CITY COUNCIL STAFF REPORT
Meeting Date: November 17, 2025
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
TITLE: Adopt a Resolution Authorizing the City Manager to Enter into Subordination Agreements with Bridge Housing and Two Senior Lenders for the Grayson Creek Apartments at 100 Chilpancingo Parkway
SYNOPSIS
Bridge Housing has requested the City of Pleasant Hill enter into two separate replacement subordination agreements for existing loans for the Affordable Housing project - Grayson Creek Apartments at 100 Chilpancingo Parkway. The subordination agreements would restate the City’s subordinate loan position for the Grayson Creek Apartments. Bridge Housing is refinancing the project to complete various on-site improvements and upgrades including repairs for building balconies, outdoor courtyard, and other interior modifications, including new appliances. The project is not requesting any additional funds from the City, thus, Staff recommends that the City Council adopt the proposed resolution authorizing the City Manager to execute the replacement agreement.
DISCUSSION
Background
The Grayson Creek Apartments was completed in 2002. Prior to development of the project, the former Pleasant Hill Redevelopment Agency agreed to provide a loan to help facilitate the project. The original loan from 1998 was $4,500,000 with a maturity date of 55 years. At that time, the City was also subordinate to the primary loan for the project.
The agreement was amended in 2001 when it was split into a grant and loan. The loan was in the amount of $1,005,000, and is repayable out of residual receipts (i.e., net proceeds) from the affordable housing project, with a maturity date of 55 years after recordation of the Certificate of Completion for the project (2057). The Grant was in the amount of $6,815,000, and the Developer executed a note stating that the Grant would only have to be repaid in the event of a default under the Grant and Loan Agreement. As part of this agreement, the City continued to agree to subordinate its loan and regulatory agreement to a permanent loan from CalHFA in the original principal amount of $5.7 million, and a second loan from HCD in the original principal amount of $4,074,510. The Developer has been paying down the CalHFA loan consistently for several years, and it currently has a remaining balance of approximately $2,570,463. The HCD loan is paid out of residual receipts, and as a result very little principal has been paid down, and the loan has been accruing interest. The current outstanding principal and interest on the HCD loan is $5,774,215.40.
Analysis
Bridge Housing is now seeking to refinance the CalHFA loan, mainly so they can take out additional loan funds to make repairs to the project and fund a reserve fund for future repairs.
The estimated cost of repairs is $747,609; the reserve is $600,000 and there are $365,010.80 in additional costs built into the loan. The new loan amount (with the outstanding balance combined with the money being taken out) is $4,500,000. As part of the newly refinanced loan, they are asking that the City agree to subordinate its loan to the new loan made by Berkadia Commercial Mortgage LLC.
The City’s $1,005,000 loan (and the grant) are subordinate to the existing CalHFA loan, and the original loan document specifically authorized the City to subordinate to the CalHFA loan.
Because Bridge Housing is taking out additional money to fund improvements, they are asking the City to subordinate to a loan amount that is higher than the current outstanding principal (though it is still lower than the original loan amount).
As part of this transaction, HCD is preparing new loan documents to commemorate its existing loan. HCD is also requesting that the City subordinate to these new loan documents; however, this simply preserves the status quo, in that the City is currently subordinate to HCD’s loan, and the outstanding loan amount is not changing.
Staff has reviewed the requests, with assistance from legal counsel, and believes that the improvements proposed are appropriate to continue to provide necessary accommodations for the affordable housing project. These types of projects do not generate a lot of cash flow, so it can be difficult to make needed repairs without refinancing. By refinancing, Bridge Housing is actually reducing its annual debt service and will have money to maintain the condition of the project.
The new primary loan has a 15-year term, with a balloon payment at the end of the period. At some point over the next 15 years, it is expected that Bridge Housing will need to refinance again, or re-syndicate its tax credits to bring more equity into the project. These types of projects generally refinance or re-syndicate regularly to bring more money into the project and keep the units in good condition. The City has not had any prior issues with Bridge Housing and its loan standing; accordingly, given Bridge Housing's extensive portfolio of affordable housing projects, Staff believes there is minimal risk of entering into the subordination agreement for the new primary loan. Similarly, Staff recommends that the City agree to subordinate to the new HCD loan documents, since this simply preserves the priority order between the City and HCD and does not change any of the current loan terms.
FISCAL IMPACT
None, no additional funds are required as part of this request.
PUBLIC CONTACT
Public Contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Adopt the attached resolution authorizing the City Manager to execute subordination agreements with Bridge Housing and two Senior Lenders for the Grayson Creek Affordable Housing Apartments at 100 Chilpancingo Parkway.
ALTERNATIVES TO RECOMMENDED ACTION
Do not adopt the Resolution and provide direction to staff.
ATTACHMENT(S)
Attachment A: Proposed Resolution
Attachment B: Proposed Berkadia Subordination Agreement Attachment C: Proposed HCD Subordination Agreement
Attachment D: Grayson Creek Apartments List of Improvements Attachment E: Amended and Restated Loan and Grant Agreement Grayson Creek Apartments (2001)
Prepared by: Troy Fujimoto, City Planner
Approved by: Ethan Bindernagel, City Manager
Prepared by, and after recording
return to:
Lanre A. Popoola, Esquire
Troutman Pepper Locke LLP
P.O. Box 1122
Richmond, VA 23218
SUBORDINATION AGREEMENT
GOVERNMENTAL ENTITY
(Revised 2-25-2025)
Subordination Agreement – Governmental Entity Page 1
Freddie Mac Loan Number: 510842429
Property Name: Grayson Creek Apartments _
SUBORDINATION AGREEMENT
GOVERNMENTAL ENTITY
(Revised 2-25-2025)
THIS SUBORDINATION AGREEMENT (“Agreement”) is entered into this ___ day of ____________________, 2025, by and between (i) BERKADIA COMMERCIAL MORTGAGE LLC, a limited liability company organized and existing under the laws of the State of Delaware (“Senior Lender”) and (ii) CITY OF PLEASANT HILL, as housing successor to the Pleasant Hill Redevelopment Agency (“Subordinate Lender”).
RECITALS
A. BRIDGE GRAYSON CREEK ASSOCIATES, a limited partnership organized under the laws of the State of California (“Borrower”) is the owner of certain land located in Contra Costa County, California, described in Exhibit A (“Land”). The Land is improved with a multifamily rental housing project (“Improvements”).
B. Senior Lender has made or is making a loan to Borrower in the original principal amount of $[4,500,000].00 (“Senior Loan”) upon the terms and conditions of a Multifamily Loan and Security Agreement dated as of __________, 2025 between Senior Lender and Borrower (“Senior Loan Agreement”) in connection with the Mortgaged Property. The Senior Loan is secured by a Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of the date of the Senior Loan Agreement (“Senior Mortgage”) encumbering the Land, the Improvements and related personal and other property described and defined in the Senior Mortgage as the “Mortgaged Property.”
C. Pursuant to an Amended and Restated Loan and Grant Agreement dated as of September 14, 2001 between Subordinate Lender and Borrower (“Subordinate Loan Agreement”), Subordinate Lender has made or is making (i) a loan to Borrower in the original principal amount of $1,005,000 (“Subordinate Loan”) and a grant to the Borrower in the original principal amount of $6,815,000 (“Subordinate Grant”). Each of the Subordinate Loan and the Subordinate Grant is or will be secured by an Amended and Restated Construction ad Permanent Deed of Trust, Assignment of Rents, andSecurity Agreement dated as of September 14, 2001 (“Subordinate Mortgage”) encumbering all or a portion of the Mortgaged Property.
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D. The Senior Mortgage will be]recorded in the land records of Contra Costa County, California (“Recording Office”). The Subordinate Mortgage is recorded in the Recording Office at Document No. 2001-0315912-00.
E. The execution and delivery of this Agreement is a condition of Senior Lender’s making of the Senior Loan.
AGREEMENT
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:
1. Definitions. The following terms, when used in this Agreement (including, as appropriate, when used in the above recitals), will have the following meanings:
The terms “Condemnation,” “Imposition Reserve Deposits,” “Impositions,” “Leases,” “Rents” and “Restoration,” as well as any term used in this Agreement and not otherwise defined in this Agreement, will have the meanings given to those terms in the Senior Loan Agreement.
“Bankruptcy Proceeding” means any bankruptcy, reorganization, insolvency, composition, restructuring, dissolution, liquidation, receivership, assignment for the benefit of creditors, or custodianship action or proceeding under any federal or state law with respect to Borrower, any guarantor of any of the Senior Indebtedness, any of their respective properties, or any of their respective partners, members, officers, directors, or shareholders.
“Borrower” means all persons or entities identified as “Borrower” in the first Recital of this Agreement, together with their successors and assigns, and any other person or entity who acquires title to the Mortgaged Property after the date of this Agreement; provided that the term “Borrower” will not include Senior Lender if Senior Lender acquires title to the Mortgaged Property.
“Casualty” means the occurrence of damage to or loss of all or any portion of the Mortgaged Property by fire or other casualty.
“Enforcement Action” means any of the following actions taken by or at the direction of Subordinate Lender: the acceleration of all or any part of the Subordinate Indebtedness, the advertising of or commencement of any foreclosure or trustee’s sale proceedings, the exercise of any power of sale, the acceptance of a deed or assignment in lieu of foreclosure or sale, the collecting of Rents, the obtaining of or seeking of the appointment of a receiver, the seeking of default interest, the taking of possession or control of any of the Mortgaged Property, the commencement of any suit or other legal, administrative, or arbitration proceeding based upon the Subordinate Note or any other of the Subordinate Loan Documents, the exercising of any banker’s lien or rights of set-off or recoupment, or the exercise of any other remedial action against Borrower, any other party liable for Subordination Agreement – Governmental Entity Page 3
any of the Subordinate Indebtedness or obligated under any of the Subordinate Loan Documents, or the Mortgaged Property.
“Enforcement Action Notice” means a Notice given from Subordinate Lender to Senior Lender following one or more Subordinate Mortgage Default(s) and the expiration of any applicable notice or cure periods, setting forth in reasonable detail the Subordinate Mortgage Default(s) and the Enforcement Actions proposed to be taken by Subordinate Lender.
“Grant Note” means the promissory note or other evidence of the Subordinate Indebtedness, except for the Subordinate Loan and any replacement of the Grant Note. “Lien” means any lien, encumbrance, estate or other interest, recorded against or secured by the Mortgaged Property.
“Loss Proceeds” means all monies received or to be received under any insurance policy, from any condemning authority, or from any other source, as a result of any Condemnation or Casualty.
“Notice” means all notices, requests, demands, consents, approvals or other communication pursuant to this Agreement provided in accordance with the provisions of Section 10.
“Regulatory Agreement” means, collectively, (i) the Regulatory Agreement between Borrower and Subordinate Lender dated as of July 29, 1998 and recorded in the Recording Office as Document No. 98-0181887-00 and (ii) First Amendment to Regulatory Agreement dated as of September 14, 2001 and recorded in the Recording Office as Document No. 2001-0315913-00.
“Senior Indebtedness” means the “Indebtedness” as defined in the Senior Loan Agreement.
“Senior Lender” means the “Lender” as defined in the Senior Mortgage. When any other person or entity becomes the legal holder of the Senior Note, such other person or entity will automatically become Senior Lender.
“Senior Loan Documents” means the “Loan Documents” as defined in the Senior Loan Agreement, as such documents may be amended.
“Senior Mortgage Default” means any act, failure to act, event, condition, or occurrence which constitutes, or which with the giving of Notice or the passage of time, or both, would constitute, an “Event of Default” as defined in the Senior Loan Agreement. “Senior Note” means the promissory note or other evidence of the Senior Indebtedness and any replacement of the Senior Note.
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“Subordinate Indebtedness” means all sums evidenced or secured or guaranteed by, or otherwise due and payable to Subordinate Lender pursuant to, the Subordinate Loan Documents.
“Subordinate Lender” means the person or entity named as such in the first paragraph of this Agreement and any other person or entity who becomes the legal holder of the Subordinate Note after the date of this Agreement.
“Subordinate Loan Documents” means the Subordinate Mortgage, the Subordinate Note, the Grant Note, the Subordinate Loan Agreement, the Regulatory Agreement and all other documents at any time evidencing, securing, guaranteeing, or otherwise delivered in connection with the Subordinate Indebtedness, as such documents may be amended.
“Subordinate Mortgage Default” means any act, failure to act, event, condition, or occurrence which allows (but for any contrary provision of this Agreement), Subordinate Lender to take an Enforcement Action.
“Subordinate Note” means the promissory note or other evidence of the Subordinate Indebtedness, except for the Subordinate Grant and any replacement of the Subordinate Note.
“Surplus Cash” means, with respect to any period, any revenues of Borrower remaining after paying, or setting aside funds for paying, all the following:
(a) All sums due or currently required to be paid under the Senior Loan Documents, including any reserves and Imposition Reserve Deposits. (b) All reasonable operating expenses of the Mortgaged Property, including real estate taxes, insurance premiums, utilities, building maintenance, painting and repairs, management fees, payroll, administrative expenses, legal expenses and audit expenses (excluding any developer fees payable with respect to the Mortgaged Property).
2. Subordinate Lender’s Representations and Warranties. (a) Subordinate Lender represents and warrants that each of the following is true as of the date of this Agreement:
(i) Subordinate Lender is now the owner and holder of the Subordinate Loan Documents.
(ii) No Subordinate Mortgage Default has occurred and is continuing. (iii) The current unpaid principal balance of the Subordinate Indebtedness is $________.
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(iv) No scheduled payments under the Subordinate Note have been prepaid. (b) Without the prior written consent of Senior Lender, Subordinate Lender will not do any of the following:
(i) Pledge, assign, transfer, convey, or sell any interest in the Subordinate Indebtedness or any of the Subordinate Loan Documents.
(ii) Take any action which has the effect of increasing the Subordinate Indebtedness, except to cure a Senior Mortgage Default as contemplated under Section 5(a) of this Agreement.
(iii) Accept any prepayment of the Subordinate Indebtedness.
3. Terms of Subordination.
(a) Agreement to Subordinate. The Subordinate Indebtedness is and will at all times continue to be subject and subordinate in right of payment to the prior payment in full of the Senior Indebtedness. Each of the Subordinate Loan Documents is, and will at all times remain, subject and subordinate in all respects to the liens, terms, covenants, conditions, operations, and effects of each of the Senior Loan Documents.
(b) Subordination of Subrogation Rights. If Subordinate Lender, by indemnification, subrogation or otherwise, acquires any Lien on any of the Mortgaged Property, then that Lien will be fully subject and subordinate to the receipt by Senior Lender of payment in full of the Senior Indebtedness, and to the Senior Loan Documents, to the same extent as the Subordinate Indebtedness and the Subordinate Loan Documents are subordinate pursuant to this Agreement. (c) Payments Before Senior Mortgage Default; Soft Subordinate Debt. Until the occurrence of a Senior Mortgage Default, Subordinate Lender will be entitled to retain for its own account all payments of the principal of and interest on the Subordinate Indebtedness pursuant to the Subordinate Loan Documents; provided that Subordinate Lender expressly agrees that it will not accept any such payment that is made more than 10 days in advance of its due date and provided further that Subordinate Lender will not accept any payment in an amount that exceeds 75% of then available Surplus Cash.
(d) Payments After Senior Mortgage Default or Bankruptcy. (i) Immediately upon Subordinate Lender’s receipt of Notice or actual knowledge of a Senior Mortgage Default, Subordinate Lender will not accept any payments of the Subordinate Indebtedness, and the provisions of this Section 3(d) will apply.
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(ii) If Subordinate Lender receives any of the following, whether voluntarily or by action of law, after a Senior Mortgage Default of which Subordinate Lender has actual knowledge (or is deemed to have actual knowledge as provided in Section 4(c)) or has been given Notice, such will be received and held in trust for Senior Lender:
(A) Any payment, property, or asset of any kind or in any form in connection with the Subordinate Indebtedness.
(B) Any proceeds from any Enforcement Action.
(C) Any payment, property, or asset in or in connection with any Bankruptcy Proceeding.
(iii) Subordinate Lender will promptly remit, in kind and properly endorsed as necessary, all such payments, properties, and assets described in Section 3(d)(ii) to Senior Lender. Senior Lender will apply any payment, asset, or property so received from Subordinate Lender to the Senior Indebtedness in such order, amount (with respect to any asset or property other than immediately available funds), and manner as Senior Lender determines in its sole and absolute discretion.
(e) Bankruptcy. Without the prior written consent of Senior Lender, Subordinate Lender will not commence, or join with any other creditor in commencing, any Bankruptcy Proceeding. In the event of a Bankruptcy Proceeding, Subordinate Lender will not vote affirmatively in favor of any plan of reorganization or liquidation unless Senior Lender has also voted affirmatively in favor of such plan.
4. Default Under Subordinate Loan Documents.
(a) Notice of Subordinate Mortgage Default and Cure Rights. (i) Subordinate Lender will deliver to Senior Lender a copy of each Notice delivered by Subordinate Lender pursuant to the Subordinate Loan Documents within 5 Business Days of sending such Notice to Borrower.
Neither giving nor failing to give a Notice to Senior Lender pursuant to this Section 4(a) will affect the validity of any Notice given by Subordinate Lender to Borrower.
(ii) For a period of 90 days following delivery to Senior Lender of an Enforcement Action Notice, Senior Lender will have the right, but not the obligation, to cure any Subordinate Mortgage Default. However, if such Subordinate Mortgage Default is a non-monetary default and is not capable of being cured within such 90-day period and Senior Lender has Subordination Agreement – Governmental Entity Page 7
commenced and is diligently pursuing such cure to completion, Senior Lender will have such additional period of time as may be required to cure such Subordinate Mortgage Default or until such time, if ever, as Senior Lender takes either of the following actions:
(A) Discontinues its pursuit of any cure.
(B) Delivers to Subordinate Lender Senior Lender’s written consent to the Enforcement Action described in the Enforcement Action Notice.
(iii) Senior Lender will not be subrogated to the rights of Subordinate Lender under the Subordinate Loan Documents as a result of Senior Lender having cured any Subordinate Mortgage Default.
(iv) Subordinate Lender acknowledges that all amounts advanced or expended by Senior Lender in accordance with the Senior Loan Documents or to cure a Subordinate Mortgage Default will be added to and become a part of the Senior Indebtedness and will be secured by the lien of the Senior Mortgage. (b) Subordinate Lender’s Exercise of Remedies After Notice to Senior Lender. (i) In the event of a Subordinate Mortgage Default, Subordinate Lender will not commence any Enforcement Action until 90 days after Subordinate Lender has delivered to Senior Lender an Enforcement Action Notice.
During such 90-day period or such longer period as provided in Section 4(a), Subordinate Lender will be entitled to seek specific performance to enforce covenants and agreements of Borrower relating to income, rent, or affordability restrictions contained in the Regulatory Agreement, subject to Senior Lender’s right to cure a Subordinate Mortgage Default set forth in Section 4(a).
(ii) Subordinate Lender may not commence any other Enforcement Action, including any foreclosure action under the Subordinate Loan Documents, until the earlier of:
(A) The expiration of such 90-day period or such longer period as provided in Section 4(a).
(B) The delivery by Senior Lender to Subordinate Lender of Senior Lender’s written consent to such Enforcement Action by
Subordinate Lender.
(iii) Subordinate Lender acknowledges that Senior Lender may grant or refuse consent to Subordinate Lender’s Enforcement Action prior to the expiration of such 90-day period in Senior Lender’s sole and absolute Subordination Agreement – Governmental Entity Page 8
discretion. At the expiration of such 90-day period or such longer period as provided in Section 4(a) and, subject to Senior Lender’s right to cure set forth in Section 4(a), Subordinate Lender may commence any Enforcement Action.
(iv) Senior Lender may pursue all rights and remedies available to it under the Senior Loan Documents, at law, or in equity, regardless of any Enforcement Action Notice or Enforcement Action by Subordinate Lender. No action or failure to act on the part of Senior Lender in the event of a Subordinate Mortgage Default or commencement of an Enforcement Action will constitute a waiver on the part of Senior Lender of any provision of the Senior Loan Documents or this Agreement. (c) Cross Default. Subordinate Lender acknowledges that a Subordinate Mortgage Default constitutes a Senior Mortgage Default. Accordingly, upon the occurrence of a Subordinate Mortgage Default, Subordinate Lender will be deemed to have actual knowledge of a Senior Mortgage Default. If Subordinate Lender notifies Senior Lender in writing that any Subordinate Mortgage Default of which Senior Lender has received Notice has been cured or waived, as determined by Subordinate Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of the Mortgaged Property pursuant to its rights under the Senior Loan Documents, any Senior Mortgage Default under the Senior Loan Documents arising solely from such Subordinate Mortgage Default will be deemed cured, and the Senior Loan will be reinstated.
5. Default Under Senior Loan Documents.
(a) Notice of Senior Mortgage Default and Cure Rights.
(i) Senior Lender will deliver to Subordinate Lender a copy of any Notice sent by Senior Lender to Borrower of a Senior Mortgage Default within 5 Business Days of sending such Notice to Borrower. Failure of Senior Lender to send Notice to Subordinate Lender will not prevent the exercise of Senior Lender’s rights and remedies under the Senior Loan Documents. (ii) Subordinate Lender will have the right, but not the obligation, to cure any monetary Senior Mortgage Default within 30 days following the date of such Notice. During such 30-day period Senior Lender will be entitled to continue to pursue its remedies under the Senior Loan Documents. (iii) Subordinate Lender may, within 90 days after the date of the Notice, cure a non-monetary Senior Mortgage Default if during such 90-day period, Subordinate Lender keeps current all payments required under the Senior Loan Documents. If such a non-monetary Senior Mortgage Default creates an unacceptable level of risk relative to the Mortgaged Property, or Senior Lender’s secured position relative to the Mortgaged Property, as determined Subordination Agreement – Governmental Entity Page 9
by Senior Lender in its sole discretion, then during such 90-day period Senior Lender may exercise all available rights and remedies to protect and preserve the Mortgaged Property and the Rents, revenues and other proceeds from the Mortgaged Property.
(iv) All amounts paid by Subordinate Lender to Senior Lender to cure a Senior Mortgage Default will be deemed to have been advanced by Subordinate Lender pursuant to, and will be secured by the lien of, the Subordinate Mortgage. Notwithstanding anything in this Section 5(a) to the contrary, Subordinate Lender’s right to cure any Senior Mortgage Default will terminate immediately upon the occurrence of any Bankruptcy Proceeding. (b) Release of Mortgaged Property.
(i) Subordinate Lender consents to and authorizes any future release by Senior Lender of all or any portion of the Mortgaged Property from the lien, operation, and effect of the Senior Loan Documents. Subordinate Lender waives to the fullest extent permitted by law, all equitable or other rights it may have in connection with the release of all or any portion of the Mortgaged Property, including any right to require Senior Lender to do any of the following:
(A) To conduct a separate sale of any portion of the Mortgaged Property.
(B) To exhaust its remedies against all or any portion of the Mortgaged Property or any combination of portions of the Mortgaged Property or any other collateral for the Senior Indebtedness.
(C) To proceed against Borrower, any other party that may be liable for any of the Senior Indebtedness (including any general partner of Borrower if Borrower is a partnership), all or any portion of the Mortgaged Property or combination of portions of the Mortgaged Property or any other collateral, before proceeding against all or such portions or combination of portions of the Mortgaged Property as Senior Lender determines. Subordinate Lender waives to the fullest extent permitted by law any and all benefits under California Civil Code Sections 2845, 2849 and 2850.
(ii) Subordinate Lender consents to and authorizes, at the option of Senior Lender, the sale, either separately or together, of all or any portion of the Mortgaged Property. Subordinate Lender acknowledges that without Notice to Subordinate Lender and without affecting any of the provisions of this Agreement, Senior Lender may do any of the following:
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(A) Extend the time for or waive any payment or performance under the Senior Loan Documents.
(B) Modify or amend in any respect any provision of the Senior Loan Documents.
(C) Modify, exchange, surrender, release, and otherwise deal with any additional collateral for the Senior Indebtedness.
(c) Termination Upon Foreclosure. The lien of the Subordinate Loan Documents will automatically terminate upon the acquisition by Senior Lender or by a third-party purchaser of title to the Mortgaged Property pursuant to a foreclosure of, deed in lieu of foreclosure, or trustee’s sale or other exercise of a power of sale or similar disposition under the Senior Mortgage.
6. Conflicts. If there is any conflict or inconsistency between the terms of the Subordinate Loan Documents and the terms of this Agreement, then the terms of this Agreement will control. Borrower acknowledges that the terms and provisions of this Agreement will not, and will not be deemed to do any of the following:
(a) Extend Borrower’s time to cure any Senior Mortgage Default or Subordinate Mortgage Default.
(b) Give Borrower the right to receive notice of any Senior Mortgage Default or Subordinate Mortgage Default, other than that, if any, provided, respectively under the Senior Loan Documents or the Subordinate Loan Documents. (c) Create any other right or benefit for Borrower as against Senior Lender or Subordinate Lender.
7. Rights and Obligations of Subordinate Lender Under the Subordinate Loan Documents and of Senior Lender under the Senior Loan Documents. (a) Insurance.
(i) All requirements pertaining to insurance under the Subordinate Loan Documents (including requirements relating to amounts and types of coverages, deductibles and special endorsements) will be deemed satisfied if Borrower complies with the insurance requirements under the Senior Loan Documents and of Senior Lender.
(ii) All original policies of insurance required pursuant to the Senior Loan Documents will be held by Senior Lender.
(iii) Nothing in this Section 7(a) will preclude Subordinate Lender from requiring that it be named as a mortgagee and loss payee, as its interest Subordination Agreement – Governmental Entity Page 11
may appear, under all policies of property damage insurance maintained by Borrower with respect to the Mortgaged Property, provided such action does not affect the priority of payment of Loss Proceeds, or that Subordinate Lender be named as an additional insured under all policies of liability insurance maintained by Borrower with respect to the Mortgaged Property.
(b) Condemnation or Casualty.
In the event of a Condemnation or a Casualty, the following provisions will apply:
(i) The rights of Subordinate Lender (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Condemnation or a Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a Condemnation or a Casualty, will be and remain subordinate in all respects to Senior Lender’s rights under the Senior Loan Documents, and Subordinate Lender will be bound by any settlement or adjustment of a claim resulting from a Condemnation or a Casualty made by Senior Lender.
(ii) All Loss Proceeds will be applied either to payment of the costs and expenses of Restoration or to payment on account of the Senior Indebtedness, as and in the manner determined by Senior Lender in its sole discretion; provided however, Senior Lender agrees to consult with Subordinate Lender in determining the application of Casualty proceeds.
In the event of any disagreement between Senior Lender and Subordinate Lender over the application of Casualty proceeds, the decision of Senior Lender, in its sole discretion, will prevail.
(iii) If Senior Lender holds Loss Proceeds, or monitors the disbursement of Loss Proceeds, Subordinate Lender will not do so. Nothing contained in this Agreement will be deemed to require Senior Lender to act for or on behalf of Subordinate Lender in connection with any Restoration or to hold or monitor any Loss Proceeds in trust for or otherwise on behalf of Subordinate Lender, and all or any Loss Proceeds may be commingled with any funds of Senior Lender.
(iv) If Senior Lender elects to apply Loss Proceeds to payment on account of the Senior Indebtedness, and if the application of such Loss Proceeds results in the payment in full of the entire Senior Indebtedness, any remaining Loss Proceeds held by Senior Lender will be paid to Subordinate Lender unless another party has asserted a claim to the remaining Loss Proceeds.
(c) Modification of Subordinate Loan Documents. Subordinate Lender agrees that, until the principal of, interest on and all other amounts payable under the Senior Subordination Agreement – Governmental Entity Page 12
Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender, increase the amount of the Subordinate Loan, increase the required payments due under the Subordinate Loan, decrease the term of the Subordinate Loan, increase the interest rate on the Subordinate Loan, or otherwise amend the Subordinate Loan terms in a manner that creates an adverse effect upon Senior Lender under the Senior Loan Documents. If Subordinate Lender either (i) amends the Subordinate Loan Documents in the manner set forth above or (ii) assigns the Subordinate Loan without Senior Lender’s consent, then such amendment or assignment will be void ab initio and of no effect whatsoever.
Notwithstanding the foregoing, Subordinate Lender may modify the Subordinate Loan Documents to account for increases to the Subordinate Loan that result from advances made to cure defaults under the Senior Loan Documents. (d) Modification of Senior Loan Documents. Senior Lender may amend, waive, postpone, extend, renew, replace, reduce or otherwise modify any provisions of the Senior Loan Documents without the necessity of obtaining the consent of or providing Notice to Subordinate Lender, and without affecting any of the provisions of this Agreement. Notwithstanding the foregoing, Senior Lender may not modify any provision of the Senior Loan Documents that increases the Senior Indebtedness, except for increases in the Senior Indebtedness that result from advances made by Senior Lender to protect the security or lien priority of Senior Lender under the Senior Loan Documents or to cure defaults under the Subordinate Loan Documents.
(e) Commercial or Retail Leases. If requested, Subordinate Lender will enter into attornment and non-disturbance agreements with all tenants under commercial or retail Leases, if any, to whom Senior Lender has granted attornment and nondisturbance, on the same terms and conditions given by Senior Lender. (f) Consent Rights. Whenever the Subordinate Loan Documents give Subordinate Lender approval or consent rights with respect to any matter, and a right of approval or consent for the same or substantially the same matter is also granted to Senior Lender pursuant to the Senior Loan Documents or otherwise, Senior Lender’s approval or consent or failure to approve or consent will be binding on Subordinate Lender. None of the other provisions of Section 7 are intended to be in any way in limitation of the provisions of this Section 7(f). (g) Escrows. Except as provided in this Section 7(g), and regardless of any contrary provision in the Subordinate Loan Documents, Subordinate Lender will not collect any escrows for any cost or expense related to the Mortgaged Property or for any portion of the Subordinate Indebtedness. However, if Senior Lender is not collecting escrow payments for one or more Impositions, Subordinate Lender may collect escrow payments for such Impositions; provided that all payments so collected by Subordinate Lender will be held in trust by Subordinate Lender to be applied only to the payment of such Impositions.
Subordination Agreement – Governmental Entity Page 13
(h) Certification. Within 10 days after request by Senior Lender, Subordinate Lender will furnish Senior Lender with a statement, duly acknowledged and certified setting forth the then-current amount and terms of the Subordinate Indebtedness, confirming that there exists no default under the Subordinate Loan Documents (or describing any default that does exist), and certifying to such other information with respect to the Subordinate Indebtedness as Senior Lender may request.
8. Refinancing. Subordinate Lender agrees that its agreement to subordinate under this Agreement will extend to any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Indebtedness (including reasonable and necessary costs associated with the closing and/or the refinancing, and any reasonable increase in proceeds for rehabilitation in the context of a preservation transaction). All terms and covenants of this Agreement will inure to the benefit of any holder of any such refinanced debt, and all references to the Senior Loan Documents and Senior Lender will mean, respectively, the refinance loan documents and the holder of such refinanced debt.
9. Governmental Powers. Nothing in this Agreement is intended, nor will it be construed, to in any way limit the exercise by Subordinate Lender of its governmental powers (including police, regulatory and taxing powers) with respect to Borrower or the Mortgaged Property to the same extent as if it were not a party to this Agreement or the transactions contemplated by this Agreement.
10. Notices.
(a) Any Notice required or permitted to be given pursuant to this Agreement will be in writing and will be deemed to have been duly and sufficiently given if (i) personally delivered with proof of delivery (any Notice so delivered will be deemed to have been received at the time so delivered), or (ii) sent by a national overnight courier service (such as FedEx) designating earliest available delivery (any Notice so delivered will be deemed to have been received on the next Business Day following receipt by the courier), or (iii) sent by United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any Notice so sent will be deemed to have been received on the date of delivery as confirmed by the return receipt), addressed to the respective parties as follows:
Notices intended for Senior Lender will be addressed to:
Berkadia Commercial Mortgage LLC
323 Norristown Road, Suite 300
Ambler, Pennsylvania 19002
Attention: Servicnig
Notices intended for Subordinate Lender will be addressed to:
City of Pleasant Hill
Subordination Agreement – Governmental Entity Page 14
100 Gregory Lane
Pleasant Hill, CA 94523
Attention:
(b) Any party, by Notice given pursuant to this Section 10, may change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses, for its Notices, but Notice of a change of address will only be effective upon receipt. Neither party will refuse or reject delivery of any Notice given in accordance with this Section 10.
11. Reserved.
12. Miscellaneous Provisions.
(a) Assignments/Successors. This Agreement will be binding upon and will inure to the benefit of the respective legal successors and permitted assigns of the parties to this Agreement. Without prior notice to or the consent of the Subordinate Lender or the Borrower, the Senior Lender may freely transfer or assign the Senior Loan and the Senior Loan Documents, including this Agreement, in whole or in part, and the Subordinate Lender acknowledges and agrees that any future legal holder of the Senior Note will automatically be a legal successor and permitted assignee of Senior Lender hereunder, without the necessity of any further action or instrument. No other party will be entitled to any benefits under this Agreement, whether as a third-party beneficiary or otherwise. (b) No Partnership or Joint Venture. Nothing in this Agreement or in any of the Senior Loan Documents or Subordinate Loan Documents will be deemed to constitute Senior Lender as a joint venturer or partner of Subordinate Lender. (c) Further Assurances. Upon Notice from Senior Lender, Subordinate Lender will execute and deliver such additional instruments and documents, and will take such actions, as are required by Senior Lender to further evidence or implement the provisions and intent of this Agreement.
(d) Amendment. This Agreement may be amended, changed, modified, altered or terminated only by a written instrument signed by the parties to this Agreement or their successors or assigns.
(e) Governing Law. This Agreement will be governed by the laws of the State in which the Land is located.
(f) Severable Provisions. If any one or more of the provisions contained in this Agreement, or any application of any such provisions, is invalid, illegal, or unenforceable in any respect, the validity, legality, enforceability, and application of the remaining provisions contained in this Agreement will not in any way be affected or impaired.
Subordination Agreement – Governmental Entity Page 15
(g) Term. The term of this Agreement will commence on the date of this Agreement and will continue until the earliest to occur of the following events:
(i) The payment of all the Senior Indebtedness; provided that this Agreement will be reinstated in the event any payment on account of the Senior Indebtedness is avoided, set aside, rescinded or repaid by Senior Lender. (ii) The payment of all the Subordinate Indebtedness other than by reason of payments which Subordinate Lender is obligated to remit to Senior Lender pursuant to this Agreement.
(iii) The acquisition by Senior Lender or by a third-party purchaser of title to the Mortgaged Property pursuant to a foreclosure of, deed in lieu of foreclosure, or trustee’s sale or other exercise of a power of sale or similar disposition under the Senior Mortgage.
(iv) With the prior written consent of Senior Lender, without limiting the provisions of Section 4(b)(iv), the acquisition by Subordinate Lender of title to the Mortgaged Property subject to the Senior Mortgage pursuant to a foreclosure, or a deed in lieu of foreclosure, of (or the exercise of a power of sale under) the Subordinate Mortgage.
(h) Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.
(i) Entire Agreement. This Agreement represents the entire understanding and agreement between the parties regarding the matters addressed in this Agreement, and will supersede and cancel any prior agreements regarding such matters. (j) Authority. Each person executing this Agreement on behalf of a party to this Agreement represents and warrants that such person is duly and validly authorized to do so on behalf of such party with full right and authority to execute this Agreement and to bind such party with respect to all of its obligations under this Agreement.
(k) No Waiver. No failure or delay on the part of any party to this Agreement in exercising any right, power, or remedy under this Agreement will operate as a waiver of such right, power, or remedy, nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise of such right, power, or remedy or the exercise of any other right, power or remedy under this Agreement.
(l) Remedies. Each party to this Agreement acknowledges that if any party fails to comply with its obligations under this Agreement, the other parties will have all Subordination Agreement – Governmental Entity Page 16
rights available at law and in equity, including the right to obtain specific performance of the obligations of such defaulting party and injunctive relief.
13. Attached Riders. The following Riders are attached to this Agreement: None
14. Attached Exhibits. The following Exhibits, if marked with an “X” in the space provided, are attached to this Agreement:
|X| Exhibit A Description of the Land (required)
| | Exhibit B Ground Lease Description (if applicable)
[SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOW]
Subordination Agreement – Governmental Entity Page S-1
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.
SENIOR LENDER:
BERKADIA COMMERCIAL MORTGAGE
LLC, a Delaware limited liability company
By: _____________________
Amy Jesberger
Authorized Representative
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF MONTGOMERY
On ________________________ before me, _________________________________________, (Insert Name and Title of the Officer)
personally appeared Amy Jesberger, 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 Commonwealth of Pennsylvania that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature____________________________________(Seal)
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.
Subordination Agreement – Governmental Entity Page S-2
SUBORDINATE LENDER:
CITY OF PLEASANT HILL
By: ______________________________________
Name: ___________________________________
Title: ____________________________________
ACKNOWLEDGMENT
State of
County of
On _____________, 2025 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)
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.
Subordination Agreement – Governmental Entity Page S-3
CONSENT OF BORROWER
Borrower acknowledges receipt of a copy of this Subordination Agreement, dated _____________, 2025, by and between BERKADIA COMMERCIAL MORTGAGE LLC and CITY OF PLEASANT HILL and consents to the agreement of the parties set forth in this Agreement.
Subordination Agreement – Governmental Entity Page S-4
BORROWER:
BRIDGE GRAYSON CREEK ASSOCIATES,
a California limited partnership
By: CHURCH STREET HOUSING, INC.,
a California nonprofit public benefit corporation,
its General Partner
By: __________________
Name:
Title:
ACKNOWLEDGMENT
State of
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)
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.
Subordination Agreement – Governmental Entity Page A-1
EXHIBIT A
LEGAL DESCRIPTION
LPR Subord. Agrmt Page 1 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
FREE RECORDING IN ACCORDANCE
WITH CALIFORNIA GOVERNMENT
CODE SECTION 27383 and 27388.1.
RECORDING REQUESTED BY, AND
WHEN RECORDED, MAIL TO:
State of California
Department of Housing and
Community Development
Loan Portfolio Restructuring Program
P. O. Box 952052
Sacramento, CA 94252-2052
Attn: Legal Affairs Division
24-LPR-0109
SUBORDINATION AGREEMENT
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
THIS SUBORDINATION AGREEMENT (the "Agreement") is dated as of November 26, 2025, for reference purposes only, and is entered into by and among City of Pleasant Hill, as housing successor agency to the Pleasant Hill Redevelopment Agency, a political body corporate and politic (the "Junior Lienholder"), and BRIDGE Grayson Creek Associates, a California Limited Partnership, a California limited partnership (the "Borrower"), and the Department of Housing and Community Development, a public agency of the State of California (the "Senior Lender").
RECITALS
A. Borrower is the owner of the fee simple interest in that real property described in Exhibit A attached hereto and made a part hereof (the "Property"). The Borrower has acquired and is rehabilitating a 70-unit multifamily residential rental development on the Property (the "Improvements"). The Property and the Improvements are sometimes referred to collectively as the "Development."
B. The Junior Lienholder has made (i) a loan to the Borrower in the principal sum of One Million Five Thousand and no/100 Dollars ($1,005,000.00) (the "Junior Lienholder Loan") and a grant to the Borrower in the principal sum of Six Million Eight Hundred Fifteen Thousand and LPR Subord. Agrmt Page 2 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
no/100 Dollars ($6,815,000.00) (the “Junior Lienholder Grant”). The Junior Lienholder Loan is evidenced by a certain promissory note (the “Junior Lienholder Loan Note”) and the Junior Lienholder Grant is evidenced by a certain promissory note (the “Junior Lienholder Grant Note”), both of which are secured by a certain Amended and Restated Construction and Permanent Deed of Trust, Assignment of Rents, and Security Agreement (the “Junior Lienholder Deed of Trust”) recorded on October 19, 2001, as Instrument No. 2001-315912, in the Official Records of Contra Costa County, California (the “Official Records”).
1. The Junior Lienholder and Borrower have also entered into a “Amended and Restated Intercreditor Agreement” affecting the use of the Development, recorded on October 19, 2001, under Recorder's Serial Number 2001-0315910, in the Official Records (the “Junior Lienholder Intercreditor Agreement”).
2. The Junior Lienholder and Borrower have also entered into a Regulatory Agreement affecting the use of the Development, recorded on July 31, 1998, under Recorder's Serial Number 1998-0181887, as modified by a document recorded in the Official Records on October 19, 2001, as Instrument No. 2001- 315913 (collectively, the “Junior Lienholder Regulatory Agreement”).
3. The Junior Lienholder Deed of Trust, the Junior Lienholder Intercreditor Agreement, the Junior Lienholder Regulatory Agreement, and all other documents evidencing or securing the Junior Lienholder Loan and the Junior Lienholder Grant are collectively referred to herein as the “Junior Lienholder Documents”.
C. In order to finance the development of the Improvements, the Senior Lender has agreed to allow the Borrower to restructure an existing Senior Lender loan into a new Loan Portfolio Restructuring Program Loan in a sum not to exceed Five Million Seven Hundred Seventy Four Thousand Two Hundred Fifteen and 40/100 Dollars ($5,774,215.40) with accrued interest thereon (the "LPR Loan"), subject to the terms and conditions of: (i) that certain Loan Portfolio Restructuring Program Junior Regulatory Agreement and that certain Loan Portfolio Restructuring Program Senior Regulatory Agreement (Affordability Restrictions) restricting the use and occupancy of the Development and the income derived therefrom, both recorded concurrently herewith as encumbrances on the Property in the Official Records (collectively, the "LPR Regulatory Agreements"), and (ii) other loan documents. The LPR Loan will be evidenced by a promissory note (the "LPR Note"), the repayment of which will be secured by, among other things, a deed of trust by Borrower as trustor, to Department, as beneficiary, recorded concurrently herewith as an encumbrance on the Property in the Official Records (the "LPR Deed of Trust"), and by such other security as is identified in other loan documents. The LPR Regulatory Agreements, LPR Note, LPR Deed of Trust, and any and all other documents evidencing or securing the LPR Loan shall hereinafter be collectively referred to as the “Senior Lender Documents.”
D. The Senior Lender is willing to make the LPR Loan provided the Senior Lender Documents are liens, claims or charges upon the Development prior and superior to the Junior LPR Subord. Agrmt Page 3 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
Lienholder Documents, and provided that the Junior Lienholder specifically and unconditionally subordinates and subjects the Junior Lienholder Documents to the liens, claims or charges of the Senior Lender Documents.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce the Senior Lender to make its LPR Loan, it is hereby declared, understood and agreed as follows:
1. The Senior Lender Documents, and any and all renewals, modifications, extensions or advances thereunder or secured thereby (including interest thereon) shall unconditionally be and remain at all times liens, claims, or charges on the Development prior and superior to the Junior Lienholder Documents, and to all rights and privileges of the Junior Lienholder thereunder; and the Junior Lienholder Documents, together with all rights and privileges of the Junior Lienholder thereunder are hereby irrevocably and unconditionally subject and made subordinate to the liens, claims or charges of the Senior Lender Documents.
2. This Agreement shall be the whole and only agreement with regard to the subordination of the Junior Lienholder Documents, together with all rights and privileges of the Junior Lienholder thereunder, to the liens, claims or charges of the Senior Lender Documents, and this Agreement shall supersede and cancel any prior agreements to subordinate the claims, liens or charges of, but only insofar as would affect the priority between the claims, liens or charges of the Junior Lienholder Documents to the Senior Lender Documents including, but not limited to, those provisions, if any, contained in the Junior Lienholder Documents, which provide for the subordination of the lien or charge thereof to another lien or charge on the Property or the Improvements.
3. The Junior Lienholder declares, agrees and acknowledges that:
(a) The Junior Lienholder consents and approves (i) all provisions of the LPR Note, the LPR Deed of Trust and the LPR Regulatory Agreements, and (ii) all agreements among the Junior Lienholder, Borrower and Senior Lender for the disbursement of the proceeds of the LPR Loan, including without limitation any loan escrow agreements which have been provided to the Junior Lienholder for review; (b) The Senior Lender, in making disbursements of the LPR Loan pursuant to the LPR Note or any other agreement, is under no obligation or duty to, nor has the Senior Lender represented that it will, see to the application of such proceeds by the person or persons to whom the Senior Lender disburses such proceeds, and any application or use of such proceeds for purposes other than those provided for in such agreement or LPR Subord. Agrmt Page 4 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
agreements shall not defeat the subordination herein made in whole or in part; (c) That none of the execution, delivery or recordation of any of the LPR Note, LPR Deed of Trust, or LPR Regulatory Agreements, or the performance of any provision, condition, covenant or other term thereof, will conflict with or result in a breach of the Junior Lienholder Documents or the Junior Lienholder Note; and (d) The Junior Lienholder intentionally and unconditionally waives, relinquishes, subjects and subordinates the claims, liens or charges upon the Development of the Junior Lienholder Documents, all present and future indebtedness and obligations secured thereby, in favor of the claims, liens or charges upon the Development of the Senior Lender Documents, and understands that in reliance upon, and in consideration of, this waiver, relinquishment, subjection, and subordination, the LPR Loan and advances thereof are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment, subjection and subordination.
4. Senior Lender hereby agrees, but only as a separate and independent covenant of the Senior Lender and not as a condition to the continued effectiveness of the covenants and agreements of the Borrower and the Junior Lienholder as set forth herein, as follows:
(a) Following a notice from the Senior Lender to the Borrower that a default or breach exists under the terms of the Senior Lender Documents and each of them, the Senior Lender shall promptly (but in no event later than the following business day) send a copy of such notice to the Junior Lienholder and the Junior Lienholder shall have the right, but not the obligation, to cure the default as follows:
(i) If the default is reasonably capable of being cured within thirty (30) days, as determined by the Senior Lender in its sole discretion, the Junior Lienholder shall have such period to effect a cure prior to exercise of remedies by Senior Lender under the Senior Lender Documents, or such longer period of time as may be specified in the Senior Lender Documents.
(ii) If the default is such that it is not reasonably capable of being cured within thirty (30) days, as determined by the Senior Lender in its sole discretion, or such longer period if so specified, and if the Junior Lienholder (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then the Junior Lienholder shall have such additional time as is determined by the Senior Lender, in its sole discretion, to be reasonably necessary to cure the default prior to exercise of any LPR Subord. Agrmt Page 5 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
remedies by Senior Lender.
In no event shall Senior Lender be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given, or such longer period of time as may be specified in the Senior Lender Documents.
Nothing in this subparagraph (a) is intended to modify any covenant, term or condition contained in the Senior Lender Documents, including, without limitation, the covenant against creating or recording any liens or encumbrances against the Property without the prior written approval of the Senior Lender.
(b) The provisions of this paragraph 4 are intended to supplement, and not to limit, waive, modify or replace, those provisions of law pertaining to notice and cure rights of junior lenders including, without limitation, those set forth in California Civil Code sections 2924b and 2924c.
5. The Senior Lender would not make the LPR Loan without this Agreement.
6. This Agreement shall be binding on and inure to the benefit of the legal representatives, heirs, successors and assigns of the parties.
7. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
8. In the event that any party to this Agreement brings an action to interpret or enforce its rights under this Agreement, the prevailing party in such action shall be entitled to recover its costs and reasonable attorneys' fees as awarded by the court in such action.
9. This Agreement may be signed by different parties hereto in counterparts with the same effect as if the signatures to each counterpart were upon a single instrument. All counterparts shall be deemed an original of this Agreement. [Signatures commence on following page.]
[Remainder of this page is intentionally left blank.]
LPR Subord. Agrmt Page 6 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
ALLOWS THE PERSON (OR ENTITY) OBLIGATED ON YOUR REAL PROPERTY
SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above and agree to be bound hereby:
JUNIOR LIENHOLDER:
City of Pleasant Hill as the housing
successor to the Pleasant Hill
Redevelopment Agency,
a California municipal corporation
By:
Name:
Title:
APPROVED AS TO FORM:
BY:
NAME:
ITS:
[Signatures continue on following page.]
[Remainder of this page is intentionally left blank.]
LPR Subord. Agrmt Page 7 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
BORROWER:
BRIDGE Grayson Creek Associates,
a California limited partnership
By:Church Street Housing, Inc.,
a California nonprofit public benefit corporation
Its: Managing General Partner
By:
Sierra Atilano, Vice President
[Signatures continue on following page.]
[Remainder of this page is intentionally left blank.]
LPR Subord. Agrmt Page 8 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
SENIOR LENDER:
Department of Housing and Community Development,
a public agency of the State of California
By:
Emeline T. Alvarez, Manager
Transactions Unit
[All signatures must be acknowledged.]
[Remainder of this page is intentionally left blank.]
LPR Subord. Agrmt Page 9 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Pleasant Hill, County of Contra Costa, State of California, described as follows:
PARCEL ONE:
Parcel “B”, as shown on the Parcel Map recorded March 9, 1972, in Book 21 of Maps, at
Parcel Maps, at Page 19, Contra Costa County Records, described as follows:
Beginning at the northeast corner of said Parcel “B” (21 PM 10); thence from said point of beginning along the exterior lines of said Parcel “B” the following courses: South 43° 15’ 15” East 131.15 feet to the beginning of a tangent curve concave to the northeast, having a radius of 424.98 feet; a radial line to the beginning of said curve bears South 46° 44’ 45” West; thence southeasterly 154.99 feet along the arc of said curve through a central angle of 20° 53’ 44” a radial line to the end of said curve bears South 25° 51’ 01” West to the beginning of a non-tangent curve concave to the North, having a radius of 1940.00 feet, a radial line to the beginning of said curve bears South 17° 37’ 15” East; thence westerly 326.25 feet along the arc of said curve through a central angle of 09° 38’ 08”; thence South 07° 59’ 07” East
10.00 feet to the beginning of a non-tangent curve concave to the North, having a radius of 550.00 feet, a radial line to the beginning of said curve bears South 07° 59’ 07” East; thence westerly 44.48 feet along the arc of said curve through a central angle of 04° 38’ 02”; thence North 20° 30’ 00” West 200.35 feet to the northwest corner of said parcel “B” (21 PM 10) being the southwest corner of said Parcel “2” (94 PM 19); thence leaving said exterior line of Parcel “B” along the exterior line of said Parcel “2” (94 PM 19) the following courses: North 57° 00’ 00” West 38.00 feet; thence North 33° 00’ 00” East 111.00 feet; thence North 05° 12’ 06” West 33.16 feet; thence North 60° 29’ 30” West 160.00 feet; thence North 77° 30’ 16” West 60.00 feet; thence North 06° 01’ 53” East, 497.23 feet to the beginning of a non-tangent curve concave to the North, having a radius of 35.00 feet, a radial line to the beginning of said curve bears South 37° 49’ 14” West; thence easterly 23.71 feet along the arc of said curve through a central angle of 38° 48’ 48” to the beginning of a reverse curve concave to the West, having a radius of 42.00 feet, a radial line to the beginning of said curve bears North 00° 59’ 34” West; thence southerly 19.27 feet along the arc of said curve through a central angle of 124° 30’ 44”; thence South 56° 32’ 57” East, 20.87 feet to the beginning of a non-tangent curve concave to the East, having a radius of 349.98 feet, a radial line to the beginning of said curve bears North 89° 10’ 05” West; thence southerly 146.86 feet along the arc of said curve through a central angle of 24° 02’ 35”; thence South 23° 12’ 40” East, 225.75 feet to the beginning of a tangent curve concave to the northeast, having a radius of 674.96 feet; a radial line to the beginning of said curve bears South 66° 47’ 20” West; thence southeasterly 236.11 feet through a central angle of 20° 02’ 35”; thence South 43° 15’ 15” East 22.58 feet to the point of beginning.
LPR Subord. Agrmt Page 10 of 10
Rev: 3/5/2024
Prep: 10/28/2025 (RDA of the City of Pleasant Hill Loan) Dev: Grayson Creek Apartments
Assessor’s Identification Number: 153-030-105-8 & 153-030-077-9 Loan No.: 24-LPR-0109 (formerly, 00-MHP-0021)
Said Parcel One is also described in that certain Certificate of Lot Line Adjustment recorded July 28, 1999, Series No. 99-201561, Contra Costa County Records.
PARCEL TWO:
A non-exclusive easement appurtenant to Parcel One above for roadway access purposes and the installation and maintenance of sanitary sewers, storm drainage facilities, gas, electric, telephone, water, cable television and other utilities or facilities deemed necessary by county in, on, over and across the following described parcel of land:
Beginning at a point on the North line of Chilpancingo Parkway at the most southeasterly corner of Parcel “1” as said parcel is shown on the Parcel Map filed April 20, 1981 in Book 94 of Parcel Maps at Page 19, Contra Costa County Records, thence along the exterior line of said Parcel 1, North 20° 30’ 00” West, 200.35 feet; thence leaving said exterior line, North 57° 00’ 00” West, 38.00 feet; South 33° 00’ 00” West, 27.86 feet; South 20° 30’ 00” East, 145.00 feet and South 15° 46’ 14” West, 49.91 feet to the northerly line of said Chilpancingo Parkway; thence easterly along said northerly line 80.12 feet, more or less, to the point of beginning.
APN: 153-030-105 and 153-030-077