FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
THE CITY OF CHINO
13220 Central Avenue
Chino, CA 91710
Attn: City Clerk
(Space Above This Line for Recorder's Office Use Only)
GROUND LEASE
, By and Between
THE CITY OF CHINO
and
CHINO HOUSING INVESTORS, L.P.
487/062212-0041/31324l2 7 aOJ/17/98
I
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO: COPY of Document Recorded
on�M ;;1.4, r'19tas No. L0,32'=,Q
has not been compared with original.
SAN BERNARDINO COUNlY
THE CITY OF CHINO
13220 Central Avenue
Chino, CA 91710
Attn: City Clerk
(Space Above This Line for Recorder's Office Use Only)
GROUND LEASE
By and Between
THE CITY OF CHINO
and
CHINO HOUSING INVESTORS, L.P.
487/062212-0041/3132412 7 a03/17/98
·• TABLE OF CONTENTS
1. LEASE OF THE SITE
2. LEASE TERM .
3 .
4. RENT
3.1 3.2
3.3 USE
4.1 4.2
4.3 4.4
4.5 4.6
4.7 4.8
Rent - Net Operating Income
Net Lease ...
Payment of Rent ..
FOR RESIDENTIAL RENTAL SITE
Purpose ..... .
Residential Use ..
Conversion of Units
Preference to Eligible Tenants
Resident Manager and Staff Units
Liability of Lessee
HOME Program
No Unlawful Use ...
5. OCCUPANCY OF PROJECT BY ELIGIBLE LESSEES
5.1 Definitions . . . . 5.2 Occupancy Levels
5.3 Rental Rates
5.4 Occupancy By Eligible Tenant
5.5 Income Computation Certificate
5.6 Rental Priority . . . . . . . . 5.7 Renting Vacant Units
5.8 Recertification . . . . . . . . .
.
. . . . . . .
.
. . . . . 5.9 Certificate of Continuing Program Compliance
5.10 Maintenance of Records . . . . 5.11 Leases . . . . . . . . 5.12 Conflicts . . . . . .
6. UTILITIES AND TAXES
6.1 Utilities . . . . . . 6.2 Real Estate Taxes . . . . . 6.3 Personal Property Taxes
6.4 Possessory Interest Taxes . . . .
7. OWNERSHIP OF IMPROVEMENTS, FIXTURES AND FURNISHINGS
7. 1 Ownership During Term . . . . . .
. . .
.
.
7.2 Ownership at Termination ...... .
8. 9.
MAINTENANCE . . . . . . .
8.1 Lessee to Maintain Site .
8.3 City Right to Repair
MANAGEMENT . ...... . .
9.1 Approval of On-Site Manager .
9.2 Gross Mismanagement .... .
9.3 Security .... .... .
487/062212-0041/3132412 7 aOJ/17/98 -i-
Page
2 2
2 2
3 3
3 3
4 4
4 4
4 4
5 ,
5 5
6 6
7 7
7 8
8 9
9 10
10 10
10 10
11 12
12 12
12 12
12 15
16 16
16 17
• •
10 . COMPLIANCE WITH LAWS
!1. INDEMNIFICATION
12. INSURANCE
12. 1 Duty to Procure Insurance .
12. 2 Failure to Procure Insurance
12. 3 Insurance Proceeds Resulting From
to Improvements
Loss or Damage
13. DAMAGE OR DESTRUCTION
14. 15.
EMINENT DOMAIN . ...
14. 1 Condemnation
14. 2 Allocation of the Award
14. 3 City or Agency Condemnation
14. 4 Transfer in Lieu of Condemnation
ENVIRONMENTAL MATTERS
15. 1 Definitions ..
15. 2 Due Diligence ..
15. 3 Indemnification
15.4 Duty to Prevent Hazardous Material
Contamination . . . .. .
Obligation .. ... . 15. 5
15. 6
15.7 15.8
15.9 Right of Entry ... ..... .
Storage or Handling of Hazardous Materials
Environmental Inquiries .... . .
Costs of Environmental Compliance . . . .. . .
16. ALTERATION OF IMPROVEMENTS .
16. 1 Alterations ... .
16. 2 Mechanic's Liens ... .
16. 3 Signs .......... .
17. ASSIGNMENT AND SUBLETTING
18. 17. 1 Definition of Transfer
17. 2 Limitation on Transfers
17.3 Request for Consent .
17. 4 No Release
17.5 Lease Approval
PERMITTED ENCUMBRANCES .
18. 1 Right to Encumber .
18. 2 No Subordination of Fee
18. 3 Assignment by Foreclosure- ..
18. 4 Consent of Lienholder
18. 5 Termination and Other Remedies
18. 6 Right to Cure ... .. ... .
18. 7 Obligations of Lienholder in Possession
18. 8 Non-Merger of Fee and Leasehold Estates .
18.9 Lienholder's Right to New Lease .. .. .
487/062212-0041/3132412 7 f03117/98 -ii-
17 18
18 18
21 21
22 23
23 23
24 24
24 24
26 26
26 27
.27
27 28
28 29
29 29
30 30
30 30
31 31
31 31
31 32
32 32
33 33
33 33
34 19.
20 .
• •
18.10 Right of City to Cure Default .
EVENTS
19 .1
19 .2
19 .3
19 .4
19 .5
19 .6
OF DEFAULT AND REMEDIES .. ..
Events of Default by Lessee ..
Remedies of City .. .. . .
Right of City in the Event of Ter:mination of
Lease . . . . . . . . . . . . . . . . . .
Damages . . . . . . . . . . . . . . . .
City Remedy for Excessive Rent Charge ..
Rights and Remedies are Cumulative
NONDISCRIMINATION . . . . . .... .. . .
20 .1 Anti-discrimination .. .... .
20 .2 No Discrimination Clauses in Agreements
21 . NONDISCRIMINATION IN EMPLOYMENT
22 . LABOR STANDARDS
23 . AGENCY THIRD-PARTY BENEFICIARY .
24 . MISCELLANEOUS
24 .1 Attorneys' Fees .
24.2 Amendments
24 .3 Notice ... .
24.4 Holding Over
24 .5 Conflict of Interest
24 . 6 Relationship . . . . . . . . .
24 .7 Quitclaim Deed . . . . . ...
24 . 8 Headings . . . . . . . . . . . .
24 .9 Estoppel Certificate . . . . . . .. .
24 .1 0 Severability ... .
24.11 Waiver ... .
24 .1 2 Integration ..
24 .1 3 Governing Law .
24.14 Entry and Inspection
24 .1 5 Transfer by City
24 .1 6 Counterparts .. ..
ATTACHMENT NO . 1
ATTACHMENT NO . 2
ATTACHMENT NO . 3
LEGAL DESCRIPTION OF PROJECT
LEGAL DESCRIPTION OF HOME PARCEL
HOME INVESTMENT PARTNERSHIPS PROGRAM
REQUIREMENTS
35 35
35 36
37 37
38 39
39 39
39 40
40 41
41 41
41 41
42 42
42 42
43 43
43 43
43 43
43 44
44 ATTACHMENT NO . 4 CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
REDEVELOPMENT AGENCY OF THE CITY OF CHINO,
CALIFORNIA
487/062212-0041/3132412 7 103/17/98 -iii-
• • GROUND LEASE
THIS GROUND LEASE (this "Lease") is made and entered into this 17th day of March, 1998, by and between the CITY OF CHINO, a municipal corporation ("City"), and CHINO HOUSING INVESTORS, L.P., a California limited partnership ("Lessee").
A. City owns that certain land located in the City of Chino, County of San Bernardino, State of California, more particularly described in Attachment No. 1, attached hereto and incorporated by reference herein (the "Site"). The Site as defined herein does not include any of the Improvements (as hereinafter defined) constructed thereon. The Site is located within the Central City Redevelopment Project Area.
B. The Site has-been improved with a senior citizen rental housing project for low and very low income households consisting of one hundred four (104) units, including two (2) manager's �nits together with a recreation building, two (2} laundry facilities and related amenities ("Improvements") more particularly described in the DDA. The Site and the Improvements are collectively referred to herein as the "Project."
C. Pursuant to a Disposition and Development Agreement by and between the City, the Redevelopment Agency of the City of Chino, a public body, corporate and politic ("Agency") and Lessee, dated March 17, 1998 (the "DDA"}, City desires to lease to Lessee and Lessee desires to lease from the City the Site for the purposes set forth in the DDA. A copy of the DDA is on file in the City Clerk's office. Any capitalized terms not defined herein shall have the meanings ascribed to them in the DDA.
D. City has conveyed ownership of the Improvements to Lessee pursuant to that certain Grant Deed recorded simultaneously with recordation of this Lease in the San Bernardino County Recorder's Office ("Grant Deed").
E. Lessee has executed a Promissory Note in favor of City of even date herewith in the principal amount of THREE HUNDRED THIRTY NINE THOUSAND THREE HUNDRED TWELVE DOLL ARS ($339, 312.00} ("Note"} evidencing a loan from the City to Lessee for a portion of the cost of the Improvements pursuant to the terms of the DDA. Repayment of the Note is secured by (i) a Deed of Trust recorded concurrently with this Lease which encumbers Lessee's leasehold interest hereunder ("Deed of Trust"} and (ii) a UCC-1 financing statement. ' - F. Pursuant to Section 42 of the Internal Revenue Code, California Health and Safety Code Sections 50 199.6-50199.19, California Revenue and Taxation Code Sections 170 57. 5, 170 58, 487/062212--004l/3132412 7 aOJ/17/98
• • 23610.4 and 23610.5 and applicable federal and state regulations, the State of California Tax Credit Allocation Committee {"TCAC") has given a final reservation to Lessee for the issuance of tax credits in an amount equal to TWO HUNDRED EIGHTY-SEVEN THOUSAND EIGHT HUNDRED ELEVEN AND NO/100 DOLLARS {$287,811.00) ( 11 LIHTC 11 ) • Pursuant to TCAC requirements for issuing the tax credits, the Lessee must record a Regulatory Agreement encumbering Lessee's leasehold interest under this Lease ("TCAC Regulatory Agreement").
G. On January 28, 1998, Agency received from the California Debt Limit Allocation Committee ( 11 CDLAC 11 ) an allocation of SIX MILLION FOUR HUNDRED THOUSAND DOLLARS ($6,400,000.00) of multi family housing revenue bonds {"Bonds") for the purpose of loaning the proceeds to Lessee to pay the City a portion of the purchase price for the Improvements and other costs and expenses. Repayment of the Bonds shall be secured by a first priority deed of trust encumbering Lessee's interest in this Lease ( "Bond Deed of Trust") .
Pursuant to the Internal Revenue Code, recordation of a regulatory agreement ("Bond Regulatory Agreement") encumbering Lessee's interest in this Lease will be required.
NOW, THEREFORE, for and in consideration of the mutual
promises contained herein, City and Lessee hereby covenant and agree to the following terms and conditions of this Lease which have been agreed to in good faith.
1. LEASE OF THE SITE. City, for and in consideration of the rents, covenants and agreements hereinafter reserved and contained herein to be paid, kept, performed and observed by Lessee, hereby leases to Lessee and Lessee hereby leases from City the Site.
2. LEASE TERM. The term of this Lease shall commence on the date this Lease is recorded in the Official Records of the San Bernardino County Recorder {the "Commencement Date") and shall continue for a period of fifty-seven {57) years thereafter unless sooner terminated as provided herein.
3.1 Rent - Net Ooerating Income. Lessee will pay to the City Net Operating Income {as hereinafter defined) generated by the Project as rent {"Rent"). The term "Net Operating Income" for any calendar year shall mean {a) eighty-seven percent {87%) of all gross income derived by Lessee from the Project including, without limitation, all rental income paid by or on behalf of tenants, all rental subsidy payments made by governmental agencies to Lessee, and income from any source related to Lessee's leasing and opera tion of-the Project, but excluding any proceeds received by Lessee from an approved sale of its interest in the Project or sale of its partnership interests, proceeds from any loans, refinancing of debt, security deposits from subtenants of the Project and interest thereon {except to the extent retained by Lessee as a result of a default by a subtenant under its lease or otherwise), and partner ship capital contributions; less {b) {i) payment of the installments 487/062212�1/3l32412 7 aOJ/17/98 -2-
• • of principal and interest owing on the Bonds; (ii) all out-of pocket expenses actually and reasonably incurred by Lessee in leas ing, operating, maintaining, and repairing the Project during such year (excluding insurance proceeds and any costs or expenses paid or reimbursed by third parties) including without limitation rea sonable third party costs for accounting fees, audit costs and fees for preparation of tax returns, insurance, taxes, and capital main tenance, improvements and repair expenses for the Project; (iii) the net amount of the reserve for capital repairs and replacements required under Section 8.2 of this Lease; and (iv) any scheduled loan payments for loans permitted by Sections 8.1, 9. 3, 10, 13 or
15.9 of the Ground Lease. Net Operating Income shall be calculated on a cash basis without regard to any carry-over of profit or loss from any prior calendar year . Notwithstanding anything herein to the contrary in no event shall the following expenses be deducted from the income derived by Lessee from the Project: (A) any proper ty management fee, asset management fee or any fee payable to any partner or affiliates of any partner of Lessee; (B) salaries, com pensation, benefits, to any officer, director, employee of Lessee or its general partner; or (c) overhead of Lessee or its general partner, including rent and general office expenses .
3.2 Net Lease . It is the intent of the parties hereto that the rent provided herein shall be net to the City and that Lessee shall pay all costs, taxes, charges and expenses of every kind and nature against the Site and the Improvements which may arise or become due during the term of this Lease (all third party costs and expense reasonable in nature are authorized expenses in calculating Net Operating Income in accordance with Section 3.1 above) . The parties understand and acknowledge that the part of the consideration for this Lease is the performance of the covenants set forth in this Lease and the DDA, including the covenants to rent the units to Eligible Tenants (as hereinafter defined} at Affordable Rents (as hereinafter defined) pursuant to Articles 4 and 5 of this Lease .
3. 3 Payment of Rent . All rent that becomes due and payable pursuant to this Lease shall be paid to the City at the address listed in Section 24 .3 or such other place as the City may from time to time designate by written notice, without notice or demand and without set-off, counter-claim, payment, deferment, suspension or deduction .
4. USE FOR RESIDENTIAL RENTAL SITE . The Lessee hereby agrees that the Project is to be used, leased, managed, and operated as a project for very low and low income senior citizen residential rental purposes for the term of this Lease . To that end, and for the term of this Lease, the Lessee hereby represents, covenants, warrants and agrees as follows:
4.1 Purpose . The Site will be leased to Lessee for the purpose of providing very low and low income senior citizen rental housing, and the Lessee shall lease, manage, maintain and operate the Site to provide very low and low income senior citizen rental 487/062212-0041/3132412 7 aOJ/17/98 -3-
I
• • housing. During the term of this Lease the Project shall be devoted to those uses as set forth in this Lease, the DDA, the TCAC Regulatory Agreement, the Bond Regulatory Agreement-, the Redevelopment Plan and any regulations promulgated pursuant to the HOME Investment Partnerships Program (42 U.S.C. § 12741 et seq.); 24 Code Federal Regulations § 92 et seq.; California Health and Safety Code § 50896 and 25 California Code Regulations § 820 0 et seq. ) which are applicable to the Home Parcel (as defined in Section 4.7 below} Project ("Home Regulations"). In the event of any conflict among said documents, the most restrictive document shall control.
4.2 Residential Use. None of the dwelling units in the
Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium or trailer court or park without the City's prior consent which consent may be given or withheld in its sole and absolute discretion.
4.3 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Lessee 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 City which approval may be given or withheld in its sole and absolute discretion.
4. 4 Preference to Eligible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Lease and the Lessee shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the dwelling units are required to be leased or rented to Eligible Tenants (as hereinafter defined) and except as provided in Section 5.6 below.
4.5 Resident Manager and Staff Units. Two (2), and only two (2), dwelling units in the Project shall be occupied by resident managers. The resident manager units shall be taken from the units reserved for occupancy by Low Income Senior Citizen Tenants (as hereinafter defined).
4. 6 Liability of Lessee. Lessee shall not incur any
liability under this Lease as a result of fraud or intentional misrepresentation by a tenant.
4. 7 HOME Program. Because the source of funds for the
acquisition of the HOME Parcel as more particularly described on Attachment No. "2" attached hereto ( "Home Parcel") was received from the HOME Program, the portion of the Project located on the HOME Parcel must be operated in compliance with all the requirements of the HOME Program and the HOME Agreement, including, but not limited to, those requirements which are summarized in Attachment No. 3 attached hereto and incorporated herein by 487/062212-0041/3132412 7 a03/17/98 -4-
• • reference. In the case of any conflict between the requirements of the HOME Program and the summary included in Attachment No. 3, the HOME Program shall control.
4. 8 No Unlawful Use. Lessee shall not use the Project for any purpose that is in violation of any law, ordinance, regulation or order of any federal, state or local governmental body. In connection therewith, Lessee covenants and agrees that it shall not operate or devote the Project to uses prohibited by the Federal Fair Housing Act and California Civil Code Sections 51. 2-51. 4, the Redevelopment Plan, this Lease, the applicable zoning restrictions and the terms of the DDA. Lessee shall comply with all
requirements imposed upon the-Lessee and the Site by TCAC and the California Debt and Investment Advisory Commission ( "CDIAC"), including without limitation, installation within the Project,· at Lessee's sole cost and expense, any security systems or other improvements which are not installed as of the commencement date of this Lease or provided for in the plans and specifications for the Project which are required for the Project to qualify for the Bonds and/or the LIHTC.
5. OCCUPANCY OF PROJECT BY ELIGIBLE LESSEES.
represents, warrants, and covenants as follows:
5. 1 Definitions.
Lessee hereby
(a) Affordable Low Income Rent. As used in this
Lease, the term "Affordable Low Income Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent as set forth by Health & Safety Code Section 50053, or its successor, which is
currently thirty percent (30%) of sixty percent (60%) of the San Bernardino County Median Income for two (2) persons if a one-bedroom unit, and four (4) persons, if a two-bedroom unit. (b) Affordable Rent. As used in this Lease, the term
"Affordable Rent" shall refer to collectively Affordable Low Income Rent and Affordable Very Low Income Rent.
(c) Affordable Very Low Income Rent. As used in this
Lease, the term "Affordable Very Low Income Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent as set forth by Health & Safety Code Section 50 053, or its successor, which is currently thirty percent (30% ) of fifty percent (50%) of the San Bernardino County Median Income for two (2) persons, if a one-bedroom unit, and four (4) persons, if a two-bedroom unit.
(d) Eligible Tenant. As used in this Lease, the term
"Eligible Tenant" shall refer to' collectively a Low Income Senior Citizen Tenant and a Very Low Income Senior Citizen Tenant who is a United States citizen or qualified alien to the extent required by applicab�e federal or state law, 487/062212-0041/3132412 7 aOJ/17/98 -5-
• • /
including without limitation, the "Personal Responsibility and Work Opportunity Reconciliation Act. " Lessee shall be solely responsible for confirming that each Eligible Tenant is a United States citizen or qualified alien.
(e) Low Income Senior Citizen Tenant. As used in this
Lease, the term "Low Income Senior Citizen Tenant" shall mean those Senior Citizens whose income does not exceed sixty percent (60%) of the San Bernardino County Median Income. (f) San Bernardino County Median Income. For purposes
of this Lease, the "San Bernardino County Median Income" shall be determined by reference to the regulations published by the California Department of Housing and Community Development pursuant to Health and Safety Code Section 50 093, or its successor.
(g) Senior Citizen. For purposes of this Lease, the
term "Senior Citizen" shall mean the person, persons or family with at least one member of the household residing permanently in the unit who is fifty-five (55) years of age or older. (h) Very Low Income Senior Citizen Tenant. As used in
this Lease, the term "Very Low Income Senior Citizen Tenant" shall mean those Senior Citizens whose income does not exceed fifty percent (50 %) of the San Bernardino County Median Income.
5. 2 Occuoancy Levels. Throughout the term of this Lease, not less than seventy (70} of the one-bedroom units in the Project shall be continuously occupied or held vacant and available for occupancy by Low Income Senior Citizen Tenants; not less than eighteen (18) of the one-bedroom units in the Project shall be continuously occupied or held vacant and available for occupancy for Very Low Income Senior Citizen Tenants; not less than thirteen (13} of the two-bedroom units in the Project shall be continuously occupied or held vacant and available for occupancy by Low Income Senior Citizen Tenants; and not less than three (3) of the two bedroom units in the Project shall be continuously occupied or held vacant and available for occupancy by Very Low Income Senior Citizen Tenants.
5. 3 Rental Rates. During the term of this Lease, Lessee hereby agrees to rent those units occupied by Low Income Senior Citizen Tenants at no greater than Affordable Low Income Rent and to rent those units occupied by Very Low Income Senior Citizen Tenants at no greater than Affordable Very Low Income Rent. Lessee further agrees that no more than two (2} persons shall occupy each one-bedroom unit and no more than four (4} persons shall occupy each two-bedroom unit. With respect to the units located on the HOME Parcel, the rental rates charged for said units shall not exceed the rates set forth above or the rents permitted under 24 C. F. R. Section 92. 252, whichever is more restrictive. 487/062212-0041/3132412 7 aOJ/17/98 -6-
• • 5. 4 Occupancy By Eligible Tenant. A unit occupied by a Low Income Senior Citizen Tenant or a Very Low Income Senior Citizen Tenant, as applicable, who, at the commencement of their occupancy is a Low Income Senior Citizen Tenant or a Very Low Income Senior Citizen Tenant, respectively, shall be treated as occupied by a Low Income Senior Citizen Tenant or a Very Low Income Senior Citizen Tenant, respectively, until a recertification of such tenant's income in accordance with Section 5.8 below demonstrates that such tenant no longer qualifies as a Low Income Senior Citizen Tenant or a Very Low Income Senior Citizen Tenant. Moreover, a unit previously occupied by a Low Income Senior Citizen Tenant or a Very Low Income senior Citizen Tenant and then vacated shall be considered occupied by a Low Income Senior Citizen Tenant or a Very Low Income Senior Citizen Tenant, as applicable, until reoccupied, other than for a temporary period, at which time the character of the unit shall be redetermined. In no event shall such temporary period exceed thirty-one {31) days.
5.5 Income Computation Certificate. Immediately prior to an Eligible Tenant's occupancy of a unit, Lessee shall obtain and maintain on file an Income Computation and Certification form {which form shall be approved in advance by the City) from each such Eligible Tenant dated immediately prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition, the Lessee will provide such further information as may be required in the future by the City. Lessee shall use its best efforts to verify that the income provided by an applicant is accurate by taking any of the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; ( iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) obtain other verification of such applicant's income as is satisfactory to the City; or (v) such other information as may be requested by the City. A copy of each such Income Computation and Certification shall be filed with the City prior to the occupancy of a unit by an Eligible Tenant whenever possible, but in no event more than thirty (30 ) days after initial occupancy by said tenant.
5.6 Rental Priority. During the term of this Lease and to the extent permitted by applicable federal, state and local law, ordinance and regulation, Lessee shall use its best efforts to lease vacant units reserved for 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, with highest priority in this category to residents of the City of Chino; (ii) current residents of the City of Chino; and (iii) other persons meeting the eligibility requirements of this Lease. Lessee shall and Agency may maintain a list ( the "Housing List"} of persons who have notified Lessee, Agency and/or City of their desire to rent a unit in the ProJect and who have incomes whi�h would qualify them as an 487/062212-0041/3132412 7 a0J/17/98 -7-
• • Eligible Tenant, and Lessee shall offer to rent units on the above referenced priority basis. Should multiple tenants be equally eligible and qualified to rent a unit, Lessee shall rent available units to Eligible Tenants on a first-come, first-served basis.
During the term of the Bond Regulatory Agreement and/or the HOME Agreement, the provisions of this Section shall not apply to the extent the provisions hereof violate the requirements of the LIHTC regulations and/or the HOME Program.
5. 7 Renting Vacant Uni cs. When a unit becomes available as a result of termination a tenant's lease, Lessee shall rent the unit to an Eligible Tenant in accordance with the following procedure:
(a) Lessee shall rent any vacant unit in the order of
priority as set forth above; and
(b) If after and despite Lessee's best efforts, Lessee
is unable to rent a unit in the Project reserved for a Very Low Income Senior Citizen Tenant, Lessee may rent said unit to a Low Income Senior Citizen Tenant. For the purposes of this Lease, Lessee shall have been deemed to have used his/her best efforts if he/she has advised the City in writing as to the unit's availability and has thereafter offered said unit to all of the qualified persons on the Housing List maintained by Lessee and Agency pursuant to Section 5.6 above. Lessee's obligation to offer the unic to persons on the Agency's Housing List shall be satisfied only if Lessee has offered the unit to all persons on or added to the Housing List on the date of the Lessee's notice of the unit's availability.
5.8 Recertification. Immediately prior to the first
anniversary date of the occupancy of a unit by an Eligible Tenant and on each anniversary date thereafter, Lessee shall recertify the income of such Eligible Tenant by obtaining a completed Income Computation and Certification based upon the current income of each occupant of the unit. In the event the recertification
demonstrates that the household income of a Very Low Income Senior Citizen Tenant exceeds the income at which such household would qualify as a Very Low Income Senior Citizen Tenant, such household will no longer qualify as a Very Low Income Senior Citizen Tenant; provided, however, that the occupant may qualify as a Low Income Senior Citizen Tenant if the occupant satisfies the requirements to be a Low Income Senior Citizen Tenant upon recertification; and, in such event, Lessee shall rent the next available unit of comparable size to a Very Low Income Senior Citizen Tenant so that the Project complies with Section 5.2 to the extent possible. If the occupant's income exceeds the maximum amount which would qualify the occupant as a Low Income Senior Citizen Tenant, then Lessee shall allow such occupant to occupy the unit and the rent shall be the Affordable Low Income Rent and the occupant shall be deemed to be a Low Income Senior Citizen Tenant; provided, however, that if the occupant's income exceeds eignty percent (80%) of the San Bernardino County Median Income, the rent may be set at an amount 487/062212-0041/3132412 7 aOJ/17/98 -8-
• • equal to thirty percent (30%) of the tenant's monthly income as disclosed by the Income Computation and Certification submitted for the applicable year. If the ineligible tenant becomes an Eligible Tenant upon recertification, Lessee shall continue to rent the unit to the Eligible Tenant at the Affordable Rent of the income category that the Eligible Tenant falls within during
recertification. If the income category that the Eligible Tenant falls wittiin during the recertification is different from the income category the Eligible Tenant originally fell within, Lessee shall rent the next available unit to another Eligible Tenant so that the Project complies with Section 5.2 to the extent possible.
Lessee shall provide the City with a copy of each such
recertification with the next submission of Certificate of Continuing Program Compliance pursuant to Section 5.10.
As long as the Bond Regulatory Agreement is in effect, Lessee shall be deemed to satisfy the recertification requirements of this Section by submitting a copy of the CDIAC recertification documents to City so long as the CDIAC recertification documents contain all of the information required in this Section. Upon termination of the Bond Regulatory Agreement the recertification provisions of this Section shall control.
5.9 Certificate of Continuing Program Compliance. On or before September 1 of each year during the term of this Lease commencing with the year the Certificate of Completion is recorded against the Site and Improvements, the Lessee shall annually advise the City of the occupancy of the Project by delivering a Certificate of Continuing Program Compliance in the form attached hereto as Attachment No. 4 stating (i) the dwelling units of the Project which were occupied or deemed occupied pursuant to Section
5. 4 by a Low Income Senior Citizen Tenant or a Very Low Income Senior Citizen Tenant during such period (ii) that each Eligible Tenant is a United States citizen or qualified alien if required by law, and ( iii) that to the knowledge of Lessee either (a) no unremedied default has occurred under this Lease, the (b) a default has occurred, in which event the certificate shall describe the nature of the default and set forth the measures being taken by the Lessee to remedy such default.
As long as the Bond Regulatory Agreement is in effect, Lessee / shall be deemed to satisfy the Certificate of Continuing Program compliance requirements of this Section by submitting a copy of the Certificate of Compliance required by the Bond Regulatory Agreement to City so long as the CDIAC Certificate of Compliance contains all of the information required to be provided pursuant to this Section. Upon termination of the Bond Regulatory Agreement and issuance of the Certificate of Compliance, the provisions of this Section shall control.
5 .10 _ Maintenance of Records. Lessee shall maintain complete and accurate records pertaining to the units, and shall permit any duly authorized representative of the City or Agency during normal business hours to inspect the books and records of Lessee 487/062212-0041/3l32412 7 a0J/17/98 -9-
• • pertaining to the ProJect including, but not limited to, those records pertaining to the occupancy of the dwelling units. At the time each rent payment is due hereunder, City shall require that Lessee provide a full accounting to City and Agency of the amount of Net Operating Income for the preceding year. Lessee shall maintain full, complete, accurate, and auditable books, records, and accounts of Net Operating Income and the reserve accounts as set forth in Section 8.2 for a period of four (4} years unless a dispute exists as to such records in which event Lessee shall retain such records until the dispute is resolved. City and Agency shall have the right at reasonable times upon request, to examine and inspect all of the books and records of Lessee for the purpose of investigating and verifying the accuracy of any payment by Lessee which is based upon the calculation of Net Operating Income and all items upon which Net Operating Income is calculated. City or Agency may cause an audit of Lessee's books and records to be made.by an accountant of their selection and if the statement of Net Operating Income shall be found to be under-reported, then and in that event, there shall be an adjustment and Lessee shall pay on demand such sums as may be necessary to settle in full the accurate amount that should have been paid covered by such inaccurate statement and payment.
5 .11 Leases. Each lease with an Eligible Tenant shall
contain a provision to the effect that Lessee has relied on the income certification and supporting infonnation 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. All leases entered into with respect to the HOME Parcel shall comply with the HOME Program, including 24 C.F.R. Section
92.253.
5.12 Conflicts. The provision(s) set forth in this Lease shall apply only in the event, and to the extent, such provisions are not in conflict with Internal Revenue Code provisions, IRS regulations, the Low Income Tax Credit Program, the TCAC Regulatory Agreement or the Bond Regulatory Agreement. In the event of any conflict the most restrictive provisions of the above referenced restrictions shall control.
6. UTILITIES AND TAXES.
6.1 Utilities. Lessee shall pay or cause to be paid all charges for gas, electricity, water, sewer, garbage collection, cable television, and other utilities furnished to the Site and the Improvements and all sewer use charges, hookup or similar charges or assessments for utilities levied against the Site and the Improvements for any period included within the term of this Lease.
6.2 Real Estate Taxes.
(a) As used herein, the term II real estate taxes" shall mean all real estate taxes, assessments, municipal or county 487/062212--0041/3132412 7 aOJ/17/98 -10-
• • .J
water and sewer rates and charges, or any other assessments or taxes which shall be levied against the Site, or the
Improvements, or any interest therein, whether general, special, ordinary or extraordinary and any license fee, commercial rental tax, improvement bond or bonds, levy or tax imposed on the Site or the Improvements by any authority having the direct or indirect power to tax, including any legal or equitable interest of City in the Site, against City's right to rent or other income therefrom or against City's business of leasing the Site. The term "real estate taxes" shall also include any tax, fee, levy, assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy, assessment or change hereinabove included within the definition of real estate taxes; (ii) the nature of which•. was hereinbefore included within the definition of real estate taxes; (iii) which is imposed for a service or right not charged prior to June 1, 19 78 or, if previously charged, has been increased since June 1, 1978; (iv) which is imposed as a result of a transfer, either partial or total, of City's interest in the Site or which is added to a tax or charge hereinbefore included within the definition of real estate taxes by reason of such transfer; or (v) which is imposed by reason of this Lease, any modification or changes thereto, or any transfers thereof.
(b) Lessee shall pay prior to delinquency all real
estate taxes levied against the Site or the Improvements during the term of this Lease. Any real estate taxes which are payable by Lessee hereunder shall be prorated between City and Lessee as of the Commencement Date and then again at the expiration or earlier termination of the term of this Lease.
If Lessee shall fail to pay any such taxes, City shall have the right to pay the same, in which case Lessee shall repay such amount to City upon demand together with interest at the maximum non-usurious rate permitted by law.
(c) Lessee shall have the right to contest the amount
or validity of any real estate taxes, in whole or in part, by appropriate administrative and legal proceedings, without any costs or expense to City, and Lessee may postpone payment of any such contested real estate taxes pending the prosecution of such proceedings and any appeals so long as such
proceedings shall operate to prevent the collection of such real estate taxes and the sale of the Site to satisfy any lien arising out of the nonpayment of the same, and Lessee
furnishes a bond to City securing the payment of the same in the event a decision in such contest shall be adverse to Lessee.
6.3 Personal Property Taxes. Lessee covenants and agrees to pay before delinquency all personal property taxes, assessments and liens of every kind and nature upon all personalty as may be from time to time situated within the Site.
487/062212-0041/3132412 7 aOJ/17/98 -11-
• • 6. 4 Possessory Interest Taxes . Pursuant to Health and Safety Code Section 33673 or its successor, the Project is required to be assessed and taxed in the same manner as privately owned property . City shall provide notice to the San Bernardino Assessor within thirty ( 3 O) days of the commencement of this Lease as required by Health and Safety Code Section 33673 .1. Lessee shall pay or cause to be paid, before any fine, penalty, interest or cost may be added thereto for the nonpayment thereof, all real estate taxes which may be levied against any and all interests in the Site and Improvements during the term of this Lease, and not merely the assessed value of the leasehold interest in the Site; provided, however, that Lessee may apply for and receive any applicable exemption from the payment of property taxes and assessments .
Pursuant to the provisions of the California Revenue and Taxation Code, City hereby provides notice to Lessee that Lessee' s leasehold interest created by this Lease may result in a possessory interest tax being levied against Lessee, and that in such event Lessee shall be obligated to pay such tax.
7. OWNERSHIP OF IMPROVEMENTS. FIXTURES AND FURNISHINGS . 7 .1 Ownership During Term . Pursuant to the Grant Deed, all Improvements shall, during the term of this Lease, be and remain the property of Lessee; provided, however, that Lessee shall have no right to waste the Improvements, or to destroy, demolish or remove the Improvements except as otherwise permitted pursuant to this Lease; and provided further that Lessee' s rights and powers with respect to the Improvements are subject to the terms and limitations of this Lease a�d the Grant Deed . City and Lessee covenant for themselves and all persons claiming under or through them that all the Improvements located on the Site are real property .
7. 2 Ownership at Termination . As set forth in the Grant Deed, upon the termination of this Lease, whether by expiration or otherwise, all Improvements, fixtures, equipment and furnishings now or hereafter located on the Site and used in connection with the operation of the Project shall, without compensation to Lessee, automatically revert to City and then become the City's sole property, free and clear of all liens, encumbrances, and claims to or against them by Lessee or any third person, firm or entity, including but not limited to any mortgagee or lender .
8. MAINTENANCE.
8 .1 Lessee to Maintain Site . Lessee acknowledges, pursuant to Section 3. 8 of the ODA, the Site is being leased to Lessee in its "AS-IS" condition . Lessee agrees to assume full responsibility for the management, operation and maintenance of the Improvements and all fixtures, equipment, furnishings and personal property located on the Site throughout the term of this Lease without expense to City. As the Lessee is the owner of the Improvements until expiration of this Lease, Lessee shall, at its sole cost and expense, perform all repairs, alterations and replacements 487/062212-0041/3132412 7 003/17/98 -12-
• • neces sary to mainta in and preserve the Improvements and al l fixtures, equipment, furnis hings and personal property located on the Site in a first -class condition reasonably satisf actory to the Cit y and in compl iance with all appl icable laws, ordinances and regulations. Less ee agrees that City shal l not be required to perfonn any maintenance, repairs, alterations or services (whether structural or nonstructural, ordi nary or extraordinary, foreseen or unforeseen and whether required by law or regula tion) or to assum e any expense in connection with the Improvements or the Site, except for any maintenance or repairs necessi tated by the actions of City or its officers, agents or employees and except as otherwise provided in thi s Lease. If during the first fifteen (15) years of the Lease tenn, the costs for maintenance and/or alterations to the Project due to any newly enacted governmental or quas i- governmental laws, regulations, codes and ordinances appl icable to the Project exceed the sum of the (i) Net Operating Income from the Project and (ii) the Operating Reserve and the Capital Replacement Reserve (as defined below) , Les see shal l use its commercial ly reasonably efforts to obtain a non -recourse loan on tenns acceptable to Lessee and may encumber its leasehold interest hereunder as security for such loan in accordance with Section 18. 1. If Less ee, despite its commercial ly reasonable efforts, cannot obtain such a loan or cannot make the improvements required by newly enacted governmental regulations because the cost exceeds the sum of the (i) Net Operating Income from the Project and (ii) the Operating Reserve and Capital Replacement Reserve (as defined below), City shal l not have the right to tennin ate this Lease during the first fi fteen (15) years of the tenn for fai lure to obtain such a loan, but Les see shal l retain the right to pursue al l other rights and remedies availa ble under the law. Less ee hereby waives al l rights to make repairs or to cause any work to be performed at the expense of the City as provided in Sections 1941 and 1942 of the Cal ifornia Civil Code. Less ee shall manage and maintain the Improvements in confonnity with the requirements of the Munic ipal Code of the City of Chino. The foll owing standards shal l be compl ied with by Lessee and its maintenance staff, contractors or subcontractors :
(a) Les see shal l maintain the Improvements, inclu ding individ ual dwelli ng units, al l common areas, all interior and exterior facades, and al l exterior project si te areas in a safe and sanitary fashion suitable for a senior citi zen hous ing project. Lessee agrees to provide util ity serv ices, adminis trative serv ices, suppl ies, contract servi ces, maintenance, maintenance reserves, capital repl acement reserves and management for the entire Site and Improvements, includin g both interior tenant spaces, common area spaces and exterior common areas and publ ic rights -o f- way.
(b) , Landscape maintenance shal l include, but not be
li mited to, watering/irri gation ; ferti li zation, mowing, edging and trimm ing of gras s; tree and shrub pruning ; trimmin g and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road condit ions and vis ibil ity, and optimum irrigation coverage; replacement, as needed, of al l 487/062212-0041/313 2412 7 a0J/17 /98 -1 3 -
• • plant materials; control of weeds in all planters, shrubs, lawns, ground covers or other planted areas; and staking for support of trees.
(c) Clean-up maintenance shall incl ude, but not be
limited to, maintenance of all private paths, parking areas, driveways and other paved areas in a clean and weed-free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from
Improvements and la ndscaping prior to mowing; cl earance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by waintenance workers.
(d) The Improvements shall be maintained in a first
class condition.
(e) All maintenance work shal l conform to all
applicable federal and state Occupational Safety and Health Act standards and regulations for the performance of
maintenance.
(f) Any and all chemicals, unhealthful substances and
pesticides used in and during maintenance shall be applied only by persons possessing valid California applicator's licenses and in strict accordance with all governing
regulations.
(g) Parking lots, lighting, trash enclosures and all
areas which can be seen from adjacent streets shal l be kept free from any accumulation of debris or waste material by regular schedul ed maintenance.
8. 2 Reserve Accounts.
(a) The calendar year foll owing the year in which the
Project reaches ninety percent (90%) occupancy, Lessee shall set aside from income in a separate interest-bearing trust account on an annual basis an amount equal to three percent (3%) of the annual expenses actually incurred by Lessee in leasing, operating, maintaining and repairing the Project (excludin g attorneys' fees and any costs or expenses paid or reimbursed by third parties), including, without limitation, insurance, taxes, maintenance and repair expenses {" Operating Reserve") . On not less than an annual basis, Lessee shall provide City and Agency evidence reasonably satisfactory to the City Manager of compliance with this Section. The
Operating Reserve shall only be used to cover shortfal ls between income generated from the Project and actual operating expenses, including debt service permitted by this Lease. In no event shall the funds in the Operating Reserve exceed the lesser of: (i) One Hundred Thousand Dollars ($100, 000. 00) ; or 487/06'2'212-00H/313 2412 7 aOJ/17/98 - 14-
• • ( ii) the amount of operating expenses necessary to operate the Project for ninety (90) days (based upon the previous year's operating expenses). On or before the Commencement Date as set forth in Section 2 above, Lessee shall deposit the sum of Forty Thousand Dollars ($ 40 , 000. 00) to pre- fund the Operating Reserve (" Pre- funded Reserve" ). On the first calendar year following the Commencement Date, Lessee shall pay to City as additional rent the difference between the Pre-funded Reserves and the amount that Lessee would have been required to fund into the Operating Reserve during the first Lease year. All funds in the Operating Reserve shall not be commingled with any other funds. No funds may be withdrawn from the Operating Reserve without the signature of the Agency which shall not be unreasonably withheld.
(b) Lessee shall annually set aside from income the
sum of TWO HUNDRED DOLLARS ($200. 00) per unit located on the Project into a separate interest-b earing trust account (the "Capital Replacement Reserve"). Funds in the Capital
Replacement Reserve shall only be used to make capital
replacements (as opposed to ordinary repair and maintenance) of the Improvements, fixtures and equipment located on the Site which are normally capitalized under generally accepted accounting principles. The nonavailability of funds in the Capital Replacement Reserve does not in any manner ' relieve Lessee of the obligation to undertake necessary capital repairs and Improvements and to continue to maintain the Project in the manner prescribed in this Section. Funds in the Capital Replacement Reserve shall not be commingled with any other funds. No funds may be withdrawn from the Capital Replacement Reserve without the signature of the Agency which shall not be unreasonably withheld.
(c) Lessee, at its expense, shall submit to the City
and Agency on an annual basis an accounting for the reserve accounts in a form and content reasonably satisfactory to Agency certified by Lessee to be true and correct, setting forth, at a minimum, the following (i) the balance of the funds in each of the reserve accounts at the beginning of said calendar year; (ii) the amount of funds deposited into each of the reserve accounts, together with an itemization of how each of such amounts were calculated; (iii) the amount of funds ,w ithdrawn from the each of the reserve accounts, together with an itemization of the uses of said funds; and (iv) the balance of the funds in each of the reserve accounts as of the end of said calendar year. In addition, Lessee shall submit to the Agency such other information as may be reasonably requested by Agency from time to time.
8. 3 City Right to Repair. In the event that Lessee
breaches any of the covenants contained in this Section 8.1 and such default continues for a period of thirty (30 ) days after written notice from City to Lessee, then City, in add ition to whatever other remedy it may have at law or in equity, shall have 487/062212-0041/31 32412 7 a03/17/98 - 15-
• the right to enter upon the Proj ect and perform or cause to be performed al l such acts and work necessary to cure the default.
Pursuant to such right of entry, City shall be permitted (but are not required) 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. Lessee shall reimburse City upon demand for the expenditures aris ing from such acts and work of protection, maintenance , and preservation by City , incl uding a fifteen percent (15%) administrative charge. Any amounts expended by City hereunder shal l bear interest at the maximum non-usurious rate permitted by law.
9. MANAGEMENT .
9.1 Approval of On- Site Manager. The City Manager shall approve, in writing , the property manager of the Project in his or her sole and absolute discretion ("Manager"). City hereby initially approves of : (i) KBMH Property Management , Inc. , a California corporation ("KBMH") , or an affiliate as the Manager ; and (ii) Insignia Residential Group of California , Inc. , a California corporation , as the sub-manager for the Project.
9. 2 Gross Mismanagement. In the event of "Gross
Mismanagement" (as that term is defined below) of the Project , City shal l deliver written notice to Lessee and Manager and may demand that such Gross Mismanagement cease immediately. City may immediately demand that Lessee terminate and repl ace the Manager in the event that Manager does not cure such act of "Gross Mismanagement" within thirty (30) days of the date of such notice , or in the event that such default cannot reasonably be cured within thirty ( 30) days , (but is capable of being cured by Manager) , Manager commences to cure the default within ten (10) days of delivery of such notice and diligently and in good faith continues to cure the default until completion , but in no event shal l Manager have more than one hundred twenty (120 ) days after Manager receives written notice thereof from City to cure any default. For purposes of this Lease the term "Gross Mismanagement" shal l mean management ,of the Project in a manner which materiall y viol ates the terms and/or intention of this Lease to operate a senior citizen affordable housing comple x of a first-c lass standard , and shal l include , but is not limited to, the fol lowing :
{a) Knowingly leasing to ineligible tenants or tenants
whose income�exceeds the prescribed levels ;
{b) Knowingly allo wing the tenants to exceed the
prescribed occupancy levels without taking immediate steps to stop such overcrowding ;
{c) Fail ing to timely maintain the Project in the
manner required by this Lease or failing to submit materiall y complete reports ;
487/062212-0041/3 132412 7 a03/1 7/98 - 16-
• • (d) Fail ing to timely submit the reports as required by this Lease, by the HOME Program, by the TCAC Regulatory Agreement or by the Bond Regulatory Agreement;
(e) Fraud in connection with any document or
representa tion relati ng to this Lease or embezzle ment of ProJ ect monies (excludin g embezz lement by an empl oyee of Manager which is not immediately reimbursed to City by Manager through insurance or bond proceeds); and
(f) Committi ng a material default under the terms of
the Conditional Use Pennit 96 -1 2, dated June 3, 199 6 issued for the Premises by the City.
9.3 Security. Lessee agrees, at its sole cost and expense, to use its best efforts to maintain a crime-free environment on the Project. In connection therewith, Lessee shal l employ such security measures incl uding, if necessary, private security, as is reasonable necessary to maintain a crime-f ree environment. If the City reasonably determines that Lessee is not taking adequate security measures at the Project, City shall so notify Lessee and provide Lessee with a reasonable time, but not less than thirty (30) days, to take additional security measures. If during the first fifteen (15) years of the Lease term, the costs for providing security for the Project exceed the sum of (i) the Net Operating Income from the Project and (ii) the Operating Reserve and Capital Replacement Reserve (as defined above), Lessee shall use its commercially reasonably efforts to obtain a non - recourse loan on terms acceptable to Lessee and may encumber its leasehold interest hereunder as security for such loan in accordance with Section 18 .1 below. If Lessee, despite its commercially reasonable efforts, cannot obtain such a loan, City shall not-- have the right to terminate this Lease during the first fifteen (15) years of the term for failure to obtain such a loan or cannot employ security measures because the cost exceeds the sum of (i) the Net Operating Income from the Project and (ii) the Operating Reserve and Capital Replacement Reserve (as defined above), but Lessee shall retain the right to pursue all other rights and remedies availa ble under the law. If after expirat ion of such reasonable time, Lessee has failed to take additional security measures reasonably satisfactory to the City, the City may provide private security officer services and/or police officers to patrol the Project at Lessee 's expense.
Lessee shall reimburse City upon demand for the expenditures arising from such addit ional security, including a fifteen percent (1 5%) administrative charge . Any amounts expended by City hereunder shall bear interest at the maximum non-usurious rate permitted by law.
10. COMPLIANCE WITH LAWS. Lessee agrees to comply and secure compliance with all the requirements now in force, or which may hereafter be in force , of all local , state and federal laws , ordinance, regulat ions and orders pertai ning to the Site, the Improvements and the operations conducted thereon . The judgment of any court of competent jurisdict ion or the admission of Lessee, 487/062212-0041/ 3132412 7 a03/l 7/98 -1 7-
• failed to use best efforts to cause a sublessee to correct , or any sublessee or permittee in any action or proceeding against them or any of them (wheth er the City be a party thereto or not) that Lessee, a subl essee or permittee has violated any such ordinance or statute in the use of the Project shall be concl usive of the fact as between City and Lessee or such sublessee or permitte e. Les see shall indemnify City against all actions , claims or damages by reason of Lessee 's failur e to perform the terms hereof or Lessee 's non-observance or non -performance of any sta tute , ordinance , order , law, regulation and such governmental requi rements . Except as otherwise specifically provided elsew here in this Lease and except as may be caused by City or its officers, empl oyees or agents , City shall have no obligation to make any repairs or alterati ons (whether structural or nons tructural, foreseen or unforeseen , ordinary or extraordinary) which may be necessary for the Site or the Improvements to comply with said requirements. If during the first fifteen (1 5) years of the Lease term, the costs imposed upon Lessee for complying with any newly enacted governmental or quasi governmental laws , regulat ions, codes and ordi nances applicable to the Proj ect exceed the sum of the Net Operating Income from the Project and the Operating Reserve and Capital Replacement Reserve (as defined above) , Lessee shall use its commerciall y reasonably efforts to, obtain a non-recourse loan on terms acceptable to Lessee and may encumber its leasehold interest hereunder as securi ty for such loan in accordance with Section 18.1. If Lessee, despite its commercially reasonable efforts , cannot obtain such a loan or cannot comply wit h newly enacted laws because the cost exceeds the sum of the Net Operating Income from the Proj ect and the Operating Reserve and Capital Replacement Reserve (as defined above) , City shall not have the right to terminate this Lease during the first fifteen (15) years of the term for failure to obtain such a loan , but Lessee shall retain the right to pursue all other rights and remedies available under the law.
11. INDEMNIFICATION . Lesse e , as a material part of the consideration to be rendered to City under this Lease, hereby waives all claims against City for damage to the Improvements, equipment fixtures , furnishings and other personal property , in , upon or about the Proj ect and for injuries to persons in or about the Site and the Improvements , from any cause arising at any time unless caused by the gross negligence or wil lful misconduct of City or its officers, agents or employees . Lessee agrees to indemnify and defend the City , its officers , agents and employees against , and will hold and save them and each of them harmless from , any and all actions , suits , cla ims, damages to persons or property, losses , costs (including attorneys' fees) , penalties , obligations , errors , omissions or li abilities, (herein "claims or liabilities") that may be asserted or claimed by any person , firm or entity arising out of or in connection with the negligent performance of the work , operations or activities of Lessee, its agents, employees, subcont ractor s, subles sees or invitees or arising from the use of the Project by Lessee or its agents , employees , subcontractors , sublessees or invit ees, or arising from the fail ure of Lessee to keep the Project in first class condition and repair, as herein 487/062212-0041/ 313 2412 7 a0J/17 /98 -18-
• • provided, or arising from the acts or omissions of Lessee hereunder, or arising from Lessee's performance of or failure to perform any term , provision covenant or condition of this Lease, except to the extent such claims or liabilities arise from the gross negligence or willful misconduct of the City.
12. INSURANCE.
12 .1 Duty to Procure Insurance . Lessee covenants and agrees that from the Commencement Date until the termination of this Lease, Lessee 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 Lessee and City, and shall provide City evidence reasonably acceptable to City's City Manager, insurance policies meeting the minimum requirements set forth below :
(a) Comprehensive General Liability insurance in an
amount not less than Five Million Dollars ($5 ,000,000), per occurrence, protecting against loss from liability for damages on account of bodily inj ury, property damage, advertising inj ury or personal inj ury, including death therefrom, and products and completed operations suffered or alleged to be suffered by any person or persons whomsoever on or about the Site and the Improvements, or in connection with the operation thereof, resulting directly or indirectly from any acts or activities of Lessee or its sublessees, or any person acting "for Lessee, or under their respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Site and the Improvements, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Lessee of its sublessees, or any person acting for Lessee, or under their respective control or direction. Such property damage and personal inj ury insurance shall also provide for and protect against incurring any legal cost in defending claims for alleged loss. The required amount of insurance shall be subj ect to increases as the Risk Manager of the City may reasonably require from time to time, but not more frequently than every thirty -six (3 6) months.
Lessee agrees that provisions of this paragraph as to
maintenance of insurance shall not be construed as limiting in any way the extent to which Lessee may be held responsible for the payment of damages to persons or property resulting from Lessee 's activities, activities of its sublessees or the activities of any other person or persons for which Lessee is otherwise responsible . If such insurance is written on more than one policy, each policy shall "follow form " through all layers of coverage and excess coverage shall be at least as broad as primary coverage.
(b) With respect to the Improvements and any fixtures,
equipment and furnishings and personal property owned by Lessee on the Site, "All Risk" Property Insurance protecting against fire, extended coverage, vandalism, and malicious mis- 4871062212-0041/3132412 7 aOJ/17/98 - 19-
• • chief, and such other additio nal perils, haza rds, and ris ks as now are or may be included in the standard "a ll ris k " form in general use in San Bernardino County, California, in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policie s shall include coverage for earthquake to the extent that such insurance is commercially available. Ci ty shall be a loss payee under such policy or polic ies and such insurance shall contain a replacement cost endorsement. The foregoing policy shall also contain endorsements provid ing for
demolitio n costs and contingent li abili ty from the operation of buildin g code changes.
(c ) Use and occupancy or business interruption or
rental income insurance against the perils of fir e, lighting, vandalism, malicious mischief, and such other perils
ordinarily included in extended coverage fir e insurance policie s, in an amount equal to not less than twelve (12) months ' gross rental income payable to Lessee from tenants on the Project, assuming one hundred percent (100%) occupancy.
Such coverage shall provide for payment as long as the
Premises are deemed untenantable by tenants or members of the public.
(d) Workers ' compensation insurance issued by a
responsible carrier authoriz ed under the laws of the State of Calif ornia to insure employers aga inst liabi lity for compensation under the workers' compensatio n laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers' compensation insurance shall cover all persons employed by Lessee in connection with the Site and the Improvements and shall cover full liabilit y for compensatio n under any such act aforesaid, based upon death or bodily injury claims made by, for on behalf of any person incurring or suffering injury or death in connection with the Site or the Improvements or the operation thereof by Lessee. In addit ion, a policy of
Employer's Liabilit y Insurance in an amount not less than One Million Dollars ($1,000,000) per acci dent for bodily injury or disease.
(e) All policie s of insurance required to be carried
by Lessee shall be written by responsible and solvent
insurance companies li censed in the State of Califor nia and • having a policyholder's rating of A or better, in the most recent addit ion of "Best 's Key Rating Guide -- Property and Casualty. 11 A copy of each paid-up policy evidencing such insurance (appropriately authenticated by the insurer) or a certific ate of the insurer, certifying that such policy has been issued, providing the coverage required here in, and contain ing the provisio ns specifie d herein, shall be delivered to Cit y prior to the Commencement Date and thereafter, upon renewals, not less than thirty (30) days prio r to the
expiration of coverage. Cit y may , at any tim e, and from tim e 487/062212.()()4l/3132412 7 aOJ/17/98 -20-
• • to time , inspect and/or copy any and all insurance polic ies requir ed to be procured by Lessee hereunder . In no event shall the limits of any policy be considered as limit ing the liability of Lessee hereunder .
(f ) Each insurance policy required to be carried by
Lessee pursuant to this Lease shall contain the following , endorsements , provi � ions or clauses :
(i ) The insurer will not cancel or materially
alter the coverage provided by such policy in a manner
adverse to the interest of the insured without fi rst
giv ing City a minimum of thirty (30) days prior written notice by certif ied mail , return receipt requested .
(i i) A waiver by the insurer of any right to
subrogation against City , its agents , employees , or
representatives , which arises or might arise by reason of any payment under such policy or policie s or by
reason of any act or omission of Cit y , its agents ,
of f ice rs , members, of f icia ls , employees , or representa tives.
(i ii) The City , Agency , 'their respective agents ,
of f icers , members, off icials , employees , volunteers , and representat ives shall be named insureds on the
Commercial General Liability polic ies .
(i v) The City and Agency shall be loss payees
on the All Risk Property insurance policie s .
(v) Coverage provided by these policies shall
be primary and non-contributory to any insurance
carried by the City , Agency, and their respective
off icers , off icia ls, employees , volunteers , agents, or representatives .
(vi ) Failure to comply with reporting
provisions shall not affe ct coverage provided to City , Agency , their of ficers , employees , volunteers , agents , or representatives .
(vii ) Deductibles or self - insured retentions in
excess of Ten Thousand Dollars ($10 ,0 00 ) shall be
approved by Cit y in writin g.
12 . 2 Failu re to Procure Insurance . If Lessee fail s to procure and maintain the above - required insurance despite its avail abil ity , then City, in additio n to any other remedy which City may have hereunder for Lessee's fail ure 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, aft er thirty (30 ) days written notice to Lessee , procure such insurance and pay the premiums therefo r , in which event Lessee shall innnediately 487/062212--0041/3132412 7 a03/l 7/98 -2 1-
• • repay City al l sums so paid by City together with interest thereon at the maximum non- usurious rate permitted by law.
12. 3 Insurance Proceeds Resulting From Loss or Damage to Improvements. Al l proceeds of insurance with respect to loss or damage to the Improvements during the term of this Lease shal l be payable, under the provisions of the policy of insurance, to City or, if required by the terms of a Leasehold Mortgage (as hereinafter defined), to the Lienholder (as hereinafter defined), and said proceeds shal l constitute a trust fund to be used for the restoration, repair and rebuilding of the Improvements in accordance with Article 13 below.
13. DAMAGE OR DESTRUCTION. As the Lessee is the owner of the Improvements until expiration of this Lease, in the event the whole or any part of the Improvements shall be damaged or destroyed by fire or other casualty, dam.age or action of the elements, at any time during the term of this Lease, Lessee shall with al l diligence, at Lessee 's sole cost and expense, repair, restore and rebuild the Improvements on the same plan and design as existed immediately prior to such damage or destruction and to the same condition that existed immediately prior to such damage. In the event of any restoration or reconstruction pursuant to this Section, City agrees to release the insurance proceeds available in consequence of such damage as Lessee 's restoration and reconstruction progresses, subject only to City's approval of normal architect's certificates, mechanics lien waivers and other reasonable and customary construction disbursement documentation.
Prior to any such restoration and reconstruction as herein provided, the drawings and specifications therefor shal l be submitted to the City and any other necessary parties for their approval. City agrees that its approval of such drawings and specifications wil l not be unreasonably withheld. Al l such work performed by Lessee shal l be constructed in a good and workmanlike manner according to and in conformance with the laws, rules and regulations of all governmental bodies and agencies and based upon the original plans and specifications for the Project. The rental and other charges payable hereunder shal l neither abate nor be reduced by reason of any such casualty damage. During any period of repair, Lessee shal l continue, or cause the continuation of, the operation of the senior citizen apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. If during the first fifteen (15) years of the Lease term, the cost to rebuild or repair the Improvements exceeds the sum of (i) the Net Operating Income from the Project ; (ii) any available insurance proceeds, and (iii) the Operating Reserve and Capital Replacement Reserve (as defined above), Lessee shall use its commercially reasonably efforts to obtain a non -recourse loan on terms acceptable to Lessee and may encumber its leasehold interest hereunder as security for such loan in accordance with Section 18 .1. If Lessee, despite its commercial ly reasonable efforts, cannot obtain such a loan or cannot rebuild because the costs exceed the sum of (i) the Net Operating Income from the Project; (11) any available insurance proceeds, and (iii) the 41!7/062212-0041/ 3132412 7 a03/l7/9S - 22-
• Operati ng Reserve and the Capi tal Replacement Reserve (a s defined above) , City shall not have the right to termina te this Lease during the first fifte en {1 5) years of the term for failure to obtain such a loan , but Les see shall retain the right to pursue all other rights and remedies available under the law; provided , however, that in the event that ins urance proceeds for repair and recons truct ion are avai lable but Lessee cannot rebuild as set forth above, Lessee shall use all available ins urance proceeds to rebuild the Improvements to greates t extent possi ble. Notw it hs tanding anythin g herein to the contrary, Lessee shall be required to clear all debris from the Site and place the Si te in a safe condit ion. 14 . EMINENT DOMAIN .
14.1 Condemnat ion. In the event that the Site and/or the Improvements or any part thereof shall be taken for public purposes by condemnat ion as a result of any act ion or proceeding in eminent domain , then , as between Cit y and Les see (or Lie nholder, if a Permit ted Encumbrance is then in effect) , the interes ts of City and Lessee (or Lienholder) in the award and the effect of the taking upon this Lease shall be as follows :
(a ) In the event of such taking of only a part of the
Si te , leaving the remainder of the Site in such locati on and in such form , shape and si ze as to be used effecti vely and practic ably for the conduct thereon of the uses permitt ed hereunder, this Lease shall terminate and end as to the port ion of the Site so taken as of the date title to such portio n ves ts in the condemning authority, but shall conti nue in full force and effect as to the port ion of the Site not so taken. The rental required by this Lease to be paid by Les see to City shall not be reduced as a result of such tak ing. (b) In the event of taking of only a part of the Sit e , leaving the remainder of the Site in such locat ion , or in such form , shape or reduced si ze as to render the same not effectiv ely and practi cably usable for the conduct thereon of the uses permitt ed hereunder, this Lease and all right , ti tle and interes t thereunder shall cease on the date tit le to the Site or the port ion thereof so taken ves ts in the condemning authori ty.
(c ) In the event the entire Site is taken , this Lease and all of the right , ti tle and interes t thereunder , shall cease on the date ti tle to the Site so taken ves ts in the condemning authori ty.
(d) Promptly after a partia l taking , at Les see's
expense and in the manner specified in provis ions of this Lease related to maint enance , repairs , alterat ions , Les see shall res tore the Improvements so as to place them in a condit ion suita ble for the uses and purposes for which the Sit e was leased.
487/062212-0041/3132 412 7 aOJ/17/98 - 2 3 -
• 14 .2 Allocat ion of the Award . In the event that an award is made for an enti re or partial taking or for damage to the Site, the Improvemen ts or any inte rest the rein in any act �on in direct or inverse condemnation or in the event of a taking under the power of eminent domain, the parties heret o agree tha t their respective rights to the award or compensa tion paid shall be as follows:
(a) Ci ty shall be entitled to tha t portion of the
award received for damage to or the taking of the, _Land . (b) Lessee shall be entitle d to that portion of the
award received for damages to or the taking of the
Improvements on the Site and to any award that may be made for the taking of or injury to Lessee 's business and profits or on account of any/ cost or loss Lessee may susta in in the removal of its fixtures, equipment and furnishings from the Site ; provided, however, that with respect to any taking or award occurring during the last ten (10) years of the ter m of this Lease, any such award received for the taking of or damages to the Improvements shall be prorate d be twee n City and Lessee based on the ratio be tween the number of years and partial years remaining in the term of the Lease to the number 10 . (c) Any inter est payable on the total award shall be
divided be tween City and Lessee in the same ratio as are the awards granted to them pursuant to the other provisions of this paragraph .
(d) Lessee shall not be entitle d to any portion of the award on the basis that Lessee 's inter est in the Lease has a bonus value (i .e. that the fair rental value of the Si te for all or any portion of the remainder of the term her eof exce eds the rental reser ved under this Lease for such period). Lessee acknowledges that all rent due to the City is contingent on Net Operating Income from the Project as set forth in Section
3. 2 above in order to encourage the dev elopment of a senior citizen housing project on the Site and Lessee shall not be entitled to any portion of the award resulting from said reduced rental obligations .
14 . 3 City or Agency Condemnation . Notwi thstanding anything to the contrary in Section 14.2 above, in the event tha t the City or Agency condemns Lessee 's leasehold inte res t he reunder during the first fift een (15) years of the Lease term , Lessee shall be enti tled to receive the greater of: (i) Less ee 's por tion of the award calculated under Sec tion 14 .2; or {ii) the recaptured the amount of the loss of the LIHTC plus any applicable penalties . 14 .4 Transfer in Lieu of Condemnat ion . Notwiths tanding the foregoing provisions of this Sec tion, City may, in its discre tion and without aff ecting the validity and existence of this Lease, transfer City 's inter ests in the Project in lieu of condemnation to any authority entitle d to exer cise the power of eminent domain . In the even t of such transfer by City, Lessee (or Lienholder if a 487/062212-0041/3132412 7 aOJ/17/98 - 24 -
• • Permitted Encumbrance is then in effect) and City shall retain whatever rights they may have to recover from said authority the amounts set forth above from the condemnin g authori ty.
15. ENVI RONMENTAL MATTERS .
15 .1 Definit ions. For the purposes of this Section, unless the context otherwise specifies or requi res, the following terms shall have the meanings herein specified:
\
(a) The term "Hazardous Materials" shall mean any
substance, material, or waste which is or becomes regulated by any local governmental authority, the County of San
Bernardino, the State of California, regional governmental authority or the United States Government, including, but not limited to, any material or substance which is (i) defi ned as a "hazardous waste, 11 "extremely hazardous waste, 11 or "restricted hazardous waste" under Section 25 115 , 25 117 or 25 122. 7, or listed pursuant to Section 25 140 of the Californi a Health and Safety Code, Division 20 , Chapter 6. 5 (Hazardous Waste Control Law)), (ii) defined as a "hazard ous substance" under Section 25 316 of the Cali fornia 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 25 501. 1 of the California Heal th and Safety Code, Di vision 20 , Chapter 6. 95 (Hazardous Materi als Release Response Plans and Inventory), (i v) defined as a "hazardous substance" under Section 2528 1 of the Cali fornia Health and Safety Code, Division 20 , Chapter 6. 7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi ) fri able asbestos, (vii) polychlorinated biphenyls, (viii) listed under Chapter 11 of Division 4. 5 of Title 22 of the Cali fornia Code of Regulations or defined as "hazardous" or "extremely hazardous 11 pursuant to Chapter 10 of Division 4. 5 of Title 22 of the California Code of Regulations, (i x) designated as "hazardous substances II 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 Conservati on and Recovery Act, 42 U. S. C. §§6 901 et seq. (42 U.S. C. §§ 6903) or (x i) defi ned as "hazardous substances" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensati on, and Li ability Act, 42 U. S. C. §§ 19601 et seq.
(b) The term "Hazardous Materi als Contami nation II shall mean the contamination (whether presently existing or
hereafter occurring) of the Project, 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 (whether before or after the Commencement Date) emanating from the Project.
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• • (c) The term "Governmental Requirements" shall mean all past, present and future law s, ordinances, statutes, codes, rules, regulat ions, orders and decrees of the United States, the state, the county, the City, or any other
political subdivision in which the Site is lo cated, and �ny other state, county city, political subdivision, agency, instrumentality or other entity exerci sing jurisdiction over City Lessee or the Project.
15 .2 Due Di li gence. Lessee acknowledges that, pursuant to the terms of the DDA , Lessee had an adequate opportunity to investigate the condition of the Project, incl uding any Hazardous Materials Contamination lo cated thereon. Lessee further acknowl edges that no such Hazardous Material s Contamination was discovered to exist on the Project as of the Commencement Date.
15.3 Indemnification.
(a) Lessee shall save, protect, defend, indemnify and
hold harmless City, Agency and their officers, officials , employees, representatives and agents from and against any and all liabilities, suits, actions, cla ims, demands, penal ties, damages (incl uding, without limitation, penal ties, fines and monetary sanctions), lo sses, costs or expenses arising after the date on which Lessee took possession of the Project under this Lease (incl uding, without limitation, consultants' fees, investigation and la boratory fees, reasonabl e attorneys' fees and remedial and response costs) ( the foregoing are
hereinafter coll ectively referred to as "Liabilities") which may now or in the future be incurred or suffered by City, Agency and their officers, official s, empl oyees,
representatives or agents by reason of, resulting from, in connection with, or arising in any manner whatsoever as a direct or indirect result of (i) the presence on or under, or escape, seepage, leakage, spillag e, discharge, emission or release from the ProJect of any Hazardous Materials or
Hazardous Materials Contamination occurring after the
Commencement Date, including any Liabilities incurred under any Governmental Requirements relating to such Hazardous Material s or Hazardo us Materials Contamination, unle ss such contamination was caused by City, Agency or their officers, employees or agents; and (ii) the rel ease, discharge, disposal or use of Hazardous Material s on the Project by Lessee or its agents, officers, employees or subtenants. Lessee' s
obligations under this Section shall survive the expiration of this Lease.
15 . 4 Duty to Prevent Hazardous Material Contamination. Upon Lessee taking possession of the Project, Lessee shall not use, generate, possess, store, transport or discharge Hazardous Material s on the Project, except ordinary and customary Hazardous Materials which are reasonably required to be used by Lessee in the normal course of operating the Project. Lessee shal l take all necessary precautions to prevent the release of any Hazardous 487/062212 --0041/31324l2 7 a00/17/98 -26-
• • Materials located on the Project into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Lessee 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 San Bernardino County, California , as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials.
15.5 Obligation to Remediate Project. Notwithstanding the obligation of Lessee to indemnify City and Agency pursuant to Section 15.3 {a ) of this Lease, Lessee 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 Project for the purposes contemplated by this Lease and the DDA, which requirements or necessity arise from ,the presence upon, about or beneath the Project of any Hazardous Materials or Hazardous Materials Contamination for which Lessee is obligated to indemnify City against pursuant to Section 15.3{a ). Such actions shall include, but not be limited to, the investigation of the environmental condition of the Project, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. Lessee shall take all actions necessary to promptly restore the Project to an environmentally sound condition for the uses contemplated by this Lease and the DDA notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements.
15. 6 Right of Entry. Notwithstanding any other tenn or provision of this Lease, Lessee shall pennit City or its agents or employees to enter the Project at any time during normal business hours (except in the event of an emergency ), without prior notice in the event of an emergency, and with not less than twenty-four (24) hours' advance notice if no emergency is involved, to inspect, monitor and/or take emergency or long-tenn remedial action with respect to Hazardous Materials and Hazardous Materials
Contamination on or affecting the Project. All costs and expenses incurred by City in connection with perfonning Lessee's obligations hereunder shall be reimbursed by Lessee to City upon demand plus interest at the maximum non-usurious rate pennitted by law.
15. 7 Storage or Handling of Hazardous Materials. Lessee, at its sole cost and expense, shall comply with all Governmental Requirements for the storage, use, transportation, handling and disposal of Hazardous Materials on or about the Project. In the event Lessee does store, use, transport, handle or dispose of any Hazardous Materials, Lessee shall notify City in writing at least ten (10) days prior to their first appearance on the Project and Lessee's failure to do so shall constitute a material default under this Lease. Lessee shall conduct all monitoring activities required or prescribed by applicable Governmental Requirements, and shall, at its sole cost and expense, comply with all posting 487/062212--004l /3132412 7 aOJ/17/98 -27-
• • requirements of Proposit ion 65 or any other similarly enacted Governmental Requirements. In addition, in the event of any complaint or governmental inquiry, or if otherwise deemed necess ary by City in its reasonable ju dgment, City may require Les see, at Les see' s sole cost and expense, to conduct specific monitoring or testing activities with respect to Hazardous Materials on the Proj ect. Les see' s monitoring programs shall be in compliance with applicable Governmental Requirements, and any program related to the specific monitoring of or testing for Hazardous Materials on the ProJ ect, shall be satisfactory to City, in City' s reas onable discretion. Lessee shall further be solely respons ible, and shall reimburse City, for all costs and expenses incurred by City arising out of or connected with the removal, clean-up and/or restoration work and materials necessa ry to return the Proj ect and any property adj acent to the Proj ect affecced by Hazardous Materials emanating from the Proj ect to their condition existing at the time of the Les see' s Proj ect Evaluation . Les see' s obligations hereunder shall survive the termination of this Lease.
15. 8 Environmental Inquiries. Lessee shall notify City, and provide to City a copy or copies , of the following environmental permits, disclosures , applications, entitlements or inquiries relating to the Proj ect : 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 Les see shall report to City, as soon as poss ible after each incident, any unusual, potentially important incidents. In the event of a release of any Hazardous Materials into the environment, Lessee shall, as soon as poss ible after the release, furnish to City a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of City, Lesse e shall furnish to City a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Proj ect 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 .
15 . 9 Costs of Environmental Comoliance. If during the first fifteen (15) years of the Lease term, any costs which Les see is responsible for under this Article 15 (excluding any costs resulting from the acts or omissi ons of Les see, its employees, agents, officers, directors, representat ives or the Manager) in excess of the sum of (i) the Net Operating Income from the Proj ect and (ii) the Operating Reserve and Capital Replacement Reserve (as defined above), Les see shall use its commercially reas onably efforts to obtain a non-recourse loan on terms acceptable to Les see and may encumber its leasehold interest hereunder as security for such loan in accordance with Section 18.1. If Les see, des pite its commercially reasonable efforts, cannot obtain such a loan or cannot comply with Environmental Laws because the cost exceeds the sum of (i) the Net Operating Income from the Proj ect and (ii) the 48710622I2 -0041/3 I324 l2 7 aOJ/I 7/98 -28-
• • Operating Reserve and the Capital Replacement Reserve (as defined above) , City shall not have the right to terminate this Lease durin g the fi rs t fift een (15) years of the ter m for fai lur e to obtain such a loan , but Lessee shall retain the right to pursue all other rights and remedies available under the law.
16 . ALTERATION OF IMPROVEMENTS .
16.1 Alterations. Lessee shall not make or permit to be made any structural alteration of , addition to or change in the Improvements, nor demolish all or any part of the Improvements without the prior written consent of City ; provided , however , that the foregoing shall not prohibit or restrict the repair and/or replacement of the Improvements by Lessee in accordance with Section 13 above. In requesting such consent Lessee shall submit to City detailed plans and specifications of the proposed work and an explanation of the need and reasons therefor . This Section shall not limit or set aside any obligation of Lessee under this Lease to maintain the Improvements and the Proj ect in a clean and safe condition , including structural repair and restoration of damaged Improvements. City shall not be obligated by this Lease to make any Improvements or alterations to the Proj ect {structural or otherwise) or to assume any expense therefor. '
16.2 Mechanic 's Liens. Lessee shall not suffer or permit any liens to be enforced against the fee simple estate of City in the Project , its reversionary interest in the Improvements or Lessee's leasehold interest therein by reason of work , labor , services or materials supplied or claimed to have been supplied to Lessee or anyone holding the Site and the Improvements , or any part thereof , through or under Lessee, and Lessee agrees to defend, indemnify , and hold City and City and their respective officers , officials , employees , agents, and representatives , harmless against such liens. Notwithstanding anything herein to the contrary , in no event shall Lessee be responsible for removal of any liens against City 's fee interest in the Site caused or suffered by City or Agency . If any such lien shall at any time be filed against the Site or any Improvements thereon, Lessee shall , within thirty (30) days after notice to Lessee of the filing thereof , cause the same to be discharged of record ; provided , however , that Lessee shall have the right to contest the amount or validity , in whole or in part , of any such lien by appropriate proceedings but in such event , Lessee shall notify City and promptly bond such lien in the manner authorized by law with a responsible surety company qualified to do business in the State of California or provide other security acceptable to City . Lessee shall prosecute such proceedings with due diligence. Nothing in this Lease shall be deemed to be , nor shall be construed in any way to constitute , the consent or request of City, express or implied , by inference or otherwise , to any person , firm or corporation for the performance of any labor or the furnishing of any materials for any construction , rebuilding , alteration or repair of or to the Site , the Improvements, or any part thereof. Prior to commencement of any repair or alteration of the Improvements , Lessee shall give 4871062212-0041 /3132412 7 aOJ/ 17198 -29-
• • City not less than thirty {30) days advance notice in writing of intention .t o begin said activity in order that nonresponsibility notices may be posted and recorded as provided by State and local laws.
16. 3 Signs. Lessee shall not place or permit to be placed any sign that is not in compliance with the sign ordinance of the City upon the exterior or in the windows of the Proj ect. Any sign not constructed in accordance therewith shall be immediately removed by Lessee and , if said sign is not removed by Lessee within ten {10) days of written notice from City to Lessee , then City may remove said sign without any liability to Lessee.
17. ASSIGNMENT AND SUBLETTING.
17 .1 Definition of Transfer. The term "T ransfer " shall mean any assignment , hypothecation, mortgage, pledge, conveyance , sublease {exclusive of renting the units to Eligible Tenants pursuant to the terms of Article 5) , sale , exchange, gift , or encumbrance of all or any portion of this Lease , the Site , or the Improvements, whether voluntary, involuntary or by operation of law. A Transfer shall also include the transfer to any person or group of persons acting in concert of twenty-five percent {25%) or more of the present ownership and/or control of Lessee, taking all transfers into account on a cumulative basis. In the event Lessee or its successor is a corporation or trust , such transfer shall refer to the transfer of the issued and outstanding voting rights or capital stock of Lessee, or of the beneficial interests of such trust {except as set forth below); in the event that Lessee is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent {25%) of the limited or general partnership interests; in the event that Lessee is a jo int venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such jo int venture partner, taking all transfers into account on a cumulative basis; provided, however, the limited partner of the Lessee shall have the right to transfer or assign its limited partnership interest , or any part thereof , in Lessee to a limited partnership of which the general partner thereof is an affiliate of Kaufman and Broad Multi-Housing Group, Inc.
Nothing contained herein shall prohibit the Lessee from {i) transferring the general partnership interest of LINC Housing Corporation , a California nonprofit public benefit corporation (" LINC"), to another nonprofit corporation in which LINC controls riot less than fifty-o ne percent {51%) of the members and directors without the approval of the Agency or City , so long as Agency and City receive written notice of such Transfer ; or {ii) encwnbering the Improvements with additional mortgages permitted by Sections
8. 1, 9. 3, 10 , 13 and 15. 9 of this Lease upon the condition that such funds are used solely for the costs for operation and maintenance of the Site and capital improvements or for refinancing any of same , so long as the refinancing does not exceed the then outstanding balance of the existing financing.
487/062212-0041/3132412 7 103/17/98 -30-
• 17 .2 Limitation on Transfers . Except as permitted pursuant to Section 17. 1, Lessee shall not Transfer this Lease, or any interest in the Site or in the Improvements, directly or indirectly, voluntarily or by operation of law, without the prior written approval of City, which approval shall not be unreasonably withheld . Any such purported Transfer without such approval shall be null and void. In considering whether it will grant approval to any Transfer by Lessee, City shall only consider factors such as (i) whether operation or �anagement of the Project is jeopardized; (ii) the financial strength and capability of the proposed transferee to perform Lessee 's obligations hereunder; and (iii) the proposed transferee 's experience and expertise in the planning and operation of similar proJ ects . In considering whether to approve a hypothecation or encumbrance of Lessee 's leasehold interest in the Project, City shall consider such factors as: (i) the use of the proceeds of the financing; (ii) the financial impact of the financing on the operation of the Project and the making of payments owing under the Note and the Bonds; and (iii) the term of the financing does not extend beyond the term of the Ground Lease .
It shall be deemed reasonable for the City to refuse to consent to a Transfer based on any of the above referenced reasons . Consent by City to one or more Transfer( s) shall not release Lessee from the requirement that City 's consent be obtained to all subsequent Transfers.
17 .3 Request for Consent . If Lessee desires at any time to perform a Transfer, Lessee shall first notify City of its desire to do so and shall submit in writing to City (i) the name of the proposed transferee; (ii) the proposed transferee 's experience and expertise in the operation of similar projects ; (iii) the proposed documents evidencing the Transfer; (iv) such reasonable financial and other information as City may request concerning the proposed Transfer or transferee in such detail as City may request . Nothing in this Section 17.3 shall require the consent of the City for a transfer permitted by Section 17 .1.
17 .4 No Release . In the absence of specific written
agreement by City, no Transfer by Lessee of all or any portion of its interest in the Project or this Lease shall be deemed to relieve Lessee or any successor party from any obligations under this Lease . In addition, no attempted Transfer of any of Lessee 's obligations hereunder shall be effective unless and until the successor party executes and delivers to City an assumption agree ment in a form approved by the City assuming such obligations . 17 .5 Lease Aoproval . City shall have the right to approve any form of lease used by Lessee for leasing dwelling units within the Project and all, revisions, amendments and modifications made to the form lease .
18 . PERMITTED ENCUMBRANCES .
18 .1 Right to Encumber. Nothing in this Lease shall
restrict Lessee from encumbering Lessee 's leasehold estate in the 487/062212-0041/3132412 7 aOJ/17/98 -31-
• Project and interest in the Improvements, furn ishings, furniture, equipment, fixtures, and personal property located thereon, with (i ) the TCAC Regulatory Agreement; (i i) the Bond Regulatory Agreement; (i ii ) the Bond Deed of Trust; (i v) any mortgage or deed of trust approved by the City; or (v ) to secure a non- recourse loan or loans on terms acceptable to Lessee made during the first fifteen (1 5) years of the Lease term (i n accor dance with Sections
8.1, 9. 3, 10, 13 and 15.9 herein), solely to fi nance any costs or expenses imposed upon Lessee pursuant to Sectio ns 8.1, 9,3, 10, 13 or 15.9 of this Lease which costs or expenses exceed the sum of the Net Operating Income from the ProJ ect which Lessee is entitled to under this Lease and the Capital Replacement Reserve (a "Leasehold Mortgage"). For purposes of this Sectio n, TCAC, the trustee under the Bond Deed of Trust and any other lender holdin g a Leasehold Mortgage in the Project approved by City pursuant to Section 17. 2 are referred to herein col lectively as "Lienholder. 11 The TCAC Regulatory Agreement and any Leasehold Mortgage approved by City shal l herein after be col lectivel y referred to as a "Permit ted Encumbrance." Nothing in this- Lease shal l proh ibit Lessee or its partners from making a col lateral assignment of its partnership interest to a lender.
18.2 No Subordination of Fee. City and Lessee acknowledge and agree that City's fee interest in the Project (i ncluding its reversionary interest in the Improvements) shal l not be subordinated to any Permi tted Encumbrance or any other li en, mortgage, deed of trust, pledge or other encumbrance of Lessee's leasehold interest hereunder. -
18 . 3 Assignment by Foreclosure. This Lease may be assigned, without the consent of City, to the purchaser at any foreclosure sale of a Permitted Encumbrance, whether judicial or non -j udicial, or to the Lienholder under any Permitted Encumbrance, pursuant to foreclosure or simi lar proceedings, or pursuant to an assignment or other transfer of this Lease to such Lienholder, including without li mitation by a deed in li eu of foreclosure. Upon forecl osure of such li en, by power of sale, judicial foreclosure or upon acquisitio n of the leasehold estate by deed in li eu of forecl osure, the Lienholder may, without further consent of City, sel l and assign the leasehold estate created hereunder; provided, however, that any further assignment of this Lease shall require the consent of City in accordance with Sectio n 17 . Upon any such foreclosure or assignment in li eu thereof, the terms of Article 5 regarding renting the units therein to El igible Tenants at Affordable Rent and Section 19.1 (a) making it an event of default hereunder upon the fail ure to make payments owing on the Note shall termi nate.
Upon any such transfer of the leasehold estate to a Lienholder, the Lienholder shal l be li able to perform the obl igati ons herein imposed on Lessee, only for and during the period that such Lienholder is in possession or ownership of the leasehold estate created hereby. The Transfer of this Lease by any person or entity other than the Lie nholder shall require the consent of the City pursuant to Section 17 . 2.
4871062212--004l1 313 2412 7 a031l7198 -3 2-
• 18.4 Consent of Lienholder. Except as provided in Section
18.5, this Lease may not be terminated, surrendered or materially amended by Lessee, without the prior written consent of Lienhol der.
18.5 Termination and Other Remedies. Notwithstanding
anything to the contrary in this Lease, City may terminate this Lease or exercise any other remedies available to City hereunder, at la w or in equity because of a default hereunder, only after City has sent to any Lienholder a written notice simul taneously with the notice of such default del ivered to Lessee pursuant to the terms hereof {o r upon the occurrence of such default, if Lessee is not entitled to receive notice thereof hereunder} , specifying such default and providing the Lienholder the opportunity to cure said default as provided below. If such defaul t is a failure by Lessee to pay any monies to City or to any other party as required hereunder, the Lienholder shall have fifteen (15} days after the expiration of Lessee's cure period to cure such defaul t. If such default is an act or omission other than Lessee's failure to pay monies to City or to any other party as required hereunder, the Lienholder shall have such period of time as is reasonably necessary after the expiration of Lessee's period for curing such default with due dil igence within which (i} to cure such default; (ii} to obtain possession of the Project (incl uding possession by a receiver} and to cure such defaul t (in the case of a default which is susceptible of being cured when the Lienholder has obtained possession thereof}; or (iii} to institute foreclosure proceedings and to complete such forecl osure proceedings or otherwise acquire Lessee's interest under this Lease with reasonable dil igence in the case of a defaul t which is not so susceptible of being cured by Lienholder (it being understood that Lienholder shall not have responsibility to cure any default which is not susceptible of being cured by it}. During the period the Lienholder is curing a nonmonetary defaul t hereunder or is attempting to obtain possession (whether by foreclosure, receiver or otherwise}, Lienholder shall ensure that all monetary obligations owing hereunder are paid. The time available to the Lienholder to initiate foreclosure proceedings as aforesaid shall be deemed extended by the number of days of del ay occasioned by judicial restriction against such initiation.
18.6 Right to Cure. Any Lienholder shall have the right, but not the obligation, to cure any default under this Lease, and City shall accept such performance by or at the insistence of any such Lienholder as if the same had been made by Lessee. If Lessee assigns this Lease to a li mited partnership or limited li ability company in which Chino Housing Investors or an affiliate thereof is a limited partner or member, Chino Housing Investors or said affiliate shall have the right to cure any default on behalf of Lessee.
18 . 7 Obligations of Lienholder in Possession. No Lienhol der shall have any personal li ability for performance of Lessee's obligations under this Lease unless and until such Lienhol der 487/062212--0041/ 313 2412 7 a03/1 7/98 -33-
• • acquires title to Lessee's leasehold estate or assumes possession of the Project.
18 .8 Non-Merger of Fee and Leasehold Estates. Except for a termination of this Lease upon a default by Lessee and after providing a Lienholder the opportunity to cure said default pursuant to Section 18 .6, it is the express intent of the parties that if both City's and Lessee's estates in the Project or the Improvements or both become ve�ted in the same owner, this Lease shall nevertheless not be destroyed by application of the doctrine of merger except at the express election of City and Lienholder (s).
Notwithstanding the foregoing, the termination of Lessee's right to possession under the Lease due to the failure of Lessee to make payments owing under the Note pursuant to Section 19. 1 (a) or the failure of Lessee to operate the Project as a senior citizen rental housing project renting to Eligible Tenants at Affordable Rents pursuant to Article 5 shall not result in the merger of the leasehold estate created by this Lease with the City's fee estate in the Project and this Lease shall remain in full force and effect. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, shall not work as a merger and shall, at the option of City, terminate all or any existing sublease or subtenancies or may, at the option of City, operate as an assignment to City of any or all such existing subleases or subtenancies.
18 . 9 Lienholder' s Right to New Lease. In case of the termination of this Lease by reason of any event of default or any other event or circumstance which entitles City to terminate this Lease or in the event of rejection or disaffirmance of this Lease pursuant to bankruptcy law or other law affecting creditors' rights, City shall give prompt notice thereof to any Lienholders.
City shall, on written request of any such Lienholder or designee, made at any time within forty (40) days after the giving of such notice by City, enter into a new lease of the Improvements with such Lienholder, or its designee, within twenty (20 ) days after receipt of such request, which new lease shall be effective as of the date of such termination of this Lease for the remainder of the term of this Lease, at the rent provided for herein, and upon the same terms, covenants, conditions and agreements as are herein contained; provided that such Lienholder shall: (a) contempor aneously with the delivery of such request pay to City all the installments of rent and all items of additional rent and other charges payable by Lessee hereunder which are then due, whether or not City has specified them as due in any notice to such Lienholder given as provided in this paragraph; (b) pay to City at the time of the execution and delivery of said new lease any and all sums for other charges payable by Lessee hereunder to and including the date thereof, together with all expenses, including reasonable attorneys' fees, incurred by City in connection with the termination of this Lease and with the execution and delivery of such new lease, less the net amount of all sums received by City from any subtenants in occupancy of any part or parts of the Improvements or any part thereof up to the date of commencement of 487/062212--0041/ 313 2412 7 a03/17/98 -3 4-
• • such new lease; and (c) on or prior to the execution and delivery of sai d new lease, agree in wrtt�ng that promptly following the delivery of such new lease, such Lienholder or its des ignee will perform or cause to be performed all of the other covenants and agreements herein contained on Les see's part to be performed to the extent that Less ee shall have failed to perform the same to the date of delivery of such new lease, except such covenants and agreements which are not susceptible of performance by such Lienholder. Nothing herein contained shall be deemed to impose any obligation on the part of City to deliver physic al possess ion of the Improvements or any part thereof to such Lienholder unles s City at the time of the execution and delivery of such new lease shall have obtained phys ical possess ion thereof.
18 .10 Right of City to Cure Default. In the event of a default or breach by Less ee of a Permitted Encumbrance , City shall have the right , but not the obligation , to cure the default prior to completion of any foreclosure of the Permitted Encumbrance . In such event, City shall be entitled to reimburs ement from Les see of all costs and expenses incurred by City in curing the default, including legal costs and attorneys' fees , upon demand with interest at the maximum nonusurious interest rate permit ted by law.
19. EVENTS OF DEFAULT AND REMEDIES.
19. 1 Events of Def ault by Les see. The occurrence of one or more of the following events and the continuation thereof after the expiration of any applicable cure period shall consti tute an event of default under this Lease.
(a) Less ee shall after the expirat ion of the
applicable cure period fail to comply with the terms and conditions set forth in the Note or the DDA.
(b) Less ee shall abandon or surrender the Site , or the Improvements.
(c) Less ee shall fail or refuse to pay , within ten
(1 0) days of the date any ins tallment of rent or any other sum required by this Lease is due to be paid by Les see .
(d) Fai lure to perform any other provis ion of this
Lease to be performed by Less ee if the failure to perform is not cured within thirty (3 0) days after Less ee receives written notice thereof from City. In the event that such default cannot reasonably be cured within thirty (3 0) days , but is capable of being cured by Lessee) , Les see shall not be in default of this Lease if Lessee commences to cure the default within ten (10) days of delivery of such notice and dilig ently and in good faith continues to cure the default until completion , but in no event shall Les see have more than one hundred twenty (120) days after Less ee receives written notice thereof from Cit y to cure any default.
487/062212--0041/31 32412 7 aOJ/17/98 - 3 5-
• • (e) The subjection of any right or interest of Lessee in this Lease to attachment, execution or other levy, or to sei zure under legal process , if not released within one hundred twenty (120 ) days; provided that the foreclosure of any Leasehold Mortgage shall not be construed as a default within the meaning of this Section.
(f) The appointment of a receiver , not including
receivership pursuant to any Permitted Encumbrance, to take possession of Lessee 's interest in the leasehold estate or of Lessee 's operations on the Project for any reason , unless such receivership is terminated , dismis sed or vacated within one hundred twenty (120) days after the appointment of the
receiver.
(g) Lessee shall file a petit ion in voluntary
bankruptcy under the Bankruptcy Code of the United States or any simil ar law, state or federal, now or hereafter in effect. (h) Lessee shall file an answer admittin g insolvency
or inabilit y to pay its debts.
(i ) Wi thin one hundred twenty (120 ) days after the
fil ing against Lessee of any involuntary proceedings under such Bankruptcy Code or simil ar law, such proceedings shall not have been vacated or stayed.
(j) A trustee or receiver shall be appointed for
Lessee or for all or the majority of Lessee 's property or the Project, in any involuntary proceeding, or any court shall have taken jurisdiction of Project all or the majority of Lessee's property or the Project in any involuntary proceeding for the reorganiz ation, dissolution, liquidation or winding up of Lessee, and such trustee or receiver shall not be
discharged or such jurisdictio n relinqui shed or vacated or stayed on appeal or otherwise stayed within six ty one hundred twenty (120 ) days.
(k) Lessee shall make an assignment for the benefit of
creditors or shall admit in writin g its inabilit y to pay its debts generally as they become due or shall consent to the appointment of a receiver or trustee or liq uidator of all or the major part of its property, or the Project.
19.2 Remedies of City. In the event of any such default as described in Section 19. 1 above , City may , at its option :
(a) Correct or cause to be corrected said default and
charge the costs thereof (including costs incurred by City in enforcing this provisio n) to the account of Lessee , which charge shall be due and payable upon demand with interest at the maximum non- usurious rate permitted by law;
487/062212-0041/3132412 7 aOJ/17/98 -3 6-
• • (b) Correct or cause to be corrected said default and pay th� costs thereof {i ncluding costs incurred by City in enforcing this provision) from the proceeds of any insurance; (c) Exercise its right to maintain any and all actions
at law or suits in equity to compel Lessee to correct or cause to be corrected said default;
(d) Have a receiver appointed to take possession of
Lessee' s interest in the Project and the Improvements, with power in said receiver to administer Lessee's interest in the Site and the Improvements, to collect all funds available to Lessee in connection with its operation and maintenance of the Site and the Improvements; and to perform all other consistent with Lessee's obligation under this Lease as the court deems proper;
(e) Maintain and operate the Proj ect and the
Improvements, without terminating this Lease;
(f) Terminate this Lease by written notice to Lessee
of its intention to do so. Such notice of election to
terminate may be delivered concurrently with the notice of default.
19 .3 Right of City in the Event of Termination of Lease.
Upon termination of this Lease pursuant to Section 19. 2, it shall be lawful for City to re-enter and repossess the Site and the Improvements and Lessee, in such event, does hereby waive any demand for possession thereof, and agrees to surrender and deliver the Site and the Improvements peaceably to City immediately upon such termination in good order, condition and repair, except for reasonable wear and tear. Lessee agrees that upon such
termination, title to all the Improvements shall vest in City pursuant to Section 7. 2. Even though Lessee has breached the Lease and abandoned the Project, this Lease shall continue in effect for so long as City does not terminate Lessee's right to possession, and City may enforce all of its right and remedies under this Lease, including, but not limited to, the right to recover the rent as it becomes due under this Lease. No ej ectment, re-entry or other act by or on behalf of City shall constitute a termination unless City gives Lessee notice of termination in writing.
Termination of this Lease shall not relieve or release Lessee from any obligation incurred pursuant to this Lease prior to the date of such termination. Termination of this Lease shall not relieve Lessee from the obligation to pay any sum due to City or from any claim for damages against Lessee.
19. 4 Damages. Damages which City recovers in the event of default under this Lease shall be those which are then available under applicable California case and statutory law to lessors for leases in the State of California including, but not limited to, any accrued but unpaid rent and the worth at the time of award of the amount by which the unpaid rent for the balance of the term of 487/062212--004l/ 3132412 7 aOJ/17/98 -37-
this Lease after the date of award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided.
19.5 City Remedy for Excessive Rent Charge.
{a) It shall constitute a default for Lessee to charge
or accept for a unit rent amounts in excess of the Affordable Rent for the particular unit pursuant to Section 5.3 of this Lease. In the event that Lessee charges or receives such higher rental amounts , in addition to any other remedy City shal l have for such default, Lessee shall be required to pay to City the entire amount of rent received in excess of the amount permitted pursuant to this Lease.
(b) It shall constitute a defaul t for Lessee to
negl igently or intentiona ll y rent any unit to a tenant who is not an El igible Tenant for the particul ar unit at the appl icable Affordable Rent. In the event Lessee negl igently or intenti onally rents a unit to an inel igible tenant , in addition to any other equitable remedy City shal l have for such default , Lessee, for each separate viola tion shall be required to pay to City an amount equal to {i) two times the greater of {A} the total rent Lessee received from such inel igible tenant , or (B) the total rent Lessee was entitled to receive for renting that unit , plu s (ii) any rel ocation expenses incurred by City as a result of Lessee having rented to such inel igible person.
(c) It �hal l constitute a default for Lessee to
negl igently or intentiona ll y rent any of the units in viola tion of the leasing preference requirements of
Section 5.6 of this Lease. In the event Lessee negl igently or intentionally rents a restricted unit in violatio n of the leasin g preference requirements, in addition to any other equitable remedy City shal l have for such default, Lessee, for each separate viol ation shall be required to pay Ci ty an amount equal to two (2 ) months of rental charges for
restricted unit with the highest rent. The terms of this Section shal l not apply if Lessee rents to an ' inel igible person as a result of such person 's fraud or
misrepresentation.
(d) Lessee shall not be in default for a breach of
Section 19.5 {b) and/or {c) if Lessee commences an unla wful detainer action against the inel igible tenant within thirty {30) days after Lessee becomes aware of that the tenant is inel igible for occupancy of the Project, and Lessee dil igently pursues the unlawful detainer action to comple tion , but in no event shall Lessee have more than one hundred twenty (120) days after Lessee becomes aware that such tenant is inel igible for occupancy of the Project, to evict such inel igible tenant from the unit.
487/062212-0041/3132412 7 a0J/17/98 -3 8 -
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN
SUBPARAGRAPHS (A) THROUGH (C) OF THIS SECTION (THE "DAMAGE AMOUNTS" ) CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL
DAMAGES THAT CITY WOULD SUFFER DUE TO THE DEFAULTS BY LESSEE SET
FORTH IN SUBPARAGRAPHS (A) THROUGH (C), CONSIDERING ALL OF THE
CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS LEASE,
INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF
HARM TO CITY AND ACCOMPLISHMENT OF CITY'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 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR
THE DEFAULTS SET FORTH IN THIS SECTION, BUT NOTHING IN THIS SECTION
SHALL BE INTERPRETED TO LIMIT CITY'S OR CITY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. 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 LEASE.
LESSEE'S INITIALS: CITY' S INITIALS:
� [TL
19 �ghts and Remedies a""e Cumulative. The remedies
provided by this Section are not exclusive and shall be cumulative to all other rights and remedies possessed by City. The exercise by City of one or more 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 Lessee.
20. NONDISCRIMINATION.
20.1 Anti- di scrimination. Subject to the age restrictions set forth in this Lease, the Grant Deed and the DDA, 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, or any part thereof, nor shall Lessee, 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 Project, or any part thereof.
20.2 No Discrimi nation Clauses in Agreements. Subject to the tenancy/occupancy restrictions not prohibited by federal law as embodied in this Lease, which may modify the following
nondiscrimination clauses, the following shall apply:
487/062212�1/3132412 7 aOJ/17198 - 3 9 -
• • Less ee agrees for itself anq any successor in interest that Les see shall refrain from restrictin g the rental , sale, or lease of any portion of the Project ; or contracts relating to the Project , on the basis of race , color , creed , rel igion , sex, marital status , ancestry, or national origin of any person. All such deeds , leases or contracts shall contain or be subject to substanti ally the fol lowing nondisc rimination or nonsegregation clauses :
(a) In leases : "The lessee herein covenants by and
for himse lf , his heirs , executors , administ rators , and ass igns , and all persons claiming under or through him , and this lease is made and accepted upon and subject to the fol lowing conditio ns :
"That there shall be no disc riminatio n against
or segregation of any person or group of
persons on account of status , race , color ,
creed , relig ion , sex , marital status , ancestry ,
or national origin (except as required by law)
in the leas ing , subleas ing , transferr ing , use ,
occupancy , tenure , or enjoyment of the land
herein leased , nor shall the less ee hims elf , or
any person clai ming under or through him,
establis h or permit any such practice or prac
tices of disc rimin ation or segregation. with
reference to the sele ction , location , number ,
use , or occupancy of tenants , les sees ,
sublessees, subtenants, or vendees in the land
herein leased. "
(b) In contracts : "There shall be no disc rimination
against or segregation of any persons or group of persons on account of status , race, color, creed , rel igion , sex , marital status , ancestry , or national origin (except as required by law) in the sale, lease, transfer , use , occupancy, tenure , or enjoyment of land , nor shall the transferee himself , or any person clai ming under or through him, establish or permit any such practice or practices of di scrimination or segregation with reference to the selection , location, number , use , or occupancy of tenants , les sees , subtenants, sublesse es , or vendees of land."
21. NONDISCRIMINATION IN EMPLOYMENT. Les see , for itse lf and its successors and ass igns , agrees that during the operation of the Improvements provided for in this Lease , and during any work of operation , repair or replacement, Les see shal l not disc riminate against any employee or appl icant for employment because of race , color , creed , religio n , sex , marital status , phys ical or mental di sabil ity, sexual orientation , ancestry or nati onal origin , or on the bas is of any other category or status not permitted by law.
22. LABOR STANDARDS. Less ee shall comply , and require all contractors and subcontractors employed pursuant to this Lease to comply with all applicable labor standards provis ions of the 4&7/062212-0041/3\32412 7 a03/l"l/9S -4 0-
• • California Labor Code and federal law, including payment of prevailing wage for off-site construction of public works, if any is required pursuant to the HOME Agreement, the HOME Program, this Lease or the DDA.
23. AGENCY THIRD-PARTY BENEFICIARY. City and Lessee hereby expressly agree that the Agency shall be a th ird-p arty beneficiary of all tenns, obligations, covenants, conditions and restrictions imposed upon Lessee and Lessee's use and operation of the Proj ect by this Lease. The Agency shall have the right, but not the obligation, to enforce the tenns· and conditions of the Lease such in the event that the City elects not to enforce such tenns and conditions. Agency shall be entitle to obtain upon request therefore, any and all documents required to be delivered by Lessee to City under this Lease.
24. MISCELLANEOUS.
24 .1 Attorneys' Fees. In the event that Agency, City or Lessee to this Lease brings an action against the other party or parties hereto by reason of the breach of any condition, covenant, representation or warranty in this Lease, or otherwise arising out of this Lease, the prevailing party in such action shall be entitled to recover from the other reasonable expert witness fees, and its 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.
24. 2 Amendments. This Lease shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the Official Records of the County of San Bernardino.
24. 3 Notice. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in wi iting by the parties hereto:
If to City:
With a copy to:
487/062212-0041/ 3132412 7 aOJ/1 7/98
City of Chino
13220 Central Avenue
Chino, California 91 710
Attn: City Manager
Jimmy L. Gutierrez, Esq.
City Attorney, City of Chino
12616 Central Avenue
Chino, California 91 710
-4 1-
/
• Ci ty:
Copy to:
If to Lessee:
With a copy to:
With a copy to :
With a copy to:
• Red evelopment City of the City of Chino
13220 Central Avenue
Chino, California 9171 0
Attn: City Manager
Rutan & Tucker
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
Attn: Jeffrey M. Oderman, Esq.
Chino Housing Investors
c/o LINC Housing, Inc.
110 Pine Avenue, Suite 525
Long Beach, CA 90802-4422
Attn: Hunter Johnson
Kaufman & Broad Multi-Housing
Group, Inc.
320 Golden Shore, Suite 20 0
Long Beach, California 90802 - 421 7
Attn: Michael N. Costa, President
Kaufman & Broad Multi-Housing
Group, Inc.
320 Golden Shore, Suite 200
Long Beach, California 90802-421 7
Attn: Barton Puchino, General Counsel
Marron, Reid & Sheehy, LLP
100 "B" Street, Suite 40 0
Santa Rosa, California 9540 4
Attn: Richard Power, Esq.
The notice shall be deemed given three (3 ) business days after the date of mailing, or, if personally delivered, when received.
24.4 Holding Over. The occupancy of the Site or
Improvements by Lessee after the expiration of the term of this Lease shall be construed to be a tenancy from month to month, and all other terms and conditions of this Lease shall continue in full force and effect.
24.5 Conflict of Interest . No member, official or employee of City or Agency shall have any personal interest, direct or indirect, in this Lease nor shall any such member, official or employee participate in any decision relating to the Lease which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. Lessee warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Lease.
487/062212-0041/3132412 7 103/17/98 -42-
• 24 . 6 Relati onship. The relationship between the parties hereto shal l at all times be deemed to be that of landlord and tenant. The parties do not intend rior shall this Lease be deemed to create a partnership or joint venture.
24.7 Quitcl aim Deed. Upon the expiration or sooner
termination of this Lease, at the request of City , Lessee shall execute and acknowledge a quitclaim deed confirming termination of its leasehold interest to City.
24.8 Headings. Headings of sections are for convenience only, and neither limit nor amplify the provisions of the Lease itsel f.
24. 9 Estoppel Certificate. Each of the parties shall at any time and from time to time upon not less than twenty (2 0) days ' prior notice by the other, execute, acknowledge and deliver to such other party a statement in writing certifying that this Lease is unmodified and is in full force and ef fect (or if there shall have been modifications that this Lease is in ful l force and effe ct as modified and stating the modifications) , and the dates to which the rent has been paid , and stating whether or not to the best knowledge of the signer of such certif icate such other party is in default in performing or observing any provision of this Lease , and , if in defaul t, specifying each such default of which the signer may have knowledge, and such other matters as such other party may reasonably request, it being intended that any such statement delivered by Lessee may be relied upon by City o� any successor in interest to City or any prospective mortgagee or encumbrancer thereof , and it being further intended that any such statement delivered by City may be relied upon by any prospective assignee of Lessee 's interest in this Lease or any prospective mortgagee or encumbrancer thereof. Reliance on any such certificate may not extend to any default as to which the signer of the certif icate shall have had no actual knowledge.
24.10 Severability. If any provision of this Lease shall be invalid, ille gal or unenforceable , the validity , legal ity and enforceability of the remaining portions hereof shall not in any way be aff ected or impaired thereby .
24.11 Waiver. A waiver by either party of the perf ormance of any covenant or condition herein shal l not inval idate this Lease nor shall it be considered a waiver of any other covenants or conditions , nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of , or an estoppel against, the later exercise of such remedy or right.
24.12 Integration. The DDA, the documents executed by City and Lessee pursuant to the DDA and this Lease contain the entire Agreement between the parties and neither party rel ies on any warranty or representation not contained therein.
487/062212-0041/3132412 7 a03/l 7/98 -43 -
• • 24.13 Governing Law. Thi s Lease shall be governed by the laws of the State of Californi a.
24 .14 Entry and Inspection. City reserves and shall have the ri ght during reasonable business hours (excepti ng cases of emergency), upon twenty-four (24) hours' prior notice (except in the cases of emergency) to Lessee by the executive director, to enter in the Project for the purposes of vi ewing and ascertai ning the condition of the same or to protect its in terests in the Project or to inspect the operations conducted thereon.
24.15 Transfer by City. In the event City shall transfer, convey or be divested of its fee estate in and to the Project and as a part of said transacti on shall transfer, convey, assign or be divested of its interest as the landlord in and to this Lease, then, from and after the effective date of said assignment, transfer, conveyance, di vesture or reverter, City shall have no further liability for the duties and liability of the City hereunder, except for liabilities which shall have accrued and be unsatisfied as of such date, for which li abiliti es City shall continue to be obligated notwithstanding any such assignment, transfer, conveyance, divesture or reverter.
24 .16 Counterparts. This Lease may be executed in any number of counterparts, each of which shall consti tute one original and all of which shall be one and the same instrument.
IN WITNESS WHEREOF, the City and Lessee have executed this Ground Lease by duly authorized representati ves on the date first written hereinabove.
ATTEST:
By: �i:.f't.. 'Y--A � "-.1
}l, "Y.. , X U"-
As is tan tSec re tary '3 -/ 7- q�
487/062212-0041/3132412 7 aOJ/17/98
CITY OF CHINO,
a municipal corporation
By: AlJ_, �.-::: City Manager 0
CHINO HOUSING INVESTORS, L.P.
a California li mited partnership
Its: _______________ _
"Lessee"
-44-
•• • STATE OF CALIFORNIA )
) ss .
COUNTY OF� l�''-l•D.:<-rG. r--c )
- . 1 •
On /} )(,._\.(' t) n 1 / <jt; ( I before me I l.( r'\.l'"\.v.. ,J - le -.... , \.r :...l1' Nd w� 6-,. ... � personally appeared I �u n.J....- -r L. '-·:P\.-o�ru) ' " ------ ----- --- ,,,....---
personatt-y known to me (or proved to me on the bas is of satis factory evid ence) to be the person {.,s') whose name Cs) @/� subscribed to the within ins trument and acknowledged to me that d}_e/s�ey executed the saIJl� in Qi'°_is/-her/their authoriz ed capacity ( i-es ) , and that by <fils/-aer/their si gnatures.(.s1 on the ins trument the person � or the entity upon behalf of which the person fE{> acted , executed the ins trument.--
Witnes s my hand and official seal.
STATE OF CALIFORNIA
COUNTY OF
On
personally appeared
)
) ss .
)
before me,
personally known to me (or proved to me on the bas is of satis factory evidence) to be the person (s ) whose name (s ) is/ are subscrib ed to the within ins trument and acknowledged to me that he/she/they executed the same in his/ her/their authori zed capacity (ie s) , and that by his/ her/their si gnatures (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 Publ ic
[S EAL]
487/062212-0041/313 2412 7 a03/17/98 -4 5-
• STATE OF CALIFORNIA
COUNTY OF Sa.n 9.£.via:,c..u.·rw
On ft Jc...{ eh 11 , 1 <t '1 t
personally appeared
ss .
be fore Il}_e , 'k I I (I ,1 J /u.(\(i_(,( I e.J •h O exJ:-, I Q. \ Q 'O (<_('1.,/u ---- ..,
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personally known to me (or proved to me on the basis of s&ti s- factory ev1.tlence) to be the _p erson ya') whose name y.:f) @/a� subscribed to the within instrument and �cknowledged to me that �)she/they exec uted the same in @fh-er/their authorized capacity {-i-es--) , and that by {hls/-her/t-he ir 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.
[SEAL]
487/062212-0041/ 31 32412 7 a03/17 /98 -46-
, il:ll • [l __ ,ch-\ � ·� .)
ATTACHMENT NO . 1
LEGAL DESCRIPTION OF SITE
That certain real property located in the City of Chino, County of San Bernardino, State of Calif ornia, more particularly described as:
Lots 1 through 6 and 19 through 24, in Block 38 of Town of Chino, in the City of Chino, County of San Bernard ino, State of California, as per map recorded in Book 4, page (s) 51 of Maps, in the office of the County Recorder of said County.
Except all those certain buildings and improvements now or hereaf ter constructed which buildings and improvements are and shall remain real property.
Lot 7, 8, 13, 14, 15, 16 , 17 and 18, in Block 35 of Town of Chino, in the City of Chino, County of San Bernard ino, State of California, as per map recorded in Book 4, page (s) 51, of Maps, in the office of the County Recorder of said County.
Except all those certain buildings and improvements now or hereafter constructed which buildings and improvements are and shall remain real property.
487/062212 --0041/ 313 2412 7 a03/l7/98
ATTACHMENT NO . 1
TO GROUND LEASE
ATTACHMENT NO. 2
LEGAL DESCRIPTION OF HOME PARCEL
That certain real property located in the City of Chino, County of San Bernardino, State of California, more particularly described as:
487/062212--0041/3132412 7 a0J/17/98
[To be inserted. ]
ATTACHME NT NO. 2
TO GROUND LEA SE
\
ATTACHMENT NO . 3
HOME INVESTMENT PARTNERSHIPS PROGRAM REQUIREMENTS
Pursuant to the terms of the Ground Lease, Lessee is required to assist the City and the City in leasing the Proj ect in compliance with all requirements of the HOME Program, including, but not limited to, those requirements which are summarized below. In the case of any conflict between the requirements of the HOME Program and the summary below, the HOME Program shall control .
A. Equal Opport unity and Fair Hous ing
Lessee agrees to comply with federal regulations, which state that no person shall be excluded from participating in, be denied the benefits of, or be subj ected to discrimination under any program or activity funded in whole or in part with HOME funds based on race, color, national origin, sex, age (except that the units are required to be leased to Senior Citizens), handicap, relig ion, or religious preference . In addit ion, HOME funds will be made available in accordance with the following:
1. All the requirements under the Federal Fair Housing
Act ; the Fair Employment and Housing Act (California
Government Code § 12900 et seq., and the applicable
regulations thereunder .
2. The prohibitions against discrimination on the basis of age under the Age Discrimination Act of 1975, and the
prohibition against discrimination against handicapped
individuals .
3. All requirements under the Equal Opportunity Act:
a. To the greatest extent feasible, all
opportunities for training and employment arising
in connection with the planning and carrying out
of any proje ct assisted with HOME funds will be
given to low- income persons residing with in the
City in accordance with Sect ion 3 of the Housing
and Urban Development Act of 1968, as amended,
12 U. S. C. § 1701u .
b. To the greatest extent feasible, contracts for
work to be performed in connection with any such
project be awarded to business concerns,
including , but not limited to, individuals or
firms doing business in the field of planning,
consulting or design, architecture, build ing,
487/062212-0041/313 2412.7 103/17/98
ATTACHMENT NO . 3
TO GROUND LEASE
PAGE 1 OF 4 PAGES
rehab, construction, which are located in or
owned by persons resi ding in the proj ect areas.
B. Af firm ati ve Marketi ng Pl an
C.
In accordance with the regulations of the HOME Investment Partnerships Program and in furtherance of the Les see' s commitment to non- disc rim inatio n and equal opportunity in hous ing, Lessee shal l establ is h a plan and procedures to affirmatively market units as si sted with HOME Program funds, unless prohibit ed by court order. The obj ective of the plan is to provide information and attract el igible persons from al l racial, ethnic and general groups in the hous ing market area to the availa ble hous ing. The affirmativ e marketing plan incl udes the fol lowing components li sted in 24 C.F.R. §921. 351 (b) which are as fol lows :
1. Methods for informing the publ ic, owners, and potential tenants about federal fair hous ing loans and the
Lessee' s affirmative marketing pol icy ;
2. Requirements and practices each owner must adhere to in order to carry out the Lessee' s affi rmative marketing procedures and requirements ;
3. Procedures to be used by owners to inform and sol icit applications from persons in the hous ing market area
who are not li kely to apply for the hous ing without
special outreach;
4. Records that will be kept describ ing actions taken by the Lessee to affirmatively market units and records to assess the results of those actions ; and
5. A descriptio n of how Less ee wil l assess the success of affirmative marketing actions and what corrective
actions will be taken where affirmative marketing
requirements are not met.
Other Require ments Wi th Whic h Lessee Will Be Required to Comply Upon Award
1. Labor. Any contract for the construction or
rehabil itation of affordable hous ing with 12 or more
units assist ed with funds made availa ble under subpart H of 24 C. F.R. Part 92 must contain a provi si on
requir ing that not less than the wages prevail ing in
the locality and the ratio of apprentices and train ees to jo urneymen, as predetermined by the Secretary of
Labor pursuant to the Davis-Bacon Act (40 U.S. C. 2761 -5 and 29 C. F. R. Parts 3, 5 and Sa), will be paid to all laborers and mechanics employed in the development of
ATTACHMENT NO. 3
TO GROUND LEASE
PAGE 2 OF 4 PAGES 487/06221 2-0041/3132412 7 103/17/98
affordable hous ing involved, such contracts must be
subj ect to the overtime provis ions, as applicable, of the Contract Work Hours and Safety Standards Act (4 0
U.S.C. 327-332). The City will require certificatio n
as to compliance with the provis ions of Section 92.354 before making any payment under such contract.
2. Lead-Based Paint. It is understood that housing
assist ed with HOME funds is subj ect to 24 C.F.R. part
35. 3. Conflict of Interest. Lessee wil l hereby comply with all requirements set forth regarding conflict of
interest provis ions as they apply in Section 92.356.
No member of Congress of the United States and no
res ident commiss ioner shall be admitted to any share or part of this Agreement or any benefit to arise from
this Agreement.
4. Debarment and Suspension. As required_ in Section
92. 357, Lessee will comply with all debarment and
suspension certifications.
5. Flood Insu rance. Under the Flood Disaster Protection Act of 1973, HOME funds may not be used with respect to the acquisition or rehabilitation of a proj ect located in an area identifie d by the Federal Emergency
Management City (F EMA) as having special flood hazards , unless:
1) The community in which the area is situated is
participating in the National Flood Ins urance
Program, or less than a year has passed since
FEMA notification regarding such hazards; and
2) Flood insurance is obtained in an area identified
by FEMA as having special flood haza rds, the City
is responsible for assu ri ng that flood ins urance
under the National Flood In surance Program is
obtained and maintained.
6. Nondiscrimination. Lesse e and its subcontractors and consultants shall not unlawfully discriminate, harass
or allow harass ment against any employee or applicant
for employment because of sex, race, color, ances try,
religious creed, national origin, physical disability
(including HIV and AID S) , mental disa bility, medic al condition (cancer) , age (over 40) , marital status and denial of family care leave. Les see shall insure that
the evaluation and treatment of its employees and
applicants for employment are free from such
discrimination and harass ment.
487/0622 l2--0041 /3132412 7 a0J/17/98
ATTACHMENT NO . 3
TO GROUND LEASE
PAGE 3 OF 4 PAGES
,.
D. Records and Repor ts
Lessee shall maintain such records and report s in order to assist th e City in meeting its record-k eeping and reporting requirements for each HOME funded activit y and project including the requirements of 42 U. S. C. § 12741 et seq. ; 24 C. F. R. §§ 92 . 216, 92 . 217, 9. 252-54, 92 . 350 -5 8, 92 . 502, 92 . 505, 92 . 508 and 92 . 509.
E. Af fordabilit y Requi rements
F.
The units located on the portion of the Project acquired with funds from the HOME Program shall meet th e affordability requirements of the HOME Program (24 C. F. R. § 92 . 252) or the provisions of Section 5 of the Ground Lease, whichever is more restrictive.
Proj ect Require ments
City shall comply with all project requirement s_ of th e HOME Program set forth in 24 C. F. R. § 92. 250-92 . 258, as applicable, in accordance with the type of project assisted.
G. Monit oring
Not less than once per year during the period the units located on the HOME Parcel are required to be maint ained affordable under th e HOME Program, City and/or City shall review Lessee' s activities and operations under the DDA and th e Lease and Lessee's compliance with th e requirements of the HOME Program in accordance with 24 C. F. R. § 92. 504( e). Such review may include on- site inspections of the Project
(including unit interiors).
487/062212-0041/31324 l2 7 a03/l7/98
ATTACHMENT NO. 3
TO GROUND LEASE
PAGE 4 OF 4 PAGES
ATTACHMENT NO. 4
Perio d Covered
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
REDEVELOPMENT AGENCY OF THE
CITY OF CHINO, CALIFORNIA
The undersi gned, CHINO HOUSING INVESTORS, L. P., a Californi a limited partnership (the "Lessee"), has read and is thoroughly familiar with the provi sions of the Disposition and Development Agreement ( "DDA") and documents referred to therein executed by Lessee and the City the Redevelopment Agency of the City of Chino ("Agency" ) includi ng, but not limited to, the Ground Lease, as such term is defined in the DDA.
All of the Eligible Tenants are United States cit izens or qualified aliens. As of the date of thi s Certi ficate, the following one-bedroom and two-bedroom resid ential units in the Project (i ) are occupi ed by Low Income Senior Citi zen- Tenants and Very Low Income Senior Citi zen Tenants (as such terms are defi ned in the Regulatory Agreement) or (ii) are curr ently vacant and being held available for such occupancy and have been so held continuously since the date a Low Income Senior Citizen Tenant or Very Low Income Senior Citizen Tenant vac ated such unit; as indic ated:
Occupi ed Vacant
Low Income Senior Citizen Tenants:
Very Low Income Senior Citi zen Tenants:
Low Income Senior Citizen Tenants and Very Low Income Senior Citi zen Tenants who commenced occu pancy of one- bedroom and two bedroom units durin g the prec edin g year :
Low Income Senior
Citi zen Lessees
One- Bedroom
Unit Nos.
Two-Bedroom
Unit Nos.
Very Low Income
Citi zen Lessees
One- Bedroom
Unit Nos.
Two- Bedroom
Unit Nos.
Attached is a separate sheet (the "Occu pancy Summary") listing, among other items, the following in formation for each unit : the number of each unit, the occupants of each unit, the rental paid for each unit, the size and number of bedrooms of each unit, which units are reser ved for Low Income Senior Citi zen Tenants and Very Low Income Senior Citizen Tenants and which units ATTACHMENT NO. 4
TO GROUND LEASE
PAGE 1 OF 2 PAGE S
487/062212-0041/3132412 7 a03/17/98
..
became reser ved for Low Income Senior Citizen Tenants and Very Low Income Senior Citizen Tenants during the preceding quarter. The infonnation contained on the Occupancy Summary is true and accurate .
The undersigned hereby certifies that (i) a review of the activities of the Lessee during such quarter and of the Lesse e' s performance under the DDA and the documents referred to therein has been made under the supervision of the undersign ed , and (i i) to the best knowledge of the undersigned , based on the review desc ribed in clause (i) hereof , the Lessee is not in default under any of the terms and provisions of the above documents or descr ibe the nature of any detail and set forth the measures being taken to remedy such defaults .
487/062212-0041/3132412 7 a03/17/98
CHINO HOUSING INVESTORS, L.P. ,
a California limited partnership
By : ________________ _
Its : ----------------
By: ------------------
Its : ----------------
ATTACHMENT NO . 4
TO GROUND LEASE
PAGE 2 OF 2 PAGES