HomeMy WebLinkAboutMonogram Residential Huntington Beach Project Owner, LP - 2014-05-19'Dept. ID PL 14-010 Page 1 of 2
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Meeting Date: 5/19/2014
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CITY OF HUNTINGTON BEACH
REQUEST FOR. CITY COUNCIL ACTION
MEETING DATE: 5/19/2014
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Scott Hess, AICP, Director of Planning and Building
SUBJECT: Approve the assignment of the approved Development Agreement (DA) for the
Pedigo Project to Monogram Residential Huntington Beach Project Owner, LP
located at the southwest corner of Edinaer Avenue and Gothard Street
Statement of Issue:
Monogram Residential Huntington Beach Project Owner, LP (Monogram) is requesting
consideration by the City Council to provide consent to the assignment of the approved
Development Agreement (DA) for the Pedigo Project, a residential project previously approved for
the southwest corner of Edinger Avenue and Gothard Street. The DA secures the affordable
housing obligation of the project and Monogram is purchasing the project.
Financial Impact:
Not applicable
Recommended Action:
Approve the assignment of the Development Agreement for the Pedigo Project to Monogram
Residential Huntington Beach Project Owner, LP.
Alternative Action(s):
The City Council may make the following alternative motions:
1. Deny the request for approval of the assignment.
2. Continue the request for approval of the assignment and direct staff accordingly.
Analysis:
Applicant: Rob Hodge, Monogram Residential Huntington Beach Project Owner, LP, 15601 Dallas
Parkway, Ste. 600, Addison, TX 75001
Location: 7262, 7266 and 7280 Edinger Avenue and 16001 and 17091 Gothard Street (southwest
corner of Edinger and Gothard)
Development Agreement No. 13-002 was approved by the City on September 16, 2013 to secure
the affordable housing obligation of the Pedigo Project, a 510 unit apartment project that will include
51 low and moderate income units. The property owners that were signators to the Development
Agreement (DA) are selling the entitled project site to Monogram Residential Huntington Beach
Property Owner, LP. This limited partnership includes Monogram Residential Huntington Beach
Project GP, LLC as the general partner and KNR FIB Sponsor Parent, LLC as its partner.
Item 7. - I Fly-, -; 20-
Dept. ID PL 14-010 Page 2 of 2
Meeting Date: 5/19/2014
Section 15(e) of the DA requires that prior to a property owner's assignment of any rights, duties or
obligations of the DA, the City has the right to approve the proposed successor and/or assignee
provided the City's approval may not be unreasonably withheld, conditioned or delayed. The
purpose of such approval is to allow the City to confirm that the successor and/or assignee has the
financial ability and experience to fulfill the DA terms and obligations.
Staff from Planning, Business Development, and the City Attorney's office have reviewed the
request and support the assignment. The new owner has demonstrated experience and ability to
complete the project and fulfill the terms of the DA. Monogram (formerly known as Behringer
Harvard Multifamily REIR I, Inc.) is a $2.9 billion public real estate trust, and executives of KNR HB
processed the entitlements for the Pedigo project and thus are aware of the City's requirements for
the site. Approval of the assignment does not modify any of the project's conditions nor the DA
terms. Subsequent to the property transfer and consistent with the project's conditions of approval,
the new owner will be required to have the affordable housing covenant (Exhibit C to the DA)
revised and approved by the City prior to its recordation.
Environmental Status:
The proposed request is exempt from the California Environmental Quality Act pursuant to Section
15061 (b)(3).
Strategic Plan Goal:
Enhance economic development
Attachment(s):
1. Project Narrative
2. Recorded Development Agreement for the Pedigo Project
SH:MBB:kdc
HB -121- Item 7. - 2
ATTACHMENT
Item 7. - 3 HB -122-
Allen Matkins Leck Gamble Mallory & NatsisLLP
Allen Matkins 1N9tt0o0rny; at UN
Main Street, 5" Floor I Irvine, CA 92614-73211
Telephone: 949.553,1313 11 Facsimile: 949.553,8354
www. all enmatkins.com
William R. Devine
E-mail: wdevme@allenma:kins.com
DirxtDial:949.851.5412 FileNtunber: 3737119-00001/0C1018OW01
April 17, 2014
Mary Beth Broeren
City of Huntington Beach
Department of Planning
2000 Main Street
Huntington Beach, California 92648
Re: Assignment and Assumption of Pedigo Development Agreement
Dear Mary Beth:
As we discussed by phone, the property currently held by Pedigo South., Inc., Pedigo
Gothard, LLC and Pedigo South Edinger. LLC in the City of Huntington Beach is going to be sold
to anew owner next week. This property was entitled for a 510-unit multifamily project by the City
in 2013. Subsequent to that approval, the City and the land owners entered into a Development
Agreement ("DA"), dated September 16, 2013, to secure the affordable housing obligations tied to
the project. The DA was recorded November 14, 2013 as Instrument No. 2013000629216 in the
Recorder's Office of the County of Orange.
Pursuant to Paragraph 15(e) of that DA, prior to a property owner's transfer/assiannient of
any rights, duties or obligations under the DA., the property owner shall present such information
required by the City in its commercially reasonable discretion. to demonstrate to the City's
satisfaction that the proposed successor and/or assignee has the financial ability and experience to
fulfill the specific rights, duties and obligations that would be assumed. According to that section
of the DA, its provisions are self-executing and shall not require the execution or recordation of any
further document or instrument.
The purpose of this letter is to provide you with the necessary information to establish the
financial ability and experience of the proposed successor/assignee and to request City to confirm
satisfaction of this requirement. Toward this end, provided below is a brief summary of the
financial ability and experience of the proposed successon"assignee. In addition, I have or will.
provide additional materials referenced in this letter via separate communication with the City.
The property subject to the DA was originally under an option contract to, and was being
entitled by, Archstone, a national multifamily real estate investment trust. In 2013, Archstone was
acquired by AvalonBay and Equity Residential. Subsequent to that sale., the option. contract was
terminated. At that time, former executives of Archstone., Richard Larnprecht and Kenneth Keefe,
Los Angeles I Orange County 1 San Diego I Cc-itur)l City I San Francisco
HB - 123- Item 7. - 4
Allen Mat1dris Leck Gamble Mallory
& Natsis IJ P
Aftomeys at Law
Marv, Beth Broeren
April 17, 2014
Page 2)
formed a new partnership, ArchRock Development Group LLC ("ArchRock") and entered into an
agreement with the landowners to Finalize the entitlements for the property. Upon securing all
discretionary approvals for the project, ArchRock signed a contract to acquire the site. ArchRock
will be assigning its rights to purchase the property to a new entity which will be the new owner.
That entity will be Monogram Residential Huntington Beach Project Owner, LP. This limited
partnership includes Monogram Residential.f.Juntington Beach Project GP, LLC as the general
partner, and KNR 1113 Sponsor Parent, LLC as its partner. Monogram Residential Huntington
Beach Project Owner, LP will purchase the property, complete the design process, and construct the
project.
Monogram, Residential Huntington Beach Project GP, LLC is a subsidiary of Monogram
Residential Trust. Inc. which is the new name for Be.hringer Harvard family REIT 1, Inc. See
the Behringer Harvard Multifamily REITI, inc. 10-K and the 8-K showing the name change, both
of which have been sent to you for your review. Monogram Residential Trust, Inc. is a $2.913
public real estate investment trust with. 56 investments in over 15,000 apartments nationwide, with
$ 1 3.9M of cash as of 12/31/2013.
KNR ff]B Sponsor Parent, LLC is made Lip of three former Archstone executives, Neil
Brown, Richard Lamprecht and Kenneth Keefe. See the Sponsor Background Summary sent with
this letter. Thus, the development partnership acquiring the site includes the local development
experience of the former,,krchstone executives who entitled the project, as well as Monogram
Residential which has the financial ability and history developing, owning, and operating luxury
multifamily communities throughout the United States. The combined team clearly has the
financial ability and experience necessary to fulfill the rights, duties and obligations under the DA.
Closing on this property is scheduled to occur during the week of April 2 1", so we would
appreciate your expeditious review of these materials andreceipt of a continuation that you are
satisfied and approve of the transfer/assignment. If you require any additional information, please
let me know as soon as possible so we can get it to you in a timely. manner. Thank you for your
help in processing our request.
Sincerely,
William R. Devine
WRD:pnic
Item 7. - 5 1113 -124-
Huntington Beach at Edinger
From October 2010 until February 2013, when Archstone was acquired by Equity
Residential and AvalonBay Communities, Neil Brown served as Archstone's
Chief Development Officer overseeing all of the company's development
activities nationwide. Mr. Brown joined a predecessor of Archstone (Security
Capital Atlantic) in January 1996 and during his 17 year tenure, with Archstone,
the company completed the development of approximately $4.5 billion of
apartments, representing more than 38,000 apartment units. At the time of
Archstone's acquisition, under Mr. Brown's leadership, the company had grown
its development pipeline to more than $5 billion. While at Archstone, Mr. Brown
served on the company's Executive Committee and on its Investment
Committee. Mr. Brown has 35 years of business experience and has been
developing apartment communities for nearly 30 years,
Before joining Archstone, Mr. Brown opened the Florida office of JPI (the first JPI
office outside of Texas) and served as its Regional Vice President and Regional
Partner with responsibility for all of JPI's development activity in the state of
Florida. Prior to JPI, Mr. Brown was a partner with Trammell Crow Residential in
south Florida. He served four years as an officer in the Corps of Engineers of the
United States Army, obtaining the rank of Captain before leaving the Army to
attend Harvard Business School.
Mr. Brown received a Bachelor of Industrial Engineering with High Honor from
the Georgia Institute of Technology and an MBA from the Harvard Business
School.
Mr. Brown is a member of the Urban Land Institute (ULI), a member of the
Multifamily Council (Blue) of ULI, a member of the Multifamily Leadership Board
of the National Association of Home Builders, and a member of the National Multi
Housing Council, He has been an invited speaker at numerous multifamily
industry events.
Mr. Lamprecht has been a leader of apartment development in the top California
markets for the majority of his career, with more than 24 years in the industry,
His most recent position was Executive VP, Western Investments for Archstone,
a national owner and developer of multifamily properties. Mr. Lamprecht was
responsible for all apartment development activities in the western United States.
Under Mr. Lamprecht's leadership, the group purchased or contracted to
purchase sites totaling over 5,800 units, started construction or was prepared to
start construction on 11 projects totaling approximately 2,700 units, and
reorganized the team, added staff where needed, and implemented procedures
HB Item 7. - 6
Huntington Beach at Edinger
to maximize efficiency, improve coordination with other departments, and
increase development quality.
Prior to joining Archstone, Mr. Lamprecht founded REL Property Consulting,
specializing in providing advisory services to owners and investors who develop
and acquire multifamily housing. Before founding REL, the majority of Mr.
Lamprecht's career was spent at The Irvine Company, one of the leading master
planning and development companies in the nation, where he was responsible
for all apartment development activities for more than two decades. Under Mr.
Lamprecht's leadership, the apartment development group was successful in
entitling and developing more than 50 properties totaling approximately 27,000
apartment units in nine jurisdictions in Orange, San Diego, Santa Clara, and San
Mateo counties in California.
Mr. Lamprecht has a Masters Degree in Accounting from Brigham Young
University and began his professional career as a CPA for Deloitte, Haskins &
Sells in 1984.
Mr. Keefe has more than 23 years of real estate experience including a wealth of
experience in multifamily development and deal structuring. His most recent
position, which he held for more than five years, was Group Vice President for
Archstone, responsible for all development in Orange County, San Diego, and
the Inland Empire. Mr. Keefe's experience at Archstone includes work on
various projects totaling more than 7,000 units and with total expected
investment of more than $2 billion. Under his leadership in the last two years, six
projects, totaling approximately 2,250 units were brought into contract or were in
the contracting process, covering all three of his market areas, in both off -market
and widely -marketed transactions.
Prior to joining Archstone, Mr. Keefe was responsible for sourcing, underwriting,
structuring, acquiring, and developing multifamily and commercial office
properties in the Washington D.C. area for various entities, including The Clarett
Group, owned at the entity level by Prudential Real Estate Investors, The
Penzance Companies, and Commonwealth Capital Group LLC.
Prior to his transition to multifamily development, Mr. Keefe led real estate
finance and accounting functions for Commonwealth Atlantic Properties, a
wholly -owned subsidiary of a Lazard Fr&res managed fund, and Eastern Realty
Investment Corporation, the U.S. real estate operation of a $20 billion English
pension fund. He began his career in public accounting, after obtaining a
Bachelor of Science in Accounting and Finance from the University of Maryland
and becoming a CPA.
Item 7. - 7 1-113 -126-
ATTACHMENT #2
HB -127- Item 7. - 8
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attention: Director of Planning and Building
ALLEN MATKINS LECK GAMBLE
MALLORY & NATSIS LLP
1900 Main Street, 5th Floor
Irvine, California 92614-7321
Attention: William R. Devine, Esq.
This Document was electronically recorded by
City of Huntington Beach
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
1111111111111 J11111111 11111111111111111111111 111IN 0 FEE
2013000629216 10:27arn 11114/13
276 402 Al2 44
0.00 0.00 0.00 0.00 129.00 0.00 0.00 0.00
(Space Above For Recorder's Use)
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT ("Agreement") is made in Orange County;
California, as of September 16, 2013, by and between the CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of California (the "City"), PEDIGO GOTHARD. LLC, a
California limited liability company (the "Property Owner I "),.PEDIGO SOUTHEDINGER,
LLC, a California limited liability company ("Property Owner 2"), and GEORGE W. PSAROS
TRUST, George W. Psaros and Helen Psaros, trustees ("Property Owner 3 ") (collectively,
"Property 0-wncrs").
RECITALS:
A. The City is authorized pursuant to Government Code sections 65864 through
65869.5 and Huntington Beach Zoning and Subdivision Ordinance (HBZSO) Chapter 246 to
enter into binding development agreements with persons or entities owning legal interests in real
property located within the City.
B. Property Owners are the owners of that certain real property more particularly
described in Exhibit A attached hereto and incorporated herein by this reference (the "Property")
C. The City and the Property Owners each desire to enter into this Agreement
affecting the Property in conformance with Government Code section 65 864 et seq. and HBZSO
246 in order to achieve the mutually beneficial development of the Property in accordance with
this Agreement.
D. Property Owner 2 or an affiliate of Property Owner 2 is in the process of
acquiring the ownership of that portion of the Property currently owned by Property Owner 3 but
such closing will not be completed until after approval of this Agreement.
This doctiment Is solety for" ofilchd
business of the MY Of KmOMW
989489,02/OC as con temPNOAd undw
3731-17-0000111 t-13-13/wrd1wrd Govemlywt Code See- 6103 and
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Item 7. - 9 1 IB -128-
E. The Property Owners seek to develop a project on the Property consisting of up to
510 dwelling units and at least 25,815 square feet of public open space, as more particularly set
forth in the Development Plan (collectively, the "Project"), attached as Exhibit B and
incorporated herein, all in accordance with City regulations, as may be amended from. time to
time.
F. Ilie City Council of the City (the "City Council") previously certified an
environmental impact report No. 08-008 (the 'TIR") for an area which includes the Project site,
and the Planning Commission has conducted and approved an Environmental Asses sment/Initial
Study Check -list (TA") for the Project in connection with the Planning Commission's approval
of Site Plan Review 12-002 pursuant to the Beach and Edinger Corridors Specific Plan (BECSP),
Town Center Boulevard segment.
G. The City and the Property Owners each mutually desire to obtain the binding
agreement of one another to permit and ensure that the Property is developed strictly in
accordance with the provisions of this Agreement.
H. This Agreement will benefit the Property Owners and the City by eliminating
uncertainty in planning and providing for the orderly development of the Project. Specifically,
this Agreement (1) eliminates uncertainty about the validity of exactions to be imposed by the
City, (2) provides for the construction of needed affordable housing, (3) ensures that
development of the Property occurs within a reasonable timeframe, and (4) generally senres the
public interest -within the city and the surrounding region.
I. The Planning Commission and City Council have each given notice of their
intention to consider this Agreement, and have each. conducted. public hearings thereon pursuant
to the relevant provisions of the Government Code, The City Council has found that the
.provisions of this Agreement are consistent with the City's 1996 General Plan for development
within the City, as amended (the "General Plan") and City zoning ordinances, as amended. The
Planning Commission and City Council have also specifically considered the impacts and
benefits of the Project upon the welfare of the residents of the City and the surrounding region.
The City Council has determined that this Agreement is beneficial to the residents of the City
and is consistent with the present public health, safety and welfare needs of the residents of the
City and the surrounding region.
J. On July 9, 2013, the Planning Commission held a duly noticed
public hearing on this Agreement.
C�
K. On September 16 2013, the City Council held a duly noticed public
hearing on this Agreement.
NOW, THEREF ORE, in consideration of the foregoing recitals which are hereby
incorporated into the operative provisions of this Agreement by this reference and other good
and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the City
and the Property Owners agree as follows:
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1-113 - 129- Item 7. - 10
Definitions.
1.1. "Affordable Dwelling Units" shall mean a Dwelling Unit available at
Affordable Rent.
1.2, "Affordable Housing Agreement" shall collectively mean that certain
Affordable Housing Agreement Restrictions —Rental (Declaration of Covenants, Conditions and
Restrictions for Property) (AHARR) by and between the 111311A; the City and the Property
Owners together with all attachments thereto, which was approved as to form as part of this
Development Agreement. AHARR shall also include any and all amendments or modifications
thereto,
1.3. "Affordable Rent" shall have the same meaning set forth in California
Health and Safety Code section 50053, as more specifically set forth in. the Agreement
Containing Covenants Affecting Real Property to be attached to the Affordable Housing
Agreement.
1.4. "Applicable Rules" shall mean the rules, regulations, ordinances and
official policies of the City which were in force as of the Effective Date (as defined below),
including, but not limited to, the General Plan, City zoning ordinances and other entitlements,
development conditions and standards, public -works standards, subdivision regulations, grading
requirements, and provisions related to density, growth management, environmental
considerations, and design criteria applicable to the Project. Applicable Rules shall not include
building standards adopted by the City pursuant to Health and Safety Code sections 1.7922 and
17958.5.
1.5, "Area Median Income" shall mean the area median income for the County
of Orange ("County") as published annually by the California Department of Housing and
Connamunity Development and deternuned in accordance with the U.S. Department of Housing
and Urban Development criteria then in effect and published from time to time. For purposes of
this Agreement, the qualifying limits shall be those limits for the County, as set forth in Title 25,
California Code of Regulations, section 6932, as that section may be amended, modified or
recodified from time to time. If the California Code of Regulations is amended or modified
during the term of this Agreement so that such regulations do not specify the area median income
from the County, the City shall negotiate in good faith to determine an, equivalent authoritative
source which determines median income for the County.
1.6. "City Council." shall mean. the City Council of the City.
1.7. "City Manager" shall mean the City Manager of the City.
1.8, "County" shall mean Orange County.
1 9 "Development Impact Fees" shall mean and include all fees charged by the
City in connection with the application, processing and approval or issuance of permits for the
development of property, including, without limitation: application fees; permit processing fees;
inspection fees; utility capacity fees; service or connection fees; hbrarylcultural enrichment fees;
traffic impact fees; development impact or major facilities fees; park fees; flood control fees;
9894 M0210C
373217-0000116-25-131vnUrvrd -3-
Item 7. - 11 IJi3 -130-
environmental. impact mitigation fees; and any similar governmental fees, charges and exactions
required for the development of the Project.
1.10. "Development Plan" shall mean Site Plan. Review No. 12-002 approved by
the City.
1.11. ".Discretionary Actions" and "Discretionary Approvals" shall mean those
actions and approvals which require the exercise of judgment, or imposition of a condition or
obligation, by any officer, employee, review board, commission or department of the City.
Discretionary Actions an.d .Discretionary Approvals are distinguished from activities or approvals
which merely require any officer, employee, review board, commission or department of the City
to determine whether or not there has been compliance with applicable statutes, ordinances,
regulations or conditions of approval.
1.12. "Dwelling Unit" shall mean. a place in the Project that is legally available
to be rented by a person or fainiiy.
1.13. "Effective Date" shall mean. the date on which the ordinance approving
this Agreement has been adopted by the City.
1.14. "HBHA" shall mean the Housing Authority of the City of Huntington
Beach.
1.15. "Low Income Household" shall mean persons and families whose incomes
do .not exceed the amount published annually for Low Income Households by the California
Department of Housing and Community Development in accordance with California Health and
Safety Code Section 50093.
1.16. "Moderate Income Household" shall mean persons and families whose
incomes do not exceed the amount published annually for Moderate Income Households by the
California Department of Housing and Community Development in accordance with California
Health and Safety Code Section 50093.
1.17. "Market Rate Rental Dwelling Unit" shall mean those Dwelling Units in
the Project that are not Affordable Dwelling Units nor governed by the Affordable Housing
Agreement.
1.18. "Periodic Review" shall have the meaning assigned to such term in
Paragraph 10(a).
I.19. "Pla -drag Commission" shall mean the Planning Commission of the City.
1.20. "Project" shall mean that development contemplated pursuant to the
Development Plan, attached as Exhibit B.
1.21. "Recession" shall mean an economic recession as determined by the
National Bureau of Economic Research, or any successor organization charged with the duty of
determining the state of the United States economy.
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HB -131- Item 7. - 12
1.22. "Subsequent Rules" shall mean the rules, regulation,-,, ordinances and
official policies of the City, adopted and becoming operative after the Effective Date, including,
but not limited to, the General Plan, the Specific Plan, City zoning ordinances and other
entitlements, development conditions and standards, public works standards, -subdivision
regulations, grading requirements, and other provisions related to density, growth management,
environmental considerations, and design criteria.
2. Term of Ageement. This Agreement shall. become operative and commence
upon the Effective Date and remain in effect for a tern of -,even (7) years. Except for continuing
obligations regarding affordable housing covenants and requirements, upon the expiration or
termination of the term, this Agreement shall be deemed terminated and have no further force
and effect.
1 Vested Rightto DevelcT the Project. Subject toParagraphs 3.3through 3.8,
-
below, and the Applicable Rules, the. City hereby grants to the Property Owners the vested right
to develop the Project on the Property to the extent and in the manner provided in this
Agreement. Subject to Paragraphs 3.3 through 3.8, below, any change in the Applicable Rules
adopted or becoming effective after the Effective Date (Subsequent Rules) shall not be
applicable to or binding upon the Project or the Property. Subject to Paragraphs 3.3 through 3.8,
below, this Agreement will bind the City to the, terms and obligations specified in this Agreement
and will limit, to the degree specified in this Agreement and tinder state law, the future exercise
of the City's ability to regulate development of the Project.
3.1. No Conflicting Enactments. Subject to Paragraphs 3.3 through 3.8, below,
neither the City Council nor any department of the City shall enact rules, regulations, ordinances
or other measures which relate to the rate, timing, sequencing, density, intensity or configuration
of the development of any part of the Project which is inconsistent or in conflict with this
Agreement during the term of this Development Agreement.
3.2. Initiative Measures. Subject to Paragraphs 3.3 through 3.8, below, the
Property Owners and the City intend that no moratorium or other Iiinitation (whether relating to
the rate, timing or sequence of the development of all or any part of the Project and whether
enacted by initiative or otherwise) affecting parcel or subdivision maps (whether tentative,
vesting tentative or final), building permits, certificates of occupancy or other entitlements shall
apply to the Project to the extent such moratorium or other limitation is inconsistent or conflicts
with this Agreement.
3.3. Federal or State Laws. Notwithstanding, any provision to the contrary
contained herein, the City expressly reserves the right to modify any of the Applicable Rules to
the extent necessary to comply with applicable federal or state laws, codes or regulations which
preempt local jurisdiction including, by way of example, and without lirniting the generality of
the foregoing, the California Environmental Quality Act, all building codes, and any safety
regulations, but such modifications shall be made only to the extent required thereunder.
3.4. Einem)ency, Notwithstanding arty provision to the contrary contained
herein, the City expressly reserves the right to apply to the Project any development moratorium,
limitation on. the delivery of City -provided utility services, or other generally applicable
989489.02/0,
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Item 7. - 13 1-111-3 -1"2-
emergency rule, regulation, law or ordinance affecting land use: (1) which is based on genuine
health, safety and general welfare concerns (other than general growth management issues); (22)
which arises out of a documented emergency situation, as declared by the President of the United
States, Governor of California, or the Mayor, City Council or City Manager of the City; and (3)
based upon its terms or its effect as applied, does not apply exclusively, primarily or
disproportionately to the Project or the Property.
3.5. Project Completion. This Agreement and the EIR and associated findings,
are based on the expectation that the Project will be constructed as follows: up to 459 Market
Rate Rental Dwelling Units and 51 Affordable Dwelling Units will be completed. for occupancy
during the term of the Agreement,
3.6. Public Health Concerns. Not -withstanding any provision to the contrary
contained herein, the City expressly reserves the right to apply to the Project any generally
applicable rule, regulation, law or ordinance which does not affect the land use or development
of the Project and which is based on concerns for the public health, safety or general welfare,
including, but not limited to, building codes not otherwise preempted by State law.
17. New Enyineering and Construction Standards. Notwithstanding any
provision to the contrary contained herein, the City expressly reserves the right to modify any of
the Applicable Rules if the City adopts new and/or amended regulations governing engineering
and construction and grading standards and specifications including, without limitation, any and
all unifonn codes adopted by the City, including local amendments to these codes pursuant to
state law allowing for such amendments; provided that such. codes are uniformly applied to all
new development projects of similar type as the Project within the City and provided firt-ther that
any such modifications to grading standards can only be imposed prior to grading and any such
modifications to engineering or construction standards can only be applied prior to the initiation
of construction. Such codes include, without limitation, the City's Uniform Housing Code,
Building Code, Plumbing Code, Mechanical Code, Electrical Code and Fire Code.
3,8. Cooperation and. Indemnification, The City agrees to cooperate with the
Property Owners in all reasonable manners in order to keep this Agreement in full force and
effect. Notwithstanding the preceding sentence, in the event any legal action instituted by a third
party or other government entity or official challenging the validity of tl-.Lis Agreement, the City
and the Property Owners agree to cooperate in defending such action, with Property Owners I
and 2 indemnifying the City pursuant to Paragraph 1.5 of this Agreenient. In the event of any
litigation challenging the effectiveness of this Agreement or any portion thereof, this Agreement
shall remain in full force and effect while such litigation, including any appellate review, is
pending, unless a court of competent jurisdiction orders otherwise.
4. Development of the Property.
(a) Permitted Uses. The Property Owners agree that the Property shall only
be developed in accordance with the Development Plan and any conditions and mitigation
measures imposed on the Project through final approval of the Project, and the provisions of this
Development Agreement. Notwithstanding anything set forth in tivs Agreement to the contrary,
unless the Property Owners proceed with development of the Property, the Property Owners are
999489.02/OC
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1tem 7. - 14
not obligated by the terms of this Agreement to affirmatively act to develop all or any portion of
the Project, pay any sums of money, dedicate any land, indemnify any party, or to otherwise
meet or perform any obligation with respect to the Project, except and only as a condition of
development of any portion of the Project.
(b) Development Standards. All. development and design requirements and
standards applicable to the Project shall conform to the Development Plan. and any conditions
and mitigation measures imposed on the Project, the Huntington Beach Municipal Code, and any
Applicable Rules,
5. Affordable Housing. It is the intent of the parties that the Affordable Dwelling
Units shall be constructed concurrently with the Market Rate Rental Dwelling Units. The
Project is subject to the requirement of providing a total often percent (10%) Affordable
Dwelling Units, which would be 51 at full build -out, all of which shall be rental units and must
remain Affordable Dwelling Units for at least fifty-five (55) years. The City and the Property
Owners agree, as a condition precedent to Development, that an Affordable Housing Agreement
be executed to inemori ali ze the terms and conditions of the affordable housing components
(attached hereto as Exhibit Q. The Property Owners will provide affordable units for rent, 8.4%
(43 units at full build -out) of which shall. be made available to and occupied by Moderate Income
Households and 1.6% (8 units at fa build -out) of which shall be made available to and occupied
by Low Income Households. The Property Owners agree to record said affordability covenant mi
favor of the City to assure that affordability covenant runs with the land and remains in effect for
the affordability period, The Property Owners agree to comply with all terms and provisions of
the Affordable Housing Agreement and its attachments and acknowledges that any default
there -under shall also constitute a. default under this Agreement.
It is contemplated that multiple temporary final inspections (to allow for occupancy) will
be sought during the construction of the Project. When each temporary final inspection. (to allow
for occupancy) is sought, approximately ten percent (10%) of the units for which it is sought will
be Affordable Dwelling Units.
6. Extension of Project Ap
provals. Unless a longer term would result under
otherwise applicable state law, the term of any permits approved as part of the Project approvals
shall be automatically extended for the term of this Agreement.
7. Subsequent Discretionary Action and Approval. The City agrees not to
unreasonably withhold, condition or delay any Discretionary Action or Discretionary Approval
or other action or approval by the City which may be required by the Project subsequent to the
execution of this Agreement. Upon the filing of a complete application and payment of
appropriate processing fees by the Property Owners, the City shall promptly commence and
diligently schedule and convene all required public hearings in an expeditious manner consistent
with the law and process all Discretionary Actions and Discretionary Approvals in an
expeditious manner.
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Compliance Review.
(a) Periodic Review. Pursuant to Government Code section 65865.1. the City
Manager or his or her designee shall, not less than once in every twelve (12) months, review the
Project and this Agreement to ascertain whether or not the Property Owners are in full
compliance vri.lh the terms of the Agreement (the "Periodic Review").
(b) Review Procedure. During a Periodic Review, the Property Owners shall
provide information reasonably requested by the. City Manager or his or her designee that the
Proj ect is being developed in good faith compliance with the terms of this Agreement If, as a
result of a Periodic Review, the City finds and determines on the basis of substantial evidence
that the Property Owners have not complied in good faith with the terms or conditions of this
Agreement, the City shall issue a written "Notice of Non -Compliance" to the Property Owners
specifying the grounds therefore and all facts demonstrating such non-compliance. The Property
Owner's failure to cure the alleged non-compliance within sixty (60) days after receipt of the
notice, or, if such noncompliance is not capable of being cured within sixty (60) days, the
Property Owner's failure to initiate all actions required to cure such non-compliance within sixty
(60) days after receipt of the notice and completion of the cure of such non-compliance within
one hundred twenty (120) days, shall constitute. a default under this Agreement on the part of the
Property Owners and shall constitute grounds for the termination of this Agreement by the City
as provided for below. If requested by the Property Owners, the City agrees to provide to the
Property Owners a certificate that the Property Owners are in compliance with the terms of this
Agreement, provided the Property Owners reimburse the City for all reasonable and direct costs
and fees incurred by the City with respect thereto.
(c) Termination or Modification for Non. -Compliance. Pursuant to
Government Code section 65865.1, if the. City Council finds and determines, on the basis of
substantial evidence, that one or more of the Property Owners has not complied in good faith
with the terms or conditions of this Agreement, the City Council may modify or terminate this
Agreement as to such Property Owner or Property Owners. Any action by the City with respect
to the termination or modification of this Agreement shall comply with the notice and public
hearing requirements of Government Code section 65967 in addition to any other notice required
by law. Additionally, the City shall give the Property Ovniers written notice of its intention to
terminate or modify this Agreement and shall grant the Property Owners a reasonable
opportunity to be beard on the matter and to oppose such termination or modification by the
City.
9. Modification, Amendment, Cancellation or Termination,
9.1. Amendment and Cancellation. Pursuant to Government Code section
65868, this Agreement may be amended or canceled, in whole or in part, by mutual written
consent of the City and the Property Owners or their successors in. interest. Public notice of the
parties' intention to amend or cancel any portion of this Agreement shall be given. in the manner
provided by Government Code section 65867. Any amendment to the Agreement shall be
subject to the provisions of Government Code section 65867.5.
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9.2. Modification. the City Planning and Building Director, with the consent
of the Property Owners, may make minor modifications to the Agreement without the need for
formal. action by the City's Planning Cormmission or City Council as long as such modifications
do not alter the Term of this Development Agreement, the permitted uses, density or intensity of
uses, the maximum height or size of buildings, provisions for reservations or Dedication of land,
conditions, terms, restrictions and requirements relating to Subsequent Discretionary Actions and
Approvals, and monetary contributions by the Property Owners.
10. Defaults, Notice and Cure Periods, Events of Default and Remedies.
10.1. Default By the Property Owners.
10.1.1. Default. If the Property Owners do not perform their obligations
under this Agreement in atimely manner, the City may exercise all rights and remedies provided
in this Agreement, provided the City shall have first given written notice to the Property Owners
as provided in Paragraph 15(a) hereof.
10.1.2. Notice of Default. If the Property Owners do not perform their
obligations under this Agreement in a timely mariner, the City through the City Manager may
submit to the Property Owners a written notice of default in. the manner prescribed in Paragraph
15(a) identifying with specificity those obligations of the Property Owners under this Agreement
which have not been. timely performed. Upon receipt of any such written notice of default, the
Property Owners shall promptly commence to cure the identified default( s) at the earliest
reasonable time after receipt of any such written notice of default and shall complete the cure of
any such default(s) no later than sixty (60) days after receipt of any such written notice of
default, or if such default(s) is not capable of being cured within sixty (60) days, no later than
one hundred twenty (120) days after receipt of any such written notice of default, provided the
Property Owners commence the cure of any such default(s) within such sixty (60) day period and
thereafter diligently pursues such cure at all times until any such default(s) is cured.
10.1.3. Failure to Cure Default Procedure. If after the cure period
provided in Paragraph 1.0.1�.2 has elapsed, the City Manager finds and determines the Property
Owners, or their successors, transferees and/or assignees; as the case may be, remains in default
and that the City 'intends to terminate or modify this Agreement, or those transferred or assigned
rights and obligations, as the case may be, the City's Planning and Building Director shall make a
report to the Planning Commission and then set a public hearing before the Planning
Commission in accordance with the notice and hearing requirements of Government Code
sections 65867 and 65868. If after public hearing, the Planning Commission finds and
determines, on the basis of substantial evidence, that the Property Owners, or their successors,
transferees and/or assigns, as the case may be, have not cured a default under this Agreement
pursuant to this Paragraph 10, and that the City shall terminate or modify this Agreement, or
those transferred or assigned rights and obligations, as the case may be, the Property Owners,
and their successors, transferees and/or assigns, shall be entitled to appeal that finding and
determination to the City Council. Such right of appeal. shall include, but not be limited to, an
objection to the manner in which the City intends to modify this Agreeznnent if the City intends as
a result of a default of the Property Owners, or one of their successors or assigns, to modify this
Agreement. In the event of a finding and determination that all defaults are cured, there shall be
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Item 7. - 17 HB -136-
no appeal by any person or entity. Subject to Paragraph 4(a) above, nothing in this Paragraph 10
or this Agreement shall be construed as modifying or abrogating the City Council's review of
Planning Commission actions or limiting the Ci.ty's rights and remedies available at law or in
equity, which shall include (without limitation) compelling the specific performance of the
Property Owner's obligations under this Agreement.
10.1.4. Termination or Modification of Agreements. The City may
terminate or modify this Agreement, or those transferred or assigned rights and obligations, as
the case may be, after such final determination of the City Council or, where no appeal is taken,
after the expiration of the applicable appeal periods described herein. There shall be no
modifications of this Agreement unless the City Council acts pursuant to Government Code
sections 65967.5 and 65868, irrespective of whether an appeal is taken as provided herein.
10.1.5. Lender Protection Provisions.
10.1.5.1. Notice of Default. In addition to the notice provisions
set forth in Paragraph 15(a)(2), the City shall send a copy of any notice of default sent to the
Property Owners or any of their successors or assigns to any lender that has made a loan then
secured by a deed of trust against the Property, or a portion thereof, provided such lender shall
have (a) delivered to the City written notice ill the manner provided iaa Paragraph 15(a) of such
lender's election to receive a copy of any such written notice of default and (b) provided to the
City a recorded copy of any such deed of trust. Any such lender that makes a loan secured by a
deed of trust against the Property, or a portion thereof, and delivers a written notice to the City
and provides the City with a recorded copy of any such deed of trust in accordance with the
provisions of this Paragraph 10.1.5.1. is herein referred to as a "Qualified Lender."
10.1.5.2. Right of a. Qualified Lender to Cure a Default. The
City shall send a written notice of any Property Owners default to each Qualified Lender. From
and after receipt of any such written .notice of default, each Qualified Lender shall have the right
to cure any such default within the sane cure periods as provided to the Property Owners
hereunder. If the nature of any such. default is such that a Qualified Lender cannot reasonably
cure any such default without being the owner of the Property, or the applicable portion thereof;
(as reasonably determined by the City), then so long as the Qualified Lender(s) is (are) diligently
proceeding (as reasonably determined by the City) to foreclose the lien of its deed of trust against
the owner of the Property, or the applicable portion thereof, and after completing any such
foreclosure promptly commences the cure of any such default and thereafter diligently pursues
the cure of such. default to completion, then such Qualified Lender shall have an additional one
hundred twenty (120) days following such foreclosure to cure any such default.
l 0.1.5..3. Exercise of the City's Remedies. Notwithstanding any
other provision of this Agreement, the City shall. not exercise any right or remedy to cancel or
amend this Agreement during any cure period.
10.2. Default by the City.
10.2.1. Default. In the event the City does not accept, process or render
a decision in a timely manner on necessary development permits, entitlements, or other land use
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or building approvals for -use as provided in this Agreement upon compliance with the
requirements therefore, or as otherwise agreed to by the City and the Property Owners, or the
City otherwise defaults tinder the provisions of tl-ds Agreement, subject to Paragraph 10.3, the
Property Owners shall have all rights and remedies provided herein or by applicable law, which
shall include compelling the specific performance of the City's obligations under this Agreement
provided the Property Owners have first complied with the procedures in Paragraph 10.2.2.
10.2.2. Notice of Default Prior to the exercise of any other right or
remedy arising out of a default by +d-l(,- City under this Agreement, the Property Owners shall first
submit to the City a written notice of default stating with specificity those obligations which
have not been performed under this Agreement. Upon receipt of the notice of default, the City
shall promptly commence to cure the identified default(s) at the earliest reasonable time after
receipt of the notice of default and shall complete the cure of such defaults) no later than thirty
(30) days after receipt of the notice of default, or such longer period as is reasonably necessary to
remedy such default(s), provided the City shall continuously and diligently pursue each remedy
at all times until such default(s) is cured. In the case of a dispute as to whether the City is in
default under this Agreement or whether the City has cured the default, or to seek the
enforcement of this Agreement, the City and the Property Owners may submit the matter to
negotiation/mediation pursuant to Paragraph 15(o) of this Agreement.
10.3. Monetary Damages. The Property Owners and the City acknowledge that
neither the City nor the Property Owners would have entered into this Agreement if either were
liable for monetary damages tinder or with respect to this Agreement or the application thereof.
Both the City and the Property Owners agree and recognize that, as a practical matter, it may not
be possible to determine an amount of monetary damages which would adequately compensate
the Property Owners for their investment of tune and financial resources in, planning to arrive at
the kind, location, intensity of use, and improvements for the Project, nor to calculate the
consideration the City would require to enter into this Agreement to justify such exposure.
Therefore, the City and the Property Owners agree that neither shall be liable for monetary
damages under or with. respect to this Agreement or the application thereof and the City and the
Property Owners covenant not to sue for or claim any monetary damages for the breach of any
provision of this agreement. The foregoing waiver shall not be deemed to apply to any fees or
other monetary amounts specifically required to be paid by the Property Owners to the City
pursuant to this Agreement, including, but not limited to, any amounts due pursuant to Paragraph
15(g) and 15(m). The foregoing waiver shall also not be deemed to apply to any fees or other
monetary amounts specifically required to be paid or credited by the City to the Property Owners
pursuant to this Agreement, including, but not limited to any fee credits specifically required to
be credited by the City to the Property Owner,,,, or their assignee(s).
11. Administration of Agreement and Resolution of Disputes. The Property Owners
shall at all times have the right to appeal to the City Council any decision or determination made
by any employee, agent or other representative of the City concerning the Project or the
interpretation and administration of this Agreement. All City Council decisions or
determinations regarding the Project or the administration of this Agreement shall also be subject
to judicial review pursuant to Code of Civil Procedure section 1094.5, provided that, pursuant to
Code of Civil Procedure section 1094.6, any such action must be filed in a court of competent
jurisdiction not later than ninety (90) days after the date on which the City Council's decision
989489.02/OC
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becomes final. In addition, in the event the Property Owners and the City cannot agree whether
a default on the part of the Property Owners, or any of their successors or assigns, under this
Agreement exists or whether or not any such default has been cured, then the City or the
Property Owners may submit the matter to negotiation/mediation pursuant to Paragraph 15(o).
12. Recordation of this Agreement. Pursuant to Government Code section 65868.5,
the City Clerk shall record a copy of this Agreement in the Official Records of the County within
ten (10) days after the mutual execution of this Agreement.
13. Constructive Notice and Acceptance. Every person or entity who now or
hereafter owns or acquires any right, title or interest in or to any portion of the Property is, and
shall be, conclusively deemed to have consented. and agreed to every provision. contained herein,
whether or not any reference to this Agreement is contained in the instrument by which such
person acquired an interest in the Property.
14, No Third Party Beneficiaries, This Agreement is made and entered into for the
sole protection and benefit of the City and the Property Owner and their respective successors
and assigns. No other person or entity shall have any right of action based upon any provision of
this Agreement.
15. Miscellaneous.
(a) Notices. All notices which are alloNved or required to be given hereunder
shall. be in writing and (1) shall be deemed given and received when personally delivered or (2)
shall be sent by registered or certified mail or overnight mail service, addressed to the applicable
designated person by one party to the other in writing, and shall be deemed received on the
second business day after such mailing.
If to the City:
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
Tel. No.: (714) 536-5575
Fax No.: (714) 536-5233
If to PropertyOwner 1:
Pedigo Gothard, .LLC.
4000 SE Columbia Way
Vancouver, WA 98661
Attn.: Rick Pedigo
Tel. No.: 360-695-3500
Fax No.:
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1113 -139- Item 7. - 20
If to Property Owner 2:
Pedigo South Edinger, LLC.
4000 SE Columbia Way
Vancouver, WA 98661
Attn: Rick Pedigo
Tel. No.: 360-695-3500
Fax No.:
If to Property Owner 3:
George W. Psaros Trust
52 Vista Montemar
Laguna Niguel, CA 92677
Attn: George M. Psaros
Tel. No.: 949-388-8808
Fax No.:
Allen Matldns Lech Gamble Mallory & Natsis LLP
1900 Main Street, 5-th Floor
Irvine, California 92614-7321.
Attn: William R. Devine, Esq.
Tel. No.: (949) 553-1313
Fax No.: (949) 553-8354
(b) Severability. If any part of this Agreement is declared invalid for any
reason, such invalidity shall not affect the validity of the remainder of the Agreement unless the
invalid provision is a material part of the Agreement. The other parts of this Agreement shall
remain in effect as if this Agreement had been executed without the invalid part. In the event
any material provision of this Agreement is determined to be invalid, void or voidable, the City
or the Property Owners may terminate this Agreement,
(c) Entire Agreement; Conflicts. This Agreement represents the entire
agreement between the City and the Property Owners with respect to the subject matter hereof
and supersedes all prior agreements and understandings, whether oral or written, between the
City and the Property Owners with respect to the matters contained in this Agreement. Should
any or all of the provisions of this Agreement be found to be in conflict with any other provision
or provisions found in the Applicable Rules or the Subsequent Applicable Rules, then the
provisions of this Agreement shall govern and prevail.
(d) Further Assurances. The City wid the Property Owners agree to perform.,
from time to time, such further acts and to execute and deliver such further instruments
reasonably to effect the intents and purposes of this Agreement, provided that the intended
obligations of the City and the Property Owner are not thereby modified.
(e) Inurement and Assignment. This Agreement shall inure to the benefit of
and bind the successors and assigns of the City and the Property Owners, may be assigned by
either the City or any of the Property Owners to any party or parties purchasing all or any pail of
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Item 7. - 21 -iB - 140-
the Property, or any interest therein pursuant to the provisions of this Paragraph 15(e). The
specific rights and obligations of this Agreement shall be deemed covenants running with the
land that concern and affect the Property Owner's interest in the Property. Prior to a Property
Owner's assignment of any rights, duties or obligations under this Agreement, the Property
Owner shall present such information required by the City in its commercially reasonable
discretion to demonstrate to the City's satisfaction that the proposed successor and/or assignee
has the financial ability and experience to fulfill those specific rights, duties and obligations
tinder the Agreement that the successor and/or assignee would assume. The City shall have the
right to approve the proposed successor and/or assignee, provided that the City's approval may
not be unreasonably withheld, conditioned or delayed. Property Owner 3 is under contract to sell
its interest in the Property to Property Owner 2 or an affiliate of Property Owner 2. The City
approves of such transfer and does not require any further information in this regard. The
provisions of this Paragraph 15(e) shall be self-executing and shall not require the execution or
recordation of any further document or instrument. The City's approval rights over a successor
or assignee of a Property Owner shall terminate upon issuance of the final inspection for the
project.
(f) Release Upon Transfer. Upon any transfer of a Property Owner's rights
and interests under this Agreement in accordance with Section 15(e) above, said Property Owner
shall be released from its obligations under this Agreement with respect to the Property, or
portion thereof so conveyed, provided the Property Owner is not in default under this Agreement
and has complied with the requirements of Section 15(e) above. Following such release, said
Property Owner shall not be responsible for any non-compliance with this Agreement by the
successor/transferee and, assuming said Property Owner has conveyed all its interest in the
Property subject to this Agreement, shall be released of all obligations under this Agreement.
Likewise, following such a conveyance and transfer, non-compliance with any terms of this
Agreement by any such assigning Property Owner, who is no longer a party to the Agreement,
shall not be deemed a default under this Agreement; shall not be grounds for termination of this
Agreement; and shall not constitute cause for City to initiate an enforcement action against the
remaining parties subject to this Agreement.
(g) Negation of Agency. The City and each of the Property Owners
acknowledge that, in entering into and performing under this Agreement, each is acting as an
independent entity and not as an agent of the other in any respect. Nothing contained herein or
in any document executed in connection herewith shall be construed as making the City and the
Property Owners joint venturers, partners or employer/employee.
(h) Attorneys Fees. In the event of any claim, dispute or controversy arising
out of or relating to this Agreement, including an action for declaratory relief, the prevailing
party in such action or proceeding shall not be entitled to recover its court costs and reasonable
out-of-pocket expenses.
(i) Waiver. No waiver of any provision of this Agreement shall be effective
unless in writing and signed by a duly authorized representative of the party against whom
enforcement of a waiver is sought.
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uB -141 _ Item 7. - 22
0) Force Majeure. Performance by either party hereunder shall not be
deemed to be in default where delays or defaults are due to one or more of the following events,
providing that anyone or more of such event(s) actually delays or interferes with the timely
performance of the matter to which it would apply and despite the exercise of diligence and good
business practices and such event(s) are beyond the reasonable control of the party claiming such
interference: wax, terrorism, terrorist acts, insurrection, strikes, lock -outs, unavailability in the
marketplace of essential labor, tools, materials or supplies, failure of any contractor,
subcontractor, or consultant to timely perform (so long as the Property Owner(s) is/are not
otherwise in default of any obligation under this Agreement and is exercising commercially
reasonable diligence of such contractor, subcontractor or consultant to perform), riots, floods,
earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine
restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, a
Recession or unusually severe weather. An extension of time for any such cause (a"Force
Majeure Delay") shall be for the period of the enforced delay and shall commence to run from
the time of the commencement of the cause, if notice by the party claiming such extension is sent
to the other party within thirty (30) days of actual knowledge of the commencement of the cause.
Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Maj eure
Delay unless and until the party claimirig such delay and interference delivers to the other patty
,written notice describing the event, its cause, when and how such party obtained knowledge, the
date and the event commenced, and the estimated delay resulting therefrom.
(k) ParagrVh Headings. The paragraph headings contained in this Agreement
are for convenience and identification only and shall not be deemed to limit or define the
contents to which they relate.
(1) Time of Essence. Time is of the essence of this Agreement, and all,
performances required hereunder shall be completed within the time periods specified. Any
failure of performance shall be deemed as a material breach of this Agreement.
(m) Counterparts. This Agreement and any modifications hereto may be
executed in any nurnber of counterparts with the same force and affect as if executed in the form
of a single document.
(n) Indemnification.
' emnificat. Property Owners 1 and 2 agree, as a condition of
approval of this Agrcernent, to indemnify, defend and hold harmless at the expense of Property
Owners I and 2, the City, the City Council, and the City's agents, officers and employees from
and against any claim, action or proceeding to attack, review, set aside, void or annul the
approval of this Agreement to determine the reasonableness, legality or validity of any provision
hereof or obligation contained herein. Property Owners 1 and 2 also agree to indemnify the City,
the City Council, and the City's officials, agents and employees for any claims, acts or
proceedings relating to the Property Owners failure to comply with the Project's affordable
housing requirements.
The indemnity described in this section is not subject to the provisions of paragraph 4.a.
providing that obligations cease if the Project does not go forward.
989489.02/OC
Item 7. - 23 1 -1 B - 142 -
The City shall promptly notify the Property Owners of any such claim, action or
proceeding of which the City receives notice, and the City will cooperate fully with the Property
Owners in the defense thereof. Property Owners I and 2 shall provide a defense to the City with
counsel reasonably selected by Property Owners I and 2 and the City to defend both the City and
the Property Owners, and shall reimburse the City for any court costs which the City may be
required to pay as a result of any such claim, action or proceeding. 'I'lle City may, in its sole
discretion, participate in the defense of any such claim, action or proceeding at its own expense,
but such participation shall not relieve Property Owners I and 2 of the obligations of this
Paragraph 15(m).
(o) Hold Han-pless Agreement. The City and the Property Owners, mutually
agree to, and shall hold each other and each of the other's elective and appointed councils,
boards, commissions, directors, officers, partners, agents, representatives and employees
harmless from any liability for damage or claims for personal injury, including death, and from
claims for property damage which may arise from the activities of the other or the other's
contractors, subcontractors, agents, or employees which relate to the Project whether such
activities be by the City or the Property Owners, or by any of the City's or the Property Owner's
contractors, subcontractors, or by anyone or more persons indirectly employed by, or acting as
agent for the Property O-vvners, any of the Property Owner's or the City's contractors or
subcontractors. the City and the Property Owners agree to and shall defend the other and each
of the other's elective and appointive councils, boards, directors, commissioners, officers,
partners, agents, representatives and employees from any suits or actions at law or in equity for
damage caused or alleged to have been caused by reason of the aforementioned activities which
relate to the Project.
(p) Alternative Dispute Resolution Procedure.
(1) Dispute. If a dispute arises concerning whether the City or the
Property Owners or any of the Property Owner's successors or assigns is in default under this
Agreement or whether any such default has been cured or whether or not a dispute is subject to
this Paragraph (a "Dispute"), then such dispute shall be subject to negotiation between the parties
to this Agreement, and if then not resolved shall be subject to non -binding mediation, both as set
forth. below, before either party may institute legal proceedings,
(2) Negotiation, If a Dispute arises, the parties agree to negotiate in
good faith to resolve the Dispute. If the negotiations do not resolve the Dispute to the reasonable
satisfaction of the parties within 15 days from a written request for a negotiation, then each party
shall give notice to the other party identifying an official or executive officer who has authority
to resolve the Dispute to meet in person with the other party's designated official or executive
officer who is similarly authorized. The designated persons identified by each party shall meet
in person for one day'vJthin the 20-day period following the expiration of the 15-day period and
the desimated persons shall attempt in good faith to resolve the Dispute. If the designated
persons are unable to resolve the Dispute, then the Dispute -shall be submitted to non -binding
mediation.
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I I B - 11 4 3 - Item 7. - 24
(3) Mediation.
(i) Within 15 days -following the designated persons' meeting
described in paragraph 15(o)(2), above, either party may initiate non -binding mediation (the
"Mediation"), conducted by Judicial Arbitration & Mediation Services, Inc. ("JAMS") or other
agreed upon mediator. Either part), may initiate the Mediation by written notice to the other
Party.
(ii) The mediator shall be a retired judge or other mediator,
selected by mutual agreement of the parties, and if they cannot agree within 15 days after the
Mediation notice, the mediator shall be selected through the procedures regularly followed by
JAMS. The Mediation shall be held: within 15 days after the Mediator is selected, or a longer
period as the parties and the mediator mutually decide.
(iii) If the Dispute is not fully resolved by mutual agreement of
the parties within. 15 days after completion of the Mediation, then either party may institute legal
proceedings.
(iv) The parties shall bear equally the cost of the mediator's fees
and expenses, but each party shall pay its own attorneys' and expert witness fees and any other
associated costs.
(4) Preservation of Rights. Nothing in this Paragraph shall limit a
party's right to seek an injunction or restraining order from a court in circumstances where such
equitable relief is deemed necessary by a party to preserve such party's tights.
(q) Reference of California Law. Unless expressly stated to the contrary, all
references to statutes herein are to the California codes.
(r) Interpretation. The language in all parts of this Agreement shall in all
cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for
or against any party. The parties hereto acknowledge and agree that this Agreement has been
prepared jointly by the parties and has been the subject of ami's length and careful negotiation
over a considerable period of time, that each party has independently reviewed this Agreement
with legal counsel, and that each party has the requisite experience and sophistication to
understand, interpret and agree to the particular language of the provisions hereof Accordingly,
in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this
Agreement shall not be interpreted or construed against the party preparing it, and instead other
rules of interpretation and construction shall be utilized,
989489.02DC
3 7 3217-0000116-2 S- I 3/NvTdf%NTd -17-
Item 7. - 25 1 1B - 1 44L
IN WITNESS )WHEREOF, the City and the Property Owners have each executed this
Agreement as of the date first written above,
MI
B),
N ame:
Title: /—A-V7
PEDIGO SOUTH EDINGER, LLC,
a corporation
M.
By:
Name:
Title:
GEORG-E. W. PSAROS TRUST,
-0
M.
Name:
Title:
CITY OF HtJNTINCTON BEACH,
a California municipal corporation
APPROVED AS TO FORM:
,qyCity Attorney
INITIATED .AND APPROVED.
lkjr�# My
9R9489.02f0C
3732 [7-0000116-25-131wdfivrd
1 -1 B - 14 5-
Item 7. - 26
�-W
W aS 144 10 60-dot/
State of Ga-P�'
Countyof4paft,e
On 9hj 13 before me, V 1
Onsert name Unotary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(sTwhose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(les), and that by 1-is/her/their signature(s) on the instrument
the peison(s), or the entity upon behalf of which the person(s) acted, executed the instrument,
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WFINESS my hand and official seal.
S (Seal)
989489-02/OC
373217-0000 1 /6-25-13hv'Td/wrd -19-
Item 7. - 27 113 -146-
ACKNOWLEDGMENT
State of California
County of Orange
On before me, 41
0
Inse 11a fnotuy)
Notary Public, personally appeared-G 4
t,s re
who proved to me on the basis of satisfactory 'vidence to be the person(s) whose name(s) Aare
subscribed to the within instrument and acknowledged to me that 14G-4sk/they executed the same
in bi&4wr/their authorized capacity(ies), and that by bi&4wr/their signature(s) on the instrument
the per-son(s), or the entity upon behalf of which the person(s) acted, executed the instTui-rent.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
AWITNESS my hand and official seal.
999489.02/OC
373217-00001/625-131%wMyrd -2-0-
H B -] -4', 7 - Item 7. - 28
State of California
County of Orange
On g:;&3, before me, Z-
Notary Public, personally appeared
who proved to me on the basis of satisfactorye
subscribed to the within instrument same
�
in liis� authorized capacit3o instrument
the persoq&?or the entity upon behalf of which the perso s cted, executed the instrument
989489-111210C
37321 -21-
Item 7. - 29 HB - 1 49-
EXHIBIT A.
999489,C210C EXHIBIT A
373217-0 COO 1/6-25-13/wrd/wre -I-
1-111 - 149- Item 7. - 30
APN: 142-321-01 & 142-321-02
LOT 6 OF 'TRACT NO. 4064, IN THE CITY OF HUNTINGTON BEACH, COUNT`! OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 142, PAGES 36
AND 37 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
EXCEPT THEREFROM 50% OF A 100% OF ALL MINERALS, GAS, OIL, PETROLEUM,
NAPHTHA, AND OTHER HYDROCARBON SUBSTANCES IN, TINDER OR THAT MAY
BE PRODUCED OR RECOVERED FROM THAT PORTION OF SAID LAND BELOW A
DEPTH[ OF 500 FEET FROM ITS SURFACE, WITH AND INCLUDING IN SUCH
EXCEPTION AND RESERVATION, FOR. THE BENEFIT OF THOSE ENTITLED
THERETO, THE RIGHT AT ANY AND ALL TIMES TO ENTER UPON AND INTO ANY
AND ALL PARTS OF THE PORTION OF SAID LAND BELOW SUCH DEPTH OF 500
FEET FROM ITS SURFACE, FOR THE PURPOSE OF EXPLORING AND DRILLING FOR,
MINING, DEVELOPING, REMOVING AND EXTRACTING A -NY AND ALL SUCH
SUBSTANCES, BY SLANT OR DIRECTIONAL DRILLING OR OTHER OPERATIONS
FROM OTHER LAND, ENTERING INTO AND PENETRATING THE LAND THE SUBJECT
HEREOF ONLY BELOW SUCH DEPTH OF 500 FEET FROM ITS SURFACE; BUT WITH
(AND THERE SHALL BE) NO RIGHT UNDER SUCH EXCEPTION AND RESERVATION
OF ENTRY UPON OR USE OF THE SURFACE, ORSUBSURFACE TO A DEPTH OF 500
FEET BELOW THE SURFACE, AS RESERVED BY DOROTHY THAYER. PECK,
CHARLES H. THATCHER AND TITLE INSURANCE AND TRUST COMPANY, A
CORPORATION, ALL AS TRUSTEES OF THE TRUST UNDER WRITTEN DECLARATION
1 "OF BY CARRIE A. PECK DATED DECEMBER I8, 1936, AS TO AN UNDIVIDED
25% OF SAID 100% INTEREST AND BY DOROTHY T. PECK, A WIDOW, IN HER.
INDIVIDUAL CAPACITY, AS TO AN UNDIVIDED 25°lo OF SAID 100% INTEREST.
# i � � ■ i r ,, ;,
i
i ♦ 1, r ':: :'r'
"i■ i i i • ! •i ' • r i # � i
iall 9
.i i. ,. 11, ! ■Mal I,�.
Item 7. - 31 111-150-
MINING, DEVELOPING, REMOVING AND EXTRACTING ANY AND ALL SUCH
SUBSTANCES, BY SLANT OR DIRECTIONAL DRILLING OR OTHER OPERATIONS
FROM OTHER LAND, ENTERING INTO AND PENETRATING THE LAND THE SUBJECT
HEREOF' ONLY BELOW SUCH DEPTH OF 500 FEET FROM ITS SURFACE; BUT WITH
(AND THERE SHALL BE) NO RIGHT UNDER SUCH EXCEPTION AND RESERVATION
OF ENTRY UPON OR USE OF THE SURFACE, OR SUBSURFACE TO A DEPTH OF 500
FEET BELOW 'FEE SURFACE, AS RESERVED BY DOROTHY THAYER PECK,
CHARLES H. THATCHER AND TITLE INSURANCE AND TRUST COMPANY, A
CORPORATION, ALL AS TRUSTEES OF THE TRUST UNDERWRITTEN DECLARATION
THEREOF BY CARRIE A. PECK DATED DECEMBER.] 8, 1936, AS TO AN UNDIVIDED
25% OF SAID 100% INTEREST AND BY DOROTHY T. PECK, A WIDOW, IN TIER
INDIVIDUAL CAPACITY, AS TO AN UNDIVIDED 25% OF SAID 100% INTEREST.
The above -referenced property is subject to the following mortgages: NONE.
HB -151- Item 7. - 32
APN: 142-321-10 & 142-321-12
PARCEL I :
THAT PORTION OF LOT 8, TRACT 4064, RECORDED IN BOOK 142, PAGES 36 AND 37,
MISCELLANEOUS MAPS,- RECORDS OF ORANGE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
PARCEL 1, AS SHOWN ON PARCEL MAP IN BOOK 2, PAGE 31 OF PARCEL MAPS,
RECORDS OF ORANGE COUNTY, CALIFORNIA.
EXCEPTING THEREFROM 50% OF A 100% OF ALL MINERALS, GAS, PETROLEUM,
NAPHTHA, AND OTHER HYDROCARBON SUBSTANCES IN, UNDER OR THAT MAY
BE PRODUCED OR RECOVERED FROM THAT PORTION OF SAID LAND BELOW A
DEPTH OF 500 FEET FROM ITS SURFACE, WITH AND INCLUDING IN SUCH
EXCEPTION AND RESERVATION, FOR TIM BENEFIT OF THOSE ENTITLED
THERETO, THE RIGHT AT ANY AND ALL TIMES TO ENTER "UPON AND INTO ANY
AND ALL PARTS OF THE PORTION OF SAID LAND BELOW SUCH DEPTH OF 500
FEET FROM ITS SURFACE, FOR THE PURPOSE OF EXPLORING AND DRILLING FOR,
MINING, DEVELOPING, REMOVING AND EXTRACTING ANY AND ALL SUCH
SUBSTANCES, BY SLANT OR DIRECTIONALLY DRILLING OR OTHER OPERATIONS
FROM OTHER. LAND, ENTEMG INTO AND PENETRATING THE LAND THE SUBJECT
HEREOF ONLY BELOW SUCH DEPTH OF 500 FEET FROM ITS SURFACE, BUT WITH
(AND THERE SHALL BE) NO RIGHT UNDER SUCH EXCEPTIONS AND
RESERVATIONS OF ENTRY UPON TO USE OF THE SURFACE, OR SUBSURFACE TO A
DEPTH OF 500 FEET BELOW THE SURFACE, AS RESERVED BY DOROTHY TffAYER
PECK, CHARLES E. THATCHER AND TTIZ,E INSURANCE AND TRUST COMPANY, A
CORPORATION, ALL AS TRU STEES OF THE TRUST UNDER WRITTEN DECLARATION
THEREOF BY CARRIE A. PECK, DATED DECEMBER I&, I936, AS TO AN UNDIVIDED
25% OF SAID I00% INTEREST AND BY DOROTHY T. PECK, A WIDOW, IN HER
INDIVIDUAL CAPACITY AS TO AN UNDIVIDED 25% OF SAID 100°fa INTEREST.
PARCEL 2:
RECORDSPARCEL AS SHOWN ON A MAP FILED IN BOOK 5, PAGE 36 OF PARCEL IMAPS,
OF ORANGE,
' r t• �' r r t r s
� r 1I •f 1
Item 7. - 3 3 _ - xB - 1 -52-
EXCEPTION AND RESERVATION .FOR TIDE BENEFIT OF THOSE ENTTT%ED THERETO,
THE RIGHT AT ANY AND ALL TIMES TO ENTER UPON AND INTO ANY AND ALL
PARTS OF THE PORTION OF SAID LAND BELOW SUCH DEPTH OF 500 FEET FROM
ITS SURFACE FOR THE PURPOSE OF EXPLORING AND DRILLING FOR, MINING,
DEVELOPING, REMOVING AND EXTRACTING ANY AND ALL SUCH SUBSTANCES,
Y SLANT OR DIRECTIONALLY DRILLING OR OTHER OPERATIONS FROM OTHER
LAND, ENTERING INTO AND PENETRATING THE LAND TIM SUBJECT HEREOF
ONLY BELOW SUCH DEPTH OF 500 FEET FROM ITS SURFACE BUT WITH AND
THERE SHALL BE NO RIGHT UNDER SUCH EXCEFTIONT S AND RESERVATIONS OF
ENTRY UPON TEE USE OF THE SURFACE, THE SUBSURFACE TO A DEPTH OF 500
FEET BELOW THE SURFACE, AS RESERVED BY DOROTHY THAYER PECK,
CHARLES THATCHER AND TITLE INSURANCE AND TRUST COMPANY, A
CORPORATION, ALL AS TRUSTEES OF THE TRUST UNDER WRITTEN DECLARATION
THEREOF BY CARRIE A. PECK, DATED DECEMBER I, 1935, AS TO AN UNDIVIDED
25% OF SAID 100% INTEREST AND' BY DOROTHY T. PECK, A WIDOW IN HER
INDIVIDUAL CAPACITY, AS TO AN UNDIVIDED 25% OF SAID 100% INTEREST.
The above -referenced property is subject to the failoi6ng mortgages: NOINE.
HB _1154_ Item 7. - 34
APN: 142-321-13
ne above -referenced property is subject to the following mortgages: NONE.
Item 7. - 35 HB -1 -54-
1133'aall
THE PROJECT
E)CH I BIT B
989489.02/OC
373217-0000116-25-13/%%,rdf,,i,rd -I-
HB -155- Item 7. - 36
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--121 TE -FL A N
EDINGER AND GOTHARD APARTMENTS HUNTINGTONBFACCH, CA
PEDIGO SOUTH, INC. ARCHITECTS ORANGE
400AB =IJA421A WAY f-ftd, IYONTH ORAWE $7- OPANGC, C-4LIFORNM S2666 (7f4) V.9-9660
..... .. ........ ..
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attention: City Clerk
ALLEN MKFKIN S LECK GAMBLE
MALLORY & NATSTS LLP
1900 Main Street, 5th Floor
Irvine California 92614-7321
Attention: William R. Devine, Esq.
(Space Above For Recorders Use)
AFFORDABLE HOUSING AGREEMENT RESTRICTIONTS—RENTAL
(DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS
FOR PROPERTY)
This Affordable Housing Agreement and Declaration of Conditions, Covenants and
.Restrictions for Property (the "Declaration") is made as of , 2013, by
and between PEDIGO GOTI-TARD, LLC, a California limited liability company (the "Property
Owner I"), PEDIGO SOUTH EDINGER, LLC, a California limited liability company
("Property Owner 2"), and GEORGE W. PSAROS TRUST, George W. Psaros and Helen Psaros,
trustees ("Property Owner 3") (collectively, "Property Owners" and Covenantors) and THE
HOUSING AUTHORITY O.F'TT-TF, CTY OF HUNTINGTON BEACH, a California municipal
corporation (the "Housing Authority" or "Covenantee").
RECITALS:
A. Property Owners are the respective owners of record of that certain real property
located at 16001 and 16091 Gothard Street (Property Owner 1), 7280 Edinger Avenue (property
Owner 2), and 7262 and 7266 Edinger Avenue (Property Owner 3), Huntington Beach,
California 92646 (the "Subject Property"), in the City of Huntington Beach, County of Orange,
State of California legally described in the attached Exhibit A.
B. The Property Owners seek to develop a project on the Property consisting of 510
dwelling units and associated uses. The project also includes at least 25,815 square feet of public
open space, as more particularly set forth in the Development Plan (collectively, the "Project")
approved by Site Plan Review No. 12-002, all in accordance with the General Plan, as it may be
9994MOVOC EXHIBIT C
373217-00001/11-13-13AwilAvrd -I-
1 ,I 113 -1 5,7- Item 7. - 38
amended from time to time (the "General Plan") adopted by the City Council of the City (the
"City Council") and the Zoning Code.
C. The City imposed conditions of approval on the Project, in part that the Property
Owners provide affordable housing. As part of the plan to provide affordable housing, the City
and the Property Owners entered into a Development Agreement which requires as a condition
that an Affordable Housing Agreement be executed requiring the Property Owners to provide
affordable rental units for a certain period of time. Specifically, the Property Owners are
required to/have agreed to provide 8.4% (43 units with full build -out) within the Project
available for rent to Moderate Income Households (as that term is defined in the Development
Agreement) and 1.6% (8 units with full build -out) within the Project available for rent to Low
Income Housebolds(as that term is defined in the Development Agreement) for a period of 55
years as further defined herein. The execution and recordation of this Declaration is intended to
fully satisfy that condition.
NOW, THEREFORE, the parties hereto agree and covenant as follows:
1. Affordability Covenants. Covenantors agree for themselves and their successors
and assigns, and every successor to any Covenantor's interest in the affordable unit, or any part
thereof that the Project approved by Site Plan Review 12-002, which consists of 510 units, 51 of
which shall be designated as affordable and shall be held subject to this Declaration for fifty-five
years from, the date final inspection has been approved by the City as follows:
(a) Quali led Households. Covenantors agree to make available, restrict
occupancy to, and to lease 51 units for the duration of the Affordability Period as defined herein.
These 51 unit-, may sometimes be referred to as an "Affordable Unit" or, collectively, the
"Affordable Units." Each Affordable Unit shall be occupied by Moderate -Income Households as
that term is defined in the Development Agreement adjusted for the actual number of persons in
the Household that will reside in the Affordable Unit.
As used in this Declaration, the term "Household" shall mean one or more persons,
whether or not related, living together in an Affordable Unit that rent or lease any portion of the
Affordable Unit,
As used in this Declaration, the term "Covenantors" shall mean the Property Owners,
their successors and assigns, and every successor to any of the Property Owner's interests in the
Project, or any part thereof.
(b) Duration. The term of this agreement shall commence on the date that the
Final. Inspection for the thirtieth (30th) affordable unit is approved by the City and will continue
for 55 years thereafter ("Affordability Period"). The covenant contained in this Section I shall
run with the Project and shall automatically terminate and be of no further force or effect upon
the expiration of the Affordability Period.
(c) jqcgrqe Qualification. Prior to the lease of an Affordable Unit to any
Household, Covenantors shall submit to the Covenantee a completed income computation and
certification form, in such form as is generally used by City in administering its affordable
housing program as may be amended from time to time. Covenantors shall certify that, to the
EXHIBIT C
989489,02 NOC
373217-(,'0001/6-25-13/%NTd/l%,rd -2-
Item 7. - 39 i -,I 1B - 1 5 8 -
best of its knowledge, each Household is a Low Income Household or a Moderate Income
Household that meets the eligibility requirements established for the particular Affordable Unit
occupied by such Household. Covenantors shall obtain an income certification from each adult
member of the Household and shall certify that, to the best of Covenantor's knowledge, the
income of the Household is truthfully set forth in the income certification form. Furthermore the
Covenantors shall, on renewal of the annual lease for the particular Affordable Unit, again obtain
income certification from each adult member of the Household and submit to the Covenantee a
recertification form that shall certify, to the best of Covenantor's knowledge, each Household is a
Moderate -Income Household that meets the eligibility requirements established for the particular
Affordable Unit occupied by such Household. Covenantors shall verify the income certification
of the Household in one or more of the following methods.
(1) Obtain two (2) paycheck stubs from two (2) most recent pay
periods for each adult member of the Household.
(2) Obtain a copy of an income tax return certified to be true and
complete for the most recent tax year in which a return was filed, for each adult member of the
Household.
(3) Obtain an income verification certification from the employer of
each adult member of the Household.
(4) Obtain an income verification certification from the Social
Security Administration and/or the California Department of Social Services if the Household
receives assistance from such agencies.
(5) Obtain an alternate form of income verification reasonably
requested by Covenantee, if none of the above forms of verification is available to Covenanter.
If, at the tune of the annual lease renewal of an Affordable Unit to an eligible Household,
the Covenantors learn that Household's income increases above the income level permitted for
that unit, the Household shall continue to be permitted to reside in such Affordable Unit, for no
more than one year. Notwithstanding the foregoing, Covenantors, at the City's discretion, shall
have the option, in their commercially reasonable discretion, to designate another dwelling unit
as an Affordable Unit during that one year period so that the Household may continue to occupy,
a unit. in the Project, if the Household and the Covenantor so agree.
(d) Determination of Affordable Rent for the Affordable Units. The rent for
each Affordable Unit (the "Affordable Rent") shall be adjusted annually by the following
formula established by California Health and Safety Code Section 50053 upon the publication of
the revised Area Median Income. This methodology sets the rent at 1/12 of thirty percent (30%)
of sixty percent (60%) of the Area Median Income adjusted for family sire appropriate to the
unit for Low Income Households and at 1/12 of thirty percent (30%) of one -hundred ten percent
(I 10%) of the Area Median Income adjusted for family sire appropriate to the unit for Moderate
Income Households. As used herein, for the purpose of calculating the Affordable rent,
"adjusted for family size appropriate to the unit" shall mean a household of one person in the
case of a studio Affordable Dwelling Unit, two persons in the case of a one -bedroom Affordable
989489.02/0C: EXHMIT C
373217-0000116-25431avr&wrd `3-
11B -159- Item 7. - 40
Dwelling Unit, and a household of three persons in the case of a two -bedroom Affordable
Dwelling Unit. The income limits and Affordable Rents in effect as of the date of this
Agreement are attached hereto as Exhibit B and incorporated herein by this reference.
COVENANTOR UNDERSTANDS AND KNOWINGLY
AGREES THAT THE MAXIMUM RENTAL PAYMENT'S TO
BE ESTABLISHED BY THIS FORMULA ARE NOT
NECESSARILY EQUAL TO THE FAIR MARKET RENT FOR
THE AFFORDABLE- UNITS, AND MAY BE ESTABLISHED
AT A LEVEL SUBSTANTIALLY BELOW THE FAIR
MARKET RENT LEVELS.
COVENANTORS HEREBY AGREE TO RESTRICT TI-JE
AFFORDABLE, UNrl'S ACCORDINGLY.
COVFNANTORIS INITIALS
In. the event state law referenced herein is amended, the terms of this Agreement shall
automatically be amended to remain consistent with State law.
(e) Annual Report. Within sixty (60) days after the end of each calendar year
during the Affordability Period, Covenantors shall submit to Covenantee a report verifying
Covenamor's compliance with the provisions of this Declaration ("Annual Report").
Covenantor's final Annual Report shall be submitted to Covenantee within sixty (60) days after
the end of the Affordability Period. Each Annual Report shall identify the location of the
Affordable Units for the applicable reporting period, the identity of each Flo usehold member
occupying an Affordable Unit during any portion of such period, the income and household size
of each such Household, the Affordable Rent for each of the Affordable Units, and the rent
actually charged pursuant to the lease or rental agreement. If Covenantee proscribes a particular
form to be utilized by Covenantor in preparing the Annual Report, Covenantors shall utilize said
form, provided. that it complies substantially with the foregoing reqicements.
1 Non -Discrimination Covenants, Each Covenantor covenants by and for itself, its
successors and assigns, and all persons claiming under or through their that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital
status, handicap or disability, in the use, occupancy.. tenure, or enjoyment of the Affordable Unit,
nor shall any Covenantor itself or any person claiming under or through it, establish or pen -nit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, subtenants, or vendees in the Affordable Unit.
Each Covenantor and its successors and assigns shall refrain from restricting the leasing
of the Affordable Unit on the basis of race, color, religion, sex, sexual orientation, creed,
ancestry, national or e:ffimc origin, age, family or marital status, handicap or disability, of any
person. All such leases shall contain or be subject to substantially the follo-Mng
nondiscrimination or nonsegregation clause:
EXMTT C
9894890210C
37321? -00001 J6-?.5-13hN-rdAvrd -4-
Item 7. - 41 H B - 16(')-
"I'lie lessee herein covenants by and for himself or herself, his or her heirs, executors,
administrators; and assigns, and all persons claiming under or through him or her, and this lease
is made and accepted upon and subject to the following conditions:
"That there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, religion, sex,
sexual. orientation, creed, ancestry, national or ethnic origin, age,
family or marital status, handicap or disability in the leasing,
subleasing, transferring, use, occupancy, tenure, or er;loyment of
the premises herein leased nor shall the lessee himself or herself, or
any person claiming under or through him or her, establish or
permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use,
or occupancy of tenants, lessees, sublessees, subtenants, or veridees
in the premises herein leased."
3. Use Restrictions. During the Affordability Period, Covenantors shall be required
to take all reasonable -steps necessary to ensure that each Household renting an Affordable Unit
has knowledge of all tern -is and conditions of this Declaration by including in each and every
lease and rental agreement a clause which incorporates this Declaration by reference and makes
this Declaration a part of an attachment to such lease or rental agreement. In addition, during the
Affordability Period, each lease or rental agreement for any of the Affordable Units shall contain
provisions that the Affordable Unit shall be occupied, used, and maintained as follows:
(a) The Affordable Unit shall be used only for private dwelling purposes, with
appurtenant facilities, and for no other purposes; provided, however, that home occupation
businesses conducted in compliance with the City's Municipal Code and other City regulations
shall be considered an appropriate use for private dwelling purposes;
(b) Household Size. The maximum number of persons that may occupy an
Affordable Unit shall be based on unit size:
Unit Size
Household Size
2 persons
0 bedroom (studio)
I bedroom
2 bedrooms
3 persons
5 persons
(c) the Household shall not permit or suffer anything to be done or kept upon
the premises which will increase the rate of insurance on any building, or on the contents thereof,
and shall not impair tb.e structural integrity thereof obstruct or interfere with the tights of other
occupants, or annoy such occupants by unreasonable noises or otherwise, nor shall any
Household commit or permit any nuisance on the premises or fail to keep the premises free of
rubbish, clippings, and trash or commit or suffer any illegal act to be committed thereon;
(d) The Household shall not sublease any or all parts of the Affordable Unit
without prior written approval from Covenantors and Covenantee;
999489.0210C EXHIBIT C
3732 1 7-00001/6-25-131%vTd/%Yrd -5-
flB -161 - Item 7. - 42
(e) The Household shall comply with all of the lawful requirements of all
governmental authorities with respect to the -premises;
(f) No person shall be permitted to occupy the premises for transient or hotel
(g) The Household shall comply in all respects with this Declaration and any
failure by the Household to comply with the terms of this Declaration shall be a default under the
I lousehold's lease or rental agreement.
4. Covenants for Benefit of Housing Authority. All covenants without regard to
technical classification or designation shall be binding for the benefit of the Covenantee and such
covenants shall run in favor of Covenantee for the entire period during which time such
covenants shall be in force and effect. The Covenantee, in the event of any breach of any such
covenants, shall have the right to exercise all the rights and remedies and to maintain any such
action at law or suits in equity or other proper legal proceedings to enforce and to cure such
breach to which. it or any other beneficiaries of these covenants may be entitled during the term
,specified for such covenants, except the covenants against discrimination which may be
enforced at law or in equity at any time in perpetuity.
5. Binding on Successors and Assigns. 71.ie covenants and agreements established in
this Declaration shall, without regard to technical classification and designation, be binding on
each Covenantor and any successor to such Covenantor's right, title d interest in and o all or
, an t
any portion of the Project, for the benefit of and in favor of the Housing Authority of the City of
Huntington Beach, All the covenants contained in this Declaration shall remain in effect for the
Affordability Period, and shall automatically terminate and be of no further force or effect after
such time. Upon expiration of the Affordability Period, Covenantee agrees to cooperate with
Covenantors, at no cost to Covenantee in removing this Declaration of record from the Subject
Property.
6, Countgparts. This Agreement may be executed in a number of counterparts, each
of which shall be an original, but all of which shall constitute one and the same document.
7. Notices. All notices which are allowed or required to be given hereunder shall be,
in writing and (1) shall, be deemed given and received when personally delivered or (2) shall be
sent by registered or certified mail or overnight mail service, addressed to the applicable
designated person by one party to the other in writing, and shall be deemed received on the
second business day after such mailing.
If to the Housing Authority:
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
Tel. No.. (714) 5316-5575
Fax No.: (714)536-5233
9394WOWOC EYJ-IIBIT C
3 73217-00001/6-25-1 3Avrdhvrd -6-
Item 7. - 43 HB -102-
If to Property Owner 1:
Pedigo Gothard, LLC.
4000 SE Columbia Way
Vancouver, WA 98661
Attn: Rick Pedigo
Tel. No.: 360-695-3500
Fax No.:
If to Property Owner 2:
Pedigo South Edinger, LLC.
4000 SE Columbia Way
Vancouver, WA 98661
Attn: Rick Pedigo
Tel. No.: 360-695-3500
Fax No.:
If to Prqperty Owner 3:
George W. Psaros Trust
52 Vista Montemar
Laguna Niguel, CA 92677
Attn: George M. Psaros
Tel. No,: 949-388-8808
Fax No.:
Allen Matkins Leck Gamble Mallory & Natsis LLP
1900 Main Street, 5th Floor
Irvine, California.92614-7321.
Attn: William R. Devine, Esq.
Tel. No,: (949) 553-1313
Fax No.: (949) 553-8354
8. Applicable Law.
(a) If any provision of this Agreement or portion thereof, or the application of
any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or
-unenforceable, the remainder of this Agreement, or the application. of such pro -vision or portion
thereof to any other persons or circumstances, shall not be affected thereby and it shall not be
deeded that any such invalid provision affects the consideration for this Agreement; and each
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
(b) This Agreement shall be construed in accordance with the laws of the
State of California and all applicable HUD Housing Quality Standards and City Codes.
989499MIOC E-XHIBfT C
3 73217-000 0 1 16-25-13h, Owrd -7-
11B -163- Item 7. - 44
IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument
to be executed on their behalf by their respective officers hereunto duly authorized as of the date
set forth above.
PEDIGO GOTHARD, LLC,
a - limited liability company
LIM
By: —
Name:
Title:
PEDIGO SOUTH EDINGER, LLC,
a limited liability company
By:
By:
Name:
Title:
GEORGE W. PSAROSMUST,
By:
By:
Name:
Title:
999499.0VOC
373217-00001/6-25-134rd/wrd
Item 7. - 45
THE HOUSING AUTHORITY OF THE
CITY OF HUNTINGTON BEACH,
a public body corporate and politic
Chair
Clerk
BUS71M 11
City Attorney
INITIATED AND APPRO'VTD:
Director of Planning and Building
City Manager
EXHIBIT C
-8-
1`113, - 104-
APN. 142-321-01 & 142-321-02
LOT 6 OF TRACT NO. 4064, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 142, PAGES 36
AND 37 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
EXCEPT THEREFROM 50% OF A 100% OF ALL MINERALS, GAS, OIL, PETROLEUM,
NAPHTHA, AND OTHER HYDROCARBON SUBSTANCES IN, UNDER OR THAT MAY
BE PRODUCED OR RECOVERED FROM THAT PORTION OF SAID LAND BELOW A
DEPTH OF 500 FEET FROM ITS SURFACE, WITH AND INCLUDING IN SUCH
EXCEPTION AND RESERVATION, FOR THE BENEFIT OF THOSE ENTITLED
THERETO, THE RIGHT AT ANY AND ALL TIMES TO ENTER UPON AND INTO ANY
AND ALL PARTS OF THE PORTION OF SAID LAND BELOW SUCH DEPTH OF 500
FEET FROM ITS SURFACE, FOR THE PURPOSE OF EXPLORING AND DRILLING FOR,
MINING, DEVELOPING, REMOVING AND EXTRACTING ANY AND ALL SUCH
SUBSTANCES, BY SLANT OR DIRECTIONAL DRILLING OR OTHER OPERATIONS
FROM OTHER LAND, ENTERING INTO AND PENETRATING THE LAND THE SUBJECT
HEREOF ONLY BELOW SUCH DEPTH OF 500 FEET FROM ITS SURFACE, BUT WITH
(ANT} THERE SHALL BE) NO RIGHT UNDER SUCH EXCEPTION AND RESERVATION
OF ENTRY UPON OR USE OF THE SURFACE, OR SUBSURFACE TO A DEPTH OF 500
FEET BELOW THE SURFACE, AS RESERVED BY DOROTHY THAYER PECK,
CHARLES H. THATCHER AND TITLE INSURANCE AND TRUST COMPANY, A
CORPORATION, ALL AS TRUSTEES OF THE TRUST UNDER WRITTEN DECLARATION
THEREOF BY CARRIE A. PECK DATED DECEM ER 18, 1936, AS TO AN UNDIVIDED
25% OF SAID 100°/a INTEREST AND BY DOROTHY T. PECY, A WIDOW, IN HER
INDIVIDUAL CAPACITY, AS TO AN UNDIVIDED 25% OF SAID 100% INTEREST.
•
EXCEPT THEREFROM 501/a OF A 100% OF ALL MINERALS, GAS, OIL, PETROLEUM,
NAPHTHA AND OTHER HYDROCARBON SUBSTANCES IN, UNDER OR THAT MAY
BE PRODUCED OR RECOVERED FROM THAT PORTION OF SAID LAND BELOW A
DEPTH OF 500 FEET FROM ITS SURFACE, WITH AND INCLUDING IN SUCH
EXCEPTION AND RESERVATION, FOR THE BENEFIT OF THOSE ENTITLED
THERETO, THE RIGHT AT ANY AND ALL TIMES TO ENTER UPON AND INTO ANY
AND ALL PARTS OF THE PORTION OF SAID LAND BELOW SUCH DEPTH OF 500
FEET FROM ITS SURFACE, FOR THE PURPOSE OF EXPLORING AND DRILLING FOR,
— N _ 11_ Item 7. - 46
MINING, DEVELOPING, REMOVING AND EXTRACTING ANY AND ALL SUCH
SUBSTANCES, BY SLANT OR DIRECTIONAL DRILLING OR OTHER OPERATIONS
FROM OTIMR LAND, ENTERING INTO AND PENETRATING THE LAND THE SUBJECT
HEREOF ONLY BELOW SUCH DEPTH OF 500 FEET FROM ITS SURFACE; BUT WITH
(AND THERE SHALL BE) NO RIGHT UNDER SUCH EXCEPTION AND RESERVATION
OF ENTRY UPON OR USE OF THE SURFACE, OR SUBSURFACE TO A DEPTH OF 5OU
FEET BELOW THE SURFACE, AS RESERVED 'BY DOROTHY THAYER PECK,
CHARLES H. THATCHER AND TITLE INSURANCE AND TRUST COMPANY, A
CORPORATION, ALL AS TRUSTEES OF THE TRUST UNDER WRITTEN DECLARATION
THEREOF BY CARRIE A. PECK DATED DECEMBER 18, 1936, AS TO AN UNDIVIDED
25% OF SAID 100% INTEREST AND BY DOROTHY T. PECK, A WIDOW, IN HER
INDIVIDUAL CAPACITY, AS TO AN UNDIVIDED 25% OF SAID 100% INTEREST.
The above -referenced property is subject to the following mortgages: NONE.
Item 7. - 47 11 B -166-
AM 142-321-10 & 142-321-12
PACELI
THAT PORTION OF LOT 8, TRACT 4064, RECORDED IN BOOK 142, PAGES 36 AND 37,
MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
PARCEL 1, AS SHOWN ON PARCEL. MAP IN BOOR 2, PAGE 31 OF PARCEL MAPS,
RECORDS OF ORANGE COUNTY, CALIFORNIA.
PARCEL 2:
t' �+� Ii r! � •a �!
� Item 7. - 48
- t_
The above -referenced property is subject to the following mortgages. NQNE.
Item 7. - 49 H13 -168-
APN: 142-321-13
lZit".001 OUT 1
IV ,47 '4)
gii, -8 _110% 3 t�q#)*JL
The above -referenced property is subject to the following mortgages: NONE.
I I -169- -Item 7. - 50
EXHOIT B
INCOME LIMITS AND AFFORDABLE RENTS
999499.0210C F-YJHBIT B
373217-00001/6-25-13/wrd/wrd -I-
Item 7. - 51 HB -1 7/0-
EXHIBIT B
2013 QUALIFYING INCOME AND RENT SCHEDULE
PEDIGO APARTMENT PROJECT
HUNTINGTON BEACH, CALIFORNIA
1, 20130ranaeCounty Income Information
Household Size
HCD Median HUD Median
1 Person
$61,050
2 Persons
69,750
3 Persons
78,5(X)
4 Persons
87,200 87,200-
5 Persons
94,200
6 Persons
101,150
7 Persons
10B'150
11, Household Income Limits as Defined by the California
Health &Safety
Code
Low Income
Moderate income
(Section 50093)
(Section 60093)
1 Person
$33,750
$53,950
$53,950
$73,250
2 Persons
38,550
61,650
61,650
83,700
3 Persons
43,350
69,350
69,350
94,200
4 Persons
43,150
77,050
77,050
104,650
5 Persons
52'050
83,250
83,290
113,000
6 Persons
55,900
89,400
89,400
12.1,400
7 Peisons
59,750
95,55D
95,550
129,750
Ill. California Health& Sab& Code Section 50053 Affordable Housing Cost Calculations
Low Income
Studio
I-Bdrm
2-Bdrm
3-Bdrm
Benchmark Household Size
1
2
3
4
% of HCD Median Income
60%
60%
6M
6090
Household Income for Rent Calculation
$36,630
$41,850
$47,100
S52,320
% of Income Allotted to Gross Rent
30%
30%
30%
30%
Allowable Gross Rent
$g, 6
$1,046
$1,178
$1,308
(Less) Utilities Allowance
28
39
47
76
Allovvable Net Rent
$858
$ 007
$-"131
$1,232
Moderate Income
Studio
1-Bdrm
2-Bdrm
3-Bdrm
Benchmark Household Size
1
2
3
4
% of HCD Median Income
110%
110%
110%
110%
Household income for Rent Calculation
$67,155
$76,725
$86,350
$95,920
% of Income Allotted to Gross Rent
30%
30%
30%
30%
Allow -able Gross Rent
$1,679
$1,918
$2,159
$2,398
(Less) Utilities Allowance
28
39
47
76
A,11owable Net Rent
$1,651
$1,B79
$2,112
52,322
Based on utilities published by (OCHA 10f1120112). Includes Gas: Cooking, Heating, Water Fleeter.
Electric: Basic
Prepared by Keyser Marston Associates, Inc.
Rename. Pedqo-Ino-Rent Cxh_6_11_13; Inc_Rent
999489,0210C Exhibit B
373217-0'1001/6-25-13/NN,i'd1Nyrd -2-
Item 7. - 52