1.00 ITD329558001 Assistant Information Technology Director 1.00 ITD329558002 Assistant Information Technology Director 1.00 Total for Department: ITD Information Technology Department 58.00 Position Code Position Title Allocated FTE
CMO143451001 Government Relations Administrator 1.00
PAC181108001 Public Affairs and Communication Manager 1.00 PAC181109001 Digital Content Analyst 1.00
PAC181645001 Department Public Information Officer 1.00 PAC181645002 Department Public Information Officer 1.00 PAC181659001 Deputy City Manager 1.00
PAC184517001 Marketing and Communication Analyst I/II 1.00 PAC184517002 Marketing and Communication Analyst I/II 1.00 PAC188426001 Video and Multimedia Technician 1.00
Total for Department: PAC Public Affairs and Communications 9.00 Position Code Position Title Allocated FTE
POL440050001 Management Analyst I/II 1.00
POL440071001 Administrative Assistant 1.00
POL440100001 Animal Control Officer 1.00
POL440100002 Animal Control Officer 1.00
POL440100003 Animal Control Officer 1.00
POL440110001 Animal Control Supervisor 1.00
POL441092001 Senior Police Records Clerk 1.00
POL441092002 Senior Police Records Clerk 1.00
POL441094001 Police Property and Evidence Technician I/II 1.00 POL441094002 Police Property and Evidence Technician I/II 1.00 POL441094003 Police Property and Evidence Technician I/II 1.00 POL441094004 Police Property and Evidence Technician I/II 1.00 POL441126001 Police Social Services Supervisor 1.00
POL441138001 Police Social Services Practitioner I 1.00 POL441380001 Community Services Officer I/II 1.00
POL441380002 Community Services Officer I/II 1.00
POL441380003 Community Services Officer I/II 1.00
POL441380004 Community Services Officer I/II 1.00
POL441380005 Community Services Officer I/II 1.00
POL441380006 Community Services Officer I/II 1.00
POL441380007 Community Services Officer I/II 1.00
POL441380008 Community Services Officer I/II 1.00
POL441380009 Community Services Officer I/II 1.00
POL441380010 Community Services Officer I/II 1.00
POL441380011 Community Services Officer I/II 1.00
POL441430001 Communications Supervisor 1.00
POL441430002 Communications Supervisor 1.00
POL441430003 Communications Supervisor 1.00
POL441430004 Communications Supervisor 1.00
POL441475001 Crime Analyst 1.00
POL441475002 Crime Analyst 1.00
POL441700001 Dispatcher I/II 1.00
POL441700002 Dispatcher I/II 1.00
POL441700003 Dispatcher I/II 1.00
POL441700004 Dispatcher I/II 1.00
POL441700005 Dispatcher I/II 1.00
POL441700006 Dispatcher I/II 1.00
POL441700007 Dispatcher I/II 1.00
POL441700008 Dispatcher I/II 1.00
POL441700009 Dispatcher I/II 1.00
POL441700010 Dispatcher I/II 1.00
POL441700011 Dispatcher I/II 1.00
POL441700012 Dispatcher I/II 1.00
POL441700013 Dispatcher I/II 1.00
POL441700014 Dispatcher I/II 1.00
POL441700015 Dispatcher I/II 1.00
POL441700016 Dispatcher I/II 1.00
POL441700017 Dispatcher I/II 1.00
POL441700018 Dispatcher I/II 1.00
POL441700019 Dispatcher I/II 1.00
POL441700020 Dispatcher I/II 1.00
POL441700021 Dispatcher I/II 1.00
POL445400001 Police Captain 1.00
POL445400002 Police Captain 1.00
POL445400003 Police Captain 1.00
POL445410001 Police Chief 1.00
POL445420001 Police Lieutenant 1.00
POL445420002 Police Lieutenant 1.00
POL445420003 Police Lieutenant 1.00
POL445420004 Police Lieutenant 1.00
POL445420005 Police Lieutenant 1.00
POL445420006 Police Lieutenant 1.00
POL445420007 Police Lieutenant 1.00
POL445420008 Police Lieutenant 1.00
POL445429001 Police Property and Evidence Supervisor 1.00 POL445430001 Police Officer/Police Trainee 1.00
POL445430002 Police Officer/Police Trainee 1.00
POL445430003 Police Officer/Police Trainee 1.00
POL445430004 Police Officer/Police Trainee 1.00
POL445430005 Police Officer/Police Trainee 1.00
POL445430007 Police Officer/Police Trainee 1.00
POL445430008 Police Officer/Police Trainee 1.00
POL445430009 Police Officer/Police Trainee 1.00
POL445430010 Police Officer/Police Trainee 1.00
POL445430011 Police Officer/Police Trainee 1.00
POL445430012 Police Officer/Police Trainee 1.00
POL445430013 Police Officer/Police Trainee 1.00
POL445430014 Police Officer/Police Trainee 1.00
POL445430015 Police Officer/Police Trainee 1.00
POL445430016 Police Officer/Police Trainee 1.00
POL445430017 Police Officer/Police Trainee 1.00
POL445430018 Police Officer/Police Trainee 1.00
POL445430019 Police Officer/Police Trainee 1.00
POL445430020 Police Officer/Police Trainee 1.00
POL445430021 Police Officer/Police Trainee 1.00
POL445430022 Police Officer/Police Trainee 1.00
POL445430023 Police Officer/Police Trainee 1.00
POL445430024 Police Officer/Police Trainee 1.00
POL445430025 Police Officer/Police Trainee 1.00
POL445430026 Police Officer/Police Trainee 1.00
POL445430027 Police Officer/Police Trainee 1.00
POL445430028 Police Officer/Police Trainee 1.00
POL445430029 Police Officer/Police Trainee 1.00
POL445430030 Police Officer/Police Trainee 1.00
POL445430031 Police Officer/Police Trainee 1.00
POL445430032 Police Officer/Police Trainee 1.00
POL445430033 Police Officer/Police Trainee 1.00
POL445430034 Police Officer/Police Trainee 1.00
POL445430035 Police Officer/Police Trainee 1.00
POL445430036 Police Officer/Police Trainee 1.00
POL445430037 Police Officer/Police Trainee 1.00
POL445430038 Police Officer/Police Trainee 1.00
POL445430039 Police Officer/Police Trainee 1.00
POL445430040 Police Officer/Police Trainee 1.00
POL445430041 Police Officer/Police Trainee 1.00
POL445430042 Police Officer/Police Trainee 1.00
POL445430043 Police Officer/Police Trainee 1.00
POL445430044 Police Officer/Police Trainee 1.00
POL445430045 Police Officer/Police Trainee 1.00
POL445430046 Police Officer/Police Trainee 1.00
POL445430047 Police Officer/Police Trainee 1.00
POL445430048 Police Officer/Police Trainee 1.00
POL445430049 Police Officer/Police Trainee 1.00
POL445430050 Police Officer/Police Trainee 1.00
POL445430051 Police Officer/Police Trainee 1.00
POL445430052 Police Officer/Police Trainee 1.00
POL445430053 Police Officer/Police Trainee 1.00
POL445430054 Police Officer/Police Trainee 1.00
POL445430055 Police Officer/Police Trainee 1.00
POL445430056 Police Officer/Police Trainee 1.00
POL445430057 Police Officer/Police Trainee 1.00
POL445430058 Police Officer/Police Trainee 1.00
POL445430059 Police Officer/Police Trainee 1.00
POL445430060 Police Officer/Police Trainee 1.00
POL445430061 Police Officer/Police Trainee 1.00
POL445430062 Police Officer/Police Trainee 1.00
POL445430063 Police Officer/Police Trainee 1.00
POL445430064 Police Officer/Police Trainee 1.00
POL445430065 Police Officer/Police Trainee 1.00
POL445430066 Police Officer/Police Trainee 1.00
POL445430067 Police Officer/Police Trainee 1.00
POL445430068 Police Officer/Police Trainee 1.00
POL445430069 Police Officer/Police Trainee 1.00
POL445430070 Police Officer/Police Trainee 1.00
POL445430071 Police Officer/Police Trainee 1.00
POL445430072 Police Officer/Police Trainee 1.00
POL445430073 Police Officer/Police Trainee 1.00
POL445430074 Police Officer/Police Trainee 1.00
POL445430075 Police Officer/Police Trainee 1.00
POL445430076 Police Officer/Police Trainee 1.00
POL445430077 Police Officer/Police Trainee 1.00
POL445430078 Police Officer/Police Trainee 1.00
POL445430079 Police Officer/Police Trainee 1.00
POL445430080 Police Officer/Police Trainee 1.00
POL445430081 Police Officer/Police Trainee 1.00
POL445430082 Police Officer/Police Trainee 1.00
POL445430083 Police Officer/Police Trainee 1.00
POL445430084 Police Officer/Police Trainee 1.00
POL445430085 Police Officer/Police Trainee 1.00
POL445430086 Police Officer/Police Trainee 1.00
POL445430087 Police Officer/Police Trainee 1.00
POL445430088 Police Officer/Police Trainee 1.00
POL445430089 Police Officer/Police Trainee 1.00
POL445430090 Police Officer/Police Trainee 1.00
POL445430091 Police Officer/Police Trainee 1.00
POL445430092 Police Officer/Police Trainee 1.00
POL445430093 Police Officer/Police Trainee 1.00
POL445430094 Police Officer/Police Trainee 1.00
POL445430095 Police Officer/Police Trainee 1.00
POL445430096 Police Officer/Police Trainee 1.00
POL445430097 Police Officer/Police Trainee 1.00
POL445430098 Police Officer/Police Trainee 1.00
POL445430099 Police Officer/Police Trainee 1.00
POL445430100 Police Officer/Police Trainee 1.00
POL445430101 Police Officer/Police Trainee 1.00
POL445430102 Police Officer/Police Trainee 1.00
POL445430103 Police Officer/Police Trainee 1.00
POL445430104 Police Officer/Police Trainee 1.00
POL445430105 Police Officer/Police Trainee 1.00
POL445430106 Police Officer/Police Trainee 1.00
POL445430107 Police Officer/Police Trainee 1.00
POL445430108 Police Officer/Police Trainee 1.00
POL445430109 Police Officer/Police Trainee 1.00
POL445430110 Police Officer/Police Trainee 1.00
POL445430111 Police Officer/Police Trainee 1.00
POL445430112 Police Officer/Police Trainee 1.00
POL445430113 Police Officer/Police Trainee 1.00
POL445430114 Police Officer/Police Trainee 1.00
POL445430115 Police Officer/Police Trainee 1.00
POL445430116 Police Officer/Police Trainee 1.00
POL445430117 Police Officer/Police Trainee 1.00
POL445430118 Police Officer/Police Trainee 1.00
POL445430119 Police Officer/Police Trainee 1.00
POL445430120 Police Officer/Police Trainee 1.00
POL445430121 Police Officer/Police Trainee 1.00
POL445430122 Police Officer/Police Trainee 1.00
POL445430123 Police Officer/Police Trainee 1.00
POL445430124 Police Officer/Police Trainee 1.00
POL445430125 Police Officer/Police Trainee 1.00
POL445440001 Police Records Clerk I/II 1.00
POL445440002 Police Records Clerk I/II 1.00
POL445440003 Police Records Clerk I/II 1.00
POL445440004 Police Records Clerk I/II 1.00
POL445440005 Police Records Clerk I/II 1.00
POL445440007 Police Records Clerk I/II 1.00
POL445440008 Police Records Clerk I/II 1.00
POL445440009 Police Records Clerk I/II 1.00
POL445440010 Police Records Clerk I/II 1.00
POL445470001 Police Sergeant 1.00
POL445470002 Police Sergeant 1.00
POL445470003 Police Sergeant 1.00
POL445470004 Police Sergeant 1.00
POL445470005 Police Sergeant 1.00
POL445470006 Police Sergeant 1.00
POL445470007 Police Sergeant 1.00
POL445470008 Police Sergeant 1.00
POL445470009 Police Sergeant 1.00
POL445470010 Police Sergeant 1.00
POL445470011 Police Sergeant 1.00
POL445470012 Police Sergeant 1.00
POL445470013 Police Sergeant 1.00
POL445470014 Police Sergeant 1.00
POL445470015 Police Sergeant 1.00
POL445470016 Police Sergeant 1.00
POL445470017 Police Sergeant 1.00
POL445489001 Police Services Administrator 1.00
POL445489002 Police Services Administrator 1.00
POL445494001 Police Scene Technician I/II 1.00
POL445494002 Police Scene Technician I/II 1.00
POL445494003 Police Scene Technician I/II 1.00
POL445494004 Police Scene Technician I/II 1.00
POL445657001 Public Safety Program Coordinator 1.00
POL445748001 Records Supervisor 1.00
POL445748002 Records Supervisor 1.00
Total for Department: POL Police Department 224.00
Position Code Position Title Allocated FTE
PRL580050001 Management Analyst I/II 1.00
PRL580050002 Management Analyst I/II 1.00
PRL580050003 Management Analyst I/II 1.00
PRL580071001 Administrative Assistant 1.00
PRL580084001 Administrative Technician 1.00
PRL580084002 Administrative Technician 1.00
PRL580084003 Administrative Technician 1.00
PRL580084004 Administrative Technician 1.00
PRL580084005 Administrative Technician 1.00
PRL580084006 Administrative Technician 1.00
PRL580084007 Administrative Technician 1.00
PRL580084008 Administrative Technician 1.00
PRL581101001 Graphic Designer 0.75
PRL581106001 Park Planning and Development Manager 1.00 PRL581107001 Turf and Sports Field Technician 1.00
PRL581119001 Senior Park Development Project Manager 1.00 PRL581121001 Museum Assistant 1.00
PRL581142001 City Librarian 1.00
PRL581143002 Recreation Superintendent 1.00
PRL581143004 Recreation Superintendent 1.00
PRL581143005 Recreation Superintendent 1.00
PRL581144002 Recreation Supervisor 1.00
PRL581144003 Recreation Supervisor 1.00
PRL581144004 Recreation Supervisor 1.00
PRL581144006 Recreation Supervisor 1.00
PRL581144007 Recreation Supervisor 1.00
PRL581144008 Recreation Supervisor 1.00
PRL581225001 Child Care Site Coordinator 1.00
PRL581225002 Child Care Site Coordinator 1.00
PRL581225003 Child Care Site Coordinator 1.00
PRL581225004 Child Care Site Coordinator 1.00
PRL581225005 Child Care Site Coordinator 1.00
PRL581225006 Child Care Site Coordinator 1.00
PRL581225007 Child Care Site Coordinator 1.00
PRL581225008 Child Care Site Coordinator 1.00
PRL581225009 Child Care Site Coordinator 1.00
PRL581225010 Child Care Site Coordinator 1.00
PRL581225011 Child Care Site Coordinator 1.00
PRL581225012 Child Care Site Coordinator 1.00
PRL581225013 Child Care Site Coordinator 1.00
PRL581225014 Child Care Site Coordinator 1.00
PRL581278001 Parks Project Technician 1.00
PRL581278002 Parks Project Technician 1.00
PRL581278003 Parks Project Technician 1.00
PRL581278004 Parks Project Technician 1.00
PRL581278005 Parks Project Technician 1.00
PRL581278006 Parks Project Technician 1.00
PRL581504001 Tree Trimmer I/II 1.00
PRL581504002 Tree Trimmer I/II 1.00
PRL581641001 Youth Development Program Coordinator 1.00 PRL581641003 Youth Development Program Coordinator 1.00 PRL581641004 Youth Development Program Coordinator 1.00 PRL581645002 Department Public Information Officer 1.00 PRL583733001 Senior Interpretive Services Specialist 1.00 PRL583740001 Cultural Arts Supervisor 1.00
PRL584152001 Librarian I/II 1.00
PRL584152002 Librarian I/II 1.00
PRL584152003 Librarian I/II 1.00
PRL584152004 Librarian I/II 1.00
PRL584152005 Librarian I/II 1.00
PRL584152007 Librarian I/II 0.50
PRL584210001 Library Assistant I/II 1.00
PRL584210002 Library Assistant I/II 1.00
PRL584210003 Library Assistant I/II 1.00
PRL584210005 Library Assistant I/II 1.00
PRL584250001 Library Technician 1.00
PRL584250002 Library Technician 1.00
PRL584250003 Library Technician 1.00
PRL584517001 Marketing and Communication Analyst I/II 1.00 PRL584517002 Marketing and Communication Analyst I/II 1.00 PRL584872001 Natural Resources Worker I/II 1.00
PRL584872002 Natural Resources Worker I/II 1.00
PRL584872003 Natural Resources Worker I/II 1.00
PRL584872004 Natural Resources Worker I/II 1.00
PRL584872005 Natural Resources Worker I/II 1.00
PRL584872006 Natural Resources Worker I/II 1.00
PRL584957002 Office Assistant I/II 1.00
PRL584957003 Office Assistant I/II 1.00
PRL584957006 Office Assistant I/II 1.00
PRL584957009 Office Assistant I/II 1.00
PRL585022001 Park Development Project Manager I/II 1.00 PRL585022002 Park Development Project Manager I/II 1.00 PRL585069001 Parks and Open Space Supervisor 1.00
PRL585069002 Parks and Open Space Supervisor 1.00
PRL585069003 Parks and Open Space Supervisor 1.00
PRL585069004 Parks and Open Space Supervisor 1.00
PRL585075002 Irrigation Technician 1.00
PRL585080001 Parks Maintenance Worker I/II 1.00
PRL585080002 Parks Maintenance Worker I/II 1.00
PRL585080003 Parks Maintenance Worker I/II 1.00
PRL585080004 Parks Maintenance Worker I/II 1.00
PRL585080006 Parks Maintenance Worker I/II 1.00
PRL585080007 Parks Maintenance Worker I/II 1.00
PRL585080008 Parks Maintenance Worker I/II 1.00
PRL585080009 Parks Maintenance Worker I/II 1.00
PRL585080010 Parks Maintenance Worker I/II 1.00
PRL585080011 Parks Maintenance Worker I/II 1.00
PRL585080012 Parks Maintenance Worker I/II 1.00
PRL585080013 Parks Maintenance Worker I/II 1.00
PRL585080014 Parks Maintenance Worker I/II 1.00
PRL585080015 Parks Maintenance Worker I/II 1.00
PRL585080016 Parks Maintenance Worker I/II 1.00
PRL585080017 Parks Maintenance Worker I/II 1.00
PRL585080018 Parks Maintenance Worker I/II 1.00
PRL585080019 Parks Maintenance Worker I/II 1.00
PRL585080020 Parks Maintenance Worker I/II 1.00
PRL585080021 Parks Maintenance Worker I/II 1.00
PRL585080022 Parks Maintenance Worker I/II 1.00
PRL585080023 Parks Maintenance Worker I/II 1.00
PRL585080024 Parks Maintenance Worker I/II 1.00
PRL585080025 Parks Maintenance Worker I/II 1.00
PRL585080026 Parks Maintenance Worker I/II 1.00
PRL585082001 Parks Recreation and Libraries Director 1.00 PRL587154001 Senior Natural Resources Worker 1.00
PRL587192002 Senior Parks Maintenance Worker 1.00
PRL587192003 Senior Parks Maintenance Worker 1.00
PRL587192004 Senior Parks Maintenance Worker 1.00
PRL587192005 Senior Parks Maintenance Worker 1.00
PRL587192006 Senior Parks Maintenance Worker 1.00
PRL587201001 Senior Tree Trimmer 1.00
PRL588300001 Arborist Technician 1.00
PRL588302001 Aquatics Maintenance Technician 1.00
PRL588304001 Recreation Leader 1.00
PRL588304002 Recreation Leader 1.00
PRL588304003 Recreation Leader 1.00
PRL588304004 Recreation Leader 1.00
PRL588304005 Recreation Leader 1.00
PRL588762001 Urban Forester 1.00
PRL589543001 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543002 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543003 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543004 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543006 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543007 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543008 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543009 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543010 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589543011 Parks Recreation and Libraries Coordinator I/II 1.00 PRL589544001 Library Supervisor 1.00
PRL589544005 Library Supervisor 1.00
PRL589544009 Library Supervisor 1.00
PRL589545001 Natural Resources Specialist I/II 1.00
PRL589546001 Parks and Open Space Superintendent 1.00
PRL589546003 Parks and Open Space Superintendent 1.00
PRL589547002 Parks Recreation and Libraries Manager 1.00 PRL589547003 Parks Recreation and Libraries Manager 1.00 PRL589547004 Parks Recreation and Libraries Manager 1.00 Total for Department: PRL Parks Recreation and Libraries 146.25 Position Code Position Title Allocated FTE
PWD620084006 Administrative Technician 0.75
PWD620084005 Administrative Technician 1.00
PWD620084004 Administrative Technician 1.00
PWD620084003 Administrative Technician 1.00
PWD620084002 Administrative Technician 1.00
PWD620084001 Administrative Technician 1.00
PWD620090001 Alternative Transportation Manager 1.00
PWD621005012 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005011 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005010 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005009 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005008 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005007 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005006 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005005 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005004 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005003 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005002 Associate (PE)/Assistant/Junior Engineer 1.00 PWD621005001 Associate (PE)/Assistant/Junior Engineer 1.00 PWD620088003 Associate/Assistant Transportation Planner 1.00 PWD621032006 Building Maintenance Worker I/II 1.00
PWD621032005 Building Maintenance Worker I/II 1.00
PWD621032004 Building Maintenance Worker I/II 1.00
PWD621032003 Building Maintenance Worker I/II 1.00
PWD621032002 Building Maintenance Worker I/II 1.00
PWD621032001 Building Maintenance Worker I/II 1.00
PWD621401001 Community Relations Analyst 1.00
PWD621485005 Custodian 1.00
PWD621485004 Custodian 1.00
PWD621485003 Custodian 1.00
PWD621485002 Custodian 1.00
PWD621485001 Custodian 1.00
PWD621025001 Custodian Supervisor 1.00
PWD622385005 Electronics Technician I/II/III 1.00
PWD622385004 Electronics Technician I/II/III 1.00
PWD622385003 Electronics Technician I/II/III 1.00
PWD622385002 Electronics Technician I/II/III 1.00
PWD622385001 Electronics Technician I/II/III 1.00
PWD621277001 Engineering Manager 1.00
PWD621350001 Engineering Technician I/II 1.00
PWD622560004 Equipment Serviceworker 1.00
PWD622560003 Equipment Serviceworker 1.00
PWD622560002 Equipment Serviceworker 1.00
PWD622560001 Equipment Serviceworker 1.00
PWD624321001 Facilities Supervisor 1.00
PWD623319001 Fleet Management Technician 1.00
PWD621113001 Fleet Services Parts Buyer 1.00
PWD622565001 Fleet Services Supervisor 1.00
PWD622214001 GIS Technician I/II 1.00
PWD621140001 Intelligent Transportation Systems Maintenance Supervisor
1.00 PWD620050002 Management Analyst I/II 1.00
PWD620050001 Management Analyst I/II 1.00
PWD624501010 Mechanic I/II 1.00
PWD624501009 Mechanic I/II 1.00
PWD624501008 Mechanic I/II 1.00
PWD624501007 Mechanic I/II 1.00
PWD624501006 Mechanic I/II 1.00
PWD624501005 Mechanic I/II 1.00
PWD624501004 Mechanic I/II 1.00
PWD624501003 Mechanic I/II 1.00
PWD624501002 Mechanic I/II 1.00
PWD624501001 Mechanic I/II 1.00
PWD624957008 Office Assistant I/II 1.00
PWD624957007 Office Assistant I/II 0.50
PWD624957006 Office Assistant I/II 1.00
PWD624957005 Office Assistant I/II 1.00
PWD624957003 Office Assistant I/II 1.00
PWD624957002 Office Assistant I/II 1.00
PWD624957001 Office Assistant I/II 1.00
PWD625560003 Project Coordinator 1.00
PWD625560002 Project Coordinator 1.00
PWD625560001 Project Coordinator 1.00
PWD621069001 Project Supervisor 1.00
PWD625635001 Public Works Director 1.00
PWD621087002 Public Works Manager 1.00
PWD621087001 Public Works Manager 1.00
PWD627119001 Senior Building Maintenance Worker 1.00
PWD627144001 Senior Custodian 1.00
PWD627170001 Senior Electronic Technician 1.00
PWD627142003 Senior Engineer 1.00
PWD627142002 Senior Engineer 1.00
PWD627142001 Senior Engineer 1.00
PWD627189002 Senior Mechanic 1.00
PWD627189001 Senior Mechanic 1.00
PWD627187006 Senior Street Maintenance Worker 1.00
PWD627187005 Senior Street Maintenance Worker 1.00
PWD627187004 Senior Street Maintenance Worker 1.00
PWD627187003 Senior Street Maintenance Worker 1.00
PWD627187002 Senior Street Maintenance Worker 1.00
PWD627187001 Senior Street Maintenance Worker 1.00
PWD621073001 Street Maintenance Manager 1.00
PWD627522003 Street Maintenance Supervisor 1.00
PWD627522002 Street Maintenance Supervisor 1.00
PWD627522001 Street Maintenance Supervisor 1.00
PWD627530020 Street Maintenance Worker I/II 1.00
PWD627530019 Street Maintenance Worker I/II 1.00
PWD627530018 Street Maintenance Worker I/II 1.00
PWD627530017 Street Maintenance Worker I/II 1.00
PWD627530016 Street Maintenance Worker I/II 1.00
PWD627530015 Street Maintenance Worker I/II 1.00
PWD627530014 Street Maintenance Worker I/II 1.00
PWD627530013 Street Maintenance Worker I/II 1.00
PWD627530012 Street Maintenance Worker I/II 1.00
PWD627530011 Street Maintenance Worker I/II 1.00
PWD627530010 Street Maintenance Worker I/II 1.00
PWD627530009 Street Maintenance Worker I/II 1.00
PWD627530008 Street Maintenance Worker I/II 1.00
PWD627530007 Street Maintenance Worker I/II 1.00
PWD627530006 Street Maintenance Worker I/II 1.00
PWD627530005 Street Maintenance Worker I/II 1.00
PWD627530004 Street Maintenance Worker I/II 1.00
PWD627530003 Street Maintenance Worker I/II 1.00
PWD627530002 Street Maintenance Worker I/II 1.00
PWD627530001 Street Maintenance Worker I/II 1.00
PWD627540005 Street Sweeper Operator 1.00
PWD627540004 Street Sweeper Operator 1.00
PWD627540003 Street Sweeper Operator 1.00
PWD627540002 Street Sweeper Operator 1.00
PWD627540001 Street Sweeper Operator 1.00
PWD622376002 Traffic Signal Maintenance Worker I/II 1.00 PWD622376001 Traffic Signal Maintenance Worker I/II 1.00 PWD621110001 Transit Operations Supervisor 1.00
PWD621052001 Transportation Grants Analyst 1.00
PWD621111001 Transportation Technician I/II 1.00
PWD628940001 Vehicle Maintenance Servicewriter 1.00
PWD628952001 Warehouse Worker I/II 1.00
Total for Department: PWD Public Works 127.25
Total for All Departments 1,366.85
COUNCIL COMMUNICATION
CC #: 3239
File #: 0800-03 & 0201-01
Title: Electric Department - Capital Improvement Project Approval and Budget Adjustment Contact: Chris Porter 916-774-5615 [email protected] Meeting Date: 4/3/2024
Item #: 7.29.
RECOMMENDATION TO COUNCIL
Staff recommends that the City Council approve the establishment of a new Capital Improvement Project – the Electric Roseville Power Plant 2 Engine Rehab (the "Project"), and adopt an ordinance to approve a budget adjustment to capital improvement projects for the Electric Department.
BACKGROUND
The Electric Department has several projects that have either come in under budget or experienced unanticipated cost increases. The following details the multiple budget adjustments needed and result in a net zero impact to the Electric Fund:
Zero Liquid Discharge (ZLD) Improvements to be defunded - ($144,755) All work associated with the ZLD improvements at the Roseville Energy Park have been complete, no additional expenditures are required, and this project can be closed.
Turbine and Heat Recovery Steam Generator (HRSG) Rehab - $357,091 Unanticipated cost increases on materials and additional labor were required to complete this work. An additional $357,091 of budget authority is required to close this project.
Balance of Plant Rehab to be defunded - ($135,948)
This project is expected to be complete under budget and can be defunded by $135,948.
Critical Systems Rehab to be defunded - ($399,629)
All work associated with this project at the Roseville Energy Park have been complete, no additional expenditures are required, and the project can be closed.
Roseville Power Plant 2 Rehab to be defunded - ($389,147) This project is expected to be complete under budget and can be defunded by $135,948.
Roseville Energy Park Site Security to be defunded - ($1,275,852) This project initially included the construction of a block wall around a portion of the Roseville Energy Park. A more detailed assessment was performed and deemed this item not required.
The necessary work requires less funding and this project can be defunded by $1,275,852.
Duct Burners and Programmable Logic Controllers (PLC) to be defunded - ($771,009) The scope of this project anticipated the need to replace the burners in addition to the PLC.
Once the equipment was taken out of service and inspected, it was determined that the burners did not require replacement. The necessary work requires less funding and this project can be defunded by $771,009.
Electric 60kV Reconductor - $75,000
Difficulties were experienced accessing the poles necessary to complete this reconductor work.
This requires additional labor to complete and an increase in budget authority of $75,000 to complete the project.
Roseville Power Plant 2 (RPP2) Engine Rehab - $2,684,250 During recent boroscope inspections of one of the combustion turbines at RPP2, cracking was discovered and a rebuild of the engine is required. In order to complete this work, a project needs to be created and a budget adjustment of $2,684,250 to authorize the necessary spending is required.
FISCAL IMPACT
Approval of the establishment of a new Capital Improvement Project – the Electric Roseville Power Plant 2 Engine Rehab (the "Project"), appropriating $2,564,250 with funding from offsetting decreases in the capital project budgets in the Electric Fund to the Project for the rebuild of a combustion turbine and a budget adjustment that increases two other capital project budgets by $432,091, with equivalent offsetting decreases in capital project budgets, with no net change in the Electric Fund's available fund balance.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Establishing a new capital improvement project and approval of a budget adjustment meet the above criteria and are not subject to CEQA. No additional environmental review is required.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world Goal F - Invest in well-planned infrastructure and growth Respectfully Submitted,
Chris Porter, Assistant Electric Utility Director
Daniel Beans, Electric Utility Director
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:
Description
Ordinance 6795
ORDINANCE NO. 6795
ORDINANCE OF THE COUNCIL OF THE CITY OF ROSEVILLE
AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2023-24
BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY
EFFECTIVE AS AN APPROPRIATION MEASURE
THE CITY OF ROSEVILLE ORDAINS:
SECTION 1. The City of Roseville Annual Budget, Fiscal Year 2023-24, is hereby amended as listed on the attached budget adjustment to close completed projects, re-align existing capital project funding and establish a new capital project for Engine Rehabilitation.
SECTION 2. This ordinance is hereby declared to be an appropriation measure, immediately effective pursuant to the provisions of Section 5.03 of the Charter.
SECTION 3. The City Clerk is hereby authorized and directed to post a true copy of the foregoing ordinance in each of three (3) conspicuous locations in the City and she shall immediately after such posting enter in the ordinance book, under the record of the ordinance, a certificate under her hand stating the time and place of such publication by posting.
PASSED AND ADOPTED by the Council of the City of Roseville, this day of , 2024, by the following vote on roll call:
AYES COUNCILMEMBERS:
NOES COUNCILMEMBERS:
ABSENT COUNCILMEMBERS:
MAYOR
ATTEST:
City Clerk
EXPENDITURES/EXPENSES/TRANSFERS OUT
REQUEST FOR BUDGET ADJUSTMENT
Updated 12/1/2023
ACCOUNT STRING BUDGET ($) DESCRIPTION
Fund Account Center Project Adjustment
6001 6587 84701 400112 (144,755) Reduce ZLD Improvements CIP 6001 6587 84701 400152 357,091 Increase Turbine And Hrsg Rehab CIP 6001 6587 84701 400151 (135,948) Reduce Balance Of Plant Rehab CIP 6001 6587 84701 400153 (399,629) Reduce Critical Systems Rehab CIP 6001 6587 84701 400085 (389,147) Reduce Rsvl Power Plant 2 Rehab CIP 6001 6587 84701 500179 (1,275,852) Reduce Roseville Energy Park Site Security CIP 6001 6587 84701 500231 (771,009) Reduce Duct Burners and PLC CIP 6001 6587 84701 500520 2,684,250 Establish budget for new CIP RPP2 Engine Rehab 6001 6587 84701 500048 75,000 Increase 60KV Reconductor CIP
EXPENDITURES/EXPENSES/TRANSFERS OUT TOTAL -
REVENUES/TRANSFERS IN
ACCOUNT STRING BUDGET ($) DESCRIPTION
Fund Account Center Project Adjustment
REVENUES/TRANSFERS IN TOTAL -
NET ADJUSTMENT -
FUND BALANCE
ACCOUNT STRING BUDGET ($) DESCRIPTION
Fund Account Center Project Adjustment
0000 00000 000000
0000 00000 000000
FUND BALANCE TOTAL -
Justification for Budget Adjustment:
Staff recommends the following Capital Improvement Project (CIP) budget adjustments to close completed projects, re-align existing capital project funding and establish a new capital project for Engine Rehabilitation. 400112: Project complete and ready for closure; reduce all remaining budget by $144,755. 400152: Project complete and ready for closure; increase budget for cost overages by $357,091. 400151: Project in progress; anticipate remaining costs to be under budget by $135,948. 400153: Project complete and ready for closure; reduce all remaining budget by $399,629. 400085: Project in progress; anticipate remaining costs to be under budget by $389,147. 500179: Project in progress; reduce budget due to a significant reduction in scope by $1,275,852. 500231: Project in progress; reduce budget due to a significant reduction in scope by $771,009. 500520: This is a new off-cycle request to accelerate this project, identified for FY2025-26 in the FY2023-24 budget, with a budget of $2,684,250. 500048: Project in progress; increase the budget by $75,000 to complete during FY2023-24.
REQUESTER NAME & TITLE: Chris Porter, Assistant Electric Utility Director FISCAL YEAR: 2023-24 PREPARER NAME & TITLE: Matt Nelson, Senior Electric Business Analyst COUNCIL DATE (if applicable): 04/03/24 DEPARTMENT/DIVISION: Electic / Engineering ORDINANCE:
COUNCIL COMMUNICATION
CC #: 3234
File #: 0203-06 & 0201-01
Title:
Accela Cloud Migration - Capital Improvement Project Approval and Budget Adjustment
Contact: Stacie Marchetti 916-774-5278 [email protected] Meeting Date: 4/3/2024
Item #: 7.30.
RECOMMENDATION TO COUNCIL
Staff recommends that the City Council authorize the establishment of a new Capital Improvement Project – Accela Cloud Migration, and adopt an ordinance to approve a budget adjustment appropriating $895,596 in the Technology Replacement Fund to the Project for data migration, software implementation, and licensing of Accela's Software as a Service cloud-hosted environment.
BACKGROUND
The City relies on Accela Automation as its enterprise permitting platform, which is currently configured as a City-hosted / on-premise solution. Accela informed its clients that they will no longer support on-premise architecture as of June 30, 2025 and all system users must migrate to its new cloud-hosted system in order to continue receiving product support, updates, and maintenance. As a result, the City must migrate data from the current environment to Accela's Software as a Service (SaaS) cloud hosted environment in order to maintain business continuity.
The City Council approved a long-term contract with Accela for its cloud services on its March 20, 2024 agenda. This current item is necessary to establish a Capital Improvement Project and spending authority to implement the approved contract.
FISCAL IMPACT
The proposed budget adjustment would appropriate $895,596 in the Technology Replacement Fund to proceed with the project. The Technology Replacement Fund receives funding from a fee associated with building permit issuance and was specifically established to pay for technology platforms that benefit development. There is no impact to the General Fund.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Approval to establish a Capital Improvement Project as well as approval of a budget adjustment meet the above criteria and are not subject to CEQA. No additional environmental review is required.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world Goal E - Deliver exceptional City services
Respectfully Submitted,
Stacie Marchetti, Management Analyst
Mike Isom, Development Services Director
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:
Description
Ordinance 6793
ORDINANCE NO. 6793
ORDINANCE OF THE COUNCIL OF THE CITY OF ROSEVILLE
AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2023-24
BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY
EFFECTIVE AS AN APPROPRIATION MEASURE
THE CITY OF ROSEVILLE ORDAINS:
SECTION 1. The City of Roseville Annual Budget, Fiscal Year 2023-24, is hereby amended as listed on the attached budget adjustment for the Accela Cloud Migration project.
SECTION 2. This ordinance is hereby declared to be an appropriation measure, immediately effective pursuant to the provisions of Section 5.03 of the Charter.
SECTION 3. The City Clerk is hereby authorized and directed to post a true copy of the foregoing ordinance in each of three (3) conspicuous locations in the City and she shall immediately after such posting enter in the ordinance book, under the record of the ordinance, a certificate under her hand stating the time and place of such publication by posting.
PASSED AND ADOPTED by the Council of the City of Roseville, this day of , 2024, by the following vote on roll call:
AYES COUNCILMEMBERS:
NOES COUNCILMEMBERS:
ABSENT COUNCILMEMBERS:
MAYOR
ATTEST:
City Clerk
EXPENDITURES/EXPENSES/TRANSFERS OUT
REQUEST FOR BUDGET ADJUSTMENT
Updated 12/1/2023
ACCOUNT STRING BUDGET ($) DESCRIPTION
Fund Account Center Project Adjustment
2401 5393 84001 500521 559,000 Establish budget for project 500521 - software subscription
2401 5080 84001 500521 336,596 Establish budget for project 500521 - secondary labor EXPENDITURES/EXPENSES/TRANSFERS OUT TOTAL 895,596
REVENUES/TRANSFERS IN
ACCOUNT STRING BUDGET ($) DESCRIPTION
Fund Account Center Project Adjustment
REVENUES/TRANSFERS IN TOTAL -
NET ADJUSTMENT 895,596
FUND BALANCE
ACCOUNT STRING BUDGET ($) DESCRIPTION
Fund Account Center Project Adjustment
2401 3601 00000 000000 (895,596) Use of available resources 3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
FUND BALANCE TOTAL (895,596)
Justification for Budget Adjustment:
The proposed budget adjustment would allocate $895,596 from the Development Services Technology Replacement Fund to proceed with the project to migrate current data from the current environment to Accela's Software as a Service (SaaS) cloud hosted environment to continue receiving vendor support and updates, ensuring the City's business continuity and functional operation. The Development Services Technology Replacement Fund receives funding from a fee associated with permit issuance and was specifically established to pay for technology platforms that benefit development.
There is no impact to the General Fund.
REQUESTER NAME & TITLE: Stacie Marchetti, Management Analyst FISCAL YEAR: 2023-24 PREPARER NAME & TITLE: Stacie Marchetti, Management Analyst COUNCIL DATE (if applicable): 04/03/24 DEPARTMENT/DIVISION: Development Services/Business & Administration ORDINANCE:
COUNCIL COMMUNICATION
CC #: 3245
File #: 0709-03-02 & 0400-04-09 & 0201-01
Title:
Pleasant Grove Apartments Affordable Housing Project - Regulatory Agreement, Loan Agreements, Promissory Notes, Deeds of Trust, and Budget Adjustment Contact: Suzanne Acrell 916-774-5469 [email protected] Meeting Date: 4/3/2024
Item #: 7.31.
RECOMMENDATION TO COUNCIL
Staff recommends that the City Council:
1) Adopt a resolution approving a Regulatory Agreement, Loan Agreements, Promissory Notes, and Deeds of Trust in the amounts of $6 million of Housing Trust Fund and $1,550,000 of Prohousing Incentive Pilot program funding with Mercy Housing California 101, L.P., and authorizing the City Manager to execute them and any other necessary documents and further authorize the City Attorney to approve any non-substantive changes to the documents to fund the Pleasant Grove Apartments affordable housing project; and 2) Adopt an ordinance approving two budget adjustments appropriating $2,323,750 in the Local Housing Trust Fund Award non-capital project to fund affordable housing projects, and $1,610,000 in the Prohousing Incentive Pilot program non-capital project to fund Mercy Housing, Pleasant Grove Apartments, predevelopment costs.
BACKGROUND
On April 21, 2021, City Council adopted a resolution to establish the Objective Design Standards (ODS) to streamline the construction of qualified affordable housing projects. The ODS were adopted in order to comply with State housing legislation. Qualified projects that comply with the ODS are subject to a non-discretionary ministerial permit process and can bypass the standard design review process as well as the public notification and hearing process and proceed directly to engineering and building permit review. A qualifying project is a housing development project where no less than 20% of the units are affordable to lower-income households. The developer successfully completed the ODS process in April 2023 for a 98-unit affordable housing project. The 49-unit affordable housing project associated with the current request is considered Phase 1 of the overall 98-unit project.
The Regulatory Agreement for Pleasant Grove Apartments includes 8 units for extremely low- income, 28 units for very low income, and 12 units for low-income households. Unit types include one, two, and three-bedroom units. One unit will be reserved for an onsite manager. These units will serve a range of local housing needs, including members of the local workforce, families, young couples, single households, and seniors with low and very low incomes. Workers in these units could hold jobs ranging from employment in the service industry, local teachers, office assistants, custodians, store clerks, and others who are likely to have job opportunities in Roseville. The recommended agreement before Council will continue to support the City's General Plan in meeting the City of Roseville affordable housing goals.
The City was awarded a State Housing & Community Development Local Housing Trust Fund (LHTF) grant totaling $6.7 million to fund affordable housing projects. The grant requires a dollarfor-dollar match of $6.7 million, bringing the total funding for projects to $13.4 million. Additionally, with the City of Roseville’s Prohousing Designation from the California Department of Housing and Community Development (HCD), the City was eligible to apply for $1.6 million in Prohousing Incentive Pilot (PIP) program funds. The City applied for PIP funds and received a $1,610,000 PIP award in May 2023.
On May 17, 2023, City Council approved a reservation in the amount of $6 million in housing funds and received information to consider an additional reservation of $1,550,000 in pending PIP funds for the Pleasant Grove Apartments affordable project. Staff is requesting to loan $6 million of LHTF and $1,550,000 of Prohousing Incentive Pilot program funds to support the creation of these affordable units.
In order to secure the LHTF loan, the PIP program funds loan, and affordability of the project, staff is requesting approval and execution of the attached loan documents and regulatory agreement, including future subordination agreements.
The loan terms include guaranteed affordable rent for 55 years and a residual receipts loan accruing on the outstanding principal balance at a rate of three percent (3%) per annum. These regulatory and loan terms are consistent with previously developed City-assisted affordable housing projects. The City will also be subordinating these documents to the private lender on this project, as is standard with affordable housing development. Staff is also requesting authorization for the City Manager to execute any other necessary documents related to this action, such as subordination agreements and escrow instructions. The recommended agreement before Council will continue to support the City's General Plan in meeting the City of Roseville affordable housing goals.
FISCAL IMPACT
The City's Local Housing Trust Fund receives funding from developer in-lieu fees, payoffs from resales and payoffs from developer subsidy loans. The recommended budget adjustments appropriate $2,323,750 in the Local Housing Trust Fund Award non-capital project to fund affordable housing projects, and $1,610,000 in the Prohousing Incentive Pilot program non-capital project to fund predevelopment costs for affordable housing development projects. The Pleasant Grove Apartments affordable housing project will be loaned $6 million from the Local Housing Trust Fund Award non-capital project, and $1,550,000 from the Prohousing Incentive Pilot program non-capital project. No General Fund resources will be used for the loan of funds or implementation of the loan or regulatory agreements.
ENVIRONMENTAL REVIEW
Development of the Pleasant Grove Apartments affordable housing project was previously evaluated in Northwest Roseville Specific Plan EIR (certified May 1989 and SCH# 88051623), and identified in the associated Northwest Roseville Specific Plan. Construction of the Pleasant Grove Apartments affordable housing project is found to be within the scope of the project covered by the Northwest Roseville Specific Plan Final EIR, and is therefore exempt from CEQA pursuant to Section 15182. As discussed in the Specific Plan EIR, the EIR provides environmental analyses of community infrastructure and facilities, including residential subdivisions. Because the project is consistent with the Northwest Roseville Specific Plan Final EIR and Specific Plan, no new effects would be expected to occur and all applicable mitigation measures from the Northwest Roseville Specific Plan EIR will be implemented during the design and construction of the Pleasant Grove Apartments affordable housing project. Because the proposed project meets the requirements identified in the State CEQA Guidelines Section 15183, no additional CEQA review is required.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal C - Maintain a safe and healthy community
Respectfully Submitted,
Suzanne Acrell, Housing Analyst
Melissa Anguiano, Economic Development Director
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:
Description
Resolution 24-083
Regulatory Agreement
SubordinationAgreement
LHTF LoanAgreement
LHTF Deed of Trust
LHTF Promissory Note
PIP LoanAgreement
PIP Deed of Trust
PIP Promissory Note
Ordinance 6796
RESOLUTION NO. 24-083
APPROVING A REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
CONVENANTS, HOUSING TRUST FUND LOAN AGREEMENT, PROMISSORY NOTE,
AND DEED OF TRUST, PROHOUSING INCENTIVE PILOT LOAN AGREEMENT,
PROMISSORY NOTE, AND DEED OF TRUST BY AND BETWEEN THE CITY OF ROSEVILLE AND MERCY HOUSING CALIFORNIA 101, L.P., AND AUTHORIZING THE
CITY MANAGER TO EXECUTE THEM AND ANY OTHER RELATED DOCUMENTS
ON BEHALF OF THE CITY OF ROSEVILLE
WHEREAS, on April 21, 2021, City Council adopted a resolution to establish the Objective Design Standards (“ODS”) to streamline the construction of qualified affordable housing projects; and
WHEREAS, Mercy Housing California 101, L.P. successfully completed the ODS process in April 2023 for a 98 unit affordable housing project; and WHEREAS, the 49 unit affordable housing project associated with the current request is considered Phase 1 of the overall 98 unit project; and
WHEREAS, on May 17, 2023, City Council approved a reservation of Local Housing Trust Funds (LHTF) in the amount of $6 million for the Mercy Housing California 101, LP affordable project, Pleasant Grove Apartments; and
WHEREAS, additionally, the City successfully applied for and received $1,610,000 in Prohousing Incentive Pilot (PIP) program funds; and
WHEREAS, staff is requesting to loan $6 million of LHTF and $1,550,000 of Prohousing Incentive Pilot program funds to support the creation of these affordable units; and WHEREAS, in order to secure both the LHTF and PIP loans and affordability of the project, staff is requesting approval and execution of the loan documents and Regulatory Agreement; and
WHEREAS, the recommended Regulatory Agreement will continue to support the City’s General Plan in meeting the City of Roseville affordable housing goals; and WHEREAS, the Housing Trust Fund Loan Agreement, Promissory Note, and Deed of Trust have been reviewed by the City Council; and
WHEREAS, the Prohousing Incentive Pilot Loan Agreement, Promissory Note, and Deed of Trust have been reviewed by the City Council; and WHEREAS, a Regulatory Agreement and Declaration of Restrictive Covenants necessary for the City to monitor the affordable housing community at 1715 Pleasant Grove Boulevard, by and between the City of Roseville and Mercy Housing California 101, LP, has been reviewed by the City Council; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said Housing Trust Fund Loan Agreement, Promissory Note, Deed of Trust, said Prohousing Incentive Pilot Loan Agreement, Promissory Note, and Deed of Trust and the Regulatory Agreement and Declaration of Restrictive Covenants are hereby approved and that the City Manager is authorized to execute them and any other related documents, including future subordination agreements, on behalf of the City of Roseville; and BE IT FURTHER RESOLVED that the City Attorney is also hereby authorized to approve non-substantive changes to these documents; and BE IT FURTHER RESOLVED that the City Clerk is hereby directed to record the Regulatory Agreement and each of the Deeds of Trust, once fully executed, with the Placer County Recorder’s Office.
PASSED AND ADOPTED by the Council of the City of Roseville this day of , 2024, by the following vote on roll call:
AYES COUNCILMEMBERS:
NOES COUNCILMEMBERS:
ABSENT COUNCILMEMBERS:
MAYOR
ATTEST:
City Clerk
1 485.235/586512
NO FEE DOCUMENT
PER GOV’T CODE § 27383
RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:
City of Roseville
CITY Clerk
311 Vernon Street
Roseville, CA 95678
REGULATORY AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS
(Project: Pleasant Grove Apartments – 1715 Pleasant Grove Boulevard, Roseville) This Regulatory Agreement and Declaration of Restrictive Covenants (“Regulatory Agreement”) is made this ____ day of ______________, 2024 (“Effective Date”), by and between the City of Roseville, a municipal corporation (“CITY”), and Mercy Housing California 101, L.P., a California limited partnership (“OWNER/DEVELOPER”).
RECITALS
A. OWNER/DEVELOPER is the owner of real property located at 1715 Pleasant Grove Boulevard, Roseville, California, (as more particularly described in Exhibit A (the “Property”)). OWNER/DEVELOPER proposes to develop a forty-nine (49) unit multi-family apartment project (the “Project”) on the Property, forty-eight (48) of which shall be rented at rents that are affordable to Low (60% of Area Median Income (AMI)), Very Low (50% AMI), and Extremely Low (30% AMI) income households (collectively, the “Regulated Units”), with one manager’s unit. The Project is intended to serve as a community resource by providing decent, safe, and sanitary housing for households which would otherwise be unable to afford such housing. Development of the property is governed by the Northwest Roseville Specific Plan.
B. The CITY has agreed to provide OWNER/DEVELOPER with financial assistance in the form of two loans in the principal amount totaling SEVEN MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($7,550,000) to assist OWNER/DEVELOPER in the construction and permanent financing of the Project in the form of a deferred residual receipts loan, with three percent (3%) simple interest, per annum, accruing on the entire principal amount from the date of the initial disbursement of loan proceeds (the “Loan”).
C. The Loan funds are derived from two sources. The first source of funds is SIX MILLION DOLLARS ($6,000,000), of which THREE MILLION DOLLARS ($3,000,000) is from the Local Housing Trust Fund Program administered by the California Department of Housing and Community Development and THREE MILLION 2 485.235/586512
DOLLARS ($3,000,000) is from CITY matching funds. The second source of funds is ONE MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($1,550,000) from the Prohousing Incentive Pilot Program Funds administered by the California Department of Housing and Community Development.
D. OWNER/DEVELOPER is financing the Project through a combination of equity raised through Low Income Housing Tax Credits, construction and permanent loans from banks, and the Loan. OWNER/DEVELOPER is simultaneously: (1) executing Loan Agreements, Notes and Deeds of Trust evidencing and regulating certain aspects of the Loans; (2) recording the Deeds of Trust to secure the Loans; and (3) as further consideration for the Loans, and to further the public interests of the CITY in seeing the Project maintained as affordable housing, OWNER/DEVELOPER is executing and recording this Regulatory Agreement. The Loan Agreements, the Promissory Notes, the Deeds of Trust, and this Regulatory Agreement are collectively referred to herein as the “Loan Documents.”
E. This Regulatory Agreement is being executed and recorded pursuant to the requirements of California Health and Safety Code Section 33334.3 which further requires the recordation of the “Notice of Affordability Restrictions on Transfer of Property,” attached hereto as Exhibit B. The purpose of this Regulatory Agreement is to regulate and restrict the occupancy, rents, operation, ownership, and management of the Project for the benefit of Project occupants and the people of the City of Roseville. The covenants in this Regulatory Agreement are intended to run with the land and be binding on OWNER/DEVELOPER and OWNER/DEVELOPER’s successors in interest for the full term of this Regulatory Agreement. This Regulatory Agreement, in conjunction with any other regulatory agreements between the OWNER/DEVELOPER and other providers of financing, will ensure the Project's continuing affordability.
F. The Loans are being made to OWNER/DEVELOPER at an interest rate below the market rate in order to help achieve financial stability for the Project and to increase the supply of affordable rental housing in the CITY. In consideration for the Loans, OWNER/DEVELOPER has agreed to observe all the terms and conditions set forth below.
NOW, THEREFORE, OWNER/DEVELOPER and the CITY hereby agree as follows:
DEFINITIONS
The following terms have the meanings set forth herein wherever used in this Regulatory Agreement or attached exhibits.
1. “CITY” means the City of Roseville, a municipal corporation.
2. “AREA MEDIAN INCOME” (referred to herein as “AMI”) means the median income for the Metropolitan Statistical Area which includes the City of Roseville (“MSA”), 3 485.235/586512
with adjustments for household size, as determined from time to time by the California Department of Housing and Community Development and U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 8(f)(3) of the United States Housing Act of 1937 as amended, or such other method of median income calculation applicable to the City of Roseville that HUD may hereafter adopt in connection with said Act. If HUD should cease making such determination, the CITY may designate another method of calculation of area median income used by any federal or state agency and applicable to the City of Roseville. During the period a regulatory agreement governing the allocation and award of any federal tax credits is in effect, Area Median Income shall be determined in accordance with such regulatory agreement and 26 U.S.C., Section 42.
3. “DEEDs OF TRUST” means the Deeds of Trust executed
contemporaneously with this Regulatory Agreement and recorded against the Property as security for the Loan and other obligations by OWNER/DEVELOPER, as trustor and the CITY as beneficiary, as well as any amendments to, modifications of, and restatements of said Deeds of Trust.
4. “LOAN” means the loan of funds provided by the CITY to OWNER/DEVELOPER for the Project pursuant to the Loan Agreements.
5. “LOAN AGREEMENTS” means the Loan Agreements executed contemporaneously with this Regulatory Agreement by OWNER/DEVELOPER and the CITY, which governs the Loan, as well any amendments to, modifications of, or restatements of said loan agreements.
6. “LOAN DOCUMENTS” means, collectively, the Loan Agreements, the Promissory Notes, the Deeds of Trusts and this Regulatory Agreement for the Project, as they may be amended, modified, or restated from time to time, along with all exhibits and attachments to these documents.
7. “NOTES” means the promissory note or notes executed
contemporaneously with this Regulatory Agreement by OWNER/DEVELOPER in favor of the CITY evidencing the Loan, which is secured by the Deeds of Trust, as well as any amendments to, modifications of, or restatements of said promissory note(s). The Notes are on file with the City of Roseville.
8. “OWNER/DEVELOPER” means Mercy Housing California 101, L.P., a California limited partnership, together with its permitted successors and assigns.
9. “PROJECT” means the development, construction and operation of a fortynine (49) unit residential, multi-family rental apartment project on the Property to be rented at rents that are affordable to Low, Very Low and Extremely Low-income households, one (1) unregulated manager’s unit and any additional improvements, landscaping, roads, and parking spaces existing thereon, as the same may from time to time exist. 4 485.235/586512
10. “PROPERTY” means the real property located at 1715 Pleasant Grove Boulevard, Roseville, California, 95747 identified and described in Exhibit A, attached hereto and incorporated into this Regulatory Agreement by this reference, and any buildings or improvements now or hereafter situated on such real property.
11. “QUALIFYING HOUSEHOLD” means a household in which household income does not exceed the percentage of Area Median Income prescribed for the applicable housing unit by the terms of this Regulatory Agreement.
12. “QUALIFYING RENT” means the maximum monthly rent allowed under Exhibit C “adjusted for a family size” (as such term is defined by the California Tax Credit Allocation Committee - current 1.5 persons per bedroom) including a reasonable allowance for tenant-paid utilities (also known as Utility Allowance). During the period a regulatory agreement governing the allocation and award of any federal tax credits is in effect, Qualifying Rent shall be determined in accordance with such regulatory agreement and 26 U.S.C., Section 42, for initial and ongoing occupancy of tenants.
13. “REGULATED UNITS” means forty-eight (48) rental dwelling units of the forty-nine (49) rental dwelling units on the Property constructed for the Project that shall be rented at rents that are affordable Low, Very Low and Extremely Low income households and having the following composition: fifteen (15) one (1) bedroom units, seventeen (17) two (2) bedroom units (one of which is an unrestricted manager unit), and seventeen (17) three (3) bedroom units.
14. “HCD” means California Department of Housing Community Development.
15. “LHTF” means the Local Housing Trust Fund Program administered from the California Department of Housing Community Development.
OWNER/DEVELOPER’S OBLIGATIONS
16. COMPLIANCE WITH LOAN DOCUMENTS. OWNER/DEVELOPER’s
actions with respect to the Property shall at all times be in full conformity with the requirements of the Loan Documents.
17. TERM OF AGREEMENT. This Regulatory Agreement shall commence upon the Effective Date and shall remain in full force and effect for fifty-five (55) years after the date OWNER/DEVELOPER obtains a Certificate of Occupancy from the CITY for the Project or, in the event the Project has multiple buildings or structures, a Certificate of Occupancy for the last habitable building or structure for the Project. The obligations in this Regulatory Agreement shall remain effective and fully binding on OWNER/DEVELOPER for this full term regardless of any expiration of the term of any loan, any payment, or prepayment of any loan, any assignment of a note, any reconveyance of a Deeds of Trust, or any sale, assignment, transfer, or conveyance of 5 485.235/586512
the Property (other than certain transfers by foreclosure, deed in lieu of foreclosure, exercise of the power of sale or other similar transfer).
18. LEGAL INTEREST IN PROJECT. OWNER/DEVELOPER represents that it has legal interest in the Property and that all other persons holding legal or equitable interests in the Property have signed an “Acknowledgement and Consent Certificate”, in a form approved by the City Attorney of the CITY, acknowledging and consenting to the terms of this Regulatory Agreement. All persons holding any legal or equitable interest in the Property shall be bound by this Regulatory Agreement.
PROJECT OCCUPANCY AND RENTS
19. OCCUPANCY OF PROJECT. OWNER/DEVELOPER shall limit, for the full term of this Regulatory Agreement identified in paragraph 13, above, the rental of Regulated Units to Qualifying Households according to the schedule contained in Exhibit C herein, which is hereby incorporated by reference into this Regulatory Agreement. The income levels and other qualifications of applicants shall be certified prior to initial occupancy in conformance with the Final Management Plan identified in paragraph 25, below, and the City of Roseville’s rules governing income certification, as these rules may be amended from time to time by California law or as required in order to comply with California law, provided, however, during the period a regulatory agreement governing the allocation and award of any federal tax credits is in effect, income levels and other qualifications of applicants shall be determined in accordance with such regulatory agreement and 26 U.S.C., Section 42. Specifically, OWNER/DEVELOPER covenants and agrees that for the full term of this Regulatory Agreement it shall reserve for occupancy: (i) two (2) one-bedroom, three (3) two-bedroom, and three (3) three-bedroom Regulated Units for households whose income does not exceed thirty percent (30%) of AMI; (ii) two (2) one-bedroom, two (2) two-bedroom, and two (2) three-bedroom Regulated Units for households whose income does not exceed forty percent (40%) of AMI; (iii) seven (7) one-bedroom, seven (7) two-bedroom, and eight (8) three-bedroom Regulated Units for households whose income does not exceed fifty percent (50%) of AMI; and (iv) four (4) one-bedroom, four (4) two-bedroom, and four (4) three-bedroom Regulated Units for households whose income does not exceed sixty percent (60%) of AMI. A minimum of thirty percent (30%) of Local Housing Trust Fund/Program Funds will be expended on households whose income does not exceed thirty percent (30%) AMI.
As of the date hereof, the Project is intended to have the benefit of a contract with respect to project based rental assistance under Section 8 of the United States Housing Act of 1937, as amended with respect to 8 of the units in the Project (the “Section 8 Units” which are intended to be rented to households whose income does not exceed thirty percent (30%) of AMI (the “Section 8 Contract”). If during the term of this Regulatory Agreement, the Section 8 Contract is not renewed or is terminated, then Rents and income restriction levels for those eight (8) units shall be adjusted as allowed by Tax Credit Law and the CA Tax Credit Allocation Committee. The remaining one (1) unregulated unit shall be a two-bedroom unit reserved for use by on-site Project management staff.
6 485.235/586512
The Project shall be owned, managed and operated as a single, multi-family residential rental project, which may be comprised of several buildings and structures, each consisting of more than one residential dwelling unit, together with facilities functionally related and subordinate thereto, in accordance with the applicable provisions of the Internal Revenue Code and applicable California law, as the same may be amended from time to time. All of the residential dwelling units in the Project will be similarly constructed and shall contain separate and complete facilities for living, sleeping, eating, cooking and sanitation for a single person or family, including sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink. None of the residential dwelling units shall be utilized, at any time, on a transient basis. Neither the Project, nor any portion thereof, shall ever be used as a hotel, motel, hostel, vacation rental, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitarium, rest home or trailer park, or court.
OWNER/DEVELOPER shall further ensure that reasonable support services for the residents of this Project are provided, such as, but not limited to, life skills training, social and recreational programs, educational, health and nutritional programs, and computer training.
20. PROJECT RENTS. Rents for Regulated Units shall be limited to Qualifying Rents as set forth in Exhibit C as the same may be revised from time to time in accordance with this Regulatory Agreement and applicable federal or state laws and regulations. Rent shall be no greater than considered “affordable rent” for the applicable household pursuant to Sections 50052.5 and 50053 of the California Health and Safety Code, as amended, or any successor statute thereto, including the use of a CITYapproved utility allowance. Nothing in this Regulatory Agreement shall prevent OWNER/DEVELOPER from charging lower rents. Notwithstanding the foregoing, during the period a regulatory agreement governing the allocation and award of any federal tax credits is in effect, Qualifying Rent shall be determined in accordance with such regulatory agreement and 26 U.S.C., Section 42, for initial and ongoing occupancy of tenants
21. SECURITY DEPOSITS. Any security deposits collected by OWNER/DEVELOPER or OWNER/DEVELOPER’s agent shall be kept separate and apart from all other funds in a trust account with a depository insured by the Federal Deposit Insurance Corporation or other comparable federal deposit insurance program and shall be held and disbursed in accordance with California law. The balance in the trust account shall at all times equal or exceed the aggregate of all outstanding obligations, plus accrued interest thereon.
22. RENTAL INCREASES FOR EXISTING TENANTS ON THE PROPERTY.
Irrespective of when income limits are published under applicable tax credit law, rents for Regulated Units may be adjusted no more frequently than: (a) after the initial twelve (12) months following the date of initial occupancy or (b) every twelve (12) months following the last permissible date of recorded rental adjustment. Additionally, in no event shall the amount of annual rent increase exceed the amount of annual rent increase allowed by Tax Credit Law.
7 485.235/586512
23. CONDOMINIUM CONVERSION PROHIBITED. OWNER/DEVELOPER
shall not convert Project units, including Regulated Units and/or any unregulated units, to condominium or cooperative ownership or sell condominium or cooperative conversion rights to the Project units, during the term of this Regulatory Agreement.
24. NONDISCRIMINATION.
A. OWNER/DEVELOPER herein covenants by and for itself, its subcontractors, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, nor denial of the benefits of this Regulatory Agreement to, any person or group of persons, on the basis of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, sex, gender or self-identified gender, gender expression, sexual orientation, marital status, age, mental disability, physical disability or medical condition (including cancer, HIV and AIDS), genetic information, military or veteran status, familial status, source of income, or political affiliation or belief, nor any unlawful discrimination against any employee or applicant for employment because of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, sex, gender or selfidentified gender, gender expression, sexual orientation, marital status, age (over 40), mental disability, physical disability or medical condition (including cancer, HIV and AIDS), use of family care leave, genetic information, military or veteran status, familial status, source of income, or political affiliation or belief. OWNER/DEVELOPER shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination or harassment. In addition to the foregoing general obligations, OWNER/DEVELOPER shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 12900, et seq.), the regulations promulgated thereunder (Title 2, California Code of Regulations, Section 10000, et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Sections 11135-11139.5) and any state or local regulations adopted to implement any of the foregoing, as such statutes and regulations may be amended from time to time. To the extent this Regulatory Agreement subcontracts to OWNER/DEVELOPER services or works required of the CITY by the State of California pursuant to agreement between the CITY and the State, the applicable regulations of the Fair Employment and Housing Commission implementing Government Code Section 12990 (a) through (f), set forth in Subchapter 5 of Division 4.1 of Title 2 of the California Code of Regulations are expressly incorporated into this Regulatory Agreement by reference and made a part hereof as if set forth in full, and OWNER/DEVELOPER and any of its subcontractors shall give written notice of their obligations thereunder to labor organizations with which they have collective bargaining or other agreements.
B. The provisions of paragraph (A) shall further apply to the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Project, and OWNER/DEVELOPER and any person claiming under or through the OWNER/DEVELOPER, shall not establish or permit any such practice or practices of 8 485.235/586512
discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the Project.
C. OWNER/DEVELOPER shall include the provisions contained in this section in all contracts and subcontracts related to the Project.
D. The requirements in this section shall survive the repayment of the Loan, and the reconveyance of the Deeds of Trust.
25. MANAGEMENT RESPONSIBILITIES. OWNER/DEVELOPER is
specifically responsible, subject to its obligations herein, for all management functions with respect to the Property, 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 shall have no responsibility over management of the Property. A resident manager or an alternative designated contact shall be required to reside on-site.
26. INTENTIONALLY OMITTED.
27. DRAFT AND FINAL MANAGEMENT PLANS.
A. DRAFT MANAGEMENT PLAN. OWNER/DEVELOPER shall
prepare and submit to the CITY a Draft Management Plan for the CITY’s review and approval. The Draft Management Plan shall be submitted to the CITY at least one hundred eighty (180) calendar days prior to the anticipated date for completion of construction of the Project. The Draft Management Plan shall contain, but is not limited to, specific statement as to (1) the identity, experience and duties of all employees of the Management Agency who intend to manage the Project; (2) marketing policies and strategies; (3) tenancy occupancy rules and regulations; (4) rental procedures and tenant income limitation; (5) eviction procedures; (6) operating policies and guidelines; (7) reserve account policies; (8) maintenance and capital improvement policies; (9) shall provide as an exhibit thereto a sample form of lease agreement; and (10) any provisions required by the Loan Agreements. Upon transfer of OWNER/ DEVELOPER’s interest in the Project, the party to whom the Project is transferred shall, as a condition of such transfer, provide the CITY with a copy of such party’s Management Plan for the Project, which plan shall provide statements as called for herein.
B. CITY REVIEW OF DRAFT MANAGEMENT PLAN. Upon submittal of the Draft Management Plan by OWNER/DEVELOPER to the CITY, the CITY shall review the Draft Management Plan and provide written comments to OWNER/DEVELOPER within ninety (90) calendar days or as soon thereafter as is practicable.
C. FINAL MANAGEMENT PLAN. Prior to issuance of any Certificate of Occupancy for the Project, OWNER/DEVELOPER shall submit a Final Management 9 485.235/586512
Plan to the CITY for its review and final approval no later than thirty (30) calendar days prior to the anticipated date for completion of construction of the Project.
Notwithstanding the foregoing, the CITY shall have the right to review and approve any proposed amendments to OWNER/DEVELOPER’s contract with its management firm, or any new management contracts, during the term of this Regulatory Agreement; provided, however, that the CITY’s approval shall not be required for a renewal of the initial management contract.
28. MANAGEMENT AGENCY. The Project shall at all times be managed by an experienced Management Agency reasonably acceptable to the CITY, with demonstrated ability to operate residential facilities like the Project in a manner that will provide decent, safe and sanitary housing. The City shall have the right to require a change in the Management Agency or the on-site manager for reasonable cause at any time during the term of this Regulatory Agreement, subject to the prior written consent of the Senior Lenders and the tax credit investor. During the monitoring as described in paragraph 34, the CITY will assess the Management Agency’s ability to operate the Project in a decent, safe and sanitary manner. Calls for police and fire services at a significantly greater number or with a significantly greater frequency of serious calls and frequent fair housing complaints by tenants or applicants may be among criteria considered by the CITY in determining whether any management change shall be required.
OWNER/DEVELOPER shall submit for the CITY’s approval the identity of any proposed Management Agency. OWNER/DEVELOPER shall also submit such additional information about the background, experience, and financial condition of any proposed Management Agency as is reasonably necessary for the CITY to determine whether the proposed Management Agency meets the standards for a qualified Management Agency set forth above.
If the proposed Management Agency meets the standards for a qualified Management Agency set forth above, the CITY shall approve the proposed Management Agency by notifying OWNER/DEVELPER in writing. Unless the proposed Management Agency is disapproved by the CITY within thirty (30) calendar days of said submission of identity and qualifications of proposed Management Agency, which disapproval shall state reasonable specificity the basis for disapproval, it shall be deemed approved. The CITY hereby approves of the use of Mercy Housing Management Group, Inc. a Nebraska nonprofit corporation, engaged in the provision of multi-family residential and commercial property management services, as the designated initial Management Agency for the Project.
29. DISMISSAL OF MANAGEMENT AGENCY. Within fifteen (15) calendar days from OWNER/DEVELOPER’s receipt of any recommendation by CITY staff to dismiss the Management Agency, OWNER/DEVELOPER shall either dismiss the Management Agency or request a meeting with CITY staff representatives to discuss further. If an agreement cannot be reached with CITY staff representatives, 10 485.235/586512
OWNER/DEVELOPER may request a public meeting to discuss the CITY recommendation. If, after conducting a requested public meeting, the CITY Council supports said recommendation of CITY staff, OWNER/DEVELOPER shall promptly dismiss the Management Agency and shall appoint as the new Management Agency a person or entity which meets the standards for Management Agency and is approved by the CITY as set forth in paragraph 26.
30. MAINTENANCE AND SECURITY. OWNER/DEVELOPER shall at its own cost and expense maintain the Property in good condition, in good repair, and in decent, safe, sanitary, habitable, and tenantable living condition for the benefit of Project occupants. OWNER/DEVELOPER shall not commit or permit any waste on or to the Property, and shall prevent and/or rectify any physical deterioration of the Property.
OWNER/DEVELOPER shall provide adequate security equipment for the safety of Project occupants and to minimize the need for public safety calls.
OWNER/DEVELOPER shall maintain the Property in conformance with all applicable state, federal, and local laws, ordinances, codes, and regulations and the Management Plan; but OWNER/DEVELOPER’s maintenance obligations shall not be limited only to the standards contained in these laws or the Management Plan.
In the event the OWNER/DEVELOPER fails to maintain the Property in accordance with the foregoing standards, and after at least seven (7) calendar days’ prior written notice to OWNER/DEVELOPER and the Senior Lenders, the CITY or its agent may, but shall be under no obligation to, enter upon the Property, make such repairs or replacements as are deemed necessary in the CITY’s reasonable discretion (with the prior written consent of the Senior Lenders), and provide for payment thereof. Any amount advanced by the CITY to make such repairs, together with interest thereon from the date of such advance at the same rate of interest as specified in the Notes for the Project (unless payment of such an interest rate would be contrary to applicable law, in which case interest shall accrue at the highest rate then allowed by applicable law), shall become an additional obligation of OWNER/DEVELOPER to the CITY, and shall be secured by the Deeds of Trust.
31. UNIT VACANCIES. OWNER/DEVELOPER shall use its best efforts to fill vacancies in Regulated Units as quickly as possible.
32. INSPECTIONS AND RECORDS. OWNER/DEVELOPER shall maintain complete, accurate and current records which clearly document OWNER/DEVELOPER’s performance of its obligations to operate the Property and the Project under the terms of this Regulatory Agreement. OWNER/DEVELOPER shall submit any records reasonably requested by the CITY in connection with the Project to the CITY within ten (10) business days of the CITY’s request. OWNER/DEVELOPER shall also permit the CITY or its duly authorized representatives to enter and inspect the Property and the Project for compliance with obligations under this Regulatory Agreement upon seventy-two (72) hours advance notice of such visit by the CITY to OWNER/DEVELOPER or OWNER/DEVELOPER’s Management Agency and to tenants of any inspected Project 11 485.235/586512
units, subject to the provisions of the leases regarding inspection and entry rights, which provisions must otherwise be consistent with state law.
All tenant lists, applications and waiting lists relating to the Regulated Units shall at all times be kept separate and identifiable from any other business of the OWNER/DEVELOPER and shall be maintained as required by the CITY, in a reasonable condition for proper audit and subject to examination during business hours by representatives of the CITY. OWNER/DEVELOPER shall retain copies of all materials obtained or produced with respect to occupancy of the Regulated Units for a period of at least five (5) years.
The CITY shall also have the right to perform on-site inspections of the Project, including the Regulated Units, as is reasonably required to ensure compliance with the Loan Documents, but in any case at least once per year. OWNER/DEVELOPER agrees to cooperate in such inspection(s). If the CITY desires to inspect the interior of the Regulated Units, the CITY shall give OWNER/DEVELOPER sufficient notice to allow OWNER/DEVELOPER to give seventy-two (72) hours’ notice to tenants.
33. ANNUAL REPORTS. OWNER/DEVELOPER shall provide any information reasonably requested by the CITY in connection with the Project. In particular, OWNER/DEVELOPER shall provide the CITY with annual reports required by the Regulatory Agreement, including but not limited to reports regarding the Project’s rent and occupancy levels, as well as the annual operating budget. Without limitation, OWNER/DEVELOPER shall provide the CITY no later than the ninetieth (90th) day after the close of each calendar year following the date of this Regulatory Agreement, hardcopies and PDF copies of the following documents:
A. Insurance certificates detailing all coverage required under the Loan Agreements and the Deeds of Trust.
B. Evidence of payment of property taxes or property tax exemption for the Project, as applicable.
C. Audited financial statements for the Project and
OWNER/DEVELOPER.
D. An occupancy report including: (i) the verified income of each tenant or household; (ii) the number and demographic information of tenants in each household; (iii) the current rents charged each tenant or household and whether these rents include utilities; (iv) the date tenancy commenced for each Unit; and (v) any additional information required by California Health and Safety Code Section 33418.
E. Certifications of eligibility for all tenants of Regulated Units at the time of initial occupancy and upon the yearly anniversary of their continuing tenancies. Such certification shall include verified income statements on a form provided by the CITY. 12 485.235/586512
OWNER/DEVELOPER shall retain in the tenant’s file all verifications of tenant’s income (tax returns, W-2 forms, paycheck stubs, etc.).
Within fifteen (15) calendar days after receipt of a written request, OWNER/DEVELOPER shall provide any other information or completed forms requested by the CITY to ensure compliance with the Loan Documents or this Regulatory Agreement.
If similar reports on some or all of the Regulated Units are required for regulatory compliance with other financing programs, those reports may be deemed satisfactory for the purpose of this section by the CITY, with respect to the portion of the requirements of this section covered by such reports, provided that copies are provided on an annual basis to the CITY with an owner certification addressed to the CITY certifying that the OWNER/DEVELOPER has complied with this Regulatory Agreement.
34. MONITORING/NON-COMPLIANCE/CURE. OWNER/DEVELOPER’s
compliance with the provisions of this Regulatory Agreement shall be reviewed at least annually, and at such other times as the CITY may require, upon thirty (30) calendar days prior written notice from the CITY. During any such review, OWNER/DEVELOPER shall bear the burden of proof to demonstrate good faith compliance with the terms of this Regulatory Agreement. If, as a result of such review, the CITY finds and determines that OWNER/DEVELOPER has not complied in good faith with the terms and conditions of this Regulatory Agreement, the CITY shall give written notice to OWNER/DEVELOPER of its findings and of the exact nature of OWNER/DEVELOPER’s non-compliance.
OWNER/DEVELOPER shall be given a period of sixty (60) calendar days after delivery of any such notice in which to cure, to the reasonable satisfaction of the CITY, any noncompliance; provided that, if the non-compliance cannot be cured within sixty (60) calendar days, OWNER/DEVELOPER shall not be in breach so long as OWNER/DEVELOPER is diligently undertaking to cure such non-compliance. In the event the CITY fails to give OWNER/DEVELOPER notice of any non-compliance at or before the annual review, OWNER/DEVELOPER shall not be held responsible for any failure to comply with the terms and conditions of this Regulatory Agreement during the year covered by the annual review.
35. CITY REMEDIES FOR BREACH. If OWNER/DEVELOPER is unable or otherwise fails to cure any non-compliance within sixty (60) calendar days (or longer as provided herein) after the CITY delivers notice of non-compliance pursuant to paragraph 34, the CITY may, in addition to any other remedy provided by law or equity, modify or terminate this Regulatory Agreement, revoke the Project approval, or take any other action available to it under this Regulatory Agreement.
In particular, and without limitation by reason of enumeration, OWNER/DEVELOPER acknowledges and agrees that failure to cure any noncompliance under this Regulatory Agreement, whether by OWNER/DEVELOPER or any successor, shall, at the option of the CITY, constitute a breach and default under this Regulatory Agreement as to all other property within the Project. In addition, and without 13 485.235/586512
limitation by reason of enumeration, OWNER/DEVLOPER acknowledges and agrees that the CITY shall have the right to withhold issuance of all building permits within the Project until such breach is cured.
Any partners of OWNER/DEVELOPER shall have the right to cure any default.
The CITY agrees that any cure of a default by any partners of OWNER/DEVELOPER shall be deemed to be a cure by OWNER/DEVELOPER, and shall be accepted or rejected on the same basis as if made or tendered by OWNER/DEVELOPER.
In the event of any breach/default or violation of any agreement, obligation, or warranty under this Regulatory Agreement, the CITY shall give written notice to OWNER/DEVELOPER, with copies to the Senior Lenders, specifying: (a) the nature of the breach or violation; (b) the action required to cure the breach or violation; and (c) a date, which shall not be less than thirty (30) calendar days from the date of the notice, by which such action to cure must be taken. If OWNER/DEVELOPER fails to cure the breach or violation within the timeframe specified in the notice, the CITY additionally has the right, at its sole election, to:
A. Bring an action for equitable relief seeking the specific performance by OWNER/DEVELOPER of the terms and conditions of this Regulatory Agreement, and/or enjoining, abating, or preventing any violation of said terms and conditions, and/or seeking declaratory relief;
B. After notice provided for herein, make such repairs or replacements to the Property as are necessary and provide for payment thereof; and/or C. Pursue any other remedy allowed at law or in equity.
The CITY’s rights hereunder shall be in addition to, and not in lieu of, every other right or remedy provided for herein or now or hereafter existing at law or in equity by statute or otherwise, including, but not limited to injunctive relief, specific performance and damages. The exercise or beginning of exercise by the CITY of any one or more rights or remedies, provided herein or now or hereafter existing at law or in equity by statute or otherwise, shall not preclude the simultaneous or later exercise by the CITY of any or all other rights or remedies provided for in this Regulatory Agreement or now or hereafter existing at law or in equity or by statute or otherwise. All such rights and remedies shall be considered cumulative and nonexclusive.
36. FEES, TAXES, AND OTHER LEVIES. OWNER/DEVELOPER shall be responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property and the Project, and shall pay such charges prior to delinquency in order to prevent any penalty from accruing or any lien or charge from attaching to the Property or the Project. However, OWNER/DEVELOPER shall not be required to pay any such charge so long as (a) the legality thereof is being contested in good faith and by appropriate proceedings; and (b) OWNER/DEVELOPER maintains reserves adequate to pay any contested liabilities. In 14 485.235/586512
the event OWNER/DEVELOPER exercises its right to contest any tax, assessment, or charge against it, OWNER/DEVELOPER, on final determination of the proceeding or contest, shall immediately payor discharge any decision or judgment rendered against it, together with all costs, charges and interest.
37. INSURANCE COVERAGE. OWNER/DEVELOPER shall cause to have in full force and effect during the term of this Regulatory Agreement continuous insurance coverage as required by the Deeds of Trust.
38. PROPERTY DAMAGE OR DESTRUCTION. Subject to the requirements of Senior Lenders, and if economically feasible in the CITY's reasonable judgment after consultation with the DEVELOPER, if any improvement now or in the future on the Property is damaged or destroyed, then the DEVELOPER shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications for the Development. Such work or repair shall be commenced no later than the later of one hundred twenty (120) calendar days, or such longer period approved by the CITY in writing, after the damage or loss occurs or thirty (30) calendar days following receipt of the insurance proceeds, and shall be complete within two years thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then the DEVELOPER shall make up the deficiency. If the DEVELOPER does not make repairs, then any insurance proceeds collected for such damage or destruction shall be promptly delivered to the CITY as a special repayment of the Loan, subject to the rights of the Senior Lenders, if any.
GENERAL PROVISIONS
39. SUBORDINATION. Except as expressly set forth herein, this Regulatory Agreement shall not be subordinated in priority to any other interest in the Property that was not recorded on or prior to the date of recordation of this Regulatory Agreement, unless the CITY and HCD expressly consents, in writing, to the subordination or junior priority of this Regulatory Agreement. Such consent, if any, shall be within the CITY’s sole discretion, and may only be permitted, if at all, for purposes that conform with the circumstances authorized by California Health and Safety Code Section 33334.14(a), and to the extent the proposed subordination does not jeopardize the CITY’s security interest in the property and is otherwise consistent and compliant with all legal standards, including eligibility requirements and other conditions imposed by funding sources for the Project and any Loan.
40. TRANSFER AND ENCUMBRANCE OF PROPERTY. During the term of this Regulatory Agreement, OWNER/DEVELOPER shall not, except as permitted below, make or permit any sale, agreement to sell, assignment, conveyance, lease (other than the rental of Project units to eligible residential tenant occupants), or transfer of the Property or any part thereof, including the sale of any general or limited partnership interests, the removal of any general partner, or any substantial change in operational or management control over the Property (collectively referred to as “Transfers”), without 15 485.235/586512
the prior written consent of the CITY and HCD. The limitations on OWNER/DEVELOPER’s right of assignment or other transfer contained in this paragraph 40 shall not apply to:
(i) any foreclosure, deed in lieu of foreclosure, or other remedial action lawfully taken by any Senior Lender holding a security interest in the Property with priority over the CITY’s interests;
(ii) the transfer of limited partner interests in OWNER/DEVELOPER, (iii) the removal or buy-out of a general partner or a limited partner pursuant to the terms and conditions of OWNER/DEVELOPER’s organizational document or any purchase option agreement or put option agreement contemplated thereby; (iv) transfers to a tax-exempt entity under the direct control of or under common control with OWNER/DEVELOPER or a general partner of OWNER/DEVELOPER (provided that the City shall not unreasonably withhold its consent to a transfer of general partner interest to a tax-exempt entity that is not under the direct control with OWNER/DEVELOPER or a general partner of OWNER/DEVELOPER if such transfer will maintain the property tax exemption for the Property);
(v) prior to the Loan being paid in full, any mortgage, Deeds of Trust, or other form of conveyance for restructuring or refinancing of any amount of senior indebtedness for the Project, provided that the amount of indebtedness incurred in the restructuring or refinancing is not in excess of the original principal amount of such senior indebtedness, unless the additional indebtedness is used to pay the entire unpaid principal balance of the California Department of Housing and Community Development (HCD) Loan. Once the HCD Loan has been paid in full, the limitations on DEVELOPER’s right of Transfer shall not apply to any mortgage, Deeds of Trust, or other form of conveyance for restructuring or refinancing of any amount of senior indebtedness for the Project, provided that the amount of indebtedness incurred in the restructuring or refinancing is not in excess of eighty-five percent (85%) of the then applicable value of the Project.
(vi) the granting of easements to any appropriate governmental agency or utility or permits to facilitate the development of the Project;
(vii) the transfer (A) of an interest in and/or of an existing partner to another existing partner, or (B) of an interest in an existing general partner to an affiliate of any general partner;
(viii) transfers of an interest to a new partner which is an affiliate of an existing partner, including transfers of an additional general partner interest to an affiliate of a limited partner; or
16 485.235/586512
(ix) transfer of the Project or partnership interests in OWNER/DEVELOPER to a general partner of OWNER/DEVELOPER at the end of the fifteen year Tax Credit initial compliance period; or
(x) any mortgage, Deeds of Trust, or other form of conveyance for any subordinate Approved Financing (i.e. subordinate to the Deeds of Trust), or refinancing thereof, Permitted Encumbrances, or the recording of a regulatory agreement in connection with the tax credit requirements applicable to the Development, or refinancing thereof.
The CITY shall give its consent to a Transfer provided that it determines all of the following conditions are met: (a) OWNER/DEVELOPER is not in default under this Regulatory Agreement and the Loan Documents, or the Transfer will cure existing defaults of this Regulatory Agreement or the Loan Documents; (b) the transferee agrees to assume all obligations of OWNER/DEVELOPER imposed by this Regulatory Agreement and the Loan Documents; (c) the transferee demonstrates to the CITY’s satisfaction that it is capable of owning and/or operating the Property and the Project in full compliance with this Regulatory Agreement and the Loan Documents; (d) the terms of the Transfer shall not jeopardize the CITY’s security interest in the Property and is otherwise in full compliance with all legal standards, including eligibility requirements and other conditions imposed by funding sources for the Project and any Loan; and (e) the Transfer has been approved by the CITY’s governing body, if such approval is required.
During the term of this Regulatory Agreement, OWNER/DEVELOPER shall not, except as may be contemplated herein or by the Loan Agreements, engage in any financing or other transaction creating any mortgage or other encumbrance or lien upon the Property and/or the Project (except for any financing provided by the CITY), without the prior written consent of the CITY, which consent may be withheld in the CITY’s sole discretion. The CITY may give its consent to such financing if and only to the extent necessary to maintain or improve the affordability or condition of the Property and/or the Project.
41. NONLIABILITY OF OFFICIALS, EMPLOYEES, AND AGENTS. No member, official, officer, director, employee, agent, or independent contractor of the CITY shall be personally liable to OWNER/DEVELOPER or third party beneficiaries for any obligation created under the terms of this Regulatory Agreement.
42. INDEMNITY AND WAIVER. Notwithstanding the insurance coverage required herein and to the fullest extent allowed by law, OWNER/DEVELOPER shall defend, indemnify and save and hold the CITY, its members, officials, officers, directors, employees, agents, and independent contractors (collectively “Indemnitees”), harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including attorneys’ fees) which Indemnitees may incur as a result of (1) OWNER/DEVELOPER’s failure to perform any obligations as and when required by this Regulatory Agreement; (2) any failure of OWNER/DEVELOPER’s representations or warranties to be true and complete in any material respect; or (3) any 17 485.235/586512
act or omission by OWNER/DEVELOPER or any contractor, subcontractor, management agent, or supplier with respect to the Project or the Property, except to the extent that such losses are caused solely by the negligence or willful misconduct of Indemnitees.
The duty of the OWNER/DEVELOPER to indemnify includes the duty to defend Indemnitees in any court action, administrative action, or other proceeding brought by any third party arising from the Project or the Property. OWNER/DEVELOPER’s duty to defend and indemnify Indemnitees shall survive the term of this Regulatory Agreement, the reconveyance of the Deeds of Trust, and any release of part or all of the Property from the burdens of this Regulatory Agreement. The parties intend that this provision shall be broadly construed.
OWNER/DEVELOPER hereby waives any claims, suits, or actions against the CITY on account of or arising from the Costa-Hawkins Rental Housing Act, California Civil Code Sections 1954.50 et seq. (“CHRHA”). Furthermore, the parties hereby acknowledge and agree that, without limitation, the Loan and any Project entitlements, permits, or approvals have conferred upon the OWNER/DEVELOPER and/or the Project either a direct financial contribution or other form of assistance pursuant to Section 1954.52(b) of the CHRHA.
43. GOVERNING LAW AND VENUE. This Regulatory Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. Any action arising out of this Regulatory Agreement shall be brought in Placer County, California, regardless of where else venue may lie.
44. CONFLICTS. In the event of any conflict among the Loan Documents, the most restrictive requirements shall apply. In addition, the Project may be subject to the terms of other governmental subsidy programs. This Regulatory Agreement and the agreements entered into by OWNER/DEVELOPER pursuant to these subsidy programs independently regulate the Regulated Units in the Project. If any provision of another regulatory agreement is found in conflict or in contradiction with the terms of this Regulatory Agreement in relation to the Regulated Units, the most restrictive requirement, providing the greatest affordability to the most tenants for the longest term, shall apply to those Regulated Units, except as otherwise specified.
45. ATTORNEYS’ FEES AND COSTS. In the event that a legal or administrative action is brought to interpret or enforce the terms of this Regulatory Agreement, the prevailing party in such action shall be entitled to recover its reasonable litigation expenses, including but not limited to, court costs, expert witness fees, discovery expenses, and attorneys’ fees.
46. TIME. Time is of the essence in this Regulatory Agreement.
47. CONSENTS AND APPROVALS. Except as otherwise expressly provided in this Regulatory Agreement, any consent or approval required under the Regulatory Agreement shall not be unreasonably withheld or delayed. 18 485.235/586512
48. NOTICES, DEMANDS, AND COMMUNICATIONS. Formal notices, demands, and communications between OWNER/DEVELOPER and the CITY shall be given by registered or certified mail, return receipt requested, postage prepaid or delivered personally, to OWNER/DEVELOPER and the CITY as follows, or at such other address as a party may designate by written notice to the other party:
CITY OF ROSEVILLE
Economic Development Director
City of Roseville
311 Vernon Street
Roseville, CA 95678
OWNER/DEVELOPER
Mercy Housing California 101, L.P.,
a California limited partnership
c/o Mercy Housing California
1256 Market Street
San Francisco, CA 94102
Attn: Richard C. Ciraulo
with a copy to:
Enterprise Community Opportunity
Fund LLLP
c/o Enterprise Community Asset
Management, Inc.
11000 Broken Land Parkway, Suite
700
Columbia, MD 21044
Attn: Asset Management
49. BINDING UPON SUCCESSORS. All provisions of this Regulatory Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of OWNER/DEVELOPER and the CITY, and shall run with the land for the full term of this Regulatory Agreement, regardless of any assignment, payment, prepayment, expiration, extinguishment of the Loan or Notes, any reconveyance of the Deeds of Trust, or any conveyance or transfer of the Property. Any successor in interest to OWNER/DEVELOPER and any purchaser or transferee of the Property shall be subject to all of the duties and obligations imposed on OWNER/DEVELOPER under this Regulatory Agreement for the full term of this Regulatory Agreement. The term “OWNER/DEVELOPER” as used in this Regulatory Agreement shall include all such assigns, successors-in-interest, and transferees.
50. RELATIONSHIP OF PARTIES. The relationship of OWNER/DEVELOPER and the CITY for this Project during the term of this Regulatory Agreement shall not be construed as a joint venture, equity venture, or partnership. The CITY neither undertakes 19 485.235/586512
nor assumes any responsibility or duty to OWNER/DEVELOPER or to any third party with respect to the operation of the Property or the actions of OWNER/DEVELOPER. Except as the CITY may specify in writing, OWNER/DEVELOPER shall have no authority to act as an agent of the CITY or to bind the CITY to any obligation.
51. WAIVER. Any waiver by the CITY of any obligation in this Regulatory Agreement must be in writing. No waiver shall be implied from any delay or failure by the CITY to take action on any breach or default of OWNER/DEVELOPER or to pursue any remedy allowed under this Regulatory Agreement or applicable law. Any extension of time granted to OWNER/DEVELOPER to perform any obligation under this Regulatory Agreement shall not operate as a waiver or release from any of its obligations under this Regulatory Agreement. Consent by the CITY to any act or omission by OWNER/DEVELOPER shall not be construed as the consent to any other or subsequent act or omission or to waive the requirement for the CITY’s written consent to future waivers.
52. OTHER AGREEMENTS. OWNER/DEVELOPER represents that it has not entered into any agreements that would restrict or compromise its ability to comply with the terms of this Regulatory Agreement. OWNER/DEVELOPER shall not enter into any agreements that are inconsistent with the terms of this Regulatory Agreement without an express written waiver by the CITY.
53. AMENDMENTS AND MODIFICATIONS. Any amendments or
modifications to this Regulatory Agreement must be in writing, and shall be effective only if executed by both OWNER/DEVELOPER and the CITY and with HCD’s consent, following receipt of all required approvals, and only with the consent of the Senior Lenders.
54. SEVERABILITY. Every provision of this Regulatory Agreement is intended to be severable. If any provision of this Regulatory Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired.
SPECIAL PROVISIONS
55. ADMINISTRATIVE FEE. In the event of OWNER/DEVELOPER’s breach or violation of any agreement, obligation or warranty under the Regulatory Agreement that is uncured within the cure periods provided herein, or in the event the Property is transferred in violation of paragraph 40 of this Regulatory Agreement, OWNER/DEVELOPER shall pay annually, not later than April 15 of each year, a $10,000 fee (“Administrative Fee”). The CITY shall provide the OWNER/DEVELOPER with notice and the right to cure, as set forth in above paragraph 34, any event which the CITY believes give rise to an obligation to pay the Administrative Fee. Such fee shall remain in effect during any period of breach or violation. The payment of such Administrative Fee shall be in addition to, and not to the exclusion of, the CITY’s other remedies 20 485.235/586512
contemplated in paragraph 35 of this Regulatory Agreement; provided however that this provision shall be subject to the nonrecourse provisions set forth in the Notes.
56. REFINANCING/RESYNDICATION REVIEW FEE. In the event that the Property and/or the Project is a tax credit project and is refinanced or resyndicated during the term of this Regulatory Agreement, OWNER/DEVELOPER shall provide the CITY a prepayment in amount to be determined by the CITY, upon request by OWNER/DEVELOPER, for CITY’s staff actual costs in reviewing any refinancing or resyndication documentation submitted to the CITY for the CITY’s review and approval.
Such prepayment shall be submitted by OWNER/DEVELOPER prior to the CITY commencing any review. It is estimated that the prepayment will be five thousand dollars ($5,000.00). OWNER/DEVELOPER shall not be entitled to receive a refund of any such fee in the event that OWNER/DEVELOPER fails to complete such refinancing or resyndication.
57. TENANT MONITORING FEE. Commencing one (1) year after the date of the final Certificate of Occupancy for the Project and annually thereafter, OWNER/DEVELOPER shall pay to the CITY, not later than March 31 of each year, a tenant monitoring fee equal to FORTY DOLLARS ($40) for each occupied, rent restricted, apartment unit within the Project. A penalty of ten percent (10%) per month shall be assessed against any fee not paid when due.
58. PARTICIPATION IN HOUSING CHOICE VOUCHER PROGRAM.
OWNER/DEVELOPER agrees to accept tenants who qualify under the Housing Choice Voucher (“HCV”) program administered by the Roseville Housing Authority (the “Authority”) or its successor.
59. CHECKLIST FOR REGULATED UNITS. OWNER/DEVELOPER agrees that each prospective tenant, prior to rental of a Regulated Unit, shall be required to complete forms required by Exhibit D, or OWNER/DEVELOPER's equivalent as approved in writing by the CITY.
60. CURE BY PARTNERS OF DEVELOPER/OWNER. Notwithstanding anything to the contrary in this Agreement, CITY agrees that any cure of a default hereunder by any partners of the OWNER/DEVELOPER shall be deemed to be a cure by the OWNER/DEVELOPER, and shall be accepted or rejected on the same basis as if made or tendered by the OWNER/DEVELOPER. The Limited Partner of OWNER/DEVELOPER shall be provided a duplicate copy of any notice of default at the address above and may change its address on file with the CITY by providing notice of same to CITY.
61. UNDERWRITING STANDARDS. CITY attests that the underwriting standards being utilized for this transaction are those that have been submitted and approved by the California Department of Housing and Community Development 21 485.235/586512
[Signatures Next Page]
485.235/586512
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The land described herein is situated in the State of California, County of Placer, City of Roseville, described as follows:
EXHIBIT “A-1”
LEGAL DESCRIPTION
ALL THAT REAL PROPERTY SITUATED IN THE CITY OF ROSEVILLE, COUNTY OF PLACER, STATE OF CALIFORNIA BEING PARCEL 1 AS SHOWN ON THAT CERTAIN PARCEL MAP ENTITLED “PLEASANT GROVE APARTMENTS, SUBDIVISION NO. PL23-0037”, FILED FOR RECORD _________________, 2024, IN BOOK _________, AT PAGE --------------------, PLACER COUNTY RECORDS.
485.235/586512
EXHIBIT B
NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY 485.235/586512
RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:
City of Roseville
CITY Clerk
311 Vernon Street
Roseville, CA 95678
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
PLEASE TAKE NOTICE that the real property that is the subject of this Notice of Affordability Restrictions on Transfer of Property (hereinafter “Notice”), which property is identified and described in Exhibit A, attached hereto and incorporated herein by reference (hereinafter “Property”), is subject to the following affordability covenants and restrictions that run with the land and are binding on Mercy Housing California 101, L.P., a California limited partnership, and/or its permitted successors and assigns:
(a) The Property shall be developed, constructed, owned, operated and managed as a residential, multi-family rental housing apartment project to be rented at rents that are affordable to Low, Very Low and Extremely Low income households. Occupancy of forty-eight (48) of the forty-nine (49) total units shall be reserved, for the full term set forth in subdivision (b) below, as follows:
(i) Two (2) one-bedroom, three (3) two-bedroom, and three (3) threebedroom regulated units for households whose income does not exceed thirty percent (30%) of Area Median Income (as defined in the Regulatory Agreement between the City of Roseville, a municipal corporation and Mercy Housing California 101, L.P., a California limited partnership, executed on _________________, 2024 and recorded concurrently with this Notice (hereinafter “Regulatory Agreement”);
(ii) Two (2) one-bedroom, two (2) two-bedroom, and two (2) threebedroom regulated units for households whose income does not exceed forty percent (40%) of Area Median Income;
(iii) Seven (7) one-bedroom, seven (7) two-bedroom, and eight (8) threebedroom regulated units for households whose income does not exceed fifty percent (50%) of Area Median Income; and
(iv) Four (4) one-bedroom, four (4) two-bedroom, and four (4) threebedroom regulated units for households whose income does not exceed sixty percent (60%) of Area Median Income.
Rents shall be established according to the schedule contained in the Regulatory Agreement.
485.235/586512
(b) The covenants and restrictions referenced above commence upon the execution of the Regulatory Agreement and shall remain in full force and effect for a minimum of fifty-five (55) years after the date Mercy Housing California 101, L.P., a California limited partnership and/or its permitted successors and assigns, obtains a Certificate of Occupancy from the City of Roseville. The obligations referenced in this Notice and set forth in greater detail in the Regulatory Agreement shall remain effective and fully binding for this full term regardless of any expiration of the term of any loan, any payment, or prepayment of any loan, any assignment of a note, any reconveyance of a Deeds of Trust, or any sale, assignment, transfer, or conveyance of the Property (other than certain transfers by foreclosure, deed in lieu of foreclosure, exercise of the power of sale or other similar transfer), unless terminated earlier by the City of Roseville in a recorded writing.
(c) The street address for the Property is 1715 Pleasant Grove Boulevard, Roseville, California, 95747, as further identified and described in Exhibit A.
(d) The assessor’s parcel number for the property is: APN: 017-162-087-000 as further identified and described in Exhibit A.
Any questions about the contents of this Notice may be directed to the Office of the City Attorney for the City of Roseville, 311 Vernon Street, Roseville, California 95678; Telephone (916) 774-5325.
CITY OF ROSEVILLE,
a municipal corporation
Dated: _____________ By: ___________________________
Michelle Sheidenberger
City Attorney
City of Roseville
485.235/586512
EXHIBIT C
UNIT CONFIGURATION AND INITIAL RENT RESTRICTIONS
Maximum Household Income 30% AMI – Project Based Vouchers Bedroom
size
Number
of Units
Gross
Rent
Less
UA
Allowable
Contract
Rent
1 2 $1,998 $61 $1,937
2 3 $2,512 $75 $2,437
3 3 $3,041 $87 $2,954
Maximum Household Income 40% AMI
Bedroom
size
Number
of Units
Gross
Rent
Less
UA
Allowable
Contract
Rent
1 2 $805 $61 $744
2 2 $965 $75 $890
3 2 $1,115 $87 $1,028
Maximum Household Income 50% AMI
Bedroom
size
Number
of Units
Gross
Rent
Less
UA
Allowable
Contract
Rent
1 7 $1,006 $61 $945
2 7 $1,206 $75 $1,131
3 8 $1,394 $87 $1,307
Maximum Household Income 60% AMI
Bedroom
size
Number
of Units
Gross
Rent
Less
UA
Allowable
Contract
Rent
1 4 $1,207 $61 $1,146
2 4 $1,448 $75 $1,373
3 4 $1,673 $87 $1,586
485.235/586512
EXHIBIT D
CHECKLIST FOR AFFORDABLE RENTAL UNITS
The following documentation must be present in the Tenant’s file (in a form approved by the Housing Manager) for an “affordable renter.”
____ Certification of Affordable Rental Unit Eligibility ____ Calculation of Tenant Eligibility Form
____ Record of Rental Increases
____ Written, third party verification of all income sources, including:
____ Employment
____ Self-employment (tax return and profit & loss statement for current year)
____ Unemployment
____ AFDC (Welfare) Benefits
____ Child Support
____ Alimony
____ Social Security Benefits
____ Supplemental Security Income (SSK)
____ VA or Military Benefits
____ Pensions and/or Annuities
____ Retirement Funds
____ Savings Accounts (Interest Income)
____ Checking Accounts
____ Government Grants
____ Trust Funds
____ Stocks & Bonds (Cash Value)
____ Life Insurance (Cash Value)
Name ____________________________________ Complex ____________________________ Title _____________________________________ Date _______________________________ 485.235/586512
CERTIFICATION OF AFFORDABLE RENTAL UNIT ELIGIBILITY
Re: ____________________________________ Apt. # __________ Apartment Complex
I/we have read and answered truthfully, fully frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment project. Listed below are the names of all persons who intend to reside in the unit:
1) Name of Members of the
Household
2) Relationship
to head of
Household 3) Age
4) Social
Security No.
5) Place of
Employment
___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ 485.235/586512
CERTIFICATION OF AFFORDABLE RENTAL UNIT ELIGIBILITY (CONT.)
INCOME COMPUTATION
6) The total anticipated income calculated in accordance with this paragraph 6, of all persons (except children under the age of 18 years) listed above for the 12-month period beginning the date that I/we plan to move into a unit is $________________ .
Included in the total anticipated income listed above are:
a. All wages and salaries, overtime pay, commissions, fees and other compensation for personal services, before payroll deductions.
Excluded from such anticipated income are:
a. Casual, sporadic or irregular gifts;
b. Amounts which are specifically for or in reimbursement of medical expenses; c. Lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlements for personal or property losses;
d. Amounts of educational scholarships paid directly to the student or the educational institution and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books, and equipment. Any amounts of such scholarships or payments to veterans not used for the above purposes are to be included in income;
e. Hazardous duty pay to a family member in the Armed Forces who is away from home and exposed to hostile fire;
f. Relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
g. Foster child care payments;
h. The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977.
7) This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, correct and complete and based upon information I/we deem reliable and that the statement of total anticipated income 485.235/586512
contained in paragraph 6 is reasonable and based upon such investigation as the undersigned deemed necessary.
8) I/We will assist the Owner in obtaining any information or documents required to verify the statement made herein, including either an income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding calendar year.
9) I/We acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our agreement with the Owner to lease the unit and will entitle the Owner to prevent or terminate my/our occupancy of the unit by institution of an action for eviction or other appropriate proceedings.
I/We declare under penalty of perjury that the foregoing is true and correct.
Executed this _____ day of ___________________ in the City of ____________________ California.
_____________________________________
Applicant
_____________________________________
Applicant
_____________________________________
Applicant
_____________________________________
Applicant
_____________________________________
Applicant
[All persons listed in number 2 above, except children under the age of 18 must sign this form]
485.235/586512
CALCULATION OF TENANT ELIGIBILITY FORM
(FORM COMPLETION BY APARTMENT OWNER OR AGENT)
NAME: ____________________________________ UNIT # ____________
SOURCE MONTHLY ANNUAL
Social Security $
______________
$
______________ Social Security $
______________
$
______________ Civil Service $
______________
$
______________ Pension _________________________ $
______________
$
______________ Interest _________________________ $
______________
$
______________ Wages __________________________ $
______________
$
______________ Tips __________________________ $
______________
$
______________ Wages __________________________ $
______________
$
______________ Tips __________________________ $
______________
$
______________ Child Support $
______________
$
______________ Welfare $
______________
$
______________ Stocks/Bonds $
______________
$
______________ Other ___________________________ $
______________
$
______________ Other ___________________________ $
______________
$
______________ TOTAL INCOME $
______________
$
______________ Monthly base rent $
______________ Move-in date
______________
BY
___________________________________ TITLE _____________________________ DATE _____________________________
485.235/586512
AFFORDABLE TENANT
RECORD OF RENTAL INCREASES (For Tax Credit Projects Only) (FOR COMPLETION BY APARTMENT OWNER/DEVELOPER OR AGENT)
NAME: APT. #
MOVE-IN DATE:
ANNUAL INCOME:
INITIAL BASE RENT:
DATE OF
INCREASE
CURRENT
RENT NEW RENT
Subordination Agreement
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Attention: Aviva Yakren, Esq.
(SPACE ABOVE THIS LINE FOR
RECORDER’S USE)
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (“Agreement”) is entered into this [__] day of April, 2024, by and between CAPITAL ONE NATIONAL ASSOCIATION, a national banking association (“Senior Lender”), and CITY OF ROSEVILLE, a municipal corporation (“Subordinate Lender”).
RECITALS
A. Mercy Housing California 101, L.P., a limited partnership organized under the laws of the State of California (“Borrower”) is the owner of certain land located at 1721 Pleasant Grove Boulevard, Roseville, California, described in Exhibit A (“Land”). The Land is improved with a multifamily rental housing project (“Improvements”).
B. Lender has made a loan to Borrower in the original principal amount of $[20,430,716] (“Senior Loan”) upon the terms and conditions of a Construction Loan Agreement dated as of the date hereof (“Senior Loan Agreement”) between Lender and Borrower in connection with the Mortgaged Property. The Senior Loan is secured by a Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of the date hereof (“Senior Security Instrument”) encumbering the Land, the Improvements and related personal and other property described and defined in the Senior Security Instrument as the “Mortgaged Property.”
C. Pursuant to that certain Housing Trust Fund Loan Agreement, dated on or about the date hereof, between Subordinate Lender and Borrower (the “Subordinate HTF Loan Agreement”), Subordinate Lender has made a subordinate loan to Borrower in the original principal amounts of $6,000,000 (the “Subordinate HTF Loan”). The Subordinate HTF Loan is secured by that certain Deed of Trust With Assignment of Rents, Security Agreement, and Fixture Filing, dated on or about the date hereof (as Subordination Agreement Page 2
amended, “Subordinate HTF Security Instrument”) encumbering all or a portion of the Mortgaged Property.
D. Pursuant to that certain ProHousing Incentive Pilot Loan Agreement, dated on or about the date hereof, between Subordinate Lender and Borrower (the “Subordinate PIC Loan Agreement”, and together with the Subordinate HTF Loan Agreement, collectively, the “Subordinate Loan Agreement”), Subordinate Lender has made an additional subordinate loan to Borrower in the original principal amounts of $1,550,000 (the “Subordinate PIC Loan”, and together with the Subordinate HTF Loan, collectively, the “Subordinate Loan”). The Subordinate PIC Loan is secured by a certain Deed of Trust With Assignment of Rents, Security Agreement, and Fixture Filing, dated on or about the date hereof (as amended, “Subordinate PIC Security Instrument”, and together with the Subordinate HTF Security Instrument, collectively, the “Subordinate Security Instrument”) encumbering all or a portion of the Mortgaged Property.
E. The Senior Security Instrument and Subordinate Security Instrument will be recorded in the land records for Placer County, California (“Recording Office”).
F. The execution and delivery of this Agreement is a condition of Senior Lender’s consenting to Subordinate Lender’s making of the Subordinate Loan and Borrower’s granting of the Subordinate Security Instrument.
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 “Leases,” and “Rents” 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 Security Instrument.
“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.
Subordination Agreement Page 3
“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 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 Security Instrument Default(s) and the expiration of any applicable notice or cure periods, setting forth in reasonable detail the Subordinate Security Instrument Default(s) and the Enforcement Actions proposed to be taken by Subordinate Lender.
“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 that certain Regulatory Agreement and Declaration of Restrictive Covenants, dated on or about the date hereof, between the Borrower and Subordinate Lender.
“Senior Indebtedness” means the “Indebtedness” of Borrower as evidenced by the Senior Loan Documents.
“Senior 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 Senior Note after the date of this Agreement.
“Senior Loan Documents” means, the “Loan Documents” as defined in the Senior Loan Agreement, as such documents may be amended.
Subordination Agreement Page 4
“Senior Security Instrument 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 Documents. “Senior Note” means that certain Construction Loan Note, dated as of the date hereof, by Borrower in favor of Lender in connection with the Senior Loan. “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 Security Instrument, the Subordinate 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 Security Instrument 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, collectively, the promissory notes or other evidence of the Subordinate Indebtedness 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:
(i) All sums due or currently required to be paid under the Senior Loan Documents.
(ii) 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.
Subordination Agreement Page 5
(ii) No Subordinate Security Instrument Default has occurred and is continuing. (iii) The current stated principal balance of the Subordinate Indebtedness is $7,550,000.
(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 as specifically provided in 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 Loan Default; Soft Subordinate Debt. Until the occurrence of a Senior Security Instrument 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 Loan Default or Bankruptcy.
Subordination Agreement Page 6
(i) Immediately upon Subordinate Lender’s receipt of Notice or actual knowledge of a Senior Security Instrument Default, Subordinate Lender will not accept any payments of the Subordinate Indebtedness, and the provisions of Section 3(d) of this Agreement will apply. (ii) If Subordinate Lender receives any of the following, whether voluntarily or by action of law, after a Senior Security Instrument 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 Loan 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) Senior Lender will have the right, but not the obligation, to cure any Subordinate Security Instrument Default, until such time, if ever, as Senior Subordination Agreement Page 7
Lender delivers to Subordinate Lender Senior Lender’s Notice of written consent to an Enforcement Action described in an Enforcement Action Notice given by Subordinate Lender as a consequence of a Subordinate Security Instrument Default.
(iii) Subordinate Lender acknowledges that all amounts advanced or expended by Senior Lender in accordance with the Senior Loan Documents or to cure a Subordinate Security Instrument Default will be added to and become a part of the Senior Indebtedness and will be secured by the lien of the Senior Security Instrument.
(b) Subordinate Lender’s Exercise of Remedies After Notice to Senior Lender. (i) Subordinate Lender may not commence any Enforcement Action, including any foreclosure action under the Subordinate Loan Documents, until after:
(A) Subordinate Lender has delivered to Senior Lender an Enforcement Action Notice with respect to such Enforcement Action.
(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 in Senior Lender’s sole and absolute discretion.
(iii) 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 Security Instrument 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 Security Instrument Default constitutes a Senior Security Instrument Default. Accordingly, upon the occurrence of a Subordinate Security Instrument Default, Subordinate Lender will be deemed to have actual knowledge of a Senior Security Instrument Default. If Subordinate Lender notifies Senior Lender in writing that any Subordinate Loan 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 Loan Default Subordination Agreement Page 8
under the Senior Loan Documents arising solely from such Subordinate Loan Default will be deemed cured, and the Senior Loan will be reinstated.
5. Default Under Senior Loan Documents.
(a) Notice of Senior Loan 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 Security Instrument 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 Security Instrument 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 Security Instrument 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 Security Instrument 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 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 Security Instrument Default will be deemed to have been advanced by Subordinate Lender pursuant to, and will be secured by the lien of, the Subordinate Security Instrument. Notwithstanding anything in this Section 5(a) to the contrary, Subordinate Lender’s right to cure any Senior Security Instrument 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:
Subordination Agreement Page 9
(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.
(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:
(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.
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 Loan Default or Subordinate Loan Default.
(b) Give Borrower the right to receive notice of any Senior Loan Default or Subordinate Loan Default, other than that, if any, provided, respectively under the Senior Loan Documents of the Subordinate Loan Documents. (c) Create any other right or benefit for Borrower as against Senior Lender or Subordinate Lender.
Subordination Agreement Page 10
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 original policies of insurance required pursuant to the Senior Loan Documents will be held by Senior Lender.
(ii) 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 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.
Subordination Agreement Page 11
(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 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. (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) Reserved.
(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 Page 12
(h) Certification. Within 10 Business 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. Subordinate Lender specifically agrees that on the date the Senior Loan is repaid in full, Subordinate Lender shall enter into a subordination agreement with the permanent period senior lender, a form of which is attached hereto as Exhibit B. [NOTE: CONFIRM CENTURY HOUSING SUBORDINATION IS BEING NEGOTIATED NOW]
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:
Capital One, National Association
299 Park Avenue, 14th Floor
Subordination Agreement Page 13
New York, New York 10171
Attention: Community Finance Portfolio Management
with a copy to:
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Attention: Aviva Yakren, Esq.
Notices intended for Subordinate Lender will be addressed to:
City of Roseville
311 Vernon Street
Roseville, CA 95678
Attention: City Manager
(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. 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. Except for Senior Lender, no other party will be entitled to any benefits under this Agreement, whether as a third-party beneficiary or otherwise.
This Agreement may be assigned at any time by Senior Lender to any subsequent holder of the Senior Note.
(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.
Subordination Agreement Page 14
(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.
(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 (whether by or on behalf of Borrower, as proceeds of security or enforcement of any right of set-off or otherwise) is for any reason repaid or returned to Borrower or its insolvent estate, or avoided, set aside or required to be paid to Borrower, a trustee, receiver or other similar party under any bankruptcy, insolvency, receivership or similar law. In such event, any or all of the Senior Indebtedness originally intended to be satisfied will be deemed to be reinstated and outstanding to the extent of any repayment, return, or other action, as if such payment on account of the Senior Indebtedness had not been made.
(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 Security Instrument.
(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 Security Instrument pursuant to a foreclosure, or a deed in lieu of foreclosure, of (or the exercise of a power of sale under) the Subordinate Security Instrument. (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.
Subordination Agreement Page 15
(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 rights available at law and in equity, including the right to obtain specific performance of the obligations of such defaulting party and injunctive relief. [SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOW]
Subordination Agreement
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.
SENIOR LENDER:
CAPITAL ONE, NATIONAL ASSOCIATION, a
national banking association
By: ________________________
Name: Tamar Sarkisian
Title: Senior Manager
Subordination Agreement
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 _______ )
County of )
On _________________________, before me, ______________________________, Notary Public, personally appeared Tamar Sarkisian 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)
Subordination Agreement
SUBORDINATE LENDER:
CITY OF ROSEVILLE,
a municipal corporation
By: __________________________
Name: Dominick Casey
Title: City Manager
ATTEST:
BY: _______________________
CARMEN AVALOS
City Clerk
APPROVED AS TO FORM:
BY: _______________________
MICHELLE SHEIDENBERGER
City Attorney
APPROVED AS TO SUBSTANCE:
BY: _______________________
MELISSA ANGUIANO
Economic Development Director
Subordination Agreement
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 _______ )
County of )
On _________________________, before me, ______________________________, Notary Public, personally appeared Dominick Casey 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)
Subordination Agreement
CONSENT OF BORROWER
Borrower acknowledges receipt of a copy of this Subordination Agreement, by and between CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association and CITY OF ROSEVILLE and consents to the agreement of the parties set forth in this Agreement.
BORROWER:
MERCY HOUSING CALIFORNIA 101, L.P.,
a California limited partnership
By: Mercy Housing California 101 LLC,
a California limited liability company,
its general partner
By: Mercy Housing Calwest,
a California nonprofit public benefit
corporation,
its sole member/manager
By: ___________________________
Name: Richard C. Ciraulo
Title: Vice President
Subordination Agreement
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 _______ )
County of )
On _________________________, before me, ______________________________, Notary Public, personally appeared Richard C. Ciraulo 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)
Subordination Agreement
EXHIBIT A
LEGAL DESCRIPTION
[NOTE: TO BE INSERTED]
Subordination Agreement
EXHIBIT B
FORM PERMANENT LENDER SUBORDINATION AGREEMENT
4879-9198-0940v.3
WHEN RECORDED MAIL TO: )
)
Century Housing Corporation )
1000 Corporate Pointe )
Culver City, CA 90230 )
Attention: Legal Department )
_______________________________________________________________________ Space Above This Line For Recorder's Use
NOTICE
THIS SUBORDINATION AGREEMENT
RESULTS IN YOUR SECURITY INTERESTS IN THE PROPERTY
BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN
OF SOME OTHER OR LATER SECURITY INSTRUMENT
THIS SUBORDINATION AGREEMENT is made this ___ day of March, 2024, by (a single purpose entity to be determined) (“Borrower”), Century Housing Corporation, a California nonprofit corporation (“Century”), and City of Roseville, a municipal corporation (“Lender”).
RECITALS
A. Borrower has executed or is about to execute that certain Deed of Trust (“Lender Deed”) encumbering that certain real property located in the County of Placer, State of California, as more particularly described in Exhibit A attached hereto (the “Property”). The Lender Deed will be recorded in the Placer County Official Records (“Official Records”). The Lender Deed secures Borrower’s obligations under a promissory note in favor of Lender (the “Lender Note”) in the amount of $6,000,000.00.
B. Borrower has executed or is about to execute a promissory note in favor of Century in the face amount of $2,233,000.00 (“Century Note”) of even date herewith, and evidencing a loan (the “Century Loan”) in such amount to Borrower by Century. The Century Note is to be secured by a deed of trust executed by Borrower of even date herewith in favor of Century, encumbering the Property which will be recorded in the Official Records (“Century Deed”).
C. As a condition of making the Century Loan, Century requires that the Century Deed be unconditionally (and at all times remain a lien or charge upon the Property) prior and superior to all rights of Lender under the Lender Deed, and all indebtedness secured
thereby, and that Lender specifically and unconditionally subordinate the lien of the Lender Deed, and all the indebtedness secured thereby, to the lien or charge of the Century Deed.
D. Lender and Borrower intend that the Century Deed shall unconditionally be and remain at all times a lien or charge upon the Property prior and superior to Lender’s rights under the Lender Deed and all indebtedness secured thereby. Lender has agreed to specifically and unconditionally subordinate and subject the Lender Deed, and all indebtedness secured thereby, together with all rights and privileges of Lender thereunder, to the lien and charge of the Century Deed.
E. It is to the mutual benefit of the parties hereto that Century make the Century Loan to Borrower, and Lender is willing that the Century Deed securing the Century Loan shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the Lender Deed, and all indebtedness secured thereby.
NOW, THEREFORE in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, it is hereby agreed as follows:
1. The foregoing Recitals are hereby incorporated into this Agreement.
2. The Century Deed securing the Century Note and any modifications, renewals or extensions thereof, and any advances (including interest thereon) thereunder or secured thereby, shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to the Lender Deed, and all indebtedness secured thereby, to all loans, grants and advances of money made pursuant thereto, and to all rights and privileges of Lender thereunder; and said Lender Deed, and all indebtedness secured thereby, and all loans, grants and advances of money made pursuant thereto, together with all rights and privileges of Lender thereunder, are hereby subjected, and made subordinate, to the lien or charge of the Century Deed.
3. This Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the Lender Deed, and all indebtedness secured thereby, and all loans, grants and advances of money made pursuant thereto, together with all rights and privileges of Lender thereunder, to the lien or charge of the Century Deed, and shall supersede and cancel any prior agreements to subordinate the Lender Deed, and all indebtedness secured thereby to the Century Deed.
4. Lender declares, agrees, and acknowledges that:
a. It consents to all provisions of the Century Note, Century Deed, any other loan agreements or other loan or escrow agreements for the disbursement of the proceeds of the Century Loan;
b. Century, in making disbursements pursuant to any such agreements is under no obligation or duty to, nor has Century represented that it will, see to the application of such proceeds by the person or persons to whom Century disburses such proceeds, and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; and
c. It intentionally and unconditionally waives, relinquishes, subjects and subordinates the Lender Deed, and all indebtedness secured thereby, and all loans and advances of money pursuant thereto, together with all rights and privileges of Lender thereunder, in favor of the lien or charge upon the Property of the Century Deed and understands that in reliance upon, and in consideration of, this waiver, relinquishment, subjection, and subordination, specific loans and advances 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.
5. This Agreement may be executed in one or more counterparts, all of which when taken together shall constitute a single instrument, and any party hereto may execute this Agreement by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Subordination Agreement as of the day and year first above written.
Borrower: (a single purpose entity to be determined)
By: ___________________________________
[Name]
[Title]
Century: Century Housing Corporation, a California nonprofit corporation By: _____________________________________
Ronald M. Griffith
President\CEO
Lender: City of Roseville, a municipal corporation
By:
[name]
[title]
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 _____ __, 2024, 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.
__________________________________
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 _____ __, 2024, 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.
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 _____ __, 2024, 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.
__________________________________
EXHIBIT A
Property Description
The land referred to is situated in the County of Placer, City of Roseville, State of California, and is described as follows:
Parcel 2, as shown on the Map entitled “Parcel Map of Eskaton Roseville Manor” filed for record December 11, 2008, in Book 34 of Parcel Maps, at Page 121, Placer County Records, a portion of Section 31, Township 11 North, Range 6E M.D.B. & M., within the City of Roseville, the County of Placer, the State of California.
APN: 017-162-087-000
Address: 1721 Pleasant Grove Boulevard, Roseville, California 95747 485.235/586503
HOUSING TRUST FUND LOAN AGREEMENT
Between
CITY OF ROSEVILLE
and
MERCY HOUSING CALIFORNIA 101, L.P.
1715 PLEASANT GROVE BOULEVARD, ROSEVILLE
1 485.235/586503
HOUSING TRUST FUND LOAN AGREEMENT
(1715 Pleasant Grove Boulevard, Roseville)
This Housing Trust Fund Loan Agreement (the "Agreement") is entered into as of __________, 2024 (the "Effective Date"), by and between the City of Roseville, a municipal corporation (the "CITY,” and also referred to as “City,” “the City” and “Beneficiary” in the Loan Documents), and Mercy Housing California 101, L.P., a California limited partnership (the “DEVELOPER,” and also referred to as “the Borrower,” “the Developer,” “Owner/Developer” and “Trustor” in the Loan Documents), with reference to the following facts:
RECITALS
A. The DEVELOPER intends to construct forty-nine (49) residential rental units including one (1) manager’s unit, along with approximately 4,855 square feet of amenity space (the “Development”), of which forty-eight (48) residential rental units (the "Affordable Units") shall be affordable to low, very low and extremely low income households pursuant to the Regulatory Agreement, on property located at 1715 Pleasant Grove Boulevard in the City of Roseville, Placer County, and as more particularly described in Exhibit A attached hereto (collectively, the "Property"). The Property is owned in fee title by the DEVELOPER.
B. In order to make the units in the Development affordable, the DEVELOPER wishes to borrow from the CITY and the CITY wishes to extend to the DEVELOPER a loan of Six Million Dollars ($6,000,000) (the "Loan") to be used for construction and permanent financing of the Development. The Loan is comprised of Three Million Dollars ($3,000,000) from the Local Housing Trust Fund Program administered by the California Department of Housing and Community Development and Three Million Dollars ($3,000,000) from CITY matching funds. The Loan will be evidenced by a promissory note (the "Note") executed by the DEVELOPER in favor of the CITY and secured by a deed of trust recorded against the Property (the “Deed of Trust”).
C. The source of the Loan funds is the Roseville Housing Trust Fund (“Housing Trust Fund”), of which Three Million Dollars ($3,000,000) consists of Program Funds from the Local Housing Trust Fund program administered by the California Department of Housing and Community Development (“HCD”) and Three Million Dollars ($3,000,000) consists of Matching funds. The source of the Loan funds is not the proceeds of taxexempt bonds.
D. The Loan is being made to the DEVELOPER at an interest rate below the market rate in order to help achieve financial stability for the Development and to increase the supply of affordable rental housing in the CITY. In consideration for the Loan, the DEVELOPER has agreed to provide the Affordable Units for a fifty-five (55) year period.
The CITY and the DEVELOPER will record a regulatory agreement (the "Regulatory Agreement") against the Property to ensure the affordability of the Affordable Units. 2 485.235/586503
Separate regulatory agreements between the DEVELOPER and the entities providing the Approved Financing may also be executed to ensure the affordability of the Affordable Units.
NOW, THEREFORE, the Parties agree as follows:
AGREEMENT
The foregoing recitals are hereby incorporated by reference and made part of this Agreement.
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:
(a) “Affordable Units” is defined in paragraph B of the Recitals. (b) "Agreement" is this Housing Trust Fund Loan Agreement. (c) “Annual Operating Expenses” is defined in Section 2.8(c) below. (d) "Approved Financing" shall mean all of the following loans and equity (item (i) referred to as the "Approved Construction Financing" and items (ii)-(iii) referred to as the "Approved Permanent Financing") obtained by the DEVELOPER for the Development in addition to the Loan:
(i) Construction Loan made by Capital One, National Association (Senior Lender);
(ii) Permanent Loan made by Century Housing Corporation which is a Senior Loan
(iii) City of Roseville Pro Housing Fund Loan
(iv) Limited Partner capital contributions
(v) Deferred Development Fee; and
(vi) General Partner capital contribution of land
3 485.235/586503
(e) "Approved Project Budget" is the pro forma acquisition and construction budget for the Development, including sources and uses of funds, as approved by the CITY, and attached as Exhibit B.
(f) "City" is defined in the first paragraph of this Agreement. (g) “Construction Component” defined in Section 2.1(a) below. (h) "County" means the County of Placer, a political subdivision of the State of California.
(i) "DEVELOPER" is defined in the first paragraph of this Agreement. (j) "Deed of Trust" is the deed of trust of even date herewith, among the DEVELOPER, as trustor, Placer Title Company, as trustee, and the CITY, as beneficiary, that will encumber the Development to secure repayment of the Loan and performance of all covenants of the Loan Documents.
(k) "Default" is defined in Section 6.1 below.
(l) "Default Rate" is defined in Section 2.2(b).
(m) "Development" is defined in paragraph B of the Recitals. (n) “DIR” is defined in Section 3.3(c) below.
(o) "Effective Date" is defined in the first paragraph of this Agreement. (p) “Gross Revenue” is defined in Section 2.7(c) below. (q) "Hazardous Materials" is defined in Section 3.09(a) below. (r) "Hazardous Materials Claim" is defined in Section 3.09(b) below. (s) "Hazardous Materials Law" is defined in Section 3.09(b) below. (t) “Limited Partner” is Enterprise Community Opportunity Fund LLLP, a Maryland limited liability limited partnership.
(u) “HCD” is defined in Section 7.3 below.
(v) "Loan" is defined in paragraph C of the Recitals.
(w) "Loan Documents" are this Agreement, the Note, the Regulatory Agreement, and the Deed of Trust.
(x) Intentionally omitted.
4 485.235/586503
(y) "Note" is the promissory note of even date herewith between the DEVELOPER and the CITY evidencing the DEVELOPER's obligation to repay the Loan. (z) "Parties" are the CITY and the DEVELOPER.
(aa) "Property" is defined in paragraph B of the Recitals. (bb) "Regulatory Agreement" is defined in paragraph D of the Recitals. (cc) “Residual Receipts” are defined in Section 2.7(c) below. (dd) “Senior Lender” is a lender of a Senior Loan.
(ee) "Senior Loan" is defined in Section 2.5 below.
(ff) "Term" is defined in Section 2.7(a) below.
(gg) "Transfer" is defined in Section 3.14(a) below.
(hh) "Unit" means one of the forty-nine (49) rental housing units (including one manager’s Unit) to be constructed on the Property.
Section 1.2 Exhibits.
The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Approved Project Budget
ARTICLE 2.
LOAN PROVISIONS
Section 2.1 Loan and Applications for Additional Financing. (a) The CITY shall loan to the DEVELOPER the Loan in the principal amount of Six Million Dollars ($6,000,000) for the purposes set forth in Section 2.3 of this Agreement. The obligation to repay the Loan shall be evidenced by the Note.
Section 2.2 Interest.
(a) Interest. Subject to subsection (b) below, simple interest shall accrue on the outstanding principal balance of the Loan at a rate of three percent (3%) per annum.
(b) Default Interest. Upon the occurrence and continuance of a Default, interest on the Loan shall begin to accrue, as of the date of Default and continuing until 5 485.235/586503
such time as the Loan is repaid in full or the Default is cured, at the default rate of the lesser of eight percent (8%) per annum, compounded annually (the "Default Rate") and the highest rate permitted by law.
Section 2.3 Use of Loan Funds. The DEVELOPER shall use the Loan funds to fund construction of the Development and subsequent permanent financing of the Development in a manner consistent with the Approved Financing and Approved Project Budget, and as reviewed and approved by the California Department of Housing and Community Development. The DEVELOPER shall not use the Loan for any other purposes without the prior written consent of the CITY.
Section 2.4 Security. The DEVELOPER shall secure its obligation to repay the Loan, as evidenced by the Note, by executing the Deed of Trust, and recording it as a lien against the Property senior in lien priority to all other deeds of trust recorded against the Property except as provided in Section 2.5 below. The DEVELOPER shall also cause or permit the Regulatory Agreement to be recorded against the Property in a position superior to all other deeds of trust recorded against the Property, except as provided in Section 2.5 below.
Section 2.5 Subordination.
The Loan Documents shall be subordinated to the Construction Loan and Permanent Loan (in each case, a “Senior Loan”) and to the loan documents evidencing and securing the Senior Loan. The CITY may subordinate to any other loans or affordability covenants as approved by the CITY and HCD in their reasonable discretion.
The Loan Documents will be of co-equal priority with the Loan Documents related to the City of Roseville Pro Housing Fund Loan.
Section 2.6 Conditions Precedent to Disbursement of Loan Funds. (a) Maximum Disbursement. The maximum amount of funds to be disbursed pursuant to this Section 2.6 shall not exceed the amount of the Loan. (b) Conditions Precedent to Disbursement of the Loan. The CITY shall not be obligated to make any disbursements of the Loan or take any other action under the Loan Documents unless all of the following conditions precedent are satisfied prior to each such disbursement of Loan funds:
(i) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement; (ii) The DEVELOPER has delivered to the CITY a copy of a corporate resolution authorizing the DEVELOPER's execution of the Loan Documents; (iii) Intentionally deleted
6 485.235/586503
(iv) The DEVELOPER has delivered to the CITY a certificate of good standing dated within thirty (30) calendar days of the Effective Date; (v) The DEVELOPER has furnished the CITY with evidence of the insurance coverage meeting the requirements of Section 3.15 below; (vi) The DEVELOPER has caused to be executed and delivered to the CITY all Loan Documents and any other instruments and policies required under the Loan Documents;
(vii) The Deed of Trust and the Regulatory Agreement will be recorded against the Property in the County’s Office of the Recorder concurrently with the close of escrow;
(viii) A title insurer reasonably acceptable to the CITY is unconditionally and irrevocably committed to issuing an ALTA Lender's Policy of title insurance insuring the priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and exclusions listed on Schedule B to such Lender’s Policy or as may be reasonably acceptable to the CITY (collectively, the “Permitted Encumbrances”, and containing such endorsements as the CITY may reasonably require. The DEVELOPER shall provide whatever documentation (including an indemnification agreement), deposits or surety is reasonably required by the title company in order for the CITY's Deed of Trust to be senior in lien priority to any other liens, except approved Senior Loans and other liens approved in writing by CITY; (ix) The DEVELOPER is in possession of all City zoning and land use approvals required to construct the Development and has provided the CITY with evidence of such approvals;
(x) Intentionally deleted.
(xi) The DEVELOPER has provided to CITY and CITY has
approved the Approved Project Budget as set forth in Section 1.1(e) above. (c) Intentionally deleted.
(d) Intentionally deleted.
Section 2.7 Repayment Schedule.
The Loan shall be repaid as follows:
(a) The Loan and this Agreement shall have a term that commences on the Effective Date and expires on the earlier of: (i) fifty-five (55) years from the date of issuance of the certificate of occupancy or equivalent certification provided by the CITY; or (ii) December 31, 2081 (the "Term").
7 485.235/586503
(b) No later than April 30th of each calendar year commencing the calendar year after the year the Approved Permanent Financing has closed, the DEVELOPER shall make repayments of the Loan for that prior calendar year based on fifty percent (50%) of the available amount of Residual Receipts (as defined below in subsection (c)(iii)). These payments shall be credited first against accrued interest and then against outstanding principal of the Loan, and shall be accompanied by the DEVELOPER's report of Residual Receipts (including an independent auditor's report regarding the auditor's review of Gross Revenue and Annual Operating Expenses). The DEVELOPER shall provide the CITY with any documentation reasonably requested by the CITY to substantiate the DEVELOPER's determination of Residual Receipts. If the repayments are not received by the CITY within fifteen (15) calendar days after the installment is due, DEVELOPER shall pay to the CITY a late charge of five percent (5%) of such installment. Such late charge shall be immediately due and payable without demand by the CITY.
(c) The following definitions shall apply for purposes of Section 2.8(b):
(i) "Annual Operating Expenses", with respect to a particular calendar year during the Term, means the following costs reasonably and actually incurred for operation and maintenance of the Development to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property taxes and assessments imposed on the Development; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Development) on loans that are part of the Approved Financing; property management fees and reimbursements, excluding incentive management fees, not to exceed fees and reimbursements which are standard in the industry, and pursuant to a management contract approved by the CITY; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of occupancy fees required for operation of the Development; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Development in the amount required by Senior Lenders or DEVELOPER’s investor limited partner; cash deposited into an operating reserve for the Development in an amount required by Senior Lenders or DEVELOPER’s investor limited partner; extraordinary operating costs specifically approved by the CITY; payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves; general partner asset management fees not-to-exceed Thirty Five Thousand Dollars ($35,000) in the first year and subject to annual increases at three percent (3%); limited partner asset management fees not-to-exceed Eight Thousand Five Hundred Dollars ($8,500) in the first year and subject to annual increases at three percent (3%); the cost of social services; any tax credit adjuster payments; payment of investor limited partner tax liability; repayment of any completion or operating loans made to the Developer; deferred developer fees; and other ordinary and reasonable operating expenses approved by the CITY and not listed above. Annual Operating Expenses shall not include the following: depreciation, 8 485.235/586503
amortization, depletion or other non-cash expenses or any amount expended from a reserve account.
(ii) "Gross Revenue," with respect to a particular calendar year during the Term, means all revenue, income, receipts, and other consideration actually received by DEVELOPER from operation and leasing of the Development. "Gross Revenue" shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements resulting in actual income; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; subject to the rights of Senior Lenders, the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Development (or applied toward the cost of recovering such proceeds) and not payable to the Senior Lenders; and condemnation awards for a taking of part or all of the Development for a temporary period. "Gross Revenue" shall also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion of the Development. "Gross Revenue" shall not include any rental income received from the Development’s commercial space, tenants' security deposits, loan proceeds, capital contributions or similar advances.
(iii) "Residual Receipts", with respect to a particular calendar year during the Term, means the amount by which Gross Revenue (as defined above) exceeds Annual Operating Expenses (as defined above).
(d) In connection with the annual payments required by Section 2.8(b), within one hundred twenty (120) calendar days of the end of the calendar year, the DEVELOPER shall furnish to the CITY an audited statement duly certified by an independent firm of certified public accountants, setting forth in reasonable detail the computation and amount of Residual Receipts during the preceding calendar year. (e) The DEVELOPER shall keep and maintain on the Property, or at its principal place of business, or elsewhere with the CITY's written consent, full, complete and appropriate books, records and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the DEVELOPER's calculation of Residual Receipts. Books, records and accounts relating to the DEVELOPER's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement which provide for the calculation of Residual Receipts on a cash basis. All such books, records, and accounts shall be open to and available for inspection by the CITY, its auditors or other CITY authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that the DEVELOPER may be required to furnish any governmental agency shall at all reasonable times be open for inspection by the CITY at the place that the books, records and accounts of the DEVELOPER are kept. The DEVELOPER shall preserve 9 485.235/586503
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.
(f) All principal and accrued interest on the Loan shall be due in full on the earlier to occur of (i) the date of any Default, or (ii) the expiration of the Term. (g) The CITY and the DEVELOPER shall have the right, but not the obligation, to extend the period for repayment of the Loan if desirable to serve the purposes of this Agreement.
(h) The DEVELOPER shall have the right to prepay the Loan at any time without penalty. However, the Regulatory Agreement shall remain in effect for the entire Term.
Section 2.8 Non-Recourse.
Except as provided below, the DEVELOPER and its partners shall not have any direct or indirect personal liability for payment of the principal of, and interest on, the Loan or the performance of the covenants of the DEVELOPER under the Deed of Trust.
Following recordation of the Deed of Trust, the sole recourse of the CITY with respect to the principal of, and interest on, the Note and defaults by the DEVELOPER in the performance of its covenants under the Deed of Trust shall be to the property described in the Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the CITY thereunder, or (b) 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. 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 and the performance of the DEVELOPER's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve the DEVELOPER of its obligation to indemnify the CITY under Section 7.5 of this Agreement, for liability for (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the 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 DEVELOPER other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds 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 Property. 10 485.235/586503
ARTICLE 3.
LOAN REQUIREMENTS
Section 3.1 Construction Reporting.
During construction of the Development, DEVELOPER shall provide to the CITY, on a monthly basis, copies of construction inspection reports and draw reports provided to construction lenders, at the same time as those reports are provided to construction lenders and regardless of whether the CITY is at the time being requested to make construction disbursements.
Section 3.2 Completion of Construction.
DEVELOPER shall diligently prosecute construction of the Development to completion, and shall cause the completion of the Development no later than required by the California Tax Credit Allocation Committee placed-in-service deadline associated with the Approved Financing, or such later date as the CITY may approve.
Section 3.3 Construction Pursuant to Plans and Laws; Prevailing Wages. (a) DEVELOPER shall construct the Development in conformance with the Approved Financing and Approved Project Budget and consistent with the plans and specifications utilized to obtain City permits. DEVELOPER shall notify the CITY in a timely manner of any changes in the work required to be performed under this Agreement, including any additions, changes, or deletions to the plans and specifications approved by the City.
(b) DEVELOPER shall cause all construction work to be performed in compliance with (i) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, including without limitation and to the extent applicable, state prevailing wages pursuant to Labor Code Section 1770 et seq., and the regulations pursuant thereto, as further set forth in subsection (c) below; and (ii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and DEVELOPER shall be responsible to the CITY for the procurement and maintenance thereof, as may be required of DEVELOPER and all entities engaged in work on the construction.
(c) This Agreement has been prepared with the intention that CITY assistance under this Agreement meets the exception set forth in Labor Code Section 1720(c)(5)(E) to the general requirement that state prevailing wages be paid in connection with construction work that is paid for in whole or in part out of public funds; provided, however, that nothing in this Agreement constitutes a representation or warranty by any party regarding the applicability of the provisions of Labor Code Section 1720 et seq., and the hiring of apprentices pursuant to Labor Code Sections 1777.5 et seq., to the Approved Financing. If applicable to the Approved Financing or Approved Project Budget, the 11 485.235/586503
DEVELOPER shall pay and shall cause the contractor and subcontractors to pay prevailing wages in connection with the construction of the Development, as those wages are determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices as required by Labor Code Sections 1777.5 et seq., and the implementing regulations of the Department of Industrial Relations ("DIR"). The DEVELOPER 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 the DEVELOPER, its contractor and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations of the DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the any other work undertaken or in connection with the Property. The requirements in this Subsection shall survive the repayment of the Loan, and the reconveyance of the Deed of Trust.
Section 3.4 Mechanics Liens, Stop Payment Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Property or a stop payment notice affecting the Loan is served on the CITY or any other lender or other third party in connection with the Development, then DEVELOPER shall, within thirty (30) calendar days after such filing or service, either pay and fully discharge the lien or stop payment notice, effect the release of such lien or stop payment 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 payment notice will be paid or discharged.
(b) If DEVELOPER fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the CITY may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at DEVELOPER'S expense. Alternately, the CITY may require DEVELOPER to immediately deposit with the CITY the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The CITY may use such deposit to satisfy any claim or lien that is adversely determined against DEVELOPER. (c) DEVELOPER shall file a valid notice of cessation or notice of completion upon cessation of construction on the Development and take all other reasonable steps to forestall the assertion of claims of lien against the Property.
DEVELOPER 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 Property.
Section 3.5 Inspections.
DEVELOPER shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection of the construction by the CITY and by public 12 485.235/586503
authorities during reasonable business hours for the purposes of determining compliance with this Agreement.
Section 3.6 Equal Opportunity.
During construction of the Development there shall be no discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged in the construction work.
Section 3.7 Information and Annual Reporting.
(a) The DEVELOPER shall provide any information reasonably requested by the CITY in connection with the Development in connection with the DEVELOPER's use of the Loan funds. In particular, the DEVELOPER shall provide the CITY with annual reports required by the Regulatory Agreement, including but not limited to reports regarding the Development's rent and occupancy levels, as well as the annual operating budget. Without limitation, the DEVELOPER shall provide the CITY no later than the ninetieth (90th) day after the close of each calendar year following the Effective Date, hardcopies and PDF copies of the following documents:
(i) insurance certificates detailing all coverage required under Section 3.15 below;
(ii) evidence of payment of property taxes or property tax exemption for the Development, as applicable;
(iii) audited financial statements for the Development and DEVELOPER; and
(iv) an occupancy report including: (i) the verified income of each tenant or household, (ii) the number and demographic information of tenants in each household; (iii) the current rents charged each tenant or household and whether these rents include utilities, and (iv) the date tenancy commenced for each Affordable Unit; (b) Substitution of Monitoring and Compliance Reports Prepared for Other Financing Programs. If similar reports on some or all of the Affordable Units are required for regulatory compliance with other financing programs, those reports may be deemed satisfactory for the purpose of this Section by the CITY, with respect to the portion of the requirements of this Section covered by such reports, provided that copies are provided on an annual basis to the CITY with an owner certification addressed to the CITY certifying that the DEVELOPER is not in default under this Agreement.
Section 3.8 Records. The DEVELOPER shall keep and maintain at the Development, or elsewhere with the CITY's written consent, full, complete and appropriate books, record and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the DEVELOPER's compliance with the terms and provisions of this Agreement. All 13 485.235/586503
such books, records, and accounts shall be open to and available for audit, inspection and copying by the CITY, their auditors or other authorized representatives at reasonable intervals during normal business hours. The DEVELOPER shall preserve such records for a period of not less than five (5) years after the creation of such records. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan funds. Records must be kept accurate and current.
Section 3.9 Hazardous Materials.
(a) The DEVELOPER 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. The DEVELOPER 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 construction of projects like the Development or kept and used in and about residential property of this type. (b) The DEVELOPER 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 the DEVELOPER 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 the DEVELOPER 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) the DEVELOPER'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 the California Health and Safety Code) 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) The CITY shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by the DEVELOPER. The DEVELOPER shall defend, indemnify and hold harmless the CITY and its councilmembers, 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 14 485.235/586503
including without limitation: (a) all foreseeable consequential damages; (b) 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 (c) all reasonable costs and expenses incurred by the CITY in connection with clauses (a) and (b), 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 defend and indemnify shall survive termination of this Agreement.
Notwithstanding the foregoing, the DEVELOPER shall have no indemnification obligations under this Section 3.9(c) with respect to issues and events first arising after the foreclosure of the Property by the CITY.
(d) Without the CITY's prior written consent, which shall not be unreasonably withheld, the DEVELOPER shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the 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 the DEVELOPER shall notify the CITY as soon as practicable of any action so taken. The CITY agrees not to withhold its consent, where such consent is required hereunder, if (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) the DEVELOPER will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) the DEVELOPER establishes to the reasonable satisfaction of the CITY that there is no reasonable alternative to such remedial action which would result in less impairment of the CITY's security hereunder; or (iv) the action has been agreed to by the CITY.
(e) The DEVELOPER hereby acknowledges and agrees that (i) this Section is intended as the CITY's written request for information (and the DEVELOPER'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.
15 485.235/586503
(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 CITY's or the trustee's rights and remedies under the Deed of Trust, the CITY may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion of the Property and (2) exercise (i) the rights and remedies of an unsecured creditor, including reduction of its claim against the DEVELOPER to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining the CITY's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the DEVELOPER shall be deemed to have willfully permitted or acquiesced in a release or threatened release of Hazardous Materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the DEVELOPER 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) reasonable 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, shall be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the CITY upon its demand made at any time following the conclusion of such action.
Section 3.10 Maintenance and Damage.
(a) During the course of both construction and operation of the Development, the DEVELOPER shall maintain the Development and the Property in good repair, reasonable wear and tear excepted, and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if the DEVELOPER has not cured such condition within thirty (30) calendar days after receiving a CITY notice of such a condition, or within ninety (90) calendar days after receiving a CITY notice of such a condition in the case of a condition that cannot be reasonably remedies in thirty (30) calendar days, then in addition to any other rights available to the CITY, the CITY shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property. (b) Subject to the requirements of Senior Lenders, and if economically feasible in the CITY's reasonable judgment after consultation with the DEVELOPER, if any improvement now or in the future on the Property is damaged or destroyed, then the DEVELOPER shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications for the Development. Such work or repair shall be commenced no later than the later of one hundred twenty (120) calendar days, or such longer period approved by the CITY in writing, after the damage or loss occurs or thirty (30) calendar days following receipt of the insurance proceeds, and shall be complete within one year thereafter. Any insurance proceeds collected for 16 485.235/586503
such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then the DEVELOPER shall make up the deficiency. If the DEVELOPER does not make repairs, then any insurance proceeds collected for such damage or destruction shall be promptly delivered to the CITY as a special repayment of the Loan, subject to the rights of the Senior Lenders, if any.
Section 3.11 Fees and Taxes. The DEVELOPER shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Development to the extent owned by the DEVELOPER, and shall pay such charges prior to delinquency. However, the DEVELOPER shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the CITY, the DEVELOPER deposits with the CITY any funds or other forms of assurance that the CITY in good faith from time to time determines appropriate to protect the CITY from the consequences of the contest being unsuccessful.
Section 3.12 Notice of Litigation.
The DEVELOPER shall promptly notify the CITY in writing of any litigation which has the potential to materially affect the DEVELOPER or the Property or the Development and of any claims or disputes that involve a material risk of such litigation.
Section 3.13 Nondiscrimination.
(a) DEVELOPER herein covenants by and for itself, its subcontractors, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, nor denial of the benefits of this Agreement to, any person or group of persons, on the basis of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, gender or selfidentified gender, sexual orientation, marital status, age, mental disability, physical disability or medical condition (including cancer, HIV and AIDS) or political affiliation or belief, nor any unlawful discrimination against any employee or applicant for employment because of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, gender or self-identified gender, sexual orientation, marital status, age (over 40), mental disability, physical disability or medical condition (including cancer, HIV and AIDS), use of family care leave, or political affiliation or belief. DEVELOPER shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination or harassment. In addition to the foregoing general obligations, DEVELOPER shall comply with the provisions of the Fair Employment and Housing Act (Government Code section 12900, et seq.), the regulations promulgated thereunder (Title 2, California Code of Regulations, section 7285.0, et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (sections 11135-11139.5) and any state or local regulations adopted to implement any of the foregoing, as such statutes and regulations may be amended from time to time. To the extent this Agreement subcontracts to DEVELOPER services or works required of CITY by the State of California pursuant to agreement between CITY and the State, the 17 485.235/586503
applicable regulations of the Fair Employment and Housing Commission implementing Government Code section 12990 (a) through (f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are expressly incorporated into this Agreement by reference and made a part hereof as if set forth in full, and DEVELOPER and any of its subcontractors shall give written notice of their obligations thereunder to labor organizations with which they have collective bargaining or other agreements. (b) The provisions of paragraph (a) shall further apply to the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Development, and DEVELOPER and any person claiming under or through the DEVELOPER, shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the Development.
(c) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (a).
(d) The DEVELOPER shall include the provisions contained in this Section in all contracts and subcontracts related to the Development. (e) The requirements in this Section shall survive the repayment of the Loan, and the reconveyance of the Deed of Trust.
Section 3.14 Transfer.
(a) For purposes of this Agreement, "Transfer" is any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any of DEVELOPER’S rights and/or duties under this Agreement, and/or (ii) any ownership 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 the DEVELOPER retains title. "Transfer" shall exclude the leasing of any single unit in the Development to an occupant, the granting of security interest in connection with the Approved Financing, and the transfer of an easement interest in the Property for utility purposes. The limitations on DEVELOPER’s right of Transfer contained in this Section 3.14 also shall not apply to:
(i) any foreclosure, deed in lieu of foreclosure, or other remedial action lawfully taken by any Senior Lender holding a security interest in the Property with priority over the CITY’s interests;
(ii) the transfer of limited partner interests in DEVELOPER, 18 485.235/586503
(iii) the removal or buy-out of a general partner or a limited partner pursuant to the terms and conditions of DEVELOPER’s organizational document or any purchase option agreement or put option agreement contemplated thereby;
(iv) transfers to a tax-exempt entity under the direct control of or under common control with DEVELOPER or a general partner of DEVELOPER (provided that the City shall not unreasonably withhold its consent to a transfer of general partner interest to a tax-exempt entity that is not under the direct control with DEVELOPER or a general partner of DEVELOPER if such transfer will maintain the property tax exemption for the Property); (v) any mortgage, deed of trust, or other form of conveyance for restructuring or refinancing of any amount of senior indebtedness for the Project, provided that the amount of indebtedness incurred in the restructuring or refinancing is not in excess of the original principal amount of such senior indebtedness, unless the additional indebtedness is used to pay the entire unpaid principal balance of the California Department of Housing and Community Development (HCD) Loan.
(vi) the granting of easements to any appropriate governmental agency or utility or permits to facilitate the development of the Project; (vii) the transfer (A) of an interest in and/or of an existing partner to another existing partner, or (B) of an interest in an existing general partner to an affiliate of any general partner;
(viii) transfers of an interest to a new partner which is an affiliate of an existing partner, including transfers of an additional general partner interest to an affiliate of a limited partner; or
(ix) transfer of the Project or partnership interests in DEVELOPER to a general partner of DEVELOPER at the end of the fifteen year Tax Credit initial compliance period;
(x) any mortgage, deed of trust, or other form of conveyance for any subordinate Approved Financing (i.e. subordinate to the Deed of Trust), or refinancing thereof, Permitted Encumbrances, or the recording of a regulatory agreement in connection with the tax credit requirements applicable to the Development
The City Manager or his/her designee is authorized to execute assignment and assumption agreements on behalf of the CITY to implement any approved Transfer. (b) CITY is entering into this Agreement based on the experience, skill, and ability to perform of DEVELOPER. The DEVELOPER recognizes that its qualifications and identity are of particular concern to the CITY, in view of: (i) the importance of affordable housing to the general welfare of the community; (ii) the reliance 19 485.235/586503
by the CITY upon the unique qualifications and ability of the DEVELOPER to ensure the quality of the affordability, use, operation, and maintenance of the Development; (iii) the requirement that the Development be used for affordable housing; and (iv) DEVELOPER's representation that the Development is not to be acquired or used for speculation, but only for operation by the DEVELOPER in accordance with the Regulatory Agreement.
(c) No Transfer not specifically authorized in this Section 3.14 shall be permitted without the prior written consent of the CITY and HCD, which the CITY and HCD may withhold in their reasonable discretion. The Loan shall automatically accelerate and be due in full upon any Transfer made without the prior written consent of the CITY. (d) Intentionally deleted.
Section 3.15 Insurance Requirements.
(a) The DEVELOPER shall maintain the following insurance coverage throughout the Term of the Loan:
(i) Workers’ Compensation insurance to the extent required by law, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,000,000) each accident.
(ii) Comprehensive General Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations (occurrence form CG-0001).
(iii) Comprehensive Automobile Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable.
(iv) Property insurance covering the Development, 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.
The DEVELOPER shall cause any general contractor, agent, or subcontractor working on the Development under direct contract with the DEVELOPER or subcontract to maintain insurance of the types and in at least the minimum amounts described in subsections (a)(i), (a)(ii), and (a)(iii) 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 (b), (c), and (d) below, including, without limitation, the 20 485.235/586503
requirement of subsection (c). Liability and Comprehensive Automobile Liability insurance to be maintained by such contractors and agents pursuant to this subsection shall name as additional insureds the CITY, its officers, officials, agents, employees and volunteers.
(b) The required insurance shall be provided under an occurrence form, and the DEVELOPER shall maintain the coverage described in subsection (a) 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 shall be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above.
Insurance is to be placed with insurers with a current A.M. Best’s rating of not less than A:VII.
(c) Certificates. All insurance coverages referenced in subparagraph (a) above, shall be evidenced by one or more certificates of coverage or, with the consent of the CITY, demonstrated by other evidence of coverage acceptable to the CITY, which shall be filed by DEVELOPER and approved by the CITY prior to disbursement of the Loan. Such certificates shall be kept current during the term of this Agreement; shall provide that CITY shall be given no less than thirty (30) calendar days prior written notice of any non-renewal, cancellation, other termination, or material change, except that only ten (10) calendar days prior written notice shall be required where the cause of nonrenewal or cancellation is non-payment of premium; and shall provide that the inclusion of more than one insured shall not operate to impair the rights of one insured against another insured, the coverage afforded applying as though separate policies had been issued to each insured, but the inclusion of more than one insured shall not operate to increase the limits of the company's liability. For the commercial general liability insurance coverage referenced in subparagraph (a)(ii) of this Section, and, where the vehicles are covered by a commercial policy rather than a personal policy, for the comprehensive automobile liability insurance coverage referenced in subparagraph (a)(iii) of this Section, DEVELOPER shall also file with the CITY evidence of coverage an endorsement from the insurance provider naming CITY, its officers, employees, agents and volunteers as additional insureds and waiving subrogation, and the certificate or other evidence of coverage shall provide that if the same policy applies to activities of DEVELOPER not covered by this Agreement then the limits in the applicable certificate relating to the additional insured coverage of CITY shall pertain only to liability for activities of DEVELOPER under this Agreement, and that the insurance provided is primary coverage to CITY with respect to any insurance or self-insurance programs maintained by CITY. The additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94. Upon request by the CITY, DEVELOPER shall provide or arrange for the insurer to provide within thirty (30) calendar days of the request, certified copies of the actual insurance policies or relevant portions thereof.
21 485.235/586503
(d) Deductibles/Retentions. Any deductibles or self-insured retentions shall be declared to, and be subject to approval by, the CITY, which approval shall not be denied unless the CITY determines that the deductibles or self-insured retentions are unreasonably large in relation to the Loan and the Development and the risks of liability associated with the activities required of DEVELOPER by this Agreement. At the option of and upon request by the CITY if the City determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects CITY, its officers, employees, agents and volunteers or DEVELOPER shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses.
ARTICLE 4.
AFFORDABLE HOUSING REQUIREMENTS
Section 4.1 Affordability Restrictions.
In consideration for the Loan to be provided to the DEVELOPER on below-market terms, the DEVELOPER hereby agrees that forty-eight (48) Units shall be affordable to low, very low and extremely low income tenants for fifty-five (55) years as further specified in the Regulatory Agreement between the DEVELOPER and CITY and other regulatory agreements between the DEVELOPER and providers of the Approved Financing. The DEVELOPER shall record against the Property, prior to the disbursement of any Loan funds, the Regulatory Agreement.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER
Section 5.1 Representations and Warranties.
The DEVELOPER hereby represents and warrants to the CITY as follows:
(a) Organization. The DEVELOPER is a duly organized 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.
(b) Authority of the DEVELOPER. The DEVELOPER has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to 22 485.235/586503
be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of the DEVELOPER, and all actions required under the DEVELOPER's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Loan Documents 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 the DEVELOPER enforceable against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on the DEVELOPER, or any provision of the organizational documents of the DEVELOPER, or will conflict with or constitute a breach of or a default under any agreement to which the DEVELOPER is a party, or will result in the creation or imposition of any lien upon any assets or property of the DEVELOPER, other than liens established pursuant hereto. (f) Compliance With Laws; Consents and Approvals. The construction and operation of the Development will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of officers of any government or agency. (g) Pending Proceedings. The DEVELOPER is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of the DEVELOPER, threatened against or affecting the DEVELOPER or the Development, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to the DEVELOPER, materially affect the DEVELOPER's ability to repay the Loan or impair the security to be given to the CITY pursuant hereto.
(h) Title to Land. At the time of recordation of the Deed of Trust, the DEVELOPER will have acquired the Property in fee, and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than liens for current real property taxes and liens in favor of the CITY or for the Approved Financing, except for Permitted Encumbrances and liens approved in writing by the CITY.
23 485.235/586503
(i) Financial Statements. The financial statements of the DEVELOPER and other financial data and information furnished by the DEVELOPER 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 the DEVELOPER from that shown by such financial statements and other data and information.
(j) Taxes. The DEVELOPER has filed all federal and other material tax returns and reports required to be filed, and has paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon the DEVELOPER or the DEVELOPER's income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against the DEVELOPER that could, if made, be reasonably expected to have a material adverse effect upon the Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the DEVELOPER, taken as a whole, which would be expected to result in a material impairment of the ability of the DEVELOPER 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 the DEVELOPER of any Loan Document.
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default.
Each of the following shall constitute a "Default" by the DEVELOPER under this Agreement:
(a) Failure to Make Payment. Failure to repay the principal and any interest on the Loan within ten (10) calendar days after receipt of written notice from the CITY that such payment is due pursuant to the Loan Documents. (b) Breach of Covenants. Failure by the DEVELOPER to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such failure having continued uncured for thirty (30) calendar days after receipt of written notice thereof from the CITY to the DEVELOPER or, if the breach cannot be cured within thirty (30) calendar days, the DEVELOPER shall not be in breach so long as the DEVELOPER is diligently undertaking to cure such breach; provided, however, that if a different period or notice requirement is specified under any other Section of this Article 6, the specific provisions shall control.
(c) Intentionally Omitted.
(d) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging the DEVELOPER to be bankrupt or insolvent, (ii) 24 485.235/586503
approving as properly filed a petition seeking reorganization of the DEVELOPER or seeking any arrangement for the DEVELOPER under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of the DEVELOPER in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or liquidation of the DEVELOPER, 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 the DEVELOPER shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note. (e) Assignment; Attachment. The DEVELOPER shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note.
(f) Suspension; Termination. The DEVELOPER shall have voluntarily suspended its business or, shall have been dissolved or terminated. (g) Liens on Property and the Development. There shall be filed any claim of lien (other than Permitted Encumbrances or liens in connection with the Approved Financing, and liens approved in writing by the CITY) against the Development 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) calendar days, without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the CITY.
(h) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Development other than by the CITY. (i) Unauthorized Transfer. Any Transfer other than as permitted by Section 3.14.
(j) Representation or Warranty Incorrect. Any DEVELOPER representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the CITY in connection with any of the Loan Documents, proving to have been incorrect in any material respect when made or when later due to be performed.
Section 6.2 Remedies.
25 485.235/586503
Notwithstanding anything to the contrary in any of the Loan Documents, any partners of the DEVELOPER shall have the right but not the obligation to cure any Default, The Limited Partner of DEVELOPER shall be given a duplicate notice of any Default at the address set forth in Section 7.9 of this Agreement. The CITY agrees that any cure of a Default by any partners of the DEVELOPER shall be deemed to be a cure by the DEVELOPER, and shall be accepted or rejected on the same basis as if made or tendered by the DEVELOPER. 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 and the Loan Documents, including but not limited to the following:
(a) Acceleration of Note. The CITY shall have the right to cause all indebtedness of the DEVELOPER to the CITY under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. The DEVELOPER waives all right to presentment, demand, protest or notice of protest or dishonor. The CITY may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the CITY as a creditor and secured party under the law, including the Uniform Commercial Code, and including foreclosure under the Deed of Trust.
(b) Specific Performance. The CITY shall have the right to mandamus or other suit, action or proceeding at law or in equity to require the DEVELOPER to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents. (c) Right to Cure at the DEVELOPER's Expense. The CITY shall have the right (but not the obligation) to cure any monetary default by the DEVELOPER under a loan other than the Loan. The DEVELOPER agrees to reimburse the CITY for any funds advanced by the CITY to cure a monetary default by the DEVELOPER upon demand therefor, together with interest thereon at the lesser of the maximum rate permitted by law and the Default Rate from the date of expenditure until the date of reimbursement.
Section 6.3 Right of Contest.
The DEVELOPER shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the CITY or the rights of the CITY hereunder.
Section 6.4 Remedies Cumulative.
No right, power, or remedy given to the CITY by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the CITY by the terms of any such instrument, or by any statute or otherwise against the DEVELOPER and any other person. Neither the failure nor any delay on the part of the CITY to exercise any such rights and remedies 26 485.235/586503
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 the DEVELOPER or its agents, employees or contractors, and the DEVELOPER shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. The DEVELOPER has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the acquisition, construction, and operation of the Development, the DEVELOPER shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. The DEVELOPER 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 the DEVELOPER may have employed or with whom the DEVELOPER may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the purchase of the Property, the construction or operation of the Development, and the DEVELOPER shall include similar requirements in any contracts entered into for the construction or operation of the Development.
Section 7.3 Amendments.
No alteration or variation of the terms of this Agreement shall be valid unless made in writing by the Parties and approved by HCD. The City Manager is authorized to execute on behalf of the CITY amendments to the Loan Documents or amended and restated Loan Documents so long as the City Council first approves any material change in the amount or terms of this Agreement or in the amounts or terms of financing provided by other parties for the Development, requiring conforming amendments to the Loan Documents. In the event of amendments to the Loan Documents, CITY shall submit copies of all trust fund loan guidelines and underwriting standards and procedures for 27 485.235/586503
review and approval by the California Department of Housing and Community Development (“HCD”).
Section 7.4 Loan Documents.
In the event of any conflict among the Loan Documents, the most restrictive requirements shall apply.
Section 7.5 Indemnification.
(a) To the full extent permitted by law, the DEVELOPER shall indemnify, defend at its own expense, and hold the CITY and its elected officials, officers, employees and agents in their official capacity (collectively "Indemnitees") 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 Development, except to the extent such claim arises from the grossly negligent or willful misconduct of the CITY or Indemnitees. Each Party shall notify the other Party immediately in writing of any claim or damage related to activities performed under this Agreement. The Parties shall cooperate with each other in the investigation and disposition of any claim arising out of the activities under this Agreement, providing that nothing shall require either party to disclose any documents, records or communications that are protected under the attorney-client privilege or attorney work product privilege. (b) The provisions of this Section shall survive the expiration of the Term, the reconveyance of the Deed of Trust, and any release of part or all of the Property from the burdens of this Agreement. The defense and indemnity obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Agreement.
Section 7.6 Non-Liability of CITY Officials, Employees and Agents.
No official, employee or agent of the CITY shall be personally liable to the DEVELOPER in the event of any default or breach by the CITY or for any amount which may become due to the DEVELOPER or its successor or on any obligation under the terms of this Agreement.
Section 7.7 No Third Party Beneficiaries.
There shall be no third party beneficiaries to this Agreement.
Section 7.8 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in subsection (b) below who exercises or has exercised any functions 28 485.235/586503
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. The DEVELOPER shall exercise due diligence to ensure that the prohibition in this Section is followed.
(b) The conflict of interest provisions of subsection (a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the CITY, or any person related within the third (3rd) degree of such person.
(c) In accordance with 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 DEVELOPER, or immediate family member of any of the preceding, shall make or participate in a decision, made by the CITY or a CITY council, board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or the DEVELOPER. 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.
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:
DEVELOPER: Mercy Housing California 101, L.P.
c/o Mercy Housing California
1256 Market Street
San Francisco, CA 94102
Attn: Richard C. Ciraulo
with a copy to:
with a copy to:
Enterprise Community Opportunity Fund LLLP
c/o Enterprise Community Asset Management, Inc.
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
29 485.235/586503
Attn: Asset Management
CITY: City of Roseville
311 Vernon Street
Roseville, California 95678
Attn: City 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). Any notice sent to DEVELOPER will also be sent to DEVELOPER'S limited partner.
Section 7.10 Applicable Law and Venue.
This Agreement shall be governed by and construed in accordance with California law. Venue shall be Placer County.
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 the DEVELOPER and its successors and assigns in the Property and the Development for the entire Term, and the benefit hereof shall inure to the benefit of the CITY and its successors and assigns. 30 485.235/586503
Section 7.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other Party.
Section 7.13 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, terrorism, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, or court order. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) calendar days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (10) calendar 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) calendar days.
Section 7.15 CITY Approval.
The CITY has authorized the City Manager to execute the Loan Documents 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 the DEVELOPER defaults under the Loan Documents. 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.
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 the DEVELOPER or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to the DEVELOPER to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the CITY to any act or omission by the DEVELOPER shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the CITY's written consent to future waivers.
31 485.235/586503
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.
Section 7.18 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the Parties with respect to the Loan. If there is any conflict between this Agreement and any other Loan Documents, the most restrictive provisions shall control.
Section 7.19 Multiple Originals; Counterparts.
This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
Section 7.20 Signage.
As required by the California Department of Housing and Community Development as a condition of the LHTF Program, during the construction period, if DEVELOPER elects to place a sign or signs identifying the Development that is visible to the public, Borrower shall include the following language on the sign, “Funding provided by the Local Housing Trust Fund and the California Department of Housing and Community Development.” If the Borrower does not elect to place a sign on the Property identifying the Development, the California Department of Housing and Community Development may place one or more signs on the Property stating that it is providing financing for the Development.
Section 7.21 Inspection.
The California Department of Housing and Community Development reserves the right to inspect any site upon which the work is being performed on the Development; and the contractor shall cause to be inserted in any subcontract for performance of the work a provision permitting the California Department of Housing and Community Development or its agents the right to inspect the work site at any reasonable time. [Signatures on following page.]
A-1
485.235/586503
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land described herein is situated in the State of California, County of Placer, City of Roseville, described as follows:
485.235/586503
EXHIBIT B
APPROVED PROJECT BUDGET
485.235/586506
PROHOUSING INCENTIVE PILOT LOAN AGREEMENT
Between
CITY OF ROSEVILLE
and
MERCY HOUSING CALIFORNIA 101, L.P.
1715 PLEASANT GROVE BOULEVARD, ROSEVILLE
1 485.235/586506
PROHOUSING INCENTIVE PILOT LOAN AGREEMENT
(1715 Pleasant Grove Boulevard, Roseville)
This Prohousing Incentive Pilot Loan Agreement (the "Agreement") is entered into as of __________, 2024 (the "Effective Date"), by and between the City of Roseville, a municipal corporation (the "CITY,” and also referred to as “City,” “the City” and “Beneficiary” in the Loan Documents), and Mercy Housing California 101, L.P., a California limited partnership (the “DEVELOPER,” and also referred to as “the Borrower,” “the Developer,” “Owner/Developer” and “Beneficiary” in the Loan Documents), with reference to the following facts:
RECITALS
A. The DEVELOPER intends to construct forty-nine (49) residential rental units including one (1) manager’s unit, along with approximately 4,855 square feet of amenity space (the “Development”), of which forty-eight (48) residential rental units (the "Affordable Units") shall be affordable to low, very low and extremely low income households pursuant to the Regulatory Agreement, on property located at 1715 Pleasant Grove Boulevard in the City of Roseville, Placer County, and as more particularly described in Exhibit A attached hereto (collectively, the "Property"). The Property is owned in fee title by the DEVELOPER.
B. In order to make the units in the Development affordable, the DEVELOPER wishes to borrow from the CITY and the CITY wishes to extend to the DEVELOPER a loan of One Million Five Hundred Fifty Thousand Dollars ($1,550,000) (the "Loan") to be used for construction and permanent financing of the Development. The Loan will be evidenced by a promissory note (the "Note") executed by the DEVELOPER in favor of the CITY and secured by a deed of trust recorded against the Property (the “Deed of Trust”).
C. The source of the Loan funds is the State of California Housing and Community Development Prohousing Incentive Pilot and not the proceeds of tax-exempt bonds.
D. The Loan is being made to the DEVELOPER at an interest rate below the market rate in order to help achieve financial stability for the Development and to increase the supply of affordable rental housing in the CITY. In consideration for the Loan, the DEVELOPER has agreed to provide the Affordable Units for a fifty-five (55) year period.
The CITY and the DEVELOPER will record a regulatory agreement (the "Regulatory Agreement") against the Property to ensure the affordability of the Affordable Units.
Separate regulatory agreements between the DEVELOPER and the entities providing the Approved Financing may also be executed to ensure the affordability of the Affordable Units.
NOW, THEREFORE, the Parties agree as follows:
2 485.235/586506
AGREEMENT
The foregoing recitals are hereby incorporated by reference and made part of this Agreement.
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:
(a) “Affordable Units” is defined in paragraph B of the Recitals. (b) "Agreement" is this Prohousing Incentive Pilot Loan Agreement. (c) “Annual Operating Expenses” is defined in Section 2.8(c) below. (d) "Approved Financing" shall mean all of the following loans and equity (item (i) referred to as the "Approved Construction Financing" and items (ii)-(iii) referred to as the "Approved Permanent Financing") obtained by the DEVELOPER for the Development in addition to the Loan:
(i) Construction Loan made by Capital One, National
Association(Senior Lender)
(ii) Permanent Loan made by Century Housing Corporation, which is a Senior Loan
(iii) City Local Housing Trust Fund Loan
(iv) Limited Partner capital contributions
(v) Deferred Development Fee; and
(vi) General Partner capital contribution of land
(e) "Approved Project Budget" is the pro forma acquisition and construction budget for the Development, including sources and uses of funds, as approved by the CITY, and attached as Exhibit B.
(f) "City" is defined in the first paragraph of this Agreement. (g) “Construction Component” defined in Section 2.1(a) below. 3 485.235/586506
(h) "County" means the County of Placer, a political subdivision of the State of California.
(i) "DEVELOPER" is defined in the first paragraph of this Agreement. (j) "Deed of Trust" is the deed of trust of even date herewith, among the DEVELOPER, as trustor, Placer Title Company, as trustee, and the CITY, as beneficiary, that will encumber the Development to secure repayment of the Loan and performance of all covenants of the Loan Documents.
(k) "Default" is defined in Section 6.1 below.
(l) "Default Rate" is defined in Section 2.2(b).
(m) "Development" is defined in paragraph B of the Recitals. (n) “DIR” is defined in Section 3.3(c) below.
(o) "Effective Date" is defined in the first paragraph of this Agreement. (p) “Gross Revenue” is defined in Section 2.8(c) below. (q) "Hazardous Materials" is defined in Section 3.09(a) below. (r) "Hazardous Materials Claim" is defined in Section 3.09(b) below. (s) "Hazardous Materials Law" is defined in Section 3.09(b) below. (t) “Limited Partner” is Enterprise Community Opportunity Fund LLLP, a Maryland limited liability limited partnership.
(u) "Loan" is defined in paragraph C of the Recitals.
(v) "Loan Documents" are this Agreement, the Note, the Regulatory Agreement, and the Deed of Trust.
(w) Intentionally omitted.
(x) "Note" is the promissory note of even date herewith between the DEVELOPER and the CITY evidencing the DEVELOPER's obligation to repay the Loan. (y) "Parties" are the CITY and the DEVELOPER.
(z) "Property" is defined in paragraph B of the Recitals. (aa) "Regulatory Agreement" is defined in paragraph D of the Recitals. 4 485.235/586506
(bb) “Residual Receipts” are defined in Section 2.7(c) below. (cc) “Senior Lender” is a lender of a Senior Loan.
(dd) "Senior Loan" is defined in Section 2.5 below.
(ee) "Term" is defined in Section 2.7(a) below.
(ff) "Transfer" is defined in Section 3.14(a) below.
(gg) "Unit" means one of the forty-nine (49) rental housing units (including one manager’s Unit) to be constructed on the Property.
5 485.235/586506
Section 1.2 Exhibits.
The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Approved Project Budget
ARTICLE 2.
LOAN PROVISIONS
Section 2.1 Loan and Applications for Additional Financing. (a) The CITY shall loan to the DEVELOPER the Loan in the principal amount of One Million Five Hundred Fifty Thousand Dollars ($1,550,000) for the purposes set forth in Section 2.3 of this Agreement. The obligation to repay the Loan shall be evidenced by the Note.
Section 2.2 Interest.
(a) Interest. Subject to subsection (b) below, simple interest shall accrue on the outstanding principal balance of the Loan at a rate of three percent (3%) per annum.
(b) Default Interest. Upon the occurrence and continuance of a Default, interest on the Loan shall begin to accrue, as of the date of Default and continuing until such time as the Loan is repaid in full or the Default is cured, at the default rate of the lesser of eight percent (8%) per annum, compounded annually (the "Default Rate") and the highest rate permitted by law.
Section 2.3 Use of Loan Funds. The DEVELOPER shall use the Loan funds to fund construction of the Development and subsequent permanent financing of the Development in a manner consistent with the Approved Financing and Approved Project Budget, and as reviewed and approved by the California Department of Housing and Community Development. The DEVELOPER shall not use the Loan for any other purposes without the prior written consent of the CITY.
Section 2.4 Security. The DEVELOPER shall secure its obligation to repay the Loan, as evidenced by the Note, by executing the Deed of Trust, and recording it as a lien against the Property senior in lien priority to all other deeds of trust recorded against the Property except as provided in Section 2.5 below. The DEVELOPER shall also cause or permit the Regulatory Agreement to be recorded against the Property in a position superior to all other deeds of trust recorded against the Property, except as provided in Section 2.5 below.
6 485.235/586506
Section 2.5 Subordination.
The Loan Documents shall be subordinated to the Construction Loan and Permanent Loan (in each case, a “Senior Loan”) and to the loan documents evidencing and securing the Senior Loan. The CITY may subordinate to any other loans or affordability covenants as approved by the CITY in its reasonable discretion. The Loan Documents will be of co-equal priority with the loan documents related to the City of Roseville LHTF loan.
Section 2.6 Conditions Precedent to Disbursement of Loan Funds. (a) Maximum Disbursement. The maximum amount of funds to be disbursed pursuant to this Section 2.6 shall not exceed the amount of the Loan. (b) Conditions Precedent to Disbursement of the Loan. The CITY shall not be obligated to make any disbursements of the Loan or take any other action under the Loan Documents unless all of the following conditions precedent are satisfied prior to each such disbursement of Loan funds:
(i) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement; (ii) The DEVELOPER has delivered to the CITY a copy of a corporate resolution authorizing the DEVELOPER's execution of the Loan Documents; (iii) Intentionally deleted
(iv) The DEVELOPER has delivered to the CITY a certificate of good standing dated within thirty (30) calendar days of the Effective Date; (v) The DEVELOPER has furnished the CITY with evidence of the insurance coverage meeting the requirements of Section 3.15 below; (vi) The DEVELOPER has caused to be executed and delivered to the CITY all Loan Documents and any other instruments and policies required under the Loan Documents;
(vii) The Deed of Trust and the Regulatory Agreement will be recorded against the Property in the County’s Office of the Recorder concurrently with the close of escrow;
(viii) A title insurer reasonably acceptable to the CITY is unconditionally and irrevocably committed to issuing an ALTA Lender's Policy of title insurance insuring the priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and exclusions listed on Schedule B to such Lender’s Policy or as may be reasonably acceptable to the CITY (collectively, the “Permitted Encumbrances”, and containing such endorsements as the CITY may reasonably require. The DEVELOPER shall provide whatever documentation (including an indemnification 7 485.235/586506
agreement), deposits or surety is reasonably required by the title company in order for the CITY's Deed of Trust to be senior in lien priority to any other liens, except approved Senior Loans and other liens approved in writing by CITY; (ix) The DEVELOPER is in possession of all City zoning and land use approvals required to construct the Development and has provided the CITY with evidence of such approvals;
(x) Intentionally deleted.
(xi) The DEVELOPER has provided to CITY and CITY has
approved the Approved Project Budget as set forth in Section 1.1(e) above. (c) Intentionally deleted.
(d) Intentionally deleted.
Section 2.7 Repayment Schedule.
The Loan shall be repaid as follows:
(a) The Loan and this Agreement shall have a term that commences on the Effective Date and expires on the earlier of: (i) fifty-five (55) years from the date of issuance of the certificate of occupancy or equivalent certification provided by the CITY; or (ii) December 31, 2081 (the “Term”).
(b) No later than April 30th of each calendar year commencing the calendar year after the year the Approved Permanent Financing has closed, the DEVELOPER shall make repayments of the Loan for that prior calendar year based on fifty percent (50%) of the available amount of Residual Receipts (as defined below in subsection (c)(iii)). These payments shall be credited first against accrued interest and then against outstanding principal of the Loan, and shall be accompanied by the DEVELOPER's report of Residual Receipts (including an independent auditor's report regarding the auditor's review of Gross Revenue and Annual Operating Expenses). The DEVELOPER shall provide the CITY with any documentation reasonably requested by the CITY to substantiate the DEVELOPER's determination of Residual Receipts. If the repayments are not received by the CITY within fifteen (15) calendar days after the installment is due, DEVELOPER shall pay to the CITY a late charge of five percent (5%) of such installment. Such late charge shall be immediately due and payable without demand by the CITY.
(c) The following definitions shall apply for purposes of Section 2.8(b):
(i) "Annual Operating Expenses", with respect to a particular calendar year during the Term, means the following costs reasonably and actually incurred for operation and maintenance of the Development to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property taxes and assessments 8 485.235/586506
imposed on the Development; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Development) on loans that are part of the Approved Financing; property management fees and reimbursements, excluding incentive management fees, not to exceed fees and reimbursements which are standard in the industry, and pursuant to a management contract approved by the CITY; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of occupancy fees required for operation of the Development; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Development in the amount required by Senior Lenders or DEVELOPER’s investor limited partner; cash deposited into an operating reserve for the Development in an amount required by Senior Lenders or DEVELOPER’s investor limited partner; extraordinary operating costs specifically approved by the CITY; payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves; general partner asset management fees not-to-exceed Thirty Five Thousand Dollars ($35,000) in the first year and subject to annual increases at three percent (3%); limited partner asset management fees not-to-exceed Eight Thousand Five Hundred Dollars ($8,500) in the first year and subject to annual increases at three percent (3%); the cost of social services; any tax credit adjuster payments; payment of investor limited partner tax liability; repayment of any completion or operating loans made to the Developer; deferred developer fees; and other ordinary and reasonable operating expenses approved by the CITY and not listed above. Annual Operating Expenses shall not include the following: depreciation, amortization, depletion or other non-cash expenses or any amount expended from a reserve account.
(ii) "Gross Revenue," with respect to a particular calendar year during the Term, means all revenue, income, receipts, and other consideration actually received by DEVELOPER from operation and leasing of the Development. "Gross Revenue" shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements resulting in actual income; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; subject to the rights of Senior Lenders, the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Development (or applied toward the cost of recovering such proceeds) and not payable to the Senior Lenders; and condemnation awards for a taking of part or all of the Development for a temporary period. "Gross Revenue" shall also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion of the Development. "Gross Revenue" shall not include any rental income received from the Development’s commercial space, tenants' security deposits, loan proceeds, capital contributions or similar advances.
9 485.235/586506
(iii) "Residual Receipts", with respect to a particular calendar year during the Term, means the amount by which Gross Revenue (as defined above) exceeds Annual Operating Expenses (as defined above).
(d) In connection with the annual payments required by Section 2.8(b), within one hundred twenty (120) calendar days of the end of the calendar year, the DEVELOPER shall furnish to the CITY an audited statement duly certified by an independent firm of certified public accountants, setting forth in reasonable detail the computation and amount of Residual Receipts during the preceding calendar year. (e) The DEVELOPER shall keep and maintain on the Property, or at its principal place of business, or elsewhere with the CITY's written consent, full, complete and appropriate books, records and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the DEVELOPER's calculation of Residual Receipts. Books, records and accounts relating to the DEVELOPER's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement which provide for the calculation of Residual Receipts on a cash basis. All such books, records, and accounts shall be open to and available for inspection by the CITY, its auditors or other CITY authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that the DEVELOPER may be required to furnish any governmental agency shall at all reasonable times be open for inspection by the CITY at the place that the books, records and accounts of the DEVELOPER are kept. The DEVELOPER shall preserve records on which any statement of Residual Receipts is based for a period of not less than five (5) years after such statement is rendered.
(f) All principal and accrued interest on the Loan shall be due in full on the earlier to occur of (i) the date of any Default, or (ii) the expiration of the Term. (g) The CITY and the DEVELOPER shall have the right, but not the obligation, to extend the period for repayment of the Loan if desirable to serve the purposes of this Agreement.
(h) The DEVELOPER shall have the right to prepay the Loan at any time without penalty. However, the Regulatory Agreement shall remain in effect for the entire Term.
Section 2.8 Non-Recourse.
Except as provided below, the DEVELOPER and its partners shall not have any direct or indirect personal liability for payment of the principal of, and interest on, the Loan or the performance of the covenants of the DEVELOPER under the Deed of Trust.
Following recordation of the Deed of Trust, the sole recourse of the CITY with respect to the principal of, and interest on, the Note and defaults by the DEVELOPER in the performance of its covenants under the Deed of Trust shall be to the property described 10 485.235/586506
in the Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the CITY thereunder, or (b) 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. 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 and the performance of the DEVELOPER's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve the DEVELOPER of its obligation to indemnify the CITY under Section 7.5 of this Agreement, for liability for (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the 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 DEVELOPER other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds 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 Property.
ARTICLE 3.
LOAN REQUIREMENTS
Section 3.1 Construction Reporting.
During construction of the Development, DEVELOPER shall provide to the CITY, on a monthly basis, copies of construction inspection reports and draw reports provided to construction lenders, at the same time as those reports are provided to construction lenders and regardless of whether the CITY is at the time being requested to make construction disbursements.
Section 3.2 Completion of Construction.
DEVELOPER shall diligently prosecute construction of the Development to completion, and shall cause the completion of the Development no later than required by the California Tax Credit Allocation Committee placed-in-service deadline associated with the Approved Financing, or such later date as the CITY may approve.
Section 3.3 Construction Pursuant to Plans and Laws; Prevailing Wages. (a) DEVELOPER shall construct the Development in conformance with the Approved Financing and Approved Project Budget and consistent with the plans and specifications utilized to obtain City permits. DEVELOPER shall notify the CITY in a timely manner of any changes in the work required to be performed under this Agreement, 11 485.235/586506
including any additions, changes, or deletions to the plans and specifications approved by the City.
(b) DEVELOPER shall cause all construction work to be performed in compliance with (i) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, including without limitation and to the extent applicable, state prevailing wages pursuant to Labor Code Section 1770 et seq., and the regulations pursuant thereto, as further set forth in subsection (c) below; and (ii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and DEVELOPER shall be responsible to the CITY for the procurement and maintenance thereof, as may be required of DEVELOPER and all entities engaged in work on the construction.
(c) This Agreement has been prepared with the intention that CITY assistance under this Agreement meets the exception set forth in Labor Code Section 1720(c)(5)(E) to the general requirement that state prevailing wages be paid in connection with construction work that is paid for in whole or in part out of public funds; provided, however, that nothing in this Agreement constitutes a representation or warranty by any party regarding the applicability of the provisions of Labor Code Section 1720 et seq., and the hiring of apprentices pursuant to Labor Code Sections 1777.5 et seq., to the Approved Financing. If applicable to the Approved Financing or Approved Project Budget, the DEVELOPER shall pay and shall cause the contractor and subcontractors to pay prevailing wages in connection with the construction of the Development, as those wages are determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices as required by Labor Code Sections 1777.5 et seq., and the implementing regulations of the Department of Industrial Relations ("DIR"). The DEVELOPER 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 the DEVELOPER, its contractor and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations of the DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the any other work undertaken or in connection with the Property. The requirements in this Subsection shall survive the repayment of the Loan, and the reconveyance of the Deed of Trust.
Section 3.4 Mechanics Liens, Stop Payment Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Property or a stop payment notice affecting the Loan is served on the CITY or any other lender or other third party in connection with the Development, then DEVELOPER shall, within thirty (30) calendar days after such filing or service, either pay and fully discharge the lien or stop payment notice, effect the release of such lien or stop payment notice by delivering to the CITY a 12 485.235/586506
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 payment notice will be paid or discharged.
(b) If DEVELOPER fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the CITY may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at DEVELOPER'S expense. Alternately, the CITY may require DEVELOPER to immediately deposit with the CITY the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The CITY may use such deposit to satisfy any claim or lien that is adversely determined against DEVELOPER. (c) DEVELOPER shall file a valid notice of cessation or notice of completion upon cessation of construction on the Development and take all other reasonable steps to forestall the assertion of claims of lien against the Property.
DEVELOPER 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 Property.
Section 3.5 Inspections.
DEVELOPER shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection of the construction by the CITY and by public authorities during reasonable business hours for the purposes of determining compliance with this Agreement.
Section 3.6 Equal Opportunity.
During construction of the Development there shall be no discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged in the construction work.
Section 3.7 Information and Annual Reporting.
(a) The DEVELOPER shall provide any information reasonably requested by the CITY in connection with the Development in connection with the DEVELOPER's use of the Loan funds. In particular, the DEVELOPER shall provide the CITY with annual reports required by the Regulatory Agreement, including but not limited to reports regarding the Development's rent and occupancy levels, as well as the annual operating budget. Without limitation, the DEVELOPER shall provide the CITY no later than the ninetieth (90th) day after the close of each calendar year following the Effective Date, hardcopies and PDF copies of the following documents:
(i) insurance certificates detailing all coverage required under Section 3.15 below;
13 485.235/586506
(ii) evidence of payment of property taxes or property tax exemption for the Development, as applicable;
(iii) audited financial statements for the Development and DEVELOPER; and
(iv) an occupancy report including: (i) the verified income of each tenant or household, (ii) the number and demographic information of tenants in each household; (iii) the current rents charged each tenant or household and whether these rents include utilities, and (iv) the date tenancy commenced for each Affordable Unit; (b) Substitution of Monitoring and Compliance Reports Prepared for Other Financing Programs. If similar reports on some or all of the Affordable Units are required for regulatory compliance with other financing programs, those reports may be deemed satisfactory for the purpose of this Section by the CITY, with respect to the portion of the requirements of this Section covered by such reports, provided that copies are provided on an annual basis to the CITY with an owner certification addressed to the CITY certifying that the DEVELOPER is not in default under this Agreement.
Section 3.8 Records. The DEVELOPER shall keep and maintain at the Development, or elsewhere with the CITY's written consent, full, complete and appropriate books, record and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the DEVELOPER's compliance with the terms and provisions of this Agreement. All such books, records, and accounts shall be open to and available for audit, inspection and copying by the CITY, their auditors or other authorized representatives at reasonable intervals during normal business hours. The DEVELOPER shall preserve such records for a period of not less than five (5) years after the creation of such records. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan funds. Records must be kept accurate and current.
Section 3.9 Hazardous Materials.
(a) The DEVELOPER 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. The DEVELOPER 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 construction of projects like the Development or kept and used in and about residential property of this type. 14 485.235/586506
(b) The DEVELOPER 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 the DEVELOPER 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 the DEVELOPER 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) the DEVELOPER'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 the California Health and Safety Code) 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) The CITY shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by the DEVELOPER. The DEVELOPER shall defend, indemnify and hold harmless the CITY and its councilmembers, 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: (a) all foreseeable consequential damages; (b) 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 (c) all reasonable costs and expenses incurred by the CITY in connection with clauses (a) and (b), 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 defend and indemnify shall survive termination of this Agreement.
Notwithstanding the foregoing, the DEVELOPER shall have no indemnification obligations under this Section 3.9(c) with respect to issues and events first arising after the foreclosure of the Property by the CITY.
(d) Without the CITY's prior written consent, which shall not be unreasonably withheld, the DEVELOPER shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any 15 485.235/586506
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 the DEVELOPER shall notify the CITY as soon as practicable of any action so taken. The CITY agrees not to withhold its consent, where such consent is required hereunder, if (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) the DEVELOPER will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) the DEVELOPER establishes to the reasonable satisfaction of the CITY that there is no reasonable alternative to such remedial action which would result in less impairment of the CITY's security hereunder; or (iv) the action has been agreed to by the CITY.
(e) The DEVELOPER hereby acknowledges and agrees that (i) this Section is intended as the CITY's written request for information (and the DEVELOPER'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.
(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 CITY's or the trustee's rights and remedies under the Deed of Trust, the CITY may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion of the Property and (2) exercise (i) the rights and remedies of an unsecured creditor, including reduction of its claim against the DEVELOPER to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining the CITY's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the DEVELOPER shall be deemed to have willfully permitted or acquiesced in a release or threatened release of Hazardous Materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the DEVELOPER 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) reasonable 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 16 485.235/586506
maximum rate permitted by law, until paid, shall be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the CITY upon its demand made at any time following the conclusion of such action.
Section 3.10 Maintenance and Damage.
(a) During the course of both construction and operation of the Development, the DEVELOPER shall maintain the Development and the Property in good repair, reasonable wear and tear excepted, and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if the DEVELOPER has not cured such condition within thirty (30) calendar days after receiving a CITY notice of such a condition, or within ninety (90) calendar days after receiving a CITY notice of such a condition in the case of a condition that cannot be reasonably remedies in thirty (30) calendar days, then in addition to any other rights available to the CITY, the CITY shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property. (b) Subject to the requirements of Senior Lenders, and if economically feasible in the CITY's reasonable judgment after consultation with the DEVELOPER, if any improvement now or in the future on the Property is damaged or destroyed, then the DEVELOPER shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications for the Development. Such work or repair shall be commenced no later than the later of one hundred twenty (120) calendar days, or such longer period approved by the CITY in writing, after the damage or loss occurs or thirty (30) calendar days following receipt of the insurance proceeds, and shall be complete within one year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then the DEVELOPER shall make up the deficiency. If the DEVELOPER does not make repairs, then any insurance proceeds collected for such damage or destruction shall be promptly delivered to the CITY as a special repayment of the Loan, subject to the rights of the Senior Lenders, if any.
Section 3.11 Fees and Taxes. The DEVELOPER shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Development to the extent owned by the DEVELOPER, and shall pay such charges prior to delinquency. However, the DEVELOPER shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the CITY, the DEVELOPER deposits with the CITY any funds or other forms of assurance that the CITY in good faith from time to time determines appropriate to protect the CITY from the consequences of the contest being unsuccessful.
Section 3.12 Notice of Litigation.
17 485.235/586506
The DEVELOPER shall promptly notify the CITY in writing of any litigation which has the potential to materially affect the DEVELOPER or the Property or the Development and of any claims or disputes that involve a material risk of such litigation.
Section 3.13 Nondiscrimination.
(a) DEVELOPER herein covenants by and for itself, its subcontractors, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, nor denial of the benefits of this Agreement to, any person or group of persons, on the basis of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, gender or selfidentified gender, sexual orientation, marital status, age, mental disability, physical disability or medical condition (including cancer, HIV and AIDS) or political affiliation or belief, nor any unlawful discrimination against any employee or applicant for employment because of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, gender or self-identified gender, sexual orientation, marital status, age (over 40), mental disability, physical disability or medical condition (including cancer, HIV and AIDS), use of family care leave, or political affiliation or belief. DEVELOPER shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination or harassment. In addition to the foregoing general obligations, DEVELOPER shall comply with the provisions of the Fair Employment and Housing Act (Government Code section 12900, et seq.), the regulations promulgated thereunder (Title 2, California Code of Regulations, section 7285.0, et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (sections 11135-11139.5) and any state or local regulations adopted to implement any of the foregoing, as such statutes and regulations may be amended from time to time. To the extent this Agreement subcontracts to DEVELOPER services or works required of CITY by the State of California pursuant to agreement between CITY and the State, the applicable regulations of the Fair Employment and Housing Commission implementing Government Code section 12990 (a) through (f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are expressly incorporated into this Agreement by reference and made a part hereof as if set forth in full, and DEVELOPER and any of its subcontractors shall give written notice of their obligations thereunder to labor organizations with which they have collective bargaining or other agreements. (b) The provisions of paragraph (a) shall further apply to the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Development, and DEVELOPER and any person claiming under or through the DEVELOPER, shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the Development.
(c) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 18 485.235/586506
51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (a).
(d) The DEVELOPER shall include the provisions contained in this Section in all contracts and subcontracts related to the Development. (e) The requirements in this Section shall survive the repayment of the Loan, and the reconveyance of the Deed of Trust.
Section 3.14 Transfer.
(a) For purposes of this Agreement, "Transfer" is any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any of DEVELOPER’S rights and/or duties under this Agreement, and/or (ii) any ownership 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 the DEVELOPER retains title. "Transfer" shall exclude the leasing of any single unit in the Development to an occupant, the granting of security interest in connection with the Approved Financing, and the transfer of an easement interest in the Property for utility purposes. The limitations on DEVELOPER’s right of Transfer contained in this Section 3.14 also shall not apply to:
(i) any foreclosure, deed in lieu of foreclosure, or other remedial action lawfully taken by any Senior Lender holding a security interest in the Property with priority over the CITY’s interests;
(ii) the transfer of limited partner interests in DEVELOPER, (iii) the removal or buy-out of a general partner or a limited partner pursuant to the terms and conditions of DEVELOPER’s organizational document or any purchase option agreement or put option agreement contemplated thereby;
(iv) transfers to a tax-exempt entity under the direct control of or under common control with DEVELOPER or a general partner of DEVELOPER (provided that the City shall not unreasonably withhold its consent to a transfer of general partner interest to a tax-exempt entity that is not under the direct control with DEVELOPER or a general partner of DEVELOPER if such transfer will maintain the property tax exemption for the Property); (v) any mortgage, deed of trust, or other form of conveyance for restructuring or refinancing of any amount of senior indebtedness for the Project, provided that the amount of indebtedness incurred in the restructuring or refinancing is not in excess of the original principal amount of such senior indebtedness, unless the additional indebtedness is used to pay the entire unpaid principal balance of the California Department of Housing and Community Development (HCD) Loan.
19 485.235/586506
(vi) the granting of easements to any appropriate governmental agency or utility or permits to facilitate the development of the Project; (vii) the transfer (A) of an interest in and/or of an existing partner to another existing partner, or (B) of an interest in an existing general partner to an affiliate of any general partner;
(viii) transfers of an interest to a new partner which is an affiliate of an existing partner, including transfers of an additional general partner interest to an affiliate of a limited partner; or
(ix) transfer of the Project or partnership interests in DEVELOPER to a general partner of DEVELOPER at the end of the fifteen year Tax Credit initial compliance period;
(x) any mortgage, deed of trust, or other form of conveyance for any subordinate Approved Financing (i.e. subordinate to the Deed of Trust), or refinancing thereof, Permitted Encumbrances, or the recording of a regulatory agreement in connection with the tax credit requirements applicable to the Development
The City Manager or his/her designee is authorized to execute assignment and assumption agreements on behalf of the CITY to implement any approved Transfer. (b) CITY is entering into this Agreement based on the experience, skill, and ability to perform of DEVELOPER. The DEVELOPER recognizes that its qualifications and identity are of particular concern to the CITY, in view of: (i) the importance of affordable housing to the general welfare of the community; (ii) the reliance by the CITY upon the unique qualifications and ability of the DEVELOPER to ensure the quality of the affordability, use, operation, and maintenance of the Development; (iii) the requirement that the Development be used for affordable housing; and (iv) DEVELOPER's representation that the Development is not to be acquired or used for speculation, but only for operation by the DEVELOPER in accordance with the Regulatory Agreement.
(c) No Transfer not specifically authorized in this Section 3.14 shall be permitted without the prior written consent of the CITY, which the CITY may withhold in its reasonable discretion. The Loan shall automatically accelerate and be due in full upon any Transfer made without the prior written consent of the CITY. (d) Intentionally deleted.
Section 3.15 Insurance Requirements.
(a) The DEVELOPER shall maintain the following insurance coverage throughout the Term of the Loan:
20 485.235/586506
(i) Workers’ Compensation insurance to the extent required by law, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,000,000) each accident.
(ii) Comprehensive General Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations (occurrence form CG-0001).
(iii) Comprehensive Automobile Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable.
(iv) Property insurance covering the Development, 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.
The DEVELOPER shall cause any general contractor, agent, or subcontractor working on the Development under direct contract with the DEVELOPER or subcontract to maintain insurance of the types and in at least the minimum amounts described in subsections (a)(i), (a)(ii), and (a)(iii) 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 (b), (c), and (d) below, including, without limitation, the requirement of subsection (c). Liability and Comprehensive Automobile Liability insurance to be maintained by such contractors and agents pursuant to this subsection shall name as additional insureds the CITY, its officers, officials, agents, employees and volunteers.
(b) The required insurance shall be provided under an occurrence form, and the DEVELOPER shall maintain the coverage described in subsection (a) 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 shall be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above.
Insurance is to be placed with insurers with a current A.M. Best’s rating of not less than A:VII.
(c) Certificates. All insurance coverages referenced in subparagraph (a) above, shall be evidenced by one or more certificates of coverage or, with the consent of the CITY, demonstrated by other evidence of coverage acceptable to the CITY, which shall be filed by DEVELOPER and approved by the CITY prior to disbursement of the Loan. Such certificates shall be kept current during the term of this Agreement; shall 21 485.235/586506
provide that CITY shall be given no less than thirty (30) calendar days prior written notice of any non-renewal, cancellation, other termination, or material change, except that only ten (10) calendar days prior written notice shall be required where the cause of nonrenewal or cancellation is non-payment of premium; and shall provide that the inclusion of more than one insured shall not operate to impair the rights of one insured against another insured, the coverage afforded applying as though separate policies had been issued to each insured, but the inclusion of more than one insured shall not operate to increase the limits of the company's liability. For the commercial general liability insurance coverage referenced in subparagraph (a)(ii) of this Section, and, where the vehicles are covered by a commercial policy rather than a personal policy, for the comprehensive automobile liability insurance coverage referenced in subparagraph (a)(iii) of this Section, DEVELOPER shall also file with the CITY evidence of coverage an endorsement from the insurance provider naming CITY, its officers, employees, agents and volunteers as additional insureds and waiving subrogation, and the certificate or other evidence of coverage shall provide that if the same policy applies to activities of DEVELOPER not covered by this Agreement then the limits in the applicable certificate relating to the additional insured coverage of CITY shall pertain only to liability for activities of DEVELOPER under this Agreement, and that the insurance provided is primary coverage to CITY with respect to any insurance or self-insurance programs maintained by CITY. The additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94. Upon request by the CITY, DEVELOPER shall provide or arrange for the insurer to provide within thirty (30) calendar days of the request, certified copies of the actual insurance policies or relevant portions thereof.
(d) Deductibles/Retentions. Any deductibles or self-insured retentions shall be declared to, and be subject to approval by, the CITY, which approval shall not be denied unless the CITY determines that the deductibles or self-insured retentions are unreasonably large in relation to the Loan and the Development and the risks of liability associated with the activities required of DEVELOPER by this Agreement. At the option of and upon request by the CITY if the City determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects CITY, its officers, employees, agents and volunteers or DEVELOPER shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses.
ARTICLE 4.
AFFORDABLE HOUSING REQUIREMENTS
Section 4.1 Affordability Restrictions.
In consideration for the Loan to be provided to the DEVELOPER on below-market terms, the DEVELOPER hereby agrees that forty-eight (48) Units shall be affordable to low, very low and extremely low income tenants for fifty-five (55) years as further specified 22 485.235/586506
in the Regulatory Agreement between the DEVELOPER and CITY and other regulatory agreements between the DEVELOPER and providers of the Approved Financing. The DEVELOPER shall record against the Property, prior to the disbursement of any Loan funds, the Regulatory Agreement.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER
Section 5.1 Representations and Warranties.
The DEVELOPER hereby represents and warrants to the CITY as follows:
(a) Organization. The DEVELOPER is a duly organized 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.
(b) Authority of the DEVELOPER. The DEVELOPER has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of the DEVELOPER, and all actions required under the DEVELOPER's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Loan Documents 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 the DEVELOPER enforceable against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree 23 485.235/586506
or order of any court, board, commission or agency whatsoever binding on the DEVELOPER, or any provision of the organizational documents of the DEVELOPER, or will conflict with or constitute a breach of or a default under any agreement to which the DEVELOPER is a party, or will result in the creation or imposition of any lien upon any assets or property of the DEVELOPER, other than liens established pursuant hereto. (f) Compliance With Laws; Consents and Approvals. The construction and operation of the Development will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of officers of any government or agency. (g) Pending Proceedings. The DEVELOPER is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of the DEVELOPER, threatened against or affecting the DEVELOPER or the Development, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to the DEVELOPER, materially affect the DEVELOPER's ability to repay the Loan or impair the security to be given to the CITY pursuant hereto.
(h) Title to Land. At the time of recordation of the Deed of Trust, the DEVELOPER will have acquired the Property in fee, and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than liens for current real property taxes and liens in favor of the CITY or for the Approved Financing, except for Permitted Encumbrances and liens approved in writing by the CITY.
(i) Financial Statements. The financial statements of the DEVELOPER and other financial data and information furnished by the DEVELOPER to the CITY fairly 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 the DEVELOPER from that shown by such financial statements and other data and information.
(j) Taxes. The DEVELOPER has filed all federal and other material tax returns and reports required to be filed, and has paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon the DEVELOPER or the DEVELOPER's income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against the DEVELOPER that could, if made, be reasonably expected to have a material adverse effect upon the Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the DEVELOPER, taken as a whole, which would be expected to result in a material impairment of the ability of the DEVELOPER 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 the DEVELOPER of any Loan Document. 24 485.235/586506
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default.
Each of the following shall constitute a "Default" by the DEVELOPER under this Agreement:
(a) Failure to Make Payment. Failure to repay the principal and any interest on the Loan within ten (10) calendar days after receipt of written notice from the CITY that such payment is due pursuant to the Loan Documents. (b) Breach of Covenants. Failure by the DEVELOPER to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such failure having continued uncured for thirty (30) calendar days after receipt of written notice thereof from the CITY to the DEVELOPER or, if the breach cannot be cured within thirty (30) calendar days, the DEVELOPER shall not be in breach so long as the DEVELOPER is diligently undertaking to cure such breach; provided, however, that if a different period or notice requirement is specified under any other Section of this Article 6, the specific provisions shall control.
(c) Intentionally Omitted.
(d) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging the DEVELOPER to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of the DEVELOPER or seeking any arrangement for the DEVELOPER under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of the DEVELOPER in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or liquidation of the DEVELOPER, 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 the DEVELOPER shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note. (e) Assignment; Attachment. The DEVELOPER shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note.
25 485.235/586506
(f) Suspension; Termination. The DEVELOPER shall have voluntarily suspended its business or, shall have been dissolved or terminated. (g) Liens on Property and the Development. There shall be filed any claim of lien (other than Permitted Encumbrances or liens in connection with the Approved Financing, and liens approved in writing by the CITY) against the Development 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) calendar days, without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the CITY.
(h) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Development other than by the CITY. (i) Unauthorized Transfer. Any Transfer other than as permitted by Section 3.14.
(j) Representation or Warranty Incorrect. Any DEVELOPER representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the CITY in connection with any of the Loan Documents, proving to have been incorrect in any material respect when made or when later due to be performed.
Section 6.2 Remedies.
Notwithstanding anything to the contrary in any of the Loan Documents, any partners of the DEVELOPER shall have the right but not the obligation to cure any Default, The Limited Partner of DEVELOPER shall be given a duplicate notice of any Default at the address set forth in Section 7.9 of this Agreement. The CITY agrees that any cure of a Default by any partners of the DEVELOPER shall be deemed to be a cure by the DEVELOPER, and shall be accepted or rejected on the same basis as if made or tendered by the DEVELOPER. 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 and the Loan Documents, including but not limited to the following:
(a) Acceleration of Note. The CITY shall have the right to cause all indebtedness of the DEVELOPER to the CITY under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. The DEVELOPER waives all right to presentment, demand, protest or notice of protest or dishonor. The CITY may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the CITY as a creditor and secured party under the law, including the Uniform Commercial Code, and including foreclosure under the Deed of Trust.
26 485.235/586506
(b) Specific Performance. The CITY shall have the right to mandamus or other suit, action or proceeding at law or in equity to require the DEVELOPER to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents. (c) Right to Cure at the DEVELOPER's Expense. The CITY shall have the right (but not the obligation) to cure any monetary default by the DEVELOPER under a loan other than the Loan. The DEVELOPER agrees to reimburse the CITY for any funds advanced by the CITY to cure a monetary default by the DEVELOPER upon demand therefor, together with interest thereon at the lesser of the maximum rate permitted by law and the Default Rate from the date of expenditure until the date of reimbursement.
Section 6.3 Right of Contest.
The DEVELOPER shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the CITY or the rights of the CITY hereunder.
Section 6.4 Remedies Cumulative.
No right, power, or remedy given to the CITY by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the CITY by the terms of any such instrument, or by any statute or otherwise against the DEVELOPER and any other person. Neither the failure nor any delay on the part of the CITY to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the CITY of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.
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 the DEVELOPER or its agents, employees or contractors, and the DEVELOPER shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. The DEVELOPER has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the acquisition, construction, and operation of the Development, the DEVELOPER shall be 27 485.235/586506
solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. The DEVELOPER 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 the DEVELOPER may have employed or with whom the DEVELOPER may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the purchase of the Property, the construction or operation of the Development, and the DEVELOPER shall include similar requirements in any contracts entered into for the construction or operation of the Development.
Section 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 the Loan Documents or amended and restated Loan Documents so long as the City Council first approves any material change in the amount or terms of this Agreement or in the amounts or terms of financing provided by other parties for the Development, requiring conforming amendments to the Loan Documents. In the event of amendments to the Loan Documents, CITY shall submit copies of all trust fund loan guidelines and underwriting standards and procedures for review and approval by the California Department of Housing and Community Development.
Section 7.4 Loan Documents.
In the event of any conflict among the Loan Documents, the most restrictive requirements shall apply.
Section 7.5 Indemnification.
(a) To the full extent permitted by law, the DEVELOPER shall indemnify, defend at its own expense, and hold the CITY and its elected officials, officers, employees and agents in their official capacity (collectively "Indemnitees") 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 Development, except to the extent such claim arises from the grossly negligent or willful misconduct of the CITY or Indemnitees. Each Party shall notify the other Party immediately in writing of any claim or damage related to activities performed under this Agreement. The Parties shall cooperate with each other in the investigation and disposition of any claim arising out of the activities under this Agreement, providing that nothing shall require either party to 28 485.235/586506
disclose any documents, records or communications that are protected under the attorney-client privilege or attorney work product privilege. (b) The provisions of this Section shall survive the expiration of the Term, the reconveyance of the Deed of Trust, and any release of part or all of the Property from the burdens of this Agreement. The defense and indemnity obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Agreement.
Section 7.6 Non-Liability of CITY Officials, Employees and Agents.
No official, employee or agent of the CITY shall be personally liable to the DEVELOPER in the event of any default or breach by the CITY or for any amount which may become due to the DEVELOPER or its successor or on any obligation under the terms of this Agreement.
Section 7.7 No Third Party Beneficiaries.
There shall be no third party beneficiaries to this Agreement.
Section 7.8 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in subsection (b) below who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person's tenure. The DEVELOPER shall exercise due diligence to ensure that the prohibition in this Section is followed.
(b) The conflict of interest provisions of subsection (a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the CITY, or any person related within the third (3rd) degree of such person.
(c) In accordance with 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 DEVELOPER, or immediate family member of any of the preceding, shall make or participate in a decision, made by the CITY or a CITY council, board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or the DEVELOPER. Interpretation of this Section shall be governed by the definitions and provisions used in the Political Reform Act, 29 485.235/586506
Government Code Section 87100 et seq., its implementing regulations manual and codes, and Government Code Section 1090.
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:
DEVELOPER: Mercy Housing California 101, L.P.
c/o Mercy Housing California
1256 Market Street
San Francisco, CA 94102
Attn: Richard C. Ciraulo
with a copy to:
with a copy to:
Enterprise Community Opportunity Fund LLLP
c/o Enterprise Community Asset Management, Inc.
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
Attn: Asset Management
CITY: City of Roseville
311 Vernon Street
Roseville, California 95678
Attn: City 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). Any notice sent to DEVELOPER will also be sent to DEVELOPER'S limited partner.
Section 7.10 Applicable Law and Venue.
This Agreement shall be governed by and construed in accordance with California law. Venue shall be Placer County.
30 485.235/586506
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 the DEVELOPER and its successors and assigns in the Property and the Development for the entire Term, and the benefit hereof shall inure to the benefit of the CITY and its successors and assigns. 31 485.235/586506
Section 7.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other Party.
Section 7.13 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, terrorism, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, or court order. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) calendar days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (10) calendar 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) calendar days.
Section 7.15 CITY Approval.
The CITY has authorized the City Manager to execute the Loan Documents 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 the DEVELOPER defaults under the Loan Documents. 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.
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 the DEVELOPER or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to the DEVELOPER to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the CITY to any act or omission by the DEVELOPER shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the CITY's written consent to future waivers.
32 485.235/586506
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.
Section 7.18 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the Parties with respect to the Loan. If there is any conflict between this Agreement and any other Loan Documents, the most restrictive provisions shall control.
Section 7.19 Multiple Originals; Counterparts.
This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
Section 7.20 Signage.
As required by the California Department of Housing and Community Development as a condition of the Prohousing Incentive Pilot program, during the construction period, if DEVELOPER elects to place a sign or signs identifying the Development that is visible to the public, Borrower shall include the following language on the sign, “Funding provided by the Prohousing Incentive Pilot program and the California Department of Housing and Community Development.” If the Borrower does not elect to place a sign on the Property identifying the Development, the California Department of Housing and Community Development may place one or more signs on the Property stating that it is providing financing for the Development.
Section 7.21 Inspection.
The California Department of Housing and Community Development reserves the right to inspect any site upon which the work is being performed on the Development; and the contractor shall cause to be inserted in any subcontract for performance of the work a provision permitting the California Department of Housing and Community Development or its agents the right to inspect the work site at any reasonable time. [Signatures on following page.]
33 485.235/586506
IN WITNESS WHEREOF, the City of Roseville, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attested to by its City Clerk under the authority of Resolution No. ______, adopted by the Council of the City of Roseville on the ___ day of ____________, 20__, and DEVELOPER has caused this Agreement to be executed.
City of Roseville, a
municipal corporation:
BY: _______________________
DOMINICK CASEY
City Manager
ATTEST:
BY: _______________________
CARMEN AVALOS
City Clerk
APPROVED AS TO FORM:
BY: _______________________
MICHELLE SHEIDENBERGER
City Attorney
APPROVED AS TO SUBSTANCE:
BY: _______________________
MELISSA ANGUIANO
Economic Development Director
34 485.235/586506
DEVELOPER:
Mercy Housing California 101, L.P.,
a California limited partnership
By: Mercy Housing California 101 LLC,
a California limited liability company,
its managing general partner
By: Mercy Housing Calwest,
a California nonprofit public benefit
corporation,
its sole member/manager
By:
Its:_________________________
A-1
485.235/586506
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land described herein is situated in the State of California, County of Placer, City of Roseville, described as follows:
EXHIBIT “A-1”
LEGAL DESCRIPTION