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FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT
(Manchester Orangewood)
This FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT
(Manchester Orangewood) (“First Amendment to Agreement”) is made and entered into as of December [__], 2023 (“First Amendment Date”), by and between the ANAHEIM HOUSING AUTHORITY, a public body, corporate and politic (“Authority”), and MANCHESTER HOUSING PARTNERS LP, a California limited partnership (“Developer”).
RECITALS
A. Authority and Developer entered into that certain Affordable Housing Agreement (Manchester Orangewood) dated as of March 1, 2020 (“ Original Agreement”) that relates to the construction, completion, operation and management of a 102-unit affordable housing project now called Finamore Place (“Project”).
B. Pursuant to the Original Agreement, Authority, as Landlord, and Developer, as Tenant, entered into that certain unrecorded Ground Lease (Manchester Orangewood) dated as of March 1, 2020 for which a Memorandum of Ground Lease (Manchester Orangewood) was recorded in the Official Records, County of Orange, State of California (“Official Records”) on March 19, 2020 as Instrument No. 2020-000125688. The parties also entered into that certain Ground Lease Implementation Agreement (Commercial Component) (“Implementation Agreement”) dated as of May 18, 2023 relating to the implementation, terms and conditions of the Sublessees in occupancy of certain commercial space, onsite parking, and the ingress/egress and circulation within the Project.
The Ground Lease (Manchester Orangewood) together with the Implementation Agreement are referred to herein as the “Original Ground Lease”.
C. In implementation of the Original Agreement, Authority and Developer also entered into a series of documents and instruments, also each dated as of March 1, 2020, including without limitation that certain (i) Regulatory Agreement (“Regulatory Agreement”) recorded in the Official Records by Instrument No. 2020-000125690, (ii) Authority Other Funds Note, Promissory Note Secured by Deed of Trust, a promissory note evidencing the Authority Other Funds Loan issued by Authority to Developer (“Original Authority Other Funds Note”), (i ii) Authority Other Funds Deed of Trust and Assignment of Rents as recorded in the Official Records as Instrument No. 2020- 000125695, which secures the Original Authority Other Funds Note (“Original Authority Other Funds Deed of Trust”), and (iv) other instruments related to implementation of the Original Agreement that are referred to therein as part of the Project Documents.
D. CalOptima Health, a California public agency (“CalOptima”), was founded by the community as a County Organized Health System that offers health insurance programs for low - income children, adults, seniors and people with disabilities. CalOptima has an ongoing commitment to Orange County's vulnerable population of people experiencing homelessness, and operates a grant program to facilitate and accelerate the creation of affordable and permanent supportive housing units, including in Anaheim.
E. In August 2023, the City of Anaheim, a California municipal corporation and charter city, through its Housing and Community Development Department (“City”), prepared and submitted an application to CalOptima seeking an award of capital grant funds for the Project under the Department of Health Care Services’ Housing and Homelessness Incentive Program (“HHIP”).
CalOptima awarded the City One Million Five Hundred Thousand Dollars ($1,500,000) (“CalOptima 2 4855-9161-4089v7/022620-0108
Funding”) The City authorized transfer to the Authority of the CalOptima Funding pursuant to that certain Cooperation Agreement (CalOptima Funding) as an additional source of funding for the Project. The CalOptima Funding will be loaned by the Authority to Developer and added to the principal due under the Original Authority Other Funds Note, as amended by (i) this First Amendment to Agreement, (ii) as evidenced by that certain First Amendment to Authority Other Funds Note Promissory Note Secured by Deed of Trust (“First Amendment to Authority Other Funds Note”), and (iii) as secured by that certain First Modification of Deed of Trust and Assignment of Rents (Authority Other Funds Deed of Trust) (“First Modification of Deed of Trust”), the form of which amendment s were considered and approved by the Authority at an open public meeting on December 5, 2023.
F. The CalOptima Funding awarded to the City, transferred to the Authority, and then loaned to the Developer shall be expended for the benefit of the residents of the Project and tied to participation in the HHIP, which allows the CalOptima Funding to fund affordable and permanent supportive housing. HHIP aims to prevent and address housing insecurity for Medi -Cal members by ensuring those experiencing homelessness have a clear path into housing and can access the services needed to remain housed; and many residents at the Finamore Place Project will be served with this additional funding.
G. Due to increased costs incurred in the construction, completion, and ongoing operation of the Finamore Place Project, Developer requested additional funding from the Authority, and by this First Amendment to Agreement, the Authority agrees to loan to Developer an additional Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000) on the terms and conditions set forth herein, and in the First Amendment to Authority Other Funds Note , and First Modification of Deed of Trust , executed and delivered of even date herewith, which amount is a two-tiered tranche comprised of : (1) One Million Five Hundred Thousand Dollars ($1,500,000.00) sourced from the CalOptima Funding, and (2) One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) sourced from the Authority’s Low to Moderate Income Housing Asset Fund (“ LMIHAF”, and herein the $1.25M is referred to as the “LMIHAF Funding”).
H. The amended, cumulative principal amount of the Authority Other Funds Loan is Five Million Nine Hundred Fifty-One Thousand Three Hundred Eighty -Eight Dollars ($5,951,388) (“Amended Authority Other Funds Note Amount”).
I. Capitalized terms used in this First Amendment to Agreement are as defined in the Original Agreement and Original Ground Lease unless otherwise defined herein.
J. In connection with this matter and related matters affecting funding to the Project, Developer has opened escrow and title accounts with First American Title Insurance Company, National Commercial Services (“First American”) , at the issuing office located at 18500 Von Karman Ave, Suite 600, Irvine, CA 92612, Order No. NCS -810632C-SA1, Reference No. NWC Manchester and Orangewood in Anaheim, Escrow Officer Ryan Hahn, Title Officer Jeffery Paschal (“First American NCS-810632C-SA1”).
K. Excepting to the extent expressly modified by the provisions of this First Amendment to Agreement and each and all related amendment s and modification instrument s of even date herewith, all other provisions of the Original Agreement shall remain in full force and effect without modification.
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NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree to amend the Original Agreement as follows:
Section 1. Recitals. The foregoing recitals are a substantive part hereof of this First Amendment to Agreement.
Section 2. Modification of Authority Other Funds Loan.
2.1 Increased Principal. The Original Authority Other Funds Note shall be modified by that certain First Amendment to Authority Other Funds Note in the form of Exhibit A hereto; and, consistent with the foregoing and hereby, Developer agrees to execute, and deliver to Authority (or deliver to First American NCS 810632C-SA1), that certain instrument. (a) In addition, Developer agrees to, and shall execute and deliver to , First American NCS-810632C-SA1 the First Modification of Deed of Trust in the form of Exhibit B attached hereto. Developer agrees and directs that the First Modification of Deed of Trust shall be recorded in the Official Records, provided however such instrument shall be deemed to be effective without regard to whether it is recorded among the Official Records. (b) Effective as of the First Amendment Date, or, if later, upon delivery to Authority (or to First American NCS 810632C-SA1) of the First Amendment to Authority Other Funds Note and First Modification of Deed of Trust as executed and delivered by Developer, the amount deemed owing and outstanding by Developer to Authority under the Original Agreement, as hereby amended, and Authority Other Funds Loan shall be $5,951,388.00.
Section 3. Terms and Conditions of Repayment of Authority Other Funds Loan. The terms and conditions of repayment of the Authority Other Funds Loan shall be amended as follows:
3.1 LMIHAF Funding. The repayment of both the original principal amount of $3,201,388 plus the LMIHAF Funding and loan of $1,250,000 (total $4,451,388) added to the Authority Other Funds Loan shall be subject to the same terms and conditions of the Original Authority Other Funds Note, including without limitation interest accrual at the rate of three percent (3%) simple interest per annum and repayment from Residual Receipts as set forth therein and herein; provided, however, that notwithstanding anything to the contrary in the Project Documents, all payments made by Developer pursuant to the Original Authority Other Funds Note, as modified by the First Amendment to Authority Other Funds Note, shall be applied first towards the repayment of interest and principal allocable to portion of the Amended Authority Other Funds Note Amount comprised of the $4,451,388 loan funds addressed in this Section 3.1 until all of such amounts have been fully repaid.
3.2 CalOptima Funding. With one exception as set forth in this Section 3.2., the repayment of the funds allocable to the CalOptima Funding and loan of $1,500,000 added to the Authority Other Funds Loan shall be subject to the same terms and conditions of the Original Authority Other Funds Note including without limitation repayment from Residual Receipts as set forth therein following repayment of all interest and principal allocable to the portion of the Amended Authority Other Funds Note Amount comprised of the $4,451,388 loan funds addressed in Section 3.1 above, excepting that the portion of the Amended Authority Other Funds Note Amount comprised of the $1,500,000 CalOptima Funding shall not accrue interest, i.e., 0% interest rate as to 4 4855-9161-4089v7/022620-0108
the funds allocable to the CalOptima Funding as a part of the Authority Other Funds Loan, as amended hereby.
Section 4. Effective Date. This First Amendment to Agreement shall be effective commencing on the date this instrument is executed by Authority and Developer.
Section 5. Counterparts. This First Amendment to Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all or which, when taken together, shall constitute one and the same instrument.
Section 6. Governing Law . This First Amendment to Agreement shall be governed by, and construed in accordance with, the laws of the State of California.
Section 7. No Other Changes. Except as expressly provided to the contrary in this First Amendment to Agreement and each and all related amendments and modification instruments of even date herewith, the terms of the Original Agreement and all other documents executed pursuant to the Original Agreement, shall remain in full force and effect as written. This First Amendment to Agreement shall be construed consistently with the terms of the Original Agreement excepting only to the extent of express conflict between the First Amendment to Agreement and the Original Agreement; in the event of conflict, the terms of the First Amendment to Agreement shall control.
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IN WITNESS WHEREOF, the Authority and Developer have caused this First Amendment to Affordable Housing Agreement (Manchester Orangewood) to be executed by duly authorized representatives as of the day and year first written above.
DEVELOPER:
MANCHESTER HOUSING PARTNERS LP,
a California limited partnership
By: JHC-Manchester LLC
a California limited liability company,
its managing general partner
By: Jamboree Housing Corporation
a California nonprofit public benefit
corporation, its sole member and manager
By:
Michael Massie
Chief Development Officer
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AUTHORITY:
ANAHEIM HOUSING AUTHORITY,
a public body, corporate and politic
By:
Grace Ruiz-Stepter, Executive Director
or Authorized Designee
ATTEST:
THERESA BASS
AUTHORITY SECRETARY
Authority Secretary
or Authorized Designee
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
Ryan O. Hodge, Deputy City Attorney
or Authorized Designee
STRADLING YOCCA CARLSON & RAUTH
Housing Authority Special Counsel
EXHIBIT A
Form of First Amendment to Authority Other Funds Note
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EXHIBIT A
FORM OF FIRST AMENDMENT TO AUTHORITY OTHER FUNDS NOTE
(Attached)
EXHIBIT B
Form of First Modification of Deed of Trust and
Assignment of Rents (Authority Other Funds Deed of Trust) 4855-9161-4089v7/022620-0108
EXHIBIT B
FORM OF FIRST MODIFICATION OF DEED OF TRUST
AND ASSIGNMENT OF RENTS (AUTHORITY OTHER FUNDS DEED OF TRUST) (Attached)