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HomeMy WebLinkAboutSHELTER FOR THE HOMELESS, INC dba AMERICAN LODGING - 2001-09-17 41, PZ4 Council/Agency Meeting Held: drl-)1-al Deferred/Continued to: proved ❑ Con itionally Approved ❑ Denied per. erk' ignature Coun;,il Meeting Date: September 17, 2001 Department ID Number: ED 01-27 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL t MEMBERS/REDEVELOPMENT AGENCY MEMBERS �, 4 SUBMITTED BY: RAY SILVER, City Administrator/Executive Directorak/ --c;-- .r,r PREPARED BY: DAVID C. BIGGS, Director cf Economic Development/Depu wL Executive Director ae-, P0' "✓s --e- SUBJECT: Approve Authorizing Resolutions for Shelter for the Hoamleh Affordable Housing Project Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments) Statement of Issue: On April 17, 2001, the Agency approved an Owner Participation Agreement (OPA) with Shelter for the Homeless (Shelter) for the acquisition and rehabilitation of a multifamily rental property located at 7802 Barton Drive. The OPA authorized an Agency loan of $350,000 to cover all of the acquisition and a portion of the budgeted rehabilitation costs. The OPA also authorized Shelter to obtain financing from a conventional lender to pay for rehabilitation costs not covered by the Agency's loan. In order to secure this additional financing and complete the rehabilitation of the apartments, the Agency must agree to subordinate its loan to the conventional lender's loan on the property title. To accomplish this, authorizing resolutions have been prepared by the Agency's General Counsel and are submitted for approval. Fundinq Source: Not Applicable Recommended Action: Recommended City Action: 1. - Adopt Resolution Number boo/- A Resolution of the City Council of the City of Huntington Beach Providing for the Subordination of the Deed of Trust Between the Redevelopment Agency of the City of Huntington Beach, Shelter for the Homeless, Inc., DBA American Lodging, and the City of Huntington Beach. Recommended Agency Action: 1. Adopt Resolution Number 3a , A Resolution of the Redevelopment Agency of the City of Huntington Beach Providing for the Subordination of the Deed of Trust Between the Redevelopment Agency of the City of Huntington Beach, Shelter for the Homeless, Inc., DBA American Lodging, and the City of Huntington Beach. r I REQUEST FOR 'OUNCILIREDEVELOPMENT )ZC ENCY ACTION MEETING DATE: September 17. 2001 DEPARTMENT ID NUMBER: ED 01-27 Alternative Action(s): Do not approve the proposed resolutions. Analysis: The Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Shelter for the Homeless (Shelter) for an affordable housing project that involved acquisition and rehabilitation of a four-unit apartment building in the Oakview neighborhood. This property is located at 7802 Barton Drive. The Agreement between the Agency and Shelter provided for an Agency loan of$350,000 to pay for acquisition of the property along with a portion of the rehabilitation costs necessary to bring the apartments into compliance with Housing Quality Standards and City codes. The OPA authorized Shelter to obtain financing from a conventional lender to pay for rehabilitation costs not covered by the Agency's loan, which was anticipated to be $50,000. Although the OPA did not contemplate subordination of the Agency's lien on the property title to the conventional lender's lien, staff has determined that Shelter is unable to obtain financing without subordination. Staff recommends allowing subordination of the Agency loan, thereby enabling Shelter to obtain conventional lender financing up to $50,000 that will be used to complete the necessary rehabilitation of the property. Authorizing resolutions have been prepared by the Agency's General Counsel for this purpose and are submitted for approval. Environmental Status: f dot Applicable Attachment(sl• ` . • - urnibei No Descdp 10nl 1. City Council Resolution No. c2Q2/- 6L Providing for the Subordination of the Deed of Trust Between the Redevelopment Agency and Shelter for the Homeless, Inc. 2. Redevelopment Agency Resolution No. 3Q Providing for the Subordination of the Deed of Trust Between the Redevelopment Agency and Shelter for the Homeless, Inc. RCA Author. HOLTZ(5901) RCA for Authorizing Resolutions.doc .2. 916101 11:23 AM City Council Resolution No. -26oi- 66 , Providing for the Subordination of the Deed of Trust Between the Redevelopment Agency and Shelter for the Homeless, Inc. RESOLUTION NO. 2001-66 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTLNGTON BEACH PROVIDING FOR THE SUBORDINATION OF THE DEED OF TRUST BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,SHELTER FOR THE HOMELESS,INC.,DBA AMERICAN LODGDZG,AND THE CITY OF HUNTINGTON BEACH WHEREAS, On April 17,2000,the Redevelopment Agency of the City of Huntington Beach(the"Agency"} approved that certain Owner Participation Agreement(the"Agreement') with the Shelter for the Homeless,Inc.,dba American Lodging(the"Participant");and The purpose of the Agreement is to assist the Agency to meet its affordable housing goals pursuant to the California Community Redevelopment Law by facilitating Participant's rehabilitation-in-place of an apartment building for the purpose of providing rental housing to tenants whose household incomes do not exceed very lew income as defined by Cali fomia law;and The Agency's assistance is in the form of a loan in the amount of S350,000.00 to assist Participant in meeting the cost of acquisition and rehabilitation of the Site;and The Agency Loan is evidenced by that certain Promissory Note dated April 27,2000 in favor of the Agency in the sum of$350,000.00,as secured by that certain Deed of Trust dated April 27,2000, from Participant as Trustor to the City of Huntington Beach as Trustee in favor of the Agency as Beneficiary,recorded May 1,2000,as Instrument No. 20000225131 of the Official Records of Orange County,California;and The Agreement also requires the Participant to obtain a loan from a conventional/permanent lender to be used exclusively for the rehabilitation of the Site in an amount not to exceed S50,000.00;and Pursuant to Section 33334.14 of the Health and Safety Code,the Agency is permitted to subordinate the Agency Deed of Trust to superior deeds of trust and other related documents including but not limited to those required by the Conventional Lender,if certain findings are made and certain--;-ritten commitments are obtained from such Conventional Lender, NOW,THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: 1. That in accordance with said Section 33334.14,the Agency has found that no economically feasible alternative method of financing the Project on substantially comparable terms and conditions without subordination is reasonably available,and that the subordination documents contain v-ritten commitments to protect the Agency's investment in the event of a default by Participant. 2. That the Agency has agreed to subordinate the Agency Deed of Trust to the Conventional Lender's First Deed of Trust and such other related documents as the Conventional 1 PDA 1001 R.-solutions:City—Shelter for I lomeless subordination IMS 2001-0619 �+ Res. No. 2001-66 Lender may require,in the amount of the Conventional Lender's First Deed of Trust,not to exceed Fifty Thousand Dollars(S50,000.00). 3. That the City Administrator is hereby authorized and directed to execute on behalf of the City all documents necessary to accomplish the aforesaid subordination, including but not limited to,the document entitled"Subordination of Deed of Trust,"a copy of which is attached hereto as Exhibit"A"and incorporated by this reference as though fully set forth herein. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 17th day of September ,2001. Mayor ATTEST: APPROVED S TO FORM: City Clerk City y Attorne � -sue/ A a�S�a REVIEWED AND APPROVED: INITIATED AND APPROVED: r�i.-.- ✓� _ Am C . kv� City dministrator Director of Economic Development 2 PDA 2001 Resolutions:City—Shcltcr for I lorpetess wbordination RLS 2001.0619 Res. No. 2001-66 EXHIBIT A i Res. No. 2001-66 RECORDATION REQUESTED BY: �r WHEI4 RECORDED MAIL TO: BYL Bank Group 1575 N.Tustin Avenue Orange,CA 22865 FOR RECORDER:5 LISE ONLY NOTICE: THIS SUBORDINATION OF DEED OF TRUST RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LiEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. SUBORDINATION OF DEED OF TRUST THIS SUBORDINATION OF DEED OF TRUST dated August 16, 2001, is made and executed among Redevelopment Agency of Huntington Beach ("Beneficiary"); City of Huntington Beach ("Trustee"); Shelter for the Homeless, Inc. dba American Lodging ("Borrower"); and BYL BANK GROUP ("Lender"). SUBORDINATED INDEBTEDNESS. Beneflclary has extended the fonoWng described financial accommodations (the 'Subordinated Indebtedness")to Shelter for the Homeless,Inc.dba American Lodging(Trustorl: A Note In the sum of$350,000.00.dated April 27,20001n favor of Redevelopment Agency of the Agency of Huntington Beach. SUBORDINATED DEED OF TRUST. The Subordinated Indebtedness Is secured by a deed of trust dated April 27.2000 from Truslor to Trustee In favor of Bene5clary(the'Subordinated Deed of Trust)recorded In Orange Cc-jrty,State of Caiifornla as follows: Recorded May 1,2000 as Instrument fro.20000225131, REAL PROPERTY DESCRIPTION. The Subordinated Deed of Trust covers the fo3owing descnbad real property located In Orange County,State of CaVornla: Lot 33 of Tra;14301,as per map recorded In Book 177 Pages 1 t and 12 of A!isce"aneous Ataps,In the Office of the County Recorder of said County The Real Property cr Its address is commonly known as 7802 Barton Drive,HunSr:glon Beach,CA 92647. The Assessor's Parcel Number for the Real Property is 165-223--03. REQUESTED FINANCIAL ACCOMMODATIONS. Borrower, who may or may not be the same entity as Trustor, and Beneficiary each want Lender to provide Inanclal accommodations to Borrower In the form of (A) new Credit or loan advances, (B) an extension of tlme to pay or Other compromises fe;arding all or part of Borrower's present Indebtedness to Lender. or (C) other benefits to Borrower. Borrower and Bene9dary each represent and acknowledge to Lender that Beneficiary will teneft as a result of these financial accommodations from Lender to Borrower,and Beneficiary acknowledges receipt of valuable consideration for anteing Into this Subordination. LENDER'S LIEN. As a condition to the granting of the requested financial accommodations.Lender has required th}t Lender's Lien be and remain superior!c the Subordinated Deed of Trust. NOW THEREFORE THE PARTIES TO THiS SUBORDINATION HEREBY AGREE AS FOLLOWS: SUBORDINATION. The Subordinated Deed of Trust and the Subordinated Indeb:edness secured by the Subordinated Deed of Trust Is and shall to subordinated In all respects to Lender's Lien and the Superior Indebtedness,and It Is agreed that Lender's Lien shall be and remain.at all times,prior and superior to the ben of the Subordinated Deed of Trust. Beneficlary also subordinates to Lender's Lien all other Security lnteress In the Real Property herd by Beneficiary,whether now existing or hereafter acquired. BENEFICIARY'S REPRESENTATIONS AND WARRANTIES. Beneficiary represents and warrans to Lender that: (A) no representations or agreements of any kind have been made to Beneficiary which would Emit or qualify In any way the terms of this Subordination: (B) t".s Subordination Is executed at Borrower's request and not at the request of Lenter, (C)Lender has made no representation to Bereficiary as to the creditworthiness of Borrower, and (0) Beneficiary has established adeq-la!a means of obtaining from Borrower on a continuing basis Information re;arding Borrower's financial ccnd:tion. Beneficiary agrees to keep adequately informed from such means of any fats,events,or circumstances which might In any way affect Benericlary's risks under this Subcr::na!Ion,and Benefiiciary further agrees that Lender shall have no cbrigat:on to disclose to Beneficiary Information or material acquired by Lender In the Course of Its W-ationshlp Kith Borrower. BENEFICIARY WAIVERS. Beneficiary waives any right to require Lender. (A) to make,extend.renew,or modify any loan to Borrower or to Grant any other financial accommodations to Borrower whatsoever, (B) to rake any presentment, pro!est, demand, or notice of any kind, including notice of any nonpayment of any Superior Indebtedness secured by Lender's Lien,or notice of any action or nonaction on the part of Borrower,Lender, any surety,endorser, or other guarantor In connection with the Superior Indebtedness,or In connection with the creation cf rew or additional Indebtedness: (C) to resort for payment or 10 proceed di•ecl.y or at once against any person,including Borrower, (D) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (E) to pursue any c!her remedy within Lender's power,or (F) to commit any actor omission of any kind,at any time.wish respect to any matter whatsoever. LENDER'S RIGHTS. Lender may lake or cmil any and all actions with respect to Lender's Lien w7thoul affecting whatsoever any of Lender's rights under this Subordination. In particula•,without limitation, Lender may,K;hour notice of any kind to Beneficiary, (A) make one or more �,J � ff Res. No. 2001-66 SUBORDINATION OF DEED OF TRUST" Loan No: 1460101601 (Continued) Page 2 addieonaf secured or unsecured loans to Borrower, (a) repeatedly alter,corrpromise.renew,extend,acce'erate,or otherwise change the time for payment or other terms of the Superior irdebledness or any part of It,Including Increases and decreases of the rate of Interest on the Superior Indebtedness;extensions may be repeated and may be for longer than the odg!rat loan term, (C) take and hold collateral for the payment of the Superior Indebtedness,and exchange,enforce,waive,and release any such co'llateraf,with or without the substitution of new collateral; (0) re'ease,substitute, agree not to sue, or deal with any one or more at Borrerwers sureties. endorsers, or guarantors on any terms or manner Lender chooses; (E) determine how,when and what application of payments and credits,shall be made on the Superior indebtedness: (F) apply such security and Cxect the order or manner of sale of the security,as tender In Its discretion may determine; and (G) transfer 11is Subcrdinay.cn to another party. DEFAULT BY BORROWER. It Borrower becomes Insolvent or bankrupt,Ws Subordination shall remain in full force and effect, In the event of a corporate reorganization or corporate arrangement of Borrower under the prcvsions of the Bankruptcy Code, as amended.this Subordination shag remain in full force and effect and the court having jurisdiction over the roDrganization or arrangement fs hereby authorized to preserve such priod•y and aubcrdinallon provided under this Subordination In approving any such plan of reorganization or arrangement. AGENCY$RIGfiT TO CURE;AGENCY'S RIGHT 70 ACQUIRE LOAN.Upon the occurrence of an event cf default under•the Loan.the Bank shall,(1)Cosscurrently with Dark's ftotitytng Borrower of the occurrence of such event of default,notify Agency of the occurrence of such event of default(2)With respect to a non-monetary default,permit Agency to cure or correct any such default within[)ninety(96)calendar days allar receipt of such notice,or Ol)the cure period. If any,granted to the Borrower under Bank's loan documents,whichever Is longer,and(3)Vlfith respect to a monetary detatA permit Agency to cure or correct such default within 0)sbdy(SQ)days after receipt of such notice,or(11)the cure perio!,If M.granted to the Borrower tinder 13arWs loan documents.whichever is longer. Addit-onany,foaowtng Bank's notification to Agency of the occurrence of an event of default under the Loan and the expiration of any curative pedoi(s),d any.set forth thereunder,and sa tong as the Loan remains In defat.lt and no amount remains undisbursed under the Loan,Agency shall have the right to purchase Bank's loan documents at a cash purchase prize equal to all amounts due and owing under the Loan. in the event of any such purchase,which shaft occur Of at all)within sixty(60)days foWng the expiration of any curative period granted Borrower for such event of default,whichever Is longer,flank shall,contemporaneously therewith,sett,transfer,assign and deliver(without representation or warrant,whether express or Implied, and without recovre) to Aganey the Note.the Mortgage,and all other loan documents by executing, end"ng and dalivering to Agency any and all necessary or epproprWo documents and instruments In recordable form. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Subordfnaffon: Amendments. This Subordination,togelher with any Related Documents.cons5'tutes the entire understanding and agreement of the parties as to the matters set forth in this Subordination. No alteration of or amendment to this Subordfnafion shalt be effective unless given In writing and s',gned by the party or parties sought to be charged or bound by the e'larabon or amendment. Attorneys'Fees;Expenses. It Lender institutes any suit or action to enlcrxe any of the ferms of this Subordination,Lender shall be entit;ed to recover such sum as the court may adjudge seasonable as ahorne,,V leas at trial and upon any appeal, Whelher or not any court action Is Invclved,ar.d to the extent not prohiblted by taw,an reasonabte expenses Lender incurs that In Lender's cpinton are necessary at any time for the protection of its Interest or the enforcement of its rights shaft become a Fart of the indebtedness payable on demand and shad bear Interest at 0a Note rate from the date of the expenditure unhl repaid. Expenses covered by this paragraph Include, without limitation, however subjeci to any limits under applicable law,tender's attorneys'tees and tenders legal expenses,whether or not there is a lawsuit, Including arorneys fees and expenses for bankruptcy proceedings(nclud:ng efforts to modify or vacate any automatic stay or Injunction), eapeals,and any anticipated post-Judgment co3ection services,the cost of searching records,obtaining till)reports(including foreclosure reports), surveyors' reports, and appraisal fees, title Insurance, and fees for the Trustee, to the extent pernutted by applicable law. Beneficiary aiso wtiA pay any court costs.in addition to all!other sums provided bylaw. Authority. The person who Signs this Subordination as or on behalf of Eeneficiary represents and warrants that he or she has authority to ere:ute this Subordinalon and to subordinate the Subordinated tndebtediess and the Beneficlary's security Interests In Borrower's property, It any. Caption Headings. Caption headings in this Subordination are for convenience purposes only and are not to be used to Interpret or 09.1ne t}e provisions of this Subordination. Governing Law. This SubordinaVon will be govemed by,construed aid enforced In Accordance with federal law and the laws of the Stale of California. This Subordination has been accepted by Lender in the State of California. Successors. This Subordination shall extend to and bind the respectn-a heirs, personal representatives, successors and assigns of t:)e Fait-es to this Subordination, and the covenants of Borrower and Beneficiary herein to favor of Lender shall extend to, include, and be enforceable by any transferee or endorses to whom tender snay Transfer arry or ail of the Superior Indebtedness. Na Waiver by Lender. Lender shal not be deemed to have waived any rights under ibis Subordination unless such waiver is given In writing and signed by Lender. No delay or omission on the part of Lender in exercising any right sha'I operates as a waiver of such right or any other right. A waiver by Lender of a provision of this Subordination shall not prejudice or conslitule a waiver of Lendees right otherwise to danand strict compliance with that provision or any other provision of this Subordinatlon. No prior waiver by Lender,nor any course of Cea"ng between Lender and Beneficiary,shall consti.W..e a waiver of any of Lender's rights at of any of Beneficiary's obtigaaons as to any Uwe transactions. Whenever tha consent of Lender Is required under this Subordination,the granting of such consent by Lender In any Instance sW not constltule continuing consent to subsegcienl Instances where such consent Is required and in all cases such consent may to granted or withheld In the sole dfsctelion of Lender. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY 70 OBTAIN A LOAN, A PORTION OF WHICH i41AY BE EXPENDED FOR OTHER PURPOSES THAN iMPROVEMENT OF THE LAND. EACH PARTY 70 THIS SUBORDINATION ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS SUBORDINATION,AND EAC" PARTY AGREES TO ITS TERMS. THIS SUBORDINATION IS DATED AUGUST ls,2001. Res. No. 2001-66 SUBORDINATION OF DEED OF TRUST Loan No: 1460101601 (Continued) Page 3 BORROWER: SHELTER FOR THE HOMELESS,INC.DSA AMERICAN LODGING By Marcia Stone, Executive Director of Shelter for the Homeless, Inc. dba American Lodging BENEFICIARY: REDEVELOPMENT AGENCY OF HUNTINGTON BEACH By: Authorized Signer for Redevelopment Agency of Huntington Beath By: Authorized Signer for Redevelopment Agency of Huntington Beach TRUSTEE: CITY OF HUNTINGTON BEACH By: Authorized Signer for City of Huntington Beach By: Authorized Signer for City of Huntington Beach LENDER: x Authorized Officer Res. No. 2001-66 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 17th day of September, 2001 by the following vote: AYES: Green, Boardman, Cook, Julien Houchen, Garofalo, Dettloff, Bauer NOES: None ABSENT: None ABSTAIN: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California Redevelopment Agency Resolution No. 3Z , Providing for the Subordination of the Deed of Trust Between the Redevelopment Agency and Shelter for the Homeless, Inc. RESOLUTION NO. 324 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTRgGTON BEACH PROVIDING FOR THE SUBORDINATION OF THE DEED OF TRUST BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, SHELTER FOR THE HOMELESS, INC.,DBA AMERICAN LODGING,AND THE CITY OF HUNTINGTON BEACH WHEREAS, On April 17,2000, the Redevelopment Agency of the City of Huntington Beach(the"Agency"}approved that certain Owner Participation Agreement(the"Agreement') with the Shelter for the Homeless,Inc.,dba American Lodging(the"Participant');and The purpose of the Agreement is to assist the Agency to meet its affordable housing goals pursuant to the California Community Redevelopment Law by facilitating Participant's rehabilitation-in-place of an apartment building for the purpose of providing rental housing to tenants whose household incomes do not exceed very low income as defined by California law;and The Agency's assistance is in the form of a loan in the amount of$350,000.00 to assist Participant in meeting the cost of acquisition and rehabilitation of the Site;and The Agency Loan is evidenced by that certain Promissory Note dated April 27,20W in favor of the Agency in the stun of$350,000.00,as secured by that certain Deed of Trust dated April 27,2000,from Participant as Trustor to the City of Huntington Beach as Trustee in favor of the Agency as Beneficiary,recorded May 1,2000,as Instrument No. 20000225131 of the Official Records of Orange County,California;and The Agreement also requires the Participant to obtain a loan from a conventional/permanent lender to be used exclusively for the rehabilitation of th!Site in an amount not to exceed S50,000.00; and Pursuant to Section 33334.14 of the Health and Safety Code,the Agency is permitted to subordinate the Agency Deed of Trust to superior deeds of trust and other related documents including but not limited to those required by the Conventional Lender, if certain findings are made and certain written commitments are obtained ,from such Conventional Lender, NOW,THEREFORE,the Agency does hereby resolve as follows: 1. That in accordance with said Section 33334.14, the Agency hereby finds that no economically feasible alternative method of financing the Project on substantially comparable terns and conditions without subordination is reasonably available, and that the subordination documents contain written commitments to protect the Agency's investment in the event of a default by Participant. 2. That the Agency hereby agrees to subordinate the Agency Deed of Trust to the Conventional Lender's First Deed of Trust and such other related documents as the Conventional 1 PDA 2001 Resolutions:Agency—Shelter for Ilomcicss subordination RLS 2001-06I9 • �� Res. No. 324 Lender may require,in the amount of the Conventional Lender's First Deed of Trust,not to exceed Fifty Thousand Dollars($50,000.00). 3. That the Executive Director is hereby authorized and directed to execute on behalf of the Agency all documents necessary to accomplish the aforesaid subordination,including but not limited to,the document entitled"Subordination of Deed of Trust,"a copy of which is attached hereto as Exhibit"A"and incorporated by this reference as though fully set forth herein. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting thereof held on the 17th day of September ,2001. C irperson ATTEST: APPROVED AS TO FORM: 4�� ed Agency Clerk o1-V-e 6WAgency General Counselflsw 4ASlei REVIEWED AND APPROVED: MTLIATED AN/DJ APPROVED: Exe tive Director Deputy Executi Director 2 PDA 2001 Resolutions:Agency—5hcher for I lomcless subordination RLS 2001.)619 Res. No. 324 EXHIBIT A Res. No. 324 RECORDATION REQUESTED BY: WHEN RECORDED MAIL TO: BYL Bank Group 187S N.Tustin Avenue Orange,CA 92865 FOR RECORDER'S E!2NLY NOTICE: THIS SUBORDINATION OF DEED OF TRUST RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. SUBORDINATION OF DEED OF TRUST THIS SUBORDINATION OF DEED OF TRUST dated August 16, 2001, Is made and executed among Redevelopment Agency of Huntington Beach ("Beneficiary"); City of Huntington Beach ("Trustee"); Shelter for the Homeless, inc. dba American Lodging ("Borrower'); and BYL BANK GROUP ("Lender"). SUBORDINATED INDEBTEDNESS. B3nenclary has extended the foroming described frianclat accommodations (the "Subordinated Indebtedness')to Shelter for the Homeless,Inc.dba American Lodging rrus'or"y: A Note In the sum of$350,000.00,dsled April 27,20001n favor of Redevelopment Agency of the Agency of Huntington Beach. SUBORDINATED DEED OF TRUST. The Subordinated Indebtedness Is secured by a deed of trust dated April 27,2000 from Trusior to Trustee In favor of Beneficiary(the'Subordinated Deed of Trust)recorded In Orange County,Slate of California as follows: Recorded May 1,2000 as Instrument No.20000225t31. REAL PROPERTY DESCRIPTION. The Subordinated Deed of Trust covers the following described real property located In Orange County,State of Calfornia: Lot 33 of Tract 4301.as per map recorded In Book 177 Pages 11 and 12 of Miscellaneous Maps.In the Office of the County Recorder of said County The Real Property or Its address Is commonly known as 7802 Barton Drive,Kntington Beach,CA 92647. The Assessor's Parce'.Number for the Real Property is 165-223-03. REQUESTED FINANCIAL ACCOMMODATIONS. Borrower,who may or may not be the same entity as Trustor, and Senefio-lary each want Larder to provide financial accommodations to Borrower In the form of (A) new credit or loan advances. (5) an extension of time to pay or other compromises regarding aft or part of Borrower's present Indebtedness to Lender. or (C) other benefits to Borrower. Borrower and Beneficiary each represent and acknowledge to Lender that Beneficiary will benefit as a result of these financial accommodations from Lender to Borrower,and Beneficiary acknowledges receipt of valuable consideration for entering Into this Subordination. LENDER'S LIEN. As a condition to the granting of the requested financia!accommodations. Lender has required that Lender's Lien be and rerratn superior to the Subordina`.ed Deed of Trust NOW THEREFORE THE PARTIES TO TVIS SUBORDINATION HEREBY AGREE AS F0110wS: SUBORDINATION. The Subordinaled Deed of Trust and the Subordina'ed Indebtedness secured by the Subordinated Deed of Trust Is and shal be subord'nated in all respects 10 Lender's Lien and the Superior Indebtedness.and It Is agreed that Lender's Lien shall be and remain.at 0 times,prior and superior loft Pen of the Subordinated Deed of Trust. Senefeliary also subordinates to Lender's Lien AR other Security Interests In the Real Property held by Beneficiary,whether now existing or hereafter acquired. BENEFICIARY'S REPRESENTATIONS AND WARRANTIES. Benefciary represents and warrants to Lender than (A) no representations or agreements of any kind have been made to Beneficiary which would Gm;l or qualify In any way the terms of this Subordination; (B) this Subordination Is executed at Borrower's request and not at the request of Lender, (C)Lender has made no representation to Beneficlary as to the creditworthiness of Borrower, and (D) Beneficiary has established adequate means of oblaln:ng from Borrower on a continuing basis lnfcrmafion regarding Berrowers financial condition. Seneficlary agrees to keep adequately informed from such means of any facts,events, or circumstances which might In any way affect Beneficiary's risks under this Subordination,and Beneficiary further agrees that Lender shah have no obligation to disclose to Beneficiary information or material acquired by Lender In the course of]Is relationship with Borrower. BENEFICIARY WAIVERS. Beneficiary waives any right to require Lender. (A) to make, extend,renew,or modify any loan to Borrower or 10 grant any other financial accommodations to Borrower whatsoever, (B) to make any presentment, pro!est. demand, or notice of any kind, Inchid°ng notice of any nonpayment of any Superior Indebtedness secured by Lender's Lien,or notice of any action or nonaction on the part of Borrower,Lender,any surety,endorser,q other guarantor In connection with the Superior Indebtedness,or In connection with the crea5cn of new cr additional Indebtedness: (C) to resort for payment or to proceed directly or at once against any person.Including Borrower, (D) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor.or any other person; (E) to pursue any other remedy within Lender's power,or (F) to commit any actor omission of eny kind,at any time,with respect to any matter whatsoever. LENDER'S RIGHTS. Lender may take cr omit any and an actions with resrecl to Lender's Lien without affecting whatsoever any of Lender's rigrls under this Subordination. In particular.without limitation.Lender may,without notice of any kind to Beneficiary. (A) make one or more Res. No. 324 SU,3ORDINATION OF DEED OPTRUb. Loan No: 1460101601 (Continued) Page 2 additional secured or unsecured loans to Borrower; (B) repeatedly alter,compromise,renew,extend,accelerate,or otherwise change the time for payment or other terms of the Superior Indebtedness or any part of it,including increases and decreases of the rate of interest on the Superior Indebtedness;extensions may be repeated and may be for longer than the original loan term;(C) take and hold collateral for the payment of the Superior Indebtedness, and exchange, enforce, waive, and release any such collateral, with or without the substitution of new collateral; (D) release,substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or guarantors on any terms or manner Lender chooses; (E) determine how,when and what application of payments and credits,shall be made on the Superior Indebtedness; (F) apply such.security and direct the order or manner of sale of the security, as Lender in its discretion may determine; and (G) 'transfer this Subordination to another party. DEFAULT BY BORROWER. If Borrower becomes Insolvent or bankrupt,this Subordination shall remain in full force and effect. In the event of a corporate reorganization or corporate arrangement of Borrower under the provisions of the Bankruptcy Code,as amended, this Subordination shall remain in full force and effect and the court having jurisdiction over the reorganization or arrangement Is hereby authorized to preserve such priority and subordination provided under this Subordination In approving any such plan of reorganization or arrangement. AGENCY'S RIGHT TO CURE; AGENCY'S RIGHT TO ACQUIRE LOAN.Upon the occurrence of an event of default under the Loan,the Bank shall,(1)Concurrently with Bank's notifying Borrower of the occurrence of such event of default,notify Agency of the occurrence of such event of default;(2)With respect to a non-monetary default,permit Agency to cure or correct any such default within (1)ninety(90)calendar days after receipt of such notice, or(t)the cure period,if any,granted to the Borrower under Bank's loan documents, whichever is longer; and (3)With respect to a monetary default,permit Agency to cure or correct such default within(I)sixty(60)days after receipt of such notice,or(it)the cure period,if any,granted to the Borrower under Bank's loan documents,whichever is longer. Additionally,following Bank's notification to Agency of the occurrence of an event of default under the Loan and the expiration of any curative period(s),if any,set forth thereunder,and so long as the Loan remains in default and no amount remains undisbursed under the Loan,Agency shall have the right to purchase Bank's loan documents at a cash purchase price equal to all amounts due and owing under the Loan. In the . event of any such purchase,which shall occur(if at all)within sixty(60)days following the expiration of any curative period granted Borrower for such event of default,whichever is longer,Bank shall,contemporaneously therewith,sell,transfer,assign and deliver(without representation or warrant, whether express or Implied, and without recourse) to Agency the Note, the Mortgage, and all other loan documents by executing, endorsing and delivering to Agency any and all necessary or appropriate documents and instruments in recordable form. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Subordination: Amendments. This Subordination,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Subordination. No alteration of or amendment to this Subordination shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. If Lender institutes any suit or action to enforce any of the terms of this Subordination,Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court action is involved,and to the extent not prohibited by law,all reasonable expenses Lender Incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit, including attorneys'fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records,obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Beneficiary also will pay any court costs,in addition to all other sums provided by law. Authority. The person who signs this Subordination as or on behalf of Beneficiary represents and warrants that he or she has authority to execute this Subordination and to subordinate the Subordinated Indebtedness and the Beneficiary's security interests in Borrower's property, if any. Caption Headings. Caption headings in this Subordination are for convenience purposes only and are not to be used to interpret or define the provisions of this Subordination. Governing Law. This Subordination will be governed by,construed and enforced In accordance with federal law and the laws of the State of California. This Subordination has been accepted by Lender In the State of California. Successors. This Subordination shall extend to and bind the respective heirs, personal representatives, successors and assigns of the parties to this Subordination, and the covenants of Borrower and Beneficiary herein in favor of Lender shall extend to, include, and be enforceable by any transferee or endorsee to whom Lender may transfer any or all of the Superior Indebtedness. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Subordination unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Subordination shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Subordination. No prior waiver by Lender, nor any course of dealing between Lender and Beneficiary, shall constitute a waiver of any of Lender's rights or of any of Beneficiary's obligations as to any future transactions. Whenever the consent of Lender is required under this Subordination,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. EACH PARTY TO THIS SUBORDINATION ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS SUBORDINATION,AND EACH PARTY AGREES TO ITS TERMS. THIS SUBORDINATION IS DATED AUGUST 16,2001. � J Res. No.• 324 WBORDINATION OF DEED OF TRtST Loan No: 1460101601 (Continued) Page 3 BORROWER: SHELTER FOR THE HOMELESS,INC.CBA AMERICAN LODGING By:.sL1L? sL. Alarcla atone,. Executive Director of Shelter for the Homeless, Inc. dba American Lodging BENEFICIARY: REDEVELOPMENT AGENCY OF HUNTINGTON BEACH By.Authorized Signer for Redevelopment Agency of Huntington Beach By: Authorized Signer for Redevelopment Agency of Huntinglon Beach TRUSTEE: CITY OF HUNTINGTON BEACH By: Authorized Signer for City of Huntinglon Beach By: Authorized Signer for City of Huntington Beach LENDER: X Authorized Officer Res. No. 324 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a regular meeting of said Redevelopment Agency held on the 17th day of September, 2001 and that it was so adopted by the following vote: AYES: Green, Boardman, Cook, .Julien Houchen, Garofalo, Dettloff, Bauer NOES: None ABSENT: None ABSTAIN: None Clerk of the Redevelopment Agency of the City of Huntington Beach, CA RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approve Authorizing Resolutions for Shelter for the Homeless 7802 Barton Drive Affordable Housing Pmject COUNCIL MEETING DATE: I September 17, 2001 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution wlexhibits & le islative draft if applicable) Attached Tract Map, Location Ma2 andfor other Exhibits Not ApRlicable Contract/Agreement (w/exhibits if applicable) Si ned in full by the City Aftome Not Applicable Subleases, Third Party Agreements, etc. _(Approved as to form Py qitZ Attome Not Applicable Certifcates of Insurance (Aperoved by the qLtX Aftome Not Applicable Financial Impact Statement Unbud et, over$5,000 Not Applicable Bonds If applicable) Not Applicable Staff Report If applicable) Not A licable Commission, Board or Committee Report If applicable) Not Applicable Find in s/Conditions for Approval and/or Denial Not Ap licable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Q� Assistant Cily Administrator Initial City Administrator Initial CU Clerk ���,�� EXPLANATION FOR RETURN OF ITEM: SpaceOnly) RCA Author. HOLTZ(5901)