1 2348\02\4099482.3
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
The City of Fairfield
1000 Webster Street
Fairfield, CA 94533
Attn: City Manager
with a copy to:
Fairfield North Texas Street LP
5251 Ericson Way, Suite A
Arcata, CA 95521
Attention: Project Manager
No fee for recording pursuant to
Government Code Sections 27383, 27388.1, and 6103
APN: 0167-130-240 (SPACE ABOVE THIS LINE FOR RECORDER'S USE)
SUBORDINATION AGREEMENT
(Vista Ridge Homekey Regulatory Agreement)
THIS SUBORDINATION AGREEMENT (the "Agreement") is made as of [___________], 2025, by FAIRFIELD NORTH TEXAS STREET LP, a California limited partnership (the "Owner"), the CITY OF FAIRFIELD, a general law city (the "City"), and BANC OF CALIFORNIA, a California corporation (the “Lender”). Collectively, Owner, the City, and Lender are referred to as the “Parties,” or individually as a “Party.”
RECITALS
A. Owner owns that certain real property located at 3331 North Texas Street, in the City of Fairfield, County of Solano, State of California, as more particularly described in Exhibit A (the "Property"), currently improved with a hotel that will be converted to a fifty-one (51) unit affordable housing development, consisting of two (2) studio units, forty-eight (48) one- bedroom units, and one (1) unrestricted two-bedroom manager’s unit (the "Improvements").
The Property and the Improvements are collectively referred to as the "Development."
B. California Health and Safety Code Section 50675.1.1 established the Homekey Program (the "Homekey Program"). The California Department of Housing and Community Development ("HCD") issued a Notice of Funding Availability for the Homekey+ Program, Round 3 on November 26, 2024 (amended January 31, 2025 and August 7, 2025). HCD awarded the City Homekey+ Program funds in the form of a grant. Owner and the City entered into that certain Affordability Restrictions and Regulatory Agreement (Local Housing Trust Fund, Prohousing Incentive Program, Homekey+) dated as of even date herewith (the "Homekey Regulatory Agreement") in connection with an allocation of Homekey Program funds in the amount of [Twenty-One Million, Five-Hundred Thirty-Five Thousand, Five Hundred Forty 2 2348\02\4099482.3
Dollars ($21,535,540)] (the "Homekey Funds) for the rehabilitation of the Development to be converted from a hotel and used for affordable housing. In addition to the Homekey Funds, the City is also providing to Owner Fairfield Housing Trust Fund financing in the amount of One Million Dollars ($1,000,000) (the “FHTF Funds”) and Prohousing Incentive Program financing in the amount of Five Hundred Thirty-Five Thousand, Five Hundred Forty-One Dollars ($535,541) (the “PIP Funds”). The Homekey Funds, FHTF Funds, and PIP Funds totaling Twenty-Three Million Seventy-One Hundred Thousand Eighty-One Dollars ($23,071,081) will be secured by that Certain Deed of Trust with Assignment of Rents (Short Form) to be recorded concurrent herewith (the “City Deed of Trust”).
C. Owner and Lender entered into that certain [Loan Agreement] dated concurrently herewith, pursuant to which Lender will provide a construction bridge loan and permanent loan in the approximate amount of [Three Million Two Hundred Thirty-Five Thousand Three Hundred Ninety-Seven Dollars ($3,235,397)] (the "Lender Funds"). The Lender Funds will be secured by that certain [Deed of Trust with Assignment of Rents] to be recorded concurrent herewith (the “Lender Deed of Trust”).
D. As a condition to providing the Homekey Funds, and pursuant to the requirements of the Homekey Regulatory Agreement, the Homekey Regulatory Agreement must be recorded in a senior position against the Property. HCD requires that the City, Lender, and Owner execute and deliver this Subordination Agreement, subordinating the City Deed of Trust and Lender Deed of Trust to the Homekey Regulatory Agreement.
NOW THEREFORE, for good and valuable consideration, the Parties agree as follows:
1. Owner, Lender, and the City each acknowledge and agree for the benefit of the City and HCD that the Homekey Regulatory Agreement shall unconditionally be and at all times remain a lien or charge on the Property prior and superior to the rights of the City under the City Deed of Trust and Lender under the Lender Deed of Trust. Lender intentionally and unconditionally subordinates all of the Lender's right, title and interest in and to the Lender Deed of Trust to the lien or charge of the Homekey Regulatory Agreement. The City intentionally and unconditionally subordinates all of the City’s right, title and interest in and to the City Deed of Trust to the liens or charges of the Homekey Regulatory Agreement and the Lender Deed of Trust. Lender will also record a subordination Agreement with the City to evidence the subordination of the City Deed of Trust to the Lender Deed of Trust (the “Lender-City Subordination Agreement”). The recording order will be as follows:
a. Homekey Regulatory Agreement
b. Lender Deed of Trust
c. City Deed of Trust
d. this Agreement
e. Lender-City Subordination Agreement
2. The Parties agree to cooperate with each other and perform any acts and execute, acknowledge and deliver any additional agreements, documents, or instruments that may be 3 2348\02\4099482.3
reasonably necessary or desirable to carry out the provisions or to effectuate the purpose of this Agreement.
3. This Agreement and the Lender-City Subordination Agreement represent the entire agreement among the Parties on the subject matter hereof, and except as expressly provided herein, shall not be affected by reference to any other documents. Neither this Agreement nor any provision hereof may be changed, waived, discharged, or terminated orally, but such may be accomplished only by an instrument in writing signed by the Party against whom enforcement of the change, waiver, discharge, or termination is sought.
4. If any of the provisions or terms of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other of the terms hereof, and this Agreement shall be construed as if such unenforceable term had never been contained herein.
5. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute and be construed as one and the same instrument.
Exhibit A is attached hereto and incorporated herein by this reference.
[SIGNATURES ON FOLLOWING PAGE]
S-1
Signature Page
Homekey Subordination Agreement
(Vista Ridge)
2348\02\4099482.3
IN WITNESS WHEREOF, the Parties have entered into this Agreement, as of the date first written above.
OWNER:
FAIRFIELD NORTH TEXAS STREET LP,
a California limited partnership
By: Fairfield North Texas Street LLC,
a California limited liability company,
its Administrative General Partner
By: Danco Communities,
a California corporation,
its Manager
By:
Daniel Johnson
President
By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General Partner
By:
David Rutledge
President
LENDER:
Banc of California,
a California corporation,
By: ____________________________
[name,
title]
S-2
Signature Page
Homekey Subordination Agreement
(Vista Ridge)
2348\02\4099482.3
S-3
Signature Page
Homekey Subordination Agreement
(Vista Ridge)
2348\02\4099482.3
CITY:
CITY OF FAIRFIELD,
a general law city
By:
Name:_ David Gassaway
Its:_ City Manager
APPROVED AS TO FORM BY:
By: ______________________________
[David Lim, City Attorney]
2348\02\4099482.3
STATE OF CALIFORNIA )
)
COUNTY 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.
2348\02\4099482.3
STATE OF CALIFORNIA )
)
COUNTY 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.
2348\02\4099482.3
STATE OF CALIFORNIA )
)
COUNTY 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
Homekey Subordination Agreement
(Vista Ridge)
2348\02\4099482.3
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land is situated in the City of Fairfield, County of Solano, State of California and is described as follows:
Real property in the City of Fairfield, County of Solano, State of California, described as follows:
Tract One:
Parcel "1" as shown and described on that certain Parcel Map entitled "Parcel Map of the Lands of Edward Parish, et al, Portion Lot 38, Rancho Tolenas & South 1/2, Section 12, Township 5 North, Range 2 West, M.D.B & M. Ext. Fairfield, Solano County, California", which said parcel map was filed for record on October 27, 1986, in Book 30 of Parcel Maps at Page 29, in the office of the Solano County, California Recorder. Excepting therefrom all that portion described as Parcel 2 as shown on the Parcel Map entitled, "Parcel Map of E-2 8 Motel Property" filed July 10, 2001 in Book 42 of Parcel Maps, at
Tract Two:
A non-exclusive easement for private common and reciprocal access rights, as set forth in that certain instrument entitled "Declaration Re Private Access Rights", recorded September 23, 1986, as Instrument No. 52477, Page 107975, Official Records. APN: 0167-130-240