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HomeMy WebLinkAboutHuntington Harbour Mobile Estates Homeowner Association - 1995-04-03Council/Agency Meeting Held: Deferred/Continued to: Approved O Conditionally Approved 0 Denled City Clerk's Si ature up Council Meeting Date: November fi, 1995 Department ID Number: ED 95-38 REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Chairman & Redevelopment Agency Members SUBMITTED BY: Michael T. Uberuaga, Executive Director 7- PREPARED BY: David C. Biggs, Director of Economic Development Ow SUBJECT: NOTIFICATION OF REPAYMENT FROM LOAN WITH HUNTINGTON HARBOUR MOBILE ESTATES HOMEOWNERS ASSOCIATION Statement at lssw, Funding Source, Recommended Action. Alternative Action. Analysis, Environmental Status, Attac Statement of Issue: Huntington Harbour Mobile Estates Homeowner Association has paid $15,000 to the City of Huntington Beach Redevelopment Agency as repayment for Phase 1 of its pursuit in purchasing the Park in which they reside. The loan was for $15,000, at an interest rate of 3% amortized for 15 years. Funding Source: None as a result of this action. Recommended Action: Motion To: 1) Accept funds as payment in full for the loan of $15,000. Alternative Actions : Do not accept payment. Analysis: The Huntington Harbour Mobile Estates Homeowners' Association requested the assistance of the Huntington Beach Redevelopment Agency to finance the initial studies to convert its Park into a resident -owned facility. REQUESTYOR REDEVELOPMENT AGERCY ACTION MEETING DATE: November 9,1995 DEPARTMENT ID NUMBER: ED 95-38 In this effort, the Association had contracted with Community Service Group, a consulting firm that specializes in mobile home conversions. The total cost for the preparation of the various preliminary documents was estimated at approximately $63,000. These documents were to be prepared in three phases, with the first phase addressing an appraisal of the Park, including an engineering report to determine the status of the park infrastructure and residents' profile to determine that the tenants qualify for Agency affordable housing assistance. The first phase would cost approximately $15,000. On April 3, 1995, the Redevelopment Agency approved the Request for Agency Action for approval of staff to enter into a Loan Agreement with the Huntington Harbour Mobile Estates Home Owners Association for the purpose of performing Phase 1 of the Park purchase. A letter was sent to the City Administrator/Executive Director by the Huntington Harbour Mobile Estates Homeowners Association, dated October 4, 1995, following the Association's awareness that it might be pursuing some of its purchase tasks out of order. When learning of this, and knowing the financial condition of the City, they offered to return to the City the funds that were borrowed. They do, however, request that no interest be charged to the Association for the time they had the funds, which amounts to $96.16 for the period of July 30, - October 16, 1995. Environmental Status: N/A 1. Huntington Harbour Mobile Estates letter. 2. Approved RAA dated April 4, 1995 3. Loan Agreement. 4. Cash receipt. HHLOAN.DOC -2- 10/3019511:21 AM I IUNTINGTON HARBOUR MOBUX. ESTATES !-HOMEOWNERS ASSOCIATION 16400 Saybrook I.anc Huntington Dcach, CA 92649 October 4, 1995 Mr. Michael 1'. Ubcruaga City Administrator City of I Itintington Reach 2000 Main Strcct Ilantington Beach, CA 926,18 D.ar Mr. Ubcruaga, In our last communication to [lie City, we requested a commitment to a loan in the amount of $48,250 for our 1'ltase 2 Park purchase tasks before pursuing our Phase I tasks. following that communication, we had a very lmsit;vc mcc6rig with Councilrncmbcrs Garofalo and Careen, rhrs.mcmbcra of the City Administration where M., discussed how to proceed Willi our request. following that meeting, we had a mccting with ('rnrncilntcmbcr Bauer. Ancr hilcning to some orour ncvb; for assistancc from the City, Councilmcmhcr hf:mer recommended that we doc:nment all of them in a single rcclutmi to ate City. 'Chat letter was nearly contplde when we !carnetl fi-orn materials we reccivcd from tlic Stole and other aaurecs Thal perhaps we were pursuing out of order sums; of our Park purchase [asks. lit rcc:ovdzing this, we have come to Ilrc understanding that we probably will riot need within the scar Icrm the $15.000 that the City has loaned us. knowing that the City is short of funds, we arc offering to rclurn the $15'Wo to the City. We will need tticse fiends in Ilie future, and we look loryour continued support at Ihat ]n returning fhcsc funds, we have one request. Our loan with [lie City began canting interest oil August 1, 1995. We rcqucst (hat ltic intcrest earned be sct .-Side. While we did not receive the funds until 22 days -&cr Ihc: noic date, file fact is that we have not been in a position to make use of the $15,000. What we arc requesting will cause the city to lose appruxunatcly $190.00 in revenue; retention of the earned interest in our freaSuty will weigh heavily as Car as the morale of our membership is contented. 'lytcreforc, we appreciate your corrsidcralion in Ibis mallcr. Your am'islarice and concern llrrouglt our Pirk purchase pursuit liw: been Vreatly appreciated, and we look forward to, and will neat, your continual support. ycry 'rrtiiy Yours, RAYvle�al anion 1'rc 4dcnt cc: Councilmenibcrs Dan Brucuing Grcg Drown Rb�JEST FOR COUNCILYCTION Submitted to: Honorable Mayor & City Council Member Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Ray Silver, Assistant City Administratoroe.,, April 3, 1995 APPROVED BY CITY COUN( �_ 3 19.3 ACA" Aa cnYCLERk Subject: AUTHORIZE REDEVELOPMENT AGENCY TO ENTER INTO A ~ LOAN AGREEMENT WITH HUNTINGTON HARBOUR MOBILE ESTATES Consistent with Council Policy? ( ] Yes [ ] New Policy Statement of Issue. Recommendation. Analysis, Funding Source, Alternate Actions, & Attachmentsk AM Fro" 0/0, �. -000 STATEMENT OF ISSUE: &1-"/ io t; Staff is requesting authorization to enter into a Loan Agreement with Huntington Harbour Mobile Estates Homeowner Association in order to pursue the preliminary step for resident acquisition of the park. The loan will be $15.000 at a three percent (3%) interest rate amortized for 15 years. FUNDING SOURCE: Redevelopment Agency Affordable Housing Fund RECOMMENDED ACTION: Staff recommends that Council take the following actions: a) Approve the Loan Agreement and Promissory Note between the City of Huntington Beach and Huntington Harbour Mobile Estates, Inc.for the sum of $15,000 at three percent (3%) amortized over 15 years to conduct phase 1 studies for resident acquisition. b) Approve and authorize execution by the Mayor and City Clerk of the Loan Agreement between the City of Huntington Beach and Huntington Harbour Estates, Inc. for Phase 1 studies for resident acquisition. ALTERNATE ACTIONS: The Council may motion to 1) direct staff to re -negotiate the terms of the proposed transaction, 2) continue for further information, or 3) deny. PAGE ANALYSIS: The Huntington Harbour Mobile Estates Homeowners' Association has requested the assistance of the Huntington Beach Redevelopment Agency in financing the initial studies to convert their park into a resident owned facility. February 6, 1995, a Request for Council Action was presented to the Council for your review. At that time, Council directed staff to initiate modifying terms. Staff has met with the homeowners' association and have agreed that the loan will be a three percent (3%) loan amortized over a 15 year period if the acquisition does not go forward within 90 days. In this effort, the Association has contracted with Community Service Group, a consulting firm which specializes in mobile home conversions. The cost for the preparation of the various preliminary documents totals approximately $63,000. These documents are prepared in three phases. The first phase addresses the residents' profile to determine that the tenants qualify for Agency affordable housing assistance, an appraisal of the park, and an engineering report to determine the status of the park infrastructure. The first phase will cost approximately $15,000. If the project does go forward to the next step, the Association will be requesting further assistance from the Agency for the funding of Phase 11 and 111 studies, approximately $48,000. At that time, an affordable housing agreement would be required to assure that the housing does stay affordable for a minimum of 30 years. The Homeowners Association at their March 2,1995 meeting passed a resolution requesting Agency assistance. ATTACHMENTS: 1. Loan Agreement and Promissory Note. 2. Huntington Harbour Mobile Estates Homeowners Resolution dated March 2. 1995. 3. Huntington Harbour Mobile Estates Homeowners letter dated December 5, 1995. 4. Background information on Community Service Group. 5. Previous RCA dated February 6, 1995 6. Letter to Victor Leipzig dated March 1, 1995 from Charles & Bessie Levy. RS:DB:lp • J� *K04TV4GTON auQi TO: FROM: CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION MICHAEL T. UBERUAGA, City Administrator ROBERT J. FRANZ, Deputy City Administrator SUBJECT: REQUESTED APPROPRIATION FOR REDEVELOPMENT AGENCY LOAN AGREEMENT WITH MOBILE HOME PARK, FIS 95-20 DATE: MARCH 10, 1995 As required by Resolution 4832, a Fiscal Impact Statement has been prepared for the proposed appropriation of $15,000 for purposes of pursuing the preliminary steps towards resident acquisition of the Huntington Mobile Estates Park Upon approval of the C2dd ouncil, the balance of the Cash and the Housing Set -Aside would be reduce to $1,996,000. Deputy City RJF:skd in 0010979.01 03/23/95 5:05 PM V LOAN AGREEMENT ... _ .._ . .. THIS LOAN AGREEMENT ("Loan Agreement") is entered into as of _1-74L . �_ 1995 between the HUNTINGTON BEACH REDEVELOPMENT AGENCY C MRA") and the undersigned (collectively, the "Borrower') with regard to the followin„�: RECITALS A. The Bomm er shall be given notice by an agent for Mr. Les Frame the "Seller") that the Seller intends to sell the real property generally located at 16400 Saybrook Lane, Huntington Beach, California, commonly known as the Huntington Harbour Mobile Estates Homeowners Association (the "Lease") and that, pursuant to Chapter 2.80 of the Huntington Beach Municipal Code, the Borrower has a ninety (90) day right of first refusal to purchase the Lease. B. 'The Borrower has roquested HBRA to provide a Ioan to the Borrower in the amount of Fifteen Thousand Dollars ($15,000.00) for the payment of certain pedevelopment costs which the Borrower will incur if the Borrower investigates the Lease and negotiates a purchase agreement with the Seller for purchase of the LGsse. C. HBRA is wilding to provide a Ioan to the Bormmer on the terms and subject to the eonditims set forth in this Aft. l;7 NOW, THEREFORE, the Borrower and HBRA agree as follows: soctio_n I. Definitims,In addition to the terms defined elsewhere in this Loan Agreement, the following terms sisals have the following meanings: "Rorrawef means each of the persons and entities signing this Agreement as a Borrower. "MRA" means the Huntington Beach, California, Redevelopment Agency. " it " means the City of Huntington Beach, California. "Loam" means the loan by HBRA to Borrower evidenced by the Note. "Loan A menx t" means this Loan Agreement. n Amoure means Fifteen Thousand Dollars ($15,000). " an Document" means the Note, this Loan Agrecment, and any other document or instrument evidencing or securing the Loan. "Maturity Dae shall have the meaning given it in the Note. ikle means the promissory note of even date herewith in the fact principal amount of Fiftr. ca Thousand Dollars($15,000.00) executed by the Borrower in favor of HBRA. "Froper�t " shall have the meaning given it in Recital A. GX"ndocslt'I U,T-doc 4 Section 2. Rommel Covenants. Uc Borrower covenants and agrees as follows: -• - - -- - ... .2.1 rurchase Negotiations. The Borrower agrees to promptly commence negotiations with the Seller for the purchase of the Lease. The Borrower shall use the Borrower's best efforts to obtain a purchase agreement for the Lease on terms satisfactory to the Seller, the Borrower, and HBRA. In the event that the negotiations for the purchase of the Lease result in the Seller and the Borrower entering into a purchase agreement. for the Lease, the Borrower agrees to diligently pursue the purchase of the Lease in a commercially reasonable manner. 2.2 Property Investi agations. The Borrower agrees to provide HBRA with copies of all investigations and studies prepared by or for the Borrower and to provide HBRA with status reports relating to the purchase of the Lease, iacIuding the formation of a non-profit corporation, proposed financing sources, and Lease investigations. 2.3 Loan Proceeds. The proceeds of HBRA Loan shall be used solely for payment of the predevelopment costs identified in Section 4.1. Section 3. Representations and Warranties!Qf the Borrower. 3.1 &uthori The Borrower has the legal power, right and authority to execute this Loan Agreement and the other Loan Documents, and to undertake and consummate the transactions contemplated herein and therein, and to pay, perform and observe the conditions, covenants, agreements and obligations coutamed herein and therein. The individuals executing this Loan Agreement and the other Loan Documents on behalf of the Boux m= have the legal povmr, right and actual authority to bind the Borrower to the terns and conditions hereof ar-i thereof 3.2 Actions. All reT isite action has been taken by the Borrower in connection with the catering into of this Loan Agreement and the other Loan Documents and the consummation of the transactions cmitemplated hereby and thereby. 3.3 Valid Agreements. This Loan Agreement and the other Loan Documents and all other documents required hereby to be executed by the Borrower are and shall be valid, legally binding obligations of and enforceable against the Borrower in accordance with their respective terms. 3.4 Raresentations. No representation, warranty or statement of the Borrower in this Loan Agreement or in any other document, certi5cate or schedule furnished or to be furnished to HBRA pursuant hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact without which the statements or facts contained therein would be misdeading. Section 4. L.Mn Disbursm=ts. HBRA agrees to make disbursements of the Loan Amount on the following terms and conditions: 4.1 initial Disbursement. Upon execution of this Agreement, HBRA shall disburse to Borrower the sum of Fiftee-a Thousand Dollars (S1S,000.00) to be used by Borrower for payment of the following predevelopment costs in the approximate amounts set forth below for such predevelopment costs: G.UzandocsUUDv doe 5 A. Legal fees for appraisal, engineering study, Phase 1; Environmental study and survey of residents' income status $15.000.00 4.2 Qgnditions. A. In the event that (i) negotiations between the Seller and the Borrower for purchase of the Lease are terminated witbcut execution of a purchase agreement between, the Seller and the Borrower, or (ii) a purchase agreement for the purchase of the Lease which is acceptable to the Seller, the Borrower and HBRA is not entered into between the Seller and the Borrower and an escrow for the purchase of the Lease opened within ninety (90) days after the date of this Agreement, then the Note shall become immediately due and payable. B. If the lease purchase is completed then this loan shall become a grant. Section 5. Events of Default. At the option of HBRA, each of the following events shall constitute an Event of Default hereunder. 5.1 Default under Loan ]Documents. Any event of Default under the Note. 5.2 Representations and Warranties. The failure of 'any of the Borrower's representations or warranties contained herein or in any of the other Loan Documents to be true. 5.3 Voiunta;y 13anipry_ F.tc. The. Borrovvet's filing of a petition for relief under the Bankruptcy Reform Act of 1978, as amended or reaodified, or under any other present or future Federal or State law regarding bankruptcy, reorganization or other relief to debtors, or the Borrower's insolvency or inability to pay its debts as tLey mature, or the Borrmves malting a general assignment for the benefit of the creditors, or the Borrower's applying for a receiver, trustee, custodian or liquidator for the Borrower of any of its property or the filing by or against the Borrower of a petition or the commencement of any other procedure to liquidate or dissolve the Borrower. No notice or cure period shall be required. 5.4 Jnvolunl= Ban ruThe Borrower's failure to effect a full dismissal of any involuntary petition, under the Bankruptcy Reform Act of 1978, as amended or rocodified, or under any other present or future Federal or State law regarding bankruptcy, reorganization or other relief to debtors, that is filed against the Borrower or that in any way restrains or limits the Borrower or HBRA regarding the Loan, the Lease, or the Improvements, prior to the earlier of (a) the entry of any order granting relief sought in the involuntary petition, or (b) thirty (30) days after the date of the filing of the petition, or the Borrower's filing of any pleading in any such involuntary proceeding which admits the jurisdiction of the court or the petition's material allegatiors regarding the Borrower's insolvency. 53 Transfers. The assignment or transfer of any or all of the Bon-owees right under this Loan Agreement without HBRA's prior written consent as set forth in Section 12. 5.6 Other Defaults. The Borrower's failure to perform any of its other obligations under any covenant, condition or agreement set forth in this Loan Agreement if such G.V.oandocsV-DIMF.doc V failure continues after thirty (30) days after written notice from the Lender to the Developer, unless another time period is provided in this Loan Agreement with respect to a specific breach, in which event the other time period, if any, shall apply. Section 6, Remedies Upon the occurrenze of any Event of Default as defined in this Loan Agreement, in addition to its other rights set forth in this Loan Agreement or in any of the other Loan Documents, at law or in equity, HBRA may, at its option, without prior demand, exercise any one or more of the following rights and remedies: 6.1 Acceleration. Declare HBRA Note and all other sums owing to the Lender with respect to the other Loan Documents imrnediately due and payable. 6.2 •Leeai_and Equitable Rt iedicss. Proceed as authorized at law or in equity with respect to such an Event of Default, and in =uiection therewith remain entitled to exercise all other rights and remedies described in this Loan Agreement. All of HBRA's rights and remedies provided in this Loan Agreement, in any of the other Loan Documents, at law, in equity or otherwise, are cumula&ie and may be exercised by HBRA at any time. Tbc HBRA exercise of any right or remedy shall not constitute a cure of any Event of Default unless all sums then due and payable to HBRA under the Loan Documents arc repaid and the Borrower has cured all other Events of Default. No waiver shall be implied from HBRA's failure to take, or delay in taking, any action concerning any Event of Default, or from any prc%ious waiver of any similar or unrelated Event of Default. Any waiver under any of the Loan Documents must be in writing and shall be limited to its specific terms. Somdon 7. Notices. AR notices or otl= communications required or permitted under this Loan Agreement shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, and shall be deemod received: (i) if personally delivered, upon the date of delivery to the address of the person to receive such notice, (ii) if mailed in accordance with the provisions of this paragraph, two (2) business days after the date placed in the United States mail, or (iii) if mailed other than in accordance with the provisions of this paragraph or mailed from outside the United States, upon the date of delivery to the address of the person to receive such notice. Notices shall be given at the following addresses: If to HBRA: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach CA 92648 If to the Borrower. Huntington Harbour Mobile Estates Homeowners Association 16400 Saybrook Lane -- - -- . Huntington Beach, CA 92649 Ile address for delivery of notices may be changed by the relevant party by giving notice of such change in accordance with this paragraph. G.U.oandocsl RAEdoc 7 V Section 8. Complete Agreement_ Modifications, This Loan Agreement and the other Loan m Docuents entered into concurrently herewith () constitute the parties' entire agreement, including all terms, conditions, definitions, warranties, representations and covenants, with respect to the subject matter hereof, (ii) merge all prior discussions and negotiations beween or among any or all of them as to the subject matter hereof, gwd (iii) supersede and replace all terms, conditions, definitions, warranties, representations, covenants, agreements, promises and understandings, whether oral or written, with respect to the subject matter hereof. This Loan Agreement may not be amended, altered or modified except by a writing signed by the party to be bound. Section 9. Further Actions. Each party agrees to perform any further acts and execute and deliver any further documents reasonably necessary to carry out the provisions of this Loan Agreement. Section 10. Assignmen The qualificaticros and identity of the Borrower are of particular concern to HBRA. It is because of those qualifications and identity that HBRA has entered into this Lain Agreement %%ith the Borrower. Except as otherwise provided in this Section 10, no voluntary or involuntary successor in interest of the Borrower shall acquire any right or powers under this Loan Agreement without the prior written approval of HBRA_ The Borrower shall not assign or transfer all or any part of its rights and obligations under this Loan Agreement without the prior written consent of HBRA. Section 11. Successors and Assigns. Except as explicitly provided herein to the contrary, the Loan Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and permitted assigns. ection 12. Extension Not a Waiver. No delay or omission in the exercise of any pow`-er, remedy, or right herein provided or otherwise available to any party shall impair or affect the right of such party thereafter to exercise the same. Any extetu ion of time or other indulgence granted to a party hereunder shall not otherwise alter or affect any power, remedy or right of any other party, or the obligations of the party to whom such extension or indulgence is granted as specifically waived. Section 13. Time of Essence. Tune is of the essence of each and every term, condition, obligation and provision of this Loan Agreement. Section 14. No Third Party Beneficiaries. This Loan Agreement and each and every provision hereof is for the exclusive benefit of the parties hereto and not for the benefit of any third party. ection 15. Attorneys Fees. Should any litigation (including any proceedings in a bankruptcy court) or arbitration be commenced between the parties hereto or their representatives concerning any provision of this Loan Agreement or the rights and duties of any person or entity hereunder, the party or parties prevailing in such Iitigation or arbitration shall be entitled, in addition to such other relief as may be granted, to the attorneys' fees and court or arbitration costs incurred by reason of such litigation or arbitration, including attorneys' and experts' fees incurred in preparation for or investigation of any matter relating to such litigation or arbitration Section 16. Countcrpagg. This Loan Agreement may be signed in multiple counterparts with the same force and effect as if all original sigrtatums appeared on one copy, and in the event this Loan Agreement is signed in counterparts, each counterpart shall be deemed an original and all of the counterparts shall be deemed to be one agreement. GXomdocsu11M1 ;aloe Section 17. Applicable Law. This Loan Agreement shall be construed in accordance with, and governed by, the laws of the State of California. Executed by HBRA and the Borrower as of the date first written above. ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF GTON BEACH By. l , Chairman APPROVED AS TO FORM: Agency Clerk s rAgency Counsel L, BORROWER. HUN7MGTON HARBOUR MOBELE ESTATES HOMEOWNER r 1 • tn. . 1 President G._- G-V-omd=VIIMT—doc 9 L PROMISSORY NOTE - .$15,000.00..... _..__. ........,._..__.. ................ .HuntingtonBcach,California "Note Date"- LIAf- / ,1995 FOR VALUE RECEIVED, the undersigned (collectively, the 'Torr r') promises to pay to the REDEVELOPMENT AGENCY OF THE CITY OF HIJNTINGTON BEACH, or order (' ,ender') at 2000 Main Street, Huntington Beach, California 92648, or such other place as Leader may designate from time to time by written notice to Borrower, in lawful money of the United States, the principal sum of FIFTEEN THOUSAND DOULkRS ($15,000.00) with interest at the Interest Rate (as defined below) on the unpaid principal balance from the Note Date until paid. 1. nterest No intent shall be charged for the first ninety (90) days following the Note: Date. Commencing on the ninety-first (91st) day following the Note Date, interest shall be charged on the principal balance from tuna to time outstanding at the rate C'Interest Rate') of three percent (3%) per annum, I80 months. 2. PancntsJGrant 2.1 In the event that (I) negotiations between Mr. Les Frame (the 'Seller') and Borrower for purchase of the lease generally Iocated at I6400 Saybrook Lane, Huntington Beach, California commonly known as the Huntington Harbour Mobile Estates Homeowner's Association (the ' `Lease') are terminated without oxcucion of a purchase agreement between Seller and Borrower, or (ii) a purchase agreement for the purchase of the Property which is acceptable to Seller, Borrower and Deader is not entered into between Seller and Borrower and an escrow for the purchase of the Property opened within ninety (90) days after the Note Date, then the sum of Fifteen 'thousand Dollars ($15,000) shall become irnmediatcly due and payable, and upon payment of such sum by Borrower to Lender, Lender shall forgive the balance of this Note. This loan shall become a grant if the Borrower purchases such lease. 22 If not sooner paid, the entire unpaid principal balance, together with any accrued and unpaid interest shall be due and payable in full on the earlier of the following dates (the earlier of such dates hereinafter referred to as the ",Maturity Date"): (a) 90 days after Note Date as specified in Section 2.1 above. (b) _ d Y f .,, 199L or 180 months after Note Date. 3. Application of Paytnents. All payments received shall be applied first to charges other than interest and principal, if any, owing under this Note, then to accrued interest then due, then to principal; provided, however, that after the occurrence and during the continuance of any Event of Default (as defined below) all amounts shall be applied in such order as Lender, in its sole discretion, may elect. 4. LNm Aft This Note is made pursuant to a Loan Agreement of even date berewith ('LQan A¢reM00 and certain terms concerning the loan evidenced by this Note are governed by the Loan Agreeme m This Note, the Loan Agr mx=t and any other documents or instruments evidencing or securing the loan evidenced by this Note are hereinafter referred to as the "keen Documents." (;-U wndoc VaDwMdoc V 5. 'Late Charges. If any payment of principal, interest or other sum due under this Note is not paid within ten (10) days after it is duc, Borrower small pay to Leader a late payment charge equal to six percent (6.0%) of such overdue amount. The parties agree that such charge represents a fair and reasonable estimate of tk costs Le;n&r will -incur by reason of late payment. The parties further agree that proof of actual damam. would be costly or inconvenient. This provision shall not, however, be construed as extending the time for payment of any amount under this Note and acceptance of such later charge by Lender shall in no event constitute a waiver of Borrower's default with respect to such overdue amount nor provides Lender from exercising any of th. other rights and remedies with respect to such default. 6. a ern Borrower may prepay the principal amount outstanding in whole or in part at any time without penalty. 7. Waivers Borrower waives diligence, presentment, protest and demand and also notice of protest, demand, dishonor and nonpayment of this Note, and expressly agrees that this Note, or any payment hereunder may be extended from time to time and consents to the acceptance of further security or the release of any security from this Note, all without in any way affecting the liability of Borrower. The right to plead any and all statutes of limitations as a defense to any demand on this Note, or any and all obligations or liabilities arising out of or in connection with this Note, is expressly waived by Borrower to the fullest extent pernuttcd by law. No extension of the time for the payment of this Note, or any installment herco& made by the payment of this Note, or any installment hereof; made by agreement by Lender with any person now or hereafter liable for the payment of this Note; shall affect the original liability under the terms of this Note by Borrower even if Borrower is not a patty to such agreement. S. P3cfavlts: R medics. All principal, interest and other sums remaining unpaid under this Note shall, at Leader's option, became immediately due and payable upon the occurrence of any of the following events (each, an "Event of Ikfault"): 8.1 The failure of Borrower to pay in full, within ten (10) days from the date due, any payment of principal, interest, late charge or other sum due under this Note. 8.2 The failure of Borrower to perform any of the nonmonetary obligations of Boffcnver under this Note within thirty (30) days from written notice of such failure from Lender to Borrower, unless another time period is provided with respect to a specific breach, in which event the other such time period shall apply. 8.3 The occurrence or happening of any Event of Default as defined in the Loan Agreement. The failure of Lender to exercise any remedy provided hereunder shall not constitute a waiver of the right to exercise the same or any other remedy. The acceptance by the Lender hereof of any payment hereunder which is less than the payment in full of any amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing remedies. 9. Attorney' Fees. If the Lender should institute collection efforts of any nature Avhatsw,w to attempt to collect any and all amounts due hereunder upon the default of Borrower, Borrower shall be liable to pay to the mender immediately and without demand all reasonable costs and expenses of collection incurred by the Lender, including without limitation reasonable attorney's fees, G-V-QandocsV11O tE.doc 2 W whether or not suit or any other action or proceeding be instituted and specifically including but not limited to collection efforts that may be made through a bankruptcy court. 10. - —No PartmrsluM -- - It is ac1mv+deigv"M-agreed that nothing herein shall constitute Borrower and Lander as anything but borrower and lender and, specifically, that Borrower and Lender arc not partners nor joint venturers. 11. Tune of Essence. Tim. a is of the essence of each and every term, condition, obligation and provision of this Note. 12. Applicable Law. This Note shall be construed in accordance with, and governed by, the laws of the State of California.. 13. Ioint and Several Liability: joint and several. EXECUTED as of the Note Date. The liability of each person or entity signing this Note is BORROWER: HUNTINGTON HARBOUR MOBILE ESTATES HOMEOWNER ASSOC, INC. APPROVED AS TO FORM: /L, Agency counsel f,,,_3-2-3-'55- G-U=nd=\1M1Edoc DISCLOSURE STATEMENT TRUTII-IN-LENDING DATA 1. Amount Financed 2. Finance Charges A. Total interest 3% 3. Total Principal and Interest 4. Other Charges: A. Title Report B. Credit Report C. Other S. TOTAL 6. Total of Payment S18.643.50Tayable: -$ 15,000.00 $ 3,643_50 $ 18,643.50 $ NIA S NIA $ NIA S 18,643.50 Ln 180 monthly_installments_o_f_$l 03.58,per month commenciniz 20 day.2 after Loan �.� 7. Loan is secured by: ss ciao n LC. 1qo� fe &4afas ff :r _Signatures pf Officers gf ffuntinglon jb&pAHome Omm . 8. The purpose of this loan is for Phase 1 Study and Tenant Survey as stipulated in the Loan Agreement Section 4.1. The undersigned hereby acknowledges (1) Receipt of a copy of the disclosures. (2) That this disclosure is not an offer or commitment to make the loan described. (3). Any insurance written in connection with this proposed transaction against loss of or damage to property of against liability arising out of the ownership or use of the property may by the undersigned, provided such insurer is acceptable to the City, and (4) the proposed loan will be secured only by the collateral described in item 7 above. DATE: ! '� r7 6x� lC.srcc.�. 4 Raymond Manion, President G.VA=docsl ME1.doc 10 CASH RECEIPT 1 -F2"/ MAIN STREET HUNTINGTON BEACH CA 92648 • HUNnNGTON BEACH l { � i DATE ISSUING DEFT / TEIE # � t RECEIVED FROM ADDRESS TOTAL$ r 797579 ISSUING DEPARTMENT h r� M RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Loan Repayment COUNCIL MEETING DATETI November 6, 1995 RCA ATTACHMENTS STATUS Ordinance wlexhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if a licable Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (wlexhibits if applicable) (Signed in full by the qLtX Attome Not Applicable Subleases, Third Party Agreements, etc. _f6ppoved as to form Py Cit Attome Not Applicable Certificates of Insurance (Approved by the Cit Attome Not Applicable Financial Impact Statement Vnbud et, over $5,000 Not Applicable Bonds if applicable) Not Applicable Staff Report If a licable Not Applicable Commission, Board or Committee Report If a licable Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FOR DED Administrative Staff Assistant City Administrator Initial 07,e! City Administrator Initial CL Clerk EXPLANATION FOR RETURN OF ITEM: 4&V•;-c I IL1NTINGTON I1AItUC?UR MOBILE F STATES IIOMEOWNEWS ASSOC.IA7110N 10400 Saybrook Lane I luntinl;lou peach, CA 92649 Mr. Daniel F.. Ilruening I lousing Rehab Man;lgcr I)cpatimcnl of E ononnc 1 evelopnict11 Cily or I lunlifil"lon Ileach 2000 Main Sired I lunlinglon peach, CA 9210-18 Ili Dart, July 3, 1995 RECEIVED FROM ��� AND MADE A PART QF Ayp,- rOIA'� THE COUNCIL MEETING OF��-y S OFFICE OF HE CITYCL RK ^' CONNIE BRO6""'Y. Crry CLERK x*7' ke7jl 'Ilianks to your c1l'Orts, we received a check in llic amomil of" S 15,000.00 on Junc.x 1995 to perlitrm our 111118c I sludics (appraisal, cnl;inc coins; sludy, and environmental s imly). 11 look Ic,nger Than expccled, hill it %vas greal to receive it. 'plank you vcty touch. This cousttmnuttes an c11i1l that hugmi lirrmally on Decumber 5, 1994 (sec Allacliment 111). In our Board hiccling ol'Junc 23. 1995, we cuucluded Ilral it mmild nos be in the best interest to the C'ily anti our membership for its to cumpicle our 111me 1 studies, enter into an Agreement wills Les Fr;mic Vnlcipikes and (probably) the I'bclps family for the purchase orour Park and open an escrow, only Its ling lhal we cannot honor mir comulitniclils title to lack of binds to pursue Those 2. 1n our coninumicalion of December 5, 1994. %vc requesled hinds In [lie .lnloullt or $63,250, which would carry its Ihrotigh project completion. The IZC;A dates! April 3, 1995, to lire Mayor and City C'olincil Members recommended approval ol' S15,000, which we jusl rc:cvived, and phecd Iltc Cify Council oil notice 111a1 we would be retliicsfing additional Iunds lu complele subsuluenl phases (Sec Allachmenl 112, RCA doled April 3, 1995). We find Ilsal tier its to proceed tvilh the 1'llase 1 sfudics witlilrlll assurance lhal slit Phase 2 I1110-s aloe available dues nos make sound blisiness sclise, and has the polerilial orplacing the C'.ily and ounwIves in legal jeopardy. Therelorc, we rctluesl that $48,250 remaining funds which %vc retlticsted he made available as soon as passible to assist us will] Park purchase. We retluesl, lurllicr, that Ihcse lmids be made available under the sanic leims as Ihosc fill. Phase 1. We apologize for Ilriss seclniligly elevetllb hour rc(litest. Sevcral evcrils have Ininspired since our iliilial retitled on 1)cccnilvzr 5, 1O'M which (rave. Icad us to our cut-rcnt "wisdom". CI"I'Y OI: 111INTING'1ON BEAC[ I (conlinttc(l) Ilse rands we rquest .irc hudgcicd as follows: • Accounting Sci-vicus S.1,500 • Define lalc savings tucasures for presuntalion to Il:c tickers. • Prepare inilial operating huill;cl. • Prepare I'rolittma l'.rc.l . Slatc:cnicnis. • Prepare financial analyse% liw the CRY tit' I Ictttline;lrnt Balch. • Prepare tirsanc;ial :ts tecluitcd ICY prospWive lct►ders. • N•lisc. (1lher acuoctill ing docnnten(:tliim. + l xgal .1),mices $39,751) + Incorporation, including kylaws St. ('f.'&Its. • Offerirte; Circular. • Genera) Revenue Ilond Isscre. • Department of Corporalions approval. • Misc. Lcr.il Documcntation. • ltcscivc: . 5,90 1't )TAl . S-18,250 In sunimaty, ive suck $48,250 to perlinrm the Phase 2 Tasks, which will allow us to complcic [lie accluisilion. Wilhout Ibis Commilnteni hoist Ilse City, we have Iillle hope of consummating [lie puch:tsc ol'our Dark. c-n�. r.:�rrv, r 7Ceti ����-cam.. c1y� ltaymot I :. Nlaniotr I'resident Aluic1tmcnls: (1) LOW to Mike Adarns Baled 17J519-1 (2) W"'A dalcd 413/95 2 IIUNTINGTON IIARBOUR MOD ILE ESTATES I IOMf:OWNERS ASSOCIATION 16400 Saybrook Lane 1lun ington Beach, CA 92649 December 5, 199-1 Mr. Micltacl Adams 2000 Maid Street Huntington Bcach, CA 92648 Dear Mike, This lcltcr is provided Pursuant to your request of December 1, 1994. We understand that this lcltcr is to serve as supporlinb doc:unmcn(ation for a rcqucs[ to i)e made or oie city or 1 itrntinbton Bcach during the City Council meeting scheduled for December 19. 1994, fora grant in the amount of $63,250 to assist I luntinbton I Iarbottr Mobile [:states il► performing its duc ditibctuc in its pursuit to purchase the Park. We residents of 1 Iuntinbton I larbour Mobile Estates, who number approximately 199 Persons, have been pursuing the purchase orour Park for over five years. The first attempt coded without agreement of the partics. Our currcil pursuit to Purchase the Park began during file fourth quarter ol' 1992. As a first task, the ricw Board of the I lomeowncrs Association (I IOA) had to acquaint themselves with what had transpired (luring the earlier effort and ascertain lessons learned. One lesson [earned was that (lie for mcr board incurred considerable expense with an altorney who is well known far assisting residents with park purchase, only to have the transaction not bear fruit. This represcnial a significant cost to individual residents, which left r< very toad taste in their mouths. We want all the assurances we can get that our plan will meet with success, while expending little to no bark residctit funds. '13ic next major task was to search out individuals andlor orbanirrlions who assist Park residents in purchasing their ['ark. One orban't7.fion stood out on [lie list orthosc that we compiled (Our list included recommendations from GSMOi.). That organimlio'n is Community Service Group (CSCi), and (tic; rcferrul to this dcsg;tnirttiut► .tclu;►ley calm: rrom one ol'our residents. Next, we interviewed our top candidates. As we closed in on Community Service Group as our choice, we rescarched referemcs, Parks whcrc this organixttlion had successes and[ projects underway, and City Administration represcnmatives where they had projects (closed and open). City orIluuliuglon Belch 1 or4 W k.. ) m This research involved a large group of residents, and each prepare([ reports of thcir findings. Finally, the current l IOA hoard of Directors invitee[ tlic fonncr Board {embers to a Hoare[ mccling, wlx:re all of our findings were reviewed. I'm crilcria stood otit in selecting Community Service Group: They have a demonstrated track record and they work much like Realtors, wherein they tact paid at the: end of the project alter it closes escrow. We have not had to put up any li-ont end monies. On April 21, 1994, we enter(([ into an employment contract with Community Service Group to assist we lark residents wills [lie purchase of our park. A copy ol'this contra{fit is attac[,ed far your review (Atlachmcnt 111). Next, Mr. Les Frantic, the Park owner, was coulacted, and a meeting was arranged. In that meeting, Mr. Frame agree([ to sell the Park to we resicicnts. It was agreed [lint CSG would tax a contract to Mr. Frantic for sig ilawre. A copy of that c:ce;cutcd agreement to sell the Park is allachcd (Attachmcnt 112). The busincss of the Park is on lease land, and that lease is held by the Phelps family. Preliminary discussions will{ the Pliclps family mgarding the purchase of the land have left its without an offer to sell from the Phelps. We will revisit this item at a laler dale when we can firmly cicsin}nstratc to then) that this: project is real and that they now have n rare window of opportunity. l lowever, we intend to proceed with Park purchase, even if the Phelps decide to not sell the lane[. We are currently performs{lg; our duo: diligence. Asa part of this effort, we have idesilifsed our cash requirements to proceed with our due dilig cnec. j'olal estimated costs are $63,250, and all of the line items on the budge[ arc supported by competitive bids. A copy of Ibis budget is attached (Attaclltttetit 113). Very CrlllC:ll ltc{11S o�1 tllc l}4�11g;Ct sliclLtllc a!� ;llllzra{sal, a{1 c{lg;{11Ccr{slg study, and a low income study. We hatvc momentum on our side right now in complctis{g; this project. We have a willing; seller and a willing buyer. We have researched and identified two sources of funding; for a new loan on (lie Park: Through a bond and throug;lc n local bank. To maintain this momentum, we need to launch the three study items uamcd above as soon as Possible, and to complcic the remainder of the items on our budget (Atlachntc:nt 113). 'Ibere arc: insufficient monies in our treasury to Fluid the needed $63,250, and because (1) a very large number of the residents qualify as moderale to very low inconic liouscholds and (2) the past cxpericncc of the residents where they spent a very large sum of money with nn attorney only to have; the project fail, the [Board has been reluctant to lake this matter to the membership without first exploring other avenues. This explains why we have come to the City tier assistance. We know thata. very large number of [lie residents qualify as moderalc to very low income households. Conscqucntly, these households can qualify fora number ofsources of Funds, for clown payment assistance and other needs. One: of lire items on our budget (Attachment 113) is City of I IL111611gloli beach 2 of 4 the conduct of a Iow income s(utly, tat order to arrive at some order of magnitude of how many of the residents fall into what income category, CSG performed in informal survey. The results of that survey indicate that 22% of (lie residents are Very Low Income liouscholds, 23%arc Low Income households, and 32% arc Moderate Income households, fora total of 77% of the residents being moderate to very low income liouseholds. Because of (lie income prof ile of (lie Park residents, we feel that the Park qualifies fora grant of funds from the City in the amount or$63,250 to perform its cane Eiligence. A source of fiords that has been identified to us is the Ilousing Setaside Funds. The precedent for providing us with this grant is (Ile one or more 4-plexes wherein upwards orS200,000 has been granter[ to cacti Project. These funds bencritcd approximately 16 residents (or Prospective residents -- considering 4 residcnts per unit), whereas (lie grant of $63,250 will bene[it approximately 199 residcnts, 77% of whop[ :ire moderatc to very low income households. A very large number of Park residents have lived in I1un(ing(on I l.arhour for 20 years or more. They moved into the Park with their re(irement incomes and at a time when space rent was approximately $275 per month. The clistiing 20 years 1mve resulted hi the fallowing: (1) Space rents have escalated to $565 and more per montli, to be among [lac lop 3-4 in mobile liomc park rents irl r rtlrlt;ngltirl Iicat:h. (2) Income Ix:r hatlselacild has prat kept p;lt:e with real cscalalion. 1n fact, many of the residcnts are now widowed, resulting in cutting their household income in hair or less. (3) 'llic stancl;ird of riving of lolig term resiclenls has declined clrantalieally, antl tlic reserves that they put away fora rainy Clay are now depleted. (4) Long term residents are captive. They have no way of escaping an existence which, for flicni, continues (o decline. All of you arc aware of the fact lha( as space rcn[s have grown to near -unmanageable values, with I lulitington-lay-The-Sca leaning the pack, a movement to real colilrol has gained considerable favor. We believe that the concept of resident owned Parks is a far superior solution to gaining control of space rents. Not only is this a better way to go for the City, but it gives us a tool for helping our own -- our long term residents. I Inn(ing(on Ilarbour Mobile Estates is of%ring the City, by example, rite hest solution to rent Control. In strlmnary, we seek a grant tram [he City of I luntington Deach in tllc amount of $63,250. This amount is seed money to enable its to sustain file momentum we now have, by allowing its to go forward with our true diligence. The income profile of residents demonstrates our lived. Ilic deliberate way in which we have pursued our goal goes a long way toward insuring; its successful achievement by (Ile end of late first quar(er of 1995. I lo%%,cvcr, we need your assistance in orcier for us to nchicvc our dream. And your asssistaticc greatly assists the City through file joint lendersh'tp we provide [car this difficult rent content ismic that is catlfronting the City. We request that our request be placed on the agenda of (lac City Council fear December 19,1994, for action. We stand ready it) atiSlSl yoll ill any way nectled towortl thi% elid. I wean[ to assure you that your help with (his endeavor will never be forgotten by the residents of I luntington i I;lrlaour Mobile iislalcs. We will reel ourselves to be Indebted to the City forever for all of the help you have given us. City orttunIington [teach 3 or4 Thank you for your altention to our request and far all of ific assislance you line provided its to date. Cordially, Dallas Morin President A113clImmis: (1) Contract with Community Service Group dated April 20, 1994 (2) Offer to Sell I luntinl ton I larbour Mobile Estates from Mr. Les Frame dated May 12, 1994 (3) I-Iuntinglon Harbour Mobilc Estates Cash Requirements for Performing Due Diligence IIuntington Beach City Council Members City orihinlinbtoii Beach 4 oN BEQUEST FOR COUNjL ACTION April 3, 1995 Submitted to: Honorable Mayor & City Council Member � Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Ray Silver, Assistant City Administratorel ,. Subject: AUTHORIZE REDEVELOPMENT AGENCY TO ENTER INTO A LOAN AGREEMENT WITH HUNTINGTON HARBOUR MOBILE ESTATES Consistent with Council Policy? [ ] Yes [ J New Policy Statement of Issue, Recommendation, Analysis, Funding Source. Atternale Actions. & Attachments STATEMENT OF ISSUE: Staff is requesting authorization to enter into a loan Agreement with Huntington Harbour Mobile Estates Homeowner Association in order to pursue the preliminary step for resident acquisition of the park. The loan will be $15,000 at a three percent (3%) interest rate amortized for 15 years. FUNDING SOURCE: Redevelopment Agency Affordable Housing Fund RECOMMENDED ACTION: Staff recommends that Council take the following actions: a) Approve the Loan Agreement and Promissory Note between the City of Huntington Beach and Huntington Harbour Mobile Estates, Inc.for the sum of $15.000 at three percent (3%) amortized over 15 years to conduct phase 1 studies for resident acquisition. b) Approve and authorize execution by the Mayor and City Cleric of the Loan Agreement between the City of Huntington ©each and Huntington Harbour Estates, Inc. for _ 1 studies for resident acquisition. ALTERNATE ACTIONS: The Council may motion to 1) direct staff to re-negotiale the terms of the proposed transaction, 2) continue for further information, or 3) deny. PAGE 2 ANALYSIS: The Huntington Harbour Mobile Estates Homeowners' Association has requested the assistance of the Huntington Beach Redevelopment Ardency in financing the initial studies it convert their park into a resident owned facility. February G, 1995, a Request for Council Action was presented to the Council for your review. At that time, Council directed staff to initiate modifying terms. Staff has met with the homeowners' association and have agreed that the loan will be a three percent (3%) loan amortized over a 15 year period if the ac -,:.ikon does not go forward within 90 days. In this effort, the Association has contracted with Community Service Group, a consulting firm which specializes in mobile home conversions. The cost for the preparation of the various preliminary documents totals approximately $63,000. These documents are prepared in three phases. The first phase addresses the residents' profile to determine that the tenants qualify for Agency affordable housing assistance, an appraisal of the park, and an engineering report to determine the status of the park infrastructure. The first phase will cost approximately $15.000. If the project does go forward to the next step, the Association will be requesting further assistance from the Agency for the funding of Phase 11 and 111 studies, approximately $48.000. At that time, an affordable housing agreement would be required to assure that thr housing does stay affordable for a minimum of 30 years. The Homeowners Association at their March 2, 1995 meeting passed a resolution Agency assistance. ATTACHMENTS: 1. Loan Agreement and Promissory Note. 2. Huntington Harbour Mobile Estates Homeowners Resolution dated March 2, 1995. 3. Huntington Harbour Mobile Estates Homeowners letter dated December 5, 1995. 4. Background information on Community Service Group. 5. Previous RCA dated February 6, 1995 6. Letter to Victor Leipzig dated March 1, 1995 from Charles & Bessie Levy. �- .;b �ld HUNTINGTON BEACH REDEVELOPMENT SET -A -SIDE {EST, FUND BALANCE t .. .{• .'y .kf.. -.�2,052,000{$208�8t8. `FY.94195 } FY95196 FY 96197 INCOME Tax Increment $ 871,076.00 $ 891.415.00 S 914,291.00 Interest Income r Five Points Senior Villas $ 9,500.00 _� $ 38.000.00 $ 38,000.00 Loan Interesl Income In Lieu Fee Affordable Housing $ 50.000.00 Fees Collected Return of Mora Kai Pledge $ 385.563.00 $ 385.563.00 TOTAL INCOME "J:' ::::'a.: ' $ >- 880.576.00: $ x-1;314,9T8.00 "' 1,387,854:00 Expenses O eraling Expenses _ _ $ 123.677.00 $ 129,861.00_ $ 136,354.00 Administrative Costs $ 60.699.00 $ 63,734.00 $ 66.921.00 Legal Services $ 20.100.00 $ 30,100.00 $ 30,100.00 _ _ Administrative Costs $ 3,790.00 $ 7,790.00 $ 7,790.00 TOTAL- OPERATING EXP.`: ' , $->-,- . 208,266.00 $� -.:'231,485.00 $ ;. 241A65.00 Projects Mora Kai (Pled r e) $ 385.563.00 $ 385,563.00 S 385.563.00 Five Points $ 100.000.00 $ 100,000.00 $ 100.000.00 725 Utica $ 450,000.00 Pacric Park Villas $ 300,000.00 $ 450,000.00 Bdsas Del Mar $ 243,717.00 ERAS= $ 139.142.00 M.C.C. 30.000.00 S 30.000.00 S 30.000.00 Emerald Cove _5 $ 80.000.00 $ 80,000.00 5 80,000.00 Third Block West $ 825.000.00 TOTAL PROJECT EXPENSES $. -: '1,728,422.00. $', '.1,870,563.00. S . .: 595,563.00 FUND BALANCE :.. $ .:. 995 888.00 ` $ . = 208 818.00 . 759 944.00 V PROMISSORY NOTE. $ 15,000.00 "Ngle Dale": .1995 I [untington Beach. California FOR VALUE RECEIVED, the undersigned (collectively, the " Borrowgr') promises to pay to the REDEVELOPMEN'r AGIsNCY 01' '['11li C I'lY 01' IIUN'rINCi'rON BEACH, or order ("bender') at 2000 Main Street, I Iuntington Beach, California 92648, or such other place as Lender may designate from time to time by written notice to Borrower, in lawful money of the Unitcd States, the principal sum of FIFTEEN TIIOUSAND DOLLARS (S15,000.00) with interest at (lie Intcrest [Life (as defined below) on the unpaid principal balance from the Note Dal-- until paid. 1. Interest. No interest shall be charged for the first nincty (90) days following; the Note Date. Conunencing; on the nincty-first (91st) day following (lie Note Date, interest sliall be charged on the principal balance from time to time outstanding; at the rate ("interest )late') of three percent (3%) per annum, ISO months. 2. Pa3a,ncnts/Grant. 2.1 In the event that (1) negotiations between Mr. Les frame (the 'Scllcr') and Borrower for purchase of the lease generally located at 16400 Saybrook Lane, Huntington Beach, California commonly known as the Huntington Barbour Mobile Estates Homcmmer's Association (the 'Lease') arc ternunatcd without execution of a purchase agreement between Seller and Borrower, or (ii) a purchase agreement for the purchase of the Property which is acceptable to Seller, Borrower and Under is not entered uito between Seller and Borrower and an escrow for the purchase of the Property opened %within ninety (90) days after the Note Date, then the sum of Fifteen Thousand Dollars ($15,000) shall become immediately due and payable, and upon payment of such sum by Borrower to Lendcr. Under shall forgive the balance of this Note. This loan shall become a grant if the Borrower purchases sucli [case. 2.2 If not sooner paid, the entire unpaid principal balance, together with any accrued and unpaid interest shall be due and payable in full on the earlier of the following dates (the earlier of such dates hereinafter referred to as the "Maturity Date'): (a) 90 days after Note Date as specified in Section 2.1 above. (b) . 199. , or 180 months after Note Date. 3. Application of Palmicnts. All payments received shall be applied first to charges other than interest and principal, if any, owing under this Note, then to accrued interest then due, then to principal; provided, however, that after the occurrence and during; the continuance of any Event of Default (as defined below) all amounts shall be applied in such order as Lcndcr, in its sole discretion, may elect. 4. Loin A rccmcnt. Tliis Note is made pursuant to a Loan Agreement of even date herewith ("Loan Agreemen ') and certain terms concerning; the loan evidenced by this Note are governed by the Loan Agreement. This Note, the Loan Agreement and any other documents or instruments evidencing or securing the lo.'tn evidenced by this Note are hereinafter referred tons (lie "Loan Documents." GALo4iWocsU 11IMt..doc 5 1 ate Chimes If any payment of principal interest or other sum due under this Note is not paid within tell (10) days after it is due, Borrower shall pay to Lender a late payment charge equal to six percent (6 0%) of such overdue amount I lie parties agree that such charge represents a fair and reasonable estimate of the costs Lender will incur by reason of late payment The parties further agree that proof of actual damages %%ould be costly or inconvenient llhis provision shall not, however be construed as extending the, time for paynunt of uny amount under this Note and acceptance of such later charge by Lcndcr shall in no event constitute a waiver of Borrower s default with respect to such overdue amount nor provides Lender from exercising any of the other rights and remedies with respect to such default 6 Prepayment Borrower may prepay the principal amount outstanding in whole or in part at any time without penalty 7 Waivers Borrower waives diligence presentment protest and demand and also notice of protest demand dishonor and nonpayment of this Note and expressly agrees that this Note, or any payment hereunder may be extended from time to time and consents to the acceptance of further security or the release of any security from this Note all %%ithout in any %%ay affecting the liability of Borrower The right to plead any and all statutes of limitations as a defense to any demand on this Note or any and all obligations or liabilities ansing out of or in connection with this Note is expressly waived by Borrower to the fullest extent pcnmitted by law No extension of the time for the payment of this Note, or any installment hereof made by the pad ment of this Note or any installment hereof made by agreement by Lender %%ith any person now or hereafter liable for the pa}ntcnt of this Note shall affect the original liability under the terms of this Note by Borro%%cr even if Borrower is not a party to such agreement 8 Defaults Remedies All principal interest and other sums remaining unpaid under this Note shall at Lender s option become immediately due and pa3able upon the occurrence of any of the following events (each an Event of Default ) 8 1 The failure, of Borrower to pay in full %%idun tell (10) da)s from the date due any pa) ment of pnincipal interest late charge or other sum due under tus Note 82 The failure of Borrower to perforni any of the nommonetary obligations of Borrower under this Note %%ithm thirty (30) days from written notice of such failure from Lender to Borrower unless another time period is provided with respect to a specific breach to which event the other such time period shall apply 83 the occurrence or happening of any Event of Default as defined in the Loan Agreement llte fulum of Lender to exercise any remedy provided hereunder shall not constitute a %%aiver of the right to c\crcise the same or any other remedy The acceptance by the Lender hereof of any payment hereunder %%hich is less than the payment in full of any amounts due and payable at the time of such pas mcnt shall not constitute a %%ancr of the right to exercise an3 of the foregoing remedies 9 Attorney s fees If the Lender should institute collection efforts of any nature whatsoever to attempt to collect and and all amounts clue hereunder upon the default of Borrowcr Borrower shall be liable to pay to the Lcndcr immediately and N%ithout demand all reasonable costs and expenses of collection incurred b) the I ender including wthout limitation reasonable attorney s fees G u oandocsM-11 EML doc 2 6 M whether or not suit or any other action or proceeding be instituted and specifically including but not limited to collection cfforis that may be made through a bankruptcy court. 10. � o_Partncrship. It is acknowlcdgcd and agreed that nothing, Ilcrcin shall constitute Borrower and Lcndcr as anything but borrower and lender and, specifically, that Borrower and Under are not parincrs nor joint venturers. .11. '1�ime of rsscncc. Time is of tic csscnce of each and cvcry term, condition, obligation and provision ofthis Note. 12. )lica hle Law. This Note shall be constnled in accordance with, and governed by, the laws of the State of California. 13, Joint and Several Liability. joint and several. EXECUTED as of the Note Datc. 11c liability of each person or entity signing this Note is BORROWER: IIUNTINGTON HAR13OUR MOBILE ESTATES 1101MEOWNER ASSOC., INC. By: By: Raymond Manion, President lane Coleman, Treasurer APPROVED AS TO FORM: /I--- /Agency Counsel 3 2-3 -5 5— G.%oandocsM U DAE.doc 3 LOAD` AGREEMENT TI [IS LOAN AGREEMENT ("Loan Agrccmcnt') is entered into as of . 1995 bcthvccn the I IUNTINGTON BEACI I REDEVELOPh413N'r AGENCY ("I [BRA') and the undersigned (collectively, (lie "Borrower'} with regard to the following: TZECITAi,S A. The Borro%vcr shall be givcn nctice by an agent for Mr. Us Frame the "Seller') that the Sc11er intends to sell the real property generally located at 16400 Saybrook Lane, Huntington Beach, California, commonly known as the Iluntingto:i harbour Mobile Estates Ilomcowncrs Association (the "Lease') and that, pursuant to Chaptcr 2.90 of the I Iuntington Beach Municipal Code, the Borrower has a ninety (90) day right of first refusal to purchase the Lease. B. The Borrower has requested I13RA to provide a loan to the Borro«^cr in the amount of Fifteen Thousand Dollars ($15,000.00) for the payment of certain predevclopment costs which the Borrower will incur if the Borrower investigates the Uase and negotiates a purchase agreement with the Sellcr for purchase of the Lease. C. I Q3I.A is willing to provide a loan to the Borrower on the terms and subject to the conditions set forth i t this Agreement. NOW, THEREFORE, the Borrower and I MRA agree as follows: Section 1. Definitions. In addition to the terms defined elsc%vhcrc in this Loan Agreement, the following terms shall have the follotitiring meanings: "Borrower" mcans each of the persons and entities signing this Agrccmcnt as a Borrower. "!BRA" mcans the I Iuntington Beach, California, Redevelopment Agency. "" means the City of I Iuntington Bcach, California. "Loan" means the loan by I IDRA to Borrower evidenced by the Note. "Loan Agrccmcnt" means this Loan Agrccmcnt. "Loan Amount" mcans Fiticcn Thousand Dollars ($15,000). "Loan Documents" mcans the Note, this Loan Agreement, and any other docnntent or instrument evidencing or securing the Loan. "Mahte' shall have the meaning givcn it in the Note. 'Vote" means the promissory note of cien date herewith in the race principal amount of Fifteen Thousand Dollars($15,000.00) executed by the Borrower in favor of 1 [BRA. "Property" shall have the tncaning givcn it in Recital A. G.0 ndocsll 11 iME.doc cctiQn 2. Da:r-LS-covo—nin s. 'rile Borrowcr covenants and agrees as follows: 2.1 Purchase NcC tialions. The Borrower agrees to promptly commence negotiations with Ilia Scllcr for Ilia purchase of the Lease. 'floc Borrower shall use Ilia Borrowers best efforts to obtain a purchase agreement for the Lease on tams satisfactory to the Scllcr, the Borrower, and IIBRA. in the event that the ucgotiations for the purchase of the Lease result in Ilia Scllcr and the Borrower entering into a purchase agrccrncnt for the Lease, the Borrower agrees to diligently pursue the purchase of the Lease in a conuntcrcially reasonable manner. 2.2 Properly-frivefi ations. The Borrower agrees to provide IIBRA «ritti copies of all investigations and studies prepared by or for (lie Borrower and to provide I [BRA with status reports relating to the purchase of the Lease, including the fonnation of a non-profit corporation, proposed financing sources, and [.case investigations. 2.3 Doan Proceeds. The proceeds of 1 I131ZA Loan shall be used solely for payment of the prcdcvelopnncnt costs identified in Sccl ion. 4.1. ccti n 3. Rc nl resentations and Warranties of Ilia Borrower. 3.1 Authority. The Borrower has the legal power, right and authority to execute this Loan Agreement and the other Loan Documents, and to undertake and consummate the transactions contemplated herein and thcrcin, and to pay, perform and observe Ilia conditions, covenants, agreements and obligations contained herein and thcrcin. 71i: indi-siduzls executing this Loan Agreement and the other Loan Documents on behalf of the Borro%vcr have the legal power, right and actual authority to bind the Borrower to the terms and conditions hereof and thereof. 3.2 Actions. All requisite action has been taken by the Borrower in connection with the entering into of this Loan Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby. 3.3 Valid Agreements. This Loan Agreement and the other Loan Documents and all other documents required hereby to be executed by the Borrower are and shall be valid, legally binding obligations of and enforceable against the Borrower in accordance with their respective terms. 3.4 Rc prescL_ ntations. No representation, warranty or statconcnt of the Borro%vcr in this Loan Agrccncnt or in any ether document, certificate or schedule fumislicd or to be furnished to HBRA pursuant hereto contains or will contain any untrue statement of a material fact or omits or i%ill omit to state a material fact without which the statements or facts contained therein would be misleading. Section 4. Loan Disbursements. I113RA agrees to make disbursements of the Loan Amount on the following terms and conditions: 4.1 lnirial Disburscmcnt. Upon execution of this Agrccmcnt. IIBRA sliall disburse to Borrower Ilia sum of ri[lccn Thousand Dollars ($15,000.00) to be used by Borrower for payment of the following predeveloprnent costs in the approximate amounts set forth below for such prcdcvclopmcnt costs: GM. andocsll tl MIE.doc . 1h A. Legal fees for appraisal, engineering study. Phase 1; Environmcntn) stuciy and survey of residents' income status $15,000.00 4.2 Conditions. A. In the event that (i) ticgotiations bctwccn the Seller and the Borrower for purchase of the Lcasc are lennin.tted without execution of a purchase agrccmcnt bct%vccn the Seller and the Borrower, or (ii) a purchase agrccmcnt tar the purchase of ilia Lease which is acceptable to the Seller, the Borrower and 1 IBRA is not entered 'into bctwccn die Seller and the Borrowcr and an cscro%v for the purchase of the Lease opened within ninety (90) clays afler the date of this Agreement, then the Note shall become immediately duc and payable. B. If the lease purchase is completed then this loan shall become a grant. Section 5. Events of Default. At (lie option of I IBRA, each of the follo%ving events shall eoristitutc an Event of Default hereunder: 5.1 Default under Loan Documents. Any event of Default under the Note. 5.2 Representations and Warranties. Tlie failure of any of the Borrower's representations or warranties contained herein or in any of the other Loan Documents to be true. 5.3 Voluntary Bankruptcy, Etc. Thc Borrower's Cling of a petition for relief under the Bankruptcy Reform Act of 1978, as amended or rccodificd, or under any other present or future Fcderal or State iaw regarding bankruptcy, reorganization or other relief to debtors, or titre Borrower's insolvency or inability to pay its debts as they mature, or the Borrower's making a general assignment for the benefit of the creditors, or the Borrower's applying for a receiver, trustee, custodian or liquidator for the Borrower of any of its property or the filing by or against the Borrower of a petition or the commencement of any other procedure to liquidate or dissolve the Borrower. No notice or cure period shall be required. 5.4 Involuntary 13ankrrntcv. 'ilia Borro%vcr's failure to cffect a full dismissal of any involuntary petition, under ilia Bankruptcy Reform Act of 1978, as amended or reeodified, or undcr any other present or future Fcdcral or State law rcgarding bankruptcy, reorganization or other relief to debtors, that is filed against the Borrower or that in any way restrains or limits ilia Borrower or IBRA regarding the Loan, ilia Lease, or ilia Improvements, prior to the earlier of (a) ilia entry of any order granting relief sought in the involuntary petition, or (b) thirty (30) days aflcr the date of the filing of the petition, or the Borrower's filing of any pleading in any such involuntary proceeding which admits the jurisdiction of the court or ilia petition's material allegations regarding the Borrowcr's insolvency. 5.5 Transfers. Thc assignment or transfer of any or all of ilia Borrower's right undcr this Loan Agreement without 1 IBRA's prior written consent as set forth in Section 12. 5.6 Othcr Defaults. '11ic Borrower's laihlre to perform any of its oilier obligations under any covenant, condition or agrccmcnt set forth in this Loan Agreement if such G.U.oandocsV U tME.doc failure continues'afler thirty (30) days ancr written notice from the Lender to the Developer, unless another time period is providcd in this Loan Agreement with respect to a specific breach, in which event the other time period, if any, slizli apply. Section 6. Remedies Upon the occurrence of ally Evcnt of Default as defined in this Loan Agreement, in addition to its other rights sct forth in this Loan Agreement or in any of the other Loan Documents, at law or in equity. I IBIZA may, at its option, without prior demand, exercise any one or more of the following rights and remalics: 6.1 Acceleration. Declare IIIIRA Note and all other sums owing to the Lender with respect to the otlicr Loan Documents immediately due and payable. 6.2 L,enal and Ignitable Remedies. Proceed as authorized at law or in equity %%ith respect to suet► an Event of Default, and in connection therewith rcmain entitled to exercise all other rights and rcmcdics described in this Loan Agreement. All of I IBRA's rights and remedies providcd in this Loan Agreement. in any of the other Loan Documents, at law, in equity or other►►'isc, are cumulative and may be exercised by I IBRA at any time. I3tic I MRA exercise of any right or remedy shall not constitute a cure of any Event of Default unless all sums then due and payable to I IBRA under the Loan Documents are repaid and the Borrower has cured all other Events of Default. No %vaivcr shall be implied from I111RA's failure to take, or delay in taking, any action concerning any Event of Default, or from any previous ►vaivcr of any similar or unrelated Event of Default. Any waiver under any of the Loan Documents must be in writing and shall be limited to its specific tens. Section 7. Notices. All notices or other communications required or permitted under tliis Loan Agreement shall be in writing, and sliall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received: (i) if personally delivered, upon the date of delivery to the address of the person to receive such notice, (ii) if mailed in accordance ►%ith the provisions of this paragraph, two (2) business days after the date placed in the United States mail, or (iii) if mailed other than in accordance with Vic provisions of this paragraph or mailed from outside the United States, upon the date of delivery to the address of the person to receive such notice. Notices shall be given at the following addresses: If to I IBRA: I Redevelopment Agency of tltie City of I Iuntington Beach 2000 [Bain Strcet Iluntington Bcach, CA 92648 If to the Borrower: I luntington I [arbour Mobile Estates I lomcowners Association 16400 Saybrook Lane I Iuntington Bcach, CA 92649 The address for delivery of notices may be changed by the relevant party by giving notice of such change in accordance with this paragraph. GMoindocsV U 1MSdoc 7 11) Section 8, ompl�tc At►rc merit ModiFcatior�. This Loan Agreement and the other Loan Documents entered into concurrently herewith (i) constitute the parties' entire agrccmcnt, including all tennis, conditions, definitions, warranties, mprescrntations and covenants, with respect to the subject matter hcrcof, (ii) merge all prior discussions and negotiations between or among any or all of them as to the subject rnatter hcrcof, and (iii) supersede and replace all terms, conditions, definitions, warranties, representations, covenants, agreements, promises and understandings, whctlier oral or written, with respect to the subject matter hcrcof. 'Mis Loan Agreement may not be amended, altered or modified except by a writing signed by the party to be bound. Section 9. Further Actions. Each party agrees to perform any further acts and execute and deliver any further documents reasonably necessary to carry out the provisions of this Loan Agrcctnctit. Section 10. As1igi-1111ent. 'Mc qualifications and identity of the Borrower are of particular concern to 1IBRA. It is because of those qualifications and identity that IIBIZA has entered into this Loan Agreement with the Borrower. L'•xccpt as othcnvise providcd in this Section 10, no voluntary or involuntary successor in interest of [lie Borrower shall acquire any right or po",crs under this Loan Agreement without the prior written approval of IIDRA. 'Ilrc Borrower shall not assign or transfer all or any part of its rights and obligations under tl•.is Loan Agreement without the prior written consent of 1 [BRA. Section 11. Successors and Assigns. Except as explicitly provided herein to the contrary, the Loan Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and permitted assigns. Section 12. Extension Not a Waiver, No delay or omission in tic exercise of any po%rer, remedy, or right herein provided or otherwise available to any party shall impair or affect the right of such party tiercaiter to exercise the same. Any extension of time or other indulgence granted to a party hereunder shall not othenvise alter or affect any power, rcnicdy or right of any other party, or the obligations of the party to whom such extension or indulgence is granted as specifically waived. Section 13. Time of Essence. Time is of the essence of each and every term, condition, obligation and provision of this Loan Agreement. Section 14, No Third I'afty Beneficiaries. This Loan Agreement and each and every provision hcrcof is for the exclusive benefit of the parties herclo and not for the benefit of any third party. ccti n 15. Altorncv's Ems. Should any litigation (including any proceedings in a banknptcy court) or arbitration be commenced bet%vecit (lie parties hereto or their representatives concerning any provision of this Loan Agreement or the rights and duties of any person or entity hereunder, the party or parties prevailing in such Litigation or arbitration shall be entitled, in addition to such other relief as may be granted, to the attorncys' fccs and court or arbitration costs incurrcd by reason of such litigation or arbitration, including attorneys' and experts' fccs incurrcd in preparation for or illvcstigation of any matter relating to such litigation or arbitration. Section 16. unicgj!irts. This Loan Agreement may be signcd in multiple counterparts with the same force and effect as if all original signatures appeared on one copy; and in the event this Loan Agreement is signed in counterparts, each counterpart sliall be deemed an original and all of the counterparts shall be deemed to be one agreement. GALoindocsll 11 IME-. dvc ecti n 17. ApI icable 1-1w. This Loan Agreement shall be construed in accordance with, and governed by, the laws of the State of California. Exceeded by I [BRA and the Borrower as of the date first written above. ATTEST: Agency Clerk REDEVELOPMENT AGENCY OF THE CITY OF I IUNTINGTON BEACI I By: Chairman APPROVED AS TO FORM: zf�� rAgency Counsel 7 3 - I r BORR0IVER: 1 IUNTINGTON I IARDOUR MOBILE ESTATES HOMEOWNER ASSOC., INC. Raymond Manion, President Jeane Coleman, Treasurer G:ILoandocA 11INIE.doc 9 I Jf CITY OF HUNTIINOT�b)N 131EACH • 1NTEII-DEPARTMENT COMMUNICATION IWNIINGION 9IAC11 TO: MICHAEL T. UBERUAGA, City Administrator FROM: ROBERT J. FRANZ, Deputy City Administrator SUBJECT: REQUESTED APPROPRIATION FOR REDEVELOPMENT AGENCY LOAN AGREEMENT WITH MOBILE HOME PARK, FIS 95-20 DATE: MARCH 10, 1995 As required by Resolution 4832, a Fiscal Impact Statement has been prepared for the proposed appropriation of $15,000 for purposes of pursuing the preliminary steps towards resident acquisition of the Huntington Mobile Estates Park. Upon approval of the City Council, the balance of the Cash and I the Housing Set -Aside Fuund would be reducel to $1,996,000. A Deputy City RJF:skd ministrator tments in .0010979.01 03123M5 5:05 PM DISCLOSURE. STA,rEmENT TRUTINN-LLNI)1NG DRTA. I. Amount Financed 2. Finance Charges A. Total Interest 3% 3. Total Principal and Interest 4. - Other Charges: A. Title Report B. Credit Report C. Other 5. TOTAL 6. Total of Payment $18.643,50 payable: $ 15,000.00 $ 3,643.50 $ 18,643.50 $ NIA $ N/A $ NIA $ 18,643.50 n 190 monthly installments of $103,S8 per month commencing 90 days after -Loan Agreement and continuing n the first of each month thereafter until paid in full. 7. Loan is secured by: Si natures of Ofliccrs f Iluntinstgn Flartour Ii*ome Owners Association, 8. The purpose of this loan is for Phase 1 Study and Tcnant Survey as stipulated in the Loan Agreement Section 4.1. The undersigned hereby acknowledges (])Receipt of a copy of the disclosures. (2) That this disclosure is not an ofrer or commitment to make the loan described. (3) Any insurance written in connection with this proposed transaction against loss of or damage to property of against liability arising out of the ownership or use of the property may by the undersigned, provided such insurer is acceptable to the City, and (4) the proposed loan will be secured only by the collateral described in item 7 above. DATE: Raymond Manion, President Jcane Coleman, Treasurer GAl-oandocsll tl WE t.doc 10 1 REQUEST FOR COUNCIL A'TION sio ,fin . 14~ - April 39 1995 ' — Submitted to: Honorable Mayor & City Council Member APPROVED B�` CITY COUL\C1L Submitted by: Michael T. Uberuaga, City Administrator 19 Prepared by: Ray Silver, Assistant City Administratorwe,.- . crnr� x = Subject: AUTHORIZE REDEVELOPMENT AGENCY TO ENTER INTO A� T LOANAGREEMENT WITH HUNTINGTON HARBOUR MOBILE ESTATES Consistent with Council Policy? [ ] Yes [ ] New Policy Statement of Issue, Recommendation, Analysis, Funding Source, Altemate Actions, & Attachment ` STATEMENT OF ISSUE: Staff is requesting authorization to enter into a Loan Agreement with Huntington Harbour Mobile Estates Homeowner Association in order to pursue the preliminary step for resident acquisition of the park. The loan will be $15,000 at a three percent (3%) interest rate amortized for 15 years. FUNDING SOURCE: Redevelopment Agency Affordable Housing Fund RECOMMENDED ACTION: Staff recommends that Council take the following actions: a) Approve the Loan Agreement and Promissory Note between the City of Huntington Beach and Huntington Harbour Mobile Estates, Inc.for the sum of $15,000 at three percent (3%) amortized over 15 years to conduct phase 1 studies for resident acquisition. b) Approve and authorize execution by the Mayor and City Clerk of the Loan Agreement between the City of Huntington Beach and Huntington Harbour Estates, Inc. for Phase 1 studies for resident acquisition. ALTERNATE ACTIONS: The Council may motion to 1) direct staff to re -negotiate the terms of the proposed transaction, 2) continue for further information, or 3) deny. f-- PAGE 2 OVE ANALYSIS: The Huntington Harbour Mobile Estates Homeowners' Association has requested the assistance of the Huntington Beach Redevelopment Agency in financing the initial studies to convert their park into a resident owned facility. February 6, 1995, a Request for Council Action was presented to the Council for your review. At that time, Council directed staff to initiate modifying terms. Staff has met with the homeowners' association and have agreed that the loan will be a three percent (3%) loan amortized over a 15 year period if the acquisition does not go forward within 90 days. In this effort, the Association has contracted with Community Service Group, a consulting firm which specializes in mobile home conversions. The cost for the preparation of the various preliminary documents totals approximately $63,000. These documents are prepared in three phases. The first phase addresses the residents' profile to determine that the tenants qualify for Agency affordable housing assistance, an appraisal of the park, and an engineering report to determine the status of the park infrastructure. The first phase will cost approximately $15,000. If the project does go forward to the next step, the Association will be requesting further assistance from the Agency for the funding of Phase 11 and 111 studies, approximately $48,000. At that time, an affordable housing agreement would be required to assure that the housing does stay affordable for a minimum of 30 years. The Homeowners Association at their March 2, 1995 meeting passed a resolution requesting Agency assistance. ATTACHMENTS: 1. Loan Agreement and Promissory Note. 2. Huntington Harbour Mobile Estates Homeowners Resolution dated March 2, 1995. 3. Huntington Harbour Mobile Estates Homeowners letter dated December 5, 1995. 4. Background information on Community Service Group. 5. Previous RCA dated February 6, 1995 6. Letter to Victor Leipzig dated March 1, 1995 from Charles & Bessie Levy. RS:DB:lp HUNTINGTON BEACH REDEVELOPMENT SET -A -SIDE EST. FUND BALANCE ::' ..42,052,000 = FY 94195 FY95196 $995,888 . . FY 96197 . $208,818 INCOME Tax Increment $ 871,076.00 $ 691,415.00 $ 914,291.00 Interest Income Five Points Senior Villas $ 9,500.00 $ 38,000.00 $ 38,000.00 Loan Interest Income In Lieu Fee Affordable Housing $ 50,000.00 Fees Collected Retum of Mora Kai Pledge $ 385,563.00 $ 385,563.00 TOTAL INCOME ::; :. $ . 880,576.00 $ 1,314,978.00 $ 1,387,854.00 Expenses O erating Expenses $ 123,677.00 $ 129,861.00 $ 136,354.00 Administrative Costs $ 60,699.00 $ 63,734.00 $ 66,921.00 Legal Services $ 20.100.00 $ 30,100.00 $ 30.100.00 Administrative Costs $ 3,790.00 $ 7,790.00 $ 7,790.00 TOTAL -OPERATING EXP. . $ .. 208,266.00 $ :. 231,485.00 2a1,165.oD Projects Mora Kai (Pledge) $ 385,563.00 $ 385,563.00 $ 385,563.00 Five Points $ 100,000.00 S 100,000.00 3 100.000.00 725 Utica $ 450,000.00 Pacfic Park Villas $ 300,000.00 $ 450,000.00 Brisas Del Mar $ 243,717.00 ERAF $ 139,142.00 M.C.C. $ 30.000.00 $ 30,000.00 S 30,000.00 Emerald Cove $ 80,000.00 $ 80,000.00 S 80.000.00 Third Block West $ 825,000.00 TOTAL PROJECT EXPENSES $ ' 1,728,422.00 $ : 1,870,563.00 $ " 595,563.00 FUND BALANCE : $ : 995 888.Q0 $ 2Q8 818.OQ $ 759 944.00 ��j iIk4 CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION ►+.,vi,++c,oN s AE" TO: MICHAEL T. UBERUAGA, City Administrator FROM: ROBERT J. FRANZ, Deputy City Administrator SUBJECT: REQUESTED APPROPRIATION FOR REDEVELOPMENT AGENCY LOAN AGREEMENT WITH MOBILE HOME PARK, FIS 95-20 DATE: MARCH 10, '1995 As required by Resolution 4832, a Fiscal Impact Statement has been prepared for the proposed appropriation of $15,000 for purposes of pursuing the preliminary steps towards resident acquisition of the Huntington Mobile Estates Park. Upon approval of the City Council, the balance of the Cash and In 'stments in the Housing Set -Aside Fuund would be reduced to $1,996,000. Z/ Deputy City Administr2 RJF:skd 0010979.01 03/23195 5:05 PM ORDINANCE NO. 3277 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY ADDING NEW CHAPTER 17.38 THERETO REGARDING TEMPORARY RENTAL OF MOBILE fi0.VES The City Council of the City of Huntington Beach hereby ordains as follows: SECTION 1. The Huntington Beach Municipal Code is hereby amended by adding new Chapter 17.38 thereto, to read as follows: Chapter I7.38 TEMPORARY RENTAL OF MOBILE HOMES IN MOBILE HOyIS PARKS 17 38.010 Findings and Purpose. The City Council finds that various mobile home parks prohibit the owner of a mobile home from renting it for any period of time, and that such non - rental rules from time to time impose hardships on owners of mobile homes who are unable to reside in their mobile homes, but are held liable for the space rental and upkeep of their mobile home while it is vacant and until the mobile home can be sold or otherwise re -occupied. It is the purpose of this Chapter to alleviate hardships on such owners who are unable to reside in their mobile homes by allowing the temporary rental of the mobile home for a reasonable period required for the owner to sell or re -occupy the mobile home. ' 17,38,020 Temporary Rental of Mobile Home. It shall be unlawful for any person to prohibit an owner of a mobile home in a mobile home park from renting that mobile home under the following circumstances: A. An owner of a mobile home who has resided therein for at least a one year period prior to the vacancy that necessitates renting the mobile home is unable to continue to occupy the mobile home either temporarily or permanently by reason of 1) illness, 2) death, or 3) other personal hardship. B. An owner of a mobile home who has resided therein for at least a one year period prior to the vacancy that necessitates renting the mobile home can no longer continue to meet the rules of occupancy of a mobile home park by reason of a change of circumstances. 4`tWb1ei r«nc4{n/9 s RLS 94-s36 C. A non -institutional owner or person in a fiduciary capacity who has received ownership of, or the possessory right to, a mobile home through probate, bankruptcy or foreclosure, or the owner's incapacity, and requires time to arrange for the sale of the mobile home, or to arrange for occupancy of the mobile home by the owner. D. Hereafter, "Renter" refers to the person or persons who pay rent to the mobile home owner in exchange for the temporary right to reside within the subject mobile home (and the related right to occupy the space upon which the mobile home is located), but not as a co - occupant with the owner. Any renter of a mobile home must meet all the rules of occupancy of the mobile home park in which the mobile home is located with the exception of any rule which directly or indirectly prohibits, in conflict with this section, the temporary rental of a mobile home for up to one year. Prior to the mobile home renter's taking occupancy, that renter and the mobile home owner shall provide the park owner with: (1) A copy of the mobile home rental agreement; (2) the true names of all intended occupants and their residential phone number; (3) business phone numbers for all adult occupants who have such numbers; and (4) an agreement signed by all adult occupants which reads as follows: I have received copies of the lease between the park owner and the home owner for Space # and current park rules. I have read those documents with care. I believe I understand them. I believe that I qualify for occupancy under those rules and the master Iease (except for provisions prohibiting subleasing). I agree to abide by those Park Rules and to meet all obligations of that master lease which are relevant to an occupant. I understand that the park own-.r may directly enforce the within agreement against me without giving up any rights against the mobile home owner. E. Such temporary rentals authorized by this chapter may not exceed twelve (12) months in any two (2) year period subject to renewal because of continued hardship. 17.38.030 Sev rability. If any provision of this Chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the Chapter which can be given affect without the invalid provision or application, and to this end the provisions of this Chapter are severable. 2 vv).%tcttwAtAf t9s RLS 94-836 SECTION 2. This ordinance shall become effective thirty (30) days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 17 th day of Apri 1 , 1995. ATTEST: City Clerk REVIEWED AND APPROVED: City Adminis rator 3 4a1\1b1d1«neAn195 RLS 94-936 Mayor APPROVED AS TO FORM: -"k �- City Attorney, fl�--C%cS'G-C� i ! INITIATED AND APPROVED: Director Special Projects LOAN AGREFti'IEYT THIS LOAN AGREEMENT ("Loan Agre=cr:t') is entered into as of 1995 between the HUNTINGTON BEACH REDEVELOPMENT AGENCY ("HBRA') and the undersigned (collectively, the "Borrowee) %%ith regard to the folio►►ing: RECITALS A. The Borrower shall be given notice by an agent for Mr. Les Frame the "Seller') that the Seller intends to sell the real property generally located at 16400 Saybrook Lane, Huntington Beach, California, commonly kno►►m as the Huntington Harbour Mobile Estates Homem►►mers Association (the "Lease') and that, pursuant to Chapter 2.80 of the Huntington Beach Municipal Code, the Borrower has a ninety (90) day right of first refusal to purchase the Lcase. B. The Bono►t•cr has requested HBRA to provide a loan to the Borron-cr in the amount of Fifteen Thousand Dollars ($15,000.00) for the payment of certain predevclopment costs which the Borro►►•er Hill incur if the Borrower investigates the Lcaie and negotiates a purchase agreement Mth the Seller for purchase of the Lease. C. HBRA is willing to provide a loan to the Borrower on the terms and subject to the conditions set forth in this Agreement. NOW, THEREFORE, the Borrowcr and FIBRA agree as follows: Section 1. Definitions. In addition to the terms defined elsewhere in this Loan Agreement, the folio►►ing terms shall have the following meanings: "Borrower" means each of the persons and entities signing this Agreement as a Borrower. "1:113RA" means the Huntington Beach, California, Redevelopment Agency. Tiff ' means the City of Huntington Beach, California. "Loan" means the loan by HBRA to Borrower e-6denced by the Note. "Loan AP-recment" means this Loan Agreement. "Loan Amount" mca ns Fifteen Thousand Dollars ($15,000). "Loan Documents" means the Note, this Loan Agreement, and any other document or instrument cNidcneing or securing the Loan. "Maturity Date" shall have the meaning given it in the Note. "Note" means the promissory note of even date hcm%ith in ee face principal amount of Fifteen Thousand Dollars($ ] 5,000.00) cxccutcd by the Borrower ki favor of HBRA. "Pro " shall have the meaning given it in Recital A. G.-Ux,mdocs1111 M E.doc Section 2. Borrower's Covenants. The Borrower covenants and agrees as follows: 2.1 Purchase Negotiations. The Borrower agrees to promptly commence negotiations with the Seller for the purchase of the Lease. The Borrower shall use the Borrower's best cfforts to obtain a purchase agreement for the Lease on terns satisfactory to the Scller, the Borrower, and I; IBRA. In the event that the negotiations for the purchase of the Lcasc result in the Seller and the Borrower entering into a purchase agreement for the Lease, the Borrower agrees to diligently pursue the purchase of the Lease in a commercially reasonable manner. 2.2 Pro e M Investigations, The Borroi%er agrees to provide HBRA with copies of all investigations and studies prepared by or for the Borrower and to provide HBRA with status reports relating to the purchase of the Lease, including the formation of a non-profit corporation, proposed financing sources, and Lease investigations. 2.3 Loan Proceeds. The proceeds of 14BRA Loan shall be used solely for payment of the predevclopment costs identified in Section 4.1. Section 3. Rcrrescntations and Warranties of the Borro wcr. 3.1 Authority. The Borrower has the legal power, right and authority to execute this Loan Agreement and the other Loan Documents, and to undertake and consummate the transactions contemplated herein and therein, and to pay, perform and observe the conditions, covenants, agreements and obligations contained herein and therein. The individuals executing this Loan Agreement and the other Loan Documents on behalf of the Borrower have the legal power, right and actual authority to bind the Borrower to the terms and conditions hereof and thereof. 3.2 Actions. All requisite action has been taken by the Borrower in connection with the cntcring into of this Loan Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby. 3.3 Valid Agreements. This Loan Agreement and the other Loan Documents and all other documents required hereby to be executed by the Borrower arc and shall be valid, legally binding obligations of and enforceable against tha Borrower in accordance Hith their respective terms. 3.4 Representations. No representation,-.Nmrranty or statement of the. Borrower in this Loan Agreement or in any other document, certificate or schedule furnished or to be furnished to HBRA pursuant hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact without which the statements or facts contained therein would be misleading. Section 4. Loan Disbursements. HBRA agrees to make disbursements of the Loan Amount on the following terms and conditions: 4.1 Initial Disburs rc Went. Upon execution of this Agreement, HBRA shall disburse to Borrower the sum of Fifteen Thousand Dollars ($15,000.00) to be used by Borrower for payment of the following predcvclopment costs in the approximate amounts set forth below for such predevelopment costs: G:U=docsl111 MT-.doc A. Legal fees for appraisal, engineering study, Phase I; Environmental study and survey of residents' income status $15,000.00 4.2 onditions. A. In the event tl at (i) negotiations betwcen the Seller and the Borrower for purchase of the Lease are terminated %ithout execution of a purchase agreement bm%-ccn the Scher and the Borrower, or (ii) a purchase agreement for the purchase of the Lease which is acceptable to the Seller, the Borrower and TIBRA is not entered into between the Seller and the Borrower and an escrow for the purchase of the Lease opened i;ithin ninety (90) days after the date of this Agreement, then the Note shall become immediately due and payable. B. If the lease purchase is completed then this loan shall become a grant. Section 5. Events of Default. At the option of IIBRA, each of the follo%ing events shall constitute an Event of Default hereunder: 5.1 Default under Loan Documents. Any event of Default undcr the Note. 5.2 Representations and Warranties. The failure of any of the Borrower's representations or -warranties contained herein or in any of the other Loan Documents to be true. 5.3 Voluntary Bankruptcy. Etc. The Borrower's filing of a petition for relief under the Bankruptcy Reform Act of 1978, as amended or recodified, or under any other present or future Federal or State law regarding bankruptcy, reorganization or other relief to dcbtors, or the Borrower's insolvency or inability to pay its debts as thry mature, or the Borrower's making a general assignment for the benefit of the creditors, or the Borrower's applying for a receiver, trustee, custodian or liquidator for the Borro-,cr of any of its property or the filing by or against the Borrower of a petition or the commencement of any other procedure to liquidate or dissolve the Borrower. No notice or cure period shall be required_ 5.4 Imoluntary Bankruptcy. The Borrower's failure to effect a full dismissal of any involuntary petition, under the Bankruptcy Reform Act of 1978, as amended or recodified, or under any other present or future Federal or State law regarding bankruptcy, reorganization or other relief to debtors, that is filod against the Borro«-er or that in any «-ay restrains or limits the Borrower or FIBRA regarding the Loan, the Lease, or the Improvements, prior to the earlier of (a) the entry of any order granting relief sought in the involuntary petition, or (b) thirty (30) days after the date of the filing of the petition, or the Borro«•cr's filing of any pleading in any such involuntary proceeding which admits the jurisdiction of the court or the petition's material allegations regarding the Borrower's insolvency. 5.5 Transfers. The assignment or transfer of any or all of the Borrower's right under this Loan Agreement without IiBRA's prior %NTittcn consent as set forth in Section 12. 5.6 Other Defaults. The Borrowcr's failure to perform any of its other obligations under any covenant, condition or agreement set forth in this Loan Agreement if such G.Ux ndocsltitL%Mdoc 6 failure continues after thirty (30) days after written notice from the Lender to the Developer, unless another time period is provided in this Loan Agreement with respect to a specific breach, in which event the other time period, if any, shall apply. Section 6. Remedies Upon the occurrence of any Event of Default as defined in this Loan Agreement, in addition to its other rights set forth in this Loan Agreement or in any of the other Loan Documents, at law or in equity, HBRA may, at its option, without prior demand, exercise any one or more of the following rights and remedies: 6.1 Acceleration. Declare HBRA Note and all other sums owing to the Lender with respect to the other Loan Documents immediately due and pa) -able. 6.2 Legal and Equitable Rm. edics. Proceed as authorized at la%v or in equity with respect to such an Event of Default, and in connection therc%vith remain entitled to exercise all other rights and remedies described in this Loan Agreement. All of HBRA's rights and remedies provided in this Loan Agreement, in any of the other Loan Documents, at law, in equity or othenvise, are cumulative and may be exercised by HBRA at any time. The HBRA exercise of any right or remedy shall not constitute a cure of any Event of Default unless all sums then due and payable to IIBR.A under the Loan Documents arc repaid and the Borrower has cured all other Events of Default. No %viver shall be implied from HBRA's failure to take, or delay in taking, any action concerning any Event of Default, or from any previous waiver of any similar or unrelated Event of Default. Any waiver under any of the Loan Documents must be in writing and shall be limited to its specific terms. Section 7. Notices. All notices or other communications required or permitted under this Loan Agreement shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received: (i) if personally delivered, upon the date of delivery to the address of the person to receive such notice, (ii) if mailed in accordance t►ith the pro%isions of this paragraph, two (2) business days after the date placed in the United States mail, or (iii) if mailed other than in accordance with the provisions of this paragraph or mailed from outside the United States, upon the date of delivery to the address of the person to receive such notice. Notices shall be given at the following addresses: If to HBRA: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 If to the Borrower: Huntington Harbour Mobile Estates Homeowners Association 16400 Savbrook Lane I funtington Beach, CA 92649 The address for delivery of notices may be changed by the relevant party by giving notice of such change in accordance with this paragraph. G.M.m-idocsll tt M[1:.doc ? Section 8. Complete Agreement: Modifications. This Loan Agreement and the other Loan Documents entered into concurrently here%,.ith (i) constitute the parties' entire agreement, including all terms, conditions, definitions, %%arrantics, representations and covenants, with respect to the subject matter hereof, (ii) merge all prior discussions and negotiations bct%ivm or among any or all of them as to the subject matter hereof, and (iii) supersede and replace all terms, conditions, definitions, -w-w nties, representations, covenants, agreements, promises and understandings, whether oral or written, with respect to the subject matter hereof. This Loan Agreement may not be amended, altered or modified except by a writing signed by the party to be bound. Section 9. Further Actions. Each party agrees to perform any further acts and execute and deliver any further documents reasonably necessary to carry out the provisions of this Loan Agrccmcnt. Section 10. Assignment. The qualifications and identity of the Borrower arc of particular concern to HBRA. It is because of those qualifications and identity that 1 MRA has entered into this Loan Agreement with the Borrower. Except as othencise provided in this Section 10, no voluntary or involuntary successor in interest of the Borrower shall acquire any right or powers under this Loan Agreement without the prior wTittcn approval of HBRA. The Borrower shall not assign or transfer all or any part of its rights and obligations under this Loan Agreement without the prior written consent of HBRA. Section l 1 _ Successors and Assigns. Except as explicitly provided herein to the contrary, the Loan Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and permitted assigns. Section 12. Extension Nat a NVaiver. No delay or omission in the exercise of any power, remedy, or right herein provided or otherwise available to any party shall impair or affect the right of such party thereafter to exercise the same. Any extcnsion of time or other indulgence granted to a party hereunder shall not othen,.ise alter or affect any pov er, remedy or right of any other party, or the obligations of the party to whom such extension or indulgence is granted as specifically wuived. Section 13. Time of Essence. Time is of the essence of each and every term, condition, obligation and provision of this Loan Agreement. Section 14. No Third Pam Beneficiaries. Ibis Loan Agreement and each and every pro%ision hereof is for the exclusive benefit of the parties hereto and not for the benefit of any third party. Section 15. Attorngy's Fees. Should any litigation (including any proceedings in a bankruptcy court) or arbitration be commenced bctw-a-n the parties hereto or their representatives concerning any provision of this Loan Agreement or the rights and duties of any person or entity hereunder, the party or parties prevailing in such litigation or arbitration shall be entitled, in addition to such other relief as may be granted, to the attorneys' fees and court or arbitration costs incurred by reason of such litigation or arbitration, including attorneys' and experts' fees incurred in preparation for or investigation of any matter relating to such litigation or arbitration. Section 16. ourtcMarts. This Loan Agreement may be signed in multiple counterparts with the same force and effect as if all original signatures appeared on one copy; and in the event this Loan Agreement is signed in counterparts, each counterpart shall be deemed an original and all of the counterparts shall be deemed to be one agreement. GI.oandocAlIIIl fEdoe 8 Section 17 Applicable Law This Loan Agreement shall be construed in accordance with and governed by the laws of the State of California Executed by HBRA and the Borrower as of the date first written above ATTEST Agency Clerk S/ 5X-V REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By G%i.le Chairman APPROVED AS TO FORM zfln 0C Agency Counsel —Z 3 - BORROWER HUNTINGTON HARBOUR MOBILE ESTATES HOMEOWNER • • iPresident Coleman, Treasurer G \LoandocsUiHM E doc PROMISSORY NOTE $15,000.00 "Note Date": %'iAt' f ,1995 Huntington Beach, California FOR VALUE RECEIVED, the undersigned (collectively, the "Borrower') promises to pay to the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, or order ("Lender') at 2000 Main Street, Huntington Beach, California 92648, or such other place as Lender may designate from time to time by written notice to Borrower, in lawful money of the United States, the principal sum of FIFTEEN THOUSAND DOLLARS ($15,000.00) kith interest at the Interest Rate (as defined below) on the unpaid principal balance from the Note Date until paid. 1. Interest. No interest shall be charged for the first ninety (90) days following the Note Date. Commencing on the ninety-first (91st) day following the Note Date, interest shall be charged on the principal balance from time to time outstanding at the rate ("Interest Rate') of three percent (31/o) per annum, 180 months. 2. Payments/Grant. 2.1 In the event that (1) negotiations bmvecn Mr. Les Frame (the 'Seller') and Borrower for purchase of the lease generally located at 16400 Saybrook Lane, Huntington Beach, California commonly known as the Huntington Harbour Mobile Estates Homeowner's Association (tile `Lease') are terminated without execution of a purchase agreement between Seller and Borrower, or (ii) a purchase agreement for the purchase of the Property which is acceptable to Seller, Borrower and Lender is not entered into bct%vecn Seller and Borrower and an escrow for the purchase of the Property opcncd within ninety (90) days after the Note Date, then the sum of Fif3cen Thousand Dollars (S15,000) shall become immediately due and payable, and upon payment of such sum by Borrower to Lender, Lender shall forgive the balance of this Note. This loan shall become a grant if the Borrower purchases such lease. 2.2 If not sooner paid, the entire unpaid principal balance, together with any accrued and unpaid interest shall be due and payable in full on the earlier of the following dates (the earlier of such dates hcrcinaficr referral to as the "Maturijy Date'): (a) 90 days after Note Date as specified in Section 2.1 above. (b) /.07/9 Y l , 199L or 180 months after Note Date. 3. Application of Payments. All payments received shall be applied first to charges other than interest and principal, if any, owing under this Note, then to accrued interest then due, then to principal; provided, however, that after the occurrence and during the continuance of any Event of Default (as defined below) all amounts shall be applied in such order as Lender, in its sole discretion, may elect. 4. Loan Agreement. This Note is made pursuant to a Loan Agreement of even date hcrei ith ("Loan A,grecmcnt') and certain terms concerning the loan evidenced by this Note arc governed by the Loan Agreement. This Note, the Loan Agreement and any othcr documents or instruments evidencing or securing the loan evidenced by this Note arc hereinafter referred to as the "Loan Documents." G:U=ndocsli IY aE-.doc 5. Late -Char es. If any payment of principal, interest or other sum due under this Note is not paid within ten (10) days after it is due, Borrower shall pay to Lender a late payment charge equal to six percent WO*/o) of such overdue amount. The parties agree that such charge represents a fair and reasonable estimate of the costs Lender will incur by reason of late payment. The parties further agree that proof of actual damages would be costly or inconvenient. This provision shall not, however, be construed as extending the time for payment of any amount under this Note and acceptance of such later charge by Lender shall in no event constitute a zsaiver of Borrower's default with respect to such overdue amount nor provides Lender from exercising any of the other rights and remedies with respect to such default. 6. Prepayment. Borrower may prepay the principal amount outstanding in whole or in part at any time without penalty. 7. Waivers. BorrowTr -waives diligence, presentment, protest and demand and also notice of protest, demand, dishonor and nonpayment of this Note, and expressly agrees that this Note, or any payment hereunder may be extended from time to time and consents to the acceptance of further security or the release of any security from this Note, all without in any way affecting the liability of Borrower. The right to plead any and all statutes of limitations as a defense to any demand on this Note, or any and all obligations or liabilities arising out of or in connection with this Notc, is expressly w-aivcd by Borrower to the fullest extent permitted by law. No cxt^nsion of the time for the payment of this Note, or any installment hereof, made by the payment of this Note, or any installment hereof, made by agreement by Lender with any person now or hereafter liable for the payment of this Note, shall affect the original liability under the terms of this Note by Borrower even if Borrower is not a party to such agreement. 8. Default ; Remedies. All principal, int=rest and other sums remaining unpaid under this Note shall, at Lender's option, become immediately du.- and payable upon the occurrence of any of the following events (each, an "Event of Default"): 8.1 The failure of Borrower to pay in full, within ten (10) days from the date due, any payment of principal, interest, late charge or other sum dac under this Note. 8.2 The failure of Borrower to perform any of the nonmonctary obligations of Borrower under this Note within thirty (30) days from written notice of such failure from Lender to Borrower, unless another time period is provided with respect to a specific breach, in which event the other such time period shall apply. 8.3 The occurrence or happening of any Event of Default as defined in the Loan Agreement. The failure of Lender to exercise any remedy provided hereunder shall not constitute a waiver of the right to exercise the same or any other remedy. The acceptance by the Lender hereof of any payment hereunder which is less than the payment in full of any amounts due and payable at the time of such payment shall not constitute a %%aivcr oftl_c right to exercise any of the foregoing remedies. 9. Attorneys Fees. If the Lender should institute collection efforts of any nature whatsoever to attempt to collect any and all amounts due hereunder upon the default of Borrower, Borrower shall be liable to pay to the Lender immediately and without demand all reasonable costs and expenses of collection incurred by the Lender, including without limitation reasonable attorney's fees, G-MoandoesllI I T.doc whether or not suit or any other action or proceeding be instituted and specifically including but not limited to collection efforts that may be made through a bankruptcy court. 10. No Partncrshi . It is acknowledged and agreed that nothing herein shall constitute Borrower and Lender as anything but borrower and lender and, specifically, that Borrower and Lender arc not partners nor joint venturers. 11. Time of Essence. Time is of the essence of each and every term, condition, obligation and provision of this Note. 12. Agglicable This Note shall be construed in accordance N%ith, and governed by, the laws of the State of California. 13. Joint and Several Liability. joint and several. EXECUTED as of the Note Date. The liability of each person or entity signing this Note is BORROWER: HUNTINGTON HARBOUR MOBILE ESTATES HOMEOWNER ASSOC., INC. By: J!-�Tlcman, Treasurer APPROVED AS TO FORM: (,� Agency Counsel /} 3 - Z 3 G.M omdocs\1UD% E.doc Q 3. DISCLOSURE STATEMENT TRUTII-IN-LENDING DATA Amount Financed Finance Charges A. Total Interest 3% Total Principal and Interest 4. Other Charges: A. Title Report B. Credit Report C. Other 5. TOTAL 6. Total of Payment $18,643.50 payable: $ 15,000.00 $ 3,643.50 $ 18,643.50 $ NIA $ NSA $ NIA $ I8,643.50 In 180 monthly installments of $103.58 per month commencing 90 days -after Loan Agreement and continuing on the first of each month thereafter until paid in full. tjobi[e Ev4,2t¢s 4 �s 7. Loan is secured by: _Signatures of Officers of Fluntington Harboudome Owners K . Association: LAC- 8. The purpose of this loan is for Phase I Study and Tenant Survey as stipulated in the Loan Agreement Section 4.1. The undersigned hereby acknowledges (1) Receipt of a copy of the disclosures. (2) That this disclosure is not an offer or commitment to make the loan described. (3) Any insurance written in connection with this proposed transaction against loss of or damage to property of against liability arising out of the ownership or use of the property may by the undersigned, provided such insurer is acceptable to the City, and (4) the proposed loan will be secured only by the collateral described in item 7 above. llZ % DATE: Raymond Manion, President cane Coleman, Treasurer G:1L,oandocs\F1F IEI.doc I0 I \ L 9D /. M�Ae REST FOR REDEVELOPNIENT ACF Y ACTIONI REQUEST FOR COUNCIL A&hON February 6,1995 ri Submitted to: Honorable Mayor & City Council Member b� Submitted by: Michael T. Uberuaga, City Administr r � _ o Prepared by: Mike Adams, Director of Special Project X 'a 7 r; Subject: Authorize Redevelopment Agency to Enter Into a Loan r Agreement with Huntington Harbour Mobile Estates Consistent with council Policy? [ ] Yes [ ] New Policy Statement of Issue, Recommendation, Analysis, Funding Source, Alternate i ,f STATEMENT OF ISSUE: Staff is seeking direction from the city's Redevelopment Agency for autnorizatiTh Wier mr into a loan agreement with the Huntington Harbour Mobile Estates Homeowners Association in order to pursue the preliminary step for resident acquisition of the park. RECOMMENDATION: Staff recommends Agency approval and authorization to prepare and enter into a loan agreement with Huntington Harbour Mobile Estates Homeowners` Association for preparation of Phase I studies for resident acquisition. An amount not to exceed fifteen thousand dollars ($15,000). ANALYSIS: The Huntington Harbour Mobile Estate Homeowners' Association has requested the assistance of the Huntington Beach Redevelopment Agency in financing the initial studies to convert their park into a resident owned facility. In this effort, the Association has contracted with Community Service Group, a eonsuiting fi'm which specializes in mobile home conversions. The total cost for the preparation of the various preliminary documents totals approximately $63,000. These documents are prepared in three phases with the first phase addressing an appraisal of the park including an engineering report to determine the status of the park infrastructure and residents' profile to determine that the tenants qualify for Agency affordable housing assistance. The first phase studies will cost approximately $15,000. Agency assistance will be in the form of a loan to the Association. If the Association does not further pursue the conversion project or if they fail to qualify for Agency assistance, the funds will be paid back to the Agency. 1 PAGE 2 If the project does proceed to the next step, the Association will be requesting further assistance from the Agency for the funding of Phase II & III studies, approximately $48,000. Request for any additional funds will come at a latter date and will be subject to separate consideration. The Homeowners' Association at their January 16 meeting passed a resolution requesting Agency assistance. FUNDING SOURCE: Redevelopment Agency Housing Set -Aside Funds. ALTERNATE ACTIONS: Continue for further information. ATTACHMENTS: 1. Huntington Harbour Mobile Estates Homeowners' Association Resolution dated 1111 /95. 2. Huntington Harbour Mobile Estates Homeowners' Association Request letter dated 12/5194. 3. Background information on Community Service Group. MA:Ip Attachments ACTION BY THE BOARD OF DIRECTORS OF HUNTINGTON HARBOUR MOBILE ESTATES HO% EO«'NERS ASSOCIATION a California Corporation F.fT'ective Date: %- / 4 11995 The Board of Directors (the "Board") of HUNTINGTON HARBOUR MOBILE ESTATES HOIWOWNERS ASSOCIATION, a California Corporation (the "Corporation"), adopts the following resolution: STMREAS, the Board has requested the City of Huntington Beach to make a loan to the Corporation for th:, express purpose of paying for certain professional consultants, to wit; PILASE I: The first phase of disbursements shall be limited to the costs of an Appraisal, an Engineering Study, and a Phase I Environmental Survey (the Due Diligence Studies), the total of which shall not exceed Fifteen Thousand Dollars ($15,000.00); r LASE II: The second phase of the disbursements shall be limited to the costs of a Low Income Study and the development of the initial Operating Budget, the total of which shall not exceed Twenty Thousand Dollars (S20,000.00); PHASE III: The third phase of the disbursements shall be limited to the costs of preparing the offering circular, including associated Legal Costs, and the legal costs of Incorporation, the total of which shall not exceed Thirty Thousand Dollars ($30,000); NOW, THEREFORE, BE IT RESOLVED that the Board of Directors authorizes Raymond Manion, President, and Jean Coleman, Treasurer, to sign any and all documents necessary to obtain a loan from the City of Huntington Beach in an amount not to exceed Filieen Thousand Dollars ($15,000) to perform the Phase I Studies, as set out abo%v. Repayment of this loan shall be made in monthly installments, amortized over thirty (30) years at three percent (3%) simple intercm At the conclusion of the Phase I Studies, the Board of the Corporation shall report to its membership and to the City of Huntington Beach v4thin a time period not to exceed thirty (30) days its findin," and recommendations. R' UTrNTSS THEREFOR, this action is taken effectitire as of the date first set forth abor-c and pursuant to the authority granted under the California Corporations, Code Section 307 (b) and. the Bylaws of the Corporation. Respectfully Submitted, , Huntington Association 1„J HUNTINGTON HARBOUR MOBILE ESTATES HOMEOWNERS ASSOCIATION 16400 Saybrook Lane Huntington Beach, CA 92649 December 5, 1994 Mr. Michael Adams 2000 Main Street Huntington Beach, CA 92648 Dear Mike, This letter is provided pursuant to your request of December 1,1994. We understand that this letter is to serve as supporting documentation for a request to be made of the City of Huntington Beach during the City Council meeting scheduled for December 19, 1994, for a grant in the amount of $63,250 to assist Huntington Harbour Mobile Estates in performing its due diligence in its pursuit to purchase the Park. We residents of Huntington Harbour Mobile Estates, who number approximately 199 persons, have been pursuing the purchase of our Park for over five years. The first attempt ended %Nithout agreement of the parties. Our current pursuit to purchase the Park began during the fourth quarter of 1992. As a first task, the new Board of the Homeovmers Association (HOA) had to acquaint themselves with what had transpired during the earlier effort and ascertain lessons learned. One lesson teamed «ras that the former Board incurred considerable expense with an attorney who is well known for assisting residents with park purchase, only to have the transaction not bear fruit. This represented a significant cost to individual residents, which left a very bad taste in their mouths. We want all the assurances we can get that our plan will meet with success, while expending little to no Park resident funds. The next major task was to search out individuals anVor organizations who assist Park residents in purchasing their Park. One organization stood out on the list of those that we compiled (Our list included recommendations from GSMOL). That organization is Community Service Group (CSG), and the referral to this organization actually came from one of our residents. Next, we interviewed our top candidates. As we closed in on Community Service Group as our choice, we researched references, Parks where this organization had successes and projects underway, and City Administration representatives where they had projects (closed and open). City of I [untington Beach 1 of4 This research involved a large group of residents, and each prepared reports of their findings. Finally, the current HOA Board of Directors invited the former Board members to a Board meeting, where all of our findings were reviewed. Two criteria stood out in selecting Community Service Group: They have a demonstrated track record and they work much like Realtors, wherein they get paid at the end of the project after it closes escrow. We have not had to put up any front end monies. On April 21, 1994, we entered into an employment contract with Community Service Group to assist we Park residents with the purchase of our Park. A copy of this contract is attached for your review (Attachment # 1). Next, Mr. Les Frame, the Park owner, was contacted, and a meeting was arranged. In that meeting, Mr. Frame agreed to sell the Park to we residents. It was agreed that CSG would fax a contract to Mr. Frame for signature. A copy of that executed agreement to sell the Park is attached (Attachment #2). The business of the Park is on lease land, and that lease is held by the Phelps family. Preliminary discussions with the Phelps family regarding the purchase of the land have left us without an offer to sell from the Phelps. We will revisit this item at a later date when we can firmly demonstrate to them that this project is real and that they now have a rare window of opportunity. However, we intend to proceed with Park purchase, even if the Phelps decide to not sell the land_ We are currently performing our due diligence. As a part of this effort, we have identified our cash requirements to proceed with our due diligence. Total estimated costs are $63,250, and all of the line items on the budget are supported by competitive bids. A copy of this budget is attached (Attachment #3). Very critical items on the budget include an appraisal, an engineering study, and a low income study. We have momentum on our side right now in completing this project. We have a willing seller and a willing buyer. We have researched and identified two sources of funding for a new loan on the Park: Through a bond and through a local bank. To maintain this momentum, we need to launch the three study items named above as soon as possible, and to complete the remainder of the items on our budget (Attachment #3). There are insufficient monies in our treasury to fund the needed $63,250, and because (I) a very large number of the residents qualify as moderate to very low income households and (2) the past experience of the residents where they spent a very large sum of money with an attorney only to have the project fail, the Board has been reluctant to take this matter to the membership Without first exploring other avenues. This explains why we have come to the City for assistance. We know that a very large number of the residents qualify as moderate to very low income households. Consequently, these households can qualify for a number of sources of funds, for do-,Nn payment assistance and other needs. One of the items on our budget (Attachment 43) is City of Huntington Beach 2 cf 4 the conduct of a low income study. In order to arrive at some order of magnitude of how many of the residents fall into what income category, CSG performed an informal survey. The results of that survey indicate that 22% of the residents are Very Low Income households, 23% are Low Income households, and 32% are Moderate Income households, for a total of 77% of the residents being moderate to very low income households. Because of the income profile of the Park residents, we feel that the Park qualifies for a grant of funds from the City in the amount of $63,250 to perform its due diligence. A source of funds that has been identified to us is the Housing Setaside Funds. The precedent for providing us %%ith this grant is the one or more 4-plexes wherein upwards of $200,000 has been granted to each project. These funds benefited approximately 16 residents (or prospective residents -- consideringA residents per unit), whereas the grant of $63,250 will benefit approximately 199 residents, 77% of whom are moderate to very low income households. A very large number of Park residents have lived in Huntington Harbour for 20 years or more. They moved into the Park with their retirement incomes and at a time when space rent was approximately $275 per month. The ensuing 20 years have resulted in the following: (1) Space rents have escalated to $565 and more per month, to be among the top 3-4 in mobile home park rents in Huntington Beach. (2) Income per household has not kept pace with rent escalation. In fact, many of the residents are now widowed, resulting in cutting their household income in half or less. (3) The standard of living of long term residents has declined dramatically, and the reserves that they put away for a rainy day are now depleted. (4) Long term residents are captive. They have no way of escaping an existence which, for them, continues to decline. All of you are aware of the fact that as space rents have grown to near -unmanageable values, with Huntington -By -The -Sea leading the pack, a movement to rent control has gained considerable favor. We believe that the concept of resident owned Parks is a far superior solution to gaining control of space rents. Not only is this a better way to go for the City, but it gives us a tool for helping our own -- our long term residents. Huntington Harbour Mobile Estates is offering the City, by example, the best solution to rent control. In summary, we seek a grant from the City of Huntington Beach in the amount of $63,250. This amount is seed money to enable us to sustain the momentum we now have, by allowing us to go forward «ith our due diligence. The income profile of residents demonstrates our need. The deliberate way in which we have pursued our goal goes a long way toward insuring its successful achievement by the end of the first quarter of 1995. However, we need your assistance in order for us to achieve our dream. And your a.sssistance greatly assists the City through the joint leadership we provide for this difficult rent control issue that is confronting the City. We request that our request be placed on the agenda of the City Council for December I9,1994, for action. We stand ready to assist you in any way needed toward this end. I want to assure you that your help with this endeavor will never be forgotten, by the residents of Huntington Harbour Mobile Estates. We will feel ourselves to be indebted to the City forever for all of the help you have given us. City of Huntington Beach 3 of 4 Thank you for your attention to our request and for all of the assistance you have provided us to date. Cordially, A�4asl-tl Dallas Moran President (1) Contract with Community Service Group dated April 20, 1994 (2) Offer to Sell Huntington Harbour Mobile Estates from Mr. Les Frame dated May 12, 1994 (3) Huntington Harbour Mobile Estates Cash Requirements for Performing Due Diligence Huntington Beach City Council Members City of Huntington Beach 4 of 4 Community Service Group April 20, 1994 V1e �Caro-ln—Rob]rec, President Huntington Harbour Homeowners Association 16400 Saybrook Lane Huntington ©each, CA 92649 /W. n?'OJOgX's/ I"" Dear Me;a=Reb!": Thank you for giving Community Service Group the opportunity to serve you in the acquisition of your park. We are looking forward to working with you towards this goal. It is important for each of'us to understand the scope of services CSG will provide to you. As ouch, this letter will servo to outline those services. We see approximately coven major categories of services with individual highlights as noted be ow. I - Selection or Legal Counsel An we expressed to you, the selection of counsel to represent the new corporation 3s an important aspect. There have only been 160 park acguinitions by resident group to data, so the number of qualified attorneyn are few. We will provide you a list of approximately three with the necessary qualifications for your review. Via provide these as suggestions only. You may already have legal counsel that is qualified to assist you. 2- Education of the Residents of uuntington Harbour For a successful acquisition to occur, the existing residents lnuct understand the process, and more importantly, what to expect once the acquisition is completed. This is a complicated transaction and the residents through the non --profit corporation, are going to be responsible for running a business with millions of dollars in assets once the purchase is complete. We will be present at your request, at each tenant meeting to make the appropriate presentations to the residents. A Low Income Study must also be performed to determine each residents eligibility for City assistance. Normally the local cities do not have adequate staff or resources to do this on a timely basis. If requested by the City, we will perform the Low Income Survey to determine each residentct eligibility for downpayment assistance. 3 Nagotiato tho Acquisition of the park Wt Will assist you in nt.riintair i ncj a t.rar,nAr-tA nn i nr.1 vtA i ne7 reaching an agreeable purchase price. As we indicated are familiar with your current owner and will represent your interests as your real estate agent in this regard. During the due diligence phase, this will include providing you with a selection of th© appropriate professionals to evaluate the physical condition of the park and a property management firm to care for tho park After the close of escrow. 165 Denny Vlay • El Cajon. CA 02020 • (619) 449.4141 • FAX (G19) 449.42G7 7321 N. 16th 5treol • suite 102.1,000-600-000,1 •Pell NA April 20, 1994 Page 2 4 - Interfacing with the City of Iuntington Beach You have indicated to us that some of the residents may not have the necessary financial resources to purchase an interest in the park which will be represented by their space. We will speak to representatives of the City of Huntington Beach on your behalf to educate them as to how they may be able to assist. The ultimate goal is to insure that all residents will have the financial resources to participate and we believe with our assistance that can be achieved. furthermore, certain costs will be incurred prior to the closo of escrow that will have to be paid such as, attorneys, incorporation costs, and civil engineers. As we discussed, we have had success with a variety of other cities where the cities have funded this "aced money" so as to eliminate payments by the residents prior to the close of escrow. We will discuss the concept with representatives of the city and determine their ability and interest to pay for these costs. 5 - Preparation of the Offering Circular Once an offer is accepted by both the now corporation and the seller, we will assist in the preparation of the Offering Circular, a copy of which will be issued to each park president to explain the financial and legal aspects of the transaction. 6 - Budgeting It will be necessary to prepare the first annual operating budget of the now corporation and establish the monthly duos for the next twelve month period. This will be based upon the evaluation of the improvements, the prior years operating history, and your desires as to future improvements. 7 Coordination of the Financing We will assist you in tho development and review of satisfactory loan documents relating to the acquisition. We are not attorneys, but have a significant amount of experience in negotiating and documenting commercial real Estate loan transactions. e -- root closing assistance After the close of escrow, we will be available to assist you in operating your new non-profit corporation and the park for a period of ninoty days. The Board will receive from us a written report from us Each Friday as to the status of the project. We will be happy to meet With you to discuss any questions you may have during the pre -closing period. The term of our engagement is twelve months from' the date of execution of tho contract. Extennions, if necessary, will be' RR April 20, 1994 Page 3 in writing and agreed upon by both parties Our fee for this engagement will be four and one-half percent (4 5%) of the gross purchase price and is structured as a real estate commission As an additional benefit to your Homeowners' Association, we will attempt to have the Seller and/or the City of Huntington Beach to pay our fee Like all other real estate transactions in California, the seller typically pays the all of the real estate commission if either the Seller and/or the City pays any part of our fee, you will receive a credit for all such payments thereby reducing the amount ultimately paid by the Homeowners Obviously, if we are unsuccessful in convincing the other participants to pay our fee, your non-profit corporation will be responsible If the aforementioned terms and conditions are acceptable to you, please execute a copy of this contract and return it to us As we indicated earlier, we are extremely excited with the opportunity to work with you very truly yours, community Service Group, Inc Ja S ovie Pr nt Accepted this v� 1�airof April, 1994 By ��� Y;2`1r 6 — e5, Hay 12, 1994 mr. bava mounier Cormu,nity Sarvi.co Groupr YUC. 165 Denny Way El Cajon, CA 92020 RE: ttuntington Harbour mobile Batates Dear Mr. xounier: Pursuant to our corver;ati0n today regarding the sale of my leasehold intorect in Huntington Hartx)ur to tho areuidontn of Huntington 11arbour 11onecwnars-1 Anmaintion, the follOwtng conditions and paramaterp or& accoptav3e to re-: i - Ths cales3 price will Do S b0 000 per unit firm less nornal collar closing coo". such an escrow and title chargos and including a comfauion payablo to Co=unity service Group, Inc. (HCr4") of 4.5% of the grass sale* price. This will result in a tranntar of the leaCohold intarost only as I do not 04ve an ownership in the aatudl land. a - Whila x do haV6 a first right of refusal in the Vrourad leans to purchase the land, I am riot obligated to expend eithor time or -=soy towards the purchasc of the land tag a result oC a sale of the leasehold Lntereot to the raoidante. uovoyaar if the rdsidents should cuccausfully negotiate to purchase the iaryl, I will cooperate in this endeavor co long us there is no expense to Sao. 3 - I Will not be obli.gatod to any cost= Associated with the conversion. 4 .. Co=unity S&rVice croup will assist in revieving o =ions available to rogardirej a section 1031 or 1033 exchange. CSO Will reviav with tho City of Huntington bolgh all conditions and requirements necessary to obtain potetltial 1033 at4tus. I1oVGvor, CSv does not and will not act as tax counsel for hta. All final tax accounting determinations will pe my responalbility. 5 -- CSG will not roprosent me as a real estato broker In this txanvaetion. CSc has boon retained by the Duyer. 6 - reach pu.rcha9ar will sign a reloaae, as dosoribed below, prior to tho close of as=ow. The execution tf there relean0o im a condition of sale. The release will releaae Les Frame Entearpricec, Inc., its principals, hdirv, succou aors in Intnrest, dgontts, executors, t=mtoesa and ctmplo�f ern frou► all lJobility, G�uaas of action and daxagen any of tale buyarn has or may have cxporienccd From the ditto thoy first Startled negotiatingq to purchase a :nobilehom in Huntington Earbour Mobile Estates, or rent n opacen until the data the rcloaaa is pigned. The raleasao 14 r. Dava Mounier May 12, 1994 Pago 2 will included all Claims known,, u0mcr-In, latent And patont. Mr. Hounier 1 hope thi% correctly r�owrializes our converoation today. if f does, please sign belov and return act soon sc poss blo. I az anxiouA for you to moat with ter. Horan and his board of directorts to bCgin tho pr,oce2s. should you have additional questions or cozwnto pleado Contact me at your earliest convenianco. Very truly f yours. 4 -&1 6LkL4-- TAc: rrA-xc , f 7-M- c H ,n Flv /` ( 3) HUNTINGTON HARBOUR CASH REQUIREMENTS FD i2 ��11 fvQ/rriniG D Lt E TOTAL FROM AMOUNT REQUIRED RESIOENT9 STATUS: OPEN ESCROW DEPOSITS INTO ESCROW: LAND LEASEHOLD INTEREST ARCHITECTURAL/ENGINEERING: REVIEW OF THE ASSET LOW INCOME STUDY FOR ELIGIBILITY OF RESIDENTS PREPARE OFFERING CIRCULAR ENVIRONMENTAL ENGINEER: PROVIDE PHASE 1 STUDY OPERATING BUDGET PREPARER LEGAL: PROVIDE OPINIONS, REVIEW PROPOSED TRANSACTION APPRAISAL: REVIEW TRANSACTION CONTINGENCY: TOTAL REQUEST 10,000 10,000 5,200 16,250 8,500 1,800 3,500 10,004 10,000 5,200 16,250 8,500 1,800 3,500 15,000 15,000 8,000 8,000 51000 5,000 83,250 200000 63,250 Community Service Group %%� July 19, 1994 �tr_—m IE Mr. Dan Bruening Housing Rehabilitation Manager Special Projects Division City of Huntington Beach P.O. Box 190 Huntington Beach, CA 92648 RE: Huntington Harbour Mobile Estates Dear Mr. Bruening: Thank you for taking the time this morning to discuss the newly created special projects division in Huntington Beach. We agree with you that it is important that the mobile home park residents in your city be recognized as having special needs. As I pointed out to you on the phone, as representatives of the residents, we are happy to report that Les Frame Enterprises, Inc. owner of the leasehold interest at Huntington Harbour has expressed, in writing, a willingness to sell his interest in the ground lease to the residents. J The residents are obviously extremely happy with the prospect of finally being able to control their own destiny. We, of course, are very satisfied as we have been working diligently with Mr. Frame and the residents since April 20. As you might expect, the terms of the transaction continue to be a focal point of our discussion now that the price has been determined. To better acquaint you with who we are and what we do, we have enclosed a series of articles on a park we converted to resident ownership in'Vista California. We have also performed - consulting activities for the City of Rancho Mirage and are currently working for the City of Poway. A list of our references are enclosed as backup material. Finally, CSG has found that in other cities and municipalities that we have worked in, full participation by the residents has been encouraged. Hopefully in the near future, we will be in a position to interface directly with you so that we can jointly serve the residents of Huntington Harbour Mobile Estates. Sincerely, community service Group, Inc. Dave Mounier r! 165 Denny Way • Et Cajon, CA 92020 a (619} 449-4141 • FAX (619) 449-4267 7321 N. 16th Street • Suite 102.1-800-600-0084 Friday, October 1, 1993 Serving Mobile Home Communities and Seniors since 1974 City offers $238K to help residents buy Vista park By LLOYD STARR The Yata Pnu Sraft The ante for aiding residents; many elderly, of the Corona Del Vista mobile home ark went from $75,000 to 238,700 for the Vista City Council Tuesday afternoon. A price the council, sitting as the Community Development Commission, agreed unanimously to pa in the form of a loan to 31 of the residents who are classified as low or very low income. The council accepted the re- quest of a consulting firm working with those living in the 104-tenant park that calls for three categories of loans to residents, depending on their income and assets. The money for the loans will be taken from redevelopment set -aside funds, which can be used to aid in the creation of low• and very low-income hous- ing within a city. The council previously agreed to loan $75.000 to a non-profit corporation created by the residents to pay for in- itial consulting, engineering and processing fees. Escrow on the Anza Road park, which was offered by owner Johnny Klassen on a first right of refusal in July, was opened Sept. 10. In spite of the cit s aid, .however, the residen& bid to Please see Corona page Al 3 • Corona C Continued from page Al buy their park was close to fall- ing short because some of the lower income residents could not come up with the $7,700 needed for a down payment. Klassen has offered to finance the purchase of the Park for $4,368,000 but asked for a down payment of $750,000 from residents. The commission agreed to loan 17 tenants whose income is below $18,000 their portion of the down payment at 5 per- cent interest, with no payments on interest or prin- cipal due until the unit is sold. A second group of 10 tenants with incomes above $18,000 but with less than $36,000 in liquid assets will receive a similar loan but will pay rnon- thly interest payments. The balance will be due when the unit is sold. A group of four tenants with incomes above $18,000 and with more than $36,000 in assets will be ven the loan but will pay it back on a 120- month schedule. All those qualifying for the loans are classified as low in- come, with their annual income amounting to less than 80 per- cent of the median county in- come. ])avid Mounier, vice presi- dent of Community Services Group — the consulting firm hired by the residents --- said a meeting at 6 p.m. Tuesday would decide the fate of the offer. Residents were expected to vote at a parkwide meeting on whether to go ahead with the purchase. City of Vista officials will return to the City Council in approximately a month with the final loan documents. The residents have until Monday to commit to the pur- chase or the owner can enter- tain other bids for t}ie park. Va1.25 No.39 C C C i inni1 r , ii^i jrn Friday, October initles and Seniors since 1974 Vnt.25 Ho.42 CSC -offers assistance Stall photo by UiKF 14F.N O Consultation. Betty Hoff(left) and Mary Jean Hooker of Corona Del Vista Mobile Home Park discuss plans to purchase the park with Community Services Group consultant, James Scovie. to resident buyers By LLOYD STARK The Mobile Han" Cou im Stall David Mounier, a former mobile park owner, has found an occupation that draws on his background, makes every- one involved happy and in the process gives him a "psychic salary." 'We said to ourselves, with our backgrounds, is there something we can do that would be a natural extension of our experience," said David Mounier, who formed Com- munity Service Group (CSG) with a former CPA (Certified Public Accountant). 'It is a very rewarding business." The two -man company entered the market working as a consultant for residents try- ing to buy their parks pro- viding the financial, personal and political savvy to make the transition. The mirress of their tnv%inPss can be measured in the ongoing purchase of Corona Del Vista Mobile home Country Club, which is set to close escrow in mid -November — less than five months after owner Johnny Wassen offered it for sale. The catalyst for the second mobile home park purchase in C C C C • CSG _ I _ . . Continued from page Al the community may have been the passage of rent control -- which goes before Vista voters Nov. 2 — but CSG was creatt-d two years before to take advan. tage of the "wave of the future." "lf you look at it from the resident's point of view, they will always want to be in con- trol of their destiny, rent con- trol or no rent control," Mounier said. While his partner Jim Scovie brings finance and real estate experience to the company, :Mounier draws on his experi- ence as a former owner who sold to his residents in the first purchase of its kind in Vista. Mounier bought the Vista Cascades, a 143-space park in east Vista, in 1979 and 11 years later found things had changed. `There were things tugging at me to keep the park {his parents were on -site manag- ers), but I saw an opportunity to try something .new,' Mounier said, . Working with city officials, Mounier sold the park for $4.5 million to the residents in 1990 who, coincidentally, brought in a company headed by Scovie to act as management for the park. Mounier said he believes all sides were happy with the.pur- chase --= an opinion borne out with a recommendation three years later. ; Merdbecs of the Vista Cascade Homeowners Associa- tion recommended CSG to the residents of Corona Del Vista. In between, the two found if flood market (they are ppresent. .working with eight different darks) and some competitors -- 3ut •.without athe . samq )ackground.. ; ... , ..... . "At:first,,we.thought there Nas a•lot of comr4fition,"'said icovie, presid, 'the cam pany. "You need tobe familiar with the entire process," Jinn Scovie said, inlcuding finance, city politics, and real estate law. 'The people we nave seen were typically good in only one of those areas." CSG works with both mobile. home park and condominium conversions, creating a unique finance package for each. In a conversion such as Corona Del Vista, a non-profit corporation is created, which sells shares to residents and then buys the park — an ar- rangemmt which treads on un- familiar territory for many residents and creates one of the biggest problems for such con- versions. "The biggest thing we have seen is a fear factor, because they (residents) are accustom- ed to thins on a personal scale," Scovie said. "You know, these are folks are ping to be running a corporation with a *.4 million assetL' The two must work as both teachers and salesmen. 'here is a considerable eau- cation process," Mounier said. But the more important in- gredient may be their personal style. "When you go before a group of residents, -you can't come across as too stuffy, too stodgy," Mounier said.' There has to be a certain human element. to you; to win over their trust.' The trust is' necessary as residents commit their life sav- ings to purchasing the park, while local governments must also be sold on -helping poorer ti. residents: through the use of redevelopment funds. Mounier points with pride to i the fact that less than 30 per. ' cent of the downpayment is be- ing contributed by the City of Vista for purchase'. of,.,the CoronaDelVista. " ' ' The council agreed to use $238.000 in redevelopment funds to assist low-income families with the purchase — a decision that is an Important element. The two believe that, in spite of obstacles, park purchases will become more common. "It is a win -win -win deal; Mounier said. For residents, the reward can be a housing payment that is lower than the rent and a chance to control their own future. "Once it is concluded, the rents for those who buy are go- ing to be less in ten years than they are now," Mounier said. "By buying your share of stock, you are controlling your own destiny, and that is what it is all about." For the owner, there is gen- erally a slightly higher sale value on the property, because tenants are willing to pay more than most investors. The third group that is often helped by such a purchase is focal elected officials. 'This is one less park or one less group of residents that is going to be on city halls' doors, C hollering about rent control," Mounier said. The bottom line must be the best line. "When the transaction is completed, if you have got happy residents, a happy city and happy owners, you have solved the problem for every- one," Mounier said. "I guess that is why Jim and I have so much fun," Mounier said. "There is a certain degree of psychic income that goes with being able to solve a prob- lem for all three." c C Friday, November 19, 1993 Serving North San Diego County Mobile Home Communities and Seniors since 1974 Corona del Vista is resident owned By LLOYO STARR The 1 *bde%o"*vCmOorSta11 Like an early Christmas pre- sent, residents of the Corona Del Vista Country Club Mobile home park became controllers of their own destiny when escrow closed Thursday to pur- chase the park for an estimated S43 million. "We are home free, the sale is complete," said David Mounier, vice president of the Communi• tyServices Group (CSG) that is working as a consultant for the purchase. 'They (residents) are estatic." Don Dolan, president of the newly formed Corona Del Vista Inc. -- the resident's non-profit corporation which owns the park, said he would defer commenting on the purchase until a general meeting Friday evening. In four months and 24 days, residents went from tenants of the 104•space park, located at 1501 Anza Avenue, to owners -- with a little help from the City of vista. Although the city's Com- munity Development Commis- sion allocated $238,000 to aid low-income residents with the downpayment and purchase, only $161,000 was utilized by residents. "I%%en all is said and done, only four percent of the money in this transaction came from public funds," Mounier said. fie credited city officials with making the purchase go smoothly. This is the second purchase of a park in Vista by the residents, the first was the Vista Cascades, but it was a purchase that was watched carefully by other park tenants and park owners — some of whom were embroiled in a dispute over rent control. "We are talking with other mobile home park owners in Vista who have been standing on the sidelines, seeing how it worked out," Mounier said. Vol.25 No.46 Resident owned — homeowners at Corona Del Vista Mobile Country Club are now park owners as well. i.:.,�.•Lry, th:c.��+UUcI 4., '._.- Isi,n.%: t";;..•I, 0-J `Forth County New park- ..owners celebrate in Vista Hy David clicks board, said the nine -member panel StafT riter will set policy, but the details will VISTA —The new resident own- be left to a property management ers of Corona del Vista mobile company. - ' . , home park threw a party Sunday. ' "We're still coming down from a They had it in their clubhouse. very big high," Dolan said. "I`mt just with their swimming pool, their completely elated for these people. streets and their homes just out- They now have a stake in their side the door. future. We don't have to sweat rent "1 never have felt good not own- control or nonexistent rent control." Ing the land underneath me; I ' The corporation t to a the never felt good about that" said ark will still collet "rent." 105•year•oid Coral r+Iver, a resi- will go nee and cent since (tic pb/okopened in 1969, the mortgage, said Jim Scovle of But alter the residents closed a Community Service Group, the con - deal two weeks ago to buy the 104- sulting firm that setup the deal. space park at 1501 An=a Ave., Once the mortgage is paid off, Cilver started to relax. "% the residents will only have to pay, "I feel Iikw3,RnVa foundation maintenance fees, Scovie said. ut,urt Arr. ,Fyeu want to know the •They► already own their individual .truth." she said. "You know how I. -homes, and they have the right to felt before -- just like I had a man- tell their shares in the corporation, lion in the sky. There's no founds= "he said. • : ' 1-- tion under a mansion in the sky." . Because the corporatiozi.Is non - most or the park residents are profit and owned by the residents, it senior citizens oft fixed incomes: will not need,to maintain a profit 7•hc drive to buy the park started margin by raising rents above the with their rrustration over steadily cost ofoperations,Dolan sald:•,;' increasing rent. No rent decrease is anticfpated, They had to shell out $7,700 fosbut it is not likely the resident board ' each space In the park to raise the .will raise the rent anytime soon, he 5750,000 down payment and $50,000" sald ..:: • . .•:.� , . in fees needed to buy Corona del•: "We definitely, deRaltely lmow Vista. Not all the residents partici_$ it's not going to be raised for three paled, but a few bought more than. years," said Myearold Loee.Foote, one lot. t a resident since the park opened. With the lielp of a consulting Brut, • She was one of 31 low-income resi- the residents formed a nonprofit. dents who received loans f m the corporation to buy the park. Afterj city of Vista so they could make the the firm closed the deal. the resi down payment. dents who make up the park board; "We aren"t subject to an owner or directors took responsibility fo_V,who wants,to snake big money.and ever}thinjr fmm the rent and main —'fncresse the;rent when he desires" Mining the hniperty to ndding "rtsi-` said 71-yeatwld William llelkenn. cunt owned- to tine sign out front- :'; `we're in control of our, own des - Don t}ulan- p 'fient of the° tiny. that's the thinIV, _ , ' MOH111 HOMIS Friday, April 1, 1994 7 jj� ;i �•�� �:"f'wi'fY.•r�ew!T,�'.•�-"#.r:t'�'l�S�:`,e�' :- �. • -. t Serving North San Diego County Mobile Home Communities and Seniors since 1974 Coral Culver By L€IGH ANN LEBUQA The kA*51 WM0s Courier Solt At abe 105, Corona del Vista's Coral Culver is only "chronologically" the oldest resident of her mobile home park. To her neighbors, "she's a bright penny,' according to manager Ruth Mounier, who said she spices up the countless park activities she takes part in. "I do everything," said Culvtr, rertrring to the many special events and 'regular ac- tivities at the clubhouse, and her membership in the park's Ladies' Club. She recently was a model in a park fashion show and tea which was sponsored by the club. "I'm the oldest one in the park, and have lived here for 26 years, since the park opened in 1968,' she said proudly, poin- Vol.26 No.13 ting to the fact that she is only one ofthree original residents. Originally from ',',ebb City, Mo.. Culver worked for three ears as a sixth -grade teacher in Okalahoma. "1 always loved to teach," she said, and, with three children, grandchildren and great-grandchildren of her. own, said she is still very fond of young people. Oklahoma was also where she met her husband, who for years worked for major news- papers as a line type machinist. Past employers included the Kansas City Star and Los Angeles llerald-Examiner. The couple moved to Vista to retire. "This park is perfect," she said of her mobile home park, her neighbors and the advan- tages the park has to offer. `It's a perfect place, and everyone gets along really well." . C r C C C REFFERENCES Corona Del Vista Mobilehome Park Don Dolan, President 619-724-3766 1501 Anza Avenue Unit 2 Vista, CA 92084 Mr. Robert Smylie, Esq. 2049 Century Park East Suite 2050 Los Angeles, CA 90067 310-553-3758 The Highlands Mobile Home Association Mike Ziegmont, President 619-258-8533 7467 Mission Gorge Road Santee, CA 92071 Ms. Wyvetta Wilson Redevelopment Agency Coordinator City of Vista 600 Eucalyptus Vista, CA (619) 726-1340 Mr. Paul Franco Redevelopment Agency Coordinator City of Rancho Mirage 69-825 Highway 111 Rancho Mirage, CA (619) 324-4511 Department of Regional Planning County of Los Angeles Rudy Lackner, Administrator 320 West Temple Street Los Angeles, CA 90012 Vista Cascade Mobile Home Park Martha Hancock 619-758-0787 1600 East Vista Way Vista, CA 92084 Councilman Ted Cole City of Vista 619-726-2236 P.O. Box 1988 Vista, CA 92085 HUNYTNGI ON HARBOUR MOJ3M ESTATES HOiVM0WNM ASSOCIATION January 30,1995 Honorable City Council Mcmbcrs City of Huntington Beach Huntington Beach, CA Dcar Honorable City Council Members, RECEIVEL CITY CEP. CITY or 910 The residents of Huntington Harbour Mobile Estates are engaged in purchasing their Park. We have an offcr to sell the leasehold signed by Mr. Les Frame, W Frame Enterprises, We are seelang an offer to sell. the land from the Phelps fanu'ty; we believe that oppomutity will become more promising once it is clear that w-e have the ability to consumate the purchase. We require funds in order to engage in our duc diligence and perform the other tasks needed to successfully conclude Park purchase. We hsrve requested a loan from the City in the amount of F'dlecn Thousand Dollars (t15,0001 with thcso monies to bo used to conduct our Phase i studies.. Ue purpose of this letter Is to urge your approval. of this loan. The activities to be performed leading to Pule ptmhusc havoc been broken into three Phases: PHASE I: The first phase of activities consist of an Appraisal, an Engineering Study, and a Phase I Environmental Survcy (the Thu Diligence Studied the total cost ofwhich will not exceed FAlcen ThousandDollars ($15,000.00). ,1 Tbc appraisal will tell us rho -,-lace of the Park, both the leasehold and the land. Thin approaches will be used to arrive at an cstimate of value: (1) The income method, using net operating income of similar parks, (2) the substitution method, using comparablo sales, And (3) the coat method, using the cost for replacement. The engiucring study will tell us Litt soundness of the infrastructutn in the park: The elect dcal systcm, the water system, the sewer system, the roads, etc. At tho conclusion of this studA we will have an estimate of what defects, if any, need to be corrected prior to purchmo, what we can expect to maintain the park and the related costa over the short temn, and how much we should expect to place in over reserve pool for nesr term and long range park maintenance. The Phase I Environmental Study will tell us whether there arc any unsafe polutants or toxic waste within the perimeter of the Park. H?� ASE I4: The second phase of activities will consist of a Low Income Study and the development of the initial Operating Budget, the total cost of which will not exceed Twenty Th d Doll t20 000 00 ousan era ( - i- re F-6 �,/L l4?�& /fens �.D/Jll7lil/tI/<<lfiorl geceivexI /�3/i9� i. HUN! INGTON BEACH CITY COUNCI ASI~.MBERS (continued) Our prehtninary sutM of household income suggasts that 77% gwAfy as moderato to low income households. IMo survey we performtd was dons to give us a Bros indicator of inootne levels of Park residents. The Iow income study results will give us a more exact proSlo of the Income Ievols of Park residents. In addition, residents who qualify for fodcral and state entitlements will havo comptowd applicatiom dmlopod through the assistanze of trained consultants. The results of the Phase I studies wM be key nwurcat for developing the h"A operating budget. A budget dcfmcs incrome as well as w; mues. So, at this time, each of ua will haw a rthtiv* accurate each ate of our monthly coats, our new and hopefuDy reduced "rents". PHASEM: The third phase of activida tea devoted to preparing the offering circular, including associatod Legal Costa, and the legal darts of Incocporaticm, the total coat of which will not wtaoad Thirty Thousand Dollars (S30,000). The offering circular and our now ardda of incogxndon wM be reviewed and approvod by the State Department of Corporations. At this time, rcddmtt will receive an offering circular and wiII be ,given an opportunity to purchasc sham to the new corporation. Next, tho purch so is funded and recorded and finally escrow can close. As a culminating actMty, the residents will hold a vvey Lugo celebration in the Park, honodng the new managem-rat -- themselves. Each of you is hereby cordially invited to participate in this cckbradon. Thank you vcry much for taking tho time to review this communication. We arc rcquaating a lout in the amount of Fificrn Thousand Dollars ($15,000.001 with these funds to bo used solely for the Phase I studies Identified above. At the eonduaion of these studies, we wM report back to you %ith our findings. I urge your approval of as request. Sin ly, It2 Cs� C � `t�rt�G C7•r._ Raymorrd C. Manion President Huntington Harbour Mobile Estates Homeowners Association. Sam- VE L)O'Aoe FRo�'t : SPAY %�1itN/oN g7s ioi� A�a 0" d / 77 ew ej aMa o, 4 Humroo,ve.,rew p#vyic c Es TitT'� s 3 PAS Es '37V am- ITC7 ire* Fmpt. (sue REvoose'oj ')