MEMORANDUM OF UNDERSTANDING
Between
CITY OF SALINAS
And
BAY AREA COMMUNITY SERVICES HOUSING CORPORATION
For
ACQUISITION, DEVELOPMENT AND case management OF 10 UNIT SCATTERED SITE HOMEKEY PROJECT FOR TRANSITIONAL HOUSING FOR FAMILIES EXPERIENCING CHRONIC HOMELESSNESS.
THIS MEMORANDUM OF UNDERSTANDING (“MOU” or “Agreement”) FOR HOMEKEY PROGRAM is between the City of Salinas (“City”) and Bay Area Community Services Housing Corporation (“BACS”). BACS is referred to as “Developer.” City and BACS are sometimes individually referred to as a “Party” and collectively as the “Parties.” This MOU will be effective as of the last date the MOU is signed by all Parties (“Effective Date”).
RECITALS
WHEREAS, the State of California Department of Housing and Community Development is anticipated to issue a Notice of Funding Availability (NOFA) for the Homekey 2.0 2021 Program (NOFA); WHEREAS, the City has determined that the development of one or more potential sites for affordable housing for families experiencing chronic homelessness could be accomplished most effectively and economically if undertaken by an experienced developer under an agreement with City; WHEREAS, the City and Developer have identified potential sites that are desirable for the project; WHEREAS, construction and conversion of the properties will be minimal with occupancy projected to occur within thirty (30) days of the close of escrow; WHEREAS, the Developer is an experienced affordable housing real estate developer with the capability of planning, designing, financing, marketing, developing and owning affordable housing in a fashion that could achieve the City’s objective of providing a housing project with a focus on families experiencing chronic homelessness and are impacted by the COVID-19 pandemic; WHEREAS, the Parties have prepared this MOU to comply with the NOFA’s requirements to demonstrate how the development team is connected and how the development team will work together.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and mutual covenants and conditions contained in this MOU, incorporated herein, the Parties agree as follows:
Section 1. The Parties to this MOU encourage the reasonably highest possible degree of cooperative relationships between their respective representatives with regard to the projects for the Homekey Program, including but not limited to acting in good faith to ensure the transparency, mutual success, and liability prevention, to acquire, develop, and maintain the residential properties and provide services to the residents.
Section 2. As contemplated by this MOU, the Parties shall coordinate their resources in furtherance of the effort to develop and manage the residential projects in a timely manner to allow for the provision of case management services for residents of the project properties.
Section 3. The Developer shall perform the following activities contingent on the award of Homekey Program grant funds, and do so in collaboration with the City:
Identifying single-family or multi-family residential site(s) for acquisition. ; Determining the financial feasibility of any necessary improvements or renovations to identified projects, including developmental and operational viability; Negotiating directly with property owner(s) and effectuating the purchase of the selected properties; Undertaking all such environmental review required by the California Environmental Quality Act and National Environmental Policy Act, as applicable, and seeking all required discretionary land use entitlements to place the site in a condition ready for development of the project.
Assisting the City in obtaining state funding made available for the purpose of acquiring mutually agreed upon single-family or multi-family residential properties and applying for all other necessary project financing; Defining a development schedule, including project milestones; Preparing and carrying out a scope of improvement and/or renovation work necessary to convert properties to affordable family housing and create safe and habitable living spaces; and Scope of work shall be based upon a Physical/Capital Needs Assessment commissioned and paid for by the Developer as part of the development budget and shall include all work necessary to create safe and habitable living spaces.
Scope of work shall include, if not already available, improvement and /or renovations to increase the number of bedrooms, when feasible, in each housing unit.
Owning, managing and operating the properties , as affordable family housing.
Developer shall incorporate the principals of Housing First consistent with guidance established by the United States Department of Housing and Urban Development (HUD), and the California Department of Housing and Community Development.
Units reserved for persons experiencing homelessness will be prioritized for clients during the public health crisis in accordance with the COVID-19 risk assessment factor in a Coordinated Entry System.
Units will be required to receive client referrals exclusively from the Coordinated Assessment and Referral System (CARS), so long as the project be funded by Continuum of Care (CoC) funds, including but not limited to the Homeless Housing Assistance Program (HHAP), HUD CoC, and State Emergency Solutions Grant (ESG).
The residential properties shall remain affordable for a minimum period of 30 years from the close of escrow. In the event a HHAP contract or operating subsidy is secured for any unit, the Developer shall extend the term of affordability to match the term of the HHAP contract or operating subsidy.
Section 4. Attachment “A” Schedule of Performance outlines the responsibilities of the Parties, and is hereby fully incorporated herein.
Section 5. The City shall perform the following activities, contingent on the full award of Homekey Program grant funds:
A. Act as the lead applicant, as required by the State of California Department of Housing and Community Development or any government organization, to any Notice of Funding Availability (NOFA), application, or other reasonably available grant funding opportunity related to the Homekey program.
B. Work to secure any reasonably available housing rental subsidy in conjunction with Developer in relation to the operation of each residential property that includes, but is not limited to Veteran Affairs Supportive Housing (VASH) and Section 8 Housing Choice Vouchers.
C. Provide a rental subsidy in the amount of two hundred fifteen thousand dollars ($215,000) from HUD HOME Investment Partnership American Rescue Plan (HOME ARP) and one million three hundred thousand dollars ($1,300,000) from HCD Permanent Local Housing Allocation (PLHA) funds, and eighty-five thousand dollars ($85,000) of City CIP 9021 Housing Production funds contingent upon any approvals necessary from State, Federal or other agencies for use of said funding sources and upon compliance with the requirements of said funding sources by BACS. Unless otherwise required, funding shall be provided in the form of a grant.
Section 6. BACS shall act as the services provider, property manager of the properties and as the non-profit partner in the limited partnership for property tax welfare exemptions. Contingent on the award of Homekey Program grant funds, BACS will work with the City to develop a mutually acceptable agreement of responsibilities for case management services for the properties subject to reasonable acceptance of the same by the City’s City Manager, which shall include, but not be limited to, the following:
A. Responsibilities consistent with a property management and social services agreement/plan per the Homekey 2.0 requirements to be prepared by BACS.
In no circumstances shall the City be responsible for directly providing case management services or otherwise developing or operating the properties.
Section 7. Developer shall indemnify the City as set forth below. This Section shall survive termination of this Agreement.
A. Third Party Actions. To the furthest extent allowed by law, Developer shall indemnify, hold harmless and defend City and each of its officers, officials, employees, consultants, attorneys, agents and volunteers from any and all loss, liability, fines, penalties, forfeitures, damages and costs (including attorney's fees, litigation expenses and administrative record preparation costs) arising from, resulting from, or in connection with any Third Party Action (as hereinafter defined). The term “Third Party Action” collectively means any legal action or other proceeding instituted by (i) a third party or parties or (ii) a governmental body, agency or official other than the City that: (a) challenges or contests any or all of this Agreement, the project application and approvals; or (b) claims or alleges a violation of the California Environmental Quality Act (CEQA) or another law by the City; or (c) the grant, issuance or approval by the City of any or all of this Agreement, any project applications, and any project approvals associated with the properties. Developer’s obligations under this Section 7(A) shall apply regardless of whether City or any of its officers, officials, employees, agents or volunteers are actively or passively negligent, but shall not apply to any loss, liability, fines, penalties forfeitures, costs or damages caused solely by the active negligence or willful misconduct of the City or any of its officers, officials, employees, agents or volunteers. The provisions of this Section 7(A) shall survive the termination of this Agreement.
B. Additional Claims. To the fullest extent permitted by law, Developer shall indemnify, hold harmless and defend the City and each of its officers, officials, employees, consultants, attorneys, agents and volunteers (“City Indemnitees”) from any and all loss, liability, fines, penalties, forfeitures, costs and damages, including but not limited to personal injury, death at any time, and property damage, and including further attorney's fees, litigation and legal expenses incurred by the City Indemnitee or held to be the liability of the City Indemnitee (including plaintiff’s or petitioner’s attorney’s fees if awarded, in connection with the City Indemnitee’s defense of its actions in any proceeding) (collectively, “Losses”) incurred by any City Indemnitees from any and all claims, demands and actions in law or equity (collectively, a “Claim”), whether in contract, tort or strict liability, resulting from, arising or alleged to have arisen directly or indirectly out of performance or in any way connected with: (i) the making of this Agreement; (ii) the performance of this Agreement; (iii) the issuance of funding, permits, licenses, or other entitlements related to operations contemplated by this Agreement; or (iv) the City’s funding, granting, issuing, or approving use of this Agreement. If any portion of a claim, demand or action in law gives rise to indemnification under this Agreement, Developer shall be responsible for indemnifying, holding harmless or defending the City as to the entire claim, demand or action in law. Developer’s indemnification obligations under the proceeding portions of this paragraph shall apply regardless of whether the City Indemnitees are negligent, but shall not apply to any Loses caused solely by the gross negligence or willful misconduct of any City Indemnitees.
C. Damage Claims. The nature and extent of Developer’s obligations to indemnify, defend and hold harmless the City with regard to events or circumstances not addressed in Section 7(A) and 7(B) shall be governed by this Section 7(D). To the furthest extent allowed by law, Developer shall indemnify, hold harmless and defend City and each of its officers, officials, employees, consultants, attorneys, agents and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including but not limited to personal injury, death at any time and property damage) incurred by City, Developer or any other person, and from any and all claims, demands and actions in law or equity (including attorney's fees and litigation expenses), arising or alleged to have arisen directly or indirectly out of performance of this Agreement or the performance of any or all work to be done by Developer or its contractors, agents, successors and assigns pursuant to this Agreement (including, but not limited to design, construction and/or ongoing operation and maintenance of any required off-site improvements unless and until such off-site improvements are dedicated to and officially accepted by the City). Developer's obligations under the preceding sentence shall apply regardless of whether City or any of its officers, officials, employees, consultants, attorneys, agents, or volunteers are passively negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused by the active or sole negligence, or the willful misconduct, of City or any of its officers, officials, employees, agents or volunteers.
D. Subcontractors. If Developer should subcontract all or any portion of the work to be performed under this Agreement, Developer shall require each subcontractor to indemnify, hold harmless and defend the City Indemnitees in accordance with the terms of Sections 7(A), 7(B), and 7(C). Notwithstanding the preceding sentence, any subcontractor who is a “design professional” as defined in Section 2782.8 of the California Civil Code shall, in lieu of indemnity requirements set forth in the two prior paragraphs of this Section, be required to indemnify, hold harmless and defend the City Indemnitees to the fullest extent allowed by law, from any and all Claims and Loses that arise out of, pertain to, or relate to the negligence, recklessness or willful misconduct of the design professional, its principals, officers, employees, agents or volunteers in the performance of this Agreement.
Section 8. Insurance. Prior to receipt of grant funding, Developer shall pay for and maintain in full force and effect all policies of insurance described in this Section with an insurance company(ies) either (i) admitted by the California Insurance Commissioner to do business in the State of California and rated not less than "A- VII" in Best's Insurance Rating Guide. The following policies of insurance are required:
A. COMMERCIAL GENERAL LIABILITY insurance which shall be at least as broad as the most current version of Insurance Services Office (ISO) Commercial General Liability Coverage Form CG 00 01 and shall include insurance for bodily injury, property damage and personal injury with coverage for premises and operations (including the use of owned and non-owned equipment), products and completed operations, contractual liability (including indemnity obligations under this Agreement),with limits of liability of not less than $2,000,000 per occurrence for bodily injury and property damage, $1,000,000 per occurrence for personal injury, $2,000,000 general aggregate and $2,000,000 aggregate for products and completed operations and $2,000,000 general aggregate.
B. COMMERCIAL AUTOMOBILE LIABILITY insurance which shall be at least as broad as the most current version of Insurance Services Office (ISO) Business Auto Coverage Form CA 00 01 and shall include coverage for all owned, hired, and non-owned automobiles or other licensed vehicles (Code 1 B Any Auto), with combined single limits of liability of not less than $2,000,000 per accident for bodily injury and property damage.
C. WORKERS' COMPENSATION insurance as required under the California Labor Code. The insurance policy shall provide coverage for volunteers consistent with the California Labor Code, or in no even less than $250,000, if SLI or SUS (or a successor in interest) is a non profit.
D. EMPLOYERS' LIABILITY with minimum limits of liability of not less than $1,000,000 each accident, $1,000,000 policy limit and $1,000,000 for each employee.
In the event Developer purchases an Umbrella or Excess insurance policy(ies) to meet the “Minimum Limits of Insurance,” this insurance policy(ies) shall “follow form” and afford no less coverage than the primary insurance policy(ies).
Developer shall be responsible for payment of any deductibles contained in any insurance policies required hereunder and Developer shall also be responsible for payment of any self-insured retentions.
The above described policies of insurance shall be endorsed to provide an unrestricted thirty (30) calendar day written notice in favor of City of policy cancellation of coverage, except for the Workers' Compensation policy which shall provide a ten (10) calendar day written notice of such cancellation of coverage. In the event any policies are due to expire during the term of this Agreement, Developer shall provide a new certificate evidencing renewal of such policy not less than fifteen (15) calendar days prior to the expiration date of the expiring policy(ies). Upon issuance by the insurer, broker, or agent of a notice of cancellation in coverage, Developer shall file with City a new certificate and all applicable endorsements for such policy(ies).
The General Liability and Automobile Liability insurance policies shall be written on an occurrence form and shall name City, its officers, officials, agents, employees, consultants, attorneys, and volunteers as an additional insured. Such policy(ies) of insurance shall be endorsed so Developer’s insurance shall be primary and no contribution shall be required of City. All insurance policies shall contain a waiver of subrogation as to City, its officers, officials, agents, employees, consultants, attorneys, and volunteers. Developer shall have furnished City with the certificate(s) and applicable endorsements for all required insurance prior to start of construction of any phase of development or operation at the properties. Developer shall furnish City with copies of the actual policies upon the request of City’s City Manager at any time during the life of the Agreement or any extension, and this requirement shall survive termination or expiration of this Agreement. The insurance requirements set forth in this Section are material terms of this Agreement.
If Developer should hire a general contractor to provide all or any portion of the services or work to be performed or contemplated under this Agreement, Developer shall require the general contractor to provide insurance protection in favor of City, its officers, officials, employees, consultants, attorneys, volunteers and agents in accordance with the terms of each of the preceding paragraphs, except that the general contractor’s certificates and endorsements shall be on file with Developer and City prior to the commencement of any work by the general contractor.
If the general contractor should subcontract all or a portion of the services or work to be performed under this Agreement to one or more subcontractors, Developer shall require the general contractor to require each subcontractor to provide insurance protection in favor of City, its officers, officials, employees, consultants, attorneys, volunteers and agents in accordance with the terms of each of the preceding paragraphs, except that each subcontractor shall be required to pay for and maintain Commercial General Liability insurance with limits of liability of not less than $1,000,000 per occurrence for bodily injury and property damage, $1,000,000 per occurrence for personal injury, $2,000,000 aggregate for products and completed operations and $2,000,000 general aggregate and Commercial Automobile Liability insurance with limits of liability of not less than less than $1,000,000 per accident for bodily injury and property damage. Subcontractors’ certificates and endorsements shall be on file with the general contractor, Developer and City prior to the commencement of any work by the subcontractor.
Section 9. All notices and other communications (the “Notices”) required or permitted to be given by any Party to another Party pursuant to this Agreement shall be properly given only if the Notice is: (a) made in writing (whether or not so stated elsewhere in this Agreement); (b) given by one of the methods prescribed in this Section; and (c) sent to the Party (to which it is addressed at the address set forth below (with a copy to the appropriate entity as indicated below) or at such other address as such Party (or the addressee required to be sent a copy) may hereafter specify by at least five (5) calendar days’ prior written notice:
If to City:
City of Salinas
Attn: Steven Carrigan, City Manager
City Hall
200 Lincoln Avenue
Salinas, CA 93901
Email: [email protected]
and to:
City of Salinas
Attn: Christopher Callihan, City Attorney
200 Lincoln Avenue
Salinas, CA 93901
Email: [email protected]
If to Developer (BACS):
Bay Area Community Services Housing Corporation
Attn: Jamie Almanza
390 40th Street
Oakland, CA 94609
Email: [email protected]
Notices may be either: (a) delivered by hand; (b) delivered by a nationally recognized overnight courier which maintains evidence of receipt; or (c) sent by facsimile transmission with a confirmation copy delivered the following day by a nationally recognized overnight courier which maintains evidence of receipt. Notices shall be effective on the date of receipt.
Section 10. The Parties acknowledge and agree that except for the limitations on the exercise by the City of its police power which are provided in this Agreement, the Parties acknowledge and agree that: (a) the City reserves all of its police power and/or statutory or other legal powers or responsibilities; (b) the City reserves all of its authority to enact regulations; and (3) this Agreement shall not be construed to limit the authority or obligation of the City to hold necessary public hearings, to limit the discretion of the City or any of its officers or officials with regard to rules, regulations, ordinances, laws, and entitlement of use which require the exercise of discretion by the City or any of its officers or officials. This Agreement shall not be construed to limit the obligations of the City to comply with CEQA or any other federal or state law.
Section 11. Time is of the essence in the performance of this MOU. If a Party is aware of an actual or potential situation that could reasonably delay performance under this MOU, and reasonably believes that the other Parties are not aware of that situation, the Party shall promptly notify the other Parties of the same, whether orally or otherwise.
Section 12. No waiver of any provision of this MOU shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. Any alterations, modifications, or amendments shall only be valid when reduced to writing, duly signed and approved by the authorized representative of the Parties as an amendment to this MOU. The Parties recognize and acknowledge that the State of California may require amendments to this MOU as the Homekey Program grant funds are awarded.
Section 13. All requirements of this MOU are contingent on the State of California awarding Homekey Program grant funds for the Motel conversion application. In the event that the State of California does not award Homekey Program funds to the City for its application, this MOU shall be of no force or effect and shall be deemed automatically terminated.
Section 14. Upon prior notice to the City and BACS may assign their separate and respective rights, obligations, and duties contemplated under this MOU to their respective controlled subsidiaries (each an “Assignee”), and may form one or more jointly controlled or owned special purpose entities as may be required for the financing or other purposes related to the execution of the obligations of Developer under this MOU, so long as such assignment or creation of special purposes entities do not change the obligations of the Developer or the rights of the City under this MOU.
Section 15. BACS shall make improvements to the residential buildings and properties. Any changes shall be in substantial conformance with the improvements identified in the attachment or shall require approved by City.
Section 16. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objective and purposes of the Parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement, both Parties having been represented by counsel in the negotiation and preparation hereof. All legal actions brought to enforce the terms of this Agreement shall be brought and heard solely in the Superior Court of the State of California, County of Monterey.
Section 17. This Agreement is made and entered into for the sole protection and benefit of the Parties and their successors and assigns. No other Person shall have any right of action based upon any provision of this Agreement.
Section 18. If either Party commences any action for the interpretation, enforcement, termination, cancellation or rescission hereof, or for specific performance of the breach hereof, the prevailing party shall be entitled to its reasonable attorneys’ fees and litigation expenses and costs, and any judgment, order or decree rendered in such action, suit or proceeding shall include an award thereof. Attorneys’ fees under this Section shall include attorneys' fees on any appeal and any post-judgment proceedings to collect or enforce the judgment. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement.
Section 19. The Parties specifically acknowledge that the project is a private project, that neither the City or Developer is acting as the agent of the other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. None of the terms or provisions of this Agreement shall be deemed to create a partnership between or among the Parties in the businesses of Developer, the affairs of the City, or otherwise, or cause them to be considered joint venturers or members of any joint enterprise. This Agreement is not intended and shall not be construed to create any third party beneficiary rights in any person who is not a Party.
Section 20. Invalidation of any of the provisions contained in this Agreement, or of the application thereof to any Person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other Person or circumstance and the same shall remain in full force and effect, unless enforcement of this Agreement as so invalidated would be unreasonable or grossly inequitable under all the circumstances or would frustrate the purposes of this Agreement.
Section 21. This Agreement may be executed in two or more identical counterparts, each of which shall be deemed to be an original and each of which shall be deemed to be one and the same instrument when each Party signs each such counterpart. For convenience, the signatures of the Parties to this Agreement may be executed and acknowledged on separate pages which, when attached to this Agreement, shall constitute this as one complete Agreement. The Parties shall be entitled to sign and transmit an electronic signature of this Agreement (whether by facsimile, PDF or other email transmission), which shall be binding on the party whose name is contained therein. Each Party providing an electronic signature agrees to promptly execute and deliver to the other Party an original signed Agreement upon request. ///
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IN WITNESS WHEREOF, the parties have caused this MOU to be executed below.
The City of Salinas
Bay Area Community Services Housing Corporation
Signature
Signature
Print Name
Print Name
Attachment “A”
Schedule of Performance- Roles and Responsibilities
The City of Salinas
BACS
Authorizing Resolution
X
X
MOUs, Partnership/Participant Agreements
X
X
Site Selection/Evaluation Appraisal, Physical Needs Assessment, Environmental Site Assessment, Preliminary Title Report, Environmental Testing (i.e. lead, asbestos, mold, etc.) X
Site Selection Acquisition
Purchase and Sale Agreement, Purchase Docs, Escrow Docs, Deed Restrictions, etc.
X
Site Control
Letter of Intent, Exclusive Negotiating Agreement, Ground Lease, etc.
X
Entitlements/Permits
Land Use Entitlements, Conditional Use, Variances, etc.
X
Construction/Design Drawings
Building, Fire, other Permits/Approvals, as required.
X
Financing Plan -Construction and Perm
X
Construction Contractor Procurement
Contractor Bidding, Improvement Management
X
Construction Contract Approval
X
Construction Commencement and Management
X
Supportive Services Plan Development and Design of Case Management.
X
Property Management Development of overall Management Plan.
X
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