9/24/2025
Boules Ghaly, PE
City of San Bernardino, CA
Via Email [email protected]
Re: Amendment Number 02 for Additional Services REV01 City of San Bernardino, CA
Cross Street Bridge Replacement San
Bernardino, California
IMEG Project Number: 23001453.01 Dear
Boules:
As we discussed, you would like IMEG to provide additional services for the Del Rosa Channel Bridge Replacement at Cross Steet, to extend sidewalk from the bridge to the existing sidewalk, address drainage issues with the existing driveways and improve driveways on east side of the bridge. This amendment also includes structural engineer support provided between May and June of 2025 during construction phase regarding the tie rods, analysis and recommendations per your request.
All other services, terms, and conditions shall remain as stated in our original Agreement dated March 30, 2023.
Compensation
We propose to provide the services described above for a fixed fee of $ 20,000. Reimbursable expenses remain as stated in our original Agreement.
Description Fee
Structural Engineering $7,500
Civil Engineering $12,500
Total $20,000
Closing
We will begin our services following acceptance of this Amendment for Services. Acceptance may be conveyed via email or by signing this offer and returning it to our office.
Notwithstanding the foregoing sentence, if you or members of your firm engage IMEG for services for the referenced project, either verbally or by actions that imply acceptance of this Proposal, such as providing drawings, submitting questions, requesting engineering information, etc., without returning a signed copy of this Proposal, it is expressly agreed that acceptance of all terms and conditions of this Amendment will be implied and contractually binding.
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IMEG Consultants Corp.
Keyner Mayer PE
[email protected]
Accepted: City of San Bernardino, CA
Boules Ghaly, PE [email protected]
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AMENDMENT NO. 1 TO
DESIGN SERVICES AGREEMENT
WITH IMEG
This Amendment No. 1 to the Design Services Agreement is made and entered into as of October 18, 2023 ("Effective Date"), by and between the City of San Bernardino, a charter city and municipal corporation ("City") and IMEG, a California corporation ("Designer"). City and Designer are sometimes referred to herein individually as a "Party" and collectively as "Parties."
RECITALS
A. WHEREAS, the City and the Designer have entered into an agreement, dated, March 30, 2023 , for the professional design of the Cross Street Bridge Rehabilitation Project (the "Original Agreement").
B. WHEREAS, the Parties now desire to amend the Original Agreement in order to revise the scope of work and to provide compensation for additional services.
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants, conditions, and promises contained in this Amendment No. 1 and the Original Agreement, as previously amended, the Parties mutually agree as follows:
AGREEMENT
1. Incorporation of Recitals. The recitals listed above are true and correct and are hereby incorporated herein by this reference.
2. Services. The Services, as that term is defined in the Original Agreement, are hereby amended to include the revised scope of services related to the Cross Street Bridge Rehabilitation Project. The revised scope of services is more fully described in Exhibit "A-1", attached hereto to this Amendment No. 1 and incorporated herein by this reference.
3. Compensation. The total not to exceed compensation amount shall be increased by One Hundred and One Thousand Four Hundred and Forty Dollars and Zero Cents ($101,440 ) increasing the total not to exceed compensation amount from Eighty-Eight Thousand Seven Hundred and Fifty Dollars and Zero Cents ($88,750.00) to One Hundred and Ninety Thousand One Hundred and Ninety Dollars and Zero Cents ($190,190.00).
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4. Full Force. Except as amended by this Amendment No. 1, all provisions of the Original Agreement, as previously amended, 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 No. 1.
5. Electronic Transmission. A manually signed copy of this Amendment No. 1 which is transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Amendment No. 1 for all purposes . This Amendment No. 1 may be signed using an electronic signature.
6. Counterparts. This Amendment No. 1 may be signed in counterparts, each of which shall constitute an original.
[SIGNATURES ON FOLLOWING PAGE]
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SIGNATURE PAGE TO
AMENDMENT NO. 1 TO
DESIGN SERVICES AGREEMENT
WITH IMEG
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 2 on the Effective Date first herein above written.
CITY OF SAN BERNARDINO DESIGNER
APPROVED BY: IMEG
Charles A. Montoya,
City Manager Signature
APPROVED AS TO FORM: Name
Best Best & Krieger LLP
City Attorney
Title
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EXHIBIT A-1
REVISED SCOPE OF SERVICES
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PLANNING/DESIGN PHASE SERVICES
Phase 1:
1. Perform a topographic survey of the bridge and the channel.
2. Geotechnical investigation of the site including two borings, one at each abutment. For an additional fee provide:
3. Expedited laboratory testing.
4. L-Pile design/analysis
5. Assessment of the existing bridge: Perform an in-depth inspection of the bridge superstructure to include Ground Penetrating Radar (GPR) testing of the concrete deck, ultrasonic thickness measurements of the steel beams, and measurements of the bridge deck and steel beams adequate to perform load rating of the superstructure.
Phase 2:
1. Perform load rating of the superstructure to determine its load carrying capacity. The superstructure will be rated to meet HL-93 AASHTO loads.
2. Bridge Replacement Plans (City of San Bernardino Public Works) a. Title Sheet
b. Demolition Plan
c. Superstructure Design (Including Girder Layout, Details, and Section) d. General Plan, Elevation, and Section
e. Railing Layout and Details
f. Grading Plan
g. Utility Plan
h. Details Sheet
i. Erosion Control Plan
3. 8” Water Line Replacement Plans (San Bernardino Metropolitan Water District) a. Title Sheet
b. General Notes Sheet
c. Plan and Profile Sheet
4. Prepare (1) Engineer’s Opinion of Probable Construction Costs
5. Prepare applicable technical specifications formatted per Agency requirements.
6. Address Agency plan check review comments (2 rounds budgeted)
7. Attend design coordination meetings, as required (8 one-hour meetings budgeted)
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BID/NEGOTIATION PHASE SERVICES
1. Attend Prebid meeting, if necessary.
2. Respond to contractor questions.
3. Prepare addenda information as required.
CONSTRUCTION PHASE SERVICES
1. Attend preconstruction meeting, if necessary.
2. Contract administration related to IMEG scope of work including:
a. Answer contractor questions and Requests for Information (RFIs).
3. Review Project submittals for items requested in the contract documents.
4. Conduct three (3) site visits during construction and one (1) final job site observation at the end of the construction period and prepare construction observation report(s).
5. Prepare record documents based upon contractor-supplied as-installed documents, with no additional verification.
ASSUMPTIONS
1. The project will be awarded as a single prime contract for construction. Phased design and/or issue of early documents are not required.
2. The City will distribute bidding documents and prepare and administer the contract, including front end specifications, for construction.
3. San Bernardino County Flood Control District will accept the replacement of Cross Street bridge at its current elevation with the understanding that vertical clearance requirements (11’ from channel bed to bridge soffit) of the future channel improvements will not be satisfied.
4. The existing gas line will be relocated by Southern California Gas Company prior to construction of the new bridge. A gas utility plan prepared by IMEG will not be required.
5. The Utility Plan is limited to affected sanitary sewer facilities and to coordinate the location of the new 8” water line. A separate plan set will be prepared for the new 8” water line per San Bernardino Municipal Water Department (SBMWD) standards and requirements.
6. The new 8” water line alignment will be based on the location of water valves determined by SBMWD which will be based on the limit of construction determined by IMEG.
7. PS&E deliverables will be submitted to the City’s contracted representative electronically.
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8. The City’s contracted representative will coordinate and submit deliverables for the processing and approvals of applicable construction permits.
9. Agency review is limited to City of San Bernardino Public Works, SBMWD, and San Bernardino County Flood Control District. Changes to the plans as a result of reviews by agencies not listed above will be prepared under a separate agreement.
10. If required by the City, an ADA compliant path-of-travel will be provided and limited to the new bridge.
11. The new bridge will not be required to be designed to Caltrans standard width.
12. A Water Quality Management Plan is not anticipated and excluded.
13. A hydrology and hydraulic analysis for the existing channel is excluded.
14. Drainage studies are excluded.
15. All services not listed in scope of services above are excluded.
COMPENSATION
Services Fee
Topographic Survey $15,000
Geotechnical $17,400
Planning/Design Phase $125,000
Bid/Negotiation Phase $5,200
Construction Phase $10,300
Contingency $17,290
Total Fixed Fee $190,190
PROJECT CONTINGENCY
1. IMEG will include 10% contingency to the above-mentioned service fees. Reimbursable expenses remain as stated in our original agreement.
SERVICES NOT INCLUDED
1. Revising IMEG design documents as a result of equipment lead times or supply chain delays.
2. Revisions as a result of value engineering or negotiating construction cost/scope with contractors after documents are complete.
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1 CITY OF SAN BERNARDINO
DESIGN SERVICES AGREEMENT
1. PARTIES AND DATE.
This Agreement is made and entered into as March 30th, 2023 by and between the City of San Bernardino, a charter city and municipal corporation organized and operating under the laws of the State of California, with its principal place of business at Vanir Tower, 290 North D Street, San Bernardino, California 92401 (“City”), and IMEG, a California Corporation with its principal place of business at 901 Via Piemonte, Suite 400, Ontario, Ca 91764 (hereinafter referred to as “Designer”). City and Designer are sometimes individually referred to herein as “Party” and collectively as “Parties.”
2. RECITALS.
2.1 City. City is a municipal corporation organized under the laws of the State of California, with power to contract for services necessary to achieve its purpose.
2.2 D esigner . Designer desires to perform and assume responsibility for the provision of certain professional design services required by the City on the terms and conditions set forth in this Agreement. Designer warrants that it is fully licensed, qualified, and willing to perform the services required by this Agreement; provided, however, that if Designer is a corporation or other organization, the Project Designer designated pursuant to Section 3.2, and not the Designer itself, shall be fully licensed to practice as an architect and/or engineer in the State of California.
2.3 Pr oject . City desires to engage Designer to render such services for the Cross Street Bridge Rehabilitation ("Project") as set forth in this Agreement.
3. TERMS
3.1 Employment of Designer.
3.1.1 Scope of Services . Designer promises and agrees to furnish to City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional design and related services necessary for the full and adequate completion of the Project consistent with the provisions of this Agreement (hereinafter referred to as “Services”). The Services are more particularly described throughout this Agreement, including Exhibit “A” attached hereto and incorporated herein by reference. Al l Services shall be subject to, and performed in accordance with, this Agreement, any exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. All Services performed by Designer shall be subject to the sole and discretionary approval of the City, which approval shall not be unreasonably withheld.
3.1.2 Ter
m . The term of this Agreement shall be from March 30th 2023 to March 30th 2024, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines.
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2 3.2 Project Designer; Key Personnel.
3.2.1 Project Designer . Designer shall name a specific individual to act as Project Designer, subject to the approval of City. Designer hereby designates John M. Thompson (License No. C82557) to act as the Project Designer for the Project. The Project Designer shall:
(1) maintain oversight of the Services; (2) have full authority to represent and act on behalf of the Designer for all purposes under this Agreement; (3) supervise and direct the Services using his or her best skill and attention; (4) be responsible for the means, methods, techniques, sequences and procedures used for the Services; (5) adequately coordinate all portions of the Services; and (6) act as principal contact with City and all contractors, consultants, engineers and inspectors on the Project. Any change in the Project Designer shall be subject to the City’s prior written approval, which approval shall not be unreasonably withheld. The new Project Designer shall be of at least equal competence as the prior Project Designer . In the event that City and Designer cannot agree as to the substitution of a new Project Designer , City shall be entitled to terminate this Agreement for cause.
3.2.2 K ey Personnel. In addition to the Project Designer , Designer has represented to the City that certain additional key personnel, engineers and consultants will perform the Services under this Agreement. Should one or more of such personnel, engineers or consultants become unavailable, Designer may substitute others of at least equal competence upon written approval of the City. In the event that City and Designer cannot agree as to the substitution of key personnel, engineers or consultants, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel, engineers or consultants who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the Designer at the request of the City. The key additional personnel, engineers and consultants for performance of this Agreement are as follows: John M. Thompson, Ci vil Client Executive, C82557.
3.3 Hiring of Consultants and Personnel.
3.3.1 Right to Hire or Employ. Designer shall have the option, unless City objects in writing after notice, to employ at its expense architects, engineers, experts or other consultants qualified and licensed to render services in connection with the planning and/or administration of the Project, and to delegate to them such duties as Designer may delegate without relieving Designer from administrative or other responsibility under this Agreement. Designer shall be responsible for the coordination and cooperation of Designer ’s architects, engineers, experts or other consultants. All consultants, including changes in consultants, shall be subject to approval by City in its sole and reasonable discretion. Designer shall notify City of the identity of all consultants at least fourteen (14) days prior to their commencement of work to allow City to review th eir qualifications and approve to their participation on the Project in its sole and reasonable discretion.
3.3.2 Q
ualification and License. All architects, engineers, experts and other consultants retained by Designer in performance of this Agreement shall be qualified to perform the Services assigned to them, and shall be licensed to practice in their respective professions, where required by law.
3.3.3 S
tandards and Insurance. All architects, engineers, experts and other consultants hired by Designer shall be required to meet all of the same standards and insurance DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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3 requirements set forth in this Agreement, unless other standards or requirements are approved by the City in writing. Unless changes are approved in writing by the City, Designer’s agreements with its consultants shall contain a provision making them subject to all provisions stipulated in this Agreement.
3.3.4 Assignments or Staff Changes. Designer shall promptly obtain written City approval of any assignment, reassignment or replacement of such architects, engineers, experts and consultants, or of other staff changes of key personnel working on the Project. As provided in the Agreement, any changes in Designer ’s consultants and key personnel shall be subjec t to approval by City.
3.3.5 D
raftsman and Clerical Support. Draftsmen and clerical personnel shall be retained by Designer at Designer’s sole expense.
3.4 Standard of Care.
3.4.1 Standard of Care. Designer shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals qualified to perform the Services in the same discipline in the State of California, and shall be responsible to City for damages sustained by the City and delays to the Project as specified in the indemnification provision of this Agreement. Without limiting the foregoing, Designer shall be fully responsible to the City for any increased costs incurred by the City as a result of any such delays in the design or construction of the Project. Designer represents and maintains that it is skilled in the professional calling necessary to perform the Services. Designer warrants and represents that all of its employees, architects, engineers, experts and other consultants shall have sufficient skill and experience to perform the Services assigned to them. Finally, Designer represents that it, its employees, architects, engineers, experts and other consultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services assigned to or rendered by them and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Designer shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Designer’s failure to comply with the standard of care provided for herein.
3.4.2 P
erformance of Employees . Any employee or consultant who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee or consultant who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Designer and shall not be re-employed to perform any of the Services or to work on the Project.
3.5 Laws and Regulations.
3.5.1 Knowledge and Compliance. Designer shall keep itself fully informed of and in compliance with all applicable local, state and federal laws, rules and regulations in any manner affecting the performance of the Services or the Project, and shall give all notices required of the Designer b y law. Designer shall be liable, pursuant to the standard of care and indemnification provisions of this Agreement, for all violations of such laws and regulations in connection with its Services. If the Designer performs any work knowing it to be contrary to such laws, rules and regulations, Designer shall be solely responsible for all costs arising therefrom.
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4 Designer shall defend, indemnify and hold City, its officials, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.
3.5.2 Drawings and Specifications . Designer shall cause all drawings and specifications to conform to any applicable requirements of federal, state and local laws, rules and regulations, including the Uniform Building Code, in effect as of the time the drawings and specifications are prepared or revised during the latest phase of the Services described in Exhibit “A” attached hereto. Any significant revisions made necessary by changes in such laws, rules and regulations after this time may be compensated as Additional Services which were not known or reasonably should not have been known by Designer. Designer shall cause the necessary copies of such drawings and specifications to be filed with any governmental bodies with approval jurisdiction over the Project, in accordance with the Services described in Exhibit “A” attached hereto. For the preparation of all such drawings and specifications, the Designer shall use Computer Aided Design Drafting (“CADD”) (e.g., AutoCAD) or other technology acceptable to the Designer and City.
3.5.3 A
mericans with Disabilities Act . Designer will us e its best professional efforts to interpret all applicable federal, state and local laws, rules and regulations with respect to access, including those of the Americans with Disabilities Act (“ADA”). Designer shall inform City of the existence of inconsistencies of which it is aware or reasonably should be aware between federal and state accessibility laws, rules and regulations, as well as any other issues which are subject to conflicting interpretations of the law, and shall provide the City with its interpretation of such inconsistencies and conflicting interpretations. Unless Designer brings such inconsistencies and conflicting interpretations to the attention of the City and requests City’s direction on how to proceed, the Designer’s interpretation of such inconsistencies and conflicting interpretations shall be the sole responsibilit y and liability of Designer , and the Designer shall correct all plans, specifications and other documents prepared for the Project at no additional cost if its interpretations are shown to be incorrect. In the event that the Designer request’s City’s direction on how to proceed with respect to any inconsistent and/or conflicting interpretation, the Designer shall be responsible to the City only pursuant to the indemnification provisions of this Agreement.
3.5.4 P
ermits, Approvals and Authorizations . Designer shall provide City with a list of all permits, approvals or other authorizations required for the Project from all federal, state or local governmental bodies with approval jurisdiction over the Project. Designer shall then assist the City in obtaining all such permits, approvals and other authorizations. The costs of such permits, approvals and other authorizations shall be paid by the City.
3.5.5 W ater Quality Management and Compliance.
(a) Compliance with Water Quality Laws, Ordinances and Regulations.
Designer shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.); the California Porter-Cologne Water Quality Control Act (Cal Water Code §§ 13000 -14950); and any and all regulations, policies, or permits issued pursuant to any such authority. Designer shall additionally comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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5 jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges.
(b) Standard of Care. Designer warrants that all employees and subcontractors shall have sufficient skill and experience to perform the work assigned to them without impacting water quality in violation of the laws, regulations and policies described in Sections 3.5.5(a) of this Agreement. Designer further warrants tha t it, its employees and subcontractors will receive adequate training, as determined by the City, regarding these requirements as they may relate to the Services.
(c) L iability for Non -compliance.
(i) Indemnity: Failure to comply with laws, regulations, and ordinances listed in Sections 3.5.5(a) of this Agreement is a violation of federal and state law.
Notwithstanding any other indemnity contained in this Agreement, Designer agrees to indemnify and hold harmless the City, its officials, officers, agents, employees and authorized volunteers from and against any and all claims, demands, losses or liabilities of any kind or nature which the City, its officials, officers, agents, employees and authorized volunteers may sustain or incur for noncompliance with the laws, regulations, and ordinances listed above, arising out of or in connection with the Services, except for liability resulting from the sole established negligence, willful misconduct or active negligence of the City, its officials, officers, agents, employees or authorized volunteers.
(ii) D
efense: City reserves the right to defend any enforcement action or civil action brought against the City for Designer’s failure to comply with any applicable water quality law, regulation, or policy. Designer hereby agrees to be bound by, and to reimburse the City for the costs associated with, any settlement reached between the City and the relevant enforcement entity.
(iii) D
amages : City may seek damages from Designer for delay in completing the Services caused by Designer’s failure to comply with the laws, regulations and policies described in Section 3.5.5(a) of this Agreement, or any other relevant water quality law, regulation, or policy.
3.5.6 A
ir Quality.
(a) Compliance with Air Quality Laws, Ordinances, and Regulations .
Contractor must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the California Air Resources Board (CARB). Contractor shall specifically be aware of the CARB limits and requirements’ application to “portable equipment”, which definition is considered by CARB to include any item of equipment with a fuel -powered engine. Contractor shall indemnify City against any fines or penalties imposed by CARB or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Contractor, its subcontractors, or others for whom Contractor is responsible under its indemnity obligations provided for in this Agreement.
3.6 Independent Contractor.
3.6.1 Control and Payment of Subordinates . City retains Designer on an independent contractor basis and Designer is not an employee of City. Designer is not an DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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6 employee for state tax, federal tax or any other purpose, and is not entitled to the rights or benefits afforded to City’s employees. Any additional personnel performing the Services under this Agreement on behalf of Designer shall also not be employees of City, and shall at all times be under Designer’s exclusive direction and control. Designer shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Designer shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance.
3.7 Schedule of Services.
3.7.1 Designer Services. Designer shall fully and adequately complete the Services described in this Agreement and in Exhibit “A” attached hereto and incorporated herein by reference.
3.7.2 Ti mely Performance Standard. Designer shall perform all Services hereunder as expeditiously as is consistent with professional skill and care, as well as the orderly progress of the Project work so as not to be the cause, in whole or in part, of delays in the completion of the Project or in the achievement of any Project milestones, as provided herein.
Specifically, Designer shall perform its Services so as to allow for the full and adequate completion of the Project within the time required by the City and within any completion schedules adopted for the Project. Designer agrees to coordinate with City’s staff, contractors and consultants in the performance of the Services, and shall be available to City’s staff, contractors and consultants at all reasonable times.
3.7.3 P
erformance Schedule. Designer shall prepare an estimated time schedule for the performance of Designer’s Services, to be adjusted as the Project proceeds.
Such schedule shall be subject to the City’s review and approval, which approval shall not be unreasonably withheld, and shall include allowances for periods of time required for City’s review and approval of submissions, and for approvals of authorities having jurisdiction over Project approval and funding. If City and Designer cannot mutually agree on a performance schedule, City shall have the authority to immediately terminate this Agreement. The schedule shall not be exceeded by Designer without the prior written approval of City. If the Designer ’s Services are not completed within the time provided by the agreed upon performance schedule, or any milestones established therein, it is understood, acknowledged and agreed that the City will suffer damage for which the Designer will be responsible pursuant to the indemnification provision of this Agreement.
3.7.4 E
xcusable Delays. Any delays in Designer ’s work caused by the following shall be added to the time for completion of any obligations of Designer: (1) the actions of City or its employees; (2) the actions of those in direct contractual relationship with City; (3) the actions of any governmental agency having jurisdiction over the Project; (4) the actions of any parties not within the reasonable control of the Designer; and (5) Force Majeure Event . Neither the City nor the Designer shall be liable for damages, liquidated or otherwise, to the other on account of such delays. Such a non-compensable adjustment shall be Designer’s sole and exclusive remedy for such delays and the Designer will not receive an adjustment to the contract price or any other compensation. A Force Majeure Event shall mean an event that materially affects a party’s performance and is one or more of the following: (1) Acts of God or other natural disasters occurring at the project site; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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7 the issuance of permits or approvals by governmental authorities that are required for the work); (4) pandemics, epidemics or quarantine restrictions; and (5) strikes and other organized labor action occurring at the project site and the effects thereof on the work, only to the extent such strikes and other organized labor action are beyond the control of Designer and its subcontractors, of every tier, and to the extent the effects thereof cannot be avoided by use of replacement workers. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of the City in its capacity as a municipal authority.
3.7.5 Request for Excusable Delay Credit. The Designer shall, within fifteen (15) calendar days of the beginning of any excusable delay, notify the City in writing of the causes of delay (unless City grants in writing a further period of time to file such notice prior to the date of final payment under the Agreement). City will then ascertain the facts and the extent of the delay, and grant an extension of time for completing the Services when, in its sole judgment, the findings of fact justify such an extension. The City’s findings of fact thereon shall be final and conclusive on the parties. Extensions of time shall apply only to that portion of the Services affected by the delay and shall not apply to other portions of the Services not so affected. The sole remedy of Designer for extensions of time shall be an extension of the performance time at no cost to the City. If Additional Services are required as a result of an excusable delay, the parties shall mutually agree thereto pursuant to the Additional Services provision of this Agreement . Should Designer make an application for an extension of time, Designer shall submit evidence that the insurance policies required by this Agreement remain in effect during the requested additional period of time.
3.8 Additional Designer Services.
3.8.1 Request for Services. At City’s request, Designer may be asked to perform services not otherwise included in this Agreement, not included within the basic services listed in Exhibit “A” attached hereto, and/or not customarily furnished in accordance with generally accepted design practice.
3.8.2 De finition . As used herein, “Additional Services” mean: (1) any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary for the Designer to perform at the execution of this Agreement; or (2) any work listed as Additional Services in Exhibit “A” attached hereto. Designer shall not perform, nor be compensated for, Additional Services without prior written authorization from City and without an agreement between t he City and Designer as to the compensation to be paid for such services. City shall pay Designer for any approved Additional Services, pursuant to the compensation provisions herein, so long as such services are not made necessary through the fault of Designer pursuant to the indemnification provision of this Agreement.
3.8.3 E xamples of Additional Services. Such Additional Services shall not include any redesign or revisions to drawings, specifications or other documents when such revisions are necessary in order to bring such documents into compliance with applicable laws, rules, regulations or codes of which Designer was aware or should have been aware pursuant to the laws and regulations provision of this Agreement above. Such Additional Services may include, but shall not be limited to:
(a) S
eparately Bid Portions of Project. Plan preparation and/or administration of work on portions of the Project separately bid.
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8 (b) Furniture and Interior Design. Assistance to City, if requested, for the selection of moveable furniture, equipment or articles which are not included in the Construction Documents.
(c) Fault of Contractor. Services caused by delinquency, default or insolvency of contractor, or by major defects in the work of the contractor, provided that any such services made necessary by the failure of Designer to detect and report such matters when it reasonably should have done so shall not be compensated. (d) Inconsistent Approvals or Instructions . Revisions in drawings, specifications or other documents when such revisions are inconsistent with written approvals or instructions previously given and are due to causes beyond the control of Designer. (e) Legal Proceedings. Serving as an expert witness on City's behalf or attending legal proceedings to which the Designer is not a party. (f) Damage Repair. Supervision of repair of damages to any structure. (g) Extra Environmental Services. Additional work required for environmental conditions (e.g. asbestos or site conditions) not already contemplated within the Designer's services for the Project.
3.9 City Responsibilities. City’s responsibilities shall include the following:
3.9.1 Data and Information. City shall make available to Designer all necessary data and information concerning the purpose and requirements of the Project, including scheduling and budget limitations, objectives, constraints and criteria. As part of the budget limitation information, the City shall provide the Designer with a preliminary construction budget (“City’s Preliminary Construction Budget”).
3.9.2 P
roject Survey. If required pursuant to the scope of the Project and if requested by Designer, City shall furnish Designer with, or direct Designer to procure at City’s expense, a survey of the Project site prepared by a registered surveyor or civil engineer, any other record documents which shall indicate existing structures, land features, improvements, sewer, water, gas, electrical and utility lines, topographical information and boundary dimensions of the site, and any other such pertinent information.
3.9.3 B id Phase. Distribute Construction Documents to bidders and conduct the opening and review of bids for the Project.
3.9.4 Tes ting. Retain consultant(s) to conduct chemical, m echanical, soils, geological or other tests required for proper design of the Project, and furnish such surveys, borings, test pits, and other tests as may be necessary to reveal conditions of the site which must be known to determine soil condition or to ensure the proper development of the required drawings and specifications.
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equired Inspections and Tests. Retain consultant(s) to conduct materials testing and inspection or environmental/hazardous materials testing and inspection pursuant to any applicable laws, rules or regulations.
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9 3.9.6 Fees of Reviewing or Licensing Agencies. Directly pay or reimburse the payment of all fees required by any reviewing or licensing agency, or other agency having approval jurisdiction over the Project.
3.9.7 Cit y’s Representative . The City hereby designates Charles E. McNeely, or his or her designee, to act as its representative for the performance of this Agreement (“City’s Representative”). City’s Representative shall have the power to act on behalf of the City for all purposes under this Contract. Representative hereby designates Daniel Hernandez, Director of Public Works, or his or her designee, as the City’s contact for the implementation of the Services hereunder. Contractor shall not accept direction or orders from any person other than the City’s Representative or his or her designee.
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eview and Approved Documents. Review all documents submitted by Designer, including change orders and other matters requiring approval by the City Council or other officials. City shall adv ise Designer of decisions pertaining to such documents within a reasonable time after submission, so as not to cause unreasonable delay as provided in the excusable delay provisions of this Agreement above.
3.10 Compensation.
3.10.1 Designer’s Compensation for Basic Services. City shall pay to Designer , for the performance of all Services rendered under this Agreement, the total not to exceed amount of Eighty Eight Thousand Seven Hundred and Fifty Dollars ($88,750.00) (“Total Compensation”).
This Total Compensation amount shall be based upon, and may be adjusted according to, the fee schedule and related terms and conditions attached hereto as Exhibit “B” and incorporated herein by reference. The Total Compensation, as may be adjusted upon mutual agreement, shall constitute complete and adequate payment for Services under this Agreement.
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ayment for Additional Services . At any time during the term of this Agreement, City may request that Designer perform Additional Services. As used herein, Additional Services means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement . Any additional work in excess of this amount must be approved by the City. If authorized, such Additional Services will be compensated at the rates and in the manner set forth in Exhibit “C” attached hereto and incorporated herein by reference, unless a flat rate or some other form of compensation is mutually agreed upon by the parties. If City requires Designer to hire consultants to perform any Additional Services, Designer shall be compensated therefore at the rates and in the manner set forth in Exhibit “C” attached hereto and incorporated herein by reference, unless a flat rate or some other form of compensation is mutually agreed upon by the parties. City shall have the authority to review and approve the rates of any such consultants. In addition, Designer shall be reimbursed for any expenses incurred by such consultants pursuant to the terms and conditions of Section 3.10.3.
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eimbursable Expenses. Reimbursable expenses are in addition to compensation for the Services and Additional Services. Designer shall not be reimbursed for any expenses unless authorized in writing by City, which approval may be evidenced by inclusion in Exhibit “C” attached hereto. Such reimbursable expenses shall include only those expenses which are reasonably and necessarily incurred by Designer in the interest of the Project. Designer shall be required to acquire prior written consent in order to obtain reimbursement for the following: (1) extraordinary transportation expenses incurred in connection with the Project; (2) out-of-town travel expenses incurred in connection with the Project; (3) fees paid for securing DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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10 approval of authorities having jurisdiction over the Project; (4) bid document duplication costs in excess of $1,000; and (5) other costs, fees and expenses in excess of $1,000.
3.10.4 Payment to Designer. Designer’s compensation and reimbursable expenses shall be paid by City to Designer no more often than monthly. Such periodic payments shall be made based upon the percentage of work completed, and in accordance with the phasing and funding schedule provided in Exhibit “B” and the compensation rates indicated in Exhibit “C” attached hereto and incorporated herein by reference. In order to receive payment, Designer shall present to City an itemized statement which indicates Services performed, percentage of Services completed, method for computing the amount payable, and the amount to be paid at the address listed in Section 3.29. The statement shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement, as well as those expenses for which reimbursement is requested for that statement period. The amount paid to Designer shall never exceed the percentage amounts authorized by the phasing and funding schedule located in Exhibit “B” attached hereto. City shall, within thirty (30) days of receiving such statement, review the statement and pay all approved charges thereon pursuant to the provisions of Civil Code Section 3320. Disputed amounts shall be resolved by the parties in a mutually agreeable manner.
Payments made for Additional Services shall be made in installments, not more often than monthly, proportionate to the degree of completion of such services or in such other manner as the parties shall specify when such services are agreed upon, and in accordance with any authorized fee or rate schedule. In order to receive payment, Designer shall present to City an itemized statement which indicates the Additional Services performed, pe rcentage of Additional Services completed, method for computing the amount payable, and the amount to be paid. The statement shall describe the amount of Additional Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. City shall, within thirty (30) days of receiving such statement, review the statement and pay all approved charges thereon pursuant to the provisions of Civil Code Section 3320. Disputed amounts shall be resolved by the parties in a mutually agreeable manner.
Upon cancellation or termination of this Agreement, Designer shall be compensated as set forth in the termination provision herein.
3.10.5 Withholding Payment to Designer. The City may withhold payment, in whole or in part, to the extent reasonably necessary to protect the City from claims, demands, causes of action, costs, expenses, liabilities, losses, damages, or injuries of any kind to the extent arising out of or caused by the negligence, recklessness, or willful misconduct protected under the indemnification provisions of this Agreement. Failure by City to deduct any sums from a progress payment shall not constitute a waiver of the City’s right to such sums. The City may keep any moneys which would otherwise be payable at any time hereunder and apply the same, or so much as may be necessary therefor, to the payment of any expenses, losses, or damages as determined by the City, incurred by the City for which Designer is liable under the Agreement or state law. Payments to the Designer for compensation and reimbursable expenses due shall not be contingent on the construction, completion or ultimate success of the Project. Payment to the Designer shall not be withheld, postponed, or made contingent upon receipt by the City of offsetting reimbursement or credit from parties not within the Designer’s reasonable control.
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revailing Wages . Designer is aware of the requirements of California Labor Code Sections 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., (“Prevailing Wage Laws”), which require the payment of prevailing DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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11 wage rates and the performance of other requirements on certain “public works” and “maintenance” projects. If the Services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Designer agrees to fully comply with and to require its consultants to fully comply with such Prevailing Wage Laws. City shall provide Designer with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement.
Designer shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Designer’s principal place of business and at the Project site.
Designer shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure of the Designer or its consultants to comply with the Prevailing Wage Laws . It shall be mandatory upon the Designer and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1) . The requirement to submit certified payroll records directly to the Labor Commissioner under Labor Code section 1771.4 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Section 1771.4.
3.10.7 Registration. If the Services are being performed as part of an applicable “public works” or “maintenance” project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Designer and all subconsultants performing such Services must be registered with the Department of Industrial Relations. Designer shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. Notwithstanding the foregoing, the contractor registration requirements mandated by Labor Code Sections 1725.5 and 1771.1 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Sections 1725.5 and 1771.1.
3.10.8 Labor
Compliance. This Project may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Designer’s sole responsibility to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Industrial Relations against Designer or any subcontractor that affect Designer’s performance of Services, including any delay, shall be Designer’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Designer caused delay and shall not be compensable by the City. Designer shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Designer or any subcontractor.
3.11 Notice to Proceed.
Designer shall not proceed with performance of any Services under this Agreement unless and until the City provides a written notice to proceed.
3.12 Termination, Suspension and Abandonment.
3.12.1 Grounds for Termination; Designer’s Termination for Cause. City hereby reserves the right to suspend or abandon, at any time and for any reason, all or any portion of the Project and the construction work thereon, or to terminate this Agreement at any time with or DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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12 without cause. Designer shall be provided with at least seven (7) days advanced written notice of such suspension, abandonment or termination. In the event of such suspension, abandonment or termination, Designer shall be paid for Services and reimbursable expenses rendered up to the date of such suspension, abandonment or termination, pursuant to the schedule of payments provided for in this Agreement, less any claims against or damages suffered by City as a result of the default, if any, by Designer . Designer hereby expressly waives any and all claims for damages or compensation arising under this Agreement, except as set forth herein, in the event of such suspension, abandonment or termination. Designer may terminate this Agreement for substantial breach of performance by the City such as failure to make payment to Designer as provided in this Agreement.
3.12.2 City’s Suspension of Work. If Designer’s Services are suspended by City, City may require Designer to resume such Services within ninety (90) days after written notice from City. When the Project is resumed, the Total Compensation and schedule of Services shall be equitably adjusted upon mutual agreement of the City and Designer.
3.12.3 D ocuments and Other Data. Upon suspension, abandonment or termination, Designer shall provide to City all preliminary s tudies, sketches, working drawings, specifications, computations, and all other Project Documents, as defined below, to which City would have been entitled at the completion of Designer’s Services under this Agreement. Upon payment of the amount required to be paid to Designer pursuant to the termination provisions of this Agreement, City shall have the rights, as provided in this Agreement hereinafter, to use such Project Documents prepared by or on behalf of Designer under this Agreement. Designer shall make such documents available to City upon request and without additional compensation other than as may be approved as a reimbursable expense.
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mployment of other Designer s. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.
3.13 Ownership and Use of Documents; Confidentiality.
3.13.1 Ownership. All plans, specifications, original or reproducible transparencies of working drawings and master plans, preliminary sketches, design presentation drawings, structural computations, estimates and any other documents prepared pursuant to this Agreement, including, but not limited to, any other works of authorship fixed in any tangible medium of expression such as writings, physical drawings and data magnetically or otherwise recorded on computer diskettes (hereinafter referred to as the “Project Documents”) shall be and remain the property of City. Although the official copyright in all Project Documents shall remain with the Designer or other applicable subcontractors or consultants, the Project Documents shall be the property of City whether or not the work for which they were made is executed or completed. Within thirty (30) calendar days following completion of the Project, Designer shall provide to City copies of all Project Documents required by City. In addition, Designer shall retain copies of all Project Documents on file for a minimum of fifteen (15) years following completion of the Project, and shall make copies available to City upon the payment of reasonable duplication costs. Before destroying the Project Documents following this retention period, Designer shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.
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13 3.13.2 Right to Use. Designer grants to City the right to use and reuse all or part of the Project Documents, at City’s sole discretion and with no additional compensati on to Designer, for the following purposes:
(a) The construction of all or part of this Project.
(b) The repair, renovation, modernization, replacement, reconstruction or expansion of this Project at any time;
(c) The construction of another project by or on behalf of the City for its ownership and use;
City is not bound by this Agreement to employ the services of Designer in the event such documents are used or reused for these purposes. City shall be able to use or reuse the Project Documents for these purposes without risk of liability to the Designer or third parties with respect to the condition of the Project Documents, and the use or reuse of the Project Documents for these purposes shall not be construed or interpreted to waive or limit City’s right to recover for latent defects or for errors or omissions of the Designer.
Any use or reuse by City of the Project Documents on any project other than this Project without employing the services of Designer shall be at City’s own risk with respect to third parties.
If City uses or reuses the Project Documents on any project other than this Project, it shall remove the Designer’s seal from the Project Documents and hold harmless Designer and its officers, directors, agents and employees from claims arising out of the negligent use or re -use of the Project Documents on such other project.
3.13.3 License. This Agreement creates a non -exclusive and perpetual license for City to copy, use, modify or reuse any and all Project Documents and any intellectual property rights therein. Designer shall require any and all subcontractors and consultants to agree in writing that City is granted a non- exclusive and perpetual license for the work of such subcontractors or consultants performed pursuant to this Agreement.
3.13.4 R ight to License. D esigner represents and warrants that Designer has the legal right to license any and all copyrights, designs and other intellectual property embodied in the Project Documents that Designer prepares or causes to be prepared pursuant to this Agreement. Des igner shall indemnify and hold City harmless pursuant to the indemnification provisions of this Agreement for any breach of this Section. Designer makes no such representation and warranty in regard to previously prepared designs, plans, specifications, studies, drawings, estimates or other documents that were prepared by design professionals other than Designer and provided to Designer by City.
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onfidentiality . All Project Documents, either created by or provided to Designer in connection with the perfor mance of this Agreement, shall be held confidential by Designer to the extent they are not subject to disclosure pursuant to the Public Records Act. All Project Documents shall not, without the written consent of City, be used or reproduced by Designer for any purposes other than the performance of the Services. Designer shall not disclose, cause or facilitate the disclosure of the Project Documents to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Designer which is otherwise known to Designer or is generally known, or has become known, to the related industry shall be deemed confidential. Designer shall not use City’s name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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14 magazine, trade paper, newspaper, television or radio production or other similar medium without the written consent of City.
3.14 Indemnification.
3.14.1 To the fullest extent permitted by law, Designer shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Designer , its officials, officers, employees, subcontrac tors, consultants or agents in connection with the performance of the Designer’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Designer's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Designer , the City, its officials, officers, employees, agents, or volunteers.
3.14.2 If Designer’s obligation to defend, indemnify, and/or hold harmless arises out of D esigner’s performance of “design professional” services (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Designer’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Designer, and, upon Designer obtaining a final adjudication by a court of competent jurisdiction, Designer’s liability for su ch claim, including the cost to defend, shall not exceed the Designer ’s proportionate percentage of fault.
3.15 Insurance. Designer shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this Section. In addition, Designer shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section.
3.15.1 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, Designer shall, at its expense, procure and maintain in full force and effect for the duration of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Designer agrees to amend, supplement or endorse the policies to do so.
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dditional Insured . The City of San Bernardino, its officials, officers, employees, agents, and volunteers shall be named as additional insureds on Designer ’s and its subconsultants’ policies of commercial general liability and automobile liability insurance using the endorsements and forms specified herein or exact equivalents.
3.15.3 Co
mmercial General Liability
(a) The Designer shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to the City.
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15 (b) Coverage for Commercial General Liability insurance shall be at least as broad as the following: Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent. Commercial General Liability Insurance must include coverage for the following:
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injury
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
(6) Explosion, Collapse and Underground (UCX) exclusion deleted
(7) Contractual Liability with respect to this Contract (8) Broad Form Property Damage
(9) Independent Consultants Coverage
(c) The policy shall contain no endorsemen ts or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4) contain any other exclusion contrary to the Agreement.
(d) T he policy shall give City, the City Council and each member of the City Council, its officers, employees, agents and City designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage.
(e) The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the City, and provided that such deductibles shall not apply to the City as an additional insured.
3.15.4 Automobile Liability
(a) At all times during the performance of the work under this Agreement, the Designer shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the City.
(b) Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto).
(c) The policy shall give City, the City Council and each member of the City Council, its officers, employees, agents and City designated volunteers additional insured status.
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16 (d) Subject to written approval by the City, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the City as an additional insured, but not a self-insured retention.
3.15.5 Workers’ Compensation/Employer’s Liability
(a) Designer certifies that he/she is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self -insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement.
(b) To the extent Designer has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Designer shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the “Workers’ Compensation and Insurance Act,” Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer’s Liability Coverage in amounts indicated herein.
Designer shall require all subconsultants to obtain and maintain, for the period required by this Agreement, workers’ compensation coverage of the same type and limits as specified in this Section.
3.15.6 Professional Liability (Errors and Omissions)
(a) At all times during the performance of the work under this Agreement the Designer shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in an amount indicated herein. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Designer. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend.
3.15.7 Privacy/Network Security (Cyber
(a) At all times during the performance of work under this Agreement, the Designer shall maintain privacy/network security insurance, in a form and with insurance companies acceptable to the City, for: (1) privacy breaches, (2) system breaches, (3) denial or loss of service, and (4) the introduction, implantation or spread of malicious software code.
3.15.8 Minimum Policy Limits Required
(a) The following insurance limits are required for the Agreement:
Combined Single Limit
Commercial General Liability $2,000,000 per occurrence/ $4,000,000 aggregate for bodily injury, personal injury, and property
damage
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17 Automobile Liability $1,000,000 per occurrence for bodily injury and property damage
Employer’s Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and aggregate (errors and omissions)
Cyber Liability $1,000,000 per occurrence and aggregate (b) Defense costs shall be payable in addition to the limits. (c) Requirements of specific coverage or limits contained in t his Section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement.
3.15.9 Evidence Required
(a) Prior to execution of the Agreement, the Designer shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25-S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance.
3.15.10 Policy Provisions Required
(a) Designer shall provide the City at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Designer shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non- payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Designer shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to the City at least ten (10) days prior to the effective date of cancellation or expiration.
(b) The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Designer’s policy is primary insurance and that any insurance, self-insurance or other coverage maintained by the City or any named insureds shall not be called upon to contribute to any loss.
(c) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Designer shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Designer shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement.
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18 (d) All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Designer or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Designer hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants. (e) T he limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability.
Further the limits set forth herein shall not be construed to relieve the Designer from liability in excess of such coverage, nor shall it limit the Designer ’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
3.15.11 Qualifying Insurers
(a) All policies required shall be issued by acceptable insurance companies, as determined by the City, which satisfy the following minimum requirements: Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
3.15.12 Additional Insurance Provisions
(a) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Designer , and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Designer pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(b) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Des igner or City will withhold amounts sufficient to pay premium from Designer payments. In the alternative, City may cancel this Agreement.
(c) The City may require the Designer to provide complete copies of all insurance policies in effect for the duration of the Project. (d) Neither the City nor the City Council, nor any member of the City Council, nor any of the officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.
3.15.13 Subconsultant Insurance Requirements
(a) Designer shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the City that they have secured all insurance required under this Section. Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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19 the City as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If reques ted by Designer , City may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants.
3.16 Records.
Designer shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Designer shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Designer shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of five (5) years from the date of final payment under this Agreement.
3.17 Standardized Manufactured Items.
Designer shall cooperate and consult with City in the use and selection of manufactured items on the Project, including but not limited to, paint, hardware, plumbing, mechanical and electrical equipment, fixtures, roofing materials and floor coverings. All such manufactured items shall be standardized to City ’s criteria to the extent such criteria do not interfere with building design.
3.18 Limitation of Agreement.
This Agreement is limited to and includes only the work included in the Project described herein. Any additional or s ubsequent construction at the site of the Project, or at any other City site, will be covered by, and be the subject of, a separate Agreement for design services between City and the designer chosen therefor by City.
3.19 Mediation.
Disputes arising from this Agreement may be submitted to mediation if mutually agreeable to the parties hereto. The type and process of mediation to be utilized shall be subject to the mutual agreement of the parties.
3.20 Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each party to this Agreement. However, Designer shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void.
3.21 Asbestos Certification.
Designer shall certify to City, in writing and under penalty of perjury, that to the best of its knowledge, information and belief no asbestos -containing material or other material deemed to be hazardous by the state or federal government was specified as a buildi ng material in any construction document that the Designer prepares for the Project. Designer shall require all consultants who prepare any other documents for the Project to submit the same written certification. Designer shall also assist the City in ensuring that contractors provide City with DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB
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20 certification, in writing and under penalty of perjury, that to the best of their knowledge, information and belief no material furnished, installed or incorporated into the Project contains asbestos or any other material deemed to be hazardous by the state or federal government. These certifications shall be part of the final Project submittal. Designer shall include statements in its specifications that materials containing asbestos or any other material deemed to be hazardous by the state or federal government are not to be included.
3.22 No Third Party Rights.
This Agreement shall not create any rights in, or inure to the benefits of, any third party except as expressly provided herein.
3.23 Governing Law.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of California. Venue shall be in San Bernardino County.
3.24 Exhibits and Recitals.
All exhibits and recitals contained herein and attached hereto are material parts of this Agreement and are incorporated as if fully set forth.
3.25 Severability.
Should any provision in the Agreement be held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall continue in full force and effect.
3.26 Non-Waiver.
None of the provisions of this Agreement shall be considered waived by either party, unless such waiver is specifically specified in writing.
3.27 Safety.
Designer shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Designer shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of its employees, consultant and subcontractors appropriate to the nature of the work and the conditions under which the work is to be performed.
3.28 Harassment Policy.
Designer shall provide a copy of the City's Harassment Policy to each of its employees assigned to perform the tasks under this Agreement. Designer shall submit to the City 's Personnel Manager a statement signed by each of its employees who are assigned to perform the Services under this Agreement certifying receipt of City's Harassment Policy and certifying that they have read the Harassment Policy. A finding by the City that any of Designer's employees has harassed a City employee shall be grounds for appropriate discipline, up to and including such employee's removal from performance of this Agreement at City's request.
3.29 Delivery of Notices.
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21 All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:
CITY:
City of San Bernardino
Vanir Tower, 290 North D Street
San Bernardino, California 92401
Attn: City Manager
With a Copy to:
City of San Bernardino
Vanir Tower, 290 North D Street
San Bernardino, CA 92401
Attn: City Attorney
DESIGNER:
IMEG
901 Via Piemonte, Suite 400
Ontario, Ca 91764
Attn: John M. Thompson
Civil Client Executive
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.
3.30 Time of Essence.
Time is of the essence for each and every provision of this Agreement.
3.31 City’s Right to Employ Other Consultants.
City reserves right to employ other consultants, including designers, in connection with this Project or other projects.
3.32 Prohibited Interests.
3.32.1 Solicitation. Designer maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Designer, to solicit or secure this Agreement. Further, Designer warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Designer, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability.
3.32.2 C
onflict of Interest. For the term of this Agreement, no director, official, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
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22 3.33 Equal Opportunity Employment.
Designer represents that it is an equal opportunity employer and that it s hall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or any other classification protected by federal or state law.
Such non- discrimination shall include, but not be l imited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Designer shall also comply with all relevant provisions of City’s minority business enterprise program, affirmative action plan or other related programs or guidelines currently in effect or hereinafter enacted.
3.34 Labor Certification.
By its signature hereunder, Designer certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker’s Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.
3.35 Subcontracting.
As specified in this Agreement, Designer shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a prov ision making them subject to each and every provision of this Agreement.
3.36 Supplemental Conditions.
Any supplemental conditions shall be attached as an exhibit to this Agreement, and that exhibit shall be incorporated herein by reference.
3.37 Electronic Signature.
Each Party acknowledges and agrees that this Agreement may be executed by electronic or digital signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature.
3.38 Entire Agreement.
This Agreement, with its exhibits, contains the entire agreement of the parties hereto, and supersedes any and all other prior or contemporaneous negotiations, understandings and oral or written agreements between the parties hereto. Each party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. Furthermore, any modification of this Agreement shall only be effective if in writing signed by all parties hereto. [SIGNATURES ON FOLLOWING PAGE]
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24 SIGNATURE PAGE FOR DESIGN SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO
AND IMEG
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written above.
CITY OF SAN BERNARDINO
APPROVED BY:
Charles E. McNeely
Interim City Manager
ATTESTED BY:
Genoveva Rocha, CMC
City Clerk
APPROVED AS TO FORM:
Best Best & Krieger LLP
City Attorney
IMEG
Signature
Name
Title
DocuSign Envelope ID: B3EDFD41-17FD-4C48-86B1-C71A67B64CAB John M. Thompson
John Mark Thompson, PE, C82557
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Attachment 5
Location Map
800
ft
N
Cross Street Bridge
Restoration Area
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: November 5, 2025
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works, Operations, and Maintenance;
Azzam Jabsheh, Deputy Director of Public Works/City Engineer Department: Public Works
Subject: Approve Memorandum of Understanding (MOU) between the City of San Bernardino and Southern California
Association of Governments (SCAG) for Technical
Assistance on the Planning for Main Streets Project –
Waterman Avenue (Route 18) between Arrowhead Road
and 30th Street to 40th Street (Ward 4 and 7)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Approve the Memorandum of Understanding (MOU) between the City of San Bernardino and the Southern California Association of Governments (SCAG) for technical assistance on the Planning for Main Streets Project along Waterman Avenue (Route 18) from Arrowhead Road to 30th Street; and
2. Authorize the City Manager, or designee, to execute all documents with SCAG.
City Manager’s Comments
This Technical Assistance Grant for Planning for Main Streets is a unique opportunity for the City of San Bernardino. Route 18 is one of 4 planning projects included in this SCAG funding.
Executive Summary
The Southern California Association of Governments (SCAG), in partnership with Caltrans, has secured $500,000 under the Sustainable Transportation Planning Grant Program – Strategic Partnerships to implement the Planning for Main Streets Project.
The project will focus on State highway corridors within local jurisdictions, including Waterman Avenue (Route 18) from 30th Street to 40th Street in San Bernardino, and
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will assess existing conditions, engage communities, and develop conceptual plans and cost estimates for corridor improvements. The MOU formalizes the City’s role as a project partner, supporting SCAG and its consultant in outreach, technical guidance, and review of deliverables. This collaboration positions the City to leverage future state and federal funding for implementation of improvements along identified State highway main streets. The City has no financial obligation toward this project and all costs is borne by SCAG.
Background
Caltrans established the Sustainable Transportation Planning Grant Program (STPG Program) to promote local and regional planning efforts that reduce greenhouse gas emissions, enhance sustainability, and support multi-modal integration. As the federally designated Metropolitan Planning Organization (MPO), SCAG received $500,000 in Strategic Partnership funds to implement the Planning for Main Streets Project. The project will evaluate State highway corridors functioning as main streets, identify community-driven priorities, and prepare conceptual design plans.
Background
Main Street, California: A Guide for People-Centered State Highway Main Streets highlights the special importance of California State Highways (State highways) that function as community main streets by supporting multimodal travel and community events and activities. The guide is shaped by five principles that reflect the State’s strategic goals: foster people-centered transportation infrastructure; improve safety and public health; elevate equity and livability; advance sustainability and climate action; and engage communities, partners, and stakeholders. State highway main streets, including those in the SCAG region, serve two purposes that typically have conflicting design principles: (1) community streets that provide access to a variety of land uses and function as gathering places and (2) distributor streets, also known as arterials or collectors, which are often higher-speed roadways that prioritize moving vehicular traffic by limiting access to local destinations.
SCAG will work with the Consultant and the City of San Bernardino on the development of the Planning for Main Streets project, which includes existing conditions analysis, stakeholder engagement, and project recommendations. The Consultant shall manage and oversee all administrative contractual and technical aspects of the Project and will ensure timely and integrated production of tasks and manage project partner input and collaboration necessary to achieve the Project objectives.
The Project shall contribute to regional goals identified to encourage and support the implementation of projects that facilitate multimodal connectivity, prioritize transit and shared mobility, and result in improved mobility, accessibility and safety; pursue the development of Complete Streets that comprise a safe, multimodal network with flexible use of public rights-of-way for people of all ages and abilities using a variety
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of modes; and integrate the assessment of equity into the regional transportation safety and security planning process.
The City of San Bernardino has been selected as a partner jurisdiction for this project, ensuring its direct involvement in shaping corridor improvements along Waterman Avenue.
Discussion
Through the MOU, the City of San Bernardino commits to actively participating in technical advisory committee meetings and community outreach activities, while also providing timely guidance, decisions, and access to necessary data and facilities. The City will review and approve project deliverables, including conceptual plans for corridors within its jurisdiction, and will coordinate with SCAG’s consultant to ensure that final deliverables are presented to the City Council. SCAG, in partnership with Caltrans Headquarters and Districts 7, 8, 11, and 12, identified several State highways in the SCAG region that function as main streets, given their multimodal travel patterns and community destinations, but also have gaps in accessibility, safety, and comfort to adequately meet the needs of all roadway users. The State highway main streets included in the Project are:
• State Route (SR) 1 in Caltrans District 7 from Pennsylvania Avenue in the City of Lomita to Harbor Avenue/I-710 ramps in the City of Long Beach (approximately 6.5 miles).
• SR 18 in Caltrans District 8 from Arrowhead Road to 30th Street in the City of San Bernardino (approximately 2 miles).
• SR 86 in Caltrans District 11 from Las Flores Drive to Legion Road in the City of Brawley (approximately 2 miles).
• SR 39 in Caltrans District 12 from Starr Street in the City of Stanton to Hazard Avenue in the City of Westminster (approximately 4.5 miles).
These corridors align with Federal Planning Factors and the State’s strategic goals to increase the safety, accessibility, and security of the transportation system for all roadway users while also advancing equity and livability for communities. Each Project corridor is in, or within a half-mile of, SCAG’s Priority Equity Communities. In addition, each Project corridor is part of the regional or local High Injury Network, which are intersections and roadway segments that have a disproportionate number of collisions, especially fatal and severe injury collisions, in the SCAG region or respective local jurisdiction. Each Project corridor is classified as a Tier 1 (highest) priority in the Caltrans Active Transportation Plan. This combination of factors illustrates the significant need for transformative multimodal projects to ensure each Project corridor is people-centered and effectively serves the surrounding community. The Project will
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assess existing conditions, engage with surrounding communities to define a vision and refine corridor priorities, and develop conceptual plans and associated cost estimates for sustainable transportation improvements to position the State highway main streets for future grant funding opportunities and/or incorporation into future workplans with the goal of implementing improvements. The City has no financial obligation toward this project and all costs is borne by SCAG. The estimated completion date for the project is spring 2027.
2021-2025 Strategic Targets and Goals
The MOU agreement with SCAG aligns with Key Target No. 2: Focused Aligned Leadership and unified community.
Fiscal Impact
There is no direct fiscal impact to the City of San Bernardino. SCAG has secured full grant funding for the project.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Approve the Memorandum of Understanding (MOU) between the City of San Bernardino and the Southern California Association of Governments (SCAG) for technical assistance on the Planning for Main Streets Project along Waterman Avenue (Route 18) from Arrowhead Road to 30th Street; and
2. Authorize the City Manager, or designee, to execute all related documents.
Attachments
Attachment 1 Draft Memorandum of Understanding (MOU) with SCAG Ward:
Fourth and Seventh Ward
Synopsis of Previous Council Actions:
N/A.
CC: Eric Levitt, City Manager
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MEMORANDUM OF UNDERSTANDING
No. M-XXX-26
BETWEEN THE
SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS
AND THE CITY OF SAN BERNARDINO
FOR TECHNICAL ASSISTANCE RELATING TO THE PLANNING FOR MAIN STREETS
PROJECT
(SCAG Project/OWP No. 145.4957.01)
This Memorandum of Understanding (“MOU”) is entered into by and between the Southern California Association of Governments (“SCAG”) and the City of San Bernardino (“Agency”), for technical assistance relating to the Planning for Main Streets Project. SCAG and the Agency may be individually referred to as “Party” and collectively as “Parties.”
RECITALS
WHEREAS, the California Department of Transportation (“Caltrans”) created the Sustainable Transportation Planning Grant Program (“STPG Program”) to encourage local and regional planning that supports state goals, implements the Regional Transportation Plan/Sustainable Communities Strategy (“RTP/SCS”), and achieves the State of California’s greenhouse gas (“GHG”) reduction targets;
WHEREAS, Caltrans administers the STPG Program pursuant to Senate Bill 1 (The Road Repair and Accountability Act of 2017), a transportation funding bill that aims to maintain and integrate the State’s multi-modal transportation system;
WHEREAS, Caltrans released the Fiscal Year (“FY”) 2024 -25 STPG Program Application Guide and Call for Applications for transportation planning projects statewide;
WHEREAS, SCAG is the federally designated MPO for Southern California, primarily responsible for the development of a Regional Transportation Plan/Sustainable Communities Strategy (“RTP/SCS” also known as “Connect SoCal”) for the counties of Imperial, Los Angeles, Orange, San Bernardino, Riverside, and Ventura;
WHEREAS, SCAG, in partnership with Caltrans, identified several State highway main streets in the SCAG region and developed the Planning for Main Streets project (“Project”) which Caltrans awarded a total of $500,000.00 in Grant Funding under the STPG Program – Strategic Partnerships (FHWA SPR Part I);
WHEREAS, SCAG will procure the services of a consultant (“Consultant”) to oversee and manage the Project, complete Project tasks and deliverables, and achieve the Project objectives;
WHEREAS, the Project will assess existing conditions, engage with surrounding communities to define a vision and refine corridor priorities, and develop conceptual plans and associated cost estimates for sustainable transportation improvements to position the State highway main streets for future grant funding opportunities and/or incorporation into future workplans with the goal of improvements implementation;
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WHEREAS, Agency is a local jurisdiction located along one of the State highways and identified as a key stakeholder and Project partner who will support, cooperate, collaborate, and provide guidance as needed to complete the Project by participating in technical advisory committee meetings and other community engagement activities as facilitated by the Consultant; and
WHEREAS, the purpose of this MOU is to describe the responsibilities of the Parties.
NOW THEREFORE, IT IS MUTUALLY AGREED THAT:
1. MOU Contents
This MOU consists of the Recitals above, the terms and conditions below, and the attached exhibits which are hereby incorporated by reference and made a part of this MOU. The MOU Contents contains the entire agreement of the Parties. This MOU supersedes al l prior negotiations, discussions and previous agreements between the Parties.
2. Term
This MOU is effective as of the last date on which it is executed by all Parties (“Effective Date”) and continues until June 30, 2027 (“Completion Date”), unless terminated earlier in accordance with the termination provisions of this MOU. Time is of the essence in the performance of Services under this MOU.
3. Responsibilities of the Parties:
a. SCAG will:
i. Contribute funding for the Project in accordance with Section 5, Funding, below.
ii. Provide technical assistance to Agency by:
1. Procuring a Consultant.
2. Overseeing and managing the Consultant’s activities in performing the Scope of Work.
3. Reviewing, approving, and paying the Consultant’s invoices.
4. Reviewing and approving Consultant’s deliverables in consultation with Agency.
iii. Complete the Project.
b. Agency will:
i. Fulfill any obligations in compliance with this MOU, the STPG Program Guidelines, the Funding Requirements, and all federal, state and local laws, rules and regulations.
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ii. Commit to supporting the Project by:
1. Cooperating with SCAG and Consultant.
2. Meeting with SCAG and Consultant as determined by SCAG.
3. Participating in public outreach for the main street corridor located within Agency’s jurisdiction, as facilitated by the Consultant.
4. Providing guidance and decisions without delay.
5. Responding to requests for information and records as requested by Consultant or SCAG as promptly as practicable.
6. Providing access to Agency’s facilities and data upon reasonable notice.
7. Reviewing, providing feedback, and approving deliverables.
8. Coordinating with Consultant on a presentation of final deliverables to Agency’s governing body for proposed acceptance or adoption.
iii. Completing the Project.
c. Agency certifies, to the best of its knowledge and belief, that no State or Federal funds have been paid or will be paid, by or on behalf of Agency to any person for influencing or attempting to influence an officer or employee of any State or Federal agency, a Member of the State Legislature or United States Congress, an officer or employee of the Legislature or Congress, or any employee of a Member of the Legislature or Congress in connection with the awarding of any State or Federal contract, the making of any State or Federal grant, the making of any State or Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any State or Federal contract, grant, loan, or cooperative agreement.
If any funds other than State or Federal funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, Agency shall complete and submit Standard Form-LLL, "Disclosure of Lobbying Activities" in accordance with those form instructions.
4. Program Management
a. All work under this MOU shall be coordinated with SCAG and Agency through the Project Managers.
b. For purposes of this MOU, SCAG designates the following individual as its Project Manager:
Rachel Om
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Senior Regional Planner
213-630-1550
[email protected]
c. For purposes of this MOU, Agency designates the following individual as its Project Manager:
[Name] Azzam Jabsheh
[Title] Deputy Director of Public Works/City Engineer
[Number] 909-998-2448
[Email] [email protected]
Either Party may change the designation upon written notice to the other Party.
5. Funding
SCAG’s contribution to the Project is funded with STPG Program – Strategic Partnerships (FHWA SPR Part I) funds. No funds will be provided to Agency. SCAG reserves the right, in its sole discretion, to discontinue funding the Project and terminate this MOU.
6. Work Products
a. For purposes of this MOU, “Work Products” shall mean all deliverables created or produced under this MOU including, but not limited to, all deliverables conceived or made either solely or jointly with others during the term of this MOU and for six months after, which relates to the Project.
Work Products shall not include real property or capital improvements. Work Products includes all inventions, innovations, improvements, or other works of authorship directly related to this MOU that Agency or Consultant may conceive of or develop during the term of this MOU and for six months after, whether or not they are eligible for patent, copyright, trademark, trade secret or other legal protection.
b. SCAG shall own all Work Products and may, in its sole discretion, grant to the Agency a license to use the Work Products. Any reproduction, publishing, or reuse of the Work Products will be at the Agency’s sole risk and without liability or legal exposure to SCAG.
7. Amendments
No amendment or variation of the terms of this MOU shall be valid unless made in writing, signed by the Parties and approved as required.
8. Notices
Any notice (s) to be given may be personally served or served by certified mail, return receipt requested, to the following addresses:
To SCAG: Cindy Giraldo
Chief Financial Officer
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MOU No.: M-xxx-26
SCAG Project/OWP No.: 145.4957.01
Southern California Association of Governments
900 Wilshire Blvd., Suite 1700
Los Angeles, CA 90017
(213) 630-1413
[email protected]
To Agency: Name Azzam Jabsheh
Title Deputy Director of Public Works/City Engineer
Agency City of San Bernardino
Address 290 N.D Street, San Bernardino, CA 92401
Phone 909-998-2448
Email [email protected]
Either Party may change the designation upon written notice to the other Party.
9. Indemnification and Release
a. Agency assumes all risk of injury to its employees, agents, and Subconsultants, including loss or damage to property.
b. When the law establishes a professional standard of care, to the fullest extent permitted by law, Agency shall indemnify, protect, defend, and hold harmless SCAG, its members, officers, Regional Council Board members, employees, and agents from and against any and all losses, liabilities, damages, costs, and expenses, including attorney’s fees and costs to the extent caused in whole or in part by any act, error, or omission of Agency, its agents, employees, or subconsultants arising out of, pertaining to, or related to this MOU.
c. For all other s ervices performed by Agency pursuant to this MOU, Agency shall indemnify, protect, defend, and hold harmless SCAG, its members, officers, Regional Council members, employees, and agents from and against any and all losses, liabilities, damages, costs, and expenses, including reasonable attorney’s fees and costs where the same arises out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this MOU by Agency, its agents, employees, or Subconsulta nts; provided, however, that Agency ’s duty to indemnify and hold harmless shall not include any claims or liability arising from the intentional or willful misconduct of SCAG, its members, officers, Regional Council members, employees, and agents.
d. Agency acknowledges that SCAG in no way whatsoever insures or guarantees the Work Product or the Project , and that Agency is accepting the Work Product and Project from SCAG and its Consultant “AS IS” without warranty of any kind, either express or implied, including without limitation any warranties of merchantability or fitness for a particular purpose.
10. Disputes
The Parties shall make their best efforts to resolve disputes that occur under this MOU by good faith negotiations whenever possible. Both Parties shall meet and confer in good faith in order to foster a
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spirit of cooperation and efficiency in the administration and monitoring of performance and compliance by each other with the terms, provisions and conditions of this MOU.
11. Termination of MOU
a. Termination Resulting from Lack of Funding: In the event the Project provided for under this MOU is not approved in the SCAG Comprehensive Budget or Comprehensive Budget Amendments, this MOU is deemed to be terminated effective June 30th of the applicable Fiscal Year. In the event the funding agency reduces or eliminates the available funding, this MOU may be terminated effective immediately upon notice.
b. Termination for Convenience: Either Party may terminate this MOU for convenience if mutually agreed upon by the Parties. In addition, SCAG may terminate this MOU at any time for any reason or for no reason, by giving written notice to Agency of such termination at least thirty (30) calendar days before the effective date of such termination. Upon receipt of the notice of termination, Agency shall immediately avoid incurring any additional obligation costs or expense except as may be necessary to terminate i ts activities or the activities of C onsultant. In such event, all finished or unfinished Work Products, at the option of SCAG, become SCAG’s property. If this MOU is terminated by SCAG, as provided herein, SCAG’s only obligation shall be the payment of fees and expenses incurred prior to the termination date, in accordance with the cost provisions of this MOU.
c. Termination for Cause: If through any cause, Agency shall fail to fulfill in a timely and proper manner its obligations under this MOU, or if Agency violates any of the covenants, terms, or stipulations of this MOU, SCAG shall thereupon have the right to t erminate this MOU by giving not less than ten (10) calendar days written notice to Agency of the intent to terminate and specifying the effective date thereof. In such event, all finished or unfinished Work Products shall, at the option of SCAG, become SCAG’s property.
12. Records Retention, Monitoring, and Audits
a. Agency shall maintain its source documents, books and records connected with the Project for a minimum of five (5) years after the termination or expiration of this MOU. Wherever practicable, such records should be collected, transmitted, and stored in open and machine-readable formats.
b. If any litigation, claim, negotiation, audit, monitoring, inspection, or other action has been started before the expiration of the required record retention period, all records shall be retained by Agency for five (5) years after: (a) the conclusion or resolution of the matter; (b) the date an audit resolution is achieved for each annual SCAG OWP; or (c) the termination or expiration of this MOU, whichever is later.
c. SCAG may monitor activities of Agency as SCAG deems necessary.
d. Agency agrees that SCAG, or any authorized agency, or their designated representatives shall have the right to review, obtain, and copy all records and supporting documentation related to the performance of this MOU. Agency agrees to provide any relevant information requested. Copies shall be made and furnished to SCAG upon request at no cost to SCAG.
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e. Agency agrees to permit SCAG, or any authorized agency, or their designated representatives access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation.
13. Compliance with Laws, Rules and Regulations
a. Partner Agency agrees to comply with all federal, state and local laws, rules and regulations.
b. During the performance of this MOU, Agency assures that no person shall be denied the MOU’s benefits, be excluded from participation or employment, be denied Project benefits, or be subjected to discrimination based on race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, under the Project or any program or activity funded by this MOU, as required by Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. §§ 3601- 20) and all implementing regulations, the Americans with Disabilities Act (“ADA”) of 1990 (42 U.S.C. §§ 12101 et seq.) and all applicable regulations and guidelines issued pursuant to the ADA, and the Age Discrimination Act of 1975 and all implementing regulations. Agency shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination.
c. During the performance of this MOU, Agency shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code § 12900 et seq.), the regulations promulgated thereunder (Cal. Code Regs. tit. 2, § 11000 et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code §§ 11135-11139.5), and the regulations or standards adopted to implement such article.
d. During the performance of this MOU, Agency shall comply with the Americans with Disabilities act of 1990 and nondiscrimination program requirements of Title VI of the Civil Rights Act of 1964. Accordingly, 49 CFR Part 21, and 23 CFR Part 200 are made applicable to this MOU by this reference. Wherever the term “Contractor” appears therein, it shall mean Agency. Annually, Agency shall submit a “Title VI Compliance Report,” attached as Exhibit A , to document compliance with Title VI requirements.
14. Conflict of Interest
The Parties shall comply with all applicable federal and state conflict of interest laws, regulations, and policies.
15. Independent Contractor
Agency and its officers, employees, and agents shall be independent contractors in the performance of this MOU, and not officers, employees, contractors or agents of SCAG.
16. Assignment
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MOU No.: M-xxx-26
SCAG Project/OWP No.: 145.4957.01
Neither Party shall assign any rights or interests in this MOU, or any part thereof, without the written consent of each Party to this MOU, which consent may be granted, withheld or conditioned in the consenting Party’s sole and absolute discretion. Any assignment without such written consent shall be void and unenforceable. The covenants and agreement of this MOU shall inure to the benefit of and shall be binding upon each of the Parties and their respective successors and assignees.
17. Non-Exclusivity
This MOU shall not create an exclusive arrangement between SCAG and Agency and nothing shall restrict SCAG from acquiring similar, equal or like services from other entities or sources. Nothing in this MOU shall be construed to limit or restrict the remedies available to SCAG in both at law and in equity.
18. Severability
If any provision of this MOU is held to be illegal, invalid, or unenforceable, in whole or in part, such provision shall be modified to the minimum extent necessary to make it legal, valid, and enforceable, and the legality, validity, and enforceability of the remaining provisions shall not be affected thereby.
19. Survival
The following sections survive expiration or termination of this MOU:
Section 6 (Work Products)
Section 9 (Indemnification and Release)
Section 10 (Disputes)
Section 12 (Records Retention, Monitoring, and Audits)
Section 20 (Jurisdiction and Venue)
20. Jurisdiction and Venue
This Agreement shall be interpreted under the laws of the State of California. Venue shall be Los Angeles County.
21. Waiver
No delay or failure by either Party to exercise or enforce at any time any right or provision of this MOU shall be considered a waiver thereof of such Party’s right thereafter to exercise or enforce each and every right and provision of this MOU. A waiver to be valid shall be in writing but need not be supported by consideration. No single waiver shall constitute a continuing or subsequent waiver.
22. Order of Precedence
In the event of any conflict between the following documents, the order of precedence shall be as follows:
Amendment(s)
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MOU No.: M-xxx-26
SCAG Project/OWP No.: 145.4957.01
MOU
Exhibits
23. Execution
This MOU, or any amendments related thereto, may be executed in multiple counterparts , each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.
The signature page of this MOU or any amendments may be executed by way of a manual or authorized digital signature. Delivery of an executed counterpart of a signature page to this MOU or an amendment by electronic transmission scanned pages shall be deemed effective as a delivery of a manually or digitally executed counterpart to this MOU or any amendment.
24. Authority
The person(s) executing this MOU on behalf of the Parties warrant that they are duly authorized to execute this agreement on behalf of said Parties, and that by doing so the Parties are formally bound to the provisions of this MOU.
[SIGNATURE PAGE FOLLOWS]
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MOU No.: M-xxx-26
SCAG Project/OWP No.: 145.4957.01
MEMORANDUM OF UNDERSTANDING
NO. M-XXX-26
IN WITNESS WHEREOF, the Parties have caused this MOU to be executed by their duly authorized representatives as of the dates indicated below:
SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS (SCAG)
By: _______________________________________________ _________________ Cindy Giraldo Date
Chief Financial Officer
APPROVED AS TO FORM:
By: _______________________________________________ _________________ Richard Lam
Senior Deputy Legal Counsel
CITY OF SAN BERNARDINO
By: _______________________________________________ _________________ Eric Levitt Date
City Manager
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DISCUSSION.
City of San Bernardino
Request for Council Action
Date: November 05, 2025
To: Honorable Mayor and City Council Members
From: Gabriel Elliott, Director of Community Development and Housing Department: Community Development & Housing
Subject: Approval of the Loan and Regulatory Agreements between the City of San Bernardino and E. Street Veterans Apartments, LP, A California Limited Partnership (Ward 2)
Recommendation
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Authorize the execution of the Loan and Regulatory Agreements between the City of San Bernardino and E. Street Veterans Apartments, LP, a California Limited Partnership, for the allocation of $1,985,401 in Permanent Local Housing Allocation funds and $2,014,599 in Low and Moderate Income Housing Asset Funds, totaling $4 million, to support the development of the E.
Street Veterans Apartments located at 1351 N. E Street, San Bernardino, California; and
2. Adopt Resolution No. 2025-389, authorizing the Director of Finance and Management Services to amend the Fiscal Year 2025/2026 operating and capital budget by $4 million, allocating $1,985,401 in Permanent Local Housing Allocation funds and $2,014,599 in Low and Moderate Income Housing Asset Funds; and
3. Authorize the City Manager, or designee, to take any further actions and execute any and all documents or instruments, including but not limited to subordination agreements for senior lenders, subject to review and approval by the City Attorney to facilitate execution of the agreements and release of funds.
City Manager's Comments
Click or tap here to enter text.
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Executive Summary
The City of San Bernardino proposes to enter into Loan and Regulatory Agreements with E. Street Veterans Apartments, LP to provide $4,000,000 comprised of $1,985,401 in Permanent Local Housing Allocation (“PLHA”) funds and $2,014,599 in Low and Moderate Income Housing Asset Funds (“LMIHAF”) to support the development of the E. Street Veterans Apartments (“Project”), a 30-unit affordable housing community for homeless and at-risk veterans at 1351 N. E Street. The $27.47 million project, led by U.S. VETS Housing Corporation and Kingdom Development, will include one manager’s unit, on-site supportive services, and a community center.
Financing sources include tax credit equity, state and county loans, and land contribution, with costs determined to be reasonable given prevailing wage requirements and inclusion of a $4.5 million Capitalized Operating Subsidy Reserve.
The Project will provide 29 affordable units restricted between 30% and 50% of Area Median Income and contribute toward the City’s Regional Housing Needs Assessment goals.
Background
On April 11, 2025, the City of San Bernardino conditionally approved to provide E Street Veterans Apartments, LP with $4,000,000 to support the development of the 30-unit E Street Veterans Apartments project (“Project”) located at 1351 North E Street (the “Site”) in the City of San Bernardino, California (the “City”). The City’s approval of two loans from PLHA and LMIHAF will facilitate the development of a 30-unit affordable rental housing community targeting special needs homeless veterans earning between 30% and 50% of the Area Median Income (AMI).
While the existing zoning for the Site does not allow for residential development, the Project has previously had a Conditional Use Permit (“CUP”) approved by the City’s Planning Commission. However, the CUP has since expired, and the new CUP was approved by the Planning Commission on October 13, 2025.
Discussion
The Project represents a critical investment in supportive housing for veterans experiencing or at risk of homelessness within the City. The site, a 0.79-acre vacant parcel, will be developed into a high-quality, service-enriched residential community providing 30 affordable one- and two-bedroom rental units, including one two-bedroom manager’s unit. The residential units will be in a three-story building, and the management office and community center will be located in an adjacent one-story building. The Project will also include 30 surface parking spaces. The Project will be built at a density of 37.75 units per acre.
Centrally located community spaces will house the resident manager’s office and accommodate social and supportive service programs coordinated by United States Veteran’s Initiative, the lead service provider. Upon lease-up, the provider will engage tenants to determine appropriate supportive services tailored to resident needs, fostering long-term housing stability.
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The Project will be constructed in one phase and is estimated to be completed and stabilized within 24 months or by the end of 2027. The Site is not anticipated to require site remediation or significant structural or topographical modifications. The minimal off-site improvements, including curb, gutter, sidewalk, and electrical connections, will be limited in scope and cost.
U.S. VETS Housing Corporation will be the developer and the Administrative General Partner of E Street Veterans’ Apartments, LP (Borrower/Owner), with Kingdom Development, Inc., as the Managing General Partner and R4 as the Limited Partner providing the Tax Credit Equity contribution. A Holocaust survivor has contributed the site to U.S. VETS Housing Corporation with the intention for the land to be used for the Project as a thank you to U.S. World War II soldiers for his rescue.
The $27,473,000 Project will be financed with the following secured non-City funds:
9% Tax Credit Equity $12,463,000
HCD – VHHP Loan $4,426,000
County Forgivable Loan $5,000,000
Land Contribution $860,000
Home Depot Forgivable Loan $500,000
Contributed Developer Fee $224,000
Non-City Funding Sources $23,473,000
The City’s financial consultant, Keyser Marston Associates, Inc. (KMA) reviewed the proposal and determined that while the $915,800 per unit total development cost is higher than typical, it is reasonable given the inefficiencies of a small project, the imposition of prevailing wages, and the inclusion of the $4,500,000 Capitalized Operating Subsidy Reserve (COSR) in the budget are the cause for the higher than typical development costs. Without land costs and the COSR, the costs equate to $737,100 per unit.
When the estimated total development costs are compared with the secured non-City funding sources, the Project has a $4,000,000 funding gap. The Borrower requests that the City fill the gap with two loans, as follows:
1. LMIHAF Loan:
a. A $2,014,599 loan amount that will be drawn down at the end of construction;
b. A 3.0% simple interest rate;
c. A 55-year loan term;
d. Payments will be made with annual residual receipts; and e. The loan will be secured with a Deed of Trust (DOT) and, subordinated to the HCD and County loans, as well as construction and permanent financing, subject to City Manager approval.
2. PLHA Loan:
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a. $1,985,401 loan amount that will be drawn down during construction; b. A 3.0% simple interest rate;
c. A 57-year loan term with no payments due during construction; d. Payments will be with annual residual receipts after COO; and e. The loan will be secured with a DOT subordinated to the HCD, and County Loans, as well as construction and permanent financing, subject to City Manager approval.
The Veterans Housing and Homeless Prevention (VHHP) Regulatory Agreement will target the population of special needs homeless veterans earning between 30% and 50% of AMI. The Project's affordability levels will also be restricted by the California Tax Credit Allocation Committee (“TCAC”), the California Department of Housing and Community Development (“HCD”), the County of San Bernardino, and the City. The City’s two recorded regulatory agreements, which will be subordinated to the HCD and County regulatory agreements, will include the following restrictions:
1. LMIHAF Regulatory Agreement (55 Years from Certificate of Occupancy):
30% AMI Households and Rents
1-Bedroom Units 12
2-Bedroom Units 3
Total LMIHAF Restricted Units 15
2. PLHA Regulatory Agreement (55 Years from Certificate of Occupancy):
50% AMI Households and Rents
1-Bedroom Units 9
2-Bedroom Units 5
Total PLHA Restricted Units 14
While the project's average affordability is 40% AMI, it does not have access to Project-Based Vouchers. Therefore, a $4,500,000 COSR has been funded and will be used to meet operating losses for at least 20 years per the Developer’s pro forma.
The City will be able to count 15 units as Extremely-Low Income units, 14 units as Very-Low Income units, and one (1) unit as Above-Moderate unit for Regional Housing Needs Assessment (RHNA) purposes. By allocating the $2,104,599 of the Low Mod funds towards Extremely-Low Income units, the Project will help the City meet the Low Mod Income Targeting requirements.
The development advances the City’s goal of providing permanent supportive housing for veterans and contributes to regional efforts to combat homelessness through high- quality, service-oriented affordable housing. With financing secured from multiple public sources including the City’s PLHA and Low/Moderate Income Housing funds, the project is ready to proceed to closing and construction following City Council’s approval of the Loan and Regulatory Agreements.
2021-2025 Strategic Targets and Goals
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Approving the Loan and Regulatory Agreements aligns with Key Strategic Target and No. 3: Improved Quality of Life.
Fiscal Impact
There’s no impact on the City’s General Fund. Approval of this item authorizes the use of $4,000,000 from the City’s PLHA and Low/Moderate Income Housing funds.
The loan will be secured by a Deed of Trust and Regulatory Agreement recorded against the property. Repayment will be made on a residual receipts basis over the term of the loan.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Authorize the execution of the Loan and Regulatory Agreements between the City of San Bernardino and E. Street Veterans Apartments, LP, a California Limited Partnership, for the allocation of $1,985,401 in Permanent Local Housing Allocation funds and $2,014,599 in Low and Moderate Income Housing Asset Funds, totaling $4 million, to support the development of the E.
Street Veterans Apartments located at 1351 N. E Street, San Bernardino, California; and
2. Adopt Resolution No. 2025-XXX, authorizing the Director of Finance and Management Services to amend the Fiscal Year 2025/2026 operating and capital budget by $4 million allocation of $1,985,401 in Permanent Local Housing Allocation funds and $2,014,599 in Low and Moderate Income Housing Asset Funds; and
3. Authorize the City Manager, or designee, to take any further actions and
FINANCIAL
DATA
Current Fiscal Year: Next Fiscal Year: Total Cost: Ongoing Cost:
COST $ 4,000,000 $ 0 $ 4,000,000 $ 0
GENERAL
FUND
SHARE
$ 0 $ 0 $ 0 $ 0
SOURCE OF FUNDS:
PLHA - $1,985,400.60
LMIHAF: $2,014,599
Budget Adjustment:
Yes
For Fiscal Year: 25/26Click or
tap here to enter text.
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execute any and all documents or instruments, including subordination agreements for senior lenders, subject to review and approval by the City Attorney to facilitate execution of the agreements and release of funds.
Attachments
Attachment 1 Resolution No. 2025-XXX
Attachment 2 PLHA Loan & Regulatory Agreement
Attachment 3 LMHIAF Loan & Regulatory Agreement
Attachment 4 Planning Commission Resolution No 2025-048 Attachment 5 Subordination Agreement
Ward:
Second Ward
Synopsis of Previous Council Actions:
On April 11, 2025, the City of San Bernardino conditionally approved to provide E Street Veterans Apartments, LP with $4,000,000 to support the development of the 30- unit E Street Veterans Apartments project located at located at 1351 North E Street in the City of San Bernardino, California. The City’s approval of two loans from PLHA and LMIHAF will facilitate the development of a 30-unit affordable rental housing community targeting special needs homeless veterans earning between 30% and 50% of the Area Median Income (AMI).
On October 13, 2025, the Planning Commission approved the Conditional Use Permit for the project.
CC: Eric Levitt, City Manager
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Resolution No. 2025-389
Resolution 2025-389
November 5, 2025
RESOLUTION NO. 2025-389
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF
THE CITY OF SAN BERNARDINO, CALIFORNIA,
AUTHORIZING THE DIRECTOR OF FINANCE AND
MANAGEMENT SERVICES TO AMEND THE FISCAL
YEAR 2025/2026 OPERATING AND CAPITAL BUDGET BY
$4 MILLION ALLOCATION OF $1,985,401 IN PERMANENT
LOCAL HOUSING ALLOCATION FUNDS AND $2,014,599
IN LOW AND MODERATE INCOME HOUSING ASSET
FUNDS
WHEREAS, the City of San Bernardino (City) recognizes the importance of community development initiatives in enhancing the quality of life for its residents; and WHEREAS, E. Street Veterans Apartments, LP, a California Limited Partnership (“Borrower”), proposes to develop a 30 -unit affordable rental housing project known as the E.
Street Veterans Apartments (“Project”) located at 1351 North E Street, San Bernardino, California; and
WHEREAS, the Project will provide permanent supportive housing for homeless veterans earning between 30% and 50% of the Area Median Income (AMI), consistent with City and State housing priorities; and
WHEREAS, the total estimated development cost of the Project is approximately $27,473,000, financed with various public and private sources , including tax credit equity, state and county loans, land contribution, and a capitalized operating subsidy reserve; and WHEREAS, a $4,000,000 funding gap remains, which the Borrower has requested be filled through two City loans using $1,985,401 Permanent Local Housing Allocation (PLHA) and $2,014,599 Low/Moderate Income Housing Asset (Low Mod) funds; and WHEREAS, the Mayor and City Council authorizes the Director of Finance and Management Services to amend the Fiscal Year 2025/2026 operating and capital budget by $4 million in PLHA funds and in Low Mod funds; and
WHEREAS, the Loan and Regulatory Agreements will impose affordability restrictions on the Project for 55 years from the date of Certificate of Occupancy, consistent with PLHA and Low Mod requirements; and
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.
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Resolution No. 2025-389
Resolution 2025-389
November 5, 2025
SECTION 2. The Director of Finance & Management Services is authorized to amend the Fiscal Year 2025/2026 operating and capital budget by $4 million allocation of $1,985,401 in PLHA funds and $2,014,599 in Low Mod funds.
SECTION 4. The City Manager, the Director of Community Development and Housing, or their designee are authorized to take any further actions and execute any further agreements , amendments, or documents as necessary to effectuate the development of the Project.
SECTION 5. The Mayor and City Council find 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 6. 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 7. 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 5
th day of November 2025.
Helen Tran, Mayor
City of San Bernardino
Attest:
Telicia Lopez, CMC, City Clerk
Approved as to form:
Sonia Carvalho, City Attorney
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Resolution No. 2025-389
Resolution 2025-389
November 5, 2025
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
I, Telicia Lopez, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2025-389, adopted at a regular meeting held on the 5th day of November 2025 by the following vote:
Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
KNAUS _____ _____ _______ _______
FLORES _____ _____ _______ _______
ORTIZ _____ _____ _______ _______
WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2025.
Telicia Lopez, CMC, City Clerk
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PERMANENT LOCAL HOUSING ALLOCATION LOAN AGREEMENT
by and between
THE CITY OF SAN BERNARDINO
and
E Street Veterans Apartments, LP,
A California Limited Partnership
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TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS AND EXHIBITS 1
Section 1.1 Definitions.........................................................................................................1 Section 1.2 Exhibits. ............................................................................................................6 ARTICLE 2 LOAN PROVISIONS 6
Section 2.1 Loan. .................................................................................................................6 Section 2.2 Interest...............................................................................................................6 Section 2.3 Use of Loan Funds............................................................................................6 Section 2.4 Security. ............................................................................................................7 Section 2.5 Conditions Precedent to Disbursement of the Loan. ........................................7 Section 2.6 Disbursement. . ................................................................................................7 Section 2.7 Due in Full. ....................................................Error! Bookmark not defined.
Section 2.8 Right to Prepay. . .............................................................................................8 Section 2.9 Subordination. 8 Section 2.10 Non-Recourse. ................................................................................................8 ARTICLE 3 CONSTRUCTION OF THE IMPROVEMENTS 9
Section 3.1 Performance of Work Pursuant to Laws; Prevailing Wages. ...........................9 Section 3.2 Bonds. ...............................................................................................................9 Section 3.3 Equal Opportunity...........................................................................................10 Section 3.4 Construction Responsibilities. ........................................................................10 Section 3.5 Mechanics Liens, Stop Notices, and Notices of Completion..........................10 Section 3.6 Inspections. .....................................................................................................10 ARTICLE 4 ONGOING OBLIGATIONS 11
Section 4.1 Information. ....................................................................................................11 Section 4.2 Records. ..........................................................................................................11 Section 4.3 Audits..............................................................................................................11 Section 4.4 Hazardous Materials. ......................................................................................11 Section 4.5 Maintenance and Damage...............................................................................13 Section 4.6 Fees and Taxes................................................................................................14 Section 4.7 Notice of Litigation.........................................................................................14 Section 4.8 Operation of Development as Affordable Housing. .......................................14 Section 4.9 Non-Discrimination. .......................................................................................14 Section 4.10 Pet-Friendly Housing Act of 2017................................................................14 Section 4.11 Insurance Requirements................................................................................15 Section 4.12 Transfer.........................................................................................................17 ARTICLE 5 DEFAULT AND REMEDIES 17
Section 5.1 Events of Default. ...........................................................................................17 Section 5.2 Remedies.........................................................................................................19
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TABLE OF CONTENTS
(continued)
Page
ii
Section 5.3 Right of Contest. .............................................................................................19 Section 5.4 Remedies Cumulative. ....................................................................................19 Section 5.5 Notice and Cure Rights of Investor. ...............................................................20 ARTICLE 6 GENERAL PROVISIONS 20
Section 6.1 Relationship of Parties. ...................................................................................20 Section 6.2 No Claims. ......................................................................................................20 Section 6.3 Amendments. ..................................................................................................21 Section 6.4 Entire Understanding of the Parties. ...............................................................21 Section 6.5 Indemnification...............................................................................................21 Section 6.6 Non-Liability of City Officials, Employees and Agents. ...............................21 Section 6.7 No Third Party Beneficiaries. .........................................................................21 Section 6.8 Action by the City...........................................................................................21 Section 6.9 Waivers. ..........................................................................................................21 Section 6.10 Notices, Demands and Communications. .....................................................22 Section 6.11 Applicable Law and Venue...........................................................................23 Section 6.12 Parties Bound................................................................................................23 Section 6.13 Attorneys' Fees..............................................................................................23 Section 6.14 Severability. ..................................................................................................23 Section 6.15 Force Majeure. ..............................................................................................23 Section 6.16 Conflict of Interest. .......................................................................................23 Section 6.17 Title of Parts and Sections. ...........................................................................24 Section 6.18 Operating Memoranda. .................................................................................24 Section 6.19 Multiple Originals; Counterpart....................................................................24 Exhibit A: Legal Description of the Property
Exhibit B: Development Budget
Exhibit C: Form of Promissory Note
Exhibit D: Form of Deed of Trust
Exhibit E: Form of Regulatory Agreement
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TABLE OF CONTENTS
(continued)
Page
ii
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1 PLHA Loan Agreement
PERMANENT LOCAL HOUSING ALLOCATION LOAN AGREEMENT
(U.S. VETS Housing Corporation – E Street Project)
This Permanent Local Housing Allocation Loan Agreement (the “Agreement”) is entered into as of November [ ], 2025 (the “Effective Date”), by and between the CITY OF SAN BERNARDINO, a California charter city and municipal corporation (the “City”), and E Street Veterans Apartments, LP, a California limited partnership (“Borrower”), with reference to the following facts, purposes and intentions.
RECITALS
A. These Recitals refer to and utilize certain capitalized terms that are defined in Article 1 of this Agreement. The Parties intend to refer to those definitions in connection with their use in these Recitals.
B. As of the Effective Date, Borrower owns the Property, which is generally located at 1351 N. E Street, San Bernardino, California 92405 (APN __________). The Property is more particularly described in the attached Exhibit A.
C. The Property currently consists of vacant land, and the Borrower intends to construct the Development using the Approved Financing.
D. The City desires to provide the Loan in the total amount of One Million Nine Hundred Eighty Five Thousand Four Hundred One Dollars and Zero Cents ($1,985,401.00). The Loan is comprised of Permanent Local Housing Allocation (“PLHA” or “PLHA Program”) funds.
E. The Loan is being made to finance development and other costs associated with the Development in order to help achieve financial feasibility for the Development and to increase the supply of affordable rental housing in the City.
F. The use of PLHA funds for the Loan in accordance with this Agreement is consistent with the PLHA Program in that the funds will expand affordable housing opportunities, and the supply of affordable housing, within the City.
NOW, THEREFORE, in consideration of the recitals hereof and the mutual promises and covenants set forth in this Agreement, the Parties agree as follows:
ARTICLE 1
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in this Agreement, unless otherwise provided:
(a) “Agreement” means this PLHA Loan Agreement.
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2 PLHA Loan Agreement
(b) “Annual Operating Expenses” means for each calendar year, the following costs reasonably and actually incurred for operation and maintenance of the Project: (i) Property taxes and assessments imposed on the Project; (ii) debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on the VHHP Funding; (iii) on-site service provider fees for tenant social services, provided the City have approved, in writing, the plan and budget for such services before such services begin; (iv) property management fees and reimbursements, on–site property management office expenses, and salaries of property management and maintenance personnel, not to exceed amounts that are standard in the industry and which are pursuant to a management contract approved by the City; (vi) fees for accounting, audit, legal and other services incurred by Borrower in the asset management of the Project (including, for the avoidance of doubt, an asset management fee payable to the Borrower’s general partner/managing member), not to exceed amounts that are standard in the industry; (ix) premiums for insurance required for the Property or the improvements thereon to satisfy the requirements of any lender of Approved Financing; (x) utility services not paid for directly by tenants, including water, sewer, and trash collection; (xi) maintenance and repair expenses and services; (xii) any annual license or certificate of occupancy fees required for operation of the Project; (xiii) security services; (xiv) advertising and marketing; (xv) cash deposited into any replacement reserve account or operating reserve account approved by the City, which approval shall not be unreasonably withheld, conditioned or delayed (it being acknowledged and agreed that the City approves the deposit of any property tax refunds received by Borrower into the Project’s replacement reserve account); (xvii) extraordinary operating costs specifically approved in writing by the City; (xix) payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves, and other ordinary and reasonable operating expenses approved in writing by the City and not listed above; (xx) and other ordinary and reasonable operating expenses approved in writing by the City and not listed above. Annual Operating Expenses do not include the following: depreciation, amortization, depletion or other non-cash expenses, initial deposits to capitalize a reserve account, any amount expended from a reserve account, and any capital cost associated with the Project. For purposes of determining Annual Operating Expenses, the following shall apply:
(1) The "property management fees" shall be limited to $60 per unit per month, increases at 3.0% per year.
(2) A minimum annual Replacement Reserve deposit is to be $500 per unit.
(3) The cost for tenant social services shall be a minimum of $3,212 per unit, increasing at 3% per year.
(4) A Limited Partner Asset Management Fee shall not exceed $5,000.00 per year, with allowable annual increases of 3% per year. (5) A Managing General Partner Asset Management Fee shall not exceed $10,000 per year, with allowable annual increases of 3% per year.
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3 PLHA Loan Agreement
(c) “Approved Financing” means all of the following loans, or other financing, obtained by Borrower and approved by the City for the purpose of financing the Development, in addition to the PLHA Loan:
(1) A construction loan from Banc of California in the approximate amount of $10,172,391 (the “Construction Loan”);
(2) A loan from the State of California Housing and Community Development Department in the approximate amount of $4,426,369.00, consisting of funds from the Veterans Housing and Homelessness Prevention Program (the “VHHP Funding”); (3) A sponsor loan from U.S. VETS Housing Corporation in the approximate amount $5,500,000.00;
(4) A separate loan from the City of San Bernardino in the amount of $2,014,599.00, which will be made pursuant to a LMIHAF Loan Agreement (the "LMIHAF Loan"), and disbursed at the conversion to permanent financing; (5) A revocable grant from the County of San Bernardino in the amount of $5,000,000.00; and
(6) A grant from Home Depot in the amount of $500,000.00. (d) “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.
(e) “Borrower” means E Street Veterans Apartments, LP, a California limited partnership, and its permitted successors and assigns.
(f) “City” means the City of San Bernardino, a municipal corporation. (g) “City Council” means the Mayor and City Council of the City. (h) “City Manager” means the City Manager of the City, or their designee. (i) “City Share of Residual Receipts” means, for the PLHA Loan, an amount equal to [11.8%] of Residual Receipts. The City Share of Residual Receipts represents the percentage of the PLHA Loan as compared to the total sum of: the PLHA Loan, the VHHP Funding, and the LMIHAF Loan.
(j) “Construction Lender” means Banc of California.
(k) “Default” has the meaning set forth in Section 5.1 below. (l) “Default Rate” has the meaning set forth in Section 2.2(b) below. (m) “Development” means the Property and the Improvements.
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4 PLHA Loan Agreement
(n) “Development Budget” means the proforma development budget, including sources and uses of funds, as approved by the City, and attached hereto and incorporated herein as Exhibit B.
(o) “Effective Date” means the first date set forth above. (p) “Force Majeure” means the occurrence of one or more of those events described in Section 6.15, permitting an extension of time for performance of obligations under this Agreement.
(q) “Gross Revenue” means for each calendar year, all revenue, income, receipts, and other consideration actually received from the operation and leasing of the Development. Gross Revenue includes, but is not limited to: (i) all rents, fees and charges paid by tenants; (ii) Section 8 payments or other rental subsidy payments received for the dwelling units; (iii) deposits forfeited by tenants; (iv) all cancellation fees; (v) price index adjustments and any other rental adjustments to leases or rental agreements; (vi) net proceeds from vending and laundry room machines; (vii) the proceeds of business interruption or similar insurance not paid to senior lenders; (viii) the proceeds of casualty insurance not used to rebuild the Development and not paid to senior lenders; and (ix) condemnation awards for a taking of part or all of the Development for a temporary period. Gross Revenue does not include tenants' security deposits, loan proceeds, capital contributions or similar advances. (r) “Hazardous Materials” has the meaning set forth in Section 4.4 below. (s) “Hazardous Materials Claim” has the meaning set forth in Section 4.4 below.
(t) “Hazardous Materials Law” has the meaning set forth in Section 4.4 below. (u) “HCD” means the State of California Department of Housing and Community Development.
(v) “HUD” means the United States Department of Housing and Urban Development.
(w) “Improvements” means the thirty (30) unit affordable rental housing complex, targeting special needs for homeless veterans with incomes between 30 and 50 percent of AMI to be developed pursuant to this Agreement, all ancillary improvements on the Property, and any other improvements constructed by, or on behalf of, Borrower on the Property during the Term.
(x) “Investor” means any investor selected by the Borrower to be admitted to the Borrower in order to provide the Tax Credit Equity Funds to the Development. (y) “Operating Memorandum” has the meaning given in Section 6.18 below.
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(z) “Parties” means the City and Borrower.
(aa) “Partnership Agreement” means the Agreement of Limited Partnership of the Borrower, as may be amended from time to time, that governs the operation and organization of the Borrower.
(bb) “PLHA-Assisted Units” means the units of the Development funded by the PLHA Funds. City and Borrower agree that fourteen (14), including nine (9) one-bedroom units and five (5) two-bedroom units),of the total thirty (30) units of the Development shall be PLHA- Assisted Units.
(cc) “PLHA Deed of Trust” or “Deed of Trust” means the deed of trust, in favor of the City, that will encumber the Property to secure repayment of the Loan. (dd) “PLHA Funds” means the funds received by the City from HCD pursuant to the PLHA Program.
(ee) “PLHA Guidelines” means the final guidelines promulgated by HCD for the PLHA Program dated October 2019.
(ff) “PLHA Loan” or “Loan” means the City loan to Borrower in the total principal amount of One Million Nine Hundred Eighty Five Thousand Four Hundred One Dollars ($1,985,401) provided pursuant to this Agreement. The Loan is comprised of PLHA Funds. (gg) “PLHA Loan Documents” means this Agreement, the PLHA Note, the PLHA Regulatory Agreement, the PLHA Deed of Trust, and any other document or agreement evidencing the PLHA Loan. The forms of the PLHA Note, PLHA Deed of Trust, and PLHA Regulatory Agreement are attached hereto as Exhibits C, D, and E, respectively. (hh) “PLHA Note” or “Note” means the promissory note that will evidence Borrower's obligation to repay the Loan.
(ii) “PLHA Program” means the Permanent Local Housing Allocation program established pursuant to California Health & Safety Code Section 50470 and the PLHA Guidelines. (jj) “PLHA Regulatory Agreement” or “Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants between the City and Borrower to be recorded against the Property in conjunction with the Loan pursuant to the PLHA Guidelines. (kk) “Property” means that certain real property located in the City of San Bernardino, California, as more particularly described in Exhibit A. (ll) “Residual Receipts” means for each calendar year, the amount by which Gross Revenue exceeds Annual Operating Expenses.
(mm) “Term” means the term of this Agreement, and the Loan, which commences as of the Effective Date and, unless terminated earlier pursuant to the provisions of
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this Agreement, ends on the later of: (i) fifty-seven (57) years after the date of the recordation of the PLHA Deed of Trust against the Property; or (ii) fifty-five (55) years after the date the first building located on the Property is constructed and obtains a certificate of occupancy, or equivalent document, from the City.
(nn) “Title Company” means __________, [Title Company Address], or such other nationally recognized title company reasonably acceptable to the Parties. (oo) “Transfer” has the meaning set forth in Section 4.11 below.
Section 1.2 Exhibits. The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Approved Development Budget
Exhibit C: Form of Promissory Note
Exhibit D: Form of Deed of Trust
Exhibit E: Form of Regulatory Agreement
ARTICLE 2
LOAN PROVISIONS
Section 2.1 Loan.Subject to satisfaction of the conditions set forth in Sections 2.3 and
2.5 below, the City shall lend to Borrower the PLHA Loan. The Borrower's obligation to repay the PLHA Loan is evidenced by the PLHA Note.
Section 2.2 Interest. Loan. Subject to the provisions of subsection (b) below, simple interest will accrue on the outstanding principal balance of the PLHA Loan at a per annum rate of interest equal to three percent (3%), commencing on the date the Borrower executes the PLHA Note.
(b) Default Rate. In the event of a Default, interest on the Loan will begin to accrue, as of the date of Default and continue until such time as the Loan is repaid in full or the Default is cured, at the default rate of the lesser of ten percent (10%), compounded annually, or the highest rate permitted by law (the “Default Rate”).
Section 2.3 Use of Loan Funds. The Borrower shall use the Loan funds consistent with the Approved Development Budget, which shall fulfill and be consistent with the Loan Documents. The Borrower shall not use the Loan funds for any other purposes without the prior written consent of the City. The Borrower will provide City with documentation that demonstrates that the PLHA Loan was used only for the purposes described in this section. The Loan shall be used in accordance with the PLHA Guidelines and the PLHA Program requirements.
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Section 2.4 Security. Borrower shall secure its obligation to repay the PLHA Loan, as evidenced by the City Note, by executing the PLHA Deed of Trust, and recording it as a lien against the Property.
Section 2.5 Conditions Precedent to Disbursement of the Loan. Conditions Precedent to Disbursement. The maximum amount of funds to be disbursed pursuant to this Section 2.5(a) shall not exceed the amount of the PLHA Loan. The City shall not be obligated to make any disbursements of Loan proceeds unless the following conditions precedent are satisfied:
(1) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement, or any other Loan Documents; (2) Borrower has delivered to the City a budget for the use of the Loan, if not documented on the Approved Development Budget attached as Exhibit B; (3) Borrower has furnished the City with evidence of the insurance coverage meeting the requirements of Section 4.10 below. (4) The Title Company is unconditionally and irrevocably committed to issuing an ALTA Lender's Policy of title insurance insuring the priority of the PLHA Deed of Trust in the amount of the PLHA Loan, subject only to such exceptions and exclusions as may be reasonably acceptable to the City, and containing such endorsements as the City may reasonably require;
(5) The Borrower has acquired the Property;
(6) The Borrower has executed the PLHA Note;
(7) The PLHA Deed of Trust and the PLHA Regulatory Agreement have been recorded against the Property or will be simultaneously recorded against the Property; and
(8) Borrower has closed all Approved Financing described in Section 1.1(b).
Section 2.6 Disbursement.
(a) Upon the satisfaction of the conditions precedent set forth above and upon receipt of the PLHA Funds from HCD, the City shall disburse ninety percent (90%) of the PLHA Loan to the Borrower.
(b) Upon completion of construction of the Project, provided that Borrower has complied with all terms and conditions of this Agreement, the City shall disburse the remaining ten percent (10%) of the PLHA Loan to the Borrower.
Section 2.7 Terms of Repayment.
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(a) Annual Residual Receipts Payment. Borrower shall make annual Residual Receipts Payments as follows: Commencing on the date that is one year after the first certificate of occupancy is issued for the Project, and on the anniversary of such date of each year thereafter during the Term, Borrower shall make a loan payment in an amount equal to the City Share of Residual Receipts for the prior calendar year (each such payment, an “Annual City Loan Payment”). The City shall apply all Annual City Loan Payments to the PLHA Loan as follows: (1) first, to accrued interest, and (2) second, to principal on the Loan. (b) Due in Full. All outstanding principal and accrued interest on the Loan shall be due in full on the earlier to occur of: (i) the date of any Default (following any applicable cure periods); or (ii) the expiration of the Term.
Section 2.8 Right to Prepay. Borrower may prepay the Loan at any time without premium or penalty. However, this Agreement and the PLHA Regulatory Agreement shall remain in effect for the entire Term regardless of any prepayment.
Section 2.9 Subordination.
(a). The City will agree to subordinate the PLHA Deed of Trust and the PLHA Regulatory Agreement to the deed of trust securing the loan of any Construction Lender, if any, and any documents securing or evidencing the VHHP Funding, subject to the satisfaction of the following conditions:
(1) All of the proceeds of the proposed loan, less any transaction costs, are used to provide acquisition, construction, and/or permanent financing for the Development; (2) The subordination agreement(s) is in a form acceptable to the City and is structured to minimize the risk that the PLHA Deed of Trust and/or PLHA Regulatory Agreement, and other City documents, will be extinguished as a result of a foreclosure by the holder of the loan. To satisfy this requirement, the subordination agreement must provide the City with adequate rights to cure any defaults by Borrower, including: (i) providing the City or its successor with copies of any notices of default at the same time and in the same manner as provided to Borrower; and (ii) providing the City with a cure period of sixty (60) days to cure any default.
Additionally, the subordination agreement will acknowledge the priority of the affordability restrictions set forth in the PLHA Regulatory Agreement. (b). Upon a decision by the City to subordinate the Deed of Trust and Regulatory Agreement, and the determination by the City Manager that the conditions in this Section have been satisfied, the City Manager, or their designee, will be authorized to execute the approved subordination agreement without the necessity of any further action or approval, and such agreement.
Section 2.10 Non-Recourse.Except as provided below, Borrower or the partners of the Borrower shall not have any direct or indirect personal liability for payment of the principal of, or interest on, the PLHA Loan or the performance of the covenants of Borrower under the PLHA Deed of Trust. The sole recourse of the City with respect to the principal of, or interest on, the PLHA Note and defaults by Borrower in the performance of its covenants under the Deed of Trust shall be to the Development; provided, however, that nothing contained in the foregoing limitation
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of liability shall: (a) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the City thereunder; or (b) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note and the performance of Borrower's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve Borrower of its obligation to indemnify the City under Sections 4.4, and 6.5 of this Agreement; or liability for: (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by Borrower other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Development.
ARTICLE 3
CONSTRUCTION OF THE IMPROVEMENTS
Section 3.1 Performance of Work Pursuant to Laws; Prevailing Wages. Compliance with Laws. Borrower shall cause all work performed in connection with the Development to be performed in compliance with: (i) all applicable laws, ordinances, rules and regulations of federal, state, City or municipal governments or agencies now in force or that may be enacted hereafter; and (ii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by the City/City or any governmental agency having jurisdiction, and Borrower shall be responsible to the City for the procurement and maintenance thereof, as may be required of Borrower and all entities engaged in work on the Development. (b) State Prevailing Wages. This Agreement has been prepared with the intention that the Loan meets the exceptions set forth in California Labor Code Section 1720(c) to the general requirement that state prevailing wages be paid in connection with construction work that is paid for in whole or in part out of public funds. Notwithstanding the foregoing, Borrower shall be solely responsible for determining whether any work related to this agreement is subject to payment of prevailing wages, and if so, for complying with all prevailing wage laws.
Section 3.2 Bonds.Prior to the commencement of construction, Borrower shall deliver to the City copies of labor and material bonds and performance bonds for the construction of the Development in an amount equal to one hundred percent (100%) of the scheduled cost of the Development, or such other security for the completion of construction of the Development acceptable to the Investor. Such performance bond (or other security provided) shall name the City as a co-obligee.
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Section 3.3 Equal Opportunity.During the construction of the Improvements there shall be no discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged in the construction work.
Section 3.4 Construction Responsibilities. Borrower is responsible for the coordination and scheduling of the work to be performed so that commencement and completion of the construction of the Improvements will take place in accordance with this Agreement. (b) Borrower is solely responsible for all aspects of Borrower's conduct in connection with the Development, including (but not limited to) the quality and suitability of the plans and specifications, the supervision of construction work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property managers. Any review or inspection undertaken by the City with reference to the Development is solely for the purpose of determining whether Borrower is properly discharging its obligations to the City, and should not be relied upon by Borrower or by any third parties as a warranty or representation by the City as to the quality of the design or construction of the Development and does not relieve Borrower, or its consultants, from any applicable requirement to obtain City/City approval and/or inspections.
Section 3.5 Mechanics Liens, Stop Notices, and Notices of Completion. If any claim of lien is filed against the Development or a stop notice affecting the Loan is served on the City or any other lender or other third party in connection with the Development, then Borrower shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the City a surety bond from a surety acceptable to the City in sufficient form and amount, or provide the City with other assurance satisfactory to the City that the claim of lien or stop notice will be paid or discharged. (b) If Borrower fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the City may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at Borrower's expense. Alternately, the City may require Borrower to immediately deposit with the City the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof.
The City may use such deposit to satisfy any claim or lien that is adversely determined against Borrower.
(c) Borrower shall file a valid notice of cessation or notice of completion upon cessation of construction of the Development for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims of lien against the Property and/or Development. Borrower authorizes the City, but without any obligation, to record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Property and/or Development.
Section 3.6 Inspections.Borrower shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection at the Development by the City and by public authorities during reasonable business hours for the purposes of determining compliance with this Agreement. Such inspections do not relieve Borrower, or its contractors, from any
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applicable requirement to obtain City inspections in connection with the construction of the Improvements.
ARTICLE 4
ONGOING OBLIGATIONS
Section 4.1 Information.Borrower shall provide any information reasonably requested by the City in connection with the Development.
Section 4.2 Records. Borrower shall keep and maintain at the Development, or elsewhere with the City's written consent, full, complete and appropriate books, record and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Borrower's compliance with the terms and provisions of this Agreement. Books, records and accounts relating to Borrower's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement. All such books, records, and accounts shall be open to and available for inspection and copying by the City, its auditors or other authorized representatives at reasonable intervals during normal business hours. Borrower shall permit any duly authorized representative of the City to inspect and copy such records. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan and must be kept accurate and current. Borrower shall maintain complete, accurate, and current records pertaining to the Development for a period of not less than ten (10) years after termination of this Agreement for all expenditures, and as reasonably requested by City in order to comply with mandated records retention laws. If the Borrower is unable to maintain these records, Borrower may transfer them to the City. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Loan is pending at the end of the record retention period stated herein, then Borrower shall retain such records until such action and all related issues are resolved.
Section 4.3 Audits.Borrower shall make available for examination at reasonable intervals and during normal business hours to the City and HCD all books, accounts, reports, files, and other papers or property with respect to all matters covered by this Agreement, and shall permit City to audit, examine, and make excerpts or transcripts from such records. City or HCD may make audits of any conditions relating to this Agreement.
Section 4.4 Hazardous Materials. Borrower shall keep and maintain the Development in compliance with, and shall not cause or permit the Development to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Development including, but not limited to, soil and ground water conditions. Borrower shall not use, generate, manufacture, store or dispose of on, under, or about the Development or transport to or from the Development any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” or “toxic substances” under any applicable federal or state laws or regulations (collectively referred to hereinafter as “Hazardous Materials”) except such of the
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foregoing as may be used in construction of the Development or customarily kept and used in and about residential property of this type.
(b) Borrower shall within one business day advise the City in writing if at any time it receives written notice of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Borrower or the Development pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, (“Hazardous Materials Law”); (ii) all claims made or threatened by any third party against Borrower or the Development relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as “Hazardous Materials Claims”); and (iii) Borrower's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Development that could cause the Development or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Development under any Hazardous Materials Law.
(c) The City shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Borrower.
Borrower shall indemnify and hold harmless the City and its commissioners, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Development including without limitation: (a) all reasonably foreseeable consequential damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the Development and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by the City in connection with clauses (a) and (b), including but not limited to reasonable attorneys' fees. This obligation to indemnify shall survive termination of this Agreement.
(d) Without the City's prior written consent, which shall not be unreasonably withheld, Borrower shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Development, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in the City's reasonable judgment, impair the value of the City's security hereunder; provided, however, that the City's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Development either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the City's consent before taking such action, provided that in such event Borrower shall notify the City as soon as practicable of any action so taken. The City agrees not to withhold its consent, where such consent is required hereunder, if either: (i) a particular remedial action is ordered by a court of competent jurisdiction; (ii) Borrower will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Borrower establishes to the reasonable satisfaction of the City that there is no reasonable alternative to such remedial action which would result in less impairment of the City's security hereunder; or (iv) the action has been agreed to by the City.
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(e) Borrower hereby acknowledges and agrees that: (i) this Section is intended as the City's written request for information (and Borrower's response) concerning the environmental condition of the Development as required by California Code of Civil Procedure Section 726.5; and (ii) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Development is intended by the Parties to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736. (f) In the event that any portion of the Development is determined to be “environmentally impaired” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an “affected parcel” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the City's or the trustee's rights and remedies under the Deed of Trust, the City may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to: (1) waive its lien on such environmentally impaired or affected portion of the Development; and (2) exercise, (a) the rights and remedies of an unsecured creditor, including reduction of its claim against Borrower to judgment, and (b) any other rights and remedies permitted by law. For purposes of determining the City right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), Borrower shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Development and Borrower knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the City in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Development is environmentally impaired, plus interest thereon at the rate specified in the Note until paid, shall be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the City upon its demand made at any time following the conclusion of such action.
Section 4.5 Maintenance and Damage. During the course of both the construction of the Improvements and operation of the Development, Borrower shall maintain the Development in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if Borrower has not cured such condition within thirty (30) days after receiving a notice from the City of such a condition, then in addition to any other rights available to the City, the City shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Development. (b) If economically feasible in the City's reasonable judgment after consultation with Borrower, if any improvement now or in the future on the Development is damaged or destroyed, then Borrower shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications approved by the City with such changes as have been approved by the City. Such work or repair shall be commenced no later than the later of one hundred twenty (120) days, or such longer period approved by the City in writing, after the damage or loss occurs or thirty (30) days following receipt of the insurance proceeds, and
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shall be complete within one (1) year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then Borrower shall make up the deficiency.
Section 4.6 Fees and Taxes.Borrower shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public City or utility company with respect to the Development to the extent owned by Borrower, and shall pay such charges prior to delinquency. However, Borrower shall not be required to pay and discharge any such charge so long as: (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings; and (b) if requested by the City, Borrower deposits with the City any funds or other forms of assurance that the City in good faith from time to time determines appropriate to protect the City from the consequences of the contest being unsuccessful.
Section 4.7 Notice of Litigation.Borrower shall promptly notify the City in writing of any actions or proceedings pending or threatened against or affecting Borrower and/or the Development, and of any claims or disputes that involve a material risk of litigation.
Section 4.8 Operation of Development as Affordable Housing.After completion of construction Borrower shall continuously operate and maintain the Development as affordable housing rented to income-eligible tenants in conformity with: (i) this Agreement; (ii) the PLHA Regulatory Agreement; (iii) the PLHA Guidelines and the applicable requirements of the standard agreement entered into between HCD and the City pursuant to the PLHA Guidelines; and (iv) any regulatory agreements recorded against the Property, including any other regulatory agreement in favor of the City.
Section 4.9 Non-Discrimination.Borrower covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, creed, ancestry, national origin, religion, sex, sexual orientation, marital status, age, disability (except to the extent necessary to comply with any Approved Financing), medical condition, familial status, source of income or any other arbitrary basis in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Development, nor shall Borrower or any person claiming under or through Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Development. The Borrower shall comply with all requirements contained in the Americans with Disabilities Act (“ADA”), the Fair Housing Amendments Act, the California Fair Employment and Housing Act, the Unruh Act, Government Code section 1135, Section 504 of the Rehabilitation Act, and all applicable regulations promulgated pursuant to those statutes, including 24 CFR Part 100, 24 CFR Part 8, and 28 CFR Part 35, in all of the Borrower’s activities with relation to the Development funded in part by this Agreement.
Section 4.10 Pet-Friendly Housing Act of 2017. Borrower agrees and understands that the Development is subject to the Pet Friendly Housing Act of 2017 (“PFHA”) (Health and Safety Code section 50466). Borrower agrees to operate the Development in accordance with the requirement of the PFHA, including, but not limited to, the requirement that residents of the
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Development shall be authorized to own or otherwise maintain one or more common household pets as set forth in Health and Safety Code section 50466, as may be amended from time to time.
Section 4.11 Insurance Requirements.Borrower shall ensure that the following insurance coverage is maintained throughout the Term:
(a) Workers’ Compensation coverage, in full compliance with California statutory requirements, for all employees of the Borrower and Employer's Liability in the minimum amount of $1,000,000. A Waiver of Subrogation endorsement in favor of the City is required.
(b) Comprehensive General Liability “occurrence” coverage in the minimum amount of $2,000,000 and $4,000,000 aggregate, including bodily injury, personal injury, broad form property damage, ongoing operations/premises liability, products completed operations, broad form blanket contractual liability and $100,000 fire legal liability. Borrower may satisfy this requirement by maintaining an umbrella insurance policy; provided, however, that the combination of primary and umbrella liability coverage must equal or exceed the minimum limits, both per occurrence and in the aggregate, stated in this subsection. (c) Commercial Automobile Liability coverage in the minimum amount of $1,000,000 CSL bodily injury & Property damage, including owned, non-owned and hired automobiles. Also include Uninsured / Underinsured Motorists coverage in the minimum amount of $100,000 when there are owned vehicles.
(d) Builder’s Risk and Property Insurance.
(1) Builder's Risk insurance during the course of construction (including, but not limited to, during the completion of all remodeling work), and upon completion of construction, property insurance, covering the Development, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, not to exceed $10,000.00, naming the City as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if required by applicable federal regulations.
(2) Additionally, the City will accept property insurance in lieu of Builder’s Risk insurance during the first 60 days of the Borrower’s ownership of the Property, even if the Property is vacant. Such coverage shall meet all of the same requirements set forth in subsection (d)(1), above, that apply to property insurance maintained upon completion of construction.
(3) Notwithstanding the foregoing, Borrower shall provide evidence of a Builders’ Risk policy that satisfies all of the requirements set forth in subsection (d)(1), above, within 45 days of the effective date of this Agreement. (e) Errors & Omissions coverage in the minimum amount of $1,000,000 each occurrence and $2,000,000 aggregate for engineers, architects, and surveyors rendering services in connection with the Development.
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(f) Fidelity insurance coverage in the minimum amount of $500,000, which meets the following requirements: the policy shall apply to the performance of any director, officer, or agent of the Borrower who signs or authorizes signatures on checks or drafts, or in any manner authorizes the disbursement of Project funds. Prior to the payment of program funds by City, the Borrower shall furnish City a certificate of insurance from an insurer admitted to do business in the State of California verifying that the Borrower carries such insurance coverage. Said insurance certificate shall certify that: 1) the City is named as a Loss Payee, as its interests may appear; and 2) that said coverage shall not be canceled or terminated without thirty (30) days’ prior written notice to the City. The Borrower hereby assigns to City any right it has to claim indemnification under such insurance policy.
(g) Borrower shall cause any general contractor, agent or subcontractor working on the Development under direct contract with Borrower or subcontract, to maintain insurance of the types and in at least the minimum amounts described in subsections (a), (b), and (c) above and shall require that such insurance shall meet all of the general requirements of subsections (i) and (j) below.
(h) The required insurance shall be provided under an occurrence form, and Borrower shall maintain such coverage continuously throughout the Term. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above. (i) Comprehensive General Liability and Comprehensive Automobile Liability insurance policies shall be endorsed to name as an additional insured the City, and its officers, agents, employees and members of the City Council.
(j) All policies and bonds shall contain: (i) an agreement that such policies are primary and non-contributing with any insurance that may be carried by the City; (ii) a provision that no act or omission of Borrower shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; (iii) a waiver by the insurer of all rights of subrogation against the City and its authorized parties in connection with any loss or damage thereby insured against; and (iv) a requirement to provide written notice to City at least thirty (30) days prior to any cancellation or termination of the policy or bond or of any other lapse in coverage. (k) All insurance companies providing coverage pursuant to this Section shall be insurance organizations authorized by the Insurance Commissioner of the State of California to transact the business of insurance in the State of California, and shall have an A. M. Best's rating of not less than “A:VII”.
(l) If, in connection with the use of the Loan, death, serious personal injury, or substantial property damage occurs, then Borrower shall immediately notify the City. Borrower shall promptly submit to the City a written report, in such form as may be required by the City, of all accidents which occur in connection with this Agreement. This report shall include the following information: (i) name and address of the injured or deceased person(s); (ii) name and address of Borrower's contractor or subcontractor, if any; (iii) name and address of Borrower's
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liability insurance carrier; and (iv) a detailed description of the accident and whether any of the Borrower's equipment, tools or material were involved.
Section 4.12 Transfer. For purposes of this Agreement, “Transfer” means any sale, assignment, or transfer, whether voluntary or involuntary, of: (i) any rights and/or duties under this Agreement; and/or (ii) any interest in the Development, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Development is transferred and Borrower retains title. The term “Transfer” excludes the leasing of any single unit in the Development to an occupant in compliance with the City Regulatory Agreement.
(b) No Transfer shall be permitted without the prior written consent of the City, which the City may withhold in its sole discretion; provided, however, that: (i) the Investor may Transfer its limited partnership interest to affiliates of Investor, without the consent of the City, so long as the managing general partner of the Borrower provides notice of such Transfer within thirty (30) days after such Transfer is effective; (ii) the Investor shall have the right to Transfer its limited partner interest, to any person without the City's consent; (iii) the Investor and the Construction Lender shall have the right to remove and replace a general partner of the Borrower in accordance with the Partnership Agreement provided that the substitute general partner must first be accepted by the City, which will not unreasonably reject or delay its acceptance of such substitute general partner, so long as Borrower provides thirty (30) days’ notice to City, which shall list the reasons for removal and the qualifications on which the new general partner was chosen, and shall provide written assurance that the change of the general partner will not affect Borrower's ability to satisfy the requirements of the City Regulatory Agreement or any of the other Loan Documents; and (iv) Construction Lender may foreclose or accept a deed in lieu of foreclosure, and subsequently sell the Property, without the consent of the City. (c) The City approves the grant of the security interests in the Development for the Approved Financing.
(d) Following the expiration of the fifteen (15)-year compliance period as described in Section 42(i)(1) of the Internal Revenue Code of 1986, as amended, (or at such other time period determined by the Borrower and the Investor), the City approves any Transfer by the Borrower of the Investor's limited partner interest, or the Development, to the general partner of the Borrower.
ARTICLE 5
DEFAULT AND REMEDIES
Section 5.1 Events of Default.Each of the following shall constitute a “Default” by Borrower under this Agreement:
(a) Failure to Make Payment. Failure of Borrower to repay the principal and any interest on the Loan that is due and payable to the City pursuant to the Loan Documents following written notice by the City of such failure and ten (10) days opportunity to cure.
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(b) Breach of Covenants. Failure of Borrower to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, including, but not limited to the failure to comply with the PLHA Guidelines, and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to Borrower; provided, however, that if a different period or notice requirement is specified under any other section of this Article 5, the specific provisions shall control. (c) Insolvency. A court having jurisdiction shall have made or entered any decree or order: (i) adjudging Borrower to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking reorganization of Borrower or seeking any arrangement for Borrower under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower in bankruptcy or insolvency or for any of their properties; (iv) directing the winding up or liquidation of Borrower, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days; or (v) Borrower shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note.
(d) Assignment; Attachment. Borrower shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this subsection shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note.
(e) Suspension; Dissolution. Borrower shall have voluntarily suspended its business or the dissolution of Borrower.
(f) Liens on Property and the Development. There shall be filed any claim of lien (other than liens approved in writing by the City) against the Development, or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the PLHA Loan and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (20) days without discharge or satisfaction thereof or provision therefore (including, without limitation, the posting of bonds) satisfactory to the City. (g) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Development.
(h) Unauthorized Transfer. Any Transfer other than as permitted by Section 4.11.
(i) Representation or Warranty Incorrect. Any representation or warranty of Borrower contained in this Agreement, or in any application, financial statement, certificate, or
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report submitted to the City in connection with any of the Loan Documents, proves to have been incorrect in any material and adverse respect when made. Provided, however, after completion of the construction of the Development, Default may be declared under this subsection only if the failure of representation or warranty also has a material adverse effect on the operation of the Development.
Section 5.2 Remedies.The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the City or automatically where so specified, relieve the City of any obligation to make or continue the Loan and shall give the City the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, including but not limited to the following:
(a) Acceleration of Note. The City shall have the right to cause all indebtedness of Borrower to the City under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. Borrower waives all right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the Deed of Trust. Borrower shall be liable to pay the City on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incurred by the City in connection with the collection of the Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the Loan. (b) Specific Performance. The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Borrower to perform its obligations and covenants under the Loan Documents or to enjoin acts or things which may be unlawful or in violation of the provisions of the Loan Documents.
(c) Right to Cure at Borrower's Expense. The City shall have the right (but not the obligation) to cure any monetary default by Borrower under a loan other than the Loan.
Borrower agrees to reimburse the City for any funds advanced by the City to cure a monetary default by Borrower upon demand therefore, together with interest thereon at the Default Rate from the date of expenditure until the date of reimbursement.
Section 5.3 Right of Contest.Borrower shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder.
Any such contest shall be prosecuted diligently and in a manner unprejudicial to the City or the rights of the City hereunder.
Section 5.4 Remedies Cumulative.No right, power, or remedy given to the City by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Borrower and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.
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Section 5.5 Notice and Cure Rights of Investor.The City agrees, after Investor's admission as limited partner to the Borrower, to provide the Investor a duplicate copy of all notices of default that the City may give to or serve in writing upon Borrower pursuant to the terms of the Loan Documents, at the address that Borrower shall provide to City upon its admission of the Investor, provided, the City shall have no liability to the Investor for its failure to do so.
Notwithstanding anything in the foregoing sentence to the contrary, the City shall not commence with any of its rights or remedies for such Default until notice has been provided to the Investor, except that notwithstanding anything to the contrary, the City may commence an action for specific performance to enforce any affordability or other non-monetary covenant contained in the City Regulatory Agreement or this Agreement at any time. The Investor shall have the right, but not the obligation, to cure any Default of Borrower set forth in such notice, during any applicable cure period described in the Loan Documents, and the City will accept tender of such cure as if delivered by Borrower. Notwithstanding anything herein to the contrary, in the event no cure period is provided for a Default under the Loan Documents, the Investor shall have a period of thirty (30) days to cure any such Default following its receipt of notice in accordance with Section 6.10 hereof. If the Investor is unable to cure a Default because Borrower's general partner is in bankruptcy and/or because the cure requires removal of the general partner of Borrower and the Investor is proceeding diligently to remove the general partner of Borrower in order to effect a cure of the Default, the cure period shall be extended for such reasonable time as is necessary for the Investor to effect a cure of the Default. The address of the Investor may be provided or changed upon written notice delivered to the City in the manner specified in Section 6.10.
ARTICLE 6
GENERAL PROVISIONS
Section 6.1 Relationship of Parties.Nothing contained in this Agreement shall be interpreted or understood by either of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City and Borrower or Borrower's agents, employees or contractors, and Borrower shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. Borrower has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. Borrower shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. Borrower agrees to be solely responsible for its own acts and those of its agents and employees.
Section 6.2 No Claims.Nothing contained in this Agreement shall create or justify any claim against the City, by any person Borrower may have employed or with whom Borrower may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the development of the Development, and
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Borrower shall include similar requirements in any contracts entered into for the development of the Development.
Section 6.3 Amendments.Except as otherwise provided in connection with Operating Memoranda executed pursuant to Section 6.18 below, no alteration or variation of the terms of this Agreement shall be valid unless agreed to in writing by the Parties.
Section 6.4 Entire Understanding of the Parties.This Agreement constitutes the entire understanding and agreement of the Parties with respect to the PLHA Loan.
Section 6.5 Indemnification. Except as directly caused by the City's gross negligence or willful misconduct, Borrower agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the City) the City, the City Council, and its officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of: (i) Borrower's performance or non-performance of its obligations under this Agreement; (ii) Borrower's ownership of the Development; (iii) the development, marketing, rental and operation of the Development; or (iv), any documents executed by Borrower in connection with the Development. The provisions of this Section shall survive termination of this Agreement.
Section 6.6 Non-Liability of City Officials, Employees and Agents.No member, official, employee or agent of the City shall be personally liable to Borrower, or any successor in interest, in the event of any Default or breach by the City, or for any amount which may become due to Borrower or its successor or on any obligation under the terms of this Agreement.
Section 6.7 No Third Party Beneficiaries.There shall be no third party beneficiaries to this Agreement except for the rights granted the Investor in Section 5.5 above and except for the rights granted to City after assignment of Loan as specified in Section 6.12(b) below.
Section 6.8 Action by the City.Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent, request, extension of time, waiver of condition, termination, or other action by the City is required or permitted under this Agreement, such action may be given, made, or taken by the City Manager without further approval by the City Council, and any such action shall be in writing.
Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that a sole discretion standard applies.
The City Manager is also hereby authorized to approve, on behalf of the City, requests by Borrower for reasonable extensions of time deadlines set forth in this Agreement. The City shall not unreasonably delay in reviewing and approving or disapproving any proposal by Borrower made in connection with this Agreement.
Section 6.9 Waivers.Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of Borrower or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Borrower to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations
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under this Agreement. Consent by the City to any act or omission by Borrower shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers.
Section 6.10 Notices, Demands and Communications.Formal notices, demands, and communications between the City and Borrower shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the City and Borrower as follows:
City:
With a copy to:
City of San Bernardino
201 N. E Street
San Bernardino, California 92401
Attn: Housing Division Manager
Phone: (909) 384-5135
City of San Bernardino
201 N. E Street
San Bernardino, California 92401
Attn: City Attorney
Borrower:
With a copy to:
E Street Veterans Apartments, LP
800 W. 6th Street, Suite 1505
Los Angeles, CA 90017
Attn: Executive Director
Phone: _______________
[Borrower’s Counsel]
[Address]
Attn: __________
Phone: __________
Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected party may from time to time designate by mail as provided in this Section, or by an Operating Memorandum, as defined below. Receipt shall be deemed to have occurred on the date shown on a written receipt for delivery or refusal of delivery. Copies of notices sent to Borrower shall also be sent to any successor investor limited partner of Borrower who requests such notices in writing and provides its address to the City.
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Section 6.11 Applicable Law and Venue.This Agreement shall be governed by California law. Any action brought claiming a breach of this Agreement or interpreting this Agreement shall be brought and venued in San Bernardino County, California.
Section 6.12 Parties Bound.Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, legal representatives, successors and assigns. This Agreement is intended to run with the land and shall bind Borrower and its successors and assigns in the Property and the Development for the entire Term, and the benefit hereof shall inure to the benefit of the City and its successors and assigns.
Section 6.13 Attorneys' Fees.If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing party will have the right to recover its reasonable attorneys' fees and costs of suit from the other party.
Section 6.14 Severability.If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
Section 6.15 Force Majeure.In addition to specific provisions of this Agreement, performance by either Party shall not be deemed to be in default where delays or defaults are due to acts of God, war, insurrection, strikes, lock-outs or other labor disturbances, one or more acts of a public enemy, war, riot, sabotage, blockade, embargo, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of transportation, court order, pandemic, epidemic, local public health emergency, delays or failures of performance by any governmental authority or utility company (other than the acts or failure to act of the City and so long as the party seeking the extension has adequately complied with the applicable processing requirements of such governmental City or utility company), delays resulting from changes in any applicable laws, rules, regulations, ordinances or codes, or a change in the interpretation thereof by any governing body with jurisdiction, or any other cause (other than lack of funds of Borrower or Borrower's inability to finance the construction of the Development) beyond the reasonable control or without the fault of the Party claiming an extension of time to perform or an inability of performance. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and the Party granting the extension agrees to the extension in writing. In no event shall the City be required to agree to cumulative delays in excess of one hundred eighty (180) days.
Section 6.16 Conflict of Interest. Except for approved eligible administrative or personnel costs, no person described in Subsection (b) below who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person's tenure. Borrower shall exercise due diligence to ensure that the prohibition in this subsection (a) is followed.
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(b) The conflict of interest provisions of subsection (a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the City, or any person related within the third (3rd) degree of such person.
Section 6.17 Title of Parts and Sections.Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall not be definitive in interpreting any part of the Agreement's provisions.
Section 6.18 Operating Memoranda.The Parties acknowledge that the provisions of this Agreement require a close degree of cooperation, and that new information and future events may demonstrate that changes are appropriate with respect to the details of performance of the Parties under this Agreement. The Parties desire, therefore, to retain a certain degree of flexibility with respect to the details of performance of those items covered in general terms under this Agreement.
If and when, from time to time during the term of this Agreement, the Parties find that refinements or adjustments regarding details of performance are necessary or appropriate, they may effectuate such refinements or adjustments through a memorandum (individually, an “Operating Memorandum,” and collectively, “Operating Memoranda”) approved by the Parties which, after execution, shall be attached to this Agreement as addenda and become a part hereof. This Agreement describes some, but not all, of the circumstances in which the preparation and execution of Operating Memoranda may be appropriate.
Operating Memoranda may be executed on the City's behalf by the City Manager or the City Manager's designee. Operating Memoranda shall not require prior notice or hearing, and shall not constitute an amendment to this Agreement. Any substantive or significant modifications to the terms and conditions of performance under this Agreement or the Note shall be processed as an amendment of this Agreement in accordance with Section 6.3 above.
Section 6.19 Multiple Originals; Counterpart.This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
Remainder of Page Left Intentionally Blank
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Signature Page to PLHA Loan Agreement
WHEREFORE, this Agreement has been entered into by the undersigned as of the Effective Date.
CITY:
CITY OF SAN BERNARDINO, a California charter city
and municipal corporation
_________________________________
Rochelle Clayton, Acting City Manager
APPROVED AS TO FORM:
_________________________________
Sonia R. Carvalho, City Attorney
Signatures continue on following page
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Signature Page to PLHA Loan Agreement
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Signature Page to PLHA Loan Agreement
Borrower's Signature Page to PLHA Loan Agreement
BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public benefit corporation,
its managing member
By: _______________________________
Lori Allgood, COO
By: Kingdom Development, Inc.,
a California nonprofit public benefit corporation,
its member
By: _______________________________
William Leach, President
APPROVED AS TO FORM:
_________________________________
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Signature Page to PLHA Loan Agreement
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EXHIBIT A
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
[INSERT LEGAL DESCRIPTION]
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EXHIBIT B
DEVELOPMENT BUDGET
[INSERT]
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EXHIBIT C
FORM OF PLHA NOTE
[ATTACHED]
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Exhibit C to PLHA Loan Agreement
Form of Promissory Note
PROMISSORY NOTE
(City PLHA Loan)
$1,985,401.00 San Bernardino, California
__________, 2025
FOR VALUE RECEIVED, the undersigned, E Street Veterans Apartments, LP, a California limited partnership (the “Borrower”), hereby promises to pay to the order of the City of San Bernardino, a California charter law city and municipal corporation (the “Holder”), whose address is [201 N. E Street, San Bernardino, California 92401], or the Holder's assignee, the principal amount equal to One Million Nine Hundred Eighty Five Thousand Four Hundred One Dollars ($1,985,401) plus interest thereon pursuant to Section 2 below.
1. Borrower’s Obligation. This Promissory Note (the “PLHA Note”) evidences the Borrower’s obligation to pay the Holder the principal amount of One Million Nine Hundred Eighty Five Thousand Four Hundred One Dollars ($1,985,401) (the “PLHA Loan”), pursuant to the PLHA Loan Agreement between Borrower and the Holder dated as of the date of this PLHA Note (the “PLHA Loan Agreement”). All capitalized terms not otherwise defined in this PLHA Note shall have the meanings set forth in the PLHA Loan Agreement.
2. Interest.
(a) Interest. Subject to the provisions of Section 2(b) below, the outstanding principal balance of the PLHA Loan shall bear simple interest at a rate of three percent (3%) per annum. Interest on the PLHA Loan shall accrue commencing on the date of this PLHA Note. (b) Default Interest. In the event of a Default, interest on the PLHA Loan shall begin to accrue, as of the date of Default and continuing until such time as the PLHA Loan funds are repaid in full or the Default is cured, at the Default Rate.
3. Terms of Repayment Requirements. Borrower shall repay the PLHA Loan as follows:
(a) Annual Residual Receipts Payment. Borrower shall make annual Residual Receipts Payments as follows: Borrower shall make annual Residual Receipts Payments as follows: Commencing on the date that is one year after the first certificate of occupancy is issued for the Project, and on the anniversary of such date of each year thereafter during the Term, Borrower shall make a loan payment in an amount equal to the City Share of Residual Receipts for the prior calendar year (each such payment, an “Annual City Loan Payment”). The City shall apply all Annual City Loan Payments to the PLHA Loan as follows: (1) first, to accrued interest, and (2) second, to principal on the Loan.
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Exhibit C to PLHA Loan Agreement
Form of Promissory Note
(b) Due in Full. All outstanding principal and accrued interest on the PLHA Loan shall be due in full on the earlier to occur of: (i) the date of any Default, or (ii) the expiration of the Term.
(c) Right to Prepay. Borrower may prepay, in whole or in part, the PLHA Loan at any time without premium or penalty. However, the PLHA Loan Agreement and the PLHA Regulatory Agreement shall remain in effect for the entire Term regardless of any prepayment.
Payments made shall be credited first against accrued interest and then against outstanding principal.
4. No Assumption. This PLHA Note shall not be assumable by the successors and assigns of Borrower without the prior written consent of the Holder, other than as set forth in the PLHA Loan Agreement.
5. Security. This PLHA Note is secured by the PLHA Deed of Trust.
6. Terms of Payment.
(a) U.S. Currency. All payments due under this PLHA Note shall be paid in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts.
(b) Location. All payments on this PLHA Note shall be paid to Holder at 201 N. E Street, San Bernardino, California 92401, or to such other place as the Holder of this PLHA Note may from time to time designate.
(c) No Expense to Holder. All payments on this PLHA Note shall be without expense to the Holder, and the Borrower agrees to pay all costs and expenses, including reasonable attorney’s fees and other professional service fees and costs of the Holder, incurred in connection with the payment of this PLHA Note and the release of any security hereof. (d) No Unlawful Interest. Notwithstanding any other provision of this PLHA Note, or any instrument securing the obligations of the Borrower under this PLHA Note, if, for any reason whatsoever, the payment of any sums by the Borrower pursuant to the terms of this PLHA Note would result in the payment of interest which would exceed the amount that the Holder may legally charge under the laws of the State of California, then the amount by which payments exceed the lawful interest rate shall automatically be deducted from the principal balance owing on this PLHA Note, so that in no event shall the Borrower be obligated under the terms of this PLHA Note to pay any interest which would exceed the lawful rate. (e) Nonrecourse. This PLHA Note shall be nonrecourse to the Borrower, pursuant to, and except as provided in, Section 2.10 of the PLHA Loan Agreement.
7. Default.
(a) Events of Default. Any of the following shall constitute an event of default under this PLHA Note:
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Exhibit C to PLHA Loan Agreement
Form of Promissory Note
(i) Any failure to pay, in full, any payment required under this PLHA Note within ten (10) days of written notice from the Holder to the Borrower that such payment is due;
(ii) Any failure in the performance by the Borrower of any term, condition, provision or covenant set forth in this PLHA Note subject to the notice and cure period set forth in the PLHA Loan Agreement;
(iii) The occurrence of any event of default under any of the PLHA Loan Documents or other instrument securing the obligations of the Borrower under this PLHA Note or under any other promissory note(s) hereafter issued by the Borrower to the Holder pursuant to the PLHA Loan Agreement or the PLHA Deed of Trust, subject to notice and cure periods, if any, set forth therein.
(b) Balance Due. Upon the occurrence of one or more of the foregoing events of default, the entire unpaid principal balance, together with all interest thereon, and together with all other sums then payable under this PLHA Note and the PLHA Deed of Trust shall at the option of the Holder become immediately due and payable upon written notice by the Holder to the Borrower without further demand.
(c) No Waiver. Holder’s failure to exercise the remedy set forth in Subsection 7(b) above or any other remedy provided by law upon the occurrence of one or more of the foregoing events of default shall not constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other default. The acceptance by Holder hereof of any payment which is less than the total of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of the Holder, except as and to the extent otherwise provided by law.
8. Waivers.
(a) Borrower’s Waivers. The Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, and notice of dishonor of this PLHA Note. The Borrower expressly agrees that this PLHA Note or any payment hereunder may be extended from time to time, and that the Holder may accept further security or release any security for this PLHA Note, all without in any way affecting the liability of the Borrower. (b) Extension is no Release of Liability. Any extension of time for payment of this PLHA Note or any installment hereof made by agreement of the Holder with any person now or hereafter liable for payment of this PLHA Note shall not operate to release, discharge, modify, change or affect the original liability of the Borrower under this PLHA Note, either in whole or in part.
Packet Page. 849
Exhibit C to PLHA Loan Agreement
Form of Promissory Note
(c) No Offset. The obligations of the Borrower under this PLHA Note shall be absolute and the Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this PLHA Note for any reason whatsoever.
9. Miscellaneous Provisions.
(a) Notices. All notices to the Holder or the Borrower shall be given in the manner and at the addresses set forth in the PLHA Loan Agreement, or to such addresses as the Holder and the Borrower may therein designate.
(b) Holder’s Costs. The Borrower promises to pay all costs and expenses, including reasonable attorney's fees and other professional service fees and costs, incurred by the Holder in the enforcement of the provisions of this PLHA Note, regardless of whether suit is filed to seek enforcement.
(c) Amendment in Writing. This PLHA Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.
(d) California Law. This PLHA Note shall be governed by and construed in accordance with the laws of the State of California.
(e) Severability. If any provision of this PLHA Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.
(f) Time. The times for the performance of any obligations hereunder shall be strictly construed, time being of the essence.
(g) Entire Agreement. This document, together with the PLHA Loan Documents, contains the entire agreement between the parties as to the PLHA Loan.
Remainder of page left intentionally blank
Packet Page. 850
Exhibit C to PLHA Loan Agreement
Form of Promissory Note
Packet Page. 851
BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public benefit corporation,
its managing member
By: _______________________________
Lori Allgood, COO
By: Kingdom Development, Inc.,
a California nonprofit public benefit corporation,
its member
By: _______________________________
William Leach, President
APPROVED AS TO FORM:
_________________________________
Packet Page. 852
Packet Page. 853
EXHIBIT D
FORM OF PLHA DEED OF TRUST
[ATTACHED]
Packet Page. 854
Packet Page. 855
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
APN: _________
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Bernardino
201 North E Street
San Bernardino, CA 92401
Attn: Housing Division Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§ 6103, 27383, and
27388.1
SPACE ABOVE THIS LINE FOR RECORDER’S USE
SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS
(U.S. VETS–PLHA Loan)
This Deed of Trust, is made as of _________, 2025, between E Street Veterans Apartments, LP, a California limited partnership, herein called Trustor, whose address is: [Trustor Address], [Title Company], a [California corporation], herein called Trustee, and the City of San Bernardino, a California charter city and municipal corporation, herein called Beneficiary, Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST, WITH POWER OF SALE, that property generally located at 1351 N. E Street, in the City of San Bernardino, California, described as follows:
SEE EXHIBIT A, incorporated herein by this reference.
TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority given to and conferred upon Beneficiary by paragraph C.10 of the provisions incorporated herein by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing:
(1) Performance of each agreement of Trustor incorporated by reference or contained herein. (2) Payment of the indebtedness evidenced by one promissory note of even date herewith, and any extension or renewal thereof, in the principal sum of up to One Million Nine Hundred Eighty Five Thousand Four Hundred One Dollars ($1,985,401) executed by Trustor in favor of Beneficiary or order. (3) Payment of such further sums as the then record owner of said property hereafter may borrow from Beneficiary, when evidenced by another note (or notes) reciting it is so secured.
Packet Page. 856
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
To Protect the Security of This Deed of Trust, Trustor Agrees: By the execution and delivery of this Deed of Trust and the note secured hereby, including the provisions set forth in EXHIBIT B and EXHIBIT C of this Deed of Trust, which are incorporated by this reference; that Trustor will observe and perform said provisions; and that the references to property, obligations and parties in said provisions shall be construed to refer to the property, obligations, and parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to it at its address.
BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public benefit corporation,
its managing member
By: _______________________________
Lori Allgood, COO
By: Kingdom Development, Inc.,
a California nonprofit public benefit corporation,
its member
By: _______________________________
William Leach, President
APPROVED AS TO FORM:
_________________________________
Packet Page. 857
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Packet Page. 858
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
__________________________________
Name:
__________________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
Packet Page. 859
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Packet Page. 860
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Exhibit A to Deed of Trust
Property Description
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, DESCRIBED AS
FOLLOWS:
[INSERT]
Packet Page. 861
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Packet Page. 862
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Exhibit B to Deed of Trust
Deed of Trust Addendum
B.1. Section 42 Requirements. Notwithstanding anything to the contrary contained in the Deed of Trust to which this Exhibit is attached or in any documents secured by this Deed of Trust or contained in any subordination agreement, the Beneficiary acknowledges and agrees that in the event of a foreclosure or deed-in-lieu of foreclosure (collectively, “Foreclosure”) with respect to the security encumbered by this Deed of Trust, the following rule contained in 26 U.S.C. Section 42(h)(6)(E)(ii), as amended, shall apply:
For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the Regulatory Agreement with the California Tax Credit Allocation Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Internal Revenue Code.
B.2. Casualty or Condemnation Proceeds. Notwithstanding anything to the contrary contained in the Deed of Trust to which this Exhibit is attached or in any documents secured by this Deed of Trust or contained in any subordination agreement, the Beneficiary acknowledges and agrees that, subject to the rights of all senior lenders, in the event of a casualty or condemnation of the Property, the Beneficiary shall permit the Trustor to use any proceeds from such event to rebuild or otherwise restore the improvements located on the Property.
B.3. Conflict. In the event of any conflict between this Exhibit and any other provision of the Deed of Trust, this Exhibit shall control. This Exhibit is hereby incorporated into, and made a part of, the Deed of Trust by this reference.
B.4. Standstill. Notwithstanding anything to the contrary in the promissory note (the “Note”) or this Deed of Trust, the Beneficiary must obtain the prior written consent of Borrower’s limited partner, which consent may be granted or denied in the sole and absolute discretion of Borrower’s limited partner, prior to the Trustor exercising any rights or remedies under the Note or this Deed of Trust.
B.5. Transfers. Notwithstanding anything to the contrary contained in this Deed of Trust or the Note, (a) any transfer permitted under the Trustor’s partnership agreement as of the date hereof (“Partnership Agreement”) shall be permitted (each, a “Permitted Transfer”), (b) no Permitted Transfer shall cause a default under this Deed of Trust or the Note, and (c) Beneficiary shall not receive any fee or other amounts from Trustor in connection with a Permitted Transfer.
Packet Page. 863
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
B.6. Refinancing of Senior Loans. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor may refinance any loans secured by deeds of trust senior in lien priority to the Deed of Trust (the “Senior Indebtedness”) without the prior consent of the Beneficiary (the “Refinanced Indebtedness”), and the Beneficiary hereby agrees to subordinate the loan secured by this Deed of Trust (the “Loan”) and all documents securing or evidencing the Loan, including, but not limited to, this Deed of Trust and the Note, to the Refinanced Indebtedness and the lien of any deed of trust or mortgage securing the Refinanced Indebtedness, provided that (i) the principal balance of the Refinanced Indebtedness does not exceed the then outstanding principal balance of the Senior Indebtedness plus the costs of refinancing the Senior Indebtedness and (ii) the scheduled maturity date of the Senior Indebtedness is not modified.
B.7. Notices. Notwithstanding anything to the contrary contained in this Deed of Trust, notices to the Trustor shall be given in the manner and to the addresses as described in the Note.
Packet Page. 864
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Packet Page. 865
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Exhibit C to Deed of Trust
Conventional Terms
To Protect the Security of This Deed of Trust, Trustor Agrees:
C.1 Subsequent to completion of construction/renovations of improvements, keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon: not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general.
C.2 To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default hereunder or invalidated any act done pursuant to such notice.
C.3 To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such actions or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed.
C.4 To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, the Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears
Packet Page. 866
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
to be prior to or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
C.5 To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.
That any award of damages in connection with any condemnation for public use or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him/her/them in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance.
C.6 That any award of damages in connection with any condemnation for public use or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him/her them in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance.
C.7 That by accepting payment of any sum secured hereby after its due date, beneficiary does not waive his right either to require prompt payment when due all other sums so secured or to declare default for failure so to pay.
C.8 That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said Note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may; reconvey any part of said property, consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof
C.9 That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto.” Five years after issuance of such full reconveyance, Trustee may destroy this document (unless directed in such request to retain it).
C.10 That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to
Packet Page. 867
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to adequacy of any security for the indebtedness hereby secured enter upon and take possession of said property or any part thereof, in his/her/their own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, 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.
C.11 That upon default by trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable 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 property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said Note 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, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said 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 said 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 property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters of facts shall be conclusive proof of the truthfulness thereof.
Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not the repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
Packet Page. 868
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
C.12 Beneficiary, or any successor in ownership of any indebtedness 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 the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, 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, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee.
C.13 That this Deed applies to inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
C.14 That trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
Packet Page. 869
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Packet Page. 870
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
ACCEPTANCE OF CONVEYANCE
Address: 201 N. E Street
San Bernardino, CA 92401
APN: __________
This instrument certifies that the interest in real property conveyed by the Deed of Trust with Assignment of Rents dated _________, 2025, from Trustor, E STREET VETERANS APARTMENTS, LP, a California limited partnership, to THE CITY OF SAN BERNARDINO, as “Beneficiary” thereunder, which Beneficiary is a municipal corporation of the State of California, is hereby accepted by the undersigned officer on behalf of the City of San Bernardino pursuant to the authority conferred by resolution of the City Council adopted on ________, 20__, and the Beneficiary consents to the recordation thereof by its duly authorized officer.
Signature must be notarized
Dated: _______
By: ___________________________
City Manager
APPROVED AS TO FORM:
Best Best & Krieger LLP
By: ___________________________
Sonia R. Carvalho
City Attorney
Packet Page. 871
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Packet Page. 872
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
ACKNOWLEDGMENT
STATE OF ____________
CITY OF ____________
On ___________________________ before me, _________________________________ personally appeared __________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledge to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of ____________ that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature __________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
Packet Page. 873
Exhibit D to PLHA Loan Agreement
Form of Deed of Trust
Packet Page. 874
Exhibit E to PLHA Loan Agreement
Form of Regulatory Agreement
EXHIBIT E
FORM OF PLHA REGULATORY AGREEMENT
[ATTACHED]
Recording Requested by
and when Recorded, return to:
City of San Bernardino
201 North E Street
San Bernardino, CA 92401
Attn: Housing Division Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§ 6103, 27383
ARTICLE 1
(SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE)
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(PLHA LOAN)
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (this “Agreement”) is made and entered as of _________, 2025, by and among the City of San Bernardino, a California charter city and municipal corporation (“City”), and E Street Veterans Apartments, LP, a California limited partnership (“Owner” or, collectively with City, “Parties”) with reference to the following:
RECITALS
A. Owner is the owner of certain real property generally located at 1351 N. E Street, in the City of San Bernardino, California (the “Property”). The Property is more particularly described in Exhibit A.
B. Pursuant to a Permanent Local Housing Allocation Loan Agreement between City and Owner ("PLHA Loan Agreement"), the City agreed to provide a loan to the Owner consisting of funds received by the City from the State of California Department of Housing and Community Development (“HCD”) pursuant to the Permanent Local Housing Allocation program (the “PLHA Program”) established pursuant to California Health & Safety Code Section 50470, for the construction and operation of an affordable housing development for veterans, generally consisting of thirty (30) multifamily housing units, including, one (1) manager’s unit(s), and related improvements on the Property (the “Project”).
Packet Page. 875
Exhibit E to PLHA Loan Agreement
Form of Regulatory Agreement
C. The purpose of this Agreement is to establish rental restrictions on fourteen (14) of the residential units within the Project for the period set forth in this Agreement, and to provide for the continuous availability of such restricted units as affordable housing to households at the income level specified below.
D. This Agreement shall run with the land and shall bind Owner and all of Owner’s successors in interest as owners of the Property.
NOW, THEREFORE, in consideration of the foregoing and the benefits secured by Owner and City, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. RECITALS. The foregoing recitals are a part of this Agreement.
2. DEFINITIONS. In addition to the terms defined elsewhere in the Agreement, the following terms shall have the following meetings:
A. “Affordable Unit(s)” or “Unit(s)” shall mean the fourteen (14) individual units, which shall be comprised of nine (9) one-bedroom units and five (5) two- bedroom units, that must be occupied by Very Low Income Households, pursuant to Section 4 below and are subject to the requirements of this Agreement.
B. “Very-Low Income Household” means an Adjusted Income that is less than or equal to the maximum income for very-low income households, adjusted for actual household size, as calculated pursuant to Health and Safety Code Section 50105 and published annually for San Bernardino County by HCD in Title 25, Section 6932, California Code of Regulations, or any successor provision.
C. “Median Income” shall mean the area median income adjusted for household size applicable to San Bernardino County as determined annually by HCD.
D. “Rent” shall mean the monthly total of payments by the tenants of a Unit for the following: use and occupancy of the Unit and associated facilities, including parking; the separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits; the allowance for utility costs paid by the tenant estimated in accordance with regulations promulgated by the California Tax Credit Allocation Committee, including electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service; any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than Owner, and paid by the Tenant.
E. “Tenant” shall mean an occupant of any one of the Units.
Any capitalized term not specifically defined herein shall have the meaning set forth in the
Packet Page. 876
Exhibit E to PLHA Loan Agreement
Form of Regulatory Agreement
PLHA Loan Agreement.
3. TERM OF AGREEMENT, RUNS WITH THE LAND. The term of this Agreement (the “Term”) shall commence on the date first written above, and this Agreement shall remain in full force and effect until the later of: (i) fifty-seven (57) years after the date of the recordation of this Agreement in the official records of San Bernardino County; or (ii) fifty-five (55) years after the date the first building located on the Property is constructed and obtains a certificate of occupancy, or equivalent document, from the City, unless terminated earlier by City pursuant to the terms of this Agreement or extended by the mutual consent of the Parties. The covenants set forth herein shall be covenants running with the land (as they may be amended from time to time) and shall inure to the benefit of and be enforceable by City while City maintains any interest in the Property and shall be binding upon Owner and/or any other party having any right, title or interest in the Property (including any portion thereof). By accepting title, Owner, or any other person who acquires an ownership interest in the Property, agrees (a) that all covenants and restrictions created by this Agreement are necessary in order to preserve the stock of affordable housing for Low Income Households and are reasonable in light of their purposes, and (b) to abide by each and every covenant and restriction herein.
4. RENTAL AND OCCUPANCY REQUIREMENTS
A. Throughout the Term, the Affordable Units in the Project shall be restricted for occupancy to Very-Low Income Households (other than any time prior to the completion of construction of the Project). The Very-Low Income Household is subject to annual certification and Owner is authorized to immediately terminate, subject to applicable law, the tenancy of any Household one or more of whose members misrepresented any fact material to the Household’s qualification as a Very-Low Income Household.
B. Annual Rents for the Affordable Units occupied by a Very-Low Income Household shall not exceed thirty percent (30%) of fifty percent (50%) of the Median Income, adjusted for number of bedrooms, assumed household size and applicable utility allowances ("Affordable Rent"), in accordance with California Health and Safety Code Section 50053 and any implementing regulations published by the California Department of Housing and Community Development. Subject to requirements of the PLHA Program, to the extent authorized by California Health and Safety Code Section 50053, the Affordable Rent may be determined by deed restrictions or regulatory agreements that restrict the Affordable Units pursuant to terms of public financing or public financial assistance.
C. Owner shall require each Affordable Unit to be subject to a rental agreement in the form which may be subject to approval by City and shall not lease any such Unit for less than six months or for more than one year.
D. Owner shall comply with all applicable requirements of the PLHA Program governing the use and occupancy of the Affordable Units.
Packet Page. 877
Exhibit E to PLHA Loan Agreement
Form of Regulatory Agreement
5. MARKETING. Owner shall prepare and implement a marketing plan, subject to prior approval by City, which approval shall not be unreasonably withheld or delayed, which specifies how Owner intends to market the Affordable Units to prospective Very-Low Income Households.
6. MAINTENANCE OF PROPERTY. Throughout the Term, at its sole cost and expense, Owner(s) shall keep the Property in good condition, order and repair and shall not commit waste or permit impairment, demolition or deterioration of the Property. City shall have the right to inspect the Property, provided the occupants of the Affordable Units are given written notice prior to any such inspection.
7. NO DISCRIMINATION. Owner covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, or genetic information in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Owner or any person claiming under or through Owner establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subleases or vendees in the Property, except to the extent required by any public funding source utilized by the Owner for the construction and operation of the Project in accordance with applicable law. Owner shall comply with all requirements contained in the Americans with Disabilities Act (“ADA”), the Fair Housing Amendments Act, the California Fair Employment and Housing Act, the Unruh Act, Government Code section 1135, Section 504 of the Rehabilitation Act, and all applicable regulations promulgated pursuant to those statutes, including 24 CFR Part 100, 24 CFR Part 8, and 28 CFR Part 35, in all of the Borrower’s activities with relation to the Project.
8. PET-FRIENDLY HOUSING ACT OF 2017. Owner agrees and understands that the Project is subject to the Pet Friendly Housing Act of 2017 (“PFHA”) (Health and Safety Code section 50466). Owner agrees to operate the Project in accordance with the requirement of the PFHA, including, but not limited to, the requirement that residents of the Project shall be authorized to own or otherwise maintain one or more common household pets as set forth in Health and Safety Code section 50466, as may be amended from time to time.
9. NO IMPAIRMENT OF LIEN; SUBORDINATION. No violation or breach of the covenants, conditions, restrictions, provisions or limitation contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted under this Agreement. Upon written request from Owner, to the extent necessary to obtain financing for the construction and operation of the Project, the City shall execute a subordination agreement in favor of lenders for other public financing sources, in a form reasonably acceptable to the Parties and any other third party requiring such subordination, providing for the subordination of this Agreement.
10. RESTRICTIONS ON TRANSFERS.
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A. For purposes of this Agreement, “Transfer” means any sale, assignment, or transfer, whether voluntary or involuntary, of: (i) any rights and/or duties under this Agreement; and/or (ii) any interest in the Project, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Project is transferred and Borrower retains title. The term “Transfer” excludes the leasing of any single unit in the Project to an occupant in compliance with this Agreement.
B. No Transfer shall be permitted without the prior written consent of the City, which the City may withhold in its sole discretion; provided, however, that: (i) the Investor may Transfer its limited partnership interest to affiliates of Investor, without the consent of the City, so long as the managing general partner of the Owner provides notice of such Transfer within thirty (30) days after such Transfer is effective; (ii) the Investor shall have the right to Transfer its limited partner interest, to any person without the City's consent; (iii) the Investor and the Construction Lender shall have the right to remove and replace a general partner of the Owner in accordance with the Partnership Agreement provided that the substitute general partner must first be accepted by the City, which will not unreasonably reject or delay its acceptance of such substitute general partner, so long as Owner provides thirty (30) days’ notice to City, which shall list the reasons for removal and the qualifications on which the new general partner was chosen, and shall provide written assurance that the change of the general partner will not affect Owner's ability to satisfy the requirements of this Agreement or any of the other Loan Documents; and (iv) Construction Lender may foreclose or accept a deed in lieu of foreclosure, and subsequently sell the Property, without the consent of the City.
C. The City approves the grant of the security interests in the Project for the Approved Financing.
D. Following the expiration of the fifteen (15)-year compliance period as described in Section 42(i)(1) of the Internal Revenue Code of 1986, as amended, (or at such other time period determined by the Borrower and the Investor), the City approves any Transfer by the Owner of the Investor's limited partner interest, or the Project, to the general partner of the Owner.
11. DEFAULTS AND REMEDIES. Upon substantial violation by Owner of this Agreement, City shall give written notice to Owner, and each limited partner of Owner, specifying the nature of the violation. If Owner or any limited partner does not correct the violation to the satisfaction of City, in its sole discretion, within a reasonable period of time (which shall not be less than thirty (30) days and shall not exceed ninety (90) days) after its receipt of such notice, or within such further time as City, in its sole discretion, determines is necessary to correct the violation, City may immediately declare a default under this Agreement and exercise any other
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remedies permitted at law or in equity. City agrees to accept cure from any limited partner of Owner.
12. SUCCESSOR AND ASSIGNS. This Agreement shall bind, and the benefit shall inure to, Owner and his or her heirs, legal representatives, executors, successors in interest and assigns, and City and its successors and assigns for the term of this Agreement as provided in Section 3.
13. SUPERIORITY OF AGREEMENT. Owner covenants that Owner has not, and will not, execute any other agreement with provisions contradictory to or in opposition of the provisions of this Agreement, and that, in any event, this Agreement is controlling as to the rights and obligations between Owner and City and their respective successors and assigns.
Notwithstanding the foregoing, in the event of a conflict between the provisions of this Agreement and the provisions of: (a) Section 42 of the Internal Revenue Code or regulations promulgated thereunder; (b) the regulatory agreement to be recorded as required by the California Tax Credit Allocation Committee and it regulations; or (c) any other regulatory agreement required to be recorded in connection with any other governmental funding utilized for the Project (collectively, the “Government Restrictions”); the Government Restrictions shall prevail.
14. INVALID PROVISIONS. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
15. CONTROLLING LAW. The terms of this Agreement shall be interpreted under the laws of the State of California.
16. NOTICES. All notices required herein shall be sent by certified mail, return receipt requested or express delivery service with a delivery receipt and shall be deemed to be effective as of the date received or the date delivery was refused as indicated on the return receipt as follows:
To Owner: E Street Veterans Apartments, LP
800 W. 6th Street, Suite 1505
Los Angeles, CA 90017
Attn: Executive Director
With a copy to: [Owner’s Counsel]
[Address]
Attn: _________
To City: City of San Bernardino
201 North E Street
San Bernardino, CA 92401
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Form of Regulatory Agreement
Attn: Housing Division Manager
Phone: (909) 384-5135
With copy to: City of San Bernardino
201 North E Street
San Bernardino, CA 92401
Attn: City Attorney
The Parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this Agreement.
17. EXHIBITS. Any exhibits referred to in this Agreement are incorporated in this Agreement by such reference.
18. INDEMNITY. Owner shall defend, indemnify, and hold harmless City, its officers, employees, agents, and assigns from any and all claims arising from or pertaining to the ownership, maintenance, or management of the Property and the Project.
19. COUNTERPARTS. This Agreement may be executed in counterpart signatures all of which shall constitute one and the same document.
[SIGNATURES ON FOLLOWING PAGE]
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* * * * * * * * * * * IN WITNESS WHEREOF the foregoing Agreement is executed on the date and year first above-written.
By:
ATTEST:
_______________________________
Genoveva Rocha, City Clerk
Approved as to Legal Form:
CITY ATTORNEY
By: ___________________________
Sonia R. Carvalho
CITY:
CITY OF SAN BERNARDINO, a California
charter city and municipal corporation
__________________________
Eric Levitt, City Manager
Signatures continue on following page
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BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public benefit corporation,
its managing member
By: _______________________________
Lori Allgood, COO
By: Kingdom Development, Inc.,
a California nonprofit public benefit corporation,
its member
By: _______________________________
William Leach, President
APPROVED AS TO FORM:
_________________________________
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ACKNOWLEDGMENT
STATE OF ____________
CITY OF ____________
On ___________________________ before me, _________________________________ personally appeared __________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledge to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of ____________ that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature __________________________ (Seal)
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
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ACKNOWLEDGMENT
STATE OF ____________
CITY OF ____________
On ___________________________ before me, _________________________________ personally appeared __________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledge to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of ____________ that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature __________________________ (Seal)
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
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ACKNOWLEDGMENT
STATE OF ____________
CITY OF ____________
On ___________________________ before me, _________________________________ personally appeared __________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledge to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of ____________ that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature __________________________ (Seal)
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
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Form of Regulatory Agreement
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EXHIBIT A
Legal Description of Property
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
[INSERT]
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LMIHAF LOAN AGREEMENT
By and Between the
CITY OF SAN BERNARDINO
And
E Street Veterans Apartments, LP,
a California limited partnership
[E Street Veteran Apartments (1351 N. E Street, San Bernardino, California)] Loan No: _____________________
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TABLE OF CONTENTS
Page
100. DEFINITIONS ...................................................................................................................2 101. Terms ......................................................................................................................2 200. LOAN AGREEMENT........................................................................................................8 201. Loan ........................................................................................................................8 202. Repayment of Loan.................................................................................................9 302.1 Maturity Date ...........................................................................................9 302.2 Interest Rate..............................................................................................9 302.3 Repayment Terms ....................................................................................9 203. Use of Funds...........................................................................................................9 204. Disbursement of Loan Funds..................................................................................9 204.1 Conditions Precedent to Disbursement ....................................................9 205. Repayment of Loan...............................................................................................10 206. City Not Liable .....................................................................................................10 300. REPRESENTATIONS AND WARRANTIES ................................................................10 301. City Representations.............................................................................................10 301.1 Authority ................................................................................................10 301.2 No Conflict.............................................................................................10 301.3 No Bankruptcy .......................................................................................10 301.4 No Condemnation ..................................................................................11 302. Borrower’s Representations..................................................................................11 302.1 Organization ...........................................................................................11 302.2 Authority to Borrow ...............................................................................11 302.3 Authority of Persons Executing Documents ..........................................11 302.4 No Conflict.............................................................................................11 302.5 Compliance with Laws; Consent and Approvals ...................................11 302.6 Valid Binding Agreement ......................................................................11 302.7 Pending Proceedings ..............................................................................11 302.8 Financial Statements ..............................................................................12 302.9 No Material Adverse Event....................................................................12 302.10 Accuracy.................................................................................................12 302.11 Disclosure of Information ......................................................................12 302.12 No Condemnation ..................................................................................12 302.13 Eligible Costs .........................................................................................12 302.14 FIRPTA ..................................................................................................12 400. COVENANTS OF BORROWER ....................................................................................12 401. Borrower’s Financing ...........................................................................................12 402. Reserved ...............................................................................................................13 403. Permits, Licenses and Approvals..........................................................................13 404. Notices to City ......................................................................................................13 405. Insurance...............................................................................................................13
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ii
405.1 Required Insurance.................................................................................14 405.2 Nature of Insurance ................................................................................14 405.3 Policy Requirements and Endorsements ................................................14 406. Indemnity..............................................................................................................16 406.1 Borrower Indemnity Obligations ...........................................................16 406.2 Independence of Insurance Obligations .................................................16 406.3 Survival of Indemnification and Defense Obligations...........................17 406.4 Indemnification Procedures....................................................................17 407. Financial Statements and Reports.........................................................................17 408. Books and Records ...............................................................................................18 409. Compliance...........................................................................................................18 500. REHABILITATION.........................................................................................................18 501. Covenant to Complete the Project ........................................................................18 502. Cost of Project ......................................................................................................18 600. USE AND MAINTENANCE OF THE PROPERTY; NONDISCRIMINATION; RIGHTS OF SECURITY FINANCING HOLDERS.......................................................18 601. Restrictive Covenants ...........................................................................................18 602. Maintenance of the Property.................................................................................18 603. Obligation to Refrain from Discrimination ..........................................................19 604. Form of Nondiscrimination and Nonsegregation Clause .....................................19 605. Rights of Access ...................................................................................................20 606. Effect and Duration of Covenants ........................................................................20 607. Recordation and Priority of Regulatory Agreement.............................................20 700. DEFAULTS AND REMEDIES .......................................................................................20 701. Default ..................................................................................................................20 702. Remedies...............................................................................................................21 702.1 City .........................................................................................................21 702.2 Borrower.................................................................................................21 703. Rights and Remedies Cumulative.........................................................................21 800. GENERAL PROVISIONS ...............................................................................................21 801. Notices ..................................................................................................................21 802. Applicable Law.....................................................................................................22 803. Enforced Delay; Extension of Times for Performance.........................................22 804. Transfers of Interest in Property or Agreement....................................................22 804.1 Prohibition..............................................................................................22 804.2 Permitted Transfers ................................................................................23 805. Relationship Between City and Borrower ............................................................23 806. Reserved ...............................................................................................................23
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iii
807. City Approvals and Actions..................................................................................24 808. Counterparts..........................................................................................................24 809. Integration.............................................................................................................24 810. Attorneys’ Fees.....................................................................................................24 811. Titles and Captions ...............................................................................................24 812. Interpretation.........................................................................................................24 813. No Waiver.............................................................................................................24 814. Modifications........................................................................................................24 815. Severability...........................................................................................................25 816. Incorporation of Recitals ......................................................................................25 817. Incorporation of Attachments ...............................................................................25 818. Legal Advice.........................................................................................................25 819. Time of Essence....................................................................................................25 820. Cooperation...........................................................................................................25 821. Conflicts of Interest ..............................................................................................25 822. Time for Acceptance of Agreement .....................................................................25 823. Agreement Binding...............................................................................................25 824. Non-Liability of Officials and Employees of City ...............................................26
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iii
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iv
ATTACHMENTS
Attachment No. 1 Legal Description of Property
Attachment No. 2 Loan Budget
Attachment No. 3 Promissory Note
Attachment No. 4 Deed of Trust
Attachment No. 5 Regulatory Agreement
Attachment No. 6 Notice of Affordability Restrictions
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iv
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LMIHAF LOAN AGREEMENT
BETWEEN THE
CITY OF SAN BERNARDINO
AND
E STREET VETERAN APARTMENTS, LP, A CALIFORNIA LIMITED
PARTNERSHIP
[E Street Veteran Apartments (1351 N. E Street, San Bernardino, California)] Loan Amount: $2,014,599
This LMIHAF Loan Agreement (“Agreement”) is entered into as of [DATE BASED ON CLOSE OF PERMANENT FINANCING], by and between the CITY OF SAN BERNARDINO, a California municipal corporation (“City”), and E Street Veteran Apartments, LP, a California limited partnership (“Borrower”).
RECITALS
A. City is a California municipal corporation that, as housing successor to the City’s former redevelopment agency, is, among other activities, involved in programs designed to develop affordable housing including the funding of acquisition, predevelopment and development of affordable housing projects.
B. In connection with this Agreement, Borrower has developed a thirty (30) unit rental housing project, which includes one (1) manager unit (the “Project”) located at 1351 North E Street in San Bernardino, California, APN [insert APN #], as more particularly described in Attachment No. 1, attached hereto and incorporated herein by this reference (the “Property”).
C. As part of the conditions of this Agreement, City is requiring that fifteen (15) in the Project be restricted for rental to Qualifying Households at an Affordable Rent, as more specifically set forth herein.
D. City, as housing successor to the City’s former redevelopment agency, intends to loan Borrower an amount not to exceed Two Million Fourteen Thousand Five Hundred Ninety- Nine Dollars ($2,014,599) (the “Loan”) as permanent financing for the Project from the City’s Low and Moderate Income Housing Asset Fund (“LMIHAF”), pursuant to Health and Safety Code section 34176.1, subdivision (a)(3)(A).
E. This Agreement and the other documents executed in connection with the Loan, including but not limited to the Promissory Note, Deed of Trust, as Regulatory Agreement, all as defined herein, are collectively referred to in this Agreement as the “Loan Documents”.
F. The California Environmental Quality Act (Public Resources Code Sections 21000 et seq.) (“CEQA”), imposes no conditions on the City’s consideration and approval of this Agreement, because funding of a proposal is not subject to environmental review under CEQA, as it does not constitute a “project,” does not commit the City to a definite course of action, does not constitute discretionary approval of a specific project, and will not result in a direct or reasonably
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2 foreseeable indirect physical change in the environment, and in the alternative is exempt from CEQA.
NOW, THEREFORE, City and Borrower hereby agree as follows:
AGREEMENT
100. DEFINITIONS
101.Terms. The following terms, as used in this Agreement, shall have the meaning ascribed them in this Section:
a.“Affordable Rent” means, in reference to each Affordable Unit, a level which is no higher than thirty percent (30%) of gross income for the household size appropriate for the applicable Affordable Unit.
b.“Affordable Units” means the fifteen (15), including twelve (12) one- bedroom units and three (3) two-bedroom units, of the thirty (30) residential units included in the Project that will be restricted by Borrower in the manner set forth in this Agreement and the Regulatory Agreement for rental to and occupancy by Qualifying Households in accordance with the terms and conditions of this Agreement and the Regulatory Agreement. c.“Additional Borrower Financing” has the meaning set forth in Section 401.
d.“Affiliate” means any other Person Controlling or Controlled by or under common Control with a specified Person.
e.“Agreement” means this Loan Agreement.
f.“Annual Loan Payment” has the meaning set forth in Section 202.3. g.“Annual Operating Expenses” means for each calendar year, the following costs reasonably and actually incurred for operation and maintenance of the Project: (i) Property taxes and assessments imposed on the Project; (ii) debt service currently due on a non- optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on the Additional Borrower Financing; (iii) on-site service provider fees for tenant social services, provided the City have approved, in writing, the plan and budget for such services before such services begin; (iv) property management fees and reimbursements, on–site property management, office expenses, and salaries of property management and maintenance personnel, not to exceed amounts that are standard in the industry and which are pursuant to a management contract approved by the City; (v) fees for accounting, audit, legal and other services incurred by Borrower in the asset management of the Project (including, for the avoidance of doubt, an asset management fee payable to the Borrower’s general partner/managing member), not to exceed amounts that are standard in the industry; (vi) premiums for insurance required for the Property or the improvements thereon to satisfy the requirements of any lender of Approved Financing; (vii) utility services not paid for directly by tenants, including water, sewer, and trash collection; (viii) maintenance and repair expenses and services; (ix) any annual license or certificate of occupancy fees required for
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3 operation of the Project; (x) security services; (xi) advertising and marketing; (xii) cash deposited into any replacement reserve account or operating reserve account approved by the City, which approval shall not be unreasonably withheld, conditioned or delayed (it being acknowledged and agreed that the City approves the deposit of any property tax refunds received by Borrower into the Project’s replacement reserve account); (xiii) extraordinary operating costs specifically approved in writing by the City; (xiv) payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves, and other ordinary and reasonable operating expenses approved in writing by the City and not listed above; (xv) and other ordinary and reasonable operating expenses approved in writing by the City and not listed above.
Annual Operating Expenses do not include the following: depreciation, amortization, depletion or other non-cash expenses, initial deposits to capitalize a reserve account, any amount expended from a reserve account, and any capital cost associated with the Project. For purposes of determining Annual Operating Expenses, the following shall apply:
(1) The “property management fees” shall be limited to $60 per unit per month, increases at 3.0% per year.
(2) A minimum annual Replacement Reserve deposit is to be $500 per unit. (3) The cost for tenant social services shall be a minimum of $3,212 per unit, increasing at 3% per year, or as otherwise approved by the City. (4) A Limited Partner Asset Management Fee shall not exceed $10,000.00 per year, with allowable annual increases of 3% per year.
(5) A Managing General Partner Asset Management Fee shall not exceed $10,000 per year, with allowable annual increases of 3% per year. h.“Approved Financing” means the Loan and the Additional Borrower Financing.
i.“Area Median Income” means the area median income for San Bernardino County as published by HUD, adjusted for household size. j.“Automobile Liability Insurance” means insurance coverage against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used by Borrower. Such insurance shall be provided by a business or commercial vehicle policy and may be provided through a combination of primary and excess or umbrella policies, all of which shall be subject to pre-approval by City, which approval shall not be unreasonably withheld.
k.“Borrower” has the meaning set forth in the introduction to this Agreement. l.“City” means the City of San Bernardino.
m.“City Share of Residual Receipts” means 7.50% of Residual Receipts.
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4 n.“Claim” means any claim, loss, cost, damage, expense, liability, Lien, action, cause of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge, award, assessment, fine or penalty of any kind. o.“Close of Escrow” means the date upon which all conditions of the City as set forth in Section 204.1 of this Agreement, along with any conditions required by any lender providing Additional Borrower Financing for the acquisition of the Property, but not later than ______________, 2027.
p.“Conditions Precedent to Disbursement” has the meaning set forth in Section 204.1.
q.“Control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person and contractually bind such Person, whether by ownership of Equity Interests, by contract, or otherwise. r.“Construction” means any alteration, construction, excavation, demolition, grading, development, expansion, reconstruction, redevelopment, repair, restoration, or other work affecting the Property.
s.“County” means the County of San Bernardino, California. t.“Deed of Trust” means that certain Deed of Trust executed by Borrower in substantially the form attached hereto as Attachment No. 4 that will encumber the Property to secure repayment of the Loan.
u.“Project” has the meaning set forth in Recital B.
v.“Disbursement” has the meaning set forth in Section 204.1. w.“Draw Request” has the meaning set forth in Section 204.2. x.“Effective Date” means the date first set forth in this Agreement above. y.“Environmental Claim” means any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including reasonable attorney’s fees and costs and costs of environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever, directly or indirectly, relating to or arising from any actual or alleged violation of any Environmental Law or Hazardous Substance Discharge.
z.“Environmental Document” means any exemption determination, any Negative Declaration (mitigated or otherwise) or any Environmental Impact Report (including any addendum or amendment to, or subsequent or supplemental Environmental Impact Report) required or permitted pursuant to the National Environmental Policy Act (codified as 42 U.S.C. §§ 4321 et seq.) or the California Environmental Quality Act (codified as Public Resources Code
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5 Sections 21000 et seq.), as applicable, to issue any discretionary Approval required to approve this Agreement.
aa.“Environmental Law” means any Federal or California law regarding any of the following at, in, under, above, or upon the Property: (a) air, environmental, ground water, or soil conditions; or (b) clean-up, remediation, control, disposal, generation, storage, release, discharge, transportation, use of, or liability or standards of conduct concerning, Hazardous Substances, as now or may, at any later time, be in effect. bb.“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such other entity as may be in general use by significant segments of the United States accounting profession, which are applicable to the circumstances as of the date of determination. cc.“Governmental Requirements” means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees, of the United States, the State of California, the County, City of San Bernardino, or any other political subdivision in which the Property is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, Borrower or the Property.
dd.“Gross Revenue” means for each calendar year, all revenue, income, receipts, and other consideration actually received from the operation and leasing of the Development. Gross Revenue includes, but is not limited to: (i) all rents, fees and charges paid by tenants; (ii) Section 8 payments or other rental subsidy payments received for the dwelling units; (iii) deposits forfeited by tenants; (iv) all cancellation fees; (v) price index adjustments and any other rental adjustments to leases or rental agreements; (vi) net proceeds from vending and laundry room machines; (vii) the proceeds of business interruption or similar insurance not paid to senior lenders; (viii) the proceeds of casualty insurance not used to rebuild the Development and not paid to senior lenders; and (ix) condemnation awards for a taking of part or all of the Development for a temporary period. Gross Revenue does not include tenants’ security deposits, loan proceeds, capital contributions or similar advances. ee.“Hazardous Substance” means any flammable substances, explosives, radioactive materials, asbestos, asbestos-containing materials, polychlorinated biphenyls, chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, medical wastes, toxic substances or related materials, explosives, petroleum, petroleum products and any “hazardous” or “toxic” material, substance or waste that is defined by those or similar terms or is regulated as such under any Law, including any material, substance or waste that is: (a) defined as a “hazardous substance” under Section 311 of the Water Pollution Control Act (33 U.S.C. § 1317), as amended; (b) substances designated as “hazardous substances” pursuant to 33 U.S.C. § 1321; (c) defined as a “hazardous waste” under Section 1004 of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., as amended; (d) defined as a “hazardous substance” or “hazardous waste” under Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund
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6 Reauthorization Act of 1986, 42 U.S.C. § 9601, et seq., or any so-called ‘superfund” or ‘superlien” law; (e) defined as a “pollutant” or “contaminant” under 42 U.S.C. § 9601(33); (f) defined as “hazardous waste” under 40 C.F.R. Part 260; (g) defined as a “hazardous chemical” under 29 C.F.R. Part 1910; (h) any matter within the definition of “hazardous substance” set forth in 15 U.S.C. § 1262; (i) any matter, waste or substance regulated under the Toxic Substances Control Act (“TSCA”) [15 U.S.C. Sections 2601, et seq.]; (j) any matter, waste or substance regulated under the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; (k) those substances listed in the United States Department of Transportation (DOT) Table [49 C.F.R. 172.101]; (l) any matter, waste or substances designated by the EPA, or any successor authority, as a hazardous substance [40 C.F.R. Part 302]; (m) any matter, waste or substances defined as “hazardous waste” in Section 25117 of the California Health and Safety Code; (n) any substance defined as a “hazardous substance” in Section 25316 of the California Health and Safety Code; (o) any matter, waste, or substance that is subject to any other Law regulating, relating to or imposing obligations, liability or standards of conduct concerning protection of human health, plant life, animal life, natural resources, property or the enjoyment of life or property free from the presence in the environment of any solid, liquid, gas, odor or any form of energy from whatever source; or (p) other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under Law or in the regulations adopted pursuant to said Law, including manure, asbestos, polychlorinated biphenyl, flammable explosives and radioactive material. Notwithstanding the foregoing, “Hazardous Substances” shall not include such products in quantities as are customarily used in the construction, maintenance, development or management of residential developments or associated buildings and grounds, or typically used in residential activities in a manner generally used in other comparable residential developments, or substances commonly ingested by a significant population living within the Development including, without limitation, alcohol, aspirin, tobacco and saccharine.
ff.“Hazardous Substance Discharge” means any deposit, discharge, generation, release, or spill of a Hazardous Substance that occurs at on, under, into or from the Property, or during transportation of any Hazardous Substance to or from the Property, or that arises at any time from the Construction, use or operation of the Development or any activities conducted at on, under or from the Property, whether or not caused by a Party. gg.“HCD” means the California State Department of Housing and Community Development.
hh.“HUD” means the U.S. Department of Housing and Urban Development. ii.“Insurance Requirements” means the insurance coverage requirements described in Section 405 of this Agreement.
jj.“Land Use Laws” has the meaning set forth in Section 402. kk.“Liability Insurance” means commercial general liability insurance against claims for bodily injury, personal injury, death, or property damage occurring upon, in, or about the Property, the Development or adjoining streets or passageways, at least as broad as Insurance Services Office Occurrence Form CG0001, with a minimum liability limit of Two Million Dollars ($2,000,000) for any one occurrence and which may be provided through a
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7 combination of primary and excess or umbrella insurance policies. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the Development or the general aggregate limit shall be twice the required minimum liability limit for any one occurrence.
ll. “Limited Partner” mean R4 ESCA Acquisition LP, a Delaware limited partnership, its successors and/or assigns.
mm.“Loan” has the meaning set forth in Section 201.
nn.“Loan Budget” means that certain budget for the use of the Loan proceeds that has been approved by the City, attached hereto and incorporated herein as Attachment No. 2. oo.“Loan Documents” means the documents, instruments and agreements evidencing and securing the Loan including, but not limited to, this Agreement, the Note, the Deed of Trust, the Notice of Affordability Restrictions and the Regulatory Agreement. pp.“Official Records” means the Official Records of the County of San Bernardino, State of California.
qq.“Person” means any association, corporation, governmental entity or agency, individual, joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated organization or other entity of any kind. rr.“Prevailing Wage Action” means any of the following: (a) any determination by the California Department of Industrial Relations that prevailing wage rates should have been paid, but were not; (b) any determination by the California Department of Industrial Relations that higher prevailing wage rates than those paid should have been paid; (c) any administrative or legal action or proceeding arising from any failure to comply with the Federal Davis-Bacon Act (codified as 40 U.S.C. §§ 3141 et seq.) or California Labor Code Sections 1720 through 1781, as amended from time to time, regarding prevailing wages, including maintaining certified payroll records; or (d) any administrative or legal action or proceeding to recover wage amounts at law or in equity.
ss.“Promissory Note” means that certain promissory note in the form attached hereto as Attachment No. 3, to be executed by Borrower, for the purpose of evidencing Borrower’s repayment obligations for the Loan.
tt.“Property” has the meaning set forth in Recital B. The Property is described in the Legal Description of Property, attached hereto and incorporated herein as Attachment No. 1.
uu.“Property Insurance” means insurance providing coverage for the Property and all improvements on or to the Property against loss, damage, or destruction by fire and other hazards encompassed under the broadest form of property insurance coverage then customarily used for like properties in the County of San Bernardino, in an amount equal to one hundred percent (100%) of the replacement value (without deduction for depreciation) of all improvements comprising the Development (excluding excavations and foundations) and in any
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8 event sufficient to avoid co-insurance and with no co-insurance penalty provision, with “ordinance or law” coverage. To the extent customary for like properties in the County of San Bernardino at the time, such insurance shall include coverage for explosion of steam and pressure boilers and similar apparatus located on the Property; an “increased cost of construction” endorsement; and an endorsement covering demolition and cost of debris removal, all subject to policy sublimits. vv.“Qualifying Household” means a household that: (1) intends to reside in an Affordable Unit; and (2) upon initial income certification, and each year thereafter (subject to the terms of the Regulatory Agreement), qualifies as an “extremely low income household” under California Health and Safety Code section 50106, or who otherwise meets the income restrictions as set forth in Section 2.3 of the Regulatory Agreement for the applicable Affordable Unit, based on a household size appropriate for the Affordable Unit. ww.“Regulatory Agreement” or “LMIHAF Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants executed by Borrower and City pursuant to this Agreement and to be recorded in the Official Records, in substantially the forms attached hereto as Attachment No. 5, for the purpose of ensuring that the Development shall be operated as an affordable multi-family residential development for the full term of the Loan in accordance with the terms of this Agreement.
xx.“Residual Receipts” means for each calendar year, the amount by which Gross Revenue exceeds Annual Operating Expenses.
yy. “Term” means the term of this Agreement, and the Loan, which commences as of the Effective Date and, unless terminated earlier pursuant to the provisions of this Agreement, ends on the later of: (i) fifty-seven (57) years after the date of the recordation of the Deed of Trust against the Property; or (ii) fifty-five (55) years after the date the first building located on the Property is constructed and obtains a certificate of occupancy, or equivalent document, from the City.
zz.“Third Person” means any Person that is not a Party, an Affiliate of a Party, or an elected official, officer, director, manager, shareholder, member, principal, partner, employee or agent of a Party.
aaa.“Workers Compensation Insurance” Workers compensation insurance complying with the provisions of California law and an employer’s liability insurance policy or endorsement to a liability insurance policy, with a minimum liability limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of Borrower. 200. LOAN AGREEMENT
201.Loan. City hereby agrees to make a loan (the “Loan”) to Borrower in a total amount not to exceed Two Million Fourteen Thousand Five Hundred Ninety-Nine Dollars ($2,014,599), subject to the terms and conditions of the Loan Documents. The Loan shall be evidenced by, and repayable in accordance with, the Promissory Note, which is secured by the Deed of Trust, recorded against the Property. The Promissory Note, Deed of Trust, and Regulatory Agreement for each property are attached as Attachments 3, 4, and 5. City and Borrower shall execute the Note, Deed of Trust, and Regulatory Agreement for the Property, concurrently with
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9 the execution of this Agreement by City, and the Deed of Trust and the Regulatory Agreement shall thereafter be recorded in the Official Records.
202.Repayment of Loan.
202.1Maturity Date. The Loan shall be due and payable in full at the earlier of (i) any sale of the Property by Borrower, to any Party other than an Affiliate of Borrower; (ii) an uncured Default under this Agreement; or (iii) Fifty-Five (55) years after the date of execution of the Promissory Note (the “Maturity Date”).
202.2Interest Rate. The Loan shall be repaid pursuant to the terms of the Promissory Note and in accordance with Section 202.3 of this Agreement, and shall bear simple interest at the rate of Three Percent Simple Interest (3%) per annum on the amounts disbursed to Borrower, commencing upon the date of the closing of the Loan. 202.3Repayment Terms. Commencing on April 1 of the year following the year when the Project converts to permanent financing , and on the anniversary of such date of each year thereafter during the Term, Borrower shall make a loan payment in an amount equal to the City Share of Residual Receipts for the prior calendar year (each such payment, an “Annual City Loan Payment”). The City shall apply all Annual City Loan Payments to the Loan as follows: (1) first, to accrued interest, and (2) second, to principal on the Loan. 203.Use of Funds. The proceeds from the Loan may be used only for permanent financing of the Project in accordance with the Loan Budget. 204.Disbursement of Loan Funds.
204.1Conditions Precedent to Disbursement. The City shall disburse the Loan Funds pursuant to this Agreement (the “Disbursement”) only following satisfaction or waiver by City of each and all of the conditions precedent, described below (“Conditions Precedent to Disbursement”), which are solely for the benefit of the City, and which shall be fulfilled or waived by the time periods provided for herein.
a.Subject to expiration of any applicable cure period, Borrower shall not be in default of any of its obligations under the terms of this Agreement. b.Execution and delivery of the Promissory Note, the Regulatory Agreement, the Notice of Affordability Restrictions and the Deed of Trust. c.With respect to the Regulatory Agreement, satisfaction of all requirements set forth in Section 607 of this Agreement.
d.Delivery of a binding commitment by a title insurance company acceptable to the City to issue a lender’s policy of title insurance with any endorsements the City may reasonably require, insuring the City in the principal amount of the Loan, of the validity and priority of the Deed of Trust upon the Property, subject only to liens and matters of record approved by the City in writing, and showing fee simple title to the Property in the name of the Borrower.
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10 e.Borrower shall have provided the City with a copy of the resolution of the Borrower approving and authorizing execution of this Agreement and all documents contemplated hereby on behalf of Borrower and with such other documentation required by the City regarding Borrower’s creation, status and authority to enter into this transaction. f.Borrower shall have provided City with a certificate showing it to be in good standing under the laws of the State of California. g.Borrower shall have delivered to City evidence that Borrower has obtained all approvals and commitments for the Additional Borrower Financing necessary and sufficient to obtain and close permanent financing for the Project.
h.Borrower shall have satisfied all of the applicable terms and conditions set forth in this Agreement, including without limitation providing evidence that it possesses the insurance required by Section 405 of this Agreement.
i.All of the representations and warranties made by the Borrower in this Agreement and in the Promissory Note, the Deed of Trust and the Regulatory Agreement shall be true and correct in all material respects as of the date of the Disbursement. j.Borrower shall have completed construction of the Project and closed on the permanent financing for the Project.
205.Due in Full. All outstanding principal and accrued interest on the Loan shall be due in full on the earlier to occur of: (i) the date of any Default (following any applicable cure periods); or (ii) the expiration of the Term.
206.City Not Liable. In no event shall City be liable to Borrower or any other party, including but not limited to any lender, contractor or subcontractor, for any damage whatsoever which may result in whole or in part from any action or inaction of City hereunder, including without limitation, failure or delay in making any disbursement of Loan funds, except to the extent of City’s gross negligence or willful misconduct.
300. REPRESENTATIONS AND WARRANTIES
301.City Representations. City represents and warrants to Borrower as follows:
301.1Authority. City has full power and authority to execute and deliver this Agreement, to execute and deliver all applicable Loan Documents and to perform and observe the terms and provisions of all of the above.
301.2No Conflict. To the best of City’s knowledge, City’s execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound. 301.3No Bankruptcy. City is not the subject of a bankruptcy proceeding.
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11 301.4No Condemnation. No condemnation proceeding or moratorium is pending or threatened against the Property or any portion thereof that would impair the use, occupancy or full operation of the Property in any manner whatsoever. 302.Borrower’s Representations. To induce City to enter into the Loan and provide the Loan Funds pursuant hereto, Borrower hereby makes the following representations and warranties to City. The Borrower shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true, immediately provide written notice of such fact or condition to City.
302.1Organization. Borrower is a duly organized limited partnership in good standing under the laws of the State of California. The copy of the certificate of limited partnership agreement which have been delivered to City is a true and complete copy of the original, as amended to the date of Borrower’s execution of this Agreement. 302.2Authority to Borrow. Borrower has full power and authority to execute and deliver this Agreement, to make and accept the Loan contemplated hereunder, to execute and deliver all applicable Loan Documents and to perform and observe the terms and provisions of all of the above.
302.3Authority of Persons Executing Documents. The applicable Loan Documents have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all actions required under the Borrower’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of the Loan Documents have been duly taken. 302.4No Conflict. The execution, delivery and performance by Borrower of the Loan Documents to which it is a party will not (i) violate any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect having applicability to Borrower or the Property; or (ii) result in a breach of or constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which Borrower is a party or by which any of its properties may be bound or, except as specifically contemplated herein, result in the creation of any lien on any asset of Borrower.
302.5Compliance with Laws; Consent and Approvals. Borrower shall comply with all Governmental Requirements, including all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency as applicable.
302.6Valid Binding Agreement. The Loan Documents executed by Borrower constitute, or if not yet executed, will constitute when so executed, legal, valid and binding obligations of Borrower enforceable by and against it in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the rights of creditors generally and general principals of equity. 302.7Pending Proceedings. Borrower is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there
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12 are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against or affecting Borrower, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Borrower, materially and adversely affect Borrower’s ability to repay the Loan.
302.8Financial Statements. All financial statements and information delivered to City by or on behalf of Borrower, including information relating to the financial condition of Borrower and the Property, fairly and accurately represent the financial condition of the subject thereof and have been prepared in accordance with GAAP, consistently applied, or another sound accounting practice consistently applied as previously submitted by Borrower to City and approved by City. Borrower acknowledges and agrees that City may request and obtain additional information from third parties.
302.9No Material Adverse Event. There has been no material adverse change in the value or physical condition of the Property or in the financial condition of Borrower since the dates of the latest financial statements of Borrower furnished to City, and except as otherwise disclosed to City in a specified writing, Borrower has not entered into any material transaction that is not disclosed in such financial statements.
302.10Accuracy. All reports, documents, instruments, information and forms of evidence delivered to City concerning the Loan or security for the Loan or required by the Loan Documents are accurate, correct and sufficiently complete to give City true and accurate knowledge of their subject matter and do not contain any misrepresentation or omission. 302.11Disclosure of Information. All material information concerning the Property known to Borrower, or that should have been known to Borrower in the exercise of reasonable care, has been disclosed to City. There are no facts or information known to Borrower, or that should have been known to Borrower in the exercise of reasonable care, that would make any of the information furnished to City by Borrower inaccurate, incomplete, or misleading in any material respect.
302.12No Condemnation. No condemnation proceeding or moratorium is pending or threatened against the Property or any portion thereof that would impair the use, occupancy or full operation of the Property in any manner whatsoever. 302.13Eligible Costs. The proceeds of the Loan shall be used only for the acquisition of the Property.
302.14FIRPTA. Borrower is not a “Foreign Person” within the meaning of FIRPTA, or is exempt from the provisions of FIRPTA, and Borrower has complied and will comply with all of the requirements under FIRPTA.
400. COVENANTS OF BORROWER
401.Borrower’s Financing. In addition to the Loan provided for herein, the Borrower has secured or will secure financing (collectively, the “Additional Borrower Financing”), as follows:
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13 a.A construction loan from Banc of California in the approximate amount of $10,172,391 (the “Construction Loan”), which shall be satisfied at conversion to permanent financing;
b.A loan from the State of California Housing and Community Development Department in the approximate amount of $4,426,369.00, consisting of funds from the Veterans Housing and Homelessness Prevention Program (the “VHHP Funding”); c.A sponsor loan from U.S. VETS Housing Corporation in the approximate amount $500,000.00;
d.A separate loan from the City of San Bernardino using Permanent Local Affordable Housing funds (the “PLHA Loan”) in the amount of One Million Nine Hundred Eighty Five Thousand Four Hundred One Dollars and Zero Cents ($1,985,401.00), which will be made pursuant to a PLHA Loan Agreement (the “PLHA Loan”); and, e.A loan from the County of San Bernardino in the amount of $5,000,000.00.
402.Compliance with Regulatory Agreement; Affordable Unit Mix. Borrower shall operate the Property in accordance with the Regulatory Agreement. 402.1The Project shall include the Affordable Units that are restricted for Affordable Rent in accordance with the Regulatory Agreement imposed as part of the LMIHAF Loan and the PLHA Loan. As required by the PLHA Loan, a PLHA Regulatory Agreement was recorded against the Property on or about November ___, 2025 (the “PLHA Regulatory Agreement”).
402.2The Regulatory Agreement and the LMIHAF Loan apply to fifteen (15) Affordable Units, and the PLHA Loan and PLHA Regulatory Agreement apply to fourteen (14) Affordable Units as reflected in the unit matrix below:
# UNITS BEDROOMS %AMI RESTRICTIONS
12 1 30% LMIHAF Regulatory Agreement
9 1 50% PLHA Regulatory Agreement
3 2 30% LMIHAF Regulatory Agreement
5 2 50% PLHA Regulatory Agreement
403.Permits, Licenses and Approvals. Borrower shall properly obtain, comply with and keep in effect all permits, licenses and approvals which are required to be obtained in order to acquire the Property and/or develop the Project.
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14 404.Notices to City. Borrower shall promptly notify City in writing of:
a.Any litigation affecting Borrower, where the amount claimed is One Hundred Thousand Dollars ($100,000.00) or more;
b.Any communication, whether written or oral, that Borrower may receive from any governmental, judicial or legal authority, giving notice of any claim or assertion that any portion of the Property or the Development fail in any respect to comply with any Governmental Requirement;
c.Any default by any contractor, design professional, subcontractor, material supplier or surety in the performance of its or their obligations with respect to the construction, or any material adverse change in the financial condition or operations of any of them; d.Any material adverse change in the physical condition of the Property (including any damage suffered as a result of earthquakes or floods), or in Borrower’s business condition (financial or otherwise), operations, properties or prospects, or Borrower’s ability to repay the Loan; or
e.The institution of any litigation, arbitration or governmental proceeding, or the rendering of a judgment or decision in such litigation or proceeding, which may cause a material adverse effect to Borrower, the Property or the completion of the construction. 405.Insurance.
405.1Required Insurance. To protect City against all insurable Claims resulting from the actions of Borrower in connection with this Agreement, the Property and the Project, at the sole cost and expense of Borrower, Borrower shall maintain for the Development the following insurance (or its then reasonably available equivalent): (a) Liability Insurance; (b) Automobile Liability Insurance; (c) Property Insurance; and (d) Workers Compensation Insurance. 405.2Nature of Insurance. All Liability Insurance, Property Insurance, Workers Compensation Insurance and Automobile Liability Insurance policies required by this Agreement shall be issued by carriers that: (a) are listed in the then current “Best’s Key Rating Guide—Property/Casualty—United States & Canada” publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of “A-” and a minimum financial size category of “XI” (exception may be made for the California Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in California.
A Party may provide any insurance under a “blanket” or “umbrella” insurance policy, provided that: (i) such policy or a certificate of such policy shall specify the amount(s) of the total insurance allocated to the Property and the Development, which amount(s) shall equal or exceed the amount(s) required by this Agreement; and (ii) such policy otherwise complies with this Agreement.
405.3Policy Requirements and Endorsements. All insurance policies required by this Agreement shall contain (by endorsement or otherwise) the following provisions:
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15 a.Insured. Liability Insurance and Automobile Liability Insurance policies shall name City or its successor in interest, as applicable, as “additional insured.” Property Insurance policy shall name City as a “loss payee.” The coverage afforded to City shall be at least as broad as that afforded to Borrower regarding the Property and may not contain any terms, conditions, exclusions, or limitations applicable to City that do not apply to Borrower. b.Primary Coverage. Any insurance or self-insurance maintained by City or its successor in interest shall be in excess of all insurance required under this Agreement and shall not contribute to any insurance required under this Agreement. c.Contractual Liability. Liability Insurance policies shall contain contractual liability coverage, for Borrower’s indemnity obligations under this Agreement. Borrower’s obtaining or failure to obtain such contractual liability coverage shall not relieve Borrower from nor satisfy any indemnity obligation of Borrower under this Agreement. d.Deliveries to City. Borrower shall deliver to City evidence of all insurance policies required by this Agreement as set forth in Section 405.1. No later than three (3) days before any insurance required by this Agreement expires, is cancelled or its liability limits are reduced or exhausted, Borrower shall deliver to City evidence of that Party’s maintenance of all insurance this Agreement requires. Each insurance policy required by this Agreement shall be endorsed to state that coverage shall not be cancelled, suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar days’ advance written notice of such action has been given to City by certified mail, return receipt requested; provided, however, that thirty (30) days advance written notice shall be required for any such action arising from non-payment of the premium for the insurance. Phrases such as “endeavor to” and “but failure to mail such Notice shall impose no obligation or liability of any kind upon the company” shall not be included in the cancellation wording of any certificates or policies of insurance applicable to City pursuant to this Agreement.
e.Waiver of Certain Claims. Borrower shall cause each insurance carrier providing any Liability Insurance, Worker’s Compensation Insurance, Automobile Liability Insurance or Property Insurance coverage under this Agreement to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to City, if not already in the policy. To the extent that Borrower obtains insurance with a Waiver of Subrogation, the Parties release each other, and their respective authorized representatives, from any Claims for damage to any Person or property to the extent such Claims are paid by such insurance policies obtained pursuant to and in satisfaction of the provisions of this Agreement.
f.No Claims Made Coverage. None of the insurance coverage required under this Agreement may be written on a claims-made basis.
g.Fully Paid and Non-Assessable. All insurance obtained and maintained by Borrower pursuant to this Section 405 shall be fully paid for and non-assessable. However, such insurance policies may be subject to insurer audits.
h.City Option to Obtain Coverage. During the continuance of a Default arising from the failure of Borrower to carry any insurance required by this Agreement, City may,
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16 at its sole option, purchase any such required insurance coverage and City shall be entitled to immediate payment from the defaulting Party of any premiums and associated reasonable costs paid by City for such insurance coverage. Any amount becoming due and payable to City under this Section 405 that is not paid within fifteen (15) calendar days after written demand from City for payment of such amount, within an explanation of the amounts demanded, will bear interest from the date of the demand at the rate of eight percent (8%) per annum or the maximum interest rate allowed by applicable law, whichever is less. Any election by City to purchase or not to purchase insurance otherwise required by the terms of this Agreement to be carried by any Party shall not relieve that Party of its obligation to obtain and maintain any insurance coverage required by this Agreement.
i.Separation of Insured. All Liability Insurance and Automobile Liability Insurance shall provide for separation of insured for Borrower and the City. Insurance policies obtained in satisfaction of or in accordance with the requirements of this Agreement may provide a cross-suits exclusion for suits between named insured persons, but shall not exclude suits between named insured persons and additional insured persons. j.Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions under insurance policies required by this Agreement shall be declared to and approved by City. Borrower shall pay all such deductibles or self-insured retentions regarding City or, alternatively, the insurer under each such insurance policy shall eliminate such deductibles or self- insured retentions with respect to City.
k.No Separate Insurance. Borrower shall carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Agreement, unless City is made an additional insured thereon, as required by this Agreement. l.Insurance Independent of Indemnification. The insurance requirements of this Agreement are independent of the Parties” indemnification and other obligations under this Agreement and shall not be construed or interpreted in any way to satisfy, restrict, limit, or modify the Parties” indemnification or other obligations or to limit the Parties” liability under this Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall the provision of such insurance preclude City from taking such other actions as are available to it under any other provision of this Agreement or otherwise at law or in equity.
406.Indemnity.
406.1Borrower Indemnity Obligations. Borrower shall indemnify City against any claim to the extent such claim arises from any wrongful intentional act, fraud, or negligence of Borrower. Borrower shall also indemnify City against any and all of the following: (a) any application made by or at Borrower’s request; (b) any agreements that Borrower (or anyone claiming by or through Borrower) makes with a Third Person regarding the Property or the Project; (c) any workers compensation claim or determination relating to any employee of Borrower or their contractors; (d) any Prevailing Wage Action relating to this Agreement or the Project; (e) any claim for relocation benefits arising from the Project conducted at the Development; and (f) any Environmental Claim attributable to any action or failure to act by Borrower. Borrower assumes
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17 the risk of delays and damages that may result to Borrower from any Third Person legal actions related to City’s approval of this Agreement or any associated approvals, even in the event that an error, omission or abuse of discretion by City is determined to have occurred. If a Third Person files a legal action regarding City’s approval of this Agreement or any associated approval (exclusive of legal actions alleging violation of Government Code Section 1090 by elected officials of City), Borrower shall indemnify City against such Third Person legal action, including all legal costs, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. City shall reasonably cooperate in its defense in any legal action subject to this Section 406 subject to Borrower’s indemnity obligations for such legal action. Nothing contained in this Section 406 is intended to be nor shall be deemed or construed to be an express or implied admission that City may be liable to Borrower or any other party for damages or other relief regarding any alleged or established failure of City to comply with any law. Any legal action that is subject to this Section 406 (including any appeal periods and the pendency of any appeals) shall constitute an Enforced Delay and the time periods for performance by any Party under this Agreement may be extended pursuant to the provisions of this Agreement in Section 803. The indemnification set forth in this section is not intended to indemnify the City for the City’s own gross negligence of willful misconduct.
406.2Independence of Insurance Obligations. The indemnification obligations made by Borrower under this Agreement shall not be construed or interpreted as in any way restricting, limiting, or modifying Borrower insurance or other obligations under this Agreement.
Borrower’s obligation to indemnify City under this Agreement is independent of Borrower’s insurance and other obligations under this Agreement. Borrower’s compliance with its insurance obligations and other obligations under this Agreement shall not in any way restrict, limit, or modify Borrower’s indemnification obligations under this Agreement and are independent of Borrower’s indemnification and other obligations under this Agreement. 406.3Survival of Indemnification and Defense Obligations. The indemnity and defense obligations of the Parties under this Agreement shall survive the expiration or earlier termination of this Agreement, until any and all actual or prospective claims regarding any matter subject to an indemnity obligation under this Agreement are fully, finally, absolutely and completely barred by applicable statutes of limitations. 406.4Indemnification Procedures. Wherever this Agreement requires any Party to indemnify the other Party:
a.Prompt Notice. The indemnifying Party shall promptly notify the other Party of any claim.
b.Selection of Counsel. The indemnifying Party shall select counsel reasonably acceptable to the other Party. Counsel to indemnifying Party’s insurance carrier that is providing coverage for a claim shall be deemed reasonably satisfactory, except in the event of a potential or actual conflict of interest for such counsel regarding such representation or such counsel proves to be incompetent regarding such representation. Even though the indemnifying Party shall defend the claim, the other Party may, at its option and its own expense, engage separate counsel to advise it regarding the claim and its defense. The other Party’s separate counsel may
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18 attend all proceedings and meetings. The indemnifying Party’s counsel shall actively consult with the other Party’s separate counsel. The indemnifying Party’s counsel shall, however, control the defense, except to the extent that the other Party waives its rights to indemnity and defense of such Claim.
c.Cooperation. The other Party shall reasonably cooperate with the indemnifying Party’s defense of the other Party.
d.Settlement. The indemnifying Party may only settle a claim without the consent of other Party, if the claim is within the policy limits of applicable insurance policies provided in satisfaction of the requirements of this Agreement and such settlement procures a release of other Party from the subject claims, does not require other Party to make any payment to the claimant and neither the indemnified Party nor indemnifying Party on behalf of the indemnified Party admits any liability.
e.Insurance Proceeds. The indemnifying Party’s obligations shall be reduced by any net insurance proceeds actually received by the other Party for the matter giving rise to the indemnification obligation.
407.Financial Statements and Reports. Borrower shall furnish to City, within ten (10) days after demand, the financial statements of Borrower, which may be internally prepared, on a consolidating and consolidated basis and in conformity with GAAP, consisting of at least statements of income, cash flow, changes in financial position and stockholders” equity, and a consolidated balance sheet, setting forth in each case in comparative form corresponding figures from the previous financial statements delivered to City pursuant to this Section. 408.Books and Records. Borrower shall keep adequate and proper records and books of account in connection with the Development, in which full and correct entries will be made of its dealings, business and affairs. Upon reasonable advanced notice to Borrower, all records and books of accounts and other materials deemed to be relevant to the Development shall be accessible at any time during normal business hours to the authorized representatives of City for the purpose of examination or audit. Any expenditure from the Loan proceeds that is not authorized by this Agreement or that cannot be adequately documented shall be disallowed and must be reimbursed to City or its designee by Borrower immediately. Expenditures not described in this Agreement shall be deemed authorized if the performance of such activities is approved in writing by City prior to their commencement. Absent fraud or mistake on the part of City, the determination by City of the qualification of any expenditure shall be final. 409.Compliance. Borrower shall comply and shall cause the Property and the Development to comply at all times in all material respects with all Governmental Requirements to which they may be subject.
500. PROJECT
501.Covenant to Complete the Project. Borrower covenants to and for the exclusive benefit of City that Borrower shall commence, pursue and complete the Project in accordance with the timeframes and other requirements of this Agreement, including but not limited to the commitment not to displace or require the permanent relocation of any tenants as a result of the
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19 Project. The covenants of this Section shall run with the Property until the issuance of a Certificate of Completion for the Project.
502.Cost of Project. All cost and expense in performing the construction of the Project, and for all materials and equipment related thereto, shall be borne solely by Borrower. 600. USE AND MAINTENANCE OF THE PROPERTY; NONDISCRIMINATION;
RIGHTS OF SECURITY FINANCING HOLDERS
601.Restrictive Covenants. Borrower covenants and agrees for itself, its successors, assigns, and every successor in interest to devote the Property to the operation of an affordable housing development in accordance with the terms of the Regulatory Agreement and this Agreement for the period of time specified therein. The foregoing covenant shall run with the land.
602.Maintenance of the Property. For the period of time set forth in Section 606, Borrower shall keep the Property in good condition, order and repair and shall not commit waste or permit impairment, demolition or deterioration of the Property; shall comply with all applicable state and federal regulations addressing the physical condition of the Property and buildings located on the Property and all applicable standards of the City including but not limited to building standards, planning regulations, and utilities code; shall complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed and to pay when due all claims for labor performed and materials furnished; shall maintain the buildings in a habitable condition; and do all other acts which from the character or use of the Property may be reasonably necessary. City shall have the right to inspect the Property during normal business hours, provided Borrower and the occupant are given at least seventy-two (72) hours written notice prior to any such inspection.
603.Obligation to Refrain from Discrimination. The Borrower covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property, or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, source of income, age, marital status, physical or mental disability, medical condition, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Borrower itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land and shall remain in effect in perpetuity. 604.Form of Nondiscrimination and Nonsegregation Clause. The Borrower shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, religion, sex, sexual orientation, source of income, age, marital status, physical or mental disability, medical condition, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses. Agency understands that the wording of certain services agreements are not within the control of Borrower, and to such extent that Borrower does not have control of the wording, then Borrower is excused from complying with this section.
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20 In deeds. “The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land.”
In leases. “The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: “That there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased.” In contracts. “There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.” 605.Rights of Access. For the purposes of assuring compliance with this Agreement, representatives of the City shall have the reasonable right of access to the Property without charges or fees for the purpose of inspection of the Property as to maintenance of the improvements thereon. Such representatives of the City shall be those who are so identified in writing by the City Manager, or his/her designee.
606.Effect and Duration of Covenants. The covenants contained in Sections 601, 602 and 605 of this Agreement shall remain in effect for not less than fifty-five (55) years commencing with the date the Regulatory Agreement is recorded on the Property, and continuing thereafter until the later of the date when amounts due and owing under the Note, and Deed of Trust, as applicable, are repaid in full, and the date when the affordability restrictions for each of the Affordable Units have expired pursuant to the terms of the Regulatory Agreement. The covenants against discrimination contained in Sections 603 and 604 of this Agreement shall remain in effect in perpetuity. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding on the part of the Borrower and any successors and
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21 assigns to the Property or any part thereof, and the tenants, lessees, sublessees and occupants of the Property, for the benefit of and in favor of the City and any successor in interest thereto. 607.Recordation and Priority of Regulatory Agreement. Borrower shall cause the Regulatory Agreement to be recorded against the Property prior to disbursement of the Loan. The Regulatory Agreement shall be recorded in a priority senior to any and all monetary liens recorded against the Property. If there are pre-existing monetary liens on the Property as of the Effective Date of this Agreement, Borrower shall cause a subordination agreement specifying the priority of the Regulatory Agreement over such monetary liens to be recorded against the Property prior to the disbursement of the Loan. Notwithstanding the foregoing, the City may, in its sole and absolute discretion, (i) agree to subordinate the Regulatory Agreement to other restrictive covenants with affordability restrictions that are required to be recorded against the Property in connection with other governmental funding for the Project and (ii) agree to subordinate the Deed of Trust to both monetary and non-monetary liens that are required to be recorded against the Property in connection with the Approved Financing.
700. DEFAULTS AND REMEDIES
701.Default. A party to this Agreement shall be in default if it fails to perform or satisfy any obligation or requirement set forth (A) herein after thirty (30) days of receiving written Notice from the non-defaulting party of such default, provided that in the case of a default that cannot with reasonable diligence be cured within thirty (30) days after the effective date of such Notice, such thirty (30) day period shall automatically be extended if and only for so long as Borrower does all of the following: (i) within thirty (30) days after Notice of such default, advise the City of the intention of Borrower to take all reasonable steps to cure such default; (ii) duly commence such cure within such period, and then diligently prosecute such cure to completion; and (iii) complete such cure within a reasonable time under the circumstances; or (B) under any applicable Loan Document after any applicable cure period.
702.Remedies.
702.1City. Upon default by Borrower subject to applicable notice and cure periods, City shall not be obligated to disburse any Loan proceeds pursuant to this Agreement and Borrower shall immediately remit to City all cost and expense, interest and principal due City under the Note.
702.2Borrower. Upon default by City, Borrower’s sole remedy for such breach shall be to institute an action at law or equity to seek specific performance of the terms of this Agreement. Borrower shall not be entitled to recover damages for any default by City hereunder.
Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, or in the United States District Court for the District of California in which San Bernardino County is located.
703.Rights and Remedies Cumulative. The rights and remedies of City hereunder are cumulative, and the exercise by City of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default caused by Borrower.
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22 200. GENERAL PROVISIONS
201.Notices. Any notice required or authorized under this Agreement, or service of process, shall be effective if, and only if, in writing and if, and only if, personally served or mailed, postage prepaid, by registered or certified mail, to the party in question at the address shown below:
Borrower: E Street Veterans Apartments, LP
c/o U.S.VETS Housing Corporation
800 W. 6th Street, Suite 1505
Los Angeles, CA 90017
Attn: Carla Ford
With a copy to: Bergman and Allderdice
1200 Wilshire Blvd, Suite 610
Los Angeles, CA 90017
Phone: (213) 736-5101, ext.1
Attn: Beth S. Bergman
c/o R4 Capital LLC
780 Third Avenue, 16th Floor
New York, New York 10017
Attention: Marc Schnitzer
Telephone Number: 646.576.7659
Telecopier Number: 212.546.9085
E-Mail Address: [email protected]
And
Holland & Knight LLP
787 Seventh Avenue, 31st Floor
New York, New York 10119
Attention: Alan S. Cohen.
Telephone Number: 212.513.3404
Telecopier Number: 212.385.9010
E-Mail Address: [email protected]
City: City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Attn: City Manager
With a copy to: Sonia R. Carvalho
Best Best & Krieger LLP
18101 Von Karman Avenue, Suite 1000
Irvine, CA 92612
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23 An address set forth in this Section may be changed by the respective party providing the other party with written notice indicating the new address for purposes of this Section. 802.Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement.
803.Enforced Delay; Extension of Times for Performance. In addition to specific provisions of this Agreement, performance by a party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; inability to secure necessary labor, materials or tools; acts or omissions of the other party; acts or failures to act of City or any other public or governmental agency or entity (other than the acts or failures to act of City which shall not excuse performance by City); or any other cause beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Borrower. 804.Transfers of Interest in Property or Agreement.
804.1Prohibition. The qualifications and identity of Borrower are of particular concern to City. It is because of those unique qualifications and identity that City has entered into this Agreement with Borrower. Borrower shall not transfer, assign, sell or grant any interest in this Agreement or any portion of the Property except as expressly set forth herein. 804.2Permitted Transfers. City approval of a transfer of this Agreement or an interest in the Property, or any part thereof, shall not be required in connection with any of the following transfers:
(a) Any requested assignment for purposes of financing the construction of improvements upon the Property;
(b) Any mortgage, deed of trust, or other form of conveyance for all or any portion of the Additional Borrower Financing, as provided in Section 301, but Borrower shall notify City in advance of any such mortgage, deed of trust or other form of conveyance for financing pertaining to the Property;
(c) Any mortgage, deed of trust or other form of conveyance for restructuring or refinancing of any amount of indebtedness described in subsection (b) above; (d) A sale or transfer resulting from or in connection with a reorganization as contemplated by the provisions of the Internal Revenue Code of 1986, as amended or otherwise, in which the ownership interests of a corporation are assigned directly or
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24 by operation of law to a person or persons, firm or corporation which acquires the control of the voting capital stock of such corporation or all or substantially all of the assets of such corporation; (e) The lease of residential units at the Development to qualified tenants;
(f) The transfer of the Borrower’s limited partnership interest in the Borrower; and
(g) The removal of the general partner of the Borrower by its limited partner according to the terms of the Borrower’s limited partnership agreement.
In the event of a transfer by Borrower under subparagraphs (a) through (d) not requiring City’s prior approval, Borrower nevertheless agrees that: (i) at least ten (10) days prior to such assignment it shall give written notice to City of such transfer and satisfactory evidence that the transferee has assumed the obligations of this Agreement, if applicable, and (ii) the Regulatory Agreement remains in senior lien priority relative to all monetary liens on the Property upon completion of the transfer. Such requirements are not applicable to transfers under subparagraph (e).
805.Relationship Between City and Borrower. It is hereby acknowledged that the relationship between City and Borrower is not that of a partnership or joint venture and that City and Borrower shall not be deemed or construed for any purpose to be the agent of the other.
Accordingly, except as expressly provided herein, City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Property. Borrower agrees to indemnify, hold harmless and defend City from any claim made against City arising from a claimed relationship of partnership or joint venture between City and Borrower with respect to the development, operation, maintenance or management of the Property. 806.Reserved.
807.City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by City, the City Manager or his or her designee is authorized to act on behalf of City unless specifically provided otherwise or the context should require otherwise. 808.Counterparts. This Agreement may be executed in any number of counterparts and by different signatories hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument, for the same effect as if all signatories hereto had signed the same signature page. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages.
809.Integration. This Agreement and the Loan Documents contain the entire understanding between the parties relating to the transaction contemplated by this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into the Loan Documents and shall be of no further force or effect. Each party
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25 is entering into the Loan Documents upon the representations set forth in the Loan Documents and upon each party’s own independent investigation of any and all facts such party deems material. 810.Attorneys’ Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of the Loan Documents, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief, or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys’ fees. 811.Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms.
Reference to section numbers are to sections in this Agreement, unless expressly stated otherwise. 812.Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word “including” shall be construed as if followed by the words “without limitation.” This Agreement shall be interpreted as though prepared jointly by both parties. 813.No Waiver. City may at any time and from time to time waive any one or more of the terms or conditions contained in this Agreement, but any such waiver shall be deemed to be made pursuant to this Agreement and not in modification thereof, and any such waiver in any instance or under any particular circumstances shall not be construed a waiver of such term or condition or of any subsequent default. In order to be effective, all such waivers must be in writing.
The failure of City to promptly exercise its rights or remedies shall not be deemed to be a waiver or grounds for the claim of estoppel.
814.Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party.
815.Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 816.Incorporation of Recitals. The recitals set forth above, and all defined terms set forth in such recitals and in the introductory paragraph preceding the recitals, are hereby incorporated into this Agreement as if set forth in full. 817.Incorporation of Attachments. All attachments referenced in this Agreement are hereby incorporated into this Agreement by this reference. 818.Legal Advice. Each party represents and warrants to the other the following: they have carefully read the Loan Documents, and in signing the Loan Documents, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in the Loan Documents, or have knowingly chosen not to consult legal counsel as to the matters set forth in the Loan Documents; and, they
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26 have freely signed the Loan Documents without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in the Loan Documents, and without duress or coercion, whether economic or otherwise.
819.Time of Essence. Time is expressly made of the essence with respect to the performance by City and Borrower of each and every obligation and condition of the Loan Documents.
820.Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, shall execute any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements.
821.Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in the Loan Documents, nor shall any such member, official or employee participate in any decision relating to the Loan Documents which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested.
822.Time for Acceptance of Agreement. This Agreement, when executed by Borrower and delivered to City, must be executed and delivered by City on or before fifteen (15) days after signing and delivery of this Agreement by Borrower or this Agreement shall be void, except to the extent that Borrower shall consent in writing to a further extension of time for the execution and delivery of this Agreement.
823.Agreement Binding. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.
824.Non-Liability of Officials and Employees of City. No member, official or employee of City shall be personally liable to Borrower, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Borrower or its successors, or on any obligations under the terms of the Loan Documents. Borrower hereby waives and releases any claim it may have against the members, officials or employees of City with respect to any default or breach by City or for any amount which may become due to Borrower or its successors, or on any obligations under the terms of the Loan Documents. Borrower makes such release with full knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code 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.
[Signatures to appear on the following page.]
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26 Packet Page. 927
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27 IN WITNESS WHEREOF, City and Borrower have executed this Agreement on the respective dates set forth below.
Date:
CITY:
CITY OF SAN BERNARDINO, a California municipal
corporation
By:
Eric Levitt, City Manager
ATTEST:
Telicia Lopez, City Clerk
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
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28 Date:
BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public
benefit corporation,
its managing member
By:
____________________________
Lori Allgood, Chief Operating
Officer
By: Kingdom Development, Inc.,
a California nonprofit public
benefit corporation,
its member
By:
___________________________
William Leach, President
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Attachment 1
ATTACHMENT NO. 1
LEGAL DESCRIPTION
Real Property in the City of San Bernardino, County of San Bernardino, State of California, described as follows:
[INSERT]
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Attachment 1
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Attachment 2
ATTACHMENT NO. 2
PROPERTY MAP
[INSERT]
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Attachment 2
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Attachment 3
ATTACHMENT NO. 3
FORM OF NOTE
PROMISSORY NOTE
(E STREET VETERANS APARTMENTS)
Principal Sum Not to Exceed ____________, 2027
$2,014,599 San Bernardino, California
FOR VALUE RECEIVED, E Street Veterans Apartments, LP, a California limited partnership (the “Maker” or “Borrower”), having an address at [INSERT], promises to pay the CITY OF SAN BERNARDINO, a California municipal corporation (the “Payee” or “City”), the principal sum not to exceed Two Million Fourteen Thousand Five Hundred Ninety-Nine Dollars ($2,014,599), or so much of such principal as may be advanced, together with interest thereon accruing from the date of this Note at a rate of 3% simple interest.
1. Purpose. This Note is made and delivered pursuant to and in implementation of the LMIHAF Loan Agreement entered into by and between City and Borrower, of even date herewith (the “Loan Agreement”), which provides for the acquisition by the Maker of the Development described in Section 3 below. The term “Property” means that real property described in the Deed of Trust securing this Note. Capitalized terms used in this Note that are not defined herein have the meaning set forth in the Loan Agreement.
2. Security. Payment of this Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing of even date herewith (the “Deed of Trust”) from Maker to Payee recorded upon the Property in the official records of San Bernardino County.
3. Project. Maker will acquire the Property and develop the Project, all as more fully described in the Loan Agreement (collectively, the “Development”).
4. Maturity Date. This Note shall be due and payable in full at the earlier of (i) sale of the Development by Borrower to a Person other than an Affiliate (except for a sale approved by the City in writing in compliance with terms of the Loan Agreement and Regulatory Agreement); (ii) an uncured Default under the Loan Agreement or (iii) fifty-five (55) years after the date hereof (the “Maturity Date”).
5. Payment. Principal and interest under this Note are due and payable as follows:
(a) Annual Residual Receipts Payment. Borrower shall make annual Residual Receipts Payments as follows: Borrower shall make annual Residual Receipts Payments as follows: Commencing on [DATE OF CONVERSION TO PERMANENT FINANCING], and on the anniversary of such date of each year thereafter during the Term, Borrower shall make a loan payment in an amount equal to the City Share of Residual Receipts for the prior calendar year (each such payment, an “Annual City Loan Payment”). The City shall apply all Annual City
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Error! Unknown document property name.2
Loan Payments to the PLHA Loan as follows: (1) first, to accrued interest, and (2) second, to principal on the Loan.
(b) Due in Full. All outstanding principal and accrued interest on the PLHA Loan shall be due in full on the earlier to occur of: (i) the date of any Default, or (ii) the expiration of the Term.
(c) Right to Prepay. Borrower may prepay, in whole or in part, the PLHA Loan at any time without premium or penalty. However, the PLHA Loan Agreement and the PLHA Regulatory Agreement shall remain in effect for the entire Term regardless of any prepayment.
Payments made shall be credited first against accrued interest and then against outstanding principal.
6 Payment Location. Payment shall be made in lawful money of the United States to the City of San Bernardino, 290 North D Street, San Bernardino, CA 92401. The place of payment may be changed from time to time as the Payee may from time to time designate in writing.
7. Default. The occurrence of any of the following shall constitute an event of default under this Note:
A. Maker fails to pay any amount due hereunder within thirty (30) days of its due date; or
B. Any default by Maker under this Note, the Deed of Trust, the Loan Agreement or the Regulatory Agreements recorded against the Property after the expiration of all applicable cure periods; or
C. Any default by Maker under any other obligation of Maker recorded against the Property after the expiration of all applicable cure periods; or Maker shall not be considered in default under this Note until the expiration of all notice and cure periods provided to Maker. Upon the occurrence of any uncured event of default, or at any time thereafter, at the option of the Payee hereof, the entire unpaid principal and interest owing on this Note shall become immediately due and payable. This option may be exercised at any time following any such event, and the acceptance of one or more installments thereafter shall not constitute a waiver of Payee’s option. Payee’s failure to exercise such option shall not constitute a waiver of such option with respect to any subsequent event. Payee’s failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof.
8. Default Interest Rate. At all times when Maker is in default hereunder by reason of Maker’s failure to pay any amounts due under this Note within applicable cure periods, the interest rate on the sums as to which Maker is in default (including principal, if Payee has elected to declare it immediately due and payable), shall be the highest rate then allowed by law as of the date of the default or 8% per annum, whichever is lower.
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9. Waivers. Maker and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof or of any installment hereof, to the release of any party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without any way affecting or discharging this liability.
10. Costs. Maker agrees to pay immediately upon demand all reasonable costs and expenses of Payee actually incurred including reasonable attorneys’ fees:
A. If after default and the expiration of all notice and cure periods this Note is placed in the hands of an attorney or attorneys for collection; B. If after a default hereunder or under the Deed of Trust or Loan Agreement and after the expiration of all notice and cure periods Payee finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to collection of this Note against Maker, any guarantor or any other party liable therefor or to the protection of its rights under this Note, the Deed of Trust, the Loan Agreement or other loan documents executed in connection with the Development; or
C. If Payee seeks to have the Property abandoned by or reclaimed from any estate in bankruptcy, or attempts to have any stay or injunction prohibiting the enforcement or collection of this Note or prohibiting the enforcement of the Deed of Trust or any other agreement evidencing or securing this Note lifted by any bankruptcy or other court.
D. If Payee shall be made a party to or shall reasonably intervene in any action or proceeding, whether in court or before any governmental entity, affecting the Property or the title thereto or the interest of the Payee under the Deed of Trust, including, without limitation, any form of condemnation or eminent domain proceeding, Payee shall be reimbursed by Maker immediately upon demand for all costs, charges and reasonable attorneys” fees incurred by Payee in any such case, and the same shall be secured by the Deed of Trust as a further charge and lien upon the Property.
11. Notices. Any notices provided for in this Note shall be given by mailing such notice by certified mail, return receipt requested at the address stated in this Note or at such address as either party may designate by written notice.
12. Successors. This Note shall be binding upon Maker, its successors and assigns.
13. California Law. This Note shall be construed in accordance with and be governed by the laws of the State of California.
14. Severability. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.
15. Nonrecourse. This Note is a nonrecourse obligation of Maker. Neither Maker nor any of its officers, directors or agents shall have any personal liability for repaying the principal or interest
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of the Note. In any action brought to enforce the obligations of Maker under this Note, the Deed of Trust or any other instrument or agreement evidencing, securing or relating to the indebtedness evidenced by this Note, the judgment or decree shall be enforceable against Maker solely and only to the extent of its interest in the property described in the Deed of Trust or its interest in any other security loaned by Maker as security for this Note, and Payee shall not seek any deficiency judgment against the Maker. The foregoing provisions shall not prevent recourse to the collateral security for the loan or constitute a waiver, release or discharge of or otherwise affect the obligation to pay, any indebtedness evidenced by the loan documents executed in connection with the Development or limit the right of any person to name the Maker or any other person claiming an interest in or right to such collateral as party defendant in any action or suit for judicial foreclosure or in the exercise of any other remedy, including injunctive or other equitable relief, under any of the loan documents executed in connection with this Development so long as no deficiency judgment shall be sought against the Maker.
The foregoing limitation shall not apply to any and all loss, damage, liability, action, cause of action, cost or expense (including without limitation, reasonable attorneys’ fees and expenses) to the extent incurred by Payee as a result of any:
A. Fraud or material misrepresentation under or in connection with the loan or any loan document executed in connection with the Development; B. Intentional bad faith waste of the Property by the Maker; C. Losses resulting from Maker’s failure to maintain insurance as required under the Deed of Trust; or
D. Misappropriation of any rents, security deposits, insurance proceeds, condemnation awards or any other proceeds derived from the collateral security by the Maker.
If any of the events listed in the foregoing (A) through (D) occurs, Payee shall have the right to proceed directly against Maker at the time the event giving rise to the recourse liability occurred to recover any and all loss, damage, liability, action, cause of action, cost or expense (including without limitation, reasonable attorneys’ fees and expenses) incurred by Payee.
16. Nonliability of Maker and Payee Officials and Employees.
A. No partner, official or employee of the Payee shall be personally liable to the Maker in the event of any default or breach by the Agency or on any obligations under the terms of this Note.
B. No member, official or employee of the Maker shall be personally liable to the Payee in the event of any default or breach by the Maker or for any amount which may become due to the Payee or on any obligations under the terms of this Note.
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MAKER / BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public
benefit corporation,
its managing member
By: ____________________________
Lori Allgood, Chief Operating Officer
By: Kingdom Development, Inc.,
a California nonprofit public benefit corporation,
its member
By: ___________________________
William Leach, President
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Attachment 4
ATTACHMENT NO. 4
FORM OF DEED OF TRUST
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Attn: City Clerk
Space above line for Recorder’s use only
Exempt from Recording Fees pursuant to Govt. Code § 27383
CITY OF SAN BERNARDINO
DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING
([E Street Veteran Apartments])
This Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) is made as of [INSERT], among E Street Veterans Apartments, LP, a California limited partnership, whose address is [INSERT BORROWER] (“TRUSTOR”); [INSERT ESCROW/TITLE COMPANY], whose address is [INSERT] (“TRUSTEE”); and the CITY OF SAN BERNARDINO, whose address is 290 North D Street, San Bernardino, California 92401 (“BENEFICIARY”).
Trustor irrevocably grants, conveys, transfers, and assigns to Trustee in trust, with power of sale and right of entry and possession, all of Trustor’s estate, right, title, and interest in, to and under the following property (collectively, the “Property”): (a) the real property in San Bernardino County, California, described on Exhibit A attached hereto and incorporated herein by this reference, together with all existing and future easements and rights affording access to it (the “Land”), (b) together with all buildings, structures, and improvements now existing or hereafter constructed thereon (the “Improvements”), (c) together with all articles of personal property now or hereafter attached to, placed upon for an indefinite term, or used in connection with the Land and/or Improvements, together with all goods and other property that are, or at any time become, so related to the Property that an interest in them arises under real estate law, or they are otherwise adjudged to be a “fixture” under applicable law (each a “Fixture,” collectively “Fixtures”), (d) together with all other property and interests of any kind or character which may be reasonably necessary or desirable to promote the present and future beneficial use and enjoyment of such real property and improvements.
1. Secured Obligations. Trustor makes the grant, conveyance, transfer, and assignment herein for the purpose of securing the following obligations (the “Secured Obligations”): (a) payment of the sum of Two Million Fourteen Thousand Five Hundred Ninety- Nine Dollars ($2,014,599) with interest thereon according to the terms of a promissory note (the “Note”) of even date herewith, executed by Trustor in favor of Beneficiary or order and any
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extension or renewals thereof; (b) payment of such further sums as the then record owner of the Property may borrow from Beneficiary, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust; and (c) performance of each agreement and obligation of Trustor under that certain LMIHAF Loan Agreement executed by Trustor and Beneficiary dated [INSERT] (the “Loan Agreement”), providing for the acquisition of improvements on the Property and operation of the Property and improvements thereon as affordable housing (the “Project”); and (d) obligations under the Regulatory Agreement and Declaration of Restrictive Covenants, Conditions and Restrictions Restricting Use of Property for Affordable Housing ([INSERT]), dated of even date herewith (the “Regulatory Agreement”) recorded against the Property on even date with this Deed of Trust. The payment of the amount owing pursuant to the terms of the Note by Trustor does not extinguish the rights of the Beneficiary under the Regulatory Agreement. This Deed of Trust shall secure the Beneficiary against any default under the Regulatory Agreement for the term of the Regulatory Agreement, provided however, that in the event that this Deed of Trust is extinguished due to foreclosure by a senior lender, the Regulatory Agreement, which is recorded against the Property in a position prior to the security interests of the senior lenders, shall remain in full force and effect.
2. Maintenance and Repair. Trustor shall (a) keep the Property in good condition and repair and not remove or demolish any building; (b) complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed; (c) pay when due all claims for labor performed and materials furnished; (d) comply with all laws affecting the Property or requiring any alterations or improvements to be made; (e) not commit or permit waste; and (f) cultivate, irrigate, fertilize, fumigate, prune, and do all other acts which from the character or use of the Property may be reasonably necessary.
3. Insurance. Trustor shall maintain hazard insurance against loss by fire, hazards included with the term “extended coverage,” and any other hazards for which Beneficiary requires insurance, and liability insurance as set forth in the Loan Agreement and Regulatory Agreement.
The insurance carrier and the insurance policies and amounts of coverage shall comply with the terms of the Loan Agreement and Regulatory Agreement or shall otherwise be acceptable to Beneficiary, the policies shall name Beneficiary as a loss payee or an additional insured, as applicable, the policies shall include Beneficiary as an additional insured, as applicable.
4. Defense of Security. Trustor shall appear in and defend any action or proceeding purporting to affect the security or the rights or powers of Beneficiary or Trustee. Trustor shall pay all costs and expenses, including costs of evidence of title and attorneys’ fees, in any such action or proceeding in which Trustee or Beneficiary may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust.
5. Payment of Taxes and Liens. Trustor shall pay (a) at least 10 days before delinquency, all non-abated taxes and assessments affecting the Property, including water stock assessments; (b) when due, all encumbrances, charges, and liens, with interest, on the Property, which are or appear to be prior or superior to this Deed of Trust; and (c) upon demand all reasonable and documented costs, fees, and expenses of this Deed of Trust. If Trustor fails to make any payment or to do any act provided for in this Deed of Trust after written notice of such failure by Beneficiary and a reasonably opportunity to cure, then Beneficiary or Trustee may, without obligation to do so, and with or without notice to or demand upon Trustor, and without
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releasing Trustor from any obligation under this Deed of Trust: (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (b) appear in or commence any action or proceeding purporting to affect the security, or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest or settle any encumbrance, charge or lien which in the judgment of either appears to be senior to this Deed of Trust; and (d) in exercising any such powers, pay allowable expenses, including attorneys’ fees.
6. Reimbursement of Costs. Trustor shall pay upon demand all reasonable and documented sums expended by Beneficiary or Trustee provided for in this Deed of Trust or allowed by law, with interest from date of expenditure at the maximum rate provided in the Note.
7. No Waiver. By accepting payment of any sum after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums or declare a default for failure to pay.
8. Reconveyance. That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said note or notes to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals of such reconveyance of any matters or facts 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. Assignment of Rents. Subject to the rights of senior lenders, Trustor hereby absolutely and unconditionally assigns to Beneficiary all of the rents, issues, profits, royalties, revenues, income, and other benefits (collectively, the “Rents”) derived from the Property, whether now due, past due or to become due, and hereby gives to and confers upon Beneficiary, either directly or through a receiver, the right, power, and authority, but not the obligation, to collect the Rents, and to sue, either in the name of Trustor or Beneficiary, for all such Rents and to apply the same to the indebtedness secured hereby in such order as Beneficiary may determine in its sole discretion. This assignment of Rents is intended to create and shall be construed to create an absolute assignment to Beneficiary of all of Trustor’s right, title, and interest in the Rents.
So long as no default exists by Trustor in the payment of any indebtedness secured hereby, or in any other covenant contained herein, or in said note or notes or in any other document evidencing or securing such indebtedness, Trustor shall have the right to collect all Rents from the Property and to retain, use, and enjoy the same. Upon the occurrence of such a default beyond any applicable notice and cure periods, without the necessity of demand or other notice to Trustor or any other act to enforce Beneficiary’s interest pursuant to this assignment, Trustor shall have no interest whatsoever in the Rents that are received by Trustor after a default, and all such Rents shall be received and held by Trustor in constructive trust for Beneficiary and delivered promptly to Beneficiary, or to a court-appointed receiver for the Property, without the necessity for further notice to, or demand upon, Trustor. Upon the occurrence of such a default, beyond any applicable notice and cure periods, and at any time thereafter during the continuance thereof, Beneficiary may, at its option, send any tenant of the Property a notice to the effect that: (a) a default has occurred; (b) Beneficiary has elected to exercise its rights under this assignment; and (c) such tenant is thereby directed to thereafter make all payments of Rents to or for the benefit of
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Beneficiary or as Beneficiary shall direct. Any such tenant shall be entitled to rely upon any notice from Beneficiary and shall be protected with respect to any payment of Rents made pursuant to such notice, irrespective of whether a dispute exists between Trustor and Beneficiary with respect to the existence of a default or the rights of Beneficiary hereunder. Any such tenant shall not be required to investigate or determine the validity or accuracy of such notice or the validity or enforceability of this assignment. Trustor hereby agrees to indemnify, defend, and hold any such tenant harmless from and against any and all losses, claims, damages or liabilities arising from or related to any payment of Rents by such tenant made in reliance on and pursuant to such notice.
10. Default and Foreclosure. Upon default by Trustor in payment or performance of any Secured Obligation, subject to any applicable notice and cure period, Beneficiary may declare all sums secured immediately due and payable by delivery to Trustee of a declaration of default and demand for sale and of a notice of default and of a notice of sale, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said note or notes, and all documents evidencing expenditures secured by this Deed of Trust. Upon default of any obligation secured by this Deed of Trust and acceleration of all sums due, Beneficiary may instruct Trustee to proceed with a sale of the Property under the power of sale granted in this Deed of Trust, noticed and held in accordance with California Civil Code Sections 2924, et seq., as such statutes may be amended from time to time. Trustor waives all rights it may have to require marshaling of assets or to require sales of assets in any particular order, including any rights under California Civil Code Sections 2899 and 3455.
11. Substitution of Trustee. Beneficiary, or any successor in ownership of any indebtedness 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 the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, 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, rights, 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.
12. Successors and Assigns. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term “Beneficiary” shall mean the owner and holder, including pledgees, of the secured note or notes, whether or not named as Beneficiary herein.
13. Trustee Acceptance. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
14. Further Assurances. Trustor shall, at its own cost and expense, do, execute, acknowledge, and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignments, transfers, and assurances as Trustee or Beneficiary shall from time to time reasonably require, for better assuring, conveying, assigning, transferring, and confirming unto Trustee the Property and rights hereby conveyed or assigned or intended now or
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hereafter so to be, or which Trustor may be or may hereafter become bound to convey or assign to Trustee, or for carrying out the intention or facilitating the performance of the terms of this Deed of Trust, or for filing, registering, or recording this Deed of Trust. Trustor shall, on demand, execute and deliver, and hereby authorizes Trustee and Beneficiary, or either of them, to execute in the name of Trustor, to the extent it may lawfully do so, one or more financing statements, chattel mortgages, or comparable security instruments, to evidence more effectively the lien hereof. Immediately upon the execution and delivery of this Deed of Trust, and thereafter from time to time, Trustor shall cause this Deed of Trust, and any security instruments creating a lien or evidencing the lien hereof upon any personal property and each instrument of further assurance, to be filed, registered, or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, and the title of Trustee to, the Property encumbered hereby.
15. Condemnation and Insurance Proceeds. Immediately upon obtaining knowledge of the institution of any proceedings for the condemnation or other taking of all or any portion of the Property, or knowledge of any casualty damage to the Property, or damage in any other manner, Trustor shall immediately notify Beneficiary thereof. Trustor hereby authorizes and empowers Beneficiary as attorney-in-fact for Trustor to make proof of loss, to adjust and compromise any claim under the insurance policies covering the Property, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Beneficiary’s expenses incurred in the collection of such proceeds; provided, however, that nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder. Trustor hereby authorizes and empowers Beneficiary, at Beneficiary’s option, as attorney-in-fact for Trustor, to commence, appear in, and prosecute, in Beneficiary’s or Trustor’s name, any action or proceeding relating to any condemnation or other taking of all or any part of the Property, whether direct or indirect, and to settle or compromise any claim in connection with such condemnation or other taking. The proceeds of any award payment or claim for damages, direct or consequential, in connection with any condemnation or other taking, whether direct or indirect, of the Property, or any part thereof, or for conveyances in lieu of the Property, or any part thereof, shall be paid to Beneficiary. The foregoing powers of attorney are coupled with an interest and are irrevocable. Trustor hereby authorizes Beneficiary to apply such awards, payments, proceeds or damages relating to condemnation of the Property and insurance covering the Property, after the deduction of Beneficiary’s expenses incurred in the collection of such amounts, subject to the requirements of applicable law and the provisions hereof, to restoration or repair of the Property or to payment of the sums secured by this Deed of Trust. Beneficiary shall be under no obligation to question the amount of any compensation, awards, proceeds, damages, claims, rights of action, and payments relating to condemnation or other taking of the Property or insured casualty affecting the Property, and may accept the same in the amount in which the same shall be paid. Trustor shall execute such further evidence of assignment of any awards, proceeds, damages or claims arising in connection with such condemnation or taking or such insurance as Beneficiary may require.
Notwithstanding the above, the Beneficiary shall release all insurance and condemnation proceeds to Trustor to be used to reconstruct the improvements on the Property provided that Beneficiary reasonably determines that such restoration, repair or rebuilding is economically feasible. If such insurance proceeds shall be insufficient for such purposes, Trustor shall make up the deficiency.
If the Project is subject to a partial condemnation or taking, then the proceeds received therefrom shall be applied to restore the Project taken, provided the Beneficiary determines that such
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restoration is economically feasible and no default exists under the Loan Documents following the expiration of all applicable cure periods. If the Project is subject to a total condemnation, or if Beneficiary determines that restoration of the Project is not feasible following a partial condemnation, or if a default exists then the proceeds from any condemnation award or claim for damages shall be used first to repay all sums under the Note, with the excess, if any, paid to Trustor, subject to the rights of the senior lender.
16. Severability. If any one or more of the provisions contained in this Deed of Trust shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Deed of Trust, but this Deed of Trust shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein or therein, but only to the extent of such invalidity.
17. Estoppel Certificate. Trustor shall, within thirty (30) days of a written request from Beneficiary, furnish Beneficiary with a written statement, duly acknowledged, setting forth the sums secured by this Deed of Trust and any right of set-off, counterclaim or other defense which exists against such sums and the obligations of this Deed of Trust.
18. California Uniform Commercial Code Security Agreement; Fixture Filing.
Trustor hereby grants Beneficiary a security interest in all personal property of Trustor located on the Property and wherever located and used in any way in connection with or in any way relating to the Property, and whether now owned or hereafter in existence, acquired or created (including equipment, inventory, goods, documents, instruments, general intangibles, chattel paper, accounts, accounts receivable, deposit accounts, and contract rights), and all fixtures of Trustor now owned or hereafter in existence, acquired or created on, of or relating to the Property, and all substitutions, replacements, additions, accessions, and proceeds (including insurance proceeds) of all of the foregoing (collectively, the “Personal Property”). Beneficiary may file this Deed of Trust, or a reproduction hereof, in the real estate records or other appropriate index, as a financing statement for the Personal Property. Any reproduction of this Deed of Trust or of any other security agreement or financing statement shall be sufficient as a financing statement. In addition, Trustor shall execute and deliver to Beneficiary, upon Beneficiary’s request, any financing statements, as well as extensions, renewals, and amendments thereof, and reproductions of this Deed of Trust in such form as Beneficiary may require to perfect a security interest with respect to the Personal Property. Trustor shall pay all costs of filing such financing statements and any extensions, renewals, amendments, and releases thereof, and shall pay all reasonable costs and expenses of any record searches for financing statements Beneficiary may reasonably require. Upon Trustor’s breach of any covenant or agreement of Trustor contained in this Deed of Trust, including the covenants to pay when due all sums secured by this Deed of Trust, Beneficiary shall have the remedies of a secured party under the California Uniform Commercial Code and, at Beneficiary’s option, may also invoke any remedies provided in this Deed of Trust as to the Personal Property.
In exercising any of such remedies, Beneficiary may proceed against the Property and any of the Personal Property separately or together and in any order whatsoever, without in any way affecting the availability of Beneficiary’s remedies under the California Uniform Commercial Code or the remedies provided in the Deed of Trust. This Deed of Trust also covers goods which are or which are to become fixtures on the Property and constitutes and is filed as a fixture filing under the California Uniform Commercial Code.
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Attachment 4
19. Due-On-Sale or Encumbrance. Except as set forth in the definition of "Transfer" in the Regulatory Agreements, and Section 804.2 of the Loan Agreement, if all or any part of the Property, or any interest therein, or any beneficial interest in Trustor (if Trustor is not a natural person or persons but is a corporation, partnership, trust, limited liability company or other legal entity), is sold, transferred, mortgaged, assigned, pledged, or further encumbered, whether directly or indirectly, whether voluntarily or involuntarily, or by operational law, Beneficiary may, at Beneficiary’s option, declare all of the sums secured by this Deed of Trust to be immediately due and payable, and Beneficiary may invoke any remedies permitted by this Deed of Trust. [CONTINUED ON NEXT PAGE]
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The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to Trustor at Trustor’s address hereinbefore set forth.
TRUSTOR:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public
benefit corporation,
its managing member
By: ____________________________
Lori Allgood, Chief Operating Officer
By: Kingdom Development, Inc.,
a California nonprofit public benefit
corporation,
its member
By: ___________________________
William Leach, President
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Attachment 4
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Real Property in the City of San Bernardino, County of San Bernardino, State of California, described as follows:
[INSERT]
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Attachment 6
ACKNOWLEDGEMENTS
State of California
County of ________________
On ______________________ before me, ________________________________, notary public, personally appeared ________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing Section is true and correct.
WITNESS my hand and official seal.
Signature ____________________________ (Seal)
* * * * *
ACKNOWLEDGEMENTS
State of California
County of ________________
On ______________________ before me, ________________________________, notary public, personally appeared ________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing Section is true and correct.
WITNESS my hand and official seal.
Signature ____________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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Attachment 6
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Attachment 5
ATTACHMENT NO. 5
REGULATORY AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Attn: City Clerk
Space above line for Recorder’s use only
Exempt from Recording Fees pursuant to Govt. Code § 27383
CITY OF SAN BERNARDINO
REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS, CONDITIONS AND RESTRICTIONS
RESTRICTING USE OF PROPERTY FOR AFFORDABLE HOUSING
([E STREET VETERAN APARTMENTS])
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS, CONDITIONS AND RESTRICTIONS RESTRICTING USE OF PROPERTY FOR AFFORDABLE HOUSING (this “Regulatory Agreement”) is dated as of E Street Veterans Apartments, LP, a California limited partnership (the “Effective Date”), and is made by and between the CITY OF SAN BERNARDINO, a municipal corporation (the “City”), and E Street Veterans Apartments, LP, a California limited partnership (the “Owner”), with reference to the following recited facts (each, a “Recital”).
RECITALS
A. The Owner owns or will own and operates that certain real property specifically defined as the “Property” in Section Error! Reference source not found. of this Regulatory Agreement, which will be improved with a multifamily rental housing development comprising of a total of thirty (30) apartment units;
B. Pursuant to Health and Safety Code section 34176.1, subdivision (a)(3)(A), the City, as housing successor to the City’s former redevelopment agency, has agreed to make a loan to Owner in an amount not to exceed Two Million Fourteen Thousand Five Hundred Ninety-Nine Dollars ($2,014,599) from the City’s Low and Moderate Housing Asset Fund (the “Loan”) for a portion of the acquisition and development costs for the Property, as more particularly described in that LMIHAF Loan Agreement entered into by and between City and Owner (the “Loan Agreement”);
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C. This Regulatory Agreement shall, subject to the terms and conditions set forth herein, restrict the use of the Property for a term of not less than fifty-five (55) years commencing on the date of recordation of this Regulatory Agreement as more specifically set forth herein, to ensure that each Affordable Unit included within the Development shall, at all times until expiration of such period, be occupied or reserved for occupancy by a Qualifying Household (as defined in Section 1.1.48 of this Regulatory Agreement) at an Affordable Rent (as defined in Section 1.1.1 of this Regulatory Agreement);
D. The purpose of this Regulatory Agreement is to create such conditions, covenants, restrictions, reservations, agreements, liens, servitudes and charges upon the Property and subject to which each and every part of the Property shall be developed, occupied, owned, maintained, held, leased, rented, sold and conveyed;
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES, COVENANTS AND
UNDERTAKINGS SET FORTH IN THIS REGULATORY AGREEMENT AND FOR OTHER
GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF
WHICH IS HEREBY ACKNOWLEDGED, THE OWNER AND THE CITY COVENANT,
DECLARE AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, AS FOLLOWS:
1.DEFINITIONS
1.1 Definitions. As used in this Regulatory Agreement, the following words, phrases and terms shall have the meaning as provided in the initial paragraph of this Regulatory Agreement, the Recitals, the Loan Agreement, or in this Section 1, unless the specific context of usage of a particular word, phrase or term may otherwise require:
1.1.1Affordable Rent. In reference to each Affordable Unit, “Affordable Rent” shall be set at a level which is no higher than thirty percent (30%) of gross income for the household size appropriate for the applicable Affordable Unit, in accordance with California Health and Safety Code Section 50053 and any implementing regulations published by the California Department of Housing and Community Development. Subject to requirements of the LMIHAF Loan, the Affordable Rent may be determined by deed restrictions or regulatory agreements that restrict the Affordable Units pursuant to terms of public financing or public financial assistance.
1.1.2Affordable Units. Fifteen (15) of the thirty (30) residential units included in the Project will be restricted by Owner in the manner set forth in this Regulatory Agreement for rental to and occupancy by Qualifying Households in accordance with the terms and conditions of this Agreement. The Affordable Units shall be different from, and in addition to, the units restricted by the PLHA Regulatory Agreement recorded against the Property on or about __________, 2025.
1.1.3Annual Report. A report in substantially the form of Exhibit “C” attached to this Regulatory Agreement or in such other form as subsequently reasonably required by the City.
1.1.4Approval. Any license, permit, approval, consent, certificate, ruling,
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variance, authorization, conditional use permit, or amendment to any of the foregoing, as shall be necessary or appropriate under any Law to commence, perform, or complete the Construction of the Development.
1.1.5Area Median Income. The then current area median income for San Bernardino County, as determined by and published by the United States Department of Housing and Urban Development (“HUD”) as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen months, then the City shall provide Owner with other income determinations which are reasonably similar with respect to method of calculation to those previously published by HCD or HUD.
1.1.6Available. When an Affordable Unit is held available for occupancy by a Qualifying Household, the Affordable Unit shall be considered to be held available for occupancy by a Qualifying Household, until occupied or reoccupied by a Qualifying Household, provided that the Owner is exercising bona fide good faith efforts to let or relet the Affordable Unit to a Qualifying Household.
1.1.7Bankruptcy Law. Title 11, United States Code, and any other or successor State or Federal statute relating to assignment for the benefit of creditors, appointment of a receiver or trustee, bankruptcy, composition, insolvency, moratorium, reorganization, or similar matters.
1.1.8Bankruptcy Proceeding. Any proceeding, whether voluntary or involuntary, under any Bankruptcy Law.
1.1.9City. The City of San Bernardino, California, a municipal corporation.
1.1.10City Manager. The appointed City Manager of the City, or his or her designee.
1.1.11City Parties. Collectively, City, its governing body, elected officials, employees, agents and attorneys.
1.1.12City Party. Individually, City, its governing body, elected officials, employees, agents or attorneys.
1.1.13Claim. Any claim, loss, cost, damage, expense, liability, lien, action, cause of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge, award, assessment, fine or penalty of any kind (including consultant and expert fees and expenses and investigation costs of whatever kind or nature, and if an Indemnitor improperly fails to provide a defense for an Indemnitee, then Legal Costs of counsel retained by the Indemnitee) and any judgment.
1.1.14Condemnation. Any of the following: (a) Any temporary or permanent taking of (or of the right to use or occupy) all or any part of the Property by condemnation, eminent domain, or any similar proceeding; or (b) any action by any Government not resulting in an actual transfer of an interest in (or of the right to use or occupy) all or any part of the Property, but creating
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a right to compensation, such as a change in grade of any street upon which the Property abuts.
1.1.15Control. Possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person and contractually bind such Person, whether by ownership of Equity Interests, by contract, or otherwise.
1.1.16County. The County of San Bernardino, California.
1.1.17Deed of Trust. The Deed of Trust, executed by Owner as Trustor, in favor of the City as Beneficiary, of even date with this Regulatory Agreement.
1.1.18Default Interest. Interest at an annual rate equal to the lesser of: (a) eight percent (8%) per annum; or (b) the Usury Limit.
1.1.19Development. The improvements that have been constructed on the Property, which include a thirty (30) unit multifamily residential housing development and associated amenities.
1.1.20Environmental Claim. Any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including Legal Costs and fees and costs of environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever, directly or indirectly, relating to or arising from any actual or alleged violation of any Environmental Law or Hazardous Substance Discharge.
1.1.21Environmental Law. Any Law regarding any of the following at, in, under, above, or upon the Property: (a) air, environmental, ground water, or soil conditions; or (b) clean-up, remediation, control, disposal, generation, storage, release, discharge, transportation, use of, or liability or standards of conduct concerning, Hazardous Substances.
1.1.22Equity Interest. All or any part of any direct or indirect equity or ownership interest(s) (whether stock, partnership interest, beneficial interest in a trust, membership interest in a limited liability company, or other interest of an ownership or equity nature) in any entity, at any tier of ownership, that directly or indirectly owns or holds any ownership or equity interest in a Person.
1.1.23Event of Default. The occurrence of any one or more of the following:
(a)Reporting Default. If the Owner fails to deliver any Annual Report as and when required in Section 2.8.6 or fails or refuses to allow and cooperate with any City audit of Development Records in accordance with Section 8, each after fifteen (15) calendar days’ Notice of such failure;
(b)Bankruptcy or Insolvency. Owner admits in writing that it is unable to pay its debts as they become due or becomes subject to any Bankruptcy Proceeding (except an involuntary Bankruptcy Proceeding dismissed within one hundred twenty (120) days after commencement), or a custodian or trustee is appointed to take possession of, or an attachment, execution or other judicial seizure is made with respect to, substantially all of Owner’s assets or
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Owner’s interest in this Regulatory Agreement (unless such appointment, attachment, execution, or other seizure was involuntary, and is contested with diligence and continuity and vacated and discharged within one hundred twenty (120) days);
(c)Transfer. The occurrence of a Transfer, whether voluntarily or involuntarily or by operation of Law, in violation of the terms and conditions of this Regulatory Agreement or the Loan Agreement;
(d)Other Default. Any default, other than those specifically addressed in Section 1.1.1(a), Section 1.1.23Error! Reference source not found. or Section 1.1.23(c), that is not cured within thirty (30) days after Notice to the Owner describing the default in reasonable detail, or, in the case of a default that cannot with reasonable diligence be cured within thirty (30) days after the effective date of such Notice, if the Owner does not do all of the following: (a) within thirty (30) days after Notice of such default, advise the City of the intention of the Owner to take all reasonable steps to cure such default; (b) duly commence such cure within such period, and then diligently prosecute such cure to completion; and (c) complete such cure within a reasonable time under the circumstances; or
1.1.24Full Insurable Value. The actual cost of replacing the property in question, without allowance for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies providing property insurance coverage for such property.
1.1.25Government. Each and every governmental agency, City, bureau, department, quasi-governmental body, or other entity or instrumentality having or claiming jurisdiction over the Property or the Development (or any activity this Regulatory Agreement requires or allows), including the government of the United States of America, the State and the County governments and their subdivisions and municipalities, including the City, the City, and all other applicable governmental agencies, authorities, and subdivisions thereof. “Government” shall also include any planning commission, board of standards and appeals, department of buildings, city council, zoning board of appeals, design review board or committee or similar body having or claiming jurisdiction over the Property or any activities on or at the Property.
1.1.26Hazardous Substance. Any flammable substances, explosives, radioactive materials, asbestos, asbestos-containing materials, polychlorinated biphenyls, chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, medical wastes, toxic substances or related materials, explosives, petroleum, petroleum products, and any “hazardous” or “toxic” material, substance or waste that is defined by those or similar terms or is regulated as such under any Law, including any material, substance or waste that is: (a) defined as a “hazardous substance” under Section 311 of the Water Pollution Control Act (33 U.S.C. § 1317), as amended; (b) substances designated as “hazardous substances” pursuant to 33 U.S.C. § 1321; (c) defined as a “hazardous waste” under Section 1004 of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., as amended; (d) defined as a “hazardous substance” or “hazardous waste” under Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Reauthorization Act of 1986, 42 U.S.C. § 9601, et seq., or any so-called “superfund” or “superlien” law; (e) defined as a “pollutant” or “contaminant” under 42 U.S.C. § 9601(33); (f) defined as
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“hazardous waste” under 40 C.F.R. Part 260; (g) defined as a “hazardous chemical” under 29 C.F.R. Part 1910; (h) any matter within the definition of “hazardous substance” set forth in 15 U.S.C. § 1262; (i) any matter, waste or substance regulated under the Toxic Substances Control Act (“TSCA”) [15 U.S.C. Sections 2601, et seq.]; (j) any matter, waste or substance regulated under the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; (k) those substances listed in the United States Department of Transportation (DOT) Table [49 C.F.R. 172.101]; (l) any matter, waste or substances designated by the EPA, or any successor City, as a hazardous substance [40 C.F.R. Part 302]; (m) any matter, waste or substances defined as “hazardous waste” in Section 25117 of the California Health and Safety Code; (n) any substance defined as a “hazardous substance” in Section 25316 of the California Health and Safety Code; (o) any matter, waste, or substance that is subject to any other Law regulating, relating to or imposing obligations, liability or standards of conduct concerning protection of human health, plant life, animal life, natural resources, property or the enjoyment of life or property free from the presence in the environment of any solid, liquid, gas, odor or any form of energy from whatever source; or (p) other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under Law or in the regulations adopted pursuant to said Law, including manure, asbestos, polychlorinated biphenyl, flammable explosives and radioactive material. Hazardous Substances do not include substances of a type and quantity typically used in the construction and operation of developments similar to the Development and used in compliance with Environmental Laws
1.1.27Hazardous Substance Discharge. Any deposit, discharge, generation, release, or spill of a Hazardous Substance that occurs at, on, under, into or from the Property, or during the transportation of any Hazardous Substance to or from the Property, or that arises at any time from the Construction, installation use or operation of the Development or any activities conducted at, on, under or from the Property, whether or not caused by a Party.
1.1.28HUD. The Secretary of the United States Department of Housing and Urban Development.
1.1.29Income Certification Form. A certification in substantially the form of Exhibit “B” attached to this Regulatory Agreement or in such other form subsequently reasonably required by City.
1.1.30Indemnify. Where this Regulatory Agreement states that any Indemnitor shall “indemnify” any Indemnitee from, against, or for a particular Claim, that the Indemnitor shall indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against such Claim (alleged or otherwise). “Indemnified” shall have the correlative meaning.
1.1.31Indemnitee. Any Person entitled to be Indemnified under the terms of this Regulatory Agreement.
1.1.32Indemnitor. A Party that agrees to Indemnify any other Person under the terms of this Regulatory Agreement.
1.1.33Legal Costs. In reference to any Person, all reasonable costs and expenses such Person incurs in any legal proceeding (or other matter for which such Person is entitled to be reimbursed for its Legal Costs), including reasonable attorneys’ fees, court costs and
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expenses, and consultant and expert witness fees and expenses.
1.1.34Liability Insurance. Commercial general liability insurance against claims for bodily injury, personal injury, death or property damage occurring upon, in, or about the Property, the Development or adjoining streets or passageways, at least as broad as Insurance Services Office Occurrence Form CG001, with a minimum liability limit of Two Million Dollars ($2,000,000) for any one occurrence and which may be provided through a combination of primary and excess or umbrella insurance policies. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the Development or the general aggregate limit shall be twice the required minimum liability limit for any one occurrence.
1.1.35Maintenance Deficiency. Defined in Section Error! Reference source not found..
1.1.36Maintenance Standard. Defined in Section Error! Reference source not found.
1.1.37Notice. Any consent, demand, designation, election, notice, or request relating to this Regulatory Agreement, including any Notice of Default. All Notices must be in writing.
1.1.38Notice of Default. Any Notice claiming or giving Notice of a Default or alleged Default.
1.1.39Notify. To give a Notice.
1.1.40Owner Parties. Collectively, the Owner, members, directors, officers, employees, agents, partners, managers and holders of Equity Interests in the Owner.
1.1.41Owner Party. Individually, the Owner, each of its members, directors, officers, employees, agents, partners, managers, and each holder of Equity Interests in the Owner.
1.1.42Parties. Collectively, the City and the Owner.
1.1.43Party. Individually, either the City or the Owner, as applicable.
1.1.44Person. Any association, corporation, governmental entity or agency, individual, joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated organization or other entity of any kind.
1.1.45Property Records. All books, records, statements, contracts and other records of the Owner or any Affiliate relating in any way to the use, occupancy or operation of the Property or the Development, including Income Certification Forms completed by applicants or tenants of the Development, Annual Reports, accounting of Development revenues, and accounting of Development expenses. All Development Records shall be prepared in accordance with industry standards and generally accepted accounting principles.
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1.1.46Property. That certain real property located within the City of San Bernardino, County of San Bernardino, State of California, specifically described in the legal
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description attached as Exhibit “A” to this Regulatory Agreement, which is incorporated into this Regulatory Agreement by this reference.
1.1.47Property Insurance. Insurance providing coverage for the Property and all improvements on or to the Property against loss, damage, or destruction by fire and other hazards encompassed under the broadest form of property insurance coverage then customarily used for like properties in the County, in an amount equal to one hundred percent (100%) of the replacement value (without deduction for depreciation) of all improvements comprising the Development (excluding excavations and foundations), and in any event sufficient to avoid co- insurance and with no co-insurance penalty provision, with “ordinance or law” coverage. To the extent customary for like properties in the County at the time, such insurance shall include coverage for explosion of steam and pressure boilers and similar apparatus located on the Property; an “increased cost of construction” endorsement; and an endorsement covering demolition and cost of debris removal, all subject to policy sublimits. Property Insurance shall also include rental or business interruption insurance in an amount, at least, equal to the average annual Gross Income of the Development for the preceding three (3) calendar years and providing for a 12-month extended period of indemnity.
1.1.48Qualifying Household. A household that: (1) intends to reside in an Affordable Unit; and (2) upon initial income certification, and each year thereafter (subject to the terms of this Regulatory Agreement), meets the income restrictions for an “extremely low income household,” as defined by California Health and Safety Code section 50106 and implementing regulations, in accordance with the income limits published by HUD.
1.1.49Security Instrument. Any security instrument, deed of trust, security deed, contract for deed, deed to secure debt, or other voluntary real property (including leasehold) security instrument(s) or agreement(s) intended to grant real property (including leasehold) security for any obligation (including a purchase-money or other promissory note) encumbering the Property, as entered into, renewed, modified, consolidated, increased, decreased, amended, extended, restated, assigned (wholly or partially), collaterally assigned, or supplemented from time to time, unless and until paid, satisfied, and discharged of record. If two or more such security instruments are consolidated or restated as a single lien or held by the same Lender (as applicable), then all such security instruments so consolidated or restated shall constitute a single Security Instrument. A participation interest in a security instrument (or partial assignment of the secured loan) does not itself constitute a Security Instrument.
1.1.50Term. The period of time beginning on the date of recordation of this Regulatory Agreement and ending on the fifty-fifty (55th) anniversary of the date when all Affordable Units are leased to or Available to Qualifying Households as more specifically set forth in Section 2.4 of this Regulatory Agreement.
1.1.51Transfer. Regarding any property, right or obligation means any of the following, whether by operation of law or otherwise, whether voluntary or involuntary, and whether direct or indirect: (a) any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any easement, lien, or other encumbrance); (b)
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any conversion, exchange, issuance, modification, reallocation, sale, or other transfer of any direct or indirect Equity Interest(s) in the owner of such property, right or obligation by the holders of such Equity Interest(s); (c) any transaction described in “b” affecting any Equity Interest(s) or any other interest in such property, right or obligation or in any such owner (or in any other direct or indirect owner at any higher tier of ownership) through any manner or means whatsoever, except, as applicable, for a transfer by the investor member/limited partner of its Equity Interests in Owner or the removal of a managing member/general partner of Owner by an investor member/limited partner of Owner for a default under Owner’s operating/limited partnership agreement; or (d) any transaction that is in substance equivalent to any of the foregoing. A transaction affecting Equity Interests, as referred to in clauses “b” through “d,” shall be deemed a Transfer by the Owner even though the Owner is not technically the transferor. A “Transfer” shall not, however, include any of the following (provided that the other Party has received Notice of such occurrence) relating to the Property and/or any Equity Interest: (i) a mere change in form of ownership with no material change in beneficial ownership and constitutes a tax-free transaction under federal income tax law and the State real estate transfer tax; (ii) a conveyance only to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit; (iii) a conveyance only to any Person that, as of the date this Regulatory agreement is recorded, holds an Equity Interest in the entity whose Equity Interest is being transferred; (iv) the original sale of Equity Interests in Owner; (v) a conveyance only to an Affiliate of Owner; (vi) the transfer of the interests in the limited partner to the Owner; or (vii) the removal of the general partner of the Owner by its limited partner according to the terms of the Owner’s limited partnership agreement.
1.1.52Unavoidable Delay. A delay in either Party performing any obligation under this Regulatory Agreement, except payment or deposit of money, arising from or on account of any cause whatsoever beyond the Party’s reasonable control, including strikes, labor troubles or other union activities, casualty, war, acts of terrorism, riots, litigation, governmental action or inaction, regional natural disasters or inability to obtain required materials. Unavoidable Delay shall not include delay caused by a Party’s financial condition, illiquidity, or insolvency.
1.1.53Waiver of Subrogation. A provision in, or endorsement to, any insurance policy, by which the carrier agrees to waive rights of recovery by way of subrogation against either Party to this Regulatory Agreement for any loss such policy covers.
1.1.54Workers Compensation Insurance. Workers compensation insurance complying with the provisions of State law and an employer’s liability insurance policy or endorsement to a liability insurance policy, with a minimum liability limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of the Owner and the Management Agent.
2.AFFORDABLE RENTAL HOUSING COVENANTS AND RESTRICTIONS
2.1 Reservation of Property for Development. The Owner covenants and agrees to reserve and restrict the Property and, thereafter, use and make Available the Affordable Units within the Property for residential occupancy by individuals and families who, at the time of initial occupancy of an Affordable Unit and continuously thereafter (subject to the other provisions of this Regulatory Agreement), until the end of the Term, are members of a Qualifying Household.
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2.2 RESERVED.
2.3 RESERVED.
2.4 Term of Affordability for Affordable Units. The Affordable Units that are confirmed to be rented to Qualifying Households in the initial Annual Report shall be rented or Available to Qualifying Households for not less than 55 years from recordation of this Regulatory Agreement.
Affordable Units that are first rented to Qualifying Households at a later date shall be rented or Available to Qualifying Households for 55 years from the date that each Affordable Unit is first rented to a Qualifying Household. Owner shall indicate the date that each Affordable Unit was first rented to a Qualifying Household in the Annual Reports filed with the City.
2.5 Restrictive Covenant for Affordable Units on the Property. The Owner shall make available and rent the Affordable Units as follows: Twelve (12) one-bedroom units and three (3) two-bedroom units shall be available and rented to households whose income does not exceed thirty percent (30%) of the Area Median Income at an Affordable Rent, as set forth in Section 2.8.
The Affordable Units restricted under this Agreement shall be in addition to the units restricted by the LMIHAF Regulatory Agreement. The applicable restrictions are further set forth below:
# UNITS BEDROOMS %AMI RESTRICTIONS
12 1 30% LMIHAF Regulatory Agreement
9 1 50% PLHA Regulatory Agreement
3 2 30% LMIHAF Regulatory Agreement
5 2 50% PLHA Regulatory Agreement
2.6 Continuous Operation Covenant. The Owner covenants to and for the benefit of the City to cause the Development to be continuously operated, in accordance with the other provisions of this Section 2, throughout the Term.
2.7 Abandonment. The Owner shall not abandon or surrender the operation of all or any part of the Development during the Term, except due to material casualty or condemnation.
2.8 Affordable Rent. The monthly rent charged to a Qualifying Household for the occupancy of an Affordable Unit may never exceed an Affordable Rent for such Affordable Unit.
2.8.1Rent Increases. Rent for Affordable Units may be increased only once per calendar year, based on changes in Area Median Income; provided that the City may, in its reasonable discretion, waive the restriction on number of rent increases in a calendar year.
Notwithstanding the foregoing, the rent for each Affordable Unit must never exceed an Affordable Rent for the Affordable Unit.
2.8.2Determination of Household Income. Determination of Qualifying
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Household income shall be made by the Owner at the time of initial application by an individual or family for occupancy of an Affordable Unit. At the time of initial application, the Owner shall require an applicant to complete the Income Certification Form and certify the accuracy of the information provided on such form. Annually thereafter, the Owner shall require each Qualifying Household occupying an Affordable Unit to recertify the Qualifying Household’s income on the Income Certification Form. The Owner shall make a good faith effort to verify the accuracy of income information provided in any Income Certification Form by an applicant for occupancy of an Affordable Unit or by a Qualifying Household occupying an Affordable Unit, by taking one or more of the following steps, as reasonably required or indicated: (1) obtain an income tax return and copy of each W2 Wage and Earnings Statement for the most recently concluded income tax year; (2) conduct a credit reporting agency or similar search; (3) obtain an income verification form from the applicant’s or the Qualifying Household’s current employer(s); (4) obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant or the Qualifying Household receives assistance from either of such agencies; or (5) if the applicant or an adult member of a Qualifying Household is unemployed and has no such income tax return, obtain another form of independent verification.
For purposes of this Section 2.8.2, the Owner may conclusively rely upon the evidence of the age of the occupant(s) of an Affordable Unit as presented in a valid California Driver’s License, other form of identification issued by the State of California or the United States Government, which includes a date of birth. All such verification information shall only be obtained by the Owner after obtaining the applicant’s or the Qualifying Household’s written consent for the release of such information to the Owner. Failure to consent in writing to the release of such income verification information to the Owner may disqualify an applicant for occupancy of an Affordable Unit or be grounds for termination of Qualifying Household’s occupancy of an Affordable Unit.
2.8.3 If, upon any recertification, the income of a previously Qualifying Household is less than one hundred forty percent (140%) of the appropriate income level for the applicable Affordable Unit as adjusted for household size, then such household shall continue to be deemed a Qualifying Household under this Regulatory Agreement. If, upon any recertification, the income of a previously Qualifying Household exceeds one hundred forty percent (140%) of Lower Income as adjusted for household size, then, to the extent allowed by Law, the Owner shall notify such household that its lease for its Affordable Unit will not be renewed upon the expiration of its lease, unless the household again becomes a Qualifying Household upon recertification prior to the expiration of its lease.
2.8.4 The Owner shall maintain on file all Income Certification Forms completed by applicants for occupancy of Affordable Units and by Qualifying Households that occupied or are occupying Affordable Units in accordance with Section 2.9 and shall provide copies of the rent roll and Income Certification Forms to the City for its review and approval within fifteen (15) days following Notice to the Owner.
2.8.5 The Owner shall, and the Owner shall make best efforts to cause each Qualifying Household occupying an Affordable Unit to, permit the City to conduct inspections of the Property, the Development and each Affordable Unit, from time-to-time, for purposes of verifying compliance with this Regulatory Agreement, upon fifteen (15) days prior written notice to the Owner.
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2.8.6 Within thirty (30) days of recordation of this Regulatory Agreement, and thereafter on each April 30 during the Term and within sixty (60) days following the expiration of the Term, the Owner shall submit an Annual Report to the City. The City shall maintain the confidentiality of the information contained in any Annual Report specifically relating to any particular Qualifying Household occupying an Affordable Unit, to the extent reasonably allowed by Law, as determined by the City’s general or special counsel.
2.9 Owner Covenant Regarding Lease of Affordable Units. The Owner, for itself, its successors and assigns, covenants and agrees that, if any Affordable Unit is rented or leased during the Term, the rental or lease of the Affordable Unit shall be accomplished through a written lease agreement and all of the following restrictions shall apply:
2.9.1 A Qualifying Household shall be the record tenant and only occupant of the Affordable Unit.
2.9.2 The Owner shall provide a legible copy of this Regulatory Agreement to each prospective tenant of any Affordable Unit, upon request by such tenant.
2.9.3 The lease for each Affordable Unit shall expressly state that it is subject and subordinate to this Regulatory Agreement and shall incorporate each and every provision of this Regulatory Agreement, either expressly or by reference.
2.9.4 The lease for each Affordable Unit shall be for a period of not less than twelve (12) months.
2.9.5 The lease for each Affordable Unit shall not contain any of the following provisions:
(a) An agreement by the Qualifying Household to be sued, to admit guilt or to the entry of a judgment in favor of the Owner in a lawsuit brought in connection with the lease;
(b) An agreement by the Qualifying Household that the Owner may take, hold or sell personal property of any member(s) of the Qualifying Household, without notice to the Qualifying Household and a court decision on the respective rights of the Owner and the member(s) of the Qualifying Household, other than an agreement by the Qualifying Household concerning disposition of personal property remaining in the Affordable Unit after the Qualifying Household has moved out of the Affordable Unit;
(c) An agreement by the Qualifying Household not to hold the Owner or its agents legally responsible for any willful misconduct or negligence attributable to the Owner or its agents;
(d) An agreement by the Qualifying Household that the Owner may institute a lawsuit, involving or affecting the Qualifying Household or any of its members, without notice to the Qualifying Household;
(e) An agreement by the Qualifying Household that the Owner may
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evict the Qualifying Household without instituting a civil court proceeding in which the Qualifying Household has an opportunity to present a defense or before a court decision on the respective rights of the Owner and the Qualifying Household;
(f) An agreement by the Qualifying Household to waive any right to a trial by jury;
(g) An agreement by the Qualifying Household to waive the Qualifying Household’s right to appeal or to otherwise challenge a court decision in connection with the lease;
(h) An agreement by the Qualifying Household to pay attorney’s fees or other legal costs, even if the Qualifying Household wins in a court proceeding by the Owner against the Qualifying Household; provided, however, the Qualifying Household may be obligated to pay costs if the Qualifying Household loses such a legal action; (i) An agreement by the Qualifying Household to pay one (1) or more security deposits (or the equivalent) totaling in excess of the amount of one month’s rent for such Affordable Unit. Failure to pay any security deposit installment may constitute a breach of the lease.
2.9.6 Each lease for an Affordable Unit shall contain all of the following provisions:
(a) An agreement authorizing the Owner to immediately terminate the tenancy of a Qualifying Household occupying an Affordable Unit, where one or more members of that Qualifying Household misrepresented any fact material to the qualification of such household as a Qualifying Household;
(b) An agreement providing that each Qualifying Household occupying an Affordable Unit shall be subject to annual certification or recertification of income as a condition to continued occupancy of the Affordable Unit; (c) An agreement providing that each Qualifying Household occupying an Affordable Unit may be subject to rental increases in accordance with this Regulatory Agreement;
(d) Providing that the Owner will not discriminate on the basis of race, creed, color, gender, sexual orientation, national origin, ancestry, religion, marital status, age, disability or receipt of public assistance or housing assistance in connection with rental of an Affordable Unit, or in connection with the employment or application for employment of persons for operation and management of the Development, and all contracts, applications and leases entered into for such purposes shall contain similar non-discrimination clauses to such effect; and (e) Providing that the Qualifying Household shall occupy the Affordable Unit as its principal residence and shall not sublease all or part of the Affordable Unit for any purpose.
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2.9.7 The Owner shall not terminate the tenancy or refuse to renew the lease or rental agreement of a Qualifying Household except for: (i) serious or repeated violations of the terms and conditions of the lease; (ii) because the previously Qualifying Household is no longer a Qualifying Household; (iii) for violation of applicable Federal, State, or local law; or (iv) for other good cause. The Owner shall, in connection with termination of the tenancy of a Qualifying Household or a refusal to renew the lease or rental agreement of a Qualifying Household, serve written notice upon the Qualifying Household specifying the grounds for the action in accordance with all applicable Laws and at least thirty (30) days before the effective date of the termination of the tenancy, unless the termination is pursuant to a legal action in unlawful detainer.
2.10 Tenant Selection Policies and Criteria. The Owner shall adopt written tenant selection policies and criteria that:
2.10.1 are consistent with the purpose of providing affordable rental housing for Qualifying Households at an Affordable Rent;
2.10.2 are reasonably related to tenant eligibility and ability to perform the obligations of the lease for an Affordable Unit;
2.10.3 subject to applicable fair housing laws, give reasonable preference and consideration to the housing needs of individuals that are involuntarily displaced by activities of the City;
2.10.4 provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable;
2.10.5 give prompt written notice to any rejected applicant of the grounds for rejection;
2.10.6 provide for all of the Affordable Units to be Available for occupancy on a continuous basis to Qualifying Households at an Affordable Rent;
2.10.7 do not give preference to any particular class or group of Persons in leasing or renting the Affordable Units, except as provided in 2.10.3 and to the extent that a tenant must be a Qualifying Household;
2.10.8 provide that there shall be no discrimination against or segregation of any Person or group of Persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property, nor shall Owner or any Person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Property.
Notwithstanding the immediately preceding sentence, with respect to familial status, this Section Error! Reference source not found. shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in this Section Error! Reference source not found. shall be construed to affect Sections 51.2, 51.3,
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51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to
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housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code. All deeds, leases or contracts made or entered into by the Owner as to Affordable Units or the Property shall contain covenants prohibiting discrimination, as set forth in Health and Safety Code Section 33436(b).
2.11 Property Records Retention; Audit and Examination Rights.
2.11.1Retention of Development Records. The Owner shall prepare and maintain and shall cause its Affiliates to prepare and maintain complete and accurate Development Records for all periods during the Term. The Owner shall, at all times during the Term and for a period of six (6) years following the end of the Term, maintain and cause to be maintained by its Affiliates, safe and intact, all of the Development Records for a period of not less than six (6) years from the generation of such Development Records. From time to time, upon request from the City, the Owner shall make all Development Records, whether in the custody or control of the Owner or its Affiliates, available to the City, the City’s auditor, representative or agent for examination and copying at any reasonable time, on fifteen (15) calendar days advance Notice. The Owner shall also provide the City any additional information concerning the Affordable Units, the Development or the Property reasonably requested by the City.
2.11.2Audit Procedures.
(a) The City may cause an audit of any and all Development Records by an independent auditor of the City’s selection. The City shall preserve the confidentiality of information contained in the Development Records, to the extent permitted by Law, as determined by the City’s general counsel.
(b) If the Owner fails to provide any Annual Report to the City, as and when required under Section 2.8.6, and such failure is not cured within the time periods described in Section 1.1.22(d) of this Regulatory Agreement, the Owner shall be in Default under this Regulatory Agreement. Notwithstanding any other provision of this Regulatory Agreement, if the Owner fails to deliver any Annual Report to the City, within thirty (30) calendar days after Notice specifying such Default, the City shall have the right, in addition to any other rights or remedies the City may have under this Regulatory Agreement regarding such Default, to conduct an audit of any and all applicable Development Records to attempt to identify the information that should have been provided by the Owner in such Annual Report. The Owner shall reimburse the City for the reasonable cost of any audit conducted pursuant to this Section 2.11.2(b), on Notice of such cost from the City. The Owner shall pay Default Interest to the City on the amount of any audit cost becoming due to the City from the Owner pursuant to this Section 2.11.2(b), that is not paid within fifteen (15) calendar days following Notice requesting such payment, from the date of such Notice until paid in full.
2.12 Compliance. The Owner shall, during the Term and at the Owner’s sole cost and expense, in all material respects: (a) comply with all Laws; and (b) procure and comply with all Approvals required by Law.
3.PROPERTY MANAGEMENT
3.1 Management. The Owner shall operate the Development in a manner that will provide
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decent, safe and sanitary residential facilities to the occupants of the Development, will comply with all the provisions of this Regulatory Agreement, any other applicable contract or agreement between the City and the Owner, and all applicable Law. The Owner shall be responsible for management of the Development, including, without limitation, the selection of Qualifying Households for Affordable Units, certification and recertification of household size and income for Qualifying Households occupying all Affordable Units, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility for the management or operation of the Development or the Property.
For the purposes of this Regulatory Agreement, the Owner may directly perform the management functions associated with the Development through its employees or by means of a service contract with an Affiliate, without seeking approval from the City. If the Owner desires to retain a Person other than the Owner or an Affiliate, to manage the Development on the Owner’s behalf, the Owner shall submit for City’s approval the identity of any proposed management agent, together with additional information relevant to the background and experience of any proposed management agent, as reasonably requested by the City. The City may approve the proposed management agent by Notice to the Owner within thirty (30) days following the City’s receipt of all requested information regarding such agent, as provided for in the immediately preceding sentence. Unless the proposed management agent is reasonably disapproved by the City within such thirty (30) day period, the management agent shall be deemed approved by the City. The City hereby approves the Eden Housing Management, Inc. as the management agent for the Development.
3.1.1Performance Review. Upon Notice from the City, the Owner shall, with the participation of the City, periodically review the management practices and financial status of the Development and the Owner or management agent. The City shall not request such periodic review more frequently than twice each calendar year. The purpose of each periodic review will be to enable the City to determine whether or not the Development is being operated, maintained, and managed in accordance with the requirements and standards of this Regulatory Agreement and all applicable Law relevant to the Regulatory Agreement.
3.1.2Replacement of Management Agent. Any contract for the operation or management of the Development entered into by the Owner with a Person shall provide that the contract shall have a term of no more than one (1) calendar year and that the contract is subject to the provisions of this Regulatory Agreement. If the Affordable Units are not being operated and managed materially in accordance with the requirements and standards of this Regulatory Agreement and all applicable Law, the City shall provide written notice to the Owner of such deficiency and shall within 30 days following the receipt of such notice the Owner shall remove the management agent and replace the management agent with a different Person approved by the City, pursuant to Section Error! Reference source not found.. The Owner’s failure to remove and replace the Management Agent in any such circumstance shall constitute a Default by the Owner under this Regulatory Agreement.
3.2 Insurance.
3.2.1Owner to Insure. To protect the City Parties against all insurable Claims resulting from the actions of Owner or the Management Agent in connection with this Regulatory Agreement, the Property or the Development, Owner shall maintain, at the sole cost and expense of Owner, the following insurance (or its then reasonably available equivalent): (a)
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Liability Insurance; (b) Property Insurance; and (c) Workers Compensation Insurance.
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3.2.2Nature of Insurance Program. All Liability Insurance and Property Insurance policies this Regulatory Agreement requires shall be issued by carriers that: (a) are listed in the then current “Best’s Key Rating Guide—Property/Casualty—United States & Canada” publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of “A-” and a minimum financial size category of “VII” (exception may be made for the State Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in the State. The Owner may provide any insurance under a “blanket” or “umbrella” insurance policy, provided that: (1) such policy or a certificate of such policy shall specify the amount(s) of the total insurance allocated to Property and the Development, which amount(s) shall equal or exceed the amount(s) required by this Regulatory Agreement; and (2) such policy otherwise complies with the requirements of this Regulatory Agreement.
3.2.3Policy Requirements and Endorsements. All insurance policies required by this Regulatory Agreement shall contain (by endorsement or otherwise) the following provisions:
(a)Insured. Liability Insurance policies shall name the City as “additional insured.” Property Insurance and Builders Risk Insurance policies shall name the City as a “loss payee.” The coverage afforded to the City shall be at least as broad as that afforded to Owner regarding the Property and the Development and may not contain any terms, conditions, exclusions or limitations applicable to the City Parties that do not apply to Owner. (b)Primary Coverage. Any insurance or self-insurance maintained by the City Parties shall be excess of all insurance required under this Regulatory Agreement and shall not contribute with any insurance required by this Regulatory Agreement. (c)Contractual Liability. Liability Insurance policies shall contain contractual liability coverage for the Owner’s indemnity obligations under this Regulatory Agreement and the City and Owner acknowledge and agree that any proceeds received by Owner as a result of such coverage shall constitute Surplus Cash that may be used for the purpose of indemnifying the City in accordance with the requirements of this Regulatory Agreement. The Owner’s obtaining or failure to obtain such contractual liability coverage shall not relieve the Owner from nor satisfy any indemnity obligation of the Owner under this Regulatory Agreement. (d)Notice to City. Each insurance carrier shall give the City no less than thirty (30) calendar days’ advance written notice of any cancellation or non-renewal of any insurance policy required by this Regulatory Agreement. Also, phrases such as “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company” shall not be included in the cancellation wording of any certificates of insurance or any coverage for the City Parties. The Owner 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. (e)Deliveries to City. Evidence of Owner’s maintenance of all insurance policies required by this Regulatory Agreement shall be delivered to the City on the date of this Regulatory Agreement. No later than three (3) days before any insurance required by this Agreement expires, is cancelled or its liability limits are reduced or exhausted, Owner shall deliver
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to the City evidence of Owner’s maintenance of all insurance this Regulatory Agreement requires.
Each insurance policy required by this Regulatory Agreement shall be endorsed to state that coverage shall not be cancelled, suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar days’ advance written notice of such action has been given to City by certified mail, return receipt requested; provided; however, that only ten (10) days’ advance written notice shall be required for any such action arising from non-payment of the premium for the insurance.
Phrases such as “endeavor to” and “but failure to mail such Notice shall impose no obligation or liability of any kind upon the company” shall not be included in the cancellation wording of any certificates or policies of insurance applicable to the City Parties pursuant to this Regulatory Agreement.
(f)Waiver of Certain Claims. Owner shall cause each insurance carrier providing any Liability Insurance, Worker’s Compensation Insurance, Automobile Liability Insurance or Property Insurance coverage under this Regulatory Agreement to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to the City Parties, if not already in the policy. To the extent that the Owner obtains insurance with a Waiver of Subrogation, the Owner and the City release each other, and their respective authorized representatives, from any Claims for damage to any Person or property to the extent such Claims are paid by such insurance policies obtained pursuant to or in satisfaction of the provisions of this Regulatory Agreement.
(g)No Representation. No Party makes any representation that the limits, scope, or forms of insurance coverage this Regulatory Agreement requires are adequate or sufficient.
(h)No Claims Made Coverage. None of the insurance coverage required under this Regulatory Agreement may be written on a claims-made basis. (i)Fully Paid and Non-Assessable. All insurance obtained and maintained by Owner in satisfaction of the requirements of this Regulatory Agreement shall be fully paid for and non-assessable. However, Owner’s policies may be subject to insurer audits. (j)City Option to Obtain Coverage. During the continuance of an Event of Default arising from the failure of Owner to carry any insurance required by this Regulatory Agreement, the City may, at its sole option, purchase any such required insurance coverage and the City shall be entitled to immediate payment from the Owner of any premiums and associated reasonable costs paid by the City for such insurance coverage. Any amount becoming due and payable to the City under this Section 3.2.3(j) that is not paid within fifteen (15) calendar days after written demand from the City for payment of such amount, with an explanation of the amounts demanded, will bear interest from the date of the demand at the rate of eight percent (8%) per annum or the Usury Limit, whichever is less. Any election by the City to purchase or not to purchase insurance otherwise required by the terms of this Regulatory Agreement to be carried by Owner shall not relieve the Owner of its obligation to obtain and maintain any insurance coverage required by this Regulatory Agreement.
(k)Separation of Insured. All Liability Insurance and Automobile Liability Insurance shall provide for separation of insured for Owner and the City Parties.
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Insurance policies obtained in satisfaction of or in accordance with the requirements of this Agreement may provide a cross-suits exclusion for suits between named insured Persons, but shall not exclude suits between named insured Persons and additional insured Persons.
3.2.4Insurance Independent of Indemnification. The insurance requirements of this Regulatory Agreement are independent of the Owner’s indemnification and other obligations under this Regulatory Agreement and shall not be construed or interpreted in any way to satisfy, restrict, limit, or modify the Owner’s indemnification or other obligations under this Regulatory Agreement or to limit the Owner’s liability under this Regulatory Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage. Further, the Owner’s provision of the insurance required by this Regulatory Agreement shall not preclude the City from taking such other actions as are available to the City under any other provision of this Regulatory Agreement or otherwise at law or in equity.
3.2.5Deductibles and Self-Insured Retentions. All deductibles and self- insured retentions under the Owner’s insurance policies are subject to the City’s prior written approval, which shall not be unreasonably withheld. The Owner shall pay or get the insurance company to waive any and all deductibles and self-insured retentions under all insurance policies issued in satisfaction of the terms of this Regulatory Agreement regarding any Claims relating to the City Parties, except to the extent that any such Claims arise from the negligence or willful misconduct of an City Party.
3.2.6No Separate Insurance. The Owner shall not carry separate or additional insurance relating to the Development that is concurrent in form or contributing in the event of loss with the insurance required under this Regulatory Agreement, unless such insurance is endorsed in favor of the City Parties as required by this Regulatory Agreement.
3.2.7No Representation. Neither Party makes any representation that the limits, scope, or forms of insurance coverage this Regulatory Agreement requires are adequate or sufficient.
3.3 Casualty. If any casualty occurs to the Development during the Term, Owner shall, except as otherwise provided in this Section 3.3, Restore the Development with reasonable promptness. If the cost of Restoration of the Development following a casualty exceeds the insurance proceeds available to Owner for such Restoration (if Owner maintains all insurance required by this Regulatory Agreement and inclusive of any deductible or self-insured retention amounts), then Owner shall not be required to Restore the Development, but this Regulatory Agreement shall not be affected.
3.4 Condemnation. If any portion of the Development is taken by exercise of the power of eminent domain by a Government during the Term, then Owner shall Restore the remaining portions of the Development with reasonable promptness, to the extent practicable.
3.5 Maintenance. The Owner, for itself, its successors and assigns, covenants and agrees that:
3.5.1Maintenance Standard. The entirety of the Property and the
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Development shall be maintained by the Owner in good condition and repair, normal wear and tear excepted, and a neat, clean and orderly condition, including, without limitation, maintenance, repair, reconstruction and replacement of any and all asphalt, concrete, landscaping, utility systems, irrigation systems, drainage facilities or systems, grading, subsidence, retaining walls or similar support structures, foundations, signage, ornamentation, and all other improvements on or to the Property, now existing or made in the future by or with the consent of the Owner, as necessary to maintain the appearance and character of the Property, as improved with the Development. The Owner’s obligation to maintain the Property and the Development described in the immediately preceding sentence shall include, without limitation, all of the following, at the Owner’s sole cost and expense: (i) maintaining the surfaces in a level, smooth and evenly covered condition with the type of surfacing material originally installed or such substitute as shall in all respects be equal in quality, use, and durability; (ii) removing all papers, mud, sand, debris, filth and refuse and thoroughly sweeping areas to the extent reasonably necessary to keep areas in a clean and orderly condition; (iii) removing or covering graffiti with the type of surface covering originally used on the affected area, (iv) placing, keeping in repair and replacing any necessary and appropriate directional signs, markers and lines; (v) installing, operating, keeping in repair and replacing where necessary, such artificial lighting facilities as shall be reasonably required; (vi) providing security services as reasonably indicated; (vii) maintaining, mowing, weeding, trimming and watering all landscaped areas and making such replacements of plants and other landscaping material as necessary to maintain the appearance and character of the landscaping; (viii) properly maintaining the windows, structural elements, and painted exterior surface areas of the Development in a clean and presentable manner; (ix) keeping the common areas of the Development and 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; (x) parking of any commercial motor vehicle in excess of 7,000 pounds gross weight anywhere on the Property on other than on a temporary basis; and (xi) the use of garage areas on the Property for purposes other than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of the Owner or persons residing at the Property. The Owner’s obligation to maintain the Development and the Property described in the two immediately preceding sentences is, collectively, referred to in this Regulatory Agreement as the “Maintenance Standard.” The Owner may contract with a maintenance contractor to provide for performance of all or part of the duties and obligations of the Owner with respect to the maintenance of the Property or the Development; provided, however, that the Owner shall remain responsible and liable for the maintenance of the Property and the Development, at all times.
3.5.2Maintenance Deficiency. If, at any time during the Term, there is an occurrence of a material adverse condition on any area of the Property or the Development in contravention of the Maintenance Standard (each such occurrence being a “Maintenance Deficiency”), then the City may notify the Owner in writing of the Maintenance Deficiency. If the Owner fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) calendar days following its receipt of notice of the Maintenance Deficiency, the City shall have the right to enter the Property and/or the Development and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the City to accomplish the abatement of the Maintenance Deficiency.
Any sum expended by the City for the abatement of a Maintenance Deficiency pursuant to this Section 3.5.2 shall be reimbursed to the City by the Owner within thirty (30) calendar days after written demand to the Owner for payment. If any amount becoming due to the City under this
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Section 3.5.2 is not paid within thirty (30) calendar days after written demand to the Owner for payment, the Owner shall also pay Default Interest on such amount until paid in full.
3.5.3Graffiti. Graffiti, as defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Owner by either painting over the evidence of such vandalism with a paint that has been color- matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti is not removed within seventy-two (72) hours following the time of the discovery of the graffiti, or if Owner fails to commence and diligently pursue to remove such graffiti within seventy-two (72) hours following the time of the discovery of the graffiti, the City shall have the right to enter the Property and/or the Development and remove the graffiti, without notice to the Owner. Any sum expended by the City for the removal of graffiti pursuant to this Section 3.5.3, shall be limited to an amount not to exceed Five Hundred Dollars ($500) per entry by the City and shall be reimbursed to the City by the Owner within thirty (30) calendar days after written demand to the Owner for payment. If any amount becoming due to the City for graffiti removal under this Section 3.5.3 is not paid within thirty (30) calendar days after written demand to the Owner for payment, the Owner shall also pay Default Interest in such amount, until paid in full.
3.6 No City Responsibility for Development. The City shall have no responsibility for the construction, installation, management, operation or maintenance of the Development or the Property.
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4.COVENANTS RUN WITH THE LAND
4.1 Covenants to Run With the Land. The Owner and the City hereby declare their mutual specific intent that the covenants, conditions, restrictions, reservations and agreements set forth in this Regulatory Agreement are part of a plan for the promotion and preservation of affordable rental housing within the City and that each shall be deemed covenants running with the land of the Property, binding upon and each successor-in-interest of the Owner in the Development or the Property for the duration of the Term. Regardless of classification or characterization, each of the covenants, conditions, restrictions and agreements contained in this Regulatory Agreement touch and concern the land of the Property and each of them is expressly declared to be for the benefit and in favor of the City for the duration of the Term, regardless of whether the City is or remains an owner of any land or interest in land to which such covenants, conditions, restrictions or agreements relate. The City, in the event of any breach of this Regulatory Agreement, has the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach, as provided in this Regulatory Agreement, at law or in equity. The Owner hereby expressly assumes the duty and obligation to perform each of the agreements and covenants and to honor each of the reservations and restrictions set forth in this Regulatory Agreement. Each and every contract, deed or other instrument hereafter executed covering or conveying all or any portion of the Property or the Development or any interest in the Property or the Development or any Affordable Unit shall incorporate all of the provisions of this Regulatory Agreement, either expressly or by reference, and any contract, deed or other instrument transferring any estate or interest in the Property or the Development shall conclusively be deemed to have been executed, delivered and accepted subject to the agreements, covenants, conditions, reservations, and restrictions of this Regulatory Agreement, regardless of whether such agreements, covenants, conditions, reservations and restrictions are set forth in or referenced such contract, deed or other instrument.
5.REMEDIES
5.1 Remedies. If an Event of Default occurs, then the City shall, at the City’s option, have any or all of the following described remedies, all cumulative (so exercise of one remedy shall not preclude exercise of another remedy), in addition to such other remedies as may be available at law or in equity or under any other terms of this Regulatory Agreement. The City’s remedies shall include:
5.1.1Suits Before End of Term. The City may sue the Owner for damages or other relief, from time to time, at the City’s election, without terminating this Regulatory Agreement, including by mandamus or other suit, action or proceeding at law or in equity, to require the Owner to perform the covenants or agreements or observe the conditions or restrictions of this Regulatory Agreement, or enjoin any acts or things that may be unlawful or in violation of the rights of the City under this Regulatory Agreement; or by other action at law or in equity, as necessary or convenient to enforce the covenants, agreements, conditions or restrictions of this Regulatory Agreement.
5.1.2Receipt of Moneys. No receipt of money by the City from the Owner after any Notice of Default shall affect any Notice previously given to the Owner, or waive the City’s right to enforce payment or deposit of any amount payable or later falling due, or the City’s
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right to enter the Development, it being agreed that after service of Notice of Default or the commencement of suit or proceedings, or after final order or judgment, the City may demand, receive, and collect any moneys due or thereafter falling due, without in any manner affecting such Notice, proceeding, order, suit or judgment, all such moneys collected being deemed payments on account of the Owner’s liability to the City.
5.1.3No Waiver. No failure by the City to insist upon strict performance of any condition, covenant, agreement, restriction or reservation of this Regulatory Agreement or to exercise any right or remedy upon a Default, and no acceptance of full or partial payment of any amount due or becoming due to the City during the continuance of any such Default, shall waive any such Default or such condition, covenant, agreement, restriction or reservation. No obligation of the Owner under this Regulatory Agreement, and no Default, shall be modified, except by a written instrument executed by the City. No waiver of any Default shall modify this Regulatory Agreement. Each and every covenant, agreement, condition, restriction and reservation of this Regulatory Agreement shall continue in full force and effect with respect to any other then-existing or subsequent Default of such condition, covenant, agreement, restriction or reservation of this Regulatory Agreement.
5.1.4Damages. The City may recover from the Owner all damages the City incurs by reason of the Owner’s Default and reimbursement of the City’s reasonable out of pocket costs, including Legal Costs and bank fees for dishonored checks. The City may recover such damages at any time after the Owner’s Default, including after the expiration of the Term.
Notwithstanding any Law to the contrary, the City need not commence separate actions to enforce the Owner’s obligations for each amount or payment not paid, or each month’s accrual of damages and costs for the Owner’s Default, but may bring and prosecute a single combined action for all such damages and costs.
5.1.5Injunction of Breaches. Whether or not an Event of Default has occurred, the City may obtain a court order enjoining the Owner from continuing any Default or from committing any threatened Default. The Owner specifically and expressly acknowledges that damages would not constitute an adequate remedy to the City for any Default.
5.2 Specific Enforcement. The Owner agrees that specific enforcement of the Owner’s non-monetary obligations under this Regulatory Agreement is one of the reasons that the City agreed to restructure the Loan and that, if the Owner breaches any such obligation, potential monetary damages to the City, as well as to prospective Qualifying Households, would be difficult, if not impossible, to evaluate and quantify. Therefore, in addition to any other relief to which the City may be entitled as a consequence of the Owner’s default under this Regulatory Agreement, the Owner agrees to the imposition of the remedy of specific performance against the Owner under this Regulatory Agreement.
5.3 Enforcement. The City shall have the power to enforce this Regulatory Agreement and no other Person shall have any right or power to enforce any provision of this Regulatory Agreement on behalf of the City or to compel the City to enforce any provision of this Regulatory Agreement against the Owner, the Development, the Property or any Affordable Unit. Further, pursuant to Health and Safety Code Section 33334.3(f)(7), this Regulatory Agreement shall be enforceable by the City, any resident of an Affordable Unit, any resident association with members
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who reside in Affordable Units, former residents of Affordable Units who last resided in any such Affordable Unit, applicants for occupancy of Affordable Units and persons on an affordable housing waiting list, subject to the specific requirements of such law.
5.4 Cure by Limited Partner. Any limited partner or non-managing member of Owner shall have the opportunity, but not the obligation, to effect a cure on behalf of Owner within the cure periods afforded to Owner as set forth herein, and City shall accept such cure as if it had been made by Owner. Notwithstanding the foregoing sentence, failure to provide such notice to such limited partner or managing member shall not result in any liability to the City nor permit Owner additional time to cure a default hereunder.
5.5 Termination by Agreement. Any provision of this Regulatory Agreement may be terminated upon written agreement between the City and the Owner, if the City in its sole and absolute discretion determines that such a termination will not adversely affect the affordable rental housing goals or requirements of the City.
6.GENERAL PROVISIONS
6.1 Relationship of Parties. Nothing contained in this Regulatory Agreement shall be interpreted or understood by any of the Parties, or by any Third Person, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City and the Owner or the Owner’s agents, employees or contractors. The Owner shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform any services required of them by the terms of this Regulatory Agreement regarding the Development or the Property. Except as otherwise expressly provided in this Regulatory Agreement, the Owner has the right to exercise full control of employment, direction, compensation and discharge of all Persons assisting the Owner in the development, operation or maintenance of the Development or the Property. The Owner shall be solely responsible for all matters relating to payment of its employees, including compliance with tax withholding and all other Laws governing such employees. The Owner shall be solely responsible for its own acts and those of its agents and employees.
6.2 No Claims. Nothing contained in this Regulatory Agreement shall create or justify any claim against the City by any Person that the Owner may have employed or with whom the Owner may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the operation or maintenance of the Development or the Property.
6.3 Approvals.
6.3.1 Any approvals required from the City under this Regulatory Agreement shall not be unreasonably withheld, conditioned or delayed, except where otherwise specifically provided in this Regulatory Agreement. Wherever this Regulatory Agreement states that a Party’s approval shall be “reasonable” or not unreasonably withheld: (a) such approval shall not be unreasonably withheld, delayed or conditioned; (b) no withholding of approval shall be deemed reasonable, unless withheld by Notice specifying reasonable grounds, in reasonable detail, for such withholding, and indicating specific reasonable changes in the proposal under consideration that
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would make it acceptable; and (c) if a Party grants its consent to any matter, this shall not waive its rights to require such consent for any further or similar matter.
6.3.2 Except as otherwise specifically provided in this Regulatory Agreement, whenever this Regulatory Agreement calls for approval by a Party of a proposed document to be submitted by the other Party, the receiving Party shall notify the other Party of its approval or disapproval of such document within thirty (30) calendar days after receipt of the proposed document. Unless otherwise provided in this Regulatory Agreement, a Party’s failure to respond within such thirty (30) calendar day period shall be deemed the Party’s approval. A Party shall provide specific reasons for any disapproval.
6.4 Warranty Against Payment of Consideration for Regulatory Agreement. Owner represents and warrants to the City that: (a) it has not employed or retained any Person to solicit or secure this Regulatory Agreement upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees of Owner and Third Persons to whom fees are paid for professional services related to planning, design or Construction of the Development or documentation of this Regulatory Agreement; and (b) no gratuities, in the form of entertainment, gifts or otherwise have been or will be given by Owner or any of its agents, employees or representatives to any elected or appointed official or employee of either the City or the City in an attempt to secure this Regulatory Agreement or favorable terms or conditions for this Regulatory Agreement. Breach of the representations or warranties of this Section 6.4 shall entitle the City to terminate this Regulatory Agreement upon seven (7) days’ Notice to the other Parties and Escrow Agent. Upon any such termination of this Regulatory Agreement, Owner shall immediately refund any payments made to or on behalf of Owner by the City or the City pursuant to this Regulatory Agreement or otherwise related to the Property, any Approval, or the Development, prior to the date of any such termination.
6.5 Non-liability of City Officials or Employees. No City Party shall be personally liable to the Owner, or any successor in interest to the Owner, in the event of any Default by the City under this Regulatory Agreement, except to the extent of the negligence or willful misconduct of an City Party.
6.6 Governing Law. This Regulatory Agreement shall be governed by the laws of the State of California. without application of conflicts of laws principles. Any legal action brought in connection with this Agreement shall be instituted in the Superior Court of San Bernardino County, State of California, or in the Federal District Court for the Northern District of California.
6.7 Amendment. This Regulatory Agreement may be amended only by a written instrument executed by both the Owner and the City.
6.8 Attorneys’ Fees. In the event that a Party brings an action to enforce in this Regulatory Agreement or otherwise arising out of this Regulatory Agreement, the prevailing Party in such action shall be entitled to recover from the other Party Legal Costs to be fixed by the court in which a judgment is entered, as well as the costs of such suit. For the purposes of this Regulatory Agreement, the words “reasonable attorneys’ fees” in the case of the City, include both the costs of outside legal counsel retained by the City and the salaries, costs and overhead of the lawyers
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employed in the Office of the City Attorney of the City who are legal counsel to the City in such an action, as allocated on an hourly basis.
6.9 Severability. If any term or provision of this Regulatory Agreement or its application to any Person or circumstance shall to any extent be invalid or unenforceable, then the remainder of this Regulatory Agreement, or the application of such term or provision to Persons or circumstances, other than those as to which it is invalid or unenforceable, shall not be affected by such invalidity. All remaining provisions of this Regulatory Agreement shall be valid and be enforced to the fullest extent Law allows.
6.10 Time is of the Essence. Time is of the essence with respect to the performance of each term, provision, covenant, condition, restriction, reservation or agreement contained in this Regulatory Agreement.
6.11 Titles and Headings for Reference Only. The titles and headings of the articles, paragraphs and sections of this Regulatory Agreement are for convenience and reference only and are not to be considered a part of this Regulatory Agreement and shall not in any way interpret, modify or restrict the meaning of any term, provision, covenant, condition, restriction, reservation or agreement contained in this Regulatory Agreement.
6.12 Notices.
6.12.1 Any and all Notices sent by either Party to the other Party pursuant to or as required by this Regulatory Agreement shall be proper, if in writing and transmitted to the principal office of the City or the Owner, as applicable, as designated in Section 6.12.2, by one or more of the following methods: (i) messenger for immediate personal delivery, (ii) a nationally recognized overnight delivery service (i.e., Federal Express, United Parcel Service, etc.) or (iii) registered or certified United States mail, postage prepaid, return receipt requested. Such Notices may be sent in the same manner to such other addresses as either Party may from time to time designate by Notice, in accordance with this Section 6.12. Any such Notice shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally recognized overnight courier service or three (3) calendar days after it is placed in the United States mail, as provided in this Section 6.12.
Rejection, other refusal to accept or the inability to deliver a Notice because of a changed address of which no notice was given, shall be deemed receipt of the Notice.
6.12.2 The following are the authorized addresses for the submission of Notices to the Parties:
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If to the City: City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Attn: City Manager
With a copy to: Sonia R. Carvalho
Best Best & Krieger LLP
18101 Von Karman Avenue, Suite 1000
San Bernardino, CA 92401
If to the Owner: E Street Veterans Apartments, LP
c/o U.S.VETS Housing Corporation
800 West Sixth Street, Suite 1505
Los Angeles, CA 90017
Attention: Carla Ford
With a copy to: Bergman & Allderdice
1200 Wilshire Blvd, Suite 610
Los Angeles, CA 90017
Attn: Beth Bergman
And
c/o R4 Capital LLC
780 Third Avenue, 16th Floor
New York, New York 10017
Attention: Marc Schnitzer
Telephone Number: 646.576.7659
Telecopier Number: 212.546.9085
E-Mail Address: [email protected]
And
Holland & Knight LLP
787 Seventh Avenue, 31st Floor
New York, New York 10119
Attention: Alan S. Cohen.
Telephone Number: 212.513.3404
Telecopier Number: 212.385.9010
E-Mail Address: [email protected]
6.13 Entire Agreement.
6.13.1 This Regulatory Agreement may be executed in counterpart originals, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. This Regulatory Agreement includes ___________ (__) pages and three (3)
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exhibits.
6.13.2 None of the terms, conditions, covenants, restrictions, reservations, terms, provisions or agreements set forth in this Regulatory Agreement shall be deemed to be merged with any deed conveying title to any estate or interest in the Property or the Development.
6.13.3 This Regulatory Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one and the same instrument.
6.13.4 Signatures delivered by facsimile shall be binding as originals upon the Parties so signing and delivering; provided, however, that original signature(s) shall be required for documents to be recorded.
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SIGNATURE PAGE
TO
REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS, CONDITIONS AND RESTRICTIONS
RESTRICTING USE OF PROPERTY FOR AFFORDABLE HOUSING
([INSERT])
IN WITNESS WHEREOF, the Owner and the City have caused this Regulatory Agreement to be signed, acknowledged and attested on their behalf by their duly authorized representatives, as set forth below:
Date:
CITY:
CITY OF SAN BERNARDINO, a municipal
corporation
By:
Eric Levitt, City Manager
ATTEST:
Telicia Lopez, City Clerk
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
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Date: BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public
benefit corporation,
its managing member
By:
____________________________
Lori Allgood, Chief Operating
Officer
By: Kingdom Development, Inc.,
a California nonprofit public
benefit corporation,
its member
By:
___________________________
William Leach, President
[SIGNATURES OF PRINCIPALS MUST BE
NOTARY ACKNOWLEDGED FOR RECORDING]
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ACKNOWLEDGEMENTS
State of California
County of ________________
On ______________________ before me,
________________________________, notary public, personally appeared ________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing Section is true and correct.
WITNESS my hand and official seal.
Signature ____________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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ACKNOWLEDGEMENTS
State of California
County of ________________
On ______________________ before me,
________________________________, notary public, personally appeared ________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing Section is true and correct.
WITNESS my hand and official seal.
Signature ____________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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EXHIBIT “A”
TO
REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS, CONDITIONS AND RESTRICTIONS
RESTRICTING USE OF PROPERTY FOR AFFORDABLE HOUSING
([INSERT])
Legal Description
Real Property in the City of San Bernardino, County of San Bernardino, State of California, described as follows:
[INSERT]
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EXHIBIT “B”
TO
REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS, CONDITIONS AND RESTRICTIONS
RESTRICTING USE OF PROPERTY FOR AFFORDABLE HOUSING
([E STREET VETERAN APARTMENTS])
Income Certification Form
[Attached behind this cover page]
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EXHIBIT “C”
TO
REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS, CONDITIONS AND RESTRICTIONS
RESTRICTING USE OF PROPERTY FOR AFFORDABLE HOUSING
([E STREET VETERAN APARTMENTS])
Form of Annual Report
[Attached behind this cover page]
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ACKNOWLEDGEMENTS
State of California
County of ________________
On ______________________ before me,
________________________________, notary public, personally appeared ________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing Section is true and correct.
WITNESS my hand and official seal.
Signature ____________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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ATTACHMENT NO. 6
FORM OF NOTICE OF AFFORDABILITY RESTRICTIONS
RECORDING REQUESTED BY AND
AFTER RECORDATION, MAIL TO:
City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Attn: City Clerk
Exempt from recording fees pursuant
to Government Code Section 27383
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
Important notice to owners, purchasers, tenants, lenders, brokers, escrow and title companies, and other persons, regarding affordable housing restrictions on the real property described in this Notice: The following development has received funding from the City of San Bernardino (“City”) in its capacity as the successor agency to the former Redevelopment Agency of the City of San Bernardino to support the development of affordable housing. A Regulatory Agreement has been recorded against the Property described below as Instrument No. ________________ on ____________________, , Official Records of the County of San Bernardino, State of California, which restrict the price and terms at which certain Affordable Units may be rented. These restrictions may limit the rents of the Affordable Units to an amount which is less than the fair market value of the Units. These restrictions also limit the income of persons and households who are permitted to rent the Units.
Title of Document Containing Affordable Housing Restrictions:
Regulatory Agreement and Declaration of Restrictive Covenants, Conditions and Restrictions Restricting Use of Property for Affordable Housing (referred to in this Notice as the “Affordable Housing Restrictions”).
Parties to Affordable Housing Restrictions:
City of San Bernardino (“City”), and
[INSERT], a [INSERT]
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Term:
The Affordable Housing Restrictions will expire not less than the date fifty-five (55) years following the date of recordation as stated above.
Description of Project: [INSERT]
[INSERT]
Thirty (30) total units—fifteen (15), including twelve (12) one- bedroom units and three (3) two-bedroom units restricted as affordable units by the City of San Bernardino
Parcel Number(s): [INSERT]
Legal Description
Attached hereto as Exhibit A.
Summary of Affordable Housing Restrictions:
The Project consists of thirty (30) rental units, fifteen (15) of which shall be rented to households with a gross income that does not exceed thirty percent (30%) of Area Median Income (the “LMIHAF Units”) at an Affordable Rent as set forth in the Affordable Housing Restrictions.
“Area Median Income” means the then current area median income for San Bernardino County, as determined by and published by the United States Department of Housing and Urban Development (“HUD”) as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen months, then the City shall provide Owner with other income determinations which are reasonably similar with respect to method of calculation to those previously published by HCD or HUD.
This Notice does not contain a full description of the details of all of the terms and conditions of the Affordable Housing Restrictions. You will need to obtain and read the Affordable Housing Restrictions to fully understand the restrictions and requirements which apply to the Property. In the event of any conflict between the terms of this Notice and the terms of the Affordable Housing Restrictions, the terms of the Affordable Housing Restrictions shall control.
This Notice is being recorded and filed in compliance with Health and Safety Code Section 33334.3(f) (3) and (4) and shall be indexed against the City and the current owner of the Property.
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Property Owner:
[INSERT], a [INSERT]
By:
Name: [INSERT]
Title: [INSERT]
City:
CITY OF SAN BERNARDINO, a municipal
corporation
By:
Eric Levitt, City Manager
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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:
[INSERT]
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of _________________________ )
On ________________________ before me, Notary Public (insert name and title of the officer) personally appeared _________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
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RESOLUTION NO. 2025-048 – PC
1 RESOLUTION NO. 2025-048 – PC
A RESOLUTION OF THE PLANNING COMMISSION OF
THE CITY OF SAN BERNARDINO, CALIFORNIA,
APPROVING CONDITIONAL USE PERMIT 25-04
ALLOWING THE DEVELOPMENT, ESTABLISHMENT, AND
OPERATION OF A COMMUNITY SUPPORT RESIDENTIAL
FACILITY (VETERAN’S HOUSING) COMPRISED OF
THIRTY (30) RESIDENTIAL UNITS FOR LOW -INCOME
MILITARY VETERANS ON A PARCEL CONTAINING
APPROXIMATELY 0.76 ACRES, LOCATED ON THE EAST
SIDE OF NORTH E STREET; APPROXIMATELY 341
LINEAR FEET NORTH OF WEST 13 TH STREET; AND
FINDING THE PROJECT SUBJECT TO A CATEGORICAL
EXEMPTION UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT.
WHEREAS, on July 30, 2025, Pursuant to the requirements of Chapter 19.36 (Conditional Use Permits), Section 19.06.020(2)(Y) (Commercial Zones Specific Standards – Social Service Uses/Centers) of the City of San Bernardino Development Code, an application for Conditional Use Permit 25-04, was duly submitted by:
Applicant: U.S. VETS – E Street LLC
800 West Sixth Street, Suite 1505
Los Angeles, CA 90017
Property Owner: U.S. VETS – E Street LLC
800 West Sixth Street, Suite 1505
Los Angeles, CA 90017
Parcel Address: 1351 North E Street
APN: 0145-211-55
Lot Area: 0.76 acres
WHEREAS, Conditional Use Permit 25-04 is a request to allow the development, establishment, and operation of a community service residential facility (Veteran’s Housing) comprised of thirty (30) residential units for low -income military veterans on a parcel containing approximately 0.76 acres; and
WHEREAS, the Planning Division of the Community Development and Housing Department has reviewed Conditional Use Permit 25-04 for consistency with the City of San Bernardino General Plan, and compliance with the City of San Bernardino Development Code; and
WHEREAS, pursuant to the requirements of the California Environmental Quality Act (“CEQA”), the Planning Division of the Community Development and Housing Department has evaluated Conditional Use Permit 25-04 and determined that it is exempt from CEQA pursuant to
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2 Categorical Exemption (listed in CEQA Guidelines Article 19, commencing with Section 15300) and the application of that Categorical Exemption is not barred by one of the exemptions set forth in CEQA Guidelines Section 15300.2; and
WHEREAS, on October 1 , 202 5, pursuant to the requirements of Section 19.52.020 (Hearings and Appeals – Application Processing) of the City of San Bernardino Development Code, the City gave public notice by advertising in the San Bernardino Sun, a newspaper of general circulation within the City of San Bernardino, and by mailing notices to the property owners within 1,000 feet of the subject property of the holding of a public hearing at which Conditional Use Permit 25-04; and
WHEREAS, on October 13, 202 5, pursuant to the requirements of Section 19. 52.040 (Hearings and Appeals – Hearing Procedures) of the City of San Bernardino Development Code, the Planning Commission held the duly-noticed public hearing at which interested persons had an opportunity to testify in support of, or opposition to Conditional Use Permit 25-04 and at which meeting the Planning Commission considered Conditional Use Permit 25-04; and
WHEREAS, pursuant to the requirements of Chapter 19.36 of the City of San Bernardino Development Code, the Planning Commission has the authority to take action on Conditional Use Permit 25-04.
NOW THEREFORE, the Planning Commission of the City of San Bernardino does hereby resolve, determine, find, and order as follows:
SECTION 1. ENVIRONMENTAL DETERMINATION:
As the decision -making body for the project, the Planning Commission has reviewed and considered the information contained in the administrative record for Conditional Use Permit 25-
04. Based upon the facts and information contained in the administrative record, including all written and oral evidence presented to the Planning Commission, the Planning Commission finds, as follows:
(1) The administrative record has been completed in compliance with CEQA, the State CEQA Guidelines, and the City’s Local CEQA Guidelines, and
(2) The proposed project is categorically exempt from the requirements of the California Environmental Quality Act pursuant to Section 15332 (In-Fill Development Projects) of the CEQA Guidelines; and
(3) The application of the categorical exemption is not barred by one of the exceptions set forth in the CEQA Guidelines Section 15300.2; and
(4) The determination of CEQA exemption reflects the independent judgment of the Planning Commission.
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RESOLUTION NO. 2025-048 – PC
3 SECTION 2. FINDINGS FOR CONDITIONAL USE PERMIT 25-04:
Section 19.36.050 (Findings) of the City of San Bernardino Development Code requires that Conditional Use Permit applications meet certain findings prior to their approval by the Planning Commission. Accordingly, the following findings are provided in support of the recommendation by the Planning Commission for the approval of Conditional Use Permit 25-04:
Finding No. 1: The proposed use is conditionally permitted within and would not impair the integrity and character of the subject land use district and complies with all of the applicable provisions of the Development Code.
Finding of Fact: The proposed community support housing facility is a conditionally permitted use, pursuant to Development Code Section 19.06.020(2)(Y), the project site is located within the Commercial General (CG -1) zone and Transit Overlay District (TOD), and the site is substantially surrounded by existing residential and commercial uses. The proposed development will be developed in compliance with all applicable provisions of the City of San Bernardino Development Code, including development standards and applicable design guidelines. Further more, the development of the subject property will enhance the appearance of a blighted and
undeveloped/underutilized vacant site. Therefore, the project would not impair the integrity and character of the subject land use district or be detrimental to surrounding properties.
Finding No. 2: The proposed use is consistent with the General Plan.
Finding of Fact: 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 Housing Policy 3.2.1: Protect the quality of the existing housing stock through the rehabilitation and improvement of market rate neighborhoods and affordable housing projects.
General Plan Housing Policy 3.3.3: Support innovative public, private, and not-for-profit efforts for the development and financing of affordable housing.
General Plan Housing Policy 3.5.4: Encourage and facilitate the construction, maintenance, and preservation of a variety of housing types adequate to meet a range of household needs.
General Plan Housing Policy 3.6.1 states: Promote infill rehabilitation and new construction projects through increasing housing potential in already developed areas of the community.
General Plan Community Design Element Goal 5.6 Ensure that multi-family housing is attractively designed and scaled to
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4 contribute to the neighborhood and provide visual interest through varied architectural detailing.
The proposed project is permitted within the Commercial General (CG -1) zone and Transit Overlay District (TOD) subject to the approval of a Conditional Use Permit with the appropriate Conditions of Approval and CEQA determination. The proposed project will provide an attractive housing opportunity that will bring a traditional design with modern architecture. The proposed development, establishment and operation of a community service housing facility will provide additional housing opportunities that will promote the City’s collaboration with entities that aim at improving the housing stock and align with the State of California Housing requirements.
The existing vacant site is immersed within an existing neighborhood that has a combination of various residential types and commercial uses , thus preserving the integrity of the existing neighborhood. Additionally, by adding thirty (30) units of affordable housing to an existing vacant site, the City policies are realized through the support of an innovative non-profit development that encourages and facilitates new construction and maintenance of affordable housing, making the project consistent with the City’s General Plan.
Finding No. 3: Approval of the Conditional Use Permit for the proposed use complies with the requirements of the CEQA and Section 19.20.030(6) of the Development Code.
Finding of Fact: In accordance with the California Environmental Quality Act, the Planning Division of the Community Development Department evaluated the proposed project and has determined that it is categorically exempt from CEQA Guidelines, pursuant to Section 15332 (In-Fill Development Projects) of the CEQA Guidelines and Conditions of Approval will be imposed to alleviate potential impacts. Therefore, the proposed project site is in compliance with the requirements of CEQA and Section 19.20.030(6) of the Development Code.
Finding No. 4: There will be no potentially significant negative impacts on environmental quality or natural resources that could not be properly mitigated and monitored.
Finding of Fact: The project site is located within an urbanized area and is generally surrounded by existing commercial and industrial development. Therefore, no significant negative impacts on the environment are anticipated to result from the proposed development.
Finding No. 5: The location, size, design, and operating characteristics of the proposed use are compatible with the existing and future land uses within the general area in which the proposed use is to be located and will not create significant
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5 noise, traffic, or other conditions or situations that may be objectionable or detrimental to other permitted uses in the vicinity or adverse to the public interest, health, safety, convenience, or welfare of the City.
Finding of Fact: The location, size, design, and operating characteristics of the proposed use are compatible with the existing and future land uses within the general area.
The proposed use will not create significant noise, traffic or other conditions or situations that may be objectionable or detrimental to other permitted uses in the vicinity or adverse to the public interest, health, safety, convenience, or welfare of the City. Access to the subject site will be from North E Street with an ingress/egress roadway onto N. Stoddard Avenue.
On-site vehicular circulation has been adequately accommodated to access the site through both N orth E Street and N. Stoddard Avenue. Emergency and trash/refuse services will be able to access and circulate through the site via N. E Street, while safely exiting through N. Stoddard Avenue.
The project is located within the Transit Overlay District (TOD) “E Street and Baseline Street Transit Station Area” (SBDC Chapter 19.19 -A, p.8), p.18). ) and adheres to specific standards to ensure a well -defined community and building design that is pede strian-friendly and supports transit use. The proposed project has been designed per Table 19 -A.01 (SBDC 19.19-A), to meet such standards as it relates to building height, build-to-line setback, and required on -site parking. The building height within the TOD-E Street Neighborhood Station Area would allow for the proposed development to have a maximum height of forty -two (42) feet with a maximum of three (3) stories and a build -to-line setback of a maximum of fifteen (15) feet. Additionally, the proposed commun ity support housing facility will be developed as an atypical multi -family residential development that would adhere to the required on -site parking standard of one (1) space per unit within the TOD. Thus, the thirty (30) residential units for low -income military veterans being proposed would comply with the standard of thirty (30) parking stalls, 6 of the parking stalls will be EV/Clean Energy designated, and three (3) of the parking stalls will be ADA. U.S. VETS has indicated residents will also have the options to use local transit, such as the SBX rapid transit bus line and transportation services offered by US VETS.
Therefore, the design of the project will ensure that the project will not create any significant noise, traffic, or other conditions that would be detrimental or objectionable to other uses in the vicinity or adverse to the public health, safety, convenience, or welfare of the City.
Finding No. 6: The subject site is physically suitable for the type and density/intensity of use being proposed.
Finding of Fact: The site is physically suitable for the type and density/intensity of the project being proposed as evidenced by project compliance with the applicable Development Code Standards. The proposed building meets all
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6 lot coverage, setback and height requirements. The size of the project site is adequate to accommodate the proposed improvements, in compliance with the requirements of the Development Code.
Finding No. 7: There are adequate provisions for public access, water, sanitation, and public utilities and services to ensure that the proposed use would not be detrimental to public health or safety.
Finding of Fact: The site has direct access from North E Street. All agencies responsible for reviewing access and providing water, sanitation and other public services to the site have had the opportunity to review the proposal, and none indicated inability to serve the project site. Establishment of the proposed community service housing facility, subject to Conditions of Approval, will not be detrimental to public services or public health and safety.
SECTION 3. CONDITIONS OF APPROV AL:
The approval of Conditional Use Permit 25-04 shall be subject to the following Conditions of Approval:
1. This approval is to allow the development, establishment, and operation of a community support residential facility (Veteran’s Housing) comprised of thirty (30) residential units for low-income military veterans on a parcel containing approximately 0.76 acres, located at 1351 North E Street (APN: 0145-211-55).
2. The project site shall be developed and maintained in accordance with: (i) the plans stamped October 13, 2025 (EXHIBIT “A”), approved by the City, which includes a site plan, floor plan, exterior-elevations plan, and conceptual-landscaping plan on file with the Planning Division; (ii) the Conditions of Approval contained herein; and (iii) the City’s Municipal Cod e regulations.
3. Within two (2) years of the approval of this permit, the commencement of construction shall have occurred, or the permit/approval shall become null and void. In addition, if at any time after the commencement of construction, work is discontinued for a period of one (1) year, then the permit/approval shall become null and void. However, approval of the Subdivision and Conditional Use Permit does not authorize the commencement of construction. All necessary permits must be obtained prior to the commencement of specified construction activities included in the Conditions of Approval.
EXPIRATION DATE: OCTOBER 13, 2027
4. The review authority may grant a time extension, for good cause, not to exceed twelve (12) months. The applicant must file an application, the processing fees, and all required submittal items thirty (30) days prior to the expiration date. The review autho rity shall ensure that the project complies with all Development Code provisions in effect at the time of the requested extension.
5. In the event this approval is legally challenged, the City will promptly notify the applicant of any claim, action, or proceeding and will fully cooperate in the defense of this matter. Once
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7 notified, the applicant agrees to defend, indemnify, and hold harmless the City of San Bernardino (“City”), any departments, agencies, divisions, boards, and/or commissions of the City, and any predecessors, successors, assigns, agents, directors, elected officials, officers, employees, representatives, and attorneys of the City from any claim, action, or proceeding against any of the foregoing persons or entities. The applicant further agrees to reimburse the City for any costs or attorneys’ fees, which th e City may be required by a court to pay as a result of such action, but such participation shall not relieve applicant of his or her obligation under this condition. The costs, salaries, and expenses of the City Attorney and employees of his office shall be considered “attorneys’ fees” for purposes of this condition. As part of the consideration for issuing this Conditional Use Permit, this condition shall remain in effect if the Conditional Use Permit is rescinded or revoked, whether or not at the request of applicant.
Planning Division
6. The applicant, facility operator, and/or property owner shall submit Operational, Management and Security Plans for the project ( community support housing facility ) to the Planning Division for review and approval prior to the applying for of any grading or building permits.
Only the activities in the approved Operational, Management and Security Plans shall be permitted on the site unless a modification to the Conditional Use Permit is obtained, otherwise the facility and the operator would be in violation of this Conditional Use Permit . All applicable conditions of approval shall be addressed in the Operational, Management and Security Plans.
7. Hours of operation for the on-site service office shall be restricted to between the hours of 8:00 a.m. to 5:00 p.m., seven (7) days a week.
8. This approval shall not permit drop-in “shelter style” or “itinerant style” overnight stay. This approval is for long term housing.
9. The proposed facility will be a permanent housing program designed for veteran households with incomes below sixty-one (61) percent of the Area Median Income (AMI) for the County of San Bernardino. As part of the program, veterans shall have access to a range of services including case management, crisis intervention, career development, job training, emergency food and clothing, life skills workshops, help accessing mainstream benefits, legal assistance, child support resolution, financi al management support, peer mentoring, and coordination of medical and mental health care—including substance abuse treatment and counseling.
10. The prospective tenants shall be screened so that the prospective residents are able to sustain themselves through employment and ability to maintain their financial responsibilities.
11. Public distribution of food, clothing or any other items shall not be permitted.
12. The applicant, facility operator, and/or property owner shall provide for 24-hour security personnel to monitor the property, seven (7) days a week. The facility shall include a security camera monitoring system.
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8 13. The applicant, facility operator, and/or property owner shall coordinate with the San Bernardino Police Department, if required by the Police Chief or the Community Development Director, during project design, operations, or prior to issuance of the business license.
14. If the United States Veterans Initiative (U.S. VETS) , or any future owners , determine they would like to sell the property, they shall notify the City in writing at least 30 days prior to opening escrow. Prior to close of the escrow, the City shall review and approve the new owner.
The new owner shall comply with all reasonable requests from the City. The City shall not unreasonably withhold the sale of the property.
15. If the United States Veterans Initiative (U.S. VETS), or any future operators, determine they would like to have a new operator for the facility, they shall notify the City in writing at least 30 days prior to transferring the operations to a new operator . Prior to new operator taking control of the facility, the City shall review and approve the new operator. The new operator shall comply with all reasonable requests from the City. The City shall not unreasonably withhold the transfer of the facility to a new operator.
16. A six (6) foot high decorative masonry block wall with a twenty -four (24) foot gate shall be maintained along the north property line with a six (6) foot high decorative masonry block wall along the east and south property lines. Prior to issuance of building permits plans shall be submitted to the Planning Division for review and approval to ensure compliance.
17. Construction-related activities may not occur between the hours of 8:00 pm and 7:00 am. No construction vehicles, equipment, or employees may be delivered to, or arrive at, the construction site before 7:00 am or leave the site after 8:00 pm.
18. If the colors of the buildings or other exterior finish materials are to be modified beyond the current proposal and improvement requirements, the revised color scheme and/or finish materials shall be reviewed and approved by the Planning Division prior to the commencement of work.
19. Prior to issuance of any permits, the project landscape plans prepared by a licensed landscape architect shall be submitted to the Planning Division ’s review and approval in substantial compliance with the Conceptual Landscape plan and prepared in accordance with the Development Code, section 19.28.120 (Water Efficient Landscaping Standards).
20. Minor modifications to the plans shall be subject to approval by the Director through the Minor Modification Permit process. Any modification that exceeds 10% of the allowable measurable design/site considerations shall require the re-filing of the original application.
21. The access easement/agreement between the properties at 1359/1361 N. E Street, and the subject property owner shall be preserved.
22. The facility operator and property owner shall be responsible for regular maintenance of the project site. The site , including landscaping and the buildings, shall be maintained in a clean condition and free of litter or any other undesirable material(s). Landscaping shall be maintained to ensure healthy growth, a weed and disease-free condition with dead or missing vegetation removed and promptly replaced, maintain the number of plants on the approv ed
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9 plans, and irrigation in proper working condition. Vandalism, graffiti, trash, and other debris shall be removed and cleaned up within twenty-four (24) hours of being reported. The building shall be painted periodically, as needed, to keep the exterior of the building in acceptable condition, as determined by the Director.
23. Signs are not approved as part of this permit. Prior to establishing any new signs, or to replacing existing signs, the applicant shall submit an application and receive approval for a Sign Permit from the Planning Division. Banners, flags, pennants, and similar signs are prohibited unless a Temporary Sign Permit is obtained.
24. All exterior lighting shall be contained within property lines and be energy efficient, with the option to lower or reduce usage when the facility is closed. Prior to issuance of any permits, plans shall be submitted to ensure compliance.
25. Submittal requirements for permit applications (site improvements, landscaping, etc.) to Building Plan Check and/or Land Development must include all Conditions of Approval issued with this approval, printed on the plan sheets.
26. All new construction shall require permits prior to commencement.
27. All Conditions of Approval shall be completed prior to final inspection and sign-off.
28. No Final Certificate of Occupancy will be issued until all Conditions of Approval have been completed.
29. The project shall comply with all applicable requirements of the City of San Bernardino Community Development Department, Land Development and Building and Safety Divisions, Fire Department, Police Department, Municipal Water Department, Public Works Department, and the City Clerk’s Office/Business Registration Division.
Public Works Department
30. Drainage and Flood Control
a. A local drainage study will be required for the project. Any drainage improvements, structures or storm drains needed to mitigate downstream impacts or protect the development shall be designed and constructed at the developer's expense, and right -of- way dedicated as necessary.
b. The detention basin shall be designed in accordance with “Detention Basin Design Criteria for San Bernardino County.” Retention basins are not acceptable. c. The development is located within Zone X of the Federal Insurance Rate Maps on booklet #06071C8681J with year 09/02/2016.
d. All drainage from the development shall be directed to an approved public drainage facility. If not feasible, proper drainage facilities and easements shall be provided to the satisfaction of the City Engineer.
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10 e. If site drainage is to be outlet into the public street, the drainage shall be conveyed through a parkway culvert constructed in accordance with City Standard No. 400. Conveyance of site drainage over the Driveway approaches will not be permitted. f. A Preliminary WQMP was submitted, and the proposed underground chamber system was conceptually approved. The system shall include but not limited to pretreatment mechanism and emergency overflow outlet in the final design. g. A Full-Categorical Water Quality Management Plan (WQMP) is required for this project.
The applicant is directed to the County of San Bernardino’s Flood Control web page for the template and Technical Guidance Document. The Land Development Division, prior to issuance of any permit, shall approve the WQMP. A CD copy of the approved WQMP is required prior to grading permit issuance.
h. The Land Development Division, prior to grading plan approval, shall approve an Erosion Control Plan. The plan shall be designed to control erosion due to water and wind, including blowing dust, during all phases of construction, including graded areas which are not proposed to be immediately built upon.
31. Grading and Landscaping
a. The grading and on-site improvement plan shall be signed by a Registered Civil Engineer and a grading permit will be required. The grading plan shall be prepared in strict accordance with the City's "Grading Policies and Procedures" and the City's "Standar d Drawings", unless otherwise approved by the Building Official. b. If the grading plan indicates export or import, the source of the import material or the site for the deposition of the export shall be noted on the grading plan. Permit numbers shall be noted if the source or destination is in the City of San Bernardino. c. If more than 50 cubic yards of earth is to be hauled on City Streets then a special hauling permit shall be obtained from the City Engineer. Additional conditions, such as truck route approval, traffic controls, bonding, covering of loads, street cleaning, etc. may be required by the City Engineer.
d. Wheel stops are not permitted by the Development Code, except at designated accessible parking spaces. Therefore, continuous 6” high curb shall be used around planter areas and areas where head in parking is adjacent to walkways. The parking spaces may b e 16.5’ deep and may overhang the landscaping or walkway by 2.5’. Overhang into the setback area or into an ADA path of travel (minimum 4’ wide) is not permitted. e. Continuous concrete curbing at least 6 inches high and 6 inches wide shall be provided at least 3 feet from any wall, fence, property line, walkway, or structure where parking and/or drive aisles are located adjacent thereto. Curbing may be left out at structure access points.
The space between the curb and wall, fence, property line, walkway or structure shall be landscaped, except as allowed by the Development Review Committee.
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11 f. The refuse enclosure(s) shall be constructed in accordance with City Standard Drawing No. 508 with modification to provide ADA access. The minimum size of the refuse enclosure shall be 8 feet x 15 feet for bins storage area. Where a refuse enclosure is proposed to be constructed adjacent to spaces for parking passenger vehicles, a 3’ wide by 6” high concrete planter shall be provided to separate the enclosure from the adjacent parking. The placement of the enclosure and design of the planter shall preclu de the enclosure doors from opening into drive aisles or impacting against adjacent parked cars. g. Retaining walls, block walls and all on -site fencing shall be designed and detailed on the on-site improvement Plan. This work shall be part of the on -site improvement permit issued by the Building Official. All masonry walls shall be constructed of decorative block with architectural features acceptable to the City Planner. h. No construction on a site shall begin before a temporary/security fence is in place and approved by the Building Official or his designee. Temporary/security fencing may not be removed until approved by the Building Official or his designee. The owner or owner’s agent shall immediately remove the temporary/security fencing upon the approval of the Building Official or his designee. Sites that contain multiple buildings shall maintain the temporary/security fencing around the portion of the site and buildings under construction as determined by the Building Official or his designee. All temporary/security fencing for construction sites shall include screening, emergency identification and safety identification and shall be kept in neat and undamaged condition. i. The on -site improvement plan shall include details of on -site lighting, including light location, type of poles and fixtures, foundation design with structural calculations, conduit location, material and size, and Photometric plot shall be provided which show that the proposed on-site lighting design will provide:
▪ 1 foot-candle of illumination uniformly distributed over the surface of the parking lot during hours of operation, and
▪ 0.25 foot-candles security lighting during all other hours. j. The design of on -site improvements shall also comply with all requirements of The California Building Code, Title 24, relating to accessible parking and accessibility, including retrofitting of existing building access points for accessibility, if applicable. k. An accessible path of travel shall be provided from the public way to the building entrance.
All pathways shall be paved and shall provide a minimum clear width of 4 feet. Where parking overhangs the pathway, the minimum paved width shall be 6.5 feet. l. The project Landscape Plan shall be reviewed and approved by the Land Development Division prior to issuance of a grading permit. Submit 3 copies to the Land Development Division for Checking.
m. Prior to occupancy of any building, the developer shall post a bond to guarantee the maintenance and survival of project landscaping for a period of one year. n. The public right -of-way, between the property line and top of curb (also known as “parkway”) along adjoining streets shall be landscaped by the developer and maintained in perpetuity by the property owner. Details of the parkway landscaping shall be included in the project’s on-site landscape plan.
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12 o. All electrical transformers located outdoors on the site, shall be screened from view with a solid wall or landscaping and shall not be located in any setback/right -of-way area. If the transformer cannot be screened, it shall be located in an underground vault unless approved by the City Engineer pursuant to Section 19.30.110.
32. On-Site Utilities
a. Design and construct all public utilities to serve the site in accordance with City Code, City Standards and requirements of the serving utility, including gas, electric, telephone, water, sewer and cable TV (Cable TV optional for commercial, industrial, or institutional uses). b. The project site shall be provided with separate water and sewer facilities so the City or the agency providing such services in the area can serve it. c. Backflow preventers shall be installed for any building with the finished floor elevation below the rim elevation of the nearest upstream manhole. d. This project is located in the sewer service area maintained by the City of San Bernardino therefore, any necessary sewer main extension shall be designed and constructed in accordance with the City's "Sewer Policy and Procedures" and City Standard Drawings. e. Utility services shall be placed underground, and easements provided as required. f. All existing overhead utilities adjacent to or traversing the site on either side of the street shall be placed underground in accordance with Section 19.20.030 of the Development Code.
g. Existing Utilities which interfere with new construction shall be relocated at the Developer's expense as directed by the City Engineer, except overhead lines, if required by provisions of the Development Code to be undergrounded.
33. Street Improvement and Dedications
a. For the streets listed below, dedication of adequate street right -of-way (R.W.) to provide the distance from street centerline to property line and placement of the curb line (C.L.) in relation to the street centerline shall be as follows:
Street Name
Dedication shall be
Right of Way (feet)
From Centerline
Curb Widening shall be
Curb Line (feet)
From Centerline
E Street
(145-211-55)
41.25’ Existing
8.75’ Dedication
for a total ½ width of 50’
“Major Arterial”
33’ Existing
None-Proposed
(Future 36’ to 40’)
Per General Plan
Stoddard Avenue
(145-211-55)
30’ Existing
No Dedication
for a total ½ width of 20’
“Secondary Arterial”
20’ Existing
None required
Per General Plan
b. “E” Street – TI = 9.0:
i. The street is in fair condition, and no AC improvements are needed at this time. ii. All striping shall be thermoplastic paint per section 84 of the Caltrans specifications.
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13 iii. The existing curb & gutter, sidewalk, and driveway fronting the site are in good condition, if any curb & gutter panels, sidewalk panels, and driveways are lifted, cracked, or do not meet current ADA requirements, each of the panels shall be replaced per city standards.
iv. Remove existing driveways that are not being used under the project plans and replace with Curb Gutter and Sidewalk per city Standards. v. Construct Commercial Driveway Approach per City Standard No. 204, Type II, including an accessible by -pass around the top of the drive approach. Minimum Width is 26’. No Driveways closer than 100’ from BCR/ECR as directed by the City Engineer.
vi. When Replacing/Reconstructing Curb and Gutter panels, Construct 8" Curb and Gutter per City Standard No. 200, type “B”.
vii. When Replacing or reconstructing Sidewalk panels, Construct Sidewalk per City Standard No. 202; Case "A" (6’ wide adjacent to curb).
viii. Install (Ornamental) LED Street Lights System adjacent to the site in accordance with City Standard No’s. SL -1, SL -2, and SL -3. Also, a separate light plan shall be submitted in accordance with the City of San Bernardino Street Lighting Design Policies. Install ID Plate on Street light pole. Connect to Existing Street Light System. ix. Survey Monuments and ties shall be placed, replaced, tied out and recorded at any corner or alignment changes that are adjacent to the project area in accordance to California Land Surveyors Association – Monument Preservation Guidelines, Copies of Recorded Monuments/Ties shall be delivered to Public Works/Engineering.
Stoddard Avenue – TI = 5.5:
x. The first 100’ from the southerly property curb to curb shall be rehabilitated to meet the requirements detailed in a soils report based on the “R” value of the subgrade and the traffic Index. The City’s has a minimum of 2” Grind and Overlay; However the Soils Report may indicate a thicker or different improvement. xi. All striping shall be thermoplastic paint per section 84 of the Caltrans specifications. xii. Construct Commercial Driveway Approach per City Standard No. 204, Type II, including an accessible by-pass around the top of the drive approach, Minimum width 26’.
xiii. When Replacing/Reconstructing Curb and Gutter panels, Construct 8" Curb and Gutter per City Standard No. 200, type “B”.
xiv. When Replacing or reconstructing Sidewalk panels, Construct Sidewalk per City Standard No. 202; Case "A" (6’ wide adjacent to curb).
xv. No Parking will be allowed on Stoddard Avenue for the first 10’ to 20’south of the southerly property line, install signs per city standards and paint curb Red. xvi. Access to Stoddard Avenue shall be limited to site exit only. A “Do Not Enter” or “Wrong Way” sign shall be posted by the driveway at the end of Stoddard Avenue. xvii. Survey Monuments and ties shall be placed, replaced, tied out and recorded at any corner or alignment changes that are adjacent to the project area in accordance to
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14 California Land Surveyors Association – Monument Preservation Guidelines, Copies of Recorded Monuments/Ties shall be delivered to Public Works/Engineering. xviii. Non-Entry Access on Stoddard Avenue. Striping (Island) shall be placed to direct traffic out of exit area.
* These Conditions are set for an estimated construction with-in two years. If construction exceeds two years from DERC Approval these conditions shall be reviewed and updated as needed.
c. With Submittal of improvement plans including but not limited to grading plans, Street improvement plans, storm drain and retention/detention basin plans, and erosion/sediment control plans, The Applicant shall cause to be formed, or shall be annexed into an existing, Community Facilities District(s) (CFD) for landscaping, lighting, streets, drainage facilities, street sweeping, graffiti removal, or other infrastructure as required by the City to the satisfaction of the City Engineer. The Applicant shall in itiate the maintenance and benefit assessment district(s) formation, or annexation, by submitting a landowner petition and consent form (provided by the City) and deposited necessary fees concurrent with the application for street and grading plan review a nd approval; and said maintenance and benefit assessment district(s) shall be established concurrent with the approval of the final map in the case of the subdivision of land, or prior issuance of any certificate of occupancy where there is no subdivision of land, and as approved by the City Engineer. d. If a drainage report is required by Land Development, A second copy of the drainage report will be delivered to public works, if offsite or overflow storm drain systems are identified, all systems shall be identified on the street improvement plans, and public storm drain shall be on a separate set of plans.
e. A temporary construction encroachment permit from Public Works Department shall be required for utility cuts into existing streets or any work within City’s right -of-way.
Pavement restoration or trench repair shall be in conformance with City Standard No. 310.
Public facilities shall be restored or constructed back to Public Works Department satisfaction.
f. Any pavement works affecting the traffic loop detectors shall be coordinated and subjected to Public Works Traffic Division requirements.
g. The applicant must post a performance bond prior to issuance of the off -site permit. The amount of the bond is to be determined by Public Works Department. h. The above conditions shall comply with current codes, policies, and standards at time of construction.
i. Prior to Certificate of Occupancy or Completion of Project all As-builts shall be submitted to Public Works.
34. Traffic Requirements
a. All Traffic mitigation measures shall be implemented according to the recommendations of the City Traffic Engineer prior to Street Improvement plan approval. b. All roadway design, traffic signing and striping, traffic signal, street lighting, and traffic control improvements relating to the proposed project should be constructed in
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15 accordance with the applicable engineering standards and to the satisfaction of the City of San Bernardino Traffic Engineering Division.
c. In conjunction with standard City of San Bernardino development review procedure, on site traffic signing, and striping plans should be prepared in accordance with the applicable State and Federal standards.
d. The final grading, landscaping, and street improvement plans should demonstrate that sight distance standards are met in accordance with the applicable City of San Bernardino / California Department of Transportation sight distance standards. e. Delivery trucks size shall be limited to box truck classification SU-40 or smaller.
35. Required Engineering Plans
a. A complete submittal for plan checking shall consist of:
▪ street improvement plans (may include street lights or street lighting may be separate plan),
▪ sewer plans (Private sewers may be shown on on -site improvement plan; public sewers must be on a separate plan with profile),
▪ storm drain plans (Private storm drains may be shown on on-site improvement plans; public storm drains must be on a separate plan with profile), ▪ signing and striping plan (may be on sheets included in street improvement plan), ▪ lighting (on-site lighting may be included in on-site improvement plan or may be on a separate stand-alone plan),
▪ grading (may be incorporated with on-site improvement plan), ▪ on-site improvement plans and on-site landscaping and irrigation, ▪ water plans (shall be submitted to San Bernardino Municipal Water Department), ▪ All required supporting calculations, studies and reports must be included in the initial submittal (including but not limited to drainage studies, soils reports, structural calculations).
b. All off-site improvement plans submitted for plan check shall be prepared on the City’s standard 24” x 36” sheets. A signature block satisfactory to the City Engineer or his designee shall be provided.
c. After completion of plan checking, final mylar drawings, stamped and signed by the Registered Civil Engineer in charge, shall be submitted to the City Engineer and/or Building Official for approval.
d. Copies of the City’s design policies and procedures and standard drawings are available at the Public Works Counter for the cost of reproduction. They are also available at no charge at the Public Works Web Site at http://www.sanbernardino.gov.
36. Required Engineering Permits
a. Grading permit.
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16 b. On-site improvements construction permit (except buildings - see Community Development – Building & Safety Division), including landscaping. c. Off-site improvement construction permit.
37. Applicable Engineering Fees
a. All plan check, permit, inspection, and impact fees are outlined on the Public Works Fee Schedule. A deposit in the amount of 100% of the estimated checking fee for each set of plans will be required at time of application for plan check. The amount of the fee is subject to adjustment if the construction cost estimate varies more than 10% from the estimate submitted with the application for plan checking.
b. The current fee schedule is available at the Public Works Counter and at http://www.sanbernardino.gov.
38. Integrated Solid Waste Management
a. During demolition/construction developer and contractor to use services through the City of San Bernardino’s exclusive franchised hauler Burrtec Waste Industries. b. Burrtec Waste Comments: The Site Plan dated 7 /25/25 identifies a single trash enclosure located near the southeast corner of the project. No enclosure dimensions are provided, but it is noted as holding two 6 -cubic yard bins for trash and recyclables and a 65 -gallon organics cart. Access is provided by a 30-foot-wide driveway from N. E Street with a 20 - foot driveway connection to the adjacent commercial project to the north and a 20 -foot connection to Stoddard Avenue to the south.
c. The proposed trash enclosure shall be designed to accommodate at least two standard 4 - cubic yard commercial bins for trash and mixed recyclables and two 65-gallon food waste carts. Service will be provided by entering the site from North E Street and exiti ng on N.
Stoddard Avenue. The enclosure shall be turned to face west. d. Any changes to the overall project design, enclosure specifications or location, or access may adversely impact Burrtec's ability to service the project. Any design modifications that could impact Burrtec's service will be subject to review and approval by Burrtec. e. Burrtec's review of this project is limited to determining whether it meets Burrtec's minimum standards for waste and recycling collection services. Any comments or approvals by Burrtec are limited to these minimum standards as they relate to our equipment and personnel and do not pertain to the project's compliance with applicable federal, state and local land use and environmental laws, building codes or other applicable government regulations. Any approvals by Burrtec do not warrant or represent that Burrtec accepts any liability relative to the performance of waste and recycling collection services within this project.
f. Contact the Building & Safety Division to determine if any ADA accessibility modifications must be made to the refuse enclosure. Modifications made to refuse enclosures to meet ADA accessibility requirements shall not decrease the minimum clear interior dimensions needed for the container storage area.
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17 g. Refuse enclosures within five (5) feet of combustible construction shall install an automatic fire sprinkler as approved by the Building & Safety Division and the San Bernardino County Fire Department. (See City Standard Plan 508).
h. Refuse enclosure roofs shall be a minimum of eight (8) feet high interior at its lowest point, with minimal front protrusions that can be damaged during container servicing and must extend over any open side or the rear of the refuse enclosure by at least six (6) inches or as approved by the City.
i. Burrtec Waste Truck Turning Radius – All corners and intersections on streets and driveways leading to refuse enclosures shall have a turning radius adequate for a 35 -foot long, three-axle collection truck. Collection trucks require a minimum 23-foot interior curb return radius to make a minimum 28-foot turn. The minimum outside curb radius shall be at least 42 feet. All streets and driveways shall comply with applicable City standards.
Burrtec Waste’s Truck Turning Radius template may be obtained from the Public Works Department in PDF and CAD.
j. Vertical and Horizontal Clearances – The minimum vertical clearance for collection trucks along the entire route to the refuse enclosure is fifteen (15) feet. The minimum vertical clearance in front of the refuse enclosure where the truck will empty the container shall be twenty-six (26) feet. The clear height shall be free of building overhangs, trees, and utility lines. The minimum horizontal clearance along the entire route to an enclosure is 12 feet. k. Hammerhead Turnarounds shall meet or exceed San Bernardino County Fire Protection District Standard Number A -1 Diagram A -1.12: Hammerhead Turnaround Detail dated July 1, 2021. San Bernardino County Hammerhead detail may be obtained from the City Public Works Department.
l. If gated, access shall be provided by means of a key, code, or remote. m. Senate Bill 1383 Short-Lived Climate Pollutants Reduction Act may apply n. Upon completion, service is provided through the City of San Bernardino’s franchised hauler Burrtec Waste Industries, Inc. 111 E. Mill Street, San Bernardino, CA 92408 (909) 804-4222.
San Bernardino Municipal Water District
39. Rule & Regulation No. 5 application required for the new services and abandonment of the two (2) existing services. could possibly use existing sewer lateral. owner would need to camera lateral to verify usable condition.
40. Sewer capacity, connection, and inspection fees are due prior to the issuance of a city building permit.
41. If street improvement plans are prepared for the project, a copy must be routed to the water dept. in advance for review simultaneously with the review by public works.
San Bernardino Municipal Water District - Environmental Control Section
42. SBMWD Environmental Control plan check review is required.
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RESOLUTION NO. 2025-048 – PC
18 43. Applicant is required to contact SBMWD Environmental Control to discuss and review plan check and pretreatment requirements.
44. Applicant shall submit the appropriate permit application, project plans, additional documents, information, and revisions, as required for review and approval by Environmental Control.
45. All SBMWD Environmental Control plan check requirements must be completed prior to issuance of Building Department permits.
San Bernardino County Consolidated Fire District
46. Shall comply with all current Building, Fire Codes and Fire Department Standards requirements based on occupancy classification.
47. Any changes to this proposal shall require new Fire Department condition letter.
48. Interior/exterior Fire Department access roadways/fire lanes shall be per Fire Department Standard. If gates installed, must comply with Fire Department Standards.
49. Paved access from 2 points is required to be 30 feet in width 3 or more stories in height or over 300,000 square feet.
50. Paved access from 2 points shall be required for completion and occupancy.
51. Monitored fire sprinkler systems are required for the proposed building(s). Plans shall be submitted to FD prior to construction.
52. Any changes to the approved life safety system shall require plans to be submitted to the FD prior to construction including the following: Fire Sprinklers, Fire Alarms, Underground water supply for fire protection, Cooking appliances and Hood protections.
53. Knox Box/Key Box is required and shall be provided an installed in accordance with CFC and Fire Department Standard.
54. Required fire flow for this project shall meet the minimum requirements established in the California Fire Code.
55. An approved on -site fire protection water system, in accordance with Fire Department Standard is required. The system is required to be in place and serviceable prior to building construction.
56. An approved water supply system, complete with street fire hydrants complying with Fire Department Standard, shall be in place prior to any combustible construction.
57. Provide a complete on -site fire protection plan to the FD which indicates the location of all required fire protection appliances (FDC’s, PIV’s, DDC’s, proposed and existing fire hydrants, etc.).
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19 58. Fencing, walls or carports shall not obstruct Fire Department access to fire hydrants and property.
59. Blue reflective pavement markers indicating fire hydrant locations shall be installed as specified by the Fire Department. In areas where snow removal occurs or non -paved roads exist, the blue reflective hydrant marker shall be posted on an approved post along the side of the road, no more than three (3) feet from the hydrant and at least six (6) feet high above the adjacent road.
60. Hand portable fire extinguishers are required. The location, type, and cabinet design shall be approved by the Fire Department.
61. The applicant shall submit a fire lane plan to the Fire Department for review and approval. Fire lane curbs shall be painted red. The "No Parking, Fire Lane" signs shall be installed on public/private roads in accordance with the approved plan.
62. A separate permit is required by the Fire Department for installation of on-site water systems.
No work may begin until the permit has been obtained. A permit application may be obtained from Fire Prevention.
63. Commercial and industrial developments of 100,000 sq. ft or less shall have the street address installed on the building with numbers that are a minimum six (6) inches in height and with a three quarter (3/4) inch stroke. The street address shall be visibl e from the street. During the hours of darkness, the numbers shall be electrically illuminated (internal or external). Where the building is two hundred (200) feet or more from the roadway, additional non-illuminated contrasting six (6) inch numbers shall be displayed at the property access entrances.
64. Construction permits, including Fire Condition Letters, shall automatically expire and become invalid unless the work authorized by such permit is commenced within 180 days after its issuance, or if the work authorized by such permit is suspended or abando ned for a period of 180 days after the time the work is commenced. Suspension or abandonment shall mean that no inspection by the Department has occurred with 180 days of any previous inspection. After a construction permit or Fire Condition Letter becomes invalid and before such previously approved work recommences, a new permit shall be first obtained and the fee to recommence work shall be one -half the fee for the new permit for such work, provided no changes have been made or will be made in the original construction documents for such work, and provided further that such suspension or abandonment has not exceeded one year. A request to extend the Fire Condition Letter or Permit may be made in writing PRIOR TO the expiration date justifying the reason that the Fire Condition Letter should be extended.
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RESOLUTION NO. 2025-048 – PC
20 SECTION 4. PLANNING COMMISSION ACTION:
The Planning Commission hereby takes the following action:
1. Adoption of Planning Commission Resolution No. 2025-048 – PC:
a. Finding the Categorical Exemption, pursuant to Section 15332 (In-Fill Development Projects) of the CEQA Guidelines for Conditional Use Permit 25-04 in accordance with the California Environmental Quality Act, and directing the Planning Commission Secretary to prepare and file with the Clerk of the County of San Bernardino a Notice of Exemption as provided under Public Resources Code Section 21152(b) and CEQA Guidelines Section 15062; and
b. Approving Conditional Use Permit 25-04 based on the Findings of Fact and subject to the recommended Conditions of Approval.
SECTION 5. 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 6. CUSTODIAN OF RECORDS.
The location and custodian of the documents and any other material, which constitute the record of proceedings upon which the Planning Commission based its decision, is as follows: Telicia Lopez, Acting City Clerk, 201 North E Street (Building A), (909) 998-2680.
PASSED, APPROVED, AND ADOPTED this 13th day of October, 2025.
____________________________________
Lisa Sherrick, Chairperson
San Bernardino Planning Commission
ATTEST:
Gabriel Elliott, Planning Commission Secretary
City of San Bernardino, California
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21 CERTIFICATION:
I, Gabriella Sosa, Recording Secretary of the Planning Commission of the City of San Bernardino, California, do hereby certify that the foregoing Resolution No. 202 5-048 – PC, was duly adopted by the Planning Commission of the City of San Bernardino, California, at a regular meeting thereof held on the 13th day of October 2025, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
____________________________________
Gabriella Sosa, Recording Secretary
City of San Bernardino, California
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RESOLUTION NO. 2025-048 – PC
22 EXHIBIT “A”
APPROVED PLANS
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INSERT COUNTY RECORDER FORM
SUBORDINATION AGREEMENT
(City/County – E Street USVETS)
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN AND RESTRICTIVE COVENANTS AFFECTING THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT AND RESTRICTIVE COVENANTS.
THIS SUBORDINATION AGREEMENT (the "Agreement") is made as of November 18, 2025, by E Street Veterans Apartments, LP, a California limited partnership ("Borrower"), the San Bernardino County, a political subdivision of the State of California (the "County"), City of San Bernardino, a California charter city and municipal corporation (the "City").
RECITALS
A. Borrower intends to construct a twenty-nine (29) unit housing development, not including one (1) manager's unit (the "Improvements"), on certain real property located at 1351 North E Street, City of San Bernardino, San Bernardino County, State of California as more particularly described in Exhibit A (the "Property"). The Improvements and the Property are collectively referred to as the "Development."
B. Borrower and the County entered into that certain Loan Agreement (the "County Loan Agreement") dated November 18, 2025, pursuant to which the County agreed to provide a loan to Borrower in the amount of Five Million Dollars ($5,000,000) (the "County Loan"). The County Loan is to be used to partially finance Borrower's Development. The County Loan is evidenced by a Promissory Note in the amount of the County Loan (the "County Note") dated as of November 18, 2025, and secured by a Deed of Trust with Assignment of Rents, Security Agreement, and Fixture Filing dated as of November 18, 2025, naming Borrower as trustor, the County as beneficiary, and Commonwealth Land Title Company as trustee (the "County Deed of Trust") recorded concurrently herewith. In connection with the County Loan, the County and
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Borrower also executed a Regulatory Agreement and Declaration of Restrictive Covenants, dated as of November 18, 2025 (the "County Regulatory Agreement") recorded concurrently herewith.
C. Borrower and the City entered into that certain Permanent Local Housing Allocation Loan Agreement (the "City PLHA Loan Agreement") dated as of November__, 2025, pursuant to which the City agreed to provide a loan to Borrower in the amount of One Million Nine Hundred Eighty-Five Thousand Four Hundred One Dollars and Zero Cents ($1,985,401) (the "City PLHA Loan"). The City PLHA Loan will be used to partially finance Borrower's Development. The City PLHA Loan is evidenced by a Promissory Note in the amount of the City PLHA Loan (the "City PLHA Note") dated as of November __, 2025, and secured by a Deed of Trust with Assignment of Rents, Security Agreement, and Fixture Filing dated as of November __, 2025, naming Borrower as trustor, the City as beneficiary, and Commonwealth Land Title Company as trustee (the "City PLHA Deed of Trust"), recorded concurrently herewith. In connection with the City PLHA Loan, the City and Borrower also executed the Regulatory Agreement, dated as of November __, 2025, and recorded concurrently herewith.
Collectively, the City PLHA Loan Agreement, the City PLHA Note, the City PLHA Deed of Trust, the City PLHA Loan Agreement shall be referred to herein, collectively, as the "City PLHA Loan Documents.”
D. Borrower, the City, and the County desire to enter into this agreement to subordinate the rights of the City under the City Deed of Trust, City PLHA Deed of Trust, and City PLHA Regulatory Agreement to the County Regulatory Agreement and the County agrees to subordinate the rights of the County under the County Deed of Trust to the City PLHA Regulatory Agreement.
E. Borrower, City, and the County hereby acknowledge under this Agreement that the order of priority of the County Loan Documents and City PLHA Loan Documents shall be as follows.
1. County Regulatory Agreement
2. City PLHA Regulatory Agreement
3. County Deed of Trust
4. City PLHA Deed of Trust
NOW THEREFORE, for valuable consideration the parties agree as follows:
1. Borrower and the City each acknowledge and agree for the benefit of the County that the County Regulatory Agreement, and any modifications, renewals, or extensions thereof approved in writing by the City, shall unconditionally be and at all times remain a lien or charge on the Property prior and superior to the rights of the City under the City PLHA Deed of Trust and City PLHA Regulatory Agreement. The City intentionally and unconditionally subordinates all of the City's right, title and interest in and to the City PLHA Deed of Trust, City PLHA Regulatory Agreement to the lien or charge of the County Regulatory Agreement.
2. Borrower and the County each acknowledge and agree for the benefit of the City that City Regulatory Agreement, and any modifications, renewals, or extensions thereof
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approved in writing by the County, shall unconditionally be and at all times remain a lien or charge on the Property prior and superior to the rights of the County under the County Loan Documents, except the County Regulatory Agreement. The County intentionally and unconditionally subordinates all of the County's right, title and interest in and to the County Loan Documents, except the County Regulatory Agreement, to the lien or charge of the City PLHA Regulatory Agreement.
3. The County agrees that, upon the occurrence of an event of default under the County Loan Documents, the County shall:
(a) concurrently with notifying Borrower of the occurrence of an event of default, notify the City of the occurrence of such event of default by delivering a notice to the City at its address set forth in the City PLHA Loan Agreement; (b) permit the City to cure or correct (provided that such event of default is curable) any such event of default within ninety (90) calendar days after receipt of such notice; (c) accept all payments and all acts done by the City on behalf of Borrower within the cure period specified in subparagraph 4(b), above, as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes; and (d) have the continuing right to record a notice of default, obtain a court appointed receiver and otherwise exercise the County's rights and remedies under the County Loan Documents during the above-mentioned cure period.
4. The City agrees that, upon the occurrence of an event of default under the City PLHA Loan Documents, the City shall:
(a) concurrently with notifying Borrower of the occurrence of an event of default, notify the County of the occurrence of such event of default by delivering a notice to the County, at its address set forth in the County Loan Agreement; (b) permit the County to cure or correct (provided that such event of default is curable) any such event of default within ninety (90) calendar days after receipt of such notice; (c) accept all payments and all acts done by the County on behalf of Borrower within the cure period specified in subparagraph 5(b), above, as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes; and (d) have the continuing right to record a notice of default, obtain a court appointed receiver and otherwise exercise the City's rights and remedies under the City PLHA Loan Documents during the above-mentioned cure period.
5. The parties hereto agree to cooperate with each other and perform any acts and execute, acknowledge and deliver any additional agreements, documents, or instruments that
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may be reasonably necessary or desirable to carry out the provisions or to effectuate the purpose of this Agreement.
6. If, subject to the terms of Section 5 above, prior to any foreclosure sale of the Development under the County Deed of Trust, the County takes title to or possession of the Development pursuant to a foreclosure sale of the Development under the County Deed of Trust and cures the outstanding defaults under the City PLHA Loan, if any, the City hereby agrees not to exercise any rights it may have to accelerate the City PLHA Loan by reason of the transfer of title or possession to the County, or if acceleration has already occurred, the City hereby agrees that it will reinstate the City PLHA Loan, as applicable, at that time, and agrees that it will recognize the County as borrower under the City PLHA Loan under the same terms and conditions of said City PLHA Loan, provided that: (i) the County expressly assumes all of Borrower's obligations under the City Loan Documents, and (ii) the County provides the City with evidence reasonably satisfactory to the City that the County has authority to assume all of Borrower's obligations under the City Loan Documents.
7. If the City takes title to the Development pursuant to a foreclosure sale of the Development under the City PLHA Deed of Trust and cures the outstanding defaults under the County Loan Documents, if any, the City shall have the right to transfer the Development to another nonprofit housing developer reasonably approved in advance in writing by the County.
In connection with any such transfer approved by the County, the County agrees that such transfer shall not constitute a default under the County Loan Documents, and the County shall not exercise any rights it may have to accelerate the County Loan as a result of such transfer, provided such transferee expressly assumes the obligations of Borrower under the County Loan Documents.
8. This Agreement represents the entire agreement among the parties on the subject matter hereof, and except as expressly provided herein, shall not be affected by reference to any other documents. Neither this Agreement nor any provision hereof may be changed, waived, discharged, or terminated orally, but such may be accomplished only by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge, or termination is sought.
9. If any of the provisions or terms of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other of the terms hereof, and this Agreement shall be construed as if such unenforceable term had never been contained herein.
10. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute and be construed as one and the same instrument.
Exhibit A is attached hereto and incorporated herein by this reference.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION
WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY
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SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND.
IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS
AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO.
[SIGNATURES ON FOLLOWING PAGES]
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City-County Subordination Agreement
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IN WITNESS WHEREOF, the parties have entered into this Agreement, as of the date first written above.
BORROWER:
E Street Veterans Apartments, LP,
a California limited partnership
By: U.S.VETS – E Street LLC,
a California limited liability company,
its managing general partner
By: U.S.VETS Housing Corporation,
a California nonprofit public
benefit corporation,
its managing member
By: ____________________________
Lori Allgood, COO
By: Kingdom Development, Inc.,
a California nonprofit public benefit corporation,
its member
By: ___________________________
William Leach, President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
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COUNTY:
SAN BERNARDINO COUNTY, a political subdivision of the
State of California
By: ____________________________________
Luther Snoke, Chief Executive Officer
APPROVED AS TO LEGAL FORM:
LAURA FEINGOLD
County Counsel
By: ____________________________________
Suzanne Bryant, Deputy County Counsel
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
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City-County Subordination Agreement
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Date:
CITY:
CITY OF SAN BERNARDINO, a municipal
corporation
By:
Eric Levitt, City Manager
ATTEST:
Telicia Lopez, City Clerk
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
[SIGNATURES MUST BE NOTARIZED]
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
BEING A PORTION OF LOT 11, IN BLOCK 34, 5 ACRE SURVEY OF RANCHO SAN BERNARDINO,
CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, FILED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY, AS SHOWN AS LOT MERGER NO. LM 2023-004, IN THE CERTIFICATE OF COMPLIANCE RECORDED AUGUST 24, 2023, AS INSTRUMENT NO. 2023-0208268 OF OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE EAST BOUNDARY LINE OF "E" STREET OF SAID CITY, 238.16 FEET SOUTH OF THE NORTHWEST CORNER OF SAID LOT 11, SAID POINT BEING ON THE SOUTH LINE OF DOCUMENT RECORDED DECEMBER 15, 2022, AS INSTRUMENT NO. 2022- 0400312 OF OFFICIAL RECORDS OF SAID COUNTY;
THENCE ALONG SAID LINE, NORTH 89° 17' 52" EAST, A DISTANCE OF 299.01 FEET, MORE OR LESS, TO A POINT MIDWAY BETWEEN THE SAID EAST BOUNDARY LINE OF SAID "E" STREET AND THE WEST BOUNDARY LINE OF "D" STREET OF SAID CITY;
THENCE SOUTH 00° 20' 18" EAST, A DISTANCE OF 116.98 FEET TO THE SOUTH LINE OF SAID LOT 11;
THENCE ALONG SAID LINE, SOUTH 89° 36' 20" WEST, A DISTANCE OF 299.02 FEET, MORE OR LESS, TO THE WEST BOUNDARY LINE OF SAID "E" STREET;
THENCE ALONG SAID LINE, NORTH 00° 19' 53" WEST, A DISTANCE OF 115.38 FEET TO THE POINT OF BEGINNING.
THE PRECEDING FOUR COURSES PER RECORD OF SURVEY 22-01062, RECORDED IN BOOK 176, PAGE 60 OF RECORDS OF SURVEY, RECORDS OF SAID COUNTY.
APN: 0145-211-55-0-000
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DISCUSSION
City of San Bernardino
Request for Council Action
Date: November 5, 2025
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Introduce, Read by Title Only, and Waive Further Reading, Ordinance No. MC-1656 Amending Section 8.24.100 of
Chapter 8.24 of Title 8 of the San Bernardino Municipal Code, Relating to the Construction and Demolition Debris Recycling Program (All Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino California:
1. Introduce, read by title only, and waive further reading, Ordinance No. MC-1656 amending Section 8.24.100 of Chapter 8.24 of Title 8 of the San Bernardino Municipal Code, relating to the Construction and Demolition Debris Recycling Program; and
2. Schedule the adoption of Ordinance MC-1656 for the regular meeting of the Mayor and City Council on December 3, 2025.
Executive Summary
The San Bernardino Municipal Code Section 8.24.100 establishes a minimum fifty (50) percent recycling diversion rate and mechanisms for construction and demolition (C&D) projects. Senate Bill (SB) 1383, enacted in 2016, requires jurisdictions to adopt mechanisms by which they can enforce CalGreen’s sixty-five (65) percent C&D debris recovery rate requirements by 2025. To comply with these state regulations, an amendment of City code section 8.24.100 is necessary, increasing the C&D debris recycling rate requirement from 50% to 65%. Furthermore, the recommended amendment includes improved mechanisms to enforce the 65% recycling rate for C&D debris projects that are consistent with SB-1383 requirements.
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City Manager Comments
None
Background
Section 8.24.100 of the City code outlines the Construction and Demolition Debris Recycling Program, including covered projects, exemptions, and various requirements.
Existing state law and regulations already require jurisdictions to adopt in their municipal code and enforce the California Green Building Standards Code (“CalGreen”). In 2016, the California legislature passed SB-1383 requiring the State Board to adopt regulations that address climate pollutants and implement comprehensive strategies to reduce statewide pollutant emissions. Furthermore, adopted SB-1383 regulations require state localities to adopt a waste management plan or other mechanism by which they can enforce CALgreen’s 65% C&D debris recovery rate requirement by 2025. Every city and county within California, including the City, could face fines up to $10,000 a day for not meeting the requirements set forth in SB-1383.
In November of 2016, the City, via Ordinance No. MC-1431 amended the San Bernardino Municipal Code, Title 8, Health and Safety, Article 24 entitled "Refuse and Solid Waste", Incorporating and Repealing Article 8.24.5 Entitled "Construction and Demolition Waste Recycling Program" and Article 8.25, Entitled "Scrap Tires." Resolution No. 2019-27 sets a minimum diversion requirement of sixty-five (65) percent for the same projects, but this requirement is not reflected in the municipal code.