HomeMy WebLinkAboutCity Council - 2016-70 RESOLUTION NO, 2016- 70
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH APPROVING A HOME AFFORDABLE
HOUSING AGREEMENT BETWEEN THE CITY AND ORANGE
COUNTY COMMUNITY HOUSING CORPORATION
WHEREAS, Orange County Community Housing Corporation ("Developer") is
the owner of real property located at 7792 Barton Drive in the City of Huntington Beach
("Property"), which is improved with four housing units and is currently operated by
Owner as affordable rental housing for very low and low income households.
WHEREAS, Developer proposes to acquire and rehabilitate the units for
continued operation as affordable housing for very low and low income households for
an extended period of fifteen years.
WHEREAS, the City of Huntington Beach ("City") administers HOME
Investments Partnership Program ("HOME Program") funds made available to it by the
United States Department of Housing and Urban Development, and seeks to provide a
loan of HOME Program funds to Developer in the amount of$781,220 Dollars ("HOME
Loan"),. for payment of Developer's costs of acquiring and rehabilitating the units.
WHEREAS, the project is categorically excluded from the environmental review
requirements of the National Environmental Policy Act as rehabilitation of multifamily
residential buildings (with five or more units) under 24 CFR 58.35(a).
WHEREAS, the project is categorically exempt from the environmental review
requirements of the California Environmental Quality Act ("CEQA"), as rehabilitation of
an existing facility under State CEQA Guidelines Section 15301(c).
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the
City of Huntington Beach as follows:
Section 1. The Home Affordable Housing Agreement hereto as Exhibit A is
approved and adopted.
1
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Resolution No. 2016 70
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Section 2. The City Manager, or designee, is authorized to execute the Home
Affordable Housing Agreement and to execute all instruments and take all
actions necessary and convenient to carry out and implement the Home
Affordable Housing Agreement and to administer the City's obligations,
responsibilities and duties to be performed thereunder.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach
at a regular meeting thereof held on the 17TH day of OCTOBER, 2016
A0 0
Mayor
REVIEWED AND APPROVED: APPROVED AS TO FORM:
Cit r Cit. Attorney Dk4Z (<)\W\�-(O AV
INITIATED AND APP' OVED:
Deputy Directoy f Economic Development
16-5414/14486 I.doc/DO 2
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HOME AFFORDABLE HOUSING AGREEMENT
By and Between
THE CITY OF HUNTINGTON BEACH
a municipal corporation of the State of California
and
ORANGE COUNTY COMMUNITY HOUSING CORPORATION
a California nonprofit public benefit corporation
7792 Barton Drive
Table of Contents
1. Definitions .............................................................................................................................. 2
1.1 Defined Terms .............................................................................................................. 2
1.2 Singular and Plural Terms ............................................................................................ 9
1.3 Accounting Principals................................................................................................... 9
1.4 References and Other Terms......................................................................................... 9
1.5 Attachments Incorporated; Attachments Additional Consideration........................... 10
2. Subject of This Agreement................................................................................................. 10
2.1 Purpose of the Agreement........................................................................................... 10
2.2 City............................................................................................................................... 10
2.3 Developer............................................................................................•--..................... 11
2.4 Prohibition Against Transfers; Right of First Refusal................................................ 11
3. Relocation Obligations........................................................................................................ 13
3.1 Relocation Plan........................................................................................................... 13
3.2 Relocation Activities and Costs.................................................................................. 13
4. Financing...................................... --------------------------------------------------------- ----------------------------- 13
4.1 The Project Budget ..................................................................................................... 13
4.2 The City Assistance .................................................................................................... 14
4.3 Priority City Lien........................................................................................................ 14
4.4 Disbursement of HOME Loan.................................................................................... 14
4.5 Conditions Precedent to Closing................................................................................. 15
5. Rehabilitation of the Improvements.................................................................................. 16
5.1 Scope of Work ............................................................................................................ 16
5.2 Construction Drawings and Related Documents........................................................ 16
5.3 City Approval of Plans, Drawings and Related Documents....................................... 17
5.4 Cost of Work............................................................................................................... 17
5.5 Schedule of Performance............................................................................................ 18
5.6 Accessibility Requirements ........................................................................................ 18
5.7 Local, State and Federal Laws.................................................................................... 18
5.8 Hazardous Substances................................................................................................. 20
5.8.1 Lead-Based Paint and Asbestos Containing Materials................................ 20
5.8.2 Indemnification............................................................................................ 20
5.9 Nondiscrimination During Construction..................................................................... 20
5.10 Insurance..................................................................................................................... 20
5.10.1 Worker's Compensation Insurance.............................................................. 21
5.10.2 General Liability and Auto Insurance.......................................................... 21
5.10.3 Property Insurance....................................................................................... 21
5.10.4 Certificate of Insurance; Additional Insured Endorsements........................ 22
5.10.5 Flood Disaster Protection Act of 1973......................................................... 22
5.11 Indemnification........................................................................................................... 22
5.12 Disclaimer of Responsibility by the City.................................................................... 23
5.13 Rights of Access ......................................................................................................... 23
5.14 Taxes, Assessments, Encumbrances and Aliens......................................................... 23
5.15 Rights to Plans............................................................................................................ 23
5.16 Hazardous Materials ................................................................................................... 24
6. Use of Property.................................................................................................................... 24
6.1 Uses............................................................................................................................. 24
6.2 Management Plan; Annual Project Budget; Management Reports............................ 25
6.3 Maintenance of Property............................................................................................. 26
6.4 Lead-Based Paint..............................................•......................................................... 26
6.5 Barriers to the Disabled .............................................................................................. 27
6.6 Creation of Capital Reserve Account ......................................................................... 27
6.7 Capital Reserves.......................................................................................................... 27
6.8 Obligation to Refrain from Discrimination................................................................. 27
6.9 Effectiveness and Duration of Covenants................................................................... 28
6.10 Effect of Violation of Covenants................................................................................ 28
6.11 CHDO Provisions....................................................................................................... 28
7. HOME Covenants ............................................................................................................... 29
7.1 Qualification as Affordable Housing .................................. 29
7.2 Use of HOME Funds .................................................................................................. 29
7.3 Affordable Housing Requirements............................................................................. 29
7.3.1 HOME Designated Units............................................................................. 29
7.3.2 Household Income Requirements................................................................ 29
7.3.3 HOME Rents................................................................................................ 30
7.3.4 Duration of HOME Affordability Requirements......................................... 30
7.4 Selection of Qualified Tenants.................................................................................... 30
7.5 Lease Requirements.................................................................................................... 30
7.6 Affirmative Marketing................................................................................................ 31
7.7 Annual Reporting Requirements................................................................................. 31
7.8 Handicapped Accessibility.......................................................................................... 31
7.9 Lead-Based Paint........................................................................................................ 31
7.10 Equal Opportunity and Fair Housing.......................................................................... 32
7.11 Property Standards...............................................................................•...................... 32
7.12 Displacement and Relocation ..................................................................................... 32
7.13 Faith Based Activities................................................................................................. 32
7.14 Records and Reports................................................................................................... 33
7.15 Labor Standards (Davis-Bacon).................................................................................. 34
7.16 Use of Debarred, Suspended, or Ineligible Participants............................................. 35
7.17 Maintenance of Drug-Free Workplace ....................................................................... 35
7.18 Other Program Requirements ..................................................................................... 35
7.19 Requests for Disbursements of Funds......................................................................... 36
7.20 Eligible Costs.............................................................................................................. 37
7.21 Conflict of Interest...................................................................................................... 37
7.22 Project Requirements.................................................................................................. 37
7.23 Other HOME Program Requirements......................................................................... 38
8. Defaults, Remedies and Termination................................................................................ 38
8.1 Defaults;Notice of Cure; Cure Rights........................................................................ 38
8.2 Institution of Legal Actions........................................................................................ 39
8.3 Applicable Law........................................................................................................... 39
8.4 Acceptance of Service of Process............................................................................... 39
8.5 Rights and Remedies Are Cumulative........................................................................ 39
8.6 Specific Performance.................................................................................................. 39
8.7 Termination Due to Failure of Financing Event......................................................... 40
8.8 Termination by Either Party........................................................................................ 40
8.9 Limited Recourse Obligations..........:......................................................................... 40
8.10 Developer's Remedies................................................................................................ 41
8.11 Attorney's Fees........................................................................................................... 41
9. General Provisions ............................................................................................................... 41
9.1 Developer's Warranties .............................................................................................. 41
9.2 Notices, Demands, and Communications Between the Parties .................................. 42
9.3 Conflicts of Interest..................................................................................................... 42
9.4 Titles and Captions ..................................................................................................... 42
9.5 Gender......................................................................................................................... 42
9.6 Modifications.............................................................................................................. 42
9.7 Merger of Prior Agreements and Understandings...................................................... 43
9.8 No Third Parties Benefited ......................................................................................... 43
9.9 Assurances to Act in Good Faith................................................................................ 43
9.10 Warranty Against Payment of Consideration for Agreement; No Real Estate
Commissions........................................................•............................................................ 43
9.11 Nonliability of City Officials and Employees ............................................................ 44
9.12 Interpretation..............•................................................................................................ 44
9.13 Counterparts................................................................................................................ 44
9.14 Severability................................................................................................................. 44
9.15 Extension of Times of Performance ........................................................................... 44
9.16 Inspection of Books and Records ............................................................................... 44
9.17 Waivers....................................................................................................................... 45
10. Execution of agreement; Time for Acceptance................................................................. 45
Exhibit 1 Legal Description
Exhibit 2 Site Map
Exhibit 3 Scope of Work
Exhibit 4 Project Budget
Exhibit 5 Schedule of Performance
Exhibit 6 HOME Promissory Note
Exhibit 7 HOME Deed of Trust
Exhibit 8 HOME Regulatory Agreement
Exhibit 9 Environmental Indemnity
Exhibit 10 Assignment of Agreements
Exhibit 11 Assignment of Rents & Leases
Exhibit 12 Notice of HOME Affordability Restrictions
Exhibit 13 Section 3 Acknowledgement
HOME AFFORDABLE HOUSING AGREEMENT
BETWEEN THE CITY OF HUNTINGTON BEACH
AND
ORANGE COUNTY COMMUNITY HOUSING CORPORATION
(HOME PROGRAM - 7792 BARTON DRIVE)
THIS HOME AFFORDABLE HOUSING AGREEMENT ("Agreement"), dated as of
October , 2016, is entered into by and between THE CITY OF HUNTINGTON BEACH, a
municipal corporation of the state of California("City"), and ORANGE COUNTY
COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation
("Developer").
RECITALS
A. City is responsible for the use of certain funds ("HOME Funds") made available
to the City by the United States Department of Housing and Urban Development("HUD") under
the Home Investment Partnership Program (the "HOME Program").
B. Developer is certified with the City as a Community Housing Development
Organization ("CHDO").
C. The property subject to this and other applicable HOME Agreements is the real
property commonly known as 7792 Barton Drive, Huntington Beach, CA 92647, which is four
units of Affordable Rental Housing, consisting of four two-bedroom units, to be restricted to two
very low and two low income households.
D. City and Developer now desire to place restrictions upon the use and operation of
the property, through various HOME Agreements, as referenced herein, in order to ensure that
the property shall be operated continuously as an Affordable Housing Project available for rental
by very low and low income persons in accordance with HOME regulations and the terms set
forth below.
NOW THEREFORE, in consideration of the promises and covenants contained herein,
the above recitals, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
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AGREEMENT
1. DEFINITIONS
1.1 Defined Terms
The following terms, as used in this Agreement, will have the meaning given unless
expressly provided to the contrary:
"Affiliate" means (i) any party directly or indirectly controlling, controlled by or under
common control with another party, (ii) any party owning or controlling 10% or more of the
outstanding voting securities of such other party, (iii) any officer, director or partner of such
party, or(iv) if such other party is an officer, director or partner, any company for which such
party acts in any such capacity.
"Agreement" or any reference to this "Agreement" means this HOME Affordable
Housing Agreement executed by and between City and Developer, including all exhibits
attached hereto, which exhibits are incorporated herein by this reference and all other documents
incorporated herein by reference.
"Approved Title Conditions" means title that is subject to current property taxes and
assessments, easements and other encumbrances specifically approved by the City Manager.
"Area Median Income" means the area median income of the Orange County primary
metropolitan statistical area (PMSA), with adjustments for household size, as estimated annually
by the United States Department of Housing and Urban Development pursuant to Section 8 of
the United States Housing Act of 1937, as amended.
"Assignment of Agreements" means the assignments by Developer to City of plans,
contracts and permits, substantially in the form attached hereto as Exhibit 10.
"Assignment of Rents and Leases" means a document substantially in the form attached
hereto as Exhibit 11.
"City" means the City of Huntington Beach, a municipal corporation of the State of
California, and any assignee of, or successor to, the rights, powers, and responsibilities of City.
"City Manager" means the individual duly appointed to the position of City Manager of
the City, or authorized designee. Whenever an administrative action is required by City to
implement the terms of this Agreement, the City Manager, or an authorized designee, will have
authority to act on behalf of City, except with respect to matters reserved under California law or
the City's Charter wholly for City Council determination.
"Completion" means, with regard to rehabilitation of the Improvements, the satisfaction
of each of the following events: (1) the City will have determined that rehabilitation of the
Improvements has been completed substantially in accordance with the plans approved by the
City (as may be modified in accordance herewith), (ii) certification by the Project architect, or if
there is no Project architect, by the Developer, that rehabilitation of the Improvements (with the
exception of minor"punch list" items) has been completed in a good and workmanlike manner
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and substantially in accordance with the approved plans and specifications; (iii) if required by the
City in its regulatory capacity,temporary or permanent certificates of occupancy will have been
issued by the City with respect to all of the Units, (iv) the time for Developer's contractor,
suppliers and subcontractors to file a claim pursuant to Civil Code Sections 3115-3117 has
expired or Developer has delivered to the City unconditional lien releases for its contractor,
suppliers and subcontractors, and any mechanic's liens that have been recorded or stop notices
that have been delivered have been paid, settled or otherwise extinguished, discharged, released,
waivered, bonded around or insured against, (v) a notice of completion pursuant to Civil Code
Section 3117 has been duly recorded in the land records of Orange County, and (vi) the units are
fit for occupancy. Upon Completion of the Project, the City and Developer will attach an
addendum to this Agreement setting forth the date of Completion for purposes of determining the
maturity date of the HOME Loan and the termination date of the HOME Affordability Period.
"County" means Orange County.
"Days" means calendar days and the statement of any time period herein will be
calendar days and not working days, unless otherwise specified.
"Developer" means ORANGE COUNTY COMMUNITY HOUSING CORPORATION,
a California nonprofit public benefit corporation, and any assignee of or successor to its rights,
powers and responsibilities approved by the City or permitted by this Agreement.
"Effective Date" means the date this Agreement is executed by the City, which date will
be set forth opposite the signature of the City Manager.
"Eligible Tenant" means any person entitled to rent a HOME Designated Unit as set
forth in the HOME Regulatory Agreement
"Environmental Indemnity" means an instrument substantially in the form attached to
this Agreement as Exhibit 9.
"Financing Event" means the point in time when all conditions precedent to the
recording of the City's HOME Loan Documents have been satisfied.
"Force Majeure" or "Force Majeure Event" means the following events, provided
that they actually delay and interfere with the timely performance of the matter to which it would
apply and despite the exercise of diligence and good business practices are or would be beyond
the reasonable control of the party claiming such interference: war; insurrection; strikes; lock-
outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation including litigation challenging the validity of this transaction of
any element thereof, unusually severe weather; inability to secure necessary labor, materials or
tools,provided that such inability is not caused by the party claiming a Force Majeure Delay;
delays of any contractor, subcontractor, or suppliers, provided that such delay is not caused by
the party claiming a Force Majeure Delay; acts of the other party; acts or failure to act of any
Governmental Agency (except acts or failure to act of the City will not excuse performance by
the City); the imposition of any applicable moratorium by a Governmental Agency; or any other
causes which despite the exercise of diligence and good business practices are or would be
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beyond the reasonable control of the party claiming such delay and interference.
Notwithstanding the foregoing, none of the foregoing events will constitute a Force Majeure
Event unless and until the party claiming such delay and interference delivers to the other party
written notice describing the event, its cause, when and how such party obtained knowledge, the
date the event commenced, and the estimated delay resulting therefrom. Any party claiming a
Force Majeure Delay will deliver such written notice within ten (10) business days after it
obtains actual knowledge of the event.
"Force Majeure Delay" means any delay in taking any action required by this
Agreement, proximately caused by the occurrence of any Force Majeure Event.
"Governmental Approvals" means and include any and all general plan amendments,
zoning approvals or changes, required approvals and certifications under the California
Environmental Quality Act, tentative and final tract maps, variances, conditional use permits,
demolition permits, excavation/foundation permits, grading permits, building permits, inspection
reports and approvals, certificates of occupancy, and other approvals,pen-nits certificates,
authorizations, consents, orders, entitlements, filings or registrations, and actions of any nature
whatsoever required from any Governmental Agency in order to commence and complete the
Proj ect.
"Governmental Agency" means the United State, the State of California, the County of
Orange, the City of Huntington Beach or any other political subdivision in which the Property is
"Hazardous Materials" has the meaning set forth in the Environmental Indemnity.
"HOME Deed of Trust" means the Deed of Trust securing the HOME Loan,
substantially in the form attached hereto as Exhibit 7.
"HOME Designated Units" means the "floating" four (4) two bedroom units that shall
be rented during the HOME Affordability Period as set forth herein and in accordance with
the HOME Program. As permitted by 24 CFR §92.252(b), the City is requiring that two of the
HOME Designated Units be occupied by Very Low Income Households at Low HOME Rents,
an amount which is in excess of the twenty percent (20%) of the total Units assisted by HOME
funds required by the HOME Program to be rented at Low HOME Rents.
"HOME Funds" means the City's allocation of funds from the HOME Investment
Partnership Program created by the National Affordable Housing Act of 1990.
"HOME Loan" means the City's loan of HOME Funds to Developer in a principal
amount of SEVEN HUNDRED EIGHTY-ONE THOUSAND TWO HUNDRED TWENTY
DOLLARS ($781,220), as evidenced by the HOME Promissory Note and secured by the HOME
Deed of Trust pursuant to this Agreement.
"HOME Loan Documents" means this Agreement, the HOME Promissory Note, the
HOME Deed of Trust, the HOME Regulatory Agreement, the Environmental Indemnity, the
Assignment of Rents and Leases, the Assignment of Agreements and the UCC1 Financing
Statement.
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"HOME Promissory Note" means that certain Promissory Note evidencing the HOME
Loan, substantially in the form attached hereto as Exhibit 6.
"HOME Regulatory Agreement" means the Regulatory Agreement and Declaration of
Covenants and Restriction substantially in the form attached hereto as Exhibit 8, to be recorded
at the Financing Event. The HOME Regulatory Agreement will unconditionally be and at all
times remain prior and superior to any lien hereafter recorded against the Property.
"HOME Regulations" means 24 CFR Part 92, as amended from time to time.
"HOME Rent" means rental rates not to exceed the applicable rent limits set forth by the
HOME Program in 24 CFR 92.252(a) and 24 CFR 92.252(b). HOME Rent must include a
reasonable utility allowance for tenant paid utilities based on.
(1) In the case of Very-Low Income Unit, the rent must meet the following:
The rent does not exceed the lesser of(1) 30 percent of the annual
income of a family whose income equals 50 percent of the median income for the area, as
determined by HUD, with adjustments for smaller and larger families, as provided by HUD
(Low HOME Rent); or(2) the fair market rent for existing housing for comparable units in the
area as established by HUD under 24 CFR 888.111, with adjustments for the number of
bedrooms in the unit; or
(2) In the case of Low Income Unit, the rent must meet the following:
a. The rent does not exceed the lesser of(1) 30 percent of the annual
income of a family whose income equals 60 percent of the median income for the area, as
determined by HUD, with adjustments for smaller and larger families, as provided by HUD
(High HOME Rent); or (2) the fair market rent for existing housing for comparable units in the
area as established by HUD under 24 CFR 888.111, with adjustments for the number of
bedrooms in the unit.
"HOME Restricted Period" means fifteen (15) years from the date of Completion of
the Project.
"Improvements" means and includes any construction, demolition, remediation and
grading existing or done on the Property, if any, as well as all buildings, structures, fixtures,
foundations, excavation, parking, landscaping, underground installations, and any other off site
work or improvement existing on the Property, and construction and improvement of whatsoever
character undertaken or constructed on, around, under, over or adjacent to the Property by
Developer.
"Lease" means the lease entered into between Developer and an Eligible Tenant of a
Unit.
"Low Income Household" means an adjusted income which does not exceed sixty
percent (60%) of the Area Median Income, adjusted for household size, as published by HUD.
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"Net Proceeds" means the amount, if any, by which a refinancing exceeds the amount
needed to repay a Senior Loan in full, including principal and interest, any early redemption or
prepayment penalty, and customary and reasonable fees and costs of the transaction.
"Operating Costs" has the same meaning as the definition of Annual Operating
Expenses set forth in the HOME Promissory Note.
"Permitted Transfer" means any Transfer that is approved by the city or expressly
permitted by the terms of this Agreement.
"Plans" means any architectural and construction plans and drawings prepared on behalf
of Developer for the Project in accordance with this Agreement.
"Person" means an individual, partnership, limited partnership, trust, estate, association,
corporation, limited liability company or other entity, domestic or foreign.
"Project" means the acquisition of the Site and rehabilitation of the Improvements on the
Property as described in the Scope of Work and the subsequent rental of the HOME Designated
Units to Eligible Tenants at HOME Rent for a period of not less than 15 years, as more
particularly described in the HOME Regulatory Agreement.
"Project Budget" means the anticipated sources and uses of funds for the Project as set
forth in Exhibit 4. The Project Budget and Developer's proposed method of financing will be
subject to change from time-to-time, subject to the prior written approval of Developer and the
City Manager or designee, which will not be unreasonably withheld, and subject to and
conditioned on such further review and approval by the City Council as is needed to satisfy
applicable law, policies and procedures, upon which approval the Project Budget will be
replaced by the approved revised Project Budget.
"Project Costs" means all costs which are actually incurred by Developer for the
Project, and will include, without limitation, all of the items of cost set forth in the Project
Budget and similar costs, fees and expenses as approved by the City Manager, but not including
Operating Costs.
"Property" means certain real property located in the City of Huntington Beach, County
of Orange, State of California, commonly known as 7792 Barton Drive, Huntington Beach,
Californian, and legally described in Exhibit 1 and depicted on the Site Map attached hereto as
Exhibit 2.
"Property Manager" means a property manager engaged by Developer to manage the
Property and approved by City.
"Schedule of Performance" means that certain schedule attached hereto as Exhibit 5
setting forth the times upon which performance by the parties under this Agreement is due.
"Scope of Work" means that certain exhibit attached hereto as Exhibit 3.
"Section 3" means and refers to Section 3 of the Housing and Urban Development Act of
1968, 12 USC 1701u, as amended.
"Section 3 Acknowledgment" means an acknowledgement in the form of Exhibit 13.
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"Section 3 Business" means a business where fifty-one percent (51%) or more of the
business is owned by a Section 3 Resident, or a business that has thirty percent(30%) or more of
its full-time employees who are Section 3 Residents.
"Section 3 Clause" means the following: For purposes of this Section 3 Clause
definition and compliance thereto, whenever the word"contractor" is used it shall mean and
include, as applicable, Developer, contractor(s), and subcontractor(s). The particular text to be
utilized in (a) any and all contracts of any contractor doing work covered by Section 3 entered
into on or after the Effective Date and (b) notices to contractors doing work covered by Section 3
pursuant to contracts entered into prior to the Effective Date, if any, shall be substantially in the
form of the following, as reasonably determined by City, or as directed by HUD or its
representative, and shall be executed by the applicable contractor under penalty ofperjury:
(1) "The work to be performed under this contract is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended,
12 U.S.C. 170lu ("Section 3"). The purpose of Section 3 is to ensure that employment
and other economic opportunities generated by HUD assistance or HUD-assisted projects
covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very
low-income persons, particularly persons who are recipients of HUD assistance for housing.
(ii) The Parties to this contract agree to comply with HUD's regulations in 24
CFR Part 135, which implement Section 3. As evidenced by their execution of this contract,
the Parties to this contract certify that they are under no contractual or other impediment that
would prevent them from complying with the Part 135 regulations.
(ill) The contractor agrees to send to each labor organization or representative
of workers with which the contractor has a collective bargaining agreement or other
understanding, if any, a notice advising the labor organization or workers' representative
of the contractor's commitments under this Section 3 clause, and will post copies of notices in
conspicuous places at the work site where both employees and applicants for training and
employment positions can see the notice. The notice shall describe the Section 3
preference, shall set forth minimum number of job titles subject to hire, availability of
apprenticeship and training positions, the qualifications for each; and the name and location
of person(s) taking applications for each of the positions; and the anticipated date the work
shall begin.
(iv) The contractor agrees to include this Section 3 clause in every
subcontract subject to compliance with regulations in 24 CFR Part 135, and agrees to take
appropriate action, as provided in an applicable provision of the subcontract or in this
Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24
CFR Part 135. The contractor will not subcontract with any subcontractor where the
contractor has notice or knowledge that the subcontractor has been found in violation of the
regulations in 24 CFR Part 135.
(v) The contractor will certify that any vacant employment positions,
including training positions, that are filled (a) after the contractor is selected but before
the contract is executed, and (b) with persons other than those to whom the regulations of
24 CFR Part 135 require employment opportunities to be directed, were not filled to
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circumvent the contractor's obligations under 24 CFR Part 135.
(vi) Noncompliance with HUD's regulations in 24 CFR Part 135 may result
in sanctions, termination of this contract for default, and debannent or suspension from future
HUD assisted contracts.
(vii) With respect to work performed in connection with Section 3 covered
Indian Housing assistance, section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this
contract. Section 7(b) requires that to the greatest extent feasible, (a) preference and
opportunities for training and employment shall be given to Indians, and (b) preference in the
award of contracts and subcontracts shall be given to Indian organizations and Indian-
owned Economic Enterprises. Parties to this contract that are subject to the provisions of
Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent feasible,
but not in derogation of compliance with section 7(b)."
"Section 3 Resident" means a resident of the City of Huntington Beach who is living in
public housing, or receiving housing assistance vouchers, or whose Household meets HUD's
definition of a low income Household(e.g., a Household whose annual income does not exceed
eighty percent (80%) of the County median income adjusted for Household size as determined
by HUD).
"Senior Loan" means a loan from a third parry for the purchase and rehabilitation of the
Property in the approximate amount of$250,000.
"State" means the State of California.
"Title Company" means Fidelity National Title Company or another title insurance
company mutually acceptable to City and Developer.
"Transfer" means:
(1) Developer's assignment or attempted assignment of this
Agreement or any right herein.
(2) The sale, agreement to sell, transfer or conveyance of the Property,
the Proj ect or any portion thereof or interest therein, whether voluntary, involuntary, by
operation of law or otherwise, the execution of any installment sale contract or similar
instrument affecting all or a portion of the Property or Project, the lease of all or substantially all
of the Property or Project, except as provided in subparagraph (iv) below, or the appointment of
a receiver or trustee to operate or exercise direct or indirect control over any portion of or interest
in the Project or to operate or exercise direct or indirect control over Developer or any interest in
Developer.
(3) "Transfer" also includes the transfer, assignment, hypothecation or
conveyance of legal or beneficial ownership of any interest in Developer, or any conversion of
Developer to an entity form other than that of Developer at the time of execution of this
Agreement, except that, neither (a) a cumulative change in ownership interest of Developer of
forty-nine percent (49%) or less, or (b) transfer to a limited liability company (LLC) of which
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Orange County Community Housing Corporation is, and remains, the sole member, will be
deemed a "Transfer" for purposes of this Agreement.
(4) Notwithstanding paragraphs (1) and (2), "Transfer" will not
include the following Permitted Transfers:
a. The leasing for occupancy of all or any part of the Property
or Project in accordance with this Agreement and the HOME Regulatory Agreement; and
b. Any refinancing that repays any portion of a Senior Loan
(referred to herein as a"Take-out Loan"), if the City Manager or designee reasonably determines
(which determination shall not be unreasonably withheld, conditioned or delayed) that the
resulting loan-to-value ratio (including the Take-out Loan, any of the remaining Senior Loan not
repaid by the refinancing, and the HOME Loan) will not exceed the loan to value ratio in effect
at the time of the Financing Event for the Project, and the repayment terms of the Take-out Loan
do not materially impair the Trustor's ability to repay the HOME Loan.
"UCC1 Financing Statement" means the financing statement(s) to be filed with the
California Secretary of State's Office at the Financing Event in connection with the HOME
Loan. The Developer hereby consents to the filing of the UCC1 Financing Statement.
"Units" means four(4) two-bedroom dwelling units comprising the Project.
"USA Patriot Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-
56, 115 Stat. 272 (2001), as amended from time to time.
"Very-Low Income Household" means an adjusted income which does not exceed fifty
percent (50%) of the Area Median Income, adjusted for household size, as published by HUD.
1.2 Singular and Plural Terms
Any defined term used in the plural herein shall refer to all members of the
relevant class and any defined term used in the singular shall refer to any number of the members
of the relevant class.
1.3 Accounting Principals
Any accounting term used and not specifically defined herein shall be construed
in conformity with, and all financial data required to be submitted herein shall be prepared in
conformity with, generally accepted accounting principles applied on a consistent basis or in
accordance with such other principles or methods as are reasonably acceptable to the City
Manager.
1.4 References and Other Terms
Any reference to any document shall include such document both as originally
executed and as it may from time to time be modified. References herein to Sections and
Attachments shall be construed as references to this Agreement unless a different document is
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named. References to subparagraphs shall be construed as references to the same Section in
which the reference appears. The term "document" is used in its broadest sense and encompasses
agreements, certificates, opinions, consents, instruments and other written material of every
kind. The terms "including" and"include"mean"including (include), without limitation."
1.5 Attachments Incorporated; Attachments Additional Consideration
All Attachments, as now existing and as the same may from time to time be
modified, are incorporated herein by this reference. Each Attachment or agreement delivered by
Developer or another party substantially in the form of an Attachment hereto in connection with
this Agreement is required as and constitutes consideration for City to make the HOME Loan.
2. SUBJECT OF THIS AGREEMENT
2.1 Purpose of the Agreement
Developer has applied to the City for certification as a Community Housing
Development Organization("CHDO"), and has submitted a proposal for use of HOME Program
funds for a CHDO-eligible project under HOME Program regulations and that proposal has been
approved by the City, subject to and conditioned upon the terms of this Agreement. The purpose
of this Agreement is to promote affordable housing by providing the HOME Loan to assist
Developer in the acquisition and rehabilitation of the Improvements on the Property for its
operation as affordable rental housing for Very-Low and Low Income Households.
The Project pursuant to this Agreement and the fulfillment generally of this
Agreement are in the best interest of the City and the welfare of its residents, and are in
accordance with the public purposes and provisions of applicable federal, state and local laws
and requirements under which the Project is being undertaken and is being assisted.
The HOME Loan is conditioned upon the use and operation of the Property for
not less than fifteen(15) years as rental housing, with all four of the Units restricted to
occupancy by Very-Low and Low Income Households in accordance with the HOME
Regulatory Agreement.
2.2 Cfty
The City is THE CITY OF HUNTINGTON BEACH, CALIFORNIA, a municipal
corporation, and includes any assignee or nominee. The address of the City for the purpose of
receiving notices pursuant to this Agreement is:
The City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Facsimile Number: 714-374-1590
Attention: Deputy Director of the Office of Business Development
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With a copy to:
City Attorney's Office
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
2.3 Developer
The Developer is ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation and includes any permitted
assignee or nominee. The address of Developer for the purpose of receiving notices pursuant to
this Agreement is:
Orange County Community Housing Corporation
501 Golden Circle, Suite 200
Santa Ana, CA 92705
Facsimile number: 714-558-0423
Attention: Executive Director
2.4 Prohibition Against Transfers: Right of First Refusal.
A. The qualifications and identity of the Developer are of particular concern
to the City. It is because of those qualifications and identity that the City has entered into this
Agreement with the Developer. No voluntary or involuntary successor in interest of the
Developer will acquire any rights or powers under this Agreement except as expressly set forth
herein.
B. Developer agrees that Developer will not sell the Property during the term
of the HOME Regulatory Agreement, unless and until Developer has given to City notice in
writing of its intent to sell, specifying the identity of the prospective buyer and the price and
terms of the contemplated sale. Within ninety (90) days after Developer gives City written
notice of Developer's intent to sell, City will have the right to purchase the Property at the same
price and on the same terms and conditions set forth in Developer's written notice of intent to
sell. The City may assign the right granted to it under this paragraph to an entity of its choosing.
To exercise this right, City or its assignee must, within the same ninety (90) day period, deposit
in escrow with any escrow company in Orange County, California, all moneys and instruments
required by the terms of the Developer's notice of intent to sell to be paid or delivered to
Developer on close of escrow and will also give Developer written notice of the deposit. If City
or its assignee does not exercise the right in accordance with the provisions of this Section,
Developer may sell the Property to the prospective buyer for the price and on the terms contained
in the notice; provided, however, that City must have reasonably approved such prospective
buyer in advance in writing, including the City's determination that the prospective buyer is a
certified CHDO and has satisfactory experience in the field of low-income housing (including
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the management of properties with income and affordability restrictions). If for the reason the
Properly is not sold to the prospective buyer, on receiving any subsequent offer from any third
party that is acceptable to Developer, Developer will give City a right to purchase the Property
on the same terms as set forth above.
C. For the reasons cited above, the Developer represents and agrees for itself
and any successor in interest that, except for the Permitted Transfers set forth in the definition of
"Transfer" or as otherwise expressly permitted under this Agreement, without the prior written
approval of the City (not to be unreasonably withheld, conditioned or delayed), there will be no
significant change in the ownership of the Developer.
D. The Developer will promptly notify the City of any and all changes
whatsoever in the identity of the parties in ownership and/or in control of the Developer or the
degree thereof, of which it or any of its officers have been notified or otherwise have knowledge
or information. The City may exercise any and all available remedies, including termination of
this Agreement, if there is any significant change (voluntary or involuntary) in membership,
ownership, management or control, of the Developer, including but not limited to the
appointment of a receiver, (other than changes occasioned by the death or incapacity of any
individual or as otherwise expressly permitted by this Agreement), without the prior written
consent of the City.
E. Developer will not Transfer this Agreement, the Property or the Project,
without prior written approval of the City Manager, except as expressly permitted by this
Agreement. Any proposed transferee will have the qualifications and financial responsibility
necessary and adequate as may be reasonably determined by the City to fulfill the obligations
undertaken in this Agreement by the Developer. Any such proposed transferee, by instrument in
writing satisfactory to the City and in form recordable among the land records, for itself and its
successors and assigns, and for the benefit of the City will expressly assume all of the obligations
of the Developer under this Agreement and agree to be subject to all conditions and restrictions
applicable to the Developer in this Agreement. There will-be submitted to the City for review all
instruments and other legal documents proposed to affect any such Transfer, and if approval is
required and if such Transfer is approved by the City Manager, the City's approval will be
indicated to the Developer in writing.
F. In the absence of specific written agreement by the City, no Transfer, or
approval thereof by the City, will be deemed to relieve the Developer or any other party from
any obligations under this Agreement.
G. Consent to any Transfer will not be deemed to be a waiver of the right to
require consent to future or successive Transfers.
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H. The provisions of this Section 204 will be of no force or effect as of the
expiration of the HOME Regulatory Agreement.
3. RELOCATION OBLIGATIONS
3.1 Relocation Plan
If temporary or permanent relocation of existing tenants and/or persons residing
in or on the Property is required to implement the Project, Developer will comply with the
provisions of a relocation plan prepared by Developer and reviewed and approved by the City
("Relocation Plan"). The Relocation Plan will comply with the requirements of the Uniform
Relocation Act and the California Relocation Assistance Act and any guidelines promulgated in
connection therewith.
3.2 Relocation Activities and Costs
Developer will comply with the requirements of all applicable relocation laws,
including, but not limited to, the Uniform Relocation Act and the California Relocation
Assistance Act, and will comply with related tenant notice requirements and will provide the
City with true and correct copies of such notices to tenants. Developer will also retain all
required records and the originals and/or copies of tenant notices in its files as mandated by
applicable law. The cost of complying with all applicable relocation requirements for the Project
will be the responsibility of Developer.
4. FINANCING
4.1 The Project Budget
The cost of the Rehabilitation is set forth in the Project Budget attached to this
Agreement as Exhibit 4. The Project Budget and Developer's proposed method of financing will
be subject to change from time-to-time, subject to the prior written approval of Developer and
the City Manager or designee, which will not be unreasonably withheld, and subject to and
conditioned on such further review and approval by the City Council as is needed to satisfy
applicable law, policies and procedures, upon which approval the Project Budget will be
replaced by the approved revised Project Budget.
Developer has proposed, and the City has approved, the Project budget appended to this
Agreement. Developer acknowledges that the City is relying on Developer's experience and
expertise in establishing the costs for the Project and Developer represents that the Project
Budget is based on Developer's best, good faith estimate of the costs that are likely to be
incurred for the Project. Developer will be responsible during the Rehabilitation to provide
funds if and as needed to pay for cost overruns and contingencies not otherwise funded by the
HOME Loan. Developer acknowledges and agrees that the City will have no obligation to
increase the amount of the HOME Loan.
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4.2 The City Assistance
The City agrees to lend to Developer, and Developer agrees to borrow from the
City, the HOME Loan, with interest as provided in the HOME Promissory Note. The HOME
Loan will be secured by the HOME Deed of Trust. Developer agrees to repay the HOME Loan
as set forth in the HOME Promissory Note. Developer agrees to use the HOME Loan
exclusively to pay eligible Project costs approved by the City.
4.3 Priority City Lien
The HOME Deed of Trust will be senior to any other lien or security interest in
the Property with the sole exception of the following senior encumbrances (referred to herein as
a"Senior Loan"): (1) any deed of trust or other encumbrance of record as of the date of the
Financing Event which is shown in the title insurance policy described in the following
paragraph and approved by the City as a permitted encumbrance; or(ii) a deed of trust or other
encumbrance securing any additional loan of funds to be used in the rehabilitation work, as
shown in the Project Budget and approved in advance by the City. Without the express written
consent of the City Manager or his or her designee, Developer will not place any encumbrances,
or permit any encumbrances to be placed, on or against title to the Project, including security
interests that are subordinate to the HOME Deed of Trust.
On or prior to the Financing Event, the Title Company will record the HOME
Deed of trust, the HOME Regulatory Agreement and such other instruments and documents as
the City and Developer may reasonably request, or will issue to the City, if requested by City, a
the City's sole discretion and at the expense of Developer: an ALTA lender's policy of the
HOME Loan, insuring that Developer is the fee owner of the Property and that the HOME Deed
of Trust constitutes a valid lien over the Property, and all right, title, interest and estate of
Developer therein, subordinate and subject only to the Senior Loan, if any, and other exceptions
which the City approves in writing in its sole discretion.
4.4 Disbursement of HOME Loan
No portion of the HOME Loan will be disbursed until all conditions precedent to
the disbursement of the HOME Loan described in Section 4.5, below have been satisfied. Upon
satisfaction of all conditions precedent, the City will disburse the HOME Loan, as needed, for
the payment of acquisition costs, provided in the Project Costs as set forth in the Project Budget,
in accordance with procedures approved by the City Manager or his designee.
All of the HOME Loan proceeds shall be disbursed through Escrow to finance the
acquisition of the Property. The HOME Loan proceeds shall not be used for any purpose other
than for acquisition costs of the Property. The City allows for eligible costs to be paid by HOME
Funds that were incurred not more than 24 months prior to the HOME Funds commitment date
of the HOME Promissory Note execution in accordance with HOME Regulations.
Developer will carry out the acquisition and rehabilitation work, and manage and
operate the Property in conformity with all applicable requirements of the HOME Program as set
forth in the HOME Regulatory Agreement.
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4.5 Conditions Precedent to Closinc
The City will not be obligated to make any disbursements of any portion of the
HOME Loan unless and until all of the following conditions precedent are satisfied on or before
the date set forth in the Schedule of Performance:
(1) Developer will have satisfied all of the HOME Regulation and City
requirements to be certified as a CHDO.
(2) Developer will submit, and the City Manager or designee will have
approved, the rehabilitation contract described in Section 5.1.
(3) Developer will prepare and submit, and the City Manager or designee will
have approved, a final Project Budget, to be current as of the Financing Event, demonstrating to
the satisfaction of the City Manager or designee that the HOME Loan will be sufficient to pay all
Project Costs.
(4) Developer will obtain all licenses, franchises, permits, governmental
approvals and agreements required for the rehabilitation work.
(5) Developer will deliver to the City Manager or designee a loan draw-down
schedule showing a detailed breakdown of the estimated periods of commencement and
completion of the rehabilitation work.
(6) Developer will have executed and delivered to the City Manager or
designee the HOME Regulatory Agreement, the HOME Promissory Note, the HOME Deed of
Trust, the Assignment of Rents, the Environmental Indemnity and the other HOME Loan
Documents.
(7) Developer will have delivered evidence acceptable to the City Manager or
designee that Developer has obtained the insurance policies required by Section 5.10 and will
have delivered the required endorsements.
(8) If required for Developer's compliance with applicable relocation laws,
Developer will have delivered evidence satisfactory to the City Manager or designee that the
Developer has completed the relocation of existing tenants on the Property in accordance with
the Relocation Plan approved by the City.
(9) The City Manager or designee will have determined that Developer is in
full compliance with the terms and conditions of this Agreement and all documents and
instruments referred to herein or executed by Developer in furtherance of this Agreement.
(10) The title insurance company will be prepared to issue to the City the
lender's title policy.
(11) Developer will prepare and submit, and the City Manager or designee will
approve,the Maintenance Program required by Section 6.3 and the Management Plan required
zn
by Section 6.2 of this Agreement.
(12) Developer will prepare and submit, and the City Manager or designee will
approve,the Annual Project Budget required by Section 6.2C.
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(13) Developer will prepare and submit, and the City Manager or designee will
approve, a form of tenant lease that conforms to the requirements of the HOME Regulatory
Agreement.
The City may waiver any condition of closing set forth herein, however, any such
waiver must be expressly made in writing. The decision to waiver any condition of closing will
be in the sole discretion of the City and the decision to waiver any requirement may be
conditioned upon its satisfaction at a later date and/or upon the substitution of another condition.
The disbursement of any portion of the HOME Loan prior to fulfillment of one or more of the
foregoing conditions will not be construed as a waiver of such conditions, and the City reserves
the right to require their fulfillment prior to making any subsequent disbursements.
5. REHABILITATION OF THE IMPROVEMENTS
5.1 Scope of Work
The Improvement will be rehabilitated in accordance with and within the
limitations established in the Scope of Work and plans approved by the City pursuant to this
Agreement and permits issued by the City. It is anticipated that Developer will contract for
performance of specific activities, including but not limited to activities such as rehabilitation
work and management of the Units. Such contracts will not in any way diminish or waive
Developer's obligations under this Agreement.
5.2 Construction Drawings and Related Documents
A. If construction drawings are required for City permitting purposes,
Developer will prepare and submit construction drawings and related documents for the
rehabilitation of the Improvements to the City for review(including, but not limited to,
architectural review) and written approval at the times established in the Schedule of
Performance. The construction drawings and related documents will be submitted in two stages,
preliminary and final drawings, plans, and specifications. Final drawings, plans, and
specifications are hereby defined as those in sufficient detail to obtain a building permit. Any
items so submitted and approved in writing by the City will not be subject to subsequent
disapproval. City approval will not be unreasonably withheld, conditioned or delayed.
B. Progressively detailed plans will be approved by the City if exterior spaces
and areas open to public view do not vary and the plans otherwise do not materially vary from
previously approved plans, and if they are a logical evolution of previously approved plans and
conform to the Scope of Work. In the event of disapproval by the City of any plans submitted by
Developer, City will promptly communicate in writing to Developer all reasons for such
disapproval and all requirements for subsequent approval of revised plans.
C. During the preparation of all drawings and plans, City staff and Developer
will hold regular progress meetings to coordinate the preparation of, submission to, and review
of construction plans and related documents by the City. City staff and Developer will
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communicate and consult informally as frequently as is necessary to insure that the formal
submittal of any documents to the City can receive prompt and speedy consideration.
D. If any revisions or corrections of plans approved by the City will be
required by another governmental official, agency, department or bureau having jurisdiction over
the Property, Developer and the City will reasonably cooperate in efforts to obtain waiver of
such requirements or to develop a mutually acceptable alternative. Neither the City nor
Developer will unreasonably withhold approval of a mutually acceptable alternative.
5.3 City Approval of Plans, Drawings and Related Documents
As provided in Section 5.2, the City will have the right of reasonable review
(including, but not limited to, architectural review) of all plans, drawings and related documents
for the construction of the Property, including any proposed changes therein. The City Manager
or designee will approve or disapprove such plans, drawings, and related documents referred to
in this Agreement (and any proposed changes therein), in writing, within the times established in
the Schedule of Performance. Any disapproval will state, in writing, the reasons for disapproval.
Developer, upon receipt of disapproval will revise such portions of the plans, drawings or related
documents in a manner that satisfactorily addresses the reasons for disapproval and resubmit
such revised portions to the City as soon as possible after receipt of the notice of disapproval.
The City will approve or disapprove such revised portions in the same manner and within the
same times as provided in this Section for approval or disapproval of plans, drawings, and
related documents initially submitted to the City. No matter once approved will be subsequently
disapproved.
5.4 Cost of Work
Except as otherwise expressly set forth in this Agreement, the cost of acquisition
and rehabilitating the Improvements will be the responsibility of Developer. The Project Costs
are set forth in the Project Budget and the Scope of Work, which will be subject to change from
time-to-time as mutually agreed by the City and Developer. Transfers of funds between the line
items described in the Scope of Work will require the prior approval of the City Manager or his
or her designee. If Developer determines that the funds designated for abatement of hazardous
substances will not be required for that purpose, Developer may propose another use for those
funds, which could include work not described in the Scope of Work, but which must be
approved in advance by the City.
The Developer has proposed, and the City has approved, the Project Budget
appended to this Agreement. Developer acknowledges that the City is relying on Developer's
experience and expertise in establishing the costs for the Project and Developer represents that
the Project Budget is based on the best, good faith estimate of the Developer of the costs that are
likely to be incurred for the Project based upon the information now available to the Developer.
The Developer will use the City's loan of HOME Funds exclusively for the
payment of acquisition costs.
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5.5 Schedule of Performance
A. Developer and City will perform all acts respectively required of such
party in this Agreement within the times provided in the Schedule of Performance.
B. After the Construction Financing Event, Developer Arill promptly begin
and thereafter diligently prosecute to completion the rehabilitation of the Improvements as
provided in the Scope of Work. Developer will begin and complete all rehabilitation work
within the times specified in the Schedule of Performance, with such reasonable extensions of
said times as may be granted by the City. The Schedule of Performance is subject to revision
from time to time as mutually agreed upon in writing by Developer and the City Manager.
C. During periods of construction, Developer will submit to the City a written
report of the progress of the construction when and as requested by the City. The report will be
in such form and detail as may be reasonably required by the City and will include a reasonable
number of construction photographs (if requested) taken since the last report by Developer.
5.6 Accessibility Requirements
Developer must ensure that the Project will be rehabilitated and operated to
comply with all federal, state, and local requirements for access for disabled persons that apply
to the rehabilitation of existing multi-family rental units.
5.7 Local, State and Federal Laws
A. Developer hereby agrees to carry out development, construction (as
defined by applicable law) and operation of the Project on the Property, including, without
limitation, any and all public works (as defined by applicable law), in conformity with all
applicable local, state and federal laws, rules and regulations and all applicable federal and state
labor laws (including, without limitation, any requirement to pay state prevailing wages).
Developer hereby expressly acknowledges and agrees that the City has never previously
affirmatively represented to the Developer or its contractor(s) for the Project in writing or
otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not
a"public work," as defined in Section 1720 of the Labor Code. Developer hereby agrees that
Developer will have the obligation to provide any and all disclosures, representations,
statements, rebidding, and/or identifications which may be required by Labor Code Sections
1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other
provision of law. Developer hereby agrees that Developer will have the obligation to provide
and maintain any and all bonds to secure the payment of contractors (including the payment of
wages to workers performing any public work) which may be required by the Civil Code, Labor
Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any
other provision of law. The Developer hereby agrees that the Developer will have the obligation,
at the Developer's sole cost, risk and expense, to obligate any parry as may be required by Labor
Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to
time, or any other provision of law. Developer will indemnify, protect, defend and hold
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harmless the City and its officers, employees, contractors and agents, with counsel reasonably
acceptable to City, from and against any and all loss, liability, damage, claim, cost, expense,
and/or"increased costs" (including labor costs,penalties, reasonable attorneys fees, court and
litigation costs, and fees of expert witnesses) which, in connection with the development,
construction (as defined by applicable law) and/or operation 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); (2)
the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted,
adopted or amended from time to time, or any other similar law; (3) failure by Developer to
provide any required disclosure, representation, statement, rebidding and/or identification which
may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law; (4) failure by Developer to provide
and maintain any and all bonds to secure he payment of contractors (including the payment of
wages to workers performing any public work) which may be required by the Civil Code, Labor
Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any
other provision of law; and/or (5) failure by the Developer to obligate any parry as may be
required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law. It is agreed by the parties that, in
connection with the development, construction(as defined by applicable law) and operation of
the Project, including without limitation, any public work (as defined by applicable law),
Developer will bear all risks of payment or non-payment of state prevailing wages and/or the
implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, and/or any other provision of law. "Increased costs" as used in this
Section will have the meaning ascribed to it in Labor Code Section 1781, as the same may be
enacted, adopted or amended from time to time. The foregoing indemnity will survive
termination of this Agreement and will continue after Completion.
B. Developer will be responsible for obtaining all Permits and land use
approvals required by the City for the construction of the Project, ensuring that the use of the
Property for the purposes described in this Agreement complies with the zoning and other City
land use regulations (including any applicable exemptions and/or exceptions) applicable to the
Property at the time of Construction Financing Event.
C. Prior to or concurrently with the Construction Financing Event, Developer
will satisfy all conditions to the issuance of any Permit required for the construction of the
Property. The City will provide reasonable assistance to Developer in obtaining permits from
other governmental agencies with jurisdiction over the Project but will have no liability to
Developer in the event such permits are not obtained in a timely manner.
D. This Agreement is not a "Development Agreement" as provided in Section
65864 et seq. of the California Government Code. Developer will comply with all applicable
conditions of approval required by the City of Huntington Beach in its regulatory capacity.
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5.8 Hazardous Substances
5.8.1 Lead-Based Paint and Asbestos Containing Materials
If the presence of lead-based paint or asbestos hazards on the Property is
discovered during the course of the rehabilitation of the Improvements pursuant to this
Agreement and Developer determines that, with the taking of appropriate precautions and in
compliance with all applicable Hazardous Materials Laws (as such term is defined in the
Environmental Indemnity), Developer can carry out the Project without disturbing such hazards,
then Developer may proceed to do so. If Developer determines that it will not be able to carry
out the Project without disturbing such hazards or if the removal of such hazards is required by
applicable Hazardous Materials Laws, then Developer will prepare and submit to the City a plan,
in compliance with all applicable Hazardous Materials Laws, for the abatement of any such
hazards. Implementation of the plan must qualify the Property for a closure letter or similar
clearance from the appropriate government entity having jurisdiction over the Property
indicating that all lead-based paint and asbestos hazards have been fully abated to the satisfaction
of such governmental entity.
5.8.2 Indemnification
Developer will indemnify, defend, and hold harmless the City and its officers,
employees, agents and representatives (collectively, the "Indemnified Parties") from and against
any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation
of state or federal law occurring after the Construction Financing Event, pertaining to (1) the
storage of Hazardous Substances on the Property or(ii) contamination of the Property by a
release of Hazardous Substances. As a condition precedent to the Construction Financing Event,
Developer will execute and deliver to the City an Environmental Indemnity, substantially in the
form of Exhibit 9 to this Agreement.
5.9 Nondiscrimination During Construction
Developer, for itself and its successors and assigns, agrees that during the
rehabilitation of the Improvements provided for in the Agreement, Developer will not
discriminate against any employee or applicant for employment because of race, color, religion,
sex, or national origin.
5.10 Insurance
Developer will procure and maintain, during the term of this Agreement, at its
sole cost and expense, until the date that City waives any such insurance requirement or
requirements in writing, the following policies of insurance on a Project specific basis:
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5.10.1 Worker's Compensation Insurance
Developer will procure and maintain, during the term of this Agreement,
at its sole cost and expense, until the date that City waives any such insurance requirement or
requirements in writincy, the following policies of insurance on a Project specific basis:
1. Workers' Compensation Insurance. Pursuant to California Labor
Code Section 1861, Developer acknowledges awareness of Section 3700 et seq. of said code,
which requires every employer to be'insured against liability for workers' compensation.
Developer covenants that it will comply with such laws and provisions prior to commencing any
work of construction or construction on the Property. To the extent Developer directly employs
personnel at the Project, Developer will maintain such Workers' Compensation Insurance in an
amount not less than the statutory requirements in California for bodily injury and disease and
must maintain employer's liability coverage in an amount not less than ONE MILLION
DOLLARS ($1,000,000.00). Developer will require all contractors to provide such Workers'
Compensation Insurance for all of the contractors' and subcontractors' employees. Developer
will furnish City with a certificate of waiver of subrogation under the terms of the Workers'
Compensation Insurance and Developer will similarly require all contractors and subcontractors
to waive subrogation.
5.10.2 General Liability and Auto Insurance
Developer will carry general commercial liability insurance, including
coverage for bodily injury, property damage, products/completed operations and blanket
contractual liability in an amount not less than TWO MILLION DOLLARS ($2,000,000.00) per
occurrence and FOUR MILLION DOLLARS ($4,000,000.00) annual aggregate, combined
single limit for bodily injury and property damage. All such insurance will be provided by
insurance companies admitted in California, or if not admitted in California, then reasonably
acceptable to City. Such insurance will name the City and its officers, agents, and employees
acting in their official capacity, as additional insureds. Developer will carry automobile
insurance, including liability coverage for bodily injury and property damage in an amount not
less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence. Developer will require its
insurer to waive its subrogation rights against City and will provide certificates of insurance
evidencing same.
5.10.3 Property Insurance
Developer will obtain and maintain in force, all-perils (to include fire and
vandalism protection) property insurance with extended coverage endorsements thereon, on the
Property, in an amount equal to the full replacement costs and/or value thereof, this policy will
contain a replacement cost endorsement naming City as the insured and will not contain a
coinsurance penalty provision. The policy will contain a lender's loss payable endorsement that
such proceeds will be used to repair or rebuild any Units or other improvements situated on the
Property so damaged or destroyed; and, if not so used, such proceeds will be paid to City. The
proceeds of any such insurance payable to City will be used for rebuilding or repair as necessary
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to restore the site at the sole discretion of City. The policy will name City and its officers,
agents, and employees acting in their official capacity as additional insureds.
5.10.4 Certificate of Insurance; Additional Insured Endorsements
Prior to the Construction Financing Event, Developer will furnish to City
certificates of insurance and additional insured endorsements evidencing the foregoing insurance
coverages as required by this Agreement. Such certificates and endorsements will be subject to
the reasonable approval of the City Attorney and will provide the name and policy number of
each carrier and policy and will state that the policy is currently in force and will promise to
provide that such policies will not be cancelled without thirty (30) days prior written notice to
City.
5.10.5 Flood Disaster Protection Act of 1973
In accordance with the requirements of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4001), the Developer will assure that for activities located in an area
identified by the Federal Emergency Management Act(FEMA) as having special flood hazards,
flood insurance under the National Flood Insurance Program is obtained and maintained as a
condition of financial assistance for acquisition or construction purposes (including
construction).
If Developer fails or refuses to procure or maintain insurance as required by this
Agreement, City will have the right, at City's election, and upon ten(10) days prior notice to
Developer, to procure and maintain such insurance. The premiums paid by City will be treated
as a loan, due from Developer, to be paid on the first day of the month following the date on
which the premiums were paid. City will give prompt notice of the payment of such premiums,
stating the amounts paid and the name of the insured(s).
5.11 Indemnification
During the term of this Agreement, Developer agrees to and will protect, defend,
indemnify and hold harmless the City and its members, officers, officials, employees, agents,
representatives, servants, contractors, successors and assigns from and against all liability, loss,
damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or
as a result of(1) Developer's failure to perform any obligations as and when required by this
Agreement or any document referred to herein, and (ii) the death of any person or any accident,
injury, loss, or damage whatsoever caused to any person or to the property of any person which
will occur on the Property and which will be directly or indirectly caused by the acts of, or any
errors or omissions of, the Developer or its officers, shareholders, directors, members, agents,
servants, employees, contractors, or invitees. Developer will not be responsible for, and the City
will protect, defend, hold harmless and indemnify Developer against any liability, loss, damage,
cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result
of the gross negligence or willful misconduct of the City or its members, officers, officials,
employees, agents, representatives, servants, or contractors.
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5.12 Disclaimer of Responsibility by the City
Except as otherwise expressly provided in this Agreement, the City neither
undertakes nor assumes nor will have any responsibility,right or duty to Developer or to any
third party to review, inspect, supervise, pass judgment upon or inform Developer or any third
party of any matter in connection with the Property, whether with respect to the quality,
adequacy or suitability of the plans, any labor, service, equipment or material furnished to the
Project, any person furnishing the same or otherwise. Developer and all third parties will rely
upon its or their own judgment or information supplied to Developer or to any third party by the
City in connection with such matter is for the public purpose of providing affordable housing,
and neither Developer (except for the purposes set forth in this Agreement) nor any third party is
entitled to rely thereon.
5.13 Rights of Access
The City will have the right, at its sole risk and expense, to enter the Property or
any part thereof at reasonable times and with as little interference as possible, for the purpose of
inspecting the property to determine Developer's compliance with this Agreement. To the fullest
extent allowed by law, all residential leases will provide for such,right of the City. The
representatives of the City entering the Property will be identified in writing in advance by the
City Manager(or his or her designee). Any such entry will be made only after reasonable notice
to Developer, and the City will indemnify and hold Developer harmless from any claims or
liabilities pertaining to such entry. Any damage or injury to the Property proximately caused by
such entry will be promptly repaired at the sole expense of the City.
5.14 Taxes, Assessments, Encumbrances and Aliens
Subject to Developer's right to claim any exemption to which it may be entitled
under State or local law, Developer will be responsible for paying when due all real estate taxes
and assessments, if any, assessed and levied on or against the Property or any portion thereof or
interest therein. Developer will not place, or allow to be placed, on the Property or any portion
thereof or interest therein, any mortgage, trust deed, encumbrance (excluding easements not
unreasonably interfering with the use of the Property) or lien (excluding mechanic's liens paid
prior to foreclosure or liens for current year property taxes not paid) except for Permitted
Transfers. Developer will remove, or will have removed, any levy or attachment made on the
Property (or any portion thereof or interest therein), or will assure the satisfaction thereof within
a reasonable time but in any event prior to foreclosure. Nothing herein contained will be deemed
to prohibit Developer from contesting the validity or amount of any tax, assessment,
encumbrance or lien, nor to limit the remedies available to Developer in respect thereto. The
covenants of Developer set forth in this Section 514 relating to the placement of any
unauthorized mortgage, trust deed, encumbrance or lien,will remain in effect until Completion.
5.15 Rights to Plans
A, All work product prepared pursuant to this Agreement, including(but not
limited to), all Plans, construction documents, soil tests and similar reports, Permits and other
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entitlements are hereby assigned to the City as security for Developer's obligations hereunder.
In the event that this Agreement is terminated by the City following an uncured event of default,
Developer will, within ten(10) days of such termination, transmit all such work product to the
City to the fullest extent possible without representation and warranty.
B. To effectuate the assignment described in the preceding paragraph, prior
to the Construction Financing Event, Developer will execute and deliver to the City an
Assignment of Agreements substantially in the form attached to this Agreement as Exhibit 10 in
a form that is acceptable to the City Manager, granting to the City all of Developer's rights to:
(1) the Plans prepared pursuant to this Agreement; (2) the contracts between Developer and its
architect and between Developer and its general contractor; (3) all Permits relating to the Project;
and all similar rights and property interests.
5.16 Hazardous Materials
Developer, from and after the Construction Financing Event will indemnify,
defend, and hold harmless City and its officers, employees, agents and representatives
(collectively, the "Indemnified Parties") from and against any and all liabilities (including
penalties, fines and monetary sanctions) arising from a violation of state or federal law pertaining
to (1) the storage of Hazardous Materials on the Property or(ii) contamination of the Property by
a release of Hazardous Materials, except to the extent of the Indemnified Parties' gross
negligence or willful misconduct. Developer, prior to the Construction Financing Event, will
provide to City a copy of any notices, orders, or reports concerning the presence of any
Hazardous Materials on or affecting the Property that is in Developer's possession. As a
condition precedent to the Construction Financing Event, Developer will execute and deliver to
the City an Environmental Indemnity, substantially in the form of Exhibit 9 to this Agreement.
6. USE OF PROPERTY
6.1 Uses
Developer covenants and agrees for itself, its successors, its assigns, and every
successor in interest to the Property or any part thereof, that during the HOME Affordability
Period, the Developer shall devote the Property to the uses specified in, and otherwise comply
with the terms and conditions of, the HOME Regulatory Agreement. Developer further
covenants and agrees for itself and its successors and assigns that the HOME Designated Units
shall be continuously occupied or held vacant and made available to Qualified Tenants at an
HOME Affordable Rent during the HOME Affordability Period. All uses conducted on the
Property; including, without limitation, all activities undertaken by the Developer pursuant to
this Agreement, shall conform to all applicable provisions of the Huntington Beach Municipal
Code.
Maximum Occupancy will be two (2) people per room plus one (1). Example for
a two-bedroom unit, five (5) people would be maximum occupancy.
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6.2 Management Plan, Annual Project Budget; Management Reports
A. Prior to the Construction Financing Event, Developer will submit for City
Manager approval a Management Plan describing the Developer's proposal for managing and
operating the Property. The Management Plan will include, without limitation, a description of
the proposed social and supportive services to be made available to Project tenants. Any
modifications to the approved Management Plan will be subject to the prior written approval (not
to be unreasonably withheld or delayed) of the City Manager or designee, for the entire
Restricted Period.
B. Approval of the Management Plan by the City Manager or designee will
be a condition precedent to the Construction Financing Event. Developer will manage and
operate the Property in accordance with the approved Management Plan, including such
amendments as may be approved in writing from time to time by the Developer and the City
Manager or designee for the entire Restricted Period.
C. In addition, the Developer must submit on or before the first day of each
fiscal year of the Restricted Period an estimated annual budget for management of the Property
(the "Annual Project Budget") in accordance with the Management Plan. The Annual Project
Budget will include all necessary operating expenses, current maintenance charges, expenses of
reasonable upkeep and repairs, taxes and special assessment levies, prorated amount required for
insurance and all other expenses incident to the operation of the Project; and will show the
expected revenues to pay such expenses, including annual debt service requirements and reserve
fund deposits and balances. The Annual Project Budget, including any amendments proposed by
Developer, will be subject to the approval of the City Manager not to be unreasonably withheld
or delayed. ,
D. For each fiscal year of the Restricted Period, Developer must also submit
on an annual basis, and upon the written request of the City on a quarterly basis, a report for the
management of the Property (the "Management Report"). The Management Report will include
a profit and loss statement, budget to date figures, and occupancy report and will clearly show
project revenues, operating expenses, deposits to and withdrawals from the Project's reserve
accounts, and cash flow available for residual receipts payments, all of which will be certified by
Developer. The Management Report will be in a form that is reasonable acceptable to the City
Manager. The City Manager, in his/her sole discretion may waive the requirement of the
Management Report for one or more quarterly reporting periods. However, such waiver will not
operate to waive any subsequent requirement of the Management Report during the Restricted
Period. After receipt of such certified financial statements for the Project, City may request
additional financial analyses or obtain a third party review at City's own expense, of financial
statements for the Project to verify the accuracy of the payments by Developer on the HOME
Note; provided, however, that if such review reveals underpayment on the HOME Note greater
than ten percent (10%) of the correct payment amount, in addition to the other remedies available
to the City, Developer will promptly reimburse the City for the reasonable cost of conducting the
review, and the City will have the right to exercise all remedies for such underpayment available
under law or in equity.
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6.3 Maintenance of Property
A. Prior to the Construction Financing Event, Developer must prepare and
submit to the City Manager or his designee for review and approval a program, including a
proposed budget, (the 'Maintenance Program") for the exterior and interior maintenance of
the Property and the Improvements. The City will have the right at all reasonable times and
upon 72 hours advance written notice (except in the case of an emergency) to enter and
inspect the Property in order to ensure compliance withthe foregoing requirements.
B. The Maintenance Program must describe in reasonable detail the
standards to be followed in maintaining the interior and exterior of the Improvements,
including a schedule indicating the proposed frequency of each element of maintenance, and
will include, at a minimum, the following: periodic cleaning of the interior and exterior of
the Improvements, including windows; removing graffiti; removing debris and waste
materials and otherwise maintaining indoor and outdoor areas of the Property; maintaining any
lawns, plants, shrubs and trees or other landscaping planted on the Property; performing
inspections of all exterior features to determine whether repairs are required; conducting periodic
protective treatments such as rust removal and caulking; conducting repairs to facades, roof,
doors, windows and other exterior features; maintaining fencing and other security devices and
systems; periodic repainting of the exterior; periodic repainting of the interior units and
common areas; periodic replacing of the interior unit carpets; checking building systems,
including, but not limited to the heating and cooling systems, smoke alarms and water
heaters; checking interior unit appliances; and monitoring interior unit bathrooms for
mold/mildew. The Maintenance Program, including any amendments proposed by Developer,
will be subject to the approval of the City Manager.
C. At all times during the Restricted Period, Developer will maintain the
Property and the Improvements in accordance with the approved Maintenance Program and in
compliance with Federal Housing Quality Standards (24 CFR § 982.401) and other applicable
state and local laws and codes. To implement this requirement, Developer agrees to budget
sufficient funds to pay for all reasonably anticipated costs (as indicated in the Annual
Maintenance Budget). In the event Developer fails to maintain the Property as required by this
Section, Developer will, within thirty (30) days after City's notification or Developer's own
discovery of any deficiency, take all necessary steps to correct such deficiency, provided that, if
such deficiency is not reasonably capable of being cured within thirty (30) days, Developer will
commence to cure said deficiency within thirty (30) days and diligently and in good faith
continue to take all necessary steps to correct such deficiency. In the event the Developer fails
to cure said deficiency within the time allowed, the City will have the right, but not the
obligation, to enter the Property, correct any violation, and hold Developer responsible for the
cost thereof, and such cost, until paid, will constitute a lien on the Property.
6.4 Lead-Based Paint
Developer will ensure that it and its contractors and subcontractors will not use
lead-based paint in the construction or maintenance of the Project. Developer will insert this
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provision in all contracts and subcontracts for work performed on the Project which involves
the application of paint.
6.5 Barriers to the Disabled
Developer will ensure that the Project will be operated to comply with all
federal, state, and local requirements for access for disabled persons that apply to existing
multi-family rental units.
6.6 Creation of Capital Reserve Account
Concurrently with or prior to the Permanent Financing Event, Developer will
create a "Capital Reserve Account" in the initial amount shown on the Project Budget. No later
than thirty (30) days after the Capital Reserve Account has been created, Developer will
provide to City a pro forma statement concerning the account, for review and approval. At any
time thereafter during the term of this Agreement, City, on ten (10) days prior written notice to
Developer, may request that Developer submit to it an updated, revised Capital Reserve
Account statement. City, at its own expense, may audit any updated, revised Capital Reserve
Account statement submitted to it by Developer; provided that, if such audit reveals a
substantial underfunding of the Capital Reserve Account, Developer will promptly reimburse
the City for the cost of conducting the audit.
6.7 Capital Reserves
Beginning at Completion and every succeeding year during the Restricted
Period, Developer will deposit the amount set forth in the definition of Operating Expenses in
the HOME Note, into the Capital Reserve Account for repairs to the Property. The Capital
Reserve Account will only be used to fund the cost of repairs and improvements to the
Property and to maintain the Property in compliance with the requirements of Section 6.3.
Developer will exhaust funds in the Capital Reserve Account prior to utilizing operating
revenues to pay for capital repairs and improvements to the Property. Interest earned on the
Capital Reserve Account will remain in said account and be used as Capital Reserves. Upon
repayment in full of the HOME Loan and to the extent that maintenance of the Capital
Reserve Account is not required by another lender, the Developer may request the City's
approval for the release of those funds, with such approval not to be unreasonably withheld.
At the expiration of the Restricted Period, the City's approval of the release of the Capital
Reserves will no longer be required.
6.8 Obligation to Refrain from Discrimination
There will be no discrimination against or segregation of any person, or group of
persons, on account of race, color, creed, age, class, source of income, religion, sex, sexual
orientation, gender identity, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, or any part thereof, or in the
awarding of contracts for the Project, nor will Developer, or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
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with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the Property, or any part thereof; or in the awarding of
contracts for the Project. Developer will comply with all applicable federal, state and local
nondiscrimination, fair housing, and equal opportunity requirements. In addition, Developer will
conduct affirmative marketing and minority outreach activities if and as required by Federal
regulations.
6.9 Effectiveness and Duration of Covenants
The covenants established in this Agreement will, without regard to technical
classification and designation, be binding on Developer and any successor in interest to the
Property or any part thereof or interest therein for the benefit and in favor of the City of
Huntington Beach. Every covenant and condition and restriction contained in the HOME
Regulatory Agreement will remain in effect for fifteen (15) years from the Effective Date of the
HOME Regulatory Agreement (regardless of whether the HOME Loan has been repaid prior to
the end of such 15-year period), except that the covenants against discrimination set forth in the
HOME Regulatory Agreement and in Section 6.8 hereof will remain in effect in perpetuity.
6.10 Effect of Violation of Covenants
The City is deemed beneficiary of the terms and provisions of this
Agreement and the covenants herein, both for and in its own right and for the purposes of
protecting the interests of the community and other parties, public or private, for whose
benefit this Agreement and the covenants running with the land have been provided. The
City will have the right if the covenants contained in this Agreement are breached, to
exercise all rights and remedies, and to maintain any actions or suits at law or in equity or
other proper proceedings to enforce the curing of such breaches to which it or any other
beneficiaries of this Agreement and covenants are entitled.
6.11 CHDO Provisions
Developer shall maintain CHDO (Community Housing Development
Organization) status for the term of this Agreement and the HOME Regulatory Agreement in
accordance with 24 CFR 92. Developer agrees to provide information as may be requested by
the City to document its continued compliance, including but not limited to an annual board
roster and certification of continued compliance.
Any funds advanced as CDHO pre-development funds must be in compliance
with 24 CFR 92.301, and are forgivable only under the terms in 24 CFR 92.301. Any funds
advanced to Developer as CHDO Operating Expenses must be expended in compliance with 24
CFR 92.208. Any funds that Developer is permitted to retain as CHDO proceeds from this
Project shall be used in compliance with 24 CFR 92.300(a)(2) or as specified in this Agreement.
Developer will create and follow a tenant participation plan, as required in 24
CFR 92.303.
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7. HOME COVENANTS
7.1 Qualification as Affordable Housing
As more particularly provided in the HOME Regulatory Agreement, Developer
shall use, manage and operate the Property in accordance with the requirements of the HOME
Program and 24 CFR 92.252 so as to qualify the housing on the Site as affordable housing until
the later of the date the HOME funds are repaid or the expiration of the HOME Affordability
Period. Developer hereby covenants and agrees to comply with all applicable requirements of
the HOME Program, including, without limitation, those set forth herein.
7.2 Use of HOME Funds
In accordance with 24 CFR 92.205(a)(1) and 92.2016(c), the HOME Funds shall
be used exclusively for acquisition of the Property, which constitutes improved real property as
well as permanent rental housing as required thereby.
7.3 Affordable Housing Requirements
7.3.1 HOME Designated Units
The HOME Designated Units are composed of four (4) two-bedroom
units. The HOME Designated Units will be floating units.
7.3.2 Household Income Requirements
In order to assure compliance with the rent and occupancy restrictions
set forth in this Agreement and the HOME Regulatory Agreement, the Developer shall,prior to
the initial leasing of a HOME Designated Unit and on an annual basis thereafter throughout the
HOME Affordability Period, obtain and cause to be submitted to City, at Developer's expense, a
verification of all household sources of income as required by the HOME Regulatory Agreement
demonstrating that such household qualifies as a either Very-Low Income Household or Low
Income Household in accordance herewith and meets the eligibility requirements established for
the HOME Designated Unit. Such income verification shall be submitted on such forms
prepared and submitted in accordance with the HOME Regulatory Agreement, HOME Program
and/or such other form approved by City.
Rental housing qualifies as affordable housing despite a temporary
noncompliance of this Agreement, if the noncompliance is caused by increases in the incomes of
existing tenants and if actions satisfactory to HUD care being taken to ensure that all vacancies
are filled in accordance with this Agreement until the noncompliance is corrected. Tenants who
no longer qualify as Very-Low or Low Income Households must apply as rent the lesser of the
amount payable by the tenant under State or local law, or thirty percent (30%) of the family's
adjusted monthly income, as recertified annually.
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7.3.3 HOME Rents
During the HOME Affordability period, two (2) HOME Designated
Units (two-bedroom units) shall be leased to or held vacant for occupancy by Very-Low Income
Households at Low HOME Rent and two (2) HOME Designated Units (two-bedroom units) shall
be leased to or held vacant for occupancy by Low Income Households and High HOME Rent.
On an annual basis, the City shall provide the Developer with the
maximum allowable schedule of.rents for the Property. In no event can Developer charge any
tenant more than that amount.
Any tenant-paid utilities must be deducted from the gross HOME Rent,
based on the HUD Utility Schedule Model.
7.3.4 Duration of HOME Affordability Requirements
The HOME Designated Units shall be subject to the requirements of this
Section throughout the HOME Affordability Period.
7.4 Selection of Eligible Tenants
Prior to selecting any tenants for the HOME Designated Units, Developer shall
submit to City the Management Plan which shall include proposed tenant selection policies and
criteria for the HOME Designated Units. The tenant selection criteria shall be subject to City's
approval or disapproval thereof in writing. The tenant selection policies and criteria for the
HOME Designated Units shall require that applicable federal and state fair housing, the HOME
Program, and other applicable Governmental Regulations, preference be given to applicants in
the following order: first to existing income qualified tenants of 7792 Barton Drive, second to
persons who live or work in the City. In addition, the tenant selection policies and criteria shall:
(1) Be consistent with the purpose of providing housing for Very-Low and
Low HOME Households;
(2) Be reasonably related to program eligibility and the applicants' ability to
perform the obligations of the lease;
(3) Provide for the selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practical; and
(4) Give prompt written notification to any rejected applicant of the grounds
for any rejection.
Developer shall comply with the requirements of 24 CFR 92.253.
7.5 Lease Requirements
Prior to rental of any of the HOME Designated Units after closing, the
Developer shall submit a standard lease form to City for City's approval, which approval shall
not unreasonably be withheld or delayed. The standard lease agreement shall not be amended
in any material respects (except as required by applicable laws) without prior written City
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approval. The Developer shall enter into a lease in the form approved by City, and containing
those provisions required by the HOME Regulatory Agreement, with each Qualified Tenant of a
HOME Designated Unit.
7.6 Affirmative Marketing
Developer shall implement and perform such affirmative marketing procedures
and requirements (24 CFR 92.351) for the Project as adopted by City and delivered to Developer
in its Affirmative Fair Housing Marketing Plan.
7.7 Annual Reporting Requirements
On or before April 1 of each year, the Developer shall submit to City a
certification of compliance with the terms and conditions of this Agreement and the HOME
Regulatory Agreement and such other reports as required thereby on forms prescribed by City.
Each annual report shall cover the immediately preceding calendar year. Developer further
agrees to provide annually to City true and accurate copies of all reports, audits and compliance
forms prepared by Developer.
On April 1 of each year, Developer shall determine and submit an updated Rent
Schedule to City showing the proposed Affordable Rent amount for each Affordable Unit for
the following twelve(12) months with supporting documentation that such amounts are
consistent with the applicable method for calculating Affordable Rent as set forth herein.
Unless otherwise agreed to in writing by City and Developer, during the
Affordability Period, Developer shall annually prepare, and on or before April 1 (or 180 days
after end of fiscal year) of each year, shall submit to City, an audited Annual Financial Statement
for Developer and General Partner. Accompanying such Annual Financial Statements shall be
copies of such entity's revised organizational and/or governing corporate documents if any
changes to such documents were effected during the fiscal year covered by the Annual Financial
Statement.
7.8 Handicapped Accessibility
If and to the extent applicable, Developer shall comply with (a) Section 504 of the
Rehabilitation Act of 1973, and implementing regulation at 24 CFR Part 8C governing
accessibility of projects assisted under the HOME Program; and(b) the Americans with
Disabilities Act of 1990, and implementing regulations at 28 CFR Parts 35-36 in order to provide
handicapped accessibility to the extent readily achievable.
7.9 Lead-Based Paint
Developer shall maintain the Affordable Units in compliance with the applicable
Property Standards as set forth in 24 CFR 92.251. Developer shall comply with the
requirements, as applicable, of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846) and Residential Lead-Based Paint Hazard Reduction Act of 1992 and implementing
regulations at 24 CFR Part 35, including testing and abatement activities.
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7.10 Equal Opportunity and Fair Housing
Developer shall carry out the construction and perform its obligation under this
Agreement in compliance with all of the federal laws and regulations regarding equal
opportunity and fair housing described in 24 CFR 92.350.
7.11 Property Standards
Developer shall comply with 24 CFR 92.251.
(1) The development of the Property shall comply with the City's building
code and all other applicable local codes, rehabilitation standards, ordinances and zoning
ordinances in effect at the time of project completion, and the Property shall be decent, safe
and sanitary shall conform to the following codes that have been adopted by the City of
Huntington Beach: Uniform Building Code (UBC) as adopted by the State of California
(California Building Code [Title 24 Part 2], National Electrical Code (NEC), Uniform
Plumbing Code (UPC), Uniform Mechanical Code (UMC) and California Energy Code(CEC).
(2) The Property shall comply with the accessibility requirements at 24 CFR
Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if
applicable, the design and construction requirements at 24 CFR 100.205 for covered
multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act
(42 U.S.C. 3601-3619).
7.12 Displacement and Relocation
Developer acknowledges and agrees that, pursuant to 24 CFR 92.253 and
consistent with the other goals and objectives of this party, City must ensure that it has taken all
reasonable steps to minimize the displacement of persons as a result of the Project, if any.
Furthermore, to the extent applicable and to the extent feasibility, residential tenants must be
provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary and
affordable dwelling unit on the subject Property upon completion of construction. Developer
agrees to cooperate fully and completely with City in meeting the requirements of 24 CFR
92.253 and shall take all actions and measures reasonable required by the City Manager in
connection therewith. To the extent applicable to the Project, Developer agrees that any
relocation assistance and/or benefits to which any occupant of the Property becomes entitled as a
consequence of this Agreement, whether under state or federal law, shall be the obligation of
Developer, and Developer agrees to defend, indemnify and hold City harmless therefrom.
7.13 Faith Based Activities
To the extent applicable to the Project, in accordance with 24 CFR 92.257,
Developer will comply with the restrictions on the use of HOME Funds for faith based activities
as set forth in Section 92.257.
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7.14 Records and Reports
Developer shall maintain and from time to time submit to City such records,
reports and information as the City Manager may reasonably require in order to permit City to
meet the recordkeeping and reporting requirements required of it pursuant to 24 CFR 92,508,
including, without limitation, the following(such reports may be combined with and/or
incorporated in the reports required elsewhere in this Agreement):
(1) Records which demonstrate that the Property meets the property
standard specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355;
(2) Records which demonstrate that each family occupying the Property is
income eligible in accordance with 24 CFR 92.203;
(3) Records which demonstrate that the Property meets the affordability and
income targeting requirements of 24 CFR 92.252 for the Rental period. Records shall be kept for
each family assisted;
(4) Records which demonstrate that each lease complies with the tenant and
participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family; as
applicable.
(5) Equal opportunity and fair housing records,including, as follows:
a. data on the extent to which each racial and ethnic group;
b. and single-headed household (by gender of household head) have
applied for,participated in, or benefitted from, any program or activity funded in whole or in part
with HOME funds;
C. documentation of actions undertaken to meet the requirements of
24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as
amended (12 U.S.C. 1701 u);
d. documentation of the actions the City has taken to affirmatively
further fair housing;
(6) Affirmative Marketing and MBE/VWBE records, including, as applicable:
a. if applicable, records documenting compliance with the affirmative
marketing procedures and requirements of 24 CFR 92.351;
b. if applicable, documentation and data on the steps taken by
Developer to implement the City's outreach programs to minority-owned and female-owned
businesses including data indicating the racial/ethnic or gender character of each business entity
receiving a contract or subcontract of$25,000 or more paid, or to be paid, with HOME funds; the
amount of the contract or subcontract, and documentation of the Developer's affirmative steps to
assure that minority business and women's business enterprises have an equal opportunity to
obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction
and services;
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C. if applicable, records which demonstrate compliance with the
requirements of 24 CFR 92.353 relating to displacement, relocation and real property
acquisition, including project occupancy lists identifying the name and address of all persons
occupying or moving into the Property on and after the date on which Developer obtained site
control;
d. if applicable, records demonstrating compliance with the labor
requirements of 24 CFR 92.354, including contract provisions and payroll records;
e. records demonstrating compliance with the lead-based paint
requirements of 24 CFR 92.355;
f. if applicable, records which support any exceptions to the conflict
of interest prohibition pursuant to 24 CFR 92.356;
g. debarment and suspension certifications required by 24 CFR Parts
24 and 91.
h. Developer shall retain all books and records relevant to the HOME
Loan for a minimum of ten years after the project completion date, except that records of
individual tenant income verifications, project rents and project inspections shall be retained for
the most recent ten-year period until ten years after the affordability period terminates, or until
the conclusion or resolution of any and all audits or litigation relevant to the HOME Loan,
whichever is later. The City, HUD and the Controller General of the United States, and any of
their representatives, shall have the right of access to any pertinent books, documents, papers or
other records of the Developer, in order to make audits, examinations, excerpts and transcripts.
i. Developer shall retain at all times the documentation submitted
pursuant to 24 CFR 92.203(a)(1), which provided the basis for determining income eligibility.
7.15 Labor Standards (Davis-Bacon)
If required by applicable Governmental Regulations, any contract for the work of
Developer in connection with the Project shall contain a Prevailing Wage Clause requiring that
not less than the wages prevailing in the locality, as predetermined by the Secretary of the
United States Department of Labor pursuant to the Davis-Bacon Act(40 U.S.C. 276a-5), will be
paid to all laborers and mechanics employed in the construction of the Project, and such
contract(s) shall also be subject to the overtime provisions, as applicable, of the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327-332). Participating contractors, subcontractors,
and other participants must comply with regulations issued under these Acts and with other
federal laws and regulations pertaining to labor standards and HUD Handbook 1344.1 (Federal
Labor Standards Compliance in Housing and Community Development Programs), as
applicable. The Developer shall supply to City a certification, in form and substance satisfactory
to HUD and the City Manager, as to compliance with the provisions.of this section before
receiving any disbursement of HOME Loan funds.
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Developer shall comply with the provisions of 24 CFR 24 relating to the
employment, engagement of services, awarding of contracts, or funding of any contractor or
subcontractor during any period of debarment, suspension, or placement in ineligibility status.
7.16 Use of Debarred Suspended, or Ineligible Participants
Developer shall comply with the provisions of 24 CFR 24 relating to the
employment, engagement of services, awarding of contracts, or funding of any contractor or
subcontractor during any period of debarment, suspension, or placement in ineligibility status.
7.17 Maintenance of Drug-Free Workplace
Developer shall comply with the provisions of 24 CFR 24 relating to the
employment, engagement of services, awarding of contracts, or funding of any contractor or
subcontractor during any period of debarment, suspension, or placement in ineligibility status.
7.18 Other Program Requirements
Developer shall carry out each activity in compliance with all federal laws
and regulations described in subpart H of 24 CFR 92, except that Developer does not
assume City's responsibilities for environmental review in 24 CFR 92.352 or the
intergovernmental review process in 24 CFR 92.359.
Developer shall comply with all applicable federal requirements set forth in
Subpart H of the HOME regulations, including the following:
(1) Other Federal Requirements and Nondiscrimination. 24 CFR 92.
(2) 92.350. Developer acknowledges that 24 CFR 92.350 provides that the
Federal requirements set forth in 24 CFR Part 5, subpart A, are applicable to participants in the
HOME Program, and that these Federal requirements include the following:
(3) Nondiscrimination and Equal Opportunity.
(4) Civil Rights, Fair Housing, and Age and Disability Discrimination Acts
Assurances:
Developer assures that no otherwise qualified person shall be excluded
from participation or employment, denied program benefits, or be subjected to discrimination
based on race, color, national origin, sex, age, handicap, religion, or religious preference, under
any program or activity funded by this Agreement, as required by the Fair Housing Act(42
U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 et seq.; Executive Order
11063, as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR,
1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at
24 CFR part 107; title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4)
(Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR
part 1; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations
at 24 CFR part 146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and
implementing regulations at 24 CFR part 8; Title VI of the Civil Rights Act of 1964, the Fair
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Housing Act(42. U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination
Act of 1975, and all implementing regulations.
(5) Training, Employment, and Contracting Opportunities Assurance of
Compliance:
The Project activities to be performed under this Agreement are assisted
under a program providing direct federal financial assistance from HUD which is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12
U.S.C. 170lu ("Section 3"), and the regulations issued by HUD to implement Section 3 (24 CFR
Part 135) (the "Section 3 Regulations"). Pursuant to 24 CFR 135.3, the requirements of the
Section 3 Regulations apply to the recipient of such financial assistance only where the amount
of federal assistance exceeds $200,000, and apply to a contractor or subcontractor of such
recipient only where the amount of assistance exceeds $200,000 and the amount of the contract
or subcontract exceeds $100,000. Developer shall provide, to the greatest extent feasible,
training, employment and contracting opportunities generated by the financial assistance to low-
and very-low income persons and business concerns owned by low- or very-low income persons,
or which employ low- or very-low income persons.
(6) MBE/WBE Affirmative Action Outreach Program
Developer hereby agrees to comply with the City's minority and women
business outreach program in accordance with Executive Order 11625, as amended by Executive
Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 CFR 1977 Comp., p. 139) (Minority
Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp.,p. 198) (Minority Business
Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3
CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise).
(7) Disclosure Requirements.
The disclosure requirements and prohibitions of 31 USC 1352 and
implementing regulations at 24 CFR Part 87; and the requirements for funding competitions
established by the Housing and Urban Development Reform Act of 1989 (42 USC 3531 et. seq.).
(8) Displacement, Relocation and Acquisition. 24 CFR 92.353.
Developer shall cooperate with the City in connection with any project-
specific relocation plan to be prepared by the City, and shall certify that, to the extent applicable,
it will comply or has complied with the federal relocation, displacement and acquisition rules
governing the HOME Program, which are contained in the Uniform Relocation Act, 49 CFR Part
24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are
displaced from housing units demolished or converted as a result of HOME-funded activities be
provided with relocation assistance.
7.19 Requests for Disbursements of Funds
Notwithstanding anything contained in this Agreement to the contrary, Developer
may not request disbursements of funds under this Agreement until the funds are needed to
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permanently finance Eligible Costs (as defined by the HOME Program). The amount of each
request shall be limited to the amount needed.
7.20 Eligible Costs
Developer shall use HOME Loan proceeds only to pay costs defined as "eligible
costs" pursuant to 24 CFR 92.206.
7.21 Conflict of Interest
Developer shall comply with any applicable conflict of interest provisions set
forth at 24 CFR 570.611.
(1) Interest of Employees, Officers and Officials. No employee, agent,
consultant, officer or elected official or appointed official of the City, or employee, agent,
consultant of officer of Developer, and no other public official of the City who exercises any
functions or responsibilities with respect to the activities assisted with HOME funds or who are
in a position to participate in a decision making process or gain inside information with regard to
these activities, during their tenure and for one year thereafter, may obtain a financial interest or
benefit from a HOME assisted activity or have an interest in any contract or subcontract, or
agreement with respect thereto, or the proceeds thereunder, either for themselves or those with
whom they have family or business ties. Developer shall incorporate, or cause to be
incorporated, in all such contractors or subcontracts a provision prohibiting such interest
pursuant to the purposes of this Section. Fulfillment of"sweat equity" obligations as defined in
Section 8201 of the HOME regulations shall not be considered a violation of this prohibition.
(2) Prohibition Against Occupying HOME-Assisted Units. No officer,
employee, agent, official or consultant of Developer may occupy a HOME assisted Unit.
(3) Consultant Activities. 24 CFR 92.358. No person providing consultant
services in an employer-employee type relationship shall receive more than a reasonable rate of
compensation for personal services paid for with HOME funds. In no event, however, shall such
compensation exceed the limits in effect under the provisions of any applicable statute (e.g.,
annual HUD appropriations acts which have set the limit at the equivalent of the daily rate paid
for Level IV of the Executive Schedule). Such services shall be evidenced by written agreements
between the parties which detail the responsibilities, standards and compensation. Consultant
services provided under an independent contractor relationship are not subject to the
compensation limitation Level IV of the Executive Schedule.
7.22 Project Requirements
In accordance with 24 CFR 92 Subpart F (92.250-92.258, 92.504(c)(3)(iii),
Developer shall comply with all applicable requirements set forth in Subpart F of the HOME
Regulations, as provided elsewhere in this Agreement and also including the following:
Maximum Per-Unit Subsidy. 24 CFR 92250. The amount of the HOME loan
does not exceed the per unit dollar limits established by HUD pursuant to section 221(d)(3)(ii)
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of the National Housing Act, as implemented in regulations issued by HUD, 24 CFR
221.514(b)(1) and(c).
7.23 Other HOME Program Requirements
Developer shall comply with all other applicable requirements of the
HOME Program.
8. DEFAULTS, REMEDIES AND TERMINATION
8.1 Defaults; Notice of Cure; Cure Rights
A. Subject to Force Majeure Delay, as such term is defined in this
Agreement, failure or delay by either party to perform any term or provision of this Agreement
constitutes a default under this Agreement. The party who fails or delays must immediately
commence to cure, correct or remedy such failure or delay and will complete such cure,
correction or remedy with reasonable diligence.
B. The injured party will give written notice of default to the party in default,
specifying the default. Failure or delay in giving such notice will not constitute a waiver of any
default, nor will it change the time of default. Except as otherwise expressly provided in this
Agreement, any failures or delays by either party in asserting any of its rights and remedies as to
any default will not operate as a waiver of any default or any such rights or remedies. Delays by
either party in asserting any of its rights and remedies will not deprive either 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.
C. If a monetary event of default occurs, prior to exercising any remedies
hereunder, the injured party will give the party in default written notice of such default. The
party in default will have a period of fifteen (15) days after such notice is given within which to
cure the default prior to exercise of remedies by the injured party.
D. If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, the injured party will give the party in default notice of such default. If the default is
reasonably capable of being cured within thirty (30) days, the party in default will have such
period to effect a cure prior to exercise of remedies by the injured party. If the default is such
that it is not reasonably capable of being cured within thirty (30) days, and the party in default (1)
initiates corrective action within said period, and (ii) diligently, continually, and in good faith
works to effect a cure as soon as possible, then the party in default will have such additional time
as is reasonably necessary to cure the default prior to exercise of any remedies by the injured
party. In no event will the injured party be precluded from exercising remedies if its security
becomes or is about to become materially jeopardized by any failure to cure a default or the
default is not cured within ninety (90) days after the first notice of default is given.
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8.2 Institution of Legal Actions
Subject to the notice and cure provisions of Section 701 and the limited recourse
provisions.of Section 709, in addition to any other rights or remedies (and except as otherwise
provided in this Agreement), 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
purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the
County of Orange, State of California, in any other appropriate court of that county, or in the
United States District Court for the Central District of California.
8.3 Applicable Law
The internal laws of the State of California, without reference to the principles
relating to conflicts of laws, will govern the interpretation and enforcement of this Agreement.
8.4 Acceptance of Service of Process
A. In the event that any legal action is commenced by City against
Developer, service of process on Developer will be made by personal service upon Developer (or
upon an officer of Developer) and will be valid whether made within or without the State of
California, or in such manner as may be provided by law.
B. In the event that any legal action is commenced by Developer against the
City, service of process on the City will be made by personal service upon the City Manager or
the City Clerk or in such other manner as may be provided by law.
8.5 Rights and Remedies Are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in
this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either
party of one or more of such rights or remedies will 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.
8.6 Specific Performance
If either party defaults with regard to any of the provisions of this Agreement,
subject to the notice and cure provisions of Section 8.1, the non-defaulting parry, at its option,
may, after such notice and opportunity to cure (but not before) commence an action for specific
performance of the terms of this Agreement pertaining to such default.
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8.7 Termination Due to Failure of Financing Event
Notwithstanding anything in this Agreement to the contrary, the City will have
the right to terminate this Agreement, in its sole discretion and without further notice to
Developer and without requirement of the expiration of any cure period, in the event that, subject
to Force Majeure Delay, the Construction Financing Event fails to occur within the time
specified in the Schedule of Performance(as such Schedule of Performance may be amended
pursuant to the terms hereof).
8.8 Termination by Either Party
Prior to the Construction Financing Event, any party will have the right to
terminate this Agreement in the event any other party is in default of any material term or
provision of this Agreement, and, following notice, fails to cure such default within the time
provided in Section 8.1.
8.9 Limited Recourse Obligations
Each obligation of the Developer under this Agreement is a nonrecourse
obligation of the Developer. Except as provided otherwise in this Agreement, Developer will
have no personal liability for payment of Developer's obligations to the City. The sole recourse
of the City will be the exercise of its rights against the Property and the improvements thereon
and any related security for the HOME Loan. Provided, however, that the foregoing will not (a)
constitute a waiver of any obligation evidenced by this Agreement; (b) prevent or in any way
hinder the City from exercising, or constitute a defense, an affirmative defense, a counterclaim,
or other basis for relief in respect of the exercise of, any remedy prescribed by law or in equity in
case of default, other than repayment of the HOME Loan; or(c) relieve Developer of any of its
obligations under any indemnity delivered by Developer to the City. The foregoing provisions
of this paragraph are limited by the provision that in the event of the occurrence of a default,
Developer and its successors and assigns will have personal liability hereunder for any
deficiency judgment, but only if and to the extent Developer, its principals, shareholders, or its
successors and assigns, received rentals, other revenues, or other payments or proceeds in respect
of the mortgaged Property after the occurrence of such default, which rentals, other revenues, or
other payments or proceeds have not been used for the payment of ordinary and reasonable
operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to
the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property and
basic management fees, but not incentive fees, payable to an entity or person unaffiliated with
Developer in connection with the operation of the mortgaged Property, which are then due and
payable.
Notwithstanding the foregoing, the City may obtain a judgment or order
(including, without limitation, an injunction) requiring any person to perform (or refrain from)
specified acts other than repayment of the HOME Loan; may proceed against any Person
whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit,
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reimbursement agreements or similar rights to payment or performance; and may recover
directly from any Person:
1. any damages, costs and expenses incurred by City as a result of fraud or
any criminal act or acts of Developer or any member, shareholder, officer, director, agent or
employee of Developer;
2. any damages, costs and expenses incurred by City as a result of any
misappropriation of funds provided for the Project, rents and revenues from the operation of the
Project, or proceeds of insurance policies or condemnation proceeds by Developer or any
member, partner, shareholder, officer, director or employee of Developer;
3. any and all amounts owing by Developer pursuant to Developer
indemnification regarding Hazardous Substances; and
4. all court costs and attorneys' fees reasonably incurred in enforcing or
collecting upon any of the foregoing exceptions.
8.10 Developer's Remedies
Subject to any applicable cure periods and the right to notice provided for in this
Agreement, upon a default or breach of this Agreement by City, Developer may bring an action
for specific performance of this Agreement or any term or provision hereof, or, if prior to the
Construction Financing Event, may terminate this Agreement. Developer may not sue for
monetary damages and hereby fully and finally releases the City from any claims for monetary
damages arising directly or indirectly from City's breach of its obligations under this Agreement.
8.11 Attorney's Fees
Except as otherwise expressly provided in this Agreement, in the event that any
action, suit or other proceeding is brought to enforce the obligations of any parry under this
Agreement, each party will bear its own costs and expenses of suit, including attorneys' fees;
expert witness fees and all costs incurred in each and every such action, suit or other proceeding,
including any and all appeals or petitions therefrom.
9. GENERAL PROVISIONS
9.1 Developer's Warranties
Developer represents and warrants (1) that it has access to professional advice
and support to the extent necessary to enable Developer to fully comply with the terms of this
Agreement; (2) that it is duly organized, validly existing and in good standing under the laws
of the State of California; that it has the full power and authority to undertake the Project and
to execute this Agreement; (4) that the persons executing and delivering this Agreement are
authorized to execute and deliver such documents on behalf of Developer; (5) except as
disclosed to the City in writing, there are no actions or proceedings pending or, to the best of
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the Developer's knowledge, threatened against the Developer before any court or
administrative agency in any way connected with the Property or the Project which could
adversely affect the Developer's ability to perform the activities contemplated hereunder; (6)
neither this Agreement nor anything provided to be done hereunder violates or will violate any
contract, agreement or installment to which the Developer is a party or which affects the
Project or any part thereof, (7) the Developer is not in default in respect of any of its
obligations or liabilities pertaining to this Agreement, nor is there any state of facts or
circumstances or conditions or events which, after notice, lapse of time, or both, would
constitute or result in any such default under this Agreement; and (8) the Developer has not
entered into any agreements which will adversely affect the title to the Project or the
Developer's right to develop and use the Project as provided in this Agreement, and the
Developer will not enter into any such agreements after the date hereof.
9.2 Notices, Demands. and Communications Between the Parties
Formal notices, demands, and- communications between City and Developer
will be sufficiently given if. (i) personally delivered; (ii) delivered by same day or
overnight courier (acknowledged by receipt showing date and time of delivery); or (iii)
dispatched by registered or certified mail, postage prepaid, return receipt requested, to the
address for the City and Developer set forth in .Section 2.2 and Section 2.3, respectively.
Notices personally delivered or delivered by courier will be effective upon receipt or refusal
to accept delivery. Mailed notices will be effective on the earlier of (i) receipt of refusal to
accept delivery, or (ii) noon on the second business day following deposit in the United
States mail.
9.3 Conflicts of Interest
No member, official, or employee of City will have any personal interest in this
Agreement, nor participate in any decision relating to this Agreement, that is in violation of any
applicable law, regulation or ordinance.
9.4 Titles and Captions
Titles and captions are for convenience only and will not be construed to limit or
extend the meaning of this Agreement.
9.5 Gender
As used in this Agreement, masculine, feminine or neuter gender and the singular
or plural number will each be deemed to include the others wherever and whenever the context
so dictates.
9.6 Modifications
Any amendment, alteration, change, or modification of or to this Agreement, in
order to become effective, will be made by written instrument or endorsement thereon and in
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each such instance executed on behalf of each party hereto. The City Manager or designee is
authorized to approve revisions to this Agreement and the attachments hereto, subject to the
approval of City's legal counsel, to the extent that such revisions: (a) are required to conform
this Agreement and the attachments hereto to HOME Regulations; (b) do not materially
adversely affect the economic feasibility of the Project; (c) do not impose a material additional
burden on the City; and (d) do not substantially reduce any benefit to the City or the community.
9.7 Merger of Prior Agreements and Understandings
This Agreement and all documents incorporated herein contain the entire
understanding among the parties hereto relating to the transactions contemplated herein and all
prior or contemporaneous agreements, understandings, representations, and statements, oral or
written.
9.8 No Third Parties Benefited
This Agreement will create no third-party beneficiary rights or any other rights in
favor of any persons, firms or corporations, except as may be expressly stated in this Agreement.
This Agreement is for the sole use and benefit of the parties hereto and is not for the use or
benefit of any other person or entity.
9.9 Assurances to Act in Good Faith
Developer and City agree to execute all documents and instruments and to take all
action, including timely depositing funds as required hereby, and will use their respective good
faith efforts to accomplish the acquisition and construction of the Property in accordance with
the provisions hereof.
9.10 Warranty Against Payment of Consideration for Agreement;No Real Estate
Commissions
Developer warrants that it has not paid or given, and will not pay or give, any
person any money or other consideration for obtaining this Agreement that is in violation of any
law. Neither the City nor the Developer will be liable for any real estate commissions, brokerage
fees or finder's fees which may arise from this transaction. The Developer and the City each
represent to the other that it has employed no broker, agent, or finder in connection with this
transaction. Developer and City will each indemnify, defend, or hold harmless the other from
any claims or damages for payment of any real estate commissions or broker's fees or finder's
fees arising out of the acts or representations of the other with respect to any of the transactions
contemplated by this Agreement.
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9.11 Nonliability of City Officials and Employees
No member, official, or employee of the City will be personally liable to the
Developer or any successor in interest, in the event of any default or breach by the City or for
any amount which may become due to the Developer or this Agreement.
9.12 Interpretation
The terms of this Agreement will be construed in accordance with the meaning of
the language used and will not be construed for or against any party by reason of the authorship
of this Agreement or any other rule of construction which might otherwise apply.
9.13 Counterparts
This Agreement may be executed in two or more counterparts, each of which will
be deemed an original and all of which together will constitute one and the same instrument.
9.14 Severability
Wherever possible, each provision of this Agreement will be interpreted in such a
manner as to be effective and valid under applicable law. If, however, any provision of this
Agreement will be prohibited by or invalid under applicable law, such provision will be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
9.15 Extension of Times of Performance
A. Notwithstanding the foregoing, in addition to the specific provisions of
this Agreement,performance by any party hereunder will not be deemed to be in default during
an event of Force Majeure. An extension of time for an event of Force Majeure will be limited
to the period of such event, and will commence to run from the time of the commencement of the
cause, provided notice by the party claiming such extension is sent to the other party within sixty
(60) days of the commencement of the cause. In the event of such delay, the party delayed will
continue to exercise reasonable diligence to minimize the period of delay.
B. Times of performance under this Agreement may also be extended by
mutual written agreement by City and Developer. In addition, the City Manager will have the
authority on behalf of City to approve extensions of time not to exceed a cumulative total of one
(1) year.
9.16 Inspection of Books and Records
The City or its designee will have the right at all reasonable times to inspect the
books, records and/or documents of the Developer pertaining to the Property and/or the Project
as pertinent to the purposes of this Agreement.
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
16-5414/145020/DO PAGE 44
9.17 Waivers
The waiver by City or Developer of any term, covenant, or condition herein
contained will not be a waiver of such term, covenant, or condition on any subsequent breach.
10. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE
This Agreement and the attachments hereto, which are incorporated by this reference,
constitute the entire understanding and agreement of the parties.
This Agreement does not take effect until executed by the Developer and City. This
Agreement, when executed by the Developer and delivered to the City, must be authorized,
executed and delivered by the City within thirty (30) days after the date of signature by the
Developer, or this Agreement may be terminated by the Developer on written notice to the City.
The City Manager is hereby authorized and directed to take such other and further
actions, and sign such other and further agreements and documents on behalf of the City as may
be necessary or proper to effect the terms of this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
16-5414/145020/DO PAGE 45
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
"DEVELOPER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH,
HOUSING CORPORATION, a municipal corporation of the State of
a California nonprofit public benefit corporation California
By: By:
NORA MENDEZ Mayor
Its Executive Director
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney DILO Iol�ol��
COUNTERPART INITIATED AND APPROVED:
By:
Assistant City Manager
REVIEWED AND APPROVED:
By:
City Manager
EFFECTIVE DATE:
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
16-5414/145020/DO PAGE 46
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
"DEVELOPER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH,
HOUSING CORPORATION, a municipal corporation of the State of
a California nonprofit public benefit corporation California _
j
By: By: < G�
NORA MENDEZ yor
Its Executive Director
ATTEST:
By: �--J
City Clerk
APPROVED AST .
COUNTERPART
By:
City Attorney DILO 10\�O1k�D
My
INIT AND "RO
i
y: (t,�
Assistant City Manager
REVIE APPROVED:
By:
City Manager
EFFECTIVE DATE:
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
16-5414/145020/DO PAGE 46
EXHIBIT I
LEGAL DESCRIPTION
16-5414/145020/DO
EXHIBIT 1
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN
THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS.-
LOT(S) 34 OF TRACT NO, 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF
MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING
BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN
DEEDS OF RECORD.
Plotted Easements
APN: 165-223-02
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 1 —LEGAL DESCRIPTION
PAGE 1
EXHIBIT 2
SITE MAP
16-5414/145020/DO
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DepartmentInformation Services
7792 Bartonti�gIty
City • • 1 Beach w
• Barton - Parcel
•
EXHIBIT 3
SCOPE OF WORK
16-5414/145020/DO
EXHIBIT 3
Scope of Work
7792 Barton Drive, Huntington Beach, CA 92647
Rehabilitation Project
Description Work Specification
1. Landscaping Remove all landscaping abutting structure, remove
any shrubs that are too close to structure, replace
damage sprinklers
2. Exterior Provide required correction to prevent water
intrusion to subfloor area. Secure all vents and
access openings.
3. Exterior Stucco Provide and install foam E.F.I.S. detail and stucco
around windows times 24-allowance
4. Exterior Scaffolding Provide scaffolding for removal of stucco
5. Roof Repairs Provide and install new fascia boards, Reroof-
complete building and carports
6. Exterior Paint Paint all exterior including carport
7. Stairs Remove rotted posts ad stair treads and replace to
repair stairs. Provide and install missing pickets in
handrails and fencing. Provide and install metal
mesh along handrails and stairs to meet ADA
8. Laundry Room Patch and repair drywall as needed, paint walls
and ceiling, replace base board and floor, replace
window, install new water heaters and re-plumb
9. Carport Driveway Saw cut and remove existing asphalt and replace
10. Electrical Repairs Correct wiring issues in each unit, provide and
install GFI outlets as required, repair faulty toggle
switches and duplex outlets. Replace face plates
as needed. Replace lights as needed.
11. Electrical Repairs Replace exterior lighting with energy efficient
lighting.
12. Permit Allowance Provide permits for all required trades.
13. Abatement Funds to cover abatement issues regarding lead,
Contingency asbestos or mold.
14. Kitchen (4 units) Provide and install new drywall resurface ready for
paint. Paint all walls and ceilings, Provide and
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 3-SCOPE OF WORK
PAGE 1
install new cabinets, countertops, stove and sink
and garbage disposal, smoke detector. Provide
new baseboard and install new flooring.
15. Living Room (4 units) Provide and install new drywall resurface ready for
paint. Paint all walls and ceiling. Provide new
baseboard, install new flooring, window treatment,
replace front door and locks. Replace wall heater
and install gas shut off.
16. Hallway (4 units) Resurface walls and ceilings and paint all walls,
ceilings and doors. provide and replace flooring
and base, install smoke detector, remove pad locks
and install new closet handle.
17. Hallway Bathroom (4 Provide and install damage drywall, replace ceiling,
units) install bathroom lights with exhaust fans. Remove
and replace bathtub, bath walls, shower door,
shower head and valves. Install new sink, faucet,
vanity, medicine cabinet and decorative mirror.
New door and hardware. Replace base, flooring
and paint all walls and ceiling.
18. Bedroom 1 (4 units) Install new carpet, new base, remove texture from
ceiling, resurface drywall, paint all walls and ceiling,
install new window treatment, closet doors-slider,
install doors and replace hardware.
19. Master Bathroom (4 Remove and replace damage drywall, remove and
units) replace ceiling, shower walls, shower door, shower
head and valves, exhaust fan, lights, medicine
cabinet. Install new toilet, pedestal sink, faucet
valves, connector trap and drain. New door and
hardware, install flooring and base, paint all walls
and ceiling.
20. Bedroom 2 (4 units) Install new carpet, new base, resurface drywall,
paint all walls and ceiling, install new window
treatment, closet doors-slider, install new doors
and replace hardware.
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 3-SCOPE OF WORK
PAGE 2
EXHIBIT 4
PROTECT BUDGET
16-5414/145020/DO
EXHIBIT 4
Project Budget
7792 Barton Drive
Kitchen
Provide and install new drywall resurface ready for paint $ 250.00
Paint walls and ceiling $ 400.00
Provide and install new cabinets $ 1,370.00
Provide and install new countertops $ 1,160.00
Provide and install new exhaust hood $ 350.00
Provide and install new light $ 100.00
Provide and install new sink,plumbing to make up $ 650.00
Garbage disposal $ 200.00
replace floor $ 600.00
Provide and install new base and paint $ 200.00
Living Rm
Paint walls and ceiling $ 400.00
Provide and install new carpet $ 700.00
Provide and install new drywall resurface ready for paint $ 150.00
Provide and install new window treatment $ 200.00
Clean Up fi-ont Envy Door and Frame $ 75.00
Replace wall heater and install gas shut off $ 1,200.00
Provide and install new base and paint $ 200.00
Hallway
Provide resurface of walls and ceiling ready to paint $ 100.00
Paint wall, ceilings and doors $ 250.00
Clean up existing Doors and Frames $ 50.00
replace floor $ 200.00
Remove pad locks and install new closet handle $ 35.00
Paint walls and ceiling $ 150.00
Provide and install new base and paint $ 200.00
Bedroom I
Remove texture fi-om ceilings $ 50.00
Provide and install new carpet $ 600.00
Provide and install new drywall resurface ready for paint $ 125.00
Provide and install new window treatment- $ 150.00
Clean Up front Door and Frame $ 50.00
Install new door handle—no lock $ 85.00
Install closet doors-slider $ 200.00
Paint walls and ceiling and door $ 500.00
OCCHC-7792 BARTON DRIVE
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.4 -PROJECT BUDGET
PAGE 1
Provide and install new base and paint $ 200.00
Remove and replace ceiling and around tub drywall $ 3,400.00
Provide and install new exhaust fan $ 250.00
Provide and install (1)new electrical outlet and plate $ 65.00
Remove and replace bath tub with new faucet $ 200.00
Provide and install new light $ 150.00
Provide and install new paint $ 500.00
Remove old the and replace with New fiberglass bath walls $ 300.00
Provide and install new bathtub doors $ 300.00
Provide and install new toilet with new water stop $ 350.00
Provide and install new cabinet and countertop $ 1,000.00
Provide and install new sink and faucet $ 400.00
Install new door handle with passage lock $ 90.00
Provide and install new base and paint $ 200.00
Remove and replace ceiling and around shower install drywall $ 3,000.00
Provide and install new exhaust fan $ 250.00
Provide and install new light $ 150.00
Patch and paint bathroom walls $ 300.00
Remove old tile and replace with New fiberglass shower walls $ 300.00
Provide and install new shower doors $ 300.00
replace shower head and valves $ 600.00
Provide and install new toilet with new water stop $ 350.00
$ 500.00
Install new door handle with passage lock $ 90.00
Provide and install new floring and base board $ 300.00
Bedroom 2
Remove and resurface of walls and ceiling ready to paint $ 75.00
Paint walls and ceiling and door $ 500.00
Provide and install new carpet $ 600.00
Provide and install new window treatment- $ 150.00
Clean Up front Door and Frame $ 50.00
Install new door handle-no lock $ 90.00
Install closet doors $ 200.00
Provide and install new base and paint $ 200.00
Total interior cost%u"nit $; '"z„7 ;, ;, 6 360.00.`
2
Exterior
Reroof-complete building and carports $ 15,000.00
OCCHC-7792 BARTON DRIVE
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.4-PROJECT BUDGET
PAGE 2
Provide and install new fascia boards Included in roof
Provide and install foam E.F.I.S. detail and stucco around windows $ 24,000.00
times 24-allowance
Provide and install missing pickets in handrails and fencing $ 1,050.00
$ 1,000.00
Provide and replace wood 7 steps $ 700.00
Paint exterior $ 3,080.00
patch drywall wall as needed,paint walls and ceiling, replace base $ 1,500.00
board and floorine
Provide and install new water•heaters times land re-plumb $ 2,000.00
replace carport driveway $ 8,000.00
Landscaping $ 3,000.00
Pull permits- electrical,plumbing, drywall, roof $ 500.00
Permit fees-allowance $ 1,000.00.
Dumpster and final clean up $ 5,000.00
Lead abatement $ 6,000.00
scaffolding $ 12,000.00
_< .t ,:sTo`tkl'Ezerlor cost
P
Interior 4 units $ 105,440.00
Exterior $ 83,830,00
Contractor overhead & profit 15% $ 28,390.00
Tenant relocation $20,000.00
contingency $12,340.00
Project Total $ 250,000.00
OCCHC-7792 BARTON DRIVE
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.4 - PROJECT BUDGET
PAGE
EXHIBIT 5
SCHEDULE OF PERFORMANCE
16-5414-145020/DO
EXHIBIT 5
SCHEDULE OF PERFORMANCE
Action Item Time of Performance Reference
1. Submittal— Evidence of Insurance. At least 30 days prior to Section of the
Developer shall submit to the City for closing Agreement
approval the evidence of insurance
2. Submittal— Final Construction Drawings At least 5 days prior to Section of the
and Specifications. If necessary for City closing Agreement
permitting of the Project, Developer shall
prepare and submit to the City for approval
the Final Construction Drawings and
Specifications
3. Submittal—Management Plan. Developer At least 5 days prior to Section_of the
shall submit to the City for approval the closing. Agreement and Section
proposed Management Plan. _of HOME Regulatory
Agreement.
4. Submittal—Annual Project Budget. At least 5 days prior to Section_of the
Developer shall submit to the City for closing. Agreement and Section
approval the proposed Annual Project _of HOME Regulatory
Budget for the first year of operation. Agreement.
5. Submittal— Maintenance Program. At least 5 days prior to Section_of the
Developer shall submit to the City for closing. Agreement and Section
approval the proposed Maintenance _of HOME Regulatory
Program for the Project. Agreement.
6. Closing. All conditions precedent to the Not later than Section_of the
Financing Event shall have been.satisfied. Agreement.
7. Commencement of Construction. The Not later than fifteen (15 Section of the
Developer shall commence rehabilitation of days after the Financing Agreement
the Improvements on the Site. Event.
8. Completion of Construction. The Not later than_ Section of the
Developer shall achieve Completion of months following Agreement.
rehabilitation of the improvements on the commencement of
Site in accordance with the Scope of Work construction.
and approved plans.
16-5414/145020/DO OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 5—SCHEDULE OF PERFORMANCE
PAGE 1
9. Submission—Tenant Lease. The Developer At least 30 days prior to Section_of HOME
shall prepare and submit to the City for closing. Regulatory Agreement.
approval the proposed tenant lease in the
conformance with the HOME Regulatory
Agreement.
10. Submission—Annual Reports. The Within 120 days after the Sections and
Developer submits annual financial end of each calendar of HOME Regulatory
statements and rent records/tenant year. Agreement
eligibility certifications to the City.
11 RELOCATION RELATED
12 ACQUISITION RELATED
NOTES:
It is understood that this Scheduled of Performance is subject to all of the terms and conditions
of the text of the Agreement. The summary of the items in this Schedule of Performance 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 of Performance and the text of the Agreement,
the of the Agreement shall govern.
The time periods set forth in this Schedule of Performance may be altered or amended only by
written agreement signed by the Developer and the City. The City Manager shall have the
authority, in his/her sole discretion to approve extension of times.
16-5414/145020/DO OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 5—SCHEDULE OF PERFORMANCE
PAGE 2
EXHIBIT 6
HOME PROMISSORY NOTE
16-5414-145020/DO
RESIDUAL RECEIPTS PROMISSORY NOTE
SECURED BY DEED OF TRUST
TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA
(HOME PROGRAM)
DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust
securing same (if the Restricted Period has expired), must be surrendered to Trustee for
cancellation before reconveyance or partial reconveyance will be made.
3% Interest Huntington Beach
$781,220 /_Iey r2 . 2016
FOR VALUE RECEIVED, ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public health corporation (`Borrower"), hereby
promises to pay to THE CITY OF HUNTINGTON BEACH ("City"), a municipal
corporation of the State of California, or order, a principal amount of Seven Hundred
Eighty-one Thousand, Two Hundred Twenty and No/100 Dollars ($781,220.00), or so
much thereof as may be advanced by the City to the Borrower as the HOME Loan
pursuant to the Affordable Housing Agreement dated as of October, 2016 (the "HOME
Housing Agreement") between Borrower ("Developer" therein) and the City,
incorporated herein by this reference. The HOME Housing Agreement is a public record
on file in the offices of the City. The Borrower will pay interest at the rate, in the amount
and at the time hereinafter provided.
1. Definitions. Any capitalized term not otherwise defined herein will have
the meaning ascribed to such term in the HOME Housing Agreement.
"Annual Operating Expenses," with respect to each calendar year means
the costs reasonably and actually incurred for operation and maintenance of the Project,
which may include, without limitation, the following, to the extent that they are
consistent with an annual independent audit performed by a certified public accountant
using generally accepted accounting principles: property and other taxes and assessments
imposed on the Project; premiums for property damage and liability insurance; utility
services not paid for directly or reimbursed by tenants, including but not limited to water,
sewer, trash collection, gas and electricity; maintenance and repair including but not
limited to pest control, landscaping and grounds maintenance, painting and decorating,
cleaning, cominon systems repairs, general repairs, janitorial, supplies, and similar
customary utility services; any license or certificate of occupancy fees required for
operation of the Project; general administrative expenses including but not limited to
advertising and marketing, security services and systems, professional fees for legal,
audit, accounting and tax returns, and similar customary administrative expenses;
property management fees, expenses and costs, not exceed $55 per unit per month in the
first year with annual increases not to exceed three percent (3%) thereafter, and pursuant
to a management contract approved by the City; cash deposited into a replacement
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 6—HOME PROMISSORY NOTE
Page 1
16-5414/145128/DO
reserve in the amount of$750 per unit per year, subject to annual increases not to exceed
three percent (3%); cash deposited into an operating reserve in such reasonable amounts
as are required by the City from time to time; and, fixed debt service payments
(excluding debt service contingent upon the availability of residual receipts or surplus
cash of the Project) on loans associated with the Project and approved by the City.
"Annual Operating Expenses" will not include the following: depreciation, amortization,
depletion or other non-cash expenses or any amount expended from a reserve account.
Annual Operating Expenses will be subject to the reasonable approval of the City.
"Gross Revenue," with respect to each calendar year, means all revenue
income, receipts, and other consideration actually received from operation or leasing of
the Project. "Gross Revenue" will include, but not be limited to: all rents, fees and
charges paid by tenants, Section 8 payments or other rental subsidy payments received
for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index
adjustments and any other rental adjustments to leases or rental agreements; proceeds
from vending and laundry room machines; the proceeds of business interruption or
similar insurance; the proceeds of casualty insurance to the extent not utilized to repair or
rebuild the Project; and condemnation awards for a taking of part or all of the Project for
a temporary period. "Gross Revenue" will also include the fair market value of any
goods or services provided in consideration for the leasing or other use of any portion of
the Project, except that the value of services provided by on-site manager(s) will not be
treated as "Gross Revenue" if no more than one dwelling unit is leased to or otherwise
used by on-site manager(s). "Gross Revenue" will not include tenants' security deposits,
proceeds from the HOME Loan or other borrowed funds, Owner Equity, including capital
contributions or similar advances, or interest that is earned on and allocated to reserve
accounts.
"HOME Loan Documents" means the HOME Housing Agreement, this HOME
Promissory Note, the HOME Deed of Trust, the HOME Regulatory Agreement, the
Environmental Indemnity, the Assignment of Rents and Leases, and the Assignment of
Agreements.
"Net Proceeds" means the amount, if any, by which a refinancing exceeds the
amount needed to repay a Senior Loan, in full, including principal and interest, any early
redemption or prepayment penalty, and customary and reasonable fees and costs of the
transaction.
"Residual Receipts" means, in each calendar year, the amount by which Gross
Revenue (as defined below) exceeds Annual Operating Expenses (as defined below), as
determined by an audit to be completed not later than ninety (90) days after the end of
each calendar year by an independent certified public accountant first approved in writing
by the City, using generally accepted accounting principles and based on the accrual
method (the "Audit").
OCCHC—7792 BARTON DRIVE
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EXHIBIT 6—HOME PROMISSORY NOTE
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2. This HOME Promissory Note evidences the obligation of the Borrower to
the City for the repayment of the HOME Loan. Borrower may prepay the principal
balance of this HOME Promissory Note at any time without penalty. However, even if
Borrower prepays the entire balance of this HOME Promissory Note including all
accrued interest, costs and penalties, the covenants, conditions and restrictions imposed
on the Site by the HOME Regulatory Agreement will remain in full force and effect for
the full 15-year term as specified therein.
3. This HOME Promissory Note is payable at the principal office of Cite,
2000 Main Street, Huntington Beach, California 92648, or at such other place as the
holder hereof may inform the Borrower in writing, in lawful money of the United States.
4. This HOME Promissory Note is secured by the HOME Deed of Trust.
5. This HOME Promissory Note will accrue simple interest at the rate of
three percent (3%) per annum on the principal amount outstanding, from the date of
disbursement. Interest under this HOME Promissory Note will be computed on the basis
of a year of 365 days and the actual number of days elapsed. However, if any event
occurs giving the City the right to accelerate repayment of this HOME Promissory Note,
the entire unpaid principal balance,owing hereunder will, as of the date of such default,
commence to accrue interest at a rate equal to two percentage points above the reference
rate published by Bank of America N.A., or the maximum non-usurious interest rate
permitted by law, whichever is less (the "Default Rate"). Further, in the event Borrower
fails to reimburse the City for any amount advanced by or for the account of the City
which is due hereunder or under the HOME Deed of Trust within ten (10) days after
written notice of such advance is made by the City to Borrower, then such unreimbursed
amount will thereafter bear interest at the Default Rate until paid.
6. If the Borrower is in compliance with the terms of the HOME Loan
Documents on the earlier to occur of. (a) hl/A ; or (b) the fifteenth (15")
anniversary of the date of Completion of the Project, (which will be referred to herein as
the "Maturity Date"), the principal and accrued interest shall be deemed paid by the
Developer's compliance and no further funds shall be due from the Borrower under this
HOME Promissory Note. Notwithstanding the foregoing, all principal and accrued
interest on the Loan shall be due and payable on the occurrence of either of the following
events:
(a) the date the Property or the improvements thereon or any portion
thereof or interest therein is sold, transferred, assigned or refinanced, without the prior
written approval of the City, except as permitted by the provisions of the HOME Housing
Agreement; or
(b) the date on which there is a Default by the Borrower under the
terms of this HOME Promissory Note, the Housing Agreement, the HOME Deed of
Trust, the HOME Regulatory Agreement, the Environmental Indemnity, or any deed of
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trust or other instrument securing a Senior Loan, which is not cured or waived within the
respective time period provided herein and therein.
7. Prior to the Maturity Date, Borrower will be obligated to repay the HOME
Loan as follows:
(a) Borrower must utilize twenty percent (20%) of Residual Receipts
with respect to each calendar year to repay the HOME Loan. Payments due hereunder
must be made no later than one hundred twenty (120) days following the end of the
applicable calendar year.
(b) In the event Borrower refinances a Senior Loan at any time prior to
the Maturity Date, twenty percent (20%) of the Net Proceeds must be allocated and paid
to the City to reduce the HOME Loan.
(c) All payments to the City will be applied first to the payment of all
expenses, charges, costs and fees incurred by or payable to City by Borrower pursuant to
the terms of the HOME Loan Documents (in such order and manner as City, in its sole
discretion, may elect), then to the payment of all interest accrued to the date of such
payment, and then to reduce the principal amount owed. All prepayment of principal on
this HOME Promissory Note will be applied to the most remote principal installment or
installments until paid. Notwithstanding anything to the contrary contained herein, after
the occurrence and during the continuation of an uncured default under the HOME Deed
of Trust, all amounts received by the City from any party will be applied in such order as
the City, in its sole discretion, may elect.
8. Any breach by Borrower of the provisions of Section 204 (entitled
"Prohibition Against Transfers-, Right of First Refusal") of the HOME Housing
Agreement, unless otherwise permitted by the terms thereof, will constitute a default
under this HOME Promissory Note. The cure periods under the HOME Housing
Agreement and this HOME Promissory Note in connection with such a default will run
concurrently.
9. Borrower waives presentment for payment, demand, protest, and notices
of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and
pleas on the ground of any extension or extensions of the time of payment or of any due
date under this Note, in whole or in part, whether before or after maturity and with or
without notice. Borrower hereby agrees to pay all costs and expenses, including
reasonable attorney's fees, which may be incurred by the holder hereof, in the
enforcement of this HOME Promissory Note, the HOME Deed of Trust or any term or
provision of either.
OCCHC—7792 BARTON DRIVE
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10. Upon the failure of Borrower to perform or observe any term or provision
of this HOME Promissory Note, or upon the occurrence of any event of default after the
expiration of any applicable notice and cure periods under the terms of any of the other
HOME Loan Documents, the holder may exercise its rights or remedies hereunder,or
thereunder. All such rights and remedies will be cumulative. Upon the event of a default
that is not cured or waived within the time provided therefore, the whole of the unpaid
principal and interest owing on this HOME Promissory Note will, at the option of City
and without notice, become immediately due and payable. This option may be exercised
at any time after any such event and the acceptance of one or more payments from any
person thereafter will not constitute a waiver of City's option. City's failure to exercise
said option in connection with any particular event or series of events will not be
construed as a waiver of the provisions hereof as regards that event or any subsequent
event.
11. (a) Subject to the extensions of time set forth in Section 12, and
subject to the further provisions of this Section 11, failure or delay by Borrower to
perform any material term or provision of the HOME Loan Documents constitutes a
default under this HOME Promissory Note.
(b) City will give written notice of default to Borrower, specifying the
default complained of by the City. Delay in giving such notice will not constitute a
waiver of any default nor will it change the time of default.
(c) Any failures or delays by City in asserting any_of its rights and
remedies as to any default will not operate as a waiver of any default or of any such rights
or remedies. Delays by City in asserting any of its rights and remedies will not deprive
City 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.
(d) If a monetary event of default occurs, prior to exercising any
remedies hereunder, the City will give the Borrower written notice of such a default. The
Borrower will have a period of fifteen (15) days after such notice is given within which to
cure the default prior to exercise of remedies by the City.
(e) If a non-monetary event of default occurs, prior to exercising any,
remedies hereunder, the injured party will give the party in default notice of such default.
If the default is reasonably capable of being cured within thirty (30) days, the parry in
default will have such period to effect a cure prior to exercise of remedies by the injured
party. If the default is such that it is not reasonably capable of being cured within thirty
(30) days, and the party in default (i) initiates corrective action within said period, and (ii)
diligently, continually, and in good faith works to effect a cure as soon as possible, then
the party in default will have such additional time as is reasonably necessary to cure the
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default prior to exercise of any remedies by the injured party. In no event will the injured
party be precluded from exercising remedies if its security becomes or is about to become
materially jeopardized by any failure to cure a default or the default is not cured within
ninety (90) days after the first notice of default is given.
(f) Any notice of default will be deemed given only if either (1)
dispatched by first class mail, registered or certified, postage prepaid, return receipt
requested, to the address specified for the Borrower in Section 16 of this HOME
Promissory Note, followed by delivery by the method described in clause (i), or (iii) by
personal delivery (including by means of professional messenger or courier service such
as United Parcel Service or Federal Express) to the address specified for the Borrower in
Section 16 of this HOME Promissory Note. Receipt will be deemed to have occurred on
the earlier of (1) the date of successfully completed electronic facsimile transmission or
(ii) the date marked on a written postal service or messenger or courier service receipt as
the date of delivery or refusal of delivery (or attempted delivery if undeliverable). If
either party gives notice of a change of address in the manner specified in this paragraph,
all notices, demands and communications originated after receipt of the change of
address (or the effective date specified in the notice of change of address, if later) will be
transmitted, delivered or sent to the new address.
12. Notwithstanding specific provisions of this HOME Promissory Note, non-
monetary performance hereunder will not be deemed to be in default where delays are
due to causes beyond the control and without the fault of the party claiming an extension
of time to perform (a "Force Majeure Delay"), provided that they actually delay and
interfere with the timely performance of the matter to which they would apply and
despite the exercise of diligence and good business practices are or would be beyond the
reasonable control of the party claiming such interference, including war; insurrection;
strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the
public enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; governmental restrictions or priority; litigation including litigation
challenging the validity of this transaction or any element thereof, unusually severe
weather; inability to secure necessary labor, materials or tools; delays of any contractor,
subcontractor, or suppliers; acts of the other party; acts or failure to act of any
Governmental agency (except acts or failure to act of the City will not excuse
performance by the City); the imposition of any applicable moratorium by a
Governmental Agency; or any other causes which despite the exercise of diligence and
good business practices are or would be beyond the reasonable control of the party
claiming such delay and interference. Notwithstanding the foregoing, none of the
foregoing events will constitute Force Majeure Delay unless and until the party claiming
such delay and interference delivers to the other party written notice describing the event,
its cause, when and how such party obtained knowledge, the date the event commenced,
and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay
will deliver such written notice within ten (10) business days after it obtains actual
knowledge of the event.
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 6—HOME PROMISSORY NOTE
Pacle 6
16-5414/145128/DO
13. If the rights created by this HOME Promissory Note will be held by a
court of competent jurisdiction to be invalid or unenforceable as to any part of the
obligations described herein, the remaining obligations must be completely performed
and paid.
14. [Intentionally Omitted.]
15. (a) The obligation to repay the HOME Loan is a nonrecourse
obligation of the Borrower. Except as provided otherwise in this Note, Borrower will
have no personal liability for payment of the HOME Loan. The sole recourse of the City
will be the exercise of its rights against the Property and the improvements thereon and
any related security for the HOME Loan. Provided, however, that the foregoing will not
(a) constitute a waiver of any obligation evidenced by this HOME Promissory Note,
(b) prevent or in any way hinder the City from exercising, or constitute a defense, an
affirmative defense,.a counterclaim, or other basis for relief in respect of the exercise of,
any remedy prescribed by law or in equity in case of default, other than repayment of the
HOME Loan; or (c) relieve Borrower of any of its obligations under any indemnity
delivered by Borrower to the City. The foregoing provisions of this paragraph are limited
by the provision that in the event of the occurrence of a default, Borrower and its
successors and assigns will have personal liability hereunder for any deficiency
judgment, but only if and to the extent Borrower, its principals, shareholders, or its
successors and assigns, received rentals, other revenues, or other payments or proceeds in
respect of the mortgaged Property after the occurrence of such default, which rentals,
other revenues, or other expenses of the mortgaged Property, ordinary and reasonable
capital improvements to the mortgaged Property, debt service, real estate taxes in respect
of the mortgaged Property and basic management fees, but not incentive fees, payable to
an entity or person unaffiliated with Borrower in connection with the operation of the
mortgaged Property, which are then due and payable.
(b) Notwithstanding the foregoing, the City may obtain a judgment or order
(including, without limitation, an injunction) requiring any Person to perform (or refrain
from) specified acts other than repayment of the HOME Loan; may proceed against any
Person whatsoever with respect to the enforcement of any guarantees, surety bonds,
letters of credit, reimbursement agreements or similar rights to payment or performance;
and may recover directly from any Person:
(i) any damages, costs and expenses incurred by City as a result of
fraud or any criminal act or acts of Borrower or any member, shareholder, officer,
director, agent or employee of Borrower;
(ii) any damages, costs and expenses incurred by City as a result of
any misappropriation of funds provided for the Project, rents and revenues from the
operation of the Project, or proceeds of insurance policies or condemnation proceeds by
Borrower or any member, partner, shareholder, officer, director or employee of
Borrower;
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXEIIBIT 6—HOME PROMISSORY NOTE
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16-5414/14512 8/DO
(iii) any and all amounts owing by Borrower pursuant to Borrower's
indemnification regarding Hazardous Substances; and
(iv) all court costs and attorney's fees reasonably incurred in enforcing
or collecting upon any of the foregoing exceptions.
16. The address of Borrower for purposes of receiving notices pursuant to this
Note is as follows:
Orange County Community Housing Corporation
501 Golden Circle, Suite 200
Santa Ana, CA 92705
Attention: Executive Director
17. In addition to the other terms of this HOME Promissory Note, the
Borrower hereby agrees and acknowledges that notwithstanding any internal accounting
procedures or provision pertaining to the use of receipts, payments, reserves and
distributions contained in its governing documents, the terms of this Note and the HOME
Housing Agreement will control as to the use of the City funds provided under the
HOME Housing Agreement and all operating income from the Project.
18. Neither this HOME Promissory Note nor any term hereof may be waived,
amended, discharged, modified, changed or terminated orally; nor will any waiver of any
provision hereof be effective except by an instrument in writing signed by City and
Borrower.
19. Notwithstanding any provision in this HOME Promissory Note, the
HOME Deed of Trust or other document securing same, the total liability for payment in
the nature of interest will not exceed the limit now imposed by applicable laws of the
State of California.
20. This HOME Promissory Note has been executed and delivered by
Borrower in the State of California and is to be governed and construed in accordance
with the internal laws thereof.
21. Every provision of this HOME Promissory Note is intended to be
severable. In the event any term or provision hereof is declared by a court of competent
jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever, such
illegality, invalidity or unenforceability will not affect the balance of the terms and
provisions hereof, which terms and provisions will remain binding and enforceable, and
this HOME Promissory Note will be construed as if such illegal, invalid or unenforceable
term or provision had not been contained herein.
22. Time is of the essence in the performance of each provision hereof.
OCCHC—7792 BARTON DRIVE
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Page 8
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IN WITNESS WHEREOF, Borrower has executed tis Note as of the day and year
set forth above.
"BORROWER"
ORANGE COUNTY COMMUNITY
HOUSING CORPORATION,
a California nonprofit public benefit
corporation
By:
Nora Mendez
Its: Executive Director
OCCHC—7792 BARTON DRIVE
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EXHIBIT 6—HOME PROMISSORY NOTE
Page 9
16-5414/145128/DO
EXHIBIT 7
HOME DEED OF TRUST
r I
16-5414/145020/DO
✓� Recorded in Official Records, Orange County
Hugh Nguyen, Clerk-Recorder
�1deli y—Sherman Oaks NO FEE
* $ R 0 0 0 8 8 6 4 6 3 5 $
3`1 2_b_� 2016000587132 4:25 PM 11/18/16
FREE RECORDING REQUESTED 0.0UESTED BY 0.0 4 T07 18
0 0..00 0 0.00 0.00 51.00 0.00 0.00 0.00
AND WHEN RECORDED MAIL TO:
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code§27383)
APN: 165-223-02
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
BY O_RAINGE COUNTY COMMUNITY HOUSING CORPORATION
FOR THE BENEFIT OF
THE CITY OF HUNTINGTON BEACH
[HOME PROGRAM]
This Deed of Trust,Security Agreement and Fixture Filing(With Assignment of Rents)is made this
-7-day of 2016 by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation (hereinafter referred to as
"Trustor") (whose address is 501 Golden Circle, Suite 200, Santa Ana, CA 92605, Attention:
Executive Director),to Fidelity National Title Company,(hereinafter called"Trustee"),for the benefit
of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California
(hereinafter called"Beneficiary"),whose address is 2000 Main Street,Huntington Beach,California
92648.
Witnesseth: That Trustor IRREVOCABLY GRANTS,TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION all present and future right,title and interest of Trustor in and to the
following property(the"Trust Estate"):
(1) All of Trustor's rights,title and interest in and to that certain real property in the City
of Huntington Beach, County of Orange, State of California more particularly described in Exhibit
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.7—HOME DEED OF TRUST
PAGE 1
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
APN: 165-223-02
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
BY ORANGE COUNTY COMMUNITY HOUSING CORPORATION
FOR THE BENEFIT OF
THE CITY OF HUNTINGTON BEACH
[HOME PROGRAM]
This Deed of Trust, Security Agreement and Fixture Filing(With Assignment of Rents)is made this
-7- day of 1,t4VV , 2016 by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation (hereinafter referred to as
"Trustor") (whose address is 501 Golden Circle, Suite 200, Santa Ana, CA 92605, Attention:
Executive Director),to Fidelity National Title Company,(hereinafter called"Trustee"),for the benefit
of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California
(hereinafter called `Beneficiary"),whose address is 2000 Main Street,Huntington Beach,California
92648.
Witnesseth: That Trustor HZREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the
following property (the"Trust Estate"):
(1) All of Trustor's rights,title and interest in and to that certain real property in the City
of Huntington Beach, County of Orange, State of California more particularly described in Exhibit
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 7—HOME DEED OF TRUST
PAGE 1
"A" attached hereto and by this reference made a part hereof(hereafter referred to as the"Subject
Property'');
(2) All buildings,structures and other improvements now or in the future located or to be
constructed on the Subject Property(the "Improvements");
(3) all tenements, hereditaments, appurtenances, privileges, franchises and other rights
and interests now or in the future benefiting or otherwise relating to the Subject Property or the
Improvements, including easements, rights-of-way and development rights (the"Appurtenances").
(The Appurtenances,together with the Subject Property and the Improvements,are hereafter referred
to as the"Real Property");
(4) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents,
issues, income, revenues, royalties and profits now or in the future payable with respect to or
otherwise derived from the Trust Estate or the ownership, use, management, operation, leasing or
occupancy of the Trust Estate, including those past due and unpaid (the "Rents");
(5) all inventory, equipment, fixtures and other goods (as those terms are defined in
Division 9 of the California Uniform Commercial Code(the"UCC"),and whether existing now or in
the future)now or in the future located at, upon or about, or affixed or attached to or installed in,the
Real Property, or used or to be used in connection with or otherwise relating to the Real Property or
the ownership, use, development, construction, maintenance, management, operation, marketing,
leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances,
1-1
building materials and supplies, generators,boilers, furnaces,water tanks,heating ventilating and air
conditioning equipment and all other types of tangible personal property of any kind or nature, and
all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and
substitutions of or to any of such property, but not including personal property that is donated to
Trustor(the "Goods," and together with the Real Property, the "Property"); and
(6) all accounts, general intangibles,chattel paper, deposit accounts,money,instruments
and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights
and written material (in each case whether existing now or in the future)now or in the future relating
to or otherwise arising in connection with or derived from the Property or any other part of the Trust
Estate or the ownership, use, development, construction, maintenance, management, operation,
marketing,leasing, occupancy, sale or financing of the property or any other part of the Trust Estate,
including (to the extent applicable to the Property or any other portion of the Trust Estate) (i)
permits, approvals and other governmental authorizations, (ii)improvement plans and specifications
and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project
managers, supervisors,designers, architects,engineers, sales agents,leasing agents,consultants and
OCCHC-7792 BARTON DRIVE
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EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 2
property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties,
guaranties, indemnities and insurance policies, together with insurance payments and unearned
insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or
resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage
to,trespass on or taking, condemnation(or conveyance in lieu of condemnation)or public use of any
of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale
agreements and purchase options, together with advance payments, security deposits and other
amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits,
bonds, deferred payments,refunds,rebates,discounts, cost savings, escrow proceeds, sale proceeds
and other rights to the payment of money,trade names, trademarks, goodwill and all other types on
intangible personal property of any kind or nature, and (ix) all supplements, modifications,
amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such
property(the "Intangibles").
1-1
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in
all present and future right,title and interest of Trustor in and to all Goods and Intangibles and all of
the Trust Estate described above in which a security interest may be created under the UCC
(collectively, the"Personal Property"). This HOME Deed of Trust constitutes a security agreement
under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary.
Trustee and Beneficiary will have, in addition to all rights and remedies provided herein, all the
rights and remedies of a"secured party"under the UCC and other applicable California law. Trustor
covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c) and
9604 of the UCC.
FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect,
all of the following:
(1) Due,prompt and complete observance, performance and discharge of each and every
condition, obligation, covenant and agreement contained herein or contained in the following:
(a) a promissory note in the original principal amount of$781,220.00, executed
by Trustor ("Borrower" therein) of even date herewith (the "HOME Promissory
Note");
(b) the HOME Affordable Housing Agreement dated as of October , 2016,
by and between Trustor("Developer"therein) and Beneficiary("City"therein) (the
"HOME Housing Agreement"); and
(c) the HOME Regulatory Agreement and Declaration of Covenants and
Restrictions dated on or about the date hereof, by and between Trustor
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.7-HOME DEED OF TRUST
PAGE
("Developer" therein) and Beneficiary ("City' therein) and recorded concurrently
herewith in the Official Records of the County Recorder of Orange County,
California("HOME Regulatory Agreement").
(2) Payment of indebtedness of the Trustor to the Beneficiary in the principal sum of
Seven Hundred Eighty One Thousand, Two Hundred Twenty and No/100's Dollars($781,220.00),
or so much thereof as may be advanced by Beneficiary for the benefit of Trustor, evidenced by
the HOME Promissory Note, with interest, according to the terms of the HOME Promissory Note.
(3) Payment and performance of all future advances and other obligations that the then
record owner of all or part of the Property may agree to pay and/or perform (whether as principal,
surety or guarantor) for the benefit of Beneficiary, when such future advance or obligation is
evidenced by a writing which recites that it is secured by this HOME Deed of Trust.
The HOME Housing Agreement, including all Attachments thereto, and the documents and
instruments executed by Trustor in connection with the Project, including the HOME Regulatory
Agreement, the HOME Promissory Note, the Assignment of Rents, and the Assignment of
Agreements, all as described in the Housing Agreement (collectively referred to as the"Secured
Obligations")and all of their terms are incorporated herein by reference and this conveyance will
secure any and all extensions, amendments,modifications or renewals thereof however evidenced.
Any capitalized term that is not otherwise defined in this HOME Deed of Trust will have the meaning
ascribed to such term in the HOME Housing Agreement.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor will pay the HOME Promissory Note at the time and in the manner
provided therein, and perform the obligations of the Trustor as set forth in the Secured Obligations
at the time and in the manner provided therein;
2. That Trustor will not permit or suffer the use of any of the Property for any purpose
other than the uses permitted by the Secured Obligations;
3. That the Secured Obligations are incorporated in and made a part of this HOME
Deed of Trust. Upon default of a Secured Obligation,and after the giving of notice and the expiration
of any applicable cure period, the Beneficiary, at its option, may declare the whole of the
indebtedness secured hereby to be due and payable;
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4. That, subject to the prior rights, if any,of a lender whose lien is senior to this Deed of
Trust ("Senior Lender"'), all rents, profits and income from the Trust Estate are assigned to the
Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to
Trustor so long as no default exists hereunder after the giving of notice and the expiration of any
applicable cure period, to collect such rents, profits and income for use in accordance with the
provisions of the Secured Obligations;
5. That upon default hereunder or under the aforementioned agreements, and after the
giving of notice and the expiration of any applicable cure period, Beneficiary will be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to take possession and
protect the Trust Estate and operate same and collect the rents, profits and income therefrom;
6. That Trustor will keep the Improvements insured against loss by fire and such other
hazards, casualties,and contingencies as may reasonably be required in writing from time to time by
the Beneficiary, and all such insurance will be evidenced by standard fire and extended coverage
insurance policy or policies. In no event will the amounts of coverage be less than 100 percent of the
replacement value of the Property. Such policies will be endorsed with standard mortgage clause
with loss payable to the Beneficiary and certificates thereof together with copies of original policies
will be deposited with the Beneficiary,
7. To pay,at least 10 days before delinquency, any taxes and assessments affecting the
Property; to pay,when due, all encumbrances, charges and liens,with interest,on the Property or any
part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of
this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust,Trustor will not
be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is
contesting the legality thereof in good faith and by appropriate proceedings,and Trustor has adequate
funds to pay any liabilities contested pursuant to this Section 7;
S. To keep the Property in good condition and repair, subject to ordinary wear and tear,
casualty and condemnation, not to remove or demolish any buildings thereon without the prior
written consent of Beneficiary,not to be unreasonably withheld,conditioned or delayed;to complete
or restore promptly and in 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 the Property or requiring any alterations or
improvements to be made thereon(subject to Trustor's right to contest the validity or applicability of
laws or regulations); not to commit or permit waste thereof; not to commit, suffer or permit any act
upon the Property in violation of law and/or covenants, conditions and/or restrictions affecting the
Property; not to permit or suffer any material alteration of or addition to the Improvements without
the consent of the Beneficiary;
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9. 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 reasonable attorney's fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear;
1-1
10. Should Trustor fail to make any payment or do any act as herein provided, then
Beneficiary or 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 in such manner
and to such extent as either may deem necessary to protect the security hereof. Following default,
after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee
being authorized to enter upon said property for such purposes, may commence, appear in and/or
defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; may pay, purchase,contest, or compromise any encumbrance,charge, or lien
�xhich in the judgment of either appears to be prior or superior hereto; and, in exercising any such
powers, may pay necessary expenses, employ counsel, and pay reasonable attorney fees.
Notwithstanding the foregoing, in the event of default under this HOME Deed of Trust, the
Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary will
specify in writing the particular records that must be maintained and the information or reports that
must be submitted;
11. Beneficiary will have the right to pay fire and other property insurance premiums
when due should Trustor fail to make any required premium payments. All such payments made by
the Beneficiary will be added to the principal sum secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, under permission given under this HOME Deed of Trust, with interest from date of
expenditure at the rate specified in the HOME Promissory Note;
13. That the funds to be advanced hereunder are to be used in accordance with the
Secured Obligations and upon the failure of Trustor to keep and perform all the covenants,
conditions, and agreements of said agreements,the principal sum and all arrears of interest,and other
charges provided for in the HOME Promissory Note will at the option of the Beneficiary of this
HOME Deed of Trust become due and payable, anything contained herein to the contrary
notwithstanding;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be
created against the property subject to this HOME Deed of Trust any lien or liens except as permitted
by the Secured Obligations or otherwise approved by Beneficiary, and further that it will keep and
maintain the Property free from the claims of all persons supplying labor or materials
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which will enter into the construction of any and all buildings now being erected or to be
erected on said premises.
Notwithstanding anything to the contrary contained in this HOME Deed of Trust, Trustor will
not be obligated to pay any claims for labor, materials or services which Trustor in good faith
disputes and is diligently contesting, provided that Trustor will, at Beneficiary's written request,
within thirty(30) days after the filing of any claim or lien (but in any event, and without any
requirement that Beneficiary must first provide a written request, prior to foreclosure) record in
the Office of the Recorder of Orange County, a surety bond in an amount one-and-one-half(1 1/z)
times the amount of such claim item to protect against a claim of lien, or provide such other
security reasonably satisfactory to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered
by the HOME Deed of Trust, and all plans and specifications, comply in all material respects
with all applicable municipal ordinances and regulations and all other applicable regulations
made or promulgated,now or hereafter,by lawful authority,and that the same will upon completion
comply with all such municipal ordinances and regulations and with the rules of the applicable fire
rating or inspection organization, bureau, association or office; and
16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing
representative of the Beneficiary a reasonable charge for providing a statement regarding the
obligation secured by this HOME Deed of Trust as provided by Section 2954, Article 2, Chapter 2
Title 14, Division 3, of the California Civil Code.
IT IS MUTUALLY AGREED THAT:
17. Should the Property or any part thereof be taken or damaged by reason of any public
improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other
manner, subject to the rights of any senior lender that has been approved by Beneficiary,Beneficiary
will be entitled to all compensation, awards, and other payments or relief therefor which are not used
to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged,
and will be entitled at its option to commence,appear in and prosecute in its own name,any action or
proceedings, or to make any compromise or settlement, in connection with such taking or damage.
Subject to the rights of any senior lender that has been approved by Beneficiary, all such
compensation, awards, damages, rights of action and proceeds which are not used to reconstruct,
restore or otherwise improve the Property or part thereof that was taken or damaged, including the
proceeds of any policies of fire and other insurance affecting the Property, are hereby assigned to
Beneficiary. After deducting therefrom all its expenses, including reasonable attorney's fees, the
balance of the proceeds which are not used to reconstruct,restore or otherwise improve the Property
or part thereof that was taken or damaged,will be applied to the amount due under the HOME
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Promissory Note secured hereby. No amount applied to the reduction of the principal will relieve
the Trustor from making payments as required by the HOME Promissory Note. If the HOME Note
has been repaid in full, the remainder of the balance will revert to the Trustor;
18. Upon default by Trustor in making any payments provided for in the HOME
Promissory Note secured hereby or in this HOME Deed of Trust, or in performing any
obligation set forth in any of the Secured Obligations, and if such default is not cured within the
respective time provided therefor in Section 34 of this HOME Deed of Trust, below,
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 the property to be sold, which notice Trustee will cause to be duly filed for
record and Beneficiary may foreclose this HOME Deed of Trust. Beneficiary will also deposit
with Trustee this HOME Deed of Trust, the HOME Promissory Note and all documents
evidencing expenditures secured hereby;
19. a. Prior to the repayment in full of the HOME Loan,the Trustor must not assign
or attempt to assign the HOME Housing Agreement or any right therein, nor make any total or
partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the
Improvements, or any portion thereof or interest therein (referred to hereinafter as a"Transfer"),
without prior written approval of the Beneficiary, except as otherwise permitted in the Secured
Obligations. Consent to one such transaction will not be deemed to be a waiver of the right to
require consent to future or successive transactions. Beneficiary will not unreasonably withhold or
delay its consent. If consent should be given, any such transfer will be subject to this Section 19,
and any such transferee must assume all obligations hereunder and agree to be bound by all
provisions contained herein.
b. Any such proposed transferee must have the qualifications and financial
responsibility necessary and adequate as may be reasonably determined by the Beneficiary,to fulfill
the obligations undertaken by Trustor in the Secured Obligations. Any such proposed transferee,by
instrument in writing satisfactory to the Beneficiary and in form recordable among the land records
of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary
must expressly assume all of the obligations of the Trustor under the Secured Obligations,and agree
to be subject to all conditions and restrictions applicable to the Trustor in this HOME Deed of Trust.
There will be submitted to the Beneficiary for review all instruments and other legal documents
proposed to effect any such transfer; and if approved by the Beneficiary its approval will be
indicated to the Trustor in writing.
C. In the absence of specific written agreement by the Beneficiary,no Transfer,
or approval thereof by the Beneficiary,will be deemed to relieve the Trustor or any other parry from
any obligations under the Secured Obligations.
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d. In the event of a Transfer prior to the time the HOME Loan is paid in full and
without the prior written consent of the Beneficiary,the net proceeds of such Transfer,will be paid to
the Beneficiary to the extent necessary to pay in full the accrued interest and remaining principal
balance of the HOME Loan.
e. (1) As used herein,"Transfer"includes the sale, agreement to sell,transfer
or conveyance of the Property, the Project, or any portion thereof or interest therein, whether
voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale
contract or similar instrument affecting all or a portion of the Property or Project,the lease of all or
substantially all of the Property or Project, except as provided in subparagraph (3) below, or the
appointment of a receiver or trustee to operate or exercise direct or indirect control over any portion
of or interest in the Project or to operate or exercise direct or indirect control. over Trustor or any
interest in Trustor.
(2) "Transfer" also includes the transfer, assignment, hypothecation or
conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor
to an entity form other than that of Trustor at the time of execution of this Deed of trust, except that,
a cumulative change in ownership interest of trustor of forty-nine percent (49%) or less will not be
deemed a"Transfer" for purposes of this HOME Deed of Trust.
(3) Notwithstanding paragraphs (1) and (2), "Transfer" will not include
any of the following Permitted Transfers:
(i) The leasing for occupancy of all or any part of the Property or
Project in accordance with the Housing Agreement and the HOME Regulatory Agreement; and
(ii) A refinancing that repays any portion of a Senior Loan(referred
to herein as a "Take-out Loan"), if the City Manager or designee reasonably determines (which
determination will not be unreasonably withheld, conditioned or delayed)that the resulting loan-to-
value ratio (including the Take-out Loan, any of the remaining Senior Loan not repaid by the
refinancing, and the HOME Loan)will not exceed the loan-to-value ratio in effect at the time of the
Construction Financing Event for the Project, and the repayment terms of the Take-out Loan do not
materially impair the Trustor's ability to repay the HOME Loan.
f. Beneficiary will not unreasonably withhold,condition or delay its approval of
any matter for which its approval is required hereunder. Any disapproval will be in writing and
contain Beneficiary's reasons for disapproval.
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20. After the lapse of such time as may then be required by law following the recordation
of a notice of default, and notice of sale having been given as then required by law,Trustee,without
demand on Trustor,will sell the Property at the time and place fixed by it in the 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 the Property by public announcement at the time and place of
sale, and from time to time thereafter may postpone the sale by public announcement at the time and
place of sale, and from time to time thereafter may postpone the sale by public announcement at the
time fixed by the preceding postponement. "Trustee will deliver to the purchaser its deed conveying
the property so sold, but without any covenant or warranty, express or implied. The recitals in the
deed of any matters or facts will be conclusive proof of the truthfulness thereof. Any person,
including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee will apply the
proceeds of sale to payment of(1) the expenses of such sale, together with the reasonable expenses
of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale,and
the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any
search and/or other evidence of title procured in connection with such sale and revenue stamps on
Trustee's deed; (3) all sums expended under the terms hereof,not then repaid, with accrued interest
at the rate specified in the HOME P r o m i s s o r y Note; (4) all other sums then secured hereby;
and (5) the remainder, if any, to the person or persons legally entitled thereto;
21. Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter will be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution will be made by written instrument executed by Beneficiary,containing reference to this
HOME Deed of Trust and its place of record,which,when duly recorded in the proper office of the
county or counties in which the property is situated, will be conclusive proof of proper
appointment of the successor trustee;
22. The pleading of any statute of limitations as a defense to any and all obligations
secured by this HOME Deed of Trust is hereby waived to the full extent permissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have been
paid and all obligations secured hereby have been satisfied, including but not limited to the
obligations set forth in the HOME Regulatory Agreement, and upon surrender of this H OME Deed
of Trust and any note, instrument or instruments setting forth all obligations secured hereby to
Trustee for cancellation and retention and upon payment of its fees, Trustee will reconvey,without
warranty,the Property then held hereunder. The recitals in such reconveyance of any matters or
fact will be conclusive proof of the truthfulness thereof. To the extent permitted bylaw, the
grantee in such
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reconveyance may be described as "the person or persons legally entitled thereto." Neither
Beneficiary nor Trustee will have any duty to determine the rights of persons claiming to be rightful
grantees of any reconveyance. When the Property has been fully reconveyed, the last such
reconveyance will operate as a reassignment of all future rents, issues and profits of the Property to
the person or persons legally entitled thereto;
24. The trust created hereby is irrevocable by Trustor;
25. This HOME Deed of Trust applies to, inures to the benefit of, and binds all parties
hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The
term `Beneficiary"will include not only the original Beneficiary hereunder but also any future owner
and holder including pledgees,of the HOME Promissory Note secured hereby. In this HOME Deed
of Trust, whenever the context so requires, the masculine gender includes the feminine and/or
neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint
and several;
26. Trustee accepts this Trust when this HOME Deed of Trust, duly executed and
acknowledged, is made public record as provided by law. Except as otherwise provided by law the
Trustee is not obligated to notify any parry hereto of pending sale under this HOME Deed of
Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee will be a party
unless brought by Trustee. Beneficiary, at its option, may from time to time remove Trustee and
appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the
Property, the successor trustee will succeed to all the title, power and duties conferred upon the
Trustee herein and by applicable law;
27. The undersigned Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this HOME
Deed of Trust;
28. Trustor agrees at any time and from time to time upon receipt of a written request
from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits,
and operating expenses of the premises, and the names of the occupants and tenants in possession,
together with the expiration dates of their leases and full information regarding all rental and
occupancy agreements, and the rents provided for by such leases and rental and occupancy
agreements,and such other information regarding the premises and their use as may be requested by
Beneficiary;
29. Trustor agrees that the loan secured by this HOME Deed of Trust is made expressly
for the purpose of financing the rehabilitation of the Property for the purpose of providing nine
dwelling units of affordable housing for Very Low and Low Income
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Households, and such dwelling units will be occupied exclusively by such persons;
30. Trustor agrees that, except as otherwise provided in the HOME Promissory Note,
upon sale or refinancing of the Property, the entire principal balance of the debt secured by this
HOME Deed of Trust, plus any accrued but unpaid interest thereon, will at the option of
Beneficiary be immediately due and payable;
31. (a) The obligation to repay the HOME Loan is a nonrecourse obligation of
Trustor. Except as provided otherwise in the HOME Promissory Note,Trustor will have no personal
liability for payment of the HOME Loan. The sole recourse of Beneficiary will be the exercise
of its rights against the Property and the improvements thereon and any related security for the
HOME Loan. Provided,however,that the foregoing will not(a)constitute a waiver of any obligation
evidenced by the HOME Promissory Note; (b) prevent or in any way hinder Beneficiary from
exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief
in respect of the exercise of, any remedy prescribed by law or in equity in case of default, other
than repayment of the HOME Loan; or (c) relieve Trustor of any of its obligations under any
indemnity delivered by Trustor to Beneficiary. The foregoing provisions of this paragraph are
limited by the provision that in the event of the occurrence of a default, Trustor and its successors
and assigns will have personal liability hereunder for any deficiency judgment, but only if and
to the extent Trustor, its principals, shareholders, or its successors and assigns, received rentals,
other revenues, or other payments or proceeds in respect of the mortgaged Property after the
occurrence of such default, which rentals, other revenues, or other payments or proceeds have not
been used for the payment of ordinary and reasonable operating expenses of the mortgaged
Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service,
real estate taxes in respect of the mortgaged Property and basic management fees, but not
incentive fees, payable to an entity or person unaffiliated with Trustor in connection with the
operation of the mortgaged Property,which are then due and payable.
(b) Notwithstanding the foregoing, Beneficiary may obtain a judgment or order
(including, without limitation, an injunction) requiring any Person to perform (or refrain from)
specified acts other than repayment of the HOME Loan;may proceed against any Person whatsoever
with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement
agreements or similar rights to payment or performance; and may recover directly from any Person:
(i) any damages, costs and expenses incurred by Beneficiary as a result of
fraud or any criminal act or acts of Trustor or any member, shareholder, officer, director, agent or
employee of Trustor;
(ii) any damages, costs and expenses incurred by Beneficiary as a result of
any misappropriation of funds provided for the Project,rents and revenues from the operation of the
OCCHC-7792 BARTON DRIVE
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Project, or proceeds of insurance policies or condemnation proceeds by Trustor or any member,
partner, shareholder, officer, director or employee of Trustor;
(iii) any and all amounts owing by Trustor pursuant to Trustor's
indemnification regarding Hazardous Substances; and
(iv) all court costs and attorneys' fees reasonably incurred in enforcing or
collecting upon any of the foregoing exceptions.
32. Notwithstanding specific provisions of this HOME Deed of Trust, non-monetary
performance hereunder will not be deemed to be in default where delays or defaults are proximately
caused by any of the following Force Majeure events, provided such event actually delays and
interferes with the timely performance of the matter,and,despite the exercise of diligence and good
business practices, such event is beyond the reasonable control of Trustor: War; insurrection;
strikes;lock-outs;riots; floods; earthquakes;fires; casualties; acts of God;acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority;litigation including litigation challenging the validity of this transaction or
any element thereof, unusually severe weather; inability to secure necessary labor, materials or
tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or
failure to act of any Governmental Authority (except acts or failure to act of the Beneficiary
will not excuse performance by the Beneficiary); the imposition of any applicable moratorium
by a Governmental Authority; or any other causes which despite the exercise of diligence and
good business practices are or would be beyond the reasonable control of the party claiming such
delay and interference. Notwithstanding the foregoing,none of the foregoing events will constitute
a Force Maj eure Event unless and until Trustor delivers to Beneficiary written notice describing the
event, its cause, when and how Trustor obtained knowledge, the date the event commenced, and
the estimated delay resulting therefrom. Trustor must deliver such written notice within ten
(10) business days after it obtains actual knowledge of the event;
33. If the rights and liens created by this HOME Deed of Trust are held by a court of
competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations, the
unsecured portion of such obligations must be completely performed and paid prior to the
performance and payment of the remaining and secured portion of the obligations, and all
performance and payments made by Trustor will be considered to have been performed and paid
on and applied first to the complete payment of the unsecured portion of the obligations;
34. (a) Subject to the extensions of time set forth in Section 32, and subject to the
further provisions of this Section 34, failure or delay by Trustor to perform any term or provision
OCCHC-7792 BARTON DRIVE
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respectively required to be performed under the Secured Obligations or this HONIEDeed of Trust
constitutes a default under this HOME Deed of Trust.
(b) Beneficiary will give written notice of default to Trustor and Investor Limited
Partner, specifying the default complained of by the Beneficiary. Failure or delay in giving such
notice will not constitute a waiver of any default nor will it change the time of default.
(c) Any failures or delays by Beneficiary in asserting any of its rights and
remedies as to any default will not operate as a waiver of any default or of any such rights or
remedies. Delays by Beneficiary in asserting any of its rights and remedies will not deprive
Beneficiary 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.
(d) If a monetary event of default occurs, prior to exercising any remedies
hereunder,Beneficiary will give Trustor written notice of such default. Trustor will have a period of
fifteen (15) days after such notice is given within which to cure the default prior to exercise of
remedies by Beneficiary.
(e) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, Beneficiary will give Trustor notice of such default. If the default is reasonably capable
of being cured within thirty(30)days,Trustor will have such period to effect a cure prior to exercise
of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured
within thirty (30) days, and Trustor (1) initiates corrective action within said period, and (ii)
diligently, continually, and in good faith works to effect cure as soon as possible,then Trustor will
have such additional time as is reasonably necessary to cure the default prior to exercise of any
remedies by Beneficiary. In no event will Beneficiary be precluded from exercising remedies if its
security becomes or is about to become materially jeopardized by any failure to cure a default or the
default is not cured within ninety(90) days after the first notice of default is given.
(f) Except as otherwise required to comply with the provisions of California Civil
Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by
electronic facsimile transmission followed by delivery of a "hard" copy, will be deemed delivered
upon its transmission; any notice of default that is personally delivered (including by means of
professional messenger service, courier service such as United Parcel Service or Federal Express,or
by U.S. Postal Service), will be deemed received on the documented date of receipt by Trustor; and
any notice of default that is sent by registered or certified mail, postage prepaid, return receipt
required will be deemed received on the date of receipt thereof
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35. In the event of a default or breach by Trustor of any security instrument securing
a senior loan, Beneficiary will have the right to cure the default prior to completion of any
foreclosure. In such event, Beneficiary will be entitled to reimbursement by Trustor of all costs
and expenses incurred by Beneficiary in curing the default. The amount of any such
disbursements will be a lien against the Property and added to the obligation secured by this
HOME Deed of Trust until repaid, with interest at the highest rate permitted by law;
IN WITNESS WHEREOF Trustor has executed this HOME Deed of Trust as of the day
and year set forth above.
"TRUSTOR"
ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,
a California nonprofit public benefit corporation
By:
,
N endez
Its: Executive Director
APPROVED BY:
THE CITY 9F HUNTINGTON BEACH, a
municipal r t* of the State of California
By:
ty MagerR
ATTEST:
City Clerk <5 Vkv�i 5W
APPROVED AS TO FO
By: 7�� City Attorney Vp w t0\lOWO
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CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to
which this certificate is attached,and not the truthfulness,accuracy,or validity of that document.
State of California
County of Orange
On Nov. 07, 2016 before me, CATHY GAMBINO Notary Public,
(Here insert name and title of the officer)
personally appeared - NORA MENDEZ -
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 offic'al seal. Iu
CATHY GAMBINOr NOTARY PUBLIC
PUBLIC-CALIFORNIA
In
Los ANGELES COUNTY
(Notary Seal) MY CohIm.ExP.DEC.12,2011
Signature of Notary Public
ADDITIONAL OPTIONAL INFORMATION
INSTRUCTIONS FOR COMPLETING THIS FORM
Any acknowledgment completed in California must contain verbiage exactly as
DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be
properly completed and attached to that document. The only exception is if a
Deed of Trust,Security Agmt&Fixture Filing(with Assignment of Rents) document is to be recorded outside of California.In such instances, any alternative
(Title or description of attached document) acknowledgment verbiage as may be printed on such a document so long as the
verbiage does not require the notary to do something that is illegal for a notary in
By Orange Co.Community Housing Corp.For the Benefit of The California (i.e. certifying the authorized capacity of the signet). Please check the
(Title or description of attached document continued) document core f illy for proper notarial wording and attach this form tf required.
Number of Pages 15 Document Date • State and County information must be the State and County where the document
g signer(s)personally appeared before the notary public for acknowledgment.
• Date of notarization must be the date that the signer(s)personally appeared which
City of Huntington Beach(Home Program)
must also be the same date the acknowledgment is completed.
(Additional information) • The notary public must print his or her name as it appears within his or her
commission followed by a comma and then your title(notary public).
• Print the name(s) of document siener(s) who personally appear at the time of
notarization.
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❑✓ Individual(S) he/she/they,is/are)or circling the correct forms.Failure to correctly indicate this
information may lead to rejection of document recording.
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Impression must not cover text or lines. If seal impression smudges,re-seal if a
(Title) sufficient area permits,otherwise complete a different acknowledgment form.
❑ Partner(S) • Signature of the notary public must match the signature on file with the oft-ice of
the county clerk.
❑ Attorney-in-Fact Additional information is not required but could help to ensure this
❑ Trustee(s) acknowledgment is not misused or attached to a different document.
❑ Other Indicate title or type of attached document,number of pages and date.
Indicate the capacity claimed by the signer. If the claimed capacity is a
corporate officer,indicate the title(i.e.CEO,CFO,Secretary).
• Securely attach this document to the signed document
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A notary public or other officer completing this certificate verifies only the identity
of the individual who signed the document to which this certificate is attached, and
not the truthfulness, accuracy, or validity of that document.
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On October 25, 2016 before me, P. L. Esparza, Notary Public, personally
appeared Robin Estanislau and Fred A. Wilson who proved to me on the basis of
satisfactory evidence to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity
upon behalf of which the persons 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.
P. L. ESPARZA
WITNESS my hand and official seal. Commission#20327501
a"-a^ Notary Public-California zz
z ` '-�� Orange County
My Comm.Expires Aug 4, 2017
(Seal)
(No ary Signature
EXHIBIT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN
THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS.-
LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE
OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING
BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN
DEEDS OF RECORD.
Plotted Easements
APN: 165-223-02
EXHIBIT 8
HOME REGULATORY AGREEMENT
16-5414/145020/DO
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk-Recorder
Oaks II I IE IE 1111111 11111 ] I NO FEE
2, * $ R 0 0 0 8 8 6 4 6 3 6 $
FREE RECORDING REQUESTED BY 2016000587133 4:25 pm 11118116
AND WHEN RECORDED MAIL.TO: 217 405 NO3 F13 39
0.00 0.00 0.00 0.00 114.00 0.00 0.00 0.00
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
APN: 165-223-02
HOME REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
(HOME PROGRAM)
COMMUNITY HOUSING DEVELOPMENT ORGANIZATION(CHDO)
(24 CFR§92504
THIS HOME REGULATORY AGREEMENT AND DECLARAT�qgN OF�COVENANTS
AND RESTRICTIONS (HOME PROGRA ("Agreement"), dated as of-9e#�er�, 2016, is
M)
made and entered into by and between THE CITY OF HUNTINGTON BEACH, a municipal
corporation of the state of California("City"), and ORANGE COUNTY COMMUNITY
HOUSING CORPORATION, a California nonprofit public benefit corporation("Developer"), in
furtherance of the regulations issued by the United States Department of Housing and Urban
Development set forth in 24 CFR Part 92 (the"HOME Regulations").
RECITALS
_l
A. City is responsible for the use of certain funds ("HOME Funds")made available to
the City by the United States Department of Housing and Urban Development ("HUD") under the
HOME Investment Partnerships Program (the "HOME Program").
B. Developer is certified with the City as a Community Housing Development
Organization("CHDO").
C. Property description
D. City and Developer have entered into that certain HOME Affordable Housing
Agreement dated as of October , 2016 (the "HOME Agreement"), concerning Developer's
acquisition and rehabilitation of the improvements located on the Property, including four units of
rental housing (consisting of four 2-bedroom units) , and Developer's use of the Property as
OCCHC—7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO.8
I PAGE 1
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
APN: 165-223-02
HOME REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
(HOME PROGRAM)
COMMUNITY HOUSING DEVELOPMENT ORGANIZATION(CHDO)
(24 CFR§92.504
THIS HOME REGULATORY AGREEMENT AND DECLARATIQN OF COVENANTS
AND RESTRICTIONS (HOME PROGRAM) ("Agreement"), dated as of-Beteber , 2016, is'`�'"
made and entered into by and between THE CITY OF H[_JNTINGTON BEACH, a municipal
corporation of the state of California ("City"), and ORANGE COUNTY COMMUNITY
HOUSING CORPORATION, a California nonprofit public benefit corporation ("Developer"), in
furtherance of the regulations issued by the United States Department of Housing and Urban
Development set forth in 24 CFR Part 92 (the "HOME Regulations").
RECITALS
A. City is responsible for the use of certain funds ("HOME Funds") made available to
the City by the United States Department of Housing and Urban Development ("HUD") under the
HOME Investment Partnerships Program (the "HOME Program").
B. Developer is certified with the City as a Community Housing Development
Organization ("CHDO").
C. Property description
D. City and Developer have entered into that certain HOME Affordable Housing
Agreement dated as of October 1:7, 2016 (the "HOME Agreement"), concerning Developer's
acquisition and rehabilitation of the improvements located on the Property, including four units of
rental housing (consisting of four 2-bedroom units) , and Developer's use of the Property as
OCCHC—7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 1
affordable rental housing to be restricted to Low and Very-Low Income Households. The HOME
Agreement is incorporated herein by this reference as though fully set forth herein. Any capitalized
terms not defined herein shall have the meanings ascribed to such terms in the HOME Agreement.
E. Developer has executed a promissory note (the "HOME Note") dated on or about
the date hereof, evidencing a loan of HOME Funds from the City to Developer in the principal
amount of SEVEN HUNDRED EIGHTY-ONE THOUSAND TWO HUNDRED TWENTY
DOLLARS ($781,220) ("HOME Loan"). The HOME Note is secured by a Deed of Trust With
Assignment of Rents dated on or about the date hereof, naming City as beneficiary ("HOME Deed
of Trust"). In consideration of the HOME Loan and in satisfaction of HOME Program
requirements, all four of the Units are designated as HOME Units.
F. City and Developer now desire to place restrictions upon the use and operation of
the Property, in order to ensure that the Property shall be operated continuously as an affordable
housing project available for rental to Low and Very-Low Income persons in accordance with
HOME Regulations and the terms set forth below.
AGREEMENT
NOW THEREFORE, the Developer and City declare, covenant and agree, by and for
themselves, their heirs, executors, administrators and assigns, and all persons claiming under or
through them, that the Property, for the term of this agreement, shall be held transferred,
encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restriction
hereinafter set forth:
1. DEFINITIONS
The following terms, as used in this Agreement, will have the meaning given unless
expressly provided to the contrary:
"HOME Rent" means rental rates not to exceed the applicable rent limits set forth by the
HOME Program in 24 CFR 92.252(a) and 24 CFR 92.252(b). HOME Rent must include a
reasonable utility allowance for tenant paid utilities..
(1) In the case of Very-Low Income Unit, the rent must meet the following:
The rent does not exceed the lesser of(1) 30 percent of the annual income
of a family whose income equals 50 percent of the median income for the area, as determined by
HUD, with adjustments for smaller and larger families, as provided by HUD (Low HOME Rent);
or (2)the fair market rent for existing housing for comparable units in the area as established by
HUD under 24 CFR 888.111, with adjustments for the number of bedrooms in the unit; or
(2) In the case of Low Income Unit, the rent must meet the following:
a. The rent does not exceed the lesser of(1) 30 percent of the annual
income of a family whose income equals 60 percent of the median income for the area, as
OCCHC—7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE2
determined by HUD, with adjustments for smaller and larger families, as provided by HUD (High
HOME Rent); or (2) the fair market rent for existing housing for comparable units in the area as
established by HUD under 24 CFR 888.111, with adjustments for the number of bedrooms in the
unit.
"Area Median Income" means the area median income of the Orange County primary
metropolitan statistical area (PMSA), with adjustments for household size, as estimated annually
by the United States Department of Housing and Urban Development pursuant to Section 8 of the
United States Housing Act of 1937, as amended.
"Eligible Tenant" mans any person entitled to rent a HOME Designated Unit as set forth
in the HOME Regulatory Agreement
"HOME Restricted Period" means fifteen (15) years from the date of Completion of the
Project.
"Low Income Household" means an adjusted income which does not exceed sixty percent
(60%) of the Area Median Income, adjusted for household size, as published by HUD.
"Table of Rents" The parties agree that if the Project were placed in service on the date of
this Agreement, the maximum gross rent that would be paid by Low and Very-Low Income
households would be as set forth in the table of rents appended as Exhibit No. 2 . The HOME
rents in Exhibit No. 2 will be adjusted to not exceed the maximum rent limits provided by HUD at
the Completion of the Project and will be adjusted periodically thereafter in accordance with 24
CFR Part 92.252(f) and (g).
"Utility Allowance" means an allowance for tenant paid utilities as calculated by using
either the HUD Utility Schedule Model (HUSM) or a project-specific methodology, as described in
HOMEfires—Vol. 13 No. 2, May 2016.
"Very-Low Income Household" means an adjusted income which does not exceed fifty
percent (50%) of the Area Median Income, adjusted for household size, as published by HUD.
2. TERM OF AGREEMENT; PRIORITY OF AGREEMENT
In accordance with the formula set forth in 24 CFR 92.252(e) and as required by 24 CFR
92.504(c)(3)(ix), this Agreement shall remain in effect for the HOME Program required term of
fifteen (15) years following the date of Completion of the Project (the HOME Term"). This
Agreement shall remain in effect throughout its 15 year term, notwithstanding the payment in full
of the HOME Loan. This Agreement is secured by the HOME Deed of Trust and Developer shall
not be entitled to a reconveyance of the HOME Deed of Trust prior to the expiration of the 15-year
term, of this Agreement. This Agreement shall unconditionally be and remain at all times prior and
superior to the lien created by any deed of trust securing construction and/or permanent financing
for the Project and all of the terms and conditions contained in the loan documents relating to such
financing and to the lien of any new mortgage debt which is for the purpose of refinancing all or
any part of such financing. Owner hereby agrees that the Property is to be owned, managed, and
operated as four units of affordable rental housing for Eligible Tenants for the 15 year term of this
OCCHC-7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 3
Agreement. To that end, the Developer hereby represents, covenants, warrants and agrees as
follows:
2.1 Compliance with HOME Regulations.
Developer, its successor and assigns, covenant and agree that the Project shall at all
times during the term of this Agreement comply with applicable requirements set forth in Subpart F
of Part 92 of Title 24 of the Code of Federal Regulations.
2.2 Maximum Per-Unit Subsidy
The amount of the HOME Loan will not exceed the per unit dollar limits established
by HUD pursuant to section 221(d)(3)(11) of the National Housing Act, as implemented in
regulations issued by HUD, 24 CFR 221.514(b)(1) and (c).
2.3 Rehabilitation
The rehabilitation of the Property shall be accomplished within the time provided in
the Schedule of Performance, which is attached to the HOME Agreement as Exhibit 5 .
2.4 Tasks, Budget, and Disbursement
The HOME Funds shall be used exclusively for the payment of costs approved by
the City and incurred in connection with the Project (sometimes referred to herein as the "project
Activities") in accordance with the HOME Agreement. The tasks to be performed with the use of
the HOME Funds, and the Project Budget, which specifies the line items for which HOME Funds
will be used, are set forth in the Project Budget attached to the HOME Agreement as Exhibit 4
Developer shall not request disbursement of HOME Funds until the funds are needed to apply
eligible costs. The City shall have the right to disapprove any request if the City determines the
request is for an ineligible item or is otherwise not in compliance with or inconsistent with the
HOME Agreement and this Agreement.
2.5 CHDO Proceeds
CHDO Proceeds are funds generated by the Project receiving CHDO set-aside
funds. CHDO Proceeds include funds generated from activities such as the permanent financing of
the CHDO project that are used to pay off a CHDO financed construction Iona, or proceeds
generated from the sale of Property to a second non-profit. CHDO Proceeds do not include rental
income generated by the Project. The receipt of CHDO Proceeds by Developer must be reported to
the City within thirty (30) days after receipt. Pursuant to 24 CFR 92.300(a)(2), the City agrees that
Developer may retain CHDO Proceeds that are not required to be paid to the City under the terms
of the HOME Note, on the condition that Developer use such proceeds for affordable housing
activities that benefit Very-Low and Low Income households in the City of Huntington Beach.
The following will be considered allowable activities for which CHDO Proceeds may be expended:
emergency repairs to the Project, Project operating costs and reserves, construction or rehabilitation
of additional affordable rental housing for Very-Low or Low Income households, and Developer's
OCCHC-7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 4
operating costs directly related to the foregoing activities. CHDO Proceeds must be expended for
allowable activities within two (2) years of their receipt by Developer. Developer must maintain,
and submit to the City upon request, accurate and reasonably detailed accounts of the receipt and
expenditure of CHDO Proceeds, including at a minimum the purpose of the expenditure, the
identity of the party receiving the expenditure and the amount. The requirements of this paragraph
shall survive the termination of this Agreement and shall apply to all CHDO Proceeds received by
Developer, even if such proceeds are received after the expiration of the term of this Agreement.
Developer shall retain all books and records relevant to CHDO Proceeds for a minimum of five
years after the expenditure of such proceeds. The City, HUD and the Comptroller General of the
United States, and any of their representatives, shall have the right of access to any pertinent books,
documents, papers or other records of the Developer, in order to make audits, examinations,
excerpts and transcripts.
2.6 Property Standards
Developer shall comply with 24 CFR 92.251.
(1) All of the Units in the Project shall contain facilities adequate for living,
sleeping, eating, cooking and sanitation in accordance with all applicable federal, state and local
laws and codes.
(2) The rehabilitation of the Property shall comply with the City's building code
and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in
effect at the time of Project Completion and the Property shall be decent, safe and sanitary and
shall conform to the building, electrical, plumbing, mechanical and energy codes that have been
adopted by the City of Huntington Beach.
(3) The Property shall comply with the accessibility requirements at 24 CFR
Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (24 USC 794) and, if
applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily
dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 USC 3601-
3619)
(4) Developer shall maintain the housing in compliance with applicable property
standards as required by Section 92.251.
(5) The Project shall comply with the lead-based paint standards in Section
92.355. Housing assisted with HOME Program funds constitutes HUD-associated housing for the
purpose of Lead-Based Paint Poisoning Prevention Act (42 USC Section 4821, et seq.) and is
therefore, subject to 24 Code of Federal Regulations Part 35. Accordingly, and pursuant to Section
92.355 of the Regulations, the Developer hereby agrees to and shall be responsible for testing and
abatement activities specified in the Lead-Based Paint Poisoning Prevention Act and the
regulations set forth at 24 Code of Federal Regulations part 225 with respect to the rehabilitation of
the Property.
OCCHC-7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 5
2.7 Residential Use
Developer covenants and agrees for itself, its successors, its assigns and every
successor in interest to the Property or any part thereof, that Developer, and such successors and
assigns, shall use, maintain and operate the Property during the HOME Affordability Period as a
housing development containing four (4) Units, including four(4) HOME Units, parking,
community room, laundry rooms, and such other ancillary uses as specified in the HOME Loan
Agreement.
All uses undertaken by Developer on the Property shall conform to this HOME
Regulatory Agreement and to all applicable provisions of the Huntington Beach Municipal
Code and Governmental Regulations. During the HOME Affordability Period, none of the
Units on the Property shall at any time be utilized on a transient basis, nor shall the Property
or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house,
rooming house, hospital, nursing home, sanitarium or rest home.
2.8 Conversion of Units
No part of the Project will at any time be owned by a cooperative hosuing
copropartion nor shall the Developer take any steps in connection with the conversion to such
ownership or uses to condominiums, or to any other form of ownership without prior written
approval by the City. Any such conversion shall comply with the requirements of 24 CFR Section
92.255.
2.9 Tenant Preference
2.10 All of the HOME Units will be made available to Eligible Tenants for rental in
accordance with the terms of this Agg eement, and the developer shall not give preference to any
particular class or group in renting the HOME Units, except to the extent that the HOME Units are
required to be leased or rented to Eligible Tenants and except as provided in Section 3.6.
2.11 Tenant Protections
Owner shall comply with the tenant protections provisions of 24 C.F.R. Section
92.253, including but not limited to:
a. The lease of an Affordable Unit must be for not less than one year, unless
by mutual agreement between tenant and Owner.
b. The lease may not contain any of the following provisions:
(1) Agreement by the tenant to be sued, to admit guilt or to a judgment in
favor of Owner in a lawsuit brought in connection with the lease;
OCCHC-7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 6
(2) Agreement by the tenant that the Owner may take, hold, or sell
personal property of household members without notice to the tenant and a court decision on the
rights of the parties. This prohibition, however, does not apply to an agreement by the tenant
concerning disposition of personal property remaining in the Unit after the tenant has moved out
of the Unit. The Owner may dispose of this personal property in accordance with state law.
(3) Agreement by the tenant not to hold the Owner or the Owner's
agents legally responsible for any action or failure to act, whether intentional or negligent; ,
(4) Agreement by the tenant that the Owner may institute a lawsuit
without notice to the tenant;
(5) Agreement by the tenant that the Owner may evict the tenant or
household members without instituting a civil court proceeding in which the tenant has the
opportunity to present a defense, or before a court decision on the rights of the parties;
(6) Agreement by the tenant to waive any right to a trial by jury;
(7) Agreement by the tenant to waive the tenant's right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease; and
(8) Agreement by the tenant to pay attorney's fees or other legal costs if
the tenant wins in a court proceeding by the Owner against the tenant. The tenant, however, may
be obligated to pay costs if the tenant loses.
As required by 24 C.F.R. 92.303, Owner shall adhere to a fair lease and grievance procedure
approved by the City and provide a plan for and follow a program of tenant participation in
management decisions.
2.12 Termination of Tenancy
Owner, its successors or assigns, may not terminate the tenancy or refuse to
renew the lease of a tenant, except (i) for serious or repeated violation of the terms and
conditions of the lease; (ii) for violation of applicable federal, state, or local law; or for other
good cause. Pursuant to 24 C.F.R. 92.253(c), any termination or refusal to renew must be
preceded by not less than 30 days by the Owner's service upon the tenant of a written notice
specifying the grounds for the action.
OCCHC-7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 7
3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS
Developer hereby represents, warrants and covenants as follows:
3.1 Income Restrictions
Except as expressly provided herein, throughout the term of this Agreement, the
HOME Units shall be rented only to, and occupied only by, Eligible Tenants.
3.2 Rent Schedules and Rent Increases
All HOME Units shall be rented at an HOME Rent until the expiration of the
HOME Affordability Period.
Developer shall rent the HOME Units to Eligible Tenants at no more than the
ID
allowable HOME Rents. The Developer is responsible for ensuring that the current operative
income limits,program rents, and utility allowance which are effective at the time of tenant
applicable are used to determine initial tenant eligibility and conformance with affordability
requirements.; and that each tenant recertification is performed using current income limits,
program rents, and utility allowances that assure compliance with the affordability requirements.
The rental rates for the HOME Units shall be adjusted annually based upon annual updates of the
applicable income and rent standards, including but not limited to updates published by the United
States Department of Housing and Urban Development.
Developer shall submit to the City for review and approval its initial rent schedule
and utility allowances, thirty (30) days prior to initial rental of the Units, and on an annual basis as
determined by the date of the initial rent schedule and utility allowance schedule submission.
Rental rates are adjusted, and income determinations are performed annually at the time of lease
renewal. Any increase in rents for the HOEM Units is subject to the provision of outstanding
leases, including the provision that rents are not adjusted until their leases are renewed. The
Developer must provide tenants of those units not less than thirty (30) days prior written notice
before implementing any increase in rents.
In no event shall any of the HOME Units be rented at a rate greater than the
applicable HOME Rent. Failure to comply with the affordability requirements of this Agreement is
an event of default under the terms of the HOME Loan. Subject to the right to cure, the HOME
Loan will be due and payable immediately if the HOME Units do not meet the requirements of this
Agreement.
3.3 Occupancy by Eligible Tenant
An Affordable Unit initially occupied by an Eligible Tenant shall be deemed
occupied by an Eligible Tenant until such Affordable Unit is vacated, even if the tenant's
household income subsequently increases to an amount that exceeds the maximum allowable
income for a Low Income Household, so long as satisfactory actions are taken to ensure that all
vacancies are filled in accordance with this Agreement until the noncompliance is corrected. To
the extent provided by HOME Regulations, Owner shall not terminate or refuse to renew the
OCCHC-7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO.8
PAGE 8
lease of a tenant who initially qualified as an Eligible Tenant but whose income subsequently
increases to an amount that exceeds the maximum allowable income for a Low Income
Household. However, if the tenant's income increases to one hundred forty percent (140%) or
more of the income limit for a Low Income Household, Owner shall raise the tenant's rent
(including a reasonable utility allowance) to an amount equal to thirty percent (30%) of the
tenant's gross household income.
3.4 Maximum Occupancy
The maximum number of persons residing in a Unit may not exceed a number
equal to two times the number of bedrooms in the Unit plus one. For example, no more than
five persons may reside in a two-bedroom Unit. Owner shall be responsible for enforcing this
maximum occupancy limit. Upon discovery of a violation of this Section 3.4, Owner shall
immediately notify the Eligible Tenant of record in writing ("Occupancy Violation Notice").
In the Occupancy Violation Notice, Owner shall inform the Eligible Tenant of the occupancy
violation and provide the Eligible Tenant with an opportunity to cure the violation within thirty
(30) days from the date of the Notice.
3.5 Income Determination
Immediately prior to a prospective tenant's occupancy of an Affordable Unit,
Owner shall obtain and maintain on file an income computation and certification form from
such prospective tenant dated immediately prior to the date of initial occupancy of an
Affordable Unit by such prospective tenant. Owner shall verify that the income information
provided by an applicant is accurate by following all applicable City policies and procedures
and by taking one or more of the following steps as a part of the verification process: (i)
obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a written verification of
income and employment from applicant's current employer; (ill) obtain an income verification
form from the Social Security Administration and/or California Department of Social Services
if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did
not file a tax return for the previous calendar year, obtain other verification of such applicant's
income as is reasonably satisfactory; or (v) obtain such other information as may be
reasonably required. Owner shall update the foregoing records annually and shall provide
copies of updated tenant eligibility records and monthly rental records to City for review,
subject to redaction only to the extent deemed necessary by Owner, after consultation with the
City, to comply with applicable federal and state privacy laws. Upon review of such records,
City may at its option perform an independent audit of the tenant eligibility records in order to
verify compliance with the income and affordability requirements set forth herein. Costs for
such an audit performed by the City shall be deemed a Project Operating Expense, deductible
from the Project's Revenue (as such term is defined in the HOME Note). Owner shall retain the
records described in this Section, including the documentation submitted pursuant to 24 C.F.R.
92.203(a)(1), for a period of five (5) years after the date the respective records were created.
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HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 9
3.6 Rental Priority
Subject to Owner's policies and procedures for screening potential tenants,
which must be approved by the City, the Affordable Units shall be rented according to the
following priorities:
a. When an Affordable Unit becomes available as a result of a tenant
vacation, Owner shall give first priority in renting the Affordable Unit to an Eligible Tenant who
has been displaced by activities of the City.
Except as otherwise set forth above, Affordable Units shall be rented to Eligible Tenants on a
17)
first-come, first-served basis; provided, however, that Owner shall maintain an "interest list" or
"eligibility list" of potential tenants. The rental priority provision set forth in this Section 3.6
shall apply only to the extent such provisions are not in conflict with any applicable federal or
state law or any regulatory agreement affecting the Project that is approved by the City and
recorded in superior priority to this Agreement.
3.7 Maintenance of Records
Owner shall maintain complete and accurate records pertaining to the Affordable
Units, and shall permit any duly authorized representative of the City to inspect the books
and records of Owner pertaining to the Project including, but not limited to, those records
pertaining to tenant eligibility and occupancy of the Affordable Units. Records pertaining to the
Project and Affordable Units shall be retained for a period of five (5) years after the
termination of this Agreement; records pertaining to tenant eligibility shall be retained for the
period set forth in Section 3.5.
To assist the City in meeting its HOME Program recordkeeping and reporting
requirements and to document compliance with the requirements of Section 230.26 of the City of
Huntington Beach Zoning Code, Owner shall prepare, maintain and submit to the City, as
appropriate, the following records and reports:
a. Records which demonstrate that the Property meets the property
standard specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355;
b. Records which demonstrate that each family occupying a HOME
Unit is income eligible in accordance with 24 CFR 92.203;
C. Records which demonstrate that the Property meets the
affordability and income targeting requirements of 24 CFR 92.252 for the duration of this
Agreement. Records shall be kept for each family occupying an Affordable Unit;
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d. Records which demonstrate that each lease complies with the
tenant and participant protections, as specified in 24 CFR 92.253. Records shall be kept for
each family occupying an Affordable Unit;
e. Equal opportunity and fair housing records, including, as applicable:
(1) data on the extent to which each racial and ethnic group
and single- headed household (by gender of household head) have applied for, participated in,
or benefited from, any program or activity funded in whole or in part with HOME funds;
(2) documentation of actions undertaken to meet the
requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act
of 1968, as amended (12 U.S.C. 1701u);
(3) documentation of the actions taken to affirmatively further
fair housing
f. Affirmative Marketing and MBE/WBE records, including, as
applicable:
(1) if applicable, records documenting compliance with the
affirmative marketing procedures and requirements of 24 CFR 92.351;
(2) if applicable, documentation and data on the steps taken by
Owner to implement the City's outreach programs as set forth in applicable City policies and
procedures including data indicating the racial/ethnic or gender character of each business entity
receiving a contract or subcontract of$25,000 or more paid, or to be paid, with HOME funds;
the amount of the contract or subcontract, and documentation of the Owner's affirmative steps
to assure that minority business and women's business enterprises have an equal opportunity
to obtain or compete for contracts and subcontracts as sources of supplies, equipment,
construction and services;
g. if applicable, records which demonstrate compliance with the
requirements of 24 CFR 92.353 relating to displacement, relocation and real property
acquisition, including project occupancy lists identifying the name and address of all persons
occupying or moving into the Property on and after the date on which Owner obtained site
control;
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h. if applicable, records demonstrating compliance with the labor
requirements of 24 CFR 92.354, including contract provisions and payroll records;
i. records demonstrating compliance with the lead-based paint
requirements of 24 CFR 92.355;
j. if applicable, records which support any exceptions to the
conflict of interest prohibition pursuant to 24 CFR 92.356;
k. debarment and suspension certifications required by 24 CFR Parts
24 and
91; and
1. Equal opportunity and fair housing records, including, as applicable:
(1) data on the extent to which each racial and ethnic group and
single- headed household (by gender of household head) have applied for, participated in, or
benefited from, any program or activity funded in whole or in part with HOME funds;
(2) documentation of actions undertaken to meet the
requirements of 24 CFR Part 135 which implements section 3 of the Housing Development
Act of 1968, as amended 1 (12 U.S.C. 1701u);
(3) documentation of actions the Owner has taken to
affirmatively further fair housing.
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Owner shall retain all books and records relevant to the Housing Agreement for a minimum of
five years after the project completion date, except that records of individual tenant income
verifications, project rents and project inspections shall be retained for the most recent five year
period until five years after the affordability period terminates, or until the conclusion or
resolution of,any and all audits or litigation relevant to the Housing Agreement, whichever is
later. The City, HUD and the Comptroller General of the United States, and any of their
representatives, shall have the right of access to any pertinent books, documents, papers or other
records of the Owner, in order to make audits, examinations, excerpts and transcripts.
M. Records, data and documentation as required for the City's performance of
its reporting obligations under the Federal Funding Accountability and Transparency Act of 2006
(FFATA), to the full extent applicable to the Project, which may include but is not necessarily
limited to reporting of executive compensation received by executives of Owner and/or
executives of Owner's partners or members and/or executives of partners or members of any of
Owner's partners or members.
3.8 Termination of Tenancy
Owner, its successors or assigns, may not terminate the tenancy or refuse to renew
the lease of a tenant, except (1) for serious or repeated violations of the terms and conditions of the
lease; (ii) for violation of applicable federal, state, or local law; or(iii) for other good cause.
Pursuant to 24 C.F.R. 92.253(c) any termination or refusal to renew must be preceded by not less
than 30 days by the Owner's service upon the tenant of a written notice specifying the grounds for
the action.
3.9 Tenant Selection
Prior to selecting any tenants for the HOME Designated Units, Developer shall
submit to City the Management Plan which shall include proposed tenant selection policies and
criteria for the HOME Designated Units. The tenant selection criteria shall be subject to City's
approval or disapproval thereof in writing. The tenant selection policies and criteria for the HOME
Designated Units shall require that applicable federal and state fair housing, the HOME Program,
and other applicable Governmental Regulations, preference be given to applicants in the following
order: first to existing income qualified tenants of 77922 Barton Drive, second to persons who live
or work in the City. In addition, the tenant selection policies and criteria shall:
(1) Be consistent with the purpose of providing housing for Very-Low and Low
HOME Households;
(2) Be reasonably related to program eligibility and the applicants' ability to
perform the obligations of the lease;
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(3) Provide for the selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practical; and
(4) Give prompt written notification to any rejected applicant of the grounds for
any rejection.
Developer shall comply with the requirements of 24 CFR 92.253.
3.10 Reliance of Tenant Representations
Each tenant lease shall contain a provision to the effect that Developer has relied on
the income certification and supporting information supplied by the tenant in determining
qualification for occupancy of a HOME Unit, and that any material misstatement in such
certification(whether or not intentional) will be cause for immediate termination of such lease.
4. MAINTENANCE
4.1 Maintenance Covenant
(a) Owner agrees to maintain all interior and exterior improvements, including
landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy
condition), reasonable wear and tear excepted, and in accordance with all applicable laws, rules,
ordinances, orders, and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction (including, but not limited to,
Federal Housing Quality Standards as set forth in 24 C.F.R. 982.401). In addition, Owner shall
keep the Property free from all graffiti and any accumulation of debris or waste material. Owner
shall make all repairs and replacements necessary to keep the improvements in good condition
and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and
landscaping with comparable materials. The maintenance covenant contained in this Section
shall remain in effect for the term of this Agreement.
(b) The Project shall comply with the lead-based paint standards in 24 C.F.R.
§92.355. Housing assisted with HOME Program funds constitutes HUD-associated housing for
the purpose of Lead-Based Paint Poisoning Prevention Act (42 U.S.C. Section 4821, et seg.) and
is, therefore, subject to 24 Code of Federal Regulations Part 35.
4.2 Maintenance Program
Owner must maintain the Property in conformance with an approved Maintenance
Program, including a maintenance budget. The Maintenance Program must describe in
reasonable detail the standards to be followed in maintaining the interior and exterior of the
Improvements, including a schedule indicating the proposed frequency of each element of
maintenance, and will include, at a minimum, the following: periodic cleaning of the interior and
exterior of the Improvements, including windows; removing graffiti; removing debris and waste
materials and otherwise maintaining indoor and outdoor areas of the Property; maintaining any
lawns, plants, shrubs and trees or other landscaping planted on the Property; performing
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i
inspections of all exterior features to determine whether repairs are required; conducting periodic
protective treatments such as rust removal and caulking; conducting repairs to facades, roof,
doors, windows and other exterior features; maintaining fencing and other security devices
and systems; periodic repainting of the exterior; periodic repainting of the interior units and
common areas; periodic replacing of the interior unit carpets; checking building systems,
including, but not limited to the heating and cooling systems, smoke alarms and water heaters;
checking interior unit appliances; and monitoring interior unit bathrooms for mold/mildew. The
Maintenance Program, including any amendments proposed by Owner, will be subject to the
approval of the City Manager.
4.3 Construction Contracts
If Developer engages in any construction work with respect to the Project, to
the greatest extent feasible, and to the extent not prohibited by any applicable Governmental
Regulations, Developer shall provide, and shall require its contractors and their subcontractors
to provide, opportunities to the lower income residents of the City for training and
employment arising in connection with the development of the Project. In addition, Developer
shall provide, and shall require its contractors and their subcontractors to provide, opportunities
for contracts for work to be performed in connection with development of the Project to
residents of the City, to business concerns which are located in or owned in substantial part by
residents of the City and to persons displaced, if any, as a result of the development of the
Project. Developer shall include the language required by this paragraph to be included in any
contract with the general contractor for the Project and shall require the general contractor to
include such language in all subcontracts.
With respect to that portion, if any, and only such portion, of the Project for which
prevailing wages are required to be paid, within thirty (30) days after the request of the City
Manager, Developer shall provide to the City Manager payroll information related to the
development of the Project certified by an officer of Developer to be true and correct. In
addition, Developer shall require its contractors and subcontractors to provide such certified
payroll information within ten (10) days of the City Manager's request.
Upon the request of City, Developer shall deliver to City a written report setting
forth its compliance with the requirements of this Section.
4.4 Labor Standards
Developer shall carry out any construction on the Property in conformance with
all applicable laws, including all applicable federal and state labor standards which such
standards shall include, without limitation: (a) the payment of not less than the wages prevailing
in the locality as determined by the Secretary of Labor pursuant to the Davis Bacon Act (40
U.S.C. 276a to 276a-5), to all laborers and mechanics employed in the development of any part
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of the Project if required by applicable Governmental Regulations; (b) the overtime
provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327
332); and (c) Labor Code § 1720 et seq., including without limitation the payment of prevailing
wage and maintenance of payroll records in accordance with Labor Code §§ 1776 and 1812, and
employment of apprentices in accordance with Labor Code § 1777.5.
Developer further agrees that all public work (as defined in Labor Code §
1720) performed pursuant to this Agreement (the "Work") shall comply with the requirements of
Labor Code § 1770 et seq. In all bid specifications, contracts and subcontracts for the Work,
Developer (or its general contractor, in the case of subcontracts) shall obtain the general
prevailing rate of per diem wages and the general prevailing rate for holiday and overtime
work in this locality for each craft, classification or type of worker needed to perform the
work, and shall include such rates in the bid specifications, contract or subcontract. Such bid
specifications, contract or subcontract must contain the following provision:
"It shall be mandatory for the contractor to pay not less than the said
prevailing rate of wages to all workers employed by the contractor in the execution of this
contract. The contractor expressly agrees to comply with the penalty provisions of Labor Code
§ 1775 and the payroll record keeping requirements of Labor Code § 1776."
The provisions of Labor Code §§ 1775 and 1813 regarding penalties to be
paid upon the failure to pay prevailing wage and for failure to comply with the hours laws
respectively shall be enforced. As set forth in Labor Code § 1810, eight (8) hours labor
constitutes a legal day's work. In accordance with the provisions of Labor Code § 3700,
Developer is required to secure payment of compensation to its employees. Developer shall
include in every contract for the development of the Project: (a) a statement that in accordance
with the provisions of Labor Code § 3700, the contractor will be required to secure the
payment of compensation to its employees; and (b) copies of Labor Code §§ 1771, 1775, 1776,
1777.5, 1813 and 1815.
Within ten (10) business days after the request of the City Manager,
Developer shall provide to the City Manager payroll information related to the Project certified
by an officer of Developer to be true and correct. In addition, Developer shall require its
contractors and subcontractors to provide such certified payroll information within ten (10)
business days of any request by the City Manager.
Developer shall indemnify and hold the City Indemnitees harmless from and
against any and all claims, damages, demands, causes of action, obligations, liabilities, costs and
expenses, including reasonable attorneys' fees and costs, that may be asserted against or incurred
by City Indemnitees with respect to or in any way arising from Developer's compliance with
or failure to comply with all applicable laws, including all applicable federal and state labor
standards, including, without limitation, the requirements of Labor Code § 1720.
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4.5 Section 3
Any construction work performed in connection with the Project is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12
U.S.C. 170lu ("Section 3"). The purpose of Section 3 is to ensure that employment and other
economic opportunities generated by HUD assistance or HUD-assisted projects covered by
Section 3, shall, to the greatest extent feasible, be directed to low- and very low- income
persons (inclusive of members of Very Low Income Senior Households served by the Project),
particularly persons who are recipients of HUD assistance for housing.
Developer agrees to comply with HUD's regulations in 24 CFR Part 135,
which implement Section 3. As evidenced by its execution of this contract, Developer certifies
that it is under no contractual or other impediment that would prevent it from complying with
the Part 135 regulations.
If Developer engages in any construction activities in connection with the Project
to the extend required by any Governmental Regulations, Developer agrees to send to each
labor organization or representative of workers with which Developer or its contractors has a
collective bargaining agreement or other understanding, if any, a notice advising the labor
organization or workers' representative of the Developer's or contractor's commitments under this
Section 3 clause, and will post copies of notices in conspicuous places at the work site where
both employees and applicants for training and employment positions can see the notice. The
notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject
to hire, availability of apprenticeship and training positions, the qualifications for each; and the
name and location of person(s) taking applications for each of the positions; and the anticipated
date the work shall begin.
Developer agrees to include this Section 3 clause in every contract or
subcontract subject to compliance with regulations in 24 CFR Part 135, and agrees to take
appropriate action, as provided in an applicable provision of the subcontract or in this Section
3 clause, upon a finding that the contractor or subcontractor is in violation of the regulations in
24 CFR Part 135. The Developer will not subcontract with any contractor or subcontractor
where the Developer has written notice or actual knowledge that the contractor or subcontractor
has been found in violation of the regulations in 24 CFR Part 135.
Developer will certify to the best of its knowledge that any vacant
employment positions, including training positions, that are filled (a) after the contractor is
selected but before the contract is executed, and (b) with persons other than those to whom the
regulations of 24 CFR Part 135 require employment opportunities to be directed, were not filled
to circumvent'the contractor's obligations under 24 CFR Part 135.
Noncompliance with HUD's regulations in 24 CFR Part 135 may result in
sanctions, termination of this contract for default, and debarment or suspension from future HUD
assisted contracts.
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With respect to work performed in connection with Section 3 covered Indian
Housing assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b)
requires that to the greatest extent feasible, (a) preference and opportunities for training and
employment shall be given to Indians, and (b) preference in the award of contracts and
subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises.
Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to
comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with
section 7(b).
4.6 Compliance with Governmental Regulations
Developer shall carry out the operation and maintenance of the Project, and
any construction thereon, in conformity with applicable Governmental Regulations, including
without limitation, all applicable labor standards, City zoning and development standards,
building, plumbing, mechanical and electrical codes, and all other provisions of the City
Municipal Code, and all applicable disabled and handicapped access requirements, including
without limitation the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq., as
currently exists or as may be amended from time to time, Government Code § 4450, et seq., as
currently exists or as may be amended from time to time, Government Code § 11135, et seq., as
currently exists or as may be amended from time to time, and the California Building Standards
Code, Health and Safety Code § 18900, et seq. as currently exists or as may be amended from
time to time.
4.7 Capital Replacement Reserve Requirements
Developer shall, or shall cause the Property Manager to, commence annual deposits
aggregating Eighteen Thousand Dollars ($3,000), or such greater amount as required by other
lender or investor, if any, into a separate interest-bearing trust account (the "Replacement
Reserve"). Funds in the Replacement Reserve shall be used for capital replacements to the Project,
such as structural and equipment repairs and replacements for fixtures and equipment which are
normally capitalized under generally accepted accounting principles, and shall exclude ordinary
maintenance items such as interior paint. Except for emergency expenditures, any expenditure by
Developer from the Replacement Reserve in excess of Five Thousand Dollars ($5,000) over any
individual amount set forth in the approved Operating Budget must be approved in writing by City
prior to its expenditure. Budgeted expenditures of Two Thousand Dollars ($2,000) or more must be
documented by paid invoices and submitted to City within thirty (30) days of disbursement from
the Replacement Reserve. The non-availability of funds in the Replacement Reserve shall not in
any manner relieve the Developer of the obligation to undertake necessary capital repairs and
improvements and to continue to maintain the Project in the manner prescribed herein. Not less
than once per year, Developer, at its expense, shall submit to City an accounting for the
Replacement Reserve. The adequacy of deposits into the Replacement Reserve shall be reviewed
annually by Developer and City, and the amount of such deposits and the limit on expenditures
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without prior City approval may be adjusted annually in writing by City in its reasonable discretion
based upon an analysis of the reserves and the condition of the Site and any improvements
thereon, but subject to (i) the approval, if applicable, of TCAC, and (ii) consideration of the
cash flow of the Project at that time.
4.8 City Rights
The City shall have the right to enter upon the Property to inspect the Property
and both the interiors and exteriors of the Units, upon seventy-two (72) hours prior written notice
to Owner. City may, but is not obligated to, perform or cause to be performed the maintenance
necessary to cure any default of these maintenance covenants and Owner shall be liable for
payment of reasonable costs to perform such required maintenance; provided, however, that
Owner first be given written notice of the actions required to cure any default, and Owner, after
receipt of such notice, shall have thirty (30) days to cure such defaults, but Owner shall not be
deemed in default of the foregoing maintenance covenant if such default cannot reasonably be
cured within the thirty (30) day period referenced above so long as Owner has commenced to
cure such default within the same thirty (30) day period and is diligently proceeding with the
work to cure such default. Notwithstanding the foregoing, if any property conditions are
reasonably identified by City after a property inspection attended by a representative of Owner
that pose an immediate danger to life or limb, Owner shall have three (3) days to effect corrections
of such condition(s) to City's reasonable satisfaction.
4.9 Annual Report
Owner covenants and agrees to submit to the City an annual report (the
"Annual Report"), which shall include the information required by Section 3.5 of this
Agreement. The Annual Report shall include for each Affordable Unit the rental rate and the
income and family size of the occupants, and shall also include the records described in Section
3.5 herein and any financial statements required by the Housing Agreement. The income
information shall be supplied by the tenant in a certified statement on a form provided by the
City. The Owner shall submit the Annual Report on or before April 30 of the year following the
year covered by the Annual Report. The Owner shall provide for the submission of household
information and certification in its leases with tenants.
4.10 Management Report
Beginning on the date of first occupancy, and for each fiscal year thereafter
during the term of this Agreement, Owner shall also submit on an annual basis, and upon the
written request of the City on a quarterly basis, a report for the management of the Property (the
"Management Report"). The Management Report shall include a profit and loss statement,
budget to date figures, and occupancy report and shall clearly show project revenues,
operating expenses, deposits to and withdrawals from the Project's Capital Reserve Account,
and cash flow available for residual receipts payments, all of which shall be certified by
Developer. The Quarterly Report shall be in a form that is reasonably acceptable to the City
Manager. The City Manager, in his/her sole discretion may waive the requirement of the
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Management Report for one or more quarterly reporting periods. However, such waiver shall
not operate to waive any subsequent requirement of the Management Report for the Restricted
Period. After receipt of such certified financial statements for the Project, City may request
additional financial analyses or obtain a third party review at City's own expense, of financial
statements for the Project to verify the accuracy of the payments by Developer on the HOME
Note or the required deposits into the Capital Reserve Account; provided, however that if such
review reveals a substantial underpayment on the HOME Note in the City's reasonable
discretion, in addition to the other remedies available to the City, the Developer shall promptly
reimburse the City for the reasonable cost of conducting the review.
4.11 Management Plan
Within the time set forth in the Schedule of Performance attached to the HOME
Agreement, Developer shall prepare and submit to the City for approval a management plan in
accordance with the following ("Management Plan"):
4.11.1 Management Plan
The Management Plan, including such amendments as may be approved in
writing by the City (if applicable), shall remain in effect for the term of this Agreement. Developer
shall not amend the Management Plan or any of its components without the prior written consent of
the City. The components of the Management Plan shall include:
(1) Management Agent. The name and qualifications of any proposed
management agent. The City shall approve or disapprove the proposed management agent in
writing based on the experience and qualifications of the management agent. The management
agent shall have demonstrated experience in operating affordable housing comparable to the
Proj ect.
(2) Management Program. A description of the proposed management,
maintenance, tenant selection and occupancy policies and procedures for the HOME Units.
(3) Management Agreement. A copy of the proposed management
agreement specifying the amount of the management fee and the relationship and division of
responsibilities between Developer and management agent.
(4) Tenant Lease or Rental Agreement. A copy of the proposed tenant
lease or rental agreement to be used in renting the HOME Units. The rental agreement/lease shall
not contain any of the following provisions:
a. Agreement to be sued. Agreement by the tenant to be sued,
to admit guilt, or to a judgment in favor of the Developer in a lawsuit brought in connection with
the lease;
b. Treatment of property. Agreement by tenant that the
Developer may take, hold, or sell personal property of household members without notice to
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the tenant and a court decision on the rights of the parties. This prohibition, however, does
not apply to an agreement by the tenant concerning disposition of personal property remaining
in the Unit after the tenant has moved out of the Unit. The Developer may dispose of this
personal property in accordance with state law;
C. Excusing Developer from responsibility. Agreement by the
tenant not to hold Developer or Developer's agents legally responsible for any action or
failure to act, whether intentional or negligent;
d. Waiver of notice. Agreement of the tenant that the
Developer may institute a lawsuit without notice to the tenant;
e. Waiver of legal proceedings. Agreement by the tenant that
the Developer may evict the tenant or household members without instituting a civil court
proceeding in which the tenant has the opportunity to present a defense, or before a court
decision on the rights of the parties;
f. Waiver of a jury trial. Agreement by the tenant to waive any
right to a trial by jury.
g. Waiver of right to appeal court decision. Agreement by the
tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in
connection with the lease; and
h. Tenant chargeable with cost of legal actions regardless of
outcome. Agreement by the tenant to pay attorneys' fees or other legal costs even if the tenant
wins in a court proceeding by the Developer against the tenant. The tenant, however, may be
obligated to pay attorneys' fees and other legal costs if the tenant loses.
(5) Annual Operating Budget
Within the time set forth in the Schedule of Performance attached
to the Housing Agreement and annually thereafter not later than fifteen (15) days prior to the
beginning of the next fiscal or calendar year of the Project, Owner shall submit a projected
operating budget to the City for review and approval. After Owner's initial projected operating
budget submittal, Owner shall annually reconcile each previous year's projected budget with
actual operating results for the Project (`Budget Reconciliation"). In each Budget
Reconciliation, Owner shall set forth an explanation for any major discrepancies between
projected and actual budgets. For purposes of this Agreement, a "major discrepancy" shall
mean a line item difference between projected and actual budgets of 20% or more.
The City shall not unreasonably withhold, condition or delay its approval of any matter for which
its approval is required hereunder, but such matter shall be deemed disapproved unless the City
provides to Owner its written approval within thirty (30) days after receipt of a request for
approval. Any express disapproval shall be in writing and contain the City's reasons for
disapproval. Notwithstanding the foregoing, if the City has not expressly approved or
disapproved Owner's projected operating budget within thirty (30) days after its submittal to the
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City, then Owner shall provide a written notice to the City, sent by registered mail, that it intends
to operate pursuant to the projected operating budget and the City shall have an additional thirty
(30) days within which to approve or disapprove such budget. If the City has not expressly
approved or disapproved the projected operating budget by the end of the second 30-day period,
then Owner may operate the Project under its projected operating budget so long as discretionary
line items do not exceed one hundred ten percent (110%) of the amount of that line item in the
previous year's approved operating budget.
4.11.2 Notices to Developer
Owner hereby covenants and agrees the City shall have the right, at any
time and from time to time, to give notice to Owner if the City determines that the Project is not
being managed or maintained in accordance with the Management Plan. The City may require
the Owner to change management practices or to terminate the management agent and retain a
different management agent, approved by the City. The City agrees that prior to requiring the
Owner to change its management agent or the management practices the City shall identify in
writing the deficiencies complained of and shall informally consult with Owner for a period not
to exceed thirty (30) days, in an attempt to resolve the dispute and achieve a cure of such
deficiencies. If the City determines that such an attempt at informal resolution and/or cure has
been unsuccessful, it shall give the Owner thirty (30) days written notice to change the
management agent. If Owner fails to do as requested by the City in the written notice, the City
may then require the immediate change of the management agent. The management agreement
shall provide that it is subject to termination by the Owner without penalty, upon thirty(30) days
prior written notice. Within ten (10) business days following a direction of the City to replace
the management agent, the Owner shall select another management agent or make other
arrangements satisfactory to the City for continuing management of the Project. The Owner
shall notify the City upon learning that there is a voluntary change in the management or control
of the management agent, and, if the change is unsatisfactory to the City, the City shall be
entitled to require the Owner to change the management agent in accordance with the terms of
this paragraph.
5. OTHER PROGRAM REQUIREMENTS
5.1 HOME Program Covenants
Developer shall comply with all applicable federal requirements set forth in Subpart H of
the HOME regulations, including the following:
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5.1.1 Qualifications as Affordable Housina
As more particularly provided in the Regulatory Agreement, Developer shall use,
manage and operate the Property in accordance with the requirements of the HOME Program
and 24 CFR 92.252 so as to qualify the housing on the Site as affordable housing until the later
of the date the HOME Funds are repaid or the expiration of the Affordability Period. Developer
hereby covenants and agrees to comply with all applicable requirements of the HOME Program,
including, without limitation, those set forth herein
5.1.2 Use of HOME Funds
In accordance with 24 CFR 92.205(a)(1) and 92.206(c), the HOME Funds
shall be used exclusively for acquisition of the Property, which constitutes improved real
property as well as permanent rental housing as required thereby.
5.1.3 Eligible Tenant and Participant Protections
Developer shall comply with the requirements of 24 CFR 92.253.
5.1.4 Handicapped Accessibility
If and to the extent applicable, Developer shall comply with (a) Section 504 of the
Rehabilitation Act of 1973, and implementing regulation at 24 CFR Part 8C governing accessibility
of projects assisted under the HOME Program; and (b) the Americans with Disabilities Act of
1990, and implementing regulations at 28 CFR Parts 35-36 in order to provide handicapped
accessibility to the extent readily achievable.
5.1.5 Lead-Based Paint
Developer shall maintain the Affordable Units in compliance with the applicable
Property Standards as set forth in 24 CFR 92.251. Developer shall comply with the requirements,
as applicable, of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846) and
Residential Lead-Based Paint Hazard Reduction Act of 1992 and implementing regulations at 24
CFR Part 35, including testing and abatement activities.
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5.1.6 Affirmative Marketing
Developer shall implement and perform such affirmative marketing procedures and
requirements (24 CFR 92.351) for the Project as adopted by City and delivered to Developer in its
Affirmative Fair Housing Marketing Plan.
5.1.7 Equal Opportunity and Fair Housing
No person shall be excluded from participation in, be denied the benefits of or be subjected to
discrimination under any program or activity funded in whole or in part with proceeds from the
City Loan.
5.1.8 Property Standards
Owner shall comply with 24 CFR 92.251.
(i) The development of the Property shall comply with the City's
building code and all other applicable local codes, rehabilitation standards, ordinances and
zoning ordinances in effect at the time of project completion, and the Property shall be decent,
safe and sanitary shall conform to the following codes that have been adopted by the City of
Long Beach: Uniform Building Code (UBC) as adopted by the State of California (California
Building Code Title 24 Part 2), National Electrical Code (NEC), Uniform Plumbing Code
(UPC), Uniform Mechanical Code (UMC) and California Energy Code (CEC).
(ii) The Property shall comply with the accessibility requirements at
24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)
and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered
multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act
(42 U.S.C. 3601-3619).
5.1.9 Displacement and Relocation
Developer acknowledges and agrees that, pursuant to 24 CFR 92.253 and consistent
with the other goals and objectives of this party, City must ensure that it has taken all reasonable
steps to minimize the displacement of persons as a result of the Project, if any. Furthermore, to the
extent applicable and to the extent feasibility, residential tenants must be provided a reasonable
opportunity to lease and occupy a suitable, decent, safe, sanitary and affordable dwelling unit on
the subject Property upon completion of construction. Developer agrees to cooperate fully and
completely with City in meeting the requirements of 24 CFR 92.253 and shall take all actions and
measures reasonable required by the City Manager in connection therewith. To the extent
applicable to the Project, Developer agrees that any relocation assistance and/or benefits to which
any occupant of the Property becomes entitled as a consequence of this Agreement, whether under
state or federal law, shall be the obligation of Developer, and Developer agrees to defend,
indemnify and hold City harmless therefrom.
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5.1.10 Faith Based Activities
To the extent applicable to the Project, in accordance with 24 CFR 92.257,
Developer will comply with the restrictions on the use of HOME Funds for faith based activities as
set forth in Section 92.257.
5.1.11 Records and Reports
Developer shall maintain and from time to time submit to City such records, reports
and information as the City Manager may reasonably require in order to permit City to meet the
recordkeeping and reporting requirements required of it pursuant to 24 CFR 92.508, including,
without limitation, the following (such reports may be combined with and/or incorporated in the
reports required elsewhere in this Agreement):
(1) Records which demonstrate that the Property meets the property standard
specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355;
(a) Records which demonstrate that each family occupying the Property is
income eligible in accordance with 24 CFR 92.203;
(b) Records which demonstrate that the Property meets the affordability and
income targeting requirements of 24 CFR 92.252 for the Rental period. Records shall be kept for
each family assisted;
(c) Records which demonstrate that each lease complies with the tenant and
participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family; as
applicable.
(d) Equal opportunity and fair housing records,including, as follows:
a. data on the extent to which each racial and ethnic group;
b. and single-headed household (by gender of household head) have
applied for, participated in, or benefitted from, any program or activity funded in whole or in part
with HOME funds;
C. documentation of actions undertaken to meet the requirements of 24
CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended
(12 U.S.C. 1701u);
d. documentation of the actions the City has taken to affirmatively
further fair housing;
(e) Affirmative Marketing and MBE/"E records, including, as applicable:
e. if applicable, records documenting compliance with the affirmative
marketing procedures and requirements of 24 CFR 92.351;
f. if applicable, documentation and data on the steps taken by
Developer to implement the City's outreach programs to minority-owned and female-owned
OCCHC-7792 BARTON DRIVE
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businesses including data indicating the racial/ethnic or gender character of each business entity
receiving a contract or subcontract of$25,000 or more paid, or to be paid, with HOME funds; the
amount of the contract or subcontract, and documentation of the Developer's affirmative steps to
assure that minority business and women's business enterprises have an equal opportunity to obtain
or compete for contracts and subcontracts as sources of supplies, equipment, construction and
services;
g. if applicable, records which demonstrate compliance with the
requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition,
including project occupancy lists identifying the name and address of all persons occupying or
moving into the Property on and after the date on which Developer obtained site control;
h. if applicable, records demonstrating compliance with the labor
requirements of 24 CFR 92.354, including contract provisions and payroll records;
i. records demonstrating compliance with the lead-based paint
requirements of 24 CFR 92.355;
j. if applicable, records which support any exceptions to the conflict of
interest prohibition pursuant to 24 CFR 92.356;
k. debarment and suspension certifications required by 24 CFR Parts 24
and 91.
1. Developer shall retain all books and records relevant to the HOME
Loan for a minimum of ten years after the project completion date, except that records of individual
tenant income verifications, project rents and project inspections shall be retained for the most
recent ten-year period until ten years after the affordability period terminates, or until the
conclusion or resolution of any and all audits or litigation relevant to the HOME Loan, whichever
is later. The City, HUD and the Controller General of the United States, and any of their
representatives, shall have the right of access to any pertinent books, documents, papers or other
records of the Developer, in order to make audits, examinations, excerpts and transcripts.
in. Developer shall retain at all times the documentation submitted
pursuant to 24 CFR 92.203(a)(1), which provided the basis for determining income eligibility.
5.1.12 Labor Standards (Davis Bacon)
If required by applicable Governmental Regulations, any contract for the work of
Developer in connection with the Project shall contain a Prevailing Wage Clause requiring that not
less than the wages prevailing in the locality, as predetermined by the Secretary of the United
States Department of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 276a-5), will be paid to all
laborers and mechanics employed in the construction of the Project, and such contract(s) shall also
be subject to the overtime provisions, as applicable, of the Contract Work Hours and Safety
Standards Act(40 U_S.C. 327-332). Participating contractors, subcontractors, and other participants
must comply with regulations issued under these Acts and with other federal laws and regulations
pertaining to labor standards and HUD Handbook 1344.1 (Federal Labor Standards Compliance in
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Housing and Community Development Programs), as applicable. The Developer shall supply to
City a certification, in form and substance satisfactory to HUD and the City Manager, as to
compliance with the provisions of this section before receiving any disbursement of HOME Loan
funds.
Developer shall comply with the provisions of 24 CFR 24 relating to the
employment, engagement of services, awarding of contracts, or fielding of any contractor or
subcontractor during any period of debarment, suspension, or placement in ineligibility status.
5.1.13 Use of Debarred, Suspended, or Ineligbile Participants
Developer shall comply with the provisions of 24 CFR 24 relating to the
employment, engagement of services, awarding of contracts, or funding of any contractor or
subcontractor during any period of debarment, suspension, or placement in ineligibility status.
5.1.14 Maintenance of Drug-Free Workplace
Developer shall comply with the provisions of 24 CFR 24 relating to the
employment, engagement of services, awarding of contracts, or funding of any contractor or
subcontractor during any period of debarment, suspension, or placement in ineligibility status.
5.2 Other Federal Requirements and Nondiscrimination (24 CFR 92.350)
Developer acknowledges that 24 CFR 92.350 provides that the Federal requirements
set forth in 24 CFR Part 5, subpart A, are applicable to participants in the HOME Program, and that
these Federal requirements include the following:
5.2.1 Nondiscrimination and Equal Opportunity
(1) Civil Rights, Fair Housing, and Age and Disability Discrimination
Acts Assurances:
Developer assures that no otherwise qualified person shall be excluded
from participation or employment, denied program benefits, or be subjected to discrimination
based on race, color, national origin, sex, age, handicap, religion, or religious preference, under any
program or activity funded by this Agreement, as required by the Fair Housing Act (42 U.S.C.
3601-19) and implementing regulations at 24 CFR part 100 et seq.; Executive Order 11063, as
amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p.
307) (Equal Opportunity in Housing Programs) and implementing regulations. at 24 CFR part 107;
title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4) (Nondiscrimination in
Federally Assisted Programs) and implementing regulations at 24 CFR part 1; the Age
Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part
146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at
24 CFR part 8; Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42. U.S.C. 3601-20)
and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing
regulations.
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(2) Training, Employment and Contracting Opportunities Assurance of
Compliance:
The Project activities to be performed under this Agreement are assisted
under a program providing direct federal financial assistance from HUD which is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12
U.S.C. 1701u ("Section 3"), and the regulations issued by HUD to implement Section 3 (24 CFR
Part 135) (the "Section 3 Regulations"). Pursuant to 24 CFR 135.3, the requirements of the Section
3 Regulations apply to the recipient of such financial assistance only where the amount of federal
assistance exceeds $200,000, and apply to a contractor or subcontractor of such recipient only
where the amount of assistance exceeds $200,000 and the amount of the contract or subcontract
exceeds $100,000. Developer shall provide, to the greatest extent feasible, training, employment
and contracting opportunities generated by the financial assistance to low- and very-low income
persons and business concerns owned by low- or very-low income persons, or which employ low-
or very-low income persons.
(f) MBE/WBE Affirmative Action Outreach Program:
Developer hereby agrees to comply with the City's minority and women
business outreach program in accordance with Executive Order 11625, as amended by Executive
Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority
Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business
Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3
CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise).
(g) Disclosure Requirements
The disclosure requirements and prohibitions of 31 USC 1352 and
implementing regulations at 24 CFR Part 87; and the requirements for funding competitions
established by the Housing and Urban Development Reform Act of 1989 (42 USC 3531 et seq.).
(h) Displacement, Relocation and Acquisition. 24 CFR 92.353.
Developer shall cooperate with the City in connection with any proj ect-
specific relocation plan to be prepared by the City, and shall certify that,to the extent applicable, it
will comply or has complied with the federal relocation, displacement and acquisition rules
governing the HOME Program, which are contained in the Uniform Relocation Act, 49 CFR Part
24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are
displaced from housing units demolished or converted as a result of HOME-funded activities be
provided with relocation assistance.
5.2.2 Requests for Disbursements of Funds
Notwithstanding anything contained in this Agreement to the contrary,
Developer may not request disbursements of funds under this Agreement until the funds are
OCCHC-7792 BARTON DRIVE
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PAGE 28
needed to permanently finance Eligible Costs (as defined by the HOME Program). The amount of
each request shall be limited to the amount needed.
5.2.3 Eligible Costs
Developer shall use HOME Loan proceeds only to pay costs defined as
"eligible costs"pursuant to 24 CFR 92.206.
5.2.4 Affirmative Marketing
Developer shall implement and perform such affirmative marketing procedures and
requirements (24 CFR 92.351) for the Project as adopted by City and delivered to Developer in its
Affirmative Fair Housing Marketing Plan.
5.2.5 Conflict of Interest
Developer shall comply with any applicable conflict of interest provisions set forth
at 24 CFR 570.611.
(1) Interest of Employees, Officers and Officials. No employee, agent,
consultant, officer or elected official or appointed official of the City, or employee, agent,
consultant of officer of Developer, and no other public official of the City who exercises any
functions or responsibilities with respect to the activities assisted with HOME funds or who are in
a position to participate in a decision making process or gain inside information with regard to
these activities, during their tenure and for one year thereafter, may obtain a financial interest or
benefit from a HOME assisted activity or have an interest in any contract or subcontract, or
agreement with respect thereto, or the proceeds thereunder, either for themselves or those with
whom they have family or business ties. Developer shall incorporate, or cause to be incorporated,
in all such contractors or subcontracts a provision prohibiting such interest pursuant to the purposes
of this Section. Fulfillment of"sweat equity" obligations as defined in Section 8201 of the HOME
regulations shall not be considered a violation of this prohibition.
(i) Prohibition Against Occupying HOME-Assisted Units. No officer,
employee, agent, official or consultant of Developer may occupy a HOME assisted Unit.
0) Consultant Activities. 24 CFR 92.358. No person providing
consultant services in an employer-employee type relationship shall receive more than a
reasonable rate of compensation for personal services paid for with HOME funds. In no event,
however, shall such compensation exceed the limits in effect under the provisions of any
applicable statute (e.g., annual HUD appropriations acts which have set the limit at the equivalent
of the daily rate paid for Level IV of the Executive Schedule). Such services shall be evidenced by
written agreements between the parties which detail the responsibilities, standards and
compensation. Consultant services provided under an independent contractor relationship are not
subject to the compensation limitation Level IV of the Executive Schedule.
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5.3 Lobbyinc Prohibition
Owner hereby certifies to City, under penalty of perjury, under the terms of
applicable federal law, that at all applicable times before, during and after the term of this
Agreement, that:
(a) No Federal appropriated funds have been paid or will be paid, by or on
behalf of it, to any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification of any Federal contract,
grant, loan, or cooperative agreement; and
(b) If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with this Federal contract, grant, loan, or cooperative
agreement, it will complete and submit Standard Fonn-LLL, "Disclosure Form to Report
Lobbying," in accordance with its instructions; and
(c) Owner will require that the above stated language in paragraphs a. and b.
be included in the award documents for all subawards at all tiers, including subcontracts,
subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this
Agreement; and
(d) Further, Owner and all subawards at all tiers, including subcontracts,
subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this
Agreement, at all times, shall certify compliance with the provisions of 31 U.S.C. §1352 and any
and all terms and conditions of the Byrd Anti-Lobbying Amendment, as amended from time to
time.
5.4 Other HOME Program Requirements
Developer shall comply with all other applicable requirements of the
HOME Program.
6. ENFORCEMENT
(a) Failure to comply with the affordability requirements of this Agreement is an
event of default under the terms of the HOME Loan. Pursuant to the HOME Promissory Note
evidencing the HOME Loan, subject to the right to cure, the HOME Loan will be due and
payable immediately if the housing does not meet the affordability requirements of this
Agreement.
OCCHC-7792 BARTON DRIVE
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(b) If Owner defaults in the performance or observance of any covenant, agreement
or obligation of Owner pursuant to this Agreement, and if such default remains uncured for a
period of thirty (30) days after written notice thereof(or such longer period as may apply to the
specific alleged default) shall have been given by City, or, in the event said default cannot be
cured within said time period, Owner has failed to commence to cure such default within said
thirty (30) days and diligently prosecute said cure to completion, then City shall declare an
"Event of Default" to have occurred hereunder, and, at its option, may take one or more of the
following steps:
(i) By mandamus or other suit, action or proceeding at law or in equity,
require Owner to perform its obligations and covenants hereunder or enjoin any acts or things
which may be unlawful or in violation of this Agreement; or
(ii) Take such other action at law or in equity as may appear necessary or
desirable to enforce the obligations, covenants and agreements of participant hereunder,
including foreclosure of the Deed of Trust (provided, however, that foreclosure under the Deed
of Trust shall be in the priority position of the Deed of Trust and not this Regulatory Agreement).
(c) Except as otherwise expressly stated in this Agreement, the rights and remedies of
the parties are cumulative, and the exercise by any 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 another party.
(d) Notwithstanding anything to the contrary stated herein, a breach of this
Agreement by Owner or its successors and assigns shall in no way defeat, invalidate or impair
the obligation or priority of any mortgage or deed of trust encumbering the Property.
7. COVENANTS TO RUN WITH THE LAND
Owner hereby subjects the Property to the covenants, reservations, and restrictions set
forth in this Agreement. City and Owner hereby declare their express intent that all such
covenants, reservations, and restrictions shall be deemed covenants running with the land and
shall pass to and be binding upon the Owner's successors in title to the Property; provided,
however, that on the termination of this Agreement said covenants, reservations and restrictions
shall expire, except the nondiscrimination covenants contained in Section 5.1 shall remain in
perpetuity. All covenants without regard to technical classification or designation shall be
binding for the benefit of the City, and such covenants shall run in favor of the City for the entire
term of this Agreement, without regard to whether the City is or remains an owner of any land or
interest therein to which such covenants relate.
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8. ATTORNEYS' FEES
In the event that any action, suit or other proceeding is brought to enforce the
obligations of under this Agreement, each party shall bear its own costs and expenses of suit,
including attorneys' fees, expert witness fees and all costs incurred in each and every such
action, suit or other proceeding, including any and all appeals or petitions therefrom.
9. AMENDMENTS
This Agreement shall be amended only by a written instrument executed by the
parties hereto or their successors in title, and duly recorded in the Official Records of the
County of Orange.
10. NOTICE
1. Any notice required to be given hereunder shall be made in writing and shall be given
by (i) personal delivery, (ii) courier service that provides a receipt showing date and time of
delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the
addresses specified below, or at such other addresses as may be specified in writing by the
parties hereto:
City: City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: Deputy Director of Economic Development
With a copy to: City Attorney's Office
City of Huntington Beach 2000
Main Street
Huntington Beach, CA 92648
Owner: Orange County Community Housing Corporation
2024 N. Broadway, 3rd Floor
Santa Ana, CA 92706-2623
Attention: Executive Director
Notices personally delivered or delivered by courier shall be effective upon receipt.
Mailed notices shall be effective on the earlier of receipt or Noon on the second business day
following deposit in the United States mail.
11. SEVERABILITY/WAIVER/INTERGRATION
1.1. Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not
in any way be affected or impaired thereby.
OCCHC—7792 BARTON DRIVE
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1.2. Waiver. Waiver by either party of the performance of any covenant or
condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any
other covenants or conditions, nor shall the delay or forbearance by either parry in exercising any
remedy or right be considered a waiver of, or an estoppel against, the later exercise of such
remedy or right.
1.3 Integration. This Agreement contains the entire Agreement between the parties
and neither party relies on any warranty or representation not contained in this Agreement.
12. GOVERNING LAW
This Agreement shall be governed by the internal laws of the State of California,
without reference to the principles regarding the conflict of laws.
13. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall
constitute one original and all of which shall be one and the same instrument. This Agreement
may be executed by each party on a separate signature page, and when the executed signature
pages are combined, shall constitute one single instrument.
IN WITNESS WHEREOF, the City and Developer have executed this HOME Regulatory
Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on
the date first written hereinabove.
[signatures appear on following page]
OCCHC-7792 BARTON DRIVE
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EXHIBIT NO. 8
PAGE 33
''O`VNER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON
HOUSING CORPORATION, BEACH, a municipal corporation of
a California nonprofit public benefit the State of California
corporation
By:
Nora Men ez
Its: Executive Director
ATTEST:
e--FA&-04—
City Clerk Robi ES�r,;V11S��t�
APPROVED O FORM:
City Attorney OLQ-) (o �<O\kb
INIT T�D AN PROVED:
ssistant City Manager
REVIE D APPROVED:
i Manager
OCCHC-7792 BARTON DRIVE
HOME REGULATORY AGREEMENT
EXHIBIT NO. 8
PAGE 34
CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to
which this certificate is attached,and not the truthfulness,accuracy,or validity of that document.
State of California
County of Orange
On Nov. 07, 2016 before me, CATHY GAMBINO ,Notary Public,
(Here insert name and title of the officer)
personally appeared - NORA MENDEZ -
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. _� CATHY GAMBINO
r I� COMM.# 2051586
NOTARY PUBLIC•CALIfORNIA U1
(Notary Seal) MY COM Los�E PLCDECO12'Y2017."
Signature of Notary ub c
i
r
ADDITIONAL OPTIONAL INFORMATION
INSTRUCTIONS FOR COMPLETING THIS FORM
Any acknowledgment completed in California must contain verbiage exactly as
DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be
properly completed and attached to that document. The only exception is if a
Home regulatory Agmt&Declaration of Covenants&Restdctions(Home) document is to be recorded outside of California.In such instances, any alternative
(Title or description of attached document) acknowledgment verbiage as may be printed on such a document so long as the
verbiage does not require the notary to do something that is illegal for a notary in
Program)Community Housing Development Organization(CHDO) California (i.e. certifying the authorized capacity of the signer). Please check the
(Title or description of attached document continued) document carefully for proper notarial wording and attach this form f required.
Number of Pages 34 with Document Date • State and County information must be the State and County where the document
signer(s)personally appeared before the notary public for acknowledgment.
Exhibit 1 & 2 • Date of notarization must be the date that the signer(s)personally appeared which
must also be the same date the acknowledgment is completed.
(Additional information) The notary public must print his or her name as it appears within his or her
commission followed by a comma and then your title(notary public).
• Print the name(s) of document signer(s) who personally appear at the time of
notarization.
CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms (i.e.
❑✓ Individual(s) he/she/they-is/are)or circling the correct forms Failure to correctly indicate this
information may lead to rejection of document recording
❑ Corporate Officer • The notary seal impression must be clear and photographically reproducible.
Impression must not cover text or lines. If seal impression smudges,re-seal if a
(Title) sufficient area permits,otherwise complete a different acknowledgment form.
❑ Partner(s) • Signature of the notary public must match the signature on file with the office of
the county clerk.
❑ Attorney-in-Fact Additional information is not required but could help to ensure this
❑ Trustee(s) acknowledgment is not misused or attached to a different document.
❑ Other Indicate title or type of attached document,number of pages and date.
Indicate the capacity claimed by the signer. If the claimed capacity is a
corporate officer,indicate the title(i e CEO,CFO,Secretary).
• Securely attach this document to the signed document
C 2004-2015 Prol-ink Signing S,r ,Inc-Nl Rights Reserved www_TheProLmkcoro-Nationwide Notary Semce
A notary public or other officer completing this certificate verifies only the identity
of the individual who signed the document to which this certificate is attached, and
not the truthfulness, accuracy, or validity of that document.
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On October 24, 2016 before me, P. L. Esparza, Notary Public, personally
appeared Robin Estanislau and Jim Katapodis who proved to me on the basis of
satisfactory evidence to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity
upon behalf of which the persons 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.
P. L. ESPARZA
WITNESS my hand and official seal. Commission#2032750
a =wee Notary Public-California z
"' Orange County r
My Comm. Expires Aug 4, 2017
(Seal)
(Notary Signa )
EXHIBIT 1
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE
COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW
THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF
RECORD.
Plotted Easements
APN: 165-223-02
EXHIBIT 2
AFFORDABILITY REQUIREMENTS
(24 CFR 92.252; 92.504(c)(3)(iii))
Developer shall submit its rent schedule and utility allowances thirty (30) days prior to initial rental of the
units and on an annual basis thereafter. City shall review and approve or disapprove the proposed rent
schedule and utility allowances for compliance with the maximum rent limitations contained in 24 CFR
92.252.
City will provide updated HUD Income and rent limits to Developer as they become available. As of the
date of this Agreement, the applicable income and rent limits are as follows:
ORANGE COUNTY
2016 HOME PROGRAM INCOME LIMITS
Household
Very-Low
Size (Low Low(High
30%Limits HOME) 60% Limits HOME)
1 20,500 34,150 40,980 54,600
2 23,400 39,000 46,800 62,400
3 26,350 43,900 52,680 70,200
4 29,250 48,750 58,500 78,000
5 31,600 52,650 63,180 84,250
6 33,950 56,550 67,860 90,500
7
36,300 60,450 72,540 96,750
8 38,650 64,350 77,220 103,000
ORANGE COUNTY
2016 HOME PROGRAM RENT LIMITS
Unit Size Very-Low Income Low Income
2-Bedroom 914 1,447
These rents include tenant paid utilities. The Developer is to calculate the appropriate utility allowance for
two-bedroom units based on the HUD Utility Schedule Model (HUSM) or a project-specific methodology.
(See HOME fires-Vol. 13 No. 2, May 2016).
Owner shall be responsible for ensuring that the current operative HOME income and rent limits in effect at
the time of the tenant's rental application will be used to determine initial tenant eligibility and conformance
with HOME affordability requirements and that each tenant recertification is conducted using current
HOME income and rent limits to assure compliance with HOME Regulations.
Income determination and rental rate adjustments shall occur upon annual lease renewal. An increase in
rents for HOME assisted units is subject to the provisions of existing leases, including the provision that
rents may not be adjusted until leases are renewed. Developer must provide tenants with not less than thirty
(30) days prior written notice before implementing an increase in rents.
EXHIBIT 9
ENVIRONMENTAL INDEMNITY
ENVIRONMENTAL INDEMNITY
BY ORANGE COUNTY COMMUNITY HOUSING CORPORATION
IN FAVOR OF THE CITY OF HUNTINGTON BEACH
THIS ENVIRONMENTAL INDEMNITY (this "Indemnity"), dated as of
October , 2016, and made by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation (referred to as ``Borrower''),
whose address for purposes of giving notices is 501 Golden Circle, Suite 200, Santa Ana, CA
92705, Attention: Executive Director, in favor of THE CITY OF HUNTINGTON BEACH (the
"City"), whose address for purposes of giving notice is 2000 Main Street, Huntington Beach,
California 92648.
WITNESSETH
WHEREAS, Borrower is the owner of the real property in the City of Huntington Beach
described on Exhibit "A" attached hereto and made a part hereof, and the improvements thereon
(collectively referred to as the "Property");
WHEREAS, Borrower and the City entered into that certain HOME Affordable
Housing Agreement, dated as of October 1-7,2016 (the "HOME Housing Agreement"), pursuant
to which the City agreed to make a loan to Borrower for the purpose of rehabilitating the Property
as affordable rental housing (the "HOME Loan'') (the Housing Agreement and the documents
and instruments referred to therein which are being executed by Borrower concurrently herewith
are referred to collectively as the"HOME Loan Documents");
WHEREAS, Borrower has agreed to execute and deliver to the City this Indemnity to
induce the City to make the HOME Loan.
NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual
agreements hereinafter set forth, Borrower hereby agrees with the City as follows:
1. DEFINITIONS
For the purpose of this Indemnity, "Hazardous Materials" or"Hazardous Substances" will
include, but not be limited to, oil, flammable explosives, asbestos,urea formaldehyde insulation,
radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials,
including, without limitation, any substances defined as "extremely hazardous substances,"
"hazardous substances," "hazardous materials," "hazardous waste" or "toxic substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
including the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. Sections 9601 et seq. ("CERCLA"); the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act of 1976, as
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amended, 42 U.S.C. Sections 6901, et seg.; the Toxic Substances Control Act, as amended, 15
U.S.C. Section 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
Federal Water Pollution Control Act, as emended, 33, U.S.C. Section 1251 et seq.; the
Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine
Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking
Water Act, as amended,42 U.S.C. Section 300f et seq.; and those substances defined as "hazardous
waste" in Section 25117 of the California Health and Safety Code, as "infectious waste" in
Section 25117.5 of the California Health and Safety Code, or as "hazardous substances" in
Section 25316 of the California Health and Safety Code or "hazardous materials'' as defined in
Section 353 of the California Vehicle Code; and in the regulations adopted and orders and
publications promulgated pursuant to said laws. Other capitalized terms used in this Indemnity
will have the meanings ascribed to them in the Housing Agreement with the same force and
effect as if set forth in full below.
2. COVENANTS AND INDEMNITY
The following covenants, and indemnities are hereby given and made by Borrower:
2.1 Covenants.
(a) Borrower covenants that it will strictly comply with any and all laws,
regulations, and/or orders which may be promulgated from time to time relating to Hazardous
Materials ("Hazardous Materials Laws"), to immediately take, at Borrower's sole expense, all
remedial action required by any Hazardous Materials Law or any judgment, consent decree,
settlement or compromise in respect to any Hazardous Materials Claim(as defined herein below),
and to keep the Property free of any lien imposed pursuant to any Hazardous Materials Law or
in relation to any Hazardous Materials Claim.
(b) Borrower covenants that the Property will not, while Borrower is the
owner of any portion thereof, be used for any activities involving, directly or indirectly, the use,
generation, treatment, storage, release, transportation, presence, discharge or disposal of any
Hazardous Materials, except for de minimis quantities used at the Property in strict compliance
with all Hazardous Materials Laws and required in connection with the routine rehabilitation,
operation and maintenance of the Property.
(c) The City will have the right, at any time, to conduct an environmental
audit of the Property at the City's expense, unless Hazardous Materials are found, then at
Borrower's sole cost and expense, and Borrower will cooperate in the conduct of any such
environmental audit. Other than in an emergency, such audit will be conducted only after prior
notice has been given to Borrower and only in the presence of a representative of Borrower.
Borrower will give the City and its agents and employees access to the Property to remove, or
OCCHC-7792 BARTON DRIVE
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otherwise to mitigate the effects of, Hazardous Materials and Borrower will not unreasonably
delay or condition such access.
(e) Borrower will not install, or permit to be installed, on the Property friable
asbestos or any substance containing asbestos and deemed hazardous by any Hazardous
Materials Laws, and, with respect to any such material currently present in the Property, Borrower
will promptly either (1)remove or cause to be removed any material that such Hazardous Materials
Laws deem hazardous and require to be removed, or (ii) otherwise comply with such Hazardous
Materials Laws, all at Borrower's sole cost and expense. If Borrower fails to so do within the
cure period permitted under applicable law, regulation, or order, the City may do whatever is
necessary to eliminate said substances from the premises or to otherwise comply with all
Hazardous Materials Laves, and the costs thereof will be added to the Obligations (as hereinafter
defined) of Borrower under this Section 2.
(f) Borrower must immediately advise the City in writing of any of the
following: (i) any pending or threatened claim against Borrower or the Property by any
governmental entity or agency or by any other person or entity relating to Hazardous Materials
or pursuant to the Hazardous Materials Laws ("Hazardous Materials Claims"), (ii) any condition
or occurrence on the Property that(A) results in noncompliance by Borrower with any Hazardous
Materials Laws, (B) could reasonably be anticipated to cause the Property to be subject to
any restrictions on the ownership, occupancy, use or transferability of the Property under any
Hazardous Materials Law, or(C) could reasonably be anticipated to form the basis of a Hazardous
Materials Claim against the Property or Borrower.
2.2 Indemnity. Borrower hereby agrees to defend, indemnify, protect, and hold
harmless the City and its members, officers, officials, employees, agents, representatives,
servants, contractors, successors and assigns (collectively, the "Indemnitees"), except to the
extent of the Indemnitees' gross negligence or willful misconduct, from and against any and all
damages, losses, liabilities, obligations, penalties, claims (including, without limitation, any third
party tort claims), litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements, or expenses (including, without limitation, attorneys' and experts' fees and
disbursements) of any kind or of any nature whatsoever, whether foreseeable or unforeseeable,
(collectively, the "Obligations") which may at any time be imposed upon, incurred by or
asserted or awarded against the City as a direct or indirect consequence of:
(a) The presence of any Hazardous Materials on, in, under, or affecting all or
any portion of the Property;
(b) The breach of any covenant made by Borrower in Section 2.1 hereof, or
(c) The enforcement by the City of any of the provisions of this Section 2.2 or
the assertion by Borrower of any defense to its obligations hereunder.
1-1
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3. BORROWER'S UNCONDITIONAL OBLIGATIONS
3.1 Unconditional Obligations. Borrower hereby agrees that the Obligations will be
paid and performed strictly in accordance with the terms of this Indemnity, regardless of any
law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Loan
Documents or affecting any of the rights of the City with respect thereto. The obligations of
Borrower hereunder will be absolute and unconditional irrespective of, and Borrower waives any
defense based upon,
(a) The validity, regularity, or enforceability of the Loan Documents or any
other instrument or document executed or delivered in connection therewith;
(b) Any alteration, amendment, modification, release, termination, or
cancellation of any of the H O ME Loan Documents, or any change in the time, manner, or
place of payment of, or in any other term in respect of, all or any of the obligations of Borrower
contained in any of the HOME Loan Documents;
(c) Any extension of the maturity of the HOME Loan or any waiver of, or
consent to any departure from, any provision contained in any of the HOME Loan Documents;
(d) Any exculpatory provision in any of the H O M E Loan Documents
limiting the City's recourse to property encumbered by the HOME Deed of Trust securing the
HOME Loan, or to any other security, or limiting the City's rights to a deficiency judgment
against Borrower;
(e) Any exchange, addition, subordination, or release of, or nonperfection of
any lien on or security interest in, any collateral for the HOME Loan, or any release, amendment,
waiver of, or consent to any departure from any provision of, any other surety or guarantee
given in respect of the HOME Loan;
(f) The insolvency or bankruptcy _of Borrower or of any indemnitor or
guarantor under any other indemnity or guarantee given in respect of the Loan; or
(g) Any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Borrower, or Borrower's approved assignee, or any other
indemnitor or guarantor with respect to the HOME Loan or any or all of the Obligations.
3.2 Continuation. The term of this Indemnity will continue until such time as no legal
action can be successfully brought against the City due to applicable statutes of limitation. This
Indemnity (a) is a continuing indemnity and will remain in full force and effect until the
satisfaction in full of all of the Obligations (notwithstanding the payment in full of the HOME
Loan or the release or other extinguishment of the HOME Deed of Trust, or any other security
for the HOME Loan); and
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(b) will continue to be effective or will be reinstated, as the case may be, if at any time any
payment of any of the Obligations is rescinded or must otherwise be returned by the City upon
the insolvency, bankruptcy, or reorganization of Borrower or otherwise, all as though such
payment had not been made.
3.3 Survival. Borrower's duty to indemnify will survive any judicial or non judicial
foreclosure under the HOME Deed of Trust or transfer of the Property in lieu thereof, the release
and reconveyance or cancellation of the HOME Deed of Trust, and the satisfaction of all of
Borrower's obligations under the HOME Loan Documents.
4. WAIVER
Borrower acknowledges that possible defenses to the enforceability of the Obligations
may presently exist and/or may arise hereafter and as part of the City's consideration for entering
into the Housing Agreement, they have specifically bargained for the waiver and relinquishment
by Borrower of all such defenses. Borrower agrees that it has had the opportunity to seek and
receive legal advice from skilled legal counsel of its choosing and represents and confirms that
Borrower is fully informed regarding, and thoroughly understands, the nature of such possible
defenses, the circumstances under which they may arise, the benefits that they might confer upon
Borrower and the legal consequences to Borrower of waiving such defenses. Borrower makes
this Indemnity with the intent that this Indemnity and all of the waivers herein will each and all
be fully enforceable by the City and that the City are induced to enter into the HOME Housing
Agreement in material reliance upon such presumed full enforceability. Without limitation to the
foregoing, Borrower hereby waives the following:
(a) Promptness and diligence;
(b) Notice of acceptance and notice of the incurrence of any Obligation by Borrower;
(c) Notice of any action taken by the City, Borrower, or any other interested party
under any HOME Loan Document or under any other agreement or instrument relating thereto;
(d) All other notices, demands, and protests, and all other formalities of every kind, in
connection with the enforcement of the Obligations, the omission of or delay in which, but for
the provisions of this Section 4, might constitute grounds for relieving Borrower of its
Obligations hereunder;
(e) The right to a trial by jury with respect to any dispute arising under, or relating to,
this Indemnity;
OCCHC-7792 BARTON DRIVE
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EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY
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(f) Any requirement that the City protect, secure, perfect, or insure any security
interest or lien in or on any property subject thereto;
(g) Any requirement that the City exhaust any right or take any action against
Borrower or any other person or collateral; and
(h) Any defense that may arise by reason of.
(1) The incapacity, lack of authority, death or disability of, or revocation
hereof by, any person or persons;
(2) The failure of the City to file or enforce any claim against the estate (in
probate, bankruptcy, or any other proceedings) of any person or persons; or
(3) Any defense based upon an election of remedies by the City, including,
without limitation, an election to proceed by nonjudicial foreclosure or which
destroys or otherwise impairs the subrogation rights of Borrower or any other
right of Borrower to proceed against a guarantor by the operation of Section 580d
of the California Code of Civil Procedure or otherwise.
5. NOTICES
Any notice, demand, statement, request, or consent made hereunder will be in writing and
will be personally served, mailed by first-class registered mail, return receipt requested, to the
address set forth in the first paragraph of this Indemnity, above, or given by electronic facsimile
("fax") transmission to the fax numbers stated below, with confirmations mailed by first class
registered mail, return receipt requested to the address set forth above, of the party to whom such
notice is to be given (or to such other address as the parties hereto, will designate in writing):
In the case of the City: 714-374-1590
In the case of Borrower: - 714-558-8161
Any notice that is transmitted by fax transmission followed by delivery of a "hard" copy, will be
deemed delivered upon its transmission; any notice that is personally delivered (including by
means of professional messenger service, courier service such as United Parcel Service or
Federal Express, or by U.S. Postal Service), will be deemed received on the documented date of
receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt
required will be deemed received on the date of receipt thereof.
OCCHC-7792 BARTON DRIVE
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6. MISCELLANEOUS
6.1 Borrower must make any payment required to be made hereunder in lawful money
of the United States of America, and in same day funds, to the City at its address specified
in the first paragraph hereof.
6.2 No amendment of any provision of this Indemnity will be effective unless it is in
writing and signed by Borrower and the City and no waiver of any provision of this Indemnity,
and no consent to any departure by Borrower from any provision of this Indemnity, will be
effective unless it is in writing and signed by the City, and then such waiver or consent will be
effective only in the specific instance and for the specific purpose for which given.
6.3 No failure on the part of the City to exercise, and no delay in exercising, any right
hereunder or under any HOME Loan Document will operate as a waiver hereof or thereof, nor
will any single or partial exercise of any right preclude any other or further exercise thereof
or the exercise of any other right. The rights and remedies of the City provided herein and in the
HOME Loan Documents are cumulative and are in addition to, and not exclusive of, any rights
or remedies provided by law. The rights of the City hereunder or under any HOME Loan
Document against any party thereto are not conditional or contingent on any attempt by the City
to exercise any of its rights hereunder or under any other HOME Loan Document against such
party or against any other person or collateral.
6.4 If any provision of this Indemnity is determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable, then that provision will, as to such
jurisdiction, be deemed ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof and without affecting the validity or enforceability of
such provision in any other jurisdiction.
6.5 This Indemnity will (a) be binding upon Borrower, and Borrower's successors
and assigns; and (b) inure, together with all rights and remedies of the City hereunder, to the
benefit of the City, its directors, officers, employees, and agents, any successors to the City's
interest in the Property, any other person who acquires any portion of the Property at a foreclosure
sale or otherwise through the exercise of the City's rights and remedies under the H O M E
Loan Documents, any successors to any such person, and all directors, officers, employees, and
agents of all of the aforementioned parties. Without limiting the generality of clause (b) of the
immediately preceding sentence, the City may, subject to, and in accordance with, the provisions
of the HOME Loan Documents, assign or otherwise transfer all or any portion of its rights and
obligations under any HOME Loan Document, to any other person, and such other person will
thereupon become vested with all of the rights and obligations in respect thereof that were
granted to the City herein or otherwise. None of the rights or obligations of Borrower
hereunder may be assigned or otherwise transferred without the prior written consent of the City.
OCCHC-7792 BARTON DRIVE
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6.6 Borrower hereby (a) irrevocably submits to the jurisdiction of any California or
federal court sitting, in each instance, in Orange County in any action or proceeding arising out
of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non
conveniens or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect of
any such action or proceeding may be heard and determined in such California or federal court.
Borrower irrevocably consents to the service of any and all process which may be required or
permitted in any such action or proceeding to the address specified in the first paragraph of this
Indemnity or in any other manner provided by law. Borrower agrees that a final judgment in any
such action or proceeding will be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by law.
6.7 The title of this document and the captions used herein are inserted only as a
matter of convenience and for reference and will in no way define, limit, or describe the scope or
the intent of this Indemnity or any of the provisions hereof
6.8 This Indemnity will be governed by, and construed and interpreted in accordance
with,the internal laws of the State of California applicable to contracts made and to be performed
therein, except to the extent that the laws of the United States preempt the laws of the State of
California.
6.9 This Indemnity may be executed in any number of counterparts, each of which
will constitute an original and all of which together will constitute one agreement.
IN WITNESS WHEREOF, Borrower has duly executed this Indemnity as of the date set
forth below.
"BORROWER"
ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,
a California nonprofit public benefit corporation
Dated: /oV' By:
en ez
Its: Executive Director
OCCHC-7792 BARTON DRIVE
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EXHIBIT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN
THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE
OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING
BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN
DEEDS OF RECORD.
Plotted Easements
APN: 165-223-02
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
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EXHIBIT 10
ASSIGNMENT OF AGREEMENTS
ASSIGNMENT OF AGREEMENTS
FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION TO
THE CITY OF HUNTINGTON BEACH
L FOR VALUE RECEIVED, the undersigned, ORANGE COUNTY
COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit
corporation ("Developer"), assigns to THE CITY OF HUNTINGTON BEACH, a
municipal corporation of the state of California ("Assignee"), all of its right, title and
interest in and to:
a. All architectural, design, engineering and development agreements, and
any and all amendments, modifications, supplements, addenda and general
conditions thereto (collectively, "Architectural Agreements"); and
b. All plans and specifications, shop drawings, working drawings,
amendments, modifications, changes, supplements, general conditions and
addenda thereto (collectively"Plans and Specifications")
heretofore or hereafter entered into or prepared by any architect, engineer or other person
or entity (collectively "Architect"), for or on behalf of Developer in connection with
the rehabilitation of the Improvements on the Property described in Exhibit A attached.
This assignment is subject to the prior rights, if any, of a lender approved by Assignee
whose lien is senior to the HOME Deed of Trust held by Assignee. The Plans and
Specifications, as of the date hereof, are those which Developer has heretofore, or will
hereafter deliver to Assignee.
2. This ASSIGNMENT OF AGREEMENTS ("Assignment") constitutes a present
and absolute assignment to Assignee as of the Effective Date, subordinate to a lender
approved by Assignee whose lien is senior to the HOME Deed of Trust held by
Assignee ("Senior Lender"); provided, however, Assignee confers upon Developer the
right to enforce the terms of the Architectural Agreements and Developer's rights to
the Plans and Specifications so long as no event which would constitute a Default
after notice or the passage of time has occurred under the HOME Affordable
Housing Agreement dated as of October A�, 2016, between Assignee and Developer
(the "HOME Housing Agreement"). Upon the occurrence of an event which would
constitute a Default after notice or the passage of time under the HOME Housing
Agreement, Assignee may, in its sole discretion, give notice to Architect of its intent to
enforce the rights of Developer under the Architect Agreements and of its rights to the
Plans and Specifications and may initiate or participate in any legal proceedings
respecting the enforcement of said rights. Developer acknowledges that by accepting
this Assignment, Assignee does not assume any of Developer's obligations under the
Architectural Agreements or with respect to the Plans and Specifications.
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3. Developer represents and warrants to Assignee, as of the Effective Date, that: (a)
all Architectural Agreements entered into by Developer are in full force and effect
and are enforceable in accordance with their terms and, to the best of Developer's
knowledge, no default, or event which would constitute a default after notice or the
passage of time, exists with respect to said Architectural Agreements; (b) all copies of
the Architectural Agreements and Plans and Specifications delivered to Assignee are
complete and correct in all material respects; and (c) Developer has not assigned
any of its rights under the Architectural Agreements or with respect to the Plans and
Specifications except as expressly permitted by the HOME Housing Agreement.
4. Developer agrees: (a) to pay and perform all obligations of Developer under the
Architectural Agreements; (b) to enforce the payment and performance of all obligations
of any other person or entity under the Architectural Agreements; (c) not to materially
modify the existing Architectural Agreements nor to enter into any future Architectural
Agreements without Assignee's prior written approval except as otherwise expressly
permitted in the HOME Housing Agreement; and (d) not to further assign (other than
assignment in connection with a loan which is senior in priority to Assignee's
assignment), for security or any other purposes, its rights under the Architectural
Agreements or with respect to the Plans and Specifications without Assignee's prior
written consent.
5. This Assignment secures performance by Developer of all obligations of
Developer under the HOME Housing Agreement. This Assignment is supplemented
by the provisions of the HOME Housing Agreement and said provisions are
incorporated herein by reference.
6. The term "HOME Housing Agreement" as used herein shall mean the HOME
Affordable Housing Agreement dated as October /�, 2016, between Developer and
Assignee, as well as any future amendments and implementation agreements between
Developer and Assignee which refer to this Assignment. Capitalized terms not
otherwise defined herein shall have the meaning set forth in the HOME Housing
Agreement.
7. This Assignment shall be governed by the internal laws of the State of California,
except to the extent that Federal laws preempt the laws of the State of California, and
Developer consents to the jurisdiction of any Federal or State Court within the
State of California having proper venue for the filing and maintenance of any
action arising hereunder. If Assignee should bring any action to enforce its rights
hereunder at law or at equity, Developer shall reimburse Assignee for all reasonable
attorneys' fees and costs expended in connection therewith.
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8. This Assignment shall be binding upon and inure to the benefit of the heirs, legal
representatives, assigns, and successors-in-interest of Developer and Assignee;
provided, however, this shall not be construed and is not intended to waive any
restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation or
encumbrance by Developer contained in the HOME Housing Agreement.
9. The Effective Date of this Assignment shall be the date it is executed by Developer.
IN WITNESS WHEREOF, the undersigned has executed this Assignment as of the date
set forth below.
DEVELOPER:
ORANGE COUNTY COMMUNITY
HOUSING CORPORATION,
a California nonprofit public benefit
corporation
Date: ��/U�/ d . 2U/6 By:
No a Mendez
Its: Executive Director
OCCHC-7792 BARTON DRIVE
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EXHIBIT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN
THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF
MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING
BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN
DEEDS OF RECORD.
Plotted Easements
APN: 165-223-02
EXHIBIT 11
ASSIGNMENT OF RENTS & LEASES
16-5414-145020/DO
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk-Recorder
Fidel Fd�-�h6rm � II II IE�IE�1111111 El�111111 11� I NO FEE
V�2� 1 * $ R 0 0 0 8 8 6 4 6 3 7 $
FREE RECORDING REQUESTED BY 2016000587134 4:25 pm 11/18/16
AND WHEN RECORDED MAIL TO: 217 405 A30 10
0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code§27383)
APN:
ASSIGNMENT OF RENTS AND LEASES
FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION
TO THE CITY OF HUNTINGTON BEACH
NoYr�s�,eTHIS 'ASSIGNMENT OF RENTS AND LEASES (the "Assignment") dated
G-e-ta-Ire-r�j 2 0 16 is made by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation ("Assignor"), in favor of
THE CITY OF HUNTINGTON BEACH, a municipal corporation(the "Assignee").
RECITALS
A. Assignor is the owner of the real property described in Exhibit "A" attached
hereto and the owner of all of the personalty, fixtures, and improvements now or hereafter
located thereon or attached thereto now existing or to be constructed thereon. Said real property,
personalty, fixtures, and the improvements are herein referred to collectively as the "Premises".
B. The City has agreed to make a loan of HOME Funds to Assignor in the original
principal amount of Seven Hundred Eighty-One Thousand, Two Hundred Twenty Dollars
($781,220) (the "HOME Loan"), pursuant to the terms of that certain HOME Affordable
Housing Agreement by and between Assignor and Assignee dated as of October 2016 (the
"HOME Housing Agreement"). The HOME Loan is evidenced by a HOME Promissory Note
Secured by H O M E Deed of Trust, of even date herewith, executed by Assignor in favor of
the City (the "HOME Promissory Note"). The HOME Loan is secured by a HOME Deed of
Trust, Security Agreement and Fixture Filing (With Assignment of Rents), of even date
herewith, executed by Assignor, as Trustor, for the benefit of the City as Beneficiary (the
"HOME Deed of Trust").
In order to induce the City to make the HOME Loan to Assignor, Assignor has agreed to
execute this Assignment.
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXFIIBIT NO. 11—ASSIGNMENT OF RENTS AND LEASES
PAGE 1
MY.n� Wf a. s°GnhCJisu_L
2.G�
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code§27383)
APN:
ASSIGNMENT OF RENTS AND LEASES
FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION
TO THE CITY OF HUNTINGTON BEACH
t4ovrm�JHIS ASSIGNMENT OF RENTS AND LEASES (the "Assignment") dated
O-eto-b e-r_Z _, 2 0 16 is made by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation ("Assignor"), in favor of
THE CITY OF HUNTINGTON BEACH, a municipal corporation (the "Assignee").
RECITALS
A. Assignor is the owner of the real property described in Exhibit "A" attached
hereto and the owner of all of the personalty, fixtures, and improvements now or hereafter
located thereon or attached thereto now existing or to be constructed thereon. Said real property,
personalty, fixtures, and the improvements are herein referred to collectively as the `'Premises".
B. The City has agreed to make a loan of HOME Funds to Assignor in the original
principal amount of Seven Hundred Eighty-One Thousand, Two Hundred Twenty Dollars
($781,220) (the "HOME Loan"), pursuant to the terms of that certain HOME Affordable
Housing Agreement by and between Assignor and Assignee dated as of October, 2016 (the
"HOME Housing Agreement"). The HOME Loan is evidenced by a HOME Promissory Note
Secured by H O M E Deed of Trust, of even date herewith, executed by Assignor in favor of
the City (the "HOME Promissory Note"). The HOME Loan is secured by a HOME Deed of
Trust, Security Agreement and Fixture Filing (With Assignment of Rents), of even date
herewith, executed by Assignor, as Trustor, for the benefit of the City as Beneficiary (the
"HOME Deed of Trust").
In order to induce the City to make the HOME Loan to Assignor, Assignor has agreed to
execute this Assignment.
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I—ASSIGNMENT OF RENTS AND LEASES
PAGE 1
NOW THEREFORE, with reference to the foregoing and in reliance thereon and for
good and valuable consideration, the receipt of which is hereby acknowledged, Assignor agrees
as follows:
AGREEMENT
1. All initially capitalized terms used herein, unless otherwise defined or required by
context, shall have the meaning ascribed to them in the HOME Housing Agreement.
2. Subject to the prior rights, if any, of a lender whose lien is approved by Assignee
as senior to the HOME Deed of Trust held by Assignee ("Senior Lender''), Assignor hereby
absolutely grants, sells, assigns, transfers, and sets over to Assignee, by this Assignment, all of
Assignor's interests, whether now existing or hereafter acquired, in all leases and other
occupancy agreements of any nature, now or hereafter covering all or any part of the Premises,
together with all extensions, renewals, modifications, or replacements of said leases and
occupancy agreements, and together with any and all guarantees of the obligations of the
lessees and occupants (the "Lessees") thereunder, whether now existing or hereafter executed,
and all extensions and renewals of said guarantees. (Said leases and occupancy agreements,
together with any and all guarantees, modifications, extensions and renewals thereof, are
hereinafter referred to collectively as the "Leases" and individually as a"Lease".)
3. Assignor's purpose in making this Assignment is to relinquish to Assignee its
right to collect and enjoy the rents, royalties, issues, profits, income, and other benefits at any
time accruing by virtue of the Leases (hereinafter called "Rents and Profits").
4. The parties intend that this Assignment shall be a present, absolute and
unconditional assignment and shall, immediately upon execution, give the Assignee the right to
collect the Rents and Profits and to apply them in payment of the principal and interest and all
other sums payable on the indebtedness and other obligations under the Note and other loan
documents, as well as all other sums payable under the HOME Deed of Trust or any other
instrument given as security for the indebtedness. However, the Assignee hereby grants to
Assignor a license to collect and use, subject to the provisions set forth below, the Rents and
Profits as they respectively become due and to enforce the Leases, so long as there is no Default
by Assignor in performance of the terms, covenants, or provisions of the H O M E Deed
of Trust, the HOME Promissory Note, or the HOME Housing Agreement, this
Assignment or any other loan document. Nothing contained herein, nor any collection of Rents
and Profits by Assignee or by a receiver, shall be construed to make Assignee a "mortgagee
in possession" of the Premises so long as Assignee has not entered into actual possession of
the Premises.
5. Upon the occurrence of any Event of Default under the terms and conditions of
this Assignment, the HOME Promissory Note, the HOME Deed of Trust, the HOME Housing
Agreement or any other loan document, this Assignment shall constitute a direction and full
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11-ASSIGNMENT OF RENTS AND LEASES
PAGE 2
Authority to each Lessee under any Lease and each guarantor of any Lease to pay all Rents
and Profits to Assignee without proof of the Default relied upon. Assignor hereby irrevocably
authorizes each Lessee and guarantor to rely upon and comply with any notice or demand by
Assignee for the payment to Assignee of any Rents and Profits due or to become due.
6. Assignor represents and warrants as to each Lease now or hereafter covering all
or any portion of the Premises, unless Assignee has been otherwise advised in writing by
Assignor:
a. That each Lease is in full force and effect;
b. That no material default exists on the part of the Lessee thereunder or
Assignor;
C. That no rent in excess of one month's rent has been collected in advance,
except for a one-month security deposit;
d. That no Lease or any interest therein, except to the extent required by the
Senior Lender, has been previously assigned or pledged; and
e. That all rent due to date under each Lease has been collected and no
concession has been granted to any Lessee in the form of a waiver, release, reduction, discount,
or other alteration of rent due or to become due except as previously disclosed to Assignor in
writing.
7. Assignor agrees with respect to each Lease:
a. If any Lease provides for a security deposit paid by the Lessee to Assignor
and subject to the prior rights, if any, of a Senior Lender, this Assignment transfers to Assignee
all of Assignor's right, title, and interest in and to each such security deposit; provided, however,
that Assignor shall have the right to retain said security deposit so long as Assignor is not in
Default under this Assignment, the HOME Deed of Trust, the HOME Promissory Note, the
HOME Housing Agreement or any other H O M E Loan Document, subject to any
applicable notice and cure period; and provided further that Assignee shall have no
obligation to the Lessee with respect to such security deposit unless and until Assignee comes
into actual possession and control of said security deposit.
b. If any Lease provides for the abatement of rent during repair of the leased
premises by reason of fire or other casualty, Assignor shall furnish rental insurance to Assignee,
the policies to be with companies and in form, content, policy limits, and terms as are customary
in the case of entities owning similar property or assets similarly situated.
C. Each Lease shall remain in full force and effect despite any merger of the
interest of Assignor and any Lessee thereunder. Except as otherwise provided in the HOME
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11-ASSIGNMENT OF RENTS AND LEASES
PAGE
Housing Agreement, Assignor shall not terminate any Lease (except pursuant to the terms of
the Lease upon a default by any Lessee thereunder), or materially modify or amend any Lease or
any of the terms thereof, or grant any concessions in connection therewith or accept a
surrender thereof, without the prior written consent of Assignee, which consent shall not be
unreasonably withheld.
d. Assignor shall not collect any Rents and Profits more than thirty (30) days
in advance of the date on which they become due under the terms of any Lease.
e. Assignor shall not discount any future accruing Rents and Profits.
f. Assignor shall not consent to any assignment of any Lease, or any
subletting thereunder, whether or not in accordance with its terms, on any terms less favorable
than those that would reflect an arm's length transaction in light of prevailing market conditions
(subject to the rent restrictions applicable to the Premises), without the prior written consent of
Assignee, except as otherwise provided in the HOME Housing Agreement.
g. Except as otherwise provided in the HOME Housing Agreement,
Assignor shall not execute any further assignment of any of the Rents and Profits or any
interest therein or suffer or permit any such assignment to occur by operation of law.
h. Assignor shall faithfully perform and discharge all obligations of the
lessor under each Lease, and shall give prompt written notice to Assignee of any notice of
Assignor's default received from any Lessee or any other person and furnish Assignee with a
complete copy of said notice. Assignor shall appear in and defend, at no cost to Assignee, any
action or proceeding arising under or in any manner connected with any Lease. If requested by
Assignee, Assignor shall enforce each Lease and all remedies available to Assignor against the
Lessee in the case of default under the Lease by the Lessee.
i. Except as otherwise provided in the HOME Housing Agreement, and
except for residential leases entered into in the ordinary course of business, Assignor shall
give Assignee written notice immediately upon entering into a Lease of any part of the
Premises and shall promptly upon request of Assignee provide to Assignee a true and correct
copy of each executed Lease. Upon written notice from Assignee to Assignor, such Lease shall
be deemed included in this Assignment as though originally listed herein. At Assignee's
option, such notice may be recorded, without cost to Assignor, in the Official Records of
Orange County, California, which notice shall refer to this Assignment.
j. Except as otherwise provided in the HOME Housing Agreement,
Assignor shall not hire, retain, or contract with any third party for property management services
with respect to the Premises without the prior written approval of Assignee, at Assignee's
option, of such party and the terms of its contract for management services.
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I-ASSIGNMENT OF RENTS AND LEASES
PAGE
k. Nothing herein shall be construed to impose any liability or obligation on
Assignee under or with respect to any Lease. Assignor shall indemnify, defend, and hold
Assignee, its officers, directors, agents, employees, and representatives (the "Indemnitee(s)")
harmless from and against any and all liabilities, losses, and damages that any Indemnitee may
incur under any Lease or by reason of this Assignment, and of and from any and all claims and
demands whatsoever that may be asserted against any Indemnitee by reason of any alleged
obligations to be performed or discharged by Assignee under any Lease or this Assignment,
unless any of the foregoing arises from or results from the active concurrent negligence, sole
negligence or sole willful misconduct of any Indemnitee. Should any Indemnitee incur any
liability, loss, or damage under any Lease or by reason of this Assignment and such liability,
loss, or damage falls within the foregoing indemnification, Assignor shall immediately upon
demand reimburse such Indemnitee for the amount thereof together with all costs and expenses
and reasonable attorneys' fees and court costs incurred by such Indemnitee. All of the foregoing
sums shall bear interest at the maximum rate permitted by law from demand by Indemnitee until
paid. Any Rents and Profits collected by Assignee may be applied by Assignee, in its discretion,
in satisfaction of any such liability, loss, damage, claim, demand, cost, expense, or fees.
S. Assignor hereby grants to Assignee the following rights:
a. Upon an Event of Default as defined in the HOME Housing Agreement,
Assignee shall be deemed to be the creditor of each Lessee in respect of any assignments for the
benefit of creditors and any bankruptcy, arrangement, reorganization, insolvency, dissolution,
receivership, or other debtor relief proceedings affecting such Lessee, without obligation on
the part of Assignee, however, to file timely claims in such proceedings or otherwise
pursue creditor's rights therein.
b. Assignee shall have the right to assign Assignor's right, title, and interest
in the Leases to any subsequent holder of the Deed of Trust or any participating interest therein
or to any person acquiring title to all or any part of the Premises through foreclosure or
otherwise. Any subsequent assignee shall have all the rights and powers herein provided to
Assignee.
C. Assignee shall have the right (but not the obligation), upon any Event of
Default under the HOME Deed of Trust or the HOME Housing Agreement, to take any action
as Assignee may deem necessary or appropriate to protect its security, including but not
limited to appearing in any action or proceeding and performing any obligations of the
lessor under any Lease; and Assignor agrees to pay, on demand, all costs and expenses,
including without limitation reasonable attorneys' fees and court costs incurred by Assignee in
connection therewith, together with interest thereon at the rate of ten percent(10%) per annum.
d. Upon any Event of Default under this Assignment, the HOME Deed of
Trust, the H O M E P r o m i s s o r y Note, the HOME Housing Agreement, or any other loan
document (subject to all applicable notice and cure periods), and without notice to or consent of
Assignor, Assignee shall have the following rights (none of which shall be construed to be
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11-ASSIGNMENT OF RENTS AND LEASES
PAGE 5
obligations of Assignee):
i. Assignee shall have the right under this Assignment to use and
possess, without rental or charge, the Fixtures, Equipment, and Personal Property of the Assignor
located in or on the Premises and used in the operation or occupancy thereof. Assignee shall
have the right to apply any of the Rents and Profits to pay installments due for Personal Property
rented or purchased on credit, insurance premiums on Personal Property, or other charges
relating to Personal Property in or on the Premises. However, this Assignment shall not make
Assignee responsible for the control, care, management, or repair of the Premises or any
Personal Property or for the carrying out of any of the terms or provisions of any Lease.
ii. Assignee shall have the right to apply the Rents and Profits and
any sums recovered by Assignee hereunder to the outstanding Indebtedness, as well as to charges
for taxes, insurance, improvements, maintenance, and other items relating to the operation of the
Premises.
iii. Assignee shall have the right to take possession of the Premises,
manage and operate the Premises and Assignor's business thereon, and to take possession of and
use all books of account and financial records of Assignor and its property managers or
representatives relating to the Premises.
iv. Assignee shall have the right to execute new Leases of any part of
the Premises, including Leases that extend beyond the term of the HOME Deed of Trust.
V. Assignee shall have the right to cancel or alter any existing Leases.
vi. Assignee shall have the irrevocable authority, as Assignor's
attorney-in-fact, such authority being coupled with an interest, to sign the name of Assignor and
to bind Assignor on all papers and documents relating to the operation, leasing and maintenance
of the Premises.
e. All of the foregoing rights and remedies of Assignee are cumulative, and
Assignee shall also have upon the occurrence of any such Default or Event of Default all other
rights and remedies provided under the HOME Promissory Note, the HOME Housing
Agreement, the HOME Deed of Trust, or any other loan document or other agreement between
Assignor and Assignee, or otherwise available at law or in equity or by statute.
9. Failure of Assignee to avail itself of any terms, covenants, or conditions of this
Assignment for any period of time or for any reason shall not constitute a waiver thereof.
10. Notwithstanding any future modification of the terms of the HOME
P r o m i s s o r y Note, the H O M E Deed of Trust, the H O ME Housing Agreement, or any
other loan document, this Assignment and the rights and
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I-ASSIGNMENT OF RENTS AND LEASES
PAGE 6
benefits hereby assigned and granted shall continue in favor of Assignee in accordance with the
terms of this Assignment.
11. This Assignment shall be binding upon and inure to the benefit of the respective
heirs, legal representatives, successors, and assigns of the parties hereto (including without
limitation in the case of Assignee, any third parties now or hereafter acquiring any interest in the
Indebtedness or other obligations of Assignor under the HOME Promissory Note or HOME
Deed of Trust or a part thereof, whether by virtue of assignment, participation, or otherwise).
The words Assignor, Assignee, and Lessee, wherever used herein, shall include the persons
and entities named herein or in any Lease and designated as such and their respective heirs,
legal representatives, successors and assigns, provided that any action taken by the named
Assignee (or any successor designated as such by an instrument recorded in the Official
Records of Orange County, California referring to this Assignment) shall be sufficient for all
purposes notwithstanding that Assignee may have theretofore assigned or participated any
interest in the obligation to a third parry. All words and phrases shall be taken to include the
singular or plural number, and the masculine, feminine, or neuter gender, as may fit the case.
12. Any change, amendment, modification, abridgment, cancellation, or discharge of
this Assignment or any term or provision hereof shall be invalid without the written consent of
Assignee.
13. Upon payment to Assignee of the full amount of the Indebtedness and other
obligations secured hereby and by the H O M E P r o m i s s o r y Note and H O M E Deed
of Trust, as evidenced by a recorded satisfaction or release of the HOME Deed of Trust,
this Assignment shall be void and of no further effect. In such event, Assignee shall
cooperate with Assignor to execute such instruments as may be reasonably necessary to
remove the lien of this instrument from the Official Records of Orange County.
14. All notices, demands, approvals, and other communications provided for in this
Assignment shall be sufficiently given if. (1) personally delivered; (ii) delivered by same day or
overnight courier (acknowledged by receipt showing date and time of delivery); or (iii)
dispatched by registered or certified mail, postage prepaid, return receipt requested, to the
addresses set forth below:
If to Assignor: Orange County Community Housing Corporation
501 Golden Circle, Suite 200
Santa Ana, CA 92705
Attention: Executive Director
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11-ASSIGNMENT OF RENTS AND LEASES
PAGE 7
If to City: The City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
With a copy to: City Attorney's Office
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to
accept delivery. Mailed notices shall be effective on the earlier of(i) receipt of refusal to accept
delivery, or (ii) noon on the second business day following deposit in the United States mail.
15. This Assignment may be recorded in the Official Records of Orange County,
California, and Assignor shall pay all fees, charges, costs, and expenses of such recording.
16. If any provision hereof is determined to be illegal or unenforceable for any
reason, the remaining provisions hereof shall not be affected thereby.
17. This Assignment shall be governed by and construed in accordance with the
internal laws of the State of California.
18. If Assignee should bring any action to enforce its rights hereunder at law or at
equity, Assignor shall reimburse Assignee for all reasonable attorneys' fees and costs expended
in connection therewith.
IN WITNESS WHEREOF, the undersigned Assignor has executed this Assignment as of
the date first above written.
"ASSIGNOR"
ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,
a California nonprofit public benefit corporation
By:
N e ez
I s: Executive Director
OCCHC-7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I-ASSIGNMENT OF RENTS AND LEASES
PAGE 8
CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to
which this certificate is attached,and not the truthfulness,accuracy,or validity of that document.
State of California
County of Orange
On Nov. 07, 2016 before me, CATHY GAMBINO ,Notary Public,
(Here insert name and title of the officer)
personally appeared - NORA MENDEZ -
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 , y hand and fficial seal. CATHY GAMBINO
�� r� •M Comm.# 2051586 rn
NOTARY PUBLIC-CALIFORNIA N
(Notary Seal) LOS ANGELES COUNTY
Signature of N—otary Publ c I My Comm EXP,OEc, 12,2017
1
ADDITIONAL OPTIONAL INFORMATION
INSTRUCTIONS FOR COMPLETING THIS FORM
Any acknowledgment completed in California must contain verbiage exactly as
DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be
properly completed and attached to that document. The only exception is if a
Assignment of Rents&Leases From Orange Co Community document is to be recorded outside of California. In such instances,any alternative
(Title or description of attached document) acknowledgment verbiage as may be printed on such a document so long as the
verbiage does not require the notary to do something that is illegal for a notary in
Housing Corp. to the City of Huntington Beach California (i.e. certifying the authorized capacity of the signer). Please check the
(Title or description of attached document continued) document carefully for proper notarial wording and attach this form if required
Number of Pages $ Document Date
• State and County information must be the State and County where the document
Signer(s)personally appeared before the notary public for acknowledgment.
• Date of notarization must be the date that the signer(s)personally appeared which
must also be the same date the acknowledgment is completed
(Additional information) • The notary public must print his or her name as it appears within his or her
commission followed by a comma and then your title(notary public)
• Print the name(s) of document signer(s) who personally appear at the time of
notarization
CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms(i.e.
Individual(s) he/she/they-is/are correct
)or circling the coect forms.Failure to correctly indicate this
information may lead to rejection of document recording.
❑ Corporate Officer . The notary seal impression must be clear and photographically reproducible.
Impression must not cover text or lines. If seal impression smudges,re-seal if a
(Title) sufficient area permits,otherwise complete a different acknowledgment form.
❑ Partner(s) • Signature of the notary public must match the signature on file with the office of
the county clerk.
❑ Attorney-in-Fact Additional information is not required but could help to ensure this
❑ Trustee(s) acknowledgment is not misused or attached to a different document.
❑ Other Indicate title or type of attached document,number of pages and date.
Indicate the capacity claimed by the signer. If the claimed capacity is a
corporate officer,indicate the title(i.e.CEO,CFO,Secretary)
• Securely attach this document to the signed document
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EXHIBIT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON
BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND
12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON
SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF
SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD.
Plotted Easements
APN: 165-223-02
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
E)UMIT NO. I I—ASSIGNMENT OF RENTS PAGE 9
EXHIBIT 12
NOTICE OF HOME AFFORDABILITY RESTRICTIONS
16-5414-145020/DO
Recorded in Official Records, Orange County
dofliy-Shaman Oaks Hugh Nguyen, Clerk-Recorder 18.00
* $ R 0 0 0 8 8 6 4 6 3 8 $
FREE RECORDING REQUESTED BY 2016000587135 4:25 pm 11/18/16
AND WIN RECORDED MAIL TO: 217 405 NO3 F13 4
0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00
The City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Clerk
(Space Above This Line for Recorder's Office Use Only)
Notice of HOME Affordability Restrictions on Transfer of Property
NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code
Section 33334.3(f) as amended effective January 1, 2008, the City of Huntington
Beach Housing Authority is recording this Notice of Affordability Restrictions on
Transfer of Property (hereinafter the "Notice") with regard to the property located
at 7792 Barton Drive, Huntington Beach, California and more particularly
described in Exhibit "A" attached hereto (the "Property").
The Property is subject to the Regulatory Agreement and Declaration of
Covenants and Restrictions (the "Regulatory Agreement") recorded concurrently
herewith, which restricts the use of the Property as follows:
(1) Two of the four (4) 2-bedroom units shall be rented
exclusively to Very Low Income households and two of the four (4) 2
bedroom units shall be rented exclusively to Low Income households
at an Affordable Rent as provided in California Health and Safety
Code Section 50053.
(2) The maximum incomes of eligible Very Low and Low
Income tenants shall be determined on the basis of the income limits
for households in the Anaheim-Santa Ana-Garden Grove, CA SMSA,
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS
PAGE 1
RLS 16-5414/7792 Barton Drive/144855/DO
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
The City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Clerk
(Space Above This Line for Recorder's Office Use Only)
Notice of HOME Affordability Restrictions on Transfer of Property
NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code
Section 33334.3(f) as amended effective January 1, 2008, the City of Huntington
Beach Housing Authority is recording this Notice of Affordability Restrictions on
Transfer of Property (hereinafter the "Notice") with regard to the property located
at 7792 Barton Drive, Huntington Beach, California and more particularly
described in Exhibit "A" attached hereto (the "Property").
The Property is subject to the Regulatory Agreement and Declaration of
Covenants and Restrictions (the "Regulatory Agreement") recorded concurrently
herewith, which restricts the use of the Property as follows:
(1) Two of the four (4) 2-bedroom units shall be rented
exclusively to Very Low Income households and two of the four (4) 2
bedroom units shall be rented exclusively to Low Income households
at an Affordable Rent as provided in California Health and Safety
Code Section 50053.
(2) The maximum incomes of eligible Very Low and Low
Income tenants shall be determined on the basis of the income limits
for households in the Anaheim-Santa Ana-Garden Grove, CA SMSA,
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS
PAGE 1
RLS 16-5414/7792 Barton Drive/144855/DO
published approximately annually by the California Department of
Housing and Community Development ("HCD").
The affordability restrictions imposed on the Property by the Regulatory
Agreement are scheduled to expire on the date that is fifty-five (55) years after the
issuance of the permanent certificate of occupancy for the initial construction of
the housing on the Property.
This Notice is recorded for the purpose of providing notice only and it in no
way modifies the provisions of the Regulatory Agreement.
THE CITY OF HUNTINGTON BEACH, a public
body corporate and
k-jim By: jajcC"+LL 'J'(S
ATTEST:
City Clerk -
APPROVED AS TO FORM:
By:
City Attorney ULa (Qk�dW
OCCHC—7792 BARTON DRIVE
HOME AFFORDABLE HOUSING AGREEMENT
EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS
PAGE 2
RLS 16-5414/7792 Barton Drive/144855/DO
p
A notary public or other officer completing this certificate verifies only the identity
of the individual who signed the document to which this certificate is attached, and
not the truthfulness, accuracy, or validity of that document.
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On October 24, 2016 before me, P. L. Esparza, Notary Public, personally
appeared Robin Esitanislau and Jim Katapodis who proved to me on the basis of
satisfactory evidence to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity
upon behalf of which the persons 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.
P.L. ESPARZA
WITNESS my hand and official seal. Commission #2032750
a =-a Notary Public -California i
Z ' Orange County
My Comm. Expires Aug 4,2017
c�
(Seal)
Nota6 Sign, re)
EXHIBIT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN
THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF
MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING
BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN
DEEDS OF RECORD.
Plotted Easements
APN: 165-223-02
EXHIBIT 13
SECTION 3 ACKNOWLEDGEMENTS
16-5414/145020/DO
DEVELOPER/CONTRACTOR HUD SECTION 3
PROJECT COMPLIANCE REQUIREMENTS
Policy
Notwithstanding anything contained in federal law, the Contractor (throughout this checklist,
reference to "Contractor" shall mean prime contractor and shall include "Developer" as
applicable) and its subcontractors shall comply with Section 3 hiring requirements (24 CFR
Part 135) and shall:
1. Contract with Section 3 businesses for a minimum of ten percent (10%) of the total dollar
amount of all building trades work at the subject project site.
2. Hire Section 3 residents for a minimum of thirty percent (30%) of total hours, above
the existing Core Workforce.
Definitions
• Existing Core Workforce: The core workforce is composed of those employees whose
names appeared on the Contractor's active payroll for sixty (60) of the one hundred (100)
working days prior to award of the project to the Contractor; and who possess any license
required by state or federal law for work; and who have the ability to safely perform the
basic functions of the applicable trade.
• Section 3 Coordinator: Representative(s) of the City available to assist the Contractor
and any subcontractor(s) meet the Section 3 goals described above.
• Section 3 Business: A business that is fifty-one percent (51%) or more owned by a
Section 3 resident:or whose permanent, full-time employees include a minimum of thirty
percent (301/o) current Section 3 residents or workers who were Section 3 residents
within three (3)years of the date of their first employment with the business.
• Section 3 Resident: A low-income individual whose household income does not
exceed eighty percent (80%) of the area median income for the Orange County area and
who resides in the City of Huntington Beach or an individual who lives in public
housing. (Attachment A, "HUD Income Liners", provides income guidelines).
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EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS
PAGE 1
Section 3 Business Enterprises — Compliance Requirements
Prior to bid opening, the Section 3 Coordinator will direct Developer/Contractor to do the
following:
1. Advertise subcontracting opportunities in at least one (1) of the newspapers specified as General
Press and at least two (2) of the Community Newspaper outlets and/or Community Notices.
Documentation of these efforts could consist of a tear sheet, proof of publication, or other
verification that confirms the date the advertisement was placed.
The media sources below are available for the advertisement of subcontracting and
employment opportunities. Other known sources may also be used.
General Press—Orange County Register
Community Newspaper - Huntington Beach Wave
Community Notices—Huntington Beach City Hall, Central Library & Community
Centers
2. Provide written notice of such opportunities to all known Section 3 businesses. This
notice shall be nl sufficient tune to allow the Section 3 businesses to respond to the bid
nnvitation.
3. Work with outreach agencies that can assist in the recruiting of Section 3 businesses.
Correspondence to outreach agencies will indicate specific contracting opportuniies for
Section 3 businesses. A list of outreach agencies is below. Other known agencies may be
used.
Huntington Beach Chamber of Commerce
2134 Main Street, #100
Huntington Beach, CA 92648
The Huntington Beach Chamber is pleased to advertise contracting opportunities to their members,
but please provide Notice to the chamber as soon as possible, due to the chambers turn-around time.
4 Follow up on all non-responsive solicitations of Section 3 businesses and provide
additional information about the contracting opportuniy.
OCCHC-7792 BARTON DRIVE
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EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS
PAGE
Prior to bid opening,the Contractor shall do thefollowing:
1. Contract with Section 3 businesses for a minimum of ten percent (10%) of the total
dollar amount of all buildng trades work at the project site. If the Contractor fails to
meet this contracting requirement, the Contractor shall be subject to penalties outlined
in Effects of Noncompliance on page 8. To avoid imposition of such penalties, the
Contractor must demonstrate that it utilized its best efforts to contract with Section 3
businesses for a minimum of ten percent (10%) of the total dollar amount of all building
trades work at the project site. The Contractor may demonstrate best efforts by detailing
all efforts made on a contact log similar to Attachment I and affixing docunnents to the
log that support such efforts (eg., proof of mailing, fax transmittal sheets, e-mails,
etc.). and advertising in local media. The contact log must at a minimum include the
following:
Company called
Contactlinfonmation(telephone or fox number,e-mail address)
Contact person
Time Dote
Results ofthe conversation
The City is committed to working with the Contractor to successfully achieve Section 3
requirements.
2. Obtain from the City a list of known Section 3 and local business enterprises
previously contacted by other applicants and then contractor shall actively contact those
businesses to ascertain whether they are interested in participating on the project team.
Contractors are encouraged to contact other business enterprises that may qualify
as Section 3 business enterprises. All contact with these businesses must be
documented by providing a contact log (Attachment 1) or a list of businesses
contacted via fax, mail or e-mail. If a contact log is used it must include the
information noted in Attachment I. If other lists are used, they should at a minimum
include company name,address,contactperson (if available),date contacted via fax,mail
or e-mail,andresultof contact.
3. Contact the outreach agencies listed on page 4. All contact with these outreach
agencies must be documented by providing a contact log similar to Attachment I or a list
of agencies contacted via fax, mailor e-mail. If other lists are provided, they should at a
minimum include company name, address, contact person (if available), date contacted
via fax, mail or e- mail, and result of contact.
4. Submit to the City a Business Information Form (Attachment J) for each listed
subcontractor. The City will use this form to determine if the subcontractor qualifies as a
Section 3 business enterprise.
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EXHIBIT 13 -SECTION 3 ACKNOWLEDGEMENTS
PAGE 3
Section 3 Workforce — Compliance Requirements
During construction,the Contractor shall do the following:
1. The Contractor shall hire Section 3 residents for a minimum of thirty percent (30%)
of total hours, above the existing Core Workforce. If the Contractor fails to meet this
hiring requirement, the Contractor shall be subject to penalties outlined u1 Effects of
Noncompliance on page 7. To avoid imposition of such penalties, the Contractor must
demonstrate that it utilized its best efforts to hire Section 3 residents for a minimum of
thirty percent (30%) of total hours, above the existing Core Workforce. The
Contractor may demonstrate best efforts by detailing all efforts made on a contact log
similar to Attachment I and affixing documents to the log that support such efforts (e.g.,
proof of mailing, fax transmittal sheets, e-mails, etc.).
2. The Contractor shall submit the following documentation to the City's Section 3 Coordinator
at a date and time to be specified:
• An executed HUD Section 3 Affidavit (Attachment B). This document is to be
submitted with the Prime Contractor's bid. Must be completedby all subcontractors priorto
issuance ofNoticetoProceed.
• An executed HUD Section 3 Compliance Certificate (Attachment Q. This document
is to be submitted with the Contractor's bid and becomes a part of the Contractor's
contract with the City and required for each subcontractor. Must be completed by all
contractors prior to the issuance of Notice to Proceed.
• A list of the Existing Core Workforce for the prime contractor and each listed
subcontractor (Attachment D). Must be submitted prior to the issuance of Notice to
Proceed.
• A Project Employee Survey Form (Attachment E) for each new employee for the
prime contractor and each listed subcontractor. The list shall include the employee's name,
address, occupation, and date of hire. This form will be used to determine if the
employee is or qualifies as a Section 3 resident, or in situations of subcontractors,
whether they qualify as a Section 3 business.
• An Employment Forecast Form (Attachment F) identifying the trades that will be used,
numbers of workers needed, and forecasted number of hours for each trade. This form
must be submitted even if no new hires are anticipated. (This is a mandatory monthly
submittal.)
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EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS
PAGE
In addition to submitting the documentation listed above, during construction of the project,the
Contractor shall do the following:
1. If applicable, work with local unions to request hiring priority for journeymen and
apprentices who are Huntington Beach residents. The Contractor shall provide priority to
Huntington Beach residents for all hiring opportunities so as to ensure that a minimum of thirty
percent (30%) of all new hires are Huntington Beach residents. A sample letter is provided in
these Section 3 documents.
2. Use the Request for Craft Employees Form (Attachment L) or Worker Requisition Form
(Attachment M), as applicable, to notify the local Workforce Development Office, non-
profit entities, and community-based organizations of available employment opportunities at
the project site. As new construction employees are needed by the Contractor or
subcontractor, the following should be followed:
a. Union Contractors: Contractors are required to submit a letter (Attachment
K) and the Request for Craft Employees Form (Attachment L) to their
respective unions notifying them of the Contractor's Section 3 obligations when
requesting workers.
b. Non-Union Contractors: Non-Union contractors are required to use the
Worker Requisition Form (Attachment M) and submit same to the City's
Worlforce Development Bureau when requesting new workers.
3. Post public notices announcing HUD Section 3 Job and Contracting/Business
Opportunities (Attachment H). The Contractor shall postthese notices atthejobsite.
4. With each monthly application for payment, the Contractor shall provide to the Section 3
Coordinator or designee, by the fifteenth (151h) calendar day of thenfollowing month,
Contractor and subcontractor documentation to confirm compliance with Section 3
requirements. These documents shall include, but not be limited to:
a. Certified Payrolls.
b. Monthly Section 3 Hiring Report (Attachment G) for the Contractor and each
subcontractor showing employee name, employer, date hired, occupation, family
size, yearly income, section 3 status, and hours worked on the project to date.
C. Construction Jobs Survey Form (Attachment E) for all new hires.
d. Monthly Forecasting Form (Attachment F).
OCCHC-7792 BARTON DRIVE
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EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS
PAGE 5
5. Submit other such documentation that the City may require to demonstrate the
Contractor's/subcontractor's compliance with Section 3 requirements, such as follow up
contact logs for Section 3 applicant inquiries.
During construction of the project, the Contractor shall provide all required information to the
Section 3 Coordinator or designee who will do the following:
1. Coordinate with the City's workforce development bureau and other community organizations
that provide workforce opportunities and training.
2. Provide to the Contractor all documents and responses from Section 3 applicants for the
purpose of having the Contractor follow up and respond to such inquiries. Such follow-up must
be documented with .a contact log similar to Attachment I or by providing a list of follow-ups
contacted via fax, mail or e-mail. Fax, mailing lists and/or e-mail distributions should
contain the applicant's name, fax number, mailing address or e-mail address, and the date
faxing, mailing or e-mailing occurred.
OCCHC-7792 BARTON DRIVE
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EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS
PAGE 6
Section 3 Workforce and Business Enterprises—Effects of Noncompliance
The City is committed to working with the Contractor to meet the hiring and contracting
requirements. hi this regard, the Contractor shall include the Section 3 Coordinator in all
meetings related to complying with the hiring and subcontracting goals. Failure to meet these
goals or to assist in the documentation of the Contractor's best efforts to meet these goals, shall
result in penalty equal to ten percent (10%) of each subsequent progress payment application
beyond any normal retention until the deficiency is corrected. Upon remediation of the deficiency,
the penalty amount will be released to the Contractor. In the event that the Contractor fails to provide
required documentation regarding both the thirty percent (30%) hiring and ten percent (10%)
subcontracting goals, the maximum penalty that may be assessed is ten percent (10%) of each
subsequent progress pay application.
Note: lithe event a subcontractor fails to furnish the required documentation to the Contractor,
the Contractor shall withhold a penalty equal to ten percent (10%) of each payment application
from that subcontractor. Upon remediation of the deficiency, the Contractor shall release the
penalty amount to the subcontractor. The maximum penalty that may be assessed against a
subcontractor);ten percent (10%) of each subsequent pay application.
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EXHIBIT 13 -SECTION 3 ACKNOWLEDGEMENTS
PAGE
HUD SECTION 3 CONTRACT/BUSINESS OPPORTUNITIES AND WORKFORCE
DEVELOPMENT COMPLIANCE PERSONNEL LIST
CONTRACTING/ BUSINESS EMPLOYMENT OPPORTUNITIES
CONTACT City of Huntington Beach
PHONE 714-536-5582
ADDRESS City Hall
2000 Main Street
Huntington Beach, CA 92648
EMAIL
For additional outreach efforts, please refer to the 'HUD Appendix: to
Part 135' (Attachment N).
I, the undersigned _
(Officer or authorized agent Signature's Title
of company-Print Name)
agree to adhere to the City of Huntington Beach Housing and Urban
Development (HUD) Section 3 Policy and Checklist as stated herein.
Signature Date
OCCHC-7792 BARTON DRIVE
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EXHIBIT 13 -SECTION 3 ACKNOWLEDGEMENTS
PAGE 8
City of Huntington Beach
HUD Section 3 Compliance
Attachments
Table of Contents
Department of Housing and Urban Development Income Limits Attachment A
Affidavit indicating receipt of the City's Section 3 Policy and the HUD Section 3 Attachment B
Compliance Certification
Compliance Certification Attachment C
One Time Submittal
Existing Core Workforce List Attachment D
One"Time Submittal
City of Huntington Beach Project Employee Jobs Survey Attachment E
(Examples in English and Spanish)
City of Huntington Beach Employment Forecast Form Attachment F
City of Huntington Beach Monthly Section 3 Hiring Report Attachment G
Notice of Job and Contracting opportunities Attachment H
(Examples in English and Spanish)
Section 3 Business Telephone Log Attaclunent I
Section 3 Outreach Agency Log
Section 3 Business h-itormation Form Attaclunent J
(Examples in English and Spanish) One Time Submittal
Section 3 Sample Letter to Union(Union Contractors) Attachment K
One Time Submittal
Section 3 Craft Request Fonn(Union Contractors) Attachment L
Section 3 Worker Request Form(Non-Union Contractors) Attachment M
HUD Appendix to Section 135 Attachment N
Department of Housing and Urban
Development(HUD) Income Limits
Listed below are the current income limits that the City of Huntington Beach and its
representatives will use to determine whether an individual or company meets the federal
definition of "Section 3" eligibility. If you do not qualify based on your current income and
family size, but you meet the requirements based on your income and family size within the
last three years, you still qualify.
All income amounts are subject to adjustment by the City in accordance with
HUD guidelines.
2016
Family
Size Income Criteria 80% of Median
1 54,600
2 62,400
3 70,200
4 78,000
5 84,250
6 90,500
7 96,750
8 103,000
Attachinent A
CITY OF I-K NIINGTONBEACI-I
HUD SECTION 3 AFFIDAVIT
Must be completed by the prime contractor and submitted with bid docurnerts.
Must be completed and submitted by can subcoirtractors prior issuance of Notice
to Proceed.
IMPORTANT NOTE: YOUR SIGNATURE BELOW INDICATES THAT YOU
RECEIVED A COPY OF THE CITY'S SECTION 3 POLICY AND REQUIREMENTS
AND THE HUD SECTION 3 COMPLIANCE CERTIFICATION (ATIACHMENT C)
AND COMPLIANCE REQUIREMENTS STATED THEREIN.
I, THE UNDERSIGNED
Officer of Authorized Signature
Agent of Company
(Print Nasne)
Signature
PROJECT NAME:
COMPANY NAME:
ADDRESS:
TELEPHONE NUMBER:
E-MAIL ADDRESS:
DATE:
Attachment B
HUD SECTION 3 COMPLIANCE CERTIFICATION
Must be signed by prime contractor and all subcontractors prior to issuance of notice to proceed
The contract For this work will include the following clause (referred to as the HUD Section 3 clause}:
A. The work to be performed under this contract is subject to the regiaements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu (Section 3}. The purpose
of Section 3 is to ensure that employment and other economic opportunities generated by HUD
assistance or IIUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be
directed to low- and very low Income persons, particularly persons who are recipients of HUD
assistance for housing. Consistent with 24 CFR §135.72(b}, the City of Huntington Beach shall refrain
from entering nzto a contract with any contractor after notification is received from HUD that the
contractor has been found in violation of the Section 3 regulations. The City will also review past
performance of contractors on Section 3 projects in determirnlg contract awards. It is mandatory that all
contractors seeking to be awarded a City of Huntington Beach Section 3 covered project attend the pre-
bid conference.
B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135, which
implement Section 3. As evidenced by their execution of this contract, the parties to this contract
certify that they are snider no contractual or other impediment that would prevent them from complying
with the part D5 regulations.
C. The contractor agrees to send to each labor organization or representative of workers with which the
contractor has a collective bargainn7g agreement or other understanding, if any, a notice advisii-w- the
labor organization or workers' representative of the contractor's commitments under this Section 3
clause, and will post copies of the noticein conspicuous places at the work site where both employees and
applicants for training and employment positions can see the notice. The notice shall describe the Section
3 preference, shall set forth mininurn number and job titles subject to hire, availability of apprenticeship
and training positions, the qualifications for each; and the name and location of the person(s) taking
applications for each of the positions; and the anticipated date the work shall begin.
D. The contractor agrees iriclude this Section 3 clause in every subcontract subject to
compliance with regulations i« 24 CFR part 13 5,and agrees to take appropriate action, as provided in
an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the
subcontractor is In violation of the regdations in 24 CFR part 135.The contractor will not subcontract
with any subcontractor where the contractor has notice or knowledge that the subcontractor has been
found in violation of the regulations in 24 C.FR part 135.
E. The contractor will certify that any vacant employment positions, including training positions, that
are filled (1) after the contactor is selected but before the contract is executed, and (2) with persons
other than those whom the regulations of 24 CFR part 135 require employment opportunities to be
directed, were not tilled to circumvent the contractor's obligations under 24 CFR part D5.
F. The contractor understands that non-compliance and willful violation of HUD's regulations in 24
CFR part 135 with respect to Section 3 and related regulations by itself, its sub-contractors and or lower
tier contractors will result in corrective measures taken by the City of Huntington Beach to achieve
compliance; including suspension or withholding of contractor payments.
G. With respect to work performed in connection with Section 3 covered Indian housing assistance,
Section 7 (b) of the Indian Self Determination and Education Assistance Act (25 U.S.C. 450e) also
applies to the work to be performed under this contract. Section 7 (b) requires that to the greatest
extent feasible (1) preference and opportunities for trairmlg and employment subcontracts shall be
given to Indians, and {ii) preferencein the award of contracts and subcontracts shall be given to Indian
organizations and Indian-owned Economic Enterprises. Parties o this contract that are subject to the
provisions of Section 3 and Section 7 (b) agree to the comply with Section 3 to the maximum extent
feasible,but notilderogation of compliance with Section 7(b)
I, THE:LJNDEP,SI«M, ON BEI IAT_F OF THE CONPANY I-IERMY CERTIFY THAT
I HAVE RECEIVED, READ AND DO UNDERSTAND TIIE CONTENTS OF THE
ABOVE STATED "SECTION ')" CLAUSE.
PROJECT:
SIGNATURE PRINT NAME DATE
TITLE LE ,'OFFICER OR A UTMORIZED AGENT) COMPANY NAME
ADDRESS CITY STATE ZIP CODE
Attacli vent C
City of Huntington Beach
Existing Core Workforce List
Must be completed and submitted by prune contractor and all subcontractors prior to ai-Issuance of
Notice to Proceed
FIRM NAME:
PROJECT: CONTRACT NO.
SUBMITTED BY: TELEPIIONE NO.
The following is a Est of"Core Employees. I'heseemployees,in accordance withthe definition ofan
Existing Core Workforce;have been on the active payroll for fifty(50)out of the last one hundred
(100)working days prior to the award. The Contractor and subcontractor, at any tier, must
submit this form prior to commencing work on the project.
The Contractor and subcontractor(s) shall provide to the Section 3 Coordinator or designee
proof of their"Core Workforce" upon request.Alternative worksheets may be submitted
only if the same information shown belows contained.
Name SSN (last 4 Classification Hire Date Last Zip Verified (office
digits only) Date Employed Code use only)
Certification:
I CERTIFY THAT THE INFORMATION CONTAINED HEREON IS TRUE AND CORRECT. IF IT IS
DETERMINED THAT THE INFORMATION REPORTED HEREONIS NOT TRUE AND CORRECT, I
WILL NOT BE ALLOWED TO DO WORK (BEGIN, FINISH, COMPLETE) FOR THE CITY OF
HUNTINGTON BEACH
SUBMIT TO: City of Huntington Beach
Office of Business Development
2000 Main Street
Huntington Beach, CA 92648
714-374-1519
Signature: Date:
Title:
Attaclunent D
CITY OF HUNTINGTON BEACH
PROJECT EMPLOYEE SURVEY
To be completed by all new hires (including office personnel) Form to be submitted with certified
payrolls every time an employee is hired (This form is mandatory and must be completed by the prime
contractor and all subcontractors as required.)
COMPANY NAME:
PROJECT:
NAME:
ADDRESS:
CITY:
TELEPHONE:
Number of people living with you in your home:
For the last three years, please give an estimate
Of your gross annual income before
Being employed at this construction project: (fill in lines below)
Current Year Annual Income:
Last Year Annual Income:
Two (2) Years Ago Income:
OR a Public Housing Resident or Received Section 8 Assistance Yes No
(Circle One)
Signature: Date:
SUBMIT TO: City of Huntington Beach
Office of Business Development
2000 Main Street
Huntington Beach, CA 92648
714-374-1519
Attachment E
CITY OF HUNTINGTON BEACH
EMPLOYMENT FORECAST FORM
To ensure efforts are made to reach the City, of I-Huntington Beach's numerical goals for job
placement of local low-income individuals, the prime contractor and all subcontractors shall
provide the following employrnent.forecasts for thisproject on a monthly basis (this document must
be submitted with the certified payrolls). This is a mandatory monthly submittal.
COMPANY NAME: DATE
PROJECT:
Project Start Date: Project End Date
Total Forecasted Work Hours for Entire Project:
Total Forecasted Workforce Size:
TRADE NUMBER OF EMPLOYEES NEEDED FORECASTED WORK HOURS BY
TO COMPLETE TASK TRADE
Attachment F
CITY OF HUNTINGTON BEACH
EMPLOYMENT SECTION 3 WORKFORCE
MONTHLY HIRING REPORT
To ensw-e efforts are made to reach the City of Huntington Beach's nznnerical Goals_for job
placement of local loi-v-income individuals, the prime contractor and all szibcontractors shall
provide the following employment iqformation.for this project on a 7nonthly basis (this is a
mandatory monthly submittal for by all contractors prune and subcontractors) and must be submitted
with certiTed pa}rolls.
PROJECT:
COMPANY NAME: DATE
Reported By (circle one): Prime Contractor Subcontractor
Monthly Reportingr Period:
Name of New Hire Hire Date Occupation
Attachment G
NOTICE OF HUD SECTION 3
JOB AND CONTRACTING
OPPORTI.TNITIES
HUNTINGTON BEACH RESIDENTS MAY QUALIFY FOR
EMPLOYMENT AND CONTRACTING OPPORTUNITIES ON
THIS FEDERALLY FUNDED CONSTRUCTION PROJECT.
LOW-INCOME AND VERY LOW-INCOME RESIDENTS AND
BUSINESSES WILL RECEIVE HIRING PREFERENCE.
INTERESTED HUNTINGTON BEACH RESIDENTS AND
BUSINESSES SHOULD CONTACT THE DESIGNATED
PERSON BELOW TO DETERMINE THEIR. ELIGIBILITY FOR
CURRENT AVAILABLE POSITIONS, POSSIBLE FUTURE
POSITIONS OR OTHER EMPLOYMENT AND CONTRACTING
INFORMATION.
CONTRACTING/ BUSINESS EMPLOY1\4ENT OPPORTUNITIES
CONTACT
PHONE
ADDRESS City Hall
2000 Main Street
Huntington Beach, CA 92648
EMAIL
Attachment H
AVISO DE OPORTUNIDADES DE
TRABAJO Y CONTRATOS
Los RESIDENTES y NEGOCIOS DE HUNTINGTON BEACH
PUEDEN CALIFICAR PARA OPORTUNIDADES DE EMPLEO
POR PARTE DEL PROGRAMA DE CONSTRUCCION
FUNDADO POR EL GOBIERNO FEDERAL. RESIDENTES DE
BAJOS INGRESOS RECIBIRAN PREFERENCIA PARA
TRABAJOS Y CONTRACTOS.
RESIDENTES Y NEGOCIOS DE HUNTINGTON BEACH
INTERESADOS, FAVOR DE PONERSE EN CONTACTO CON
LA PERSONA DESIGNADA AL FONDO DE ESTA OJA, PARR
DETERMINAR SU ELEGIBILIDAD PARA POSICIONES
DISPONIBLES, FUTURAS POSICIONES POSIBLES Y OTRA
INFORMACION DE EMPLEO.
CONTRACTING/ BUSINESS EMPLOYMENT OPPORTUNITIES
CONTACT
PHONE
ADDRESS City Hall
2000 Main Street
Huntington Beach, CA 92648
EMAIL
Attachment I
Section 3 Business Contact Log for documenting
contact with: Section 3 & Local Businesses
PROJECT:
COMPANY NAME:
This form must be submitted with the prime contractor's bid documents. This form must also be
maintained during the entire period of construction for any contact with businesses.
Date/Time Company Mode of Contact Contact Results of
Contact Info Person
Conversation
Example: Example: Example: Example: Example: Example:
1/12/16 ABC Fax Fax: (xxx) John Doe, Fax was sent to John Doe
2:00 pm Contracting xxx-xxxx Owner contractor asking for their
participation. John Doe
called us and we inquired
about their product
experience. John Doe sent
me a listing of their
completed projects. This
contractor thinks they may
qualify as a Section 3
business.
We will include then as
part of our proposed team
Attachment I
Section 3 Business Contact Log for documenting
contact with: Outreach Agencies
PROJECT:
COMPANY NAME:
This form must be submitted with the prime contractor's bid documents. This form must also be
maintained during the entire period of construction for any contact with businesses.
Date/Time Company Mode of Contact Contact Results of
Contact Info Person
Conversation
Example: Example: Example: Example: Example: Example:
1/12/16 ABC Fax Fax: (xxx) Johi1 Doe, Fax was sent to John Doe
2:00 pm Contracting xxx-xxxx Owner contractor asking for their
participation. John Doe
called us and we inquired
about their product
experience. John Doe sent
me a listing of their
completed projects. This
contractor thinks they may
qualify as a Section 3
business.
We will include then as
part of our proposed team
Attachment I
THE CITY OF HUNTINGTON BEACH
HUD SECTION 3 BUSINESS INFORMATION FORM
Must be submitted with bid documents. To be completed by the prime contractor and all subcontractors.
If not available with bid documents, this form must be received by the City of 10:00 am of the next
working day.
The sole purpose ofthis form is to calculate the nznnber of Section 3 business enterprises iworking on
construction project. Please print or type.
COMPANY NAME:
ADDRESS:
CITY/STATE/ZIP CODE:
TELEPHONE:
F
FORM COMPLETED BY:
SERVICE OR PRODUCT:
Is 51% or more of your business owned by Section 3 Residents? Yes No
(circle one)
Is at least 30% of your workforce (full Time, Permanent Staff) made up of Section 3 residents or were
they Section 3 residents within 3 year of their first date of employment? Yes No
(circle one)
Signature: Date:
SUBMIT TO: City of Huntington Beach
Office of Business Development
2000 Main Street
Huntington Beach, CA 92648
714-374-1519
Attachment J
CITY OF HUNTINGTON BEACH
SAMPLE SECTION 3 LETTER TO UNION
Must be completed by the prime contractor-and subcontractor prior to ssuance
of Notice to Proceed.
Contractor Information Address
City, State, Zip Telephone,Fax
California License#
Date
Union Hall Address
City, State, Zip
Subject: Project Site-
Dear:
(Name of Contractor), is a subcontractor or contractor on the (Name of Project). This construction
project falls under the United States Department of Housing and Urban Development (HUD) Section
3 regulations for the City of Huntington Beach.
The Section 3 regulation compliance requires that contactors to the greatest extent feasible hire low-
income residents of Huntington Beach and Signal Hill for the project. We are asking for your
cooperation in using your best of fog is r- �ilsnatch v orkers from your union that reside.in Huntington
Beach and Signal Hill.
Please keep this letter on file. When we request that workers are dispatcheu to a nob, vac would
appreciate your assistance in helping our company and the City of Huntington Beach meet the
Section 3 local hiring requirements.
Sincerely,
(Person Name)
Attachment K
OR UNION CONTRACTORS USE
CITY OF HUN"TINGTON BEACH
WORKER REQUEST FORM FOR UNION CONTRACTORS
Toth Contractor:
Please complete and fax this form to the applicable union to request craft workers that fulfill all hiring requirements for this
project. A duplicate fax request is to be sent to the Office of Business Development, attention Kellee Fritzal, Deputy Director
or by email at kfi-itzal(a)surfcity-hb.org. After faxing your request, please call the Local to verify receipt and substantiate their
capacity to furnish workers as specified below. Please print vour Fax Transmission Verification Reports and keep copies for your
records.
To the Union:
Please complete the"Union Use Only" section and fax this form back to the requesting Contractor. Please retain a copy of this
form for your records and send a copy to the City of Huntington Beach Office of Business Development at 714-374-1519.
To: Local# Fax#( ) Date:
cc:
From: Company: Person Sending:
Contact Phone: Contact F a x
Please provide me with union craft workers. The City of Huntington Beach requires that 36% of project
apprentice and journey-level hours be performed by residents of the cities of Huntington Beach to the extent
feasible.
92646 92647 92648 92649
• I" Priority: Section 3 Local Requirement- Union craft employees, including apprentices, who reside in one of the
local zip codes listed above, fill2 are determined be Section 3 eligible (80% of median income or less) should be
dispatched first.The W orkforce Investment Board can assist in determi ning Section 3 eligibility.
• 2"1 Priority: Local Requirement - Ifinsufficient union craft employees, including apprentices,who live in one of the
zip codes listed above and are Section 3 eligible exist,other Huntington Beach and Signal Hill residents may fulfill hours
to meet the requirements
• General Dispatch - Union craft employees may be dispatched per nonnal dispatch procedures, notwithstanding the above
Section 3 and local preferences.
Craft Employees Requested
Journeyman or
Job/Craft Description Apprenticeship Number Requested Report Report
bvel Date Time
Total Workers Requested
Please have worker(s) report to the following work address indicated below:
Project& Site Address: Report to (on-site contact)
On-site Tel # Fax: Comments or special requirements:
Union Use Only
(Please check boxes as appropriate
Reception Date: Dispatch Date: Received By:
Requested Dispatch Available for Dispatch Unavailable for Dispatch Comments
Section 3 and Local
Local Only
General Dispatch
Attachment I,
OR NON-UNION CONTRACTORS
CITY OF HUNTINGTON BEACH
WORKER REQUEST FORM
Company Information
Phone: Fax: e-mail
Name:
Contact
Person: Title:
Address:
Construction Type: Years in Business No. of employees:
Benefits: None [ ] Med. [ ] Dental [ ] Vision [ ] Retirement [ ] Effective:
Other:
Position Title: Position Reports:
Location of Position (Project Site Name): Expected Start Date:
Total Openings Project Name & Location:
SHIFT: M[ ] T[ ] W[ ] Th[ ] F[ ] S[ ] S[ ] Day[ ] Swing[ ] Night[ ] Flex[ ]
Salary: /hr. mo., annual Salary Commission Hours to
Type of Position: Perm [ ] Temp [ ] F/T [ ] P/T [ ] Seasonal [ ]
Required Skills: Experience, education:
Job Description:
Referral Procedure: Please check Refer/Pre-Screen from CFWF [ ] Fax Resume [ ]
Mail Resume [ ] E-mail [ ] Apply in person [ ] Call for appt. [ ]
Is your Company in the Enterprise Zone: Yes [ ] No [ ]
Refer to EDD CalJobs Yes [ ] No [ ] If yes,
Company CA Tax ID
Attachment M
UD APPENDIX TO PART 135
I.Examples of Efforts To Offer Training and Employment Opportunities to Section 3
Residents.
(1) and(2) Intentionally Omitted
(3) Establishing training programs, which are consistent with the requirements of the
Department of Labor, for public and Indian housing residents and other section 3 residents
inthe building trades.
(4) Advertising the training and employment positions by distributing flyers (which
identify the positions to be filled, the qualifications required, and where to obtain
additional information about the application process) to every occupied dwelling unit ill
the housing development or developments where category 1 or category 2 persons (as these
tenns are defined in Sec. 135.34) reside.
5) Advertising the training and employment positions by posting flyers (which identify
the positions to be filled, the qualifications required, and where to obtain additional
information about the application process) in the common areas or other prominent areas of
the housing development or developments. For HAs, post such advertising in he housing
development or developments where category 1 or category 2 persons reside; for all
other recipients, post such advertising in the housing development or developments and
transitional housing in the neighborhood or service area of the section 3 covered project.
(6) Contacting resident councils, resident management corporations, or other resident
organizations, where they exist, in the housing development or developments where
category 1 or category 2 persons reside, and community organizations in HUD-assisted
neighborhoods, to request the assistance of these organizations in notifying residents of
the training and employment positions to be filled.
(7) Sponsoring (scheduling, advertising, financing or providing in-kind services) a job
infonnational meeting to be conducted by an HA or contractor representative or
representatives at a location in the housing development or developments where category
1 or category 2 persons reside or in the neighborhood or service area of the section 3
covered project.
(8) Arranging assistance in conducting job interviews and completing job applications
for residents of the housing development or developments where category 1 or
category 2 persons reside and in the neighborhood or service area in which a section 3
project is located.
Attachment N
(9) Arranging for a location u1 the housing development or developments where
category 1 persons reside, or the neighborhood or service area of the project, where
job yapplications may be delivered to and collected by a recipient or contractor
representative or representatives.
(10) and(11) Intentionally Omitted
(12) Consulting with State and local agencies administering training programs
funded through JTPA, probation and parole agencies, unemployment compensation
programs, community organizations and other officials or organizations to assist with
recruiting Section 3 residents for the HA's or contractor's training and employment
positions.
(13) hitentionally Omitted
(14) Employing a job coordinator, or contracting with a business concern that is
licensed in the field of job placement (preferably one of the section 3 business
concerns identified in part 135), that will undertake, on behalf of the HA, other
recipient or contractor, the efforts to match eligible and qualified section 3 residents with
the training and employment positions that the HA or contractor nztends to fill.
(15) Intentionally Omitted
(16) Where there are more qualified section 3 residents than there are positions to be
filled, maintaining a file of eligible qualified section 3 residents for future
employment positions.
(17)-(20)Intentionally Omitted
11. Examples of Efforts To Award Contracts to Section 3 Business Concerns.
(1)-(8)Intentionally Omitted
(9) Carrying out workshops on contracting procedures and specific contract
opportunities in a timely manner so that section 3 business concerns can take
advantage of upcoming contracting opportunities, with such infonnation being made
available izl languages other than English where appropriate.
(10) Intentionally Omitted
(11) Arranging solicitations, times for the presentation of bids, quantities,
specifications, and delivery schedules in ways to facilitate the participation of section
3 business concerns.
(12) Where appropriate, breaking out contract work items into economically feasible
units to facilitate participation by section 3 business concerns.
Res. No. 2016-70
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, ROBIN ESTANISLAU the duly appointed, qualified City Clerk
of the City of Huntington Beach, and ex-officio Clerk of the City Council of said
City, do hereby certify that the whole number of members of the City Council of
the City of Huntington Beach is seven; that the foregoing resolution was passed
and adopted by the affirmative vote of at least a majority of all the members of
said City Council at a Regular meeting thereof held on October 17, 2016 by the
following vote:
AYES: Posey, O'Connell, Katapodis, Hardy, Delgleize
NOES: Sullivan, Peterson
ABSENT: None
RECUSE: None
City Clerk and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California