Agenda — Stanton City Council, March 29, 2022

TO THE MEMBERS OF THE CITY COUNCIL / SUCCESSOR AGENCY / HOUSING AUTHORITY FOR THE CITY OF STANTON AND TO THE CITY CLERK / SECRETARY:

NOTICE IS HEREBY GIVEN that a Special Meeting of the City Council / Successor Agency / Housing Authority for the City of Stanton is hereby called by the Mayor / Chairman, to be held electronically / telephonically on March 29, 2022, commencing at 6:30 pm.

The Agenda for the Special Meeting is attached to this Notice and Call.

Dated: March 28, 2022
s/ Patricia A. Vazquez, City Clerk / Secretary
SAFETY ALERT – NOTICE REGARDING COVID-19

IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT, IF YOU NEED SPECIAL ASSISTANCE TO PARTICIPATE IN THIS MEETING, PLEASE CONTACT THE OFFICE OF THE CITY CLERK AT (714) 890-4245. NOTIFICATION BY 48 HOURS PRIOR

TO THE MEETING WILL ENABLE THE CITY TO MAKE REASONABLE ARRANGEMENTS TO ENSURE ACCESSIBILITY TO THIS MEETING.

The President, Governor, and the City of Stanton have declared a State of Emergency as a result of the threat of COVID-19 (aka the “Coronavirus”). On September 16, 2021, Assembly Bill 361 (AB 361) was signed by Governor Newsom to allow for the City Council to attend City Council meetings electronically/telephonically and for the public to participate in the City Council meeting by electronic means. Given the health risks associated with COVID-19 and the recent surge of the Omicron variant, state and local officials are recommending measures to promote social distancing. Pursuant to the provisions of AB 361 the March 29, 2022, Joint Special City Council Meeting will be held electronically/telephonically.

Members of the public will be able to access the meeting live electronically/telephonically using any of the following sources.

In order to join the meeting via telephone please follow the steps below:

1. Dial the following phone number +1 (669) 900-9128 US (San Jose).

2. Dial in the following Meeting ID: (827 9168 1272) to be connected to the meeting.

In order to join the meeting via electronic device please utilize the ZOOM URL link below:
• https://us02web.zoom.us/j/82791681272?pwd=bUdhU3IvUkNqUkY2T21Nc1g5VmFRUT09

ANY MEMBER OF THE PUBLIC WISHING TO PROVIDE PUBLIC COMMENT FOR ANY ITEM ON THE AGENDA MAY DO SO AS FOLLOWS:

E-Mail your comments to [email protected] with the subject line “PUBLIC COMMENT ITEM #” (insert the item number relevant to your comment). Comments received no later than 5:30 p.m. before the meeting (Tuesday, March 29, 2022) will be compiled, provided to the City Council, and made available to the public before the start of the meeting. Staff will not read e-mailed comments at the meeting. However, the official record will include all e-mailed comments received until the close of the meeting.

The Stanton City Council and staff thank you for your continued patience and cooperation during these unprecedented times. Should you have any questions related to participation in the City Council Meeting, please contact the City Clerk’s Office at (714) 890-4245.

Stanton City Council Joint Special Agenda Prepared by the Office of the City Clerk March 29, 2022

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AGENDA

CITY COUNCIL/SUCCESSOR AGENCY/STANTON HOUSING AUTHORITY

JOINT SPECIAL MEETING
7800 KATELLA AVENUE, STANTON, CA 90680
TUESDAY, MARCH 29, 2022 - 6:30 P.M. (VIRTUAL)
SAFETY ALERT – NOTICE REGARDING COVID-19
In compliance with the Americans With Disabilities Act, if you need special assistance to participate in this meeting, please contact the Office of the City Clerk at (714) 890-4245. Notification 24 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.

Members of the public will be able to access the meeting live electronically/telephonically using any of the following sources.

In order to join the meeting via telephone please follow the steps below:

1. Dial the following phone number +1 (669) 900-9128 US (San Jose).

2. Dial in the following Meeting ID: (827 9168 1272) to be connected to the meeting.

In order to join the meeting via electronic device please utilize the ZOOM URL link below:
• https://us02web.zoom.us/j/82791681272?pwd=bUdhU3IvUkNqUkY2T21Nc1g5VmFRUT09

ANY MEMBER OF THE PUBLIC WISHING TO PROVIDE PUBLIC COMMENT FOR ANY ITEM ON THE AGENDA MAY DO SO AS FOLLOWS:

Stanton City Council Joint Special Agenda Prepared by the Office of the City Clerk March 29, 2022

Page 2 of 3 ends

The City Council agenda and supporting documentation is made available for public review and inspection during normal business hours in the Office of the City Clerk, 7800 Katella Avenue, Stanton California 90680 immediately following distribution of the agenda packet to a majority of the City Council. Packet delivery typically takes plan on Thursday afternoons prior to the regularly scheduled meeting on Tuesday. The agenda packet is available for review and inspection on the city’s website at www.ci.stanton.ca.us.

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL Council / Agency / Authority Member Taylor Council / Agency / Authority Member Van
Council / Agency / Authority Member Warren
Mayor Pro Tem / Vice Chairman Ramirez
Mayor / Chairman Shawver

SPECIAL ORDERS OF THE DAY

4. NEW BUSINESS
4A. APPROVAL OF VARIOUS AGREEMENTS AND AMENDMENTS RELATED TO TRANSFER OF HOMEKEY 1.0 PROJECTS (STANTON INN AND SUITES AND TAHITI MOTEL) FROM PROJECT LLCS TO PROJECT LP; AND FINDING AND

DECLARING SUCH APPROVALS EXEMPT UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (PUBLIC RESOURCES CODE SECTION 21000 ET SEQ.)
Requested is the City Council’s approval of the following agreements and amendments (together, the “Agreements”):
• First Amendment to Grant Agreement for each of the Homekey 1.0 affordable housing projects at (i) the Tahiti Motel (11850 Beach Boulevard, Stanton, CA 90680) (the “Tahiti Motel,” and the project, the “Tahiti Motel Project”) and (ii) at the Stanton Inn and Suites a/k/a Stanton Apartment Homes (7161 Katella Avenue, Stanton, CA 90680) (the “Stanton Inn,” and the project, the “Stanton Inn Project” and together with the Tahiti Motel Project, the “Projects”); • Amended and Restated Regulatory Agreement for each of the Projects; • Subordination Agreement with Banner Bank for each of the Projects; • Ground Lease for certain vacant land adjacent to the Tahiti Motel, as part of the Tahiti Project.

Stanton City Council Joint Special Agenda Prepared by the Office of the City Clerk March 29, 2022

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RECOMMENDED ACTION:

1. City Council declare that approval of the Agreements are exempt from the California Environmental Quality Act (“CEQA”), because the Projects are both: (1) categorically exempt, because they involve conversion of the existing hotels into interim and permanent supportive housing and will involve negligible or no expansion of use (see 14 C.C.R. § 15301) and none of the exceptions to the categorical exemptions apply (see 14 C.C.R. § 15300.2) – i.e., the locations of the Projects are not in particularly sensitive environments; the cumulative impact of these Projects on the environment is not significant; there are no unusual circumstances that would result in a reasonable possibility that approval of the Agreements will result in a significant effect on the environment; the Projects will not result in damage to scenic resources; the Projects are not located on hazardous waste sites; and the Projects will not cause a substantial adverse change in the significance of any historical resource; and (2) statutorily exempt under California Public Resources Code § 21080.50. The categorical and statutory exemptions each independently exempt the whole of the action; therefore, no further environmental review is required under CEQA; and

2. Approve the Agreements, and authorize the City Manager, in his capacity as Director of the Housing Authority, to execute the Agreements substantially in the same form as attached hereto as Exhibits A-1, A-2, B-1, B-2, C-1, C-2, and D.

5. ADJOURNMENT
I hereby certify under penalty of perjury under the laws of the State of California, the foregoing agenda was posted at the Post Office, Stanton Community Services Center and City Hall, not less than 24 hours prior to the meeting. Dated this 28th day of March, 2022. /s/ Patricia A. Vazquez, City Clerk/Secretary

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CITY OF STANTON

REPORT TO CITY COUNCIL
TO: Honorable Mayor and Members of the City Council
DATE: March 29, 2022
SUBJECT: APPROVAL OF VARIOUS AGREEMENTS AND AMENDMENTS
RELATED TO TRANSFER OF HOMEKEY 1.0 PROJECTS (STANTON

INN AND SUITES AND TAHITI MOTEL) FROM PROJECT LLCS TO
PROJECT LP; AND FINDING AND DECLARING SUCH APPROVALS

EXEMPT UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
(PUBLIC RESOURCES CODE SECTION 21000 ET SEQ.)
REPORT IN BRIEF:

Requested is the City Council’s approval of the following agreements and amendments (together, the “Agreements”):
• First Amendment to Grant Agreement for each of the Homekey 1.0 affordable housing projects at (i) the Tahiti Motel (11850 Beach Boulevard, Stanton, CA 90680) (the “Tahiti Motel,” and the project, the “Tahiti Motel Project”) and (ii) at the Stanton Inn and Suites a/k/a Stanton Apartment Homes (7161 Katella Avenue, Stanton, CA 90680) (the “Stanton Inn,” and the project, the “Stanton Inn Project” and together with the Tahiti Motel Project, the “Projects”); • Amended and Restated Regulatory Agreement for each of the Projects; • Subordination Agreement with Banner Bank for each of the Projects; • Ground Lease for certain vacant land adjacent to the Tahiti Motel, as part of the Tahiti Project.

RECOMMENDED ACTION:

1. City Council declare that approval of the Agreements are exempt from the California Environmental Quality Act (“CEQA”), because the Projects are both: (1) categorically exempt, because they involve conversion of the existing hotels into interim and permanent supportive housing and will involve negligible or no expansion of use (see 14 C.C.R. § 15301) and none of the exceptions to the categorical exemptions apply (see 14 C.C.R. § 15300.2) – i.e., the locations of the Projects are not in particularly sensitive environments; the cumulative impact of these Projects on the environment is not significant; there are no unusual circumstances that would result in a reasonable possibility that approval of the Agreements will result in a significant effect on the environment; the Projects will not result in damage to scenic resources; the Projects are not located on hazardous waste sites; and the Projects will not cause a substantial Item: 4A
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adverse change in the significance of any historical resource; and (2) statutorily exempt under California Public Resources Code § 21080.50. The categorical and statutory exemptions each independently exempt the whole of the action; therefore, no further environmental review is required under CEQA; and

DISCUSSION:

On or about September 22, 2020, the City Council, at a joint regular meeting, approved a funding commitment in the amount of $5 million from the Housing Authority to Jamboree Housing Corporation (“Jamboree”) in support of the Projects contemplated under each of the respective Affordable Housing Grant and Regulatory Agreements (the “Agreements”) and directed the City Manager to execute funding commitment letters memorializing the same and to submit final funding agreements to the City Council for approval at a future meeting. The Agreements were subsequently submitted and approved by the City Council and executed as of November 17, 2020 (for the Tahiti Agreement) and as of December 7, 2020 (for the Stanton Inn Agreement). The regulatory agreements associated with each of the Agreements (the “Regulatory Agreements”) were recorded in the Official Records of Orange County on December 4, 2020 as Document No. 2020000713140 (for the Tahiti Motel Project) and on December 7, 2020 as Document No. 2020000717473 (for the Stanton Inn Project). Below are the salient terms for each of the Agreements:

Stanton Inn Agreement:
• Site address: 7161 Katella Avenue, Stanton, CA 90680
• Lot size: approx. 1.02 acres
• Proposed development: Rehabilitation of Stanton Inn for use as 72-unit affordable residential rental complex. Initial operation for, at most, five (5) years as interim housing for individuals and families who are experiencing homelessness or who are at risk of homelessness and who are impacted by the COVID-19 pandemic, then for the following fifty-five (55) years as permanent supportive housing. During permanent supportive housing period, up to 49% of units to be restricted for affordable housing for households earning less than 80% of area median income. The rest of the units will be restricted as very low affordable housing under other regulatory agreements by other funding sources, including the State’s Homekey Program
• Grant amount: $3,038,562.00
• Grant purpose: For operating expenses during interim housing period (i.e., up to first five (5) years)
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• Grant disbursement schedule: Five (5) annual installments. First (1st) installment disbursed at Jamboree’s closing of acquisition of the Stanton Inn and leasehold interest in the site, in prorated amount from the date of said closing until June 30, 2021, and each installment thereafter to occur on or about July 1 of each year for five (5) years
• Grant oversight: Jamboree must, within thirty (30) days of the end of each fiscal year (or prorated year, as applicable) for which it received grant funds, provide interim written report showing (a) all expenses incurred on the project, to which grant funds were applied in the prior year (or prior prorated year); and (b) comparison of such expenses against line items in the project budget. At the end, Jamboree must, within sixty (60) days, provide a final written report to the City with the same contents for the entirety of the five (5) years, plus prorated time • Default remedies: If Jamboree commits event of default that remains uncured, the City may do any of the following: (a) to the extent the grant has not yet been disbursed, refuse to advance all or any part of the grant; (b) to the extent the grant has not yet been disbursed, wholly or partially suspend or terminate the award of the grant; (c) wholly or partially suspend or terminate the agreement by giving at least thirty (30) days’ advance written notice to Jamboree; and (d) require Jamboree to repay any or all of the grant funds. The City may, to the extent not already disbursed, temporarily withhold disbursement of grant proceeds pending correction of default by Jamboree.

Tahiti Motel Agreement:
• Site address: 11850 Beach Boulevard, Stanton, CA 90680 • Lot size: approx. 1.45 acres
• Proposed development: Initial rehabilitation of Tahiti Motel and relocation of existing residents for use as 60-unit affordable residential rental complex. Initial operation for, at most, five (5) years as interim housing for individuals and families who are experiencing homelessness or who are at risk of homelessness and who are impacted by the COVID-19 pandemic, then, after additional rehabilitation, for the following fifty-five (55) years as permanent supportive housing. During permanent supportive housing period, up to 49% of units to be restricted for affordable housing for households earning less than 80% of area median income.

The rest of the units will be restricted as very low affordable housing under other regulatory agreements by other funding sources, including the State’s Homekey Program
• Grant amount: $1,961,438.00
• Grant purpose: For expenses associated with initial rehabilitation and relocation during interim housing period (i.e., up to first five (5) years) • Grant disbursement schedule: Monthly installments with initial disbursement to occur by no later than November 30, 2020 and to cover eligible expenses incurred in connection with close of escrow and Jamboree’s acquisition of the Tahiti Motel 55414.00201\34917974.4 4
• Grant oversight: Jamboree must submit two (2) reports – one after approximately six (6) months of first disbursement and another after one year of first disbursement, showing (a) all expenses incurred on the project, to which grant funds were applied in the prior six-month period / entire year period for second report; and (b) comparison of such expenses against line items in the project budget.
• Default remedies: [same as Stanton Inn Agreement].

FIRST AMENDMENT TO GRANT AGREEMENT
At the closing of the Stanton Inn Grant Agreement, the Authority paid the first installment of the Stanton Inn Grant to the Stanton Inn Developer, via escrow, in the amount of $607,712 (the “First Installment”). The Stanton Inn Developer used $147,950.00 of the First Installment amount on Eligible Expenses (as defined in the Stanton Inn Grant Agreement), leaving $459,762 (“First Installment Balance”) in escrow.

Having received its allocation of 9% tax credits from the California Tax Credit Allocation Committee to finance the “permanent supportive housing” phase of the Stanton Inn Project, the Stanton Inn Developer has no further need for the Stanton Inn Grant, including the First Installment Balance. Meanwhile, the Tahiti Motel Project requires more funding due to unanticipated cost overruns. The Tahiti Motel Developer has requested transfer of the First Installment Balance from the Stanton Inn Project to the Tahiti Motel Project. Since both Projects share equal priority with the Authority, Authority staff see no issue with this request and recommend transfer of the First Installment Balance. The First Installment Balance would be used by the Tahiti Motel Developer under the terms and conditions of the Tahiti Agreement.

The Amendment to the Stanton Inn Grant Agreement further calls for the forfeiture of the balance (Years 2-5 payment installments) of the Stanton Inn Grant (i.e., $2,430,850) to the Authority, which amount will be unencumbered and used for the Authority’s future affordable housing projects.

AMENDED AND RESTATED REGULATORY AGREEMENT
The main change to each of the Regulatory Agreements, which provide the covenants by which the Developers must operate the Projects upon completion of construction, is the clarification of the affordability level of the units. Namely, all units in both Projects shall be restricted to Very Low Income individuals and households making no more than 50% of the Average Median Income (AMI) in Orange County. Other changes include (i) more frequent reporting requirements by the Developers to the Authority, clarification of the content of such reports, and clarification of the Authority’s remedies in the event of default (i.e. the City’s and Authority’s ability to assess administrative citations but not to record liens on the Properties).
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SUBORDINATION AGREEMENT
Banner Bank, one of the Project LP lenders (“Banner Bank”) has requested that the Authority subordinate its Grant Agreements and certain provisions of its Regulatory Agreements with respect to both Projects, as a condition to making construction and permanent loans to the Project LP. Because the money provided by the Authority to the Developers was in the form of grants (and not loans), subordination of the Grant Agreements is a non-issue, since the Developers are not obligated to repay the Grants.

Of more concern is the Regulatory Agreements, which, if they were to be completely subordinated to Banner Bank’s loans, would be of no force and effect in the event of a foreclosure on the Projects. Authority staff negotiated with Banner Bank to only subordinate certain provisions of the respective Regulatory Agreements, not including the affordability covenants requiring the units in the Projects to remain affordable to lower income households for 55 years.

The Regulatory Agreement provisions the Authority agreed to subordinate to Banner Bank are:
• Section 12.4 (“Capital Replacement Reserve Account”). In the event of foreclosure, Banner Bank will rely on its own rules and regulations for maintaining a capital reserve account for each of the Projects and for making all necessary capital improvements to the Projects.
• Section 15.1.4 (“Events of Default”). In the event of foreclosure, an Event of Default under the Grant Agreements shall not constitute an Event of Default under the Regulatory Agreements.
• Section 26 (“Prohibition Against Transfer”). In the event of foreclosure, Banner Bank may freely transfer the properties and the Projects.

Importantly, Sections 6 (“Rental of Units”) and 7 (“Affordable Rent”) of the Regulatory Agreements, which ensure that the units in the Projects are leased out at an affordable rent to income-restricted tenants for 55 years, remain senior to the Banner Bank loan and, even in the event of foreclosure, Banner Bank and any successor in interest who purchases the Projects from the bank will be bound by those covenants.

GROUND LEASE OF PROPERTY ADJACENT TO TAHITI PROJECT
The Authority owns certain real property located at 11870 Beach Boulevard in Stanton (“Property”) commonly known as Assessor Parcel No. 131-241-21 and desires to lease (“Lease”) the Property to the Tahiti Developer for purposes accessory and complementary to and supportive of the affordable housing development being constructed on property adjacent to the Property. Specifically, Tahiti Developer intends to construct a community center on the Property for the benefit of residents in the Tahiti housing development. Salient terms of the Lease include:
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• Sec. 3(a) Lease Term: 99 years (from the date of recordation of the Memorandum of Lease);
• Sec. 4(a) Annual Rent: $1.00/year, to be pre-paid in full (i.e. $99.00) on the Commencement Date of the Lease;
• Sec. 12(c)(1)(i) Alterations & Improvements: Authority shall authorize any alterations or improvements that cost more than $100,000; • Sec. 16(k) Lender Protections: Authority may not encumber the Property without tenant’s lenders’ consent, and any lien placed on Property shall be subordinate; FISCAL IMPACT:

The Housing Authority Fund (Low and Moderate Income Housing Fund) has sufficient cash on hand to fund the Agreements.

ENVIRONMENTAL IMPACT:

In accordance with the requirements of the CEQA, these Projects have been determined to be both: (1) categorically exempt, because they involve conversion of the existing Hotels into interim and permanent supportive housing and will involve negligible or no expansion of use (see 14 C.C.R. § 15301) and none of the exceptions to the categorical exemptions apply (see 14 C.C.R. § 15300.2) – i.e., the locations of the Projects are not in particularly sensitive environments; the cumulative impact of these Projects on the environment is not significant; there are no unusual circumstances that would result in a reasonable possibility that approval of the Agreements will result in a significant effect on the environment; the Projects will not result in damage to scenic resources; the Projects are not located on hazardous waste sites; and the Projects will not cause a substantial adverse change in the significance of any historical resource; and (2) statutorily exempt under California Public Resources Code § 21080.50. The categorical and statutory exemptions each independently exempt the whole of the action; therefore, no further environmental review is required under CEQA
PUBLIC NOTIFICATION:

Public notice for this item was made through the regular agenda process.

STRATEGIC PLAN:
1 - Provide for a Safe Community
5 – Provide a High Quality of Life
6 – Maintain and Promote a Responsive, High Quality and Transparent Government 55414.00201\34917974.4 7
Prepared by: Finance:
/s/ Jarad L. Hildenbrand
__________________________
/s/ Michelle Bannigan
__________________________
Jarad L. Hildenbrand
City Manager
Michelle Bannigan, CPA
Finance Director
Approved as to Form By:
/s/ Best, Best & Krieger
__________________________
Best, Best & Krieger
City Attorney’s Office
ATTACHMENTS:
• Omnibus Resolution 2022-17
• Exhibit A-1 (First Amendment to Stanton Inn Grant and Regulatory Agreement) • Exhibit A-2 (First Amendment to Tahiti Grant and Regulatory Agreement) • Exhibit B-1 (Amended and Restated Stanton Inn Regulatory Agreement) • Exhibit B-2 (Amended and Restated Tahiti Regulatory Agreement) • Exhibit C-1 (Stanton Inn Subordination Agreement)
• Exhibit C-2 (Tahiti Subordination Agreement)
• Exhibit D (Ground Lease for Property Adjacent to Tahiti Motel Project) 55414.00000\34926025.3
RESOLUTION NO. 2022-17

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF STANTON,

CALIFORNIA, APPROVING VARIOUS AGREEMENTS AND AMENDMENTS RELATED TO TRANSFER OF HOMEKEY 1.0 PROJECTS (STANTON INN AND SUITES AND TAHITI MOTEL) FROM PROJECT LLCS TO PROJECT LP; AND

FINDING AND DECLARING SUCH APPROVALS EXEMPT UNDER THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (PUBLIC RESOURCES CODE SECTION 21000 ET SEQ.)
WHEREAS, the City of Stanton (the “City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, as of November 17, 2020, the City’s Housing Authority (the “Authority”) and JHC-Katella, LLC and JHC-Beach2, LLC (together, the “Developers”) entered into two (2) separate Affordable Housing Grant and Regulatory Agreements (each, a “Grant and Regulatory Agreement”) for Developers to rehabilitate a 72-unit hotel called the Stanton Inn and Suites, located at 7161 Katella Avenue, Stanton, CA 90680 (“Stanton Inn”) and a 60-unit motel called the Tahiti Motel, located at 11870 Beach Boulevard, Stanton, CA 90680 (“Tahiti” and with Stanton Inn, the “Hotels”), respectively, and ultimately convert them into permanent supportive housing for low-income individuals and families (together, the “Projects”); and WHEREAS, under the Tahiti Grant and Regulatory Agreement, the Authority granted to the Tahiti Developer a Homekey matching grant in the amount of $1,961,438 (the “Tahiti Grant”), which grant was disbursed to Tahiti Developer in one lump sum on or about November 17, 2020 and has since been fully expended by Tahiti Developer on Eligible Expenses (as defined in the Tahiti Grant and Regulatory Agreement); and
WHEREAS, under the Stanton Inn Grant and Regulatory Agreement, the Authority granted to Stanton Inn Developer a Homekey matching grant in the amount of $3,038,562.00 (the “Stanton Inn Grant”), payable in five (5) approximately equal annual installments, which first installment in the amount of $607,712 (“First Installment”) was disbursed on or about November 17, 2020 and of which Stanton Inn Developer used only $147,950, leaving a balance of $459,762 (“First Installment Balance”) in escrow; and
WHEREAS, Authority has not disbursed any further amounts, beyond the First Installment, of the Stanton Inn Grant – i.e., Two Million Four Hundred Thirty Thousand Eight Hundred Fifty Dollars ($2,430,850) (the “Years 2-5 Balance”); and WHEREAS, Stanton Inn Developer has no further need for the First Installment Balance or the Years 2-5 Balance, and Tahiti Developer has requested a transfer of the First Installment Balance to supplement the Tahiti Grant to put towards the Tahiti Project, and Stanton Inn Developer desires to forfeit the Years 2-5 Balance to the Authority for use on future affordable housing projects; and Attachment: A
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WHEREAS, the Developers and the Authority have agreed to amend the Grant and Regulatory Agreements to allow this transfer of the First Installment Balance and forfeiture of the Years 2-5 Balance, substantially in the same form as the respective First Amendments to Grant and Regulatory Agreements attached hereto as Exhibits A-1 and A-2 and incorporated herein by this reference (together, the “First Amendments to Grant and Regulatory Agreements”); and
WHEREAS, the Developers and the Authority desire to amend and restate the Regulatory Agreements of each of the Grant and Regulatory Agreements, substantially in the same form as Exhibits B-1 and B-2 attached hereto and incorporated herein by reference (together, the “Amended and Restated Regulatory Agreements”), to include, among other things, a clarification that all units in both Projects will be restricted to Very Low Income individuals and households making less than 50% of the Area Median Income for Orange County, as well as other provisions with respect to more frequent reporting by the Developers to the Authority and the Authority’s remedies in the event of default; and WHEREAS, the Developers were allocated 9% tax credits from the California Tax Credit Allocation Committee to finance the development of their respective Projects and have partnered with a tax credit investor (“Tax Credit Investor”) to form Katella Housing Partners LP, a California limited partnership (the “Project LP”), in which the Developers will be general partners and the Tax Credit Investor will be a limited partner; and
WHEREAS, the Developers intend to transfer the Projects to the Project LP, and in connection with that conveyance, take out construction and permanent secured loans for the benefit of the Projects from traditional banks, including Banner Bank (“Banner Bank”); and
WHEREAS, as a condition of making the necessary loan for the Projects, Banner Bank has required the Authority to subordinate its Grant and Regulatory Agreements, in a form substantially similar to Exhibits C-1 and C-2 attached hereto and incorporated by reference (together, the “Subordination Agreements”); however, it has permitted the affordability covenants in such Grant and Regulatory Agreements to remain senior to Banner Bank’s deed of trust; and

WHEREAS, in connection with and included in the Tahiti Project, the City and Tahiti Developer have entered into a Lease Agreement, substantially in the same form as attached hereto as Exhibit D and incorporated herein by reference, pertaining to certain vacant real property adjacent to the Tahiti for the purpose of developing open space complementary to and supportive of the Tahiti Project (the “Ground Lease”); and
NOW THEREFORE, BE IT RESOLVED the City Council of the City of Stanton hereby finds and orders as follows:

SECTION 1. Recitals. All of the above recitals are true and correct and are hereby incorporated herein by reference.
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SECTION 2. CEQA. Approval of the First Amendments to Grant and Regulatory Agreements, the Amended and Restated Regulatory Agreements, the Subordination Agreements, and the Ground Lease (together, the “Amendments and Agreements”) is exempt from the California Environmental Quality Act (“CEQA”), because the Projects are both: (1) categorically exempt, because they involve conversion of the existing Hotels into interim and permanent supportive housing and will involve negligible or no expansion of use (see 14 C.C.R. § 15301) and none of the exceptions to the categorical exemptions apply (see 14 C.C.R. § 15300.2) – i.e., the locations of the Projects are not in particularly sensitive environments; the cumulative impact of these Projects on the environment is not significant; there are no unusual circumstances that would result in a reasonable possibility that approval of the Agreements will result in a significant effect on the environment; the Projects will not result in damage to scenic resources; the Projects are not located on hazardous waste sites; and the Projects will not cause a substantial adverse change in the significance of any historical resource; and (2) statutorily exempt under California Public Resources Code § 21080.50. The categorical and statutory exemptions each independently exempt the whole of the action; therefore, no further environmental review is required under CEQA.

SECTION 3. Approval of Amendments and Agreements. The forms, terms and provisions of the Amendments and Agreements, which have been presented to the City Council at this meeting are hereby each and all approved, and the City Manager or his designee(s) (the “Authorized Officers”) are each hereby authorized and directed on behalf of the City and in its name to execute and deliver the Amendments and Agreements in the name of and on behalf of the City in substantially the form hereby approved with such changes as the City Manager or designee executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. The City Clerk or other appropriate City officer is hereby authorized and directed to attest the signature of the Authorized Officers, as may be required or appropriate in connection with the execution and delivery of the Amendments and Agreements.

SECTION 4. Other Acts. The Authorized Officers are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents which they may deem necessary or advisable in order effectuate the purposes of this Resolution and the Amendments and Agreements, and any such actions previously taken by such officers are hereby ratified and confirmed.

SECTION 5. Effective Date. This Resolution shall take effect immediately upon adoption.

SECTION 6. Custodian of Records. The administrative record for this approval is maintained at City Hall located at 7800 Katella Avenue, Stanton CA 90680. The custodian of records is the City Clerk.

SECTION 7. Notice of Exemption. The City Council hereby authorizes staff to prepare, execute and file with the Orange County Clerk a notice of exemption within five (5) business days of the approval of this Resolution. 55414.00000\34926025.3
ADOPTED, SIGNED AND APPROVED this 29th day of March 2022. ________________________

DAVID SHAWVER, MAYOR
ATTEST:
___________________________________
PATRICIA A. VAZQUEZ, CITY CLERK
APPROVED AS TO FORM:
___________

HONGDAO NGUYEN, CITY ATTORNEY
ATTEST:

I, Patricia Vazquez, City Clerk of the City of Stanton, California DO HEREBY CERTIFY that the foregoing Resolution, being Resolution No. 2022-17 has been duly signed by the Mayor and attested by the City Clerk, all at a regular meeting of the Stanton City Council, held on March 29, 2022, and that the same was adopted, signed and approved by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

PATRICIA VAZQUEZ, CITY CLERK

55414.00000\34926025.3
EXHIBIT A-1

FIRST AMENDMENT TO STANTON INN GRANT AND REGULATORY AGREEMENT 55414.00000\34926025.3
EXHIBIT A-2

FIRST AMENDMENT TO TAHITI GRANT AND REGULATORY AGREEMENT 55414.00000\34926025.3
EXHIBIT B-1

AMENDED AND RESTATED STANTON INN REGULATORY AGREEMENT
55414.00000\34926025.3
EXHIBIT B-2

AMENDED AND RESTATED TAHITI REGULATORY AGREEMENT
55414.00000\34926025.3
EXHIBIT C-1

STANTON INN SUBORDINATION AGREEMENT
55414.00000\34926025.3
EXHIBIT C-2

TAHITI SUBORDINATION AGREEMENT
55414.00000\34926025.3

EXHIBIT D

GROUND LEASE TO PROPERTY ADJACENT TO TAHITI PROJECT
55414.00201\34932066.1

FIRST AMENDMENT TO

AFFORDABLE HOUSING GRANT AND REGULATORY AGREEMENT
This FIRST AMENDMENT TO AFFORDABLE HOUSING GRANT AND
REGULATORY AGREEMENT (“Amendment”) is entered into as of April _____, 2022, by and between the STANTON HOUSING AUTHORITY, a public body, corporate and politic (“Authority”), and JHC-BEACH2 LLC, a California limited liability company (“Tahiti Developer”). Authority and Tahiti Developer may be referred to together herein as the “Parties” and individually as a “Party.”
R E C I T A L S:

A. WHEREAS, on or about November 17, 2020, the Parties entered into that certain Affordable Housing Grant and Regulatory Agreement (the “Tahiti Grant Agreement”) pursuant to which Authority granted to Tahiti Developer a Homekey matching grant in the amount of One Million Nine Hundred Sixty One Thousand Four Hundred Thirty Eight Dollars ($1,961,438) (the “Tahiti Grant”), which grant was disbursed to Tahiti Developer in one lump sum on or about November 17, 2020 and has since been fully expended by Tahiti Developer on Eligible Expenses (as defined in the Tahiti Grant Agreement); B. WHEREAS, on or about November 17, 2020, the Authority also entered into that certain Affordable Housing Grant and Regulatory Agreement (the “Stanton Inn Grant Agreement”) with JHC-Katella LLC (“Stanton Inn Developer”) pursuant to which Authority granted to Stanton Inn Developer a Homekey matching grant in the amount of Three Million Thirty-Eight Thousand Five Hundred Sixty-Two Dollars ($3,038,562.00) (the “Stanton Inn Grant”), payable in five (5) approximately equal annual installments, to, among other things, rehabilitate that certain hotel located at 7161 Katella Avenue, Stanton, CA 90680 (“Stanton Inn”) and operate it as a 72-unit affordable residential rental complex called Stanton Apartment Homes (the “Stanton Inn Project”);
C. WHEREAS, pursuant to the Stanton Inn Grant Agreement, the first installment of the Stanton Inn Grant was disbursed to Stanton Inn Developer at closing in the amount of Six Hundred Seven Thousand Seven Hundred Twelve Dollars ($607,712.00) (“First Installment”). Stanton Inn Developer used One Hundred Forty Seven Thousand Nine Hundred Fifty Dollars ($147,950.00) of the First Installment amount, leaving Four Hundred Fifty Nine Thousand Seven Hundred Sixty Two Dollars ($459,762) (“First Installment Balance”) in escrow;
D. WHEREAS, Stanton Inn Developer is ready to begin the transition to the next phase – i.e., conversion of its interim housing to permanent supportive housing, which involves additional funding and a much more comprehensive rehabilitation, and does not require the use of the First Installment Balance or the remaining undisbursed portions of the Stanton Inn Grant;
E. WHEREAS, concurrently with this Amendment, Authority and Stanton Inn Developer have entered into an amendment of the Stanton Inn Grant Agreement, agreeing to, Exhibit: A-1
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55414.00201\34932066.1
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among other things, the transfer of the First Installment Balance to Tahiti Developer for use on the Tahiti Project, under the same terms and conditions applied to the Tahiti Grant under the Tahiti Grant Agreement.

A G R E E M E N T:

NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

1. Change to Authority Grant. “Authority Grant,” as used and defined in the Tahiti Grant Agreement, including but not limited to in Sections 1.6 and 2.1, is hereby revised to include the full amount of the First Installment Balance, thus resulting in an increased total grant amount of Two Million Four Hundred Twenty One Thousand Two Hundred Dollars ($2,421,200).

2. Remaining Provisions. Except as otherwise expressly provided in this Amendment, all of the terms and conditions of the Tahiti Grant Agreement shall remain in full force and effect.

3. Signatures in Counterpart. This Amendment may be executed in counterparts, each of which, when this Amendment has been signed by the Parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. [Signature Page Follows]
55414.00201\34932066.1
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IN WITNESS WHEREOF, Authority and Tahiti Developer each hereby represents that it has read this Amendment, understands it, and hereby executes this Amendment to be effective as of the day and year first written above.
"AUTHORITY"

STANTON HOUSING AUTHORITY,
a public body, corporate and politic
By: ___________________________________
Its: ___________________________________
"TAHITI DEVELOPER"
JHC-BEACH2 LLC,
a California limited liability company
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:

Michael Massie
Chief Development Officer
55414.00201\34932050.1

FIRST AMENDMENT TO

AFFORDABLE HOUSING GRANT AND REGULATORY AGREEMENT
This FIRST AMENDMENT TO AFFORDABLE HOUSING GRANT AND
REGULATORY AGREEMENT (“Amendment”) is entered into as of April ___, 2022, by and between the STANTON HOUSING AUTHORITY, a public body, corporate and politic (“Authority”), and JHC-KATELLA LLC, a California limited liability company (“Stanton Inn Developer”). Authority and Stanton Inn Developer may be referred to together herein as the “Parties” and individually as a “Party.”
R E C I T A L S:

A. WHEREAS, on or about November 17, 2020, the Parties entered into that certain Affordable Housing Grant and Regulatory Agreement (the “Stanton Inn Grant Agreement”) pursuant to which Authority granted to Stanton Inn Developer a Homekey matching grant in the amount of Three Million Thirty-Eight Thousand Five Hundred Sixty-Two Dollars ($3,038,562.00) (the “Stanton Inn Grant”);
B. WHEREAS, on or about the same date, the Stanton Inn Developer acquired a leasehold interest in that certain real property located at 7161 Katella Avenue, Stanton, CA 90680 which comprises approximately 1.02 acres of land area and is improved with that certain hotel known as the Stanton Inn & Suites (the “Stanton Inn”); C. WHEREAS, Stanton Inn Developer performed certain initial rehabilitation work to the Stanton Inn and surrounding property so that it could be used as a 72-unit affordable residential rental complex and changed the name of the development to Stanton Apartment Homes (the “Stanton Inn Project”);
D. WHEREAS, pursuant to the Stanton Inn Grant Agreement, the first installment of the Stanton Inn Grant was disbursed to Stanton Inn Developer at closing in the amount of Six Hundred Seven Thousand Seven Hundred Twelve Dollars ($607,712.00) (“First Installment”). This First Installment was to be used by Stanton Inn Developer as operational subsidy assistance during the “Interim Housing” period of the Stanton Inn Project, and Stanton Inn Developer is able to complete the “Interim Housing” period of the Stanton Inn Project without the use of the entire amount of the First Installment of the Stanton Inn Grant funds.

Specifically, Stanton Inn Developer used One Hundred Forty Seven Thousand Nine Hundred Fifty Dollars ($147,950.00) of the First Installment amount, leaving Four Hundred Fifty Nine Thousand Seven Hundred Sixty Two Dollars ($459,762) (“First Installment Balance”) in escrow;
E. WHEREAS, All portions of the Stanton Inn Grant other than the First Installment (i.e., Two Million Four Hundred Thirty Thousand Eight Hundred Fifty Dollars ($2,430,850)) (the “Years 2-5 Balance”) remain undisbursed; Exhibit: A-2
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55414.00201\34932050.1
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F. WHEREAS, the Stanton Inn Project is ready to begin the transition to the next phase – i.e., conversion of the “Interim Housing” to “Permanent Supportive Housing,” which involves additional funding and a much more comprehensive rehabilitation; G. WHEREAS, Stanton Inn Developer has obtained from the California Tax Credit Allocation Committee an allocation of 9% tax credits to fund the comprehensive rehabilitation necessary for the “Permanent Supportive Housing” phase of the Stanton Inn Project and does not require the use of the First Installment Balance or the Years 2-5 Balance) for “Interim Housing” operations or otherwise;
H. WHEREAS, on or about November 17, 2020, the Authority entered into that certain Affordable Housing Grant and Regulatory Agreement (the “Tahiti Grant Agreement”) with JHC-Beach2 LLC (“Tahiti Developer”) pursuant to which Authority granted to Tahiti Developer a Homekey matching grant in the amount of One Million Nine Hundred Sixty One Thousand Four Hundred Thirty Eight Dollars ($1,961,438) (the “Tahiti Grant”), paid in one lump sum, to, among other things, rehabilitate that certain sixty (60) unit motel located at 11850 Beach Boulevard, Stanton, CA 90680 (“Tahiti Motel”) and operate it for no more than five years as interim housing, then convert it to permanent supportive housing under similar terms and conditions as the Stanton Inn Project (the “Tahiti Project”); and I. WHEREAS, due to increased costs associated with development of the Tahiti Project, Tahiti Developer has a need for additional funds beyond the Tahiti Grant and has requested that the First Installment Balance be transferred to Tahiti Developer for use on the Tahiti Project.

A G R E E M E N T:

1. Financing. Section 2.1 of the Stanton Inn Grant Agreement is hereby amended and restated as follows (new language in bold):
“Amount and Source of Authority Grant. In order to assist in the operation of the Hotel as Interim Housing for the Target Population within the territorial limits of the City, Authority shall, subject to the terms and conditions set forth herein, and provided Grantee is not in default of this Agreement, provide Grantee financial assistance in the form of a grant not to exceed the sum of Three Million Thirty-Eight Thousand Five Hundred SixtyTwo Dollars ($3,038,562.00) (“Authority Grant”). The source of the Authority Grant is the City of Stanton Housing Authority Fund. Any Authority Grant funds that have not been disbursed by the end of the Interim Housing Period shall be forfeited by Grantee, and the Authority shall be under no obligation to disburse the balance of Authority Grant Funds. Any Authority Grant Funds that have been disbursed but not expended by the end of the Interim Housing Period must be returned to the Authority with accrued interest at a rate of 10% per annum from date due until date paid. Any such funds returned by check shall be made payable to the Authority and shall be mailed to the Authority at the address 55414.00201\34932050.1
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set forth in Section 7.2, no later than thirty (30) calendar days after the end of the Interim Housing Period. Notwithstanding anything to the contrary herein, by mutual written agreement of the Authority and Grantee, Grantee may, without penalty, at any time forfeit to the Authority any amount of the Authority Grant that is not required for Grantee’s use, for Authority to apply in its discretion.”

2. Transfer of First Installment Balance to Tahiti Developer. Stanton Inn Developer and Authority agree to transfer the First Installment Balance of the Stanton Inn Grant to Tahiti Developer for use on the Tahiti Project under the same terms and conditions applied to the Tahiti Grant under the Tahiti Grant Agreement.

3. Stanton Inn Developer hereby irrevocably forfeits to the Authority the Years 2-5 Balance.

4. Remaining Provisions. Except as otherwise expressly provided in this Amendment, all of the terms and conditions of the Stanton Inn Grant Agreement shall remain in full force and effect.

5. Signatures in Counterpart. This Amendment may be executed in counterparts, each of which, when this Amendment has been signed by the Parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. [Signature Page Follows]
55414.00201\34932050.1
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IN WITNESS WHEREOF, Authority and Stanton Inn Developer each hereby represents that it has read this Amendment, understands it, and hereby executes this Amendment to be effective as of the day and year first written above.
"AUTHORITY"

STANTON HOUSING AUTHORITY,
a public body, corporate and politic
By: ___________________________________
Its: ___________________________________
"STANTON INN DEVELOPER"

JHC-KATELLA LLC,
a California limited liability company
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:

Michael Massie
Chief Development Officer
55414.00201\33481228.1

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Stanton
7800 Katella Avenue
Stanton, CA 90680
Attn: City Manager
______________________________________________________________________________ SPACE ABOVE FOR RECORDER’S USE ONLY

EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383

AMENDED AND RESTATED REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
by and between

THE STANTON HOUSING AUTHORITY,
a public body, corporate and politic,
and

KATELLA HOUSING PARTNERS LP,
a California limited partnership
[Dated as of April ___, 2022 for reference purposes only] Exhibit: B-1
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55414.00201\33481228.1
1 AMENDED AND RESTATED REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
This AMENDED AND RESTATED REGULATORY AGREEMENT (Stanton Inn & Suites Affordable Housing Project) (“Regulatory Agreement”) is made and entered into as of April ___, 2022, by and between THE STANTON HOUSING AUTHORITY, a public body, corporate and politic (“Authority”), and KATELLA HOUSING PARTNERS LP, a California limited partnership (“Owner”).

RECITALS
A. The Authority and JHC-Katella LLC, a California limited liability company (the “Original Owner”) entered into that certain Affordable Housing Grant and Regulatory Agreement (Stanton Inn & Suites Affordable Housing Project) dated as of December 7, 2020 (the “Affordable Housing Agreement”), which provides that the Authority will grant certain funds to the Original Owner subject to the terms and conditions of the Affordable Housing Agreement. Under the Affordable Housing Agreement, the Authority agreed to provide financial assistance to the Original Owner for use as a 5-year operating subsidy following the Original Owner’s acquisition of a 72-unit hotel (the “Hotel”) located at 7161 Katella Avenue, Stanton, CA (the “Property”) and initial use of the Hotel by the Original Owner for Interim Housing, and thereafter, as a 72-unit multifamily permanent supportive housing residential development (the “Project”).

B. On or about December 7, 2020, the Authority and the Original Owner executed that certain Regulatory Agreement, which was recorded against the Property on December 7, 2020, as Instrument No. 2020000717473 (the “Original Regulatory Agreement”).

C. On or about the same date hereof, the Original Owner assigned to Owner, and Owner assumed from Original Owner, all of Original Owner’s rights and obligations under the Original Regulatory Agreement.

D. The Authority and Owner now wish to enter into this Regulatory Agreement for purposes of amending and restating the Original Regulatory Agreement.

E. The Authority and the Owner desire that, following the initial Interim Housing Period (which period commenced on December 7, 2020, the date of recordation of the Original Regulatory Agreement, and shall not exceed a total of five (5) years), the Project be operated as a multifamily residential community on the Property with the residential units made available to those individuals and households deemed Very Low Income by HCD (i.e., 30% to 50% of AMI) at an Affordable Rent as more specifically defined herein. This Regulatory Agreement establishes terms and conditions which govern the operation of the Property during both the Interim Housing and Permanent Supportive Housing Periods. The terms of the Affordable Housing Agreement require that certain covenants and affordability restrictions remain in full force and effect on the Project for a term that commenced on December 7, 2020 and continuing for (i) at most five (5) years as Interim Housing, then (ii) for fifty-five (55) years following the recordation of a Certificate of Completion vis-à-vis readiness of the Hotel for operation as 55414.00201\33481228.1
2 Permanent Supportive Housing (“Term”). More specifically, the Project will serve as Interim Housing for the Target Population during the Interim Housing Period of the Term. Thereafter, the Project will be converted to Permanent Supportive Housing for the fifty-five (55) year Permanent Supportive Housing Period of the Term, which commences after recordation of a Certificate of Completion.

F. Pursuant to this Regulatory Agreement, during the Permanent Supportive Housing Period of the Term, all of the units in the housing complex on the Property shall be rented to income-qualified tenants at Affordable Rents pursuant to this Regulatory Agreement, as that term is defined herein and in the Affordable Housing Agreement.

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND

UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE

CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY

ACKNOWLEDGED, THE OWNER AND THE AUTHORITY DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS AS FOLLOWS:

1. Amendment and Restatement of Original Regulatory Agreement. This Regulatory Agreement amends and restates, in its entirety, the Original Regulatory Agreement.

2. Definitions of Certain Terms. AS USED IN THIS REGULATORY AGREEMENT,

THE FOLLOWING WORDS AND TERMS SHALL HAVE THE MEANING AS PROVIDED IN THE RECITALS OR IN THIS SECTION 2. ALL INITIALLY

CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED IN THE RECITALS

OR IN THIS SECTION SHALL HAVE THE MEANING ASCRIBED TO SUCH TERM BY THE AFFORDABLE HOUSING AGREEMENT.

2.1. 50% Low Income Household. An individual or household that has a household income equal to or less than fifty percent (50%) of then current AMI adjusted for household size, as published by HCD annually.

2.2. Affordable Rent. In reference to each unit, during the Permanent Supportive Housing Period of the Term, the maximum rent, with allowance for utilities, for the applicable household income as published by the HCD annually adjusted for family size. For purposes of the calculation of Affordable Rent “adjusted for household size” shall be the federally-mandated household size assumptions as set forth in federal statutes or other regulations as required by the Homekey Program.

2.3. AMI. The Area Median Family Income or AMI for Orange County means the most recent applicable county median family income published by HCD.

2.4. Automobile Liability Insurance. Insurance coverage against claims of personal injury (including bodily injury and death) and property damage covering all the Owner owned, leased, hired and non-owned vehicles, with minimum limits for bodily injury and property damage of One Million Dollars ($1,000,000). Such insurance shall be provided by a business or commercial vehicle policy and may be provided through a combination of primary and excess or umbrella policies, all of which shall be subject to pre-approval by the Authority, which approval shall not be unreasonably withheld, delayed or conditioned. 55414.00201\33481228.1
3 2.5. Certificate of Occupancy. The written certification from the Authority or City, in substantially the form of Attachment No. 6 attached to the Affordable Housing Agreement, certifying that the Hotel is ready to serve as Interim Housing to the Target Population, in compliance with the terms and conditions of this Regulatory Agreement.

2.6. Certificate of Completion. The written certification of the Authority, in substantially the form of Attachment No. 7 attached to the Affordable Housing Agreement, certifying that the Hotel is ready to serve as Permanent Supportive Housing to 80% Low Income Households in compliance with the terms and conditions of this Regulatory Agreement.

2.7. Authority Parties. Collectively, the Authority and its commissions, agents, attorneys, officers, employees, and authorized representatives.

2.8. HCD. The California Department of Housing and Community Development.

2.9. HUD. The United States Department of Housing and Urban Development.

2.10. Income Certification Form. The Certification of Tenant Eligibility attached to this Regulatory Agreement as Attachment No. 2 and incorporated by this reference, or comparable income certification form required by HCD or other governmental agencies.

2.11. Interim Housing Period. The period commencing from the date on which Owner obtains a Certificate of Occupancy until the date when the last Interim Housing resident is relocated to prepare the Hotel for rehabilitation and operation as Permanent Supportive Housing.

2.12. Liability Insurance. Commercial general liability insurance against claims for bodily injury, personal injury, death, or property damage occurring upon, in, or about the Property, the Project or adjoining streets or passageways, at least as broad as Insurance Services Office Occurrence Form CG0001, with a minimum liability limit of Two Million Dollars ($2,000,000) for any one occurrence and which may be provided through a combination of primary and excess or umbrella insurance policies. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the Project or the general aggregate limit shall be twice the required minimum liability limit for any one occurrence.

2.13. Manager Unit. The two (2) units within the Project reserved exclusively during the Interim Housing Period, and the one (1) unit within the Project reserved exclusively during the Permanent Supportive Housing Period, for use by the on-site manager or on-site maintenance personnel employed by the Owner or the Property Manager, as applicable.

2.15. Project. The operation of a multi-family rental housing project which shall include not less than seventy-two (72) units, all but two (2) of which two (2) of which, during the Interim Period, and one (1) of which, during the Permanent Supportive Housing Period, shall be occupied by individuals from the Target Population, during the Interim Housing Period of the 55414.00201\33481228.1
4 Term, and then rented to Qualified Households at Affordable Rents, during the Permanent Supportive Housing Period of the Term, and all related on- and off-site improvements, as more particularly described in the Affordable Housing Agreement.

2.16. Property. Approximately 1.02 acres of land area located in the City of Stanton, County of Orange, State of California, which is more particularly described in the legal description attached hereto as Attachment No. 1.

2.17. Property Insurance. Insurance providing coverage for the Property and all improvements on or to the Property against loss, damage, or destruction by fire and other hazards encompassed under the broadest form of property insurance coverage then customarily used for like properties in the County of Orange, excluding earthquake coverage, in an amount equal to one hundred percent (100%) of the replacement value (without deduction for depreciation) of all improvements comprising the Project (excluding excavations and foundations) and in any event sufficient to avoid co-insurance and with no co-insurance penalty provision, with “ordinance or law” coverage. To the extent customary for like properties in the County of Orange at the time, such insurance shall include coverage for explosion of steam and pressure boilers and similar apparatus located on the Property; an “increased cost of construction” endorsement; and an endorsement covering demolition and cost of debris removal, all subject to policy sublimits.

Property Insurance shall also include rental or business interruption insurance in an amount, at least, equal to the average annual gross income from the Project for the preceding three (3) calendar years and providing for a 12-month extended period of indemnity.

2.18. Qualified Households. A household that (1) intends to reside in the Hotel during either the Interim Housing Period or the Permanent Supportive Housing Period; and (2)(a) during the Interim Housing Period, is a member of the Target Population; and (2)(b) during the Permanent Supportive Housing Period, whose income does not exceed 50% AMI.

2.19. Term. The period of time that commenced as of December 7, 2020, with the recordation of the Original Regulatory Agreement, and ending on the fifty-fifth (55th) anniversary of recordation of the Certificate of Completion.

2.20. Workers Compensation Insurance. Workers compensation insurance complying with the provisions of California law and an employer’s liability insurance policy or endorsement to a liability insurance policy, with , a minimum liability limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of the Owner.

3. Owner Covenants Regarding Reservation of Property for Affordable Housing. Owner covenants as follows:

3.1. During the Permanent Supportive Housing Period, the Owner covenants and agrees to reserve and restrict the Property for use and residential occupancy of the units by households who, at the time of initial occupancy of a unit and continuously thereafter (subject to the other provisions of this Regulatory Agreement), until the end of the Term, are members of a Qualified Household. One (1) unit within the Project may be used as a Manager Units at any given time. Notwithstanding anything to the contrary in this Regulatory Agreement, Owner shall 55414.00201\33481228.1
5 be permitted to and shall use the Property as Interim Housing during the period prior to issuance of a Certificate of Completion for the substantial rehabilitation to be performed as implementation of the Project, and all provisions in this Regulatory Agreement restricting the use of the Property by rental to Qualified Households at an Affordable Rent and all certification and reporting requirements related thereto shall not be applicable until such time as a Certificate of Completion has been issued.

3.2. The Owner covenants to and for the benefit of the Authority that the Owner shall develop, own, manage and operate, or cause the management and operation of, the Project, during the Permanent Supportive Housing Period, to provide multi-family residential rental housing in the units only to Qualified Households at an Affordable Rent. The Owner hereby confirms and remakes its covenant set forth in Sections 4 and 5 of the Affordable Housing Agreement to rehabilitate the Property with the Project and such covenant is incorporated into this Regulatory Agreement in its entirety by this reference. During the Permanent Supportive Housing Period, the Owner will not negligently permit any unit to be used on a transient basis and will not lease or rent any unit for an initial period of less than twelve (12) months. No unit will, at any time, be leased or rented for use as a hotel, motel, time share, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitary or rest home.

4. Continuous Operation Covenant. The Owner covenants to and for the benefit of the Authority to cause the Project to be continuously operated, in accordance with the other provisions of this Regulatory Agreement, throughout the Term.

5. Abandonment. The Owner shall not abandon or surrender the operation of all or any part of the Project during the Term, except due to material casualty or condemnation.

6. Rental of Units. The Owner covenants that each unit shall be occupied or available for occupancy during the Interim Housing Period by Qualified Households from the Target Population and during the Permanent Supportive Housing Period by Qualified Households at an Affordable Rent on a continuous basis throughout the Term.

7. Affordable Rent. During the Permanent Supportive Housing Period, the monthly rent charged to a Qualified Household for the occupancy of a unit shall never exceed an Affordable Rent for such unit as set forth in Section 2.2. The following provisions apply only during the Permanent Supportive Housing Period.

7.1. Rent for units may be increased only once per calendar year, based on changes in Area Median Income; provided that the rent during the Permanent Supportive Housing Period for each unit must never exceed an Affordable Rent for the unit.

7.2. Determination of Qualified Household income shall be made by the Owner at the time of initial application by an individual or family for occupancy of a unit. At the time of initial application, the Owner shall require an applicant to complete the Income Certification Form and certify the accuracy of the information provided on such form. Each calendar year during the Term, the Owner shall require each Qualified Household occupying a unit to recertify the Qualified Household’s income on the Income Certification Form. The Owner shall make a good faith effort to verify the accuracy of income information provided in any Income 55414.00201\33481228.1
6 Certification Form by an applicant for occupancy of a unit or by a Qualified Household occupying a unit, by taking one or more of the following steps, as reasonably required or indicated: (1) obtain an income tax return and copy of each W2 Wage and Earnings Statement for the most recently concluded income tax year; (2) conduct a credit reporting agency or similar search; (3) obtain an income verification form from the applicant’s or the Qualified Household’s current employer(s); (4) obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant or the Qualified Household receives assistance from either of such agencies; or (5) if the applicant or an adult member of a Qualified Household is unemployed and has no such income tax return, obtain another form of independent verification. For purposes of this Section 7.2, the Owner may conclusively rely upon the evidence of the age of the occupant(s) of a unit as presented in a valid California Driver’s License, other form of identification issued by the State of California or the United States Government, which includes a date of birth. All such verification information shall only be obtained by the Owner after obtaining the applicant’s or the Qualified Household’s written consent for the release of such information to the Owner. Failure to consent in writing to the release of such income verification information to the Owner may disqualify an applicant for occupancy of a unit or be grounds for termination of Qualified Household’s occupancy of a unit.

7.4. The Owner shall maintain on file all Income Certification Forms completed by applicants for occupancy of units and by Qualified Households that occupied or are occupying units in accordance with Section 6 and shall provide copies of the rent roll and Income Certification Forms to the Authority for its review and approval within fifteen (15) days following Notice to the Owner.

7.5. The Owner and each Qualified Household occupying a unit shall permit the Authority to conduct inspections of the Property, the Project and each unit, from time-to-time, for purposes of verifying compliance with this Regulatory Agreement, upon fifteen (15) days prior written notice to the Owner.

7.6. During the Term, Owner shall submit to Authority a rent roll which provides, for each unit, the Qualified Household occupying the unit (for occupied units), the date the tenancy commenced, and the monthly rent, as well as an overall summary of occupancy/vacancy levels, incident and eviction issues, significant repair and maintenance issues, and any move-out reports for Qualified Households that have moved out of the Project (a “Report”). The first Report shall be submitted on the April 30th immediately following the issuance of the final Certificate of Occupancy for the Project by the Authority. Thereafter, during the first two (2) years of the Term, Owner shall submit a Report to Authority on a quarterly basis, by the last day of the first month immediately following each three-month quarter. Following the first two (2) years of the Term, the Authority and Owner shall meet and confer in good faith regarding Owner’s request to submit Reports to Authority on an annual or other less frequent basis, which request Authority will approve or deny in its reasonable discretion. The Authority shall maintain the confidentiality 55414.00201\33481228.1
7 of the information contained in any Report specifically relating to any particular Qualified Household occupying a unit, to the extent reasonably allowed by Law, as determined by the Authority’s general or special counsel. The Authority may, in its reasonable discretion and at any time during the Term, decrease or increase the frequency of the Reports.

8. The Owner Covenant Regarding Lease of Units. The Owner, for itself, its successors and assigns, covenants and agrees that, if any unit is rented or leased during the Term, the rental or lease of the unit shall be accomplished through a written lease agreement and all of the following restrictions shall apply:

8.1. A Qualified Household shall be the record tenant and only occupant of the unit.

8.2. The lease for each unit shall be for an initial term of not less than twelve (12) months.

8.3. Each lease for a unit shall contain all of the following provisions:

8.3.1. An agreement authorizing the Owner to immediately terminate the tenancy of a Qualified Household occupying a unit, where one or more members of that Qualified Household misrepresented any fact material to the qualification of such household as a Qualified Household;

8.3.2. An agreement providing that each Qualified Household occupying a unit shall be subject to annual certification or recertification of income as a condition to continued occupancy of the unit;

8.3.3. An agreement providing that each Qualified Household occupying a unit may be subject to rental increases in accordance with this Regulatory Agreement; and

8.4. The Owner shall not terminate the tenancy or refuse to renew the lease or rental agreement of a Qualified Household except for: (i) serious or repeated violations of the terms and conditions of the lease; (ii) because the previously Qualified Household is no longer a Qualified Household; (iii) for violation of applicable Federal, State, or local law; or (iv) for other good cause. The Owner shall follow all applicable laws in connection with termination of the tenancy of a Qualified Household or a refusal to renew the lease or rental agreement of a Qualified Household.

8.5. Tenant Selection Policies and Criteria. The Owner shall adopt written tenant selection policies and criteria that:
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8 8.5.1. are consistent with the purpose of providing Target Population assistance (during the Interim Housing Period) and affordable rental housing for Qualified Households at an Affordable Rent (during the Permanent Supportive Housing Period);

8.5.2. are reasonably related to tenant eligibility and ability to perform the obligations of the lease for a unit;

8.5.3. subject to applicable fair housing laws, give reasonable preference and consideration to the housing needs of households residing in the City of Stanton, including those that are involuntarily displaced by natural disaster, or by activities of the Authority, including but not limited to priority placement on a written waiting list of available units;

8.5.4. subject to applicable fair housing laws, give reasonable preference and consideration to the housing needs of households residing in, employed in, or offered employment in the City of Stanton, including but not limited to priority placement on a written waiting list of available units;

8.5.5. provide for the selection of tenants from a written waiting list in the chronological order of their application subject to Sections 8.5.3 and 8.5.4, insofar as is practicable;

8.5.6. give prompt written notice to any rejected applicant of the grounds for rejection;

8.5.7. provide for all of the units to be available for occupancy on a continuous basis to Qualified Households, and during the Permanent Supportive Housing Period, at an Affordable Rent; and

8.5.8. do not give preference to any particular class or group of persons in leasing or renting the units, except as provided in Sections 8.5.3 and 8.5.4 and to the extent that a tenant must be a Qualified Household.

9. Non-Discrimination. All units in the Project shall be available throughout the Term for occupancy on a continuous basis to Qualified Households. Except as provided in Sections 8.5.3 and 8.5.4, the Owner shall not give preference to any particular class or group of persons in renting the units in the Project. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any unit. Neither the Owner nor any person claiming under or through the Owner, shall establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any unit or in connection with the employment of persons for the operation and management of any unit, the Project or the Property. All deeds, leases or contracts made or entered into by the Owner as to the units, the Project or the Property or any portion thereof, shall contain covenants prohibiting discrimination, as prescribed by this Regulatory Agreement. The Owner shall include a statement in all advertisements, notices and signs for the availability of units in the Project for rent to the effect 55414.00201\33481228.1
9 that the Owner is an Equal Housing Opportunity Provider.

10. Equal Housing Notice. Provide for a statement in all advertisements, notices and signs for the availability of units for lease or rent to the effect that the Owner is an equal housing opportunity provider, and include an equal housing opportunity logotype in all notices, signs and advertisements in print media for the units.

11. Management of the Project.

11.1. Management of Project; Property Manager. Owner shall manage or cause the Project, and all appurtenances thereto that are a part of the Project, to be managed in a prudent and business-like manner, consistent with good property management standards for other comparable first quality, well-managed affordable rental housing projects in the County of Orange. Owner may contract with a property management company or property manager, to operate and maintain the Project; provided, however, the selection and hiring of the Property Manager (and each successor or assignee), including any Affiliate, is and shall be subject to prior written approval of the Executive Director (or designee), which approval shall not be unreasonably withheld, conditioned, or delayed. The Property Manager shall manage the Project in accordance with the definitions of Affordable Rent, the tenant selection requirements, and the definitions relating to income contained herein and in the Affordable Housing Agreement. The Property Manager shall be responsible for management of the Project, including, without limitation, the selection of Qualified Households, certification and recertification of household size, income, gender and the age of the head of household and relation of head of household to the household, of all Qualified Households, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Authority shall bear no responsibility for the management or operation of the Project or the Property. Owner shall conduct due diligence and background evaluation of any potential third-party property manager or property management company to evaluate experience, references, credit worthiness, and related qualifications as a property manager. Any proposed property manager shall have significant and relevant prior experience with affordable housing projects and properties comparable to the Project and the references and credit record of such property manager/company shall be investigated (or caused to be investigated) by Owner prior to submitting the name and qualifications of such proposed property manager to the Executive Director for review and approval. A complete and true copy of the results of such background evaluation shall be provided to the Executive Director. Approval of a Property Manager by the Executive Director shall not be unreasonably withheld, conditioned, or delayed, and the Executive Director shall use good faith efforts to respond as promptly as practicable in order to facilitate effective and ongoing property management of the Project on either a temporary or permanent basis. The replacement of a Property Manager by Owner and/or the selection by Owner of any new or different Property Manager during the Term shall also be subject to the foregoing requirements, except in the case of temporary management by a lender or limited partner of Owner, which shall be immediately submitted to Authority for approval and will not last longer than is reasonably necessary to locate a suitable replacement property manager, but in no event shall such temporary management continue for longer than 60 days.

11.2. Gross Mismanagement. During the Term, and in the event of “Gross Mismanagement” (as defined below) of the Project, the Executive Director and/or the Authority 55414.00201\33481228.1
10 shall have and retain the authority to direct and require any condition(s), acts, or inactions of Gross Mismanagement to cease and/or be corrected immediately, and further, subject to the prior written approval of any senior lender and the limited partner of the limited partnership to be established by Owner to complete the rehabilitation work, to direct and require the immediate removal of the Property Manager and replacement with a new qualified and approved Property Manager, if such condition(s) is/are not ceased and/or corrected after expiration of thirty (30) days from the date of written notice from the Executive Director. If Owner or Property Manager has commenced to cure such Gross Mismanagement condition(s) on or before the 30th day from the date of written notice (with evidence of such submitted to the Executive Director), but has failed to complete such cure by the 30th day (or such longer period if the cure cannot reasonably be accomplished in thirty (30) days as reasonably determined by the non-defaulting party), then Owner and its Property Manager shall have an additional thirty (30) days to complete the cure of Gross Mismanagement condition(s). In no event shall any condition of Gross Mismanagement continue uncured for a period exceeding sixty (60) days from the date of the initial written notice of such condition(s), except that the conditions described in subdivisions 11.3.4 and 11.3.5 below may exist for up to, but no longer than, seventy-five (75) days without triggering the Authority’s right to assess administrative citations against Owner in accordance with Chapter 1.12 of the Stanton Municipal Code (the “Municipal Code”) and/or remove the Property Manager as described in the immediately following sentence as long as Owner is diligently working to cure such conditions of Gross Mismanagement. If such condition(s) do persist beyond such period, then subject to the prior written approval of any senior lender and the limited partner of the limited partnership to be established by Owner to complete the rehabilitation work, the Executive Director shall have the sole and absolute right to immediately and without further notice to Owner (or to Property Manager or any other person/entity) to remove the Property Manager and replace the Property Manager with a new property manager of the Executive Director’s selection at the sole cost and expense of Owner. If Owner takes steps to select a new Property Manager that selection is subject to the requirements set forth above for selection of a Property Manager.

For purposes of this Regulatory Agreement, the term “Gross Mismanagement” shall mean management of the Project in a manner which violates the terms of this Regulatory Agreement to operate a first quality affordable housing complex, and shall include, but is not limited to, any one or more of the following:

11.2.1. Negligently leasing a unit (other than the Manager Unit) to tenants who exceed or households that do not qualify as a Qualified Household (except if such action was based on fraudulent documents submitted by such tenant in the course of application for occupancy of a unit, which could not be and were not discovered by the Property Manager initially through the exercise of ordinary and customary due diligence);

11.2.2. Negligently allowing tenants to exceed the prescribed occupancy levels without taking immediate action to stop such overcrowding consistent with applicable laws (except if such action was based on fraudulent acts committed by such tenants, which could not be and were not discovered by the Property Manager through the exercise of ordinary and customary due diligence);

11.2.3. Under-funding required reserve accounts;
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11 11.2.4. Failing to timely maintain the Project in accordance with the Property Management Plan after written notice and expiration of the applicable cure period;

11.2.5. Failing to submit timely and/or complete reports to the Authority as required herein;

11.2.6. Fraud or embezzlement of Project funds, including without limitation funds in the reserve accounts;

11.2.7. Failing to timely correct any violation of law after being provided a written notice of, and opportunity to cure, such violation issued by the Authority, the City of Stanton, the County of Orange, the State of California, or any instrumentality thereof with jurisdiction over the Project, including but not limited to, the Orange County Sheriff’s Department, the Orange County Fire Authority, and any such local health and safety enforcement agency.

Notwithstanding the requirements of the Property Manager to correct any condition of Gross Mismanagement as described above, Owner is obligated and shall use its commercially reasonable efforts to correct any defects in property management or operations at the earliest feasible time and, if necessary, to replace the Property Manager as provided above. Owner shall include advisement and provisions of the foregoing requirements and requirements of this Regulatory Agreement within any contract between Owner and its Property Manager for the Project.

11.3. Code Enforcement. Owner acknowledges and agrees that the Authority, and their employees and authorized agents, shall have the right to conduct code compliance and/or code enforcement inspections of the Project and the units, both exterior and interior, at reasonable times and upon reasonable notice (not less than forty-eight (48) hours’ prior notice, except in an emergency) to Owner and/or an individual tenant. If such notice is provided by Authority representative(s) to Owner, then Owner (or its Property Manager) shall immediately and directly advise any affected tenant of such upcoming inspection and cause access to the area(s) and/or unit(s) at the Project to be made available and open for inspection. Owner shall include express advisement of such inspection rights within the lease/rental agreements for each unit in the Project in order for each and every tenant and tenant household to be aware of this inspection right. The Authority and the City shall have the right to assess administrative citations in accordance with Chapter 1.12 of the Municipal Code against Owner, Property Manager, and/or any tenant of any unit in the Project, as applicable; provided, however, notwithstanding anything in this Regulatory Agreement to the contrary, neither the Authority nor the City shall have any right to record a notice of administrative pendency pursuant to Section 1.12.40.E of the Municipal Code or record a lien or notice of special assessment on title to the Property pursuant to Section 1.12.130 of the Municipal Code, without the prior written approval of any Senior Lenders.

11.4. Onsite Services. During the Permanent Supportive Housing Period, Owner shall provide a variety of social services at the Project. Owner shall use its best efforts to create a comprehensive social service program that is targeted to the needs of the residents of the Project which, in addition to including all of the services listed in Owner’s application for Tax Credits, 55414.00201\33481228.1
12 may include the following services: after school programs of an ongoing nature for school age children, and the availability of a bona fide services coordinator or social worker to the tenants.

Owner shall ensure that all personnel providing or coordinating all social services shall be adequately trained and counseled. After commencement of the Permanent Supportive Housing Period, within thirty (30) days after Owner has initially leased fifty percent (50%) of the units, Owner shall provide Authority with a list and summary of the social services Owner will provide at the Project. Owner shall promptly notify the Authority, in writing, whenever Owner anticipates changing or supplementing Owner’s social services program, which notification shall set forth, with specificity, the anticipated changes. Owner shall not, without the prior written consent of the Authority, which consent shall not be unreasonably delayed or withheld, terminate or reduce any social services programs, and in any such request to so terminate or reduce services, Owner shall include an explanation and justification for such termination or reduction.

Concurrently with Owner’s submittal of any Report pursuant to Section 7.6, Owner shall also provide to the Authority, an economic mobility report (an “Economic Mobility Report”). The Economic Mobility Report will summarize program activities designed to encourage selfsufficiency and promotion to market-rate housing. The Economic Mobility Report will include information regarding the programs offered, the attendance, and number of residents that successfully transitioned to market-rate housing.

11.5. Insurance.

11.5.1. Required Insurance. During the Interim Housing Period, Owner shall certify in writing to Authority that it is in compliance with the Homekey Program insurance requirements, as set forth in Article VI, section 600 of the HCD Homekey Notice of Funding Availability (NoFA). During the Permanent Supportive Housing Period, Owner shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to Authority, during the entire term of this Regulatory Agreement, duplicate originals or appropriate endorsements of commercial general liability insurance policies in the amount of at least Two Million Dollars ($2,000,000) combined single limits, naming Authority and its officers, employees, and agents as additional insureds or co-insureds. Owner shall also furnish or cause to be furnished to Authority evidence of builder’s risk coverage written on a completed value basis in an amount equal to the full replacement cost of the improvements with coverage available on the so-called non-reporting “all risk” form of policy, including coverage against collapse, fire, and water damage, with such insurance to be in such amounts and form and written by such companies as shall be approved by Authority. Such policy shall name Authority as a loss payee. The foregoing insurance policies:

11.5.1.1. shall be primary insurance and not contributory with any other insurance which Authority may have;

11.5.1.2. shall contain no special limitations on the scope of protection afforded to Authority and its officers, employees, agents, and representatives;

11.5.1.3. shall be “date of occurrence” and not “claims made” insurance;

11.5.1.4. shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability; 55414.00201\33481228.1
13 11.5.1.5. shall provide that the policy will not be cancelled by the insurer or Ownewr unless there is a minimum of thirty (30) days prior written notice to Authority;

11.5.1.6. shall be written by a good and solvent insurer admitted in California and registered with the California State Department of Insurance; and

11.5.1.7. shall be endorsed to state that any failure to comply with the reporting provisions of the policies shall not affect coverage provided to Authority.

Owner shall also furnish or cause to be furnished to Authority evidence reasonably satisfactory to Authority that Owner’s Contractor carries workers’ compensation insurance as required by law.

Owner agrees that the provisions of this Section 11.5.1 shall not be construed as limiting in any way the extent to which Owner may be held responsible for the payment of damages to any persons or property resulting from Owner’s activities or the activities of any person or persons for which Owner is otherwise responsible. No later than five (5) days after the Effective Date, Owner shall provide evidence of the above-required insurance (such as Certificates of Insurance of appropriate insurance binders) and obtain approval thereof from Authority, which approval shall not be unreasonably withheld or delayed and may be waived in Authority’s sole and absolute discretion. Evidence of builder’s risk coverage may be provided after Owner receives all necessary construction financing.

11.5.2. Deliveries to the Authority. The Owner shall deliver to the Authority evidence of all insurance policies required by this Regulatory Agreement. No later than three (3) days before any insurance required by this Regulatory Agreement expires, is cancelled or its liability limits are reduced or exhausted, the Owner shall deliver to the Authority evidence of the Owner’s maintenance of all insurance this Regulatory Agreement requires. Each insurance policy required by this Regulatory Agreement shall be endorsed to state that coverage shall not be cancelled, suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar days’ advance written notice of such action has been given to the Authority by certified mail, return receipt requested; provided that if a thirty (30) days’ notice of cancellation endorsement is not available the Owner shall notify the Authority of this unavailability in writing and shall forward any notice of cancellation to the Authority within two (2) business days from date of receipt by the Owner; and further provided, however, that only ten (10) days’ advance written notice shall be required for any such action arising from non-payment of the premium for the insurance. Phrases such as “endeavor to” and “but failure to mail such Notice shall impose no obligation or liability of any kind upon the company” shall not be included, to the extent commercially available, in the cancellation wording of any certificates or policies of insurance applicable to the Authority Parties pursuant to this Regulatory Agreement.

11.5.3. Waiver of Certain Claims. The Owner shall cause each insurance carrier providing insurance coverage under this Regulatory Agreement to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to the Authority Parties, if not already in the policy. To the extent that the Owner obtains insurance with a Waiver of Subrogation, the 55414.00201\33481228.1
14 parties release each other, and their respective authorized representatives, from any claims for damage to any person or property to the extent such claims are paid by such insurance policies obtained pursuant to and in satisfaction of the provisions of this Regulatory Agreement.

11.5.4. No Claims Made Coverage. None of the insurance coverage required under this Regulatory Agreement may be written on a claims-made basis.

11.5.6. Authority Option to Obtain Coverage. During the continuance of an Event of Default arising from the failure of the Owner to carry any insurance required by this Regulatory Agreement, the Authority may, at its option, purchase any such required insurance coverage and the Authority shall be entitled to immediate payment from the Owner of any premiums and associated reasonable costs paid by the Authority for such insurance coverage.

Any amount becoming due and payable to the Authority under this Section 11.5.6 that is not paid within fifteen (15) calendar days after written demand from the Authority for payment of such amount, within an explanation of the amounts demanded, will bear interest from the date of the demand at the rate of eight percent (8%) per annum or the maximum interest rate allowed by applicable law, whichever is less. Any election by the Authority to purchase or not to purchase insurance otherwise required by the terms of this Regulatory Agreement to be carried by the Owner shall not relieve the Owner of its obligation to obtain and maintain any insurance coverage required by this Regulatory Agreement.

11.5.7. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions under insurance policies required by this Regulatory Agreement shall be declared to and approved by the Authority. The Owner shall pay all such deductibles or self-insured retentions regarding the Authority Parties or, alternatively, the insurer under each insurance policy required by this Section 11.5 shall eliminate such deductibles or self-insured retentions with respect to the Authority Parties.

11.5.8. No Separate Insurance. The Owner shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Regulatory Agreement, unless the Authority is made an additional insured thereon, as required by this Regulatory Agreement.

11.5.10. Nature of Insurance. The policies of insurance required by this Regulatory Agreement shall be issued by carriers that: (a) are listed in the current “Best’s Key Rating Guide—Property/Casualty—United States & Canada” publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of “A-” and a minimum financial size category of “XI” (exception may be made for the California Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in California. The Owner may provide any insurance under a “blanket” or “umbrella” insurance policy, provided that: (i) such policy or a certificate of such policy shall specify the amount(s) of the total insurance allocated to the Property and the Project, which amount(s) shall equal or exceed the amount(s) required by this Regulatory Agreement; and (ii) such policy otherwise complies with this Regulatory Agreement.

12. Maintenance of the Project. The Owner, for itself, its successors and assigns, hereby covenants and agrees that the exterior areas of the Project which are subject to public view (e.g.:
all improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the Term, there is an occurrence of an adverse condition on any area of the Project which is subject to public view in contravention of the general maintenance standard described above (“Maintenance Deficiency”), then the Authority shall notify the Owner in writing of the Maintenance Deficiency and give the Owner thirty (30) calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. “Maintenance Deficiency” includes, without limitation, the following inadequate or nonconforming property maintenance conditions and/or breaches of residential property use restrictions: (i) failure to properly maintain the windows, structural elements, and painted exterior surface areas of the units in a clean and presentable manner; (ii) failure to keep the common areas of the Project free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the Property; (iii) failure to regularly maintain, replace and renew the landscaping in a reasonable condition free of weed and debris; and (iv) the use of garage areas on the Project for purposes other than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of persons residing in the Project.

12.1. In the event the Owner fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the Authority may thereafter conduct a public hearing following transmittal of written notice thereof to the Owner ten (10) calendar days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Owner has failed to comply with the provision of this Section 12. If, upon the conclusion of a public hearing, the Authority makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, then the Authority shall have the right to enter the Project (exterior areas of the Project which are subject to public view only) and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity that the Authority may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the 55414.00201\33481228.1
16 Authority for the abatement of a Maintenance Deficiency as authorized by this Section 12.1 shall become a lien on the Project, the lien priority of which shall be determined by the date a Notice of Lien is recorded in the Official Records of the County of Orange. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the Authority to the Owner, the Authority shall have the right to enforce the lien in the manner as provided in Section 12.3.

12.2. Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the Project shall be removed by the Owner from any exterior surface of a structure or improvement on the Project by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the Project (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within seventy-two (72) hours following the time of its application, or the Owner’s actual knowledge of its existence, whichever occurs later; then in such event and without notice to the Owner, the Authority shall have the right to enter the Project and remove the graffiti. Notwithstanding any provision of the Regulatory Agreement to the contrary, any sum expended by the Authority for the removal of graffiti from the Project as authorized by this Section 12.2 shall become a lien on the Project, the lien priority of which shall be determined by the date a Notice of Lien is recorded in the Official Records of the County of Orange. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the Authority to the Owner, the Authority shall have the right to enforce its lien in the manner as provided in Section 12.3.

12.3. The parties hereto further mutually understand and agree that the rights conferred upon the Authority under this Section 12 expressly include the power to establish and enforce a lien or other encumbrance against the Property in the manner provided under California Civil Code Sections 2924, 2924b and 2924c, as such sections may be amended or superseded, in the amount as reasonably necessary to restore the Project to the maintenance standards required under this Section 12, including attorneys’ fees and costs of the Authority associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of the Authority in connection with such action. The lien priority of any such lien shall be determined by the date a Notice of Lien is recorded in the Official Records of the County of Orange. In any legal proceeding for enforcing such a lien against the Project, the prevailing party shall be entitled to recover its attorneys’ fees and costs of suit. The provisions of this Section 12 shall be a covenant running with the land for the Term and shall be enforceable by the Authority in its discretion, cumulative with any other rights or powers granted to the Authority under applicable law. Nothing in the foregoing provisions of this Section 12 shall be deemed to preclude the Owner from making any alterations, additions, or other changes to any structure or improvement or landscaping on the Project, provided that such changes comply with the zoning and development regulations of the Authority and other applicable law.

12.4. Capital Replacement Reserve Account. The Owner shall establish an account for the payment of repair and replacement of capital items (“Capital Replacement Reserve Account”) in an initial amount as required by the Owner’s lenders for the Project or the investor limited partner of the Owner. Each year thereafter, the Owner shall deposit into the Capital Reserve Replacement Account additional amounts as required by the Owner’s lenders for the 55414.00201\33481228.1
17 Project or the investor limited partner of the Owner, but not less than Two Hundred Fifty Dollars ($250) per Unit per year.

12.4.1. Capital Repairs and Replacements. Capital repairs and replacements shall include, but not be limited to, the following: wet and dry utilities; roof repair and replacement as necessary; repair and replacement of boilers and the major operating components thereof; stucco repair and replacement; exterior painting; replacement of carpeting and vinyl or other hard surface flooring; replacement of drapes; replacement of dishwashers, garbage disposals and other interior appliances; repair and replacement of heating, ventilating and air conditioning systems, equipment and components; and installation of solar panels. All of the foregoing and other similar expenditures on the Project shall be considered to be qualifying capital repair and replacement expenses. Interior painting and servicing, repair or replacement of interior hardware shall not be considered to be a capital repair, but shall be ordinary operating expenses for the Project. The Owner shall withdraw funds from the Capital Replacement Reserve Account to pay such capital repair and replacement expenses as the Owner may deem necessary for the purposes of meeting the maintenance and replacement obligations described herein.

12.4.2. Insured Depository. The Capital Replacement Reserve Account shall be maintained in a depository insured by an agency of the federal government.

12.4.3. Documentation. Annually, or more frequently upon the Authority’s written request, the Owner shall document the level of capital repairs and replacements for the preceding period. The Owner shall maintain and shall provide as requested documentation showing the quantity and price of items purchased, price of materials and the cost of contracted labor or other services incurred in connection with such capital repair and replacement, and such other items as the Authority may reasonably request.

12.4.4. Withdrawals from Reserve Account. On an annual basis, the Owner shall notify the Authority of the anticipated cash requirements which will need to be withdrawn from the Capital Replacement Reserve Account. Amounts so budgeted and approved by the Authority may be withdrawn by the Owner from the indicated Capital Replacement Reserve Account without further Authority approval. Other withdrawals for unbudgeted, unanticipated or emergency Project expenditures may be withdrawn by the Owner without prior the Authority approval, but the Owner shall notify the Authority in writing within ten (10) calendar days after withdrawal. All amounts so withdrawn by the Owner shall be expended on the Project and in accordance with this Regulatory Agreement. Withdrawals in excess of Twenty-Five Thousand Dollars ($25,000) in any one calendar year shall be pre-approved by the Authority in its reasonable discretion, subject to the rights of any Senior Lenders or the investor limited partner of the Owner.

12.4.5. Interest Earned on Funds in the Capital Replacement Reserve Account.

Any interest or other earnings from sums deposited into the Capital Replacement Reserve Account shall be retained in and added to the balance in said account.

12.4.6. Capital Needs Assessment. If requested in writing by the Authority, the Owner shall deliver to the Authority, for the Authority’s reasonable review and approval, a capital needs assessment (“CNA”) no more often than every ten (10) years after the date of the 55414.00201\33481228.1
18 Certificate of Completion for the Project. The CNA shall include an analysis of the Owner’s actual expenditures for capital needs compared to the most recently approved CNA, the Owner’s original operating budget and its then-current operating budget. Each CNA shall include a ten (10) year capital needs assessment or analysis of replacement reserve requirements prepared by a qualified third party in accordance with reasonable and customary standards for similar residential rental projects.

12.4.7. Displacement of Residents and Relocation. The Owner shall make commercially reasonable efforts to conduct capital repairs and replacements and ordinary repair and maintenance (collectively, “Repairs”) in good faith and in a manner that does not result in the displacement of any of the residents of the units. If any of the Owner’s actions to conduct Repairs result in displacement of any of the units’ residents, the Owner shall notify the Authority in writing, prior to conducting such Repairs, of the identities of the residents to be displaced, the units they will be displaced from, and the estimated length of time such residents shall be displaced. If the displacement of the residents triggers relocation obligations, the Owner shall be responsible, at its sole cost and expense, for any and all such relocation obligations and related expenses. The Owner shall comply with all applicable federal, state and local laws, rules and regulations regarding such relocation obligations and related expenses, including any relocation requirements set forth by the Authority, including as set forth in the Affordable Housing Agreement . The Owner shall defend, indemnify and hold harmless the Authority Parties from and against all liability for any relocation obligations and related expenses attributable to any Repairs.

13. Covenants to Run With the Land. The Owner and the Authority hereby declare their specific intent that the covenants, reservations and restrictions set forth herein are part of a plan for the promotion and preservation of affordable housing within the territorial jurisdiction(s) of the Authority and that each shall be deemed covenants running with the land and shall pass to and be binding upon the Property and each successor-in-interest of the Owner in the Property for the Term. The Owner hereby expressly assumes the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in this Regulatory Agreement. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument.

14. Burden and Benefit. The Authority and the Owner hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the Owner’s legal interest in the Property is affected by the affordable dwelling use and occupancy covenants hereunder. The Authority and the Owner hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Property by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the affordable housing goals and objectives of the Authority.
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19 15. Defaults.

15.1.1. failure of the Owner or any person under its direction or control to comply with or perform when due any material term, obligation, covenant or condition contained in this Regulatory Agreement after written notice and expiration of the applicable cure period;

15.1.2. any warranty, representation or statement made or furnished to the Authority by the Owner under this Regulatory Agreement that is knowingly or recklessly false or misleading in any material respect either now or at the time made or furnished;

15.1.3. the dissolution or termination of the existence of the Owner as an ongoing business, insolvency, appointment of a receiver for any part of the Property of the Owner, any assignment for the benefit of creditors, any type of creditor workout or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the Owner; or

15.1.4. an Event of Default pursuant to the Affordable Housing Agreement.

15.2. Notice of Default. The Authority shall give written notice of default to the Owner, in accordance with Section 22, stating that such notice is a “Notice of Default”, specifying the default complained of by the Authority and requiring the default to be remedied within thirty (30) calendar days of the date of the Notice of Default. Except as required to protect against further material damage, the Authority may not institute legal proceedings against the Owner until thirty (30) calendar days after providing the Notice of Default. Failure or delay in giving a Notice of Default shall not constitute a waiver of any default, nor shall it change the time of occurrence of the default. If the default specified in the Notice of Default is such that it is not reasonably capable of being cured within thirty (30) calendar days, and if the Owner initiates corrective action within said thirty (30) calendar day period and diligently works to effect a cure as soon as possible, then the Owner may have an additional sixty (60) calendar days to complete the cure of the default prior to exercise of any other remedy for the occurrence of an Event of Default. The parties may further extend this time upon mutual written agreement. The Authority shall give the investor limited partner or limited liability company in the Owner the following notice and cure rights:

15.2.1. The Authority will give the limited partner or limited liability company a copy of any Notice (at the limited partner's address provided in a notice by the Owner to the Authority) that the Authority gives to the Owner under this Regulatory Agreement, provided that Owner has provided the address and contact information for the investor limited partner or limited liability company in writing to the Authority;

15.2.2. The Authority will give the limited partner or limited liability company thirty (30) days after the limited partner's receipt of such Notice to cure a non-payment of any sum due under this Regulatory Agreement;
55414.00201\33481228.1
20 15.2.3. The Authority will give the limited partner or limited liability company sixty (60) days after the limited partner's or limited liability company’s receipt of such Notice to cure any other default under this Regulatory Agreement;

15.2.4. If a non-monetary default is incapable of being cured within sixty (60) days, the Authority will give the limited partner or limited liability company an additional ninety (90) days to cure such default provided the limited partner or limited liability company has commenced to cure such default and is diligently proceeding to cure such default through the end of such period; and

If the Owner fails to take corrective action relating to a default within thirty (30) calendar days following the date of Notice of Default (or to complete the cure within the additional time as set forth above for the limited partner of the Owner), an Event of Default shall be deemed to have occurred.

15.3. Inaction Not a Waiver of Default. Any failure or delays by the Authority in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by the Authority in asserting any of its rights and remedies shall not deprive the Authority of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

16. Remedies. Upon the occurrence of an Event of Default, the Authority shall, in addition to the remedial provisions of Section 12 as related to a Maintenance Deficiency at the Property, be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i) by mandamus or other suit, action or proceeding at law or in equity, to require the Owner to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the Authority; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and Agreements of the Owner to the Authority. Notwithstanding anything to the contrary herein, subject to Section 11.3 above, the Authority, acting on behalf of the City, may also assess administrative citations for each Event of Default in accordance with Chapter 1.12 of the Municipal Code.

16.1. Rights and Remedies are Cumulative. The rights and remedies of the Authority as set forth in this Section 16 are cumulative and the exercise by the Authority of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the Owner.

16.2. Enforcement by Third Parties. No third party shall have any right or power to enforce any provision of this Regulatory Agreement on behalf of the Authority or to compel the Authority to enforce any provision of this Regulatory Agreement against the Owner or the Project.

17. Governing Law. This Regulatory Agreement shall be governed by the laws of the State of 55414.00201\33481228.1
21 California and applicable federal laws, without regard to its conflicts of laws principles.

18. Amendment. This Regulatory Agreement may be amended after its recordation only by a written instrument executed by the Owner and the Authority.

20. Severability. If any provision of this Regulatory Agreement shall be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such invalidity or unenforceability of such provision shall not affect the remaining parts of this Regulatory Agreement which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable.

21. Time is of the Essence. For each provision of this Regulatory Agreement which states a specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed to be of the essence.

22. Notices, Demands and Communications Between the Parties. Any and all notices submitted by any party to another party pursuant to or as required by this Regulatory Agreement shall be dispatched by personally delivery; delivery through the United States mail, by registered or certified mail, postage prepaid; by means of prepaid overnight delivery service; or by email.

Notices shall be deemed given upon receipt in the case of personal delivery, two days after deposit in the mail, or the next business day in the case of email or overnight delivery. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as any Party may from time to time designate in writing.. Rejection, other refusal to accept or the inability to deliver any notice because of a changed address of which no notice was given or other action by a person or entity to whom notice is sent, shall be deemed receipt of the notice.

The following are the authorized addresses for the submission of notices to the parties, as of the date of this Regulatory Agreement:
55414.00201\33481228.1
22 To the Owner: Katella Housing Partners LP
c/o Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
Attention: Michael Massie, Chief Development
Officer
Phone: (949) 263-8676
Email: [email protected]
With copies to: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attention: Patrick D. McCalla, Esq.

Phone: (714) 641-5100
Email: [email protected]
BF Stanton Apartments LLLP
c/o Boston Financial Investment Management, LP
101 Arch Street, 13th Floor
Boston, Massachusetts 02110
Attention: Asset Management – Stanton Apartment
homes
Phone: (800) 829-9213
Holland & Knight LLP
10 St. James Avenue
Boston, Massachusetts 02116
Attention: Kristen M. Cassetta, Esq
Phone: (617) 523-2700
To the Authority: Stanton Housing Authority
7800 Katella Avenue
Stanton, CA 90680
Attention: Jarad Hildenbrand, Executive Director
Phone: (714) 890-4277
Email: [email protected]
With copies to: Best Best & Krieger LLP
18101 Von Karman Avenue, Suite 1000
Irvine, CA 92612
Attention: HongDao Nguyen, Esq
Phone: (949) 263-2614
Email: [email protected]
55414.00201\33481228.1
23 23. Force Majeure. Except as otherwise set forth in this Regulatory Agreement, this Regulatory Agreement and the obligations of any of the parties hereunder shall toll if such party is prevented or delayed from performance by reason of any cause beyond the reasonable control of such party including, but not limited to, acts of war, emergency, terrorism, bio-terrorism, governmental preemption in connection with a declared national emergency, disease (including, without limitation, delays arising out of the spread of COVID-19, such as, without limitation, delays in the responsiveness of, or the unavailability of, governmental authorities to grant permit applications or sign-offs, to perform inspections, or to record documents, or the unavailability of required meetings of representatives of governmental agencies necessary to act to grant any approvals) or by reason of any rule, order or regulation of any department or subdivision thereof of any governmental agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency described herein.

24. Recording. The parties hereto shall cause this Regulatory Agreement to be recorded in the official records of the County of Orange.

25. No Third Party Beneficiary. No claim as a third-party beneficiary under this Regulatory Agreement by any person, corporation or any other entity, shall be made or be valid against the Authority or the Owner.

26. Prohibition Against Transfer.

26.1. Except as expressly provided in the Affordable Housing Agreement or in any other agreement executed by the Authority and the Owner concurrently herewith or thereafter, including any subordination agreement, the Owner shall not, without prior written approval of the Authority, which may not be unreasonably withheld, delayed or conditioned: (i) assign or attempt to assign this Regulatory Agreement or any right herein; subordinate or attempt to subordinate the Affordable Housing Agreement or this Regulatory Agreement; or (iii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment of the whole or any part of the Property or the improvements thereon, with the exception of leases of the residential units as permitted by this Regulatory Agreement, or permit to be placed on any of the Property any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien.

26.2. In the absence of specific written agreement or approval by the Authority, no unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Property (or interest therein) shall be deemed to relieve the Owner or any other party from any obligations under this Regulatory Agreement.

27. Authority Approvals and Actions. The Executive Director shall have the authority to make approvals, issue interpretations, resolve disputes with Owner, waive provisions, grant extensions of time, approve amendments to this Regulatory Agreement and execute documents on behalf of the Authority (to the extent not otherwise provided in this Regulatory Agreement), including, without limitation, any documents necessary to implement any changes to the number or level of affordability of the units so long as such actions do not reduce the length of affordability of the units or add to the costs incurred or to be incurred by the Authority as specified herein. The Executive Director reserves the right, in his or her sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the City Council if the Executive 55414.00201\33481228.1
24 Director determines or believes that such action could increase the risk, liability or costs to the Authority, or reduce the length of affordability of any number of units in the Project.

IN WITNESS WHEREOF, the Owner and the Authority have caused this Regulatory Agreement to be signed, acknowledged and attested on their behalf by duly authorized representatives in counterpart original copies which shall upon execution by all of the parties be deemed to be one original document.
[Signatures on following pages]
55414.00201\33481228.1
25 AUTHORITY SIGNATURE PAGE
TO

REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
AUTHORITY:

STANTON HOUSING AUTHORITY,
a public body, corporate and politic
By: Date:

Executive Director
ATTEST:

City Clerk
APPROVED AS TO FORM:

City Attorney
55414.00201\33481228.1
26 OWNER SIGNATURE PAGE
TO

REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
OWNER:

KATELLA HOUSING PARTNERS LP,
a California limited partnership
By: JHC-Katella MGP, LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California non-profit public benefit corporation,
its Managing Member
By:

Name: Michael Massie
Title: Chief Development Officer
55414.00201\33481228.1
ATTACHMENT NO. 1
1 ATTACHMENT NO. 1
TO

REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
Property Legal Description
That certain property located in the City of Stanton, County of Orange, State of California, described as follows:

That portion of Section 23, Township 4 South, Range 11 West, in the City of Station, County of Orange, State of California, in the Ranchos Los Coyotes and Los Alamitos, as shown in Book 51,

Page 12 ends

Commencing at the intersection of the compromise boundary line between said Ranchos with the Northerly boundary line of Katella Avenue, as shown on a Map of Survey recorded in Book 13, Page 14, records of Surveys, in the Office of the County Recorder of said County; thence North 88° 45' West along said Northerly line 525.09 feet to the true point of beginning; thence North 0° 48' 30" West 333.58 feet; thence North 89° 02' 30" East 153.22 feet; thence South 0° 48' 30" West 339.44 feet to said North line of Katella Avenue; thence North 88° 46' West 153.28 feet to the true point of beginning.

Except therefrom that portion of the Southwest quarter of fractional Section 23, Township 4 South, Range 11 West, in the Rancho Los Alamitos, shown on map no, attached to the final decree of partition of said Rancho, a certified copy of which was recorded February 2, 1891, in Book 14, Page 31 of Deeds, in the Office of the County Recorder of said County, as described in the deed to Tony Fiamengo, recorded June 19, 1958, in Book 4322, Page 284, Official Records, in the Office of the County Recorder of said County Recorder of said County, that lies Southerly of a line that is parallel and concentric with and 60.00 feet Northerly from the center line of Katella Avenue as shown on the Map of said Tract No. 7294, recorded in Book 272, Page(s) 17 through 20 of Miscellaneous Maps, in the Office of the County Recorder of said County.

APN: 079-762-61 and 079-762-26
(End of Legal Description)
55414.00201\33481228.1
ATTACHMENT NO. 2
- 1 -
ATTACHMENT NO. 2
TO

REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
Certification of Tenant Eligibility
NOTE TO PROPERTY OWNER: This form is designed to assist you in computing Annual Income during the Permanent Supportive Housing Period.

Re: Stanton Inn & Suites Affordable Housing Project, Stanton, California I/We, the undersigned, state that I/we have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the property listed above. Listed below are the names of all persons who intend to reside in the unit:

1. 2. 3. 4. 5.

Names of
Members of
Household
Relationship
to Head of
Household Age
Social
Security
Number
Place of
Employment

6. Head of Household (check one):

Mother: ____
Father: ____
Other: _____________ (specify relationship – i.e. legal guardian, sister, brother, etc.) 55414.00201\33481228.1
ATTACHMENT NO. 2
- 2 -
Income Computation

7. The total anticipated income, calculated in accordance with the provisions of this Section 7, of all persons over the age of 18 years listed above for the 12-month period beginning the date that I/we plan to move into a unit is $ ____________________.

Included in the total anticipated income listed above are:
(a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets); (c) interest and dividends (including income from assets excluded below); (d) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of period receipts, including any lump sum payment for the delayed start of a periodic payment; (e) payments in lieu of earnings, such as unemployment and disability compensation, workmen’s compensation and severance pay;
(f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (i) any earned income tax credit to the extent that it exceeds income tax liability.

Excluded from such anticipated income are:
(a) casual, sporadic or irregular gifts;
(b) amounts which are specifically for or in reimbursement of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen’s compensation), capital gains and settlement for personal or property losses;
55414.00201\33481228.1
ATTACHMENT NO. 2
- 3 -
(d) amounts of educational scholarship paid directly to the student of the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes, are to be included in income; (e) special pay to a household member who is away from home and exposed to hostile fire;
(f) relocation payments under Title 11 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
(g) foster child care payments;
(h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977;
(i) payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act. (j) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes;
(k) payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program;
(l) payments received from the Job Training Partnership Act; (m) the first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Court of Claims.

8. Do the persons whose income or contributions are included in item 6 above:
(a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? ___ Yes ____ No; or (b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale) during the last two years at less than fair market value? ___Yes ___No (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than $5,000? ___Yes ___No (d) If the answer to (c) is yes, state:
(i) the amount of income expected to be derived from such assets in the 12- month period beginning on the date of initial occupancy in the unit that you propose to rent:
$______; and
55414.00201\33481228.1
ATTACHMENT NO. 2
- 4 -
(ii) the amount of such income, if any, that was included in item 6 above:
$______

9. (a) Are all of the individuals who propose to reside in the unit full-time students*? ____Yes ____No
*A full-time student is an individual enrolled as a full-time student during each of five calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional or farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is at least one of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? ____Yes ____No

10. Neither myself nor any other occupant of the unit I/we propose to rent is the Owner of the property in which the unit is located (hereinafter the “Owner”), has any family relationship to the Owner or owns, directly or indirectly, any interest in the Ownership. For purposes of this section, indirect the Ownership by an individual shall mean the Ownership by a family member, the Ownership by a corporation, partnership, estate or trust in proportion to the Ownership or beneficial interest in such corporation, partnership, estate or trust held by the individual or a family member, and the Ownership, direct or indirect, by a partner of the individual.

11. This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, correct and complete and, based upon information I/we deem reliable and that the statement of total anticipated income contained in Section 7 is reasonable and based upon such investigation as the undersigned deemed necessary.

12. I/we will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either an income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding calendar year.

13. I/we acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our agreement with the Owner to lease the units and will entitle the Owner to prevent or terminate my/our occupancy of the unit by institution of an action for eviction or other appropriate proceedings. 55414.00201\33481228.1
ATTACHMENT NO. 2
- 5 -

14. Housing Issuer Statistical Information (Optional--will be used for reporting purposes only):

Marital Status: _____________________________
Race (Head of Household)
White ________ Asian ________ Hispanic ________
African-American ________ Native American ________ Other ________ Physical Disability: Yes ________ No ________
I/we declare under penalty of perjury that the foregoing is true and correct.

Executed this ________ day of__________, ____ in the County of Orange, California. ____________________________________
Applicant
____________________________________
Applicant
[Signature of all persons over the age of 18 years listed in number 2 above required] 55414.00201\33481228.1
ATTACHMENT NO. 2
- 6 -
FOR COMPLETION BY PROPERTY THE OWNER ONLY:

1. Calculation of eligible income:
(a) Enter amount entered for entire household in 6 above: $______________ (b) (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance ($_______________);
(2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook savings ($________), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance;
(3) Enter at right the greater of the amount calculated under (1) or (2) above:
$_____________;
(c) TOTAL ELIGIBLE INCOME
(Line l(a) plus line 1(b)(3): $________________

2. The amount entered in l(c):
_____ Qualifies the applicant(s) as a Qualified Household. _____ Does not qualify the applicant(s) as Qualified Household.

3. Apartment unit assigned:

Bedroom Size: ______ Rent: $________

4. This apartment unit [was/was not] last occupied for a period of 31 consecutive days by persons whose aggregate anticipated annual income, as certified in the above manner upon their initial occupancy of the apartment unit, qualified them as a Qualified Household.

5. Method used to verify applicant(s) income:
_____ Employer income verification.
_____ Copies of tax returns.
_____ Other (_____________________)
_________________________________
Manager
55414.00201\33481228.1
ATTACHMENT NO. 2
- 7 -
The undersigned employee has applied for a rental unit located in a project financed in part by the City of Stanton for persons of very low income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee’s current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis.

Annual wages ________ Overtime ________ Bonuses ________ Commissions ________
Total current income ____________
I hereby certify that the statements above are true and complete to the best of my knowledge. _____________________________ _______________ ______________________________ Signature Date Title
I hereby grant you permission to disclose my income to ____________________________ in order that they may determine my income eligibility for rental of an apartment at [_____________________].
_____________________________ _______________
Signature Date
Please send to: ________________________________________ ________________________________________
________________________________________
I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge.
_____________________________ _______________
Signature Date
55414.00201\33481228.1

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Stanton
7800 Katella Avenue
Stanton, CA 90680
Attn: City Manager
______________________________________________________________________________ SPACE ABOVE FOR RECORDER’S USE ONLY

EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383

AMENDED AND RESTATED REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
by and between

THE STANTON HOUSING AUTHORITY,
a public body, corporate and politic,
and

JHC-KATELLA LLC,

KATELLA HOUSING PARTNERS LP,
a California limited liability companypartnership
[Dated as of _____________, 2020 April ___, 2022 for reference purposes only] Exhibit: B-2
Click here to return to the agenda.
55414.00201\33481228.1
1 AMENDED AND RESTATED REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
This AMENDED AND RESTATED REGULATORY AGREEMENT (Stanton Inn & Suites Affordable Housing Project) (“Regulatory Agreement”) is made and entered into as of _______________, 2020April ___, 2022, by and between THE STANTON HOUSING AUTHORITY, a public body, corporate and politic (“Authority”), and JHC-KATELLA LLCKATELLA HOUSING PARTNERS LP, a California limited liability company partnership (“Owner”).

RECITALS
A. The Authority and the JHC-Katella LLC, a California limited liability company (the “Original Owner ”) entered into that certain Affordable Housing Grant and Regulatory Agreement (Stanton Inn & Suites Affordable Housing Project) dated as of _____ December 7, 2020 (the “Affordable Housing Agreement”), which provides that the Authority will grant certain funds to the Original Owner subject to the terms and conditions of the Affordable Housing Agreement. Under the Affordable Housing Agreement, the Authority has agreed to provide financial assistance to the Original Owner for use as a 5-year operating subsidy following the Original Owner’s acquisition of the a 72-unit Hotel hotel (the “Hotel”) located at 7161 Katella Avenue, Stanton, CA (the “Property”) and initial use thereof of the Hotel by the Original Owner for Interim Housing, and thereafter, as a 72-unit multifamily permanent supportive housing residential development (the “Project”).

D. The Authority and Owner now wish to enter into this Regulatory Agreement for purposes of amending and restating the Original Regulatory Agreement.

B.E. The Authority and the Owner desire that, following the initial Interim Housing Period (which period commenced on December 7, 2020, the date of recordation of the Original Regulatory Agreement, and shall not exceed a total of five (5) years), the Project be operated as a multifamily residential community on the Property with the residential units made available to Qualified Households those individuals and households deemed Very Low Income by HCD (i.e., 30% to 50% of AMI) at an Affordable Rent as more specifically defined herein. This Regulatory Agreement establishes terms and conditions which govern the operation of the Property during both the Interim Housing and Permanent Supportive Housing Periods. The terms of the Affordable Housing Agreement require that certain covenants and affordability restrictions remain in full force and effect on the Project for a term commencing on the date of recordation of this Regulatory Agreement that commenced on December 7, 2020 and continuing for (i) at most 55414.00201\33481228.1
2 five (5) years as Interim Housing, then (ii) for fifty-five (55) years following the recordation of a Certificate of Completion vis-à-vis readiness of the Hotel for operation as Permanent Supportive Housing (“Term”). More specifically, the Project will serve as Interim Housing for the Target Population during the Interim Housing Period of the Term. Thereafter, the Project will be converted to Permanent Supportive Housing for the subsequent fifty-five (55) years year Permanent Supportive Housing Period of the Term, which commences after recordation of a Certificate of Completion.

C.F. Pursuant to this Regulatory Agreement, during the Permanent Supportive Housing Period of the Term, all of the units in the housing complex on the Property shall be rented to income-qualified tenants at Affordable Rents pursuant to this Regulatory Agreement, as that term is defined herein and in the Affordable Housing Agreement.

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND

UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE

CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY

ACKNOWLEDGED, THE OWNER AND THE AUTHORITY DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS AS FOLLOWS:

1. Amendment and Restatement of Original Regulatory Agreement. This Regulatory Agreement amends and restates, in its entirety, the Original Regulatory Agreement.

1.2. Definitions of Certain Terms. AS USED IN THIS REGULATORY AGREEMENT,

THE FOLLOWING WORDS AND TERMS SHALL HAVE THE MEANING AS PROVIDED IN THE RECITALS OR IN THIS SECTION 12. ALL INITIALLY

CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED IN THE RECITALS

OR IN THIS SECTION SHALL HAVE THE MEANING ASCRIBED TO SUCH TERM BY THE AFFORDABLE HOUSING AGREEMENT.

1.1.2.1. 8050% Low Income Household. An individual or household that has a household income equal to or less than eighty fifty percent (8050%) of then current AMI adjusted for household size, as published by HCD annually.

1.2.2.2. Affordable Rent. In reference to each unit, during the Permanent Supportive Housing Period of the Term, the maximum rent, with allowance for utilities, for the applicable household income as published by the HCD annually adjusted for family size. For purposes of the calculation of Affordable Rent “adjusted for household size” shall be the federally-mandated household size assumptions as set forth in federal statutes or other regulations as required by the Homekey Program.

1.3.2.3. AMI. The Area Median Family Income or AMI for Orange County means the most recent applicable county median family income published by HCD.

1.4.2.4. Automobile Liability Insurance. Insurance coverage against claims of personal injury (including bodily injury and death) and property damage covering all the Owner owned, leased, hired and non-owned vehicles, with minimum limits for bodily injury and property damage of One Million Dollars ($1,000,000). Such insurance shall be provided by a business or commercial vehicle policy and may be provided through a combination of primary 55414.00201\33481228.1
3 and excess or umbrella policies, all of which shall be subject to pre-approval by the Authority, which approval shall not be unreasonably withheld, delayed or conditioned.

1.5.2.5. Certificate of Occupancy. The written certification from the Authority or City, in substantially the form of Attachment No. 6 attached to the Affordable Housing Agreement, certifying that the Hotel is ready to serve as Interim Housing to the Target Population, in compliance with the terms and conditions of this Regulatory Agreement.

1.6.2.6. Certificate of Completion. The written certification of the Authority, in substantially the form of Attachment No. 7 attached to the Affordable Housing Agreement, certifying that the Hotel is ready to serve as Permanent Supportive Housing to 80% Low Income Households in compliance with the terms and conditions of this Regulatory Agreement.

1.7.2.7. Authority Parties. Collectively, the Authority and its commissions, agents, attorneys, officers, employees, and authorized representatives.

1.8.2.8. HCD. The California Department of Housing and Community Development.

1.9.2.9. HUD. The United States Department of Housing and Urban Development.

1.10.2.10. Income Certification Form. The Certification of Tenant Eligibility attached to this Regulatory Agreement as Attachment No. 2 and incorporated by this reference, or comparable income certification form required by HCD or other governmental agencies.

1.11.2.12. Liability Insurance. Commercial general liability insurance against claims for bodily injury, personal injury, death, or property damage occurring upon, in, or about the Property, the Project or adjoining streets or passageways, at least as broad as Insurance Services Office Occurrence Form CG0001, with a minimum liability limit of Two Million Dollars ($2,000,000) for any one occurrence and which may be provided through a combination of primary and excess or umbrella insurance policies. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the Project or the general aggregate limit shall be twice the required minimum liability limit for any one occurrence.

1.12.2.13. Manager Unit. The two (2) Units units within the Project reserved exclusively during the Interim Housing Period, and the one (1) unit within the Project reserved exclusively during the Permanent Supportive Housing Period, for use by the on-site manager or on-site maintenance personnel employed by the Owner or the Property Manager, as applicable.

2.14. Permanent Supportive Housing Period. The period commencing from the date Owner records in the Official Records of Orange County a Certificate of Completion, until the day that is fifty-five (55) years from that day.
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4 1.13.2.15. Project. The operation of a multi-family rental housing project which shall include not less than seventy-two (72) units, all but two (2) of which two (2) of which, during the Interim Period, and one (1) of which, during the Permanent Supportive Housing Period, shall be occupied by individuals from the Target Population, during the Interim Housing Period of the Term, and then rented to Qualified Households at Affordable Rents, during the Permanent Supportive Housing Period of the Term, and all related on- and off-site improvements, as more particularly described in the Affordable Housing Agreement.

1.14.2.16. Property. Approximately 1.02 acres of land area located in the City of Stanton, County of Orange, State of California, which is more particularly described in the legal description attached hereto as Attachment No. 1.

1.15.2.17. Property Insurance. Insurance providing coverage for the Property and all improvements on or to the Property against loss, damage, or destruction by fire and other hazards encompassed under the broadest form of property insurance coverage then customarily used for like properties in the County of Orange, excluding earthquake coverage, in an amount equal to one hundred percent (100%) of the replacement value (without deduction for depreciation) of all improvements comprising the Project (excluding excavations and foundations) and in any event sufficient to avoid co-insurance and with no co-insurance penalty provision, with “ordinance or law” coverage. To the extent customary for like properties in the County of Orange at the time, such insurance shall include coverage for explosion of steam and pressure boilers and similar apparatus located on the Property; an “increased cost of construction” endorsement; and an endorsement covering demolition and cost of debris removal, all subject to policy sublimits.

1.16.2.18. Qualified Households. A household that (1) intends to reside in the Hotel during either the Interim Housing Period or the Permanent Supportive Housing Period; and (2)(a) during the Interim Housing Period, is a member of the Target Population; and (2)(b) during the Permanent Supportive Housing Period, whose income does not exceed the maximum income allowable for the subject unit50% AMI.

1.17.2.19. Term. The period of time following the date of that commenced as of December 7, 2020, with the recordation of this the Original Regulatory Agreement, and ending on the fifty-fifth (55th) anniversary of recordation of the Certificate of Completion.

1.18.2.20. Workers Compensation Insurance. Workers compensation insurance complying with the provisions of California law and an employer’s liability insurance policy or endorsement to a liability insurance policy, with , a minimum liability limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of the Owner.

3. Owner Covenants Regarding Reservation of Property for Affordable Housing. Owner covenants as follows:

2.3.1. Reservation of Property for Affordable Housing. During the Permanent Formatted: Level 1, No widow/orphan control, Don't adjust space between Latin and Asian text, Don't adjust space
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5 Supportive Housing Period, the Owner covenants and agrees to reserve and restrict the Property for use and residential occupancy of the units by households who, at the time of initial occupancy of a unit and continuously thereafter (subject to the other provisions of this Regulatory Agreement), until the end of the Term, are members of a Qualified Household. Two One (21) Units unit within the Project may be used as Manager’s a Manager Units at any given time. Notwithstanding anything to the contrary in this Regulatory Agreement, Owner shall be permitted to and shall use the Property as Interim Housing during the period prior to issuance of a Certificate of Completion for the substantial rehabilitation to be performed as implementation of the Project, and all provisions in this Regulatory Agreement restricting the use of the Property by rental to Qualified Households at an Affordable Rent and all certification and reporting requirements related thereto shall not be applicable until such time as a Certificate of Completion has been issued..

3.3.2. Affordable Multi-Family Residential Rental Property Restrictive Covenant. The Owner covenants to and for the benefit of the Authority that the Owner shall develop, own, manage and operate, or cause the management and operation of, the Project, during the Permanent Supportive Housing Period, to provide multi-family residential rental housing in the units only to Qualified Households at an Affordable Rent. The Owner hereby confirms and remakes its covenant set forth in Sections 4 and 5 of the Affordable Housing Agreement to rehabilitate the Property with the Project and such covenant is incorporated into this Regulatory Agreement in its entirety by this reference. During the Permanent Supportive Housing Period, the Owner will not knowingly or recklessly The Owner covenants to and for the benefit of the Authority that the Owner shall develop, own, manage and operate, or cause the management and operation of, the Project, during the Permanent Supportive Housing Period, to provide multifamily residential rental housing in the units only to Qualified Households at an Affordable Rent.

The Owner hereby confirms and remakes its covenant set forth in Sections 4 and 5 of the Affordable Housing Agreement to rehabilitate the Property with the Project and such covenant is incorporated into this Regulatory Agreement in its entirety by this reference. During the Permanent Supportive Housing Period, the Owner will not negligently permit any unit to be used on a transient basis and will not lease or rent any unit for an initial period of less than twelve (12) months. No unit will, at any time, be leased or rented for use as a hotel, motel, time share, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitary or rest home.

5. Abandonment. The Owner shall not abandon or surrender the operation of all or any part of the Project during the Term, except due to material casualty or condemnation.

7. Affordable Rent. During the Permanent Supportive Housing Period, the monthly rent 55414.00201\33481228.1
6 charged to a Qualified Household for the occupancy of a unit shall never exceed an Affordable Rent for such unit as set forth in Section 1.22.2. The following provisions apply only during the Permanent Supportive Housing Period.

7.2. Determination of Qualified Household income shall be made by the Owner at the time of initial application by an individual or family for occupancy of a unit. At the time of initial application, the Owner shall require an applicant to complete the Income Certification Form and certify the accuracy of the information provided on such form. Each calendar year during the Term, the Owner shall require each Qualified Household occupying a unit to recertify the Qualified Household’s income on the Income Certification Form. The Owner shall make a good faith effort to verify the accuracy of income information provided in any Income Certification Form by an applicant for occupancy of a unit or by a Qualified Household occupying a unit, by taking one or more of the following steps, as reasonably required or indicated: (1) obtain an income tax return and copy of each W2 Wage and Earnings Statement for the most recently concluded income tax year; (2) conduct a credit reporting agency or similar search; (3) obtain an income verification form from the applicant’s or the Qualified Household’s current employer(s); (4) obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant or the Qualified Household receives assistance from either of such agencies; or (5) if the applicant or an adult member of a Qualified Household is unemployed and has no such income tax return, obtain another form of independent verification. For purposes of this Section 7.2, the Owner may conclusively rely upon the evidence of the age of the occupant(s) of a unit as presented in a valid California Driver’s License, other form of identification issued by the State of California or the United States Government, which includes a date of birth. All such verification information shall only be obtained by the Owner after obtaining the applicant’s or the Qualified Household’s written consent for the release of such information to the Owner. Failure to consent in writing to the release of such income verification information to the Owner may disqualify an applicant for occupancy of a unit or be grounds for termination of Qualified Household’s occupancy of a unit.

7.3. If, upon any recertification, the income of a previously Qualified Household exceeds one hundred forty percent (140%) of the qualifying income for a Qualified Household, then the Owner or Property Manager shall notify such household that its lease for its unit will not be renewed upon the expiration of its lease, unless the household again becomes a Qualified Household upon recertification prior to the expiration of its lease. In any event, if the income category of a Qualified Household upon recertification is different from the previous income of the Qualified Household, the Owner or Property Manager shall rent the next available unit to a Qualified Household with an income level that will maintain the tenant income level mix set forth in Section 6.

7.4. The Owner shall maintain on file all Income Certification Forms completed by applicants for occupancy of units and by Qualified Households that occupied or are occupying units in accordance with Section 6 and shall provide copies of the rent roll and Income 55414.00201\33481228.1
7 Certification Forms to the Authority for its review and approval within fifteen (15) days following Notice to the Owner.

7.6. The During the Term, Owner shall submit its first Annual Report to the Authority to Authority a rent roll which provides, for each unit, the Qualified Household occupying the unit (for occupied units), the date the tenancy commenced, and the monthly rent, as well as an overall summary of occupancy/vacancy levels, incident and eviction issues, significant repair and maintenance issues, and any move-out reports for Qualified Households that have moved out of the Project (a “Report”). The first Report shall be submitted on the April 30th immediately following the issuance of the final Certificate of Occupancy for the Project by the Authority.

Thereafter, on each April 30 during the Term, the Owner shall submit an Annual Report to the Authorityduring the first two (2) years of the Term, Owner shall submit a Report to Authority on a quarterly basis, by the last day of the first month immediately following each three-month quarter. Following the first two (2) years of the Term, the Authority and Owner shall meet and confer in good faith regarding Owner’s request to submit Reports to Authority on an annual or other less frequent basis, which request Authority will approve or deny in its reasonable discretion. The Authority shall maintain the confidentiality of the information contained in any Annual Report specifically relating to any particular Qualified Household occupying a unit, to the extent reasonably allowed by Law, as determined by the Authority’s general or special counsel. The Authority may, in its reasonable discretion and at any time during the Term, decrease or increase the frequency of the Reports.

8.1. A Qualified Household shall be the record tenant and only occupant of the unit.

8.2. The lease for each unit shall be for an initial term of not less than twelve (12) months.

8.3. Each lease for a unit shall contain all of the following provisions:

8.3.2. An agreement providing that each Qualified Household occupying a unit shall be subject to annual certification or recertification of income as a condition to continued occupancy of the unit;
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numbers
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8 8.3.3. An agreement providing that each Qualified Household occupying a unit may be subject to rental increases in accordance with this Regulatory Agreement; and

8.5. Tenant Selection Policies and Criteria. The Owner shall adopt written tenant selection policies and criteria that:

8.5.1. are consistent with the purpose of providing Target Population assistance (during the Interim Housing Period) and affordable rental housing for Qualified Households at an Affordable Rent (during the Permanent Supportive Housing Period);

8.5.2. are reasonably related to tenant eligibility and ability to perform the obligations of the lease for a unit;

8.5.5. provide for the selection of tenants from a written waiting list in the chronological order of their application subject to Sections 8.5.3 and 8.5.4, insofar as is practicable;

8.5.6. give prompt written notice to any rejected applicant of the grounds for rejection;

8.5.7. provide for all of the units to be available for occupancy on a continuous basis to Qualified Households, and during the Permanent Supportive Housing Period, at an 55414.00201\33481228.1
9 Affordable Rent; and

9. Non-Discrimination. All units in the Project shall be available throughout the Term for occupancy on a continuous basis to Qualified Households. Except as provided in Sections 8.5.3 and 8.5.4, the Owner shall not give preference to any particular class or group of persons in renting the units in the Project. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any unit. Neither the Owner nor any person claiming under or through the Owner, shall establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any unit or in connection with the employment of persons for the operation and management of any unit, the Project or the Property. All deeds, leases or contracts made or entered into by the Owner as to the units, the Project or the Property or any portion thereof, shall contain covenants prohibiting discrimination, as prescribed by this Regulatory Agreement. The Owner shall include a statement in all advertisements, notices and signs for the availability of units in the Project for rent to the effect that the Owner is an Equal Housing Opportunity Provider.

11. Management of the Project.

11.1. Management of Project; Property Manager. Owner shall manage or cause the Project, and all appurtenances thereto that are a part of the Project, to be managed in a prudent and business-like manner, consistent with good property management standards for other comparable first quality, well-managed affordable rental housing projects in the County of Orange. Owner may contract with a property management company or property manager, to operate and maintain the Project; provided, however, the selection and hiring of the Property Manager (and each successor or assignee), including any Affiliate, is and shall be subject to prior written approval of the Executive Director (or designee), which approval shall not be unreasonably withheld, conditioned, or delayed. The Property Manager shall manage the Project in accordance with the definitions of Affordable Rent, the tenant selection requirements, and the definitions relating to income contained herein and in the Affordable Housing Agreement. The Property Manager shall be responsible for management of the Project, including, without limitation, the selection of Qualified Households, certification and recertification of household size, income, gender and the age of the head of household and relation of head of household to the household, of all Qualified Households, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and 55414.00201\33481228.1
10 security. The Authority shall bear no responsibility for the management or operation of the Project or the Property. Owner shall conduct due diligence and background evaluation of any potential third-party property manager or property management company to evaluate experience, references, credit worthiness, and related qualifications as a property manager. Any proposed property manager shall have significant and relevant prior experience with affordable housing projects and properties comparable to the Project and the references and credit record of such property manager/company shall be investigated (or caused to be investigated) by Owner prior to submitting the name and qualifications of such proposed property manager to the Executive Director for review and approval. A complete and true copy of the results of such background evaluation shall be provided to the Executive Director. Approval of a Property Manager by the Executive Director shall not be unreasonably withheld, conditioned, or delayed, and the Executive Director shall use good faith efforts to respond as promptly as practicable in order to facilitate effective and ongoing property management of the Project on either a temporary or permanent basis. The replacement of a Property Manager by Owner and/or the selection by Owner of any new or different Property Manager during the Term shall also be subject to the foregoing requirements, except in the case of temporary management by a lender or limited partner of Owner, which shall be immediately submitted to Authority for approval and will not last longer than is reasonably necessary to locate a suitable replacement property manager, but in no event shall such temporary management continue for longer than 60 days.

11.2. Gross Mismanagement. During the Term, and in the event of “Gross Mismanagement” (as defined below) of the Project, the Executive Director and/or the Authority shall have and retain the authority to direct and require any condition(s), acts, or inactions of Gross Mismanagement to cease and/or be corrected immediately, and further, subject to the prior written approval of any senior lender and the limited partner of the limited partnership to be established by Owner to complete the rehabilitation work, to direct and require the immediate removal of the Property Manager and replacement with a new qualified and approved Property Manager, if such condition(s) is/are not ceased and/or corrected after expiration of thirty (30) days from the date of written notice from the Executive Director. If Owner or Property Manager has commenced to cure such Gross Mismanagement condition(s) on or before the 30th day from the date of written notice (with evidence of such submitted to the Executive Director), but has failed to complete such cure by the 30th day (or such longer period if the cure cannot reasonably be accomplished in thirty (30) days as reasonably determined by the non-defaulting party), then Owner and its Property Manager shall have an additional thirty (30) days to complete the cure of Gross Mismanagement condition(s). In no event shall any condition of Gross Mismanagement continue uncured for a period exceeding sixty (60) days from the date of the initial written notice of such condition(s), except that the conditions described in subdivisions 11.3.4 and 11.3.5 below may exist for up to, but no longer than, seventy-five (75) days without triggering the Authority’s right to assess administrative citations against Owner in accordance with Chapter 1.12 of the Stanton Municipal Code (the “Municipal Code”) and/or remove the Property Manager as described in the immediately following sentence as long as Owner is diligently working to cure such conditions of Gross Mismanagement. If such condition(s) do persist beyond such period, then subject to the prior written approval of any senior lender and the limited partner of the limited partnership to be established by Owner to complete the rehabilitation work, the Executive Director shall have the sole and absolute right to immediately and without further notice to Owner (or to Property Manager or any other person/entity) to remove the Property Manager and replace the Property Manager with a new property manager of the Executive Director’s selection 55414.00201\33481228.1
11 at the sole cost and expense of Owner. If Owner takes steps to select a new Property Manager that selection is subject to the requirements set forth above for selection of a Property Manager.

11.2.1. Knowingly or recklessly Negligently leasing a unit (other than two Manager’s Unitsthe Manager Unit) to tenants who exceed or households that do not qualify as a Qualified Household (except if such action was based on fraudulent documents submitted by such tenant in the course of application for occupancy of a unit, which could not be and were not discovered by the Property Manager initially through the exercise of ordinary and customary due diligence);

11.2.2. Knowingly or recklessly Negligently allowing tenants to exceed the prescribed occupancy levels without taking immediate action to stop such overcrowding consistent with applicable laws (except if such action was based on fraudulent acts committed by such tenants, which could not be and were not discovered by the Property Manager through the exercise of ordinary and customary due diligence);

11.2.3. Under-funding required reserve accounts;

11.2.4. Failing to timely maintain the Project in accordance with the Property Management Plan after written notice and expiration of the applicable cure period;

11.2.5. Failing to submit timely and/or complete annual reports to the Authority as required herein;

11.2.6. Fraud or embezzlement of Project funds, including without limitation funds in the reserve accounts;

11.2.7. Failing to timely correct any violation issued by the Orange County Sheriff’s Department (the entity currently providing law enforcement services to the Authority) or other local law enforcement agency(ies) with jurisdiction over the Project, after being provided a written notice of such violation of law;

11.2.8. Failing to timely correct any violation issued by the Orange County Fire Authority or other local public safety agency(ies) with jurisdiction over the Project, after being provided a written notice of such violation of law; and

11.2.9. Failing to timely correct any violation issued by a local health and safety enforcement agency(ies) with jurisdiction over the Project, after being provided a written notice of such violation of law.

11.2.7. Failing to timely correct any violation of law after being provided a written notice of, and opportunity to cure, such violation issued by the Authority, the City of Stanton, the County of Orange, the State of California, or any instrumentality Formatted: Level 1, Outline numbered + Level: 3 +
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numbers
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12 thereof with jurisdiction over the Project, including but not limited to, the Orange County Sheriff’s Department, the Orange County Fire Authority, and any such local health and safety enforcement agency.

11.4. Onsite Services. During the Permanent Supportive Housing Period, Owner shall provide a variety of social services at the Project. Owner shall use its best efforts to create a comprehensive social service program that is targeted to the needs of the residents of the Project which, in addition to including all of the services listed in Owner’s application for Tax Credits, may include the following services: after school programs of an ongoing nature for school age children, and the availability of a bona fide services coordinator or social worker to the tenants.

Owner shall ensure that all personnel providing or coordinating all social services shall be adequately trained and counseled. After commencement of the Permanent Supportive Housing Period, within thirty (30) days after Owner has initially leased fifty percent (50%) of the units, Owner shall provide Authority with a list and summary of the social services Owner will provide at the Project. Owner shall promptly notify the Authority, in writing, whenever Owner anticipates making any changes to changing or supplementing Owner’s social services program, which notification shall set forth, with specificity, the anticipated changes. Grantee Owner shall not, without the prior written consent of the Authority, which consent shall not be unreasonably delayed or withheld, terminate or reduce any social services programs, and in any such request to so terminate or reduce services, Owner shall include an explanation and justification for such 55414.00201\33481228.1
13 termination or reduction. Concurrently with Owner’s submittal of any Report pursuant to Section

7.6, Owner shall also provide to the Authority, an annual an economic mobility report (an “Economic Mobility Report”). The Economic Mobility Report (“Report”). This Report will summarize program activities designed to encourage self-sufficiency and promotion to marketrate housing. The Economic Mobility Report will include information regarding the programs offered, the attendance, and number of residents that successfully transitioned to market-rate housing.

11.5. Insurance.

11.5.1.1. shall be primary insurance and not contributory with any other insurance which Authority may have;

11.5.1.2. shall contain no special limitations on the scope of protection afforded to Authority and its officers, employees, agents, and representatives;

11.5.1.3. shall be “date of occurrence” and not “claims made” insurance;

11.5.1.4. shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability;

11.5.1.5. shall provide that the policy will not be cancelled by the insurer or Grantee Ownewr unless there is a minimum of thirty (30) days prior written notice to Authority;

11.5.1.6. shall be written by a good and solvent insurer admitted in California and registered with the California State Department of Insurance; and

11.5.1.7. shall be endorsed to state that any failure to comply with the reporting provisions of the policies shall not affect coverage provided to Authority. 55414.00201\33481228.1
14 Owner shall also furnish or cause to be furnished to Authority evidence reasonably satisfactory to Authority that Owner’s Contractor carries workers’ compensation insurance as required by law.

11.5.3. Waiver of Certain Claims. The Owner shall cause each insurance carrier providing insurance coverage under this Regulatory Agreement to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to the Authority Parties, if not already in the policy. To the extent that the Owner obtains insurance with a Waiver of Subrogation, the parties release each other, and their respective authorized representatives, from any claims for damage to any person or property to the extent such claims are paid by such insurance policies obtained pursuant to and in satisfaction of the provisions of this Regulatory Agreement.

11.5.4. No Claims Made Coverage. None of the insurance coverage required under this Regulatory Agreement may be written on a claims-made basis.

11.5.5. Fully Paid and Non-Assessable. All insurance obtained and maintained by the Owner pursuant to this Section 11.5 shall be fully paid for and non-assessable. However, such insurance policies may be subject to insurer audits. 55414.00201\33481228.1
15 11.5.6. Authority Option to Obtain Coverage. During the continuance of an Event of Default arising from the failure of the Owner to carry any insurance required by this Regulatory Agreement, the Authority may, at its option, purchase any such required insurance coverage and the Authority shall be entitled to immediate payment from the Owner of any premiums and associated reasonable costs paid by the Authority for such insurance coverage.

11.5.10. Nature of Insurance. The policies of insurance required by this Regulatory Agreement shall be issued by carriers that: (a) are listed in the current “Best’s Key Rating Guide—Property/Casualty—United States & Canada” publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of “A-” and a minimum financial size category of “XI” (exception may be made for the California Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in California. The Owner may provide any insurance under a “blanket” or “umbrella” insurance 55414.00201\33481228.1
16 policy, provided that: (i) such policy or a certificate of such policy shall specify the amount(s) of the total insurance allocated to the Property and the Project, which amount(s) shall equal or exceed the amount(s) required by this Regulatory Agreement; and (ii) such policy otherwise complies with this Regulatory Agreement.

12.1. In the event the Owner fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the Authority may thereafter conduct a public hearing following transmittal of written notice thereof to the Owner ten (10) calendar days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Owner has failed to comply with the provision of this Section 12. If, upon the conclusion of a public hearing, the Authority makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, then the Authority shall have the right to enter the Project (exterior areas of the Project which are subject to public view only) and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity that the Authority may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Authority for the abatement of a Maintenance Deficiency as authorized by this Section 12.1 shall become a lien on the Project, the lien priority of which shall be determined by the date a Notice of Lien is recorded in the Official Records of the County of Orange. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the Authority to the Owner, the Authority shall have the right to enforce the lien in the manner as provided in Section 12.3.

12.2. Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the Project shall be removed by the Owner from any exterior surface of a structure or improvement on the Project by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may 55414.00201\33481228.1
17 be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the Project (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within seventy-two (72) hours following the time of its application, or the Owner’s actual knowledge of its existence, whichever occurs later; then in such event and without notice to the Owner, the Authority shall have the right to enter the Project and remove the graffiti. Notwithstanding any provision of the Regulatory Agreement to the contrary, any sum expended by the Authority for the removal of graffiti from the Project as authorized by this Section 12.2 shall become a lien on the Project, the lien priority of which shall be determined by the date a Notice of Lien is recorded in the Official Records of the County of Orange. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the Authority to the Owner, the Authority shall have the right to enforce its lien in the manner as provided in Section 12.3.

12.4. Capital Replacement Reserve Account. The Owner shall establish an account for the payment of repair and replacement of capital items (“Capital Replacement Reserve Account”) in an initial amount as required by the Owner’s lenders for the Project or the investor limited partner of the Owner. Each year thereafter, the Owner shall deposit into the Capital Reserve Replacement Account additional amounts as required by the Owner’s lenders for the Project or the investor limited partner of the Owner, but not less than Two Hundred Fifty Dollars ($250) per Unit per year.

12.4.1. Capital Repairs and Replacements. Capital repairs and replacements shall include, but not be limited to, the following: wet and dry utilities; roof repair and replacement as necessary; repair and replacement of boilers and the major operating components thereof; stucco repair and replacement; exterior painting; replacement of carpeting and vinyl or other hard surface flooring; replacement of drapes; replacement of dishwashers, garbage disposals and other interior appliances; repair and replacement of heating, ventilating and air conditioning systems, equipment and components; and installation of solar panels. All of the foregoing and other similar expenditures on the Project shall be considered to be qualifying capital repair and 55414.00201\33481228.1
18 replacement expenses. Interior painting and servicing, repair or replacement of interior hardware shall not be considered to be a capital repair, but shall be ordinary operating expenses for the Project. The Owner shall withdraw funds from the Capital Replacement Reserve Account to pay such capital repair and replacement expenses as the Owner may deem necessary for the purposes of meeting the maintenance and replacement obligations described herein.

12.4.2. Insured Depository. The Capital Replacement Reserve Account shall be maintained in a depository insured by an agency of the federal government.

12.4.5. Interest Earned on Funds in the Capital Replacement Reserve Account.

Any interest or other earnings from sums deposited into the Capital Replacement Reserve Account shall be retained in and added to the balance in said account.

12.4.6. Capital Needs Assessment. If requested in writing by the Authority, the Owner shall deliver to the Authority, for the Authority’s reasonable review and approval, a capital needs assessment (“CNA”) no more often than every ten (10) years after the date of the Certificate of Completion for the Project. The CNA shall include an analysis of the Owner’s actual expenditures for capital needs compared to the most recently approved CNA, the Owner’s original operating budget and its then-current operating budget. Each CNA shall include a ten (10) year capital needs assessment or analysis of replacement reserve requirements prepared by a qualified third party in accordance with reasonable and customary standards for similar residential rental projects.

12.4.7. Displacement of Residents and Relocation. The Owner shall make commercially reasonable efforts to conduct capital repairs and replacements and ordinary repair and maintenance (collectively, “Repairs”) in good faith and in a manner that does not result in the displacement of any of the residents of the Unitsunits. If any of the Owner’s actions to 55414.00201\33481228.1
19 conduct Repairs result in displacement of any of the Unitsunits’ residents, the Owner shall notify the Authority in writing, prior to conducting such Repairs, of the identities of the residents to be displaced, the Units units they will be displaced from, and the estimated length of time such residents shall be displaced. If the displacement of the residents triggers relocation obligations, the Owner shall be responsible, at its sole cost and expense, for any and all such relocation obligations and related expenses. The Owner shall comply with all applicable federal, state and local laws, rules and regulations regarding such relocation obligations and related expenses, including any relocation requirements set forth by the Authority, including as set forth in the Affordable Housing Agreement . The Owner shall defend, indemnify and hold harmless the Authority Parties from and against all liability for any relocation obligations and related expenses attributable to any Repairs.

15. Defaults.

15.1.2. any warranty, representation or statement made or furnished to the Authority by the Owner under this Regulatory Agreement that is knowingly or recklessly false or 55414.00201\33481228.1
20 misleading in any material respect either now or at the time made or furnished;

15.1.4. an Event of Default pursuant to the Affordable Housing Agreement.

15.2.3. The Authority will give the limited partner or limited liability company sixty (60) days after the limited partner's or limited liability company’s receipt of such Notice to cure any other default under this Regulatory Agreement;

15.2.5. If the limited partner or limited liability company makes any such payment or otherwise cures such default, the Authority will accept such action as curing such default as if such payment or cure were made by the Owner. 55414.00201\33481228.1
21 If the Owner fails to take corrective action relating to a default within thirty (30) calendar days following the date of Notice of Default (or to complete the cure within the additional time as set forth above for the limited partner of the Owner), an Event of Default shall be deemed to have occurred.

17. Governing Law. This Regulatory Agreement shall be governed by the laws of the State of California and applicable federal laws, without regard to its conflicts of laws principles.

18. Amendment. This Regulatory Agreement may be amended after its recordation only by a written instrument executed by the Owner and the Authority.

19. Attorneys’ Fees. In the event that a party to this Regulatory Agreement brings an action to enforce any condition or covenant, representation or warranty in this Regulatory Agreement or otherwise arising out of this Regulatory Agreement, the prevailing party(ies) in such action shall be entitled to recover from the other party reasonable attorneys’ fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit for the purposes of this Section 19, the words “reasonable attorneys’ fees,” in the case of the Authority, shall include the salaries, costs and overhead of the Authority Attorney as well as any other legal counsel hired by the Authority in such action, as allocated on an hourly basis. 55414.00201\33481228.1
22 20. Severability. If any provision of this Regulatory Agreement shall be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such invalidity or unenforceability of such provision shall not affect the remaining parts of this Regulatory Agreement which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable.

The following are the authorized addresses for the submission of notices to the parties, as of the date of this Regulatory Agreement:

To the Owner: JHC-Katella LLCKatella Housing Partners LP c/o Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
Attention: Vicky Rodriguez, Senior DirectorMichael Massie, Chief Development Officer
Phone: (949) 263-8676
Facsimile: (949) 263-0647
Email:
[email protected]@jamboreehousing.com 55414.00201\33481228.1
23 With copies to: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attention: Patrick D. McCalla, Esq.

FacsimilePhone: (714) 546-9035641-5100
Email: [email protected]
BF Stanton Apartments LLLP
c/o Boston Financial Investment Management, LP 101 Arch Street, 13th Floor
Boston, Massachusetts 02110
Attention: Asset Management – Stanton Apartment homes
Phone: (800) 829-9213
Holland & Knight LLP
10 St. James Avenue
Boston, Massachusetts 02116
Attention: Kristen M. Cassetta, Esq
Phone: (617) 523-2700
To the Authority: Stanton Housing Authority
7800 Katella Avenue
Stanton, CA 90680
Attention: Jarad Hildenbrand, Executive Director
FacsimilePhone: (714) 890-1443890-4277
Email: [email protected]
With copies to: Best Best & Krieger LLP
18101 Von Karman Avenue, Suite 1000
Irvine, CA 92612
Attention: Elizabeth HullHongDao Nguyen, Esq .

FacsimilePhone: (949) 260-0972263-2614
Email: [email protected]@bbklaw.com

23. Force Majeure. Except as otherwise set forth in this Regulatory Agreement, this Regulatory Agreement and the obligations of any of the parties hereunder shall toll if such party is prevented or delayed from performance by reason of any cause beyond the reasonable control of such party including, but not limited to, acts of war, emergency, terrorism, bio-terrorism, governmental preemption in connection with a declared national emergency, disease (including, without limitation, delays arising out of the spread of COVID-19, such as, without limitation, delays in the responsiveness of, or the unavailability of, governmental authorities to grant permit applications or sign-offs, to perform inspections, or to record documents, or the unavailability of required meetings of representatives of governmental agencies necessary to act to grant any approvals) or by reason of any rule, order or regulation of any department or subdivision thereof 55414.00201\33481228.1
24 of any governmental agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency described herein.

24. Recording. The parties hereto shall cause this Regulatory Agreement to be recorded in the official records of the County of Orange.

26. Prohibition Against Transfer.

26.1. Except as expressly provided in the Affordable Housing Agreement or in any other agreement executed by the Authority and the Owner concurrently herewith or thereafter, including any subordination agreement, the Owner shall not, without prior written approval of the Authority, which may not be unreasonably withheld, delayed or conditioned: (i) assign or attempt to assign this Regulatory Agreement or any right herein; or (iisubordinate or attempt to subordinate the Affordable Housing Agreement or this Regulatory Agreement; or (iii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment of the whole or any part of the Property or the improvements thereon, with the exception of leases of the residential units as permitted by this Regulatory Agreement, or permit to be placed on any of the Property any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien.

27. Authority Approvals and Actions. The Executive Director shall have the authority to make approvals, issue interpretations, resolve disputes with Owner, waive provisions, grant extensions of time, approve amendments to this Regulatory Agreement and execute documents on behalf of the Authority (to the extent not provided otherwise provided in this Regulatory Agreement), including, without limitation, any documents necessary to implement any changes in to the number or level of affordability of the units so long as such actions do not reduce the length of affordability of the units or add to the costs incurred or to be incurred by the Authority as specified herein. The Executive Director reserves the right, in his or her sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the City Council if the Executive Director determines or believes that such action could increase the risk, liability or costs to the Authority, or reduce the length of affordability of any number of units in the Project.

REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
AUTHORITY:

STANTON HOUSING AUTHORITY,
a public body, corporate and politic
By: Date:

Executive Director
ATTEST:

City Clerk
APPROVED AS TO FORM:

City Attorney
55414.00201\33481228.1
27 OWNER SIGNATURE PAGE
TO

REGULATORY AGREEMENT
(Stanton Inn & Suites Affordable Housing Project)
OWNER:

KATELLA HOUSING PARTNERS LP,
a California limited partnership
JHC-KATELLA By: JHC-Katella MGP, LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit non-profit public benefit corporation, its Managing Member
By: _____________________________
Laura Archuleta, President and CEO
Name: Michael Massie
Title: Chief Development Officer
55414.00201\33481228.1
ATTACHMENT NO. 1
1 ATTACHMENT NO. 1
TO

That portion of Section 23, Township 4 South, Range 11 West, in the City of Station, County of Orange, State of California, in the Ranchos Los Coyotes and Los Alamitos, as shown in Book 51,

Page 12 ends

APN: 079-762-61 and 079-762-26
(End of Legal Description)
55414.00201\33481228.1
ATTACHMENT NO. 2
- 1 -
ATTACHMENT NO. 2
TO

1. 2. 3. 4. 5.

Names of
Members of
Household
Relationship
to Head of
Household Age
Social
Security
Number
Place of
Employment

6. Head of Household (check one):

Mother: ____
Father: ____
Other: _____________ (specify relationship – i.e. legal guardian, sister, brother, etc.) 55414.00201\33481228.1
ATTACHMENT NO. 2
- 2 -
Income Computation

14. Housing Issuer Statistical Information (Optional--will be used for reporting purposes only):

2. The amount entered in l(c):
_____ Qualifies the applicant(s) as a Qualified Household. _____ Does not qualify the applicant(s) as Qualified Household.

3. Apartment unit assigned:

Bedroom Size: ______ Rent: $________

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Stanton
7800 Katella Avenue
Stanton, CA 90680
Attn: City Manager
______________________________________________________________________________ SPACE ABOVE FOR RECORDER’S USE ONLY

EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383

AMENDED AND RESTATED REGULATORY AGREEMENT
(Tahiti Motel Affordable Housing Project)
by and between

STANTON HOUSING AUTHORITY,
a public body, corporate and politic,
and
BEACH2 HOUSING PARTNERS LP,
a California limited partnership
[Dated as of April ___, 2022 for reference purposes only] 55414.00201\34948548.1
1 AMENDED AND RESTATED REGULATORY AGREEMENT
(Tahiti Motel Affordable Housing Project)
This AMENDED AND RESTATED REGULATORY AGREEMENT (Tahiti Motel Affordable Housing Project) (“Regulatory Agreement”) is made and entered into as of April ___, 2022, by and between STANTON HOUSING AUTHORITY, a public body, corporate and politic,(“Authority”) and BEACH2 HOUSING PARTNERS LP, a California limited partnership (“Owner”).

RECITALS
A. The Authority and JHC-Beach2 LLC, a California limited liability company (the ”Original Owner”) entered into that certain Affordable Housing Grant and Regulatory Agreement (Tahiti Motel Affordable Housing Project) dated as of November 17, 2020 (the “Affordable Housing Agreement”), which provides that the Authority will grant certain funds to the Owner subject to the terms and conditions of the Affordable Housing Agreement. Under the Affordable Housing Agreement, the Authority agreed to provide financial assistance to the Owner for use for initial rehabilitation and relocation expenses following Owner’s acquisition of a 60-unit motel (the “Motel”) located at 11850 Beach Boulevard, Stanton, CA (the “Property”) and the initial use of the Motel by the Owner for Interim Housing, followed by Owner’s rehabilitation of the Motel and use thereafter as a 60-unit multifamily Permanent Supportive Housing residential development (the “Project”).

B. On or about November 17, 2020, the Authority and the Original Owner executed that certain Regulatory Agreement, which was recorded against the Property on December 4, 2020, as Instrument No. 2020000713140 (the “Original Regulatory Agreement”).

D. The Authority and Owner now wish to enter into this Regulatory Agreement for purposes of amending and restating the Original Regulatory Agreement.

E. The Authority and the Owner desire that, following the initial Interim Housing Period (which period commenced on December 4, 2020, the date of recordation of the Original Regulatory Agreement, and shall not exceed a total of five (5) years), the Project be operated as a multifamily residential community on the Property with the residential units made available to those individuals and households deemed Very Low Income by HCD (i.e., 30% to 50% of AMI) at an Affordable Rent as more specifically defined herein. This Regulatory Agreement establishes terms and conditions which govern the operation of the Property during both the Interim Housing and Permanent Supportive Housing Periods. The terms of the Affordable Housing Agreement require that certain covenants and affordability restrictions remain in full force and effect on the Project for a term that commenced on December 4, 2020 and continuing for (i) at most five (5) years as Interim Housing, then (ii) for fifty-five (55) years following the recordation of a Certificate of Completion vis-à-vis readiness of the Motel for operation as 55414.00201\34948548.1
2 Permanent Supportive Housing (“Term”). More specifically, the Project will serve as Interim Housing for the Target Population during the Interim Housing Period of the Term. Thereafter, the Project will be converted to Permanent Supportive Housing for the fifty-five (55) year Permanent Supportive Housing Period of the Term, which commences after recordation of a Certificate of Completion.

F. Pursuant to this Regulatory Agreement, during the Permanent Supportive Housing Period of the Term, all of the units in the housing complex on the Site shall be rented to incomequalified tenants at Affordable Rents pursuant to this Regulatory Agreement, as that term is defined herein and in the Affordable Housing Agreement.