ADDENDA CONFIRMATION
No addenda issued
QUESTIONNAIRE
1. Acknowledgements
IFB ACKNOWLEDGEMENT*
Pass
The Bidder submitting acknowledges receipt of the referenced IFB and/or Addenda and offers and agrees to provide the articles and/or services specified on behalf of the Bidder indicated in Bidder’s Bid Forms provided by the City, attached hereto and made a part hereof, this includes any forms for the pricing proposed on the Pricing Schedule.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
PREPARATION OF BIDS*
Pass
Bidder acknowledges that they have quoted price as specified in Bid. No alterations or changes of any kind shall be permitted to the Pricing Schedule as provided. Responses that do not comply shall be subject to rejection in total.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
SAFETY DATA SHEETS*
Pass
#19..
- 850 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Product labels and SDS are required on all chemicals used in performing services described in this IFB. Bidders shall provide these items with their bid submittal.
The chemical root control agent shall be (anhydrous) Sodium Methyldithiocarbamate (Metam-Sodium) or Diquat product and approved by the City prior to award. Please upload the appropriate documents.
Razorooter_SDS.pdf
TAXES AND FREIGHT CHARGES*
Pass
Bidder acknowledges that:
A. Unless otherwise required and specified in the IFB, the prices quoted herein do not include Sales, Use or other taxes.
B. No charge for delivery, drayage, express, parcel post packing, cartage, insurance, license fees, permits, costs of bonds, or for any other purpose, except taxes legally payable by City, will be paid by the City unless expressly included and itemized in the Bid.
C. Amount paid for transportation of property to the City is exempt from Federal Transportation Tax. An exemption certificate is not required where the shipping paper shows the consignee as one (1) of the City; as such papers may be accepted by the carrier as proof of the exempt character of the shipment.
D. Articles sold to the City are exempt from certain Federal excise taxes. The City will furnish an exemption certificate.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
AWARD*
Pass
Bidder Acknowledges that:
A. Unless otherwise specified by the Bidder or the IFB gives notice of an all-or-none award, the City may accept any item or group of items of any Bid.
#19..
- 851 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
B. Bids are subject to acceptance by the City at any time within 45 days of opening, unless otherwise specified in the IFB. A Bidder shall not change its bid if accepted within such time.
C. A valid, agreement based on the sample agreement attached to the IFB and the submitted bid shall be provided, or otherwise furnished, to the successful Bidder within the time for acceptance specified, and such agreement shall be a binding agreement without further action by either party. The agreement shall be interpreted, construed and given effect in all respects according to the laws of the State of California.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
PATENT INDEMNITY*
Pass
Bidder Acknowledges:
Bidders who do business with the City shall hold the City, its officers, agents and employees, harmless from liability of any nature or kind, including cost and expenses, for infringement or use of any patent, copyright or other proprietary right, secret process, patented or un-patented invention, article or appliance furnished or used in connection with the contract or purchase order.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
SAMPLES*
Pass
Bidder Acknowledges:
Samples of items, when required, shall be furnished free of expense to the City and if not destroyed by test may upon request (made when the sample is furnished), be returned at the Bidder’s expense.
By checking the "please confirm" box below, you acknowledge the above statement. #19..
- 852 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Confirmed
RIGHTS AND REMEDIES OF CITY FOR DEFAULT*
Pass
Bidder Acknowledges:
A. In the event any item furnished by the Bidder in the performance of the contract or purchase order should fail to conform to the specifications therefore or to the sample submitted by the Bidder with its Bid, the City may reject the same, and it shall thereupon become the duty of the Bidder to reclaim and remove the same forthwith, without expense to the City, and immediately to replace all such rejected items with others conforming to such specifications or samples; provided that should the Bidder fail, neglect or refuse to do so, the City shall thereupon have the right to purchase in the open market, in lieu thereof, a corresponding quantity of any such items. City may deduct from any moneys due or that may there after come due to Bidder or send an invoice to the Bidder which shall be paid within thirty (30) days, the difference between the prices named in the contract or purchase order and the actual cost thereof to the City. In the event that the Bidder fails to make prompt delivery as specified for any item, the same conditions as to the rights of the City to purchase in the open market and to reimbursement set forth above shall apply, except when delivery is delayed by fire, strike, freight embargo, or Act of God or the government.
B. Cost of inspection or deliveries or offers for delivery, which do not meet specifications, will be borne by the Bidder.
C. The rights and remedies of the City provided above shall not be exclusive and are in addition to any other rights and remedies provided by law or under the contract.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
PAYMENT TERMS AND METHODS*
Pass
BIDDER IS ABLE TO CHOOSE FROM EITHER OF THE FOLLOWING PAYMENT METHODS AND ASSOCIATED TIMINGS:
#19..
- 853 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Option A (Preferred): City of Modesto ePay Payment:
This secure payment methodology is preferred by an increasing number of the City’s suppliers. On Net 30 day timing, you will receive a single-use Master Card number with a detailed remittance for each payment. You will process the payment through your POS/Card terminal. The payment remittance will be sent from [email protected] via email and will contain the following information:
• 16-digit credit card number
• Expiration date
• Security code
• Total dollar amount of invoices to be paid
• Invoices reference numbers and corresponding amounts
ePay results in small percentage rebate of 1.0% to the City through the card issuer. That rebate amount will be considered by the City in its evaluation of Bidder’s pricing proposal hereunder. Information about enrolling in MasterCard ePay program can be obtained from the City’s contact listed on the Cover Page of this IFB.
Option B – Manual Check:
On Net 45 Day timing, the City will mail a hardcopy check to Bidder. The payment will be deemed to have been made when the check envelope is mailed via US Postal Service First Class Mail. The timing of the mailing will be at the end of the Net 45 Day period. Additional time should be estimated by the Bidder for the check to be in transit, and to await deposit and clearance by Bidder staff.
Option A (Preferred)
CALIFORNIA GOVERNMENT CODE SECTION 4552*
Pass
Bidder Acknowledges:
In submitting a Bid to the City, the Bidder offers and agrees that if the Bid is accepted, it will assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act #19..
- 854 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
(Chapter 2, commencing with Section 16700, of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of Services, materials, or services by the Bidder for sale to the purchasing body pursuant to the Bid. Such assignment shall be made and become effective at the time the purchasing body tender’s final payment to the Bidder.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
NO GUARANTEE OR WARRANTY*
Pass
Bidder Acknowledges that:
The City makes no guarantee or warranty as to the condition, completeness or safety of any material or equipment that may be traded under a contract or purchase order resulting from this Bid.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
MINOR IRREGULARITIES*
Pass
Bidder Acknowledges that:
The City reserves the right, in its sole discretion, to waive any informalities or minor irregularities in a Bid.
By checking the "please confirm" box below, you acknowledge the above statement.
Confirmed
2. Bidder Company Information
BIDDER COMPANY FULL LEGAL NAME*
Pass
#19..
- 855 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Please provide the full legal name of the Bidder Company on this bid submittal. It may already be provided elsewhere, but please provide here to confirm.
Dukes Root Control Inc.
BIDDER COMPANY MARKETPLACE (OR DBA) NAME*
Pass
Please provide the Company Marketplace Name or DBA (if applicable). It may already be provided elsewhere, but please provide here to confirm.
NOTE: If the company is not operating under an additional name or a dba, then you may state "N/A" here.
Dukes Root Control Inc.
TYPE OF LEGAL ENTITY*
Pass
Is the Bidder Company a Corporation, Limited Liability Company, Partnership, or Sole Proprietorship? If the Bidder Company is something other than one of the above options, please answer "No" here and you will be asked to provide more information after this question.
Yes
TYPE OF LEGAL ENTITY - SELECT*
Pass
Please select which of the following legal entity options under which the Bidder Company operates.
Corporation
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- 856 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
LEGAL ENTITY STATE OF REGISTRATION*
Pass
In which State is the Bidder Company registered?
New York
BIDDER COMPANY HEADQUARTERS ADDRESS*
Pass
Please provide the full street address for the headquarters of the Bidder Company. Be sure to include the following:
• Full Street Address
• City
• State
• Country
• Postal Code
3983 Eastbourne Dr
Syracuse, NY 13206
BIDDER COMPANY WEBSITE ADDRESS*
Pass
Please provide the full company website address for the Bidder Company. https://www.dukes.com/
CONTACT PERSON DETAILS*
Pass
#19..
- 857 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Please provide the following information for the Contact person for this bid:
• Name
• Title
• Phone (Office)
• Phone (Mobile)
• Mailing Address (Street Address, City, State, Postal Code) • Fax Number
• Email
Krystian Borkowski
Opportunity Coordinator
8004476687
400 Airport Rd. Suite E
Elgin, IL 6012
[email protected]
FEDERAL TAXPAYER IDENTIFICATION NUMBER (TIN)*
Pass
Please provide the Bidder Company's Federal Taxpayer Identification Number here. 75-3026801
DUNS & BRADSTREET (DUNS) NUMBER
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[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Pass
Please provide the Bidder Company's Duns & Bradstreet (DUNS) Number here. 11-777-1065
BIDDER OFFICER NAMES AND TITLES*
Pass
Please provide the Names and Titles of the Top Three Bidder Officers in the following manner:
• Full Name, Full Title
• Full Name, Full Title
• Full Name, Full Title
Matt Fishbune President and CEO
Richelle Owens Chief of Staff
Dean Monk Senior VP Operations
YEARS IN BUSINESS*
Pass
For how long has the Bidder Company been in business? Please indicate in number of years. 75 CLOSEST BIDDER OFFICE*
Pass
Please provide the address for the Bidder Office closest to the City of Modesto. Please be sure to provide:
• Full Street Address
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[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
• City
• State
• Country
• Postal Code
400 Airport Rd. Suite E
Elgin, IL 6012
CITY OF MODESTO BUSINESS LICENSE*
Pass
Does the Bidder Company currently possess a valid City of Modesto Business License? NOTE: An answer of "No", does not exclude the bid from potential award as it is not required until the contract begins.
Yes
CITY OF MODESTO BUSINESS LICENSE NUMBER*
Pass
You have indicated that the Bidder Company already possesses a City of Modesto Business License, please provide the business license number here.
1304194
STATE OF CALIFORNIA CONTRACTOR LICENSE*
Pass
CA_-_Contractor_License_-_11-30-25_-_SCREENSHOT.pdf
#19..
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[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
DIR REGISTRATION NUMBER*
Pass
Please provide your State of California Department of Industrial Relations (DIR) Registration Number (if available). 1000003539
Click to Verify Value will be copied to clipboard
DIR REGISTRATION EXPIRATION DATE*
Pass
Please enter the current expiration date of your Department of Industrial Relations (DIR) Registration Number. 06/30/2027
CALIFORNIA DEPARTMENT OF PESTICIDE REGULATION BUSINESS LICENSE* Pass
Pesticide_BL_exp_12.31.26.pdf
CALIFORNIA DEPARTMENT OF PESTICIDE REGULATION BUSINESS LICENSE * Pass
Please enter your California Department of Pesticide Regulation Business License Number:
32297
NAME OF PROPOSED CHEMICAL ROOT CONTROL AGENT*
Pass
List the name of the Proposed Chemical Root Control Agent:
Razzorooter
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[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY ROOT CONTROL AND AGENT REGISTRATION NUMBER* Pass
20220726_94625_Add_Chng_Ltr.pdf
EPA_Letter_-_Razorooter.pdf
CALIFORNIA ROOT CONTROL AGENT REGISTRATION NUMBER*
Pass
JERRY_MILLER_EXP_12.31.25.pdf
CALIFORNIA ROOT CONTROL AGENT REGISTRATION*
Pass
Please enter your California Root Control Agent Registration Number:
164023
APPLICATOR'S CALIFORNIA DEPARTMENT OF PESTICIDE REGULATION CERTIFICATION* Pass
Pesticide_BL_exp_12.31.26.pdf
UNITED STATES DEPARTMENT OF TRANSPORTATION (DOT)*
Pass
Please enter your United States Department of Transportation Number:
1559146
3. City Forms
BIDDER EXCEPTIONS, CLARIFICATIONS, AMENDMENTS*
Pass
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- 862 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Does the Bidder have any exceptions, clarifications, or amendments to this IFB, sample agreement, or its associated specifications? No
BIDDER CUSTOMER REFERENCES*
Pass
Please download the below documents, complete, and upload. • Bidder_Customer_References.pdf
Bidder_Customer_References.pdf
FINANCIAL INTEREST DISCLOSURE*
Pass
Please download the below documents, complete, and upload. • Financial_Interest_Disclosu...
Financial_Intrest_Disclosure.pdf
LOCAL VENDOR?*
Pass
Is the Bidder a local vendor as defined by the following requirement? To qualify as a local Bidder, the Bidder must have a physical business location within the City of Modesto and a current City of Modesto business license.
No
BIDDER COMPANY HISTORY STATEMENT*
Pass
#19..
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[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Please download the below documents, complete, and upload. • Bidder_Company_History_Stat...
Bidder_Company_History_Statement.pdf
BIDDER WARRANTY STATEMENTS*
Pass
Please download the below documents, complete, and upload. • Bidder_Warranty_Statements.pdf
Bidder_Warranty_Statement.pdf
BIDDER EXPERIENCE AND CERTIFICATIONS*
Pass
Please download the below documents, complete, and upload. • Bidder_Experience_and_Certi...
Resumes.pdf
SUBCONTRACTORS?*
Pass
Will the Bidder be using subcontractors for any purpose to perform services noted in this IFB? No
CALIFORNIA LEVINE ACT DISCLOSURE*
Pass
Please download the below documents, complete, and upload. #19..
- 864 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
• Modesto_Levine_Act_Statemen...
California_Levin_Act_Disclosure.pdf
4. Additional Bid Information
ADDITIONAL INFORMATION (IF NEEDED)
For any additional information requested or required by any of your previously provided answers or as stated within this IFB please upload the additional documentation here.
No response submitted
SUBMITTAL CONFIRMATION*
Pass
Bidder hereby certifies that all information provided within this submittal is accurate to the best of their knowledge and acknowledges that they have provided proof of their authority to submit a proposal on behalf of the stated Company Name committing them to the information contained within said submittal.
By checking the "please confirm" box below, you certify the above statement.
Confirmed
PRICE TABLES
Line Item Description Estimated
Quantity
Unit of
Measure
Unit Cost Total
1 4" Pipe 228 LF $1.65 $376.20
2 6" Pipe 50,000 LF $1.65 $82,500.00
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- 865 -
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
IFB No. IFB-00044
Sewer Root Control Services
[DUKE'S ROOT CONTROL, INC.] RESPONSE DOCUMENT REPORT
Invitation For Bid - Sewer Root Control Services
Line Item Description Estimated
Quantity
Unit of
Measure
Unit Cost Total
3 8" Pipe 5,000 LF $1.65 $8,250.00
4 10" Pipe 2,000 LF $1.65 $3,300.00
5 12" Pipe 1,000 LF $1.65 $1,650.00
6 13" to 17" Pipe 800 LF $1.65 $1,320.00
7 18" to 24" Pipe 170 LF $1.65 $280.50
TOTAL $97,676.70
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Duke's Root Control, Inc. Page 1 of 7
RAZOROOTER®
SAFETY DATA SHEET
SECTION 1: PRODUCT IDENTIFICATION
Product Identity:
Use:
Manufacturer:
Manufacturer Phone:
Current Revision:
Emergency Telephone Number:
RAZOROOTER®
Herbicide
Duke's Root Control, Inc.
1020 Hiawatha Blvd., West
Syracuse, NY 13204
315-472-4781
08/07/2019
Transportation (24 Hours) CHEMTREC: 800-424-9300
Outside the United States call 202-483-7616 (collect calls accepted.) FOR 24-HOUR EMERGENCY MEDICAL ASSISTANCE CALL PROSAR 1-800-391-2584 SECTION 2: HAZARDS IDENTIFICATION
Classifications: Corrosive to Metals: Category 1
Oral: Category 4
Inhalation: Category 3
Specific target Organ Toxicity: Repeated Category 2
Eye Damage/Irritation: Category 2B
Signal Word (OSHA) Danger
Hazard Statements: May be corrosive to metals
Harmful if swallowed
Causes eye irritation
Toxic if inhaled
May cause damage to organs through prolonged or repeated exposure Hazard Symbols:
Precautionary Statements: Keep only in original container.
Do not breath mist, vapors, spray.
Wash hands and face thoroughly after handling.
Do not eat drink or smoke when using this product.
Use only outdoors or in a well-ventilated area.
If swallowed: Call a poison center, doctor or Prosar if you feel unwell. Rinse mouth.
If inhaled: Remove person to fresh air and keep comfortable for breathing.
If in eyes: Rinse cautiously with water for several minutes. Remove contact lenses if Present and easy to do. Continue rinsing.
Call a poison center, doctor or Prosar.
Get medical advice if you feel unwell.
See Section 4 First Aid Measures.
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Duke's Root Control, Inc. Page 2 of 7
RAZOROOTER®
SAFETY DATA SHEET
SECTION 2: HAZARDS IDENTIFICATION (cont’d)
If eye irritation persists: Get medical advice.
Absorb spillage to prevent material damage.
Store locked up.
Store in corrosive resistant plastic, plastic-lined steel, stainless steel or fiberglass container.
Dispose of contents and container in accordance with local regulations.
Other Hazard Statements: Flammable hydrogen gas may be formed on contact with incompatible metals.
See “Conditions to Avoid”, Section 10. .
SECTION 3: COMPOSITION/INFORMATION ON INGREDIENTS
Chemical Name Common Name CAS Number Concentration
Other Ingredients Other Ingredients Trade Secret 62.7%
[6,7-dihydrodipyrido(1,2-a:2’,1’-c) Diquat Dibromide 85-00-7 37.3% pyrazinediium dibromide]
Ingredients not precisely identified are proprietary or non-hazardous. Values are not product specifications.
SECTION 4: FIRST AID MEASURES
Have the product container, label or Safety Data Sheet with you when calling Prosar (800-391-2584), a poison control center or doctor, or going for treatment.
Ingestion: If swallowed: Call Prosar (800-391-2584), a poison control center or doctor immediately for treatment advice. Do not give any liquid to the person. Do not induce vomiting unless told to do so after contacting Prosar (800-391-2584) or by a poison control center or doctor. Do not give anything by mouth to an unconscious person.
Eye Contact: If in eyes: Hold eye open and rinse slowly and gently with water for 15-20 minutes. Remove contact lenses, if present, after 5 minutes, then continue rinsing eye. Call Prosar (800-391- 2584), a poison control center or doctor for treatment advice.
Skin Contact: If on skin or clothing: Take off contaminated clothing. Rinse skin immediately with plenty of water for 15-20 minutes. Call Prosar (800-391-2584), a poison control center or doctor for treatment advice.
Inhalation: If inhaled: Move person to fresh air. If person is not breathing, call 911 or an ambulance, then give artificial respiration, preferably mouth-to-mouth if possible. Call Prosar (800-391-2584), a poison control center or doctor for further treatment advice.
Most important symptoms/effects: Eye irritation
Indication of immediate medical attention and special treatment needed:
To be effective, treatment for ingestion of the product must begin IMMEDIATELY. Treatment consists of binding the active ingredient, diquat, in the gut with suspensions of activated charcoal or bentonite clay, administration of cathartics to enhance elimination and removal of diquat from the blood by charcoal hemoperfusion or continuous hemodialysis. #19..
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Duke's Root Control, Inc. Page 3 of 7
RAZOROOTER®
SAFETY DATA SHEET
SECTION 5: FIRE FIGHTING MEASURES
Suitable (and unsuitable) extinguishing media:
Use dry chemical , foam or CO2 extinguishing media. If water is used to fight fire, dike and collect runoff.
Specific Hazards:
This product may form flammable and explosive hydrogen gas when in contact with aluminum.
During a fire, irritating and possibly toxic gases may be generated by thermal decomposition or combustion.
Special protective equipment and precautions for firefighters:
Wear full protective clothing and self-contained breathing apparatus. Evacuate nonessential personnel from the area to prevent human exposure to fire, smoke, fumes or products of combustion.
SECTION 6: ACCIDENTAL RELEASE MEASURES
Personal precautions, protective equipment, and emergency procedures:
Follow exposure controls/personal protection outlined in Section 8.
Methods and materials for containment and cleaning up:
Control the spill at its source. Contain the spill to prevent from spreading or contaminating soil or from entering sewage and drainage systems, or any body of water. Clean up spills immediately, observing precautions outlined in Section 8. Cover entire spill with absorbing material and place into compatible disposal container. Scrub area with hard water detergent (e.g. commercial products suchTide, Joy, Spic and Span). Pick up wash liquid with additional absorbent and place into compatible disposal container. Once all material is cleaned up and placed in a disposal container, seal container, and arrange for disposition.
SECTION 7: HANDLING AND STORAGE
Precautions for safe handling:
This product reacts with aluminum to produce flammable hydrogen gas. Do not mix or store in containers or systems made of aluminum or having aluminum fittings.
Store the material in a well-ventilated, secure area out of reach of children and domestic animals. Do not store food, beverages or tobacco products in the storage area. Prevent eating, drinking, tobacco use, and cosmetic application in areas where there is a potential for exposure to the material. Wash thoroughly with soap and water after handling.
Conditions for safe storage, including any incompatibilities: Store locked up SECTION 8: EXPOSURE CONTROLS/PERSONAL PROTECTION
THE FOLLOWING RECOMMENDATIONS FOR EXPOSURE CONTROLS/PERSONAL PROTECTION ARE INTENDED FOR THE MANUFACTURE, FORMULATION AND PACKAGING OF THIS PRODUCT.
FOR COMMERCIAL APPLICATIONS CONSULT THE PRODUCT LABEL.
Occupational Exposure Limits:
Chemical Name OSHA PEL ACGIH TLV Other Source
Other Ingredients Not Applicable Not Applicable Not Applicable Not Applicable Diquat Dibromide Not Established 0.5 mg/m³ TWA 0.5 mg/m³ TWA (0.5 Manufacturer Total; 0.08 respirable)
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Duke's Root Control, Inc. Page 4 of 7
RAZOROOTER®
SAFETY DATA SHEET
SECTION 8: EXPOSURE CONTROLS/PERSONAL PROTECTION (cont’d) Appropriate engineering controls:
Use effective engineering controls to comply with occupational exposure limits (if applicable).
Individual protection measures:
Ingestion: Prevent eating, drinking, tobacco usage and cosmetic application in areas where there is a potential for exposure to the material. Wash thoroughly with soap and water after handling.
Eye Contact: Where eye contact is likely, use chemical splash goggles.
Skin Contact: Where contact is likely, wear chemical-resistant gloves (such as barrier laminate, butyl rubber, Nitrile rubber, neoprene rubber, natural rubber, polyvinyl chloride [PVC] or Viton), coveralls, socks and chemical-resistant footwear.
Inhalation: A respirator is not normally required when handling this substance. Use effective engineering controls to comply with occupational exposure limits.
In case of emergency spills, use a NIOSH approved respirator with any N, R, P or HE filter.
SECTION 9: PHYSICAL AND CHEMICAL PROPERTIES
Appearance: Dark brown liquid
Odor: Odorless
Odor Threshold: Not Available
pH: 4 - 6
Melting point/freezing point: Not Applicable
Initial boiling point and boiling range: Not Available
Flash Point (Test Method): Not Applicable
Flammable Limits (% in Air): Not Available
Flammability: Not Applicable
Vapor Pressure: Diquat Dibromide <10(-8) mmHg @ 77°F (25°C) Vapor Density : Not Available
Relative Density : 1.202 g/ml @ 68°F (20°C)
Solubility (ies): Diquat Dibromide 718,000 mg/I @ 68°F (20°C) and pH 7.2 Partition coefficient: n-octanol/water: Not Available
Autoignition Temperature: Not Applicable
Decomposition Temperature: Not Available
Viscosity: Not Available
Other: None
#19..
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Duke's Root Control, Inc. Page 5 of 7
RAZOROOTER®
SAFETY DATA SHEET
SECTION 10: STABILITY AND REACTIVITY
Reactivity: Not reactive.
Chemical stability: Stable under normal use and storage conditions.
Possiblity of hazardous reactions: Will not occur.
Conditions to Avoid: Concentrate should not be stored in aluminum containers. Spray solutions should not be mixed, stored or applied in containers other than plastic, plastic-lined steel, stainless steel or fiberglass.
Incompatible materials: None known.
Hazardous Decomposition Products: Flammable hydrogen gas may be formed on contact with aluminum. See “Conditions to Avoid”, Section 10.
SECTION 11: TOXICOLOGICAL INFORMATION
Health effects information
Likely routes of exposure: Dermal, Inhalation
Symptoms of exposure: Eye irritation
Delayed, immediate and chronic effects of exposure: Eye irritation Numerical measures of toxicity (acute toxicity/irritation studies [finished product]) Ingestion: Oral (LD50 Female Rat): 886 mg/kg body weight Dermal: Dermal (LD50 Rabbit): > 5050 mg/kg body weight
Inhalation: Inhalation (LC50 Rat): 0.62 mg/l air – 4 hours Eye Contact: Mildly Irritating (Rabbit)
Skin Contact: Slightly Irritating (Rabbit)
Skin Sensitization: Not a Sensitizer (Guinea Pig)
Reproductive/Developmental Effects
Diquat Dibromide: Mutagenicity: No evidence in in vivo assays Development Toxicity: In rabbit studies a small percentage of fetuses had minor defects at 3 and 10 mg ion/kg/d.
Chronic/Subchronic Toxicity Studies
Diquat Dibromide: Kidney weight decreases and cataracts seen in dogs at 12.5 mg ion/kg/d No evidence for neurotoxic effects in rats dosed up to 400 ppm ion in diet for 13 weeks Carcinogenicity
Diquat Dibromide: No evidence of carcinogenicity in rat and mouse studies.
Chemical Name NTP/IARC/OSHA Carcinogen
Other ingredients No
[6,7-dihydrodipyrido(1,2-a:2’,1’- No
c)pyrazinediium dibromide]
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Duke's Root Control, Inc. Page 6 of 7
RAZOROOTER®
SAFETY DATA SHEET
SECTION 11: TOXICOLOGICAL INFORMATION (cont’d)
Other Toxicity Information None
Toxicity of Other Components
Other ingredients Not Applicable
Target Organs
Active ingredients Diquate Dibromide: Eye, kidney
Inert ingredients Other ingredients: Not Applicable
SECTION 12: ECOLOGICAL INFORMATION
Eco-Acute Toxicity Diquat Dibromide: Fish (Rainbow Trout) 96- hour LC50 14.83 ppm Invertebrate (Water Flea) Daphnia Magna 48-hour EC50 0.77 ppm Green Algae 4-day EC50 9.4 ppb
Bird (Mallard Duck) 14-day LD50 60.6 mg/kg
Environmental Fate Diquat Dibromide: The information presented here is for the active ingredient, diquat dibromide. Stable in soil and water. Immobile in soil.
Sinks in water (after 24 h)
SECTION 13: DISPOSAL CONSIDERATIONS
Disposal: Do not reuse product containers. Dispose of product containers, waste containers, and residues according to local, state, and federal health and environmental regulations.
Characteristic Waste: Not Applicable
Listed Waste: Not Applicable
SECTION 14: TRANSPORT INFORMATION
DOT Classification Ground Transport – NAFTA
Proper Shipping Name: Corrosive Liquid, N.O.S. (Diquat Dibromide) Hazard Class: Class 8
Identification Number: UN 1760
Packing Group: PG III
Comments Water Transport International
Proper Shipping Name: Corrosive Liquid N.O.S. (Diquat Dibromide), Marine Pollutant Hazard Class: Class 8
Identification Number: UN 1760
Packing Group: PG III
Air Transport
Proper Shipping Name: Corrosive Liquid, N.O.S. (Diquat Dibromide) Hazard Class: Class 8
Identification Number: UN 1760
Packing Group: PG III
SECTION 15: REGULATORY INFORMATION
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Duke's Root Control, Inc. Page 7 of 7
RAZOROOTER®
SAFETY DATA SHEET
Pesticide Registration:
This chemical is a pesticide product registered by the Environmental Protection Agency and is subject to certain labeling requirements under federal pesticide law. These requirements differ from the classification criteria and hazard information required for safety data sheet, and for workplace labels of non-pesticide chemicals. Following is the hazard information as required on the pesticide label:
Caution: Harmful if inhaled. Harmful if swallowed. Causes moderate eye irritation. Avoid breathing spray mist. Remove and wash contaminated clothing before reuse. Wash thoroughly with soap and water after handling and before eating, drinking, chewing gum, or using tobacco. Avoid contact with eyes or clothing. Wear protective eyewear. Wear long sleeve shirt and long pants, socks, shoes and gloves.
EPA Registration Number: 94625-3
EPCRA SARA Title III Classification:
Section 311/312 Hazard Classes: Acute Health Hazard
Section 313 Toxic Chemicals: None
California Proposition 65 None
CERCLA/SARA 304 Reportable Quantity (RQ)
Report product spills >= 268 gal. (based on diquat [RQ = 1,000 lbs.] content in the formulation) RCRA Hazardous Waste Classification (40 CFR 261)
Not Applicable
TSCA Status
Exempt from TSCA, subject to FIFRA
SECTION 16: OTHER INFORMATION
NFPA Hazard Ratings HMIS Hazard Ratings
Health: 2 Health: 2
Flammability: 1 Flammability: 1
Instability: 0 Reactivity: 0
0 Minimal
1 Slight
2 Moderate
3 Serious
4 Extreme
* Chronic
Original Issued Date: 4/11/2002
Revision Date: 6/1/2015 Replaces: 11/10/2014 Sections Revised: 1-16 Duke's Root Control, Inc. believes that the information and recommendations contained herein (including data and statements) are accurate as of the date thereof. NO WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTY OF
MERCHANTABILITY, OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED, IS MADE CONCERNING THE INFORMATION PROVIDED HEREIN. The information provided herein relates to the specific product designated and may not be valid where such product is used in combination with any other materials or in any process. Further, since the conditions and methods of use of the product and of the information referred to herein are beyond the control of Duke's Root Control, Inc., Duke's Root Control, Inc. expressly disclaims any and all liability as to any results obtained or arising from any use of the product or reliance on such information.
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Enclosures
cc: Braden Boyko; Duke’s Root Control Inc.
4110 136TH ST CT NW
GIG HARBOR, WA 98332
T: (253) 853-7369
[email protected]
July 26, 2022
EMAIL DELIVERY
[email protected]
Document Processing Desk (COADR)
Office of Pesticide Programs (7504P)
ATTN: Louis Vaughn
U.S. Environmental Protection Agency
Room S-4900, One Potomac Yard
2777 S. Crystal Drive
Arlington, VA 22202-4501
RE: Change in Company Address for Duke’s Root Control Inc. (EPA Company Number 94625) Dear Mr. Vaughn,
Please let this letter serve as notice to the Agency that the company address for Duke’s Root Control Inc. (Co. No. 94625) has changed.
The current address of record is:
Duke’s Root Control Inc.
1020 Hiawatha Blvd., West
Syracuse, NY 13204
The NEW address of record is:
Duke’s Root Control Inc.
400 Airport Road, Suite E
Elgin, IL 60123
Agent Address:
Pyxis Regulatory Consulting, Inc.
Agent for Duke’s Root Control Inc.
4110 136th Street Ct. NW
Gig Harbor, WA 98332
Phone: (253) 853-7369
Note: A letter of authorization from Duke’s Root Control Inc. authorizing Pyxis Regulatory Consulting, Inc. to act on their behalf is attached. Please direct all Agency correspondence to Pyxis Regulatory Consulting, Inc. If you have any questions, please do not hesitate to contact me at 253-853-7369 or [email protected].
Sincerely,
Arianna Shorey
Agent for Duke’s Root Control Inc.
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DUKE’S
ROOT CONTROL, INC.
1020 Hiawatha Blvd., West
Syracuse, NY 13204‐1131
1‐800‐44‐ROOTS
(315) 472‐4781
Fax (315) 475‐4203
The Full‐Service Root Control Experts
SYRACUSE • DALLAS • ATLANTA • COLUMBUS • CHICAGO
OAKLAND • PORTLAND • DENVER
April 2, 2019
To Whom It May Concern:
RE: Letter of Authorization
Dear Sir or Madam:
Please let this letter serve to confirm that Pyxis Regulatory Consulting, Inc. is authorized to act as agent for Duke’s Root Control Inc. (EPA Company Number pending), before the U.S. Environmental Protection Agency and state governmental agencies in all matters regarding our pesticide registrations pursuant to the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”), 7 U.S.C. § 136 et seq. and state law.
Please note that all Official Mail should be directed to Pyxis Regulatory Consulting, Inc. at the following address:
Pyxis Regulatory Consulting, Inc.
4110 136th Street Ct. NW
Gig Harbor, WA 98332
If you have any questions, please do not hesitate to contact me.
Sincerely,
Braden L. Boyko
Vice President
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BIDDER CUSTOMER REFERENCES
Bidder must provide a list of five current or former customers able to discuss prior experience with similar type of services requested by the City in the above-referenced IFB. Bidder’s references shall have similar volume and requirements to the City of Modesto’s as described in the above-referenced IFB. Bidders failing to provide references may be deemed as non-responsive.
The City may contact some or all of the references provided in order to determine the Bidder’s performance record on services similar to that described in the above-referenced IFB. The City reserves the right to contact references other than those provided in Bidder’s submission and to use the information gained from them in the award process.
Company Name:
Address:
City, State, Zip Code:
Contact Person:
Email Address:
Telephone Number:
Type of Business or
Governmental Agency:
Date Range of Service:
Annual Contract Value $
Company Name:
Address:
City, State, Zip Code:
Contact Person:
Email Address:
Telephone Number:
Type of Business or
Governmental Agency:
Date Range of
Services:
Annual Contract Value $
New Castle County, Delaware
87 Read's Way
New Castle,DE 19720
Kevin Penoza, PE
[email protected]
302-295-5723
County
2022
232,000.00
WSSC
14501 Sweitzer Ln, Laure
Prince George's, MD, 20707
Andres Villaraga
[email protected]
301-206-8006
Waste Water Utilities
2022
1,300,000.00
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Company Name:
Address:
City, State, Zip Code
Contact Person:
Email Address:
Telephone Number:
Type of Business or
Governmental Agency:
Date Range of
Services:
Annual Contract Value $
Company Name:
Address:
City, State, Zip Code
Contact Person:
Email Address:
Telephone Number:
Type of Business or
Governmental Agency:
Date Range of
Services:
Annual Contract Value $
Company Name:
Address:
City, State, Zip Code
Contact Person:
Email Address:
Telephone Number:
Type of Business or
Governmental Agency:
Date Range of
Services:
Annual Contract Value $
City of Runnemede, NJ
24 N. BLACK HORSE PIKE
Camden, NJ, 08078
Pat Moriarty
[email protected]
856-931-0646
City
2024-2025
19,700.00
Borough of Haddonfield, NJ
204 CARRIAGE LANE
Burlington, NJ, 08075
Donna Slack
[email protected]
856-764-6922
Borough
2023-2025
126,620.00
Charlotte Water, NC
600 E 4th St
Mecklenburg, NC, 28202
Mike Wirth
[email protected]
704-336-8507
Water Utilities
2022-2025
225,000.00
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BIDDER COMPANY HISTORY STATEMENT
Bidder shall have been in business for a minimum of three continuous years (immediately prior to the time of the City’s solicitation) providing the services described in this Invitation for Bids (IFB).
The Bidder’s company history overview statement shall be approximately one to three pages in length and inserted below:
Bidder Company Legal Name: Insert Bidder Logo Here (if existent):
Insert Bidder Company History Overview Statement Beginning Here:
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BIDDER WARRANTY STATEMENTS
As a material part of its Bid, Bidder shall insert below a written statement detailing any materials and workmanship warranties, terms and conditions in conformance with the specifications and requirements set forth in this IFB.
Notwithstanding any other provisions of this IFB, Bidder warrants that the materials, supplies, or other services furnished under any contract or purchase order resulting from its Bid shall be on the most suitable grade and meet or exceed the standards set forth in this IFB. Such warranty shall include the following; performance, workmanship, labor, materials, and Bidder design or engineering contributions. If a defect is discovered in any item of the materials, assemblies, components, supplies or services covered in this Bid, Bidder shall correct at its sole expense, all such defects as are reported within 30 days of City’s final acceptance. Upon expiration of the applicable warranty period, all such liability shall terminate except for fraud or such gross mistakes as amount to fraud, latent defects, or specific failure to comply with the terms or any resultant purchase order.
All materials, parts, labor, assemblies and components shall by subject to the warranty conditions and terms unless specifically exempted in writing by the City of Modesto.
Bidder Company Legal Name: Insert Bidder Logo Here (if existent):
Insert Bidder Warranty Statement Beginning Here:
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DUKES.COM 800.447.6687
GUARANTEE
We guarantee to kill all the roots in every sewer we treat and to eliminate the main line stoppages caused by live tree roots.
If live roots are found in a sewer within six months after the application, or if a treated sewer plugs up and floods due to tree roots during the guarantee period (see below), we will re-treat that section, at our own expense, or remit to the customer 100% of the payment we received to treat that section of sewer.
The decision of the customer as to the cause of the plug-up is binding.
This guarantee applies only to sewer stoppages caused by live tree roots. It does not apply to stoppages caused by grease or other foreign matter; flat, collapsed or deformed pipe; or flooding caused by a surcharged or plugged sewer section downstream from a guaranteed sewer section. This guarantee applies to main line sewers only.
Guarantee Period
Any section of sanitary sewer we treat will not plug up and flood due to tree root obstructions for a period of two years. The guarantee period begins on the date of treatment and ends two years after the date of treatment.
Extended Guarantee with Repeat Treatments
Whenever we perform a repeat application to a section of sewer within six months of the expiration of the previous guarantee, the guarantee is extended for an additional three years. Re-treatments performed at no charge in honor of the guarantee do not extend the expiration date of the guarantee.
Liability
Duke’s is an insured, fully-licensed pesticide application company and is certified to apply EPS-registered herbicides to sanitary sewers in compliance with Federal and State regulations. Duke’s accepts responsibility for any damage to above-ground vegetation. Duke’s is not responsible for damages caused by sewer stoppages. #19..
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.
NAME, ROLE, COMPANY LOCATION, YEARS EXPERIENCE,
EDUCATION, LICENsES, TRAINING RELEVANT PROJECT EXPERIENCE Dean Monk
V P, O P E R AT I O N S
• OSHA Confined Space Entry
• OSHA 10-Hour
• NASSCO PACP, MACP, LACP
• Traffic Control
• CPR/First Aid
• MAPS Management Training
• AZDEQ Grade 2 Wastewater
Operations Certification
• City of Los Angeles, CA - Cleaning/CCTV and
Condition Assessments
• Pima County, AZ - Wastewater CCTV Inspections
• Los Angeles County, CA - Sanitation District CCTV
Dean's will provide the staff and operational resources to execute the program. His team of project coordinators, field superintendents and field technicians will ensure that your project is done right and on time. Dean has extensive experience in managing condition assessment projects and maintenance/rehabilitation services for large, complex infrastructure systems and is dedicated to improving the industry with new technology.
DAN WITOWSKI
PROJECT MANAGER
• 10 years of experience
• BS, Environmental
Geoscience
• PACP/MACP/LACP, NASSCO,
#P0037319-042022
• Professional Management
Institute, PMP Certificate
(Expected Dec 2022)
• Village of Lombard, IL | 2022 SSES, Smoke Testing
• Village of Wauconda, IL | 2022 Smoke Testing Study
• Washington County Sewer Authority (Thompson &
Litton Engineering) | ITracker Microdetection Study
2022
• Hewitt, TX – iTracker Microdetection Program
Dan oversees the performance of the field investigations, data gathering, inspections. He coordinates all project status meetings internally and externally and coordinates permitting or other specific project needs. Dan's focus is 100% project completion, done safely, on time and on budget.
CITY OF AURORA | MAY 5, 2023
PAGE 5
CSO 4 SMOKE TESTING #19..
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NAME, ROLE, COMPANY LOCATION, YEARS EXPERIENCE,
EDUCATION, LICENsES, TRAINING RELEVANT PROJECT EXPERIENCE
MIKE SCHEIDLER
F I E L D
S U P E R I N T E N D E N T
• 24 years of experience
• Fire Science Degree,
McHenry College
• Flagger, Confined Space and
Hazmat Certified
• PACP/MACP/LACP Certified
by NASSCO, #U-0720-
70310016
• City of Woodbury, MN | 2018 Easement Manhole
Rehabilitation Program
• City of Hearne, TX | 2021 SSES Triage Program
• City of Warrenville, IL | 2022 Manhole Rehabilitation Program
• City of Fredericksburg, VA | 2021-2022
Microdetection and Flow Study Project
• City of McKinney, TX | 2022 SSES Triage Program
Mike manages the field technicians, coordinates traffic control, assists with issues that arise in the field, and serves as the primary point of contact during field work.
Darren Bouldin
GIS/DATA SPECIALIST
• 8 years of experience
• BS, Human Geography, East
Carolina University
• GIS Certificate, East Carolina
University
• Advanced and Coastal GIS
Training
• PACP/MACP/LACP Certified
by NASSCO, #U-0917-
07009187
• City of Myrtle Beach, SC - 2019 Manhole Inspections
• City of Columbia, SC - Wastewater Collection
System Manhole Survey, TO #1, Amendment #3
• City of Columbia, SC - Wastewater Collection
System Manhole Survey, TO #1, Amendment #2
(Manhole Inspections)
• City of Goldsboro, NC - Sewer Inspection and
Mapping Updates
• Winston-Salem City/County Utilities, NC - Water
and Sewer Mapping
• City of Reidsville, NC - GIS Sewer Mapping and Data
Processing
Darren will be responsible for data review, QA/QC, GIS, and mapping activities. He is also responsible for data delivery and integration.
Jeff Koonce
G I S M A N A G E R
• 17 years of experience
• MA, Teaching, University of
North Carolina at Chapel Hill
• BS, Horticulture, Clemson
University
• PACP/MACP/LACP Certified
by NASSCO, #U-1116-
07006058
• City of Myrtle Beach, SC - 2019 Manhole Inspections
City of Columbia, SC - Wastewater Collection
System Manhole Survey, TO #1, Amendment #3
• City of Columbia, SC - Wastewater Collection
System Manhole Survey, TO #1, Amendment #2
• City of Columbia, SC (Engineer: Brown and Caldwell)
- Rocky Branch 01 SSES
• City of Columbia, SC (Engineer: MWH) - Smith
Branch 02 SSES
• Winston-Salem City/County Utilities, NC - Water
and Sewer Mapping
Jeff has oversight for the data elements of project and will be responsible for the day-to-day needs of the project. He will ensure budget and schedule adherence and manage QA/QC of the project.
CITY OF AURORA | MAY 5, 2023
PAGE 6
CSO 4 SMOKE TESTING #19..
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1 Exhibit D:
Insurance Requirements for Most Contracts
(Not for Professional Services or Construction Contracts) Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Contractor, his agents, representatives, employees or subcontractors.
MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per accident for bodily injury and property damage.
3. Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
4. Contractors’ Pollution Legal Liability and/or Asbestos Legal Liability with limits no less than $1,000,000 per occurrence or claim, and $2,000,000 policy aggregate.
If the contractor maintains broader coverage and/or higher limits than the minimums shown above, the City of Modesto requires and shall be entitled to the broader coverage and/or the higher limits maintained by the contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Modesto.
Umbrella or Excess Coverage
The Contractor may use Umbrella or Excess Policies to provide the liability limits as required in this agreement.
This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and noncontributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Contractor’s primary and excess liability policies are exhausted.
The insurance policies are to contain, or be endorsed to contain, the following provisions:
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2 Additional Insured Status
The City of Modesto, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, or equipment furnished in connection with such work or operations.
General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance with coverage equal to ISO form CG 2010. For completed operations, a separate endorsement equal to ISO form CG 2037 is required.
Primary Coverage
The Additional Insured coverage under the Contractor’s policy shall be “primary and non-contributory” and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as CG 20 01 04 13. The City of Modesto does not accept endorsements limiting the Contractor’s insurance coverage to the sole negligence of the Named Insured.
Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City of Modesto.
Waiver of Subrogation
Contractor hereby grants to City of Modesto a waiver of any right to subrogation which any insurer of said Contractor may acquire against the City of Modesto by virtue of the payment of any loss under such insurance.
Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City of Modesto has received a waiver of subrogation endorsement from the insurer.
Self-Insured Retentions
All Self-insured retentions must be disclosed to Risk Management for approval and shall not reduce the limits of liability. The City of Modesto may require the Contractor to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. Any and all deductibles and SIRs shall be the sole responsibility of Contractor or subcontractor who procured such insurance and shall not apply to the Indemnified Additional Insured Parties.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City of Modesto.
Verification of Coverage
Contractor shall furnish the City of Modesto with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and #19..
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3 endorsements are to be received and approved by the City of Modesto Risk Services before work commences.
However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor’s obligation to provide them. The City of Modesto reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. City reserves the right to obtain a full certified copy of any insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of right to exercise later.
Subcontractors
Contractors shall require and verify that all subcontractors, or other parties hired for this work, purchase and maintain coverage for indemnity and insurance requirements as least as broad as specified in this agreement to the extent they apply to the scope of the subcontractor’s work with the same certificate of insurance requirements and naming as additional insureds all parties to this contract.
Special Risks or Circumstances
City of Modesto reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
Certificate Holder Address
Proper address for mailing certificates, endorsements and notices shall be:
City of Modesto
Attn: Risk Management
1010 10th Street
Modesto, CA 95354
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
May 12, 2026
Date: April 15, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Groundwater Recharge and Storage Feasibility Study - Phase II Engineering Services Agreement with Woodard & Curran
CONTACT: Jim Alves, Senior Civil Engineer, [email protected], 209-571-5557 DESCRIPTION:
Consider approving an Engineering Services Agreement with Woodard & Curran, of Sacramento, CA, for the preparation of the Groundwater Recharge and Storage Feasibility Study - Phase II, in the amount of $142,040, plus $7,110 in Additional Services, if needed, for an Agreement total not to exceed $149,150. (Funding Source: Water Fund) STRATEGIC PLAN ELEMENT:
The recommended action supports the 2025-2026 City’s Strategic Plan Initiatives, Goal D: Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.
BACKGROUND:
The Utilities Department is actively working to find ways to better capture and reuse stormwater to address two major challenges the City is facing: flooding in areas with outdated or undersized drainage systems and groundwater levels impacted by urban development reducing natural groundwater recharge.
In support of this effort, staff issued a Task Order to Woodard & Curran for the preparation of the Groundwater Recharge and Storage Feasibility Study. Phase I of the study focused on identifying the most feasible project locations from a list of potential locations provided by staff based on known current and ongoing concerns. Woodard & Curran was also asked to use federal grant guidelines, such as the funding programs offered by the United States Bureau of Reclamation, as part of their ranking process to ensure the projects would also be competitive for grant funding.
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City Council, May 12, 2026
Groundwater Recharge and Storage Feasibility Study - Phase II Engineering Services Agreement with Woodard & Curran
DISCUSSION:
The scope of work for Phase II of the Groundwater Recharge and Storage Feasibility Study will focus on developing the projects identified in Phase l for implementation through:
• Analysis of Local Soil and Groundwater Conditions
• Evaluation of Storage Capacity
• Impacts to Existing Storm Drain and Wastewater Infrastructure • Development of Conceptual Project Designs
• Preparation of Estimated Project Budgets
• Identification of State and Federal Funding Opportunities • Support of Established Urban Water Management Plan Strategies Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases, which meet or exceed $100,000 for material, equipment, or contractual services to follow formal bid procedures. However, exceptions to the formal bidding process are granted in Modesto Municipal Code Section 8-3.204(d) “Where the Purchasing Manager, in his or her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality”.
Here, given Woodard & Curran’s direct involvement in Phase I, their experience with the City on previous successful projects and their role in preparing the Stanislaus and Tuolumne Rivers Groundwater Basin Association – Groundwater Sustainability Agency’s Groundwater Sustainability Plan, continuing to work with Woodard & Curran is the most efficient approach; Avoiding the time and costs associated with going through the process to hire and familiarize a new consultant to the progress that has been made to date on this study.
Therefore, staff recommends that an Engineering Services Agreement with Woodard & Curran for the preparation of the Groundwater Recharge and Storage Feasibility Study - Phase ll should be exempt from the formal bidding procedures in accordance with Modesto Municipal Code 8-3.204(d).
FISCAL IMPACT:
Expenses associated with this effort will be housed in the following Non-Capital Project:
100875 - ASR Program
Anticipated Project Expenditures
Engineering Services Agreement $142,040
5% Additional Services, if Needed $7,110
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City Council, May 12, 2026
Groundwater Recharge and Storage Feasibility Study - Phase II Engineering Services Agreement with Woodard & Curran
Engineering/Design/Administration - City Staff $10,000
Total $159,150
CEQA/NEPA REQUIREMENTS:
This item does not constitute a project under the California Environmental Quality Act Guidelines, Section 15378 and requires no environmental review.
COMMITTEE RECOMMENDATION:
This item was considered by the Economic Development Committee at the meeting held on April 6, 2026, where it was recommended that it be forwarded to Council.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution approving an Engineering Services Agreement with Woodard & Curran, of Sacramento, CA, for the preparation of the Groundwater Recharge and Storage Feasibility Study - Phase II, in the amount of $142,040, plus $7,110 in Additional Services, if needed, for an Agreement total not to exceed $149,150 and authorizing the City Manager, or his designee, to execute the Agreement.
Approved by:
William Wong, Director of Utilities
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
2. Woodard & Curran - Engineering Services Agreement and exhibits A-C
3. Woodard & Curran - Bid Waiver
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5/12/2026/Utilities/JAlves/Item X 1 2026-XX
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION APPROVING AN ENGINEERING SERVICES AGREEMENT
WITH WOODARD & CURRAN, OF SACRAMENTO, CA, FOR THE
PREPARATION OF THE GROUNDWATER RECHARGE AND STORAGE
FEASIBILITY STUDY - PHASE II, IN THE AMOUNT OF $142,040, PLUS $7,110 IN ADDITIONAL SERVICES, IF NEEDED, FOR AN AGREEMENT TOTAL NOT TO EXCEED $149,150 AND AUTHORIZING THE CITY
MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT
WHEREAS, the Utilities Department is actively working to find ways to better capture and reuse stormwater to address two major challenges the City is facing: flooding in areas with outdated or undersized drainage systems and groundwater levels impacted by urban development reducing natural groundwater recharge; and
WHEREAS, in support of this effort, staff issued a Task Order to Woodard & Curran for the preparation of the Groundwater Recharge and Storage Feasibility Study; and
WHERAS, Phase I of the study focused on identifying the most feasible project locations from a list of potential locations provided by staff based on known current and ongoing concerns; and
WHERAS, the scope of work for Phase II of the Groundwater Recharge and Storage Feasibility Study will focus on developing the projects identified in Phase l for implementation; and
WHEREAS, Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases, which meet or exceed $100,000 for material, equipment, or contractual services to follow formal bid procedures; and #20..
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5/12/2026/Utilities/JAlves/Item X 2 2026-XX
WHEREAS, exceptions to the formal bidding process are granted in MMC Section 8-3.204(d) “Where the Purchasing Manager, in his or her discretion, determines that a process other than the formal bid procedure set forth in MMC Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality”; and
WHEREAS, retaining Woodard & Curran ensures continuity, reduces costs and delays, and maintains a consistent level of professional service based on their experience and project related expertise; and
WHEREAS, staff is recommending that the Engineering Services Agreement with Woodard & Curran should be exempt from the formal bidding procedures in accordance with MMC 8-3.204(d).
NOW, THEREFORE BE IT RESOLVED by the Council of the City of Modesto that it hereby approves an Engineering Services Agreement with Woodard & Curran, for the Groundwater Recharge and Storage Feasibility Study - Phase II in the amount of $142,040, plus $7,110 in Additional Services, if needed, for an Agreement total amount not to exceed $149,150.
BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the agreement in a form approved by the City Attorney.
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5/12/2026/Utilities/JAlves/Item X 3 2026-XX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of May 2026, by Councilmember _______________, who moved its adoption, which motion being duly seconded by Councilmember _______________, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST:
DIANA NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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1 STANDARD AGREEMENT TERMS FOR CONSULTANT SERVICES
ENGINEERING SERVICES
GROUNDWATER RECHARGE AND STORAGE FEASIBILITY STUDY - PHASE II THIS AGREEMENT made and entered into in the City of Modesto, State of California, this ______ day of __________________, 2026, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "CITY", and WOODARD & CURRAN, a Maine Corporation, hereinafter referred to as "CONSULTANT".
This AGREEMENT is made with regard to the following recitals:
a. CITY has determined that Engineering Services are necessary for the preparation of the Groundwater Recharge and Storage Feasibility Study – Phase II b. CONSULTANT represents that it is qualified, willing, and able to provide the services to prepare said document(s).
NOW, THEREFORE in consideration of this AGREEMENT, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:
1. SCOPE OF SERVICES.
CONSULTANT shall undertake and complete the preparation of the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit (A) or “Project”. The CONSULTANT shall perform the services as described in Exhibit (A), as of the Effective Date of this Agreement. CONSULTANT shall diligently proceed with the preparation of the project and agrees to complete said preparation in a manner compatible with the standards of its profession. CONSULTANT shall produce a fully complete project that is acceptable to the CITY within the time period set forth in Exhibit (A).
2. TERM OF AGREEMENT.
This Agreement is effective as of the date first written above and will continue in effect until CITY’s acceptance of and payment for all services authorized by CITY and performed by CONSULTANT, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.
3. COMPENSATION.
CONSULTANT agrees to accept a sum not to exceed ONE HUNDRED FORTY-TWO THOUSAND FORTY AND 00/100 DOLLARS ($142,040) (maximum compensation) as full remuneration for performing all services and furnishing all staffing and materials for CITY in accordance with Exhibit (A).
The Compensation shall be paid pursuant in the manner and at the times set forth below:
CITY shall pay CONSULTANT on a time and materials basis for CONSULTANT’s actual costs for all work called for in Exhibit (A) to this AGREEMENT. All work to be performed under this AGREEMENT shall be billed at the hourly rates set forth in Exhibit (B) attached hereto. #20..
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2 CONSULTANT shall submit monthly invoices to CITY which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any reimbursable expenses paid by CONSULTANT and identified in Exhibit (B) or approved by the CITY in writing.
Expenses for travel reimbursement shall comply with the City's Administrative Directive (AD) 1.2, as amended periodically. The City's AD 1.2 is accessible at the following link:
https://www.modestogov.com/DocumentCenter/View/24156/Citys-Administrative-Directive-12.
CITY shall pay CONSULTANT by Net 30 terms via CITY's ePay Program.
Additional services may be authorized by the City Manager in the amount up to, but not to exceed five percent (5%) of the agreed maximum compensation, or SEVEN THOUSAND ONE HUNDRED TEN AND 00/100 DOLLARS ($7,110). In the event that the additional services are deemed necessary, the Consultant shall provide a written request to the City Manager indicating the reason for the additional work, scope and cost of such work. The City Manager shall provide a written response to the request, either approving or denying the additional expenditure. If additional services are requested and approved, they will be billed at the hourly rate set forth in Exhibit (B) and may not exceed the amount requested and approved in writing by the City Manager. In that event, the new total compensation shall not exceed ONE HUNDRED FORTY-NINE THOUSAND ONE HUNDRED FIFTY AND 00/100 DOLLARS ($149,150). If additional services in excess of this amount are deemed necessary by City Staff, an amendment to this Agreement will be required and must be approved by the City Council prior to commencing the work.
4. OBLIGATIONS OF CONSULTANT.
Throughout the term of this AGREEMENT, CONSULTANT shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business. CONSULTANT warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to provide the CITY with the services contemplated by this AGREEMENT.
CONSULTANT further warrants that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.
5. PERFORMANCE BY KEY EMPLOYEE.
CONSULTANT has represented to CITY that Leslie Dumas will be the person primarily responsible for the performance of the services referred to in this AGREEMENT. CITY has entered into this AGREEMENT in reliance on that representation by CONSULTANT. CONSULTANT therefore agrees that ten percent (10%) or more of the time to be devoted to the project that is the subject of this AGREEMENT will be that of the above-named person.
6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.
Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the CITY, and may be used by CITY as it may require without any additional cost to CITY. No reports shall be used by the CONSULTANT for purposes other than this AGREEMENT without the express prior written consent of CITY. #20..
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3 Title to Data
If, as a part of the AGREEMENT, CONSULTANT is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials, the originals of all such data generated under this AGREEMENT will be delivered to CITY upon the completion or termination of services under the AGREEMENT. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this AGREEMENT are prepared specifically for the CITY and are not necessarily suitable for any future or other use.
All materials, documents, data or information obtained from the CITY data files or any CITY medium furnished to CONSULTANT in the performance of this AGREEMENT will at all times remain the property of the CITY. Such data or information may not be used or copied for direct or indirect use by CONSULTANT after termination of this AGREEMENT without written consent of the CITY.
7. NEWS AND INFORMATION RELEASE.
CONSULTANT agrees that it will not issue any news releases in connection with either the award of this AGREEMENT, or any subsequent amendment of or efforts under this AGREEMENT, without first obtaining review and approval of said news releases from CITY through the CITY Manager.
8. CONFLICT OF INTEREST.
CONSULTANT warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would create a “conflict of interest”, as that term is defined in the Political Reform Act (Gov. Code § 81000 et seq), for the CONSULTANT in the performance of this AGREEMENT.
CONSULTANT warrants that, in performance of this AGREEMENT, CONSULTANT shall not employ any person having any such interest. CONSULTANT understands that, if this AGREEMENT is made in violation of Government Code § 1090 et seq., the entire AGREEMENT is void and CONSULTANT will not be entitled to any compensation for services performed. CONSULTANT agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this AGREEMENT if so required at the option of CITY.
9. AMENDMENTS.
This AGREEMENT, including the Exhibits attached hereto, may be amended only by a writing signed by both Parties. CITY will not be responsible to pay any charges CONSULTANT may incur in performing services not identified in Exhibit (A) unless first authorized by the CITY in writing.
10. INDEPENDENT CONTRACTOR.
All acts of CONSULTANT, its agents, officers, and employees and all others acting on behalf of CONSULTANT relating to the performance of this AGREEMENT, shall be performed as independent contractors and not as agents, officers, or employees of CITY. Except as CITY may specify in writing, CONSULTANT has no authority to bind or incur any obligation on behalf of CITY. CONSULTANT has no authority or responsibility to exercise any rights or power vested in the CITY. It is understood by both CONSULTANT and CITY that this AGREEMENT shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture. CONSULTANT, its agents, #20..
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4 officers and employees are and, at all times during the terms of this AGREEMENT, shall represent and conduct themselves as independent contractors and not as employees of CITY.
CONSULTANT shall determine and control the method, details and means of performing the work and services to be provided by CONSULTANT under this AGREEMENT. CONSULTANT shall be responsible to CITY only for the requirements and results specified in this AGREEMENT and, except as expressly provided in this AGREEMENT, shall not be subjected to CITY's control with respect to the physical action or activities of the CONSULTANT in fulfillment of this AGREEMENT. CONSULTANT is permitted to provide services to others during the same period service is provided to CITY under this AGREEMENT. If necessary, CONSULTANT has the responsibility for employing other persons or firms to assist CONSULTANT in fulfilling the terms and obligations under this AGREEMENT.
If in the performance of this AGREEMENT any third persons are employed by CONSULTANT, such persons shall be entirely and exclusively under the direction, supervision, and control of CONSULTANT.
All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the CONSULTANT.
It is understood and agreed that as an independent contractor and not an employee of CITY neither the CONSULTANT or CONSULTANT's assigned personnel shall have any entitlement as a CITY employee, right to act on behalf of the CITY in any capacity whatsoever as an agent, or to bind the CITY to any obligation whatsoever. It is further understood and agreed that CONSULTANT must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of CONSULTANT's personnel. As an independent CONSULTANT, CONSULTANT hereby indemnifies and holds CITY harmless from any and all claims that may be made against CITY based upon any contention by any third party that an employer-employee relationship exists by reason of this AGREEMENT.
11. ASSIGNMENT.
Neither this AGREEMENT nor any portion thereof shall be subcontracted or assigned, without the express prior written consent of the CITY in each and every instance.
12. PATENT/COPYRIGHT MATERIALS.
Unless otherwise expressly provided in the AGREEMENT, CONSULTANT shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this AGREEMENT. CONSULTANT shall furnish a warranty of such right to use to CITY at the request of CITY.
13. NOTICES.
Notice required by this AGREEMENT shall be given in writing and shall be deemed given and effective upon delivery provided that such are delivered in accordance with the provisions of this Section. Notices shall be delivered either by: (a) personal delivery; (b) overnight courier service which obtains confirmation of delivery; or (c) certified mail, return receipt requested, if delivery is confirmed by a return receipt; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to #20..
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5 such other address as a party may designate by written notice given in accordance with the provisions of this Section:
CONSULTANT: Woodard & Curran
Attention: Leslie Dumas
801 T Street
Sacramento, CA 95811
(916) 999-8700
[email protected]
CITY: City of Modesto
Utilities Department - Engineering
Attention: Jim Alves
1010 10th Street, Suite 4600
Modesto, CA 95354
(209) 571-5557
[email protected]
14. INSURANCE REQUIREMENTS.
During the term of this AGREEMENT, CONSULTANT shall maintain in full force and effect at its own cost and expense the insurance coverage as set forth in the attached Exhibit (C) to this AGREEMENT and shall otherwise comply with the other provisions of Exhibit (C) to this AGREEMENT. CONSULTANT is responsible for uploading updated insurance documentation to the City's "PINS Advantage" program.
15. TERMINATION OF AGREEMENT.
Termination by CITY for Default of CONSULTANT
Should the CONSULTANT default in the performance of this AGREEMENT or materially breach any of its provisions, at its option, CITY may terminate this AGREEMENT by giving written notification to CONSULTANT. The termination date shall be the effective date of the notice. For the purposes of this section, material breach of this AGREEMENT shall include, but not limited to, any of the following:
failure to perform required services or duties, willful destruction of City's property by CONSULTANT, dishonesty or theft.
Termination by CITY for Convenience
The City may also terminate the CONSULTANT's performance under the AGREEMENT, either in whole or in part, at its own discretion, or when conditions encountered during the services make it impossible or impracticable to proceed, or when the City is prevented from proceeding with the AGREEMENT by act of God, by law, or by official action of a public authority, or upon a determination by the City that such termination is in the best interest and convenience of the City, or whenever the City is prohibited from completing the services for any reason. The City shall provide no less that ten (10) calendar days written notice of its intent to terminate the AGREEMENT for convenience and shall endeavor to provide the CONSULTANT with consultation with the City prior to termination. #20..
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6 Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the CONSULTANT shall:
A. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
B. Terminate all orders and subconsultants except as necessary to complete any portion of the work that is not terminated;
C. If directed in writing by the CITY to do so, assign all right, title and interest in subcontracts and materials in progress to CITY, in which case the CITY will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such subconsultants, but in no event shall recovery by any CONSULTANT or subconsultant include lost profits for portions of the work not completed or undertaken, including materials not delivered; D. Deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the CONSULTANT in performing the work whether completed or in process; E. Settle outstanding liabilities and claims, subject to the approval of CITY; F. Complete performance of such part of the work as has not been terminated; G. Take such other actions as may be necessary, or as may be directed by the CITY for the protection and preservation of the work and/or property related to the work; H. If CITY so requests, and at CITY's cost, CONSULTANT shall provide sufficient oral or written status reports to make CITY reasonably aware of the status of CONSULTANT's work on the project.
I. The CONSULTANT understands and agrees that CITY may, in CITY's sole discretion, refuse to pay CONSULTANT for that portion of CONSULTANT's services which were performed by CONSULTANT on the project prior to the termination date and which remain unacceptable and/or not useful to CITY as of the termination date.
CITY will pay CONSULTANT an amount based on the percentage of satisfactory work completed in accordance with the notice or termination. The final payment to the CONSULTANT after termination for convenience shall be limited to amounts due and owing under the AGREEMENT at time of termination, including the following:
A. The cost of settling and paying valid claims arising out of the termination of the work such as subconsultant AGREEMENTS or contracts for materials; B. The AGREEMENT price allocable to the portion of the work properly performed, or goods supplied to the work site by the CONSULTANT as of the date of termination, as #20..
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7 determined in accordance with the notice of termination, reduced by any sums previously paid to the CONSULTANT.
Authorization to Terminate Agreement
Termination of the AGREEMENT may be invoked by the City Manager, or his/her designee, subject to the right of the CONSULTANT to appeal the City Manager, or his/her designee's, decision to the City Council. The CONSULTANT shall appeal by notifying the City Clerk in writing within ten (10) calendar days of receipt of written notification from City of termination of the AGREEMENT. In the event that termination of this AGREEMENT is upheld by the City Council, any cessation of payment of delay claims, extended claims, Eichleay claims, or any other claims for delay shall be retroactive to the date of termination selected by the City Manager, or his/her designee.
16. INDEMNITY.
If CONSULTANT is Design Professional performing design professional services, as defined in California Civil Code section 2782.8, CONSULTANT agrees to indemnify, defend, and hold harmless the CITY, its agents, officers, officials, employees and volunteers, from and against any and all claims, demands, costs, or liability that arise out of, or pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT and its employees, officials, officers, agents or agents in the performance of services under this AGREEMENT, but this indemnity does not apply to liability for damages arising from the sole negligence, or willful misconduct of the CITY. The CITY agrees that in no event shall the cost to defend charged to the CONSULTANT exceed that CONSULTANT'S proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, the CONSULTANT shall meet and confer with other parties regarding unpaid defense costs. This duty to indemnify shall not be waived or modified by contractual AGREEMENT or acts of the parties.
If CONSULTANT is not a Design Professional performing Design Professional Services, the CONSULTANT shall hold the CITY, its agents, officers, employees, and volunteers harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of CONSULTANT, or its agents, officers, officials, employees, or volunteers relating to or during the performance of its obligations under this AGREEMENT, except for claims arising from the sole negligence of the CITY.
CONSULTANT'S obligation to defend, indemnify, and hold the CITY, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this AGREEMENT for CONSULTANT to procure and maintain a policy of insurance.
In the event that CONSULTANT or any employee, agent, or subcontractor of CONSULTANT providing services under this AGREEMENT is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of CITY, CONSULTANT shall indemnify, defend, and hold harmless CITY for the payment of any employee and/or employer contributions for PERS benefits on behalf of CONSULTANT or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of CITY.
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8 17. DISPUTE RESOLUTION.
Venue for all claims, controversies, or disputes arising out of, or relating to the formation of this AGREEMENT, or the breach, termination execution, enforcement, interpretation, or validity of this AGREEMENT, including the determination of the scope or applicability of this AGREEMENT provision shall be in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California.
18. ATTORNEY'S FEES.
If a party to this AGREEMENT brings any action, including an action for declaratory relief, to enforce or interpret this AGREEMENT, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.
19. ENTIRE AGREEMENT.
This AGREEMENT and its exhibits contain the entire understanding between CONSULTANT and CITY.
All previous proposals, offers and communications related to this AGREEMENT, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this AGREEMENT. No future waiver of or exception to any of the terms, conditions, and provisions of this AGREEMENT shall be considered valid unless specifically agreed to in writing by all the parties.
20. PARTIAL INVALIDITY.
If any provision in this AGREEMENT is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.
21. WAIVER.
The waiver by any party to this AGREEMENT of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.
22. AUDIT.
The CITY'S duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify CONSULTANT'S charges to CITY under this AGREEMENT.
CONSULTANT agrees to retain reports, records, documents, and files related to charges under this AGREEMENT for a period of four (4) years following the date of final payment for CONSULTANT services. CITY'S representative shall have the right to reproduce any of the aforesaid documents.
23. GOVERNING LAW.
This AGREEMENT shall be governed according to the laws of the State of California. #20..
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9 24. HEADINGS NOT CONTROLLING.
Headings used in the AGREEMENT are for reference purposes only and shall not be considered in construing this AGREEMENT.
25. COMPLIANCE WITH LAWS.
CONSULTANT shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. CONSULTANT shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.
26. BUSINESS LICENSE.
CONSULTANT will have a City of Modesto business license.
IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this AGREEMENT by its City Manager and attestation by its City Clerk under authority of Resolution No. ___________, adopted by the Council of the City of Modesto on the ______ day of ________________, 2026, and Woodard & Curran has caused this AGREEMENT to be duly executed as of the Effective Date.
(Signatures on Next Page)
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801 T Street
Sacramento, California 95811
www.woodardcurran.com
T 800.426.4262
T 916.999.8700
F 916.999.8701
Via Electronic Mail
November 18, 2025
Jim Alves
City of Modesto, Public Works
1010 10th Street
Modesto, CA 95354
RE: Proposal for Small Surface Water and Groundwater Storage Grant Feasibility Study – Phase 2, City of Modesto
Dear Jim:
Woodard & Curan is pleased to present this proposal to the City of Modesto (City) for preparing the second phase of a feasibility study that would meet the typical requirements for a United States Bureau of Reclamation (USBR) funding opportunity. For the purposes of this scope of work, the Feasibility Study would address the requirements for the USBR Small Surface Water and Groundwater Storage Program (Small Storage Program) and/or Title XVI Program, which are potential future funding opportunities the City may choose to pursue. The Small Storage Program requires that the project(s) have a total storage capacity of between 200 AF and 30,000 AF, increase surface water or groundwater storage, or convey water, directly or indirectly, to or from surface water or groundwater storage. The project(s) must increase yield, on average, above existing conditions. The Title XVI program provides cost-shared funding in four grant categories: water and energy efficiency, small-scale water efficiency, water strategy grants, and environmental water resources projects. The requirements of both the Small Storage Program’s Feasibility Study and Title XVI Feasibility Study are similar to those for other USBR programs such as the Water Infrastructure Improvements for the Nation (WIIN) Act, which funds several programs aimed at enhancing drinking water quality and infrastructure. The stormwater capture and reuse alternatives that would be identified by completing the feasibility study would be an eligible project type under several USBR programs which require a USBR-approved feasibility study to apply. This Phase 2 effort would position the City to apply for one of multiple funding opportunities under USBR and would develop information that could also be used to support non-USBR funding applications and capital planning efforts.
Project Understanding
The City is seeking to capture and reuse stormwater beneficially through groundwater recharge, diversion to the sanitary sewer system for treatment and use as recycled water, or through the capture, storage and direct reuse of stormwater runoff. Project alternatives consist of the creation of new detention and/or recharge basins or conversion of existing retention basins to support groundwater storage (via recharge basins) or surface water storage (via detention basins), as shown in Figure 1.
EXHIBIT A
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City of Modesto 2 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025 Figure 1: Project Alternative Types
The Project would reduce stormwater discharges to Modesto Irrigation District (MID) canals and support groundwater sustainability and supply reliability. Preliminary analysis of potential recharge basins and the conversion of existing detention basins has been completed in the Phase 1 Project and in the Infiltration Study of the Snyder East and West Basins, respectively, which together represents the groundwater recharge alternatives to be considered. This proposal assumes that information from both of these efforts will be used in the Feasibility Study, though additional analyses will be required to develop sufficient detail to meet the USBR Feasibility Study requirements.
This proposal would expand the alternatives assessment, identifying and developing surface water storage alternatives, including the conversion of existing stormwater runoff retention basins to detention/storage basins and potentially including additional pipelines to connect the detention basins to either the City’s existing sewer system for treatment as recycled water or to other direct reuse opportunities such as nearby irrigation or non-potable systems. For surface water alternatives, the City has identified large volumes of water that will be discharged at its three largest existing retention basins and one new basin. These are:
• La Coste Basin – 2,740 acre-feet per year (AFY). This will be a new non-stormwater basin located on City property east of the existing MID Terminal Tanks • Central Basin – 1,000 AFY
• West Basin – 450 AFY
• Orchard Basin – 200 AFY
Project Alternatives
Groundwater Storage
Convert existing retention
and detention basins into
percolation basins for
groundwater recharge
Construct new percolation
basins for groundwater
recharge
Surface Water Storage
Reoperate detention basins
for delayed discharge to
sewer for recycled water
production
Construct new basins or
convert existing ones for
storage and direct reuse
EXHIBIT A
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City of Modesto 3 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025 Additionally, the City has identified preliminary project ideas and concepts for 17 of its lift stations and basins. These concepts would be further explored in this scope of work and refined to those that are most promising from a benefit-cost perspective, as well as those alternatives considered more likely to be competitive for future funding applications.
SCOPE OF SERVICES
This scope of services is divided into the following tasks: 1) Expansion and Refinement of Project Alternatives, 2) Preparation of a Feasibility Study, and 3) Project Management and Meetings.
Task 1 Expansion and Refinement of Project Alternatives Subtask 1.1: Identify Priority Alternatives and Portfolios Woodard & Curran will meet with the City to review the initial list of 17 projects in the Excel file provided by the City on February 20, 2025 entitled “MID Lift Stations and Project Concepts”, the list of basins considered for conversion in the previously completed Infiltration Study of the Snyder East and West Basins, and the parcels considered for potential new recharge basins under the Phase 1 project. The meeting will discuss City priorities, preferences, and information that would inform a recommendation on which projects to further develop.
Following the meeting, Woodard & Curran will use the project list to develop up to five (5) portfolios of projects to be explored further as the project alternatives. The portfolios will consider opportunities to combine initial project concepts into larger projects where potentially reasonable, and would account for both the City’s preferences and priorities as well as Woodard & Curran’s professional opinion on projects that would be feasible, provide a meaningful benefit, and have fewer known obstacles to implementation (e.g., potential location, permitting, or assumed cost considerations). Portfolio themes considered may include:
• Conversion of existing basins only
• Creation of new basins only
• Easiest to implement “low hanging fruit”
• Maximum groundwater recharge
• Maximum diversion from stormwater system
Subtask 1.1 Assumptions:
• No more than five (5) portfolios will be selected for the Alternatives Analysis required in the Feasibility Study (Task 2).
• Portfolios will include a mix of groundwater and surface water storage opportunities to meet the Small Storage Program minimum storage requirements • Detailed analyses will not be completed for all projects on the initial list of projects to be considered prior to narrowing the list to the five portfolios to be developed. • Some projects may not be included in the portfolios.
Subtask 1.1 Deliverables:
• Project list review meeting materials
• List of recommended projects to explore (up to 5 projects)
EXHIBIT A
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City of Modesto 4 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025 Subtask 1.2: Evaluate Portfolios
Woodard & Curran will complete an evaluation of the portfolios to select a preferred Project (portfolio of projects) that would be included in the Feasibility Study (Task 2). The remaining portfolios would be retained for use as alternatives in the Feasibility Study. Portfolio evaluation will consider estimated cost per acre-foot (AF) of yield, benefits (e.g., volume of water available for recharge or reuse, volume of water diverted from MID canals, flood control benefits), ease of construction (e.g., permitting and environmental requirements, technical considerations, ownership), and how well it addresses the City’s goals.
Subtask 1.2 Assumptions:
• Cost estimates will be preliminary estimates (Class 5 estimates) with the intent being to compare the potential costs of the projects on a per-AF basis Subtask 1.2 Deliverables:
• Evaluation criteria
• Table summarizing evaluation of portfolios
Subtask 1.3: Project Development
Based on the outcome of the portfolio analysis in Subtask 1.2, Woodard & Curran will further develop the preferred portfolio to include information that will be needed to complete the Feasibility Study. This information will include more detailed descriptions of project components, more detailed cost estimates for capital costs as well as operations and maintenance (O&M), identification of potential permitting and environmental requirements, and legal considerations. The project will be described in a technical memorandum (TM) that can be used to support the Feasibility Study.
Subtask 1.3 Assumptions:
• Only the preferred project will be developed in more detail. • The cost estimate for the preferred project will be developed as a Class 4 cost estimate. • The TM will not be a design level document and will not be equivalent to a preliminary design report.
Subtask 1.3 Deliverables:
• Project TM
Task 2 Preparation of a Feasibility Study
Woodard & Curran would prepare a USBR-compliant Feasibility Study that meets the requirements for both the Small Surface Water and Groundwater Storage program and the Title XVI program, the two programs the City is most likely to pursue funding with. The feasibility study requirements for both programs are identical save for one component, risk and uncertainty, which is an additional requirement to be addressed under the Small Surface Water
EXHIBIT A
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City of Modesto 5 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025 and Groundwater Storage program. Woodard & Curran will prepare a compliant Feasibility Study as follows.
Subtask 2.1: Draft Feasibility Study
Woodard & Curran will prepare a draft Feasibility Study for the Project that addresses the feasibility study requirements as set forth by the USBR. The draft Feasibility Study will be provided to the City for comments. Sections include:
• Introduction and Background: Information on City of Modesto as the non-federal project sponsor, and a description of study area including project and study area map. • Statement of Problems and Need: Statement of problem and need for the Project, including SGMA-related considerations, summary of existing and projected water supplies and demands, and summary of water quality concerns for current and projected water supplies. Drafted under the Phase 1 project. • Project Opportunities and Options: Opportunities for surface water and groundwater storage in study area, sources of water that could be stored, description of beneficial uses, assessment of stakeholder support, description of water market, potential barriers to implementation and how to eliminate obstacles, identification of water agencies with jurisdiction in service area or over sources of water, description of water sources to be stored, how project meets water supply needs, other surface and groundwater storage projects and costs.
• Description of Alternatives: Planning objectives or alternatives, formulation of alternative plans including detailed project cost estimates, operations, maintenance and replacement (OM&R) estimates, lifecycle costs, and description of other water supply alternatives. Describe the non-federal funding condition. Provide estimated costs in terms of dollars per AF to compare alternatives. Developed in Subtask 1.2. • Economic Analysis: Economic analysis for Project and Alternatives, including economic benefits in relation to costs. Includes existing conditions and future projections with and without the project, and cost comparison of alternatives. Benefits measures must be consistent with methods in Paragraph 7.B of the Department of the Interior’s 707 DM 1. Document qualitative benefits if unable to quantify, and for complex Projects include collecting priority economic data.
• Selection of the Proposed Project: Justification of what the project was selected in relation to objectives, demands, needs, benefits, and other criteria important to the decision. To be drafted based on the analysis in Subtask 1.2. • Risk and Uncertainty: Incorporate risk and uncertainty analysis in the formulation, evaluation, and comparison of alternatives. To be drafted based on the analysis in Subtask 1.2.
• Environmental Consideration and Potential Effects: Provide sufficient information to allow Reclamation to assess potential measures and costs necessary to comply with
EXHIBIT A
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City of Modesto 6 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025 NEPA, including impacts to endangered or threatened species, public health or safety, natural resources, regulated waters of the United States Indian Sacred Sites, Indian Trust Assets, climate change, or cultural resources. Discussion of potentially significant environmental effects, description of required environmental compliance measures and relevant stakeholder communications, other information that would assist with assessing measures necessary to comply with NEPA, duration of potential impacts, discussion of extent public was involved in the Feasibility Study, potential effects on historic properties.
• Legal and Institutional Requirements: Identify legal or institution requirements or barriers to the project, including analysis of water rights issues, legal and institutional requirements that may affect project implementation, need for multijurisdictional or interagency agreements and relevant coordination, permitting procedures, and unresolved issues. To be based on the Project TM developed in Subtask 1.3. • Sufficient Non-Federal Funding and Financial Capability of the Project Sponsor:
Analysis to verify that there is sufficient non-federal funding to complete the project and conduct necessary OM&R for the project life. This includes the implementation schedule, willingness for the City to pay its share of costs, plan for funding construction and OM&R annual costs, and description of funding sources and associated restrictions.
Subtask 2.1 Assumptions:
• Project alternatives include the portfolios that were not selected and the No-Project alternative
• The Statement of Problem and Needs was prepared under the Phase 1 project and will be copied into the Feasibility Study
• The City will provide relevant GIS shapefiles for mapping, as necessary • No environmental analysis will be completed. The environmental questions will be addressed based on project location and type, but will not include cultural or biological records searches, nor does it include preparation of NEPA or CEQA documents.
Subtask 2.1 Deliverables:
• Draft Feasibility Study (electronic)
Subtask 2.2: Final Feasibility Study
Woodard & Curran will hold one call with the City to discuss comments on the Feasibility Study.
City comments will be addressed and a revised Feasibility Study will be provided for final review.
Following the City’s final review, Woodard & Curran will address any final edits and prepare a Final Feasibility Study for submittal to USBR. No additional review cycles will be provided.
To facilitate the schedule for preparation of this feasibility study, assuming no extension in the submittal deadline (currently unclear under the present administration), Woodard & Curran will
EXHIBIT A
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City of Modesto 7 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025 submit each draft section of the study to the City for review. In this way, the City will be able to rapidly review the final section(s), having reviewed previously completed sections.
Subtask 2.2 Assumptions:
• The City will submit the Final Feasibility Study to USBR • The City will have 2 weeks to review the Draft Feasibility Study or each section as submitted to the City
• The City will have 1 week to review the revised Feasibility Study or each revised section as submitted to the City
Subtask 2.2 Deliverables:
• Revised Feasibility Study (word)
• Final Feasibility Study (pdf)
Subtask 2.3: USBR Coordination
If USBR provides comments on the Feasibility Study or requests revisions, Woodard & Curran will assist the City in responding to USBR. This task includes one call with USBR to review comments, along with up to 32 hours of staff time to respond to comments. Woodard & Curran will provide a draft response(s) to comments for the City’s review, followed by a Final Response to Comments for the City to submit to USBR.
Subtask 2.3 Assumptions:
• USBR comments will require no more than 32 hours of time to respond. • One phone call will be held with USBR to discuss comments • The City will submit the final Response to Comments to USBR • The City will have up to one week to review the draft Response to Comments. Less time may be available should USBR require a faster response. • This task will be eliminated should the City choose not to submit the feasibility study to the USBR.
Subtask 2.3 Deliverables:
• Draft Response to Comments (word)
• Final Response to Comments (PDF)
Task 3: Project Management and Meetings
Woodard & Curran will hold an initial meeting to review the preliminary data request and Feasibility Study requirements. Bi-weekly meetings will be held between kickoff and submittal of the Feasibility Study. This task also includes monthly invoicing and progress reports.
Task 3 Assumptions:
• Meetings will be held virtually via MS Teams
• The Kickoff Meeting will be one hour
EXHIBIT A
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City of Modesto 8 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025 • Bi-weekly meetings will be half an hour each. Meeting reporting will be via email as needed
• Meetings will end following submittal of the Feasibility Study to USBR (or once the Feasibility Study is submitted to the City if the City decides not to submit to USBR) Task 3 Deliverables:
• Kickoff meeting agenda
• Initial data request
• Monthly invoices and progress reports
SCHEDULE
The scope of services described above will take approximately six (6) months to complete, assuming the Feasibility Study will be submitted to the USBR. The following elapsed-time schedule shows how the tasks will be completed following receipt of Notice to Proceed (NTP).
Responding to USBR’s comments on the final Feasibility Study is estimated to take approximately three (3) weeks from receipt of comments; however, this work is optional and is dependent on the scope and nature of the comments received.
BUDGET
The proposed budget for completion of the work described herein is summarized below:
Description of Work Budget
Task 1: Development of Project Alternatives $51,250
Task 2: Preparation of a Feasibility Study $66,380
Task 3: Project Management and Meetings $24,410
Contingency (5%) $7,110
Total Fee $149,150
EXHIBIT A
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City of Modesto 9 Woodard & Curran, Inc.
Small Storage Program Feasibility Study – Phase 2 November 18, 2025
TERMS AND CONDITIONS
The Scope of Services will be completed in accordance with the terms of the Consultant/Professional Services Agreement between Woodard & Curran, Inc. and City of Modesto, dated October 11, 2022.
CLOSING
We greatly appreciate this opportunity to offer our planning and engineering services. If you accept this proposal and wish to proceed with the Scope of Services, please sign the below Authorization to Proceed and return a copy for our files Please feel free to contact me or Leslie Dumas at 916-999-8700 or at [email protected] or [email protected], respectively, if you have any questions regarding this proposal or require any further information.
Sincerely,
Woodard & Curran, Inc.
Sally Johnson Leslie Dumas, PE
Project Manager Senior Technical Leader
EXHIBIT A
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4820
City of Modesto Fee EstimateSmall Surface Water and Groundwater Storage Feasibility Study - Alternatives Evaluation and FS Preparation Tasks Total
Technical
Leader/PIC
Project
Manager Project Planner Project Engineer
Leslie Dumas Shawn
Kenney
Ariel
O'Callaghan
Bhavika Patel
Assumptions $375 $330 $315 $300 $160
Task 1: Development of Project Alternatives
Subtask 1.1 Identify Priority Alternative and Portfolios 6 8 16 16 46 $14,730 $0 $0 $14,730 Subtask 1.2: Portfolio Evaluation 8 8 12 24 52 $16,620 $0 $0 $16,620Subtask 1.3 Project Development 8 16 16 32 72 $22,920 $0 $0 $22,920 Subtotal Task 1: 22 32 44 72 0 170 $54,270 $0 $0 $0 $54,270 Task 2: Preparation of a Feasibilty Study
Subask 2.1: Draft Feasibilty Study 16 35 56 36 0 143 $45,990 0 $0 $0 $46,133
1. Introduction/Background 1 4 5 $1,590 $0 $0 $1,5902. Statement of Problems and Needs Pull from Phase 1 0 $0 $0 $0 $03. Small Surface Water and Groundwater Storage Opportunities 4 612 22 $7,260 $0 $0 $7,2604. Description of Alternatives Pull from Subtask 1.2 2 2 610 $3,210 $0 $0 $3,2105. Economic Analysis 4 8 24 12 48 $15,300 $0 $0 $15,3006. Selection of Proposed Project Pull from Subtask 1.2 1 2 6 9 $2,835 $0 $0 $2,8357. Risk and Uncertainty Draft based on analysis in Subtask 1.2 1 4 8 13 $4,095 $0 $0 $4,0958. Environmental Consideration and Proposed Effects 2 6 8 16 $5,250 $0 $0 $5,2509. Legal and Institutional Requirements Based on TM from Subtask 1.3 1 2 4 7 $2,235 $0 $0 $2,23510. Sufficient Non-Federal Funding 1 4 8 13 $4,215 $0 $0 $4,215 Subtask 2.2: Final Feasibility Study 5 12 18 8 43 $13,905 $0 $0 $0 $13,905Subtask 2.1: Response to Comments 4 8 12 8 32 $10,320 $0 $0 $0 $10,320 Subtotal Task 2: 25 55 86 52 0 218 $70,215 $0 $0 $0 $70,215 Task 3: Project Management & Meetings
1.1 Kick-off Meeting 1 2 4 7 $2,295 $0 $0 $0 $2,2951.2 Progress Meetings 8 meetings 8 8 8 8 32 $10,560 $0 $0 $0 $10,5601.3 Contract Administration/Communication - Part 2 Invoicing, progress reports, schedule mgmt, other. Assumes a total of 5 m 5 20 10 8 43 $12,905 $0 $0 $12,905 Subtotal Task 1: 14 30 22 8 82 $25,760 $0 $0 $0 $25,760 Contingency (5%) $7,520
TOTAL 55 120 164 96 8 443 $141,965 $0 $0 $0 $157,765
Notes:2. Subconsultants will be billed at actual cost plus 10%.
5. Additional Woodard & Curran staff may perform work on the project, based on our standard billing rate schedule currently in effect.
1. The individual hourly rates include salary, overhead and profit3. Other direct costs (ODCs) such as reproduction, delivery, mileage (rates will be those allowed by current IRS guidelines), and travel expenses, will be billed at actual cost plus 10%4. W&C reserves the right to adjust its hourly rate structure and ODC markup at the beginning of the calendar year for all ongoing contracts March 11, 2026
Outside ODCs
Total Hours Total Labor
Costs (1)
Sub Consultant
Total Cost (2)
ODCs
Total ODCs
(3)
Total
Fee
Graphics
/Admin
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EXHIBIT C – Insurance Requirement for Professional Services Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Consultant his agents, representatives, employees or subconsultants.
MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:
1. 1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per accident for bodily injury and property damage.
3. Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
(Not required if consultant provides written verification, it has no employees)
4. Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate.
If the consultant maintains broader coverage and/or higher limits than the minimums shown above, the City of Modesto requires and shall be entitled to the broader coverage and/or the higher limits maintained by the consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Modesto.
Umbrella or Excess Coverage
The Consultant may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply #20..
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to a loss covered hereunder, shall be called upon to contribute to a loss until the Consultant’s primary and excess liability policies are exhausted.
The insurance policies are to contain, or be endorsed to contain, the following provisions:
Additional Insured Status
The City of Modesto, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Consultant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Consultant’s insurance with coverage equal to ISO form CG 2010. If Completed Operations endorsement is required, a separate endorsement equal to ISO form CG 2037 is required.
Primary Coverage
The Additional Insured coverage under the Consultant’s policy shall be “primary and noncontributory” and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as CG 20 01 04 13. The City of Modesto does not accept endorsements limiting the Consultant’s insurance coverage to the sole negligence of the Named Insured.
Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City of Modesto.
Waiver of Subrogation
Consultant hereby grants to City of Modesto a waiver of any right to subrogation which any insurer of said Consultant may acquire against the City of Modesto by virtue of the payment of any loss under such insurance. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City of Modesto has received a waiver of subrogation endorsement from the insurer.
Self-Insured Retentions
All Self-insured retentions must be disclosed to Risk Management for approval and shall not reduce the limits of liability. The City of Modesto may require the Consultant to purchase coverage with a lower retention or provide proof of the ability to pay losses and related investigations, claim administration, and defense expenses within the retention. Any and all deductibles and SIRs shall be the sole responsibility of consultant or subconsultant who procured such insurance and shall not apply to the Indemnified Additional Insured Parties.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City of Modesto.
Claims Made Policies (applicable to Professional Liability only) If any of the required policies provide claims-made coverage:
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1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.
2. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.
If coverage is canceled or non-renewed and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work.
Verification of Coverage
Consultant shall furnish the City of Modesto with original certificates and amendatory endorsements or copies of the applicable policy language affecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and endorsements are to be received and approved by the City of Modesto Risk Services before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. The City of Modesto reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. City reserves the right to obtain a full certified copy of any insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of right to exercise later.
Subconsultants
Consultants shall require and verify that all subconsultants, or other parties hired for this work, purchase and maintain coverage for indemnity and insurance requirements as least as broad as specified in this agreement to the extent they apply to the scope of the subconsultant’s work with the same certificate of insurance requirements and naming as additional insureds all parties to this contract.
Special Risks or Circumstances
City of Modesto reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
Certificate Holder Address
Proper address for mailing certificates, endorsements and notices shall be:
City of Modesto
Attn: Risk Management
1010 10th Street
Modesto, CA 95354
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
May 12, 2026
Date: April 13, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Approval of funding agreements for an affordable housing project at 1121 Needham Steet (El Capitan)
CONTACT: Patty Estrada, Administrative Analyst,
[email protected], 209-577-5527
DESCRIPTION:
Consider approving the acceptance of the Homekey+ Program award amount of $18,689,375, the Stanislaus County Community Services Agency (CSA) award amount of $922,837 in Homeless Housing Assistance and Prevention (HHAP), the Behavioral Health and Recovery Services (BHRS) award amount of $500,000 and the approval of the grant agreements with those applicable agencies and a Community Development Block Grant (CDBG) loan amount of $3,007,163 to El Capitan Homekey LP. (Funding Sources: Various Sources)
STRATEGIC PLAN ELEMENT:
The recommended action supports the City’s 2025-2026 Strategic Plan, Goal C:
Develop a Housing and Homelessness Action Plan.
BACKGROUND:
In March 2024, Proposition 1 passed by California voters advancing the state’s goals to reduce homelessness and protect vulnerable populations through important changes to the Mental Health Services Act. Proposition 1 provides up to $6.4 billion in bond funding to develop and expand behavioral health treatment, residential care settings, and Permanent Supportive Housing. Approximately $2 billion of the Proposition 1 bond funds will be administered by the California Department of Housing and Community Development (HCD), in collaboration with the California Department of Veterans Affairs (CalVet) as the Homekey+ program, expanding upon the successful Homekey model. #21..
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City Council, May 12, 2026
Approval of funding agreements for an affordable housing project at 1121 Needham Steet (El Capitan)
Homekey+ is modeled on HCD’s successful Homekey program. The Homekey+ program will support the development of Permanent Supportive Housing for veterans and other individuals with mental health and/or substance use disorder challenges who are at-risk of or experiencing homelessness. The program emphasizes the acquisition and rehabilitation of existing buildings, or other project types including new construction, that can be quickly converted or constructed for permanent affordable housing, generally within 12 months of award. Under Homekey+, local entities in partnership with a co-applicant may acquire and rehabilitate existing sites (e.g. hotels/motels, apartments), commercial properties, master lease, undergo new construction, and purchase of affordability covenants for the use as permanent affordable housing.
On February 4, 2025, by Council Resolution 2025-56, Council authorized staff to submit a Homekey+ Program application with an estimated total project cost of $22,896,000, approved a Memorandum of Understanding with El Capitan Homekey LP, and contingently committed the allocation of a City Community Development Block Grant loan (CDBG) not to exceed $3,007,163, a Stanislaus County Community Services Agency (CSA) allocation of $922,837 in Homeless Housing, Assistance, and Prevention (HHAP) funds, and a Behavioral Health and Recovery Services (BHRS) commitment of $500,000 to support the development of the El Capitan Homekey+ affordable housing project.
On September 19, 2025, HCD issued written notice to the City confirming that the El Capitan Project was awarded funding in the total amount of $18,689,375. Of this amount, an operational subsidy not to exceed $4,337,216 was also allocated to the project.
DISCUSSION:
The El Capitan Homekey+ project consists of the acquisition and rehabilitation of the motel located at 1121 Needham Street in Modesto to create 48 fully furnished studio units and one staff unit serving individuals earning 30% of the Area Median Income (AMI). The development will provide 24 permanent supportive housing units for individuals experiencing or at risk of homelessness who have a behavioral health condition, and 24 units reserved for veterans with similar needs. Of the 48 units, eight will meet Americans with Disabilities Act (ADA) accessibility standards, including five that also meet vision and communication requirements.
Each unit will be fully furnished and equipped with a bedroom area, kitchenette, air conditioning, refrigerator, bathroom, and free internet service. The project will also include onsite community space, supportive services offices, and laundry facilities.
Tenants will have access to comprehensive onsite supportive services, including case management, peer support, mental health services, and connections to additional resources.
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City Council, May 12, 2026
Approval of funding agreements for an affordable housing project at 1121 Needham Steet (El Capitan)
UPholdings and RH Community Builders have partnered as El Capitan Homekey LP to lead the development of the El Capitan Homekey+ project, for which the State of California has already awarded Homekey funding. The partnership brings the requisite experience in the development, ownership, and management of permanent supportive housing, demonstrated through their successful collaboration with the City of Modesto on the Jenny’s Place Homekey project and through the delivery of 509 permanent supportive housing units across the Central Valley in prior Homekey rounds. With the award secured, UPholdings and RH Community Builders will proceed with project implementation, assuming ownership and professional property management responsibilities. Consistent with their performance with similar projects throughout the region, the team will ensure full compliance with state and local requirements and maintain high‑quality housing and accessible supportive services for the project’s target population.
It has been identified that there are four long‑term, precariously housed households currently residing at the site that may need to be relocated as the property is converted into permanent supportive housing. To support an orderly and compliant transition, El Capitan Homekey LP engaged a professional relocation consultant who worked directly with each household to develop individualized relocation plans. These plans included tailored assistance to help residents identify, secure, and transition into new housing, in full compliance with the Uniform Relocation Act. Relocation costs are estimated at $166,336, including $80,000 in Homekey+ funds to support the transition to stable permanent housing.
The City has partnered with local agencies to support both the development and longterm operations of the El Capitan project. On January 16, 2025, the Stanislaus Community System of Care (CSOC) recommended an allocation of $922,837 in Homeless Housing, Assistance, and Prevention (HHAP) funds to be awarded as a grant and administered by the City for the project. In addition, on April 29, 2025, Stanislaus County Behavioral Health and Recovery Services (BHRS) committed $500,000 in capital funding to assist with project development, ongoing operations, and the provision of supportive services for eligible tenants. Both the BHRS and CSOC funding commitments are scheduled to be considered by the Board of Supervisors on May 21, 2026.
The Stanislaus Regional Housing Authority and the Department of Veterans Affairs have also pledged support through rental subsidies and supportive services, including Veterans Affairs Supportive Housing vouchers for eligible veterans to promote longterm housing stability. #21..
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City Council, May 12, 2026
Approval of funding agreements for an affordable housing project at 1121 Needham Steet (El Capitan)
City staff recommends approval of the full funding necessary to support the El Capitan Homekey+ project. This includes acceptance of the State Homekey+ Program award in the amount of $18,689,375; the Stanislaus County Community Services Agency (CSA) allocation of $922,837 in Homeless Housing, Assistance, and Prevention (HHAP) funds; and the Behavioral Health and Recovery Services (BHRS) commitment of $500,000.
Staff is recommending the approval of all associated agreements from these outside agencies required to administer these funds that will be presented to the project in the form of a grant. The City will then receive the funding and then be the passthrough for the County and BHRS funds and then enter into grant agreements with El Cap Homekey.
In addition, staff recommends approval of a City of Modesto Community Development Block Grant (CDBG) loan in an amount not to exceed $3,007,163 at 3% interest for a term of 55 years, with interest beginning to accrue upon issuance of the Certificate of Occupancy and repaid annually through residual receipts.
Funding Sources Award Amount
Homekey+ Capital Award $14,272,159
Homekey+ Operating Award $3,617,216
Homekey+ Veteran Operating Award $720,000
Homekey+ Relocation Award $80,000
Homekey+ Total Award $18,689,375
City Capital Contribution CDBG $3,007,163
Stanislaus County BHRS $500,000
Stanislaus Community System of Care HHAP $922,837
Developer Contribution $169,025
Total Funding Sources $23,288,400
Following Council approval, City staff will finalize and execute all required agreements associated with the Homekey+, HHAP, BHRS, and CDBG funding commitments. El Capitan Homekey LP will proceed with pre‑development activities, including due Homekey+ Project Costs Amount
Acquisition and Rehabilitation $14,195,699
Relocation $166,336
Pre-Development and Soft Costs $1,533,248
Contingency $980,000
Developer Fee $1,286,500
Subtotal (Capital) $18,161,783
Operating Expenses $5,126,617
Total Project Costs $23,288,400
#21..
- 943 -
City Council, May 12, 2026
Approval of funding agreements for an affordable housing project at 1121 Needham Steet (El Capitan)
diligence, design, permitting, and coordination with the relocation consultant to complete individualized relocation plans for affected households. Once pre‑development milestones are met, the development team will begin rehabilitation of the property and initiate ongoing coordination with City staff to ensure compliance with state and local requirements throughout construction and into project operations.
Project Timeline Estimated Date
Standard Agreement Execution May 2026
Acquisition May 2026
Construction Start May 2026
Construction Completion Spring 2027
Stabilized Occupancy Fall 2027
FISCAL IMPACT:
This project will be funded under project number 101644 for the development and operations of the El Capitan project in total amount of $23,288,200 plus activity delivery as outlined below:
• Homekey+: Receipt of $18,689,375 in State of California Homekey+ • U.S. Department of Housing and Urban Development CDBG (Fund 1130): in an amount does not exceed $3,007,163 and $350,000 in activity delivery for a total allotment of $3,357,163.
• Stanislaus County HHAP and BHRS: Receipt of $922,837 in HHAP funds and $500,000 in BHRS funds for a total of $1,422,837 from Stanislaus County There will be no impact on the General Fund.
COMMITTEE RECOMMENDATION:
This item was presented to the Citizen’s Housing and Community Development Committee on February 12, 2026 and was recommended to forward to City Council for approval.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution accepting the Homekey+ award in the amount of $18,689,375 and approving the Homekey Regulatory Agreement authorizing the City Manager or his designee to negotiate and execute an agreement with El Capitan Homekey LP for the development of 1121 Needham Street.
Resolution approving a Community Development Block Grant loan to El Capitan Homekey LP for a total not to exceed $3,007,163, and $350,000 in activity delivery, and authorizing the City Manager or his designee to negotiate and execute an agreement with El Capitan Homekey LP for the development of 1121 Needham Street.
Resolution approving an agreement with Stanislaus County Community Services Agency (CSA) for the acceptance of Homeless Housing Assistance and Prevention Program (HHAP) funding in the amount of $922,837 and to issue a grant the amount of #21..
- 944 -
City Council, May 12, 2026
Approval of funding agreements for an affordable housing project at 1121 Needham Steet (El Capitan)
$922,837 to El Capitan Homekey LP and authorizing the city manager or his designee to negotiate and execute an agreement with El Capitan Homekey LP for the development of the 1121 Needham Street.
Resolution approving an agreement with Stanislaus County Behavioral Health and Recovery Services (BHRS) for the acceptance of funding in the amount of $500,000 and to issue a grant the amount of $500,000 to El Capitan Homekey LP and authorizing the City Manager or his designee to negotiate and execute an agreement with El Capitan Homekey LP for the development of 1121 Needham Street.
Resolution amending the Fiscal Year 2025-26 annual operating and non-capital project fund budgets to establish the revenue, expenditures, and transfers for project #101644, fund 1346 in the amount of $23,119,375 to appropriate the Community Development Block Grant, Homeless Housing Assistance and Prevention Program (HHAP), and Behavioral Health and Recovery Services (BHRS) funds for the development of the 1121 Needham Street, and authorizing the City Manager or his designee to take the necessary steps to implement the provisions of this Resolution.
Approved by:
Jessica Hill, Director of Community
and Economic Development
Joseph P. Lopez, City Manager
Attachments:
1. Resolution Homekey
2. Resolution – CDBG
3. Resolution – CSA Agreement
4. Resolution – BHRS
5. Resolution – Budget
6. Homekey Standard Agreement
7. Homekey Regulatory Agreement
8. CDBG Loan Agreement
9. CDBG Deed of Trust
10.CDBG Promissory Note
11.CDBG Regulatory Agreement
12.MOU with Stanislaus County Community Services Agency (CSA)
13.HHAP Grant Agreement
14.BHRS Letter of Agreement
15.Levine Act Statement
#21..
- 945 -
05/12/2026/CED/Estrada/Item X 1 2026-
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION ACCEPTING THE HOMEKEY+ AWARD IN THE AMOUNT OF $18,689,375 AND APPROVING THE HOMEKEY REGULATORY AGREEMENT
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO NEGOTIATE
AND EXECUTE AN AGREEMENT WITH EL CAPITAN HOMEKEY LP FOR THE DEVELOPMENT OF THE 1121 NEEDHAM STREET
WHEREAS, the Homekey+ program is intended to support the development of Permanent Supportive Housing for veterans and other individuals with mental health and/or substance use disorder challenges who are at-risk of or experiencing homelessness; and
WHEREAS, through the Homekey+, local entities in partnership with a co-applicant may acquire and rehabilitate existing sites (e.g. hotels/motels, apartments), commercial properties, master lease, undergo new construction, and purchase of affordability covenants for the use as permanent affordable housing; and
WHEREAS, on February 4, 2025, by Council Resolution 2025-56, Council authorized staff to submit a Homekey+ Program application with an estimated total project cost of $22,896,000 approved a Memorandum of Understanding with El Capitan Homekey LP; and
WHEREAS, contingently committed the allocation of a City Community Development Block Grant loan (CDBG) to not to exceed $3,007,163, a Stanislaus County Community Services Agency (CSA) allocation of $922,837 in Homeless Housing, Assistance, and Prevention (HHAP) funds, and a Behavioral Health and Recovery Services (BHRS) commitment of $500,000 to #21..
- 946 -
05/12/2026/CED/Estrada/Item X 2 2026-
support the development of the El Capitan Homekey+ affordable housing project; and
WHEREAS, on September 19, 2025, the California Department of Housing and Community Development (HCD) issued written notice to the City confirming that the El Capitan Project was awarded funding in the total amount of $18,689,375; and
WHEREAS, Homekey+ funds must be used as described in the application to provide housing for individuals and families experiencing homelessness or who are at risk of homelessness and meet program criteria; and
WHEREAS, the funding will be available upon the execution of the California Department of Housing and Community Development (HCD) Standard Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it accepts the Homekey+ award in the amount of $18,689,375.
BE IT FURTHER RESOLVED, by the Council of the City of
Modesto that it approves the Regulatory Agreement with El Capitan Homekey LP for the development at 1121 Needham Street.
BE IT FURTHER RESOLVED that the City Manager or his
designee, is hereby authorized to negotiate and execute an agreement with El Capitan Homekey LP, as well as all agreements and documents with HCD, to carry out the purpose and intent of this resolution.
#21..
- 947 -
05/12/2026/CED/Estrada/Item X 3 2026-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of May, 2026, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _________________________
DIANE NAYARES-PEREZ,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
#21..
- 948 -
05/12/2026/CED/Estrada/Item X 1 2026-
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION APPROVING A COMMUNITY DEVELOPMENT BLOCK GRANT
LOAN TO EL CAPITAN HOMEKEY LP FOR A TOTAL NOT TO EXCEED $3,007,163 AND $350,000 IN ACTIVITY DELIVERY AND AUTHORIZING THE
CITY MANAGER OR HIS DESIGNEE TO NEGOTIATE AND EXECUTE AN
AGREEMENT WITH EL CAPITAN HOMEKEY LP FOR THE DEVELOPMENT OF 1121 NEEDHAM STREET
WHEREAS, the Homekey+ program is intended to support the development of Permanent Supportive Housing for veterans and other individuals with mental health and/or substance use disorder challenges who are at-risk of or experiencing homelessness; and
WHEREAS, through the Homekey+, local entities in partnership with a co-applicant may acquire and rehabilitate existing sites (e.g. hotels/motels, apartments), commercial properties, master lease, undergo new construction, and purchase of affordability covenants for the use as permanent affordable housing; and
WHEREAS, on February 4, 2025, by Council Resolution 2025-56, Council authorized staff to submit a Homekey+ Program application with an estimated total project cost of $22,896,000 approved a Memorandum of Understanding with El Capitan Homekey LP; and
WHEREAS, contingently committed the allocation of a City Community Development Block Grant loan (CDBG) to not to exceed $3,007,163, a Stanislaus County Community Services Agency (CSA) allocation of $922,837 in Homeless Housing, Assistance, and Prevention (HHAP) funds, and a Behavioral Health and Recovery Services (BHRS) commitment of $500,000 to #21..
- 949 -
05/12/2026/CED/Estrada/Item X 2 2026-
support the development of the El Capitan Homekey+ affordable housing project; and
WHEREAS, on September 19, 2025, the California Department of Housing and Community Development (HCD) issued written notice to the City confirming that the El Capitan Project was awarded funding in the total amount of $18,689,375; and
WHEREAS, Homekey+ funds must be used as described in the application to provide housing for individuals and families experiencing homelessness or who are at risk of homelessness and meet program criteria; and
WHEREAS, the funding will be available upon the execution of the California Department of Housing and Community Development (HCD) Standard Agreement; and
WHEREAS, the Community Development Block Grant (CDBG)
loan in an amount is not to exceed $3,007,163 at 3% interest for a term of 55 years, with interest beginning to accrue upon issuance of the Certificate of Occupancy and repaid annually through residual receipts.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a loan agreement with El Capitan Homekey LP for a total not to exceed of $3,007,163 and $350,000 in activity delivery, and authorizing the City Manager or his designee to negotiate and execute an agreement with El Capitan Homekey LP for the development of 1121 Needham Street.
#21..
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05/12/2026/CED/Estrada/Item X 3 2026-
BE IT FURTHER RESOLVED that the City Manager or his
designee, is hereby authorized to negotiate and execute an agreement with El Capitan Homekey LP to carry out the purpose and intent of this resolution. #21..
- 951 -
05/12/2026/CED/Estrada/Item X 4 2026-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of May, 2026, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _________________________
DIANE NAYARES-PEREZ,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
#21..
- 952 -
05/12/2026/CED/Estrada/Item X 1 2026-
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION APPROVING AN AGREEMENT WITH STANISLAUS COUNTY
COMMUNITY SERVICES AGENCY (CSA) FOR THE ACCEPTANCE OF
HOMELESS HOUSING ASSISTANCE AND PREVENTION PROGRAM (HHAP) FUNDING IN THE AMOUNT OF $922,837 AND TO ISSUE A GRANT THE AMOUNT OF $922,837 TO EL CAPITAN HOMEKEY LP AND AUTHORIZING
THE CITY MANAGER OR HIS DESIGNEE TO NEGOTIATE AND EXECUTE
AN AGREEMENT WITH EL CAPITAN HOMEKEY LP FOR THE
DEVELOPMENT OF THE 1121 NEEDHAM STREET
WHEREAS, the Homekey+ program is intended to support the development of Permanent Supportive Housing for veterans and other individuals with mental health and/or substance use disorder challenges who are at-risk of or experiencing homelessness; and
WHEREAS, through the Homekey+, local entities in partnership with a co-applicant may acquire and rehabilitate existing sites (e.g. hotels/motels, apartments), commercial properties, master lease, undergo new construction, and purchase of affordability covenants for the use as permanent affordable housing; and
WHEREAS, on February 4, 2025, by Council Resolution 2025-56, Council authorized staff to submit a Homekey+ Program application with an estimated total project cost of $22,896,000 approved a Memorandum of Understanding with El Capitan Homekey LP; and
WHEREAS, contingently committed the allocation of a City Community Development Block Grant loan (CDBG) to not to exceed $3,007,163, a Stanislaus County Community Services Agency (CSA) allocation of $922,837 in Homeless Housing, Assistance, and Prevention (HHAP) funds, and a #21..
- 953 -
05/12/2026/CED/Estrada/Item X 2 2026-
Behavioral Health and Recovery Services (BHRS) commitment of $500,000 to support the development of the El Capitan Homekey+ affordable housing project; and
WHEREAS, on September 19, 2025, the California Department of Housing and Community Development (HCD) issued written notice to the City confirming that the El Capitan Project was awarded funding in the total amount of $18,689,375; and
WHEREAS, Homekey+ funds must be used as described in the application to provide housing for individuals and families experiencing homelessness or who are at risk of homelessness and meet program criteria, and
WHEREAS, the funding will be available upon the execution of the California Department of Housing and Community Development (HCD) Standard Agreement; and
WHEREAS, on January 16, 2025, the Stanislaus Community
System of Care (CSOC) committed an allocation of Homeless Housing Assistance and Prevention Program (HHAP), for the award amount of $922,837 in the form of a grant to be managed by the City for this project.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves an agreement with Stanislaus County Community Services Agency (CSA) for the acceptance of Homeless Housing Assistance and Prevention Program (HHAP) funding in the amount of $922,837. #21..
- 954 -
05/12/2026/CED/Estrada/Item X 3 2026-
BE IT FURTHER RESOLVED, by the Council of the City of
Modesto that it approves the issuance of a grant in the amount of $922,837 to El Capitan Homekey LP to carry out the purpose and intent of this resolution for the development of 1121 Needham Street.
BE IT FURTHER RESOLVED that the City Manager or his
designee, is hereby authorized to negotiate and execute agreements with El Capitan Homekey LP and Stanislaus County to carry out the purpose and intent of this resolution.
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of May, 2026, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _________________________
DIANE NAYARES-PEREZ,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
#21..
- 955 -
05/12/2026/CED/Estrada/Item X 1 2026-
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION APPROVING AN AGREEMENT WITH STANISLAUS COUNTY
BEHAVIORAL HEALTH AND RECOVERY SERVICES (BHRS) FOR THE
ACCEPTANCE OF FUNDING IN THE AMOUNT OF $500,000 AND TO ISSUE A GRANT THE AMOUNT OF $500,000 TO EL CAPITAN HOMEKEY LP AND
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO NEGOTIATE
AND EXECUTE AN AGREEMENT WITH EL CAPITAN HOMEKEY LP FOR THE DEVELOPMENT OF THE 1121 NEEDHAM STREET
WHEREAS, the Homekey+ program is intended to support the development of Permanent Supportive Housing for veterans and other individuals with mental health and/or substance use disorder challenges who are at-risk of or experiencing homelessness; and
WHEREAS, through the Homekey+, local entities in partnership with a co-applicant may acquire and rehabilitate existing sites (e.g. hotels/motels, apartments), commercial properties, master lease, undergo new construction, and purchase of affordability covenants for the use as permanent affordable housing; and
WHEREAS, on February 4, 2025, by Council Resolution 2025-56, Council authorized staff to submit a Homekey+ Program application with an estimated total project cost of $22,896,000 approved a Memorandum of Understanding with El Capitan Homekey LP; and
WHEREAS, contingently committed the allocation of a City Community Development Block Grant loan (CDBG) to not to exceed $3,007,163, a Stanislaus County Community Services Agency (CSA) allocation of $922,837 in Homeless Housing, Assistance, and Prevention (HHAP) funds, and a Behavioral Health and Recovery Services (BHRS) commitment of $500,000 to #21..
- 956 -
05/12/2026/CED/Estrada/Item X 2 2026-
support the development of the El Capitan Homekey+ affordable housing project; and
WHEREAS, on September 19, 2025, the California Department of Housing and Community Development (HCD) issued written notice to the City confirming that the El Capitan Project was awarded funding in the total amount of $18,689,375; and
WHEREAS, Homekey+ funds must be used as described in the application to provide housing for individuals and families experiencing homelessness or who are at risk of homelessness and meet program criteria; and
WHEREAS, the funding will be available upon the execution of the California Department of Housing and Community Development (HCD) Standard Agreement; and
WHEREAS, on January 16, 2025, Stanislaus County Behavioral Health and Recovery Services (BHRS) committed an allocation of funding for the award amount of $500,000 in the form of a grant to be managed by the City for this project.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves an agreement with Stanislaus County Behavioral Health and Recovery Services (BHRS) for the acceptance of funding in the amount of $500,000.
BE IT FURTHER RESOLVED by the Council of the City of Modesto that it approves the issuance of a grant in the amount of $500,000 to El Capitan #21..
- 957 -
05/12/2026/CED/Estrada/Item X 3 2026-
Homekey LP to carry out the purpose and intent of this resolution for the development of 1121 Needham Street.
BE IT FURTHER RESOLVED that the City Manager or his
designee, is hereby authorized to negotiate and execute agreements with El Capitan Homekey LP and Stanislaus County to carry out the purpose and intent of this resolution.
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of May, 2026, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _________________________
DIANE NAYARES-PEREZ,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
#21..
- 958 -
05/12/2026/CED/Estrada/Item X 1 2026-
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION AMENDING THE FISCAL YEAR 2025-26 ANNUAL
OPERATING AND NON-CAPITAL PROJECT FUND BUDGETS TO
ESTABLISH THE REVENUE, EXPENDITURES, AND TRANSFERS FOR
PROJECT #101644, FUND 1346 IN THE AMOUNT OF $23,119,375 TO
APPROPRIATE THE COMMUNITY DEVELOPMENT BLOCK GRANT,
HOMELESS HOUSING ASSISTANCE AND PREVENTION PROGRAM
(HHAP), AND BEHAVIORAL HEALTH AND RECOVERY SERVICES (BHRS) FUNDS FOR THE DEVELOPMENT OF THE 1121 NEEDHAM STREET, AND
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO TAKE THE
NECESSARY STEPS TO IMPLEMENT THE PROVISIONS OF THIS
RESOLUTION
WHEREAS, on February 4, 2025, by Council Resolution 2025-56, Council authorized staff to submit a Homekey+ Program application with an estimated total project cost of $22,896,000 and approved a Memorandum of Understanding with El Capitan Homekey LP; and
WHEREAS, on September 19, 2025, the California Department of Housing and Community Development (HCD) issued written notice to the City confirming that the El Capitan Project was awarded funding in the total amount of $18,689,375 of this amount, an operational allocation not to exceed $4,417,216 is included; and
WHEREAS, the fiscal year 2025-2026 Multi-Year budget must be amended to increase the budget of the 1121 Needham Street Project (101644) to total $23,119,375 in project expenses and $350,000 in activity delivery costs, to budget the revenues and expenses in the Homekey+, CDBG, HHAP, and BHRS programs and budget any necessary transfers; and
WHEREAS, the project is to be allocated Homekey+ funds in an amount not to exceed $18,689,375; and
#21..
- 959 -
05/12/2026/CED/Estrada/Item X 2 2026-
WHEREAS, the project is to be allocated a CDBG funded loan in an amount not to exceed $3,007,163, $350,000 in staff activity delivery; and WHEREAS, the project is to be allocated Stanislaus County HHAP funds in an amount not to exceed $922,837; and
WHEREAS, the project is to be allocated Stanislaus County BHRS funds in an amount not to exceed $500,000.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby amends the fiscal year 2025-2026 multi-year fund budget to increase the budget to $23,119,375 and $350,000 in activity delivery for the 1121 Needham Street project (101644).
BE IT FURTHER RESOLVED by the Council of the City of Modesto that it authorizes the City Manager or his designee to take the necessary steps to implement the provisions of this resolution.
#21..
- 960 -
05/12/2026/CED/Estrada/Item X 3 2026-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of May, 2026, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _________________________
DIANE NAYARES-PEREZ,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
#21..
- 961 -
24-HK+-18623
City of Modesto, El Capitan Homekey LP, and UP Holdings, LLC Upon HCD Approval
$18,689,375.00
STATE OF CALIFORNIA - DEPARTMENT OF GENERAL
SERVICES
STANDARD AGREEMENT
STD 213 (Rev. 04/2020)
AGREEMENT NUMBER PURCHASING AUTHORITY NUMBER (if applicable)
1. This Agreement is entered into between the Contracting Agency and the Contractor named below:
CONTRACTING AGENCY NAME
Department of Housing and Community Development
CONTRACTOR'S NAME
2. The term of this Agreement is:
START DATE
Fifteen (15) Years from the Effective Date
THROUGH END DATE
3. The maximum amount of this Agreement is:
4. The parties agree to comply with the terms and conditions of the following exhibits, which are by this reference made a part of the Agreement.
EXHIBITS
Exhibit A Authority, Purpose and Scope of Work
Exhibit B Budget Detail and Payment Provisions
Exhibit C* State of California General Terms and Conditions Exhibit D Homekey+ General Terms and Conditions
Exhibit E Project-Specific Provisions and Special Terms and Conditions 14 TITLE PAGES
4 16
17 GTC - 02/2025
TOTAL NUMBER OF PAGES ATTACHED 51
These documents can be viewed at https://www.dgs.ca.gov/OLS/Resources Items shown with an asterisk (*), are hereby incorporated by reference and made part of this agreement as if attached hereto.
CONTRACTOR NAME (if other than an individual, state whether a corporation, partnership,etc.) IN WITNESS WHEREOF, THIS AGREEMENT HAS BEEN EXECUTED BY THE PARTIES HERETO.
CONTRACTOR
CONTRACTOR BUSINESS ADDRESS
See Attached
See Attached
CITY STATE ZIP
See Attached See Attached See Attached
PRINTED NAME OF PERSON SIGNING TITLE
See Attached
DATE SIGNED
See Attached
CONTRACTOR AUTHORIZED SIGNATURE
See Attached
STATE OF CALIFORNIA
CONTRACTING AGENCY NAME
Department of Housing and Community Development
CONTRACTING AGENCY ADDRESS CITY STATE ZIP
651 Bannon Street Suite 400 Sacramento CA 95811
PRINTED NAME OF PERSON SIGNING TITLE
Contract Services Section Manager
CONTRACTING AGENCY AUTHORIZED SIGNATURE DATE SIGNED
California Department of General Services Approval (or exemption, if applicable) Exempt per; SCM Vol. 1 4.04.A.3 (DGS memo dated 06/12/1981) See Attached
SCO ID:
#21..
- 962 -
STATE OF CALIFORNIA
STANDARD AGREEMENT
STD 213 (Rev. 04/2020) 24-HK+-18623
CONTRACTOR Page 2 of 4
City of Modesto
El Capitan Homekey LP
UP Holdings, LLC
City of Modesto
a California charter city
City Manager
Joseph P Lopez
By: ______________________________ Date: ___________________ Address:
P.O. Box 642
Modesto, CA 95353
#21..
- 963 -
STATE OF CALIFORNIA
STANDARD AGREEMENT
STD 213 (Rev. 04/2020) 24-HK+-18623
CONTRACTOR Page 3 of 4
City of Modesto
El Capitan Homekey LP
UP Holdings, LLC
El Capitan Homekey LP
a California limited partnership
Its:
By: HOM El Capitan Motel LLC
a Delaware Limited Liability
company Managing General Partner
Its: Manager
By: Housing on Merit
a California nonprofit public benefit corporation
Chief Executive Officer
Jaymie Beckett
By: ______________________________ Date: ___________________ Its: Co-General Partner
By: UP El Capitan Homekey, LLC
Its:
By: UP Holdings California, LLC
an Illinois Limited Liability Company, dba UP Holdings
California, LLC
Manager
Cullen J. Davis
By: ______________________________ Date: ___________________ Its:
By: RHCB El Capitan, LLC
a California Limited Liability Company
Co-General Partner
Its: Sole Member
By: RHCB Development LP
Its: General Partner
By: WRBH LLC
a California limited liability company
#21..
- 964 -
STATE OF CALIFORNIA
STANDARD AGREEMENT
STD 213 (Rev. 04/2020) 24-HK+-18623
CONTRACTOR Page 4 of 4
City of Modesto
El Capitan Homekey LP
UP Holdings, LLC
Manager
Wayne Rutledge
By: ______________________________ Date: ___________________ Address:
6083 N Figarden Dr #656
Fresno, CA 93722
UP Holdings, LLC
an Illinois limited liability company dba UP Holdings California, LLC Manager
Cullen Davis
By: ______________________________ Date: ___________________ Address:
6083 N Figarden Drive #656
Fresno, CA 93722
Prep Date: 10/10/2025
#21..
- 965 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
AUTHORITY, PURPOSE AND SCOPE OF WORK
1. Authority
California Assembly Bill No. 140 (Chapter 111, Statutes of 2021) (“AB 140”) and California Assembly Bill No. 531 (Chapter 789, Statutes of 2023) added section 50675.1.3 and 50675.1.5 to the Multifamily Housing Program (“MHP”) (Chapter 6.7 (commencing with Section 50675) of Part 2 of Division 31 of the Health and Safety Code). Health and Safety Code section 50675.1.3 and 50675.1.5 provide the statutory basis for the Homekey+ Program (“Homekey+” or “Program”). Health and Safety Code section 50675.1, subdivision (d) authorizes the Department of Housing and Community Development (“Department” or “HCD”) to administer MHP.
The Department issued a Homekey+ Program Notice of Funding Availability on November 26, 2024, which was subsequently amended January 31, 2025 and August 7, 2025. (the “NOFA”). The NOFA incorporates by reference the MHP, as well as the Multifamily Housing Program Final Guidelines, dated May 18, 2023 (“MHP Guidelines”), both as amended and in effect from time to time. The NOFA, further, incorporates by reference, the Uniform Multifamily Regulations (UMRs) (Cal. Code Regs., tit. 25, § 8300 et seq.), effective November 15, 2017, and as subsequently amended, except to the extent that any UMR provision would be inconsistent with the provisions of the NOFA.
Homekey+ grant funds are derived primarily from Proposition 1 bond funds established by the Behavioral Health Infrastructure Bond Act (BHIBA) (AB 531, Chapter 789, Statutes of 2023). Homekey+ funds are also derived from Assembly Bill 129 (Chapter 40, Statutes 2023) and Assembly Bill 166 (Chapter 48, Statutes 2024) or Round 5 and 6, respectively, of the Homeless Housing Assistance Prevention (HHAP). In accordance with HSC Section 50232, subdivision (h), the administration of HHAP 5 funds is not subject to the rulemaking provisions of the Administrative Procedure Act (APA) ((Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code)). In accordance with HSC Section 50239, subdivision (h), the administration of HHAP 6 funds is not subject to the rulemaking provisions of the APA.
This STD 213, Standard Agreement (“Agreement”) is entered under the authority and in furtherance of the Program. This Agreement is the result of an Application by the Grantee, as defined below, for funding under the Program (the “Grant”). As such, this Agreement shall be executed by the Grantee. Where the Grantee comprises a Public Entity or Tribal Entity, as defined below, and one or more additional entities, all entities shall execute the Agreement.
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City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
This Agreement hereby incorporates by reference the Application, as well as the project report prepared by the Department in reliance on the representations and descriptions included in that Application. This Agreement is governed by the following (collectively, the “Program Requirements”), and each of the following, as amended and in effect from time to time, is incorporated hereto as if set forth in full herein:
A. AB 140;
B. AB 531
C. AB 129 and AB 166 (HHAP Homekey+ Supplemental funds) D. The above-referenced MHP statutory scheme;
E. The NOFA;
F. The MHP Guidelines;
G. The UMRs;
H. The award letter issued by the Department to the Grantee; and I. All other applicable laws.
2. Purpose
The Homekey+ Program is intended to provide housing for individuals and families who have a Behavioral Health Challenge as defined in the California Welfare and Institutions Code Section 5965.02 to include but not be limited to a serious mental illness, as described in subdivision (c) or (d) of Welfare and Institutions Code (WIC) Section 14184.402, or a substance use disorder, as described in WIC Section 5891.5.
Enrollment in Medi-Cal or in any other health plan shall not be a condition for accessing housing or continuing to be housed. The Homekey+ program must serve those with a Behavioral Health Challenge and who are homeless or who are at risk of homelessness, as defined in Part 578.3 of Title 24 of the Code of Federal Regulations.
Funds in the NOFA allocated to Veterans units must also serve a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable and who is experiencing or at risk of homelessness as defined in Title 24 CFR Part 578.3
(“Target Population”).
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- 967 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
Grantee applied to the Department for the Grant to conduct one or more of the activities outlined in Paragraph 4 below. By entering into this Agreement and thereby accepting the award of Program Grant funds, the Grantee agrees to comply with the Program Requirements and the terms and conditions of this Agreement.
3. Definitions
Any capitalized terms that are not defined below shall have the definitions set forth in the NOFA, the MHP statutes, and the MHP Guidelines. In the event of any conflict, the definitions in this Agreement and the NOFA are controlling.
A. “Affordability Covenant” means the legally binding 55-year instrument which (a) is recorded in first position against Project real property for the benefit of the state, regional, local, or Tribal Grantee; (b) imposes use, operation, occupancy, and affordability restrictions on the real property and improvements; and (c) duly names HCD as a third-party beneficiary with the right and privilege, but not the obligation, of enforcement thereof, (d) incorporates the Homekey+ Program Requirements by reference, and (e) is otherwise in form and substance acceptable to HCD. Upon its execution, the Affordability Covenant shall be binding, effective, and enforceable against all successors, transferees, and assignees, in accordance with Section 208 of the NOFA, after a certificate of occupancy or its equivalent has been issued for the Project, or if no such certificate is issued, from the date of initial occupancy of the Project.
Affordability Covenants on Tribal trust land are addressed separately under Section 208 of the NOFA.
B. “Application” means the application for Grant funds that was submitted in response to the Homekey+ NOFA.
C. "Area Median Income" or "AMI" means the most recent applicable county area median family income published by the California Tax Credit Allocation Committee (TCAC) or HCD.
D. “Assisted Unit” means a Homekey+ funded residential dwelling unit in Permanent Supportive Housing (PSH) that is subject to rent, income, occupancy, and other restrictions in accordance with t Homekey + Program Requirements.
See also “Youth Assisted Unit.”
E. "At Risk of Homelessness" has the same meaning as defined in Title 24 Code of Federal Regulations Part 578.3.
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- 968 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
F. "Award" means the portion of program funds available for a Grantee to expend toward the Homekey+ program Eligible Uses.
G. “Behavioral Health Challenge” has the same meaning as defined in NOFA Article VII. Definitions Section (vii.).
H. “Capital Award” means the portion of the Award available for a Grantee to expend toward Project acquisition, any needed Rehabilitation, new construction, master leasing, and affordability covenant costs.
I. “Case Manager” is a social worker or other qualified person who has or is supervised by a person with a relevant master’s degree. At its sole discretion, the Department may approve Supportive Service plans where Case Managers cannot be supervised by a person with a master’s degree. A Case Manager facilitates individualized service planning, and assessment, coordination, monitoring, referral, and advocacy of services to meet tenants’ Supportive Services needs, including, but not limited to, access to medical and mental health services, substance use disorder treatment and services, vocational training, employment, home and community-based services and crisis management and interventions. Resident service coordinators are not Case Managers. For Homekey+ tenants who are also HUD-VASH program participants, the Case Manager for services will be the applicable U.S. Department of Veterans Affairs (VA) Case Manager (or third-party provider selected by the VA), in accordance with the HUD-VASH Program.
J. “Chronically Homeless” means a person who is chronically homeless, as defined in Title 24 Code of Federal Regulations Part 578.3.
K. "City" means a City or City and County that is legally incorporated to provide local government services to its population. A City can be organized either under the general laws of this state or under a charter adopted by the local voters.
L. “Co-Applicant” means the nonprofit corporation, for-profit corporation, limited liability company (LLC), and/or limited partnership (LP) that is jointly applying for Homekey+ funds with a state, regional, or Local Public Entity, or with a Tribal Entity.
M. “Conditional Award Letter” or “Conditional Award Commitment and Acceptance of Terms and Conditions letter” means a letter specifying the portion of program funds available for a Grantee to expend toward eligible #21..
- 969 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
program uses once the Grantee has acknowledged and fulfilled the terms and conditions.
N. "Continuum of Care" means the same as defined by Title 24 CFR Part 578.3.
O. “Coordinated Entry System” means a centralized or coordinated process developed pursuant to Section 578.7 of Title 24 of the Code of Federal Regulations, as that section read on January 10, 2019, designed to coordinate homelessness program tenant intake, assessment, and provision of referrals. To satisfy this subdivision, a centralized or coordinated assessment system shall cover the geographic area, be easily accessed by individuals and families seeking housing or services, be well advertised, and include a comprehensive and standardized assessment tool.
P. “Date of Award” means the date of the Conditional Award Commitment and Acceptance of Terms and Conditions letter issued from the Department to the Grantee.
Q. “Designated Payee” means the Co-Grantee that will serve as the payee of the Program Grant funds. If applicable, the Designated Payee is identified at Exhibit E of this Agreement.
R. “Eligible Applicant” means a City; county; a City and county; any other state, regional, and Local Public Entity, including a council of government, metropolitan planning organization, and regional transportation planning agency designated in Section 29532.1 of the Government Code; or a Tribal Entity(ies) as defined in this NOFA. For purposes of this definition, a “Local Public Entity” is further defined in accordance with HSC section 50079. As allowed or required by context, “Applicant” shall be interpreted to include any of the foregoing entities, as well as that entity’s Co- Applicant. Upon receiving an Award of Homekey+ funds, the Eligible Applicant and any Co-Applicant(s) will, both individually and collectively, be referred to as the “Grantee” for purposes of the Homekey+ NOFA.
Please see NOFA Section 200 for specific eligible applicant requirements for Homekey+ HHAP Supplemental Funds.
S. “Eligible Uses” means the activities that may be funded by the Homekey+ Program Grant. Those activities are listed at Paragraph 4 below of this Agreement, and at Health and Safety Code section 50675.1.3, subdivision (a). #21..
- 970 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
T. “Expenditure Deadline for Capital Funds” means the date by which the capital Award must be fully expended, as noted in Exhibit E of this Agreement.
U. “Expenditure Deadline for Operating Funds” means the date by which the operating Award must be fully expended, as noted in Exhibit E of this agreement.
V. “Foster Youth” means a child or nonminor dependent, as defined by Section 475 of Title IV-E of the Social Security Act (42 U.S.C. Sec. 675(8)) and subdivision (v) of Section 11400 of the Welfare and Institutions Code, who has been removed from the custody of their parent, legal guardian, or Indian custodian pursuant to Section 361 or 726 of the Welfare and Institutions Code, and who has been ordered into any placement described in paragraphs (2) to (9), inclusive, of subdivision (e) of Section 361.2 of, or paragraph (4) of subdivision (a) of Section 727 of, the Welfare and Institutions Code.
W. “Grantee” means the Eligible Applicant (and, if applicable, the Co- Applicant) that has been awarded funds under Homekey+, and that will be held responsible for compliance with and performance of all Homekey+ Program Requirements.
The Grantee may comprise one or more entities, so long as the Grantee structure includes an “Eligible Applicant,” as that term is defined in this NOFA. All such entities shall, in their individual and collective capacity as the “Grantee,” be bound by the Homekey+ Standard Agreement and each and every one of the Homekey+ program terms, conditions, and requirements. On the STD 213 portion of this Agreement, the Grantee is identified as the Contractor.
X. “Homekey+ Program Requirements (or “Program Requirements”)” means the following, all as amended and in effect from time to time:
1) the Homekey+ Program Notice of Funding Availability. 2) Chapter 6.7 (commencing with Section 50675) of Part 2 of Division 31 of the Health and Safety Code.
3) the Grantee’s application for Homekey+ funding.
4) the Project report prepared by HCD in reliance on the representations and descriptions included in the Grantee’s application for Homekey+ funding. 5) the Conditional Award letter issued by HCD to the Grantee. #21..
- 971 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
6) the relevant STD 213, Standard Agreement for the Homekey+ funding; and,
7) all other applicable laws.
Y. “Homeless” has the same meaning as defined in Title 24 CFR Part 578.3.
Z. “Homeless Youth” means a child, a youth, or a current or former foster youth through the age of 25 who qualifies as “Homeless” under any of the relevant definitions set forth or identified in Title 24 Code of Federal Regulations Part 578.3.
AA. "Housing First" has the same meaning as in Welfare and Institutions Code section 8255, including all the core components listed therein.
BB. “Lead Service Provider” or “LSP” is the organization that has overall responsibility for the provisions of Supportive Services and implementation of the Supportive Services plan in the Project. The LSP may directly provide comprehensive case management services or contract with other agencies that provide services. For HUD-VASH tenants, the LSP will enable the applicable Veterans Affairs Case Manager to administer services in accordance with the HUD-VA Supportive Housing (VASH) Program.
CC. “Local Public Entity” is defined at Health and Safety Code section 50079, and means any county, city, city and county, the duly constituted governing body of an Indian reservation or rancheria, tribally designated housing entity as defined in Section 4103 of Title 25 of the United States Code and Section 50104.6.5, redevelopment agency organized pursuant to Part 1 (commencing with Section 33000) of Division 24, or housing authority organized pursuant to Part 2 (commencing with Section 34200) of Division 24, and also includes any state agency, public district, or other political subdivision of the state, and any instrumentality thereof, that is authorized to engage in or assist in the development or operation of housing for persons and families of low or moderate income. In addition, and in accord with this Health and Safety Code definition, the term “Local Public Entity” also includes two or more local public entities acting jointly.
DD. “Manager’s Unit” is a unit in which the onsite manager of the Project resides. A Manager’s Unit will not be an Assisted Unit. Manager’s Units may be included for Homekey+ funding under the development budget; however, no Manager’s Unit #21..
- 972 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
may be included in funding requests for a Homekey+ operating award.
Manager’s Units shall be restricted to households at or below 60% AMI.
EE. “Operating Award” means the amount awarded by HCD to pay for the recurring expenses of the Project, such as utilities; maintenance; management fees; taxes; licenses; and Supportive Services costs, which may include staffing and service coordination. Operating Expenses do not include debt service or required reserve account deposits.
FF. "Operating Expenses" means the amount approved by HCD that is necessary to pay for the recurring expenses of the Project, such as utilities; maintenance; management fees; taxes; licenses; and Supportive Services costs, which may include staffing and service coordination. Operating Expenses do not include debt service or required reserve account deposits.
GG. “Performance Milestones” means the indicators and metrics of progress and performance that are identified as such at Exhibit E of this Agreement. Grantee’s failure to satisfy any one of the Performance Milestones will constitute a breach of this Agreement and will entitle the Department to exercise all available remedies, including the recapture of disbursed Grant funds and the cancellation of this Agreement.
HH. “Performing Debt” refers to non-government, long-term (or permanent) financing of a Project intended to generate a profit for a private or non-profit lender requiring ongoing mandatory debt service payments.
II. “Permanent Supportive Housing” or “PSH” means housing with no limit on length of stay, that is occupied by the Target Population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community, as defined at California Government Code Section 65582 (g) , except that "Permanent Supportive Housing" shall include associated facilities if used to provide services to housing residents.
JJ. “Positive Youth Development” or “PYD” is an intentional, prosocial approach that engages youth within their communities, schools, organizations, peer groups, and families in a manner that is productive and constructive; recognizes, utilizes, and enhances young people’s strengths; and promotes positive outcomes for young people by providing opportunities, fostering positive #21..
- 973 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
relationships, and furnishing the support needed to build on their leadership strengths.
KK. “Project” means a structure or set of structures with common financing, ownership, and management, which provides Permanent Supportive Housing for the Target Population, and which is subject to an appropriate Affordability Covenant in accordance with Section 208 of the NOFA.
LL. "Rehabilitation" means repairs and improvements to a substandard residential structure necessary to make it meet Rehabilitation standards. As used in this section, “substandard residential structure” has the same meaning as the term “substandard building,” as defined in HSC Section 17920.3. “Rehabilitation” also includes improvements and repairs made to a residential structure acquired for the purpose of preserving its affordability and use by the Target Population.
MM. “Secondary Tenant” means 1) Veterans who are Homeless whose incomes are up to 50% AMI and are receiving income as a result of service-connected disability benefits, or 2) Veterans experiencing homelessness with an income of up to 60% AMI.
NN. “Scope of Work” or “Work” means the work to be performed by the Grantee to accomplish the Program purpose.
OO. “Sponsor” means the legal entity or combination of legal entities with continuing control of the Project. Where a Grantee is or will be organized as a limited partnership, Sponsor includes the general partner or general partners who have effective control over the operation of the partnership, or, if the general partner is controlled by another entity, the controlling entity. Sponsor does not include the seller of the property to be developed as the Project, unless the seller will retain control of the Project for the period of time necessary to ensure Project feasibility as determined by the Department.
PP. “Standard Agreement” means the STD 213, STD 215, all exhibits attached thereby and any and all amendments thereto.
QQ. “Supportive Services” means social, health, educational, income support, employment, and housing stability services and benefits; coordination of community building and educational activities; individualized needs assessment and case management; and individualized assistance with obtaining services and benefits.
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- 974 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
RR. “Target Population” means individuals, or households with an individual, who are experiencing homelessness or who are At Risk of Homelessness as defined under part 578.3 of Title 24 of the Code of Federal Regulations and who have or are suspected of having a Behavioral Health Challenge. These individuals and households must include a person described in Welfare and Institutions Code (WIC) subdivision (c) or (d) of Section 14184.402, or a person with a substance use disorder, as described in Section 5891.5. However, enrollment in Medi-Cal or in any other health plan shall not be a condition for accessing housing or continuing to be housed. For Veteran-serving Projects the Target Population also includes Veterans.
SS. “TCAC” means the California Tax Credit Allocation Committee.
TT. “Tribal Entity(ies)” means an entity that meets any of the following criteria:
1) Meets the definition of Indian tribe under section 4103(13)(B) of title 25 of the United States Code;
2) Meets the definition of Tribally Designated Housing Entity under section 4103(22) of title 25 of the United States Code;
3) Is not a federally recognized tribe, but is either:
a) Listed in the petitioner list of the Office of Federal Acknowledgment (OFA) within the Office of the Assistant Secretary – Indian Affairs of the Department of the Interior pursuant to Part 82.1 of Title 25 of the Code of Federal Regulations; or
b) Is an Indian tribe located in the State of California and identified on the contact list maintained by the Native American Heritage Commission for the purpose of consultation pursuant to Government Code section 65352.3.
UU. “Veteran” means a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable and who is experiencing or at risk of homelessness as defined in Title 24 CFR Part 578.3.
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- 975 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
VV. “Youth Assisted Unit” means an Assisted Unit serving Homeless Youth or Youth at Risk of Homelessness. See also “Assisted Unit.” WW. “Youth at Risk of Homelessness” means a child, a youth, or a current or former foster youth through the age of 25 who qualifies as “at risk of homelessness” or “homeless” under any of the relevant definitions set forth or identified at Part 578.3 of Title 24 of the Code of Federal Regulations.
4. Eligible Uses
Grantee shall apply the Awards to one or more of the following uses. All costs in connection with such Eligible Uses must be incurred on or after March 5, 2024, by the Expenditure Deadline for Capital Funds, and by the Expenditure Deadline for Operating Funds, respectively and as applicable. Grantee’s use of the funds and scope of work (“Scope of Work” or “Work”) are specified at Exhibit E of this Agreement.
A. Acquisition or rehabilitation, or acquisition and rehabilitation, of motels, hotels, hostels, or other sites and assets, including apartments or homes, adult residential facilities, residential care facilities for the elderly, manufactured housing, commercial properties, and other buildings with existing uses that could be converted to Permanent Supportive Housing (PSH).
B. Master leasing of properties for PSH.
C. Conversion of units from nonresidential to residential PSH (i.e. adaptive reuse) D. Conversion of Interim Housing to PSH (as described in NOFA Section 502) E. New construction of dwelling units as described in NOFA Section 201 and 501.
F. Gap financing as defined in NOFA Section 502.
G. The purchase of affordability covenants and restrictions for units.
H. Relocation costs for individuals who are being displaced as a result of the Homekey+ Project.
I. Capitalized operating subsidies for PSH units purchased, converted, or altered with Homekey+ Grant funds provided pursuant to Health and Safety Code section 50675.1.3.
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- 976 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
5. Rent Standards
A. Permanent Supportive Housing. Rent limits for initial occupancy, and for each subsequent occupancy, of an Assisted Unit shall not exceed 30 percent of that Assisted Unit’s designated income-eligibility level with exceptions as noted below for Veteran Units.
B. Veteran Units may also be subject to the Department’s Secondary Tenant policy, which determines that if units cannot be filled with Veterans at or below 30% AMI, Secondary Tenants can be housed. Rents for any redesignated units are determined by income that corresponds to the Secondary Tenant’s household income.
6. Program Deadlines
A. All Program deadlines begin 60 days after the Homekey+ Conditional Award letter date. HCD may, in its sole and absolute discretion, approve an extension of the acquisition, Rehabilitation, construction, and/or occupancy deadlines if the Grantee demonstrates, to HCD’s satisfaction, that the relevant delay is caused by reasonably unforeseeable events, conditions, or circumstances. Construction labor shortages and supply chain issues do not constitute reasonably unforeseeable events, conditions, or circumstances for purposes of an extension request. Extension requests shall be submitted in electronic format on a form provided by HCD.
B. HCD may reimburse eligible costs incurred beginning on March 5, 2024, with the exception of operating costs.
C. Project types in NOFA Section 201 are subject to the dates in the milestones listed in Exhibit E.
7. Performance Milestones
A. Grantee shall complete each of the Performance Milestones set forth at Exhibit E of this Agreement by the date designated for such completion therein (each, a “Milestone Completion Date”). The Performance Milestones shall include, but not be limited to, any applicable Expenditure Deadline for Capital Funds, Expenditure Deadline for Operating Funds, or occupancy deadline. #21..
- 977 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
B. The Department may, in its sole and absolute discretion, approve an extension of the acquisition, rehabilitation, construction, and/or occupancy deadlines if the Grantee demonstrates, to the Department’s satisfaction, that the relevant delay is caused by reasonably unforeseeable events, conditions, or circumstances.
C. In no event will the Department approve an extension request in the absence of Grantee’s demonstration of good cause for said extension, along with Grantee’s reasonable assurances that the extension will not result in Grantee’s failure to meet other Performance Milestones or any Expenditure Deadline under this Agreement. Construction labor shortages and supply chain issues do not constitute reasonably unforeseeable events, conditions, or circumstances for purposes of an extension request.
D. The Department may, in its sole and absolute discretion, grant an extension of the Expenditure Deadline for Operating Funds for a total of up to 15 years from occupancy in accordance with NOFA section 204 (vi).
8. Reporting Requirements
A. Grantee shall submit an annual Homekey+ Program Report and Homekey+ Expenditure Report, and comply with all additional reporting requirements, as set forth and specified at Section 601 of the NOFA, all in accordance with the Milestone Completion Date(s) set forth at Exhibit E of this Agreement.
B. After satisfaction of each Performance Milestone, the Grantee shall promptly report its progress, in writing, to the Department.
C. Upon the Department’s request and as specified, the Grantee shall provide progress reports in connection with the development plan and any updates to the timeline for completion of the Project. The development plan should include the Project’s completion milestones and any updates or substantial changes.
D. In addition, the Grantee shall submit to the Department such periodic reports, updates, and information as deemed necessary by the Department to monitor compliance and/or perform Program evaluation. Any requested data or information shall be submitted in electronic format on a form provided by the Department.
#21..
- 978 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT A
Homekey+ Program
NOFA Date: 11/26/2024; as amended 1/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
9. Department Contract Coordinator
The Department’s Contract Coordinator for this Agreement is the Deputy Director of the Division of State Financial Assistance, or the Deputy Director’s designee. Unless otherwise informed, Grantee shall mail any notice, report, or other communication required under this Agreement by First-Class Mail to the Department Contract Coordinator at the following address or email to [email protected]:
California Department of Housing and Community Development Attention: Homekey+ Program
Multifamily Grant Management Branch
651 Bannon St, Suite 400, 95811
P. O. Box 952050
Sacramento, CA 94252-2050
10. Grantee Contract Coordinator
The Grantee Contract Coordinator for this Agreement may coordinate with the Multifamily Grant Management Branch Manager for the Homekey+ Program. Unless otherwise informed, the Department shall mail any notice, report, or other communication required under this Agreement by First-Class Mail, or through a commercial courier, to the Grantee Contract Coordinator at the address specified at Exhibit E of this Agreement.
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- 979 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT B
Homekey+ Program (Homekey+)
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
BUDGET DETAIL AND PAYMENT PROVISIONS
1. Budget Detail
The Award set forth in this Agreement has been made available to expend toward the Homekey+ Eligible Uses per the terms set forth herein. The Department has approved the additional funding commitments leveraged against the Homekey site as named in Exhibit E, Budget Detail. Any new sources encumbered against the project site after the execution of this agreement must receive prior written approval by HCD and must, upon recordation, subordinate to the Homekey+ use restriction. Encumbrance of unapproved sources against the Homekey+ site and securing of any sources in a lien position superseding Homekey+ will constitute a breach of the Standard Agreement.
2. Conditions of Disbursement
For all project types, except New Construction Cost Containment (Section 501 of the NOFA) the Department will disburse the amount corresponding to the Grantee’s request for funds after this Agreement has been fully executed and after the Department receives the Grantee’s request for funds, with all required supporting documents appended thereto.
For New Construction Cost Containment projects, the Department will disburse up to 80% of the Capital Award after Grantee has cleared all conditions of disbursement. The remaining 20% of the Award will be disbursed upon submission of the temporary certificate of occupancy (TCO).
The Grantee must open escrow prior to requesting Capital Award funds from the Department. The Department will disburse remaining award funds, including Operating Award funds, via check. The Grantee may only request Operating Award funds, if applicable, after providing confirmation that construction and/or Rehabilitation on the Project is completed, and the Project is ready to occupy. HCD reserves the right to disburse funds prior to construction completion if the Grantee sufficiently demonstrates need for Homekey+ operational funds prior to construction completion.
The Grantee shall append the following supporting documents to the request for funds, all in form and substance acceptable to the Department:
A. Wire Instructions, including the name and address of the escrow company, the name of the escrow officer, and the escrow number in a form provided by the Department.
#21..
- 980 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT B
Homekey+ Program (Homekey+)
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
B. An Affordability Covenant must be submitted to the Department for review prior to the close of escrow and approved by the Department, in its sole and reasonable discretion, for recordation at the close of escrow; C. Payee Data Record (STD 204) or Government Agency Taxpayer ID Form, as applicable;
D. An authorizing resolution or set of authorizing resolutions that, in the Department’s reasonable determination, materially comports with the Program Requirements (if the Grantee has not already submitted same); E. Documentary evidence of any eligible costs incurred on or after March 5, 2024 and before the execution of this Agreement;
F. Certification of compliance with California’s prevailing wage law, as well as all applicable federal prevailing wage law; or for Tribal Grantees, a Tribal Wage Determination; the Grantee cannot request funds for rehabilitation or construction until they have provided a certification of compliance with prevailing wage laws signed by the Grantee and their selected general contractor, as detailed in Section 509 of the NOFA;
G. A copy of the Department-approved relocation plan for the Project, or a copy of a Department-issued Certification Regarding Non-Application of Relocation Benefits and Indemnification Agreement which has been duly executed by the Grantee and approved by the Department;
H. Evidence of the insurance coverages required under the Program NOFA Section 606 and/or a written acknowledgment of self-insured status; I. A current title report (dated within 15 days of the request for funds); or for tribal trust land, a title status report (“TSR”) or an attorney’s opinion regarding chain of title and current title status; if there are any items to be cleared, paid off, or subordinated, the Department will require that all findings be resolved in escrow; J. Any forms, certifications, environmental clearances, NEPA, or documentation required pursuant to Paragraph 1. F – Additional Conditions Precedent to Disbursement listed in Exhibit E of this Agreement; and K. Any other forms, certifications, or documentation deemed necessary by the Department prior to disbursement of Grant funds.
#21..
- 981 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT B
Homekey+ Program (Homekey+)
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
3. Performance
A. After disbursement of the funds, the Grantee shall meet each Performance Milestone set forth at Exhibit E by the relevant Milestone Completion Date. After satisfaction of each Performance Milestone, the Grantee shall promptly report its progress, in writing, to the Department. Grantee may apply to the Department for an extension of a Milestone Completion Date as allowed by the NOFA and this Agreement.
B. FAILURE TO SATISFY ANY ONE OF THE PERFORMANCE MILESTONES
WILL CONSTITUTE A BREACH OF THIS AGREEMENT AND ENTITLES THE
DEPARTMENT TO MANDATE THE GRANTEE TO RETURN TO THE
DEPARTMENT ANY FUNDS DISBURSED; IN ANY SUCH INSTANCE, THE
DEPARTMENT MAY ALSO CANCEL THIS AGREEMENT WITHOUT OWING ANY DAMAGES OR OTHER PAYMENT TO GRANTEE.
4. Fiscal Administration
A. All Capital Award funds must be wired to an escrow company licensed to do business in the State of California and in good standing.
B. Any Capital Award funds that have not been expended by the Expenditure Deadline for Capital Funds must be returned to the Department with accrued interest. Any Operating Award funds that have not been expended by the Expenditure Deadline for Operating Funds must be returned to the Department with accrued interest. Checks shall be made payable to the Department of Housing and Community Development and shall be mailed to the Department at the address below, no later than thirty (30) calendar days after the applicable Expenditure Deadline.
Department of Housing and Community Development
Accounting Division
651 Bannon Street, Suite 400
Sacramento, California 95811
#21..
- 982 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT B
Homekey+ Program (Homekey+)
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
5. Supplantation of Funds
Grantee may not use Homekey+ funding to supplant performing debt or existing funds that have already been funded or awarded through other permanent sources, including HCD sources. Expenses that have been or will be reimbursed under any permanent public program funds are not eligible uses of Homekey+ funding, with the exception of any Homekey+ funds Awarded for reimbursement dating back to March 5, 2024. #21..
- 983 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
HOMEKEY+ GENERAL TERMS AND CONDITIONS
1. Effective Date, Term of Agreement, Timing, and Deadlines A. This Agreement, when fully executed by the Department and the Grantee, is effective upon the date of the Department representative’s signature on the STD 213, Standard Agreement (such date, the “Effective Date").
B. This Agreement shall terminate fifteen (15) years from the Effective Date, as stated in Section 2 of the STD 213, Standard Agreement (such date, the “Expiration Date”).
C. Grantee will receive the disbursement of Program funds after satisfying all conditions precedent to such disbursement, as set forth under Paragraph 2 of Exhibit B and, as necessary and applicable, under Section 4 – Additional Conditions Precedent to Disbursement of Exhibit E.
D. Any expenses incurred prior to March 5, 2024, after the Expenditure Deadline for Capital Funds, or after the Expenditure Deadline for Operating Funds, respectively and as applicable, are not eligible for payment under the Program, unless an alternate arrangement is legally permissible and has been approved by the Department in advance and in writing.
E. Grant funds that have not been expended by the applicable Expenditure Deadlines shall revert to the Department in the absence of an alternate arrangement that has been approved by the Department in advance and in writing.
2. Termination for Cause
The Department may terminate this Agreement for cause at any time by giving at least fourteen (14) calendar days’ advance written notice to the Grantee. Upon such termination, Grantee shall return any unexpended funds to the Department within thirty (30) calendar days of the date on the Department’s written notice of termination, unless the Department has approved an alternate arrangement in advance and in writing, as provided below. Such termination will not limit any other remedies that may be available to the Department under this Agreement, at law, or in equity. Cause shall consist of Grantee’s breach of, or failure to satisfy, any of the terms or conditions of this Agreement. Cause includes but is not limited to the following:
#21..
- 984 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
A. Grantee’s failure to satisfy the Performance Milestones, conditions precedent to disbursement, or to expend the Award, as specified.
B. Grantee’s failure to timely satisfy each or any of the conditions set forth in these Homekey + General Terms and Conditions, the Project-Specific Provisions and Special Terms and Conditions set forth at Exhibit E of this Agreement (including any one of the Performance Milestones), or the award letter.
C. Grantee’s violation of any of the Program Requirements.
D. The Department’s determination of the following:
1) Any material fact or representation, made or furnished to the Department by the Grantee in connection with the Application or the award letter, shall have been untrue or misleading at the time that such fact or representation was made known to the Department, or subsequently becomes untrue or misleading; or
2) Grantee has concealed any material fact from the Department related to the Application or the Project.
E. The Department’s determination that the objectives and requirements of the Homekey + Program cannot be met in accordance with applicable timeframes, as memorialized by this Agreement.
In the event of this or any other breach, violation, or default by the Grantee, the Department may give written notice to the Grantee to cure the breach, violation, or default. If the breach, violation, or default is not cured to the Department’s satisfaction within a reasonable time, as determined by the Department in its sole and absolute discretion, then the Department may declare a default under this Agreement and seek any and all remedies that are available under this Agreement, at law, or in equity.
3. Cancellation
A. It is mutually understood between the parties that this Agreement may have been written for the mutual benefit of both parties before ascertaining the availability of funds appropriated by the California Legislature to avoid program and fiscal delays that would occur if this Agreement were executed after that determination was made.
#21..
- 985 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
B. The Department may cancel this Agreement, in whole or in part, if the California Legislature enacts any restrictions, limitations, or conditions that impact this Agreement or the funding of this Agreement; or cancellation is otherwise permitted under state contracting law.
C. To cancel this Agreement pursuant to this paragraph, the Department shall give thirty (30) calendar days’ advance written notice to the Grantee. The Grantee shall return any unexpended portion of its Grant award to the Department within thirty (30) calendar days from the date on the Department’s written notice of cancellation, unless (i) the parties have agreed upon an alternate arrangement in advance and in writing; or (ii) an alternate arrangement is necessary for one or both parties to remain in compliance with HHAP or other applicable law.
4. Eligible Activities
Grant funds awarded to the Grantee shall be applied to the eligible uses set forth at Exhibit A and described in greater detail at Exhibit E. Payment for any cost which is not authorized by this Agreement, or which cannot be adequately documented shall be disallowed and must be reimbursed to the Department or its designee.
5. Performance Milestones
Grantee shall timely satisfy and complete all Performance Milestones, as identified at Exhibit E of this Standard Agreement.
6. Article XXXIV
Homekey + provides Permanent Supportive Housing for persons (including Veterans and Youth) who are homeless, chronically homeless, or at risk of homelessness, and who are living with a Behavioral Health Challenge. As such, Article XXXIV, section 1 of the California Constitution is not applicable to Homekey + funded development, consistent with Health and Safety Code sections 37000-37002.
7. Appraisals
Grantee shall, at the request of the Department, provide an appraisal of any real property or any interest in real property that is acquired with the Grant funds. Any such appraisal shall be prepared in a form, and by a qualified appraiser, acceptable to the Department.
#21..
- 986 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
8. Environmental Compliance
Grantee shall provide a Phase I Environmental Site Assessment (“ESA”) for the Project, in conformance with ASTM Standard Practice E 1527, evaluating whether the Project is affected by any recognized environmental conditions. If the Phase I ESA discloses evidence of recognized environmental conditions and Grantee desires to proceed with the Project, the Grantee shall provide the Department with a Phase II report and any additional reports as required by the Department and in a form acceptable to the Department. Any remediation work shall be subject to Department approval. Grantee shall also provide an asbestos assessment and a lead-based paint report for the Department’s approval if the Project involves rehabilitation or demolition of existing improvements.
Projects, including phased Projects, that satisfy the requirements HSC 50675.1.5, shall be exempt from the California Environmental Quality Act (CEQA) Projects under this section are considered a “use by right”, which are specifically exempt from CEQA (CA Public Resources Code section 21000 et seq.). (HSC 50675.1.5(e)(2)(A)).
Moreover, HSC 50675.1.5(c) specifically exempts HCD actions taken to “provide financial assistance or insurance for the development and construction of Projects” from CEQA review. HCD encourages Eligible Applicants to fully engage with HCD’s technical assistance and to review the CEQA exemption set forth at HSC section 50675.1.5 and the provision for land use consistency and conformity set forth at HSC section 50675.1.3, subdivision (i).
Applicants should consult with their counsel for legal advice in construing application of the foregoing exemptions to their Project. It is entirely within an Applicant’s discretion to determine whether to use the statutory CEQA exemption, whether the exemption applies to the Applicant’s proposed activity, or whether some other mechanism applies and could be used to satisfy obligations under CEQA.
The exemption from CEQA pursuant to HSC 50675.1.5 does not exempt Homekey+ Projects from the National Environmental Policy Act (NEPA). Applicants must determine if NEPA applies to the Homekey+ Project and plan to receive the relevant clearances before the Project proceeds with the acquisition or physical activities, as applicable.
HCD is not responsible for determining which Projects require NEPA clearance.
Nevertheless, applicants shall provide HCD a status and timeline of any required NEPA review at the time of application.
#21..
- 987 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
9. Insurance
A. Grantee shall obtain the insurance coverages identified in the NOFA. Grantee shall maintain such insurance coverages for either the term of this Agreement or the term of any required restrictive covenant or regulatory agreement, whichever applicable term is longer. Grantee shall name the State of California and the Department, as well as their respective appointees, officers, agents, and employees, as additional insureds on all such policies. Such policies shall provide for notice to the Department in the event of any lapse of coverage or insurance claim thereunder. Prior to disbursement of any Grant funds, Grantee shall provide evidence satisfactory to the Department of its compliance with these insurance requirements.
B. If Grantee is self-insured, in whole or in part, as to any of the required types and levels of coverage, the Grantee shall provide the Department with a written acknowledgment of its self-insured status prior to disbursement of any Grant funds. If the Grantee abandons its self-insured status at any time after execution of this Agreement, the Grantee shall immediately notify the Department, and shall promptly comply with the insurance coverage requirements under the Program.
10. Granted Funding Commitments
Grantee shall demonstrate its capacity to provide the development and operating funding commitments represented to the Department, as set forth in Exhibit E, Budget Detail. The Department reserves the right to request that Grantee provides additional documentary evidence of such capacity at any point.
11. Relocation
Grantee must comply with all applicable federal, state, and local relocation law.
Pursuant to relocation law, a Grantee must have a relocation plan approved by the Department prior to proceeding with any phase of a Project or other activity that will result in the displacement of persons, businesses, or farm operations. To ensure that displaced persons and entities do not suffer a disproportionate impact as a result of Projects which benefit the public, all notices to vacate and relocation services must be provided to them in accordance with applicable law. In addition, before the Homekey + award will be disbursed, Grantee must have either of the following:
A. Department-approved relocation plan; or
#21..
- 988 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
B. Department-issued Certification Regarding Non-Application of Relocation Benefits and Indemnification Agreement, which has been duly executed by the Grantee and approved by the Department.
12. One-for-One Replacement of Assisted Units
One-for-one replacement of Assisted Units is permissible if approved in advance by the Department per Section 300 of the NOFA, after the Department’s determination, in its sole and absolute discretion, that such replacement will not reduce the inventory of units that are already available at affordable rents to households that are at or under 30 percent AMI.
13. Site Control
Unless and except as otherwise expressly approved in writing by the Department or provided at Exhibit E to this Agreement, the Grantee shall have control of the property at all times, and such control shall not be contingent on the approval of any other party.
The status and nature of the Grantee's title and interest in the property must be acceptable to the Department. Site control may be evidenced by one of the following:
A. Fee title.
B. A leasehold interest on the property with provisions that enable the lessee to make improvements on and encumber the property provided that the terms and conditions of any proposed lease shall permit compliance with, and satisfaction of, all Program objectives and requirements, including, without limitation, those set forth in this Agreement. If the Grantee’s interest in the property is a leasehold, and the lessee and the lessor are affiliated or related parties, then the Department may require both the lessee and the lessor to execute this Agreement.
C. An executed disposition and development agreement, or irrevocable offer of dedication to a public agency.
D. A sales contract, or other enforceable agreement for the acquisition of the property. If this form of evidence was relied upon at the time of Application, the Department may impose additional Performance Milestones (e.g., presentation of additional or supplemental evidence of eventual site control closer to any projected close of escrow).
#21..
- 989 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
E. A letter of intent, executed by a sufficiently authorized signatory of the Grantee, that expressly represents to the Department, without condition or reservation, that, upon successful application, the Grantee shall purchase or otherwise acquire a sufficient legal interest in the property to accomplish the purpose of the award. The letter of intent must also be duly acknowledged by the party selling or otherwise conveying an interest in the subject property to the Grantee. If this form of evidence was relied upon at the time of Application, the Department may impose additional Performance Milestones (e.g., presentation of additional or supplemental evidence of eventual site control closer to any projected close of escrow).
F. Other evidence of site control that gives the Department assurance (equivalent to A-E above) that the Grantee will be able to complete the Project in a timely manner and in accordance with the Program’s objectives and requirements, including, without limitation, those set forth or referenced in this Agreement.
14. Adaptability and Accessibility
The Project shall comply with all applicable federal, state and local laws regarding adaptability and accessibility, including, without limitation, the requirements set forth in the Homekey+ NOFA Section 508.
15. Title Status and Reports
Grantee shall provide a current title report for the real property on which the Project is located. If Grantee’s interest in the property is leasehold, then Grantee shall provide a current title report for the leasehold interest and the fee interest. For tribal trust land, Grantee shall provide a TSR or an attorney’s opinion regarding chain of title and current title status. As set forth and specified at Exhibit B of this Agreement, Grantee shall provide such title report or documentation of title status prior to disbursement of any Homekey+ Grant funds.
16. Title Insurance
Grantee shall provide evidence of title insurance and an ALTA As-Built Survey that are acceptable to the Department. The condition of title, the insurer, the liability amount, the form of policy, and the endorsements shall be subject to Department approval. The policy shall ensure that Grantee holds good and marketable title (fee simple or leasehold).
#21..
- 990 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
17. Property Management Plan
Grantee shall submit a property management plan to the Department for its review and approval. Such management plan shall be consistent with any representations made in the Application, and it shall meet the Homekey+ Program Requirements.
18. Supportive Services Plan
Grantee shall submit a Supportive Services plan to the Department for its review and approval. Such Supportive Services plan shall be consistent with any representations made in the Application, and it shall meet the Homekey+ Program Requirements (e.g., provide for delivery of housing stability services and benefits).
19. Nondiscrimination
Grantee shall adopt a written nondiscrimination policy requiring that no person shall, on the grounds of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, age, medical condition, genetic information, citizenship, primary language, immigration status (except where explicitly prohibited by federal law), arbitrary characteristics, and all other classes of individuals protected from discrimination under federal or state housing laws, individuals perceived to be a member of any of the preceding classes, or any individual or person associated with any of the preceding classes, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity funded in whole or in part with Homekey + funds.
Statutes and regulations prohibiting discrimination are applicable to this Agreement and include, without limitation, the following:
A. Grantee and any of its contractors, subcontractors, successors, transferees, and assignees shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the U.S. Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this Agreement. Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the U.S. Department of the #21..
- 991 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this Agreement;
B. Equal Employment Opportunity. Except as otherwise provided under 41 CFR Part 60, all contracts that meet the definition of “federally assisted construction contract” in 41 CFR Part 60–1.3 must include the equal opportunity clause provided under 41 CFR 60–1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 CFR Part, 1964–1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41 CFR part 60, “Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.”;
C. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq.); Grantee shall affirmatively further fair housing, in accordance with the Civil Rights Act of 1964 (42 U.S.C §2000a, et seq.), and the Fair Housing Act (42 U.S.C. §3601, et seq.), according to 42 U.S.C. §5306, et seq. and in compliance with California statute (Gov. Code sections 65583, et seq.). Grantee shall comply with the Fair Housing Amendment Act of 1988 (Public Law 100-430). Grantee shall develop and implement an affirmative fair housing marketing plan that is satisfactory to the Department. Appropriate aspects of the initial plan shall be incorporated into the ongoing management plan to ensure positive outreach and informational efforts to those who are least likely to know about and apply for Interim Housing or Permanent Housing. Grantee is encouraged to refer to the guidelines for Affirmative Fair Housing Marketing Plans issued by the U.S.
Department of Housing and Urban Development (“HUD”). Grantee shall comply with all applicable state and federal fair housing laws; D. Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794); prohibiting recipients of federal funds from discrimination against persons with disability; the Americans With Disabilities Act of 1990 prohibiting all public discrimination against persons with disabilities; the Age Discrimination Act of 1975 prohibiting age-based discrimination in federally funded activities; Executive Order 11063 prohibiting discrimination in disposition of properties owned or financed with federal funds, as amended by Executive Order 12259; and Executive Order 11246 regarding fair employment, as amended by Executive Orders 11375, 11478 and 12086; and HUD regulations heretofore issued or to be issued to implement these authorities relating to civil rights; #21..
- 992 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
E. The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.); The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.); prohibiting age-based discrimination in federally funded activities.
Title II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. § 12101 et seq.); Americans With Disabilities Act of 1990 prohibiting all public discrimination against persons with disabilities. The State of California nondiscrimination statutes, regulations, and standards set forth and identified in the NOFA and at Exhibit C of this Agreement.
20. Affirmative Fair Housing Marketing Plan and Fair Housing Compliance A. Grantee shall affirmatively further fair housing, in accordance with the Civil Rights Act of 1964 (42 U.S.C §2000a, et seq.), and the Fair Housing Act (42 U.S.C. §3601, et seq.), according to 42 U.S.C. §5306, et seq. and in compliance with California statute (Gov. Code sections 65583, et seq.). Grantee shall comply with the Fair Housing Amendment Act of 1988 (Public Law 100-430).
B. Grantee shall develop and implement an affirmative fair housing marketing plan that is satisfactory to the Department. Appropriate aspects of the initial plan shall be incorporated into the ongoing management plan to ensure positive outreach and informational efforts to those who are least likely to know about and apply for Interim Housing or Permanent Housing. Grantee is encouraged to refer to the guidelines for Affirmative Fair Housing Marketing Plans issued by the U.S.
Department of Housing and Urban Development (“HUD”). Grantee shall comply with all applicable state and federal fair housing laws.
21. Grantee Acknowledgment of the Pet Friendly Housing Act of 2017 By executing this Agreement, Grantee acknowledges that the Pet Friendly Housing Act of 2017 (California Health & Safety Code, § 50466) requires each housing development, if it is financed on or after January 1, 2018 pursuant to Division 31 of the California Health and Safety Code, to authorize a resident of the housing development to own or otherwise maintain one or more common household pets within the resident’s dwelling unit, subject to applicable state laws and local governmental ordinances related to public health, animal control, and animal anticruelty.
#21..
- 993 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
22. Final Certificate of Occupancy
Grantee shall provide a final certificate of occupancy (or an equivalent form of occupancy certification or approval) issued by the local agency having jurisdiction over such certificates.
23. Occupancy
The Assisted Units shall be occupied by the Target Population, and such units shall be in decent, safe, and sanitary condition at the time of their occupancy. In addition, the Grantee shall certify, upon occupancy, that it will employ the core components of Housing First (as set forth at Welfare and Institutions Code section 8255) as part of its property management plan and Supportive Services plan.
24. Tenant Selection
Referrals to Assisted Units shall be made through the local Coordinated Entry System (“CES”), or another comparable prioritization system based on greatest need shall be used. All referral protocols for Assisted Units shall be developed in collaboration with the local Continuum of Care and implemented consistently with the Program Requirements.
25. Participation in Statewide HDIS/HMIS
Grantee shall support Continuum of Care participation in the statewide Homeless Data Integration System (“HDIS”). As required by and in accordance with state and federal law (including all applicable privacy law), Grantee shall further disclose relevant data to the local Homeless Management Information System (“HMIS”) and comparable data collection systems.
26. Affordability Covenant
A. An Affordability Covenant shall be recorded against the Project real property in accordance with Section 208 of the NOFA and this Agreement.
B. The Public Entity or Tribal Entity shall prepare and cause a 55-year Affordability Covenant to be recorded against the Project real property except in the event that the Permanent Housing Project is located on tribal trust land, in which case a 50-year Affordability Covenant shall be recorded against the Project real property.
#21..
- 994 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
C. The Affordability Covenant shall require integration of the Target Population within all entrances, common areas, and buildings that comprise the Project.
D. The Affordability Covenant shall include occupancy and rent restrictions that maintain the Project’s accessibility to the Target Population over the full term of the Affordability Covenant.
E. All Affordability Covenants are subject to the advance written approval of the Department, and shall be acceptable to the Department in form, substance, and priority. Project-specific requirements and deadlines are set forth at Exhibit E of this Agreement.
27. Restrictions on Sales, Transfers, and Encumbrances
Grantee shall not, for the duration of this Agreement, sell, assign, transfer, or convey the Project, or any interest therein or portion thereof, without the express prior written approval of the Department.
The Grantee who garnered the experience points at the application stage must be the entity who controls the owner of the Project, through close of escrow, and into management and operation of the project. Organizational documents demonstrating that the experienced Grantee has the authority to exercise control of the borrowing entity in compliance with Section 8301(s) of the Uniform Multifamily Regulations (UMR) must be submitted to the Department for review and approved by the Department prior to execution of the Standard Agreement.
28. Retention, Inspection, and Audit of Records
A. Grantee is responsible for maintaining records which fully disclose the activities funded by the Grant. Grantee shall retain all records for a period of five (5) years after the expiration of this Agreement, unless a longer retention period is stipulated. If any litigation, claim, negotiation, audit, monitoring, inspection or other action commences during this required retention period, all records must be retained until a full and final resolution of the action.
B. At any time during the term of this Agreement, the Department may perform or cause to be performed a financial audit of any and all phases of the Project. At the Department’s request, the Grantee shall provide, at its own expense, a financial audit prepared by a certified public accountant. The audit shall be #21..
- 995 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
performed by a qualified state, local, independent, or Department auditor. Where an independent auditor is engaged, the audit services agreement shall include a clause which permits the Department to have access to the independent auditor’s relevant papers, records, and work product.
C. If there are audit findings, the Grantee shall submit a detailed response to the Department for each audit finding. The Department will review the response. If the Department determines, in its sole and absolute discretion, that the response is satisfactory, the Department will conclude the audit process and notify the Grantee in writing. If the Department determines, in its sole and absolute discretion, that the response is not satisfactory, the Department will contact the Grantee, in writing, and explain the action required to cure any audit deficiencies.
Such action could include the repayment of ineligible costs or other remediation.
D. If so directed by the Department upon the termination or expiration of this Agreement, the Grantee shall deliver all records, accounts, documentation, and other materials that are relevant to this Agreement to the Department as depository.
29. Site Inspection
The Department reserves the right, upon reasonable notice, to inspect the Project to determine whether it meets the Program Requirements. If the Department reasonably determines that the site is not acceptable for the Project in accordance with] the Program Requirements, the Department reserves the right to rescind the award and the Grant. Nothing in this paragraph is intended to create or imply any obligation of the Department to inspect the Project.
30. Compliance with State and Federal Laws, Rules, Guidelines, and Regulations Grantee, its agencies or instrumentalities, contractors, sub-grantees, and subrecipients shall comply with all local, state, and federal laws, statutes, and regulations, as well as policies and guidelines established by the Department for the administration of the Homekey + program.
#21..
- 996 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
31. Updated Information
If there is any change in the information that has been provided to the Department, Grantee shall promptly provide the Department with updated documentation (e.g., updated sources and uses). All changes shall be subject to Department approval. In addition, Grantee shall promptly notify the Department, in writing, of any changes in Grantee or Co-Grantee organization, authorization, or capacity.
32. Survival of Obligations
The obligations of the Grantee, as set forth in this Agreement, shall survive the termination or expiration of this Agreement.
33. Litigation
Grantee shall notify the Department immediately of any claim or action undertaken by or against it which affects or may affect this Agreement or the Department and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement, the Program Requirements, the interests of the Department, and the objectives of the Homekey + Program.
34. Entire Agreement; Severability
This Agreement constitutes the entire agreement between the Grantee and the Department. All prior representations, statements, negotiations, and undertakings with regard to the subject matter hereof are superseded hereby. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remaining terms and provisions of this Agreement, or the application of such terms or provisions to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.
35. Modification or Waiver under AB 1010
The Department reserves the right to waive or modify any requirement under this Agreement, or any Program Requirement, as authorized by and in accordance with California Assembly Bill No. 1010 (Chapter 660, Statutes of 2019) (“AB 1010”), which is codified at California Health and Safety Code section 50406, subdivision (p). #21..
- 997 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
36. Waivers
No waiver of any breach, violation, or default under this Agreement shall be held to be a waiver of any other or subsequent breach or violation thereof or default thereunder. The Department’s failure, at any time, to enforce the provisions of this Agreement or to require the Grantee’s performance under this Agreement shall in no way be construed as a waiver of such provisions or performance, and it shall not affect the validity of this Agreement or the Department’s right to enforce this Agreement.
37. Disputes
In the event of any conflict between this Agreement and any Grantee documents or side agreements, this Agreement and the Program Requirements shall prevail, are applicable, and shall be enforceable by the Department even if the Department provided review or approval of such documents and side agreements.
38. Consent
The parties agree that wherever the consent or approval of the Department or Grantee is required under this Agreement, such consent or approval shall not be unreasonably withheld, conditioned, or delayed, unless the same is specified as being in that party’s sole and absolute discretion, or other words of similar import.
39. Grantee Liability
Grantee shall remain liable to the Department for performance under this Standard Agreement and compliance with all Program Requirements regardless of any Department-approved transfer or assignment of interest, or of any designation of a third party for the undertaking of all or any part of the Scope of Work. Likewise, each CoGrantee shall remain jointly and severally liable to the Department for performance under this Standard Agreement and compliance with all Program Requirements regardless of any Department-approved transfer or assignment of interest; any designation of a third party for the undertaking of all or any part of the Scope of Work; or the Co-Grantees’ identification of a Designated Payee.
40. Defense and Indemnification
Grantee agrees to defend, indemnify, and hold harmless the Department, and its appointees, agents, employees, and officers, from any losses, damages, liabilities, claims, actions, judgments, court costs and legal or other expenses (including attorneys’ #21..
- 998 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT D
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
fees), which may arise in connection with Grantee’s use of the Grant funds and performance under this Agreement. If any attorney, including the California Attorney General, is engaged by the Department to enforce, construe, or defend any provision of this paragraph, with or without the filing of any legal action or proceeding, Grantee shall, individually or jointly, pay to the Department, immediately upon demand, the amount of all attorneys’ fees and costs incurred by the Department in connection therewith.
41. Time Is of the Essence
Time is of the essence under this Agreement, and in the performance of every term, covenant, and obligation contained herein.
#21..
- 999 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
PROJECT-SPECIFIC PROVISIONS AND SPECIAL TERMS AND CONDITIONS
1. PROJECT-SPECIFIC PROVISIONS
Project Name: El Capitan
Address: 1121 Needham Street Modesto, CA 95354
Assessor Parcel Numbers (APNs): 109-008-004-000
A. Award, Payee and Eligible Use(s)
The Department issued the Grantee a Homekey+ Program Conditional Award Letter dated September 19, 2025. The Award is a grant in the amount of $18,689,375.00. The Payee of these funds is the City of Modesto. Grantee will use the funds to provide Permanent Supportive Housing for the Target Population and subpopulations in the Homekey+ Assisted Units as specified in the unit mix chart included herein. Specifically, the Grantee will apply these funds towards the following eligible use(s):
1) Acquisition and rehabilitation of a hotel or motel to provide Permanent Supportive Housing for the Target Population.
2) Capitalized operating subsidy for the Homekey+ Assisted Units 3) Relocation costs for individuals who are being displaced as a result of the Homekey+ Project. This amount represents one-half of the relocation cost per unit. The Grantee is responsible for paying the balance of any and all relocation costs necessitated by the Project
#21..
- 1000 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
B. Homekey+ Award.
The Homekey+ Award is comprised of:
Total Award $18,689,375.00
Capital Award $14,272,159.00
Acquisition $3,820,000.00
Rehabilitation & Development $10,452,159.00
Master Leasing $0.00
New Construction $0.00
Affordability Covenants $0.00
Relocation Award $80,000.00
Operating Award $3,617,216.00
Veteran Units Additional Operating Award $720,000.00
C. Unit Mix [see next page]
#21..
- 1001 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
Table 1: Homekey+ Unit Mix.
Number of
Bedrooms
Number of
Homekey+
Funded
Units
AMI% or
Manager
Unit
Homekey+
Population
Restriction to
Subset of
Homekey+
Population
All foregoing
subpopulations
must include
Behavioral Health
Challenge
0 Bedroom/
Studio
12 30% Homekey +
Target
Population
People Experiencing
Homelessness
0 Bedroom/
Studio
12 30% Homekey +
Target
Population
People At-Risk of
Homelessness
0 Bedroom/
Studio
12 30% Veterans with a
Behavioral
Health
Challenge
Veterans Experiencing
Homelessness
0 Bedroom/
Studio
12 30% Veterans with a
Behavioral
Health
Challenge
Veterans At-Risk of
Homelessness
0 Bedroom/
Studio
1 Manager Unit N/A N/A
Veterans Units
Total
24 Homekey+
General
Population
Total
24 Youth Units
Total
0 Manager Units
Total
1 Total
Homekey+
Units
49 #21..
- 1002 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
Table 2: Non-Homekey+ Unit Mix: Non-Applicable.
Referrals to Homekey+ Assisted Units shall be made through the local Coordinated Entry System (CES), or another comparable prioritization system based on greatest need for housing and services, to determine the most appropriate referral. Grantees must demonstrate efforts to coordinate with their local county behavioral health department, to ensure the referral process to the Homekey+ units is aligned with the requirements of the Homekey+ program.
Homekey+ Assisted Units should be reserved for serving the Target Population where households are more appropriately served by Permanent Supportive Housing, including referrals from persons exiting encampments. Households with lower levels of need may be better served by other housing and less intense service interventions.
2. PROJECT DETAILS
A. Project Narrative. El Capitan is a motel acquisition and rehabilitation project with a total of 49 studio units, including 1 manager units. The Project dedicates 24 Permanent Supportive Housing units to serve individuals experiencing homelessness or at risk of homelessness with a Behavioral Health Challenge and 24 units for veterans experiencing homelessness or at risk of homelessness with a Behavioral Health Challenge.
B. Units Serving Veterans. This Project received funding for 24 Homekey+ Veterans units. Grantee shall abide by all additional representations in the Application that qualified the Grantee for funding for Veterans Assisted Units.
Projects with units allocated for Veterans must provide housing for Veteran households that include at least one Veteran experiencing or At Risk of Homelessness with a Behavioral Health Challenge. If units cannot be filled with Veterans at or below 30% AMI, Secondary Tenants can be housed, in accordance with NOFA Section 500. Secondary Tenants are defined as either: 1) Veterans who are At Risk of or Experiencing Homelessness whose incomes are up to 50% AMI and are receiving income as a result of service-connected disability benefits, or 2) Veterans experiencing homelessness with an income of up to 60% AMI. Rents for any redesignated units are determined by income that corresponds to the Secondary Tenant’s household income.
This Project received an additional operating award of $30,000 per unit for 24 units, totaling $720,000.00. This funding is Awarded for qualifying Operating #21..
- 1003 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
Expenses and it must be expended no later than ten (10) years from initial occupancy.
#21..
- 1004 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
3. SCOPE OF WORK
A. Acquisition, Construction and/or Rehabilitation Detail:
The Grantee will acquire and rehabilitate El Capitan Motel located at 1121 Needham Street, Modesto, CA. UP Holdings California, LLC will complete a moderate renovation to the existing buildings to convert the motel rooms into studio apartments. The scope of the renovation includes:
Updating path of travel, ramps, signage and parking to accessibility standards. New concrete curbing and walkways. A new fence and new fire sprinklers throughout.
Update laundry room to accessibility codes. Ensure sufficient site lighting for access and security purposes. Update existing parking to include accessibility and EV-ready infrastructure. Fill in the pool and remove the fencing; convert to a common area.
Add solar PV panels to the roof. Re-roof the entire property as appropriate. Replace all the windows and install new appliances. Replace all vertical blinds. Add new smoke alarms and CO2 sensors. New flooring throughout. Replace all HVAC units, exhaust fans, ducting and PTACs. Replace all ceiling and wall insulation. Add new cabinetry to all units. Replace all plumbing fixtures, toilets, faucets, showers etc. Add plumbing for all new kitchenettes. Redesign existing manager’s unit to add offices, conference room, and accessible restroom.
B. Supportive Services and Staffing Detail:
Grantee shall assure that the Case Manager ratio(s) for this Project will be maintained at 1 to 10 for the Homekey+ Homeless population for 12 units, 1 to 12 for Homekey+ At-risk of Homelessness population for 12 units, 1 to 10 for the Homekey+ Veteran Homeless Population for 12 units and 1 to 12 for Homekey+ Veteran At-risk of Homelessness Population for 12 units. Community Holdings Management will manage the Project
Grantee will coordinate with a third-party service provider Stanislaus County Behavioral Health and Recovery Services to act as Lead Service Provider. Services include those required in NOFA Section 302 (1-24).
#21..
- 1005 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
C. GRANTEE CONTRACT COORDINATOR(S)
Authorized Representative Name: Joseph P. Lopez
Authorized Representative Title: City Manager
Entity Name: City of Modesto
Address: 1010 10th Street, Modesto, CA 95354
Telephone No.: 209-577-5223
E-Mail Address: [email protected]
Authorized Representative Name: Cullen Davis
Authorized Representative Title: Manager
Entity Name: El Capitan Homekey LP
Address: 6083 N Figarden Dr #656, Fresno, CA
93722
Telephone No.: 312-870-4747
E-Mail Address: [email protected]
Authorized Representative Name: Cullen Davis
Authorized Representative Title: Manager
Entity Name: UP Holdings California LLC
Address: 6083 N Figarden Dr #656, Fresno, CA
93722
Telephone No.: 312-870-4747
E-Mail Address: [email protected]
#21..
- 1006 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
4. ADDITIONAL CONDITIONS PRECEDENT TO DISBURSEMENT
A. A Department approved Subordination Agreement from City of Modesto Community Development Block Grant funds shall be executed and recorded at closing to ensure the Homekey+ Use Restriction holds first lien priority.
#21..
- 1007 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
5. BUDGET DETAIL
A. Grantee represented to the Department the following commitments for the development and construction of the Homekey+ Project:
Development Sources:
1) Homekey+ Award letter dated 09/19/2025 for a funding commitment of $14,272,159.00 for acquisition and rehabilitation and development, and $80,000.00 for relocation.
2) City of Modesto Resolution dated 02/04/2025 for Community Development Block Grant (CDBG) for a funding commitment of $3,007,163.00. Residual receipts with a 3% interest rate will be due in 55 years. 3) Stanislaus Community System of Care letter dated 04/24/2025 committing funds from the Homeless Housing Assistance and Prevention (HHAP) program Round 5, in the amount of $922,837.00.
4) Stanislaus County Behavioral Health and Recovery Services letter dated 04/29/2025 committing $500,000.00 of Behavioral Health Services Act (BHSA) funds.
5) El Capitan Homekey LP, in an UP Holdings California LLC letter dated 06/13/2025, committing $168,825.00 in Developer Fee funds.
B. Grantee shall maintain the ongoing affordability of the Project by leveraging the following non-Homekey+ sources for operating expenses:
Operating Sources:
1) Homekey+ Award letter dated 09/19/2025 for a funding commitment of $3,617,216.00 for operating.
2) Behavioral Health Recovery Services (BHRS) Enforceable Funding Commitment (EFC) letter dated 04/29/2025, committing $400,000.00 per year for 20 years, for a total of $8,000,000.00.
#21..
- 1008 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
3) Capitalized Operating Reserve (COSR) in a letter dated 07/29/2025, funded by Development sources ($500,000.00 from Stanislaus Community System of Care HHAP Round 5 and
$450,000.00 from BHRS-BHSA) committing a total of $950,000.00 for years 1 through 13 (13 years).
4) UP Holdings California LLC in a letter dated 07/29/2025, stating an Intent to Purse funding of $4,223,552.00 for years 9 through 15 (6 years) through local, regional, state and federal sources. 5) U.S. Department of Housing and Community Development (HUD) letter dated 02/03/2025, committing 24 Veteran Affairs Supportive Housing (VASH) vouchers estimated at $6,508,800.00 for 20 years.
6. PERFORMANCE MILESTONES
Performance Milestones Milestone Completion Date
Expenditure Deadline for Capital
Funds.
February 18, 2027, which includes 60 days
from the date of the Award letter.
Complete construction of the
Rehabilitation Homekey+ Project
must be achieved.
November 18, 2026, which includes 60
days from the date of the Award letter.
Full occupancy by the Target
Population must be accomplished in
accordance with the descriptions
and representations set forth in the
Application.
February 18, 2027, which includes 60 days
from the date of the Award letter.
#21..
- 1009 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
Performance Milestones Milestone Completion Date
NEPA Authorization to Use Grant
Funds (AUGF) must be submitted
upon construction completion.
November 18, 2026, which includes 60 days
from the date of the Award letter.
Grantee must have an approved
Supportive Services Plan by full
occupancy.
February 18, 2027.
A copy of Grantee’s written
nondiscrimination policy (in
accordance with Exhibit D of this
Agreement) must be submitted to
the Department.
July 20, 2026 which includes 60 days from
the date of the Award letter.
A copy of the Notice of Exemption
from the California Environmental
Quality Act (CEQA) filed with the
Office of Planning and Research
(OPR) as applicable.
July 20, 2026 which includes 60 days from
the date of the Award letter.
Expenditure Deadline for
Operating Funds.
February 18, 2037, which is 10 years from
the date of full occupancy
A Homekey+ Program and Report
must be submitted to the
Department as specified and
described in the NOFA.
March 31 – Each year for five (5) years
following the Effective Date of this
Agreement. The annual report is required
for at least five years following full
occupancy of the Project and until the
Homekey+ operating funds are fully
expended.
A Homekey+ Expenditure Report
must be submitted to the
Department.
July 31 – Each year until the full Homekey+
Award has been fully expended.
#21..
- 1010 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
7. TERMS AND CONDITIONS
The following Special Terms and Conditions are applicable to this Project and shall control notwithstanding anything to the contrary herein:
A. Affordability Covenant
1) The state, regional, local, or tribal Grantee shall ensure that the Project is duly encumbered with a 55-year Affordability Covenant that (a) is recorded in first position against the Project for the benefit of the state, regional, local, or tribal Grantee; (b) restricts the use, operation, occupancy, and affordability of the Project in accordance with this Homekey+ Agreement and the applicable Program Requirements in the NOFA; (c) duly names the Department as a third-party beneficiary with the right and privilege, but not the obligation, of enforcement thereof; (d) incorporates the Homekey+ Program Requirements by reference and (e) is otherwise in form and substance acceptable to the Department.
2) The Affordability Covenant must be recorded against the real property of the Project site prior to the disbursement of funds as specified in Exhibit B.
The Grantee shall obtain the Department’s express written approval of the Affordability Covenant prior to the recordation of the same. After recordation, the Grantee shall promptly provide the Department with a conformed copy of the recorded Affordability Covenant and a title report to confirm lien priority.
3) All Homekey+ funds must be wired to an escrow company as specified in Exhibit B. The Applicant shall identify the name and address of the escrow company, the name of the escrow officer, the escrow number, and any other information requested by HCD. The appropriate Affordability Covenant must be on file and approved by HCD to be included in the escrow transaction for recordation.
4) The Affordability Covenant must be recorded as a lien against the Project in first position, and must remain in first position, over all other Project agreements, covenants, or other matters of record on the real property for the period of affordability required by the Program.
#21..
- 1011 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
B. Affordability Covenant – Tribal Trust Land
Non-Applicable.
8. Project-Specific Special Terms and Conditions
A. Application Scoring Terms and Conditions
1) Grantee application was prioritized for receiving at least 10 points per NOFA Section 305, Application Scoring Criteria, (3)(a), for sustained operating leverage evidenced by Project rental or operating subsidies.
Grantee has committed to non-Homekey+ rental or operating subsidies (including funded services) to maintain the ongoing affordability and sustainability of Project operations that are outlined in Section 5, Budget Detail. Any budget modifications must be submitted to HCD for approval and must address how the Project affordability and sustainability will be maintained.
2) Grantee received 10 points by committing to Mental Health Services Act or Behavioral Health Services Act funds as evidenced by a letter as per NOFA Section 305, Application Scoring Criteria, (3)(c). Any budget modifications must be submitted to HCD for approval.
3) Grantee has committed to a 55-year use restriction for the Project and has waived any potential accommodation by the Department to increase income limits, as per NOFA Section 305, Application Scoring Criteria, (5)(b), for 100 percent of the Assisted Units.
4) Grantee has committed to the following accessibility details for the Project, as per NOFA Section 305, Application Scoring Criteria, (5)(c), the Project will exceed the state and federal accessibility requirements set forth in the NOFA.
At least 15 percent of the Project’s Assisted Units must have features accessible to persons with mobility disabilities and at least 10 percent of the Project’s units must have features accessible to persons with hearing or vision disabilities.
5) Grantee has committed to provide high speed internet service, as per NOFA Section 305, Application Scoring Criteria, (6)(g), with a minimum #21..
- 1012 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
average speed of 25 megabits/second must be made available to each Unit for a minimum of 15 years, free of charge to the tenants, and available within six months of the Project’s placed-in-service date.
B. Supportive Services Plan Terms and Conditions
HCD may request necessary updates to the Supportive Services plan or related documents, including fully executed written agreements. All updates must be approved prior to occupancy as determined by the milestone listed in this Standard Agreement.
C. Site Control Terms and Conditions
Grantee demonstrated site control by providing evidence of a Purchase and Sales Agreement at the time of Application.
9. Project Development Budget: (Please see the next page for the development sources and uses budget from the application that was approved by HCD’s Awards Committee.) Budget detail included for the purpose of showing the Homekey+ Award details, including project reserves and developer fee. Other budget sources and uses will not be monitored by HCD.
#21..
- 1013 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
Homekey Approved Development Sources & Uses Budget
#21..
- 1014 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
#21..
- 1015 -
City of Modesto, El Capitan Homekey LP, UP Holdings California LLC 24-HK+-18623
EXHIBIT E
Homekey+ Program
NOFA Date: 11/26/2024; as amended 01/31/2025; 08/07/2025 Project Name: El Capitan
Approved Date: 09/24/2025
Prep. Date: 10/10/2025
#21..
- 1016 -
1 60208455.3
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Modesto
1010 10th Street
Modesto, CA 95354
Attention: City Manager
SPACE ABOVE THIS LINE FOR RECORDERS USE
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(El Capitan)
This Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”) is dated ____________, 2026 and is between the City of Modesto, California (the “City”), and El Capitan Homekey LP, a California limited partnership (the “Borrower”), and for the benefit as a third-party beneficiary, the State of California Department of Housing and Community Development (“HCD”).
RECITALS
A. Defined terms used not defined in these recitals are as defined in Article 1 of this Regulatory Agreement.
B. Borrower intends to purchase, or has purchased concurrently, that certain real property located in the City of Modesto, County of Stanislaus, State of California, as more particularly described in Exhibit A (the “Property”). Borrower intends to develop thereon 49 housing units located on the Property for rental to low-income households, including one manager’s unit (the “Project”). Together the Property and its improvements are the “Development.”
C. Pursuant to a Standard Agreement, dated ____________, 2026, and related documents (collectively, the “Homekey Documents”), HCD is making a grant of funds from its Homekey+ Program in the amount of $18,416,000.00 (the “Homekey Funds”) to the City and certain affiliates of the Borrower to assist in the construction of the Development.
D. The City has agreed to co-sponsor the Homekey Funds on the condition that Borrower maintain and operate the Development in accordance with restrictions set forth in the Homekey Documents (the “Homekey Restrictions”) and this Regulatory Agreement. These restrictions are intended to bind Borrower, and all purchasers of the Property and their successors.
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E. Borrower declares that the Property is held and will be held, transferred, encumbered, used, sold, conveyed, and occupied subject to the covenants, restrictions and limitations set forth in the Homekey Documents and this Regulatory Agreement, all of which are declared and agreed to be in furtherance of the Project. All the restrictions, covenants and limitations will run with the land and will be binding on all parties having or acquiring any right, title or interest in the Property or any part thereof, will inure to the benefit of the City, and will be enforceable by it. Any purchaser under a contract of sale covering any right, title or interest in any part of the Property, by accepting a deed or a contract of sale or agreement of purchase, accepts the document subject to, and agrees to be bound by, any and all restrictions, covenant, and limitations set forth in this Regulatory Agreement commencing on the date the Borrower is notified by the City that the Project is complete, as memorialized by a Certificate of Completion issued by the City, constituting the commencement of the 55-year Affordability Period.
F. In consideration of receipt of the Homekey Funds, Borrower agrees to observe all the terms and conditions set forth below.
AGREEMENT
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms have the following meanings:
(a) City” means the City of Modesto, California, a municipal corporation. (b) “Development” has the meaning set forth in Paragraph B of the Recitals.
(c) “Fifteen Year HCD Term” means the 15-year term of Homekey Restrictions as described in the Standard Agreement.
(d) “Homekey Documents” has the meaning set forth in Paragraph C of the Recitals.
(e) “Homekey Funds” has the meaning set forth in Paragraph C of the Recitals.
(f) “Homekey Restrictions” has the meaning set forth in Paragraph D of the Recitals.
(g) “Partnership Agreement” means the Limited Partnership Agreement of El Capitan Homekey LP, a California limited partnership, dated as of February 24, 2025, which governs the operation and organization of Borrower as a California limited partnership.
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(h) “Project” has the meaning set forth in Paragraph B of the Recitals. (i) “Property” has the meaning set forth in Paragraph B of the Recitals. (j) “Regulatory Agreement” has the meaning set forth in the first paragraph of this Regulatory Agreement.
(k) “Tenant” means the tenant household that occupies a Unit in the Development.
(l) “Term” or “Affordability Period” 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 Regulatory Agreement, expires on the 55th anniversary of the Completion Date, as defined by the City’s issuance of a Certification of Completion for the Project.
(m) “Transfer” has the meaning set forth in Section 6.1. (n) “Unit(s)” means one or more of the affordable units in the Development.
ARTICLE 2
DECLARATIONS AND RESTRICTIONS
2.1 Declaration. The Borrower hereby declares that the Property is and shall be subject to the covenants and restrictions hereinafter set forth, all of which are declared to be in furtherance of the Project and the Homekey Documents and are established and agreed upon for the purpose of enhancing and protecting the value of the Property.
2.2 Restrictions. The following covenants and restrictions on the use and enjoyment of the Property shall be in addition to any other covenants and restrictions affecting the Property, and all such covenants and restrictions are for the benefit and protection of the City and shall run with the Property and be binding on any future owners of the Property and inure to the benefit of and be enforceable by City.
These covenants and restrictions are as follows:
a. The Borrower for itself and its successor(s) on title covenants and agrees that from the date the Project is determined by the City to be complete, until the expiration of the Affordability Period, shall cause all Units to be used as rental affordable housing in conformity with the Homekey Restrictions. The Borrower further agrees to file a recordable document setting forth the Project Completion Date when determined by the City. Unless otherwise provided in the Agreement, the term Affordable Housing shall include, without limitation, compliance with the following requirements:
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i. Nondiscrimination. There shall be no discrimination against nor segregation of any persons or group of persons on account of race, color, creed, religion, sex, marital status, national origin, ancestry, or handicap in the sale, transfer, use, occupancy, tenure, or enjoyment of any of the Property, nor shall the Borrower establish or permit any practice of discrimination or segregation with reference to the selection, location, number, use or occupancy of owners or vendees of the Project and/or Property.
ii. Principal Residence. The Units upon the Property shall be leased only to eligible natural persons, who shall occupy the Units as the Tenants’ principal place of residence. The forgoing requirement that the Tenant occupy the Unit as their principal residence does not apply to (i) persons, other than natural persons, who acquire the Property or portion thereof by foreclosure or deed in lieu of foreclosure; or qualified entities that acquire the Property or portion thereof with the consent of the City. iii. Household Income/Occupancy Requirements. Owner shall abide by the occupancy standards, occupancy assumptions, income limits, and rent levels that are permitted on Exhibit B (the “Rent”), attached hereto and incorporated herein. As described in Exhibit B, at least twenty-four (24) of the Units will be made available to veterans experiencing homelessness and twenty-four (24) Units that will be made available to a general homeless population. Notwithstanding the foregoing, if none of the prospective rental applicants for a particular level of affordability restriction are veterans at such affordability restriction level, the Unit may be leased to another Tenant as specifically permitted in the Standard Agreement.
Item (a) above is hereinafter referred to as the Covenant and Restriction.
ARTICLE 3
INCOME CERTIFICATION; REPORTING; RECORDS
3.1 Income Certification. Borrower shall obtain, complete, and maintain on file, before expected occupancy and annually thereafter, income certifications from each Tenant renting any of the Units. Borrower shall make a good faith effort to verify the accuracy of the income provided by the applicant or occupying household, as the case may be, in an income certification.
3.2 Reporting Requirements.
(a) Upon the request of City, Borrower shall submit to the City not later than 45 days after the close of each calendar year, or such other date as may be requested by the City, a report that includes the following data for each Unit: (i) Tenant income, (ii) the number of occupants, (iii) the Rent, (iv) the number of bedrooms, and (v) the initial address of each Tenant. To demonstrate continued compliance with this Section, Borrower shall cause each annual report after the initial report to include a record of any subsequent Tenant substitutions and any vacancies in Units that have been filled. #21..
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(b) Borrower shall submit to the City within 45 days after receipt of a written request, or such other time agreed to by the City, any other information or completed forms requested by the City.
3.3 Tenant Records. Borrower shall maintain complete, accurate and current records pertaining to income and household size of Tenants. All Tenant lists, applications and waiting lists relating to the Development are to be at all times: (i) separate and identifiable from any other business of Borrower, (ii) maintained as required by the City, in a reasonable condition for proper audit, and (iii) 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 years. The City may examine and make copies of all books, records or other documents of Borrower that pertain to the Development.
3.4 Development Records.
(a) Borrower shall cause all books, records and accounts relating to its compliance with the terms, provisions, covenants, and conditions of the Homekey Documents to be kept and maintained in accordance with generally accepted accounting principles consistently applied, and to be consistent with requirements of this Regulatory Agreement. Borrower shall cause all books, records, and accounts to be open to and available for inspection and copying by the City, its auditors, or other authorized representatives at reasonable intervals during normal business hours. Borrower shall cause copies of all tax returns and other reports that Borrower may be required to furnish to any government agency to be open for inspection by the City at all reasonable times at the place that the books, records, and accounts of Borrower are kept. Borrower shall preserve such records for a period of not less than five years after their creation in compliance accounting requirements. If any litigation, claim, negotiation, audit exception, monitoring, inspection, or other action relating to the use of the Homekey Funds is pending at the end of the record retention period stated herein, then Borrower shall retain the records until such action and all related issues are resolved. (b) The City shall notify Borrower of any records it deems insufficient.
Borrower has 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 15 days is reasonably necessary to correct the deficiency, then Borrower must begin to correct the deficiency within 15 days and correct the deficiency as soon as reasonably possible.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Compliance with Homekey Documents and Homekey Requirements. (a) Borrower’s actions with respect to the Property shall at all times be in full conformity with all requirements of the Homekey Restrictions. #21..
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ARTICLE 5
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities. Borrower is responsible for all management functions with respect to the Development, including without limitation the selection of Tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City 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. An on-site property manager shall reside at the Property.
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 sanitary housing (the “Management Agent”).
ARTICLE 6
MISCELLANEOUS
6.1 Transfers.
(a) For purposes of this Agreement, “Transfer” means any sale, assignment, or transfer, whether voluntary or involuntary, of: (i) any rights and/or duties under the Homekey Documents; and/or (ii) any interest in the Development, 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 Development is transferred and Borrower retains title.
The term “Transfer” excludes the leasing of any single unit in the Development to an occupant in compliance with this Regulatory Agreement.
(b) Except as otherwise permitted in this Section 6.1, or as set forth in the Homekey Documents, no Transfer is permitted without the prior written consent of the City, which the City may withhold in its reasonable discretion. (c) In the event the general partner of Borrower is removed by the for cause following default under the Partnership Agreement, the City hereby approves the Transfer of the general partner interest to another entity selected by the remaining partners.
6.2 Application of Provisions. The provisions of this Regulatory Agreement apply to the Property for the entire Term, unless the Homekey Restrictions shall no longer #21..
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apply to the Property than this Regulatory Agreement shall terminate. This Regulatory 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 the City.
6.3 Intentionally Deleted.
6.4 Covenants to Run with the Land. The City and Borrower 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 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.
6.5 Enforcement by the City. Without waiver or limitation, the City shall be entitled to injunctive or other equitable relief against any violation or attempted violation of any Covenant or Restriction.
(a) If Borrower fails to perform any obligation under this Regulatory Agreement, and fails to cure the default within 60 days after the City has notified Borrower in writing of the default, the City may enforce this Regulatory Agreement by any or all of the following actions, or any other remedy provided by law:
(1) 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 Regulatory Agreement and may seek damages.
(2) Remedies Provided Under Homekey Documents. HCD may
exercise, as third-party beneficiary, any other remedy provided under the Homekey Documents.
HCD may take any action of enforcement under this Regulatory Agreement as a third-party beneficiary hereunder but shall have no obligations of enforcement under this Regulatory Agreement.
6.6 Acceptance and Ratification. All present and future owners of the Property and other persons claiming by, through, or under them shall be subject to and shall comply with the Covenant and Restriction. The acceptance of a deed of conveyance to the Property shall constitute an agreement that the Covenant and Restriction, as may be amended or supplemented from time to time, are accepted and ratified by future owners, tenant or occupant, and such Covenant and Restriction shall be a covenant running with the land and shall bind any person having at any time any interest or estate in the #21..
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Property, all as though such Covenant and Restriction was recited and stipulated at length in each and every deed, conveyance, mortgage or lease thereof.
Notwithstanding the foregoing, upon foreclosure by a lender or other transfer in lieu of foreclosure, the Affordability Period shall be terminated unless the foreclosure or other transfer in lieu of foreclosure or assignment recognizes any contractual or legal rights of public agencies, nonprofit sponsors, or others to take actions that would avoid the termination of affordability. However, the requirements with respect to any Unit shall be revived according to their original terms, if during the original Affordability Period, the owner of record before the foreclosure or other transfer, or any entity that includes the former owner of those with whom the former owner has or had formally, family or business ties, obtains an ownership interest in the Project or the Property, the Affordability Period shall be revived according to its original terms.
6.7 Benefit. This Regulatory Agreement shall run with and bind the Property for a term of 55 years from the date of recordation of the Notice of Completion. The failure or delay at any time of City and/or any other person entitled to enforce this Agreement shall in no event be deemed a waiver of the same, or of the right to enforce the same at any time or from time to time thereafter, or an estoppel against the enforcement thereof.
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 Borrower shall cause this Regulatory Agreement, and all amendments and supplements to it, to be recorded in the Official Records of the County of Modesto.
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 the County of Modesto.
6.13 Notices. Any notice requirement set forth herein will be deemed to be satisfied three 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 10th Street
Modesto, CA 95354
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9 60208455.3
Attention: City Manager
Borrower: El Capitan 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 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.
6.15 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.
6.16 Headings. The headings of the articles, sections, and paragraphs used in this Declaration are for convenience only and shall not be read or construed to affect the meaning or construction of any provision.
[SIGNATURE PAGES TO FOLLOW]
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Signature page
El Capitan Regulatory Agreement
60208455.1
WHEREAS, this Regulatory Agreement has been entered into by the undersigned as of the date first written above.
CITY OF MODESTO
a California municipal corporation
By:
Name:__________________________
Title: __________________________
APPROVED AS TO FORM:
City Attorney
By:
Name:___________________________
Title: ___________________________
ATTEST:
City Clerk
By:
Name:___________________________
Title: ___________________________
[Signatures Continued on Following Page]
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Signature page
El Capitan Regulatory Agreement
60208455.1
BORROWER
EL CAPITAN HOMEKEY LP,
a California limited partnership
By: HOM El Capitan Motel LLC, a Delaware limited liability company, Its Managing General Partner
By: Housing on Merit, a California nonprofit public benefit corporation, Its Sole Member
By: _______________________________________
Jaymie Beckett, Executive Director
By: UP El Capitan Homekey, LLC, a California limited liability company, Its Co-General Partner
By: UP Holdings, LLC, an Illinois limited liability company, dba UP Holdings California, LLC, its Sole Member
By: _________________________
Cullen J. Davis
Manager
By: RHCB El Capitan, LLC, a California limited liability company, its Co-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
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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 )
On ________________, before me,
(insert name and title of the officer)
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.
Signature (Seal)
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60208455.1
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 )
On ________________, before me,
(insert name and title of the officer)
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.
Signature (Seal)
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60208455.1
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 )
On ________________, before me,
(insert name and title of the officer)
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.
Signature (Seal)
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60208455.1
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 )
On ________________, before me,
(insert name and title of the officer)
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.
Signature (Seal)
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A-1
60208455.1
EXHIBIT A
Legal Description
The land referred to is situated in the County of Stanislaus, City of Modesto, State of California, and is described as follows:
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B-1
60208455.1
EXHIBIT B
Rental Restrictions
(attached)
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B-2
60208455.1
Number of
Bedrooms
Number of
Homekey+
Funded
Units
AMI% or
Manager
Unit
Homekey+
Population
Restriction to Subset
of Homekey+
Population
All foregoing
subpopulations must
include Behavioral
Health Challenge
0 Bedroom/
Studio
12 30% Homekey +
Target
Population
People Experiencing
Homelessness
0 Bedroom/
Studio
12 30% Homekey +
Target
Population
People At-Risk of
Homelessness
0 Bedroom/
Studio
12 30% Veterans with a
Behavioral
Health Challenge
Veterans Experiencing
Homelessness
0 Bedroom/
Studio
12 30% Veterans with a
Behavioral
Health Challenge
Veterans At-Risk of
Homelessness
0 Bedroom/
Studio
1 Manager Unit N/A N/A
Veterans Units
Total
24 Homekey+
General
Population
Total
24 Youth Units
Total
0 Manager Units
Total
1 Total Homekey+
Units
49 #21..
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5481136.1
60211642.1
1 CITY LOAN AGREEMENT
(City of Modesto CDBG Loan – El Capitan)
This Loan Agreement (this “Agreement”) is entered into as of ____________________, 2025, by and between the City of Modesto, a California charter city (the “City”) and El Capitan Homekey, LP, a California limited partnership (“Recipient”). City and Recipient are collectively referred to in this Agreement as the “Parties.”
RECITALS
A. Defined terms used but not defined in these recitals have the meaning ascribed to them in Article 1 of this Agreement.
B. The City has received funds from HUD under Title I of the Housing and Community Development Act of 1974, as amended (the “CDBG Funds”). The CDBG Funds must be used by the City in accordance with 24 CFR 570 et seq. and the CDBG Regulations.
C. Recipient owns certain real property located at 1121 Needham Street, Modesto, California, also known as Stanislaus County Assessor’s Parcel Numbers 109-008-004-000, as more particularly described and depicted in Exhibit A, attached hereto, and incorporated herein (the “Property”).
D. The Recipient intends to renovate an existing motel on the Property in order to develop a residential development consisting of forty-nine (49) housing units, of which twentyfour (24) units will be restricted to occupancy by individuals experiencing homelessness or at risk of homelessness who are clients of the Stanislaus County Behavioral Health and Recovery Services, and twenty-four (24) units will be restricted to occupancy veterans experiencing homelessness or at risk of homelessness, and one (1) Mangers Unit (the “Project”).
E. As a condition of approval for the Development, the Recipient is required to construct certain offsite improvements to City of Modesto standards (the “Off-Site Improvements”). The Off-Site Improvements are further described in the City of Modesto Encroachment Permit, and incorporated herein. As used herein, the term Project shall include the On-Site Improvements.
F. City wishes to give to Recipient a loan of Three Million Seven Thousand, One Hundred and Sixty-Three Dollars ($3,007,163.00) (the “Loan”) of CDBG funds to help finance the rehabilitation of the Property and improvements thereon required for the Project, G. Concurrently herewith, Recipient shall execute: i) a Secured Promissory Note evidencing Recipient ’s obligation to repay the Loan (the “Note”), and ii) a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing which shall secured performance of the Note (the “Deed of Trust”). which shall provide City with a security interest in the Property and the Project, and (iii) Recipient and City shall execute a Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”), which shall be recorded against the Property, and which shall require Project rents to be affordable to low households for #21..
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5481136.1
60211642.1
2 a term of not less than 55 years. The Note, the Regulatory Agreement and Deed of Trust are collectively hereinafter referred to as the “Loan Documents.” H. The Loan is being made to finance construction costs associated with the off-site improvements for the Project in order to help achieve financial feasibility for the Project and to increase the supply of affordable housing in the City.
I. 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).
J. In accordance with the National Environmental Policy Act of 1969, as amended (42 USC 4321-4347) (“NEPA”), the City has completed and approved all applicable environmental review for acquisition of the Property under this Agreement. Additional environmental review is still necessary for construction of the Project.
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
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions
The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in this Agreement, unless otherwise provided:
“Agreement” means this Loan Agreement.
“Approved Project Budget” means the proforma development budget, including sources and uses of funds, as approved by the City, and attached hereto and incorporated herein as Exhibit C.
“Approved Financing” means all of the funds acquired by the Recipient and approved by the City for the purpose of financing the acquisition of the Property and development of the project, in addition to the Loan from the City and other Loans which are secured by the Project as of the date of this Agreement.
“Bid Package” means the package of documents Recipient's general contractor is required to distribute to potential bidders as part of the process of selecting subcontractors for the construction of the Project. The Bid Package is to include the following: (i) an invitation to bid, (ii) copy of the proposed construction contract; and (iii) all Construction Plans (as defined in Section 3.2 below). “Recipient” has the meaning set forth in the first paragraph of this Agreement. #21..
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5481136.1
60211642.1
3 “CDBG” means the Community Project Block Loan program under Title I of the Housing and Community Project Act of 1974 (42 U.S.C. 5301 et. seq.), as amended. “CDBG Funds” has the meaning set forth in Recital B.
“CDBG Regulations” means the statutory and regulatory provisions that govern the CDBG program under Title I of the Housing and Community Project Act of 1974 (42 U.S.C. 5301 et. seq.), as amended including 24 C.F.R. Part 570 et seq. “City” means the City of Modesto, a California Charter City. “City's Share of Residual Receipts" means the City's Pro Rata Share (as defined below) of fifty percent (50%) of Residual Receipts (the 50% being the "Lenders' Share of Residual Receipts") which shall be determined at the close of permanent financing, or any time any determination thereof is needed to be made. The Pro Rata Share shall be determined by calculating the percentage resulting from dividing the amount of the CDBG Funds disbursed to the Recipient in accordance with this Agreement by the aggregate sum of the funds disbursed to the Recipient under the Loan and the Approved Financing subordinate loans, in accordance with the applicable agreements. The Recipient shall be entitled to the other 50% share of the Residual Receipts ("Developer's Share of Residual Receipts").
“Default” has the meaning set forth in Section 6.1 below. “Default Rate” has the meaning set forth in Section 6.2(c). “Hazardous Materials” has the meaning set forth in Section 4.9 below. “Hazardous Materials Claim” has the meaning set forth in Section 4.9 below. “Hazardous Materials Law” has the meaning set forth in Section 4.9 below. “HUD” means the U.S. Department of Housing and Urban Development. “Loan” means the City's Loan to Recipient pursuant to this Agreement in the total principal amount of Three Million Seven Thousand, One Hundred and Sixty-Three Dollars ($3,007,163.00) consisting of CDBG Funds.
“Loan Documents” has the meaning set forth in Recital H “Parties” mean the City and Recipient.
“Project” has the meaning set forth in Recital E.
“Property” has the meaning set forth in Recital C.
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4 “Term” means the term of this Agreement, which commences as of the date of this Agreement and shall expire fifty-five (55) years from the date a certificate of occupancy is issued for the Project, but in no event later than December 31, 2082. “Transfer” has the meaning set forth in Section 4.15 below.
Section 1.2 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: Federal Award Identification Information
ARTICLE 2
LOAN PROVISIONS
Section 2.1 Loan.
2.1.1 Upon satisfaction of the conditions set forth in Section 2.5 and Section 2.6 of this Agreement, the City shall lend to the Recipient CDBG Funds in the amount not to exceed Three Million, Seven Thousand, One Hundred and Sixty-Three Dollars ($3,007,163.00) (the “Loan”) for the purposes set forth in Section 2.3. The obligation to repay the Loan shall be evidenced by the Note, in the form to be provided by the City
2.1.2 Federal Award Identification. Federal award identification information regarding the funding provided to Recipient by this Agreement, as required by 24 CFR 200.331, is included in Exhibit D, attached hereto and incorporated herein.
Section 2.2 Interest.
2.2.1 Subject to the provisions of subsection 2.2.2 below, the outstanding principal balance of the Loan shall bear simple interest at a rate of three percent (3%) per year.
2.2.2. In the event of a Default, interest on the Loan shall begin to accrue, as of the date of Default, and continuing until such time as 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.
Section 2.3 Use of Loan Funds.
The Recipient shall use the proceeds of the Loan solely to finance the acquisition and construction of Off and On - Site Improvement’s, as described in the City of Modesto #21..
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5 Encroachment Permit. Recipient shall not use the Loan proceeds for any other purposes without the prior written consent of the City.
Section 2.4 Security.
The Recipient shall secure its obligations to repay the Loan, as evidenced by the Note, by executing the Deed of Trust and recording the Deed of Trust against the Property at the Close of Escrow.
Section 2.5 Subordination.
Any agreement by the City to subordinate the Loan Documents to an encumbrance securing and/or evidencing Approved Financing (each such approved Final Financing Plan, a "Senior Lien"), will be subject to the satisfaction of each of the following conditions, as reasonably determined by the City:
2.5.1 All of the proceeds of the proposed Senior Lien, less any transaction costs, must be used for acquisition of the Property or to provide construction and/or permanent financing for the Development.
2.5.2 The proposed lender (each, a "Senior Lender") must be a state or federally chartered financial institution, a nonprofit corporation or a public entity that is not affiliated with the Recipient or any of the Recipient 's affiliates, other than as a depositor or a lender.
2.5.3 The Recipient must demonstrate to the City's reasonable satisfaction that subordination of the Deed of Trust is necessary to secure adequate construction and/or permanent financing to ensure the viability of the Development, including the operation of the Development as affordable housing, as required by the Loan Documents. To satisfy this requirement, the Recipient must provide to the City, in addition to any other information reasonably required by the City, evidence demonstrating that the proposed amount of the Senior Lien is necessary to provide adequate construction and/or permanent financing to ensure the viability of the Development, and adequate financing for the Development would not be available without the proposed subordination.
2.5.4 The subordination agreements must provide the City with adequate rights to cure any defaults by the Recipient, including: (1) providing the City or its successor with copies of any notices of default at substantially the same time and in the same manner as provided to the Recipient; and (2) providing the City with a cure period of at least sixty (60) days to cure any default.
2.5.5 The subordination(s) described in this Section may be effective only during the original term of the Senior Lien and any extension of its term that is approved in writing by the City, which approval shall not unreasonably be withheld.
2.5.6 No subordination may limit the effect of the Deed of Trust before a foreclosure, nor require consent of the holder of the Senior Lien to exercise any remedies by the City under the Loan Documents.
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6 2.5.7 Upon a determination by the City Manager that the conditions in this Section have been satisfied, the City Manager will be authorized to execute the approved subordination agreement without the necessity of any further action or approval.
2.5.8 In the event there is a foreclosure of the Property, the Regulatory Agreement shall be revived according to its original terms if, during the original Regulatory Agreement 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 the Property.
Section 2.6 Conditions Precedent to Disbursement of Loan Funds.
The maximum amount of funds to be disbursed pursuant to this Section 2.6 shall not exceed the amount of the Loan. The City shall not be obligated to make any disbursements of Loan funds for acquisition of the Property or take any other action under the Loan Documents unless the following conditions precedent have been and continue to be satisfied prior to each such disbursement of Loan funds:
2.6.1 There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement;
2.6.2 Recipient has delivered to the City a copy of a corporate resolution authorizing Recipient's execution of the Agreement;
2.6.3 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;
2.6.4 The Recipient has furnished the City with evidence of the insurance coverage meeting the requirements of Section 4.16 below;
2.6.5 Recipient has caused to be executed and delivered to the City the Agreement and any other instruments, and policies required under the Loan Documents;
2.6.6 The City has completed and approved all environmental reviews under NEPA, as necessary for the construction of the Project, and Recipient has provided the City evidence of compliance with all approved NEPA requirements and mitigation measures required by the NEPA environmental documentation;
2.6.7 The City has reasonably determined that the undisbursed proceeds of the Loan, 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. This requirement shall not be a conditional precedent for the disbursement of Loan Funds used for acquisition of the Property.
2.6.8 The City has received a written draw request from the Recipient, including certification that the condition set forth in Section 2.6 continues to be satisfied, and #21..
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7 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 2.7 Repayment of Loan
2.7.1 Annual Payments. Commencing on the later of: (i) June 1 following the Completion Date, or (ii) June 1, 2027, and on June 1 of each year thereafter, through the end of the Term, the Recipient shall make repayments of the 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 Recipient 's report of Residual Receipts (including an independent auditor's report regarding the auditor's review of Annual Operating Expenses). The Recipient shall provide the City with any documentation reasonably requested by the City to substantiate the Recipient 's determination of Residual Receipts.
2.7.2 Due in Full. All principal and accrued interest on the 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.
2.7.3 Right to Prepay. The Recipient shall have the right to prepay the Loan at any time without premium or penalty. However, the Regulatory Agreement shall remain in effect for the entire Term regardless of any prepayment.
Section 2.8 Reports and Accounting of Residual Receipts.
2.8.1 Audited Financial Statement. In connection with the annual payments required pursuant to Section 2.8, within one hundred eighty (180) days of the end of the Recipient 's fiscal year, the Recipient 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.
2.8.2 Books and Records. The Recipient 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 Recipient 's calculation of Residual Receipts.
Books, records and accounts relating to the 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 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 or HUD at reasonable intervals upon reasonable notice during normal business hours. Copies of all tax returns and other reports that the Recipient 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 #21..
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8 books, records and accounts of the Recipient are kept. The Recipient 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.
2.8.3 Audits. The receipt by the City of any statement pursuant to this section or any payment by the Recipient 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 Recipient 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 Recipient. 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 Recipient '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 Loan repayment as a result of said understatement, then the Recipient shall pay, in addition to the interest charges referenced hereinabove, all of the City's reasonable costs and expenses connected with any audit or review of the Recipient 's accounts and records.
Section 2.9 Nonrecourse.
2.9.1 Except as provided below, upon recordation of the Deed of Trust against the Property, neither the Recipient nor any of its partners shall have no direct or indirect personal liability for payment of the principal of, or interest on, the Loan. Following recordation of the Deed of Trust against the Property, 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 Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall: (i) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the City thereunder; (ii) 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; or (iii) be deemed in any way to limit the rights of the City to obtain specific performance by the Recipient of its covenants under the Loan Documents, other than the covenants to pay the City principal and interest due under the Note.
2.9.2 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 Recipient of its obligation to indemnify the City under this Agreement, or liability for: (i) fraud or willful misrepresentation by the Recipient ; (ii) the failure to pay taxes, assessments or other #21..
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9 charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by the Recipient other than in the ordinary course of business; and/or (iv) the misappropriation of any proceeds by the Recipient 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.
Section 2.10 Final Financing Plan.
As set forth in the attached Exhibit B, Developer has provided City with a preliminary 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. As a condition precedent to the first draw of Loan Funds to be used for a purpose other than acquisition of the Property, the Developer shall have submitted and received approval from the City for any updates to 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 Loan 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 2.11 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 HOME Loan. 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 Loan.
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.
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10 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. The construction contract shall include all applicable CDBG requirements set forth in Section 4.8 below.
Section 3.4 Plans and Specifications.
No later than six (6) months from the Effective Date of this Agreement, the Recipient shall submit to the City the plans and specifications for the construction of the Development, including all construction documentation upon which the Recipient and the Recipient '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 after approval by the City, the "Approved Plans and Specifications").
The Recipient 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. Once approved by the City, the Approved Plans and Specification may not be changed or altered without the City’s approval. #21..
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11 Section 3.5 Commencement of Construction.
Recipient shall cause the commencement of construction of the Project, including the Off-Site Improvements, no later than June 1, 2027, or such later date that the City may approve.
Section 3.6 Completion of Construction.
Recipient shall diligently prosecute construction of the Project to completion and shall cause the completion of the construction of the Project, including the Off-Site Improvements, no later than twelve (12) months from construction commencement or such later date that the City may approve.
Section 3.7 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 hereafter, including without limitation and to the extent applicable, the prevailing wage provisions of the federal Davis-Bacon Act and implementing rules and regulations and state prevailing wages pursuant to Labor Code Section 1770 et seq., and the regulations pursuant thereto, as further set forth in subsection (c) below; (ii) the property standards set out in 24 CFR 5.701 et seq., and 24 CFR
92.251; and (iii) 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 the City for the procurement and maintenance thereof, as may be required of Recipient and all entities engaged in work on the Project.
Section 3.8 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 3.9 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, #21..
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12 or disability in the hiring, firing, promoting, or demoting of any person engaged in the construction work.
Section 3.10 Minority and Women-Owned Contractors.
Recipient will use its best efforts to afford minority-owned and women-owned business enterprises the maximum practicable opportunity to participate in the construction of the Project.
Recipient shall, at a minimum, notify applicable minority-owned and women-owned business firms located in Stanislaus County of bid opportunities for the construction of the Project.
Documentation of such notifications shall be maintained by Recipient and available to the City as requested.
Section 3.11 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 3.12 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.
Section 3.13 Mechanics Liens, Stop Notices, and Notices of Completion.
If any claim of lien is filed against the Property or a stop notice affecting the Loan 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 #21..
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13 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 3.14 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
LOAN 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 Annual Operating Budget.
At least one hundred fifty (150) days prior to the end of each year of the Term, Recipient shall provide to the City an annual budget for the operation of the Project. 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, Recipient shall submit a new or corrected budget within thirty (30) calendar days of notification of the City's rejection and the reasons therefor. 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 4.3 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 HUD in connection with Recipient's use of the Loan funds.
Section 4.4 Records.
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14 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 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 the HUD, 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 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 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 Loan funds. Records must be kept accurate and current and in such a form as to allow the City to comply with the recordkeeping requirements contained in 24 CFR 92.506. Such records shall include but not be limited to:
(i) Records providing a full description of the activities undertaken with the use of the Loan funds;
(ii) Records demonstrating the eligibility of activities under CDBG Regulations set forth in 24 CFR 570 et seq. and that use of the CDBG Funds meets at least one of the national objectives of the CDBG program set forth in 24 CFR 570.208; (iii) Records demonstrating compliance with the HUD property standards and lead-based paint requirements;
(iv) Records demonstrating compliance with the income requirements for occupants;
(v) Records documenting compliance with the fair housing, equal opportunity, and affirmative fair marketing requirements;
(vi) Financial records as required by 24 C.F.R. 570.502, and 2 CFR part 200; (vii) 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; #21..
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15 (viii) Records demonstrating compliance with Section 3, and labor requirements, including certified payrolls from the Recipient's general contractor evidencing that applicable prevailing wages have been paid; and
(ix) Financial records as required by 24 C.F.R. Section 92.505, and 2 C.F.R.
Part 200; and
(x) Records demonstrating compliance with 24 C.F.R. 8.20.
The City shall notify Recipient of any records it deems insufficient. Recipient 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 Recipient shall begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
Section 4.5 City Audits.
Each year, Recipient shall provide the City with a copy of Recipient's annual audit, which shall include information on all of Recipient's activities and not just those pertaining to the Project. In addition, the City or any designated agent or employee of the City at any time shall be entitled to audit all of Recipient's books, records, and accounts pertaining thereto. Such audit shall be conducted during normal business hours at the principal place of business of Recipient 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 Recipient. The Recipient shall also follow audit requirements of the Single Audit Act and 2 CFR part 200, to the extent required by applicable law and HUD regulations.
Section 4.6 CDBG Requirements.
Recipient shall comply with all applicable laws and regulations governing the use of the CDBG funds, as set forth in 24 CFR Part 570. In the event of any conflict between this Agreement and applicable laws and regulations governing the use of the Loan funds, the applicable laws and regulations shall govern.
The laws and regulations governing the use of the Loan funds include (but are not limited to) the following:
(1) Environmental and Historic Preservation. Section 104 (f) of the Housing and Community Project Act of 1974 and 24 CFR Part 58, which prescribe procedures for compliance with the National Environmental Policy Act of 1969 (42 USC 4321-4361), and the additional laws and authorities listed at 24 CFR 58.5.
(2) Applicability of 2 CFR part 200. The applicable policies and requirements of 2 CFR part 200.
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16 (3) Debarred, Suspended or Ineligible Contractors. The prohibition on the use of debarred, suspended, or ineligible contractors set forth in 24 CFR Part 24. (4) Civil Rights, Housing and Community Project, and Age Discrimination Acts. The Fair Housing Act (42 USC 3601 et seq.) and implementing regulations at 24 CFR 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 Project Act of 1974 as amended; Section 504 of the Rehabilitation Act of 1973 (29 USC 794, et seq.); the Age Discrimination Act of 1975 (42 USC 6101, et seq.); Executive Order 11063 as amended by Executive Order 12259 and implementing regulations at 24 CFR Part 107; ; Executive Order 11625 as amended by Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by Executive Order 12608. (5) Lead-Based Paint. The requirement of the Lead-Based Paint Poisoning Prevention Act, as amended (42 USC 4821 et seq.), the Residential Lead-Based Paint Hazard Reduction Act (42 USC 4851 et seq.), and implementing regulations at 24 CFR Part 35. (6) Relocation. The requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC 4601, et seq.) and implementing regulations at 49 CFR Part 24; Section 104(d) of the Housing and Community Project Act of 1974 and implementing regulations at 24 CFR Part 42; and 24 CFR 92.353; and California Government Code Section 7260 et seq. and implementing regulations at 25 California Code of Regulations Sections 6000 et seq. If and to the extent that construction of the Project results in the permanent or temporary displacement of residential occupants, homeowners, or businesses, then Recipient shall comply with all applicable local, state, and federal statutes and regulations with respect to relocation planning, advisory assistance, and payment of monetary benefits.
Recipient shall prepare and submit a relocation plan to the City for approval. Recipient 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 Recipient shall indemnify, defend (with counsel reasonably chosen by the City), and hold harmless the City against all claims which arise out of relocation obligations to residential occupants, homeowners, or businesses permanently or temporarily displaced by the Project. (7) 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, Section 504 of the Rehabilitation Act of 1973 (29 USC 794), 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 USC 4151-4157) and the applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of 1990 (42 USC 12131 et seq.), and federal regulations issued pursuant thereto. (8) Clean Air and Water Acts. The Clean Air Act, as amended, 42 USC 7401 et seq., the Federal Water Pollution Control Act, as amended, 33 USC 1251 et seq., and the regulations of the Environmental Protection Agency with respect thereto, at 40 CFR Part 1500, as amended from time to time.
(9) Uniform Administrative Requirements. The requirements of 24 CFR
92.505 and 24 CFR Part 570.502 regarding cost and auditing requirements. #21..
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17 (10) Training Opportunities. The requirements of Section 3 of the Housing and Urban Project Act of 1968, as amended, 12 USC 1701u (“Section 3”), 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. Recipient agrees to include the following language in all subcontracts executed under this Agreement:
a) The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Project Act of 1968, as amended, 12 USC 1701u. 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, shall, to the greatest extent feasible, be directed to lowand very low-income persons, particularly persons who are recipients of HUD assistance for housing.
b) The parties to this contract agree to comply with HUD's regulations in 24 CFR 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 Part 135 regulations.
c) 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.
d) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR 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 CFR 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 CFR Part 135.
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18 e) 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 CFR Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR Part 135. f) Noncompliance with HUD's regulations in 24 CFR Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts. g) With respect to work performed in connection with Section 3 covered Indian housing assistance, section 7(b) of the Indian SelfDetermination and Education Assistance Act (25 USC 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indianowned 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).
(11) Labor Standards. The applicable labor requirements set forth in 24 CFR Section 570.603, as such require compliance with the prevailing wage requirements of the DavisBacon Act and implementing rules and regulations (40 USC 3141-3148); the Copeland “AntiKickback” Act (40 USC 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 USC 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 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. (12) Drug Free Workplace. The requirements of the Drug Free Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 CFR Part 24. (13) Anti-Lobbying; Disclosure Requirements. The disclosure requirements and prohibitions of 31 USC 1352 and implementing regulations at 24 CFR Part 87. (14) Historic Preservation. The Recipient shall comply with the historic preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 USC Section 470) and the procedures set forth in 36 CFR Part 800. If archeological, cultural, or historic period resources are discovered during construction, all construction work must come to a halt and Recipient shall immediately notify the City. #21..
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19 Recipient 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.
(15) Faith Based Activities. If applicable, the 24 CFR Section 570.200(j) regarding eligible use of funds by organizations that are religious or faith-based. (16) Flood Disaster Protection. This Agreement is subject to the requirements of the Flood Disaster Protection Act of 1973 (P.L. 93-234). No portion of the assistance provided under this Agreement is approved for acquisition or construction purposes as defined under Section 3(a) of said Act, for use in an area identified by HUD as having special flood hazards which is located in a community not then in compliance with the requirements for participation in the national flood insurance program pursuant to Section 201(d) of said 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 shall be subject to the mandatory purchase of flood insurance requirements of Section 102(a) of said Act. Any contract or Agreement for the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Agreement shall contain certain provisions. These provisions will apply if such land 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 USC 4001 et seq. These provisions shall obligate the transferee and its successors or assigns to obtain and maintain, during the ownership of such land, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under -Section 102(s) of the Flood Disaster Protection Act of 1973. Such provisions shall be required notwithstanding the fact that the construction on such land is not itself funded with assistance provided under this Agreement. (17) Program Income. The Recipient shall report on a monthly basis, all program income as defined at 24 CFR 570.500(a) generated by activities carried out with Loan funds made available under this contract. The use of program income by the Recipient shall comply with the requirements set forth at 24 CFR 570.504. By way of further limitations, the Recipient may use such income during the contract period for activities permitted under this contract, which shall be CDBG-Eligible activities related to the operation of the Project as mutually agreed upon in writing by the City and Recipient, and shall reduce requests for additional funds by the amount of any such program income balance on hand. All unused program income shall be returned to the Loanee at the end of the contract period. Any interest earned on cash advances from the U.S. Treasury is not program income and shall be remitted promptly to the Loanee. (18) Reversion of Assets. Upon expiration of this Agreement, Recipient shall transfer to City any unused Loan funds on hand and any accounts receivable attributable to the use of Loan Funds in accordance with 24 CFR § 570.503(b)(7). (19) Violence Against Women Act. Recipient and its officers, employees, and agents shall not penalize any tenant, resident, occupant, or guest at the Project based on their requests for law enforcement or emergency assistance, or based on criminal activity of which #21..
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20 they are a victim or otherwise not at fault under applicable federal, state, and local laws, statues, ordinances, and policies. Prohibited penalties include those specified in 34 USC § 12495, (20) Build America, Buy America. To the extent applicable, all iron and steel, construction materials, and manufactured products used in the Project shall be produced in the United States, in accordance with the applicable requirements of the Infrastructure Investment and Jobs Act, Pub. L. 117-58 and 2 CFR 184.,
(21) 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 4.7 Hazardous Materials.
4.7.1 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.
4.7.2 Recipient shall immediately advise the City in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Recipient or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, (“Hazardous Materials Law”); (ii) all claims made or threatened by any third party against Recipient or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as “Hazardous Materials Claims”); and (iii) Recipient'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.
4.7.3 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.
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21 4.7.4 Recipient shall indemnify and hold harmless the City and its council members, 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: (i) all foreseeable consequential damages; (ii) 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 (iii) all reasonable costs and expenses incurred by the City in connection with clauses (i) and (ii), 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: (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 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.
4.7.5 Without the City's prior written consent, which shall not be unreasonably withheld, Recipient shall 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 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 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 the City's consent before taking such action, provided that in such event Recipient 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 (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Recipient will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Recipient 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 (iv) the action has been agreed to by the City.
4.7.6 Recipient hereby acknowledges and agrees that (i) this Section is intended as the City's written request for information (and Recipient's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) 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 Property is intended by the Parties to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736.
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22 4.7.7 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 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 Property and (2) exercise (i) the rights and remedies of an unsecured creditor, including reduction of its claim against the Recipient to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining the City's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Recipient 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 Property and the Recipient knew or 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 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 Property is environmentally impaired, plus interest thereon at the lesser of ten percent (10%) and the maximum rate permitted by law, until paid and shall be due and payable to the City upon its demand made at any time following the conclusion of such action.
Section 4.8 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 necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property.
Section 4.9 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. #21..
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23 Section 4.10 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 and were such would not be covered by insurance.
Section 4.11 Operation of Project
Promptly after completion of construction, the Recipient shall operate the Project as large family housing at or below eighty percent (80%) of the area median income for Stanislaus County, described in the project summary attached hereto as Exhibit B Promptly after completion of construction, the Recipient shall operate the Project in accordance with the requirements set forth in this Agreement.
Section 4.12 Nondiscrimination.
Recipient shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Recipient covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Recipient or any person claiming under or through Recipient 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, of, or for the Property or part thereof. Recipient shall include such provision in all deeds, leases, contracts and other instruments executed by Recipient, and shall enforce the same diligently and in good faith. The foregoing covenant shall run with the land. If and for so long as the Project is assisted with Section 8 Project-based vouchers, the Recipient may apply such tenant selection standards as are permitted under the Section 8 Project-based voucher program regulations.
Section 4.13 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.
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24 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 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.
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. 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.
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 4.14 Insurance Requirements.
The Recipient shall maintain the following insurance coverage throughout the Term of the Loan:
4.13.1 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.
4.13.2 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.
4.13.3 Comprehensive Automobile Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily #21..
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25 Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable.
4.13.4 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.
4.13.5 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.
4.13.6 Commercial crime insurance covering all officers and employees, for loss of Loan proceeds caused by dishonesty, in an amount not less than the amount of the Loan, naming the City as a Loss Payee, as its interests may appear.
4.13.7 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.
4.13.8 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.
4.13.9 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.
4.13.10 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. #21..
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26 Section 4.15 Performance and Payment Bonds.
As a condition precedent to the first Construction Component draw request under the Loan, the Developer shall deliver to the City copies 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 4.16 Anti-Lobbying Certification.
The Recipient certifies, to the best of Recipient's knowledge or belief, that:
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 Loan, the making of any Federal Loan or loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, Loan, loan, or cooperative agreement; 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 awarding of any Federal contract, Loan, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to Report Lobbying, in accordance with its instructions.
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, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less #21..
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27 than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars ($100,000) for such failure.
Section 4.17 Payment of Other Indebtedness; Notice of Defaults.
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 4.18 Prevailing Wage Requirements. To the extent, and if, required by applicable federal and 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.
Section 4.19 Indemnification. Recipient shall indemnify, defend (with counsel approved by City) and hold the City, and its respective elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages or the requirement of competitive bidding in the construction of the Project, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Recipient related to this Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that City does not and shall not waive any rights against Recipient which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Recipient ’s deposit with City of any of the insurance policies described in this Agreement. The provisions of this Section 4.18 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project.
Recipient ’s indemnification obligations under this Section 4.18 shall not apply to any Claim which arises as a result of an Indemnitee’s gross negligence or willful misconduct.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF RECIPIENT
Section 5.1 Representations and Warranties.
Recipient hereby represents and warrants to the City as follows:
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28 5.1.1 Organization. Recipient is a duly formed California limited 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 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 Compliance With Laws; Consents and Approvals. The construction of the Project 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.
5.1.7 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 #21..
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29 determined adversely to Recipient, materially affect Recipient's ability to repay the Loan or impair the security to be given to the City pursuant hereto.
5.1.8 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.
5.1.9 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.
5.1.10 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 Loan Document to which it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability against Recipient of any Loan 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 Failure to Construct. Failure of Recipient to commence and complete construction of the Project within the times set forth in Article 3 above, subject to Force Majeure;
6.1.2 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 cured within ninety (90) days; provided, however, that if a #21..
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30 different period or notice requirement is specified under any other section of this Article 6, the specific provisions shall control.
6.1.3 Default Under Other Loans. 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.
6.1.4 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. .
6.1.5 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.
6.1.6 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.
6.1.7 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 Loan 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.
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31 6.1.8 Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Project.
6.1.9 Unauthorized Transfer. Any Transfer other than as permitted by Section 4.14.
6.1.10 Representation or Warranty Incorrect. Any Recipient representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the City in connection with this Agreement, proving to have been incorrect in any material respect when made. After issuance of the certificates of occupancy for the Project, Default may be declared under this subsection only if the failure of representation or warranty also has a material adverse effect on the operation of the Project.
Section 6.2 Remedies.
6.2.1 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 Loan 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:
6.2.2 Repayment. The City shall have the right to cause the Recipient to repay, upon written demand, the Loan within a reasonable period of time, as determined by the City in its sole discretion. The City may proceed to enforce repayment of the Loan and to exercise any or all rights afforded to the City.
6.2.3 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.
6.2.4 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 loan other than the Loan. 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 Right of Contest.
Recipient 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 be prosecuted diligently and in a manner unprejudicial to the City or the rights of the City hereunder.
Section 6.4 Remedies Cumulative.
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32 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. 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.
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, and Recipient 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. Recipient 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 Project, Recipient 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. Recipient shall be 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 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. The City Manager is authorized to execute on behalf of the City amendments to this Agreement as long as any material change in the amount or terms of this Agreement is approved by the City Council, or in the event the amounts or terms of financing provided by other parties for the Project is revised, requiring conforming amendments to this Agreement.
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33 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 Term.
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.
Except for approved eligible administrative or personnel costs, no person described in Section 7.8(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. Recipient shall exercise due diligence to ensure that the prohibition in this Section 7.8(a) is followed.
The conflict of interest provisions of Section 7.8(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.
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 #21..
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34 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.
The Recipient shall comply with the conflict of interest provisions set forth in 24 CFR Section 570.611.
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:
City: City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Director
Recipient: El Capitan Homekey, LP
6083 North Figarden Drive #656
Fresno, CA 93722
Attn: Manager _______
Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 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. This Agreement is intended to run with the land and shall bind Recipient and its successors and assigns in the Property and the Project for the entire Term, and the benefit hereof shall inure to the benefit of the City and its successors and assigns.
Section 7.12 Attorneys' Fees.
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35 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 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 7.14 Force Majeure.
In addition to specific provisions of this Agreement, performance by either Party shall not be deemed to be in Default where delays or defaults are due to war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of transportation, or court order. An extension of time for any cause will be deemed Loaned if notice by the Party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (10) days of receipt of the notice. In no event shall the City be required to agree to cumulative delays in excess of one hundred eighty (180) days.
Section 7.15 City Approval.
The City has authorized the City Manager to execute this Agreement and deliver such approvals or consents as are required by this Agreement, and to execute estoppel certificates concerning the status of the Loan and the existence of Recipient defaults under the this Agreement. 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 shall not unreasonably delay in reviewing and approving or disapproving any proposal by Recipient made in connection with this Agreement.
Section 7.16 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 Recipient or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time Loaned to Recipient 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 Recipient 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 7.17 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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36 Section 7.18 Entire Understanding of the Parties
This Agreement constitutes the entire understanding and agreement of the Parties with respect to the Loan.
Section 7.19 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.
[Signature Page Follows]
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37 WHEREAS, this Agreement has been entered into by the undersigned as of the date first above written.
El Capitan Homekey LP, a California limited partnership By: HOM El Capitan Motel LLC, a Delaware limited liability company, Its Managing General Partner
By: Housing on Merit, a California nonprofit public benefit corporation, Its Sole Member By: _______________________________________
Jaymie Beckett, Executive Director
By: UP El Capitan Homekey, LLC,
a California limited liability company, Its Co-General Partner By: UP Holdings, LLC, an Illinois limited liability company, dba UP Holdings California, LLC, its Sole Member
By: _______________________________________
Cullen J. Davis, Manager
By: RHCB El Capitan, LLC,
a California limited liability company, its Co-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
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38 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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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Stanislaus, City of Modesto, State of California, and is described as follows:
PARCEL NO. 1:
Lots 11, 12, 13, 14, 15, 16, 17 and 18 in Block 506 of the CITY OF MODESTO, according to the Official Map thereof, filed in the Office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps.
PARCEL NO. 2:The Easterly 15 feet of Nellie Avenue abandoned as shown by the Map entitled CITY OF MODESTO, according to the Official Map thereof, filed in the office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps, lying South of the Northerly line of Lot 11 extended Westerly in Block 506 of the City of Modesto, and lying North of the South line of Lot 18 extended Westerly of said Block 506.
EXCEPTING FROM Parcels 1 and 2 thereof, all that portion conveyed to the City of Modesto by Deed recorded July 26, 1974 in Book 2643, Official Records, Page 578, Instrument No. 3576, described as follows:All that portion of Section 29, Township 3 South, Range 9 East, Mount Diablo Base and Meridian, being a portion of Lots 13, 14, 15, 16, 17 and 18, Block 506 and the Easterly 15 feet of Nellie Avenue abandoned as said Nellie Avenue is shown by the Map entitled City of Modesto, according to the Official Map thereof, filed in the office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps, described as follows: BEGINNING at the Southeastern corner of said Lot 13; thence along the Southern line of said Lots 13, 14, 15, 16, 17 and 18 and the Nellie Avenue abandonment, North 88 degrees 48' 30" West, 165.01 feet, to the Southwestern corner of the Nellie Avenue Abandonment; thence along the Western line of the Nellie Avenue abandonment, North 00 degrees 40' 30" West,
12.51 feet, to a line which is parallel with and 12.50 feet, measured at right angles, Northerly from the Southern line of Lots 13, 14, 15, 16, 17 and 18 and the Nellie Avenue abandonment; thence along said parallel line, South 88 degrees 48' 30" East, 165.01 feet, to the Eastern line of Lot 13; thence along said Eastern line, South 00 degrees 40' 30" East, 12.51 feet, to the point of beginning.APN: 109-008-004-000
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EXHIBIT B
PROJECT SUMMARY
The El Capitan Homekey+ project consists of the acquisition and rehabilitation of the motel located at 1121 Needham Street in Modesto to create 48 fully furnished studio units and one staff unit serving individuals earning 30% of the Area Median Income (AMI). The development will provide 24 permanent supportive housing units for individuals experiencing or at risk of homelessness who have a behavioral health condition, and 24 units reserved for veterans with similar needs. Of the 48 units, eight will meet Americans with Disabilities Act (ADA) accessibility standards, including five that also meet vision and communication requirements.
Rental Restrictions
# of
Bedrooms
Total Units Manager
Units
Assisted
Units
AMI Income
Limit
Target
Population or
Subpopulation
0 (studio) 24 n/a 24 30% People at risk
of and or
Experiencing
Homelessness
0 (studio) 24 n/a 24 30% Veterans at
risk of and or
Experiencing
Homelessness
1-Bedroom 1 1 0 N/A Manager’s
Unit
Total 49 1 49
Rent amounts for each Unit shall not exceed the “affordable rents” under the applicable restriction of Homekey+ program requirements
If, upon the annual certification of the income a tenant, Recipient determines a tenant’s income has increased to Very Low-Income, or Low-Income, the rent charged to the tenant shall increase to the affordable rent for households with such incomes, as defined by Homekey+ Program Restrictions or applicable law outlined in Section 101 of the Homekey+ 2024 Notice of Funding Availability, amended August 7, 2025
If, upon the annual certification of the income a tenant, Recipient determines a tenant’s income 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 may 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 for the unit as determined by HUD per Homekey’s 55-year affordability term.
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EXHIBIT C
APPROVED PROJECT BUDGET
Funding Sources Award Amount
Homekey+ Capital Award $14,272,159
Homekey+ Operating Award $3,617,216
Homekey+ Veteran Operating Award $720,000
Homekey+ Relocation Award $80,000
Homekey+ Total Award $18,689,375
City Capital Contribution CDBG $3,007,163
Stanislaus County BHRS $500,000
Stanislaus Community System of Care HHAP $922,837
Developer Contribution $168,825
Total Funding Sources $23,288,200
Homekey+ Project Costs Amount
Acquisition and Rehabilitation $12,146,452
Relocation $174,336
Pre-Development and Soft Costs $1,666,533
Contingency $2,458,037
Developer Fee $1,117,475
Subtotal (Capital) $17,563,833
Operating Expenses $5,725,367
Total Project Costs $23,288,200
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EXHIBIT D
FEDERAL AWARD IDENTIFICATION INFORMATION
i) Participant’s name: El Capitan Homekey LP
ii) Participant’s UEI:
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:
$3,007,163
vii) Total Amount of Federal Funds Obligated to the Participant by the CITY including the current obligation: $3,007,163
viii) Total Amount of the Federal Award committed to the Participant by the CITY:
$3,007,163
ix) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA): See Exhibit B x) Name of Federal awarding agency: City of Modesto
xi) Contact information for CITY official responsible for awarding funding: 1010 10th Street Suite 3100 Modesto, Ca 95354
xii) CFDA Number and Name: 14-218 Community Development Block Grant/Entitlement xiii) Identification of whether the award is R&D: Not Applicable xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged per 2 CFR 200.414 Indirect (F&A) costs): Not Applicable
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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
Director
EXEMPT FROM RECORDING FEES
PER
GOVERNMENT CODE §§6103, 27383
APN: ***-***-***-*** Space above this line for Recorder’s use.
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(CDBG Loan – El Capitan)
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “ Deed of Trust”) is entered into as of ______________, 2025, El Capitan Homekey, LP, a California limited partnership (“Trustor”) to _________________ (“Trustee”), for the benefit of the City of Modesto, a California charter city (“Beneficiary”).
RECITALS
A. Trustor owns fee simple title to certain real property generally located at 1121 Needham Street, Modesto, California, Modesto, California, also known as Stanislaus County Assessor’s Parcel Number __***-***-***-***__, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”). Trustor intends to develop a forty-nine (49) unit affordable multifamily housing development on the Land (the “Project”).
B. Beneficiary and Trustor have entered into that certain Loan Agreement dated as of ____________, 2025 (the “Loan Agreement”) pursuant to which Beneficiary will provide a loan to Trustor in the amount of up to Three Million Seven Thousand, One Hundred and SixtyThree Dollars ($3,007,163.00 (“Loan”) for the purpose of partially financing 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. This Deed of Trust, the Loan Agreement, the Note and the Regulatory Agreement (defined below) are collectively referred to herein as the “City Documents.”
C. As a condition precedent to the making of the Loan, Beneficiary has required that #21..
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2 Trustor enter into this Deed of Trust and grant to Trustee for the benefit of 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 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”);
f. All revenues, income, rents, royalties, payments and profits produced by the #21..
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3 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 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 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 “Regulatory Agreement”) or the other 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 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 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, 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 #21..
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4 part of the Property and/or is collecting and applying Rents as permitted under this 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 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 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 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 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 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 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 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 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 #21..
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5 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 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 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 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 Loan Documents or otherwise approved in writing by Beneficiary (“Permitted Encumbrances”), this 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 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 knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor’s ownership of the Property.
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6 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 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 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 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 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 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 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 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 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 #21..
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7 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 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 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 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 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, to Trustor’s best knowledge, 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 material facts concerning the Property. #21..
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8 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 board members, 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; (ii) loss or restrictions or use of rentable space on the Property; (iii) adverse effect on the #21..
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9 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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10 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 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 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 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 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 acceptable to Beneficiary), and hold harmless the Indemnitees (as defined in Section 7.10) from #21..
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11 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 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 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 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 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 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 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 offers to settle a claim for insurance benefits, Beneficiary is authorized to collect and apply the insurance #21..
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12 proceeds at Beneficiary's option either to restoration or repair of the Property or to the sums secured by this 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 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 Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this 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 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 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 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 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 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 Document, subject to the expiration of any applicable cure period set forth in such document; #21..
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13 b. Trustor fails to perform any monetary obligation which arises under this 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 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 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 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 j. Trustor fails to perform any obligation arising under this 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 #21..
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14 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 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 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-in-fact 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 competent jurisdiction to foreclose this 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 Deed of Trust.
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15 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 Deed of Trust.
Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this 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 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.
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 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 #21..
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16 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 Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this 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 Deed of Trust or at any time prior to entry of a judgment enforcing this 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 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 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 Deed of Trust, Beneficiary’s interest in the Property and Trustor’s obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this 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, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.
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17 10. Miscellaneous Provisions.
10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this 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 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: El Capitan Homekey, LP
6083 North Figarden Drive #656
Fresno, CA 93722
Attn: Manager
Trustee: ____________
____________
____________
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18 10.3 Binding on Successors. The terms, covenants and conditions of this 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 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 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 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 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 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 Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this 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 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 #21..
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19 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.
El Capitan Homekey LP, a California limited partnership By: HOM El Capitan Motel LLC, a Delaware limited liability company, Its Managing General Partner
By: Housing on Merit, a California nonprofit public benefit corporation, Its Sole Member By: _______________________________________
Jaymie Beckett, Executive Director
By: UP El Capitan Homekey, LLC, a California limited liability company, Its Co-General Partner By: UP Holdings, LLC, an Illinois limited liability company, dba UP Holdings California, LLC, its Sole Member
By: _______________________________________
Cullen J. Davis, Manager
By: RHCB El Capitan, LLC,
a California limited liability company, its Co-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
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20 SIGNATURES MUST BE NOTARIZED.
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21 Exhibit A
LAND
The land referred to is situated in the County of Stanislaus, City of Modesto, State of California, and is described as follows:
PARCEL NO. 1:
Lots 11, 12, 13, 14, 15, 16, 17 and 18 in Block 506 of the CITY OF MODESTO, according to the Official Map thereof, filed in the Office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps.
PARCEL NO. 2:The Easterly 15 feet of Nellie Avenue abandoned as shown by the Map entitled CITY OF MODESTO, according to the Official Map thereof, filed in the office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps, lying South of the Northerly line of Lot 11 extended Westerly in Block 506 of the City of Modesto, and lying North of the South line of Lot 18 extended Westerly of said Block 506.
EXCEPTING FROM Parcels 1 and 2 thereof, all that portion conveyed to the City of Modesto by Deed recorded July 26, 1974 in Book 2643, Official Records, Page 578, Instrument No. 3576, described as follows:All that portion of Section 29, Township 3 South, Range 9 East, Mount Diablo Base and Meridian, being a portion of Lots 13, 14, 15, 16, 17 and 18, Block 506 and the Easterly 15 feet of Nellie Avenue abandoned as said Nellie Avenue is shown by the Map entitled City of Modesto, according to the Official Map thereof, filed in the office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps, described as follows: BEGINNING at the Southeastern corner of said Lot 13; thence along the Southern line of said Lots 13, 14, 15, 16, 17 and 18 and the Nellie Avenue abandonment, North 88 degrees 48' 30" West, 165.01 feet, to the Southwestern corner of the Nellie Avenue Abandonment; thence along the Western line of the Nellie Avenue abandonment, North 00 degrees 40' 30" West,
12.51 feet, to a line which is parallel with and 12.50 feet, measured at right angles, Northerly from the Southern line of Lots 13, 14, 15, 16, 17 and 18 and the Nellie Avenue abandonment; thence along said parallel line, South 88 degrees 48' 30" East, 165.01 feet, to the Eastern line of Lot 13; thence along said Eastern line, South 00 degrees 40' 30" East, 12.51 feet, to the point of beginning.APN: 109-008-004-000
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22 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_____________________________
5481910_1.DOCX
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5481116.1 1
SECURED PROMISSORY NOTE
(CDBG Loan – El Capitan)
$3,007,163 Modesto, California
_________,2026
FOR VALUE RECEIVED, the undersigned El Capitan Homekey, LP, a California limited partnership ("Borrower"), hereby promises to pay to the order of the City of Modesto, a municipal corporation (“City” or "Holder"), the principal amount of up to Three Million Seven Thousand, One Hundred and Sixty-Three Dollars ($3,007,163.00) in lawful money of the United States of America, as may be advanced by City pursuant to the Loan Agreement referred to below, together with interest on the outstanding principal balance in accordance with the terms and conditions described herein.
1. Borrower's Obligation. This Secured Promissory Note (the "Note") evidences Borrower's obligation to repay City the principal amount of Three Million Seven Thousand, One Hundred and Sixty-Three Dollars ($3,007,163.00) or such other amount as may be advanced by the City pursuant to the Loan Agreement between Borrower and City dated as of ___________,2025, 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 is secured by that certain Deed of Trust dated as of the date hereof executed by Borrower for the benefit of City 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 simple rate of three percent (3%) per year. (b) In the event of a Default, interest on the Loan shall begin to accrue, as of the date of Default, and continuing until such time as 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) June 1 following the Completion Date, or (ii) June, 2027, and on June 1 of each year thereafter, through the end of the Term, the Developer shall make repayments of the 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 Borrower's report of Residual Receipts (including an independent auditor's report regarding the auditor's review of Annual Operating Expenses). The Borrower shall provide the City with any #21..
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5481116.1 2
documentation reasonably requested by the City to substantiate the Borrower's determination of Residual Receipts.
(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 fifty-fifth (55th) anniversary of the Completion Date (as defined in the Loan Agreement), but in no event later than December 31, 2082. (c) Right to Prepay. The Borrower shall have the right to prepay the 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 City, except as provided in the Loan Agreement.
5. Security. This Note, with interest, is secured by the Deed of Trust. Upon execution, the Deed of Trust will be recorded in the official records of Stanislaus County, California. Upon recordation of the Deed of Trust, this Note will become nonrecourse to Borrower, pursuant to and except as provided in Section 2.9 of the Loan Agreement which section is hereby incorporated into this Note. The terms of the 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 lawful 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. The Borrower further acknowledges and agrees that a Non-Sufficient Funds (NSF) fee will be assessed for any returned check. A service fee will also be charged for each payment made over the phone, and an administrative fee will apply for each duplicate statement requested. All such fees are non-refundable and are subject to change in accordance with City policy. Borrower agrees to be responsible for all applicable fees as they are incurred. (b) All payments on this Note shall be without expense to City, and Borrower agrees to pay all costs and expenses, including re-conveyance fees and reasonable attorney's fees of City, 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 City 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. #21..
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5481116.1 3
(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.
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 City, become immediately due and payable without further demand.
(b) City'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 City 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 City, 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 City 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 City 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.
(c) The obligations of the Borrower under this Note shall be absolute, and the Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever.
9. Miscellaneous Provisions.
(a) All notices to City or Borrower shall be given in the manner and at the addresses set forth in the Loan Agreement, or to such addresses as City and Borrower may therein designate.
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(b) Borrower promises to pay all costs and expenses, including reasonable attorney's fees, incurred by City 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.
This Note shall be governed by and construed in accordance with the laws of the State of California. If any provision of this Note shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. Time is of the essence with respect to every provision of this Note. (d) The times for the performance of any obligations hereunder are to be strictly construed, time being of the essence.
(e) 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:
El Capitan Homekey LP, a California limited partnership By: HOM El Capitan Motel LLC, a Delaware limited liability company, Its Managing General Partner
By: Housing on Merit, a California nonprofit public benefit corporation, Its Sole Member
By: _______________________________________
Jaymie Beckett, Executive Director
By: UP El Capitan Homekey, LLC,
a California limited liability company, Its Co-General Partner By: UP Holdings, LLC, an Illinois limited liability company, dba UP Holdings California, LLC, its Sole Member
By: _______________________________________
Cullen J. Davis, Manager
By: RHCB El Capitan, LLC,
a California limited liability company, its Co-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
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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
APN109-008-004-000 Space above this line for Recorder’s use.
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(CDBG Loan – El Capitan – 1121 Needham Street)
This Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into as of ________, 2026, by and between the City of Modesto, a California charter city (the “City”) and El Capitan Homekey, LP a California limited partnership (the “Borrower” or “Developer”). City and Borrower are collectively referred to herein as the “Parties.”
RECITALS
1. City and Borrower have entered into certain loan agreement pursuant to which the City loaned to Borrower Three Million Seven Thousand, One Hundred and Sixty-Three Dollars ($3,007,163.00) (the “Loan”).
2. The Loan is funded with Community Development Block Grant (“CDBG”) funds received by the City from HUD pursuant to Title I of the Housing and Community Development Act of 1974.
3. The Borrower owns certain property located in the City of Modesto, California, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”).
4. The City has provided the Loan in order to assist Borrower in a multi-family residential project on the Property consisting of forty-nine (49) housing units, of which twentyfour (24) units will be restricted to occupancy by individuals experiencing homelessness or at risk of homelessness who are clients of the Stanislaus County Behavioral Health and Recovery Services, twenty-four (24) units will be restricted to occupancy veterans experiencing homelessness or at risk of homelessness, and one (1) Mangers Unit (the “Project”). #21..
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5. In consideration of receipt of the Loan, the Borrower agrees to observe all the terms and conditions set forth in this Agreement.
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
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 Tax Credit Allocation Committee (“TCAC”). If TCAC 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 forty-eight (48) Units within the Development designated as assisted by the City 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) "Deed of Trust" means the Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing of even date herewith by and among Developer, as trustor, Old Republic Title Company, as trustee, and the City, as beneficiary, that will encumber the Property to secure repayment of the Acquisition Loan and Developer's performance of the covenants set forth in the documents evidencing the Acquisition Loan as well as this Regulatory Agreement.
(h) "Development" has the meaning set forth in Paragraph B of the Recitals. #21..
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(i) "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.
(j) "Extremely Low-Income Units" means the Units which, pursuant to Section 2.1(b) below, are required to be occupied by Extremely Income Households. (k)"Loan Documents" means the documents executed by Developer evidencing the Loan including this Regulatory Agreement, the Note, Deed of Trust, and the Agreement. (l) "Management Agent" has the meaning set forth in Section 5.2. (m) "Note" means the secured promissory note, dated as of ___________ that evidence Developer's obligation to repay the Acquisition Loan, as such may be amended from time to time.
(n) "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.
(o) "Services Provider" has the meaning set forth in Section 5.6. (p) "Tenant" means the tenant household that occupies a Unit in the Development.
(q) "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, 2082 (subject to extensions agreed upon by the Partners).
(r) "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:
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Exhibit A: Legal Description of the Property
Exhibit B: Certificate of Continuing Program Compliance Exhibit C: Form of Certification of Tenant Eligibility
ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) Assisted Units. During the Term, Developer shall designate and maintain all forty‑eight (48) dwelling units in the Development as restricted units (the “Assisted Units”), which shall be continuously occupied, or if vacant, made available for occupancy by eligible households. Not less than fifty‑one percent (51%) of the Assisted Units, being a minimum of twenty‑five (25) units, shall be occupied by Low‑ and Moderate‑Income Households with incomes at or below eighty percent (80%) of Area Median Income (AMI) for Stanislaus County, in compliance with CDBG requirements. In accordance with Homekey program requirements, one hundred percent (100%) of the forty‑eight (48) Assisted Units shall be restricted to individuals experiencing homelessness or at risk of homelessness, as defined by the State of California and applicable Homekey guidelines. Of the forty‑eight (48) Assisted Units, twenty‑four (24) units shall be reserved for individuals experiencing or at risk of homelessness who are served by Stanislaus County Behavioral Health and Recovery Services (BHRS), and twenty‑four (24) units shall be reserved for veterans experiencing or at risk of homelessness. (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 person’s 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 eighty percent (80%) of Area Median Income, adjusted for Assumed Household Size.
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(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 and in no event shall any increase exceed three (3%) percent. The rent increase limits herein shall not apply to NonQualifying Households, which shall be set forth below in 2.3(b). Tenants shall be given at least 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 a Extremely LowIncome Household has increased above the qualifying limit for a 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 a Moderate 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 #21..
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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.
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 thirty (30) 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. #21..
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(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 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, student dormitories, or dormitories (including farmworker dormitories).
4.2 Compliance with Loan Documents and 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; (b) the Agreement; (c) the Loan Documents; 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 #21..
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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 years 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).
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 EAH Inc. 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 #21..
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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.
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 an after a reasonable cure period and a failure of the Management Agent to cure any management issues presented, 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 #21..
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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 Stanislaus County Behavioral Health and Recovery Services, and/or their selected subcontractor or assigneee (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 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 EAH Inc. 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 #21..
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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 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 90 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.
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, 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 Regulatory Agreement or reasonably requested by Developer to #21..
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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 a 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.
(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 11625, 12138, 12431, 12250, 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 #21..
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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 even if the Acquisition Loan is paid in full prior to the end of the 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. City is making the Loan on the condition, and in consideration of, this provision, and would not do so otherwise.
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 #21..
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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) Calling the Acquisition 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.
(b) 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.
(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 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
Borrower: El Capitan Homekey, LP
6083 North Figarden Drive #656
Fresno, CA 93722
Attn: Manager
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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 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.
6.15 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.
6.16 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:
El Capitan Homekey LP, a California limited partnership By: HOM El Capitan Motel LLC, a Delaware limited liability company, Its Managing General Partner
By: Housing on Merit, a California nonprofit public benefit corporation, Its Sole Member
By: _________________________________
Jaymie Beckett, Executive Director
By: UP El Capitan Homekey, LLC,
a California limited liability company, Its Co-General Partner By: UP Holdings, LLC, an Illinois limited liability company, dba UP Holdings California, LLC, its Sole Member
By:
Cullen J. Davis, Manager
By: RHCB El Capitan, LLC,
a California limited liability company, its Co-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
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Regulatory Agreement
Signature Page
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
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
The land referred to is situated in the County of Stanislaus, City of Modesto, State of California, and is described as follows:
PARCEL NO. 1:
Lots 11, 12, 13, 14, 15, 16, 17 and 18 in Block 506 of the CITY OF MODESTO, according to the
Official Map thereof, filed in the Office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps.
PARCEL NO. 2:
The Easterly 15 feet of Nellie Avenue abandoned as shown by the Map entitled CITY OF MODESTO, according to the Official Map thereof, filed in the office of the Recorder of Stanislaus
County, California, on December 21, 1942 in Volume 15 of Maps, lying South of the Northerly line of Lot 11 extended Westerly in Block 506 of the City of Modesto, and lying North of the South line of Lot 18 extended Westerly of said Block 506.
EXCEPTING FROM Parcels 1 and 2 thereof, all that portion conveyed to the City of Modesto by
Deed recorded July 26, 1974 in Book 2643, Official Records, Page 578, Instrument No. 3576, described as follows:
All that portion of Section 29, Township 3 South, Range 9 East, Mount Diablo Base and Meridian, being a portion of Lots 13, 14, 15, 16, 17 and 18, Block 506 and the Easterly 15 feet of Nellie Avenue abandoned as said Nellie Avenue is shown by the Map entitled City of Modesto,
according to the Official Map thereof, filed in the office of the Recorder of Stanislaus County, California, on December 21, 1942 in Volume 15 of Maps, described as follows:
BEGINNING at the Southeastern corner of said Lot 13; thence along the Southern line of said Lots 13, 14, 15, 16, 17 and 18 and the Nellie Avenue abandonment, North 88 degrees 48' 30" West, 165.01 feet, to the Southwestern corner of the Nellie Avenue Abandonment; thence along the Western line of the Nellie Avenue abandonment, North 00 degrees 40' 30" West,
12.51 feet, to a line which is parallel with and 12.50 feet, measured at right angles, Northerly from the Southern line of Lots 13, 14, 15, 16, 17 and 18 and the Nellie Avenue abandonment; thence along said parallel line, South 88 degrees 48' 30" East, 165.01 feet, to the Eastern line of Lot 13; thence along said Eastern line, South 00 degrees 40' 30" East, 12.51 feet, to the point of beginning.
APN: 109-008-004-000
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C-1
EXHIBIT B
INITIAL/ANNUAL CERTIFICATE OF
PROGRAM COMPLIANCE
UP Holdings, Inc., a California nonprofit corporation ("Owner"), hereby certifies that it will comply with all applicable, ongoing 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 Development. Affordability shall be maintained as follows:
Fifty – One Percent (51%) or Twenty-Five (25) 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.
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 pursuant to the Loan Documents.
Dated: _______________
OWNER:
By: ________________________________
Title: ________________________________
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1669\01\2466400.1
CERTIFICATE OF
CONTINUING PROGRAM COMPLIANCE
The following information is being provided by UP Holdings, Inc., a California nonprofit corporation (the "Owner") to the City of Modesto, (the "City"), pursuant to that certain Agreement dated as of _________, 2025, as such may be amended from time to time, and the Regulatory Agreement dated as of ________. 2025, 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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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 Extremely 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 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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IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of Owner, on this day of , 20 .
UP Holdings, Inc., a California nonprofit corporation:
By: ______________________
Its: ______________________
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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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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.3728469.1
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