City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00424 May 10, 2022 Consent Item 01
Title: (Housing Authority) Approval to Execute Final Loan Documents for Mirasol Village Block C
Location: 1200 Richards Blvd, District 4
Recommendation: Adopt a Housing Authority Resolution authorizing: 1) the Executive Director, or her designee, to enter into, execute and amend from time to time the Housing Authority Funds (HAF) Loan Agreement with Twin Rivers Phase 3, L.P McCormack Baron Salazar (Developer); 2) the Executive Director, or her designee, to execute any and all documents deemed necessary by herself or her designee and related to the transaction; and 3) making related findings.
Contact: Christine Weichert, Director of Housing Finance, 916-440-1353, [email protected] ;
Sacramento Housing and Redevelopment Agency
Presenter: None.
Attachments:
1-Description/Analysis
2-Resolution
3-Vicinity Map
4-Project Rendering
5-Project Summary
6-Cash Flow Proforma
7-Maximum Income and Rent Limits
8-Loan Documents
Description/Analysis
Issue Detail: In 2015, the Housing Authority of the County of Sacramento (HACOS) and the City of Sacramento (City) were, as co-grantees, awarded a $30 million Choice Neighborhoods Implementation (CNI) Grant from the US Department of Housing and Urban Development (HUD) for the Twin Rivers Transit Oriented Development and Light Rail Station project (Master Development) (Mirasol Village). The Sacramento Housing and Redevelopment Agency (SHRA) is managing the Master Development and McCormack Baron Salazar (MBS) is the master developer and Housing Lead (Developer) under the CNI grant. The Master Development is now known as Mirasol Village. The total project area includes six residential blocks and encompasses approximately 26 acres. A vicinity map and project rendering of the Mirasol Village is shown in Attachment 1 and 2
The CNI grant supports the redevelopment of the former housing development and the transformation of the River District/Railyards neighborhood. The grant requires replacement of 218 public housing units within a mixed-income development which will include housing units, common area, community gathering spaces, and other amenities.
Mirasol Village is being developed in five phases. The first phase includes Blocks B and E (123 units) and construction is now completed. The second phase is Block A (104 units) and construction will be completed in mid-2022. The third phase is Block C (84 units), which is the subject of this report. The Developer is now actively seeking to secure all funds needed to construct the fourth phase, Block D (116 units). The fifth phase, Block F, is the block east of 12 th Street and will be the last block developed.
History and Status
On June 30, 2020, the California Department of Housing and Community Development (HCD) awarded $14,484,068 of Multifamily Housing Program (MHP) funds to Mirasol Village Block C.
On October 13
th and 20th, 2020, City Council (Council) and the Board of the Housing Authority of the County of Sacramento approved up to $3,038,000 in CNI funds for a predevelopment loan agreement and permanent loan commitment to the Developer or related entity for the Project.On December 8, 2020, Council and the Board of the Housing Authority of the City (HACS) of Sacramento approved the issuance of up to $35,000,000 in tax exempt mortgage revenue bonds and a gap financing loan of $2,500,000 in Housing Authority Funds (HAF) for the construction and permanent financing of the Project.
On February 4, 2020, HACS and the Developer submitted a joint application for tax-exempt bonds, four percent Low Income Housing Tax Credits (LIHTC) and state tax credits for the construction and permanent financing of the Project. Unfortunately, this funding round was oversubscribed and the Project was not awarded due to the total amount of tax credits and bonds requested.
On May 4, 2021, City Council (Council) defunded the previous commitment of $2,500,000 in Housing Authority Funds (HAF) and approved a new gap financing loan of $5,000,000 in Housing Authority Funds (HAF) for the construction and permanent financing of the Project.
On May 24, 2021, HACS and the Developer submitted another joint application for tax-exempt bonds, four percent Low Income Housing Tax Credits (LIHTC) and state tax credits for the construction and permanent financing of the Project. Unfortunately, this funding round was oversubscribed and the Project was not awarded due to the total amount of tax credits and bonds requested
On February 4, 2022, the California Department of Housing and Community Development (HCD) awarded $19,923,906 of Accelerator Tier 1 funds to Block C. The Accelerator Tier 1 funds will replace the funding of the tax-exempt bond, four percent Low Income Housing Tax Credit (LIHTC) and state tax credits.
In this report, staff are recommending approval for the Executive Director to negotiate and enter into funding agreements for construction of the Project.
Development: Mirasol Village Block C is a new construction housing development composed of townhouses and garden-style walk-up buildings. Block C will consist of a total of seven residential buildings that includes 84 rental housing units and 68 on-grade parking spaces.
There will be 9 Americans with Disabilities Act compliant units and four units with communication features. The Project will contain amenities that include bicycle parking, landscaped courtyards and a play area. Additionally, residents from Block C will have access to the master development site amenities that include management offices, resident community rooms, fitness center, a business center, swimming pool, barbeque area, a community park and community garden.
Infrastructure Improvements: On May 29, 2018, Council approved the commitment of up to $16.49 million of Section 108 loan funds to construct new infrastructure systems throughout the Mirasol Village master development.
Entitlements: The site plan approval for the Project was received in February 2020, and the building permits are ready to be issued.
Developer: The limited partnership, Twin Rivers Phase 3, L.P. will develop the Project. A McCormack Baron Salazar, Inc. affiliate, Twin Rivers Phase 3, MBS GP, Inc., will serve as administrative general partner of the limited partnership. The Developer is an experienced owner and manager of affordable rental housing projects with more than 40 years of experience in affordable housing and has developed over 21,000 homes in 23 states across the U.S., including 13 communities in California. They have extensive experience in financing projects with tax credits, tax exempt bonds, and other public and private funding sources.
The Sacramento Housing Authority Repositioning Program, Inc. (SHARP) is the managing general partner of the limited partnership and is a non-profit public benefit corporation formed by the Housing Authority to pursue projects as a strategic response to reductions in federal funding sources for public housing. SHARP can attract private development partners and financing sources not otherwise directly available to the Housing Authority.
Property Management: The Project will be managed by the John Stewart Company (JSCo), an experienced property management firm with over 40 years of experience operating affordable apartment communities. There are over 420 properties in California consisting of more than 31,600 affordable and market rate residential units in their portfolio. The JSCo currently manages 16 SHRA financed affordable housing properties in the Sacramento region. SHRA staff has reviewed and approved the management plan, including daily operations, leasing procedures, maintenance, and eviction procedures to ensure the company meets SHRA requirements for property management.
Resident Services: Resident services will be provided by Urban Strategies, which currently provides resident services to 11 affordable housing communities across the country. Urban Strategies will be required to provide at least 15 hours of services per week for Block C residents. Programs will be tailored to resident needs. SHRA staff has reviewed and approved Urban Strategies’ resident services plan detailing the scope and schedule of services to be provided. Services will be provided by an on-site services coordinator and will include social services and enrichment programs. SHRA will approve subsequent providers of additional services.
Project Financing: In addition, HAF loan the Project will be financed with a CNI loan in the amount of $2,000,000, Housing Authority County of Sacramento (HACOS) ground lease loan of $378,000, a bank loan, an MHP loan of $14,484,068, and an Accelerator Program loan of $19,923,906.
HOUSING AUTHORITY AND HACOS LOANS LOAN AMOUNTS
HACS HAF Loan $5,000,000
HACOS CNI Loan $2,000,000
HACOS Capitalized Ground Lease Loan $378,000
TOTAL LOANS $8,416,000
Low-Income Set-Aside Requirements: SHRA requires at least 15 percent of the units have rents that are affordable to households with income up to 50 percent AMI and at least 5 percent of the units have rents that are affordable to households with income up to 30 percent AMI, based on financial feasibility. HUD approved 53 replacement Project Based Vouchers for the public housing replacement units in the Project which are administered by the County Housing Authority.
Project affordability restrictions will be specified in regulatory agreements with the Developer.
The Project Summary and Proforma are included as Attachments 5 and 6, and a schedule of Maximum Income and Rent Limits is included as Attachment 7. These anticipated sources and their affordability requirements are summarized in the following table:
Mirasol Village Block C
Affordability Restrictions (55 years) Units % of Units
Extremely Low Income (20% AMI) 35 42%
Extremely Low Income (30% AMI) 7 8%
Very-Low Income (50% AMI) 11 13%
Low Income (60% AMI) 10 12%
Low Income (80% AMI) 2 2%
Market Rate (Exempt) 18 22%
Management Unit (Exempt) 1 1%
Total 84 100%
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.
Policy Considerations: The recommended actions are consistent with a) SHRA’s approved Multifamily Lending and Mortgage Revenue Bond Policies, adopted on December 3, 2019 b) the 2021-2029 Housing Element, which encourages the provision of a variety of quality housing types to encourage neighborhood stability, including options for extremely low-income households (Resolution No. 2021-0259); c) the Sacramento Promise Zone Plans and Goals, Sustainably Built Community sub-goal to increase housing types and transit growth to promote livability and connectivity within the Promise Zone (Resolution No. 2015-263); d) the Downtown Housing Initiative and Initiation of the Downtown Specific Plan, to bring 10,000 places to live to Downtown Sacramento by year 2025 (Resolution No. 2015-282); e) the 2007 Asset Repositioning Strategy of the City and County Housing Authorities; f) the 2013-2019 Consolidated Plan; and g) the River District Specific Plan adopted February 15, 2011.
Economic Impacts: This multifamily residential project is expected to create 373.9 total jobs (211.87 direct jobs and 162.03 jobs through indirect and induced activities) and create $31,158,005 in total economic output ($18,992,745 of direct output and another $12,165,260 of output through indirect and induced activities). The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.
Environmental Considerations: California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA): A combined Initial Study/Environmental Assessment (IS/EA) was prepared for the Mirasol Village (formerly Twin Rivers) Transit Oriented Development and Light Rail Station Project pursuant to CEQA requirements under 14 California Code of Regulations (CCR) §15070, and NEPA requirements under 24 Code of Federal Regulations (CFR) §58.36. The Mitigated Negative Declaration (MND) and associated Mitigation Monitoring and Reporting Program (MMRP) were adopted and a Notice of Determination (NOD) was issued pursuant to CEQA and a Finding of No Significant Impact (FONSI) was prepared pursuant to NEPA. The requested action requires no further environmental review.
Sustainability: The Project has been reviewed for consistency with the goals, policies, and targets of the 2035 General Plan. If approved, the project will advance the following goals, policies, and targets that will directly or indirectly conserve energy resources and reduce greenhouse gas emissions, in part, from the 2035 General Plan: a) Housing Element – Strategies and Policies for Conserving Energy Resources – Climate Action Plan, subsection
7.2: improving the energy efficiency in new buildings; and b) Environmental Resources - Air Quality and Climate Change sub-section 6.1.7: reduce greenhouse gas emissions from new development, promoting water conservation and recycling, promoting development that is compact, mixed-use, pedestrian friendly, and transit oriented; and promoting energy-efficient building design and site planning.
Rationale for Recommendation: The actions recommended in this report enable SHRA to continue fulfilling its mission to provide a range of affordable housing opportunities in the City and are consistent with the SHRA’s approved Multifamily Lending and Mortgage Revenue Bond Policies, the City of Sacramento’s 2021-2029 Housing Element, Promise Zone plans and goals, Downtown Housing Initiative and Initiation of the Downtown Specific Plan, and Opportunity Zone.
Financial Considerations: The $5,000,000 HAF and $2,000,000 CNI loan will have a term of 57 years and a simple interest rate at 3%. SHRA will also receive a $100 annual administrative fee for each HAF assisted unit. The total administrative fee will not exceed $15,000 annually for the affordable units during the 57-year term.
Local Business Enterprise (LBE), Minority/Women’s Business Enterprise (M/WBE) and Section 3 requirements: Local Business Enterprise requirements do not apply to this report.
Minority and Women’s Business Enterprise requirements and Section 3 will be applied to all activities to the greatest extent feasible and as required by federal funding and in accordance with SHRA’s Section 3 Economic Opportunity Plan. The Developer and general contractor will work with SHRA’s Section 3 Administrator, to promote employment opportunities.
Updated 10-15-19
RESOLUTION NO. 2022 -
Adopted by the Housing Authority of the City of Sacramento
on date of
MIRASOL VILLAGE BLOCK C (PROJECT): APPROVAL TO EXECUTE FINAL LOAN DOCUMENTS WITH TWIN RIVERS PHASE 3 L.P. (MCCORMACK BARON
SALAZAR) OR RELATED ENTITY
BACKGROUND
A. In 2015, the Housing Authority of the County of Sacramento (HACOS) and the City of Sacramento (City) were, as co -grantees, awarded a $30 million Choice Neighborhoods Implementation Grant from the US Department of Housing and Urban Development (HUD) for the Twin Rivers Transit Oriented Development and Light Rail Station project (Master Development).
B. On December 12, 2017, HACOS and City Council members approved the Master Development Agreement, which includes the Option to Lease (ground lease loans). SHRA is managing the Master Development and McCormack Baron Salazar is the master developer and Housing Lead (Developer). The Master Development is now known as Mirasol Village. The total project area includes six residential blocks and encompasses approximately 26 acres.
C. The Master Development is being developed in five phases. The first phase includes Blocks B and E (123 units) and construction will be completed in April 2022. The second phase is Block A (104 units), and construction will be completed in September 2022. The third phase is Block C (84 units) and the Developer plans to start construction on this block by the summer of 2022. The Developer is now actively seeking to secure all funds needed to construct the fourth phase, Block D (116 units) (Project), subject of this report. The fifth phase, Block F, is the block east of 12th Street and will be the last block developed.
D. On June 30, 2020, the California Department of Housing and Community Development (HCD) awarded $14,484,068 of Multifamily Housing Program (MHP) funds to Block C.
E. On October 13, 2020, City Council (Council) approved up to $3,038,000 in CNI funds for a pre development loan agreement and permanent loan commitment to Twin Rivers Phase 3, L.P. or related entity for Block C.
F. On October 20, 2020, the HACOS Board also approved up to $3,038,000 in CNI funds for a predevelopment loan agreement and permanent loan co mmitment to Twin Rivers Phase 3, L.P. or related entity for Block C.
G. On December 8, 2020, Council and the Board of the Housing Authority of the City of Sacramento (HACS) approved the issuance of up to $35,000,000 in tax exempt Updated 10-15-19
mortgage revenue bonds and a gap financing loan of $2,500,000 in Housing Authority Funds (HAF) for the construction and permanent financing of the Project.
H. On February 4, 2020, HACS and the Developer submitted a joint application for tax-exempt bonds, fo ur percent Low Income Housing Tax Credits (LIHTC) and state tax credits for the construction and permanent financing of the Project.
Unfortunately, this funding round was oversubscribed and the Project was not awarded due to the total amount of tax credits and bonds requested.
I. On May 4, 2021, Council declared the previous commitment of $2,000,000 in HAF defunded and approved a new gap financing loan of $5,000,000 in HAF for the construction and permanent financing of the Project.
J. On February 4 , 2022, HCD awarded $19,923 ,906 of Accelerator Tier 1 funds to Block C. The Accelerator Tier 1 funds will replace the funding of the tax -exempt bond, four percent LIHTC and state tax credits the Project was not awarded.
K. A combined Initial Study/Environmental Assessment (IS/EA) was prepared for the Mirasol Village (formerly Twin Rivers) Transit Oriented Development and Light Rail Station Project pursuant to California Environmental Quality Act (CEQA) requirements under 14 C alifornia Code of Regulations (CCR) §15070, and National Environmental Policy Act (NEPA) requirements under 24 Code of Federal Regulations (CFR) §58.36. The Mitigated Negative Declaration (MND) and associated Mitigation Monitoring and Reporting Program (MM RP) were adopted and a Notice of Determination (NOD) was issued pursuant to CEQA and a Finding of No Significant Impact (FONSI) was prepared pursuant to NEPA. The requested action requires no further environmental review.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO RESOLVES AS FOLLOWS:
Section 1. All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.
Section 2. The Executive Director, or her designee, is authorized to negotiate, enter into, execute and amend from time to time a funding agreement comprised of up to $5 million in HAF and related documents for the construction and permanent financing of the Project with the Developer and execute other documents, as approved to form by its Office of the General Counsel, and perform other actions required by HAF, including without limita tion, negotiation, subordination, regulatory agreements, financial restructuring, and extensions, consistent with its adopted policy and with this resolution.
Updated 10-15-19
Section 3. The Executive Director finds that an economically feasible alternative method of financing on substantially comparable terms and conditions, without subordination is not available. Therefore, Executive Director, or her designee, is authorized to subordinate the HAF loan to the senior loans
Section 4. This resolution shall take effect immediately upon its adoption.
VINE ST
N 12TH ST
DOS RIOS ST
RICHARDS BLVD
AHERN ST
SUNBEAM AVE
PIPEVINE ST
RINGLET AVE
SPROULE AVE
SWALLOWTAIL AVE
N 16TH ST
Mirasol Village (Twin Rivers)
·
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Feet SHRA GIS
April 8, 2021
J ST
Q ST
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SAN JUAN RD
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Map
Location
vicinity map
Mirasol Village
Development
Block D
Mirasol Village Development
Block E
Block B
Block A
Block C
Mirasol
Village
Park
Attachment 3
Block F
Attachment 4
Mirasol Village Block C - Project Rendering
Address
Number of Units
Construction Tvoe
Unit Mix and Rents1
1 Bedroom/ 1 Bath
2 Bedroom / 1 Bath
3 Bedroom / 2 Bath
3 Townhouse/ 2.5 Bath
4 Bedroom/ 2 Bath
4 Townhouse/ 2.5 Bath
5 Townhouse/ 2.5 Bath
TOTAL
Sguare Footage
1 Bedroom/ 1 Bath
2 Bedroom/ 1 Bath
3 Bedroom/ 2 Bath
3 Townhouse / 2.5 Bath
4 Bedroom / 2 Bath
4 Townhouse/ 2.5 Bath
5 Townhouse/ 2.5 Bath
TOTAL
Resident Facilities
Permanent Sources
Permanent Loan
HAGOS Ground Lease Loan
HACOS CNI Loan
HACS HAF Loan
HCD MHP Loan
HCD Housing Accelerator Loan
TOTAL SOURCES
Permanent Uses
Acquisition
Construction
Permits and Fees
Architecture and Engineering
Hard Cost Contingency
Soft Cost Contingency
Mortgage Interest and Financing costs
Operating Reserves
Transition Reserve
Legal Fees
Developer Fee
Insurance, Third Party, Marketing,
Other
TOTAL USES
Leverage
Management I O�erations
Proposed Developer:
Property Management Company:
Operations Budget:
Property Management:
Resident Services:
Taxes:
Security:
Replacement Reserves
Mirasol Village Block C (Twin Rivers Phase 3)
Residential Project Summary
1200 Richards Blvd., Sacramento, CA 95811
84 New Construction
Attachment 5
ExemQt Mgt
ELI 20% AMI PBV ELI 30% AMI PBV VLI 50% AMI PBV LI 60% AMI Market Rate Unit Total 6 7 2 7 14 0 36
10 0 4 5 4 1 24
10 0 4 0 0 0 14
3 0 0 0 0 0 3
0 0 1 0 0 0 1
5 0 0 0 0 0 5
1 0 0 0 0 0 1
35 7 11 12 18 1 84
Per Unit Total
619 22,284 sq.ft.
838 20,112 sq.ft.
1,169 16,366 sq.ft.
1,327 3,981 sq.ft.
1,385 1,385 sq.ft.
1,440 7,200 sq.ft.
1,989 1,989 sg.ft.
73,317 SQ.ft.
Management offices, resident community space, fitness center, swimming pool, BBQ area, landscape courtyards, school-aged play ground, community park, on-site surface vehicular parking and secure bicycle Total Per Unit PerSg Ft
$ - $ -
$7,900,058 $ 94,048 $ 107.75
$ 378,000 $ 4,500 $ 5.16
$ 2,000,000 $ 23,810 $ 27.28
$ 5,000,000 $ 59,524 $ 68.20
$ 14,484,068 $ 172,429 $ 197.55
$ 19,923,906 $ 237,189 $ 271.75
$ 49,686,032 $ 591,500 $ 677.69
$ 445,000 $ 5,298 $ 6.07
$ 34,982,885 $ 416,463 $ 477.15
$ 579,726 $ 6,902 $ 7.91
$ 1,932,531 $ 23,006 $ 26.36
$ 1,955,304 $ 23,277 $ 26.67
$ 451,891 $ 5,380 $ 6.16
$ 3,583,993 $ 42,667 $ 48.88
$ 382,597 $ 4,555 $ 5.22
$ 660,527 $ 7,863 $ 9.01
$ 532,000 $ 6,333 $ 7.26
$ 2,200,000 $ 26,190 $ 30.01
$ 1,979,578 $ 23,566 $ 27.00
$ 49,686,032 $ 591,500 $ 677.69
SHRA $ e_er Unit Per Unit Cost Leverag_e
$ 87,833 $ 591,500 $1.00: $6.73
McCormack Baron Salazar
The John Stewart Company
$ 590,202 $ 7,026
$ 78,513 $ 935
$ 85,555 $ 1,019
$ 58,536 $ 697
$ 50,400 $ 600
$ 42,000 $ 500
1Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.
Mirasol Village Block C (Twin Rivers Phase 3) Area Median Square Total Gross Utility Net Net Rent per Total Monthly Current Unit Type Income % (AMI) Number Feet Sq Feet Rent¹ Allowance Rent Sq Foot Net Rent Annual Rent 1 BD/1 BA (PBV) 20% 6 619 3,714 324$ 69$ 255$ 0.41$ 1,530$ 18,360$ 1 BD/1 BA (PBV) 30% 7 619 4,333 486$ 69$ 417$ 0.67$ 2,919$ 35,028$ 1 BD/1 BA (PBV) 50% 2 619 1,238 810$ 69$ 741$ 1.20$ 1,482$ 17,784$ 1 BD/1 BA 60% 6 619 3,714 972$ 69$ 903$ 1.46$ 5,418$ 65,016$ 1 BD/1 BA 80% 1 619 619 1,296$ 69$ 1,227$ 1.98$ 1,227$ 14,724$ 1 BD/1 BA Market Rate 14 619 8,666 1,500$ -$ 1,500$ 2.42$ 21,000$ 252,000$ 2 BD/1 BA (PBV) 20% 10 838 8,380 388$ 86$ 302$ 0.36$ 3,020$ 36,240$ 2 BD/1 BA (PBV) 50% 4 838 3,352 971$ 86$ 885$ 1.06$ 3,540$ 42,480$ 2 BD/1 BA 60% 4 838 3,352 1,165$ 86$ 1,079$ 1.29$ 4,316$ 51,792$ 2 BD/1 BA 80% 1 838 838 1,554$ 86$ 1,468$ 1.75$ 1,468$ 17,616$ 2 BD/1 BA Market Rate 4 838 3,352 1,650$ -$ 1,650$ 1.97$ 6,600$ 79,200$ 3 BD/2 BA (PBV) 20% 10 1,327 13,270 449$ 105$ 344$ 0.26$ 3,440$ 3 BD/2 BA (PBV) 50% 4 1,327 5,308 1,122$ 105$ 1,017$ 0.77$ 4,068$ 3 BD/2.5 BA (PBV) 20% 3 1,327 3,981 449$ 128$ 321$ 0.24$ 963$ 11,556$ 4 BD/2 BA (PBV) 50% 1 1,385 1,385 1,252$ 123$ 1,129$ 0.82$ 1,129$ 13,548$ 4 BD/2.5 BA (PBV) 20% 5 1,440 7,200 501$ 152$ 349$ 0.24$ 1,745$ 20,940$ 5 BD/2.5 BA (PBV) 20% 1 1,989 1,989 552$ 175$ 377$ 0.19$ 377$ 4,524$ 2 BD/1 BA Manager Unit Exempt 1 838 838 -$ -$ -$ -$ -$ -$ Totals 84 64,242$ 680,808$
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.
Annual 2024 2025 2026 2027 2028 2033 2038 2043 2048 2053 Income Increase Per Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Year 15 Year 20Year 21Year 25 Year 30 Gross Potential Rent 2.50% 715,274 733,156 751,485 770,272 789,529 893,279 1,010,663 1,143,473 1,293,734 1,463,742 Other Income 2.50% 6,556 6,720 6,888 7,060 7,236 8,187 9,263 10,481 11,858 13,416 Rental Subsidy 2.50% 871,203 892,984 915,308 938,191 961,646 1,088,014 1,230,988 1,392,750 1,575,768 1,782,837 Less Vacancy 5.00% (36,091) (36,994) (37,919) (38,867) (39,838) (45,073) (50,996) (57,698) (65,280) (73,858) Effective Gross Income $1,556,942 $1,595,865 $1,635,762 $1,676,656 $1,718,572 $1,944,407 $2,199,918 $2,489,005 $2,816,081 $3,186,137 Operating Expenses
Operating Expenses 3.50% 7,026 590,202 610,859 632,239 654,368 677,270 804,385 955,357 1,134,664 1,347,625 1,600,556 Property Management 3.50% 935 78,513 81,261 84,105 87,049 90,095 107,005 127,089 150,941 179,271 212,918 Resident Services 3.50% 1,019 85,555 88,549 91,649 94,856 98,176 116,603 138,487 164,480 195,350 232,015 Taxes 2.00% 697 58,536 59,707 60,901 62,119 63,361 69,956 77,237 85,276 94,151 103,951 Security 3.50% 600 50,400 52,164 53,990 55,879 57,835 68,690 81,582 96,894 115,080 136,679 Replacement Reserves 0.00% 500 42,000 42,000 42,000 42,000 42,000 42,000 42,000 42,000 42,000 42,000 Total Expenses 10,776 $905,206 $934,540 $964,883 $996,271 $1,028,739 $1,208,639 $1,421,752 $1,674,255 $1,973,477 $2,328,118 Net Operating Income $651,736 $661,325 $670,878 $680,385 $689,834 $735,768 $778,166 $814,750 $842,604 $858,019 Debt Service amount rate amort
Senior Loan $9,470,085 4.00% 40 474,615 474,615 474,615 474,615 474,615 474,615 474,615 474,615 474,615 474,615 HCD Monitoring Fee $14,484,068 0.420% 60,833 60,833 60,833 60,833 60,833 60,833 60,833 60,833 60,833 60,833 SHRA Monitoring Fee $8,000,000 0.125% 13,900 13,900 13,900 13,900 13,900 13,900 13,900 13,900 13,900 13,900 Debt Service Subtotal $549,348 $549,348 $549,348 $549,348 $549,348 $549,348 $549,348 $549,348 $549,348 $549,348 Cash Available after Debt Service $102,387 $111,977 $121,530 $131,037 $140,485 $186,420 $228,818 $265,402 $293,255 $308,671 Priority Distributions
Limited Partner Management Fee $10,000 3.00% 10,000 10,300 10,609 10,927 11,255 13,048 15,126 17,535 0 0 Managing General Partner Management Fee $10,000 3.00% 10,000 10,300 10,609 10,927 11,255 13,048 15,126 17,535 0 0 Administrative General Partner Fee $15,000 3.00% 15,000 15,450 15,914 16,391 16,883 19,572 22,689 26,303 0 0 Priority Distributions Subtotal 35,000 36,050 37,132 38,245 39,393 45,667 52,941 61,373 0 0 Net Cash after Priority Distributions $67,387 $75,927 $84,399 $92,791 $101,093 $140,753 $175,877 $204,029 $293,255 $308,671 Deferred Developer Fee
Principal Balance $0 1.00% 0 0 0 0 0 0 0 0 0 0
Payment 0 0 0 0 0 0 0 0 0 0
Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Cash after Deferred Developer Fee $67,387 $75,927 $84,399 $92,791 $101,093 $140,753 $175,877 $204,029 $293,255 $308,671 Investor Cash Flow
Residential NOI after Debt Service, Priority Distributions & Deferred Developer Fee $33,694 $37,963 $42,199 $46,396 $50,546 $70,376 $87,939 $102,015 $146,628 $154,336 HCD CA Housing Accelerator
Principal Balance $19,923,906 3.00% 19,923,906 19,923,906 19,923,906 19,923,906 19,923,906 19,923,906 19,923,906 19,923,906 19,923,906 19,923,906 Interest for Period 597,717 597,717 597,717 597,717 597,717 597,717 597,717 597,717 597,717 597,717 Accumulated Interest 597,717 1,195,434 1,793,152 2,390,869 2,988,586 5,977,172 8,965,758 11,954,344 14,942,930 17,931,515 Payment 0 0 0 0 0 0 0 0 0 0
Balance $20,521,623 $21,119,340 $21,717,058 $22,314,775 $22,912,492 $25,901,078 $28,889,664 $31,878,250 $34,866,836 $37,855,421 HCD MHP Loan
Principal Balance $14,484,068 3.00% 14,484,068 14,484,068 14,484,068 14,484,068 14,484,068 14,484,068 14,484,068 14,484,068 14,484,068 14,484,068 Interest for Period 434,522 434,522 434,522 434,522 434,522 434,522 434,522 434,522 434,522 434,522 Payment 0 1,163 6,438 11,686 16,903 42,263 65,671 85,869 101,247 109,758 Balance $14,918,590 $15,351,949 $15,780,033 $16,202,869 $16,620,488 $18,631,934 $20,521,994 $22,304,076 $23,998,904 $25,636,525 City Housing Authority HAF Loan
Principal Balance $5,000,000 3.00% 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 Interest for Period 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 Payment 0 402 2,222 4,034 5,835 14,590 22,670 29,643 34,951 37,889 Balance $5,150,000 $5,299,598 $5,447,376 $5,593,342 $5,737,507 $6,431,872 $7,084,334 $7,699,521 $8,284,587 $8,849,905 County Housing Authority CNI Loan
Principal Balance $2,000,000 3.00% 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Interest for Period 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 Payment 0 161 889 1,614 2,334 5,836 9,068 11,857 13,980 15,156 Balance $2,060,000 $2,119,839 $2,178,950 $2,237,337 $2,295,003 $2,572,749 $2,833,733 $3,079,808 $3,313,835 $3,539,962 County Housing Authority Ground Lease Loan
Principal Balance $378,000 0.00% 378,000 378,000 377,970 377,802 377,497 373,952 367,189 357,525 345,457 331,717 Payment 0 30 168 305 441 1,103 1,714 2,241 2,642 2,864
Balance $378,000 $377,970 $377,802 $377,497 $377,056 $372,850 $365,476 $355,284 $342,815 $328,853 Mirasol Village Block C (Twin Rivers Phase 3)
Cash Flow Proforma
Attachment 6
Attachment 7
Family Size 30% AMI 40% AMI 50% AMI 60% AMI 80% AMI
1 person 19,050$ 25,400$ 31,750$ 38,100$ 50,750$ 2 person 21,800$ 29,000$ 36,250$ 43,500$ 58,000$ 3 person 24,500$ 32,640$ 40,800$ 48,960$ 65,250$ 4 person 27,200$ 36,240$ 45,300$ 54,360$ 72,500$ 5 person 31,040$ 39,160$ 48,950$ 58,740$ 78,300$ 6 person 35,580$ 42,040$ 52,550$ 63,060$ 84,100$ 7 person 40,120$ 44,960$ 56,200$ 67,440$ 89,900$ 8 person 44,660$ 47,840$ 59,800$ 71,760$ 95,700$ 9 person 46,850$ 50,735$ 63,450$ 76,104$ 101,500$ 10 person 49,050$ 53,635$ 67,050$ 80,452$ 107,300$ 11 person 51,200$ 56,535$ 70,700$ 84,801$ 113,100$ Unit Size 30% AMI 40% 50% AMI 60% AMI 80% AMI
1 Bedroom 545$ 725$ 906$ 1,087$ 1,450$
2 Bedroom 612$ 816$ 1,020$ 1,224$ 1,631$
3 Bedroom 680$ 906$ 1,132$ 1,359$ 1,812$
4 Bedroom 776$ 979$ 1,223$ 1,468$ 1,957$
5 Bedroom 889$ 1,051$ 1,313$ 1,576$ 2,102$ ¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.
Mirasol Village Block C (Twin Rivers Phase 3)
MAXIMUM INCOME AND RENT LIMITS 2022
Rents at 30%, 40% 50%, 60% and 80% of Area Median Income (AMI) Multifamily Housing Program, Choice Neighborhoods Initiative, Housing Authority Funds Maximum Gross Income Limits
Maximum Gross Rent Limits¹
Construction and Permanent Loan Agreement - HAF Loan Page 1 Mirasol Village Block C
CONSTRUCTION AND PERMANENT LOAN AGREEMENT
MIRASOL VILLAGE BLOCK C
IN CONSIDERATION of their mutual promises, the parties agree as follows:
1. LOAN. Lender is making the Loan pursuant to the terms and conditions of this Loan Agreement. Lender and Borrower have entered this Loan Agreement as of the Effective Date.
2. DEFINITIONS TABLES. The capitalized terms in this Loan Agreement shall have the meanings assigned in the following Definitions Tables and in Section 3 Definitions. Terms being defined are indicated by quotation marks. If an item in the Definitions Table is marked “None”, “Not Applicable”, “N/A” or equivalent or is left blank, that defined term is not applicable to this Loan or the referenced item is not required or is not included in this Loan as the context may indicate.
A. “LOAN INFORMATION” The general loan provisions of the Loan:
“EFFECTIVE DATE” May 1,2022 The date as of which this Loan Agreement shall be effective. “LENDER” The following public agency that is making the Loan, and whose legal status and address are:
Name Housing Authority of the City of Sacramento, a public body corporate and politic Legal Status A public body, corporate and politic
Principal Address 801 12th Street, Sacramento CA 95814
“BORROWER” The borrower of the Loan funds whose name, legal status and address are:
Name Twin Rivers Phase 3, L.P., a California limited partnership Legal Status a California limited partnership
Principal Address
c/o McCormack Baron Salazar, Inc.
720 Olive Street, Suite 2500
St. Louis, MO 63101
Attention: Hillary Zimmerman
“LOAN” The Loan made by this Loan Agreement.
“LOAN COMMITMENT” Lender’s loan commitment, made by letter dated as of May 4, 2021 “LOAN PROGRAM” Lender’s Loan Program, commonly known as Housing Authority Funds (HAF) “LOAN AMOUNT” Five Million Dollars and No Cents ($5,000,000.00). “INTEREST RATE” The interest rate is 3% per year, simple interest. “MATURITY DATE” The first day of the 684th calendar month following the Effective Date. May 1, 2079 “PAYMENT SCHEDULE”
Annual payments shall be made in accordance with the Payment Schedule set forth in the Note evidencing this Loan.
“BORROWER EQUITY”
N/A
Which is the minimum amount of cash or cash equivalent
(excluding land equity or other non-cash investment in the Project) that Borrower is investing in the Project.
N/A Which is Borrower’s non -cash contribution to the Project (such as deferred developer fees).
“SPECIAL TERMS” N/A
Attachment 8
Construction and Permanent Loan Agreement - HAF Loan Page 2 Mirasol Village Block C
“PROJECT”
Which is the Project to be developed
on the Property with the Loan funds,
more particularly described as:
Mirasol Village Block C is the third phase of a master plan, mixed-income housing development located at 320 Dos
Rios Street. The proposed development will replace the existing public housing development in this area, with 84 units in this phase. All off -site infrastructure and the adjacent right -of-way improvements will be constructed under a separate contract. The project will be designed to secure a Green Point Rated Certification. The
development will be a vibrant new addition to the
neighborhood and help encourage future improvements
and development.
B. “COLLATERAL” The Collateral securing repayment of the Loan, which Collateral consists of the following:
“PROPERTY” The following described real property, which is security for the Loan and the site of the Project:
Address and Assessor’s Parcel Number 320 Dos Rios Street, Sacramento, CA 95811 APN: 001-0320-005-0000
“Legal Description”
The Property is situated in the State of California, County of Sacramento, and is more particularly described in Exhibit 1: Legal Description attached and incorporated by reference.
Borrower has a leasehold interest in the real property and fee interest in the improvements on the Property, or if the Additional Escrow Instructions so indicate, Borrower will acquire such interests in the Property at Close of Escrow.
Borrower’s Title Interest
“ADDITIONAL COLLATERAL”
The Additional Collateral securing repayment of the Loan is any additional security required by Lender under this Loan Agreement, including without limitation the following items, if any:
“PERSONAL PROPERTY”
Borrower’s interest in the following
personal property, tangible and
intangible, and all other such property
listed as security in this Loan
Agreement:
Any and all materials and supplies to be
used in furtherance of the Project.
OTHER ADDITIONAL COLLATERAL Borrower’s interest in the following property, without limitation: None.
C. “ESCROW INFORMATION”:
“Title Company” and
“Escrow Agent”
First American Title Insurance
Company
Which is the title company that will issue the Title Policy and that will act as Escrow Agent for the Escrow.
“Escrow” The escrow with Escrow Agent
“Closing Date” May 23, 2022 Which is the date for close of the Escrow, as it may be extended.
D. “LIST OF EXHIBITS” (The following are attached and incorporated in this Loan Agreement):
EXHIBIT DEFINED TERM
Exhibit 1: Legal Description “Legal Description”
Exhibit 2: Scope of Development “Scope of Development” Exhibit 3: Note Form “Note”
Exhibit 4: Leasehold Trust Deed Form “Trust Deed”
Exhibit 5: Regulatory Agreement “Regulatory Agreement”
Exhibit 6: Escrow Instructions “Escrow Instructions
Exhibit 7: HAF Funding Requirements “Funding Requirements”
E. “APPROVAL DOCUMENTS” Borrower shall submit the following documents for Lender approval:
Construction Agreements for the Project
Architectural Agreement for the Project
Construction and Permanent Loan Agreement - HAF Loan Page 3 Mirasol Village Block C
Borrower’s organizational documents, such as partnership agreements or corporate articles and by -laws “Budget” for the Project
Evidence of financing as described in this Loan Agreement Plans and Specifications as defined in this Loan Agreement
F. “ASSIGNED DOCUMENTS” Borrower shall assign the following documents to Lender:
Construction Contract
Architectural Contract
G. “CONSTRUCTION INFORMATION”:
“Completion Date” May 31, 2024 Which is the date on or before which the Completion of the Project must occur.
“General Contractor”
Midstate Construction
Corporation, a California
corporation
Which is the general contractor for construction of the Project.
“Project Architect” SVA Architects, Inc., a California
corporation Which is the architect for design of the Project “Retention”
Lender shall retain a portion of the Loan Amount , in
aggregate not to exceed the following Maximum
Percentage of the Loan Amount, for disbursement with
the final disbursement of the Loan:
Maximum
Percentage
of the Loan
Amount:
TEN Percent (10%)
H. “SPECIAL PROVISIONS” The following special provisions shall be in addition to the provisions of this Loan Agreement:
1. No Loan funds shall be used for predevelopment costs, except as provided in the Budget. Unless otherwise noted in the Budget, predevelopment costs are not subject to withholding as Retention.
2. The John Stewart Company is approved by Lender as “Property Manager” for the Property and Project.
3. DEFINITIONS. Terms not defined in this Loan Agreement shall have the definitions assigned in the Trust Deed. As used in this Loan Agreement, the following terms shall have the following meanings:
3.1. “Budget” is the budget approved by Lender for the development of the Project.
3.2. “California Environmental Quality Act” or “CEQA” is established in the California Public Resources Codes § 21000 et seq. and is applicable to private activities requiring discretio nary governmental approvals (Pub. Res. Code §210001.1, 21001, 21080 and 14 California Code of Regulations § 15002(c).
3.3. “Change” means any extra work or installation of materials not included in the Plans and Specifications or any change in or deviation from the Plans and Specifications.
3.4. “Close of Escrow” means the fulfillment of the Escrow terms and conclusion of the Escrow, including, without limitation, the execution of unexecuted documents, the recordation of documents specified for recording, the issuance of title insurance policies, the payment of fees and the delivery of funds and documents as directed in the escrow instructions for the Escrow. The Close of Escrow shall occur on the Closing Date.
3.5. “Completion of the Project” means that, in Lender's s ole judgment the Project has been constructed, rehabilitated, completed, equipped, and furnished in a good and proper manner in accordance with the Plans and Specifications, the Scope of Development and the Budget as approved by Lender; all notices of comp letion with respect to the Project have been filed and all statutory lien periods have expired; all costs of constructing the Project have been paid, including, without limitation, interest on the Note which may be due prior to the Completion Date; all necessary certificates of occupancy have been issued; and all of the conditions to final disbursement of the Loan have been satisfied.
3.6. “Environmental Review” means the investigation and analysis of the Project’s impacts on the environment as may be required by CEQA and/or National Environmental Policy Act (NEPA), or of the Project’s impacts on any species of plant or animal listed as a species of concern, or a threatened or endangered species under California or federal laws or regulations.
3.7. “Escrow” is the escrow with Title Company for the closing of the Loan.
Construction and Permanent Loan Agreement - HAF Loan Page 4 Mirasol Village Block C
3.8. “Escrow Instructions" means the Escrow Instructions for the Escrow signed by each of the parties to this Loan Agreement.
3.9. “Event of Default” is breach of or default in a party’s obligations under this Loan Agreement, the Trust Deed, the Note, the Regulatory Agreement, and any other instrument which is incorporated in this Loan Agreement or which otherwise secures the repayment of the Loan.
3.10. “Financial Statements” means the financial statements of Borro wer (and any other persons on whose financial capacity Lender has relied in making this Loan) as may be required by Lender from time to time, including operating statements, balance sheets, and any other financial reports and information that Lender may re quire.
3.11. “Fixtures” means all fixtures located on or within the Project or now or later installed in or used in connection with any of the Project, including, as applicable and without limitation, all partitions, screens, awnings, motors, engines, boile rs, furnaces, pipes, plumbing, elevators, cleaning and sprinkler systems, fire extinguishing apparatus and equipment, water tanks, heating, ventilating, air conditioning and air cooling equipment, built -in refrigerators, and gas and electric machinery, appurtenances, and equipment, whether or not permanently affixed to the Project.
3.12. “General Contractor” means the general contractor named by Borrower in its application or supporting documents as the general contractor to do the Project, or any other general contractor so designated by Borrower and approved in writing in advance by Lender.
3.13. “Governmental Authority” means the United States of America, the State of California, the County of Sacramento, the City of Sacramento or any other political subdivision, agency, department, commission, board, bureau, or instrumentality of any of them.
3.14. “Governmental Requirement” means any law, ordinance, order, rule, regulation, plan, ruling, determination or requirement of a Governmental Authority.
3.15. “Loan” is the loan from Lender to Borrower made pursuant to this Loan Agreement.
3.16. “Loan Agreement” means this Construction and Permanent Loan Agreement, all exhibits attached to this Loan Agreement (which are incorporated in this Loan Agreement by this reference) and the Loan Docum ents which are not otherwise included in this definition.
3.17. “Loan Documents” means the Note, this Loan Agreement, the Security Documents, the Regulatory Agreement, and all other documents (including guaranties, if any) evidencing, securing, or relating to the Loan.
3.18. “Loan Maturity Date” means the date on which the entire unpaid balance of the Loan, including principal and interest, is due and payable.
3.19. “Loan Proceeds” means funds disbursed by Lender on account of the Loan and pursuant to this Loan Agreement.
3.20. “Mitigation Measure(s)” means tho se feasible measures, actions, or features that are to be incorporated into the Project in order to avoid or substantially reduce the Projects significant impact on the environment.
3.21. “National Environmental Policy Act” or “NEPA” contains the federally required procedures to revi ew and analyze the effect and impact of the Project on the environment as applied to the Project under 24 Code of Federal Regulations Parts 50 and 58 et seq.
3.22. “Note” means that certain promissory note evidencing the Loan and attached hereto as Exhibit 3.
3.23. “Other Lender Draw” means a draw request or other request for disbursement submitted to another lender for the Project.
3.24. “Person” means any natural person, corporation, firm, partnership, association, trust, government, governmental agency, or any other entity, whether acting in an individual, fiduciary, or other capacity.
3.25. “Personalty” means, whether or not listed as Additional Collateral, all of Borrower's interest in all accounts, contract rights, and general intangibles (specifically including any insurance proceeds and condemnation awards) arising out of the
Construction and Permanent Loan Agreement - HAF Loan Page 5 Mirasol Village Block C
ownership, development, or operation of the Property, and all furniture, furnishings, equipment, machinery, construction materials and supplies, leasehold interests in personal property, and all other personal property (other than Fixtures) of Borrower now or later located about the Property, together with all present and future attachments, accessions, replacements, substitutions, and additions, and the cash and noncash proceeds.
3.26. “Plans and Specifications” means the final set of architectural, structural, mechanical, electrical , grading, sewer, water, street, and utility plans and specifications for the Project, including all supplements, amendments, and modifications.
3.27. “Potential Default” means an event that would constitute an Event of Default but for any requirement of notice to be given or period of grace or time to elapse.
3.28. Reserved.
3.29. “Security Documents” means the Trust Deed, together with all other documents entered into between Borrower and Lender or by Borrower in favor of, or for the benefit of, Lender that recite that they are to secure the Loan.
3.30. “Title Policy” means the title insurance policies to be issued in connection with this Loan, as further defined in the Escrow Instructions.
3.31. “Trust Deed” means that certain Leasehold Deed of Trust and Assignment of Rent s between Borrower, as trustor, Lender, as beneficiary, and trustee which secures the Note and is attached hereto as Exhibit 4.
3.32. “Unavoidable Delay” is a delay in the performance by a party of any obligation which delay is unforeseeable and beyond the control of such party and without its fault or negligence. Unavoidable Delay shall include acts of God, acts of the public enemy, acts of the Federal Government, acts of the other party, fires, floods, epidemics, quarantine restriction s, strikes, freight embargoes, and unusually severe weather (as for example, floods, tornadoes, or hurricanes) or delays of subcontractors due to such causes. In the event of the occurrenc e of any such enforced delay, the time or times for performance of such obligations of the parties shall be extended for the period of the enforced delay, as determined by Lender, provided that the party seeking the benefit of the provisions of this Section shall, within thirty (30) days after it has o r should have knowledge of any such enforced delay, have first notified the other party, in writing, of the delay and its cause, and requested an extension for the period of the enforced delay.
4. BORROWER'S REPRESENTATIONS AND WARRANTIES. As a material inducement to Lender to enter into this Loan Agreement and to make the Loan to Borrower, Borrower unconditionally, and each signatory who signs on its behalf, to the extent of their actual knowledge, represents and warrants to Lender, as of the Close of Escrow, as follows:
4.1. LEGAL ORGANIZATION. Borro wer is duly formed and validly exists in the form stated in Section 2 hereof, is qualified to do business in California, and has full power to consummate the transactions contemplated.
4.2. BORROWER'S POWERS. Borrower has full authority to execute this Loan A greement, the Note, the Trust Deed, and all of the other Loan Documents, to undertake and consummate the contemplated transactions, and to pay, perform, and observe all of the conditions, covenants, agreements, and obligations.
4.3. BINDING OBLIGATION. This Loan Agreement, the Note, the Trust Deed, and each of the other Loan Documents constitute a legal and binding obligation of, and are valid and enforceable against, each party other than Lender, in accordance with the terms of each.
4.4. LITIGATION. There are no actions, suits, or proceedings pending or, to the best knowledge of Borrower, threatened against or affecting Borrower, the Property, or any part of it, or involving the validity or enforceability of the Trust Deed, the priority of the lien, or the valid ity or enforceability of any of the other Loan Documents, at law or in equity, or before or by any Governmental Authority. Borrower is not in default with respect to any order, writ, injunction, decree, or demand of any court or other Governmental Authority.
4.5. NO OTHER BREACH. The consummation of the transactions covered by this Loan Agreement and the payment and performance of all of the obligations in the Loan Documents will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, contract, loan or credit agreement, corporate charter, bylaws, partnership agreement, trust agreement, or other instrument to which Borrower or any of its general partners is a party or by which it or they or the Property may be bound or affected.
4.6. NO DEFAULT. There is no Event of Default or Potential Default on the part of Borrower.
Construction and Permanent Loan Agreement - HAF Loan Page 6 Mirasol Village Block C
4.7. TITLE TO PROPERTY. Borrower is the sole legal and beneficial owner of the Property, which is free of all claims, liens, and encumbrances other than those shown in the Title Policy.
4.8. NO UNAPPROVED LOANS. Borrower has not received financing for either the acquisition of the Property, the construction of the Project or the permanent financing of the Project except as has been specifically disclosed to and approved by Lender in writing.
4.9. TITLE OF PERSONALTY. All Personalty is vested solely in Borrower, free of all claims, liens, and encumbrances, and the security interest of Lender in the Personalty is a first lien.
4.10. TAXES PAID. Borrower has filed all required Federal, State, County, and City tax returns and has paid all taxes due and owing. Borrower knows of no basis for additional assessments with respect to any taxes, other than the lien of taxes not yet due.
4.11. PLANS AND SPECIFICATIONS. The Plans and Specifications are satisfactory to Borrower and the General Contractor and have been approved by Lender and all other construction lenders. There are no structural defects in the Project as shown in the Plans and Specifications that are k nown to or reasonably should have been known to Borrower or its agents and employees, and to the best of Borrower's knowledge, no violation of any Governmental Requirement, including but not limited to an environmental requirement, exists.
4.12. ACCURACY. All applications, financial statements, reports, documents, instruments, information, and forms of evidence delivered to Lender concerning the Loan or required by this Loan Agreement or any of the other Loan Documents are accurate, correct, and sufficiently co mplete to give Lender true and accurate knowledge of their subject matter, and do not contain any untrue statement of a material fact or omit any material fact necessary to make them not misleading.
5. BORROWER’S COVENANTS AND CONDITIONS. From the Effective Date until payment and performance in full of all obligations of Borrower under this Loan Agreement, the Note, the Security Documents, and the other Loan Documents or the earlier release of the liens of the Loan Documents (and all related obligations) in accordance with the terms of this Loan Agreement, the Note, the Security Documents, and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:
5.1. USE OF PROCEEDS. All Loan Proceeds will be disbursed as provided in this Loan Agreeme nt and used only for payment of the costs of construction of the Project in accordance with the Plans and Specifications, permanent financing and for other purposes as specified in this Loan Agreement.
5.2. PROPERTY MANAGEMENT. Subject to Lender’s written app roval, Borrower shall obtain and maintain for the life of the Loan a top quality property management agreement with a duly accredited real estate property management company for the management of the Property, and shall assure compliance of the property ma nager with the property management agreement. Lender shall not disburse any funds under this Loan Agreement unless and until it has reviewed and approved the agreement as adequate and the property management company as top quality and duly accredited. Lender shall have the right to review and approve or reject any proposed changes to scope of said agreement and to changes in the real estate property management company prior to making such changes. Any such changes made without Lender approval shall be an Event of D efault under this Agreement . Lender has approved The John Stewart Company as the qualified property management company for the Project.
5.3. BORROWER RESERVES. Borrower shall maintain reserves for replacement and repairs required to be made to t he Property, fixtures on the Property or personal property used on the Property, or otherwise as approved by Lender, in an amount, at all times, of not less than Twenty-Six Thousand Dollars and No Cents ($26,000.00) per year.
5.4. FINANCIAL REPORTING. During the term of the Loan, Borrower shall deliver to Lender within 120 days of the end of each calendar year audited Financial Statements prepared in accordance with generally accepted accounting principles and signed by authorized officers of Borrower. Prior to the Close of Escrow and during the term of the Loan, Borrower shall deliver to Lender any such additional Financial Statement as may be requested by Lender. Lender reserves the right to review and approve Financial Statements and other credit information and references prior to the Close of Escrow. During the term of the Loan, Borrower must deliver to Lender a monthly rent-roll including household composition information and operating statements with respect to the Property and improvements, as Lender may request.
Construction and Permanent Loan Agreement - HAF Loan Page 7 Mirasol Village Block C
5.5. FEDERAL REQUIREMENTS. If any Loan Program is federally funded, Borrower shall comply with all laws, rules, regulations and funding requirements that govern the use of such funds , including but not limited to the Funding Requirements. Lender, to the fullest extent required by law, shall cooperate with and assist Borrower in fulfillment of such obligations. If Lender, as a result of actions of Borrower, shall be obligated to repay the Loan Program any amount of the Loan Proceeds, Borrower shall make such repayment on account of Lender and failure to do so shall be an Event of Default.
5.6. ECONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS. Borrower shall comply with , and, cause the General Contractor and all contractors and subcontractors to comply with, the Economic Opportunity Employment Requirements attached hereto as Exhibit 9, as amended from time to time at Lender’s sole and absolute discretion . For the avoidance of doubt, the Economic Opportunity Employment Requirements shall impose separate obligations that are supplemental and in addition to the obligations imposed upon Borrower by the Loan Documents, including without limitation, the Funding Requirements and Section 11.3 hereof, and in no event shall be construed as conflicting with, or a substitute for , any obligations imposed upon Borrower in any of the Loan Documents.
5.7. ANNUAL ADMINISTRATIVE FEE. Borrower agrees to pay an annual administrative fee (“Fee”) to Lender as compensation for monitoring compliance with regulatory restrictions and the administration of the Loan. Borrower shall pay annually a Fee equal to One Hundred and No/100 Dollars ($100.00) for each unit assisted by the Loan Program, not to exceed an annual amount of Fifteen Thousand Dollars and No Cents ($ 15,000.00) per project. Fee payments shall be payable to Lender on the Closing Date for the prorated semiannual period commencing on the Closing Date to and including May 31, 2022, and in equal semiannual installments on a prospective basis each June 1 and December 1 of each year thereafter throughout the term provided in the Regulatory Agreement.
6. LOAN. Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, an amount not to exceed the Loan Amount, to finance the development of the Project an d for other purposes as specified in the Scope of Development, subject to the terms, conditions, representations, warranties, and covenants in this Loan Agreement.
6.1. PRINCIPAL AMOUNT. The principal amount of the Loan shall be the actual disbursements of Lender on account of the Project, not to exceed the amounts stated in the Budget (as the Budget may be adjusted by written approval of Lender).
In any event, the principal amount of the Loan shall not exceed the Loan Amount.
6.2. USE OF LOAN FUNDS. Loan funds s hall be used solely for payment of the costs of construction of the Project in accordance with the Plans and Specifications, for permanent financing , and for other purposes as specified in this Loan Agreement.
6.3. LOAN TERMS. The Loan is made pursuant to the Loan Program and is subject to the laws, rules and regulations of the Loan Program. Lender agrees to disburse the Loan Proceeds in the manner and subject to the limitations stated in this Loan Agreement. Interest, at the Interest Rate, shall accrue on each disbursement of Loan Proceeds commencing on the date on which each such disbursement is made. Repayment of the loan shall be made, in payments of principal and interest, in lawful tender of the United States, in accordance with the Payment Schedule.
6.4. CLOSING IN ADVANCE OF SENIOR LOAN. Lender will subordinate this Loan to the senior loan, provided that the senior loan does not require modification of this Loan Agreement or Lender’s entry into any agreements containing new or modified Loan terms.
6.5. NOTE AND SECURITY DOCUMENTS. The Loan is evidenced by the Note executed by Borrower in favor of Lender and delivered to Lender upon Close of Escrow. Repayment of the Note is secured by the Trust Deed covering the Property and the Project. Borrower shall exe cute the Trust Deed in favor of the Title Company as Trustor in trust for the benefit of Lender and deliver it to Escrow for recordation. The Loan is also secured by the Additional Collateral, if any, as evidenced by the applicable Security Documents.
6.6. SECURITY AGREEMENT. This Loan Agreement is a "security agreement" within the meaning of the Uniform Commercial Code. Borrower by executing and delivering this Loan Agreement has granted and hereby grants to Lender, as security for the Loan, a security int erest in the Additional Collateral to the full extent that the Additional Collateral may be subject to the Uniform Commercial Code. Borrower irrevocably appoints Lender as its true and lawful limited attorney -in- fact solely to execute and deliver any and all financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to Lender a valid perfected security interest in the Additional Collateral .
Borrower agrees to perform all acts which Lender ma y reasonably request so as to enable Lender to maintain such valid perfected security interest in the Additional Collateral in order to secure the payment of the Note in accordance with their
Construction and Permanent Loan Agreement - HAF Loan Page 8 Mirasol Village Block C
terms. Lender is authorized to file a copy of any such financin g statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant to this Loan Agreement. Lender may require at any time, and from time to time additions of new contracts and o ther property to the Additional Collateral. Borrower irrevocably assigns to Lender, effective upon Lender’s written demand, as security for the due performance of this Loan Agreement all of its right, title, and interest in the Assigned Documents.
6.7. REGULATORY AGREEMENT. The Regulatory Agreement imposing covenants, conditions and restrictions running with the land is a material consideration for the making of the Loan. Borrower shall execute the Regulatory Agreement prior to Close of Escrow and deliver it to Escrow for recordation. Violation of the Regulatory Agreement is an Event of Default of this Loan.
6.8. ESCROW. The parties shall open the Escrow promptly after the Effective Date. Escrow shall close as provided in the Escrow Instructions on or before the Closing Date.
6.9. COMMISSIONS. Lender is not responsible, by this Loan Agreement or otherwise, to pay commissions in relation to this transaction.
7. TITLE INSURANCE. Borrower must procure and deliver to Lender an ALTA Lender's Policy of Title Insurance, together with such endorsements as Lender may require, including but not limited to CLTA endorsement nos. 100, 102.5/102.7 and 116 insuring Agency in an amount equal to the principal amount of the Loan, that Lender 's Trust Deed constitutes a third lien or charge upon the Property and improvements subject only to such items as shall have been approved by Lender. There must be no exceptions permitted for mechanics liens. Title insuran ce for the Loan must be issued by a title insurer approved by Lender.
8. PERFORMANCE CONDITIONS. The following are conditions precedent to performance under this Loan Agreement:
8.1. CONDITION OF TITLE. Lender shall cause Escrow Agent to issue to Borrower (with a copy to Lender) the Preliminary Report, together with copies of all do cuments relating to title exceptions referred to in the Preliminary Report.
At Close of Escrow, Lender’s Trust Deed shall be a valid lien against the Property securing the Loan and subject to no exceptions to title (of record or off record) other than th e exceptions listed in the “Conditions of Title” in the Escrow Instructions.
8.2. CONDITIONS TO LENDER'S PERFORMANCE. Lender's obligation to perform under this Loan Agreement is subject to all of the following conditions: (a) Borrower has performed all of its obligations then to be performed pursuant to this Loan Agreement; (b) Borrower has met the Additional Conditions to Close of Escrow and applicable Special Provisions, if any; (c) the closing conditions as defined in the Escrow Instructions have been fulfi lled as of Close of Escrow; (d) Borrower’s representations and warranties in this Loan Agreement are true and correct as of the date of this Loan Agreement and as of Close of Escrow; (e) this Loan Agreement continues to be in full force and effect, no defa ult on the part of Borrower has occurred under this Loan Agreement, and no event has occurred that, with the giving of notice or the passage of time, will constitute a default by Borrower under the Loan Agreement; and (f) Lender has approved the Approval D ocuments.
8.3. CONDITIONS TO BORROWER'S PERFORMANCE. Borrower's obligation to perform under this Loan Agreement is subject to satisfaction of all of the following conditions: (a) the closing conditions as defined in the Escrow Instructions have been fulfilled as of Close of Escrow; (b) Lender has met the Conditions to Close of Escrow; (c) Lender’s representations and warranties in this Loan Agreement are true and correct as of the Close of Escrow; and (d) no event has occurred that, with the giving of notice or the passage of time, will constitute a default by Lender under this Loan Agreement.
9. [INTENTIONALLY DELETED]
10. ADDITIONAL SECURITY INSTRUMENTS. Upon request by Lender, Borrower shall execute and deliver to Lender a security instrument in favor of Lender naming as secured property all contracts related to the Project and all other property of any kind owned by Borrower and used primarily in connection with the Property. Lender may, at any time and from time to time may reasonably require additions of new contracts and other property. Borrower irrevocably assigns to Lender, effective upon Lender’s written demand, as security for the due performance of this Loan Agreement all of its right, title, and interest in the Assigned Documents.
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11. CONSTRUCTION. As a condition of the Loan, Borrower will diligently proceed with construction in accordance with the Scope of Development as approved by Lender. Borrower shall complete such work on or before the Completion Date, subject to Unavoidable Delay.
11.1. CHANGES. In order to assure sufficient funding for the Project, Borrower shall not authorize any Change without the prior written consent of Lender. If in the judgment of Lender, a Change, together with all other Changes contemplated or previously approved by L ender, will cause an increase in the cost of the Project in excess of the contingency reserve identified in the Budget, then Borrower will, as a condition precedent to Lender's consent, provide Lender with proof that the contingency reserve has been increased as necessary to pay for all such Changes. Borrower will submit any such Change to Lender for approval on a form acceptable to Lender, together with approvals by the Project Architect, if any, and the General Contractor. Borrower shall maintain funds available in the contingency reserve that are in substantially the same percentage of the original contingency reserve as the percentage of the Project then remaining to be completed.
11.2. CONTRACTORS AND CONTRACTS. All contracts, subcontracts, contractors, and subcontractors shall be subject to Lender's approval prior to the Closing Date. Lender also reserves the right to require performance and material payment bonds on any or all contractors, or in lieu of bond a letter of credit acceptable in form and substance to Lender, as it determines to its sole satisfaction. Upon Lender’s request, Borrower will furnish to Lender correct lists of all contractors , subcontractors and material suppliers employed in connection with the Project, specifying their address es, their respective portion of the Project and their respective Project cost. Lender may contact directly each contractor, subcontractor, and material supplier to verify the facts disclosed by the list or for any other purpose related to the Loan. All c ontracts by Borrower or its contractors relating to the Project will require terms sufficient to permit disclosure to Lender of any information Lender deems, in its sole determination, necessary to make such verifications.
11.3. NO DISCRIMINATION DURING CONSTRUCTION. Borrower for itself, the general contractor and their respective successors and assigns, agrees that the following provisions shall apply to, and be contained in all contracts and sub-contracts for the construction of the Project:
11.3.1. EMPLOYMENT. Bo rrower shall not discriminate against any employee or applicant for employment because of sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation. Borrower will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex, race, color, religion, ancestry, national origin, disability, medical conditi on, marital status, or sexual orientation. Such action shall include, but not limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Borro wer agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by Lender setting forth the provisions of this nondiscrimination clause.
11.3.2. ADVERTISING. Borrower will, in all solicitations or advertisem ents for employees placed by or on behalf of Borrower, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, creed, sex, marital status, national origin, ancestry, familial status, or disabil ity.
11.3.3. MONITORING PROVISIONS. Borrower, the General Contractor and subcontractors shall comply with the requirements of Lender for monitoring the anti-discrimination and all applicable labor requirements.
11.4. INSPECTION. Lender may , at any time and without notice to Borrower, enter on the Property and inspect the Project; and, during regular business hours, examine the books, records, accounting data, plans, shop drawings, specifications, and other documents of Borrower pertaining to the Project and to make extracts or copies. Borrower shall make all such documents available to Lender promptly on demand. Borrower agrees to cooperate fully (and to cause the General Contractor to cooperate fully) with Lender and its Lender's designated agent and to permit all appropriate access to the Property and to all relevant books and records. Borrower shall bear the cost of reasonable inspections, except that Lender shall bear its costs of inspection. If however, Lender’s inspection discovers issues of a nature that req uire further third -party review or investigation, Borrower shall bear the costs of such third party review.
11.5. PROTECTION AGAINST LIEN CLAIMS. Borrower shall promptly and fully discharge all claims for labor, materials and services in connection with the Project. Borrower shall promptly file a valid Notice of Completion on completion of the Project. Borrower shall promptly file a Notice of Cessation in the event of a cessation of labor on the Project for a continuous Period of (30) days or more. Borrower shall take all other reasonable steps to protect against the assertion of lien claims
Construction and Permanent Loan Agreement - HAF Loan Page 10 Mirasol Village Block C
against the Property. Within ten (10) days after the filing of any claim of lien against the Property, Borrower shall record a surety bond in the office of the Recorder of the County where the Property is located in an amount sufficient to release the claim of lien or deliver to Lender any other assurance as may be acceptable to Lender as evidenced by Lender's written acceptance of such assurance.
11.5.1. Lender, at any time, ma y require Borrower to obtain a lien waiver with respect to each payment to the General Contractor and each payment by the General Contractor or Borrower to each of the various subcontractors and material suppliers. Lender, at any time, may require Borrowe r to make any payments for the Project by joint check made payable to the General Contractor and subcontractor for whose account the payment is to be made, as joint payees.
11.5.2. In any event, Borrower is not required to pay, prior to adjudication, any claims for labor, materials, or services that Borrower, in good faith, reasonably disputes, and that Borrower, at its own expense, is currently and diligentl y contesting in the proper forum, provided that Borrower has filed the surety bond or given Lender such ot her assurance as Lender accepts in writing.
11.6. PAYMENT AND PERFORMANCE BONDS. As a condition precedent to beginning construction of the Project, Borrower shall provide Lender a performance bond and a labor and material payment bond obtained by Borrower or its general contractor in favor of Borrower and Lender as named dual obligees, in form and amount as approved by Lender and securing, respectively, completion of the work and payment of all labor and material suppliers and subcontractors for the work as stated in the construction contract for the Project. The bonds shall be written with a surety listed as acceptable to the federal government on its most recent list of suretie s. Borrower shall assure compliance with all requirements of the surety.
Borrower shall permit no changes in the work to be performed by the general contractor and shall make no advance payments to the general contractor without prior written notice to the surety and Lender, if such change or payment could release the surety of its obligations under the bonds.
11.7. SECURITY INSTRUMENTS. Upon request by Lender and subject to the security interests of lender whose loan is secured by the Property and senior to Lender’s security interest in the Property, Borrower shall execute and deliver to Lender a security instrument in favor of Lender naming as secured property all contracts related to the Project and all other property of any kind owned by Borrower and used primarily in connection with the Property. Lender may require such instrument at any time, and from time to time may require additions of new contracts and other property. Borrower irrevocably assigns to Lender, effective upon Lender’s written demand, as security for the due performance of this Loan Agreement all of its right, title, and interest in the Assigned Documents.
11.8. OTHER LENDER DRAW. Borrower shall concurrently submit to Lender any Other Lender Draw. Delivery of such Other Lender Draw shall be made in the same manner as any other notice, except that it shall also be marked “OTHER LENDER DRAW REQUEST” and delivered to the person named in writing by Lender as the recipient of such requests or, in the absence thereof, to Lender’s Portfolio Manageme nt office. Borrower shall provide Lender with true, accurate and correct copies of each Other Lender Draw, if any, including without limitation all supporting information, documents, and other required submittals. Lender shall have the right to reject an Other Lender Draw by providing Borrower written notice via e-mail or in the same manner as any other notice no later than twenty-one (21) days after Lender’s receipt of such request for: failing to comply with the Loan ; for changing the Project in any mat erial way; or for impairing the ability of Lender to enjoy the practical realization of its rights under the Loan and its related instruments. If Lender rejects an Other Lender Draw, Borrower shall withdraw the notice for such Other Lender Draw and shall not accept and shall return to Lender any disbursement on account of such Other Lender Draw. If Lender fails to reject an Other Lender Draw within the time period specified above, such failure shall be deemed Lender’s approval of such Other Lender Draw.
11.8.1. ACKNOWLEDGMENT OF RELIANCE. Borrower acknowledges that Lender is making Loan disbursements in advance of disbursements of other lenders in reliance upon Borrowers compliance with this provision.
11.8.2. LIQUIDATED DAMAGES. IF BORROWER FAILS TO PROVIDE TO LENDER ANY OTHER LENDER DRAW, AS AND WHEN REQUIRED UNDER THIS LOAN AGREEMENT, LENDER SHALL BE IRREP ARABLY HARMED IN THA T BORROWER’S ABILITY TO REPAY THE LOAN AND LENDER’S SECURITY FOR THE LOAN SHALL BE IMPAIRED TO AN UNKNOWN EXTENT. BORROWER AND
LENDER AGREE THAT IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFIC ULT TO FIX ACTUAL RE SULTING DAMAGES IN S UCH EVENT. BORROWER AND LENDER, THEREFORE, AGREE THAT AN AMOUNT EQUAL TO TWO PERCENT (2%) OF THE LOAN AMOUNT
SHALL CONSTITUTE LIQ UIDATED DAMAGES PAYABL E TO LENDER ON ACCOUNT OF SUCH EVENT, RECEIPT OF WHICH SH ALL CONSTITUTE THE EXCLUSIVE REMEDY OF LENDER FOR SUCH EVENT, AND ONLY FOR SUCH EVENT. PAYMENT OF SAID AMOUNT
TO LENDER AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT INSTEAD, IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO LENDER PURSUANT
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TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE. SAID AMOUNT SHALL BE IMMEDIATELY DUE AND PAYABLE AS OF THE DATE ON WHICH BORROWER DELIVERED SUCH OTHER LENDER DRAW TO THE OTHER LENDER. LENDER SHALL HAVE THIRTY (30) DAYS AFTER RECEIVING ACTUAL NOTICE OF S UCH EVENT TO NOTIFY BORROWER IN WRITING T HAT LIQUIDATED DAMAGES UNDER THIS SECTION ARE DUE. BORROWER SHALL HAVE F IFTEEN (15) DAYS AFTER SUCH WRI TTEN NOTIFICATION
TO CURE THE DEFAULT BY WITHDRAWING THE OTHER LENDER DRAW AND RETURNING ANY DISBURSEMENT ON ACCOUNT OF SUCH OTHER LENDER DRAW. IF BORROWER FAILS TO PAY LIQUIDATED DAMAGES WHEN DUE UNDER THIS SECTION, THE LOAN SHALL BE ALL DUE AND PAYABLE AT THE ELECTION OF LENDER.
_____ Lender’s Initials
_____ _____ Borrower’s Initials
11.9. PROJECT SIGN. If Borrower places a sign on the Property during construction stating the names of the Project participants, it shall also name Lender as a participant in the Project. Lender’s name on the sign shall be in letters not less than size of letters used to name any of the other participants.
11.10. NO PRIOR LIENS. Borrower shall not allow the Project construction to begin or materials to be delivered to the Project until after Close of Escrow.
11.11. PREVAILING WAGES. In accordance with Labor Code Section 1720(c)(6)(E)), so long as the public subsidy for the Project consists of below market rate loans, and the Project restricts occupancy on at least 40% of the units for at least 20 years to individuals or families earning no more than 80% of the area median income, the Project is not subject to prevailing wages. Borrower represents to Lender that Borrower has obtained no public subsidy for the Project that does not meet such criteria. If Borrower obtains other non -qualifying public subsidy, Borrower shall pay prevail ing wages for the Project.
Therefore, Borrower indemnifies, holds harmless and defends Lender from all additional wages, benefits, fees, penalties, fines, legal fees, court costs, arbitration costs, and other costs arising from the improper application of California prevailing wage laws to the Project by Borrower or General Contractor or both of them.
12. LOAN DISBURSEMENT PROCEDURES.
12.1. CONDITIONS PRECEDENT TO EACH LOAN DISBURSEMENT. The obligation of Lender to make any disbursements of Loan Proceeds shall be subject to the following conditions precedent:
12.1.1. No Event of Default or Potential Default of Borrower has occurred and is continuing;
12.1.2. If requested by Lender, Borrower has furnished to Lender, as a Project cost, an endorsement to the Title Policy showing no intervening liens or encumbrances on the Property and insuring the full disbursement, together with a satisfactory report under the California Uniform Commercial Code showing no liens or interests other than those of Lender;
12.1.3. Borrower has obtained an d maintained, and Lender has approved a loan approval from a financial institution or other lender approved by Lender in its sole discretion, to make the permanent financing obtained by Borrower, or has obtained commitments to issue bonds, which repays aft er completion of the Project all construction and other loans secured by the Project and which is secured by a senior lien against the Property. Such permanent financing approval must provide: (a) that it is subject only to those conditions that are usual and customary in the industry and that can be satisfied by the proposed closing date of the permanent financing; (b) that it is in full force with no default by any party; (c) any such loan approval or commitments for financing shall not require modification of the Loan Documents, or any term of this commitment letter, (d) any such loan approval or commitments shall not be based upon sources and uses of Project funds that are different from those approved by Lender for the Project, and (e) that Lender will have notice of, and a reasonable opportunity to cure, any Borrower defaults;
12.1.4. Lender is satisfied that all completed work has been done using sound, new materials and fixtures, in a good and proper manner, and all materials, fixtures, and furnishings inst alled on or acquired for the Property will be owned by Borrower free of any liens, encumbrance, or other interests of any kind other than Lender's lien or security interest;
12.1.5. The representations and warranties in the Loan Documents are correct as of the da te of the requested disbursement;
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12.1.6. Borrower has paid Lender all commitment, loan, and other fees then due, and Borrower has submitted to Lender all documents, records, statements, certificates, reports, and other materials and information then required to be submitted to Lender for approval under this Loan Agreement;
12.1.7. Borrower shall provide assurances, satisfactory to Lender in its sole discretion, that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitoring such remediation; and
12.1.8. Borrower has delivered to Lender all funds, documents, instruments, policies, evidence of satisfact ion of conditions, and other materials then due or otherwise requested by Lender under the Loan Documents.
12.2. CONDITIONS PRECEDENT TO FIRST DISBURSEMENT. Borrower’s request for the first disbursement of Loan Proceeds (the “First Disbursement”) is a representation and warranty by Borrower that there has been no material adverse change in Borrower’s financial capacity or in any representation made to Lende r in Borrower’s application for the Loan or Borrower’s supporting documentation. Lender shall make the First Disbursement when the following conditions precedent and the conditions precedent stated in Section 12.1 have been met:
12.2.1. There is no legal action threatened or pending against Borrower or affecting the Property or any Additional Collateral;
12.2.2. All conditions to Close of Escrow have been satisfied in accordance with the Loan Agreement;
12.2.3. Borrower has obtained and Lender has approved a loan approval from a financial institution or other lender approved by Lender in its sole discretion, to make the permanent financing obtained by Borrower, or has o btained commitments to issue bonds, which repays after completion of the Project all construction and other loans secured by the Project and which is secured by a senior lien against the Property. Such permanent financing approval must provide: (a) that it is subject only to those conditions that are usual and customary in the industry and that can be satisfied by
the proposed closing date of the permanent financing; (b) that it is in full force with no default by any party; and (c) that Lender will have notice of, and a reasonable opportunity to cure, any Borrower defaults;
12.2.4. Borrower has provided proof of all insurance required by the Loan Documents;
12.2.5. The construction lender’s commitment to make a construction loan is in full force, has not been modified and no event has occurred that with notice or the passage of time or both could result in the termination of it. Nothing in the permanent loan commitment, or submissions and approvals made under it, conflicts with this Loan Agreement. Borrower has done all things necessary to keep unimpaired its rights under the loan commitment for the construction lender’s construction loan;
12.2.6. Borrower has filed all tax returns required to be filed and paid all taxes due, which, if unfiled or unpaid, might adversely affect Lender’s security under the Security Documents; and
12.2.7. Borrower must request the First Disbursement consistent with the terms and conditions of this Loan Agreement no later than 11 months following the Effective Date of this Loan Agreement.
12.3. CONDITIONS PRECEDENT TO FINAL DISBURSEMENT. Lender shall make the final loan disbursement under this Loan Agreement when the following conditions precedent and the conditions precedent stated in Section 12.1 have been met:
12.3.1. As applicable, the Project architect and Lender’s designated agent will have certified to Lender, on AIA Form G704 and in a manner satisfactory to Lender:
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a. That the Project has been duly completed in a good and proper manner using sound, new materials;
b. That the Project complies with the Plans and Specifications, the requirements of all Governmental Authorities and any other party having enforceable rights regarding the construction of the Project; and
c. That the Project is structurally sound.
12.3.2. Borrower has provided to Lender a true, accurate and complete copy of the final draw request to all other lenders for the Project;
12.3.3. Borrower has filed all tax returns required to be filed and paid all taxes due, which, if unfiled or unpaid, might adversely affect Lender’s security under the Security Documents;
12.3.4. Title policy endorsements in form and amount satisfactory to Lender (including an endorsement insuring lien-free completion of the Project) have been furnished to Lender;
12.3.5. Borrower has furnished evidence, in form and substance satisfactory to Lender, that:
a. The General Contractor and subcontractors and material suppliers and their subcontractors and material suppliers have been paid in full
b. Borrower has obtained final certificates of occupancy for all of the Project;
c. All other permits and approvals necessary for the construction, equipping, management, operation, use, or ownership of the Project have been obtained, subject only to those conditions approved by Lender, and
d. The completed Project complies with all applicable zoning regulations, subdivision map acts, building code provisions, and similar governmental laws an d regulations, and has all utilities and adequate ingress and egress from public streets, that evidence to be in the form of a certificate executed by Borrower in favor of Lender.
12.3.6. That Borrower has provided to Lender an inventory showing make, model, valu e, cost, and location of all furniture, fixtures, and equipment and other personal property of a value in excess of $1,000 and used in the management, maintenance, and operation of the Project, that are included in the collateral for the Loan;
12.3.7. Borrower has filed a notice of completion of the Project necessary to establish the commencement of the shortest statutory period for filing of mechanics' and materialmen's liens;
12.3.8. Lender has received written approval from the surety on any bond required by Lender;
12.3.9. Borrower has submitted to Lender a final cost certification prepared by a CPA; and
12.3.10. Borrower must request Final Disbursement consistent with terms and conditions of this Loan Agreement no later than 3 years and 11 months following the Effective Date of t his Loan Agreement. If Borrower failures to request Final Disbursement consistent with the terms and conditions of this Loan Agreement within 3 years and 11 months of the Effective Date the remaining funds will be recaptured.
12.4. MAKING DISBURSEMENT. Lender shall pay each disbursement request within twenty (20) business days after the disbursement request is submitted to Lender, subject to fulfillment of the conditions precedent as stated in Section 12.1.
Lender shall disburse the actual cost of the work represented in the disbursement request by Borrower, reduced by the cost of work included in the request and not satisfactorily completed and by the amount of the Retention to be withheld.
12.5. DISBURSEMENT OF LESS THAN FULL REQUEST. If Lender makes a disbursement which is less than the full amount of the disbursement requested, Lender shall inform Borrower of the items disallowed for disbursement and the reason for
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disallowing them. Lender shall disburse the Loan in the following order of priority, except as expressly provided and unless paid by Borrower from other funds: (a) first, to pay Lender's Loan fees and expenses due; (b) second, to pay Lender the interest due on the Loan; (c) third, at Lender's option to pay all impositions due; (d) fourth, at Lender's option, to make any other payments that Lender may in its sole discretion deem necessary or advisable to protect Lender's security under the Loan Documents; and (e) fifth, to make the disbursement of funds then due in response to Borrower’s current request for disbursement. For purposes of this section, impositions means all real estate and personal property taxes and other taxes and assessments, water and sewer rates and charges, and all other charges of a Governmental Authority and any interest or costs or penalties with respect to them, ground rent and charges for any easement or agreement maintained for the benefit of the Property, of every nature and any kind that at any time may be assessed, levied, imposed, or become a lien on the Property, Fixtures or income received from the Property or Fixtures, or any use or occupancy of the Property; and any charges, expenses, payments, or assessments of any nature that are or may become a lien on the Property or the income received from it.
12.6. NO WAIVER BY DISBURSEMENT. Regardless of the failure of any condition precedent to Lender's obligation to make disbursements to Borrower, Lender may make a disbursem ent if Lender, in its sole discretion, determines it to be advisable. The making of any disbursement shall not be deemed to constitute an approval or acceptance by Lender of the work completed or a waiver of the condition with respect to a subsequent disbursement.
12.7. COMPLIANCE. To the best of Borrower's knowledge, the construction, use, and occupancy of the Property and Project comply in full with, or if built according to the Plans and Specifications, will comply in full with, all Governmenta l Requirements. No right to construct or use the Project is to any extent dependent on any real property other than the Property.
All approvals, licenses, permits, certifications, filings, and other actions normally accepted as proof of compliance with al l Governmental Requirements by prudent lending institutions that make investments secured by real property in the general area of the Property, to the extent available as of the date of this Loan Agreement, have been given or taken, or Borrower is entitled to have them given or taken as the ministerial act of the applicable Governmental Authority.
13. RESIDENTIAL OPERATIONS.
13.1. VERIFICATION OF NET INCOME. When requested by Lender, Borrower shall provide certified financial statements and such other evidence as Lender may deem necessary to verify the Project net income, including without limitation copies of certified rent rolls, bank statements, billing statements and invoices.
13.2. SECURITY AND LIGHTING. Project shall include a security camera system approved by Lender a nd lighting adequate to properly illuminate the parking area and all common spaces. In addition, Project will include security patrol, if necessary.
13.3. RESIDENT SERVICES PLAN: Borrower shall provide Lender with a detailed resident services plan including but not limited to the following information: (1) identification of all entities responsible for providing resident services to Proje ct tenants and each entity’s role in the provision of those services; (2) a description of the services to be provided; and (3) a pro forma resident services budget. Such resident services plan will not be approved by Lender if it fails to provide for a minimum of fifteen (15) hours of services per week, including but not limited to:
(1) Coordinator: Four (4) hours per week (maximum)
(2) After School Programming: Eight (8) hours per week (two hours per day and four days per week minimum) (3) Additional Programming: Balance of minimum three (3) hours per week shall include, but are not limited to:
(a) Workforce development support and activities
(b)Education classes such as nutrition, exercise, health resources, health insurance application assistance, annual on- site health fairs, and English as a Second Language (ESL) classes; (c) Socialization activities such as bingo, gardening, and community building events; and/or (d) Other services such as transportation assistance, counseling assistance, and employee readiness and job search assistance.
13.4. SMOKE FREE ENVIRONMENT. All residential units and indoor common areas must be smoke free.
14. DEFAULT.
14.1. EVENTS OF DEFAULT. At the option of Lender, each of the following events will constitute an Event of Default, subject to applicable cure rights, if any:
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14.1.1. Borrower’s non-performance of any obligation or breach of this Agreement;
14.1.2. The occurrence of an event of default under any of the Loan Documents;
14.1.3. The occurrence of a breach or default under those certain loan documents entered into by and between California Department of Housing and Community Development and B orrower evidencing the permanent financing arrangement for the Project;
14.1.4. Subject to Borrower’s legal rights to contest a Governmental Requirement, Borrower's failure to comply with any Governmental Requirement, unless within ten (10) days after notice of s uch failure by Lender or the respective governmental entity or after any action has been commenced to enforce such requirement, Borrower has cured such failure;
14.1.5. Borrower's failure to keep in full force any permit, license, consent, or approval with respec t to the construction, occupancy, or use of the Project, unless within ten (10) days after notice by the issuing entity or Lender of such failure, Borrower has promptly cured such failure;
14.1.6. Any material deviation from the Plans and Specifications in the co nstruction of the Project, or the appearance or use of defective workmanship or materials in the construction of the Project, if Borrower fails to remedy them or to diligently proceed to remedy them to Lender's satisfaction within ten (10) days after Lende r's written demand to do so;
14.1.7. Borrower's failure to complete the construction of the Project by the Completion Date;
14.1.8. The filing of any lien against the Property or Project or the service on Lender of any bonded stop notice related to the Loan, if the claim of lien or bonded stop notice continues for thirty (30) days without discharge, satisfaction, or the making of provision for payment (including bonding) to the satisfaction of Lender;
14.1.9. The attachment, levy, execution, or other judicial seizure of any portion of the Property or Project, or any substantial portion of the other assets of Borrower, that is not released, expunged, bonded, discharged, or dismissed within thirty (30) days after the attachment, levy, execution, or seizure; and
14.1.10. Making of any unauthorized payment from Loan Proceeds or other funds of Lender.
15. REMEDIES.
15.1. OPTION TO ACT. On the occurrence of any Event of Default, in addition to its other rights in this Loan Agreement or in any of the other Loan Documents, at law, or in equity, Lender may, without prior demand, exercise any one or more of the following rights and remedies:
15.1.1. Terminate its obligation to make disbursements;
15.1.2. Declare the Note and all other sums owing to Lender with respect to the other Loan Documents immediately due;
15.1.3. Make any disbursements after the happening of any one or more of the Events of Default, without waiving its right to demand payment of the Note and all other sums owing to Lender with respect to the other Loan Documents or any other rights or remedies and without liability to make any other or further disbursements, regardless of Lender's previous exercise of any rights and remedies;
15.1.4. Proceed as authorized at law or in equity with respect to the Event of Default, and in connection with that, remain entitled to exercise all other rights and remedies described in this Loan Agreement or the Trust Deed; and
15.1.5. Recover its funds expended in exercising or enforcing any of its rights or remedies under any of the Loan Documents, together with interest at the maximum a mount allowed by law from the date the funds were spent until repaid which amounts will be deemed secured by the Trust Deed.
15.2. RIGHTS CUMULATIVE, NO WAIVER. All of Lender's rights and remedies provided in this Loan Agreement or in any of the other Loan Documents are cumulative and may be exercised by Lender at any time. Lender's exercise of any right
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or remedy will not constitute a cure of any Event of Default unless all sums then due to Lender under the Loan Documents are repaid and Borrower has cured all other Events of Default. No waiver will be implied from Lender's failure to take, or delay in taking, any action concerning any Event of Default or from any previous waiver of any similar or unrelated Event of Default. Any waiver under any of the Loan Documents must be in writing and will be limited to its specific terms.
15.3. DISCLAIMER. Whether Lender elects to employ any of the remedies available to it in connection with an Event of Default, Lender will not be liable to construct, complete, or protect th e Project; to pay any expense in connection with the exercise of any remedy; or to perform any other obligation of Borrower.
15.4. GRANT OF POWER. Subject to the prior rights of lenders whose loans are secured by the Property and senior to the rights of Lender, Borrower irrevocably appoints Lender as its attorney -in-fact, with full power and authority, including the power of substitution, exercisable on the occurrence of an Event of Default, to act for Borrower in its name, place, and stead as provided in this Loan Agreement, to take possession of the Property and Project, remove all employees, contractors, and agents of Borrower, to complete or at tempt to complete the work of construction, and to market, sell, or lease the Property and Project; to make any additions, changes, and corrections in the Plans as may be necessary or desirable, in Lender's sole discretion, or as it deems proper to complet e the Project; to employ any contractors, subcontractors, suppliers, architects, inspectors, consultants, property managers, and other agents that Lender, in its sole discretion, deems proper for the completion of the Project, for the protection or clearance of title to the Property or Personalty, or for the protection of Lender's interests, to employ security guards to protect the Property and Project from injury or damage; to pay, settle, or compromise all bills and claims then existing or later arising a gainst Borrower that Lender, in its sole discretion, deems proper for the completion of the Project, for the protection or clearance of title to the Property, or for the protection of Lender's interests; to prosecute and defend all actions and proceedings in connection with the Property or Project; and to execute, acknowledge, and deliver all other instruments and documents in the name of Borrower that are necessary or desirable, to exercise Borrower's rights under all contracts concerning the Property or P roject, and to do all other acts with respect to the Property or Project that Borrower might do on its own behalf, in each case as Lender in its reasonable discretion deems proper.
16. INSURANCE.
16.1. PROPERTY INSURANCE. Borrower shall procure and maintain property insurance in a form and substance approved by Lender. Coverage shall be for protection against loss of, or damage to the Property and its improvements to their full insurable value. Borrower shall also proc ure and maintain insurance against specific hazards affecting Lender's security for the Loan as may be required by Lender, governmental regulations, or any permanent lender. All such policies shall contain a standard mortgagee loss payable clause in favor of Lender. The insurance required shall be written with a deductible of not more than Twenty-Five Thousand Dollars ($25,000.00).
16.2. COMMERCIAL GENERAL LIABILITY AND OTHER INSURANCE. Borrower shall carry insurance as set forth below, effective prior to th e disbursement of the Loan, and such insurance shall be maintained in full force and effect at all times. Such insurance coverage must list Lender as an additional insured, and must be approved in writing by Lender prior to the disbursement of the Loan.
16.2.1. Commercial general liability insurance, in Insurance Services Office (ISO) policy form CG 00 01 or equivalent, with limits of liability not less than: $1,000,000 per occurrence, and $2,000,000 general aggregate, all per location of the project, such coverage to include contractual liability to include bodily injury, property damage and personal injury;
16.2.2. Personal injury insurance with the employment exclusion deleted, unless Lender gives prior written approval for the employment exclusion to remain in the policy;
16.2.3. Workers’ compensation and all other insurance required under applicable law, in the amount required by applicable law or by Lender, whichever amount is greater.
16.3 INSURANCE PROVISIONS. Each policy of insurance required under this Loan Agreement shall be obtained from a provider licensed to do business in California and having a current Best ’s Insurance Guide rating of A VII or better, which rating has been substantially the same or increasing for the last five (5) years, or such other equivalent rating, as may reasonably be approved by Lender’s legal counsel. Each policy shall contain the following provisions as applicable, unless otherwise approved by Lender’s legal counsel in writing in advance:
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16.3.1 ADDITIONAL INSURED. Borrower shall obtain a policy in ISO form CG 20 33 , or equivalent, naming Lender as additional insured under the Commercial General Liability Policy at the same limits as required above.
16.3.2 SINGLE PROPERTY INSURANCE. It is the intent of the parties that the Project have available all the specified insurance coverages. Borrower shall not provide insurance coverages that are considered in aggregate with other properties which Borrower owns or operates. The Lender may at its discretion permit an aggregate policy if Borrower has fully disclosed to Lender the other projects which will or may be considered in aggregate with the Project, and thereafter, Borrower shall immediately inform Lender of the change in or addition to any such projects. Nevertheless, Lender may, at any time require that the insurance coverage be provided solely for the Project.
16.3.3 CERTIFIED POLICY COPY. Borrower shall provide Lender with a certified copy of each required policy of insurance, upon request by Lender. Borrower shall provide Lender with a Certificat e of Insurance of Insurance for each policy on the applicable ACORD form. And, specific sections of the policy may be requested by Lender for review.
The ACORD form shall not substitute for the policy, if the policy is requested. The most current ACORD 25-S “Certificate of Liability Insurance shall be used for liability insurance.
16.3.4 CANCELLATION. Each policy shall bear an endorsement precluding cancellation or termination of the policy or reduction in coverage unless Lender has been given written notice of such intended action at least thirty (30) days prior to its effective date. In the alternative to such endorsement, Borrower will provide Lender with the cancellation clause and/or any amendatory endorsements that modify or change the policy cancellat ion clause of the insurance policies in force. It is Borrower’s responsibility to notify Lender of any notice of cancellation, non -renewal or non -payment of premium in accordance with your policy provisions. In the event insurance is cancelled or not rene wed, Borrower shall notify Lender within forty-eight (48) hours of such cancellation or non-renewal.
_____Borrower’s Initials
16.3.5 FAILURE TO MAINTAIN. If Borrower fails to obtain or maintain, or cause to be obtained and maintained, any insurance required b y this Loan Agreement, Lender shall have the right , upon five (5) days written notice and opportunity to cure to purchase the insurance on Borrower’s behalf, and Borrower shall promptly reimburse the full cost of such insurance to Lender. If Borrower fails to reimburse Lender for insurance, the amount of unpaid reimbursement shall bear interest, at the maximum rate permissible under the law, until paid.
16.3.6 BLANKET COVERAGE. Borrower’s obligation to carry insurance as required under this Section 16 may be satisfied by coverage under a “blanket” policy or policies of insurance (as the term is customarily used in the insurance industry); provided, however, that Lender shall nevertheless be named as an additional insured under such blanket policy or policies to the extent required by this Section, the coverage afforded Lender will not be reduced or diminished thereby, and all of the other requirements of this Section 16, including but not limited to subsection 16.3.2, with respect to such insurance shall otherwise be satisfied by such blanket policy.
17. MISCELLANEOUS.
17.1. NONRECOURSE. Notwithstanding any provision of this Loan Agreement or any document evidencing or securing this Loan, Borrower, and Borrower’s principals, partners, members, agents, officers, and successors in interest shall not be personally liable for the payment of the Loan or any obligation of the Loan.
17.2. CURE BY PARTY OTHER THAN BORROWER. Any lender whose loan is secured by the property, and any principal of Borrower may cure a default of the Loan, provided that such cure rights shall be the same as Borrower’s cure rights. Such other curing party must cure by the date on which Borrower was obligated to cure, except if Lender is obligated by this Loan Agreement to give separate notice to s uch other curing party, in which instance, the cure period shall begin when Lender makes such notice to such other curing party.
17.3. CONDEMNATION. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of all or any part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. In the event of a taking of all of the Property, the proceeds shall be applied to the sums provided by this Loan, subject to any claims of prior lienholder, with the excess, if any, paid to junior lienholders and
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Borrower, as they may determine. In the event of the partial taking of the Property, unless Borrower and Lender otherwise agree in writing, and subject to any claims of prior lienholders, there shall be applied to the sums secured by the Trust Deed such proportion of the proceeds as is equal to that proportion which the amount of the sums secured by the Trust Deed immediately prior to the date of taking bears to the fair market value of the Property immediately prior to the date of taking, with the balance of the proceeds paid to junior lienholders and Borrower, as they may determine.
If the condemnor offers to make an award or settle a claim for damages to the Property and: (1) the Property is abandoned by Borrower; or (2) after notice by Lender to Borrower of the condemnor’s offer, Borrower fails to respond to Lender within 30 days after the date such notice is mailed; Lender is authorized to collect and apply the proceeds, at Lender's option, either to restoration or repair of the Property or to the sums secured by the Trust Deed.
Unless Lender and Borrower otherwise agree in writing, any such appli cation of proceeds to principal shall not extend or postpone the due date of any payment or change the amount of such payment.
17.4. SUBORDINATION. Lender may subordinate this Loan to a senior loan, provided that any senior loan for the Project indicated in t he Budget meets all requirements of this Loan Agreement, and that such senior loan does not require modification of this Loan Agreement.
17.5. NATURE OF REPRESENTATIONS AND WARRANTIES. Borrower certifies to Lender that all representations and warranties made in this Loan Agreement and all other Loan Documents are true and correct in all material respects and do not contain any untrue statement of a material fact or omit any material fact necessary to make the representations and warranties not misleading. All representations and warranties will remain true and correct in all material respects and will survive so long as any of Borrower's obligations have not been satisfied or the Loan or any part of it remains outstanding, and for any applicable statute of limi tations period. Each request by Borrower for a disbursement will constitute an affirmation that all representations and warranties remain true and correct as of the date of that request. Each representat ion and warranty made in this Loan Agreement, in an y other Loan Documents, and in any other document delivered to Lender by Borrower will be deemed to have been relied on by Lender, regardless of any investigation, inspection, or inquiry made by Lender or any related disbursement made by Lender. The repre sentations and warranties that are made to the best knowledge of Borrower have been made after diligent inquiry calculated to ascertain the truth and accuracy of the subject matter of each representation and warranty.
17.6. NO WAIVER. No failure or delay on the part of Lender in exercising any right or remedy under the Loan Documents will operate as a waiver nor will Lender be estopped to exercise any right or remedy at any future time because of any such failure or delay. No express waiver will affect any m atter other than the matter expressly waived and that waiver will be operative only for the time and to the extent stated. Waivers of any covenant, term, or condition in this Loan Agreement will not be construed to waive any subsequent breach of the same covenant, term, or condition.
17.7. NO THIRD PARTIES BENEFITED. This Loan Agreement is made and entered into for the sole protection and benefit of the parties and their permitted successors and assigns, and no other Person will have any right of action or an y rights to funds at any time on deposit in any construction account or impound account, if established.
17.8. NO JOINT VENTURE, PARTNERSHIP, OR OTHER RELATIONSHIP. Nothing contained in this Loan Agreement or in any other document executed in connection with this Loan Agreement shall be construed as creating a joint venture or partnership between Lender and Borrower. Each Party is acting as an independent entity and not as an agent of the oth er in any respect. No relationship exists as between Lender and Borrower other than that of a lender and a borrower.
17.9. NOTICES. Borrower irrevocably appoints Lender as its agent (the agency being coupled with an interest) to file for record any notices of completion, cessation of labor, or any other notice that Lender deems necessary or desirable to protect its interests under this Loan Agreement or under the Loan Documents.
17.9.1. METHOD. All notices to be given under this Loan Agreement shall be in writing an d sent to the addresses stated above for the respective recipient by one or more of the following methods.
a. Certified mail, return receipt requested, in which case notice shall be deemed delivered three (3) business days after deposit, postage prepaid in the United States Mail;
b. A nationally recognized overnight courier, by priority overnight service, in which case notice shall be deemed delivered one (1) business day after deposit with that courier;
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c. Hand delivery with signed receipt for delivery from a p erson at the place of business of the receiving party and authorized to accept delivery for the receiving party, in which case notice shall be deemed delivered upon receipt, or
d. Telecopy, if a copy of the notice is also sent the same day by United States C ertified Mail, in which case notice shall be deemed delivered one (1) business day after transmittal by telecopier, provided that a transmission report is automatically generated by the telecopier reflecting the accurate transmission of the notices to rece iving party at the “Fax Number” given in the Escrow Attachment or to such other address as Borrower or Lender may respectively designate by written notice to the other.
17.9.2. SHORT TERM NOTICES. Notices, including requests for approval, requiring action in less than thirty (30) days may only be given by the foregoing overnight courier or hand delivery method, and shall include the following language on its face: “URGENT – TIME SENSITIVE – IMMEDIATE ACTION REQUIRED” and marked for delivery to Portfolio Management. Such notice shall include the time allowed under this Loan Agreement for action.
17.10. ACTIONS. Lender will have the right to commence, appear in, or defend any action or proceeding purpor ting to affect the rights, duties, or liabilities of the parties, or the disbursement of any funds under this Loan Agreement. In connection with that, Lender may incur and pay costs and expenses, including, without limitation, reasonable attorney fees.
Borrower agrees to pay to Lender on demand all these expenses, and if applicable, Lender is authorized to disburse funds from the construction account for that purpose. This Section does not apply to actions or proceedings between the parties.
17.11. SIGNS. Borrower agrees that on the request of Lender, Borrower will erect and place on or in the immediate vicinity of the Property a sign indicating that Lender has provided construction financing for the Project, which sign shall remain for the duration of cons truction. If Borrower places a sign on the Property during construction stating the names of the Project participants, it shall also name “Sacramento Housing and Redevelopment Agency” as a participant in the Project.
Lender’s name on the sign shall be in letters not less than size of letters used to name any of the other participants.
17.12. ASSIGNMENT. The terms of this Loan Agreement will be binding on and inure to the benefit of successors and assigns of the parties. However, Borrower shall not assign this Loan Agreement or any interest it may have in the monies due or, except as otherwise provided, convey or encumber the Property without the prior written consent of Lender to a party other than a general partner or managing member of Borrower or a single a sset entity wholly owned and controlled by Borrower or a general partner or managing member of Borrower. However, if there is an assignment, conveyance, or encumbrance, Lender may nevertheless at its option continue to make disbursements under this Loan Agreement to Borrower or to those who succeed to Borrower's title, and all sums so disbursed will be deemed to be disbursements under this Loan Agreement and not modifications, and will be secured by the Security Documents. Lender may at any time assign th e Loan Documents to any affiliate of Lender or to a national bank or other lender having experience with construction lending, and the assignee will assume the obligations of Lender, and Lender will have no further obligation of any nature. In that case, the provisions of this Loan Agreement will continue to apply to the Loan, and the assignee will be substituted in the place and stead of Lender, with all rights, obligations, and remedies of Lender, including, without limitation, the right to furthe r assign the Loan Documents. In addition, Lender may at any time assign a participation in the Loan to any other party, provided that Lender continues to be primarily obligated under this Loan Agreement.
17.13. ACCELERATION ON OR REFINANCING OF THE PROPERTY; ASSUMPTION. Except as otherwise provided in the Loan Agreement, if all or any part of the Property or an interest in the Property is sold, transferred or conveyed to any person, or refinanced by Borrower such that additional debt is added to the Property or the cash flows change without Lender's prior written consent, Lender may, at Lender's option, declare all the sums secured by the Trust Deed to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the sale or transfe r, Lender and the Person to whom the Property is to be sold or transferred reach agreement in writing that the Loan may be assumed.
If Lender has waived the option to accelerate provided in this Section and if Borrower's successor in interest has execute d a written assumption agreement accepted in writing by Lender, Lender shall release Borrower from all obligations under the Trust Deed and the Note.
17.14. PERMITTED REFINANCING. Notwithstanding anything herein to the contrary, at any time during the twenty- four month period prior to and ending on the maturity date of the Senior Loan (as defined below), Borrower shall have the right without the consent of Lender to refinance the Senior Loan with a new loan on substantially the same terms in an original principal amount not to exceed the outstanding principal balance of the Senior Loan on the date of the refinancing. If the
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Senior Loan is refinanced in accordance with the preceding sentence, Lender agrees that the Loan is and shall remain subordinate to the Senior Loan as refinanced to evidence such subordination by executing a subordination agreement with respect to such substitute senior loan first mortgage or deed of trust in connection therewith in form reasonably satisfactor y to the Lender. Refinan cing of the senior loan on other than the above terms shall be permitted only with the prior written consent of the Lender, which shall not be unreasonably withheld. As used herein “ Senior Loan” means the permanent loan in a principal amount not to exceed Nine Million Dollars and No Cents ($9,000,000.00) to be made to Borrower by Citibank N.A., and its successors and assigns. (the “Senior Lender”).
17.15. PREPAYMENT. Borrower may prepay the Loan only on and subject to the terms and conditions in the Note.
Borrower shall have no rights to receive, and under no circumstances will Borrower receive repayment of any fees previously paid to Lender.
17.16. BORROWER'S RESPONSIBILITIES. To prevent and avoid construction defects, Borrower shall inspect, review, supervise, and assure the high quality, adequacy, and suitability of: (i) the Plans and Specifications and all changes and amendments; and (ii) architects, contractors, subcontractors, and material suppliers employed or used in the Project, and the workmanship of and the materials used by all of them; and (iii) the progress and course of construction and its conformance with the Plans and Specifications and any amendments, alterations, and changes that may be approved by Lender. Borrower will, at Borrower's expense, defend, indemnify, save, and hold Lender harmless against all claims, demands, losses, expenses, damages (general, punitive, or otherwise), and causes of action (whether legal or equitable) asserted by any Person arising out of the use of the proceeds of t he Loan. Borrower will pay Lender on demand all claims, judgments, damages, losses, or expenses (including attorney fees and expenses) incurred by Lender as a result of any legal action arising out of the use of the proceeds of the Loan. The provisions o f this Section will survive the termination of this Loan Agreement and the repayment of the Loan.
17.17. NONLIABILITY FOR NEGLIGENCE, LOSS, OR DAMAGE. Borrower acknowledges, understands, and agrees as follows:
17.17.1. The relationship between Borrower and Lender is, and will at all times remain, solely that of borrower and lender, and Lender neither undertakes nor assumes any responsibility for or duty to Borrower to select, review, inspect, supervise, pass judgment on, or inform Borrower of the quality, adequacy, or suitability of the Project work, except as to matters which are within the intent and purpose for which Lender has made the Loan.
17.17.2. Lender owes no duty of care to protect Borrower against negligent, faulty, inadequate, or defective building or construction.
17.17.3. Lender will not be responsible or liable to Borrower for any loss or damage of any kind to person or property whether suffered by Borrower or any other Person or group of Persons or for negligent, faulty, inadequate, or defective building or construction , and Borrower will hold Lender harmless from any liability, loss, or damage for these things.
17.18. CONTROLLING LAW; VENUE. The Loan Documents will be governed by and construed in accordance with California law. The venue for any legal action or proceeding will be in the County of Sacramento, California.
17.19. CONSENTS AND APPROVALS. All consents and approvals by Lender required or permitted by any provision of this Loan Agreement will be in writing. Lender's consent to or approval of any act by Borrower requiring further consent or approval will not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act.
17.20. SURVIVAL OF WARRANTIES AND COVENANTS. The warranties, representations, conditions, covenants, and agreements in this Loan Agreement and in the other Loan Documents will survive the making of the Loan and the execution and delivery of the Note and will continue in full force until the Loan has been paid in full. Nothing in this Section is intended to limit any other provision of the Loan Documents that by their stated terms survive the repayment of the Loan or the termination of any Loan Document.
17.21. RECORDING AND FILING. Borrower, at its expense, will cause the Security Documents and all supplements to be recorded and filed and re-recorded and re-filed in any manner and in any places as Lender will reasonably request, and will pay all recording, filing, re-recording, and re-filing taxes, fees, and other charges.
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17.22. LOAN EXPENSES. In making the first disbursement, Lender may, at its option, deduct from the proceeds of that disbursement a su m equal to the aggregate of the following, to the extent Lender has knowledge of it and demand has been made on Lender at the time of the deposit: all expenses specifically incurred in connection with the Loan or the preparation, execution, and delivery o f the Loan Documents, including, but not limited to, recording costs and expenses, transfer and other taxes (if any), surveys, appraisal fees, title and hazard insurance premiums, recording, notary, and escro w charges, and all other similar, usual, or cust omary loan closing charges and expenses; and any other budgeted expenses that have been approved by Lender in writing; and Lender will, for the benefit of Borrower, pay those amounts over to the respective parties on whose behalf the demands will have been received by Lender. Borrower will pay directly any expenses in connection with the Loan not so paid by Lender, including, without limitation, any of the expenses specified above, and will hold Lender free from any cost, liability, or obligation of any nature in connection with it, including reasonable attorney fees incurred by Lender. Borrower further agrees to pay on demand all out-of-pocket costs and expenses reasonably incurred by Lender including, without limitation, the fees and disbursements of Len der's outside counsel, in connection with: (i) the administration of the Loan, including, without limitation, all approvals or consents given or contemplated to be given under the Loan Documents, all amendments to the Loan Documents entered into by Lender or requested by any party to the Loan Documents, and all title insurance policies and endorsements required by Lender, and (ii) the enforcement of any rights or remedies under the Loan Documents, whether any action or proceeding is commenced, or the protec tion of the security, or interests of Lender under the Loan Documents. All costs and expenses, together with interest at Interest Rate, will form a part of the indebtedness and will be secured by the Security Documents.
17.23. NO REPRESENTATIONS BY LENDER. By a ccepting or approving anything required to be observed, performed, or fulfilled, or to be given to Lender pursuant to this Loan Agreement or pursuant to the Loan Documents, including, but not limited to, any officer's certificate, balance sheet, statement of income and expense, or other Financial Statement, survey, appraisal, or insurance policy, Lender will not be deemed to have warranted or represented the sufficiency, legality, effectiveness, or legal effect of it or of any particular term, provision, or condition of it, and any acceptance or approval will not be or constitute any warranty or representation by Lender.
17.24. AMENDMENT. The Loan Documents and the terms of each of them may not be modified, waived, discharged, or terminated except by a written instrument signed by the party against whom enforcement of the modification, waiver, discharge, or termination is asserted.
17.25. TERMINATION. Except as otherwise provided in the Loan Documents, all rights and obligations under this Loan Agreement will terminate except as to any accrued obligations effective on the payment of all Loan owing by Borrower to Lender.
17.26. COUNTERPARTS. The Loan Documents may be executed in any number of counterparts and by different parties in separate counterparts, each of which when e xecuted and delivered will be deemed an original and all of which counterparts taken together will constitute one and the same instrument.
17.27. SEVERABILITY. If any term, provision, covenant, or condition or any application is held by a court of competent ju risdiction to be invalid, void, or unenforceable, all terms, provisions, covenants, and conditions and all applications not held invalid, void, or unenforceable will continue in full force and will in no way be affected, impaired, o r invalidated.
17.28. CAPTIONS. All Article and Section headings in the Loan Documents are inserted for convenience of reference only and do not constitute a part of the Loan Documents for any other purpose.
17.29. INDEMNITY. Borrower agrees to defend, indemnify, and hold Lender harmless f rom all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney fees that Lender may reasonably incur as a direct or indirect consequence of the making of the Loan, Borrower's failure to perform any obligations as and when required by this Loan Agreement or any of the other Loan Documents, the failure at any time of any of Borrower's representations or warranties to be true and correct, or any act or omission by Borrower, any contractor, subcontractor, engineer, architect, o r other Person with respect to the Property, the Project, or any portion of them except to the extent caused by the gross negligence or willful misconduct of Lender. Borrower will pay immediately on Lender's demand any amounts owing under this indemnity, together with interest at the maximum rate permitted by law from the date Lender makes a payment or incurs a loss. Borrower's duty to indemnify Lender will survive the release and cancellation of the Note and the reconveyance or partial reconveyance of the Trust Deed.
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17.30. FURTHER ASSURANCES. At Lender's request and at Borrower's expense, Borrower will execute, acknowledge, and deliver all other instruments and perform all other acts necessary, desirable, or proper to carry out the purposes of the Loan Documents or to perfect and preserve any liens created by the Loan Documents.
17.31. DISCLOSURE OF INFORMATION. If Lender elects to sell the Loan, Lender may forward to the buyer of the Loan all documents and information related to the Loan in Lender's possession, in cluding without limitation all Financial Statements, whether furnished by Borrower or otherwise.
17.32. LENDER'S AGENTS. Lender may designate agents or independent contractors to exercise any of Lender's rights under the Loan Documents. Any reference to Lender in any of the Loan Documents will include Lender's employees, agents, and independent contractors.
17.33. INTEGRATION AND INTERPRETATION. The Loan Documents contain or expressly incorporate by reference the entire agreement between Lender and Borrower with respect to the covered matters and supersede all prior negotiations. Any reference to the Property or Project in any of the Loan Documents will include all or any portion of them. Any reference to the Loan Documents themselves in any of the Loan Document s will include all amendments, renewals, or extensions approved by Lender.
17.34. NUMBER, IDENTITY AND GENDER. When the context and construction so require, all words used in the singular will be deemed to have been used in the plural and vice versa. When the context and construction so require, all words which indicate a gender will be deemed to have been used to indicate the gender as indicated by the context.
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THE PARTIES HAVE EXECUTED THIS LOAN AGREEMENT in Sacramento, California as of the Effective Date.
BORROWER:
TWIN RIVERS PHASE 3, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
By: Twin Rivers Phase 3 MBS GP, Inc.,
a California corporation,
its administrative general partner
By:
Name: Hillary B. Zimmerman
Title: Vice President
By: Mirasol Village Block C LLC,
a California limited liability company,
its managing general partner
By: Sacramento Housing Authority Repositioning Program, Inc., a California nonprofit public benefit corporation,
its sole member
By:
Name: James Shields
Title: President
Construction and Permanent Loan Agreement - HAF Loan Page 24 Mirasol Village Block C
THE PARTIES HAVE EXECUTED THIS LOAN AGREEMENT in Sacramento, California as of the Effective Date.
LENDER:
SACRAMENTO HOUSING AND REDEVELOPMENT
AGENCY
By: _______________________________________
La Shelle Dozier, Executive Director
Approved as to form:
___________________________________________
Lender Counsel
Legal Description Page 1
Mirasol Village Block C
EXHIBIT 1
LEGAL DESCRIPTION
Real property in the City of Sacramento, County of Sacramento, State of California, described as follows:
LOT 3 OF THE FINAL MAP OF TWIN RIVERS REDEVELOPMENT - UNIT 2, SUBDIVISION NO. P17-014.2, FILED FOR RECORD IN BOOK 420 OF MAPS, PAGE 5, OFFICIAL RECORDS OF SACRAMENTO COUNTY, CALIFORNIA, EXCEPTING THEREFROM ALL PORTIONS OF LOT 3 DESIGNATED AND DEPICTED ON SUCH MAP AS EASEMENTS FOR AND WITHIN STREETS, AVENUES, AND PUBLIC RIGHTS-OF-WAY.
APN: 001-0320-005-0000
Scope of Development Page 1
Mirasol Village Block C
Exhibit 2: Scope of Development and Rental Property Minimum Construction Standards
Mirasol Village Block C
Project Summary:
Mirasol Village Block C is the third phase of a master plan, mixed-income housing development located at 320 Dos Rios Street. The proposed development will replace the existing public housing development in this area, and the final project development will include 427 apartment units, with 84 units in this phase. All off -site infrastructure and the adjacent right -of-way improvements will be constructed under a separate contract. The project will be designed to secure a Green Point Rated Certification. The development will be a vibrant new addition to the neighborhood and help encourage future improvements and development.
A. Site:
1. New construction of 7 new buildings: 2 two-story townhome buildings, 3 three-story garden-style apartments, and 2 three-story apartment buildings. All the buildings will be Type V wood construction.
2. All adjacent streets will be in place prior to completion of Block C and are under a separate contract.
3. There will be an accessible path of travel into each building, the parking area, and all common area amenity spaces.
4. The parking lot shall be constructed by a combination of pervious concrete paving at the parking spaces and asphalt paving at the drive aisles. The parking lot shall be striped completely, identifying all parking spaces, ADA spaces, pedestrian pathways, and other potential hazards. Bicycle parking will be available.
5. Site amenities will include a school-age appropriate playground and landscaped area with picnic tables and benches.
6. The site will have pervious pavement and on-site drainage retention to accommodate all site drainage requirements in addition to all of the adjacent ROW.
7. New vehicular driveways access to the surface parking lots will be constructed as part of the infrastructure contract.
8. New landscaping throughout the project, including both along the new and existing streets and internally within the block. The landscaping a nd street design will serve to create a walkable neighborhood that encourages physical activity. Drought tolerant trees will be included and a smart controller with a drop system will be used for irrigation.
Scope of Development Page 2
Mirasol Village Block C
9. The entire site will have a decorative wrought iron picket fence off-set well beyond the property line, towards the back of the buildings. The goal is to secure the site without the feel of being fenced in.
10. The fence will have several pedestrian and vehicular access points throughout the site with access control. Only residents will have access to parking within the site, all visitors will park on the street.
11. Each building will have controlled access as will each of the common area amenity spaces.
12. Web-based CCTV will be provided with cameras covering primary ingress/egress points to the site; principal parking areas; and indoor/outdoor common areas. Site lighting shall be provided at all parking and outside public spaces and shall be of LED or similarly energy efficient type.
13. A minimum of one trash enclosure will be provided at each Block C. Trash enclosures will be constructed out of concrete block and metal gates with a concrete apron in front.
They will include separate recycling and trash receptacles within the same enclosure.
The trash enclosure will be completely accessible.
14. Most of the outdoor amenity areas will have either a permanent shade structure or removable (fabric) shade structure. There will also be some shading elements on the residential buildings.
15. There will be mailboxes located on Block C for its respective residents.
B. Building Exteriors:
1. The exterior building materials will be a combination of stucco, fiber cement siding (both painted and wood-look) with accent areas of metal siding on the street facing facades.
2. The townhome and walk-up apartment buildings will have primary entrances facing the street to engage the neighborhood, and secondary entrances internally facing the parking courts.
3. The townhome buildings will have stoops at the street side of the building to engage and active the public way.
4. Provide Operating Procedures Outline Sheet (OPOS) as required by Cal-OSHA.
C. Parking:
1. Block C will include a surface parking lot at the interior of the parcel, with approximately 74 spaces. Each lot will have required accessible parking as well as the infrastructure for electrical vehicle charging and outdoor bicycle parking.
Scope of Development Page 3
Mirasol Village Block C
D. Tenant Units:
BDRM Size Type Number of Units
One Elevator 24
One Walkup 12
Two Elevator 18
Two Walkup 6
Three Elevator 6
Three Walkup 8
Three Townhouse 3
Four Walkup 1
Four Townhouse 5
Five Townhouse 1
TOTAL 84
1. Appliances: All units will be equipped with a washer/dryer. All kitchens shall have refrigerator/freezer, dishwashers, stove/oven, and micro -hoods in non -accessible units and microwave shelves built into lower cabinets in ADA units. All appliances will be Energy Star, where applicable. Each unit will have garbage disposals.
2. Electrical: All units will have smoke/carbon monoxide detectors installed per current code.
3. Stoops: The townhome units will all have front stoops at the street.
4. Doors: All exterior doors shall have deadbolt locks, keyed latch assemblies and viewers.
The tenant units’ entry doors shall have single action hardware to release deadbolt and latch assembly.
5. Windows: New dual -paned (at a minimum) window with screens will be installed throughout. Window coverings will be provided on all windows.
6. Flooring: All units will have Luxury Vinyl Plank (LVP) throughout the living area with a minimum wear layer of 12 mils. Bedrooms will have carpet. Bathrooms will be sheet vinyl to limit water intrusion issues. All common areas will be LVP.
7. Cabinets, Counters: All kitchen and bathroom cabinets will have plywood boxes with solid face frames, doors, and drawer faces. All kitchens and bathrooms will have solid surface countertops.
8. Lighting: Units will have new LED lighting throughout.
9. Finishes: All unit interiors will have level 4 drywall finish.
10. Plumbing Fixtures: Bathrooms shall have low-flow, water-efficient fixtures.
11. Bathrooms: Bathrooms shall be fully equipped with accessories including towel bars, Scope of Development Page 4
Mirasol Village Block C
toilet paper dispensers and mirrors. All countertops shall be solid surface. Tub surrounds will be of fiberglass.
12. Hallways: The hallways on the upper floors of the 4-story building and garden-style buildings will be Luxury Vinyl Tile (LVT).
13. Accessible Units: There will be total of 13 fully accessible units and 4 audio/visual accessible units.
Community Areas:
1. On-site Management: On-site Property Management will be located on Block A.
2. Community/Management Spaces: Community, Resident Services and Property Management Spaces will be located on Block A.
3. Resident Services: Resident Services will be located on Block A.
4. Elevators and Stairs:. The three-story building facing Dos Rios will have an elevator.
Each of the three -story walk-up buildings will have an internal stair serving all three floors. Stairways will include closed risers and non-slip concrete finish or other slip- resistant material on the treads.
Attachment 1: Rental Property Minimum Construction Standards are on the following page.
Scope of Development Page 5
Mirasol Village Block C
Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.
RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS
The following is a list of the required minimum construction standards that must be incorporated into projects participating in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards. Exceptions to these standards may be made for properties subject to U.S. Department of Housing and Urban Development repl acement reserve requirements that allow for renovation over time rather than at recapitalization (e.g., Rental Assistance Demonstration conversions for conventional public housing).
Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.
Useful Life Expectancy – Rehabilitation only
SHRA shall reference the current edition of FannieMae’s “Instructions for Performing a Multifamily Property Condition Assessment, Appendix F. Estimated Useful Life Tables” in determining the useful life for all building components and systems located within the project. A remaining useful life of 15 years or more is required for all building components and systems located within the approved complex. All items on the FannieMae tables with useful lives indicated to be less than 15 years shall be replaced.
General Requirements
A. All materials funded under this loan must be new unless previously approved. Recycled items must be a pproved in writing by SHRA prior to their use.
B. All work shall comply with Federal and State ADA accessibility requirements, as well as any other requirements stipulated by the funding source(s). When there are differences the stricter of the two shall app ly.
The developer is responsible for notifying their architect and/or engineer of all funding sources used on the project. The architect and/or engineer must indicate these funding requirements in the project’s plans/scope.
C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.
D. Web-based security cameras and the equipment to record events are required for primary ingress/egress points to and from the site and for the principal parking and indoor and outdoor common areas where people will be congregating.
E. Site lighting is required for all parking and outside public spaces, and shall be of LED or similarly energy efficient type. The lenses on the exterior lights shall be cleaned with all oxidation removed or replaced. Light poles shall be new or painted, and shall be structurally sound and stable.
F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.
G. SHRA encourages the use of energy and water-efficient systems wherever they may be incorporated into the project.
Scope of Development Page 6
Mirasol Village Block C
General Requirements – Rehabilitation only
A. Any component of the project which does or may present a health or safety hazard to the public or tenants shall be corrected to the satisfaction of the local Building Department or AHJ.
B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.
C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, etc.) will occur, a clearance report from an environmental consultant is required.
D. Projects deemed historically significant landmark by either the City of Sacramento or the National Register of Historic Places shall consult with the State Historic Preservation Officer (SHPO), and shall conform to the Secretary of the Interior Standards for the Treatment of Historic Properties.
Site Work
A. Trees and large shrubs must be trimmed, grass areas must be mowed, and all planter areas must be weed -free.
The landscape design shall incorporate a sustainable design appropriate for the Sacramento Valley. Vegetation that assists in minimizing crime and enhances public safety is preferred. Trees compromising building envelope materials (roofing, siding, windows, etc.) and/or structural integrity (including foundations) must be removed.
An arborist shall be consulted for an opinion on trees prior to major branch trimming, root cutting or tree removal. All trees, bushes and other plants that are to be removed shall have the root ball removed by grinding or by mechanical means. A landscape plan describing the above must be provided to SHR A for approval.
B. All landscaped areas must be served by a programmable automated irrigation system. The irrigation controller shall be a “Smart Controller” that senses rain to reduce water use. Irrigation shall be designed to use bubblers and other water saving measures. Irrigation must not spray on building. Sprinklers should minimize overspray that runs to storm drain drop inlets. Areas that show evidence of erosion of soil shall be landscaped to eliminate problems. The landscape plan must be approved by SHRA and applied.
C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.
D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinder block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.
E. All projects shall meet the parking requirements of the local Agency Having Jurisdiction (AHJ) over the project. "Grandfathered Projects" will need to show that they are in fact “Grandfathered” or otherwise exempted by the local AHJ. Otherwise, all projects shall meet the governing ADA requirements for parking.
F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and no standing water shall remain on the site. Provide an on- site drainage system if necessary.
G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.
H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.
I. For family projects of 50 or more units, a minimum of one school age-appropriate play structure is required. For family projects of 100 or more units, a minimum of one school age and one toddler -appropriate play structure is required.
Scope of Development Page 7
Mirasol Village Block C
Site Work – Rehabilitation only
A. All landscaping and irrigation systems must be in a well-maintained condition.
B. All fencing must be in good and serviceable condition. Existing fencing that is to remain shall be free of flaking paint, rust, or any other signs of failure. If existing fencing shows any signs of failure, it shall be repaired, painted and restored to look new. All chain link fencing must be removed and replaced with fencing of another approved material. All pedestrian gates hardware must be functional and in new or near -new condition. Access Control systems are required at exterior pedestrian gates.
C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shall be repaired or replaced.
D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water. Repairs to portions of parking lots not suitable for new coatings shall be performed by removing and replacing damaged paving. A new seal-coat or slurry-coat shall then be applied to the entire parking lot surface.
Parking spaces shall be restriped, including ADA aisles and other applicable striping/painting.
E. All site accessories (bollards, benches, tables, play equipment, bike racks, mailboxes, shade structures, BBQs, sheds, etc.) shall be replaced or in good repair (cleaned, painted and/or re-coated).
Building Envelope and Moisture Protection – Rehabilitation only
A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a licensed architect/engineer or by a certified water intrusion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the issue and a resolution to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.
B. Roofing must have 15 years or more of remaining life with no visible signs of leakage. For roofs containing composition shingles, a maximum of two layers of shingles are allowed (including any proposed new layers).
Provide evidence that the roof system has a 15-year life remaining on the manufacturer’s warranty.
C. All siding must have 15 years or more of remaining life. Hairline cracks in stucco must be sealed and painted with elastomeric paint. If requested by SHRA, a statement by a licensed architect and/or engineer that the existing siding contains at least 15 years of useful life remaining shall be provided.
D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall be clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repairs shall be performed.
Doors and Windows
A. All dwelling/tenant units must have screens on all windows that are designed to open. Windows designed to open must have functional locks and must operate freely without excessive effort. All windows must be dual - paned (minimum), and shall meet or exceed the State of California’s currently applicable efficiency standards, and any other efficiency standards that may be dictated by the funding source or other governing bodies for the project.
B. All doors must have matching hardware finishes.
C. All exterior doors must have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware shall have single action hardware to release deadbolt and latch assembly.
D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely Scope of Development Page 8
Mirasol Village Block C
without excessive effort.
E. All doors and windows must meet current egress standards.
Doors and Windows – Rehabilitation only
A. Any windows showing signs of condensation or leakage of any kind shall be replaced. SHRA allows window replacement using retrofit windows when those windows are installed by trained professionals following manufacturer’s specifications. Retrofit windows must have a similar useful life as “new, construction” (i.e., nail fin) windows.
B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed.
Doors and/or jambs beyond their useful life shall be replaced.
Casework
A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.
B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.
C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.
Casework – Rehabilitation only
A. All cabinets shall be replaced or in very good condition, within their 15 year useful life, both structurally and in appearance.
Finishes
A. All dwelling unit kitchens shall contain luxury vinyl plank (LVP) flooring. Bathrooms must be floored with LVP, sheet vinyl or ceramic tile to provide a cleanable, impervious surface. Bedrooms, hallways, and living and dining rooms may be floored with carpeting, LVP or hardwood. Wear layer of LVP shall be at least 12 mils inside dwelling units. Tenant unit entries shall be floored with LVP or ceramic tile.
B. In common areas, corridors may be floored with LVP, glue-down carpeting, or carpet tiles. Community rooms and kitchens shall be floored with LVP. Wear layer of LVP in common/commercial areas shall be a minimum of 20 mils thick.
C. Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.
Finishes – Rehabilitation only
A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.
B. All exterior and interior surfaces must be painted. No peeling, cracking, chipping, or otherwise failing paint will be allowed. All painted surfaces must be new, or in near new condition and appearance.
C. Acoustic (popcorn) ceiling texture must be removed and refinished with new texture to match wall texture.
Equipment
A. Dishwashers, refrigerator/freezer, oven, stoves and garbage disposals are required in all dwelling unit kitchens.
All appliances must be new or in very good operating condition. All appliances must be Energy Star rated, as applicable. Appliances slated for ADA units shall be per code requirements.
Scope of Development Page 9
Mirasol Village Block C
B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case-by-case basis.
C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over-the-range microwaves are not used, with the exception of ADA units.
Furnishings
A. Dwelling units must have window coverings on all windows.
Special Construction
A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.
B. Laundry facilities must, at a minimum, be consistent with CTCAC requirements of one washer and dryer for every ten dwelling units for family housing and one for every 15 units for senior and special needs projects. Ten percent of the total number of washer/dryers must be ADA-accessible machines (unless the ADA units contain their own laundry facilities). Solid surface countertops will be required within laundry rooms and countertops shall meet all ADA requirements.
C. Public pool areas shall have self-closing gate(s). Fences and gates at pool areas shall meet applicable current codes and standards. Joints between coping and concrete deck shall be appropriately caulked. Existing pools shall have no cracks in plaster or tile grout joints. The Developer is responsible for ensuring pool and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.
Mechanical/Plumbing
A. Water heaters must be installed per current applicable codes.
B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or central systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected from vandalism, pursuant to discretion of SHRA.
C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.
D. Tub surrounds must be one unbroken piece per wall and must be of solid surfaces (such as “Swanstone” or other solid acrylic materials, quartz composites), or other similar materials. Fiberglass/acrylic surrounds are acceptable.
Mechanical/Plumbing – Rehabilitation only
A. All toilets, sinks, and tubs shall be chip and stain free.
Electrical
A. All units must have smoke/carbon monoxide detectors installed per current code.
B. Wiring from telephone/data/cable suppliers shall be installed within walls, attic spaces, and/or crawl spaces. No conduits are allowed to be mounted on the exterior of the buildings in new construction.
C. Broadband infrastructure meeting the requirements of 24 CFR 5.100* is required in all new construction projects of 4 or more units.
Scope of Development Page 10
Mirasol Village Block C
*Broadband infrastructure means cables, fiber optics, wiring, or other permanent (integral to the structure) infrastructure, including wireless infrastructure, that is capable of providing access to Internet connections in individual housing units, and that meets the definition of “advanced telecommunications capability” determined by the Federal Communications Commission under section 706 of the Telecommunications Act of 1996 (47 U.S.C. 1302).
Electrical – Rehabilitation only
A. All electrical panels shall meet current code.
B. Any rehabilitation projects with un-grounded electrical systems shall be re-wired with grounded systems to meet current code.
C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.
D. Wiring mounted on the exterior of the surface may be allowed if it is concealed in conduit and conduit is painted to match exterior siding. For projects where exterior siding will be removed, this wiring shall be installed within walls, attic spaces, and/or crawl spaces.
Resident Services Community Space
All properties, regardless of project type (i.e. senior, family, or large family), must devote a minimum of 1,200 s.f. to actual resident services/community space. Resident services space includes commo n kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.
For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.
End of Scope of Development.
Construction and Permanent Loan Agreement - HAF Loan - Promissory Note Page 1 Mirasol Village Block C
Exhibit 3: Promissory Note
PROMISSORY NOTE
FOR
MIRASOL VILLAGE BLOCK C
CONSTRUCTION AND PERMANENT LOAN AGREEMENT
BORROWER HAS MADE THIS PROMISSORY NOTE (“NOTE”) AS OF THE EFFECTIVE DATE. The Lender is making the Loan pursuant to the terms and conditions of the Loan Agreement and this Note. This Note includes all attachments and Exhibits listed below, which are attached to and incorporated in this Note by this reference. The capitalized terms in this Note shall have the meanings assigned in the following table of definitions and as defined in the body of the Note. (Terms being defined are indicated by quotation marks. If an item in the table is marked “None, Not Applicable, N/A or equivalent or is left blank, that defined term is not applicable to this Note or the referenced item is not required or is not included in this Note as the context may indicate.) Capitalized terms used but not defined herein shall have the meanings attributed to such terms in the Loan Agreement. The Lender is making the Loan to Borrower in consideration of Borrower making this Note and delivering it to Lender.
For purposes of this Note, the following terms shall have the following meanings:
DEFINED TERM: DEFINITION:
“Effective Date” May 1, 2022
“Lender” Housing Authority of the City of Sacramento, a public body corporate and politic “Borrower” Twin Rivers Phase 3, L.P.
“Borrower Legal
Status”
a California limited partnership
“Loan Agreement” The Loan Agreement between the Borrower and Lender as of the Effective Date for making of the loan (“Loan”) evidenced by this Note.
“Principal
Amount”
Five Million Dollars and No Cents ($5,000,000.00).
“Interest Rate” The interest rate is 3% per year, simple interest. “Accrual Date” Interest shall accrue starting on the following “Accrual Date”: The Effective Date “Special Terms” N/A
PAYMENT SCHEDULE. Repayment of this Note shall be made as follows:
“Maturity Date” The first day of the 684th calendar month following the Effective Date. May 1, 2079 “Repayment
Schedule”
Annual Repayment: Annual principal and interest payments will be made on a Residual Receipts basis (as defined below) beginning on December 1 st following conversion to permanent financing and the initial annual audited financial statement, and becoming due and owing on December 1st each calendar year thereafter until the maturity date. Annual payments shall be applied first to outstanding interest accrued and unpaid and then to principal. “Residual Receipts” is defined as follows: Once annually, based on the annual audited financial statement from the preceding year, payments will be made upon a “Residual Cash Flow” basis meaning Net Operating Income (NOI) less the items described in the below Subsections (i) through (vii), no such proceeds or amounts to be applied in payments of any amounts specified in any of the Subsections below until all amounts specified in any earlier Subsection have been paid in full:
Net Cash Flow Distributions. Distributions of Net Cash Flow (where “Net Cash Flow” is defined as Net Operating Income less payment of debt service, and the funding of reserves, on the Senior Loan, and developer fee in the amount anticipated to be paid from capital sources not to exceed amounts allowed by HCD Uniform Multifamily Regulations) will be made as follows, subject to the consent of the Senior Lender and subordinate lenders:
Construction and Permanent Loan Agreement - HAF Loan - Promissory Note Page 2 Mirasol Village Block C
(i) to replenish the Replacement Reserve, Operating Reserve and Transition Reserve, if applicable, pursuant to the LPA and loan documents
(ii) to pay the Administrative General Partner the AGP Asset Management Fee of $20,000 and the Managing General Partner an MGP Asset Management Fee of $15,000, each indexed at 3% annually
(iii) to payment of any developer fee that is not paid from capital sources as anticipated and becomes deferred, and accrued interest thereon, if any, not to exceed amounts allowed by CA HCD Uniform Multifamily Regulations
(iv) to the General Partners or their respective affiliates to repay any loans or advances made by the General Partners or their respective affiliates in support of the development or operation of the Project (v) 50% of the remaining annual Net Cash Flow to the payment of the HCD MHP, HACOS CNI, HACS HAF, and HACOS Ground
Lease subordinate loans on a proportional basis;
(vi) 90% of available annual Net Cash Flow remaining less amount distributed and paid to subordinate lenders in (iv) to pay subordinate lenders as follows:
A) HACOS Choice Neighborhoods Initiatives (CNI)
Loan until it has been fully repaid (with
interest); and then to
B) Housing Authority of the City of Sacramento (HACS)
Housing Authority Funds (HAF) Loan until it has
been fully repaid (with interest); and then
C) Housing Authority of the County of Sacramento
(HACOS) Ground Lease Loan until it has been fully
repaid (with interest); and then to
(vii) to the AGP to pay the Partnership Management Fee for services rendered to the Partnership in the amount of $3,000 solely from and to the extent of 90% of remaining available Net Cash Flow; (viii) the balance to the Administrative General Partner, the Managing General Partner, and the Limited Partner on a pro rata basis in accordance with their Percentage Interests.
To the extent that insufficient Net Cash Flow is available to pay any of the amounts set forth in Sections (i) through (iv) when due, such amount shall accrue and be payable in the future when there is available Net Cash Flow, after prior payment of all higher priority payments from Net CashFlow, as set forth above.
Notwithstanding any other provision of this section to the contrary, a sufficient amount of Net Cash Flow shall be distributed to the Limited Partner in each year such that, when such distribution is added to all other distributions of Net Cash Flow made to the Limited Partner with respect to such fiscal year, the Limited Partner will have received an amount of Net Cash Flow equal to at least 10% of all Net Cash Flow which remains after repayment of priorities (i) through (vi) with respect to such year.
Construction and Permanent Loan Agreement - HAF Loan - Promissory Note Page 3 Mirasol Village Block C
The Net Operating Income is defined as periodic “Revenue” less “Operating Expenses.” “Revenue” means all revenue from the leasing of the Project, including but not limited to all rents, fees, and charges paid by tenants as well as rental subsidy payments regardless of the source of these subsidies, forfeited tenant deposits, rent increases, proceeds from vending machines and laundry room machines. Revenue shall not include tenants’ security deposits (unless forfeited), interest on those deposits, loan proceeds, capital contributions or similar advances, or amounts released from reserves or interest on reserves.
“Operating Expenses” shall mean actual costs, fees and expenses as evidenced by invoices attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including property management fees; taxes and assessments; payroll, benefits and payroll taxes of for property employees; insurance; security; painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and building supplies; recreational amenities and supplies; purchase, repair, servicing and installation of appliances; costs and expenses associated with the provision of social and/or community services to the residents of the Project; equipment, fixtures and furnishing; fire alarm and elevator monitoring; fees and expenses of accountants, attorneys, consultants and other professionals: debt service monitoring fee payments to HCD with respect to the MHP Loan, HACOS with respect to the CNI loan, HACS with respect to the HAF Loan, and HACOS with respect to the Ground Lease Loan. The definition will include deposits into operating and/or replacement
reserves maintained by the Borrower but will not include initial deposits to capitalize the reserve accounts or amounts expended from a reserve account, or capital costs.
Principal and interest are not due upon sale or refinance that is expressly permitted in this section and pursuant to Sections 17.13 and 17.14 of the Loan Agreement.
All payments due under this Note are only required to be repaid from Residual Receipts, condemnation proceeds or all proceeds received from the sale or refinancing of the Project that is not expressly permitted in this section and pursuant to Sections 17.13 and 17.14 of the Loan Agreement, less (1) Borrower’s documented reasonable costs of sale or refinancing, and (2) in the event of a re-syndication or refinancing of the Project, any proceeds from such re- syndication or refinancing that are required to be reinvested into the Project and which are therefore unavailable for distribution to the Borrower.
FOR VALUE RECEIVED, THE UNDERSIGNED, JOINTLY AND SEVERALLY, PROMISES TO PAY to Lender, or its successors or assigns, the Principal Amount or such lesser amount as may be endorsed on this Note on behalf of Lender. The Loan shall bear interest on the outstanding principal balance, computed from the Accrual Date at the Interest Rate.
1. This Note evidences the obligation of Borrower to Lender for repayment of funds loaned to Borrower under a Construction and Permanent Loan Agreement (Mirasol Village Block C) between Borrower and Lender dated as of the Loan Date ("Loan Agreement"). The terms and covenants of the Loan Agreement are incorporated in this Note by reference. The Loan Agreement provides for and incorporates the Regulatory Agreement for Residential Rental Property and Declaration of Restrictive Covenants Affecting Real Property (“Regulatory Agreement”), the making of which is further consideration for this Note.
All payments on this Note shall be applied first to fees and charges due under the Loan Agreement, if any, then interest and then to the principal due on this Note. Borrower shall make the payments to the Lender at 801 12th
Construction and Permanent Loan Agreement - HAF Loan - Promissory Note Page 4 Mirasol Village Block C
Street, Sacramento, CA 95814, or to such other person or organization as may be designated by Lender to Borrower and noticed as provided in the Loan Agreement.
2. If any installment under this Note i s not received by Lender within fifteen (15) calendar days after the installment is due, Borrower shall pay to Lender a late charge of five percent (5%) of such installment. Such late charge shall be immediately due and payable without demand by Lender.
3. This Note is secured by a Deed of Trust and Assignment of Rents against the real property described in the Loan Agreement (“Property”), recorded in the office of the County Recorder of Sacramento County ("Trust Deed"). The Trust Deed securing this Note provides that Lender may at its option, declare all funds secured by the Trust Deed immediately due and payable, if any interest in the real property is sold, transferred or conveyed to any person, whether voluntarily or involuntarily. The Trust Deed further provides that if Borrower does not comply with the requirements of the Regulatory Agreement and fails to come into compliance with the Regulatory Agreement within thirty (30) days after Lender’s written notice to Borrower of such failure, Lender may at its option, declare all funds secured by the Trust Deed immediately due and payable.
4. Lender and Borrower shall comply with and fulfill the Special Terms.
5. Upon occurrence of any one or more of the following, Lender may, at its sole discretion, declare all unpaid principal immediately due and payable, together with all unpaid interest at the stated rate from the date of the advancement of the Loan's proceeds, subject to applicable cure periods, if any:
a. Borrower defaults in the payment of any principal or interest when due. b. Lender discovers that Borrower, in any application to Lender in connection with the Loan, had failed to disclose or misrepresented any fact that would have prevented Borrower from being eligible for the Loan. c. Lender discovers that Borrower has made any misrepresentations or has intentionally withheld any fact in the making of this Loan, the knowledge of which could have affected the decision of Lender to make the Loan. d. Borrower defaults or breaches any of the terms of Loan Agreement, the T rust Deed, the Regulatory Agreement or this Note.
e. Borrower fails to perform any covenant, term or condition in any instrument creating a lien upon the Property which is the security under the Trust Deed, or any part thereof, which lien shall have priority over the lien of the Trust Deed securing this Note.
f. The sale, transfer of title, conveyance or further encumbrance of the Property, whether by sale, exchange, gift, inheritance or other means, without prior written consent of Lender. g. The occurrence of any of the following:
1) Borrower becoming insolvent or bankrupt or being unable or admitting, in writing, Borrower’s inability to pay debts as they mature or making a general assignment of or entering into any restructure payment arrangement with creditors.
2) Proceedings for the appointment of a receiver, trustee or liquidator of the assets of Borrower or a substantial part of such assets, being authorized or instituted by or against the Borrower. 3) Proceedings under any bankruptcy, reorganization, readjustment of debt, insolvency, dissolution, liquidation or other similar law of any jurisdiction being authorized or instituted against Borrower.
6. No waiver of any default or breach by Borrower under this Note shall be implied from any omission by Lender to take action on account of such default, and no express waiver shall affect any default, other than the default
Construction and Permanent Loan Agreement - HAF Loan - Promissory Note Page 5 Mirasol Village Block C
specified in the waiver. Such waiver shall be in writing and shall be operative only for the time and to the extent therein stated.
7. Borrower may prepay this Note in full or in part at any time, without any prepayment penalty being charged by Lender.
8. During the existence of default or delinquency under the terms of this Note or the Trust Deed, the Lender is expressly authorized to apply all payments made on t his Note to the payment of all or part of the delinquency, as it may elect.
9. This Loan is a nonrecourse loan, and notwithstanding any provision of this Note or any document evidencing or securing this Loan, Borrower, and Borrower’s principals, members, partners, agents, officers, and successors in interest shall not be personally liable for the payment of the Loan or any obligation of the Loan.
10. Borrower shall pay to Lender all costs of enforcement of all or any portion of this Note and the Trust Deed, including reasonable attorney's fees, witness fees, investigator fees and court costs, incurred by Lender, whether or not litigation is commenced.
Construction and Permanent Loan Agreement - HAF Loan - Promissory Note Page 6 Mirasol Village Block C
IN WITNESS WHEREOF, Borrower has executed this Note as of the Effective Date.
Borrower:
TWIN RIVERS PHASE 3, L.P.,
a California limited partnership
By: Twin Rivers Phase 3 MBS GP, Inc.,
a California corporation,
its administrative general partner
By:
Name: Hillary B. Zimmerman
Title: Vice President
By: Mirasol Village Block C LLC,
a California limited liability company,
its managing general partner
By: Sacramento Housing Authority Repositioning Program, Inc., a California nonprofit public benefit corporation,
its sole member
By:
Name: James Shields
Title: President
Construction and Permanent Loan Agreement - HAF Loan - Promissory Note Page 7 Mirasol Village Block C
IN WITNESS WHEREOF, Borrower has executed this Note as of the Effective Date.
LENDER:
SACRAMENTO HOUSING AND REDEVELOPMENT
AGENCY
By: _______________________________________
La Shelle Dozier, Executive Director
Approved as to form:
___________________________________________
Lender Counsel
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 1 Mirasol Village Block C
NO FEE DOCUMENT:
Entitled to free recording
per Government Code §§6103 and 27383.
Recording requested by and
when recorded, return to:
SACRAMENTO HOUSING AND
REDEVELOPMENT AGENCY
801 12th Street – 4th Floor
Sacramento, CA 95814
Attention: Portfolio Management
LEASEHOLD DEED OF TRUST AND ASSIGNMENT OF RENTS
MIRASOL VILLAGE BLOCK C
For purposes of this Leasehold Deed of Trust (“Deed of Trust”) the following capitalized terms shall have the meanings ascribed in the space adjacent to them:
TERM DEFINITION
“Effective Date” May 1, 2022
“Trustor” and
“Borrower”
Twin Rivers Phase 3, L.P., a California limited partnership “Borrower
Address”
Twin Rivers Phase 3, L.P.
c/o McCormack Baron Salazar, Inc.
720 Olive Street, Suite 2500
St. Louis, MO 63101
Attention: Hillary Zimmerman
“Trustee” First American Title Insurance Company
“Beneficiary” and
“Lender”
Housing Authority of the County of Sacramento, a public body corporate and politic “Lender Address” 801 12th Street, Sacramento, California 95814 “Property”
Which consists of the leasehold estate in real property and fee interest in the improvements located on the Property in the County of Sacramento and the Stat e of California as more particularly described in the Legal Description.
Address and Assessor’s
Parcel Number
1200 Richards Boulevard, Sacramento, CA 95811
APN: 001-0320-001-0000
“Legal
Description”
The Legal Description of the Property which is more particularly described in the attached Exhibit 1 Legal Description, which is incorporated in and an integral part of this Deed of Trust “Loan” Which is Lender’s loan to Borrower evidenced by the Note and which is secured by this Deed of Trust.
“Loan
Agreement”
Which is the agreement between Lender and Borrower stating the term and conditions of the Loan.
Which is dated: May 1, 2022
“Additional
Notices”
Lender shall give copies of notices required to be delivered to Borrower to the following parties at the following addresses; provided, however that Borrower acknowledges that such notice is an accommodation and the failure of the Lend er to properly deliver any such notice shall not give rise to any claims or defenses of Borrower or any third party:
***
Exhibit 4: Deed of Trust
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 2 Mirasol Village Block C
“Note”
Which is Borrower's promissory note made in accordance with the Loan Agreement evidencing the following principal sum or such lesser amount as shall equal the aggregate amount disbursed to Borrower by Lender, with interest.
Which has a principal sum
of
Five Million Dollars and No Cents ($5,000,000.00)
THIS DEED OF TRUST is made as of the Effective Date between the Trustor also referenced as the Borrower, the Trustee, and the Beneficiary also referenced as Lender.
Borrower, in consideration of the indebtedness described below and the trust created by this Deed of Trust, irrevocably grants and conveys the Property to Trustee, in trust with power of sale.
Together with all the improvements now or subsequently erected on the property, and all easements, rights, appurtenances, rents (subject, however, to the rights and authorities given to Lender to collect and apply such rents), royalties, mineral, oil and gas rights and profits, water, water rights, and water stock, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, steam and hot water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating equipment, cabinets, mantels, refrigerating plant and refrigerators, whether mechanical or otherwise, cookin g apparatus and appurtenances, furniture, shades, awnings, screens, venetian blinds and other furnishings, now or hereafter attached to the property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or the leasehold estate if this Deed of Trust is on a leasehold) are referred to as the "Property";
To secure to Lender: (a) the repayment of the Loan; and (b) the performance of the covenants and agreements of Borrower contained in this Deed of Trust, the Note, or the Loan Agreement.
Borrower covenants that Borrower is lawfully seized of the estate conveyed by this Deed of Trust and has the right to grant and convey the Property, and that Borrower will warrant and defend generally the leasehold title of the Property against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring Lender's interest in the Property.
Borrower and Lender covenant and agree as follows:
1. Payment of Principal and Interest. Borrower shall promptly pay when due the principal and interest, if any, on the indebtedness evidenced by the Note. All payments received by Lender under the Note shall be applied by Lender first to interest payable on the Note and thereafter to the unpaid principal of the Note.
2. Charges; Liens . Borrower shall pay all taxes, assessments and other charges, fines and impositions attributable to the Property and leasehold payments or ground rents, if any by Borrower making payment, when due, directly to the appropriate payee. Borrower shall promptly furnish to Lender all notices of amounts due under this paragraph, and in the event that Borrower makes payment directly, Borrower shall promptly furnish to Lender receipts evidencing such payments. Borrower shall pay when due any encumbrance, charge and lien, with interest in accordance with its terms, on the Property or any portion which is inferior or superior to this Deed of Trust.
3. Hazard Insurance. Borrower shall keep the improvements now existing or later erected on the Property insured against loss of fire or hazards under a policy approved by Lender cons istent with the insurance requirements of the Loan Agreement. In addition, Borrower shall insure against loss of all furniture, equipment and other personal property owned by Borrower related to Borrower's operation of the Property.
Lender shall have the right to hold the policies and policy renewals, and Borrower shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 3 Mirasol Village Block C
Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, as and to the extent provided in the Loan Agreement.
Unless Lender and Borrower otherwise agree in writing, any such application of insurance proceeds to principal shall not extend or postpone the due date of any Loan payment or change the amount of such payment. If the Property is acquired by Lender pursuant to t his Deed of Trust, all right, title and interest of Borrower in and to any insurance policies and proceeds of such policies resulting from damage to the Property prior to the sale of acquisition shall pass to Lender to the extent of the sums secured by thi s Deed of Trust immediately prior to such sale or acquisition.
4. Liability Insurance. In addition to the casualty insurance required under the Loan Agreement during the course of construction, Borrower shall keep comprehensive general liability insurance f or the Property in a form and coverage consistent with the provisions of the Loan Agreement and reasonably approved by Lender.
5. Preservation and Maintenance of Property . Borrower shall keep the Property in good repair and shall not commit waste or permit impairment, demolition, or deterioration of the Property.
6. Protection of Lender's Security. Borrower shall appear and defend any action or proceeding purporting to affect the security under this Deed of Trust or the rights of the Lender. If Borrower fai ls to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects Lender's interest in the Property, including, but not limited to, foreclosure, involuntary sale, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankruptcy or decedent, then Lender may, upon notice to Borrower, make such appearances, disburse such sums and take such actions as are necessary to protect Lender's interest, incl uding, but not limited to, disbursement of judgments, costs or reasonable attorney's fees and entry upon the Property to make repairs.
Any amounts disbursed by Lender pursuant to this Section 6, with interest, shall become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other terms of payment, such amounts shall be payable upon notice from Lender to Borrower requesting payment, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law. In any event, this Section shall be construed as a right and an option of Lender and shall not be construed to require Lender to incur any expense or take any action.
7. Inspection. Lender, by its designated representative, may make reasonable entries upon and inspections of the Property, provided that Lender shall give Borrower and any occupant of the Property reasonable prior notice of any such inspection.
8. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of all or any part of the Property, or for conveyance in lieu of condemnation, shall be applied as provided in the Loan Agreement.
If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the condemnor offers to make an award or settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date such notice is mailed, Lender is authorized to collect and apply the proceeds, at Lender's option, either to restoration or repair of the Property or to the sums secured by this Deed of Trust.
Unless Lender and Borrower otherwise agree in writing, any such application of proceeds to principal shall not extend or postpone the due date of any payment or change the amount of such payment.
9. Borrower Not Released. Extension of the time for payment of the sums secured by this Deed of Trust granted by Lender to Borrower or any successor in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and Borrower's successors in interest. Lender shall not be required to commence proceedings against such successor or refuse to extend time payment by reason of any demand made by the original Borrower or Borrower's successors in interest.
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 4 Mirasol Village Block C
10. Forbearance by Lender Not a Waiver . Any forbearance by Lender in exercising any right or remedy under this Deed of Trust, or otherwise afforded by applicable law, shall not be a waiver or preclude the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by Lender shall not be a waiver of Lender's right to accelerate the maturity of the indebtedness secured by this Deed of Trust.
11. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust, the Note, the Loan Agreement or afforded by law or equity, and may be exercised concurrently, independently or successively.
12. Successors and Assigns Bound; Joint and Several Liability Captions . The covenants and agreements contained in this Deed of Trust shall bind, and the rights under this Deed of Trust shall inure to, the respective successors and assigns of Lender and Borrower , subject to the provisions of Section 15. All covenants and agreements of Borrower shall be joint and several. The captions and headings of the paragraphs of this Deed of Trust are for convenience only and are not to be used to interpret or to define it s provisions.
13. Notice. Except for any notice required under applicable law to be given in another manner, any notice to be given under this Deed of Trust shall be given as provided for in the Loan Agreement. Any notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or Lender when given in the manner designated.
14. Governing Law; Severability. This Deed of Trust shall be governed by the law of the State of California.
If any term or provision of this Deed of Trust shall, to any extent, be held invalid or unenforceable, the remainder of this Deed of Trust shall remain in full force and effect and the invalid or unenforceable provision shall be valid and enforceable as to any other person or circumstance.
15. Acceleration on Transfer or Refinancing of the Property; Assumption. Except as otherwise provided in the Loan Agreement, if all or any part of the Property or an interest in the Property is sold or transferred or refinanced by Borrower without Lender's prior written consen t, Lender may, at Lender's option, declare all the sums secured by this Deed of Trust to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the refinancing, sale or transfer, Lender and the person to whom the P roperty is to be sold or transferred reach agreement in writing that the loan may be assumed. If Lender has waived the option to accelerate provided in this Section and if Borrower's successor in interest has executed a written assumption agreement accept ed in writing by Lender, Lender shall release Borrower from all obligations under this Deed of Trust and the Note.
If Lender exercises such option to accelerate, Lender shall mail Borrower notice of acceleration. Such notice shall provide a period of not less than 30 days from the date the notice is mailed within which Borrower, or any of its principals or anyone with a substantial legal interest in Borrower, may pay the sums declared due.
If Borrower fails to pay such sums prior to the expiration of such period, Lender may, without further notice or demand on Borrower, invoke any remedies permitted by this Deed of Trust.
16. Acceleration on Breach; Remedies . Except as provided in Section 15, upon Borrower's breach of any covenant or agreement of Borrower in this Deed of Trust, the Note (including the covenants to pay when due any sums secured by this Deed of Trust and restricting transfer of the Property) , the Choice Neighborhoods Declaration of Restrictive Covenants entered into by and among Lender, Borrow er and the United States Department of Housing and Urban Development , the Regulatory Agreement, or Loan Agreement, Lender shall mail notice to Borrower specifying: (1) the breach or default; (2) the action required to cure such breach or default; if curable; (3) if curable, a date, no less than 30 days from the date the notice is mailed to Borrower (the “Cure Period”), by which the breach or default must be cured; and (4) if curable, that failure to cure such breach or default on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Property. If the breach or default is curable but not cured on or before the date specified in the notice, Lender at Lender's option may declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law ; provided, however, that if the breach or default is non - monetary and cannot reasonably be cured within the Cure Period but can be cured within 90 days after the
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 5 Mirasol Village Block C
expiration of the Cure Period (the “Extended Cure Period”) , and if diligent efforts to cure promptly commence and thereafter continue , then Lender shall not enforce i ts remedies hereunder unless Borrower fails to cure the non-monetary breach or default prior to the expiration of the Extended Cure Period. Lender shall be entitled to collect from the Borrower, or sale proceeds, if any, all reasonable costs and expenses incurred in pursuing the remedies provided in this Section, including, but not limited to reasonable attorney's fees.
If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of d efault and of Lender's election to cause the Property to be sold and shall cause such notice to be recorded in each county in which any portion of the Property is located. Lender or Trustee shall mail copies of such notice in the manner prescribed by appl icable law to Borrower and to the other persons prescribed by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by applicable law. After the lapse of such time as may be required by applicable law, Trust ee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale, in one or more parcels and in such order as Trustee may determine. Trustee may post pone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any sale.
Trustee shall deliver to the purchaser a Trustee's deed conve ying the Property so sold without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements it contains. Trustee shall apply the proceeds of the sale in the following o rder: (a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and attorney's fees and costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c) the excess, if any, to the person or pe rsons legally entitled thereto as determined by Lender. In the event of a dispute regarding the excess funds, either Lender or Trustee may file an action in interpleader to determine who shall receive the funds and may then deposit the excess funds with the court.
17. Assignment of Rents; Appointment of Receiver; Lender in Possession. As additional security, Borrower assigns to Lender the rents of the Property, provided that Borrower shall, prior to an acceleration for breach as provided above or abandonment of the Property, have the right to collect such rents as they become due.
Upon acceleration for breach or abandonment of the Property, Lender, in person, by agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the Property and to collect the rents of the Property including those past due. All rents collected by Lender, its agent, or the receiver shall be applied first to payment of the costs of management of the Property and collection of rents, including, but not limited to receiver's fees, premiums on receiver's bonds and reasonable attorney's fees, and then to the sums secured by this Deed of Trust. Lender, its agent and the receiver shall be liable to account only for those rents actually received.
18. Prior Lienholder . The provisions of this Deed of Trust shall operate subject to the claims of prior lienholders to the extent of such claims.
19. Nonrecourse. Notwithstanding any provision of this Deed of Trust or any document evidencing or securing the Loan, Borrower, and Borrower’s principals, agents, officers, and successors in interest shall not be personally liable for the payment of the Loan or any obligation of the Loan , and in the event of a default Lender shall look solely to the Property subjec t to this Deed of Trust and to the rents, issues and profits thereof in satisfaction of the indebtedness evidenced by the Note; provided, that nothing in this condition and no action so taken shall operate to impair any obligation of Borrower under the Regulatory Agreement.
20. Reconveyance. Upon payment of all sums secured by this Deed of Trust, Lender shall request Trustee to reconvey the Property and shall surrender this Deed of Trust and all notes evidencing indebtedness secured by this Deed of Trust to T rustee. Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled to such reconveyance. Such person or persons shall pay all costs of recordation, if any. The recitals in the reconveyance of any matters or facts shall be conclusive proof of their truthfulness.
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 6 Mirasol Village Block C
21. Substitute Trustee. Lender, at Lender's option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed under this Deed of Trust. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee by this Deed of Trust and applicable law.
22. Request for Notice. Borrower and each party listed to receive Additional Notices request that copies of the notice of default and notice of sale be sent to their respective addresses.
23. Statement of Obligation. Lender may collect a reasonable fee for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California, as it may be amended from time to time.
24. Use of Property . Borrower shall not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed.
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 7 Mirasol Village Block C
IN WITNESS WHEREOF, Borrower has executed this Deed of Trust.
BORROWER (Trustor):
TWIN RIVERS PHASE 3, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
By: Twin Rivers Phase 3 MBS GP, Inc.,
a California corporation,
its administrative general partner
By:
Name: Hillary B. Zimmerman
Title: Vice President
By: Mirasol Village Block C LLC,
a California limited liability company,
its managing general partner
By: Sacramento Housing Authority Repositioning Program, Inc., a California nonprofit public benefit corporation,
its sole member
By:
Name: James Shields
Title: President
NOTARY ACKNOWLEDGMENT
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 8 Mirasol Village Block C
IN WITNESS WHEREOF, Borrower has executed this Deed of Trust.
THE PARTIES HAVE EXECUTED THIS LOAN AGREEMENT in Sacramento, California as of the Effective Date.
LENDER:
SACRAMENTO HOUSING AND REDEVELOPMENT
AGENCY
By: _______________________________________
La Shelle Dozier, Executive Director
Approved as to form:
___________________________________________
Lender Counsel
NOTARY ACKNOWLEDGMENT
Construction and Permanent Loan Agreement - HAF Loan - Leasehold Deed of Trust Page 9 Mirasol Village Block C
Exhibit 1: Legal Description
Real property in the City of Sacramento, County of Sacramento, State of California, described as follows:
LOT 3 OF THE FINAL MAP OF TWIN RIVERS REDEVELOPMENT - UNIT 2, SUBDIVISION NO. P17- 014.2, FILED FOR RECORD IN BOOK 420 OF MAPS, PAGE 5, OFFICIAL RECORDS OF SACRAMENTO COUNTY, CALIFORNIA, EXCEPTING THEREFROM ALL PORTIONS OF LOT 3
DESIGNATED AND DEPICTED ON SUCH MAP AS EASEMENTS FOR AND WITHIN STREETS, AVENUES, AND PUBLIC RIGHTS-OF-WAY.
APN: 001-0320-005-0000
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 1 Mirasol Village Block C
Exhibit 5: Regulatory Agreement Form
NO FEE DOCUMENT:
Entitled to free recording
per Government Code §§6103 and 27383.
Recording requested by and
when recorded, return to:
SACRAMENTO HOUSING AND
REDEVELOPMENT AGENCY
801 12th Street – 4th Floor
Sacramento, CA 95814
Attention: Portfolio Management
REGULATORY AGREEMENT FOR RESIDENTIAL RENTAL PROPERTY
AND DECLARATION OF RESTRICTIVE COVENANTS AFFECTING REAL PROPERTY
PROJECT NAME: Mirasol Village Block C
PROJECT ADDRESS
AND ASSESSOR’S
PARCEL NUMBER:
320 Dos Rios Street, Sacramento, CA 95811
APN: 001-0320-005-0000
FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHIC H IS ACKNOWLEDGED , AGENCY AND OWNER
HAVE ENTERED THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS AFFECTING REAL PROPERTY (REGULATORY AGREEMENT) AS OF THE EFFECTIVE DATE.
1. GENERAL. This Regulatory Agreement includes the Exhibits listed below which are attached to and inc orporated in this Regulatory Agreement by this reference.
2. DEFINITIONS. The capitalized terms in this Regulatory Agreement shall have the meanings assigned in the following table and in the body of the Regulatory Agreement as the context indicates . Terms being defined are indicated by quotation marks.
TERM DEFINITION
“Effective Date” This Regulatory Agreement shall be effective as of the following date: May 1, 2022 “Agency” Housing Authority of the City of Sacramento
a public body corporate and politic
“Agency Address” Agency’s business address is 801 12th Street, Sacramento, California 95814 “Owner” Twin Rivers Phase 3, L.P., a California limited partnership “Owner Address”
Owner’s business address is as follows: Twin Rivers Phase 3, L.P. c/o McCormack Baron Salazar, Inc.
720 Olive Street, Suite 2500
St. Louis, MO 63101
Attention: Hillary Zimmerman
“Jurisdiction” City of Sacramento
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 2 Mirasol Village Block C
“Property”
That certain leasehold estate in real property and fee interest in the improvements located on the real property which is subject to this Regulatory Agreement as further described in the legal description, attached as Exhibit 1 – Legal Description of the Property and incorporated in this Regulatory Agreement by this reference.
“Funding
Agreement”
The Funding Agreement between
Agency and Owner as follows:
Titled: Construction and Permanent Loan
Agreement
Dated: May 1, 2022
“Agency Funding”
The Agency Funding made by Agency to Owner under the Funding Agreement for development of the Property
“Agency Funding
Amount“
The amount of the Agency Funding, as follows: $5,000,000.00 “Funding
Requirements”
The legal restrictions on the use of the funds that Agency has used to make the Agency Funding, as applicable to and restricting the Property . The Funding Requirements are set out in Exhibit 2 – Funding Requirements.
“Approved Use”
The only permitted use of the Property, which is as a residential property available for rent by the general public and containing not less than the following number of units:
84 3. RESTRICTED PARCELS; APPROVAL OF LEASES. In order to assure that the proper number and types of units have been rented in accordance with this Regulatory Agreement, Owner is prohibited from leasing any Unit within the Project until either (i) the parties have recorded against the Property a list of the Restricted Units, or (ii) the Agency has approved the individual lease or template lease form to be used by Owner for the Restricted Units. The following numbers of Units are restricted for each respective funding source . The initial 2022 rents for the respective units shall be the following; provided, however, that upon the request of Owner, Owner and Agency may agree to a schedule for the Restricted Units that complies with the following affordability requirements as of the date when the Projec t is available for occupancy .
In any event the rents for the respective units may be adjusted not more often than annually and continue to comply the Funding Requirements. The rents shall include allowance for utilities and costs reasonably related to th e rental of the units, as may be required in determining the rents for the applicable funding sources. Only units indicated under Agency Funding Source are assisted by the Agency . Nevertheless, Owner shall assure the affordability of all of the following units at the named affordability levels . Additionally, higher contract rents may be charged for units subject to U.S .
Department of Housing and Urban Development Housing Assistance Payment Vouchers, provided that the actual rents minus monthly allowances for utilities and services paid by the tenants do not exceed the affordability levels for the respective units. Notwithstanding any conflicting provision in the Funding Requirements, the Initial Rent per Unit per Month listed in this Regulatory Agreement shall be paramount and controlling.
Agency Funding
Source:
Other Funding
Source:
Affordability
Level:
Number of
Units: Restricted Units:
Initial Rent
per Unit per
Month:
Housing Authority
Funds (HAF)
N/A 60% Area Median
Income (AMI)
8 1-Bedroom $1,087
HAF N/A 60% AMI 10 2-Bedroom $1,224
HAF N/A 80% AMI 3 1-Bedroom $1,450
HAF N/A 80% AMI 3 2-Bedroom $1,631
TOTAL UNITS 24
4. MANAGEMENT AGREEMENT. The Owner agrees that at all times the Project shall be managed by a property manager (i) approved by the Agency in its reasonable discretion and (ii) who has successfully managed at least five projects over
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 3 Mirasol Village Block C
forty units in size and subject to a recorded regulatory agreement for at least three years’ prior to the application, without any record of material violations of discrimination restrictions or other state or federal laws or regulations or local governmental requirements applicable to such projects (th e “Manager”). The Owner shall submit to the Agency from time to time such information about the background, experience and financial condition of any existing or proposed Manager as the Agency may reasonably require to determine whether such Manager meets the requirements for a Manager set forth herein . The Agency reserves the right to conduct periodic reviews of the management practices and of the Manager to determine if the Project is being operated and managed in accordance with the requirements and standards of this Loan. The Owner agrees to cooperate with the Agency in such reviews.
If the Agency determines in its reasonable judgment that the Project is not being operated and managed in accordance with one or more of the material requirements or standards of the Funding Agreement, the Agency may deliver notice to the Owner requesting replacement of the Manager, which notice shall state clearly the reasons for such request, subject to the notice and cure provisions of the approved property management contract and subject to the requirements of the loan documents evidencing the Senior Loan (as defined in the Funding Agreement). Within 30 days of receipt by Owner of such written notice, the Agency's staff and Owner shall meet in good faith to consider methods for improving the financial and operating status of the Project, including, without limitation, replacement of the Manager. If, after such meeting, and following the Manager’s opportunity to cure as set forth in the approved property management contract, the Agency’s staff recommends in writing the replacement of the Manager, Owner shall promptly, and in no event later than 60 days submit to the Agency, a proposal to engage a new Manager meeting the requirements of this provision . The Agency shall respond within 30 days to such proposal or such approval shall be deemed given . Upon receipt of such consent or deemed consent, the Owner shall promptly terminate the existing Manager’s engagement and engage the new Manager. The Agency will notify the ho lder of the Senior Loan of the Authority’s recommendation to the Lessee to replace the Manager.
The Owner shall not enter into any management agreement or arrangement with any party with respect to the management of the Project without the Agency's prior written consent, such consent not to be unreasonably withheld or delayed. The Owner shall not materially modify, amend or terminate any approved management agreement (other than as required to comply with the terms of the Funding Agreement and/or applicable law) without the Agency's prior written consent, which consent will not be unreasonably withheld or delayed; provided, however, that such consent shall not be required to extend the term of an existing management agreement.
Approved Management Company
The John Stewart Company
Notice
Any notice or other communication given or made pursuant to this Regulatory Agreement shall be in writing and shall be deemed given if delivered by email, personally or by courier, sent by overnight express delivery or mailed by registered or certified mail (return receipt requested), postage prepaid, to a party at its respective address set forth below:
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 4 Mirasol Village Block C
To the Owner:
Twin Rivers Phase 3, L.P.
c/o McCormack Baron Salazar, Inc.
720 Olive Street, Suite 2500
St. Louis, MO 63101
Attention: Hillary Zimmerman
With a copy to:
Klein Hornig LLP
101 Arch Street, Suite 1101
Boston, Massachusetts 02110
Attention: Daniel M. Rosen
And to:
SHARP
801 12th Street, 4th Floor
Sacramento, CA 95814
Attention: Asset Manager
With a copy to:
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, CA 94612
Attention: Isabel Brown
To the Permanent Lender:
Citibank, N.A.
388 Greenwich Street, Trading 4th Floor
New York, New York 10013
Attention: Transaction and Asset Management Group
Re: Mirasol Village Block C Apartments Deal ID No. 60001316 Facsimile: (212) 723-8209
And to:
Citibank, N.A.
325 East Hillcrest Drive, Suite 160
Thousand Oaks, California 91360
Attention: Operations Manager/Asset Manager
Re: Mirasol Village Block C Apartments Deal ID No. 60001316 Facsimile: (805) 557-0924
With a copy to:
Citibank N.A.
c/o Berkadia Commercial Servicing Department
323 Norristown Road, Suite 300
Ambler, Pennsylvania 19002
Attention: Client Relations Manager
Re: Mirasol Village Block C Apartments Deal ID No. 60001316 Facsimile: (215)328-0305
5. SPECIAL PROVISION. Owner shall also comply with the following special provision.
Special Provision
NN/A/A
6. REPRESENTATIONS. Agency has provided Agency Funding to Owner to develop the Property, subject to the terms of the Funding Agreement. For purposes of this Section 6, “Property” shall mean Property or Restricted Unit as the context may indicate. This Regulatory Agreement is a substantial part of the consideration to Agency for making the Agency
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 5 Mirasol Village Block C
Funding. The funds used by Agency under the Funding Agreement are funds from public funding sources administered by Agency and their use is subject to certain requirements some of which are embodied in this Regulatory Agreement .
Further, Agency has made the Agency Funding in accordance with the laws, rules and regulations to which Agency is subject. Therefore, Agency has made the Agency Funding conditioned upon Owner’s agreement, for itself and its successors and assigns, to comply with all provisions of this Regulatory Agreement, including without limitation, the Funding Agreement. Owner represents that it has had full opportunity to make itself independently familiar with such limitations and restrictions, and Owner accepts them and agrees to comply fully with them.
7. COVENANTS. Owner makes the following covenants. Unless Owner has received the prior written consent or Agency approval otherwise, Owner shall fully comply with each and every covenant . Except as otherwise stated in this Regulatory Agreement, the following covenants shall have a term that is the same as the longest term specified in the Funding Requirements.
a. Owner shall use and permit others to use the Property only for the Approved Use.
b. Owner shall assure full compliance with the Funding Requirements.
c. Owner shall not transfer or encumber any of the Property or permit the conveyance, transfer, or encumbrance of the Property unless such assignee, transferee or encumbrancer has agreed, in writing and in a form suitable for recordation, to be bound by the terms of this Regulatory Agreement.
d. Owner shall not cause and shall not permit expansion, reconstruction, or demolition of any part of improvements on the Property, except as provided by the Funding Agreement.
e. Owner shall maintain the Property and the building improvements, grounds and equipment of the Property in good repair and condition and in compliance with all applicable housing quality standards and local code requirements. Owner shall maintain the Property in good condition and sh all keep the Property reasonably free from graffiti and unrepaired vandalism and from accumulation of abandoned property, inoperable vehicles, unenclosed storage, debris, and waste materials. In the event of a casualty loss, Owner shall cause the restoration or replacement of the Property, in a timely manner and provided that such restoration or replacement is then economically feasible.
f. Owner shall not cause and shall not permit discrimination based on race, color, national origin, religion, sexual orientation, gender, familial status, age or disability in the sale, lease, or rental or in the use or occupancy of the Property.
Owner covenants by and for him/her/itself, his/her/its heirs, executors, administrators, and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. This covenant against discrimination shall continue in perpetuity.
g. Owner shall not refuse to rent, evict, or otherwise treat someone differently because of that person’s status as a victim of domestic violence, dating violence, sexual assault, or stalking, in compliance with the Violence Against Women Act. This protection is available regardless of sex, gender identity, or sexual orientation.
h. Owner shall assure compliance with the obligations imposed by the federal Personal Responsibility and Work Opportunity Act (Public Law 104-193, commonly known as the Welfare Reform Act) as amended by California Welfare and Institutions Code Section 17851, which restrict the Agency funding of federal, state or local benefits to persons who are not citizens or qualified aliens as defined in such act.
i. Owner shall provide Agency approved resident services at the development according to the following minimum schedule of 15 hours of services per week, including but not limited to:
(1) Coordinator: Four (4) hours per week (maximum)
(2) After School Programming: Eight (8) hours per week (two hours per day and four days per week minimum) (3) Additional Programming: Balance of minimum three (3) hours per week shall include, but not limited to:
(a) Workforce development support and activities
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 6 Mirasol Village Block C
(b) Education classes such as nutrition, exe rcise, health resources, health insurance application assistance, annual on-site health fairs, and English as a Second Language (ESL) classes; (c) Socialization activities such as bingo, gardening, and community building events; and/or (d) Other services such as transportation assistance, counseling assistance, and employee readiness and job search assistance.
j. Owner shall not pass utility charges paid by Owner, including water, sewer, and garbage collection charges, through to tenants as an add-on to their contracted rent subject to adjustments permitted by applicable utility allowances.
k. Owner shall not make payment of rental insurance premiums a condition of occupancy. If Owner requires renters’ insurance, the policy premium must be deducted from the tenant’s rent . Owner shall not add the insurance premium to the tenant’s rent in either the initial or subsequent years.
l. Owner shall ensure all of the units, indoor common areas and buildings are smoke free.
8. NATURE OF COVENANTS. The provisions contained in this Regulatory Agreement are covenants which subject and burden the Property, as covenants running with the land . It is intended and agreed that the agreements and covenants provided in the Agreement shall be covenants running with the land and equitable servitudes on the land and that they shall, in any event, and without regard to technical classifications or designation, be binding, to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable by, the Agency, the Agency's successors and assigns, any other governmental entity acting within its authority and any successor in interest to Agency's interest under this Regulatory Agreement against the Owner, its successors and assigns and every successor in interest to all or any part of the Property.
9. TERM. The term of this Regulatory Agreement shall commence on the Effective Date and continue until the terms of all of the covenants, including without limitation, the terms stated in the Funding Requirements, have expired or otherwise been terminated. Notwithstanding the term in the Funding Requirements, the term of this Regulatory Agreement shall be fifty-five (55) years from the Effective Date.
10. EXPIRATION OF AFFORDABILITY PERIOD. Owner agrees the rent of "in -place” tenants at the conclusion of Term will continue to be governed by the applicable affordability restrictions, so long as those tenants continue to live in the development.
11. REVIVAL OF COVENANTS AFTER FORECLOSURE. The affordability restrictions shall be revived after foreclosure, or deed in lieu of foreclosure according to the original terms if, during the original term of this Regulatory Agreement, if the Owner, who was owner of record before the termination event, or a party related to the Owner obtains an ownership interest in the Property or Restricted Unit, as the case may be . For purposes of this provision, a related party is anyone with whom the Owner has or had family or busines s ties; provided that such interest would not be considered a “remote interest” in the usual and customary use of the term.
12. MULTIPLE FUNDING REQUIREMENTS. If more than one form of Funding Requirements is attached, each Restricted Unit shall be subject to the Funding Requirements for every Funding Source applied to the respective Restricted Unit. If the terms of the Funding Requirements shall conflict as to any Restricted Unit, the Funding Requirements shall be construed so as to meet all applicable requi rements for the respective Restricted Unit, including without limitation the use of the most restrictive requirements and the use of the “Recapture” formula that results in the greatest repayment to the Agency.
13. RECORDKEEPING AND REPORTING. Upon request o f Agency, Owner shall promptly provide any additional information or documentation requested in writing by the Agency to verify Owner's compliance with the provisions of this Regulatory Agreement. At the written request of the Agency, Owner shall, within a reasonable time following receipt of such request, furnish reports and shall give specific answers to questions upon which information is desired from time to time relative to the income, assets, liabilities, contracts, operations, and condition of the p roperty and the status of the Deeds of Trust.
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 7 Mirasol Village Block C
14. AUDIT AND INSPECTION. The Property and all related equipment, buildings, plans, offices, books, contracts, records, documents and other related papers shall at all times be maintained in reasonable condition for audit and shall be subject to examination by the Agency or its agents. The books and accounts of the operations of the Property and of the Property shall be kept in accordance with generally accepted accounting principles . Owner shall provide Agency access to the Property and its tenants during reasonable hours for the purpose of reviewing Owner’s compliance with this Regulatory Agreement.
15. INDEMNITY FOR OWNER’S FAILURE TO MEET LEGAL REQUIREMENTS. Owner shall indemnify and hold Agency, its officers, directors, and employees harmless from any and all liability arising from Owner’s failure to comply with the covenants, conditions and restrictions contained in this Regulatory Agreement or to comply with all other laws, rules, regulations and restrictions related to the use of Agency Funding . Without limitation, such indemnity shall include repayment to the appropriate parties of rents or sales proceeds in excess of amounts authorized to be charged and repayment to the Agency of the costs of funds and the value of lost opportunities resulting from the required repayment by Agency to the funding source of funds improperly used.
16. CHANGES WITHOUT CONSENT OF TENANTS, LESSEES, OR OTHERS. Only Agency and its successors and assigns, and Owner (subject to the reasonable approval of Owner's lender in accordance with its rights under its loan terms) shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants or restrictions contained in this Agreement without the consent of any easement holder, licensee, other mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property.
17. DEFAULT. Upon a breach of any of the provisions of this Regulatory Agreement by Owner, the Agency may give written notice of such breach to Owner by registered or certified mail. If such violation is not corrected to the satisfaction of Agency within thirty (30) days after the date such notice is mailed or wit hin such further time as the Agency may reasonably determine is necessary to correct the breach, and without further notice to Owner, the Agency may declare a default under the Agreement, effective on the date of such declaration of default, and upon such default the Agency may:
(a) take any action then available under the Funding Agreement for a default under the Funding Agreement and (b) apply to any court for specific performance of this Regulatory Agreement, for an injunction against any violation of th e Agreement, for the appointment of a receiver to take over and operate the Property in accordance with the terms of this Regulatory Agreement, for money damages or for such other relief as may be appropriate, since the injury to the Agency arising from a default under any of the terms in this Regulatory Agreement would be irreparable, and the amount of damage would be difficult to ascertain.
18. REGULATORY AGREEMENT VIOLATIONS. Owner shall pay the program compliance fees and expenses to Agency set forth in Compliance Violations and Actions (Exhibit 3 - Compliance Violations and Actions) in reimbursement of the amounts and time expended by Agency to insure Owner’s compliance with State statutes and federal regulations and Owner’s obligations under the Regulatory Agreement as a result of the Owner not meeting its obligations and reporting requirements. No compliance fee will be assessed for one incident of each type of compliance violation per annual inspection provided the violation is corrected within the spe cified corrective time period . The second and subsequent violations will be assessed compliance fees as detailed in the Compliance Violations and Actions tables.
19. BINDING SUCCESSORS IN INTEREST. This Regulatory Agreement shall bind and the benefits shall inure to the Owner, its successors in interest and assigns, and to the Agency and its successors for the term of this Regulatory Agreement.
20. CONTRADICTORY AGREEMENTS. Owner warrants that it has not, and will not, execute any other agreement with provisions contradictory of or in opposition to, the provisions of this Regulatory Agreement, and that, in any event, the requirements of this Regulatory Agreement are paramount and controlling as to the rights and obligations set forth and supersede any other requirements in conflict with this Regulatory Agreement.
21. COMPLIANCE AMENDMENTS. If revisions to the provisions of this Regulatory Agreement are necessitated to comply with the laws or regulations governing the Agency Funding, Owner agrees to execute modifications to this Regulatory Agreement that are needed to comply with such laws or regulations.
22. ATTORNEYS' FEES. If the services of any attorney are required by any party to secure the performance of this Regulatory Agreement or otherwise upon the br each of default of another party, or if any judicial remedy or mediation is necessary to enforce or interpret any provision of this Regulatory Agreement or the rights and duties of any person in
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 8 Mirasol Village Block C
relation to this Regulatory Agreement, the prevailing party s hall be entitled to reasonable attorneys' fees and costs, in addition to any other relief to which such party may be entitled . Any award of damages following judicial remedy or arbitration as a result of this Regulatory Agreement or any of its provisions shall include an award of prejudgment interest from the date of the breach at the maximum amount of interest allowed by law. The prevailing party shall mean the party receiving an award in arbitration or a judgment in its favor, unless the award or judgme nt is less favorable than the best settlement offered in writing in a reasonable manner by the other party, in which case the prevailing party is the other party.
23. SEVERABILITY. The invalidity of any clause, part or provision of this Regulatory Agreement shall not affect the validity of the remaining portions.
24. ELECTION OF REMEDIES. To the extent applicable, in the event of any breach of the covenants, conditions and restrictions contained in this Regulatory Agreement, the Agency shall reasonably endeavor to remedy such breach by conference and conciliation. If, in the opinion of Agency, the Agency and Owner are unable mutually to agree upon a suitable remedy or the circumstances so warrant, such breach may be enjoined or abated by appropriate proceedings brought by the Agency.
Agency may institute or prosecute in its own name, any suit Agency may consider advisable in order to compel performance of any obligation of any owner to develop and maintain the subject property in conformity with this Regulatory Agreement and to remedy any default of this Regulatory Agreement . Agency may also seek a decree requiring removal of any improvements constructed on the Property which improvements are designed for uses not permitted under this Regulatory Agreement and w hich improvements are unsuitable only for uses not permitted under this Regulatory Agreement.
The remedies of the Agency under this Regulatory Agreement are cumulative, and the exercise of one or more of such remedies, including, without limitation, remed ies under the Funding Agreement shall not be deemed an election of remedies and shall not preclude the exercise by the Agency of any one or more of its other remedies.
25. NO WAIVER. No waiver by the Agency of any breach of or default under this Regulatory Agreement shall be deemed to be a waiver of any other or subsequent breach or default.
26. NOTICES. Written notices and other written communications by and between the parties shall be addressed to the Owner at the Owner Address and to the Agency at the Agency Address or such other address as each respective party has designated by written notice to the other party.
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 9 Mirasol Village Block C
THE PARTIES HAVE EXECUTED THIS REGULATORY AGREEMENT in Sacramento, California as of the Effective Date
OWNER :
TWIN RIVERS PHASE 3, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
By: Twin Rivers Phase 3 MBS GP, Inc.,
a California corporation,
its administrative general partner
By:
Name: Hillary B. Zimmerman
Title: Vice President
By: Mirasol Village Block C LLC,
a California limited liability company,
its managing general partner
By: Sacramento Housing Authority
Repositioning Program, Inc.,
a California nonprofit public
benefit corporation,
its sole member
By:
Name: James Shields
Title: President
NOTARY ACKNOWLEDGMENT
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 10 Mirasol Village Block C
THE PARTIES HAVE EXECUTED THIS REGULATORY AGREEMENT in Sacramento, California as of the Effective Date
AGENCY:
HOUSING AUTHORITY OF THE CITY OF
SACRAMENTO, A PUBLIC BODY CORPORATE AND
POLITIC
By: _______________________________________
La Shelle Dozier, Executive Director
Approved as to form:_________________________
Agency Counsel
NOTARY ACKNOWLEDGMENT
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 11 Mirasol Village Block C
EXHIBIT 1
LEGAL DESCRIPTION
Real property in the City of Sacramento, County of Sacramento, State of California, described as follows:
LOT 3 OF THE FINAL MAP OF TWIN RIVERS REDEVELOPMENT - UNIT 2, SUBDIVISION NO. P17-014.2, FILED FOR RECORD IN BOOK 420 OF MAPS, PAGE 5, OFFICIAL RECORDS OF SACRAMENTO COUNTY, CALIFORNIA, EXCEPTING THEREFROM ALL PORTIONS OF LOT 3 DESIGNATED AND DEPICTED ON SUCH MAP AS EASEMENTS FOR AND WITHIN STREETS, AVENUES, AND PUBLIC RIGHTS-OF-WAY.
APN: 001-0320-005-0000
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EXHIBIT 2
COMPLIANCE VIOLATIONS AND ACTIONS
(All payments due and payable within 30-days of assessment)
Tenant Eligibility and Affordability Violations
Compliance
Violation
Fees and Actions* Corrective Time Period
Tenants over income
at initial move-in
Initial $500 per unit, again every 90 days
until another income qualified tenant is
housed.
Correction: Evict tenant if tenant fraud.
Otherwise, next available unit must be
Affordable and rented to an Income-
Qualified tenant.
90 days from discovery date to avoid additional
$500 charge every 90-days the problem is not
corrected.
Incorrect eligibility
documentation
Initial $50 per file for incorrect
calculations, verifications, or required
documents. Additional $50 per month if
not corrected.
Correction: Submit copies of corrections
to compliance staff as applicable.
30 days from discovery date to submit copies of
corrections to compliance staff to avoid additional
$50 per month if not corrected
Failure to complete
annual
recertifications
Initial $250 for each incomplete file.
Additional $50 per month if not corrected.
Correction: Submit copies of
recertifications to compliance staff.
30 days from discovery date to submit corrections
to avoid additional $50 per month if not
corrected.
Failure to maintain
tenant eligibility
records
Initial $500 per unit, again every 90-days
thereafter until new records in place.
Additional $100 per unit per month the
project remains out of compliance.
Correction: Immediately establish new
files/records.
30 days from discovery date to submit copies of
new records to avoid additional $100 per unit per
month the project remains out of compliance.
Incorrect Rents Reimbursement to tenant of the entire
amount overcharged. $100 payment to
Agency for each over-charged unit.
Correction: Refund tenant with letter of
correction.
30 days from discovery date to avoid additional
$100 per overcharged unit per month fee to
Agency.
Failure to submit
complete and
accurate monthly
Bond Report by due
date
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit complete
and accurate report to avoid additional $100 per
day charge.
Failure to comply
with approved
Management Plan
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
30 days from discovery date to submit corrections
to avoid additional $100 per day charge.
Failure to submit
complete and
accurate quarterly
Resident Services
report by due date
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit corrections
to avoid additional $100 per day charge.
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Failure to provide a
resident service
required by Resident
Services Plan
Initial $250 per service. Additional $100
per day until service is provided.
Correction: Implement required service or
new resident services plan submitted and
approved; approved plan implemented.
7 days from discovery date to implement required
service or provide new resident services plan to
avoid additional $100 per day charge; 30 days
from discovery date to implement new plan to
avoid additional $100 per day charge.
Noncompliant lease $100 per noncompliant lease.
Correction: Prepare and execute approved
lease or addendum to address the
deficiency.
30 days from discovery date to avoid additional
$100 per noncompliant lease per month charge to
Agency.
Housing Quality Standards Violations
Compliance
Violation
Fees and Actions* Corrective Time Period
Verifiable existence
of Toxic Mold
$200 per unit. Additional $75 per day
charge each time efforts fall outside of
corrective timeframes.
Correction: Prepare and submit action plan
that addresses scope of work and timetable
to complete. Relocate tenant if necessary.
Obtain certified clearance that mold has
been abated and unit is safe to occupy
once again.
3-days from discovery date to submit action plan
to address. 10-days to relocate tenant if necessary.
30-days to obtain certification that unit is mold
free. $75 per day additional charge each time
efforts fall outside of these timeframes.
Broken pipes and
plumbing facilities
$200 per unit. Additional $75 charge per
day if not corrected.
Correction: Repair/replace as necessary
7-days from discovery date to avoid additional
$75 per day each day thereafter corrective action
not taken.
Smoke detectors not
working in the units
$200 per unit with non-functional smoke
detector. Additional $75 charge per day if
not corrected.
Correction: Replace batteries or non-
working unit within 24 hours.
Within 24 hours of discovery date to avoid $75
per day additional charge each day thereafter
corrective action not taken.
Windows with large
cracks or missing
glass
$200 per unit. Additional $75 charge per
day if not corrected.
Correction: Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.
Infestation of roaches
or vermin
$200 per infested unit. Additional $75
charge per day if not corrected.
Correction: Letter from pest control
company verifying removal of pests with
paid invoice to compliance staff.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.
Non-working heating
unit (Winter) or air
conditioning unit
(Summer)
$500 per nonworking unit. Additional $75
charge per day if not corrected. $75 re-
inspection fee if necessary to verify
problem corrected.
Correction: Repair/replace as necessary.
Within 24 hours of discovery date to avoid $75
per day additional charge each day thereafter
corrective action not taken.
Excessive amount
of urine/ feces
$200 per unit. Additional $75 charge per
day if not corrected.
Correction: Clean unit as necessary and
address problem as the lease allows.
Submit correction letter with
documentation to compliance staff.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.
Excessive amount of
trash/garbage in the
unit
$75 per unit. Additional $75 charge per
day if not corrected.
Correction: Clean unit and send letter of
correction to compliance staff.
14-days from date of discovery to avoid an
additional $75 per day thereafter each day
corrective action not taken.
Construction and Permanent Loan Agreement - HAF Loan - Regulatory Agreement Page 14 Mirasol Village Block C
Hazardous exterior
conditions
$500 for hazardous conditions. Additional
$75 charge per day if not corrected. $75
re-inspection fee.
Correction: Clean and/or repair as
necessary. Re-inspection to verify problem
addressed.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.
Large holes
walls/ceiling
$100 per unit. Additional $75 charge per
day if not corrected.
Correction: Submit correction letter with
documentation to compliance staff.
30-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.
Non-Operable
Security Gate
$500 per non-working gate. Additional
$75 charge per day if not corrected. $75
re-inspection fee if necessary to verify
problem corrected.
Correction: Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.
No Security Cameras
(if cameras required)
$250 per discovery. Additional $75
charge per day if not corrected. $75 re-
inspection charge to verify problem
corrected.
Correction: Replace cameras.
30-days from the date of discovery to avoid $75
per day additional charge each day thereafter
corrective action not taken.
Non-working
Security Cameras
$100 per camera per discovery.
Additional $75 charge per day if not
corrected. $75 re-inspection charge to
verify problem corrected. Correction:
Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.
Non-working or non-
accessible
amenities/services
$100 per item per discovery. Additional
$75 charge per day if not corrected. $75
re-inspection charge to verify problem
corrected. Correction: Repair/replace as
necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.
* No compliance fee will be assessed for one incident of each type of compliance violation per annual inspection provided the violation is corrected within the specified corrective time period. The second and subsequent violations will be assessed compliance fees as detailed in the Tenant Eligibility and Affordability Violations and Housing Quality Standards Viola tions tables.
Mirasol Village Block C Page 1
Joint Escrow Instructions – HAF, CNI, and Ground Lease Exhibit 6: Escrow Instructions
JOINT ESCROW INSTRUCTIONS
FOR AGENCY AND HACOS LOANS
MIRASOL VILLAGE BLOCK C
“Effective Date” May 1 , 2022
Agency, HACOS, and Borrower execute these Escrow Instructions as of the Effective Date. This document, including attachments and any amendments and additions, shall constitute the joint escrow instructions of Agency and Borrower for the Agency loan secured by the Property.
ARTICLE I. GENERAL TERMS.
1. GENERAL. These Escrow Instructions, in addition to items listed below, include Article II Instructions, which is attached to and incorporated in these Escrow Instructions by this reference.
2. DEFINITIONS. The capitalized terms in these Escrow Instructions shall have the meanings assigned in Article I General Terms and as defined in Article II Instructions. (Terms being defined are indicated by quotation marks.)
“Title
Company”
First American Title Company
Address: 8182 Maryland Ave., Suite 400, St. Louis, MO 63105 “Escrow” with
Title Company
Escrow
Number:
NCS-1037243-STLO Attention: Kevin T. Twellman
“Agency” Housing Authority of the County of Sacramento, a public body, corporate and politic (HACOS) and Housing Authority of the City of Sacramento, a public body, corporate and politic (HACS) Address: 801 12th Street, Sacramento, CA 95814
Attention: Whitney Bonner
“Borrower” Twin Rivers Phase 3, L.P.
Address: Twin Rivers Phase 3, L.P.
c/o McCormack Baron Salazar, Inc.
720 Olive Street, Suite 2500
St. Louis, MO 63101
Attention: Hillary Zimmerman
“Closing Date” May **, 2022 is the date for close of the Escrow, as it may be extended. “HACOS” Housing Authority of the County of Sacramento, a public body, corporate and politic Address: 801 12th Street, Sacramento, CA 95814
Attention: Whitney Bonner
“HACS” Housing Authority of the City of Sacramento, a public body, corporate and politic Address: 801 12th Street, Sacramento, CA 95814
Attention: Whitney Bonner
“Property” Address
and
Assessor’s
Parcel
Number
(APN):
1200 Richards Boulevard, Sacramento, CA 95811
APN:001-0320-005-000
Mirasol Village Block C Page 2
Joint Escrow Instructions – HAF, CNI, and Ground Lease Description of
the transaction
1. The following loan is made from HACOS to the Borrower: CNI Construction and Permanent Loan, made pursuant to a loan agreement (the “CNI” Loan Agreement”), evidenced by promissory notes (the “CNI Note”); and secured by deeds of trust (the “CNI Trust Deed); and HACOS will record regulatory agreements and declaration of restrictive covenants against the Property (the “CNI Regulatory Agreement); made effective May 1, 2022. a. CNI Loan is $2,000,000.00
2. The following loan is made from HACS to the Borrower: Housing Authority Fund Construction and Permanent Loan, made pursuant to a loan agreement (the “HACS” Loan Agreement”), evidenced by promissory notes (the “HACS Note”); and secured by deeds of trust (the “HACS Trust Deed); and HACS will record regulatory agreements and declaration of restrictive covenants against the Property (the “HACS Regulatory Agreement); made effective May 1, 2022.
a. HAF $5,000,000.00
3.The following loan is made from HACOS to the Borrower: Ground Lease Loan, made pursuant to a loan agreement (the “Ground Lease” Loan Agreement”), evidenced by promissory notes (the “Ground Lease Note”); and secured by deeds of trust (the “Ground Lease Trust Deed”); and HACOS will record Memorandum of Ground Lease against the Property (the “Memorandum of Ground Lease”; made effective May 1, 2022.
a. Ground Lease Loan is $378,000.00
“Recorded Documents”- The
following documents are to be
recorded in the order listed
(top being first in priority).
Copies of the Recorded
documents are attached.
Documents:
1. “HACOS” CNI Regulatory Agreement
2. “HACS” HAF Regulatory Agreement
3.“HACOS” Memorandum of Ground Lease
4. “HACOS” CNI Deed of Trusts
5. “HACS” HAF Deed of Trusts
6. “HACOS” Ground Lease Trust Deed
Marked for return to:
Sacramento Housing and
Redevelopment Agency
Development Finance
801 12th Street
Sacramento, CA 95814
Attn: Whitney Bonner
“Agency Items” and
“HACOS and “HACS”
Items”
1. “HACOS” CNI Construction – Permanent Loan Note
2. “HACS” HAF Construction – Permanent Loan Note
3. “HACOS” Ground Lease Loan Note
4. “HACOS” CNI Loan Agreement
5. “HACS” HAF Loan Agreement
6. “HACOS” Ground Lease
7. Joint Escrow Instructions
“Borrower Items” Conformed copies of the executed and recorded documents.
“Special Provisions”:
Title Policy shall, in addition to customary endorsements, bear the following endorsements:
ALTA 9.6 and 9.7 (or CLTA 100) Covenants, Conditions or Restrictions ALTA 25 (or CLTA 116) Improvements Endorsement
CLTA 101.2 Mechanic’s Lien Endorsement ( Notice of Completion Endorsement) – After Construction is complete
Mirasol Village Block C Page 3
Joint Escrow Instructions – HAF, CNI, and Ground Lease
“Agency Title Policy ALTA
Extended Lender” in the form
of an ALTA Policy insuring
that the following are valid
liens against the property:
Documents and Coverage Amount:
1. CNI Trust Deed - $2,000,000.00
2. HAF Trust Deed - $5,000,000.00
3. Ground Lease Loan - $378,000.00
The title policies shall be
subject only to the following
“Conditions of Title”:
As set forth in the final approved Pro Forma
Policy.
Dated: On or about May
23, 2022
Number: NCS-1037243-STLO
Mirasol Village Block C Page 4
Joint Escrow Instructions – HAF, CNI, and Ground Lease
THE PARTIES HAVE EXECUTED THESE ESCROW INSTRUCTIONS in Sacramento, California as of the date first written above.
BORROWER:
Twin Rivers Phase 3, L.P.,
a California limited partnership
By: Twin Rivers Phase 3 MBS GP, Inc.,
a California corporation,
its administrative general partner
By:
Name: Hillary B. Zimmerman
Title: Vice President
By: Mirasol Village Block C LLC,
a California limited liability company,
its managing general partner
By: Sacramento Housing Authority
Repositioning Program, Inc.,
a California nonprofit public
benefit corporation,
its sole member
By:
Name: James Shields
Title: President
Mirasol Village Block C Page 5
Joint Escrow Instructions – HAF, CNI, and Ground Lease THE PARTIES HAVE EXECUTED THESE ESCROW INSTRUCTIONS in Sacramento, California as of the date first written above.
AGENCY:
SACRAMENTO HOUSING AND REDEVELOPMENT
AGENCY, A JOINT POWERS AGENCY
By: ___________________________________
La Shelle Dozier
Executive Director
HOUSING AUTHORITY OF THE CITY OF
SACRAMENTO, A PUBLIC BODY, CORPORATE AND
POLITIC
By: ___________________________________
La Shelle Dozier
Executive Director
Mirasol Village Block C Page 6
Joint Escrow Instructions – HAF, CNI, and Ground Lease ARTICLE II. INSTRUCTIONS
1. CLOSING DATE. Escrow shall close on or before the Closing Date as it may be changed from time to time by written agreement of Borrower and Agency.
2. CONDITIONS TO CLOSE OF ESCROW. “Close of Escrow” means the fulfillment of the Escrow terms and conclusion of the Escrow, including, without limitation, the execution of unexecuted documents, the recordation of documents specified for recording, the issuance of title insurance policies, the payment of fees and the delivery of funds and documents as directed in the escrow instructions for the Escrow. The Close of Escrow shall occur on the Closing Date.
2.1. CONDITIONS. The following are conditions to the Close of Escrow:
2.1.1. The conditions pre cedent to performance stated in the Recorded Documents are satisfied as of the Closing Date.
2.1.2. Within five days of the completion of recordation for all recorded transaction documents following Close of Escrow, Title Company shall issue the Agency Title Insurance to Agency (at Borrower’s cost) in the amount stated. The Agency Title Insurance shall include all usual and customary endorsements and any endorsements and other commitments as Agency may reasonably require. The Agency Title Insurance shall show the Recorded Documents marked for return to Agency as valid liens against the Property in favor of the Agency, subject only to the Conditions of Title, and securing, as applicable, Borrower’s performance of its obligations and repayment of Agency Funding.
2.1.3. Within five days of completion of recordation for all recordable transaction documents following Close of Escrow , Title Company shall issue the Owner’s Title Insurance to Borrower (at Borrower’s cost) in the amount of the Ground Lease. The Owner’s Title Insurance shall include all usual and customary endorsements and any endorsements and other commitments as Borrower may reasonably require.
2.1.4. Prior to the Closing Date, the parties shall duly execute (in Escrow or prior to deposit in Escrow) each such document and shall execute those to be recorded in a manner suitable for recording.
2.1.5. On or before the Closing Date, Agency shall also deposit with Title Company the Recorded Documents and Agency Items and any Loan Amount then to be disbursed under this Agreement, but not less than closing costs, fees and charges required for Close of Escrow.
2.1.6. On or before the Close of Escrow, Borrower shall also deposit with Title Company the Recorded Documents and Agency Items and Borrower’s share of closing costs and fees.
2.1.7. Title Company is satisfied that all required funds have been deposited in Title Company’s account for the Escrow, have cleared the originating bank and are available for transfer by Title Company’s check or wire transfer to the appropriate party.
2.2. UPON CLOSE OF ESCROW. The Close of Escrow shall take place on the Closing Date. On the Closing Date, Title Company shall complete the Close of Escrow as follows and in the following order (unless otherwise stated, all recorded documents are recorded with the Sacramento County Recorder):
2.2.1. Assure fulfillment of the Special Provisions;
2.2.2. Assure all documents are complete and affix legal descriptions of the Property as necessary to complete them;
2.2.3. Obtain full execution of all unexecuted documents;
Mirasol Village Block C Page 7
Joint Escrow Instructions – HAF, CNI, and Ground Lease
2.2.4. Date all undated documents as of the Closing Date;
2.2.5. Record the Recorded Documents in the priority listed;
2.2.6. Determine all closing costs and fees; including without limitation, all charges, fees, taxes and title insurance premiums payable under this Agreement on Close of E scrow and any other fees and charges approved for payment from Escrow by both parties and deduct such fees from the Loan proceeds deposited by Agency in Escrow;
2.2.7. Deliver the Agency Items to Agency and the Borrower Items to Borrower; and
2.2.8. Prepare and deliver to Borrower and Agency, respectively, one signed original of all documents included for delivery to either party and not delivered for recording, one signed original of Title Company's closing statement showing all receipts and disbursements of the Escrow, and one conformed copy of each of the recorded documents.
2.3. INABILITY TO CLOSE. If Title Company is unable to simultaneously perform all of the preceding instructions, Title Company shall notify Borrower and Agency, and upon each of their direction s return to each party all documents, items and funds deposited in Escrow by such party (less fees and expenses incurred by the respective party) and bill the respective parties for any unpaid fees and expenses incurred in Escrow.
If Escrow fails to close on the Closing Date because Borrower has not complied with Borrower's obligations under this Loan Agreement, then Borrower shall pay the costs incurred through Escrow to the date the Escrow is terminated, including the cost of any preliminary title report and any cancellation fees or other costs of this Escrow. If Escrow fails to close on or before the Closing Date because Agency has not complied with Agency's obligations under this Loan Agreement, such costs shall be paid by Agency. If Escrow fails to close on or before the Closing Date for any other reason, such costs shall be divided equally between the parties.
2.4. COMMISSIONS. Agency is not responsible, by this Loan Agreement or otherwise, to pay commissions in relation to this transaction.
/ / / / / / / /
Mirasol Village Block C Page 8
Joint Escrow Instructions – HAF, CNI, and Ground Lease
ACCEPTANCE OF ESCROW INSTRUCTIONS
Your acceptance of this escrow shall create a contractual obligation by you with Agency and Borrower for complete compliance with these instructions. Agency and Borrower reserve the right to jointly revoke this escrow at any time upon their payment to you of your fees and reimbursement to you of your expenses in accordance with the terms of these escrow instructions. Your obligations as Escrow Holder under these escrow instructions shall be subject to the following provisions:
You are not responsible as to the sufficiency or correctness as to form, manner of execution, or validity of any instrument deposited in this escrow nor as to the authority or rights of any person executing such instrument. Except as otherwise provided in these escrow instructions, your duties as Escrow Holder are limited to the proper handling of monies and the proper safekeeping of instruments and other items received by you as Escrow Holder, and for the performance of your obligations as specifically provided under these escrow instructions. You are responsible for the sufficiency of any instruments or documents prepared by you for this escrow.
Borrower agrees to indemnify and hold you harmless from damages incurred as a result o f your good faith and diligent performance of your duties under these escrow instructions.
Upon your acceptance of these escrow instructions, return the executed counterparts of these escrow instructions to Agency and Borrower, respectively.
Escrow Holder acknowledges receipt of the foregoing escrow instructions and agrees to act as Escrow Holder and to comply with the terms and conditions of the escrow instructions.
Dated: _____________________________
TITLE COMPANY
By: ______________________________
Name:____________________________
Title:_____________________________
Its authorized agent and signatory
Capitol Park Hotel Construction and Permanent Loan Agreement Funding Requirements - HASAF Page 1
Exhibit 7: Funding Requirements
HOUSING AUTHORITY SUCCESSOR AGENCY FUNDS (HASAF)
(TAX INCREMENT OR TI) FUNDING REQUIREMENTS
RENTAL PROJECT
These “TI Funding Requirements” are incorporated in the “Regulatory Agreement” to which they are attached. In turn, the Regulatory Agreement is incorporated in the Funding Agreement referenced in the Regulatory Agreement. Pursuant to the Funding Agreement, the Regulatory Agreement (with these TI Funding Requirements) is recorded against the properties assisted with the “Agency Funding” provided under the Funding Agreement. The capitalized terms used in these TI Funding Requirements shall have the meanings stated below. Terms being defined are indicated by quotation marks.
Capitalized terms that are not defined in these TI Funding Requirements are defined in the Regulatory Agreement.
1. RECITALS. Agency is a redevelopment agency organized and operating under the California Community Redevelopment Law (commencing at Health & Safety Code Section 33000).
a. Agency has provided the “Agency Funding” from proceeds of the “Housing Fund” (as defined in Health & Safety Code Section 33334.3) for the “Project Area” named in the Regulatory Agreement and Funding Agreement. The Agency Funding is subject to the provisions of the redevelopment plan for the Project Area and the California Community Redevelopment Law.
b. Agency has approved the Agency Funding on condition that the “Property” named in the Funding Agreement is rehabilitated or developed as the “Project,” as residential property for sale to owner-occupants, and that certain Project housing units are regulated in accordance with Health & Safety Code Section 33487. Such regulation is accomplished by recordation of the Regulatory Agreement with these TI Funding Requirements as co venants running with the land, in accordance with Health & Safety Code Section 33334.3(e). The purpose of such regulation is to make the regulated units affordable to persons and households that qualify as moderate-income, low-income or very low-income, in accordance with Health & Safety Code Section 33334.2.
c. The development of the Project benefits and serves the Project Area, and the Project will provide housing for persons who work within the Project Area.
2. TERM. These covenants shall burden and regulate the Restricted Unit for fifty-five (55) years.
3. AFFORDABILITY REQUIREMENTS.
a. Owner shall assure that the TI-Restricted Units shall be rented or sold at or below the following rates to households whose incomes are at or below the respective income limits for the rental rate:
1) Moderate-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty -five percent (35%) of one hundred and ten percent (110%) the Sacramento Metropolitan Statistical Area median income (“Median Income”), as determined annually by the federal Department of Housing and Urban Development, as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.
2) Low-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty percent (30%) of seventy percent (70%) the Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.
3) Very Low-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty percent (30%) of fifty percent (50%) the Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.
4) Extremely Low-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty percent (30%) of thirty percent (30%) the Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.
Capitol Park Hotel Construction and Permanent Loan Agreement Funding Requirements - HASAF Page 2
4. RENTAL. If Owner elects to rent a Restricted Unit, Owner shall rent the unit only at an “Affordable Rent” as determined in accordance with Health and Safety Code Section 50052.5. Owner shall be responsible to determine the Affordable Rent for the Restricted Units. Within ten (10) days of Owner request, Agency shall provide all information necessary for Owner to compute such Affordable Rent and will assist Owner in determining such amounts.