HomeMy WebLinkAboutORANGE COUNTY COMMUNITY HOUSING CORPORATION (OCCHC) - 2000-12-18 i •
Council/Agency Meeting Held:
Deferred/Continued to:
XA p ve ❑ Conditionally Appr ved ❑ Denied Qle s Signature
Council Meeting Date: 12/18/00 Department ID Number: ED 00-48
CITY OF HUNTINGTON BEACH �T
REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTI&N <
T.
SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL
MEMBERS/REDEVELOPMENT AGENCY MEMBERS -
SUBMITTED BY: RAY SILVER, City Administrator/Executive Director6w
PREPARED BY: DAVID C. BIGGS, Director of Economic Development W
SUBJECT: Approve An Owner Participation Loan Agreement With Orange
County Community Housing Corporation (OCCHC)�ES_ W 3/7,
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment{si
Statement of Issue: An Owner Participation Agreement (OPA) between the Agency and
Orange County Community Housing Corporation (OCCHC) is submitted for approval. This
agreement provides for a loan in an amount of $285,000 of Agency Housing Set Aside and
HOME Investment Partnership Program funds for the acquisition of 17412 Koledo Lane. In
addition, an Agency resolution is submitted for adoption. This resolution would allow the
Agency to substitute bond proceeds as the source of financing for the project, at some point
in the future, should it become feasible.
Funding Source: Agency Housing Set Aside Funds, Account Number 30680301.82800
and Federal HOME Investment Partnership Program Funds, Account Number
84780401.82200 for $285,000.
Recommended Action:
City Council Action:
1. Temporarily waive the City's insurance requirements for purposes of approving the
Agency loan. Direct staff to ensure that insurance requirements as described in the
Owner Participation Agreement are met by OCCHC by the close of escrow_
Redevelopment Agency Actions:
1- Approve an Owner Participation Agreement with Orange County Community Housing
Corporation (OCCHC) for $285,000 using Agency Housing Set Aside and HOME
Investment Partnership Program funds for the acquisition and rehabilitation of 17412
Koledo Lane.
2. Authorize execution and recordation of the OPA and all attachments by the Agency
Chairman and Clerk, when advised by the Agency General Counsel's Office.
t
REQUEST FOR9UNCILIREDEVELOPMENTRENCY ACTION
MEETING DATE: 12/18/00 DEPARTMENT ID NUMBER: ED 00-48
3. Authorize the wire transfer of Agency funds in the amount of$285,000 to First American
Title Company to effect the closing of the acquisition escrow (Escrow Number
2052889M).
4. Adopt Resolution Number 7 A resolution of the Redevelopment Agency of
the City of Huntington Beach Declaring Intention to Reimburse Expenditures from the
Proceeds of Tax-Exempt Obligations and Directing Certain Actions
Alternative Action(s): Do not approve the proposed transaction, or direct staff to
renegotiate the deal terms with OCCHC.
Analysis: Orange County Community Housing Corporation (OCCHC) is the oldest and
largest affordable housing developer in Orange County. With a current inventory of 40
properties throughout Orange County, OCCHC owns and manages 285 units, all for very
low-income residents. OCCHC additionally developed a transitional housing facility for
homeless families and a lease-to-own program for very low-income homebuyers.
OCCHC is one of a few nonprofit housing developers that owns and manages its own
properties and takes pride in working in troubled neighborhoods. The nonprofit typically
leverages local, state, federal, and private funds to acquire and rehabilitate housing for very
low-income large families and to provide those families with educational and job training
resources. Recently, OCCHC created a resident education program, which includes staffed
learning centers and a scholarship fund. In its mission, OCCHC affirms its belief that the
foundation of our neighborhood, community, city, state, and nation begins with the family.
OCCHC owns and manages twelve properties in the Oakview neighborhood, providing
affordable housing to 54 very low-income families. Eight of these properties are in the
Koledo Park area. OCCHC has an additional Koledo Lane five-plex in escrow at a
reasonable price given current market conditions (the total purchase price is $350,000).
Staff and OCCHC have negotiated deal points (See Attachment No. 2), which include the
following terms:
1. The Redevelopment Agency will provide $285,000 in HOME Investment
Partnership Program funds and Redevelopment Agency Housing Set Aside
funds as a loan to OCCHC. The Agency's loan funds will be used to acquire a
multifamily rental-housing properties located at 17412 Koledo Lane in the
Oakview Neighborhood as follows:
2. There will be an annual 6% interest charge applied to the outstanding loan
balance during the term of the loan agreement.
3. For a period not less than 60 years, all 5 units in the property will be subject to
tenant household income and rent affordability restrictions as provided in the
following schedule:
RCA 17412 Koledo Lane -2- 12/12100 10:57 AM
REQUEST FORfOUNCILIREDEVELOPMENTItENCY ACTION
MEETING DATE: 12/18/00 DEPARTMENT ID NUMBER: ED 00-48
No. of Bedroom Maximum Tenant
Units Size Income Maximum Rent
1 2 BR Very Low-Income 30% of the tenant's monthly adjusted
income
30% X 50% of the monthly income
4 2 BR Very Low-Income of the Orange County 3 person
household median income
4. The maximum number of persons in a household that may occupy a single
residential unit may not exceed five people in a two-bedroom unit. It will be the
responsibility of OCCHC to enforce this occupancy limit.
5. OCCHC will obtain conventional lender financing in an amount not to exceed
$150,000, which together with the $285,000 Agency's loan and $15,000 equity
investment by OCCHC will be used for properly acquisition and rehabilitation.
6. OCCHC will rehabilitate the property into full compliance with HUD Housing
Quality Standards along with City and State laws and codes. After rehabilitation
is completed, OCCHC will maintain the properties in compliance with these
standards.
7. At the beginning of the third year of the loan agreement, and continuing for the
duration of the agreement, OCCHC will make annual payments to the Agency.
Such payments will be the lesser of: (a) fifty percent (50%) of the project's end-
of-year cash balance or (b) $1,200. After the 60th year of the loan agreement,
should OCCHC elect to terminate the project's income and affordability
restrictions, all remaining unpaid principal and interested on the Agency's loan
will be due; however, the unpaid balance of the loan will not require repayment
and will not accrue further interest charges for whatever period OCCHC
maintains the income and affordability restrictions on the properties.
8. The Agency will have a first right of refusal to purchase the property should
OCCHC choose to sell the property. Should the Agency elect not to exercise this
option, it will have the right to approve any buyer of the property.
9. Should OCCHC default on any of the terms of its loan agreement, the full loan
amount including all interest will become immediately due. The Agency will have
the right to take over ownership and management of the property in the event
OCCHC is unable to cure a default.
This residential acquisition and rehabilitation project is an opportunity for the Agency to
improve and indefinitely preserve five units of existing affordable housing. This project will
further enhance the quality of life in the Oakview neighborhood through partnerships
RCA 17412 Koledo Lane -3- 12112/00 10:57 AM
REQUEST FORfOUNCIUREDEVELOPMENT%ENCY ACTION
MEETING DATE: 12/18/00 DEPARTMENT ID NUMBER: ED 00-48
between the Agency and affordable housing nonprofit developers such as OCCHC that are
committed to the Agency's goals of improving the quality of housing for very low-income
residents, keeping rents affordable, eliminating overcrowding, and building livable
neighborhoods.
The Agency has partnered with four nonprofits over the past six years to provide a total of
208 units of high-quality, affordable housing in the Oakview neighborhood. When this project
is completed, five additional units will be available to very low-income households.
Included in this request with the loan agreement between the Agency and OCCHC is an
Agency resolution regarding bond financing. This resolution will allow the Agency to, at
some point in the future, consider issuing multifamily housing revenue bonds as a funding
source for affordable housing projects thereby freeing other funds for additional affordable
housing projects.
The deal points for this project were to be reviewed by the Council's Economic
Development Committee on November 14, 2000. Because of a lack of quorum at this
meeting, the project was not reviewed. The Council is requested to approve the project at
this time because OCCHC's acquisition escrow will expire on December 29, 2000. The
deal points for the project are substantially the same as prior OCCHC transactions with
the Agency and have been reviewed by the Agency's economic consultant Keyser Marson
Associates Inc. The attached Agency resolution was prepared by the City Attorney's
Office for submission together with the OCCHC loan agreement. These documents are
attached for your review.
Environmental Status: Categorically excluded under the National Environmental Protection
Act (NEPA). Categorically exempt under the California Environmental Quality Act (CEQA),
Section 15061(b)(3).
AttachnnentU:
City Clerk's
Page Number No. Description
1. Owner Participation Agreement (Includes Site Map as Exhibit B)
2. Project Deal Points
3. Agency Resolution Number 31 7 Declanng Intention to
Reimburse Expenditures
RCA Author: HOLTZ(5901)
RCA 17412 Koledo Lane -4- 12112/00 10:57 AM
Owner Participation Agreement between the
Redevelopment Agency and
Orange County Community Housing Corp. (OCCHC)
'DO
RANGE COUNTY
COMMUNITY HOUSING CORPORATION
Orange County Counnuaity Housing Corporation
-Resolution.'tArt
TO BUY, SELL PROPER'LY',MORTGAGE SAME
AND AUTHORIZE CORPORATE SIGNER
I, Robert A Johnson,Secretary.hemb;.a iharLins the dal clec lilt •.uali tf edSeeaecuy,of Orange C
Y; lr , Y: y cf g County Community Housing
Corporation, a California nonprofit, public benefit, corporatloa-dwy.orgamzed and existing wider the laws of the State of California(her-_irufter
'OCCHC'): that the following is a true copy of certain resolutions duly adopted by the Board of Directors.of OCCHC at a meeting dirty called,
noticed and held on January 20. 2000_ At which meeting a quoitmn was present and acting throughout: that such resolutions have been duty
recorded in the mimites of the Board of Directors of OCCHC;bylaws and other instxumem s biridintg or affec_tulg OCCHC.and that such resolutions
have not been revoked,rescinded or modified,and are now in full force and effect in the following forth:
RESOLVED THAT OCCIiC purchiie the"property knowti.zs I7401 arid 17432.Koledo Lane, IIrmtiugton Beach, Caldor>da, and
execute,all appropriate documents therewith including those documents in accord with respective escrow instructions.
RESOLVED THAT:• the Execuave Dfrecwr_Allea_P. Baldwvr. be and.he is hereby authorized, empowered, and directed for and on
behalf of and under the corporate seal of OCCHC and as its corporate act and deed, from time to time,-0i to borrow from lender such sums of
money u.in the judgement of designee.OCCHC may require on such terms and cordiaorxs as shalt be regirired by lender,and to sign acid deliver
such promissory nodes and other evidences'of indebtedness-for such morr_y borrowed or advanced as tender_shali require, tvc desigrxe bcmg also
audtionzcd to direct orally or in writing the disposition of ft proceeds of any such obligation,and to accept or.direct delivery from escrow of any
such proceeds or other property of OCCHC at any time held by lender; (2),to contract with leodet for the issuance by lender of letters of credit and
for other financial accommodations as shall in the discretion of the designee be required for OCC 4C repaymieni to lender,as lender shall r--quest;(3)
to ecr_r into agreements for the leasing and/or purchase of property by OCCHC from lerder,Yor, such-sterns and upon such terms as may be
ad"sable in the sole judgement of the designee; (4)to grant security interests in. mortgage, erittimbcr, pletfge,convey, grant, hypothecate,deed in
trust,assign, sell, transfer, and deliver to lender by sucb instruments in writing or otherwise as may be requited by leader, any of the property of
OCCHC (whether real, personal or mixed), to secure the payment of promissory_notes• guarantees, agreements. and any other evidences or
incebcdoess and other obligations of OCCHC entered into pursuant to these resolutions, and for all instnim sso
enu, promiry Dotes. guai=es,
agreements. and any other evidences of indebtedness and other obligations of OCCHC, and all renewals and/or extensions d:errof, may be in such
forms and contain such provisions, covenants, recitals, and agreements as lender may inquire and the designee may approve, and die execution
thereof by the designee shall be conclusive eviderre of such approval; (5).to negotiate, endorse;-and sell to, or to discount with escrow, Dotes,
acceptarces,bills of exchange,receivables and other uistmmerirs and evidences of indebtedness payable to,or otherwise held or owned by OCCHC,
upon such terms as may be agreed upon by the designee and lender. and to endorse and deliver to lender said notes, acceptances, bills of exchange,
receivables and other instruments and evidences of indebtedness so negotiated,endorsed, sold,or'dixounred,aid to guarantee the payment of the
same to lender; (6)to renew and/or extend, in whole or in part, any promissory Dotes,guarantees,agreements,odicr evidences of indebtedness and
other obligations of OCCHC which are in these resolutions referred to, and to execute aid deliver-tt escrow such renewals and/or exrnnons
acc,ordingly;and(7)to perform all acts and execute and deliver all instrwnenes in wrttirlg which lender may deem oecessary to carry out the purpose
of these resolutions including property tax forms;
RESOLVED FURTHER:That a certified copy of these resolutions, certified by the Secretary of OCCHC be delivered to lender, and
that these resolutions shall continue in full force and effect until written notice of their revocation by(together with certified copy of)a mohrtion
legally adopted by the Board of Directors of OCCHC shall have beta actually received from OCCHC by lender at its office designated on any
ceinfied copy of these resolutions submitted to leader or otbetwise designated by leader,and until all irdebredmess and obligations which may have
been incurred as aforesaid shall have been fully paid,satisfied.and dischanged.-and nio such revocation,nor any receipt of any notice tbereof,shall in
any trainer whatever affect any indebtedness or obligation which(pnor to actual_receipt of the notice and resolution of revocation by lender its the
marxcr aforesaid)may have been incurred as aforesaid)may have been incurred as aforesaid.
IN WrrNTM WHEREOF,i have hereunto set my hared and of rited the-.corporate seal of OCCHC,
this N& day of� l .2000.
corporate seal
Jz
obert A.Johnson,Secre • f
Orange County Comae ousing Corporation
DESIGNEE: Allen P.Baldwin,Executive Director
C -
(1MYD0(\W0RD\Re5olution Kdoc list printed 1120/00 10.09 AM
1833 East 17th Street,Swat:207,Santa Ana,CA 92705-8629 ❖(714)558-8161 Fax(714)558-0423 email. occhc a'earthluk.nr
OWNER PARTICIPATION AGREENIENT
By and Between
REDEVELOPMENT AGENCV OF THE CITY OF HUNTINGTON
BEACH,
a public body, corporate and politic
and
ORANGE COUNTV COMMUNITV HOL;SING CORPORATION,
a California nonprofit corporation
(17412 Koledo Lane)
"TABI.E OF CONTENTS
Page
SECTION 1_ DEFINITIONS 1
SECTION 2. SUBJECT OE THIS AGREEMENT 5
2.1 Purpose of the Agreement 5
2.2 The Redevelopment Plan 5
2.3 Participant 5
2.4 Term of Agreement 5
2.5 Prohibition Against Transfers; Rights of First Refusal 6
SEC"T1ON 3. FINANCING AND ACQIJISI.1-I0N OF THE SITE 7
3.1 Ownership of the Site 7
3.2 Agency financial Assistance 8
3.3 Form of Agency Financial Assistance; 8
Purpose of Note and Security
3.4 Escrow 8
3.5 Agency's Condition to Closing 9
3.6 Participant's Conditions to Closing to
3.7 Broker's Fees 11
3.8 Conventional Lender First Deed of Trust 11
3.9 Subordination Agreement(s) I 1
SECTION 4_ ACQUISITION OF THE SITF. 12
4.1 General 12
4.2 Construction of the Project 12
4.3 Insurance 12
4.4 Indemnification 13
4.5 Hazardous Materials 14
4.6 Security Financing; Rieht of Holders 14
4.7 Reserved 15
4.9 Reserved 15
SECTION 5. USE OF THE SITE 15
5.1 No Inconsistent Uses 15
5.2 Regulatory Agreement 15
5.3 Relocation 15
5.4 Maintenance of the Site 16
5.5 Nondiscrimination 16
5.6 Form of Nondiscrimination and Nonsegregation Clauses 16
5.7 Effect and Duration of Covenants 17
5.8 Creation of Capital Reserve Accounts 17
5.9 Capital Reserves 18
5.10 Payment of Portion of Residual Receipts 18
i
5.1 l Financial Statements 18
5.12 Operation of Project 19
5.1 3 Lead-Based Paint 19
5.14 Barriers to the Disabled 19
SECTION 6. DEFAULTS AND REMEDIES 19
6.1 Participant Defaults 19
6.2 Agency Defaults 20
6.3 Notice of Default 20
6.4 Agency's Remedies 21
6.5 Participant's Remedies 21
6.6 Rights and Remedies are Cumulative 21
SECTION 7. GENERAL PROVISIONS 21
7.1 Participant's Warranties 21
7.2 Governing Law 22
7.3 Attorneys' Fees 22
7.4 Notices, Demands and Communications 22
Between the Parties
7.5 Acceptance of Service of Process 22
7.6 Conflicts of Interest 22
7.7 Titles and Captions 22
7.8 Gender 23
7.9 Modifications 23
7.10 Merger of Prior Agreements and Understandings 23
7.11 No Third Parties Benefited 23
7.12 Assurances to Act in Good Faith 23
7.13 Warranty .Against Payment of Consideration 23
for Agreement
7.14 Nonliability of Agency Officials and Employees 23
7.15 Interpretation 23
7.16 Counterparts 23
7.17 Severability 24
7.18 Extension of Times of Performance 24
7.19 Inspection of Books and Records 24
7.20 Waivers 24
SECTION 8_ EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE 25
ii
Exhibits
Exhibit A Legal Description
Exhibit B Site Map
Exhibit C Scope of Development
Exhibit D Schedule of Performance
Exhibit E Promissory• Now
Exhibit F Deed of Trust
Exhibit G Regulatory Agreement
Exhibit 1-1 Subordination Agreement
iii
OWNER PARTICIPATION AGREEMENT
THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into as of
December IS , 2000 ("Effective Date") by and between REDEVELOPMENT AGENCY
OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency'),
and ORANGE COUNTY COMMUNITY HOUSING CORPORATION., a California nonprofit
corporation ("Participant").
RECI -I' ALS
A. Agency is a public body, corporate and politic, exercising governmental functions
and powers and organized and existing under the Community Redevelopment Law of the State
of California (California Heallh and Safer- Code Section 33000 et sexy.).
B. Participant has opened an escrow to acquire the "Site" (as such term is defined
herein) from Steve Perry("Seller") and intends to develop the "Project" (as such term is defined
herein) on the Site in accordance with the terms of this Agreement.
C. Agency desires to meet its affordable housing goals pursuant to the California
Community Redevelopment I_aw by assisting Participant in the acquisition of the Site to
facilitate Agency's affordable housing goals. After acquisition, the Project shall be rented to
tenants whose household incomes do not exceed very low income as defined by California law_
Agency's assistance shall be in the form of a loan in the amount of TWO I•IUNDRED EIGHTY-
FIVE -THOUSAND DOLLARS (S285,000.00) to assist Participant in meeting the cost of
acquisition of the Site-
D. Pursuant to the California Redevelopment Law, Agency has established a
Housing Set Aside Fund and has deposited therein certain tax revenues made available to the
Agency exclusively for the purpose of increasing and improving the community's supply of
affordable low and moderate income housing, including very low income housing ("Set Aside
Funds"). Agency's loan to Participant shall be funded from a combination of Set Aside Funds
and funds Agency obtains from the HOME Investment Partnership Program.
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:
AGREEMENT
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings given unless
expressly provided to the contrary:
1
s!s 4-2000 Agra nCCIiC(Kolcdo) elf A
RfS 2000-1063
l2.'8r00
The term "Agency" shall mean the Redevelopment Agency of the City of Huntington
Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington
Beach, CA 92648. and any assignee of, or successor to, the rights, powers, and responsibilities of
Agency.
The term "Agency Deed of Trust" shall mean the Deed of Trust attached as Exhibit "G"
hereto.
the term "Agency Loan" shall mean the Agency's loan to Participant in the amount not
to exceed TWO HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($285,000.00) of Set
Aside Funds and HOME Funds, as evidenced by the Agency Note and secured by the Agency
Deed of rrust.
The term "Agreement" or any reference to this "Agreement" shall mean this Owner
Participation Agreement executed by and between Agency and Participant, including all exhibits
attached hereto, which exhibits are incorporated herein by this reference and all other documents
incorporated herein by reference.
The term "City" shall mean the City of I luntington Beach, a municipal corporation,
having its offices at 2000 Main Street. Huntington Beach, CA 92648.
The term "Conventional Lender" shall mean one or more lenders of Participant's choice
providing funds for Participant's acquisition of the Site, in an amount not to exceed ONE
HUNDRED FIFTY THOUSAND DOLLARS (S150,000.00).
The term "Conventional Loan" shall mean a loan in an amount not to exceed
$150,000.00 provided to Participant by the Conventional Lender for acquisition of the Site.
The terns "Days" shall mean calendar days and the statement of any time period herein
shall be calendar days and not working days, unless otherwise specified.
The term "Effective Date" shall mean the the date the Agency's governing body
approves this Agreement and authorizes its Chairman to sign it; which date shall be inserted into
the preamble of this Agreement.
The terns "Eligible Tenant" shall mean any person entitled to rent a Unit as set forth in
the Regulatory Agreement.
The term "Escrow" shall mean that certain escrow with First American Corporation,
which has been established to convey the Site from the Seller to Participant, and into which
Agency shall deposit the portion of the Agency Loan funds described in Section 3.2 in
accordance with the terms of this Agreement.
The term "Executive Director" shall mean the individual duly appointed to the position
of Executive Director of the Agency, or authorized designee. Whenever an administrative action
is required by Agency to implement the terms of this Agreement, the Agency Executive Director,
2
4/5.4-2000 Agrcr OCCI IC(Kolcdo) OPA
KI IS 2000-1063
12'8;00
or an authorized designee, shall have authority to act on behalf of Agency, except with respect to
matters reserved under California law wholly for Agency Board determination.
The term "First Deed of Trust" shall mean a deed of trust securing the Conventional
Loan.
The term "Force Majeure" shall mean any war; insurrection; strike; lock-out; labor
dispute; not; flood; earthquake; fire, casualty; Act of God; act of the public enemy; epidemic;
quarantine; restriction; freight embargo; unavoidable lack of transportation; governmental
restriction; unusually severe weather; inability to secure necessary labor, materials, or tools;
delay of any contractor, subcontractor or supplier; economic or market conditions; lack of tenant
commitments or tenant changes; inability to secure satisfactory financing; act of the other party
including act or failure to act of City or any other public or governmental agency or entity
(except that any act or failure to act of City or Agency shall not excuse performance by Agency);
or any other cause beyond the control or without the fault of the party claiming an extension of
time to perform.
The term "Grant Deed" shall mean that certain Grant Deed that conveys the Site from
the current owner, the Seller to Participant.
The term "Hazardous Materials- means any hazardous or toxic substances, materials,
wastes, pollutants, or contaminants, which are defined, regulated, or listed as "hazardous
substances," "hazardous wastes," "hazardous materials," "pollutants,""contaminants," or"toxic
substances," under federal or state environmental and health and safety laws and regulations,
including without limitation petroleum and petroleum byproducts, flammable explosives, area
formaldehyde insulation, radioactive materials, asbestos, and lead. Hazardous Materials do not
include substances that are used or consumed in the normal course of developing, operating, or
occupying a housing project, to the extent and degree that such substances are stored, used, and
disposed of in the manner and in amounts that are consistent with normal practice and legal
standards.
The term "HOME" means the HOME investment Partnership Program created by the
National Affordable Housing Act of 1990.
The term "HUD" means the United States Department of Housing and Urban
Development.
The term "Lease" means the lease entered into between Participant and a tenant of a unit
in the Project.
The term "Median Income" means the median income for the Orange County Primary
Metropolitan Statistical Area(PMSA), with adjustments for household size, as determined from
time to time by the U.S. Department of Housing and Urban Development (HUD) pursuant to the
United States Housing Act of 1937 as amended, or such other method of median income
calculation applicable to the City that HUD may hereafter adopt in connection with said Act.
3
-Us-:-20M Agrcc-CXVIW(Kolcdo) OPA
ILIS 20W-1063
121WOO
The term "Note" shall mean that certain Promissory Note securing by that certain Deed
of Trust attached here to as Exhibit "F."
The term "Participant" shall mean ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit corporation, whose address is 1833 E. 17'" Street, Suite
207, Santa Ana, CA 92705
The term "Project" shall mean generally the acquisition of the existing apartment
building on the Site and the subsequent rental of the five (5) Units therein to Eligible Tenants,
pursuant to the procedures set forth herein and more particularly described in the Scope of
Development.
The term "Project Budget/Pro Forma" shall mean the sources and uses of funds for
acquisition of the Site and the development of the Project as set forth in Exhibit "I."
The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and
Declaration of Covenants and Restrictions attached hereto as Exhibit "H."
The term "Schedule of Performance" shall mean that certain schedule attached hereto as
Exhibit "D" setting forth the times upon which performance by the parties under this Agreement
is due.
The term "Scope of Development" shall mean that certain exhibit attached hereto as
Exhibit "C."
.I-he term "Seller" shall be Steve Perry.
The term "Set Aside Funds" shall mean the fund established by Agency pursuant to
California Redevelopment Law, wherein certain tax revenues have been deposited and made
available to the Agency exclusively for the purpose of increasing and improving the
community's supply of affordable love and moderate income housing, including very low income
housing.
The term "Site" shall mean that certain real property located in the City of Huntington
Beach, County of Orange, State of California, commonly known as 17412 Koledo Lane,
Huntington Reach, California, and legally described in Exhibit "A" and depicted on the Site
Map_
The term "Site Map"shall mean the map attached hereto as Exhibit "B" depicting the
location of the Site.
The term "Subordination Agreement" shall mean the form of Subordination Agreement
attached hereto as Exhibit 'J."
The term "Units" shall mean the five (5) two-bedroom dwelling units comprising the
Project and subject to rent restrictions as set forth in the Regulatory Agreement-
4
415 3-20M Agree OCCI IC(Kulcdo) OPA
RLS 2000-I063
I218i00
The term "Vern Lore Income Households" shall mean a family or individual whose
annual income does not exceed fifty percent (50%) of the median income for the Orange County
Metropolitan Statistical Area as determined by HUD with adjustments for smaller and larger
1.3
families.
SECTION 2. SUBJECT OF THIS AGREEMENT
2-1 Purpose of the Agreement
(a) The purpose of this Agreement is to implement the Community
Redevelopment Law by providing a loan (the"Agency Loan") to assist Participant in the
development of affordable housing in the City of Huntington Beach, in an amount not to exceed
TWO HUNDRED EIGI TY-FIVE THOUSAND DOLLARS (S285,000.00), as evidenced by the
Note secured by the Agency Deed of Trust, which Agency Loan is composed of HOME funds
and Set Aside Funds.
(b) This Agreement is intended to facilitate Participant's acquisition of the
Site and existing apartment building located thereon for rental to very low income tenants. The
Project pursuant to this Agreement and the fulfillment generally of this Agreement are in the best
interests 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 has been undertaken and is being assisted.
(c) The Project will be used and operated for not less than sixty(60) years as
rental housing, with all of the Units restricted to occupancy to Very Low Income Tenants in
accordance with the Regulatory Agreement.
2.2. The Redevelopment Plan- This Agreement is made in accordance with the
Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was
approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together
four different, previously approved project areas. The Site is located inside of the Merged
Redevelopment Project. Agency intends this Agreement to meet its obligations pursuant to
Health and Safety Code Sections 33413, 33334.2 and 33413(b)(2)(A)(11-).
2.3 Participant. The Participant is Orange County Community Housing
Corporation., a California nonprofit corporation, whose address is 1833 E. 171h Street, Suite 207,
Santa Ana, CA 92705.
2.4 Term of Agreement. The term of this Agreement shall be for a period of sixty
(60) years or until the Agency Loan is converted to a grant in full, whichever occurs later; with
such period commencing on the Effective Date of this Agreement.
5
41%.4-2000 Agree()C'( IW(K,ledo) OPA
kI S 10W.1063
12M,00
2.5 Prohibition Against Transfers; Right of First Refusal.
(a) The qualifications and identity of the Participant are of particular concern
to the Agency. It is because of those qualifications and identity that the Agency has entered into
this Agreement with the Participant. No voluntary or involuntary successor in interest of the
Participant shall acquire any rights or powers under this Agreement except as expressly set forth
herein.
(b) . Participant agrees that Participant shall not sell the Site during the term of
this Agreement,unless and until Participant has given to Agency 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 participant gives Agency written notice of Participant's intent
to sell, Agency shall have the right to purchase the Site at the same price and on the same terms
and conditions set forth in Participant's written notice of intent to sell. To exercise its option,
Agency 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
Participant's notice of intent to sell to be paid or delivered to Participant on close of escrow and
shall also give Participant written notice of the deposit. If Agency does not exercise the right in
accordance with the provisions of this Section, Participant may sell the Site to the prospective
buyer for the price and on the terms contained in the notice; provided, however, that Participant
has made every reasonable effort to sell the Site to another nonprofit housing corporation with
Participant's similar experience and reputation in the field of low-income housing(including the
management of properties with income and affordability restrictions), and provided further that
Agency has approved such prospective buyer in writing.
If at any time during the term of this Agreement Participant receives from any
third party a bona fide offer to purchase the Site on terms acceptable to Participant, Participant
shall give written notice of the offer to Agency. Within ninety(90) days after Participant gives
Agency written notice of the third-party offer, Agency shall have the right to purchase the Site at
the same price and on the same terms and conditions set forth in the third-party offer. To
exercise its right, Agency 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 offer to be paid or delivered to Participant on close of escrow and shall also give
Participant written notice of the deposit. In the event Agency does not exercise the option to
purchase in accordance with the provisions of this Section, Participant may sell the Site to the
third party making the offer on the same terms and conditions set forth in that offer; provided,
however, that Participant has made every reasonable effort to sell the Site to another nonprofit
housing corporation with Participant's similar experience and reputation in the field of low-
income housing(including the management of properties with income and affordability
restrictions), and provided further that Agency has approved such prospective buyer in writing.
If for any reason the Site is not sold to the party making the offer,Participant shall give Agency
the same right to purchase the Site on receiving any subsequent offer from any third party that is
acceptable to Participant.
(c) For the reasons cited above, the Participant represents and agrees for itself
and any successor in interest that without the prior written approval of the Agency, there shall be
6
4/s:4-2000 Agree:OCCHC(Koledo): OPA
RLS 2000-1063
12/8/00
0 0
no significant change in the ownership of the Participant or in the relative proportions thereof, or
with respect to the identity of the parties in control of the Participant or the degree thereof, by
any method or means.
(d) The Participant shall promptly notify the Agency of any and all chan�(Yes
whatsoever in the identity of the parties in ownership and:/or in control of the Participant or the
degree thereof, of which it or any of its officers have been notified or otherwise have knowledge
or information. This Agreement may be terminated by the Agency and the Agency may exercise
its remedies pursuant to the Agency Note and Agency Deed of Trust, if there is any significant
change (voluntary or involuntary) in membership, ownership, management or control, of the
Participant (other than such changes occasioned by the death or incapacity of anv individual).
(e) Participant shall not, except as permitted by this Agreement, assign or
attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer,
conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a
"'transfer"), without prior written approval of the Agency, except as expressly permitted by this
Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note. Any such
proposed transferee shall have the qualifications and financial responsibility necessary and
adequate as may he reasonably detennined by the Agency, to fulfill the obligations undertaken in
this Agreement by the Participant. Any such proposed transferee, by instrument in writing
satisfactory to the Agency and in form recordable among the land records, for itself and its
successors and assigns, and for the benefit of the Agency shall expressly assume all of the
obligations of the Participant under this Agreement and agree to be subject to all conditions and
restrictions applicable to the Participant in this Agreement. There shall be submitted to the
Agency for review all instruments and other legal documents proposed to effect any such
Transfer, and if approved by the Agency its approval shall be indicated to the Participant in
writing.
(f) In the absence of specific written agreement by the Agency, no
unauthorized "transfer, or approval thereof by the Agency, shall be deemed to relieve the
Participant or any other party frorn any obligations under this Agreement.
(g) Consent to any transfer shall not he deemed to he a waiver of the right to
require consent to future or successive transfers.
(h) The provisions of this Section 2.5 shall be of no force or effect as of the
expiration of the Regulatory Agreement.
SECI'ON 3. FINANCING AND ACQLISITON OF THE SITE.
3.1 Ownership of the Site. As of the Effective Date of this Agreement, Participant is
in escrow to acquire the Site from the Seller and as such Participant qualities as an "owner-
participant" within the meaning of the Community Redevelopment Law (Ifealth & S'afe�y Code §
33000 et seq.). Participant's financing of the acquisition of the Site includes Participant's equity
in the amount of Sl 5,000, the Agency loan in the amount of S285,000, and the conventional loan
in the amount of S 150,000.
7
4!s 4-2000 lgrcc OCC11C(Kolcdoj OFIA
R l S 2000-1063
12!xrrx)
3.2 Agency Financial Assistance. The Agency in accordance with the terms of this
Agreement, shall provide to Participant the Agency Loan. Upon satisfaction of all conditions
precedent (or waiver by Agency)to Agency's obligation to disburse the Agency Loan under this
Agreement, Agency shall deposit TWO HUNDRED EIGHTY-FIVE THOUSAND DOLLARS
($285,000.00) of the Agency Loan funds into Escrow for disbursement to Participant for
-acquisition costs at Close of Escrow (Participant shall provide Agency's Executive Director with
notice of the exact amount Agency is to deposit).
3.3 Form of Agency Financial Assistance; Purpose of Note and Security. In the
event Participant is in Material Default of any of its obligations hereunder, including its
obligations under the Regulatory Agreement, the entire principal balance of the Agency Loan
including all interest shall immediately become due and payable, and Agency shall have the
option to: (a) demand full payment of the principal balance of the Agency Loan including all
interest; (b)take over ownership and management of the Site; or(c) foreclose on the Site under
the Agency Deed of Trust.
3.4 Escrow. This Agreement, once deposited in Escrow, shall constitute joint
escrow instructions of Agency and Participant. The Escrow agent is hereby empowered to act
under the Agreement and upon indicating its acceptance in writing to Agency and Participant
within five(5) days after receipt of this Agreement; provided, however, that any undertaking by
the Escrow agent of any of the acts or services set forth in this Agreement shall constitute
acceptance of the obligation to perform as Escrow agent under this Agreement. Any amendment
to the Escrow instructions contained herein shall be in writing and signed by both Agency and
Participant.
(a) Closing Date. On or before the date established in the Schedule of
Performance, the parties shall satisfy the conditions described in Sections 3.5 and 3.6 and
complete the Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the
date provided therefor in the Schedule of Performance, either party may terminate this
Agreement, by providing written notice of termination to the other party.
(b) Delivery of Documents and Funds by Participant. On or before twelve
noon on the last business day prior to the scheduled Closing Date, Participant shall deposit or
cause to be deposited with the Escrow agent the following:
(i) the Grant Deed executed and acknowledged by the Seller;
(ii) the Note, executed by Participant;
(iii) the Agency Deed of Trust, including the Rider thereto, executed
and acknowledged by Participant;
(iv) the Regulatory Agreement, executed and acknowledged by
Participant; and
8
4/s:4-2000 Agree:OCCHC(Koledo): OPA
RLS 2000-1063
12/8/00
(v) all funds, documents, and deposits Participant is required to
deposit with Escrow agent in order to close the Escrow conveying
the Site to Participant.
(c) Delivery of Documents and Funds by Agency- On or before twelve
noon on the last business day prior to the scheduled Closing; Date, Agency shall deposit or cause
to be deposited with the Escrow agent the following:
(i) the Agency Deed of Trust, including the Rider thereto, executed
and acknowledged by Agency;
(11) the Regulatory Agreement, executed and acknowledged by
Participant; and
(iii) the portion of the Agency Loan funds described in Section 3.2.
(d) Recordation. Escrow agent is directed, on the Closing Date, to record
against the Site the following documents in the following order of priority: (1) the Grant Deed;
(ii) any First Deed of Trust; (iii) the Agency Deed of Trust; and (iv) the Regulatory Agreement.
One or more Stihordination Agreements, if required to effectuate the proper priority of the
foregoing deeds of trust and Regulatory Agreement, shall be recorded at the direction of
Participant in accordance with the terms of this Agreement.
(e) Escrow Agent Duties. The Escrow agent shall (1) record the documents as
provided in subparagraph (d); and (n) at Closing, deliver the original promissory note to Agency
and a conformed copy of same to Participant, and upon recordation deliver to Agency the
original of the Agency Deed of Trust and the Regulatory Agreement and a conformed copy of
same to Participant.
(f) Interest Bearing Accounts. Escrow agent shall hold all funds received in
an interest bearing account with the interest accrued paid at Closing to the party depositing such
funds.
(g) Title Insurance. Escrow agent shall deliver to Agency at Closing a
CLTA standard form owner's policy of title insurance in the amount of TWO HUNDRED
EIGHTY-FIVE THOUSAND DOLLARS (S285,000.00), issued by a title insurer acceptable to
Agency, insuring in favor of Agency the priority of the Agency Deed of Trust and Regulatory
Agreement in accordance with the priority established by this Agreement. The cost of said policy
shall be shared equally between the parties.
3.5. Agency's Conditions to Closing_ Agency's obligations to deposit the Agency
Loan funds described in Section 3.2 in Escrow for disbursement to Participant at Closing shall be
conditioned and contingent upon satisfaction, or Agency's waiver of each of the following
conditions precedent (collectively, the "Agency's Conditions to Closing"):
9
4,s.4.2000 Agee:(x'Ci(C.(Kulcdo): OPA
RI ti'_(H)()-106
12M N
(a) Agency shall have in its account up to TWO HUNDRED EIGHTY-FIVE
TI IOUSAND DOLLARS (5285,000.00)of IIOME funds and Set Aside Funds.
(b) Participant shall have deposited in escrow not less than FIFTEEN
-THOUSAND DOLLARS (S15,000.00) in equity or demonstrate evidence to Agency of
Participant's binding commitment to provide equity to the project (e_g Board of Directors
Resolution) (See Section 5.12),
(c) The Conventional Lender shall have deposited into escrow ONE
HUNDRED FIFTY "THOUSAND DOLLARS (S150,000.00);
(d) Participant has deposited in escrow all of the funds and instruments
required of it by this Agreement in order to close the Escrow;
(e) Escrow agent, at Closing, holds and will delivery to Agency the Note.
Deed of Trust, Regulatory Agreement, and "Title Insurance Policy;
(f) Participant shall delivery evidence acceptable to the Agency Executive
Director that Participant has obtained the insurance policies as required by Section 4.3 of this
Agreement.
(g) Participant shall deliver to the Agency a good standing certificate issued
by the California Secretary of State's office indicating that Participant exists in good standing at
the time of the proposed Close of Escrow;
(h) The Agency shall determine that Participant is in full compliance with the
terms and conditions of this Agreement and all documents and instruments referred to herein or
executed by Participant in furtherance of this Agreement.
In the event any of the Agency's Conditions to Closing are not satisfied (or
waived by Agency), Agency may cancel the Escrow and terminate this Agreement by delivering
thirty (30) days prior written notice to Participant and the Escrow agent. Participant may nullify
Agency's notice to terminate if, within such thirty(30) day period Participant (at no cost to
Agency) cures any unsatisfied Agency's Conditions to Closing and notifies the Escrow agent of
such cure. In the event of termination pursuant to this Section, (1) the Fscrow shall he cancelled
and any funds deposited by Agency shall be returned to it with any accrued interest earned on
such funds; (if) Participant shall be responsible for any escrow cancellation fees imposed by the
Escrow agent-, and (iii) this Agreement shall be terminated and the parties hereto shall have no
further rights or obligations hereunder.
3.6 Participant's Conditions To Closing. Participant's obligations to close Escrow
shall be conditioned and contingent upon satisfaction, or Participant's waiver of each of the
following conditions precedent (collectively, the "Participant's Conditions to Closing"):
(a) The Seller has signed and acknowledged the Grant Deed and have
deposited same in Escrow;
10
a/%_4-2000 Agree (XVIIC(Kolcdo) OPA
ILLS 2OW-1063
I NS/%
(b) Agency has deposited in escrow all of the funds and instruments required
of it by this Agreement in order to close the Escrow, including but not limited to the portion of
the Agency Loan funds described in Section 3.2, the Agency Deed of Trust, Regulatory
Agreement, and such Subordination Agreements as may be required to effect the priority
required by this Agreement;
(c) The Conventional Lender has deposited in escrow all of the funds and
instruments required of it by this Agreement in order to close the Escrow;
(d) All conditions to Closing set forth in (i) the agreements and any
amendments thereto between Participant and the Seller for conveyance of the Site; and (11)
agreements and financing documents pertaining to Participant's financing of the acquisition of
the Site, including as pertaining to financing by the Conventional Lender, have been satisfied (or
waived by the appropriate party).
In the event any of the Participant's Conditions to Closing are not satisfied (or
waived by Participant), and provided Participant has fully performed its obligations hereunder,
Participant may cancel the Escrow and terminate this Agreement by delivering thirty(30) days
prior written notice to Agency and the Escrow agent. Agency may nullify Participant's notice to
terminate if, within such thirty(30) day period Agency(at no cost to Participant) cures any
unsatisfied Participant's Conditions to Closing and notifies the Escrow agent of such cure. In the
event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds
deposited by Participant shall be returned to it with any accrued interest earned on such funds-,
(ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow
agent; and (Ili) this Agreement shall be terminated and the parties hereto shall have no further
rights or obligations hereunder.
3.7 Broker's Fees Participant and Agency shall each indemnify, defend, and 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_
3.8 Conventional Lender First Deed of Trust. Prior to the Close of Escrow,
Participant may obtain a loan from a Conventional Lender to be used exclusively for the
acquisition of the Site pursuant to this Agreement. Such loan may be memorialized by a note
and a First Deed of Trust and shall not exceed ONE HUNDRED FIFTY "THOUSAND
DOLLARS (S150,000-00).
3.9 Subordination As reement(s). Pursuant to Section 33334.14 of the Health and
Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and the Regulatory
Agreement to superior deeds of trust, regulatory agreements and other related documents
including but not limited to those required by the Conventional Lender, if certain findings are
made and certain written commitments are obtained from such Conventional Lender. In
accordance with said Section 33334.14, the Agency hereby finds that no economically feasible
alternative method of financing the Project on substantially comparable terms and conditions
11
d:',3-2000 AgrcC OCC IIC SKulcdul OPA
RIS 2000.1063
12?9100
without subordination is reasonably available, and the Agency has obtained written commitments
to protect the Agency's investment in the event of a default by Participant. Therefore, the
Agency hereby agrees to subordinate the Agency Deed of Trust and the Regulatory Agreement
to the Conventional Lender's First Deed of Trust and such other related documents as
Conventional Lender may require, in the amount the Agency determines was reasonably
necessary to acquire the Site. Participant may apply to the Agency to increase said indebtedness,
which approval the Agency shall not unreasonably withhold.
The priority of such deeds of trust shall be effected through the order of
recordation documents as set forth in Section 3.4(d). Such Subordination Agreement shall
provide tor: (i) A right of the Agency to cure a default on the Conventional Lender's First
Deed(s) of Trust; (ii) A right of the Agency to negotiate with any lenders after notice of default
from the tender; (iii) An agreement that if prior to foreclosure of any lenders' loans, the Agency
takes title to the Site and cures the default on the loan, the lender will not exercise anv right it
may have to accelerate the loan by reason of the transfer of title to the Agency; and (iv) A right
of the Agency to purchase the Site from the Participant at any time after a default on the loan_ If
a Subordination Agreement is required to effectuate the foregoing order of priority, such
agreement shall be generally in the form set forth as Exhibit H.
SECTION 4. ACOUISION OF THE SITE.
4.1 General. The Project shall consist of the acquisition of the existing
apartment building containing a total of five (5) units on the Site and the use of the Site as an
affordable rental apartment complex in accordance with this Agreement and the Regulatory
Agreement.
4.2 Reserved.
4.3 Insurance. Participant shall procure and maintain, during the term of this
Agreement, at its sole cost and expense, until the date that Agency waives any such insurance
requirement or requirements, the following policies of insurance:
(a) Workers' Compensation Insurance_ Pursuant to California Labor Corte
Section 1861, Participant acknowledges awareness of Section 3700 et seq. of said code, which
requires every employer to be insured against liability for workers' compensation. Participant
covenants that it will comply with such laws and provisions prior to commencing any work of
construction or rehabilitation on the Site. Participant shall maintain such Workers'
Compensation Insurance in an amount not less than ONE. I IUNDRED THOUSAND DOLLARS
($100,000.00) bodily injury, each occurrence, ONE HUNDRED THOUSAND DOLLARS
($100,000.00) bodily injury by disease, each employee, and TWO HUNDRED FIFTY
THOUSAND DOLLARS (S250,000.00) bodily injury by disease, policy limit, at all times
incident thereto, in forms and underwritten by insurance companies admitted in California, or if
not admitted in California then reasonably acceptable to Agency. Participant shall require all
subcontractors to provide such Workers' Compensation Insurance for all of the subcontractor's
employees. Participant shall furnish Agency with a certificate of waiver of subrogation under
12
ah 4-3000 Agree OCCIIC(Kolcdu) OPA
Kl S 2f100-100
12/8-00
0 •
the terms of the Workers' Compensation Insurance and Participant shall similarly require all
subcontractors to waive subrogation.
(b) General Liability Insurance_ Participant shall carry general commercial
liability insurance, including coverage for bodily injury, property damage, productslcompleted
operations and blanket contractual liability in an amount not less than ONE. MILLION
DOLLARS (S1,000,000.00), combined single limit. Such insurance shall also include
automotive bodily injury and property damage liability insurance. All such insurance shall be
provided by insurance companies admitted in California, or if not admitted in California, then
reasonably acceptable to Agency. Such insurance shall name the City and Agency and their
officers, agents, and employees acting in their official capacity, as additional insureds pursuant to
a pre-1990 CG 20 10 11 85 endorsement form. In the event of aggregate coverage, such limit
shall be no less than ONE MILLION DOLLARS (S1,000,000.0(). Participant shall require its
insurer to waive its subrogation rights against Agency and shall provide certificates of insurance
evidencing same.
(c) Property Insurance. Participant shall obtain and maintain in force, all-
perils (to include Fire, vandalism and earthquake protection) property insurance with extended
coverage endorsements thereon, on the Site, in an amount equal to the full replacement costs
and/or value thereof- this policy shall contain a replacement cost endorsement naming Agencv as
the insured and shall not contain a coinsurance penalty provision. The policy shall contain a
special endorsement that such proceeds shall he used to repair or rebuild any Units or other
improvements situated on the Site so damaved or destroyed; and, if not so used, such proceeds
shall be paid to Agency. The proceeds of any such insurance payable to Agency shall be used
for rebuilding or repair as necessary to restore the site at the discretion of Agency. The policy
shall name Agency and City, their officers, agents and employees acting in their official capacity
as additional insureds.
(d) Certificate of Insurance; Additional Insured Endorsements. Prior to the
acquisition of the Site, Participant shall furnish to Agency certificates of insurance and additional
insured endorsements evidencing the foregoing insurance coverages as required by this
Agreement. Such certificates and endorsements shall be subject to the reasonable approval of
the City Attorney and shall provide the name and policy number of each carrier and policy and
shall state that the policy is currently in force and shall promise to provide that such policies will
not be cancelled without thirty(30) days prior written notice to Agency.
4.4 Indemnification. During the term of this Agreement, Participant agrees to
and shall protect, defend, indemnify and hold the Agency and City harmless from and against all
liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs)
arising from or as a result of(i) Participant's failure to perform any obligations as and when
required by this Agreement or any document referred to herein, and (H) 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 shall occur on the Site and which shall be directly or indirectly caused by the acts
of, or any errors or omissions of, the Participant or its officers, shareholders, directors, members,
agents, servants, employees, contractors, or invitees. Participant shall not be responsible for, and
the Agency shall protect, defend, hold harmless and indemnify Participant against any liability,
13
4 z,4-2000 Agree 0(YClW(Kolcdo) OVA
Rl S 2000-I063
[2�K[H0
loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from
or as a result of the active concurrent negligence, sole negligence or sole willful misconduct of
the Agency or the City or their respective members, officers, officials, employees, agents,
representatives, Servants, or contractors.
4.5 Hazardous Vtatcrials
(a) Lead Paint_ Participant shall inspect the Site for lead-paint hazards in
accordance with Title X of the 1992 I lousing and Community Development Act. Any lead-paint
hazards identified must be abated as part of the rehabilitation of the Site. In the event the full
abatement cost for lead-paint hazards causes the rehabilitation costs to exceed the amount of
TWO HUNDRED THOUSAND DOLLARS (5200,000.00), Participant may request additional
Agency Loan funds to pay for such additional cost. The Agency Board of Directors, in its sole
discretion, shall approve or disapprove any such loan request based upon the recommendation of
the Agency Executive Director and the Director of Economic Development.
(b) Indemnification. Participant, from and after the Close of Escrow, and
until a transfer, sale, or assi-nment of the Site upon which the following covenant shall then he
the obligation of the transferee, purchaser, or assignee, shall indemnity, defend, and hold
harmless Agency and City and their respective 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 (i) the storage of Hazardous Materials on the Site or(ii) contamination of the Site by a release
of'hazardous materials. Participant, prior to the Closing Date, shall provide to Agency a copy of
any notices, orders, or reports concerning the presence of any Hazardous Materials on or
affecting the Site that is in Participant's possession.
4.6 Security Financing, Right of Holders
(a) Permitted Encumbrances. Participant, prior to the date Agency
disburses the Agency Loan, shall be permitted to enter into mortgages, deeds of trust,
conveyances, and leases-back or anv other form of conveyance in which the Site is used as
security for the purpose of securing loans of funds in an amount not to exceed S 150,000.00 to be
used for the acquisition of the Site and the construction of the Project without the consent of the
Agency provided such conveyance (1) is for the purposes permitted herein and (ii) is given to a
financial or lending institution or other acceptable person or entity capable of performing or
causing to be performed Participant's obligations under this Agreement, including without
limitation a pension fund, insurance company, or real estate investment trust. Any and all such
conveyances shall be subject to the prior approval of the Agency's Executive Director, which
approval shall not be unreasonably withheld.
(b) Notice of Default to Mortgage. Deed of Trust or Other Security Interest
Holders, Right to Cure. Whenever Agency shall deliver any notice or demand to
Participant with respect to any breach by Participant in completion of construction of the
improvements, Agency shall at the same time deliver a copy of such notice or demand to each
approved holder of record of any mortgage, deed of trust, or other security interest which has
14
ah a 2000 Agree OCCHC(Koledol OPA
1?'x IXl
previously requested such notice in writing. Each such holder shall (insofar as the rights of
Agency are concerned) have the right, at its option within ninety(90) days after the receipt of the
notice, to commence and thereafter to diligently proceed to cure or remedy such default and add
the cost thereof to the security interest debt and the Iien on its security interest. Any holder
completing the improvements in accordance with this Agreement shall be entitled to a Release of
Construction Covenants upon written request made to Agency.
4.7 Reserved.
4.8 Reserved.
SECTION S. USE OF THE SITE.
5.1 No Inconsistent Uses. Participant covenants and agrees, for itself, its successors,
its assigns, and every successor in interest to the Site, or any part thereof, that for the period
beginning on the Close of Escrow and ending on the expiration date of the Regulatory
Agreement, Participant and such successors shall not devote the Site to uses inconsistent with the
applicable zoning restrictions, this Agreement, and the Regulatory Agreement; provided that, in
the event of anv inconsistency, the provisions of the provisions of the Regulatory Agreement
shall prevail over this Agreement.
5.2 Regulatory Agreement. At the Close of Escrow the Regulatory Agreement
shall be recorded against the Site in the Priority set forth in the Section 3.4(d).
5.3 Relocation
(a) Relocation Plan. No relocation of tenants living on the Site as of the
Effective Date of this Agreement is contemplated by the parties hereto or is required to occur as
a result of this Agreement In the event, however, that off-Site relocation of existing tenants
becomes necessary as a result of the Project, Participant prior to such off-Site relocation, shall
submit a relocation plan to Agency for review and approval ("Relocation Plan'). The Relocation
Plan shall include the name, gender, age, ethnicity, household income, and amount of relocation
payment to be paid; provided, however, that Participant shall not be obligated to provide any of
the foregoing referenced personal information about relocates if such relocates refuse to provide
such information or the gathering or provision of such information is contrary to applicable law.
Participant shall comply with the requirements of all applicable relocation laws, including, but
not limited to, the Uniform Relocation Act, and shall comply with related tenant notice
requirements and shall provide the Agency with true and correct copies of such notices to
tenants. Participant shall also retain all required records and the originals anWor copies of tenant
notices in its files as mandated by applicable law. The relocation requirements of this Section do
not apply to any tenants who are required to move as a result of an increase in such tenant's
household income.
(b) Relocation Cost. Participant shall be obligated for the payment of all
relocation benefits and costs identified in the Relocation Plan, as well as relocation benefits and
costs that arise from the acquisition or rehabilitation of the Site beyond those obligations
15
4%4-200OAgTCC (nY' W(Koledo) OPn
Rl S 20UU-I063
l 91:00
identified in the Relocation Plan. Participant shall indemnify, defend, and hold harmless the
Agency from and against any claims for relocation and the payment of relocation benefits that
are the obligations of Participant under this Agreement_ Notwithstanding the above, Agency
may provide relocated tenants Section 8 I-IUD housing vouchers, which Participant may use to
offset its relocation obligations.
5.4 Maintenance of the Site. After acquisition of the Site, all Units must be
maintained in compliance with Federal Housing Quality Standards (24 CFR § 982.401) and other
applicable state and local laws and codes. In addition, Participant shall maintain the Site in
accordance with the terms of the Regulatory Agreement. The Agency shall have the right at all
reasonable times to enter and inspect the Site in order to ensure compliance with the foregoing
requirements. In the event Participant fails to maintain the Site as required by this Section,
Participant shall, within thirty (30) days after Agency's notification or Participant's own
discovery of any deficiency, take all necessary steps to correct such deficiency.
5.5 Nondiscrimination. There shall be no discrimination against or segregation of
any person, or group of persons, on account of race, color, creed, age, class, income, religion,
sex, sexual orientation, marital status. national origin or ancestry in the sale, lease. sublease,
transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, or in the awarding
of contracts for the Project, nor shall Participant, or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Site, or any part thereof, or in the awarding of contracts for the Project.
Participant shalt comply with all applicable federal, state and local
nondiscrimination, fair housing, and equal opportunity requirements. In addition, Participant
shall conduct affirmative marketing and minority outreach activities as required by Federal
regulations.
5.6 Form of Nondiscrimination and Nonse rre ration Clauses. The Participant shall
refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed.
age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry of
any person. All such deeds, leases or contracts shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clause:
(a) In Deeds: "The grantee herein covenants by and for himself, his heirs,
executors, administrators and assigns, and all persons claiming tinder or through him, that there
shall he no discrimination against or segregation of, any person or group of persons on account
of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the land herein conveyed, nor shall the grantee himself or any person claiming under or through
him, establish or permit any such practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in the land herein conveyed. The foregoing covenants shall run with the land.
16
4!s a-2(K1O Agrec-OCCHC(Koledo) OPA
R1-1;2000-1063
12r8�00
0 0
(b) In Leases: "The lessee herein covenants by and for himself, his heirs,
executors, administrators and assigns, and all persons claiming under or through him, and this
lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or
group of persons, on account of-race. color, creed, age, class, income, religion, sex, sexual
orientation, marital status, national origin or ancestry in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any
person claiming under or through him, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy,
of tenants, lessees, sublessees, subtenants, or vendecs in the land herein leased."
(c) In Contracts: "There shall be no discrimination against or segregation of'
any person, or group of persons on account of race, color, creed, age, class, income, religion, sex,
sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer.
use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person
claiming under or through him, establish or permit any such practice or practices of
discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of
the land."
5.7 Effect and Duration of Covenants. The Participant has, concurrently with the
execution of this Agreement, executed in recordable form the Regulatory Agreement. Every
covenant and condition and restriction contained in the Regulatory Agreement shall remain in
effect for sixty (60) years, from the Effective Date of this Agreement (regardless of whether the
Agency loan has been repaid prior to the end of such 60-year period), except that the covenants
against discrimination set forth in Sections 5.5 and 5.6 shall remain in effect in perpetuity_ If, at
the end of the 60-year period, an unpaid balance remains on the :'Agency Loan, Participant may
choose to do either of the following: (a) Participant may choose to continue to maintain the
covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in
which case the Agency shall not require repayment of the balance of the Agency Loan and such
loan shall not accrue any interest for the period during which said covenants, conditions and
restrictions are maintained; or (b) Participant may choose not to maintain the covenants,
conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the
entire principal balance of the loan plus all accrued interest on the Agency Loan shall
immediately become due and payable.
5.8 Creation of Capital Reserve Accounts. No later than thirty(30) days after
the Close of Escrow, Participant shall create a "Capital Reserve Account." No later than thirty
(30) days after the Capital Reserve Account has been created, Participant shall provide to
Agency a pro forma statement concerning the account, for Agency's review and approval. At
any time thereafter during the term of this Agreement, Agency, on ten (10) days prior written
notice to Participant, may request that Participant submit to it updated, revised Capital Reserve
Account statement. Agency, at its own expense, may audit any updated, revised Capital Reserve
Account statement submitted to it by Participant.
17
4t%4-2000 Agrcr OC:C'HC(Koledo) OPA
RLS 2000-I00
1-'Rr00
5.9 Capital Reserves. Commencing on _ Der-ember 18, 2001_ _, and every
succeeding year during the term of this Agreement, Participant shall deposit SFVEN
HUNDRED FIITY DOI-LARS (S750.00) or FIt."I'Y PERCENT (50%) of Participant's Net
Operating Income (defined below), whichever amount is less, into the Capital Reserve Account
for repairs to the Site. The Capital Reserve Account shall at all times be maintained at a level
sufficient to adequately fund the cost cif all repairs and improvements to the Site and to maintain
the Site in compliance with the requirements of Section 5.4. Should Participant believe Project
revenues to be insufficient to permit Participant to make such a full deposit in any year,
Participant may appeal to the Agency to have the payment rcdLIced, suspended, renegotiated, or
forgiven. Participant shall carry_ the burden of proof, in this regard Agency, shall have the
unfettered discretion to reduce, suspend, renegotiate, or forgive the payment based on the
evidence submitted by Participant.
5.10 Payment of Portion of Residual Receipts.
(a) Pavment to Apencv. Commencinu.on the third anniversary of the date of
this Agreement, and every succeeding year during the terra of-this Agreement, Participant shall
pay to the Agency ONE THOUSAND TWO HUNDRED DOLLARS (S 1.200.00) or FIFTY
PFRCENT (50%)of Net Operating Income for the previous one-year period, whichever amount
is less, for payment of the Agency ]Mote. Should Participant believe the Project revenues be
insufficient to permit participant to make such a payment in any year. Participant may appeal to
the Agency to have the payment reduced, suspended, renegotiated. or forgiven. Participant shall
earn,the burden of proof in this regard. Agency shall have the unfettered discretion to reduce.
suspend, renegotiate, or forgive the payment based on the evidence submitted by the Participant.
If a payment is required by Participant pursuant to the terms hereof, Participant shall make such
payment no later than ninety(90) days following the end of the reporting year (calendar year or
fiscal year). if the first or final payment is based on a portion of a year, the payment shall be pro
rata based on a 360-day year.
(b) Definition of Net Operating income. As used herein, the term "Net
Operating Income" shall mean, for any reporting period (calendar year or fiscal year), (a) all
income derived by Participant from the Site, including without limitation all tenant rent, less (i)
payments of principal and interest, if any, required to be paid in such year by Participant %with
respect to any note, mortgage, or deed of trust with respect to the Site or Project. (11) all expenses
actually incurred (or to be incurred if accounted for on an accrual basis) by Participant in leasing,
managing,operating, maintaining, and repairing the Site, (iii) all capital expenses incurred
pertaining to the Site, (iv) the deposits into the Capital Reserve Account, and (v) property
management fees, administrative costs, salaries, benefits, overhead costs, and such other and
further operating and management expenses incurred in operating the Site. Depreciation
expenses shall not he a reduction against Net Operating Income.
5.11 Financial Statements. Participant shall submit to Agency, on a yearly basis, a true
and correct copy of Participant's audited financial statements for the Project clearly identifying
the status of the Project's operating reserve account and cash flow. Before such statements are
submitted to Agency, they should (but are not required to) be reviewed and certified by
Participant's Board of Directors, After receipt of Participant's audited Financial statements for
I8
A's 4-2000 A-,wc OCCHC(K(lcdo) OVA
Rl S NXKJ-10ff)3
1'_r8%(w
the Project. Agency may request additional financial analyses or obtain a third party review of
Participant's financial statements for the Project to verify the accuracy of the deposits by
Participant into the Capital Reserve Account pursuant to Section 5.10 or the deposits by
Participant into the Capital Resen•e Account pursuant to Section 5.9.
5_12 Operation of Project. Borrower shall lease, operate and manage the Project in full
conformance with the terms of the OPA and specifically the Regulatory :agreement. Further, all
of the Units in the Project shall be designated as HOME Units and the rents for these units shall
not exceed the "low income" rent defined by the HOME Program, as set forth at Section 92.252
of Title 24 of the Code of Federal Regulations. As stated in Section 3.5(b), prior to close of
Escrow, for the purposes of operating and managing the Project. Participant, subject to the
Agency's review and approval, shall have contributed FIFTEEN THOUSAND DOLLARS
($15.000.00) in equity cash, or rehabilitation labor with a reasonable value of FIFTEEN
TI IOUSAND DOLLARS ($15,000.00), or strictly defined and quantifiable services with a
reasonable value of>'IF TEEN THOUSAND DOLLARS (515,000.00). Not later than sixty(60)
days after close of Escrow, Participant shall submit to Agency, for Agency's review and
approval, an annual budget outlining each proposed service to be offered by Participant in
operating and managing the Project, and the anticipated cost of each such service. The first such
proposed budget shall cover the period from the close of Escrow to the beginning of the second
year of the term of this Agreement. Not later than sixty(00) days after the beginning of the
second year of the term of this Agreement, and for every year thereafter during this Agreement's
teen, Participant shall submit an annual, proposed budget to Agency, for the latter's review and
approval.
5.13 Lead-Based Paint. Borrower shall ensure that it and its contractors and
subcontractors shall not use lead-based paint in the construction or maintenance of the Property.
Borrower shall insert this provision in all contracts and subcontracts for work perfornied on the
Project which involve the application of paint_ Borrower will test both properties for the
presence of lead-based paint as required by HUD regulations. Borrower will furnish copies of
test results to lender. Borrower will remediate any asbestos or lead-based paint hazards where
the level of that substance is found to be in excess of acceptable thresholds.
5.14 Barriers to the Disabled. Borrower shall ensure that the Project shall be
developed and the Property shall be maintained to comply with all applicable federal, state, and
local requirements for access for disabled persons.
SECTION 6. DEFAULTS AND REMEDIES.
6.1 Participant Defaults. The occurrence of any one or more of the following events
shall constitute a "Material Default" by Participant hereunder if, after receiving written notice
from Agency as provided in Section 6.3 below identifying such event, Participant fails to cure
said event within thirty(30) days; provided that if such default is not reasonably capable of being
cured within thirty(30) days, Participant commences to cure said event within thirty (30) days
and diligently and in good faith continues to cure the event of default:
19
1;s a-2000 Agree i COW(Kolcdo) QPA
RLS 2(x)0-IW,I
(a) Participant has failed to Close Escrow to acquire fee title to the Site within
sixty(60) days after the time set forth in the Schedule of Performance;
(b) Participant fails to observe or perform any material terrn of this
Agreement or any agreement incorporated hereunder by reference including, but not limited to,
the Regulatory Agreement, the Note, the Deed of Trust, or the Subordination Agreement (if
applicable), within the time set forth in this Agreement or any of the documents referred to
herein; or
(c) Participant knowingly and intentionally makes or delivers to Agency any
statement, report, or certificate that is not true or correct in any material respect.
In no event shall Agency be precluded from exercising remedies if the default is
not cured within ninety(90) days, or Agency's rights under this Agreement become or are about
to become materially jeopardized by any failure to cure a default.
6.2 Agency Defaults. The occurrence of any one or more of-the following events
shall constitute a "Material Default" by Agency hereunder if; alter receiving written notice from
Participant as provided in Section 6.3 below identifying such event, Agency fails to cure said
event within thirty (30) days; provided that if-such default is not reasonably capable of being
cured within thirty(30) days, Agency commences to cure said event within thirty(30) days and
diligently and in good faith continues to cure the event of default:
(a) Agency fails to observe or perform any material term of this Agreement
within the time set forth in this Agreement, including but not limited to timely deposit into
Escrow of the required portion of Agency Loan fiends; or
(b) Agency knowingly and intentionally makes or delivers to Participant any
statement, report, or certificate that is not true or correct in any material respect.
In no event shall Participant be precluded from exercising remedies, if the default
is not cured within ninety(90) days, or Participant's rights under this Agreement become or are
about to become materially jeopardized by any failure to cure a default.
6.3 Notice of Default. The non-defaulting party shall give written notice of any
default under this Section to the defaulting party, clearly specifying the default. Copies of any
notice of default given to the defaulting party shall also be given to any permitted lender
requesting such notice. Any failure or delay in giving such notice or in asserting any of either
party's rights and remedies as to any default shall not constitute a waiver of any default, nor shall
it change the time of default, nor shall it deprive either party of its rights to institute and maintain
any actions or proceedings which it may deem necessary to protect, assert or enforce any such
rights or remedies.
20
4`s 4-2(10p Agr« OCC IIC(Koltdo)- OPA
RI S 2000-I06=
12�R U0
i •
6.4 A2encv's Remedies.
(a) The Agency, at its option, may terminate this Agreement prior to the Close
of Escrow in the event of any Material Default that the Participant fails to cure within the time
set forth in Section 6.1 (subject to the right of'notice and expiration of applicable cure periods).
(b) Following the Close of Escrow, in the event of any Material Default that
the Participant fails to cure within the time set forth in Section 6.1 (subject to the right of notice
and expiration of applicable cure periods), the entire principal balance of the Agency Loan
including all interest shall immediately become due and payable, and Agency shall have the
option to: (a) demand full payment of the principal balance of the Agency Loan including all
interest; (b) take over ownership and management of the Site; or(c) foreclose on the Site under
the Agency Deed of Trust.
6.5 Participant's Remedies. Subject to any applicable cure periods and the
general rloht to notice provided for in this Agreement, upon a default or breach of this
Agreement by Agency. Participant may bring an action for specific performance of this
Agreement or any term or provision hereof, or may terminate this Agreement. Participant may
not sue for monetary damages.
6.6 Rights and Remedies are Cumulative. Except as otherwise expressly stated
in this Agreement, the rights and remedies of the parties hereto 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.
SECTION 7. GENERAL PROVISIONS
7.1 Participant's Warranties. Participant represents and warrants (1) that it has
access to professional advice and support to the extent necessary to enable Participant to frilly
comply with the terms of this Agreement; (2) that it is duly organised, validly existing and in
good standing under the laws of the State of California. (3) 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
Participant; (5) except as disclosed to the Agency in writing, there are no actions or proceedings
pending or, to the best of the Participant's knowledge, threatened against the Participant before
any court or administrative agency in any way connected with the Site or the Project which could
adversely affect the Participant's ability to perform the activities contemplated hereunder; (6)
neither this Agreement nor anything provided to be done hereunder violates or shall violate any
contract, agreement or instrument to which the Participant is a party or which affects the Project
or any part thereof; (7) the Participant 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 Participant has not entered into any agreements
which will adversely affect the title to the Project or the Participant's right to develop and use the
21
-s's 4-2WU Agree C1CCIIC(Kolcdo) Ul'A
KI S 2000-1061
12:8!U0
0 0
Project as provided in this Agreement, and the Participant will not enter into any such
agreements after the date hereof.
7.2 Governing Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
7.3 Attornevs' Fees. In the event of litigation between the parties arising out of
this Agreement, each party shall bear its own attorneys' fees, and other costs.
7.4 Notices, Demands, and Communications Between the Parties. Formal
notices, demands, and communications between Agency and Participant shall be sufficiently
given if- (1) personally delivered; (11) 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 Participant: Orange County Community Housing Corporation
1833 Fast 171h St., Suite 207
Santa Ana, CA 92705
Attn: Allen Baldwin, Executive Director
If to Agency: Redevelopment Agency of the
City of Huntington Reach
2000 Main Street
Huntington Beach, CA 92648
Attn: Executive Director
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(1) receipt of refusal to accept
delivery, or(ii) noon on the second business day following deposit in the United States mail.
7.5 Acceptance of Service of Process. In the event that any legal action is
commenced by Participant against Agency, service of process on Agency shall be made by
personal service upon Executive Director or the Secretary of Agency, or in such other manner as
may be provided by law. In the event that any legal action is commenced by Agency against
Participant, service of process on Participant shall be made by in any manner provided by law,
and shall be valid whether made within or without the Sate of California.
7.6 Conflicts of Interest. No member, official, or employee of Agency shall 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.
7.7 Titles and Captions. Titles and captions are for convenience only and shall not
be construed to limit or extend the meaning of this Agreement.
22
4'%4-?C11)O Agrcc OC'CI IC{Koledoi 011A
RI S 2000-1 DO
Iz�scx)
i •
7.8 Gender. As used in this Agreement, masculine, feminine or neuter gender
and the singular or plural number shall each be deemed to include the others wherever and
whenever the context so dictates.
7.9 ?Modifications. Any amendment, alteration, change, or modification of or to this
Agreement, in order to become effective, shall be made by written instrument or endorsement
thereon and in each such instance executed on behalf of each party hereto_
7.10 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, including but not limited to that
certain "Project Deal Paints" Memorandum approved by Participant and the Agency and/or City
Council of the City of Huntington Beach, are merged herein and shall be of no further force or
effect.
7.11 No Third Parties Benefited. Other than the general and limited partners of
Participant, this Agreement shall 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.
"Phis 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.
7.12 Assurances to Act in Good Faith. Participant and Agency each agree to
execute all documents and instruments and to take all action, including timely depositing funds
as required hereby, and shall use their respective best efforts to accomplish the rehabilitation of
the Site in accordance with the provisions hereof.
7.13 Warranty Ayainst Pavment of Consideration for Agreement. Except as
provided in this Agreement. Participant 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.
7.14 Nonliability of Agency Officials and Employees. No member, official, or
employee of the Agency shall be personally liable to the Participant or any successor in interest,
in the event of any default or breach by the Agency or for any amount which may become due to
the Participant or to its successor, or on any obligations under the terms of this Agreement.
7.15 Interpretation. The terms of this Agreement shall be constnied in accordance
with the meaning of the language used and shall not be construed for or against either party by
reason of the authorship of this Agreement or any other rule of construction which might
otherwise apply.
7.16. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall constitute one and the
same instrument.
23
y';4-20M Agrce (x'('H('(KU1Ldo) 011A
RIS 2000-100 3
12:9,00
7.17 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law. If, however, any
provision of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
7.18. Extension of Times of Performance_ Notwithstanding the foregoing, in addition
to the specific provisions of this Agreement. performance by either party hereunder shall not be
deemed to be in default during an event of Force Majeure. An extension of time for an event of
Force Majeure shall be limited to the period of such event, and shall 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 shall continue to exercise reasonable diligence to minimize the
period of delay. Times of performance under this Agreement may also be extended by mutual
written agreement by Agency and Participant In addition, the Executive Director shall have the
authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of
one (1) year.
7.19 Inspection of Books and Records. The Agency or its designee has the right at
all reasonable times to inspect the books, records and/or other documents of the Participant
pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement.
7.20 Waivers. The waiver by Agency or Participant of any term, covenant, or
condition herein contained shall not be a waiver of such term, covenant, or condition on any
subsequent breach.
24
4 s 4-2000 Agree OCC1(C(Koledo) OPA
RI-5 2(Nl6-1063
1218?00
• •
SECTION & EXECUTION OF AGREEi• ENT; "TIME FOR ACCEPTANCE
This Agreement consists of twenty-six (26) pages and nine (9) attachments which
constitute the entire understanding and agreement of the parties.
This Agreement does not take effect until executed by the Participant and Agency. This
Agreement, when executed by the Participant and delivered to the Agency, must be authorized,
executed and delivered by the Agency within thirty(30) days after the date of signature by the
Participant, or this Agreement may be terminated by the Participant on written notice to the
Agency.
The Agency Executive Director 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
Agency as may be necessary or proper to effect the terms of the Owner Participation Agreement
on behalf of the Agency.
[end — signature page follows]
25
411.4-2000 Agree 0CCHC OPA
RIS 2CK)O-I063
121M0
IN WITNESS Wl IEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
"PARTICIPANT" "AGENCY"
ORANGE COUN'CY COMMUNITY REDEVELOPMENT AGENCY OF THIr
HOUSING CORPORATION, a CITY OF HUJTINGTON BEACH, a public
California nonprofit corporation body co orate and politic
By: - By. Qa^e�,,Pz , C rman
Name: Aus- *��(�,Aj
T Type or print ATTEST:
Its (circle one) Chatrmatt:'Presidenu`Vice President
AND
By.
Agency Clerl< /?�yr/�
APPROVED AS TO FORM:
Name: B
Type or print y-
Its(circle one)Sec retary..'Assi-slant Secretary/ .tom Agencv General Counsel ,O
Chief Financial Officer/ y g —pU `ti���
Assistant Treasurer
?G
4/c.4-2004)Agree:OCCIW(Koledo) OPA
RI_S 2060-1003
12 8100
EXHIBIT A
Legal Description
[behind this page]
Legal Description
Page 1 of I
LEGAL DESCRIPTION
OF THE PROPERTY COMMONLY KNOWN AS
17412 KOLEDO LANE, HUNTINGTON BEACH, CALIFORNIA 92647
ALL THAT CERTAfN LAND SITUATED[N THE STATE OF CALIFOMA.COUNTY OF ORANGE,CITY OF HUNTINGTON
BEACH,DESCMED AS FOLLOWS
LOT 40 OF TRACT NO. 4301, AS PER MAP RECORDED TNN BOOK 177, PAGES 11 AND 12 OF
MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,TOGETHER
WITH THAT PORTION OF KOLEDO LANE ADJOINING SAID LOT 40 WESTERLY, AS ABANDONED BY
RESOLUTION NO. 5353 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, FEBRUARY
15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS, THAT WOULD PASS BY A
CONVEYANCE OF SAID LOT.
EXCEPT ALL UNDERGROUN'D WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED
HEREIN, BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND OR THE TOP 500
FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER, AS SET FORTH IN DEED TO CITY OF
HUNTINGTON BEACH, RECORDED IN BOOK 6511,PAGE 679 OF OFFICIAL RECORDS.
EXHIBIT B
Site Map
[behind this page]
Sitc'tap
Page I of I
SITE MAP
17412 KOLEDO LANE
HUNTINGTON BEACH, CALIFORNIA 92647
WARNER
FIR I OR_ oL,,.oL.r s�rla.
' SI FRUT
• At16.^ i rle lroyt
LlO.E :fal -
L>1w r
E lOt7 LTCaI L11�
11L07 l7Lal 41-
�K7b01t,BEIVTO
1117E RAINBOVY Av---- PARK _ R ^ a:l liLa [ Tt1' ',lN w 1 1101 Etf:f ll..7 = 3T11) 117111Talt 17:II l,}11 171.3 ] m_OAK VIEW SCHOOL L+ra
1 T7t1 MANDRELL 1 1:1,• lntl
Z ntl 7
'•,t' (1724I OAK)
i 1r711 z, *111 = C`� ] ECFIw+l.Do&
]1721 =
LTL1 11/., 11111
]lnl BARYON DR
nm
1,Ls1 x 1 3 (7300.01
Out 17)"l}rrl1i1T7
ITHI 1,1G ITy1 ll„ 11171 )]ll 17177 ]7
lT.9E trlli 7,r,1
]iltl ]Tlt ET fiT 1 li 17y i73a:
IfalE IHL1 lHlr 5)71 ]1.11 I1 lil.: liry`
llati ,,..1 = Irl1'
L 7.L T.ll I1.1 1 1 fall lla yl.lx hall J li.lf
ITa1l
t7au Il.il.y li 1 Z 1fa 17 1, li.al t,.al 1
l,a.l tiul Shll J 7)1 17a 17.L 1 L/.11 ]T.11 2 )7 a1
1]aG1 1TK7 L.aa] {I/ 1�7 ....a 7a.t Y Y).a/ l,a•t N T�11 0�1L{ll
IH11 11.12 7p J W W �, 1a51 Sub-s
K it �j o 1.11
,ul 1141: 1� � 71 � xY r r >! r .��. ? Y ,..Ln�tl
SLATER
EXHIBIT C
Scope of Development
[behind this page]
Scope of Development
Page 1 of 1
EXHIBIT "C"
SCOPE OF DEVELOPMENT
Participant's acquisition of the existing apartment building consisting of a total of five (5)
units located at 17412 Koledo Lane in the City of Huntington Beach and the subsequent rental of
those units to persons or households of very low income, as more further described in the loan
Agreement and Regulatory Agreement.
Scope of Development
Page I of 1
EXHIBIT I)
Schedule of Perfonnance
[behind this page]
Schedule of PelfUrmance
Page I of 1
EXHIBIT "D"
SCHEDULE. OF PERFORMANCE
FFEINI OF PERFORMANCE TUNI1E: OF PERFORMANCE REFERENCE
I Participant and Agency each execute all Not later than ntielve noon on the § 3_4(b). § 3 4(c)_
documents and deposit all documents and business day immediately prior to the t
funds into Escrow as required by this scheduled Closing Date.
Agreement_
2. Closing Date- Not later than . 2000. § 3 4(a)_
3. Participant obtains the Approved Project Within sixty(60)days after the Closing § 4 2(a)-(e)
Plans and Pewits for the Project and Date-
commences the rehabilitation work on the
site.
4- Participant submits a Management Plan to Within sixty(60)days after the Closing ti 4.4 of Regulatory
the Agency. Date. Agreement
(Exhibit H)
5- Participant submits annual financial Within twelve (12)months after the § 5-11
statements- and rent recordOenant closing date_ i
eligibility certifications to the Agency. __
It is understood that this Schedule of Performance is subject to all of the terms and conditions of
the text of the Agreement. The summary of the items performance 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 text shall govern.
The time periods set forth in this Schedule of Perfomiance may be altered or amended only by
written agreement signed by both the Participant and the Agency. The Executive Director of
Agency shall have the authority to approve extensions of time without action of the Board of
Directors of Agency not to exceed a cumulative total of one (1) year.
Schedule of Performance
Page l of I
E.XH[BIT E
(Reserved)
RESOLUTION NO 317
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH DECLARING INTENTION TO REIMBURSE
EXPENDITURES FROM THE PROCEEDS OF TAX-EXEMPT
OBLIGATIONS AND DIRECTING CERTAIN ACTIONS
WHEREAS, the Redevelopment Agency of the City of Huntington Beach or a public entity
associated therewith (the "Issuer") intends to issue tax-exempt obligations (the "Obligations") for
the purpose, among other things, of assisting in the financing of the acquisition, rehabilitation
and development of a multifamily housing residential facility generally located at 17412 KoIedo
Lane, Huntington Beach, California, (the "Project"); and
United States Income Tax Regulations section 1.103-18 provides generally that proceeds
of tax-exempt debt are not deemed to be expended when such proceeds are used for
reimbursement of expenditures made prior to the date of issuance of such debt unless certain
procedures are followed, among which is a requirement that (with certain exceptions), prior to
the payment of any such expenditure, the issuer must declare an intention to reimburse such
expenditure; and
It is in the public interest and for the public benefit that the Issuer declare its official
intent to reimburse the expenditures referenced herein;
NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of
Huntington Beach DECLARES and ORDERS as follows:
1. The Issuer intends to issue the Obligations for the purpose of pa ing the costs of
financing the acquisition and development of the Project_
2. "The Issuer hereby approves the financing of the Project with the proceeds of the
Obligations subject to the approval by the Issuer of the bond documents to be executed in
connection therewith.
3. The Issuer hereby declares that it reasonably expects that a portion of the
proceeds of the Obligations will be used for reimbursement of expenditures for the acquisition
and development of the Project that are paid before the date of initial execution and delivery of
the Obligations.
4. The maximum amount of proceeds of the Obligations to be used for
reimbursement of expenditures for the acquisition, rehabilitation and development of the Project
that are paid before the date of initial execution and delivery of the Obligations is S285,000_
5. The foregoing declaration is consistent with the budgetary and financial
circumstances of the Issuer, in that there are no funds (other than proceeds of the Obligations)
that are reasonably expected to be (1) reserved, (ii) allocated or (iii) other«-ise set aside, on a
1
4/s 4-2000 Rcwlunons Agency- Koledo Tax-Fxcinpi obligation,
RLS 00-1063,
12/8/00
• Res. No. 317
long-term basis, by or on behalf of the Issuer, or any public entity controlled by or associated
with the Issuer for the expenditures for the acquisition and development of the Projects that are
expected to be reimbursed from the proceeds of the Obligations.
PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington
Beach at a regular meeting thereof held on the 18th day December, 2000.
-1" Qvt"_7'-/14"tAftl
Chairman
ATTEST: APPROVED AS TO FORM:
A, _
gency Clerk �p(eAgency General Counsel �,
ti-6-oo � l 4
REVIEWED AND APPROVED: INITIATED AND APPROVED:
&d 4'_
Exec utiv irector Director of Economic Development
2
J.:i 41-2000 R[sulutwns-Agcncy— Kolcdo Tar-Excmpt Ob::gatwn5
R[.s no-1063
12.8 00
Res. No. 317
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF HUNTINGTON BEACH ]
I, CONNIE BROCKWAY, Clerk of the Redevelopment
Agency of the City of Huntington Beach, California, DO HEREBY
CERTIFY that the foregoing resolution was duly adopted by the
Redevelopment Agency of the City of Huntington Beach at a regular
meeting of said Redevelopment Agency held on the 18th day of
December, 2000 and that it was so adopted by the following vote:
AYES: Green, Boardman, Cook, Julien Houchen, Garofalo,
Dettloff, Bauer
NOES: None
ABSENT: None
ABSTAIN: None
• Clerk of the Redevelopme Agency
of the City of Huntington Beach, CA
0 0
RCA ROUTING SHEET
INITIATING DEPARTMENT: Economic Development
SUBJECT: Approve An Owner Participation Loan Agreement With
Orange County Community Housing Corporation OCCHC
COUNCIL MEETING DATE: I December 18, 2000
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Not Applicable
Resolution (wlexhibits & legislative draft if applicable) Attached
Tract Map, Location Map and/or other Exhibits Attached
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attome ) Attached
Subleases, Third Party Agreements, etc.
(App roved as to form by Ci ty A Ham e Not Applicable
Certificates of Insurance (Approved by the City Attorney) Not Attached (Explain)
Financial Impact Statement Unbud et, over $5,000) Attached
Bonds If applicable) Not Applicable
Staff Report If applicable) Not Applicable
Commission, Board or Committee Report If applicable) Not Applicable
Findings/Conditions for Approval and/or Denial Not Applicable
EXPLANATION FOR MISSING ATTACHMENTS
The City's insurance requirements are requested to be temporarily waived until the close
of escrow. At that time, insurance certificates will be obtained and approved.
REVIEWED RETURNED FORWARDED
Administrative Staff [.
Assistant City Administrator Initia!
Ci Administrator Initial
City Clerk
EXPLANATION FOR RETURN OF ITEM:
Only)CR
(Below Space For City Clerk's Use
RCA Author: HOLTZ(5901)
LJ & CITY OF HUNTINGTON BEACH
JO
V" INTER-DEPARTMENT COMMUNICATION
MUN11W,T0N UAC„ Connie Brockway, City Clerk
Office of the City Clerk
Liz Ehring, Deputy City Clerk 11
To: _
DaW Meeting Date: Agenda Item:_
Proposed City Council Agenda Items: The City Clerk's Office/City Administrator's Office must return your
agenda item due to the following requirements that have not been met. When your Agenda Item is ready to
resubmit, please return to: Elaine Kuhnke, Management Assistant, Administration
1. Signature(s)Needed
A On RCA
B On Agreement
C Other
2. Attachments
A Missing
B Not identified
C Other
3. Exhibits
A Missing
B Not identified
C Other
a. Insurance Certificate(Proof Of Insurance)
A Not attached
B Not approved by City Attorney's Office
C Signed form notifying City Clerk that department will be responsible.for-obtaining-msurance certificate on this item (See form attached)
S. Wording On Request For Council Action(RCA)Unclear
A Recommended Action on RCA n_otcomplete
B Clarification needed on RCA
C Other
6. City Attorney Approval R uired ,O
7. Agreement Needs To Be Changed �..f
A Page No.
8. Other
G pvnaWmoctrraorm
•
REQUEST FOR LATE SUBMITTAL
(To accompany RCA's submitted after Deadline
Department: Economic Subject OCCHC OPA for 17412 Koledo Lane
Development
Council Meeting Date: Date of This Request: 12/11/00
12/18/00
REASON (Why is this RCA being submitted late?): The Loan Documents were being
reviewed in City Attorney's office.
EXPLANATION (Why is this RCA necessary to this agenda?): Escrow expires 12/29/00. If
approval is not granted at this meeting, we risk losing this affordable housing opportunity.
CONSEQUENCES (How shall delay of this RCA adversely impact the City?): Loss of deal.
Signature: 91-Approved 0 Denied
Department Head Ray Silver
City Administrator
nnmomant9 nVIA A
COUNCiL MEETING OF 4
�QRATTHE
OFFICE
CONNIE BROCKWAX CITY CLERK
Loan Agreement
with
Orange County
Community Housing
Corporation {OCCHC)
City of Huntington Beach
December 18, 2000
Agenda Item F2
Background
OCCHC will buy and rehabilitate a 5-
unit building in Oakview located near
Koledo Park at 17412 Koledo Lane
r OCCHC already owns 12 multifamily
buildings in Oakview (Eight of these are
in the Koledo Park area)
F Koledo Lane is a strategic area for
acquisition and rehabilitation projects
C�C�
•
Proposal
` OCCHC will buy a five-unit building
(all two-bedroom units) for $350,000
The Agency will provide $285,000 of Set
Aside & HOME funds to assist with
acquisition ($57,000 per unit)
OCCHC will obtain additional
conventional-lender financing of $150,000
OCCHC will spend $100,000 to
rehabilitate the property
Household Income Limits
All Tenants will be Very Low-Income
Household Size Median Income Very Low-Income
1 $48,700 $24,350
2 $55,700 $27,850
3 $62,600 I $31,300
4 $69.600 $34,800
5 $75200 $37,600
6 $80.700 $40,350
Affordable Rents
for 2 Bedroom Units
3 units will rent for $525 per month
2 units will rent for $650 per month
FE
Deal Points
Income and rent restrictions will remain
on both properties for at least 60 years
Loan repayment will begin in 3 years
Annual payments will be the lesser of:
• $1 ,200
• Half of project residual cash flow
Loan principal and 6% annual interest
must be repaid before affordability
restrictions go away �•,
Additional Loan Terms
During Rehabilitation
• OCCHC will provide tenant relocation
• Property will come into compliance with City Housing
Codes and Federal Housing Quality Standards
After Rehabilitation
• Tenants must be very low-income
• Rents must be affordable
. Maximum unit occupancy limits must be enforced
(5 persons per unit)
• The property must be well maintained [,;d Me
Addressing
Housing Needs
' Reduces overcrowded housing for
families with children
Reduces households overpaying for rent
Improves quality of affordable housing
stock through rehabilitation
Provides affordable rents for very low-
income working families
Recommended City Action
' Temporarily waive the City's insurance
requirements until the close of escrow.
This will allow the Agency to approve
the loan now.
Recommended
Agency Action
Approve a $285,00 loan agreement with OCCHC
for the acquisition and rehabilitation of 17412
Koledo Lane
Authorize the Agency Chairman and Clerk to
execute/record the loan agreement and all
attachments
Authorize the wire transfer of funds to escrow for
the property acquisition
Adopt Resolution No. 317, which would allow the
Agency to consider issuing future housing bonds for
this project ,..
�J
The End
EXHIBIT J
Subordination Agreement
[behind this page]
WHEN RECORDED RETURN TO:
C1W OF H
7
�Oarb `� occ� i
SUBORDINATION AGREEMENT
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER
PRIORITY 'THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENTS.
THIS SUBORDINATION AGREEMENT("Agreement") is entered into this 18thday of
December , 2000, by and among REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public agency, corporate and politic (the "Agency") ORANGE
COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit corporation
("Participant"); and Western Financial Bank ("Lender").
RECITALS:
A. Participant owns fee title to the real property described on Attachment No. "1"
(the "Property") attached hereto and incorporated herein by reference. The Agency and
Participant have entered into an Owner Participation Agreement dated as of r_.11L,
2000 (the "OPA"). Pursuant to the terms of the OPA, Participant has executed a Note in favor of
the Agency in the amount of TWO HUNDRED EIGHTY-FIVE THOUSAND DOLLARS
(S285,000.00) ("Agency Loan") to assist Participant in the acquisition of the Property as an
affordable housing complex. The Agency Loan is to be secured by a Subordinated Deed of Trust
With Assignment of Rents With Rider Attached encumbering the Property(the "Agency Deed of
Trust"). The OPA is hereby incorporated by reference as though fully set forth herein. All
capitalized terms not defined herein shall have the meanings ascribed to them in the OPA.
B. Agency and Participant have also entered into that certain Regulatory Agreement
and Declaration of Covenants and Restrictions recorded against the Property("Agency
Regulatory Agreement"), which Agency Regulatory Agreement contains, among other terms,
certain use restrictions affecting the Property.
1
Subordination Agreement
4-2000 Agree-OCCHC•Koledo
12:8-TO
C. Participant has obtained a loan from Lender in the amount of ONE HUNDRED
FIFTY THOUSAND DOLLARS (S150,000) (the "Lender Loan"). To repay the Lender Loan,
Participant has executed or is about to execute a deed of trust encumbering the Property to secure
a promissory note in the sum of the Lender Loan, payable upon the terms and conditions
described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). In
connection with the Lender Loan, Participant may also be required by Lender to execute a
regulatory agreement to be recorded against the Property, which may contain among other terms,
use restrictions affecting the Property(the "Lender Regulatory Agreement").
D. Lender is willing to make the Lender Loan provided the Lender Deed of Trust and
Lender Regulatory Agreement are a lien or charge upon the Property prior and superior to the
lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, and provided
that the Agency will specifically and unconditionally subordinate the lien or charge of the
Agency Deed of Trust and Agency Regulatory Agreement to the lien or charge of the Lender
Deed of Trust and the Lender Regulatory Agreement.
E. It is to the mutual benefit of the Lender Agency, and Participant that the Lender
make the Lender Loan to Participant-, and the Agency has agreed that the Lender Deed of Trust
and Lender Regulatory Agreement shall, when recorded, constitute a lien or charge upon the
Property which is unconditionally prior and superior to the lien or charge of the Agency Deed of
Trust and Agency Regulatory Agreement, subject to the specific terms and provisions of this
Subordination Agreement.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency,
Lender and Participant, and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby
declared, understood and agreed as follows:
1- Subordination by Agency
1.1 Subordination of Agency Deed of Trust and Agency Regulatory
A Trent to Lender Deed of Trust and Lender Regulatory Agreement. The Lender Deed of
Trust (and any renewals or extensions of, or advances, including interest, thereunder), and the
Lender Regulatory Agreement (and any amendments or modifications thereto) shall
unconditionally be and remain at all times a lien or charge on the Property, prior and superior to
(i) the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement, (ii) a]I
present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges
of Agency thereunder, provided that the Lender Deed of Trust does not exceed One Hundred
Fifty Thousand Dollars (5150,000.00)_
If Participant chooses to refinance the fender Loan, Agency agrees to subordinate
the Agency Deed of Trust and the A(Fency Regulatory Agreement to the refinancing Lender's
Deed of Trust under the same terms and conditions as set forth in this Agreement, on the
condition that the amount of the new loan is no greater than the original principal balance of the
Lender Loan.
z
Subordination Agreement
4-2000 Agree.OCCHC-Kolte!o
i z s.�oo
• 0 "
1.2 Covenants of Agency. The Agency declares, agrees and acknowledges
that:
(a) The Agency consents to all provisions of the Lender Note and the
Lender Deed of Trust, and (ii) all provisions of the Lender Regulatory Agreement.
(b) To Agency's actual knowledge, there is no breach, event of default
or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any
circumstances, event, omission or failure of condition which would constitute such a breach,
default or event of default after notice or lapse of time, or both.
2. Reliance by Lender and Agency. The Lender would not make the Lender
Loan and the Agency would not have agreed to subordinate the Agency Deed of Trust and
Agency Regulatory Agreement without this Subordination Agreement and each of the
undersigned understands that in reliance upon, and in consideration of, this waiver,
relinquishment and subordination, specific loans and advances are being and will be made and,
as part and parcel thereof, specific monetary and other obligations are being and will be entered
into which would not be made or entered into but for such reliance upon this waiver,
relinquishment and subordination.
3. Notice to Agency. In the event of a breach or default by Participant under the
terms of the Lender Deed of Trust, Lender shall provide the Agency with written notice of such
breach or default concurrently with providing such notice to Participant Upon receipt of such
notice of breach or default, the parties hereto agree that Agency shall have each of the following
rights so long as either the Agency Regulatory Agreement or the Agency Deed of Trust
encumber any portion of the Property or interest therein:
(a) To cure the noticed default at any time prior to the foreclosure of the
Lender Deed of Trust or any lien under the Lender Regulatory Agreement. In connection
therewith, the Lender agrees that (i) in the event of monetary default, the Lender shall not
foreclose Lender Deed of Trust or other lien prior to the date that is thirty(30) days after the date
that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in
the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or
other lien prior to the date specified above for monetary defaults; provided that if said
nonmonetary default is susceptible to being cured only when the Agency has obtained possess
ion of the Property, the Agency shall have as long as necessary to obtain possession of the
Property by either foreclosing the Agency Deed of Trust, and to cure the default, so long as the
Agency does so with reasonable and continuous diligence.
(b) To negotiate with the Lender regarding the noticed default at any time
prior to the foreclosure of the Lender Deed of Trust or other lien.
(c) To negotiate with the Participant to purchase the Property from
Participant, subject to the Lender Deed of Trust without the consent of the holder of the Lender
Deed of Trust or enforcing party under the Lender Regulatory Agreement.
3
Subordination Agreement
:•'000 Agrer OCCHC-Koledo
1'S'00
The Lender agrees that the exercise of any of the rights set forth in this Section by
Agency shall not give rise to any right on the part of the Lender to exercise any right to
accelerate the amounts due under the Lender Loan.
3.1 Foreclosure of Agency Deed of Trust. The Lender hereby agrees
that in the event that Agency forecloses the Agency Deed of Trust, said foreclosure shall not give
rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan.
3.2 Disbursements. Lender, in making disbursements of the proceeds of
the Lender Loan, is under no obligation or duty to,nor has Lender represented that it will, see to
the application of such proceeds by the person or persons to whom disbursements thereof are
made and any application or use of such proceeds for purposes other than those provided in the
documents evidencing and securing the Lender Loan shall not defeat the subordination herein
made in whole or in part.
4. Miscellaneous
4.1 Entire Agreement. This Subordination Agreement shall be the whole
and only agreement with regard to the matters set forth herein and shall supersede and cancel,
but only insofar as would affect the priority between the Lender Deed of Trust and Lender
Regulatory Agreement on the one hand, and the Agency Deed of Trust and Agency Regulatory
Agreement on the other hand, any prior agreement as to such subordination including, but not
limited to, those provisions, if any contained in the Agency Deed of"Crust and Agency
Regulatory Agreement, which provide for the subordination of the lien or charge thereof to
another deed or deeds of trust or to another mortgage or mortgages, upon the Property.
4.2 Successors and Assigns. This Subordination Agreement shall inure to
and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the
parties hereto.
4.3 California Law. This Subordination Agreement shall be construed
according to the laws of the State of California.
4.4 Severability. If any term, provision, condition or covenant of this
Agreement or the application thereof to any party or circumstances shall, to any extent, be held
invalid or unenforceable, the remainder of this instrument, or the application of such term,
provision, condition or covenant to persons or circumstances other than those as to whom or
which it is held invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
4.5 Notice. Any notice, demand, request, consent, approval or
communication that any party desires or is required to give to another party or any other person
must be in writing and may be given by (1) personal delivery, (ii) by courier service that provides
a receipt showing date and time of delivery, or(III) by registered or certified mail, return receipt
requested, postage prepaid. Notices shall be directed at the address of such party hereinafter set
forth, or such other address and to such other persons as the parties may hereafter designate.
4
Subordination Agreement
a-2000 Agrcc OCC'}{('-Kolcdo
12;K:00
i •
Any such notice shall be deemed given upon receipt if by personal delivery or courier service, or
if by mail the earlier or(x) actual receipt or(y) forth-eight (48) hours after deposit in the United
States mail.
If to Agency: Redevelopment Agency of the City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attention: Executive Director
If to Participant: Orange County Community Housing Corporation
1833 East 171h St., Suite 207
Santa Ana, CA 92705
Attention: Alien Baldwin, Executive Director
If to Lender: Western Financial Bank
4.6 Attorney's 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.
4.7 Counterparts. This Subordination Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall constitute one and the
same document.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN TIDE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS.
[end— signature pages follow]
5
Subordination Agreement
4-2000 Agree-0MIC•Koiedu
12/8 o0
"PARTICIPANT" "AGENCY"
ORANGE COUNTY COMMUNITY REDEVELOPMENT AGENCY OF THE
HOUSING CORPORATION, CITY OF HUNTINGTON BEACH
a California nonprofit corporation a pub c body, corporate and politic
-- a j4t�ll --
By: Clr an
Name: _ ATTEST:
Type or print
Its (circle one)
AND tr� r Agency Cler�1�
By: APPROVED AS TO FORM:
Name:
Type or print f9.1'v_ Pp,Agency General Counsel
Its(circle one)Secretary/Assistant Secretary/ C-� .�Nsv,
Chief Financial Officcrf
Assistant Treasurer
"LENDER"
Western Financial Bank
By:
Its:
G
Subordination Agreement
4-2000 Agree 0MIC-Kolcdo
12:M0
AL - •
CALIFORNIA
L PURPO�ACKNOWLEDGMENT
C,
Slate of
County of
On Z4V before me, % �,� H
�{ Date and Tnla or oecar to g Jana Doe.Notary Pubhe')
l personally appeared _ � 107Z7,e_S 2X
Name(s)o(SVvgs) }L
personally known to me— e to be the personQ� S
whose name( is/af&subscribed to the within instrument
and acknowledged to me that he/s; eay executed the
same in hisA%wA"r authorized capacity(iM),and that by
� his/h, ir signature(6)on the instrument the person(s4,��
CJUANnfon� ?d;LE1 t or the entity upon behalf of which the person(s) acted,
No;ay f'ut t_Cco executed the instrument.
County
• KVcorTrl'LavkmhlQ3t. 3 TNESS my hand and official seal.
Srynatdre of Notary Putkc
OPTIONAL
Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent
fraudulent removal and reattachment of this form to another document.
Description of Attached Document
r Title or Type of Docume
/. ,�� �
Document Date: Number of Pages:
l
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name�-� aL / � � �� Signer's Name:
i
r ❑ Individual r- Individuals
rS ❑ Corporate Officer L Corporate Officer Z
:
r T(tle(s): Title(s):
❑ Partner-- ❑ Limited ❑ General C Partner—I- Limited General
❑ Attorney-in-Fact ❑ Attorney-in-Fact
❑ Trustee ❑ Trustee '
hh. ❑ Guardian or Conservator MPANIA. ❑ Guardian or Conservator "thL,;.r-nt)
h
1: ❑ Other: Top of thurnb here ❑ Other: :S
r:
Signer Is Representing: Signer Is Representing:
��.'�:r•�,�.�..��,sz�'c:�:�:.�'�c��;�.�ryc��c��;ci�c�c:���4�;�c_•�;act:.�,c_<,�;��.��,�,�:�.�.��.�.�:.�.�a�
0 1995 vanonal Nc{ary Association•8236 Remma Ave..PO 8oi 7184•Canoga Part.CA 91309.7184 Proa.No 5907 Recroar Call Toll-Fiea 1.900.676-6a27
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
ss.
County of 4Z, " G
On A� /� z,od , before me, - S
Dave Nome"Tale o1 olrcer A 'Jane Doe.vo:a uw,c')
personally appeared &w &Xe., j�—��6&"le Ag rw
NamM!S)at spgge?(S)
9personally known to me
Ll proved to me on the basis of satisfactory
evidence
to be the person(s) whose name(s) islare
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
CHRLSTINE CLEMIlY signature(s) on the instrument the person(s), or
Comrnk%1on#)2XW78 the entity upon behalf of which the person(s)
N0fary Pubk'Cdkmlo acted, executed the instrument.
Orange County
WITNESS my hand and official seal.
h
?,3-0 NV-D y Seal Apo'! S.gnetu,e O:No'<lry Putg:_ - r
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document
Description of Attached Document
r
Title or Type of Document: ljsLL t _
Document Date_ �. Number of Pages' _4(0
Signer(s) Other Than Named Above: 1 1
Capacity(ies) ClairAed by Sign e r '
Signer's Name: � RE
_ r
Individual
-Cr,of.hjR,o ne:e
Corporate Officer—Tiile(s)- _
Li Partner— —_ Limited 0 General
LJ Attorney in Fact
I Trustee
LJ Guardian or Conservator
Other-
�i
Signer Is Representing
.� 1"�;�c"��X'•c_C�.�.til'.�.+'..c;�c��.���?�L�ic—��/�.f'.i. �`"�4i,C�.��C�t�,l'.�/1'<",���.�'t.Y�.��l'i:�'�.��.
O �UbM�NCV'Y wssoc++io•+•iI5"Ce Sc:o�.�.PO Bc.2402-Cftols oM GA 9,71J i-L2-�c+Lor&Y�h x9 Prx No 5907 P4ea CU TM T,",-00[676662,
ATTACHMENT 1
LEGAL DESCRIPTION OF SITE
LEGAL DESCRIPTION
OF THE PROPERTY COMMONLY KNOWN AS
17412 KOLEDO LANE, HUNTINGTON BEACH, CALIFORNIA 92647
.ALL THAT CERTAIN LAND SITUATED IN THE STATE Of CALIFOT.NIA,COUNTY OF ORANGE,CITY OF HUNTINGTON
BEACH,DESCRIED AS FOLLOWS
LOT 40 OF TRACT NO.4301, AS PER MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF
MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,TOGETHER
WITH THAT PORTION OF KOLEDO LANE ADJOINING SAID LOT 40 WESTERLY, AS ABANDONED BY
RESOLUTION NO. 5353 OF THE CI1`Y COUNCIL OF THE CITY OF HUNTINGTON BEACH, FEBRUARY
15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS, THAT WOULD PASS BY A
CONVEYANCE OF SAID LOT.
EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED
HEREIN, 13UT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND OR THE TOP 500
FEET THEREOF, FOR THE PURPOSE OF PRODUCrNTG WATER AS SET FORTH IN DEED TO CITY OF
HUNTINGTON BEACH,RECORDED IN BOOK 6511,PAGE 679 OF OFFICIAL RECORDS.
Project Deal roam:
ATTACHMENT #2
PROJECT DEAL POINTS
BY AND BETWEEN THE
CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY
AND ORANGE COUNTY COMMUNITY HOUSING CORPORATION
17412 KOLEDO LANE
"KOLEDO 5"
November 14, 2000
1. The Redevelopment Agency will provide $285,000 in HOME Investment
Partnership Program funds and/or Redevelopment Agency Housing Set Aside
funds as a loan to Orange County Community Housing Corporation (OCCHC).
The Agency's loan funds will be used to acquire a multifamily rental-housing
property located at 17412 Koledo Lane in the Oakview Neighborhood.
2. There will be an annual 3% interest charge applied to the outstanding loan
balance during the term of the loan agreement_
3. For a period not less than 60 years, all 5 units in the properties will be subject to
tenant household income and rent affordability restrictions as provided in the
following schedule:
No. of Bedroom Maximum Tenant
Units Size Income Maximum Rent
1 2 BR Very Low-Income 30% of the tenant's monthly adjusted
income
Low HOME Rent (30% X 50% of the
4 2 BR Very Low-Income monthly income of the Orange County
3 person household median income)
4. To verify that tenant households meet the above income restrictions, OCCHC
will maintain records that clearly document tenant eligibility. These records will
be updated at least annually and will be maintained for a period not less than
three years. Verification of tenant income will be performed in compliance with
the Agency's Housing Rehabilitation Loan Program Policies and Procedures.
If a tenant household's gross income increases and thus the household no
longer qualifies for residency in the restricted unit, that family will be given 90
days to relocate. Should a tenant face extraordinary hardship satisfying this
requirement, a written appeal may be submitted to the Agency. Upon receipt of
a written appeal and at the sole discretion of the Director of Economic
Development, this period may be extended for a period not to exceed 90
additional days.
5. The above maximum allowable rents are in accordance with HOME program
regulations for very low-income households. These rents will be adjusted
annually upon receipt of updated federal department of Housing and Urban
Page 1 of 4
Development (HUD) income and rent standards. All tenant paid utilities must be
subtracted from the maximum allowable rents for the project.
6. The maximum number of persons in a household that may occupy a single
residential unit may not exceed five people in a two-bedroom unit. It will be the
responsibility of OCCHC to enforce this occupancy limit.
7. OCCHC may obtain conventional lender financing in an amount not to exceed
$150,000, which together with $285,000 of the Agency's loan can used for
property acquisition and rehabilitation expenses. The conventional lender
financing may be secured in first position, with the Agency's loan secured in
second position.
8. In the event OCCHC wishes to refinance the original first lien, the Agency will
have authority to approve or deny such request. Approval of such a request
shall not be unreasonably withheld. All equity withdrawn from the property
through a refinance must be reinvested as physical upgrades to the property.
9. OCCHC will inspect the properties for lead-paint hazards in accordance with
Title X of the 1992 Housing and Community Development Act. Any lead-paint
hazards identified must be abated as part of the rehabilitation process. Should
lead-paint hazards be found, OCCHC may request rehabilitation loan funds from
the Agency. Authority to approve a requested loan increase shall rest solely
with the Agency's Board of Directors only upon the recommendation of the
Director of Economic Development and Executive Director.
10. OCCHC will maintain the properties in compliance with HUD Housing Quality
Standards along with City and State laws and codes. The Agency may perform
inspections of the property to ensure compliance with this requirement. Should
OCCHC fail to adequately maintain the property, any deficiencies identified by
the Agency must be addressed within 30 days.
11. OCCHC will establish an operating reserve at a sufficient level to fund repairs
and improvements to the properties so as to ensure that the buildings remain in
compliance with HUD Housing Quality Standards along with City and State laws
and codes. It is expected that OCCHC will invest at least $150 per unit per year
into the operating reserves, as cash flow is available. As capital repairs become
necessary, all expenses must be paid first through operating reserves then from
cash flow.
12. Each year during the term of the loan, OCCHC will provide the Agency with
copies of the audited financial statements of OCCHC along with financial
statements of the project. These financial statements must clearly show the
status of the project's operating reserve account and cash flow. Upon review of
the financial statements, the Agency may at its option perform a comprehensive
review of appropriate records to verify the accuracy of such records.
13. At the end of each year while income and affordability restrictions apply to the
project, OCCHC will provide the Agency with copies of monthly rent records and
tenant eligibility certifications. Upon review of such records, the Agency may at
its option perform an audit of tenant files to verify compliance with income and
affordability requirements.
Page 2 of 4
14. If OCCHC repays the Agency loan within two years from the date of the loan
agreement, there will be a prepayment penalty of 25% of the original principal
balance. OCCHC may repay the loan in full with no penalties assessed at any
time after two years. Early repayment of the Agency loan will not relieve
OCCHC from the 60-year income and affordability restriction on the properties.
15. At the beginning of the third year of the loan agreement, and continuing for the
duration of the agreement, OCCHC will make annual payments to the Agency.
Such payments will be the lesser of: (a) fifty percent (50%) of the project's end-
of-year cash balance or (b) $1,200. After the 601h year of the loan agreement,
should OCCHC elect to terminate the project's income and affordability
restrictions, all remaining unpaid principal and interested on the Agency's loan
will be due; however, the unpaid balance of the loan will not require repayment
and will not accrue further interest charges for whatever period OCCHC
maintains the income and affordability restrictions on the properties.
16. OCCHC must agree to indemnify the Agency against any relocation obligations
and expenses that may arise during the term of the loan agreement. If
relocation is required, OCCHC must submit a relocation plan to the Agency prior
to the removal of any tenants from the property. The plan must include the
following for each affected household: name, gender, age, ethnicity, household
size, income, and relocation cost. In addition, OCCHC must comply with all
obligations under the Uniform Relocation Act. This relocation requirement does
not apply to tenants required to move due to an increase in household income_
In such instances, because such households would no longer qualify for
residency in an affordable unit, the law does not require relocation assistance_
17. OCCHC will provide adequate insurance to protect the Agency from loss due to
fire or other standard property hazards. Both properties must be insured for an
amount equal to the Agency's loan amount, including any senior encumbrances.
The Agency must be designated on such insurance as an additional loss payee.
The properties are not located in a designated 100-year flood zone, so flood
insurance coverage will not be required.
18. OCCHC will comply with all federal, state, and local nondiscrimination, fair
housing, and equal opportunity requirements. In addition, OCCHC will conduct
affirmative marketing and minority outreach activities as required by HOME
regulations.
19. The Agency will have a first right of refusal to purchase the property should
OCCHC choose to sell the property. The Agency must be given written notice of
an intent to sell the property, upon receipt of such written notice, the Agency will
have 90 days to exercise its option. Should the Agency elect not to exercise this
option, it will have the right to approve any buyer of the property. Under this
scenario, OCCHC will agree to make every reasonable effort to sell the property
to another nonprofit affordable housing organization with similar experience and
qualifications managing properties with income and affordability restrictions.
20_ Should the Agency determine that OCCHC has been in continuous default of the
loan agreement for 60 days or has been notified by the Agency of default on
three separate occasions, the full loan amount including all interest will become
Page 3 of 4
immediately due. The Agency may assume ownership and management of the
subject property in the event OCCHC is unable to cure a default.
21. OCCHC will be responsible for paying all legal costs associated with enforcing
the loan agreement.
Page 4 of 4
Resolution Number 317 , A Resolution of the Redevelopment
Agency of the City of Huntington Beach Declaring Intention to
Reimburse Expenditures from the Proceeds of Tax-Exempt
Obligations and Directing Certain Actions
• i
EXHIBIT I
Project Budget/Pro Donna
(to be inserted)
[behind this page]
• Sheetl •
Koledo Lame I I opmtng
--- } Budget j 1011 0 I j
ccou.nt units p Pled Lile Per 2000 20011 2002
Number Descnp11on Cost Span I type
1 Month Annuai
1,000 Floor Covering 8.100 7 years reserves 60 720 _ 749 779
2.000 Mecha'1ical reserves 55 660 68$ 714
3.000 Screens 3 years -eserves '5 180 187 _195
4.000 Painting 2 years reserves 58 696 724 753
5.000 Landscape a r e reserves 25 300 312 324
6-000 Draperies 5 years reserves 10 120 ..,. 125 130
7.004RESERvES
Paving concrete reserves 890 94 97
7,10Roofing 25years reserves 13 1501. 156 162
OPERATING COSTS I I
5.40 Property Tax exempt semi an ope.ng cos 21 252 257 _ 262
5.500 Insurance monthly oprtng cos s0 1.080 1,123 ; 1.168
58-1 water as pilled oprtng cas 90 1.080 1,123 , 1.168
58-2 Gas as blued oprtno cos 70 840 674 909
58-3 Elecir;ci;y as brl'ed oprtng Cos 55 660 686 714
58-4 TrashtSewer month'y oprtng Cos 125 1.500 1,530 1,622
1000 Landscape POA mor.thy oortnq cos 150 1,800 1.872 ' 1.947
2000 Maintenance Staff as billed oprtnc Cos 255 2,820 2.933 3.050
4000 MISC Repair as billed oprtng cos 125 1.500 1.560 1.522
4500 AudrULegal/Bookkeeoing as bated oprng Cos 60 720 749 - 779
5000 Carpet Clean as billed oprtng cos 20 240 250 250
o"I ledge OCCHC Mgmnt ledger oprtng cos 250 3.00 3.120 !, 3.245
6000 Marketing as billed oprtng cos 24 265 300
j Expenses _ __ 1,558 18.696 l 19.439 20.211
rsrvs per monin 243 ] Gross Irco!ne 2.875 1 34.500 1 35 535 1 36.601
I I rsrvs per in,t i 3038 ; Net Operating Inc 1.317 15 804 1 16.096 ?6 390
-. . . mo-iy 7000 2001 1 2002
20101 ist TD, consor!iu 1 '50.000 ! 'is-,TD ' .1 1.207 14 483 ; 14.483 14.483
22001 2nd TO HOME 1_ 285.000 1 1 and TD 1 100 1.200 ; 1.200 1.200
- 2205 OCCHC Equity 15.000 1 ; 220 j 2,642 2.642 I 2,642
22101 4th TD.AHP
--In 000I ) (2.229)
1 Laundry 40 - 480 485 490
Loan 150.000 Cash Flow; (170) (2.041) (1,744)i (1,445)
Int Rate 9 0°/o Loar j 30,000
Amort - 3b0 IN Rate 8.0%
Pm'.Am 1.207 1.09 debt svc Amort 360
- - - Pmt Amt 220
type unds- I rent to`.al -j' 1 1 * 600
2 bedroom 3 525 1.575 50%=76 1
2 bedroom 2 650 1.300
5 vG1Cy 5% net rent
total rent 2.875 144 2.731
10/17/00 K5RES-xls
K5 Project 17-Oct•00 16I11
original rautsed paid balance to per unit
estimate estimate to date be paid cost
2020 CIVIL-on site 0 0 0 0
2030 SOILS ENG on site 0 0 0 0
20ED IDEMMITE PREP 0 0 0 0
2055 ITEMP FENCING 0 C 0 C
2055 JTEAAP POWER 0 0 0 G
2060 ITEMP OFFITOILET 0 0 0 0
20E5 'IMPORTIEXPORT 0 0 0 0
2C?C- GRADEISTAKE G 0 0 0
2100 FLATWORK 1500 15-30 ( 1500 30C
' 2110 DRIVESICUR65 0 0 0 0
2120 STRIPUSIGN 0 01 01 0
2140 DRAINAGE SYSTEM C. G• C 0
2200 UTILITY TRENCH 0 0' 0 0
2210 SEWER TO BLDG 0 0 0 0
222D WATER TO BLDG 0 0 0 0
2230 ELIPHNICABLE TO BLDG 0 0 0 0
2240 TRASH ENCLOSURES 500 500 500 100
2331 EXT LIGHT FIXTURES 500 500 500 100
400 EXT WROUGHT IRON 500 500 500 100
E244C
410 BLOCKWORK 1000 1000 10001 200
FINISH GRADING 0 0 0 0
450 LAYDSCAPING 500 500 500 100
246-3 PLAYGROUND.ETC 0 0 0 0
4500 4`.JD 0 4500 90C
3100 1GENERAL CONTRACTOR 0 01 O 0
3200 1SUPERINTENDANT 0 01 0
3300 iREIMBURSEABLES 0 0 0 0
0 0 0 0 G
4100 LOAN FEESIPTS 01 0 0 0
4200 LOAN ESCROW 0 0 0 0
4300 APPRAISAL 1000 000 1000 200
4400 CNSTR INTEREST 0 0 0 0
4500 JINSURANCE Gi 0 0 0
4600 PROPERTYTAXES 0, 01 0 0
1000 1000 0 1C00 200
17-Oct•00 110117
original roulsad paid be lance to per unit
K5 P,qett DESCRIPTION estimate esti>nats to date be pold cost
loci FOUNDATIONISLAB 0 0 0 0
--012 LGTWT CONCRETE 0 0 0 0
107C FRAMINGITURNKEY 0 0 D 0
1012 ROOF TRUSSES 0 0 0 0
1075 FINISH CARPNTRY 10000 10000 10000 2000
11C0 INSULATION 0 0 0 0
1120 SIDING 1000 1000 1000 200
1130 PLUMBING 5000 5000 5000 1600
1135 FIRE SPNKLRS 0 0 0 0
1 i36 FIRE METERS C 0 0 0
1137 FIRE ALARMS 0 0 0 0
1140 HEATING 5003 5000 5000 1000
1150 ISHEE7 METAL 0 D 0 0
1160 WTRPRF DECKS 500 500 500 100
1170 ROOFING 5300 5000 50001 1000
1180 STUCCO 2500 25DO 2500 500
1190 RAINGUTTERS 5001 500 500 100
200 DRYWALL 5000 5G00 5000 1Doc
123C ELECTRICAL 2500 2500 , 25C0 5CG
1231 ELEC FIXTURES 1000 1000 1000 200
1232 T%f&PHONE HKUP 1000 1000 1000 200
1240 LUM CEILINGS 1000 1000 1000 200
1250 ALUM WNDWSIDOORS 1003 I000 1000 200
1270 GARAGE DOORS 1000 1000 1000 200
1300 CABINETS 10000 10000 10000 2000
1330 IRONWORKISTAIRS 2000- 2000 2000 400
1350 IRONWORKIHNDRAILS 2000 2000 2000 4130
1370 FOR MICAIM AREILE 2000 2000 2000 400
1380 COUNTER TILE 0 0 0 0
1390 PAINTING 5000 5D00 5G00 1000
1400 ISKYLIGH7S 0 0 0 0
i430 APPLIANCES 2500 2500 2500 5D0
1450 FLOOR COVERING 10000 10000 10000 2000
1480 CNSTR CLEAN UP 2000 21300 2C00 400
1500 MAILBOXES 200 200 200 40
1510 MED CABINETS 500 500 EDO 100
152D ARCH HARDWARE 500 500 500 100
1530 MIRRORS 500 530 500 10C
1550 SCREEN DOORS 500 500 5CD 100
1570 1ORAPESiMiNis 12001 12001 1200 240
80900 80900 0 8050G 16180
its Project 77-or.-00 1101,7
17412 Kolede Lane.II.Beach 92641 original revised paid belanct to Per unit
estimate elitimate to date he paid cost
BUILDING COSTS 809001 80900 61 8090D 15180
SITE DEVELOPMENT 4500 4500 01 4500 900
GENERAL CONTRACTOR 0 D 0 0 0
LAND COSTS 350000 350000 0 0 70000
FINANCE COSTS 000 1000 C 1000 200
PREDEVELOPMENT 13600 13600 0 0 2720
TOTAL PROJECT COST 4500001 450000 0 864DOI 90000
AMOUNT TO FINANCE . . . . . A50000
Citicorp PRIMARY FINANCING . . . . . . . . . 150000
City of H.Beach SECONDARY FINANCING 285000
SECONDARY FINANCING . . . . . . . 0
OCCHC GRANT . . . . . . . 15000
OCCHC EQUITY . . - . . . . . 0
0 ]
571'3 ARCHITECT 0 D 0 D
9015 CIVIL ENGINEER. 0 G Q 0
9020 STRCTRLENGINEER 0 0 0 0
9025 SOILS ENGINEER 0 0 0 0
9030 MECH ENGINEER 0 0 0 0
9035 ENERGY CALCS 0 0 0 0
4 9037 ASBILEAO REPORT 2000 2000 2000 400
904) SOUND CALCS 0 0 0 0
9045 LNOSCP ARCHITECT 0 0 0 0
9050 BLUEPRINTS 500 500 500 100
9060 JIMPACT FEES 0 0 0 0
9065 PERMIT FEES 1100 1100 1100 229
5055 JUTILITY EXTENSION 01 0 0 0
9D70 JOCCHC CONTINGENCY 100001 10000 100001 2D00
13630 13500 0 2720
� i -
2.2 Facilities. 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.
2.3 Residential Use. None of the Units in the Project will at any time be
utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house,
sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park
without the Agency's prior written consent.
2.4. Maximum Occu anc The maximum number of persons in a
household that may occupy any of the two-bedroom Units may not exceed five persons.
2.5 Conversion of Units. No part of the Project will at any time be owned by
a cooperative housing corporation nor shall the Participant take any steps in connection with the
conversion to such ownership or uses to condominiums, or to any other form of ownership,
without the prior written approval of Agency.
2.6 Preference to Eligible Tenants. All of the Units will be made
available for rental in accordance with the terms of this Agreement, and the Participant shall not
give preference to any particular class or group in renting the Units in the Project, except to the
extent that the Units are required to be leased or rented to Eligible Tenants and except as
provided in Section 3.3 below.
2.7 Liability of Participant. Participant and the management agent shall
not incur any liability under this Agreement as a result of fraud or negligent or intentional
misrepresentation by a tenant.
3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Participant hereby
represents, warrants, and covenants as follows:
3.1 Income Restrictions. Except as expressly provided herein, throughout the
term of this Agreement, the five (5) Units shall be rented only to Eligible Very Low Income
Tenants. All five (5) Units shall be rented at rates not to exceed "very low income" rent as
defined by California Health & Safety Code Section 50053 and the HOME Program (24 C.F.R.
92.252).
3.2 Rental Rates. Participant shall rent the Units in accordance with the
following rental rates, adjusted to subtract the amount of any tenant paid utilities:
a. One (1) of the Units shall be rented to Eligible Tenants at thirty
percent (30%) of such Eligible Tenant's monthly adjusted income;
b. Four(4) of the Units shall be rented to eligible tenants at 30% x
50%of the monthly income of the Orange County Median Income for three-person households.
3
Regulatory Agreement
s s-4.2000 Agrcc OCCHC-Kolcdo kcgulwory
RLS 00-1063
12;8 00
The rental rates for the Units shall be adjusted annually based upon current
updates of HUD income and rent standards. In no event shall any of the Units be rented at a rate
greater than the Affordable Rent applicable to the particular Unit.
3.3 Occupancy By Eligible Tenant. A Unit occupied by an Eligible
Tenant at the time of this Agreement shall be treated as occupied by an Eligible Tenant until
such Unit is vacated. A Unit previously occupied by an Eligible Tenant and then vacated shall
be considered occupied by an Eligible Tenant until reoccupied.
If at any time a tenant's household income increases, resulting in
disqualification of such tenant as an Eligible Very Low Income Tenant, such tenant shall have a
period of ninety(90) days to relocate from the Site. The disqualified tenant shall be fully
responsible for the costs and expenses related to the relocation. Should such tenant face
extraordinary hardship in relocating from the Site, the tenant may submit a written appeal to the
Agency requesting an extension of the time period within which the tenant must relocate. Upon
receipt of the written appeal, the Agency Director of Economic Development in his sole
discretion may extent the relocation period for up to a maximum of ninety (90) additional days.
3.4 Income Computation. Immediately prior to a prospective Fligible
Tenant's occupancy of a Unit, Participant shall obtain and maintain on file an income
computation and certification form from each such prospective Eligible Tenant dated
immediately prior to the date of initial occupancy in a Unit by such prospective Eligible Tenant.
Participant shall use its best efforts to verify that the income information provided by an
applicant is accurate by following the Agency Housing Rehabilitation Loan Program 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; (]III) 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. Participant shall update the foregoing records annually and shall
provide copies of updated tenant eligibility records and monthly rental records to Agency for
review. Upon a review of such records, Agency may at its option perform an independent audit
of the tenant eligibility records and monthly rental records to Agency for review. Upon review
of such records, Agency 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. Participant shall retain the records described in this Section for a period of three years
after the date the respective records were created.
3.5 Rental Priority. Tenants living in the Project prior to Participant's
rehabilitation of the Units as contemplated by the OPA ("Initial Rehabilitation") who are Eligible
Tenants meeting the income restrictions of the Units as set forth in Section 3.1 shall be given
first priority in re-leasing Units in the Project following completion of the Initial Rehabilitation.
Except as set forth above, Units shall be rented to Eligible Tenants on a first-come, first-served
basis; provided, however, that Participant may, in Participant's sole discretion, maintain an
4
Regulatory Agreement
-�15:4-2000 Agrce:O C1K--Ko!cdu Rup.-Wory.
R!S 00-1063
1?1g100
M
"interest list" or"eligibility list" of potential tenants; provided, however, that Participant shall
not be liable to Agency or any person, firm, or entity in the event a Unit is rented to a person
who is not on any such list or is on such list but is listed lower than another person on such list.
3.6 Renting Vacant Units. When a Unit becomes available as a result of a
tenant vacation, Participant shall rent the Unit to an Eligible Tenant in accordance with the
following procedure:
(a) First, Participant shall rent the Unit to persons who have been
displaced by Agency activities, pursuant to California Health & Safety Code Section 33411.3,
provided that Agency provides Participant with reasonable notice.
(b) Second, Participant shall rent any vacant Unit in the order of
priority as set forth in Section 3.5.
3.7 Maintenance of Records. Participant shall maintain complete and
accurate records pertaining to the Units, and shall permit any duly authorized representative of
the Agency to inspect the books and records of Participant pertaining to the Project including,
but not limited to, those records pertaining to tenant eligibility and occupancy of the Units.
Records pertaining to the Project and Units shall be retained for a period of five (5) years after
the termination of this Agreement; records pertaining to tenant and eligibility shall be retained
for the period set forth in Section 3.5.
38 Reliance on Tenant Representations: Each tenant lease shall contain a
provision to the effect that Participant has relied on the income certification and supporting
information supplied by the tenant in determining qualification for occupancy of a Unit, and that
any material misstatement in such certification (whether or not intentional) will be cause for
immediate termination of such lease-
3-9 Conflicts. The rental priority provision set forth in Section 3.6 shall
apply only in the event, and 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 recorded in superior
pnonty to this Agreement.
4. MArNL TENANCE
4.1 Maintenance Covenant. Participant agrees to maintain all interior
and extenor improvements, including landscaping, on the Site 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, Participant shall keep the Site free from all graffiti and any accumulation
of debris or waste material_ Participant 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 approved materials. The
5
Rcplatory Agreement
s!s 4-2000:agree:C COW-Kolcdo:Regulwory
RLS 00-1063
12.8100
maintenance covenant contained in this Section shall remain in effect for the term of this
Agreement.
4.2 Agency Rights. Agency shall have the right to enter upon the Site to
inspect both the interiors and exteriors of the Site, upon seventy-two (72) hours notice to
Participant. Agency may perform or cause to be formed the maintenance necessary to cure any
default of these maintenance covenants and participant shall be liable for payment to Agency for
Agency's reasonable costs (excluding staff salaries and overhead and other similar costs) to
perform such required maintenance; provided, however, that Participant first be given written
notice by Agency of the actions required to cure any default, and Participant, after receipt of such
notice, shall have sixty(60) days to cure such defaults, but Participant shall not be deemed in
default of the foregoing maintenance covenant if such default cannot reasonably be cured within
the sixty (60) day period referenced above so long as Participant has commenced to cure such
default within the same sixty(60) day period and is diligently proceeding with the work to cure
such default. Notwithstanding the foregoing, if any property conditions are reasonably identified
by Agency after a property inspection attended by a representative of Participant that pose an
immediate danger to life or limb, Participant shall have three (3) days to effect corrections of
such condition(s) to Agency's reasonable satisfaction.
4.3 Annual Report. Participant covenants and agrees to submit to the
Agency an annual report (the "Annual Report") required by California Health & Safety Code
Section 33418. The Annual Report shall include for each 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 the audited financial statements described in Section 5.11 of the OPA. The income
information shall be supplied by the tenant in a certified statement on a form provided by the
Agency. The Participant shall submit the Annual Report on or before the end of the first
calendar quarter of the year following, the year covered by the Annual Report. The Participant
shall provide for the submission of such information in its leases with tenants. Agency shall not
charge Participant a fee for reviewing the Annual Report, or for Agency's or Participant's
compliance with Health & Safety Cocle $ 33418.
4.4 Management Plan- Participant shall prepare, submit to Agency
Executive Director within Sixty (60) days of recordation of this Agreement and maintain in
effect a management plan in accordance with the following ("Management Plan"):
(a) The Management Plan, including such amendments as may be
approved in writing by the Agency, shall remain in effect for the term of this Agreement.
Participant shall not amend the Management Plan or any of its components without the prior
written consent of the Agency. The components of the Management Plan shall include:
(1) Management Agent. The name and qualifications of the
proposed management agent. The Agency 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 Project.
6
Regulatory Agreement
ars a-2000 Agrce OCCHC-Koicdo Regulatory
RIS 00•1063
2/R%00
(2) Management Program. A description of the proposed
management, maintenance, tenant selection and occupancy policies and procedures for the 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 Participant and management agent.
(4) Tenant Lease or Rental Agregment. A copy of the
proposed tenant lease or rental agreement to be used in renting the Units.
(5) Annual Operating Budget. Prior to the completion of
construction and annually thereafter not later than fifteen (15) days prior to the beginning of the
next fiscal year of the Project, Participant shall submit a projected operating budget to the
Agency Executive Director for review and approval.
The Agency shall not unreasonably withhold,condition or delay its
approval of any matter for which its approval is required hereunder, and such matter shall be
deemed approved unless the Agency provides to Participant its written disapproval within thirty
(30) days after receipt of a request for approval, provided Participant includes with its request, a
written notice, in capital letters, stating as follows:
NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH AND ORANGE COUNTY
COMMUNITY HOUSING CORPORATION, FAILURE BY THE
AGENCY TO APPROVE OR DISAPPROVE THE MATTER
SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE
DEEMED AN APPROVAL.
Any disapproval shall be in writing and contain the Agency's reasons for
disapproval.
(b) Participant hereby covenants and agrees the Agency shall have the
right, at any time and from time to time, to give notice to Participant if the Agency determines
that the Project is not being managed or maintained in accordance %vith the Management Plan.
The Agency may require the Participant to change management practices or to terminate the
management agent and retain a different management ascent, approved by the Agency. The
Agency agrees that prior to requiring the Participant to change its management agent or the
management practices the Agency shall informally consult with Participant, in an attempt to
resolve the dispute. If the Agency determines that such an attempt at informal resolution has
been unsuccessful, it shall give the Participant thirty (30) days written notice to change the
management agent or practice, as the case may be. If Participant fails to do as requested by the
Agency in the written notice, the Agency may then require the immediate change of the
management practice or agent, as the case may be. "rhe management agreement shall provide
that it is subject to termination by the Participant without penalty, upon thirty(30) days prior
x%ritten notice, as the direction of the Agency. Within ten (10) days following a direction of the
7
Regulatory Agreement
-Vi -'WU A_TCC OCCHC-Kolcdo ReguIxorV
RLS 00-1063
II\00
race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national
origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
(a) In Deeds: "The grantee herein covenants by and for himself,
his heirs, executors, administrators and assigns, and a]I persons claiming under or through him,
that there shall be no discrimination against or segregation of, any persons or group of persons
on account of race, color, creed, age, class, income, religion, sex, sexual orientation, marital
status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming
under or through him, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants
shall run with the land.
(b) In Leases: "The lessee herein covenants by and for himself, his
heirs, executors, administrators and assigns, and all persons claiming under or through him, and
this lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person
or group of persons, on account of race, color, creed, age, class, income, religion, sex, sexual
orientation, marital status, national origin or ancestry in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any
person claiming under or through him, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy,
of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased.
(c) In Contracts: "There shall be no discrimination against or
segregation of any person, or group of persons on account of race, color, creed, age, class,
income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee
himself or any person claiming under or through him, establish or permit any such practice or
practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or
vendees of the land."
7. COVENANTS TO RUN WITH THE LAND Participant hereby subjects
the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and
Participant 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 Participant's successors in title to the Site; provided, however, that on the termination
of this Agreement said covenants, reservations and restrictions shall expire, except the
nondiscrimination covenants contained in Section 6 and Section 6.1 shall remain in perpetuity.
All covenants without regard to technical classification or designation shall be binding for the
benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of
this Agreement, without regard to whether the Agency is or remains an owner of any land or
interest therein to which such covenants relate.
9
Regulatory Agreement
4's:-1_2000 Agree:OCCHC-KolOE) Regul3lory
RIS 00.1003
1218io0
Agency to replace the management agent, the Participant shall select another management agent
or make other arrangements satisfactory to the Agency for continuing management of the
Project. The Participant shall notify the Agency upon leaning that there is a voluntary change in
the management or control of the management agent, and, if the change is unsatisfactory to the
Agency, the Agency shall be entitled to require the Participant to change the management agent
in accordance with the terms of this paragraph.
5. ENFORCEMENT. In the event Participant defaults in the performance or
observance of any covenant, agreement or obligation of Participant pursuant to this Agreement,
and if such default remains uncured for a period of sixty(60) days after written notice thereof(or
such longer period as may apply to the specific alleged default) shall have been given by
Agency, or, in the event said default cannot be cured within said time period, Participant has
failed to commence to cure such default within said sixty(60) days and diligently prosecute said
cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder,
and, at its option, may take one or more of the following steps:
(a) By mandamus or other suit, action or proceeding at law or in equity,
require Participant to perform its obligations and covenants hereunder or enjoin any acts or
things which may be unlawful or in violation of this Agreement; or
(b) Take such other action at Iaw or in equity as may appear necessary or
desirable to enforce the obligations, covenants and agreements of participant hereunder,
including foreclosure pursuant to the OPA.
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
remcdies for the same default or any other default by another party.
6. NONDISCRIMINATION. There shall be no discrimination against or
segregation of any person, or group of persons, on account of race, color, creed, age, class,
income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, or
in the awarding of contracts for the Project, nor shall participant, or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the Site, or any part thereof, or in the awarding of contracts
for the Project (except as permitted by this Agreement).
Participant shall comply with all applicable federal, state and local
nondiscrimination, fair housing, and equal opportunity requirements. In addition, Participant
shall conduct affirmative marketing and minority outreach activities as required by federal
regulations.
6.1 Form of Nondiscrimination and Nonse�reation Clauses. The
Participant shall refrain from restricting the rental, sale or lease of the property on the basis of
8
Regulatory Agreement
a/s 4-3000 Agree OCCHC-Kuledo Regulawry
RLS 00-1063
12'R00
8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an
action against the other party hereto by reason of the breach of any covenant in this Agreement,
or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to
recover from the other reasonable attorneys' fees and costs. Attorneys' fees shall include
attorneys' fees on any appeal, and in addition a party entitled to attorneys' fees shall be entitled
to all other reasonable costs for investigating such action, including the conducting of discovery,
and expert witness fees.
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 real
property records of the County of Orange.
10. NOTICE. 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(Ili) certified or registered mail, postage prepaid, return receipt
requested, at the addresses specified below, or at such other addresses as maybe specified in
writing by the parties hereto:
Agency: Redevelopment Agency of the City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Clerk
Participant: Orange County Community Housing Corporation
1833 East 17'h Street, Suite 207
Santa Ana, CA 92705
Attn: 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. SEVL•RABILITY/WAIVER/1NTEGRATION.
11.1 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.
11.2 Waiver. A 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 party in
exercising any remedy or right be considered a waiver of, or an estoppel against, the later
exercise of such remedy or right.
10
Regulatory Agreement
4A 4-2000 Agree 000W-Koledo ReeuI31ory
RLS 00-1063
1218i(K)
11.3 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 laws of the State
of California.
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.
14. SUBORDINATION. This Agreement shall be junior and subordinate to the
liens of the deeds of trust identified in the OPA as the Conventional Lender's deed(s) of trust,
and such other and further documents, including regulatory agreements, as such Ienders may
require, not to exceed ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) in debt.
If, from time to time and at one or more times, Participant chooses to refinance the loan secured
by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this
Agreement to the refinancing lender's deed of trust under the same terms and conditions as set
forth herein on the condition that the amount of the new loan is no greater than the original
principal balance of the refinanced note. Agency agrees to execute such subordination
agreements as may be required to effect the priority set forth in this Section.
IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory
Agreement and declaration of Covenants and Restrictions by duly authorized representatives on
the date first written hereinabove.
[end - signature page follows]
11
Regulatory Agreement
4-2000 Aggee 0MIC-Koledo Regulatory
Res 00•1063
12 S:00
"PARTIC[PANT" "AGENCY"
ORANGE COUNTY COMMUNITY REDEVELOPMENT AGENCY OF
HOUSING CORPORATION THE CITY OF HUNTINGTON
a California nonprofit corporation BEACH, a public body corporate
and politic
« r
By:
��)`� Chairm
Name: � +V
Type or print ATTEST:
Its (circle one)Chairmar0residentNice President
AND Agency Clerk� 7
� U
By:
APPROVED AS TO FORM:
Name:
Type or print ..Agency Genefal Counsel
Its(circle one) Secretary!Assistant Secretary/ `"'
Chief Financial Officer/ ( "1
Assistant Treasurer
12
Regulatory Agreement
ar%:-_OOoAgrccOCCIW-Koledo Rcgulatory
RLS M-1063
12.'8VV
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of
Countyof
/
O before m , ?�
DDatee
�� Name uns o!Off�cao(a q..'Jame Doe.NY.ary PuE1C-)
personally appeared
Name(O o1 S."r(s)
personally known to me- ce to be the person(s)
whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/may executed the
same in his/haL#Aeir authorized capacity(iQ&), and that by
JUANfU1 HOUNSLE'l his/fte Heir signature(9) on the instrument the person(*,Commis ors 121215t or the entity upon behalf of which the person(L) acted,
y N0 executed the instrument.
Ormige County
My CarrYn tv1GT 31.�703
ITNESS my hand and official seal.
hh Signature of N^cary Pubk
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons retying on rho document and could prevent
fraudulent removal and reattachment of this form to another document.
Description of Attac d Document ?�
Title or Type of Document,.
a�A�. G•�-t-rzs
Document Date: _ _,4t C:ea_z� aL Number of Pages:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name: - Signer's Name-
El
Individual 0 Individual
I❑ Corporate Officer i-J Corporate Officer
Title(s)- Title(s):
:j Partner— Limited _J General i'] Partner—E. Limited ❑General ?�
❑ Attorney-in-Fact 0 Attorney-in-Fact ?�
CJ Trustee ❑ Trustee
._:l Guardian or Conservator 7 Guardian or Conservator
Other: Top c:thumb here Cl Other- Top of Ihurr:b here
Signer Is Representing: Signer Is Representing=
SP
C 1955`a'-0r'a`Notary AgS at.on•8236 R0'ce:Ave.PO Box 71 qa•Canoga Park.CA91304-718A Prod No 5907 Roo-der Call To.1•F,ee 1.E00.876.6U7
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
':G`r_.�`r_�'cc'�'��'S`�'�':���':�,3"�'4'�'t.Y'c�':�'?^�'�,cc•,�':i,`�'�,`rLY'.c��c�'.cc'L'v'L+'.Lc'.e��L�`.Lc'crc�?4•�'4,c4,c',�.r_ .,r' "y_
State of Califomia
ss.
County of �P
On _.&Zmbefore me,
Date Name and Tn.o of Officer(a Doa.'ary Pu
personally appeared �� .cs J,a- --- Z1-/1P� ,
Name(s)at Sgrrorys)
)5--personally known to me
E proved to me on the basis of satisfactory
evidence
to be the person(s) whose name(s) Xlare
subscribed to the within instrument and
acknowledged to me that WI4WIthey executed
the same in tog7be/their authorized
CHRISTINE CLEARY capacity(ies), and that by h+rSlt erltheir
Cortxrtlsston d►ty�p,q� signature(s) on the instrument the person(s), or
No#ary KM-CdMwft the entity upon behalf of which the person(s)
Onange County acted, executed the instrument.
W Camm.BPkW Jon 1&2Ctk
WITNESS my hand and official seal.
Place Notary Seal Above Srpra:tee o+NoLary Pu0 ✓�j
OPTIONAL
Though the information below is not required by law. it may prone valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document T
Description of Attached ocument
Title or Type of Document .GA,�...
Document Date: tb 4&lA — Number of Pages- /Z _
Signers) Other Than Named Above.
Capacity(ies) Claimed by Sig er ?�
Signer's Name= �.. � l��trs �Lw�l 1
01 Individual l Tn,nl thtw b,ere
0 Corporate Officer—Title(s)
I`• Partner—l I Limited ❑ General
E. Attorney in Fact -
CC Trustee I S
C1 Guardian or C nservator fS
P OtherGt?G �!' dlj'1J2,rr� _
Signer Is Representing-�aYaejg&I"e4vt �
��'Ci,�i,�{��C'�,C,ctil'-�.{".c'�r"'{tir`�,Cam:�;<',�.r.�.'cc;{�c;�%c,C�.�r'.�.-r•S,ri,�i�.t-`CZi'.�,�.�.r.
O:999 netbny r+c:sy assoaa:d+•9i50 Ot Sao�n.PO Ib•2e_`2•Ui:s+M.�Ct 9:?+3 Z&07•rt r,ri!oru:.t:uy V^7 P•od Ha 59o7 aec:oer Call ToWFrn+-eoae:e-W7
ATTACHMENT 1
LEGAL DESCRIPTION OF SITE
LEGAL DESCRIPTION
OF THE PROPERTY COMMONLY KNOWN AS
17412 KOLEDO LANE, HUNTINGTON BEACH, CALIFORNIA 92647
ALL TRAT CERTAIN LAI D SITUATED N THE.5TA7E OF CALIFOC.NIA,COUNTY OF ORANGE,CITY OF HUNTINGTON
BEACH,DESCMED AS FOU OWS
LOT 40 OF TRACT NO.4301, AS PER MAP RECORDED IN BOOK 177, PAGES II AND 12 OF
MISCELLANEOUS MAPS IN THE OFFICE OF THE COLRgTY RECORDER OF SAID COUNTY,TOGETHER
WI713 THAT PORTION OF KOLEDO LANE ADJOINING SAID FAT 40 WESTERLY, AS ABANDONED BY
RESOLUTION NO. 5353 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, FEBRUARY
15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS. THAT WOULD PASS BY A
CONVEYANCE OF SAID LOT.
EXCEPT ALL UNDERGROUND WATERS LYrNG BENEATH THE REAL PROPERTY DESCRIBED
HEREIN, BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND OR THE TOP 500
FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF
HUNTINGTON BEACH, RECORDED IN BOOK 6511,PAGE 679 OF OFFICIAL RECORDS.
RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS
THIS RIDER TO SUBORDINATED DEED OF TRUST WITH RIDER ATTACHED
("Rider"), is made as of December 18 , 2000, by ORANGE COUNTY
COMMUNITY HOUSING CORPORATION, a California nonprofit corporation("Trustor"), and
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body,
corporate and politic ("Beneficiary"), as follows:
1. Part of Deed of Trust. This Rider is made a part of that certain Subordinated Deed of
Trust With Assignment of Rents ("Deed of Trust"), of even date hereof,to which this Rider is
attached.
2. Conflict. In the event of any conflict between the terms of this Rider and the
terms of the Deed of Trust, the terms of this Rider shall control.
3. priority; Subordination. Trustor and Beneficiary entered into that certain Owner
Participation Agreement, dated December 18 , 2000 (the "OPA"), pursuant to which
Beneficiary(named the "Agency" in the OPA agreed to subordinate this Deed of Trust to the liens of
the deeds of trust identified in the OPA as the Conventional Lender's deed of trust, and to such other
and further documents as such lenders may be required including but not limited to regulatory
agreements, not to exceed an indebtedness in an amount to be determined by the Beneficiary. The
lien of this Deed of Trust therefore shall be junior and subordinate to the lien of the foregoing listed
deed of trust and such other and further documents as such lenders may require. Beneficiary agrees
to execute such subordination agreements, in the form attached as Exhibit "J" to the OPA, as are
necessary to effect such subordination of the lien of this Deed of Trust.
4. Condemnation. Section B.t of the Fictitious Deed of Trust incorporated into
the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or
damages payable directly or indirectly by reason of a condemnation or proposed condemnation
affecting all or any part of, or any interest in, the Property, brought by or pursuant to the direction of
Beneficiary.
5. Default. The term "default" as used in the Deed of Trust shall mean a "material
Default" as defined in the OPA or Regulatory Agreement.
rN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated
Deed of Trust With Assignment of Rents as of the date of Trustor's ac know]edgement hereinbelow,
to be effective for all purposes as of the day and year first set forth above.
+ [end -- signature page follows]
9
4-1000 Apec CXVHC-Kolydo Subordinated Deed of Trust
121SiOO
"PARTICIPANT"
ORANGE COUNTY COMMUNITY
HOUSING CORPORATION
a California nonprofit corporation
By.-
"BENEFICIARY"
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH, a
public body corporate and politic
By:
Chaff n
ATTEST:
By
Agency Clerk
�L/X/uo
REVIEWED AND APPROVED
AS TO FORM:
By
Agency Counsel n
10
4-2000 Agree 000IC-Koledo Subordinated Deed of"Trust
1218!00
STATE OF CALMORNIA )
ss.
COUNTY OF ORANGE }
On NCO , before me, Jy/-'AJ,'7W f�u,Us`LY , personally
appeared
personally known to me ( e-on the basis of safisfactory-evidun-ft) to be the person(sr)
whose name(s) is/aFe subscribed to the within instrument and acknowledged to me that he/shc6dmy
executed the same in his/heir authorized capacity(les), and that by his/heFA#oir signature(a) on
the instrument the person(s) or the entity upon behalf of which the person(s)acted, executed the
instrument.
Witness my hand and official seal.
.IUANfTA HOLINSLEY Notary Public
(SEAL] Commission N 1212151
Nototry Public-Cal;fomla
Crunge County
WCornrM Ivies&tT31,2003
STATE OF CALIFORNIA )
ss.
COUNTY OF ORANGE )
On'5�6e,,, 24 2000 before me,&p,sf ��(J w personally
G
P '� � �y
appeared ejCI[2lP- YAsr ��Tj
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) yd/are subscribed to the within instrument and acknowledged to me that k/5k./they
executed the same in bi'S/ er/their authorized capacity(ies), and that by biibe hheir signature(s) on
the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
i C►�RI$TINE CLEARY
miss'K)n 1,5MMM Notary Public
[SEAL] Noto Public-Cdren is
Or ge covrtfy
tnn 16.� CHRiS17NLr CtFJ1AkY
CFiRlSTINE CtEARY Makv�#1�
Comm'isslon io i25M �Rkft-C' �
NOtOfy e C c.C1 1,10 ,` 1@MVCaTwmb0wJcn1&2M4
LIM
'omm.645ies XM IML
I1
UJ4
4.20W AZFCC OCCIIC-Kokdo Subordinated Deed of l-rust
12/8100
! ! .
EXHIBIT "A" TO DEED OF TRUST
LEGAL. DESCRIPTION OF REAL PROPERTY
[behind this page]
12
4-2000 Agree OCCHC-Koicdo Subordinated Decd of Trust
r 2rS100
LEGAL DESCRIPTION
OF THE PROPERTY COMMONLY KNOWN AS
17412 KOLEDO LANE, HUNTINGTON BEACH, CALIFORNIA 92647
ALL THAT CERTAR-LAND SITUATED rN THF-STATE OF CAUFORNIA,COUNTY OF ORANGE,CITY OF HUNTINGTON
BEACH,DESC OBI),S FOLLOWS
LOT 40 OF TRACT NO.4301, AS PER MAP RECORDED IN HOOK 177, PAGES 11 AND 12 OF
MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,TOGETHER
WITH THAT PORTION OF KOLEDO LANE ADIOFMNG SAID LOT 40 WESTERLY, AS ABANDONED BY
RESOLUTION NO. 5353 OF THE CITY COUNCIL OF THE CITY OF HUNTTNGTON BEACH, FEBRUARY
15, 1984 AS INSTRUMENT '�O. 84-065494 OF OFFICIAL RECORDS. THAT WOULD PASS BY A
CONVEYANCE OF SAID LOT_
,EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED
HEREIN, BUT WIT`4OUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND OR THE TOP 500
FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER, AS SET FORTH IN DEED TO CTIY OF
HUNTINGTON BEACH,RECORDED IN'BOOK 6511,PAGE 679 OF OFFICIAL RECORDS.
EXHIBIT H
Regulatory Agreement
[behind this page]
Regulatory Agreement
Page 1 of 12
Vs 4,2000 Agrec-Koledo- Regulaiory
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTI `GTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: Agency Clerk
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov- Code § 6103)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement") is made and entered into this 18th day of
December , 2000, by and between REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH, a public body, corporate and politic ("Agency") and ORANGE
COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit corporation
("Participant").
RECITALS:
A. Agency and Participant have entered into that certain Owner Participation
Agreement, dated December 18 . 2000 (the "OPA"), concerning Participant's
development of that certain real property, oxx-ned in fee by Participant, more particularly
described in Attachment No. 1 attached hereto and incorporated by reference herein (the "Site").
The OPA describes the "Project"which generally consists of Participant's acquisition of the
existing apartment building consisting of a total of five (5) two-bedroom Units on the Site and
subsequent management thereof as an affordable rental housing complex. The OPA is hereby
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 OPA.
B. Participant has executed that certain promissory note (the "Note") dated
December 18 , 2000, pursuant to which Agency has provided Participant with a loan in the
principal amount of TWO HUNDRED EIGHTY-FIVE DOLLARS (S285,000) ("Loan
Amount"). The Note is secured by a Subordinated Deed of Trust With Assignment of Rents
With Rider Attached dated on or about the date of the Note.
C. Agency and Participant now desire to place restrictions upon the use and
operation of the Project, in order to ensure that the Project shall be operated continuously as an
affordable housing project available for rental in accordance with the terms set forth below for
the term of this Agreement.
1
Regulatory Agreement
-i:'s 4-2000 Agrcc ( CCHC-Koledo Regulatory
Rl_5 U0.1063
2:8r00
0 ,
AGREEMENT:
NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for
themselves, their heirs, executors, administrators and assigns, and all persons claiming under or
through them,that the Site, for the term of this agreement, shall be held transferred, encumbered,
used, sold, conveyed, leased and occupied, subject to the covenants and restrictions hereinafter
set forth:
1. DEFINITIONS.
1.1 Affordable Rent. As used in this Agreement, the term "Affordable
Rent" shall mean rental rates not to exceed "very low income"rent as defined by California
Health c- Safety Code Section 50053, or its successor, and as set forth by the HOME Program in
24 C.F.R. 92.252, or its successor.
1.2 Eligible Tenant. As used in this Agreement, the term "Eligible
Tenant"shall refer to Eligible Very Low Income Tenants who are eligible to rent a Unit.
1.3 Eligible Very Low Income Tenant. As used in this Agreement, the term
"Eligible Very Low Income Tenant" shall mean a family or individual whose annual income
does not exceed fifty percent (50%) of the median income for the Orange County Metropolitan
Statistical Area as determined by the U.S. Department of Housing and Urban Development
(HUD) with adjustments for smaller and larger families.
1.4 Orange County Median Income. For purposes of this Agreement, the
term "Orange County Median Income"shall mean the median income for the Orange County
Primary Metropolitan Statistical Area, with adjustment for household size, as determined from
time to time by HUD pursuant to the United States Housing Act of 1937 as amended, or such
other method of median income calculation applicable to the City that HUD may hereafter adopt
in connection with said Act.
1.5 Unit and Units. As used in this Agreement, the term "Unit" shall
mean one of the five (5) rental dwelling units in the Project, and the term "Units" shall mean two
or more of the five (5) rental dwelling units in the Project. The term "Unit" and "Units" shall be
used as the context mandates and shall be reasonably interpreted in light of the context in which
the term appears.
2. TERM OF AGREEMENT; RESIDENTIAL RENTAL PROPERTY. The
term of this Agreement shall be sixty (60) years from the Effective Date of the OPA. Participant
hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible
Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the
Participant hereby represents, covenants, warrants and agrees as follows:
2.1 Purpose. The Site has been acquired and the Project developed for
the purposes of providing Eligible Tenants affordable rental housing.
2
Regulatory Agreement
J's 4-2000 Agree OC'C'Itt�-Kolcdo Regulitory
RLS 00-1003
1218100
EXHIBIT F
Promissory Note
[behind this page]
PROMISSORY NOTE
SECURED BY DEED OF TRUST WITH ASSIGNMENT
OF RENTS AND RIDER ATTACHED THERETO
DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing
same, must be surrendered to Trustee for cancellation before reconveyance will be made.
PROMISSORY NOTE SECURED BY DEED OF TRUST
Principal Loan Amount: $285,000
Interest: 6%
Note Date: December 18 _, 2000
FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of
the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body
corporate and politic ("Holder"), at a place designated by Holder, the principal sum of TWO
HUNDRED EIGHTY-FIVE THOUSAND DOLLARS (S285,000) at the rate of SIX PERCENT
(6%) simple interest, or such lesser amount which shall from time to time be owing hereunder
pursuant to the terms hereof, pursuant to an Owner Participation Agreement (the "OPA") dated
as of December 18 , 2000 by and between Maker and Holder. The OPA is hereby
incorporated by reference as though fully set forth herein. Any capitalized terms not defined
herein shall have the meanings ascribed to them in the OPA. The obligation of the Maker to the
Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to
be developed (the "Site") pursuant to the OPA and the Deed of Trust and Assignment of Rents
dated December 18 , 2000, executed by the Maker and recorded in the Recorder's Office
of Orange County, California on , as Document No.
(the "Deed of Trust"). The obligation of the Maker set forth in this Note is subject to
acceleration as set forth in the OPA. The OPA and the Deed of Trust are public records on file
in the offices of the Holder.
1. Agency Loan. This Note evidences the obligation of the Maker to the I folder for
the repayment of funds loaned to the Maker by the Holder(the "Agency Loan") to finance the
acquisition of the Site pursuant to the OPA. The Maker shall not make any sale, assignment or
conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein
without the express written consent of the Holder as set forth in Section 2.5 of the OPA.
2. Payment of Obligation. Commencing on the third anniversary of the date of
this ;`tote and every succeeding year during the tei7tt of the OPA, Maker shall pay to the Holder
ONE TIIOUSAND TWO HUNDRED DOLLARS (S1,200.00) or (:fFTY PERCENT (50%) of
Net Operating Income for the previous one-year period, whichever amount is less, for repayment
of this Note. Should Maker believe the Project revenues be insufficient to permit Maker to make
such a payment in any year, Maker may appeal to the Holder to have the payment reduced,
suspended, renegotiated, or forgiven. Maker shall carry the burden of proof in this regard.
Holder shall have the unfettered discretion to reduce, suspend, renegotiate, or forgive the
Promissory Mote
Page I of 3
4-2000 Ao er 0CCHC-,o1cdo
1218i00
payment based on the evidence submitted by the Maker. All payments required by Maker
pursuant to the terms hereof shall be made no later than ninety(90) days following the end of the
reporting year(calendar year or fiscal year). If the first or final payment is based on a portion of
a year, the payment shall be pro rata based on a 360-day year.
Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this
Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of
Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the
reconveyance of the Deed of Trust.
3. Prepayment
(a) Penalties. In the event Maker prepays the entire balance of this Note
including all accrued interest within two years from the date of this Note, then Maker shall pay to
Holder a prepayment penalty consisting of TWENTY-FIVE PERCENT (25%) of the original
principal balance of this Note. In the event Maker prepays the entire balance of this Note including
all accrued interest at any time after two years from the date of this Note, the covenants, conditions
and restrictions imposed on the Site by the Regulatory Agreement shall remain in full force and
effect for the full 60-year term as specified therein.
(b) Effect on Covenants. If, at the end of the 60-year term of the OPA, an
unpaid balance remains on this Note, Maker may choose to do either of the following: (a) Maker
may choose to continue to maintain the covenants, conditions and restrictions imposed on the Site
by the Regulatory Agreement, in which case the Holder shall not require repayment of the balance
of this Note and the loan shall not accrue any interest for the period during which said covenants,
conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the
entire principal balance of the loan plus all accrued interest on this Note shall immediately become
due and payable.
4. Acceleration of Obligation. Upon the occurrence of a uncured Material Default of
Maker under this Note, the Deed of Trust or any obligation secured thereby(including the
obligations in the OPA and the Regulatory Agreement), or in any other instrument now or hereafter
securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its
option, declare this Note and all the obligations hereby evidenced that has not been forgiven,
waived, and discharged pursuant to Section I above, to be immediately due and payable and
collectible then or thereafter as Holder may elect, regardless of the date of maturity.
5. Default Interest. If any event occurs giving Holder the right to accelerate this Note
pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, 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.
6. Collection Costs, Attorneys' Fees. If any attorney is engaged by Holder because of
any event of an uncured Material Default under this Note or the Deed of Trust or to enforce any
Promissory Note
Page 2 of 3
4-200O Ag.ce (X-('HC-Kolcdo
1218100
provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own
attorney's fees and costs.
7. Severability. The unenforceability or invalidity of any provision or provisions of
this Note as to any persons or circumstances shall not render that provision or those provisions
unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all
other respects, shall remain valid and enforceable.
S. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged,
modified,changed or terminated orally; nor shall any waiver of any provision hereof be effective
except by an instrument in writing signed by Maker and Holder.
9. UsurY. Notwithstanding any provision in this Note, Deed of Trust or other document
securing same, the total liability for payment in the nature of interest shall not exceed the limit now
imposed by applicable laws of the State of California.
10. Governing Law. This Note has been executed and delivered by Maker in the State of
California and is to be governed and construed in accordance with the laws thereof.
IN WITNESS WHEREOF, Maker has executed this Note as of the date and year First above
written.
"MAKER"
ORANGE COUNTY COMMUNITY
HOUSING CORPORATION,
a California nonprofit corporation
By
Promissory Dote
Page 3 of 3
4-200D Agrcc (XVI[C-Kolcdo
r"s-on
EXHIBIT G
Subordinated Deed of Trust
[behind this page]
Order No. )
Escrow No. )
Loan No. )
WHEN RECORDED MAIL TO: )
Redevelopment Agency of the )
City of Huntington Beach )
2000 Main Street )
Huntington Beach, CA 92648 )
Attn: Agency Secretary )
SPACE ABOVE THIS LINE FOR RECORDER'S USE]
EXE`APT FROM RECORDING FEE PER GOV_CODE§6103]
SUBORDINATED DEED OF TRUST
WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO
NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS
WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH
MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT
TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT.
This DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED
HERETO ("Deed of Trust"), made December 18 , 2000, between ORANCE COUNTY
COMMUNITY HOUSING CORPORATION, a California nonprofit corporation, herein called
TRUSTOR, whose address is 1833 East 17''' Street, Suite 207, Santa Ana California 92705; and
THE CITY OF HUNTINGTON BEACH, a California corporation, herein called TRUSTEE, and
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body,
corporate and politic, herein called BENEFICIARY,
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the
City of Huntington Beach, County of Orange, State of California, described as:
SEE EXHIBIT "A" ATTACHED I IERETO
together with the rents, issues and profits thereof, subject, however, to the right, power and
authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents,
issues and profits for the purpose of securing (1) payment of the sum of TWO HUNDRED
EIGHTY-FIVE THOUSAND DOLLARS ($285,000.00) with interest thereon, according to the
terms of that certain promissory note of even date herewith made by Trustor, payable to order of
Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of
Trustor incorporated by reference or contained herein; and (3) payment of additional sums and
1
4-2000 Agrcc 0C0]C-K01rd0 Subordinated Deed of Trust
i iSroo
interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when
evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the property above described,
Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be
bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually
agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious
deed of trust recorded in Orange County September 17, 1964, and in all other counties
September 18, 1964, in the book and at the page of Official Records in the office of the county
recorder of the county where said property is located, noted below opposite the name of such
county, namely:
COI.'NTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COON I'Y BOOK PAGE
Alameda 1289 566 Kings 858 713 Placer 1029 379 Sierra 38 187
Alpine 3 130-31 L:tkc 437 110 Plumas 166 1307 Stsktyou 506 762
Amador 133 438 Lassen 192 367 Ri%erside 3778 347 Solano 1287 621
Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427
Calavcras IRS 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56
(Musa 323 391 Mann 18a9 122 San Bernardino 6213 768 Sutter 655 585
Contra Costa 4694 1 3.tanposa 90 453 San Francisco A•804 596 Tchama 457 183
Del Nune 101 549 %tendocmo 667 99 San Joaquin 2855 283 Fnnity 108 595
rl Dorado 704 635 ;tcrccd 16W 753 San Lou Obispo 131 1 137 Tulare 2530 108
Fresno 5052 623 ytodoc 191 93 San Statco 4778 175 Tuolumne 177 160
Glenn 469 76 Mono 69 302 Santa Barbara 2065 RKI Ventura 2607 237
Ilumholdt 901 83 Monterey 357 239 Santa Clara 6625 66-1 Yolo 769 16
Imperial 1189 701 Napa 704 742 Santa Cruz 1638 007 Yuba 398 693
Inyo 165 672 Nevada 363 94 Shasta 800 633
Kem 3756 600 Orange 71S2 18 San Diego SERIES 5 Boo'; 19fA.Page 149774
shall inure to and bind the parties hereto, with respect to the property above described. Said
agreements, terms and provisions contained in said subdivisions A and B (identical in all counties,
and printed on pages 4, S and 6 hereof) are by the within reference thereto, incorporated herein and
made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and
Beneficiary may charge for a statement regarding the obligation secured hereby. provided the charge
therefor does not exceed the maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale
hereunder be mailed to him at his address hercinbefore set forth.
NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH
RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WI I ICI I MAY
RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A
LOWER PRIORITY TITAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT.
2
4-2000 Agree OCCI IC'•Kolcdrt Subordinalcd Deed of Trust
12 8:00
• • '
Signature of Trustor
STATE OF CALIFORNIA ) ORANGE COUNTY COMMUNITY ,
COUNTY OF ORANGE ) HOUSING CORPORATION, a California
nonprofit corporation
}
By:
On �(C� �� Joao before me,
personally appeared c.ek) c r zs .4zpcv.�J
personally known to me
b e) to be the person(v)
whose name(s) is/am subscribed to the within JUANUFOt1NSLEY
instrument and acknowledged to me that he/she�dwy ComrnWicin# 1212151
executed the same in his/heffthzir authorized capacity(i=) _ -e NoteryPuaR e-carlamta
orange county
and that by his/her signature(sj on the instrument 1 CCrr1rnE,i;mAla31,2
the person(g) or the entity upon behalf of which the
person(fr) acted, executed the instrument.
WITNE i- hand and official seal. r' J '
Si ature "�`"' (This are for official notarial seal)
5
3
a._Uo0 Agrec OCCHC-Kolcdo Subordinated Deed of Trust
l,SOO
DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each
county in California as stated in the foregoing Deed of Trust and incorporated by reference in said
Deed of Trust as being a part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees:
1) To keep said property in good condition and repair, not to remove or demolish any
building thereon; to complete or restore promptly and in a good and workmanlike manner any
building which may be constructed, damaged or destroyed thereon and to pay when due all claims
for labor performed and materials furnished therefor,to comply with all laws affecting said property
or requiring any alterations or improvements to be made thereon; not to commit or permit waste
thereof, not to commit, suffer or permit any act upon said property in violation of law; to cultivate,
irrigate, fertilize, fumigate,prune and do all other acts which from the character or use of said
property may be reasonably necessary, the specific enumerations herein not excluding the general.
2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with
loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be
applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may
determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be
released to Trustor. Such application or release shall not cure or-waive any default or notice of
default hereunder to invalidate any act done pursuant to such notice.
3) To appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including
cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in
which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this
Deed.
4) To pay: at least ten days before delinquency all taxes and assessments affecting said
property, including assessments on appurtenant water stock; when due, all encumbrances, charges
and liens,with interest, on said property or any part thereof,which appear to be prior or superior
hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then
Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor
and without releasing Trustor from any obligation hereof, may: make or do the same is such manner
and to such extent as either may deem necessary to protect the security hereof, Beneficiary or
Trustee being authorized to enter upon said property for such purposes; appear in and defend any
action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or
Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the
judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date
hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum
allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
4
4-2000 Agree:oCCHC-Koledo Subordinated Deed of Trust
l2isioo
1) That any award in connection with any condemnation for public use of or injury to
said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply
or release such moneys received by him in the same manner and with the same effect as above
provided for disposition or proceeds of fire or other insurance.
2) That by accepting payment of any sum secured hereby after its due date,Beneficiary
does not waive his right either to require prompt payment when due of all other sums so secured or
to declare default for failure so to pay.
3) That at any time or from time to time,without liability therefor and without notice,
upon written request of Beneficiary and presentation of this Deed and said note for endorsement,and
without affecting the personal liability of any person for payment of the indebtedness secured
hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat
thereof;join in granting any easement thereon, or join in any extension agreement or any agreement
subordinating the lien or charge hereof.
4) That upon written request of Beneficiary stating that all sums secured hereby have
been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or
other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee
shall reconvey, without warranty, the property then held hereunder. The recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The
Grantee in such reconveyance may be described as"the person or persons legally entitled thereto."
5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the
right, power and authority,during the continuance of these trusts, to collect the rents, issues and
profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment
of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and
retain such rents, issues and profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent, or be a receiver to the
appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby
secured, enter upon and take possession of said property or any part thereof, in his own name sue for
or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the
same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon
any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering
upon and taking possession of said property, the collecting of such rents, issues and profits and the
application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
6) That upon default by Trustor in payment of any indebtedness secured hereby or in the
performance of any agreement hereunder, Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written declaration of default and demand for
sale and of written notice of default and of election to cause to be sold said property, which notice
Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said
note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said
notice of default, and notice of sale having been given as then required by law, Trustee,without
demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale,
either as a whole or in separate parcels and in such order as it may determine, at public auction to the
highest bidder for cash in lawful money of the United States,payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public announcement at such time and place of
sale, and from time to time thereafter may postpone such sale by public announcement at the time
5
4-2000 Agree:OCCHC-Koledo Subordinated Deed of Trust
1?S/00
fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the
property so sold, but without any covenant or warranty, express or implied. The recitals in such deed
of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including
Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and this "Trust, including cost of
evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of. all
sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed
by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to
the person or persons legally entitled thereto.
7) Beneficiary,or any successor in ownership of any indebtedness secured hereby, may
from time to time, by instrument in writing, substitute a successor or successors to any Trustee
named herein or acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or counties where said
property is situated shall be conclusive proof of proper substitution of such successor Trustee or
Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate,
rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee
and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address
of the new Trustee.
8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their
heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary
shall mean the owner and holder, including pledges, of the note secured hereby, whether or not
named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender
includes the feminine and/or neuter, and the singular number includes the plural.
9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is
made a public record as provided by law. Trustee is not obligated to notify any party hereto of
pending sale under any other Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
5
-1-2000 Agrce.OCCIIC-Koledo Subordina[ed Deed of Trust .
12i8%00
DO NOT RECORD RE VEST FOR FULL. RECONVEYANCE
TO , TRUSTEE:
The undersigned is the legal owner and holder of the note or notes of all indebtedness secured
by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by
said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on
payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note
or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust
delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty,
to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the
same.
Dated
Please mail Deed of Trust,
Note and Reconveyance to
Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be
delivered to the Trustee for cancellation before reconveyance will be made.
7
4-2000 ALZTL-z OCCIfC•Koieao Subordinated Deed of Trust
i M100
DEED OF TRUST WITH ASSIGNMENT OF
RENTS WITH RIDER ATTACHED
CITY OF HUNTINGTON BEACH
A California municipal corporation
TRUSTEE
s
-9-2000 Agree 0MIC-Kol do Subordinated Iced of Trust
zr8'00