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HomeMy WebLinkAboutRedevelopment Agency - 324 RESOLUTION NO. 324 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH PROVIDING FOR THE SUBORDINATION OF THE DEED OF TRUST BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, SHELTER FOR THE HOMELESS, INC., DBA AMERICAN LODGING, AND THE CITY OF HUNTINGTON BEACH WHEREAS, On April 17, 2000, the Redevelopment Agency of the City of Huntington Beach (the "Agency") approved that certain Owner Participation Agreement (the "Agreement") with the Shelter for the Homeless, Inc., dba American Lodging (the "Participant"); and The purpose of the Agreement is to assist the Agency to meet its affordable housing goals pursuant to the California Community Redevelopment Law by facilitating Participant's rehabilitation-in-place of an apartment building for the purpose of providing rental housing to tenants whose household incomes do not exceed very low income as defined by California law; and The Agency's assistance is in the form of a loan in the amount of$350,000.00 to assist Participant in meeting the cost of acquisition and rehabilitation of the Site; and The Agency Loan is evidenced by that certain Promissory Note dated April 27, 2000 in favor of the Agency in the sum of$350,000.00, as secured by that certain Deed of Trust dated April 27, 2000, from Participant as Trustor to the City of Huntington Beach as Trustee in favor of the Agency as Beneficiary, recorded May 1, 2000, as Instrument No. 20000225131 of the Official Records of Orange County, California; and The Agreement also requires the Participant to obtain a loan from a conventional/permanent. lender to be used exclusively for the rehabilitation of the Site in an amount not to exceed $50,000.00; and Pursuant to Section 33334.14 of the Health and Safety Code, the Agency is permitted to subordinate the Agency Deed of Trust to superior deeds of trust and other related documents including but not limited to those required by the Conventional Lender, if certain findings are made and certain written commitments are obtained from such Conventional Lender, NOW, THEREFORE, the Agency does hereby resolve as follows: 1. That in accordance with said Section 33334.14, the Agency hereby finds that no economically feasible alternative method of financing the Project on substantially comparable terms and conditions without subordination is reasonably available, and that the subordination documents contain written commitments to protect the Agency's investment in the event of a default by Participant. 2. That the Agency hereby agrees to subordinate the Agency Deed of Trust to the Conventional Lender's First Deed of Trust and such other related documents as the Conventional 1 PDA 2001 Resolutions:Agency—Shelter for Homeless subordination RLS 2001-0619 Res. No. 324 Lender may require, in the amount of the Conventional Lender's First Deed of Trust, not to exceed Fifty Thousand Dollars ($50,000.00). 3. That the Executive Director is hereby authorized and directed to execute on behalf of the Agency all documents necessary to accomplish the aforesaid subordination, including but not limited to, the document entitled "Subordination of Deed of Trust," a copy of which is attached hereto as Exhibit "A" and incorporated by this reference as though fully set forth herein. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting thereof held on the 17th day of September , 2001. C irperson ATTEST: APPROVED AS TO FORM: Agency Clerk o9-.2`1-a Agency General Counsel ]' REVIEWED AND APPROVED: INITI ED AND APPROVED: Exe tive Director Deputy Executi Director 2 PDA 2001 Resolutions:Agency—Shelter for Homeless subordination RLS 2001-0619 Res. No. 324 EXHIBIT A Res. No. 324 RECORDATION REQUESTED BY: WHEN RECORDED MAIL TO: BYL Bank Group 1875 N.Tustin Avenue Orange,CA 92865 FOR RECORDER'S USE ONLY NOTICE: THIS SUBORDINATION OF DEED OF TRUST RESULTS .IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. SUBORDINATION OF DEED OF TRUST THIS SUBORDINATION OF DEED OF. TRUST dated August 16, 2001, is made and executed among Redevelopment Agency of Huntington Beach ("Beneficiary"); City of Huntington Beach ("Trustee"); Shelter for the Homeless, Inc. dba American Lodging ("Borrower"); and BYL BANK GROUP ("Lender"). SUBORDINATED INDEBTEDNESS. Beneficiary has extended the following described financial accommodations (the "Subordinated Indebtedness")to Shelter for the Homeless,Inc.dba American Lodging('Trustor"): A Note in the sum of$350,000.00,dated April 27,2000 in favor of Redevelopment Agency of the Agency of Huntington Beach. SUBORDINATED DEED OF TRUST. The Subordinated Indebtedness is secured by a deed of trust dated April 27,2000 from Trustor to Trustee in favor of Beneficiary(the"Subordinated Deed of Trust")recorded in Orange County,State of California as follows: Recorded May 1,2000 as Instrument No.20000225131. REAL PROPERTY DESCRIPTION. The Subordinated Deed of Trust covers the following described real property located in Orange County,State of California: Lot 33 of Tract 4301,as per map recorded in Book 177 Pages 11 and 12 of Miscellaneous Maps,in the Office of the County Recorder of said County The Real Property or its address is commonly known as 7802 Barton Drive,Huntington Beach,CA 92647. The Assessor's Parcel Number for the Real Property is 165-223-03. REQUESTED FINANCIAL ACCOMMODATIONS. Borrower, who may or may not be the same entity as Trustor, and Beneficiary each want Lender to provide financial accommodations to Borrower in the form of (A) new credit or loan advances, (B) an extension of time to pay or other compromises regarding all or part of Borrower's present indebtedness to Lender, or (C) other benefits to Borrower. Borrower and Beneficiary each represent and acknowledge to Lender that Beneficiary will benefit as a result of these financial accommodations from Lender to Borrower,and Beneficiary acknowledges receipt of valuable consideration for entering into this Subordination. LENDER'S LIEN. As a condition to the granting of the requested financial accommodations, Lender has required that Lender's Lien be and remain superior to the Subordinated Deed of Trust. NOW THEREFORE THE PARTIES TO THIS SUBORDINATION HEREBY AGREE AS FOLLOWS: SUBORDINATION. The Subordinated Deed of Trust and the Subordinated Indebtedness secured by the Subordinated Deed of Trust is and shall be subordinated in all respects to Lender's Lien and the Superior Indebtedness, and it is agreed that Lender's Lien shall be and remain, at all times,prior and superior to the lien of the Subordinated Deed of Trust. Beneficiary also subordinates to Lender's Lien all other Security Interests in the Real Property held by Beneficiary,whether now existing or hereafter acquired. BENEFICIARY'S REPRESENTATIONS AND WARRANTIES. Beneficiary represents and warrants to Lender that: (A) no representations or agreements of any kind have been made to Beneficiary which would limit or qualify in any way the terms of this Subordination; (B) this Subordination is executed at Borrower's request and not at the request of Lender; (C)Lender has made no representation to Beneficiary as to the creditworthiness of Borrower; and (D) Beneficiary has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition.. Beneficiary agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Beneficiary's risks under this Subordination,and Beneficiary further agrees that Lender shall have no obligation to disclose to Beneficiary information or material acquired by Lender in the course of its relationship with Borrower. BENEFICIARY"WAIVERS. Beneficiary waives any right to require Lender: (A) to make, extend, renew, or modify any loan to Borrower or to grant any other financial accommodations to Borrower whatsoever; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of any Superior Indebtedness secured by Lender's Lien, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Superior Indebtedness, or in connection with the creation of new or additional indebtedness; (C) to resort for payment or to proceed directly or at once against any person, including Borrower; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to pursue any other remedy within Lender's power;or (F) to commit any act or omission of any kind,at any time,with respect to any matter whatsoever. LENDER'S RIGHTS. Lender may take or omit any and all actions with respect to Lender's Lien without affecting whatsoever any of Lender's rights under this Subordination. In particular, without limitation, Lender may, without notice of any kind to Beneficiary, (A) make one or more Res. No. 324 SUBORDINATION OF DEED OF TRUST Loan No: 1460101601 (Continued) Page 2 additional secured or unsecured loans to Borrower; (B) repeatedly alter,compromise, renew,extend,accelerate, or otherwise change the time for payment or other terms of the Superior Indebtedness or any part of it,including increases and decreases of the rate of interest on the Superior Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) take and hold collateral for the payment of the Superior Indebtedness, and exchange, enforce, waive, and release any such collateral, with or without the substitution of new collateral; (D) release, substitute, agree not to sue, or deal with any one.or more of Borrower's sureties, endorsers, or guarantors on any terms or manner Lender chooses; (E) determine how, when and what application of payments and credits, shall be made on the Superior Indebtedness; (F) apply such security and direct the order or manner of sale of the security, as Lender in its discretion may determine; and (G) transfer this Subordination to another party.. DEFAULT BY BORROWER. If Borrower becomes insolvent or bankrupt,this Subordination shall remain in full force and effect. In the event of a corporate reorganization or corporate arrangement of Borrower under the provisions of the Bankruptcy Code, as amended, this Subordination shall remain in full force and effect and the court having jurisdiction over the reorganization or arrangement is hereby authorized to preserve such priority and subordination provided under this Subordination in approving any such plan of reorganization or arrangement. AGENCY'S RIGHT TO CURE; AGENCY'S RIGHT TO ACQUIRE LOAN. Upon the occurrence of an event of default under the Loan, the Bank shall,(1)Concurrently with Bank's notifying Borrower of the occurrence of such event of default, notify Agency of the occurrence of such event of. default; (2)With respect to a non—monetary default, permit Agency to cure or correct any such default within (i) ninety(90)calendar days after receipt of such notice, or(ii)the cure period, if any, granted to the Borrower under Bank's loan documents, whichever is longer; and (3) With respect to a monetary default,permit Agency to cure or correct such default within (i)sixty(60)days after receipt of such notice, or(ii) the cure period,if any,granted to the Borrower under Bank's loan documents,whichever is longer. Additionally, following Bank's notification to Agency of the occurrence of an event of default under the Loan and the expiration of any curative period(s),if any, set forth thereunder,and so long as the Loan remains in default and no amount remains undisbursed under the Loan,Agency shall have the right to purchase Bank's loan documents at a cash purchase price equal to all amounts due and owing under the Loan. In the . event of any such purchase,which shall occur(if at all)within sixty(60)days following the expiration of any curative period granted Borrower for such event of default, whichever is longer, Bank shall,contemporaneously therewith, sell,transfer, assign and deliver (without representation or warrant, whether express or implied, and without recourse) to Agency the Note, the Mortgage, and all other loan documents by executing, endorsing and delivering to Agency any and all necessary or appropriate documents and instruments in recordable form. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Subordination: Amendments. This Subordination,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Subordination. No alteration of or amendment to this Subordination shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Subordination,Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court action is involved;and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys'fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys'fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post—judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Beneficiary also will pay any court costs,in addition to all other sums provided by law. Authority. The person who signs this Subordination as or on behalf of Beneficiary represents and warrants that he or she has authority to execute this Subordination and to subordinate the Subordinated Indebtedness and the Beneficiary's security interests in Borrower's property, if any. Caption Headings. Caption headings in this Subordination are for convenience purposes only and are not to be used to interpret or define the provisions of this Subordination. Governing Law. This Subordination will be governed by,construed and enforced in accordance with federal law and the taws of the State of California. This Subordination has been accepted by Lender in the State of California. Successors. This Subordination shall extend to and bind the respective heirs, personal representatives, successors and assigns of the parties to this Subordination, and the covenants of Borrower and Beneficiary herein in favor of Lender shall extend to, include, and be enforceable by any transferee or endorsee to whom Lender may transfer any or all of the Superior Indebtedness. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Subordination unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Subordination shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Subordination. No prior waiver by Lender, nor any course of dealing between Lender and Beneficiary, shall constitute a waiver of any of Lender's rights or of any of Beneficiary's obligations as to any future transactions. Whenever the consent of Lender is required under this Subordination, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. EACH PARTY TO THIS SUBORDINATION ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS SUBORDINATION,AND EACH PARTY AGREES TO ITS TERMS. THIS SUBORDINATION IS DATED AUGUST 16,2001. Res. No., 324 SUBORDINATION OF DEED OF TRUST Loan No: 1460101601 (Continued) Page 3 BORROWER: SHELTER FOR THE HOMELESS,INC.DBA AMERICAN LODGING Marcia Stone,. Executive Director of Shelter for the Homeless, Inc. dba American Lodging BENEFICIARY: REDEVELOPMENT AGENCY OF HUNTINGTON BEACH By: Authorized Signer for Redevelopment Agency of Huntington Beach By: Authorized Signer for Redevelopment Agency of Huntington Beach TRUSTEE: CITY OF HUNTINGTON BEACH By: Authorized Signer for City of Huntington Beach By: Authorized Signer for City of Huntington Beach LENDER: X Authorized Officer Res. No. 324 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a regular meeting of said Redevelopment Agency held on the 17th day of September, 2001 and that it was so adopted by the following vote: AYES: Green, Boardman, Cook, Julien Houchen, Garofalo, Dettloff, Bauer NOES: None ABSENT: None ABSTAIN: None Clerk of the Redevelopment Agency of the City of Huntington Beach, CA