Section 2.7 Conditions Precedent to Disbursement of Retention Component. (a) The City shall not be obligated to disburse the final One Hundred Twelve Thousand Four Hundred Dollars ($112,400) of HOME Loan funds which comprise the Retention Component of the HOME Loan unless the following conditions precedents are satisfied:
(1) The City has received a completion report from the Developer setting forth the income, household size, and ethnicity of tenants of the Development and the unit size, rent amount and utility allowance for all units in the Development. (2) The City has received a final cost certification pursuant to Section
5.2 below.
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13 (3) The City has received from the Developer copies of the final certificate of occupancy for the Development and the notice of completion has been recorded against title to the Property, or other equivalent document. (4) The City has received from the Developer current evidence of the insurance coverage meeting the requirements of Section 3.10 below. (5) The City has received from the Developer a form of lease, Marketing Plan and tenant selection plan for the Development. (6) The City has received from the Developer evidence of marketing for any vacant units in the Development such as copies of flyers, list of media ads, list of agencies and organizations receiving information on availability of units, as applicable. (7) The City has received from the Developer all relevant contract activity information, including, but not limited to evidence that the Developer has complied with the requirements in Section 4.3, Section 4.4, and Section 4.5. (8) The City has received from the Developer contact information for the property manager of the Development and the name and phone number of the on-site property manager.
(9) Developer has submitted a certification from the architect certifying that the Units have been constructed in compliance with the Approved Plans and Construction Contract, as defined in this Agreement.
(10) If Developer is required to pay prevailing wages under the DavisBacon Act (40 U.S.C. 3141-3148), the City has received from the Developer all certified payrolls, and any identified payment issues have been resolved, or the Developer is working diligently to resolve any such issues.
(11) The City has received a written draw request from the Developer, including certification that the conditions set forth in subsection 2.6(a) continues to be satisfied, and setting forth the proposed uses of funds consistent with the Final Financing Plan, and, where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred. The Developer shall apply the disbursement for the purpose(s) requested. (b) Notwithstanding any other provisions of this Agreement, the City shall have no obligation to disburse any portion of the HOME Loan to the Developer under this Section, following notification by the City to the Developer of a Default by Developer under the terms of this Agreement.
Section 2.8 Repayment of the HOME Loan.
The HOME Loan shall be repaid as follows:
(a) Annual Payments. Commencing on April 1, 2023, and on April 1 of each year thereafter, through the end of the Term of the HOME Loan, the Developer shall make #21..
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14 repayments of the HOME Loan in the amount of the City's Share of Residual Receipts. Payment of the City's Share of Residual Receipts shall be credited first against accrued interest and then against outstanding principal and shall be accompanied by the Developer's report of Residual Receipts (including an independent auditor's report regarding the auditor's review of Annual Operating Expenses). The Developer shall provide the City with any documentation reasonably requested by the City to substantiate the Developer's determination of Residual Receipts. (b) Due in Full. All principal and accrued interest on the HOME Loan shall be due in full on the earliest to occur of the following: (1) the date of any Transfer not authorized by the City; (2) the date of any Default (subject to applicable notice and cure periods set forth in Section 7.1); or (3) the expiration of the Term.
(c) Right to Prepay. The Developer shall have the right to prepay the HOME Loan at any time without premium or penalty. However, this Agreement and the HOME Regulatory Agreement shall remain in effect for the entire Term regardless of any prepayment. (d) Special Repayment From Net Proceeds. Subject to the rights of senior lenders, No later than one hundred eighty (180) days from the Completion Date; the Developer shall pay to the City one-hundred percent (100%) of the Net Proceeds of Permanent Financing, as a special repayment of the Loan. The amount of the Net Proceeds of Permanent Financing shall be calculated using the actual principal amount of the permanent loans and/or grants made to the Developer, provided that if such amount is less than the amount set forth in the Approved Financing Plan, then the Developer shall provide sufficient evidence that the permanent loan is the maximum principal amount that the Developer could secure for the Development applying the permanent lender's underwriting standards. No later than one hundred fifty (150) days following completion of construction of the Development, Developer shall submit to the City for its review a preliminary calculation of the Net Proceeds of Permanent Financing. The City shall reasonably approve or disapprove Developer's determination of the amount of the Net Proceeds of Permanent Financing in writing within thirty (30) days of receipt. If Developer's determination is disapproved by the City, Developer shall re-submit documentation to the City until the City approval is obtained. Notwithstanding anything to the contrary, the Borrower may request a deduction from the Net Proceeds of Permanent Financing to fund additional capital reserve account and operating reserves upon approval from the City, which approval shall not be unreasonably withheld.
(e) Special Repayment For Un-leased Units. As required under 24 C.F.R.
92.252, if Developer fails to lease any one of the HOME Units within eighteen (18) months of the Completion of Construction of the Development subject to any force majeure extensions resulting from the application of Section 8.15(a) of this Agreement, the Developer shall pay to the City a proportionate share of the indebtedness of Developer to the City under this Agreement and the Note attributable to each of the HOME Units that has remained un-leased, together with any accrued interest thereon calculated pursuant to Section 2.2, which amount shall be immediately due and payable. Notwithstanding anything to the contrary, the requirements here under shall not apply if: (1) there exists an exigent health and safety system deficiency that threatens the life, health or safety of residents; (2) the exigent health and safety system deficiency was not caused by the Developer; (3) the exigent health and safety system deficiency #21..
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15 prevents the Developer from being able to rent the HOME Unit; and (4) the Developer shows good faith efforts to correct or abate the exigent health and safety system deficiency.
Section 2.9 Reports and Accounting of Residual Receipts. (a) Audited Financial Statement. In connection with the annual payments required pursuant to Section 2.8, within one hundred twenty (120) days of the end of the Developer's fiscal year, the Developer shall furnish to the City an audited statement duly certified by an independent firm of certified public accountants approved by the City, setting forth in reasonable detail the computation and amount of Residual Receipts during the preceding calendar year.
(b) Books and Records. The Developer shall keep and maintain on the Property, or at its principal place of business, or elsewhere with the City's written consent, full, complete and appropriate books, records and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the Developer's calculation of Residual Receipts. Books, records and accounts relating to the Developer's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement which provide for the calculation of Residual Receipts on a cash basis. All such books, records, and accounts shall be open to and available for inspection by the City, its auditors or other City authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that the Developer may be required to furnish any governmental agency shall at all reasonable times, and upon twenty-four (24) hours' notice, be open for inspection by the City at the place that the books, records and accounts of the Developer are kept. The Developer shall preserve records on which any statement of Residual Receipts is based for a period of not less than five (5) years after such statement is rendered, and for any period during which there is an audit undertaken pursuant to subsection (c) below then pending. (c) Audits. The receipt by the City of any statement pursuant to this section or any payment by the Developer or acceptance by the City of any loan repayment for any period shall not bind the City as to the correctness of such statement or such payment. Within three (3) years after the receipt of any such statement, the City or any designated agent or employee of the City at any time shall be entitled to audit the Residual Receipts and all books, records, and accounts pertaining thereto. Such audit shall be conducted during normal business hours at the principal place of business of the Developer and other places where records are kept.
Immediately after the completion of an audit, the City shall deliver a copy of the results of such audit to the Developer. If it shall be determined as a result of such audit that there has been a deficiency in a loan repayment to the City, then such deficiency shall become immediately due and payable with interest at the default rate set forth in this Agreement, as applicable, determined as of and accruing from the date that said payment should have been made. In addition, if the Developer's auditor's statement for any Development fiscal year shall be found to have understated Residual Receipts by more than five percent (5%) and at least Five Thousand Dollars ($5,000), and the City is entitled to any additional HOME Loan repayment as a result of said understatement, then the Developer shall pay, in addition to the interest charges referenced #21..
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16 hereinabove, all of the City's reasonable costs and expenses connected with any audit or review of the Developer's accounts and records.
Section 2.10 Nonrecourse.
(a) Except as provided below, upon recordation of the HOME Deed of Trust against the Affordable Parcel, the Developer shall have no direct or indirect personal liability for payment of the principal of, or interest on, the HOME Loan. Following recordation of the HOME Deed of Trust against the Affordable Parcel, the sole recourse of the City with respect to the principal of, and interest on, the Note shall be to the Property described in the HOME Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall:
(1) Limit or impair the enforcement against all such security for the Note of all the rights and remedies of the City thereunder; (2) Be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (3) Be deemed in any way to limit the rights of the City to obtain specific performance by the Developer of its covenants under the HOME Loan Documents, other than the covenants to pay the City principal and interest due under the Note; or (b) The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note; nothing contained herein is intended to relieve the Developer of its obligation to indemnify the City under this Agreement, or liability for:
(1) Fraud or willful misrepresentation by the Developer; (2) The failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the HOME Deed of Trust (to the full extent of such taxes, assessments or other charges); (3) The fair market value of any personal property or fixtures removed or disposed of by the Developer other than in accordance with the HOME Deed of Trust; and/or (4) The misappropriation of any proceeds by the Developer under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Development. #21..
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17 ARTICLE 3
PREDEVELOPMENT REQUIREMENTS
Section 3.1 Predevelopment Requirements.
The tasks described below shall be completed by the Developer no later than the dates set forth in this Article 3, subject to Force Majeure. The dates set forth herein may be modified by Operating Memoranda executed by the Developer and by the City Manager on behalf of the City without formal amendment of this Agreement.
Section 3.2 Final Financing Plan.
(a) As a condition precedent to the first Construction Component draw, the Developer shall have submitted and received approval from the City for any updates to the a "Final Financing Plan" attached hereto as Exhibit B:
(1) An updated "sources and uses" breakdown of the costs of purchasing the Property and constructing the Development, and an updated operating proforma for the Development. Such updated sources and uses breakdown shall reflect the Developer's then current expectations for funding sources and development costs and may be in a form substantially similar to the most recently revised approved Financing Proposal, or in such other form as is mutually agreed upon by the Parties. The sources and uses breakdown shall include a project budget, detail the proposed uses of the HOME Loan funds to be disbursed to the Developer, and include a disbursement schedule identifying the source of funds and the timing of disbursement;
(2) An operating proforma for the first thirty (30) years of operation of the Development including funding for the provision of resident services. If the Development does not have a rental subsidy committed, the Final Financing Plan shall demonstrate that the target population can pay the proposed rents;
(3) Copies of all required funding commitments for performing the Construction Work consistent with the Final Financing Plan, including approval of the Bond Loan lender, and a preliminary tax credit reservation and an executed commitment letter from a tax credit equity investor acceptable to the City. The funding for the Construction Work shall include, but not be limited to, the following: (i) HOME Loan; (ii); and (ii) any other private and public funds that may become available; and
(4) Any other information that is reasonably necessary to the City in determining that the Developer has the financial capability to pay all costs of completing the Construction Work in accordance with the requirements of this Agreement. (b) The City shall review the Final Financing Plan to determine if, in the City's reasonable judgment, the Developer has the financial capability (taking into account all committed funds), to pay all realistically established costs of constructing and operating the Development. The City shall review the Final Financing Plan and shall either approve or disapprove the Final Financing Plan in writing within fifteen (15) days of receipt. If disapproved, the City shall give specific reasons in writing for disapproval and the required #21..
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18 revisions to the previously submitted Final Financing Plan. If the Final Financing Plan is disapproved, the Developer shall resubmit, a revised Final Financing Plan within fifteen (15) days of notification of disapproval. The City shall either approve or disapprove the submitted revised Final Financing Plan within fifteen (15) days of the date such revised Final Financing Plan is received by the City.
(c) The Developer shall submit any material revision to an approved Final Financing Plan to the City for its review and approval. Any proposed revisions to Final Financing Plan shall be considered and approved or disapproved by the City in the same manner and according to the same timeframe set forth above for the Final Financing Plan. Until a revised Final Financing Plan is approved by the City, the previously approved Final Financing Plan shall govern the financing of the Development.
(d) The Developer acknowledges that execution of this Agreement by the City does not constitute a commitment by the City to provide any additional financial assistance to the Developer apart from the monies loaned pursuant and subject to the HOME loan documents and in no way limits the discretion of the City to determine any future assistance amounts.
Section 3.3 Relocation Plan.
(a) If and to the extent that construction of the Development results in the permanent or temporary displacement of residential tenants, homeowners, or businesses, then the Developer shall comply with all applicable local, state, and federal statutes and regulations, (including without limitation California Government Code Section 7260 et seq., and accompanying regulations) with respect to relocation planning, advisory assistance, and payment of monetary benefits. The Developer shall be solely responsible for payment of any relocation benefits to any displaced persons and any other obligations associated with complying with such relocation laws.
(b) To the extent applicable, the Developer shall defend (with counsel reasonably acceptable to the City), the City against any claim for damages, compensation, fines, penalties, relocation payments or other amounts arising out of the failure or alleged failure of any person or entity (including the Developer or the City) to satisfy relocation obligations related to the acquisition and construction of the Development. The terms of this Section shall survive the repayment of the HOME Loan, the reconveyance of the HOME Deed of Trust and the expiration of the Term.
Section 3.4 Plans and Specifications.
(a) No later than six (6) months from the Effective Date of this Agreement, the Developer shall submit to the City the plans and specifications for the construction of the Development, including all construction documentation upon which the Developer and the Developer's contractor shall rely in performing the Construction Work , including, but not necessarily limited to, final architectural drawings, landscaping plans and specifications, final elevations, building plans and specifications (also known as "working drawings") (collectively the "Plans and Specifications").
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19 (b) The Developer acknowledges that the execution of this Agreement by the City does not constitute approval by the City of the Plans and Specifications and in no way limits the discretion of the City in reviewing and making decisions regarding any discretionary or other permits required for the Development.
Section 3.5 Applicable Governmental Approvals.
(a) Promptly following the City approval of the Approved Plans and Specifications, the Developer shall apply for the Applicable Governmental Approvals necessary for performance of the Construction Work in accordance with the Approved Plans and Specifications and in the manner contemplated by the HOME Loan Documents. (b) The Developer acknowledges that execution of this Agreement by the City does not constitute approval by the City of any required Applicable Governmental Approvals and in no way limits the discretion of the City in the permit, allocation and approval process.
Section 3.6 Other Financing. All other financing necessary to construct the Development, as required and approved by the City in the Final Financing Plan, shall be closed by the Developer prior to, or simultaneously with the funding of the Construction Component.
The Developer shall also submit to the City evidence reasonably satisfactory to the City that any conditions to the release or expenditure of funds described in the Final Financing Plan as the sources of funds to pay the costs of constructing the Development have been met or will be met subject to the Developer's satisfaction of standard disbursement preconditions required to be satisfied on a periodic basis, for construction of the Development. Submission by the Developer, and approval by the City, of such evidence of funds availability shall be a condition precedent to the City's obligation to disburse the Construction Component.
Section 3.7 Management Plan.
(a) As a condition precedent to the first Construction Component draw request under the HOME Loan, the Developer shall submit to the City for review, a proposed management and marketing plan (the "Management Plan") for the leasing and operation of the Development.
(b) The City shall review the Management Plan and either reasonably approve or disapprove the Management Plan within fifteen (15) days after receipt. Any disapproval shall state in writing the specific reasons for the disapproval and specify in reasonable detail all of the changes the City requests be made in order to obtain approval. The Developer shall thereafter submit the revised Management Plan within fifteen (15) days of notification of disapproval. The City shall either approve or disapprove the submitted revised Management Plan within fifteen (15) days of the date such revised Management Plan is received by the City, and shall approve the revised Management Plan if the requested changes have been made.
Section 3.8 Construction Contract.
(a) As a condition precedent to the first Construction Component draw request under the HOME Loan the Developer shall submit to the City for its approval the #21..
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20 proposed construction contract for the Development. All construction work and professional services shall be performed by persons or entities licensed or otherwise authorized to perform the applicable construction work or service in the State of California. Each contract that the Developer enters for construction of the Development shall provide that at least ten percent (10%) of the costs incurred shall be payable only upon completion of construction, subject to early release of retention for specified subcontractors upon approval by the City. The City's approval of the construction contract shall in no way be deemed to constitute approval of or concurrence with any term or condition of the construction contract except as such term or condition may be required by this Agreement.
(b) The Developer shall submit the proposed Construction Contract with sufficient time for the City to review and approve such contracts. Upon receipt by the City of the proposed construction contract, the City shall promptly review same and approve or disapprove it within ten (10) working days. If the construction contract is not approved by the City, the City shall set forth in writing and notify the Developer of the City's reasons for withholding such approval. The Developer shall thereafter submit a revised construction contract for City approval, which approval shall be granted or denied in ten (10) working days in accordance with the procedures set forth above. Any construction contract executed by the Developer for the Development shall be in the form approved by the City.
Section 3.9 Building Permit Issued.
Not less than forty-five (45) days prior to the Commencement of Construction and as a condition precedent to the first Construction Component draw request under the HOME Loan, the Developer shall exercise diligent good faith efforts to obtain the building permit for the Construction Work. Upon delivery of evidence of receipt of such permit to the City this condition shall be considered satisfied.
Section 3.10 Insurance.
As a condition precedent to the initial draw request under the HOME Loan, the Developer shall submit to the City "Evidence of Insurance Coverage" meeting the general requirements set forth in Section 5.14 below. The City shall review and reasonably approve or disapprove of the Evidence of Insurance Coverage not less than ten (10) days after submission of complete information in the form required by the City. If the City disapproves the Evidence of Insurance coverage, it shall specify in writing the reasons for such disapproval. The Developer shall resubmit the information required within ten (10) days of the notification of disapproval. The City shall either approve or disapprove the submitted revised evidence of insurance within ten (10) days of the date such revised information is received by the City. No work shall be initiated on the Development prior to receipt of City's approval.
Section 3.11 Performance and Payment Bonds.
(a) As a condition precedent to the first Construction Component draw request under the HOME Loan, the Developer shall deliver to the City copies the Construction Bonds, which shall:
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21 (1) be in a form reasonably acceptable to the City;
(2) be issued by a surety licensed to do business in California and reasonably acceptable to the City; and
(3) name the City as a co-obligee.
(b) The City shall either reasonably approve or disapprove the submitted proposed Construction Bonds within fifteen (15) days from the date the City receives the Construction Bonds. If the proposed Construction Bonds are not approved by the City, then the City shall notify the Developer in writing of the reasons for disapproval and the required revisions to the previously submitted Construction Bonds. The Developer shall thereafter submit revised proposed Construction Bonds within fifteen (15) days of the notification of disapproval.
The City shall either approve or disapprove the submitted revised Construction Bonds within fifteen (15) days of the date such revised Construction Bonds are received by the City. The City shall approve the initial or revised Construction Bonds if they meet the standards set forth in Subsection (a) above.
(c) Notwithstanding the foregoing, the City shall consider other reasonable forms of security for the completion of the construction of the Project, from either the Developer or the Developer's general contractor, in lieu of such construction bonds described in this Section provided that: (1) all lenders set forth on the Financing Plan have agreed to such other security, and (ii) the City has the same enforcement rights under such security as the lenders set forth on the Financing Plan.
Section 3.12 Evidence of Availability of Funds.
As a condition precedent to the first Construction Component draw request under the HOME Loan, the Developer shall submit to the City evidence reasonably satisfactory to the City that any conditions to release or expend funds described in the approved Final Financing Plan for the purpose of paying the costs of the Construction Work have been satisfied or will be satisfied at the time of Commencement of Construction Work. The City shall either reasonably approve or disapprove the submitted information within fifteen (15) days from the date the City receives the information.
ARTICLE 4
CONSTRUCTION OF THE AFFORDABLE DEVELOPMENT
Section 4.1 Commencement of Construction Work.
The Developer shall cause the Commencement of the Construction Work in a manner consistent with the Approved Plans and Specifications and all applicable Governmental Approvals no later than twelve (12) months from the effective date of this Agreement, subject to extensions pursuant to Section 8.15 below.
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22 Section 4.2 Completion of Construction Work.
The Developer shall diligently complete the Construction Work in a manner consistent with the Approved Plans and Specifications and shall cause Completion of Construction of the Development, as evidenced by issuance of a certificate of occupancy, to occur no later than two years from the commencement of construction pursuant to Section 4.1, subject to extensions pursuant to Section 8.15 below.
Section 4.3 Performance of Work Pursuant to Plans and Laws; Prevailing Wages. (a) Changes. The Developer shall complete the Construction Work in conformance with the Approved Plans and Specifications. The Developer shall notify the City in a timely manner of any changes in the work required to be performed under this Agreement, including any additions, changes, or deletions to the Approved Plans and Specifications. A written change order authorized by the City must be obtained before any of the following changes, additions, or deletions in the Construction Work may be performed: (1) any change in the Construction Work the cost of which exceeds Twenty-Five Thousand Dollars ($25,000); or (2) any set of changes in the Construction Work the cost of which cumulatively exceeds Fifty Thousand Dollars ($50,000); or (3) any material change in building materials or equipment, specifications, or the structural or architectural design or appearance of the Development as provided for in the Approved Plans and Specifications. City consent to any additions, changes, or deletions to the work (collectively, "Changes") shall not relieve or release the Developer from any other obligations under this Agreement, or relieve or release the Developer or its surety from any surety bond. City consent to any Changes does not relieve the Developer from any requirements to receive approval from the City for such Changes. The City shall utilize best efforts to approve or disapprove change orders within five (5) working days of receipt of a request for approval.
(b) Compliance with Laws. The Developer shall cause all Construction Work performed in connection with the Development to be performed in compliance with: (1) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, including (without limitation and to the extent applicable) the prevailing wage provisions of the federal DavisBacon Act and implementing rules and regulations, if applicable (as further discussed in subsection (c) below), and state prevailing wages pursuant to Labor Code Section 1770 et seq., and the regulations pursuant thereto, as further set forth in subsection (d) below; (2) the property standards set out in 24 C.F.R. Section 5.701 et. seq., and 24 C.F.R. Section 92.251; and (3) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and the Developer shall be responsible to the agency for the procurement and maintenance thereof, as may be required of the Developer and all entities engaged in work on the Development.
(c) Davis Bacon. To the extent required by law, the Developer shall cause construction of the Development to be in compliance with the prevailing wage requirements of the federal Davis-Bacon Act (40 U.S.C. Sections 3141-3148). The Developer shall indemnify, #21..
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23 hold harmless and defend (with counsel reasonably acceptable to the City) the City, its councilmembers, officers, employees, agents, successors and assigns, against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including the Developer, its contractor and subcontractors) to pay prevailing wages as determined pursuant to the prevailing wage provisions of the federal DavisBacon Act and implementing rules and regulations in connection with the rehabilitation of the Development or any other work undertaken or in connection with the Property. The requirements in this subsection shall survive termination of this Agreement, repayment of the Loan and the reconveyance of the HOME Deed of Trust
(d) State Prevailing Wages. To the extent required by law, the Developer shall pay and shall cause the contractor and subcontractors to pay prevailing wages in connection with the Construction Work, as those wages are determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices as required by Labor Code Sections 1777.5 et seq., and the implementing regulations of the Department of Industrial Relations (the "DIR"). In addition, as applicable, the Developer shall cause its respective contractors and subcontractors to do all the following: (i) all calls for bids, bidding materials and the construction contract documents for the Development must specify that (A) no contractor or subcontractor may be listed on a bid proposal nor be awarded a contract for the Development unless registered with the DIR pursuant to Labor Code Section 1725.5 , and (B) the Development is subject to compliance monitoring and enforcement by the California Department of Industrial Relations ("DIR"); (ii) the Developer is required to provide the City all information required by Labor Code Section 1773.3 as set forth in the DIR's online form PWC-100 within 2 days of the award of the contract (https://www.dir.ca.gov/pwc100ext/); (iii) the Developer shall cause its respective contractors to post job site notices, as prescribed by regulation by the DIR; (iv) the Developer shall cause its respective contractors to furnish payroll records required by Labor Code Section 1776 directly to the Labor Commissioner, at least monthly in the electronic format prescribed by the Labor Commissioner. The Developer shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the City) the City its councilmembers, officers, employees, agents, successors and assigns, against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including the Developer, its contractor and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations of the DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the Construction Work or any other work undertaken or in connection with the Development. The requirements in this subsection shall survive the repayment of the HOME Loan, and the reconveyance of the HOME Deed of Trust. (e) Accessibility Requirements. The Developer shall construct the Development to comply with all applicable federal and state disabled persons accessibility requirements including but not limited to the Federal Fair Housing Act, Section 504 of the Construction Act of 1973, Title II and/or Title III of the Americans with Disabilities Act of 1990, Title 24 of the California Code of Regulations and the Uniform Federal Accessibility Standards (UFAS). In compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794, et seq.), a minimum of five percent (5%) of all Units shall be constructed to be fully accessible to households with a mobility impaired member and an additional two percent (2%) of all Units #21..
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24 shall be readily accessible to hearing and/or visually impaired persons. All Units in the Development shall also be built to comply with the Uniform Federal Accessibility Standards under 49 C.F.R. 31528.
Section 4.4 Equal Opportunity.
During the performance of the Construction Work there shall be no discrimination on the basis of race, color, creed, religion, age, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, military and veteran status, or disability in the hiring, firing, promoting, or demoting of any person engaged in the Construction Work .
Section 4.5 Minority and Women-Owned Contractors.
Developer shall use its best efforts to afford minority-owned and women-owned business enterprises the maximum practicable opportunity to participate in the construction of the Development. Developer shall, at a minimum, notify applicable minority-owned and womenowned business firms located in Stanislaus County of bid opportunities for the construction of the Development. Documentation of such notifications must be maintained by Developer and available to the County as requested.
Section 4.6 Progress Reports; Amended Final Financing Plan.
From the date of execution of this Agreement and continuing until Completion of Construction, the Developer shall provide the City with quarterly progress reports regarding the status of the Construction Work, including a certification that the actual construction costs to date conform to the Final Financing Plan. The Developer shall submit any required amendments to the Final Financing Plan to the City for approval within fifteen (15) days of the date the Developer receives information indicating that actual costs of the Development vary or will vary from the costs shown on the Final Financing Plan. Written consent of the City shall be required to amend the Final Financing Plan.
Section 4.7 Construction Responsibilities.
(a) It shall be the responsibility of the Developer to coordinate and schedule the work to be performed so that Commencement of Construction and Completion of Construction will take place in accordance with this Agreement. (b) The Developer shall be solely responsible for all aspects of the Developer's conduct in connection with the Development, including (but not limited to) the quality and suitability of the Construction Work, the supervision of Construction Work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property managers. Any review or inspection undertaken by the City with reference to the Development is solely for the purpose of determining whether the Developer is properly discharging its obligations to the City, and should not be relied upon by the Developer or by any third parties as a warranty or representation by the City as to the quality of the design or construction of the Development and does not relieve the #21..
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25 Developer, or its consultants, from any applicable requirement to obtain City approval and/or inspections.
Section 4.8 Mechanics Liens, Stop Notices, and Notices of Completion. (a) If any claim of lien is filed against the Property or the Development or a stop notice affecting the HOME Loan is served on the City or any other lender or other third party in connection with the Construction Work, then the Developer shall, within fifteen (15) days after such filing or service give notice to the City of the claim of lien, and within thirty (30) days either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the City a surety bond from a surety acceptable to the City in sufficient form and amount, or provide the City with other assurance satisfactory to the City that the claim of lien or stop notice will be paid or discharged.
(b) If the Developer fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the City may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at the Developer's expense. Alternately, the City may require the Developer to immediately deposit with the City the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The City may use such deposit to satisfy any claim or lien that is adversely determined against the Developer.
(c) The Developer shall file a valid notice of cessation or notice of completion upon cessation of construction of the Development for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims of lien against the Property and/or Development. The Developer authorizes the City, but without any obligation to the City, to record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Development. The Developer agrees and acknowledges that the City must conduct on-site inspections, consistent with the requirements of 24 C.F.R. 92.504(d), to determine compliance with the property standards set forth in 24 C.F.R. 92.251, at least once every three(3) years after the completion of construction of the Development.
Section 4.9 Inspections.
(a) The Developer shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection at the Development by the City and by public authorities during reasonable business hours for the purposes of determining compliance with this Agreement. Developer agrees and acknowledges that the City must conduct or cause to be conducted on-site inspections, consistent with the requirements of 24 C.F.R. 92.504(d), to determine compliance with the property standards set forth in 24 C.F.R. 92.251, at least once every three (3) years after the completion of the Development. Such inspections do not relieve the Developer, or its contractors, from any applicable requirement to obtain City inspections in connection with the construction of the Development.
(b) After the completion of an inspection the City shall deliver a copy of the inspection report to the Developer. If the City determines as a result of such inspection that there #21..
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26 are any life-threatening health and safety related deficiencies, Developer has the obligation to correct such deficiencies immediately, in accordance with 24 C.F.R 92.251. If the City determines as a result of the inspection that there are any deficiencies for any of the inspectable items in the Development, the Developer shall correct such deficiencies within fifteen (15) days from the delivery of the inspection report or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Developer must begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible. In addition, the Developer acknowledges that the City may re-inspect the Development to verify all deficiencies have been corrected or rely on third party documentation submitted by the Developer for non-hazardous deficiencies in conformance with 24 C.F.R. 92.504(d) Section 4.10 Developer Fee.
In no event shall developer fees paid to any entity for development services rendered, including administrative fees and costs in connection with the Development and deferred developer fees exceed the lesser of: (i) the maximum amount that is permitted by HCD, and; (ii) the amount approved in the Final Financing Plan.
Section 4.11 Marketing Plan.
(a) No later than six (6) months prior to the projected date of the completion of the Development, the Developer shall submit to the City for approval its plan for marketing the Development to income-eligible households as required pursuant to the HOME Regulatory Agreement, including information on affirmative marketing efforts and compliance with fair housing laws, including but not limited to the information required under 24 C.F.R. Section
92.351(a) (the "Marketing Plan").
(b) Upon receipt of the Marketing Plan, the City shall promptly review the Marketing Plan and shall approve or disapprove the Marketing Plan within fifteen (15) days after submission. If the Marketing Plan is not approved, the Developer shall submit a revised Marketing Plan within fifteen (15) days. If the City does not approve the revised Marketing Plan, the Developer shall be in default hereunder.
(c) If after five (5) months after the Completion of Construction any HOME Unit remains unoccupied, the Developer shall submit a detail report of the ongoing marketing efforts, and if deemed appropriate by the City, any necessary amendments or updates to the Marketing Plan aimed at ensuring any unoccupied HOME Unit is promptly leased. If any of the HOME Units remain unoccupied eleven (11) months after the Completion of Construction, the Developer shall submit a detailed report of the ongoing marketing efforts and submit to the City an update to the Marketing Plan. Failure to lease all of the HOME Units to an eligible tenant within eighteen (18) months of Completion of Construction shall trigger the special repayment pursuant to Section 2.8(e).
#21..
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27 ARTICLE 5
LOAN REQUIREMENTS
Section 5.1 Match Requirement.
The Developer shall ensure that the HOME Loan is matched with a minimum of 12.5% (the HOME match subject to the City's reduction amount) of the loan amount which is equal to Eighty-four Thousand and Two Hundred and Fourteen Dollars ($84,214), in other, non-federal sources, pursuant to and eligible under 24 CFR 92.220.
Section 5.2 Financial Accountings and Post-Completion Audits.
The Developer shall provide to City a financial accounting of all sources and uses of funds for the Construction Work. No later than one hundred fifty (150) calendar days following completion of Construction Work, the Developer shall submit a cost certification prepared by the Developer's accountants showing the sources and uses of all funds utilized for the Development, as well as a copy of all documents that the Developer is required to submit to TCAC as part of the final feasibility and cost reasonableness analysis, as applicable. This requirement may be satisfied by providing the Final Cost Certification to the City. "Final Cost Certification" means the Final Cost Certification Sources and Uses of Funds prepared by Developer for the Development that: (1) Developer submits to TCAC; and (2) has been prepared using generally accepted accounting procedures in effect in the United States from time to time, consistently applied
Section 5.3 Annual Operating Budget.
At the beginning of each fiscal year of the Term, the Developer shall provide to the City an annual budget for the operation of the Development. Unless rejected by the City in writing within fifteen (15) days after receipt of the budget, said budget shall be deemed accepted. If rejected by the City in whole or in part, the Developer shall submit a new or corrected budget within thirty (30) calendar days of notification of the City's rejection and the reasons, therefore.
The provisions of this Section relating to time periods for resubmission of new or corrected budgets shall continue to apply until such budget has been approved by the City.
Section 5.4 Information.
The Developer shall provide all information reasonably requested by the City in connection with the Construction Work and the operation of the Development, including but not limited to any information required by HUD in connection with the Developer's use of the HOME Loan funds.
Section 5.5 Records.
(a) The Developer shall keep and maintain at the Development, or elsewhere with the City's written consent, full, complete and appropriate books, records and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Developer's compliance with the terms and provisions #21..
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28 of this Agreement. Books, records and accounts relating to Developer's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement. All such books, records, and accounts shall be open to and available for inspection and copying by HUD, the City, its auditors or other authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that Developer may be required to furnish to any governmental agency shall at all reasonable times be open for inspection by the City at the place that the books, records and accounts of the Developer are kept. The Developer shall preserve such records for a period of not fewer than five (5) years after the creation of such records in compliance with all HUD records and accounting requirements. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Loan is pending at the end of the record retention period stated herein, then the Developer shall retain such records until such action and all related issues are resolved. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan funds. Records must be kept accurate and current and in such a form as to allow the City to comply with the applicable recordkeeping requirements contained in 24 C.F.R. Section 92.508. Such records shall include but not be limited to:
(1) Records providing a full description of the activities undertaken with the use of the Loan funds;
(2) Records demonstrating compliance with the City and HUD property standards and lead-based paint requirements, including, as applicable, the Uniform Physical Conditions Standards established by HUD pursuant to 24 C.F.R. 5.703; (3) Records demonstrating compliance with the Tenant Selection Plan requirements pursuant to 24 C.F.R. 92.253(d);
(4) Records demonstrating compliance with the affordability and income requirements for tenants and HOME affordability and income requirements; (5) Records documenting compliance with the fair housing, equal opportunity, and affirmative fair marketing;
(6) Financial records as required by 24 C.F.R. 92.505, and OMB Circular A-110 (24 C.F.R. Part 84);
(7) Records demonstrating compliance with 24 C.F.R. Part 135 which implements Section 3 of the Housing Development Act of 1968; (8) Records demonstrating compliance with applicable relocation requirements which must be retained for at least five (5) years after the date by which persons displaced from the property have received final payments; (9) Records demonstrating compliance with MBE/WBE requirements; #21..
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29 (10) Records demonstrating that tenant leases comply with the HOME Requirements;
(11) Records demonstrating compliance with Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u, and labor requirements, including certified payrolls from the Developer's general contractor (and any subcontractor) evidencing that applicable prevailing wages have been paid; (12) Financial records as required by 24 C.F.R. Section 92.505, and OMB Circular A-110; and
(13) Records demonstrating compliance with 24 C.F.R. 8.20. (b) The City shall notify Developer of any records it deems insufficient.
Developer shall have fifteen (15) calendar days after the receipt of such a notice to correct any deficiency in the records specified by the City in such notice, or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Developer shall begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
Section 5.6 Audits.
(a) Each year, the Developer shall provide the City with a copy of the Developer's annual audit, which shall include information on all of the Developer's activities and not just those pertaining to the Development, and shall submit all other financial information reasonably requested by the City determined by the City as necessary for compliance with the requirements of 24 C.F.R 504(d). Developer shall also follow audit requirements of the Single Audit Act and OMB Circulars A-122 and 110.
(b) In addition, the City or any designated agent or employee of the City at any time shall be entitled to audit all of Developer's books, records, and accounts pertaining thereto. Such audit shall be conducted during normal business hours at the principal place of business of Developer and other places where records are kept. Immediately after the completion of an audit, the City shall deliver a copy of the results of such audit to Developer.
The City shall deliver a copy of the results of the audit to Developer. If it is determined as a result of such audit that there has been a deficiency in a loan repayment to the County, then such deficiency will become immediately due and payable with interest at the Default Rate from the date the deficient amount should have been paid. In addition, if any audit conducted pursuant to this Section 2.9(c) determines that Residual Receipts have been understated for any fiscal year by more than five percent (5%) and at least $5,000.00, then the Developer shall pay, in addition to the amounts set forth above, all of the costs and expenses incurred by the County in connection with the audit and review of Developer's accounts or records.
Section 5.7 HOME Requirements.
(a) The Developer shall comply with all applicable laws and regulations governing the use of the HOME funds as set forth in 24 C.F.R. Part 92, including but not limited to the requirements of the HOME Regulatory Agreement. In the event of any conflict between this Agreement and applicable laws and regulations governing the use of the HOME Loan funds, #21..
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30 the applicable laws and regulations shall govern. During the HOME Term, these requirements shall be federal requirements, implemented by the City; thereafter, these requirements shall be deemed local City requirements.
(b) The laws and regulations governing the use of the HOME Loan funds include (but are not limited to) the following:
(1) Eligible Project Costs. Restrictions on funding only eligible project costs as defined under 24 C.F.R. 92.206.
(2) Environmental and Historic Preservation. 24 C.F.R. Part 50 and 24 C.F.R. Part 58, which prescribes procedures for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. Sections 4321-4361), and the additional laws and authorities listed at 24 C.F.R. Section 58.5.
(3) Applicability of OMB Circulars. The applicable policies, guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, and A-133.
(4) Debarred, Suspended or Ineligible Contractors. The prohibition on the use of debarred, suspended, or ineligible contractors and subcontractors set forth in 24 C.F.R.
Part 24, including maintenance of all appropriate records for compliance thereof. (5) Civil Rights, Housing and Community Development, and Age Discrimination Acts. The Fair Housing Act (42 U.S.C. Section 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the Housing and Community Development Act of 1974 as amended; Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794, et seq.); the Age Discrimination Act of 1975 (42 U.S.C. Section 6101, et seq.); Executive Order 11063 as amended by Executive Order 12259 and implementing regulations at 24 C.F.R. Part 107; Executive Order 11246 as amended by Executive Orders 11375, 12086, 11478, 12107; Executive Order 11625 as amended by Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by Executive Order 12608, Executive Order 13672, concerning Gender Identity. (6) Lead-Based Paint. The requirement of the Lead-Based Paint Poisoning Prevention Act, as amended (42 U.S.C. Section 4821 et seq.), the Residential LeadBased Paint Hazard Reduction Act (42 U.S.C. Section 4851 et seq.), and implementing regulations at 24 C.F.R. Part 35.
(7) Relocation. The requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. Section 4601, et seq.) and implementing regulations at 49 C.F.R. Part 24; 24 C.F.R. 570.606, Section 104(d) of the Housing and Community Development Act of 1974 and implementing regulations at 24 C.F.R.
Part 42; 24 C.F.R. Section 92.353; and California Government Code Section 7260 et seq. and implementing regulations at 25 California Code of Regulations Section 6000 et seq. If and to the extent that construction of the Development results in the permanent or temporary displacement of residential tenants, homeowners, or businesses, then the Developer shall comply with all #21..
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31 applicable local, state, and federal statutes and regulations with respect to relocation planning, advisory assistance, and payment of monetary benefits. The Developer shall prepare and submit a relocation plan to the City for approval. The Developer shall be solely responsible for payment of any relocation benefits to any displaced persons and any other obligations associated with complying with such relocation laws. The Developer shall indemnify, defend (with counsel reasonably chosen by the City), and hold harmless the City, its councilmembers, officers, employees, agents, successors and assigns, against all claims which arise out of relocation obligations to residential tenants, homeowners, or businesses permanently or temporarily displaced by the Development.
(8) Discrimination against the Disabled. The requirements of the Fair Housing Act (42 U.S.C. 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100, the requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794), the Uniform Federal Accessibility Standards (24 C.F.R. 8.20, et seq. 8.51), and federal regulations issued pursuant thereto, which prohibit discrimination against the disabled in any federally assisted program, the requirements of the Architectural Barriers Act of 1968 (42 U.S.C. Sections 4151-4157) and the applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of 1990 (42 U.S.C. Section 12131 et seq.), and federal regulations issued pursuant thereto.
(9) Clean Air and Water Acts. 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., and the regulations of the Environmental Protection Agency with respect thereto, at 40 C.F.R. Part 1500, as amended from time to time. (10) Uniform Administrative Requirements. The requirements of 24 C.F.R. Section 92.505 regarding cost and auditing requirements. (11) Training Opportunities. The requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u ("Section 3") and implementing regulations 24 C.F.R. 135 et seq., requiring that to the greatest extent feasible opportunities for training and employment be given to lower income residents of the project area and agreements for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in, the areas of the project. The Developer agrees to include the following language in all subcontracts executed under this Agreement:
(i) The work to be performed under this contract is subject to the requirements of Section 3. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u, shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. (ii) The parties to this contract agree to comply with HUD's regulations in 24 C.F.R. Part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the 24 C.F.R. Part 135 regulations. #21..
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32 (iii) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause; and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference; shall set forth minimum number and job titles subject to hire; availability of apprenticeship and training positions; the qualifications for each; the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. (iv) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 C.F.R. Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 C.F.R. Part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 C.F.R. Part 135.
(v) The contractor will certify that any vacant employment positions, including training positions, that are filled: (1) after the contractor is selected but before the contract is executed; and (2) with persons other than those to whom the regulations of 24 C.F.R. Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 C.F.R. Part 135. (vi) Noncompliance with HUD's regulations in 24 C.F.R. Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts.
(vii) With respect to work performed in connection with Section 3 covered Indian housing assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. Section 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible: (1) preference and opportunities for training and employment shall be given to Indians, and (2) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 3 and Section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with Section 7(b).
(12) Labor Standards. The Developer shall comply with applicable labor requirements set forth in 24 C.F.R. Section 92.354: the prevailing wage requirements of the Davis-Bacon Act and implementing rules and regulations (40 U.S.C. Sections 3141-3148); the Copeland "Anti-Kickback" Act (40 U.S.C. Section 276(c)) which requires that workers be paid at least once a week without any deductions or rebates except permissible deductions; the Contract Work Hours and Safety Standards Act – CWHSSA (40 U.S.C. Sections 3701-3708) which requires that workers receive "overtime" compensation at a rate of 1-1/2 times their regular hourly wage after they have worked forty (40) hours in one (1) week; and Title 29, Code #21..
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33 of Federal Regulations, Subtitle A, Parts 1, 3 and 5 are the regulations and procedures issued by the Secretary of Labor for the administration and enforcement of the Davis-Bacon Act, as amended. Because, as provided in the HOME Regulatory Agreement, eight (8) units in the Development are HOME Units, it is the understanding of the City and the Developer that the construction of the Development is exempt from the prevailing wage requirements of the DavisBacon Act, pursuant to 24 CFR 92.354(a)(2). (13) Drug Free Workplace. The requirements of the Drug Free Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 C.F.R. Part 24. (14) Anti-Lobbying; Disclosure Requirements. The disclosure requirements and prohibitions of 31 U.S.C. Section 1352 and implementing regulations at 24 C.F.R. Part 87.
(15) Historic Preservation. The historic preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. Section 470) and the procedures set forth in 36 C.F.R. Part 800. If archeological, cultural, or historic period resources are discovered during rehabilitation, all rehabilitation work must come to a halt and the Developer shall immediately notify the City. The Developer shall not shall alter or move the discovered material(s) until all appropriate procedures for "post-review discoveries" set forth in Section 106 of the National Historic Preservation Act have taken place, which include, but are not limited to, consultation with the California State Historic Preservation Officer and evaluation of the discovered material(s) by a qualified professional archeologist. (16) Flood Disaster Protection. The requirements of the Flood Disaster Protection Act of 1973 (P.L. 93-234) (the "Flood Act"). No portion of the assistance provided under this Agreement is approved for acquisition or construction purposes as defined under Section 3(a) of the Flood Act, for use in an area identified by HUD as having special flood hazards which is not then in compliance with the requirements for participation in the national flood insurance program pursuant to Section 201(d) of the Flood Act. The use of any assistance provided under this Agreement for such acquisition or construction in such identified areas in communities then participating in the National Flood Insurance Program is subject to the mandatory purchase of flood insurance requirements of Section 102(a) of the Flood Act. If the Property is located in an area identified by HUD as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq., the property owner and its successors or assigns must obtain and maintain, during the ownership of the Property, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under -Section 102(s) of the Flood Act. Such provisions are required notwithstanding the fact that the construction on the Property is not itself funded with assistance provided under this Agreement. (17) Faith Based Activities. If the Developer is a religious organization, as defined by the HOME requirements, the Developer shall comply with all conditions prescribed by HUD for the use of HOME Funds by religious organizations, including the First Amendment of the United States Constitution regarding church/state principles and the applicable constitutional prohibitions set forth in 24 C.F.R. 92.257. #21..
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34 (18) Physical Needs Assessment. The Developer shall conduct, or caused to be conducted, a physical needs assessment on the Development once every five (5) years from the date that construction of the Development is completed. The Developer shall comply with all HUD requirements for conducting and documenting the physical needs assessment and shall provide the City with a copy of all documentation related to each physical needs assessment conducted, or caused to be conducted, by the Developer. (19) HUD Regulations. Any other HUD regulations present or as may be amended, added, or waived in the future pertaining to the Loan funds, including but not limited to HUD regulations as may be promulgated regarding subrecipients.
Section 5.8 Hazardous Materials.
(a) The Developer shall keep and maintain the Development in compliance with, and shall not cause or permit the Development to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under, or about the Development including, but not limited to, soil and ground water conditions. The Developer shall not use, generate, manufacture, store or dispose of, on, under, or about the Development or transport to or from the Development any Hazardous Materials except those materials as may be used in the construction and operation of the Development, or customarily kept and used in and about residential property of this type. (b) The Developer shall immediately advise the City in writing: (1) any time the Developer receives written notice of any Hazardous Materials Claims, and (2) if the Developer discovers of any occurrence or condition on any real property adjoining or in the vicinity of the Development that could cause the Development or any part thereof to be classified as "border-zone property" under the provision of California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Development under any Hazardous Materials Law.
(c) The City shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by the Developer.
The Developer shall indemnify and hold harmless the City and its council members, directors, officers, employees, agents, successors and assigns, from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Development (including asbestos) including without limitation: (1) all foreseeable consequential damages; (2) the costs of any required or necessary repair, cleanup or detoxification of the Development and the preparation and implementation of any closure, remedial or other required plans; and (3) all reasonable costs and expenses incurred by the City in connection with clauses (1) and (2), including but not limited to reasonable attorneys' fees.
This indemnification applies whether or not any government agency has issued a cleanup order.
Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (1) losses attributable to diminution in the value of the Property, (2) loss or restriction of use of rentable space on the Property, (3) adverse effect on the marketing #21..
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35 of any rental space on the Property, and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the Property and surrounding properties). This obligation to indemnify shall survive termination of this Agreement.
(d) Without the City's prior written consent, which shall not be unreasonably withheld, the Developer shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Development, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in the City's reasonable judgment, impair the value of the City's security hereunder; provided, however, that the City's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Development either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the City's consent before taking such action, provided that in such event the Developer shall notify the City as soon as practicable of any action so taken. The City agrees not to withhold its consent, where such consent is required hereunder, if either: (1) a particular remedial action is ordered by a court of competent jurisdiction; (2) the Developer will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (3) the Developer establishes to the reasonable satisfaction of the City that there is no reasonable alternative to such remedial action which would result in less impairment of the City's security hereunder; or (4) the action has been agreed to by the City. (e) The Developer hereby acknowledges and agrees that: (1) this Section is intended as the City's written request for information (and the Developer's response) concerning the environmental condition of the Development as required by California Code of Civil Procedure Section 726.5; and (2) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Development is intended by the Parties to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736. (f) In the event that any portion of the Development is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the City's or the trustee's rights and remedies under the HOME Deed of Trust, the City may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to: (1) waive its lien on such environmentally impaired or affected portion of the Development; and (2) exercise: (i) the rights and remedies of an unsecured creditor, including reduction of its claim against the Developer to judgment; and (ii) any other rights and remedies permitted by law. For purposes of determining the City right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Developer shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Development and the Developer knew or should have #21..
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36 known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the City in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Development is environmentally impaired, plus interest thereon at the lesser of ten percent (10%) or the maximum rate permitted by law, until paid, shall be added to the indebtedness secured by the HOME Deed of Trust and shall be due and payable to the City upon its demand made at any time following the conclusion of such action. (g) The Developer hereby indemnifies the City and its council members, directors, officers, employees, agents, successors and assigns for any and all liability resulting from or related to the presence of any Hazardous Materials on the Property.
Section 5.9 Maintenance and Damage.
(a) During the course of operation of the Development, the Developer shall maintain the Development in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if the Developer has not cured such condition within thirty (30) days after receiving a notice from the City of such a condition, then in addition to any other rights available to the City, the City shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property.
(b) Subject to the requirements of senior lenders, and if economically feasible in the City's reasonable judgment after consultation with the Developer, if any improvement now or in the future on the Property is damaged or destroyed, then the Developer shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications approved by the City with such changes as have been approved by the City. Such work or repair shall be commenced no later than the later of one hundred twenty (120) days, or such longer period approved by the City in writing, after the damage or loss occurs or thirty (30) days following receipt of the insurance proceeds, and shall be complete within one (1) year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then the Developer shall make up the deficiency. If the Developer does not make repairs, then any insurance proceeds collected for such damage or destruction shall be distributed as if such proceeds were Residual Receipts, subject to the rights of the Senior Lenders.
Section 5.10 Fees and Taxes.
(a) The Developer shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Development to the extent owed by the Developer, and shall pay such charges prior to delinquency. However, the Developer shall not be required to pay and discharge any such charge so long as: (1) the legality thereof is being contested diligently and in good faith and by appropriate proceedings; and (2) if requested by the City, the Developer deposits with the City any funds or other forms of assurance that the City in good faith from time to time #21..
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37 determines appropriate to protect the City from the consequences of the contest being unsuccessful.
(b) The City acknowledges that the Developer intends to apply to the State Board of Equalization for a welfare exemption from property taxes under California Revenue and Taxation Code Section 214 for the Development. Nothing in this Agreement shall prohibit the Developer from applying for and obtaining a welfare exemption for the Development.
Section 5.11 Notice of Litigation.
The Developer shall promptly notify the City in writing of any litigation related to the Development, and any litigation related to the Developer for which the amount claimed or at issue is in excess of Fifty Thousand Dollars ($50,000), and of any claims or disputes related to the Development that involve a material risk of litigation.
Section 5.12 Operation of Development as Affordable Housing. (a) Promptly after Completion of Construction of the Development, the Developer shall operate the Development as an affordable housing development consistent with:
(1) HUD's requirements for use of the HOME Loan Funds for the HOME Term; and (2) the HOME Regulatory Agreement for the Term of this Agreement. (b) Before leasing any Unit in the Development, the Developer shall submit its proposed form of lease agreement for the City's review and approval. The term of the form of lease agreement shall be for no less than one (1) year, except by mutual agreement between the Developer and the tenant, and shall not contain any provision which is prohibited by 24 C.F.R.
Section 92.253(d) and any modifications thereto. Any Developer termination of a lease agreement or refusal to renew must be in conformance with 24 C.F.R. Section 92.253(c), and must be preceded by not fewer than sixty (60) days written notice to the tenant by the Developer specifying the grounds for the action.
(c) Before leasing any HOME Unit in the Development, the Developer must provide the City, for its review and approval, with the Developer's written tenant selection plan.
The Developer's tenant selection plan must, at a minimum, meet the requirements for tenant selection set out in 24 C.F.R. Section 92.253(d), and any modifications thereto. (d) The Developer must determine the income eligibility of each tenant household in a HOME Unit pursuant to 24 C.F.R. 5.233 and 24 C.F.R. 5.609, and any applicable Tenant Selection Plan the City's approved tenant certification procedures within sixty (60) days before the household's expected occupancy of one of the Development's HOME Units. The Developer shall certify each tenant household's income on an annual basis. (e) The maximum household income of a household occupying a HOME Unit in the Development, and the total charges for rent, utilities, and related services to each household occupying a HOME Unit, shall be maintained as provided in the HOME Regulatory Agreement.
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38 Section 5.13 Non-Discrimination.
Developer covenants by and for itself and its successors and assigns that there will be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age (except for lawful senior housing in accordance with state and federal law), familial status, disability, sex, gender, gender identity, gender expression, sexual orientation, marital status, ancestry, military and veteran status or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor may Developer or any person claiming under or through Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property.
Developer shall comply with Executive Orders 11246, 11375, 11625, 12138, 12431, 12250, 13672, Title VII of the Civil Rights Act of 1964, the California Fair Housing and Employment Act and other applicable Federal, State and local laws and regulations and policies relating to equal employment and contracting opportunities, including laws and regulations hereafter enacted. The foregoing covenant will run with the land.
Section 5.14 Insurance Requirements.
(a) Required Coverage. The Developer shall maintain and keep in force, at the Developer's sole cost and expense, the following insurance coverage, applicable to the Development, throughout the Term of this Agreement:
(1) Workers' Compensation insurance to the extent required by law, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,000,000) each accident;
(2) Commercial General Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations. Products and Completed Operations coverage shall be obtained no later than completion of construction of the Development; (3) Comprehensive Commercial Automobile Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverage for owned, non-owned and hired vehicles, as applicable; provided, however, that if the Developer does not own or lease vehicles for purposes of this Agreement, then no automobile insurance shall be required and both parties to this Agreement shall initial this provision signifying the same; and (4) Builders' risk insurance during the course of construction (and upon completion of construction, property insurance) covering the Development and covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the City, naming the City as a Loss Payee, as its interest may appear. Flood insurance shall be obtained if required by applicable federal regulations. #21..
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39 (5) Commercial crime insurance covering all officers and employees, for loss of Loan proceeds caused by dishonesty, in an amount approved by the City, naming the City as a Loss Payee, as its interest may appear.
(b) Contractor's Insurance. The Developer shall cause any general contractor, demolition contractor, or agent working on the Development under direct contract with the Developer to maintain insurance of the types and in at least the minimum amounts described in subsections (a) above, and shall require that such insurance shall meet all of the general requirements of subsections (c) below. Subcontractors working on the Development under indirect contract with the Developer shall be required to maintain the insurance described in subsections (a)(1) through (a)(3) above, except that the limit for the insurance described in subsection (a)(2) may be One Million Dollars ($1,000,000). Liability and Comprehensive Automobile Liability insurance to be maintained by such contractors and agents pursuant to this subsection shall name as additional insureds the City, its council members, officers, agents, and employees.
(c) General Requirements. The required insurance shall be provided under an occurrence form, and the Developer shall maintain such coverage continuously throughout the Term. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall be three (3) times the occurrence limits specified above.
Comprehensive General Liability, Comprehensive Automobile Liability and Property insurance policies (including builders' risk) shall be endorsed to name as an additional insured the City, and its officers, council members, agents, and employees.
All policies and bonds shall contain: (1) the agreement of the insurer to give the City at least thirty (30) days' notice prior to cancellation (including, without limitation, for nonpayment of premium) or any material change in said policies; (2) an agreement that such policies are primary and noncontributing with any insurance that may be carried by the City; (3) a provision that no act or omission of the Developer shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (4) a waiver by the insurer of all rights of subrogation against the City and its authorized parties in connection with any loss or damage thereby insured against.
(d) Certificate of Insurance. Upon the City's request at any time during the term of this Agreement, the Developer shall provide certificates of insurance, in form and with insurers reasonable acceptable to the City, evidencing compliance with the requirements of this Section, and shall provide complete copies of such insurance policies, including a separate endorsement naming the City, and its council members, officers agents and employees as additional insured.
Section 5.15 Anti-Lobbying Certification.
The Developer certifies, to the best of the Developer's knowledge or belief, that:
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40 (a) No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;
(b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to Report Lobbying, in accordance with its instructions.
(c) This certification is a material representation of fact upon which reliance was placed when this Agreement was made or entered into. Submission of this certification is a prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, and U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars ($100,000) for such failure.
Section 5.16 Purpose of Restriction on Transfer.
This Agreement is entered into solely for the purpose of the Developer's construction and operation of the Development in accordance with the terms of this Agreement and the HOME Regulatory Agreement. The qualifications and identity of the Developer are of particular concern to the City, in view of:
(a) The importance of the construction of the Development to the general welfare of the community;
(b) The public aids that have been made available by law and by the government for the purpose of making such development possible; (c) The reliance by the City upon the unique qualifications and ability of the Developer to serve as the catalyst for construction of the Development and upon the continuing interest which the Developer will have in the Development to assure the quality of the use, operation, and maintenance deemed critical by the City in the construction of the Development; (d) The fact that a change in ownership or control of the owner of the Development, or of a substantial part thereof, or any other act or transaction involving or resulting in a significant change in ownership or with respect to the identity of the parties in control of the Developer or the degree thereof, is for practical purposes a transfer or disposition of the Development; and
(e) The importance to the City of the standards of use, operation, and maintenance of the Development.
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41 It is because of the qualifications and identity of the Developer that the City is entering into this Agreement and that Transfers are permitted only as provided in this Agreement.
Section 5.17 Prohibited Transfers.
(a) The limitations on Transfers set forth in this Article shall apply throughout the Term of this Agreement. Except as expressly permitted in this Agreement, the Developer represents that it has not made or created, and agrees that it will not make or create or suffer to be made or created, any Transfer (as defined in Section 1.1 hereof), either voluntarily or by operation of law, without the prior written approval of the City, which consent the City may withhold at its sole discretion.
(b) Any Transfer made in contravention of this Section shall, at the City's discretion, be void and shall be deemed to be a default under this Agreement, whether or not the Developer knew of or participated in such Transfer. The HOME Loan shall automatically accelerate and be due in full upon any unauthorized Transfer.
Section 5.18 Permitted Transfers Without Prior City Approval.
The term "Transfer" shall exclude the leasing of any single Unit in the Development to an occupant in compliance with the HOME Regulatory Agreement.
Section 5.19 Permitted Transfers With Prior City Approval. (a) Except as permitted under Section 5.18, any Transfer shall be permitted only after:
(1) The City has delivered to the Developer its prior written approval of such Transfer, which approval may not be unreasonably withheld; and (2) The transferee has assumed the Developer's obligations under this Agreement by signing this Agreement or such other reasonable documentation as the City may require.
(b) Following completion of construction of the Development, the City shall not unreasonably withhold its consent to a proposed Transfer, provided that the City reasonably determines that the proposed transferee is qualified to operate the Development in compliance with the HOME Regulatory Agreement including meeting the following requirements:
(1) The proposed transferee has at least five (5) years' experience operating multifamily rental housing developments comparable to the Development; (2) The proposed transferee has no record of loan defaults, maintenance problems, housing or building code violations, or substantiated fair housing complaints at properties it has owned or operated; and
(3) The proposed transferee has satisfactory credit.
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42 Section 5.20 Allowable Preferences.
(a) The Developer shall give a preference in the rental of any of the Units in the Development to eligible households displaced by activity of the former Redevelopment Agency of the City of Modesto or the City, as provided in Health and Safety Code Section 33411.3. The preferences stated in this section are required by law and apply to the rental of Units in the Development throughout the Term.
(b) In accordance with 24 C.F.R 92.504(c)(3), so long as Borrower provides supportive housing services at the Development in conformance with the requirements of the Veterans Affairs Supportive Housing ("VASH"), notwithstanding anything to the contrary in subsection (a) above, the Borrower may provide preference to households reasonably determined by the Borrower to be VASH-eligible households, as allowed under 24 C.F.R. 92.253, for any VASH assisted units, so long as such preference does not violate nondiscrimination requirements listed in 24 C.F.R. 92.350.
(c) The conditions and obligations set forth in this Section shall survive termination of this Agreement.
Section 5.21 Affordability and Project Monitoring.
(a) Throughout the HOME Term, the Developer shall comply with all applicable record keeping and monitoring requirements set forth in (24 CFR Section 92.508) of the HOME Regulations and shall annually complete and submit to City a certification of continuing program compliance.
(b) Representatives of the City shall be entitled to enter the Property upon at least twenty-four (24) hour's notice at reasonable times to monitor compliance with this Agreement, to inspect the records of the Development with respect to the Units, and to conduct an independent audit of such records. The Developer agrees to cooperate with the City in making the Property available for such inspection. If for any reason the City is unable to obtain the Developer's consent to such an inspection, the Developer understands and agrees that the City may obtain, at the Developer's expense, an administrative inspection warrant or other appropriate legal order to obtain access to and search the Property. The Developer agrees to maintain records in a business-like manner and to make such records available to the City upon twentyfour (24) hour's notice at reasonable times. Unless the City otherwise approves, such records shall be maintained for the most recent five years until five years after the HOME Term. (c) Throughout the Term, the Developer grants the City inspection rights as set forth in Section 4.9 above, and Developer shall make best efforts to allow the City to comply with all applicable physical monitoring requirements set forth in (24 CFR Section 92.504(d) and 24 C.F.R. 92.251) of the HOME Regulations.
(d) The City will enforce a per-unit monitoring charge on all HOME assisted developments. HOME assisted developments will be charged as follows:
1-20 assisted units = $35.00 per unit/ annually
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43 20+ assisted units = $25.00 per unit/ annually
(e) The City will enforce a physical inspection charge on all HOME assisted developments. The inspection charge for HOME assisted development will be the lesser of: (1) Five Thousand Dollars ($5,000) per inspection; or (2) the actual costs incurred by the City to secure a qualified third party, independent of the Developer, to conduct the physical inspections in accordance with the requirements set forth in this Agreement, and any related staffing costs incurred by the City in association therewith.
(f) The Developer shall pay such charge within fifteen (15) days of receipt of an invoice from the City.
(g) The City reserves the right to waive or defer a portion of the monitoring charge if a development is unable to pay these costs. All waivers must be submitted in writing, with adequate supporting financial documentation, for review by the City Manager.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER
Section 6.1 Representations and Warranties.
The Developer hereby represents and warrants to the City as follows:
(a) Good Standing. The Developer is a duly organized California public body corporate and politic validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted.
(b) Corporate Authority. The Developer has full power, and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the HOME Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Agreement and the HOME Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of the Developer, and all actions required under the Developer's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the HOME Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. (d) Valid Binding Agreements. This Agreement and the HOME Loan Documents and all other documents or instruments which have been executed and delivered #21..
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44 pursuant to, or in connection with, this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of the Developer, enforceable against the Developer in accordance with their respective terms. (e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the HOME Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on the Developer, or any provision of the organizational documents of the Developer, or will conflict with or constitute a breach of or a default under any agreement to which the Developer is a party, or will result in the creation or imposition of any lien upon any assets or property of the Developer, other than liens established pursuant hereto.
(f) Compliance With Laws; Consents and Approvals. The Developer represents and warrants that the construction of the Development will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency. (g) Pending Proceedings. The Developer is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of the Developer, and its general partner respectively, threatened against or affecting the Developer, respectively, or the Property, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to the Developer, materially affect the Developer's ability to repay the HOME Loan or impair the security to be given to the City pursuant hereto. (h) Title to Land. At the time of recordation of the HOME Deed of Trust, the Developer will have good and marketable fee title to the Property and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than liens for current real property taxes and assessments not yet due and payable, the liens in favor of the City or approved in writing by the City. (i) Financial Statements. The financial statements of the Developer and other financial data and information furnished by the Developer to the City fairly present the information contained therein. As of the date of this Agreement, there has not been any adverse, material change in the financial condition of the Developer from that shown by such financial statements and other data and information.
(j) Sufficient Funds. The Developer holds sufficient funds and/or binding commitments for sufficient funds to complete the acquisition and construction of the Development.
(k) Taxes. The Developer has filed all federal and other material tax returns and reports required to be filed, and has paid all federal and other material taxes, assessments, #21..
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45 fees and other governmental charges levied or imposed upon it or its income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against the Developer that could, if made, be reasonably expected to have a material adverse effect upon the Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Developer and its subsidiaries, taken as a whole, which would be expected to result in a material impairment of the ability of the Developer to perform under any HOME Loan Document to which it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability against the Developer of any HOME Loan Document.
ARTICLE 7
TERMINATION, DEFAULT AND REMEDIES
Section 7.1 Events of Default.
Each of the following shall constitute a "Default" under this Agreement:
(a) Failure to Satisfy Predevelopment Requirements. Failure of the Developer to satisfy any of the requirements set forth in Article 3 subject to notice and cure pursuant to Section
7.1(f) below;
(b) Failure to Make Payment. Failure of the Developer to repay the principal and any interest on the HOME Loan that is due and payable to the City pursuant to this Agreement following written notice by the City of such failure and fifteen (15) days opportunity to cure;
(c) Failure to Commence or Complete Construction Work. Failure of the Developer to commence and prosecute to completion, the Construction Work within the time frames set forth in this Agreement;
(d) Failure to Comply with the Management Plan. Failure to comply with the Management Plan approved by the City and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to the Developer, which notice provides reasonable detail of the default and the required cure for such default; (e) Failure to Comply with the Marketing Plan. Failure to comply with the Marketing Plan approved by the City and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to the Developer, which notice provides reasonable detail of the default and the required cure for such default; (f) Breach of Covenants. Failure of the Developer to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the HOME Loan Documents, and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to the Developer (which notice shall provide reasonable detail of the default and required cure) or, if the breach cannot be cured within thirty (30) days, #21..
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46 the Developer shall not be in breach so long as the Developer is diligently undertaking to cure such breach and such breach is cured within sixty (60) days; provided, however, that if a different period or notice requirement is specified under any other section of this Article 7, the specific provisions shall control;
(g) Default Under Other Loans. A default is declared under any Approved Financing by the lender of such Approved Financing (subject to applicable notice and cure); (h) Insolvency. A court having jurisdiction shall have made or entered any decree or order: (1) adjudging the Developer to be bankrupt or insolvent; (2) approving as properly filed a petition seeking reorganization of the Developer or seeking any arrangement for the Developer under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction; (3) appointing a receiver, trustee, liquidator, or assignee of the Developer in bankruptcy or insolvency or for any of their properties; (4) directing the winding up or liquidation of the Developer, if any such decree or order described in clauses (1) to (4), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days; or (5) the Developer shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (1) to (4), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note;
(i) Assignment; Attachment. The Developer shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the HOME Loan Documents; (j) Suspension; Dissolution. The Developer shall have: (1) the operation of their business voluntarily or involuntarily suspended by the State of California, (2) voluntarily stop or terminate the operation of its business; (3) if the Developer is a partnership, the partnership shall have the operation of the partnership voluntarily or involuntarily dissolved, suspended or terminated by the State of California;
(k) Liens on Property and the Development. There shall be filed any claim of lien (other than liens approved in writing by the City) against the Development, the Property, or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the HOME Loan and the continued maintenance of said claim of lien or notice to withhold for a period of thirty (30) days without discharge or satisfaction thereof or provision therefore (including, without limitation, the posting of bonds) satisfactory to the City; (l) Condemnation. The condemnation, seizure, or appropriation by any public agency of all or the substantial part of the Property and the Development, except condemnation by the City, shall cause the HOME Loan to accelerate but shall not be a Default; #21..
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47 (m) Unauthorized Transfer. Any Transfer other than as permitted by Sections 5.18 and 5.19;
(n) Representation or Warranty Incorrect. Any representation or warranty of the Developer, respectively, contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the City in connection with any of the HOME Loan Documents, proves to have been incorrect in any material and adverse respect when made and which default cannot be cured within thirty (30) days after receipt of written notice thereof from the City to the Developers; and/or
Section 7.2 Remedies. The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will either at the option of the City or automatically where so specified, relieve the City of any obligation to make or continue the HOME Loan and shall give the City the right to proceed with any and all remedies set forth in this Agreement and the HOME Loan Documents, including but not limited to the following:
(a) Acceleration of Note. The City shall have the right to cause all indebtedness of the Developer to the City under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. Developer waives all right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured Party under the law including the Uniform Commercial Code, including foreclosure under the HOME Deed of Trust. The Developer shall be liable to pay the City on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incurred by the City in connection with the collection of the HOME Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the HOME Loan;
(b) Specific Performance. The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require the Developer to perform its obligations and covenants under the HOME Loan Documents or to enjoin acts or things which may be unlawful or in violation of the provisions of the HOME Loan Documents, except that such remedy shall not be available to the City until the Commencement of Construction; (c) Right to Cure at the Developer's Expense. The City shall have the right (but not the obligation) to cure any monetary default by the Developer under a loan other than the HOME Loan. The Developer agrees to reimburse the City for any funds advanced by the City to cure a monetary default by the Developer upon demand therefore, together with interest thereon at the lesser of the maximum rate permitted by law or ten percent (10%) per annum from the date of expenditure until the date of reimbursement; Section 7.3 Right of Contest.
The Developer shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall #21..
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48 be prosecuted diligently and in a manner unprejudicial to the City or the rights of the City hereunder.
Section 7.4 Remedies Cumulative.
No right, power, or remedy given to the City by the terms of this Agreement or the HOME Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against the Developer and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.
Section 7.5 Survival.
Upon termination or expiration of this Agreement, those provisions of this Agreement that recite that they survive termination of this Agreement shall remain in effect and be binding upon the parties notwithstanding such termination.
ARTICLE 8
GENERAL PROVISIONS
Section 8.1 Relationship of Parties.
Nothing contained in this Agreement shall be interpreted or understood by any of the parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City, the Developer or the Developer's agents, employees or contractors, and the Developer shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. The Developer has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the construction and operation of the Development, the Developer shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. The Developer agrees to be solely responsible for its own acts and those of its agents and employees.
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49 Section 8.2 No Claims.
Nothing contained in this Agreement shall create or justify any claim against the City, by any person that the Developer or its general partners may have employed or with whom the Developer may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the construction or operation of the Development, and the Developer shall include similar requirements in any contracts entered into for the construction or operation of the Development.
Section 8.3 Amendments.
Subject to Sections 8.19 and 8.20, no alteration or variation of the terms of this Agreement shall be valid unless made in writing by the Parties and approved by the City Council.
Section 8.4 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the Parties with respect to the City.
Section 8.5 Indemnification.
Except as directly caused by the City's gross negligence or willful misconduct, the Developer agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the City) the City and its council members, officers, employees, representatives, agents, successors and assigns, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of: (1) the Developer's performance or non-performance of its obligations under this Agreement; (2) the Developer's ownership of the Property and Development; (3) the marketing, rental and operation of the Development; or (4), or any documents executed by the Developer in connection with the Property or Development. The provisions of this Section shall survive termination of this Agreement.
Section 8.6 Non-Liability of City Officials, Employees and Agents.
No council member, official, employee or agent of the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City, or for any amount which may become due to the Developer or its successor or on any obligation under the terms of this Agreement. No director, officer, employee or agent of the Developer shall be personally liable to the City, or any successor in interest, in the event of any Default or breach by the Developer, or for any amount which may become due to the City or its successor or on any obligation under the terms of this Agreement.
Section 8.7 No Third Party Beneficiaries.
There shall be no third party beneficiaries to this Agreement. #21..
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50 Section 8.8 Action by the City.
(a) Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent, request, extension of time, waiver of condition, termination, or other action by the City is required or permitted under this Agreement, such action may be given, made, or taken by the City Manager without further approval by the City Council, and any such action shall be in writing. The amount of the HOME Loan may not be increased without approval of the City Council.
(b) Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that a sole discretion standard applies. The City Manager is also hereby authorized to approve, on behalf of the City, requests by the Developer for reasonable extensions of time deadlines set forth in this Agreement. The City Manager shall not unreasonably delay in reviewing and approving or disapproving any proposal by the Developer made in connection with this Agreement.
Section 8.9 Waivers.
Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of the Developer or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to the Developer to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by the Developer shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers.
Section 8.10 Notices, Demands and Communications.
Formal notices, demands, and communications between the City and the Developer shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the City and the Developer as follows:
City: City of Modesto
1010 Tenth Street, Suite 4400
Modesto, CA 95354
Attn: Community Development Manager
Developer: Modesto Homekey LP
c/o UP Holdings California, LLC
6083 N. Figarden Drive, #656
Fresno, CA 93722
Attention: Cullen J. Davis
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51 Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt for delivery or refusal of delivery. Copies of notices sent to the Developer shall also be sent to any limited partner of the Developer who requests such notices in writing and provides its address to the City.
Section 8.11 Applicable Law and Venue.
This Agreement shall be governed by and construed in accordance with California law.
Any action brought claiming a breach of this Agreement or interpreting this Agreement shall be brought and venued in Stanislaus County, California.
Section 8.12 Parties Bound.
Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their heirs, executors, administrators, legal representatives, successors and assigns. This Agreement is intended to run with the land and shall bind the Developer and its successors and assigns in the Property and the Development for the entire Term, and the benefit hereof shall inure to the benefit of the City and its successors and assigns.
Section 8.13 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorney's fees and costs of suit from the other Party.
Section 8.14 Severability.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
Section 8.15 Extensions.
(a) Force Majeure. In addition to specific provisions of this Agreement, performance by any Party shall not be deemed to be in default where delays or defaults are due to to war, insurrection, strikes, lock-outs or other labor disturbances, one or more acts of a public enemy, war, riot, sabotage, blockade, embargo, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of transportation, court order, delays or failures of performance by any governmental authority or utility company (other than the acts or failure to act of the City and so long as the Party seeking the extension has adequately complied with the applicable processing requirements of such governmental authority or utility company), delays resulting from changes in any applicable laws, rules, regulations, ordinances or codes, or a change in the interpretation thereof by any governing body with jurisdiction, or any other cause (other than lack of funds of #21..
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52 the Developer or the Developer's inability to finance the construction of the Development) beyond the reasonable control or without the fault of the Party claiming an extension of time to perform or an inability of performance. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and the Party granting the extension agrees to the extension in writing. In no event shall the City be required to agree to cumulative delays in excess of one hundred eighty (180) days.
Section 8.16 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in subsection (b) below who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person's tenure. Developer shall exercise due diligence to ensure that the prohibition in this Section is followed.
(b) The conflict of interest provisions of subsection (a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the City, or any person related within the third (3rd) degree of such person.
(c) In accordance with California Government Code Section 1090 and the Political Reform Act, California Government Code section 87100 et seq., no person who is a director, officer, partner, trustee or employee or consultant of the Developer, or immediate family member of any of the preceding, shall make or participate in a decision, made by the City or a City board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or Developer. Interpretation of this section shall be governed by the definitions and provisions used in the Political Reform Act, California Government Code Section 87100 et seq., its implementing regulations manual and codes, and California Government Code Section 1090. (d) The Developer shall comply with the conflict of interest provisions set forth in 24 C.F.R. Section 92.356.
Section 8.17 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. #21..
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53 Section 8.18 Multiple Originals; Counterpart.
This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
Section 8.19 City Approval.
Whenever this Agreement calls for City approval, consent, or waiver, the written approval, consent, or waiver of the City Manager shall constitute the approval, consent, or waiver of the City, without further authorization required from the City Council. The City hereby authorizes the City Manager to deliver such approvals or consents as are required by this Agreement, to execute estoppel certificates concerning the status of the HOME Loan and the existence of the Developer defaults under the Loan Documents, and to waive requirements under this Agreement, on behalf of the City. Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that a sole discretion standard applies. The City Manager is also hereby authorized to approve, on behalf of the City, requests by the Developer for reasonable extensions of time deadlines set forth in this Agreement. The City shall not unreasonably delay in reviewing and approving or disapproving any proposal by the Developer made in connection with this Agreement.
Section 8.20 Operating Memoranda.
(a) The Parties acknowledge that the provisions of this Agreement require a close degree of cooperation, and that new information and future events may demonstrate that changes are appropriate with respect to the details of performance of the parties under this Agreement. The parties desire, therefore, to retain a certain degree of flexibility with respect to the details of performance of those items covered in general terms under this Agreement. If and when, from time to time during the term of this Agreement, the parties find that refinements or adjustments regarding details of performance are necessary or appropriate, they may effectuate such refinements or adjustments through a memorandum (individually, an "Operating Memorandum", and collectively, "Operating Memoranda") approved by the parties which, after execution by both parties, shall be attached to this Agreement as addenda and become a part hereof.
(b) Operating Memoranda may be executed on the City's behalf by its City Manager, or the City Manager's designee. Operating Memoranda shall not require prior notice or hearing, and shall not constitute an amendment to this Agreement. Any substantive or significant modifications to the terms and conditions of performance under this Agreement shall be processed as an amendment of this Agreement in accordance with Section 8.3 hereof, and must be approved by the City Council.
Section 8.21 Assignment by City.
The City may assign its rights and obligations under the HOME Loan Documents to any other public entity without the consent of the Developer. [Remainder of Page Left Intentionally Blank]
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HOME Loan Agreement
Signature Page
3524731.1
WHEREFORE, this HOME Loan Agreement is executed by the Developer and City, and is effective as of the date first above written.
DEVELOPER:
MODESTO HOMEKEY LP,
a California limited partnership
By: ______________________________________
Executive Director
Date: ______________________________________
[City Signature Follows]
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HOME Loan Agreement
Signature Page
3524731.1
CITY:
CITY OF MODESTO, a California charter city
By: _____________________________________
Joseph Lopez, City Manager
Date: ______________________________________
ATTEST:
________________________________
Diane Nayares-Peres, CMC, City Clerk
APPROVED AS TO FORM:
By: ___________________________
Jose M. Sanchez, Acting City Attorney
APPROVED AS TO RISK MANAGEMENT:
By: _________________________________
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EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the State of California, Stanislaus County, City of Modesto, and is described as follows:
LOTS 6, 7, 8, 9, 10, 11, 12 AND 13 IN BLOCK 906 OF "AMENDED MAP OF HANEY TRACT", AS PER MAP FILED OCTOBER 10, 1950 IN VOLUME 17 OF MAPS AT PAGE 15, STANISLAUS COUNTY RECORDS.
Assessor’s Parcel Number (APN): 115-002-004-000
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B-1
EXHIBIT B
FINAL FINANCING PLAN
Source Amount
Modesto HOME-ARP $ 2,800,000
Modesto HOME $ 673,712
Modesto Commitment $ 3,473,712
Other Local Commitments
Stanislaus County Community System of Care HHAP $ 1,775,077 Health Plan of San Joaquin HHIP $ 2,150,000
Other Local Commitments $ 3,925,077
Homekey Round 3 Award
Capital Award (Acquisition and/or Rehab) $14,950,000
Relocation Costs $ 750,000
Operating Subsidy $ 359,562
Homekey Commitment $ 16,059,562
Developer Commitments $ 27,573
Total $23,485,923
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B-2
EXHIBIT C
FEDERAL AWARD IDENTIFICATION INFORMATION
i) Participant’s name:
ii) Participant’s DUNS:
iii) Federal Award Identification Number (FAIN):
iv) Federal Award Date:
v) Subaward Period of Performance Start and End Date:
vi) Amount of Federal Funds Obligated by this action by the CITY entity to the Participant:
vii) Total Amount of Federal Funds Obligated to the Participant by the CITY including the current obligation:
viii) Total Amount of the Federal Award committed to the Participant by the CITY:
ix) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA):
x) Name of Federal awarding agency:
xi) Contact information for CITY official responsible for awarding funding:
xii) CFDA Number and Name:
xiii) Identification of whether the award is R&D:
xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged per 24 CFR 200.414 Indirect (F&A) costs):
3524731.1
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Recording requested by and when recorded
mail to:
City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
APN: 015-002-004 Space above this line for Recorder’s use.
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(HOME Loan – 710 N 9th Street)
THIS HOME DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “HOME Deed of Trust”) is entered into as of ______________, 2024, by Modesto Homekey LP, a California limited partnership (“Trustor”) to _________________ (“Trustee”), for the benefit of the City of Modesto, a California charter city (“Beneficiary”).
RECITALS
A. A. Trustor owns fee simple title to owns that certain real property located on 710 N 9th Street, in the City of Modesto, California, also known as Stanislaus County Assessor Parcel Number 015-002-004, as further described in Exhibit A, attached hereto and incorporated herein (the “Property”). (the “Land”). Trustor intents to rehabilitate and convert an existing motel into 56 residential units on the Property (the “Project”) to serve as permanent supportive housing for individuals experiencing Homelessness. (the “Project”).
B. Beneficiary and Trustor have entered into that certain HOME Loan Agreement dated as of ____________, 2024 (the “Home Loan Agreement”) pursuant to which Beneficiary will provide a loan to Trustor in the amount of up Six Hundred and Seventy-Three Thousand and Seven Hundred and Twelve Dollars ($673,712) in HOME Investment Partnership Funds (“Loan”) for the purpose of partially financing the construction of the Project. Trustor has issued to Beneficiary a secured promissory note dated as of the date hereof (the “Note”) to evidence Trustor’s obligation to repay the Loan.
C. This Home Deed of Trust, the Home Loan Agreement, the Note, and the Home Regulatory Agreement (defined below) are collectively referred to herein as the “HOME Loan Documents.”
D. As a condition precedent to the making of the HOME Loan, Beneficiary has required that Trustor enter into this HOME Deed of Trust and grant to Trustee for the benefit of #21..
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Beneficiary, a lien and security interest in the Project and in Trustor’s fee simple interest in the Land to secure repayment of the Note and performance of Trustor’s obligations under the Loan Agreement and the other HOME Loan Documents.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.
1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired:
a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land (“Improvements”);
b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, “Appurtenances”); c. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, “Equipment”);
d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, “Leases”), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, “Rents”); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding (“Proceeds”);
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f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor (“Gross Revenues”);
g. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, “Plans”); and
h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, “Financing”).
All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the “Property.”
2. Obligations Secured. This HOME Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the “Secured Obligations”): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Agreement, the Grant Agreement, the HOME Regulatory and Declaration of Restrictive Covenants dated as of the date hereof, executed by and between City and Trustor and recorded substantially concurrently herewith (the “HOME Regulatory Agreement”) or the other HOME Loan Documents; (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this HOME Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this HOME Deed of Trust or any other City Document as such may be modified, supplemented, amended, renewed or extended.
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, #21..
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shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this HOME Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this HOME Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary’s written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month.
4. Security Agreement. The parties intend for this HOME Deed of Trust to create a lien on the Property, and an assignment of the Rents and Leases, all in favor of Beneficiary, subject to the rights of any beneficiaries under deeds of trust senior in priority to this HOME Deed of Trust (“Senior Deeds of Trust”). The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This HOME Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the “UCC”), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements.
5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this HOME Deed of Trust or the rights or obligations of the parties under it.
Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this HOME Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this HOME Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment #21..
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items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary’s lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government.
6. Fixture Filing. Subject to the rights of beneficiaries under Senior Deeds of Trust, this HOME Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this HOME Deed of Trust is to be filed in the real estate records of Stanislaus County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This HOME Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC.
7. Trustor’s Representations, Warranties and Covenants; Rights and Duties of the Parties.
7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a fee simple interest in the Land and the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the HOME Loan Documents or otherwise approved in writing by Beneficiary (“Permitted Encumbrances”), this HOME Deed of Trust creates a valid first lien on Trustor’s entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of any deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor’s chief executive office is specified in Section 10.2.
Trustor further represents and warrants that this HOME Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor’s #21..
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knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor’s ownership of the Property.
7.2 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the HOME Loan Documents in accordance with the respective terms thereof.
7.3 Use of Loan Proceeds; Preservation and Maintenance of Property; Compliance with Laws. Trustor covenants that it shall use the proceeds of the Loan (the “Loan Proceeds”) solely for purposes authorized by the HOME Loan Documents. Trustor shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained.
Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary’s consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and Improvements solely for purposes authorized by the HOME Loan Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the HOME Loan Documents.
7.4 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if any Transfer (as defined in the Loan Agreement) of the Property, any part thereof or any interest therein occurs in violation of the requirements of the HOME Loan Documents. If any such Transfer occurs in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this HOME Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period.
7.5 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the HOME Loan Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan Proceeds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection at any reasonable time by Beneficiary following two business days prior notice.
7.6 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may #21..
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become) a lien on all or part of the Property. Trustor may, at Trustor’s expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property.
7.7 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this HOME Deed of Trust.
7.8 Hazard, Liability and Workers’ Compensation Insurance. At all times during the term hereof, Trustor shall at Trustor’s expense, maintain insurance policies in accordance with the requirements set forth in the HOME Loan Documents. Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may reasonably require, including without limitation copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required pursuant to the HOME Loan Documents, and such certificates (or policies) shall provide that at least thirty (30) days’ prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy. If any insurance policy required pursuant to the HOME Loan Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor’s expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary.
7.9 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Land that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Land or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor’s agents have disclosed to Beneficiary all #21..
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material facts concerning the Property.
7.10 Hazardous Materials.
(a) Trustor shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances," hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as are used in construction of projects of the improvements on the Property or as may be customarily kept and used in and about residential property.
(b) Trustor shall immediately advise Beneficiary in writing if at any time it receives written notice of: (1) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, ("Hazardous Materials Law"); (2) all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (1) and (2) above are hereinafter referred to as "Hazardous Materials Claims"); and (3) Trustor's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property" (as defined in California Health and Safety Code Section 25117.4) under the provision of California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. (c) Beneficiary has the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall indemnify and hold harmless Beneficiary and its boardmembers, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (1) all foreseeable consequential damages; (2) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (3) all reasonable costs and expenses incurred by Beneficiary in connection with clauses (1) and (2), including but not limited to reasonable attorneys' fees and consultant's fees. This indemnification applies whether or not any government agency has issued a cleanup order.
Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (i) losses attributable to diminution in the value of the Property; #21..
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(ii) loss or restrictions or use of rentable space on the Property; (iii) adverse effect on the marketing of any rental space on the Property; and (iv) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the property and surrounding properties). (d) Without Beneficiary's prior written consent, which may not be unreasonably withheld, Trustor may not take any remedial action in response to the presence of any Hazardous Materials on, under, or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary's reasonable judgment, impairs the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent is not necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain Beneficiary's consent before taking such action, provided that in such event Trustor notifies Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if either: (1) a particular remedial action is ordered by a court of competent jurisdiction; (2) Trustor will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (3) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary's security hereunder; or (4) the action has been agreed to by Beneficiary. (e) The Trustor hereby acknowledges and agrees that: (1) this Article is intended as the Beneficiary's written request for information (and the Trustor's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5; and (2) each representation and warranty in this Deed of Trust or any of the other Loan Documents (together with any indemnity applicable to a breach of any such representation and warranty) with respect to the environmental condition of the property is intended by the Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736.
(f) In the event that any portion of the Property is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to: (1) waive its lien on such environmentally impaired or affected portion of the Property; and (2) exercise (i) the rights and remedies of an unsecured creditor, including reduction of its claim against the Trustor to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Trustor will be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any #21..
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portion of the Property and the Trustor knew or in the exercise of reasonable diligence should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the Beneficiary in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the lesser of ten percent (10%) or the maximum rate permitted by law, until paid, will be added to the indebtedness secured by this Deed of Trust and will be due and payable to the Beneficiary upon its demand made at any time following the conclusion of such action.
7.11 Notice of Claims; Defense of Security; Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within five (5) business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three business days of Trustor’s receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof.
b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this HOME Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims.
c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this HOME Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance.
Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this HOME Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.17 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this HOME Deed of Trust, including reasonable attorneys’ fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title.
d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property.
7.12 Indemnification. Trustor shall indemnify, defend (with counsel reasonably #21..
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acceptable to Beneficiary), and hold harmless the Indemnitees (as defined in Section 7.10) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor’s covenants under any City Document, (b) any representation by Trustor in any City Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any City Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this HOME Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this HOME Deed of Trust.
7.13. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this HOME Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this HOME Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.13, and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary.
7.14 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, and notwithstanding anything contained in any of the HOME Loan Documents, unless Beneficiary and Trustor otherwise agree in writing, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof shall be applied to restoration or repair of the Property, provided Trustor determines that such restoration or repair is economically feasible and there is no default under any City Document that is continuing beyond the expiration of all applicable cure periods. If Trustor determines that such restoration or repair is not economically feasible or if a default exists after expiration of all applicable cure periods, the insurance proceeds shall be applied to the sums secured by this HOME Deed of Trust, with the excess, if any, paid to Trustor. In the event funds for such work are insufficient, Beneficiary may, in its sole discretion and subject to the approval of Beneficiary’s governing board, advance such additional funds as may be necessary to allow the Property to be repaired or restored, and may add the amount thereof to the principal balance of the Note. If the Property is abandoned by Trustor, or if Trustor fails to respond to Beneficiary within 30 days from the date notice is mailed by Beneficiary to Trustor that the insurance carrier #21..
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offers to settle a claim for insurance benefits, Beneficiary is authorized to collect and apply the insurance proceeds at Beneficiary's option either to restoration or repair of the Property or to the sums secured by this HOME Deed of Trust
7.15 Release, Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this HOME Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations.
7.16 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been satisfied in full, and upon surrender of this HOME Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this HOME Deed of Trust. The recitals in any reconveyance executed under this HOME Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof.
Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance.
7.17 Cure; Protection of Security. Beneficiary may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary may also enter the Property and/or do any and all other things which it may in its reasonable discretion consider necessary and appropriate to protect the security of this HOME Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this HOME Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary’s sole judgment is or may be senior in priority to this HOME Deed of Trust, such judgment of Beneficiary to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary.
Beneficiary may take any of the actions permitted under this Section 7.17 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this HOME Deed of Trust.
8. Default and Remedies.
8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this HOME Deed of Trust upon the occurrence of any one or more of the following events:
a. Beneficiary’s declaration of an Event of Default under any City #21..
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Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this HOME Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee;
c. If Trustor’s interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.4 hereof or if any other Transfer occurs in violation of the Loan Agreement; d. Trustor fails to maintain the insurance coverage required under the HOME Loan Documents or otherwise fails to comply with the requirements of Section 7.8 hereof and Trustor fails to cure such default within the time specified in Section 7.8; e. Subject to Trustor’s right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within ten (10) days.
f. Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this HOME Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other City Document proves to have been false or misleading in any material adverse respect when made;
g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance.
i. The holder of any other debt instrument secured by a mortgage or HOME Deed of Trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents; or
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j. Trustor fails to perform any obligation arising under this HOME Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary’s reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than ninety (90) days, or such longer period as the City may approve, following receipt of notice of default.
8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any City Document, and any other remedy existing at law or in equity or by statute, subject to the nonrecourse provisions set forth in the Note. All of Beneficiary’s rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys’ fees and costs.
a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this HOME Deed of Trust, to be due and payable immediately.
b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. c. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this HOME Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor’s or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-infact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments.
d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
e. Judicial Action. Beneficiary may bring an action in any court of #21..
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competent jurisdiction to foreclose this HOME Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this HOME Deed of Trust.
f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.
Trustor’s limited partners (the “Limited Partners”) shall have the right to cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor. Provided that Beneficiary has been given written notice of the address for delivery of notices to the Limited Partners, Beneficiary shall provide any notice of default hereunder to the Limited Partners concurrently with the provision of such notice to Trustor, and as to the Limited Partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Section 10.2.
8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this HOME Deed of Trust.
Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this HOME Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this HOME Deed of Trust.
Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary’s request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale.
After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys’ fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.
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Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the HOME Loan Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note.
At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law.
Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations:
a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.11(c); and
b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose.
8.4 Trustor’s Right to Reinstate. Notwithstanding Beneficiary’s acceleration of the sums secured by this HOME Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this HOME Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this HOME Deed of Trust or at any time prior to entry of a judgment enforcing this HOME Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this HOME Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this HOME Deed of Trust, and in enforcing Beneficiary’s and Trustee’s remedies as provided herein, including, but not limited to, reasonable attorney’s fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this HOME Deed of Trust, Beneficiary’s interest in the Property and Trustor’s obligation to pay the sums secured by this HOME Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this HOME Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.
Nothing contained in Sections 8.3 and 8.4 is intended to expand upon or limit the rights of Trustor and Beneficiary under California law regarding Beneficiary’s exercise of the power of sale or Trustor’s reinstatement rights.
9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, #21..
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notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this HOME Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.
10. Miscellaneous Provisions.
10.1 Additional Provisions. The HOME Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this HOME Deed of Trust and the Property.
10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary’s address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this HOME Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon receipt;
b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail;
c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof.
Beneficiary: City of Modesto
Community & Economic Development Department
1010 Tenth Street, Suite 4400
P O Box 642
Modesto, CA 95353
Attn: Community Development Manager
Trustor: Modesto Homekey LP
c/o UP Holdings California, LLC
6083 N. Figarden Drive, #656
Fresno, CA 93722
Attention: Cullen J. Davis
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Trustee: ____________
____________
____________
10.3 Binding on Successors. The terms, covenants and conditions of this HOME Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive the provisions of Section 7.4.
10.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of Stanislaus County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein.
10.5 Attorneys’ Fees and Costs. In any action or proceeding to foreclose this HOME Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys’ fees.
10.6 Governing Law; Severability; Interpretation. This HOME Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws.
Trustor agrees that any controversy arising under or in relation to this HOME Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the “Property Jurisdiction”). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the HOME Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this HOME Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this HOME Deed of Trust. The captions used in this HOME Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this HOME Deed of Trust, whenever the context so requires, the singular number includes the plural.
10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary’s or Trustee’s consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary’s acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare #21..
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default for failure so to pay.
10.8 Action By Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary’s Executive Director or by any person who shall have been designated by Beneficiary’s Executive Director, without further approval by the governing board of Beneficiary. Beneficiary shall use reasonable best efforts to respond to requests for any such approval, notice, direction, or consent in a timely manner. In any approval, consent, or other determination by Beneficiary required hereunder, Beneficiary shall act reasonably and in good faith.
10.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor’s obligations under this Deed of Trust.
10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust.
IN WITNESS WHEREOF, Trustor has executed this
Deed of Trust as of the date first written above.
DEVELOPER:
MODESTO HOMEKEY LP,
a California limited partnership
By: ______________________________________
Executive Director
Date: ______________________________________
SIGNATURES MUST BE NOTARIZED.
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Exhibit A
LAND
(Attach legal description.)
The land is situated in the State of California, Stanislaus County, City of Modesto, and is described as follows:
LOTS 6, 7, 8, 9, 10, 11, 12 AND 13 IN BLOCK 906 OF "AMENDED MAP OF HANEY TRACT", AS PER MAP FILED OCTOBER 10, 1950 IN VOLUME 17 OF MAPS AT PAGE 15, STANISLAUS COUNTY RECORDS.
Assessor’s Parcel Number (APN): 115-002-004-000
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California )
County of Stanislaus )
On_____________ before me, _____________________________, Notary Public, , personally appeared, ___________________________________, who proved to me the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_____________________________
3525764.1
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3525741.1 1
SECURED PROMISSORY NOTE
(HOME Loan – 710 N. 9th Street)
$673,712 Modesto, California
_________,2024
FOR VALUE RECEIVED, the undersigned Modesto Homekey LP, a California limited partnership ("Borrower"), hereby promises to pay to the order of the City of Modesto, a municipal corporation ("Holder"), the principal amount of up to Six Hundred and Seventy-Three Thousand and Seven Hundred and Twelve Dollars ($673,712), subject to Section 2.6 of the Loan Agreement, plus interest thereon pursuant to Section 2 below.
1. Borrower's Obligation. This Secured Promissory Note (the "Note") evidences Borrower's obligation to repay Holder the principal amount of Six Hundred and Seventy-Three Thousand and Seven Hundred and Twelve Dollars ($673,712) or such other amount as may be advanced by the Holder pursuant to the HOME Loan Agreement between Borrower and Holder dated as of ___________,2024, as such may be amended from time to time (the "Loan Agreement"), together with all interest on the outstanding principal balance in accordance with the terms and conditions described herein. Borrower’s obligation under this Note are secured by that certain HOME Deed of Trust dated as of the date hereof executed by Borrower for the benefit of Holder and encumbering the property described therein. All capitalized terms used but not defined in this Note have the meanings set forth in the Loan Agreement.
2. Interest.
(a) Subject to the provisions of subsection (b) below, outstanding principal balance of the Loan shall bear interest at a rate of zero percent (3%). (b) In the event of a Default, interest on the HOME Loan shall begin to accrue, as of the date of Default, and continuing until such time as HOME Loan funds are repaid in full or the Default is cured, at the default rate of the lesser of ten percent (10%), compounded annually, or the highest rate permitted by law.
3. Term and Repayment Requirements. Borrower shall repay the amount due hereunder as follows:
(a) Annual Payments. Commencing on the later of: (i) April 1 following the Completion Date, or (ii) April 1, 2026, and on April 1 of each year thereafter, through the end of the HOME Term, the Developer shall make repayments of the HOME Loan in the amount of the City's Share of Residual Receipts. Payment of the City's Share of Residual Receipts shall be credited first against accrued interest and then against outstanding principal, and shall be accompanied by the Developer's report of Residual Receipts (including an independent auditor's report regarding the auditor's review of Annual Operating Expenses). The Developer shall provide the City with any documentation reasonably requested by the City to substantiate the Developer's determination of Residual Receipts.
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(b) Due in Full. Except as otherwise provided for in the Loan Agreement, the unpaid principal balance hereunder, together with accrued interest thereon, is due and payable no later than the date that is the thirtieth (30th) anniversary of the Completion Date (as defined in the Loan Agreement), but in no event later than December 31, 2056. (c) Right to Prepay. The Developer shall have the right to prepay the HOME Loan at any time without premium or penalty.
(d) Compliance with Loan Agreement. Except as otherwise provided herein, this Note is due and payable as set forth in Section 2.7 of the Loan Agreement.
4. No Assumption. This Note is not assumable by the successors and assigns of Borrower without the prior written consent of Holder, except as provided in the Loan Agreement.
5. Security. This Note, with interest, is secured by the HOME Deed of Trust. Upon execution, the HOME Deed of Trust will be recorded in the official records of Stanislaus County, California. Upon recordation of the HOME Deed of Trust, this Note will become nonrecourse to Borrower, pursuant to and except as provided in Section 2.10 of the Loan Agreement which section is hereby incorporated into this Note. The terms of the HOME Deed of Trust are hereby incorporated into this Note and made a part hereof.
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the United States of America to Holder at City of Modesto, 1010 Tenth Street, Suite 4400, Attn:
Community Development Manager, or to such other place as Holder may from time to time designate.
(b) All payments on this Note shall be without expense to Holder, and Borrower agrees to pay all costs and expenses, including re-conveyance fees and reasonable attorney's fees of Holder, incurred in connection with the payment of this Note and the release of any security hereof.
(c) Notwithstanding any other provision of this Note, or any instrument securing the obligations of Borrower under this Note, if, for any reason whatsoever, the payment of any sums by Borrower pursuant to the terms of this Note would result in the payment of interest that exceeds the amount that Holder may legally charge under the laws of the State of California, then the amount by which payments exceed the lawful interest rate will automatically be deducted from the principal balance owing on this Note, so that in no event is Borrower obligated under the terms of this Note to pay any interest that would exceed the lawful rate. (d) The obligations of Borrower under this Note are absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever.
(e) Borrower may prepay the amounts due under this Note at any time without premium or penalty.
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7. Event of Default; Acceleration.
(a) Upon the occurrence of an Event of Default, the entire unpaid principal balance, together with all interest thereon, and together with all other sums then payable under this Note and the Deed of Trust will, at the option of Holder, become immediately due and payable without further demand.
(b) Holder's failure to exercise the remedy set forth in subsection 7(a) above or any other remedy provided by law upon the occurrence of an Event of Default does not constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other Event of Default. The acceptance by Holder of any payment that is less than the total of all amounts due and payable at the time of such payment does not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of Holder, except as and to the extent otherwise provided by law.
8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time, and that Holder may accept further security or release any security for this Note, all without in any way affecting the liability of Borrower. (b) Any extension of time for payment of this Note or any installment hereof made by agreement of Holder with any person now or hereafter liable for payment of this Note must not operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part.
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower shall be given in the manner and at the addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may therein designate.
(b) Borrower promises to pay all costs and expenses, including reasonable attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless of whether suit is filed to seek enforcement.
(c) This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.
(d) This Note shall be governed by and construed in accordance with the laws of the State of California.
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(e) The times for the performance of any obligations hereunder are to be strictly construed, time being of the essence.
(f) The Loan Documents, of which this Note is a part, contain the entire agreement between the parties as to the Loan. This Note may not be modified except upon the written consent of the parties.
[Signature Page Follows]
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Signature page
IN WITNESS WHEREOF, Borrower has executed this Promissory Note as of the day and year first above written.
BORROWER:
MODESTO HOMEKEY LP,
a California limited partnership
By: ___________________________________
_________________, Executive Director
Date: ___________________________________
3525741.1
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1 3525800.1
Recording requested by and when recorded
mail to:
City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
APN:_ 015-002-004 Space above this line for Recorder’s use.
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(HOME Loan – 710 N 9th Street)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement") is dated as of ________, 2024, and is between the City of Modesto, a California charter city (the "City"), and the Modesto Homekey LP, a California limited partnership ("Borrower").
RECITALS
A. Defined Terms used but not defined in these recitals are as defined in Article 1 of this Agreement.
B. Borrower owns fee simple title to the land located at certain real property located on 710 N 9th Street, in the City of Modesto, California, also known as Stanislaus County Assessor Parcel Number 015-002-004, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”). Borrower intends to develop 56 studio units, each of which will be rented as permanent supportive units to a low or very-low income household in compliance with the City’s Consolidated Plan priorities (the “Development”).
C. Pursuant to that certain HOME Loan Agreement by and between the City and Borrower, dated as of ______________, as such may be amended from time to time (the "Loan Agreement"), the City has made a loan of Six Hundred and Seventy-Three Thousand and Seven Hundred and Twelve Dollars ($673,712) in HOME Investment Partnership Funds ("HOME Funds") to fund costs associated with the construction and operation of the Development (the "Loan"). The City has the authority to loan the HOME Funds pursuant to 24 C.F.R. 92.205.
D. The City has agreed to make the Loan on the condition that the Property and Development be maintained and operated in accordance with restrictions concerning #21..
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affordability, operation, and maintenance that are set forth in this Agreement and in the related documents evidencing the Loan.
E. In consideration of receipt of the Loan at an interest rate substantially below the market rate, Borrower agrees to observe all the terms and conditions set forth below.
The parties therefore agree as follows.
ARTICLE 1
DEFINITIONS; EXHIBITS
1.1 Definitions. The following terms have the following meanings:
(a) "Actual Household Size" means the actual number of persons in the applicable household.
(b) "Adjusted Income" means the total anticipated annual income of all persons in the Tenant household as calculated pursuant to 24 C.F.R. 92.203(b)(1). Adjusted income includes income from all persons in the household, including nonrelated individuals. (c) "Agreement" has the meaning set forth in the first paragraph of this Agreement.
(d) "City" means the City of Modesto, a California charter city. (e) "Completion Date" means the date that all of the following have occurred:
(1) a final certificate of occupancy, or equivalent document is issued by the City to certify completion of the construction of the Development; (2) the final disbursement of HOME funds for the Development has been made; (3) the City has verified the Development complies with the property standards set forth in 24 C.F.R. 92.251; and (4) all project completion information has been entered by the City into the Integrated Disbursement and Information System (IDIS). (f) "Completion of Construction" means the date the construction of the Development is completed as evidenced by the issuance of a certificate of occupancy or equivalent document issued by the City, to certify completion of the construction of the Development.
(g) "City-Assisted Units" means the four (4) Units within the Development designated as assisted by the City pursuant to this Agreement. (h) "Deed of Trust" means the Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing of even date herewith by and among Borrower, as trustor, _______________, as trustee, and the City, as beneficiary, that will encumber the Property to secure repayment of the Loan and Borrower's performance of the covenants set forth in the documents evidencing the Loan.
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(i) "Development" has the meaning set forth in Paragraph B of the Recitals. (j) "High HOME Rent" means a monthly Rent amount not exceeding the maximum rent published by HUD for a Low Income Household for the applicable bedroom size as set forth in 24 C.F.R. 92.252(a).
(k) "HOME" means Home Investment Partnerships Act Program funded pursuant to the Cranston-Gonzales National Housing Act of 1990. (l) "HOME Funds" has the meaning set forth in Paragraph C of the Recitals. (m) "HOME Regulations" means the regulations set forth in 24 C.F.R. Part 92. (n) "HOME Term" means the period beginning on the date of this Agreement and ending on the twentieth (20th) anniversary of the date of this Agreement. After the expiration of the HOME Term, for the purposes of the HOME Regulations, the Development will no longer be considered an existing HOME assisted rental project. (o) "HUD" means the United States Department of Housing and Urban Development.
(p) "Loan" has the meaning set forth in Paragraph C of the Recitals. (q) "Loan Agreement" has the meaning set forth in Paragraph C of the Recitals.
(r) "Loan Documents" means the documents executed by Borrower evidencing the Loan including this Agreement, the Note, Deed of Trust, and the Loan Agreement.
(s) "Low HOME Rent" means a monthly Rent amount not exceeding the maximum rent published by HUD for a Very Low Income Household for the applicable bedroom size as set forth in 24 C.F.R. 92.252(b).
(t) "Low Income Household" means a Tenant household with an Adjusted Income that does not exceed eighty percent (80%) of Median Income, with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than eighty percent (80%) of Median Income on the basis of HUD findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes, as such definition may be amended pursuant to 24 C.F.R. Section
92.2. An individual who is a student that is ineligible to receive Section 8 assistance under 24 C.F.R. 5.612, and thus ineligible to receive any type of HOME assistance, shall not qualify as a Low Income Household.
(u) "Low Income Units" means the Units which, pursuant to Section 2.1(b) below, are required to be occupied by Low Income Households. #21..
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(v) "Management Agent" has the meaning set forth in Section 5.2. (w) "Median Income" means the median gross yearly income, adjusted for Actual Household Size as specified herein, in the County of Stanislaus, California, as published from time to time by HUD. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the City shall provide Borrower with other income determinations that are reasonably similar with respect to methods of calculation to those previously published by HUD.
(x) "Note" means the promissory note, dated as of January __, 2024, that evidences Borrower's obligation to repay the Loan, as such may be amended form time to time. (y) "Property" has the meaning set forth in Paragraph B of the Recitals. (z) "Rent" means the total monthly payments by the Tenant of a Unit for the following: (1) use and occupancy of the Unit and land and associated facilities, including parking; (2) any reasonable and customary separately charged fees or service charges assessed by Borrower which are required of all Tenants which meet the requirements under 24 C.F.R.
92.214(b)(3), other than security deposits; (3) the City-approved utility allowance, calculated pursuant to 24 C.F.R. 92.252(d), for the cost of an adequate level of service for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service or cable TV; and (4) any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than Borrower, and paid by the Tenant. In no event shall the Rent of a City-Assisted Unit exceed the amount approved by the City pursuant to Section 2.2 hereof. (aa) "Services Provider" has the meaning set forth in Section 5.6. (bb) "Tenant" means the tenant household that occupies a Unit in the Development.
(cc) "Tenant Services" has the meaning set forth in Section 5.6. (dd) "Term" means the term of this Agreement which commences as of the date of this Agreement, and unless sooner terminated pursuant to the terms of this Agreement, expires on the date fifty-five (55) years from the Completion Date, but in no event later than December 31, 2078 (subject to extensions agreed upon by the Partners). (ee) "Unit(s)" means one (1) or more of the units in the Development. (ff) "Very Low Income Household" means a household with an Adjusted Income that does not exceed fifty percent (50%) of Median Income, with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than fifty percent (50%) of Median Income on the basis of HUD findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes, as set forth in 24 C.F.R. Section 92.2. An individual who is a student that is #21..
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ineligible to receive Section 8 assistance under 24 C.F.R. 5.612, and thus ineligible to receive any type of HOME assistance, shall not qualify as a Very Low Income Household. (gg) “Very Low Income Units" means the Units which, pursuant to Section
2.1(a) below, are required to be occupied by Very Low Income Households.
1.2 Exhibits. The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Schedule of HOME Rents
Exhibit C: Certificate of Continuing Program Compliance Exhibit D: Form of Certification of Tenant Eligibility
ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) Low Income Units. During the Term, Borrower shall rent four (4) of the studio Units and ensure that these Units are occupied or, if vacant, available for occupancy, by Low Income Households. Four (4) of the Units shall be considered the City-Assisted Units. (b) Intermingling of Units. The City-Assisted Units are required to be intermingled throughout the Development and of comparable quality to all other Units. All Tenants must have equal access to and enjoyment of all common facilities in the Development. (c) Disabled Persons Occupancy. Borrower shall cause the Development to be operated at all times in compliance with the provisions of: (1) the Unruh Act; (2) the California Fair Employment and Housing Act; (3) Section 504 of the Rehabilitation Act of 1973; (4) the United States Fair Housing Act, as amended; and (5) the Americans With Disabilities Act of 1990, which relate to disabled persons access. Borrower shall indemnify, protect, hold harmless and defend (with counsel reasonably satisfactory to the City) the City, and its council members, board members, officers agents and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Borrower's failure to comply with applicable legal requirements related to housing for persons with disabilities. The provisions of this subsection will survive expiration of the Term or other termination of this Agreement, and remain in full force and effect.
2.2 Allowable Rent.
(a) Very Low Income Rent. Subject to the provisions of Section 2.3 below, the Rent paid by Tenants of Very Low Income Units may not exceed the Low HOME Rent provided annually by the City.
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(b) Low Income Rent. Subject to the provisions of Section 2.3 below, the Rent paid by Tenants of Low Income Units may not exceed the High HOME Rent provided annually by the City.
(c) No Additional Fees. Borrower may not charge any fee, other than Rent, to any Tenant of the Units for any housing or other services provided by Borrower.
2.3 Rent Increases; Increased Income of Tenants.
(a) Rent Increases. The proposed initial Rents and subsequent Rents for all City-Assisted Units shall be provided to the Borrower by the City prior to initial or subsequent occupancy and prior to a rent increase, and shall be subject to the HOME Regulations. A schedule of current HOME rents is attached as Exhibit B. Borrower may not impose any Rent increases on City-Assisted Units, without prior submission to the City of any proposed Rent increases and without written approval from the City of the proposed Rent increases. The Rent for such City -Assisted Units may be increased no more than once annually based upon the annual income certification described in Article 3 and in no event shall any increase exceed three (3%) percent. Tenants shall be given at least sixty (60) days written notice prior to any Rent increase. The City will provide Borrower with a schedule of maximum permissible Rents for the City-Assisted Units annually.
(b) Non-Qualifying Household. If, upon the annual certification of the income a Tenant of a City-Assisted Unit, Borrower determines that the income of a Very Low Income Household or Low Income Household has increased above the qualifying limit for a Low Income Household, such Tenant shall be permitted to retain the Unit and upon expiration of the Tenant's lease and upon sixty (60) days written notice, the Rent must be increased to the lesser of one-twelfth (1/12th) of thirty percent (30%) of the actual Adjusted Income of the Tenant, or fair market rent (subject to 24 C.F.R. 92.252(i)(2) regarding low income housing tax credit requirements), and Borrower shall rent the next available Unit to a Very Low Income Household or Low Income Household as applicable to comply with the requirements of Section 2.1 above, at a Rent not exceeding the maximum Rent specified in Section 2.2, or re-designate another comparable Unit in the Development with a Very Low Income Household or Low Income Household as applicable as a City-Assisted Unit, to meet the requirements of Section 2.1 above.
Upon renting the next available Unit in accordance with Section 2.1 or re-designating another Unit in the Development as a City-Assisted Unit, the Unit with the over-income Tenant will no longer be considered a City-Assisted Unit.
(c) Termination of Occupancy. Upon termination of occupancy of a CityAssisted Unit by a Tenant, such Unit will be deemed to be continuously occupied by a household of the same income level as the initial income level of the vacating Tenant, until such Unit is reoccupied or another Unit is re-designated as a City-Assisted Unit, at which time categorization of the Unit will be established based on the occupancy requirements of Section 2.1.
2.4 Units Available to the Disabled. Borrower shall construct the Development in compliance with all applicable federal and state disabled persons accessibility requirements including but not limited to the Federal Fair Housing Act; Section 504 of the Rehabilitation Act of 1973; Title II and/or Title III of the Americans with Disabilities Act; and Title 24 of the #21..
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California Code of Regulations. In compliance with Section 504 of the Rehabilitation Act, a minimum of one (1) unit in the Development shall be constructed to be readily accessible and usable by households with a mobility impaired member, and a minimum of one (1) unit in the Development shall be constructed to be readily accessible and usable by households with a hearing or vision impaired member. Not less than thirty (30) days from the Completion Date, the Borrower shall deliver to the City the certification required pursuant to Section 4.8(f) of the Loan Agreement
ARTICLE 3
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification. Borrower shall obtain, complete, and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Tenant renting any of the City-Assisted Units. Borrower shall cause each Tenant in a CityAssisted Unit to execute a Certification of Tenant Eligibility in the form attached as Exhibit D.
Borrower shall fill out the "Development Owner" portion of the Certification of Tenant Eligibility and provide it to the City along with supporting documentation collected by Borrower.
Borrower shall make a good faith effort to verify the accuracy of the income provided by all applicants or all members of the occupying household, as the case may be, in the income certification. To verify the information Borrower shall take two or more of the following steps:
(a) obtain pay stubs for the most recent two months; (b) obtain an income tax return for the most recent tax year; (c) conduct a credit agency or similar search; (d) obtain an income verification form from the applicant's current employer verifying employment for the last two months; (e) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies, verifying assistance for the last two months; or (f) if the applicant is unemployed and does not have a tax return, obtain another form of independent verification. Copies of the Certifications of Tenant Eligibility and accompanying documentation must be submitted to the City annually for each of the City-Assisted Units.
3.2 Reporting Requirements. Borrower shall submit to the City: (a) not later than the ninety (90th) day after the close of each calendar year, or such other date as may be requested by the City, a signed copy of the Certification of Program Compliance in the form attached as Exhibit C; and (b) within fifteen (15) days after receipt of a written request, any other information or completed forms requested by the City in order to comply with reporting requirements of HUD, the State of California, and the City; including but not limited to reports, records, surveys evidencing compliance with Section 5.4 of the Loan Agreement.
3.3 Additional Information. Borrower shall provide any additional information reasonably requested by the City.
3.4 Records. Borrower shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of Tenants and Rent charged to such Tenants. All Tenant lists, applications and waiting lists relating to the Development are to be at all times: (a) separate and identifiable from any other business of #21..
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Borrower; (b) maintained as required by the City, in a reasonable condition for proper audit; and (c) subject to examination during business hours by representatives of the City. Borrower shall retain copies of all materials obtained or produced with respect to occupancy of the units for a period of at least five (5) years. The City may audit, examine and make copies of all books, records or other documents of Borrower that pertain to the Development.
3.5 HOME Record Requirements. For the period of the HOME Term all records maintained by Borrower pursuant to Sections 3.2 and 3.4 above are to be: (a) maintained in compliance with all applicable HUD records and accounting requirements; and (b) open to and available for inspection and copying by HUD and its authorized representatives at reasonable intervals during normal business hours; provided however, records pertaining to Tenant income verifications, Rents, and Development physical inspections must be kept for the most recent five (5) year period and are subject to HUD inspection for five (5) years after expiration of the HOME Term. Borrower is subject to the audit requirements set forth in 24 CFR 92.505 during the HOME Term.
3.6 On-Site Inspection.
(a) The City may perform, or cause to be performed, an on-site inspection of the Development (including Units, subject to the rights of Tenants) at least one (1) time per year during all business hours and upon reasonable notice (if such inspection includes entering any occupied Unit, then twenty-four hours' notice shall be considered reasonable) to monitor compliance with this Agreement. Borrower shall cooperate in making the Property available for such inspection. Borrower agrees and acknowledges that during the HOME Term, the City must conduct on-site inspections, consistent with the requirements of 24 C.F.R. 92.504(d), to determine compliance with the property standards set forth in 24 C.F.R. 92.251, at least once every three (3) years after the completion of construction of the Development. (b) After the completion of an inspection the City shall deliver a copy of the inspection report to the Borrower. If the City determines as a result of such inspection that there are any life-threatening health and safety related deficiencies, Borrower has the obligation to correct such deficiencies immediately, in accordance with 24 C.F.R. 92.251. If the City determines as a result of the inspection that there are any deficiencies for any of the inspectable items in the Development, the Borrower shall correct such deficiencies within fifteen (15) days from the delivery of the inspection report or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Borrower must begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible. In addition, the Borrower acknowledges that the City may re-inspect the Development to verify all deficiencies have been corrected or rely on third party documentation submitted by the Borrower for non-hazardous deficiencies in conformance with 24 C.F.R 92.504(d). (c) After expiration of the HOME Term and for the balance of the term of this Agreement, the City may perform on-site inspections as deemed reasonably necessary by the City.
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ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Residential Use. Borrower shall operate the Development for residential use only, and such ancillary uses permitted at the Development as approved by the City. No part of the Development may be operated as emergency shelters (including shelters for disaster victims) or facilities such as nursing homes, convalescent homes, hospitals, residential treatment facilities, correctional facilities, halfway houses, housing for students, or dormitories (including farmworker dormitories).
4.2 Compliance with Loan Documents and Program Requirements. Borrower's actions with respect to the Property shall at all times be in full conformity with: (a) all requirements of the Loan Documents; (b) all requirements imposed on projects assisted with HOME Funds as contained in 42 U.S.C. Section 12701, et seq., 24 C.F.R. Part 92, and other implementing rules and regulations, as such may be amended or supplemented from time to time; and (c) any other regulatory requirements imposed on Borrower.
4.3 Taxes and Assessments. Borrower shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Borrower may apply for a property tax exemption for the Property under any provision of law or contest in good faith, any such taxes, assessments, or charges. In the event Borrower exercises its right to contest any tax, assessment, or charge against it, Borrower, on final determination of the proceeding or contest, will immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.
4.4 Property Tax Exemption. Borrower may apply for a property tax exemption for the Property under any provision of law, including but not limited to, California Revenue and Taxation Section 214(g).
ARTICLE 5
PROPERTY MANAGEMENT, MAINTENANCE AND TENANT SERVICES
5.1 Management Responsibilities. Borrower is responsible for all management functions with respect to the Development, including without limitation the selection of Tenants in accordance with the requirements of 24 C.F.R. 92.253(d), certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City has no responsibility for management of the Development. Borrower shall retain a professional property management company approved by the City in its reasonable discretion to perform Borrower's management duties hereunder.
5.2 Management Agent. Borrower shall cause the Development to be managed by an experienced management agent reasonably acceptable to the City, with a demonstrated ability to operate residential facilities like the Development in a manner that will provide decent, safe, and #21..
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sanitary housing (the "Management Agent"). The City hereby approves the Modesto Homekey LP, a California limited partnership as the initial Management Agent. Borrower shall also submit such additional information about the background, experience and financial condition of any proposed Management Agent as is reasonably necessary for the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the City shall approve the proposed Management Agent by notifying Borrower in writing. Unless the proposed Management Agent is disapproved by the City within thirty (30) days, which disapproval is to state with reasonable specificity the basis for disapproval, it shall be deemed approved. Pursuant to California Code of Regulations title 25, Section 42 all projects with 16 or more units must have a resident manager living on the Property.
5.3 Periodic Performance Review. The City reserves the right to conduct an annual (or more frequently, if deemed necessary by the City) review of the management practices and financial status of the Development. The purpose of each periodic review will be to enable the City to determine if the Development is being operated and managed in accordance with the requirements and standards of this Agreement. Borrower shall cooperate with the City in such reviews.
5.4 Replacement of Management Agent.
(a) If, as a result of a periodic review, the City determines in its reasonable judgment that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, the City shall deliver notice to Borrower of its intention to cause replacement of the Management Agent, including the reasons therefor.
Within fifteen (15) days after receipt by Borrower of such written notice, the City staff and Borrower shall meet in good faith to consider methods for improving the financial and operating status of the Development, including, without limitation, replacement of the Management Agent. (b) If, after such meeting, City staff recommends in writing the replacement of the Management Agent, Borrower shall promptly dismiss the then current Management Agent, and must take steps to appoint as the Management Agent a person or entity meeting the standards for a management agent set forth in Section 5.2 above and approved by the City pursuant to Section 5.2 above, and shall promptly and as soon as practicable dismiss the thencurrent Management Agent. (c) Any contract for the operation or management of the Development entered into by Borrower shall provide that the Management Agent may be dismissed and the contract terminated as set forth above. Failure to remove the Management Agent in accordance with the provisions of this Section constitutes a default under this Agreement, and the City may enforce this provision through legal proceedings as specified in Section 6.7 below.
5.5 Approval of Management Policies. Borrower shall submit its written management policies with respect to the Development to the City for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement.
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5.6 Tenant Services Provider.
(a) The Borrower will be providing on-site services which Borrower will make available to all tenants in the Development (the "Tenant Services"). The Borrower shall submit to the City for approval the name and qualifications of any proposed services provider (the "Services Provider").
(b) The Services Provider shall have demonstrated the ability to provide Tenant Services in residential facilities like the Development in an effective manner. The Borrower shall submit such additional information about the background, experience and financial condition of any proposed Services Provider as is reasonably necessary for the City to determine whether the proposed Services Provider meets the standards for a qualified Services Provider of developments of this type.
(c) If the proposed Services Provider meets the standard for a qualified Services Provider set forth above, the City shall approve the proposed Services Provider by notifying Borrower in writing. Unless the proposed Services Provider is disapproved by the City within thirty (30) days, which disapproval is to state with reasonable specificity the basis for disapproval, it shall be deemed approved. The City hereby approves Stanislaus County Behavioral Health and Recovery Services ("BHRS") as the initial Services Provider for the Development.
5.7 Property Maintenance.
(a) Borrower shall maintain, for the entire Term of this Agreement, all interior and exterior Improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials, and in a decent, safe, sanitary condition and in good repair pursuant to the Uniform Physical Conditions Standards established by HUD pursuant to 24 C.F.R. 5.703 and as required under 24 C.F.R. 92.251.
(b) The City places prime importance on quality maintenance to protect its investment and to ensure that all City and City-assisted affordable housing projects within the City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the City assuming Borrower agrees to provide all necessary improvements to assure the Development is maintained in good condition. Borrower shall make all repairs and replacements necessary to keep the improvements in good condition and repair.
(c) In the event that Borrower breaches any of the covenants contained in this section and such default continues for a period of five (5) days after written notice from the City with respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after written notice from the City with respect to landscaping and building improvements, then the City, in addition to whatever other remedy it may have at law or in equity, has the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure #21..
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the default. Pursuant to such right of entry, the City is permitted (but is not required) to enter upon the Property and to perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, which amount shall be promptly paid by Borrower to the City upon demand.
5.8 Crime Prevention Program. During the Term of this Agreement Borrower agrees to participate in the City of Modesto Police Department's Crime Free Multi-Housing program or similar program administered by the City (the "Crime Prevention Program"). Information on the City's Crime Prevention Program is currently available at https://www.modestogov.com/mpd/programs/cfmh/. The City's periodic review of the management of the Development pursuant to Section 5.3 will include an evaluation of Borrower's participation in the Crime Prevention Program.
ARTICLE 6
MISCELLANEOUS
6.1 Lease Provisions. In leasing the Units within the Development, Borrower shall use a form of written lease approved by the City. The lease must not contain any provision which is prohibited by 24 C.F.R. Section 92.253(b) and any amendments thereto. The form of lease must comply with all requirements of this Agreement, the other Loan Documents and must, among other matters:
(a) Provide for termination of the lease for failure to: (1) provide any information required under this Agreement or reasonably requested by Borrower to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy in the Development in accordance with the standards set forth in this Agreement; or (2) qualify as a Very Low Income Household or Low Income Household as a result of any material misrepresentation made by such Tenant with respect to the income computation. (b) Be for an initial term of not less than one (1) year, unless by mutual agreement between the Tenant and Borrower, and provide for no increase in Rent during such year. After the initial year of tenancy, the lease may be month-to-month by mutual agreement of Borrower and the Tenant. Notwithstanding the above, any rent increases are subject to the requirements of Section 2.3 (a) above.
(c) Include a provision which requires a Tenant who is residing in a Unit required to be accessible pursuant to Section 2.4 and who is not in need of an accessible Unit to move to a non-accessible Unit when a non-accessible Unit becomes available and another Tenant or prospective Tenant is in need of an accessible Unit.
6.2 Lease Termination. Any termination of a lease or refusal to renew a lease for a City-Assisted Unit within the Development must be in conformance with 24 C.F.R. 92.253(c), and any termination of a lease or refusal to renew a lease for any Unit within the Development #21..
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must be preceded by not less than sixty (60) days written notice to the Tenant by Borrower specifying the grounds for the action.
6.3 Nondiscrimination.
(a) All of the Units must be available for occupancy on a continuous basis to members of the general public who are income eligible. Except as provided in subsection (c) below, Borrower may not give preference to any particular class or group of persons in renting or selling the Units, except to the extent that the Units are required to be leased to income eligible households pursuant to this Agreement. Borrower herein covenants by and for Borrower, assigns, and all persons claiming under or through Borrower, that there exist no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, source of income (e.g., SSI), ancestry, disability, age, or military and veteran status, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor will Borrower or any person claiming under or through Borrower, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the construction, operation and management of any Unit. Borrower shall comply with Executive Orders 11246, 11375, 11625, 12138, 12431, 12250, 13672, Title VII of the Civil Rights Act of 1964, the California Fair Housing and Employment Act and other applicable Federal, State and local laws and regulations and policies relating to equal employment and contracting opportunities, including laws and regulations hereafter enacted.
(b) Borrower shall accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. Borrower may not apply selection criteria to Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other prospective Tenants, nor will Borrower apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Tenants.
(c) In accordance with 24 C.F.R 92.504(c)(3), so long as Borrower provides supportive housing services at the Development in conformance with the requirements of the Veterans Affairs Supportive Housing ("VASH"), notwithstanding anything to the contrary in subsection (a) above, the Borrower may provide preference to households reasonably determined by the Borrower to be VASH-eligible households, as allowed under 24 C.F.R. 92.253, for any VASH assisted units, so long as such preference does not violate nondiscrimination requirements listed in 24 C.F.R. 92.350.
6.4 Term. The provisions of this Agreement apply to the Property for the entire Term even if the Loan is paid in full prior to the end of the Term. This Agreement binds any successor, heir or assign of Borrower, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by City. City is making the Loan on the condition, and in consideration of, this provision, and would not do so #21..
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otherwise. For the purposes of the HOME Regulations, the Development shall only be considered a HOME assisted project for the duration of the HOME Term, and nothing in this Agreement may be read to infer otherwise.
6.5 Notice of Expiration of Term.
(a) At least six (6) months prior to the expiration of the Term, Borrower shall provide by first-class mail, postage prepaid, a notice to all Tenants containing: (1) the anticipated date of the expiration of the Term; (2) any anticipated increase in Rent upon the expiration of the Term; (3) a statement that a copy of such notice will be sent to the Count; and (4) a statement that a public hearing may be held by the City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. Borrower shall also file a copy of the above-described notice with the City Manager, or the Community Development Manager.
(b) In addition to the notice required above, Borrower shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (1) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Agencies (as defined in California Government Code Section 65863.10(a)) prior to the expiration of the Term; (2) a six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Agencies prior to the expiration of the Term; (3) a notice of an offer to purchase the Development to "qualified entities" (as defined in California Government Code Section 65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; and (4) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Development.
6.6 Covenants to Run With the Land. The City and Borrower hereby declare their express intent that the covenants and restrictions set forth in this Agreement run with the land, and bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, is to be held conclusively to have been executed, delivered and accepted subject to the covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the City expressly releases such conveyed portion of the Property from the requirements of this Agreement.
6.7 Enforcement by the City. If Borrower fails to perform any obligation under this Agreement, and fails to cure the default within thirty (30) days after the City has notified Borrower in writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, the City may enforce this Agreement by any or all of the following actions, or any other remedy provided by law:
(a) Calling the Loan. The City may declare an Event of Default under the Note, accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the Deed of Trust.
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(b) Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel Borrower's performance of its obligations under this Agreement, and may seek damages.
(c) Remedies Provided Under Loan Documents. The City may exercise any other remedy provided under the Loan Documents, including the Deed of Trust.
6.8 Attorneys' Fees and Costs. In any action brought to enforce this Agreement, the prevailing party must be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section must be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.
6.9 Recording and Filing. The City and Borrower shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records of Stanislaus County.
6.10 Governing Law. This Agreement is governed by the laws of the State of California.
6.11 Waiver of Requirements. Any of the requirements of this Agreement may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Agreement extends to or affects any other provision of this Agreement, and may not be deemed to do so.
6.12 Amendments. This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title that is duly recorded in the official records of Stanislaus County.
6.13 Notices. Any notice requirement set forth herein will be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows:
City: City of Modesto
1010 Tenth Street, Suite 4400
Modesto, CA 95354
Attn: Community Development Manager
Borrower: Modesto Homekey LP
c/o UP Holdings California, LLC
6083 N. Figarden Drive, #656
Fresno, CA 93722
Attention: Cullen J. Davis
Such addresses may be changed by notice to the other party given in the same manner as provided above.
6.14 Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and #21..
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enforceability of the remaining portions of this Agreement will not in any way be affected or impaired thereby.
6.15 Multiple Originals; Counterparts. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
6.16 Revival of Agreement after Foreclosure. In the event there is a foreclosure of the Property, this Agreement will revive according to its original terms if, during the Term, the owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the Development or Property. [Remainder of Page Left Intentionally Blank]
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HOME Regulatory Agreement
Signature Page
3525800.1
WHEREAS, this Agreement has been entered into by the undersigned as of the date first written above.
BORROWER:
MODESTO HOMEKEY LP,
a California limited partnership
By: ______________________________________
Executive Director
Date: ______________________________________
[City Signature Follows]
[Remainder of Page Left Intentionally Blank]
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HOME Regulatory Agreement
Signature Page
3525800.1
CITY:
CITY OF MODESTO, a California charter city
By: _____________________________________
Joseph Lopez, City Manager
Date: ______________________________________
ATTEST:
________________________________
Diane Nayares-Perez, CMC, City Clerk
APPROVED AS TO FORM:
By: ___________________________
Jose M. Sanchez, City Attorney
APPROVED AS TO RISK MANAGEMENT:
By: _________________________________
Risk Manager
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. #21..
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A-1
EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the City of Modesto, Stanislaus County, State of California, and is described as follows:
LOTS 6, 7, 8, 9, 10, 11, 12 AND 13 IN BLOCK 906 OF "AMENDED MAP OF HANEY TRACT", AS PER MAP FILED OCTOBER 10, 1950 IN VOLUME 17 OF MAPS AT PAGE 15, STANISLAUS COUNTY RECORDS.
Assessor’s Parcel Number (APN): 115-002-004-000
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B-1
EXHIBIT B
HOME PROGRAM RENTS
The attached HOME Rents reflect the current HOME rents as of the Effective Date. The initial Rents and subsequent Rents for all City-Assisted Units must be provided to the Borrower by the City prior to occupancy and are subject to the HOME Regulations. The City will provide Borrower with a schedule of maximum permissible Rents for the City-Assisted Units annually. #21..
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C-1
EXHIBIT C
INITIAL CERTIFICATE OF
PROGRAM COMPLIANCE
Modesto Homekey LP, a California limited partnership ("Owner"), hereby certifies that it will comply with all applicable, ongoing HOME Program requirements for the Property's Affordability Period which has been determined to be fifty-five (55) years from the date of issuance of the Certificate of Occupancy for the above-described Project. Affordability shall be maintained as follows:
Four (4) studio units are being made available to Low Income Households.
During the term of the Regulatory Agreement the Owner will rent four (4) City-Assisted Units, and ensure that these units are occupied or, if vacant, available for occupancy, by Low or Very Low Income Households. During the term of the Regulatory Agreement the Owner will rent all of the City-Assisted Units, and ensure that these units are occupied or, if vacant, available for occupancy, by Low or Very Low Income Households.
Property owners and managers have participated in the Modesto Police Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other resources are provided to multi-family property owners and managers to reduce the potential for onsite criminal activity.
Completion of the Department's four (4) training phases, a Final Certification has been achieved and will be maintained by the owner/representative and/or regional/onsite property manager.
Owner is maintaining and attaching the following records and reports in order to assist the City in meeting its record keeping and reporting requirements under the HOME Program and City Regulatory Agreement:
1. Files on the annual review and certification of tenant income;
2. All information on the qualification of affordable rents;
3. Terms and conditions of all signed leases between Tenants and Owner;
4. All other reports and records requested by City pursuant to the Loan Documents.
Dated: _______________
OWNER:
MODESTO HOMEKEY LP, A CALIFORNIA LIMITED
PARTNERSHIP
By: ________________________________,
Executive Director
Date: ________________________________
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C-2
ANNUAL CERTIFICATION OF
CONTINUING PROGRAM COMPLIANCE
Modesto Homekey LP, a California limited partnership ("Owner"), hereby certifies that it will comply with all applicable, ongoing HOME Program requirements for the Property's Affordability Period which has been determined to be fifty-five (55) years from the date of issuance of the Certificate of Occupancy for the above-described Project. Affordability shall be maintained as follows:
Four (4) studio units are being made available to Low Income Households.
During the term of the Regulatory Agreement the Owner will rent four (4) City-Assisted Units, and ensure that these units are occupied or, if vacant, available for occupancy, by Low or Very Low Income Households. During the term of the Regulatory Agreement the Owner will rent all of the City-Assisted Units, and ensure that these units are occupied or, if vacant, available for occupancy, by Low or Very Low Income Households.
Property owners and managers have participated in the Modesto Police Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other resources are provided to multi-family property owners and managers to reduce the potential for onsite criminal activity.
Completion of the Department's four (4) training phases, a Final Certification has been achieved and will be maintained by the owner/representative and/or regional/onsite property manager.
Owner is maintaining and attaching the following records and reports in order to assist the City in meeting its record keeping and reporting requirements under the HOME Program and City Regulatory Agreement:
1. Files on the annual review and certification of tenant income;
2. All information on the qualification of affordable rents;
3. Terms and conditions of all signed leases between Tenants and Owner;
4. All other reports and records requested by City pursuant to the Loan Documents.
Dated: _______________
OWNER:
MODESTO HOMEKEY LP, A CALIFORNIA LIMITED
PARTNERSHIP
By: ________________________________,
Executive Director
Date: ________________________________
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C-3
1669\01\2466400.1
CERTIFICATE OF
CONTINUING PROGRAM COMPLIANCE
The following information is being provided by the MODESTO HOMEKEY LP, a California limited partnership (the "Owner") to the City of Modesto, (the "City"), pursuant to that certain HOME Loan Agreement dated as of _________, 2024, as such may be amended from time to time, and the Regulatory Agreement dated as of ________. 2024, as such may be amended from time to time, with respect to the Development:
(A) Owner will comply with all applicable, ongoing HOME Program requirements for the twenty (20) year HOME Term from the date of issuance of the Certificate of Occupancy for the above-described project, and the ongoing City imposed affordability requirements for balance of the Property's Affordability Period which has been determined to be fifty-five (55) years from the date of issuance of the Certificate of Occupancy for the above-described project.
(B) The total number of residential units which are completed and available for occupancy is .
The total number of such units occupied is .
(C) The following residential units (identified by unit number) have been designated CityAssisted Units, as described in the Regulatory Agreement (for a total of ); (D) The following residential units which are included in (B) above, have been designated as City-Assisted Units since , 20____, the date on which the last "Certificate of Continuing Program Compliance" was filed with the City by ; Unit Number Previous Designation of
Unit (if any) Replacing Unit Number
If a floating unit was substituted, please attach any information on unit substitutions and filling of vacancies to evidence maintenance of required unit mix and income targeting.) (E) The following residential units are considered to be occupied by Low or Very Low Income Households and Low Income Households based on the information set forth below:
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C-4
1669\01\2466400.1
Number
of Unit
Date of
Unit
No.
Name of Tenant
Persons
Residing
in Unit
Total
Adjusted
Gross
Income
Initial
Occupancy
Monthly
Rental
Amount
Attach a Separate Sheet if Necessary
(F) In renting the residential units in the Development, Owner has not given preference to any particular group or class of persons not allowed under the Regulatory Agreement (except for persons who qualify as qualified Low or Very Low Income Households and Low Income Households). All of the residential units in the Development have been rented pursuant to a written lease, and the term of each lease is at least twelve months.
A copy of the form lease for City-Assisted Units is attached. (G) Property owners and managers have participated in the Modesto Police Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other resources are provided to multi-family property owners and managers to reduce the potential for onsite criminal activity. Completion of the Department's three (3) training phases, a Final Certification (Phase V) has been achieved and is being maintained by the owner/representative and/or regional/-onsite property manager. (H) Each building in the Development and all City-Assisted Units in the Development are suitable for occupancy and comply with all applicable State and local health, safety and other applicable codes, ordinances, and requirements and the ongoing property standards, as specified in Section of the 5.7 of the Regulatory Agreement. (I) The information provided in this "Certificate of Continuing Program Compliance" is accurate and complete, and no matters have come to the attention of Owner which would indicate that any of the information provided herein, or in any "Certification of Tenant Eligibility" obtained from the tenants named herein, is inaccurate or incomplete in any respect.
[Signature Page Follows.]
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1669\01\2466400.1
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of Owner, on this day of , 20 .
OWNER:
MODESTO HOMEKEY LP, A CALIFORNIA LIMITED
PARTNERSHIP
By: ________________________________,
Executive Director
Date: ________________________________
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EXHIBIT D
FORM OF CERTIFICATION OF TENANT ELIGIBILITY
Rental Unit
Street Address Unit No
City Zip Code
I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully and truthfully each of the following questions for all persons who are to occupy the unit in the above Development for which application is made, all of whom are listed below:
1. 2. 3. 4. 5.
Name of Members
in the Household
Relationship to
Head of Household Age Ethnicity Place of Employment
Ethnicity: ❑ White ❑ Black or African American ❑ Asian ❑ Asian & White ❑ American Indian or Alaska Native
❑ Native Hawaiian or Other Pacific Islander ❑ American Indian or Alaska Native & White ❑ Black or African American & White
❑ American Indian or Alaska Native & Black or African American ❑ Other Multi Race ❑ Hispanic
Date of Occupancy of Rental Unit by Tenant:
Date of Lease Signed for Rental Unit by Tenant:
Amount of Rent Paid Per Month:
Certification Date (Earlier of Date of Occupancy or Date Lease signed):
6. Anticipated Annual Income. The anticipated total annual income from all sources of each person listed in Section 1 for the twelve (12) month period beginning on the Certification Date listed above, including income described in (a) below, but excluding all income described in (b) below, is $ .
(a) The amount set forth above includes all of the following income (unless such income is described in (b) below): all wages and salaries, overtime pay, commissions, fees, tips and bonuses before payroll deductions; net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization #21..
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of capital indebtedness or any allowance for depreciation of capital assets); interest and dividends (including income from assets as set forth in item 7(b) below); full amount of periodic payments received from Social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts; payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay; the maximum amount of public assistance available to the above persons; periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and any earned income tax credit to the extent it exceeds income tax liability.
(b) The following income is excluded from the amount set forth above: casual, sporadic or irregular gifts; amounts that are specifically for or in reimbursement of medical expenses; lump sum additions to family assets, such as inheritances, insurance payment (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; amounts of educational scholarships paid directly to student or educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either case only to the extent used for such purposes; hazardous duty pay to a member of the household in the armed forces who is away from home and exposed to hostile fire; relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; income from employment of children (including foster children) under the age of eighteen (18) years; foster child care payments; the value of coupon allotments under the Food Stamp Act of 1977; payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act; income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; payments on allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program; and payments received from the Job Partnership Training Act.
7. Net Family Assets. If any of the persons described in item 1 above (or any person whose income or contributions were included in item 6) has any savings, stocks, bonds, equity in real property or other form of capital investment (excluding interests in Indian trust lands), provide:
(a) the total value of all such assets owned by all such persons: $ , and
(b) the amount of income expected to be derived from such assets in the twelve (12) month period commencing this date: $ . #21..
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8. Students
(a) Will any of the persons listed in item 1 above be or have they been full-time students during five (5) calendar months of this calendar year at an educational institution (other than a correspondence school) with regular faculty and students?
Yes No
(b) (Complete only if the answer to Question 8(a) is "Yes"). Is any such person (other than nonresident aliens) married and eligible to file a joint federal income tax return, a veteran of the U.S. military?
Yes No
The above information is full, true, and complete to the best of my knowledge. I have no objections to inquiries being made for the purpose of verifying the statements made herein.
Signature: Date
(Signature Must be Notarized)
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. #21..
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FOR COMPLETION BY DEVELOPMENT OWNER ONLY:
A. Calculation of eligible income:
(1) Enter amount entered for entire household in 6 above: $ (2) If the amount entered in 7(a) above is greater than $5,000, enter $ (i) the product of the amount entered in 7(a) above multiplied by the current passbook savings rate as determined by HUD: $ (ii) the amount entered in 7(b) above: $
(iii) enter the greater of line (i) or line (ii): $
(3) TOTAL ELIGIBLE INCOME (Line A(1) plus line A(2)(iii)): $ B. Enter number of family members listed in item 1 above:
C. The amount entered in A(3) (Total Eligible Income) is: $ Less than $__________ of median income for the area in which the Development is located, which is the maximum income at which a household may be determined to be a qualifying tenant as that term is defined in the Agreement.
More than the above-mentioned amount.
D. Number of units assigned:
E. Monthly rent: $
F. This unit (was/was not) last occupied for a period of thirty-one (31) consecutive days by a person or persons whose adjusted income, as certified in the above manner, was equal to or less than the amount at which a person would have qualified as a qualifying tenant under the terms of the Agreement.
G. Applicant:
Qualifies as a qualifying tenant.
Does not qualify as a qualifying tenant.
3525800.1
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p
Recording requested by and when recorded
mail to:
City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
APN:_________ Space above this line for Recorder’s use.
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Traveler’s Motel – 701 North 9th Street – Project Homekey) This Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement") is dated as of ________, 2024, and is between the City of Modesto, a California charter city (“City”) and Modesto Homekey LP, a California limited partnership (“Developer” or “Owner”). City and Developer are hereinafter collectively referred to as the “Parties.”
RECITALS
A. Defined Terms used but not defined in these recitals are as defined in Article 1 of this Agreement.
B. Developer owns fee simple title to certain real property located at 710 North 9th Street, Modesto, California, known as Stanislaus County Assessor's Parcel Numbers 107-008- 015, as further described in Exhibit A, attached hereto and incorporated herein (the "Property").
The Developer intends to rehabilitate a former motel located on the Property, commonly known as Travelers Motel, to serve as permanent supportive housing development consisting of fifty-six (56) units (the "Development"). One (1) of the units will be a manger’s unit.
F. The City and UP Holdings LLC, the Developer’s general partner, jointly submitted an application to HCD for funding for the Development pursuant to Project Homekey
3.0. HCD awarded the City and Developer Sixteen Million Fifty Nine Thousand Five Hundred Sixty Two Dollars ($16,059,562) in Project Homekey funding for the Development (“Homekey Funding”).
G. As a condition of the Homekey Funding, the units in the Development are required to be restricted to households within extremely low-incomes that do not exceed thirty percent (30%) of the Area Median Income and who are at risk or experiencing homelessness. #21..
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H. In consideration of receipt of the Homekey Funding, Developer agrees to observe all the terms and conditions set forth below.
I. The purpose of this Regulatory Agreement is to satisfy the requirements of both the Homekey Funding by ensuring that all of the units in the Development are restricted to households within extremely low-incomes that do not exceed thirty percent (30%) of the Area Median Income.
J. The Parties desire to identify HCD as a third party beneficiary of this Regulatory Agreement with the right, but not the obligation, to enforce and provision contained herein.
The parties therefore agree as follows.
ARTICLE 1
DEFINITIONS; EXHIBITS
1.1 Definitions. The following terms have the following meanings:
(a) "Actual Household Size" means the actual number of persons in the applicable household.
(b) “Assumed Household Size" means the household size "adjusted for family size appropriate to the unit" in accordance with the California Tax Credit Allocation Committee rules and regulations.
(c) "Area Median Income” means the area median income for Stanislaus County, California, adjusted for household size, as published by the California Department of Housing and Community Development (“HCD”). If HCD ceases to make such determination, Area Median Income shall be the median income applicable to Stanislaus County, with adjustments for household size, as determined from time to time by the U.S. Department of Housing and Urban Development ("HUD") pursuant to the United States Housing Act of 1937 as amended, or such other method of median income calculation applicable to the City that HUD may hereafter adopt in connection with such Act.
(d) “Assisted Units" means the fifty-five (55) Units within the Development designated as assisted by the Homekey Funds pursuant to this Regulatory Agreement. (e) "City" means the City of Modesto, a California charter city. (f) "Completion of Construction" means the date the construction of the Development is completed as evidenced by the issuance of a certificate of occupancy or equivalent document issued by the City, to certify completion of the construction of the Development.
(g) "Development" has the meaning set forth in Paragraph B of the Recitals. #21..
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(h) "Extremely Low Income Household" means a Tenant household with an Adjusted Income that does not exceed thirty percent (30%) of Area Median Income, adjusted for actual household size.
(i) "Extremely Low Income Units" means the Units which, pursuant to Section 2.1(b) below, are required to be occupied by Extremely Low Income Households. (j) "Management Agent" has the meaning set forth in Section 5.2. (k) "Rent" shall mean the total of monthly payments by the tenants of a Unit for the following: use and occupancy of the Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits; the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not cable or telephone service; any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than Owner, and paid by the Tenant. Utility allowances may be determined by use of the utility allowance published by the local public housing authority or the California Utility Allowance Calculator ("CUAC") model allowed by the California Tax Credit Allocation Committee regulations, if the Property qualifies.
(l) "Services Provider" has the meaning set forth in Section 5.6. (m) "Tenant" means the tenant household that occupies a Unit in the Development.
(n) "Term" means the term of this Regulatory Agreement which commences as of the date of this Regulatory Agreement, and unless sooner terminated pursuant to the terms of this Agreement, expires on the date fifty-five (55) years from the Competition of Construction, but in no event later than December 31, 2081 (subject to extensions agreed upon by the Partners).
(o) "Unit(s)" means one (1) or more of the units in the Development.
1.2 Exhibits. The following exhibits are attached to this Regulatory Agreement and incorporated into this Regulatory Agreement by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Certificate of Continuing Program Compliance Exhibit C: Form of Certification of Tenant Eligibility
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ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) Restricted Units. During the Term, Developer shall rent fifty-five (55) of the Units in the Development to, and ensure that these Units are occupied or, if vacant, available for occupancy, by Extremely Low Income Households who are at risk or experiencing homelessness (the “Assisted Units”). One (1) of the Units in the Development shall be a manager’s unit, which shall not be subject to the requirements of this Article 2. (b) Intermingling of Units. The Assisted Units are required to be intermingled throughout the Development and of comparable quality to all other Units. All Tenants must have equal access to and enjoyment of all common facilities in the Development. (c) Disabled Persons Occupancy. Developer shall cause the Development to be operated at all times in compliance with the provisions of: (1) the Unruh Act; (2) the California Fair Employment and Housing Act; (3) Section 504 of the Rehabilitation Act of 1973; (4) the United States Fair Housing Act, as amended; and (5) the Americans With Disabilities Act of 1990, which relate to disabled persons access. Developer shall indemnify, protect, hold harmless and defend (with counsel reasonably satisfactory to the City) the City, and its council members, board members, officers agents and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Developer's failure to comply with applicable legal requirements related to housing for persons with disabilities. The provisions of this subsection will survive expiration of the Term or other termination of this Regulatory Agreement, and remain in full force and effect.
2.2 Allowable Rent.
(a) Rent for Assisted Units. Subject to the provisions of Section 2.3 below, the Rent paid by Tenants of Assisted Units shall not exceed one-twelfth (1/12th) of thirty percent (30%) of the thirty percent (30%) of Area Median Income, adjusted for Assumed Household Size.
(b) No Additional Fees. Developer may not charge any fee, other than Rent, to any Tenant of the Units for any housing or other services provided by Developer.
2.3 Rent Increases; Increased Income of Tenants.
(a) Rent Increases. The proposed initial Rents and subsequent Rents for all Assisted Units shall be provided to the Developer by the City prior to initial or subsequent occupancy and prior to a rent increase, and shall be subject to the requirements of this Agreement. Developer shall only impose Tenant Rent increases on the Assisted Units that are consistent with the applicable statutes, laws, and regulations of the State of California and City of Modesto. The Rent for such Assisted Units may be increased no more than once annually based upon the annual income certification described in Article 3. Tenants shall be given at least #21..
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sixty (60) days written notice prior to any Rent increase. The City will provide Developer with a schedule of maximum permissible Rents for the Assisted Units annually. (b) Non-Qualifying Household. If, upon the annual certification of the income a Tenant of an Assisted Unit, Developer determines that the income of an extremely Income Household has increased above the qualifying limit for an Extremely Low Income Household, such Tenant shall be permitted to retain the Unit and upon expiration of the Tenant's lease and upon sixty (60) days written notice, the Rent may be increased to the lesser of onetwelfth (1/12th) of thirty percent (30%) of the actual Adjusted Income of the Tenant, and Developer shall rent the next available Unit to an Extremely Low Income Household to comply with the requirements of Section 2.1 above, at a Rent not exceeding the maximum Rent specified in Section 2.2. Upon renting the next available Unit in accordance with Section 2.1, the Unit with the over-income Tenant will no longer be considered an Assisted Unit. (c) Termination of Occupancy. Upon termination of occupancy of an Assisted Unit by a Tenant, such Unit will be deemed to be continuously occupied by a household of the same income level as the initial income level of the vacating Tenant, until such Unit is reoccupied or another Unit is re-designated as an Assisted Unit, at which time categorization of the Unit will be established based on the occupancy requirements of Section 2.1.
2.4 Units Available to the Disabled. Developer shall construct the Development in compliance with all applicable federal and state disabled persons accessibility requirements including but not limited to the Federal Fair Housing Act; Section 504 of the Rehabilitation Act of 1973; Title II and/or Title III of the Americans with Disabilities Act; and Title 24 of the California Code of Regulations.
ARTICLE 3
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification. Developer shall obtain, complete, and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Tenant renting any of the Assisted Units. Developer shall cause each Tenant in an Assisted Unit to execute a Certification of Tenant Eligibility in the form attached as Exhibit C. Developer shall fill out the "Development Owner" portion of the Certification of Tenant Eligibility and provide it to the City along with supporting documentation collected by Developer. Developer shall make a good faith effort to verify the accuracy of the income provided by all applicants or all members of the occupying household, as the case may be, in the income certification. To verify the information Developer shall take two or more of the following steps: (a) obtain pay stubs for the most recent two months; (b) obtain an income tax return for the most recent tax year; (c) conduct a credit agency or similar search; (d) obtain an income verification form from the applicant's current employer verifying employment for the last two months; (e) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies, verifying assistance for the last two months; or (f) if the applicant is unemployed and does not have a tax return, obtain another form of independent verification. Copies of the Certifications of Tenant Eligibility and accompanying documentation must be submitted to the City annually for each of the Assisted Units.
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3.2 Reporting Requirements. Developer shall submit to the City: (a) not later than the ninety (90th) day after the close of each calendar year, or such other date as may be requested by the City, a signed copy of the Certification of Program Compliance in the form attached as Exhibit B; and (b) within fifteen (15) days after receipt of a written request, any other information or completed forms requested by the City in order to comply with reporting requirements of HUD, the State of California, and the City; including but not limited to reports, records, surveys evidencing compliance with the Agreement.
3.3 Additional Information. Developer shall provide any additional information reasonably requested by the City.
3.4 Records. Developer shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of Tenants and Rent charged to such Tenants. All Tenant lists, applications and waiting lists relating to the Development are to be at all times: (a) separate and identifiable from any other business of Developer; (b) maintained as required by the City, in a reasonable condition for proper audit; and (c) subject to examination during business hours by representatives of the City. Developer shall retain copies of all materials obtained or produced with respect to occupancy of the units for a period of at least five (5) years. The City may audit, examine and make copies of all books, records or other documents of Developer that pertain to the Development.
3.5 On-Site Inspection.
(a) The City may perform, or cause to be performed, an on-site inspection of the Development (including Units, subject to the rights of Tenants) at least one (1) time per year during all business hours and upon reasonable notice (if such inspection includes entering any occupied Unit, then twenty-four hours' notice shall be considered reasonable) to monitor compliance with this Regulatory Agreement and any other requirements of the Agreement.
Developer shall cooperate in making the Property available for such inspection. (b) After the completion of an inspection the City shall deliver a copy of the inspection report to the Developer. If the City determines as a result of such inspection that there are any life-threatening health and safety related deficiencies, Developer has the obligation to correct such deficiencies immediately. If the City determines as a result of the inspection that there are any deficiencies for any of the inspectable items in the Development, the Developer shall correct such deficiencies within fifteen (15) days from the delivery of the inspection report or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Developer must begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible. In addition, the Developer acknowledges that the City may re-inspect the Development to verify all deficiencies have been corrected or rely on third party documentation submitted by the Developer for non-hazardous deficiencies.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Residential Use. Developer shall operate the Development for residential use #21..
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only, and such ancillary uses permitted at the Development as approved by the City. No part of the Development may be operated as emergency shelters (including shelters for disaster victims) or facilities such as nursing homes, convalescent homes, hospitals, residential treatment facilities, correctional facilities, halfway houses, housing for students, or dormitories (including farmworker dormitories).
4.2 Compliance with Program Requirements. Developer's actions with respect to the Property shall at all times be in full conformity with: (a) all requirements of this Regulatory Agreement; and (d) any other regulatory requirements imposed on Developer.
4.3 Taxes and Assessments. Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Developer may apply for a property tax exemption for the Property under any provision of law or contest in good faith, any such taxes, assessments, or charges. In the event Developer exercises its right to contest any tax, assessment, or charge against it, Developer, on final determination of the proceeding or contest, will immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.
4.4 Insurance Coverage. Prior to issuance of building permits for the Development, and continuing throughout the term of this Agreement Owner shall obtain and maintain property insurance for the risks of direct physical loss, with minimum coverage being the perils insured under the standard Causes of Loss - Special form (ISO Form CP 10 30) or its equivalent, covering all improvements, all fixtures, equipment and personal property, located on or in, or constituting a part of, the Property (“Improvements”), in an amount equal to one hundred percent (100%) of the full replacement cost of all such property. Insurance shall be provided by insurers licensed to do business in the State of California and having a rating of A-VII or better in Best Insurance Guide. Notwithstanding the forgoing, during such time that lenders providing financing for the Development impose insurance requirements that are inconsistent with the requirements set forth herein, Owner may satisfy the requirements of this Section by meeting the requirements of such lenders. Any insurance required for the Development shall name the City, and its officers, officials, employees and agents as an additional insured. Owner shall provide proof of required insurance to City upon request.
4.5 Property Damage or Destruction. If any part of the Development is damaged or destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced within 120 days after the damage or loss occurs and shall be completed within two year thereafter, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible.
4.6 Property Tax Exemption. Developer may apply for a property tax exemption for the Property under any provision of law, including but not limited to, California Revenue and Taxation Section 214(g).
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ARTICLE 5
PROPERTY MANAGEMENT, MAINTENANCE AND RESIDENT SERVICES
5.1 Management Responsibilities. The Developer shall submit to the City an initial proposed Management Plan no later than six (6) months after the commencement of construction of the Development as set forth in the Agreement. The Developer shall submit to the City for approval the name and qualifications of a proposed management agent, a proposed management agreement and written guidelines or procedures for tenant selection (in compliance with the Agreement), operation and management of the Development, and implementation of the income certification and reporting requirements of this Regulatory Agreement (collectively, the “Management Plan”). The City shall approve or disapprove the Management Plan in writing within fifteen (15) calendar days following the City's receipt of the complete Management Plan, which approval shall not be unreasonably denied. If the Management Plan is disapproved by the City, the City shall deliver a written notice to the Developer setting forth, in reasonable detail, the reasons for such disapproval. The Developer shall have fifteen (15) calendar days following the receipt of such notice to submit a revised Management Plan. The provisions of this Section relating to time periods for approval, disapproval, and resubmission of the new Management Plan shall continue to apply until the Management Plan has been approved by the City. The Developer shall submit to the City any proposed changes to the Management Plan, which shall be reviewed and approved by the City as set forth above.
5.2 Management Agent. Developer shall cause the Development to be managed by an experienced management agent reasonably acceptable to the City, with a demonstrated ability to operate residential facilities like the Development in a manner that will provide decent, safe, and sanitary housing (the "Management Agent"). The City hereby approves Stanisliaus County Affordable Housing Corporation as the initial Management Agent. Developer shall also submit such additional information about the background, experience and financial condition of any proposed Management Agent as is reasonably necessary for the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the City shall approve the proposed Management Agent by notifying Developer in writing. Unless the proposed Management Agent is disapproved by the City within thirty (30) days, which disapproval is to state with reasonable specificity the basis for disapproval, it shall be deemed approved. Pursuant to California Code of Regulations title 25, Section 42 all projects with 16 or more units must have a resident manager living on the Property. The City will not consider maintenance personnel as a substitute or equivalent to a trained, in residence property manager.
5.3 Periodic Performance Review. The City reserves the right to conduct an annual (or more frequently, if deemed necessary by the City) review of the management practices and financial status of the Development. The purpose of each periodic review will be to enable the City to determine if the Development is being operated and managed in accordance with the requirements and standards of this Regulatory Agreement. Developer shall cooperate with the City in such reviews.
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For purposes of such periodic reviews, the Developer and the Management Agent shall make available to the City for inspection all books and records with respect to the Development.
In addition, the Developer shall provide the City with: (1) by not later than thirty (30) days prior to commencement of each Fiscal Year, the annual budget for the upcoming Fiscal Year; (2) within ninety (90) days following the end of each Fiscal Year, a report showing the actual income and expenditures with respect to the Development for the immediately preceding Fiscal Year and the status of all reserve funds; and (3) within one hundred twenty (120) days following the end of each Fiscal Year, a copy of the Developer's federal income tax filings for the Fiscal Year
5.4 Replacement of Management Agent.
(a) If, as a result of a periodic review, the City determines in its reasonable judgment that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Regulatory Agreement, the City shall deliver notice to Developer of its intention to cause replacement of the Management Agent, including the reasons therefor. Within fifteen (15) days after receipt by Developer of such written notice, the City staff and Developer shall meet in good faith to consider methods for improving the financial and operating status of the Development, including, without limitation, replacement of the Management Agent.
(b) If, after such meeting, City staff recommends in writing the replacement of the Management Agent, Developer shall promptly dismiss the then current Management Agent, and must take steps to appoint as the Management Agent a person or entity meeting the standards for a management agent set forth above and approved by the City, and shall promptly and as soon as practicable dismiss the then-current Management Agent. (c) Any contract for the operation or management of the Development entered into by Developer shall provide that the Management Agent may be dismissed and the contract terminated as set forth above. Failure to remove the Management Agent in accordance with the provisions of this Section constitutes a default under this Regulatory Agreement, and the City may enforce this provision through legal proceedings as specified in Section 6.7 below.
5.5 Approval of Management Policies. Developer shall submit its written management policies with respect to the Development to the City for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Regulatory Agreement.
5.6 Resident Services Provider.
(a) The Developer will be providing on-site services which Developer will make available to all residents in the Development (the "Resident Services"). Developer hereby agrees to contract for a resident services coordinator at least one (1) month prior to completion of the Development. The Developer shall submit to the City for approval the name and qualifications of any proposed services provider (the "Services Provider"). The Services Provider shall have demonstrated the ability to provide Resident Services in residential facilities like the Development in an effective manner. The Developer shall submit such additional #21..
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information about the background, experience and financial condition of any proposed Services Provider as is reasonably necessary for the City to determine whether the proposed Services Provider meets the standards for a qualified Services Provider of developments of this type. If the proposed Services Provider meets the standard for a qualified Services Provider set forth above, the City shall approve the proposed Services Provider by notifying Developer in writing.
Unless the proposed Services Provider is disapproved by the City within thirty (30) days, which disapproval is to state with reasonable specificity the basis for disapproval, it shall be deemed approved. The City hereby approves Stanislaus County Affordable Housing Corporation as the initial Services Provider for the Development.
(b) The Developer shall submit to the City and initial proposed Resident Services Plan and Resident Services Budget no later than six (6) months after the commencement of construction of the Development. Each year thereafter, within sixty (60) days of the end of the Developer's fiscal year, the Developer shall furnish to the City a draft Resident Services Plan and Resident Services Budget. Upon receipt by the City of the proposed Resident Services Plan and Resident Services Budget, the City shall promptly review the same and approve or disapprove the Resident Services Plan and the Resident Services Budget within ten (10) working days. If the Resident Services Plan or Resident Services Budget are not approved by the City, the City shall set forth in writing and notify the Developer of the City's reasons for withholding such approval, which may include a request by the City for a change in the nature or scope of resident services or a change in service provider. The Developer shall thereafter submit a revised Resident Services Plan and Resident Services Budget for City approval, which approval shall be granted or denied within five (5) working days in accordance with the procedures set forth above. The Resident Services Budget shall show required expenditures from Annual Operating Expenses, and may include an annual sum dedicated for Resident Services consistent with the Developer's commitment to the Tax Credit Allocation Committee and subject to the approval of the City, provided however the Operating Expenses line item for Resident Services may be increased in such amount approved by the City prior to commencement of the Fiscal Year, pursuant to the procedure for submission and approval of the Resident Services Plan and Resident Services Budget as set forth above.
5.7 Property Maintenance.
(a) Developer shall maintain, for the entire Term of this Regulatory Agreement, all interior and exterior Improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition), subject to reasonable wear and tear, and in accordance with the approved Management Plan, and all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials, and in a decent, safe, sanitary condition and in good repair. (b) The City places prime importance on quality maintenance to protect its investment and to ensure that all City and City-assisted affordable housing projects within the City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the City assuming Developer agrees to provide all necessary improvements to assure the Development is maintained in good condition. In addition, the Developer shall keep the Development free from all graffiti, and any accumulation of #21..
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11 5570150.1
shopping carts, debris or waste material. The Developer shall promptly make all repairs and replacements necessary to keep the Development in first-class condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials.
(c) In the event that Developer breaches any of the covenants contained in this section and such default continues for a period of five (5) days after written notice from the City with respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after written notice from the City with respect to landscaping and building improvements, then the City, in addition to whatever other remedy it may have at law or in equity, has the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City is permitted (but is not required) to enter upon the Property and to perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, which amount shall be promptly paid by Developer to the City upon demand.
5.8 Crime Prevention Program. During the Term of this Regulatory Agreement Developer agrees to participate in the City of Modesto Police Department's Crime Free MultiHousing program or similar program administered by the City (the "Crime Prevention Program"). The City's periodic review of the management of the Development pursuant to Section 5.3 will include an evaluation of Developer's participation in the Crime Prevention Program.
ARTICLE 6
MISCELLANEOUS
6.1 Lease Provisions. In leasing the Units within the Development, Developer shall use a form of written lease approved by the City. The form of lease must comply with all requirements of this Regulatory Agreement and must, among other matters:
(a) Provide for termination of the lease for failure to: (1) provide any information required under this Regulatory Agreement or reasonably requested by Developer to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy in the Development in accordance with the standards set forth in this Regulatory Agreement; or (2) qualify as an Extremely Low Income Household as a result of any material misrepresentation made by such Tenant with respect to the income computation. (b) Be for an initial term of not less than one (1) year, unless by mutual agreement between the Tenant and Developer, and provide for no increase in Rent during such year. After the initial year of tenancy, the lease may be month-to-month by mutual agreement of Developer and the Tenant. Notwithstanding the above, any rent increases are subject to the requirements of Section 2.3 (a) above.
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12 5570150.1
(c) Include a provision which requires a Tenant who is residing in a Unit required to be accessible pursuant to Section 2.4 and who is not in need of an accessible Unit to move to a non-accessible Unit when a non-accessible Unit becomes available and another Tenant or prospective Tenant is in need of an accessible Unit.
6.2 Lease Termination. Any termination of a lease or refusal to renew a lease for an Assisted Unit within the Development must be preceded by not less than sixty (60) days written notice to the Tenant by Developer specifying the grounds for the action.
6.3 Nondiscrimination.
(a) All of the Units must be available for occupancy on a continuous basis to members of the general public who are income eligible. Except as provided in subsection (c) below, Developer may not give preference to any particular class or group of persons in renting or selling the Units, except to the extent that the Units are required to be leased to income eligible households pursuant to this Regulatory Agreement. Developer herein covenants by and for Developer, assigns, and all persons claiming under or through Developer, that there exist no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, source of income (e.g., SSI), ancestry, disability, age, or military and veteran status, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor will Developer or any person claiming under or through Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the construction, operation and management of any Unit. Developer shall comply with Executive Orders 11246, 11375, 11625, 12138, 12431, 12250, 13672, Title VII of the Civil Rights Act of 1964, the California Fair Housing and Employment Act and other applicable Federal, State and local laws and regulations and policies relating to equal employment and contracting opportunities, including laws and regulations hereafter enacted.
(b) Developer shall accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. Developer may not apply selection criteria to Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other prospective Tenants, nor will Developer apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Tenants.
6.4 Term. The provisions of this Regulatory Agreement apply to the Property for the entire Term. This Regulatory Agreement binds any successor, heir or assign of Developer, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by City.
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13 5570150.1
6.5 Notice of Expiration of Term.
(a) At least six (6) months prior to the expiration of the Term, Developer shall provide by first-class mail, postage prepaid, a notice to all Tenants containing: (1) the anticipated date of the expiration of the Term; (2) any anticipated increase in Rent upon the expiration of the Term; (3) a statement that a copy of such notice will be sent to the Count; and (4) a statement that a public hearing may be held by the City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. Developer shall also file a copy of the above-described notice with the City Manager, or the Community Development Manager.
(b) In addition to the notice required above, Developer shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (1) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Agencies (as defined in California Government Code Section 65863.10(a)) prior to the expiration of the Term; (2) a six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Agencies prior to the expiration of the Term; (3) a notice of an offer to purchase the Development to "qualified entities" (as defined in California Government Code Section 65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; and (4) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Development.
6.6 Covenants to Run With the Land. The City and Developer hereby declare their express intent that the covenants and restrictions set forth in this Regulatory Agreement run with the land, and bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Regulatory Agreement said covenants and restrictions expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, is to be held conclusively to have been executed, delivered and accepted subject to the covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the City expressly releases such conveyed portion of the Property from the requirements of this Regulatory Agreement.
6.7 Enforcement by the City. If Developer fails to perform any obligation under this Regulatory Agreement, and fails to cure the default within thirty (30) days after the City has notified Developer in writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, the City may enforce this Regulatory Agreement by any or all of the following actions, or any other remedy provided by law:
(a) Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel Developer's performance of its obligations under this Regulatory Agreement, and may seek damages.
(b) Remedies Provided Under Other Agreements. The City may exercise any other remedy provided under any other agreement of which the City is a party. #21..
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14 5570150.1
6.8 Attorneys' Fees and Costs. In any action brought to enforce this Regulatory Agreement, the prevailing party must be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section must be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.
6.9 Recording and Filing. The City and Developer shall cause this Regulatory Agreement, and all amendments and supplements to it, to be recorded in the Official Records of Stanislaus County.
6.10 Governing Law. This Regulatory Agreement is governed by the laws of the State of California.
6.11 Waiver of Requirements. Any of the requirements of this Regulatory Agreement may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Regulatory Agreement extends to or affects any other provision of this Regulatory Agreement, and may not be deemed to do so.
6.12 Amendments. This Regulatory Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title that is duly recorded in the official records of Stanislaus County.
6.13 Notices. Any notice requirement set forth herein will be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows:
City: City of Modesto
1010 Tenth Street, Suite 4400
Modesto, CA 95354
Attn: Community Development Manager
Developer: Modesto Homekey LP
c/o UP Holdings California, LLC
6083 N. Figarden Drive, #656
Fresno, CA 93722
Attention: Cullen J. Davis
Such addresses may be changed by notice to the other party given in the same manner as provided above.
6.14 Third Party Beneficiary. HCD is a third party beneficiary of this Regulatory Agreement with the right, but not the obligation, to enforce any provision or requirement contained herein.
6.15 Severability. If any provision of this Regulatory Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Regulatory Agreement will not in any way be affected or impaired thereby.
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15 5570150.1
6.16 Multiple Originals; Counterparts. This Regulatory Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
6.17 Revival of Agreement after Foreclosure. In the event there is a foreclosure of the Property, this Regulatory Agreement will revive according to its original terms if, during the Term, the owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the Development or Property. [Remainder of Page Left Intentionally Blank]
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Regulatory Agreement
Signature Page
WHEREAS, this Agreement has been entered into by the undersigned as of the date first written above.
DEVELOPER:
MODESTO HOMEKEY LP,
a California limited partnership
By: UP MODESTO LLC,
a California limited liability company,
its General Partner
By: UP Holdings California, LLC,
an Illinois limited liability company registered
to do business in the State of California,
its Sole Member
By: ___________________________
Cullen J. Davis,
Manager
By: RHCB MODESTO LLC,
a California limited liability company,
its General Partner
By: RHCB Development LP,
a California limited partnership,
its Sole Member
By: WRBH LLC,
a California limited liability company,
its General Partner
By: _________________________
Wayne Rutledge,
Manager
By: HOM XXX LLC,
a Delaware limited liability company,
its Managing General Partner
By: Housing on Merit,
a California nonprofit public benefit corporation,
its Manager
By: _____________________________
Jennifer Litwak,
Executive Director
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Regulatory Agreement
Signature Page
CITY:
CITY OF MODESTO, a California charter city
By: _____________________________________
Joseph Lopez, City Manager
Date: ______________________________________
ATTEST:
________________________________
Diane Nayares-Perez, CMC, City Clerk
APPROVED AS TO FORM:
By: ___________________________
Jose M. Sanchez, City Attorney
APPROVED AS TO RISK MANAGEMENT:
By: _________________________________
SIGNATURES MUST BE NOTARIZED
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. #21..
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A-1
EXHIBIT A
LEGAL DESCRIPTION
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C-1
EXHIBIT B
INITIAL/ANNUAL CERTIFICATE OF
PROGRAM COMPLIANCE
_______________________ ("Owner"), hereby certifies that it will comply with all applicable, ongoing requirements for the Property's Affordability Period which has been determined to be fiftyfive (55) years from the date of issuance of the Certificate of Occupancy for the above-described Development. Affordability shall be maintained as follows:
Seven (7) units are being made available to Extremely-Low Income Households.
During the term of the Regulatory Agreement the Owner will ensure that these units are occupied or, if vacant, available for occupancy, by Extremely Low Income Households.
Property owners and managers have participated in the Modesto Police Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other resources are provided to multi-family property owners and managers to reduce the potential for onsite criminal activity.
Completion of the Department's four (4) training phases, a Final Certification has been achieved and will be maintained by the owner/representative and/or regional/onsite property manager.
Owner is maintaining and attaching the following records and reports in order to assist the City in meeting its record keeping and reporting requirements under and City Regulatory Agreement:
1. Files on the annual review and certification of tenant income;
2. All information on the qualification of affordable rents;
3. Terms and conditions of all signed leases between Tenants and Owner;
4. All other reports and records requested by City.
Dated: _______________
OWNER:
By: ________________________________
Title: ________________________________
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C-2
1669\01\2466400.1
CERTIFICATE OF
CONTINUING PROGRAM COMPLIANCE
The following information is being provided by ___________________________ (the "Owner") to the City of Modesto, (the "City"), pursuant to that certain Agreement dated as of _________, 202_, as such may be amended from time to time, and the Regulatory Agreement dated as of ________, 202_, as such may be amended from time to time, with respect to the Development:
(A) Owner will comply with all applicable, ongoing requirements for the fifty-five (55) year Term from the date of issuance of the certificate of occupancy for the above-described project, and the ongoing City imposed affordability requirements for balance of the Property's Affordability Period which has been determined to be fifty-five (55) years from the date of issuance of the Certificate of Occupancy for the above-described project. (B) The total number of residential units which are completed and available for occupancy is .
The total number of such units occupied is .
(C) The following residential units (identified by unit number) have been designated Assisted Units, as described in the Regulatory Agreement (for a total of ); (D) The following residential units which are included in (B) above, have been designated as Assisted Units since , 20____, the date on which the last "Certificate of Continuing Program Compliance" was filed with the City by ; Unit Number Previous Designation of
Unit (if any) Replacing Unit Number
(E) The following residential units are considered to be occupied by Extremely Low Income Households based on the information set forth below:
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C-3
1669\01\2466400.1
Number
of Unit
Date of
Unit
No.
Name of Tenant
Persons
Residing
in Unit
Total
Adjusted
Gross
Income
Initial
Occupancy
Monthly
Rental
Amount
Attach a Separate Sheet if Necessary
(F) In renting the residential units in the Development, Owner has not given preference to any particular group or class of persons not allowed under the Regulatory Agreement.
All of the residential units in the Development have been rented pursuant to a written lease, and the term of each lease is at least twelve months. A copy of the form lease for Assisted Units is attached.
(G) Property owners and managers have participated in the Modesto Police Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other resources are provided to multi-family property owners and managers to reduce the potential for onsite criminal activity. Completion of the Department's three (3) training phases, a Final Certification (Phase V) has been achieved and is being maintained by the owner/representative and/or regional/-onsite property manager. (H) Each building in the Development and all Assisted Units in the Development are suitable for occupancy and comply with all applicable State and local health, safety and other applicable codes, ordinances, and requirements and the ongoing property standards, as specified in the Regulatory Agreement.
(I) The information provided in this "Certificate of Continuing Program Compliance" is accurate and complete, and no matters have come to the attention of Owner which would indicate that any of the information provided herein, or in any "Certification of Tenant Eligibility" obtained from the tenants named herein, is inaccurate or incomplete in any respect.
[Signature Page Follows.]
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C-4
1669\01\2466400.1
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of Owner, on this day of , 20 .
OWNER:
By: ______________________________________
___________, Executive Director
Date: ______________________________________
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EXHIBIT C
FORM OF CERTIFICATION OF TENANT ELIGIBILITY
Rental Unit
Street Address Unit No
City Zip Code
I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully and truthfully each of the following questions for all persons who are to occupy the unit in the above Development for which application is made, all of whom are listed below:
1. 2. 3. 4. 5.
Name of Members
in the Household
Relationship to
Head of Household Age Ethnicity Place of Employment
Ethnicity: ❑ White ❑ Black or African American ❑ Asian ❑ Asian & White ❑ American Indian or Alaska Native
❑ Native Hawaiian or Other Pacific Islander ❑ American Indian or Alaska Native & White ❑ Black or African American & White
❑ American Indian or Alaska Native & Black or African American ❑ Other Multi Race ❑ Hispanic
Date of Occupancy of Rental Unit by Tenant:
Date of Lease Signed for Rental Unit by Tenant:
Amount of Rent Paid Per Month:
Certification Date (Earlier of Date of Occupancy or Date Lease signed):
6. Anticipated Annual Income. The anticipated total annual income from all sources of each person listed in Section 1 for the twelve (12) month period beginning on the Certification Date listed above, including income described in (a) below, but excluding all income described in (b) below, is $ .
(a) The amount set forth above includes all of the following income (unless such income is described in (b) below): all wages and salaries, overtime pay, commissions, fees, tips and bonuses before payroll deductions; net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of #21..
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capital indebtedness or any allowance for depreciation of capital assets); interest and dividends (including income from assets as set forth in item 7(b) below); full amount of periodic payments received from Social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts; payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay; the maximum amount of public assistance available to the above persons; periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and any earned income tax credit to the extent it exceeds income tax liability. (b) The following income is excluded from the amount set forth above: casual, sporadic or irregular gifts; amounts that are specifically for or in reimbursement of medical expenses; lump sum additions to family assets, such as inheritances, insurance payment (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; amounts of educational scholarships paid directly to student or educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either case only to the extent used for such purposes; hazardous duty pay to a member of the household in the armed forces who is away from home and exposed to hostile fire; relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; income from employment of children (including foster children) under the age of eighteen (18) years; foster child care payments; the value of coupon allotments under the Food Stamp Act of 1977; payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act; income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; payments on allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program; and payments received from the Job Partnership Training Act.
7. Net Family Assets. If any of the persons described in item 1 above (or any person whose income or contributions were included in item 6) has any savings, stocks, bonds, equity in real property or other form of capital investment (excluding interests in Indian trust lands), provide:
(a) the total value of all such assets owned by all such persons: $ , and
(b) the amount of income expected to be derived from such assets in the twelve (12) month period commencing this date: $ .
8. Students
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(a) Will any of the persons listed in item 1 above be or have they been full-time students during five (5) calendar months of this calendar year at an educational institution (other than a correspondence school) with regular faculty and students? Yes No
(b) (Complete only if the answer to Question 8(a) is "Yes"). Is any such person (other than nonresident aliens) married and eligible to file a joint federal income tax return, a veteran of the U.S. military?
Yes No
The above information is full, true, and complete to the best of my knowledge. I have no objections to inquiries being made for the purpose of verifying the statements made herein.
Signature: Date
(Signature Must be Notarized)
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FOR COMPLETION BY DEVELOPMENT OWNER ONLY:
A. Calculation of eligible income:
(1) Enter amount entered for entire household in 6 above: $ (2) If the amount entered in 7(a) above is greater than $5,000, enter $ (i) the product of the amount entered in 7(a) above multiplied by the current passbook savings rate as determined by HUD: $ (ii) the amount entered in 7(b) above: $
(iii) enter the greater of line (i) or line (ii): $
(3) TOTAL ELIGIBLE INCOME (Line A(1) plus line A(2)(iii)): $ B. Enter number of family members listed in item 1 above:
C. The amount entered in A(3) (Total Eligible Income) is: $ Less than $__________ of median income for the area in which the Development is located, which is the maximum income at which a household may be determined to be a qualifying tenant as that term is defined in the Agreement.
More than the above-mentioned amount.
D. Number of units assigned:
E. Monthly rent: $
F. This unit (was/was not) last occupied for a period of thirty-one (31) consecutive days by a person or persons whose adjusted income, as certified in the above manner, was equal to or less than the amount at which a person would have qualified as a qualifying tenant under the terms of the Agreement.
G. Applicant:
Qualifies as a qualifying tenant.
Does not qualify as a qualifying tenant.
5570150.1
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1 MOA (Rev. 7/01/2023)
MEMORANDUM OF AGREEMENT
BETWEEN
COUNTY OF STANISLAUS
COMMUNITY SERVICES AGENCY
AND CITY OF MODESTO
FOR FUNDING OF THE TRAVELERS MOTEL PERMANENT SUPPORTIVE HOUSING PROJECT DECEMBER 1, 2023 THROUGH APRIL 30, 2026
This MEMORANDUM OF AGREEMENT (“MOA”) is entered by and between the COUNTY OF STANISLAUS COMMUNITY SERVICES AGENCY, ("CSA") and CITY OF MODESTO, (“CITY”), for the purpose of establishing the responsibilities of both parties for the provision of funding for the Travelers Motel for the building of Permanent Supportive Housing Units, as of December 1, 2023, or the execution of the MOA by both parties (the “Effective Date”).
WHEREAS, CSA is the “Administrative Entity” for the Stanislaus Community System of Care (CSOC);
WHEREAS, CSOC applied through the California Interagency Council on Homelessness (Cal ICH) authorized by AB 140, AB 140 (Health & Safety Code § 50218.6, et seq.), for the Homeless Housing, Assistance and Prevention (HHAP) Grant Program Round 3 and Round 4; WHEREAS, CITY released an Affordable Housing Request for Proposal (RFP) where RH Community Builders submitted a proposal for the rehabilitation of the Travelers Motel located at 710 North 9th Street, Modesto, California 95350 to serve as a fifty-six (56) unit permanent supportive housing and was awarded the project;
WHEREAS, on April 20, 2023 CSOC approved to allocate Round 3 and Round 4 HHAP Grant Program funds to support the Travelers Motel to permanent supportive housing project; WHEREAS, CSA and CITY are entering into this MOA to clearly identify the roles and responsibilities of each Party, including payment of costs incurred for the for the rehabilitation of Travelers Motel to permanent supportive housing; and
NOW, THEREFORE, both parties have agreed to the following:
1. CITY AGREES TO THE FOLLOWING:
1.1 Design, permit and rehabilitate fifty-six (56) units at the Travelers Motel. Fifty-five (55) units will serve as a permanent supportive housing and one (1) unit will serve as the on-site manager unit. The fifty-six (55) permanent supportive housing units shall be utilized for the following:
1.1.1 Thirty-eight (38) units will be for youth ages twelve (12) to twenty-four (24) who are homeless or at risk of homelessness;
1.1.2 Of the fifty-six (56) units, eight (8) units will meet the Americans with Disabilities Act (ADA) standards; and
1.1.3 Seventeen (17) units will serve the general population experiencing homelessness.
1.2 Enter into an Agreement with RH Community Builders to complete the rehabilitation of the Travelers Motel into a permanent supportive housing project. #21..
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2 MOA (Rev. 7/01/2023)
1.3 CITY shall receive HHAP Round 3 and Round 4 Grant Program allocation funds for the rehabilitation of the Travelers Motel to support the permanent housing project, not to exceed $1,775,077.
1.4 CITY shall secure funding from the following sources to complete the project and have permanent supportive housing fully operational by October 31, 2024. The following funding sources will be used to complete the project:
1.4.1 California Department of Housing and Community Development – Homekey Program Grant Funding Round 3;
1.4.2 US Department of Housing and Urban Development - Community Development Block Grant; and
1.4.3 California Advancing and Innovating Medi-Cal – Housing and Homelessness Incentive Program.
1.5 CITY and its contractors shall faithfully comply with all of the Grant requirements set forth in EXHIBIT C, and all Special Terms and Conditions, EXHIBIT D, which is attached hereto and, by this reference, made a part hereof. CITY shall include the requirements in EXHIBIT C and EXHIBIT D in all contracts and subcontracts entered into by CITY in connection with the project.
2. CSA AGREES TO THE FOLLOWING:
2.1 CSA shall provide CITY with $1,775,077 of Round 3 and Round 4 HHAP Grant Program funds for the rehabilitation of the Travelers Motel into permanent supportive housing project.
3. CSA AND CITY MUTUALLY AGREES TO THE FOLLOWING:
3.1 CSA and CITY shall each assign a lead staff person to communicate, coordinate issues, and resolve problems.; and
3.2 Adhere to applicable federal and state laws, regulations, and guidelines.
4. REPORTING:
4.1 CITY shall provide information and reports through the completion of the permanent housing project in the form and format required by CSA, which includes but not limited to the following:
4.1.1 Monthly project update to CSA Manager via email; and
4.1.2 Quarterly project update at the CSOC board meeting.
5. COMPENSATION:
CITY shall be compensated for the services provided under this MOA as follows:
5.1 Costs:
5.1.1 The maximum amount of this MOA for the period December 1, 2023, through April 30, 2026, shall not exceed $1,775,077.
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5.1.2 CITY shall not expend any funds provided pursuant to this MOA except as expressly authorized in EXHIBIT A, or as the budget is thereafter amended or obligated.
6. TERM:
6.1 The term of this MOA shall be from the Effective Date, through April 30, 2026, or until completion of the agreed upon services unless sooner terminated as provided below or by some other method provided for in this MOA.
6.2 Should either party default in the performance of this MOA or materially breach any of its provisions, the other party, at that party's option, may terminate this MOA by giving written notification to the other party.
6.3 This MOA shall terminate automatically if the CITY (a) has a cancellation of insurance required under the terms of this MOA, and (b) if, for any reason, CITY ceases to be licensed or otherwise authorized to do business in the State of California, and the CITY fails to remedy such defect or defects within thirty (30) days of receipt of notice of such defect or defects.
6.4 This MOA may be terminated by either party without cause when a thirty (30) day written notice is provided to the other party.
7. INSURANCE:
Coverage Required: CITY shall obtain, and maintain at all times during the term of this MOA, insurance coverage in the amounts and coverage specified in EXHIBIT B, which is attached hereto and, by this reference, made a part hereof.
8. DEFENSE AND INDEMNIFICATION:
8.1 To the fullest extent permitted by law, CITY shall indemnify, hold harmless and defend the CSA and its agents, officers and employees from and against all claims, damages, losses, judgments, liabilities, expenses and other costs, including litigation costs and attorneys’ fees, arising out of, resulting from, or in connection with the performance of this MOA by CITY or CITY’s officers, employees, agents, representatives or subcontractors and this indemnification obligation extends to and includes personal injury, death, or damage or destruction to tangible or intangible property, including the loss of use; provided, however, such indemnification shall not extend to or cover loss, damage or expense arising from the gross negligence or willful misconduct of CSA or its agents, officers and employees.
8.2 CITY’s obligation to defend, indemnify and hold the CSA and its agents, officers and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this MOA for CITY to procure and maintain a policy of insurance for the duration of this MOA. CITY shall notify CSA in writing within forty-eight (48) hours if CITY’s insurance policy lapses or is cancelled for any reason.
8.3 CITY shall indemnify, defend and hold harmless and shall be responsible for any and all federal, state and local taxes, fees, or contributions required to be paid with respect to CITY and CITY’s officers, employees, and agents engaged in the performance of this MOA, including and without limitation unemployment insurance, social security and payroll tax withholding.
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9. NOTICE:
Any notice, communication, amendment, addition or deletion to this MOA, including change of address of either party during the term of this MOA shall be made within thirty (30) days in writing to the address or to the email listed below as follows to the respective parties:
To CSA: County of Stanislaus
Community Services Agency
Attention: Contracts Manager
PO Box 42
Modesto, CA 95353
Or
[email protected]
To CITY: City of Modesto
Attention: Joseph P. Lopez, City Manager
1010 Tenth Street, Suite 3100
Modesto, CA 95354
Or
[email protected]
10. AMENDMENT:
This MOA may be modified, amended, changed, added to or subtracted from by the mutual consent of CSA and CITY hereof if such amendment or change is in written form and executed with the same formalities as this MOA and attached to the original of this MOA.
11. ENTIRE MOA:
This MOA supersedes any and all other MOA’s, either oral or in writing, between any of the parties herein with respect to the subject matter hereof and contains all the agreements between the parties with respect to such matter. Each party acknowledges that no representations, inducements, promises or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein, and that no other agreement, statement or promise not contained in this MOA shall be valid or binding.
12. AUTHORIZED SIGNATURE:
12.1 The person signing this MOA (“Signatory”) represents and warrants that he or she is duly authorized and has legal capacity to execute this MOA. Signatory represents and warrants that the execution and delivery of the MOA and the performance of CITY’s obligations hereunder has been duly authorized and that the MOA is a valid and legal agreement binding on CITY and enforceable in accordance with its terms.
12.2 This MOA may be executed in counterparts, each of which shall be deemed to be an original but all of which, taken together, shall constitute on and the same MOA. #21..
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13. ELECTRONIC SIGNATURES:
Each party agrees that the electronic signatures (whether digital or encrypted) of the parties included in this MOA are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record (including facsimile or email electronic signatures) pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code § 1633.1 et seq.) as amended from time to time.
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IN WITNESS WHEREOF, the parties or their duly authorized representatives have executed this MOA on the day and year first hereinabove written.
COUNTY OF STANISLAUS
COMMUNITY SERVICES AGENCY CITY OF MODESTO
By: By:
Christine Huber, MSW Joseph P. Lopez
Title: Director Title: City Manager
Dated: Dated:
APPROVED AS TO FORM: APPROVED AS TO FORM:
COUNTY COUNSEL CITY OF MODESTO ATTORNEY
By: By:
Jose M. Sanchez
Title: Deputy County Counsel Title: City Attorney
Dated: Dated:
COUNTY OF STANISLAUS
Approved BOS Resolution #:
Dated:
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EXHIBIT A
BUDGET
FOR
FUNDING OF THE TRAVELERS MOTEL FOR PERMANENT SUPPORTIVE HOUSING DECEMBER 1, 2023 THROUGH APRIL 30, 2026
The maximum amount of this Agreement for the period December 1, 2023, through April 30, 2026, shall not exceed $$1,775,077.
BUDGET CATEGORY TOTAL
Rehabilitation to the Structure of Travelers Motel $1,775,077
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RESERVED FOR INSURANCE EXHIBIT B
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RESERVED FOR INSURANCE EXHIBIT B
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RESERVED FOR INSURANCE EXHIBIT B
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RESERVED FOR INSURANCE EXHIBIT B
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EXHIBIT C
GRANT REQUIREMENTS
1. HOMELESS HOUSING , ASSISTANCE AND PREVENTION PROGRAM
1.1. The State of California has established the Homeless Housing, Assistance, and Prevention Program Round 3 ("HHAP-3") and Homeless Housing, Assistance, and Prevention Program Round 4 (“HHAP-4”) pursuant to Chapter 6 (commencing with Section 50216) of Part 1 of Division 31 of the Health and Safety Code. (Amended by Stats. 2021, Ch. 111, Sec. 4. (AB 140) Effective July 19, 2021.)
1.2. This Memorandum of Agreement along with all its exhibits ("MOA") is entered into by CSA and CITY under the authority of, and in furtherance of the purpose of, the HHAP-3 and HHAP-4. In signing this MOA and thereby accepting this award of funds, CITY agrees to comply with the terms and conditions of the MOA.
1.3. HHAP-3:
1.3.1. The general purpose of the HHAP-3 is to continue to build on regional coordination developed through previous rounds of funding of the Homelessness Emergency Aid Program (Chapter 5(commencing with Section 50210)), the program established under this chapter, and COVID-19 funding to reduce homelessness. This funding shall:
1.3.1.1. Continue to build regional collaboration between continuums of care, counties, and cities in a given region, regardless of population, and ultimately be used to develop a unified regional response to homelessness.
1.3.1.2. Be paired strategically with other local, state, and federal funds provided to address homelessness in order to achieve maximum impact. Grantees of this funding are encouraged to reference Putting the Funding Pieces Together: Guide to Strategic Uses of New and Recent State and Federal Funds to Prevent and End Homelessness in their planning efforts.
1.3.1.3. Be deployed with the goal of reducing the number of people experiencing homelessness in a given region through investing in long-term solutions, such as permanent housing.
1.4. HHAP-4
1.4.1. The general purpose of the HHAP-4 is to (1) reduce homelessness by expanding or developing local capacity to address immediate homelessness challenges informed by a best-practices framework focused on moving homeless individuals and families into permanent housing and supporting the efforts of those individuals and families to maintain their permanent housing; and (2) continue to build on regional coordination developed through previous rounds of HHAP funding (Chapter 6 (commencing with HSC section 50216). This funding shall:
1.4.1.1. Continue to build regional collaboration between continuums of care, counties, and cities in a given region, regardless of population, and #21..
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ultimately be used to develop a unified regional response to homelessness.
1.4.1.2. Be paired strategically with other local, state, and federal funds provided to address homelessness in order to achieve maximum impact. Grantees of this funding are encouraged to reference Putting the Funding Pieces Together: Guide to Strategic Uses of New and Recent State and Federal Funds to Prevent and End Homelessness to assist in using funding strategically for their planning efforts in the delivery of services to people experiencing homelessness in the community.
1.4.1.3. Be deployed with the goal of reducing the number of people experiencing homelessness in a given region through investing in long-term solutions, such as permanent housing.
2. TIME
2.1. CITY shall strictly comply with all of the deadlines in the MOA. All the HHAP Round 3 and Round 4 grant funds (100 percent) must be expended by April 30, 2026.
2.2. CSA reserves the right to add any special conditions to this MOA it deems necessary to ensure that the goals of HHAP-3 and HHAP-4 are achieved.
3. REPORTING
Reporting Requirements. CITY shall provide information and reports in the form and format required by CSA.
4. TRANSFERS
4.1. CSA may not transfer or assign to the CITY, or by any other means, the rights, duties, or performance, the rights, duties or performance of the Agreement with The State of California has established the HHAP-3 and HHAP-4 pursuant to Chapter 6 (commencing with Section 50216) of Part 1 of Division 31 of the Health and Safety Code. (Amended by Stats. 2021, Ch. 111, Sec. 4. (AB 140) Effective July 19, 2021.) or any par thereof, expect as allowed within the Special Conditions- Grantees/ Sub/ Grantee section.
5. SPECIAL CONDITIONS- GRANTEES/ SUBGRANTEE
5.1. The CITY agrees to comply with all Special Terms and Conditions, EXHIBIT D, which is attached hereto and, by this reference, made a part hereof . These conditions shall be met to the satisfaction of Cal ICH. CSA shall ensure that CITY is aware of and agrees to comply with all conditions of the Agreement and the applicable State requirements governing HHAP Round 3 and Round 4 funds. Failure to comply with these conditions may result in termination of this MOA.
5.1.1. CITY shall perform the work in accordance with Federal, State, and Local housing building codes;
5.1.2. Maintain at least the minimum State-required worker’s compensation for those employees who will perform the work of any part of it.
5.1.3. Maintain, as required by law, unemployment insurance, disability insurance and liability insurance in an amount that is reasonable to compensate any person, firm #21..
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or corporation who may be injured or damaged by the CITY or subcontractor in performing the work or any part of it.
5.1.4. Agree to include all there all terms listed in Grant Requirements, EXHIBIT C, in each subcontract.
6. FINANCIAL AUDIT
6.1. CSA reserves the right to perform or cause to be performed a financial audit. At CSA request, CITY shall provide, at its own expense, a financial audit prepared by a certified public accountant, the Program administrative funds may be used to fund this expense.
Should an audit be required, CITY shall adhere to the following conditions.
6.1.1. The audit shall be performed by an independent certified public accountant.
6.1.2. CITY shall notify CSA of the auditor's name and address immediately after the selection has been made. The contract for the audit shall allow access by CSA to the independent auditor's working papers.
6.1.3. CITY is responsible for the completion of audits and all costs of preparing audits.
6.1.4. If there are audit findings, CITY must submit a detailed response acceptable to CSA for each audit finding within ninety (90) days from the date of the audit finding report.
7. RECORD INSPECTION
CSA or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance under this MOA. CITY agrees to provide CSA, or its designee, with any relevant information requested. CITY agrees to give CSA or its designee access to its premises, upon reasonable notice and during normal business hours, for the purpose of interviewing employees who might reasonably have information related to such records, and of inspecting and copying such books, records, accounts, and other materials that may be relevant to an investigation of compliance with the Homeless Housing, Assistance, and Prevention Program laws, the Program guidance document published on the website, and this MOA.
8. RECORD RETENTION
8.1. CITY further agrees to retain all records relating to this MOA for a minimum period of five (5) years after the termination of this MOA.
8.2. If any litigation, claim, negotiation, audit, monitoring, inspection or other action has been commenced before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues which arise from it.
9. BREACH OF THIS AGREEMENT
9.1. Breach of this Agreement includes, but is not limited to, the following events:
9.1.1. CITY's failure to comply with the terms or conditions of this MOA.
9.1.2. Use of, or permitting the use of, the HHAP-3 and HHAP-4 funds provided under this MOA for any ineligible activities.
9.1.3. Any failure to comply with the deadlines set forth in this MOA. #21..
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10. WAIVERS
No waiver of any breach of this MOA shall be held to be a waiver of any prior or subsequent breach.
The failure of CSA to enforce at any time the provisions of this MOA, or to require at any time, performance by CITY of these provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this MOA or the right of CSA to enforce these provisions.
11. NONDISCRIMINATION
During the performance of this MOA, CITY and its subrecipients shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex (gender), sexual orientation, gender identity, gender expression, race, color, ancestry, religion, creed, national origin (including language use restriction), pregnancy, physical disability (including HIV and AIDS), mental disability, medical condition (cancer/genetic characteristics), age (over 40), genetic information, marital status, military and veteran status, and denial of medical and family care leave or pregnancy disability leave. CITY and Sub grantees shall ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. CITY and its subrecipients shall comply with the provisions of California's laws against discriminatory practices relating to specific groups: the California Fair Employment and Housing Act (FEHA) (Gov. Code,§ 12900 et seq.); the regulations promulgated thereunder (Cal.
Code Regs., tit. 2, § 11000 et seq.); and the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code, §§ 11135 - 11139.5). CITY and its subrecipients shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
12. COMPLIANCE WITH LAWS
12.1. The CITY agrees to comply with all state and federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, environmental protection, equal opportunity, fair housing, and all other matters applicable and/or related to the HHAP-3 and HHAP-4 program, the CITY, its subrecipients, and all eligible activities.
12.2. CITY shall also be responsible for obtaining any and all permits, licenses, and approvals required for performing any activities under this MOA, including those necessary to perform design, construction, or operation and maintenance of the activities. CITY shall be responsible for observing and complying with any applicable federal, state, and local laws, rules or regulations affecting any such work, specifically those including, but not limited to, environmental protection, procurement, and safety laws, rules, regulations, and ordinances.
CITY shall provide copies of permits and approvals to CSA upon request.
13. DRUG-FREE WORKPLACE CERTIFICATION
Certification of Compliance: By signing this MOA, CITY hereby certifies, under penalty of perjury under the laws of State of California, that it and its contractors and subcontractors will comply with the requirements of the Drug-Free Workplace Act of 1990 (Gov. Code, § 8350 et seq.) and have or will provide a drug-free workplace by taking the following actions:
13.1. Publish a statement notifying employees and contractors that unlawful manufacture distribution, dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations, as required by Government Code section 8355, subdivision (a)(1).
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13.2. Establish a Drug-Free Awareness Program, as required by Government Code section 8355, subdivision (a)(2) to inform employees and contractors about all of the following:
13.2.1. The dangers of drug abuse in the workplace;
13.2.2. Its policy of maintaining a drug-free workplace;
13.2.3. Any available counseling, rehabilitation, and employee assistance program; and
13.2.4. Penalties that may be imposed upon employees for drug abuse violations.
13.3. Provide, as required by Government Code section 8355, subdivision (a)(3), that every employee and contractor that works under this MOA:
13.3.1. Will receive a copy of CITY's drug-free policy statement, and
13.3.2. Will agree to abide by terms of CITY's condition of employment or subcontract.
14. CHILD SUPPORT COMPLIANCE ACT
For any Contract Agreement in excess of $100,000, CITY acknowledges in accordance with Public Contract Code 7110, that:
14.1. CITY recognizes the importance of child and family support obligations and shall fully comply with all applicable state and Federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and
14.2. CITY, to the best of its knowledge, is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department.
15. INSPECTIONS
15.1. CITY shall inspect any work performed hereunder to ensure that the work is being and has been performed in accordance with the applicable Federal, State and/or local requirements, and this MOA.
15.2. CSA reserves the right to inspect any work performed hereunder to ensure that the work is being and has been performed in accordance with the applicable Federal, State and/or local requirements, and this MOA.
15.3. CITY agrees to require that all work that is determined based on such inspections not to conform to the applicable requirements be corrected and to withhold payments to the subrecipient until it is corrected.
16. SEVERABILITY
If any provision of this MOA, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of CSA, shall not affect any other provisions of this MOA and the remainder of this MOA shall remain in full force and effect. Therefore, the provisions of this MOA are and shall be deemed severable. #21..
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17. CLAIMS
CITY shall notify CSA immediately of any claim or action undertaken by or against it, which affects or may affect this MOA or CSA, and shall take such action with respect to the claim or action as is consistent with the terms of this MOA and the interests of CSA.
18. STATE OF CALIFORNIA GENERAL TERMS AND CONDITIONS
This exhibit is incorporated by reference and made part of this MOA. The General Terms and Conditions (GTC 04/2017) can be viewed at the following link:
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EXHIBT D
HOMELESS HOUSING, ASSISTANCE, AND PREVENTION PROGRAM ROUND 3 ANDROUND4
SPECIAL TERMS AND CONDITIONS
1. All proceeds from any interest-bearing account established by the CSA for the deposit of Homeless Housing, Assistance, and Prevention Program Round 3 ("HHAP-3") funds, along with any interestbearing accounts opened by subrecipients to the Grantee for the deposit of HHAP-3 funds and and Homeless Housing, Assistance, and Prevention Program Round 4 (“HHAP-4”) funds, must be used for eligible activities and reported on as required.
2. Per Health and Safety Codes (HSC) Section 50220.7 (g) and Section 50220.8 (g), any housingrelated activities funded with HHAP-3 and HHAP-4 funds, including but not limited to emergency shelter (per HSC § 50220.7(e)(8)(F) and § 50220.8(e)(8)(F)), rapid-rehousing, rental assistance, transitional housing and permanent supportive housing, must be in compliance or otherwise aligned with the core components of Housing First, as described in Welfare and Institutions Code section 8255, subdivision (b). Individuals and families assisted with these funds must not be required to receive treatment or perform any other prerequisite activities as a condition for receiving shelter, housing, or other services for which these funds are used. In addition, HHAP-3 and HHAP-4 funding shall be used to adopt a Housing First approach within the entire local homelessness response system, including outreach and emergency shelter, short-term interventions like rapid re-housing, and longer-term interventions like supportive housing.
3. CITY shall utilize its local Homeless Management Information System (HMIS) to track HHAP-3 and HHAP-4 funded projects, services, and clients served. CITY will ensure that HMIS data are collected in accordance with applicable laws and in such a way as to identify individual projects, services, and clients that are supported by HHAP-3 and HHAP-4 funding (e.g., by creating appropriate HHAP-3 and HHAP-4-specific funding sources and project codes in HMIS).
4. CITY shall participate in and provide data elements, including, but not limited to, health information, in a manner consistent with federal law, to the statewide Homeless Management Information System (known as the Homeless Data Integration System or "HDIS"), in accordance with their existing Data Use Agreement entered into with the Council, if any, and as required by Health and Safety Code section 50220.6 and Welfare and Institutions Code section 8256. Any health information provided to, or maintained within, the statewide Homeless Management Information System shall not be subject to public inspection or disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
For purposes of this paragraph, "health information" means "protected health information," as defined in Part 160.103 of Title 45 of the Code of Federal Regulations, and "medical information," as defined in subdivision (j) of Section 56.05 of the Civil Code. The Council may, as required by operational necessity, amend or modify required data elements, disclosure formats, or disclosure frequency. Additionally, the Council, at its discretion, may provide Grantee with aggregate reports and analytics of the data Grantee submits to HDIS in support of the Purpose of this Agreement and the existing Data Use Agreement.
5. CITY agrees to accept technical assistance as directed by California Interagency Council on Homelessness (Cal ICH) or by a contracted technical assistance provider acting on behalf of Cal ICH and report to Cal ICH on programmatic changes the grantee will make as a result of the technical assistance and in support of their grant goals. #21..
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6. CITY agrees to demonstrate a commitment to racial equity and, per Section 50222 (a)(2)(B), the grantee shall use data provided through HDIS to analyze racial disproportionality in homeless populations and, in partnership with Cal ICH, establish clear metrics and performance monitoring for achieving equity in provision of services and outcomes for Black, Native, and Indigenous, Latinx, Asian, Pacific Islanders and other People of Color who are disproportionately impacted by homelessness and COVID-19.
7. CITY should establish a mechanism for people with lived experience of homelessness to have meaningful and purposeful opportunities to inform and shape all levels of planning and implementation, including through opportunities to hire people with lived experience. #21..
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HHAP AGREEMENT
(Traveler’s Motel – 710 North 9th Street)
This Grant Agreement (this “Agreement”) is entered into as of ____________________, 2023, by and between the City of Modesto, a California charter city (the “City”) and Modesto Homekey LP, a California limited partnership (“Recipient”). City and Recipient are collectively referred to in this Agreement as the “Parties.”
RECITALS
A. Recipient owns, or has the contractual right to purchase, the real property and improvements located at 710 North 9th Street Modesto, California, also known as Stanislaus County Assessor’s Parcel Number _________________, as more particularly described and depicted in Exhibit A, attached hereto and incorporated herein (the “Property”).
B. The Recipient intends to rehabilitate a former motel located on the Property, commonly known as Travelers Motel, to serve as permanent supportive housing development consisting of fifty-six (56) units (the “Project”). Thirty-eight (38) units will be for youth ages twelve (12) to twenty-four (24) who are homeless or at risk of homelessness, and the remaining thirty-eight (38) units will serve the general population experiencing homelessness.
C. The County of Stanislaus Community Services Agency (“CSA”) is the Administrative Entity for the Stanislaus Community System of Care (“CSOC”). The CSOC previously applied for and obtained funding from the California Interagency Council (“CIC”) on Homelessness for the Homeless Housing, Assistance and Prevention (“HHAP”) Grant Program Round 3 and Round 4. CSOC approved allocating a portion of such HHAP funds to support the Project. City and CSA previously entered into an agreement whereby CSA agreed to provide HHAP funding to the City, and the City agreed to distribute and administer the HHAP funding for the Project.
D. City wishes to give to Recipient a grant of not to exceed One Million Seven Hundred Seventy Five Thousand Seventy Seven Dollars ($1,775,077) (the “Grant”) of HHAP funds to help finance the rehabilitation of the Property and improvements thereon required for the Project. The Grant must be expended by April 30, 2026.
E. As a condition to providing the Grant to the Recipient, the City is imposing occupancy and affordability restrictions on the Project, ensuring that specified units therein remain available and affordable to specified income eligible households for a specified period as set forth in the Regulatory Agreement and Declaration of Restrictive Covenants dated as of ________ (the “Regulatory Agreement”)
F. The California Environmental Quality Act (Public Resources Code Sections 21000 et seq.) (“CEQA”) imposes no conditions on the City's consideration and approval of this Agreement because the Project is exempt from CEQA requirements under the categorical exemption set forth in 14 California Code of Regulations Section 15303(b). #21..
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NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 EXHIBITS
Section 1.1 Exhibits
The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference:
Exhibit A: Legal Description
Exhibit B: Project Summary
Exhibit C: Approved Project Budget
Exhibit D: HHAP Requirements
ARTICLE 2 GRANT PROVISIONS
Section 2.1 Grant.
Upon satisfaction of the conditions set forth in Section 2.3 and Section 2.4 of this Agreement, the City shall grant to the Recipient HHAP Funds in the amount not to exceed One Million Seven Hundred Seventy Five Thousand Seventy Seven Dollars ($1,775,077) (the “Grant”) for the purposes set forth in Section 2.3. No Grant funds will be disbursed by City to Recipient after April 30, 2026.
Section 2.2 Use of Grant Funds.
The Recipient shall use the proceeds of the Grant solely to finance the rehabilitation of the Property for the purposes of the Project, as described in Exhibit B.
Section 2.3 Conditions Precedent to Disbursement of Grant Funds.
The maximum amount of funds to be disbursed pursuant to this Section 2.3 shall not exceed the amount of the Grant. The City shall not be obligated to make any disbursements of Grant funds for acquisition of the Property or take any other action under the Grant Documents unless the following conditions precedent have been and continue to be satisfied prior to each such disbursement of Grant funds:
2.3.1 There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement;
2.3.2 Recipient has delivered to the City a copy of a corporate resolution authorizing Recipient's execution of the Agreement;
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2.3.3 There exists no material adverse change in the financial condition of Recipient from that shown by the financial statements and other data and information furnished by Recipient to the City prior to the date of this Agreement;
2.3.4 The Recipient has furnished the City with evidence of the insurance coverage meeting the requirements of this Agreement;
2.3.5 Recipient has caused to be executed and delivered to the City the Agreement and the Regulatory Agreement;
2.3.7 The City has reasonably determined that the undisbursed proceeds of the Grant, together with other funds or firm commitments for funds that the Recipient has obtained in connection with the Project, are not less than the amount that is necessary to pay for development of the Project and to satisfy all of the covenants contained in this Agreement.
2.3.8 The City has received a written draw request from the Recipient, including certification that the condition set forth in Section 2.3 continues to be satisfied, and setting forth the proposed uses of funds, the amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred.
Section 2.4 Final Financing Plan.
As a condition precedent to the first draw of Grant Funds, Recipient shall provide City with financing plan for the Project (“Final Financing Plan”) which describes (i) the estimated costs of Project Development, including acquisition costs, and hard and soft construction costs, (ii) an operating pro forma which describes projected revenue and expenses for the Project, and (iii) identification of sources of construction and permanent financing to be used for a purpose other than acquisition of the Property. The Developer shall have submitted and received approval from the City of the Final Financing Plan as well as:
(1) Copies of all required funding commitments for performing the Construction Work consistent with the Final Financing Plan, including approval of the Bond Grant lender, and a preliminary tax credit reservation and an executed commitment letter from a tax credit equity investor acceptable to the City; and
(2) Any other information that is reasonably necessary to the City in determining that the Developer has the financial capability to pay all costs of completing the Construction Work in accordance with the requirements of this Agreement.
Section 2.5 Other Financing. All other financing necessary to construct the Development, as required and approved by the City in the Final Financing Plan, shall be closed by the Developer prior to, or simultaneously with the funding of the Grant. The Developer shall also submit to the City evidence reasonably satisfactory to the City that any conditions to the release or expenditure of funds described in the Final Financing Plan as the sources of funds to pay the costs of constructing the Development have been met or will be met subject to the Developer's satisfaction of standard disbursement preconditions required to be satisfied on a periodic basis, for construction of the Development. Submission by the Developer, and approval #21..
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by the City, of such evidence of funds availability shall be a condition precedent to the City's obligation to disburse the Grant.
ARTICLE 3 CONSTRUCTION OF THE IMPROVEMENTS
Section 3.1 Permits and Approvals.
Recipient shall obtain all permits and approvals necessary for the construction of the Project on the Property and the Off-Site Improvements.
Section 3.2 Construction Plans.
Recipient shall submit to the City a copy of the Construction Plans for the Project and Bid Package. As used in this Agreement, “Construction Plans” shall mean all construction documentation upon which Recipient and Recipient's contractor shall rely in rehabilitating the Property.
The Construction Plans shall be deemed approved by the City unless rejected by the City in writing for their failure to comply with the foregoing requirements within thirty (30) days after receipt by the City. Such approval of the Construction Plans by the City shall not relieve Recipient's Obligation to obtain any and all approvals required by the City or the City Building Department.
If rejected by the City in whole or in part, Recipient shall submit new or corrected Construction Plans within thirty (30) days after notification of the City's rejection and the reasons therefor. The City shall then have thirty (30) days to review and approve Recipient's new or corrected Construction Plans. The provisions of this Section relating to time periods for approval, rejection, or resubmission of new or corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the City.
Section 3.3 Construction Contract.
All construction work and professional services shall be performed by persons or entities licensed or otherwise authorized to perform the applicable construction work or service in the State of California. Each contract that the Recipient enters for construction of the Project shall provide that at least five percent (5%) of the costs incurred shall be payable only upon completion of construction, subject to early release of retention for specified subcontractors upon approval by the City.
Section 3.4 Construction Pursuant Applicable Laws
Recipient shall cause all work performed in connection with the Project to be performed in compliance with (i) all applicable laws, ordinances, rules and regulations of federal, state, City or municipal governments or agencies now in force or that may be enacted hereafte; and (ii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and Recipient shall be responsible to #21..
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the City for the procurement and maintenance thereof, as may be required of Recipient and all entities engaged in work on the Project.
Section 3.5 Accessibility.
To the extent applicable, Recipient shall construct the Project in compliance with all applicable federal and state disabled persons accessibility requirements including but not limited to the Federal Fair Housing Act; Section 504 of the Rehabilitation Act of 1973 (“Section 504”); Title II and/or Title III of the Americans with Disabilities Act; and Title 24 of the California Code of Regulations (collectively, the “Accessibility Requirements”). In compliance with Section 504 Recipient shall provide the City with a certification from the Project architect that to the best of the architect's knowledge, the Project comply with all federal and state accessibility requirements applicable to the Project. Recipient shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the City) the City against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including Recipient, its architect, contractor and subcontractors) to construct the Project in
Section 3.6 Equal Opportunity.
During the construction of the Project there shall be no discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged in the construction work.
Section 3.7 Progress Reports.
Until such time as Recipient has received a certificate of occupancy from the City for the Project, Recipient shall provide the City with quarterly progress reports regarding the status of the construction of the Project.
Section 3.8 Construction Responsibilities.
It shall be the responsibility of Recipient to coordinate and schedule the work to be performed so that commencement and completion of the construction of the Project will take place in accordance with this Agreement.
Recipient shall be solely responsible for all aspects of Recipient's conduct in connection with the Project, including (but not limited to) the quality and suitability of the plans and specifications, the supervision of construction work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property managers. Any review or inspection undertaken by the City with reference to the Project is solely for the purpose of determining whether Recipient is properly discharging its obligations to the City, and should not be relied upon by Recipient or by any third parties as a warranty or representation by the City as to the quality of the design or construction of the Project.
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Section 3.9 Mechanics Liens, Stop Notices, and Notices of Completion.
If any claim of lien is filed against the Property or a stop notice affecting the Grant is served on the City or any other lender or other third party in connection with the Project, then Recipient shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the City a surety bond in sufficient form and amount, or provide the City with other assurance satisfactory to the City that the claim of lien or stop notice will be paid or discharged.
If Recipient fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the City may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at Recipient's expense. Alternately, the City may require Recipient to immediately deposit with the City the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The City may use such deposit to satisfy any claim or lien that is adversely determined against Recipient.
Recipient shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims of lien against the Property. Recipient authorizes the City, but without any obligation, to record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Project and Property.
Section 3.10 Inspections.
Recipient shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection at the Project by the City and by public authorities during reasonable business hours for the purposes of determining compliance with this Agreement.
ARTICLE 4 GRANT REQUIREMENTS
Section 4.1 Financial Accountings and Post-Completion Audits.
No later than sixty (60) days following completion of construction of the Project, Recipient shall provide to City a financial accounting of all sources and uses of funds for the Project.
Section 4.2 Information.
Recipient shall provide any information reasonably requested by the City in connection with the Project, including (but not limited to) any information required by CSA in connection with Recipient's use of the Grant funds.
Section 4.3 Records.
The Recipient shall keep and maintain at the Administrative Office, or elsewhere with the City's written consent, full, complete and appropriate books, record and accounts relating to the #21..
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Project, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Recipient's compliance with the terms and provisions of this Agreement. Books, records and accounts relating to Recipient's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement. All such books, records, and accounts shall be open to and available for inspection and copying by CSA, the City, its auditors or other authorized representatives at reasonable intervals upon reasonable notice during normal business hours. Copies of all tax returns and other reports that Recipient may be required to furnish to any governmental agency shall at all reasonable times be open for inspection by the City at the place that the books, records and accounts of the Recipient are kept. The Recipient shall preserve such records for a period of not less than five (5) years after the creation of such records. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Grant is pending at the end of the record retention period stated herein, then the Recipient shall retain such records until such action and all related issues are resolved. Such records shall include all invoices, receipts, and other documents related to expenditures from the Grant funds.
Section 4.4 HHAP Requirements.
Recipient shall comply with all applicable laws and regulations governing the use of the HHAP funds, including those requirements set forth in Exhibit C, attached hereto and incorporated herein. In the event in a conflict between the provisions of this Agreement and the requirements of Exhibit C, the requirements of Exhibit C shall control.
Section 4.5 Hazardous Materials.
Recipient shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Recipient shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of “hazardous substances”, “ hazardous wastes”, “hazardous materials”, or “toxic substances” under any applicable federal or state laws or regulations (collectively referred to hereinafter as “Hazardous Materials”) except such of the foregoing as may be customarily used in the construction of projects like the Project or kept and used in and about residential property of this type..
Section 4.6 Maintenance.
During the course of both construction and operation of the Project, Recipient shall maintain the Property and the Project in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if Recipient has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City shall have the right to perform all acts #21..
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necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property.
Section 4.7 Fees and Taxes.
Recipient shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Project to the extent owned by Recipient, and shall pay such charges prior to delinquency.
However, Recipient shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the City, Recipient deposits with the City any funds or other forms of assurance that the City in good faith from time to time determines appropriate to protect the City from the consequences of the contest being unsuccessful.
Section 4.8 Notice of Litigation.
Recipient shall promptly notify the City in writing of any litigation which has the potential to materially affect Recipient or the Property and of any claims or disputes that involve a material risk of such litigation.
Section 4.9 Operation of Project
Promptly after completion of construction, the Recipient shall operate the Project as permanent supportive housing for individuals at risk of homelessness, as more particularly Described in the project summary attached hereto as Exhibit B. Of the fifty-six (56) units in the Project, Thirty-eight (38) units will be for youth ages twelve (12) to twenty-four (24) who are homeless or at risk of homelessness, and the remaining thirty-eight (38) units will serve the general population experiencing homelessness . Recipient shall operate the Project in accordance with the requirements set forth in this Agreement and the Regulatory Agreement.
Section 4.10 Transfer.
For purposes of this Agreement, “Transfer” shall mean any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii) any interest in the Project, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Project is transferred and Recipient retains title. “Transfer” shall exclude the occupancy of any Unit in the Project by an eligible household. The City Manager is authorized to execute assignment and assumption agreements on behalf of the City to implement any approved Transfer.
No Transfer shall be permitted without the prior written consent of the City, which the City may withhold in its sole discretion.
Notwithstanding the foregoing, the following shall not be construed to be Transfers requiring the consent of the City: i) transfers to a limited partnership in which Recipient is the sole member of the general partner; ii) transfers of limited partner interests in Recipient; ii) the #21..
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removal and replacement of the general partner of Recipient by the limited partner in accordance with the terms of the Recipient's partnership agreement; and iii) the grant and exercise of a right of first refusal and/or purchase option to acquire the Property or the limited partner interests of Recipient by Visionary Home Builders of California or a wholly-controlled affiliate thereof in accordance with the partnership agreement.
Section 4.11 Insurance Requirements.
The Recipient shall maintain the following insurance coverage throughout the Term of the Grant:
4.11.1 Worker's Compensation insurance to the extent required by law, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,000,000) each accident.
4.11.2 Comprehensive General Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations.
4.11.3 Comprehensive Automobile Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable.
4.11.4 Builders' risk insurance during the course of the construction, and, upon completion of construction, property insurance covering the Project, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the City, naming the City as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if required by applicable federal regulations.
4.11.5 Property insurance covering the Property, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the City, naming the City as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if required by applicable federal regulations.
4.11.6 Commercial crime insurance covering all officers and employees, for loss of Grant proceeds caused by dishonesty, in an amount not less than the amount of the Grant, naming the City as a Loss Payee, as its interests may appear.
4.11.7 The Recipient shall cause any general contractor, agent, or subcontractor working on the Project under direct contract with the Recipient or subcontract to maintain insurance of the types and in at least the minimum amounts described in subsections (a), (b), and (c) above, except that the limit of liability for comprehensive general liability insurance for subcontractors shall be One Million Dollars ($1,000,000), and shall require that such insurance shall meet all of the general requirements of subsections (g), (h), and (i) below. #21..
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4.11.8 The required insurance shall be provided under an occurrence form, and Recipient shall maintain the coverage described in subsections (a) through (d) continuously throughout the Term. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above.
4.11.9 Comprehensive and General Liability and Comprehensive Automobile Liability insurance policies shall be endorsed to name as an additional insured the City and its officers, agents, employees and members of the City Council.
4.11.10 All policies and bonds shall contain (i) the agreement of the insurer to give the County at least thirty (30) days' notice prior to cancellation (including, without limitation, for non-payment of premium) or any material change in said policies (ii) an agreement that such policies are primary and non-contributing with any insurance that may be carried by the City; (iii) a provision that no act or omission of the Recipient shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a waiver by the insurer of all rights of subrogation against the City and its authorized parties in connection with any loss or damage thereby insured against.
Section 4.12 Performance and Payment Bonds.
As a condition precedent to the first Grant draw request under the Grant, the Developer shall deliver to the City copies of the Construction Bonds, which shall: (i) be in a form reasonably acceptable to the City; (ii) be issued by a surety licensed to do business in California and reasonably acceptable to the City; and (iii) name the City as a co-obligee.
The City shall either reasonably approve or disapprove the submitted proposed Construction Bonds within fifteen (15) days from the date the City receives the Construction Bonds. If the proposed Construction Bonds are not approved by the City, then the City shall notify the Developer in writing of the reasons for disapproval and the required revisions to the previously submitted Construction Bonds. The Developer shall thereafter submit revised proposed Construction Bonds within fifteen (15) days of the notification of disapproval. The City shall either approve or disapprove the submitted revised Construction Bonds within fifteen (15) days of the date such revised Construction Bonds are received by the City. The City shall approve the initial or revised Construction Bonds if they meet the standards set forth in Subsection (a) above.
Notwithstanding the foregoing, the City shall consider other reasonable forms of security for the completion of the construction of the Project, from either the Developer or the Developer's general contractor, in lieu of such construction bonds described in this Section provided that: (1) all lenders set forth on the Financing Plan have agreed to such other security, and (ii) the City has the same enforcement rights under such security as the lenders set forth on the Financing Plan.
Section 4.13 Payment of Other Indebtedness; Notice of Defaults. #21..
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Recipient shall promptly pay the principal and interest when due on any other indebtedness related to the Project.
Recipient shall promptly notify the City in writing of any defaults declared under any other financing for the Project by the lender of such financing.
Section 4.14 Prevailing Wage Requirements. To the extent, and if, required by applicable state laws, rules and regulations, Recipient and its contractors and agents shall comply with California Labor Code Section 1720 et seq. and applicable federal labor laws and standards, and the regulations adopted pursuant thereto (“Prevailing Wage Laws”), and shall be responsible for carrying out the requirements of such provisions. Recipient shall submit to City a plan for monitoring payment of prevailing wages and shall implement such plan at Recipient ’s expense.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF RECIPIENT
Section 5.1 Representations and Warranties.
Recipient hereby represents and warrants to the City as follows:
5.1.1 Organization. Recipient is a duly formed California limited liability partnership, validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted.
5.1.2 Authority of Recipient. Recipient has full power and authority to execute and deliver this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
5.1.3 Authority of Persons Executing Documents. This Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Recipient, and all actions required under Recipient's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken.
5.1.4 Valid Binding Agreements. This Agreement and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of Recipient enforceable against it in accordance with their respective terms.
5.1.5 No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any #21..
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statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Recipient, or conflict with any provision of the organizational documents of Recipient, or will conflict with or constitute a breach of or a default under any agreement to which Recipient is a party, or will result in the creation or imposition of any lien upon any assets or property of Recipient, other than liens established pursuant hereto.
5.1.6 Pending Proceedings. Recipient is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Recipient, threatened against or affecting Recipient or the Property, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Recipient, materially affect Recipient's ability to repay the Grant or impair the security to be given to the City pursuant hereto.
5.1.7 Financial Statements. The financial statements of Recipient and other financial data and information furnished by Recipient to the City fairly and accurately present the information contained therein. As of the date of this Agreement, there has not been any adverse, material change in the financial condition of Recipient from that shown by such financial statements and other data and information.
5.1.8 Sufficient Funds. Recipient holds sufficient funds, binding commitments for sufficient funds, and/or access to borrow sufficient funds to complete the acquisition of the Property and the construction of the Project in accordance with the terms of this Agreement.
5.1.9 Taxes. Recipient and its subsidiaries have filed all federal and other material tax returns and reports required to be filed, and have paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against Recipient or any of its subsidiaries that could, if made, be reasonably expected to have a material adverse effect on the Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Recipient and its subsidiaries, taken as a whole, which would be expected to result in a material impairment of the ability of Recipient to perform under any Grant Document to which it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability against Recipient of any Grant Document.
ARTICLE 6 DEFAULT AND REMEDIES
Section 6.1 Events of Default.
Each of the following shall constitute a “Default” by Recipient under this Agreement:
6.1.1 Breach of Covenants. Failure by Recipient to duly perform, comply with, or observe any of the conditions, terms, or covenants of this Agreement, and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to the Recipient or, if the breach cannot be cured within thirty (30) days, the Recipient shall not be in breach so long as Recipient is diligently undertaking to cure such breach and such breach is #21..
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cured within ninety (90) days; provided, however, that if a different period or notice requirement is specified under any other section of this Article 6, the specific provisions shall control.
6.1.2 Default Under Other Grants. A default is declared under any other financing for the Project by the lender of such financing and such default remains uncured following any applicable notice and cure period.
6.1.3 Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging Recipient or Recipient's general partner, if Recipient is a partnership, or Recipient's managing member, if Recipient is a limited liability company, to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Recipient or Recipient's general partner, if Recipient is a partnership, or Recipient's managing member, if Recipient is a limited liability company, or seeking any arrangement for Recipient or Recipient's general partner, if Recipient is a partnership, or Recipient's managing member, if Recipient is a limited liability company, under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Recipient or Recipient's general partner, if Recipient is a partnership, or Recipient's managing member, if Recipient is a limited liability company, in bankruptcy or insolvency or for any of their properties, (iv) directing the winding up or liquidation of Recipient or Recipient's general partner, if Recipient is a partnership, or Recipient's managing member, if Recipient is a limited liability company, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) calendar days; or (v) Recipient or Recipient's general partner, if Recipient is a partnership, or Recipient's managing member, if Recipient is a limited liability company, shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. .
6.1.4 Assignment; Attachment. Recipient shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution.
6.1.5 Suspension; Termination. Recipient shall have voluntarily suspended its business or, if Recipient is a partnership, the partnership shall have been dissolved or terminated, other than a technical termination of the partnership for tax purposes.
6.1.6 Liens on Property and the Project. There shall be filed any claim of lien (other than liens approved in writing by the City) against the Project or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the Grant and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (20) days, without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the City.
6.1.7 Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Project.
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Section 6.2 Remedies. The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the City or automatically where so specified, relieve the City of any obligation to make or continue the Grant and shall give the City the right to proceed with any and all remedies set forth in this Agreement, including but not limited to the following:
6.2.1 Repayment. The City shall have the right to cause the Recipient to repay, upon written demand, the Grant within a reasonable period of time, as determined by the City in its sole discretion. The City may proceed to enforce repayment of the Grant and to exercise any or all rights afforded to the City.
6.2.2 Specific Performance. The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Recipient to perform its obligations and covenants under this Agreement or to enjoin acts on things which may be unlawful or in violation of the provisions of this Agreement.
6.2.3 Right to Cure at Recipient's Expense. The City shall have the right (but not the obligation) to cure any monetary default by Recipient under a Grant other than the Grant.
The Recipient agrees to reimburse the City for any funds advanced by the City to cure a monetary default by Recipient upon demand therefor, together with interest thereon at the lesser of the maximum rate permitted by law and ten percent (10%) per annum (the “Default Rate”) from the date of expenditure until the date of reimbursement.
Section 6.3 Remedies Cumulative.
No right, power, or remedy given to the City by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Recipient and any other person.
ARTICLE 7 GENERAL PROVISIONS
Section 7.1 Relationship of Parties.
Nothing contained in this Agreement shall be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City and Recipient or its agents, employees or contractors. Recipient shall at all times be deemed an independent contractor, solely responsible for its own acts and those of its agents and employees.
Section 7.2 No Claims.
Nothing contained in this Agreement shall create or justify any claim against the City by any person that Recipient may have employed or with whom Recipient may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the purchase of the Property, the construction or #21..
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operation of the Project, and Recipient shall include similar requirements in any contracts entered into for the construction or operation of the Project.
Section 7.3 Amendments.
No alteration or variation of the terms of this Agreement shall be valid unless made in writing by the Parties.
Section 7.4 Indemnification.
The Recipient shall indemnify, defend and hold the City harmless against any and all claims, suits, actions, losses and liability of every kind, nature and description made against it and expenses (including reasonable attorneys' fees) which arise out of or in connection with this Agreement, including but not limited to the purchase of the Property, development, construction, marketing and operation of the Project, except to the extent such claim arises from the grossly negligent or willful misconduct of the City, its agents, and its employees. The provisions of this Section shall survive the expiration of the Agreement.
Section 7.5 Non-Liability of City Officials, Employees and Agents.
No member, official, employee or agent of the City shall be personally liable to Recipient in the event of any default or breach by the City or for any amount which may become due to Recipient or its successor or on any obligation under the terms of this Agreement.
Section 7.6 No Third Party Beneficiaries.
There shall be no third party beneficiaries to this Agreement.
Section 7.7 Discretion Retained By City.
The City's execution of this Agreement in no way limits the discretion of the City in the permit and approval process in connection with development of the Project.
Section 7.8 Conflict of Interest.
In accordance with Government Code Section 1090 and the Political Reform Act, Government Code section 87100 et seq., no person who is a director, officer, partner, trustee or employee or consultant of the Recipient, or immediate family member of any of the preceding, shall make or participate in a decision, made by the City or a City board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or Recipient.
Interpretation of this section shall be governed by the definitions and provisions used in the Political Reform Act, Government Code Section 87100 et seq., its implementing regulations manual and codes, and Government Code Section 1090.
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Section 7.9 Notices, Demands and Communications.
Formal notices, demands, and communications between the Parties shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the Parties as follows, or such other addresses designated by the Parties in writing:
City: City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Director
Recipient: Modesto Homekey LP
c/o UP Holdings California, LLC
6083 N. Figarden Drive, #656
Fresno, CA 93722
Attention: Cullen J. Davis
Receipt shall be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 7.10 Applicable Law.
This Agreement shall be governed by and construed in accordance with California law.
Section 7.11 Parties Bound.
Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their heirs, executors, administrators, legal representatives, successors, and assigns, and the benefit hereof shall inure to the benefit of the City and its successors and assigns.
Section 7.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other Party.
Section 7.13 Entire Understanding of the Parties
This Agreement constitutes the entire understanding and agreement of the Parties with respect to the Grant.
Section 7.14 Multiple Originals; Counterpart.
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5569903.1 17
This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
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5569903.1 18
WHEREAS, this Agreement has been entered into by the undersigned as of the date first above written.
CITY
CITY OF MODESTO
By: _______________________________
Joseph P. Lopez, City Manager
ATTEST:
By:
Diane Nayares-Perez, CMC, City Clerk
(SEAL)
APPROVED AS TO LEGAL FORM
By: _______________________________
Jose M. Sanchez, City Attorney
APPROVED AS TO RISK MANAGEMENT:
By:
Joe F. Rodriguez, Risk Manager
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5569903.1 19
RECIPIENT
MODESTO HOMEKEY LP,
a California limited partnership
By: UP MODESTO LLC,
a California limited liability company,
its General Partner
By: UP Holdings California, LLC,
an Illinois limited liability company registered
to do business in the State of California,
its Sole Member
By: ___________________________
Cullen J. Davis,
Manager
By: RHCB MODESTO LLC,
a California limited liability company,
its General Partner
By: RHCB Development LP,
a California limited partnership,
its Sole Member
By: WRBH LLC,
a California limited liability company,
its General Partner
By: _________________________
Wayne Rutledge,
Manager
By: HOM XXX LLC,
a Delaware limited liability company,
its Managing General Partner
By: Housing on Merit,
a California nonprofit public benefit corporation,
its Manager
By: _____________________________
Jennifer Litwak,
Executive Director
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
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2 EXHIBIT B
PROJECT SUMMARY
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EXHIBIT D
GRANT REQUIREMENTS
1. HOMELESS HOUSING , ASSISTANCE AND PREVENTION PROGRAM
1.1. The State of California has established the Homeless Housing, Assistance, and Prevention Program Round 3 ("HHAP-3") and Homeless Housing, Assistance, and Prevention Program Round 4 (“HHAP-4”) pursuant to Chapter 6 (commencing with Section 50216) of Part 1 of Division 31 of the Health and Safety Code. (Amended by Stats. 2021, Ch. 111, Sec. 4. (AB 140) Effective July 19, 2021.)
1.2. In signing this Agreement and thereby accepting this award of funds, Recipeint agrees to comply with the terms and conditions of the Agreemnet.
1.3. HHAP-3:
1.3.1. The general purpose of the HHAP-3 is to continue to build on regional coordination developed through previous rounds of funding of the Homelessness Emergency Aid Program (Chapter 5(commencing with Section 50210)), the program established under this chapter, and COVID19 funding to reduce homelessness. This funding shall:
1.3.1.1. Continue to build regional collaboration between continuums of care, counties, and cities in a given region, regardless of population, and ultimately be used to develop a unified regional response to homelessness.
1.3.1.2. Be paired strategically with other local, state, and federal funds provided to address homelessness in order to achieve maximum impact. Grantees of this funding are encouraged to reference Putting the Funding Pieces Together: Guide to Strategic Uses of New and Recent State and Federal Funds to Prevent and End Homelessness in their planning efforts.
1.3.1.3. Be deployed with the goal of reducing the number of people experiencing homelessness in a given region through investing in long-term solutions, such as permanent housing.
1.4. HHAP-4
1.4.1. The general purpose of the HHAP-4 is to (1) reduce homelessness by expanding or developing local capacity to address immediate homelessness challenges informed by a best-practices framework focused on moving #21..
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homeless individuals and families into permanent housing and supporting the efforts of those individuals and families to maintain their permanent housing; and (2) continue to build on regional coordination developed through previous rounds of HHAP funding (Chapter 6 (commencing with HSC section 50216). This funding shall:
1.4.1.1. Continue to build regional collaboration between continuums of care, counties, and cities in a given region, regardless of population, and ultimately be used to develop a unified regional response to homelessness.
1.4.1.2. Be paired strategically with other local, state, and federal funds provided to address homelessness in order to achieve maximum impact. Grantees of this funding are encouraged to reference Putting the Funding Pieces Together: Guide to Strategic Uses of New and Recent State and Federal Funds to Prevent and End Homelessness to assist in using funding strategically for their planning efforts in the delivery of services to people experiencing homelessness in the community.
1.4.1.3. Be deployed with the goal of reducing the number of people experiencing homelessness in a given region through investing in long-term solutions, such as permanent housing.
2. TIME
2.1. Recipient shall strictly comply with all of the deadlines in the Agreement. All the HHAP Round 3 and Round 4 grant funds (100 percent) must be expended by April 30, 2026.
2.2. City reserves the right to add any special conditions to this Recipient it deems necessary to ensure that the goals of HHAP-3 and HHAP-4 are achieved.
3. REPORTING
Reporting Requirements. Recipient shall provide information and reports in the form and format required by City.
4. SPECIAL CONDITIONS- GRANTEES/ SUBGRANTEE
4.1. The Recipient agrees to comply with all Special Terms and Conditions contained herein. These conditions shall be met to the satisfaction of Cal ICH. City shall ensure that Recipient is aware of and agrees to comply with all conditions of the Agreement and the applicable State requirements governing HHAP Round 3 and Round 4 funds. Failure to comply with these conditions may result in termination of this Agreement.
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4.1.1. Perform the work in accordance with Federal, State, and Local housing building codes;
4.1.2. Maintain at least the minimum State-required worker’s compensation for those employees who will perform the work of any part of it.
4.1.3. Maintain, as required by law, unemployment insurance, disability insurance and liability insurance in an amount that is reasonable to compensate any person, firm or corporation who may be injured or damaged by the Recipient or subcontractor in performing the work or any part of it.
5. FINANCIAL AUDIT
5.1. City reserves the right to perform or cause to be performed a financial audit. At City request, Recipient shall provide, at its own expense, a financial audit prepared by a certified public accountant, the Program administrative funds may be used to fund this expense. Should an audit be required, Recipient shall adhere to the following conditions.
5.1.1. The audit shall be performed by an independent certified public accountant.
5.1.2. Recipient shall notify City of the auditor's name and address immediately after the selection has been made. The contract for the audit shall allow access by City to the independent auditor's working papers.
5.1.3. Recipient is responsible for the completion of audits and all costs of preparing audits.
5.1.4. If there are audit findings, Recipient must submit a detailed response acceptable to City for each audit finding within ninety (90) days from the date of the audit finding report.
6. RECORD INSPECTION
City or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance under this Recipient. Recipient agrees to provide City, or its designee, with any relevant information requested. Recipient agrees to give City or its designee access to its premises, upon reasonable notice and during normal business hours, for the purpose of interviewing employees who might reasonably have information related to such records, and of inspecting and copying such books, records, accounts, and other materials that may be relevant to an investigation of compliance with the Homeless Housing, Assistance, and Prevention Program laws, the Program guidance document published on the website, and this Recipient. #21..
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7. RECORD RETENTION
7.1. Recipient further agrees to retain all records relating to this Recipient for a minimum period of five (5) years after the termination of this Recipient.
7.2. If any litigation, claim, negotiation, audit, monitoring, inspection or other action has been commenced before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues which arise from it.
8. BREACH OF THIS AGREEMENT
8.1. Breach of this Agreement includes, but is not limited to, the following events:
8.1.1. Recipient's failure to comply with the terms or conditions of this Recipient.
8.1.2. Use of, or permitting the use of, the HHAP-3 and HHAP-4 funds provided under this Recipient for any ineligible activities.
8.1.3. Any failure to comply with the deadlines set forth in this Recipient.
9. WAIVERS
No waiver of any breach of this Recipient shall be held to be a waiver of any prior or subsequent breach. The failure of City to enforce at any time the provisions of this Recipient, or to require at any time, performance by Recipient of these provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Recipient or the right of City to enforce these provisions.
10. NONDISCRIMINATION
During the performance of this Recipient, Recipient and its subrecipients shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex (gender), sexual orientation, gender identity, gender expression, race, color, ancestry, religion, creed, national origin (including language use restriction), pregnancy, physical disability (including HIV and AIDS), mental disability, medical condition (cancer/genetic characteristics), age (over 40), genetic information, marital status, military and veteran status, and denial of medical and family care leave or pregnancy disability leave. Recipient and Sub grantees shall ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. Recipient and its subrecipients shall comply with the provisions of California's laws against discriminatory practices relating to specific groups:
the California Fair Employment and Housing Act (FEHA) (Gov. Code,§ 12900 et seq.); the regulations promulgated thereunder (Cal. Code Regs., tit. 2, § 11000 et seq.); and the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code, §§ 11135 - 11139.5). Recipient and its subrecipients shall give written notice #21..
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of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
11. COMPLIANCE WITH LAWS
11.1. The Recipient agrees to require its contractors and subgrantees to comply with all state and federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, environmental protection, equal opportunity, fair housing, and all other matters applicable and/or related to the HHAP-3 and HHAP-4 program, the Recipient, its subrecipients, and all eligible activities.
11.2. Recipient shall also be responsible for requiring its contractors and subgrantees to obtaining any and all permits, licenses, and approvals required for performing any activities under this Recipient, including those necessary to perform design, construction, or operation and maintenance of the activities. Recipient shall be responsible for requiring its contractors and subgrantees to observe and comply with any applicable federal, state, and local laws, rules or regulations affecting any such work, specifically those including, but not limited to, environmental protection, procurement, and safety laws, rules, regulations, and ordinances.
Recipient shall provide copies of permits and approvals to City upon request.
12. DRUG-FREE WORKPLACE CERTIFICATION
Certification of Compliance: By signing this Recipient, Recipient hereby certifies, under penalty of perjury under the laws of State of California, that it and its contractors and subcontractors will comply with the requirements of the Drug-Free Workplace Act of 1990 (Gov. Code, § 8350 et seq.) and have or will provide a drug-free workplace by taking the following actions:
12.1. Publish a statement notifying employees and contractors that unlawful manufacture distribution, dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations, as required by Government Code section 8355, subdivision (a)(1).
12.2. Establish a Drug-Free Awareness Program, as required by Government Code section 8355, subdivision (a)(2) to inform employees and contractors about all of the following:
12.2.1. The dangers of drug abuse in the workplace;
12.2.2. Its policy of maintaining a drug-free workplace;
12.2.3. Any available counseling, rehabilitation, and employee assistance program; and
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12.2.4. Penalties that may be imposed upon employees for drug abuse violations.
12.3. Provide, as required by Government Code section 8355, subdivision (a)(3), that every employee and contractor that works under this Recipient:
12.3.1. Will receive a copy of Recipient's drug-free policy statement, and
12.3.2. Will agree to abide by terms of Recipient's condition of employment or subcontract.
13. CHILD SUPPORT COMPLIANCE ACT
For any Contract Agreement in excess of $100,000, Recipient acknowledges in accordance with Public Contract Code 7110, that:
13.1. Recipient recognizes the importance of child and family support obligations and shall fully comply with all applicable state and Federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and
13.2. Recipient, to the best of its knowledge, is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department.
14. INSPECTIONS
14.1. Recipient shall inspect any work performed hereunder to ensure that the work is being and has been performed in accordance with the applicable Federal, State and/or local requirements, and this Recipient.
14.2. City reserves the right to inspect any work performed hereunder to ensure that the work is being and has been performed in accordance with the applicable Federal, State and/or local requirements, and this Recipient.
14.3. Recipient agrees to require that all work that is determined based on such inspections not to conform to the applicable requirements be corrected and to withhold payments to the subrecipient until it is corrected.
15. SEVERABILITY
If any provision of this Recipient, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of City, shall not affect any other provisions of this Recipient and the remainder of this Recipient shall remain in full #21..
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force and effect. Therefore, the provisions of this Recipient are and shall be deemed severable.
16. CLAIMS
Recipient shall notify City immediately of any claim or action undertaken by or against it, which affects or may affect this Recipient or City, and shall take such action with respect to the claim or action as is consistent with the terms of this Recipient and the interests of City.
17. STATE OF CALIFORNIA GENERAL TERMS AND CONDITIONS
This exhibit is incorporated by reference and made part of this Recipient. The General Terms and Conditions (GTC 04/2017) can be viewed at the following link:
https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-ServicesResources-List-Folder/Standard-Contract-Language #21..
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HOMELESS HOUSING, ASSISTANCE, AND PREVENTION PROGRAM ROUND 3 ANDROUND4
SPECIAL TERMS AND CONDITIONS
1. All proceeds from any interest-bearing account established by the City for the deposit of Homeless Housing, Assistance, and Prevention Program Round 3 ("HHAP-3") funds, along with any interest-bearing accounts opened by subrecipients to the Grantee for the deposit of HHAP-3 funds and Homeless Housing, Assistance, and Prevention Program Round 4 (“HHAP-4”) funds, must be used for eligible activities and reported on as required.
2. Per Health and Safety Codes (HSC) Section 50220.7 (g) and Section 50220.8 (g), any housing-related activities funded with HHAP-3 and HHAP-4 funds, including but not limited to emergency shelter (per HSC § 50220.7(e)(8)(F) and § 50220.8(e)(8)(F)), rapidrehousing, rental assistance, transitional housing and permanent supportive housing, must be in compliance or otherwise aligned with the core components of Housing First, as described in Welfare and Institutions Code section 8255, subdivision (b). Individuals and families assisted with these funds must not be required to receive treatment or perform any other prerequisite activities as a condition for receiving shelter, housing, or other services for which these funds are used. In addition, HHAP-3 and HHAP-4 funding shall be used to adopt a Housing First approach within the entire local homelessness response system, including outreach and emergency shelter, short-term interventions like rapid re-housing, and longer-term interventions like supportive housing.
3. Recipient shall utilize the local Homeless Management Information System (HMIS) to track clients served. Recipient will ensure that HMIS data are collected in accordance with applicable laws and in such a way as to identify individual projects, services, and clients that are supported by HHAP-3 and HHAP-4 funding (e.g., by creating appropriate HHAP-3 and HHAP-4-specific funding sources and project codes in HMIS).
4. Recipient shall participate in and provide data elements, including, but not limited to, health information, in a manner consistent with federal law, to the statewide Homeless Management Information System (known as the Homeless Data Integration System or "HDIS"), in accordance with their existing Data Use Agreement entered into with the Council, if any, and as required by Health and Safety Code section 50220.6 and Welfare and Institutions Code section 8256. Any health information provided to, or maintained within, the statewide Homeless Management Information System shall not be subject to public inspection or disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). For purposes of this paragraph, "health information" means "protected health information," as defined in Part 160.103 of Title 45 of the Code of Federal Regulations, and "medical information," as defined in subdivision (j) of Section 56.05 of the Civil Code. The Council #21..
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may, as required by operational necessity, amend or modify required data elements, disclosure formats, or disclosure frequency. Additionally, the Council, at its discretion, may provide Grantee with aggregate reports and analytics of the data Grantee submits to HDIS in support of the Purpose of this Agreement and the existing Data Use Agreement.
5. Recipient agrees to accept technical assistance as directed by California Interagency Council on Homelessness (Cal ICH) or by a contracted technical assistance provider acting on behalf of Cal ICH and report to Cal ICH on programmatic changes the grantee will make as a result of the technical assistance and in support of their grant goals.
6. Recipient agrees to demonstrate a commitment to racial equity and, per Section 50222 (a)(2)(B), the grantee shall use data provided through HDIS to analyze racial disproportionality in homeless populations and, in partnership with Cal ICH, establish clear metrics and performance monitoring for achieving equity in provision of services and outcomes for Black, Native, and Indigenous, Latinx, Asian, Pacific Islanders and other People of Color who are disproportionately impacted by homelessness and COVID-19.
Recipient should establish a mechanism for people with lived experience of homelessness to have meaningful and purposeful opportunities to inform and shape all levels of planning and implementation, including through opportunities to hire people with lived experience. 5569903.1
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1/9/2024 4:00:00 PM
OFFICE OF THE CITY CLERK
NOTICE OF SPECIAL MEETING
Please take notice that a special Closed Session meeting of the Council of the City of Modesto has been called pursuant to Section 2-1.02 of the Modesto Municipal Code to be convened on
TUESDAY, JANUARY 23, 2024 AT 4:00 PM
and after the regularly scheduled meeting in the Tenth Street Place, Chambers Conference Room, Basement Level, 1010 Tenth Street, Modesto, California.
Any and all of the following agenda items are subject to action being taken by the Modesto City Council.
The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:
CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
One Case (Pursuant to Section 54956.9(d)(1) of the Government Code) Name of Case: City of Modesto, et al. v. The Dow Chemical Company, et al. (PCE)
Superior Court of the State of California
Case No: CGC-98-999345 and CGC-98-999643
CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCEA Negotiator: Christina Alger
Employee Organization: Modesto City Employees Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCMA Negotiator: Christina Alger
Employee Organization: Modesto Confidential & Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPOA Negotiator: Christina Alger
Employee Organization: Modesto Police Officers’ Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPNSA Negotiator: Christina Alger
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1/9/2024 4:00:00 PM
Employee Organization: Modesto Police Non-Sworn Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) –MPMA Negotiator: Christina Alger
Employee Organization: Modesto Police Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCFFA Negotiator: Christina Alger
Employee Organization: Modesto City Firefighters Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – Unrepresented Negotiator: Christina Alger
Employee Organization: Unrepresented Management and Confidential Employees
BY ORDER OF THE CHAIR
/S
Diane Nayares-Perez, City Clerk
Posted pursuant to Government Code Section 54956 on the bulletin board at Tenth Street Place on at by
date time signature
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