RECORDING REQUESTED BY
and WHEN RECORDED MAIL TO:
City of Hesperia
9700 Seventh Avenue
Hesperia, CA 92345
Attn: City Clerk
SPACE ABOVE FOR RECORDER’S USE ONLY
DENSITY BONUS AND INCENTIVE AGREEMENT AND
COVENANT RESTRICTING USE
(Live Oak Estates, 114-Unit Development)
THIS DENSITY BONUS AND INCENTIVE AGREEMENT AND COENANT RESTICTING USE (this “Agreement”) entered into as of MONTH, DAY, 2024 by and among (“Owner” Shree Properties, INC., a California Corporation, and the CITY OF HESPERIA, a municipal corporation (“City”), is made with reference to the following:
Recitals
Owner is the owner in fee of that certain real property (the “Site”) described on Exhibit A attached hereto and incorporated herein by reference, which is located within the City, south side of Live Oak Street, between Eighth and Nineth Avenue, Hesperia, CA 92345.
Developer has submitted a Site Plan Review Application SPR23-00027and Density Bonus Agreement Application #DA 23-00002 (together, the “Application”) for approval of, and intends to construct, a rental residential development (the “Project”) on the Site containing 114 rental units (the “Units”), all of which will be restricted to persons aged 55 years and older. The Units will be 1- and 2-bedroom units, 34 of which will be restricted to occupancy by Qualified Households (as that term is defined below) and one (1) of which will be on-site manager unit.
Under the existing HDR land use designation, which allows for residential densities between 15 and 20 dwelling units per gross acre, the maximum allowable number of residential units on the Site is 112 units. Thus, the Owner is seeking a density bonus of 2% to accommodate two additional units, for a total of 114 units.
City desires, and Section 16.20.190, et seq.,(the “City’s Density Bonus Program”) and State Density Bonus law (Government Code Section 65915 et seq) require the City, to grant Owner a density bonus of up to (2) additional Units and up to four (4) additional incentives, in consideration for their commitment to restrict occupancy of the Units as herein described.
Owner has agreed to enter into this Agreement and hereby consents to be regulated and restricted by the City as provided herein.
Agreement
NOW, THEREFORE, Owner and City mutually agree as follows:
Term. The Term (“Term”) of this Agreement shall commence on the date of its execution by all parties and shall continue in full force and effect until the date that is the 55th anniversary of the date on which the final certificate of occupancy for the Project is received from the City.
Owner’s Covenants. Owner hereby covenants by and for itself, and for its representatives, successors and assigns and every successor in interest to the Site of any part thereof to comply with the covenants, reservations and restrictions set forth in this Agreement. Owner further covenants that during the Term, Owner shall devote the Site to be used for the Project only, and in conformance with this Agreement. Each and every contract deed or other instrument hereafter executed covering the conveying of the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted, subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments.
Owner agrees that the Project shall be constructed substantially in accordance with the plans, drawings and specifications approved by the City.
Owner shall ensure that 34 (thirty four) of the Units are restricted to occupancy by a Qualified Household for Low Income at annual rent levels (“Qualified Rent Levels”) that do not exceed the following:
For Low Income Households whose gross income exceeds the maximum income for Very Low Income Households, the product of 30% times 60% of Area Median Income, as adjusted annually by the California Department of Housing and Community Development for household size, as appropriate for the Unit. “Adjusted for Household Size as Appropriate for the Unit” for purpose of this section, shall mean for a household of two persons, in the case of a one-bedroom unit, and three persons in the case of a two-bedroom unit.
Owner shall ensure that all Units in the development are age-restricted to persons 55 years or older (aka seniors).
Annual rent shall be collected in twelve (12) equal monthly payments. The Manager’s Unit may be occupied by maintenance of management personnel employed by the property management company or employed by the owner.
Owner shall obtain and maintain or cause to be obtained and maintained, on file, reasonable verification in written form as to the income of each household for Certification of Continuing Program Compliance in substantially the form attached hereto as Exhibit B and incorporated herein by this reference and executed by the Owner.
City’s Covenants.
Density Bonus and Financial Incentives. Pursuant to Hesperia Municipal Code Section 16.20.205, the City hereby agrees to grant Owner a Density Bonus as follows:
The City grants the Owner a density bonus of 2 Units above the presently allowable number of units.
The Owner agrees that the Owner is not entitled to any further density bonus or the financial equivalent thereof beyond those set forth in this Section 3.a.
Additional Incentives. Pursuant to Hesperia Municipal Code Section 16.20.230 and California Government Code Section 65915, the City hereby agrees to grant to the Owner the following additional incentives to encourage the supply of affordable housing:
City accepts the balconies with a minimum dimension of 7-feet and 2-inches instead of the 8 feet required by the Specific Plan; and City accepts 153 total parking spaces, of which 115 shall be covered parking spaces, instead of 177 total parking spaces required by the City’s Development Code.
City accepts one-bedroom units with a minimum living area of 698 square feet instead of the 875 square feet required by the Specific Plan; and two-bedroom units with a minimum living area of 882 square feet instead of the 1,075 square feet required by the Specific Plan.
City accepts buildings as close as 9-feet and 2-inches apart instead of 15 feet apart as required by the Specific Plan.
Definitions. As used in this Agreement, the following capitalized and close quoted terms shall have the following meanings:
“Area Median Income” means median income levels for San Bernardino County as calculated annually by the U.S. Department of Housing and Urban Development (“HUD”) based on the Primary Metropolitan Statistical Area median income levels by family size. Such levels are calculated on the basis of gross annual household income, considering household size, income of all wage earners and all other sources of household income. “Low Income Household” is defined as households whose income does not exceed eighty (80) percent of the Area Median Income. “Very Low-Income Household” is defined as households whose income does not exceed fifty (50) percent of the Area Median Income. “Qualified Household” means a household that is a Low-Income Household or Very Low-Income Household (as those terms are defined above) at the time the household begins its tenancy at the Project.
Accounting to City.
Owner shall keep the books and accounts of the Project in conformity with generally accepted accounting practices.
Owner shall maintain a complete and accurate rent roll listing all Units, the names of all Tenants, the dates of their tenancies and the amount of rents charged and collected.
The City, its agents and employees, shall have the right after three (3) business days’ notice, to review and inspect at any time during business hours, the books, records and accounts of the Owner specifically regarding the Site, dated from and after the date of the recordation of this Agreement and until the expiration of this Agreement.
Inspections. Subject to the rights of the tenants, the City shall have the right to perform an annual on-site inspection of the Units, common areas, and grounds.
Default.
Failure or delay by the Owner to perform any term or provision or comply with any covenant of this Agreement constitutes a default under this Agreement, except that Owner shall not be in default of its obligation to ensure that the Units are occupied by Qualified Households if the Owner shows that it reasonably relied on a tenant's representations regarding household size or income level. Should Owner default and fail to cure such default to the City's satisfaction within thirty (30) days after the date City delivers written notice of the default to Owner, then the City may, at its option, take one or any combination of the following actions:
Demand Owner to cause the Site to be brought into compliance with the maximum allowable density restriction, and all other parking, setback, and signage requirements, that would apply to the Site absent this Agreement, unless Owner proposes and obtains City Council approval for alternative measures that, in the City Council's sole discretion, otherwise achieve the objectives of Government Code Section 65915, the City's Density Bonus Program, and this Agreement; Declare the Site and/or the Project a public nuisance under Chapter 8.24 of the Hesperia Municipal Code and take all actions authorized therein with respect to the public nuisance and the abatement thereof, including, but not limited to, summary abatement and recordation of a nuisance abatement lien to collect abatement and related administrative costs; Bring actions at law or in equity in a court of competent jurisdiction to enforce the provisions of this Agreement and record a Lis pendens against the Site providing notice of the same.
The remedies of the City herein are cumulative, and the exercise of one or more of such remedies shall not be deemed an election of all remedies and shall not preclude the exercise by the City of any one or more of its other remedies.
Notwithstanding subparagraph (a) above, violations of the Building Code shall be handled by appropriate building officials resolved under the same terms as available to any other development.
Subordination: This Agreement shall be subject and subordinate to the liens of the Owner’s construction and permanent financing. City agrees to execute additional subordination agreements in form and content acceptable to Owner’s lenders and letter of credit providers confirming such subordination.
Successors Bound. This Agreement and the covenants, reservations, restrictions and agreements contained herein shall be a burden upon the Site and shall bind Owner and its successors, assigns, transferees and every successor in interest to the Site. Owner may not assign any of the benefits of this Agreement, nor delegate any of its obligations hereunder, voluntarily or by operation of law without the prior written approval of the City Council.
Benefit of Covenants, Reservations and Restrictions. City and Owner hereby declare their understanding and intent that the covenants, reservations and restrictions herein directly benefit the land by enhancing and increasing the enjoyment of use of the Site by certain low-income residents of the City of Hesperia, and benefit City as owner of the public rights of way in the adjoining public streets. City and its successors and assigns, are deemed the beneficiary of the covenants, reservations and restrictions contained herein, without regard to technical classification and designation. The covenants, reservations and restrictions shall benefit and run with the land in favor of the City, its successors and assigns, and shall be enforceable by same without regard to whether same has been, remains, or is an owner of any land or interest therein.
Notice. Any notice required to be given hereunder shall be given by certified or registered mail, postage prepaid, return receipts requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto as follows:
If to City: City of Hesperia
9700 Seventh Avenue
Hesperia, CA 92345
Tel: (760) 947-1018
Fax: (760) 947-2881
Attn: City Manager
If to Owner: Dilip B. Sheth
Director, Shree Properties, INC.
904 Silver Spur Rd #479
Rolling Hills Estates, CA 90274
Tel: (310) 266-2754
Fax: (909) 208-7903
Modifications. This Agreement may be amended or modified only by a written instrument signed by all parties hereto. City agrees that the City’s City Manager or his/her designee, with the concurrence of the City Attorney, shall have the authority to execute any such instrument on behalf of the City, without formal action by the City Council, but only if such instrument does not materially alter this Agreement nor increase the quantity or value of the density bonus or incentives hereby granted to Owner.
Recording and Filing. This Agreement shall be acknowledged by each of the parties and recorded by City in the Official Records of the County of San Bernardino. This Agreement shall be indexed in the grantor index in the name of the Owner and in the grantee index in the name of the City.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day and year first above written.
OWNER
Dilip B. Sheth, Director
Shree Properties, INC.
Dilip B. Sheth
CITY
CITY OF HESPERIA, a Municipal Corporation
Rachel Molina, City Manager
Attest:
Erin Baum, Assistant City Clerk
Approved as to Form:
Pam Lee, City Attorney
EXHIBIT A
LEGAL DESCRIPTION OF SITE
The land referred to herein below is situated in the City of Hesperia, County of San Bernardino, State of California, and is described as follows:
PARCEL 1:
BLOCK 235 EXCEPT THE SOUTH 180 FEET OF THE EAST 325 FEET THEREOF, TOWN OF HESPERIA, IN THE CITY OF HESPERIA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 12 OF MAPS, PAGES 21 THROUGH 27 INCLUSIVE RECORDS OF SAID COUNTY.
PARCEL 2:
THE SOUTH 180 FEET OF THE EAST 320 FEET OF BLOCK 235 TOWN OF HESPERIA, IN THE CITY OF HESPERIA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 12 OF MAPS, PAGES 21 THROUGH 27 INCLUSIVE, RECORDS OP SAID COUNTY Assessor's Parcel No; 0407-142-03-0-000 & 0407-142-04-0-000
EXHIBIT B
ANNUAL CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
Dilip B. Sheth, Director of Shree Properties, Inc; hereby represents and warrants that:
Owner has read and is thoroughly familiar with the provisions of the Density Bonus and Incentive Agreement and Covenant Restricting the Use (the “Agreement”) by and among the City of Hesperia, a Municipal Corporation, and Owner, dated _____________, 2024, of which a form of the Certification is an attachment.
As of the date of this Certification, the restricted 34 Units are all occupied by Qualified Households as that term is defined in the Agreement.
As of the date of this Certification, the restricted 34 Units are all rented at no mare than Qualified Rental Levels as described in the Agreement.
As of the date of this Certification, all Units are all rented to at least one person within each Unit’s household who are age 55 years or older.
OWNER
Dilip B. Sheth, Director
Shree Properties, INC.
Dilip B. Sheth
01071.0005/967759.1 2
01071.0005/967759.1
Attachment 8