CITY COUNCIL MEETING AGENDA April 4, 2023
CITY COUNCIL MEETING AGENDA
City Council Chambers
4488 Red Bluff Street
Shasta Lake. CA 96019
Tuesday, April 4, at 6:00 PM
Mayor: Greg Watkins
Vice Mayor: Janice Powell
Council Members: Tena Eisenbeisz, Justin Jones, Pamelyn Morgan
OTHER WAYS TO PARTICIPATE IN THE MEETING
• Watch a livestream of the meeting online or view the recording any time after the meeting concludes at the following: cityofshastalake.org/meetings
• Submit public comment by mail or email addressed to City Clerk, City of Shasta Lake, PO Box 777, Shasta Lake, CA 96019 or [email protected]. Mailed and emailed comments must be received one day prior to the meeting to be included.
6:00 PM CALL TO ORDER – REGULAR MEETING:
Call to order (please place electronic devices on silent) Statement for the record of Council Members present or absent Pledge of Allegiance
Invocation
AWARDS & RECOGNITIONS:
Proclamation for Fair Housing Month, April 2023.
The Brown Act prohibits the Council from taking action on any item not placed on the Agenda in most cases. The Brown Act requires any non-confidential documents or writings distributed to a majority of the City Council less than 72 hours before a regular meeting to be made available to members of the public at the same time they are distributed.
Should supplemental materials to be evaluated in the decision-making process be made available to the members of the legislative body at the meeting, seven (7) copies must be provided to the City Clerk who will distribute them.
Councilmembers are encouraged to contact the City Manager prior to the meeting with questions or concerns regarding any item on the Agenda so that their questions and concerns can be adequately addressed at the meeting.
Agenda packets are available for public review at City Hall, 4477 Main Street, Shasta Lake, CA during normal business hours of 7:00 a.m. to 4:00 p.m. weekdays, excluding holidays.
In Compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please call (530) 275-7407. Notification 48 hours prior to the meeting is requested to enable the City to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102-35.104 ADA Title II).
CITY COUNCIL MEETING AGENDA April 4, 2023
Proclamation for Child Abuse Awareness Month, April 2023.
PRESENTATIONS:
Presentation by Katie Sears from Hill Country for an update on Project Homekey.
COMMISSION, COMMITTEE, AND OUTSIDE AGENCY REPORTS:
PUBLIC COMMENT:
This time is set aside for citizens to address the City Council on matters listed on the Consent Agenda as well as other items not included on the Regular Agenda. If your comments concern an item noted on the regular agenda, please address the Council when that item is open for public comment. Each speaker is allocated three (3) minutes to speak. Speakers may not cede their time. Comments should be limited to matters within the jurisdiction of the City. Council discussion or action cannot be taken on items not listed on the agenda other than to receive comments. Speaker forms are available from the City Clerk, 4477 Main Street, Shasta Lake, on the City’s website, or at the back of the meeting hall. If you have documents to present to members of Council, please provide a minimum of seven copies.
CONSENT AGENDA:
The items listed under the Consent Agenda are considered routine business and will be voted on together by one motion unless a Council Member requests a specific item to be removed and discussed separately.
1. Acceptance of the Minutes of the March 21, 2023 regular meeting.
2. Resolution accepting the Certified Final Results of Votes Cast from the Shasta County Clerk/Registrar of Voters for the March 7, 2023, Special Election.
3. Resolution accepting the annual review of the Development Agreement between the City of Shasta Lake and Mountain Properties, Inc. (Developer) and finding that developer has complied in good faith with the terms and conditions of the Development Agreement.
4. Information item: (page 10)
Checks, E-payments, and wires:
03/02/2023 $919,668.45
03/09/2023 $2,804,808.87
Payrolls:
3/24/2023 $1841,683.02
PUBLIC HEARINGS: None
OATH OF OFFICE AND SEATING OF NEWLY ELECTED COUNCIL MEMBER, TENA EISENBEISZ CITY COUNCIL MEETING AGENDA April 4, 2023
REGULAR AGENDA:
5. Discussion and possible action on a Resolution approving a Disposition, Development, and Loan Agreement with Shasta Lake Downtown Housing, LP, a California Limited Partnership, for the Affordable Housing and Sustainable Communities Program for the project “Shasta Lake Downtown Revitalization Project” and authorizing the City Manager to execute all documents related to this agreement on behalf of the City.
6. Discussion and possible action on a Resolution accepting the results of the Water Utility Rate Study Update completed by Pace Engineering, Inc., direct staff to prepare public notification of the proposed rates in accordance with Proposition 218, and to set a public hearing for consideration of adoption of the proposed rates on June 20, 2023.
7. STAFF COMMENTS:
Jessaca Lugo, City Manager – report City receiving 100% of its USBR Allocation, therefore removing from all states of the Water Shortage Contingency Plan, and elimination of all drought rates.
8. CITY COUNCIL COMMENTS AND REPORTS:
This is the time set aside for Council Members, who may so desire, to give brief comments or reports concerning City matters. The City Council may not enter into discussion on matters reported.
Statements made by individual Council Members should not be interpreted as a statement of the City Council. The City Council only takes action by majority vote. • Brief reports by members of the Council regarding correspondence, events and/or meetings attended, and upcoming meetings/events.
• Suggestions/motions for future agenda items.
• In compliance with Assembly Bill 1234, Council will report on attendance at conferences/meetings/events where expenses are reimbursed by the City.
ADJOURNMENT:
Meetings are broadcast on the Wednesday following the meeting at 6:00 PM and the following Friday at 2:00 PM on Charter Channel 181. Videos of meetings are also available through the City website: www.cityofshastalake.org
PROCLAMATION
A CITY OF SHASTA LAKE MAYOR’S PROCLAMATION FOR
FAIR HOUSING MONTH, APRIL 2023
WHEREAS, the principle of fair housing is not only state and national law and policy, but a fundamental human concept; and
WHEREAS, discrimination based on race, color, national origin, gender, disability, familial status, religion, marital status, source of income, or any arbitrary reason is illegal in California; and WHEREAS, economic stability, community health, and human relations in all communities are improved by diversity and integration; and
WHEREAS, the City of Shasta Lake promotes fair housing through its various grant funded programs, partnerships, and projects.
NOW, THEREFORE, BE IT PROCLAIMED by the Mayor of the City of Shasta Lake that April be recognized as Fair Housing Month.
Dated this 4th day of April 2023
GREG WATKINS, Mayor
1 A PROCLAMATION OF THE MAYOR OF THE CITY OF SHASTA LAKE, PROCLAIMING APRIL 2023 AS
CHILD ABUSE PREVENTION AWARENESS MONTH
WHEREAS, as a society, we have a responsibility to nurture and protect our children and help ensure they become healthy and productive adults; and
WHEREAS, the Centers for Disease Control and Prevention ranks child abuse among America’s top public health crisis. In Shasta County substantiated cases of child abuse are three times the state average; and
WHEREAS, Adverse Childhood Experiences (ACEs) have a significant impact on a child’s future that include physical, emotional, and sexual abuse, neglect, and parental illness or stress; and WHEREAS, scientific studies confirm a direct link between child abuse and a significantly greater risk later in life for substance abuse, criminal behavior, suicide, eating disorders, smoking, and premature death from chronic disease, cancer and other serious illnesses; and WHEREAS, everyone in the community should become more aware of the prevention of child abuse and neglect and engage in providing pathways to hope and healing for parents and caregivers so they can raise their children in a safe, nurturing environment; and WHEREAS, Pathways to Hope for Children (Shasta County’s Child Abuse Prevention Coordinating Council) strengthens families in our community by focusing on hope and building protective factors to ensure children are valued and supported by providing parents are caregivers opportunities to receive social connections, knowledge and concrete support in times of needs, ensure all children will grow to their full potential; and WHEREAS, in the City of Shasta Lake there are numerous committed agencies, schools, parents, relatives, community volunteers, public policymakers and professionals who are collaborating their efforts to increase hope in our community and eliminate child abuse and neglect to provide pathways to hope and healing for children and families;
NOW, THEREFORE, as Mayor of the City of Shasta Lake, I do hereby proclaim April 2023, as Child Abuse Prevention Awareness Month in the City of Shasta Lake and urge all citizens to join the important efforts of all partners serving children and families to work together to prevent child abuse and neglect and build healthy, safe, and nurturing families and communities.
Dated: April 4, 2023
________________________
GREG WATKINS, MAYOR
2 MEETING OF THE CITY OF SHASTA LAKE CITY COUNCIL
MINUTES OF THE REGULAR MEETING
HELD TUESDAY, MARCH 23, 2023 AT THE
CITY COUNCIL CHAMBERS, 4488 RED BLUFF ST, SHASTA LAKE, CALIFORNIA
66:00 PM CALL TO ORDER - Regular Session
Mayor Watkins convened the regular meeting at 6:00 PM
Council Members present: Jones, Morgan, Powell, Watkins Council Members absent: none
Pledge & invocation
AWARDS AND RECOGNITIONS
PRESENTATIONS:
Clean California Presentation and announcement regarding a local “Dam” Boulevard Clean Up Event.
Website for the Clean CA initiative: https://cleancalifornia.dot.ca.gov/about The website for community clean-up program: https://cleancalifornia.dot.ca.gov/community-days Presentation by Kaitlyn Dunham, Biologist with the Livingston Stone National Fish Hatchery.
COMMISSION, COMMITTEE, AND OUTSIDE AGENCY REPORTS
Rose Smith reported on Shasta Dam Area Little League Opening Day and field dedication in the name of Mark Lillibridge.
Ann Morningstar reported on Shasta County PSA and the reopening of senior centers.
Public Comment:
Tara Levin from the Shasta County Day Reporting Center announced the upcoming Open House.
Tracy Walsh spoke regarding drainage problems affecting her property and speeding on Trinity.
Jim Mark spoke regarding body-cameras and term-limits.
CONSENT AGENDA
1. Acceptance of the Minutes of the March 7, 2023 regular meeting.
2. Resolution CC-2023-12 to declare McGuire Pacific Constructors the lowest responsive, responsible bidder, award a construction contract in the amount of $165,150.00 to McGuire Pacific Constructors for the construction of the HSIP Cycle 10 Safety Improvements Project, and approve total expenditure for construction not to exceed $187,319.00
3. Information item:
Checks, E-payments, and wires:
2/16/2023 $1,744,783.40
2/23/2023 $262,660.24
Payrolls:
03/10/2023 $187,451.05
3 Motion/Vote:
By motion made/seconded (Morgan/Powell), and carried, the consent agenda was approved.
PUBLIC HEARINGS None
REGULAR AGENDA
4. Discussion and possible action on a Resolution adopting Fiscal Year 2022-23 Mid-Year Budget.
Motion/Vote:
By motion made/seconded (Morgan/Powell), and carried, Resolution CC-2023-13 was approved.
5. Discussion and possible action to submit letters of support for SB 43, Behavioral Health and SB 363, facilities for inpatient and residential mental health and substance use disorder: database.
Council Consensus was to support the proposed legislation.
COMMUNICATIONS
Staff Comments
City Council Comments
ADJOURNMENT
With no further business, Mayor Watkins adjourned the meeting at 7:58 pm.
_____________________________
TONI M. COATES, CMC, City Clerk
4 Report and Recommendations
Reviewed and Approved 2
City Manager
AGENDA ITEM
City Council
TO: City Council
FROM: Toni M. Coates, City Clerk
DATE: March 28, 2023
SUBJECT: Certification of Votes Cast in the March 7, 2023 Special Election FILE: A-050-090-178
RECOMMENDATION:
Staff recommends approval of the attached Resolution accepting the March 7, 2023 Special Election results.
BACKGROUND:
In compliance with California Government Code, upon receiving the final results of votes cast from the County Clerk/Registrar of Voters, the City shall adopt a Resolution at its next regular meeting accepting the Certification of Results.
FISCAL IMPACTS:
None
ATTACHMENTS:
Resolution
Certification of Results
DISTRIBUTION:
City Council
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7 8
RESOLUTION CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE ACCEPTING
THE CERTIFIED FINAL RESULTS OF VOTES CAST FROM SHASTA COUNTY CLERK/REGISTRAR OF VOTERS FOR THE MARCH 7, 2023 SPECIAL ELECTION WHEREAS, on March 7, 2023 the Special Municipal Election was held and one Council Member (Tena Eisenbeisz) was elected to fill a seat for a term ending in December of 2024; and WHEREAS, pursuant to Government Code Section 15302 of the California Elections Code, the Shasta County Clerk/Registrar did canvass the returns of the votes cast at the March 7, 2023 special election; and
WHEREAS, the Shasta County Clerk/Registrar did certify the whole number of votes cast in said election; and
WHEREAS, the Final Statements of Votes Cast issued by the County Clerk/Registrar of Voters for the March 7, 2023 Special Municipal Election will be incorporated into the following Resolution as an attached exhibit.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Shasta Lake hereby accepts the statements certified by the County Clerk/Registrar of Voters for Results of Votes Cast.
PASSED, APPROVED, AND ADOPTED this 4th day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
______________________________
GREG WATKINS, Mayor
ATTEST:
___________________________
TONI M. COATES, CMC, City Clerk
•
•
9 Report and Recommendations 3
Reviewed and Approved
_________________________
City Manager
AGENDA ITEM
City Council Meeting ___________________________________________________________________________ TO: Mayor and City Council Members
FROM: Jessaca Lugo, City Manager
DATE: April 4, 2023
SUBJECT: Mountain Properties Development Agreement Annual Review (2021 & 2022) FILE NO.: P-110-770-400
SUMMARY
Discussion and possible action to adopt a resolution finding that Mountain Properties, Inc., has complied in good faith with the terms and conditions of the Development Agreement (Agreement) between the City of Shasta Lake and Mountain Properties, Inc. (Developer), relative to the development known as Mountain Properties Subdivision (SD 04-01).
Government Code Section 65865.1 and Section 18 of the Agreement require the City to complete an annual review to determine good-faith compliance with the terms and conditions of the Agreement.
BACKGROUND
The project site is identified as Assessor’s Parcel Numbers 006-610-004, -005, and -007, located generally on the west side of Lake Boulevard, north of Yellow Pine Avenue, south of Flanagan Road, and east of the westerly city limit. The exhibits to the Agreement include legal descriptions and a detailed project description.
On September 21, 2006, the Planning Commission adopted Resolution PC 06-12 recommending to the City Council approval of Vesting Tentative Map SD 04-01, Rezone Z 04-02 and Adoption of a Mitigated Negative Declaration for the Mountain Properties Subdivision. On October 17, 2006, City Council adopted Resolution CC 06-80 approving the Tentative Map. Ordinance CC 06-179 approving the rezone was adopted on November 21, 2006.
On September 21, 2010, City Council adopted Ordinance CC 10-212 approving a Development Agreement between the City and the Developer. The Agreement includes the following requirement:
10 18. Periodic Review of Compliance.
(a) General Statement. Throughout the Term, at least once every twelve (12) months following the execution of this Agreement, City shall review the extent of goodfaith compliance by Developer with the terms of this Development Agreement in accordance with Government Code Section 65865.1.
(b) Initiation of Review. The City’s Development Services Director shall initiate the annual review by giving to Developer thirty (30) days’ written notice that the City intends to undertake such review. Developer agrees to furnish such reasonable evidence and adequate documentation of good faith compliance as the City, in the exercise of its reasonable discretion, may require.
(c) Good Faith Compliance. During the Periodic Review, the Development Services Director shall review Developer’s good-faith compliance with the terms of this Agreement. At the conclusion of the Periodic Review, the Development Services Director shall make written findings and determinations, on the basis of substantial evidence, as to whether or not Developer has complied in good faith with the terms and conditions of this Agreement.
If the Development Services Director’s review determines that all terms and conditions of the Agreement were met, and Council concurs, no further review is required. If the Development Services Director finds and determines that Developer has not complied with such terms and conditions, the Development Services Director may recommend to City Council that it terminate or modify this Agreement by giving its intention to do so, in the manner set forth in California Government code Section 65867 and 65868.
Section 18(e) of the Agreement states:
It is understood that Developer is not under any obligation to commence construction of the Development within any time period or at all, and that nonconstruction of the Development is not a basis for the City to determine that Developer is not in good faith compliance with this Agreement.
The City Manager has determined the Developer has complied in good faith with the terms and conditions of the Development Agreement. The Agreement does not include a timeline requiring completion of the project or specific milestones that must be met by certain dates. In addition, the Agreement specifically states non-construction of the project is not grounds for making a finding of non-compliance. The Development Agreement is set to expire September 21, 2025 (15 years from effective date).
CURRENT STATUS
In 2014, the developer applied for a text amendment to General Plan Land Use Policy LU-s. The amendment, as proposed, would change the minimum lot size for parcels served with a septic system from five acres to as small as 1/ ¼ acres. The applicant put the application on hold in order to review other options for development. The Development Services Director has had several discussions with the developer over the past year regarding possible amendments to the project. The amendments, which would create larger lots served by septic systems, would require a new Tentative Subdivision Map and environmental review. If a new project is proposed and approved, the existing Development Agreement would be rescinded and Council could consider entering into a new Development Agreement for the amended project.
FISCAL IMPACTS:
None
11 RESOLUTION CC-2023-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE ACCEPTING
THE ANNUAL REVIEW OF THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SHASTA LAKE AND MOUNTAIN PROPERTIES, INC. (DEVELOPER) AND FINDING
THAT DEVELOPER HAS COMPLIED IN GOOD FAITH WITH THE TERMS AND
CONDITIONS OF THE DEVELOPMENT AGREEMENT
WHEREAS, on September 21, 2010, City Council adopted Ordinance CC 10-212 approving a Development Agreement (Agreement) between the City of Shasta Lake and Mountain Properties, Inc. (Developer), for that development known as Mountain Properties Subdivision (SD 04-01); and WHEREAS, Government Code Section 65865.1 and Section 18 of the Agreement require the City to complete an annual review to determine good-faith compliance with the terms and conditions of the Agreement; and
WHEREAS, the Development Services Director has determined the Developer has complied in good faith with the terms and conditions of the Development Agreement. The Agreement does not include a timeline requiring completion of the project or specific milestones that must be met by certain dates. In addition, Section 18(e) of the Agreement states, “It is understood that Developer is not under any obligation to commence construction of the Development within any time period or at all, and that nonconstruction of the Development is not a basis for the City to determine that Developer is not in good faith compliance with this Agreement.”
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Shasta Lake hereby accepts the annual review of the Development Agreement between the City of Shasta Lake and Mountain Properties, Inc., for that development known as Mountain Properties Subdivision pursuant to Government Code Section 65865.1 and Section 18 of the Agreement and has determined Developer has complied in good faith with the terms and conditions of the Agreement.
PASSED, APPROVED, AND ADOPTED this 4th day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_________________________________
GREG WATKINS, Mayor
ATTEST:
_______________________________
TONI M. COATES, CMC, City Clerk
12 13
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16 17
18 19
20 21
22 23
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Report and Recommendations 5 Reviewed and Approved
City Manager
AGENDA ITEM
City Council Meeting ___________________________________________________________________________ TO: Mayor and City Council Members
FROM: Jessaca Lugo, City Manager
DATE: April 4, 2023
SUBJECT: Shasta Lake Downtown Revitalization Project
Disposition, Development, and Loan Agreement
Shasta Lake Downtown Housing LP/City of Shasta Lake
FILE NO.: P-110-145-044
SUMMARY
Discussion and possible action adopting a resolution approving a Disposition, Development and Loan Agreement (“Agreement”) between the City of Shasta Lake and Shasta Lake Downtown Housing, LP.
BACKGROUND
The City of Shasta Lake (“City”), ADK Properties, LLC (“ADK”), Community Revitalization and Development Corporation (“CRDC”) and Win-River Hotel Corporation (WRHC) as a Public, Private, and Tribal Collaboration for the Project has been awarded over $16.5 million from the California Strategic Growth Council (SGC) Program toward the construction of a $36.5 million mixed-use development along the north and south sides of Shasta Dam Boulevard. This 52,918SF project includes 49 units of affordable housing and 7,500SF of commercial space, this project is known as the “Shasta Lake Downtown Revitalization Project.” Funding will go directly toward transit, pedestrian, and bike improvements throughout downtown, connecting to the future Win-River Hotel Company commercial center project.
The purpose of the Affordable Housing And Sustainable Communities (AHSC) program is to reduce greenhouse gas (GHG) emissions through projects that implement land-use, housing, transportation, and agricultural land preservation practices to support infill and compact development. The Shasta Lake Downtown Revitalization project was awarded under the RIPA (Rural Innovation Project Area) and was the only Federally Recognized Native American Tribal Project in the State of California. 26 Project Site:
PROJECT STATS:
SITE AREA: 2.09 ACRES
TOTAL UNITS: 49 UNITS
(15) 1 BED UNITS (636 SF)
(20) 2 BED UNITS (870 SF)
(14) 3 BED UNITS (1160 SF)
PROJECT GROSS INTERIOR: 60,700 SF
(RESIDENTIAL + CIRCULATION/UTILITY
COMMERCIAL + BIKE STORAGE)
RESIDENTIAL GROSS: 51,280 SF
(RESIDENTIAL + CIRCULATION/UTILITY)
RESIDENTIAL ONLY: 46,743 SF
CIRCULATION/UTILITY ONLY: 7,811 SF
COMMERCIAL MIXED USE: 6,146 SF
BIKE STORAGE: 300 SF (30 BIKES)
PARKING (RESIDENTIAL): 26 SPACES
PARKING (MIXED USE): 53 SPACES
URBAN GREENING A: 11,322 SF
URBAN GREENING B: 1,200 SF
27 PROPERTY DETAIL:
CITY PROPERTY
CITY COUNCIL CC-2022-86 EXEMPT SURPLUS
LAND DEDICATION FOR PROJECT
ADK Properties, LLC, Legal Owner
4605 Shasta Dam Blvd/Assessor's Parcel
Number (APN) 005-250-059-000 (Old K-Med Site)
4659 Shasta Dam Blvd/Assessor's Parcel
Number (APN) 005-250-063-000 (Grand River
Parking Lot)
Vacant Land (No Address)/Assessor's Parcel
Number (APN) 007-010-096-000 (dirt parking lot
East of old City Hall)
Property to be transferred to developer
4617 Shasta Dam Blvd/005-250-007 (From the
Hearth Site)
4633 Shasta Dam Blvd/005-250-008 (Boat Shop)
4650 Shasta Dam Blvd/007-010-008;-009 (South
side odd church property)
4645 Shasta Dam Blvd/005-250-009* (existing
mixed-use property/Lacy’s Crafts)
*not a part of the Downtown Revitalization Project
In addition to the 49 affordable units, the overall project includes the construction of more than $9,500,000 in sustainable transportation improvements (STIs) and transportation related amenities (TRAs).
Successful applications for AHSC grant funding must include proportional amounts of funding to construct and install STIs and TRAs. For the Project, the STIs and TRAs include a series of transit, pedestrian and bicycling amenities as described below. The improvements recommended for funding are based on the eligibility criteria in the AHSC grant application. The list of improvements has been specifically designed to help make the overall project as competitive as possible. 28 When constructed, these improvements will encourage and support cycling and walking by making improvements to sidewalks, bicycle routes and connections to transit between the project site and key destinations in Shasta Lake. The City's transit operations will be directly improved, and ridership will be increased, through the addition of a new bus stop near the mixed-use development A variety of technical enhancements are also proposed to be installed in buses to improve rider experience. To effectively implement the STIs and TRAs, the City will enter into a standard agreement with the State of California for the STI improvements. The City will receive the funding for these improvements and directly oversee their construction or installation.
STI/TRA Improvements (Grant)
ANALYSIS
What is a DDLA: Disposition and Development and Loan Agreement means an agreement entered into between the Agency and a private developer pursuant to which the Agency sells or leases property to the developer and the developer agrees to develop the property in accordance with the agreement.
The Developer and City negotiated in good faith the terms of the DDLA that included revised sections related to the references to the State of California Standard Agreement, photovoltaic conditions, and roles and responsibilities. The following summary is intended to describe the DDLA confirming what is and what is not included in the Agreement:
1. The DDLA addresses roles and responsibilities as it relates to Affordable Housing and related infrastructure and programs. The development project will construct 49 units of mixed-use affordable housing the downtown core of Shasta Lake, including transit related amenities. The project also includes a partnership with the SMART Resource Center and the Northern Rural Training and Employment Consortium (NoRTEC) to provide career ladder employment services in the region.
2. The DDLA does not approve the project. The project has already been approved through City Council (Resolution CC-2021-32).
3. The DDLA does not approve the design of the project. The project design review was completed though the Planning Commission (PC20-02). Any substantial changes amounting to 10% or greater to the design of the project will require City review.
4. The DDLA does not approve the terms of the transfer of City owned parcels. The City has already committed the land through the designation of surplus lands; grant agreement; and City conditional committed.
5. The DDLA is not determining value of City “vacant” land. The AHSC application required a fair market value (FMV) by appraisal report effective June 4, 2021. City has agreed to provide the City land loan in the amount not to exceed the FMV of $868,000. The terms and conditions of the land loan will be deferred for 55 years and shall bear no interest. 29 6. The DDLA addresses a $1.5M predevelopment loan between the City and Developer. The City conditional commitment allowed for a predevelopment loan to be disbursed to the Developer for predevelopment costs not to exceed $1.5M. Such loan is reimbursable under the AHSC funds, when the standard agreement is fully executed.
7. The DDLA addresses the construction of the required “net zero” AHD Photovoltaic System. The submitted application identified a system that produced more than the required net zero requirements. The City and Developer will be submitting a letter of amendment to the State of California AHSC program to reduce this requirement allowing all solar to be construction on premises. In the event the State of California rejects the request, and require an expanded solar project, the City will work with the Developer locating a portion of the AHD Photovoltaic System to on an off- premises location.
FISCAL IMPACTS:
Predevelopment Loan $1.5M (reimbursable by the State of California Standard Agreement).
City Land Loan – Deferred Payment for 55 years/no interest ($868,000) FMV 6/4/2021.
The City anticipates an increase in property tax revenue when the project is fully complete.
ATTACHMENTS
Resolution CC-2021-32
Award Letter
Resolution CC-2023-__
Draft - Disposition, Development, and Loan Agreement
DISTRIBUTION
• City of Shasta Lake City Council
• City Attorney
• Shasta Lake Downtown Housing, LP (ADK Properties/ Community Revitalization and Development Corporation)
30 STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES and HOUSING AGENCY GAVIN NEWSOM, Governor DEPARTMENT OF HOUSING and COMMUNITY DEVELOPMENT
DIVISION OF STATE FINANCIAL ASSISTANCE
2020 W. El Camino Avenue, Suite 670, 95833
P. O. Box 952054
Sacramento, CA 94252-2054
(916) 263-2771
www.hcd.ca.gov
February 4, 2022
David Rutledge, President
Community Revitalization and Development Corporation
635 Parkview Avenue
Redding, CA 96099
Jeremy Hayward, Executive Officer
Win River Hotel Corporation
2000 Redding Rancheria Road
Redding, CA 96001
Jessaca Lugo, Assistant City Manager
City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
RE: Award Announcement – AHSC Program, Round 6, FY 2019-20 & FY 2020-21 PIN 47695 – Shasta Lake Downtown Revitalization
Dear David Rutledge, Jeremy Hayward, and Jessaca Lugo:
The California Department of Housing and Community Development (Department) and the Strategic Growth Council are pleased to announce that Shasta Lake Downtown Revitalization has been awarded an Affordable Housing and Sustainable Communities (AHSC) program award in the amount of $16,540,259. This letter constitutes notice of the award as approved by the Strategic Growth Council on January 26, 2022 of the following AHSC program funds:
AHSC Program Loan Funds
Amount Awarded $5,841,661
Contract Number 21-AHSC-16973
AHSC Program Grant Funds
Amount Awarded $10,698,598
Contract Number 21-AHSC-16974
31 Shasta Lake Downtown Revitalization
February 4, 2022
Congratulations on a successful application. For further information, please contact Craig Shields, Branch Chief, Program Design and Implementation – Climate Change, at (916) 823-6054 or [email protected].
Sincerely,
Jennifer Seeger
Deputy Director
Division of State Financial Assistance
32 33
34 RESOLUTION CC-2023-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE APPROVING A
DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT WITH SHASTA LAKE DOWNTOWN
HOUSING, LP, A CALIFORNIA LIMITED PARTNERSHIP, FOR THE AFFORDABLE HOUSING AND SUSTAINABLE COMMUNITIES PROGRAM FOR THE PROJECT “SHASTA LAKE DOWNTOWN REVITALIZATION PROJECT” AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
DOCUMENTS RELATED TO THIS AGREEMENT ON BEHALF OF THE CITY WHEREAS the Strategic Growth Council (SGC), and the State of California Department of Housing and Community Development (Department) have issued a Notice of Funding Availability dated February 26, 2021 (NOFA), under the Affordable Housing and Sustainable Communities (AHSC) Program; and WHEREAS, ADK Properties LLC, Community Revitalization and Development Corporation, Win River Hotel Corporation and the City of Shasta Lake as Co-Applicant, submitted an joint-application for AHSC Program funds; and
WHEREAS, the City Council authorized through RESOLUTION CC-2021-32 upon funding award, ADK Properties LLC and the City of Shasta Lake will enter into a Development Agreement for the project; and WHEREAS, the City and project partners were notified on February 4, 2022 the Shasta Lake Downtown Revitalization Project was selected for award in the amount of $16,540,259. The award letter constitutes the following AHSC program funds:
WHEREAS, ADK Properties LLC and Community Revitalization and Development Corporation formed Shasta Lake Downtown Housing, LP and Shasta Lake Downtown Housing, LLC entities to carry out the development of the project; and
WHEREAS, the City of Shasta Lake and Shasta Lake Downtown Housing, LP has negotiated in good faith the terms of the Disposition, Development, and Loan Agreement (Attachment A).
NOW, THEREFORE, THE CITY COUNCIL OF SHASTA LAKE hereby resolves, finds, determines and orders as follows:
1. The above recitals are true and correct.
2. The City Manager, or his/her designee, is authorized to execute a Development Agreement (Attachment A) with Shasta Lake Downtown Housing, LP for the purposes of carrying out the requirements of the Standard Agreements and any negotiated requirements to fulfill the completion of the project.
3. This resolution is effective immediately upon adoption.
PASSED, APPROVED, AND ADOPTED this 4th day of April 2023 by the following vote:
AYES:
NOES:
35 ABSENT:
_______________________________________
GREG WATKINS, MAYOR
ATTEST:
____________________________________
TONI M COATES, CMC, City Clerk
36 “ATTACHMENT A”
DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT
By and Between
City of Shasta Lake and
Shasta Lake Downtown Housing, LP, a California Limited Partnership 37 Disposition and Development Agreement Between the
City of Shasta Lake and Shasta Lake Downtown Housing, LP Page 1 of 35
DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT
By and Between
City of Shasta Lake
Shasta Lake Downtown Housing, LP, a California Limited Partnership Shasta Lake Downtown Revitalization Project
4601, 4617, 4633, 4640, 4650, 4567 Shasta Dam Boulevard 38 Disposition and Development Agreement Between the
City of Shasta Lake and Shasta Lake Downtown Housing, LP Page 2 of 35
DISPOSITION AND DEVELOPMENT AGREEMENT
This DISPOSITION AND DEVELOPMENT AGREEMENT (“Agreement”) is made and entered into by and between the City of Shasta Lake, a California municipal government (“City”), and Shasta Lake Downtown Housing, LP, a California limited partnership (“Developer”).
RECITALS
City is a California municipal government.
The City is the legal owner of real property commonly referred to as 4601 and 4657 Shasta Dam Boulevard located in the City of Shasta Lake, County of Shasta, State of California and referred to as assessor parcel numbers 005-250-059, 006-250-063 and 007-010-096 as more particularly described in Exhibit 1 (hereinafter referred to as the “City Property”). City will transfer the City Property to Developer pursuant to the terms hereof.
Developer is the legal owner, or has contracted to acquire and become the legal owner of real property commonly referred to as 4617, 4633, 4540 and 4650 Shasta Dam Boulevard located in the City of Shasta Lake, County of Shasta, State of California and referred to as assessor parcel numbers 005-250-007, 005-250-008, 007-010-008 and 070-010-009 as more particularly described in Exhibit 1 (hereinafter referred to as the “Developer Property” and collectively with the City Property the “Affordable Housing Property”).
Developer is a California limited partnership formed by and between Community Revitalization and Development Corporation, a California nonprofit public benefit corporation (the “Managing General Partner’), as managing general partner, Shasta Lake Downtown Housing, LLC, a California limited liability company (the “Administrative General Partner”), as the administrative general partner, and Shasta Lake Downtown Housing, LLC, a California limited liability company, as the initial limited partner, formed for the purpose of constructing and owning the Affordable Housing Project (as defined in Section 1.1 below).
Developer intends to develop and construct a mixed use development consisting of the Affordable Housing Project and the Commercial and Retail Component (each as defined in Section
1.1 below). The Affordable Housing Project and the Commercial and Retail Component are referred to collectively herein as the “Shasta Lake Downtown Housing Project”. The Affordable Housing Project includes a photovoltaic system (the “AHD Photovoltaic System”) that was used to create greenhouse gas benefits in the AHSC application.
Developer will own and operate the Affordable Housing Project. ADK Properties LLC, is a California limited liability company (“ADK”) that will acquire and own the Commercial and Retail Component upon completion of construction of the Shasta Lake Downtown Housing Project. ADK is the sole member of the Administrative General Partner.
On June 2, 2021, the City, the Managing General Partner and ADK executed a Conditional Commitment, attached as Exhibit 3, which outlined the terms by which the City would transfer the City Property to the Developer and provide financial assistance to Developer for the development of the Shasta Lake Downtown Housing Project.
In response to an application submitted by the City, the Managing General Partner, 39 Disposition and Development Agreement Between the
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ADK and Win River Hotel Corporation, a corporation duly formed under Tribal Law of Redding Rancheria, a Federally Recognized Native American Tribe (“Win River”), in June 2021, the Department of Housing and Community Development (HCD) and the Strategic Growth Council (SGC) awarded the City, the Managing General Partner, ADK and Win River Affordable Housing and Sustainable Communities (AHSC) Program funds in the total amount of $16,540,259 consisting of $10,698,598 in grant funds and $5,841,661 in loan funds. The City, the Managing General Partner, ADK and Win River will enter into Standard Agreement 21-AHSC-16974 with HCD governing the grant funds and Standard Agreement 21-AHSC-16973 with HCD governing the loan funds (collectively the “AHSC Standard Agreements”). The Developer will also be a party to the Standard Agreement governing use of the AHSC funds to be utilized for the housing component of the Affordable Housing Project.
The City now desires to transfer the City Property to the Developer and provide a predevelopment loan and conduit loans of AHSC funds pursuant to the terms hereof.
City and Developer desire to enter into this Agreement to set forth the mutual obligations of the City and Developer in connection with the planning, financing, construction, and completion of the Shasta Lake Downtown Housing Project.
AGREEMENT
1. DEFINITIONS. The following definitions shall apply for the purposes of this Agreement:
1.1 “Affordable Housing Project” shall mean the development of the improvements to be constructed on the Affordable Housing Property in accordance with the Final Plans and this Agreement. The development of the improvements include, but are not limited to, the construction of 49 units, one manager’s unit and 48 residential units that will be restricted to tenants with incomes ranging from 30 percent to 60 percent of the AMI, common areas and associated infrastructure. On or prior to completion of the Shasta Lake Downtown Housing Project Developer will create the Affordable Housing Project as a separate legal parcel from the Commercial and Retail Component. Additional project detail is further described and provided in this Agreement, the Scope of Development and the Final Plans.
1.2 “Affordable Rent” shall have the meaning set forth by LIHTC Program and the City’s Declaration of Affordability Restrictions.
1.3 “Affordable Units” shall mean the rental housing units in the Affordable Housing Project that are restricted by the City’s Declaration of Affordability Restrictions as further defined in Exhibit 13 and pursuant to the LIHTC Program.
1.4 “AHD Photovoltaic System” shall have the meaning given in the Recitals.
1.5 “AHSC Standard Agreements” shall have the meaning given in the Recitals.
1.6 “Area Median Income or AMI” shall mean the current area median income adjusted for family size appropriate to the size of the rental unit applicable to Shasta County, as determined by HUD.
1.7 “Certificate of Completion” shall mean the document attached as Exhibit 20.
1.8 “Certificate of Occupancy” shall mean the certificate of occupancy issued by the 40 Disposition and Development Agreement Between the
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City.
1.9 “Change Order” shall mean a modification of the Plans that is either a Substantial Change, a change which will result in a material net increase in cost (for purposes of this Section
1.7 a material net increase in cost shall mean $100,000 for any individual change or any change that exceeds $250,000 in the aggregate with all other changes) or extend the period of construction beyond the Completion Date, or other change necessitated by circumstances, such as the unforeseen unavailability of particular materials or products required in the Affordable Housing Project’s plans and specifications.
1.10 “City” shall mean the City of Shasta Lake. The City is a municipal government.
City as it is used in this Agreement includes the City Council of the City of Shasta Lake and any assignees of or successors to its right, powers, and responsibilities. The principal office of the City is located at 4477 Main Street, Shasta Lake, California 96019. The phone number for voice communication with the City (Jessaca Lugo, City Manager) is 530.275.7411 and for email transmittal to the City is [email protected].
1.11 “City Affordability Period” shall mean a period commencing upon the date of recordation of a Certificate of Completion by the City for the Affordable Housing Project and continuing for fifty (55) years.
1.12 “City Declaration of Affordability Restrictions” shall mean the document recorded against the Affordable Housing Project to enforce the City Affordability Period and Affordable Rents for the Affordable Units, a representative copy of which is attached hereto as Exhibit 14.
1.13 “City AHSC Conduit Loan(s)” shall mean the construction/permanent loan provided by the City pursuant to Section 3.4.
1.14 “City Land Loan” shall mean the construction/permanent loan provided by the City pursuant to Section 3.1.
1.15 “City Predevelopment Loan” shall mean the predevelopment loan provided by the City pursuant to Section 3.5.
1.16 “City Loans” shall mean the City AHSC Conduit Loan(s), the City Predevelopment Loan and the City Land Loan.
1.17 “City Manager” shall mean the City Manager of the City of Shasta Lake.
1.18 “Code of Federal Regulations” or “CFR” is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government.
1.19 “Commercial and Retail Component” shall mean approximately 7,500 square feet of cold shell space for retail and commercial uses to be constructed on the Affordable Housing Property in accordance with the Final Plans and this Agreement. On or prior to completion of the Shasta Lake Downtown Housing Project the Developer will create the Commercial and Retail Component as a separate legal parcel from the Affordable Housing Project. Additional project detail is further described and provided in this Agreement, the Scope of Development and the Final Plans.
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1.20 “Completion Date” shall mean the date stated in the Schedule of Performance for the completion of construction of the Affordable Housing Project.
1.21 “Conditions of Approval” shall mean all provisions/conditions of approval of City of Shasta Lake Planning Commission Resolution PC 20-02.
1.22 “Construction” (whether or not capitalized), unless the context clearly indicates otherwise, shall mean construction of the Project on the Affordable Housing Property in accordance with the Conditions of Approval, the Final Plans and this Agreement.
1.23 “Contractor” is the contractor or contractors with whom Developer contracts for the construction, and “subcontractors” are those contractors with whom Contractor contracts or with whom another subcontractor contracts for a portion of the construction. Contractor (and all subcontractors who must, by law, hold a contractor’s license) shall have a current and valid contractor’s license, issued by the California Contractors’ State License Board, for the work they are performing.
1.24 “Days” shall mean calendar days unless expressly stated otherwise. If the date or time period for any action under this Agreement falls or ends on a Saturday, Sunday or federal, state or legal holiday, then such date or time period shall automatically be extended until 5 p.m.
Pacific Time of the next Day which is not a Saturday, Sunday or federal, state or legal holiday.
1.25 “Deed(s) of Trust” shall mean the deed of trust recorded against the Affordable Housing Project to secure the City Loan(s), representative copies of which are attached hereto as Exhibits 8, 10 and 13.
1.26 “Deferred Payment Loan” shall mean a loan for which the repayment of principal and accrued interest is deferred until the expiration of it’s term.
1.27 “Developer” is Shasta Lake Downtown Housing, LP, a California limited partnership. The principal office of the Developer is located at 1011 Parkview Avenue, Suite A, Redding, CA 96001. The phone number for voice communication with the Developer is (530) 244-0596 and for email transmittal to the Developer is [email protected]. Developer as it is used in this Agreement shall include any permitted nominee, assignee, or successor in interest as herein provided.
1.28 “Development Agreement” or “Agreement” is this agreement which includes this document and the referenced exhibits and attachments to this Agreement, which are all incorporated in this Agreement as if set forth in full in the body of the Agreement. A default of any of the referenced exhibits or attachments shall not be deemed a default of this Agreement.
1.29 “Development Team” shall mean designated representatives from the City and Developer to function as a team to ensure that the Affordable Housing Project is developed in accordance with this Agreement.
1.30 “Effective Date” shall mean the date this Agreement is signed by the City or its designee authorized to sign on behalf of the City.
1.31 “Escrow” is the escrow for the execution and recordation of the Grant Deed and the Security Documents.
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1.32 “Escrow Closing Costs” shall mean the fees, charges and costs identified in Section
4.2 applicable to the Grant Deed and the City Land Loan and City Predevelopment Loan documents.
1.33 “Final Plans” are the complete City-approved set of architectural, structural and civil engineering plans and specifications for the Shasta Lake Downtown Housing Project that include the City’s conditions of approval.
1.34 “Grant Deed” shall mean the grant deed executed by the City recorded in the Official Records of the County of Shasta by Escrow evidencing the transfer of fee title to the City Property to the Developer attached as Exhibit 5.
1.35 “Health and Safety Code (HSC)” shall mean the California Health and Safety Code.
1.36 “Lender” shall mean all holders, including the holder of any construction or any permanent loan with a lien in first position or encumbrance as security for financing on all or any part of the Affordable Housing Property and references to the Affordable Housing Property shall mean that portion of the Affordable Housing Property so encumbered.
1.37 “Low Income Housing Tax Credit (LIHTC) Program” or “Tax Credit Program” shall mean the federal and state Low Income Housing Tax Credit Programs administered by the California Tax Credit Allocation Committee.
1.38 “Memorandum of Development Agreement” is the document attached as Exhibit 6 to be executed by the Developer and City and recorded against the Affordable Housing Property.
1.39 “Notice of Completion” is the document attached as Exhibit 19.
1.40 “Other Financing” shall mean the non-City financing sufficient to cover the remaining costs to complete the Affordable Housing Project pursuant to Section 3.3.
1.41 “Plans” are the Preliminary Plans and/or the Final Plans, or both, as the context requires.
1.42 “Preliminary Plans” are all the necessary plans, documents, and supplemental information to comprise a complete application for the entitlements necessary to develop the Affordable Housing Project, as required by the City.
1.43 “Preliminary Project Budget” shall mean the document attached as Exhibit 17.
1.44 “Project” shall mean the Affordable Housing Project and the Commercial and Retail Component.
1.45 “Project Budget” is the identification of costs for all Affordable Housing Project development activities as required in Section 7.1 of this Agreement. A Preliminary Project Budget is attached as Exhibit 17.
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1.46 “Project Manager” shall mean the City’s designee of a City staff person to coordinate review of the Final Plans, oversee construction progress, verify development progress, approve and process construction draw/disbursement requests and ensure construction compliance pursuant to this Agreement.
1.47 “Promissory Note(s)” or “City Promissory Note(s)” shall mean the promissory note to be executed by Developer, or other party authorized by this Agreement which evidences the City Loans, representative copies of which are attached as Exhibits 7, 9 and 12.
1.48 “Schedule of Performance” is attached as Exhibit 18.
1.49 “Scope of Development” is attached as Exhibit 16.
1.50 “Security Documents” shall mean the following documents related to the Affordable Housing Project: the Deed of Trust; Promissory Note; and the Declaration of Affordability Restrictions.
1.51 “Substantial Change” is a change as described in subsection 6.4.2 of this Agreement.
2. THE AGREEMENT.
2.1 Purpose of the Agreement. The purpose of this Agreement is to further the goals of the City to increase, improve, and preserve affordable housing by assisting the Developer with the development of the Affordable Housing Property and the completion of the Affordable Housing Project in accordance with the Final Plans and this Agreement.
The City represents that the development of the Affordable Housing Property and completion of the Affordable Housing Project, under this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of the City of Shasta Lake and the health, safety, morals and welfare of its residents; for the purpose of community improvement and welfare; and to improve, preserve, and increase the supply of affordable housing. Except for the risks and speculation inherent with respect to real estate development projects, Developer represents and agrees that its development of the Affordable Housing Project under the Agreement is not intended for speculation in land holding.
It is contemplated by the parties that all activities undertaken by the parties will be in accordance with this Agreement and the AHSC Standard Agreements. All attachments and exhibits are hereby incorporated into this Agreement by reference. Notwithstanding anything to the contrary contained herein, in the event of a conflict between the terms of this Agreement and the terms of the AHSC Standard Agreements the parties agree that the terms of the AHSC Standard Agreements shall control.
2.2 Scope of Work. Following the Developer’s acquisition of the Affordable Housing Property, the Developer will construct the Shasta Lake Downtown Housing Project on the Affordable Housing Property in accordance with the Conditions of Approval, the Project Final Plans and this Agreement.
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The specific scope of work to be carried out by the Developer under this Agreement is more particularly described in this Agreement, the Scope of Development, the Final Plans and the AHSC Standard Agreements.
2.3 Term. This Agreement shall commence as of the Effective Date and proceed as required by the Agreement and the Schedule of Performance, and, except for any deed restrictions, covenants running with the land, deed of trust or promissory note, or other agreements or provisions which by their terms survive the term of the Agreement, shall terminate upon the completion of all of the following:
a) Completion of the construction of the Affordable Housing Project in accordance with the Agreement and the Final Plans; and
b) Fulfillment by the parties of their obligations under this Agreement.
3. PROJECT FINANCING.
3.1 City Land Loan. In order to effectuate the completion of the Affordable Housing Project on the Affordable Housing Property by the Developer, the City will sell the City Property to Developer pursuant to the terms of this Agreement for a price equal to the fair market value of the City Property as determined by an Appraisal Report prepared by James G. Palmer Appraisals, Inc. and approved by the City Manager in its reasonable discretion (the “Purchase Price”). The City has agreed to provide the City Land Loan in an amount not to exceed the Purchase Price pursuant to the terms and conditions described in Section 3.1 of this Agreement.
3.1.1 Terms and Conditions. The City Land Loan shall be a Deferred Payment Loan and shall be evidenced by a Promissory Note (City Land Loan Promissory Note) in favor of the City for the full amount of the City Land Loan with all principal and accrued interest due and payable at the expiration of the term. The term of the City Land Loan shall commence upon the date the Grant Deed is recorded and terminate fifty-five (55) years following the recordation of the Certificate of Completion. The City Land Loan Promissory Note shall not bear interest.
The City Land Loan Promissory Note shall be secured by a Deed of Trust recorded on the Affordable Housing Project. The Deed of Trust shall be a lien on the Affordable Housing Project which shall be junior only to City Declaration of Affordability Restrictions, deeds of trust securing the private financing and the AHSC financing described in Section 3.3 herein, and any security documents required by the state and/or federal Low-Income Tax Credit Program, described in Section 3.6 or 3.7 of this Agreement.
The City Land Loan Promissory Note shall not be assumable by the successors and assigns of Developer, or other party authorized by this Agreement without the prior written consent of the City, whereby such consent shall not reasonably be withheld.
3.2 City Additional Financing Terms. Subject to the notice and cure rights set forth in Section 14.1, the full amount of the City Loans, including principal and all accrued interest, shall become immediately due and payable upon the occurrence of any of the following:
a) Developer’s failure to proceed with and complete the Affordable Housing Project in accordance with the Schedule of Performance; or 45 Disposition and Development Agreement Between the
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b) Developer abandons or substantially suspends construction of the Affordable Housing Project for a period of three (3) months after written notice of such abandonment or suspension from the City; or c) Developer fails to utilize the Affordable Housing Property for the Affordable Housing Project within the timeframe set forth in the Schedule of Performance or as authorized in writing; or
d) Developer fails to comply with the affordability covenants set forth in this Agreement and the exhibits to the Agreement; or
e) Other material breach of this Agreement following expiration of applicable notice and cure periods.
3.3 Other Financing. Developer shall obtain private financing, Low-Income Housing Tax Credit (LIHTC) Program financing and other financing, which, when combined with the City Loans shall be sufficient for the completion of the Affordable Housing Project and its operation in conformity with this Agreement. It is understood that the City, the Managing General Partner, ADK and Win River, as co-applicants, have received a financial commitment from the AHSC Program administered by HCD and the SGC. Specifically, HCD awarded AHSC funds that include an affordable housing development loan (AHSC AHD Loan) to assist with the development and construction of the Affordable Housing Project in the amount of Five Million Eight Hundred Forty One Thousand Six Hundred Sixty One and No/100 Dollars ($5,841,661) and Housing Related Infrastructure (HRI), Sustainable Transportation Infrastructure (STI), Active Transportation Program (PGM) and Transportation Related Amenities (TRA) grant funds in the amount of Ten Million Six Hundred Ninety Eight Thousand Five Hundred Ninety Eight and No/100 Dollars ($10,698,598). It is anticipated that the Developer shall complete the processing requirements for the AHSC Program and any other financing on behalf of the Affordable Housing Project and according to the timeline stated in the Schedule of Performance. Developer shall provide to the City evidence of such private and other financing firm commitments no later than twenty-four (24) months from the Effective Date of this Agreement, unless otherwise approved by the City Manager or their designee.
3.3.1 Approval of Other Financing Commitments. Developer shall provide to City for review and approval evidence of a firm and binding commitment for any private financing necessary for the Affordable Housing Project pursuant to the time specified in the Schedule of Performance. Such commitments shall be subject only to reasonable conditions of the Lender necessary to assure the value and security of its loan. Such commitments shall not be subject to conditions which require amendment of this Agreement or other agreements between Developer and City without City approval. Said commitments shall be, in the aggregate, in a total amount sufficient to complete development of the Affordable Housing Project as provided in the Project Budget and to fulfill all other obligations of this Agreement.
3.3.2 City Approval of Private Financing Security Documents. All non-City financing security documents shall be in a form and substance so as to be considered within the convention set by generally accepted commercial lending practices and shall be acceptable to the City and their legal counsel, which acceptance shall not be unreasonably withheld, conditioned or delayed. Any non-City financing security documents for the Affordable Housing Project shall comply with this Agreement.
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3.4 The City AHSC Conduit Loan(s). The AHSC Program STI, TRA and HRI Grant Funds will be granted by HCD to the City and the City will loan a portion of such grant funds, not to exceed Ten Million Four Hundred Twenty Seven Thousand Seven Hundred Fifty and No/100 Dollars ($10,427,750) in one or more loans (the City AHSC Conduit Loan(s)) to the Developer for the purpose of completing infrastructure improvements and other amenities in accordance with the Conditions of Approval and the AHSC Standard Agreements.
3.4.1 The final amount of the City AHSC Conduit Loan(s) will be determined by the City Manager based on the Project Budget and in accordance with the AHSC Standard Agreement. The AHSC Program Grant and Loan Funds are subject to the terms and conditions set forth in the HCD Standard Agreements that will be executed following the award of the LIHTC Program financing and the completion of the threshold requirements associated with the AHSC Program. The AHSC funding will be disbursed in accordance with the HCD Standard Agreements.
3.4.2 The City AHSC Conduit Loan(s) will be Deferred Payment Loans and will be evidenced by one or more Promissory Notes (City AHSC Conduit Loan Promissory Note(s)) with all principal and accrued interest due and payable at the expiration of the term. The AHSC Conduit Loan(s) will be secured by deeds of trust (the City AHSC Conduit Loan Deed(s) of Trust). The terms of the City AHSC Conduit Loan(s) shall commence upon the date the applicable AHSC Conduit Loan Deed of Trust is recorded and terminate fifty-five (55) years following the recordation of the Certificate of Completion. The City AHSC Conduit Loan Promissory Note(s) shall not bear interest.
Forms of the City AHSC Conduit Loan Agreement, City AHSC Conduit Loan Promissory Note and City AHSC Conduit Loan Deed of Trust are attached to this Agreement as Exhibits 11, 12 and 13, respectively.
3.4.3 The City AHSC Conduit Loan Promissory Notes and City AHSC Conduit Loan Deeds of Trust shall be executed and the City AHSC Conduit Loan Deed(s) of Trust recorded on or before Developer commences construction of the Affordable Housing Project. The City AHSC Conduit Loans with be disbursed pursuant to the AHSC Standard Agreements.
3.5 The City Predevelopment Loan. The City Predevelopment Loan will be to the Developer in an amount not-to-exceed One Million, Five Hundred Thousand and No/100 Dollars ($1,500,000) to finance eligible predevelopment costs to be paid with AHSC HRI, STI or TRA grant funds related to the construction for the Shasta Lake Downtown Housing Project. The City Predevelopment Loan shall not bear interest. City will disburse City Predevelopment Loan funds as referenced in Section 7.2 to Developer at such times and in such amounts as Developer may request but at no time shall the outstanding principal balance of the City Predevelopment Loan exceed One Million Five Hundred Thousand and No/100 Dollars ($1,500,000). Promptly upon disbursing City Predevelopment Loan funds to the Developer City shall, subject to the AHSC Standard Agreements, request reimbursement from HCD for such costs from AHSC HRI, STI and/or TRA grant funds. Any such reimbursement received from the City will be credited as repayment of the City Predevelopment Loan. Any outstanding principal balance of the City Predevelopment Loan will be repaid in full upon closing of the City AHSC Conduit Loan(s).
3.6 Limitation on Encumbrances. Prior to the completion of the Affordable Housing Project, Developer shall not engage in any financing or any other transaction creating any encumbrance or lien on the Affordable Housing Property, whether by express agreement or 47 Disposition and Development Agreement Between the
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operation of law, except to obtain funds to be used only for actual costs of the Affordable Housing Project and other expenditures necessary and appropriate to develop the Affordable Housing Property in accordance with this Agreement. Developer shall notify the City in advance of any proposed financing to be secured by the Affordable Housing Property. In any event, Developer shall promptly notify City of any encumbrance or lien that has been created on or attached to the Affordable Housing Property. If Developer is not in default of this Agreement, and if City approves all of the financing documents, including the terms of any subordination agreement, which approval shall not be unreasonably withheld, City will subordinate its Deed of Trust to the lien of a construction deed of trust, permanent deed of trust and the AHSC loan deed of trust, for such financing.
3.7 Provisional Refinancing. Developer may, without City consent, refinance any indebtedness secured by an encumbrance which is superior to the City’s Deed of Trust, provided that the refinanced encumbrance shall have the following characteristics:
3.7.1 Amount. The refinanced encumbrance shall not secure indebtedness in a dollar amount greater than the balance owed on the indebtedness plus reasonable costs related to the refinancing to which the City’s interest was originally subordinated, unless otherwise approved by the City Manager.
3.7.2 Debt Service. The debt service of the refinanced indebtedness shall be an amount which does not exceed the amount of the debt service of the indebtedness to which the City’s interest was originally subordinated.
3.7.3 Intentionally omitted.
3.7.4 Subordination Agreement. Subject to City approval, which approval shall not be unreasonably withheld, upon request, City shall execute any document reasonably required to evidence the subordination of the deeds of trust securing the City Loans to a permitted indebtedness or refinancing. City shall allow the Declaration of Affordability Restrictions to be recorded on the Affordable Housing Project junior only to 1) the lien of the construction lender securing funds for construction of the Affordable Housing Project; 2) the lien of a permanent loan so long as the permanent loan is for an amount not greater than the amount due and owing by the Developer pursuant to the construction loan plus customary fees and costs payable for the benefit of the permanent lender in connection with the permanent loan and upon satisfaction and release and reconveyance of the deed of trust securing repayment of the construction loan; 3) such regulatory agreement as may be required by the LIHTC Program; and 4) the lien of the AHSC AHD Loan. In the event a subordination agreement meets these requirements, the City Manager shall be authorized to execute the subordination agreement on behalf of the City without additional authorization by the City Council.
3.8 Assurances to Lenders. City and Developer shall in good faith consider making such reasonable modifications to this Agreement and executing such further instruments and agreements as a Lender secured by an interest in the Affordable Housing Property may reasonably request to acknowledge and protect such Lender’s rights, provided such modifications, instruments and agreements do not materially or adversely affect any party’s rights or obligations under this Agreement and provided such modifications, instruments, and agreements serve a material economic purpose. Any such modifications may be approved by the City Manager who shall also have authority to enter into any instruments or agreements related to such modifications. In conjunction with any financing, City agrees to execute, and deliver to Developer, when requested 48 Disposition and Development Agreement Between the
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by Developer, an Estoppel Certificate regarding the status of this Agreement. This certificate will be in substantially the same form as it appears in Exhibit 15 and delivered to the Developer within 10 business days after receipt of the written request for the certificate.
3.9 No Reimbursement. Except as expressly provided in this Agreement, no person shall have the right of reimbursement from the City for any funds expended by them for the Affordable Housing Project. This provision does not preclude any person from receiving reimbursement from persons other than the City.
4. TRANSFER OF CITY PROPERTY; DISBURSEMENT OF CITY ASSISTANCE, ESCROW; RECORDATION OF SECURITY DOCUMENTS.
4.1 Transfer of City Property and Closing of City Land Loan. Upon execution and recordation of the Grant Deed and all recorded related to the City Land Loan and City Predevelopment Loan, a portion of the proceeds of the City Predevelopment Loan shall be disbursed to Developer by the City for payment of authorized title and escrow costs associated with the escrow described in Section 4.2. Following the disbursement of these funds to escrow, the balance remaining of the City Predevelopment Loan may be utilized by Developer as described in Section 3.5.
4.2 Escrow. Within ten (10) Days of the Effective Date, Developer agrees to establish an escrow account with Placer Title Company (“Escrow Agent”). This Agreement constitutes the joint escrow instructions of the City and Developer with respect to the transfer of the City Property to Developer and the recordation of the Grant Deed, the City Declaration of Affordability Restrictions, the Deed(s) of Trust and any documents required to be recorded in regard to the City Land Loan and/or the City Predevelopment Loan. A copy of this Agreement shall be delivered to the Escrow Agent. The City and Developer shall provide the Escrow Agent with such additional escrow instructions as shall be necessary and consistent with this Agreement. The Escrow Agent is hereby empowered to act under this Agreement, and upon indicating its acceptance of the provisions of this Section 4.2, inclusive, in writing, delivered to the City and Developer within five (5) Days after receipt of this Agreement, shall carry out its duties as Escrow Agent hereunder.
Close of escrow shall occur upon the date upon which all closing conditions have been satisfied.
The Escrow Agent is authorized to pay and charge the Escrow Account for the following fees, charges and costs (Escrow Closing Costs):
a) the escrow fee;
b) recording fees, if any;
c) premiums for a standard ALTA owner’s title insurance policy and any endorsements issued in connection therewith; and
d) premiums for standard ALTA title insurance policies for the City Loans and any endorsements issued in connection therewith.
4.2.1 Before such payments are made, the Escrow Agent shall notify the City and the Developer of the amount of the Escrow Closing Costs. Payment of the agreed upon Escrow Closing Costs shall be made from City Predevelopment Loan proceeds pursuant to Section 4.1.
The amount of City Predevelopment Loan proceeds disbursed for the Escrow Closing Costs shall be deducted from the proceeds of the City Predevelopment Loan described in Section 3.5 of this Agreement. In addition, the Escrow Agent is authorized to:
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a) Deliver any documents to the parties entitled thereto when the conditions of the escrow have been fulfilled by the City and the Developer. b) Record any instruments delivered through the escrow, if necessary or proper, in accordance with the terms and provisions of this Agreement.
If the escrow is not in condition to close within the timeframe stated above, either party who then shall have fully performed the acts to be performed may, in writing, terminate this Agreement in the manner set forth in Section 14.2 hereof, and demand return of its money, papers, or documents. Thereupon, all obligations and liabilities of the parties under this Agreement shall cease and terminate in the manner set forth in Section 14.2 hereof. If neither the City nor the Developer have fully performed the acts to be performed before the scheduled closing date, no termination or demand for return shall be recognized until ten (10) Days after the Escrow Agent shall have mailed copies of such demand to the other party or parties at the address of its or their principal place of business. If any objections are raised within the ten (10) Day period, the Escrow Agent is authorized to hold all money, papers and documents until instructed in writing by all parties to this Agreement or, upon failure thereof, by a court of competent jurisdiction. If no such demands are made, the escrow shall be closed as soon as possible. Nothing in this Section 4.2 shall be construed to impair or affect the rights or obligations of the City or the Developer to specific performance.
Any amendment of these escrow instructions shall be in writing and signed by the City and the Developer. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment.
All communications from the Escrow Agent to the City or the Developer shall be directed to the addresses and in the manner established in Section 15.9 of this Agreement.
All funds received in this escrow shall be deposited by the Escrow Agent with other escrow funds of the Escrow Agent in a general escrow account or accounts with any state or national bank doing business in the state of California. Such funds may be transferred to any other such general escrow account or accounts. All disbursements shall be made by check of the Escrow Agent. All adjustments shall be made on the basis of a thirty (30) day month.
4.2.2 Execution and Delivery of Grant Deed, Memorandum of Agreement and Declaration of Affordability Restrictions; and Recordation of Grant Deed, Memorandum and Declaration. Prior to the close of escrow, the City shall deliver the executed Grant Deed to Escrow Agent and the City and Developer, or other party authorized by this Agreement shall deliver the executed Memorandum of Agreement and Declaration of Affordability Restrictions to Escrow Agent. Concurrent with close of escrow, Escrow Agent shall file the Grant Deed, Memorandum of Agreement and Declaration of Affordability Restrictions for recordation on the Affordable Housing Property with the Office of the Recorder of the County of Shasta. Said Grant Deed, Memorandum and Declaration shall be recorded prior to the recordation of any deed of trust or other encumbrance securing private financing and the AHSC financing, and shall have priority over said encumbrance, except as authorized by sections 3.6 and 3.7.
4.2.3 Execution and Deposit of City Land Loan Promissory Note, City Land Loan Deed of Trust, City Predevelopment Loan Promissory Note and City Predevelopment Loan Deed of Trust; Recordation of Deeds. Prior to the close of escrow, the Developer, or other party authorized by this Agreement shall execute the promissory notes and the deeds of trust for the City 50 Disposition and Development Agreement Between the
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Land Loan and City Predevelopment Loan and deposit the same with the Escrow Agent. With close of escrow, the Escrow Agent shall file the deeds of trust for recordation on the Affordable Housing Property with the Office of the Recorder of the County of Shasta. The deeds of trust shall be liens against the Affordable Housing Property which shall be junior only to deeds of trust securing the private financing, the AHSC financing, and any documents required by the state and/or federal Tax Credit Program, described in Sections 3.6 and 3.7 of this Agreement.
4.2.4 Title Insurance. Concurrently with the recordation of the documents described in Sections 4.2.2 and 4.2.3 on the Affordable Housing Property, the Escrow Agent shall issue and deliver to the City one policy of ALTA lender’s title insurance in the amount of the City Land Loan, the cost of which shall be paid pursuant to Section 4.2 of this Agreement. Said policy shall show title to the Affordable Housing Property vested in Developer, or other party authorized by this Agreement and insure City as beneficiary. The Developer may elect to obtain an ALTA Owner’s policy of title insurance. The additional cost of such policy shall be paid by the Developer.
5. DISPOSITION OF COMMERCIAL AND RETAIL COMPONENT. On or before completion of construction of the Shasta Lake Downtown Housing Project Developer will cause the Affordable Housing Project and Commercial and Retail Component to be separate legal parcels. Upon the repayment of the construction loan obtained to finance construction of the Shasta Lake Downtown Housing Project and closing of the permanent loan obtained for the Affordable Housing Project Developer will sell the Commercial and Retail Component to ADK for the price shown in the Project Budget. Upon such transfer, the City shall release any liens encumbering the Commercial and Retail Component including without limitation the liens of the City Declaration of Affordability Restrictions and the Deed(s) of Trust securing the City Land Loan, the City Predevelopment Loan and/or any City AHSC Conduit Loans.
6. PREPARATION OF PROJECT PLANS AND RELATED DOCUMENTS.
6.1 Project Manager. Subject to the terms of this Agreement, the City may designate a Project Manager who shall, in addition to other responsibilities under this Agreement, coordinate with City departments to receive approvals related to architectural and site planning review of all plans and drawings, including, but not limited to complete structural and engineering plans, and landscape plans associated with the Affordable Housing Project as well as any changes therein.
6.2 Preparation of Project Preliminary Plans. In accordance with the timeline set forth in the Schedule of Performance, the Developer shall prepare the Preliminary Plans. The Preliminary Plans shall include all construction plans, drawings, specifications and other documents required to obtain the required building permits, encroachment permits and grading permits for the construction of the Affordable Housing Project. The Preliminary Plans shall conform in all material aspects with the Scope of Development, unless otherwise approved by the City Development Services Department, City Public Works Department, and Project Manager.
The Project Manager and the Developer shall hold regular progress meetings as necessary to coordinate the preparation, submission and review of the Preliminary Plans. The Project Manager and the Developer shall communicate and consult informally to ensure that the formal submittal of all or any part of the Preliminary Plans to the City will receive prompt consideration.
The plans shall be submitted and reviewed at the end of Design Development, 50% 51 Disposition and Development Agreement Between the
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Construction Documents and 90% Construction Documents. The project manager will distribute the plans to City departments for review and comments. Developer will need to submit final plans to applicable approving agencies for approval and/or permits. The developer and their consultants shall prepare a quality assurance plan and quality control plan (QA/QC) and process in effect to assist QA/QC during the entire time work is in effect.
The Developer has total responsibility for the accuracy and completeness of the plans, calculations, related documents, and all other work furnished and shall meet that responsibility through the implementation of a QA/QC Plan. The Developer’s QA/QC Plan shall remain in effect throughout the entire project and, at a minimum, shall ensure that all work is completed in accordance with good architecture/engineering design practice and that it meets the standards set forth herein. Specifically: Evidence that the QA/QC Plan is functioning may be periodically confirmed by the City. Deliverables that do not appear to have been through the Developer’s QA/QC and Peer Review process will be returned to Developer without review by the City.
6.3 Review of Preliminary Plans. Developer shall provide the Project Manager with a complete set of Plans prior to the initial submittal of the Plans to the City’s Development Services Department.
6.4 Review of Substantial Changes to Final Plans.
6.4.1 City Review. Notwithstanding the foregoing, any Substantial Change in the Final Plans is subject to City review. If the Developer desires to make a Substantial Change in the Final Plans, the Developer shall submit such proposed change, in writing, to the Project Manager for City review.
6.4.2 Substantial Change. A Substantial Change in the Final Plans shall mean any of the following changes, with respect to the Affordable Housing Project:
(a) Changes in size or design resulting in an increase or decrease of greater than ten percent (10%) of square footage of a unit or an increase or decrease in the number of bedrooms.
(b) Changes in use or the mix of Units.
(c) Changes in the number of Units.
(d) Changes in use of exterior finishing, or landscape materials affecting architectural appearance or functional use and operation of the Affordable Housing Project.
(e) Changes in size or placement of public service facilities; or changes in general pedestrian or vehicular circulation in, around or through the public areas of the Affordable Housing Project.
(f) Any changes required by or requiring approval of the City, the County of Shasta, or any state or federal board, body, or commission. (g) Any change which would preclude or materially reduce the ability to use the Affordable Housing Project as set forth in the Final Plans and this Agreement.
6.5 Purpose of Review. Project Manager’s review of Final Plans and any Substantial Changes is not an assurance of the adequacy or correctness of the Plans. Project Manager shall coordinate with City departments to: a) assure that the Final Plans conform to the Scope of Development and the requirements of this Agreement; and b) assure that City funds which may be 52 Disposition and Development Agreement Between the
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obligated under this Agreement are used as intended by the City.
6.5.1 Misrepresentation. If Project Manager’s review of the Final Plans or the changes to the Final Plans delivered to the City is based upon a willful and material misrepresentation of Developer made in conjunction with the Final Plans or changes to the Final Plans, nothing in this Section shall be construed to preclude or limit the rights or claims of the City with regard to such misrepresentations, including any rights the City may have to rescind such approval.
6.6 Record Drawings or As-built drawings. Record Drawings or As-built drawings of developments shall be submitted to Project Manager no later than 90 days after certificate of completion has been issued by the City’s building official. Record drawings shall be Portable Document Format (.PDF) file(s) of final plans complete with final signatures. Delivery shall be either via USB flash drive or online file transfer and computer aided drafting files (.dwg) of record drawings.
7. DEVELOPMENT OF THE AFFORDABLE HOUSING PROJECT.
7.1 Project Budget. At the times called for in the Schedule of Performance, the Developer shall provide a complete final Project Budget in a form and with specificity reasonably satisfactory to the Project Manager, including all “hard” and “soft” costs for the Affordable Housing Project and reflecting, as possible, executed contracts. The final Project Budget will include a final construction bid from the Project’s Contractor. All Affordable Housing Project costs that are not part of the Contractor’s construction bid shall be listed separately as line items in the final Project Budget. Such final Project Budget shall be substantially in conformance with the Preliminary Project Budget. Reductions in total Affordable Housing Project cost that occur as a result of competitive bid solicitation by the Contractor are encouraged and shall be considered substantially in conformance with the Preliminary Project Budget.
7.2 Disbursement of Remaining Proceeds of City Predevelopment Loan. The parties agree that from and after the close of escrow described in Section 4.2, the City Predevelopment Loan will be disbursed pursuant to this Section 7.2. All disbursements shall be based upon predevelopment activities that are in accordance with the Project Budget supported by invoice documentation that demonstrates that the use of the proceeds is directly related to predevelopment costs of the Affordable Housing Project. Such documentation will be subject to review and approval for payment by the Project Manager. Developer agrees to provide such documentation as may be reasonably determined by the Project Manager as necessary. City agrees that the Project Manager will approve or disapprove any request for disbursement of City Predevelopment Loan proceeds within ten (10) business days of receipt of such request. If the Project Manager approves a request for City Predevelopment Loan proceeds such proceeds will be disbursed to Developer concurrently with the Project Manager’s approval. Any disapproval of a request for disbursement of City Predevelopment Loan proceeds shall include an explanation of the reasons for such disapproval.
7.3 Developer Fee. It is expressly agreed and acknowledged that the parties mutually are entering into this Agreement (including without limitation all attachments and exhibits hereto) for the purpose of the development and operation of affordable housing. To that end, the Developer is authorized to charge to the Affordable Housing Project budget a developer fee not to exceed the maximum amount allowable under the Tax Credit Program. Developer agrees that, if necessary to facilitate the construction of the Affordable Housing Project, payment of all or a 53 Disposition and Development Agreement Between the
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portion of the developer fee shall be deferred during construction of the Project. In the event that any balance is owed to the Developer after all construction costs savings are realized and funds from other Affordable Housing Project financing sources have been disbursed, such remaining balance may be repaid to the Developer as an operating expense of the Affordable Housing Project.
Any developer fee paid to Developer may be utilized by the Developer in any manner permitted by law.
7.4 Procurement. The Developer shall coordinate the solicitation of bids with the General Contractor based upon the Final Plans. Developer and General Contractor shall endeavor where reasonably practical obtain a minimum of three bids per subcontractor and, to the reasonable extent possible, utilize local suppliers and subcontractors from within Shasta County. The General Contractor will comply with applicable procurement requirements in 24 CFR Part 85 and any referenced procurement requirements outlined in the AHSC Standard Agreements and any other Project financing with procurement requirements. The Project Manager will coordinate with the Developer and provide the required documents to complete the bid procurement process. The Project Manager will complete a cost analysis and ensure that the bids are cost reasonable and conform to the proposed budget. The Project Manager’s cost analysis may include initial subcontract bids, contract modifications and change orders.
The final construction bid from the Contractor must have all non-construction categories, including, but not limited to, general conditions; profit and overhead; and permits, clearly identified as separate line items.
7.5 Construction. Developer shall construct the Affordable Housing Project according to the requirements established in this Agreement, including but not limited to the Scope of Development, Schedule of Performance and the Final Plans. In the event that the cost of construction of the Affordable Housing Project, or any part of the Affordable Housing Project exceeds the costs projected by Developer, Developer shall, nevertheless, bear the responsibility to complete, at Developer’s cost and without right of contribution from City, the construction of the Affordable Housing Project in accordance with this Agreement. The parties agree that such obligations of Developer shall be covenants running with the land and that they shall, in any event, and without regard to technical classification or designation, be to the fullest extent permitted by law and equity, binding for the benefit of the City and enforceable by the City against the Developer, its successors and assigns. These covenants shall terminate upon the City issuing a Certificate of Completion for the Affordable Housing Project.
7.6 Substantial Changes. Developer covenants and agrees that Developer shall not make or permit to be made any construction of the Affordable Housing Project which incorporates a Substantial Change in the Final Plans, as described in subsection 6.5.2, without City review of such changes as provided in that section.
7.7 Changes During Construction. Developer shall, prior to their occurrence, notify the Project Manager of all Substantial Changes (as that term is defined in subsection 6.4.2) in the construction as well as changes which result in a material net increase in cost or may extend the period of construction beyond the Completion Date. To the extent feasible, the Developer agrees to submit all proposed Change Orders to the Project Manager for review prior to implementation.
7.8 Contractor Guaranty. As part of the construction contract for the Affordable Housing Project, Developer shall cause Contractor to guaranty its performance in connection with the development of the Affordable Housing Project. Without limiting the generality of the 54 Disposition and Development Agreement Between the
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foregoing, Developer guarantees that: (a) construction of the Affordable Housing Project shall commence and be completed within the time limits set forth in the Loan Documents; (b) the Project shall be constructed and completed in accordance with the provisions of the Loan Documents; (c) the Affordable Housing Project shall be constructed and completed free and clear of mechanic's liens, materialman's liens and equitable liens; (d) all costs of constructing the Affordable Housing Project shall be paid when due; and (e) the Loan proceeds shall remain available for disbursement free and clear of stop notices. If the Loan Documents or other financing terms and conditions related to the construction of the Affordable Housing Project require the Contractor to obtain payment and performance bonds, the Contractor may procure payment and performance bonds in favor of the City for one hundred percent (100%) of the face amount of the construction contract price. If Contractor procures a payment and performance bond, all bonds shall be issued by a corporate surety authorized by the State of California, all payment and performance bonds are to be submitted to the Project Manager for City Attorney's approval, which shall be a condition precedent to the Developer starting construction and such approval shall not be unreasonably withheld.
7.9 No Construction Over Utility Easements. Developer shall not construct any of the Affordable Housing Project on, over, or within the boundary lines of any easement for public utilities on the Affordable Housing Property, unless such construction is provided for in such easement or has been approved by the beneficiary of the easement.
7.10 Conditions Precedent to Construction. The Developer shall not begin construction until the following conditions precedent have been satisfied or waived by the City:
7.10.1 Escrow has closed in accordance with the terms of this Agreement;
7.10.2 The Developer has obtained binding commitments for all financing required for the completion and operation of the Affordable Housing Project and closed on all such financing necessary for construction of the Affordable Housing Project.
7.10.3 The Developer has complied with the Contractor Guaranty provision set forth in this Section 7.8.
7.10.4 The Developer has obtained all consents, approvals, entitlements, and permits required for construction, including any and all environmental approvals and/or clearances required by any Lender;
7.10.5 The City has reviewed the construction bid documents, construction contract and final selection of the Contractor for the Affordable Housing Project.
7.10.6 The Developer has obtained and paid the proper building permits (including but not limited to impact fees, grading permit, demolition, etc) from the City;
7.10.7 The Developer has requested a notice to proceed from the City, and the City has notified the Developer in writing that it may proceed with construction;
7.10.8 The Developer has issued a notice to proceed under the executed construction contract, if any; and
7.10.9 The Developer has cured all existing breaches of this Agreement to the satisfaction of the City.
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7.11 Commencement and Completion of Construction. Developer shall promptly begin and thereafter diligently pursue to complete the construction of the Affordable Housing Project and the development of the Affordable Housing Property in accordance with the provisions of this Agreement and at the times specified in the Schedule of Performance; and complete construction not later than the date set forth in the Schedule of Performance, unless otherwise approved by the City. Time is of the essence.
7.12 Reports. During the period of construction, the Developer shall submit to the City a written report of the progress of the work when reasonably requested by the City, but not more often than once each month. The report shall be in such form and detail as may reasonably be required by the City and shall include a reasonable number of construction photographs taken since the last report if previously requested by the City.
7.13 Local, State and Federal Laws. The Developer shall carry out the construction of the Affordable Housing Project in conformity with all applicable laws, including all applicable federal and state labor standards.
7.14 Anti-Discrimination During Construction. The Developer for itself and its successors and assigns, agrees that the following provisions shall apply to, and be contained in all contracts and subcontracts for the construction of the Affordable Housing Project. (For purposes of this Section 7.14 Developer shall also mean Contractor or Subcontractor.)
7.14.1 Employment. The Developer shall not discriminate against any employee or applicant for employment because of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin. The Developer shall ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin. Such action shall include, but not limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the City setting forth the provisions of this nondiscrimination clause.
7.14.2 Advertising. The Developer will, in all solicitations or advertisements for employees placed by or on behalf of the Developer, state that all qualified applicants will receive consideration for employment without regard to race, color, creed, religion, sex, marital status, or national origin.
7.15 City Access to the Affordable Housing Property. Developer shall permit City representatives’ access, without charge, to the entire Affordable Housing Property at any time and for any purpose which City reasonably considers necessary to carry out its obligations and protect its interests under this Agreement. Purposes for City entry may include, without limitation, inspection of all work being performed in connection with the construction of the Affordable Housing Project. Any City personnel entering on the Affordable Housing Property shall register immediately at Developer’s construction office, shall be escorted by Developer’s designee and shall wear proper clothing and safety equipment. City assumes all liability and responsibility for failure of its representatives to comply with such requirements and for any injury to person or damage to property arising out of or related to the presence of City personnel on the Affordable Housing Property. At Developer’s request, City shall provide evidence that such representatives are adequately insured.
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7.16 Notification of Contractors, Architects and Engineers. Developer shall notify its Affordable Housing Project Contractors, architects and engineers in writing of the requirements of this Agreement. Developer shall include, where applicable, the provisions of this Agreement in contracts and subcontracts for the Affordable Housing Project, and Developer shall enforce such provisions.
7.17 Supervision of the Work. Developer shall be solely responsible for monitoring all construction, ensuring that the construction is performed in a workmanlike manner, and enforcing the terms of this Agreement and the construction contracts. City inspections of construction are made solely for assuring Developer’s performance under this Agreement and protecting City’s security interest in the Affordable Housing Property.
7.18 Certificate of Completion. After the Final Certificate of Occupancy has been issued by the City’s Building Division and the Project Manager has determined that the Developer has completed the Affordable Housing Project in accordance with Developer’s obligations under this Agreement, the Project Manager will coordinate with the Developer to execute and record a Notice of Completion. Following the Notice of Completion 30-Day lien period, the City will furnish the Developer with a Certificate of Completion certifying such completion. Such certification shall be a conclusive determination of satisfaction and termination of the agreements in the Agreement with respect to the obligations of the Developer to construct the Affordable Housing Project and of the dates for the commencement and completion of construction, subject to any qualifications or limitations stated in such certification. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any governmental requirements other than City or any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance all or any part of the Affordable Housing Project.
7.18.1 Refusal to Issue. If the City shall refuse or fail to provide a Certificate of Completion, the City shall, within five (5)10 Days after written request by the Developer, provide the Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Affordable Housing Project in accordance with the provisions of the Agreement, or is otherwise in default, and what measure or acts it will be necessary, in the opinion of the City, for the Developer to take or perform in order to obtain such certification. If the City wrongfully refuses to issue a Certificate of Completion, or upon passage of the five (5) business day period, Developer may seek a writ or order compelling City to issue the Certificate.
7.19 AHD Photovoltaic System. Developer shall, at its sole expense, develop and construct the AHD Photovoltaic System. Developer shall submit its design of the AHD Photovoltaic System to the City for evaluation through the City’s applicable review process, including the Electric Department application for interconnection of customer-owned generation.
All applicable rules, regulations, and requirements shall apply, including those of parties to which the City’s electric grid is interconnected. Developer shall maintain compliance with applicable City policies that govern renewable electrical generation facilities on customer premises and shall be subject to electric rates and rate structures that correspond to its assigned rate class, as they may be amended from time to time. The owner of the renewable electrical generation equipment shall be responsible for the cost of operating and maintaining the equipment.
The AHD Photovoltaic System is intended to satisfy the applicable requirements contained in the AHSC Standard Agreements, including without limitation the requirement to achieve “zero net energy,” which are defined in State regulation, including the Building Energy Efficiency 57 Disposition and Development Agreement Between the
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Standards - Title 24 (“Title 24”). A system built to a size, measured in kilowatts direct current (“kWDC”), as determined by Title 24 shall be considered, by definition, a “zero net energy” project for the purpose of this agreement, provided that all other related conditions of the Title 24 solar mandates are satisfied. If the applicable AHSC grant language defines “zero net energy” differently than Title 24, the AHD Photovoltaic System shall be sized to the smallest system size that satisfies both Title 24 and the AHSC grant requirement conditions.
Developer shall first make all reasonable efforts to maximize use of area within the Shasta Lake Downtown Housing Project footprint for the AHD Photovoltaic System. To the extent the AHD Photovoltaic System cannot be fully constructed in said footprint, after all reasonable efforts are expended, the City and Developer hereby agree to cooperating in identifying and engaging alternate or additional sites for the portion of the AHD Photovoltaic System that cannot be located on the Shasta Lake Downtown Housing Project footprint. Developer and City agree that any costs incurred by the City for the development and construction of the AHD Photovoltaic System be facilitated through an impact fee.
Notwithstanding the foregoing in this section, City expressly reserves the right to revise selection of City owned property that may be used for the purposes described above without obligation or liability to the Developer.
8. USE OF AFFORDABLE HOUSING PROJECT PROPERTY
8.1 Uses. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Affordable Housing Property, that during construction and through the Affordability Period the Developer, its successors and assigns, shall devote, use, operate, and maintain the Affordable Housing Property in accordance with the City Declaration of Affordability Restrictions and this Agreement. All uses conducted on the Affordable Housing Property, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to all applicable provisions of the City of Shasta Lake Municipal Code, and any restrictions of record or any of the recorded documents against the Affordable Housing Property.
8.2 Affordable Housing.
8.2.1 Number and Type of Units; Income Eligibility. The Affordable Housing Project includes 49 residential units, of which, 48 are the Affordable Units and one is a marketrate manager’s unit. The Developer agrees to make the Affordable Units available to and restrict occupancy to income-qualifying households with incomes not greater than 60 percent of the AMI.
The Affordable Units will consist of one-bedroom, two-bedroom and three-bedroom units pursuant to this Agreement and the Final Plans. All of the Affordable Units shall be subject to rent limitations as required by the LIHTC Program and the City Declaration of Affordability Restrictions, as applicable.
8.2.2 Affordability Restrictions. The City and Developer will enter into a separate and binding City Declaration of Affordability Restrictions in the form set forth in Exhibit
14. The City and the Developer shall each execute the City Declaration of Affordability Restrictions and submit it to the Escrow Agent for recording against the Affordable Housing Property prior to or simultaneously with the close of escrow as described in Section 4.2 of this Agreement.
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The covenants contained in the City Declaration of Affordability Restrictions shall remain in effect throughout its Affordability Periods, and issuance of a Notice of Completion by the City or repayment of the City Loans by the Developer shall not affect the Developer’s obligations the City Declaration of Affordability Restrictions.
If there is any conflict between this Agreement, the City Declaration of Affordability Restrictions, the AHSC Program requirements or the LIHTC Program requirements with regard to rents as outlined in Section 8.2 and this Agreement, the more restrictive requirements shall control, and the Developer’s compliance therewith shall not be a default hereunder.
8.2.3 Monitoring. The Developer, its designee, or successor shall prepare and submit a certification report annually to the City during the Affordability Period. The report shall identify each Affordable Unit, the rental rate, and the income and household size of the occupants, as well as any other project information reasonably requested by the City. The required income information shall be supplied by the tenant in the form of source documentation kept at the Developer’s office and shall be available for City review at the City’s request.
Annually, during the Affordability Period, the Developer, its designee, or successor shall cooperate fully with the City to schedule at a mutually convenient time, an annual on-site inspection by the City of the Affordable Units and a file record review of the tenant source documentation referenced above.
8.3 Management and Maintenance. The Developer shall manage and maintain, or cause to be managed and maintained, the Affordable Housing Project. The Developer shall maintain the Affordable Housing Property in good condition throughout the Affordability Period.
The Developer shall keep parking areas, lighting fixtures, trash enclosures, common areas and all areas which can be seen from adjacent streets, free from any accumulation of debris or waste materials by regularly scheduled maintenance. The Developer shall maintain the common, parking, and planted areas and all landscaping, in accordance with the landscape plan, for the term of the Affordability Period. Maintenance shall include, but not be limited to asphalt maintenance, watering, weeding, mowing, cultivating, pruning, staking and tying, trash pick-up and removal, and repairing any damage caused by pedestrian or vehicle encroachment into the planting and/or turf areas.
If, at any time, the Developer fails to maintain such areas in the manner required pursuant to this Agreement, and said condition is not corrected within the time set forth in Section 14.1 upon written notice by the City pursuant to Section 15.9 of this Agreement, the City may, but shall not be obligated to, perform the necessary maintenance and the Developer shall pay such costs as are reasonably incurred for such maintenance, together with interest that accrues at three percent (3%) per annum until full payment is made to the City. The monies expended by the City shall become a lien against the Affordable Housing Property and the Developer hereby consents to the recordation of such lien without prior notice by City to Developer. Said lien shall be junior and subordinate to deeds of trust for financing or refinancing of the Affordable Housing Project as allowed pursuant to this Agreement.
Notwithstanding the above, the City reserves for itself the right to exercise any and all remedies available to it within the City of Shasta Lake Municipal Code, under this Agreement, and the Deed of Trust securing the City’s rights under this Agreement. 59 Disposition and Development Agreement Between the
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9. COVENANTS REGARDING USE AND OPERATION OF THE AFFORDABLE HOUSING PROJECT AND PROPERTY.
The Developer covenants and agrees for itself, its successors, its assigns and every successor-in-interest to all or any part of the Affordable Housing Property that the Developer, such successors and such assignees shall act as follows:
9.1 Nondiscrimination. Developer, its successors and assigns, shall not discriminate on the basis of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, lease or rental or in the use or occupancy of the Affordable Housing Property and the Affordable Housing Project.
9.2 Fair Housing. The Fair Housing Act (42 U.S.C. 3600, et seq.) prohibits discrimination in the sale, rental, and financing of housing because of race, color, religion, sex, handicap, familial status, or national origin. Section 804(ca), as amended, makes it unlawful to make, print, publish, or cause to be made, printed or published, any notice, statement, or advertisement, with respect to the sale or rental of a dwelling, that indicates any preference, limitation, or discrimination because of race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.
All advertising of the Units shall contain an equal housing opportunity logotype, statement, or slogan as a means of educating the home-seeking public that the property is available to all persons regardless of race, color, religion, sex, national origin, familial status, or disability.
A Fair Housing poster (Exhibit 21) must be prominently displayed at rental offices and project sites from the beginning of construction through occupancy, or in front of the existing multi-family building. The Fair Housing poster shall be 11 inches by 14 inches (24 CFR 110.25). A failure to display a Fair Housing poster as required shall be deemed prima facie evidence of a discriminatory housing practice (24 CFR Part 110.30).
9.3 Section 504. Developer shall comply fully with 24 CFR Part 8 Section 504 that provides that no qualified individual with a disability shall, only by reason of his or her disability, be excluded from the participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving Federal financial assistance.
9.4 Payment of Taxes, Assessments, Encumbrances and Liens. The Developer shall pay prior to delinquency all real estate taxes and assessments assessed and levied on the Affordable Housing Property, at all times. The Developer shall not allow to be placed on the Affordable Housing Property any mortgage, trust deed, encumbrance or lien other than such deeds of trust as the Developer may grant to secure construction or other financing related to the development of the Affordable Housing Property unless expressly authorized by this Agreement or the City. The Developer shall promptly remove or satisfy any levy or attachment made on all or any part of the Affordable Housing Property. Nothing contained in this Agreement shall prohibit the Developer from reasonably contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect to such contest.
9.5 Effect and Duration of Covenants. It is intended and agreed that the agreements and covenants provided in the Declaration of Affordability Restrictions shall be covenants running with the land and equitable servitudes thereon for the duration of the Affordability Period and that they shall, in any event, and without regard to technical classifications or designation, be binding, to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable 60 Disposition and Development Agreement Between the
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by, the City, the City’s successors and assigns, any other governmental entity acting within its authority and any successor in interest to all or any part of the Affordable Housing Property against the Developer, its successors and assigns and every successor in interest to all or any part of the Affordable Housing Property, and any party in possession or occupancy of the Affordable Housing Property and any subcontracting party or parties or other transferees under this Agreement.
9.6 Effect of Violation. The City is deemed the beneficiary of the terms and provisions of this Agreement, the Declaration of Affordability Restrictions, and the covenants running with the land, both for its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose benefit this Agreement and the covenants running with the land have been provided. The Agreement, the Declaration of Affordability Restrictions, and the covenants shall run in favor of the City without regard to whether the City has had or does have any interest in the Affordable Housing Property.
10. INDEMNIFICATION AND WAIVER.
10.1 Developer hereby agrees to protect, defend, indemnify and hold harmless, City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands, penalties, fines, defense costs, and consequential damage or liability of any kind or nature, however caused, arising directly or indirectly out of the obligations or operations herein undertaken by Developer, but only to the extent such damage or liability is caused in whole or in part by any act or omission of the Developer, any contractors or subcontractors of Developer or anyone for whose acts Developer may be liable, including, but not limited to, concurrent active or passive negligence, except where caused by the active negligence, sole negligence or willful misconduct of the City or resulting or arising from allegations that the City failed to administer this Agreement in accordance with applicable law. Developer will conduct all defense at its sole cost and expense and City shall have right to approve or disapprove legal counsel defending the City. City shall be reimbursed for all costs and attorney's fees incurred in enforcing this obligation. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable, but it is the intent of the parties that nothing in this provision is intended to otherwise reduce any insurance coverage on any policy of insurance held by the Developer or its subcontractors to which the City would otherwise be entitled to in the absence of this provision; accordingly the indemnity obligations hereunder shall not apply to the extent this indemnity would reduce or eliminate existing insurance coverage that would inure directly or indirectly to the benefit of the City. This Section 10 shall survive the termination of this Agreement, irrespective of the reason for its termination, until a date that is ten (10) years following the date the City furnishes the Developer a Certificate of Completion; provided however that nothing in this provision is intended to extend the statute of limitations by which any party other than the City can bring their claim.
10.2 In addition to the indemnity provided in Section 10.1, Developer hereby agrees to indemnify, defend, protect and hold the City harmless from and against any and all liability, damages, penalties, claims, suits, actions, proceedings, loss, cost or expense (including, but not limited to, attorney’s fees and court costs) arising out of the failure of Developer to comply with the Prevailing Wage Law (Labor Code section 1720 et seq.) including, but not limited to the payment of prevailing wages, if required by law in connection with the activities authorized by this Agreement. Developer further agrees to waive all claims and causes of action it may have against City pursuant to Labor Code section 1781.
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11. INSURANCE REQUIREMENTS AND PUBLIC SAFETY PROTECTIONS.
Developer shall promptly take steps to protect the public from the risk of injury whether from the condition of the Affordable Housing Property or Developer’s activities in connection with the Affordable Housing Property. The Developer shall obtain and maintain, or require the contractor and subcontractors for the Affordable Housing Project to purchase and maintain the following insurance for claims which may result from the operations under the Agreement of the Developer, any contractor, subcontractor or anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable.
11.1 Developer Insurance Requirements. No later than the date upon which the Developer commences construction of the Affordable Housing Project, Developer shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to Affordable Housing Property which may arise from or in connection with Developer’s activities hereunder. The cost of such insurance shall be borne by Developer. Developer shall maintain the following noted insurance:
Coverage Required Not Required
Commercial General Liability X (if Contractor does not carry) Comprehensive Vehicle Liability X
Workers Compensation and Employee Liability X
Hazard/All Risks X
11.1.1 Hazard Insurance. Prior to commencing construction of the Affordable Housing Project, Developer shall provide proof of insurance covering the improvements now existing or hereafter erected on the Affordable Housing Property for full replacement value against loss by fire, hazards included within the term “extended coverage,” and such other hazards as the City may require and in such amounts for the full remaining term of the City Development Loan.
The City shall be named as a mortgagee and as an additional insured loss payee on all policy documents.
11.2 Contractor Insurance Requirements. During the course of construction, Developer shall ensure that the Contractor and Subcontractors maintain the following noted insurance:
Coverage Required Not Required
Commercial General Liability X
Comprehensive Vehicle Liability X
Workers Compensation and Employee Liability X
Builder’s Risk/Course of Construction X
Hazard/All Risks X
11.3 Minimum Scope and Limits of Insurance. Coverage shall be at least as broad as:
(a) Insurance Services Office form number CG-0001, Commercial General Liability Insurance, in an amount not less than $1,000,000 per occurrence $2,000,000 general aggregate for bodily injury, personal injury and property damage; 62 Disposition and Development Agreement Between the
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(b) Insurance Services Office form number CA-0001, Comprehensive Automobile Liability Insurance, which provides for total limits of not less than $1,000,000 combined single limits per accident applicable to all owned/non-owned and hired vehicles; (c) Statutory Workers Compensation required by the Labor Code of the State of California and Employers' Liability Insurance in an amount not less than $1,000,000 per occurrence. Both the Workers Compensation and Employers' Liability policy shall contain the insurer's waiver of subrogation in favor of the City, its elected officials, officers, agents, employees and volunteers;
(d) Deductibles and Self-Insured Retentions: Any deductibles or self-insured retentions, and any modifications thereof, must be declared to and approved by the Risk Manager of the City of Shasta Lake, which approval shall not be unreasonably withheld.
11.4 Other Insurance Provisions. The general liability policy is to contain, or be endorsed to contain, the following provisions:
(a) The City, its officers, officials, employees, agents, and volunteers are to be covered as insured as respects: liability arising out of activities performed by or on behalf of Developer; products and completed operations of the Developer; premises owned, occupied, or used by the Developer. The coverage shall contain no special limitations of the scope of protection afforded to the City, its officers, officials, employees, agents, or volunteers. (b) Developer’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents, or volunteers shall be in excess of Developer’s insurance and shall not contribute with it. (c) Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) Days prior written notice has been given to the entity. (d) All insurance policies and renewals thereof shall be in form acceptable to the City. Developer shall promptly furnish to City copies of all renewal notices and all receipts of paid premiums. In the event of loss, Developer shall give prompt notice to the insurance carrier and City.
11.5 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII.
11.6 Verification of Coverage. Developer shall furnish the Project Manager with certificates of insurance and original endorsements effecting coverage required by this Agreement.
The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the Project Manager as a condition precedent to the Developer commencing construction of the Affordable Housing Project.
11.7 Failure to Maintain. If Developer fails to obtain or maintain, or cause to be obtained and maintained, any insurance required by this Agreement, the City shall have the right to purchase the insurance and Developer shall reimburse the full costs to City of obtaining such insurance.
12. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER.
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12.1 Prohibition Against Transfer of Rights or Obligations. City has entered into this Agreement in reliance upon the identity and qualifications of the Developer. Developer may not assign or otherwise transfer Developer’s rights or obligations under this Agreement without the prior written consent of City, which shall not be unreasonably withheld.
12.2 Prohibition Against Transfer of Interest. Developer represents that it is informed, and Developer shall inform any successors in interest, of the provisions of this Section 12. Subject to restriction of federal and state securities regulation and prior to issuance of a Certificate of Completion, Developer shall not permit transfers of ownership which would result in a change in management authority or decrease in fiscal ability with respect to Developer or, with respect to any of the parties in control of the Developer, by any method or means, including, but not limited to sale, transfer, increased capitalization, merger with another corporation, corporate or other amendments, or otherwise. With respect to this provision, the Developer represents that it has the authority to agree to and bind Developer and its constituent partners and their members to this provision. For the avoidance of doubt, City acknowledges that Shasta Lake Downtown Housing, LLC, is the Administrative General Partner of the Developer, that ADK Properties LLC is the sole member of the Administrative General Partner, that Community Revitalization and Development Corporation is the Managing General Partner of the Developer and that the City hereby approves of said entities serving in those capacities for all purposes contemplated in this Agreement.
12.3 Transfer or Assignment.
12.3.1 Conditions of Approval. City shall be entitled to require the following as conditions to any approval of any assignment or transfer of any interest in the Affordable Housing Property, the Agreement, or the Developer:
(a) Qualifications and Financial Responsibility. Any proposed transferee shall have the qualifications and financial responsibility, as determined by City in its sole discretion, necessary and adequate to fulfill Developer’s obligations under the Agreement (or, in the event of transfer of a part of the Affordable Housing Property, such obligations to the extent that they relate to such part).
(b) Assumption of Obligations. Any proposed transferee shall, for itself and its successors and assigns, expressly assume all of Developer’s obligations under this Agreement and shall agree to be subject to all the conditions and restrictions to which Developer is subject (or, in the event the transfer is of or relates to part of the Affordable Housing Property, such obligations, conditions and restrictions to the extent that they relate to such part). Said assumption of obligations shall be in writing in recordable form approved by City and shall expressly be for the benefit of City. The fact that any such transferee shall not have assumed such obligations or so agreed, shall not relieve such transferee from such obligations, conditions, or restrictions, or deprive the City of any rights or remedies or controls with respect to all or any part of the Affordable Housing Property or this Agreement that the City would have had, had there been no such transfer or change.
(c) Review of Documents. Developer shall submit to the City for review all legal documents involved in effecting such transfer. Such documents shall be subject to City’s prior written approval.
(d) Limits on Consideration. Prior to issuance of the Certificate of Completion, the consideration payable for the transfer by such transferee of any interest in the 64 Disposition and Development Agreement Between the
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Affordable Housing Property or the Agreement shall not exceed the actual costs incurred for the Affordable Housing Project, if any, actually made. It is the intent of this provision to preclude assignment of the Agreement or transfer of the Affordable Housing Property for profit prior to the completion of the Affordable Housing Project.
(e) Other Conditions. Developer and such transferee shall comply with such other conditions as City may find necessary and reasonable in order to achieve and safeguard the purposes of the Agreement.
(f) Permitted Transfers. Notwithstanding any other provision of this Agreement, City approval shall not be required for (i) sale of limited partner interests related to the syndication of Low Income Housing Tax Credits, or by the tax credit investor; or (ii) purchase of the Affordable Housing Property or of any interest in Developer pursuant to any option rights or rights of first refusal granted in the Developer’s organizational documents. (g) Tax Credit Equity Investor. The City agrees and acknowledges that the development of the Affordable Housing Project will be financed in part with proceeds of an equity investment made by one or more limited partners of the Developer (collectively, the “Limited Partner”) in connection with the allocation of federal and/or state low income housing tax credits to the Developer. Notwithstanding anything to the contrary set forth in this Agreement, the following provisions shall apply at all times during which a Limited Partner is a partner of the Developer:
(1) Removal of General Partner. The withdrawal, removal and/or replacement of Developer’s general partner(s) for cause in accordance with Developer’s Amended and Restated Agreement of Limited Partnership shall not constitute a default under any of the documents evidencing the City Loans or accelerate the maturity of any of the City Loans. If a Limited Partner exercises its right to remove a general partner of Developer, City shall not unreasonably withhold its consent to the substitute general partner. Notwithstanding the preceding sentence, the City’s consent will not be required if the substitute general partner is an affiliate of a Limited Partner. Notwithstanding the foregoing, the substitute general partner shall assume all of the rights and obligations of the removed general partner under all of the documents evidencing the City Loans.
(2) Notice and Cure Rights. The City hereby agrees that any cure of any default made or tendered by a Limited Partner shall be deemed to be a cure by Developer and shall be accepted or rejected on the same basis as if made or tendered by Developer. Copies of all notices which are sent to Developer under the terms of the documents evidencing the City Loans shall also be sent to each Limited Partner at an address to be provided to City in writing by said Limited Partner.
(3) Extended Use Agreement. The City acknowledges that
Developer and the California Tax Credit Allocation Committee (CTCAC) intend to enter into an extended use agreement, which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code (IRC), as amended. As of the date hereof, IRC Section 42(h)(6)(E)(ii) does not permit the eviction or termination of tenancy (other than for good cause) of an existing tenant of any low-income unit or any increase in the gross rent with respect to such unit not otherwise permitted under Section 42 for a period of three (3) years after the date the building is acquired by foreclosure or instrument in lieu of foreclosure. In the 65 Disposition and Development Agreement Between the
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event the extended use agreement required by CTCAC is recorded against the Affordable Housing Property, the City agrees to comply with the provisions set forth in IRC Section 42(h)(6)(E)(ii).
12.4 Developer Obligations Not Relieved. In the absence of specific written agreement by the City to the contrary, no such transfer or approval of transfer by the City shall relieve the Developer or any other party bound in any way by the Agreement, from any of its obligations under the Agreement.
13. FINANCING DEFAULTS.
13.1 Lender’s Option to Cure Defaults. After any default of Developer’s obligations under the Agreement and the expiration of applicable notice and cure periods, each Lender (or successor to Lender) shall have the right, at its option, to cure or remedy such default (or to the extent that it relates to the part of the Affordable Housing Property covered by its lien), within the time for cure allowed to Developer as stated in Section 14.1, and to add the cost of such cure to the debt and the lien secured by the Affordable Housing Property. If the breach or default relates to construction of the Affordable Housing Project, however, Lender shall not undertake or continue the construction of the Affordable Housing Project (beyond the extent necessary to conserve or protect the Affordable Housing Project or construction already made) unless Lender assumes in writing Developer’s obligations to complete the Affordable Housing Project on the Affordable Housing Property in the manner provided in the Agreement. Any Lender (or successor to Lender) who properly completes the Affordable Housing Project as provided in the Agreement shall be entitled, upon written request made to the City, to receive a Certificate of Completion from the City in a manner provided in the Agreement. Such certification shall mean that any remedies or rights with respect to revesting of title to the Affordable Housing Property that the City may have because of Developer’s failure to cure any default with respect to the construction of the Affordable Housing Project on other parts of the Affordable Housing Property, or because of any other default of the Agreement by the Developer shall not apply to the part of the Affordable Housing Property to which such certification relates.
13.2 City’s Option to Pay Debt or Purchase Affordable Housing Property. If, after Developer’s default under the Agreement and after sixty (60) Days prior written notice from the City, the Lender fails to exercise its option to construct the Affordable Housing Project or undertakes, but does not diligently prosecute to completion, construction of the Affordable Housing Project, City shall have the option, exercisable only by written notice to Lender within ten (10) Days after expiration of the sixty (60) Day period, to do one of the following:
13.2.1 Pay Debt. City shall be entitled, at its option, to pay to the Lender the amount of the secured debt and acquire or terminate Lender’s secured position.
13.2.2 Deed in Lieu. If title to the Affordable Housing Property has vested in Lender by way of a deed in lieu of foreclosure, City shall be entitled, at its option within sixty (60) Days from notice to City of Lender’s acceptance of such a deed, to a conveyance to it of the Affordable Housing Property upon payment to Lender of an amount equal to the sum of the following:
(a) The secured debt at the time of the deed in lieu of foreclosure (less application of rentals and other income received during foreclosure proceedings). (b) All expenses with respect to the deed in lieu of foreclosure. 66 Disposition and Development Agreement Between the
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(c) The costs of any Affordable Housing Project improvements made by Lender.
13.2.3 Foreclosure. City shall have the right to bid at any foreclosure sale held by or for any Lender on the Affordable Housing Property.
13.2.4 Eminent Domain. Nothing in this Agreement shall limit any exercise of City’s power of eminent domain over the Affordable Housing Property.
13.3 City’s Option to Cure Loan Default. In the event of a default prior to the completion of the Affordable Housing Project by the Developer, or any successor in interest to Developer by reason of any of its obligations under any mortgage or other instrument creating an encumbrance or lien upon the Affordable Housing Property, the City may at its option cure such default or breach following the expiration of any applicable cure period (or sooner upon notice to Developer), in which case the City shall be entitled, in addition to any of its other rights or remedies, to reimbursement from the Developer of all costs and expenses incurred by the City in curing such default and to a lien upon the Affordable Housing Property for such reimbursement, provided that any such lien shall be subject always to the lien of any existing liens on the Affordable Housing Property authorized by this Agreement including, but not limited to, any construction financing.
14. DEFAULTS AND REMEDIES.
The provisions of this Section 14 are in addition to any provisions in the Deed(s) of Trust regarding default and remedies. Subject to any extension of time permitted by this Agreement, a failure or delay by a party to perform any term or provision of this Agreement constitutes a default of this Agreement.
14.1 Cure. Except as otherwise provided in this Agreement, if either party shall default in, or breach, this Agreement, such party shall cure such default or breach within thirty (30) Days after receipt of such written notice from the other party of such default or breach or, if such default or breach cannot be cured within such thirty (30) day period the defaulting party shall commence cure of such default or breach within thirty (30) days of receipt of notice from the other party and diligently pursue cure until its completion. If the defaulting party does not cure or demonstrate to the reasonable satisfaction of the other party that it has acted and continues to act promptly and diligently to cure the default within such time, the aggrieved party may declare an “Event of Default” and institute proceedings to cure and remedy such default or breach, including, but not limited to, proceedings to compel specific performance by the party in default. While neither party is relieved of any obligation under this Agreement to give notice, mere failure to notify the other party shall not be deemed a waiver of the defaulting party’s default.
14.2 Termination Prior to Completion of Construction.
14.2.1 Termination by City. If, prior to completion of construction of the Affordable Housing Project by Developer and without City approval, Developer assigns any interest in the Agreement or the Affordable Housing Property (other than as permitted in this Agreement), permits a change in the ownership or control in Developer in violation of this Agreement, or fails to perform any obligation under the Agreement, then City may elect to declare an Event of Default and terminate, subject to the applicable notice and cure periods provided in Section 14.1. In such event, the City reserves all remedies for any damages incurred. 67 Disposition and Development Agreement Between the
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14.2.2 Termination by Developer. If, prior to completion of construction of the Affordable Housing Project by Developer, City fails to perform any obligation under the Agreement, then Developer may elect to declare an Event of Default and terminate, subject to the cure period provided in Section 14.1. In such event, Developer reserves all remedies for specific performance and/or any damages incurred. In no event shall the failure by the City to approve the Affordable Housing Project or any Plans for the Affordable Housing Project be deemed a default by the City.
14.3 Other Rights and Remedies of City. City shall have the right to institute such actions or proceedings as it may deem desirable to carry out the purposes of this Section 14, including the right to record in the public land records a written declaration of the termination of all the rights of the Developer in the Affordable Housing Property provided by this Agreement.
14.4 No Waiving by Delay. Any delay by a party in asserting any rights under this Section 14 shall not operate as a waiver of such rights or to deprive such party of, or limit, such rights in any way. Any waiver in fact made by a party with respect to any specific default shall not be considered as a waiver of the rights of such party with respect to any other defaults or with respect to the particular default except to the extent specifically waived in writing.
14.5 Delay for Causes Beyond Control of Party. For the purposes of any of the provisions of the Agreement, neither City nor Developer shall be considered in breach of, or default in, its obligations with respect to the Affordable Housing Property or the Affordable Housing Project, or the beginning, prosecution and completion of construction of the Affordable Housing Project, if a delay in the performance of such obligations is due to causes beyond the delayed party’s control and without its fault or negligence including, but not limited to, acts of God, acts of a public enemy, acts of any federal, state or local governmental body or City, delays in availability, procurements or delivery of adequate materials, equipment, supplies or personnel which are outside the control of Developer, acts of the other parties, fires, floods, epidemics, discovery of protected species or historical artifacts upon the Affordable Housing Property, discovery of pre-existing hazardous materials, quarantine restrictions, strikes, freight embargoes, a general moratorium on financing for projects of the same type, and unusually severe weather (as for example, floods, tornadoes, or hurricanes) or delays of subcontractors due to such causes. In the event of the occurrence of any such enforced delay, the time or times for performance of such obligations of the City and Developer shall be extended for the period of the enforced delay, provided that the party seeking the benefit of the provisions of this Section shall, within thirty (30) Days after the party has or should have knowledge of any such enforced delay, have first notified the other party, in writing, of the delay and its cause, and requested an extension for the period of the enforced delay. In no event, however, shall any period of enforced delay exceed ninety (90) Days if the party claiming enforced delay has not demonstrated, to the reasonable satisfaction of the other party, that it has acted and continues to act promptly and diligently, to the extent reasonably possible, to terminate such enforced delay.
14.6 Rights and Remedies Cumulative. The rights and remedies of the parties to the Agreement shall be cumulative, and the exercise by either party of any one or more of such remedies shall not preclude the exercise by it, at the same or different times, of any other such remedies for the same default or breach or of any of its remedies for any other default or breach by the other party. Further, the remedies set forth in the City’s Deed of Trust shall not be construed as being limited by the terms and conditions set forth in this Agreement and shall be available to the City without restriction. No waiver made by either such party with respect to the performance of any obligation of the other parties or any condition to its own obligation under the Agreement 68 Disposition and Development Agreement Between the
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shall be considered a waiver of any rights beyond those expressly waived in writing.
15. GENERAL PROVISIONS.
15.1 Time for Actions. City and Developer shall each perform the actions required of them, on or before the times specified in this Agreement. Unless otherwise provided, City shall give required approvals or disapprovals within fourteen (14) Days after submission, except matters which must be decided by the City of Shasta Lake City Council, which shall be decided within forty-five (45) Days.
15.2 Counterparts. This Agreement may be executed in two (2) counterpart originals, each of which shall constitute one and the same instrument.
15.3 Priority of Contents of Agreement. In the event of a conflict between the terms of this Agreement and the Exhibits, this Agreement shall be given precedence.
15.4 Inspection of Books and Records. City has the right, at all reasonable times and upon reasonable notice, to inspect the books and records of the Developer pertaining to the Affordable Housing Project as necessary to assure compliance with the provisions of this Agreement. Developer shall keep such books and records as City may reasonably require to assure Developer’s performance of its obligations under this Agreement.
15.5 Fees, Commissions, Gifts or Interests. Neither party shall be liable for any real estate commissions, brokerage fees or finder’s fees which may arise through the other party from this Agreement. City and Developer each represent that neither has engaged any broker, agent or finder, and that neither claims such a commission or fee, in connection with this Agreement.
Developer shall pay no fee or commission, make no gifts and provide no interest in the City Loans to any employee or official of the City.
15.6 Entire Agreement. This Agreement, including all of the exhibits and attachments, integrates all of the terms and conditions related or incidental to its subject matter, and supersedes all negotiations or previous agreements between the parties with respect to its subject matter.
15.7 Waivers and Amendments. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the City or the Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the City and the Developer. However, amendments which do not result in a substantial or functional change to the original intent of the Agreement and do not cause an increase to the maximum amount payable under this Agreement shall be deemed “minor amendments” and may be agreed to in writing between Developer and the City Manager or designee without requiring approval of the City Council.
15.8 Non-liability of City Officials and Employees. No member, official or employee of the City shall be personally liable to the Developer 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 the Developer or its successors, or on any obligations under the terms of this Agreement.
15.9 Notices and Demands. Any notice, demand or other communication under the Agreement by either party to the other shall be deemed to have been full and properly given when made in writing, enclosed in a sealed envelope, and deposited in the United States Post Office, certified mail, postage prepaid, to the addresses for City and Developer stated in Sections 1.8 and 69 Disposition and Development Agreement Between the
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1.23, respectively, or delivered by email to the email address listed for the City and Developer in Sections 1.8 and 1.23, respectively.
15.10 Jurisdiction, Venue and Attorneys’ Fees.
15.10.1 Jurisdiction and Venue. Any legal action(s) concerning the Agreement or the performance of any party thereunder shall be brought only in the court of appropriate jurisdiction in the County of Shasta. The Developer and the City agree that jurisdiction and venue shall only be in said courts.
15.10.2 Attorneys’ Fees. In the event any legal action, including arbitration, is brought by either party to this Agreement to enforce this Agreement or for breach of this Agreement or for a declaration of the rights and duties under this Agreement, the prevailing party shall recover costs and reasonable attorney’s fees in addition to any other relief to which that party may be entitled.
15.10.3 No Party Deemed Drafter. In the event of a dispute between the parties hereto over the meaning of this Agreement, no party shall be deemed to have been the drafter hereof, and the principle of law that contracts are construed against the drafter does not apply.
15.11 Severability. In case 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, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the court or other tribunal making such determination is authorized and instructed to modify this Agreement so as to effect the original intent of the parties as closely as possible so that the transactions and agreements contemplated herein are consummated as originally contemplated to the fullest extent possible.
15.12 Further Assurances and Assistance. After the date of this Agreement, each party shall promptly execute and deliver such further documents and instruments and take such actions as any party may reasonably request to carry out the intentions and purposes of this Agreement and the consummation of the transactions contemplated hereby. 70 Disposition and Development Agreement Between the
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IN WITNESS WHEREOF, the City and the Developer have executed this Agreement on the respective dates set forth below:
City of Shasta Lake, a municipal government
Date:___________________
By: Greg Watkins, Mayor
By: Shasta Lake Downtown Housing, LLC, a California
limited liability company
Its: Administrative General Partner
By:
Allen A. Knott
Its: Manager
By: Community Revitalization and Development
Corporation, a California nonprofit public benefit
corporation
Its: Managing General Partner
By:
David Rutledge
Its: President
ATTEST:
_________________________
By: Toni Coates, City Clerk
APPROVED AS TO FORM:
_____________________________________
By: John Kenny, City Attorney
Shasta Lake Downtown Housing, LP, a California
limited partnership:
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LIST OF EXHIBITS
EXHIBIT 1: Legal Description
EXHIBIT 2: Site Map
EXHIBIT 3: Omitted
EXHIBIT 4: Omitted
EXHIBIT 5: Grant Deed
EXHIBIT 6: Memorandum of Development Agreement
EXHIBIT 7: City Land Loan Promissory Note
EXHIBIT 8: City Land Loan Deed of Trust
EXHIBIT 9: City Predevelopment Loan Promissory Note
EXHIBIT 10: City Predevelopment Loan Deed of Trust
EXHIBIT 11: City AHSC Conduit Loan Agreement
EXHIBIT 12: City AHSC Conduit Loan Promissory Note
EXHIBIT 13: City AHSC Conduit Loan Deed of Trust
EXHIBIT 14: City Declaration of Affordability Restrictions EXHIBIT 15: Estoppel Certificate
EXHIBIT 16: Scope of Development
EXHIBIT 17: Preliminary Project Budget
EXHIBIT 18: Schedule of Performance
EXHIBIT 19: Form of Notice of Completion
EXHIBIT 20: Form of Certificate of Completion
EXHIBIT 21: Fair Housing Poster
72 EXHIBIT 1
LEGAL DESCRIPTIONS
City Property
4601 Shasta Dam Boulevard, Shasta Lake, CA 96019; APN: 005-250-059 LOTS 1 THROUGH 5, INCLUSIVE AND LOTS 28 THROUGH 32, INCLUSIVE, BLOCK 7 AS SHOWN ON THE MAP OF BOOMTOWN UNIT 8, RECORDED SEPTEMBER 14, 1938 IN BOOK 5 OF MAPS AT PAGE 33, SHASTA COUNTY RECORDS.
EXCEPTING THEREFROM ALL THAT PORTION OF LOTS 1 THROUGH 5, INCLUSIVE, AS CONVEYED BY PASQUALE FORTE, ET UX. TO THE STATE OF CALIFORNIA DATED NOVEMBER 24, 1964, RECORDED JANUARY 27, 1965 IN BOOK 821 OF OFFICIAL RECORDS AT PAGE 129, SHASTA COUNTY RECORDS.
4657 Shasta Dam Boulevard, Shasta Lake, CA 96019; APN: 005-250-063 LOTS 13, 14, 15, 16, 17, 18, 19 AND 20 OF BLOCK 8, AS SHOWN IN THE MAP OF BOOMTOWN SUBDIVISION, UNIT #8, FILED SEPTEMBER 14, 1938 IN BOOK 5 OF MAPS AT PAGE 33, SHASTA COUNTY RECORDS.
EXCEPTING THEREFROM THAT PORTION OF LOTS 13, 14, 15 AND 16 DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA RECORDED OCTOBER 19, 1967 IN BOOK 932 OF OFFICIAL RECORDS AT PAGE 542, SHASTA COUNTY RECORDS.
No Address; APN: 007-010-096
THE LAND DESCRIBED HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SHASTA, CITY OF SHASTA LAKE, DESCRIBED AS FOLLOWS:
PARCEL 1:
THE WEST ONE-HALF OF LOT 23 AND ALL OF LOT 24, BLOCK 2, AS SHOWN UPON THAT CERTAIN “MAP OF BOOMTOWN UNIT NO. 7”, COUNTY OF SHASTA, STATE OF CALIFORNIA, FILED SEPTEMBER 19, 1938 IN BOOK 5 OF MAPS AT PAGE 34, SHASTA COUNTY RECORDS.
PARCEL 2:
THE EAST ONE-HALF OF LOT 23, BLOCK 2, AS SHOWN UPON THAT CERTAIN “MAP OF BOOMTOWN UNIT NO. 7”, COUNTY OF SHASTA, STATE OF CALIFORNIA, FILED SEPTEMBER 19, 1938 IN BOOK 5 OF MAPS AT PAGE 34, SHASTA COUNTY RECORDS. 73 Developer Property
4617 Shasta Dam Boulevard, Shasta Lake, CA 96019; APN: 005-250-007 COMMENCING AT THE NORTHEAST CORNER OF LOT 28 OF BLOCK 8, BOOMTOWN SUBDIVISION, UNIT 8, AS RECORDED IN BOOK 5 OF THE RECORD MAPS OF SHASTA COUNTY AT PAGE 33, AND BEING THE TRUE POINT OF BEGINNING; THENCE, EAST, ALONG THE SOUTH LINE OF FRONT ST. 50.00 FEET TO THE NORTHWEST CORNER OF LOT 25; THENCE, SOUTH ALONG THE WEST LINE OF LOTS 25 AND 8, TO A POINT ON THE NORTH LINE OF SHASTA DAM BLVD AS DEFINED IN BOOK 821 OF THE OFFICIAL RECORDS OF SHASTA COUNTY AT PAGE 79; THENCE, WEST, ALONG SAID NORTH LINE OF SHASTA DAM BLVD, 50 FEET, THE NORTHEAST CORNER OF LOT 28 AND THE POINT OF BEGINNING.
PURSUANT TO PROPERTY LINE ADJUSTMENT NO. 07-02 RECORDED JUNE 19, 2007 AS INSTRUMENT NO. 2007-0028335, SHASTA COUNTY RECORDS.
(FORMERLY BEING LOTS 6, 7, 26 AND 27, BLOCK 8 SHOWN ON THE MAP OF BOOMTOWN UNIT NO. 8 FILED SEPTEMBER 14, 1938 IN BOOK 5 OF MAPS AT PAGE 33, SHASTA COUNTY RECORDS.).
4633 Shasta Dam Boulevard, Shasta Lake, CA 96019; APN: 005-250-008-ADK PARCEL 1:
LOTS 8, 9, AND 10 IN BLOCK 8 AS SHOWN ON THE MAP OF BOOMTOWN UNIT NO. 8, RECORDED IN THE OFFICE OF THE COUNTY RECORDER, SEPTEMBER 14, 1938 IN BOOK 5 OF MAPS AT PAGE 33, SHASTA COUNTY RECORDS.
EXCEPTING THEREFROM THAT CERTAIN PARCEL OF LAND DESCRIBED IN THE DEED EXECUTED BY MUNSON J. ROBINSON, ET UX., TO STATE OF CALIFORNIA, DATED SEPTEMBER 29, 1964, RECORDED OCTOBER 30, 1964 IN BOOK 810 OF OFFICIAL RECORDS AT PAGE 334, SHASTA COUNTY RECORDS.
PARCEL 2:
LOTS 23, 24, AND 25 IN BLOCK 8, AS SHOWN ON THE MAP OF BOOMTOWN UNIT NO. 8, RECORDED IN THE OFFICE OF THE COUNTY RECORDER SEPTEMBER 14, 1938 IN BOOK 5 OF MAPS AT PAGE 33, SHASTA COUNTY RECORDS. 4640 Shasta Dam Boulevard, Shasta Lake, CA 96019; APN: 007-010-008 LOTS 4, 5 AND 6, BLOCK 2, AS SHOWN ON THE MAP OF BOOMTOWN UNIT NO. 7, FILED FOR RECORD IN THE OFFICE OF THE COUNTY RECORDER SEPTEMBER 19, 1938, IN BOOK 5 OF MAPS AT PAGE 34, SHASTA COUNTY RECORDS.
EXCEPTING THEREFROM THOSE PORTIONS OF LOTS 4, 5 AND 6, IN BLOCK 2 OF BOOMTOWN UNIT NO. 7, AS THE SAME ARE SHOWN ON THE MAP ENTITLED “BOOMTOWN UNIT NO. 7” RECORDED SEPTEMBER 19, 1938, IN BOOK 5 OF MAPS, 74 AT PAGE 34, SHASTA COUNTY RECORDS, LYING NORHTERLY OF THE LINE DESCRIBED AS FOLLOWS:
COMMENCING AT ENGINEER’S STATION “A1” 202+10, P.I., AS ESTABLISHED FROM THE DEPARTMENT OF PUBLIC WORKS’ 1963 SURVEY FROM S.P.R.R. TO JUNCTION OF ROUTE 3, ROAD II-SHA-209-A, FROM WHICH THE SOUTHWEST CORNER OF THE SOUTHEAST OONE-QUARTER OF SECTION 340, TOWNSHIP 33 NORTH, RANGE 4 WEST, M.D.B.&M., AS SAID CORNER IS SHOWN ON THE MAP ENTITLED “MAP OF BOOMTOWN UNIT NO. 3”, RECORDED MAY 7, 1938, IN BOOK 5 OF MAPS AT PAGE 24, SHASTA COUNTY RECORDS, BEARS SOUTH 61 24’ 29” EAST, 23.84 FEET; THENCE SOUTH 86 57’ 24” EAST, 24.00 FEET TO THE WEST LINE OF SAID LOT 4, BEING THE TRUE POINT OF BEGINNING OF THIS LINE; THENCE CONTINUING SOUTH 86 57’ 24” EAST, 75.00 FEET, MORE OR LESS, TO THE POINT OF TERMINATION OF THIS LINE ON THE EAST LINE OF SAID LOT 6. 4650 Shasta Dam Boulevard, Shasta Lake, CA 96019; APN: 007-010-009 LOTS 7, 8 AND 9, BLOCK 2, AS SHOWN ON MAP OF BOOMTOWN UNIT NO. 7, FILED IN THE OFFICE OF THE COUNTY RECORDER, SEPTEMBER 19, 1938, IN BOOK 5 OF MAPS AT PAGE 34, SHASTA COUNTY RECORDS.
EXCEPTING THEREFROM THOSE PORTIONS OF LOTS 7, 8 AND 9, IN BOCK 2 OF BOOMTOWN UNIT NO. 7, AS SHOWN ON THE MAP ENTITLED “BOOMTOWN UNIT NO. 7”, RECORDED SEPTEMBER 19, 1938, IN BOOK 5 OF MAPS AT PAGE 34, SHASTA COUNTY RECORDS, LYING NORTHERLY OF THE LINE DESCRIBED AS FOLLOWS:
COMMENCING AT SAID ENGINEER’S STATION “A1” 202+19.54 P.I.; THENCE SOUTH 86 57’ 24” EAST, 50.00 FEET TO THE WEST LINE OF LOT 7, BEING THE TRUE POINT OF BEGINNING OF THIS LINE; THENCE CONTINUING SOUTH 86 57’ 24” EAST, 76.00
FEET, MORE OR LESS, TO THE POINT OF TERMINATION OF THIS LINE ON THE EAST LINE OF SAID LOT 9.
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76 EXHIBIT 3
OMITTED
77 EXHIBIT 4
OMITTED
78 EXHIBIT 5
RECORDING REQUESTED BY
CITY OF SHASTA LAKE
AND WHEN RECORDED MAIL THIS DEED
AND, UNLESS OTHERWISE SHOWN
BELOW, MAIL TAX STATEMENTS TO:
SHASTA LAKE DOWNTOWN HOUSING, LP
1011 Parkview Avenue, Suite A
Redding, CA 956001
_______________________________________________________________________________________________ Space Above This Line For Recorder’s Use
The undersigned Grantor declares:
City Transfer Tax: $0
Documentary Transfer Tax: $
COMPUTED ON FULL VALUE OF PROPERTY
CONVEYED
OR COMPUTED ON FULL VALUE LESS LIENS
AND ENCUMBRANCES REMAINING AT TIME
OF SALE.
THE UNDERSIGNED HEREBY DECLARES _______
Signature of Declarant of Agent determining tax. Firm Name ____________________________________________________________________________________________________________________________
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, City of Shasta Lake,
A municipal government
hereby GRANT(S) to
Shasta Lake Downtown Housing, LP
A California limited partnership
the following described real property in the City of Shasta Lake, County of Shasta, State of California:
SEE EXHIBIT 'A' ATTACHED HERETO AND MADE A PART HEREOF
Parcel Number: ______________________________________________________ MAIL TAX STATEMENTS TO PARTY SHOWN ON FOLLOWING LINE; IF NO PARTY SHOWN, MAIL AS DIRECTED ABOVE.
______________________________________________________________________________________________ 79 Name Street Address City & State
Signature Page for Grant Deed
Dated: ____________________________
CITY OF SHASTA LAKE,
a municipal government
By: ___________________________
Jessaca Lugo, City Manager
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.
Signature________________________________________________ (Seal) MAIL TAX STATEMENTS TO PARTY SHOWN ON FOLLOWING LINE; IF NO PARTY SHOWN, MAIL AS DIRECTED ABOVE.
______________________________________________________________________________________________ Name Street Address City & State
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. 80 EXHIBIT A
LEGAL DESCRIPTION
81 1 | Page
EXHIBIT 6
RECORDING REQUESTED BY AND
WHEN RECORDED SEND TO:
City of Shasta Lake
4477 Main Street
Shasta Lake, California 96019
No recording fee required pursuant to
Government Code Section 27383 and 6103.
SPACE ABOVE THIS LINE FOR RECORDER’S USE
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
4601, 4617, 4633, 4640, 4650, and 4657 Shasta Dam Boulevard THIS MEMORANDUM OF DEVELOPMENT AGREEMENT is made this
____________, 2023, by and between the CITY OF SHASTA LAKE (“City”) and SHASTA LAKE DOWNTOWN HOUSING, LP a California limited partnership, hereinafter referred to as “Developer.”
City and Developer are parties to that certain Disposition and Development Agreement with an effective date of ______, 2023 (the “Agreement”), the terms and conditions of which are hereby incorporated by this reference as if set forth in full herein. The Agreement controls the development and use of that certain real property, including improvements thereto, situated in the County of Shasta, State of California, and described as follows:
[See Exhibit A]
Signatures on Following Page
82 2 | Page
Dated: ___________________
CITY OF SHASTA LAKE,
a municipal government
By:___________________________
Jessaca Lugo, City Manager
ATTEST:
By:___________________________
Toni Coates, City Clerk
APPROVED AS TO FORM:
By:___________________________
John Kenny, City Attorney
Dated: ___________________
Shasta Lake Downtown Housing, LP,
a California limited partnership
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company
its Administrative General Partner
By:___________________________
Daniel Knott, Manager
By: Community Revitalization and
Development Corporation,
a California nonprofit public benefit
corporation
its Managing General Partner
By:___________________________
David Rutledge, President
**Please have Notary Public attach separate Acknowledgement Form with signature and seal**
83 3 | Page
EXHIBIT “A” to MEMORANDUM OF DDA
LEGAL DESCRIPTION
4601, 4617, 4633, 4640, 4650, and 4657 Shasta Dam Boulevard
84 3/28/2023
EXHIBIT 7
PROMISSORY NOTE SECURED BY DEED TRUST
DO NOT DESTROY THIS NOTE: When paid, this note, with Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made.
Amount: $___________ __________ _, 2023
Shasta Lake, California
FOR VALUE RECEIVED, Shasta Lake Downtown Housing, LP, a California limited partnership, ("Borrower"), promises to pay to the order of the City of Shasta Lake ("Holder"), the principal sum of ______________________ and No/100 Dollars ($__________), pursuant to Section 4 below.
1. Borrower’s Obligation. This promissory note (“Note”) evidences Borrower’s obligation to pay Holder the principal amount of ________________ and No/100 Dollars ($__________) for the acquisition of certain real property and the development thereof (“Project”) pursuant to a Disposition and Development Agreement between Borrower and Holder dated ____________, 2022 (“Agreement”).
2. Interest. The principal balance of this Note shall bear simple interest from the date of disbursement until repaid in full at one percent (1%) per annum; provided, however, if an event of default occurs, interest on the principal balance shall begin to accrue, as of the date of the event of default and continuing until the earlier of the Loan funds being paid in full or cure of such event of default, at the default rate of the lesser of: ten percent (10%), compounded annually; or the highest rate permitted by law.
3. Term and Repayment Requirements. The term of this Note (“Term”) shall commence with the date of this Note and shall expire fifty-five (55) years from the date of recordation of a Notice of Completion by the City, at which time the remaining balance of principal and interest shall be due and payable.
4. Terms of Payment.
a. All principal and interest payments are payable in lawful money of the United States. b. All payments on this note shall be paid to the City of Shasta Lake at 4477 Main Street, Shasta Lake, California, or to such other place as holder of this note may from time to time designate. c. Except in the event of acceleration of this Note pursuant to Section 5b below no payments of principal or interest are due until the expiration of the Term. All and outstanding principal and accrued interest will be due and payable by Borrower upon the expiration of the Term. d. All payments on this Note shall be without expense to Holder, and Borrower agrees to pay all costs and expenses, including reconveyance fees and reasonable attorney’s fees of Holder, incurred in connection with the payment of this Note and the release of any security hereof. e. Notwithstanding any other provision of this Note, or any instrument securing the obligations of Borrower under this Note, if, for any reason whatsoever, the payment of all sums by 85 City of Shasta Lake Land Loan Promissory Note Page 2 of 4
3/28/2023
Borrower pursuant to the terms of this Note would result in the payment of interest which would exceed the amount that 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 Note, so that in no event shall Borrower be obligated under the terms of this Note to pay any interest which would exceed the lawful rate.
g. The whole of this Note shall be nonrecourse to Borrower.
5. Default.
a. Any of the following shall constitute an event of default under this Note and are subject to the applicable notice and cure rights.
1) Any failure to pay, in full, any payment required under this Note when due. 2) Any failure in the performance by Borrower of any term, condition, provision, or covenant set forth in this Note.
3) The occurrence of any event of default under the Agreement, the Deed of Trust, or the City Declaration of Affordability Restri Restrictions, (as defined in the Agreement). b. Upon the occurrence of such an event of default and the expiration of the applicable cure period, the entire unpaid principal balance, together with all interest thereon, and together with all sums then payable under this Note and the Deed of Trust shall at the option of Holder become immediately due and payable upon written notice by Holder to Borrower without further demand. c. The failure to exercise the remedy set forth in subsection 5b 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 wavier 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 that 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 Holder, except as and to the extent otherwise provided by law.
d. Holder hereby agrees that any cure made or tendered by the Limited Partner shall be deemed to be made by the Borrower and shall be accepted or rejected on the same basis. Notices to the Limited Partner required hereunder shall be given at the following address:
6. No Assumption. This Note shall not be assumable by the successors and assigns of Borrower without the prior written consent of Holder, which consent shall not be unreasonably withheld.
7. Security. This Note is secured by a Deed of Trust and Security Agreement (“Deed of Trust”), of even date herewith, wherein Borrower is the Trustor and Holder is the Beneficiary, covering the Property.
86 City of Shasta Lake Land Loan Promissory Note Page 3 of 4
3/28/2023
8. Waivers.
a. Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, notice of dishonor and notice of nonpayment of this Note. Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time, and that Holder may accept further security or release any security for this Note, all without in any way affecting the liability of Borrower.
b. No extension of time for payment of this Note or any installment hereof made by agreement by Holder with any person now or hereafter liable for payment of this note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part.
c. The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct, or withhold any payments or charges due under this Note for any reason whatsoever.
9. Miscellaneous Provisions.
a. Borrower promises to pay all costs and expenses, including reasonable attorney’s fees, incurred by Holder in the enforcement of the provisions of this Note, regardless of whether suit is filed to seek enforcement.
b. This 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. c. This Note shall be governed by and construed in accordance with the laws of the State of California.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
87 City of Shasta Lake Land Loan Promissory Note Page 4 of 4
3/28/2023
Shasta Lake Downtown Housing, LP,
a California limited partnership:
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company
Its: Administrative general partner
By:
Daniel Knott
Its: Manager
By: Community Revitalization and Development Corporation, a California nonprofit public benefit corporation
Its: Managing general partner
By:
David Rutledge
Its: President
88 EXHIBIT 8
RECORDING REQUESTED BY:
City of Shasta Lake
CITY BUSINESS - NO FEE
Section 6103 of the Government Code
of the State of California
AND WHEN RECORDED MAIL TO:
City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
CITY OF REDDING DEED OF TRUST WITH ASSIGNMENTS OF RENTS THIS DEED OF TRUST is made this __th day of ____________2023, by Shasta Lake Downtown Housing, LP, a California limited partnership, as to equitable title, herein called “Trustor,” and/or “Borrower” whose address is 1101 Parkview Avenue, Suite A, Redding, CA 96001; PLACER TITLE COMPANY, herein called “Trustee,” whose address is 2145 Larkspur Lane, Suite A, Redding, CA 96002; and the CITY OF SHASTA LAKE, a municipal government, whose address is 4477 Main Street, Shasta Lake, California 96019, herein called “Beneficiary” and/or the “Lender”.
WITNESSETH: That Trustor Irrevocably, Grants, Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Shasta Lake, County of Shasta, State of California, described as:
EXHIBIT 1 - Legal Description
TOGETHER WITH: (a) all buildings, improvements and fixtures, now or in the future thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, and (c) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues, and profits, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement.
BORROWER HEREBY expressly acknowledges and agrees that the subject loan, this Deed of Trust, and the property which serves as security for the Note and Deed of Trust, involves a mixed-use, multi-family residential transaction, one that the Borrower is expressly entering into for the provision of affordable housing and not for profit, and not in any way related to Borrower’s home or residence. As such, Borrower further acknowledges and agrees that Lender likewise is making this loan on the aforesaid basis, and thus intends to enforce any and all of its rights accordingly. 89 City of Shasta Lake Land Loan Deed of Trust Page 2 of 9 FOR THE PURPOSE OF SECURING:
1. Payment of the sum of __________________________ and No/100 Dollars ($__________) with interest thereon according to the terms of a certain Promissory Note Secured by Deed of Trust of even date herewith, designated as the “Promissory Note” made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof.
2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes reciting that they are secured hereby, or (b) as may be added to the indebtedness secured hereby in accordance with the provisions of this Deed of Trust.
3. Performance of each and every obligation, covenant, promise, or agreement of Trustor contained herein.
4. Payment, with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor in interest of the Trustor to said property) to the Beneficiary reciting that they are secured hereby, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter.
5. Performance of each agreement of Trustor contained in any Development Agreement (including without limitation the Exhibits thereto) entered into between Trustor and Beneficiary for the development, construction of improvements, adoption of rent restrictions or other affordability covenants, or operation of certain activities on the above-described property.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer, or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings, and equipment located thereon.
If the loan secured hereby or any part thereof is being obtained or should any additional loan be made hereafter for the purpose of financing rehabilitation improvements or construction of affordable housing on said property, Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding: (a) to complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during construction; (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to its last known address, or by personal service of the same; (d) that 90 City of Shasta Lake Land Loan Deed of Trust Page 3 of 9 work shall not cease on the construction of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims for labor and materials furnished in connection with the said construction and/or rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the said property; and (f) not to permit any stop notice claims to be presented to Beneficiary. If the said property is part of a larger tract upon which improvements will be constructed, Trustor shall make separate contracts and subcontracts for said construction which shall pertain to the said property only and shall keep separate, full, and complete records of all work and materials furnished to the said property.
Trustee, upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein and to act thereon hereunder.
2. To provide and maintain in force at all times with respect to said property and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall contain an endorsement that such insurance shall not be canceled or modified without thirty (30) days advance written notice to Beneficiary, shall be for a term and in form, content, amount, and with such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of Trustor hereunder.
At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor, by executing this Deed of Trust, specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy theretofore delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) upon prior notice to Trustor, to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of rebuilding or restoring the building or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary.
Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 91 City of Shasta Lake Land Loan Deed of Trust Page 4 of 9
3. To pay: (a) all general and special City and County taxes affecting such property; (b) when due, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment; (c) when due, all encumbrances, charges and liens, with interest, on said property, or any part thereof, which are or appears to be prior or superior hereto; (d) if the security of this Deed of Trust is a leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold; (e) all costs, fees and expenses of this trust; (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made; (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable.
If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest.
4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) 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; (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest, or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto; and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so, expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. This provision is not intended to curtail the right of Trustor to contest any such payment in good faith.
5. To perform each agreement of Trustor contained in any Development Agreement (including without limitation the Exhibits thereto) entered into between Trustor and Beneficiary for the development, construction of improvements, adoption of rent restrictions or other affordability covenants, or operation of certain activities on the above-described property.
6. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust.
7. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby.
8. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas, or other hydrocarbon substances or any 92 City of Shasta Lake Land Loan Deed of Trust Page 5 of 9 mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any part thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily except as allowed by the Agreement, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing.
9. That any award, settlement, or damages for injury or damages to such property, or in connection with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance.
10. That, by accepting payment of any sum secured hereby after its due date, or by making any payment, or performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay.
11. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property; (b) consent to the making of any map or plat thereof; (c) join in granting any easement thereon; (d) join in any agreement subordinating the lien or charge hereof.
12. That the lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof.
13. 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, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive evidence of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as a re-assignment of the rents, issues, royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them).
14. That as additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the property affected by this Deed of Trust for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Beneficiary to be (a) "mortgagee in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, repair, or control of such property. This is an absolute assignment, not an assignment for security only, and Beneficiary's right to rents, issues, and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. 93 City of Shasta Lake Land Loan Deed of Trust Page 6 of 9 Beneficiary confers upon Trustor a license (“License”) to collect and retain the rents, issues, and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues, and profits without notice and without taking possession of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon City or Trustee the duty to produce rents, issues, or profits or maintain all or any part of the property affected by this Deed of Trust. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties, and profits and shall be authorized, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make, cancel, enforce, and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties, and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties, and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties, or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties, and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties, and profits, less all costs of operation, maintenance, collection, and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option.
15. Subject to any applicable notice and cure rights, any default by Trustor in payment of any indebtedness secured hereby or performance of any covenant or condition set forth in a Development Agreement between Trustor and Beneficiary shall constitute a default under this Deed of Trust, and upon default by Trustor under the terms of any encumbrance, charge, or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale 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 shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures secured hereby. After the lapse of such time as then may be required by law following recordation of such 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 such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder 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 recital in such Deed of any matters of fact shall be conclusive evidence of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and 94 City of Shasta Lake Land Loan Deed of Trust Page 7 of 9 as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first, of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto.
16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby.
17. That Beneficiary 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 and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers, and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee, and Beneficiary hereunder, and the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees, and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law.
18. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, transferees, successors, and assigns. The term Beneficiary” shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
19. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California (or successor statutes), Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished.
Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy.
20. That 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.
21. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, if said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if and notwithstanding that Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable.
22. That Trustor has made certain representations and disclosures in order to induce 95 City of Shasta Lake Land Loan Deed of Trust Page 8 of 9 Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder.
Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address herein above set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing.
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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 him at his address hereinbefore set forth.
Dated: _______________, 2022
Signature of Trustor(s):
Shasta Lake Downtown Housing, LP,
96 City of Shasta Lake Land Loan Deed of Trust Page 9 of 9 a California limited partnership:
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company
Its: Administrative general partner
By:
Daniel Knott
Its: Manager
By: Community Revitalization and Development Corporation, a California nonprofit public benefit corporation
Its: Managing general partner
By:
David Rutledge
Its: President
EXHIBIT 1 - Legal Description
97 3/28/2023
EXHIBIT 9
PREDEVELOPMENT LOAN PROMISSORY NOTE SECURED
BY
DEED TRUST
DO NOT DESTROY THIS NOTE: When paid, this note, with Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made.
Amount: $1,500,000 __________ _, 2023
Shasta Lake, California
FOR VALUE RECEIVED, Shasta Lake Downtown Housing, LP, a California limited partnership, ("Borrower"), promises to pay to the order of the City of Shasta Lake ("Holder"), the principal sum of up to One Million Five Hundred Thousand and No/100 Dollars ($1,500,000), pursuant to Section 4 below.
1. Borrower’s Obligation. This promissory note (“Note”) evidences Borrower’s obligation to pay Holder the principal amount of up to One Million Five Hundred Thousand and No/100 Dollars ($1,500,000) for the development of certain real property (“Project”) pursuant to a Disposition and Development Agreement between Borrower and Holder dated ____________, 2023 (“Agreement”). All capitalized terms not defined herein shall have the meaning given in the Agreement.
2. Interest. The principal balance of this Note shall not bear interest; provided, however, if an event of default occurs, interest on the principal balance shall begin to accrue, as of the date of the event of default and continuing until the earlier of the Loan funds being paid in full or cure of such event of default, at the default rate of the lesser of: ten percent (10%), compounded annually; or the highest rate permitted by law.
3. Term and Repayment Requirements. The term of this Note (“Term”) shall commence with the date of this Note and shall expire upon the earlier of the AHSC Conduit Loan(s) and fifty-five (55) years from the date of recordation of a Notice of Completion by the City, at which time the remaining balance of principal and interest shall be due and payable.
4. Terms of Payment.
a. All principal and interest payments are payable in lawful money of the United States. b. All payments on this note shall be paid to the City of Shasta Lake at 4477 Main Street, Shasta Lake, California, or to such other place as holder of this note may from time to time designate. c. Pursuant to Section 3.5 of the Agreement upon disbursement of loan proceeds to Borrower Holder will request reimbursement for such disbursement of funds from the California Department of Housing and Community Development (“HCD”). Holder will credit any such reimbursement against the outstanding principal balance upon receipt. d. Except in the event of acceleration of this Note pursuant to Section 6b below or receipt of reimbursement from HCD pursuant to Section 5c above no payments of principal or interest are 98 City of Shasta Lake Predevelopment Loan Promissory Note Page 2 of 4
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due until the expiration of the Term. All and outstanding principal and accrued interest will be due and payable by Borrower upon the expiration of the Term.
e. All payments on this Note shall be without expense to Holder, and Borrower agrees to pay all costs and expenses, including reconveyance fees and reasonable attorney’s fees of Holder, incurred in connection with the payment of this Note and the release of any security hereof. f. Notwithstanding any other provision of this Note, or any instrument securing the obligations of Borrower under this Note, if, for any reason whatsoever, the payment of all sums by Borrower pursuant to the terms of this Note would result in the payment of interest which would exceed the amount that 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 Note, so that in no event shall Borrower be obligated under the terms of this Note to pay any interest which would exceed the lawful rate.
g. The whole of this Note shall be nonrecourse to Borrower.
5. Disbursement. Loan proceed will be disbursed to Borrower by Holder pursuant to Sections
4.2.1 and 7.2 of the Agreement. Upon receipt by Holder of reimbursement from HCD pursuant to Section 5c above such amount will again be available to Borrower so that at any time during the Term of this Note the outstanding principal balance may be up to One Million Five Hundred Thousand and No/100 Dollars ($1,500,000).
6. Default.
a. Any of the following shall constitute an event of default under this Note and are subject to the applicable notice and cure rights.
1) Any failure to pay, in full, any payment required under this Note when due. 2) Any failure in the performance by Borrower of any term, condition, provision, or covenant set forth in this Note.
3) The occurrence of any event of default under the Agreement, the Deed of Trust, or the City Declaration of Affordability Restrictions, (as defined in the Agreement). b. Upon the occurrence of such an event of default and the expiration of the applicable cure period, the entire unpaid principal balance, together with all interest thereon, and together with all sums then payable under this Note and the Deed of Trust shall at the option of Holder become immediately due and payable upon written notice by Holder to Borrower without further demand. c. The failure to exercise the remedy set forth in subsection 6b 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 wavier 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 that 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 99 City of Shasta Lake Predevelopment Loan Promissory Note Page 3 of 4
3/28/2023
exercise of any such remedy or option, without the express consent of Holder, except as and to the extent otherwise provided by law.
d. Holder hereby agrees that any cure made or tendered by the Limited Partner shall be deemed to be made by the Borrower and shall be accepted or rejected on the same basis. Notices to the Limited Partner required hereunder shall be given at the following address:
7. No Assumption. This Note shall not be assumable by the successors and assigns of Borrower without the prior written consent of Holder, which consent shall not be unreasonably withheld.
8. Security. This Note is secured by a Deed of Trust and Security Agreement (“Deed of Trust”), of even date herewith, wherein Borrower is the Trustor and Holder is the Beneficiary, covering the Property.
9. Waivers.
a. Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, notice of dishonor and notice of nonpayment of this Note. Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time, and that Holder may accept further security or release any security for this Note, all without in any way affecting the liability of Borrower.
b. No extension of time for payment of this Note or any installment hereof made by agreement by Holder with any person now or hereafter liable for payment of this note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part.
c. The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct, or withhold any payments or charges due under this Note for any reason whatsoever.
10. Miscellaneous Provisions.
a. Borrower promises to pay all costs and expenses, including reasonable attorney’s fees, incurred by Holder in the enforcement of the provisions of this Note, regardless of whether suit is filed to seek enforcement.
b. This 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. c. This Note shall be governed by and construed in accordance with the laws of the State of California.
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100
City of Shasta Lake Predevelopment Loan Promissory Note Page 4 of 4
3/28/2023
Shasta Lake Downtown Housing, LP,
a California limited partnership:
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company
Its: Administrative general partner
By:
Daniel Knott
Its: Manager
By: Community Revitalization and Development Corporation, a California nonprofit public benefit corporation
Its: Managing general partner
By:
David Rutledge
Its: President
101
EXHIBIT 10
RECORDING REQUESTED BY:
City of Shasta Lake
CITY BUSINESS - NO FEE
Section 6103 of the Government Code
of the State of California
AND WHEN RECORDED MAIL TO:
City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
CITY OF SHASTA LAKE PREDEVELOPMENT LOAN
DEED OF TRUST WITH ASSIGNMENTS OF RENTS
THIS PREDEVELOPMENT LOAN DEED OF TRUST is made this __th day of ____________2023, by Shasta Lake Downtown Housing, LP, a California limited partnership, as to equitable title, herein called “Trustor,” and/or “Borrower” whose address is 1101 Parkview Avenue, Suite A, Redding, CA 96001; PLACER TITLE COMPANY, herein called “Trustee,” whose address is 2145 Larkspur Lane, Suite A, Redding, CA 96002; and the CITY OF SHASTA LAKE, a municipal government, whose address is 4477 Main Street, Shasta Lake, California 96019, herein called “Beneficiary” and/or the “Lender”.
WITNESSETH: That Trustor Irrevocably, Grants, Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Shasta Lake, County of Shasta, State of California, described as:
EXHIBIT 1 - Legal Description
TOGETHER WITH: (a) all buildings, improvements and fixtures, now or in the future thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, and (c) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues, and profits, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement.
BORROWER HEREBY expressly acknowledges and agrees that the subject loan, this Deed of Trust, and the property which serves as security for the Note and Deed of Trust, involves a mixed-use, multi-family residential transaction, one that the Borrower is expressly entering into for the provision of affordable housing and not for profit, and not in any way related to Borrower’s home or residence. As such, Borrower further acknowledges and agrees that Lender likewise is making this loan on the aforesaid basis, and thus intends to enforce any and all of its rights accordingly. 102
City of Shasta Lake Predevelopment Loan Deed of Trust Page 2 of 9 FOR THE PURPOSE OF SECURING:
1. Payment of the sum of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000) with interest thereon according to the terms of a certain Predevelopment Loan Promissory Note Secured by Deed of Trust of even date herewith, designated as the “Promissory Note” made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof.
2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes reciting that they are secured hereby, or (b) as may be added to the indebtedness secured hereby in accordance with the provisions of this Deed of Trust.
3. Performance of each and every obligation, covenant, promise, or agreement of Trustor contained herein.
4. Payment, with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor in interest of the Trustor to said property) to the Beneficiary reciting that they are secured hereby, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter.
5. Performance of each agreement of Trustor contained in any Development Agreement (including without limitation the Exhibits thereto) entered into between Trustor and Beneficiary for the development, construction of improvements, adoption of rent restrictions or other affordability covenants, or operation of certain activities on the above-described property.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer, or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings, and equipment located thereon.
If the loan secured hereby or any part thereof is being obtained or should any additional loan be made hereafter for the purpose of financing rehabilitation improvements or construction of affordable housing on said property, Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding: (a) to complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during construction; (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to its last known address, or by personal service of the same; (d) that 103
City of Shasta Lake Predevelopment Loan Deed of Trust Page 3 of 9 work shall not cease on the construction of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims for labor and materials furnished in connection with the said construction and/or rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the said property; and (f) not to permit any stop notice claims to be presented to Beneficiary. If the said property is part of a larger tract upon which improvements will be constructed, Trustor shall make separate contracts and subcontracts for said construction which shall pertain to the said property only and shall keep separate, full, and complete records of all work and materials furnished to the said property.
Trustee, upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein and to act thereon hereunder.
2. To provide and maintain in force at all times with respect to said property and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall contain an endorsement that such insurance shall not be canceled or modified without thirty (30) days advance written notice to Beneficiary, shall be for a term and in form, content, amount, and with such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of Trustor hereunder.
At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor, by executing this Deed of Trust, specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy theretofore delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) upon prior notice to Trustor, to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of rebuilding or restoring the building or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary.
Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 104
City of Shasta Lake Predevelopment Loan Deed of Trust Page 4 of 9
3. To pay: (a) all general and special City and County taxes affecting such property; (b) when due, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment; (c) when due, all encumbrances, charges and liens, with interest, on said property, or any part thereof, which are or appears to be prior or superior hereto; (d) if the security of this Deed of Trust is a leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold; (e) all costs, fees and expenses of this trust; (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made; (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable.
If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest.
4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) 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; (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest, or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto; and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so, expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. This provision is not intended to curtail the right of Trustor to contest any such payment in good faith.
5. To perform each agreement of Trustor contained in any Development Agreement (including without limitation the Exhibits thereto) entered into between Trustor and Beneficiary for the development, construction of improvements, adoption of rent restrictions or other affordability covenants, or operation of certain activities on the above-described property.
6. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust.
7. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby.
8. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas, or other hydrocarbon substances or any 105
City of Shasta Lake Predevelopment Loan Deed of Trust Page 5 of 9 mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any part thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily except as allowed by the Agreement, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing.
9. That any award, settlement, or damages for injury or damages to such property, or in connection with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance.
10. That, by accepting payment of any sum secured hereby after its due date, or by making any payment, or performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay.
11. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property; (b) consent to the making of any map or plat thereof; (c) join in granting any easement thereon; (d) join in any agreement subordinating the lien or charge hereof.
12. That the lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof.
13. 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, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive evidence of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as a re-assignment of the rents, issues, royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them).
14. That as additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the property affected by this Deed of Trust for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Beneficiary to be (a) "mortgagee in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, repair, or control of such property. This is an absolute assignment, not an assignment for security only, and Beneficiary's right to rents, issues, and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. 106
City of Shasta Lake Predevelopment Loan Deed of Trust Page 6 of 9 Beneficiary confers upon Trustor a license (“License”) to collect and retain the rents, issues, and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues, and profits without notice and without taking possession of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon City or Trustee the duty to produce rents, issues, or profits or maintain all or any part of the property affected by this Deed of Trust. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties, and profits and shall be authorized, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make, cancel, enforce, and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties, and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties, and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties, or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties, and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties, and profits, less all costs of operation, maintenance, collection, and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option.
15. Subject to any applicable notice and cure rights, any default by Trustor in payment of any indebtedness secured hereby or performance of any covenant or condition set forth in a Development Agreement between Trustor and Beneficiary shall constitute a default under this Deed of Trust, and upon default by Trustor under the terms of any encumbrance, charge, or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale 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 shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures secured hereby. After the lapse of such time as then may be required by law following recordation of such 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 such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder 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 recital in such Deed of any matters of fact shall be conclusive evidence of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and 107
City of Shasta Lake Predevelopment Loan Deed of Trust Page 7 of 9 as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first, of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto.
16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby.
17. That Beneficiary 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 and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers, and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee, and Beneficiary hereunder, and the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees, and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law.
18. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, transferees, successors, and assigns. The term Beneficiary” shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
19. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California (or successor statutes), Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished.
Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy.
20. That 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.
21. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, if said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if and notwithstanding that Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable.
22. That Trustor has made certain representations and disclosures in order to induce 108
City of Shasta Lake Predevelopment Loan Deed of Trust Page 8 of 9 Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder.
Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address herein above set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth.
Dated: _______________, 2022
Signature of Trustor(s):
Shasta Lake Downtown Housing, LP,
109
City of Shasta Lake Predevelopment Loan Deed of Trust Page 9 of 9 a California limited partnership:
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company
Its: Administrative general partner
By:
Daniel Knott
Its: Manager
By: Community Revitalization and Development Corporation, a California nonprofit public benefit corporation
Its: Managing general partner
By:
David Rutledge
Its: President
EXHIBIT 1 - Legal Description
110
1 EXHIBIT 11
LOAN AGREEMENT
(AHSC FUNDS)
This Loan Agreement (this "Agreement") is entered into effective as of _______, 202_ ("Effective Date") by and between the CITY OF SHASTA LAKE, a municipal government (the "Lender"), and SHASTA LAKE DOWNTOWN HOUSING, LP, a California limited partnership ("Borrower"). Borrower and Lender are hereinafter collectively referred to as the "Parties."
RECITALS
A. Borrower has proposed to cause 49 multifamily residential units (the "Project") to be constructed on real property located at the 4601, 4617, 4633, 4640, 4650, and 4657 Shasta Dam Boulevard, Shasta Lake California (the "Property").
B. Lender, ADK Properties LLC (the sole member of the administrative general partner of Borrower), Community Revitalization and Development Corporation (the managing general partner of Borrower) and Win River Hotel Corporation (each, a “Sponsor”, and collectively, “Sponsors”) have been awarded funding by the State of California Department of Housing and Community Development ("HCD") from the Affordable Housing and Sustainable Communities Program established by HCD in accordance with California Public Resources Code commencing with Section 75200 (the "AHSC Program"). The funds awarded by HCD pursuant to the AHSC Program include $2,435,000 of grant funds for housing related infrastructure, $4,939,875 of grant funds for sustainable transportation infrastructure and $3,052,875 of grant funds for transit related improvements which are referred to herein as the "HCD Funds." Use of the HCD Funds is governed by that certain Standard Agreement __-AHSC-_____ by and between HCD and the Sponsors (the "HCD Standard Agreement"). Pursuant to the HCD Standard Agreement, HCD and Sponsors, will enter into a Disbursement Agreement pertaining to the HCD Funds (the “HCD Disbursement Agreement”) and the Borrower will enter into a Declaration of Restrictive Covenants for the Development and Operation of Affordable Housing in favor of HCD (the “HCD Restrictive Covenant”). Collectively, the HCD Standard Agreement, the HCD Disbursement Agreement and the HCD Restrictive Covenant are referred to herein as the "HCD Documents."
C. Borrower has requested and Lender has agreed, to use a portion of the HCD funds to provide a loan (the "Loan") to Borrower, subject to the terms and conditions set forth in this Agreement, solely for the purpose of reimbursing Borrower for costs incurred in connection with the development of the Project.
D. Concurrently herewith Borrower will execute a promissory note ("Note") in the amount of the Loan substantially in the form attached hereto as Exhibit A. Repayment of the Note will be secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") to be executed by Borrower substantially in the form attached hereto as Exhibit B and recorded against the Property. This Agreement, the Note, and the Deed of Trust are collectively hereinafter referred to as the "Loan Documents."
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
111
2 1. THE LOAN AND DISBURSEMENT OF LOAN PROCEEDS.
1.1 Loan and Note. Lender agrees to loan to Borrower, and Borrower agrees to borrow from and repay to Lender, a sum in the maximum principal amount not to exceed $_____________, upon the terms and conditions and for the purposes set forth in this Agreement. The Loan shall be evidenced by the Note, which shall be dated as of the Effective Date and executed by Borrower substantially in the form attached hereto as Exhibit A. The proceeds of the Loan (the "Loan Proceeds") shall be disbursed in accordance with Section 1.6 hereof.
1.2 Interest Rate; Maturity Date. No interest shall accrue on the principal balance of this Note. Unless the Parties agree otherwise pursuant to a written amendment to this Agreement, the entire outstanding principal balance of the Loan shall be payable in one lump sum on the fifty-fifth (55th) anniversary of the date upon which the City of Shasta Lake issues a final certificate of occupancy or equivalent for the Project.
1.3 Prepayment. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under the Note.
1.4 Security for the Loan. Repayment of the Note shall be secured by the Deed of Trust.
1.5 Use of Loan Proceeds. The Loan Proceeds shall be used solely and exclusively for approved costs incurred in connection with the development of the Project and related infrastructure improvements as set forth in the HCD Documents. Funds shall be disbursed to Borrower on a costreimbursement basis in accordance with Section 1.6.
1.6 Disbursement of Proceeds. Following the execution of the HCD Disbursement Agreement, as a condition to the disbursement of Loan Proceeds by Lender hereunder, Borrower shall deliver to Lender a written requisition specifying the amount and use of the requested Loan Proceeds ("Requisition") accompanied by copies of third-party invoices, evidence of Borrower's payment for services rendered in connection with the Project, Borrower's certification that the funds requested will be used solely for the purposes described in the Requisition, and such other documentation as Lender may reasonably require, including without limitation, all documentation required by HCD. Concurrently with the submission of the Requisition to Lender, Borrower shall also cause a funding request to be submitted to HCD for such amounts. Lender shall disburse Loan Proceeds to Borrower within five (5) business days following Lender's receipt of such funds from HCD. To the extent that HCD has not disbursed funds to Lender solely as a result of a default by Lender (and not the Borrower or any affiliate of Borrower) pursuant to the HCD Documents, Lender shall be obligated to disburse the Loan Proceeds to Borrower notwithstanding the fact that HCD has not disbursed the HCD Funds to Lender.
1.7 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the Lender shall have no obligation to disburse any portion of the Loan Proceeds following:
(a) the failure of any of Borrower's representations and warranties set forth in this Agreement to be true and correct in all material respects; (b) termination of this Agreement by mutual agreement of the Parties; or (c) the occurrence and continuance of an Event of Default on the part of Borrower under this Agreement, the Note, the Deed of Trust or the HCD Documents. 112
3 2. NON-DISCRIMINATION.
2.1 Non Discrimination. Borrower covenants by and for itself and its successors and assigns 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 Project or the Property, 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 Project.
3. ADDITIONAL COVENANTS, REPRESENTATIONS AND WARRANTIES OF BORROWER AND LENDER.
3.1 Representations of Borrower. Borrower represents and warrants to the Lender as follows:
(a) Organization of Borrower. Borrower is duly organized, validly existing and in good standing under the laws of the State of California. Borrower has all requisite power and authority to acquire the Property, to develop, own and operate the Project, to carry on its business as now conducted, and to execute, deliver and perform its obligations under this Agreement, the Note, the HCD Documents, and the Deed of Trust.
(b) Authorization of the Loan; No Violation. The execution, delivery and performance of this Agreement, the Note, the HCD Documents, and the Deed of Trust have been duly authorized by Borrower, and each such document, when duly executed and delivered, will constitute the valid and binding obligation of Borrower enforceable in accordance with its terms. Borrower's execution of each such document and performance thereunder will not result in a breach of or constitute a default under any agreement, indenture or other instrument to which Borrower is a party or by which Borrower may be bound. The persons executing each such document on behalf of Borrower have been duly authorized to do so.
(c) Litigation. There are no pending or threatened actions or proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Borrower or any of its general partners or Borrower's ability to carry out the obligations of Borrower under this Agreement. Neither Borrower nor any of its general partners are the subject of an action under federal or state Bankruptcy Law.
3.2 Compliance with AHSC Program and HCD Documents. Borrower and Lender each covenant and agree to comply with all requirements of the AHSC Program and HCD Documents.
Borrower further covenants and agrees to the use of the Loan Proceeds, construct and operate the Project in accordance with the AHSC Program and the HCD Documents.
3.3 Books and Records. The Lender shall have the right, during business hours and after reasonable notice to Borrower, to inspect and copy Borrower's books and records concerning the Property, the Project and the Loan.
3.4 Other Documents. Upon Lender's request, Borrower shall deliver to the Lender copies of documents related to the Project, including without limitation, construction contracts, consulting 113
4 agreements, architects' agreements, loan and financing applications, studies, reports, loan documents, management plans, and property management agreements.
4. DEFAULT AND REMEDIES.
4.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"):
(a) Borrower fails to pay when due the principal amount payable hereunder and such failure continues for ten (10) days after Lender notifies Borrower thereof in writing. (b) A default on the part of Borrower arises under any HCD Document or under this Loan Agreement and remains uncured beyond the expiration of the applicable cure period, or if there is no applicable cure period, thirty (30) days after Lender gives Borrower written notice of such Event of Default.
(c) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
(d) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Borrower or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within sixty (60) days after its issuance.
(e) Borrower fails to maintain insurance on the Property and the Project as required under the HCD Documents or the Deed of Trust and Borrower fails to cure such default within ten (10) days after Lender notifies Borrower thereof in writing. (f) Subject to Borrower’s right to contest the following charges, if Borrower fails to pay taxes or assessments due on the Property or the Project or fails to pay any other charge that may result in a lien on the Property or the Project, and Borrower fails to cure such default within thirty (30) days after Lender notifies Borrower thereof in writing, but in all cases before the imposition of any such tax or other lien.
(g) Any representation or warranty made by Borrower in any certificate furnished in connection with the HCD Documents or the Loan Agreement, or in connection with any Borrower request for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made and continues to be materially adverse to the Lender and Borrower fails to correct or cure the same to Lender’s satisfaction within thirty (30) days after Lender notifies Borrower thereof in writing.
4.2 Remedies. Upon the occurrence and continuance of an Event of Default, the Lender shall have the following rights, in addition to any other rights and remedies provided by law:
114
5 (a) The Lender may declare the entire outstanding principal balance of the Loan immediately due and payable;
(b) The Lender may foreclose on the Property pursuant to the Deed of Trust; (c) The Lender may seek an order of specific performance; and (d) The Lender may terminate this Agreement.
Each of the remedies provided herein is cumulative and not exclusive of, and shall not prejudice any other remedy provided herein, in the Note, or the Deed of Trust. Subject to any restriction in the HCD Documents, the Lender may exercise any rights and remedies available under applicable law, in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement. Notwithstanding anything to the contrary contained herein, Lender shall not accelerate the Loan or exercise any right or remedy provided herein or any other Loan Document (A) at any time prior to the expiration of the 15-year tax credit compliance period (the “Compliance Period”) for the Project determined pursuant to Section 42(i)(1) of the Internal Revenue Code of 1986, as amended, or (B) at any time without the written consent of HCD in its full and absolute discretion.
5. MISCELLANEOUS.
5.1 Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.
5.2 Insurance. Borrower shall maintain and keep in force, at Borrower's expense, the insurance coverage required pursuant to the HCD Documents. For each of Borrower's insurance policies, Borrower shall provide to Lender within ten (10) days following execution of this Agreement, but in no event later than the initial disbursement of Loan Proceeds, a certificate of insurance and an endorsement which provides that no cancellation, major change in coverage or expiration will be effective during the term of this Agreement without 30 days written notice to the Lender prior to the effective date of such cancellation, change in coverage or expiration. Upon request by the Lender from time to time, Borrower shall deliver to the Lender originals or copies of all such insurance policies and certificates evidencing such policies.
5.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(a) personal delivery, in which case notice is effective upon delivery; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (c) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service;
(d) electronic mail transmission, in which case notice shall be deemed delivered upon transmittal, except that if the time of such transmission is after 5:00 p.m. recipient's time or 115
6 the date of such transmission is not a business day, then such notice shall be deemed to be given on the first business day following such transmission.
LENDER: City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
Attention: City Manager
BORROWER: Shasta Lake Downtown Housing, LP
1011 Parkview Avenue, Suite A
Redding, CA 96001
Attention: Allen Knott
With a copy to: ____________________
____________________
____________________
Attention: ____________
5.4 Waiver, Modification and Amendment. No failure or delay on the part of the Lender in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. No modification or waiver of any provision of this Agreement, nor any consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. No amendment to or modification of this Agreement shall be effective unless and until such amendment or modification is in writing, properly approved in accordance with applicable procedures, and executed by the Parties.
5.5 Further Assurances. The Parties shall execute, acknowledge and deliver to the other Parties such other documents and instruments, and shall take such other actions, as may reasonably be necessary to carry out the intent of this Agreement.
5.6 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish Borrower and Lender as partners, co-venturers, or principal and agent with one another.
5.7 Action by the Lender. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Lender is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the Lender's governing board unless the City Manager determines in his or her discretion that such action requires such approval.
5.8 Non Liability of Lender and Lender Officials, Employees and Agents. No member, official, employee or agent of the Lender (each a “Lender Official”) shall be personally liable to Borrower in the event of any default or breach by the Lender, or for any amount of money which may become due to Borrower from Lender , or for any other obligation of Lender under this Agreement. 116
7 5.9 Captions; Construction; Time is of the Essence. The headings of the sections and paragraphs of this Agreement have been inserted for convenience only and shall not be used to construe this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. Time is of the essence in the performance of this Agreement.
5.10 Governing Law; Venue. This Agreement, the Note, and the Deed of Trust, shall be construed and enforced in accordance with the laws of the State of California without regard to principles of conflicts of law. The Parties consent to the jurisdiction of any federal or state court having jurisdiction in Shasta County, California. Borrower agrees that any controversy arising under or in relation to this Agreement, the Note, or the Deed of Trust, shall be litigated exclusively in courts having jurisdiction in Shasta County. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.
5.11 Attorneys' Fees. In the event any legal action is commenced to interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing in any such action shall be entitled to recover against the other Parties all reasonable attorneys' fees and costs incurred in such action.
5.12 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 are materially altered or abridged by such invalidation, voiding or unenforceability.
5.13 Entire Agreement; Exhibits. This Agreement, together with the Note, the Deed of Trust, and the HCD Documents and the additional documents referenced herein contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto.
5.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.
5.15 Lender Status. Borrower recognizes and agrees that Lender is not a commercial lending institution. Any duties or obligations which a commercial lending institution may have to Borrower shall not apply to this transaction except as set forth herein or in the Note or as otherwise required by law.
5.16 Removal of General Partner. Notwithstanding anything to the contrary in this Agreement, or any of the other Loan Documents, the removal and replacement of Borrower's general partner by the Borrower’s tax credit investor without Lender’s prior written consent shall not constitute a default under any of the Loan Documents or accelerate the maturity of the Loan. In the case of such a removal and/or replacement, Lender's prior written consent shall not be required for any amendment or other modification of Borrower's partnership agreement to document and reflect such removal and/or replacement.
5.17 Transfer of Tax Credit Investor Interest. Notwithstanding anything to the contrary in any of the Loan Documents, the interests of the Borrower's limited partner or tax credit investor shall be transferable to a transferee without Lender’s prior written consent and such transfer shall not constitute an Event of Default, or default under any of the Loan Documents. In the case of such transfer, Lender's prior written consent shall not be required for any amendment or other modification of Borrower's partnership agreement to document and reflect such transfer.
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8 5.18 Withdrawal of a Partner. Notwithstanding anything to the contrary in any of the Loan Documents, neither the withdrawal, removal, replacement, and/or addition of the general partner of Borrower pursuant to the terms of Borrower's partnership agreement, nor the withdrawal, replacement, and/or addition of any of Borrower's limited partners or its limited partner's general partners or members, shall constitute an Event of Default or default under any of the Loan Documents, and such actions shall not accelerate the maturity of the Loan.
5.19 Cure by Limited Partner. Lender agrees that any of the limited partners of Borrower shall have the right, but not the obligation, to cure any Event of Default or default by Borrower under any of the Loan Documents; provided, however, the cure period shall be extended by 60 days. Lender further agrees any cure of any Event of Default or default made by the limited partners of Borrower shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if made by Borrower. Provided that Lender has been given written notice of the address for delivery of notices to the limited partners, Lender shall provide any notice of default hereunder to the limited partners concurrently with the provision of such notice to Borrower, and as to the limited partners, the cure periods specified herein shall commence upon the date of delivery of such notice to Borrower's tax credit investor at the following address:
____________________
____________________
____________________
Attention: ____________
Fax No.: _____________
With a copy to:
____________________
____________________
____________________
Attention: ____________
Fax No.: _____________
5.20 Subordination to Other Project Loans. Notwithstanding anything to the contrary in any Loan Document, the Lender acknowledges that this Loan and the Loan Documents shall be subordinate to: (i) a construction and permanent loan from ____________; (ii) a land loan from the City of Shasta Lake; and (iv) a direct loan of AHSC funds from HCD. [remainder of page intentionally left blank]
[signature page next page]
118
S - 1
Block 7 - AHSC Loan Agmt (1)
IN WITNESS WHEREOF, the Parties have executed this Loan Agreement as of the date first written above.
LENDER:
CITY OF SHASTA LAKE,
a municipal government
By:___________________________
Jessaca Lugo, City Manager
APPROVED AS TO FORM:
By:___________________________
John Kenny, City Attorney
ATTEST:
By:___________________________
Toni Coates, City Clerk
BORROWER:
SHASTA LAKE DOWNTOWN HOUSING, LP,
a California limited partnership
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company,
its Administrative General Partner
By:
Daniel Knott
Manager
By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General Partner
By:
David Rutledge
President
119
A - 1
EXHIBIT A
FORM OF PROMISSORY NOTE
(ATTACHED)
120
EXHIBIT B
FORM OF DEED OF TRUST
(ATTACHED)
121
EXHIBIT 12
SECURED PROMISSORY NOTE
(AHSC Funds)
$____________ Shasta Lake, California
_________, 202_
FOR VALUE RECEIVED, SHASTA LAKE DOWNTOWN HOUSING, LP, a California limited partnership (“Borrower”), promises to pay to the CITY OF SHASTA LAKE, a municipal government (the “Lender”), in lawful money of the United States of America, the principal sum of $________ or so much thereof as may be advanced by Lender from time to time pursuant to the HCD Documents and the Loan Agreement referred to below.
This Secured Promissory Note (this “Note”) has been executed and delivered pursuant to and in accordance with that certain Loan Agreement (AHSC Funds) dated as of ________, 202_ and executed by and between Lender and Borrower (the “Loan Agreement”). Pursuant to the Loan Agreement, the California Department of Housing and Community Development, a public agency of the State of California (“HCD”), Lender, Community Revitalization and Development Corporation, ADK Properties LLC and Win River Hotel Corporation, will enter into a Disbursement Agreement pertaining to HCD’s award of funds pursuant to the Affordable Housing and Sustainable Communities Program established by HCD in accordance with California Public Resources Code commencing with Section 75200 (the “AHSC Disbursement Agreement”), and a Declaration of Restrictive Covenants for the Development and Operation of Affordable Housing executed by Borrower in favor of HCD (the “HCD Restrictive Covenant”). Collectively, the AHSC Disbursement Agreement, HCD Restrictive Covenant, and the HCD Standard Agreements (defined in the Loan Agreement) are referred to herein as the “HCD Documents.” Borrower has requested, and, Lender has agreed, to loan to Borrower certain funds that Lender receives from HCD pursuant to the HCD Documents (the “HCD Funds”), solely for the purpose of reimbursing Borrower for costs incurred in connection with the development of an affordable housing development (the “Project”) on real property located at the 4601, 4617, 4633, 4640, 4650, and 4657 Shasta Dam Boulevard, Shasta Lake California (the “Property”), and related infrastructure improvements.
This Note is secured by that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) executed by Borrower, as trustor, for the benefit of Lender, which shall be recorded against the Property. Lender shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Loan Agreement and in the Deed of Trust.
1. PAYMENTS.
1.1 INTEREST RATE; MATURITY DATE. This Note shall not bear interest.
The entire principal balance outstanding under this Note shall be due and payable in one lump sum 122
2 on the date (the “Maturity Date”) which is the fifty-fifth (55th) anniversary of the date upon which the City of Shasta Lake issues a final certificate of occupancy or equivalent for the Project.
1.2 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note.
1.3 MANNER OF PAYMENT. All payments of principal and interest on this Note shall be made to Lender at 4477 Main Street, Shasta Lake, CA 96019 or such other place as Lender shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by Lender in writing.
2. DEFAULTS AND REMEDIES.
2.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(A) Borrower fails to pay when due the principal amount payable hereunder and such failure continues for ten (10) days after Lender notifies Borrower thereof in writing.
(B) A default on the part of Borrower (or any affiliate of Borrower) arises under any HCD Document or under the Loan Agreement and remains uncured beyond the expiration of the applicable cure period, or if there is no applicable cure period, thirty (30) days after Lender gives Borrower written notice of such Event of Default. (C) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
(D) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Borrower or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within ninety (90) days after its issuance.
(E) Borrower fails to maintain insurance on the Property and the Project as required under the HCD Documents or the Deed of Trust and Borrower fails to cure such default within ten (10) days.
123
3 (F) Subject to Borrower’s right to contest the following charges, if Borrower fails to pay taxes or assessments due on the Property or the Project or fails to pay any other charge that may result in a lien on the Property or the Project, and Borrower fails to cure such default within thirty (30) days, but in all cases before the imposition of any such tax or other lien.
(G) Any representation or warranty made by Borrower in any certificate furnished in connection with the HCD Documents or the Loan Agreement, or in connection with any Borrower request for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made and continues to be materially adverse to the Lender and Borrower fails to correct or cure the same to Lender’s satisfaction within thirty (30) days after Lender notifies Borrower thereof in writing.
Lender agrees that any of the limited partners of Borrower shall have the right, but not the obligation, to cure any Event of Default or default by Borrower under any of the Loan Documents; provided, however, the cure period shall be extended by 60 days. Lender further agrees any cure of any Event of Default or default made by the limited partners of Borrower shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if made by Borrower.
Provided that Lender has been given written notice of the address for delivery of notices to the limited partners, Lender shall provide any notice of default hereunder to the limited partners concurrently with the provision of such notice to Borrower, and as to the limited partners, the cure periods specified herein shall commence upon the date of delivery of such notice to Borrower's tax credit investor at the following address:
With a copy to:
2.2 REMEDIES. Upon the occurrence of an Event of Default hereunder and subject to the terms and conditions in the Loan Documents and the restrictions contained in the HCD Documents, Lender may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to Lender, including without limitation the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of Lender including, without limitation, reasonable attorneys' fees, incurred in connection with Lender's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. The rights and remedies of Lender under this Note shall be cumulative and not alternative. Notwithstanding anything to the contrary contained herein, Lender shall not accelerate this Note or exercise any right or remedy provided herein at any time prior the expiration of the 15-year tax credit compliance period (the “Compliance Period”) for the Project determined pursuant to Section 124
4 42(i)(1) of the Internal Revenue Code of 1986, as amended, or at any time without the written consent of HCD in its full and absolute discretion.
3. MISCELLANEOUS.
3.1 NONRECOURSE. Anything contained in any provision of the Loan Agreement, the Deed of Trust or this Note notwithstanding, the Loan shall be a nonrecourse obligation of Borrower. Neither Borrower nor any of its officers, directors or general and limited partners shall have any personal liability for repaying the principal or interest of the Loan or for any other obligation set forth in this Note or in any other Loan Document. The sole recourse of Lender for repayment of the principal and interest shall be the exercise of Lender’s rights against the Project under the Deed of Trust.
3.2 WAIVERS; BORROWER’S WAIVERS. No waiver by Lender of any right or remedy under this Note shall be effective unless in a writing signed by Lender. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by Lender will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. No waiver that may be given by Lender will be applicable except in the specific instance for which it is given. No notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of Lender to take further action without notice or demand as provided in this Note.
To the maximum extent permitted by applicable law Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice.
3.3 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 5.3 and 5.19 of the Loan Agreement.
3.4 SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
3.5 GOVERNING LAW; VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Any legal action filed in connection with this Note shall be filed in the Superior Court of Shasta County, California, or in the Federal District Court for the Eastern District of California.
3.6 PARTIES IN INTEREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of Lender and its successors and assigns.
3.7 SECTION HEADINGS, CONSTRUCTION; AMENDMENTS. The
headings of Sections in this Note are provided for convenience only and will not affect its 125
5 construction or interpretation. There shall be no amendment to or modification of this Note except by written instrument executed by Borrower and Lender.
3.8 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and Lender under this Note is solely that of borrower and lender, and the loan evidenced by this Note and secured by the Deed of Trust will in no manner make Lender the partner or joint venturer of Borrower.
3.9 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note.
[SIGNATURE PAGE FOLLOWS]
126
S-1
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above.
BORROWER:
SHASTA LAKE DOWNTOWN HOUSING, LP,
a California limited partnership
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company,
its Administrative General Partner
By:
Daniel Knott
Its Manager
By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General Partner
By:
David Rutledge
President
127
1 EXHIBIT 13
RECORDING REQUESTED BY:
City of Shasta Lake
CITY BUSINESS - NO FEE
Section 6103 of the Government Code
of the State of California
AND WHEN RECORDED MAIL TO:
City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
Space above this line for Recorder's use.
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(AHSC Funds)
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of ____________, 202_, by SHASTA LAKE DOWNTOWN HOUSING, LP, a California limited partnership ("Trustor"), to Placer Title Company, as trustee ("Trustee"), for the benefit of the CITY OF SHASTA LAKE, a municipal government ("Beneficiary" or “Lender”).
RECITALS
A. Trustor owns a fee interest in the land described in Exhibit A attached hereto and incorporated herein by this reference (the "Land"). Trustor intends to construct, own and operate an affordable multifamily residential development on the Land (the "Project").
B. This Deed of Trust has been executed and delivered pursuant to: (i) that certain unrecorded Standard Agreement by and between HCD, Sponsors (as defined in the Loan Agreement) and Lender, pertaining to HCD's award of the HCD Funds (the "HCD Standard Agreements"), by and between the California Department of Housing and Community Development ("HCD") and Beneficiary, pertaining to HCD's award of certain funds (the "AHSC Funds") pursuant to the Affordable Housing and Sustainable Communities Program established by HCD in accordance with California Public Resources Code commencing with Section 75200, and (ii) that certain Loan Agreement (AHSC Funds) dated as of ________, 2020, by and between Beneficiary and Trustor (the "Loan Agreement"), pursuant to which Beneficiary agreed to loan the AHSC Funds to Trustor for the purpose of partially financing the Project and related infrastructure, and (iii) a secured promissory note in the amount of $____________ executed by Trustor and evidencing Trustor's obligation to repay the AHSC Funds to Beneficiary (the "Note"). Pursuant to 128
2 the HCD Standard Agreement, HCD, and Sponsors will enter into a Disbursement Agreement pertaining to the HCD Funds (the “HCD Disbursement Agreement”), and Trustor will enter into a Declaration of Restrictive Covenants for the Development and Operation of Affordable Housing executed in favor of HCD (the “HCD Restrictive Covenants”). Collectively, the HCD Disbursement Agreement, HCD Restrictive Covenant, and the HCD Standard Agreement are referred to herein as the "HCD Documents" and the Loan Agreement, this Deed of Trust and the Note are referred to herein as the "Loan Documents."
C. As a condition precedent to the making of the loan of AHSC Funds to Trustor, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Property (defined below) to secure repayment of the Note and performance of Trustor's obligations under the HCD Documents and the Loan Documents.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.
1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired:
(a) All buildings, structures, and improvements, now or hereafter located or constructed on the Land ("Improvements");
(b) All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, "Appurtenances"); (c) All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment");
(d) All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, "Leases"), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, "Rents"); 129
3 (e) All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding ("Proceeds");
(f) All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor ("Gross Revenues");
(g) All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, "Plans"); and
(h) All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, "Financing").
All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property."
2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the "Secured Obligations"): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Documents as such may be modified, supplemented, amended, renewed or extended; (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust or any other Loan Document.
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any 130
4 part thereof, and 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 attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the 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. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month.
4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the "UCC"), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements.
5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it.
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5 Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government.
6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Los Angeles County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC.
7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the Parties.
7.1 Representations and Warranties. Trustor represents and warrants that:
(i) Trustor lawfully possesses and holds a fee interest in the Land and the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) other than as limited by the Loan Documents, Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the Loan Documents or otherwise approved in writing by Beneficiary ("Permitted Encumbrances"), this Deed of Trust creates a valid lien on Trustor's entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor's chief executive office is specified in Section 10.2.
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6 7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Property that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material facts concerning the Property.
7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor's ownership of the Property.
7.4 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the HCD Documents in accordance with the respective terms thereof.
7.5 Use of Loan Proceeds; Preservation and Maintenance of Property; Compliance with Laws. Trustor covenants that it shall use the AHSC Funds solely for purposes authorized by the Loan Documents and the HCD Documents. Trustor covenants that it shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and the Improvements solely for purposes authorized by the Loan Documents and the HCD Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, 133
7 nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the HCD Documents or the Loan Documents.
7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if the Property, any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated, leased (other than lease of the residential units and commercial space), licensed, or encumbered in violation of the Loan Documents. If any such Transfer shall occur in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period.
Notwithstanding anything the above or anything to the contrary in this Agreement, the removal and/or replacement of Borrower's general partners shall not be prohibited and shall not constitute a default under any of the Loan Documents or accelerate the maturity of the Loan. In addition, the interests of the Borrower's limited partner or tax credit investor shall be transferable to a transferee without the prior written consent of the Beneficiary and such transfer shall not constitute an Event of Default, or default under any of the Loan Documents. In the case of either such type of transfer, Lender's prior written consent shall not be required for any amendment or other modification of Borrower's partnership agreement to document and reflect such transfer. Finally, neither the withdrawal, removal, replacement, and/or addition of the general partner pursuant to the terms of Borrower's partnership agreement, nor the withdrawal, replacement, and/or addition of any of Borrower's limited partners or its limited partner's general partners or members, shall constitute an Event of Default or default under any of the Loan Documents, and such actions shall not accelerate the maturity of the Loan.
7.7 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the Loan Documents and the HCD Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the AHSC Funds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection by Beneficiary at any reasonable time following two business days prior notice.
7.8 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. 134
8 7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust.
7.10 Hazard, Liability and Workers' Compensation Insurance. At all times during the term hereof, at Trustor's expense, Trustor shall keep the Improvements and personal property now existing or hereafter located on the Property insured against loss by vandalism and malicious mischief by a policy of extended all-risk insurance as required by the HCD Documents.
Subject to the rights of any senior lienholder, the proceeds collected under any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the 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 or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding anything to the contrary set forth herein, provided that Trustor is not in default under any Loan Document, Trustor shall be permitted to use the proceeds of insurance to rebuild the Improvements.
7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials.
Trustor shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the construction, rehabilitation, repair, and operation of residential developments and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below).
To the fullest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, 135
9 officers, agents and employees (collectively, "Indemnitees") harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources.
Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following:
(a) pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; (b) reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and
(c) reimburse Indemnitees for any and all expenses, including without limitation out-of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding.
Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any Loan Document; (ii) any extensions of time for performance required by any Loan Document; (iii) any provision in any of the Loan Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations, if any; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any Loan Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any Loan Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly perfect any lien or security interest given as security for the Secured Obligations.
The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the Loan Documents or 136
10 applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust.
Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions"), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure ("Section 736") for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure.
"Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant" or "contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C.
Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C.
Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, 137
11 including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder.
7.12 Defense of Security; Reimbursement of Costs.
(a) Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims.
(b) Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys' fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title.
(c) Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property.
7.13 Indemnification.
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12 (a) Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees (as defined in Section 7.11) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (i) any breach of Trustor's covenants under any Loan Document, (ii) any representation by Trustor in any Loan Document which proves to be false or misleading in any material respect when made, (iii) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, or (iv) any third party claim, demand or cause of action, or any third party action or other proceeding, whether meritorious or not, brought or asserted against Trustee or any Indemnitee which relates to or arises out of the Property, or any Loan Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters to the extent caused by such Indemnitee's (x) breach of any Loan Document or HCD Document, (y) gross negligence or (z) willful misconduct. (b) The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust.
7.14 Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary.
7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the 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 or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, so long as the value of Beneficiary's lien is not materially impaired, insurance and/or condemnation proceeds shall be used to repair and/or restore the Project.
7.16 Release, Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation 139
13 of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations.
7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance.
7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's or Trustee's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section 7.18 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust.
7.19 Limited Partners Right to Cure. Trustor's limited partners shall have the right, but not the obligation, to cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor, provided however, the cure period shall be extended by sixty (60) days. Provided that Beneficiary has been given written notice of the address for delivery of notices to the limited partners, Beneficiary shall provide any notice of default hereunder to the limited partners concurrently with the provision of such notice to Trustor, and as to the limited partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Section 10.2. Beneficiary agrees that any cure by Borrower's limited partners shall be deemed a cure by Borrower and shall be accepted or rejected on the same basis as if made by Borrower. Borrower hereby notifies Beneficiary that the address for delivery of notices to Borrower's tax credit investor limited partner is:
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14 With a copy to:
8. Default and Remedies.
8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust upon the occurrence of any one or more of the following events:
(a) Beneficiary's declaration of an Event of Default under any Loan Document, subject to the expiration of any applicable cure period set forth in such document, or if there is no applicable cure period, thirty (30) days after Beneficiary gives Trustor written notice of such Event of Default;
(b) Trustor fails to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee;
(c) If Trustor's interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.6 hereof and Trustor fails to rescind such conveyance or otherwise cure such breach within the time period specified in paragraph j below;
(d) Trustor fails to maintain the insurance coverage required hereunder or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within ten (10) days;
(e) Subject to Trustor's right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay when due any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within thirty (30) days of the date of delinquency, but in all events prior to the imposition of any such tax or other lien.
(f) Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other Loan Document proves to have been false or misleading in any material adverse respect when made and Borrower fails to correct or cure the same to Lender’s satisfaction within thirty (30) days after Lender notifies Borrower thereof in writing ; (g) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment 141
15 for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
(h) If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity's assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project or any part thereof, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 90 days after its issuance.
(i) Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than ninety (90) days following receipt of notice of default.
(j) Any enumerated event arising from the action or omission of the General Partner that is affiliated with Lender will not constitute an Event of Default of the Borrower.
8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein or in the Loan Agreement and subject to the restrictions set forth in the HCD Documents, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any Loan Document, and any other remedy existing at law or in equity or by statute; provided, however, Beneficiary and Trustee shall not exercise any of the rights and remedies described below without receiving the prior written consent of HCD. All of Beneficiary's rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys' fees and costs. Notwithstanding anything to the contrary contained herein, neither Trustee nor Beneficiary shall exercise any right or remedy provided herein (A) at any time prior to the expiration of the 15-year tax credit compliance period (the “Compliance Period”) for the Project determined pursuant to Section 42(i)(1) of the Internal Revenue Code of 1986, as amended, and (B) at any time without the written consent of HCD in its full and absolute discretion. (a) Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately.
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16 (b) Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. (c) Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust.
Such other things may include: taking and possessing copies of all of Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments.
(d) UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
(e) Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust.
(f) Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.
8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust.
Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust.
Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the 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 143
17 bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary's request shall, postpone sale of all or any portion of the 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 and place fixed by the preceding postponement. Trustee shall deliver to the 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 or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale.
After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.
Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the Loan Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note.
At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations:
(a) First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and (b) Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose.
8.4 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor's 144
18 obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.
9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.
10. Miscellaneous Provisions.
10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property.
10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(a) personal delivery, in which case notice shall be deemed delivered upon receipt;
(b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail;
(c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or
10.3 electronic mail transmission, in which case notice shall be deemed delivered upon transmittal, except that if the time of such transmission is after 5:00 p.m. recipient's time or the date of such transmission is not a business day, then such notice shall be deemed to be given on the first business day following such transmission.
LENDER: City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
Attention: City Manager
145
19 BORROWER: Shasta Lake Downtown Housing, LP
1011 Parkview Avenue, Suite A
Redding, CA 96001
Attention: Allen Knott
With a copy to:
10.4 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive the provisions of Section 7.6.
10.5 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of Los Angeles County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein.
10.6 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees.
10.7 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws.
Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction").
The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural.
10.8 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and 146
20 Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
10.9 Action by Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary's Executive Director or by any person who shall have been designated by Beneficiary's Executive Director, without further approval by the governing board of Beneficiary.
10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust.
10.11 Subordination to Other Project Lenders. Notwithstanding anything to the contrary set forth herein, the Beneficiary acknowledges that this Deed of Trust and the Loan Documents are subordinate to those senior loans described in Section 5.20 of the Loan Agreement.
10.12 Partial Subordination to Extended Use Agreement. Trustor and the California Tax Credit Allocation Committee may enter into a Regulatory Agreement (the "TCAC Regulatory Agreement"), which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code, as amended (the "Code"). In the event of a foreclosure of Beneficiary's interest under this Deed of Trust or delivery by the Trustor of a deed in lieu thereof (collectively, a "Foreclosure"), the following rule shall apply:
In the event of a Foreclosure, throughout the extended use period specified in the TCAC Regulatory Agreement, with respect to any unit that had been regulated by the TCAC Regulatory Agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause, including but not limited to, the tenants' ineligibility pursuant to regulations of the Section 42 of the Code), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. [remainder of page intentionally left blank]
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S-1
Block 7: AHSC Deed of Trust (1)
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.
TRUSTOR:
SHASTA LAKE DOWNTOWN HOUSING, LP,
a California limited partnership
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company,
its Administrative General Partner
By:
Daniel Knott
Manager
By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General Partner
By:
David Rutledge
President
148
Notary Page
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 the document.
STATE OF CALIFORNIA )
)
COUNTY OF ______________ )
On ___________________, 202_, before me, _______________________________, notary public, personally appeared ____________________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person 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)
149
B - 1
EXHIBIT A
DESCRIPTION OF LAND
[TO BE ATTACHED]
150
RECORDING REQUESTED BY:
City of Shasta Lake
CITY BUSINESS - NO FEE
Section 6103 of the Government Code
of the State of California
AND WHEN RECORDED MAIL TO:
City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
CITY REGULATORY AGREEMENT
AND
DECLARATION OF AFFORDABILITY RESTRICTIONS
THIS REGULATORY AGREEMENT AND DECLARATION OF
AFFORDABILITY RESTRICTIONS (the “Agreement”) is entered into the __th day of ____________ 202_, by and between the CITY OF SHASTA LAKE, a municipal government (“City”) and SHASTA LAKE DOWNTOWN HOUSING, LP, a California Limited Partnership (“Developer”).
A. Developer is fee owner of record of that certain real property (“Real Property” or “Site”) located at 4601, 4617, 4633, 4540, 4650 and 4657 Shasta Dam Boulevard located in the City of Shasta Lake, County of Shasta, State of California, legally described in the attached Exhibit “A”. The Real Property is the subject of a Disposition and Development Agreement dated __________, 201_ (the “Development Agreement”), for the development, construction, operation, management and maintenance of a mixed-use development that will include multifamily rental housing units consisting of forty-nine (49) units, one manager’s unit and 48 affordable units (the “Project”).
B. The Real Property is located in the City of Shasta Lake and the development of the Property for affordable housing is in the best interest of the Developer and the City, and the health, safety, and welfare of the residents of the City of Shasta Lake.
C. To facilitate affordable rental housing the City wishes to place affordable rent restrictions on all forty-eight (48) of the affordable residential units and that this Agreement constitute a regulatory agreement as defined in Section 37364(d) of the California Government Code.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE PARTIES AGREE AS FOLLOWS:
1. Number of Units. The residential portion of the Project to be constructed on the Site consists of forty-nine (49) housing units of which one is a manager’s unit. Developer agrees 151
to make available, restrict occupancy to, and rent at an “Affordable Rent” all forty-eight (48) residential units as the term is hereinafter defined for the period of time described in Paragraph 2.
Restricted units are collectively referred to herein as the “Affordable Units.” “Affordable Rent” shall mean rent that does not exceed, on a monthly basis, thirty percent (30%) of sixty percent (60%) of the Area Median Income adjusted for family size appropriate to the size of the rental unit applicable for Shasta County as established and amended from time to time by the United States Department of Housing and Community Development (“HUD”).
“Affordability Period” shall mean a period commencing upon the date of issuance of a Certificate of Occupancy by the City for the Project and continuing for fifty-five (55) years. “Eligible Household” shall mean a household whose income does not exceed 60 percent (60%) of the Area Median Income adjusted for family size appropriate to the size of the rental unit applicable to Shasta County, as established and amended from time to time by HUD.
2. Duration of Affordability of Affordable Units. The Affordable Units shall remain available for rent to and occupancy by Eligible Households at an Affordable Rent throughout the Affordability Period.
Not withstanding any other provision of law, the covenants and restrictions contained herein shall run with the land for the duration of the Affordability Period and shall be enforceable, against Developer and/or its successors in interest, by the City, the community and/or others as allowed by law.
This Regulatory Agreement and Declaration of Affordability Restrictions shall survive termination of the Development Agreement.
3. Determination of Affordable Rent for the Affordable Units. Each Affordable Unit shall be rented to an Eligible Household at an Affordable Rent during the Affordability Period.
4. Rent Increases. Affordable Rent may be increased one annually in accordance with changes in allowable rent and income tables published by HUD and the California Tax Credit Allocation Committee. Developer will provide City notice no less than sixty (60) days prior to any rent increase. In no event can Developer charge any tenant rent that is more than Affordable Rent as defined herein.
5. Increases in income by Eligible Households. If, upon recertification of the income of a tenant of an Affordable Unit, the Developer determines that a tenant has an adjusted income exceeding 30% of 60% of the applicable Median Income for Shasta Count, in each case, adjusted for family size appropriate to the size of the unit, such tenant may be permitted to continue to occupy the Affordable Unit at Affordable Rent, until the tenant chooses to vacate the Affordable Unit. After the Affordable Unit is vacated, the Affordable Unit shall be re-rented to a tenant pursuant to the terms, covenants and conditions of this Agreement. 152
6. Event of Default. It will be an Event of Default under this Agreement if Developer fails to timely perform, comply with or observe any of the terms, covenants, or conditions of this Agreement and such failure continues uncured or without Developer commencing to diligently cure for thirty (30) days after notice thereof in writing is given by the City to Developer, provided that if Developer has commenced cure but cannot complete such cure reasonably within thirty (30) days, Developer shall have ninety (90) days from the date of notice to cure such failure without such failure constituting an Event of Default pursuant to this Section
6. The occurrence of any Event of Default shall give the City the right to proceed with any and all remedies available at law or in equity or by statute (and all of the City's rights and remedies shall be cumulative).
7. Monitoring of the Affordable Units. Developer, its designee or successor shall prepare and submit annually the certification reports, as requested by the Agency, during the Affordability Period. The report shall identify each rental unit, the rental rate, and the income and family size of the occupants. The required income information shall be supplied by the tenant in the form of source documentation kept at the Real Property and shall be available for Agency review at the Agency’s request.
8. Multiple Restrictions. If the Project becomes subject to multiple agreements or declarations governing the subject matter contained in this Agreement the most restrictive will apply. Notwithstanding the foregoing or Section 5 hereof the requirements, rules and regulations of the California Tax Credit Allocation Committee (“CTCAC”) regarding increases in Eligible Household income will control during any period when the Project is subject to a regulatory agreement with CTCAC.
9. Obligations Run with the Land. Developer agrees and covenants that the obligations of Developer under this Agreement shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property.
10. Amendment. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto.
11. Wavier. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof.
12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for any choice-of-law principles which provide for the application of the laws of another jurisdiction. Seller and Buyer hereby irrevocably submit to the jurisdiction of any state or federal court sitting in the State in any action or proceeding arising out of or relating to this Agreement and hereby irrevocably agree that all claims in respect of such action or proceeding shall be heard and determined in a state or federal court sitting in the State.
153
13. Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between, and the final expression of, the parties with respect to the subject matter hereof.
14. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument.
[Signatures on Following Page]
154
IN WITNESS WHEREOF, the City and Developer have signed this Agreement on the respective dates set forth below.
CITY:
CITY OF SHASTA LAKE,
a municipal government
By: ___________________________
Jessaca Lugo, City Manager
APPROVED AS TO FORM:
By: ___________________________
John Kenny, City Attorney
ATTEST:
By: ___________________________
Toni Coates, City Clerk
[Signatures Continue on Following Page]
DEVELOPER:
155
SHASTA LAKE DOWNTOWN HOUSING, LP,
a California limited partnership
By: Shasta Lake Downtown Housing, LLC,
a California limited liability company,
its Administrative General Partner
By:
Daniel Knott
Manager
By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General Partner
By:
David Rutledge
President
156
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 the document.
STATE OF CALIFORNIA )
)
COUNTY OF ______________ )
On ___________________, 202_, before me, _______________________________, notary public, personally appeared ____________________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person 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)
157
EXHIBIT A
LEGAL DESCRIPTION
158
EXHIBIT 15
ESTOPPEL CERTIFICATE
This Estoppel Certificate (“Certificate”) dated as of ____, 20_ (“Date Hereof”) is executed by the City of Shasta Lake (“City”) in favor of Shasta Lake Downtown Housing, LP, a California limited partnership (“Developer”) in regard to a loan with _______________ (“Lender”) and investment by _____________ (“Limited Partner”).
NOW THEREFORE, the City certifies to Lender and Limited Partner:
1. As of the date of this Certificate, to the best of the City’s knowledge, Developer has performed all obligations required of City under that certain Disposition and Development Agreement dated as of _______, 2022 by and between Developer and City (the “Agreement”); no offsets, claims or breach of the Agreement exist as of the Date Hereof and no events have occurred that are known to the Declarant which would constitute an uncured breach of the Agreement.
2. As of the date hereof, no default has occurred under the Agreement, and no event or circumstance exists which, with the giving of notice or the passage of time, or both, would constitute a default under the Agreement.
3. The Affordable Housing Project, as currently contemplated, complies with all of the terms and conditions of the Agreement, all approvals of the City with respect to the Agreement, including without limitation approval of the Final Plans pursuant to Section 6 and approval of the Budget pursuant to Section 7 of the Agreement, have been obtained and no additional approvals of the City with respect to the Agreement are currently required.
4. If an event of default occurs under the terms of the Agreement with respect to the Affordable Housing Project, prior to exercising any remedies thereunder, the City shall give the Developer and Limited Partner simultaneous written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, the Developer shall have such period to effect a cure prior to exercise of remedies by the City under the Agreement, or such longer period of time as may be specified in the Agreement. If the default is such that it is not reasonably capable of being cured within thirty (30) days or such longer period if so specified, and if the Developer (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then the Developer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the City.
5. From the Date of this Certificate, the City agrees to notify Lender and Limited Partner in the event of discovery of facts that would make this Certificate inaccurate. 159
DATED:__________________________________
CITY OF SHASTA LAKE
____________________________________
By: _________________________________
160
EXHIBIT 16
SCOPE OF DEVELOPMENT
I. GENERAL
The location of the Project is the Property further described and specifically delineated on the Legal Descriptions associated with this Development Agreement (“Agreement”). The Developer agrees that all work completed on the Property and/or Project Site will be in accordance with the provisions of this Agreement and the plans, drawings, and related documents approved by the City and Developer pursuant hereto.
II. DEVELOPMENT
Specifically, the Developer shall develop, construct, operate, and manage and maintain a threestory mixed-use development (the “Project”). The Project will include improvements that consist of, but are not limited to, demolition of existing commercial structures and the construction of a mixed-use facility that will include first floor commercial and retail space and provide common areas and infrastructure to support the housing development on the second, third, and fourth floors.
The housing development will be comprised of forty-nine (49) units of which 48 units will be restricted for tenants with incomes ranging from 30 to 60 percent of the area median income (“AMI”) and 1 unit will be reserved for a property manager.
The development will be pursuant to the Agreement, this Exhibit, and all conditions set forth in any City permit issued for the Project.
The Developer shall commence and complete the Improvements by the respective times established therefore in the Schedule of Performance.
III. DEVELOPMENT STANDARDS
The Improvements shall conform to all applicable state laws and regulations and to applicable provisions of the Municipal Code of the City of Shasta Lake (the “Municipal Code”); all applicable City of Shasta Lake development and zoning code requirements; and any and all permits issued for the Project.
161
EXHIBIT 17
PRELIMINARY PROJECT BUDGET
USES
Acquisition $1,556,500
Construction $25,387,500
Architecture/Engineering $1,496,000
Financing and Interest $4,351,570
Legal Fees $285,000
Reserves $244,926
Reports and Misc. $499,590
Impact Fees and Permits $3,200,000
Contingencies $1,419,375
Developer Fee $2,200,000
TOTAL $40,640,460
CONSTRUCTION SOURCES
Permanent Loan $30,441,284
City AHSC Conduit Loan $1,200,000
CDBG-DR $2,967,904
City Land Loan $868,000
Low Income Housing Tax Credit Equity $3,792,272
Deferred Developer Fee $1,370,000
TOTAL $40,640,460
162
PERMANENT SOURCES
Permanent Loan $4,270,000
AHSC – Affordable Housing Development (AHD) Loan $8,276,661 City AHSC Conduit Loan $1,200,000
CDBG-DR $2,967,904
City Land Loan $868,000
Low Income Housing Tax Credit Equity $21,812,500
Purchase of Commercial Space $624,347
Deferred Developer Fee $621,048
TOTAL $40,640,460
163
Action Time Frame
Developer executes Agreement
Environmental Clearance from HUD
City approves Agreement
City executes Agreement Following City Council approval and Developer execution of Agreement
Developer submits Tax Credit Application First funding round of 2023 Developer opens Escrow - Agreement and all required
documents are delivered to Escrow Agent (4.2)
Within 10 days of of the effective date of the
Agreement
Developer submits certificates of insurance (11.1) Prior to Start of Construction Developer submits evidence of Other Financing (3.3) Within 24 months of the effective date of City reviews Other Financing Commitments (3.6.7) Prior to Start of Construction Escrow Agent to notify City, Owner, and Developer of
Escrow Closing Costs
Within 10 days prior to the Close of Escrow
Developer and/or Controlled Entity as described in
subsection 12.3.3 shall execute documents (4.2.2 and
4 2 3)
Prior to the Close of Escrow
Escrow Agent to issue and deliver Title Insurance to the City (4.2.5)
Prior to the Close of Escrow
Developer submits Final Project Budget with Final Sources and Uses to the City
Prior to Start of Construction
Close of escrow. When all closing conditions have been satisfied Developer submits Final Plans When Final Plans are submitted to the City's Building Division
City reviews the Final Plans and Final Project Budget 5 days following Final Project Budget or Final Plans submittal
Developer submits Contractor Guaranty or Payment and
Performance Bonds to City for City Attorney review and
approval (7.8)
Prior to the Start of Construction
Developer obtains Building Permits (7.10.6) Prior to Start of Construction Developer requests Notice to Proceed for construction of improvements from City (7.10.7)
10 days following approval of Building Permits
City notifies Developer to proceed with construction of improvements (7.10.7)
1 days following Developer Request.
Developer issues Notice to Proceed to general contractor (7.10.8)
14 days following City notification to proceed
Developer commences improvements 14 days following Developer notification to General Contractor to proceed
SCHEDULE OF PERFORMANCE
EXHIBIT 18
164
EXHIBIT 19
CERTIFICATE OF COMPLETION
THIS CERTIFICATE OF COMPLETION (the "Certificate") is made by the CITY OF SHASTA LAKE a municipal government (the "CITY"), in favor of SHASTA HOUSING DOWNTOWN HOUSING, LP, a California limited partnership (the "OWNER"), as of the date set forth below.
RECITALS
A. The CITY and the OWNER have entered into that certain Disposition and Development Agreement (DDA) dated [Date of Agreement], concerning the development of certain real property situated in Shasta Lake, California, as more fully described in Exhibit A attached hereto and made a part hereof (the “Property”).
B. The DDA sets forth the obligations of OWNER, referred to as “Developer”, under the DDA.
C. The CITY has conclusively determined that OWNER has satisfactorily completed the obligations of the OWNER relative to development of the Property required by the DDA and now desires to furnish OWNER or its successors with a Certificate of Completion. This Certificate is in such form as to permit conclusive determination of satisfactory completion of all of the obligations of the OWNER required by the DDA regarding development of the property.
NOW, THEREFORE, the CITY hereby certifies as follows:
1. The obligations of the OWNER regarding development of the Site as stated in Section 7.18 of the DDA have been fully and satisfactorily completed in conformance with the DDA except as to those breaches of contract or defects in construction that could not have reasonably been discovered by CITY at the time of issuance of the Certificate of Completion.
2. Nothing contained in this instrument shall modify in any way any other provisions of the DDA.
IN WITNESS WHEREOF, the CITY has executed this Certificate this day of , 202_.
CITY OF SHASTA LAKE,
a municipal government
____________________________________
JESSACA LUGO, City Manager
165
EXHIBIT A to CERTIFICATE OF COMPLETION
LEGAL DESCRIPTION
166
EXHIBIT 20
RECORDING REQUESTED BY
CITY OF SHASTA LAKE
WHEN RECORDED, MAIL TO:
CITY OF SHASTA LAKE
4477 Main Street
Shasta Lake, CA 96019
THIS SPACE FOR RECORDER'S USE ONLY
NOTICE OF COMPLETION
Notice pursuant to Civil Code Section 3093 must be filed within 10 days after completion.
NOTICE IS HEREBY GIVEN THAT:
1. The undersigned is the owner or authorized agent of the owner of the interest or estate stated below in the property hereinafter described.
2. The full name of the owner is:
3. The full address of the owner is:
4. The nature of the interest or estate of the undersigned is: In Fee
5. The full names and full addresses of all persons, if any, who hold title with the undersigned as joint tenants or as tenants in common are: None
6. Work or improvement on the property hereinafter described was construction and was completed on_______________________________.
7. Said work or improvement was undertaken on said property pursuant to a contract dated ________________, 202_ with General Contractor______________________________.
8. The street address of the property on which said work or improvement was completed is __________________________________________________.
____________________________________
Daniel Knott, Manager of
Shasta Lake Downtown Housing, LLC, Administrative General Partner of Shasta Lake Downtown Housing, LP
I, the undersigned, state that I am the declarant of the foregoing Notice of Completion; that I have read said Notice of Completion and, to the best of my knowledge, I declare under penalty of perjury that the foregoing is true and correct.
Dated: __________________________________, Shasta Lake, California. _____________________________________
Daniel Knott, Manager of
Shasta Lake Downtown Housing, LLC, Administrative General Partner of Shasta Lake Downtown Housing, LP
167
EXHIBIT 21
FAIR HOUSING POSTER
168
169
170
Report and Recommendations 6
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Jessaca Lugo, City Manager
DATE: April 4, 2023
SUBJECT: Consideration of Utility Rate Study Update Results for the Water Enterprise Fund, and Authorization to proceed with the Public Notification and Setting a Public Hearing for the Adoption of New Water Utility Rates.
FILE NO.: W-100-755-667
RECOMMENDATION:
Staff recommends that City Council adopt a resolution accepting the results of the Water Utility Rate Study Update report completed by PACE Engineering, Inc., direct staff to prepare notification of the proposed rates in accordance with Proposition 218, and to set a public hearing for consideration of adoption of the proposed rates for June 20, 2023.
BACKGROUND
The City of Shasta Lake operates an independent and self-supporting water utility enterprise.
Revenue collected through user rates are exclusively used within the fund to cover operations, maintenance, and capital improvements (with project guidance provided by the 2016-2026 Water Master Plan).
The City, and the Shasta Dam Area Public Utilities District before it, has metered water usage in our service area for many years. In the 1980’s, the SDAPUD implemented tiered water rates to encourage water conservation. The effect was a series of year-over-year usage decreases - in 1988, SDAPUD used approximately 2189 acre-feet of water; in 1990, usage was reduced to 1889 AF, a reduction of 13.8% for a population of approximately 8833 people. For comparison, the City’s last unconstrained water year was 2019, where we used approximately 2054 AF for a population of approximately 10374 people.
Industry standards recommend that water utilities review their rate structure approximately every five years. After incorporation in 1993, the City continued the SDAPUD’s policy of using tiered 171
water rates to encourage conservation. Over time, the tier breakpoints have been adjusted, as shown below:
Rate Study Year Tiers
1986 (2): 1-2000, 2001cf +
1990 (2): 1-2000, 2001+
1994 (2): 1-2000, 2001+
1997 (3): 1-1000 LL, 1-1000, 1001+
2004 (4): 1-1000 LL, 1-1000, 1001-5000, 5000+
2009 (4): 1-1000 LL, 1-1000, 1001-5000, 5000+
2014 (4): 1-1000 LL, 1-1000, 1001-5000, 5000+
2016 (6): 1-1000 LL, 1001-2000 LL, 2001+ LL
1-1000, 1001-2000, 2001+
Notes: LL denotes Lifeline rates.
All tier usage numbers are in cubic feet.
The 2016 rate study was undertaken only two years after the 2014 rate study was adopted. This was because the City had experienced a nearly 30% decline in water sales revenue between 2014 and 2016 due to the ongoing severe drought, the cost of obtaining additional water from outside sources, and additional state mandated conservation measures, and the City needed to adjust its long-term rate structure to continue to maintain effective operations and complete necessary capital improvements.
The 2016 water rate study was completed by Raftelis Financial Consultants, Inc. (RFC) and was the most extensive rate study that the City had ever completed for its public water utility. Following the guidelines presented in the American Water Works Association Manual M1, “Principals of Water Rates, Fees, and Charges”, RFC used the ‘Base-Extra Capacity Method’ for distributing costs across four components: Base Costs, Extra Capacity Costs, Customer Costs, and Direct Fire Protection Costs. These components, broken down into various cost of service subcategories within a legal framework, allowed RFC to prepare proposed updated water rates for the next five years that were fully compliant with California law. The RFC rate study is available for review online at: https://www.cityofshastalake.org/finalratestudy In 2021, the City contracted with PACE Engineering, Inc. (PEI) to perform an update to the 2016 approved water rates. At staff direction, PEI has built upon the extensive and City Councilapproved RFC study to produce the attached 2023 Water Rate Study Update. This Update provides proposed rate adjustments for the next five years (FY 2023-2024 though FY 2027-2028) for both water meter and consumption costs. It is important to note that staff has elected to eliminate rate increases associated with drought stages and to build potential cost increases of wholesale water acquisition for this Study period into the 2023 Water Rate Study Update; as a result, the Drought Rates (rate increases imposed during a State-declared drought) and the PassThrough Rates (rate increases caused by wholesale water cost increases) that were both contained in the RFC study will be eliminated from the rate tables.
The Council has the following alternatives to consider:
1. Provide staff with direction to implement the Proposition 218 noticing process for holding a public hearing on June 20, 2023 on recommended changes to the Water utility rates; or
2. Provide alternate direction to staff.
172
FISCAL IMPACT
Dependent on Council Direction
ATTACHMENTS
2023 Water Rate Study Update (PACE Engineering, Inc.)
Water Utility Rate Study Update Public Hearing Adoption Resolution Raftelis Water Utility Rate Study dated June 15, 2016
Staff report and Ordinance adopting rates August 2016.
DISTRIBUTION
City of Shasta Lake City Council
173
RESOLUTION CC-2023-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE ACCEPTING
THE RESULTS OF THE WATER UTILITY RATE STUDY UPDATE COMPLETED BY PACE ENGINEERING, INC., DIRECT STAFF TO PREPARE PUBLIC NOTIFICATION OF THE PROPOSED RATES IN ACCORDANCE WITH PROPOSITION 218, AND TO SET A PUBLIC
HEARING FOR CONSIDERATION OF ADOPTION OF THE PROPOSED RATES ON JUNE 20, 2023
WHEREAS, PACE Engineering, Inc. were engaged by the City for the completion of the 2023 Water Rate Study Update; and
WHEREAS, PACE Engineering, Inc. has completed the 2023 Water Rate Study Update; and WHEREAS, the City Council accepts the results of the 2023 Water Rate Study Update; and WHEREAS, prior to implementing the water rates, the City must prepare public notification of the proposed rates in accordance with Proposition 218 and set a public hearing for consideration of the adoption of the proposed rates.
NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Shasta Lake hereby accepts the results of the 2023 Water Rate Study Update completed by PACE Engineering, Inc., directs staff to prepare public notification of the proposed rates in accordance with Proposition 218, and sets a public hearing for consideration of the adoption of the proposed rates on June 20, 2023.
PASSED, APPROVED, AND ADOPTED this 4th day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
GREG WATKINS, Mayor
ATTEST:
TONI M. COATES, CMC
City Clerk
174
5155 VENTURE PARKWAY • REDDING, CA 96002 • (530) 244-0202 March 6, 2023
110.100
SENT BY EMAIL ONLY
[email protected]
Tony Thomasy
Water Utility Specialist
City of Shasta Lake
Dear Tony,
Subject: 2023 Water Rate Study Update
The City of Shasta Lake (City) completed its last Water Rate Study in late 2016 and adopted five-year financial plans and rate schedules that established water rates for Fiscal Year (FY) 2016 through FY 2020. The 2016 Water Rate Study was completed by Raftelis Financial Consultants (2016 RFC Study).
In late 2021, the City retained PACE Engineering, Inc. to perform an update to the 2016 RFC Study. After preliminary financial reviews and a workshop with City staff, it was decided to postpone completion of the study for the following reasons:
• The City’s Water Enterprise Fund was in sound shape financially. • Upcoming water purchase needs and associated costs were unknown in light of the Shasta Lake level and precipitation uncertainty.
• Funding for several pending capital improvement projects had yet to be finalized.
For these reasons, it was decided to hold the FY20-21 water rates for one more year and resume the Rate Study Update in late 2022.
REVIEW OF THE 2016 RFC STUDY
The 2016 RFC Study was conducted in accordance with principles set forth in American Water Works Association Manual M1 titled, Principals of Water Rates, Fees and Charges (AWWA Manual M1). In 1949, AWWA appointed a committee on water rates. As time passed, the utility industry recognized the need for a manual of standard practice. Through the work of this committee, the first AWWA Manual M1 was published in 1954. It has been updated several times since, with the current Version 7 being published in 2017. AWWA Manual M1 is considered the “go to” reference for establishing water rates for agencies all over the United States.
For the City, the “Base-Extra Capacity Method” of AWWA Manual M1 was used for distributing costs, which separates costs into four components.
1. Base Costs: Costs associated with meeting average daily demand needs.
2. Extra Capacity Costs: Costs associated with meeting peak demands. 175
City of Shasta Lake March 6, 2023