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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of East Palo Alto
2415 University Avenue
East Palo Alto, CA 94303
Attn: City Manager
____________________________________________________________________________ No fee for recording pursuant to
Government code Section 27383 and 27388.1
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(965 Weeks Street Affordable Housing Site)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into as of _______, by and between the City of East Palo Alto, a California municipal corporation (the "City"), and MP 965 Weeks Street Associates, L.P., a California limited partnership (the "Owner").
RECITALS
A. Owner is the owner of a leasehold interest in that certain property located at 965 Weeks Street in the City of East Palo Alto, California, identified as Assessor's Parcel Numbers 063-232-210, 063-232-220, and 063-232-230, as more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by this reference (the "Property") pursuant to that certain Ground Lease dated as of __________, 2023 (as modified from time to time, the "Ground Lease"), a memorandum of which shall record in the Official Records of the County of San Mateo, State of California ("Official Records"), substantially concurrently herewith. Owner intends to construct one hundred and thirty-six (136) unit multifamily rental housing development on the Property for rental to extremely low, very low and low income households including one (1) manager's unit that is not subject to affordability restrictions. Together the Property and its improvements are the "Development".
B. City has entered into a Disposition, Development and Loan Agreement with Owner dated December 15, 2020 as amended by the First Amendment to the Disposition, Development and Loan Agreement ("DDLA") pursuant to which the City agreed to ground lease the Property to the Owner. The DDLA further provides for the City to loan to the Owner Seven Hundred Fourteen Thousand Dollars ($714,000) ("Housing Fund Loan") and Six Million Five Hundred Thousand Dollars ($6,500,000) (“State Funds Loan, and with the Housing Fund Loan, the ”City Loan”) to assist with the construction of the Development. 2 551\01\2726054.6
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C. The City conveyed a leasehold interest in the Property to Owner in its capacity as the housing successor to the former East Palo Alto Redevelopment Agency and as permitted under California Health and Safety Code Section 33433.
D. The City has agreed to ground lease the Property to the Owner and to make the City Loan on the condition that the Owner construct, maintain and operate the Development in accordance with restrictions set forth in this Regulatory Agreement and in related documents including the DDLA.
E. The Owner applied for and received a density bonus pursuant to the State Density Bonus Law (Government Code Sections 65915-65918) ("Density Bonus Law"). The Density Bonus Law requires the City to ensure and the Owner to agree to continued affordability of the Units subject to the density bonus. This Agreement satisfies the requirements and obligations of the Density Bonus Law.
F. The Owner applied for and received an allocation of Catalyst funds from the Local Initiatives Support Corporation ("Catalyst Funds") acting as the fund administrator for the Catalyst funds. In accordance with the requirements of the Catalyst Funds as set forth in Fund Administration Agreement, the City is required to ensure that units receiving Catalyst Funds meet certain affordability requirements. This Agreement satisfies the requirements and obligations of the Catalyst Funds.
G. In consideration for ground lease of the Property and receipt of the City Loan at an interest rate substantially below the market rate, Owner agrees to observe all of the terms and conditions set forth below.
THEREFORE, City and Owner hereby agree as follows.
ARTICLE 1.
DEFINITIONS
Section 1.1 Definitions. When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Article 1. (a) "Actual Household Size" shall mean the actual number of persons in the applicable household.
(b) "Affiliate" means any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Owner which, if Owner is a partnership or limited liability company, shall include each of the constituent members or partners, respectively thereof. The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person.
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(c) "Agreement" shall mean this Regulatory Agreement and Declaration of Restrictive Covenants.
(d) "Area Median Income" shall mean for the Density Bonus Units the median gross yearly income adjusted for Actual Household Size or Assumed Household Size as specified herein, in the County of San Mateo, California, as published from time to time and periodically updated in Title 25, California Code of Regulations, Section 6932 (or successor provision) by HCD. Area Median Income for all of Units other than the Density Bonus Units shall mean the median gross yearly income adjusted for Actual Household Size or Assumed Household Size as specified herein, in the County of San Mateo, California, as published from time to time by the United Stated Department of Housing and Urban Development ("HUD") for Multifamily Tax Subsidy Projects. In the event that such income determinations are no longer published or are not updated for a period of at least twelve (12) months, City shall provide the Owner with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HCD or HUD as applicable. (e) "Assumed Household Size" means the household size "adjusted for family size appropriate to the unit" in accordance with the California Tax Credit Allocation Committee rules and regulations.
(f) "City" shall mean the City of East Palo Alto, a California municipal corporation.
(g) "City Loan" shall mean all funds loaned to Owner pursuant to the DDLA. (h) "Completion Date" means the date a final certificate of occupancy, or equivalent document is issued by the City to certify that the construction of the Development is complete and the Development may be legally occupied.
(i) "DDLA" shall mean the Disposition, Development and Loan Agreement entered into by and among the City and Owner and dated as of December 15, 2020 as amended by the First Amendment to the Disposition, Development and Loan Agreement. (j) "Deed of Trust" shall mean the Leasehold Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing of even date herewith by and among Owner, as Trustor, __________ Title Company, as trustee, and the City as beneficiary, that encumbers Owner's leasehold interest in the Property to secure repayment of the City Loan and Owner's performance of the Loan Documents.
(k) "Density Bonus Units" shall mean the eleven (11) units that are restricted to Very Low Income Households at affordable rents compliant with the Density Bonus Law. (l) "Development" shall mean the Property and the one hundred and thirty-six (136) units to be developed on the Property (including one unrestricted manager's unit), and any additional improvements and all landscaping, roads and parking spaces existing thereon, as the same may from time to time exist.
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(m)"Extremely Low Income Household" shall mean a household with a Household Income which does not exceed thirty percent (30%) of Area Median Income adjusted for Actual Households Size.
(n) "Extremely Low Income Units" shall mean the Units which, pursuant to Section 2.1(b) below, are required to be occupied by Extremely Low Income Households. (o) "Fifteen Year Compliance Period" means the fifteen (15) year compliance period as described in Section 42(i)(1) of the Internal Revenue Code of 1986, as amended. (p) "Household Income" shall mean the total anticipated annual income of all persons in a household, as calculated in accordance with the California Tax Credit Allocation Committee rules and regulations or pursuant to a successor State housing program that utilizes a reasonably similar method of calculation of adjusted income. In the event that no such program exists, City shall provide the Owner with a reasonably similar method of calculation of adjusted income as provided in 25 California Code of Regulations Section 6914. (q) "Investor Limited Partner" means __________________. (r) "Loan Documents" shall mean this Agreement, the DDLA, the Note, and the Deed of Trust.
(s) "Low Income Household" shall mean household, with a Household Income which does not exceed sixty percent (60%) of the Area Median Income adjusted for Actual Household Size.
(t) "Low Income Unit" shall mean the Units which pursuant to Section 2.1(f) below, are required to be occupied by Low Income Households. (u) "Note" shall mean the promissory note from the Owner to City evidencing all or any part of the City Loan.
(v) "Owner" shall mean MP 965 Weeks Street Associates, a California limited partnership, and its respective successors and assigns to the Development. (w) "Partnership Agreement" means the Agreement of Limited Partnership, dated on or about October 24, 2019 that governs the operation and organization of Owner, as a California limited partnership, as amended from time to time. (x) "Property" shall mean the real property described in Exhibit A attached hereto and incorporated herein.
(y) "Rent" shall mean the total of monthly payments by the tenants of a Unit for the following: use and occupancy of the Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits; the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not cable or telephone service; any other interest, taxes, fees 5 551\01\2726054.6
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or charges for use of the land or associated facilities and assessed by a public or private entity other than Owner, and paid by the Tenant. Utility allowances may be determined by use of the utility allowance published by the local public housing authority or the California Utility Allowance Calculator ("CUAC") model allowed by the TCAC regulations, if the Property qualifies.
(z) "TCAC" shall mean the California Tax Credit Allocation Committee. (aa) "Tenant" shall mean a household occupying a Unit.
(bb) "Term" means the term of this Regulatory Agreement which commences as of the date of this Regulatory Agreement and shall remain in effect until the ninety-ninth (99th) anniversary of the issuance of a Certificate of Occupancy for the Development. (cc) "Units" shall mean the one hundred and thirty-six (136) rental units to be constructed by the Owner on the Property.
(dd) "Very Low Income Household" shall mean a household with a Household Income that does not exceed fifty percent (50%) of Area Median Income adjusted for Actual Households Size.
(ee) "Very Low Income Units" shall mean the Units which, pursuant to Section
2.1(d) below, are required to be occupied by Very Low Income Households.
ARTICLE 2.
AFFORDABILITY COVENANTS
Section 2.1 Occupancy Requirements.
(a) Extremely Low Income Units. Forty-One (41) of the Units shall be rented to and occupied by or, if vacant, available for occupancy by Extremely Low Income Households. (b) Very Low Income Units. Fourteen (14) of the Units shall be rented to and occupied by or, if vacant, available for occupancy by Very Low Income Households. (c) Low Income Units. Eighty (80) of the Units shall be rented to and occupied by or, if vacant, available for occupancy by Low Income Households. (d) Density Bonus Units. The Density Bonus Units shall be Very Low Income Units as long as the Household Income at initial occupancy does not exceed the qualifying income for a Very Low Income Household as determined in accordance with the Density Bonus Law and Rents for the Density Bonus Units do not exceed the allowed Rent in accordance with the Density Bonus Law.
(e) Catalyst Units. Forty-seven (47) of the Units are being funded by the Catalyst Funds. Of these forty-seven Units, fourteen (14) of the Extremely Low Income Units, fourteen (14) of the Very Low Income Units and nineteen (19) of the Low Income Units shall be considered funded by the Catalyst funds.
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(f) Manager's Unit. One (1) Unit shall be reserved for an on-site manager and shall not be subject to affordability or occupancy restrictions. (g) Unit Affordability and Bedroom Mix. All Units shall be intermingled and of comparable quality. Tenants in all Units shall have equal access to and enjoyment of all common facilities in the Development. The affordable Units must be of the bedroom size set forth in the following chart:
Extremely
Low
Income
Units
Very
Low
Income
Units
Low
Income
Units
Manager's
Unit
Total
Studio 4 1 3 8
OneBed3 1 15 19
TwoBed22 8 44 74
ThreeBed9 3 15 27
FourBed3 1 3 7
Subtotal 41 14 80 1
136
(h) No Additional Fees. Owner shall not charge any fee, other than Rent, to any resident of the Units for any housing or other services provided by Owner. (i) Disabled Persons Occupancy.
(1) Owner shall cause the Development to be operated at all times in compliance with all applicable federal, state, and local disabled persons accessibility requirements including, but not limited to the applicable provisions of: (i) the Unruh Act, (ii) the California Fair Employment and Housing Act, (iii) Section 504 of the Rehabilitation Act of 1973, (iv) the United States Fair Housing Act, as amended, (v) the Americans With Disabilities Act of 1990, and (vi) Chapters 11A and 11B of Title 24 of the California Code of Regulations, which relate to disabled persons access (collectively, the "Accessibility Requirements"). (2) Owner shall indemnify, protect, hold harmless and defend (with counsel reasonably satisfactory to the City) the City, and its city council, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Owner's failure to comply with the Accessibility Requirements. This obligation to indemnify survives termination of this Regulatory Agreement, repayment of the City Loan, cancellation of the Promissory Note, and the reconveyance of the Deed of Trust. 7 551\01\2726054.6
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Section 2.2 Allowable Rent.
(a) Extremely Low Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Extremely Low Income Units, shall not exceed one-twelfth of thirty percent (30%) of thirty percent (30%) of Area Median Income, adjusted for Assumed Household Size.
(b) Very Low Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Very Low Income Units shall not exceed one-twelfth (1/12th) of thirty percent (30%) of fifty percent (50%) of Area Median Income, adjusted for Assumed Household Size.
(c) Low Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Low Income Unit shall not exceed one-twelfth (1/12th) of thirty percent of sixty percent (60%) of Area Median Income, adjusted for Assumed Household Size. (d) Compliance with TCAC Requirements and Density Bonus Law. If there is a conflict with respect to the occupancy standards, occupancy assumptions, income limits, and rent levels that are permitted by this Regulatory Agreement and any other regulatory agreement applicable to the Units, the Owner shall comply with the TCAC requirements except for those units that are designated as the Density Bonus Units. Occupancy standards, occupancy assumptions, income limits and rent levels for the Density Bonus Units shall comply with the requirements of the Density Bonus Law for the first fifty-five years of the Term.
Section 2.3 Rent Increases.
Initial Rents and subsequent Rents for all Units are subject to City approval. All Rent increases for all Units are also subject to City approval. Notwithstanding the foregoing, City’s review and approval of Rents and Rent increases shall be limited to determining that such Rents and Rent increases comply with the requirements of this Regulatory Agreement. No later than sixty (60) days prior to the proposed implementation of any Rent increase affecting a Unit, Owner shall submit to the City a written schedule of any proposed increase in the Rent charged for Units. Except as otherwise permitted under Section 2.4 below, Rents may not be increased more often than once every twelve (12) months and by no more than five percent (5%) per year.
Owner shall provide each Tenant with at least sixty (60) days written notice of any increase in Rent applicable to such Tenant, following completion of the City approval process set forth above.
Section 2.4 Increased Income of Occupying Households.
(a) Increased Income Below Low Income Household.
(1) Subject to Section 2.3 above, in the event that, upon recertification of the income of a Tenant of an Extremely Low Income Unit, Owner determines that the income of the Tenant has increased to above the qualifying limit of an Extremely Low Income Household, but below the qualifying limit of a Very Low Income Household, the Tenant may continue to occupy the Unit and the Tenant's Rent will remain at the Extremely Low Income 8 551\01\2726054.6
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Rent. Owner shall then rent the next available Unit to an Extremely Low Income Household, at a Rent not exceeding the maximum Rent specified in Section 2.2(a). At the time that Owner rents the next available unit to an Extremely Low Income Household, the Unit with the overincome Extremely Low Income Household may be re-designated a Very Low Income Unit, or Low Income Unit consistent with the current income level of the Tenant, and as necessary to comply with the Unit mix requirements of Section 2.1 above, and at the time of such redesignation, such over-income Tenant's Rent may be increased to match the new designation, regardless of whether the Rent increase is greater than a five percent (5%) annual increase. (2) Subject to Section 2.3 above, in the event that, upon recertification of the income of a Tenant of a Very Low Income Unit or Extremely Low Income Unit, Owner determines that the income of the Tenant has increased to above the qualifying limit of a Very Low Income Household, but below the qualifying limit of a Low Income Household, the Tenant may continue to occupy the Unit and the Tenant's Rent will remain at the Very Low Income Rent, or Extremely Low Income Rent, as applicable. Owner shall then rent the next available Unit to a Very Low Income Household or Extremely Low Income Households as necessary to maintain the Unit mix requirements set forth in Section 2.1, at a Rent not exceeding the maximum Rent specified in Section 2.2(a) or (b) as applicable. At the time that Owner rents the next available unit to a Very Low Income Household or Extremely Low Income Household, the Unit with the over-income Very Low Income Household, or Extremely Low Income Household may be re-designated a Low Income Unit consistent with the current income level of the Tenant, and as necessary to comply with the Unit mix requirements of Section 2.1 above, and at the time of such re-designation, such over-income Tenant's Rent may be increased to match the new designation, regardless of whether the Rent increase is greater than a five percent (5%) annual increase.
(b) Non-Qualifying Household. If, upon recertification of the income of a Tenant of a Unit, Owner determines that a Tenant of a Unit has an Adjusted Income exceeding the maximum qualifying income for a Low Income Household, such Tenant shall be permitted to continue occupying the Unit and upon sixty (60) days written notice, the Rent may be increased to one-twelfth (1/12th) of thirty percent (30%) of the actual Adjusted Income of the Tenant, regardless of whether the Rent increase is greater than a five percent (5%) annual increase, and Owner shall rent the next available Unit to an Extremely Low Income Household, Very Low Income Household, or a Low Income Household, as applicable, at a Rent not exceeding the maximum Rent specified in Section 2.2, or designate another Unit in the Development with an Extremely Low Income Household as an Extremely Low Income Unit, a Very Low Income Household as a Very Low Income Unit, or a Low Income Household as a Low Income Unit, as applicable, to meet the Unit mix requirements of Section 2.1 above. (c) Termination of Occupancy. Upon termination of occupancy of a Unit by a Tenant, such Unit shall be deemed to be continuously occupied by a household of the same income level (e.g., Extremely Low Income Household, Very Low Income Household, or Low Income Household) as the initial income level of the vacating Tenant, until such Unit is reoccupied, at which time the income character of such Unit shall be redetermined to meet the occupancy requirements of Section 2.1 above.
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(d) Continued Compliance. In the event an occupant household's income increases and the rent is increased as set forth in Sections (a) and (b) above, the Unit shall continue to be classified as an Extremely Low Income Unit, Very Low Income Unit, or a Low Income Unit, as applicable, until such time as the Unit is either vacated by the occupant or another Unit is rented at the applicable income limit.
(e) Rent Increase after 55 years. Fifty-five (55) years after the issuance of a certificate of occupancy for the Development, the Owner may request in writing that the City agree to increase the Rents for one or more of the Extremely Low Income Units and/or the Very Low Income Units if necessary to maintain the Development's financial feasibility. The City will provide written consent to allow Owner to increase the Extremely Low Income Units Rents and the Very Low Income Unit Rents only upon the City's determination that such rent increase is necessary to maintain the Development's financial feasibility and then only to the extent necessary to maintain the financial feasibility, starting the year after the 55th anniversary of the Project’s receipt of a certificate of occupancy, for the remainder of the Term. Any Rent increase allowed shall: (i) not cause the Units Rent to exceed the Low Income Household Rents, (ii) be in an amount approved by the City, (ii) not exceed the amount necessary for the financial feasibility of the Development, and (iv) not result in displacement of any current Tenants. Any necessary rent increases shall be phased in as gradually as possible, consistent with maintaining the Development’s financial feasibility. Rent increases pursuant to this Section 2.4(e) may be approved by the City Manager or his or her designee.
(f) Subsidy Loss Rent Increase. In the event that project-based rental assistance or operating subsidy to the Development is terminated, reduced or not renewed due to a change in federal law and through no fault of Owner, Owner may provide a written request to the City to increase Rents for one or more of the Extremely Low Income Units and/or Very Low Income Units. The City will provide written consent to allow Owner to increase the Extremely Low Income Units Rent and the Very Low Income Unit Rents only upon the City's determination that no other rental assistance or operating subsidy is available and such increase is necessary for the financial feasibility of the Development. Any Rent increase allowed shall: (i) not cause the Units Rent to exceed the Low Income Household Rents, (ii) be in an amount approved by the City, (iii) not exceed the amount necessary for the financial feasibility of the Development, (iv) not result in displacement of any current Tenant; and (v) be permitted by TCAC and other Development lenders and investors. Any necessary rent increases shall be phased in as gradually as possible, consistent with maintaining the Development’s financial feasibility. Notwithstanding the foregoing, this subsection shall not apply to the Density Bonus Units. Rent increases pursuant to this Section 2.4(f) may be approved by the City Manager or his or her designee.
Section 2.5 Condominium Conversion. The Owner shall not convert the Development or any Units to condominium or cooperative ownership or sell condominium or cooperative conversion rights to the Property during the Term of this Agreement. 10 551\01\2726054.6
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ARTICLE 3.
INCOME CERTIFICATION AND REPORTING
Section 3.1 Income Certification.
Owner shall obtain, complete, and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Tenant renting any of the Units. Owner shall make a good faith effort to verify that the income provided by an applicant or occupying household in an income certification is accurate by taking two (2) or more of the following steps as a part of the verification process: (i) obtain a pay stub for the most recent two (2) months of pay period; (ii) obtain an income tax return for the most recent tax year; (iii) conduct a credit agency or similar search; (iv) obtain an income verification form from the applicant's current employer verifying employment for the last two (2) months; (v) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (vi) if the applicant is unemployed and has no such tax return, obtain another form of independent verification.
Owner shall also complete and/or have the Tenants of the Units complete and sign the "Income Computation and Certification" and the "Owner's Certification of Household Income" both of which are attached hereto as Exhibit B and incorporated herein by this reference, or any other form approved by the City, and/or any other forms related to Tenants' income provided to Owner by the City or that provide income information that is sufficient to determine an applicant's income as required by this Section. Copies of Tenant income certifications shall be made available to the City upon request.
Section 3.2 Resident/Workforce Priority.
To the extent permitted by law, including applicable federal and state fair housing laws, and to the extent permitted by the other Project funding sources, Owner shall also comply with the City local preference policy in the selection of tenants. Owner's Marketing Plan and Tenant Selection Plan must reflect City-wide outreach in order to satisfy this requirement. The City's resident/workforce preference applies to the rentals of the Units throughout the Term. Owner shall not, without the prior written consent of the City, give any other preference to any particular class or group of persons in renting the Units, except to the extent that the Units are required to be leased to eligible households pursuant the requirements concerning the applicable provisions of any project based vouchers provided to the Development.
Section 3.3 Reporting Requirements.
Upon completion of the construction, Owner shall submit to the City quarterly Development status reports for the first year of Development operation no later than ninety (90) days after the end of each quarter. Thereafter, Owner shall submit to the City annual reports in a form approved by the City, no later than one hundred twenty (120) days after the end of Owner's fiscal year. The reports shall contain such information as the City may require, including, but not limited to, the following:
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A statement of the fiscal condition of the Development, including a financial statement indicating surpluses or deficits in operating accounts for the period covered, a detailed itemized listing of income and expenses, and the amounts of any Development reserves.
The report due after the end of each fiscal year shall contain an audited version of this statement.
Such audit shall be prepared in accordance with the requirements of the City and certified at the Development's expense by an independent Certified Public Accountant licensed by the State of California. Owner shall also follow audit requirements of the Single Audit Act and 2 C.F.R. Part 200.
The substantial physical defects in the Development, if any, including a description of any major repair or maintenance work undertaken in the reporting period.
The occupancy of the Development indicating:
(1) A listing of current Tenants' names, income levels, Rent charged and paid, move-in dates, and the race and ethnic groups of Tenants; (2) The number of applicants denied/accepted for tenancy with a household member with criminal convictions, along with the basis of denials; (3) A listing of the Tenants in the targeted group identified in Section
3.2 above;
(4) The number of Tenants receiving services for each year and an assessment of compliance with the Resident Services Plan; and (5) General management performance, including Tenant relations and other relevant information.
Upon request of the City, Owner shall furnish, within fifteen (15) days, copies of all Tenant agreements for the Units. Within fifteen (15) days after receipt of a written request from the City, Owner shall also submit any other information or completed forms requested by the City (provided, however, that Owner shall in no event be obligated to provide any information that it cannot legally obtain as a housing provider).
Section 3.4 Additional Information.
Owner shall provide any additional information reasonably requested by the City. The City shall have the right to examine and make copies of all books, records or other documents of Owner which pertain to the Development.
Section 3.5 Tenant Records.
Owner shall maintain complete, accurate and current records pertaining to the income and household size of Tenants. All Tenant lists, applications and waiting lists relating to the Development shall at all times be kept separate and identifiable from any other business of Owner and shall be maintained as required by the City, in a reasonable condition for proper audit and subject to examination during business hours by representatives of the City. Owner shall 12 551\01\2726054.6
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retain copies of all materials obtained or produced with respect to occupancy of the Units for a period of at least five (5) years. The City may examine and make copies of all books, records or other documents of Owner that pertain to the Tenants.
Section 3.6 Development Records.
Owner shall keep and maintain at the principal place of business of the Owner set forth in Section 6.11 below, or elsewhere with the City's written consent, full, complete and appropriate books, records and accounts relating to the Development. Owner shall cause all books, records and accounts relating to its compliance with the terms, provisions, covenants and conditions of the Loan Documents to be kept and maintained in accordance with generally accepted accounting principles consistently applied, and to be consistent with requirements of this Agreement. Owner shall cause all books, records, and accounts to be open to and available for inspection and copying by HUD, the City, its auditors or other authorized representatives at reasonable intervals during normal business hours. Owner shall cause copies of all tax returns and other reports that Owner may be required to furnish to any government agency to be open for inspection by the City at all reasonable times at the place that the books, records and accounts of Owner are kept. Owner shall preserve such records for a period of not less than five (5) years after their creation in compliance with all HUD records and accounting requirements. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the City Loan is pending at the end of the record retention period stated herein, then Owner shall retain the records until such action and all related issues are resolved. Owner shall cause the records to include all invoices, receipts, and other documents related to expenditures from the City Loan funds. Such records are to include but are not limited to:
(1) Records providing a full description of the activities undertaken with the use of the City Loan funds;
(2) Records demonstrating compliance with the affordability and income requirements for Tenants;
(3) Records documenting compliance with the fair housing, equal opportunity, and affirmative fair marketing requirements; (4) Records demonstrating compliance with applicable relocation requirements which must be retained for at least five (5) years after the date by which persons displaced from the Property have received final payments; (5) Records demonstrating compliance with Section 3, and labor requirements, including (a) certified payrolls from Owner's general contractor evidencing that applicable prevailing wages have been paid and (b) prevailing wage monitoring reports in a form approved by the City; and
(6) Financial and other records as required by 2 C.F.R. Part 200.
The City shall notify Owner of any records it deems insufficient. Owner shall have fifteen (15) days after the receipt of such a notice to correct any deficiency in the records 13 551\01\2726054.6
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specified by the City in such notice, or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Owner shall begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
ARTICLE 4.
OPERATION OF THE DEVELOPMENT
Section 4.1 Residential Use.
The Development shall be operated only for residential use. No part of the Development shall be operated as transient housing. Owner shall provide to Tenants and post in a public location at the Development a "Tenants Rights and Responsibilities" document in the form provided by the City.
Section 4.2 Compliance with Loan Documents and Regulatory Requirements.
Owner's actions with respect to the Property shall at all times be in full conformity with: (i) all requirements of the Loan Documents then applicable to the Development; and (ii) any other regulatory requirements, then applicable to the Development, or imposed on the Development including but not limited to regulatory agreements associated with the Low Income Housing Tax Credits provided by the California Tax Credit Allocation Committee, and rental subsidies provided to the Development ("Development Regulatory Documents").
Owner shall promptly notify the City in writing of the existence of any default under any Development Regulatory Documents and provide the City copies of any such notice of default.
Section 4.3 Taxes and Assessments.
Owner is solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Development, and shall pay such charges prior to delinquency and at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property. Owner is also solely responsible for payment of all personal property taxes, and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, and shall pay such charges prior to delinquency and at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property.
However, Owner is not required to pay and discharge any such charge so long as: (i) the legality thereof is being contested diligently and in good faith and by appropriate proceedings; and (ii) if requested by the City, Owner deposits with the City any funds or other forms of assurance that the City in good faith from time to time determines appropriate to protect the City from the consequences of the contest being unsuccessful. 14 551\01\2726054.6
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In the event Owner exercises its right to contest any tax, assessment, or charge against it, Owner, on final determination of the proceeding or contest, will immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.
Owner shall not apply for a property tax exemption for the Property under any provision of law except California Revenue and Taxation Code Section 214(g) without the prior written consent of the City.
Section 4.4 Marketing Plan.
No later than six (6) months prior to the projected date of the completion of the Development, Owner shall submit to the City for approval its plan for marketing the Development ("Marketing Plan"), to ensure that target populations, Citywide and local residents and workforce populations will be aware of the housing opportunities in the Development.
Specifically, the Marketing Plan must include information on Owner's plan to: (i) affirmatively market the Development, (ii) comply with fair housing laws, and (iii) meet the targeting requirements in Section 3.2.
Upon receipt of the Marketing Plan, the City shall promptly review the Marketing Plan and shall approve or disapprove it within fifteen (15) days after submission, provided that such approval shall not be unreasonably denied. If City does not approve or disapprove within such fifteen-day period, the Marketing Plan shall be deemed approved. If the Marketing Plan is not approved, the City shall set forth in writing and notify Owner of the City's reasons for withholding such approval. Owner shall submit a revised Marketing Plan within fifteen (15) days thereafter, and the City shall approve or disapprove it within fifteen (15) days after submission, provided that such approval shall not be unreasonably denied. If the City still does not approve the revised Marketing Plan, Owner and City shall meet and confer and use good faith best efforts to revise the Marketing Plan such that it addresses the City's objections.
Owner shall comply with the approved Marketing Plan during the Term and may not make material modifications to the Marketing Plan without the prior written approval of the City, which approval shall not be unreasonably withheld.
Section 4.5 Tenant Selection Plan.
No later than six (6) months prior to the projected date of the completion of the Development, Owner shall submit to the City for approval its policies and criteria for selecting tenants for the Development to ensure that the leasing of the Development will be conducted in a manner that provides fair and equal access under the law ("Tenant Selection Plan"). The Tenant Selection Plan may be part of the Marketing Plan. The Tenant Selection Plan must include information on Owner's plan to: (i) limit occupancy to income-eligible households, (ii) give notice to applicants of rejection and grounds for rejection,(iii) manage applicants on a wait list for occupancy in the Development, and (iv) comply with fair housing laws.
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Upon receipt of the Tenant Selection Plan, the City shall promptly review the Tenant Selection Plan and shall approve or disapprove it within fifteen (15) days after submission, provided that such approval shall not be unreasonably denied. If the City does not approve or disapprove the Tenant Selection Plan within such fifteen (15) day period, the Tenant Selection Plan shall be deemed approved. If the Tenant Selection Plan is not approved, the City shall set forth in writing and notify Owner of the City's reasons for withholding such approval.
Owner shall submit a revised Tenant Selection Plan within fifteen (15) days thereafter, and the City shall approve or disapprove it within fifteen (15) days after submission, provided that such approval shall not be unreasonably denied. If the City does not approve the revised Tenant Selection Plan, Owner and City shall meet and confer and use good faith efforts to revise the Tenant Selection Plan such that is addresses the City's objections.
Owner shall comply with the approved Tenant Selection Plan during the Term and may not make material modifications to the Tenant Selection Plan without the prior written approval of the City, which approval shall not be unreasonably withheld.
Section 4.6 Resident Services Plan and Budget.
No later than six (6) months prior to the projected date of the completion of the Development, Owner shall submit to the City a plan for providing supportive services to the Tenants ("Resident Services Plan") and a budget for providing those services ("Resident Services Budget") for the initial year of operation of the Development. Services shall the needs of the residents of the Development which may include, but are not limited to, the following services: after-school programs of an ongoing nature for school age children, financial planning skills, job coaching, and/or the availability of a bona fide services coordinator to the Tenants.
The Resident Services Plan must identify service provider(s) and staffing levels, and describe the services provided. The Resident Services Plan must include copies of contracts and/or memoranda of understanding for the provision of services by service providers, along with any annual compliance certifications. The Resident Services Budget must state the dollar value of the services, and the funding source(s) for the services (cash or in-kind).
Upon receipt by the City of the proposed Resident Services Plan and Resident Services Budget, the City shall promptly review the same and approve or disapprove it within fifteen (15) days, provided that such approval shall not be unreasonably denied. If the City does not approve or disapprove the Resident Services Plan and the Resident Services Budget within such fifteen (15) day period, the Resident Services Plan and the Resident Services Budget shall be deemed approved. If the Resident Services Plan and/or Resident Services Budget are not approved by the City, the City shall set forth in writing and notify Owner of the City's reasons for withholding such approval, which may include a request by the City for a change in the nature or scope of resident services or a change in service provider. Owner shall, within fifteen (15) days thereafter, submit a revised Resident Services Plan and/or Resident Services Budget for City approval in accordance with this subsection. If the City does not approve the revised Resident Service Plan, Owner and the City shall meet and confer and use good faith efforts to revise the Resident Services Plan and/or Resident Services Budget such that its addresses the City's objection.
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Owner shall thereafter submit to the City annual updates to the Resident Services Plan and Resident Services Budget by October 1st of each year of operation of the Development, identifying any changes made to the previously approved Resident Services Plan and Resident Services Budget. Any revisions to the Resident Services Plan and Resident Services Budget shall be subject to the City's review and approval and the process for timing and review of such revisions shall be subject to the process identified in subsection (b).
Section 4.7 Lease Provisions.
No later than four (4) months prior to the date construction of the Development is projected to be complete, Owner shall submit to the City Owner’s proposed form of lease agreement for the City's review and approval. When leasing Units within the Development, Owner shall use the form of lease approved by the City. The form of lease must comply with all requirements of this Agreement, the other Loan Documents and must, among other matters:
(1) Provide for termination of the lease and consent by the Tenant to immediate eviction for failure: (i) to provide any information required under this Agreement or reasonably requested by Owner to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy in the Development in accordance with the standards set forth in this Agreement, and (ii) to qualify as an Extremely Low Income, Very Low Income or Low Income Household, as applicable, as a result of any material misrepresentation made by such Tenant with respect to the income computation. (2) Be for an initial term of not less than one (1) year, unless by mutual agreement between the Tenant and Owner, and provide for no increase in Rent during such year. After the initial year of tenancy, the lease may be month-to-month by mutual agreement of Owner and the Tenant. Notwithstanding the above, any Rent increases shall be subject to the requirements of Section 2.3.
(3) Include a provision which shall require a Tenant who is residing in a Unit made accessible and who is not in need of an accessible Unit to move to a non-accessible Unit when a non-accessible Unit becomes available and another Tenant or prospective Tenant is in need of an accessible Unit.
(4) Include any provisions necessary to comply with the requirements of the Violence Against Women Reauthorization Act of 2013 (Pub. L. 113–4, 127 Stat. 54) applicable to HUD-funded programs.
Any termination of a lease or refusal to renew a lease for a Unit within the Development must be preceded by not less than sixty (60) days written notice to the Tenant by Owner specifying the grounds for the action.
Section 4.8 Annual Operating Budget; Operating Deficiencies.
Owner, at least sixty (60) days prior to the end of each of Owner's fiscal years, shall furnish the City a budget for the operation of the Development (the "Annual Operating Budget"). The City may request additional information to assist the City in evaluating 17 551\01\2726054.6
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the financial viability of the Development. Upon receipt by the City of the proposed Annual Operating Budget, the City shall promptly review the same and approve or disapprove it within fifteen (15) days, provided that such approval shall not be unreasonably denied. If the City does not approve or disapprove the Annual Operating Budget within such fifteen (15) day period, the Annual Operating Budget shall be deemed approved. If the Annual Operating Budget is not approved by the City, the City shall set forth in writing and notify Owner of the City's reasons for withholding such approval. Owner shall thereafter submit a revised Annual Operating Budget for City approval within thirty (30) days, which approval shall be granted or denied within fifteen (15) days in accordance with the procedures set forth above.
Owner shall promptly notify the City upon Owner's discovery that Owner's rental income and other Development subsidies are insufficient to pay for any or all operating expenses incurred by Owner in connection with the operations of the Development.
Section 4.9 Reserves; City Approval of Use of Reserve Funds.
Replacement Reserve Account. Owner shall establish and maintain an account that is available for capital expenditures for repairs and replacement necessary to maintain the Development in the condition required by the Loan Documents ("Replacement Reserve Account"). Owner shall deposit and maintain in the Replacement Reserve Account the minimum amount of $68,000.
Operating Reserve Account. Owner shall establish and maintain an account that is available to fund operating deficits (which is the amount by which annual Operating Expenses exceed Operating Revenue for any period) ("Operating Reserve Account").
Owner shall capitalize the Operating Reserve Account at the conversion of Development financing to permanent financing in the amount of three (3) months of annual Operating Expenses; provided, however that if the Partnership Agreement or the documents evidencing the permanent financing require the Operating Reserve Account to be capitalized and replenished in an greater amount, Owner shall capitalize and replenish the Operating Reserve Account as required by the Partnership Agreement or the documents evidencing the permanent financing, as applicable, for as long as the Partnership Agreement or the permanent financing, as applicable, is outstanding.
Consent to Withdraw Funds. Prior to the use of funds from any reserve account, Owner must submit a written request to withdraw funds from the reserve account if such withdrawal will exceed Five Thousand Dollars ($5,000) or if the cumulative of all draws made to date exceed Twenty Thousand ($20,000). The written request shall specify the amount requested and state how the funds will be used. The City shall approve such request within thirty (30) days of receipt of the written request for use of reserves; such approval shall not be unreasonably withheld. If the City does not approve or disapprove the withdrawal of funds within such thirty (30) day period, the request shall be deemed approved.
Section 4.10 Additional City Requirements.
Owner shall comply with all applicable laws and regulations governing the use of the City Loan, this Agreement and the other Loan Documents. 18 551\01\2726054.6
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ARTICLE 5.
PROPERTY MANAGEMENT AND MAINTENANCE
Section 5.1 Management Responsibilities.
Owner is responsible for all management functions with respect to the Development, including, without limitation, the selection of Tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility over management of the Development. Owner shall retain a professional property management company approved by the City in writing its reasonable discretion to perform Owner's management duties hereunder, pursuant to Section 5.2 below. A resident manager shall also be required.
Section 5.2 Management Agent.
Owner shall cause the Development to be managed by an experienced management agent reasonably acceptable to the City, with demonstrated ability to operate residential facilities like the Development in a manner that will provide decent, safe, and sanitary housing (as approved, the "Management Agent"). Owner shall submit for the City's written approval the identity of any other proposed Management Agent. Owner shall also submit such additional information about the background, experience and financial condition of any proposed management agent as is reasonably necessary for the City to determine whether the proposed management agent meets the standard for a qualified management agent set forth above. If the proposed management agent meets the standard for a qualified management agent set forth above, the City shall approve the proposed management agent by notifying Owner in writing. Unless the proposed management agent is disapproved by the City within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved. The City hereby approves MidPen Property Management Corporation as the property manager for the Development.
Section 5.3 Periodic Performance Review.
The City reserves the right to conduct an annual (or more frequently, if deemed necessary by the City) review of the management practices and financial status of the Development. The purpose of each periodic review will be to enable the City to determine if the Development is being operated and managed in accordance with the requirements and standards of this Agreement. Owner shall cooperate with the City in such reviews.
Section 5.4 Replacement of Management Agent. If, as a result of a periodic review, the City determines in its reasonable judgment that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, the City shall deliver written notice to Owner of its intention to cause replacement of the Management Agent, including the reasons therefor. Within fifteen (15) days after receipt by Owner of such written notice, City staff and Owner shall meet in good faith to consider methods for improving the 19 551\01\2726054.6
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financial and operating status of the Development, including, without limitation, replacement of the Management Agent.
If, after such meeting, City staff recommends in writing the replacement of the Management Agent, Owner shall promptly dismiss the current Management Agent, and shall appoint as the Management Agent a person or entity meeting the standards for a management agent set forth in Section 5.2 above and approved by the City pursuant to Section 5.2 above.
Any contract for the operation or management of the Development entered into by Owner shall provide that the Management Agent may be dismissed and the contract terminated as set forth above. Failure to remove the Management Agent in accordance with the provisions of this Section shall constitute a default under this Agreement, and the City may enforce this provision through legal proceedings as specified in Section 6.5 below.
Section 5.5 Approval of Management Policies.
Owner shall submit its written management policies with respect to the Development to the City for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement.
Section 5.6 Property Maintenance.
City Standards. The City places prime importance on quality maintenance to protect its investment and to ensure that all City-assisted housing projects within the City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the City assuming Owner agrees to provide all necessary improvements to assure the Development is maintained in good condition. Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair.
Maintenance Requirements. For the entire Term of this Agreement Owner shall maintain all interior and exterior improvements, including landscaping, on the Property in decent, safe and sanitary condition, and good condition and repair (and, as to landscaping, in a healthy condition), in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, City, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials.
Owner shall cause the Development to be free of all health and safety defects. Owner shall correct any life-threatening maintenance deficiencies, immediately upon notification.
Violation of Maintenance Requirements. In the event that Owner breaches any of the covenants contained in this section and Owner does not commence to cure such breach within (i) a period of five (5) business days after written notice from City (and diligently prosecute such cure to completion within ten (10) business days following such notice) with respect to graffiti, debris, waste material, landscaping and general maintenance or (ii) or a period of ten (10) business days after written notice from the City (and diligently prosecute such cure to completion within thirty (30) days following such notice) with respect to building improvements, then the City, in addition to whatever other remedy it may have at law or in equity, shall have the right to enter upon the Development and the Owner's interest in the 20 551\01\2726054.6
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Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City shall be permitted (but is not required) to enter upon the Development and the Owner's interest in the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Development and the Owner's interest in the Property, and to attach a lien on the Development and the Owner's interest in the Property, or to assess on the Development and the Owner's interest in the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, which amount shall be promptly paid by Owner to the City upon demand.
Section 5.7 Inspections.
The City shall have the right to perform an on-site inspection of the Development when deemed necessary by the City, in any event at least one (1) time per year upon reasonable notice to Owner to ensure compliance with the requirements of the Loan Documents. Owner agrees to cooperate in such inspection.
After the completion of an inspection, the City shall deliver a copy of the inspection report to Owner. If the City determines as a result of such inspection that there are any life-threatening health and safety related deficiencies, Owner has the obligation to correct such deficiencies immediately. If the City determines as a result of the inspection that there are any deficiencies for any of the inspectable items in the Development, Owner shall correct such deficiencies within fifteen (15) days from the delivery of the inspection report or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Owner must begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible. In addition, Owner acknowledges that the City may reinspect the Development to verify all deficiencies have been corrected or rely on third party documentation submitted by Owner for non-hazardous deficiencies.
Section 5.8 Asset Management.
Owner is responsible for all asset management functions with respect to the Development, including, without limitation, the oversight of the Management Agent, maintaining accurate and current books and records for the Development, and promptly paying costs incurred in connection with the Development. The City shall have no responsibility over asset management of the Development.
ARTICLE 6.
MISCELLANEOUS
Section 6.1 Nondiscrimination.
Owner covenants by and for Owner, its assigns, and all persons claiming under or through Owner, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, familial status, source of income, ancestry or national origin, Vietnam era veteran's status, political affiliation, HIV/AIDS, or any other arbitrary basis, in the leasing, 21 551\01\2726054.6
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subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall Owner or any person claiming under or through Owner, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the construction, operation and management of any Unit.
Notwithstanding the above, with respect to familial status, the above should not be construed to apply to housing for older persons as defined in Section 12955.9 of the Government Code and other applicable sections of the Civil Code as identified in Health and Safety Code Section 33050(b).
Nothing in this Section prohibits Owner from requiring Units in the Development to be available to and occupied by eligible households in accordance with this Agreement.
Owner shall accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor.
Owner shall not apply selection criteria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective Tenants, nor shall Owner apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Tenants.
Section 6.2 Application of Provisions.
The provisions of this Agreement shall apply to the Development and the Owner's interest in the Property for the entire Term, even if the entire City Loan is paid in full prior to the end of the Term. This Agreement binds any successor, heir or assign of Owner, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by the City. The City makes the City Loan on the condition, and in consideration of, this provision, and would not do so otherwise.
Section 6.3 Notice of Expiration of Term.
At least six (6) months prior to the expiration of the Term, Owner shall provide by first-class mail, postage prepaid, a notice to all Tenants containing (i) the anticipated date of the expiration of the Term, (ii) any anticipated increase in Rent upon the expiration of the Term, (iii) a statement that a copy of such notice will be sent to the City, and (iv) a statement that a public hearing may be held by the City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. Owner shall also file a copy of the above-described notice with the City Manager.
In addition to the notice required above, Owner shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (i) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Entities (as defined in California Government Code Section 65863.10(a), which would include the City Manager) prior to the expiration of the Term, (ii) a 22 551\01\2726054.6
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six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Entities prior to the expiration of the Term; (iii) a notice of an offer to purchase the Development to "qualified entities" (as defined in California Government Code Section 65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; (iv) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Development.
Section 6.4 Covenants to Run With the Land.
The City and Owner hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall run with the land, and shall bind all successors in title to the Development; provided, however, that on the expiration of the Term, said covenants and restrictions expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Development or the Owner's interest in the Property or any portion thereof, is to be held conclusively to have been executed, delivered and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the City expressly releases such conveyed portion of the Development or the Owner's interest in the Property from the requirements of this Agreement.
Section 6.5 Enforcement by the City.
If Owner fails to perform any obligation under this Agreement, and fails to cure the default within thirty (30) days after the City has notified Owner in writing of the default or, if the default cannot be cured within thirty (30) days, failed to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, the City shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law:
Calling the City Loan. The City may declare a default under the Note, accelerate the indebtedness evidenced by the Note and proceed with foreclosure under the Deed of Trust.
Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel Owner's performance of its obligations under this Agreement, and/or for damages.
Remedies Provided Under Loan Documents. The City may exercise any other remedy provided under the Loan Documents.
Section 6.6 Attorneys' Fees and Costs.
In any action brought to enforce this Agreement, the prevailing party shall be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.
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Section 6.7 Recording and Filing.
The City and Owner shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records of the County of San Mateo. This Agreement shall be recorded against the Property senior to the Senior Loan deed of trust.
Section 6.8 Governing Law.
This Agreement is governed by the laws of the State of California.
Section 6.9 Waiver of Requirements.
Any of the requirements of this Agreement may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Agreement shall, or shall be deemed to, extend to or affect any other provision of this Agreement.
Section 6.10 Amendments.
This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the Official Records of the County of San Mateo. Any legal fees incurred due to any amendment of this Agreement, or any of the Loan Documents, shall be paid for by the Owner.
Section 6.11 Notices.
Formal notices, demands, and communications between the Parties shall be sufficiently given if, and shall not be deemed given unless, dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the Parties as follows:
City: City of East Palo Alto
2415 University Avenue
East Palo Alto, CA 94303
Attn: City Manager
With a copy to: City of East Palo Alto
1960 Tate Street
East Palo Alto, CA 94303
Attn: Community & Economic Development Director
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Owner: MP 965 Weeks Street Associates, L.P.
c/o MidPen Housing Corporation
303 Vintage Park Dr. Suite 250
Foster City, CA 94404
Attn: Chief Real Estate Development Officer
c/o East Palo Alto Community Alliance and Neighborhood
Development Organization
2369 University Avenue
East Palo Alto, California 94303
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 6.12 Severability.
If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby.
Section 6.13 Multiple Originals; Counterparts.
This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the City and Owner have executed this Agreement by duly authorized representatives, all on the date first written above.
CITY:
CITY OF EAST PALO ALTO, a California
municipal corporation
By: _______________________________
Melvin E. Gaines, City Manager
Approved as to form:
By: ________________________________
John D. Lê, City Attorney
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OWNER:
MP 965 Weeks Street Associates, L.P.,
a California limited partnership
By: MP CANDO Weeks Street, LLC,
a California limited liability company,
its general partner
By: MidPen Housing Corporation,
a California nonprofit public benefit
corporation, its manager
By: ____________________________
Name: __________________________
Its: _____________________________
By: East Palo Alto Community Alliance and
Neighborhood Development Organization,
a California nonprofit public benefit
corporation,
its member
By: ____________________________
Name: __________________________
Its: _____________________________
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STATE OF CALIFORNIA )
)
CITY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: _______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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STATE OF CALIFORNIA )
)
CITY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
A-1
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EXHIBIT A
Property Description
[to be added]
A-1
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EXHIBIT B
I, the Undersigned, certify that I have read and answered fully, and truthfully each of the following questions for all persons in the household who are to occupy a room in this house for which application is made.
Occupant's Name Social Security # Age Place of Employment Annual Income
1. 2.
3. 4.
5. 6.
7. TOTAL:
The total anticipated annual household income* for the twelve (12) month period beginning this date (the sum of the final column): $ _____________________.
Signed: __________________________ Date: ____________________ Head of Household
* The anticipated annual Income as determined by Attachment A.
A-2
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Owner's Certification of Household Income
Household Name ______________________
I certify, as Owner/Management Agent for ___________________________ that I have verified this Household's Income by using the following:
1. Tax returns ____________________
2. Place of employment verification ____________________
3. Pay stubs ____________________
4. Notarized statement from lessee ____________________
5. Other (please describe) ____________________
_____________________________
Owner/Management Agent
______________________
Date