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City of San Bernardino
Request for Records Destruction
Department:
Retention Schedule Retention
No. Description of Record Date Range of Records
Retention
Period
Date Eligible for
Destruction Destruction Date
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
31 32
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: January 18, 2023
To: Honorable Mayor and City Council Members
From: Nathan Freeman, Agency Director of Community, Housing, and Economic Development
Department: Community, Housing, & Economic Development (CED) Subject: Infill Housing Master Development Agreement with Neighborhood Partnership Housing Services (NPHS)
San Bernardino Developments, LLC (Wards 2 & 4)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Adopt Resolution No. 2023-011 authorizing the execution of the Infill Housing Development Master Agreement between the City of San Bernardino and NPHS San Bernardino Developments, LLC to construct or reconstruct infill housing on blighted or underutilized sites and sell those properties to households whose income does not exceed 80% of the area median income.
2. Authorize the City Manager, or designee, to take further actions and execute any further documents as necessary to effectuate the agreements.
Background
In 2016, the City initiated the HOME-funded Infill Housing Program, which utilizes Cityowned properties to construct single-family manufactured houses or rehabilitate existing vacant dwellings. Once constructed, or rehabilitated, the properties are then sold to households whose income does not exceed 80% of the area median income (AMI) for the County of San Bernardino. For example, the 2022 income, at 80% AMI for a family of four, is $70,400.
The goals of the Infill Housing Program include, but are not limited to, encouraging homeownership, stabilizing neighborhoods, and improving economic conditions.
Additionally, as part of the Community and Economic Development Department’s Housing Division participation in the 2020 Accelerating Investments in Healthy Communities (AIHC) initiative, the team was able to directly promote the potential Packet Pg. 657
housing programs to Dignity Health's Community Investment Group (CIG) and the Robert Wood Johnson Foundation (RWJ). As a result of this effort, a $2.1 million line of credit and a $1.5 million revolving loan fund were secured for housing production throughout the City.
Moreover, on December 2, 2020, the Mayor and City Council adopted Resolution No. 2020-281, authorizing the execution of the Home Investment Partnerships Program (HOME) Infill Housing Development Master Agreement with NPHS. The HOME Agreement (Agreement) provided grant funding in an amount not to exceed $350,000.
In 2022, Phase I was completed for the following properties:
• 676 W. 10th Street
• 2129 Wall Avenue
• 815 W. Orange Street
Lastly, on October 20, 2021, the Mayor and City Council adopted Resolution No. 2021- 248, authorizing the execution of Amendment No. 1 to the Home Investment Partnership Program (HOME) Infill Housing Development Master Agreement between NPHS San Bernardino Developments, LLC that would allow NPHS to retain up to $170,000 on program income for additional HOME eligible activities.
Discussion
NPHS previously leveraged the CIG line of credit in conjunction with the HOME funds from the City to complete Phase I and is now ready to start on Phases II and III. Once the Infill Master Development Agreement with NPHS is approved by the City Council, NPHS will be able to access additional CIG and RWJ funds for the development of Phases II and III.
The HOME Agreement provides grant funding from the City in an amount not to exceed $455,000. The Infill Housing Program consists of Phases II and III, with a development of six residential houses. The development time frame is approximately twenty-four months, including the properties' marketing and sale.
The table below includes the residential lots that NPHS will develop, which will use HOME funds and program income to initiate the projects.
Phase II Ward
1356 Hillside Drive 2
1384 Hillside Drive 2
1394 Hillside Drive 2
Phase III Ward
251 E. 49th Street 4
255 E. 49th Street 4
299 E. 49th Street 4
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2021-2025 Strategic Targets and Goals
The subject Infill Housing Development Master Agreement aligns with Key Target No. 3: Improved Quality of Life and, more specifically, Goal 3(d): Improve the City’s appearance, cleanliness, and attractiveness.
Fiscal Impact
There is no fiscal impact to the General Fund associated with this report because HOME funds, provided by the U.S. Department of Housing and Urban Development (HUD) will be used to fund infill housing development activities associated with the subject agreement.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Adopt Resolution No. 2023-011 authorizing the execution of the Infill Housing Development Master Agreement between the City of San Bernardino and NPHS San Bernardino Developments, LLC. to construct or reconstruct infill housing on blighted or underutilized sites and sell those properties to households whose income does not exceed 80% of the area median income.
2. Authorize the City Manager or designee to take further actions and execute any further documents as necessary to effectuate the agreement.
Attachments
Attachment 1 HOME Investment Partnerships Program (HOME) Infill Housing Development Master Agreement with NPHS
Attachment 2 Resolution No. 2023-011
Attachment 3 Amendment 1 to HOME Master Agreement
Ward:
Second Ward; Fourth Ward
Synopsis of Previous Council Actions:
October 20, 2021 Mayor and City Council adopted Resolution No. 2021-248 authorizing the execution of Amendment No. 1 to the Home Investment Partnership Program (HOME) Infill Housing
Development Master Agreement between NPHS San
Bernardino Developments, LLC that would allow NPHS to
retain program income for additional HOME eligible activities.
December 2, 2020 Mayor and City Council adopted Resolution No. 2020-281, authorizing the execution of Home Investment Partnerships Program (HOME) Infill Housing Development Master
Agreement with Neighborhood Partnership Housing Services (NPHS).
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September 19, 2016 Mayor and City Council approved the Infill Housing Program that committed $625,000 in HOME funds to the program.
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HOME Investment Partnerships Program (HOME)
INFILL HOUSING DEVELOPMENT
MASTER AGREEMENT
by and between
City of San Bernardino,
a municipal corporation
and
NPHS San Bernardino Developments, LLC,
a California limited liability company
for a grant in the principal amount of
$455,000 in HOME Funds
____________, 2023
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2 This HOME Investment Partnerships Program (HOME) Infill Housing Development Master Agreement (“Agreement”) is dated _____________, 2023 (“Effective Date”), and is between the City of San Bernardino, a municipal corporation (“City”) and NPHS San Bernardino Developments, LLC, a California limited liability company (“Developer”).
RECITALS
WHEREAS, City has received HOME Investment Partnerships Act funds (“HOME Funds”) from the United States Department of Housing and Urban Development (“HUD”) pursuant to the Cranston-Gonzalez National Housing Act of 1990. The HOME Funds must be used by City in accordance with 24 C.F.R. Part 92, as amended from time to time (“HOME Regulations”); and WHEREAS, City seeks to engage developers for the purposes of constructing or reconstructing infill housing on blighted or underutilized sites (“Eligible Properties,” each individually an “Eligible Property”) and expanding home ownership by selling these Eligible Properties to households whose income does not exceed 80 percent of the Area Median Income, as defined below; and
WHEREAS, Developer has the capacity and expertise to carry out infill housing development; and
WHEREAS, Developer desires to utilize HOME Funds in an amount not to exceed Four Hundred Fifty-Five Thousand Dollars ($455,000) for the purpose of acquiring and/or constructing and/or reconstructing Eligible Properties to develop affordable housing units that will be sold to qualified homebuyers; and
WHEREAS, Developer will deliver to City, among other items, a “Site Agreement,” a “Deed of Trust,” and a “Housing Affordability Covenant,” as defined below, for each Eligible Property for which Developer requests HOME Funds to acquire, construct, or reconstruct; and WHEREAS, City desires to provide HOME Funds to Developer, on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the above recitals, the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt, legal sufficiency, and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
SECTION 1. Incorporation of Recitals.
The Recitals set forth above are true and correct and are incorporated into this Agreement.
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3 SECTION 2. Definitions.
In addition to the meaning ascribed to certain words and phrases as set forth in the Recitals or in other sections of this Agreement, including any of the Attachments to this Agreement, other words and phrases shall have the meanings described below:
▪ “Acquisition Escrow” means an account set up with an escrow company that will oversee the transfer of title of an Eligible Property from City or a third party owner, as the case may be, to Developer for the purpose of constructing and/or reconstructing affordable housing units, and the execution and recording of a Deed of Trust and a Housing Affordability Covenant between City and Developer. ▪ “Affirmative Marketing Plan” has the meaning set forth in Attachment “J”. ▪ “Affordable Housing Cost” means a purchase price determined using the criteria set forth in 24 C.F.R. Part 92.254(a)(2), i.e., not exceeding 95 percent of the median purchase price for the area.
▪ “Affordability Period” means the period of time during which an Eligible Property has occupancy restrictions. The length of the affordability period depends on the amount of HOME assistance to the project, as specified in the table below. It is anticipated that infill housing projects will require more than $40,000 in HOME assistance for each Eligible Property. Therefore, the anticipated affordability period for Eligible Properties is 15 years. However, each project will be evaluated to verify the length of affordability that will apply.
HOME Assistance
per Unit
Length of the
Affordability
Period
Less than $15,000 5 years
$15,000 - $40,000 10 years
More than $40,000 15 years
▪ “Area Median Income (AMI)” means the median income for the Ontario/Riverside/San Bernardino Metropolitan Statistical Area, adjusted for household size, as defined and periodically adjusted by HUD. ▪ “Construction Escrow” means an account set up with the City of San Bernardino Finance Department that will process the disbursement of all construction or reconstruction payouts from City to Developer which are made to advance to Developer or reimburse Developer for payments made or to be made to general contractors, subcontractors, and material suppliers as construction or reconstruction work is completed.
▪ “Deed of Trust” means the deeds of trust in favor of City as beneficiary that will encumber the Eligible Property as security for compliance with this Agreement and Packet Pg. 663
4 with the Housing Affordability Covenants defined below. Developer shall enter into a Deed of Trust to secure compliance with this Agreement and with the Developer Housing Affordability Covenant (“Developer Deed of Trust”). The Qualified Homebuyers to whom Developer sells the Eligible Properties shall enter into Deeds of Trust to secure compliance with the Qualified Homebuyer Housing Affordability Covenants (“Qualified Homebuyer Deed of Trust”). The general forms of the Developer Deed of Trust and the Qualified Homebuyer Deed of Trust are included as Attachments “F” and “G”, respectively.
▪ “Effective Date” means the date on which this Agreement shall become effective, which is the later of , 2023 or when approved by the City Council and signed by an authorized representative of Developer, and executed by the City Manager. ▪ “Escrow Agent” means one or more escrow agents administering the Acquisition Escrow and the Sale Escrow, which are mutually acceptable to Developer and City. ▪ “Event of Default” has the meaning set forth in Section 14 of this Agreement. ▪ “Hazardous Materials” has the meaning set forth in Section 37 of this Agreement. ▪ “HOME” means the HOME Investment Partnerships Act Program established pursuant to the Cranston-Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. 12701 et seq.), as amended from time to time, and the HOME Regulations. ▪ “HOME Grants” means the grants to be provided by City to Developer to acquire, construct or reconstruct Eligible Properties in an aggregate amount not to exceed Four Hundred Fifty-Five Thousand Dollars ($455,000). The provisions of the HOME Grants are set forth in Section 16. The HOME Grants shall be shall be secured by a Deed of Trust in the form of Attachment “F”, and may also be secured by other documents.
▪ “Housing Affordability Covenant” means the HOME Program Housing Affordability Covenants and Restrictions that will be entered into by and between Developer and City when an Eligible Property is selected for development (“Developer Housing Affordability Covenant”), and by and between City and the Qualified Homebuyers to whom the Eligible Properties are sold following the construction or reconstruction of affordable housing units on the Eligible Properties (“Qualified Homebuyer Housing Affordability Covenant”). The form of the Developer Housing Affordability Covenant is Attachment “H”. The form of the Qualified Homebuyer Housing Affordability Covenant is Attachment “I”.
▪ “Low-income Households” means persons and households whose income does not exceed 80 percent of the Area Median Income, adjusted for family size, as set forth in the definition of “low-income families” in 24 C.F.R. Part 92.2. ▪ “Notice of Completion” means the Notice of Completion to be executed by Developer upon the completion of the construction or reconstruction of infill housing on an Eligible Property, in the form specified in California Civil Code Section 8182.
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5 ▪ “Project” means the acquisition of Eligible Properties, construction or reconstruction of infill housing on the Eligible Properties, and resale of the Eligible Properties to Qualified Homebuyers.
▪ “Qualified Homebuyer” means a household whose annual income does not exceed eighty percent (80%) of the Area Median Income, and which meets all of the requirements for purchasing an Eligible Property.
▪ “Rehabilitation Standards” means the HOME compliant single family standards for the rehabilitation of HOME-assisted properties adopted from time to time by City as a participating jurisdiction under the HOME Regulations.
▪ “Sale Escrow” means the property transfer transaction account by and among an Escrow Agent, the Qualified Homebuyer, Developer, and City in connection with the sale of a completed Eligible Property from Developer to a Qualified Homebuyer, and the execution and recording of a Qualified Homebuyer Deed of Trust and a Qualified Homebuyer Housing Affordability Covenant.
▪ “Term” has the meaning set forth in Section 5 of this Agreement. ▪ “Total Development Cost” means the total cost to Developer to construct/reconstruct and sell an Eligible Property to a Qualified Homebuyer. The Total Development Cost shall be determined by the sum total of the cost line items included in the Total Development Cost Pro Forma in the form of Attachment “C”.
SECTION 3. Parties to the Agreement.
A. The parties to this Agreement are Developer and City, referred to at times herein collectively as the “Parties” and individually as a “Party.” B. The principal office of Developer for purposes of this Agreement is located at 9551 Pittsburg Avenue, Rancho Cucamonga, CA 91730
C. Prior to the Effective Date, Developer must have provided City with satisfactory evidence of the legal formation and the good standing of Developer to transact business within the State of California.
SECTION 4. Entire Agreement.
A. This Agreement including all attachments and addenda referenced herein constitutes the entire agreement between the Parties. This Agreement supersedes all prior oral or written negotiations, discussions, and agreements between the Parties concerning the subject matters covered herein. The Parties intend this Agreement to be the final expression of their agreement with respect to the subjects covered herein and a complete and exclusive statement of such terms.
B. Included as an integral part of this Agreement are the Attachments listed below. All Attachments set forth below and attached to this Agreement are incorporated herein by reference regardless of the prior reference of any or all of said Attachments in the text of Packet Pg. 665
6 this Agreement. All Attachments to this Agreement shall have the same force and effect as though the content of each and every one of said Attachments had been included within the text of this Agreement. Unless the context requires to the contrary, all references to this Agreement shall include each and every Attachment set forth below and attached hereto. Attachments identified as forms or templates may be modified by City as necessary to adapt the documents for use in connection with particular transactions.
List of Attachments:
Attachment “A” Scope of Services
Attachment “B” Site Agreement form
Attachment “C” Total Development Cost Pro Forma with Sources and Uses Attachment “D” Project Timeline template
Attachment “E” Omitted.
Attachment “F” Developer Deed of Trust form
Attachment “G” Qualified Homebuyer Deed of Trust form
Attachment “H” Developer Housing Affordability Covenant form Attachment “I” Qualified Homebuyer Housing Affordability Covenant form Attachment “J” Affirmative Marketing Requirements
SECTION 5. Term of Agreement.
A. The term of this Agreement (“Term”) shall commence on the Effective Date and will expire two (2) years after the Effective Date, unless earlier terminated as provided in this Agreement. City will have the option to extend the Term for one (1) additional one-year term, with the consent of Developer. The term of this Agreement shall not extend beyond January 30, 2025, except that, unless terminated pursuant to Section 15 below, this Agreement shall remain in effect at least until completion of the construction or reconstruction of all of the Eligible Properties to be constructed or reconstructed under this Agreement, and at least until ownership of each of said Eligible Properties has been transferred by Developer to a Qualified Homebuyer. Also, notwithstanding the foregoing portion of this Section 5(A), documents recorded pursuant to this Agreement shall survive termination or expiration of this Agreement and remain effective in accordance with their terms.
B. Upon the expiration or earlier termination of this Agreement, Developer shall provide City with all documents, notes, maps, reports, data, and all other work product developed in the performance of the Scope of Services within ten (10) calendar days after the effective date of such expiration or termination, without additional charge to or request by City.
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7 SECTION 6. Scope of Developer Services.
A. City hereby retains Developer to provide the professional services set forth in the Scope of Services attached hereto as Attachment “A” and incorporated herein by this reference.
Developer hereby agrees to perform the work set forth in the Scope of Services, in accordance with the terms of this Agreement.
Before commencing any services under this Agreement, Developer shall provide City with documentation indicating Developer’s financial strength and capacity to provide start-up operations and working capital to develop Eligible Properties. Such documentation shall include Developer’s most recent certified financial statements with a statement in writing, signed by a duly authorized representative of Developer, stating Developer’s present financial condition is materially the same as that shown on the balance sheet and income statement submitted, or with an explanation for a material change in Developer’s financial situation.
SECTION 7. Budget.
City has allocated an amount not to exceed Four Hundred Fifty-Five Thousand Dollars ($455,000) of HOME Funds for the acquisition, construction, or reconstruction of Eligible Properties.
SECTION 8. Payment for Services Performed by Developer.
The amount to be paid by City to Developer for the services to be performed by Developer pursuant to this Agreement (the “Developer Fee”) will be established prior to the commencement of the Project, as reflected in the Total Development Cost Pro Forma that Developer is required to submit for each Eligible Property. City must approve the Developer Fee prior to the construction or reconstruction of any Eligible Property. In all cases, the Developer Fee shall be limited to no more than ten percent (10%) of the Total Development Cost.
SECTION 9. HOME Program Requirements.
A. Developer shall comply with all applicable laws and regulations governing the use of the HOME Funds as set forth in 24 C.F.R. Part 92, including the requirements of the Developer Housing Affordability Covenant. In the event of any conflict between this Agreement and applicable laws and regulations governing the use of the HOME Funds, the stricter requirement shall govern. The laws and regulations governing the use of the HOME Funds include (but are not limited to) the following:
(i) Eligible Project Costs. Restrictions on funding only eligible project costs as set forth in 24 C.F.R. 92.206.
(ii) Environmental and Historic Preservation and Review. 24 C.F.R. Part 50 and 24 C.F.R. Part 58, which prescribe procedures for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. § 4321 et seq.), and the additional laws and authorities listed at 24 C.F.R. § 58.5. Developer Packet Pg. 667
8 acknowledges that environmental review, which shall also review environmental impacts pursuant to CEQA (hereinafter defined), by the City of the activities to be undertaken under this Agreement is required, that City’s approval of this Agreement does not constitute approval of any development or completion of such environmental review, and that Developer may not expend funds, HOME or otherwise, for such activities until the City has notified Developer in writing that the environmental review is complete.
Nothing in this Agreement shall be construed to limit the City’s discretion to consider and adopt any mitigation measure or project alternative, including the alternative of rejecting any proposed development of the Property, as provided in the California Public Resources Code.
(iii) Applicability of OMB Circulars. The applicable policies, guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, and A-133.
(iv) Debarred, Suspended or Ineligible Contractors. The prohibition on the use of debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24. (v) Civil Rights, Housing and Community Development, and Age Discrimination Acts. The Fair Housing Act, as amended (42 U.S.C. § 3601 et seq.), and implementing regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII of the Civil Rights Act of 1968 as amended; the Housing and Community Development Act of 1974 as amended, including Title I, Section 104(b) and Section 109; Section 504 of the Rehabilitation Act of 1973, as amended (29 USC § 794, et seq.); the Age Discrimination Act of 1975 (42 USC § 6101, et seq.); Executive Order 11063 (Nondiscrimination and Equal Opportunity in Housing), as amended, and implementing regulations at 24 C.F.R. Part 107; Executive Order 11246 (Equal Employment Opportunity), as amended; Executive Order 11625 (National Program for Minority Business Enterprise), as amended; Executive Order 12432 (Minority Business Enterprise Development); and Executive Order 12138 (National Women’s Business Enterprise Policy), as amended.
(vi) Nondiscrimination against the Disabled. The requirements of the Fair Housing Act (42 U.S.C. § 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100; Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794), and federal regulations issued pursuant thereto, which prohibit discrimination against the disabled in any federally assisted program; the Architectural Barriers Act of 1968 (42 U.S.C. §§ 4151 et seq.); and the applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of 1990 (42 U.S.C. § 12131 et seq.), and federal regulations issued pursuant thereto.
(vii) Clean Air and Water Acts. The Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251 et seq.; the National Environmental Policy Act of 1969, as amended (42 U.S.C.
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9 §§ 4321 et seq.), and the regulations of the Council on Environmental Quality with respect thereto at 40 C.F.R. Part 1500, as amended from time to time. (viii) Uniform Administrative Requirements. The provisions of 24 C.F.R. §§
92.505-.506 regarding cost and auditing requirements.
(ix) Labor Standards. The labor requirements set forth in 24 C.F.R. 92.354; the prevailing wage requirements of the Davis-Bacon Act and implementing rules and regulations (40 U.S.C. § 3141 et seq.; the Copeland “Anti-Kickback” Act (18 U.S.C. § 874 and 40 U.S.C. § 3145) which requires that workers be paid at least once a week without any deductions or rebates except permissible deductions; the Contract Work Hours and Safety Standards Act – CWHSSA (40 U.S.C. §§ 3701-3708) which requires that workers receive “overtime” compensation at a rate of 1-1/2 times their regular hourly wage after they have worked forty (40) hours in one (1) week; 29 C.F.R. Subtitle A, Parts 1, 3 and 5, which are the regulations and procedures issued by the Secretary of Labor for the administration and enforcement of the Davis-Bacon Act, as amended; the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, et seq.; and all other applicable federal and state labor laws, the applicability of which Developer assumes full responsibility for determining.
(ix) Drug Free Workplace. The requirements of the Drug Free Workplace Act of 1988 (41 U.S.C § 8101, et seq.), and implementing regulations at 2 C.F.R. Part 2429.
(xii) Anti-Lobbying; Disclosure Requirements. The disclosure requirements and prohibitions of 31 U.S.C. § 1352 and implementing regulations at 24 C.F.R.
Part 87.
(xiii) Historic Preservation. The historic preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (Division A of Subtitle III of 54 U.S.C.) and the procedures set forth in 36 C.F.R. Part 800. If archeological, cultural, or historic period resources are discovered during construction, all construction work must come to a halt and Developer shall immediately notify City. Developer shall not shall alter or move the discovered material(s) until all appropriate procedures for “post-review discoveries” set forth in the National Historic Preservation Act at 54 U.S.C. § 300101 et seq. have taken place, which include, but are not limited to, consultation with the California State Historic Preservation Officer and evaluation of the discovered material(s) by a qualified professional archeologist.
(xiv) Flood Disaster Protection. The requirements of the Flood Disaster Protection Act of 1973, as amended (“Flood Act”) contained in the National Flood Insurance Act of 1968, as amended (42 U.S.C. § 4001 et seq.). No portion of the assistance provided under this Agreement is approved for acquisition or construction purposes as defined under Section 3(a) of the Flood Act (42 U.S.C. § 4003(a)), for use in an area identified by HUD as having special flood Packet Pg. 669
10 hazards which is not then in compliance with the requirements for participation in the national flood insurance program pursuant to Section 201(d) of the Flood Act (42 U.S.C. § 4105(d)). The use of any assistance provided under this Agreement for such acquisition or construction in such identified areas in communities then participating in the National Flood Insurance Program is subject to the mandatory purchase of flood insurance requirements of Section 102(a) of the Flood Act (42 U.S.C. § 4102(a)). If an Eligible Property is located in an area identified by HUD as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, as amended, the property owner and its successors or assigns must obtain and maintain, during the ownership of the Eligible Property, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under Section 102(a) of the Flood Act.
Such provisions are required notwithstanding the fact that the construction on the Eligible Property may not itself be funded with assistance provided under this Agreement.
(xv) Project Requirements and Other Federal Requirements. The activities funded under this agreement must comply with the project requirements set forth in Subpart F of 24 C.F.R. Part 92 and must be carried out in accordance with the other federal requirements set forth in Subpart H of said Part 92. (xvi) Property Standards. The housing developed pursuant to this Agreement must meet the property standards in 24 C.F.R. § 92.251, the lead hazard control requirements in 24 C.F.R. § 92.355, and the Rehabilitation Standards upon completion of construction or reconstruction.
(xvii) Religious Organizations. If Developer is a religious organization, as defined by the HOME Regulations, Developer shall comply with all conditions prescribed by HUD for the use of HOME Funds by religious organizations, including the First Amendment of the United States Constitution regarding church/state principles and the applicable constitutional prohibitions set forth in 24 C.F.R. § 92.257.
(xviii) Relocation. As applicable, the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. § 4601, et seq.), and implementing regulations at 49 C.F.R. Part 24; 24 C.F.R. § 570.606; Section 104(d) of the Housing and Community Development Act of 1974 and implementing regulations at 24 C.F.R. Part 42; 24 C.F.R. § 92.353; and California Government Code Section 7260 et seq. and implementing regulations at 25 California Code of Regulations Sections 6000 et seq. If and to the extent that development of the project results in the permanent or temporary displacement of residential tenants, homeowners, or businesses, Developer shall comply with all applicable local, state, and federal statutes and regulations with respect to relocation planning, advisory assistance, and payment of monetary benefits, and shall prepare and submit a relocation plan to City for approval. Developer is solely responsible for its compliance with applicable Packet Pg. 670
11 notice requirements, payment of any relocation benefits to any displaced persons, and any other obligations associated with complying with such relocation laws. Developer shall indemnify and defend City (with counsel approved by City, in its sole discretion), and hold City harmless against all claims that arise out of relocation obligations to residential tenants, homeowners, or businesses permanently or temporarily displaced by the Project.
(xix) Other HUD Regulations. Any other HUD regulations now in effect or as may be amended or added in the future pertaining to the HOME Funds, the existence and applicability of which Developer assumes full responsibility for determining.
(xx) Fees. As required by 24 C.F.R. Part 92.504(c)(3)(xi), Developer shall not charge servicing, origination, processing, inspection, or other fees for the costs of providing homeownership assistance.
SECTION 10. Records Retention.
Records, field notes, inspection documents, and other supporting documents pertaining to the use of HOME Funds disbursed to Developer shall be retained by Developer with a corresponding copy provided to City. All records shall be made available to City, HUD, and other appropriate federal agencies and officials for examination for a period of five (5) years from the date of expiration or termination of this Agreement. Records shall be available for inspection during Developer’s regular business hours. In the event of litigation or audit relating to this Agreement, such records shall be retained by Developer until all such litigation or audit has been resolved.
SECTION 11. Indemnification.
In addition to any other specific indemnification or defense obligations of the Developer set forth in this Agreement, Developer shall (with counsel approved by City, in its sole discretion) defend, indemnify, and hold harmless City and its officers, officials, employees, representatives, and agents (collectively “Indemnitees”) from and against any and all causes of action, suits, proceedings, claims, demands, liens, awards, judgments, losses, penalties, fines, costs and expenses, including, without limitation, incidental and consequential damages, court costs, litigation expenses, fees of expert consultants or expert witnesses, costs of investigation, attorneys’ fees, liability for injury or death to any person, workers’ compensation or prevailing wage determinations, and other costs or damages of any kind, nature, or description occurring during or arising in connection with, in whole or in part, the construction, operation, or other services or work relating to this Agreement or Developer’s ownership of the Eligible Properties as a result of the direct or indirect acts, faults, or omissions, whether active or passive, of Developer or its officers, employees, contractors or subcontractors of any tier, agents, representatives, or other parties engaged on Developer’s behalf, unless arising from the sole gross negligence or willful misconduct of City. The provisions of this section shall survive the termination or earlier expiration of Packet Pg. 671
12 this Agreement and shall not merge into any deeds conveying ownership of any of the Eligible Properties.
SECTION 12. Insurance.
A. Developer shall at its sole expense procure and maintain, or cause its subcontractors to procure and maintain, as applicable, the insurance as set forth below throughout the Term.
Developer shall obtain City approval, in its sole discretion, of each insurance company prior to commencement of any activities pursuant to this Agreement. There shall be no limitations to coverage, whether for insured claims or contractual liability, and Developer shall remain liable as stated in Section 11 above for all losses and damages incurred by any of the Indemnitees that are caused directly or indirectly through the actions or inactions, willful misconduct or negligence of Developer in the performance of the duties assumed by Developer pursuant to this Agreement, to the extent such losses and damages are not covered by insurance maintained by Developer pursuant to this Section 12.
B. Developer shall maintain insurance policies issued by an insurance company or companies authorized to do business in the State of California and that maintain during the term of the policy a Financial Strength Rating of at least “A-” and a Financial Size Category designation of at least “VI,” as assigned by A.M. Best Company, Inc. in the then most current edition of “Best’s Credit Guide,” as follows:
i. Automobile Insurance. Developer and each of its subcontractors shall maintain comprehensive commercial automobile liability insurance coverage for any vehicle, including owned, hired, and non-owned automobiles, of not less than One Million Dollars ($1,000,000) combined single limit per occurrence, including, without limitation, for bodily injury and property damage.
ii. Worker’s Compensation Insurance. Developer and each of its subcontractors shall maintain worker’s compensation coverage in accordance with California workers’ compensation laws for all workers under Developer’s and/or its any of its subcontractors’ employment performing work under this Agreement, which shall include an endorsement that the insurer waives the right of subrogation against City and Indemnitees.
iii. Liability Insurance. Developer and each of its subcontractors shall maintain comprehensive commercial general liability insurance, including coverage for bodily injury, personal injury, advertising injury, death, property damage and contractual liability, with a limit of at least One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate, including products and completed operations coverage. Said insurance shall be primary insurance with respect to City and the policy shall so provide. All defense costs shall be outside the limits of the policy. Developer shall require and ensure that all general liability insurance policies covering work at any Eligible Property, whether obtained by Developer or Developer’s contractors or subcontractors, include City and the other Indemnitees as additional insureds. If required by City from time to time, Developer shall increase the limits of Developer’s liability insurance to reasonable amounts customary for owners of improvements similar to the Project.
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13 Developer and each of its subcontractors shall maintain professional liability coverage with limits of at least One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate, covering the risk of errors and omissions, negligent acts, and costs of claims/litigation, including investigation and court costs. iv. Builders’ Risk/Property Insurance. Developer and each of its subcontractors shall maintain Builders’ Risk insurance during the course of construction on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Project or portion of the Project on which Developer is performing work. Upon completion of construction for any Eligible Property, Developer shall maintain fire and extended coverage property insurance covering the Project, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to City, naming City as a loss payee, as its interests may appear.
v. Flood Insurance. Flood insurance must be obtained if required by applicable federal regulations.
C. Concurrent with the execution of this Agreement and prior to the commencement of any work by Developer, and upon other reasonable request by City, Developer shall deliver to City copies of policies, certificates, and endorsements evidencing the existence of the insurance coverage required herein and the amounts of all deductibles or retentions, which coverage shall remain in full force and effect continuously throughout the term of this Agreement. Insurance coverage required under this Agreement shall not be written on a “claims made” basis. The applicable certificate of insurance must clearly provide that the coverage is on an “occurrence” basis. Receipt by the City of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement.
D. Each policy of insurance required under this Agreement, except worker’s compensation, shall, to the fullest extent allowed by law, be endorsed naming City and the other Indemnitees as additional insureds, and shall provide that such insurance, except with respect to the coverage limits, applies to each named and additional insured as though a separate policy were issued to each and shall provide cross-liability coverage.
E. Each policy shall provide for a waiver of any and all rights of subrogation against City and the other Indemnitees. Each policy shall provide that it is primary to any insurance or selfinsurance of City or the other Indemnitees with respect to the operations of the Developer.
Any insurance maintained by City or Indemnitees shall be in excess of Developer’s insurance and shall not contribute to it.
F. Developer shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy. Each policy shall provide that it may not be canceled, terminated or modified, except upon thirty (30) days’ prior written notice to City.
G. Failure on the part of Developer to procure or maintain, or cause its subcontractors to procure or maintain, or provide evidence of renewals of the insurance coverage required Packet Pg. 673
14 herein for fifteen (15) days or longer shall constitute a material breach of this Agreement pursuant to which City may exercise all rights and remedies set forth herein and may at its sole discretion, without waiving or limiting its rights or remedies for such default, procure or renew such insurance and pay any and all premiums in connection therewith. All monies so paid by City shall be reimbursed by Developer upon demand, including interest thereon at the rate of ten percent (10%) per annum compounded annually from the date paid by City to the date reimbursed by Developer. City shall have the right, at its election, to participate in and control any insurance claim adjustment or dispute with the insurance carrier. Developer’s failure to assert or delay in asserting any claim shall not diminish or impair the rights of City against Developer or the insurance carrier.
SECTION 13. Press Releases.
Press or news releases, including photographs or public announcements, or confirmation of the same related to the work to be performed by Developer under this Agreement shall be made by Developer only with the prior written consent of City. Press or news releases shall include language identifying the Project as a City-funded project, and include the City seal.
SECTION 14. Defaults and Remedies.
A. Events of Default. The occurrence of any of the following shall, after the giving of any notice (delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default) and the expiration of any applicable cure period, constitute a default by Developer hereunder (“Event of Default”):
i. The failure of Developer to pay or perform any monetary covenant or obligation hereunder or under any of the documents executed in connection herewith, without curing such failure within ten (10) calendar days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Developer). ii. The failure of Developer to perform any nonmonetary covenant or obligation hereunder or under any of the documents executed in connection herewith, without curing such failure within thirty (30) calendar days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Developer) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency; provided, however, that if any default with respect to a nonmonetary obligation is such that it cannot be cured within a thirty-day period, it shall not be deemed a default if Developer commences the cure within said thirty-day period and diligently prosecutes such cure to completion thereafter.
Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections iii through vi below, each of which shall constitute an immediate default under this Agreement without regard to any curative action undertaken or completed by Developer:
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15 iii. The material falsity of any representation, warranty, disclosure, or covenant made by Developer regarding the Project, this Agreement, or any documents executed in connection herewith, whether or not such representation, warranty, disclosure, or covenant is included in this Agreement.
iv.Developer or any constituent member, partner, or majority shareholder of Developer shall (a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (b) fail to pay or admit in writing its inability to pay its debts generally as they become due, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent or (e) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition that is not withdrawn within ten (10) calendar days after the filing thereof seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding.
v. If, without the application, approval or consent of Developer, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Developer or any constituent member or partner, or majority shareholder, of Developer, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Developer or of all or any substantial part of Developer’s assets, or other like relief under any bankruptcy or insolvency law, and, if such proceeding is being contested by Developer, in good faith, the same shall (a) result in the entry of an order for relief or any such adjudication or appointment, or (b) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive calendar days.
vi.Voluntary cessation of the operation of the Project for a continuous period of more than thirty (30) calendar days or the involuntary cessation of the operation of the Project for a continuous period of more than sixty (60) calendar days.
vii. A mechanic’s lien or any other type of encumbrance on any Eligible Property resulting from Developer’s failure to fulfill its financial or other contractual obligations with respect to any of its vendors or sub-contractors is not removed within ten (10) calendar days after receipt of written notice of such default from City.
B. City Remedies. Upon the occurrence of an Event of Default hereunder, City may, in its sole discretion, take any one or more of the following actions:
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16 i. Cease making any payment of fees or reimbursement of eligible expenses to Developer unless and until the Event of Default (if curable) is cured. ii. Demand reimbursement from Developer for any payments made to it by City for which the contracted work product was not satisfactorily delivered by Developer.
iii.Take possession of any material or other work product purchased or produced by Developer for the Project.
iv.Upon the occurrence of an Event of Default which is occasioned by Developer’s failure under this Agreement to pay money to a third party, City may, but shall not be obligated to, make such payment. If such payment is made by City, Developer shall deposit with City, upon written demand therefor, such sum plus interest at the rate of ten percent (10%) per annum compounded annually. The Event of Default with respect to which any such payment has been made by City shall not be deemed cured until such repayment (as the case may be) has been made by Developer. v. Upon the occurrence of an Event of Default described in Section 14.A.(iv) or
14.A.(v) hereof, City shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for any amount owing to City under this Agreement and unpaid and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of City and its counsel to protect the interests of City and to collect and receive any monies or other property in satisfaction of its claim.
vi. If the Event of Default consists of the failure of Developer to comply with the requirement that it transfer each of the Eligible Properties only to a Qualified Homebuyer, Developer shall be required to repay to City all funds provided by City to Developer for the acquisition, construction, or reconstruction of the Eligible Property to which said Event of Default applies.
Any failure or delays by City in asserting any of its rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays in asserting any of its rights and/or remedies shall not deprive City of its right to institute and maintain any actions or proceedings that it may deem necessary to protect, assert or enforce any such rights or remedies.
C. City Default and Developer Remedies. Upon failure of City to meet any of its obligations under this Agreement without curing such failure within thirty (30) calendar days after receipt of written notice of such failure from Developer specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency, Developer may, as its sole and exclusive remedies:
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17 i. Bring an action in equitable relief seeking the specific performance by City of the terms and conditions of this Agreement or seeking to enjoin any act by City which is prohibited hereunder; and/or
ii. Bring an action for declaratory relief seeking judicial determination of the meaning of any provision of this Agreement. Without limiting the generality of the foregoing, Developer shall in no event be entitled to, and hereby waives, any right to seek incidental or consequential damages of any kind or nature from City arising out of or in connection with this Agreement, and in connection with such waiver Developer is familiar with and hereby knowingly and voluntarily waives the provisions of Section 1542 of the California Civil Code which provides as follows: “A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY
HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
Developer further waives the benefit of any other statute, rule, regulation, or common law principle to the same or similar effect.
Initials of Developer:__________
SECTION 15. Termination for Convenience.
A. This Agreement may be terminated by City at any time prior to its expiration for any reason by giving Developer thirty (30) calendar days’ prior written notice. If Developer is in compliance with this Agreement on the date such termination takes effect, City shall pay Developer the reasonable value of all work authorized by City pursuant to this Agreement prior to the date of such notice and completed thereafter prior to the effective termination date.
B. In the event of a termination of this Agreement pursuant to this section, Developer shall comply with Section 5.B of this Agreement.
SECTION 16. HOME Grants.
A. Subject to the terms and conditions of this Agreement, City shall make HOME Grants to Developer for the purpose of construction or reconstruction of Eligible Properties, and soft costs involved in the development of Eligible Properties. City shall commit an aggregate amount not to exceed Four Hundred Fifty-Five Thousand Dollars ($455,000) to funding the HOME Grants. The amount of each individual HOME Grant shall be negotiated by City and Developer based on the total development costs for each Eligible Property as shown on the Total Development Cost Pro Forma to be submitted by Developer to City prior to the development of any Eligible Property. Proceeds from the HOME Grants shall not be used by Developer for any off-site costs, such as utility installations outside the boundaries of the Eligible Property.
B. Disbursements from the HOME Grants will only be made for reimbursement of expenditures incurred. An exception is made for construction or reconstruction work Packet Pg. 677
18 performed on an Eligible Property, in which case disbursements will be allowed for direct payment of services rendered or products delivered. Non-construction related costs (“Soft Costs”) will only be paid on a reimbursement basis. As used here “Soft Costs” means predevelopment, indirect, financing and sales closing costs and Developer Fee.
C. The net proceeds derived from the sale of the Eligible Property to the Qualified Homebuyer shall be collected by City as program income upon the close of the Sales Escrow. No net proceeds other than those approved by City shall be paid to Developer. Net proceeds means sale price minus costs of sale (e.g. broker and escrow fees).
SECTION 17. Acquisition, Development and Sale of Eligible Properties.
A. Selection and Acquisition of Eligible Properties. The Parties shall agree in writing on the Eligible Properties to be developed pursuant to this Agreement. City currently owns a number of properties that are suitable for infill development pursuant to this Agreement and Eligible Properties may be selected from those properties. In the case of an Eligible Property owned by City, City shall transfer the property to Developer by quitclaim deed.
An Acquisition Escrow, as defined in Section 2 of this Agreement, shall be opened to accomplish the transfer of an Eligible Property to Developer. Transfer of any Eligible Property to Developer shall occur pursuant to the Acquisition Escrow only upon the deposit in escrow by Developer of a duly executed and notarized Housing Affordability Covenant in which Developer covenants that it will sell the Eligible Property only to a Qualified Homebuyer, and a duly executed and notarized Deed of Trust securing Developer’s faithful performance of the Housing Affordability Covenant and of this Agreement.
B. Construction Disbursements. Disbursement of HOME Grants to Developer for the purpose of constructing/reconstructing Eligible Properties shall be carried out through the Construction Escrow with the City of San Bernardino as defined in Section 2 of this Agreement. Disbursements made by City for the purpose of constructing/reconstructing Eligible Properties using the HOME Grants shall be expressly subject to satisfaction of all of the following conditions (collectively, the Closing Conditions) on or before the date (“Closing Deadline”) which is thirty (30) calendar days following the execution date of a Site Agreement initially entered into by City and Developer for the purposes of developing an Eligible Property:
(1) Execution of this Agreement and delivery of a fully executed copy of the Site Agreement in the form attached hereto as Attachment “B” to the Construction Escrow Agent.
(2) Receipt by City from Developer of such other documents, certifications and authorizations as are reasonably required by City, in form and substance satisfactory to City, to ensure compliance with all legal requirements for the making of the HOME Grant to be used for the construction or reconstruction of the Eligible Property. (3) No Event of Default and no breach shall exist under this Agreement, the Site Agreement, or under any agreement or instrument relating to any other funding obtained by Developer for the purpose of constructing or reconstructing the Eligible Property.
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19 (4) Developer shall have provided to City, in a form satisfactory to City, certified copies of (a) Developer’s articles and bylaws, together with a certification by Developer’s president or chief executive officer that such articles and bylaws have not been amended or modified except as described in the certification; (b) a good standing certificate from the California Secretary of State, certifying that Developer is duly qualified and in good standing to conduct business in this state; and (c) all other documents necessary to evidence to City’s satisfaction that the individuals and entities executing this Agreement, and any other entities on whose behalf this Agreement is executed, are fully authorized to do so and to bind the respective entities, including Developer, to the terms hereof. (5) Developer shall have furnished City with evidence satisfactory to City that the insurance coverage required by Section 12 of this Agreement has been obtained. (6) Developer shall have commenced or be ready to commence construction or reconstruction of the Eligible Property, and shall have (a) furnished City with copies of a contract for the construction/reconstruction work and materials (“Construction Contract”) entered into with a general contractor (“General Contractor”) previously approved in writing by City; and (b) submitted to City and received City’s approval of any design plans or other design documents requested by City.
(7) Not as a Closing Condition, but at least thirty (30) calendar days prior to occupancy and prior to the commencement of homebuyer selection for the Eligible Property, Developer shall have obtained City’s written approval of an Affirmative Marketing Plan, complying with the requirements set forth in Attachment “J” to this Agreement, for the sale of the Eligible Property, including specifically the procedures to be employed by which the Qualified Homebuyers of the Eligible Property shall be selected in the event that there are multiple homebuyers qualified to purchase the Eligible Property.
C. Acquisition Escrow Terms. In establishing the Acquisition Escrow, the Parties may execute supplemental instructions to the Escrow Agent consistent with the terms of this Agreement, but in the event of a conflict between the terms of this Agreement and any supplemental escrow instructions, the terms of this Agreement shall control. Except as otherwise expressly provided herein, any fees and costs incurred by the Escrow Agent in the performance of their duties hereunder and agreed to be paid by the Parties shall be paid exclusively by Developer.
D. Selection of Qualified Homebuyers. Developer shall initiate the sale of an Eligible Property to a Qualified Homebuyer by submitting to City a purchase and sale agreement executed by the prospective homebuyer, with such verifying documentation from the prospective homebuyer with respect to residency, income and the property condition as City, or its designee, may reasonably request (collectively, “Homebuyer Application”).
The Homebuyer Application shall consist of the following information in the form approved by City:
(1) A California Association of Realtors California Residential Purchase Agreement or such other purchase agreement as may be specified by City, fully executed by the prospective homebuyer.
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20 (2) Application Affidavit – Completely filled out and signed by the prospective homebuyer.
(3) Income documentation in accordance with the HOME Regulation’s Part 5 Definition of Income, pursuant to 24 C.F.R. §§ 5.609 and 92.203(b), for all household members who are 18 years of age and older.
(4) Copy of employment verification for each homebuyer. (5) Two consecutive months of current bank statements for each homebuyer. (6) Three-year housing history for each homebuyer.
(7) Income Certification Form.
(8) Homebuyer Education Certificate from a HUD Certified Housing Counseling Agency.
(9) Proof of legal residency in the United States for all members of the household who are applying for consideration as the Qualified Homebuyer. (10) Evidence of terms for purchase money loan, including loan amount, interest rate, and monthly payment.
E. Sale Escrow. Within seven (7) calendar days after the receipt of the Homebuyer Application, City will notify Developer of approval or denial of the prospective homebuyer’s eligibility and confirmation of such eligibility by means of a Preliminary Approval (all preliminary approvals will be valid for sixty (60) calendar days from the date of certification). Upon notification of the prospective homebuyer’s eligibility, Developer shall open the Sale Escrow with a City approved-escrow company (the “Sale Escrow Agent”). City shall furnish the Sale Escrow Agent with executed escrow instructions.
Developer shall not permit any escrow to close for the sale of an Eligible Property until and unless the escrow instructions executed by City have been submitted to the Sale Escrow Agent. As provided in the escrow instructions, the Sale Escrow shall also not close unless and until:
(1) The Sale Escrow Agent holds the following documents: (a) a Housing Affordability Covenant executed by the Qualified Homebuyer in favor of City and duly notarized; (b) a Deed of Trust executed by the Qualified Homebuyer as trustor in favor of City as beneficiary, securing the Qualified Homebuyer’s performance of the Housing Affordability and duly notarized; (c) a grant deed for the conveyance of the Eligible Property from Developer to the Qualified Homebuyer, stating that the conveyance is subject to the restrictions of the Housing Affordability Covenant and the Deed of Trust; and (d) such other documents as the City in its sole discretion may deem to be required for Packet Pg. 680
21 the purpose of ensuring the affordability of the Eligible Property for the duration of the Affordability Period.
(2) Proof of hazard insurance for the full replacement cost of the Eligible Property is provided to City; and
(3) Construction or reconstruction of the Eligible Property is completed in accordance with this Agreement and with all applicable City permits and ordinances, and City has issued a final certificate of occupancy for the Eligible Property.
The Sale Escrow shall not close while any Event of Default exists under this Agreement or under any agreement or instrument relating to any financing for the Eligible Property.
SECTION 18. Use of the Eligible Property.
A. Developer hereby covenants and agrees, for itself and its successors and assigns, that the Eligible Properties shall be developed for sale to a household whose total annual income is at or below eighty percent (80%) of Area Median Income.
B. Developer covenants and agrees that it shall not devote the Eligible Properties to uses inconsistent with either this Agreement or the Housing Affordability Covenant.
SECTION 19. Discrimination Prohibited.
A. Except as provided in the Housing Affordability Covenant with respect to the reservation of the Eligible Property for occupancy by a Qualified Homebuyer, there shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, familial status, physical or mental disability, ancestry, or national origin in the rental, sale, lease, sublease, transfer, use, occupancy, or enjoyment of the Eligible Property, or any portion thereof. The nondiscrimination and non-segregation covenants contained in the Housing Affordability Covenant shall remain in effect in perpetuity.
B. Developer shall not discriminate against any person on the basis of race, color, creed, religion, national origin, ancestry, sex, marital status, or physical handicap in the performance of the Scope of Services of this Agreement. Without limitation, Developer hereby certifies that it will not discriminate against any employee or applicant for employment because of race, color, religion, sex, marital status or national origin. Further, Developer shall promote affirmative action in its hiring practices and employee policies for minorities and other designated classes in accordance with federal, state and local laws.
Such action shall include, but not be limited to, the following: recruitment and recruitment advertising, employment, upgrading, and promotion. In addition, Developer shall comply with all state and federal laws prohibiting the exclusion from participation under this Agreement of any employee or applicant for employment on the basis of age, handicap, or religion.
SECTION 20. Effect of Covenants.
City is the beneficiary of the terms and provisions of this Agreement and of the restrictions and affordable housing covenants running with the land with respect to the Eligible Properties, whether or not appearing in the Housing Affordability Covenant(s), for and in Packet Pg. 681
22 its own right and for the purposes of protecting the interests of the community in whose favor and for whose benefit the covenants running with the land have been provided. The Affordable Housing Covenants in favor of City shall run without regard to whether City has been, remains, or is an owner of any interest in an Eligible Property and shall be effective as both covenants and equitable servitudes against the Eligible Property. If any of the Affordable Housing Covenants referred to in this Agreement are breached, City shall have the right to exercise all rights and remedies and to maintain any actions or suits at law or in equity or other proper proceedings to compel the curing of such breaches to which it may be entitled.
SECTION 21. Notices.
A. Notices, demands, and communications between City and Developer shall be sufficiently given if personally delivered or delivered by a nationally-recognized courier service or sent by registered or certified mail, postage prepaid, return receipt requested, to the following addresses:
If to City: City of San Bernardino
Community and Economic Development – Housing Division
290 North “D” Street Third Floor
San Bernardino, CA 92401-1734
Phone: (909) 384-5357
If to Developer: NPHS San Bernardino
9551 Pittsburg Ave.
Rancho Cucamonga, CA. 91730
Phone: (909)988-5274
B. Notices shall be effective upon receipt, if given by personal delivery; upon receipt, if emailed, provided there is written confirmation of receipt (except that if received after 5 p.m., notice shall be deemed received on the next business day); the earlier of (i) three (3) business days after deposit with United States Mail, or (ii) the date of actual receipt as evidenced by the return receipt, if delivered by certified mail; or (iii) one (1) day after deposit with the delivery service, if delivered by overnight guaranteed delivery service.
Each party shall promptly notify the other party of any change(s) of address to which notice shall be sent pursuant to this section.
SECTION 22. Compliance with Laws.
Developer shall comply with all Applicable Governmental Restrictions. As used herein, “Applicable Governmental Restrictions” shall mean and include any and all laws, statutes, ordinances, codes rules, regulations, directives, writs, injunctions, orders, decrees, rulings, conditions of approval, or authorizations, now in force or which may hereafter be in force, of any governmental entity, agency or political subdivision as they pertain to the performance of this Agreement or construction/reconstruction of the Project, including specifically but without limitation all code and other requirements of the jurisdiction in which the Project is located; the National Environmental Policy Act of 1969, as amended; fair housing laws; prevailing wage laws per the Davis-Bacon Act 40 U.S.C. § 3141-3148; Packet Pg. 682
23 HOME Regulations; and any other applicable federal, state and local law. Developer shall maintain all necessary licenses and registrations for the lawful performance of the work required of Developer and hold City and other Indemnitees harmless for any suit, cost, attorneys’ fees, claim, administrative proceeding, damage, wage award, fine, penalty, or liability arising out of or relating to Developer’s failure to comply with any Applicable Governmental Restrictions including, without limitation, the nonpayment of any prevailing wages required to be paid in connection with the Project, as applicable. Developer is solely responsible for determining the applicability of laws, and shall not rely on statements by City as to the existence, effect, or applicability of such laws.
SECTION 23. Developer and each Subcontractor are Independent Contractors.
Developer shall at all times during the performance of any work described in the Scope of Services be deemed to be an independent contractor. Neither Developer nor any of its contractors or subcontractors shall at any time or in any manner represent that it or any of its employees are employees of City. City shall not be requested or ordered to assume any liability or expense for the direct payment of any salary, wage or benefit to any person employed by Developer or its subcontractors to perform any item of work described in the Scope of Services. Developer is entirely responsible for the immediate payment of all subcontractor and material supplier liens.
SECTION 24. Severability.
Each and every section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof to certain circumstances shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is declared invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
SECTION 25. Amendment or Modification.
This Agreement may only be modified or amended by written instrument duly approved and executed by each of the Parties hereto, following all necessary approvals and authorizations for such execution.
SECTION 26. Governing Law.
This Agreement shall be governed by the laws of the State of California. Any legal action arising from or related to this Agreement shall be brought in the Superior Court of the State of California in and for the County of San Bernardino.
SECTION 27. Non-waiver.
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24 Failure or delay of City to enforce any provision of this Agreement shall not constitute a waiver of the right to compel enforcement of the same provision or any remaining provisions of this Agreement.
SECTION 28. Assignment.
The Developer acknowledges that the qualifications and identity of the Developer are of particular importance to the City and the City has relied and is relying on the specific qualifications and identity of the Developer in entering into this Agreement. This Agreement shall be assignable by Developer only with the prior express written consent of City, which consent may be withheld by City in its sole discretion. For purposes of this section, an assignment includes any merger, consolidation, sale, or lease of all or substantially all of the assets of the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets of the Developer. Notwithstanding anything to the contrary in this Agreement, no purported assignment of this Agreement shall be effective if not approved by City or if such assignment would violate any Applicable Governmental Restrictions. City’s consent to any assignment shall be expressly conditioned upon (i) the assignee’s execution of such documents as required by City in its sole discretion, including, without limitation, any and all documents deemed necessary by City to provide for said assignee’s assumption of all of the obligations of Developer hereunder and under any documents executed by Developer in connection herewith, and (ii) City’s approval of the financial condition and credit-worthiness of such proposed assignee and the assignee’s ability to perform all of Developer’s obligations under this Agreement and all documents executed in connection herewith, as may be determined by City in its sole discretion. Any assignment or other transfer, except for sales to Qualified Homebuyers, made in contravention of this section shall be voidable at the election of the City or the City may terminate this Agreement or exercise any other remedy available to the City herein, at law, or in equity.
SECTION 29. Representations of Persons Executing this Agreement.
A. The persons executing this Agreement warrant that they are duly authorized to execute this Agreement on behalf of and are legally able to bind the respective party that each purports to represent.
B. Developer is a California limited liability company, lawfully entitled to do business in the State of California, and has the legal right, power, and authority to enter into this Agreement and the instruments and documents referenced herein. Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for the Developer’s authorization to enter into Agreement. Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or Packet Pg. 684
25 under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer or to the Project.
C. The Developer acknowledges that the execution of this Agreement by City has been made in material reliance by City on the representations, warranties, and covenants made by Developer. If the Developer becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Developer under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Developer’s knowledge and/or belief as of a certain date, the Developer will give immediate written notice of such changed fact or circumstance to the City.
SECTION 30. Execution in Counterparts.
This Agreement may be executed in one (1) or more counterparts, each of which will constitute an original.
SECTION 31. Effectiveness of This Agreement as to City.
This Agreement shall not be binding on City until approved by the City Council and signed by an authorized representative of Developer, and executed by the City Manager or his or her designee.
SECTION 32. Conflicts of Interest.
A. Developer hereby represents that it has no interests adverse to City at the time of execution of this Agreement. Developer hereby agrees that, during the term of this Agreement, Developer shall not enter into any agreement or acquire any interests detrimental or adverse to City. Additionally, Developer hereby represents and warrants to City that Developer and any partnerships, individual persons or any other party or parties comprising Developer (its officers and employees), together with each contractor or subcontractor who may hereafter be designated to perform services pursuant to this Agreement, do not have and, during the term of this Agreement, shall not acquire any property ownership interest, business interests, professional employment relationships, contractual relationships of any nature or any other financial arrangements relating to City, property over which City has jurisdiction or any members or staff of City that have not been previously disclosed in writing to City, and that any such property ownership interests, business interests, professional employment relationships, contractual relationships of any nature or any other financial arrangements will not adversely affect the ability of Developer to perform the services to City as set forth in this Agreement.
B. Developer shall comply with the conflict of interest provisions set forth in 24 C.F.R. §
92.356(f).
SECTION 33. Non-Exclusivity.
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26 This Agreement shall not create an exclusive relationship between City and Developer for the Scope of Services as set forth in Attachment “A” or any similar or related services.
City may, during the term of this Agreement, contract with other persons or entities for the performance of the same, similar, or related services as those that may be performed by Developer under this Agreement. City reserves the discretion and the right to determine the amount of services to be performed by Developer for City under this Agreement, including not requesting any services at all. This Agreement only sets forth the terms upon which any such services will be provided to City by Developer, if such services are requested by City, as set forth in this Agreement.
SECTION 34. Consequential Damages and Limitation of Liability.
City and Developer agree that except as otherwise provided in this Agreement, including, without limitation, Section 11 hereof, in no event will either Party be liable to the other under this Agreement for any damages, including, but not limited to, special damages, loss of revenue, loss of profit, operating costs, or business interruption losses, regardless of cause, including breach of contract, negligence, strict liability, or otherwise. The limitations and exclusions of liability set forth in this Section 34 shall apply regardless of fault, breach of contract, tort, strict liability or otherwise of Developer and City, their employees, officers, contractors, agents, subcontractors, or officials.
SECTION 35. Business Registration Certificate.
Developer warrants that it possesses, or shall obtain immediately after the execution and delivery of this Agreement, and maintain during the period of time that this Agreement is in effect, a business registration certificate pursuant to Title 5 of City of San Bernardino Municipal Code, together with any and all other licenses, permits, qualifications, insurance, and approvals of whatever nature that are legally required to be maintained by Developer to conduct its business activities within City.
SECTION 36. Enforced Delays; Extension of Time for Performance.
A. Neither Party shall be deemed to be in default where delays or defaults in its performance under this Agreement are due to force majeure events that are not attributable to the fault of the Party claiming an extension of time, including, without limitation, war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, government imposed moratorium legislation, freight embargoes, lack of transportation, weather-caused delays, inability to secure necessary labor, materials, or tools, or delays of any contractor, subcontractor, or supplier that delay the commencement of construction of the Project or, after such construction is commenced, suspend the prosecution of the work of improvement of the Project. An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided, however, that the Party claiming the existence of the delay first provides the other Party with written notice of the occurrence of the delay, within ten (10) calendar days after the commencement of such occurrence of a force majeure event and, thereafter, takes prompt and reasonable action within its control to restore, reconstruct or rebuild any damage to the Project caused by such force majeure event and resume regular business operation.
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27 B. The failure of City to provide any necessary approval relating to the development of the Project or the inability of Developer to satisfy any other condition of this Agreement relating to the design, financing, or development of the Project shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a forced delay under this Section 36. The Parties each expressly acknowledge and agree that changes in either general economic conditions or the economic assumptions of either of them that provided a basis for entering into this Agreement occurring at any time after the execution of this Agreement are not force majeure events and do not provide either Party with grounds for asserting the existence of a forced delay in the performance of this Agreement. Each Party expressly assumes the risk that changes in general economic conditions or changes in their economic assumptions could impose an inconvenience or hardship on the continued performance by such Party under this Agreement and that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such Party of its obligations under this Agreement.
SECTION 37. Hazardous Materials.
A. Developer represents and warrants that it has not deposited “Hazardous Materials” (as defined below) in or upon any Eligible Property and Developer covenants that it shall not deposit or permit the deposit of Hazardous Materials in or upon any Eligible Property.
Developer further covenants to remove or remediate, at its expense (subject to any reimbursement it may be able to obtain from third parties) any Hazardous Materials located in or upon the Eligible Property as of the date hereof or which are deposited in or upon the Eligible Property from and after the date hereof and during Developer’s performance of this Agreement, including any asbestos, lead-based paint and any other Hazardous Materials located in or on the site of the Project, to the extent required by and in accordance with the requirements of all Applicable Governmental Restrictions, including, without limitation, all applicable environmental laws.
B. The foregoing shall not be construed or understood to prohibit Developer from allowing Hazardous Materials to be brought upon the Project site so long as they are materials which are customary to the normal course of business in the operation of a well-designed housing facility and so long as such materials are used, stored and disposed of in accordance with all Applicable Governmental Restrictions.
C. Except with respect to any claims arising solely out of the gross negligence or misconduct of City, Developer shall, at its sole cost, indemnify, protect, defend with counsel selected by City, and hold City and its members, directors, agents, representatives, officers, officials, and employees harmless from and against any and all present and future claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and costs of attorneys, environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever relating to or arising in connection with, directly or indirectly, in whole or in part, the presence of any Hazardous Materials existing or deposited (or claimed to have been deposited) from and after the date hereof on, in, under, from, or affecting any Eligible Property or the Project or in connection with Developer’s performance of this Agreement, including, without limitation:
(i) any deposits of Hazardous Materials described in Section 37.B. above; (ii) the storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal, or transportation of, or failure to lawfully Packet Pg. 687
28 store, handle, hold, remove, contain, transport, dispose, abate, or remediate, any Hazardous Materials;
(iii) any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency or any violation of a law, rule, ordinance, regulation, judgment, order, permit, license, agreement, covenant, restriction, requirement, or similar, by Developer, its agents, representatives, or contractors and subcontractors of any tier, relating to or governing in any way Hazardous Materials; (iv) any failure of the Developer, its agents, representatives, or contractors and subcontractors of any tier, to properly complete, obtain, submit, and/or file any and all notices, permits, licenses, authorizations, covenants, or similar in connection with the Project; or
(v) implementation and enforcement by Developer, its agents, representatives, or contractors and subcontractors of any tier, of any monitoring, notification, or other precautionary measures that may, at any time, become necessary to protect against the release, potential release or discharge of Hazardous Materials.
The provisions of this section shall survive the termination or earlier expiration of this Agreement and shall not merge into any deeds conveying ownership of any of the Eligible Properties.
In connection with this release and waiver, Developer is familiar with and hereby knowingly and voluntarily waives the provisions of Section 1542 of the California Civil Code which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT
THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT,
IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” Developer further waives the benefit of any other statute, rule, regulation, or common law principle to the same or similar effect.
Initials of Developer: _________
D. For purposes of this Agreement, the term “Hazardous Materials” means, without limitation, gasoline, petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, polychlorinated biphenyls or related or similar materials, asbestos or any other substance or material as may now or hereafter be defined as a hazardous or toxic substance or material, solid waste, pollutant, contaminant, or similar term by any federal, state or local environmental law, ordinance, rule, or regulation that regulates, relates to, or imposes liability or standards of conduct concerning any such hazardous materials, pertaining to occupational health or industrial hygiene applicable to the Project, or other occupational or environmental conditions (such as ambient air, soil, soil vapor, groundwater, surface water, or land use), including, without limitation, (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C. Section 9601-9675), (ii) the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), (iii) the Clean Air Act (42 U.S.C. Section 7401 et seq.), (iv) the Resource Conservation and Recovery Act, as amended by the Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. Section 6901-6992k), (v) the Toxic Substances Control Act (15 U.S.C. Section 2601-2629), (vi) the Hazardous Materials Transportation Act (49 U.S.C. Section 5101-5128), (vii) the Carpenter-Presley-Tanner Hazardous Substance Account Act (CA Health & Safety Code Section 25300-25395.45), (viii) the Hazardous Waste Control Law (CA Health & Safety Code Section 25100 et seq.), (ix) the PorterPacket Pg. 688 29 Cologne Water Quality Control Act (CA Water Code Section 13000 et seq.), (x) the Safe Drinking Water and Toxic Enforcement Act of 1986 (CA Health & Safety Code Section 25249.5 - 25249.13), (xi) the Hazardous Materials Release Response Plans and Inventory (CA Health & Safety Code Section 25500-25547.8), (xii) the Air Resources Law (CA Health & Safety Code Section 39000 et seq.), (xiii) California Environmental Quality Act (CEQA), Public Resources Code, Sections 21000, et seq., or (xiv) in any of the regulations adopted or publications promulgated pursuant to the foregoing.
SECTION 38. Labor Provisions.
A. The Developer acknowledges that the City has not made any representation, express or implied, to the Developer or any person associated with the Developer regarding whether or not laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to Labor Code Sections 1720, et seq. The Developer agrees it shall assume the responsibility and be solely responsible for determining whether or not laborers employed in connection with the Project must be paid the prevailing per diem wage rate for their labor classification. Unless otherwise exempted pursuant to applicable provisions of California law, the prevailing wage provisions, including but not limited to those regarding payrolls, records, apprentices and trainees, shall apply to Developer’s performance of services pursuant to this Agreement.
B. The Developer, on behalf of itself, its successors, and assigns, waives and releases the City from any right of action against it that may be available pursuant to California Labor Code Sections 1726 and 1781. Developer shall, in accordance with Section 11 of this Agreement, indemnify, defend with counsel acceptable to the City, and hold the City harmless against any claims pursuant to Labor Code Sections 1726 and 1781 arising from this Agreement or the construction or operation of the Project. Developer is familiar with and hereby knowingly and voluntarily waives the provisions of Section 1542 of the California Civil Code which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” Developer further waives the benefit of any other statute, rule, regulation, or common law principle to the same or similar effect.
Initials of Developer: _________
C. Developer shall submit written proof that the Developer is insured against liability for workers’ compensation in accordance with the provisions of Section 3700 of the California Labor Code. By executing this Agreement, the Developer makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance Packet Pg. 689
30 with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this Agreement.”
D. The Developer shall require each contractor and sub-contractor performing work on the Project to provide workers’ compensation coverage for all of such contractor’s or subcontractor’s employees, unless the contractor’s or subcontractor’s employees are covered by workers’ compensation insurance provided by the Developer. If any class of employees engaged in work or services performed in connection with the Project is not covered by Labor Code Section 3700, the Developer shall provide, or require each contractor or subcontractor to provide, adequate workers’ compensation insurance covering such employees. Each workers’ compensation policy procured pursuant to this section and Section 12 of this Agreement shall contain a full waiver of subrogation clause in favor of the Additional Insureds.
SECTION 39. Section 3 of the Housing and Community Development Act of 1968, as Amended.
A. The work to be performed under this Agreement is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended (2 U.S.C. 1701u) (“Section 3”). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing.
B. The Parties to this Agreement agree to comply with HUD Regulations in 24 C.F.R. Part 75, which implement Section 3. As evidenced by their execution of this Agreement, the Parties to this Agreement certify that they are under no contractual or other impediment that would prevent them from complying with the Part 75 regulations.
C. Developer agrees to send to each labor organization or representative of workers with which Developer has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers’ representative of Developer’s commitments under this Section 3 clause, and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference and set forth the minimum number and job titles subject to hire; the availability of apprenticeship and training positions and the qualifications for each; the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin.
D. Developer agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 C.F.R. Part 75, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 C.F.R. Part Packet Pg. 690
31 75. Developer will not subcontract with any subcontractor where Developer has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 C.F.R. Part 75.
E. Developer will certify that any vacant employment positions, including training positions, that are filled (1) after Developer is selected but before the Agreement is executed, and (2) with persons other than those to whom the regulations of 24 C.F.R.
Part 75 require employment opportunities to be directed, were not filled to circumvent Developer’s obligations under 24 C.F.R. Part 75.
F. Noncompliance with HUD’s regulations in 24 C.F.R. Part 75 may result in sanctions, termination of this Agreement for default, and debarment or suspension from future HUD assisted contracts.
G. With respect to work performed in connection with Section 3 covered Indian housing assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. § 5307) also applies to the work to be performed under this Agreement.
Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this Agreement that are subject to the provisions of Section 3 and Section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with Section 7(b). [Signature Page to Follow]
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Signature Page to Home Investment Partnerships Program (Home) Infill Housing Development Master Agreement between The City Of San Bernardino and NPHS San Bernardino Developments, LLC IN WITNESS WHEREOF, City and Developer have each executed this Agreement to be effective as of the Effective Date.
CITY OF SAN BERNARDINO
Date:________________________ By:_________________________________________ Robert D. Field, City Manager
Approved as to Form:
Sonia Carvalho, City Attorney
By:___________________________
DEVELOPER
NPHS San Bernardino Developments, LLC,
a California limited liability company
Date:________________________ By:_______________________________________ Name:____________________________________
Title:_____________________________________
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Attachment A to Master Agreement
Scope of Services
A. Introduction
The Infill Housing Program was established by the City of San Bernardino (the “City”) to increase the availability of affordable homes for low-income households. The Developer has been retained to carry out infill housing activities in accordance with HOME Program regulations (24 CFR Part 92), the HOME Guide for Review of Homebuyer Projects, and the Infill Housing Development Master Agreement between the Developer and the City (the “Agreement”).
The Developer will furnish all labor, materials, supplies, equipment, and services necessary (hereinafter collectively referred to as “Services”) to design, permit, construct, market and sell the Eligible Properties to qualified low-income households, and adequately satisfy requirements set forth in the Agreement.
The Services will be carried out in a manner satisfactory to the City and any standards required as a condition of providing the HOME Funds.
B. Budget
The approved budget is ($ ), to construct/reconstruct up to ( ) Eligible Properties, subject to the Maximum per Unit Subsidy Limits established by HUD. Proceeds will be returned to the City as program income, pursuant to Section 16 C of this Agreement.
C. Program Delivery
1. General Requirements.
a. As part of the Services, Developer agrees that it will make available a primary staff person on an as needed basis within close proximity to the project sites in order to successfully complete program activities.
b. As part of the Services, Developer will provide or cause to be provided and will enter into agreements for construction manager services, property management, property acquisition and relocation consultant services, as applicable.
c. Developer will utilize realtors, appraisal services, escrow services and title companies as approved by the City. If such services have not been identified by the City within a pool of City pre-approved service providers, Developer will utilize businesses located within the City and if they are deemed to be unavailable, then utilize businesses in the County of San Bernardino. d. Developer warrants that it has the expertise and experience to perform the Services set forth in the Agreement and that it will perform said Services pursuant to the Agreement and as stated in this Scope of Services.
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e. Developer will document performance on a Quarterly Report, which report will be in a form satisfactory to the City. The Quarterly Report will be due by the 15th day of the month following the end of the quarter, as follows:
Reporting Period Report Due
October- December January 15th
January- March April 15th
April- June July 15th
July- September October 15th
Progress reports will be used by the City in evaluating time extensions requests, if any.
f. Developer will provide notification to the City of any audits or investigations including results, findings and/or liens within ten (10) calendar days after Developer has obtained information regarding such audits or investigations and the results, findings and/or liens.
2. Infill Housing Development
a. Identifying and Selecting Sites - The Developer is responsible for identifying lots within the City of San Bernardino that may be suitable for infill housing. The City will facilitate the sale or transfer of City-owned parcels to the Developer for development of Eligible Properties.
Eligible Properties must be in such condition that the total cost to construct/reconstruct and resell them does not exceed the maximum sales price limit for the County of San Bernardino established per HOME Final Rule 24 CFR Part
92.254.
Once Developer has selected a site, a request for environmental review and approval must be submitted to the City, including:
i. Photographs of the site
ii. Property profile cover sheet
iii. Total Development Cost Pro Forma with Sources and Uses that demonstrates that sufficient funds are available for the acquisition of the property, and payment for the labor, materials and other services required to complete the project.
iv. Project Timeline
The City will review the Developer’s request to make the following determinations:
1. The site is appropriate for the construction/reconstruction of infill housing.
2. The proposed- project meets HOME requirements, including those relating to maximum subsidies and maximum resale values.
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3. The proposed project does not negatively impact the surrounding environment and the property site itself will not have an adverse environmental or health effect.
The City will issue a Preliminary Property Analysis to the Developer to advise if the infill site was approved. Once an infill site is approved, the Developer can initiate the Acquisition Escrow.
a. Other than those liens approved by the City, Developer will ensure that title to the Eligible Property will be and remain free and clear from any and all security interests, liens or other encumbrances. In carrying out the Services, Developer promises and agrees that it will not pledge or otherwise encumber title to the Eligible Property in any manner that would result in any lien, security interest, charge or claim upon or against said property.
b. Construction/Reconstruction of Eligible Properties acquired by Developer pursuant to the Agreement will be completed, and said properties will be ready for sale as evidenced by a Certificate of Occupancy issued by the City and/or a recorded Notice of Completion, by the date of completion stipulated on the approved Project Timeline.
c. Developer will construct/reconstruct Eligible Properties in accordance with the California Building Code, the City’s Development Code for residential properties, pursuant to the terms of this Agreement, and in accordance with the plans and specifications approved by the City’s Planning and Building & Safety Divisions. d. As part of the Developer’s process for each Eligible Property, Developer will prepare and/or provide the following:
i. Budget Estimate - for the total development cost of the Eligible Property and a budget estimate for construction/reconstruction costs.
ii. Project Timeline - for the completion of the various steps involved in the acquisition, construction/reconstruction and sale of the Eligible Property. iii.Property Security - upon acquisition of title to an Eligible Property, Developer will provide locked fencing on the perimeter of the site to preclude unauthorized entry upon an Eligible Property.
iv. Property Maintenance - Developer must maintain property during the holding period, including utilities services, and interior and exterior appearance of the property.
v. Construction Management Services - Developer must provide construction management services for the construction or reconstruction of the Eligible Property, which will include but not be limited to: establishing a scope of work, confirm that the financing is adequate to pay for all labor and materials, Packet Pg. 695
conducting weekly on-site project inspections, managing relationships with all sub-contractors, verifying permits and City compliance, administering both conditional and unconditional lien releases. The Developer is responsible for closely monitoring the various phases of development, conducting and documenting inspections, and resolving problems that may be encountered during construction.
vi. File Maintenance - Developer must maintain adequate files for each property, ensuring compliance with all City requirements, all documents required to verify compliance with the Affirmative Marketing Guidelines as attached hereto as Attachment “J” such as copies of advertisements published in local and community newspapers, etc.
vii. Environmental - Developer must comply with Lead-Based Paint requirements, and implement all lead-based paint, asbestos, mold or any other environmental mitigation measures required, and provide proof of completion of these mitigation measures.
3. Marketing and Sale of Eligible Property.
a. Marketing - Developer will market the Eligible Property through advertising, published promotional materials and community outreach, in accordance with the Affirmative Marketing Guidelines as described in Attachment “J’’. b. Marketing Materials - All marketing materials must include language identifying the Project as a City-funded project, and include the City seal and the Fair Housing logo. c. Sale to Qualified Homebuyer - Eligible properties must be sold to Qualified Homebuyers and/or First Time Homebuyers, and who will use the Eligible Property as a primary place of residence. The Developer is responsible for the following process:
1. Identify Homebuyer - Developer must identify prospective Qualified Homebuyers, facilitate adequate homebuyer education training and pre- qualify the homebuyer using the HOME Part 5 definition (24 CFR Part 5.603) of income, to establish eligibility to purchase the Eligible Property. Developer must submit the following documents for the Qualified Homebuyer, for City review and certification of income eligibility:
• Last three (3) years tax returns (State and Federal) (1040’s) signed, with W2’s.
• Income Certification form
• Supporting income documentation as required by HOME
Regulations, Part 5 definition of income, for all household members who are 18 years of age and older and will reside in the Eligible Property, including 2 months of source documentation for all Packet Pg. 696
income sources such as paystubs, bank statements, employment verification, verification of income from assets, etc.
• A California Association of Realtors California Residential Purchase Agreement fully executed by the prospective homebuyer. • Application Affidavit- Completely filled out and signed by Qualified Homebuyer.
• 3-year Housing History
• Homebuyer Education Certificate from a HUD-approved Housing Counseling Agency
• Proof of completion of a Financial Literacy course
• Evidence of loan terms for first mortgage, verifying loan amount, fixed rate, and monthly payment amount. Non- traditional mortgages, such as negative amortization loans, interest-only loans, or loans with balloon payments, are not allowed.
• Proof of legal residency in the United States for all members of the household who are applying for consideration as the Qualified Homebuyer.
ii. Income Eligibility - In determining whether a prospective homebuyer is income eligible, the Developer will adhere to the procedures specified in 24 CFR Part
92.203. The City utilizes the HOME Regulations Part 5 definition of income (24 CFR Part 5), which is the gross amount of income of all adult household members that is anticipated to be received during the coming 12-month period.
Household income cannot exceed eighty percent (80%) of AMI as established by HUD. It is the Developer’s responsibility to properly determine income eligibility by examining source documentation evidencing anticipated annual income, and applying the correct income limits.
d. Appraisal - Developer must obtain an appraisal from an appraiser approved by the City to determine the sales price for the Eligible Property, to ensure that the sales price does not exceed the homeownership sales price limits in accordance with Section 92.254(a)(2)(iii) of the HOME Final Rule.
e. Escrow - Developer will work with the selected title company and manage the escrow process through closing on behalf of the Qualified Homebuyer, and ensure that all the HOME Loan Documents and property documents are executed, notarized and recorded as needed.
4. Construction Requirements.
a. Developer will cause the construction/reconstruction work to proceed diligently no later than fourteen (14) calendar days following the close of the Acquisition Escrow. “Completion of the Project” shall occur no later than the date approved in the Project timeline. “Completion of the Project” shall be deemed to have occurred when the City has received satisfactory evidence that the City has executed the final inspection for the particular Eligible Property and has authorized the unconditional provision of utilities to the Eligible Property.
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b. Developer shall provide evidence that the construction/reconstruction work on the Eligible Property has been completed in compliance with this Agreement, and that all final permits and certificates necessary for the sale of the Eligible Property have been obtained, including, without limitation, the following, each of which is subject to the City’s review and approval: (1) a minimum 5- year warranty from the general contractor, in a form reasonably acceptable to the City, with respect to the construction work performed and all components and systems constructed or installed upon the Eligible Property; (2) a certificate of occupancy or Notice of Completion, as may be warranted, and other final permits and licenses necessary to permit the use and occupancy of the Eligible Property for its intended purposes, which have been issued by proper governmental agencies; and (3) evidence satisfactory to the City that the Eligible Property is free from any mechanics’ liens.
5. Relocation Requirements.
In the event relocation is determined to be a requirement for the successful implementation of the Agreement, the Developer shall be required to submit a relocation plan to the City for consideration. It is the preference of the City that the Developer acquire only Eligible Properties that have been non-occupied for 90 days or more, but in the event that acquired properties require relocation assistance Developer shall be responsible for funding and compliance with all relocation requirements as governed by federal relocation laws and regulations for projects funded in whole or in part with HOME funding, including the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act (42 U.S.C. §§ 4601, et seq., as amended), Federal Relocation Regulations (49 CFR Part 24), and the HUD Tenant Assistance, Relocation and Real Property Acquisition Handbook (1378.0).
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Attachment B to Master Agreement
Site Agreement
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SITE AGREEMENT
THIS SITE AGREEMENT (“Agreement”) is made as of the day of , 20 , by and between the City of San Bernardino, a municipal corporation (‘‘the City”), and , a (“Developer”), for the purpose of acquiring blighted vacant lots, constructing reconstructing infill housing, and selling the property, whose address is indicated below (“Project”), in accordance with the terms of that certain Master Agreement dated entered into between Developer and the City (the “Master Agreement”).
The City agrees, subject to the terms and conditions of the Master Agreement and this Agreement and in consideration of the representations, covenants and obligations of Developer contained in the Master Agreement and this Agreement, to make a grant to Developer in the amount not to exceed Dollars ($ ) (the “Loan”) for the purpose of providing acquisition and construction/reconstruction financing for a detached, single-family home located at , San Bernardino, CA (the “Eligible Property”), which Eligible Property will be reserved for a household whose income is less than or equal to 80% of Area Median Income (“AMI”) as provided in the Master Agreement, and whose legal description is attached herewith as Exhibit “A”, to be used solely for the purposes described herein and secured by a Deed of Trust. The City’s source of funding for the Grant is provided from the HOME Investment Partnerships Program, 24 CFR Part 92, (hereinafter referred to as “HOME”) administered and funded by the United States Department of Housing and Urban Development (“HUD”). Dignity Health’s Community Investment Group (CIG) and the Robert Wood Johnson Foundation are the other sources of financing for this project.
Developer will deliver to the City, among other items, the “Deed of Trust”, ‘‘Note” and the “Housing Affordability Covenants”, in the respective forms attached as Exhibits “E”, “F”, and “G”, herewith to, respectively, secure repayment of the grant by Developer as provided herein and to ensure that the affordability and habitability of the Project is maintained in accordance with the terms of those instruments, the Master Agreement and this Agreement.
Developer will further attach to this Agreement: (i) a completed version of the attached Exhibit “B’’, the Development Pro Forma, for the Project for the above described Eligible Property; (ii) a project timeline in the format of the attached Exhibit “C” for completion of such Project; and (iii) a completed version of the attached Exhibit “D”, the Sources and Uses Schedule. Together these documents shall memorialize, for the Eligible Property, the Development Budget required to complete the Project, the Schedule of Performance for the Project, and the Financing Plan for the Project agreed upon by the Developer and the City.
By the execution and submittal of this Site Agreement, and upon acceptance hereof by the City, the Developer shall apply all requirements of the HOME program as required by federal law, rules and regulations in addition to all other requirements contained in the Master Agreement. [Signatures on Next Page]
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IN WITNESS WHEREOF, City and Developer have each executed this Agreement, to be effective as of the Effective Date, as defined in this Agreement.
CITY OF SAN BERNARDINO
Date:________________________ By:_________________________________________ Robert D. Field, City Manager
Approved as to Form:
Sonia Carvalho, City Attorney
By:___________________________
DEVELOPER
Date:________________________ By:_________________________________________ [Name, Title]
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Attachment C to Master Agreement
Total Development Cost Pro Forma Template
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Total Development Cost
Pro Forma
(Property Address)
Acquisition Cost
Purchase Price $ Acquisition - price of property as-ls
Closing Cost $ Escrow and Title Fees etc.
Appraisal $ Third party appraisal of the property as-is Subtotal Acquisition Cost a. $
Construction Cost
Direct Construction $ Cost estimated to complete scope of work General Conditions $ Cost of temporary utilities, toilets, fencing, lighting, etc.
Profit/Overhead $ General Contractor’s Profit and Overhead Contingency $ Percentage of Construction, Gen. Conditions, and Profit/OH Subtotal Construction Cost b. $
Indirect Cost
Hazard Insurance $ Insurance Coverage for the work performed Building Fees & Permits $ Cost of obtaining construction permits etc.
Lead Based Paint Risk
Assessment $ Cost of Lead Based Paint
Asbestos and Mold Inspection $ Cost of Asbestos and Mold Report
Security During Construction $ Intermediary fixed fee per homebuyer
Property Taxes $ Taxes for the house incurred during holding period Homebuyer Education Course Fee $ Cost of enrollment in Homebuyer course for Qualified Homebuyer
Subtotal Indirect Cost c. $
Sales Cost
Commissions $ Brokerage commissions
Appraisal $ Third party appraisal of property after rehab Title & Escrow $ Seller’s side escrow and title fees
Subtotal Sales Cost d. $
Developer Fee e. $ Developers Fee for managing project (fixed fee) Total Development Cost f. $ The sum of a., b., c., d. and e.
Final Sale Price g. $ Estimated market value of home after construction Amount Granted to Project $ (f.-g.) (proposed)
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Sources and Uses Schedule
(ADDRESS)
San Bernardino
Sources: Construction
HOME Acq./Rehab Loan
Deferred Developer Fee
Uses: Construction
$ Acquisition Cost
$ Rehabilitation Cost
$
$
Other $ Indirect Cost $
$ Sale Cost
$ Developer Fee*
$ Other
$
$
$
$ $
Total $ Total $
Sources: Permanent Uses: Permanent
First Mortgage Loan $ Acquisition Cost $
Homebuyer Down payment $ Rehabilitation Cost $
Down Payment Assistance
HOME Loan Write-off
$ Indirect Cost
$ Sale Cost
$
$
Other $ Developer Fee $
$ Other $
$ $
Total $ $
*Note: Equal to 10% of the total Development Cost recognized upon resale.
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Attachment D to Master Agreement
Project Timeline Template
Task
No.
Event/Activity Duration Start Date End Date
1 Property Identified
2 Open Escrow
3 Due Diligence Period
4 Review and Execute Sub-agreements
5 Rehab Construction Drawings submitted if applicable
6 Schedule security
7 Schedule Job Walk
8 Schedule Roof Replacement
9 Schedule A/C Repair
10 Close Acquisition Escrow
11 Transfer utilities to HPI
12 Install Security System
13 Lead Paint/Asbestos and Environmental testing
14 Jobwalk 9:00 AM
15 Bids Due 10:00 AM
16 Award Bid
17 Work Begins
18 Punch List
19 Construction Complete
20 Marketing of Property
21 Identify Buyer and Qualify for Program Eligibility
22 Provide Homebuyer Education Certificate
23 Submit Homebuyer Application to Agency
24 Escrow Period
25 Process and Record Loan Documents of behalf of buyer 26 Close Escrow and Deliver Property to Homebuyer
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Attachment F to Master Agreement
Developer Deed of Trust Form
Packet Pg. 706
Recording Requested by and
When Recorded Mail To:
CITY OF SAN BERNARDINO
290 North “D” Street, Third Floor
San Bernardino, CA 92401
Attn: Community & Economic Development
Housing Division
Above Space For Recorder’s Use Only
No fee shall not be imposed on any real
estate instrument, paper, or notice
executed or recorded by the state or any
county, municipality, or other political
subdivision of the state - GC 27388.1
(a)2(D)
DEED OF TRUST, ASSIGNMENT OF RENTS.
SECURITY AGREEMENT AND FIXTURE
FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (“Deed of Trust”) is made as of , by and between, (“Trustor”), (“Trustee”); and THE CITY OF SAN BERNARDINO, INC., a municipal corporation (“Beneficiary”).
R E C I T A L S
A. Beneficiary is making a grant to Trustor in the original principal amount of DOLLARS ($ ) (“Grant”) pursuant to that certain unrecorded HOME Investment Partnerships Program (HOME) Infill Housing Development Master Agreement (“Master Agreement”) entered into by Trustor and Beneficiary and dated as of and that certain unrecorded Site Agreement (the “Site Agreement”) entered into by Trustor and Beneficiary and dated as of . Copies of the Master Agreement and the Site Agreement are on file with Beneficiary as a public record.
B. Trustor shall use the Grant proceeds to acquire property for the development of, and/or to develop, affordable housing as further described in the Master Agreement and the Site Packet Pg. 707
Agreement (the “Project”). The property on which the Project will be developed is legally described in Attachment “1” to this Deed of Trust (the “Eligible Property”).
NOW THEREFORE, in consideration of the Grant, Trustor hereby irrevocably grants, conveys, transfers and assigns to Trustee and to its successors and assigns, in trust for the benefit of Beneficiary, with power of foreclosure and right of entry and possession as provided below, all of its present and future estate, right, title and interest in and to the Eligible Property, and grants to Beneficiary a security interest in the following:
(A) All development rights, air rights, water, water rights, and water stock relating to the Eligible Property.
(B) All present and future structures, buildings, improvements, appurtenances and fixtures of any kind on the Eligible Property, including but not limited to all apparatus, attached equipment and appliances used in connection with the operation or occupancy of the Eligible Property, such as heating and air-conditioning systems and facilities used to provide any utility services, ventilation, vehicular cleaning, storage or other services on the Eligible Property, and all signage, carpeting and floor coverings, partitions, generators, screens, awnings, boilers, furnaces, pipes, plumbing, vacuum systems, brushes, blowers, cleaning, call and sprinkler systems, fire extinguishing apparatus and equipment, water tanks, air cooling equipment, and gas and electric machinery and equipment, it being intended and agreed that all such items will be conclusively considered to be a part of Eligible Property conveyed by this Deed of Trust, whether or not attached or affixed to the Eligible Property. (C) All appurtenances of the Eligible Property and all rights of Trustor in and to any streets, roads or public places, easements or rights of way, relating to the Eligible Property. (D) All of the rents, royalties, profits and income related to the Eligible Property, to the extent not prohibited by any applicable law.
(E) All proceeds and claims arising on account of any damage to or taking of the Eligible Property and all causes of action and recoveries for any loss or diminution in value of the Eligible Property.
(F) All existing and future goods, inventory, equipment and all other personal property of any nature whatsoever now or hereafter located on the Eligible Property which are now or in the future owned by Trustor and used in the operation or occupancy of the Eligible Property or in any construction on the Eligible Property but which are not effectively made real property under Paragraph (B) above, including but not limited to all appliances, furniture and furnishings, building service equipment, and building materials, supplies, equipment, machinery, plumbing and plumbing material and supplies, concrete, lumber, hardware, electrical wiring and electrical material and supplies, roofing material and supplies, doors, paint, drywall, insulation, cabinets, ceramic material and supplies, flooring, attached appliances, fencing, landscaping and all other materials, supplies and property of every kind and nature.
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(G) All present and future accounts, general intangibles, chattel paper, contract rights, deposit accounts, instruments and documents as those terms are defined in the California Uniform Commercial Code, now or hereafter relating or arising with respect to the Eligible Property and/or the use thereof or any improvements thereto, including without limitation: (i) all rights to the payment of money, including escrow proceeds arising out of the sale or other disposition of all or any portion of the estate of Trustor upon the Eligible Property now or hereafter existing thereon; (ii) all plans, specifications and drawings relating to the development of the Eligible Property and/or any construction thereon; (iii) all use permits, licenses, occupancy permits, construction and building permits, and all other permits and approvals required by any governmental or quasi-governmental authority in connection with the development, construction, use, occupancy or operation of the Eligible Property; (iv) any and all agreements relating to the development, construction, use, occupancy and/or operation of the Eligible Property between Trustor and any contractor, subcontractor, project manager or supervisor, architect, engineer, laborer or supplier of materials; (v) all lease or rental agreements; (vi) all names under which the Eligible Property is now or hereafter operated or known and all rights to carry on business under any such names or any variant thereof; (vii) all trademarks relating to the Eligible Property and/or the development, construction, use, occupancy or operation thereof; (viii) all goodwill relating to the Eligible Property and/or the development, construction, use, occupancy or operation thereof; (ix) all reserves, deferred payments, deposits, refunds, cost savings, bonds, insurance policies and payments of any kind relating to the Eligible Property; (x) all loan commitments issued to Trustor in connection with any sale or financing of the Eligible Property; (xi) all funds deposited with Beneficiary by Trustor, and all accounts of Trustor with Beneficiary, including all accounts containing security deposits and prepaid rents paid to Trustor in connection with any leases of the Eligible Property, and all proceeds thereof; and (xii) all supplements, modifications and amendments to the foregoing.
(H) All of the right, title and interest of Trustor in and to all sales contracts of any nature whatsoever now or hereafter executed covering any portion of the Eligible Property, together with all deposits or other payments made in connection therewith. (I) All of the right, title and interest of Trustor in and to any construction plans and specifications, building permits, and all other documents necessary for completion of improvements to the Eligible Property.
(J) All shares of stock or other evidence of ownership of any part of the Eligible Property that is owned by Trustor in common with others, and all documents of membership in any owners’ or members’ association or similar group having responsibility for managing or operating any part of the Eligible Property.
Trustor does hereby covenant with Trustee and Beneficiary, that Trustor has good right to bargain, sell and convey Trustor’s interest in the Eligible Property in the manner and form as above written; and Trustor warrants and will defend said interest for the benefit of Beneficiary forever, against all lawful claims and demands whatsoever except as stated above.
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THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
The performance of each agreement of Trustor made in connection with the Eligible Property, including without limitation the Master Agreement, the Site Agreement, that certain Housing Affordability Covenant entered into by and between Trustor and Beneficiary for the purpose of ensuring the continued affordability of the Eligible Property, and all other agreements executed in connection with any of the foregoing agreements (collectively, the “Secured Agreements”).
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY COVENANTS AND AGREES AS FOLLOWS:
1 Payment of Secured Obligations. Trustor shall pay when due the principal of, and the interest on, any and all sums required to be paid by Trustor under the Secured Agreements.
2. Maintenance, Repair, Alteration. Trustor shall keep the Eligible Property in good condition and repair; to complete promptly and in a good and workmanlike manner all improvements to be constructed on the Eligible Property, including specifically all improvements described in the Master Agreement and the Site Agreement, and promptly restore in like manner any structure that may be damaged or destroyed thereon; to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws, ordinances, regulations, covenants, conditions and restrictions now or hereafter affecting the Eligible Property or any part thereof or requiring any alterations or improvements thereon; not to commit or permit any waste or deterioration of the Eligible Property; to keep and maintain abutting grounds, sidewalks, roads, parking and landscape areas in good and neat order and repair; not to commit, suffer or permit, to the extent Trustor is able by the exercise of commercially reasonable best efforts, any act to be done in or upon the Eligible Property in violation of any law, ordinance or regulation.
3. Insurance. Trustor shall provide, maintain at its expense and deliver to Beneficiary at all times until completion in full of all obligations secured hereby, insurance as required by the Master Agreement, the Site Agreement or any of the other Secured Agreements.
In the event of any loss or damage, Trustor shall give immediate notice thereof to Beneficiary, and Beneficiary may thereupon make proof of such loss or damage, if the same is not promptly made by Trustor. Trustor and Beneficiary hereby agree to cooperate in making any adjustment and compromise of any loss covered by the aforementioned insurance policies upon the Eligible Property, and Trustor authorizes and empowers Beneficiary, at its option, to collect and receive the proceeds, and endorse checks and drafts issued therefor. Beneficiary agrees that in the event of any loss covered by insurance policies on the Eligible Property subject to this Deed of Trust, provided there is not then existing any material default (or such existing default will be cured by the proceeds of such insurance) in the observance or performance of any of the covenants and agreements contained herein or in the Secured Agreements, or in any other agreement with or for the benefit of the Beneficiary in connection with any obligation secured hereby, the proceeds of such insurance shall be used for the repair or restoration of the Eligible Property Packet Pg. 710
and will be disbursed in accordance with such protective terms and conditions as Beneficiary may reasonably impose.
Trustor hereby fully assigns to Beneficiary all current and future claims it may have under any policy of insurance related to the Eligible Property or the Project, regardless of whether such insurance was required to be maintained under the Secured Agreements. Any and all unexpired insurance shall inure to the benefit of and pass to the purchaser of the Eligible Property at any foreclosure sale pursuant hereto.
Further, Beneficiary may at any time in its sole discretion require Trustor to submit satisfactory evidence of insurance policies obtained pursuant to this Paragraph 3 and of Trustor’s compliance with all the provisions of said policies.
4. Lawsuits. Trustor shall appear in and defend, with counsel selected by Beneficiary, or otherwise take such action therein as Beneficiary and Trustee or either of them may deem advisable with respect to any action or proceeding affecting the Eligible Property to which Beneficiary or Trustee may be a party.
5. Beneficiary Statement. Trustor shall pay all charges for all legal fees or court costs and expenses which Beneficiary may elect to advance in order to keep unimpaired, protect, and preserve the title to the Eligible Property or the improvements thereon; and to pay for any statement provided for by law in effect at the date hereof regarding the obligations secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.
6. Condemnation. All judgments, awards of damages and settlements, hereafter made as a result of or in lieu of any condemnation or other proceedings for public use of, or for any damage to, the Eligible Property or the improvements thereon, are hereby assigned to Beneficiary. If (i) Trustor is not then in material default hereunder (or such default will be cured with the proceeds from the foregoing), and (ii) the taking is a partial taking, all proceeds for taking of or damage to the Eligible Property shall be applied to restoring the Eligible Property, if practicable, as reasonably determined by Beneficiary. In the event (i) Trustor is then in material default hereunder (and such default will not be cured with the proceeds of the foregoing), (ii) the taking is a total taking, or (iii) the taking is a partial taking and Beneficiary has reasonably determined that restoration of the Eligible Property is not practicable, the proceeds shall be paid to Beneficiary to the extent of those monies due and owing from Trustor to Beneficiary under any of the Secured Agreements, and Beneficiary is hereby authorized to receive such monies. Trustor agrees to execute such further assignments of any such award, judgment or settlement which may be received by Trustor. Beneficiary may apply any and all such sums to the obligations secured hereby in such manner as it elects or, at its option, the entire amount so received by it or any part thereof may be released. Neither the application nor the release of any such sums shall cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
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7. Permitted Acts of Beneficiary. Without affecting the liability of any person, including Trustor (other than any person released pursuant hereto), for the payment of any indebtedness secured hereby, Beneficiary is authorized and empowered as follows:
Beneficiary may at any time, and from time to time, either before or after the maturity of the obligations secured hereby, and without notice (a) release any person liable for the payment of any of the indebtedness, (b) make any agreement extending the time or otherwise altering the terms of payment of any of the indebtedness, (c) accept additional security therefor of any kind, or (d) release any property, real or personal, securing the indebtedness.
8. Reconveyance of Eligible Property. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Eligible Property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the persons legally entitled thereto.”
9. Default and Trustee’s Sale. Upon the occurrence of an “Event of Default” under this Deed of Trust (as defined in Section 17 below) Beneficiary may declare all principal remaining unpaid, all interest then earned and remaining unpaid, and all sums other than principal or interest secured hereby, immediately due and payable and may proceed to exercise the power of sale granted by this Deed of Trust by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said Eligible Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default, Trustee shall cause a notice of sale to be published, posted, mailed, and recorded as required by statute. Said notice of sale shall contain the notice:
‘‘NOTICE: THIS PROPERTY IS ENCUMBERED BY AFFORDABILITY COVENANTS”; however, failure to include said notice shall not affect the validity of any publication, posting, or mailing of said notice of sale or the validity of any sale based thereon. Thereafter, within the time and in the manner required by statute Trustee, without demand on Trustor, shall sell the Eligible Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Eligible Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Eligible Property so sold, but without any covenant or warranty, express or implied. Said deed shall contain the notice: ‘‘NOTICE: THIS PROPERTY IS ENCUMBERED BY AFFORDABILITY COVENANTS”; however, failure to include said notice shall not affect the validity of any sale. The recitals in such deed of any matters or facts shall be conclusive Packet Pg. 712
proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: first, all sums expended by Beneficiary under the terms hereof or under any of the Secured Agreements and not then repaid, with accrued interest as specified in said agreements; second, all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
10. Substitute Trustees. Beneficiary, or any successor in ownership of any obligation secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by Beneficiary and duly acknowledged and recorded in the Office of the Recorder of the County of San Bernardino, and otherwise complying with the provisions of California Civil Code Section 2934a, or any successor section, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, right, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded, and the name and address of the new Trustee.
11. Successors Bound. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, assigns, trustees and receivers. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
12. Evidence of Title. If, because of any default hereunder, or because of the filing or contemplated filing of any legal proceedings affecting the Eligible Property, Beneficiary deems it necessary to obtain an additional evidence of title or to cure any defect in title, Beneficiary may procure such evidence or cure such defect, pay the cost thereof, and shall have an immediate claim against Trustor therefor, together with a lien upon the Eligible Property for the amount so paid, with interest at the Deferral Rate. Beneficiary is further authorized to require an appraisal of the Eligible Property at any time that Beneficiary may reasonably request.
13. Statute of Limitations. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived by Trustor, to the full extent permissible by law.
14. Severability. The invalidity of any one or more covenants, phrases, clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining portions of this Deed of Trust or any part hereof and this Deed of Trust shall be construed as if such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted herein.
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15. Order of Application. If any obligation secured hereby is now or hereafter becomes further secured by a security agreement, deed of trust, pledge, contract of guaranty or other securities in addition to the security provided to Beneficiary by this Deed of Trust, Beneficiary may to the full extent allowed by law, at its option, exhaust any one or more of said securities as well as the security hereunder, either concurrently or independently and in such order as it may determine, and may apply the proceeds received upon the obligations secured hereby without affecting the status of, or waiving any right to exhaust, all or any other security including the security thereunder, and without waiving any breach or default in any right or power, whether exercised hereunder or contained herein, or in any such other security.
16. Covenants of Trustor.
Audit by State and/or Federal Agencies. In the event the Master Agreement or any agreement executed in connection therewith is subjected to audit, monitoring or other inspections by any appropriate state and/or federal agency, Trustor shall comply with such investigations and pay, on behalf of itself and Beneficiary, any amount of the cost to the investigating agency of such investigations as may be required by law (unless such investigation and any resulting liability arise solely from the gross negligence or willful misconduct of Beneficiary). b. Program Evaluation and Review. Trustor shall allow Beneficiary’s authorized personnel to inspect and monitor its facilities and program operations as they relate to the Project or the Eligible Property, including the interviewing of Trustor’s staff and other program participants, as reasonably required by Beneficiary during the term of the Master Agreement or any agreement executed in connection therewith.
17. Default. Trustor shall be in default under this Deed of Trust upon any of the following events which, if not cured within the applicable cure period provided, if any, shall constitute an event of default hereunder (“Event of Default”):
a. The failure of Trustor to pay or perform any monetary covenant or obligation hereunder or under the terms of any of the Secured Agreements or any document executed in connection therewith, without curing such failure within ten (10) calendar days the date such payment is due.
b. The failure of Trustor to perform any nonmonetary covenant or obligation hereunder or under the terms of any of the Secured Agreements or any document executed in connection therewith, without curing such failure within thirty (30) calendar days after receipt of written notice of such default from Beneficiary (or from any party authorized by Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency; provided, however, that if any default with respect to a nonmonetary obligation is such that it cannot be cured within a 30-day period, it shall be deemed cured if Trustor commences the cure within said 30-day period and diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described Packet Pg. 714
notice requirements and cure periods shall not apply to any Event of Default described in Section 17(c) through 17(g) below;
c. The material falsity of any representation, or the breach of any warranty or covenant, made by Trustor under the terms of this Deed of Trust, the Secured Agreements, or any other document executed in connection therewith; d. Trustor, or any constituent member or partner or majority shareholder of Trustor, shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition that is not withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding;
e. If without the application, approval or consent of Trustor, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Trustor or any constituent member or partner or majority shareholder of Trustor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Trustor or of all or any substantial part of Trustor’s assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Trustor, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, pending, and unstayed, for any period of ninety (90) consecutive days; f. Trustor shall suffer or attempt to effect a “Transfer’’ (as defined in Section 30 below) other than in full compliance with the terms of this Deed of Trust. g. Trustor shall be in default under the Housing Affordability Covenant, unless the default is cured or waived within the cure period, if any, applicable thereto under the terms of the obligation which is in default; or h. Voluntary cessation of the operation of the Project during the construction phase for a continuous period of more than thirty (30) calendar days or the involuntary cessation of the operation of the Project during the construction phase in accordance with this Deed of Trust for a continuous period of more than sixty (60) calendar days.
18. Breach by Trustor, Cure by Beneficiary or Trustee. In the event of Trustor’s failure to comply with any or all of the promises and agreements set forth in this Deed of Trust and the Secured Agreements or to make any payment or to do any act as provided in this Deed of Trust or the Secured Agreements, then Beneficiary or Trustee, but without Packet Pg. 715
obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any such obligation, may make or do the same in such manner and to such extent as either in its sole judgment may deem necessary to protect the security hereof (including, without limitation, to procure insurance and pay the premiums therefor; to pay unpaid water rents, sewer service charges, and other governmental or municipal charges and rates, and all or any part of the unpaid taxes, assessments, and reassessments, if in its judgment the same are just and valid; to pay the cost of appraisals, reappraisals, and extensions of title; to enter or have its agents enter upon the Eligible Property whenever reasonably necessary for the purpose of inspecting the Eligible Property or making repairs or installations as it deems necessary to preserve the Eligible Property or to protect the same from vandalism, without thereby becoming liable as a trespasser or mortgagee or beneficiary in possession, and to pay for such repairs and installations). Beneficiary and Trustee are hereby authorized to enter upon the Eligible Property for such purposes; to appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, to pay necessary expenses, employ counsel of its choice, and pay the reasonable fees ·of such counsel. Trustor agrees to pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and agrees that Beneficiary or Trustee, as the case may be, shall have a lien upon the Eligible Property for the sums so expended and such interest thereon.
19. Personal Property Security Agreement. All property covered by this Deed of Trust shall be deemed to constitute real property or interests in real property to the maximum extent permitted under applicable law. To the extent that any tangible property, equipment or other property covered by this Deed of Trust constitutes personal property, such personal property shall constitute additional security. This Deed of Trust shall create in Beneficiary a security interest in such personal property and shall in respect thereof constitute a security agreement (the “Personal Property Security Agreement”). Beneficiary shall be entitled to all of the rights and remedies in respect of any personal property included in the Eligible Property covered by this Deed of Trust that are afforded a secured party under the Uniform Commercial Code and other applicable law. At Beneficiary’s request, Trustor will at any time and from time to time furnish Beneficiary for filing financing statements signed by Trustor in form satisfactory to Beneficiary. Trustor acknowledges and agrees that thirty (30) days’ notice as to the time, place and date of any proposed sale of any personal property shall be deemed reasonable for all purposes. Trustor agrees that the Security Agreement created hereby shall survive the termination or reconveyance of this Deed of Trust unless Beneficiary executes documentation expressly terminating the Personal Property Security Agreement.
20. Assumption of Liability. Except as provided in Section 30, the assumption of liability for the performance of the obligations hereby secured, by any successor in interest to Trustor in the Eligible Property shall not release Trustor from any liability Trustor has hereunder or under the other Secured Agreements for the performance of such obligations or the repayment of any sums advanced under and secured by this Deed of Trust. Any forbearance or indulgence of Beneficiary, or extensions of time for the performance of all or any part of the obligations secured hereby, or the release of a part of the Eligible Property from the lien of this Deed of Packet Pg. 716
Trust, for or without consideration, shall not in any manner diminish or reduce the liability of Trustor (subject to the nonrecourse provisions of Section 25) for the performance of the obligations now or hereafter secured hereby. Any payment made in satisfaction of any such obligation shall be deemed to have been made on behalf and for the benefit of all parties obligated to pay the same.
21. Future Advances. Upon the request of Trustor or its successor in ownership of the Eligible Property, Beneficiary may, at its option, advance funds to Trustor or its successors in ownership, and the sums advanced, with interest as permitted by law, shall be secured by this Deed of Trust. If Beneficiary, at its option, shall make an advance as aforesaid, Trustor or its successors in ownership agree to execute and deliver to Beneficiary a note to evidence the same, payable on such terms as Beneficiary shall require.
Trustor further acknowledges and agrees that to secure the payment of any such future advances Beneficiary shall also have a lien upon all other personal property and securities now or hereafter in its possession belonging to Trustor; that all rights, powers and remedies conferred upon Beneficiary herein are in addition to each and every other right which Beneficiary has hereunder; that all rights, powers and remedies conferred upon Beneficiary in equity or by law may be enforced concurrently therewith; that Beneficiary shall be subrogated to the rights and seniority of any prior lien paid or released by reason of any such future advances; and that each and all of the covenants, agreements, and provisions hereof shall bind and inure to the benefit of the respective heirs, executors, administrators, successors, and assigns of Trustor and Beneficiary herein, and all others who subsequently acquire any right, title, or interest in the Eligible Property, or to this Deed of Trust and the indebtedness secured hereby.
22. Captions. The captions of the sections of this Deed of Trust are for convenience only and shall not be considered in resolving questions of interpretation or construction.
23. Estoppel Certificates. Trustor shall from time to time at Beneficiary’s request furnish Beneficiary or any person designated by Beneficiary a certified statement in form reasonably satisfactory to Beneficiary confirming as of the date of the certificate Trustor is not in default hereunder ( or describing any default), and stating that Trustor has no defense, right of setoff or counterclaim in the payment of any indebtedness, or any part thereof, or the observance or performance of any obligation (or describing any such defense, set off or counterclaim). Any purchaser or assignee of any of the Secured Agreements or this Deed of Trust or any interest therein may rely on such certificate.
24. Obligation Nonrecourse. Except to the extent any Event of Default hereunder results directly or indirectly from any fraud or intentional and material misrepresentation by Trustor in connection with the Secured Agreements, the Secured Agreements are nonrecourse obligations of Trustor and in the event of the occurrence of an Event of Default, Beneficiary’s only recourse under this Deed of Trust shall be against the Eligible Property, the proceeds thereof, the rents and other income arising from its use and occupancy as provided in this Deed Packet Pg. 717
of Trust, and any other collateral given to Beneficiary as security for performance of the Secured Agreements.
25. Fixture Filing. This Deed of Trust is also a fixture filing with respect to the personal property which is or is to become fixtures on the Eligible Property, and is to be recorded in the real property records of San Bernardino County, California.
26. Assignment of Rents. All of the existing and future rents, royalties, income, and profits of the Eligible Property that arise from its use or occupancy are hereby absolutely and presently assigned to Beneficiary. However, until Trustor is in default under this Deed of Trust, Trustor will have a license to collect and receive those rents, royalties, income and profits.
Upon any Event of Default by Trustor, Beneficiary may terminate Trustor’s license in its discretion, at any time, without notice to Trustor, and may thereafter collect the rents, royalties, income and profits itself or by an agent or receiver. No action taken by Beneficiary to collect any rents, royalties, income or profits will make Beneficiary a “mortgagee-in-possession” of the Eligible Property, unless Beneficiary personally or by agent enters into actual possession of the Eligible Property. Possession by a court-appointed receiver will not be considered possession by Beneficiary. All rents, royalties, income and profits collected by Beneficiary or a receiver will be applied first to pay all expenses of collection, and then to the payment of all costs of operation and management of the Eligible Property, and then to the satisfaction of the debts and obligations secured by the Deed of Trust in whatever order Beneficiary directs in its absolute discretion and without regard to the adequacy of its security. If required by Beneficiary, each lease or occupancy agreement affecting any of the Eligible Property must provide, in a manner approved by Beneficiary, that the tenant will recognize as its lessor any person succeeding to the interest of Trustor upon any foreclosure of this Deed of Trust. The expenses (including any receivers’ fees, costs of and compensation to any agent appointed by Beneficiary, counsel fees, and disbursements) incurred in taking possession and making such collection, shall be deemed a portion of the obligations secured by this Deed of Trust. The entering upon and taking possession of the Eligible Property, and/or the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Beneficiary may exercise any one or more of the remedies in this section without waiving its right to exercise any such remedies again or for the first time in the future. The foregoing shall be subject to the provisions of applicable law.
27. Applicable Law. This Deed of Trust shall be governed by, and construed in accordance with, the laws of the State of California.
28. Approvals. Except with respect to those matters set forth hereinabove providing for Beneficiary’s approval, consent or determination to be at Beneficiary’s “sole discretion” or “sole and absolute discretion,” Beneficiary hereby agrees to act reasonably with regard to any approval, consent, or other determination given by Beneficiary hereunder.
Beneficiary agrees to give Trustor written notice of its approval or disapproval following submission of items to Beneficiary for approval, including, in the case of any disapproved item, the reasons for such disapproval. Any consent to a transfer under Section 30 of this Deed of Trust, and any other consent or approval by Beneficiary under this Deed of Trust or any of the Packet Pg. 718
Secured Agreements may be given by Beneficiary’s City Manager or his or her designee without action of Beneficiary’s governing board unless the City Manager or his or her designee in his or her sole discretion elects to refer the matter to the board.
29. Good Faith and Fair Dealing. Beneficiary and Trustor agree to perform all of their obligations and the actions required of each hereunder in good faith and in accordance with fair dealing.
30. Assignment of Interest.
a. Without the prior written approval of Beneficiary, which approval Beneficiary may grant or withhold in its sole and absolute discretion, Trustor shall not (i) sell, encumber, assign or otherwise transfer (collectively, “Transfer’’) all or any portion of its interest in the Eligible Property or the Project; (ii) permit the Transfer of any portion of its ownership and/or control; or (iii) Transfer any of its rights or obligations under the Secured Agreements. Trustor hereby agrees that any purported Transfer not approved the Beneficiary as required herein shall be ab initio null and void, and no voluntary or involuntary successor to any interest of Trustor under such a proscribed Transfer shall acquire any rights pursuant to the Secured Agreements or this Deed of Trust.
b. At any time Trustor desires to effect a Transfer hereunder, Trustor shall notify Beneficiary in writing (the ‘‘Transfer Notice”) and shall submit to Beneficiary for its prior written approval (i) all proposed agreements and documents (collectively, the “Transfer Documents”) memorializing, facilitating, evidencing and/or relating to the circumstances surrounding such proposed Transfer, and (ii) a certificate setting forth representations and warranties by Trustor and the proposed transferee to Beneficiary sufficient to establish and ensure that all requirements of this Section 30 have been and will be met. No Transfer Documents shall be approved by Beneficiary unless they expressly provide for the assumption by the proposed transferee of all of Trustor’s obligations under the Secured Agreements and this Deed of Trust. The Transfer Notice shall include a request that Beneficiary consent to the proposed Transfer and shall also include a request that Trustor be released from further obligations under the Secured Agreements and this Deed of Trust. Beneficiary agrees to make its decision on Trustor’s request for consent to such Transfer as promptly as possible, anp in any event not later than thirty (30) calendar days after Beneficiary receives the last of the items required by this Section 30. In the event Beneficiary consents to a proposed Transfer, then such Transfer shall not be effective unless and until Beneficiary receives copies of all executed and binding Transfer Documents, which Transfer Documents shall conform to the proposed Transfer Documents originally submitted by Trustor to Beneficiary. From and after the effective date of any such Transfer, Trustor shall be released from its obligations under this Deed of Trust and the Secured Agreements accruing subsequent to such effective date. c. Notwithstanding anything in this Deed of Trust to the contrary, Trustor agrees that it shall not be permitted to make any Transfer, whether or not Beneficiary’s consent is required therefor and even if Beneficiary has consented thereto, if there exists an Packet Pg. 719
Event of Default under this Deed of Trust at the time the Transfer Notice is tendered to Beneficiary or at any time thereafter until such Transfer is to be effective. d. The provisions of this Section 30 shall apply to each successive Transfer and proposed transferee in the same manner as initially applicable to Trustor under the terms set forth herein.
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IN WITNESS WHEREOF, Beneficiary and Trustor have each executed this Deed of Trust, to be effective as of the date first written above.
TRUSTOR
_____________________
Date:________________________ By:_________________________________________ [Name, Title]
BENEFICIARY
CITY OF SAN BERNARDINO
Date:________________________ By:_________________________________________ Robert D. Field, City Manager
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ATTACHMENT 1 TO DEED OF TRUST
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows:
APN:
Address: , San Bernardino, CA
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Attachment G to Master Agreement Qualified
Homebuyer Deed of Trust
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Recording Requested by and When Recorded Mail To:
CITY OF SAN BERNARDINO
Community and Economic Development
290 North “D” Street, Third Floor
San Bernardino, CA 92401-1734
Attn.: Housing Division
Above Space For Recorder’s Use Only
Document entitled to free recording per
Govt. Code Section 6103
QUALIFIED HOMEBUYER
DEED OF TRUST. ASSIGNMENT OF RENTS.
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (“Deed of Trust”) is made as of , by and between (“Trustor”), (“Trustee”); and THE CITY OF SAN BERNARDINO, INC., a municipal corporation (“Beneficiary”).
R E C I T A L S
A. Trustor has acquired or will acquire an affordable single-family dwelling that has been constructed or reconstructed using funding provided by Beneficiary in the form of a loan in the original principal amount of DOLLARS ($ ) (“Loan”) pursuant to that certain unrecorded HOME Investment Partnerships Program (HOME) Infill Housing Development Master Agreement (“Master Agreement”) entered into between Beneficiary and , a (“Developer”) and dated as of, and that certain unrecorded Site Agreement (the “Site Agreement”) entered into between Beneficiary and Developer and dated as of . Copies of the Master Agreement and the Site Agreement are on file with Beneficiary as a public record.
B. The property acquired or to be acquired by Trustor is legally described in Attachment “1”to this Deed of Trust (the “Eligible Property”).
C. The Grant funds were provided to Beneficiary by the United States Department of Housing and Urban Development (“HUD”) pursuant to the HOME Investment Partnerships Program (“HOME”). By virtue of Beneficiary’s investment of the Grant funds for the improvement of the Eligible Property, HOME regulations require that the continued affordability of the Eligible Property be preserved through HOME Program Housing Affordability Covenants and Restrictions (collectively referred to herein as the “Affordable Housing Covenant”) executed by Trustor in favor of Beneficiary.
The purpose of this Deed of Trust is to secure Trustor’s performance of all agreements between Beneficiary and Trustor, including without limitation the Affordable Housing Covenant.
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NOW THEREFORE, in consideration of the Grant, Trustor hereby irrevocably grants, conveys, transfers and assigns to Trustee and to its successors and assigns, in trust for the benefit of Beneficiary, with power of foreclosure and right of entry and possession as provided below, all of its present and future estate, right, title and interest in and to the Eligible Property, and grants to Beneficiary a security interest in the following:
(A) All development rights, air rights, water, water rights, and water stock relating to the Eligible Property.
(B) All present and future structures, buildings, improvements, appurtenances and fixtures of any kind on the Eligible Property, including but not limited to all apparatus, attached equipment and appliances used in connection with the operation or occupancy of the Eligible Property, such as heating and air-conditioning systems and facilities used to provide any utility services, ventilation, vehicular cleaning, storage or other services on the Eligible Property, and all signage, carpeting and floor coverings, partitions, generators, screens, awnings, boilers, furnaces, pipes, plumbing, vacuum systems, brushes, blowers, cleaning, call and sprinkler systems, fire extinguishing apparatus and equipment, water tanks, air cooling equipment, and gas and electric machinery and equipment, it being intended and agreed that all such items will be conclusively considered to be a part of the Eligible Property conveyed by this Deed of Trust, whether or not attached or affixed to the Eligible Property. (C) All appurtenances of the Eligible Property and all rights of Trustor in and to any streets, roads or public places, easements or rights of way, relating to the Eligible Property. (D) All of the rents, royalties, profits and income related to the Eligible Property, to the extent not prohibited by any applicable law.
(E) All proceeds and claims arising on account of any damage to or taking of the Eligible Property and all causes of action and recoveries for any loss or diminution in value of the Eligible Property.
(F) All existing and future goods, inventory, equipment and all other personal property of any nature whatsoever now or hereafter located on the Eligible Property which are now or in the future owned by Trustor and used in the operation or occupancy of the Eligible Property or in any construction on the Eligible Property but which are not effectively made real property under Paragraph (B) above, including but not limited to all appliances, furniture and furnishings, building service equipment, and building materials, supplies, equipment, machinery, plumbing and plumbing material and supplies, concrete, lumber, hardware, electrical wiring and electrical material and supplies, roofing material and supplies, doors, paint, drywall, insulation, cabinets, ceramic material and supplies, flooring, attached appliances, fencing, landscaping and all other materials, supplies and property of every kind and nature. (G) All present and future accounts, general intangibles, chattel paper, contract rights, deposit accounts, instruments and documents as those terms are defined in th California Uniform Commercial Code, now or hereafter relating or arising with respect to the Eligible Property and/or the use thereof or any improvements thereto, including without limitation: (i) all rights to the payment of money, including escrow proceeds arising out of the sale or other disposition of all or any portion of the estate of Trustor upon the Eligible Property now or hereafter existing thereon; (ii) all plans, specifications and drawings relating to the development of the Eligible Property and/or any construction thereon; (iii) all use permits, licenses, occupancy permits, construction and building permits, and all other permits and approvals required by any governmental or quasi-governmental authority in Packet Pg. 725
connection with the development, construction, use, occupancy or operation of the Eligible Property; (iv) any and all agreements relating to the development, construction, use, occupancy and/or operation of the Eligible Property between Trustor and any contractor, subcontractor, project manager or supervisor, architect, engineer, laborer or supplier of materials; (v) all lease or rental agreements; (vi) all names under which the Eligible Property is now or hereafter operated or known and all rights to carry on business under any such names or any variant thereof; (vii) all trademarks relating to the Eligible Property and/or the development, construction, use, occupancy or operation thereof; (viii) all goodwill relating to the Eligible Property and/or the development, construction, use, occupancy or operation thereof; (ix) all reserves, deferred payments, deposits, refunds, cost savings, bonds, insurance policies and payments of any kind relating to the Eligible Property; (x) all loan commitments issued to Trustor in connection with any sale or financing of the Eligible Property; (xi) all funds deposited with Beneficiary by Trustor, and all accounts of Trustor with Beneficiary, including all accounts containing security deposits and prepaid rents paid to Trustor in connection with any leases of the Eligible Property, and all proceeds thereof; and (xii) all supplements, modifications and amendments to the foregoing.
(H) All of the right, title and interest of Trustor in and to all sales contracts of any nature whatsoever now or hereafter executed covering any portion of the Eligible Property, together with all deposits or other payments made in connection therewith. (I) All of the right, title and interest of Trustor in and to any construction plans and specifications, building permits, and all other documents necessary for completion of improvements to the Eligible Property.
(J) All shares of stock or other evidence of ownership of any part of the Eligible Property that is owned by Trustor in common with others, and all documents of membership in any owners’ or members’ association or similar group having responsibility for managing or operating any part of the Eligible Property.
Trustor does hereby covenant with Trustee and Beneficiary, that Trustor has good right to bargain, sell and convey Trustor’s interest in the Eligible Property in the manner and form as above written; and Trustor warrants and will defend said interest for the benefit of Beneficiary forever, against all lawful claims and demands whatsoever except as stated above.
THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
The performance of each agreement of Trustor made in connection with the Eligible Property, including without limitation the Affordable Housing Covenant entered into by and between Trustor and Beneficiary for the purpose of ensuring the continued affordability of the Eligible Property, and all other agreements executed in connection with any of the foregoing agreements (collectively, the “Secured Agreements”).
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY COVENANTS AND AGREES AS FOLLOWS:
1. Payment of Secured Obligations. Trustor shall pay when due the principal of, and the interest on, any and all sums required to be paid by Trustor under the Secured Agreements.
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2. Maintenance; Repair, Alterations. Trustor shall keep the Eligible Property in good condition and repair; to complete promptly and in a good and workmanlike manner all improvements to be constructed on the Eligible Property, including specifically all improvements described in the Master Agreement and the Site Agreement, and promptly restore in like manner any structure that may be damaged or destroyed thereon; to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws, ordinances, regulations, covenants, conditions and restrictions now or hereafter affecting the Eligible Property or any part thereof or requiring any alterations or improvements thereon; not to commit or permit any waste or deterioration of the Eligible Property; to keep and maintain abutting grounds, sidewalks, roads, parking and landscape areas in good and neat order and repair; not to commit, suffer or permit, to the extent Trustor is able by the exercise of commercially reasonable best efforts, any act to be done in or upon the Eligible Property in violation of any law, ordinance or regulation.
3. Insurance. Trustor shall provide, maintain at its expense and deliver to Beneficiary at all times until completion in full of all obligations secured hereby, property insurance covering the Eligible Property, in form appropriate for the nature of the property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to Beneficiary, naming Beneficiary as a loss payee, as its interests may appear, and such further insurance as may be required by any of the Secured Agreements. In the event of any loss or damage, Trustor shall give immediate notice thereof to Beneficiary, and Beneficiary may thereupon make proof of such loss or damage, if the same is not promptly made by Trustor. Trustor and Beneficiary hereby agree to cooperate in making any adjustment and compromise of any loss covered by the aforementioned insurance policies upon the Eligible Property, and Trustor authorizes and empowers Beneficiary, at its option, to collect and receive the proceeds, and endorse checks and drafts issued therefor. Beneficiary agrees that in the event of any loss covered by insurance policies on the Eligible Property subject to this Deed of Trust, provided there is not then existing any material default (or such existing default will be cured by the proceeds of such insurance) in the observance or performance of any of the covenants and agreements contained herein or in the Secured Agreements, or in any other agreement with or for the benefit of the Beneficiary in connection with any obligation secured hereby, the proceeds of such insurance shall be used for the repair or restoration of the Eligible Property and will be disbursed in accordance with such protective terms and conditions as Beneficiary may reasonably impose.
Trustor hereby fully assigns to Beneficiary all current and future claims it may have under any policy of insurance related to the Eligible Property, regardless of whether such insurance was required to be maintained under the Secured Agreements. Any and all unexpired insurance shall inure to the benefit of and pass to the purchaser of the Eligible Property at any foreclosure sale pursuant hereto.
Further, Beneficiary may at any time in its sole discretion require Trustor to submit satisfactory evidence of insurance policies obtained pursuant to this Paragraph 3 and of Trustor’s compliance with all the provisions of said policies.
4. Lawsuits. Trustor shall appear in and defend, with counsel selected by Beneficiary, or otherwise take such action therein as Beneficiary and Trustee or either of them may deem advisable with respect to any action or proceeding affecting the Eligible Property to which Beneficiary or Trustee may be a party.
5. Beneficiary Statement. Trustor shall pay all charges for all legal fees or court costs and expenses which Beneficiary may elect to advance in order to keep unimpaired, protect, and preserve the title to the Eligible Property or the improvements thereon; and to pay for any statement provided for by law in effect at the date hereof regarding the obligations secured hereby, any amount Packet Pg. 727
demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.
6. Condemnation. All judgments, awards of damages and settlements, hereafter made as a result of or in lieu of any condemnation or other proceedings for public use of, or for any damage to, the Eligible Property or the improvements thereon, are hereby assigned to Beneficiary. If (i) Trustor is not then in material default hereunder (or such default will be cured with the proceeds from the foregoing), and (ii) the taking is a partial taking, all proceeds for taking of or damage to the Eligible Property shall be applied to restoring the Eligible Property, if practicable, as reasonably determined by Beneficiary. In the event (i) Trustor is then in material default hereunder (and such default will not be cured with the proceeds of the foregoing), (ii) the taking is a total taking, or (iii) the taking is a partial taking and Beneficiary has reasonably determined that restoration of the Eligible Property is not practicable, the proceeds shall be paid to Beneficiary to the extent of those monies due and owing from Trustor to Beneficiary under any of the Secured Agreements, and Beneficiary is hereby authorized to receive such monies. Trustor agrees to execute such further assignments of any such award, judgment or settlement which may be received by Trustor. Beneficiary may apply any and all such sums to the obligations secured hereby in such manner as it elects or, at its option, the entire amount so received by it or any part thereof may be released. Neither the application nor the release of any such sums shall cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
7. Permitted Acts of Beneficiary. Without affecting the liability of any person, including Trustor (other than any person released pursuant hereto), for the payment of any indebtedness secured hereby, Beneficiary is authorized and empowered as follows: Beneficiary may at any time, and from time to time, either before or after the maturity of the obligations secured hereby, and without notice (a) release any person liable for the payment of any of the indebtedness, (b) make any agreement extending the time or otherwise altering the terms of payment of any of the indebtedness, (c) accept additional security therefor of any kind, or (d) release any property, real or personal, securing the indebtedness.
8. Reconveyance of Eligible Property. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been performed, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Eligible Property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof.
The grantee in such reconveyance may be described as “the person or persons legally entitled thereto.”
9. Default and Trustee’s Sale. Upon the occurrence of an “Event of Default” under this Deed of Trust (as defined in Section 17 below) Beneficiary may declare all principal remaining unpaid, all interest then earned and remaining unpaid, and all sums other than principal or interest secured hereby, immediately due and payable, may require immediate performance of all other obligations secured hereby, and may proceed to exercise the power of sale granted by this Deed of Trust by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said Eligible Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by ·law following the recordation of said notice of default, Trustee shall cause a notice of sale to be published, posted, mailed, and recorded as required by statute. Said notice of sale shall contain the notice: ‘‘NOTICE: THIS Packet Pg. 728
PROPERTY IS ENCUMBERED BY AFFORDABILITY COVENANTS”; however, failure to include said notice shall not affect the validity of any publication, posting, or mailing of said notice of sale or the validity of any sale based thereon. Thereafter, within the time and in the manner required by statute Trustee, without demand on Trustor, shall sell the Eligible Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Eligible Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Eligible Property so sold, but without any covenant or warranty, express or implied. Said deed shall contain the notice: ‘‘NOTICE: THIS PROPERTY IS ENCUMBERED BY AFFORDABILITY COVENANTS”; however, failure to include said notice shall not affect the validity of any sale. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: first, all sums expended by Beneficiary under the terms hereof or under any of the Secured Agreements and not then repaid, with accrued interest as specified in said agreements; second, all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
10. Substitute Trustees. Beneficiary, or any successor in ownership of any obligation secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by Beneficiary and duly acknowledged and recorded in the Office of the Recorder of the County of San Bernardino, and otherwise complying with the provisions of California Civil Code Section 2934a, or any successor section, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance :from the Trustee predecessor, succeed to all its title, estate, right, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded, and the name and address of the new Trustee.
11. Successors Bound. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, assigns, trustees and receivers. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
12. Evidence of Title. If, because of any default hereunder, or because of the filing or contemplated filing of any legal proceedings affecting the Eligible Property, Beneficiary deems it necessary to obtain an additional evidence of title or to cure any defect in title, Beneficiary may procure such evidence or cure such defect, pay the cost thereof, and shall have an immediate claim against Trustor therefor, together with a lien upon the Eligible Property for the amount so paid, with interest as permitted by law. Beneficiary is further authorized to require an appraisal of the Eligible Property at any time that Beneficiary may reasonably request.
13. Statute of Limitations. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived by Trustor, to the full extent permissible by law.
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14. Severability. The invalidity of any one or more covenants, phrases, clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining portions of this Deed of Trust or any part hereof and this Deed of Trust shall be construed as if such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted herein.
15. Order of Application. If any obligation secured hereby is now or hereafter becomes further secured by a security agreement, deed of trust, pledge, contract of guaranty or other securities in addition to the security provided to Beneficiary by this Deed of Trust, Beneficiary may to the full extent allowed by law, at its option, exhaust any one or more of said securities as well as the security hereunder, either concurrently or independently and in such order as it may determine, and may apply the proceeds received upon the obligations secured hereby without affecting the status of, or waiving any right to exhaust, all or any other security including the security thereunder, and without waiving any breach or default in any right or power, whether exercised hereunder or contained herein, or in any such other security.
Covenants of Trustor.
a. Audit by State and/or Federal Agencies. In the event this Deed of Trust or any agreement executed in connection herewith is subjected to audit, monitoring or other inspections by any appropriate state and/or federal agency, Trustor shall comply with such investigations and pay, on behalf of itself and Beneficiary, any amount of the cost to the investigating agency of such investigations as may be required by law (unless such investigation and any resulting liability arise solely from the gross negligence or willful misconduct of Beneficiary).
b. Program Evaluation and Review. Trustor shall allow Beneficiary’s authorized personnel to inspect and monitor its facilities and program operations as they relate to the Eligible Property, including the interviewing of Trustor’s staff and other program participants, as reasonably required by Beneficiary during the term of the Affordable Housing Covenant or any agreement executed in connection therewith.
16. Default. Trustor shall be in default under this Deed of Trust upon any of the following events which, if not cured within the applicable cure period provided, if any, shall constitute an event of default hereunder (“Event of Default”):
a. The failure of Trustor to pay or perform any monetary covenant or obligation hereunder or under the terms of any of the Secured Agreements or any document executed in connection therewith, without curing such failure within ten (10) calendar days the date such payment is due.
b. The failure of Trustor to perform any nonmonetary covenant or obligation hereunder or under the terms of any of the Secured Agreements or any document executed in connection therewith, without curing such failure within thirty (30) calendar days after receipt of written notice of such default from Beneficiary (or from any party authorized by Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency; provided, however, that if any default with respect to a nonmonetary obligation is such that it cannot be cured within a 30- day period, it shall be deemed cured if Trustor commences the cure within said 30-day period and Packet Pg. 730
diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Section 17(c) through 17(g) below; c. The material falsity of any representation, or the breach of any warranty or covenant, made by Trustor under the terms of this Deed of Trust, the Secured Agreements, or any other document executed in connection therewith;
d. Trustor, or any constituent member or partner or majority shareholder of Trustor, shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition that is not withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding;
e. If without the application, approval or consent of Trustor, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Trustor or any constituent member or partner or majority shareholder of Trustor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Trustor or of all or any substantial part of Trustor’s assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Trustor, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, pending, and unstayed, for any period of ninety (90) consecutive days; f. Trustor shall suffer or attempt to effect a “Transfer” (as defined in Section 30 below) other than in full compliance with the terms of this Deed of Trust; or g. Trustor shall be in default under the Affordable Housing Covenant, unless the default is cured or waived within the cure period, if any, applicable thereto under the terms of the obligation which is in default.
18. Breach by Trustor, Cure by Beneficiary or Trustee. In the event of Trustor’s failure to comply with any or all of the promises and agreements set forth in this Deed of Trust and the Secured Agreements or to make any payment or to do any act as provided in this Deed of Trust or the Secured Agreements, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any such obligation, may make or do the same in such manner and to such extent as either in its sole judgment may deem necessary to protect the security hereof (including, without limitation, to procure insurance and pay the premiums therefor; to pay unpaid water rents, sewer service charges, and other governmental or municipal charges and rates, and all or any part of the unpaid taxes, assessments, and reassessments, if in its judgment the same are just and valid; to pay the cost of appraisals, reappraisals, and extensions of title; to enter or have its agents enter upon the Eligible Property whenever reasonably necessary for the purpose of inspecting the Eligible Property or making repairs or installations as it deems necessary to preserve the Eligible Property or to protect the same from vandalism, without thereby becoming liable as a trespasser or mortgagee or beneficiary in possession, and to pay for such repairs and installations). Beneficiary and Trustee are hereby authorized to enter upon the Eligible Property Packet Pg. 731
for such purposes; to appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, to pay necessary expenses, employ counsel of choice, and pay the reasonable fees of such counsel. Trustor agrees to pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and agrees that Beneficiary or Trustee, as the case may be, shall have a lien upon the Eligible Property for the sums so expended and such interest thereon.
19. Personal Pro pert y Security Agreement. All property covered by this Deed of Trust shall be deemed to constitute real property or interests in real property to the maximum extent permitted under applicable law. To the extent that any tangible property, equipment or other property covered by this Deed of Trust constitutes personal property, such personal property shall constitute additional security. This Deed of Trust shall create in Beneficiary a security interest in such personal property and shall in respect thereof constitute a security agreement (the “Personal Property Security Agreement”). Beneficiary shall be entitled to all of the rights and remedies in respect of any personal property included in the Eligible Property covered by this Deed of Trust that are afforded a secured party under the Uniform Commercial Code and other applicable law. At Beneficiary’s request, Trustor will at any time and from time to time furnish Beneficiary for filing financing statements signed by Trustor in form satisfactory to Beneficiary. Trustor acknowledges and agrees that thirty (30) days’ notice as to the time, place and date of any proposed sale of any personal property shall be deemed reasonable for all purposes. Trustor agrees that the Security Agreement created hereby shall survive the termination or reconveyance of this Deed of Trust unless Beneficiary executes documentation expressly terminating the Personal Property Security Agreement.
20. Assumption of Liability. Except as provided in Section 30, the assumption of liability for the performance of the obligations hereby secured, by any successor in interest to Trustor in the Eligible Property shall not release Trustor from any liability Trustor has hereunder or under the other Secured Agreements for the performance of such obligations or the repayment of any sums advanced under and secured by this Deed of Trust. Any forbearance or indulgence of Beneficiary, or extensions of time for the performance of all or any part of the obligations secured hereby, or the release of a part of the Eligible Property from the lien of this Deed of Trust, for or without consideration, shall not in any manner diminish or reduce the liability of Trustor (subject to the nonrecourse provisions of Section 25) for the performance of the obligations now or hereafter secured hereby. Any payment made in satisfaction of any such obligation shall be deemed to have been made on behalf and for the benefit of all parties obligated to pay the same.
21. Future Advances. Upon the request of Trustor or its successor in ownership of the Eligible Property, Beneficiary may, at its option, advance funds to Trustor or its successors in ownership, and the sums advanced, with interest as permitted by law, shall be secured by this Deed of Trust. If Beneficiary, at its option, shall make an advance as aforesaid, Trustor or its successors in ownership agree to execute and deliver to Beneficiary a note to evidence the same, payable on such terms as Beneficiary shall require.
Trustor further acknowledges and agrees that to secure the payment of any such future advances Beneficiary shall also have a lien upon all other personal property and securities now or hereafter in its possession belonging to Trustor; that all rights, powers and remedies conPacket Pg. 732 ferred upon Beneficiary herein are in addition to each and every other right which Beneficiary has hereunder; that all rights, powers and remedies conferred upon Beneficiary in equity or by law may be enforced concurrently therewith; that Beneficiary shall be subrogated to the rights and seniority of any prior lien paid or released by reason of any such future advances; and that each and all of the covenants, agreements, and provisions hereof shall bind and inure to the benefit of the respective heirs, executors, administrators, successors, and assigns of Trustor and Beneficiary herein, and all others who subsequently acquire any right, title, or interest in the Eligible Property, or to this Deed of Trust and the indebtedness secured hereby.
22. Captions. The captions of the sections of this Deed of Trust are for convenience only and shall not be considered in resolving questions of interpretation or construction.
23. Estoppel Certificates. _Trustor shall from time to time at Beneficiary’s request furnish Beneficiary or any person designated by Beneficiary a certified statement in form reasonably satisfactory to Beneficiary confirming as of the date of the certificate Trustor is not in default hereunder (or describing any default), and stating that Trustor has no defense, right of setoff or counterclaim in the payment of any indebtedness, or any part thereof, or the observance or performance of any obligation (or describing any such defense, set off or counterclaim). Any purchaser or assignee of any of the Secured Agreements or this Deed of Trust or any interest therein may rely on such certificate.
24. Obligation Nonrecourse. Except to the extent any Event of Default hereunder results directly or indirectly from any fraud or intentional and material misrepresentation by Trustor in connection with the Secured Agreements, the Secured Agreements are nonrecourse obligations of Trustor and in the event of the occurrence of an Event of Default, Beneficiary’s only recourse under this Deed of Trust shall be against the Eligible Property, the proceeds thereof, the rents and other income arising from its use and occupancy as provided in this Deed of Trust, and any other collateral given to Beneficiary as security for performance of the Secured Agreements.
25. Fixture Filing. This Deed of Trust is also a fixture filing with respect to the personal property which is or is to become fixtures on the Eligible Property, and is to be recorded in the real property records of San Bernardino County, California.
26. Assignment of Rents. All of the existing and future rents, royalties, income, and profits of the Eligible Property that arise from its use or occupancy are hereby absolutely and presently assigned to Beneficiary. However, until Trustor is in default under this Deed of Trust, Trustor will have a license to collect and receive those rents, royalties, income and profits. Upon any Event of Default by Trustor, Beneficiary may terminate Trustor’s license in its discretion, at any time, without notice to Trustor, and may thereafter collect the rents, royalties, income and profits itself or by an agent or receiver. No action taken by Beneficiary to collect any rents, royalties, income or profits will make Beneficiary a “mortgagee-in-possession” of the Eligible Property, unless Beneficiary personally or by agent enters into actual possession of the Eligible Property. Possession by a court-appointed receiver will not be considered possession by Beneficiary. All rents, royalties, income and profits collected by Beneficiary or a receiver will be applied first to pay all expenses of collection, and then to the payment of all costs of operation and management of the Eligible Property, and then to the satisfaction of the debts and obligations secured by the Deed of Trust in whatever order Beneficiary directs in its absolute discretion and without regard to the adequacy of its security. If required by Beneficiary, each lease or occupancy agreement affecting any of the Eligible Property must provide, in a manner approved by Packet Pg. 733
Beneficiary, that the tenant will recognize as its lessor any person succeeding to the interest of Trustor upon any foreclosure of this Deed of Trust. The expenses (including any receivers’ fees, costs of and compensation to any agent appointed by Beneficiary, counsel fees, and disbursements) incurred in taking possession and making such collection, shall be deemed a portion of the obligations secured by this Deed of Trust. The entering upon and taking possession of the Eligible Property, and/or the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Beneficiary may exercise any one or more of the remedies in this section without waiving its right to exercise any such remedies again or for the first time in the future.
The foregoing shall be subject to the provisions of applicable law.
27. Applicable Law. This Deed of Trust shall be governed by, and construed in accordance with, the laws of the State of California.
28. Approvals. Except with respect to those matters set forth hereinabove providing for Beneficiary’s approval, consent or determination to be at Beneficiary’s “sole discretion” or “sole and absolute discretion,” Beneficiary hereby agrees to act reasonably with regard to any approval, consent, or other determination given by Beneficiary hereunder. Beneficiary agrees to give Trustor written notice of its approval or disapproval following submission of items to Beneficiary for approval, including, in the case of any disapproved item, the reasons for such disapproval. Any consent to a transfer under Section 30 of this Deed of Trust, and any other consent or approval by Beneficiary under this Deed of Trust or any of the Secured Agreements may be given by Beneficiary’s City Manager or his or her designee without action of Beneficiary’s governing board unless the City Manager or his or her designee in his or her sole discretion elects to refer the matter to the board.
29. Good Faith and Fair Dealing. Beneficiary and Trustor agree to perform all of their obligations and the actions required of each hereunder in good faith and in accordance with fair dealing.
30. Assignment of Interest.
a. Without the prior written approval of Beneficiary, which approval Beneficiary may grant or withhold in its sole and absolute discretion, Trustor shall not (i) sell, encumber, assign or otherwise transfer (collectively, “Transfer”) all or any portion of its interest in the eligible Property; (ii) permit the Transfer of any portion of its ownership and/or control; or Transfer any of its rights or obligations under the Secured Agreements. Trustor hereby agrees that any purported Transfer not approved the Beneficiary as required herein shall be ab initio null and void, and no voluntary or involuntary successor to any interest of Trustor under such a proscribed Transfer shall acquire any rights pursuant to the Secured Agreements or this Deed of Trust. b. At any time Trustor desires to effect a Transfer hereunder, Trustor shall notify Beneficiary in writing (the “Transfer Notice”) and shall submit to Beneficiary for its prior written approval (i) all proposed agreements and documents (collectively, the “Transfer Documents”) memorializing, facilitating, evidencing and/or relating to the circumstances sur- rounding such proposed Transfer, and (ii) a certificate setting forth representations and warranties by Trustor and the proposed transferee to Beneficiary sufficient to establish and ensure that all requirements of this Section 30 have been and will be met. No Transfer Documents shall be approved by Beneficiary unless they expressly provide for the assumption by the proposed transferee of all of Trustor’s obligations under the Secured Agreements and this Deed of Trust. The Transfer Notice shall include a request that Beneficiary consent Packet Pg. 734
to the proposed Transfer and shall also include a request that Trustor be released from further obligations under the Secured Agreements and this Deed of Trust. Beneficiary agrees to make its decision on Trustor’s request for consent to such Transfer as promptly as possible, and in any event not later than thirty (30) calendar days after Beneficiary receives the last of the items required by this Section 30. In the event Beneficiary consents to a proposed Transfer, then such Transfer shall not be effective unless and until Beneficiary receives copies of all executed and binding Transfer Documents, which Transfer Documents shall conform to the proposed Transfer Documents originally submitted by Trustor to Beneficiary. From and after the effective date of any such Transfer, Trustor shall be released from its obligations under this Deed of Trust and the Secured Agreements accruing subsequent to such effective date.
c. Notwithstanding anything in this Deed of Trust to the contrary, Trustor agrees that it shall not be permitted to make any Transfer, whether or not Beneficiary’s consent is required therefor and even if Beneficiary has consented thereto, if there exists an Event of Default under this Deed of Trust at the time the Transfer Notice is tendered to Beneficiary or at any time thereafter until such Transfer is to be effective.
d. The provisions of this Section 30 shall apply to each successive Transfer and proposed transferee in the same manner as initially applicable to Trustor under the terms set forth herein.
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IN WITNESS WHEREOF, Trustor and Beneficiary have each executed this Deed of Trust, to be effective as of the date first written above.
TRUSTOR
Date:________________________ By:_________________________________________ [Name, Title]
BENEFICIARY
CITY OF SAN BERNARDINO
Date:________________________ By:_________________________________________ Robert D. Field, City Manager
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ATTACHMENT 1 TO DEED OF TRUST
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows:
APN:
Address: , San Bernardino, CA
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Attachment H to Master Agreement Developer
Housing Affordability Covenant form
Packet Pg. 738
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Bernardino
290 North “D” Street, Third Floor
San Bernardino, CA 92401-1734
Attn: Housing Division
(Space Above Line Reserved For Use By Recorder)
No fee shall not be imposed on any real estate
instrument, paper, or notice executed or
recorded by the state or any county,
municipality, or other political subdivision of
the state - GC 27388.1 (a)2(D)
HOME PROGRAM HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS City of San Bernardino Infill Housing Development Program – Home Funds These HOME Program Housing Affordability Covenants and Restrictions (collectively referred to herein as this “Affordable Housing Covenant”) are made and entered into as of by and between the City of San Bernardino, a municipal corporation (“City”), and a (“Developer”). This Affordable Housing Covenant relates to the following facts:
--- R E C I T A L S ---
A. City and Developer are parties to that certain HOME Investment Partnerships Program (HOME) Infill Housing Development Master Agreement (“Master Agreement”) dated , and that certain Site Agreement (“Site Agreement”) dated .
B. Under the terms and conditions of the Master Agreement and the Site Agreement, Developer shall acquire from City, or acquire with funds provided by City pursuant to the HOME Investment Partnerships Program, 24 C.F.R. Part 92 (“HOME”), an amount not to exceed ($ ) for the purpose of providing financing for the housing development described in the Site Agreement (the “Project”). The Project will be developed on a site legally described on Exhibit “A” to this Affordable Housing Covenant (the “Eligible Property”).
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Developer do hereby covenant and agree for themselves, their successors and assigns, as follows:
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Section 1. Definitions of Certain Terms. As used in this Affordable Housing Covenant, the following words and terms shall have the meaning as provided in this Section 1 unless the specific context of usage of a particular word or term may otherwise require:
Adjusted Family Income. The words “Adjusted Family Income” mean and refer to the total “annual income,” as this term is defined in HOME Final Rule, 24 C.F.R. Part 92.203, for each individual or household residing or treated as residing in an Eligible Property.
Affordable Housing Cost. The words “Affordable Housing Cost” mean and refer to a purchase price determined using the criteria set forth in 24 C.F.R. Part 92.254(a)(2), i.e., not exceeding 95 percent of the median purchase price for the area.
Code. The word “Code” means the Internal Revenue Code of 1986, as amended, and any regulation, rulings or procedures with respect thereto.
Delivery Date. The words “Delivery Date” mean and refer to the date of delivery of title and possession of the Eligible Property to the Qualified Homebuyer at the close of the Sale Escrow.
Eligible Property. The words “Eligible Property” mean and refer to an infill housing property constructed or reconstructed by Developer, including the blighted or underutilized site acquired and the single family dwelling constructed or reconstructed on the site, as described in the Master Agreement, and which conforms to all of the other requirements set forth in the Master Agreement.
HOME Funds. The words “HOME Funds” mean and refer to funds received by City from the United States Department of Housing and Urban Development (“HUD”) under the HOME program and provided by City to Developer for the purpose of acquiring, constructing and selling Eligible Properties to Qualified Homebuyers.
Laws. The word “Laws” means and refers to all federal, state, municipal, local and governmental authority laws, statutes, codes, ordinances, rules, regulations, and orders, now or hereafter in effect, and as may be amended, replaced or substituted from time to time.
Low-Income Household. The words “Low-Income Household” mean and refer to persons and households whose income does not exceed 80% percent of area median income (“AMI”), adjusted for household size, as set forth in HOME Final Rule 24 C.F.R. Part 92.2.
Notice of Affordability Restrictions. The words “Notice of Affordability Restrictions” mean and refer to the Notice of Affordability Restrictions on sale, conveyance, transfer or assignment of an Eligible Property executed by the Qualified Homebuyer and City in connection with the Sale Agreement. The Notice of Affordability Restrictions shall be duly notarized and recorded in the Official Records of the County Recorder’s Office for the County of San Bernardino, State of California.
Notice of Concurrence. The words “Notice of Concurrence” mean and refer to the acknowledgment in recordable form in which the City confirms that the proposed Qualified Successor-In-Interest of the Qualified Homebuyer satisfies all of the Adjusted Family Income and other requirements of this Affordable Housing Covenant for ownership and occupancy of the Eligible Property by the Qualified Successor-In-Interest at any time during the Qualified Residence Period.
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Project CC&Rs. The words “Project CC&Rs” mean and refer to all covenants, conditions and restrictions, if any, affecting and applicable to and relating to the Eligible Property, as amended from time to time.
Qualified Homebuyer. The words “Qualified Homebuyer” mean the purchaser of the Eligible Property, i.e., all persons identified as having a property ownership interest vested in the Eligible Property at the close of the Sale Escrow. At the close of the Sale Escrow, the Qualified Homebuyer shall: (i) have an annual Adjusted Family Income which does not exceed the household income qualification limits of a Low-Income Household under HOME Final Rule 24 C.F.R. Part 92.2; and (ii) pay no more than an Affordable Housing Cost for the Eligible Property pursuant to the terms of the purchase transaction for the Eligible Property, including all sums payable by the Qualified Homebuyer for its purchase money mortgage financing, insurance, escrow and other fees and costs..
Qualified Residence Period. The words “Qualified Residence Period” mean and refer to the period of time beginning on the Delivery Date and ending on the date which is fifteen (15) years after the Delivery Date.
Qualified Successor-In-Interest. The words “Qualified Successor-In-Interest” mean and refer to the person or household which may acquire the Eligible Property from the Qualified Homebuyer at any time during the Qualified Residence Period by purchase, assignment, transfer or otherwise.
The Qualified Successor-In-Interest shall have an income level which does not exceed the maximum income level for a Low-Income Household as applicable to the Qualified Homebuyer under the Sale Agreement, and the Qualified Successor-In-Interest shall agree to own and occupy the Eligible Property as its principal residence. Upon acquisition of the Eligible Property, the Qualified Successor-In-Interest shall be bound by each of the covenants, conditions and restrictions of this Affordable Housing Covenant.
Sale Agreement. The words “Sale Agreement” mean and refer to a standard California Association of Realtors California Residential Purchase Agreement and Joint Escrow Instructions, as modified by any addenda required by City, or a substantially equivalent purchase and sale agreement, by and between Developer as seller and the Qualified Homebuyer as purchaser of the Eligible Property, as amended from time to time. City shall be a third-party beneficiary of such Sale Agreement.
Sale Escrow. The words “Sale Escrow” mean and refer to a real estate conveyance transaction or escrow by and between Developer as seller and the Qualified Homebuyer as purchaser of the Eligible Property. The transfer of the Eligible Property to the Qualified Homebuyer shall be accomplished upon the close of the Sale Escrow.
The titles and headings of the sections of this Affordable Housing Covenant have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the meaning of any of the terms or provisions hereof.
Section 2. Use of the Eligible Property
Developer shall construct or reconstruct on the Eligible Property a single-family detached home, to be occupied and owned by persons or households whose income is equal to or below 80% of AMI and that meet all of the other requirements to be a Qualified Homebuyer or a Qualified Successor-in-Interest as those terms are defined in Section 1.
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Section 3. Covenants of Developer.
(a) Upon completion of the construction or reconstruction of the Eligible Property, Developer shall sell the Eligible Property to a Qualified Homebuyer at an Affordable Housing Cost for use and occupancy as the Qualified Homebuyer’s principal residence during the Qualified Residence Period, to which use and occupancy the Qualified Homebuyer must agree as a condition of the sale. As a condition of the sale, Developer shall require that that Qualified Homebuyer agree that it shall not sell the Eligible Property during the Qualified Residence Period except to a Qualified Successor-In-Interest at an Affordable Housing Cost. Developer shall confirm to City, and shall permit City to verify, that the proposed Qualified Homebuyer satisfies the income requirements for a Low-Income Household based on Adjusted Family Income, that the proposed sale price satisfies the Affordable Housing Cost limitations, and that the Qualified Homebuyer has agreed to the sale conditions set forth in this Section 3. (b) Developer agrees to provide City with the following items of information for inspection by City or its contracted designee prior to any sale by Developer of the Eligible Property, promptly upon written request of City:
(i) State and federal income tax returns for the calendar year preceding the close of the Sale Escrow, filed by all persons who will reside in the Eligible Property; (ii) Current wage, income and salary statements for all persons who will reside in the Eligible Property at the close of the Sale Escrow.
(c) While it owns the Eligible Property, Developer shall abide by and comply with all applicable Project CC&Rs, and, at the request of City, shall assign to City the right to enforce the Project CC&Rs on behalf of Developer.
(d) Also while it owns the Eligible Property, Developer shall enforce all applicable Project CC&Rs against all individuals and entities, including, without limitation, against all non-complying members of a homeowner’s association, who are subject to, bound by and obligated to perform and comply with the Project CC&Rs, at Developer’s sole cost and expense. (e) Developer shall not sell the Eligible Property without first giving written notice to City and obtaining City’s written concurrence as provided in Section 3(g). At least sixty (60) calendar days prior to the date on which Developer proposes to transfer title to the Eligible Property to a Qualified Homebuyer, Developer shall send a written notice to City, as provided in Section 14, of Developer’s intention to sell the Eligible Property which includes the following true and correct information:
(i) Name of the proposed Qualified Homebuyer, including the identity of all persons in the household of the Qualified Homebuyer who propose to reside in the Eligible Property, together with a completed Qualified Homebuyer Application Affidavit, as applicable, executed by the proposed Qualified Homebuyer;
(ii) Sale price of the Eligible Property payable by the Qualified Homebuyer, including the terms of all purchase money mortgage financing to be assumed, provided or obtained by the Qualified Homebuyer, escrow costs and charges, realtor/broker fees, and all other sale costs or charges payable by the Qualified Homebuyer;
(iii) Name, address, and telephone number of the escrow company which shall coordinate the transfer of the Eligible Property from Developer to the Qualified Homebuyer; Packet Pg. 742
(iv) Appropriate mortgage credit reference for the Qualified Homebuyer with a written authorization signed by the Qualified Homebuyer authorizing City to contact each such reference; and
(v) such other relevant information as City may reasonably request. (f) Within thirty (30) calendar days following receipt of notice of Developer’s intention to sell the Eligible Property as described in Section 3(e), City shall provide Developer with either a preliminary confirmation of approval or a preliminary rejection in writing of the income and household occupancy qualifications of the Qualified Homebuyer. City shall not unreasonably withhold approval of any proposed sale of the Eligible Property to a Qualified Homebuyer who satisfies the Adjusted Family Income and Affordable Housing Cost requirements for occupancy of the Eligible Property and for whom the other information described in Sections 3(b) and 3(e) has been provided to City. In the event that City may request additional information relating to the confirmation of the matters described in Sections 3(b) and 3(e), Developer shall provide such information to City as promptly as feasible. (g) Upon its final confirmation of approval of the Adjusted Family Income and Affordable Housing Cost eligibility of the Qualified Homebuyer to acquire the Eligible Property, City shall deliver a written Notice of Concurrence in the sale of the Eligible Property, in recordable form, to the escrow holder referenced in Section 3(e)(iii) above. Thereafter, the Qualified Homebuyer may acquire the Eligible Property subject to the satisfaction of the following conditions:
(i) The recordation of the Notice of Concurrence executed by City, verifying that Developer and the Qualified Homebuyer in making the sale and purchase have complied with the requirements of this Affordable Housing Covenant as of the close of the Sale Escrow; and (ii) The escrow holder shall have provided City with a copy of the customary form of final escrow closing statements for Developer and the Qualified Homebuyer; and (iii) The other conditions of the Sale Escrow as established by Developer and the Qualified Homebuyer shall have been satisfied.
(h) Developer shall require in connection with the sale of the Eligible Property to the Qualified Homebuyer that the Qualified Homebuyer agree that it and all of its heirs, successors and/or assigns shall abide by and comply with all applicable Project CC&Rs and, at the request of City, shall assign to City on behalf of the Qualified Homebuyer the right to enforce the Project CC&Rs on behalf of the Qualified Homebuyer.
(i) Developer also shall require in connection with the sale of the Eligible Property to the Qualified Homebuyer that the Qualified Homebuyer agree that during the Qualified Residence Period, the Qualified Homebuyer and any heirs, successors and/or assigns shall not lease, sublease, or rent the Eligible Property to any third person, except for a temporary period (not to exceed 3 months) in the event of an emergency or other unforeseen circumstance as may be expressly approved in writing by City subject to compliance during the temporary rental period with reasonable temporary rental occupancy conditions required by City. The Qualified Homebuyer shall submit a written request to City at least ten (10) calendar days prior to the commencement of the temporary occupancy of the Eligible Property by a third party, which notice shall set forth the grounds on which the Qualified Homebuyer believes an emergency or other unforeseen circumstance has occurred and that a temporary rental occupancy is necessary.
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Section 4. Acknowledgment of First Mortgage Lender Financing.
It is expected and acknowledged by City that concurrently with the Delivery Date, the Qualified Homebuyer shall obtain purchase money mortgage financing for the acquisition of the Eligible Property from a qualified financial institution (“First Mortgage Lender”). Developer shall require in connection with the sale of the Eligible Property to the Qualified Homebuyer that the Qualified Homebuyer agree to provide City with a true and correct copy of the loan agreement by and between the First Mortgage Lender and the Qualified Homebuyer, prior to the Delivery Date.
Section 5. Maintenance Condition of the Eligible Property. While it owns the Eligible Property, Developer shall:
(a) Maintain the exterior areas of the Eligible Property which are subject to public view (e.g.:
all improvements, paving, walkways, landscaping, and ornamentation) in good repair and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during Developer’s ownership of the Eligible Property there is an occurrence of an adverse condition on any area of the Eligible Property which is subject to public view in contravention of the general maintenance standard described above (a “Maintenance Deficiency”), City shall notify Developer in writing of the Maintenance Deficiency and give Developer thirty (30) calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. The words “Maintenance Deficiency” include without limitation the following inadequate or non-confirming property maintenance conditions and/or breaches of single family dwelling residential property use restrictions:
(i) failure to properly maintain the windows, structural elements, and painted exterior surface areas of the dwelling unit in a clean and presentable manner; (ii) failure to keep the front and side yard areas of the property free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the property; (iii) failure to regularly mow lawn areas or permit grasses planted in lawn areas to exceed nine inches (9”) in height, or failure to otherwise maintain the landscaping in a reasonable condition free of weeds and debris;
(iv) parking of any commercial motor vehicle in excess of 7,000 pounds gross weight anywhere on the property except construction vehicles being use in construction or reconstruction on the Eligible Property, or the parking of motor vehicles, boats, camper shells, trailers, recreational vehicles and the like in any side yard or on any other parts of the property which are not covered by a paved and impermeable surface; (v) the use of the garage area of the dwelling unit for purposes other than the parking of motor vehicles and the storage of construction equipment.
In the event Developer fails to cure or commence to cure the Maintenance Deficiency within the time allowed, City may thereafter conduct a public hearing following transmittal of written notice thereof to Developer ten (10) calendar days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether Developer has failed to comply with the provisions of this Section 5(a). If, upon the conclusion of a public hearing, City makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, thereafter City shall have the right to enter the Eligible Property (exterior areas only) and Packet Pg. 744
perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity City may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by City for the abatement of a Maintenance Deficiency as authorized by this Section 5(a) shall become a lien on the Eligible Property. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the City to the Qualified Homebuyer, City shall have the right to enforce the lien in the manner as provided in Section 5(c).
(b) Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the Eligible Property shall be removed by Developer from any exterior surface of a structure or improvement on the Eligible Property by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied or by removal with solvents, detergents or water as appropriate. In the event that graffiti is placed on the Eligible Property (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours following the time of its application, then in such event and without notice to Developer, City shall have the right to enter the Eligible Property and remove the graffiti.
Notwithstanding any provision of Section 5(a) to the contrary, any sum expended by City for the removal of graffiti from the Eligible Property as authorized by this Section 5(b) shall become a lien on the Eligible Property. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by City to developer, City shall have the right to enforce its lien in the manner as provided in Section 5(c).
(c) The parties hereto further mutually understand and agree that the rights conferred upon City under this Section 5 expressly include the power to establish and enforce a lien or other encumbrance against the Eligible Property in the manner provided under Civil Code Sections 2924, 2924b and 2924c in the amount reasonably necessary to restore the Eligible Property to the maintenance standard required under Section 5(a) or Section 5(b), including, without limitation, attorneys’ fees, court costs and costs of City associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of City in connection with such action. In any legal proceeding for enforcing such a lien against the Eligible Property, the prevailing party shall be entitled to recover its attorneys’ fees, court costs and other costs of suit. The provisions of this Section 5 shall be a covenant running with the land for the period of Developer’s ownership of the Eligible Property and shall be enforceable by City in its discretion, cumulative with any other rights or powers granted to City under applicable law. Nothing in the foregoing provisions of this Section 5 shall be deemed to preclude Developer from making any alterations, additions, or other changes to any structure or improvement or landscaping on the Eligible Property, provided that such changes comply with the zoning and development regulations of City and other applicable law.
Section 6. Covenants to Run With the Land. The covenants, reservations and restrictions set forth herein are part of a plan for the promotion and preservation of affordable single family housing dwelling units within the territorial jurisdiction of City and each shall be deemed covenants running with the land and shall pass to and be binding upon the Eligible Property for the term provided in Section 8.
Developer shall require that the Qualified Homebuyer assume the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in this Affordable Housing Covenant. Each and every contract, deed or other instrument hereafter executed covering or conveying the Eligible Property or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument.
Section 7. Burden and Benefit. The burden of the covenants set forth herein touch and concern the land in that the Developer’s and the Qualified Homebuyer’s legal interests in the Eligible Property are affected by the affordable single family dwelling use and occupancy covenants hereunder. The benefit of Packet Pg. 745
such covenants touches and concerns the land by enhancing and increasing the enjoyment and use of the Eligible Property by the intended beneficiaries of such covenants, reservations and restrictions, by furthering the affordable single family housing development goals and objectives of City, and by making the Eligible Property available for acquisition and occupancy by the Qualified Homebuyer.
Section 8. Term.
(a) The provisions of this Affordable Housing Covenant shall apply to the Eligible Property for the period of Developer’s ownership of the Eligible Property, and thereafter for a term of fifteen (15) years after the Delivery Date.
(b) Any provision or section of this Affordable Housing Covenant may be terminated after the Delivery Date upon the written agreement of City and the Qualified Homebuyer, if there shall have been provided to City an opinion of legal counsel that such a termination, under terms and conditions approved by City in its reasonable discretion, will not adversely affect the affordable single family housing and development goals and obligations of the City.
Section 9. Breach and Default and Enforcement.
(a) Failure or delay by Developer to honor or perform any material term or provision of this Affordable Housing Covenant shall constitute a breach hereunder; provided, however, that if Developer commences to cure, correct or remedy the alleged breach within thirty (30) calendar days after the date of written notice specifying such breach and diligently completes such cure, correction or remedy, Developer shall not be deemed to be in default hereunder.
City shall give Developer written notice of breach specifying the alleged breach which if uncured by Developer within thirty (30) calendar days, shall be deemed to be an event of default. Delay in giving such notice shall not constitute a waiver of any breach or event of default nor shall it change the time of breach or event of default; provided, however, that City shall not exercise any remedy for an event of default hereunder without first delivering the written notice of breach as specified in this Section 9.
Except with respect to rights and remedies expressly declared to be exclusive in this Affordable Housing Covenant, the rights and remedies of City are cumulative with any other right or power of City or other applicable law, and the exercise of one or more of such rights or remedies shall not preclude the exercise by City at the same or different times, of any other right or remedy for the same breach or event of default.
If a breach by Developer remains uncured for more than thirty (30) calendar days following written notice, as provided above, an event of default shall be deemed to have occurred. In addition to the remedial provisions of Section 5 as related to a Maintenance Deficiency at the Eligible Property, upon the occurrence of any event of default City shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows:
(i) by mandamus or other suit, action or proceeding at law or in equity, to require Developer to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of City; or
(ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of Developer to City.
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(b) Except as set forth in the next sentence, no third party shall have any right or power to enforce any provision of this Affordable Housing Covenant on behalf of City or to compel City to enforce any provision of this Affordable Housing Covenant against Developer or the Eligible Property. City may assign the right and power to enforce the provision of this Affordable Housing Covenant against Developer or the Eligible Property as the successor administration agency of the HOME Investment Partnerships Program.
Section 10. Governing Law. This Affordable Housing Covenant shall be governed by the laws of the State of California.
Section 11. Amendment. This Affordable Housing Covenant may be amended only by a written instrument executed by Developer and City.
Section 12. Severability. If any provision of this Affordable Housing Covenant is declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect the remaining parts of this Affordable Housing Covenant which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable.
Section 13. Time is of the Essence. For each provision of this Affordable Housing Covenant which states a specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed to be of the essence.
Section 14. Notice. Any notice required to be given under this Affordable Housing Covenant shall be given by City, as applicable, by personal delivery or by First Class United States mail at the addresses specified below or at such other address as may be specified in writing by the parties hereto:
If to City: City of San Bernardino, Inc.
290 North “D” Street, Third Floor
San Bernardino, CA 92401-1734
Attn: Housing Division
If to Developer:
Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if personally delivered, when received by the authorized representative of City, as applicable.
Section 15. Entire Agreement. Except as to matters set forth in the other agreements to which reference is made herein, this Affordable Housing Covenant is the parties’ entire agreement with respect to the matters set forth herein and supersedes all prior negotiations and oral or written agreements or expressions of the parties with respect thereto.
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IN WITNESS WHEREOF, City has caused this Affordable Housing Covenant to be signed, acknowledged and attested on its behalf by duly authorized representatives in counterpart original copies which shall upon execution by all of the parties be deemed to be one original document.
City of San Bernardino
Date: By:
Robert D. Field, City Manager
.
Date:
-------
By: _
Developer, Executive Director
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EXHIBIT “A”
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows:
APN:
Address: San Bernardino, CA
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Attachment I to Master Agreement
Qualified Homebuyer Housing Affordability Covenant
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Bernardino
290 North “D” Street, Third Floor
San Bernardino, CA 92401
Attn: Housing Division
(Space Above Line Reserved For Use By Recorder)
No fee shall not be imposed on any real estate
instrument, paper, or notice executed or
recorded by the state or any county,
municipality, or other political subdivision of
the state - GC 27388.1 (a)2(D)
HOME PROGRAM HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS City of San Bernardino Infill Housing Development Program – Home Funds These HOME Program Housing Affordability Covenants and Restrictions (collectively referred to herein as this “Affordable Housing Covenant”) are made and entered into as of by and between the City of San Bernardino, a municipal corporation (“City”), and (“Buyer”). This Affordable Housing Covenant relates to the following facts:
--- R E C I T A L S ---
A. City and Neighborhood Partnership Housing Services, Inc., a California 501(c)(3) public benefit corporation (“Developer”) are parties to that certain HOME Investment Partnerships Program (HOME) Infill Housing Development Master Agreement (“Master Agreement”) dated .
B. Under the terms and conditions of the Master Agreement Developer acquired from City, or acquired with funds provided by City pursuant to the HOME Investment Partnerships Program, 24 C.F.R.
Part 92 (“HOME”), property on which Developer constructed or reconstructed a detached single-family dwelling. Said property and dwelling are referred to herein as the “Eligible Property.” The Eligible Property is legally described in Exhibit “A” to this Affordable Housing Covenant.
C. Buyer wishes to purchase the Eligible Property from Developer. Under that certain document entitled HOME Program Housing Affordability Covenants and Restrictions between City and Developer and dated , Buyer must obtain the concurrence of City in the sale of the Eligible Property from Developer to Buyer in order to purchase the Eligible Property.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby Packet Pg. 751
acknowledged, City and Buyer do hereby covenant and agree for themselves, their successors and assigns, as follows:
Section 1. Definitions of Certain Terms. As used in this Affordable Housing Covenant, the following words and terms shall have the meaning as provided in this Section 1 unless the specific context of usage of a particular word or term may otherwise require:
Affordable Housing Cost. The words “Affordable Housing Cost” mean and refer to a purchase price determined using the criteria set forth in 24 C.F.R. Part 92.254(a)(2), or as published annually by HUD in the HOME Homeownership Value Limits, i.e., not exceeding 95 percent of the median purchase price for the type of single family home for the area.
Annual Income. The words “Annual Income” mean and refer to the total “annual income,” as this term is defined in 24 C.F.R. § 5.609, for each individual or household residing or treated as residing in an Eligible Property.
Buyer. The word “Buyer” means the purchaser or purchasers of the Eligible Property and includes all persons identified as having a property ownership interest vested in the Eligible Property at the close of the Sale Escrow. At the close of the Sale Escrow, Buyer shall: (i) have an Annual Income which does not exceed the household income qualification limits of a Low-Income Household under HOME Final Rule 24 C.F.R. Part 92.2; and (ii) pay no more than an Affordable Housing Cost for the Eligible Property pursuant to the terms of the purchase transaction for the Eligible Property, including all sums payable by Buyer for purchase money mortgage financing, insurance, escrow, and other fees and costs.
Delivery Date. The words “Delivery Date” mean and refer to the date of delivery of title and possession of the Eligible Property to Buyer at the close of the Sale Escrow.
Eligible Property. The words “Eligible Property” mean and refer to an infill housing property constructed or reconstructed by Developer, including the blighted or underutilized site acquired and the single family dwelling constructed or reconstructed on the site, as described in the Master Agreement, and which conforms to all of the other requirements set forth in the Master Agreement.
HOME Funds. The words “HOME Funds” mean and refer to funds received by City from the United States Department of Housing and Urban Development (“HUD”) under the HOME program and provided by City to Developer for the purpose of acquiring, constructing and selling Eligible Properties to Qualified Homebuyers, as defined in the Master Agreement.
HOME Subsidy. The words “HOME Subsidy” mean and refer to the fair market value of the Eligible Property at the time it is sold to Buyer, minus the sales price paid by Buyer for the Eligible Property.
Laws. The word “Laws” means and refers to all federal, state, municipal, local and governmental authority laws, statutes, codes, ordinances, rules, regulations, and orders, now or hereafter in effect, and as may be amended, replaced or substituted from time to time.
Low-Income Household. The words “Low-Income Household” mean and refer to persons and households whose Annual Income does not exceed 80 percent of area median income (“AMI”), adjusted for household size, for the Riverside-San Bernardino-Ontario, California, metropolitan statistical area, as published by United States Department of Labor, Bureau of Labor Statistics.
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Notice of Affordability Restrictions. The words “Notice of Affordability Restrictions” mean and refer to the Notice of Affordability Restrictions on sale, conveyance, transfer or assignment of an Eligible Property to be executed by Buyer and City in connection with the Sale Agreement. The Notice of Affordability Restrictions shall be duly notarized and recorded in the Official Records of the County Recorder’s Office for the County of San Bernardino, State of California.
Period of Affordability. The words “Period of Affordability” mean and refer to a number of years measured from the Delivery Date and determined based on the amount of the HOME Subsidy, as follows:
Amount of HOME Subsidy Period of Affordability
Less than $15,000 5 years
$15,000 to $40,000 10 years
More than $40,000 15 years
Project CC&Rs. The words “Project CC&Rs” mean and refer to all covenants, conditions and restrictions, if any, affecting and applicable to and relating to the Eligible Property, as amended from time to time.
“Qualified Homebuyer.” The words “Qualified Homebuyer” mean and refer to a household whose annual income does not exceed eighty percent (80%) of the Area Median Income, and which meets all of the requirements for purchasing an Eligible Property.
Sale Agreement. The words “Sale Agreement” mean and refer to a standard California Association of Realtors California Residential Purchase Agreement and Joint Escrow Instructions, as modified by any addenda required by City, or a substantially equivalent purchase and sale agreement, by and between Developer as seller and Buyer as purchaser of the Eligible Property, as amended from time to time. City shall be a third-party beneficiary of such Sale Agreement.
Sale Escrow. The words “Sale Escrow” mean and refer to a real estate conveyance transaction or escrow by and between Developer as seller and Buyer as purchaser of the Eligible Property. The transfer of the Eligible Property to Buyer shall be accomplished upon the close of the Sale Escrow.
The titles and headings of the sections of this Affordable Housing Covenant have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the meaning of any of the terms or provisions hereof.
Section 2. Use of the Eligible Property
Buyer shall use the Eligible Property as a single-family detached home, to be occupied and owned by persons or a household whose income is equal to or below 80% of AMI and that meet all of the other requirements to be a Qualified Homebuyer as defined in Section 1.
Section 3. Covenants of Buyer.
(a) Buyer shall use and occupy the Eligible Property as Buyer’s principal residence during the Period of Affordability. Buyer shall not sell or transfer the Eligible Property or any interest in the Eligible Property, including without limitation a leasehold interest, or cease to use and occupy the Eligible Property Packet Pg. 753
as Buyer’s principal residence, during the Period of Affordability. Buyer shall confirm to City, and shall permit City to verify, that Buyer satisfies the income requirements for a Low-Income Household based on Annual Income.
(b) Buyer agrees to provide City with the following items of information for inspection by City or its contracted designee, promptly upon written request of City or its contracted designee:
(i) State and federal income tax returns for the calendar year preceding the close of the Sale Escrow, filed by all persons who will reside in the Eligible Property; (ii) Current wage, income and salary statements for all persons who will reside in the Eligible Property at the close of the Sale Escrow.
(c) While Buyer owns the Eligible Property, Buyer shall abide by and comply with all applicable Project CC&Rs, and, at the request of City, shall assign to City the right to enforce the Project CC&Rs on behalf of Buyer.
(d) Also while Buyer owns the Eligible Property, Buyer shall enforce all applicable Project CC&Rs against all individuals and entities, including, without limitation, against all non-complying members of a homeowner’s association, who are subject to, bound by and obligated to perform and comply with the Project CC&Rs, at Buyer’s sole cost and expense.
Section 4. Acknowledgment of First Mortgage Lender Financing.
It is expected and acknowledged by City that concurrently with the Delivery Date, Buyer shall obtain purchase money mortgage financing for the acquisition of the Eligible Property from a qualified financial institution (“First Mortgage Lender”). Buyer agrees to provide City with a true and correct copy of the loan agreement by and between the First Mortgage Lender and Buyer, prior to the Delivery Date.
Section 5. Maintenance Condition of the Eligible Property. While Buyer owns the Eligible Property, Buyer shall:
(a) Maintain the exterior areas of the Eligible Property which are subject to public view (e.g.:
all improvements, paving, walkways, landscaping, and ornamentation) in good repair and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during Buyer’s ownership of the Eligible Property there is an occurrence of an adverse condition on any area of the Eligible Property which is subject to public view in contravention of the general maintenance standard described above (a “Maintenance Deficiency”), City shall notify Buyer in writing of the Maintenance Deficiency and give Buyer thirty (30) calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. The words “Maintenance Deficiency” include without limitation the following inadequate or non-confirming property maintenance conditions and/or breaches of single family dwelling residential property use restrictions:
(i) failure to properly maintain the windows, structural elements, and painted exterior surface areas of the dwelling unit in a clean and presentable manner; (ii) failure to keep the front and side yard areas of the property free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the property; Packet Pg. 754
(iii) failure to regularly mow lawn areas or permit grasses planted in lawn areas to exceed nine inches (9”) in height, or failure to otherwise maintain the landscaping in a reasonable condition free of weeds and debris;
(iv) parking of any commercial motor vehicle in excess of 7,000 pounds gross weight anywhere on the property except construction vehicles being use in construction or reconstruction on the Eligible Property, or the parking of motor vehicles, boats, camper shells, trailers, recreational vehicles and the like in any side yard or on any other parts of the property which are not covered by a paved and impermeable surface; (v) the use of the garage area of the dwelling unit for purposes other than the parking of motor vehicles and the storage of construction equipment.
In the event Buyer fails to cure or commence to cure the Maintenance Deficiency within the time allowed, City may thereafter conduct a public hearing following transmittal of written notice thereof to Buyer ten (10) calendar days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether Buyer has failed to comply with the provisions of this Section 5(a). If, upon the conclusion of a public hearing, City makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, thereafter City shall have the right to enter the Eligible Property (exterior areas only) and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity City may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by City for the abatement of a Maintenance Deficiency as authorized by this Section 5(a) shall become a lien on the Eligible Property.
If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the City to Buyer, City shall have the right to enforce the lien in the manner as provided in Section 5(c). (b) Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the Eligible Property shall be removed by Buyer from any exterior surface of a structure or improvement on the Eligible Property by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied or by removal with solvents, detergents or water as appropriate. In the event that graffiti is placed on the Eligible Property (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours following the time of its application, then in such event and without notice to Buyer, City shall have the right to enter the Eligible Property and remove the graffiti. Notwithstanding any provision of Section 5(a) to the contrary, any sum expended by City for the removal of graffiti from the Eligible Property as authorized by this Section 5(b) shall become a lien on the Eligible Property. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by City to Buyer, City shall have the right to enforce its lien in the manner as provided in Section 5(c). (c) The parties hereto further mutually understand and agree that the rights conferred upon City under this Section 5 expressly include the power to establish and enforce a lien or other encumbrance against the Eligible Property in the manner provided under Civil Code Sections 2924, 2924b and 2924c in the amount reasonably necessary to restore the Eligible Property to the maintenance standard required under Section 5(a) or Section 5(b), including, without limitation, attorneys’ fees, court costs and costs of City associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of City in connection with such action. In any legal proceeding for enforcing such a lien against the Eligible Property, the prevailing party shall be entitled to recover its attorneys’ fees, court costs and other costs of suit. The provisions of this Section 5 shall be a covenant running with the land for the period of Buyer’s ownership of the Eligible Property and shall be enforceable by City in its discretion, cumulative with any other rights or powers granted to City under applicable law. Nothing in the foregoing provisions Packet Pg. 755
of this Section 5 shall be deemed to preclude Buyer from making any alterations, additions, or other changes to any structure or improvement or landscaping on the Eligible Property, provided that such changes comply with the zoning and development regulations of City and other applicable law.
Section 6. Covenants to Run With the Land. The covenants, reservations and restrictions set forth herein are part of a plan for the promotion and preservation of affordable single family housing dwelling units within the territorial jurisdiction of City and each shall be deemed covenants running with the land and shall pass to and be binding upon the Eligible Property for the term provided in Section 8.
Section 7. Burden and Benefit. The burden of the covenants set forth herein touch and concern the land in that Buyer’s legal interests in the Eligible Property are affected by the affordable single family dwelling use and occupancy covenants hereunder. The benefit of such covenants touches and concerns the land by enhancing and increasing the enjoyment and use of the Eligible Property by the intended beneficiaries of such covenants, reservations and restrictions, by furthering the affordable single family housing development goals and objectives of City, and by making the Eligible Property available for acquisition and occupancy by Buyer any.
Section 8. Term.
(a) The provisions of this Affordable Housing Covenant shall apply to the Eligible Property for the length of the Period of Affordability, as defined in Section 1. (b) Any provision or section of this Affordable Housing Covenant may be terminated after the Delivery Date upon the written agreement of City and the Buyer, if there shall have been provided to City an opinion of legal counsel that such a termination, under terms and conditions approved by City in its reasonable discretion, will not adversely affect the affordable single family housing and development goals and obligations of the City.
Section 9. Breach and Default and Enforcement.
(a) Failure or delay by Buyer to honor or perform any material term or provision of this Affordable Housing Covenant shall constitute a breach hereunder; provided, however, that if Buyer commences to cure, correct or remedy the alleged breach within thirty (30) calendar days after the date of written notice specifying such breach and diligently completes such cure, correction or remedy, Buyer shall not be deemed to be in default hereunder.
City shall give Buyer written notice of breach specifying the alleged breach which if uncured by Buyer within thirty (30) calendar days, shall be deemed to be an event of default. Delay in giving such notice shall not constitute a waiver of any breach or event of default nor shall it change the time of breach or event of default; provided, however, that City shall not exercise any remedy for an event of default hereunder without first delivering the written notice of breach as specified in this Section 9.
Except with respect to rights and remedies expressly declared to be exclusive in this Affordable Housing Covenant, the rights and remedies of City are cumulative with any other right or power of City or other applicable law, and the exercise of one or more of such rights or remedies shall not preclude the exercise by City at the same or different times, of any other right or remedy for the same breach or event of default.
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If a breach by Buyer remains uncured for more than thirty (30) calendar days following written notice, as provided above, an event of default shall be deemed to have occurred. In addition to the remedial provisions of Section 5 as related to a Maintenance Deficiency at the Eligible Property, upon the occurrence of any event of default City shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows:
(i) by mandamus or other suit, action or proceeding at law or in equity, to require Buyer to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of City; or
(ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of Buyer to City.
(b) Except as set forth in the next sentence, no third party shall have any right or power to enforce any provision of this Affordable Housing Covenant on behalf of City or to compel City to enforce any provision of this Affordable Housing Covenant against Buyer or the Eligible Property. City may assign the right and power to enforce the provision of this Affordable Housing Covenant against Buyer or the Eligible Property as the successor administration agency of the HOME Investment Partnerships Program.
Section 10. Recapture of HOME Subsidy. If Buyer at any time during the Period of Affordability sells or transfers the Eligible Property, whether voluntarily or involuntarily due to foreclosure or other circumstance, the following provisions shall apply, pursuant to 24 C.F.R. Part 92.254:
(a) If Buyer sells or transfers the Eligible Property within the first five years of the Period of Affordability, City shall recover from the Net Proceeds, if any, the entire amount of the HOME Subsidy, or such lesser amount as the Net Proceeds may permit to be recovered. The Net Proceeds are the sales price paid to Buyer minus repayment of loans that are superior in priority to this Affordable Housing Covenant and the Deed of Trust securing it, and any closing costs. (b) If Buyer sells or transfers the Eligible Property after occupying the Eligible Property for at least five years (60 months from the Delivery Date), City’s recovery from the Net Proceeds shall equal the amount of the HOME Subsidy, reduced by a percentage determined by dividing the number of Buyer’s full years of occupation of the Eligible Property by the number of years of the Period of Affordability, and multiplying the result by 100. In calculating recapture of the HOME subsidy only full 12-month periods of occupancy will be utilized in the calculation. For example, if Buyer sells or transfers the Eligible Property during the seventh year, before the completion of the full seventh year of a fifteen-year Period of Affordability, the City would recover 60 percent of the HOME Subsidy and the balance (40 percent) would go to the Buyer:
(6 years ÷ 15 years) × 100 = 40. Assuming sufficient Net Proceeds, City would recover 60 percent.
If there were not sufficient Net Proceeds, City would recover 60 percent of Net Proceeds, whatever the amount.
(c) In no event shall City’s recovery exceed the amount of the Net Proceeds.
Section 11. Governing Law. This Affordable Housing Covenant shall be governed by the laws of the State of California.
Section 12. Amendment. This Affordable Housing Covenant may be amended only by a written instrument executed by Buyer and City.
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Section 13. Severability. If any provision of this Affordable Housing Covenant is declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect the remaining parts of this Affordable Housing Covenant which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable.
Section 14. Time is of the Essence. For each provision of this Affordable Housing Covenant which states a specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed to be of the essence.
Section 15. Notice. Any notice required to be given under this Affordable Housing Covenant shall be given by City, as applicable, by personal delivery or by First Class United States mail at the addresses specified below or at such other address as may be specified in writing by the parties hereto:
If to City: City of San Bernardino,
Community and Economic Development
290 North “D” Street, Third Floor
San Bernardino, CA 92401-1734
Attn: Housing Division
If to Buyer: Name:
Street Address:
City: , CA
Zip Code:
Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if personally delivered, when received by the authorized representative of City, as applicable.
Section 15. Entire Agreement. Except as to matters set forth in the other agreements to which reference is made herein, this Affordable Housing Covenant is the parties’ entire agreement with respect to the matters set forth herein and supersedes all prior negotiations and oral or written agreements or expressions of the parties with respect thereto.
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IN WITNESS WHEREOF, City has caused this Affordable Housing Covenant to be signed, acknowledged and attested on its behalf by duly authorized representatives in counterpart original copies which shall upon execution by all of the parties be deemed to be one original document.
City of San Bernardino
Date: By:
Robert D. Field,City Manager
Buyer
Date:__________________
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EXHIBIT “A”
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows:
APN:
Address: San Bernardino, CA
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Attachment J to Master Agreement
Affirmative Marketing Requirements
In accordance with the California Fair Employment and Housing Act and the policy of the City of San Bernardino, the Developer or designees must adhere to the following affirmative marketing guidelines in order to create awareness for the general public and certain community groups as to the availability of Eligible Properties available for sale to low-income households.
APPLICABILITY
Developer is required to provide an affirmative marketing plan and procedures for all developments with HOME-assisted units. Procedures to be used must identify how persons in the housing market area who are not likely to apply for the housing without special outreach, shall be informed of available affordable housing opportunities. The City has identified three groups as least likely to. apply without special outreach efforts, namely, African-American, Asian American and Pacific Islanders, and Hispanic persons.
THE AFFIRMATIVE MARKETING PLAN
The Developer’s Affirmative Marketing Plan must consist of a written marketing strategy designed to provide information and to attract eligible persons in the housing market area to the available units without regard to race, color, national origin, sex, religion, marital and familial status, disability, medical condition, sexual orientation, or ancestry. It must describe initial advertising, outreach (community contacts) and other marketing activities, which will inform potential buyers of the availability of the units. It shall also outline an outreach program which includes special measures designed to attract those groups identified as least likely to apply without special outreach efforts, (because of existing neighborhood racial or ethnic patterns, location of housing or other factors) and other efforts designed to attract persons from the total eligible population.
The Developer must do the following:
1. Insert Equal Housing Opportunity logotype, statement or slogan on all written outreach tools (i.e. signs, advertisements, brochures, direct mail solicitations, press releases, etc.)
2. In addition to the above, the Affirmative Fair Housing Marketing Plan shall outline:
a. Commercial and Social Media to be used (i.e., community newspapers and newspapers, radio, television, billboards, religious or local real estate publications, etc.).
b. Marketing efforts to be used (i.e., brochures, letters, handouts, direct mail, signs, etc.)
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c. Community Contacts to supplement formal communications media for the purpose of soliciting group(s) least likely to purchase the available housing without special outreach efforts. They should be individuals or organizations (i.e., service agencies, community organizations, places of worship, etc) that have direct and frequent contact with those identified as least likely to apply.
The contacts should also be chosen on the basis of their positions of influence within the general community and the particular target group. The Property Owner must agree to establish and maintain contact with the identified contacts. d. In accordance with the City’s Limited English Proficiency (LEP) Plan, all advertising and program information must also be available in Spanish.
BUYER SELECTION
1. The Developer must maintain records of all prospective homebuyer applicants, including their race, ethnicity and gender, reasons for denial of application, placement on a waiting list, etc.
2. The Developer must provide for the selection of applicants from a written waiting list in the chronological order of their application and provide prompt written notification to any rejected applicants of the grounds for any rejection:
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Resolution No. 2023-011
Resolution 2023-011
January 18, 2023
RESOLUTION NO. 2023-011
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE EXECUTION
OF TO THE HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME)
INFILL HOUSING DEVELOPMENT MASTER AGREEMENT BETWEEN
THE CITY OF SAN BERNARDINO AND NPHS SAN BERNARDINO
DEVELOPMENTS, LLC
WHEREAS, the City has received HOME Investment Partnership Act (“HOME”) funds form the United States Department of Housing and Urban Development (“HUD”) pursuant to the Cranston-Gonzalez National Housing Act of 1990, The HOME funds must be used by the City in accordance with 24 CFR Par 92; and
WHEREAS, the HOME Program is designed to create affordable housing for low and moderate income households and may be used to fund a wide range of activities including the building, buying, and/or rehabilitation of affordable housing for rent or homeownership or providing direct rental assistance; and
WHEREAS, NPHS San Bernardino Developments, LLC (“Developer”) is a qualified developer for the purpose of constructing or reconstructing infill housing on blighted or underutilized sites (“Eligible Properties”) and selling the Eligible Properties to qualified households; and
WHEREAS, the Infill Housing Program was approved by the Mayor and City Council on September 19, 2016; and
WHEREAS, the City and Developer entered into an Infill Housing Development Master Agreement on January 18, 2023, setting forth the terms and conditions under which Developer would construct or reconstruct infill housing on blighted or underutilized sites and sell those properties to households whose income does not exceed 80 percent of the area median income (“Agreement”); and
WHEREAS, the parcels are identified as 1356 Hillside Drive; 1384 Hillside Drive; 1394 Hillside Drive; 255 E. 49th Street; 299 E. 49th Street and 251 E. 49th Street.
BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.
SECTION 2. The Mayor and City Council do hereby authorize the City Manager or designee to execute the Agreement, attached hereto and incorporated herein by this reference.
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Resolution No. 2023-011
Resolution 2023-011
January 18, 2023
SECTION 3. The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.
SECTION 5. Effective Date. This Resolution shall become effective immediately.
APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of __________ 2023.
Helen Tran, Mayor
City of San Bernardino
Attest:
Genoveva Rocha, CMC, City Clerk
Approved as to form:
Sonia Carvalho, City Attorney
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Resolution No. 2023-011
Resolution 2023-011
January 18, 2023
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2023-___, adopted at a regular meeting held on the ___ day of _______ 2023 by the following vote:
Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
REYNOSO _____ _____ _______ _______
CALVIN _____ _____ _______ _______
ALEXANDER _____ _____ _______ _______
** IF MAYOR VOTES ON ITEM PER CHAPTER, ADD A LINE FOR MAYOR’S VOTE** WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2023.
Genoveva Rocha, CMC, City Clerk
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: January 18, 2023
To: Honorable Mayor and City Council Members
From: Nathan Freeman, Agency Director of Community, Housing, and Economic Development
Department: Community, Housing, & Economic Development (CED) Subject: Adoption of Ordinance No. MC-1603 - Belmont
Residential Subdivision Project (Ward 5)
Recommendation:
It is recommended that the Mayor and City Council of San Bernardino, California, adopt Ordinance No. MC-1603 approving Development Code Amendment (Zoning Map Amendment) 21-05 changing the Zoning District Classification of a parcel (APN: 0261- 151-10) containing approximately 6.10 acres from Residential Low (RL) to Residential Suburban (RS), pursuant to a Mitigated Negative Declaration (Attachment 1).
Background
On December 7, 2022, the Mayor and City Council conducted a public hearing on Development Code Amendment (Zoning Map Amendment) 21-05 to change the Zoning District Classification of a parcel (APN: 0261-151-10) containing approximately
6.10 acres from Residential Low (RL) to Residential Suburban (RS), pursuant to a Mitigated Negative Declaration. Subsequent to Mayor and City Council discussion, the City Council introduced Ordinance No. MC-1603.
Discussion
The proposed project is requesting to change the Zoning District Classification of the project site to Residential Suburban (RS) in order to allow for the subdivision of the property into twenty-five (25) single-family residential lots ranging in size from 7,372 to 9,700 square feet.
2021-2025 Strategic Targets and Goals
Development Code Amendment (Zoning Map Amendment) 21-05 aligns with Key Target No. 3: Improved Quality of Life. The proposed zoning map amendment would allow for the associated subdivision of twenty-five (25) single family residential lots.
This subdivision will improve the housing inventory and align with the State of California’s Housing requirements by allowing for the future development of additional Packet Pg. 768
residential units on a lot that is currently vacant. In addition, the permitted subdivision would be compatible with, and improve, the surrounding areas.
Fiscal Impact
The proposed action will not have a direct fiscal impact to the City’s General Fund.
However, future residential development at the property will be subject to the applicable impact fees for single-family residential development. City services will be provided to this project like other single-family residential neighborhoods within the City and surrounding areas.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Ordinance No. MC-1603 approving Development Code Amendment (Zoning Map Amendment) 21-05 changing the Zoning District Classification of a parcel (APN: 0261-151-10) containing approximately 6.10 acres from Residential Low (RL) to Residential Suburban (RS), pursuant to a Mitigated Negative Declaration.
Attachments
Attachment 1 Ordinance No. MC-1603 (Adopting MND/MMRP Approving Development Code Amendment [Zoning Map Amendment] 21-05) Attachment 2 Ordinance No. MC-1603 (Adopting MND/MMRP Approving Development Code Amendment [Zoning Map Amendment] 21-05) – Exhibit A (MMRP)
Attachment 3 Ordinance No. MC-1603 (Adopting MND/MMRP Approving Development Code Amendment [Zoning Map Amendment] 21-05) – Exhibit B (Zoning Map Amendment)
Ward:
Fifth Ward
Synopsis of Previous Council Actions:
December 7, 2022 Mayor and City Council introduced Ordinance No. MC-1603 (Approving Development Code Amendment [Zoning Map
Amendment] 21-05)
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ORDINANCE NO. MC-1603
1 ORDINANCE NO. MC-1603
ORDINANCE OF THE MAYOR AND CITY COUNCIL OF
THE CITY OF SAN BERNARDINO, CALIFORNIA,
ADOPTING THE MITIGATED NEGATIVE
DECLARATION AND MITIGATION MONITORING AND
REPORTING PROGRAM, AND APPROVING
DEVELOPMENT CODE AMENDMENT (ZONING MAP
AMENDMENT) 21-05 CHANGING THE ZONING
DISTRICT CLASSIFICATION OF A PARCEL (APN: 0261-
151-10) CONTAINING APPROXIMATELY 6.10 ACRES
FROM RESIDENTIAL LOW (RL) TO RESIDENTIAL
SUBURBAN (RS).
WHEREAS, together, Development Code Amendment (Zoning Map Amendment) 21-05 and Subdivision 21-11 (Tentative Tract Map 20421) constitute the Belmont Residential Subdivision Project ("Project"); and
WHEREAS, Development Code Amendment (Zoning Map Amendment) 21-05 is a request to allow the change of the Zoning District Classification of a parcel (APN: 0261-151-10) containing approximately 6.10 acres from Residential Low (RL) to Residential Suburban (RS); and
WHEREAS, pursuant to the California Environmental Quality Act (“CEQA”; Public Resources Code, § 21000 et seq.), Section 21067, and State CEQA Guidelines (California Code of Regulations, § 15000 et seq.), Section 15367, the City of San Bernardino is the lead agency for the Project; and
WHEREAS, City staff determined that pursuant to State CEQA Guidelines Section 15073, preparation of a Mitigated Negative Declaration was the appropriate environmental review procedure under CEQA, because all potential significant impacts of the Project can be mitigated to a level of less than significant; and
WHEREAS, a Mitigated Negative Declaration (“MND”) and Mitigation Monitoring and Reporting Program (“MMRP”), attached hereto as Exhibit A, were prepared for the Project; and WHEREAS, on September 8, 2022, in accordance with State CEQA Guidelines Sections 15072 and 15073, a Notice of Intent to Adopt a Mitigated Negative Declaration (“NOI”) was mailed to all organizations and individuals who previously requested such notice in writing, and notice was also made by way of publication consistent with CEQA’s requirements; and WHEREAS, on September 10, 2022, in accordance with State CEQA Guidelines Section 15072(d), the NOI was also posted by the Clerk for the County of San Bernardino Board of Supervisors to begin the 20-day public review period; and WHEREAS, on November 8, 2022, the Planning Commission of the City of San Bernardino held a duly-noticed public hearing to consider public testimony and the staff report, and adopted Resolution No. 2022-048 recommending the adoption of the Mitigated Negative Packet Pg. 770
ORDINANCE NO. MC-1603
2 Declaration and Mitigation Monitoring and Reporting Program, and the approval of Development Code Amendment (Zoning Map Amendment) 21-05 and Subdivision 21-11 (Tentative Tract Map 20421 to the Mayor and City Council; and WHEREAS, notice of the December 7, 2022 public hearing for the Mayor and City Council's consideration of this proposed Ordinance was published in The Sun newspaper on November 22, 2022, and was mailed to the owners and tenants of the properties located within 1,000 feet of the subject property in accordance with Development Code Chapter 19.52 (Hearing and Appeals); and
WHEREAS, no comments made in the public hearing conducted by the Mayor and City Council, and no additional information submitted to the Mayor and City Council, has produced substantial new information requiring substantial revisions that would trigger recirculation of the MND or additional environmental review under State CEQA Guidelines Section 15073.5; and WHEREAS, pursuant to the requirements of Chapter 19.52 (Hearing and Appeals), Chapter 19.42 (Development Code Amendments), and Chapter 19.74 (Zoning Map Amendments) of the City of San Bernardino Development Code, the Mayor and City Council have the authority to take action on Development Code Amendment (Zoning Map Amendment) 21-05; and
NOW THEREFORE, THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO ORDAIN AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.
SECTION 2. Compliance with the California Environmental Quality Act. The City Council having independently reviewed and analyzed the record before it, including the adopted Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program, and written and oral testimony, and having exercised their independent judgment, finds that there is no substantial evidence supporting a fair argument that approval of the Project will result in a significant effect on the environment.
SECTION 3. Finding of Facts – Development Code Amendment (Zoning Map Amendment) 19-08
Finding No. 1: The proposed amendment is consistent with the General Plan.
Finding of Fact: The proposed amendment will change the Zoning District Classification from Residential Low (RL) to Residential Suburban (RS) for the entirety of the project site containing approximately 6.10 acres. The Residential Suburban (RS) Zoning District Classification is intended to provide for residential development with a maximum of 4.5 units residences per net acre. The proposed amendment will allow for the future development of a single-family subdivision comprised of twenty-five (25) detached singlefamily residences, which provides a density of 4.1 residences per acre, and is consistent with the surrounding single-family residential developments Packet Pg. 771
ORDINANCE NO. MC-1603
3 within the project area. Therefore, the proposed project is consistent with the following General Plan goals and policies:
General Plan Land Use Element Policy 2.2.1: Ensure
compatibility between land uses and quality design through adherence to standards and regulations in the Development Code and policies and guidelines in the Community Design Element.
General Plan Land Use Element Goal 2.4: Enhance the
quality of life and economic vitality in San Bernardino by strategic in-fill of new development and revitalization of existing development.
General Plan Community Design Element Goal 5.4:
Ensure individual projects are well designed and
maintained.
Finding No. 2: The proposed amendment would not be detrimental to the public interest, health, safety, convenience, or welfare of the City.
Finding of Fact: The proposed amendment will not be detrimental to the public interest, health, safety, convenience, or welfare of the City in that the proposed amendment to change the Zoning District Classification of the entirety of the project site from residential Low (RL) to Residential Suburban (RS) will facilitate the future development of a single-family subdivision comprised of twenty-five (25) detached single-family residences which is consistent with the surrounding single-family residential developments.
The project site is generally flat, with access from W. Belmont Avenue and N. Olive Avenue, fully served by utility providers, and will not result in the need for the excessive provision of services. Additionally, any potential impacts created by the proposed amendment have been addressed in the Draft Initial Study/Mitigated Negative Declaration and appropriate mitigation measures have been included within the Mitigation Monitoring and Reporting Program.
Finding No. 3: The proposed amendment would maintain the appropriate balance of land uses within the City.
Finding of Fact: The proposed amendment would result in the entirety of the project site having the Residential Suburban (RS) Zoning District Classification to allow for the future development of a single-family subdivision comprised of twenty-five (25) detached single-family residences. The subject property is located adjacent to an existing single-family residential neighborhood developed under the Residential Suburban (RS) classification, and would continue the established street pattern and lot configuration. Therefore, the proposed change from Residential Low (RL) to Residential Suburban (RS) for the project site would allow the proposed Packet Pg. 772
ORDINANCE NO. MC-1603
4 project nearby existing residential uses, thereby providing for an appropriate balance of land uses within the City.
Finding No. 4: The subject parcels are physically suitable (including, but not limited to, access, provision of utilities, compatibility with adjoining land uses, and absence of physical constraints) for the requested land use designation and the anticipated land use development.
Finding of Fact: The project site is currently comprised of one (1) parcel that is proposed to be subdivided into twenty-five (25) single-family residential lots which will be consistent with the surrounding development. The project site is generally flat, with access from W. Belmont Avenue and N. Olive Avenue. Utilities are available directly from the adjacent public rights-ofway. There are no physical constraints on the site, such as steep slopes or watercourses.
SECTION 4. Development Code Amendment (Zoning Map Amendment) 21-05 is a request to allow the change of the Zoning District Classification of a parcel (APN: 0261-151-10) containing approximately 6.10 acres from Residential Low (RL) to Residential Suburban (RS), attached hereto and incorporated herein by reference as Exhibit B, is hereby approved.
SECTION 6. The documents and materials associated with this Resolution and that constitute the record of proceedings on which these findings are based are located at 290 North D Street, San Bernardino, CA 92401. The City Clerk is the custodian of the record of proceedings.
SECTION 5. Notice of Determination: The Planning Division of the Community and Economic Development Department is hereby directed to file a Notice of Determination with the County Clerk of the County of San Bernardino within five (5) working days of final project approval certifying the City’s compliance with the California Environmental Quality Act in approving the Project.
SECTION 6. Severability: If any section, subsection, subdivision, sentence, or clause or phrase in this Ordinance or any part thereof is for any reason held to be unconstitutional, invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have adopted each section irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.
SECTION 7. Effective Date. This Ordinance shall become effective thirty (30) days after the date of its adoption.
SECTION 8. Notice of Adoption. The City Clerk of the City of San Bernardino shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted under Section 36933 of the Government Code of the State of California.
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ORDINANCE NO. MC-1603
5 APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of _________, 2023.
Helen Tran, Mayor
City of San Bernardino
Attest:
Genoveva Rocha, CMC, City Clerk
Approved as to form:
Sonia Carvalho, City Attorney
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ORDINANCE NO. MC-1603
6 CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss
CITY OF SAN BERNARDINO )
I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Ordinance No. MC-1603, adopted by the City Council of the City of San Bernardino, California, at a regular meeting held at the ___ day of _________, 2023 by the following vote:
Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ
IBARRA
FIGUEROA
SHORETT
REYNOSO
CALVIN
ALEXANDER
WITNESS my hand and official seal of the City of San Bernardino this ___ day of _________, 2023.
Genoveva Rocha, CMC, City Clerk
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BELMONT RESIDENTIAL SUBDIVISION PROJECT November 2022
MITIGATION MONITORING AND REPORTING PROGRAM
1 | P a g e
PROJECT FILE NO.: Development Code Amendment 21-05 to change the Zoning District classification from RL (Residential Low) to Residential Suburban (RS) and Subdivision No. 21-11 (Tentative Tract Map No. 20421)to subdivide 6.10 gross acres into 25 single-family lots.
APPLICANT: Mr. Rene Jacober
Inland Self Storage Management
PO Box 8008, Newport Beach, CA 92658
INTRODUCTION
Section 21081.6 of the Public Resources Code requires a Lead Agency to adopt a “reporting or monitoring program for the changes made to the project or conditions of project approval, adopted in order to mitigate or avoid significant effects on the environment” (Mitigation Monitoring or Reporting, Section 15097 of the CEQA Statute and Guidelines provides additional direction on mitigation monitoring or reporting). The City of San Bernardino is the Lead Agency for the Belmont Residential Subdivision Project (the “Project”) located at the northwest corner of West Belmont Avenue and Olive Avenue, in the Verdemont area of the City of San Bernardino. An Initial Study has been prepared to address the potential environmental impacts of the Project. Where appropriate, this environmental document identified project design features or recommended mitigation measures to avoid or to reduce potentially significant environmental impacts of the Project. The Mitigation Monitoring and Reporting Program (MMRP) is designed to monitor implementation of the mitigation measures identified for the Project. The MMRP is subject to review and approval by the Lead Agency as part of the adoption of the Mitigated Negative Declaration and approval of project conditions. The required mitigation measures are listed and categorized by impact area, as identified in the Initial Study, The first column of the MMRP table identifies the Mitigation Measure. The second column identifies the monitoring schedule or timing, while the third column names the party responsible for monitoring the required action. The fourth column, “Monitoring Procedure,” outlines the steps for monitoring the action identified in the mitigation measure. The fifth and sixth columns deal with reporting and provide spaces for comments and dates and initials. These last columns will be used by the City to ensure that individual mitigation measures have been monitored.
The Project Applicant shall be responsible for implementing all mitigation measures unless otherwise noted. The MMRP performance shall be monitored and reported annually to determine the effectiveness of the measures implemented in any given year and reevaluate the mitigation needs for the upcoming year.
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BELMONT RESIDENTIAL SUBDIVISION PROJECT November 2022
MITIGATION MONITORING AND REPORTING PROGRAM
2 | P a g e
MitigationMeasure
MitigationMonitoring Reporting
Monitoring
Schedule
Monitoring
Responsibility
Monitoring
Procedure Comments Date/Initials
CULTURAL RESOURCES
CR-1: In the event that cultural resources
are discovered during project activities, all
work in the immediate vicinity of the find
(within a 60‐foot buffer) shall cease and a
qualified archaeologist meeting Secretary
of Interior standards shall be hired to
assess the find. Work on the other
portions of the project outside of the
buffered area may continue during this
assessment period. Additionally, the
Yuhaaviatam of San Manuel Nation
Cultural Resources Department shall be
contacted regarding any pre‐contact
and/or historic‐era finds and be provided
information after the archaeologist makes
his/her initial assessment of the nature of
the find, so as to provide Tribal input with
regards to significance and treatment.
In the event of
discovery of
resources during
grounddisturbing
activities
San Bernardino
Planning
Division
Review report
documenting
findings and
recommendations
for treatment of
cultural
resources
discovered
CR-2: If significant pre‐contact and/or
historic‐era cultural resources, as defined
by CEQA (as amended, 2015), are
discovered and avoidance cannot be
ensured, the archaeologist shall develop a
Monitoring and Treatment Plan, the drafts
of which shall be provided to the
Yuhaaviatam of San Manuel Nation for
review and comment. The archaeologist
shall monitor the remainder of the project
and implement the Plan accordingly.
In the event of
discovery of
resources during
grounddisturbing
activities
San Bernardino
Planning
Division
Review the
Monitoring a n d
T r ea tm e nt
Plan and verify
compliance
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BELMONT RESIDENTIAL SUBDIVISION PROJECT November 2022
MITIGATION MONITORING AND REPORTING PROGRAM
3 | P a g e
MitigationMeasure
MitigationMonitoring Reporting
Monitoring
Schedule
Monitoring
Responsibility
Monitoring
Procedure Comments Date/Initials
CR-3: If human remains or funerary
objects are encountered during any
activities associated with the project,
work in the immediate vicinity (within a
100‐foot buffer of the find) shall cease
and the County Coroner shall be
contacted pursuant to State Health and
Safety Code §7050.5 and that code
enforced for the duration of the project.
In the event of
discovery of
inadvertent finds
during grounddisturbing
activities
San Bernardino
Planning
Division
Stop work and
contact the County
Coroner
NOISE
N‐1: Prior to the issuance of grading and
building permits, the contractor shall
establish a Construction Management Plan
that includes the following standards:
• Construction shall adhere to the
allowable operable hours as denoted
within the SBMC Chapter 8.54.
• During all project site excavation and
grading on‐site, construction
contractors shall equip all construction
equipment, fixed or mobile, with
properly operating and maintained
mufflers, consistent with manufacturer
standards.
• The contractor shall place all
stationary construction equipment so
that emitted noise is directed away
from the noise sensitive receptors
nearest the project site.
• Equipment shall be shut off and not
Prior to the
issuance of grading
and building
permits
San Bernardino
Planning
Division
During Grading and
Building
Planchecks, review
Construction
Management Plan
and check for plan
notes
On-site field
inspection
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BELMONT RESIDENTIAL SUBDIVISION PROJECT November 2022
MITIGATION MONITORING AND REPORTING PROGRAM
4 | P a g e
left to idle when not in use.
• The contractor shall locate equipment
staging in areas that will create the
greatest distance between
construction‐related noise sources and
sensitive receptors nearest the project
site during all project construction.
• The contractor shall limit the use of
vibratory and/or heavy equipment
along the project boundaries to the
greatest degree possible.
TRIBAL CULTURAL RESOURCES
TCR-1: The Yuhaaviatam of San Manuel
Nation Cultural Resources Department shall
be contacted of any pre-contact cultural
resources discovered during project
implementation, and be provided
information regarding the nature of the find,
so as to provide Tribal input with regards to
significance and treatment. Should the find
be deemed significant, as defined by CEQA
(as amended, 2015), a Cultural Resources
Monitoring and Treatment Plan shall be
created by the archaeologist, in
coordination with the Yuhaaviatam of San
Manuel Nation, and all subsequent finds
shall be subject to this plan. This plan shall
allow for a monitor to be present that
represents the Yuhaaviatam of San Manuel
Nation for the remainder of the project,
should the Yuhaaviatam of San Manuel
Nation elect to place a monitor on-site.
In the event of
discovery of
tribal cultural
resources during
grounddisturbing
activities
San Bernardino
Planning
Division
Contact the
Yuhaaviatam of
San Manuel Nation
and create cultural
resources
monitoring and
treatment plan
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BELMONT RESIDENTIAL SUBDIVISION PROJECT November 2022
MITIGATION MONITORING AND REPORTING PROGRAM
5 | P a g e
MitigationMeasure
MitigationMonitoring Reporting
Monitoring
Schedule
Monitoring
Responsibility
Monitoring
Procedure Comments Date/Initials
TCR-2: Any and all cultural documents
created as a part of the project (isolate
records, site records, survey reports,
testing reports, etc.) shall be supplied to
the applicant and Lead Agency for
dissemination to the Yuhaaviatam of San
Manuel Nation. The Lead Agency and/or
applicant shall, in good faith, consult with
the Yuhaaviatam of San Manuel Nation
throughout the life of the project.
In the event of
discovery of
tribal cultural
resources during
grounddisturbing
activities
San Bernardino
Planning
Division
Verify documents
have been
provided to the
Yuhaaviatam of San
Manuel Nation
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PROJECT: DCA (ZMA) 21-05
CHANGE THE ZONING DISTRICT CLASSIFICATION FROM
RESIDENTIAL LOW (RL) TO RESIDENTIAL SUBURBAN (RS) OF A
PARCEL (APN: 0261-151-10) CONTAINING APPROXIMATELY 6.10 ACRES
NORTH
EXHIBIT B – DEVELOPMENT CODE AMENDMENT (ZONING MAP AMENDMENT)
PROJECT SITE
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: January 18, 2023
To: Honorable Mayor and City Council Members
From: Nathan Freeman, Agency Director of Community, Housing, and Economic Development
Department: Community, Housing, & Economic Development (CED) Subject: First Amendment to the Exclusive Negotiating
Agreement (ENA) between the City of San Bernardino
and the Richman Group, LLC (Ward 1)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Authorize the execution of the First Amendment to the Exclusive Negotiating Agreement between the City of San Bernardino and the Richman Group, LLC.
2. Authorize the City Manager, or designee, to take further actions and execute any further documents as necessary to effectuate the First Amendment to the Exclusive Negotiating Agreement.
Background
On September 30, 2006, former Governor Schwarzenegger signed Assembly Bill No. 1457 into law, which allowed the City to sell up to 12.5-acres of Seccombe Lake Park for development purposes.
On September 6, 2020, staff published a Request for Qualifications (RFQ) seeking qualified developers to develop the first phase of a proposed affordable housing project, located on approximately four-acres of the 12.5-acres of Seccombe Lake Park.
On October 19, 2020, the Richman Group, LLC (Richman) submitted a response to the RFQ, and staff ultimately selected Richman as the developer of choice for the fouracre portion. Subsequently, on May 18, 2022, the Mayor and City Council approved an Exclusive Negotiating Agreement (ENA) with Richman for the development of an affordable housing project on approximately four-acres of Seccombe Lake Park.
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On June 24, 2022, staff published another RFQ, seeking qualified developers to develop the second phase of a proposed affordable housing project, located on approximately 8.5-acres of the aforementioned 12.5-acres of Seccombe Lake Park.
On July 25, 2022, Richman submitted a response to the RFQ, and staff ultimately selected Richman as the developer of choice for the remaining 8.5-acres. On September 21, 2022, staff presented the results of the RFQ to the Mayor and City Council in closed session. The Mayor and City Council concurred that Richman’s response to the RFQ was the most responsive and directed staff to negotiate an amendment to Richman’s existing ENA to encompass both portions of Seccombe Lake Park.
Discussion
The proposed Amendment No. 1 to the ENA has the following key terms:
• The ENA shall expire on December 31, 2023.
• All references to the Project in the original ENA shall now mean the entirety of the
12.5-acre portion of Seccombe Lake Park.
• The Amendment is not a definitive agreement and does not create a legal obligation for either party to enter into a Disposition and Development Agreement. • The Amendment is not a representation, guaranty, or assurance by the City of future approval of any entitlement or request for financial assistance from the City. • To ensure exemption from the Surplus Land Act, at a minimum, any future Disposition and Development Agreement will reflect that the comprehensive Project meets the requirements of Government Code section 37364:
o At least 80% of the area of the 12.5-acre site shall be used for development of housing.
o At least 40% of the total number of housing units developed on the 12.5-acre site shall be affordable to households whose incomes are equal to, or less than, 75% of the maximum income of lower income households, and at least half of those units shall be affordable to very low-income households. o Dwelling units produced for persons and families of low or moderate income shall be restricted by regulatory agreement, recorded in the County’s official records, to remain continually affordable to those persons and families for the longest feasible time, but not less than 30 years, pursuant to a method prescribed by the City.
• The comprehensive Project shall comply with the Waterman & Baseline Neighborhood Specific Plan.
2021-2025 Strategic Targets and Goals
Authorize to execute Amendment No. 1 Exclusive Negotiating Agreement aligns with Key Target No. 4: Economic Growth & Development by bringing development investment into the City, leveraging limited City resources, and increasing the City’s property tax base.
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Fiscal Impact
There is no fiscal impact to the General Fund associated with this report.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Authorize the execution of First Amendment to the Exclusive Negotiating Agreement between the City of San Bernardino and the Richman Group, LLC.
2. Authorize the City Manager, or designee, to take further actions and execute any further documents as necessary to effectuate the First Amendment to the Exclusive Negotiating Agreement.
Attachment
Attachment 1 - First Amendment to Exclusive Negotiating Agreement Attachment 2 – Exclusive Negotiating Agreement with Richmond Group, LLC Ward:
First Ward
Synopsis of Previous Council Actions:
May 18, 2022 The Mayor and City Council approved the ENA with Richman Group, LLC for the development of a four-acre portion of Seccombe Lake Park.
September 21, 2022 The Mayor and City Council, in closed session, directed staff to negotiate an amendment to Richman’s existing ENA to
encompass both portions of Seccombe Lake Park.
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55600.00228\40659781.1
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FIRST AMENDMENT TO
EXCLUSIVE NEGOTIATING AGREEMENT
This First Amendment (“Amendment”) to ENA (defined below) is made and entered into as of ____________, 2023 (“Effective Date”) by and between the City of San Bernardino, a charter city and municipal corporation (“City”), and The Richman Group of California Development Company, LLC, a California limited liability company and its permitted assigns (collectively the “Developer”). City and Developer are sometimes referred to herein individually as a “Party” and collectively as “Parties.”
RECITALS
A. WHEREAS, the City and the Developer have entered into an Exclusive Negotiating Agreement, dated as of May 18, 2022 (“ENA”), for the purpose of exclusively negotiating with one another about the proposed development of four (4) acres of the
12.5-Acre Portion of Seccombe Lake Park. All capitalized terms used but not defined in this Amendment shall have the meaning ascribed to them in the ENA; and B. WHEREAS, the Parties hereby adopt and incorporate by reference all of the Recitals set forth in the ENA as if stated in full herein; and C. WHEREAS, on June 24, 2022, the City published a Request for Qualifications (RFQ F-21-06) (the "RFQ"), seeking qualified developers for the remaining
8.5 acres of the 12.5-Acre Portion of the Park; and
D. WHEREAS, on or about July 25, 2022, the last day of the RFQ period, Developer submitted a response to the RFQ (the "Developer Response"); and E. WHEREAS, on September 21, 2022, Developer was selected by the City to develop the remaining 8.5 acres of the 12.5-Acre Portion of the Park; and F. WHEREAS, having now been selected by the City to develop the entirety of the 12.5-Acre Portion of the Park, the Parties desire to amend the ENA to so reflect and account for this change; and
G. WHEREAS, unchanged from the ENA, at a minimum, any Project on the Site will meet the requirements of Government Code section 37364; therefore, the Property and its ultimate disposition to Developer will be exempt from the Surplus Land Act, Government Code sections 54220 et seq. (the "Act"), pursuant to section 54221(f)(1)(A) of the Act; and
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants, conditions, and promises contained in this Amendment and the ENA, the Parties mutually agree as follows:
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55600.00228\40659781.1
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AGREEMENT
1. Incorporation of Recitals. The recitals listed above are true and correct and are hereby incorporated herein by this reference.
2. Definitions. Any and all references to the “Property,” the “Site,” or the “Project” in the ENA shall now mean the entirety of the 12.5-Acre Portion of the Park and any affordable housing project thereon – in however many phases the Parties ultimately agree upon.
3. Negotiation Period. By way of clarification, and not modification, pursuant to Section 4(b) and (d) of the ENA and subject to the extension option provided under Section 5 of the ENA, the Negotiation Period shall expire on December 31, 2023.
4. Full Force. Except as amended by this Amendment, all provisions of the ENA, including without limitation the indemnity and insurance provisions, shall remain in full force and effect and shall govern the actions of the Parties under this Amendment.
5. Electronic Transmission. A manually signed copy of this Amendment which is transmitted by email shall be deemed to have the same legal effect as delivery of an original executed copy of this Amendment for all purposes. The Parties hereto hereby agree that electronic signatures are acceptable and shall have the same force and effect as original wet signatures.
6. Counterparts. This Amendment may be signed in counterparts, each of which shall constitute an original and together shall constitute one agreement. [SIGNATURES ON FOLLOWING PAGE]
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55600.00228\40659781.1
-3-
SIGNATURE PAGE FOR
FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment on the Effective Date first herein above written.
CITY OF SAN BERNARDINO
APPROVED BY:
City Manager
APPROVED AS TO FORM:
Best Best & Krieger LLP
City Attorney
DEVELOPER
THE RICHMAN GROUP OF
CALIFORNIA DEVELOPMENT
COMPANY, LLC, a California limited
liability company
Signature
Name
Title
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: January 18, 2023
To: Honorable Mayor and City Council Members
From: Cheryl Weeks, Council Administrative Supervisor
Department: Council Office
Subject: City Board, Commission, and Citizen Advisory
Committee Minutes Approved in November/December
2022
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino receive and file the minutes from the City board, commission, and citizen advisory committee meetings approved in November and December 2022.
Background
On February 7, 2018, the Mayor and City Council adopted general provisions for the City’s boards, commissions and citizen advisory committees under Municipal Code Chapter 2.17 requiring meeting minutes to be provided to the Mayor and City Council.
Discussion
In keeping with the reporting requirements established in Municipal Code Chapter
2.17.080 the minutes for the board, commission and citizen advisory committee meetings approved in November and December 2022 are presented for review by the Mayor and City Council including the:
1. Arts and Historical Preservation Commission – 10/17/2022;10/31/2022
2. Charter Review Committee – 11/10/2022
3. Public Safety and Human Relations Commission – 10/10/2022; 11/14/2022
4. Water Board – 11/8/2022; 11/22/2022
2021-2025 Strategic Targets and Goals
Providing the agendas and minutes from each of the City’s Boards, Commissions and Citizen Advisory Committees to the Mayor and City Council is in alignment with Key Target Number 2: Focused, Aligned Leadership And Unified Community by building a culture that attracts, retains, and motivates the highest quality talent.
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Fiscal Impact
No fiscal impact to the City.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino receive and file the minutes from the City board, commission, and citizen advisory committee meetings approved in November and December 2022.
Attachments
Attachment 1 City Board, Commission and Citizen Advisory Committee Meeting minutes approved in November and December 2022
Ward:
All Wards
Synopsis of Previous Council Actions:
February 7, 2018 Mayor and City Council adopted general provisions for the City’s boards, commissions and citizen advisory committees under Municipal Code Chapter 2.17 requiring meeting
minutes to be provided to the Mayor and City Council.
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: January 18, 2023
To: Honorable Mayor and City Council Members
From: Barbara Whitehorn, Agency Director of Administrative Services Department: Finance
Subject: Investment Portfolio Report for October and November 2022 (All Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California, accept and file the Monthly Investment Portfolio Report for October and November 2022.
Background
The City’s Statement of Investment Policy requires that a monthly Investment Portfolio Report be prepared and submitted to the Mayor and City Council. The Director of Finance will prepare, review, and present the City’s Investment Portfolio Report and confirm that the portfolio is in compliance with the City’s Investment Policy.
Discussion
The Investment Portfolio Report provides a synopsis of investment activity for the City’s investment portfolio for the month ended October 31 and November 30, 2022.
The City’s Investment Portfolio is in full compliance with the City’s current Investment Policy and California Government Code section 53601, and there is sufficient cash flow from a combination of liquid and maturing securities, bank deposits, and income to meet the City’s expenditure requirements.
2021-2025 Strategic Targets and Goals
The acceptance and filing of the attached Investment Portfolio Report aligns with Key Target No. 1: Improved Operational & Financial Capacity by implementing, maintaining, and updating a fiscal accountability plan.
Fiscal Impact
There is no fiscal impact associated with receiving and filing the monthly investment report.
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Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, accept and file the Monthly Investment Portfolio Report for October and November 2022.
Attachments
Attachment 1 Investment Portfolio Management Summary Report October 2022
Attachment 2 Investment Portfolio Management Summary Report November 2022
Ward:
All Wards
Synopsis of Previous Council Actions:
N/A
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: January 18, 2023
To: Honorable Mayor and City Council Members
From: Barbara Whitehorn, Agency Director of Administrative Services Department: Finance
Subject: Administrative Budget Transfers Report
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California receive and file all listed administrative budget amendments from July 1, 2022, through December 15, 2022.
Background
On May 4, 2022, the Mayor and City Council adopted Ordinance No. MC-1568 which amended section 3.05, in its entirety, of the Municipal Code that pertained to budget transfers. Specifically, the amendment to the ordinance established the nullification of the not to exceed amount of $25,000 per transfer; gave authority to the Director of Finance to approve budget transfers within a department’s personnel budget into their operating budget or from one department into another department; and states that the transfers within a department will not increase or decrease a department's approved budget, nor will transfers between departments in the same fund increase or decrease the approved fund budget. Furthermore, any cumulative amount of more than $5,000 transferred between departments in a 12-month period shall be reported to the Mayor and City Council during the regular Quarterly Report.
Discussion
Budget transfers are the requests that come from departments into Finance to move funds from one account to another after the original budget has been established.
Transfers occur due to a need to correct the department’s originally submitted budget or the moving of funds to accommodate a change in a department’s planned expenditures. When processing these budget transfers, Finance verifies that the budget being moved properly allocates resources based on the strategic objectives and goals set forth by the Mayor and City Council and reflects the priorities of the community.
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processed.
(A) The Real Property Division (and it’s associated budget) was transferred from the Public Works Department (PW) to oversight under the Community and Economic Development (CED) Department.
(B) Salary savings within Finance were transferred into the Human Resources (HR) department to fund the City Employee Appreciation Event. (C) Salary savings within Finance were transferred into the Information Technology (IT) department to fund essential Office 365 training for the IT staff. 2021-2025 Strategic Targets and Goals
Authorization of this file and receive item aligns with three of the adopted 2021-2025 Key Strategic Targets and Goals. Changes to the Municipal Code and requiring Finance report administrative transfers done within the quarter that meet the requirements of the Mayor and City Council helps Improved Operational & Financial Capacity by effectively creating a framework for spending decisions. Focused, Aligned Leadership and Unified Community is met by developing and implementing a community engagement plan – administrative transfers can be made where the community and staff actively sees the need to be met. Improved Quality of Life is met by ensuring that service levels are funded proactively to integrate customer-service orientation and metrics into all City operations.
Fiscal Impact
No fiscal impact to the City.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, receive and file all listed administrative budget amendments from July 1, 2022, through December 15, 2022.
Attachments
Attachment 1 Exhibit A – Administrative Budget Transfers with Explanation
Ward:
All Wards
Synopsis of Previous Council Actions:
December 1, 2021 Mayor and City Council heard the FY 2021/22 1st Quarter Report; Adopted Resolution No. 2021-289 amending the City Reference Date of Transfer Departments Impacted Credit (Decrease) Debit (Increase) (A) 8/3/2022 PW to CED $ (433,666) $ 433,666
(B) 8/31/2022 Finance to HR $ (8,049) $ 8,049
(C) 10/25/2022 Finance to IT $ (20,000) $ 20,000
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of San Bernardino’s FY 2021/22 Operating Budget; and
introduced, read by title only, and waived further reading of Ordinance No. MC-1568, amending section 3.05 of the
Municipal Code pertaining to budget transfers.
May 4, 2022 Mayor and City Council adopted Ordinance No. MC-1568, amending section 3.05 on the Municipal Code.
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Date of Transfer Departments Impacted Credit (Decrease) Debit (Increase) Journal Description 8/3/2022
Public Works to
Community and
Economic Development
$ (433,666) $ 433,666
Transfer of all remaining Real Property Division budget from Public Works (PW) to Community and Economic
Development (CED), as Real Property is now under the
responsibility of CED.
8/31/2022 Finance to Human
Resources $ (8,049) $ 8,049
Transfer of Finance salary savings from vacant Grants
Writer position into Human Resources to fund the City's Employee Appreciation Event.
10/25/2022 Finance to Information
Technology $ (20,000) $ 20,000
Transfer of Finance salary savings from the vacant Budget Division Manager position to cover Office 365 training for Information Technology staff .
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: January 18, 2023
To: Honorable Mayor and City Council Members
From: Barbara Whitehorn, Agency Director of Administrative Services Department: Finance
Subject: Ratify and Approve Acceptance of Award from The California Public Utilities Commission for Local
Agency Technical Assistance Grant
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California,
(1) ratify and approve the acceptance of an award from the California Public Utilities Commission (CPUC) for the Local Agency Technical Assistance (LATA) Grant in the amount of $425,256.14 for 24 months, and
(2) adopt Resolution No. 2023-012 amending the General Fund 2022/23 Budget in the amount of $425,256.14 in both revenue and expenditures.
Background
In August 2022, the California Public Utilities Commission (CPUC) began accepting applications for funding through Local Agency Technical Assistance (LATA) grant to support local governments and tribes in their efforts to expand broadband access and service to unserved/underserved communities throughout the State. This funding supports pre-construction planning work to advance local broadband deployment. The City submitted an application in early September 2022 and received notice of Award on November 22, 2022. The City was given 30 days from award notification to return the acceptance of award package. The award acceptance packaged was submitted to CPUC on December 9, 2022.
Discussion
The LATA grant will fund the development of a needs assessment, a Broadband Strategic Plan, and a community engagement plan for the City of San Bernardino. The Broadband Strategic Plan will outline a strategy that is expected to result in broadband infrastructure projects designed to provide service to unserved or underserved Packet Pg. 866
households and businesses. The broadband infrastructure projects are designed to, upon completion, reliably meet or exceed the Governor’s goal of all Californians having reliable internet at 100 Mbps download and 25 Mbps upload speeds. The project allows for a consultant to assist in the completion of project deliverables to be completed within the granted 24-month timeline.
2021-2025 Strategic Targets and Goals
This project is consistent with Key Target Goals No. 2 Focused, Aligned Leadership and Unified Community, through the development and implementation of a community engagement plan for broadband expansion services in the City of San Bernardino.
Fiscal Impact
There is no net fiscal impact to the General Fund for this project. The FY 2022/23 budget will need to be amended in both revenue and expenditures to recognize $425,256.14 in grant funding.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California,
(1) ratify and approve the acceptance of an award from the California Public Utilities Commission (CPUC) for the Local Agency Technical Assistance (LATA) grant funds in the amount of $425,256.14 for 24-months, and
(2) adopt Resolution No. 2023-012 amending the General Fund 2022/23 Budget in the amount of $425,256.14 in both revenue and expenditures.
Attachments
Attachment 1 – Resolution 2023-012, Budget Amendment
Attachment 2 – LATA Grant Award Package
Attachment 3 – LATA Grant Application
Attachment 4 – City of San Bernardino LATA Award Letterhead Ward:
All Wards
Synopsis of Previous Council Actions:
N/A
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Resolution No. 2023-012
Resolution 2023-012
January 18, 2023