City of Fountain Valley ♦ 22-005
Occupational Medical Services and Review
September 22, 2022 © 2022 Concentra Operating Corporation. All rights reserved. Page 21 Following a job offer, an employer may make unrestricted medical inquiries, but may not refuse to hire an individual with a disability based on results of such inquiries, unless the reason for rejection is job-related and justified by business necessity. After employment, any medical examination or inquiry required of an employee must be job-related and justified by business necessity; exceptions are voluntary examinations conducted as part of employee health programs and examinations required by other federal laws.
Challenges of ADA compliance for the employer and occupational medicine provider include:
The essential functions of each job must be determined. Any examination performed to provide recommendations regarding employment must be job-related and consistent with business necessity. All recommendations and resulting employment decisions must be consistent for all job applicants.
The confidentiality of medical information must be maintained.
The ADApt program:
Ensures the pre-placement medical examination tests for the essential job functions Provides documentation of readiness of an applicant being placed in the appropriate job (and/or an injured employee being able to return to work) Furnishes the medical provider and employer with definitive information regarding essential functions of each job with measured criteria
Assists in the reduction of workers’ compensation costs by identifying employees who can safely perform the essential functions of the job
5. References
Reference 1 Reference 2 Reference 3
Client Name: Newport-Mesa
Unified School
District
Stanislaus County City of Buena Park
Contact Name/Title: Jonathon
Wilby/Director of
Risk Management
Derek
Davis/Manager IIIRisk and Safety
Unit
Donna Kern/HR
Manager
Phone Number: 714-424-5000 209-525-5770 714-562-3515
Key personnel listed
in this proposal who
worked on the
reference project:
Dorothy Haubner,
Key Account
Manager
Dorothy Haubner,
Key Account
Manager
Juan Macedonia
City of Fountain Valley ♦ 22-005
Occupational Medical Services and Review
September 22, 2022 © 2022 Concentra Operating Corporation. All rights reserved. Page 22 Reference 4 Reference 5
Client Name: Centralia School
District
Edwards
Lifesciences
Contact Name/Title: Deborah
Cogley/HR
Manager
Vicky Varela Lucio,
RN/Occupational
Health Nurse
Specialist
Phone Number: 714-228-3179 949-250-0899
Key personnel listed
in this proposal who
worked on the
reference project:
Juan Macedonia Dorothy Haubner,
Key Account
Manager
6. Other Information
1. The provider must certify or submit a statement that the provider is an equal opportunity employer.
Concentra is an Equal Opportunity Employer (EEO) M/F/Veterans/Disabled.
2. Provide information on the provider’s ability to conduct tuberculosis testing at City sites annually for the Fire Department.
Concentra performs tuberculosis testing in all of our medical centers. Screening for tuberculosis (TB) includes a symptom screen, as well as either a Tuberculin Skin Test (TST) or a blood test. A chest X-ray is also used as part of the screening process if the symptom screen is positive or a TST or blood test is positive. Chest X-rays alone are not used to screen for TB as they cannot diagnose latent TB infection.
3. Provide a copy of current malpractice insurance policy certificates.
We provide evidence of Concentra’s malpractice insurance policy certificates in Attachment section.
4. Provide contact information for a minimum of two (2) references for which the provider performs similar work as described in this proposal.
It has been Concentra’s privilege to serve as the preferred provider for occupational health care services for the following clients. We are prepared to leverage our insight to help ensure we meet the City’s needs and requirements and would consider it an honor to deliver the outlined services.
Similar Services Clients
City of Buena Park
Injury Care, Physical Preplacement, Hep
B Vaccines, X-Ray Chest 1 View
Centralia School District
Injury Care, Drug Screens, Hepatitis B
Vaccines
Newport-Mesa Unified School District
Injury Care, Physical Preplacement, DOT
Physicals, Drug Screens, TB Tests
Stanislaus County
City of Fountain Valley ♦ 22-005
Occupational Medical Services and Review
September 22, 2022 © 2022 Concentra Operating Corporation. All rights reserved. Page 23 Injury Care, Physical Preplacement, DOT
Physicals, Drug Screens, Respirator
Physicals, Audiograms
5. Provide copies of all standardized forms used in the evaluation and/or examination process of candidates or injured workers, or during the rendering of services as described within this document.
We provide copies sample forms used within Concentra medical centers in the Attachment section.
6. Any changes to this RFP will be made by written addendum. No verbal modification will be binding. The City shall not, in any event, be liable for any pre-contractual expenses incurred by the proposer. The proposer shall not include any such expenses as part of the price as proposed in response to this RFP.
We are in receipt of Addendum 1 dated September 9, 2022
City of Fountain Valley ♦ 22-005
Occupational Medical Services and Review
September 22, 2022 © 2022 Concentra Operating Corporation. All rights reserved. Page 24 Attachments Section
Key Personnel Resumes
Sample Forms
Legal and Risk
XXXX Exhibit "B'
Description Rate
Complete medical history & physical $107.95
Visual testing for acuity $48.45
Audiogram $63.75
UA, chemical- in office $62.90
Urine Drug Screen-rapid- in office $64.60
TB Mantoux test $54.40
Pulmonary Function test $73.95
Xray Lumbar Spine (3v) $100.30
Comprehensive Metabolic Panel $89.25
Titers:
Varicella Zoster $123.00
Rubella-Included in MMR Titer $167.00
Measles-Included in MMR Titer Included in MMR Titer
Mumps-Included in MMR titer Included in MMR Titer
Hepatitis B $131.00
CBC $90.00
Subtotal $1,176.55
Additional tests, age specific:
Resting EK9 1< age 40) $85.85
Treadmill Stress Test (> age 40) Note: Referred out $313.00 Description
Complete medical history & physical $89.25
Visual testing for acuity Included in Physical Above
Audiogram $63.75
UA, chemical- in office $62.90
Urine Drug Screen-rapid- in office $64.60
TB Mantoux test $54.50
Pulmonary Function test $73.95
Xray Lumbar Spine (3v) $100.30
Subtotal $509.25
Description
Complete medical history & physical $89.25
Visual testing for acuity Included in Physical Above
UA, chemical- in office $62.90
TB Mantoux test $54.50
Subtotal $206.55
Additional testing, as indicated
Urine Drug Screen-rapid- in office $64.60
X-ray Chest(2 views), replaces 1 view if needed $109.65 Description
TB Mantoux ( administered at each fire station) $54.50
TB reading 2 days by MA at each Fire Station Included in Rate Above
FIRE SUPPRESSION PERSONNEL ANNUAL PHYSICAL EXAM
CLASS A PHYSICAL (SWORN POLICE AND FIRE)
Drawn/performed at Fire Station
Annual Screening TB-All Ages
CLASS B PHYSICAL ( FIELD SERVICE)
CLASS C PHYSICAL (ALL OTHER EMPLOYEES)
XXXX Exhibit "B'
HIV Screen $128.00
Annual Examination-All Ages.
Physical Exam Performed by Board Certified Physicians $89.25 Review lab test results Included in Rate Above
Review of TMST Results Included in Rate Above
Subtotal $271.75
Hepatitis B Immunity Profile $131.00
CXR
Chest X-ray (1V) $91.80
Additional view, if needed (2V) $109.65
Description
D.O.T./DMV physical exam $102.85
UA(urinalysis), chemical-in office $62.90
Vision Included in Physical
Hearing test $63.75
DMV Total $229.50
Description
Complete medical history & physical exam $89.25
Comprehensive Metabolic Panel $105.00
CBC $90.00
Lipid Profile $95.00
UA chemical-in office $62.90
Fecal IMMUG(cancer screen) $192.00
Treadmill Stress Test - Note: Referred out $313.00
Subtotal $947.15
Pulmonary Function Test(Spirometry) $73.95
Chest X-ray (1V) $91.80
Additional view, if needed (2V) $109.65
Description
Hepatic ( Liver) Function Profile $94.00
UA (urinalysis), chemical- in office $62.90
Urine Drug Screen-Rapid-in Office $64.60
TB Mantoux skin test-in office $54.50
Hepatitis B Immunity Profile $131.00
Cholinesterase,RBC $107.00
hepatitis A Vaccine, 2 in series price per dose $152.00 Hepatitis B 3 in series price per dose $151.00
ADDITIONAL SERVICES, UPON REQUEST
EXECUTIVE ANNUAL PHYSICAL EXAMS
DMV PHYSICAL EXAMS
Lab Test
HIV Screening-All Ages
Hepatitis Immunity
X-Rays
> 35 years of age: every year
Every 3 yrs
Vaccinations/Injections:
XXXX Exhibit "B'
MMR $167.00
Tdap $127.00
Tetanus Diphtheria $127.00
Varicella $228.00
COVID-19 - We do not perform Covid-19 Vaccines N/A
Audiogram $63.75
Ishihara $48.45
Jaeger $45.05
Respirator History Review and certificate $51.00
COVID-19 – Rapid Antigen $52.00
COVID -19 –PCR $52.00
Laboratory fee are subject to change upon a 60 day advance notice to the City of Fountain Valley. Change in laboratory fees will only occur as a result of a fee increase from the third party laboratory and provider agrees to show proof of increase to the laboratory fees when sending the notification to the City of Fountain Valley.
Other Tests
俶
俶
俶
俶
EXHIBIT “B”
INSURANCE SPECIFICATIONS
Without limiting CONSULTANT’s indemnification of CITY, and prior to performing any work under this AGREEMENT or receiving any compensation, CONSULANT shall obtain, provide and maintain at its own expense during the term of this AGREEMENT, policies of insurance of the type and amounts described below and in a form that is satisfactory to CITY.
General liability insurance. CONSULTANT shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $ 1,000,000.00 dollars per occurrence, $ 2,000,000.00 dollars general aggregate, for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability.
[Check if Applicable] Automobile liability insurance. CONSULTANT shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of CONSULTANT arising out of or in connection with the work to be performed under this AGREEMENT, including coverage for any owned, hired, non-owned, or rented vehicles, in an amount not less than $ 1,000,000.00 dollars combined single limit for each accident. [Check if Applicable] Workers’ compensation insurance. CONSULTANT shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $ 1,000,000.00 dollars). CONSULTANT shall submit to CITY, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of CITY, its officers, agents, employees, and volunteers. [Check if Applicable] Umbrella or excess liability insurance. CONSULTANT shall obtain and maintain an umbrella or excess liability insurance policy with limits of not less than $ 4,000,000.00 dollars that will provide bodily injury, personal injury, and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason;
• Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and • Insureds under primary policies shall also be insureds under the umbrella or excess policies.
[Check if Applicable] Professional liability (medical malpractice) insurance.
CONSULTANT shall maintain professional liability insurance that covers the services to be performed in connection with this AGREEMENT, in the minimum amount of $1,000,000.00 dollars per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this AGREEMENT and CONSULTANT agrees to maintain continuou Page 328 s coverage through a period no less than three years after completion of the services required by this AGREEMENT. [Check if Applicable] Pollution liability insurance. Environmental Impairment Liability Insurance shall be written on CONSULTANT’s Pollution Liability form or other form acceptable to CITY providing coverage for liability arising out of sudden, accidental, and gradual pollution and remediation. The policy limit shall be no less than $ 1,000,000.00 dollars per claim and in the aggregate. All activities contemplated in this AGREEMENT shall be specifically scheduled on the policy as “covered operations.” The policy shall provide coverage for the hauling of waste from the project site to the final disposal location, including non-owned disposal sites. Products/completed operations coverage shall extend a minimum of th r e e y ear s a f te r pr oj ec t completion.
Coverage shall be included on behalf of the insured for covered claims arising out of the actions of independent contractors. If the insured is using subcontractors, the policy must include work performed “by or on behalf” of the insured. Policy shall contain no language that would invalidate or remove the insurer’s duty to defend or indemnify for claims or suits expressly excluded from coverage. Policy shall specifically provide for a duty to defend on the part of the insurer. The CITY, its officials, officers, agents, and employees, shall be included as insureds under the policy.
[Check if Applicable] Explosion, collapse, underground insurance.
CONSULTANT shall furnish a copy of a public liability and property damage insurance policy with “XCU” or equivalent coverage in an amount not less than $ 1,000,000.00 dollars per person and $ 2,000,000.00 dollars per occurrence for personal injury. The limit of property damage liability shall be not less than $ 1,000,000.00 dollars for each occurrence as payment for damages to property which may result from or be caused by such public display of fireworks and arising from any acts of the CONSULTANT, its agent, employees, or subcontractors presenting such public display. CITY, its officers, agents, and employees shall be additional insureds under the policy. CONSULTANT shall not cancel the insurance coverage without fifteen (15) days prior written notice to the State Fire Marshal.
Proof of insurance. CONSULTANT shall provide certificates of insurance to CITY as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsement must be approved by CITY prior to commencement of performance. Current certification of insurance shall be kept on file with CITY at all times during the term of this contract.
CITY reserves the right to require complete, certified copies of all required insurance policies, at any time.
Duration of coverage. CONSULTANT shall procure and maintain for the duration of the AGREEMENT insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of this AGREEMENT by CONSULTANT, his/her/its agents, representatives, employees, or subconsultants. If this AGREEMENT involves construction, CONSULTANT must maintain general liability and umbrella or excess liability insurance for as long as there is a statutory exposure to completed operations claims. CITY and its officers, officials, employees, and agents shall continue as additional insureds under such policies.
CITY’s rights of enforcement. In the event any policy of insurance required under this AGREEMENT does not comply with these specifications or is canceled and not replaced, CITY has the right but not the dut Page 329 y to obtain the insurance it deems necessary and any premium paid by CITY will be promptly reimbursed by CONSULTANT or CITY will withhold amounts sufficient to pay premium from CONSULTANT’s payments. In the alternative, CITY may cancel this AGREEMENT.
Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by CITY. Notwithstanding the foregoing, XCU insurance shall have a rating of at least B-VI.
Waiver of subrogation. All insurance coverage maintained or procured pursuant to this AGREEMENT shall be endorsed to waive subrogation against CITY, its elected or appointed officers, agents, officials, employees, and volunteers or shall specifically allow CONSULTANT or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. CONSULTANT hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.
Enforcement of contract provisions (non estoppel). CONSULTANT acknowledges and agrees that any actual or alleged failure on the part of CITY to inform CONSULTANT of noncompliance with any requirement imposes no additional obligations on the CITY nor does it waive any rights hereunder.
Specifications not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits, or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type.
Notice of cancellation. CONSULTANT agrees to oblige its insurance agent or broker and insurers to provide to CITY with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage.
Additional insured status. General liability policies shall provide or be endorsed to provide that CITY and its officers, officials, employees, and agents shall be additional insureds under such policies. This provision shall also apply to any excess liability policies. Coverage available to the additional insured shall be primary and noncontributory.
Agency’s right to revise specifications. CITY reserves the right at any time during the term of the AGREEMENT to change the amounts and types of insurance required by giving CONSULTANT ninety (90) days advance written notice of such change. If such change results in substantial additional cost to CONSULTANT, CITY and CONSULTANT may renegotiate CONSULTANT’s compensation.
Self-insured retentions. Any self-insured retentions must be declared to and approved by CITY. CITY reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply Page 330 with these specifications unless approved by CITY.
Timely notice of claims. CONSULTANT shall give CITY prompt and timely notice of claims made or suits instituted that arise out of or result from CONSULTANT’s performance under this AGREEMENT, and that involve or may involve coverage under any of the required liability policies.
Additional insurance. CONSULTANT shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work.
CITY OF FOUNTAIN VALLEY
CITY COUNCIL
COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: June 6, 2023
Members of the City Council
SUBJECT: A Resolution of the City Council of the City of Fountain Valley, California, Approving the Density Bonus and Affordable Housing Agreement for the Slater Avenue Mixed-Use Project
Three-Year Strategic Goals
☒ Enhance the culture and environment of “A Nice Place to Live” ☐ Attract and retain revenue producing businesses
☐ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☐ Attract and retain quality staff
☐ Not applicable
EXECUTIVE SUMMARY
The California Density Bonus Law, Government Code Section 65915, et seq. and Fountain Valley Municipal Code (FVMC), Chapter 21.08.050(a), (together, “DBL”) provide that owners of residential development projects that include specified levels of affordable housing are entitled to apply for and receive certain density bonuses and incentives to facilitate the economic feasibility of those projects. The DBL requires that the affordable units be subject to a recorded affordability restriction as set forth in an agreement between the City and the owner/developer.
Slater Investments, LLC (“Developer”) is the owner of certain real property located at 10201, 10221, and 10231 Slater Avenue (APN # 169-122-02, 169-122-07, and 16-122-08) at the northeast corner of Slater Avenue and San Mateo Street (“Site”). Developer submitted an application for a land use entitlement to develop and operate on the Site the “Slater Avenue Mixed-Use Project” that consists of 270 residential units, a 5,000 square foot restaurant with 2,000 square feet of outdoor dining space, a walk-up coffee and lunch bar, a 1,660 square foot art gallery, a 6-level parking garage, and associated amenities (“Project”).
The 270 residential units include 217 base units and 53 density bonus units for a density bonus of 24.4 percent. The Project shall reserve 15 percent of the base units, i.e., 33 units on-site, as affordable rental housing for low income households. Tenants of the “Affordable Units” must qualify as “Low Income” households earning less than 80 percent of Orange County area median income (“AMI”) and will pay a monthly “Affordable Rent”.
At its regularly scheduled meeting on March 9, 2022, the Planning Commission adopted Resolution No. 22-10 approving Precise Plan No. 562 by a vote of 5-0 for the development of the Project. Developer is obligated to comply with the series of Conditions of Approval in Resolution 22-10, including that the City and Developer enter into that certain Density Bonus and Affordable Housing Agreement (10201, 10221, 10231 Slater Avenue, Fountain Valley)
Council Action Request
Slater Mixed-Use Project Density Bonus and Affordable Housing Agreement City Council Meeting June 6, 2023
(“DBAHA”) to implement the terms and conditions for development, operation, maintenance, and management of the 33 Affordable Units for the 55-year Affordability Period. The DBAHA is included with the City Council Resolution, Attachment No. 2 to this agenda report, and presented for City Council review and action. Capitalized terms used herein are set forth in the DBAHA.
DISCUSSION
As noted, Planning Commission Resolution No. 22-10 approved Precise Plan No. 562 for development of the Project. The Site is one of eleven (11) opportunity sites that were identified through the General Plan Update process for residential development to help reach the City’s Regional Housing Needs Allocation of 4,839 units.
Pursuant to the DBL, the Project shall include the 33 Affordable Units, and the DBL allowed Developer to receive certain concessions and waivers to the City’s development standards, including relief from City parking requirements. The underlying zoning of the Site allows for a maximum of 65 dwelling units per acre (“DUA”); however, the Project will be built to 81 DUA based on Developer’s application for a density bonus pursuant to the DBL. The Project’s reservation of 15 percent of its base units as affordable to Low Income Households equates to the covenanted 33 on-site Affordable Units. While the DBL allowed for up to a 27.5 percent density bonus, i.e., a 60 unit density bonus, the Developer elected and applied to the City to construct only 53 density bonus units for a density bonus of 24.4 percent.
The DBL also allows one concession and unlimited waivers for the Project in which a certain number of the “base” units are restricted for Low Income Households. Precise Plan No. 562 approved the Project with one concession for an increase in the upper level step-back and four waivers to the zoning standards for the Project including:
Concession #1 - An increase in the upper level step-back height. Waiver #1 - A reduction in the minimum 10 percent ground floor retail. Waiver #2 - A decrease in the minimum residential storage requirement of 200 cubic feet per unit.
Waiver #3 - A decrease in the minimum publicly accessible open space requirement of 50% of the required open space.
Waiver #4 - A 10 percent reduction in the minimum square footage of 750 square feet for 1-bedroom units.
The Project entitlements were approved and found to be consistent with the General Plan and Zoning, and compliant with applicable development standards of the Mixed-Use Code with the inclusion of the density bonus, concession, and waivers.
Condition of Approval No. 23 in Resolution No. 22-10 requires the City and Developer to enter into the DBAHA prior to issuance of grading permits for the Project. The Precise Plan also includes additional conditions addressing affordability, number of affordable units, monitoring, the recording of covenants against the Site and Project, the 55-year Affordability Period, and the approved density bonus. (See: Conditions of Approval Nos. 22-31 of Attachment No.1; and these requirements are set forth and implemented in the DBAHA.) Other components of the land use entitlement for the Project approved by the City Council on April 4, 2022 include General Plan Amendment 21-01, Zoning Map Amendment 433, Code Amendment 21-01,
Council Action Request
Slater Mixed-Use Project Density Bonus and Affordable Housing Agreement City Council Meeting June 6, 2023
and adoption of a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program.
The attached City Council Resolution (Attachment No. 2) and DBAHA (Attachment No. 3) memorializes the Project approvals, as well as the 55-year Affordability Period for the 33 Affordable Units. The unit mix of the 33 Affordable Units include five (5) studio units, sixteen (16) 1-bedroom units, and twelve (12) 2-bedroom units covenanted for occupancy by Low Income Households at an Affordable Rent as defined and set forth in the DBAHA.
Pursuant to the California Health and Safety Code and California Code of Regulations, and as an example, based on the 2022 income limits issued by State Housing and Community Development (“HCD”) for lower income households (2023 not yet issued) and affordable rent for studio, 1-bedroom, and 2-bedroom units are set forth in the below table. Income and rent standards are adjusted annually based on HCD income limits and applicable State laws as set forth in the DBAHA.
Income
Level based
on
Household
size
1-person 2-persons 3-persons 4-persons 5-persons 6-persons 7-persons 8-persons Lower
Income
Household
$75,900 $86,750 $97,600 $108,400 $117,100 $125,750 $134,450 $143,10 0 Affordable
Rent/Month
Studio
units
1-bdrm
units
2-bdrm
units
$1,250.25 $1,429.50 $1,608
The Project complies with the DBL that requires the City and Developer to enter into the DBAHA, which includes all required components of the DBL and related affordable housing State laws for rental units. Staff, therefore, recommends the City Council adopt the attached Resolution approving the DBAHA (Attachment No. 3).
FINANCIAL REVIEW
There is no financial impact associated with approving the DBAHA. After the Project is constructed and occupied and annually during the 55-year Affordability Period, the Developer (and successors-in-interest) is required to pay a City Monitoring Fee of $125/Affordable Unit. The City Monitoring Fee is due on the first anniversary of the issuance of the final certificate of occupancy for the Project and adjusted annually based on the Consumer Price Index for the prior Year.
Council Action Request
Slater Mixed-Use Project Density Bonus and Affordable Housing Agreement City Council Meeting June 6, 2023
PUBLIC NOTIFICATION
The Slater Avenue Mixed-Use Project was published in accordance with State Law and City Policy for the March 9, 2022 Planning Commission and April 5, 2022 City Council public hearings. Public notification is not necessary for the approval of the attached DBAHA, and this item was duly included in the posted City Council agenda for this regular meeting.
ENVIRONMENTAL IMPACT REVIEW
On April 5, 2022 the City Council approved Resolution No. 9825 adopting the Mitigated Negative Declaration for the Project. Project approvals required a DBAHA to implement the DBL and Project. The proposed DBAHA is attached to the proposed Resolution for the City Council’s consideration (Attachment No. 2).
ATTORNEY REVIEW
Special Counsel Celeste Brady of Stradling Yocca Carlson & Rauth has reviewed this report and the DBAHA and has consulted with the City’s legal counsel, Colin R. Burns of Harper & Burns.
ALTERNATIVES
Alternative No. 1: Adopt the attached Resolution of the City Council of the City of Fountain Valley, California, approving a Density Bonus and Affordable Housing Agreement for the Slater Avenue Mixed-Use Project.
Alternative No. 2: Do not adopt the attached Resolution of the City Council of the City of Fountain Valley, California, approving a Density Bonus and Affordable Housing Agreement for the Slater Avenue Mixed-Use Project.
RECOMMENDATION
Staff recommends the City Council act on Alternative No. 1 and adopt the attached Resolution of the City Council of the City of Fountain Valley, California, approving the Density Bonus and Affordable Housing Agreement for the Slater Avenue Mixed-Use Project.
Prepared by: Steven Ayers, Principal Planner
Reviewed by: Omar Dadabhoy, Deputy City Manager/Community Development Director
Approved by: Maggie Le, City Manager
Attachments:
1. Planning Commission Resolution No. 22-10
approving Precise Plan 562
2. Resolution approving a Density Bonus and Affordable
Housing Agreement for the Slater Avenue Mixed-Use
Project
RESOLUTION NO.________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
FOUNTAIN VALLEY APPROVING THE DENSITY BONUS AND
AFFORDABLE HOUSING AGREEMENT (10201, 10221, 10231 SLATER
AVENUE, FOUNTAIN VALLEY) BETWEEN THE CITY AND
SLATER INVESTMENTS, LLC RELATED TO THE 270-UNIT
SLATER AVENUE MIXED USE DEVELOPMENT PROJECT LOCATED AT
THE NORTHEAST CORNER OF SAN MATEO STREET AND SLATER
AVENUE
WHEREAS, the City of Fountain Valley (“City”) is a California municipal corporation; and
WHEREAS, the City of Fountain Valley Planning Commission (“Planning Commission”) acts in accordance with the ordinances of the City and laws of the State of California (“State”) and thereby is authorized to make recommendations to the City Council and in certain instances to take final action with regard to certain land use decisions and approvals for development within the City; and WHEREAS, the Fountain Valley General Plan Update was approved by the City Council on March 21, 1995 through Resolution No. 8637; and WHEREAS, the City is obligated by State law and the Housing Element of the General Plan to plan for the community’s supply of low to moderate income housing to meet the City’s objectives to achieve its Regional Housing Needs Assessment (“RHNA”) allocation; and
WHEREAS, in furtherance of the objectives of the Housing Element of the General Plan, the City has affirmed their intention to improve and increase the community’s supply of multi-family affordable housing available at an affordable rent and affordable housing cost and covenanted for the longest feasible period; and
WHEREAS, Slater Investments, LLC (“Developer”) is the owner of certain real property (3.34-acres) located at 10201, 10221, and 10231 Slater Avenue (APN Nos. 169-122-02, 169-122-07, and 16-122-08) (together, “Site”) at the northeast corner of San Mateo Street and Slater Avenue, and the legal description of the Site is Attachment No. 2 to that certain Density Bonus and Affordable Housing Agreement (10201, 10221, 10231 Slater Avenue, Fountain Valley) (“DBAHA”) attached to and presented with this agenda item; and
WHEREAS, capitalized terms used in this Resolution are as defined in the DBAHA unless otherwise defined herein; and
WHEREAS, the Planning Commission on March 9, 2022, and the City Council on April 4, 2022, respectively, approved Developer’s application for land use entitlements to construct, develop and operate on the Site a four- and five-story mixed-use development with 270 residential units, a 5,000 square foot restaurant with 2,000 square feet of outdoor dining space, a walk-up coffee and lunch bar, a 1,660 square foot art gallery, a 6-level parking garage, and associated amenities (together, “Project”); and
WHEREAS the land use entitlements approved for the Project include the following actions approved in accordance with the Fountain Valley Municipal Code (FVMC) and applicable State laws:
Per FVMC 21.34, the City Council approved a General Plan Amendment for a change in land use designation from General Commercial to Mixed Use for the Site.
Per FVMC 21.34, the City Council approved a Zoning Map Amendment that rezoned the Site from C1 -Local Business to MU-1–Mixed-Use 1 District. Per FVMC 21.34, the City Council approved a Development Code Amendment that created a Mixed-Use Zoning District that includes specific zoning standards for mixed use zones including permitted uses, development standards, exceptions, and definitions.
Per FVMC Chapter 21.44, by Resolution 22-10 the Planning Commission approved Precise Plan No. 562 required for the development of the structures that comprise the Project, which is contingent upon approval and execution of the DBAHA to obtain the requested density of 270 units pursuant to the California Density Bonus Law, Government Code Section 65915, et seq. and Fountain Valley Municipal Code (FVMC), Chapter 21.08.050(a), (together, “DBL”).
Per FVMC 21.76.040, a Lot Line Adjustment, or Lot Merger to merge the parcels such that the Site is one legal parcel. This Lot Line Adjustment was approved by the Subdivision Committee on December 13, 2021. Condition of Approval No. 23 of Planning Commission Resolution No. 22-10 requires the City and Developer to enter into the DBAHA as a condition precedent to the issuance of grading permits for the Project. The City Council approved a Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Plan (MMRP) to address the environmental impacts associated with this Project.
WHEREAS, pursuant to the DBL, owners of residential projects that include certain levels of affordable housing are entitled to apply for and receive a density bonus and additional incentives in order to facilitate the economic feasibility of those projects; and WHEREAS, the Developer has submitted a DBAHA evidencing its intention to reserve 15 percent of its base units as affordable to Low Income Households earning less than 80 percent of the Orange County area median income (“AMI”), which equates to a total of 33 on-site Affordable Units for occupancy by Low Income Households at an Affordable Rent for the 55-year Affordability Period; and WHEREAS, by providing 15 percent of its base units as affordable, the Project will exercise a 27.5 percent (i.e., 60 unit) density bonus option pursuant to the DBL; and, although the DBL allows for a 60 unit density bonus, Developer elected, applied for and received approval to construct only 53 density bonus units for a density bonus of 24.4 percent; and
WHEREAS, the DBL allows the City to approve one concession and unlimited waivers for the Project because the Developer agrees to include 33 Affordable Units in the Project, therefore, as the applicant, Developer requested and the City approved an increase in the upper level stepback height of 35 feet for the mixed-use Project as established in Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” to 45 feet; and WHEREAS, the DBL allows for unlimited waivers for this type of Project because the 33 Affordable Units (certain number of the “base” units) shall be restricted for occupancy by Low Income Households at an Affordable Rent for the Affordability Period, including the following waivers as granted by the City:
Waiver #1 - A reduction in the minimum 10 percent ground floor retail (7,290.5 square feet) for a mixed-use project as established in the proposed Code Amendment 21-01 “FMVC 21.15 Mixed-Use Zoning Districts” to 9.14 percent ground floor retail (6,660 square feet). The ground floor of the Project is 72,905 square feet and 10 percent of the ground floor would be 7,290.5 square feet. The Project will provide 6,660 square feet of interior ground floor retail space. Therefore, the Project will provide 9.14 percent of the ground floor in interior retail use and will be
91.4 percent compliant with the code requirement.
Waiver #2 - A decrease in the minimum residential storage requirement of 200 cubic feet per unit (270 units) for a mixed-use project as established in the proposed Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” to 200 cubic feet per unit for 221 units.
Therefore, the Project will be 81.85 percent compliant with the code requirement.
Waiver #3 - A decrease in the minimum publicly accessible open space requirement of 50% of the required open space (48,824 sf x 50% = 24,412 square feet) for a mixed-use project as established in the proposed Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” to 9,324.9 square feet. The publicly accessible open space will be 38.2 percent compliant with the code requirement
(9,324.9 sf/24,412 sf).
Waiver #4 - A 10 percent reduction in the minimum square footage of 750 square feet for 1-bedroom units for a mixed-use project as established in the proposed Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” resulting in 91 of the 129 1-bedroom units not meeting the requirement. Per FVMC 21.15.040 Table 2-11 the minimum square footage of a 1-bedroom unit shall be 750 square feet. A 10 percent reduction would allow 1-bedroom units at 675 square feet (750 sf – 10%).
Footnote (8) of Table 2-11 allows for the consideration of smaller unit sizes with taller ceiling heights as a waiver/concession as a way to increase affordability and maintain quality. The 91 units under this waiver will provide 9’0” tall ceilings; and
WHEREAS, the DBL allows an owner to use state parking standards that are reduced from local jurisdiction parking standards, and the Developer agreed to use state parking standards for the Project as approved by the City; and WHEREAS, the DBAHA establishes the terms and conditions of Developer’s design, planning, construction, operation, management and maintenance of the Project on the Site and requires Developer to comply with all Conditions of Approval set forth in Precise Plan No. 562 (Resolution 22-10) approving development of the Project; and WHEREAS, the salient provisions of the DBAHA include: (1) the terms, conditions, and performance obligations of the parties to carry out the planning, design, construction, and operation of the affordable housing component of the Project in compliance with Precise Plan No. 562 and the DBAHA; (2) establish the senior, nonsubordinate City Covenants as required by the Entitlement and the DBAHA, (3) terms and conditions of the covenants and restrictions for the Affordable Units during the Affordability Period, and the property management and maintenance obligations related to ownership and operation of the Project; and (4) Developer’s rights and obligations with regard to construction, completion and operation of the Project on the Site; and WHEREAS, under the DBAHA, the Project is required to be covenanted for tenancy and occupancy by Low Income Households and the Prescribed Rent Level and Unit Mix at the Project include:
• Low Income Units at an Affordable Rent: Total of 33 Affordable Units with (a) five (5) studio units, (b) sixteen (16) 1-bedroom units, and (c) twelve (12) 2-bedroom units.
WHEREAS, the approval and implementation of the DBAHA will meet all of the criteria of the DBL and related affordable housing laws and regulations; and WHEREAS, this DBAHA has been duly processed in accordance with the DBL and City rules and regulations; and
WHEREAS, the City Council on June 6, 2023 considered the DBAHA; and WHEREAS, the City Council intends by this Resolution to approve the DBAHA.
NOW, THEREFORE, the City Council of the City of Fountain Valley, DOES HEREBY RESOLVE as follows:
SECTION 1
On April 5, 2022, the City Council found that the Project would not have a significant adverse effect upon the environment and adopted Resolution No. 9825 approving a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program for the Project. The City Council further found that the MMRP will ensure compliance during project implementation in that changes to the Project and/or mitigation measures have been incorporated into the Project and are fully enforceable through permit conditions, agreements, or other measures as required by Public Resources Code Section 21081.6.
Thereby, the City’s previous actions and findings, as lead agency, under CEQA made in
connection with the Project land use entitlements apply to the DBAHA and no other action or findings under CEQA are required by the City.
SECTION 2
The City Council hereby finds:
a. The DBAHA implements the DBL and will be in the best interest of the City. (i) The DBAHA will reserve 15 percent of its base units as affordable to Low Income Households earning less than 80 percent of the County median income.
This equates to a total of 33 on-site Affordable Units for occupancy by Low Income Households at an Affordable Rent to help meet the City’s RHNA allocation of 4,839 units. By providing 15 percent of its base units as affordable, the Project will exercise a 27.5 percent (i.e., 60 unit) density bonus option pursuant to the DBL. Although the DBL allows for a 60 unit density bonus, the Developer elected and the City approved only 53 density bonus units for a density bonus of 24.4 percent. Also, pursuant to the DBL, owners of residential projects that include certain levels of affordable housing are entitled to apply for and receive a density bonus and additional incentives in order to facilitate the economic feasibility of those projects. Annual monitoring will be conducted by the City, per the DBAHA, to confirm the Affordable Units remain in compliance.
Identification of Affordable Units shall be provided to the City prior to building permit issuance to ensure the Affordable Units will be spread throughout the development.
b. The DBAHA is consistent with the actions, goals, objectives and policies of General Plan, any applicable specific plan, and the FVMC. (i) The DBAHA will promote the construction of additional dwelling units to help aid in meeting the City’s RHNA of 4,839 units by the year 2029 in accordance with adopted land use policies (Housing Element Goal 2 / Policy 2.a). Also, the DBAHA will also promote development of compatible mixed-use projects with residential components at medium to high densities with commercial designations, where determined appropriate (Housing Element Goal 2 / Policy2.e). Lastly, the Project will conserve and support affordable housing opportunities in the City by providing regulatory incentives to encourage the development of affordable housing (Housing Element Goal 3 / Policy 3.f). c. The DBAHA will promote the public convenience, health, interest, safety or welfare of the City.
SECTION 3
The City Manager (or her authorized representative) and the City’s legal counsel are authorized to finalize and execute the DBAHA on behalf of the City and approve and execute any necessary related additional documents and/or amendments. The final form of the DBAHA, when duly executed and attested, shall be placed on file in the office of the City Clerk and a complete copy shall be attached as a part of this Resolution. Further, the City Manager (or her authorized representative) is authorized to implement the DBAHA and
take all further actions and execute all documents referenced therein, and/or necessary and appropriate to carry out the DBAHA and development of the Project. The City Manager (or her authorized representative) in consultation with legal counsel is authorized to the extent necessary during the implementation of the DBAHA to make technical or minor changes and interpretations thereto after execution, as necessary to properly implement and carry out the DBAHA, provided any and all such changes shall not in any manner materially affect the rights and obligations of the City thereunder.
SECTION 4
The DBAHA incorporates the following conditions:
a. The DBAHA shall be approved by the City prior to issuance of grading permits. b. Prior to the issuance of any residential building permits, all implementing forms of the DBAHA shall be duly executed, and as applicable, recorded in the Official Records, County of Orange, State of California.
c. Within 60 days of the adoption of this Resolution, or such earlier time as provided in the DBAHA, or the Memorandum of Agreement, Attachment No. 3 to the DBAHA, shall be recorded in the Official Records, County of Orange, State of California.
SECTION 5
The City Council hereby approves the Density Bonus and Affordable Housing Agreement (10201, 10221, 10231 Slater Avenue, Fountain Valley), in the form of Exhibit A. (Resolution continues on next page)
SECTION 6
The City Clerk shall certify to the adoption of this Resolution.
THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE CITY COUNCIL THIS SIXTH (6TH) DAY OF JUNE 2023 BY THE FOLLOWING ROLL CALL VOTE:
AYES:
NOES:
ABSTAIN:
ABSENT:
CITY OF FOUNTAIN VALLEY
By:
Kim Constantine, Mayor
ATTEST:
Rick Miller, City Clerk
APPROVED AS TO FORM:
City Legal Counsel
4856-2683-0644v9/200348-0007
DENSITY BONUS AND
AFFORDABLE HOUSING AGREEMENT
(10201, 10221, 10231 Slater Avenue, Fountain Valley)
by and between
CITY OF FOUNTAIN VALLEY
and
SLATER INVESTMENTS, LLC
TABLE OF CONTENTS
Page
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Section 1. DEFINITIONS AND INTERPRETATION ................................................................. 4
1.1. Defined Terms .............................................................................................................. 4
1.2. Singular and Plural Terms .......................................................................................... 13
1.3. References and Other Terms ....................................................................................... 13
1.4. Exhibits Incorporated .................................................................................................. 13
1.5. Representations and Warranties .................................................................................. 13
1.5.1. City Representations ....................................................................................... 13
1.5.2. Developer Representations ............................................................................. 13
1.5.3. No Material Adverse Change ......................................................................... 14
1.5.4. Survival of Representations ............................................................................ 15 Section 2. SITE CONTROL ........................................................................................................ 15
2.1. Ownership of the Site; Obligation to Develop and Operate ....................................... 15
2.2. Environmental Condition of the Site .......................................................................... 15
2.2.1. Studies and Reports ........................................................................................ 15
2.2.2. Indemnification............................................................................................... 15
2.2.3. Duty to Prevent Hazardous Material Contamination ..................................... 16
2.2.4. Release of Indemnitees ................................................................................... 16
2.2.5. Environmental Inquiries ................................................................................. 17 Section 3. CONDITIONS PRECEDENT TO COMMENCEMENT OF
CONSTRUCTION OF THE PROJECT ................................................................................. 18
3.1. Conditions Precedent in Favor of City ........................................................................ 18
3.2. Payment of Certain Fees at Certificate of Occupancy ................................................ 20
3.3. Review of Title ........................................................................................................... 20
3.3.1. Preliminary Report ......................................................................................... 20
3.4. Recordation ................................................................................................................. 21 Section 4. DEVELOPMENT PLANS; INSURANCE AND INDEMNITY,
FINANCING ........................................................................................................................... 21
4.1. Development ............................................................................................................... 21
4.1.1. Site Preparation .............................................................................................. 21
4.2. Design Review; Development Plans for Project ......................................................... 21
4.2.1. Grading Plans ................................................................................................. 22
4.2.2. Landscaping Plans .......................................................................................... 22
4.2.3. Construction Drawings ................................................................................... 22
4.2.4. Development Plans; Review and Approval .................................................... 22
4.2.5. Revisions ........................................................................................................ 23
4.2.6. Defects in Development Plans ........................................................................ 23
4.2.7. City and Other Governmental Permits ........................................................... 23
4.2.8. Cooperation re Development Plans; Revisions and Change Orders .............. 23
4.2.9. Periodic Submittals to City during Construction ............................................ 24
4.2.10. Selection of General Contractor ..................................................................... 24
4.3. Cost of Construction; Performance under other Agreements ..................................... 24
4.4. Insurance Requirements .............................................................................................. 24
4.4.1. Insurance Coverage from Commencement of Construction through the term of the Affordability Period ............................................................... 24
4.4.2. Policy Provisions ............................................................................................ 25
4.4.3. Insurance Requirements of Contractors and Subcontractors .......................... 27
4.4.4. Reduction in Requirements ............................................................................ 27
4.4.5. Waiver of Subrogation ................................................................................... 27
TABLE OF CONTENTS (continued)
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4.5. Indemnity .................................................................................................................... 27
4.6. Rights of Access ......................................................................................................... 28
4.7. Compliance with Laws ............................................................................................... 28
4.8. Nondiscrimination in Employment ............................................................................. 29
4.9. Taxes and Assessments ............................................................................................... 29
4.10. Liens and Stop Notices ............................................................................................... 29
4.11. Further Assurances ...................................................................................................... 29
4.11.1. By Developer .................................................................................................. 29
4.11.2. By City ........................................................................................................... 29
4.11.3. Mortgages, Deeds of Trust for the Project ..................................................... 29
4.11.4. Holder Not Obligated to Construct Improvements......................................... 30
4.11.5. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure ................................................................................................................ 30 Section 5. COVENANTS AND RESTRICTIONS...................................................................... 30
5.1. Use Covenants ............................................................................................................ 30
5.2. Affordable Housing Requirements ............................................................................. 31
5.2.1. Number of Affordable Units .......................................................................... 31
5.2.2. Duration of Affordability Requirements ........................................................ 31
5.2.3. Selection of Tenants ....................................................................................... 31
5.2.4. Income of Tenants .......................................................................................... 31
5.2.5. Determination of Affordable Rent for the Affordable Units .......................... 32
5.2.6. Increases in Tenant Household Income .......................................................... 32
5.2.7. Household Size Appropriate to an Affordable Unit ....................................... 33
5.3. Verifications ................................................................................................................ 33
5.3.1. Income Verification ........................................................................................ 33
5.3.2. Annual Reports ............................................................................................... 33
5.4. Maintenance of Site .................................................................................................... 34
5.4.1. Maintenance Standards ................................................................................... 34
5.4.2. Notice re Non-Compliance ............................................................................. 35
5.4.3. Program Maintenance ..................................................................................... 35
5.4.4. Occupancy Limits ........................................................................................... 35
5.5. Nondiscrimination Covenants ..................................................................................... 36
5.5.1. Required Clauses ............................................................................................ 36
5.6. Management of the Project ......................................................................................... 37
5.6.1. Property Manager ........................................................................................... 37
5.6.2. Property Management Plan ............................................................................ 37
5.6.3. Gross Mismanagement ................................................................................... 38
5.6.4. Code Enforcement .......................................................................................... 39
5.7. Capital Reserve Requirements .................................................................................... 40
5.8. Effect of Violation of the Terms and Provisions of this Agreement after CoO Issued .......................................................................................................................... 40 Section 6. DEVELOPER’S GENERAL REPRESENTATIONS AND WARRANTIES ........... 40
6.1. Formation, Qualification and Compliance .................................................................. 40
6.2. Execution and Performance of Project Documents .................................................... 41 Section 7. DEFAULTS, REMEDIES, AND TERMINATION ................................................... 41
7.1. Default Remedies ........................................................................................................ 41
7.2. Institution of Legal Actions ........................................................................................ 42
7.3. Acceptance of Service of Process ............................................................................... 42
TABLE OF CONTENTS (continued)
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7.4. Rights and Remedies Are Cumulative ........................................................................ 42
7.5. Inaction Not a Waiver of Default ................................................................................ 42
7.6. Applicable Law ........................................................................................................... 42
7.7. Enforced Delay; Extension of Times of Performance ................................................ 42
7.8. Transfers ..................................................................................................................... 42
7.8.1. General Prohibition of a Transfer without City Consent; Covenant Not to Transfer Except in Conformity ............................................................ 42
7.8.2. City Consideration of Requested Transfer ..................................................... 43
7.8.3. Permitted Transfers ........................................................................................ 44
7.9. Successors and Assigns ............................................................................................... 44
7.10. Assignment by City ..................................................................................................... 44
7.11. Non-Liability of Officials and Employees of City ...................................................... 44
7.12. Relationship between City and Developer .................................................................. 44
7.13. City Approvals and Actions ........................................................................................ 44
7.14. Real Estate Brokers ..................................................................................................... 44 Section 8. RELOCATION ........................................................................................................... 44
8.1. Developer Responsible for Relocation ....................................................................... 44
8.2. Indemnification by Developer Relating to Relocation ............................................... 45
8.2.1. Release ............................................................................................................ 45 Section 9. MISCELLANEOUS ................................................................................................... 45
9.1. Obligations Unconditional and Independent............................................................... 46
9.2. Notices ........................................................................................................................ 46
9.3. No Third Parties Benefited ......................................................................................... 46
9.4. Binding Effect; Assignment of Obligations ................................................................ 47
9.5. Counterparts ................................................................................................................ 47
9.6. Prior Agreements; Amendments; Consents ................................................................ 47
9.7. Developer’s Payment and Reimbursement of City’s Third Party Costs ..................... 48
9.7.1. Third Party Costs Defined; Obligation ........................................................... 48
9.7.2. Payment of Third Party Costs ......................................................................... 48
9.7.3. Exception to Payment of Third Party Costs ................................................... 48
9.8. Governing Law ........................................................................................................... 48
9.9. Severability of Provisions ........................................................................................... 48
9.10. Headings ..................................................................................................................... 49
9.11. Interpretation ............................................................................................................... 49
9.12. Conflicts ...................................................................................................................... 49
9.13. Time of the Essence .................................................................................................... 49
9.14. Conflict of Interest ...................................................................................................... 49
9.15. Warranty against Payment of Consideration .............................................................. 49
9.16. Nonliability of City Officials, City Officials and Employees ..................................... 49
ATTACHMENTS
iv
4856-2683-0644v9/200348-0007
ATTACHMENT NO. 1 SITE MAP
ATTACHMENT NO. 2 LEGAL DESCRIPTION OF THE SITE
ATTACHMENT NO. 3 MEMORANDUM OF AGREEMENT
ATTACHMENT NO. 4 CITY COVENANTS
ATTACHMENT NO. 5 REQUEST FOR NOTICE OF DEFAULT
ATTACHMENT NO. 6 DEVELOPER CERTIFICATE
ATTACHMENT NO. 7 CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE ATTACHMENT NO. 8 CALCULATION OF AFFORABLE RENT
ATTACHMENT NO. 9 INCOME VERIFICATION
1 4856-2683-0644v9/200348-0007
DENSITY BONUS AND AFFORDABLE HOUSING AGREEMENT
(10201, 10221, 10231 Slater Avenue, Fountain Valley)
This DENSITY BONUS AND AFFORDABLE HOUSING AGREEMENT
(10201, 10221, 10231 Slater Avenue, Fountain Valley) (“Agreement” or “DBAHA”)) dated as of June 6, 2023 (“Date of Agreement”) is entered into by and between the CITY OF FOUNTAIN VALLEY, a California municipal corporation, and SLATER INVESTMENTS, LLC, a Delaware limited liability company (“Developer”) Capitalized terms used in this Agreement are as defined in Section 1.1 or otherwise stated or referenced herein.
R E C I T A L S
A. Developer is the owner of certain real property generally located at the northeast corner of San Mateo Street and Slater Avenue in the City of Fountain Valley, California with common addresses of 10201, 10221, 10231 Slater Avenue and identified as Assessor Parcel Nos. 169-122-02, 169-122-07, and 169-122-08, all as more particularly described in the legal description attached hereto as Attachment No. 2 and incorporated herein by this reference (“Site”).
B. As site map of the Site is attached hereto as the Site Map, Attachment No. 1 and fully incorporated by this reference.
C. Developer made application to the City, and the City has approved the land use entitlement for a one-to-five-story mixed-use development with 270 residential units, a 5,000 square foot restaurant with 2,000 square feet of outdoor dining space, a walk-up coffee and lunch bar, a 1,660 square foot art gallery, a six-level parking garage, and associated amenities on the 3.34-acre Site (“Project”).
D. The land use entitlement (“Entitlement”) approved by the City for the Project includes the following actions:
• General Plan Amendment No. 21-01 (FVMC 21.34) adopted by City Council Resolution No. 9824 to change land use designation of the Site from General Commercial to Mixed Use 1 at the Site;
• Zoning Map Amendment No. 433 (FVMC 21 .34) adopted by City Council Ordinance No. 1581 to rezone the Site from C1-Local Business to MU-1-Mixed-Use 1 District;
• Development Code Amendment No. 21-01 (FVMC 21.34) adopted by City Council Ordinance No. 1582 to create a Mixed-Use Zoning District that includes specific zoning standards for mixed use zones including permitted uses, development standards, exceptions, and definitions for the Project; • Precise Plan No 562 (FVMC Chapter 21.44) adopted by Planning Commission Resolution No. 22-10 for development of the structures that comprise the 270-unit Slater Avenue Mixed-Use Development Project;
2 4856-2683-0644v9/200348-0007
• Lot Line Adjustment/Lot Merger No. 21-01 (FVMC 21.76.040) to merge the parcels that comprise the Site into one parcel, as approved by the City’s Subdivision Committee on December 13, 2021; and
• Requirement for Developer to enter into this Density Bonus and Affordable Housing Agreement, including a Memorandum of DBAHA and City Covenants to be recorded in the Official Records, County of Orange, State of California (“Official Records”) as senior, nonsubordinate encumbrances against the Site, which requirement is set forth in Exhibit 1 to Precise Plan No. 562; and
• Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Plan (MMRP) adopted by City Council Resolution No. 9825 to address the environmental impacts associated with Project;
E. In addition as part of the Entitlement and pursuant to California Government Code Section 65915, et seq. and Fountain Valley Municipal Code (“FVMC”), Chapter 21.08.050(a) (together “Density Bonus Law” or “DBL”), when Developer made application to the City for its entitlement, the City approved a density bonus to increase the density as described in Code Amendment No. 21-01 for the MU-1 zone of 65 du/ac to 81 du/ac, and which density bonus requires Developer to enter into this DBAHA evidencing Developer’s intention, agreement, and obligation to reserve fifteen percent (15%) of the base units in the residential component of the Project as covenanted affordable housing available to Low Income Households and Lower Income Households that do not exceed eighty percent (80%) of the median income for the Orange County area (“AMI”) as the term “Low Income” is defined in California Health and Safety Code (“HSC”) Section 50093 and the term “Lower Income” is defined in HSC Section 50079.5 and California Code of Regulations (“CCR”) Title 25 Section 6928, and at an affordable rent as defined herein pursuant to HSC Sections 50052.5 and 50053 (“Affordable Rent”). The density bonus approved for the Project equates to a total of thirty-three (33) on-site “Affordable Units” for occupancy and lease by Lower Income Households at an Affordable Rent. By providing fifteen percent (15%) of the base units as Affordable Units, the Project will exercise a 27.5 percent (i.e., 60-unit) density bonus option pursuant to the DBL. Although the DBL allows for a 60-unit density bonus, Developer elected to construct only 53 (of 60) density bonus units for a density bonus of 24.4 percent. Also pursuant to the DBL, as an owner of a residential development project that includes a certain level of affordable housing and as a part of the Entitlement, the DBL allowed Developer one concession and unlimited waivers for the type of development that Developer will construct and complete by which a certain number of the “base” units are restricted for Low Income Households. In connection therewith and under the Entitlement, Developer received the following additional concession, incentives, and waivers in order to facilitate the economic feasibility of the Project:
• Concession #1 - An increase in the upper level step-back height of 35-feet for a mixed-use project as established in Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” to 45 feet; and
• Waiver #1 - A reduction in the minimum 10 percent ground floor retail (7,290.5 square feet) for a mixed-use project as established in Code Amendment 21-01 “FMVC 21.15 Mixed-Use Zoning Districts” to 9.14 percent ground floor retail (6,660 square feet). The ground floor of the Project is 72,905 square feet and 10 percent of the ground floor would be 7,290.5 square feet. The Project will provide 6,660 square feet of interior ground floor
3 4856-2683-0644v9/200348-0007
retail space. Therefore, the Project will provide 9.14 percent of the ground floor in interior retail use and will be 91.4 percent compliant with the FVMC requirement; and • Waiver #2 - A decrease in the minimum residential storage requirement of 200 cubic feet per unit (270 units) for a mixed-use project as established in Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” to 200 cubic feet per unit for 221 units.
Therefore, the Project will be 81.85 percent compliant with the FVMC requirement; and • Waiver #3 - A decrease in the minimum publicly accessible open space requirement of 50% of the required open space (48,824 sf x 50% = 24,412 square feet) for a mixed-use project as established in Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” to 9,324.9 square feet. The publicly accessible open space will be a minimum
38.2 percent of the FVMC requirement for open space (9,324.9 sf / 24,412 sf); and • Waiver #4 - A 10 percent reduction in the minimum square footage of 750 square feet for 1-bedroom units for a mixed-use project as established in the proposed Code Amendment 21-01 “FVMC 21.15 Mixed-Use Zoning Districts” resulting in 91 of the 129 1-bedroom units not meeting the requirement. Per FVMC 21.15.040 Table 2-11 the minimum square footage of a 1-bedroom unit shall be 750 square feet. A 10 percent reduction would allow 1-bedroom units at 675 square feet (750 sf = 10%). Footnote (8) of Table 2-11 of Precise Plan 562 allows for the consideration of smaller unit sizes with taller ceiling heights as a waiver/concession as a way to increase affordability and maintain quality.
The 91 units under this waiver will provide 9’0” tall ceilings.
F. The density approved under Precise Plan No. 562 is and shall remain consistent with General Plan Amendment No. 21-01 and Zoning Map Amendment No. 433, and which density does not exceed 81 du/ac.
G. Precise Plan 562 is subject to General Plan Amendment No. 21-01, Zoning Map Amendment No. 433, Code Amendment No. 21-01, Lot Line Adjustment No. 21-01, and the Density Bonus and Affordable Housing Agreement.
H. Under the Entitlement, Developer shall obtain approval of this DBAHA from the City prior to issuance of grading permits for the Project.
I. +Further, prior to the issuance of any building permits for the Project, a Memorandum of Agreement, Attachment No. 3 evidencing this DBAHA and the City Covenants, Attachment No.4, both attached hereto and fully incorporated by this reference shall each and both be recorded in the Official Records, County of Orange, State of California (“Official Records”) as senior, non-subordinate covenants running with the land for the 55-year Affordability Period as required by the Entitlement. In no event shall this DBAHA or the City Covenants be made junior or subordinate to any other encumbrances, including deeds of trust, or other instruments providing financing, whether construction, permanent, equity or other financing, for the construction, ownership, and/or operation of the Project.
J. The Affordable Units for rental and occupancy by Lower Income tenants at an Affordable Rent shall be dispersed throughout the residential component of the Project, such Affordable Units shall not be segregated or located within a certain area of the development.
Pursuant to the Entitlement, Developer shall identify which housing units will be designated as the Affordable Units prior to issuance of building permits, which will evidence and ensure the Affordable Units will be spread throughout the residential component of the Project.
4 4856-2683-0644v9/200348-0007
K. The Unit Mix by bedroom size of the 33 Affordable Units shall include:
• five (5) studio/0-bedroom units
• sixteen (16) one-bedroom units; and
• twelve (12) two-bedroom units.
L. By this Agreement, Developer intends and shall construct, develop, own, manage and maintain the Project, with appurtenant improvements, community facilities, and resident and guest parking, including the thirty-three (33) Affordable Units (of the total 270 housing units) for lease and occupancy by Lower Income Households at an Affordable Rent for the 55-year Affordability Period.
M. The Project is intended to further and implement the City’s goals and objectives under the City’s Housing Element of the General Plan, including without limitation Goal #3 and Policy 3.f., the DBL, and state, regional, and local affordable housing goals and objectives to provide in the Fountain Valley community decent, safe, and sanitary affordable housing and to increase, improve and preserve housing available at affordable housing cost for income-eligible households.
N. This Agreement is in the vital and best interest of City and the health, safety and welfare of its residents and entire community.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and conditions herein contained, City and Developer agree as follows:
Section 1. DEFINITIONS AND INTERPRETATION.
1.1. Defined Terms. As used in this Agreement (and in all other Project Documents, unless otherwise defined), the following capitalized terms shall have the following meanings:
“Affiliate” means any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer, which shall include each of the constituent members of Developer’s limited liability company. The term “control,” as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to exercise, directly or indirectly, at least fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person.
“Affordable Rent” means the monthly housing cost (excluding any supplemental rental assistance from the State of California, the federal government or any other public agency) not in excess of the amount that may be charged by Developer to each and all tenant households of the Affordable Units in conformity with the Prescribed Rent Level and not to exceed HSC Sections 50052.5 and 50053 for Lower Income Households. This monthly housing cost means the maximum amount to be charged by Developer and paid by the Lower Income Households occupying the 33 Affordable Units at the Project. Further, the household income for Lower Income Households leasing an Affordable Unit shall not exceed the income standard set forth in HSC Section 50079.5 and Affordable Rent shall not exceed the standard and calculations set forth in HSC Sections 50052.5 and 50053.
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In addition, the term Affordable Rent includes the total of monthly payments by the tenants of an Affordable Unit for (a) use and occupancy for an Affordable Unit and facilities associated therewith, (b) any separately charged fees or service charges assessed by Developer that are required of all tenants of the Affordable Units, other than security deposits, (c) a reasonable allowance for utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity and gas, as determined by regulation of the Orange County Housing City pursuant to 24 C.F.R. Section
5.600 et seq. and (d) possessory interest, taxes or other fees or charges assessed for the use of the Affordable Units and facilities associated therewith by a public or private entity other than Developer.
Affordable Rent for the Lower Income Household renting an Affordable Unit in the Project generally equates to the product of thirty percent times sixty percent (30% x 60%) of AMI adjusted for family size appropriate for the unit as set forth in HSC Sections 50052.5 and 50053; and, in practice, this necessitates a two-step process. Step 1 is qualification of the tenant household as a Lower Income Household with gross income at or below eighty percent (80%) of AMI based on the actual size of the household per HSC §50052.5(b)(3); and, Step 2 is the calculation of monthly housing cost/rent based on a presumed household size for the number of bedrooms in the unit. “Affordability Period” shall mean the duration of this Agreement and the City Covenants, including without limitation the affordable housing requirements that are required by the Entitlement and the DBL. The Affordability Period shall continue until the fifty-fifth (55th) anniversary of the date the issuance of the final certificate of occupancy by the City’s building official for completion of the Project.
“Affordable Unit” and “Affordable Units” means each and all of thirty-three (33) apartment units (of the total 270 apartments in the residential component of the Project) required to be developed and operated as Low Income affordable housing by Developer under this Agreement for the 55-year Affordability Period.
“Agreement” means this Density Bonus and Affordable Housing Agreement (10201, 10221, 10231 Slater Avenue, Fountain Valley) as defined in the first paragraph hereof. “AMI” or “Area Median Income” means area median income for the Orange County metropolitan statistical area as set forth in the HSC.
“Area” means the Orange County Statistical Area, as periodically defined by HUD. “Building Permit” or “Building Permits” shall mean each and all of the building permit(s) issued by the City and required to commence construction of the Project and includes any permit or other approval required by any other public agency with jurisdiction over the Site. “Calculation of Affordable Rent” means Attachment No. 6 to this Agreement. It is the responsibility of Developer to comply with the Entitlement and definitions of Lower Income Household and Affordable Rent herein.
“Cal Code Regs” means the California Code of Regulations as such regulations are adopted, amended or repealed by state agencies pursuant to the Administrative Procedure Act (https://oal.ca.gov/publications/ccr/).
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“Capital Replacement Reserve” means the greater of (i) a per unit reserve fund for each and all of the Affordable Units, or (ii) such higher per unit or annual amount required by a Lender of Developer, whether for the Affordable Units or all housing units within the Project, which reserve shall be established by Developer and maintained as set forth herein. “Certificate of Occupancy” or “CoO” means the final certificate of occupancy issued by the City’s building official for the Project.
“Certificate of Continuing Program Compliance” means a certificate in the form attached hereto as Attachment No. 8.
“City” means the City of Fountain Valley, California, a municipal corporation and general law city.
“City Code” or “FVMC” means the Municipal Code of the City of Fountain Valley as may be amended from time to time, and includes, without limitation, the Uniform Codes. “City Covenants” means the City Covenants Agreement evidencing the non-subordinate, senior covenants related to use, ownership, and operation of the Affordable Units at the Site and within the Project for affordable housing purposes as expressly required by and related to the land use/zoning covenants imposed as a part of the conditions of approval of the land use Entitlement for the Site and Project and in compliance with the DBL as entered into between Developer and City which, together with the Memorandum of Agreement, shall be recorded against the Site in a senior, nonsubordinate position; and, the City Covenants shall be substantially in the form of Attachment No. 4 hereto. As provided in the Entitlement, in no event shall the City Covenants be made junior or subordinate to any deed of trust or other documents providing financing for the construction or operation of the Project on the Site or ownership of the Site, or any other lien or encumbrance whatsoever against the Site for the Affordability Period, except as expressly mandated by California statute or federal law.
“City Council” means the City Council of the City of Fountain Valley, California. “City Manager” means the City Manager of the City or her or his designee. “City Monitoring Fee” means a fee to be charged by City annually to defray costs of monitoring the creation and maintenance of the Affordable Units as rental units for occupancy by Lower Income Households at an Affordable Rent throughout the Affordability Period. The City Monitoring Fee shall be $125/Affordable Unit that equates to $4,125 per Year, and shall be payable on the first anniversary of the issuance of the final certificate of occupancy for the Project issued by the City’s building official. The City Monitoring Fee shall thereafter be payable as of each anniversary of the first payment thereof; and, the City Monitoring Fee shall be increased each year on an annual basis thereafter, but each of such annual increases shall not be more than the increase in the Consumer Price Index for the prior Year.
“County” means the County of Orange, California.
“Date of Agreement” means June 6, 2023.
“DBL” means California Government Code Section 65915, et seq. and Fountain Valley Municipal Code, Chapter 21.08.050(a) (together as the Density Bonus Law or DBL.
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“Developer” means Slater Investments, LLC, a Delaware limited liability company, or a permitted successor or assign, as provided below. The members of Slater Investments, LLC include, and the LLC is composed of, the following persons and/or entities: (i) O.C. Urban Ventures; and (ii) Fait Five Revocable Trust.
“Developer Certificate” means a certificate in the form of Attachment No. 6 hereto. “Development Plans” means the Schematic Design Drawings, Design Development Drawings, Grading Plans, Landscape Plans, and Construction Drawings for the Project to be submitted to the City for review and approval pursuant to the Entitlement and this Agreement. “Entitlement” means the land use entitlement and approvals that the City (as applicable, by final action of the City Council, Planning Commission, zoning administrator, or other City board, commission or committee) has approved and granted to Developer for the Project, which comprises all City discretionary actions and any and all conditions of approval related thereto, and any amendments, supplements, and modifications thereto, which are set forth in and required by the DBL, City ordinances, resolutions, and related instruments as adopted or otherwise approved by the City and as such entitlement may be hereafter amended, and as summarized in the Recitals of this Agreement (together, “Entitlement”). Prior to the Date of Agreement, the City received from Developer an application for approval of a precise plan and all conditions of approval therefor (“Precise Plan No. 562”) for construction, development, and operation of the Project on the Site. “Environmental Laws” means all laws, ordinances and regulations relating to Hazardous Materials, including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901, et seq.; the Comprehensive Environment Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C.
Section 9601, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.; all comparable state and local laws, laws of other jurisdictions or orders and regulations; and all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State, the County, City, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, City, Developer, or the Site. “Escrow Holder” means the holder of the Escrow for the recordation of the Project Documents, which shall be Fidelity National Title Insurance Company, or Ticor Title Company, or another escrow holder mutually acceptable to City and Developer. “Event of Default” and “Default” have the meaning set forth in Section 7.1. “Fannie Mae” means the Federal National Mortgage Association (FNMA) or typically known as Fannie Mae. Developer acknowledges and agrees that in no event shall any loan issued or underwritten or otherwise connected to Fannie Mae (or Freddie Mac) result in the subordination of this Agreement, the Memorandum of Agreement or the City Covenants, which shall remain senior, nonsubordinate encumbrances against the Site and Project.
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“Freddie Mac” means the Federal Home Loan Mortgage Corporation. Developer acknowledges and agrees that in no event shall any loan issued or underwritten or otherwise connected to Freddie Mac (or Fannie Mae) result in the subordination of this Agreement, the Memorandum of Agreement or the City Covenants, which shall remain senior, nonsubordinate encumbrances against the Site and Project.
“GAAP” means generally accepted accounting practices.
“Governmental Requirements” is defined within the definition of Hazardous Materials, below.
“Hazardous Material” or “Hazardous Materials” means and include any substance, material, or waste which is or becomes regulated by any local governmental authority, including the County, Orange County Health Care City, the Regional Water Quality Control Board, the State of California, or the United States Government, including, but not limited to, any material or substance which is: (i) defined as a “hazardous waste,” “acutely hazardous waste,” “restricted hazardous waste,” or “extremely hazardous waste” under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter Presley Tanner Hazardous Substance Account Act); (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum; (vi) asbestos and/or asbestos containing materials; (vii) lead based paint or any lead based or lead products; (viii) polychlorinated biphenyls, (ix) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317); (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903); (xi) Methyl tertiary Butyl Ether; (xii) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601, et seq. (42 U.S.C. Section 9601); (xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any “Governmental Requirements” (as defined herein) either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as “hazardous” or harmful to the environment; and/or (xiv) lead based paint pursuant to and defined in the Lead Based Paint Poisoning Prevention Act, Title X of the 1992 Housing and Community Development Act, 42 U.S.C. § 4800, et seq., specifically §§ 4821–4846, and the implementing regulations thereto. Notwithstanding the foregoing, “Hazardous Materials” shall not include such products in quantities below attainment levels identified in one or more of the enactments identified above as Governmental Requirements, including those product and amounts as are customarily used in the construction, maintenance, rehabilitation, management, operation and residence of residential developments or associated buildings and grounds, or typically used in residential activities in a manner typical of other comparable residential developments, or substances commonly ingested by a significant population living within the Project, including without limitation alcohol, aspirin, tobacco and saccharine. “Hazardous Materials Contamination” means the contamination (whether presently existing or hereafter occurring) of the Improvements, facilities, soil, groundwater, air or other elements on, in, or under the Site by Hazardous Materials, or the contamination of the buildings,
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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 Date of Agreement) emanating from the Site.
“HSC” means and refers to the California Health and Safety Code. “Improvements” means all of the improvements described or referenced in the Entitlement and the approved Development Plans, and as herein further described. “Income Verification” means Attachment No. 7 to this Agreement. “Intercreditor and Subordination Agreement” means one or more estoppel, intercreditor and/or subordination agreement(s) or instrument(s) as may be requested by a Lender or other entity for approval by the City Manager and legal counsel, subject to the terms thereof and herein that in no event shall any Lender or other person or entity require or otherwise include subordination or modification of the City Covenants or the Memorandum of Agreement evidencing this agreement of record. Within five (5) business days of Developer’s receipt thereof, Developer shall provide to City complete, legible Word versions of each and any requested estoppel, intercreditor and/or subordination agreement(s) or instrument(s), and each form thereof, shall be subject to the review and approval of the City through the City Manager and legal counsel in his/her/their sole, reasonable discretion.
“Legal Description of the Site” means Attachment No. 2 to this Agreement. “Lender” means each of the responsible financial lending institutions or entities that may issue to Developer a loan or loans secured by the Site and/or Project relating in any manner to acquisition or assembly of the Site, construction financing, permanent financing, any other financing for construction, development, and/or operation of the Project on the Site. A Lender shall not include the financial entities or agencies commonly referred to as FannieMae or FreddieMac; provided however, the foregoing prohibition shall not be construed to prohibit a transfer or assignment of such loan on the secondary market so long as such transfer does not require a rider, amendment or other modification to this Agreement or the City Covenants, or Entitlement or other document to which the City is a party, signatory or intended beneficiary.
“Low Income” and “Low Income Households” are defined in in HSC Section 50093(a) and include “persons and families of low income” or “persons of low income” who are eligible for financial assistance specifically provided by a governmental agency for the benefit of occupants of housing financed pursuant to Division 31 of the HSC. The term Low Income also includes Lower Income.
“Lower Income” and “Lower Income Households” mean households earning not greater than eighty percent (80%) of Area Median Income, adjusted for family size and as defined in and provided under the income standard set forth in HSC Section 50079.5 and the implementing regulations in Title 25 CCR Section 6910, et seq., in particular Section 6928. “Material Adverse Change” shall mean any event any occurrence of which is reasonably likely to have a material adverse effect on Developer’s ability to fulfill its obligations under this Agreement or any form or type of implementing document (“Transaction Document”), including without limitation:
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(a) a voluntary or involuntary bankruptcy of Developer (which is not dismissed within ninety (90) days of institution);
(b) a court order placing Developer under receivership; (c) a sale of all or substantially all of the assets held by Developer, except any such sale made in accordance with the terms of this Agreement; (d) any violation of Developer or other failure of Developer to comply at all times with any applicable law, statute, ordinance, code, rule, regulation, judgment, order, ruling, condition or other requirement of a statutory, regulatory, administrative, judicial or quasi-judicial nature or any other legal or governmental requirement of whatever kind or nature related to the Project, which violation is likely to have a material adverse effect on the ability of Developer to perform its duties and obligations under any Transaction Document; and/or (e) Developer incurs one or more liabilities, contingent or otherwise, or pending or threatened litigation or any asserted claim or unasserted claim known to the Developer exists against Developer with respect to the Project, which would have a material adverse effect on its ability to perform its duties and obligations under any Transaction Document. “Memorandum of Agreement” means a memorandum of agreement in the form of Attachment No. 3 to this Agreement.
“Notice” means a notice in the form prescribed by Section 9.2 hereof. “Official Records” means the official land records of the County Recorder of the County of Orange, State of California, unless the context otherwise requires another county of a state. “Operating Year” means the period commencing as of the Date of Agreement and ending as of December 31 of that calendar year, then each succeeding calendar year thereafter during the Affordability Period.
“Permitted Transfer” means any of the following:
(a) A conveyance of a security interest in Developer’s estate in the Site in connection with any monetary lien for construction or permanent financing of the Project that is junior and subordinate to this Agreement and the City Covenants, and any subsequent transfer of title by foreclosure, foreclosure deed, or other conveyance instrument in lieu of foreclosure in connection therewith, so long as this Agreement and the City Covenants are and remain senior and nonsubordinate to any and all monetary liens.
In furtherance and clarification of (a) above, in the event of (A) foreclosure initiated by a Lender for construction or permanent financing and conveyance of the Site and Project to a third party buyer (not an Affiliate of Developer) through a trustee’s sale, or (B) conveyance by a deed in lieu of foreclosure of the Site and Project to a third party (not an Affiliate of Developer) but only after at least 90 days have elapsed since the filing of the notice of default commencing foreclosure (described in (A)) and the Lender (or its agent) has caused to be recorded a notice of trustee's sale setting forth the date, time, and place of the trustee's sale, then commencing after recordation of the trustee’s deed or deed in lieu of foreclosure described in (A) or (B) above and continuing for the remainder of the 55-year Affordability Period the new owner of the Site and Project, also as
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“Developer”, shall ensure the thirty-three (33) Affordable Units are operated and maintained in compliance with the income and rent standards for Lower Income Households at an Affordable Rent for the continued Unit Mix as follows: (1) five (5) studio units, (2) sixteen (16) 1 bedroom units, and (3) twelve (12) 2-bedroom units.
(b) A conveyance of the Site by Developer to an Affiliate so long as such Affiliate (or Developer) retains a minimum of fifty-one percent (51%) of the ownership or beneficial interest and retains management control of the transferee entity or entities; (c) A substitution of a member of the Developer entity with an entity controlled by that member;
(d) The inclusion of equity participation by Developer by addition of members to Developer’s limited liability company, or similar mechanisms, so long as this Agreement and the City Covenants are and remain senior and nonsubordinate to any and all such equity participants; (e) The lease for occupancy of all or any part of the Project, subject to the requirements of the Entitlement and this Agreement for operation of the Affordable Units; and (f) The granting of easements or permits to facilitate development of the Site in accordance with this Agreement and the Entitlement.
“Portable Voucher” shall mean Section 8 rental vouchers under 24 CFR part 887 (Rental Voucher Program), and comparable documents evidencing participation in any tenant-based rental assistance program under any other federal or state or local tenant-based rental assistance programs as such now exist and as may hereafter be amended. “Prescribed Rent Level” and “Unit Mix” or “Prescribed Rent Level and Unit Mix” for the 33 Affordable Units means:
• five (5) studio/0-bedroom units for Lower Income Households at an Affordable Rent; • sixteen (16) one-bedroom units for Lower Income Households at an Affordable Rent; and
• twelve (12) two-bedroom units for Lower Income Households at an Affordable Rent.
The Affordable Units shall meet the Prescribed Rent Level and Unit Mix as required despite a temporary noncompliance with the defined Affordable Rent, if the noncompliance is caused by increases in the incomes of existing tenants and if actions are being taken by Developer to ensure that each and all vacancies of the Affordable Units at the Project are filled in accordance with the Prescribed Rent Level and Unit Mix until the noncompliance is corrected.
A tenant who qualified as a Lower Income Household at initial occupancy of an Affordable Unit at the Project shall be deemed to continue to be so qualified until such time as reverification and certification of the tenant household’s gross income shows that such tenant no longer qualifies as a Lower Income Household. An existing tenant household occupying an Affordable Unit in the Project whose income exceeds the qualifying limit for a Lower Income Household may continue to occupy that Affordable Unit and be charged monthly rent including a reasonable utility allowance, equal to the lesser of thirty percent (30%) of the tenant household's adjusted monthly income, recertified annually, or the market rent applicable to the Affordable Unit as published by State HCD, so long as such continued tenancy does not exceed six (6) months. Such restrictions and requirements about reverification and recertification of household income to be and remain eligible for occupancy and tenancy of an Affordable Unit shall be expressly stated and
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separately initialed by each adult member of the tenant household in the lease or other rental agreement for each tenant of each Affordable Unit.
“Project” means the new 270-unit apartment complex and associated commercial components and Improvements and amenities as approved by the City under the Entitlement and further described therein, along with related offsite improvements, as more particularly described in the Entitlement and Development Plans , and as operated in conformity with the Entitlement, this Agreement, and the City Covenants.
“Project Documents” means, collectively, this Agreement, City Covenants, Memorandum of Agreement, Request for Notice of Default, and all other Attachments to this Agreement, and any other agreement, document, or instrument that City requires in connection with the execution and implementation of the Entitlement and this Agreement as necessary from time-to-time to effectuate the purposes of the Entitlement and this Agreement.
“Property Management Plan” is defined in Section3.2(h)----------------------------------------- ---.
“Relocation” or “Relocation Laws” shall mean all federal and state relocation laws and regulations, as, if and when applicable, if at all, including without limitation, (i) the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (“URA”), 42 U.S.C. 4601–4655, and the implementing regulations thereto set forth in 49 CFR Part 24, (ii) the California Relocation Assistance Act, Government Code Section 7260, et seq. and the implementing regulations thereto set forth in Title 25, Section 6000, et seq. of the California Code of Regulations, and (iii) any other applicable federal, state or local enactment, regulation or practice providing for relocation assistance, benefits, or compensation for moving and for property interests (including without limitation goodwill and furnishings, fixtures and equipment, and moving expenses), and (iv) any federal law or regulation prohibiting payment of relocation benefits or assistance to persons ineligible for relocation benefits or assistance. Developer shall be solely responsible for payment of all costs, expenses, and payments required to be made and/or incurred pursuant to any and all applicable Relocation Laws; City shall not incur any costs or expenses as a result of the application of the Relocation Laws to the Project or this Agreement.
“Request for Notice of Default” means Attachment No. 5. “Site” means that real property depicted on the Site Map and described with greater particularity by the Legal Description of the Site, Attachment No. 2. “Site Map” means Attachment No. 1 to this Agreement.
“Third Party Costs” is defined and described in Section 9.7 herein. “Title Company” shall be Fidelity National Title Insurance Company, or Ticor Title Company, or another title insurer mutually acceptable to City and Developer. “Transfer” is defined and described in Section 7.8 herein. “Uniform Codes” means each of the following as in effect from time to time as approved by City: the Uniform Building Code, the Uniform Housing Code, the National Electrical Code, the
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Uniform Plumbing Code, the Uniform Mechanical Code, and the Uniform Code for the Abatement of Dangerous Buildings.
“Year” means a calendar year.
1.2. Singular and Plural Terms. Any defined term used in the plural in this Agreement or any Project Document shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class.
1.3. References and Other Terms. Any reference to this Agreement or any Project Document shall include such document both as originally executed and as it may from time to time be modified. References herein to Articles, Sections and Exhibits shall be construed as references to this Agreement unless a different document is named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term “document” is used in its broadest sense and encompasses agreements, certificates, opinions, consents, instruments, and other written material of every kind. The terms “including” and “include” mean “including (include) without limitation.”
1.4. Exhibits Incorporated. All attachments and exhibits to this Agreement, as now existing and as the same may from time to time be modified, are incorporated herein by this reference.
1.5. Representations and Warranties.
1.5.1. City Representations. City represents and warrants to Developer as follows:
(a) City. City is a California municipal corporation and general law city and authorized to transact business pursuant to action of City Council. City has full right, power, and lawful authority with respect to the execution, performance, and delivery of this Agreement by City has been fully authorized by all requisite actions on the part of City. The parties who have executed this Agreement on behalf of City are authorized to bind City by their signatures hereto. (b) No Conflict. To the best of City Manager’s actual knowledge, City’s execution, delivery, and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound.
(c) No City Bankruptcy. City is not the subject of a bankruptcy proceeding.
Until the recordation of the non-subordinate Memorandum of Agreement and the City Covenants, City shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 1.5.1 not to be true, immediately give written Notice of such fact or condition to Developer.
1.5.2. Developer Representations. Developer represents and warrants to City as follows:
(a) Powers and Authorizations. Developer is a duly organized limited liability company organized within and in good standing under the laws of the State of California.
Developer has full right, power, and lawful authority to own and operate the Site and undertake all
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obligations as provided in the Entitlement and herein and the execution, performance and delivery of this Agreement and the City Covenants by Developer has been fully authorized by all requisite actions on the part of Developer. The parties who have executed this Agreement on behalf of Developer are authorized to bind Developer by their signatures hereto. (b) Litigation. To the best of Developer’s knowledge, there are no material actions, suits, claims, legal proceedings, or any other proceedings affecting Developer, at law or in equity before any court or governmental agency, domestic or foreign. (c) No Conflict. To the best of Developer’s knowledge, Developer’s execution, delivery, and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound.
(d) No Developer Bankruptcy. Developer is not the subject of a bankruptcy proceeding.
(e) Developer Experience; Sophisticated Party. The principals of Developer are sophisticated parties, with substantial experience in the acquisition, rehabilitation, development, financing, obtaining financing for, marketing, and operation of commercial and residential development projects and with the negotiation, review, and preparation of agreements and other documents in connection with such activities. Developer is familiar with and has reviewed all laws and regulations pertaining to the development and operation of the Project and has obtained advice from any advisers of its own choosing in connection with this Agreement. (f) Ownership of the Site. As of the Date of Agreement, Developer holds fee simple marketable title to the Site.
(g) Due Authorization and Execution; Studies Completed. Developer has duly authorized the execution of this Agreement, the City Covenants, and all other Project Documents. Developer completed its due diligence as to the Site and hereby represents to its best knowledge that Developer is not aware of and has not received any notice or communication from any government agency having jurisdiction over the Site notifying Developer (or any Affiliate) of the presence of surface or subsurface zone Hazardous Materials in, on, or under the Site, or any portion thereof. “Best knowledge,” as used herein, shall not impose a duty of investigation, and shall be limited to the best knowledge of Developer (and each of the member persons or entities that comprise the LLC entity.
After the Date of Agreement, Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 1.5.2 not to be true in all material respects, immediately give written Notice of such fact or condition to City. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which City shall have a right to approve or disapprove if such exception would have an effect on the development and/or operation of the Site.
1.5.3. No Material Adverse Change. Developer hereby represents and warrants, as of the Date of Agreement, that all documents, materials and information provided by Developer to City relating to Developer’s qualifications, financial strength, and ability to perform its obligations hereunder are true, correct and complete in all material respects as of their respective dates and no
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Material Adverse Change has occurred or is reasonably likely to occur that would make any such documents, materials or information incorrect, incomplete, or misleading in any material respect. (a) Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in Sections 1.5.2 and 1.5.3 above not to be true in all material respects, immediately give written Notice of such fact or condition to the City. Such exception(s) to a representation shall not be deemed a Default by the Developer hereunder, but shall constitute an exception which the City shall have a right to approve or disapprove if City, in its sole, reasonable discretion, determines that such exception would have an effect on the Project or Developer’s ability to perform Developer’s obligations under this Agreement or other Project Documents.
1.5.4. Survival of Representations. During the Affordability Period, within thirty (30) days following a written request from City, Developer shall either re-affirm in writing the material truth and accuracy of the representations and warranties set forth in Sections 1.5.2 and 1.5.3 or identify any material inaccuracies of such representations and warranties. The fact that a representation or warranty contained in Sections 1.5.2 and 1.5.3 has become inaccurate or misleading shall not, in and of itself, constitute a breach under this Agreement or the Project Documents; however, (i) failure to notify City of material inaccuracies in these representations and warranties within thirty (30) calendar days of City’s request for such information, and (ii) any overt material misrepresentation by Developer relating to such representations and warranties shall each constitute a Default under this Agreement, subject to delivery of Notice and expiration of the cure rights provided in this Agreement.
(a) During the entire Affordability Period, the Developer shall have the ongoing obligation to promptly (but in no event later than 30 days following a Material Adverse Change) inform City (in writing) of the occurrence of any Material Adverse Change.
Section 2. SITE CONTROL.
2.1. Ownership of the Site; Obligation to Develop and Operate. Developer represents it owns the Site and has undertaken and completed at its expense investigations of the Site, including without limitation condition of title, the presence of any Hazardous Materials and other surface and subsurface conditions, and the suitability of the Site development of the Project.
2.2. Environmental Condition of the Site.
2.2.1. Studies and Reports. Developer may obtain data and make any other or additional surveys, tests, studies, and reports necessary to evaluate the suitability of the Site for the Project, including the investigation of the environmental condition of the Site (collectively, the “Studies”). Any studies undertaken on the Site by Developer shall be done at the sole expense of Developer. Any studies shall be undertaken only after Developer has secured the consent of any occupants or holders of interests in the Site and obtained any necessary permits therefor from the appropriate governmental agencies, including without limitation, City.
2.2.2. Indemnification. Developer agrees to and shall save, protect, pay for, defend (with counsel acceptable to City), indemnify and hold harmless City and its elected and appointed officials, officers, employees, attorneys, representatives, volunteers, contractors and agents (collectively, “Indemnitees”) from and against any and all liabilities, suits, actions, claims, demands,
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penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants’ fees, investigation and laboratory fees, attorneys’ fees and remedial and response costs and third-party claims or costs) (the foregoing are hereinafter collectively referred to as “Liabilities”) that may now or in the future be incurred or suffered by Indemnitees by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of or any act, inaction or condition related to the Site, including without limitation: (i) any claim of damage to property, real or personal, or personal injury, including death, to any person arising from or related in any manner whatsoever to Hazardous Materials and Environmental Laws in connection with the Site and prior or current ownership thereof; (ii) the presence, use, release, escape, seepage, leakage, spillage, emission, generation, discharge, storage, or disposal of any Hazardous Materials in, on, under, or about, or the transportation of any such Hazardous Materials to or from, the Site without regard to the time of occurrence or discovery and without regard to the cause thereof; (iii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment, or license relating to the use, generation, release, leakage, spillage, emission, escape, discharge, storage, disposal, or transportation of Hazardous Materials in, on, under, or about, or to or from, the Site; (iv) the physical and environmental condition of the Site, and (v) any Liabilities relating to any Environmental Laws and other Governmental Requirements relating to Hazardous Materials and/or the environmental and/or physical condition of the Site. The foregoing indemnification shall continue in full force and effect regardless of whether such condition, liability, loss, damage, cost, penalty, fine, and/or expense shall accrue or be discovered before or after the termination of the Affordability Period. This indemnification supplements and in no way limits the general indemnification provisions set forth herein.
2.2.3. Duty to Prevent Hazardous Material Contamination. During Developer’s ownership of the Site and during Developer’s construction, development, operation and management of the Project, Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment on or under the Site. Such precautions shall include, but not be limited to, compliance with all Environmental Laws and other Governmental Requirements.
Developer shall notify City, and provide to City a copy or copies of any 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 all Environmental Laws and other Governmental Requirements, and Developer shall report to City, as soon as possible after each incident, any unusual or potentially important incidents in the event of a release of any Hazardous Materials into the environment.
2.2.4. Release of Indemnitees. With respect to Hazardous Materials, Environmental Laws, and Liabilities relating to any Environmental Laws and other Governmental Requirements relating to Hazardous Materials and/or the environmental and/or physical condition of the Site (collectively, the “Environmental Liabilities”), Developer waives, releases and discharges forever the Indemnitees from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, including attorneys’ fees, court and litigation costs and fees of expert witnesses, present and future, arising out of or in any way connected with Developer’s possession or use of the Site, improvement of the Site in accordance with this Agreement and the Entitlement obtained by Developer for the Project, and for the operation of the Project at the Site, of any Hazardous Materials on the Site, or the existence of Hazardous Materials contamination in any state on, under, or about the Site, however they came to be located there.
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(a) In connection with the foregoing, Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code that provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE AND THAT, IF KNOWN BY HIM OR HER,
WOULDHAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR OR RELEASED PARTY.
_______________
Developer Initials
As such relates to this Section 2.2.4, Developer hereby waives and relinquishes all rights and benefits that it may have under Section 1542 of the California Civil Code in connection with the Environmental Liabilities.
2.2.5. Environmental Inquiries. Developer shall notify City upon receipt, and provide to City a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Site and the Project: 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 Environmental Laws and other applicable Governmental Requirements relating to Hazardous Materials and underground tanks, and Developer shall report to City, as soon as possible after each incident, all material information relating to or arising from such incident, including, but not limited to, the following:
(a) All required reports of releases of Hazardous Materials, including notices of any release of Hazardous Materials as required by any Governmental Requirements; (b) All notices of suspension of any permits relating to Hazardous Materials;
(c) All notices of violation from federal, state, or local environmental authorities relating to Hazardous Materials;
(d) All orders under the State Hazardous Waste Control Act and the State Hazardous Substance Account Act and corresponding federal statutes, concerning investigation, compliance schedules, clean up, or other remedial actions; (e) All orders under the Porter Cologne Act, including corrective action orders, cease and desist orders, and clean up and abatement orders; (f) Any notices of violation from OSHA or Cal OSHA concerning employees’ exposure to Hazardous Materials;
(g) All complaints and other pleadings filed against Developer relating to Developer’s storage, use, transportation, handling, or disposal of Hazardous Materials on or about the Site; and
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(h) Any and all other notices, citations, inquiries, orders, filings, or any other reports containing information which would have a materially adverse effect on the Site or City’s liabilities or obligations relating to Hazardous Materials.
In the event of a release of any Hazardous Materials into the environment, Developer shall, as soon as possible 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, but subject to any limitations imposed by law or by court order, Developer shall furnish to City a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site in Developer’s possession and/or shall notify City of any environmental entitlements or inquiries relating to or affecting the Site within Developer’s actual or constructive knowledge if Developer is not in possession of same, 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.
Section 3. CONDITIONS PRECEDENT TO COMMENCEMENT OF CONSTRUCTION OF THE PROJECT.
3.1. Conditions Precedent in Favor of City. Upon satisfaction of the conditions set forth in this Section 3.1, Developer may commence construction of the Project. Each and every one of the following “Conditions Precedent” shall have been fully satisfied by Developer before it commences construction, which conditions are for the benefit of City, as determined in good faith by the City Manager (each of which condition(s), if it requires action by Developer, shall also be a covenant of Developer):
(a) Land Use Entitlements Conditions of Approval. Developer shall be in compliance with the applicable conditions of approval in the Entitlement that are required to have been satisfied by Developer prior to issuance of building permits for the construction of the Project on the Site. In connection therewith, the Entitlement requires that Developer cause to be entered into this Agreement and to cause recording of the Memorandum of Agreement and the City Covenants in a senior, non-subordinate lien position with respect to the Site and Project; and, in this regard, the Memorandum of Agreement and City Covenants shall be ready for recording prior to, or concurrently with, and in a first, senior lien position. (b) Title Insurance. Developer shall have and maintain fee title to the Site and shall have delivered to the City Manager a copy of its grant deed (duly recorded in the Official Records) and a title policy evidencing such fact along with evidence that the Memorandum of Agreement and City Covenants are the senior and nonsubordinate encumbrances against the Site. (c) Building Permit Readiness Letter; Payment of Fees for Building Permits. Developer shall have received from City a letter stating that the City is ready to issue all building permits to commence construction of the Project (“readiness letter”), which readiness letter shall include express conditions that concurrent with issuance of the building permits: (i) Developer shall pay to City all fees required for issuance of the Building Permits and such other fees as are customarily collected by City as of the time of issuance of Building Permits and as required under the Entitlement, and (ii) Developer shall timely pay all applicable fees charged and due to each and all other governmental agencies that charge fees in connection with the Project (such as fees assessed by school districts, sanitary districts, water districts, etc.), such payments being made to City (if City customarily collects such fees on behalf of the corresponding governmental agency for which the fee
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is being paid) or to the corresponding governmental agency (with submittal of evidence to City from such governmental agency that full payment has been received) or shall have delivered to City evidence satisfactory to the City Manager that Developer has made arrangements mutually agreeable by Developer and corresponding governmental agency (other than City) with regard to the payment of the applicable fees. Upon such full payment by Developer of (i) and (ii) in this paragraph (c), then Developer shall be eligible to obtain, and City shall cause City to issue, the Building Permits for the Project.
(d) Proof of Insurance. Developer shall have provided to City certificates of insurance and endorsements that satisfy all requirements of Section 4.4 hereof as to the Site and Project.
(e) Corporate Resolution. Developer shall deliver to City certified copies of Developer resolution(s) specifically authorizing (or ratifying) the execution of this Agreement, Memorandum of Agreement, City Covenants, and all other implementing Project Documents and identifying the individual(s) with authority to enter into non-material implementation agreements and/or amendments to this Agreement, the construction of the Improvements, and operation of the Project.
(f) Lease/Rental Agreement. Developer shall have submitted to City and shall have approved the standard form lease/rental agreement in conformance with the City Covenants for rental of the Affordable Units to Lower Income-eligible tenants at Affordable Rent in accordance with the terms of this Agreement, which approval shall not be unreasonably withheld or delayed. Developer shall include certain terms in the standard form lease/rental agreement which clearly describe the requirements of qualification and rental to Lower Income Households, including without limitation: (i) the obligation to provide complete and timely income verifications, as and when reasonably requested by Developer and/or City, but not less frequently than prior to initial occupancy and then annually during the term of tenancy, (ii) a description of the Affordable Rent for the Lower Income Households, (iii) the rules and regulations for use, occupancy, and quiet enjoyment of all housing units at the Site, (iv)tenant protections relating to notices, eviction, and such other matters as required by applicable laws, and (v) such other terms as Developer and/or City deem reasonably necessary.
(g) Relocation. City shall be reasonably satisfied that Relocation, if any, is required from the Site, will be conducted in compliance with all applicable Relocation Laws, and this Agreement, and Developer and the Project shall be in compliance with all Relocation obligations pursuant to this Agreement and the Relocation Laws.
(h) Management Plan; Property Manager. Developer shall have submitted to City, and the City Manager shall have approved, which approval shall not be unreasonably withheld or delayed, the Management Plan for the Project. Developer shall identify the Property Manager and provide relevant background information and evidence of its experience as a professional property manager for first class and high quality housing projects that include affordable housing units in Southern California as required herein. City pre-approves Greystar to act as Property Manager, provided its Management Plan remains subject to City review and approval hereunder.
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(i) Approval of Development Plans. City shall have approved the Development Plans for the Project prepared and submitted by Developer as being in substantial conformity with the Entitlement, this Agreement, and the Fountain Valley Municipal Code. (j) No Default; Representations and Warranties. Developer shall not be in Default of any of its obligations under the terms of this Agreement. All representations and warranties of Developer contained herein shall be true and correct in all material respects.
All conditions set forth in this Section 3.1, or to City’s obligations hereunder, are for City’s benefit only and City Manager may waive all or any part of such rights by written Notice to Developer.
3.2. Payment of Certain Fees at Certificate of Occupancy. In addition to those City fees and other fees required to have been paid as provided above in Section 3.1, prior to the issuance of the CoO for the Project by the City’s building official, Developer shall have delivered to City evidence that additional fees, if any, payable to any other governmental agency have been paid that may not have otherwise been required to have been remitted by Developer therefor shall have been paid in full by Developer.
3.3. Review of Title.
3.3.1. Preliminary Report. Within thirty (30) days of the Date of Agreement, Developer shall submit to City a true copy of an up to date (not older than thirty (30) days) preliminary report issued by the Title Company and shall include hyperlinks to complete and legible copies for each of the title exceptions set forth in said preliminary report. Developer acknowledges that City must be reasonably satisfied concerning the exceptions to title. All monetary encumbrances and exceptions to title are hereby objected to by City, and Developer is on notice to cause the title company to remove or evidence unconditional subordination thereof of any and all monetary exceptions (other than liens for current real property taxes and assessments not yet due and payable.) (a) Existing Encumbrances and/or Monetary Liens of Record. Based on Developer’s representation to the City that it owns fee simple marketable title to the Site, to the extent there exist, if any, monetary liens or other encumbrances of record presently, excepting only liens for current real property taxes and assessments not yet due, payable, or ascertainable, Developer covenants and agrees that as a Condition Precedent to receiving grading permits, Building Permits, or other permits (whichever are to be issued first) Developer shall cause the full and unconditional subordination of such liens and encumbrances to this DBAHA, and Memorandum of Agreement therefor, and the City Covenants Agreement, so that and to evidence that such instruments and agreements are and remain senior, nonsubordinate of record. (i) As provided in the Entitlement, in no event shall the Memorandum of Agreement or the City Covenants be made or become junior or subordinate to any deed of trust, encumbrance, or other documents including those providing financing for the construction or operation of the Project on the Site or ownership of the Site, or any other lien or encumbrance whatsoever against the Site for the Affordability Period, except as expressly mandated by California statute or federal law.
(ii) Each and any subordination agreement therefor shall be in a form and content acceptable to the City’s legal counsel.
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(b) Condition of Title. City shall be reasonably satisfied that Developer continues to have and hold an insured and insurable fee simple marketable title to the Site with no mortgage, lien, pledge, encroachment, exception, or other encumbrance of any character whatsoever, except the following:
(i) liens for current real property taxes and assessments not yet due, payable, or ascertainable;
(ii) as applicable, subordination or intercreditor instrument(s), subject to City’s right to review and approve such document(s), which approval shall not be unreasonably withheld or delayed, that evidence and cause subordination of each and any existing lien or encumbrance as required under subsection (a) of this Section 3.3.1 and in implementation of the Entitlement to ensure this DBAHA, Memorandum of Agreement and City Covenants are and remain senior, nonsubordinate encumbrances of record;
(iii) Memorandum of Agreement;
(iv) City Covenants;
(v) the deed of trust for any loan or loans to construct the Project, provided each Lender shall have agreed in writing to the senior nonsubordinate priority of this DBAHA, the Memorandum of Agreement, and the City Covenants; (vi) Request for Notice of Default;
(vii) other subordination or intercreditor instrument(s), subject to City’s right to review and approve such document(s), which approval shall not be unreasonably withheld or delayed; and
(viii) any other matters approved in writing by City.
3.4. Recordation. The Escrow Holder and Title Company shall be prepared to cause recording of the Memorandum of Agreement, City Covenants, and Request for Notice against the Site pursuant to the terms of this Agreement and the Project Documents.
Section 4. DEVELOPMENT PLANS; INSURANCE AND INDEMNITY, FINANCING.
4.1. Development. Developer shall develop the Project and Improvements (including all onsite and offsite improvements, if any), in particular the Affordable Units at the Project, in accordance with the Entitlement and the approved Development Plans.
4.1.1. Site Preparation. Developer is responsible to prepare the Site for construction, including the demolition, relocation of utilities insofar as necessary, grading and site preparation, and all other actions required to prepare the Site ready for the construction of all Improvements that comprise the Project.
4.2. Design Review; Development Plans for Project. Developer represents that it will cause the construction, operation, management, and maintenance of a first class and high quality housing and commercial development project. Therefore, the provisions of this section 4.2 set forth a process for review and approval of the Development Plans for the overall Project to be (or caused
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to be) designed, constructed, developed, and completed by the Developer hereunder. The parties acknowledge and agree the review process described in this section of the Agreement is in addition to, and is not and shall not be, a substitute for, any process or submittal required by the City (or any other governmental entity) relating in any respect to the Entitlement and/or obtaining all grading permits, Building Permits, or other permits necessary to undertake and complete the Project. The Site shall be developed as established in the approved Development Plans, except for such changes which may be mutually agreed upon between the Developer and City in writing and subject to the change order provisions in this Section 4.2. The parties agree that the final Development Plans shall evidence the first class and high quality development that Developer is required to construct and thereafter operate, manage, and maintain in compliance with and for the periods required under this Agreement.
4.2.1. Grading Plans. Developer shall prepare and submit to the City for review and approval, 100% complete grading plans (“Grading Plans”). The Grading Plans shall be prepared by a registered civil engineer, who may be the same firm as the Developer’s architect. The grading plans shall be consistent with the Entitlement and all conditions of approval therein.
4.2.2. Landscaping Plans. The Landscaping Plans shall be consistent with the Entitlement and all conditions of approval therein. Developer shall prepare and submit to the City for review and approval, the 100% complete landscaping plans (for both hardscape and softscape) (“Landscape Plans”) with such plans depicting and evidencing the first class and high quality development required by this Agreement. The Landscaping Plans shall be prepared by a licensed landscape architect, who may be the same firm as the Developer’s architect.
4.2.3. Construction Drawings. Developer shall prepare and submit to City for review, and to City for review and approval 100% complete working drawings and construction plans that are consistent with the approved Design Development Drawings, Grading Plans and Landscaping Plans (“Construction Drawings”), which shall depict and evidence all Improvements, materials, interior and exterior improvements, all toward evidencing the first class and high quality development as intended by the Entitlement and this Agreement. The Construction Drawings shall be substantially consistent with the prior stages of the development plans submitted to and approved by the City, inclusive of changes, if any, thereto. The Construction Plans shall be prepared by a licensed architect in consultation with a licensed civil engineer. Particular attention and detail shall be evidenced in the Construction Drawings relating to all housing units, including the Affordable Units, common areas, common and other accessways, and interior and exterior improvements, and such submittal(s) shall identify materials to be used, including moveable and immoveable improvements (such as appliances, cabinetry, windows, HVAC, etc.) The 100% complete Construction Drawings, if and when approved by the City, shall be the final plans and specifications for construction of the Project.
4.2.4. Development Plans; Review and Approval. The cumulative stages of this design and working drawings submittal, review, and approval (or disapproval) process (Sections
4.2.1 through 4.2.5) include: (i) (iii) Grading Plans, (iv) Landscaping Plans and (v) Construction Drawings, which together are referred to as the “Development Plans”. (a) City shall have all rights to review and approve or disapprove each stage of the Development Plans and all other required submittals in accordance with the City Code, the City’s development standards, and the Entitlement and nothing set forth in this Agreement (nor
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City’s execution of this Agreement) shall be construed as the City’s prejudgment or approval, expressly or impliedly, thereof, or any other submittal required hereunder.
4.2.5. Revisions. Any and all change orders or revisions to the Development Plans required by the City and its inspectors that are required by the Fountain Valley Municipal Code and all other applicable Uniform Codes (e.g., Building, Plumbing, Fire, Electrical, etc.) and under other applicable laws and regulations shall be incorporated into and included by Developer in the Construction Drawings and shall be completed during the construction of the Project.
4.2.6. Defects in Development Plans. City shall not be responsible either to Developer or to third parties in any way for any defects in any of the Development Plans, nor for any structural or other defects in any work done according to the approved Development Plans, or for any delays reasonably caused by the review and approval processes established hereunder.
4.2.7. City and Other Governmental Permits. Before commencement of construction of the Project, Developer shall secure or cause its contractor to be secured any and all building permits that may be required by the City or any other governmental agency affected by such construction. Developer shall pay all necessary fees and take all actions necessary to obtain any and all such permits. City will cause City staff, without obligation to incur liability or expense therefor, to use reasonable efforts to expedite the City’s issuance of building permits for construction that meets the requirements of the Fountain Valley Municipal Code, and all other applicable laws and regulations and that comply with the Development Plans.
4.2.8. Cooperation re Development Plans; Revisions and Change Orders.
During the preparation of the Development Plans and throughout construction of the Project, City staff and authorized representatives of Developer shall hold joint progress meetings to coordinate the preparation of, submission to, and review of the Development Plans. City staff and authorized Developer representatives shall communicate and consult informally as frequently as is necessary to ensure that the formal submittal of any documents to City can receive prompt and thorough consideration. City shall designate City staff persons or consultant to serve as the project manager for the Project, who shall be responsible for the coordination of City’s (and City’s) activities under this Agreement and for coordinating the permitting process. (a) In the event City disapproves or conditionally approves the Development Plans, or any part(s) thereof, or if Developer desires to propose any substantial revisions to the approved Development Plans, or any part(s) thereof, Developer shall submit its revisions or proposed changes thereto to City Manager (and Planning Director), and shall also proceed in accordance with any and all Governmental Requirements regarding such revisions, within the time frame set forth in the Schedule of Performance for the resubmittal of such Development Plans, or any part(s) thereof. Any revision or change to such Development Plans proposed by Developer may be disapproved by City its City Manager (and City Manager) in her or his reasonable discretion pursuant to subdivision (i) below. Any and all change orders or revisions required by the City and their inspectors that are required under the City Code and Uniform Codes or other governmental requirements shall be included by Developer in its Development Plans and completed during the construction of the Project. In the event Developer requests revisions, alterations, or modifications to the Development Plans, or any part(s) thereof, for any reason including increased construction costs because of unforeseen occurrences or conditions relating to the construction of the Project, any revisions, alterations, or modifications shall be subject to the approval of City in their reasonable discretion pursuant to subdivision (i) below. Developer shall be required to pay any and
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all increased costs of construction due to any such revisions, alterations, or modifications of the Development Plans, or any part(s) thereof.
(i) Developer shall not be required to obtain City approval of any change orders or other revisions or modifications to the Construction Drawings, so long as each change order, revision, or modification is consistent with the approved Development Plan, does not cause any value engineering not previously authorized by City and does not materially affect the design, materials, and architectural quality and integrity of the first class and high quality affordable housing Project intended by the parties (any such change order, revision or modification is referred to herein as an “Exempt Change Order”). Notwithstanding the immediately preceding sentence, Developer shall be required to obtain City approval, which approval shall not be unreasonably withheld or delayed, to the extent any change order, revision, or modification is inconsistent with the approved Development Plans, causes any value engineering not previously approved by City , or materially changes the design, materials or architectural quality and integrity of the Project “NonExempt Change Order”). Further, the determination of whether any proposed change order constitutes an Exempt Change Order or a Non-Exempt Change Order shall be made jointly between and among City and Developer, each in their reasonable discretion, and promptly after receipt of any change order request.
4.2.9. Periodic Submittals to City during Construction. During the course of construction and until the final CoO for the Project is issued by City, Developer shall ensure that City (1) receives a copy of each Non-Exempt Change Order received by Developer from its Contractor or subcontractors within three (3) business days following Developer’s receipt. In no event shall any request for a Non-Exempt Change Order be deemed approved by City unless Developer provides additional written Notice to City (on or after the fifth (5th) business day following City’s receipt of such submittal) requesting affirmative approval or disapproval of such requested Non-Exempt Change Order and City fails to respond within an additional three (3) business days following such additional written Notice from Developer.
4.2.10. Selection of General Contractor. For the work of the General Contractor, Developer agrees to and shall select an experienced, qualified, licensed, insured, and bonded general contractor to be its General Contractor for construction of the Project.
4.3. Cost of Construction; Performance under other Agreements. The cost of planning, designing, developing, and constructing the Project shall be borne solely by Developer.
All fees imposed by any governmental entity in connection with the Site and Project shall be borne by Developer and shall be paid when due by Developer.
4.4. Insurance Requirements. As a Condition Precedent to issuance of Building Permits and continuing throughout the Affordability Period, Developer shall maintain at Developer’s sole expense, with insurers reasonably approved by City, the following policies of insurance in form and substance reasonably satisfactory to City with the coverage limits, conditions, and endorsements defined herein. Insurance for contractors and subcontractors shall be provided to City upon request within ten (10) days of request.
4.4.1. Insurance Coverage from Commencement of Construction through the term of the Affordability Period. From the date of the Closing of Financing through end of the Affordability Period, the Developer shall obtain and maintain the following policies of insurance covering all activities relating to construction and thereafter operation of the Project at the Site. All
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policies shall include an endorsement giving City thirty (30) days advance written notice of cancellation or termination of each policy. Insurers for each policy shall waive subrogation against the City of Fountain Valley and all Indemnitees. Insurers for each policy shall provide to City a waiver of subrogation evidencing the same.
(a) Workers’ compensation insurance. Developer shall maintain Workers Compensation Insurance in the amount and type required by California law. (i) Developer shall execute and deliver to City that certain Workers’ Compensation Certificate for limited liability companies and Sole Proprietors and fully incorporated herein by this reference, which certificate is Developer’s representation and warranty that it is a limited liability company or sole proprietorship and is not legally required to carry Workers’ Compensation Insurance at the time of execution of this Agreement. (b) Commercial general liability insurance, including mobile equipment and not excluding XCU, in an amount not less Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) general aggregate for claims arising out of bodily injury, personal injury and property damage. Coverage shall include contractual, on-going operations and productscompleted operations (Claims made and modified occurrence policies are not acceptable.) (c) Automobile liability insurance, in an amount not less than Two Million Dollars ($2,000,000), combined single limit (bodily injury and property damage liability), including coverage for liability arising out of the use of owned, non-owned, leased, hired, or borrowed automobiles for performance of the work. As used herein the term “automobile” means any vehicle licensed or required to be licensed under the State of California. Such insurance shall apply to all operations of Developer both on and away from the Site. In the event that any drivers are excluded from coverage, such drivers will not be permitted to drive in connection with construction of the Project. (Claims made and modified occurrence policies are not acceptable.) (d) A policy of Builder’s All-Risk property insurance in an amount not less than one hundred percent (100%) of the full replacement value of the Project. (e) Follows Form Excess Liability coverage shall be provided for any underlying policy that does not meet the insurance requirements set forth herein. (Claims made and modified occurrence policies are not acceptable.)
(f) For any claims related to this Agreement, Developer’s insurance coverage shall be primary insurance as respects the City of Fountain Valley and its Indemnitees and shall not contribute with any insurance, or self-insurance, maintained by the parties.
All insurance coverage shall be placed with carriers admitted to write insurance in California, and with an A.M. Best’s Guide Rating of A-, class VII or better, as approved by City. Any deductibles or self-insured retentions in excess of $250,000 must be declared to and approved by City’s risk management director.
4.4.2. Policy Provisions. A certificate or certificates evidencing coverage described in 4.4.1 and 4.4.2 above (“Insurance”) shall be timely submitted to City. The certificates shall be accompanied by appropriate policy endorsements stating that:
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Developer’s insurance coverage shall be primary insurance as respects the City of Fountain Valley and its respective officers, officials, agents, employees, representatives, and volunteers, and shall not contribute with any insurance or self- insurance maintained by the City of Fountain Valley, and/or its respective officers, officials, agents, employees, representatives, and volunteers. A primary-noncontributory endorsement shall be provided for each policy.
(a) Insurer shall provide to City not less than (30) days advance written notice for each policy prior to any, cancellation, termination, or non-renewal of the Insurance. (b) With the exception of the workers compensation policy, the City of Fountain Valley, and its Indemnitees shall be named as additional insureds on all policies, including the excess liability policy. Developer shall provide:
(i) Additional Insured Endorsements, on-going and productscompleted operations, including mobile equipment and not excluding XCU, for the policy under
4.4.2(b), Commercial General Liability. Endorsements shall designate the City of Fountain Valley, and its Indemnitees as additional insureds for liability arising out of all work or operations performed by or on behalf of the Developer. Developer shall provide to City proof of insurance and endorsement forms that conform to City’s requirements, as approved by City. (Forms CG 20 26 07 04 and CG 20 37 07 04 or equivalent)
(c) An Additional Insured Endorsement for the policy under section
4.4.2(c), Automobile Liability, shall designate the City of Fountain Valley and Indemnitees as additional insureds for automobiles owned, leased, hired, or borrowed. Developer shall provide to City proof of insurance and endorsement forms that conform to City’s requirements, as approved by City. (Form CA 20 48 02 99 or equivalent).
(d) Additional Insured Endorsements, ongoing and products-completed operations, under Section 4.4.2(d), Environmental Liability and Remediation, if coverage is applicable to the Project. Endorsements shall designate the City of Fountain Valley and its Indemnitees as additional insureds for liability arising out of all work or operations performed by or on behalf of the Developer. Developer shall provide to City proof of insurance and endorsement forms that conform to City’s requirements, as approved by City. (e) A Loss Payee Endorsement for the policy under Section 4.4.2(e), Builder’s All Risk, shall designate the City of Fountain Valley as Loss Payee. Developer shall provide to City proof of insurance and endorsement forms that conform to City ’s requirements, as approved by the City.
(f) If any of the underlying policies do not meet policy limits as required herein, an Additional Insured Endorsement for the policy under section 4.4.2(f), Follows Form Excess Liability, shall designate the City of Fountain Valley and its Indemnitees as additional insureds under the follows form excess liability policy. Developer shall also provide to City a certificate of insurance stating the excess liability policy follows form and the schedule of underlying policies for the excess liability policy with policy numbers. Developer shall provide to City proof of insurance and endorsement forms that conform to City requirements.
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(g) Upon request by City, Developer shall, within 10 days of original request, provide City with complete certified copies of insurance policies evidencing coverage as required herein. Certificates and endorsements for each insurance policy shall be signed by a person authorized by the insurer to bind coverage on its behalf. If required by City, Developer and/or and subcontractors shall, from time to time, increase the limits of its insurance policies to reasonable amounts customary for owners of improvements similar to those on the Site. In the event any policy of insurance required under this Agreement does not comply with these requirements or is cancelled and not replaced, City have the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Developer.
4.4.3. Insurance Requirements of Contractors and Subcontractors. All Contractors and subcontractors shall be required to provide the same insurance as required of Developer herein, with the exception of policy limits required. Developer shall be responsible to collect and maintain insurance from all Contractors and subcontractors, which shall provide the following policy limits for the policies below:
Workers compensation As required by California law
Commercial general liability policy Not less than $1,000,000 per occurrence and $2,000,000 general aggregate.
Automobile liability policy Not less than $1,000,000 combined single limit Environmental liability (if applicable) Not less than $1,000,000 per occurrence and $2,000,000 general aggregate
4.4.4. Reduction in Requirements. The City Manager, or if designated the City’s risk manager, is hereby authorized to reduce the insurance requirements set forth herein, on a temporary or permanent basis, in the event she/he determines, in her/his sole discretion, that such reduction is in City ’s best interest.
4.4.5. Waiver of Subrogation. Developer hereby waives all rights to recover against each of City (or any officer, employee, agent or representative of City and/or City) for any loss incurred by Developer from any cause insured against or required by any Project Document to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if the coverage thereunder would be materially reduced or impaired as a result. Developer shall use its best efforts to obtain only policies which permit the foregoing waiver of subrogation.
4.5. Indemnity. Developer shall pay for, defend (by counsel reasonably satisfactory to City), indemnify and save and hold harmless the City and its Indemnitees from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without limitation, attorneys’ fees and court costs) arising from or relating to: (i) this Agreement; (ii) a claim, challenge, or cause of action that any person has or asserts against the Project; (iii) a claim, challenge or cause of action that any person has or asserts against any approval, whether discretionary or ministerial, by the City, the City, zoning administrator, or any other board, commission or committee of the City; (iv) a claim, demand or cause of action that any person has or asserts against Developer (v) any act or omission of Developer, any Contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Site or the Project; or (vi) the ownership, occupancy or use of the Site or the Project. Notwithstanding the foregoing, Developer shall not be obligated to
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indemnify City with respect to the consequences of any act of gross negligence or willful misconduct of City. Developer’s obligations under this Section 4.5 shall survive the issuance of the CoO. The requirements under this Section 4.5 are in addition to and do not limit the obligations of Developer under the City Covenants.
(a) Developer shall reimburse City immediately upon written demand for all fees and costs reasonably incurred by City (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consultants, whether the same are independent contractors or employees of City) in connection with the enforcement of the Project Documents, and all related matters including the following: (a) City’s or City’s commencement of, appearance in, or defense of any action or proceeding purporting to affect the rights or obligations of the parties to any Project Document, and (b) all claims, demands, causes of action, liabilities, losses, commissions and other costs against which City is indemnified under the Project Documents. Such reimbursement obligations shall bear interest at the local agency investment fund rate (“LAIF”) based upon the amounts and times of disbursement by City, provided that City gives written demand to Developer.
Such reimbursement obligations shall survive the issuance of the CoO and termination of this Agreement and are in addition to and do not limit the obligations of Developer under the City Covenants.
(b) Developer indemnifies City from any real estate commissions or brokerage fees which may arise from the Site, or the leasing of dwelling units on the Site in conformity with this Agreement.
4.6. Rights of Access. Prior to the issuance of the CoO, for purposes of assuring compliance with this Agreement, representatives of City shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction, including but not limited to, the inspection of the work being performed so long as City representatives comply with all safety rules. City representatives shall, except in emergency situations, notify Developer prior to exercising its rights pursuant to this Section 4.6. City shall have access as necessary to enforce all applicable laws.
4.7. Compliance with Laws. Developer shall carry out the design, construction and operation of the Project in conformity with all applicable laws, including all federal and state labor standards, as and when applicable, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Code, and the Fair Housing Act, 42 U.S.C. Section 3601 et seq. (and 24 C.F.R. Part 100), the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., the Unruh Civil Rights Act, Civil Code Section 51, et seq., and the California Building Standards Code, HSC Section 18900, et seq., and Labor Code Section 218.7. Developer, including but not limited to its contractors and subcontractors, shall comply with applicable federal and state laws, including the California Labor Code with regard to the undertaking, constructing, and completing the Project. Developer shall be solely responsible for determining and effectuating compliance with the applicable laws, and City make no final representation as to the applicability or non-applicability of laws to the overall Project or construction thereof or any part thereof. Developer hereby releases from liability, and agrees to indemnify, defend, assume all responsibility for and hold City and its Indemnitees harmless from any and all claims, demands, actions, suits, proceedings, fines, penalties, damages, expenses resulting from, arising out of, or based upon Developer’s acts or omissions pertaining to the compliance with the laws.
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4.8. Nondiscrimination in Employment. Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability.
4.9. Taxes and Assessments. Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site. Developer shall remove or have removed any levy or attachment made on the Site or any part thereof which is owned or leased by Developer, or shall assure the satisfaction thereof within a reasonable time, but in no event to exceed sixty (60) days.
Developer shall additionally defend, indemnify, and hold harmless City from and against any taxes, assessments, mechanic’s liens, claims of materialmen and suppliers, or other claims by private parties in connection with (a) activities undertaken by Developer or (b) the Site.
4.10. Liens and Stop Notices. Developer shall not allow to be placed on the Site or any part thereof any mechanic’s or materialmen’s lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Project Developer shall within thirty (30) days of such recording or service or within five (5) days of City’s demand whichever last occurs:
(a) pay and discharge the same; or
(b) effect the release thereof by recording and delivering to City a surety bond in sufficient form and amount, or otherwise; or
(c) provide City with indemnification from the Title Company against such lien or other assurance which City deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of City from the effect of such lien or bonded stop notice.
4.11. Further Assurances.
4.11.1. By Developer. Developer shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to City all documents, and take all actions, reasonably required by City from time to time to confirm the rights created or now or hereafter intended to be created under the Project Documents or otherwise to carry out the purposes of the Project Documents.
4.11.2. By City. City shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to Developer all documents, and take all actions, reasonably required by Developer from time to time to confirm the rights created or now or hereafter intended to be created under the Project Documents or otherwise to carry out the purposes of the Project Documents.
4.11.3. Mortgages, Deeds of Trust for the Project. Mortgages and deeds of trust shall be permitted but only for the purpose of securing loans of funds to be used for financing the construction and operation of the Project (including architecture, engineering, legal, construction period carrying costs such as property taxes, insurance and interest, and related direct costs as well as indirect costs) on or in connection with the Project and the Site, and the obtaining of a permanent loan in the amount of the outstanding balance of the construction loan or such greater amount as
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may be permitted hereunder, subject to and so long as the Memorandum of Agreement and City Covenants are and shall remain senior, nonsubordinate encumbrances against the Site.
4.11.4. Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust on Developer’s interest in the Site authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct, complete, or operate the Project or any portion thereof, or to guarantee such construction, completion, or operation; nor shall any covenant or any other provision in this Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon, other than those uses or Improvements provided for or authorized by the Entitlement, this Agreement, and the City Covenants.
4.11.5. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure.
With respect to any mortgage or deed of trust granted by Developer as to the Site as provided herein, whenever City may deliver any Notice or demand to Developer with respect to any breach or default by Developer under this Agreement, City shall at the same time deliver to each first lien holder of record of a mortgage or deed of trust a copy of such Notice or demand; provided that the failure to notify each or any holder of record shall not vitiate or affect the effectiveness of notice to Developer.
Each such holder shall (insofar as the rights granted by City, respectively, are concerned) have the right, at its option, within sixty (60) days after the receipt of the Notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage or deed of trust.
(a) Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Project, or any portion thereof (beyond the extent necessary to conserve or protect the Improvements or construction already made) without first having expressly assumed Developer’s obligations to City by written agreement reasonably satisfactory to City. The holder, in that event, must agree to complete the Project in compliance with the Entitlement and this Agreement, but on a schedule which takes into account the time reasonably required for the holder to obtain title to and possession of Developer’s interest in the Site, analyze and negotiate amendments to plans, specifications, construction contracts and operating contracts or to negotiate new construction contracts and operating contracts. Any such holder properly completing such Improvements shall be entitled, upon compliance with the requirements herein to a CoO. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of Developer’s interest in the Site (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default.
Section 5. COVENANTS AND RESTRICTIONS.
5.1. Use Covenants. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any part thereof, that Developer shall devote the Site, the Project, and all Improvements thereon to the uses and operational covenants specified in the Entitlement and this Agreement and shall own, manage, maintain and otherwise operate the Project on the Site in conformity with the DBL, Entitlement, this Agreement, and the City Covenants, whichever are the more restrictive in each case unless expressly provided to contrary effect herein.
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All uses conducted on the Site, including, without limitation, all activities undertaken by Developer pursuant to this Agreement, shall conform to all applicable provisions of the City Code.
5.2. Affordable Housing Requirements.
5.2.1. Number of Affordable Units. Developer agrees to make available, restrict occupancy to, and rent all thirty-three (33) Affordable Units at Affordable Rent in conformity with the Prescribed Rent Level and Unit Mix to Lower Income Households. An example of the calculation of Affordable Rent for the Affordable Units is attached hereto as Attachment No. 7 and incorporated herein. It is the responsibility of Developer to comply with all income and rent standards.
5.2.2. Duration of Affordability Requirements. The Affordable Units shall be maintained as rental units available at and rented to Lower Income Households throughout the 55- year Affordability Period, as more particularly set forth in the City Covenants.
5.2.3. Selection of Tenants. Developer shall be responsible for the selection of tenants for the Affordable Units in compliance with the criteria set forth in Section 5.2 of this Agreement. No Affordable Unit shall be restricted on the basis of age or any protected category set forth in the federal Fair Housing Law or state Fair Employment and Housing Act (FEHA). In this regard, tenant selection for the Affordable Units shall comply with applicable provisions that are most restrictive and protective of tenants under federal and state laws, and all lawful and reasonable criteria, as set forth in the Management Plan that is required to be submitted to and approved by City under this Agreement. Developer shall use its commercially reasonable efforts to rent vacant Affordable Units to eligible Lower Income Households on City’s tenant interest list (if one is maintained by City).
(a) Developer shall adopt a tenant selection system for the Affordable Units that shall be approved by City Manager in her or his reasonable discretion, which establishes a chronological waiting list system for selection of tenants and meets the requirements of this Section
5.2.3. (b) Developer shall provide written notice to City at least thirty (30) days prior to Developer commencing its marketing activities for the initial lease-up of the Affordable Units in conformance with the approved Management Plan. In addition, this prior notice from Developer to City also shall include a complete copy of the form of the “application” with a description of necessary supporting materials to be completed by applicants for prospective tenancy of an Affordable Unit.
(c) Posting advertisements and notices of the vacancy(ies) at the community center, senior center, other public buildings such as post offices located in the City, at City Hall, and on the City’s website.
5.2.4. Income of Tenants. Each tenant of an Affordable Unit shall qualify as a Lower Income Household (in accordance with the Prescribed Rent Level and Unit Mix) that meets the eligibility requirements established for an Affordable Unit, and Developer shall obtain a certification from each tenant renting or leasing each Affordable Unit that substantiates such fact.
Developer shall verify the income certification of each tenant household as set forth in Section 5.2 hereof. Prior to the first rental of an Affordable Unit, and in addition upon request therefor by City,
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Developer shall submit to City or its designee, at Developer’s expense, a completed income computation and certification form, in a form approved by the City.
5.2.5. Determination of Affordable Rent for the Affordable Units. Each and all Affordable Units shall be rented at an Affordable Rent as established and provided herein: the maximum monthly rental amount for the Affordable Units shall be determined in accordance with the following and shall not to exceed affordable rent under HSC Sections 50052.5 and 50053for each household qualifying as Lower Income. The monthly housing cost means the maximum amount to be charged by Developer and paid by the Lower Income Households occupying the Affordable Units at the Project.
(a) Further, the term includes the total of monthly payments by the tenants of an Affordable Unit for (a) use and occupancy for an Affordable Unit and facilities associated therewith, (b) any separately charged fees or service charges assessed by Developer that are required of all tenants, other than security deposits (but not including fees or charges in connection with voluntary items paid for, leased, or otherwise purchased by tenants of Affordable Units (and required to be paid for, leased or otherwise purchased by tenants of the market rate units) that, for example, might include additional parking spaces(s) above and beyond what is required to be provided to tenants under State and local laws and this Agreement, fees relating to pet ownership or amenities in connection therewith such as dog washing facilities, etc., (c) a reasonable allowance for utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity and gas, as determined by regulation of the Orange County Housing Authority pursuant to 24 C.F.R.
Section 5.600 et seq. and (d) possessory interest, taxes or other fees or charges assessed for the use of the unit and facilities associated therewith by a public or private entity other than Developer. (b) Under this Agreement and for purposes of Affordable Rent for Lower Income Households, each tenant shall meet the following requirements; (i) household income for Lower Income Households shall not exceed the income standard of HSC Section 50079.5, and Affordable Rent shall not exceed the standard and rent calculation under HSC Sections 50052.5 and 50053.
5.2.6. Increases in Tenant Household Income. The Affordable Units shall meet the Prescribed Rent Level and Unit Mix as required despite a temporary noncompliance with the defined Affordable Rent, if the noncompliance is caused by increases in the incomes of existing tenants and if actions are being taken by Developer to ensure that each and all vacancies of the Affordable Units at the Project are filled in accordance with the Prescribed Rent Level and Unit Mix until the noncompliance is corrected.
(a) A tenant who qualified as a Lower Income Household at initial occupancy in the Project in compliance with this Agreement shall be deemed to continue to be so qualified until such time as reverification and certification of the tenant household’s gross income shows that such tenant no longer qualifies as a Lower Income Household. An existing tenant household occupying an Affordable Unit in the Project whose income exceeds the qualifying limit for a Lower Income Household may continue to occupy that Affordable Unit and be charged monthly rent including a reasonable utility allowance, equal to the lesser of thirty percent (30%) of the tenant household's adjusted monthly income, recertified annually, or the market rent applicable to the Affordable Unit as published by State HCD, so long as such continued tenancy does not exceed six (6) months. Such restrictions and requirements about verification and reverification of household income to be and remain eligible for occupancy and tenancy of an Affordable Unit shall be expressly
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stated and separately initialed by each adult member of the tenant household in the lease or other rental agreement for each tenant of each Affordable Unit.
5.2.7. Household Size Appropriate to an Affordable Unit. The term “household size appropriate to the unit” for the purpose of the calculation of Affordable Rent herein (and without regard to actual occupancy), means HSC Sections 50052.5 and 50053. Notwithstanding the foregoing portion of this Section 5.2.7, Developer agrees that Affordable Rent shall not exceed the Prescribed Rent Level. It is the responsibility of Developer to comply with all income and rent standards. Developer acknowledges that such Prescribed Rent Level may further diminish rental income from the overall Project.
5.3. Verifications.
5.3.1. Income Verification. Developer shall verify the income of each proposed and existing tenant of the each and every Affordable Unit in the Project.
5.3.2. Annual Reports. Following the issuance of the final CoO, and on or before the next following March 30 and on or before March 30 in each following Year of the Affordability Period, Developer, at its expense, shall submit to City or its designee such reports as are designated from time to time by the City Manager, in the form prescribed by City. Each annual report shall cover the immediately preceding Year.
(a) Developer shall maintain on file each tenant’s executed lease and Income Verification and rental records for all Affordable Units. Developer shall maintain complete and accurate records for all Affordable Units and will permit any duly authorized representative of City to inspect the books and records of Developer pertaining to this Agreement and the Affordable Units. Developer shall prepare and submit to the City Manager on the first March 15 following the issuance of the final CoO and continuing on each Year on or before March 15 throughout the Affordability Period, a Certificate of Continuing Program Compliance. Such documentation shall state for each Affordable Unit: the unit size, the rental amount, the number of occupants, the income of the occupants, whether the tenant holds a Portable Voucher, and any other information which may be used to determine compliance with the terms of this Agreement and the City Covenants. (i) As provided in the Entitlement, Developer shall make all tenant files relating to the Affordable Units available to City and its representatives for review each Year of the Affordability Period; and, City will provide Developer a 24-hour notice prior to and related to such inspection.
(b) As part of its annual report, Developer shall include shall evidence in accordance with GAAP that the amounts on deposit and amounts expended, if any, in and form the Capital Replacement Reserve comply with this Agreement. (i) Developer agrees that Developer shall cooperate fully with City, its staff, counsel, and consultants in providing information necessary or convenient, in the reasonable judgment of City, and City may conduct an audit. Keyser Marston Associates, Inc., or another firm or economist mutually acceptable to City and Developer, will be employed to determine compliance with the Entitlement, this Agreement, and the City Covenants. If an audit becomes necessary, the costs of employing such consulting professional(s) shall be borne by City initially; however, if any audit reveals noncompliance as to one or more Years, Developer shall reimburse
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City for costs of the audit and professional review (which may require engagement of accountants, attorneys, or other professionals).
5.4. Maintenance of Site. Developer agrees for itself and its successors in interest to the Site, to maintain the Project and the Site in conformity with this Agreement, the City Code, the Entitlement, and City Covenants, and shall keep the Site free from any accumulation of debris or waste materials. Developer shall also maintain the landscaping planted on the Site in a healthy condition.
5.4.1. Maintenance Standards. Developer and its maintenance staff, contractors or subcontractors shall comply with the following standards as to the Project (collectively, “Maintenance Standards”):
(a) The Project shall be maintained in conformance and in compliance with the approved final as-built plans, and reasonable Maintenance Standards that comply with industry standards (industry standards applicable at such time) for first class and high quality housing and commercial development projects in Southern California. In this regard the standard of maintenance and upkeep of the Project (both interior and exterior improvements), hardscape, and landscaping shall be commensurate with other first class and high quality projects in Southern California at such relevant time during the compliance periods required under this Agreement; provided however, when determining comparable projects, the age of the improvements shall be considered; provided that nothing in such comparison shall modify, expressly or impliedly, the maintenance and property management standards set forth in this Section 5.4.1 and otherwise in this Agreement.
(b) Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all 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 include, but not be limited to:
(i) maintenance of all sidewalks, paths and other paved areas in clean and weed-free condition; (ii) maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; (iii) removal of all trash, litter, bulky items, and other debris from improvements and landscaping prior to mowing; (iv) clearance 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, debris, and other discarded items are properly disposed of by maintenance workers. (d) Repair maintenance includes work to fix, repair, or correct exterior conditions of the Units, common areas, parking, and overall Project, including: (i) painted surfaces, materials, other surfaces, and all onsite amenities are maintained free from fading, peeling, chipping, cracked surfaces, holes or other damage; and (ii) all broken fixtures, lights, and other improvements are repaired or replaced.
(e) Repair maintenance also includes work to repair and fix broken or other non-functional appliances (only those provided by Developer as part of a Unit), plumbing, electrical, HVAC and structural improvements of the interiors of the commercial space and all
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housing units, including the Affordable Units, at the Project consistent with property management standards required herein, subject to exclusions referenced in a tenant’s lease for damages such as that caused by tenant’s intentional action or inaction from misuse or neglect within the housing unit.
5.4.2. Notice re Non-Compliance. City agrees to notify Developer in writing (including by email) if the conditions of the Project or Site do not meet with the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Developer to cure the deficiencies. Upon notification of any maintenance deficiency, Developer shall have thirty (30) days within which to correct, remedy or cure the deficiency. If the written notification relates to a problem that is urgent and relating to the public health and safety as reasonably determined in writing by the police department, fire department, department of public works, building department or other first responder public agency, then Developer shall have forty-eight (48) hours (or any such longer time as may be reasonable under the circumstances) to rectify the problem. In the event Developer does not maintain the Site in the manner set forth herein and in accordance with the Maintenance Standards, City shall have, in addition to any other rights and remedies hereunder, the right to maintain the Site, or to contract for the correction of such deficiencies, after written Notice to Developer, and Developer shall be responsible for the payment of all such costs incurred by City.
5.4.3. Program Maintenance. In addition to the routine maintenance and repair required pursuant to Section 5.4 and the requirements set forth herein and in the City Covenants, Developer shall perform the following minimum programmed maintenance of the Project and Site:
(a) Interior painting, interior carpets in common areas, and window covering replacement at least every seven (7) years;
(b) Exterior painting at least every ten (10) years;
(c) Repair, resurfacing, and re-striping of parking areas and walkways at least every five (5) years;
(d) Replacement of all deteriorated or worn landscaping at least every five (5) years; and
(e) Replacement of all deteriorated or worn recreational and play equipment at least every five (5) years.
Notwithstanding the foregoing, if the City Manager reasonably determines that the Project suffers from significant and unexpected wear and tear requiring any of the above items of maintenance to be performed sooner than as set forth above, City may require that such maintenance actions be performed within a reasonable time, even if sooner than the time periods set forth above.
Upon the request of Developer, the City Manager, at his/her sole, reasonable discretion, may grant a waiver or deferral of any program maintenance requirement. Developer shall keep such records of maintenance and repair as are necessary to prove performance of the program maintenance requirements.
5.4.4. Occupancy Limits. Developer agrees to comply with the following minimum and maximum occupancy for the Affordable Units in the Project provided however, subject to applicable law, nothing herein shall prohibit the Developer from utilizing or complying with more restrictive occupancy limits imposed with respect to the Site or Project: (i) for the studio
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units the maximum occupancy is two persons, (ii) for the one-bedroom units the maximum occupancy is four persons, and (iii) for the two bedroom units the maximum occupancy is six persons and the minimum occupancy is two persons; in this regard, maximum occupancy is two persons per sleeping/bedroom and living area(s).
5.5. Nondiscrimination Covenants. Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Site, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Site or any portion thereof.
The foregoing covenants shall run with the land.
5.5.1. Required Clauses. Developer shall refrain from restricting the rental, sale, or lease of the Site on the basis of race, color, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.” In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.”
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In contracts: “There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this Agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
5.6. Management of the Project.
5.6.1. Property Manager. Developer shall, or shall cause, the Site and Project, in particular the Affordable Units, to be managed in a prudent and business-like manner, consistent with good property management standards for other first class and high quality developments in Southern California. Developer may contract with a property management company or property manager, to operate, manage, and maintain the Affordable Units in accordance with the terms of this Section 5.6 (“Property Manager”); provided, however, the selection and hiring of the Property Manager (and each successor or assignee), including any Affiliate, is and shall be subject to prior written approval of the City Manager (or designee) in her or his discretion. The Property Manager shall manage the Affordable Units in accordance with the definitions of Affordable Rent, the tenant selection requirements, and the definitions relating to Lower Income set forth herein. Developer shall conduct due diligence and background evaluation of any potential third party property manager or property management company to evaluate experience, references, credit worthiness, and related qualifications as a property manager of affordable housing. Any proposed property manager shall have significant and relevant prior experience with affordable housing properties comparable to the Project and the references and credit record of such property manager/company shall be investigated (or caused to be investigated) by Developer prior to submitting the name and qualifications of such proposed property manager to the City Manager for review and approval. A complete and true copy of the results of such background evaluation shall be provided to the City Manager. Approval of a Property Manager by City Manager shall not be unreasonably delayed but shall be in his/her sole reasonable discretion, and the City Manager shall use good faith efforts to respond as promptly as practicable in order to facilitate effective and ongoing property management of the Affordable Units at the Project. The replacement of a Property Manager by Developer and/or the selection by Developer of any new or different Property Manager during the Affordability Period shall also be subject to the foregoing requirements.
5.6.2. Property Management Plan. Prior to and as a Condition Precedent, Developer shall prepare and submit to the City Manager for review and approval, a management plan for the Affordable Units that includes a detailed plan and strategy for long term marketing, operation, maintenance, repair and security thereof at the Project, inclusive of the method of selection of tenants, rules and regulations for tenants, and other rental policies for the Affordable Units at the Project (“Property Management Plan”). City Manager shall review and shall act reasonably to approve or disapprove the Property Management Plan within a reasonable time. Subsequent to approval of the Property Management Plan by the City Manager, the ongoing management and operation of the Affordable Units at the Project shall be in compliance with the approved Property Management Plan. During the Affordability Period, Developer and its Property Manager may from
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time to time submit to the City Manager proposed amendments to the Property Management Plan, the implementation of which shall also be subject to the prior written approval of the City Manager.
5.6.3. Gross Mismanagement. During the Affordability Period, and in the event of “Gross Mismanagement” (as defined below) of the Affordable Units at the Project, and City (acting through the City Manager) shall have and retain the authority to direct and require any condition(s), acts, or inactions of Gross Mismanagement to cease and/or be corrected immediately, and further to direct and require the immediate removal of the Property Manager and replacement with a new qualified and approved Property Manager, if such condition(s) is/are not ceased and/or corrected after expiration of thirty (30) days from the date of written Notice from the City Manager. If Developer or Property Manager has commenced to cure such Gross Mismanagement condition(s) on or before the 20th day from the date of written Notice (with evidence of such submitted to the City Manager, as applicable), but has failed to complete such cure by the 30th day (or such longer period if the cure cannot reasonably be accomplished in thirty (30) days as reasonably determined by the nondefaulting party), then Developer and its Property Manager shall have an additional 10 days to complete the cure of Gross Mismanagement condition(s). In no event shall any condition of Gross Mismanagement continue uncured for a period exceeding forty-five (45) days from the date of the initial written Notice of such condition(s), except that the conditions described in subdivisions (d) and (e) below may exist for up to, but no longer than, seventy-five (75) days without triggering City’s right to remove the Property Manager as described in the immediately following sentence as long as Developer is diligently working to cure such conditions of Gross Mismanagement. If such condition(s) do persist beyond such period, the City Manager shall have the absolute right to immediately and without further notice to Developer (or to Property Manager or any other person/entity) to remove the Property Manager and replace the Property Manager with a new property manager of City Manager’s selection at the sole cost and expense of Developer. If Developer takes steps to select a new Property Manager that selection is subject to the requirements set forth above for selection of a Property Manager.
(a) For purposes of this Agreement, the term “Gross Mismanagement” means management of the Affordable Units at the Project in a manner that violates the terms and/or intention of the Entitlement, this Agreement, and the City Covenants for operation of a first class and high quality development, in particular the Affordable Units at the Project, and shall include, but is not limited to, any one or more of the following:
(i) Leasing Affordable Units to tenants who do not qualify as Lower Income Households;
(ii) Charging rent in excess of Affordable Rent for the Affordable Units;
(iii) Allowing tenants of the Affordable Units to exceed the prescribed occupancy levels without taking immediate action to stop such overcrowding; (iv) Under-funding required Capital Replacement Reserve accounts;
(v) Failing to timely maintain the Affordable Units at the Project in accordance with the Property Management Plan and the Project in compliance with the Maintenance Standards;
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(vi) Failing to submit timely and/or adequate annual reports to City as required herein as to operation of the Affordable Units at the Project; (vii) Fraud or embezzlement of Project funds, including without limitation funds in reserve accounts;
(viii) Failing to fully cooperate with the Fountain Valley Police Department or other local law enforcement agency(ies) with jurisdiction over the Project, in maintaining a crime-free environment within the Project, in particular as to the Affordable Units, or in implementing measures recommended by the Fountain Valley Police Department; (ix) Failing to fully cooperate with the Fountain Valley Fire Department or other local public safety agency(ies) with jurisdiction over the Project, in maintaining a safe and accessible environment within the Project, in particular as to the Affordable Units, or in implementing measures recommended by the Fountain Valley Fire Department; (x) Failing to fully cooperate with the Fountain Valley Planning and Building Department, or other local health and safety enforcement agency(ies) with jurisdiction over the Project, in particular the Affordable Units, in maintaining a decent, safe, and sanitary environment within the Project or in implementing measures recommended by the Fountain Valley Planning and Building Department;
(xi) Maintaining or allowing the Site to be maintained as a public nuisance or in a manner in conflict with any provision of the City Code; and (xii) Spending funds from the Capital Replacement Reserve account for items that are not defined as eligible costs, including eligible capital and/or replacement costs, under the standards imposed by GAAP (and/or, as applicable, generally accepted auditing principles).
(b) Notwithstanding the requirements of the Property Manager to correct any condition of Gross Mismanagement as described above, Developer is obligated and shall use its best efforts to correct any defects in property management or operations at the earliest feasible time and, if necessary, to replace the Property Manager of the Affordable Units as provided above.
Developer shall include advisement and provisions of the foregoing requirements and requirements of this Agreement within any contract between Developer and its Property Manager for the Affordable Units at the Project.
5.6.4. Code Enforcement. Developer acknowledges and agrees the City and its employees and authorized agents, shall have the right to conduct code compliance and/or code enforcement inspections of the Project, in particular the Affordable Units, both exterior and interior, at reasonable times and upon reasonable notice (not less than 48 hours prior notice, except in an emergency) to Developer and/or an individual tenant. If such notice is provided by City representative(s) to Developer, then Developer (or its Property Manager) shall immediately and directly advise any affected tenant of such upcoming inspection and cause access to the area(s) and/or Affordable Units at the Project to be made available and open for inspection. Developer shall include express advisement of such inspection rights within the lease/rental agreements for each Affordable Unit in the Project in order for each and every tenant and tenant household to be aware of this inspection right.
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5.7. Capital Reserve Requirements. Commencing upon issuance of the CoO, Developer shall annually set aside an amount of not less than Three Hundred Dollars ($300.00) per Affordable Unit (33 Affordable Units times $300 equals $9,900) or such increased amount required by a Lender from the gross rents received from the Affordable Units at the Project, into a separate interest bearing trust account defined as the Capital Replacement Reserve. Funds in the Capital Replacement Reserve shall be used only for capital repairs, improvements, and replacements to the Project, including fixtures and equipment, which are normally capitalized under generally accepted accounting principles including “capital repair” as defined in the Internal Revenue Code. The nonavailability of funds in the Capital Replacement Reserve does not in any manner relieve or lessen Developer’s obligation to undertake any and all necessary capital repairs, improvements, or replacements and to continue to maintain the Affordable Units at the Project in the manner prescribed herein. Not less than once per year, Developer, at its expense, shall submit to the City Manager an accounting for the Capital Replacement Reserve for the Affordable Units at the Project. Capital improvements and repairs to, and replacements for Affordable Units at the Project shall include only those items with a long useful life, including without limitation the following: carpet and drapery replacement; appliance replacement; exterior painting, including exterior trim; hot water heater replacement; plumbing fixtures replacement, including tubs and showers, toilets, lavatories, sinks, faucets; air conditioning and heating replacement; asphalt repair and replacement, and seal coating; roofing repair and replacement; landscape tree replacement; irrigation pipe and controls replacement; sewer line replacement; water line replacement; gas line replacement; lighting fixture replacement; elevator replacement and upgrade work; miscellaneous motors and blowers; common area furniture replacement; and common area repainting. In connection with each annual report, to the City Manager by Developer, City Manager will evaluate the cumulative amount on deposit in the Capital Replacement Reserve account and exercise his/her sole, reasonable discretion to determine if existing balance(s) in, proposed deposits to, shortfalls, if any, and/or a cumulative unexpended/unencumbered account balance in such Capital Replacement Reserve account are adequate to provide for necessary capital repairs and improvement for the Affordable Units at the Project.
Notwithstanding the foregoing portion of this Section 5.7, in the event a Lender prescribes particular amounts to be set aside as a capital replacement reserve that exceeds the requirements of this Section 5.7, compliance therewith shall be deemed to comply with this Section 5.7.
5.8. Effect of Violation of the Terms and Provisions of this Agreement after CoO Issued. City is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the City Covenants running with the land have been provided, without regard to whether City has been, or is, or becomes, an owner of any land or interest in the Site. City shall have the right, if the Agreement or any covenants in any agreement pursuant to this Agreement, including without limitation the City Covenants, are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and such covenants may be entitled.
Section 6. DEVELOPER’S GENERAL REPRESENTATIONS AND WARRANTIES.
In addition to the representations under Section 1.5, Developer represents and warrants to City that:
6.1. Formation, Qualification and Compliance. Developer (a) is a Delaware limited liability company validly existing and in good standing under both the laws of the State of Delaware
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and the State of California for its operations and property ownership in the State of California; (b) has all requisite authority to conduct its business and own, purchase, improve and sell its properties. Developer is in compliance in all material respects with all laws applicable to its business and has obtained all approvals, licenses, exemptions and other authorizations from, and has accomplished all filings, registrations and qualifications with any governmental agency that are necessary for the transaction of its business; (c) Developer has and will in the future duly authorize, execute and deliver this Agreement and any and all other agreements and documents required to be executed and delivered by Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement; (d) Developer does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of Developer to carry out its obligations hereunder; (e) There are no material pending or, so far as is known to Developer, threatened, legal proceedings to which Developer is or may be made a party or to which any of its property is or may become subject, which have not been fully disclosed by Developer to City in this Agreement which could materially adversely affect the ability of Developer to carry out its obligations hereunder; and (f) There is no action or proceeding pending or, to Developer’s best knowledge, threatened, looking toward the dissolution or liquidation of Developer and there is no action or proceeding pending or, to Developer’s best knowledge, threatened by or against Developer which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of Developer to carry out its obligations hereunder.
Each of the foregoing items (a) to (f), inclusive, shall be deemed to be an ongoing representation and warranty. Developer shall advise City in writing if there is any change pertaining to any matters set forth or referenced in the foregoing items (a) to (f), inclusive.
6.2. Execution and Performance of Project Documents. Developer has all requisite authority to execute and perform its obligations under the Project Documents. The execution and delivery by Developer of, and the performance by Developer of its obligations under, each Project Document has been authorized by all necessary action and do not and will not violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by-laws, or other governing document applicable to Developer.
Section 7. DEFAULTS, REMEDIES, AND TERMINATION.
7.1. Default Remedies. Subject to the extensions of time set forth in this Section 7, failure by a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a “Default” or “Event of Default” under this Agreement. A party claiming a Default shall give written Notice of Default to the other parties specifying the Default. Except as otherwise expressly provided in this Agreement, and without limiting or affecting rights of parties hereto to terminate this Agreement, the claimant shall not institute any proceedings against any other party, and such other party shall not be in Default if such party within thirty (30) days from receipt of such Notice, immediately and with due diligence, commences to cure, correct or remedy the specified Default and shall complete such cure, correction or remedy with diligence. In the event the party in Default, or causing such Default, fails to cure within said thirty (30) days, or if such breach is of a nature that it cannot be cured within said thirty (30) days, then the defaulting party shall commence to cure in an additional fifteen (15) days (i.e., within forty-five (45) days of Notice of Default) and the defaulting party shall diligently complete such cure, correction or remedy within a reasonable time thereafter but in no event later than one hundred twenty (120) days from the date of the Notice of Default.
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7.2. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, any party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California.
7.3. Acceptance of Service of Process. In the event that any legal action is commenced against City, service of process on City shall be made by personal service upon the City Clerk or in such other manner as may be provided by law. In the event that any legal action is commenced against Developer, service of process on Developer shall be made in such manner as may be provided by law and shall be effective whether served inside or outside of California.
7.4. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party.
7.5. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.
7.6. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement.
7.7. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; riots; floods; unusually severe weather; earthquakes; fires; casualties; acts of God; acts of the public enemy; acts or omissions of another party, or acts or failures to act of City or any other public or governmental agency or entity (excepting that acts or failures to act of City shall not excuse performance by City. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause (or such longer period as is reasonably needed under the circumstances), if Notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Developer. The City Manager shall have authority to approve extensions on behalf of City not to exceed a cumulative total of one hundred eighty (180) days.
7.8. Transfers.
7.8.1. General Prohibition of a Transfer without City Consent; Covenant Not to Transfer Except in Conformity. Developer has demonstrated to the City the qualifications and experience of O.C. Urban Ventures, LLC (which is the manager entity of the Developer entity) as a successful developer of mixed use projects, with commercial and residential components, along with the experience and qualifications of the selected initial property management entity (Greystar). In
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this regard, the long-term ownership, operation, and property management of the Site and Project, in particular the residential component that includes the Affordable Units, are of particular concern to the City. Accordingly, commencing upon the recordation of this Agreement and the City Covenants and continuing to the end of the Affordability Period, no voluntary or involuntary successor-in-interest of Developer shall acquire any rights or powers under this Agreement or the City Covenants, nor shall Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the Site or Project or any part thereof, in particular that includes the Affordable Units, or this Agreement or the City Covenants (each and collectively referred to herein as a “Transfer”) without the prior written approval of the City, except as expressly set forth herein, which approval shall not be unreasonably withheld or delayed. (a) Therefore, for each proposed Transfer, Developer shall first obtain the prior written consent of the City through the City Manager, which consent shall not be unreasonably withheld or delayed. The City Manager retains all rights to submit a proposed Transfer to the City Council for consideration and action to approve (or disapprove) in their reasonable discretion.
In connection with and prior to any Transfer, (a) Developer, as transferor, shall evidence its compliance with this Agreement, (b) Developer shall provide to City the form of and terms and conditions of the proposed assignment by Developer, as transferor, and assumption by transferee, of this Agreement and the City Covenants and that such instruments are and shall remain senior and nonsubordinate as required under the DBL for the Affordability Period. Any Transfer without such prior consent shall, at City’s option, be void.
7.8.2. City Consideration of Requested Transfer. City agrees that it will consider in good faith Developer’s request for a Transfer after the achievement of occupancy of all of the Affordable Units and following the issuance by City of the CoO, provided Developer delivers written Notice to City requesting such approval and provided that the City Covenants remain in full force and effect and Developer is in compliance therewith. Such Notice shall be accompanied by sufficient evidence regarding the proposed Transfer and the assignee’s or purchaser’s development and/or operational qualifications and experience in the operation of facilities similar to the Project, its financial commitments and resources, and the financial terms of such assignment in sufficient detail to enable City to reasonably evaluate and approve (or disapprove) the proposed assignee or purchaser pursuant to the criteria set forth in this Section 7.8. (a) Within sixty (60) days after the receipt of Developer’s written Notice requesting approval of a proposed Transfer pursuant to this Section 7.8, City shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, City reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, Developer shall promptly furnish to City such further information as may be reasonably requested. (b) Notwithstanding the foregoing, a Transfer shall not entitle City to receive compensation in connection therewith, excepting the City shall be reimbursed and paid for all Third Party Costs incurred related to such request for Transfer and assignment. (c) An assignment and assumption agreement in form satisfactory to City’s legal counsel shall also be required for each Transfer. Developer agrees and acknowledges that in connection with a Transfer and assignment approved by City under this Agreement, Developer shall remain liable for performance pursuant to this Agreement for a period of five (5) years following such assignment.
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7.8.3. Permitted Transfers. The term Permitted Transfer is defined in Section 1.1; in such regard, each Permitted Transfer shall be subject to the terms and conditions in that definition.
In the event of a Permitted Transfer as set forth in subparts (a), (b), (c) and/or (d) of such definition, Developer nevertheless agrees that at least fifteen (15) calendar days prior to such Permitted Transfer (subparts (a), (b) (c) and/or (d) thereof) it shall give written notice to City of such assignment and satisfactory evidence that the assignor is then presently in compliance with this Agreement and the City Covenants, and that the assignee will assume all of the obligations thereof of this Agreement and the City Covenants in writing through an assignment and assumption agreement in a form reasonably acceptable to the City and its legal counsel. The form of each assignment and assumption agreement shall be submitted to the City for review and reasonable approval by the City’s counsel not later than fifteen (15) calendar days prior to the proposed date of the Permitted Transfer.
7.9. Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Developer and its permitted successors and assigns. Whenever the term “Developer” is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided.
7.10. Assignment by City. City may assign or transfer any of its rights or obligations under this Agreement and/or the City Covenants to the Fountain Valley Housing Authority without the consent or other approval of Developer.
7.11. Non-Liability of Officials and Employees of City. No member, official, officer or employee of City shall be personally liable to Developer, or any successor in interest, in the event of any Default or breach by City or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this Agreement.
7.12. Relationship between City and Developer. It is hereby acknowledged that the relationship between City and Developer is not that of a partnership or joint venture and that City, on the one hand, and Developer, on the other hand, shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided in this Agreement, including the Attachments hereto, City shall not have any rights, powers, duties, or obligations with respect to the development, operation, maintenance or management of the Project or the Affordable Units thereon.
7.13. City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by City, the City Manager is authorized to act on behalf of City (and, if applicable, when action or approval of City is necessary, then the City Manager is authorized to act on behalf of City), unless specifically provided otherwise or the law otherwise requires.
7.14. Real Estate Brokers. Developer represents and warrants to City that no broker or finder is entitled to any commission or finder’s fee in connection with this transaction and agrees to defend and hold harmless City from any claim to any such commission or fee resulting from any action on its part.
Section 8. RELOCATION.
8.1. Developer Responsible for Relocation. Developer agrees to and shall be fully responsible for administering Relocation, if any is required, including determinations of eligibility, extent of advisory assistance, and scope and amount of benefits and monetary payments pursuant to the applicable Relocation Laws, subject to review by the City Manager. Developer shall cause to be
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provided and shall pay any and all Relocation assistance and benefits, if any due, in accordance with Relocation Laws and in a manner and in amounts expressly approved by City Manager to each eligible displaced person or business, if any. City Manager’s approval rights in the preceding sentence shall be limited solely to determining compliance with Relocation Laws. Developer is and shall remain solely responsible to pay all out-of-pocket costs for direct payments to eligible person(s), household(s) and business(es), if any, for Relocation assistance and benefits due and paid and for any other costs incurred related to Relocation, including a Relocation consultant, and any and all costs or fees incurred pursuant to Section 8.2 below.
8.2. Indemnification by Developer Relating to Relocation. Developer hereby covenants and agrees to indemnify, save, protect, hold harmless, pay for, and defend the City, City and their Indemnitees from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including without limitation penalties, fines, and monetary sanctions), losses, costs, or expenses, including without limitation consultants’ and attorneys’ fees, or relocation benefits claimed or payable under the Relocation Laws (for purposes of this Section 8.2, the foregoing shall be referred to as “Liabilities”) which may now or in the future be incurred or suffered by Indemnitees by reason of, or resulting, in full or in part, or in any respect whatsoever from the displacement and Relocation of persons or businesses pursuant to or resulting from the implementation of this Agreement. At the request of Developer, City shall cooperate with and assist Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that City shall not be obligated to incur any expense in connection with such cooperation or assistance.
8.2.1. Release. Developer, on behalf of itself and its Affiliates, and any and all successors and assigns hereby fully and finally releases the Indemnitees from any and all manner of actions, causes of action, suits, obligations, liabilities, judgments, executions, debts, claims and demands of every kind and nature whatsoever, known and unknown, which Developer and any of its affiliates, successors or assigns may now have or hereafter obtain against the Indemnitees by reason of, arising out of, relating to, or resulting from in full or in part, the election of Developer to proceed with the Project pursuant to this Agreement except to the extent arising out of the negligence or willful misconduct of any of the Indemnitees or a breach by City of any representation, warranty or covenant contained in this Agreement or any of the other Project Documents (collectively, “Claims”), which release shall include but not be limited to any Claims for Relocation assistance or benefits under federal, state, local, or any other applicable laws or Governmental Requirements. The parties agree that, with respect to the release of Claims as set forth above, all rights under Section 1542 of the California Civil Code and any similar law of any state or territory of the United States are expressly waived. Section 1542 reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AND THAT, IF KNOWN BY HIM OR HER,
WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR OR RELEASING PARTY.
Developer Initials: ______
Section 9. MISCELLANEOUS.
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9.1. Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of City to Developer, or any other claim by Developer against City in connection with the Site or the Project or the Affordable Units, or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer’s obligations under this Agreement (including without limitation the attachments hereto), or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under the Project Documents.
9.2. Notices. All Notices, demands, approvals and other communications provided for in the Project Documents shall be in writing and be delivered to the appropriate party at its address as follows:
If to Developer: Slater Investments, LLC
1501 Quail Street, Suite 100A
Newport Beach, CA 92660
Attn: Peggy Tabas
With a copy to: Jackson Tidus
2030 Main Street, 12th Floor
Irvine, CA 92614
Attn: Gregory P. Powers
If to City: Fountain Valley Housing City
10200 Slater Avenue
Fountain Valley, CA 92708
Attn: City Manager
with a copy (the mailing of which shall not constitute notice to City) to:
Harper & Burns
Legal Counsel, City of Fountain Valley
453 S. Glassell Street
Orange, California 92866
Attn: Colin R. Burns
and, copy to (the mailing of which shall not constitute notice to City):
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, CA 92660
Attn: Celeste Stahl Brady
Addresses for Notice may be changed from time to time by written Notice to all other parties.
All communications shall be effective when actually received; provided, however, that nonreceipt of any communication as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication.
9.3. No Third Parties Benefited. This Agreement is made for the purpose of setting forth rights and obligations of Developer and City in implementation of the Entitlement as such
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relates to the Affordable Units, and no other person; provided however, the Fountain Valley Housing Authority is an intended third party beneficiary of this Agreement and there are no other third party beneficiaries hereunder.
9.4. Binding Effect; Assignment of Obligations. This Agreement shall bind, and shall inure to the benefit of, Developer and City and their respective successors and assigns. Developer shall not assign any of its rights or obligations under any Project Document without the prior written consent of the City Manager, which consent may be withheld in her or his sole and absolute discretion. Any such assignment without such consent shall, at City’s option, be void.
9.5. Counterparts. Provided that the written approval of the City Manager is first obtained, any Project Document may be executed in counterparts, all of which, taken together, shall be deemed to be one and the same document.
9.6. Prior Agreements; Amendments; Consents. The Entitlement, together with this Agreement and other Project Documents contain the entire terms and conditions by and between City and Developer with respect to the Site and Project, and all prior negotiations, understandings and agreements with respect to such matters, any such agreements being superseded by this Agreement and such other Project Documents (excepting that all conditions of the Entitlement as to the Site, including without limitation the City Covenants, shall remain in full force and effect). No modification of any Project Document (including waivers of rights and conditions) shall be effective unless in writing and signed by the party against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 49 plus two signature pages, S-1 and S-2, and Attachments 1 through 9 which constitutes the entire understanding and agreement of the parties as to the Affordable Units required under the Entitlement and the DBL as implemented by this Agreement and the City Covenants.
All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of City (and City, if applicable) and Developer, and all amendments hereto must be in writing by the appropriate authorities of City (and City, if applicable) and Developer.
48 4856-2683-0644v9/200348-0007
9.7. Developer’s Payment and Reimbursement of City’s Third Party Costs.
9.7.1. Third Party Costs Defined; Obligation. Developer shall pay for and reimburse City for the following out-of-pocket, third party costs (but not in-house staff time), fees, and expenses reasonably incurred by City for any and all of the following from the period of time commencing upon the Date of Agreement and through the end of the term of the Affordability Period (together, “Third Party Costs”): (a) implementation of this Agreement, (b) processing each stage of the Development Plans, (c) escrow company fees and title company fees incurred in connection with the Project Documents; (d) drafting, negotiation, and execution of implementing agreements and/or amendments after the Date of Agreement; (e) enforcement of this DBAHA, the City Covenants or any other Project Documents, including the following: (i) commencement of, appearance in, or defense of any action or proceeding purporting to affect the rights or obligations of the parties to any implementing documents hereunder, and (ii) all claims, demands, causes of action, liabilities, losses, commissions and other costs against which City and its Indemnitees are indemnified hereunder, provided as to defense of any action which City (or any Indemnitee) has or have tendered the defense to Developer and Developer fails to defend any such action; and (f) other costs incurred related to requests by Developer to City for or provision of estoppel certificates or comparable creditor and/or intercreditor instruments, subordination agreements, affirmation thereof, plans, or review and approval of any other matters requiring City review, consideration and/or approval (or disapproval) hereunder or under any implementing documents.
9.7.2. Payment of Third Party Costs. Within forty (40) days of the submittal by City staff of copies of invoices or billings for Third Party Costs incurred, it is and shall be the obligation of Developer to reimburse and pay to City one hundred percent (100%) of these Third Party Costs.
(a) This reimbursement obligation shall bear interest from the date occurring forty (40) days after City Authority gives written demand to Developer at the rate of ten percent (10%), or the maximum rate then permitted by law. (b) This reimbursement obligation shall remain in effect for the Affordability Period.
9.7.3. Exception to Payment of Third Party Costs. Notwithstanding Section
9.7.1, and 9.7.2 above, Developer shall not be responsible to pay and reimburse for Third Party Costs if the costs incurred are attributable to an Event of Default by City or the City’s gross negligent acts or willful misconduct under this Agreement.
9.8. Governing Law. All of the Project Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California. Developer irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange as well as the Federal District Court for the Central District of the State of California in connection with any legal action or proceeding arising out of or relating to this Agreement or the other Project Documents. Assuming proper service of process, Developer also waives any objection regarding personal or in rem jurisdiction or venue.
9.9. Severability of Provisions. No provision of any Project Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Project Documents are hereby declared to be severable.
49 4856-2683-0644v9/200348-0007
9.10. Headings. Article and Section headings are included in the Project Documents for convenience of reference only and shall not be used in construing the Project Documents.
9.11. Interpretation. This Agreement shall be construed as if equally prepared by all parties A reference to a Section shall be deemed to include all subsections thereof.
9.12. Conflicts. In the event of any conflict between or among the provisions of the Entitlement, this Agreement, the City Covenants or any other Project Document, the most restrictive provisions and covenants shall prevail; provided however that, with respect to any matter addressed in both such documents, the fact that one document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed.
9.13. Time of the Essence. Time is of the essence of all of the provisions of this Agreement.
9.14. Conflict of Interest. No member, official or employee of City shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to the Agreement which is prohibited by law.
9.15. Warranty against Payment of Consideration. Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement.
9.16. Nonliability of City Officials, City Officials and Employees. No member, official or employee of City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Developer or successor, or on any obligation under the terms of this Agreement. [Signature blocks begin on next page]
S-1
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IN WITNESS WHEREOF, the parties hereto have caused this Density Bonus and Affordable Housing Agreement (10201, 10221, 10231 Slater Avenue, Fountain Valley) to be effective as of the Date of Agreement.
DEVELOPER:
SLATER INVESTMENTS, LLC,
a Delaware limited liability company
By: O.C. Urban Ventures, LLC,
a California limited liability company
Its: Manager
By: ____________________________
Peggy Tabas, Manager
APPROVED AS TO FORM:
__________________________
Gregory P. Powers, Esq.,
Jackson Tidus, a Law Corporation
Developer’s Counsel
Date of Developer’s execution:
[__________________]
[Signatures continued on next page]
S-2
4856-2683-0644v9/200348-0007
[Signatures continued from previous page]
CITY
CITY OF FOUNTAIN VALLEY, a California
municipal corporation
By:
Mayor or Authorized Designee
Date of Mayor’s execution: June __, 2023
ATTEST:
Rick Miller, City Clerk
or Authorized Designee
APPROVED AS TO FORM:
HARPER & BURNS
Colin R. Burns, City Attorney
or Authorized Designee
and
STRADLING YOCCA CARLSON & RAUTH
Celeste Stahl Brady, Special Counsel
or Authorized Designee
Attachment No. 1
Site Map
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ATTACHMENT NO. 1
SITE MAP
Attachment No. 2
Legal Description of the Site
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ATTACHMENT NO. 2
LEGAL DESCRIPTION OF THE SITE
Real property in the City of Fountain Valley, County of Orange, State of California, legally described as follows:
PARCEL 1:
THE WESTERLY 125.00 FEET OF THE EASTERLY 325.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE NORTHERLY 200.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY, THE EASTERLY AND WESTERLY LINES THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE. EXCEPT AS UNDIVIDED 5 PER CENT OF ALL OIL,
GAS AND OTHER HYDROCARBON SUBSTANCES IN, ON AND UNDER SAID LAND, AS RESERVED BY FRED C. RIEDMAN ALSO KNOWN AS F. C. REIDMAN AND ANNA F.
RIEDMAN, HUSBAND AND WIFE, IN DEED RECORDED OCTOBER 28, 1948 IN BOOK 1722, PAGE 78 OF OFFICIAL RECORDS.
PARCEL 2:
THE WESTERLY 25.00 FEET OF THE EASTERLY 350.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE NORTHERLY 200.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDED
OF SAID COUNTY, THE EASTERLY AND WESTERLY LINES THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE. EXCEPT AS UNDIVIDED 5 PER CENT OF ALL OIL,
GAS AND OTHER HYDROCARBON SUBSTANCES IN, ON AND UNDER SAID LAND, AS RESERVED BY FRED C. REIDMAN AND ANNA F. REIDMAN, HUSBAND AND WIFE, IN DEED RECORDED OCTOBER 28, 1948 IN BOOK 1722, PAGE 78 OF OFFICIAL RECORDS.
PARCEL 3:
AN EASEMENT FOR INGRESS AND EGRESS TO BE USED IN COMMON WITH OTHERS OVER THE NORTHERLY 20.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE EASTERLY 300.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE
SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHOP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY, THE WESTERLY LINE THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY.
Attachment No. 2
Legal Description of the Site
4856-2683-0644v9/200348-0007
PARCEL 4:
AN EASEMENT FOR INGRESS AND EGRESS TO BE USED IN COMMON WITH OTHERS OVER THE NORTHERLY 180.00 FEET OF THE SOUTHERLY 230.00 FEET OF THE EASTERLY 30.00 FEET, MEASURED ALONG THE SOUTHERLY LINE OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, THE WESTERLY LINE THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE.
APNs: 169-122-02, 169-122-07, and 169-122-08
Attachment No. 3
Memorandum of Agreement
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ATTACHMENT NO. 3
MEMORANDUM OF AGREEMENT
Recording Requested By and
When Recorded Mail To:
City of Fountain Valley
10200 Slater Avenue
Fountain Valley, California 92708
Attention: City Clerk
SPACE ABOVE THIS LINE FOR RECORDER’S USE
(This document is exempt from the payment of a recording fee under Government Code Section 27383.)
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT (“Memorandum”) dated as of _____________, 2023 is entered into by and between the CITY OF FOUNTAIN VALLEY, a California municipal corporation (“City”), and SLATER INVESTMENTS, LLC, a Delaware limited liability company (“Developer”).
1. Density Bonus and Affordable Housing Agreement. City and Developer have executed an unrecorded Density Bonus and Affordable Housing Agreement (10201, 10221, 10231 Slater Avenue, Fountain Valley) (“Agreement”) dated as of June 6, 2023 covering that certain real property located in the City of Fountain Valley, County of Orange, State of California, more fully described in Exhibit “A” attached hereto and incorporated herein by this reference. The Agreement is on file as a public record with the City at its offices at 10200 Slater Avenue, Fountain Valley, California 92708. All of the terms, conditions, provisions, and covenants of the Agreement are incorporated in this Memorandum by reference as though written out at length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document.
2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions, and covenants of the Agreement.
In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the Agreement, the terms, conditions, provisions, and covenants of the Agreement shall prevail.
[Signature Blocks begin on next page]
Attachment No. 3
Memorandum of Agreement
4856-2683-0644v9/200348-0007
DEVELOPER:
SLATER INVESTMENTS, LLC,
a Delaware limited liability company
By: O.C. Urban Ventures, LLC,
a California limited liability company
Its: Manager
By: ____________________________
Peggy Tabas, Manager
CITY:
CITY OF FOUNTAIN VALLEY, a California
municipal corporation
By:
City Manager or Authorized Designee
ATTEST:
Rick Miller, City Clerk
or Authorized Designee
Exhibit A to Attachment No. 3
Legal Description to Memorandum of Agreement
4856-2683-0644v9/200348-0007
EXHIBIT “A”
LEGAL DESCRIPTION
Real property in the City of Fountain Valley, County of Orange, State of California, described as follows:
PARCEL 1:
THE WESTERLY 125.00 FEET OF THE EASTERLY 325.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE NORTHERLY 200.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY, THE EASTERLY AND WESTERLY LINES THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE. EXCEPT AS UNDIVIDED 5 PER CENT OF ALL OIL,
GAS AND OTHER HYDROCARBON SUBSTANCES IN, ON AND UNDER SAID LAND, AS RESERVED BY FRED C. RIEDMAN ALSO KNOWN AS F. C. REIDMAN AND ANNA F.
RIEDMAN, HUSBAND AND WIFE, IN DEED RECORDED OCTOBER 28, 1948 IN BOOK 1722, PAGE 78 OF OFFICIAL RECORDS.
PARCEL 2:
THE WESTERLY 25.00 FEET OF THE EASTERLY 350.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE NORTHERLY 200.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDED
OF SAID COUNTY, THE EASTERLY AND WESTERLY LINES THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE. EXCEPT AS UNDIVIDED 5 PER CENT OF ALL OIL,
GAS AND OTHER HYDROCARBON SUBSTANCES IN, ON AND UNDER SAID LAND, AS RESERVED BY FRED C. REIDMAN AND ANNA F. REIDMAN, HUSBAND AND WIFE, IN DEED RECORDED OCTOBER 28, 1948 IN BOOK 1722, PAGE 78 OF OFFICIAL RECORDS.
PARCEL 3:
AN EASEMENT FOR INGRESS AND EGRESS TO BE USED IN COMMON WITH OTHERS OVER THE NORTHERLY 20.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE EASTERLY 300.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE
SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHOP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY, THE WESTERLY LINE THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY.
Exhibit A to Attachment No. 3
Legal Description to Memorandum of Agreement
4856-2683-0644v9/200348-0007
PARCEL 4:
AN EASEMENT FOR INGRESS AND EGRESS TO BE USED IN COMMON WITH OTHERS OVER THE NORTHERLY 180.00 FEET OF THE SOUTHERLY 230.00 FEET OF THE EASTERLY 30.00 FEET, MEASURED ALONG THE SOUTHERLY LINE OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, THE WESTERLY LINE THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE.
APNs: 169-122-02, 169-122-07, and 169-122-08
Attachment No. 4
City Covenants
4856-2683-0644v9/200348-0007
ATTACHMENT NO. 4
CITY COVENANTS
Recording Requested By and
When Recorded Mail To:
City of Fountain Valley
10200 Slater Avenue
Fountain Valley, California 92708
Attention: City Clerk
SPACE ABOVE THIS LINE FOR RECORDER’S USE
(This document is exempt from the payment of a recording fee under Government Code Section 27383.)
CITY COVENANTS AGREEMENT
This CITY COVENANTS AGREEMENT (“City Covenants”) is dated as of [_________,] 2023 and made and entered into by and between SLATER INVESTMENTS, LLC., a Delaware limited liability company (“Developer”), and CITY OF FOUNTAIN VALLEY, a California municipal corporation (“City”), each of which is a signatory hereto.
R E C I T A L S
A. Each of Developer and City is a party to these City Covenants and may be referred to as a “Declarant”, and collectively may be referred to as “Declarants”.
B. City and Developer have entered into that certain unrecorded Density Bonus and Affordable Housing Agreement (10201, 10221, 10231 Slater Avenue, Fountain Valley) dated as of June 6, 2023 (“DBAHA”) for the improvement and development of certain real property referred to as the “Site” and described in the attached and fully incorporated Exhibit A hereto. A copy of the DBAHA is on file with City as a public record. Capitalized terms not defined herein shall have the meaning established and set forth in the DBAHA.
C. The Recitals in the DBAHA summarize Developer’s land use approvals that comprise the “Entitlement” for the Project on the Site. Any other or additional modifications to the Entitlement, if any, shall be appended to and deemed a part of these City Covenants and the DBAHA. Nothing summarizing the Entitlement therein or herein modifies such discretionary approvals as set forth in the series of resolutions, ordinances, conditions of approval and related findings, but the DBAHA and these City Covenants implement the Developer’s obligation to include, operate and maintain within the Project on the Site thirty-three (33) Affordable Units for
Attachment No. 4
City Covenants
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occupancy and tenancy by qualified Lower Income Households at an Affordable Rent for the 55-year Affordability Period.
D. The Entitlement requires as a condition of approval the entering into and recordation of these City Covenants (and the Memorandum of Agreement) as senior, nonsubordinate encumbrances against the Site to ensure the Project and Site ownership, use, operation, maintenance, and property management remain subject hereto and thereto for the entire Affordability Period; in particular these City Covenants are applicable to the Site and Project for the intended provision of affordable rental housing available to Lower Income Households at an Affordable Rent at the Prescribed Rent Level.
E. Under the DBAHA, Developer represents and covenants that, as of the recordation of this City Covenants Agreement, Developer holds fee simple marketable title to the Site.
F. These City Covenants impose certain affordable housing restrictions for a period that will commence on the date of issuance of the final certificate of occupancy for the Project and thereafter continue until the fifty-fifth (55th) anniversary of the issuance of the final CoO as further provided in the DBAHA (“Affordability Period”).
G. This City Covenants Agreement shall be recorded, prior to and as a condition precedent to the issuance of Building Permits for the Project, in the Official Records, Orange County, California as senior, unsubordinated covenants and an encumbrance running with the land for the full Affordability Period. In no event shall these City Covenants be made junior or subordinate to any deed of trust or other documents providing financing for the construction or operation of the Project on the Site or ownership of the Site, or any other lien or encumbrance whatsoever against the Site for the Affordability Period, except as expressly mandated by California statute or federal law.
H. Declarants wish to adopt these City Covenants to further govern the use of the Site in conjunction and along with the DBAHA and to ensure that City achieves credit for production and long-term covenanting of affordable housing units in satisfying the City’s Regional Housing Needs Allocation (“RHNA”), the Housing Element of the General Plan, in compliance with the Entitlement, and to meet other community objectives to provide affordable housing in the Fountain Valley community.
NOW, THEREFORE, City and Developer (as owner of the Site and Project), declares that the Site shall be held, transferred, encumbered, used, sold, conveyed, leased, and occupied subject to these City Covenants hereinafter set forth expressly and exclusively for the use and benefit of said property, and with the City as holder of beneficial interests therein. Each and all of these City Covenants shall run with the land and be recorded on title to the Site and shall be binding on Declarants, their grantees, successors, heirs, executors, administrators, devisees or assigns, and all subsequent owner of all or any part of the Site for the Affordability Period.
Attachment No. 4
City Covenants
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ARTICLE I
DEFINITIONS
Capitalized terms not defined herein shall have the respective meanings established therefor in the DBAHA; such definitions shall be applicable to these City Covenants and also to any amendment or supplement to these City Covenants (unless the context implicitly or explicitly shall prohibit), recorded against the Site pursuant to the provisions of these City Covenants.
ARTICLE II
LAND USE RESTRICTIONS; IMPROVEMENTS
Section 1. Uses. Developer shall develop the Project on the Site, in particular the Affordable Units, in conformity with the Entitlement and the affordable housing restrictions and covenants provided under the DBAHA. Upon completion of development of the Project, the Site shall be operated and devoted only to the uses specified in the Entitlement and DBAHA for the periods of time specified herein. All uses conducted on the Site, including, without limitation, all activities undertaken by Developer pursuant to the Entitlement shall conform to all applicable provisions of the City Code, the Entitlement, and other applicable federal and state laws and regulations. (a) Ownership of Site. The Site shall be owned, used, maintained, managed, and operated in accordance with these City Covenants and the Entitlement for the Affordability Period.
None of the Affordable Units in the Project shall at any time be utilized on a transient basis nor shall the Project or any portion thereof ever be used for an emergency shelter, or for short term rental such as AirBnB, VRBO, or HomeAway, or as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium, rest home or trailer court or park. No part of the Site or any Affordable Units shall be or will at any time be owned or used as a cooperative housing corporation or a stock cooperative.
(b) Permitted Transfers; Transfers. Transfers, both Permitted Transfers and other Transfers of the Site and/or Project, are subject to the provisions of the DBAHA, in particular Section 7.8 and the definition of Permitted Transfer therein.
Section 2. Affordable Housing; Eligible Households.
(a) Number of Units. Throughout the Affordability Period each and all thirtythree (33) Affordable Units shall be rented at an Affordable Rent to Lower Income Households.
Developer agrees to make available, restrict occupancy to, and rent all of the Affordable Units at Affordable Rent in conformity with the Prescribed Rent Level and Unit Mix. (b) Duration of Affordability Requirements. The Affordable Units shall be maintained as rental units available at and rented to Lower Income Households throughout the 55-year Affordability Period.
(c) Prescribed Rent Level and Unit Mix. The Prescribed Rent Level and Unit Mix for the Affordable Units includes:
Attachment No. 4
City Covenants
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• five (5) studio/0-bedroom units for Lower Income Households at an Affordable Rent; • sixteen (16) one-bedroom units for Lower Income Households at an Affordable Rent; and
• twelve (12) two-bedroom units for Lower Income Households at an Affordable Rent. (i) The Affordable Units shall meet the Prescribed Rent Level and Unit Mix as required despite a temporary noncompliance with the defined Affordable Rent, if the noncompliance is caused by increases in the incomes of existing tenants and if actions are being taken by Developer to ensure that each and all vacancies of the Affordable Units at the Project are filled in accordance with the DBAHA and these City Covenants until the noncompliance is corrected. (ii) A tenant who qualified as a Lower Income Household at initial occupancy of an Affordable Unit at the Project shall be deemed to continue to be so qualified until such time as reverification and certification of the tenant household’s gross income shows that such tenant no longer qualifies as a Lower Income Household. An existing tenant household occupying an Affordable Unit in the Project whose income exceeds the qualifying limit for a Lower Income Household may continue to occupy that Affordable Unit and be charged monthly rent including a reasonable utility allowance, equal to the lesser of thirty percent (30%) of the tenant household's adjusted monthly income, recertified annually, or the market rent applicable to the Affordable Unit as published by State HCD, so long as such continued tenancy does not exceed six (6) months. Such restrictions and requirements about reverification and recertification of household income to be and remain eligible for occupancy and tenancy of an Affordable Unit shall be expressly stated and separately initialed by each adult member of the tenant household in the lease or other rental agreement for each tenant of each Affordable Unit.
(d) Income of Tenants. Each tenant of an Affordable Unit shall qualify as a Lower Income Household and shall meet the eligibility requirements established for the corresponding Unit Mix requirements, and Developer shall obtain a certification from each tenant renting or leasing each Affordable Unit that substantiates such fact. Developer shall verify the income certification of each tenant household as set forth herein. (e) Determination of Affordable Rent for the Affordable Units. Each and all Affordable Units shall be rented at an “Affordable Rent” as established and provided herein:
(i) Affordable Rent means the monthly housing cost (excluding any supplemental rental assistance from the State of California, the federal government or any other public agency) not in excess of the amount that may be charged by Developer to each and all tenant households of the Affordable Units in conformity with the Prescribed Rent Level and not to exceed HSC Sections 50052.5 and 50053 for Lower Income Households. This monthly housing cost means the maximum amount to be charged by Developer and paid by the Lower Income Households occupying the 33 Affordable Units at the Project. Further, the household income for Lower Income Households leasing an Affordable Unit shall not exceed the income standard set forth in HSC Section 50079.5 and Affordable Rent shall not exceed the standard and calculations set forth in HSC Sections 50052.5 and 50053.
Attachment No. 4
City Covenants
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(ii) In addition, the term Affordable Rent includes the total of monthly payments by the tenants of an Affordable Unit for (a) use and occupancy for an Affordable Unit and facilities associated therewith, (b) any separately charged fees or service charges assessed by Developer that are required of all tenants of the Affordable Units, other than security deposits, (c) a reasonable allowance for utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity and gas, as determined by regulation of the Orange County Housing City pursuant to 24 C.F.R. Section 5.600 et seq. and (d) possessory interest, taxes or other fees or charges assessed for the use of the Affordable Units and facilities associated therewith by a public or private entity other than Developer.
Section 3. Developer Verification and Compliance; Annual Reports. Developer shall obtain and maintain on file an Income Verification from each tenant household, including all adult members of each such household, for each Affordable Unit dated immediately prior to the initial occupancy of such tenant at the Project. Commencing on or before the first March 15 after the City issues the final CoO for the Project and thereafter on or before March 15 of each Year of the Affordability Period, Developer shall file with City or its designee a Certificate, containing all information required to demonstrate that rents and income levels for the Affordable Units comply with the requirements of the DBAHA and these City Covenants regarding income (Lower Income) and rent (Affordable Rent) and containing such information as City additionally requires, in a form prescribed by City. Each Certificate shall cover the immediately preceding Year. (a) To the extent necessary and based on facts and circumstances as to one or more Affordable Units, tenant reverification and recertification may occur more often than annually as requested by the City or as otherwise determined by Developer or its Property Manager.
Section 4. Household Size Appropriate to an Affordable Unit. The term “household size appropriate to the unit” for the purpose of the calculation of Affordable Rent herein (and without regard to actual occupancy), means the standards in HSC Sections 50052.5 and 50053.
Section 5. Occupancy Limits. To the greatest extent allowed by law, including Fair Housing Law, Developer agrees to comply with the following minimum and maximum occupancy for the Affordable Units at the Project: (i) for the studio/0-bedroom units the maximum occupancy is two person, (ii) for the one-bedroom units the maximum occupancy is four persons, and (iii) for the two-bedroom units the maximum occupancy is six persons and the minimum occupancy is two persons; in this regard, maximum occupancy is two persons per sleeping/bedroom and living area(s).
Section 6. Rental Agreement. Prior to the rental or lease of each Affordable Unit to an eligible, qualified Lower Income Household, Developer shall require the tenant to execute a written lease and to complete an Income Verification certifying that the tenant(s) occupying the Affordable Unit is/are a Lower Income Household and meets the eligibility requirements established for the Affordable Unit. Developer shall verify the income of all adult members of the household. Developer shall accept as tenants on the same basis as all other prospective tenants, including persons holding Portable Vouchers. Developer shall not apply selection criteria to Portable Voucher holders that are more burdensome than criteria applied to any other prospective tenants.
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Section 7. Verifications.
(a) Income Verification. Developer shall verify the income of each proposed and existing tenant of the each and every Affordable Unit at the Project. (b) Records of Leases. Developer shall maintain on file each tenant’s executed lease and Income Verification and rental records for all Affordable Units. Developer shall maintain complete and accurate records for all Affordable Units and will permit any duly authorized representative of City to inspect the books and records of Developer related in any manner to the Affordable Units and/or pertaining to the DBAHA and this Covenants Agreement.
Section 8. Nondiscrimination. Developer shall refrain from restricting the rental, sale or lease of the Site, or any portion thereof, on the basis of race, color, creed, religion, sex, marital status, national origin, or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.” In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.”
In contracts: “There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
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Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this Agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.” The covenants established in these City Covenants shall, without regard to technical classification and designation, be binding for the benefit and in favor of City and their successors and assigns, and any successor in interest to the Site, together with any property, or any part thereof. The covenants against discrimination as set forth in this Section 8 of Article II shall remain in effect in perpetuity.
Section 9. Compliance with Laws. Developer shall carry out the design, development and operation of the Project, in particular the Affordable Units, in conformity with all applicable federal, state and local laws and regulations, including Uniform Codes, City Code, Uniform Codes, building, plumbing, mechanical and electrical codes, and all other provisions thereof, City zoning and development standards, and all applicable disabled and handicapped access requirements, including without limitation the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq., California Fair Employment and Housing Act (FEHA), Government Code Section 65008, and other state and federal fair housing laws and regulations (together, “Fair Housing Law”).
ARTICLE III
DUTIES OF DEVELOPER RE
MANAGEMENT, MAINTENANCE, AND OPERATIONAL RESPONSIBILITIES Section 1. Management of the Affordable Units at the Project. (a) Property Manager. Developer shall, or shall cause, the Site and Project, in particular the Affordable Units, to be managed in a prudent and business-like manner, consistent with good property management standards for other first class and high quality developments in Southern California. Developer may contract with a property management company or property manager, to operate, manage, and maintain the Affordable Units in accordance with the terms of this Article III (“Property Manager”); provided, however, the selection and hiring of the Property Manager (and each successor or assignee), including any Affiliate, is and shall be subject to prior written approval of the City Manager (or designee) in her or his discretion. The Property Manager shall manage the Affordable Units in accordance with the definitions of Affordable Rent, the tenant selection requirements, and the definitions relating to Low Income and Lower Income set forth herein.
Developer shall conduct due diligence and background evaluation of any potential third party property manager or property management company to evaluate experience, references, credit worthiness, and related qualifications as a property manager of affordable housing. Any proposed property manager shall have significant and relevant prior experience with affordable housing properties comparable to the Project and the references and credit record of such property manager/company shall be investigated (or caused to be investigated) by Developer prior to
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submitting the name and qualifications of such proposed property manager to the City Manager for review and approval. A complete and true copy of the results of such background evaluation shall be provided to the City Manager. Approval of a Property Manager by City Manager shall not be unreasonably delayed but shall be in his/her sole reasonable discretion, and the City Manager shall use good faith efforts to respond as promptly as practicable in order to facilitate effective and ongoing property management of the Affordable Units at the Project. The replacement of a Property Manager by Developer and/or the selection by Developer of any new or different Property Manager during the Affordability Period shall also be subject to the foregoing requirements. (b) Compliance with Property Management Plan. The Property Management Plan, and all amendments thereto approved by the City Manager, shall evidence and include a detailed plan and strategy for long term marketing, operation, maintenance, repair and security thereof of the Affordable Units at the Project, inclusive of the method of selection of tenants, rules and regulations for tenants, and other rental policies. The ongoing management and operation of the Affordable Units at the Project shall be in compliance with the approved Property Management Plan.
During the Affordability Period, Developer and its Property Manager may from time to time submit to the City Manager proposed amendments to the Property Management Plan, the implementation of which shall also be subject to the prior written approval of the City Manager. (c) Gross Mismanagement. During the Affordability Period, and in the event of Gross Mismanagement of the Affordable Units at the Project, and City (through City Manager) shall have and retain the authority to direct and require any condition(s), acts, or inactions of Gross Mismanagement to cease and/or be corrected immediately, and further to direct and require the immediate removal of the Property Manager and replacement with a new qualified and approved Property Manager, if such condition(s) is/are not ceased and/or corrected after expiration of thirty (30) days from the date of written Notice from the City Manager. If Developer or Property Manager has commenced to cure such Gross Mismanagement condition(s) on or before the 20th day from the date of written Notice (with evidence of such submitted to the City Manager, as applicable), but has failed to complete such cure by the 30the day (or such longer period if the cure cannot reasonably be accomplished in thirty (30) days as reasonably determined by the non-defaulting party), then Developer and its Property Manager shall have an additional 10 days to complete the cure of Gross Mismanagement condition(s). In no event shall any condition of Gross Mismanagement continue uncured for a period exceeding forty-five (45) days from the date of the initial written Notice of such condition(s), except that the conditions described in subdivisions (d) and (e) below may exist for up to, but no longer than, seventy-five (75) days without triggering City’s right to remove the Property Manager as described in the immediately following sentence as long as Developer is diligently working to cure such conditions of Gross Mismanagement. If such condition(s) do persist beyond such period, the City Manager shall have the absolute right to immediately and without further notice to Developer (or to Property Manager or any other person/entity) to remove the Property Manager and replace the Property Manager with a new property manager of City Manager’s selection at the sole cost and expense of Developer. If Developer takes steps to select a new Property Manager that selection is subject to the requirements set forth above for selection of a Property Manager. The term Gross Mismanagement is as defined in the DBAHA.
(d) Code Enforcement. Developer acknowledges and agrees the City and its employees and authorized agents, shall have the right to conduct code compliance and/or code
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enforcement inspections of the Project, in particular the Affordable Units, both exterior and interior, at reasonable times and upon reasonable notice (not less than 48 hours prior notice, except in an emergency) to Developer and/or an individual tenant. If such notice is provided by City representative(s) to Developer, then Developer (or its Property Manager) shall immediately and directly advise any affected tenant of such upcoming inspection and cause access to the area(s) and/or Affordable Units at the Project to be made available and open for inspection. Developer shall include express advisement of such inspection rights within the lease/rental agreements for each Affordable Unit in the Project in order for each and every tenant and tenant household to be aware of this inspection right.
(e) Capital Reserve Requirements. Commencing upon issuance of the CoO, Developer shall annually set aside an amount of not less than Three Hundred Dollars ($300.00) per Affordable Unit (33 Affordable Units times $300 equals $9,900) or such increased amount required by a Lender from the gross rents received from the Affordable Units at the Project, into a separate interest bearing trust account defined as the Capital Replacement Reserve. Funds in the Capital Replacement Reserve shall be used only for capital repairs, improvements, and replacements to the Project, including fixtures and equipment, which are normally capitalized under generally accepted accounting principles including “capital repair” as defined in the Internal Revenue Code. The non-availability of funds in the Capital Replacement Reserve does not in any manner relieve or lessen Developer’s obligation to undertake any and all necessary capital repairs, improvements, or replacements and to continue to maintain the Affordable Units at the Project in the manner prescribed herein. Not less than once per Year and concurrent and included within the annual report, Developer, at its expense, shall submit to the City Manager an accounting for the Capital Replacement Reserve for the Affordable Units at the Project. Capital improvements and repairs to, and replacements for Affordable Units at the Project shall include only those items with a long useful life, including without limitation the following: carpet and drapery replacement; appliance replacement; exterior painting, including exterior trim; hot water heater replacement; plumbing fixtures replacement, including tubs and showers, toilets, lavatories, sinks, faucets; air conditioning and heating replacement; asphalt repair and replacement, and seal coating; roofing repair and replacement; landscape tree replacement; irrigation pipe and controls replacement; sewer line replacement; water line replacement; gas line replacement; lighting fixture replacement; elevator replacement and upgrade work; miscellaneous motors and blowers; common area furniture replacement; and common area repainting. In connection with each annual report, to the City Manager by Developer, City Manager will evaluate the cumulative amount on deposit in the Capital Replacement Reserve account and exercise his/her sole, reasonable discretion to determine if existing balance(s) in, proposed deposits to, shortfalls, if any, and/or a cumulative unexpended/unencumbered account balance in such Capital Replacement Reserve account are adequate to provide for necessary capital repairs and improvement for the Affordable Units at the Project.
Notwithstanding the foregoing portion of this Article III, in the event a Lender prescribes particular amounts to be set aside as a capital replacement reserve that exceeds the requirements herein, compliance therewith shall be deemed compliance herewith.
Section 2. General Maintenance.
(a) Maintenance of Site. Developer agrees for itself and its successors in interest to the Site, to maintain the Improvements and the Site in conformity with the City Code and the
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conditions set forth in the DBAHA and these City Covenants, and shall keep the Site free from any accumulation of debris or waste materials. During such period, Developer shall also maintain the landscaping planted on the Site in a healthy condition. (b) Maintenance Standards; Program Maintenance. Developer and its maintenance staff, contractors or subcontractors shall comply with the Maintenance Standards and Program Maintenance as set forth in the DBAHA. ):
(i) Notwithstanding the foregoing, if the City Manager reasonably determines that the Project suffers from significant and unexpected wear and tear requiring any of the above items of maintenance to be performed sooner as set forth in the DBAHA. Upon the request of Developer, the City Manager, at his/her sole, reasonable discretion, may grant a waiver or deferral of any program maintenance requirement. Developer shall keep such records of maintenance and repair as are necessary to prove performance of the program maintenance requirements.
Section 3. Duty to Prevent Hazardous Material Contamination. During the development and operation of the Project, Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment on or under the Project. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. Developer shall notify City, and provide to City a copy or copies, of any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Developer shall report to City, as soon as possible after each incident, any unusual, potentially important incidents in the event of a release of any Hazardous Materials into the environment. (a) For purposes of this Article III, “Governmental Requirements” means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the County, City, or any other political subdivision in which the Project is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, Developer or the Project.
(b) For purposes of this Article III the term, “Hazardous Materials” is defined in the DBAHA.
Section 4. Parking of Vehicles. Developer shall not permit the parking, storing or keeping of any vehicle except wholly within the parking areas designated for commercial and residential uses in the Project, including parking for tenants and visitors of the Affordable Units. Developer shall not permit the parking, storing or keeping of any large commercial-type vehicle (dump truck, cement mixer truck, oil or gas truck, etc.), or any recreational vehicle over twenty (20) feet in length (camper unit, motor home, trailer, mobile home or other similar vehicle), boats over twenty (20) feet in length, or any vehicle other than a private passenger vehicle, upon any portion of the common areas, including parking spaces. For purposes of Article III, a pickup truck with a pickup bed mounted camper shall be considered a private passenger vehicle; provided however, that no such vehicle shall be used for residential purposes while parked on the premises.
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(a) No Onsite Major Repairs. Developer shall not permit major repairs or major restorations of any motor vehicle, boat, trailer, aircraft or other vehicle to be conducted upon any portion of the common areas of the Project, including the parking areas, except for emergency repairs thereto and then only to the extent necessary to enable movement of the vehicle to a proper repair facility. No inoperable vehicle shall be stored or kept in the common areas of the Project. Developer shall give the vehicle owner not less than four (4) days, nor more than seven (7) days’ notice and an opportunity to remove any vehicle parked, stored or kept in violation of the provisions hereof.
Notice shall consist minimally of a reasonably diligent attempt to personally notify the vehicle owner or alternatively leaving written notice on the subject vehicle. After due notice and opportunity have been given to the vehicle owner, Developer shall have the right to remove, at the vehicle owner’s expense, any vehicle parked, stored or kept in violation of the provisions of these City Covenants.
Section 5. Signs Required. “No loitering” signs will be posted at each building and enforced by the owner(s). “Illegally parked vehicles will be towed” signs in compliance with California Vehicle Code requirements will be posted and enforced by Developer.
ARTICLE IV
TENANT SELECTION
Section 1. Selection of Tenants. Developer shall be responsible for the selection of tenants for the Affordable Housing Units in compliance with the criteria set forth herein and in the DBAHA. (a) Process for Tenant Selection. Developer shall implement the tenant selection system for the Affordable Units as approved by the City Manager under the DBAHA, which establishes a chronological waiting list system for selection of tenants and meets the requirements hereof.
(b) Marketing. Developer shall provide written notice to City at least thirty (30) days prior to Developer commencing its marketing activities for the initial lease-up of the Affordable Units at the Project in conformance with the approved Management Plan. In addition, this prior notice from Developer to City also shall include a complete copy of the form of the “application” with a description of necessary supporting materials to be completed by applicants for prospective tenancy of the Affordable Units at the Project.
(i) Posting advertisements and notices of the vacancy(ies) at the community center, senior center, other public buildings such as post offices located in the City, at City Hall, and on the City’s website.
ARTICLE IV
ENFORCEMENT
Section 1. Remedies. Breach of the covenants contained in these City Covenants may be enjoined, abated, or remedied by appropriate legal proceeding by City. These City Covenants do not in any way infringe on the right or duties of the City to enforce any of the provisions of the City Code including, but not limited to, the abatement of dangerous buildings.
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Section 2. Nuisance. The result of every act or omission whereby any of the covenants contained in these City Covenants are violated in whole or in part is hereby declared to be and constitutes a nuisance, and every remedy allowable at law or equity, against a nuisance, either public or private, shall be applicable against every such result and may be exercised by any owner or its successors in interest, without derogation of City’s rights under law.
Section 3. Right of Entry. In addition to the above general rights of enforcement, City shall have the right through its agents and employees, to enter upon any part of the Site and/or Project for the purpose of enforcing the California Vehicle Code, and the ordinances and other regulations of City, and for maintenance and/or repair of any or all publicly owned utilities. Subsequent to sixty (60) days written notice to Developer specifically outlining Developer’s noncompliance, City shall have the right of entry on the Site at reasonable hours to enforce compliance with these City Covenants which Developer has failed to perform. In addition, City has the right of entry onto any part of the Site and Project at reasonable hours and upon and after reasonable attempts to contact Developer, to effect emergency repairs or maintenance that Developer has failed to perform.
Section 4. Costs of Repair. The costs borne by City of any such repairs or maintenance emergency and/or non-emergency, shall become a charge for which Developer shall be responsible.
Developer agrees that City’s rights related to charges and collection thereof hereunder include the City’s right to impose a lien against the Site comparable to the process undertaken by public agencies for similar lien collection such as for weed abatement.
Section 5. Cumulative Remedies. The remedies herein provided for breach of the covenants contained in these City Covenants shall be deemed cumulative, and none of such remedies shall be deemed exclusive.
Section 6. Failure to Enforce. The failure to enforce any of the covenants contained in these City Covenants shall not constitute a waiver of the right to enforce the same thereafter.
Section 7. Enforcement and Nonliability. The City may from time to time make such efforts, if any, as it shall deem appropriate enforce and/or assist in enforcing these City Covenants. However, neither City nor City will be subject to any liability for failure to affirmatively enforce any provision of these City Covenants.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Covenant against Partition. Developer covenants for itself and for its heirs, representatives, successors, and assigns, that it will not institute legal proceedings or otherwise seek to effect partition of its rights and interests in the Site, or the burdens running with the land as a result of these City Covenants.
Section 2. Severability. Invalidation of any one of these covenants or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in all force and effect.
Section 3. Term. These City Covenants shall run with and bind the interest of Developer in the Site, and shall inure to the owner(s) of any property subject to these City Covenants, his legal
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representatives, heirs, successors and assigns, and be enforceable by City, for a term equal to the Affordability Period as defined in the DBAHA, provided; however, that the covenants regarding nondiscrimination set forth in Section 8. of Article II of these City Covenants shall remain in effect for perpetuity.
Section 4. Construction. The provisions of these City Covenants shall be liberally construed to effectuate its purpose of creating a uniform plan for the development and operation of the Affordable Units at the Project as more particularly set forth herein and in the DBAHA. The article and section headings have been inserted for convenience only, and shall not be considered or referred to in resolving questions of interpretation or construction. Developer shall be obligated by these City Covenants to comply with the provisions hereof.
Section 5. Amendments. These City Covenants may be amended only by the written agreement of Developer and City.
Section 6. Encroachments. None of the rights and obligations of Developer created herein shall be altered in any way by encroachments due to settlement or shifting of structures or any other cause.
There shall be valid easements for the maintenance of said encroachments so long as they shall exist; provided, however, that in no event shall a valid easement for encroachment be created in favor of Developer if said encroachment occurs due to the willful conduct of said Developer.
Section 7. Notices. Any Notice permitted or required to be delivered as provided herein to Developer shall be in writing and may be delivered either personally or by certified mail. Notice to City shall be made by certified mail to: City Manager (with copies to both City Clerk and City Legal Counsel), City Hall 10200 Slater Avenue, Fountain Valley, California 92708 and shall be effective upon receipt. Notice to Developer shall be made by certified mail to Slater Investments, LLC and shall be effective upon receipt. Such address may be changed from time to time by notice in writing.
DEVELOPER:
SLATER INVESTMENTS, LLC,
a Delaware limited liability company
By: O.C. Urban Ventures, LLC,
a California limited liability company
Its: Manager
By: ____________________________
Peggy Tabas, Manager
APPROVED AS TO FORM:
__________________________
Gregory P. Powers, Esq.,
Jackson Tidus, a Law Corporation
Developer’s Counsel
[Signatures continued on next page]
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[Signatures continued from previous page]
CITY:
CITY OF FOUNTAIN VALLEY, a California
municipal corporation
By:
City Manager or Authorized Designee
ATTEST:
Rick Miller, City Clerk
APPROVED AS TO FORM:
HARPER & BURNS
Colin R. Burns, City Legal Counsel
APPROVED AS TO FORM:
STRADLING YOCCA CARLSON & RAUTH
Celeste Stahl Brady, Special Counsel
Exhibit A to Attachment No. 4
Legal Description to City Covenants
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EXHIBIT A
LEGAL DESCRIPTION
Real property in the City of Fountain Valley, County of Orange, State of California, described as follows:
PARCEL 1:
THE WESTERLY 125.00 FEET OF THE EASTERLY 325.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE NORTHERLY 200.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY, THE EASTERLY AND WESTERLY LINES THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE. EXCEPT AS UNDIVIDED 5 PER CENT OF ALL OIL,
GAS AND OTHER HYDROCARBON SUBSTANCES IN, ON AND UNDER SAID LAND, AS RESERVED BY FRED C. RIEDMAN ALSO KNOWN AS F. C. REIDMAN AND ANNA F.
RIEDMAN, HUSBAND AND WIFE, IN DEED RECORDED OCTOBER 28, 1948 IN BOOK 1722, PAGE 78 OF OFFICIAL RECORDS.
PARCEL 2:
THE WESTERLY 25.00 FEET OF THE EASTERLY 350.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE NORTHERLY 200.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 10 WEST IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDED
OF SAID COUNTY, THE EASTERLY AND WESTERLY LINES THEREOF BEING AT RIGHT ANGLES TO SAID SOUTHERLY LINE. EXCEPT AS UNDIVIDED 5 PER CENT OF ALL OIL,
GAS AND OTHER HYDROCARBON SUBSTANCES IN, ON AND UNDER SAID LAND, AS RESERVED BY FRED C. REIDMAN AND ANNA F. REIDMAN, HUSBAND AND WIFE, IN DEED RECORDED OCTOBER 28, 1948 IN BOOK 1722, PAGE 78 OF OFFICIAL RECORDS.
PARCEL 3:
AN EASEMENT FOR INGRESS AND EGRESS TO BE USED IN COMMON WITH OTHERS OVER THE NORTHERLY 20.00 FEET OF THE SOUTHERLY 250.00 FEET OF THE EASTERLY 300.00 FEET MEASURED ALONG THE SOUTHERLY LINE OF THE
SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHOP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SAID NORTHWEST QUARTER IS SHOWN ON THE MAP OF TRACT NO. 569, RECORDED IN BOOK 18, PAGE 18 OF MISCELLANEOUS MAPS, IN THE OFFICE OF