund during the prior four fiscal years. Section 33334.12(g)(3XA) and (B) provide that the Unencumbered Balance can be adjusted for: (1) any remaining revenue generated in the reporting year from unspent debt proceeds and (2) if the land was disposed of during the reporting year to develop affordable housing, the difference between the fair market value of land and the value received. The Unencumbered Balance is calculated by subtracting encumbrances from Net Resources Available. "Encumbrances" are funds reserved and committed pursuant to a legally enforceable contract or agreement for expenditure for authorized redevelopment housing activities [Section 33334.12(g)(2)]. For Excess Surplus calculation purposes, carry over the prior year's HCD Schedule C Adjusted Balance as the Adjusted Balance on the first day of the reporting fiscal year. Determine which is larger: (1) $1 million or (2) the total of tax increment deposited over the prior four years. Subtract the largest amount from the Adjusted Balance arid, if positive, report the amount as Excess Surplus. it. Re rti Year Ending Unencumbered Balance and Adjusted manse: $ 23.o37,sg2 a Unencumbered Balance (End of Year) [Page 3, Line 6b] b. If eligible, adjust the Unencumbered Balance for: (l) Debt Proceeds[33334.12(gx3XB)]: Identifyinismnt debt proceeds and related income remaining at end of reporting year $ (2) Land Conveyance Leases [(33334.I2(g)(3)(A))]: Identify MRgl ina Year losses from sales/grantalleases of land acquired with low -mod funds, ff 49% or more of new or rehabilitated units will be affordable to lower -income households $ 12. Adjusted Balance (for next year's determination of Excess Surplus) [Line 11 a minus sum of 1 lb(1) and 11 b(2)] $ 23,037,582 Nttte: Do not enter Adjusted Balance in Colo. It is to be reportem as mast Years in aaya. if If there is remaining Excess Surplus from what was determined on the first day of the reporting year, describe the agency's plan (as specified in Section 33334.10) for transferring, encumbering, or expending excess surplus: b. If the plan described in I U was adopted, enter the plan adoption date:�— mo day yr (? rf v J + HCD-C California Reckvelopment Agencies — Fiscal Year ?005-2006 page 4 of 10 Sch C (7111W) 76 Agency Name: La Quinta Redevelopment Agency Miscellaneous Uses of Ftitnds 13. If an amount is reported in 4e., pursuant to Section 33080.4(a)(6), report the total number of very low-, low-, and moderate -income households that directly benefited from expenditures for onsite/offsite improvements which resulted in either new construction, rehabilitation, or the elimination of health and safety hazards. (Note: If lane 4e of this schedule does not show expenditures for improvements, no units should be reported here.) Income Level Households Constructed Households Rehabilitated Households Benefiting from Elimination of Health and Safety Hazard Duration of Deed Restriction Very Low Low Moderate 14. If the agency is holding land for future housing development (refer to Litt 8b), summarize the acreage (round to tenths, do not report square footage), zoning, date of purchase, and the anticipated start date for the housing development. Please attach a separate sheet of paper listing any additional sites not reported above• 15. Section 33334.13 requires agencies which have used the Housing Fund to assist mortgagors in a homeownershlP mortgage revenue bond program, or home financing program described in that Section, to provide the following information: a. Has your agency used the authority related to definitions of income or family size adjustment factors provided in Section 33334.13(a)? yes ❑ No ❑ Not Applicable b. Has the agency complied with requirements in Section 33334.13(b) related to assistance for very low-income households equal to twice that provided for above moderate -income households? Yes ❑ No ❑ Not Applicable California Redevelopment Agencies — Fiscal Year 2005-2006 sch C (7/1106) —ry, n 116-C Page 5 of 10 77 Agency Name: La Ouinta Redevelopment Agency 16. Did the Agency use non-LMIHF funds as matching funds for the Federal HOME or HOPE program during the reporting period? If yes, please indicate the amount of non-I.M]W funds that were used for either HOME or HOPE program support. HOME $ HOPE $ 17. Pursuant to Section 33080.4(axl I), the agency shall maintain adequate records to identify the date and amount of all I.MIHF deposits and withdrawals during the reporting period. To satisfy this requirement, the Agency should keep and make available upon request any and all deposit and withdrawal information. DO NOT SUBMIT ANYDOa MFMINMCOBDS. Has your agency made any deposits to or withdrawals from the LMIHF? Yes ❑ No If yes, identify the document(s) describing the agency's deposits and withdrawals by listing for each document, the following (attach additional pages of similar information below as necessary): Name of document (e.g. lodger, journal, etc.): Name of Agency Custodian (person): Custodian's telephone number. Place where record can be accessed: Name of document (e.g. ledger, journal, etc.): Name of Agency Custodian (person): Custodian's telephone number: Place where record can be accessed: 18. Use of Other (non Low -Mod Ema ) Redevelopment Funds for Housing Please briefly describe the use of any non-LMIHF redevelopment funds Ox., contributions from the other 80%of tax increment revenue or other non Low -Mod funds) to construct, improve, assist, or preserve housing in the community. 19. SpP¢estions/ResourceNeeds Please provide suggestions to simplify and improve future agency reporting and identify any training, information, and/or other resources, etc. that would help your agency to more quickly and effectively use its housing or other funds to increase, improve, and preserve affordable housing? 20. Annual Monitmrine Reports of Previously Comaleted Affordable Haosina Protect /Prroerams (H&SC 33418 Were all Annual Monitoring Reports received for all prior years' affordable housing projects/programs? Yes ® No ❑ California Redevelopment Agencies — Fiscal Year 2005-�A06 HJ1 p Sch C (711106) Page o Agency Name: La Ouinta Redevelopment Agency 21. Excess Surplus Fxpendkure Plan (H&SC 33334.10(a) r HCD-C California Redevelopm t Agencies — Fual Year 2W5-2(xM Page 7 of 10 Sch C (711106) 79 Agency Name: La Ouinta Redevelopment Agency 22. Footnote area to provide additional information. Califomia Redevelopment Agencies —Fiscal Year 2005-2006 Sch C (711106) HCD-C Page 8 of 10 DII Agency Name: La Ouinta Redevelopment Agency 23. Project Addevemmt and HCD Director's Award for Housing Excellence Project achievement information is optional but can serve important purposes: Agencies' achievements can inform others of successful redevelopment projects and provide instructive information for additional successful projects. Achievements may be included in HCD's Annual Report of Housing Activities of California Redevelopment Agencies to assist other local agencies in developing effective and efficient programs to address local housing needs. In addition, HCD may select various projects to receive the Director's Award for Housing Excellence. Projects may be selected based on criteria such as local affordable housing need(s) met, resources utilized, barriers overcome, and project innovation/complexity, etc. Project achievement information should only be submitted for one affordable residential project that was completed within the reporting year as evidenced by a Certificate of Occupancy. The project must not have been previously reported as an achievement. To publish agencies' achievements in a standard format, please complete information for each underlined category below addressing suggested topics in a narrative format that does not exceed two pages (see example, next page). In addition to submitting information with other HCD forms to the State Controller, please submit achievement information on a 3.5 inch diskette and identify the software type and version. For convenience, the diskette can be separately mailed to: HCD Policy Division, 1800 are Street, Sacramento, CA 95814 or data can be entailed by attaching the file and sending it to: rlev%-@hcd.eagov. ACBNCY INEORMATION •. Project Type (Choose one of the categories below and ou kind of assistance representing the ndmsn project type): Tow/Additional Units (Previously Unoceuoied/ ininhabitable): Existing Units (Previously Occaoied) - Rehabilitation of owner -Occupied - New Construction to own - Rehabilitation of Tenant -Occupied - New Construction to rent - Acquisition and Rehabilitation to Own - Rehabilitation to own - Acquisition and Rehabilitation to Rent - Rehabilitation to rent - Adaptive Re -use - Mobilehomes/Manufactured Homes - Mixed Use Infrll - Payment Assistance for Owner or Renter - Mobilehomes/Manufactured Homes - Transitional Housing - Mortgage Assistance - Other (describe) - Transitional Housing - Other (describe) • Agency Name: • Agency Contact and Telephone Number for the Project: pESCRII'7'lON • Project Name • Clientele served [owner, renter, income group, special need (e.g. large family or disabled), etc.] • Number and type of units and location, density, and size of project relative to other projects, etc. • Degree of affordability/assistance rendered to families by project, etc. • Uniqueness (land use, design features, additional serviceshimenities provided, funding sources/collaboration, befarelafterproject conversion such as re -use, mixed use, etc.) • Cost (acquisition, clean-up, infrastructure, conversion, development, etc.) HISTORY • Timeframe from planning to opening • Bardershesistance (legal/frnanciallcommunity, etc.) that were overcome • Problems and creative solutions found • Lessons learned and/or recommendations for undertaking a similar project AGENCY ROLE AND ACHH4VEMENT • Degree of involvement with concept, design, approval, financing, construction, operation, and cost, etc. • Specific agency and/or community goals and objectives met, etc. California Redevelopman Agencim - Fiscal Year 2005-2W6 HCD-C sch C (7t1ro6) Page 9 of 10 81 Agency Name: La Ouinta Redeveloolnent Agency ACHIEVEMENT EXAMPLE Protect Tyne: NEW CONSTRUCTION- OWNER OCCUPIED Redevelopment Agency Contact: Name (Area Code) Telephone # Project/Program Name: Project or Program Description During the reporting year, construction of 12 homes was completed. Enterprises, which specializes in community self-help projects, was the developer, assisting 12 families in the construction of their new homes. The homes took 10 months to build. The families' work on the homes was converted into "sweat equity" valued at $15,000. The first mortgage was from CHFA. Families were also given an affordable second mortgage. The second and third mortgage loans were funded by I MW and HOME funds. History The (City or County) of struggled for several years over what to do about the area. The tried to encourage development in the area by rezoning a large portion of the area for multi -family use, and twice attempted to create improvement districts. None of these efforts were successful and the area continued to deteriorate, sparking growing concern among city officials and residents. At the point that the Redevelopment Agency became involved, there was significant ill will between the residents of the and the (City or County). The introduced the project in with discussions of how the Agency could become involved in improving the blighted residential neighborhood centering on This area is in the core area of town and was developed with ditionately narrow, deep lots, based on a subdivision plat laid in 1950. Residents built their homes spropor on the street frontages of and leaving large back -lot areas that were landlocked and unsuitable for development, having no access to either avenue. The Agency worked with 24 property owners to purchase portions of their properties. Over several years, the Agency purchased enough property to complete a tract map creating access and lots for building. Other non -profits have created an additional twelve affordable homes. Agency Role The Agency played the central role. The Project is a classic example of successful redevelopment. All elements of blight were present: irregular, land -locked parcels without access; numerous property owners; development that lagged behind that of the surrounding municipal property; high development cost due to need for installation of street improvements, utilities, a storm drain system, and undergrounding of a flood control creek; and a low-income neighborhood in which property sale prices would not support high development costs. The Agency determined that the best development for the area would be single-family owner -occupied homes. The Agency bonded its tax increment to fund the off -site improvements. A tract map was completed providing for the installation Creek. of the street improvements, utilities, storm drainage, and the undergrounding of These improvements cost the Agency approximately $1.5 million. In lieu of using the eminent domain process, the Agency negotiated with 22 property owners to purchase portions of their property, allowing for access to the landlocked parcels. This helped foster trust and good will during the course of the negotiations. The Project got underway once sufficient property was purchased. ItCII�CJ Califomia Redevelopnxnt Agencies — Fiscal Year 2005-2006 Page 10 of to Sch C (711106) F*VA SCHEDULE HCD-D2 REPLACEMENT HOUSING UNITS (units not claimed on Schedule D-5,6,7) restricted units that fulfill requirement to replace previously destroyed or removed units) Agency: La Ouinta Redevelopment Agency Redevelopment Project Area Name, gi "Outside": Project Area No.1 Affordable Housing Project Name: La Quinta Housing Program — Home Purchase Loan Program2 Check only one: ® Inside Project Area ❑ Outside Project Area Check only one. If both apply, complete a separate form for each (with another Sch D-1): ❑ Alien Developed ® Non-Aaencv Developed Check only one. If both apply, complete a separate form for each (with another Sch D-1): ❑ Rental ® Owner -Occupied Enter the number of restricted replacement units and bedrooms for each applicable activity below: Note: °INELG° refers to a household that is no longer eligible but still a temporary resident and part of the total A. New Construction: Elderly Units Non Eld" Units L( Elderly f: Non Elderly Units VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 2 2 2 2 Count of Bedrooms (e ¢ 1 elderly. low, 2 bdrm unit and 4 now—Meft low, 2 btlrm units =10 low (2 bdrms x 5) 1 Bedroom Unit (i x 0 of units) 2 Bedroom Unit (2 x a of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 3 Bedroom Unit (3 x s of units) 4 or more Bedroom Una (4 x rt of units) VLOW LOW MOD TOTAL INELG. (VLOW LOW MOD TOTAL INELG. I 1 4 4 F]l TOTAL (sum of all unit Bedrooms) VLOW LOW MOD TOTAL INELG. I I �J= = B. Substantial Rehabilitation (Post 931AS 1290 definition: increased value inclusive of land is >25%): Elderly Units Non Elderly Units Totsl Elderly & Non Elderly Units VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 4 4 F--] 4 4 Count of Bedrooms (e 1 elderly, mod 1 bdrm unit and 2 nonelderly, mod.1 Was units = 3 mod (I bdrms x 3) 1 Bedroom Unit (1 x A of units) 2 Bedroom Unit (2 x a of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 3 Bedroom Unit (3 x e of units) 4 or more Bedroom unit (4 x i of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 12 1 1 _= F71 1 I� TOTAL (sum of all unit Bedrooms) VLOW LOW MOD TOTAL INELG. 12 12 V J 1 California Redevelopment Agencies. Fiscal Year 2005.2006 HCD-D2 Sch D2 (7rua) Page 1 of 2 83 Agency Name: La Ouinta Redevelopment Agency Housing Project Name: La Ouinta Housing Program - Home Purchase Loan Program SCHEDULE HCD-D2 REPLACEMENT HOUSING UNITS (continued) Note: "INELG° refers to a household that is no longer eligible but still a temporary resident and part of the total C. Non -Substantial Rehabilitation (fulfills Pre 94 Replacement Obligation): Elderly Units Non Elderly Units IM Elderly fi Non Elderly Units VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. = F71 -L� = Count of Bedrooms (e e 3 nonelderly, view, 3 bdrm units and 4 nonelderly 4 bdrm units TOTAL 25 bdrms) t Bedroom unit (t x a of units) 2 Bedroom Unit (2 x 4 of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG- 3 Bedroom Unit (3 x a of units) 4 or more Bedroom Unit (4 x • of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. TOTAL (sum of all unit Bedrooms) VLOW LOW MOD TOTAL INELG. TOTAL UNITS (Add only TOTAL of all "Total Elderly / Non Elderly Units" not bedrooms): If TOTAL UNITS is trss than "Total Project Units" on HGD Sch DI, repd dte remaining units as instructed below. Check all appropriate forms) listed below that will be used to identify remaining Project Units to be reported: Inclusionary Units Other Housing Units Provided: ® Inside Project Area (Sch HCD-D3) ® With LMIHF (Sch HCD-D5) ❑ outside Project Area (Sch HCD-D4) ❑Wit❑ houtstanclHe ((Sc HCD-D ) No Identify the number of Replacement U s which also have been counted as Inclusionary Units: Elderly Units Non Elderly Units Total Elderly 6 Non Elderly Units VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. California Redevelopment Agencies - Fiscal Year 2005-2006 HCD-D2 Sch D2 (7/1106) Page 2 of 2 84 SCHEDULE HCD-D2 REPLACEMENT HOUSING UNITS (units not claimed on Schedule 0447) restricted units that fulfill requirement to replace previously destroyed or removed units) Agency: Le Quints Redevelopment Agency Redevelopment Project Area Name, or "Outside": Project Area No. 2 Affordable Housing Project Name: La Quints Housing Program - Home Purchase Loan Program2 Check only one: ® Insi a Project Area ❑ Outside Project Area Check only one. If both apply, complete a separate form for each (with another Sch D•1): ❑ Agen Developed ® Non-Acenw Developed Check only one. N both apply, complete a separate form for each (with another Sch D-1): ❑ Rental ® Owner -Occupied Enter the number of restricted replacement units and bedrooms for each applicable activity below: Note: "INELG" refers to a household that is no longer eligible but still a temporary resident and part of the total A. New Construction: Elderly Units Non Elderly Units to Elderly&Non Elderly Units VLOW LOW MOD TOT INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 1 ( 12 13 = I 1 l 1 12 13 Count of Bedrooms (ex 1 elderly. low. 2 bdrm tell and 4 nonelderly low, 2 bdrm anus =10Joy (2 bdrmsx S) 1 Bedroom Unit (1 x s of units) 2 Bedroom Unit (2 x a of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 8 8 3 Bedroom Unit IS x 4 of units) 4 or more Bedroom Unit (4 x 0 at units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 3 1 21 24 TOTAL (sum of all unit Bedrooms) VLOW LOW MOD TOTAL INELG. 3 1 32 35 B. Substantial Rehabilitation (Post 93/AB 1200 definition: Increased value inclusive of land. is >25961: Elderly Units Non Elderly Units I4191 Elderly a Non EkWY Units VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. ��= 4 4 4 4 Coast of Bedrooms lee 1 elderly, mod 1 bdrm unit and 2 nonelderiv mod 1 bdrm units = 3 mod f 1 bdrms x 3 1 Bedroom Unit (1 x s of units) 2 Bedroom Unit (2 x s of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 3 Bedroom Unit (3 x s of units) 4 or more Bedroom Unit (4 x s of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 4 4a a TOTAL (sum of all unit Bedrooms) VOWW Lr0W�MOD TOTAL INELG 4. JJ California Redevelopment Agencies - Fiscal Year 2005.2006 HCD-D2 Page I of 2 Sch D2 (7/1/06) Agency Name: l.a Ouinta Redevelopment Agency Housing Project Name: La 7uinta Housing Program — Home Purchase Loan Program SCHEDULE HCD-D2 REPLACEMENT HOUSING UNITS (continued) Note: "INELG" refers to a household that is no longer eligible but still a temporary resident and part Of the total C. Non -Su tantial Rehabilitation (fuHilla Pre 94 Replacement Obliaationl. Elderly Units Non Elderly Units Total Elderly & Non Elderly Units VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. 1 Bedroom Unit (1 is s or units) Z tsecrooni unit to A........., VLOW LOW MOD TOTAL INELG. VLOW LOW MOD JQTAL INELG. a1 1 1 r �� 3 Bedroom Unit (3 is is of units) 4 or more Bedroom Unit (4 x s of units) VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. TOTAL (sum of oil unit Bedrooms) VLOW LOW MOD TOTAL INELG. TOTAL UNITS (Add only TOTAL of all `Total Elderly / Non Elderly Units" not bedroons): 13 If TOTAL U ITS to leas than "Total Project Units" on HCD Sch DI, report the remaining unks as instructed below, Check all appropriate forms) listed below that will be used to identity remaining Project Uri s to be reported: Inclusionary Units Other Housing Units Provided: ® Inside Project Area (Sch HCD-D3) ❑ With LMIHF (Sch HCD-D5) ❑ side Project Area (Sch HOD-D4) ❑ Without LMIHF (Sch HCD-D6) ❑ No Assistance (Sch HCD-D7) Identity the number of RePlacement Unite which Nalso have on Elderly been counted as ITS ode ah y Non units Elderly units VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. VLOW LOW MOD TOTAL INELG. r- f "I 10, California Redevelopment Agencies - Fiscal Year 2005-2006 HCD-D2 Sch D2 (7/II06) Page 2 of 2 ®' SCHEDULE HCD-E CALCULATION OF INCREASE IN AGENCY'S INCLUSIONARY OBLIGATION BASED ON SPECIFIED HOUSING ACTIVITY DURING THE REPORTING YEAR Agency: La Quints Redevelopment Agency Name of Project or Area (if applicable, list "Outside" or "Summary": Project Area No. t :omplete this form to report activity separately by project or area or to summarize activity for the year. Zeport all new construction and/or substantial rehabilitation units from Forms D2 through D7 that were: a) develoaed by the agency and/or (b) developed only in a project area by a nonagency person or entity. PART I [H&SC Section 33413(b)(1)1 I I AGENCY DEVELOPED UNITS DURING THE REPORTING YEAR 1. New Units Developed by the A_gencv " 2. Substantially Rebabilitated Units Developed by the Aeencv 0 3. Subtotal - Baseline of Agency Developed Units (add lines I & 2) 0 4. Subtotal of Increased Inclusionary Obligation (Line 3 x 30%) (see Notes 1 and 2 below) 0 5. Verv-Low Inclusionary Obligation Increase Units (Line 4 x 50% 0 New PART H [H&SC Section 33413(b)(2)] NONAGENCY DEVELOPED UNITS DURING THE REPORTING YEAR - - — -- -- -----. . -.-... w,-..-. ♦ ,. . . Person or RN 8. Subtotal - Baseline of Nonagency Developed Units (add lines 6 & 7) U 9. Subtotal of Increased Inclusionary Obligation (Line 8 x 15%) (see Notes I and 2 below) 0 10. very -Low Inclusionary Obligation Increase (Line 9 x 40%) 1 u PART III REPORTING YEAR TOTALS 11. Total Increase in Inclusionary Obligation (add lines 4 and 9) 0 12. Very -Low Inclusionary Obligation Increase (add lines 5 and 10) (Line 12 is a subset of line 0 itttttttlYtttt ...................... NOTES: 1. Section 33413(b)(1), (2), and (4) require agencies to ensure that applicable percentages (30% or 1591b) o all (market -rate and affordable) "new and substantially rehabilitated dwelling units" are made available at affordable housing cost within 10 year planning periods. Market -rate units: units not assisted with low -mod funds and jurisdiction does not control affordability restrictions. A11ordable units: units generally restricted for the longest feasible time beyond the redevelopment plan Is land use controls and jurisdiction controls affordability restrictions. Agency develaped units: market -rate units can not exceed 70 percent and affordable units must be at least 30 percent, however, all units assisted with low -mod funds must be affordable. Nonarencv developed (proiect area) units: market -rate units can not exceed 85 percent and affordable units must be at least 15 percent. 2. Production requirements may be met on a project -by -project basis or in aggregate within each 10-year planning period. The percentage of affordable units relative to total units required within each 10-year planning period may be calculated as follows: AFFORDABLE units = Market -rate x 00 or.15) TOTAL units = Market -rate or A ordable (.70 or.85) (.70 or.85) (.30 or.15) Cardomia Redevelopment Agencies . Fiscal Year 2005-2006 HCD-E Sch E-1 (7101/06) !l 1 ► 87 SCHEDULE HCD-E CALCULATION OF INCREASE IN AGENCY'S INCLUSIONARY OBLIGATION BASED ON SPECIFIED HOUSING ACTIVITY DURING THE REPORTING YEAR Agency: La Quinta Redevelopment Agency Name of Protect or Area (if applicable, list "Outside" or "Summarlt": Protect Area No. 2 Complete this form to report activity separately by project or area or to summarize activity for the year. Report all new construction and/or substantial rehabilitation units from Forms D2 through D7 that were: (a) developed by the agency and/or (b) developed only in a project area by a nonagency person or entity. PART I [H&SC Section 33413(b)(1)] AGENCY DEVELOPED UNITS DURING THE REPORTING YEAR BOTH INSIDE AND OUTSIDE OF A PROJECT AREA 1. New Units Developed by the Agency 0 2. Substantially Rehabilitated Units Developed by the AM= 0 3. Subtotal - Baseline of Agency Developed Units (add lines 1 & 2) 0 4. Subtotal of Increased Inclusionary Obligation (Line 3 x 30%) (see Notes 1 and 2 below) 0 5. Very -Low Inclusionary Obligation Increase Units (Line 4 x 50%) 0 PART 11 [H&SC Section 33413(b)(2)] NONAGENCY DEVELOPED UNITS DURING THE REPORTING YEAR ONLY INSIDE A PROJECT AREA 6. New Units Developed by Any Nona enc; Person or Entity 0 7. Substantially Rehabilitated Units Developed by Any Nona egency Person or Entity 0 8. Subtotal - Baseline of Nonarricy Developed Units (add lines 6 & 7) 0 9. Subtotal of Increased Inclusionary Obligation (Line 8 x 15%) (see Notes 1 and 2 below) 0 10. Very -Low Inclusionary Obligation Increase (Line 9 x 40%) 0 PART III REPORTING YEAR TOTALS 11. Total Increase in Inclusionary Obligation (add lines 4 and 9) 0 12. Very -Low Inclusionary Obligation Increase (add lines 5 and 10) (Line 12 is a subset of Line 11 0 ................................ ..u.nu.....n n..rrrn....a n.w..rr.rr.rr...o.. aa.go.r...pw rer..rrs.rrrarrorr.r.r 1. Section 33413(b)(1), (2), and (4) require agencies to ensure that applicable percentages (30% or 15%) Of all (market -rate and gffbrdabk) "new and substantially rehabilitated dwelling units" are made available. at affordable housing cost within 10 year planning periods. Market -rate units: units not assisted with low -mod funds and jurisdiction does not control affordability restrictions. Affordable units: units generally restricted for the longest feasible time beyond the redevelopment plan's land use controls and jurisdiction controls affordability restrictions. Agency developed units: market -rate units can not exceed 70 percent and affordable units must be at least 30 percent, however, all units assisted with low -mod funds must be affordable. Nonarencw developed (proiect area) units: market -rate units can not exceed 85 percent and affordable units must be at least 15 percent. 2. Production requirements may be met on a project -by -project basis or in aggregate within each 10-year planning period. The percentage of affordable units relative to total units required within each 10 year planning period may be calculated as follows. AFFORDABLE units = Market -rate x (.30 or .15) TOTAL units = Market -rate or A ordable (.70 or.85) (.70 or.85) (.30 or.15) California Redevelopment Agencies - Fiscal Year 2005-2006 $ch E-1 (7101/06) HCD-E 3 88 a� Qr _ � 44Qu&rry LC� P � r c `k OF TKF AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: December 19, 2006 BUSINESS SESSION: ITEM TITLE: Approval of a Settlement Agreement with �['''' Weitz Golf and Appropriation of Funds CONSENT CALENDAR: c.7 STUDY SESSION: PUBLIC HEARING: RECOMMENDATION: Approve the settlement and release agreement with Weitz Golf Construction Inc., authorize the Executive Director to execute the agreement, and appropriate $625,000.00 from RDA area 1. FISCAL IMPLICATIONS: To date, the RDA has paid $13,631,603.62 to Weitz Golf Construction to construct the phase 1 improvements to SilverRock Resort including the Palmer Classic Course, driving range and utilities, as well as the Village lakes and entry features for the site. This appropriation is necessary to pay a negotiated settlement agreement in order to compensate Weitz Golf for utility and permit delays incurred while meeting the Agency's construction schedule to open the course in early 2005. The total amount of appropriation required for this settlement and release agreement is $625,000.00. A portion of this amount may be recuperated by the Agency through the ongoing claim with Verizon. BACKGROUND AND OVERVIEW: On March 16, 2004 Weitz Golf was awarded a contract for construction of the SilverRock Golf Course number 1, City project number 2002-07C, in the amount of $11,321,004. During the course of construction, change orders for the project totaled $2,310,599.62 bringing the total amount paid to Weitz to date to $13,631,603.62. The course construction was completed and opened for public play on March 1, 2005, less than one year after award of the contract. The Agency incurred additional expenses in order to compensate Weitz Golf for delays from permits and utilities which caused the contractor to be delayed by over 30 days during the course of construction 00 of the project. In for the golf course to be opened the following winter, additional work and I crews were necessary to complete grassing of the course by the fall of 2004 which caused an additional work and acceleration claim to be filed by Weitz Golf. This has been negotiated with the contractor by Public Works staff and the City Attorney's Office to be $625,000.00. Staff recommends approval of the attached settlement and release agreement and an appropriation of $625,000.00 from RDA Project Area Number 1 to complete the project and release the Agency from future claims by the contractor. FINDINGS AND ALTERNATIVES: The alternatives available to the City Council include: 1. The City Council is to approve the settlement and release agreement with Weitz Golf, authorize the Executive Director to execute the agreement, and appropriate $625,000.00 from RDA project area number1.; or 2. Do not approve the settlement and release agreement with Weitz Golf and appropriate $625,000.00 from RDA project area number 1.; or 3. Provide staff with alternative direction. Respectfully submitted, !�� mott—fs on, P.Eidublic ctor/ City Engineer Approved for submission by: Thomas P. Genovese, City Manager Attachments: 1. Settlement and release agreement 2 ! J� SETTLEMENT AND RELEASE AGREEMENT This Settlement and Release Agreement ("Agreement"), is entered into on December 1, 2006, ("Effective Date") in La Quinta, California by and among the La Quinta Redevelopment Agency and the City of La Quinta (collectively "La Quinta") and Weitz Golf Construction, Inc. ("Weitz"). In this Agreement, La Quinta and Weitz are sometimes referred to collectively as the "Parties" and individually as a "Party." RECITALS A. In March 2004, La Quinta and Weitz entered into a contract for Weitz to construct certain improvements to the Silver Rock Ranch Golf Course (the "Project"), a public work of improvement, in exchange for a fixed price payment from La Quinta (the "Contract"). B. During the Project, Weitz claimed La Quinta breached the contract by failing to provide access to the site as represented in the Contract, by providing inadequate plans and specifications, ordering extra work for which it failed to pay and failing to timely release retention payment to Weitz. C. La Quinta denied Weitz' contentions and made claims that Weitz failed to honor warranty claims and timely complete obligations of the Contract. D. Weitz filed claims pursuant to the procedures set forth in the Contract, California Public Contract Code and California Government Code. After the claims remained unresolved, Weitz filed Riverside Superior Court Case No. INC057961 (the "Action") against La Quinta. E. The Parties wish to settle the Action and release certain claims and/or liabilities pursuant to the terms of this Agreement. TERMS AND CONDITIONS For good and valuable consideration, the receipt of which is acknowledged, the Parties agree as follows: 1.0 PAYMENT AND RELATED PROVISIONS 1.1 Payment By La Quinta To Weitz Within fourteen (14) business days after execution of this Agreement by all parties La Quinta will pay Six Hundred Twenty -Five Thousand Dollars and No Cents ($625,000.00) (the "Settlement Sum") by a single check payable to "Weitz Golf Construction, Inc." and delivered to Weitz Golf Construction, Inc., 43525 Ridge Park Drive, Suite 200, Temecula, California, 92590. Upon payment of the Settlement Sum, Weitz shall file a dismissal with prejudice of the Action. Initials: La Quinta Weitz 1.2 No Admission of Fault This Agreement is a compromise and settlement of disputed claims. Nothing in this Agreement shall be interpreted, used or construed as an admission of fault or wrongful conduct of any kind by any of the Parties. Action. 1.3 Attorneys Fees and Costs Each Party shall bear their own attorneys' fees and costs incurred relating to the 2.0 RELEASE 2.1 Release Of Claims By Weitz Except as reserved in section 2.4 below, Weitz releases and discharges all claims of every kind whatsoever (including without limitation claims for fraud, breach of contract, breach of fiduciary duty, negligence, breach of statutory duties, compensatory damages, penalties, punitive damages, specific performance, injunctive or declaratory relief, costs, attorneys' fees and/or expert fees) whether known or unknown, which Weitz or any of its agents, shareholders, representatives or employees, asserts or could assert against La Quinta, or its councilmembers, mayors, officials, boards, commissions, managers, insurers, agents, shareholders, representatives, or employees based upon or arising out of the Project and the Action or any other matter or event occurring on or prior to the Effective Date and relating to the Project ("Weitz Releases"). 2.2 Release Of Claims By La Quinta Except as reserved in section 2.4 below, La Quinta releases and discharges all claims of every kind whatsoever (including without limitation claims for fraud, breach of contract, breach of fiduciary duty, negligence, breach of statutory duties, violation of Contractors State License laws, surety bond claims, compensatory damages, penalties, punitive damages, specific performance, injunctive or declaratory relief, costs, attorneys' fees and/or expert fees) whether known or unknown, which La Quinta or any of its councilmembers, mayors, officials, boards, commissions, managers, insurers, agents, shareholders, representatives, or employees, asserts or could assert against Weitz, or its agents, shareholders, representatives, sureties, insurers or employees based upon or arising out of the Project and the Action or any other matter or event occurring on or prior to the Effective Date and relating to the Project ("La Quinta Releases"). 2.3 Released Matters The Weitz Releases and the La Quinta Releases are collectively referred to as the "Released Matters." Initials: La Quinta Weitz 2.4 Matters Not Included In The Released Matters 2.4.1. The Released Matters do not include any liability or obligation created by this Agreement. 2.4.2. The Released Matters do not include and the Parties retain all rights and obligations with respect to one another for any unasserted or unknown claims by any third party for death or bodily injury to persons, for injury or damage to property, and such claims are not included in the Released Matters. Those rights and obligations shall survive as they would have existed in the absence of this Agreement. 2.4.3. The Released Matters do not discharge or waive rights or obligations of the Parties relating to presently unknown deficiencies in the work performed or materials or equipment supplied to the Project. All defenses of Weitz to claims relating to any defects are expressly reserved. As of the date of the execution of this Agreement, the City is unaware of any defect claims arising out of the work performed or materials or equipment supplied to the Project, except for a possibly malfunctioning 18-inch overflow line running from the Hole No. 2 Lake to the Hole No. 7 Lake. The defect relating to this 18-inch line is not included in the Released Matters. The term "deficiencies" does not included warranty claims. The parties agree the warranty period of the Contract has expired and such claims are included in the Released Matters. 2.5 Waiver Of Rights Pursuant To Civil Code Section 1542 With respect to the Released Matters, each Party expressly waives any and all rights which it may have under the provisions of section 1542 of the California Civil Code, which section reads as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, whicl if known by him or her must have materially affected his or her settlement with the debtor. Thus, with knowledge of the provisions of section 1542, and for the purpose of implementing a full and complete release of the Released Matters, each Party acknowledges this Agreement is intended to include in its effect, without limitation, all of the claims that were or could have been raised, even those which a Party did not know of or suspect to exist in its favor at the time of execution of this Agreement and that this Agreement contemplates extinguishment of all such claims that were or could have been raised, even those which would have materially affected the releasing Party's decision to enter into this Agreement. Initials: La Quinta Weitz 3.0 GENERAL PROVISIONS 3.1 Admissibility Of Release No evidence of this Agreement or any of its terms, and no evidence of any discussion or communications made or information or materials transmitted in the course of negotiations for this Agreement, shall be admissible or presented in any action or proceeding before any court, agency, or other tribunal, as evidence of or relevant to any Released Matters, or as evidence that a Party or any of their respective agents, shareholders, representatives or employees have committed any violation of contract or law, or are liable to any person for any reason other than for the enforcement of this Agreement. 3.2 No Reliance Each Party acknowledges: (i) this Agreement is the resolution of a fully matured set of facts and each Party individually declares and represents it is executing this Agreement in reliance solely on its own judgment, belief, and knowledge of the facts surrounding the transactions described in this Agreement; (ii) this Agreement is made without reliance upon any statement or representation not contained in this Agreement of any other Party, or any representative, agent or attorney of any other Party; (iii) no promise, inducement or agreement not expressed in this Agreement has been made to any Party; and (iv) the recitals, terns and conditions contained in this Agreement are contractual and not mere recitals. 3.3 Discovery Each Party acknowledges it may subsequently discover facts different from, or in addition to, those which it now believes to be true with respect to the Released Matters, and agree this Agreement shall be and remain effective in all respects notwithstanding such different or additional facts. 3.4 Opportunity For Advice Of Attorneys Each Party further represents, warrants and agrees that in executing this Agreement, it does so with full knowledge of any and all rights which it may have with respect to the other Party and that each Party has received, or had the opportunity to receive, independent legal advice from such Party's attorneys with respect to the facts involved in the controversy compromised by this Agreement and with regard to such Party's rights and asserted rights arising out of such facts. 3.5 Assignment Of Rights Each Party represents and warrants it has not assigned its rights in any of its claims against the other to any other person or entity and each Party has full authority to bind the Party for which it signs to this Agreement. Initials: f , W La Quinta eitz 1 J 3.6 Entire Agreement The provisions of this Agreement constitute the entire agreement among the Parties and supersede all prior negotiations, proposals, agreements and understandings regarding the subject matter of this Agreement. 3.7 Additional Documents The Parties agree to perform such further acts and to execute and deliver such further documents as may be reasonably necessary or appropriate to carry out the intent or provisions of this Agreement. 3.8 Assignees This Agreement shall bind and inure to the benefit of the successors and assigns of the Parties, and to all affiliates, dba's or any other associated entities. 3.9 Interpretation Of Agreement This Agreement and its provisions shall not be construed or interpreted for or against any Party because that Party drafted or caused the Party's attorney to draft any of its provisions. 3.10 Execution In Counterparts This Agreement may be signed by the Parties in multiple counterparts, all of which shall be taken together as a single document. A facsimile signature constitutes an original and all evidentiary objections to same other than for authenticity of signature are waived. 3.11 No Promise Or Warranty No promise or warranty shall be binding on any Party except as expressly contained in this Agreement. 3.12 Attorneys' Fees Should either Party initiate any action at law or in equity to enforce or interpret the terms of this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys' fees, costs and necessary disbursements against the non -prevailing Party, in addition to any other appropriate relief. 3.13 Modification No modification of this Agreement shall be valid unless agreed to in writing by the Parties. Initials: / La Quinta Weitz 3.14 Choice Of Law This Agreement shall be construed and enforced in accordance with the laws of the State of California and the Parties agree the court in the Action shall retain jurisdiction for purposes of enforcing this Agreement. PLEASE READ THIS DOCUMENT CAREFULLY. IT CONTAINS A GENERAL RELEASE OF CLAIMS KNOWN AND UNKNOWN. The Parties have executed and delivered this Agreement consisting of six (6) pages. LA QUINTA REDEVELOPMENT AGENCY Printed Name: Date: CITY OF LA QUINTA Signature: Printed Date: WEITZ GOLF CONSTRUCTION, INC. Signature: Printed Name: 2 n, w Initials: / La Quinta Weitz �cF`N OF COUNCIL/RDA MEETING DATE: December 19, 2006 ITEM TITLE: Joint Pubic Hearing Between the City Council and Redevelopment Agency to Consider a Revised Affordable Housing Agreement Between the Agency and Santa Rosa Development, Inc., to Increase the Agency's Funding for the Homebuyer Silent Second Trust Deed Mortgage Loans by $4.5 Million, Thus, Expanding the Income Levels of the Homebuyers for the Property Located Within the Watercolors Housing Project at 48`h Avenue and Adams Avenue. RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Open the joint public hearing and continue the hearing until January 16, 2007. FISCAL IMPLICATIONS: None at this time. BACKGROUND AND OVERVIEW: A joint public hearing to consider an amendment to Affordable Housing Agreement (Amended Agreement) between the Agency and Santa Rosa Development, Inc. (Developer) was scheduled for December 19, 2006. The purpose was to receive testimony regarding the Amended Agreement which would include the following: A►. Increase the Agency's Silent Second Trust Deed mortgage funding by $4,500,000, and B). By doing so, would facilitate home purchases by both low and moderate - income households. The current buyer profile centers only on moderate income households. Staff and legal counsel are working through the details of the Amended Agreement with the developer and have not yet completed the final Amended Agreement. As such, we are requesting that the Joint Public Hearing be continued until January 16, 2007. 1.D 3 Staff recommends that the City Council and Agency open the Joint Public Hearing and receive testimony, and then continue the Hearing until January 16, 2007. FINDINGS AND ALTERNATIVES: The alternatives available to the Redevelopment Agency Board include: 1. Open the joint public hearing and continue the hearing until January 16, 2007; or 2. Provide staff with alternative direction. RespectfuUy submitted, Douglas ans, Community evelopment Director Approved for Submission by: Thomas P. Genovese, Executive Director / T L(O c&t,, 4 4& OF T'�w COUNCIL/RDA MEETING DATE: December 19, 2006 ITEM TITLE: Joint Public Hearing Between the City Council and Redevelopment Agency to Consider a Revised Affordable Housing Agreement Between the Agency and Southern California Housing Development Corporation to Convey Certain Property Located at 78- 990 Miles Avenue in the City of La Quinta, California, and SCHDC's Subsequent Ownership and Operation of an Affordable Rental Housing Development Consisting of 80 Dwelling Units Restricted for Rental to and Occupancy by Very Low -Income Family Households at a Rent Affordable to Such Households RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Adopt a Resolution of the Redevelopment Agency approving the Revised Affordable Housing Agreement by and between the La Quinta Redevelopment Agency and the Southern California Housing Development Corporation and authorize the Executive Director to execute the necessary documents. FISCAL IMPLICATIONS: The Agency will receive $12,641,903 from SCHDC for the purchase of the completed Vista Dunes Courtyard Homes development. These funds will offset Agency expenses as depicted in the following: e Property Acquisition $ 2,571,803 o Relocation 4,079,460 e Demolition 400,000 e Construction (includes contract services) 24,661,696 e Total Expenses (before transfer) 31,712,959 e Acquistion/ Transfer 988,728 e Total Expense (after transfer) 32,701,687 e Less Purchase Price 12,641,903 e Net Agency Expense 20,059,784 110 Per the Revised Agreement, SCHDC will pay the Agency $12,641,903 yielding a net Agency expense of $20,059,784. It is important to mention two additional sources of funds that will help in reducing the Agency's net expense. The first is a $13,966,831 RDA Loan (55 year @ 1 %) that SCHDC will payback with a sharing of residual rental receipts. This loan enables SCHDC to achieve 100% financing of the modeled development costs ($26,608,734). This is in consideration of the Agency's investment into the project during construction that cannot be paid through conventional financing. An analysis of long term projected cash flows indicates that there is a potential to receive $3,000,000 in payments prior to the 55 year maturity date. The second are solar energy credits of potentially $800,000 available through the local electric and gas utility providers. This would further reduce the net Agency expense from $20,059,784 to $16,259,784. BACKGROUND AND OVERVIEW: On August 1, 2006 the Agency approved an Affordable Housing Agreement with SCHDC. Subsequently, a Superior Court decision impacted SCHDC's ability to secure State investment tax credit financing, which was one of the three financing sources proposed to use to acquire the development. This reduced SCHDC's financing by $1.3 million or from $13.9 million to $12.6 million. The La Quinta Redevelopment Agency purchased and vacated the Vista Dunes Mobile Home Park. Acquisition occurred in December 2003, and site relocation activities were completed by January 2006. In March 2006, the Agency Board approved a request for proposals seeking non-profit operators for the Vista Dunes Courtyard Homes. Five firms were contacted and only one firm, Southern California Housing Development Corporation (SCHDC), responded. The other firms were contacted to ascertain why they did not submit proposals; their responses were that they are too busy handling other affordable housing developments to take on this project. Since SCHDC was a qualified non-profit housing owner/operator, and since they have other local affordable housing complexes in Cathedral City and Indian Wells that are well run and maintained, staff recommended that the Agency proceed to structure an Affordable Housing Agreement with SCHDC for the sale and operation of the Vista Dunes Courtyard Homes. In the Revised Agreement, SCHDC proposes to use a combination of 9% tax credit financing anticipated to be in the amount of $11,324,751, a conventional 30 year mortgage secured from net operating income of $1,317,152 and a 55 year 1 % RDA Loan of $13,966,831. The RDA Loan represents the balance of the unfunded development costs of the project. The repayment of the RDA loan will be made through a sharing (60% Agency/ 40% SCHDC) of residual rental receipts. III The Agency has awarded a contract for constructing the site and building improvements for Vista Dunes Courtyard Homes. The low bid for the construction of this project was $21,400,000 by Davis Reed Construction Inc. Construction is currently underway and provided that a Revised Affordable Housing Agreement is approved, leasing and occupancy of this project is anticipated by March 2008. FINDINGS AND ALTERNATIVES: The alternatives available to the Redevelopment Agency include: 1. Adopt a Resolution of the Redevelopment Agency approving the Revised Affordable Housing Agreement by and between the La Quinta Redevelopment Agency and the Southern California Housing Development Corporation and authorize the Executive Director to execute the necessary documents; 2. Do not approve the Revised Affordable Housing Agreement by and between the La Quinta Redevelopment Agency and the Southern California Housing Development Corporation; or 3. Provide staff with alternative direction. Respectfully submitted, Douglas It Evans Community Development Director Approved for submission by: Thomas P. Genovese, Executive Director Attachments: 1. Summary Report 2. Affordable Housing Agreement lf" RESOLUTION RDA NO. A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING A REVISED AFFORDABLE HOUSING AGREEMENT BETWEEN THE AGENCY AND THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION FOR THE PROPERTY LOCATED AT 78990 MILES AVENUE 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 City Council of the City of La Quinta ("City" or "City Council," as applicable) approved and adopted the Redevelopment Plan ("Redevelopment Plan") for Project Area No. 2 ("Project Area"), on May 16, 1989, by Ordinance No. 139; 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, an earlier Agency approved Affordable Housing Agreement has been revised to reflect changes in the financing structure as impacted by a recent Superior Court Decision; and WHEREAS, the Agency staff has negotiated a Revised Affordable Housing Agreement ("Revised Agreement") with The Southern California Housing Development Corporation, a non-profit California corporation ("Developer"), pursuant to which (i) the Agency is to develop certain real property located within the Project Area at 78990 Miles Avenue ("Property") with an eighty (80) unit multifamily residential housing development (the "Housing Development") and subsequently transfer to Developer the Property and the Housing Development for Twenty -Six Million Six Hundred Eight Thousand Seven Hundred Thirty -Four Dollars ($26,608,734) (the "Purchase Price"); and (ii) Developer is to operate the Housing Development as an affordable housing development restricted for rental to and occupancy by persons and families of very low and extremely low- income (i.e., persons and families whose income does not exceed 50% of the median income for Riverside County) at rent levels affordable to such persons; and WHEREAS, the Purchase Price will be paid from the following sources: (i) approximately Eleven Million Three Hundred Twenty -Four Thousand Seven Hundred Fifty -One Dollars ($11,324,751) will be funded in the form of tax credits; 13 (ii) approximately One Million Three Hundred Seventeen Thousand One Hundred Resolution RDA No. 2006- SCHDC Affordable Housing Agreement Adopted: December 19, 2006 Fifty -Two Dollars ($1,317,152) will be funded in the form of a conventional loan; and (iii) approximately Thirteen Million Nine Hundred Sixty -Six Thousand Eight Hundred Thirty -One Dollars ($13,966,831) will be funded in the form of a loan from the Agency to the Developer ("Agency Loan"); and WHEREAS, pursuant to the Revised Agreement, Developer, as a condition to Agency's sale of the Property and Housing Development and provision of the Agency Loan, shall record against the Property an Agency Regulatory Agreement and Declaration of Covenants and Restrictions that restricts the use of the Property, for a period of fifty-five (55) years, as an affordable rental housing project and sets forth management and maintenance requirements for the Housing Development; and WHEREAS, Health and Safety Code Section 33433 requires that the Agency prepare a Summary Report to consider the Agency's proposed financial contribution to the Project as set forth in the Revised Agreement, that the Agency Board and the City Council conduct a noticed joint public hearing with respect to the Revised Agreement, and that the approval of the Revised Agreement be accompanied by certain findings and determinations as set forth herein; and WHEREAS, a Summary Report for the Revised Agreement has been prepared and the joint public hearing has been conducted in accordance with applicable requirements of law; and WHEREAS, the City Council and the Redevelopment Agency have considered all the information and evidence set forth in the Summary Report presented by the City/Agency staff and presented by persons wishing to appear and be heard concerning the impact of the Revised Agreement on the Project Area and the City as a whole; and WHEREAS, the Revised Agreement is in accordance with the Redevelopment Plan and is of benefit to the Project Area and the City of La Quinta; and WHEREAS, the City Council hereby determines that the Agency's financial contribution pursuant to the Revised Agreement is necessary to effectuate the purposes of the Redevelopment Plan; NOW, THEREFORE, BE IT RESOLVED BY THE LA QUINTA REDEVELOPMENT AGENCY AS FOLLOWS: 1. That the above recitals are true and correct and incorporated herein. 1 1 4 Resolution RDA No. 2006- SCHDC Affordable Housing Agreement Adopted: December 19, 2006 2. The Revised Agreement effectuates the purposes of the Community Redevelopment Law (Health & Safety Code § 33000 et seq.) and of the Redevelopment Plan and is in the best interests of the citizens of the City of La Quinta. 3. The Agency's sale of the real property identified herein will provide housing for very low- and extremely low-income persons and is consistent with the Agency's Five -Year Implementation Plan, based on the findings and conclusions of the Summary Report, which is incorporated herein. 4. The consideration the Developer will pay for the real property to be conveyed by the Agency is not less than the fair reuse value at the use and with the covenants and conditions and development costs authorized by the sale, based on the findings and conclusions of the Summary Report. 5. The Revised 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 Revised Agreement that are consistent with the substantive terms of the Revised Agreement approved hereby, and the Agency Executive Director is authorized to thereafter sign the Revised Agreement on behalf of the Agency. 6. The Agency Executive Director is authorized and directed, on behalf of 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 Revised Agreement. PASSED, APPROVED, AND ADOPTED at a regular meeting of the La Quinta Redevelopment Agency held this 19th day of December, 2006, by the following vote: AYES: NOES: ABSENT: ABSTAIN: 113 Resolution RDA No. 2006- SCHDC Affordable Housing Agreement Adopted: December 19, 2006 LEE M. OSBORNE, Agency Chair City of La Quinta, California ATTEST: VERONICA J. MONTECINO, CMC, Secretary City of La Quinta, California APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel City of La Quinta, California ATTACHMENT #1 SUMMARY REPORT Revised Affordable Housing Agreement By and Between the La Quinta Redevelopment Agency and Southern California Housing Development Corporation December 19, 2006 This document is the Summary Report ("Report") for the Revised Affordable Housing Agreement ("Revised Agreement") by and between the La Quinta Redevelopment Agency ("Agency") and the Southern California Housing Development Corporation ("Developer"). The Revised Agreement facilitates the sale and operation of an 80-unit multi -family residential complex ("Development"). The Agency is constructing the Development on 9.7 acres located on Miles Avenue, west of Adams Street, in north La Quinta ("Site"), as depicted on Attachment 1 to this Report. The Site is located in the La Quinta Redevelopment Project Area No. 2 ("Project Area"). The Revised Agreement provides that the Agency will sell the completed Development to the Developer; the Developer will then operate and maintain the complex, and lease, at affordable rents, 79 dwellings to very low income households and 1 dwelling to a moderate income household for 55 years. This Report updates the August 1, 2006 Summary Report for this transaction to reflect changes resulting from a reduction in Developer funding. On August 1, 2006 the Agency approved an Affordable Housing Agreement with the Developer. Subsequently, a Superior Court decision impacted the Developer's ability to secure State investment tax credit financing, which was one of three financing sources the Developer proposed to use to acquire the development. This reduced the Developer's financing by $1.3 million or from $13.9 million to $12.6 million. This Report has been prepared pursuant to Section 33433 of the California Community Redevelopment Law ("Redevelopment Law") and presents the following: • A summary of the proposed Development. ■ The cost of the Revised Agreement to the Agency. • The estimated value of the interest to be conveyed, determined at the highest and best uses permitted by the Agency's Redevelopment Plan. • The estimated value of the interest to be conveyed, determined at the use with the conditions, covenants, and development costs required by the Revised Agreement. • An explanation of why the sale of the property pursuant to the Revised Agreement will assist in the elimination of blight. i Y � A ON canna 4 THE DEVELOPMENT Housing Mandates Both the City of La Quinta ("City") and the Agency are mandated by the State of California to continually seek opportunities that increase and improve the supply of housing affordable to very low, low and moderate income households. State Planning Laws mandate that the City pursue a housing mix that accommodates both local and regional housing demand for affordable dwellings. The Redevelopment Law provides that the Agency ensure that a minimum of 15% of all new and rehabilitated dwellings within the Project Area be affordable to very low-, low- and moderate -income households, and of these, 40% must be affordable to very low income households. If these dwellings are owner occupied, they must remain affordable for 45 years and if they are tenant occupied, they must remain affordable for 55 years. Project Description The Agency purchased the Site in May, 2004. It was improved with a 91-unit mobile home park known as the Vista Dunes Mobile Home Park. Ninety-one households occupied travel trailers or mobile homes ranging in age from 12 to 45 years old. During an 18 month period the Agency facilitated the relocation of all 91 households, and cleared the Site of the mobile home units and associated infrastructure. The Development will consist of 80 one-story one, two and three -bedroom rental dwellings ranging from 900 square feet to 1,125 square feet in size. One of the units will be reserved for an onsite propertymanager. Each unit will have assigned parking spaces within carports, rear or side yards, and individual storage and trash enclosures. To create a pedestrian friendly environment and a strong sense of community, the Development will be gated and common spaces, porches, and the dwellings will overlook a paseo system. Residents will enjoy amenities such as a swimming pool, community center, onsite basketball court, and grass play areas. Studio E Architects and Nestor+Gaffney Architecture teamed to craft a design that caters to family households. The site and home design integrates the desirable fundamentals of safety, functionality, and durability in harmony with the surrounding neighborhood. As the result of the sometimes harsh desert climate, the architecture incorporates energy efficient design to minimize energy consumption during hot months. The architecture also includes photo voltaic solar panels to supplement each unit's electrical usage. Affordable Housing Mix The Agency pursued the Development to replace a dilapidated mobile home park with new dwellings that will be leased to very low income households for 55 years. Seventy-nine of the 80 units will be affordable to very low income households, and the onsite management unit will be affordable to a moderate income household. Very low income households are those that make 50% or less than the Riverside v County median income and moderate households are those that make less than oc1 donna o 120% of the County median income. The 2006 household income limits for Riverside County are depicted in Exhibit 1. INCOME LIMITS EXHIBIT 1 Income Limits (Maximum) Household Size Very Low Moderate 1 Person $20,150 $48,300 2 Person $23,000 $55,200 3 Person $25,900 $62,100 4 Person $28,750 $69,000 5 Person $31,050 $74,500 6 Person $33,350 $80,000 THE COST OF THE REVISED AGREEMENT TO THE AGENCY The total cost of the Revised Agreement to the Agency is estimated to be $39,699,758 this cost includes the interest expense the Agency will incur on the 2004 Housing Bond proceeds that were used to underwrite acquisition, relocation and construction costs. To date, the Agency has expended $7,051,263 to acquire the Vista Dunes Mobile Home Park, relocate the Park residents, and demolish all improvements. The Agency anticipates expending an additional $24,661,696 (includes contract services) to construct the 80 courtyard homes with associated site improvements and $988,728 of acquisition transfer fees. Per the Revised Agreement, the Developer plans to raise $12,694,301 in a combination of 9% tax credit equity, and a conventional mortgage loan to acquire the Development from the Agency. The Developer will be securing the 9% tax credit financing once construction costs are known. Specific expenditures are as follows: • Property Acquisition $ 2,571,803 • Relocation 4,079,460 • Demolition 400,000 • Construction (includes contract services) 24,661,696 • Acquisition Transfer (after SCHDC's financing) 988,728 • Bond Interest Expense 19,692,372 These expenditures total $52,394,059. Per the Revised Agreement, the Developer will pay the Agency $12,641,903 for the completed Development through a combination of 9% tax credit financing anticipated to be in the amount of $11,324,751 plus a permanent 30 year mortgage secured from net operating income of $1,317,152 (the permanent loan proceeds are limited because the rents for 79 of the 80 units will be restricted to rents affordable to very low income households). The net cost to the Agency is estimated to be $39,752,156. ESTIMATED VALUE OF INTEREST TO BE CONVEYED The estimated value of the interest to be conveyed entails the value of the 9.7 acre cleared site, based upon current market values for multifamily residential property, 1 1 rJ and the cost to construct the 80 rental homes and associated site improvements. nm alOnna 0 The land value is estimated at $6,760,512; review of current market values for multi -family residential properties indicate a per square foot value of $16.00 or $696,960 per acre. The construction costs are estimated to be $24,015,000. The combined estimated land and construction value of the interest to be conveyed is $30,775,512. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED, DETERMINED AT THE USE AND WITH THE CONDITIONS, COVENANTS, AND DEVELOPMENT COSTS REQUIRED BY THE REVISED AGREEMENT The Agency will require that the Development be rented, at affordable housing costs, to very low-income households. In order to be affordable to very low-income households (ranging from one person to four persons in size), the total monthly rent and utility costs shall not exceed $539.00 for the one bedroom dwellings to $748.00 for the three bedroom dwellings. Based upon limiting rents to those affordable to very low-income households, the net rental income (gross rents less operating expenses) can support a permanent mortgage of $1,317,152. Based upon this permanent mortgage amount plus a typical 70% loan to value ratio, the estimated value of the interest to be conveyed is $1,881,646 ($1,317,152 mortgage plus $564,494 of equity). The Developer, however, is proposing to secure 9% tax credit funding (in addition to the permanent mortgage) wherein investors provide equity to underwrite affordable housing development by purchasing tax credits that reduce their federal and state income tax expenses. The Developer anticipates securing $11,324,751 in tax credit funding when combined with the permanent mortgage would generate $12,641,903 in funding to purchase the Development from the Agency. EXPLANATION OF WHY THE SALE OF THE PROPERTY PURSUANT TO THE AGREEMENT WILL ASSIST IN THE ELIMINATION OF BLIGHT In preparation for the conveyance of this property and construction of the Development, a run-down 91-unit mobile home park with failing infrastructure, ad to be demolished. The Agency has cleared the site, facilitated the relocation of all 91 households and is preparing for the construction of the new affordable housing project. These actions address the following blighting condition within the Project Area: ■ Increasing and Improving the Supply of Affordable Housing. The Development will provide housing that is affordable to very low- and moderate -income housing. • Unsafe/Dilapidated/Deteriorated Buildings. Buildings in which it is unsafe or unhealthy for persons to live or work and are characterized by serious Building Code violations, dilapidation and deterioration, defective design or physical construction, faulty or inadequate utilities, or other similar factors. ■ Physical Conditions that Limit the Economic Viability and Use of Lots/Buildings. Factors that prevent or substantially hinder the economically viable use or capacity of buildings or lots which include substandard building 4 g14 c ignnc ^ design, inadequate parcel size given current development standards and market conditions, and lack of parking. • Inadequate Public Infrastructure/Facilities. Inadequate public improvements, parking facilities, open space, or utilities. • Residential Overcrowding/Excess Bars Liquor Stores, Adult Businesses. Residential overcrowding or an excess of bars, liquor stores, or other businesses that cater exclusively to adults that has led to problems of public safety and welfare. This Development contemplated by this Revised Agreement was identified in the Agency's Third Implementation Plan adopted in June 2005. A copy of the proposed Revised Agreement is attached to this Report or available for review at the City Hall. The proposed Revised Agreement will be the subject of a joint public hearing of the Agency and the La Quinta City Council on December 19, 2006 at 7:00 PM or thereafter in the City Council Chambers located at 78-495 Calle Tampico, La Quinta, California. Attachment: 1. Site location �o�acronna c ATTACHMENT #2 AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN LA QUINTA REDEVELOPMENT AGENCY M-LN"I THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION 882/015610-0047 715762 05 a12/14/06 TABLE OF CONTENTS Page I. [100] SUBJECT OF AGREEMENT...............................................................................1 A. [101] Purpose of Agreement................................................................................I B. [102] The Redevelopment Plan ...........................................................................1 C. [103] The Project Area.........................................................................................2 D. [104] The Site......................................................................................................2 E. [105] Parties to the Agreement............................................................................2 1. [106] The Agency....................................................................................2 2. [107] SCHDC...........................................................................................2 F. [108] Definitions..................................................................................................3 1. [109] Prohibition Against Change in Ownership, Management and Control of SCHDC and Prohibition Against Transfer of the Site............................................................................................................7 G. [110] Representations by SCHDC.......................................................................8 H. [111] Representations by the Agency..................................................................9 II. [200] SALE OF PROJECT............................................................................................ I I A. [201] Purchase Price..........................................................................................12 B. [202] Deposit.....................................................................................................12 C. [203] Payment of Closing Portion of the Purchase Price..................................13 D. [204] Tax Credits; Tax Credit Regulatory Agreement......................................13 E. [205] Evidence of Financing..............................................................................15 F. [206] Acquisition of the Site Pursuant to Grant Deed.......................................16 G. [207] Escrow......................................................................................................16 H. [208] Conveyance of Title and Delivery of Possession.....................................17 I. [209] Conditions to Close of Escrow.................................................................18 1. [210] Agency's Conditions to Closing..................................................18 2. [211] SCHDC's Conditions to Closing..................................................18 3. [212] Waiver..........................................................................................19 4. [213] Failure of Conditions Precedent; Termination .............................19 J. [214] Condition of Title.....................................................................................20 K. [215] Title Insurance..........................................................................................21 L. [216] Taxes and Assessments............................................................................21 M. [217] Conveyance Free of Possession...............................................................21 N. [218] Document Review; Inspections; Condition of Project .............................22 1. [219] Document Review........................................................................ 22 2. [220] Inspections....................................................................................22 3. [221] "As Is"..........................................................................................23 4. [222] Indemnity.....................................................................................23 5. [223] Release and Waiver......................................................................23 6. [224] Definitions....................................................................................24 7. [225] Materiality....................................................................................24 III. [300] DEVELOPMENT OF THE SITE........................................................................25 882/015610-0047 _ 715762 05 a12/14/06 _1 Page IV. [400] USE OF THE PROJECT......................................................................................25 A. [401] Affordable Housing 25 B. [402] Uses In Accordance with Redevelopment Plan; Nondiscrimination............................................................................................... 26 C. [403] Indemnity; Insurance Requirements.........................................................27 D. [404] Local, State and Federal Laws.................................................................29 E. [405] Taxes and Assessments............................................................................29 F. [406] Limitation on Encumbrances...................................................................29 G. [407] Maintenance of the Project.......................................................................30 H. [408] Effect of Violation of the Terms and Provisions of this Agreement........................................................................................................... 30 V. [500] DEFAULTS AND REMEDIES...........................................................................30 C. [501] Defaults -- General...................................................................................30 D. [502] Legal Actions...........................................................................................30 1. [503] Specific Performance...................................................................30 2. [504] Institution of Legal Actions; Attorney's Fees..............................31 3. [505] Applicable Law............................................................................31 4. [506] Acceptance of Service of Process ................................................ 31 E. [507] Rights and Remedies Are Cumulative.....................................................31 F. [508] Inaction Not a Waiver of Default.............................................................31 G. [509] Termination..............................................................................................32 1. [510] Termination by SCHDC...............................................................32 2. [5111 Termination by the Agency 32 VI. [600] GENERAL PROVISIONS- ................................................................................. 33 A. [601] Notices, Demands and Communications Between Parties.......................33 B. [602] Conflicts of Interest..................................................................................33 C. [603] Enforced Delay; Extension of Times of Performance .............................33 D. [604] Non -Liability of Officials and Employees of the Agency ....................... 34 E. [605] Interpretation; Entire Agreement, Waivers; Attachments ........................34 F. [606] Time of Essence.......................................................................................34 G. [607] No Brokers...............................................................................................34 H. [608] Maintenance of Books and Records.........................................................35 I. [609] Right to Inspect........................................................................................ 35 J. [610] Binding Effect of Agreement...................................................................35 K. 611 Severabilit 35 L. [612] Counterparts.............................................................................................35 M. [613] Amendments to this Agreement...............................................................35 882/015610-0047 715762 05 a12/14/06 -11- Page ATTACHMENTS 1 Site Map 2 Legal Description 3 Schedule of Performance 4 Grant Deed 5 Agency Note 6 Agency Deed of Trust 7 Agency Regulatory Agreement 8 Project Proforma 9 Bill of Sale 10 Assignment and Release 11 Memorandum of Affordable Housing Agreement 882/015610-0047 715762.05 a12/14/06 'lll- AFFORDABLE HOUSING AGREEMENT This AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of the day of 2006 ("Effective Date") by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency") and THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California non- profit public benefit corporation ("SCHDC"). The Agency and SCHDC (collectively referred to as the "Parties") hereby agree as follows: I. [1001 SUBJECT OF AGREEMENT A. [1011 Pumose of Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 (the "Project Area") by providing for (i) the improvement by the Agency of certain property situated within the Project Area and referred to herein as the "Site" (as hereinafter defined) with a multi -family housing development, consisting of not less than eighty (80) residential dwelling units (the "Housing Development"); (ii) the conveyance of the Site and Housing Development to SCHDC; and (iii) SCHDC's ownership, operation and management of the Site and Housing Development as an affordable rental housing development restricted for rental and occupancy by Eligible Tenants at an Affordable Rent. As used herein, the term "Unit" refers to each of the 80 rental dwelling units comprising the Housing Development, and the term "Units" refers to all of the 80 rental dwelling units comprising the Housing Development. The Units are subject to the Agency Regulatory Agreement. The Agency financial assistance in this Agreement shall be utilized to effectuate a portion of the Agency's overall affordable housing program pursuant to the requirements of California Health and Safety Code Section 33334.2 to expend twenty percent (20%) of its increment funds to improve, increase and preserve the community's supply of low- and moderate -income housing. The conveyance to SCHDC of the Site, and the Housing Development and the occupancy of the Housing Development by households of limited incomes, all as provided in this Agreement, are in the vital and best interests of the City of La Quinta (the "City") and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken. B. 11021 The Redevelopment Plan This Agreement is subject to the provisions of the Redevelopment Plan for the Project Area (the "Redevelopment Plan") which was approved and adopted by Ordinance No. 139 of the City Council of the City of La Quinta on the 16th day of May, 1989. Said ordinance and Redevelopment Plan are fully incorporated herein by reference. Any amendment hereafter to the Redevelopment Plan (as so approved and adopted) which changes the uses or development permitted on the Site as proposed in this Agreement, or '82/015610-0047 _ 715762.05 al2/14/06 -1 otherwise changes the restrictions or controls that apply to the Site, or otherwise affects SCHDC's obligations or rights with respect to the Site, shall not apply to the Site without the written consent of SCHDC. Amendments to the Redevelopment Plan applying to other property in the Project Area shall not require the consent of SCHDC. C. [1031 The Project Area The Project Area is located in the City and is generally bounded by Washington Street, the northern corporate boundary, Jefferson Street and Avenue 50. The exact boundaries are as set out in the Redevelopment Plan. D. [1041 The Site The "Site" is currently owned by the Agency and consists of approximately 9.7 acres of that certain real property located at 78990 Miles Avenue within the Project Area in the City of La Quinta, County of Riverside. The Site is depicted on the Site Map, which is attached hereto and incorporated herein as Attachment No. 1. The legal description of the Site is provided on Attachment No. 2, which is attached hereto and incorporated herein by this reference. E. [1051 Parties to the Agreement 1. [1061 The Agency The 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 (Health & Safety Code § 33000 et seg.). The principal office of the Agency is located at 78-495 Calle Tampico, La Quinta, California 92253, or such other address as Agency shall hereafter designate in writing to SCHDC. "Agency", as used in this Agreement, includes the La Quinta Redevelopment Agency and any and all assignees of or successors to its rights, powers and responsibilities. 2. [1071 SCHDC "SCHDC" is The Southern California Housing Development Corporation, a California non-profit public benefit corporation. The principal office and mailing address of SCHDC for purposes of this Agreement is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Attn: President. By executing this Agreement, each person signing on behalf of SCHDC warrants and represents to the Agency that SCHDC has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon SCHDC have been obtained, and that the person or persons executing this Agreement on behalf of SCHDC are fully authorized to do so. Whenever the term "SCHDC" is used in this Agreement, such term shall include any and all nominees, assignees, or successors in interest as herein provided. 882/015610-0047 _ 715762.05 02/14/06 -2 F. [1081 Definitions. "50% Very Low Income Household" shall mean a household whose annual income does not exceed fifty percent (50%) of AMI adjusted for family size. "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with SCHDC which, if SCHDC is a partnership or limited liability company, shall include each of the constituent members or partners, respectively thereof. The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. "Affordable Rent" shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent to be charged by SCHDC and paid by Eligible Tenants occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of the Effective Date, and the regulations promulgated pursuant to or incorporated therein, including, without limitation, any applicable regulations promulgated pursuant to Health and Safety Code Section 50093. "Agency Deed of Trust" shall mean that certain Deed of Trust With Assignment of Rents substantially in the form attached hereto and incorporated herein as Attachment No. 6, which secures the Agency Note and SCHDC's performance of its obligations under the Agency Regulatory Agreement. The Agency Deed of Trust shall be recorded against the Site at the Closing. "Agency Note" shall mean that certain Promissory Note substantially in the form attached hereto and incorporated herein as Attachment No. 5. The Agency Note sets forth SCHDC's obligation to pay Agency the Residential Receipts Portion of the Purchase Price from SCHDC's residual receipts from operating the Project, and shall be delivered by SCHDC to the Agency at the Closing. "Agency Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions substantially in the form attached hereto and incorporated herein as Attachment No.7. The Agency Regulatory Agreement sets forth SCHDC's obligations concerning the ownership, operation, and management of the Project. The Agency Regulatory Agreement shall be recorded against the Site at the Closing. "Agency Title Policy" shall have the meaning ascribed in Section 215 hereof. "Agency's Conditions to Closing" shall have the meaning ascribed in Section 210 hereof. "AMI" shall mean the median family income for the Riverside County area promulgated and published annually by the California Department of Housing and Community Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations. I�R '821015610-0047 _ 715762.05 al2/14/06 _3 If HCD ceases annually to publish median incomes, the parties will agree upon an adequate substitute manner for determining area -wide median income. "Annual Financial Statement" shall mean the financial statements prepared by SCHDC for each calendar year, including a balance sheet, income statement, statement of retained earnings, statement of cash flow, and footnotes thereto, prepared in accordance with generally accepted accounting principals consistently applied, as audited by an independent certified public accountant. "Assignment" shall mean a general assignment of Agency's entitlements and approvals substantially in the form attached hereto and incorporated herein as Attachment No. 10. "Bill of Sale" shall mean a bill of sale substantially in the form attached hereto and incorporated herein as Attachment No. 9. "CEQA" shall mean the California Environmental Quality Act, Public Resources Code Section 21000 et seq., as amended. "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. "Close of Escrow" shall have the meaning ascribed in Section 207.3 hereof. "Closing" or "Closing Date" shall have the meaning ascribed in Section 207.3 hereof. "Closing Portion of Purchase Price" shall have the meaning ascribed in Section 207.2 hereof. "Days" shall mean calendar days and the statement of any time period herein shall be calendar days, and not business days, unless otherwise specified. "Deposit" shall have the meaning ascribed in Section 202 hereof. "Developer" shall have the meaning ascribed in Section 300 hereof. "Effective Date" shall mean the later of the dates this Agreement is executed on behalf of Agency and SCHDC. "Eligible Tenant" shall mean a household which qualifies as a "very low income household," an "extremely low income household" (as those terms are described in California Health and Safety Code Sections 50105 and 50106), or a 50% Very Low Income Household. "Escrow" shall have the meaning ascribed in Section 207 hereof. "Escrow Agent" shall have the meaning ascribed in Section 207 hereof. 1120 8821015610-0047 _ 715762 05 .12/14/06 -4 "Evidence of Financing" shall have the meaning ascribed in Section 205 hereof. "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. "Grant Deed" shall have the meaning ascribed in Section 206 hereof. "Hazardous Materials" shall have the meaning ascribed in Section 224 hereof. "Housing Development" shall have the meaning ascribed in Section 101 hereof. "Initial Tax Credit Application" shall have the meaning ascribed in Section 204 hereof. "Institutional Lender" shall mean any of the following institutions having assets or deposits in the aggregate of not less than One Hundred Million Dollars ($100,000,000): a California chartered bank; a bank created and operated under and pursuant to the laws of the United States of America; an "incorporated admitted insurer" (as that term is used in Section 1100.1 of the California Insurance Code); a "foreign (other state) bank" (as that term is defined in Section 1700(1) of the California Financial Code); a federal savings and loan association (Cal. Fin. Code Section 8600); a commercial finance lender (within the meaning of Section 2600 et seq. of the California Financial Code); a "foreign (other nation) bank" provided it is licensed to maintain an office in California, is licensed or otherwise authorized by another state to maintain an agency or branch office in that state, or maintains a federal agency or federal branch in any state (Section 1716 of the California Financial Code); a bank holding company or a subsidiary of a bank holding company which is not a bank (Section 3707 of the California Financial Code); a trust company, savings and loan association, insurance company, investment banker; college or university; pension or retirement fund or system, either governmental or private, or any pension or retirement fund or system of which any of the foregoing shall be trustee, provided the same be organized under the laws of the United States or of any state thereof, and a Real Estate Investment Trust, as defined in Section 856 of the Internal Revenue Code of 1986, as amended, provided such trust is listed on either the American Stock Exchange or the New York Stock Exchange. "Management Unit" shall mean the one (1) unit in the Housing Development that may be occupied by on -site management. "Memorandum" shall mean the Memorandum of Affordable Housing Agreement substantially in the form attached hereto and incorporated herein as Attachment No. 11. "Moderate Income Household" shall have the meaning as set forth in Health and Safety Code Section 50093, or any successor statute. "Outside Closing Date" shall mean August 1, 2008. 8821015610-0047 715762 05 a12F14/06 _5_ "Project" shall have the meaning ascribed in Section 200 hereof. "Project Proforma" shall mean the financial information referred to in Section 205 of this Agreement and attached hereto and incorporated herein as Attachment No. 8 and is SCHDC's best estimate of the costs of ongoing operations based on the information available to SCHDC as of the Effective Date. The Project Proforma shall not undergo material change without the prior approval of Agency's Executive Director, which approval shall not be unreasonably withheld (a material change is one or more change(s) that causes the Net Operating Income as shown on Project Proforma to increase or decrease by a cumulative amount of two percent (2%) or more from what is shown in Attachment No. 8. "Property Documents" shall have the meaning ascribed in Section 219 hereof "Purchase Price" shall have the meaning ascribed in Section 201 hereof. "Qualified Tax Credit Investor" shall mean a person or entity who (i) is an experienced limited partner and investor in multifamily housing developments receiving low income housing tax credits issued by the State of California or the United States federal government and (ii) has obtained or is contractually obligated to obtain a limited partnership or limited liability company membership interest in the Project whereby it will receive 90 percent or more of the Tax Credits obtained in connection with the Project. Agency shall have the right to reasonable prior approval of the identity of the Qualified Tax Credit Investor and of the terms and conditions of the limited partnership agreement or other agreement specifying the terms and conditions, including but not limited to terms and conditions concerning timing and amounts of cash contributions toward Project costs in return for an interest in the owner of the Project and the right to receive Tax Credits. "Residual Receipts Portion of the Purchase Price" shall have the meaning ascribed in Section 201 hereof. 211 hereof. "SCHDC's Conditions to Closing" shall have the meaning ascribed in Section "SCHDC Title Policy" shall have the meaning ascribed in Section 215 hereof. "Schedule of Performance" shall mean that certain Schedule attached hereto and incorporated herein as Attachment No. 3. "Second Tax Credit Application" shall have the meaning ascribed in Section 204 hereof. "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4 California Administrative Code Sections 10300-10340. 882/015610-0047 _6- 715762.05 al2/14/06 "Tax Credits" shall refer to the low income housing tax credits granted by TCAC for the Project pursuant to Section 42 of the Internal Revenue Code and/or California Revenue and Taxation Code, Sections 17057.5, 17058, 23610.4, 23610.5 and California Health and Safety Code Section 50199, et seq. "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by TCAC of nine percent (9%) Tax Credits. hereof. "TCAC" shall mean the California Tax Credit Allocation Committee. "Third Tax Credit Application" shall have the meaning ascribed in Section 204 "Title Company" shall mean Chicago Title Company. "Unit" and "Units" shall have the meaning ascribed in Section 101 hereof. [1091 Prohibition Against Change in Ownership Management and Control of SCHDC and Prohibition Against Transfer of the Site The qualifications and identity of SCHDC are of particular interest to the Agency. It is because of these qualifications and identity that the Agency has entered into this Agreement with SCHDC. Consequently, no person, whether a voluntary or involuntary successor of SCHDC, shall acquire any rights or powers under this Agreement nor shall SCHDC assign all or any part of this Agreement, the Project, the Site, or the Agency Regulatory Agreement without the prior written approval of the Agency. A voluntary or involuntary sale or transfer of any interest in SCHDC or the Site during the term of this Agreement shall be deemed to constitute an assignment or transfer for the purposes of this Section 109, and the written approval of the Agency shall be required prior to effecting such an assignment or transfer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the Agency, shall render this Agreement absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. During the term of this Agreement and the Agency Regulatory Agreement, SCHDC shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or the Project, without the prior written approval of the Agency. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or transfer of the Site or the Project, or any interest therein shall not be required in connection with: (a) the conveyance or dedication of any portion of the Site to the City of La Quinta, or other appropriate governmental agency, including public utilities, where the granting of such easements permits or facilitates the operation of the Project on the Site; (b) any assignment of this Agreement or transfer of the Site, or any of the improvements located thereon, to a limited liability company in which SCHDC has a greater than fifty percent (50%) ownership and management interest; (c) any assignment of this Agreement, or transfer of the Site and any of the improvements located thereon, to a limited partnership in which SCHDC or an Affiliate of SCHDC which is also a non-profit public benefit 892/015610-0047 _ '1 J 715762.05 al2/14/06 -7 corporation is the general partner (a "Limited Partnership"); (d) the leasing of individual rental Units within the Housing Development provided that such leasing is in accordance with the terms of this Agreement; (e) transfers resulting from the death or mental or physical incapacity of an individual; (f) transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (g) transfers of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; (h) the admission of the Qualified Tax Credit Investor to the Limited Partnership; (i) a transfer by the Qualified Tax Credit Investor to an entity that has the same general partner or managing member as the Qualified Tax Credit Investor; 0) the removal by the Qualified Tax Credit Investor of the general partner of the Limited Partnership for a default under the partnership agreement for the Limited Partnership, provided the replacement general partner is reasonably satisfactory to Agency; (k) a sale by the Qualified Tax Credit Investor of credits in syndication; (1) the encumbrance of the limited partner interest by the Qualified Tax Credit Investor as collateral to finance its capital contribution to the Limited Partnership; or (m) the exercise by the general partner of the Limited Partnership of any option to purchase or right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in the Limited Partnership at the conclusion of the tax credit period.. Notwithstanding anything in this Section 109 to the contrary, in the absence of specific written agreement by Agency, no transfer or assignment by SCHDC or any successor in interest to SCHDC, whether or not requiring the approval by Agency, shall be effective unless and until the transferor and transferee execute and deliver to Agency an assignment and assumption agreement in a form and with content reasonably acceptable to Agency's legal counsel. This Section 109 shall not be applicable to the leasing of individual Units to Eligible Tenants in accordance with this Agreement and no assignment and assumption agreement shall be required in connection therewith. G. f 1101 Representations by SCHDC SCHDC represents and warrants to the Agency as follows: 1. SCHDC is duly established and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by SCHDC in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. This Agreement is enforceable against SCHDC in accordance with its terms. 2. SCHDC does not have any contingent obligations or contractual agreements which will materially adversely affect the ability of SCHDC to carry out its obligations hereunder. 3. There are no pending or, so far as is known to SCHDC, threatened, legal proceedings to which SCHDC is or may be made a party to or to which it or any of its property is or may become subject, which have not been fully disclosed in the material submitted to the Agency, which will materially adversely affect the ability of SCHDC to carry out its obligations hereunder. 1 iJ 882/015610-0047 715762 05 al2/14/06 4. There is no action or proceeding pending or, to SCHDC's best knowledge, threatened, looking toward the dissolution or liquidation of SCHDC and there is no action or proceeding pending or, to SCHDC's best knowledge, threatened by or against SCHDC which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of SCHDC to carry out its obligations hereunder. 5. The execution and delivery of this Agreement and all other documents to be executed by SCHDC 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 SCHDC is bound. 6. The execution and delivery of this Agreement and all other documents to be executed by SCHDC 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 SCHDC. 7. No representation, warranty, or covenant of SCHDC in this Agreement, or in any document or certificate famished 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. 8. All financial information delivered to Agency, including, without limitation, information relating to the financial condition of SCHDC, 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. SCHDC shall notify Agency in writing of any material changes to such information delivered to the Agency. 9. SCHDC has, and will as required by its obligations hereunder, dedicate, allocate and otherwise make available, sufficient financial and other resources to perform its obligations under this Agreement. Each of the foregoing items 1 to 9, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the close of escrow for the Site. SCHDC shall advise the Agency in writing if there is any change material pertaining to any matters set forth or referenced in the foregoing items 1 to 9, inclusive. H. f 1111 Representations by the Agency The Agency represents and warrants to SCHDC as follows 1. Agency is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City of La Quinta. Agency has full right, power and lawful authority to transfer the Project as provided herein and the execution, performance, and delivery of this Agreement by Agency has been fully authorized 134 882/015610-0047 715762.05 .12/14/06 by all requisite actions on the part of Agency. The parties who have executed this Agreement on behalf of Agency are authorized to bind Agency by their signatures hereto. 2. Agency does not, as far as is known to Agency, have any contingent obligations or contractual agreements which will materially adversely affect the ability of Agency to carry out its obligations hereunder. 3. There are no pending or, so far as is known to Agency, threatened, legal proceedings to which Agency is or may be made a party or to which it or any of its property is or may become subject, which will materially adversely affect the ability of Agency to carry out its obligations hereunder. 4. There is no action or proceeding pending or, to Agency's knowledge, threatened, looking toward the dissolution or liquidation of Agency and there is no action or proceeding pending or, to Agency's knowledge, threatened by or against Agency which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of Agency to carry out its obligations hereunder. 5. To Agency's knowledge, the Site is not currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. 6. Agency is not the subject of a bankruptcy proceeding. 7. To Agency's knowledge, no Hazardous Materials (as defined in Section 224 below) are now or have been released, used, or stored on or within any portion of the Site in violation of applicable laws or regulations governing the release, use, or storage of Hazardous Materials, and there has not been any federal, state, or local enforcement, clean-up, removal, remedial, or other governmental or regulatory actions instituted or completed affecting the Site. 8. To Agency's knowledge, the execution and delivery of this Agreement and all other documents to be executed by Agency 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 Agency is bound. 9. To Agency's knowledge, the execution and delivery of this Agreement and all other documents to be executed by Agency 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 Agency. 10. To Agency's knowledge, no representation, warranty, or covenant of Agency in this Agreement, or in any document or certificate furnished or to be furnished to SCHDC 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. 882/015610-0047 -1 O_ 715762 05 a12/14/06 Each of the foregoing items I to 10, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the close of escrow for the Site. The Agency shall advise SCHDC in writing if there is any change material pertaining to any matters set forth or referenced in the foregoing items 1 to 10, inclusive. As used in this Section I11, the term "knowledge" or "known" shall mean the actual (not constructive or imputed) knowledge of the Agency Executive Director, without any investigation or inquiry or duty of investigation or inquiry. II. 12001 SALE OF PROJECT Pursuant to the terms set forth herein, Agency shall sell to SCHDC and SCHDC shall purchase from Agency the Project. As used herein, the term "Project" shall mean and refer to all of the following: (a) The Site; (b) The Housing Development to be constructed by Agency on the Site, including all appurtenant structures and facilities; (c) All personal property belonging to Agency and located upon the Site; and (d) All appurtenances, rights (including reversionary rights), easements and privileges belonging to or running with the Site, including, without limitation, all of Agency's right, title and interest in and to any and all land lying in the bed of any street, road, cul-de-sac, alley or accessway, open or closed, existing, vacated or proposed, adjoining, adjacent to, or contiguous with the Site, and all water rights and other entitlements which Agency may own in conjunction with Agency's ownership of the Site, including all fixtures, trade fixtures, as well as the following items, if any, owned and/or leased by Agency and presently located in, on or upon the Site: electrical distribution systems (power panels, buss ducting, conduits, disconnects, lighting fixtures), telephone distribution systems, and wall coverings. In connection with Agency's sale to SCHDC of the Project, Agency shall, at the Closing, assign and be deemed to assign to SCHDC all of Agency's right, title, and interest in and to all entitlements, approvals, plans, specifications, contracts and agreements including, but not limited to, those between Agency and its contractors, subcontractors, engineers, architects and other consultants relating to the Site or the Housing Development, subject to any limitations which may be imposed by law or under any agreements with any governmental agency or authority or such contractors, subcontractors, engineers, architects and consultants, together with, on a non- exclusive basis, all of Agency's right, claims, actions, or causes of action against any of Agency's contractors, subcontractors, engineers, architects or other consultants relating to the preparation or production of such plans, specifications and other documents or to the construction of the Housing Development or based in any way on any work performed on or to the Site, including, without limitation, any and all warranties and guarantees with respect to the development of the Housing Development on the Site, including, without limitation, grading work performed in connection therewith, including all statutory, express or implied warranties and all rights of Agency as an additional insured or otherwise pertaining to insurance coverage maintained by or for the Agency prior to the Closing and covering the Site. In furtherance of the I A 882/015610-0047 -11- 715762 05 a12/14/06 foregoing, the Agency shall deliver to SCHDC an executed general assignment in the form and content attached hereto as Attachment No. 10. A. f2011 Purchase Price. SCHDC shall pay to Agency the total of Twenty -Six Million Six Hundred Eight Thousand Seven Hundred Thirty -Four Dollars ($26,608,734) for the Project (the "Purchase Price"), which SCHDC shall fund in the following manner: (i) SCHDC shall obtain a conventional loan from an Institutional Lender in the amount of One Million Three Hundred Seventeen Thousand One Hundred Fifty -Two Dollars ($1,317,152) (the "Conventional Loan"). (ii) SCHDC shall obtain a reservation of Tax Credits in the amount of Eleven Million Three Hundred Twenty -Four Thousand One Hundred Fifty -Two Dollars ($11,324,751). (iii) SCHDC shall pay to Agency the remaining portions of the Purchase Price (i.e., the Purchase Price less the sum of the Conventional Loan and the Tax Credits for the Project), in the amount of Thirteen Million Nine Hundred Sixty -Six Thousand Eight Hundred Thirty -One Dollars ($13,966,831) (the "Residual Receipts Portion of the Purchase Price"), pursuant to the terms of the Agency Note. Notwithstanding the foregoing, the Executive Director shall have the authority, in his or her sole and absolute discretion, to accept payment of the Purchase Price in a manner that provides for funding from the foregoing sources in different amounts as those set forth above, provided that the total amount of the Purchase Price does not vary. In such event, the Agency shall modify the Agency Note to reflect the revised amount. B. L2021 Deposit. SCHDC shall deposit with Escrow Agent concurrently with the opening of Escrow the amount of Fifty Thousand Dollars ($50,000) (the "Deposit"). Escrow Agent shall place the Deposit in the highest interest -bearing account permitting immediate withdrawal without penalty in any federally or state chartered bank or financial institution generally used by Escrow Agent. If the Deposit is returned to SCHDC pursuant to the terms hereof, interest earned on the Deposit shall be paid to SCHDC at the time the Deposit is returned to SCHDC. If the sale is consummated and the Escrow closes, interest earned on the Deposit shall be applied to SCHDC's obligation to pay the Purchase Price. If this Agreement has not been terminated by SCHDC or Agency pursuant to the provisions hereof, a portion of the Deposit, in the amount of Twenty -Five Thousand Dollars ($25,000) (the "Release Amount"), shall become non-refundable and released by Escrow Agent to Agency on the date that is sixty (60) days after the Effective Date; provided, however, that in the event this Agreement is subsequently terminated as a result of an Agency default, the Deposit, including the Release Amount, shall be returned to SCHDC. Unless excused due to i J 1 882/015610-0047 -12- 715762.05 a12/14/06 Agency's default or failure to perform hereunder, in the event SCHDC defaults or fails to perform its obligations under this Agreement Agency shall be entitled to terminate this Agreement by written notice to SCHDC and to Escrow Agent and to receive and retain the Deposit, including the Release Amount, if such amount has been released to Agency, together with all interest thereon. In the event this Agreement is terminated by either Party by reason other than a default by the other Party, Escrow Agent shall return to SCHDC the Deposit, less the Release Amount, if such amount has been released to Agency. In the event this Agreement has not been terminated and the Escrow closes as contemplated hereunder, the Deposit shall be applied towards the Purchase Price. C. [2031 Payment of Closing Portion of the Purchase Price. Prior to the Closing Date, and as one of Agency's Conditions to Closing, SCHDC shall deposit with Escrow Holder the Closing Portion of the Purchase Price. D. [2041 Tax Credits; Tax Credit Regulatory Agreement. SCHDC shall submit an application to TCAC for competitive nine percent (9%) tax credits as may be necessary to secure reservation of nine percent (9%) Tax Credits for the Project on or before the published TCAC first round submittal deadline for 2007 (the "Initial Tax Credit Application"), in the amount of Eleven Million Three Hundred Twenty -Four Thousand Seven Hundred Fifty -One Dollars ($11,324,751). SCHDC's qualification for and participation in the Tax Credit Program in accordance with the terms set forth in this Agreement is a condition to the performance of this Agreement by Agency and by SCHDC. In the event that Tax Credits are not awarded through the Initial Tax Credit Application, SCHDC shall submit a second application for competitive federal nine percent (9%) Tax Credits on or before the published TCAC second round submittal deadline for 2007 (the "Second Tax Credit Application"). In the event that SCHDC elects to submit the Second Tax Credit Application and Tax Credits are not awarded through the Second Tax Credit Application, SCHDC shall submit a third application to TCAC for competitive federal nine percent (9%) Tax Credits on or before the published TCAC first round submittal deadline for 2008 (the "Third Tax Credit Application"). SCHDC agrees to perform all of SCHDC's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this Agreement, then in such event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority to enforce any breach or default by SCHDC under the Tax Credit Regulatory Agreement in the same manner as though it were a breach or default hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's sole and absolute discretion, SCHDC shall not consent to any amendment of or modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years from the Effective Date of the Agency Regulatory Agreement or (ii) releases SCHDC from the amp i 882/015610-0047 -13- 715762.05 a12/14/06 requirement that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix attached to the Agency Regulatory Agreement. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. Agency shall have no responsibilities with respect to SCHDC's performance of its obligations under the Tax Credit Program, nor shall Agency do anything or fail to do anything it is required by law or this Agreement to do which will adversely affect SCHDC's performance of its Tax Credit Program obligations. In order to assist Agency in performing its obligations and enforcing its rights under this Agreement (with respect to reviewing SCHDC's Evidence of Financing, insuring the continued affordability and maintenance of the Units, and obtaining payments due under the Agency Note), SCHDC agrees to promptly submit to Agency all of the following documents at such time as the same are submitted by SCHDC to the TCAC or other applicable body or when such documents are received by SCHDC, as applicable (any documents submitted prior to the Effective Date of this Agreement shall also have been submitted by SCHDC to Agency and reviewed by Agency prior to the Effective Date of this Agreement): i) Complete copies of SCHDC's applications to the TCAC for the preliminary reservation, final reservation, carryover allocation (if applicable), and placed -in- service credit award, and any amendments or modifications thereto (4 California Administrative Code §§ 10325(b)-(e) and 10345). ii) Complete copies of any correspondence or transmittals by the TCAC to SCHDC notifying SCHDC regarding the action(s) taken with respect to any of the applications referred to in clause (i). iii) A complete copy of the regulatory agreement between the TCAC and SCHDC (4 California Administrative Code § 10340(c)). (As more fully discussed in Section 3.11 of the Agency Regulatory Agreement, should Agency be prevented by a final order of a court of competent jurisdiction, applicable and binding appellate opinion, or regulatory body with jurisdiction from enforcing, for any reason, the affordability restrictions set forth in this Agreement, Agency shall be a third -party beneficiary under said agreement and shall have full authority to enforce any breach or default by SCHDC thereunder in the same manner as though it were a breach or default under this Agreement.) iv) Complete copies of all progress reports submitted by SCHDC to the TCAC prior to the issuance of tax credit allocations (4 California Administrative Code § 10340(d)) and the annual certifications and Project Status Reports submitted by SCHDC to the 1 J 882/015610-0047 -14- 71576205 al2/14/06 TCAC subsequent to the issuance of tax credit allocations (4 California Administrative Code § 10340(e)). v) Complete copies of all correspondence or transmittals from the TCAC or other jurisdiction (such as the Internal Revenue Service) containing any notification regarding the Project's noncompliance with applicable provisions of the Tax Credit Program. In addition to the foregoing sources of funding for the Project, SCHDC shall diligently seek other sources of funding that are or may be available to help fund its purchase/acquisition of the Project. E. [2051 Evidence of Financing The financial projections for the Project are set forth in the Project Pro Forma (Attachment No. 8). Within the time set forth in the Schedule of Performance, and as a condition precedent to Agency's obligation to transfer the Project to SCHDC, SCHDC shall submit to the Executive Director evidence reasonably satisfactory to the Executive Director that SCHDC has, or will have, prior to the Close of Escrow, the financial capability necessary to acquire and operate the Project on the Site pursuant to this Agreement. Such evidence of financial capability (collectively, the "Evidence of Financing") shall include all of the following: A copy of an executed letter of commitment from an Institutional Lender to make the Conventional Loan that is subject only to the usual and customary conditions of the lender of the Convention Loan for similar loans, and provided such conditions have been approved by Agency, with such approval not to be unreasonably withheld, conditioned, or delayed. A true and correct copy of the preliminary reservation letter from TCAC, a copy of the letter of intent from the Qualified Tax Credit Investor reflecting the total amount of the syndication proceeds and the timing of the payment of such proceeds. A copy of SCHDC's most recently prepared Annual Financial Statement, and a copy of SCHDC's most recent internally prepared, unaudited financial statement, which shall include a balance sheet, income statement, statement of retained earnings, statement of cash flows, and footnotes thereto, prepared in accordance with generally accepted accounting principles consistently applied. The Executive Director shall complete his or her review of and approve or disapprove SCHDC's Evidence of Financing within the time set forth in Schedule of Performance. If the Executive Director shall disapprove such Evidence of Financing, he or she shall do so by written notice to SCHDC stating the reasons for such disapproval. In such event, SCHDC shall promptly resubmit its Evidence of Financing not less than thirty (30) days after receipt of the Executive Director's disapproval, the Executive Director shall reconsider such resubmittal within the same number of days allowed for the initial submittal, and the deadlines in Schedule of Performance shall be extended accordingly. 1iJ 882/015610-0047 -15- 715762 05 al2/14/06 [2061 Acquisition of the Site Pursuant to Grant Deed. SCHDC shall acquire a fee simple title to the Site pursuant to a grant deed in the form attached hereto and incorporated herein as Attachment No. 4 ("Grant Deed"). G. [2071 Escrow 1. Opening of Escrow. Agency and SCHDC agree to open an escrow (the "Escrow") with Chicago Title (the "Escrow Agent"), by the time established therefor in Schedule of Performance. This Agreement constitutes Agency's and SCHDC's escrow instructions for the Agency's sale and SCHDC's purchase of the Project and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the Escrow. The Escrow Agent is hereby empowered to act under this Agreement, and the Escrow Agent, upon indicating within five (5) days after the opening of the Escrow its acceptance of the provisions of this Section 207, in writing, delivered to the Agency and SCHDC, shall carry out its duties as Escrow Agent hereunder. In the event of any conflict or inconsistency between any additional escrow instructions required by the Escrow Agent and the provisions of this Agreement, as between the parties hereto, the provisions of this Agreement shall supersede and control. Any amendment of the escrow instructions set forth or described herein shall be in writing and signed by both Agency and SCHDC. At the time of any authorized amendment to the escrow instructions, the Escrow Agent shall agree, by signing below an appropriate statement on such an amendment, to carry out its duties as Escrow Agent under such an amendment. All communications from the Escrow Agent to Agency or SCHDC shall be in writing and directed to the addresses and in the manner established in Section 601 of this Agreement for notices, demands, and communications between Agency and SCHDC. 2. Deposits Into Escrow. Agency and SCHDC shall deposit the following documents and pay into the Escrow the following fees, charges and costs promptly after the Escrow Agent has notified the Agency of the total amount of such fees, charges and costs, but not earlier than two (2) days prior to Scheduled date for the Closing: a. SCHDC shall deposit the "Closing Portion of the Purchase Price," which, for purposes of this Agreement, shall be the Purchase Price less the sum of (i) the Deposit; and (ii) the Residual Receipts Portion of the Purchase Price; b. Agency and SCHDC shall each pay one-half of the Escrow fee; C. Agency shall pay the costs, if any, of drawing the Grant Deed; d. Agency shall pay recording fees, if any; e. Agency and SCHDC shall pay their respective notary fees; f. Agency shall pay the premium for SCHDC Title Policy up to the amount set forth in Section 215 and SCHDC shall pay for its portion, if any, as set forth in Section 215. 882/015610-0047 -16- 715762 05 .12/14/06 g. Agency shall pay for any transfer tax and any state, county or city documentary stamps. h. Agency shall deposit with the Escrow Agent the fully executed Grant Deed, and Agency and SCHDC, as applicable, shall deposit the fully executed Agency Deed of Trust, Agency Regulatory Agreement, and Memorandum or executed counterparts thereof. 3. Escrow Officer Obli atg ions. The Escrow Officer shall notify the Agency and SCHDC when all outstanding documents, including the Grant Deed, the Agency Deed of Trust, the Agency Regulatory Agreement, and the Memorandum have been executed and submitted to Escrow by the applicable party. Upon confirmation by the Escrow Agent that all of the Agency's Conditions to Closing and all of SCHDC's Conditions to Closing have been satisfied, or waived by the appropriate party, the Escrow Agent shall record the following documents in the following order of recordation: (1) Grant Deed, (2) Agency Regulatory Agreement, (3) deed of trust securing the Conventional Loan, (4) Agency Deed of Trust, and (5) Memorandum. The date such documents are recorded shall be referred to herein as the "Close of Escrow" or the "Closing Date." All funds received in the Escrow shall be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent in an interest -earning general escrow account or accounts with any state or national bank doing business in the State of California. Such funds may be transferred to any other general escrow account or accounts. All disbursements shall be made by check of the Escrow Agent. Any amendment to these escrow instructions shall be in writing and signed by the Agency. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. The liability of the Escrow Agent in the capacity of escrow holder with respect to the Agency is limited to performance of the obligations imposed under it under Sections 202, 207, 213, 215, and 216 of this Agreement. H. [2081 Conveyance of Title and Delivery of Possession Provided that SCHDC is not in default under this Agreement and all of Agency's Conditions to Closing and SCHDC's Conditions to Closing have occurred, and subject to any mutually agreed upon extensions of time, the Closing shall occur, and Agency shall convey to SCHDC title to the Project on or before the later of (i) the date that is thirty-five (35) days after Agency formally accepts the completed Housing Development from the Developer, provided Agency has obtained labor and materials releases from all subcontractors who performed work on the Housing Development, or (ii) ninety (90) days after SCHDC is awarded the Tax Credits. The Agency and SCHDC agree to perform all acts necessary to conveyance of title on or before the Outside Closing Date. Possession shall be delivered to SCHDC concurrently with the conveyance of title at the Close of Escrow, except that limited access may be permitted before the Close of Escrow r 7 l k.. 892/015610-0047 _ 17_ 715762 05 al2/14/06 as permitted in Section 220 of this Agreement. SCHDC shall accept title and possession on said date. I. 12091 Conditions to Close of Escrow 12101 Agency's Conditions to Closing The Agency's obligation to convey the Project to SCHDC and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of the Agency, be conditional and contingent upon the satisfaction, or waiver by the Agency in its sole and absolute discretion, or before the Outside Closing Date, of each and all of the following conditions (collectively, "Agency's Conditions to Closing"); a. SCHDC shall have deposited into Escrow the Closing Portion of the Purchase Price and all other sums and documents required of SCHDC by this Agreement; b. SCHDC shall have delivered to Agency or deposited into Escrow the Agency Note, the Agency Deed of Trust, duly executed and acknowledged by SCHDC, the Agency Regulatory Agreement, duly executed and acknowledged by SCHDC, and the Memorandum, duly executed and acknowledged by SCHDC; C. SCHDC shall have executed and delivered to Agency the Agency Note. d. SCHDC shall have submitted to the Executive Director the evidence of insurance required pursuant to Section 403 of this Agreement; e. SCHDC shall have submitted to the Executive Director SCHDC's Evidence of Financing, in accordance with Section 205 herein, and the Executive Director shall have approved the same; f. On the Closing Date, the Title Company shall be irrevocably committed to issue the Agency Title Policy, if elected by Agency; g. Escrow Agent holds and will deliver to Agency the instruments and funds to be delivered to Agency under this Agreement; and Agreement. h. SCHDC is not in material default of any term or condition of this 2. f2111 SCHDC's Conditions to Closing SCHDC's obligation to purchase the Project from Agency and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of SCHDC, be conditional and contingent upon the satisfaction, or waiver by SCHDC in its sole and absolute discretion, on or before the Outside Closing Date, of each and all of the following conditions (collectively, "SCHDC's Conditions to Closing"). 882/015610-0047 0 715762 05 a12/14/06 a. Agency has deposited into Escrow the Grant Deed, duly executed and acknowledged by Agency, and all other sums and documents required of Agency by this Agreement; b. Agency shall have deposited into Escrow the Agency Deed of Trust, duly executed and acknowledged by Agency, the Agency Regulatory Agreement, duly executed and acknowledged by Agency, and the Memorandum, duly executed and acknowledged by Agency; C. On the Closing Date, the Title Company shall be irrevocably committed to issue the SCHDC Title Policy insuring that fee title to the Site is vested in SCHDC; d. Escrow Agent holds and will deliver to SCHDC the instruments and funds to be delivered to SCHDC under this Agreement; e. SCHDC has approved the environmental condition of the Site; f. SCHDC has approved the Documents pursuant to Section 219 below; g. Agency shall have completed construction of the Housing Development, as evidenced by City's issuance of a certificate of occupancy for the same; Bill of Sale; Assignment; and Agreement. h. Agency shall have executed and delivered to Escrow Agent the i. Agency shall have executed and delivered to Escrow Agent the j. Agency is not in material default of any term or condition of this 3. [2121 Waiver Agency may at any time or times, at its election, waive any of the conditions set forth in Section 210 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by Agency and delivered to SCHDC. SCHDC may at any time or times, at its election, waive any of the conditions set forth in Section 211 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by SCHDC and delivered to Agency. 4. [2131 Failure of Conditions Precedent; Termination In the event that by the Outside Closing Date each of the conditions set forth in Section 210 is not fulfilled, or waived by Agency pursuant to Section 212, Agency may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder. In the event that by the Outside Closing Date each of the 882/015610-0047 715762 05 a]2/14/06 -19- t conditions set forth in Section 211 are not fulfilled, or waived by SCHDC pursuant to Section 212, SCHDC may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder. In the event this Agreement is terminated, all documents and funds delivered by SCHDC to Agency or Escrow Agent shall be returned immediately to SCHDC and all documents and funds delivered by Agency to SCHDC or Escrow Agent shall be returned immediately to Agency. Notwithstanding the foregoing and subject to Section 202 hereof, (i) in the event the Release Amount has been released to Agency, SCHDC shall not be entitled to the return of such amount; and (ii) in the event this Agreement has been terminated as a result of SCHDC's default, Agency shall be entitled to the receipt of the Deposit, including all interest thereon. Nothing in this Section 213 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder. J. [2141 Condition of Title The Agency shall convey to SCHDC fee simple title to the Project free and clear of all recorded liens, encumbrances, encroachments, assessments, leases and taxes except the provisions of the Grant Deed, the Agency Deed of Trust, the Agency Regulatory Agreement, the Memorandum, the standard printed conditions and exceptions contained in the ALTA standard owner's policy of title insurance that is regularly issued by the Title Company in transactions similar to the one contemplated by this Agreement, as approved by SCHDC pursuant to this Section 214. Within five (5) days after the Effective Date, Agency shall cause the Title Company to deliver to SCHDC a standard preliminary title report with respect to the Project, together with legible copies of the documents underlying the exceptions set forth in the Title Report and, as soon as possible thereafter, a plotting of all plottable easements and items (collectively, the "Title Report"). SCHDC shall have the right to reasonably approve or disapprove the condition of title as reflected in the Title Report; provided, however, that SCHDC hereby approves the Redevelopment Plan and the lien of current non -delinquent real property taxes and assessments, if any. SCHDC shall have fifteen (15) business days from the date of receipt of the Title Report pursuant to this Section 214 to give written notice to Agency of its approval or disapproval of any the title exceptions set forth in the Title Report. SCHDC's failure to give written approval of the Title Report within such time limit shall be deemed approval of the Title Report by SCHDC. If SCHDC notifies Agency of its disapproval of any of the title exceptions in the Title Report (the "Disapproved Exceptions"), Agency shall have the right, but not the obligation, to remove any such Disapproved Exceptions within ten (10) business days after receiving written notice of SCHDC's disapproval or provide assurances satisfactory to SCHDC that such Disapproved Exception(s) will be removed on or before conveyance of the Project. If Agency cannot or in its sole discretion does not elect to remove any of the Disapproved Exceptions within that period, SCHDC shall have ten (10) business days after the expiration of such ten (10) business days to either give Agency written notice that it elects to proceed with the conveyance of the Project subject to the Disapproved Exceptions or to give Agency written notice that it elects to terminate this Agreement. Agency's failure to notify SCHDC of its election to remove or not to remove the Disapproved Exceptions shall be deemed Agency's election not to remove the Disapproved Exceptions. SCHDC's failure to give written notice of 4 e 882/015610-0047 1f 715762 05 a12/14ro6 -20- its election to proceed with the conveyance or to terminate this Agreement after Agency elects or is deemed to have elected not to remove the Disapproved Exceptions shall be deemed its election to proceed subject to the Disapproved Exceptions. SCHDC shall have the right to approve or disapprove any exceptions reported by the Title Company after SCHDC has approved the condition of title for the Project (which are not created by SCHDC). Agency shall not voluntarily create any new exceptions to title following the date of this Agreement. K. [2151 Title Insurance Concurrently with recordation of the Grant Deed, the Escrow Agent shall instruct the Title Company to provide and deliver to SCHDC an ALTA owner's policy of title insurance that does not require a survey, issued by the Title Company and insuring that the title to the Site is vested in SCHDC, or its assignee, as applicable, in the condition required by Section 214 of this Agreement (the "SCHDC Title Policy"). The Title Company shall provide the Agency with a copy of SCHDC Title Policy and SCHDC Title Policy shall be in the amount of the Purchase Price. The Agency shall pay the title insurance premium attributable to SCHDC Title Policy. The Title Company shall, if requested by SCHDC, increase the amount of SCHDC Title Policy or provide SCHDC with an extended policy, coverages, or endorsements. SCHDC shall pay the portion of the premium associated with such extended or additional coverages or endorsements. At Agency's election, Agency may obtain from the Title Company an ALTA lender's policy of title insurance that does not require a survey, together with such endorsements as may be reasonably requested by Agency with liability in the amount of the Agency Note, covering the Project, showing title vested in SCHDC, and insuring the validity and priority of, respectively, the Agency Deed of Trust, Agency Regulatory Agreement, and Memorandum (the "Agency Title Policy"). L. [2161 Taxes and Assessments Ad valorem taxes and assessments, if any, on the Project, and taxes upon this Agreement or any rights hereunder, levied, assessed or imposed for any period commencing prior to conveyance of title shall be home by the Agency. All ad valorem taxes and assessments levied or imposed for any period commencing after close of the Escrow shall be paid by SCHDC. M. L 171 Conveyance Free of Possession The Project shall be conveyed free of any possession or right of possession by any person except that of SCHDC and the easements and other encumbrances of record (subject to SCHDC's right to review the condition of title pursuant to Section 214). 882/015610-0047 -21- 715762 05 a12114106 N. [2181 Document Review; Inspections• Condition of Proiect 1. [2191 Document Review. (a) Within fifteen (15) days after the Effective Date, Agency shall make available to SCHDC for its review, true, correct and legible copies of those of the following items which are in Agency's possession or control or in the possession or control of an agent of Agency, which relate to the Site and/or Project (collectively, and with all other items made available pursuant to the provisions of this Section 219, the "Property Documents"). Any Property Documents which Agency has received from any third party will be made available to SCHDC without any representation or warranty: (i) a current waiting list for the Project (if applicable); (ii) current ad valorem and personal property tax bills for the Site, and any copies of such bills for the last two tax years; (iii) any and all environmental reports, preliminary environ- mental assessments, soil tests and studies concerning the Site. (b) Agency agrees to allow SCHDC, its authorized agents and representatives, to inspect and make copies, at its own expense, of all Property Documents. (c) SCHDC's obligations hereunder shall be conditioned upon SCHDC's written approval of all Property Documents within the time set forth in the Schedule of Performance. SCHDC's failure to give its written approval of all Property Documents shall be deemed to be disapproval thereof, and, in such event, the rights of the parties are set forth in Section 213 above. 2. [2201 Inspections. SCHDC shall conduct SCHDC's own investigation of the Site, including but not limited to its physical condition, the soils and toxic conditions of the Site and all other matters which in SCHDC's judgment affect or influence SCHDC's proposed use of the Site and SCHDC's willingness to acquire the Project pursuant to this Agreement. SCHDC's investigation may include, without limitation, the preparation by a duly licensed soils engineer of a soils report for the Site. Within thirty (30) days after the Effective Date, SCHDC shall provide written notice to the Agency of SCHDC's determinations concerning the suitability of the physical condition of the Site. If, in SCHDC's reasonable judgment, the physical condition of the Site is unsuitable for the use or uses to which the Site will be put, then SCHDC shall have the option either to (a) take any action necessary to place the Site in a condition suitable for operation of the Project, at no cost to the Agency; or (b) terminate this Agreement pursuant to the provisions of Section 213 hereof. If SCHDC has not notified the Agency of its determinations concerning the suitability of the physical condition of the Site by the close of such thirty (30) day period, SCHDC shall be deemed to have waived its right to terminate this Agreement pursuant to this Section. + s'7 882/015610-0047 _22_ i 715762.05 a12/14/06 3. [2211 "As Is". The Agency has provided or will provide (in compliance with Section 219) SCHDC with all information of which it has actual knowledge concerning the physical condition of the Site, including, without limitation, information about any "Hazardous Materials," as defined in Section 224 below. SCHDC acknowledges and agrees that any portion of the Site and Project that it acquires from the Agency pursuant to this Agreement shall be purchased "AS IS" "WHERE IS" "WITH ALL FAULTS," in its physical condition as of the Closing, with no warranties of any kind or nature, express or implied, including, without limitation, warranties of fitness for a particular purpose or warranties of habitability, except those warranties set forth in Section 111.7 above, as to the physical condition thereof, the presence or absence of any latent or patent condition thereon or therein, including, without limitation, any Hazardous Materials thereon or therein, and any other matters affecting the Project. 4. [2221 Indemnity. SCHDC agrees, from and after the date of recordation of the Grant Deed, to defend, indemnify, protect and hold harmless the Agency and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns (collectively, the "Indemnities") from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, "Environmental Response Actions" (as defined in Section 224 below), claims, losses, damages, fines, penalties, expenses, "Environmental Response Costs" (as defined in Section 224 below) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees), occurring during and caused by SCHDC's use and occupancy of the Project, and resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials at, on, in, beneath or from the Project, unless caused by the negligence or willful misconduct of Indemnities. SCHDC's defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Hazardous Materials, at SCHDC's sole cost. Notwithstanding the foregoing, the Agency agrees to indemnify, defend, and hold SCHDC harmless for, from, and against any and all claims, demands, liabilities, costs, expenses, Environmental Response Actions, Environmental Response Costs, damages, cause or, causes or action of any nature whatsoever arising from any misrepresentation or breach of the warranty set forth in Section 111.7 above, or otherwise resulting from or in connection with the generation, storage, handling, transportation, use, and/or release of Hazardous Materials at, on, in, beneath, or from the Project by the Agency or during the Agency's ownership or possession of the Project. 5. [2231 Release and Waiver. Subject to the exceptions set forth in Section 222 above, SCHDC hereby releases and waives all rights, causes of action and claims SCHDC has or may have in the future against the Indemnities arising out of or in connection with any Hazardous Materials at, on, in, beneath or from the Site or Project. In furtherance of the intentions set forth herein, SCHDC acknowledges that it is familiar with Section 1542 of the Civil Code of the State of California which provides as follows: 1 ku 882/015610-0047 715762 05 a]2/14/06 -23- "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THIS SETTLEMENT WITH THE DEBTOR." SCHDC hereby waives and relinquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the statutory or non -statutory law of any other applicable jurisdiction to the full extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of this Section 223. SCHDC's Initials: 6. [2241 Definitions. a. As used in this Agreement, the term "Environmental Response Actions" means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, initiated or required in connection with any local, state or federal governmental or private party claims, including any claims by SCHDC. b. As used in this Agreement, the term "Environmental Response Costs" means any and all costs associated with Environmental Response Actions including, without limitation, any and all fines, penalties and damages. C. As used in this Agreement, the term "Hazardous Materials" means any substance, material or waste which is (1) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," or "restricted hazardous waste" under any provision of California law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (7) defined as a "hazardous substance" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9) determined by a California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property. 7. [2251 Materiality. SCHDC acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of SCHDC for the benefit of the Agency set forth in this Agreement are a material element of the consideration to the Agency for the performance of its obligations under this Agreement, and that the Agency would not have entered this Agreement unless SCHDC's obligations were as provided for herein. Y'I 882/015610-0047 -24- 71576205 a12/14/06 III. 13001 DEVELOPMENT OF THE SITE As of the Effective Date, Agency has completed preparations of plans and specifications for the Housing Development (the "Project Plans"), and Agency has solicited construction bids. The Agency anticipates selecting a developer (the "Developer") to develop the Housing Development in August, 2006, and contemplates completion of construction within 12-18 months thereafter. SCHDC acknowledges that SCHDC has reviewed and approved the Project Plans. Agency shall require the Developer to develop the Project in compliance with the Project Plans and all applicable laws, ordinances, and regulations, including applicable labor and wage standards. Agency shall obtain the approval of SCHDC, which approval shall not be unreasonably withheld, conditioned, or delayed, prior to authorizing any change order that substantially alters the design or construction of the Housing Development as set forth in the Project Plans. During construction of the Housing Development, SCHDC shall have the right to enter the Site and the Project and make visual inspections thereof. Agency shall have the right, but not the obligation, to require that a representative of Developer or Agency accompany SCHDC during any such inspection. SCHDC shall hold Agency harmless from any bodily injury or related damages arising out of the activities of SCHDC as referred to in this Section 300. Agency shall provide SCHDC with progress reports, on at least a monthly basis, concerning the development of the Housing Development. After Developer completes construction of the Housing Development and prior to the Closing, SCHDC may perform a walk-thru inspection of the Housing Development with a representative(s) of the Agency to determine whether the Housing Development has been constructed substantially in conformance with the Project Plans. If SCHDC reasonably determines that the Housing Development has not been constructed in substantial conformance with the Project Plans, subject to any change orders approved by SCHDC pursuant to this Section 300, and that such deviations will cause operation of the Project to be infeasible, SCHDC may terminate this Agreement without further liability. In such event, SCHDC shall be entitled to a return of the Deposit, including the Release Amount. Within thirty (30) days after the Project has been completed, Agency shall provide to SCHDC a copy of the as -built plans for the Project. SCHDC acknowledges that the Project will be developed with energy efficient facilities, and that prior to conveying the Project and Site to SCHDC Agency intends to submit an application to the local gas and electric utility providers for solar energy credits. In the event that any such credits are sent to or received by SCHDC, SCHDC shall promptly deliver the credits to the Agency. IV. 14001 USE OF THE PROJECT A. [4011 Affordable Housing SCHDC hereby covenants and agrees, for itself and its successors and assigns, to use and maintain the Project during the term of the Agency Regulatory Agreement only as a 882/015610-0047 -25- 715762.05 .12/14/06 rental apartment housing project with eighty (80) apartment dwelling units (the "Units"), with each such Unit (other than the Management Unit)" to be rented to and occupied by Eligible Tenants at an Affordable Rent, all as more fully described in the Agency Regulatory Agreement. The Management Unit shall be rented to and occupied by a Moderate Income Household at a rent that is affordable to such household, as determined pursuant to Health and Safety Code Section 50093. B. [4021 Uses In Accordance with Redevelopment Plan; Nondiscrimination SCHDC covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Project or any part thereof that SCHDC and such successors and assignees, shall devote the Project to the uses specified in the Redevelopment Plan, the Grant Deed, the Agency Regulatory Agreement, and this Agreement for the periods of time specified therein. The foregoing covenants shall run with the land. SCHDC covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project, nor shall SCHDC itself or any person claiming under or though 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 Project. The foregoing covenants shall run with the land. SCHDC shall refrain from restricting the rental, sale or lease of the Project on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: I . In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation or any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin 882/C15610-0047 715762.05 a12/t4/06 -26- in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "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 premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by SCHDC pursuant to this Agreement, or any part thereof. The covenants against racial discrimination shall remain in effect in perpetuity. C. [4031 Indemnity' Insurance Requirements SCHDC shall indemnify, defend, and hold harmless the Agency and the City, and their respective officers, officials, employees, agents, and representatives, from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including expert witness fees, attorneys fees, and costs), which may be caused by any of SCHDC's activities under this Agreement. Commencing with Effective Date hereof and ending on the expiration date of the Agency Regulatory Agreement, SCHDC shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Executive Director, the following policies of insurance: A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of Three Million Dollars ($3,000,000.00) or (ii) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000.00) per occurrence, and Three Million Dollars ($3,000,000.00) in the aggregate, and (B) for property damage, Three Million Dollars ($3,000,000.00) per occurrence. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both SCHDC and Agency against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by SCHDC in the course of carrying out the work or services contemplated in this Agreement. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000.00) per person and Three Million Dollars ($3,000,000.00) per 1 \�h 882/015610-0047 _27_ 715762.05 .12/14/06 occurrence, and property damage liability limits of Three Million Dollars ($3,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000.00). Said policy shall include coverage for owned, non -owned, leased, and hired cars. With respect to the Housing Development and other improvements and any fixtures and furnishings to be owned by SCHDC 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. Notwithstanding anything in this Section 403 to the contrary, the all-risk coverage required pursuant to this paragraph shall not be required to be procured until, and such procurement shall be a condition to, the Closing. The following additional requirements shall apply to all of the above policies of insurance: All of the above policies of insurance shall be primary insurance and, except the worker's compensation insurance, shall name Agency, City, and their respective officers, officials, members, employees, agents, and representatives as additional insureds, using a pre- 2004 additional insured endorsement form. The insurer shall waive all rights of subrogation and contribution it may have against Agency, City, and their officers, officials, members, employees, agents, and representatives, and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to Agency and City. In the event any of said policies of insurance are cancelled, SCHDC shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. Not later than the Effective Date of this Agreement, SCHDC shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. Upon the request of the Executive Director, SCHDC shall provide Agency with complete copies of each Policy of Insurance required by this Agreement. The policies of insurance required by this Agreement shall be satisfactory only if issued by companies licensed and admitted to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better. Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements provided the proposal policies will adequately protect the Agency's interests hereunder. 882/015610-0047 _28_ 715762 05 a12/14/06 Agency may reasonably require coverage increases, 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 -Riverside -Orange County 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 Executive Director, the insurance to be provided by SCHDC 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. SCHDC agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which SCHDC may be held responsible for the payment of damages to any persons or property resulting from SCHDC's activities or the activities of any person or persons for which SCHDC is otherwise responsible. D. [4041 Local, State and Federal Laws SCHDC shall perform under this Agreement and carry out its performance under this Agreement in conformity with all applicable federal and state laws and local ordinances as to the Project, provided, however, SCHDC and its contractors, successors, assigns, transferees, and lessees are not waiving their rights to contest any such laws, rules or standards. E. 14051 Taxes and Assessments After the conveyance of title by Agency to SCHDC or its assignee, and subject to its right to claim exemption under California Revenue & Taxation Code Section 214(g), SCHDC shall pay prior to delinquency all real estate taxes and assessments on the Project for any period subsequent to the conveyance of title and possession, so long as SCHDC retains any ownership interest therein. SCHDC shall remove or have removed any levy or attachment made on the Project or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to any sale or transfer of all or any portions thereof. Notwithstanding the above, SCHDC shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to SCHDC in respect thereto, and nothing herein shall limit the remedies available to SCHDC in respect thereto. F. [4061 Limitation on Encumbrances Except as otherwise permitted by this Agreement, including but not limited to clause (d) of Section 109, SCHDC shall not mortgage the Project or any portion thereof or any interest therein, any other mortgages or conveyances for financing that encumber the Project or any portion thereof, without the prior written approval of the Executive Director, which approval shall not be unreasonably withheld y9 -- 1 �/ f 882/015610-0047 -29- 715762.05 a]2/14/06 G. [4071 Maintenance of the Project SCHDC shall maintain the Project in conformity with the La Quinta Municipal Code and the requirements of the Agency Regulatory Agreement, and shall keep the Project free from any graffiti and from any accumulation of debris or waste materials. SCHDC shall also maintain the landscaping planted on the Site by Developer, Agency, and/or Agency's contractors in a healthy and attractive condition. If, at any time, SCHDC fails to maintain the Project or any portion thereof, and said condition is not corrected as soon as reasonably possible after written notice from the Agency, either the Agency or the City may enter the Project or applicable portion thereof to perform the necessary maintenance thereon and SCHDC shall pay such costs as are reasonably incurred for such maintenance plus a fifteen percent (15%) administrative fee. This covenant shall run with the land and shall remain in effect for the term of the Redevelopment Plan. H. f4081 Effect of Violation of the Terms and Provisions of this Agreement The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Project or in the Project Area. The Agency shall have the right, if this Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other property proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. V. [5001 DEFAULTS AND REMEDIES C. [5011 Defaults -- General Subject to the extensions of time set forth in Section 603, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured or commenced to be cured by the defaulting party within thirty (30) days after service of the notice of default (or within such other period as is set forth herein), the non - defaulting party shall be entitled to pursue whatever remedies to which such party is entitled under this Agreement. D. [5021 Legal Actions 1. [5031 Specific Performance The non -defaulting party, upon expiration of applicable notice and cure periods, shall be permitted, but not obligated, to commence an action for specific performance of the terms of this Agreement, or to cure, correct or remedy any default hereunder or to obtain any 882/015610-0047 -30- 715762.05 .12/14/06 other legal or equitable remedy consistent with the purpose of this Agreement. In this regard, SCHDC specifically acknowledges that Agency is entering into this Agreement for the purpose of assisting in the redevelopment of the Site and the provision of affordable housing and not for the purpose of enabling SCHDC to speculate in land. Agency shall also have the right to pursue damages for SCHDC's defaults but in no event shall SCHDC be entitled to damages of any kind from Agency, except for damages for out-of-pocket losses resulting from non-performance by Agency of its covenants under this Agreement but excluding economic loss, lost profits, or any other economic or consequential damages of any kind. 2. 1`5041 Institution of Legal Actions,• Attorney's Fees Any legal actions must be instituted in the Superior Court of the County of Riverside, State of California, or in the Federal District Court in the Central District of California. In the event of any litigation between the parties hereto, the prevailing party shall be entitled to receive, in addition to the relief granted, its reasonable attorney's fees and costs and such other costs incurred in investigating the action and prosecuting the same, including costs for expert witnesses, costs on appeal, and for discovery. [5051 Applicable Law The internal laws of the State of California, without regard to conflicts of law, shall govern the interpretation and enforcement of this Agreement. 4. f5061 Acceptance of Service of Process In the event that any legal action is commenced by SCHDC against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against SCHDC, service of process on SCHDC shall be made by personal service upon any officer or director of SCHDC and shall be valid whether made within or without the State of California or in such other manner as may be provided by law. E. [5071 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 such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. F. [5081 Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 882/015610-0047 -31- 715762 05 a]2/14/06 G. [5091 Termination [5101 Termination by SCHDC In the event that prior to the Close of Escrow: b. Agency is in material default of this Agreement, and any such failure is not cured within thirty (30) days, or for those defaults which cannot reasonably be cured within thirty (30) days, commenced to be cured within said thirty (30) day period and thereafter diligently prosecuted to completion, after written demand by SCHDC; or C. the Agency fails to satisfy any or all of SCHDC's Conditions to Close by the time established therefor in Schedule of Performance; then, at the option of SCHDC, upon written notice thereof to the Agency, all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, subject to Section 202 hereof, neither the Agency nor SCHDC shall have any further rights against or liability to the other with respect to this Agreement; provided, however, that nothing in this Section 510 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder. 2. 15111 Termination by the Agency In the event that prior to the Close of the Escrow: a. SCHDC (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Project in violation of this Agreement; or b. There is a change in the ownership of SCHDC contrary to the provisions of Section 109 hereof; or C. SCHDC does not submit certificates of insurance or Evidence of Financing as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor, or is otherwise in material default hereof, and such default or failure is not be cured within thirty (30) days, or for those defaults which cannot reasonably be cured within thirty (30) days, commenced to be cured within said thirty (30) day period and thereafter diligently prosecuted to completion, after the date of written demand therefor by the Agency; or d. SCHDC fails to satisfy any or all of Agency's Conditions to Close by the time established therefor in Schedule of Performance; then, at the option of the Agency, upon such written notice thereof to SCHDC as may be set forth above, this Agreement shall be terminated, and thereafter, subject to Section 202 hereof, neither party shall have any further rights or liability against the other under this Agreement; provided, however, that nothing in this Section 511 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under 882/015610-0047 -32- 715762 05 a12/14/06 this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder. VI. [6001 GENERAL PROVISIONS A. r6011 Notices Demands and Communications Between Parties Written notices, demands and communications between the Agency and SCHDC shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) deposited in the United States mail, registered or certified, postage prepaid, return receipt requested, to the principal offices of the Agency and SCHDC at the addresses specified in Section 106 and 107, respectively. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 601. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. B. [602] Conflicts of Interest No member, officer, official, or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. C. [6031 Enforced Delay' Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor; subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City of La Quinta, or the Agency, or any other public or governmental agency or entity (except that the acts or failures to act of the Agency shall not excuse performance by the Agency); or any other causes beyond the control or without the default of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days after the commencement of the cause. Times of performance under this Agreement may also be 882/015610A047 -33- 715762.05 a12/14/06 extended in writing by the mutual agreement of Agency and SCHDC. 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. Notwithstanding the foregoing portion of this Section 603, SCHDC is not entitled pursuant to this Section 603 to an extension of time to perform because of economic or market conditions. D. f 6041 Non -Liability of Officials and Employees of the Agency No member, official or employee of the Agency or the City shall be personally liable to SCHDC, or any successor in interest, in the event of any default or breach by the Agency or the City or for any amount which may become due to SCHDC or its successors, or on any obligations under the terns of this Agreement. E. f6051 Interpretation• Entire Agreement Waivers; Attachments 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 that might otherwise apply. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and SCHDC, and all amendments hereto must be in writing by the appropriate authorities of the Agency and SCHDC. Except as otherwise expressly provided, in any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. The exhibits and attachments to this Agreement are incorporated herein and made a part hereof. F. f6061 Time of Essence Time is of the essence in the performance of this Agreement. G. [6071 No Brokers Agency and SCHDC each represent and warrant to the other that it has not retained any real estate broker, agent, or finder in connection with this Agreement or the disposition or conveyance of the Site as set forth herein, and each shall indemnify, defend, and hold harmless the other from and against any claim or lawsuit (including attorneys fees) for the payment of any real estate commission or finder's or broker's fees arising out of this Agreement to the extent caused by the acts or omissions of the Agency or SCHDC as the case may be. 882/015610-O047 -34- 715762 05 .12/14/06 H. [6081 Maintenance of Books and Records SCHDC shall prepare and maintain all books, records, and reports necessary to substantiate SCHDC's compliance with the terms of this Agreement. I. f6091 Right to Inspect After the Closing Date, Agency shall have the right, upon not less than twenty- four (24) hours' notice, at all reasonable times during business hours, to inspect the books and records of SCHDC pertinent to the purposes of this Agreement. Said right of inspection shall not extend to documents privileged under attomey-client or other such privileges. J. f6101 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 Project and the successors in interest, owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Project. K. [6111 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. L. [6121 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. M. [6131 Amendments to this Agreement SCHDC and the Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the Parties hereto, the TCAC, the Institutional Lender providing the Conventional Loan, or financial consultants to the Agency, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The Agency's Executive Director shall have the authority to approve, on behalf of the Agency, amendments to this Agreement that would not substantially alter the basic business terms or substantially increase the cost or risk of this Agreement to the Agency. All other amendments shall require the action of the Agency Board. All amendments, including those authorized to be approved by the Agency's Executive Director, shall be in writing and shall be signed by authorized representatives of Agency and SCHDC. [end — signature page and attachments follow] 882/015610-0047 -35- 715762 05 a12/14/06 IN WITNESS WHEREOF, the Agency and SCHDC have signed this Agreement on the respective dates set forth below. LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic By: Dated: 2006 Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation Dated: 2006 By: Its: 882/0156IM047 -36- 715762 05 a12/14/06 ATTACHMENT NO. 1 SITE MAP [SEE FOLLOWING PAGE] 71576 aoo47 ATTACHMENT NO. 1 715762.05.06 a12/14/06 [REPLACE THIS PAGE WITH SITE MAP] 1 ?� 882/015610-0047 715762 05 a12/14/06 ATTACHMENT NO.2 LEGAL DESCRIPTION All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. 882/015610-0047 ATTACHMENT NO. 2 715762 05 a] 2114/06 ATTACHMENT NO.3 SCHEDULE OF PERFORMANCE ACTIVITY TIME FRAME 1. Agency and SCHDC open Escrow. Within five (5) business days after Effective (Section 207) Date. 2. SCHDC provides evidence of insurance to Within ten (10) days after Effective Date. Agency. (Section 403) 3. Agency approves or disapproves Within fifteen (15) days after submittal. SCHDC's evidence of insurance. (Section 403) 4. SCHDC submits Initial Tax Credit Application to TCAC. Section 204) On or before the published TCAC first round submittal deadline for 2007. 5. SCHDC submits Second Tax Credit Application to TCAC (if applicable). On or before the published TCAC second round submittal deadline for 2007. (Section 204) 6. SCHDC submits Third Tax Credit Application to TCAC (if applicable). On or before the published TCAC first round submittal deadline for 2008. (Section 204) 7. Agency makes available to SCHDC Within fifteen (15) days after the Effective copies of the Property Documents. Date. (Section 219 8. SCHDC approves or disapproves the Property Documents. (Section 219) Within fifteen (15) days after SCHDC's receipt thereof. 9. SCHDC provides evidence of property Within thirty (30) days prior to Close of insurance to Agency. (Section 403) Escrow. 10. Agency approves or disapproves Within fifteen (15) days after submittal. SCHDC's evidence of property insurance. (Section 403) 11. SCHDC submits Evidence of Financing to Within sixty (60) days prior to Close of Agency. (Section 205) Escrow. 12. Agency approves or disapproves Within fifteen (15) days after submittal. SCHDC's Evidence of Financing. (Section 205) ATTACHMENT NO. 3 1 v j '82/015610-0047 Page 1 of 3 715762 05 .12/14/06 g ACTIVITY TIME FRAME 13. SCHDC executes and delivers to Agency Within ten (10) days prior to the Close of or Escrow Agent Grant Deed, Agency Escrow Regulatory Agreement, Agency Deed of Trust and Memorandum. (Section 210) 14. Agency executes and delivers to Escrow Within ten (10) days prior to Close of Agent Grant Deed, Agency Regulatory Escrow. Agreement, Agency Deed of Trust, Memorandum and Bill of Sale. (Section 211 15. SCHDC executes and delivers to Agency Within ten (10) days prior to Close of Agency Note. (Section 210) Escrow. 16. Agency executes and delivers to SCHDC Within ten (10) days prior to Close of Assignment. (Section 211) Escrow. 17. Agency and SCHDC close Escrow on On or before the latest of the following: (i) Agency's transfer of title to Project to within ten (10) business days after all of the SCHDC. (Section 208) Agency's Conditions to Close and SCHDC's Conditions to Close have been satisfied or waived by the appropriate Party; (ii) the date that is thirty-five (35) days after Agency formally accepts the completed Housing Development from the Developer, provided Agency has obtained labor and materials releases from all subcontractors who performed work on the Housing Develop- ment, or (iii) ninety (90) days after SCHDC is awarded the Tax Credits 18. SCHDC obtains Agency Executive Within ninety (90) days prior to issuance of Director's approval of Property Manager. certificate of occupancy for Project by City. (Agency Regulatory Agreement, Section 5.2) 19. SCHDC or Property Manager submits for Within ninety (90) days prior to issuance of Executive Director's review and approval, certificate of occupancy for Project by City. a marketing and management plan for the Project. (Agency Regulatory Agreement, Section 5.2) ATTACHMENT NO. 3 882/015610-0047 Page 2 Of 3 715762 05 a12/14/06 g ACTIVITY TIME FRAME 20. SCHDC sets aside Operating Reserve and At Close of Escrow. provides evidence thereof to Agency Executive Director. (Agency Regulatory Agreement, Section 5.5) 21. SCHDC submits to Agency an accounting of the Capital Replacement Reserve. On or before April 15 of each year subsequent to Close of Escrow. (Agency Regulatory Agreement, Section 5.6) 22. SCHDC submits annual report pursuant to Health and Safety Code Section 33418 to Not later than the September 1 following the June 30 end of each fiscal year for term of the Agency. (Agency Regulatory Agreement, Declaration. Section 3.7) It is understood that the foregoing Schedule is subject to all of the terms and conditions of the text of the Agreement. The summary of items of performance in the Schedule is not intended to supersede or modify any more complete description in the text; in the event of any conflict or inconsistency between this Schedule and the text of the Agreement, the text of the Agreement shall govern. ATTACHMENT NO. 3 ` r. 1 88M15610-0047 Page 3 of 3 715762 05 a12/14/06 g ATTACHMENT NO.4 GRANT DEED [SEE FOLLOWING PAGES] 715ro 2.05 .12/1 ATTACHMENT NO. 4 715762.05 al2/14/06 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Southern California Housing Development Corporation 9065 Haven Ave., Suite 100 Rancho Cucamonga, CA 91730 Attn: President In accordance with Section 11932 of the California Revenue and Taxation Code, Grantor has declared the amount of the transfer tax which is due by a separate statement which is not being recorded with this Grant Deed. GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) (the "Grantor"), hereby grants to THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Grantee"), that certain real property ("Property") located in the City of La Quinta, County of Riverside, State of California, described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference, subject to all matters of record, and is further subject to the following: A. Reservation of Subsurface Rights. Grantor excepts and reserves from the conveyance herein described all interest of the Grantor in oil, gas, hydrocarbon substances, and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and across, and to use and occupy all parts of the Property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals from the Property or other lands, but without, however, any right to use the surface of the Property or any portion of the Property within five hundred (500) feet below the surface of the Property for such exploration. B. Conveyance in Accordance With Redevelopment Plan. The Property is conveyed in accordance with and subject to the Redevelopment Plan for Project Area No. 2 ("Redevelopment Plan"), a copy of which is on file with the City Clerk of the City of La Quinta, California. All uses on the Property shall conform to the uses permitted by the Redevelopment Plan. The foregoing shall remain in effect until the expiration of the Redevelopment Plan. ATTACHMENT NO.4 882/015610-0047 Page 1 Of 6 715762 05 al2/14/06 g C. Nondiscrimination. Grantee, on behalf of itself and its successors and assigns to all or any portion of the Property, covenants and agrees as follows: 1. 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 sale, lease, or rental or in the use, occupancy, or enjoyment of the Property, nor shall the grantee 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 the Property or any portion thereof, The foregoing covenants shall run with the land and shall remain in effect in perpetuity. 2. The grantee shall refrain from restricting the rental, sale, or lease of any portion of the Property, or contracts relating to the Property, on the basis of race, color, creed, religion, sex, marital status, age, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for 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, age, 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." b. In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, 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 race, color, creed, religion, sex, marital status, age, 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."' C. In contracts pertaining to the realty: "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, age, 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." The foregoing nondiscrimination covenants shall remain in effect in perpetuity. ATTACHMENT NO.4 882/015610-0047 Page 2 of 6 715762.05 .12/14/06 g D. Covenants Run With The Land. All covenants contained in this Grant Deed shall be covenants running with the land. E. Covenants for Benefit of Grantor. All covenants set forth in this Grant Deed, without regard to technical classification or designation, shall be binding for the benefit of the Grantor, and such covenants shall run in favor of Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or equity or other property proceedings to enforce the curing of such breach. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel "Grantor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic I� Executive Director "Grantee" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation Un Name: Its: ATTACHMENT NO.4 882/015610-0047 Page 3 of 6 715762.05 a12/14/06 g STATE OF CALIFORNIA COUNTY OF On personally appeared ss before me, Notary Public, 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 COUNTY OF On personally appeared Notary Public ss before me, Notary Public, personally known to me (or proved to me on the basis of satisfactory evidence) to be me 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] ATTACHMENT NO.4 182/015610-0047 Page 4 Of 6 71576105 .12/14/06 g STATE OF CALIFORNIA ) ss COUNTY OF ) On personally appeared before me, 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] ATTACHMENT NO.4 882/015610-0047 Page 5 of 6 715762 05 a12/14/06 g EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY The land referred to is situated in the City of La Quinta, State of California, County of Riverside, City of La Quinta and is described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 4 882/015610-0047 Page 6 Of 6 715 762 05 .12/14/06 g ATTACHMENT NO.5 PROMISSORY NOTE [SEE FOLLOWING DOCUMENT] 175 71 .05.12 1 ATTACHMENT NO. 5 715762.05 al2/14/06 ATTACHMENT NO.5 PROMISSORY NOTE Loan Amount: $13,966,831 ,200 La Quinta, California FOR VALUE RECEIVED, THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Borrower"), promises to pay to the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), or order, the principal sum of Thirteen Million Nine Hundred Sixty -Six Thousand Eight Hundred Thirty -One Dollars ($13,966,831), plus interest on the outstanding principal balance, in accordance with the terms and conditions set forth herein. This Note evidences the obligation of Borrower to Agency for the repayment of certain funds (the "Agency Loan") loaned to Borrower by Agency pursuant to that certain Affordable Housing Agreement between the Agency and Borrower dated for identification purposes only as of , 2006 (the "Agreement'), incorporated herein, in connection with the acquisition of real property located at 78990 Miles Avenue within the Project Area in the City of La Quinta, County of Riverside (the "Property") improved with an affordable multifamily housing development (the "Project'). All capitalized terms unless otherwise defined herein shall have the same meaning as set forth in the Agreement. Reference is also made to the following additional agreements and documents, of even date herewith, involving Agency and Borrower and/or pertaining to the Property: (i) Deed of Trust with Assignment of Rents by and between Borrower as Trustor, Agency as beneficiary, and Chicago Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust'). The Agency Deed of Trust secures repayment of this Note and performance under the Agreement and Agency Regulatory Agreement. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Borrower and Agency, for the benefit of Agency, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement'). 1. Definitions. "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Borrower which, if Borrower is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control' as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. ATTACHMENT NO. 5 J 8821015610-0047 Page 1 of 16 715762 05 a12/14ro6 g "Agency Agreements" mean, collectively, the Agreement, the Agency Deed of Trust, and the Agency Regulatory Agreement. "Annual Financial Statement" means the financial statements prepared by Borrower for each calendar year during the period from the date of this Note until the Maturity Date, including a balance sheet, income statement, statement of retained earnings, statement of cash flows, and footnotes thereto, prepared in accordance with generally accepted accounting principles consistently applied, as audited by an independent certified public accountant. "Applicable Percentage" shall mean sixty percent (60%). "Approved Budget" shall have the meaning ascribed in Section 3.13 of the Agency Regulatory Agreement. "Assignment" means any voluntary or involuntary conveyance, disposition, assignment, encumbrance (other than a Refinancing as defined below or the creation of the Senior Financing or any other Project Loan permitted by the Agreement), sublease, sale or transfer of the Property, including, without limitation, any transfer by Borrower of all or any portion of its rights under or interest in the Project or the Property, any unpermitted change of ownership or control of Borrower, any foreclosure of Borrower's interest in the Project or the Property, whether by judicial proceedings, or by virtue of any power contained in a deed of trust, indenture or other instrument creating a lien against the Project or the Property, or any assignment of Borrower's estate in the Project or the Property through, or in lieu of, foreclosure or other appropriate and bona fide proceedings in the nature thereof; provided, however, that the term "Assignment" as used herein shall not include any permitted transfer as set forth in Section 10 hereof or in Section 109 of the Agreement. "Capital Improvements" means all work and improvements with respect to the Property for which costs and expenses may be capitalized in accordance with GAAP. "CPI" means 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 - Riverside -Orange County Average, All Items (1984=100), or, if said index is discontinued, such official index as may then be in existence and which is most nearly equivalent to said index. "Debt Service" means scheduled debt service (including impounds, expenses, and other amounts payable) on the Senior Financing. "Developer Fee" means the developer fee to be paid to Borrower in a cumulative amount not to exceed Four Hundred Fifty Thousand Dollars ($450,000), bearing interest at the applicable federal rate, and disbursed pursuant to the following: (i) Developer shall be entitled to a portion of the Developer Fee in the amount of One Hundred Twelve Thousand Five Hundred Dollars ($112,500) within after the date of this Note; (ii) Developer shall be entitled to a portion of the Developer Fee in the amount of One Hundred Twelve Thousand Five Hundred Dollars ($112,500) upon ; and (iii) the Developer shall be entitled to a portion of the Developer Fee in the amount of Two Hundred Twenty -Five Thousand Dollars ($225,000) at the time all Units in the project have been leased to, and are accepted by, Eligible Tenants. ATTACHMENT NO. 5 882/015610-0047 715762 05 al2/14/06 Page 2 of 16 "Fiscal Year " means the fiscal year of Borrower, which is the calendar year. "GAAP" means generally accepted accounting principles as in effect from time to time, consistently applied. "Maturity Date" shall have the meaning set forth in Section 2.4 hereof. "Minor Assignment" shall mean any lease of an individual unit in the Project for occupancy by a residential subtenant and in the ordinary course of business for operation of the Project. "Net Operating Income" means, for the applicable period of time, (i) the amount, if any, by which Operating Income for such period exceeds Operating Expenses paid by Borrower during such period; and, provided there is such an excess, less (ii) the Partnership Management Fee. "Net Proceeds" shall mean (a) the proceeds received, directly or indirectly, by Borrower or any Affiliate or constituent member or partner, or majority shareholder, of Borrower as a result of an Assignment, including, without limitation, cash, the amount of any monetary lien or encumbrance assumed or taken subject to by the assignee, the fair market value of any non -cash consideration, including the present value of any promissory note received as part of the proceeds of such Assignment (such present value to be determined based upon a discount rate reasonably satisfactory to Agency), the entire condemnation award or compensation payable to Borrower or any Affiliate or constituent member or partner, or majority shareholder, of Borrower in connection with a condemnation or taking in eminent domain of any part of the Property or the Project or any interest therein, all insurance proceeds or awards payable to Borrower or any Affiliate or constituent member or partner or majority shareholder of Borrower in connection with any damage to or destruction of the Property or the Project or any part thereof; less (b) the sum of (i) the actual, documented and reasonable expenses of effecting such Assignment, including reasonable brokerage commissions, title insurance premiums, documentary transfer taxes, and reasonable attorneys' fees, in each case actually paid in connection with the Assignment (provided that no deduction shall be allowed for payments to an Affiliate of the person or entity making the Assignment which are in excess of the amount that would be paid for the same or equivalent services in an arms' length transaction between unrelated parties acting reasonably), (ii) the costs incurred by Borrower to repair or rebuild the Project in the event of any damages, destruction, or condemnation of all or any portion of the Project, and (iii) the amount of any Net Proceeds of the Assignment, casualty or condemnation paid (excluding voluntary payments) towards the then -outstanding balance of the Senior Financing and/or any Project Loan being refinanced. Notwithstanding anything above which is or appears to be to the contrary, the permissible deductions for purposes of calculating the Net Proceeds shall not include any foreign, U.S., state or local income taxes, franchise taxes, or other taxes based on income. "Net Refinancing Proceeds" shall mean the gross face amount of any Project Loan obtained in connection with such Refinancing, after: (a) payment of the actual, documented and reasonable expenses of such Refinancing, including escrow fees, title policy expenses, legal expenses, survey fees, recording fees, commissions, or other usual and reasonable expenses of ATTACHMENT NO. 5 71576205ei2n4ro6 Page of 16 any such Refinancing (provided, that no deduction shall be allowed for payments in connection with such Refinancing which are in excess of the amounts that would be paid for the same or equivalent services in an arms' length transaction between unrelated parties acting reasonably); and (b) deduction of amounts repaid (excluding voluntary payments) in connection with the Refinancing towards amounts outstanding under the Senior Financing. "Operating Expenses" means, for the applicable period of time, all costs and expenses reasonably incurred by Borrower in the ordinary course of the management, ownership, and/or operation of the Property by Borrower, including the funding of reasonable reserves and all of the following: (a) the cost of utilities supplied to and used for the Property not paid by the tenants thereof, including trash removal, electricity, water, sewer and gas; (b) the cost of all insurance required for the Property to satisfy the requirements contained in Senior Loan Documents; (c) ad valorem tax and assessments payments; (d) to the extent included in the Approved Budget and not paid for out of the Capital Replacement Reserve, the following fees, costs and expenses: maintenance and repair expenses and services, including material and labor, including charges for public services such as sewer charges, license and permit fees, goods, commodities, materials and equipment, and including all contract repairs and services and maintenance and repair of all furniture, furnishings and fixtures; painting, cleaning; pest control; gardening; rubbish removal; graffiti removal; advertising, marketing and promotion; leasing commissions; accounting, audit and legal expense attributable to the Property; and office expenses incurred in operation of the Property; (e) salaries, wages, rent payment or allocation, and other compensation due and payable to the employees or agents of the Borrower employed on -site in connection with the maintenance, administration or operation of the Property, together with all withholding taxes, insurance premiums, social security payments and other payroll taxes or payments required in connection with such employees; (f) costs of security services supplied to the Property, if any; (g) payment of an asset management fee, on an annual basis in an amount not to exceed Five Thousand Dollars ($5,000), increasing annually by three percent (3%) of the then -current amount; (h) payment of a fee, on an annual basis, to cover the cost of coordinating the social services required pursuant to the Management Plan in an amount not to exceed Nineteen Thousand Two Hundred Dollars ($19,200), increasing annually by three percent (3%) of the then -current amount; (i) payment of a property management fee, on an annual basis, in an amount not to exceed Thirty -Eight Thousand Four Hundred Dollars ($38,400) per unit per month, increasing annually by the percentage increase in area median income for the County of Riverside for the period in question; 0) payment of a fee, on an annual basis, to cover the cost of administering and accounting for the affordability requirements set forth in the Agency Regulatory Agreement in an amount not to exceed Dollars ($__, increasing annually by the percentage increase in the area median income in the County of Riverside for the period in question; (k) payment of Developer's annual contribution to the Capital Replacement Reserve; (1) payment of Developer's annual Contribution to the Operating Reserve; and (m) payment of Debt Service. Operating Expenses shall not include any expenses for Capital Improvements, except for Capital Improvements allowed in the Approved Budget, approved by any lender providing Senior Financing, or approved, with such approval not to be unreasonably withheld or delayed, by the Executive Director. Operating Expenses shall be calculated on a cash basis. i ry o ATTACHMENT NO. 5 882/015610-0047 Page 4 of 16 715762 05 a12/14/06 g Operating Expenses shall not include (aa) repairs or replacements paid from insurance proceeds received by the Borrower, or (bb) depreciation of buildings or other similar non -cash items of expense. "Operating Income " means, for the applicable period of time, all proceeds received by Borrower from the operation of the Property and from any and all sources resulting from or attributable to the operation of the Property, including, without limitation, all rentals, parking receipts, laundry income received by Borrower, forfeited Security Deposits, and all expense reimbursements paid to Borrower by tenants of the Property. Operating Income shall be calculated on a cash basis. Operating Income excludes insurance proceeds and/or condemnation proceeds, and all interest earned and paid on required reserve account. "Partnership Management Fee" means the fee paid to Borrower not to exceed Five Thousand Dollars ($5,000) per year, which amount shall be adjusted annually by the CPI. "Project Loan" means a loan secured by an encumbrance on the Property, the Project, or any portion thereof. "Refinancing" shall mean creation or substantial modification of a Project Loan "Senior Financing" means any loan obtained by Borrower with respect to the Project secured by a deed of trust recorded against the Property in a position senior to that of the Agency Deed of Trust in accordance with and as permitted by the terms of the Agreement. "Senior Loan Documents" means any and all agreements and documents related to any Senior Financing. "Term" shall mean the time from the date of this Note until the earlier to occur of: (i) the Maturity Date; (ii) repayment in full of all principal and interest due hereunder; or (iii) such other date, as agreed to in writing by the Agency, upon which the Agency releases all of its rights under the Agreement, the Agency Regulatory Agreement, the Agency Deed of Trust and this Note. 2. Interest and Repayment. 2.1 Basic Interest Rate. Except as provided in section 2.5 below, the disbursed and unpaid principal balance of the Agency Loan shall bear interest at a rate of one percent (1 %) (the "Basic Interest Rate"). 2.2 Payment Dates and Amounts. (a) Principal and Interest Payments. Interest and principal payments on this Note shall be payable annually on April 15`h of each year during the Term, in an amount equal to the Applicable Percentage multiplied by the Net Operating Income for the calendar year immediately preceding such annual payment date. In the event that there is no Net Operating Income available for payment of principal and interest for any calendar year, then interest shall continue to accrue on the Agency Loan during such year. On or before each April 15'' during the Term, regardless as to whether any payment of principal and interest is remitted, Borrower shall ATTACHMENT NO. 5 982/015610-0047 Page 5 of 16 715762.05 a12/14/06 g provide Agency with an accounting documenting the calculation of Net Operating Income for the previous calendar year. (b) Payments Due in the Event of Refinancing of Senior Financing or Transfer of Project. If Borrower, refinances all or part of the Senior Financing, any Net Refinancing Proceeds of that Refinancing shall be payable to Agency no later than the closing and recording of the Refinancing and all such sums paid shall be applied to the outstanding balance of the Agency Loan. If Borrower transfers all of part of the Project as provided in Section 109 of the Agreement, or any casualty or condemnation occurs to the Project, any Net Proceeds of that transfer shall be payable to Agency no later than the date of close of escrow or other consummation of the transfer and applied to the outstanding principal and interest due on the Agency Loan. (c) Interest First. All payments shall be applied first to accrued interest and thereafter to principal. 2.3 Financial Statements. On the April 15ffi of the calendar year following the year in which this Note is originated as evidenced by the date hereof, and on each April 15`h thereafter throughout the Term, Borrower shall submit to Agency its Annual Financial Statement for the preceding year. Net Operating Income shall be calculated by Borrower for each year beginning in the first year any of the Units are rented to and occupied by Eligible Tenants (and certified by an authorized officer of Borrower) and reported by Borrower to Agency annually for each calendar year no later than April 151h of the following calendar year on forms specified and provided by Agency from time to time. All calculations and records shall be based upon Borrower's Annual Financial Statement and shall be subject to audit by Agency. In connection with any audit, Borrower shall provide to Agency for inspection and copying any records, receipts, account books, ledgers, checks, or other documents or other evidence reasonably requested by Agency for the purpose of verifying Borrower's calculation of Net Operating Income, and shall promptly pay to Agency any further amount due but not paid as a result of any miscalculation by Borrower. Agency shall promptly pay Borrower any overpayments made by Borrower as shown by such audit. 2.4 Maturity Date. The outstanding principal balance of this Note, together with any outstanding interest due thereon and any other sums payable under this Note, shall be due and payable in full on the date that is fifty-five (55) years from the Note Date (the "Maturity Date"). 2.5 Default Rate. Any amounts (including but not limited to amounts of principal and interest on the Agency Loan) which Borrower does not pay when otherwise due under the terms of this Note, shall bear interest at the rate of the lesser of ten percent (10%) or the maximum rate allowed per law per annum ("Default Rate"), simple interest, from the date which is ten (10) days after such amount would otherwise be due until the date paid. 3. Acceleration. The entire outstanding principal balance of the Note, together with any outstanding interest and other amounts payable thereunder, shall, at the election of Agency and upon notice _ 11 ATTACHMENT NO. 5 3 882/015610-0047 Page 6 of 16 715762.05 a12/14/06 g to Borrower thereof, become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower, if: (a) Notwithstanding the payment terms set forth in Section 2 above, upon the occurrence of any "Event of Default" as set forth in Section 10 below; or (b) Borrower sells or transfers the Property, including, without limitation, lease (other than leases of individual Units to residential tenants in the ordinary course of business), exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary, except a sale or transfer which under federal law would not, by itself, permit the holder to exercise a due on sale or due on encumbrance clause, and except as permitted by the Agreement; or (c) Borrower refinances the lien of the Agency Deed of Trust or any lien or encumbrance to which the Agency Deed of Trust is subordinate for a loan amount in excess of the then current loan balance secured by such lien or encumbrance, unless the Net Refinancing Proceeds are paid to Agency in an amount not to exceed any amounts due Agency under the Agency Loan. 4. Prepayment Application of Payments. At any time after the Note Date, Borrower may prepay all or a portion of the unpaid principal amount of the Agency Loan and accrued interest and any other sums outstanding without penalty or premium. All payments, including any prepayments or funds received upon acceleration pursuant to Section 3 above, shall be applied first toward any outstanding costs of collection or other amounts (excluding Agency Loan principal or interest thereon) due under this Note or the Agreement, then toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest accrued at the Basic Interest Rate, if any, and finally toward the remaining principal balance under the Note. 5. Security and Source of Payment. Borrower's obligations under this Note, the Agreement and the Agency Regulatory Agreement shall be secured by the Agency Deed of Trust. The Agency Loan and this Note shall constitute a nonrecourse obligation of Borrower, and neither Borrower nor any partner, member, or shareholder thereof shall have any personal liability for repayment. However, nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for this Note of all the rights and remedies of the Agency, or (b) be deemed in any way to impair the right of the Agency to assert the unpaid principal amount of this Note as a demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on this Note; nothing contained therein is intended to relieve the Borrower and, if Borrower is a partnership, limited liability company, or corporation, any general partner, member, or shareholder of Borrower, of liability for damages caused to ATTACHMENT NO. 5 !� 882/015610-0047 Page 7 of 16 1 `� 715762 05 .12/14/06 g Agency or Agency as a result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the Agency Agreements that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the retention of any rental income or other income arising with respect to the Project collected by Borrower after an Event of Default to the full extent of the rental income or other income retained and collected by Borrower after the giving of any such notice, and not used to pay Operating Expenses of the Project; (iv) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project; and (v) breach of any environmental covenant or representation made by the Borrower relating to the Project. 6. Obligation of Borrower Unconditional. The obligation of Borrower to repay the Agency Loan and all accrued interest thereon shall be absolute and unconditional, and until such time as all of the outstanding principal of and interest on this Note shall have been fully paid, Borrower agrees that it: (a) will use the funds solely for the purposes set forth herein; and (b) will not terminate or suspend any payment or obligations under this Note, the Agreement, or any other document executed hereunder or in connection herewith for any cause, including without limitation, any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, or any duty, liability or obligation arising out of or in connection with this Note, the Agreement or any document executed hereunder or in connection herewith. 7. Purpose of Agency Loan. The Agency Loan proceeds shall be used by Borrower as provided in the Agreement and for such other uses previously approved in writing by Agency. In no event shall Borrower use or otherwise invest the proceeds of the Agency Loan except as expressly provided in this Note. 8. Covenants of Borrower. As additional consideration for the making of the Agency Loan by Agency, Borrower covenants as follows: 8.1 Compliance with Agreement Agency Regulatory Agreement and Deed of Trust. Borrower shall comply with all of its obligations under the Agreement, Agency Regulatory Agreement and the Agency Deed of Trust. Any amounts payable by Borrower under the Agreement, Agency Regulatory Agreement or the Agency Deed of Trust (other than amounts also payable hereunder) shall be deemed added to the principal amount of the Agency Loan payable hereunder. 8.2 Other Loans. Borrower shall comply with all monetary and non -monetary covenants associated with any loan secured by an interest in the Property or the Project. Borrower shall provide to Agency a copy of any notice of default within five business days after receiving any notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly cure any such default and cooperate in permitting Agency, to the extent Agency in its sole discretion elects to do so, to cure or assist in curing the default. Any cost or ATTACHMENT NO. 5 1 j '82/015610-0047 Page 8 of 16 7in6a05 ei2naio6 g expenditure incurred by Agency in providing or assisting in such a cure shall be deemed added to the outstanding principal amount of the Agency Loan. 8.3 Payment of Partnership Management Fee. Borrower shall not make any payments of the Partnership Management Fee unless and until Operating Income exceeds Operating Expenses. 9. Assignment of this Note. This Note shall be assignable by Borrower in compliance with Section 109 of the Agreement. Notwithstanding anything which may be or appear to be herein to the contrary, no purported assignment of this Note and/or the Agency Loan shall be effective if such assignment would violate the terms, conditions and restrictions of any Governmental Regulations. Agency's consent to such assignment shall be expressly conditioned upon (a) the assignee's execution of such documents as required by Agency including, without limitation, any and all documents deemed necessary by Agency to provide for said assignee's assumption of all of the obligations of Borrower hereunder and under the Agency Agreements, and (b) Agency's approval of the financial and credit worthiness of such proposed assignee. 10. Events of Default and Remedies. 10.1 Borrower Events of Default. The occurrence of any of the following shall, after the giving of any notice described therein, constitute an event of default by Borrower hereunder ("Event of Default"): (a) The failure of Borrower to pay or perform any monetary covenant or obligation under the terms of this Note without curing such failure within ten (10) days after receipt of written notice of such default from Agency (or from any party authorized by Agency to deliver such notice as identified by Agency in writing to Borrower); (b) The failure of Borrower to perform any non -monetary covenant or obligation under this Note without curing such failure within thirty (30) days after receipt of written notice of such default from Agency (or from any party authorized by Agency to deliver such notice as identified by Agency in writing to Borrower) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency. Provided, however, that if any default with respect to a non -monetary obligation is such that it cannot be cured within a 30-day period, it shall be deemed cured if Borrower commences the cure within said 30-day period and diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections 10.1(d) through 10.1(i) below; (c) The failure of Borrower to perform any covenant or obligation under the Agreement, Agency Deed of Trust or Agency Regulatory Agreement, unless the default is cured within the applicable cure period (if any). (d) The material falsity of any representation or breach of any representation or warranty made by Borrower under the terms of this Note, the Agreement, the Agency Regulatory Agreement or the Agency Deed of Trust; ATTACHMENT NO. 5 3 882/015610-0047 Pa e 9 of 16 715762 05 a] 2/14/06 g (e) Borrower or any constituent member or general partner, or majority shareholder, of Borrower shall (1) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary petition that is not withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding; (f) If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower or any constituent member or general partner or majority shareholder of Borrower, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower's assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days; (g) Voluntary cessation of the operation of the Project for a continuous period of more than thirty (30) days or the involuntary cessation of the operation of the Project for a continuous period of more than sixty (60) days; (h) A transfer in violation of Section 109 of the Agreement; or (i) Subject to the notice and cure provisions set forth in the Agreement, Borrower shall be in default under any of the terms of the Senior Financing, junior financing, other financing, or any other secured or unsecured obligation relating to the Project, unless the default is cured within the cure period, if any, applicable thereto under the terms and obligation which is in default. 10.2 Agency Remedies. Upon the occurrence and during the continuance of an Event of Default hereunder, Agency may, in its sole discretion, take any one or more of the following actions: (a) By notice to Borrower, except in the case of a default by Borrower under Section 10.1(d) or Section 10.1(e) in which event no notice pursuant to this Note shall be required, declare the entire then unpaid principal balance of the Agency Loan immediately due and payable, and the same shall become due and payable without further demand, protest or further notice of any kind, all of which are expressly waived. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the Agency Loan shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full; ATTACHMENT NO. 5 1 n J 882/015610-0047 Pa e 10 of 16 715762 05 a12/14106 g (b) Subject to the nonrecourse provisions of Section 5 above, take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion of Agency, to collect the amounts then due and thereafter to become due hereunder, to exercise its rights under the Agency Deed of Trust, and to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Note, the Agreement or under any other document executed in connection herewith; (c) Subject to the nonrecourse provisions of Section 5 above, upon the occurrence of an Event of Default which is occasioned by Borrower's failure to pay money, Agency may, but shall not be obligated to, make such payment. If such payment is made by Agency, Borrower shall deposit with Agency, upon written demand therefor, such sum plus interest at the Default Rate. In either case, the Event of Default with respect to which any such payment has been made by Agency shall not be deemed cured until such repayment (as the case may be) has been made by Borrower. Until repaid, such amounts shall have the security afforded disbursements under this Note; or (d) Subject to the nonrecourse provisions of Section 5 above, upon the occurrence of an Event of Default described in Section 10.1(e) or 10.1(f) hereof, Agency shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the Agency Loan and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of Agency and its counsel to protect the interests of Agency and to collect and receive any monies or other property in satisfaction of its claim. 10.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to Agency intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Note or now existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as Agency may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient by Agency. In order to entitle Agency to exercise any right or remedy reserved to it under this Note, no notice shall be required except as expressly provided herein. 11. Agreement to Pay Attorneys' Fees and Expenses. In the event that Agency brings an action or files a proceeding in connection with the enforcement of its rights under this Note, as a consequence of any breach by Borrower of its obligations hereunder, the prevailing party in such action or proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures paid by the losing party. The attorneys' fees so recovered shall include fees for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until the final judgment is satisfied in full. In addition to the foregoing award of attorneys' fees, the prevailing party in any lawsuit on this Note shall also be entitled to its attorneys' fees incurred in any post judgment proceedings to collect or enforce the judgment. In addition to the foregoing, Borrower agrees to pay or n ATTACHMENT NO. 5 1 -) O 8821015610-0047 Page 11 of 16 715762.05 a12/14/06 g reimburse Agency, upon demand by Agency, for all costs incurred by Agency in connection with enforcement of this Note, including without limitation, reasonable attorneys' fees and costs, if there shall be filed by or against Borrower any proceedings under any federal or state bankruptcy or insolvency laws, whether Agency is a creditor in such proceedings or otherwise. 12. Conflict of Interest; No Individual Liability. No official or employee of Agency shall have any personal interest, direct or indirect, in this Note, nor shall any official or employee of Agency participate in any decision relating to this Note which affects such official's or employee's pecuniary interest in any corporation, partnership or association in which such official or employee is directly or indirectly interested. No official or employee of Agency shall be personally liable in the event of a breach of this Note by Agency. 13. Amendments, Changes and Modifications. This Note may not be amended, changed, modified, altered or terminated without the prior written consent of the parties hereto. 14. Notices. All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under this Note shall be in writing and shall be given by personal delivery, certified mail, return receipt requested, or overnight guaranteed delivery service and addressed as follows: To Agency La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director Copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attention: M. Katherine Jenson, City Attorney To Borrower: Southern California Housing Development Corporation 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Attn: President Copy to: Law Office of Edward A. Hopson 655A North Mountain Avenue Upland, CA 91786 Attn: Edward A. Hopson, Esq. nP! ATTACHMENT NO. 5 J 882/015610-0047 Page 12 of 16 715762 a62 OS a12/I4/06 g Any Notice shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. 15. Severability. The invalidity or unenforceability of any one or more provisions of this Note will in no way affect any other provisions. 16. Interpretation. Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Note are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Note by Borrower. Each of Borrower and Agency has been represented by counsel in the negotiation of this Note, and no provision of this Note shall be interpreted in favor of or against either of Borrower or Agency on account of relative responsibilities in drafting. Notwithstanding any other provision of this Note, nothing herein or in this Note shall be deemed to require Borrower to pay interest in an amount in excess of any applicable usury law or other legal limitation on interest, and the terms of this Note shall be interpreted to require in each instance the lesser of (a) the amount stated in this Note, and (b) the maximum applicable legal limit. 17. No Waiver: Consents. Any waiver by Agency must be in writing and will not be construed as a continuing waiver. No waiver will be implied from any delay or failure by Agency to take action on account of any default of Borrower. Consent by Agency to any act or omission by Borrower will not be construed to be a consent to any other or subsequent act or omission or to waive the requirements for Agency's consent to be obtained in any future or other instance. 18. Governing Law. This Note shall be governed by the internal laws of the State of California without regard to conflict of law principles. 19. Representations and Warranties of Borrower. Borrower hereby warrants and represents to Agency that: 19.1 Organization and Standing. Borrower is a California legal entity, duly organized, qualified to operate in California and validly existing and in good standing under all applicable laws, and has all requisite power and authority to enter into and perform its obligations under this ATTACHMENT NO. 5 1 j 882/015610-0047 Page 13 of 16 715762 05 a12/14/06 g Note, the Agreement, the Agency Deed of Trust, the Agency Regulatory Agreement and all other documents executed in connection herewith. 19.2 Enforceability. This Note and all other instruments to be executed by Borrower in connection with the Agency Loan constitute the legal, valid and binding obligation of Borrower, without joinder of any other party. 19.3 Authorization and Consents. The execution, delivery and performance of this Note and all other instruments to be executed in connection herewith is consistent with the operating agreement, partnership agreement or articles and bylaws governing Borrower and have been duly authorized by all necessary action of Borrower's members, partners, directors, officers and shareholders. 19.4 Due and Valid Execution. This Note and all other instruments to be executed in connection herewith, will, as of the date of their execution, have been duly and validly executed by Borrower. 19.5 Licenses. Borrower will obtain and maintain all material licenses, permits, consents and approvals required by all applicable governmental authorities to own and operate the Project. 19.6 Litigation and Compliance. To the best of Borrower's knowledge, there are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Borrower (other than those as have been previously disclosed in writing to Agency) which could materially impair its ability to perform its obligations under this Note, nor is Borrower in violation of any laws or ordinances which could materially impair Borrower's ability to perform its obligations under this Note. 19.7 Default. To Borrower's current actual knowledge, there are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an "Event of Default" hereunder, as described in Section 10. 19.8 No Violations. To the best of Borrower's knowledge, the execution and delivery of this Note, the Agreement and all other documents executed or given thereunder, and the performances hereunder and thereunder by Borrower, as applicable, will not constitute a breach of or default under any instrument or agreement to which Borrower may be a party nor, to the best of Borrower's knowledge, will the same constitute a breach of or violate any law or governmental regulation. 20. Approvals. Any review or approval of any matter by the Agency or any Agency official or employee under this Note shall be solely for the benefit of Agency, and neither Borrower nor any other person shall rely upon such review or approval as an indication of the wisdom, soundness, safety, appropriateness, or presence or absence of any matter. Without limiting the generality of the foregoing, except as may be otherwise provided in the Agreement, Borrower and not Agency shall be solely responsible for assuring compliance with laws, the suitability of the Property for ATTACHMENT NO. 5 I 882/015610-0047 Page 14 of 16 715762 05 a12n 4/06 g the Project, the adequacy of the plans, and the safety of the Project construction site, the completed Project, and the operation thereof. 21. Good Faith and Fair Dealing. Borrower agrees to perform all of its obligations and the actions required of Borrower hereunder in good faith and in accordance with fair dealing. 22. Waiver. Subject to Section 5, Borrower agrees that it will still be liable for repayment of this Note, even if the holder hereof does not follow the procedures of presentment, protest, demand, diligence, notice of dishonor and of nonpayment, which requirements are hereby waived. Failure of Agency or other holder hereof to exercise any right or remedy hereunder shall not constitute a waiver of any future or other default. No acceptance of a past due installment or indulgence granted from time to time shall be construed to be a waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waiver or preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waive or preclude the exercise of any other rights which Agency may have. [End — Signature Page Follows] ATTACHMENT NO. 5 1 r1 882/015610-0047 Page 15 of 16 715762.05 al2/14/06 g IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first above written. THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation By: Its: Richard J. Whittingham, CFO ATTACHMENT NO. 5 1 �� 882/015610-0047 Page 16 of 16 715762 05 a12/14/06 g ATTACHMENT NO. 6 AGENCY DEED OF TRUST [SEE FOLLOWING DOCUMENT] 1911 N 71576 05 a]2 14 ATTACHMENT NO. 6 77 S7fi2 OS a72/l4/06 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 § 27383 DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO NOTE: RIDERS ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO ("Deed of Trust"), is made between THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation, herein called TRUSTOR, whose address is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Chicago Title Company, 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 in Exhibit "A" (the "Property"), together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of THIRTEEN MILLION NINE HUNDRED SIXTY-SIX THOUSAND EIGHT HUNDRED THIRTY-ONE DOLLARS ($13,966,831), with interest thereon according to the terms of a promissory note or notes of even date herewith made by Truster, payable to order of Beneficiary, and extensions or renewals thereof, (2) the performance of each agreement of Truster incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028- 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solaro 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 % 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 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 ATTACHMENT NO.6 t n 1 882/015610-0047 1 J J 71576205 a12114J06 Page 1 of 10 COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. SEE RIDERS ATTACHED TO THIS DEED OF TRUST STATE OF CALIFORNIA COUNTY OF On before me, Signature of Trustor } THE SOUTHERN CALIFORNIA HOUSING } DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation personally appeared 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) M. Richard J. Whittingham, CFO +n^ ATTACHMENT NO. 6 882/015610-0047 715762 05 al2/14/06 Page 2 of 10 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein A To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with ail 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, many such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, map make or do the same to such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto, and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed- 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property, consent to the making of any map or plat thereof, join in granting any easement thereon, orjoin 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, Toaster 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 of such default), Beneficiary may at any time without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in its own ATTACHMENT NO. 6 19 J 71576 05.1 o4' Page 3 of 10 �ts�bz os a12A4ro6 g 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 time 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 tern 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. A r-, n ATTACHMENT NO. 6 1 J U 882/015610-0047 Page 4 of 10 715762.05 al2/14/06 g LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 6 882/015610-0047 715762 05 al2/14/06 Page 5 of 10 RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this day of by THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation, 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 Promissory 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. Property. 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 Agency 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. Trustor's grant hereunder is subject to the nonrecourse provisions in Section 5 of the Agency Note, which are incorporated herein by this reference as though set forth in full. ATTACHMENT NO. 6 882/015610-0047 j 9 j 715762.05 a]2/14/06 Page 6 of 10 3. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. 4. Incorporation. All terms of the 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. 5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 6. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default, except if and to the extent the same are sufficient to cure all monetary defaults and no other defaults then exist. 7. Possession Upon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and, subject to the rights of any senior lienholders, may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Agency 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 ATTACHMENT NO. 6 -L J 3 982/015610-0047 71576205 a12/14/06 Page 7 of 10 for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 8. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred and not have been cured within any applicable cure period, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director [SIGNATURE ON NEXT PAGE] ATTACHMENT NO. 6 892/015610-0047 71576205 a] 2/14/06 Page 8 of 10 IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's acknowledgment herein below, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation Richard J. Whittingham, CFO ATTACHMENT NO. 6 '82/015610-0047 715762 05.12/14/06 Page 9 of 10 STATE OF CALIFORNIA ss. .K�lIl�Y11Y170' 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] � n ATTACHMENT NO. 6r- '82/015610-0047 Page 10 Of 10 715762 05 a12/14/06 g ATTACHMENT NO. 7 REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS [SEE FOLLOWING DOCUMENT] 882/015610-0047 715762.05 a]2/14/06 ATTACHMENT NO. 7 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.27383) 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 THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Developer"). RECITALS: A. Developer is the owner of fee title to that certain real property more particularly described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site"). B. Pursuant to an Affordable Housing Agreement by and between Developer and Agency dated (the "AHA"), Agency provided financial assistance to Developer in the sum of Thirteen Million Nine Hundred Sixty -Six Thousand Eight Hundred Thirty -One Dollars ($13,966,831) (the "Agency Loan") for the purpose of assisting Developer to acquire the Site, which has been improved with an affordable rental apartment complex containing eighty (80) units (the "Project"). The AHA requires Developer to enter into this Agreement, which provides, among other requirements, that with the exception of the Management Unit, all of the apartment units within the Project be rented to and occupied by "Eligible Tenants" (as that term is defined in Section 1.9 below). The AHA is incorporated herein as if fully set forth. C. Reference is also made to the following documents, of even date herewith: (i) Promissory Note by Developer as 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 and Riders attached hereto, by and between Developer as trustor and Agency as beneficiary, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust secures (a) repayment of the Agency Note, and (b) performance of Developer's obligations hereunder. ATTACHMENT NO. 7 882/015610-0047 715762 05 a12/14/06 Page 1 of 46 The Agency Note and the Agency Deed of Trust are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as if fully set forth. D. To assist Developer with acquiring the Project, Developer has obtained low income housing tax credits from the Tax Credit Allocation Committee (the "TCAC") pursuant to Section 42 of the Internal Revenue Code and/or California Revenue and Taxation Code, Sections 17057.5, 17058, 23610.4, 23610.5 and California Health and Safety Code Section 50199, et seq. (the "Tax Credits"). In connection with obtaining the Tax Credits, Developer has entered into, or will enter into, with TCAC a regulatory agreement to be recorded in the Official Records of the County of Riverside (the "Tax Credit Regulatory Agreement'). E. Pursuant to the AHA and the Agency Agreements, Developer has agreed to own, operate, manage, and maintain the affordable rental housing project constructed on the Site by Agency, with all of the units thereon except the Management Unit restricted to rental to and occupancy by Eligible Tenants. F. Agency and Developer 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 from the Effective Date, as an affordable rental apartment complex in accordance with the terms hereof. AGREEMENT: NOW, THEREFORE, the Developer 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, commencing upon the Effective Date and continuing for a period of fifty-five (55) years following the Effective Date, as follows: 1.0 DEFINITIONS. 1.1 "50% Very Low Income Household" shall mean a household whose annual income does not exceed fifty percent (50%) of AMI, adjusted for family size. 1.2 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer which, if Developer is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. 1.3 Affordable Rent. As used in this Agreement, the term "Affordable Rent' shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent to be charged by Developer and paid by Very Low Income Households, 50% Very Low Income Households, or Extremely Low Income Households occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of ATTACHMENT NO. 7 882/015610-0047 715762.05 a]2/14/06 Page 2 of 46 ti / 1 the Effective Date, and the regulations promulgated pursuant to or incorporated therein, including, without limitation, any applicable regulations promulgated pursuant to Health and Safety Code Section 50093. Subject to Section 3.11 herein, the tenant utility allowance shall be determined by the Executive Director. 1.4 AMI. As used in this Agreement, the term "AMI" or "Area Median Income" shall mean the median family income for the Riverside County area promulgated and published annually by the California Department of Housing and Community Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations. If HCD ceases annually to publish median incomes, the parties will agree upon an adequate substitute manner for determining AMI. 1.5 Approved Budget. As used in this Agreement, the term "Approved Budget" has the meaning ascribed in Section 3.13 of this Agreement. 1.6 Capital Improvements. As used in this Agreement, the term "Capital Improvements" means all work and improvements with respect to the Site for which costs and expenses may be capitalized in accordance with generally accepted accounting principles in effect from time to time, consistently applied. 1.7 Cash Flow. As used in this Agreement, the term "Cash Flow" means, for the applicable period, Net Operating Income less Debt Service. 1.8 CPI. As used in this Agreement, the term "CPI" means 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 -Riverside -Orange County Average, All Items (1984=100), or, if the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 1.9 Debt Service. As used in this Agreement, the term "Debt Service" means scheduled debt service (including impounds, expenses, and other amounts payable) on any loan that is senior to the Agency Loan. 1.10 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall mean a household which qualifies as a Very Low Income Household, an Extremely Low Income Household, or a 50% Very Low Income Household. 1.11 Executive Director. As used in this Agreement, 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 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. 1.12 Extremely Low Income Household. As used in this Agreement, the term "Extremely Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50106, or successor statute, adjusted for family size. 882/015610-0047 ATTACHMENT NO. 7 � rN 715762 05 a12114/06 Page 3 of 46 U 1.13 Management Unit. As used in this Agreement, the term "Management Unit" shall have the meaning ascribed in Section 2.6 hereof. 1.14 Moderate Income Household. As used in this Agreement, the term "Moderate Income Household" shall have the meaning as set forth in Health and Safety Code Section 50093, or any successor statute, adjusted for family size. 1.15 Net Operating Income. As used in this Agreement, the term "Net Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.16 Operating Expenses. As used in this Agreement, the term "Operating Expenses" shall have the meaning ascribed thereto in the Agency Note. 1.17 Operating Income. As used in this Agreement, the term "Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.18 Qualified Tax Credit Investor. As used in this Agreement, the term "Qualified Tax Credit Investor" shall mean a person or entity who (i) is an experienced limited partner and investor in multifamily housing developments receiving low income housing tax credits issued by the State of California or the United States federal government and (ii) has obtained or is contractually obligated to obtain a limited partnership or limited liability company membership interest in the Project whereby it will receive 90 percent or more of the Tax Credits obtained in connection with the Project. Agency shall have the right to reasonable prior approval of the identity of the Qualified Tax Credit Investor and of the terms and conditions of the limited partnership agreement or other agreement specifying the terms and conditions, including but not limited to terms and conditions concerning timing and amounts of cash contributions toward Project development costs in return for an interest in the owner of the Project and the right to receive Tax Credits. 1.19 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit Matrix" shall mean that certain affordability matrix attached hereto and incorporated herein as Exhibit "E". 1.20 Tax Credit Program. As used in this Agreement, the term "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4 California Administrative Code Sections 10300-10340. 1.21 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit Program. 1.22 Tax Credit Regulatory Agreement. As used in this Agreement, the term "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by TCAC of nine percent (9%) Tax Credits. ATTACHMENT NO. 7 " 71576 05 a12 1 Page 4 of 46 715762 OS a12/14/06 g 1.23 TCAC. As used in this Agreement, "TCAC" shall mean the California Tax Credit Allocation Committee. 1.24 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 1.25 Very Low Income Household. As used in this Agreement, the term "Very Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50105, or any successor statute, adjusted for family size. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 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 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. 2.2 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Developer 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. 2.3 No Preference. All of the Units will be available for rental in accordance with the terms of this Agreement, and the Developer shall not give preference to any particular class or group of Eligible Tenants in renting the Units in the Project, except as provided in Section 3.4 below. 2.4 Resident Manager Unit. Notwithstanding anything to the contrary in this Agreement, one (1) of the Units may be occupied by on -site management (the "Management Units"). The Management Unit shall be restricted for rental to and occupancy by a Moderate Income Household at an affordable rent, as determined pursuant to Health and Safety Code Section 50053. As of the Effective Date, affordable rent, including a reasonable utility allowance, for a Moderate Income Household is no more than the product of thirty percent (30%) of one hundred ten percent (I 10%) of AMI adjusted for family size appropriate for the Unit. 2.5 Liability of Developer. Developer 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 Developer hereby represents, warrants, and covenants as follows: ATTACHMENT NO. 7 882/015610A047 Page 5 of 46 715762 05 a12/14/06 g 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Agreement, the Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants. 3.2 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant who qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an Eligible Tenant. Any vacated Unit shall be held vacant until re -leased to an Eligible Tenant. Developer shall take any or all of the following actions, as necessary, to locate Eligible Tenants for the Project: (i) notification to the City of the available Unit; (ii) advertisement of the available Unit in a newspaper of general circulation in the City; and (iii) contacting and notifying the Riverside County Housing Authority in writing of the available Unit. 3.3 Income Computation and Certification. Immediately prior to an Eligible Tenant's occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form in the form attached hereto and incorporated herein as Exhibit "B", or on a similar form required by TCAC (the "TCAC Income Certification form") if the TCAC Income Certification Form requires inclusion of the same information as required in Exhibit "B", from each such Eligible Tenant dated no more than 90 days prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition, Developer shall provide such further information as may be reasonably required in the future by the Agency for purposes of verifying a tenant's status as an Eligible Tenant, provided the same is reasonably available to Developer without unreasonable expense in connection with obtaining the same. Developer shall use good faith efforts to verify that the income provided by an applicant is accurate by taking the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from the applicant's current employer; (iii) obtain an income verification form from the Social Security Administration, California Department of Social Services, and/or California Employment Development Department if the applicant receives assistance from any of said agencies; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other evidence and/or verification of such applicant's total income received during the calendar year from any source, taxable or nontaxable, or such other information as is satisfactory to the Agency. Developer shall maintain in its records each Income Computation and Certification Form obtained pursuant to this section for a minimum of five (5) years. 3.4 Rental Priority. During the term of this Agreement, Developer shall use its reasonable commercial efforts to lease the 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. Developer shall, and Agency may, maintain a list (the "Housing List") of persons who have notified Developer and/or Agency of their desire to rent a Unit in the Project and who have incomes which would qualify them as an Eligible Tenant, and Developer shall offer to rent units on the above -referenced priority basis; provided, however, that Developer 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 ATTACHMENT NO. 7 882/015610-0047 �) Ln' 715762.05 a1v14106 Page 6 of 46 iw �/ qualified to rent a unit, Developer shall rent available Units to Eligible Tenants on a first -come, first -served basis. 3.5 Recertification. Within sixty (60) days prior to the first anniversary date of the occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer shall recertify the income of such Eligible Tenant by obtaining a completed Income Recertification Form, in the form attached hereto and incorporated herein as Exhibit "C", based upon the current income of each known occupant of the Unit; provided, however, that if the TCAC Regulatory Agreement, or a regulatory agreement required to be entered into by Developer as a condition to obtaining tax-exempt bonds to finance the Project, requires Developer to obtain a recertification form which requires inclusion of the same information as required in Exhibit "C", then Developer shall not be deemed to be in default hereunder if during the term of the TCAC Regulatory Agreement or bond regulatory agreement (as applicable) Developer obtains from each Eligible Tenant the TCAC recertification form or the recertification form required pursuant to the bond regulatory agreement. 3.6 Determination of Affordable Rent. All Units shall be rented at an Affordable Rent. 3.6.1 Rent Schedule and Utility Allowance. Subject to Section 3.11 hereof, Agency will establish maximum monthly allowances for utilities and services to be used by the Developer in calculating Affordable Rent. Developer shall submit to Executive Director for review and approval the Affordable Rent proposed by Developer for all of the Units. The Executive Director shall approve such proposal if it complies with the terms of this Agreement. The maximum monthly rent must be recalculated by Developer and reviewed and approved by the Agency annually. 3.6.2 Adiustment of Affordable Rent Affordable Rent may change as changes in the applicable gross rent amounts, the income adjustments, or the monthly allowance for utilities and services warrant. Any increase in rents is subject to the provisions of outstanding leases. Developer must provide households occupying the Units not less than thirty (30) days prior written notice before implementing any rent increase. 3.7 Certification of Continuine Program Compliance. During the term of this Agreement, on or before each April 1 following the Term Commencement Date, Developer shall annually advise the Agency of the occupancy of the Project during the preceding calendar year by delivering a Certification of Continuing Program Compliance in the form attached hereto and incorporated herein as Exhibit "E", stating (i) the Units of the Project which have been rented to and are occupied by Eligible Tenants and (ii) that to the knowledge of Developer either (a) no unremedied default has occurred under this Agreement, or (b) a default has occurred, in which event the Certification shall describe the nature of the default and set forth the measures being taken by the Developer to remedy such default. Developer 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 CPI 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. ATTACHMENT NO. 7 892/015610-0047 715762.05 a]2/14/06 Page 7 of 46 3.8 Maintenance of Records. Developer shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency, upon twenty-four (24) hours prior notice and during business hours, to inspect the books and records of Developer pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Each such lease shall also include the lease rider attached hereto and incorporated herein as Exhibit "D" and shall state that occupation of the Unit is subject to the income restrictions described in this Agreement. 3.10 Remedy For Excessive Rent Charge. 3.10.1 Subject to Section 2.4 hereof, it shall constitute a default for Developer to charge or accept for any Unit rent amounts in excess of the amount provided for in Section 3.6 of this Agreement. In the event that Developer charges or receives such higher rental amounts, in addition to any other remedy Agency shall have for such default, Developer 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. For purposes of this Section 3.10.1, the term "rent" shall not include Section 8 payments Developer receives in connection with the renting of any of the Units. 3.10.2 Subject to Section 2.4 hereof, and except as otherwise provided in this Agreement, it shall constitute a default for Developer to knowingly (or without investigation as required herein) initially rent any Unit to a tenant who is not an Eligible Tenant. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, 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 Developer received from such ineligible tenant, or (B) the total rent Developer was entitled to receive for renting that Unit, plus (ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Developer having rented to such ineligible person. 3.10.3 It shall constitute a default for Developer to knowingly (or without investigation as required herein) rent a Unit in violation of the leasing preference requirements of Section 3.4 of this Agreement. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, 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 Developer rents to an ineligible person as a result of such person's fraud or misrepresentation. 3.10.4 Notwithstanding anything herein to the contrary and subject to Section 3.10.5 below, in the event Developer violates more than one provision of this Section 3.10 in the rental of a specific unit to a specific individual, Developer shall be required to pay to Agency for each such violation the amount listed under the subsection above (e.g., either 3.10.1, 3.10.2, or n#� � r ATTACHMENT NO. 7 "2/015610-0047 715762.05 a12/14/06 Page 8 of 46 3.10.3) that results in the largest payment amount by Developer to the Agency under this Section 3.10, but not the amounts required pursuant to the other subsections, and upon Developer's payment thereof, the default under this Section 3.10 shall be deemed cured with respect to the default for which such penalty is assessed, except to the extent such violation continues after Developer's payment hereunder, in which event the amounts required to be paid pursuant to this Section 3.10 shall apply. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASON- ABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER 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 ACCOMPLISH- MENT 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 AGENCY 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. DEVELOPER'S INITIALS: AGENCY'S INITIALS: 3.10.5 Notwithstanding anything herein to the contrary, in the event Developer violates Section 3.10.1 hereof, to the extent the tenant from whom Developer charged excess rent still resides in the Project at the time Agency discovers this violation, or Developer knows the location of such tenant, Developer shall, in lieu of paying damages to Agency as described in Section 3.10.1 and 3.10.4 above, refund the tenant the entire amount of excess rent charged to such tenant, calculated with interest at the lesser of the maximum legal rate or ten percent (10%). Developer shall provide evidence to Agency that such payment has been made, within thirty (30) days after Agency provides notice to Developer of the default hereunder. ATTACHMENT NO. 7 n 882/015610-0047 715762 05 at2/14/06 Page 9 of 46 3.11 Tax Credit Regulatory Agreement. Developer agrees to perform all of Developer's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this Agreement or in the AHA, then in such event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority to enforce any breach or default by Developer under the Tax Credit Regulatory Agreement in the same manner as though it were a breach or default hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's sole and absolute discretion, Developer shall not consent to any amendment of or modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years from the Effective Date or (ii) releases Developer from the requirement that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 3.12 Annual Statements. As soon as available, and in any event not later than one hundred twenty (120) days after the close of each fiscal year of Developer, financial statements of Developer, including a profit and loss statement, and a consolidated statement of changes in financial position of Developer as at the close of and for such fiscal year, all in reasonable detail, certified by an officer or partner of Developer and, upon request of Agency, if total Operating Expenses for such year exceed the total amount set forth in the Approved Budget by more than ten percent (10%), accompanied by a compilation report prepared by a firm of certified public accountants, and in a format, each reasonably acceptable to the Executive Director. 3.13 Pro Forma Budget. As soon as available and in any event not later than November 15` of each calendar year beginning with the year of recordation hereof, Developer shall provide Agency, for the Executive Director's approval, with a detailed projection of Operating Income and budgets of estimated Operating Expenses for the immediately succeeding calendar year (the "Pro Forma Budget") and a detailed cash flow projection for the next succeeding year. Developer shall also submit to Agency on request additional detail, information and assumptions used in the preparation of the Pro Forma Budget. Within fifteen (15) days following its receipt of the Pro Forma Budget, Agency shall deliver to Developer its written approval or disapproval thereto, which approval shall not be unreasonably withheld. If Agency disapproves the Pro Forma Budget, it shall set forth its reasons with reasonable specificity. If Agency fails to indicate either its approval or disapproval of the Pro Forma Budget within such period, then Agency shall be deemed to have approved the Pro Forma Budget as submitted by Developer. ATTACHMENT NO. 7 ^ " 0 882/015610-0047 a.r 1 J 715762 05 a12/14/06 Page 10 of 46 Once the Pro Forma Budget is approved or deemed approved by Agency, such approved Pro Forma Budget shall become the "Approved Budget" for the entire applicable calendar year. Developer shall use commercially reasonable efforts to operate the Site during such calendar year within the Approved Budget; provided, however, that Developer shall not be required to obtain the approval of Agency for any deviation from the Approved Budget so long as the total Operating Expenses and expenditures for Capital Improvements paid or incurred during such calendar year do not exceed the originally budgeted amount thereof in the Approved Budget by more than five percent (5%) in the aggregate. To the extent required hereunder, any request by Developer to deviate from the Approved Budget shall be submitted to Agency in writing with an explanation thereof and shall be accompanied by supporting information for the request; provided, however, that in the event of an emergency threatening persons or property, Developer shall use its good faith efforts to give prior verbal notice to Agency of unbudgeted expenses that are necessary to avoid damage or injury to persons or property, and in any event shall notify Agency, in writing, of the nature of the emergency and the amount of the expenses, within ten (10) days after such expenses have been incurred. Agency shall reasonably respond to any such request within fifteen (15) days of the receipt of same and if Agency fails to do so, such request shall be deemed to be approved. 4.0 MAINTENANCE. 4.1 Maintenance Obligation. Developer agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in a first class 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 Developer 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 ATTACHMENT NO. 7 , 882/015610-0047 jl Y 71576205 at 2/14/06 Page 11 of 46 malicious mischief, and (v) no graffiti or accumulation of waste or debris. Developer 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 Developer breaches any of the covenants contained in this Section and Developer does not commence to cure such breach within five (5) business 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 Developer to Agency upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) days after Developer's receipt of notice thereof, or if Developer fails to timely pay other sums required to be paid to Agency under this Agreement when due (after notice and an opportunity to cure, as set forth in Section 10 or Section 11 (as applicable)), 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 Developer, and the rents, issues and profits of such property. Agency may bring an action at law against Developer to pay any such sums or foreclose the lien against Developer'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 seq., 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 Marketing Plan. Prior to the Effective Date hereof, Developer shall have submitted for the approval of the Executive Director, which approval shall not unreasonably be withheld, a plan for marketing the rental of the Units (the "Marketing Plan"). The Marketing Plan shall include affirmative marketing procedures and requirements. The Marketing Plan shall include a plan for publicizing the availability of the Units within the City in a manner which gives notice to residents of the City, such as notices in any Agency sponsored newsletter, newspaper advertising in local newspapers and notices in City offices and community centers. 5.2 Long Term Management of the Proiect. Prior to the Effective Date hereof, Developer shall have submitted for the reasonable approval of the Executive Director a "Management Plan" which sets forth in detail the identity and the duties of the person or entity retained by Developer to operate and manage the Project (the "Property Manager"), the ATTACHMENT NO. 7 i 882/015610-0047 715762.05 a]2/14/06 Page 12 of 46 management staffing policies (i.e., what staff is on site, how they are supervised) tenant selection criteria, the tenant selection and income certification process, tenant orientation, tenant relations, tenant complaints, routine maintenance, emergencies, a security system and crime prevention program, the procedures for determining Affordable Rent and for the collection of rent, occupancy limits and the procedures for monitoring of occupancy levels, the procedures for eviction of tenants, the rules and regulations of the Project and manner of enforcement, the initial standard lease form, and other matters relevant to the management of the Project. The Management Plan shall require the Property Manager to apply for the Crime Free Multi -Housing Program through the City of La Quinta Police Department. Developer may from time to time submit amendments and modifications to the Management Plan for the reasonable approval of the Executive Director. The management of the Project shall be in compliance with the Management Plan. 5.3 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 managed Agency shall provide written notice to Developer of the event(s) of Gross Mismanagement occurring and Developer 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 curie, 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: 5.3.1 Knowingly leasing a Unit to an ineligible tenant or tenants whose income exceeds the prescribed levels; 5.3.2 Knowingly allowing the tenants to exceed permitted occupancy levels without �aking immediate steps to stop such overcrowding; 5.3.3 Knowingly allowing a tenant to sublease his or her Unit at a rent that exceeds an Affordable Rent; 5.3.4 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit materially complete reports; 1 5.3.5 Failing to timely submit the reports as required by this Agreement; 5.3.6 Fraud in connection with any document or representation relating to this Agreem�rt or embezzlement of Project monies; and 5.3.7 Failing to fully cooperate with law enforcement in its attempts to maintain a crime -free environment on the Site. n.l � ATTACHMENT NO. 7 882/015610-0447 Page 13 of 46 715762.05 a17H14/06 g 5.4 Lease Approval. The initial form lease agreement to be used by Developer for the rental of any of the Units ("Lease Agreement"), and any changes to such form Lease Agreement regarding the provisions required by this Agreement, including, but not limited to, the provisions required by 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. The form Lease Agreement shall include a Crime Free Lease Addendum in the form recommended by the Riverside County Sheriffs Department. 5.5 Operating Reserve. Developer shall, or shall cause the Property Manager to, set aside in a separate interest -bearing trust account the sum of Dollars ($ ) ("Operating Reserve") and shall provide evidence reasonably satisfactory to Agency's Executive Director of compliance herewith, and shall thereafter retain such amount in the Operating Reserve, to cover shortfalls between Operating Income and actual Project costs. In the event that Developer's permanent lender, TCAC regulations or approvals or the Qualified Tax Credit Investor, reasonably requires a different type of account for the Operating Reserve or requires different terms for such account, Developer shall request Agency's Executive Director's approval, which approval shall not be unreasonably withheld, to modify the requirements of this paragraph to meet such requirements. Following the first anniversary date of the City's issuance of the certificate of occupancy for the Project on the Site, Developer may request release of the Operating Reserve to Developer and cancellation of the Operating Reserve upon written request to Agency's Executive Director accompanied by an audited financial statement evidencing sufficient Project income showing, to the reasonable satisfaction of Agency's Executive Director, that the Operating Reserve is no longer required. 5.6 Capital Replacement Reserve. Developer shall, or shall cause the Property Manager to, annually set aside a minimum of Five Hundred Dollars ($500) per unit per year (for example, for 80 units, the annual amount would be $40,000) into a capital replacement reserve account (the "Capital Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used solely for Capital Improvements. As Capital Improvements become necessary, the Capital Replacement Reserve shall be the first source of payment therefor. Once the total amount of the Capital Replacement Reserve exceeds Dollars ($ ), which minimum capital reserve shall be increased annually from the date City issues its certificate of occupancy for the Project by the CPI (the "Capital Replacement Reserve Minimum"), and is maintained at that level, upon receipt of written consent of the City Manager or Agency's Executive Director (which shall not be unreasonably withheld), Developer shall have no further obligation to fund the Capital Replacement Reserve in excess of the Capital Replacement Reserve Minimum. Not less than once per year, Developer, at its expense, shall submit to Agency an accounting for the Capital Replacement Reserve. The non -availability of funds in the Capital Replacement Reserve does not in any manner relieve Developer of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Site in the manner prescribed in this Agreement. n • "'i ATTACHMENT NO. 7 882/015610-0047 715762.05 ai2n4/06 Page 14 of 46 Notwithstanding anything herein to the contrary, in the event the permanent lender for the Project requires the establishment of a capital reserve to fund Capital Improvements, and such requirements are consistent with, and at least as stringent as those set forth herein, then during the term of the documents governing such loan, Developer shall not be deemed in default hereunder if Developer is in compliance with such condition. 6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Developer 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 Site; (ii) all rules and regulations of any assessment district of the City with jurisdiction over the Site; and (iii) all applicable labor standards of California law and federal law; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Waiver and Release. Subject to Section 222 of the AHA, which requires the Agency to indemnify Developer in certain, specified circumstances, Developer hereby waives, releases, acquits, and forever discharges Agency, its officers, officials, members, employees, agents, and representatives, and their respective heirs, successors, personal representatives, and assigns, of and from any liability for the physical or environmental condition of the Site, or for removal or remediation of Hazardous Materials, or repair or alteration of the physical condition of the Site or Project. Developer accepts and approves the physical and environmental condition of the Site in its "AS IS" 'WHERE IS" "WITH ALL FAULTS" condition. 6.2.2 Definitions. For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: 6.2.2.1 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 biphenyls, (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. .13,17), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C..6901 et seq. (42 U.S.C.,6903) or (xi) defined as ATTACHMENT NO. 7 7i5762 0lo-0°47 os eiznvoc g t3 1Page 15 of 46 ��bz "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C., 9601 et se . 6.2.2.2 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. 6.2.2.3 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. 6.2.3 Indemnity. Developer 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) Developer's placement on or under the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, 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. Developer shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Developer to Remediate Premises. Notwithstanding the obligation of Developer to indemnify Agency, City, and their respective officers, officials, members, employees, agents, and representatives pursuant to Section 6.2.3, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this ATTACHMENT NO.7 882/015610-0047 Page 16 Of 46 715762 05 al2/14/06 g 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 Developer 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. Developer, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Developer is required to report to any governmental agency any violation or potential violation of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify 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 Developer 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, Developer shall, as soon as possible after it becomes aware of the release, furnish to the Executive Director a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Executive Director, Developer shall furnish to the Executive Director a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the 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. Developer, 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 Developer and Agency, and shall provide Agency evidence reasonably acceptable to Agency's 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 Developer, in an amount not less than Three Million Dollars ($3,000,000) 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 CPI (the "CPI Adjustment"). Unless otherwise approved in advance by the Agency Executive Director, the insurance to be provided by Developer may provide for a deductible or self -insured retention of not more than Ten Thousand Dollars ($10,000), with such ATTACHMENT NO.7 882/015610-0047 71576205.12/14/06 Page 17 of 46 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 Developer 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 Developer 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." Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements, provided the proposed policies will adequately protect the Agency's interests hereunder. 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 Developer hereunder. In no event shall the limits of any policy be considered as limiting the liability of Developer 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. r. n ATTACHMENT NO. 7 882/015610-0047 Page 18 of 46 715762 05 a] 2/14/06 g 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 Developer 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 Developer'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 Developer, procure such insurance and pay the premiums therefor, in which event Developer 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 Developer, subject to its compliance with any procedures required by a senior lien holder, Developer 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 Developer 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" events (as defined in Section 22 of this Agreement) occurring after the casualty event, in no event shall the repair, replacement, or restoration period exceed fifteen (15) months from the date Developer 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 Developer, 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 Site do not permit the repair, replacement, or restoration, Developer may elect not to repair, replace, or restore the Project by giving notice to Agency (in which event Developer shall be entitled to all insurance proceeds but Developer shall be required to remove all debris from the Site) or Developer may reconstruct such other improvements on the Site 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 ATTACHMENT NO. 7 882/015610-0047 Page 19 of 46 715762.05 a]2/14/06 �' event, the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. If Developer fails to obtain insurance as required by this Agreement (and Agency has not procured such insurance and charged Developer for the cost), Developer 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, Developer 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. 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 Developer is not required to (and has not) insured against, then Developer 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) Developer shall remove all debris from the Site, 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 Developer does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Developer shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Developer 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. Developer covenants that during the term of this Agreement Developer 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 twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Developer, taking all transfers into account on a cumulative basis. In the event any entity constituting Developer, or the constituent partners or members of Developer or any successor of Developer, 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 Developer, or the constituent partners of Developer or ATTACHMENT NO. 7 ti 3 882/015610-0047 Page 20 of 46 715762 05 a12114/06 g any successor of Developer is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Developer, or the constituent members of Developer or any successor of Developer is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Developer, or the constituent partners of Developer or any successor of Developer is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) 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, Developer shall not Transfer this Agreement or any of Developer'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 a limited liability company in which Developer has a greater than fifty percent (50%) ownership and management interest; (b) transfers to a limited partnership in which Developer or an Affiliate of Developer which is also a non-profit public benefit corporation is the general partner (the "Limited Partnership"); (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 any publicly -held partnership or real estate investment trust; (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; nn ATTACHMENT NO. 7 882/015610-0047 Page 21 of 46 715762 05 a12/14/06 g (h) the transfer of the limited partner interests of the Limited Partnership to the Qualified Tax Credit Investor; (i) the transfer by the Qualified Tax Credit Investor to an entity that has the same general partner or managing member as the Qualified Tax Credit Investor; (j) the removal by the Qualified Tax Credit Investor of the general partner of the Limited Partnership for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to Agency; (k) sale by the Qualified Tax Credit Investor of credits in syndication; (1) encumbrance of the limited partner interest by the Qualified Tax Credit Investor as collateral to finance its capital contribution to the Limited Partnership; or (m) exercise by the general partner of Developer of any option to purchase or right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in the Limited Partnership at the conclusion of the tax credit period. 9.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Developer 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 Developer or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Developer's obligations hereunder shall be effective unless and until Developer 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. ATTACHMENT NO. 7 882/015610-0047 715762 05 a12/14/06 Page 22 of 46 10.0 EVENTS OF DEFAULT BY DEVELOPER. 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 Developer hereunder if Developer 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 Developer 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 Developer has commenced to cure within the same thirty (30) day period and has diligently prosecuted such cure to completion: 10.1 Developer shall abandon or surrender the Site; or 10.2 Developer is in default of the Agency Note and has not cured such default within the cure period applicable to such default as set forth in the Agency Note; or 10.3 Developer is in material default of any of the covenants, terms or provisions of this Agreement or any of the Agency Agreements; or 10.4 Developer 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 10.5 Developer is adjudicated a bankrupt; or 10.6 Developer makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the Agency Agreements. 10.7 Developer is in default, beyond any applicable cure period, of either of the following: (i) any senior indebtedness encumbering the Site, or (ii) the Tax Credit Regulatory Agreement and the other party has not waived the default. Notwithstanding anything herein to the contrary, whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer of the terms hereunder, the Agency shall at the same time deliver a copy of such notice or demand to the Qualified Tax Credit Investor. The Qualified Tax Credit Investor (insofar as the rights of the Agency are concerned) shall have the right, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default. Such cure period shall run concurrently with the Developer's cure period described in this Article 10.0. 11.0 REMEDIES OF AGENCY. In the event Developer defaults in the performance or observance of any covenant, agreement or obligation of Developer 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 ATTACHMENT NO. 7 882/015610-0047 Page 23 of 46 715762.05 a12F14/06 g �..... i cannot be cured within said time period, Developer has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then Agency may 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) Developer'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 Developer, 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 (A) place a lien on the Site for said amount due plus interest at the maximum legal rate, or (B) foreclose with respect to Agency's 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 or proceedings at law or suits in equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a result thereof, including without limitation exercise of Agency's rights under the Agency Deed of Trust; 11.4 Have a receiver appointed to take possession of Developer's interest in the Site, with power in said receiver to administer Developer's interest in the Site, to collect all funds available to Developer in connection with its operation and maintenance of the Site, and to perform all other actions consistent with Developer's obligations under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Developer and seek repayment of any remaining principal and accrued interest then owing on the Agency Note; 11.6 With respect to a default for which foreclosure would be an available remedy, exercise the right to foreclose, or, during the period which is five (5) days prior to the foreclosure sale date, exercise the right to purchase the Project from Developer, for a purchase price equal to the appraised value of the Site less (i) the outstanding amount due under any senior indebtedness, (ii) the amount due under the Agency Note, (iii) any delinquent taxes and assessments owing on the Site, and (iv) any reasonable costs incurred by Agency to effect the curing of a default and purchase of the Project, including but not limited to escrow fees and attorney's fees. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any parry 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, ATTACHMENT NO. 7 715762 OS 05a12/14/06 g ao047 Page 24 of 46 n 1576 national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, 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. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the 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 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." ATTACHMENT NO.7 882/015610-0047 Page 25 of 46 715762 05 al2/14/06 g 13.0 COVENANTS TO RUN WITH THE LAND. Developer hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Developer 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 Developer'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 Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Developer's legal interest in the Site is rendered less valuable thereby. Agency and Developer 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. Developer, 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. Developer also grants to the Agency the right and power to enforce the terms of this Agreement against the Developer 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 this Agreement shall remain in effect for a period terminating on the earliest of (i) fifty-five (55) years following the Effective Date; (ii) foreclosure by Agency with respect to the Site; and (iii) foreclosure by a senior lender. 14.0 INDEMNIFICATION. Developer 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, except with respect to those actions described in the last sentence of Section 222 of the AHA. ATTACHMENT NO.7 '82/015610-0047 Page 26 of 46 715762 05 .12/14/06 .� 15.0 UTILITIES AND TAXES. Developer, while in possession of the Site, and each successor or assign of Developer while in possession of the Site, shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Site, subject to Developer's right to claim exemptions under California Revenue & Taxation Code Section 214(g), and (ii) all charges for all utilities serving the Site for which Developer 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. The Developer and the Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the parties hereto, lending institutions, the Qualified Tax Credit Investor or financial consultants to the Agency, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The Agency's Executive Director shall have the authority to approve, on behalf of the Agency, amendments to this Agreement that would not substantially alter the basic business terms or substantially increase the risk to the Agency. All other amendments shall require the action of the Agency Board. All amendments, including those authorized to be approved by the Agency's Executive Director, shall be in writing and shall be signed by authorized representatives of Agency and Developer. 18.0 NOTICE. Formal notices, demands, and communications between Agency and Developer 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 ATTACHMENT NO. 7 882/015610-0047 Page 27 Of 46 715762.05 al2/14106 g 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 Developer: The Southern California Housing Development Corporation 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Attn: Executive Director With a copy to: Law Office of Edward A. Hopson 655A North Mountain Avenue Upland, CA 91786 Attn: Edward A. Hopson, Esq. 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. Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer at the addresses set forth above. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided above. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. 19.0 NONLIABILITY OF AGENCY OFFICIALS. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement or any of the Agency Agreements. n� ATTACHMENT NO. 7 '82/015610-0047 Page 28 of 46 715762 05 a12/14/06 g 20.0 TRANSACTIONS WITH AFFILIATES. Developer shall have the right to enter into contracts with subsidiaries, and Affiliates for the purpose of providing management, 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. Agency acknowledges and agrees that Developer may act as its own general contractor or may engage a third party licensed 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/INTERPRETATION; ENTIRE AGREEMENT. 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. 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 Developer, 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 invalidate this Agreement nor shall it be construed as a waiver of any succeeding breach of 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. 21 A 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 that might otherwise apply. 21.5. Entire Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors -in -interest with respect to all or any part of the subject matter hereof. 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 ATTACHMENT NO. 7 882/015610-0047 Page 29 of 46 715762.05 a]2/14/06 g 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 Developer); or any other causes beyond the reasonable control or without the fault of the parry 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 Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project (except as a result of an omission or breach by Agency), (ii) Developer'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 Developer. 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. 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 internal laws of the State of California without regard to conflicts of law. 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] ATTACHMENT NO. 7 J 882/015610-0047 Page 30 of 46 715762 05 a12/14/06 g IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. Date F."UMIMY1-1 By: Secretary APPROVED AS TO FORM RUTAN & TUCKER, LLP By: Attorneys for the La Quinta Redevelopment Agency Date: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 0 Thomas Genovese Executive Director "DEVELOPER" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation Un signature printed name ATTACHMENT NO. 7 882/015610-0047 Page 31 of 46 715762 05 a12/14/06 g 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] 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] ATTACHMENT NO. 7 882/015610-0047 Page 32 of 46 715762 05 a] 2/14/06 g EXHIBIT "A" LEGAL DESCRIPTION OF SITE All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 7 882/015610-0047 Page 33 of 46 715762.05 a12/14/06 g INCOME COMPUTATION AND CERTIFICATION FORM [See following pages] r ^� ATTACHMENT NO. 7 '82/015610-0047 Page 34 of 46 715762 05 a12/14106 g CITY OF LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico, La Quinta, CA 92253 INCOME COMPUTATION AND CERTIFICATION FORM (Affordable Housing Eligibility for Renter Occupied Unit PART I. PROPERTY FINANCED WITH GOVERNMENT ASSISTANCE Property Address: PART II. TENANT HOUSEHOLD INFORMATION Date of Birth Sue. Sec. # Relationship "TOTAL NUMBER OF PERSONS IN HOUSEHOLD: (Please list information on other household members below) Mailing Address: Telephone Numbers: Work O Home( PART III. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as specified below. Attach a note explaining any significant changes in household income between the previous year and the current year. INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUSEHOLD AGE 18 OR OLDER REGARDLESS OF WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are not required to file a tax return, please indicate this in Part V by your signature. ANN INCOME ANN INCOME INCOME SOURCES for owner others in hshld VERIFICATIONS (needed for file) A. Employment earnings Last tax return & last 3 pay stubs, employer verification B. Self-employment earnings Last 2 tax returns & current financial stint C. Social Security (OASDI) Annual award letter D. Supplemental Security Income (SSI) Annual award letter E. Public assistance (AFDC, general Current benefit statement assistance, unemployment, etc.) F. Pension (s) Annual award letter, year end stint, W-2 G. Interest income Last 2 statements for all accounts H. Investment income (stocks, bonds, real estate, etc.) Last 2 statements for all accounts 1. Room rental Rental agreement, copies of checks, etc. J. Other income (list type/source) ATTACHMENT NO. 7 '3 882/015610-0047 Page 35 of 46 ~ 715762.05 al2/14/06 g K. TOTAL INCOME (sum of A thru J) I/ 12 months = mo. income PART IV. PROPERTY STATUS Will this property be your primary residence? Will someone other than the individuals listed above be occupying this property? If yes - Name of occupants: Telephone Number: My/our housing expenses are as follows: 1. Monthly tenant rent 2. Average monthly utilities Mailing Address: PART V. TENANT CERTIFICATION ]/We understand that after the initial eligibility determination, completion of monitoring forms is required on an annual basis. ]/We certify that I/we have disclosed all information pertaining to my/our application and that the information presented in the foregoing Sections I through IV is true and accurate to the best of my (our) knowledge. Tenant Date Tenant For more information regarding this application, please contact management staff at (760) Comments: FOR OFFICE USE ONLY Information verified Income category Maximum allowable annual income L% of median) Applicant's annual income gross monthly max housing costs Management ATTACHMENT NO. 7 882/015610-0047 Page 36 of 46 715762 05 al2/14/06 g Date �3J EXHIBIT "C" INCOME RECERTIFICATION FORM [See following pages] ATTACHMENT NO. 7 882/0156IM047 Page 37 of 46 715762 05 a12/14/06 g LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico, La Quinta, CA 92253 INCOME RECERTIFICATION FORM (Renter Occupied Unit) PART I. GENERAL INFORMATION 1. Property Owner Name 2. Renter Name 3. Property Address La Quinta, CA 92253 (Please include P.O. Box No. if applicable) 4. Has there been a change in ownership of this property during the preceding 12 month period? Yes ( ) No ( ) (If yes, please explain) PART II. UNIT INFORMATION 5. Number of Bedrooms 6. Number of Occupants Names: PART III. AFFIDAVIT OF RENTER I, , and I, , as renters of units assisted pursuant to the La Quinta Redevelopment Agency's (the "Agency") Affordable Housing Program (the "Program"), do hereby represent and warrant that the following computation includes all income (I/we) anticipate receiving for the 12-month period commencing on January 1, 20_ (including the renter(s) and all family members of the renters): (a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (before payroll deduction) (b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business) (c) interest and dividends (d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts from persons not occupying unit (e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes ATTACHMENT NO. 7 — 882/015610-0047 Page 38 Of 46 7/576205 at2Aa4�o5 g (f) regular and special pay and allowances of a member of armed services (whether or not living in the dwelling) who is head of the family or spouse Subtotal (a) through (f) _ LESS: Portion of above items which are income of a family member who is less than 18 years old or a full-time student TOTAL ELIGIBLE INCOME NOTE: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2. This affidavit is made with the knowledge that it will be relied upon by the Landlord and the Agency to determine maximum income for eligibility and (1/we) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 3. (I/We) will assist the Landlord and the Agency in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto a copy of our federal income tax return for the last year (20__). 4. (I/We) acknowledge that (1/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) agreement with the Landlord to rent the unit and will additionally enable the Agency to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. B. (My/Our) monthly housing expenses are limited to the following: Base rent 2. Average Monthly Utilities 3. Other (explain) (I/We) understand that completion of monitoring forms is required on an annual basis and agree to notify the La Quinta Redevelopment Agency in writing of any change in ownership or rental of the unit. (I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Renter(s) n r� ATTACHMENT NO. 10 882/015610-0047 Page 39 of 4 715762 05 .12/14/06 g EXHIBIT "D" LEASE RIDER [See following page] ATTACHMENT NO. 7 4 J 882/015610-0047 Page 40 of 46 715762.05 a12/14/06 g _(Project Name)_ AFFORDABLE HOUSING PROJECT Lease Rider RESIDENT: (if there is more than one adult occupant, each person must sign the rider) 10W.W607041 A UNIT NO.: The undersigned tenant(s) hereby certify and agree as follows: 1. Income Certification. The attached income certification is true, correct and complete. I/we agree to provide a similar certification annually upon request during the term of my occupancy. 2. Employer Verification. The landlord or property manager has my permission to verify my/our income from any sources of income Uwe receive. 3. False Statements. If the income certification and/or lease application submitted by me/us is false, or if I/we fail to provide annual certifications, the landlord or property manager will have the right to terminate my/our lease and recover possession of my/our Unit. I/we understand that the landlord and property manager are. relying on this income certification in accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if my/our income does not qualify the Unit for the affordable housing program. 4. This rider shall be considered as part of my/our lease. Date: Tenant Tenant Tenant Tenant r ATTACHMENT NO. 7 882/015610-0047 Page 41 of 46 715762.05 al2/14/06 g EXHIBIT "E" CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE [See following page] ATTACHMENT NO. 7 7,502.05 a1/14 Page42 of 46 775762.05 a12/14/06 CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE The undersigned, being duly authorized to execute this certificate on behalf of , owner of the Project, hereby represents and warrants that: I. He/she has read and is thoroughly familiar with the provisions of the Affordable Housing Agreement between the La Quinta Redevelopment Agency and Coachella Valley Housing Coalition. 2. As of June 30, 20_, the following number of residential units in the Project (i) are currently occupied by tenants qualifying as Eligible Tenants at Affordable Rents; (ii) are currently occupied by Moderate Income Tenants; or (iii) are currently vacant and being held available for occupancy by Eligible Tenants and have been so held continuously since the date Eligible Tenants vacated such unit, as indicated: Units occupied by Eligible Tenants _ Units occupied by Moderate Income Tenants _ Vacant units Other (please explain) 3. The unit number, unit size, the tenant paid rental amount charged and collected, the number of occupants and the income of the occupants for each restricted unit in the Project is set forth on the attached list. All restricted units in the Project are rented at Affordable Rent. OWNER NAME Dated: , 20 By: (Printed name and title) ATTACHMENT NO. 7 882/0156IM047 Page 43 of 46 715762.05 al2/14/06 g EXHIBIT "F" RESTRICTED UNIT MATRIX [See following page] ATTACHMENT NO. 7 882i015610-0047 Page 44 of 46 715762.05 alvl4ro6 g EXHIBIT "F" RESTRICTED UNIT MATRIX Size No. of Square VLI 50% VLI Units Footage One bedroom Two bedrooms Three bedrooms Four bedrooms VLI = Very Low Income Household (39) 50% VLI = 50% Very Low Income Household (31) ELI = Extremely Low Income Household (9) MI = Moderate Income Household (Management Unit) (1) ATTACHMENT NO.7 882/015610-0047 Page 45 of 46 715762 05 a12/14/06 g ELI MI F.VoV41W, uiola&[1-i PROJECT PROFORMA [TO BE INSERTED] 882/015e10-0047 ATTACHMENT NO. 8 715762 05 a12/14/06 ATTACHMENT NO.9 BILL OF SALE [SEE FOLLOWING DOCUMENT] 71576 .05.12 1 ATTACHMENT NO. 9 7157Q.05 al2/l4/06 BILL OF SALE La Quinta Redevelopment Agency ("Seller"), for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, paid to it by Southern California Housing Development Corporation ("Purchaser"), has transferred, sold and assigned and by these presents does transfer, sell and assign unto Purchaser the following: Any and all personal property, if any, owned by Seller, described more specifically in that certain Affordable Housing Agreement dated between the parties identified above (the "Agreement"), which personal property is located upon or used in connection with the real property described in Schedule 1 hereto. Seller makes only those representations and warranties set forth in the Agreement concerning such personal property, and to the extent that there is any such personal property, such personal property is transferred, sold and assigned to Purchaser in accordance with the terms thereof. Executed as of this day of "Seller" LA_QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Its: Executive Director ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency ATTACHMENT NO. 9 „ 892/015610-0047 Page 1 of 2 715762.05 al2/14/06 g SCHEDULEI LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 9 882/015610-0047 Page 2 Of 2 715762 05 a12/14/06 g ATTACHMENT NO. 10 ASSIGNMENT AND RELEASE [SEE FOLLOWING DOCUMENT] 71576 05.12 14 ATTACHMENT NO. 10 715762 OS a12/I4/06 ASSIGNMENT AND RELEASE This ASSIGNMENT AND RELEASE ("Assignment and Release") dated , 200 , is executed by La Quinta Redevelopment Agency, a public body, corporate and politic ("Assignor), in favor of The Southern California Housing Development Corporation, a California nonprofit public benefit corporation ("Assignee"). Assignor is the owner of that certain land (the "Site") located in the City of La Quinta, California, described more specifically on Schedule "1" hereto. The Site and the Housing Development thereon are being conveyed by Assignor to Assignee pursuant to a grant deed delivered concurrently herewith. Terms used herein but not defined shall have the meanings ascribed thereto in that certain Affordable Housing Agreement by and between Assignor and Assignee dated as of , 2006 (the "Affordable Housing Agreement"). Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1. Subject to Section 2 below, Assignor hereby grants, assigns, transfers, conveys and delivers to Assignee, without warranty, all of Assignor's right, title, interest, benefits and privileges, if any, in and to all entitlements, approvals, maps, applications, plans, specifications, contracts and other documents relating to the Site, the Housing Development or the construction of the Housing Development on the Site between Agency and its contractors, subcontractors, engineers, architects and other consultants, as described more specifically in the Affordable Housing Agreement, as well as the following described property: (a) All construction, general contractor, subcontractor, engineering, consulting, architectural and other similar contracts and any and all amendments and modifications thereto, concerning the design or construction of all public improvements constructed upon or in connection with development of the Site as well as construction of the Housing Development on the Site (as such terms are defined in the Affordable Housing Agreement), and all warranties with respect thereto (including all statutory, express and implied warranties); (b) All architectural drawings, plans, specifications, soils tests, appraisals, engineering reports and similar materials relating to any or all of the Site and/or the Housing Development. (c) All of Assignor's rights, claims, actions, and causes of action against any of Assignor's general contractors, subcontractors, engineers, architects and consultants relating to or arising from preparation of the architectural drawings, plans, specifications, reports or similar materials relating to the development of the Site or construction of public improvements thereon or construction of the Housing Development, all of the plans and documents referred to in paragraphs 1 and 2 above, as well as all of the same relating to construction of the Housing Development, as well as all rights of Assignor as an additional insured or otherwise pertaining to ATTACHMENT NO. 10 �y 882/015610-0047 Page 1 of 6 715762.05 al2/14106 hi insurance coverage concerning such architects, engineers, general contractors, consultants and the Site. (d) All governmental entitlements, permissions, environmental clearances, authority to develop the Site and construct the Housing Development, rights, licenses and permits which relate to all or any of the Site, the Housing Development, or the operation thereof, and (e) All general intangibles relating to the development or use of the Site and the Housing Development. 2. Notwithstanding anything to the contrary herein, the foregoing grants, assignments, transfers, conveyances, and deliveries are subject to any limitations which may be imposed by law or under any agreement with any governmental agency or authority or with the contractors, subcontractors, engineers, consultants, and architects referenced in Section 1 above. 3. In consideration of the foregoing assignment, Assignee, for itself and for its agents, successors and assigns, fully releases, acquits and discharges the Assignor and the City of La Quinta ("City") and the Assignor's and City's respective officers, officials, members, representatives, employees, attorneys and agents (all of the foregoing, collectively, the "Released Parties"), from all rights, claims, demands, actions or causes of action that Assignee has or may have against the Released Parties arising out of or related to the development, or physical condition, of the Housing Development, including, but not limited to, claims for damages, attorney's fees and costs, and expert witness fees and costs. ACKNOWLEDGMENT CONCERNING CIVIL CODE SECTION 1542 Waiver of Section 1542 of the Civil Code Assignee, on behalf of itself and its agents, successors, and assigns, expressly waives any and all rights under Section 1542 of the Civil Code of the State of California, or any other federal or state statutory rights or rules, or principles of common law or equity, or those of any jurisdiction, government, or political subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar Provision"). Thus, Assignee may not invoke the benefits of Section 1542 or any Similar Provision in order to prosecute or assert in any manner claims released hereunder. Section 1542 provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Assignee's initials: 4. The City shall be deemed an express third party beneficiary of the provisions of this Assignment and Release. ATTACHMENT NO. 10 882/015610-0047 Page 2 of 6 715762 05 a12/14/06 g 5. This Assignment and Release shall be construed according to its fair meaning and as if prepared by both parties hereto. 6. This Assignment and Release shall be governed by the internal laws of the State of California, without regard to conflict of law principles, and any question arising hereunder shall be construed or determined according to such law. The Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Assignment and Release. 7. This Assignment and Release may be executed in counterparts, each of which, when this Assignment and Release has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 8. The person(s) executing this Assignment and Release on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Assignment and Release on behalf of said party, (iii) by so executing this Assignment and Release such party is formally bound to the provisions of this Assignment and Release, and (iv) the entering into this Assignment and Release does not violate any provision of any other agreement to which such party is bound. [signatures on next page] ATTACHMENT NO. 10 8821015610-0047 Page 3 Of 6 715762.05 .12/14/06 g IN WITNESS WHEREOF, Assignee and Assignor each hereby represent that they have read this Assignment and Release, understand it, and hereby execute this Assignment and Release to be effective as of the day and year first written above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "Assignor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: Executive Director "Assignee" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit, public benefit corporation By: Its: ATTACHMENT NO. 10 892/015610-0047 Page 4 of 6 715762 05 a12/14/06 g SCHEDULEI LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 891 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 10 882/015610-0047 Page 5 of 6 715762 05 a12/14/06 g SCHEDULE2 [ATTACH SCHEDULE OF CONTRACTS TO BE ASSUMED BY ASSIGNEE] ATTACHMENT NO. 10 882/015610-0047 Page 6 of 6 715762 05 .12/14/06 g ATTACHMENT NO. II MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT [SEE ATTACHED DOCUMENT] 882/015610-0047 ATTACHMENT NO. 11 715762.05 .12/14/06 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 For Recorder's Use) This Memorandum of Affordable Housing Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code § 27383. MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memoran- dum") is entered into this _ day of 2006, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("SCHDC"). This Memorandum is made with reference to the following: 1. On or about the date of this Memorandum, SCHDC acquired from Agency fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property"). 2. On or about , Agency and SCHDC entered into that certain Affordable Housing Agreement which provides for Agency to develop the Property and to subsequently convey the Property to SCHDC for SCHDC's ownership, operation and maintenance thereof as an affordable rental housing project. The definitions of all terms contained in the Affordable Housing Agreement shall apply to this Memorandum. 3. The Affordable Housing Agreement provides for Agency and SCHDC to enter into this Memorandum and to record the same in the Official Records of the County of Riverside to provide notice to all persons of the existence of said Affordable Housing Agreement and to cause the Affordable Housing Agreement to run with the Property and be binding on SCHDC and SCHDC's successors -in -interest as to the Property. 4. This Memorandum may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. ,• r, A + 1 ATTACHMENT NO. 11 882/015610-0047 Page 1 of 4 715762 05 al2/14/06 g IN WITNESS WHEREOF, Agency and SCHDC have entered into this Memorandum as of the date first set forth above. ATTEST: 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 Its: Executive Director "SCHDC" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit, public benefit corporation am Its: ti �i ATTACHMENT NO. 11 '82/015610-0047 Page 2 of 4 71576205 a12/14/06 g STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) 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 persons) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) 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 persons) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] ATTACHMENT NO. 11 J "2/015e10-0047 Page 3 of 4 715762 05 al2/14/06 g EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 11 882/015610-0047 Page 4 Of 4 n5762 05 a12/14/06 g