HomeMy WebLinkAboutAssignment Assumption and Modification Agreement ASSIGNMENT, ASSUMPTION AND MODIFICATION AGREEMENT
This Assignment, Assumption and Modification Agreement ("Agreement") is made as of
March 28, 2013 by and among Peoples' Self-Help Housing Corporation, a California
nonprofit public benefit corporation ("Assignor"), Courtland Street Apartments, L.P.,
a California limited partnership("Partnership"), and the City of Arroyo Grande, a
California municipal corporation(the "City").
RECITALS
A. On or about March a 2011, Assignor and the former Arroyo Grande
Redevelopment Agency, a public body, corporate and politic ("Agency"), entered into
that certain Affordable Housing and Loan Agreement (the"Loan Agreement"), pursuant
to which the Agency agreed to provide to Assignor a loan in the amount of$930,000 (the
"RDA Loan")-for the purpose of financing in part the construction of a 36-unit affordable
housing project(the "Project") on property located in the City of Arroyo Grande,
California, more particularly described on Exhibit A attached hereto (the "Property").
B. Pursuant to Assembly Bill 26 from the 2011-12 First Extraordinary Session of the
California Legislature, which was signed by the Governor on June 28, 2011, all
redevelopment agency activities, except continued performance 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 elected to participate in a "voluntary
alternative redevelopment program" and make certain remittance payments). The
California Supreme Court upheld the constitutionality of ABx1 26, revising the effective
dates of certain provisions, and struck down as unconstitutional ABx1 27. (California
Redevelopment Assn. v. Marosanros (2011) 53 Cal.4th 231 (the "CRA Case"). ABx 1 26
is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 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 1, 2012. On June 27, 2012, the California Legislature passed, and the Governor
signed, Assembly Bill 1484 ("AB 1484"), which, among other things, made certain
revisions to certain of the statutes added by ABx 1 26, and added Chapter 9 to Part 1.85.
C. Pursuant to Health and Safety Code section 34176(a), added by Part 1.85 and
amended by AB 1484, the City Council of 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 1, 2012. Pursuant to subdivision (e)(2) of Health
and Safety Code section 34176, which subdivision was added by AB 1484, the RDA
Loan proceeds are one of the "housing assets" of the Agency that was so transferred to
City.
D. The RDA Loan will be evidenced by a Promissory Note Secured By Deed of
Trust executed concurrently herewith by the Partnership, in favor of the City (the "City
Note"), which will be secured by a Deed of Trust And Security Agreement (the "City
Deed of Trust") to be executed by the Partnership concurrently herewith in favor of the
City and recorded in the Official Records of San Luis Obispo County, and by a
Regulatory Agreement and Declaration of Restrictive Covenants (the "City Regulatory
Agreement")to be executed concurrently herewith by the Partnership and the City and
recorded in the Official Records of San Luis Obispo County. The Loan Agreement, City
Note, City Deed of Trust and City Regulatory Agreement shall hereinafter be referred to,
collectively, as the"Loan Documents".
E. Assignor has formed the Partnership for the purpose of developing the Project on
the Property. Concurrently herewith, Assignor shall transfer the Property to the
Partnership, and the Partnership will execute the City Note, City Deed of Trust and City
Regulatory Agreement.
F. In connection with the transfer of the Property, Assignor desires to assign to the
Partnership all of Assignor's right, title, and interest in and obligations under the Loan
Agreement, and the Partnership desires to accept such assignment. Following the
assignment, the Partnership and the City desire to amend certain provisions of the Loan
Agreement.
NOW,THEREFORE, for good and valuable consideration, the parties agree as follows:
I. Assignment. Assignor hereby assigns to the Partnership all of Assignor's right,
title, and interest in and obligations under the Loan Agreement.
2. Acceptance. The Partnership hereby accepts such assignment, and hereby
assumes all of the obligations of Assignor under the Loan Agreement. Any reference to
Assignor in the Loan Agreement-shall be deemed a reference to the Partnership.
3. Release of Assignor. The Partnership releases Assignor from all obligations
imposed under the Loan Documents.
4. Payment of Obligations. The Partnership agrees that all amounts due from
Assignor pursuant to the Loan Documents shall be paid directly by the Partnership.
5. Consent of the City. The City hereby consents to the assignment of the Loan
Agreement from Assignor to the Partnership and hereby agrees to release Assignor from
all obligations imposed under the Loan Documents.
6. Representations. Assignor hereby represents and warrants that it has not
previously assigned, pledged, hypothecated or otherwise transferred any of its rights
under any of the Loan Documents.
7. Amendments to the Loan Agreement.
(a) The following shall be added at the end of Section 7.3:
"A copy of all notices to Developer shall simultaneously be sent to
Developer's limited partner at the following address:
Merritt Community Capital Fund XV, L.P.
do Merritt Community Capital Corporation
1970 Broadway, Suite 250
Oakland, CA 94612
Attn: Bernard T. Deasy"
(b) Section 7.5(b)(ii) is hereby amended by deleting the phrase "controlled
and managed by" and inserting the phrase "under common control and management
with" in its place and stead, and by inserting the phrase ", or another entity approved by
Agency in its reasonable discretion" immediately after said new phrase.
(c) Section 7.5 is hereby amended by deleting the second subsection (c) in its
entirety and replacing it with the following:
"(c) The removal of the general partner of the Partnership for any
default under the Partnership's partnership agreement, provided that any substitute
general partner is the limited partner or an affiliate thereof, or is acceptable to the
Agency in its reasonable discretion, including, without limitation, requiring that the new
general partner have at least the same level of experience in developing, operating and
managing an affordable multifamily housing complex that is similar to the Project."
(d) Section 7.5 is further amended by inserting the following subsection after
the second subsection (c):
"(d) Any transfer to Peoples' Self-Help Housing Corporation, pursuant
to the option and/or right of first refusal granted such party in the Partnership's
partnership documents."
(e) The term "Effective Date" shall mean March 28, 2013.
(f) Item No. 11 in Attachment No. 2 (Schedule of Performance) is hereby
modified by deleting "No later than the Outside Funding Conditions Satisfaction Date,
which is the earlier of(i) 2 years after the Effective Date, or (ii) 180 days after the Tax
Credit Allocation Date" in No. 11, and replacing it with "April 8, 2013."
(g) The City hereby confirms that the source of funds for the Loan is funds
from the Agency's former Low and Moderate Income Housing Fund.
8. No Other Amendments. Except as amended by this Agreement, the Loan
Agreement shall continue unmodified and in full force and effect.
9. Authority. Each of the parties represents and warrants that it has the full power
and authority to execute this Agreement and perform its respective obligations hereunder.
10. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which, when taken together, shall constitute one
document.
Signatures on Following Page
In witness whereof, the parties have executed this Assignment, Assumption and
Modification Agreement as of the date first written above.
ASSIGNOR:
Peoples' Self-Help Housing Corporation,
a California nonprofit public benefit corporation,
By: /�i �✓
It F -
PARTNERSHIP:
Court land Street Apartments, L.P.,
a California limited partnership
By: Peoples' Self-Help Housing Corporation,
a California nonprofit public benefit corporation,
its general partner
By:
Name: teAu27/e -1St/ifes/4f
Its: rkes sdF a r
[Signatures continue on following page.]
The City:
City of Arroyo Grande,
a California municipal corporation)
By:Its: cC 4, /17.
,t'y ej
ATTEST: /�� de /
2 ,SLR a, dee4
it City CI
(/
U APPROVED AS TO FORM:
RUTAN &TUCKER, LLP
By:
Special Counsel to the City
The City:
City of Arroyo Grande,
a California municipal corporation
By:
Its:
ATTEST:
City Clerk
APPROVED AS TO FORM:
RUTAN a/
By:y:
Special Counsel to the City
Exhibit A '
Legal Description
•
•
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF SITE
That certain property located in the City of Arroyo Grande, County of San Luis Obispo,
State of California,described as follows:
Parcel 2 as described in that certain Certificate of Compliance recorded July 15,
2009 as Document No. 2009038586 of Official Records in the Office of the
County Recorder and more fully described as follows:
A portion 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
County Recorder of said County, and that portion of Block 114 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 portion 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 I I of Maps, in the office of the County Recorder of said County,
and being the South 172.25 feet of the following description;
Beginning at the Northeast corner of Lot 1 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. 2003122906 filed October 22, 2003 in the office of the County
Recorder of said County, South 03°14'51" 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 Tract 2260 Phase I, in the City of Arroyo Grande,
County of San Luis Obispo, State of California, according to map filed November
3, 2000 in Book 19, Page 43 of Maps, in the office of the County Recorder of said
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 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,411.84 feet to the Point of Beginning.
APN: 077-131-002,033 (a portion of)
5381024600-0011
1129376.05.03104/11