HomeMy WebLinkAboutAffordable Housing and Loan Agreement •
AFFORDABLE HOUSING AND LOAN AGREEMENT
by and between
ARROYO GRANDE REDEVELOPMENT AGENCY,
a public body, corporate and politic
and
PEOPLES' SELF-HELP HOUSING CORPORATION,
a California nonprofit corporation
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TABLE OF CONTENTS
Page
1. DEFINITIONS 1
2. FINANCING 4
2.1 Amount and Source of Agency Loan 4
2.2 Permissible Use of Agency Loan; Eligible Loan Expenses 4
2.3 Agency Loan Funding Conditions 4
2.4 Disbursements of Agency Loan 6
2.5 Repayment of Agency Loan; Deed of Trust 7
2.6 Execution and Delivery of Documents 7
2.7 Developer's Evidence of Financial Capability 7
2.8 Additional Financing 8
2.8.1 Permitted Encumbrances 8
2.8.2 Efforts to Obtain Funding 9
2.8.3 Notice of Default to Lender; Right to Cure 9
2.8.4 Right of the Agency to Cure Mortgage or Deed of Trust Default 9
2.8.5 Subordination 9
3. DEVELOPMENT OF THE PROJECT 9
3.1 Scope of Development 9
3.2 Final Plans and Permits for Project 9
3.3 Project Budget 10
3.4 Schedule of Performance 10
3.5 Compliance with Permits and Laws 10
3.6. Insurance 11
3.7 Right of Access 12
3.8 Developer Responsible for Cost of Development 12
3.9 Indemnity 13
3.10 Release of Construction Covenants 13
3.11 Relocation 13
4. USE OF SITE; AFFORDABILITY COVENANTS 13
4.1 General 13
4.2 Affordability Levels 14
4.3 Nondiscrimination 14
5. DEFAULTS AND REMEDIES 15
5.1 Defaults-General 15
5.2 Remedies Upon Default 16
5.3 Institution of Legal Actions 17
5.4 Applicable Law and Venue 17
5.5 Rights and Remedies are Cumulative 17
5.6 Attorney's Fees 17
6. REPRESENTATIONS AND WARRANTIES 18
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Page
7. GENERAL PROVISIONS 19
7.1 Nonliability of Agency and City Officials and Employees 19
7.2 Enforced Delay; Extension of Times of Performance 19
7.3 Notices 19
7.4 Inspection of Books and Records 20
7.5 Prohibition Against Assignment and Transfer 20
7.6 Interpretation 21
7.7 Entire Agreement, Waivers and Amendments 22
7.8 Severability 22
7.9 Third Party Beneficiaries; Agency Right to Assign 22
7.10 Covenants Running with the Land 22
7.11 Agency Approvals and Actions 23
7.12 Applicable Law 23
7.13 Counterparts 23
7.14 Attachments 23
ATTACHMENTS
1 LEGAL DESCRIPTION OF SITE
2 SCHEDULE OF PERFORMANCE
3 PROMISSORY NOTE SECURED BY DEED OF TRUST
4 DEED OF TRUST WITH ASSIGNMENT OF RENTS
5 REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS
6 RELEASE OF CONSTRUCTION COVENANTS
7 NOTICE OF RESTRICTIONS
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AFFORDABLE HOUSING AND LOAN AGREEMENT
This AFFORDABLE HOUSING AND LOAN AGREEMENT ("Agreement") is made
and entered into on March 8, 2011, by and between the ARROYO GRANDE
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and
PEOPLES' SELF-HELP HOUSING CORPORATION, a California nonprofit public benefit
corporation("Developer").
RECITALS
A. Agency is a public body, corporate and politic, exercising governmental functions
and powers and organized and existing under the Community Redevelopment Law of the State
of California(Health and Safety Code §§ 33000, et seq.).
B. Developer is a nonprofit public benefit corporation that creates affordable housing
and self-sufficiency programs on California's Central Coast.
C. Developer is the owner in fee of that certain unimproved real property located on
the west side of Courtland Street south of Grand Avenue in the City of Arroyo Grande, County
of San Luis Obispo, State of California, more particularly described in the legal description
attached hereto as Attachment No. 1 ("Site"). Developer desires to develop on the Site a 36 unit
(including one (1) manager's unit) affordable housing rental project and related improvements as
more fully described herein ("Project").
D. Agency desires to increase, improve and preserve the supply of low income
housing available at an affordable housing cost within its territorial jurisdiction by facilitating the
redevelopment of the Site through the provision of financial assistance to Developer in the form
of a loan to develop the Project in the amount not to exceed the sum of Nine Hundred Thirty
Thousand Dollars ($930,000.00).
E. In consideration of Agency's provision of financial assistance to Developer for
the Project, all of the units developed on the Site will be restricted as affordable rental units for
occupancy by low income and very low income households at an affordable rent.
COVENANTS
Based upon the foregoing Recitals and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Agency and Developer hereby agree as
follows:
1. DEFINITIONS.
The following terms as used in this Agreement shall have the meanings given below
unless expressly provided to the contrary:
"Agency" shall mean the Arroyo Grande Redevelopment Agency, a public body,
corporate and politic, organized under the laws of the State of California and having its offices at
214 East Branch Street,Arroyo Grande, California 93421.
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"Agency Loan" shall mean the loan in the amount not to exceed the sum of Nine
Hundred Thirty Thousand Dollars ($930,000.00) to be provided by Agency to Developer for the
Eligible Loan Expenses, as more fully explained in Section 2 of this Agreement.
"Agency Note" shall mean the Promissory Note Secured by Deed of Trust, in the form
attached hereto as Attachment No. 3 which sets for the terms for Developer's repayment of the
Agency Loan to Agency.
"Agreement" shall mean this Affordable Housing and Loan Agreement between Agency
and Developer, including all exhibits and other documents attached hereto.
"Construction Expenses" shall mean the hard construction costs of the Project, as set
forth in the Project Budget for which the Agency Loan may be used.
"Construction Funding Conditions" shall mean the conditions set forth in Section 2.3(b)
of this Agreement that must be satisfied or waived by Agency's Executive Director prior to
Agency providing to Developer the portion of the Agency Loan to be used for the Construction
Expenses.
"Deed of Trust" shall mean the Deed of Trust With Assignment of Rents in the form
attached hereto as Attachment No. 4 which secures Developer's payment obligations under the
Agency Note.
"Developer" shall mean People's Self-Help Housing Corporation, a California nonprofit
corporation. The term "Developer" includes any legally permissible assignee or successor to the
rights, powers, and responsibilities of Developer hereunder, in accordance with Section 7.5 of
this Agreement.
"Effective Date" shall mean the date this Agreement is approved by Agency, which date
shall be inserted in the preamble to this Agreement.
"Eligible Loan Expenses" shall collectively refer to the Predevelopment Expenses and
the Construction Expenses.
"Funding Conditions" shall collectively refer to the Predevelopment Funding Conditions
and the Construction Funding Conditions, which are set forth in Section 2.3 of this Agreement.
"Loan Documents" shall collectively refer to this Agreement, the Agency Note, the Deed
of Trust and the Regulatory Agreement.
"Median Income" shall mean the median household income for the County of San Luis
Obispo, as published periodically by the State of California Department of Housing and
Community Development.
"Notice of Restrictions" shall mean the Notice of Affordability Restrictions on Transfer
of Property, in the form attached hereto as Attachment No. 7.
"Outside Funding Conditions Satisfaction Date" shall mean the date that is the earlier of
(a) 2 years after the Effective Date, or (b) 180 days after the Tax Credit Allocation Date, as such
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date may be extended by the mutual agreement of the parties, in the sole and absolute discretion
of each. The Executive Director shall have the authority on behalf of Agency to extend the
Outside Funding Conditions Satisfaction Date for a period of up to one (1)year.
"Permitted Encumbrances" shall have the meaning ascribed in Section 2.8.1 of this
Agreement.
"Permitted Transfer" shall have the meaning ascribed in Section 7.5 of this Agreement.
"Predevelopment Expenses" shall mean the predevelopment expenses incurred by
Developer for the following items as set forth in the Project Budget, for which the Agency Loan
may be used: architecture, engineering, and environmental work in connection with processing
the development approvals for the Project and preparing the final plans and drawings for the
Project; soils reports and studies; and City processing and development fees.
"Predevelopment Funding Conditions" shall mean the conditions set forth in Section
2.3(a) of this Agreement that must be satisfied or waived by Agency's Executive Director prior
to Agency providing to Developer any portion of the Agency Loan for the Predevelopment
Expenses.
"Project" shall mean the grading of the Site and the development on the Site of a 36-unit
apartment project with landscaping, parking, and related improvements, and all other on-site and
off-site improvements required for development, with all improvements to be consistent in all
material respects with the development and building plans and permits to be approved by City.
The 36 units shall be comprised of 4 one-bedroom units, 16 two-bedroom units, and 16 three-
bedroom units. In the event of any inconsistency between the description of the Project in this
Agreement and the approved plans and permits,the approved plans and permits shall govern.
"Project Budget" shall mean the costs estimates for Developer's development of the
Project approved by Agency pursuant to the terms set forth in Section 3.3. The Project Budget
may not be materially changed without the prior written approval of Agency (a material change
is a change that causes the total Project costs to increase or decrease by more than 10% from
what is shown in the Project Budget or that causes any line item in the Project Budget to increase
or decrease by more than 10%). Any changes to the Project Budget, whether or not requiring the
approval of Agency, shall be submitted to Agency. If the Project Budget is revised as permitted
herein, all references herein to the "Project Budget" shall be deemed to refer to the revised
Project Budget.
"Regulatory Agreement" shall mean the Regulatory Agreement and Declaration of
Covenants and Restrictions between Agency and Developer regulating the operation and
maintenance of the Site, in the form attached hereto as Attachment No. 5.
"Release of Construction Covenants" shall have the meaning ascribed in Section 3.9 of
this Agreement. The form of the Release of Construction Covenants shall be as set forth in
Attachment No. 6 to this Agreement.
"Schedule of Performance" shall mean that certain Schedule of Performance attached
hereto as Attachment No. 2 setting out the dates and/or time periods by which certain obligations
set forth in this Agreement must be performed.
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,
"Site" shall mean that certain real property located in the City of Arroyo Grande, County
of San Luis Obispo, State of California, more particularly described in the legal description
attached hereto as Attachment No. 1.
"Tax Credit Allocation Date" shall mean the date that Borrower secures approval from
the California Tax Credit Allocation Committee of an allocation of tax credits for the Project.
2. FINANCING.
2.1 Amount and Source of Agency Loan. In order to assist in the development of
affordable rental housing within the territorial limits of the Agency, Agency shall, subject to the
terms and conditions set forth herein, and provided Developer is not in default of this
Agreement,provide Developer financial assistance in the form of a loan not to exceed the sum of
Nine Hundred Thirty Thousand Dollars ($930,000.00) ("Agency Loan"). The source of the
Agency Loan is funds from Agency's Low and Moderate Income Housing Fund.
2.2 Permissible Use of Agency Loan; Eligible Loan Expenses. Pursuant to all of the ,
terms and conditions of this Agreement, Developer shall be permitted to use the Agency Loan
proceeds only for the Eligible Loan Expenses that are actually and reasonably incurred by
Developer and set forth in the Project Budget approved by Agency, and for no other purpose. A
portion of the Agency Loan in an amount not to exceed the sum of Two Hundred Thousand
Dollars ($200,000.00) may be used for the Predevelopment Expenses with the balance to be used
for the Construction Expenses.
2.3 Agency Loan Funding Conditions. The conditions for Agency's disbursement of
the Agency Loan are set forth below
(a) Predevelopment Funding Conditions for Predevelopment Expenses.
Notwithstanding any other provision of this Agreement to the contrary, Agency shall
have no obligation to disburse any Agency Loan proceeds for the Predevelopment
Expenses until such time as all of the following conditions (collectively the
"Predevelopment Funding Conditions") are satisfied or Agency waives such conditions in
its sole and absolute discretion:
(i) Execution and Delivery of Documents. Developer shall have
executed and delivered to Agency the documents referred to in Section 2.6 of this
Agreement.
(ii) Agency Title Policy. First American Title Company or such other
title company reasonably approved by Agency ("Title Company") is irrevocably
committed to issue to Agency an ALTA lender's policy of title insurance
("Agency Title Policy"), with liability in the amount of the Agency Loan,
showing fee title to the Site vested in Developer, insuring in favor of Agency the
Deed of Trust, with such endorsements as Agency may reasonably require,
subject only to (i) the standard printed exceptions and exclusions contained in the
form of the Title Policy commonly used by Title Company; (ii) non-delinquent
property taxes and assessments; and (iii) such other matters as may be approved
by Agency in its sole and absolute discretion. Developer shall pay the premium
for the Agency Title Policy.
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(iii) Insurance. Developer shall have provided to Agency evidence of
the insurance required under Section 3.5 of this Agreement.
(iv) Financial Capability. Agency shall have approved Developer's
evidence of financial capability to develop the Project in accordance with Section
2.7 of this Agreement.
(v) Project Budget. Agency has approved the Project Budget.
(vi) Good Standing Certificate. Developer has provided Agency with a
recent good standing certificate that shows Developer to be in good standing.
(vii) Operating Expense Definition. The parties have agreed on the
amounts to be inserted in the blanks in the definition of"Operating Expenses" in
Section 2 of the Agency Note.
(viii) No Default. Developer shall not be in default of any of its
obligations set forth in this Agreement, and there shall be no event which, with
the passage of time or the giving of notice, would constitute a default, and all
representations and warranties of Developer shall remain true and correct in all
material respects.
(b) Construction Funding Conditions for Construction Expenses.
Notwithstanding any other provision of this Agreement to the contrary, Agency shall
have no obligation to disburse any Agency Loan proceeds for the Construction Expenses
until such time as all of the following conditions (collectively the "Construction Funding
Conditions") are satisfied or Agency waives such conditions in its sole and absolute
discretion:
(i) Permits and Approvals. Developer shall have timely obtained all
land use approvals and entitlements for the Project and shall have timely obtained
approval of its final grading plans and building plans for the Project and grading
and building permits shall be ready to be issued upon the payment of fees.
(ii) Construction Contract. Developer shall have provided Agency a
copy of the construction contract for the Project, which shall be subject to
Agency's reasonable approval.
(iii) Predevelopment Funding Conditions. All of the Predevelopment
Funding Conditions remain satisfied.
Agency's obligation to provide any Agency Loan proceeds to the Project is subject to the
fulfillment by Developer or waiver by Agency of each and all of the applicable Funding
Conditions described in this Section for the applicable portion of the Agency Loan, which are
solely for the benefit of Agency, and each of which, if it requires action by Developer, shall also
be a covenant of Developer, and any of which may be waived by the Executive Director in his
sole and absolute discretion. If any of the Funding Conditions are not satisfied by the Outside
Funding Conditions Satisfaction Date or such earlier time as provided for in this Agreement,
Agency may terminate this Agreement by giving written notice of termination to Developer. In
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such event, any funds and documents delivered by either party under this Agreement shall be
returned to it and any portion of the Agency Loan provided to Developer shall be immediately
repaid by Developer to Agency in accordance with the Agency Note. The termination of this
Agreement shall not release any party from liability for any default of its obligations hereunder
2.4 Disbursements of Agency Loan. The Agency Loan shall be disbursed to
Developer as follows:
(a) Predevelopment Expenses. A portion of the Agency Loan in an
amount not to exceed Two Hundred Thousand Dollars ($200,000.00) may be used for the
Predevelopment Expenses. Such portion of the Agency Loan shall be disbursed to
Developer for the Predevelopment Expenses upon the satisfaction of the Predevelopment
Funding Conditions no more frequently than once per month as Predevelopment
Expenses are incurred by Developer. No later than the 15th day of each month,
Developer shall submit to the Executive Director a request for payment of Agency Loan
proceeds to reimburse Developer for the Predevelopment Expenses incurred by
Developer for the previous month. The payment request shall include the total amount
requested and itemized statements and invoices, with such supporting information as
Agency may reasonably require documenting that the costs for which Developer seeks
payment were made and incurred by Developer, which supporting information required
by Agency may include without limitation, receipts, canceled checks, time records,
billing statements, bank statements, and contracts. In the event Developer desires to
obtain an advance disbursement for activities scheduled to be undertaken or activities not
yet completed (e.g., as a down payment, advance payment, or progress payment),
Developer shall present to the Executive Director a contract or other evidence that the
consultant, contractor or other party performing the work is entitled to an advance
payment and Developer has incurred the obligation to make such payment. Payment of
the amount requested by Developer and approved by Agency shall be made by Agency
within twenty (20) days after Developer's submission of its completed payment request.
Agency shall exercise diligent efforts to provide to Developer any disapproval of a
payment request within fifteen (15) days after Agency has received information
necessary to make the determination that the payment request cannot be approved. If
payment is requested for amounts owing to a consultant, contractor or any other third
party, Agency shall have the right to disburse the Agency Loan payments directly to such
third party. Notwithstanding the foregoing procedures, Agency shall have the right to
establish a third party escrow to handle the disbursements of the Agency Loan.
(b) Construction Expenses. The portion of the Agency Loan that may
be used for Construction Expenses shall be disbursed to Developer from time to time, no
more frequently than once per month after the Construction Funding Conditions have
been satisfied and Developer has commenced development of the Project, to reimburse
Developer for the Construction Expenses, as such expenses are incurred by Developer
and approved by Agency. The procedures for Developer's submittal of payment requests
and Agency's payment for Construction Expenses shall be the same as the procedures for
the Predevelopment Expenses set forth in subparagraph (a) above; provided, however,
that the payment requests for the Construction Expenses shall also include (i) certification
from the contractor that the work for which a disbursement is sought has been completed
and conforms to the approved plans and permits; and (ii) appropriate lien releases and
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waivers, including for mechanic's liens, materialmen's liens, stop notice claims, and
equitable lien claims, with said lien releases and waivers to be in a form reasonably
required by the Executive Director and in conformance with the requirements of
California Civil Code Section 3262. In addition, Agency shall have the right to withhold
ten percent (10%) of each disbursement for Construction Expenses until (a) all tasks
related to the development of the Project are completed and all closeout procedures are
completed other than the final disbursement of the Agency Loan, (b) the time period for
filing lien claims has expired or, if lien claims have been timely filed, after all such
claims have been resolved or a statutory lien release bond has been provided, and (c) all
conditions to final disbursement have been satisfied.
(c) General. It is expressly understood that Agency's obligation to
make periodic disbursements of Agency Loan proceeds to Developer pursuant to this
Section 2.4 shall be conditioned and contingent upon there being no default of Developer
under this Agreement or the occurrence of an event which, with the passage of time or
the giving of notice, would constitute a default. Agency shall have no obligation to
disburse any Agency Loan proceeds for any payment request that is submitted after the
date that is sixty (60) days after the date Developer is entitled to issuance of a Release of
Construction Covenants.
2.5 Repayment of Agency Loan; Deed of Trust. Developer's obligation to repay the
Agency Loan shall be as set forth in the Agency Note. The Agency Note generally provides for
Developer to pay to Agency a percentage of the cash flow generated from the Site with any
balance paid on the date that is fifty-five (55) years after the date of the Agency Note; provided,
however, in the event this Agreement is terminated for failure of all of the Funding Conditions to
be satisfied by the Outside Funding Conditions Satisfaction Date pursuant to Section 2.3, the
Agency Loan shall be due and payable within thirty (30) days after the date of such termination.
Developer's obligation to repay the Agency Loan will be secured by the Deed of Trust. The
Deed of Trust contains an acceleration clause which permits Agency to declare the Agency Loan
and the entire indebtedness secured by the Deed of Trust immediately due and payable and
collectible then or thereafter as Agency may elect, regardless of the date of maturity, upon the
occurrence of certain events, including without limitation transfers and encumbrances of the Site
that are not permitted and defaults of the Loan Documents that are not cured within any
applicable cure period.
2.6 Execution and Delivery of Documents. No later than five (5) days after the date
the Predevelopment Funding Conditions in subparagraphs (ii)-(viii) in Section 2.3(a) are satisfied
and prior to any work on the Site, Developer shall deliver to Agency the following documents:
(a)the Agency Note, executed by Developer; (b) the Deed of Trust, executed and acknowledged
by Developer; (c)the Regulatory Agreement, executed and acknowledged by Developer; and (d)
the Notice of Restrictions, executed and acknowledged by Developer. Within fifteen (15) days
after the date that all of the Predevelopment Funding Conditions are satisfied and prior to
Agency's disbursement of any Agency Loan proceeds to Developer, Agency shall cause the
Regulatory Agreement and the Notice of Restrictions to be executed and acknowledged by
Agency and shall cause both documents together with the Deed of Trust to be recorded in the
Official Records of San Luis Obispo County.
2.7 Developer's Evidence of Financial Capability. Within the time set forth in the
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Schedule of Performance, Developer shall submit to Agency's Executive Director evidence
reasonably satisfactory to the Executive Director that Developer has the financial capability
necessary for the development of the Project pursuant to this Agreement. Such evidence of
financial capability shall include all of the following:
(a) A copy of the commitment or commitments obtained by Developer
for all of the sources of funds for construction and permanent financing for the Project.
All copies of commitments submitted by Developer to Agency shall be certified by
Developer to be true and correct copies thereof. Each commitment for financing shall be
in such form and content acceptable to Agency's Executive Director as reasonably
evidences a firm and enforceable commitment, with only those conditions which are
standard or typical for the lender involved for similar projects.
(b) Copies of the loan documents for each funding source to be
obtained by Developer. Developer shall provide written certification to Agency that the
loan documents submitted are correct copies of the actual loan documents to be executed
by Developer.
(c) If the total costs set forth in the Project Budget exceed the amount
of financing commitments received pursuant to subparagraph (a) above, a financial
statement and/or other documentation reasonably satisfactory to the Executive Director
sufficient to demonstrate that Developer has adequate funds available and committed to
cover such difference.
The Executive Director shall complete its review of and approve or disapprove
Developer's evidence of financial capability within twenty (20) days after a complete submittal.
If the Executive Director shall disapprove such evidence of financing, he or she shall do so by
written notice to Developer stating the reasons for such disapproval. In such event, Developer
shall promptly resubmit its evidence of financial capability with the changes requested by
Agency not less than twenty (20) days after receipt of the Executive Director's disapproval, the
Executive Director shall reconsider such resubmittal within the same number of days allowed for
the initial submittal and the deadlines in the Schedule of Performance shall be extended
accordingly.
2.8 Additional Financing.
2.8.1 Permitted Encumbrances. Mortgages, deeds of trust, conveyances, and
leases-back or any other form of conveyance required for any reasonable method of financing
shall be permitted on the terms set forth herein, but only for the purpose of securing loans of
funds to be used for the acquisition, construction and development of the Project, provided the
cumulative amount of all of the loans encumbering the Site does not exceed: (a) prior to the
completion of construction of the Project, ninety percent (90%) of the appraised as-completed
value of the Site plus the value of tax credits allocated to the Project pursuant to a Low Income
Housing Tax Credit Program approved by the California Tax Allocation Committee, and (b)
after the completion of construction of the Project, ninety percent (90%) of the appraised value
of the Site, with said values evidenced by an appraisal or other evidence acceptable to Agency
("Permitted Encumbrances").
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2.8.2 Efforts to Obtain Funding. From and after the date of this Agreement,
Developer shall exercise diligent efforts to obtain financing for the development of the Project
from sources that may include, but are not limited to, County HOME funds, an allocation of Low
Income Housing Tax Credits from the California Tax Allocation Committee, and a loan from an
institutional lender. Developer shall keep Agency informed of Developer's efforts to obtain
financing and its progress with respect thereto and shall provide to Agency such information as
required by Agency in connection therewith.
2.8.3 Notice of Default to Lender; Right to Cure. Whenever Agency shall
deliver any notice or demand to Developer with respect to any default by Developer under this
Agreement, Agency shall at the same time deliver a copy of such notice or demand to any lender
that has provided Agency written request for such notice or demand, and to Developer's limited
partner during any period in which a tax credit investor is admitted as a limited partner of
Developer provided Developer or such limited partner provides Agency in writing an address for
the delivery of such notices. The other lenders for the Project and the limited partner shall
(insofar as the rights of Agency are concerned) have the right to cure defaults of Developer under
this Agreement, and such cure shall be accepted or rejected on the same basis as if such cure had
been tendered by Developer.
2.8.4 Right of the Agency to Cure Mortgage or Deed of Trust Default. In the
event of a mortgage or deed of trust default or breach by Developer, Developer shall promptly
deliver to Agency a copy of any notice of default or breach received from any other lender and
Agency may cure the default following prior notice thereof to Developer. In such event,
Developer shall be liable, and Agency shall be entitled to reimbursement from Developer within
ten(10) days of written demand, for all costs and expenses associated with and attributable to the
curing of the mortgage or deed of trust default, including any default consisting of a breach of
this Agreement by Developer, which are incurred by Agency. Any sums which become due to
Agency from Developer under the provisions of this Section 2.8.4 shall be secured by the
Agency Deed of Trust.
2.8.5 Subordination. The Executive Director shall have the authority on behalf
of Agency to execute and deliver subordination agreements with respect to the Project document
as he determines are necessary and commercially reasonable and consistent with the purpose and
effect of this Agreement; provided, however nothing herein shall obligate Agency to subordinate
its documents to any other financing.
3. DEVELOPMENT OF THE PROJECT.
3.1 Scope of Development. Developer shall develop the Project on the Site in strict
accordance with this Agreement and the applications, plans and drawings submitted by
Developer and approved by Agency and City as set forth herein (provided, however,that nothing
herein shall represent, warrant, or guarantee that Agency or City shall approve any of such
applications, plans, drawings, or other documents or submittals). If Developer desires to make
any change in any development or building plans after the same have been approved, the
proposed change shall be submitted to Agency and, if required,to City for approval.
3.2 Final Plans and Permits for Project. No later than the date that is the earlier of(a)
eighteen (18) months after the Effective Date, or (b) sixty (60) days after the Tax Credit
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•
Allocation Date, Developer shall submit to Agency and City for review and approval a complete
set of final construction drawings, plans and specifications for the Project ("final plans"), in
conformity with the requirements set forth in this Agreement. The final plans shall contain all
information required to obtain all necessary grading and building permits required for the
Project. The parties shall exercise reasonable diligence to process the plans so that they can be
approved within ninety (90) days after a complete submittal. In the event City or Agency
requires modifications to the final plans, Developer shall promptly revise or correct the final
plans as necessary to conform to Agency and City requirements and resubmit to Agency and
City. Once approved, no changes to the final plans shall be permitted without the prior written
approval of Agency and City. Within the same time as the submittal of the final plans,
Developer shall submit all applications and other documents required to obtain any permits and
entitlements required by Agency, City, and any other governmental agency having jurisdiction
over the Site and the Project, including a conditional use permit, and shall secure or cause to be
secured such permits and approvals prior to commencement of construction of the Project..
3.3 Project Budget. Prior to any disbursements of the Agency Loan, Developer shall
prepare for Agency's approval a line item Project Budget, which shall detail the amounts
budgeted to each Predevelopment Expense and Construction Expense. The Agency Loan
proceeds that are disbursed to Developer for the Eligible Loan Expenses shall not exceed the
amounts in the Project Budget without Agency's approval, which may be granted or withheld in
Agency's sole discretion.
3.4 Schedule of Performance. Developer shall commence development of the Project
no later than the date that is fifteen (15) days after the date all of the Funding Conditions are
satisfied, but in no event later than the Outside Funding Conditions Satisfaction Date. Subject to
the force majeure provisions of Section 7.2 of this Agreement, once development of the Project
is commenced, it shall be continuously and diligently pursued to completion and shall be
completed no later than one (1) year after commencement, and shall not be abandoned for more
than twenty (20) consecutive days. During the course of construction, and prior to Agency's
issuance of its Release of Construction Covenants for the Project, Developer shall keep Agency
informed of the progress of construction on a quarterly basis, which progress reports shall be in
writing upon Agency's request.
3.5 Compliance with Permits and Laws. Developer shall carry out the design,
construction and operation of the Project in conformity in all material respects and all legally
required respects with all applicable federal, state, and local laws, including the Agency zoning
and development standards, building, plumbing, mechanical and electrical codes, and all other
applicable provisions of the Arroyo Grande Municipal Code, all applicable disabled and
handicapped access requirements, and all environmental mitigation measures imposed as
conditions of approval of the Project. In addition, Developer shall carry out the construction of
the Project and the development of the Site in conformity in all material respects and all legally
required respects with all applicable federal and state labor laws (including, without limitation, if
applicable, the requirement under California law to pay prevailing wages and hire apprentices).
Developer shall be solely responsible for determining and effectuating compliance with such
laws, and Agency makes no representation as to the applicability or non-applicability of any of
such laws to the construction of the Project or any part thereof. Developer hereby expressly
acknowledges and agrees that Agency has not previously affirmatively represented to Developer
or its contractor(s) for the construction or development of the Project, in writing or otherwise, in
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a call for bids or otherwise, that the work to be covered by this Agreement is not a "public
work," as defined in Section 1720 of the Labor Code. Developer hereby agrees that Developer
shall have the obligation to provide any and all disclosures or identifications required by Labor
Code Section 1781, as the same may be amended from time to time, or any other similar law.
Developer shall indemnify, protect, defend and hold harmless the Agency, City and their
respective officers, employees, contractors and agents, with counsel reasonably acceptable to
Agency and City, from and against any and all loss, liability, damage, claim, cost, expense
and/or"increased costs" (including reasonable attorneys' fees, court and litigation costs, and fees
of expert witnesses) which, in connection with the development, or construction (as defined by
applicable law) of the Project, including, without limitation, any and all public works (as defined
by applicable law), results or arises in any way from any of the following: (1) the
noncompliance by Developer of any applicable local, state and/or federal law, including, without
limitation, any applicable federal and/or state labor laws (including, without limitation, if
applicable, the requirement to pay state prevailing wages and hire apprentices); (2) the
implementation of Section 1781 of the Labor Code, as the same may be amended from time to
time, or any other similar law; and/or(3) failure by Developer to provide any required disclosure
or identification as required by Labor Code Section 1781, as the same may be amended from
time to time, or any other similar law. It is agreed by the parties that, in connection with the
development and construction (as defined by applicable law) of the Project, including, without
limitation, any and all public works (as defined by applicable law), Developer shall bear all risks
of payment or non-payment of prevailing wages under California law and/or the implementation
of Labor Code Section 1781, as the same may be amended from time to time, and/or any other
similar law. "Increased costs,"as used in this Section 3.4 shall have the meaning ascribed to it in
Labor Code Section 1781, as the same may be amended from time to time. The foregoing
indemnity shall survive termination of this Agreement and shall continue after completion of the
construction and development of the Project by Developer.
3.6 Insurance. Developer shall procure and maintain, at its sole cost and expense, in a
form and content satisfactory to Agency, during the entire term of this 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 Agency,
City and their respective officers, officials, members, employees, agents, representatives, and
volunteers as additional insureds or co-insureds. In the timeframe required by the Schedule of
Performance, Developer shall also furnish or cause to be furnished to Agency 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 Agency. Such policy shall name Agency as a loss payee.
The foregoing insurance policies:
(a) shall be primary insurance and not contributory with any other insurance
which Agency or City may have;
(b) shall contain no special limitations on the scope of protection afforded to
Agency, City and their respective officers, officials, members, employees,
agents, representatives, and volunteers;
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(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
Developer unless there is a minimum of thirty (30) days prior written
notice to Agency;
(f) shall be written by a good and solvent insurer admitted in California and
registered with the California State Department of Insurance; and
(g) shall be endorsed to state that any failure to comply with the reporting
provisions of the policies shall not affect coverage provided to Agency or
City.,
Developer shall also furnish or cause to be furnished to Agency evidence reasonably
satisfactory to Agency that Developer's contractors and subcontractors carry workers'
compensation insurance as required by law.
Developer agrees that the provisions of this Section 3.6 shall not be construed as limiting
in any way the extent to which Developer may be held responsible for the payment of damages
to any persons or property resulting from Developer's activities or the activities of any person or
persons for which Developer is otherwise responsible. No later than ten (10) days after the
Effective Date, Developer shall provide evidence of the general liability insurance (such as
Certificates of Insurance of appropriate insurance binders) and obtain approval thereof from
Agency. Evidence of the property insurance and other insurance required under this Section
shall be provided to Agency prior to commencement of any development work on the Site.
3.7 Right of Access. Agency and its officers, officials, employees, agents and
representatives, upon at least 24 hours prior notice to Developer, shall have the right of access to
the Site, without charges or fees, for the purposes of this Agreement, including but not limited to,
the inspection of the work being performed in constructing the Project, so long as Agency
representatives comply with all safety rules and do not interfere with, delay or interrupt
Developer's construction activities. It is understood that Agency does not by this right of access
assume any responsibility or liability for a negligent inspection or failure to inspect. This right
of inspection is in addition to any rights City has independent of this Agreement in its capacity as
a regulatory agency.
3.8 Developer Responsible for Cost of Development. Except to the extent Agency
has specifically agreed to provide the Agency Loan pursuant to Section 2, Developer shall be
responsible for all costs of developing the Project, including but not limited to predevelopment
costs incurred for items such as planning, design, engineering, and environmental remediation;
all development and building fees; the cost incurred to demolish and clear any existing
improvements, furnishings, fixtures, and equipment from the Site requiring removal; relocation
expenses payable to any occupants of the Site; costs for insurance and bonds (as required); costs
for financing; all on-site construction costs; costs for any necessary public improvements; and
Developer's legal fees.
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3.9 Indemnity. Developer shall defend, indemnify, assume all responsibility for, and
hold Agency, City and their respective officers, officials, members, employees, agents,
representatives, and volunteers, harmless from all claims, demands, damages, defense costs or
liability of any kind or nature relating to (a) any damages to property or death or injuries to
persons (including reasonable attorneys' fees and costs and expert witness fees), which may be
caused by any acts or omissions of Developer or its agents, employees, contractors or other
persons acting under the direction or control of Developer, whether such damage shall accrue or
be discovered before or after termination of this Agreement, except to the extent such matters are
caused by the active negligence or willful misconduct of Agency or its officers, officials,
members, employees, agents, representatives, or volunteers acting in an official capacity; or (b)
any litigation, administrative or adjudicative challenge by third parties to the validity,
applicability, interpretation or implementation of this Agreement or any approval or permit
issued for the Project, or the certification or approval of the environmental document(s) with
respect to the Project and this Agreement, or the compliance with this Agreement or the Project
with any legal requirements; or (c) any default of this Agreement by Developer, or (d) any
activities or conditions in, on or under the Site. Agency shall have the right to terminate this
Agreement in the event of any litigation or challenge brought as described in (b) above prior to
disbursement of any Agency Loan proceeds.
3.10 Release of Construction Covenants. Upon the satisfactory completion of
construction of the Project as determined by Agency, Agency shall furnish Developer with a
final Release of Construction Covenants for such work in the form attached hereto as Attachment
No. 6 upon written request therefor by Developer. Such Release of Construction Covenants shall
be in a form so as to permit recordation in the Office of the San Luis Obispo County Recorder.
Agency shall not unreasonably withhold issuance of the Release of Construction Covenants. If
Agency refuses or fails to furnish the Release of Construction Covenants after written request
from Developer, Agency shall, within fifteen (15) days after such written request, provide
Developer with a written statement of the reasons Agency refused or failed to furnish the Release
of Construction Covenants. The statement shall also contain Agency's opinion of the action
Developer must take to obtain the Release of Construction Covenants. The Release of
Construction Covenants shall not constitute evidence of compliance with or satisfaction of any
obligation of Developer to any holder of a mortgage or any insurer of a mortgage on or with
respect to the Site. The Release of Construction Covenants is not a notice of completion as
referred to in California Civil Code Section 3093.
3.11 Relocation. Developer shall have the sole and exclusive responsibility for
providing relocation assistance and paying all relocation costs required to comply with all
applicable federal and state laws, rules, and regulations. Any relocation shall be performed in
accordance with a relocation plan approved by Agency. Developer shall indemnify, defend, and
hold Agency and City harmless from and against any claims, liabilities, damages, or losses made
against it by tenants or occupants of the Site, including without limitation claims for relocation
assistance and inverse condemnation.
4. USE OF SITE; AFFORDABILITY COVENANTS.
4.1 General. Developer and its successors and assigns shall use, operate, and
maintain the Site as an affordable rental housing project in accordance with the provisions of this
Agreement and the Regulatory Agreement.
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4.2 Affordability Levels. The Regulatory Agreement provides that the units to be
constructed on the Site shall be rented to Low Income Tenants and Very Low Income Tenants at
Affordable Rents, as those terms are defined in the Regulatory Agreement. At least 25% of the
units shall be restricted to rent to Very Low Income Tenants at an Affordable Rent for that
income level, with the balance rented to Low Income Tenants at an Affordable Rent for that
income level. In the event any of the other funding sources for the Project require that the units
be occupied by persons or families at lower income levels, Agency shall have the right to restrict
the units at such lower income levels and the Regulatory Agreement shall be modified
accordingly. The unit mix shall be inserted into the Regulatory Agreement prior to its execution.
4.3 Nondiscrimination. In addition to any other nondiscrimination provisions
applicable to the Site under federal, state or local law, Developer by and for itself and any
successor in interest covenants that there shall be no discrimination against, or segregation of,
any persons, or group of persons, on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1,subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code in the sale, lease, or rental or in the use, occupancy, or
enjoyment of the Site, nor shall Developer 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 Site or any portion thereof The foregoing covenants shall run with the land and
shall remain in effect in perpetuity.
All deeds, leases or contracts for the Site shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
i. 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 (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy,
tenure, or enjoyment of the premises herein conveyed, nor shall the grantee 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, subtenants, sublessees, or vendees
in the premises herein conveyed. The foregoing covenants shall run with the land."
ii. 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: That there shall be no discrimination against or segregation of any person
or group of persons, on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the leasing, subleasing,transferring, use, occupancy,
tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself,
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_ I
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."
iii. In contracts: "There shall be no discrimination against or segregation of
any person or group of persons, on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code, in the sale, lease, 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 party or parties and
any subcontracting party or parties, or other transferees under the contract."
5. DEFAULTS AND REMEDIES.
5.1 Defaults-General. The occurrence of any of the following shall be deemed a
default under this Agreement:
(a) The failure or delay by either party to perform any term or provision of
this Agreement if such failure is not cured, corrected or remedied within any specific
time period set forth in this Agreement.
(b) If no other specific time period is set forth herein, the failure to cure a
monetary default under this Agreement (other than any monetary defaults specifically
listed in any of the other subparagraphs of this Section 5.1) within ten (10) days after the
nonperforming party's receipt of written notice from the other party specifying the nature
of the default.
(c) If no other specific time period is set forth herein,the failure to cure a non-
monetary default under this Agreement (other than any non-monetary defaults
specifically listed in any of the other subparagraphs of this Section 5.1) within thirty (30)
days after the nonperforming party's receipt of written notice from the other party
specifying the nature of the default; provided, however, that if the failure cannot be
corrected within such period, it shall not constitute a default if corrective action is
instituted by Developer within such period and diligently pursued until the failure is
corrected, and provided further that any such failure is cured within ninety (90) days of
receipt of notice of such failure.
(d) Developer does not proceed with the commencement, construction and
completion of the Project as herein provided.
(e) Work ceases on the Project for twenty (20) consecutive days.
(f) Any of the warranties or representations made by Developer herein are
false, incorrect or misleading in any material respect when made.
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(g) Developer commits any act of bankruptcy or if any relief under the federal •
Bankruptcy Act is sought by or against Developer, or if a receiver is appointed to take
charge of the assets or affairs of Developer, or if Developer should make an assignment
for the benefit of creditors, or if Developer should become insolvent, or upon any
liquidation or termination of Developer; provided, however, that if any such proceeding
is brought involuntarily against Developer, Developer shall have sixty (60) days to obtain
the dismissal of such proceeding.
(h) The filing of a notice of judgment lien against Developer, or the recording
of any abstract of judgment against Developer, or the service of a notice of levy and/or of
a writ of attachment or execution, or other like process, against the assets of Developer,
or the entry of a judgment, order or decree against Developer, any or all of which would
have a material and adverse effect upon Developer's ability to perform under this
Agreement, unless the same is dismissed within sixty (60) days.
(i) Developer shall default under any permits, development documents,
construction contracts, bond agreements, or any other instrument executed in connection
with the development of the Project, including without limitation the construction
contract, subject to any applicable notice and cure periods provided for in such contract
or instrument.
(j) Developer shall default in the payment or performance of any obligation,
or any defined event of default, under the terms of any contract or instrument pursuant to
which Developer has incurred any debt or other liability to any person or entity that has
an interest secured by a lien recorded against the Site, which default is not cured within
any grace and cure period expressly provided in such contract or instrument.
The party in default shall provide to the other party immediate written notice of the
occurrence of any event that would constitute a default hereunder. During any period in which
there is a tax credit investor admitted as a limited partner of Developer, any notice of default
provided to Developer shall also be provided to Developer's limited partner provided Developer
or such limited partner provides to Agency an address for the delivery of such notices. Except as
otherwise expressly provided in this Agreement, any failure or delay by a party in giving a notice
of default or in asserting any of its rights and remedies as to any default shall not constitute a
waiver of any default, nor shall it change the time of default, nor shall it deprive such party 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. During any period in which there is a tax
credit investor admitted as a limited partner of Developer, in the event Developer fails to
commence or complete a cure of a Developer default within any applicable cure period set forth
above and such limited partner notifies Agency in writing prior to the expiration of the required
time period to commence the curing of the default that the limited partner will cure the default
(or if Developer timely commences the cure but fails to compete the cure within the applicable
cure period, the notice shall be provided before the expiration of the cure period), then the cure
period provided for any monetary default shall be extended by ten (10) days and the cure period
provided for any non-monetary default shall be extended by thirty (30) days.
5.2 Remedies Upon Default. In addition to any other rights or remedies available at
law or in equity, upon a default under this Agreement (other than a default of Agency) that is not
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cured within any applicable notice and cure periods herein, Agency may take one or more of the
following actions:
(a) Wholly or partially suspend or terminate this Agreement.
(b) Withhold further awards for the Project, including further disbursements
of the Agency Loan.
(c) Require Developer to repay the Agency Loan funds.
(d) Institute legal action to cure, correct, or remedy any default, to recover
damages for any default, or to obtain any other remedy consistent with the purposes of
this Agreement.
In addition to the foregoing, upon the occurrence of an event which, with the passage of
time or the giving of notice, would constitute a default under this Agreement (other than a
default of Agency), Agency may temporarily withhold disbursements of Agency Loan proceeds
pending correction of the default by Developer.
5.3 Institution of Legal Actions. In addition to any other rights or remedies, either
Party may institute legal action to cure, correct, or remedy any default, to recover damages for
any default, or to obtain any other remedy consistent with the purposes of this Agreement.
5.4 Applicable Law and Venue. The internal laws of the State of California without
regard to conflict of law principles shall govern the interpretation and enforcement of this
Agreement. All legal actions must be instituted and maintained in the Superior Court of the
County of San Luis Obispo, State of California, or in any other appropriate court in that County.
5.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this
Agreement,the rights and remedies of the parties are cumulative, and the exercise by either party
of one or more of its 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
other party.
5.6 Attorney's Fees. If either party to this Agreement is required to initiate or defend
litigation in any way connected with this Agreement, the prevailing party in such litigation, in
addition to any other relief which may be granted, whether legal or equitable, shall be entitled to
reasonable attorney's fees from the losing party. If any party to this Agreement is required to
initiate or defend litigation with a third party because of the violation of any term or provision of
this Agreement by the other party, then the party so litigating shall be entitled to reasonable
attorney's fees from the other party to this Agreement. Attorney's fees shall include attorney's
fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other
reasonable costs for investigating such action, retaining expert witnesses, taking depositions and
discovery, and all other necessary costs incurred with respect to such litigation.
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6. REPRESENTATIONS AND WARRANTIES.
Developer makes the following representations and warranties as of the date of this
Agreement and agrees that such representations and warranties shall survive and continue
thereafter:
(a) Authorization and Validation. The execution, delivery and performance by
Developer of this Agreement (i) are within the powers of Developer and upon its execution will
constitute a legal, valid and binding obligation of Developer enforceable in accordance with its
terms, and (ii)to Developer's knowledge, will not violate any provisions of law, any order of any
court or other agency of government, or any indenture, agreement or any other instrument to
which Developer is a party or by which Developer, or any of its property, is bound, or be in
conflict with, result in any breach of or constitute (with due notice and/or lapse of time) a default
• under any such indenture, agreement or other instrument, or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of its property or assets,
except as contemplated by the provisions of this Agreement, and (iii) no approvals or consents
not heretofore obtained by Developer are necessary in connection with the execution of this
Agreement by Developer or with the performance by Developer of its obligations hereunder.
(b) Correct Information. All reports, papers, data and information given to Agency
by Developer with respect to Developer and the Site are accurate and correct in all material
respects and complete insofar as completeness may be necessary to give Agency true and
accurate knowledge of the subject matters thereof, and there has been no material change in such
information since the date such information was delivered by Developer to Agency.
(c) Defaults. Developer is not a party to any agreement or instrument that will
materially interfere with its performance under this Agreement, and is not in default in the
performance, observance or fulfillment of any of its obligations, covenants or conditions set forth
in any agreement or instrument to which it is a party.
(d) Title. Developer has good and marketable title in fee simple to the Site, free and
clear of any liens, charges, encumbrances, security interests and adverse claims whatsoever
except as shown in the Agency Title Policy referred to in Section 2.3(a)(ii) or as approved in
writing by Agency, and has full right, power, and authority to encumber the Site with the
Regulatory Agreement.
(e) Pending Litigation. There is not now pending or, to Developer's knowledge,
threatened against or affecting Developer or the Site any claim, investigation, action, suit or
proceeding at law, or in equity, or before any court or administrative agency which, if adversely
determined,would materially impair or affect the Site or Developer.
(g) Compliance. Developer has examined and is familiar with all conditions,
restrictions, and reservations affecting the Site and Project. The Project will in all material
respects conform to and comply with all of the requirements of said conditions, restrictions, and
reservations and all construction and installation of the Project shall conform in all material and
all legally required respects with applicable ordinances and statutes, and shall be in accordance
with all requirements of the regulatory authorities having jurisdiction thereof.
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7. GENERAL PROVISIONS.
7.1 Nonliability of Agency and City Officials and Employees. No member, official,
employee, or contractor of Agency or City shall be personally liable to Developer in the event of
any default or breach by Agency or for any amount which may become due to Developer or on
any obligations under the terms of this Agreement.
7.2 Enforced Delay; Extension of Times of Performance. Time is of the essence in
the performance of each of the parties' respective obligations set forth in this Agreement. In
addition to specific provisions of this Agreement providing for extensions of time, no party shall
be deemed to be in default and times for performance hereunder shall be extended where delays
are due to war; insurrection; any form of labor dispute; lockouts; riots: floods; earthquakes; fires;
acts of God or of third parties; third party litigation; acts of a public enemy; referenda; acts of or
failures to act by governmental authorities (except that the failure of Agency to act as required
hereunder shall not excuse its performance); moratoria; epidemics; quarantine restrictions;
freight embargoes; unusually severe weather; inability to secure necessary labor, materials, or
tools; or other similar causes beyond the control and without the fault of the party claiming an
extension of time to perform; provided, however, that the party claiming the existence of a force
majeure delay and an extension of its obligation to perform shall notify the other party of the
nature of the matter causing the delay within thirty (30) days from the occurrence thereof; and,
provided further, that the extension of time shall be only for the period of the force majeure
delay. Notwithstanding the foregoing, in no event shall Developer be entitled to a force majeure
delay or delays with respect to its obligations to timely proceed with development of the Site due
to an inability to obtain financing or proceed with development as a result of general market or
economic conditions, interest rates, or other similar circumstances that make development
impossible, commercially impracticable, or infeasible.
Times of performance under this Agreement may be extended by mutual written
agreement of Agency and Developer. The Executive Director shall have the authority on behalf
of Agency to approve extensions of time, with the exception of any extension that would result
in the completion date for the Project being extended by more than one year.
7.3 Notices. All notices required to be delivered under this Agreement to the other
party must be in writing-and shall be effective (a)when personally delivered by the other party or
messenger or courier thereof; (b) three (3) business days after deposit in the United States mail,
registered or certified; (c) twenty-four (24) hours after deposit before the daily deadline time
with a reputable overnight courier or service; or (d) upon receipt of a facsimile transmission, in
each case postage fully prepaid and addressed to the respective parties as 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:
To Agency: Arroyo Grande Redevelopment Agency
214 East Branch Street
Arroyo Grande, CA 93421
Attn: Executive Director
Facsimile: (949) 361-6570
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Copy to: Rutan&Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: Kerra Carlson
Facsimile: (714) 546-9035
To Developer: People's Self-Help Housing Corporation
3533 Empleo Street
San Luis Obispo, CA 93401
Attn: Executive Director
Facsimile: (805) 544-1901
With a copy to: Gubb &Barshay,LLP
50 California Street, Suite 3155
San Francisco, CA 94111
Attn: Natalie Gubb,Esq.
Facsimile: (415) 781-6967
7.4 Inspection of Books and Records. Agency shall have the right at all reasonable
times upon at least 24 hours notice to inspect the books and records of Developer pertaining to
the Site and the Project as pertinent to the purposes of this Agreement.
7.5 Prohibition Against Assignment and Transfer. The qualifications and identity of
Developer are of particular concern to Agency. It is because of those qualifications and identity
that Agency has entered into this Agreement with Developer. Accordingly, except for a
Permitted Transfer(as defined below), Developer shall not,whether voluntarily, involuntarily, or
by operation of law, undergo any change in ownership or assign, transfer or convey all or any
part of this Agreement or any rights hereunder or in the Site or in the Project without Agency's
prior written approval. In considering whether it will grant approval, Agency shall consider
factors such as (a) whether the completion of the Project is jeopardized; (b) the financial credit,
strength, and capability of the proposed transferee to perform Developer's obligations hereunder,
including the operation of the affordable housing program; and (c) the proposed transferee's
experience and expertise in the planning, financing, development, ownership, and operation of
similar projects. In the absence of specific written agreement by Agency, no transfer by
Developer of all or any portion of its interest in the Site shall be deemed to relieve it or any
successor party from the obligation to complete the Project or any other obligations under this
Agreement. Any assignment of this Agreement must include the concurrent transfer of fee title
to the Site to the permitted assignee. Agency shall have the right to disapprove an assignment
and transfer if there is a default of Developer of this Agreement or any of the agreements
attached hereto or any event has occurred that would constitute a default with the giving of
notice or the passage of time.
Notwithstanding anything to the contrary contained in the Loan documents, the following
transfers are "Permitted Transfers" and shall not constitute a default under the Loan Documents:
(a) Any transfer to an entity controlled by Developer or an affiliate of
Developer, provided that, (i) Developer has submitted such entity's organizational
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documents to Agency, (ii) upon such transfer, the transferee, by an instrument in writing
prepared by Agency and in form recordable among the land records, shall expressly
assume the obligations of Developer under the Loan Documents; and (iii) the Title Policy
Transfer Condition is satisfied.
(b) Any transfer to a limited partnership or limited liability company (referred
to herein as the "Partnership") whose general partner or managing member is Developer
or an affiliate of Developer provided that, (i) Developer has submitted such entity's
organizational documents to Agency, (ii) upon such transfer, the transferee, by an
instrument in writing prepared by Agency and in form recordable among the land
records, shall expressly assume the obligations of Developer under the Loan Documents,
and(iii)the Title Policy Transfer Condition is satisfied.
Upon the assignment of the Loan Documents from Developer to a Partnership pursuant to
subdivision (b) above,the following also shall constitute Permitted Transfers:
(a) The admission of an investor limited partner of the Partnership for the
purposes of syndicating the low income housing tax credits for the Project. Agency
hereby approves the sale of limited partnership interests in the Partnership to the investor
limited partner, provided that: (i)the partnership or operating agreement of Developer is
first submitted to Agency and reasonably approved by Agency; and (ii) all documents
associated with the low income housing tax credit syndication and the admission of the
investor limited partner of Developer are submitted to Agency and are consistent with the
terms of the Loan Documents.
(b) Future transfers of the limited partner interest of the initial investor limited
partner in the Partnership provided that: (i) such transfers do not materially or adversely
affect the timing and amount of the limited partner capital contributions provided for in
and subject to the terms of the partnership or operating agreement approved by Agency;
and (ii) in subsequent transfers, an entity controlled or managed by the initial investor
limited partner retains a membership interest, manager role, or general partner interest in
the successor limited partner.
(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
acceptable to 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.
As used herein, the term "Title Policy Transfer Condition" shall mean Developer or the
transferee of the Permitted Transferee have caused the Title Company to provide to Agency, at
no cost to Agency, an endorsement to the Agency Title Policy to reflect the change in title to the
Property and confirming the priority of the Deed of Trust (or, if an endorsement is not available,
a new title insurance policy with the same title exceptions as reflected on the original title policy
and any additional exceptions approved by Agency in its sole discretion).
7.6 Interpretation. The section headings are for purposes of convenience only, and
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shall not be construed to limit or extend the meaning of this Agreement. All references to the
term"days" in this Agreement shall mean calendar days unless otherwise specifically indicated.
7.7 Entire Agreement, Waivers and Amendments. This Agreement integrates all of
the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations
and previous agreements between the parties with respect to all or any part of the subject matter
hereof. All waivers of the provisions of this Agreement must be in writing and signed by the
appropriate authorities of the party to be charged, and all amendments and modifications hereto
must be in writing and signed by the appropriate authorities of Agency and Developer.
7.8 Severability. If any term, provision, covenant, or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of
this Agreement shall not be affected thereby to the extent such remaining provisions are not
' rendered impractical to perform taking into consideration the purposes of this Agreement. In the
event that all or any portion of this Agreement is found to be unenforceable, this Agreement or
that portion which is found to be unenforceable shall be deemed to be a statement of intention by
the parties; and the parties further agree that in such event, and to the maximum extent permitted
by law, they shall take all steps necessary to comply with such procedures or requirements as
may be necessary in order to make valid this Agreement or that portion which is found to be
unenforceable.
7.9 Third Party Beneficiaries;Agency Right to Assign. Except as set forth in the next
sentence,nothing herein is intended to create any third party beneficiaries to this Agreement, and
no person or entity other than Agency and Developer, and the permitted successors and assigns
of each of them, shall be authorized to enforce the provisions of this Agreement. City is an
express third party beneficiary of this Agreement and shall have the right but not the obligation
to enforce the provisions hereof. Agency shall have the right to assign this Agreement to City at
any time and without the consenet of Developer.
7.10 Covenants Running with the Land. All conditions, covenants, and restrictions
contained in this Agreement shall be covenants running with the land, and shall, in any event,
and without regard to technical classification or designation, legal or otherwise, be, to the fullest
extent permitted by law and equity; binding for the benefit and in favor of, and enforceable by,
Agency and its successors and assigns, against Developer, its successors and assigns, to or of the
Site or any portion thereof or any interest therein, and any party in possession or occupancy of
said Site or portion thereof.
In amplification and not in restriction of the provisions set forth hereinabove, it is
intended and agreed that Agency shall be deemed a beneficiary of the agreements and covenants
provided hereinabove 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 Agency and such covenants shall run in favor of
Agency for the entire period during which such covenants shall be in force and effect, without
regard to whether Agency is or remains an owner of any land or interest therein to which such
covenants relate. Agency 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.
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' f
7.11 Agency Approvals and Actions. Agency shall maintain authority of this
Agreement and the authority to implement this Agreement through its Executive Director (or his
or her duly authorized representative). The Executive Director shall have the authority to make
approvals, issue interpretations, execute documents, waive provisions, and/or enter into
amendments of this Agreement, on behalf of Agency so long as such actions do not materially or
substantially change the uses or development permitted on the Site or add to the costs incurred or
to be incurred by Agency as specified herein. Such approvals, interpretations, waivers and/or
amendments may include extensions of time to perform as set forth in Section 7.2. All other
material and/or substantive interpretations, waivers, or amendments shall require 'the
consideration and action of the Agency Board.
7.12 Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement, without regard to conflict of interest
principles.
7.13 Counterparts. This Agreement may be executed in counterparts, each of which,
when both the parties hereto have signed this Agreement, shall be deemed to be an original, and
such counterparts shall constitute one and the same instrument.
7.14 Attachments. Attachments 1 through 7, inclusive, attached hereto are hereby
incorporated herein by reference as if set forth in full. Said Attachments are identified as
follows:
Attachment No. 1 Legal Description of Site
Attachment No. 2 Schedule of Performance
Attachment No. 3 Promissory Note Secured by Deed of Trust
Attachment No. 4 Deed of Trust
Attachment No. 5 Regulatory Agreement and Declaration of Covenants and
Restrictions
Attachment No. 6 Release of Construction Covenants
Attachment No. 7 Notice of Affordability Restrictions on Transfer of Property
538/024600-0011
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IN WITNESS WHEREOF, Agency and Developer have entered into this Agreement as
of the date set forth above.
"AGENCY"
ARROYO GRANDE REDEVELOPMENT
AGENCY, a public bo. , corporate and politic
By:
Its: C.
- ATTEST:
deism_ . .;. /
- . - Agency-�ec'etary,
APPROVED AS TO FORM:
7 &TUCP
Agency Counsel
"DEVELOPER"
PEOPLES' SELF-HELP HOUSING
CORPORATION, a California nonprofit
2lico . : on ,
Its:
By: ��-
Its: 5,
538/024600-0011
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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 1 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 11 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)
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ATTACHMENT NO. 2
SCHEDULE OF PERFORMANCE
ITEM OF PERFORMANCE TIME FOR PERFORMANCE
1. Developer submits to Agency evidence of No later than 10 days after the Effective
liability insurance (§ 3.6). Date.
2. Developer submits to Agency and City the No later than the earlier of(i) 18 months
final plans for the Project and all after the Effective Date, or(b) 60 days
applications for any required permits and after the Tax Credit Allocation Date.
entitlements (§ 3.2).
3. The parties exercise reasonable efforts to Within 90 days after a complete submittal.
complete the plan checks and submittals for
the final plans for the Project(§ 3.2).
4. Developer submits the Project Budget to Immediately upon the approval of the final
Agency for approval (§ 3.3). plans for the Project.
5. Developer delivers to Agency evidence of No later than the earlier of(i) 21 months
financial capability (§ 2.7). after the Effective Date, or(b) 90 days
after the Tax Credit Allocation Date.
6. Agency approves (or disapproves) Within 20 days after a complete submittal.
Developer's evidence of financial capability
(§ 2.7).
7. Developer submits to Agency evidence of Prior to commencement of any
property insurance (§ 3.6). development work on the Site.
8. Developer executes and delivers to Agency No later than 5 days after the date the
the Promissory Note,Deed of Trust, Predevelopment Funding Conditions in
Regulatory Agreement and Notice of subparagraphs (ii)-(viii) in Section 2.3(a)
Restrictions (§ 2.6). are satisfied and prior to any work on the
Site.
9. Agency executes the Regulatory Agreement Within 15 days after the satisfaction of the
and Notice of Restrictions and records said Predevelopment Funding Conditions and
documents together with the Deed of Trust prior to disbursement of any Agency Loan
(§ 2.6). proceeds.
10. Agency disburses the Agency Loan to From time to time after the
Developer for Predevelopment Expenses Predevelopment Funding Conditions are
(§2.4). satisfied, as Predevelopment Expenses are
incurred.
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ITEM OF PERFORMANCE TIME FOR PERFORMANCE
11. All of the Funding Conditions, including the No later than the Outside Funding
Construction Funding Conditions are Conditions Satisfaction Date,which is the
satisfied(§ 2.3). earlier of(i) 2 years after the Effective
Date, or(ii) 180 days after the Tax Credit
Allocation Date.
12. Agency disburses the Agency Loan to From time to time after the Construction
Developer for Construction Expenses (§2.4). Funding Conditions are satisfied and
development of the Project has
commenced, as Construction Expenses are
incurred.
13. Developer commences construction of the No later than the date that is 15 days after
Project(§ 3.3). the date all of the Funding Conditions are
satisfied, but in no event later than the
Outside Funding Conditions Satisfaction
Date.
14. Developer completes construction of Project Within 1 year after the date Developer is
(§ 3.3). required to commence development.
It is understood that the foregoing Schedule is subject to all of the terms and conditions of
the text of the Agreement. The summary of the items of performance in this Schedule is not
intended to supersede or modify the more complete description in the text; in the event of any
conflict or inconsistency between this Schedule and the text of the Agreement, the text shall
govern.
Times of performance under the Agreement may be extended by mutual written
agreement of Agency and Developer. The Executive Director of Agency shall have the authority
on behalf of Agency to approve extensions of time, with the exception of any extension that
would result in the,completion date for the Project being extended by more than one year.
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ATTACHMENT NO. 3
PROMISSORY NOTE SECURED BY DEED OF TRUST
WITH ASSIGNMENT OF RENTS
[Attached]
538/024600-0011
1129376.05 a03/04/11
PROMISSORY NOTE SECURED BY DEED OF TRUST
, 201 ("Note Date")
FOR VALUE RECEIVED, the undersigned, PEOPLES' SELF-HELP HOUSING
CORPORATION, a California nonprofit public benefit corporation ("Borrower"), promises to
pay to the ARROYO GRANDE REDEVELOPMENT AGENCY, a public body, corporate and
politic ("Agency"), the sum of Nine Hundred Thirty Thousand Dollars ($930,000.00), together
with interest, plus such other costs, charges, and fees which may be owing from time to time, all
subject to the terms, conditions, and provisions hereinafter set forth in this Promissory Note
Secured by Deed of Trust("Note").
Reference is made to the following (which, together with this Note are sometimes
collectively referred to as the "Loan Documents"):
(i) The Affordable Housing and Loan Agreement, with all Attachments
thereto, by and between Agency and Borrower, dated March 8, 2011, as
may be amended from time to time ("Loan Agreement"),which sets forth
terms and conditions for Borrower's redevelopment of that certain real
property located in Arroyo Grande, California, more particularly described
in the legal description attached as Attachment No. 1 to the Loan
Agreement ("Site"). Capitalized terms used herein and not otherwise
defined shall have the same meaning as set forth in the Loan Agreement.
(ii) The Regulatory Agreement and Declaration of Covenants and Restrictions
by and between Agency and Borrower, in the form attached as Attachment
No. 5 to the Loan Agreement, and recorded against the Site on or about
the date of this Note, as may be amended from time to time ("Regulatory
Agreement").
(iii) The Deed of Trust With Assignment of Rents that shall be executed by
Borrower for the benefit of Agency securing the Agency Loan, and
recorded against the Site on or about the date of this Note in the Official
Records of San Luis Obispo County, California, as may be amended from
time to time ("Deed of Trust").
1. Loan Amount; Interest. The principal amount of the Agency's loan to Borrower
is Nine Hundred Thirty Thousand Dollars ($930,000.00) ("Agency Loan"). Simple interest
shall accrue on the outstanding principal balance at the rate of three percent (3%) per annum, or
the maximum legal limit, whichever is less, from the date first written above until accrued
interest and unpaid principal are paid in full. The Agency Loan shall be disbursed to Borrower
in accordance with the terms set forth in the Loan Agreement.
538/024600-0011
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J
2. Term of Note; Repayment of Loan Amount. Commencing upon the
completion of the Project, but in no event later than the date that is one year after the Note Date,
Borrower shall make annual payments to Agency in an amount equal to fifty percent (50%) of
the Project Cash Flow for the calendar year (or partial calendar year in the case of the first and
last year). Payments for each year shall be made on March 1 of the subsequent year. Any
unpaid principal and accrued interest shall be due and payable in a single lump-sum payment on
the date that is fifty-five (55) years after the Note Date.
Notwithstanding the foregoing, if all of the Funding Conditions are not satisfied by the
Outside Funding Conditions Satisfaction Date and the Loan Agreement is terminated pursuant to
Section 2.3 of the Loan Agreement, the Agency Loan and all other amounts owing hereunder
and all indebtedness secured by the Deed of Trust shall be due by Borrower to Agency within
thirty (30) days after the date of such termination.
As used herein, the following terms shall have the meanings set forth below:
"Gross Income" shall mean the total rental income and all other revenues or income
received by the Borrower or its successors or assigns in connection with the Project or any
portion thereof, and for services provided thereon, whether or not denominated rent, including
without limitation, rent, cost reimbursements, parking charges and amounts received by, payable
to, or payable to the order of Borrower, but excluding security deposits, loan proceeds, capital
contributions and similar advances.
"Operating Expenses" shall mean, subject to the limitations set forth below, actual,
reasonable and customary costs, fees and expenses directly incurred and for which payment has
been made and which are attributable to the operation, maintenance, and management of the
Project, except expenses reimbursed by insurance, to the extent so reimbursed, and federal and
state taxes on net income, consisting of only the following (and such additional items, if any, as
to which the prior written approval of the Executive Director is first obtained,with such approval
to be granted, granted subject to conditions, or refused in the reasonable discretion of the
Executive Director):
(I) all insurance premiums, including, without limitation, premiums for fire,
extended coverage, earthquake and flood insurance, liability insurance, boiler and
machinery insurance and business interruption and loss of rents insurance and any other
insurance required by any third party institutional lender that has made a loan to
Borrower and who holds a lien upon any portion of the Site as security for such loan
("Mortgagee");
(II) all special assessments, levies and charges on the Site made by any
governmental entity, political subdivision, maintenance district, and any like entity,
payable by Borrower, and all real and personal property taxes, fees, assessments and
charges, water and sewer rates and charges, and other similar governmental charges and
impositions, whether general or special, ordinary or extraordinary, which may be levied,
assessed, charged or imposed, or may become a lien or charge upon the Site or any part
or parts thereof, or upon Borrower's interest in the Site;
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(III) all costs and expenses of ownership, operation, management, maintenance
and repair of the Project (including walkways, parking areas and landscaped areas),
including, but not limited to, the following costs by way of illustration: (i) utility
expenses (including heating, ventilating, and air conditioning); (ii) labor costs, costs of
materials, and contractors' fees incurred in the management, maintenance, repair and/or
operation of the Project; (iii) maintenance, repair and component replacement of
mechanical, plumbing, heating and air conditioning systems and elevators (whether
considered an operating or capitalized expense); (iv) property management fees not to
exceed each calendar year a cumulative total of $56.00 per restricted unit (which may
increase by 3% annually); (v) accounting; (vi) janitorial; (vii) security; (viii) any
partnership management fee paid to a general partner in Borrower not to exceed
$ per calendar year (which limit may increase annually by %); (ix)
any asset management fee paid to a limited partner in Borrower not to exceed
$ calendar year (which limit may increase annually by _%); (x) a social
services fee payable to the general partner of Borrower (or an affiliate of the general
partner of Borrower) in the amount of$ per unit per calendar year (which
limit may increase annually by %); and (xi) payments of a developer fee not to
exceed Dollars ($ ) in the aggregate, to the
extent such developer fee is not paid from capital contributions to Borrower or from
financing proceeds;
(IV) debt service on indebtedness secured by a mortgage or deed of trust (other
than the indebtedness payable from Project Cash Flow) securing a loan the proceeds of
which are used to repair, restore, maintain, improve or alter the improvements on the Site,
if Agency has have approved the amount and terms of such loan in the exercise of its
reasonable discretion and the lender is not an affiliate of Borrower or related party; and
(V) payments into operating and replacement reserves otherwise required by a
Mortgagee or investor limited partner.
Notwithstanding anything to the contrary in the foregoing, Operating Expenses shall not
exceed the reasonable cost thereof as measured by fees paid to third parties rendering similar
services, Operating Expenses shall not include any items paid from any of the reserves described
in subsection (V) above, and Operating Expenses shall not include non-cash expenses, including
without limitation, depreciation. Legal and accounting fees shall only be included in Operating
Expenses to the extent directly related to the operation, maintenance, improvement or leasing of
the Project, drafting and negotiating leases and construction contracts and financing and/or
partnership documents, calculating tenant reimbursements, prosecuting unlawful detainer
actions, preparation of tax returns, accounting reports and audits, reports and studies required by
any Mortgagee or any governmental agency, appeals in respect of taxes, assessments, or income
and franchise taxes, and the like; provided, however, that costs associated with appeals of real
property taxes and assessments shall be included in Operating Expenses only if Agency and any
other party with approval rights have approved Borrower's undertaking the applicable appeal in
writing in advance (such approval not to unreasonably withheld, conditioned or delayed).
"Project Cash Flow" shall mean, with respect to any calendar year, the amount of Gross
Income for such calendar year reduced by the Operating Expenses for such calendar year,
determined on a basis consistent with prior periods in accordance with the cash method of
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accounting, and otherwise in accordance with generally accepted business and accounting
principles.
3. Records. For the purposes of ascertaining the amount of Project Cash Flow,
Borrower shall prepare and keep or cause to be prepared and kept on the Site or at Borrower's
principal place of business if located in Arroyo Grande, California (or at such other location
approved by Agency, which approval shall not be unreasonably withheld) for a period of not less
than twenty-four (24) months following the end of each calendar year, adequate records for the
computation of Gross Income and Operating Expenses.
4. Reports: Borrower shall submit to Agency on or before March 1 of each year,
together with the remittance of the Project Cash Flow payment due, a written audit report
prepared and certified by an independent professional accountant of Borrower's choosing, and
acknowledged and signed by Borrower (or if Borrower is a corporation or a partnership, by a
duly authorized corporate officer or general partner of Borrower) to be true and correct, showing
in reasonable, accurate detail the amount of Project Cash Flow for the immediately preceding
calendar year. The reports and certificates referred to herein shall be in such form and style and
contain such details and breakdown as Agency may deem reasonably acceptable. The
acceptance by Agency of payments shall be without prejudice to Agency's right to an
examination of the books and records of Borrower in order to verify the amount of Project Cash
Flow. If Borrower fails to prepare and deliver promptly any required audit report, Agency shall
have the right, at Borrower's expense, to make an audit of all books and records of Borrower,
including its respective bank accounts, which in any way pertain to or show Project Cash Flow,
and to prepare the report or reports which Borrower has failed to prepare and deliver. Borrower
shall give Agency access to such books and records at all reasonable times upon at least 24 hours
notice for purposes of preparing any such report.
5. Audit. From time to time and at any time, Agency or Agency's representative
may examine any records required to be maintained under Section 3 during regular business
hours upon not less than seventy-two (72) hours written notice for the purpose of investigating
and verifying the accuracy of any statement of Project Cash Flow. Agency may from time to
time and at any time, upon reasonable notice, cause an audit of Borrower's books and records to
be made by a person or persons of Agency's selection and, if any statements of Project Cash
Flow made to Agency shall be found to be inaccurate, one party shall pay to the other on demand
such sums as may be necessary to settle in full the actual payment that should have been paid to
Agency for the calendar years covered by such inaccurate statement or statements. If said audit
shall disclose an inaccuracy which resulted in an underpayment to Agency greater than five
percent (5%) for the applicable period, then Borrower shall immediately pay to Agency the cost
of such audit; otherwise,the cost of such audit shall be paid by Agency.
6. Additional Terms of Payment.
(a) Late Charge. If Borrower fails to timely make a required payment within
ten(10) days following the due date of such payment, interest at the rate of ten percent(10%)per
annum or the maximum legal rate then applicable, whichever is less, shall accrue on the
outstanding amount due commencing from the date payment was due.
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(b) Prepayment. Borrower shall have the right to prepay all or any portion of
this Note at any time without penalty.
(c) Application of Payment. All payments shall be first credited to costs,
charges, and fees which may be owing from time to time, and then to accrued interest and then to
reduction of the principal. Payment shall be made in lawful money of the United States.
(d) Place of Payment. Payments shall be made to Agency at 214 East Branch
Street, Arroyo Grande, California 93421 or at such other address as Agency or the holder of this
Note may direct pursuant to written notice delivered to Borrower.
7. Default. Borrower shall be deemed in default of this Note in the event (a)
Borrower fails to timely make a required payment within ten (10) days following the due date of
any payment due hereunder, or (b) Borrower is in default of any of the other terms of this Note
and such default is not cured within thirty (30) days after Borrower's receipt of written notice
from Agency specifying the event constituting the default, provided, however, that if the default
cannot be corrected within thirty (30) days, it shall not constitute a default if corrective action is
instituted by Borrower within such period and diligently pursued until the default is corrected,
and provided further that any such default is cured within ninety (90) days of receipt of written
notice of such default, or (c)Borrower is in default of the Loan Agreement,the Deed of Trust, or
the Regulatory Agreement, and fails to cure such default under the terms of the applicable
agreement,within the notice and cure periods set forth therein, it being understood and agreed by
Borrower that a default of any of the foregoing agreements shall be a default of this Note, or
(d) Borrower is in default on any obligations under any documents relating to any other
financing that is secured by the Site and the default is not cured within any cure period set forth
in the applicable document. During any period in which there is a tax credit investor admitted as
a limited partner of Borrower, in the event Borrower fails to cure a default within the applicable
cure period set forth above, or if such breach is of a nature that it cannot be cured within the cure
period set forth above and Borrower fails to commence to cure within said cure period and
diligently complete such cure within a reasonable time thereafter but in no event later than ninety
(90) days, Borrower's limited partner may itself tender a cure and/or remove and replace the
general partner(s) of Borrower with a substitute general partner, as permitted in the Deed of
Trust,which substitute general partner shall effect a cure within a reasonable time thereafter.
8. Right of Acceleration. Agency has the right to accelerate payment of the
Agency Loan and all other amounts payable hereunder and the indebtedness secured by the Deed
of Trust upon the occurrence of any of the following: (a) directly or indirectly, voluntarily or
involuntarily, sell, assign, transfer, dispose of, alienate, encumber, lease, or agree to sell, assign,
transfer, dispose of, alienate, encumber, or lease all or any portion of any interest in the Site
(excluding the lease of the units on the Site in accordance with the Regulatory Agreement, the
lien of the Permitted Encumbrances, a Permitted Transfer, and any other assignment, transfer, or
encumbrance approved in writing by Agency); or (b) refinance any lien or encumbrance for a
loan amount in excess of the then outstanding sum secured by such lien or encumbrance or
extend the term of any loan secured by any such lien or further encumber the Site; or (c) default
on this Note as set forth in Section 7 which is not cured within any applicable cure period as set
forth therein.
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9. Collection Costs; Litigation. If this Note is not paid when due, whether at
maturity or by acceleration, Borrower-promises to pay all costs of collection, including, but not
limited to, reasonable attorneys' fees and all expenses incurred in connection with the protection
or realization of the collateral securing the payment hereof or enforcement of any guarantee,
incurred by Agency on account of such collection, whether or not suit is filed hereon. In any
litigation between the parties arising out of this Note, the Superior Court of the State of
California in and for the County of San Luis Obispo shall have exclusive jurisdiction.
10. Waivers. To the extent permitted by law,Borrower and all endorsers, guarantors,
and persons liable or to become liable on this Note waive presentment, protest, and demand,
notice of protest, demand, and dishonor and nonpayment of this Note and any 'and all other
notices or'matters of a like nature, and consent to any and all renewals and extensions near the
time of payment hereof and agree further that at any time and from time to time without notice,
the terms of payment herein may be modified or the security described in any documents
securing this Note released in whole or in part or increased, changed, or exchanged by agreement
between Agency and any owner of the premises affected by said documents securing this Note,
without in any way affecting the liability of any party to this Note or any persons liable or to
become liable with respect to any indebtedness evidenced hereby.
11. No Waiver by Agency. No waiver of any breach, default, or failure of condition
under the terms of this Note or the Deed of Trust or the obligations secured thereby shall be
implied from any failure of Agency to take, or any delay be implied from any failure by Agency
in taking action with respect to such breach, default, or failure from any prior waiver of any
similar or unrelated breach, default, or failure.
12. Usury. Notwithstanding any provision in this Note, the Deed of Trust, or other
document securing same, the total liability for payment of any interest shall not exceed the limit
now imposed by applicable laws of the State of California.
13. Not Assignable. This Note shall not be assignable or assumable without the
express written consent of Agency, which may be given or withheld in Agency's sole and
absolute discretion.
14. Severability; Governing Law; Amendment. The unenforceability or invalidity
of any provision or provisions of this Note as to any persons or circumstances shall not render
that provision or those provisions unenforceable or invalid as to any other provisions or
circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable.
This Note has been executed and delivered by Borrower in the State of California and is to be
governed and construed in accordance with the laws thereof. Neither this Note nor any term
hereof may be waived, amended, discharged, modified, changed, or terminated orally; nor shall
any amendment of any provision hereof be effective except by an instrument in writing signed
by Borrower and Agency.
15. Joint and Several Obligations. If the Borrower under this Note is comprised of
one or more persons or entities, the obligations and liabilities of the Borrower hereunder shall be
joint and several.
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16. Nonrecourse Obligation. Borrower shall not have any personal liability under
this Note or any of the other Loan Documents to pay the indebtedness evidenced under this Note,
and any judgment, decree or order for the payment of money obtained in any action to enforce
the obligation of Borrower to pay the Agency Loan shall be enforceable against Borrower only
to the extent of Borrower's interest in the Site. The foregoing shall not apply to the extent
Borrower no longer retains an interest in the Site. Nothing contained in this Section 16 shall in
any manner or way constitute or be deemed a release of the debt evidenced by this Note or
otherwise affect or impair the enforceability against Borrower of the liens, deeds of trust,
assignments, rights and security interests created by the Deed of Trust or any other instrument or
agreement evidencing, securing or related to the indebtedness evidenced by this Note. Nothing
in this Section 16 shall: (a)preclude Agency from foreclosing the lien of the Deed of Trust or
from enforcing any of its rights or remedies in law or in equity against Borrower or its assets
except as stated in this Section 16; (b) impair, in any manner, any right, remedy or recourse
Agency may have against any party executing a guaranty or indemnity or any obligor of a
performance or payment bond furnished under the Loan Documents pursuant to such
performance or payment bond; (c) impair, in any manner, any right, remedy or recourse Agency
may have against Borrower for fraud, bad faith waste or an intentional or knowing breach of any
of the representations and warranties contained in any of the Loan Documents; (d) impair, in any
manner, any right, remedy or recourse Agency may have against Borrower for indemnification
under any of the Loan Documents; (e) impair, in any manner, any right, remedy or recourse
Agency may have against Borrower for Borrower's failure to procure or maintain policies of
insurance required by Agency to the extent of any loss proceeds which would have been
generated by an uninsured loss which Borrower was required to insure under the Loan
Documents; or (f) impair, in any manner, any right, remedy or recourse Agency may have
against Borrower for any prohibited sale, transfer, conveyance or encumbrance in breach of any
of the Loan Documents.
[signatures on next page]
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IN WITNESS WHEREOF,Borrower has executed this Note as of the date first above
written.
"BORROWER"
PEOPLES' SELF-HELP HOUSING
CORPORATION,'a California nonprofit
public benefit corporation
By:
Its:
By:
Its:
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ATTACHMENT NO. 4
DEED OF TRUST WITH ASSIGNMENT OF RENTS
[Attached]
538/024600-0011
1129376.05 a03/04/11
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Arroyo Grande Redevelopment Agency
214 East Branch Street
Arroyo Grande, CA 93421
Attn: Agency Secretary
(SPACE ABOVE FOR RECORDER'S USE)
This Deed of Trust is recorded at the request and for the
benefit of the Arroyo Grande Redevelopment Agency and is
exempt from the payment of a recording fee pursuant to
Government Code Sections 6103 and 27383.
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust Contains an Acceleration Clause)
THIS DEED OF TRUST is made this day of , 201_, between
PEOPLES' SELF-HELP HOUSING CORPORATION, a California nonprofit public benefit
corporation ("Trustor"), whose address is 3533 Empleo Street, San Luis Obispo, CA 93401,
FIRST AMERICAN TITLE INSURANCE COMPANY ("Trustee"), and the ARROYO
GRANDE REDEVELOPMENT AGENCY, a public body, corporate and politic
("Beneficiary").
1. Grant In Trust. For the purposes and upon the terms and conditions in this Deed
of Trust, Trustor grants,transfers, and assigns to Trustee, in trust, with power of sale and right of
entry and possession, the following property and any interest therein (collectively, the "Trust
Estate"): (i)the real property located in the City of Arroyo Grande, County of San Luis Obispo,
State of California described in Exhibit "A" attached hereto and incorporated herein by this
reference ("Real Property"); (ii) all buildings and other improvements and structures now or
hereafter located on the Real Property (collectively, the "Improvements" and together with the
Real Property shall sometimes be referred to as the "Property"); (iii) all existing and future
leases, subleases, subtenancies, licenses, agreements and concessions relating to the use,
occupancy or enjoyment of all or any part of the Property, together with any and all guaranties
and other agreements relating to or made in connection with any of the foregoing (individually, a
"Lease", and collectively, the "Leases"); and (iv) all rents, issues, income, revenues, royalties,
profits, proceeds and earnings now or hereafter payable with respect to or otherwise derived
from the ownership, use, management, operation, leasing or occupancy of the Property,
including, without limitation, cash or security deposited under any of the Leases to secure the
performance by the lessees of their obligations thereunder(collectively,the"Rents").
2. Obligations Secured. Trustor makes this grant and assignment for the purpose of
securing the following: (i) payment of the sum of Nine Hundred Thirty Thousand Dollars
($930,000.00), with interest thereon according to the terms of a promissory note or notes of even
date herewith made to Trustor, payable to the order of Beneficiary, and any extensions or
renewals thereof(the "Note"), and all other amounts due under the Note; (ii) Trustor's payment
and performance obligations under this Deed of Trust; and (iii) payment of additional sums and
interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when
evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.
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3. Right of Acceleration upon Sale/Encumbrance, Default. In the event Trustor
shall: (i) directly or indirectly, voluntarily or involuntarily, sell, assign, transfer, dispose of,
alienate, encumber, lease, or agree to sell, assign, transfer, dispose of, alienate, encumber, or
lease all or any portion of any interest in the Property (excluding the lease of the units on the
Property in accordance with that certain Regulatory Agreement and Declaration of Covenants
and Restrictions between Trustor and Beneficiary dated on or about the date hereof and recorded
against the Real Property ("Regulatory Agreement"), the lien of the Permitted Encumbrances, a
Permitted Transfer, and any other assignment, transfer, or encumbrance approved in writing by
Beneficiary); or (ii) refinance any lien or encumbrance for a loan amount in excess of the then
outstanding sum secured by such lien or encumbrance or extend the term of any loan secured by
any such lien or further encumber the Property; or (iii) default on any of its obligations set forth
in the Loan Documents and fail to cure the default within the applicable cure period, or (d)
default on any obligations under any documents relating to any other financing that is secured by
the Property, then, or at any time thereafter, Beneficiary, at its option, may declare the entire
indebtedness evidenced secured by this Deed of Trust immediately due and payable. This term
"Loan Documents" shall mean this Deed of Trust, the Note, the Affordable Housing and Loan
Agreement between Trustor and Beneficiary dated March 8, 2011 ("Loan Agreement"), and the
Regulatory Agreement, as such agreements may be amended from time to time. Any capitalized
terms contained in this Deed of Trust which are not defined herein shall have the meaning given
in the Loan Agreement, unless expressly provided to the contrary.
4. Assignment of Rents and Performance of Leases.
4.1 Assignment of Rents and Leases. Trustor hereby irrevocably absolutely
and unconditionally assigns and transfers to Beneficiary all of Trustor's right, title and interest in
and to the Leases and the Rents; provided, however, that so long as no Event of Default (as
defined in Section 5.1 below)has occurred and is continuing, Trustor shall have the right under a
license granted hereby to collect and receive all Rents as trustee for the benefit of Beneficiary
and to apply the amounts so collected first to the payment of costs and expenses associated with
the ownership maintenance, operation and leasing of the Property, including, principal, interest
and all other amounts required to be paid under the Loan Documents, before using or applying
such Rents for any other purpose. No Rents or such other income shall be distributed or paid to
Trustor, unless such costs and expenses which are then due have been paid in full. Thereafter, so
long as no Event of Default has occurred and is continuing, the balance may be distributed to
Trustor. If an Event of Default has occurred and is continuing, Trustor's right to collect and
receive the Rents under the license granted hereby shall cease and the license shall be revoked
automatically and, pursuant to Section 5.2.1 hereof, Beneficiary shall have the sole right, with or
without taking possession of the Property, to collect all Rents; provided, however, if such Event
of Default is cured, then such license shall be automatically reinstated. This is an absolute
assignment and not an assignment for security only.
4.2 Covenants Regarding Leases. Trustor shall not,without the prior written
consent of Beneficiary, (i) collect any rent from any lessee for a period of more than one (1)
month in advance, or (ii) execute any further assignment of any of its right, title and interest in
the Leases and the Rents, except in connection with financing otherwise approved by the
Beneficiary. Trustor shall (i) observe, perform and discharge each and every obligation, term,
covenant, condition and agreement of Trustor under the Leases in all material respects, (ii)
enforce the performance of each and every obligation, term, covenant, condition and agreement
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in the Leases to be performed by any lessee or guarantor thereof in all material respects, (iii) use
good faith commercially reasonable efforts to keep the Property leased at a good and sufficient
rental (but at affordable rents in accordance with the Regulatory Agreement) and on such other .
terms and conditions asare reasonably acceptable to Beneficiary, and (iv) execute and deliver to
Beneficiary upon demand, at any time and from time to time, any and all assignments and other
instruments which Beneficiary may deem reasonably advisable to carry out the true purposes and
intent of the assignment set forth in Section 4.1 above.
5. Events of Default and Remedies.
5.1 Events of Default. Any of the following events shall, at Beneficiary's
option, constitute an event of default(an"Event of Default")hereunder:
5.1.1 Failure to Pay. The failure of Trustor to pay (i) within ten (10)
days of its due date, any installment of principal or interest under the Note (except at maturity,
by acceleration or as part of a prepayment hereunder); (ii) all outstanding principal and accrued
interest under the Note at maturity, by acceleration or as part of a prepayment thereunder; or (ii)
within ten (10) days after written notice that same is due, any sum as provided in this Deed of
Trust or any other Loan Document or any other instrument or agreement secured hereby (other
than as described in the foregoing (i) and(ii)).
5.1.2 Failure to Perform. The failure of Trustor to promptly and
completely observe or perform any term, condition, covenant, agreement or obligation contained
in this Deed of Trust, any other Loan Document or any other instrument or agreement secured
hereby, and the continuation of such failure following the expiration of any applicable notice,
cure or grace period, if any, provided for therein or herein; provided, however, that in the event
no cure or grace period is otherwise provided for herein or therein, such failure shall not be an
Event of Default hereunder if Trustor observes or performs such term, condition, covenant,
agreement or obligation within thirty (30) days of receipt of written notice from Beneficiary of
Trustor's failure to observe or perform any such term, condition, covenant, agreement or
obligation (or if not reasonably susceptible of cure within thirty (30) days, then for a reasonable
time thereafter provided the cure is commenced in thirty (30) days and diligently and
continuously prosecuted to a cure within ninety (90) additional days thereafter).
5.1.3 Other Defaults. The occurrence of any "default" or "Event of
Default" under any of the other Loan Documents (as defined therein) or any other instrument or
agreement secured hereby and the continuation of such"default" or"Event of Default" following
the expiration of any applicable notice, cure or grace period, if any, provided for in such other
Loan Document or such other instrument or agreement secured hereby.
5.1.4 Limited Partner Cure Rights. During any period in which there
is a tax credit investor admitted as a limited partner of Trustor, in the event Trustor fails to
commence or complete a cure of a Trustor default within any applicable cure period set forth
above and such limited partner notifies Beneficiary in writing prior to the expiration of the
required time period to commence the curing of the default that the limited partner will cure the
default (or if Trustor timey commences the cure but fails to compete the cure within the
applicable cure period, the notice shall be provided before the expiration of the cure period),then
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the cure period provided for any monetary default shall be extended by ten (10) days and the
cure period provided for any non-monetary default shall be extended by thirty (30) days.
5.2 Remedies. During the existence of any Event of Default, Beneficiary
may, at its option, declare all indebtedness secured hereby, and the same shall thereupon become,
immediately due and payable without any presentment, demand, protest or notice of any kind.
Thereafter, Beneficiary may, at its option:
5.2.1 Termination of License. Subject to the provisions of Section 5.1
hereof, terminate Trustor's right and license to collect the Rents, and either in person or by agent,
with or without bringing any action or proceeding, or by a receiver appointed by a court and
without regard to the adequacy of its security, enter upon and take possession of the Trust Estate
or any part thereof, in its own name or in the name of Trustee, and do any acts which it deems
necessary or desirable to preserve the value, marketability or rentability of the Trust Estate, or
any part thereof or interest therein, make, modify, enforce, cancel or accept the surrender of any
Lease, increase the income therefrom or protect the security hereof and, with or without taking
possession of the Trust Estate, sue for or otherwise collect the Rents, including those past due
and unpaid, and apply the same, less reasonable, actual, out-of-pocket costs and expenses of
operation and collection, including, without limitation, reasonable, actual, out-of-pocket
attorneys' fees, upon any indebtedness secured hereby, all in such order as Beneficiary may
determine. The entering upon and taking possession of all or any portion of the Trust Estate,the
collection of such Rents and the application thereof as aforesaid, or any of such acts, shall not
cure or waive any Event of Default or recorded notice of default hereunder or invalidate any
notice or act done in response to such Event of Default or pursuant to such notice of default and,
notwithstanding the continuance in possession of all or any portion of the Trust Estate or the
collection, receipt and application of Rents, Trustee or Beneficiary shall be entitled to exercise
every right provided for in any of the Loan Documents or by law during the existence of any
Event of Default, including the right to exercise the power of sale. Failure of Beneficiary at any
time, or from time to time, to collect the Rents shall not in any manner affect the subsequent
enforcement of Beneficiary of the right to collect the same.
5.2.2 Appointment of Receiver. As a matter of right and without notice
to Trustor or anyone claiming under Trustor, and without regard to the then value of the Trust
Estate or the interest of Trustor therein, to apply to any court having jurisdiction to appoint a
receiver or receivers of the Trust Estate, and Trustor hereby irrevocably consents to such
appointment and waives notice of any application therefor. Any such receiver or receivers shall
have all the usual powers and duties of receivers in like or similar cases and all the powers and
duties of Beneficiary in case of entry as provided in this Deed of Trust and shall continue as such
and exercise all such powers until the later of(i) the date of confirmation of sale of the Trust
Estate, (ii) the disbursement of all proceeds of the Trust Estate collected by such receiver and the
payment of all expenses incurred in connection therewith, and (iii) the termination of such
receivership with the consent of Beneficiary or pursuant to an order by a court of competent
jurisdiction.
5.2.4 Judicial Foreclosure of Deed of Trust. Commence an action to
foreclose this Deed of Trust as a mortgage, or specifically enforce any of the covenants hereof.
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i
5.2.5 Power of Sale. Deliver to Trustee a written declaration of default
and demand for sale, and a written notice of default and election to cause Trustor's interest in the
Trust Estate or any portion thereof to be sold, which notice Trustee or Beneficiary shall cause to
be transmitted and recorded, if applicable, in accordance with governing law. Upon receipt of
such notice from Beneficiary, Trustee shall cause to be recorded, published and delivered to
Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of
Trust. Trustee shall, without demand on Trustor or Obligor, after lapse of such time as may then
be required by law and after recordation of such Notice of Default and after Notice of Sale
having been given as required by law, sell the Trust Estate at the time and place of sale fixed by
it in said Notice of Sale, either as a whole, or in separate lots or parcels or items as Beneficiary
shall deem expedient, and in such order as it may determine, at public auction to the highest
bidder for cash in lawful money of the United States payable at the time of sale. Trustor hereby
expressly waives any right which it may have to direct the order in which any of the Trust Estate
may be sold when it consists of more than one lot or parcel, and such order of sale, whether in a
single sale or in multiple sales held on different days or at different times, shall be at the sole
discretion of Beneficiary. Trustee shall deliver to such purchaser or purchasers thereof its good
and sufficient deed or deeds conveying the property so sold, but without any covenant or
warranty, express or implied. The recitals in such deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor,
Trustee or Beneficiary, may purchase at such sale to the extent permitted by law. After
deducting all costs, fees and expenses of Trustee and of this Deed of Trust and all reasonable,
actual out-of-pocket costs, fees and expenses of Beneficiary, including reasonable, actual, out-of-
pocket costs of evidence of title, and attorneys' fees of Trustee and Beneficiary, in connection
with such sale, and subject to applicable law, Trustee shall apply, in the following priority, the
proceeds of sale to payment of: (i) first, all sums expended under the terms hereof, not then
repaid, with interest thereon according to the terms of the Debt Instrument, (ii) second, all other
sums then secured hereby, in such order of priority and in such proportion as Beneficiary in its
sole discretion may elect, and (iii) the remainder, if any, to the person or persons legally entitled
thereto. Subject to applicable law, Trustee may postpone the sale of all or any portion of the
Trust Estate by public announcement at the time and place of such sale, and from time to time
thereafter may postpone such sale by public announcement at the time fixed by the preceding
postponement or subsequently noticed sale, and without further notice make such sale at the time
fixed by the last postponement, or may, in its discretion, give a new notice of sale.
5.2.6 Other Remedies. Exercise all other rights and remedies provided
herein, in any Loan Document or other document or agreement now or hereafter securing all or
any portion of the obligations secured hereby, or provided by law. During the existence of an
Event of Default hereunder, Beneficiary may proceed in any sequence to exercise its rights
hereunder with respect to all or any portion of the Trust Estate.
5.3 Remedies Not Exclusive; Waiver. No remedy herein conferred upon or
reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by
law provided or permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Trustee or Beneficiary, or to which
either of them may be otherwise entitled, may be exercised concurrently or independently, from
time to time and as often as may be deemed expedient by Trustee or Beneficiary. If there exists
additional security for the obligations secured hereby, Beneficiary, at its sole option, and without
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limiting or affecting any of the rights or remedies hereunder, may exercise any of the rights or
remedies to which it may be entitled hereunder either concurrently with whatever rights it may
have in connection with such other security or in such order and in such manner as Beneficiary
may deem fit without waiving any rights with respect to such other security.
6. Actions Affecting Property. Trustor shall give Beneficiary and Trustee prompt
written notice of the assertion of any claim with respect to, or the filing of any action or
proceeding purporting to affect the Property, the security hereof or the rights or powers of
Beneficiary or Trustee. Trustor shall appear in and contest any such action or proceeding and
shall pay all costs and expenses, including cost of evidence of title and attorney's fees, in any
such action or proceeding.
7. Beneficiary Expenditures. If any action or proceeding is commenced that would
materially affect Beneficiary's interest in the Property, or if Trustor fails to pay any indebtedness
secured by the Property or that could result in a lien being recorded against the Property, or if
Trustor fails to comply with any provision of this Deed of Trust or any Loan Documents,
including but not limited to Trustor's failure to discharge or pay when due any amounts Trustor
is required to discharge or pay under this Deed of Trust or the Loan Documents, Beneficiary on
Trustor's behalf may (but shall not be obligated to) take any action that Beneficiary deems
appropriate, including but not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Property and paying all costs
for insuring, maintaining and preserving the Property. All such expenses, together with interest
thereon from the date of such expenditures at the rate of ten percent (10%) per annum or the
maximum legal rate then applicable, whichever is less ("Default Interest Rate"), from the date
of such expenditure until the date paid, will become a part of the indebtedness secured by this
Deed of Trust and, at Beneficiary's option, will (a) be payable upon demand, (b) be added to the
balance of the Note and be payable on the same terms as the original amount provided
thereunder, or (c) be treated as a balloon payment which will be due and payable upon the
maturity date of the Note. This Deed of Trust shall secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Beneficiary may be entitled upon a
default.
8. Liens and Encumbrances. Trustor shall pay and promptly discharge, at
Trustor's cost and expense, all taxes and assessments, liens, encumbrances and charges upon the
Property, or any part thereof or interest therein, including any other financing secured by the
Property as such payments become due. If Trustor shall fail to pay any such amount or to
remove and discharge any such lien, encumbrance or charge, then, in addition to any other right
or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same,
either by paying the amount claimed to be due, or by procuring the discharge of such lien,
encumbrance or charge by depositing in a court a bond or the amount claimed or otherwise
giving security for such claim, or by procuring such discharge in such manner as is or may be
prescribed by law. Trustor shall, immediately upon demand therefor by Beneficiary, pay to
Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in connection
with the exercise by Beneficiary of the foregoing rights, together with interest thereon from the
date of such expenditure at the Default Interest Rate. This Deed of Trust shall secure payment of
these amounts and all other amounts payable under this Deed of Trust.
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8. Extended Use Agreement. Beneficiary acknowledges that Trustor intends to
enter into an extended use agreement with the California Tax Credit Allocation Committee
(CTCAC),which constitutes the extended low-income housing commitment described in Section
42(h)(6)(B) of the Internal Revenue Code (IRC), as amended ("Extended Use Agreement"). As
of the date hereof, IRC Section 42(h)(6)(E)(ii) does not permit the eviction or termination of
tenancy (other than for good cause) of an existing tenant of any low-income unit or any increase
in the gross rent with respect to such unit not otherwise permitted under Section 42 for a period
of three (3) years after the date the building is acquired by foreclosure or instrument in lieu of
foreclosure. In the event such an Extended Use Agreement is recorded against the Property, the
Beneficiary agrees to comply with the provisions set forth in IRC Section 42(h)(6)(E)(ii) with
respect to any unit that is regulated by the Extended Use Agreement.
9. Incorporation of Fictitious Deed of Trust. To protect the security of this Deed
of Trust, and with respect to the Property above described, Trustor expressly makes each and all
of the agreements, and adopts and agrees to perform and be bound by each and all of the terms
and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms
and provisions set forth in subdivision B of the fictitious deed of trust recorded in the book and at
the page of Official Records in the office of the county recorder of the county where said
property is located, noted below opposite the name of such county,namely:
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187
Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762
Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621
Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427
Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56
Colusa 323 391 Marin 1849 122 San Luis Obispo 6213 768 Sutter 655 585
Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183
Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595
El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108
Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160
Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237
Humboldt 801 83 Monterey 357 239 Santa Clam 6626 664 Yolo 769 16
Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693
Inyo 165 672 Nevada 363 94 Shasta 800 633
Kem 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964,Page 149774
shall inure to and bind the parties hereto, with respect to the Property. Said agreements, terms
and provisions contained in said subdivision A and B are by the within reference thereto,
incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth
at length herein.
(signatures on next page)
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Trustor has caused this Deed of Trust to be executed as of the date set forth above.
"TRUSTOR"
PEOPLES' SELF-HELP HOUSING
CORPORATION, a California nonprofit
public benefit corporation
By:
Its:
By:
Its:
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/ 1 �
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public,personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public,personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
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The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the
foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust,Trustor agrees:
1) To keep said property in good condition and repair,not to remove or demolish any building thereon;to complete or restore
promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay
when due all claims for labor performed and materials furnished therefor,to comply with all laws affecting said property or requiring any
alterations or improvements to be made thereon;not to commit or permit waste thereof;not to commit,suffer or permit any act upon said
property in violation of law;to cultivate,irrigate,fertilize,fumigate,prune and do all other acts which from the character or use of said
property may be reasonably necessary,the specific enumerations herein not excluding the general.
2) To provide,maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary The
amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in
such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be
released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to such notice.
3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee;and to pay all costs and expenses,including cost of evidence of title and attorney's fees in a reasonable sum,in
any such action or proceeding in which Beneficiary or Trustee may appear,and in any suit brought by Beneficiary to foreclose this Deed.
4) To pay at least ten days before delinquency all taxes and assessments affecting said property,including assessments on
appurtenant water stock;when due,all encumbrances,charges and liens,with interest,on said property or any part thereof,which appear
to be prior or superior hereto;all costs,fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without
obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof,may make
or do the same is such manner and to such extent as either may deem necessary to protect the security hereof,Beneficiary or Trustee
being authorized to enter upon said property for such purposes;appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee;pay,purchase,contest or compromise any encumbrance,charge or lien
which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses,
employ counsel and pay his reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee,with interest from the date of
expenditure at the amount allowed by law in effect at the date hereof,and to pay for any statement provided for by law in effect at the
date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by
law at the time when said statement is demanded.
B. It is mutually agreed:
1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is
hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with
the same effect as above provided for disposition of proceeds of fire or other insurance.
2) That by accepting payment of any sum secured hereby after its due date,Beneficiary does not waive his right either to
require prompt payment when due of all other sums so secured or to declare default for failure so to pay
3) That at any time or from time to time,without liability therefor and without notice,upon written request of Beneficiary and
presentation of this Deed and said note for endorsement,and without affecting the personal liability of any person for payment of the
indebtedness secured hereby,Trustee may reconvey any part of said property;consent to the making of any map or plat thereof;join in
granting any easement thereon,or join in any extension agreement or any agreement subordinating the lien or charge hereof.
4) That upon written request of Beneficiary stating that all sums secured hereby have been paid,and upon surrender of this
Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon
payment of its fees,Trustee shall reconvey,without warranty,the property then held hereunder The recitals in such reconveyance of
any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as"the
person or persons legally entitled thereto."
5) That as additional security,Trustor hereby gives to and confers upon Beneficiary the right,power and authority,during the
continuance of these Trusts,to collect the rents,issues and profits of said property,reserving unto Trustor the right,prior to any default
by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder,to collect and retain such
rents,issues and profits as they become due and payable. Upon any such default,Beneficiary may at any time without notice,either in
person,by agent,or be a receiver to be appointed by a court,and without regard to the adequacy of any security for the indebtedness
hereby secured,enter upon and take possession of said property or any part thereof;in his own name sue for or otherwise collect such
rents,issues,and profits,including those past due and unpaid,and apply the same,less costs and expenses of operation and collection,
including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The
entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as
aforesaid,shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement
hereunder,Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration
of default and demand for sale and of written notice of default and of election to cause to be sold said property,which notice Trustee
shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing
expenditures secured hereby
After the lapse of such time as may then be required by law following the recordation of said notice of default,and notice of
sale having been given as then required by law,Trustee,without demand on Trustor,shall sell said property at the time and place fixed
by it in said notice of sale,either as a whole or in separate parcels,and in such order as it may determine,at public auction to the highest
bidder for cash in lawful money of the United States,payable at time of sale. Trustee may postpone sale of all or any portion of said
property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public
announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property
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so sold,but without any covenant or warranty,express or implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person,including Trustor,Trustee,or Beneficiary as hereinafter defined,may purchase at such
sale.
After deducting all costs,fees and expenses of Trustee and of this Trust,including cost of evidence of title in connection with
sale,Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof,not then repaid,with accrued
interest at the amount allowed by law in effect at the date hereof;all other sums then secured hereby;and the remainder,if any,to the
person or persons legally entitled thereto.
7) Beneficiary,or any successor in ownership of any indebtedness secured hereby,may from time to time,by instrument in
writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the
Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated
shall be conclusive proof of proper substitution of such successor Trustee or Trustees,who shall,without conveyance from the Trustee
predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor,
Trustee and Beneficiary hereunder,the book and page where this Deed is recorded and the name and address of the new Trustee.
8) That this Deed applies to,inures to the benefit of,and binds all parties hereto,their heirs,legatees,devisees,administrators,
executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured
hereby,whether or not named as Beneficiary herein. In this Deed,whenever the context so requires,the masculine gender includes the
feminine and/or neuter,and the singular number includes the plural.
9) That Trustee accepts this Trust when this Deed,duly executed and acknowledged,is made a public record as provided by
law Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in
which Trustor,Beneficiary or Trustee shall be a party unless brought by Trustee.
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1
EXHIBIT "A" TO DEED OF TRUST
LEGAL DESCRIPTION OF REAL PROPERTY
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 1 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 11 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)
538/024600-0011
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ATTACHMENT NO. 5
REGULATORY AGREEMENT AND DECLARATION
OF COVENANTS AND RESTRICTIONS
[Attached]
538/024600-0011
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RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
Arroyo Grande Redevelopment Agency
214 East Branch Street
Arroyo Grande, CA 93421
Attn: Agency Secretary
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
This Agreement is recorded at the request and for the benefit
of the Arroyo Grande Redevelopment Agency and is exempt
from the payment of a recording fee pursuant to Government
Code Section 27383.
REGULATORY AGREEMENT AND DECLARATION
OF COVENANTS AND RESTRICTIONS
This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement") is entered into this day of , 201 , by and
between the ARROYO GRANDE REDEVELOPMENT AGENCY, a public body, corporate and
politic ("Agency"), and PEOPLES' SELF-HELP HOUSING CORPORATION, a California
nonprofit public benefit corporation("Owner").
RECITALS
A. Owner is the owner in fee of that certain real property located in the City 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. Agency and Owner entered into that certain Affordable Housing and Loan
Agreement dated March 8, 2011 ("Loan Agreement"), concerning the development of a rental
housing project on the Property ("Project"). The Loan Agreement is a public record available for
inspection at City Hall, 241 East Branch Street, Arroyo Grande, CA 93421. 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 constitute 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, Agency is providing to Owner a loan in the
amount not to exceed the sum of Nine Hundred Thirty Thousand Dollars ($930,000.00)
("Agency Loan") for the development of the Project.
D. In consideration of Agency'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.
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f i
AGREEMENT
Based upon the foregoing Recitals and for good and valuable consideration, the receipt
and sufficiency of which is acknowledged by both parties, Agency and Owner agree as follows:
1. Definitions. The following terms as used in this Agreement shall have the
meanings given below unless expressly provided to the contrary:
"Affordable Rent" shall mean annual rent that does not exceed the 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 to the Unit.
As used herein, "adjusted for family size appropriate to the Unit" 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.
"City" shall mean the City of Arroyo Grande, a California municipal corporation.
"Eligible Tenant" 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 Agreement" 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 California Department of Housing and Community 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 Department 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.
"Project" shall have the meaning ascribed in Recital B of this Agreement.
"Property" shall have the meaning ascribed in Recital A of this Agreement.
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I
"Unit" shall mean each of the rental units to be developed on the Property.
"Unit Mix" shall mean the household income levels permitted for each of the 35
restricted Units, as follows:
[REQUIRED INCOME LEVELS FOR THE UNITS TO BE INSERTED PRIOR
TO EXECUTION. AT LEAST 25% WILL BE AT THE VERY LOW INCOME LEVEL
AND THE BALANCE WILL BE AT THE LOW INCOME LEVEL.]
"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 8 of the United States Housing Act of 1937, as such limits
are published annually by the California Department 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 Property within the times and subject to the terms and conditions set forth in
the Loan Agreement.
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 to be utilized on a transient basis, or as a
hotel, motel, dormitory, fraternity 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 form approved by Agency 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 further information as may be required by
Agency for purposes of verifying a tenant's status as an Eligible Tenant. Owner shall use its 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
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verification of income and employment from the applicant's current employer; (iv) obtain an
income verification form from the Social Security Administration, California Department 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 Agency; and (vi) such other information as may be
requested by Agency. Owner shall maintain each Income Computation and Certification Form
obtained pursuant to this Section and Section 4.3 for a minimum period of five (5)years. A copy
of each such Income Computation and Certification shall be provided to Agency 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 Form
based upon the current income and other information demonstrating the Eligible Tenant status of
each occupant of the Unit. Owner shall provide Agency with a copy of each such recertification
upon request. In 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
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 Agency prior to the time the Units are first rented. Once
approved, no material changes shall be made to the form of the rental agreement without
Agency's prior written reasonable approval. The term of the lease shall not exceed one (1) 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 Form and
all other supporting information supplied by the tenant in determining 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 to the Units, and shall permit any duly authorized representative of Agency to
inspect the books and records of Owner pertaining to the Units upon at least 24 hours advance
notice. Agency shall have the right to inspect the Property and the Units for purposes of assuring
compliance with this Agreement during normal business hours on twenty-four(24) hours written
notice.
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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 governmental 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 Agency or any other governmental agency 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 Agency (with regard to maintenance and removal of trash
containers), ten (10) business days after written notice to Owner from Agency (with respect to
landscaping, graffiti, debris, waste material, or general maintenance) or thirty (30) days (or such
reasonable time thereafter if repairs are commenced within 30 days) after written notice to
Owner from Agency (with respect to building improvements), then Agency, in addition to
whatever other remedy it may have at law or in equity, shall have the right to enter upon the
Property and perform or cause to be performed all such acts and work reasonably necessary to
cure the default. Pursuant to such right of entry, Agency shall be permitted (but not required)
with due notice and without disturbing the tenants to enter upon the Property and perform 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 Property, in the amount of the
expenditures arising from such acts and work of protection, maintenance, and preservation by
Agency and/or costs of such cure, which amount shall be promptly paid by Owner to Agency
upon demand.
7. Insurance Obligations. Owner shall procure and maintain, at its sole cost and
expense, in a form and content reasonably satisfactory to Agency, during the entire term of this
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 Agency, 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 Agency may reasonably require from time to time but not more frequently than every
36 months. Owner shall also furnish or cause to be furnished to Agency 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 Agency. Such policy shall name Agency as a loss payee. The foregoing
insurance policies:
(a) shall be primary insurance and not contributory with any other insurance
which Agency or City may have;
(b) shall contain no special limitations on the scope of protection afforded to
Agency, City and their respective officers, officials, members, employees, agents,
representatives, and volunteers;
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(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 Agency;
(f) shall be written by a good and solvent insurer admitted in California and
registered with the California State Department of Insurance; and
(g) shall be endorsed to state that any failure to comply with the reporting
provisions of the policies shall not affect coverage provided to Agency or City.
In addition to any other remedy which Agency may have hereunder for Owner's failure
to procure, maintain, and/or pay for the insurance required herein, Agency 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
immediately repay Agency all sums so paid by Agency together with interest thereon at the rate
of ten percent(10%)per annum or the maximum legal rate,whichever is less.
8. 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 promptly and diligently
commence the repair or replacement of the improvements 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 Agency, 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 Agency and its
officers, officials, members, employees, agents, and representatives from and against any loss,
damage, costs, expenses, liability, claim, or judgment relating in any manner to the development
or use of the 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
Agency.
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 Agency.
Owner may contract with apartment complex in accordance with the terms of this Section 10.1.
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("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 Agency
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 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 Agency for review and approval. A complete and true copy of the results
of such background evaluation shall be provided to Agency. Approval of a Property Manager
by Agency shall not be unreasonably delayed but shall be in its sole reasonable discretion, and
Agency 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.
10.2 On-Site Manager. The Property Manager shall reside full-time in one of
the Units on the 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 Agency 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 apartment complex shall be in compliance with the approved Property Management Plan.
Owner and its Property Manager may from time to time submit to Agency amendments to the
Property Management Plan, the implementation of which shall be subject to the prior written
approval of Agency,which approval shall not be unreasonably withheld.
10.4 Gross Mismanagement. In the event of"Gross Mismanagement" (as that
term is defined below) of the apartment complex, Agency 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
Property 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 Agency or another lender for the Project;
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(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;
(f) failing to fully cooperate with the Arroyo Grande Police Department or
other local law enforcement agency(ies) with jurisdiction over the apartment complex, in
maintaining a crime-free environment within the apartment complex;
(g) failing to fully cooperate with Agency, including its code enforcement
division, or other local health and safety enforcement agency(ies) with jurisdiction over
the apartment complex, in maintaining a decent, safe, and sanitary environment within
the apartment 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")
(and/or, as applicable, generally accepted auditing principles.)
Notwithstanding the requirements of the Property Manager to correct any condition of
Gross Mismanagement as described above, Owner is obligated and shall use its best 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 provisions
of the 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 Agency
from time to time) into a separate 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, improvements, or replacements and to continue to maintain
the apartment complex in the manner prescribed herein. Not less than once per year, Owner, at
its expense, shall submit to Agency an accounting for the Capital Replacement 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; irrigation pipe and controls
replacement; sewer line replacement; water line replacement; gas line replacement; and lighting
fixture replacement.
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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 fifteen percent (15%) 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 Agency, and any earnings 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 Agency. Agency reserves the right to periodically review and increase the
Target Balance amount as necessary to ensure sufficient funds are available to pay Operating
Expenses. Nothing in this Section 12 shall modify or be deemed to modify any payment
obligation of Owner pursuant to any Agency Loan documents entered into by and between
Owner and Agency.
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.
14. Compliance with Laws. Owner shall comply with all applicable laws,
regulations, and rules of any governmental 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 to 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 Government Code, as those
bases are defined in Sections 12926, 12926.1,subdivision (m) and paragraph (1) of subdivision
(p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, 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 thereof. 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 nonsegregation 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 (1) of subdivision (p) of Section 12955, and Section
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12955.2 of the Government 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 covenants 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 Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the leasing, subleasing,transferring,use, occupancy,
tenure, or enjoyment of the 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."
c. In contracts: "There shall be no discrimination against or segregation of
any person or group of persons, on account of any basis listed in subdivision (a) or(d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code, in the sale, lease, 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 party 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 Agency 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
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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 party to this Agreement arising out of or in connection with this
Agreement, the prevailing party shall be entitled to recover reasonable attorneys' 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 Agency. It is because of those qualifications and identity that Agency
has provided financial assistance to Owner and entered into this Agreement with Owner.
Accordingly, except for Permitted Transfers (as defined in the Loan Agreement), Owner shall
not, whether voluntarily, involuntarily, 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 Agency. In considering whether it will grant
approval to any assignment by Owner of its interest in the Property and this Agreement, Agency
shall consider factors such as the financial strength and capability of the proposed transferee to
perform Owner's obligations hereunder and the proposed assignee's experience and expertise in
the planning, financing, and operation of similar projects. Any assignment of this Agreement
must include the concurrent transfer of fee title to the Property to the permitted assignee.
Agency 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 default 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 internal laws of the State of California
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 this 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
Agency 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 Agency: Arroyo Grande Redevelopment Agency
214 East Branch Street
Arroyo Grande, CA 93421
Attention: Executive Director
538/024600-0011
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If to Owner: Peoples' Self-Help Housing Corporation
3533 Empleo Street
San Luis Obispo, CA 93401
Attention: Executive Director
With a copy to: Gubb &Barshay, LLP
50 California Street, Suite 3155
San Francisco, CA 94111
Attention: Natalie Gubb,Esq.
17.7 Modification of Agreement. Agency and its successors and assigns, and
Owner and the successors and assigns of Owner in and to the fee title 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
covenants, 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 Agency and Owner, or their
successors and assigns.
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, title or interest in the Property, or any part thereof, their heirs,
successive owners and assigns; shall inure to the benefit of the Agency and its successors and
assigns, shall be binding upon Owner and its successors and assigns and successors in interest;
and may be enforced by Agency and its successors and assigns. Owner hereby declares its
understanding and intent that the burden of the covenants set forth herein touch and concern the
land and that the Owner's interest in the Property is rendered less valuable thereby. Owner
hereby furthers declare its 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 Eligible
Tenants, and by furthering the public purposes for which Agency was formed.
In amplification and not in restriction of the provisions set forth hereinabove, it is
intended and agreed that Agency 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 Agency and such covenants shall run in favor of Agency for the
entire period during which such covenants shall be in force and effect, without regard to whether
Agency 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 Agency 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 Agency. Agency 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.
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J
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]
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IN WITNESS WHEREOF, Agency 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.
"AGENCY"
ARROYO GRANDE REDEVELOPMENT
AGENCY, a public body, corporate and politic
By:
Its:
ATIEST:
Secretary
"OWNER"
PEOPLES' SELF-HELP HOUSING
CORPORATION, a California nonprofit
public benefit corporation
By:
Its:
By:
Its:
538/024600-0011
1129376.05 a03/04/11 —14-
State of California )
County of )
On ,before me,
(insert name and title of the officer)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
538/024600-0011
1129376.05 a03/04/11 -15-
State of California )
County of )
On , before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
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EXHIBIT "A" TO REGULATORY AGREEMENT
LEGAL DESCRIPTION OF PROPERTY
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 1 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 11 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)
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ATTACHMENT NO. 6
RELEASE OF CONSTRUCTION COVENANTS
[Attached]
538/024600-0011
1129376.05 a03/04/11
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
Arroyo Grande Redevelopment Agency
214 East Branch Street
Arroyo Grande, CA 93421
Attn: Agency Secretary
(Space Above Line for Recorder's Use)
This Release of Construction Covenants is recorded at the
request and for the benefit of the Arroyo Grande
Redevelopment Agency and is exempt from the payment of a
recording fee pursuant to Government Code Section 27383.
RELEASE OF CONSTRUCTION COVENANTS
This RELEASE OF CONSTRUCTION COVENANTS ("Release") is made this
day of , 201 , by the ARROYO GRANDE REDEVELOPMENT
AGENCY, a public body, corporate and politic ("Agency"), in favor of PEOPLES' SELF-HELP
HOUSING CORPORATION, a California nonprofit public benefit corporation ("Developer").
RECITALS
A. Developer is the owner of that certain real property located in the City of Arroyo
Grande, County of San Luis Obispo, State of California, more particularly described in the legal
description attached hereto as Exhibit"A" ("Site").
B. On or about March 8, 2011, Agency and Developer entered into that certain
Affordable Housing and Loan Agreement ("Loan Agreement") which provides for Developer to
develop the Site with certain improvements as more particularly described therein as the
"Project."
C. Pursuant to the Loan Agreement, Agency is required to furnish Developer with
this Release upon request by Developer after completion of construction of the Project.
NOW, THEREFORE:
1. As provided in the Loan Agreement, Agency does hereby certify that the
construction of the Project has been satisfactorily performed and completed, and that such
development and construction work are in full compliance with the Loan Agreement and that the
covenants to construct the Project are hereby released as encumbrances from the Site.
2. This Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of Developer to any holder of a mortgage, or
any insurer of a mortgage, securing money loaned to finance construction work on the Site, or
any part thereof. Nothing contained herein shall modify in any way any other provision of the
Loan Agreement and nothing herein shall constitute a release of any other agreement between
Agency and Developer, including without limitation, the Regulatory Agreement and Declaration
of Covenants and Restrictions recorded against the Site.
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3. This Release is not a notice of completion as referred to in Section 3093 of the
California Civil Code.
IN WITNESS WHEREOF, Agency has executed this Release as of the date set forth
above.
"AGENCY"
ARROYO GRANDE REDEVELOPMENT
AGENCY, a public body, corporate and politic
By:
Its:
ATTEST:
Agency Secretary
CONSENT TO RECORDATION
PEOPLES' SELF-HELP HOUSING CORPORATION, owner of the Site, hereby
consents to the recordation of this Release of Construction Covenants against the property
described herein.
PEOPLES' SELF-HELP HOUSING
CORPORATION, a California nonprofit
public benefit corporation
By:
Its:
538/024600-0011
1129376.05 a03/04/11 -2-
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public,personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public,personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
538/024600-0011
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EXHIBIT "A"
TO RELEASE OF CONSTRUCTION COVENANTS
LEGAL DESCRIPTION OF PROPERTY
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 1 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 11 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)
538/024600-0011
1129376.05 a03/04/11
ATTACHMENT NO. 7
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
[Attached]
538/024600-0011
1129376.05 a03/04/11
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Arroyo Grande Redevelopment Agency
214 East Branch Street
Arroyo Grande, CA 93421
Attn: Agency Secretary
[EXEMPT FROM RECORDING FEE PURSUANT TO GOVERNMENT CODE § 27383]
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
Important notice to owners, purchasers, tenants, lenders, brokers, escrow and
title companies, and other persons, regarding affordable housing restrictions on
the real property described in this Notice: Affordable housing restrictions have
been recorded with respect to the property described below (referred to in this
Notice as the "Property") which require that the housing units on the Property be
rented to households whose income does not exceed a prescribe level at an
affordable rent.
This Notice of Affordability Restrictions on Transfer of Property is executed
and recorded pursuant to Section 33334.3(f)(3)(B) of the Health and Safety Code.
The Arroyo Grande Redevelopment Agency ("Agency"), acting to carry out
certain obligations under the Community Redevelopment Law of the State of
California (Health and Safety Code Section 33000 et seq.), has entered into a
Regulatory Agreement and Declaration of Covenants and Restrictions
("Regulatory Agreement") with People's Self-Help Housing Corporation, a
California nonprofit public benefit corporation ("Owner"), with respect to that
certain real property ("Property") located at , Arroyo Grande, CA
, San Luis Obispo County, Assessor's Parcel No.
, and described on Exhibit "A" attached hereto and
incorporated herein by reference.
The Regulatory Agreement establishes certain covenants, conditions and
restrictions, as recited therein, which provide that the 36 units (excluding the one
on-site manager's unit) to be developed on the Property are to be rented to Low
Income Tenants and Very Low Income Tenants, at an Affordable Rent, in
accordance with the following unit mix:
[TO BE INSERTED]
538/024600-0011
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As used in this Notice, the following terms shall have the meanings ascribed
below:
"Affordable Rent" shall mean annual rent that does not exceed the
maximum percentage of income that can be devoted to rent (including a
reasonable utility allowance) by Low Income Tenants and Very Low Income
Tenants under the California Community Redevelopment Law, 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 to the unit.
As used herein, "adjusted for family size appropriate to the unit" 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.
"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 California Department of Housing and Community
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 Department of Housing and Community Development.
"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 8
of the United States Housing Act of 1937, as such limits are published
annually by the California Department of Housing and Community
Development, pursuant to Section 50105 of the California Health and Safety
Code.
538/024600-0011
1129376.05 a03/04/11 -2-
The Regulatory Agreement is being recorded on or about the date hereof and
will remain in effect until the date that is fifty-five (55) years after the units and
other improvements that are to be constructed on the Property pursuant to that
certain Affordable Housing and Loan Agreement between Agency and Owner
dated March 8, 2011, on file with Agency, are completed, as evidenced by the
recordation of the Release of Construction Covenants (Attachment No. 6 to
Affordable Housing Agreement). This Notice does not contain a full description of
the details of all of the terms and conditions of the Regulatory Agreement. You
will need to obtain and read the Regulatory Agreement to fully understand the
restrictions and requirements which apply to the Property.
[signatures on next page]
538/024600-0011
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This Notice shall be indexed against the Arroyo Grande Redevelopment
Agency and the current owner of the Property.
"AGENCY"
ARROYO GRANDE REDEVELOPMENT
AGENCY, a public body, corporate and
politic
Date: , By:
CONSENT TO RECORDATION
PEOPLES' SELF-HELP HOUSING CORPORATION, a California nonprofit
public benefit corporation, owner of the fee interest in the real property legally
described in Exhibit "A" hereto, hereby consents to the recordation of the
foregoing Notice of Affordability Restrictions on Transfer of Property against said
real property.
"OWNER"
PEOPLES' SELF-HELP HOUSING
CORPORATION, a California
nonprofit public benefit corporation
By:
Its:
538/024600-0011
1129376.05 a03/04/11 -4-
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public,personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
538/024600-0011
1129376.05 a03/04/11 -5-
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared _ ,
who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
State of California )
County of )
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
538/024600-0011
1129376.05 a03/04/11 -6-
EXHIBIT "A"
TO NOTICE OF AFFORDABILITY RESTRICTIONS
LEGAL DESCRIPTION OF PROPERTY
All 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 1 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 11
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)
538/024600-0011
1129376.05 a03/04/11