HomeMy WebLinkAboutRegulatory Agreement and Declaration of Covenants and Restrictions Recorded at the Request of ,iULIE RODEWALD asK
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RECORDED AT THE REQUEST OF �o c x : 2013018875 raies: 2 Peees: 20
CND WA oyo G aO�RDED RETURN TO: IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII Others 0.00
300 East Branch Street PAID 50.00
Arroyo Grande, CA 93420
Attn: City Clerk
(SPACE ABOVE TFIIS LMC POR RL'CORDER'S USE)
This Agreement is recorded at the request and for the benefit
of the Ciry of Arroyo Grende and is exempt from the payment
of a recording fee pursuant to Govemment Code Section �
27383.
REGULATORY AGREEMENT AND DECLARATIOIV
OF COVENANTS AND RESTRICTIONS
This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement') is entered into this 28`� day of March, 2013, by and between
the CITY OF ARROYO GRANDE, a Califomia municipal corporation ("Ciry"), and
COURTLAND STREET APARTMENTS, L.P., a California limited partnership ("Owner").
RECITALS
A. Owner is the owner in fee of that certain real propeRy located in the Ciry of
Arroyo Grande, County of San Luis Obispo, State of California, legally described in Exhibit "A"
attached hereto and incorporated herein by reference ("Property").
B. Owner and the former Arroyo Grande Redevelopment Agency ("Agency")
entered into that certain Affordable Housing and Loan Agreement dated March 8, 201 I (`Loan
AgreemenP'), conceming the development of a rental housing project on the Property
(`'ProjecY'). The Loan Agreement is a public record available for inspection at City Hall, 241
East Branch Street, Arroyo Grande, CA 9342 L All of the terms, conditions, provisions and
covenants set forth in the Loan Agreement are incorporated in this Agreement by reference as
though written out at length herein and the Loan Agreement and this Agreement shall be deemed
to constimte a single instrument or document. Capitalized terms used herein and not otherwise
defined shall have the same meaning as set forth in the Loan Agreement.
C. Pursuant to the Loan Agreement, the Agency agreed to provide to Owner a loan
in the amount not to exceed the sum of Nine Hundred Thiny Thousand Dollars ($930,000.00)
(`'Loan") for the development of che Project.
D. Pursuant to Assembly Bill 26 from the 201 I-12 First Extraordinary Session of the
California Legislature, which was signed by the Govemor on June 28, 2011 (`ABxI 26"), all
redevelopment agency activities, except continued perfortnance of '`enforceable obligations,"
were immediately suspended. A lawsuit was filed, challenging the constitutionality of ABxI 26
and companion bill ABxI 27 (which would have allowed redevelopment agencies to remain in
existence and continue redevelopment, if the legislative bodies that established the agencies
executed In counterpart
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elec[ed to participate in a '`voluntary altema[ive redevelopment program" and make certain
remittance payments). The Califomia Supreme Court upheld the constitutionality of ABx I 26,
revising the effective dates of certain provisions, and struck down as unconstitutional ABx I 27.
(Calijornra Redevelopmen�Assn. v. Malosantos (201 I) 53 Cal.4th 231 (the "CRA Case"). ABxI
26 is chapter 5, Statutes 201 I, First Extraordinary Session, which added PaR 1.8 (suspension
provisions) and Part 1.85 (dissolution provisions) ("Part 1.85") of Division 24 of the Health and
Safety Code. Under the CRA Case, all redevelopment agencies dissolved February I, 2012. On
June 27, 2012, the California Legislature passed, and the Govemor signed, Assembly Bill 1484
(`'AB 1484"), which, among other [hings, made certain revisions to certain of the stamtes added
by ABx I 26, and added Chapter 9 to Pan I.85.
E. Pursuant to Health and Safety Code section 34176(a), added by Part 1.85 and
amended by AB 1484, the City Council of the City adopted its Resolution No. 4421 on
January 10, 2012, electing to retain the housing assets and functions previously performed by the
Agency. Pursuant to said resolution, all housing assets of the Agency were transferred to City on
February I. 2012. Pursuant to subdivision (e)(2) of Health and Safety Code section 34176,
which subdivision was added by AB 1484, the Loan proceeds are one of the "housing assets" of
the Agency that was so transferred ro City.
F. In consideration of City's provision of financial assistance to Owner for the
Project, the units to be developed on the Property will be restricted as affordable rental units for
occupancy by low income and very low income households at an affordable rent.
AGREEMENT
Based upon the foregoing Recitals and for good and valuable consideration, the receipt
and sufficiency of which is acknowledged by both parties, City and Owner agree as follows:
1. Defnitions. The following [erms as used in this Agreement shall have the
meanings given below unless expressly provided to the contrary:
"Affordable RenP' shall mean annual rent that does not exceed [he maximum percentage
of income that can be devoted to rent (including a reasonable utility allowance) by Eligible
Tenants, as follows:
(a) The Affordable Rent for the Units designated to be occupied by Low
Income Tenants is 30% times 60% of the Median Income adjusted for family size
appropriate to the Unit.
(b) The Affordable Rent for the Units designated to be occupied by Very Low
Income Tenants is 30% times 50% of the Median Income adjusted for family size
appropriate ro the Unit.
As used herein, "adjusted for family size appropriate to the UniP' shall mean a household
of 2 persons in the case of a one-bedroom Unit, a household of 3 persons in the case of a two-
bedroom Unit, and a household of 4 person in the case of a three-bedroom Unit.
`Ciry" shall mean the Ciry of Arroyo Grande, a Califomia municipal corporation.
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"Eligible TenanC' shall mean a tenant who is either a Low Income Tenant or a Very Low
Income Tenant, as applicable with respect to the income level required for the Unit.
°Loan AgreemenY' shall have the meaning ascribed in Recital B of this Agreement.
"Low Income Tenant" shall mean persons and families whose household income does not
exceed the qualifying limits for lower income families as established and amended from time to
time pursuant to Section 8 of the United States Housing Act of 1937, as such limits are published
annually by the Califomia Department of Housing and Communiry Development, pursuant to
Section 50079.5 of the California Health and Safety Code.
"Median Income" shall mean the median household income for the County of San Luis
Obispo, as established by the United States Department of Housing and Urban Development, and
as published periodically by the State of California DepaRment of Housing and Community
Development.
`Operating Expenses" shall mean actual, reasonable costs, fees and expenses directly
incurred and attributable to the operation and maintenance of the Property, including, without
limitation, cleaning, repairs, alterations, landscaping, property taxes, and insurance premiums.
'`ProjecP' shall have the meaning ascribed in Recital B of this Agreement.
"Property" shall have the meanin� ascribed in Recital A of this Agreement.
"UniP' shall mean each of the rental units to be developed on the Property.
'`Uni[ Mix" shall mean the household income levels permitted for each of the 35
restricted Units, as follows:
Type Total Units Very Low Income Tenants Low Income Tenants
I Bedroom 4 I 3
2 Bedroom 17 5 12
2 Bedroom (Mgr
unit) I 0 0
3 Bedroom 14 3 I I
36 9 26
"Very Low Income Tenant' shall mean persons and families whose household income
does not exceed the qualifying limits for very low income families as established and amended
from time to time pursuant to Section S of the United States Housing Act of 1937, as such limits
are published annually by the Califomia DepaRment of Housing and Community Development,
pursuant to Section 50105 of the California Health and Safety Code.
2. Development of the Project. Owner shall commence and complete construction
of the Project on the PropeRy within the times and subject to the terms and conditions set forth in
the Loan Agreement.
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3. Duration of Covenants. Subject to extension as set forth below, the covenants
set forth in this Agreement shall remain in effect from the date set forth in the preamble to this
Agreement until the date that is fifty-five (55) years after the recordation of the Release of
Construction Covenants (Attachment No. 6 to Loan Agreement).
4. Use; Affordability Covenants. Owner hereby covenants and agrees that the
Property shall be managed and operated in accordance with the provisions set forth in this
Section 4.
4.1 General. Owner shall utilize the facilities on the Property in connection
with the affordable rental housing project and for no other purposes. The Units shall be rented to
and occupied only by Eligible Tenants at Affordable Rent. Not by way of limitation of the
foregoing, Owner shall not permit the Residential Units ro be utilized on a transient basis, or as a
hotel, motel, dortnitory, fratemity house, sorority house, rooming house, nursing home, hospital,
sanitarium, trailer court or park, day care facilities, or non-residential uses.
4.2. Occupancy by Eligible Tenants. Each Unit shall be used as the principal
residence of the Unit's Eligible Tenant and for no other purpose. An Eligible Tenant shall not
lease or sublease its Unit or its right of occupancy. Owner shall institute a program to ensure
that the Units remain occupied by Eligible Tenants.
4.3 Determination of Eligible Tenant Status. Immediately prior to an
Eligible Tenant's occupancy of a Unit, Owner shall obtain and maintain on file an Income
Computation and Certification Form in a fortn approved by City from each such Eligible Tenant
dated immediately prior to the date of initial occupancy of the Unit by such Eligible Tenant. In
addition, Owner shall provide such fuRher infortnation as may be required by City for purposes
of verifying a tenant's status as an Eligible Tenant. Owner shall use i[s best efforts to verify that
the income provided by an applicant is accurate by taking the following steps as a part of the
verification process: (i) obtain the income tax filed by the applicant for the previous year, (ii)
obtain three (3) pay stubs for the most recent pay periods; (iii) obtain a written verification of
income and employment from the applicant's curcent employer; (iv) obtain an income
verification fortn from the Social Security Administration, Califomia Depar[ment of Social
Services, and/or California Employment Development Department if the applicant receives
assistance from any of said agencies; (v) if an applicant is unemployed or did not file a tax return
for the previous calendar year, obtain other evidence and/or verification of such applicant's
income as is satisfactory to Ciry; and (vi) such other information as may be requested by City.
Owner shall maintain each Income Computation and Certification Fortn obtained pursuant to this
Section and Section 43 for a minimum period of five (5) years. A copy of each such Income
Computa[ion and CeRification shall be provided to City upon request.
4.4 Recertification. Within forty-five (45) days prior to the first anniversary
date of the occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter,
Owner shall recertify the income and other information demonstrating the Eligible Tenant status
of such Eligible Tenant by obtaining a completed Income Computation and Certification Fortn
based upon the current income and o[her information demonstrating the Eligible Tenant status of
each occupant of the Unit. Owner shall provide City with a copy of each such recertification
upon request. [n the event the recertification demonstrates that a household's income exceeds
the income at which such household originally qualified, to the extent permitted by applicable
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law, including but not limited to applicable tax credit regulations. Owner shall not renew the
lease, and said household shall be required to vacate the Unit within one hundred eighty (180)
days after the recertification.
4.5 Leasing Units. The Units shall be available for rental on a continuous
basis and Owner shall not give preference to any particular class or group in renting Units except
to the extent Units are required to be rented to Eligible Tenants.
4.6 Rental Agreement. The form of the rental agreement that will be used
for the Units shall be approved by Ciry prior to the time the Units are first rented. Once
approved, no ma[erial changes shall be made to the form of the rental agreement without City's
prior written reasonable approval. The term of the lease shall not exceed one (I) year. The
rental agreement shall obligate the Eligible Tenants to comply with the provisions set forth in
Section 4 of this Agreement and an Eligible Tenant who violates such requirements shall be in
default under the rental agreement. Not by way of the foregoing, each rental agreement with an
Eligible Tenant shall include a provision to the effect that Owner has relied on the income and
other information provided by the tenant on the Income Computation and Certification Fortn and
all other supporting infortnation supplied by the tenant in detertnining qualification for
occupancy of the applicable Unit, and that any material misstatement in such certification
(whether or not intentional) will be cause for immediate termination of such rental agreement. In
addition, each rental agreement shall contain a provision that failure to cooperate with the annual
recertification process may disqualify the Eligible Tenant as such and will be will be cause for
immediate termination of such rental agreement.
5. Records; Property Inspections. Owner shall maintain complete and accurate
records pertaining ro the Units, and shall permit any duly authorized representative of Ciry to
inspect the books and records of Owner pertaining to the Units upon at least 24 hours advance
notice. City shall have the right to inspect the Property and the Units for purposes of assuring
compliance with this Agreement during normal business hours on twenry-four(24) hours written
notice.
6. Repair and Maintenance of Property. Owner shall maintain or cause to be
maintained all improvements that may exist on the Property from time to time good condition
and repair, reasonable wear and tear excepted (and, as to landscaping, in a healthy condition),
and in compliance with all applicable laws, rules, ordinances, orders, and regulations of all
federal, state, county, municipal, and other govemmental agencies and bodies having
jurisdiction. Owner shall make all repairs and replacements necessary to keep the improvements
in first class condition and repair and otherwise maintained in accordance with applicable
requirements of City or any other governmental City with jurisdiction. Owner shall promptly
eliminate all graffiti and any accumulation of debris or waste material, keep all trash containers
out of public view during non-trash days, and replace dead and diseased plants and landscaping
with comparable approved materials. In the event that Owner breaches any of the covenants
contained in this Section 6, and such default continues for a period of five (5) days after written
notice to Owner from City (with regard to maintenance and removal of trash containers), ten (10)
business days after written notice to Owner from City (with respect to landscaping, graffiti,
debris, waste material, or general mainrenance) or thirty (30) days (or such reasonable time
thereafter if repairs are commenced within 30 days) after written notice to Owner from City
(with respect to building improvements), then City, in addition to whatever other remedy it may
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have at law or in equity, shall have the right to enter upon the Property and perform or cause to
be perfortned all such acts and work reasonably necessary to cure the default. Pursuant to such
right of entry, City shall be permitted (but not required) with due notice and without disturbin�
the tenants to enter upon the PropeRy and perfortn all acts and work necessary to protect,
maintain, and preserve the improvements and landscaped areas on the Property, and to attach a
lien on the Property, or to assess the PropeRy, in the amount of the expenditures arising from
such acts and work of protection, maintenance, and preservation by City and/or costs of such
cure, which amount shall be prompdy paid by Owner to City upon demand.
7. Insurance Obligations. Owner shall procure and maintain, at its sole cost and
expense, in a form and content reasonably satisfactory to City, during the entire term of this
Agreement, duplicate originals or appropriate endorsements of commercial general liability
insurance policies in the amount of a[ least Two Million Dollars ($2,000,000) combined single
limits, naming City, City and their respective officers, officials, members, employees, agents,
representatives, and volunteers as additional insureds or co-insureds, subject to such increases in
amount as City may reasonably require from time to time but not more frequendy than every 36
months. Owner shall also furnish or cause to be fumished to City evidence of property
insurance, including 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 City. Such policy shall name City as a loss payee. The foregoing insurance
policies:
(a) shall be primary insurance and not contributory with any other insurance
which City or City may have;
(b) shall contain no special limitations on the scope of protection afforded to
City, City and their respective officers, ofticials, members, employees, agents,
representatives, and volunteers;
(c) shall be"date of occurrence" and not"claims made" insurance;
(d) 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;
(e) shall provide that the policy will not be cancelled by the insurer or Owner
unless there is a minimum of thirty(30) days prior written notice to City;
(Q shall be written by a good and solvent insurer admitted in Califomia and
registered with the California State Department of Insurance; and
(g) shall be endorsed to stare that any failure to comply with the reporting
provisions of the policies shall not affect coverage provided to City or City.
In addition to any other remedy which City may have hereunder for Owner's failure to
procure, maintain, and/or pay for the insurance required herein, City may (but without any
obligation to do so) at any time or from time to time, after thirty (30) days written notice to
Owner, procure such insurance and pay the premiums therefor, in which event Owner shall
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immediately repay City all sums so paid by City together with interest thereon at the rate of ten
percent(10%) per annum or the maximum legal rate, whichever is less.
S. Repair of Damage. If any improvements on the Property shall be totally or
partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty, Owner
shall take all steps necessary to begin reconstruction and shall prompdy and diligendy
commence the repair or replacement of the improvemen[s to substantially the same condition as
the improvements are required to be maintained pursuant to this Agreement, and Owner shall
complete the same as soon as possible thereafter so that the Project can continue to be operated
and occupied as an affordable senior citizen housing project in accordance with this Agreement.
In no event shall the repair, replacement, or restoration period exceed twelve (12) months from
the date of the destruction unless City, in its sole and absolute discretion, approves a longer
period of time. During any period of repair, Owner shall continue, or cause the continuation of,
the operation of the housing complex on the Property to the extent reasonably practicable from
the standpoint of prudent business management.
9. Indemnity. Owner shall indemnify, defend, and hold harmless City and its
officers, officials, members, employees, agents, and representatives from and against any loss,
damage, costs, expenses, liability, claim, orjudgment relating in any manner to the development
or use of[he Property, the operation of the rental project thereon, or Owner's performance under
this Agreement, except to the extent caused by the active negligence or willful misconduct of
Ciry.
10. Management of Rental Project.
10.1 Property Manager. Owner shall manage or cause the rental project, and
all appurtenances thereto, to be managed in accordance with this Agreement and in a prudent
and business-like manner, consistent with good property management standards for other
comparable high quality, well-managed affordable rental housing projects in the City. Owner
may contract with apartment complex in accordance with the terms of this Section 10.1.
(`Property Manager"); provided, however, the selection and hiring of the Property Manager
(and each successor or assignee) is and shall be subject to the prior written approval of City in
its reasonable discretion. 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 apartment complex and the references and
credit rewrd 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 City for review and approval. A complete and true copy of the results of
such background evaluation shall be provided to City. Approval of a Property Manager by City
shall not be unreasonably delayed but shall be in its sole reasonable discretion, and City shall
use good faith efforts to respond as promptly as practicable in order to facilitate effective and
ongoing property management of the apartment complex by one qualified Property Manager.
The replacement of the Property Manager by Owner and/or the selection by Owner of any new
or different Property Manager shall also be subject to the foregoing requirements.
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10.2 On-Site Manager. The Property Manager shall reside full-time in one of
the Units on [he Property and the Unit shall be the Property Manager's only residence.
10.3 Property Management Plan. Prior to the completion of the Project,
Owner shall prepare and submit to City for review and approval, which approval shall not be
unreasonably withheld, a management plan which shall include a detailed plan and strategy for
long term marketing, operation, maintenance, repair and security of the apartment complex, and
the method of selection of tenants, rules and regulations for tenants, and other rental policies for
the apartment complex ("Property Management Plan"). The ongoing management and operation
of the apanment complex shall be in compliance with the approved Property Management Plan.
Owner and its Property Manager may from time to time submit to City amendments to the
Property Management Plan, the implementation of which shall be subject to the prior written
approval of City, which approval shall not be unreasonably withheld.
10.4 Gross MismanagemenL In the event of"Gross MismanagemenP' (as that
tertn is defined below) of the apartment complex, City 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 to direct and require the immediate removal of the
Propeny Manager. For purposes of this Agreement, the term "Gross Mismanagement' shall
mean management of the apartment complex in a manner which violates the terms and/or
intention of this Agreement to operate a high quality affordable housing complex, and shall
include, but is not limited to, any one or more of the following:
(a) knowingly leasing to tenants who exceed the prescribed income levels;
(b) knowingly allowing the tenants to exceed the prescribed occupancy levels
without taking immediate action to stop such overcrowding;
(c) underfunding required reserve accounts in amounts less than that required
by City or another lender for the Project;
(d) failing to timely maintain the apartment complex in accordance with the
Property Management Plan and this Agreement;
(e) fraud or embezzlement of apartment complex funds, including without
limitation funds in the reserve accounts;
(� failing to fully cooperate with the Arroyo Grande Police DepaRment or
other local law enforcement City(ies) with jurisdiction over the apartment complex, in
maintaining a crime-free environment within the apartment complex;
(g) failing to fully cooperate with City, including its code enforcement
division, or other local health and safety enforcement City(ies) with jurisdiction over the
apartment complex, in maintaining a decent, safe, and sanitary environment within the
apanment complex; and
(h) spending funds from the Capital Replacement Reserve account for items
that are not defined eligible as costs, including eligible capital and/or replacement costs,
under the standards imposed by generally accepted accounting principles ("GAAP")
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(and/or, as applicable, generally accepted auditing principles.)
Notwithstanding the requirements oF the Property Manager to wrrect any condition of
Gross Mismanagement as described above, Owner is obligated and shall use its best efforts to
correc[ 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 provisions
of[he foregoing requirements and requirements of this Agreement within any contract between
Owner and its Property Manager for the apartment complex.
11. Capital Reserve Requirements. Commencing upon the date that all Units in the
Project are occupied, Owner shall annually set aside an amount of not less than Two Hundred
Fifty Dollars ($250.00) per Unit (or such increased amount as reasonably required by City from
time to time) into a separa[e interest-bearing trust account ("Capital Replacement Reserve").
Funds in the Capital Replacement Reserve shall be used only for capital repairs, improvements
and replacements to the apartment complex, including fixtures and equipment, which are
normally capitalized under GAAP. The non-availability of funds in the Capital Replacement
Reserve does not in any manner relieve or lessen Owner's obligation to undertake any and all
necessary capital repairs, improvemen[s, or replacements and to continue to maintain [he
apartment complex in the manner prescribed herein. Not less than once per year, Owner, at its
expense, shall submit to City an accounting for the Capital Replacemen[ Reserve: Capital
improvements and repairs to, and replacements of the apartment complex shall include only
those items with a long useful life, including without limitation the following: carpet and drapery
replacement appliance replacement; exterior painting, including exterior trim; hot water heater
replacement; plumbing fixtures replacement, including tubs and showers, toilets, lavatories,
sinks, faucets; air conditioning and heating replacement asphalt repair and replacement, and seal
coating; roofing repair and replacement; landscape tree replacement; irtigation pipe and controls
replacement; sewer line replacemenr water line replacemenr, gas line replacement; and lighting
fixture replacement.
12. Operating Reserve. Owner shall establish an interest bearing account to be
known as the "Operating Reserve Account." Each month Owner shall deposit into the Operating
Reserve Account an amount equal to fifreen percent (IS%) of the monthly Affordable Rent
received for each of the Units, commencing upon the date that all Units in the Project are
occupied and continuing until the amount in the Operating Reserve Account is sufficient to pay
both six (6) months of Operating Expenses and six (6) months of debt service for the Property
(`Target Balance"). Funds in the Operating Reserve Account shall be invested subject to the
prior written approval of City, and any eamings shall become and remain a part of the Operating
Reserve Account. Owner may draw upon the funds in the Operating Reserve Account only
when the amount of Affordable Rent received by Owner is insufficient to pay Operating
Expenses. Owner shall not draw funds from the Operating Reserve Account without the prior
written approval of City. City reserves the right to periodically review and increase the Target
Balance amount as necessary to ensure sufficient funds are available ro pay Operating Expenses.
Nothing in this Section 12 shall modify or be deemed to modify any payment obligation of
Owner pursuant to any Loan documents entered into by and between Owner and Ciry.
13. Taxes and Assessments. Owner shall pay, prior to delinquency, all property
taxes and assessments in connection with the Property, and shall pay as they become due any
financing secured by the Property, and any liens.
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14. Compliance with Laws. Owner shall comply with all applicable laws,
regulations, and rules of any govemmental agencies having jurisdiction with regard to any
activities conducted on the Property, including the operation of the Project and the lease of the
Units.
15. Non-Discrimination Covenants. In addition to any other nondiscrimination
provisions applicable ro the Property under federal, state or local law, Owner covenants by and
for itself, its successors and assigns, and all persons claiming under or through them that there
shall be no discrimination against, or segregation of, any person, or group of persons, on account
of any basis listed in subdivision (a) or (d) of Section 12955 of the Govemment Code, as those
bases are defined in Sections 12926, 12926.I,subdivision (m) and paragraph (I) of subdivision
(p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, or rental or
in the use, occupancy, or enjoyment of the Property, nor shall Owner itself, or any person
claiming under or through it, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use, or occupancy of tenants,
lessees, subtenants, sublessees, or vendees of the Property or any portion thereoE The foregoing
covenants shall run with the land and shall remain in effect in perpetuity.
All deeds, leases or contracts for the Property shall contain or be subject to substantially
the following nondiscrimination or nonsegrega[ion clauses:
a. In deeds: "The grantee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person
or group of persons on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (l) of subdivision (p) of Section 12955, and Section
12955.2 of the Govemment Code, in the sale, lease, sublease, transfer, use, occupancy,
tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person
claiming under or through him or her, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein
conveyed. The foregoing covenan[s shall run with the land."
b. In leases: "The lessee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions: There shall be no discrimination against or segregation of any person or
group of persons, on account of any basis listed in subdivision (a) or(d) of Section 12955
of the Govemment Code, as those bases are de£ned in Sections 12926, 12926.1,
subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section
12955.2 of the Govemment Code, in the leasing, subleasing, transferring, use, occupancy,
tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself,
or any person claiming under or through him or her, establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the
premises herein leased."
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c. In con[racts: "There shall be no discrimination against or segregation of
any person or group of persons, on account of any basis listed in subdivision (a) or(d) of
Section 12955 of the Govemment Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (l) of subdivision (p) of Sec[ion 12955, and
Section 12955.2 of the Government Code, in the sale, lease, transfer, use, occupancy,
tenure, or enjoyment of the land, nor shall the contracting party itself, or any person
claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
occupancy of tenants, lessees, subtenants, sublessees, or vendees of land. The foregoing
provisions shall be binding upon and shall obligate the contracting pany or parties and
any subcontracting party or parties, or other transferees under the contract."
16. Relocation. Owner shall be responsible for providing any relocation benefits or
assistance and paying relocation costs to any tenants or occupants who may be displaced from
the Property if such benefits or assistance are required to be provided under any applicable
federal, state, or local laws, rules or regulations. Owner shall indemnify, defend, and hold
harmless City and City from and against any and all claims, liabilities, damages or losses arising
out of any claims for relocations benefits or assistance that may be asserted by any tenants or
occupants of the Property.
17. Miscellaneous.
17.1 Entire Agreement, Waivers. This Agreement contains the entire
agreement between the parties relating to the subject matter hereof, and supersedes all
negotiations and previous agreements between the parties with respect to all or part of the subject
matter hereof, with the exception of the Loan Agreement and the agreements attached to the
Loan Agreement. All waivers of the provisions of this Agreement must be in writing and signed
by the appropriate authorities of the party to be charged. A waiver of the breach of the
covenants, conditions or obligations under this Agreement by either party shall not be construed
as a waiver of any succeeding breach of the same or other covenants, conditions or obligations of
this Agreement.
17.2 Attorneys' Fees and Costs. If either party to this Agreement commences
an action against the other paRy to this Agreement arising out of or in connection with this
Agreement, the prevailing party shall be entitled ro recover reasonable attomeys' fees, expert
witness fees, costs of investigation, and costs of suit from the losing party.
17.3 Assignment and Transfer. The qualifications and identity of Owner are
of particular concern to City. It is because of [hose qualifications and identity that City has
provided financial assistance to Owner and entered into this Agreement with Owner.
Accordingly, except for Pertnitted Transfers (as defined in the Loan Agreement), Owner shall
not, whether voluntarily, imoluntarily, or by operation of law, undergo any significant change in
ownership or assign all or any part of this Agreement or any rights hereunder or in the Property
or in the Project except as approved in writing by City. In considering whether it will grant
approval to any assignment by Owner of its interest in the Property and this Agreement, City
shall consider factors such as the financial strength and capability of the proposed transferee to
perform Owner's obli�ations hereunder and the proposed assignee's experience and expertise in
the planning, financing, and operation of similar projects. Any assignment of this Agreement
sezoa�un�000�
SI85780.]u0Jl18/li '� �'
must include the conwrrent transfer of fee title [o the Property to the pertnitted assignee. City
shall have the right to disapprove an assignment and transfer if there is a default of Owner of this
Agreement or any of the loan documents or any event has occurred that would constitute a
defaul[with the giving of notice or the passage of time.
17.4 Interpretation; Governing Law. This Agreement shall be construed
according to its fair meaning and as if prepared by both of the parties hereto. This Agreement
shall be interpreted in accordance with the intemal laws of the State of Califomia
17.5 Severability. If any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect,
then such provision or provisions shall be deemed severable from the remaining provisions
contained in [his Agreement, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision(s) had never been contained herein.
17.6 Notices. All notices required to be delivered under this Agreement to City
or Owner must be in writing and shall be addressed to the respective parties at such address set
forth below or to such other address and to such other persons as the parties may hereafter
designate by written notice to the other parties hereto:
If to City: City of Arroyo Grande
300 East Branch Street
Arroyo Grande, CA 93420
Attention: City Manager
With a copy to: Rutan &Tucker, LLP
61 I Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Attention: Dan Slater, Esq.
If to Owner. Courtland Street Apartments, L.P.
c/o People's Self-Help Housing Corporation
3533 Empleo Street
San Luis Obispo, CA 93401
Attention: Execu[ive Director
With a copy to: Gubb& Barshay LLP
505 14th Street, Suite 1050
Oakland, CA 94612
Attention: Natalie Gubb, Esq
17.7 Modification of Agreement. City and its successors and assigns, and
Owner and the successors and assigns of Owner in and to the fee tide to the Property, shall have
the right to consent and agree to changes in, or to eliminate in whole or in part, any of the
covenan[s, conditions, or restrictions contained in this Agreement without the consent of any
tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust, or
any other person or entity having any interest less than a fee in the Property. Any amendment or
modification to this Agreement must be in writing and signed by City and Owner, or their
successors and assigns.
887i029J76-0003
!183780.3 u0328/I7 "�z-
17.8 Covenants Run with the Land. This Agreement is designed to create
equitable servitudes and covenants running with the Property, in accordance with the provisions
of Civil Code Section 1468. The covenants, conditions, restrictions, reservations, equitable
servitudes, liens and charges set forth herein shall run with the Property and shall be binding
upon all persons having any right, tide or interest in the Property, or any part thereof, their heirs,
successive owners and assigns; shall inure to the benefit of the City and its successors and
assigns, shall be binding upon Owner and its successors and assigns and successors in interest
and may be enforced by City and its successors and assigns. Owner hereby declares its
understanding and intent that the burden of the covenants set foRh herein touch and concem the
land and that the Owner's interest in the Property is rendered less valuable thereby. Owner
hereby funhers declare its understanding and intent that the benefit of such covenants touch and
concem the land by enhancing and increasing the enjoyment and use of the Property by Eligible
Tenants, and by fuRhering the public purposes for which City was formed.
In amplification and not in restriction of the provisions set forth hereinabove, it is
intended and agreed that City is deemed a beneficiary of the agreements and covenants provided
herein both for and in its own right and also for the purposes of protecting the interests of the
community. All covenants without regard to technical classification or designation shall be
binding for the benefit of City and such covenants shall run in favor of City for the entire period
during which such covenants shall be in force and effect, without regard to whether City is or
remains an owner of any land or interest therein to which such covenants relate. However, all
such covenants and restrictions shall be deemed to run in favor of all real property owned by the
City which real property shall be deemed the benefited property of such covenants. Furthermore,
all of the covenants, conditions, and restrictions contained herein shall also constitute easements
in gross running in favor of the City. City shall have the right, in the event of any breach of any
such agreement or covenant, to exercise all the rights and remedies, and to maintain any action at
law or suit in equity or other proper proceedings to obtain damages or enforce the curing of such
breach of agreement or covenant.
17.9 Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which when so executed and delivered shall be deemed an original
and all of which, when taken together, shall constitute one and the same instrument.
[signatures on next page]
BBb029J76d007
S I BSJ80.J a0328/I7 -�3-
IN WITNESS WHEREOF, City and Owner have caused this instrument to be execured
on their behalf by Iheir respective ofticers or agents herein duly authorized as of the date first
written above.
`'CITY"
CITY OF ARROYO GRANDE,
a Califomia municipal corporation
By6�-�r�
� .�le+��, �da.w�s
us: i�fy i7���—
ATTEST:
��� .D. .� �� ���,
�CityCler� � 'u nCt�
v � �
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Special Counsel to the City
`'OWNER"
COURTLAND STREET APARTMENTS,
L.P., a Califomia limited partnership
By: People's Self-Help Housing Corporation,
a Califomia nonprofit public benefit
corporation,
its General Partner
By:
Name:
Title:
88L079f56-0003
5185780 J aOJRe/1] -�4-
IN WITNGSS WHEREOF, City and Owner have causcd this instrument to be executcd
on their behalf by their respective officcrs or agents herein duly authorized as of the date first
written above.
`CITY"
CITY OP ARROYO GRANDG,
a California municipal corporation
By:
Its:
ATTEST:
Ciq- Clcrk
APPROVED AS '1'O 1'ORM:
RUT j�CK���
/
Special CounseIl-to the City
I�l�.t�LS�-(�.� "OWNER„
COURTLAND STRCET APARTMENTS,
L.I'., a California limited partncrship
By: Pcople's Self-Help I-lousing Corporation,
a California nonprofit public benefit
corpora[ion,
its Gcncral Partner
Dy:
Name:
Title:
8Ab0?945G�000J
S IRSIPO l a0J/2P/17 '�4'
lN WIT'NESS WHEREOF, City and Owner have caused this instrument to be executed
on their behalf by their respective officers or agents herein duly authorized as of the date first
written above.
"CITY"
CITY OF ARROYO GRANDE,
a Califomia municipal corporation
By:
1 ts:
ATTEST:
City Clerk
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Special Counsel to the City
"OWNER"
COURTLAND STREE7'APARTMENTS,
L.P., a Califomia limited partnership
By: People's Self-Help Housing Corporation,
a Califomia nonprofit public benefit
corporation,
its General Partner
By: i L
/
Name: F ,U�TT� �U.�k'��/U
Tide: �f�ES lJ��(J�
88I/029J56-0OOJ
5185J80 3 a07R8/U '�4-
State of California )
County of J�'p.s., L�:3 O[7:�sdo )
On �eic�n � r�d/'3 , before me, /`i 7�7� �0✓7�/1, ,
� / (l'ns �me nnd title of 1he o1TiceQ
Notary Public, personally appeared �j' T�tiLv� i�dG1vY�5 , who proved
to me on the basis of satisfactory evidence to be the person(aj whose name(� is/�ce subscribed to
the within instrument and acknowledged to me that he/sbek�ey executed the same in
his/heFlti�eir authorized capacity(iea), and that by his/kerlNaeir signatureFsj on the instrument the
person(ej, or the entity upon behalf of which the person(.a) acted, executed the instrument.
1 certify under PENALTY OF PERJURY under the a
I(ITiY NORTON
the foregoing paragraph is true and correct. Commh�ron� t92e921
WITNESS m hand and official seal. ��r��Ic-Camorro�
y San Luls OEtspo Cmmqr
1
Signawre � (Seal)
� ���
State of Califomia )
County of )
On , before me, ,
(insen name und iiile of the ofTicer)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/hedtheir authorized capacity(ies), and that by his/hedtheir signawre(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
1 certify under PENALTY OF PERJURY under the laws of the State of Califomia that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
BBL024156-0003 -'S-
5185J80 S o0JR8/IJ
State of Cal i fom ia )
Countyof_SCinLi.�sG3y,-'Ft, )
On � ,�9. �J/.3 , before me,L-i;TF��. Nr,t F�. %; ,
(insert name nd titic of c olLccr)
No[ary Public, personally appeared Je�n� e /�i��c.c;n , who proved
to me on the basis of satisfactory evidence to be the person�s) whose name(s�afe subscribed to
the within instrument and acknowledged to me that �s they executed the same in
frs�heir�authorized capacity(aes�, and that by�+is((�ftheir signaWraEs) on the instrument the
person(s} or the entity upon behalf of which the personfsj acted, executed the instrument.
1 certify under PENALTY OF PERJURY under the laws of the State of Califomia that
the foregoing paragraph is true and correct.
INIGO F. GARATE
W ITNESS my hand and official seal. Commiscion� �gp3qg2
� '� Notary Publit•Callfomla �
San Lu�s ODispo Counry
M Comm.Ex nes FeD 20.2015+
Signawre� ;�_ � ( ea
State of California )
County of )
On , before me, ,
(insert name and titic of thc olTiccr)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/hedtheir authorized capacity(ies), and that by his/hedtheir signamre(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrumen[.
I certify under PENALTY OF PERJURY under the laws of the State of Califomia that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A8310I9�56-0001
5185380,7 nOlR8/l1 '�5"
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
All that certain real property situated in the CITY OF ARROYO GRANDE, County of SAN
LUIS OBISPO, State of CALIFORNIA, described as follows:
PARCEL 2 AS DESCRIBED IN THAT CERTAIN CERT[FICATE OF COMPLIANCE
RECORDED JULY 15, 2009 AS DOCUMENT NO. 2009-038586 OF OFFICIAL RECORDS
IN THE OFFICE OF THE COUNTY RECORDER AND MORE FULLY DESCRIBED AS
FOLLOWS:
A PORT[ON OF LOT I OF THE J.F. BECKETT'S GRAND AVENUE TRACT, IN THE CITY
OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA,
ACCORDING TO MAP FILED SEPTEMBER 26, 1891 IN BOOK B, PAGE 75 OF MAPS, IN
THE OFFICE OF THE COWi TY RECORDER OF SAID COUNTY, AND THAT PORTION
OF BLOCK I14 OF THE TOWN OF GROVER, IN THE CITY OF ARROYO GRANDE,
COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP
FILED NOVEMBER 23, 1892 IN BOOK A, PAGE 6 OF MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY, AND THAT PORTfON OF REMAINDER OF
TRACT 2471, IN THE CITY OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO,
STATE OF CALIFORNIA, ACCORDING TO MAP FILED AUGUST 16, 2004 IN BOOK 24,
PAGES 9, 10 AND 1 I OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, AND BEfNG THE SOUTH 172.25 FEET OF THE FOLLOWING DESCRIPTION;
BEGINNING AT THE NORTHEAST CORNER OF LOT I OF TRACT 2158, IN THE CITY
OF GROVER BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA,
ACCORDING TO MAP FILED MAY 2, 1994 IN BOOK 17, PAGE 23 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY;
THENCE ALONG THE EASTERLY LINE THEREOF AND ALONG THE EAST LINE OF
THE LAND DESCRIBED IN DEED TO JOHN BRADLEY FORDE AND ANITA
MADELINE FORDE IN DOCUMENT NO. 2003-I22906 FILED OCTOBER 22, 2003 IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, SOUTH 03° 14' S1" WEST,
645.07 FEET TO THE NORTHWEST CORNER OF LOT 7 OF SAID TRACT 2471;
THENCE ALONG THE NORTHERLY LINE OF SAID TRACT 2471 AND THE
NORTHERLY LINE OF 7'RACT 2260 PHASE 1, IN THE CITY OF ARROYO GRANDE,
COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP
FILED NOVEMBER 3, 2000, IN BOOK l9, PAGE 43 OF MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAfD COUNTY THEREOF, SOUTH 86° 45' 35" EAST, 411.86
FEET TO A POINT ON THE WESTERLY LINE OF AN EXISTING 50-FOOT EASEMENT
FOR ROAD PURPOSES, AS SHOWN ON PARCEL MAP AG 00-301, IN THE CITY OF
ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA,
ACCORDING TO MAP FILED JUNE 25, 2002 IN BOOK 56, PAGE 54 OF PARCEL MAPS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, WHICH POINT IS
88L029J56-0003
7187380.1 o0J28/I]
SOUTH 86° 45' 35" EAST, 7.00 FEET FROM THE NORTHEAST CORNER OF LOT 84 OF
SAID TRACT 2260 PHASE I;
THENCE ALONG THE WESTERLY LINE OF SAID 50-FOOT EASEMENT FOR ROAD
PURPOSES, NORTH 03° 14' 46" EAST, 645.00 FEET TO A POINT ALONG THE
SOUTHERLY RIGHT-OF-WAY OF EAST GRAND AVENUE;
THENCE ALONG SAID SOUTHERLY RIGHT-OF-WAY LINE THEREOF, NORTH 86° 45'
00" WEST, 41 1.84 FEET TO THE POINT OF BEGINNING.
Assessor Parcel No(s).: 077-131-053
077-131-055
\
BBL029d56-0007 _�7_
S I B7JBO l o0J28/l3
END OF DOCUMENT