HomeMy WebLinkAboutHuntington Beach Housing Authority and Beach Housing Partners, LP - 2021-01-05 City of Huntington Beach
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File #: 21-033 MEETING DATE: 1/19/2021
REQUEST FOR CITY COUNCIL AND HOUSING AUTHORITY ACTION
SUBMITTED TO: Honorable Mayor/Chair and City Council/Commissioners
SUBMITTED BY: Oliver Chi, City Manager/Executive Officer
PREPARED BY: Ursula Luna-Reynosa, Director of Community Development
Subiect:
Approve and authorize execution of an Affordable Housing Agreement between the City, the
Housing Authority and Beach Housing Partners, LP (Jamboree Housing Corporation) for a 43-
unit senior affordable housing project located at 18431 Beach Blvd.
Statement of Issue:
On November 4, 2019, the City Council approved a $3 Million loan to Jamboree Housing Corporation
for development of a 43-unit senior affordable housing project at 18431 Beach Blvd. (Attachment 1).
As part of that action, the City Council directed staff to negotiate an agreement outlining the specific
affordability terms for the project. Staff has prepared an Affordable Housing Agreement (the
"Agreement") (Attachment 2) with Huntington Housing Partners, LP with Jamboree Housing
Corporation as the Managing General Partner (the "Developer"), as summarized below, for City
Council consideration.
Financial Impact:
In November 2019, the City Council allocated $3 million from the Affordable Housing Trust Fund
($2,100,000) and the Low and Moderate Income Housing Asset Fund ($900,000) as an acquisition
loan to enable Jamboree Housing Corporation to acquire 18431 Beach Blvd. for an affordable
housing project. Should the City Council approve the Agreement, the acquisition loan will be
converted to a permanent loan. By separate action, the City Council has been asked to consider an
amendment to the City's Annual Action Plan that governs the use of federal Community Development
Block Grant (CDBG) and HOME Investment Partnerships (HOME) funds. One action of the
amendment is to allocate $2,830,698 of HOME funds to this project in lieu of these City funds. If the
City Council approves this allocation of HOME funds then the Low and Moderate Housing Asset
Fund will be reimbursed $900,000 and the Affordable Housing Trust Fund will be reimbursed
$1,930,698. The City's $3 Million dollar permanent loan will be comprised of$2,830,698 in HOME
funds and $169,302 in Affordable Housing Trust Funds. The Developer will pay an annual monitoring
fee of$1,075, increasing 3% per year, to defray the City's cost associated with monitoring the
affordability requirements.
City Council and Housing Authority Recommended Action:
A) Approve the Agreement by and between the City and Developer; and,
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File #: 21-033 MEETING DATE: 1/19/2021
B) Authorize and direct the City Manager to finalize and execute the "Affordable Housing Agreement
By and Among the City of Huntington Beach, California, The Huntington Beach Housing Authority,
and Beach Housing Partners LP, A California Limited Partnership" attached hereto, in a form
approved by the City Attorney; and,
C) Authorize and direct the City Manager to execute any other documents and budgetary actions
necessary to implement said Agreement.
Alternative Action(s):
Do not approve the proposed Agreement or request amendments to the Agreement.
Analysis:
On November 4, 2019, the City Council approved an Acquisition Loan Agreement with Jamboree
Housing Corporation (Jamboree) to purchase a .78 acre parcel of vacant land located at 18431
Beach Blvd. (the "Property") (Attachment 3) to develop a 43-unit senior affordable housing project
(the "Project"). As part of that action, the City Council directed staff to negotiate an agreement with
Jamboree or a subsidiary, setting forth the specific affordable housing terms for the Project.
Jamboree has since purchased the Property, formed a subsidiary, Beach Housing Partners, LP, and
begun the City's site plan review process. Jamboree has also begun applying for additional financing
for the Project from the State, County, Orange County Housing Finance Trust, and Tax Credit
Allocation Committee. Staff and the Developer have negotiated the terms of the Agreement, which is
attached for City Council consideration.
Project Description
The proposed Project consists of 43 one-bedroom affordable senior apartments. For a term of 60
years, 33 units will be affordable to extremely low income households (those earning less than 30%
of the area median income) and 9 units will be affordable to very low income households (those
earning less than 50% of the area median income). One unit will be an on-site manager's unit.
Project Financing
The total estimated acquisition and development costs for the Project are $26,574,531. City
assistance approved by the City Council in November 2019 totals $3 million ($69,767 per unit) or
11% of the total development costs. As is typical of affordable housing projects, there will be a variety
of other funding sources, including:
• Federal tax credits
• Tax-exempt bonds
• County of Orange Special Needs Housing Program (SNHP) loan
• County of Orange No Place Like Home (NPLH) loan
• Orange County Housing Finance Trust loan
The City's $3 Million loan was funded from the Affordable Housing Trust Fund ($2,100,000) and Low
and Moderate Income Housing Asset Fund ($900,000). During the past year, the owners of two
affordable housing projects in Huntington Beach (Hermosa Vista and Huntington Pointe Apartments)
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File #: 21-033 MEETING DATE: 1/19/2021
repaid HOME funded loans to the City in the total amount of $2,315,553. By separate action, the City
Council is asked to allocate these repaid HOME funds along with $515,145 in unallocated HOME
funds to this Project in lieu of the City's affordable housing resources. HOME funds have strict
expenditure timeframes and other requirements (e.g. federal prevailing wages for construction) that
the Project is already satisfying to meet County of Orange financing requirements. If approved, the
Low and Moderate Housing Asset Fund will be reimbursed $900,000 and the Affordable Housing
Trust Fund will be reimbursed $1,930,698 for use on future affordable housing opportunities. The
City's $3 million loan to Jamboree Housing Corporation will then consist of $2,830,698 in HOME
funds and $169,302 in Affordable Housing Trust Funds.
The proposed term of the City's loan is 60 years with simple interest of 3%. Jamboree will repay the
City loan proportionally among all public agency lenders (such as the County of Orange) with full
repayment by the 60-year maturity date of the City's note. Payments will be made to the City
annually, from the project's residual receipts (i.e., annual revenue remaining after operating
expenses).
A financial gap analysis of the Project prepared by the National Development Council shows
anticipated project development costs are reasonable, the City's financial assistance of $3 million is
appropriate, and the Project is financially feasible if the Developer successfully obtains the funding
described above. In addition, because City staff will be monitoring the project annually for compliance
with affordability requirements and other terms of the Agreement, Jamboree has agreed to pay an
annual monitoring fee of $1,075, increasing at 3% per year, to defray the City's cost associated with
this monitoring.
Schedule
The Agreement provides the Developer until May 2022 to obtain all necessary financing to complete
the project and then two years to finish construction. If either of these deadlines are missed, the City
may terminate the Agreement and ownership of the Property will transfer to the City. In that unlikely
event, the City could consider completing the project in partnership with a different affordable housing
developer.
Conclusion
The Project meets a critical affordable housing need within the Huntington Beach community. Per the
Homeless Task Force Team, case managers and officers have made contact with and offered
services to approximately 157 seniors. It is estimated that many more seniors are on the verge of
homelessness. This Project will provide wrap-around, supportive services to its residents. Eligible
occupants of the City's Navigation Center will have priority on the Project's waiting list. The restricted
City funds utilized to subsidize the Project must be used for affordable housing. This Project satisfies
affordable housing needs within the community and meets the criteria of the proposed restricted
funds.
Environmental Status:
Pursuant to Section 15194 the California Environmental Quality Act (CEQA) Guidelines, affordable
housing projects meeting specific criteria listed in Sections 15192 and 15194 of the CEQA Guidelines
are exempt. The Project meets the criteria listed in the above-mentioned sections and is therefore
exempt.
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File #: 21-033 MEETING DATE: 1/19/2021
Strategic Plan Goal:
Strengthen long-term financial and economic sustainability
Attachment(s):
1. November 4, 2019 RCA approving an Acquisition Loan Agreement between the City and
Jamboree Housing Corporation
2. Affordable Housing Agreement between the City of Huntington Beach, the Huntington Beach
Housing Authority, and Beach Housing Partners, LP (Jamboree Housing Corporation)
3. Site Map
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ATTACHMENT # 1
City of Huntington Beach (P -AgsEW
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File #: 19-1024 MEETING DATE: 11/4/2019
REQUEST FOR CITY COUNCIUHOUSING AUTHORITY ACTION
SUBMITTED TO: Honorable Mayor/Chair and City Councilmembers/Commissioners
SUBMITTED BY: Oliver Chi, City Manager/Executive Director
PREPARED BY: Kellee Fritzal, Deputy Director of Economic Development
Subject:
Approve and authorize execution of an Acquisition Loan Agreement between the City and
Jamboree Housing Corporation for development of up to 43 senior apartment units located at
18431 Beach Boulevard; and approve allocation of funds
Statement of Issue:
Jamboree Housing Corporation ("Jamboree") has entered into a purchase and sale agreement for
the acquisition of an approximately .78 acre parcel of vacant land located at 18431 Beach Boulevard
(Site), with the intent to develop an affordable housing project. Based on the merits of the project,
coupled with the City's availability of restricted housing funds, staff is recommending approval of a $3
million property acquisition loan to help facilitate the affordable housing development project. Of
note, the proposed property acquisition loan would only be to help facilitate acquisition of the Site. If
Jamboree is unable to secure financing for the project, or if Jamboree fails to entitle their proposed
project, the Site would have to then be transferred back to the City.
Financial Impact:
The funding will be through the Inclusionary Housing Fund of $2.1 million (Fund 217) and LMIHAF
Fund of $900,000 (Fund 352); the former Redevelopment Agency housing funds. Both of these
funds are restricted for the purpose of developing affordable housing within the City. Adequate fund
balance is available in both funds.
Recommended City Council and Housing Authority Action:
A) Approve the Loan Agreement (as defined later in this Staff Report) by and between the City of
Huntington Beach, the Housing Authority and JHC-Acquisitions LLC. Authorize the City
Manager/Executive Director and City Attorney/Authority Counsel to make non-substantive changes if
required; and,
B) Authorize and direct the City Manager/Executive Director, after City Attorney/Authority Counsel
review, to sign any necessary documents to implement the Agreement; and,
C) Appropriate funds of$2.1 million from Fund 217 and $900,000 from Fund 352 for this purpose.
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File #: 19-1024 MEETING DATE: 11/4/2019
Alternative Action(s):
Do not approve the Agreement and provide Staff direction.
Analysis:
Jamboree has entered into a purchase and sale agreement to acquire the Site for $3 million. As part
of their proposed development plan, the developer has been engaged in discussions with the City
regarding a possible subsidy to facilitate their acquisition of the identified property. After review and
analyzing the issue in great detail, staff and Jamboree have developed for City Council consideration
an Acquisition Loan agreement (Loan Agreement). If approved, the Loan Agreement would result in
the City providing Jamboree with a $3 million loan to facilitate acquisition of the Site. Of note, the
Loan Agreement would be secured by the real property acquired, and would also require that
affordability covenants be recorded against the Site to prohibit anything other than affordable housing
on the property.
By acquiring the Site, Jamboree will be able to seek funding for the construction of the project from
multiple sources including the State, County, and the Tax Credit Allocation Committee ("TCAC"). If
Jamboree fails to secure the required funding for development, the land will be conveyed to the City
for a future affordable housing project.
While Jamboree has entered into a purchase and sale agreement to acquire the Site for $3,000,000,
an appraisal dated July 30, 2019, prepared by Nagasaki and Associates, values the site at three
million, two hundred thousand Dollars ($3,200,000). Jamboree has conducted both a Phase I and
Phase II Environmental Site Assessment which determined the site to be free of environmental
contamination liabilities.
Jamboree is a nonprofit affordable housing developer founded in 1990 with the mission to deliver
quality housing and services, leverage resources, transform lives, and strengthen communities.
Jamboree currently has five (5) successful affordable housing projects within the City of Huntington
Beach.
The Community Development Department has reviewed several conceptual housing projects at the
site over the past ten years. Jamboree's site analysis has resulted in the following conceptual unit
yield for the site:
Type of Units Number of Units
1-Bedroom Units 39
2- Bedroom Units 4
Total 3
Part of Jamboree's site analysis to determine whether the site is a good candidate to be eligible for
restricted funds not only requires the unit yield analysis, but an affordability analysis as well. As part
of this analysis, Jamboree envisions this affordable housing project to consist of 33 units for
extremely low-income seniors, and six units for low income seniors. Jamboree also envisions a
future project to include wrap-around services to assist the vulnerable, extremely low-income
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File #: 19-1024 MEETING DATE: 11/4/2019
population that Jamboree looks to serve at the site. This model is often referred to as "permanent
supportive housing."
It is necessary for Jamboree to acquire the site in order to be competitive for additional funding. The
City's financial consultant, Keyser Marston Associates, reviewed Jamboree's pro-forma and
determined that the projected costs and revenues are in line with industry standards for the proposed
product type and financial gap of three million, three hundred eleven thousand dollars ($3,311,000)
does exist. In other words, the projected costs to develop the proposed product type exceed the
projected revenue generated by over three million dollars. Therefore, the loan amount of three
million dollars ($3,000,000) is reasonable and justified to enable an affordable housing development
at the site.
If the Loan Agreement is approved, Jamboree will use its best efforts to secure additional financing
and entitlements. Upon successful completion of those efforts, an Affordable Housing Agreement will
be brought forward to the City Council for consideration to memorialize the specifics of an affordable
housing development (unit count, affordability, etc.).
Environmental Status:
The action to approve the Loan Agreement with Jamboree is exempt pursuant to Section 15061(b)(3)
of the California Environmental Quality Act (CEQA) Guidelines, which exempts activities where it can
be seen with certainty that there is no possibility that the activity may have an adverse environmental
effect. Jamboree is currently in the process of acquiring the Site and is requesting an acquisition
loan from the City. The action to enter into the Loan Agreement with Jamboree does not constitute
project approval or ensure that the project would obtain funding to move forward. Jamboree is
acquiring the site for the purpose of obtaining funding for and the subsequent development of an
affordable housing project of up to 43 units on the site, which would be subject to a separate
development application and environmental review process. However, a future project contemplated
on the Site would be exempt pursuant to Section 15194, which exempts affordable housing projects
meeting specific criteria listed in Sections 15192 and 15194 of the CEQA Guidelines. Based on
current site information, the Site and project would meet the criteria listed in the above-mentioned
sections.
Strategic Plan Goal:
Non-Applicable - Administrative Item
Attachment(s):
1. Acquisition Loan Agreement by and between the City of Huntington Beach and JHC-
Acquisitions LLC
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City Council/ ACTION AGENDA November 4,2019
Public Finance Authority
D) Approve the appointment of Marie Knight to the position of Director of Organizational
Learning & Engagement; and,
E) Approve and authorize the City Manager to execute the "Employment Agreement Between
the City of Huntington Beach and Marie Knight" for the position of Director of Organizational
Learning and Engagement.
Approved 6-0-1 (Peterson absent) as amended to strike reference to vacant Department
Head positions identified on Exhibit 1 of Resolution 2019-78
16. 19 1104 Approved the appointment of Christopher Slama to the position of the
Director of Community Services and authorized the City Manager to execute the
Employment Agreement
Recommended Action:
Approve and authorize the City Manager to execute the"Employment Agreement Between the City
of Huntington Beach and Christopher Slama"for the position of Director of Community Services.
Approved 6-0-1 (Peterson absent)
ADMINISTRATIVE ITEMS
17. 19-1119 Approved and authorized execution of a Lease Agreement for Let's Go
Fishing and Surf City Snack Bar, LLC at the Huntington Beach Pier
Recommended Action:
A) Approve and authorize the Mayor, City Clerk, and City Manager to execute "Lease
between the City of Huntington Beach and Let's Go Fishing and Surf City Snack Bar,
LLCMaF*an johnSOR, a sole pmpFieteF, doing business as Let's Ge FishiRg and SUFf City
Snael Saf in the City of Huntington Beach"; and,
B) Direct staff to review expectations/options for the Pier Concession and bring back as a Study
Session item.
Approved 6-0-1 (Peterson absent) as amended to revise lease agreement from a 1-year to 6-
month term, with a month-to-month option thereafter for year one;and, to accept revisions
submitted via Supplemental Communication to update the business name and delete
Section 16. SECURITY DEPOSIT.
18. 19 1024 Approved and authorized execution of an Acquisition Loan Agreement
between the City, Housing Authority and Beach Housing Partners LP for development of
up to 43 senior apartment units located at 18431 Beach Boulevard; and approved
allocation of funds
Recommended City Council and Housing Authority Action:
A) Direct the City Manager/Executive Director and City Attorney/Authority Counsel to
finalize the draft Acquisition Loan Agreement(18431 Beach Boulevard) by and among
the Huntington Beach Housing Authority, City of Huntington Beach, and Beach
Housing Partners LP;
and,
295
City Council/ ACTION AGENDA November 4, 2019
Public Finance Authority
B) Authorize and direct the City Manager/Executive Director, after City Attorney/Authority
Counsel review, to sign any necessary documents to implement the Agreement; and,
C) Appropriate funds of $2.1 million from Fund 217 and $900,000 from Fund 352 for this
purpose.
. i �,�ai lq u
Approyetl 6�0 1 (Peterson'absent)as amende&by Suppl6'" t PCommunication to
G Qj
`revise Recommended City Council_and Hous/ng Authority°Action A).
19. 19-1094 Directed staff to prepare Amendments to the Housing Element of the
General Plan and to the Beach Edinger Corridor Specific Plan (BECSP) to obtain
Housing and Community Development (HCD) certification for the purpose of being
eligible to apply for SB 2 Funds
Recommended Action:
Direct staff to prepare a plan for the amendments to the Housing Element and Beach
Edinger Corridor Specific Plan (BECSP) with the affordable housing overlay, and submit
that plan to the State Housing and Community Development(HCD) for consideration and
review in an effort to get our Housing Element certified
Approved 4-2-1 (Semeta, Hardy-No;Peterson-Absent) as amended.
COUNCILMEMBER COMMENTS (Not Agendized)
Comments provided Brenden, Carr, Posey, De/g/eize, Hardy and Semeta
ADJOURNMENT-9:53 PM
The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is
Monday, November 18, 2019, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street,
Huntington Beach, California.
INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND
STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT
hftp://www.huntingtonbeachca.gov
296
ATTACHMENT #2
AFFORDABLE HOUSING AGREEMENT
by and among
THE CITY OF HUNTINGTON BEACH, CALIFORNIA,
THE HUNTINGTON BEACH HOUSING AUTHORITY,
and
BEACH HOUSING PARTNERS LP
A California Limited Partnership
(18431 Beach Boulevard)
January 5, 2021
TA13LE OF CONTENTS
Page
PART 1. SUBJECT OF AGREEMEN"I. ......................................................................I
Section 101 Background. ..............................................................................I
Section 102 Purpose of this Agreement..............................................................2
Section 103 Conditional Commitment ..............................................
Section 104 Definitions........................................................................................3
Section 105 The Property...................................................................................10
Section106 City.................................................................................................10
Section107 Owner.............................................................................................10
Section 108 Assignments and Transfers............................................................I I
PART2. FINANCING ...............................................................................................12
Section 201 Method of Financing......................................................................12
Section 202 HOME Loan...................................................................................12
PART 3. IMPROVEMENT OF THE PROPFRTY ...................................................1,
Section 301 Land Use Approvals.......................................................................13
Section 302 Condition of the Property...............................................................14
Section 303 Scope of Development...................................................................14
Section 304 Basic Concept and Schematic Drawings .......................................14
Section 305 Landscaping and Grading Plans.....................................................15
Section 306 Construction Drawings and Related Documents...........................15
Section 307 City Approval of Plans...................................................................15
Section 308 Cost of Construction ......................................................................16
Section 309 Schedule of Performance ...............................................................16
Section 310 Indemnification and Insurance.......................................................17
Section 31 1 Nondiscrimination..........................................................................20
Section 312 Local. State and Federal Laws .......................................................20
Section313 Permits ...........................................................................................21
Section 314 Disclaimer of Responsibility by City.............................................21
Section 315 Taxes, Assessments. Encumbrances and Liens .............................22
Section 316 Prohibition against Transfer...........................................................2)
Section 317 Removal of Liens and Encumbrances............................................22
Section 318 Copeland Anti-Kick-Back Act.......................................................23
Section 319 Contract Work Hours and Safety Standard Act.............................23
Section401 Uses.......................................... .....................................................23
Section 402 Maintenance of the Property..........................................................25
Section 403 Obligation to Refrain from Discrimination....................................25
Section 404 Equal Employment Opportunityy....................................................25
Section 405 Effect and Duration of'Covenants.............. .._...............................26
Section 406 HOME Regulatory Agreement ......................................................27
Section 407 Labor, Training and Business Opportunity...................................27
PART 5. DEFAULTS AND REMEDIES .................................................................27
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE
Section 501 Defaults - General..........................................................................27
Section 502 Institution of Legal Actions ...........................................................28
Section 503 Applicable Law....................................................... ... ...........28
Section 504 Acceptance of Service of Process..................................................28
Section 505 Rights and Remedies Are Cumulative...........................................28
Section506 Damages.........................................................................................28
Section 507 Specific Performance.....................................................................29
Section 508 Non-Recourse Obligation ..............................................................29
Section 509 Termination by Cityy.......................................................................29
PART 6. GF."NERAL PROVISIONS..........................................................................3I
Section601 Notices ...........................................................................................31
Section 602 unforced Delay: Extension of Time of Performance.....................31
Section 603 Conflict of Interest .........................................................................31
Section604 Nonliability of City Officials and Employees................................32
Section 605 Inspection of Books and Records...................................................32
Section606 Approvals.......................................................................................32
Section 607 Real Estate Commissions...............................................................33
Section 608 Construction and Interpretation of Agreement ..............................33
Section 609 Time of Essence.............................................................................34
Section 610 No Partnership ...............................................................................34
Section 611 Compliance with Law....................................................................34
Section 612 Binding Effect................................................................................34
Section 613 No Third Party Beneficiaries .........................................................34
Section 614 Authority to Sign............................................................................34
Section 615. Incorporation by Reference............................................................34
Section 616 Counterparts...................................................................................34
Section 617 Severability ....................................................................................35
PART 7. ENTIRE AGREEMENT. WAIVERS AND AMENDMENTS ..................35
PART 8. "IIMI:: FOR ACCEPTANCE 01' AGREI::MEN-I' BY CITY.....................S-1
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE ii
ATTACHMENTS
ATTACHMENT NO. I - SITE MAP
Al"I'ACHMENT NO. 2 - LEGAL DESCRIPTION
AT I'ACHMENT NO. 3 - SCOPE: OI' DEVELOPMENT
ATTACHMENT NO. 4 - SCIiEDULE OP 13ER17ORMANCE
ATTACHMENT NO. 5 PROJECT BUDGET
ATTACHMENT NO. 6 - MI TI-IOD OF FINANCING
ATTACHMENT NO. 7 - HOME REGULATORY AGREEMENT
ATTACI IMF..NT NO. 8 - HOME NOTE
ATTACHMENT NO. 9 - HOME DEED OF TRUST
Al'TACI IMENT NO. 10 - LNCLUSIONARY NOTE
ATTACHMENT NO. I I - INCL.USIONARY DEED OF TRUST
ATTACI IMENF NO. 12 - ASSIGNMENT OF AGREEMENTS
S
ATTACHMENT NO. 13 - ENVIRONMENTAL. INDEMNITY
ATTACHMENT NO. 14 - WAIVER AND CONCESSIONAGRL-'EMIiN'I'
ATTACHMENT NO. 15 - AMENDED AND RESTATED COVENANTS
A']TACI-IMFiNT NO. 16 - AMENDED AND RESTATED NOTICE OF
RESTRICTIONS
AFFORDABLE }LOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE iii
AFFORDABLE HOUSING AGREEMENT
(18431 Beach Boulevard)
l'1-IIS AFFORDABLE HOUSING AGREEML'N"f ("Agreement") is dated for reference
purposes as of January 5, 2021 and is being entered into by and among THE CITY OF
I IUNTINGTON BEACH, a municipal corporation of the State of California (the "City"). TI11
HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic (the
"Authority"). and BEACH HOUSING PARTNERS LP, a California limited partnership
("Owner-). The City. Authority, and Owner agree as follows:
PART I. SUBJECT OF AGREEMENT
Section 101 Background
The City, Authority, and Owner previously entered into an Acquisition Loan Agreement
dated as of January 23, 2020 ('Acquisition Loan Agreement'), which provided for two loans to
Owner for the purpose of'acquiring the Property located at 18431 Beach Boulevard. Huntington
Beach.California for the development ofaflordable rental housing. Pursuant to the Acquisition Loan
Agreement, the City provided a loan to Owner of Affordable Ilousing, Trust Funds in the original
principal amount of S2.100.000 (lnclusionary Acquisition Loan") and the Authority provided a
loan to Owner of Logy and Moderate Income Housing Asset Funds in the original principal amount
of$900,000 (LMIFIAF Acquisition Loan"). Both acquisition loans accrue interest at the rate of
3%annually and both have a maturity date of February 28. 2022.The City and the Authority funded
the acquisition loans and Owner acquired title to the Property from Five Points Plaza, LL.C,which is
an unaffiliated third party,on January 29,2020.The Inclusionary Acquisition Loan is evidenced by a
promissory note dated January 28,2020(`Inclusionary Acquisition Note")and secured by a Deed
of Trust. Security Agreement and Fixture Filing(With Assignment of Rents)dated as ofJanuary 28.
2020 and recorded in the official records of Orangc County. California ("Official Records") on
January 29.2020 as Instrument No.2020000038045 (7nclusionary Acquisition Trust Deed").The
LMII-IAF Acquisition [..can is evidenced by a promissory note dated January 28, 2020 ("LMIHAF
Acquisition Note") and secured by a Deed of Trust, Security Agreement and Fixture Filing (With
Assignment of Rents)dated as of January 28.2020 and recorded in the Official Records on January
29, 2020 as Instrument No. 2020000038044("LMIFIAF Acquisition Trust Deed"). As additional
security for the acquisition loans, the City, the Authority, and Owner entered into an Option
Agreement and Joint Escrow Instructions dated as of January 28,2020(`Option Agreement')and a
Memorandum of Option dated as of January 28, 2020 was recorded in the Official Records on
January 29, 2020 as Instrument No. 2020000038043 (`Memorandum of Option").
In connection with the Inclusionary Acquisition Loan and the I..MII-IAF Acquisition Loan,the
City,the Authority,and Owner entered into an Agreement Containing Covenants dated as of January
29, 2020 and recorded in the Official Records on January 29, 2020 as Instrument No.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE
2020000038042 (`Agreement Containing Covenants"), which restricts the use of the Property as
affordable rental housing for Extremely Low Income Households and Very Low Income Households.
In connection with the LMIHAF Acquisition Loan,a Notice ofAf7ordability Restrictions on'I'mnsfer
of Property was also recorded in the Official Records on January 29. 2020 as Instrument No.
2020000038046(`Notice of Restrictions"). The Acquisition Loan Agreement provided that, ifthe
City, Authority and Owner enter into an Affordable Housing Agreement, then the Agreement
Containing Covenants wil I be replaced and superseded by an amended and restated agreement setting
forth the specific affordability requirements for the Property and the Notice of Restrictions will be
replaced and superseded by a new notice, each of which will be recorded at the Construction
Financing Event for the Project.
Section 102 Purpose of this Agreement
The City, the Authority, and Owner wish to set forth the terms and conditions for Owner's
payment of a portion of the principal amount ofthe Inclusionary Acquisition Loan and Owner's
payment in full ofthe LMIHAF Acquisition Loan and to set forth the terms and conditions fora new
loan from the City of HOME Investment Partnerships Program ("HOME Program") funds in the
amount of Two Million Eight Hundred Thirty Thousand Six Hundred Ninety-Seven Dollars
($2,830,697) (the"HOME Loan")to pay costs ofthe acquisition and development of the property
located at 18431 Beach Boulevard,Huntington Beach,California(as shown on the Site Map attached
as Attachment No. I and more specifically described in Attachment No. 2, the "Property"), in
accordance with the terms and conditions ofthis Agreement. The loan will assist the development of
the Property and its use as an affordable residential rental development for extremely low and very
low income households,consisting of43 units, including one manager unit.The project includes 42
one-bedroom units and I two-bedroom manager unit,together with ancillary facilities,as described
in more detail in the Scope of Development attached as Attachment No. 3 (the "Project"). One
hundred percent(100%)ofthe units,except for the I two-bedroom manager unit,will be operated as
affordable rental housing under regulatory agreements required by the financing for the Project,and a
portion of the units in the number required for compliance with the HOME Regulations(determined
in accordance with Section 92.250 ofthe HOME Regulations)will be designated as HOME-assisted
units to be rented to HOME Very Low Income tenants at HOME Rent, as set forth in the 1-10ME
Regulatory Agreement. The development ofthe Project and use of the Property pursuant to this
Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests ofthe
City of Huntington Beach and the health, safety, morals, and welfare of its residents, and in accord
with the public purposes and provisions of the HOME Regulations and applicable federal,state,and
local laws and requirements.
Section 103 Conditional Commitment
a. This Agreement does not constitute a commitment of funds or site approval,and the
commitment of funds or approval may occur only upon satisfactory completion of environmental
review and receipt by the City of an approval of the request for release of funds and certification
from the U.S. Department of Housing and Urban Development under 24 CFR Part 58.The provision
of any Hinds to the project is conditioned on the City's determination to proceed with, modify or
cancel the project based on the results of the environmental review. Owner must not undertake or
unconditionally commit any funds to physical or choice-limiting actions, including property
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 2
acquisition in addition to the Property previously acquired by Owner. demolition, movement,
rehabilitation,conversion. repair or construction prior to the environmental clearance. A violation of
this provision may result in the denial of any funds under this Agreement.
Section 104 Definitions
For purposes of this Agreement,the following capitalized terms not defined elsewhere in this
Agreement shall have the following meanines:
"Affiliate" means (1) any Person directly or indirectly controlling. controlled by or under
common control with another Person: (2) any Person ownin' or controlling ten percent (10%) or
more of the outstanding voting securities of such other Person; or Q) if that other Person is an
officer. director. member or partner, any company for which such Person acts in any such capacity.
The term"control"as used in the immediately preceding sentence,shall mean the powerto direct the
mana_ement or the power to control election of the board of directors. It shall be a presumption that
control with respect to a corporation. limited liability company or limited partnership is the right to
exercise or control, directly or indirectly, more than fifty percent (50%) of the voting rights
attributable to the controlled corporation, limited liability company or limited partnership.and,with
respect to any individual. partnership, trust, other entity or association. control is the possession.
indirectly or directly. of the power to direct or cause the direction of the management or policies of
the controlled entity.
"Affordable Rent" means the lesser of the FIOMF Rent (if applicable to the unit) and the
Inclusionary Rent for that unit.
"Affordable Units" means the Inclusionary Units and the HOME: Units.
"Amended and Restated Covenants" means the Amended and Restated Agreement
Containing Covenants (Including Rental Restrictions) substantially in the form attached to this
Agreement as Attachment No. 15. which will replace and supersede the Agreement Containing
Covenants dated as of.lanuary 28. 2020 and recorded in the Official Records on January 29. 2020 as
Instrument No. 2020000038642.
"Amended and Restated Notice of Restrictions")means the Amended and Restated Notice
of Affordability Restrictions Upon Transfer of Property substantially in the forni attached to this
Agreement as Attachment No. 16. which will replace and supersede the Notice of Affordability
Restrictions Upon Transfer of Property recorded in the Official Records on January 29, 2020 as
Instrument No. 2020000038046.
"Approved Title Conditions" means title that is subject only to current property taxes and
assessments and any easements and other encumbrances specifically approved in writing by the City
Manaaer.
"Area Median Income" means the area median income for Orange County as published
annually by Calilomia's Flouring and Community Development Department pursuant to Health and
Safety Code section 50093.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 3
"Assignment of Agreements"means an instrument substantially in the form attached to this
Agreement as Attachment No. 12.
"Bond Construction Loan" means a loan of construction funds from in
the original principal amount of$14,000,000, funded with proceeds of the Bonds.
"Bond Permanent Loan" means a loan of permanent funds from [ ] in the
original principal amount of$3. 812.690, funded with proceeds of the Bonds.
"Bonds" shall mean the mortgage revenue bonds to be issued for the Project by the
California Housing Finance Agency as described in the Method of Financing.
"City Manager" means the City Manager of the City of Huntington Beach, or dcsi,,nee.
"Closing" means the point in time when (i) all conditions precedent to the Closing as set
forth in this Agreement, including the Method of financing,have been satisfied;and(ii)the HOME
Loan Documents and HOME Regulatory Agreement and the IneIUSionary Loan Documents and
Amended and Restated Covenants are executed(and recorded against the Property as applicable) in
accordance with all of the terms and conditions of this Agreement.
"Closing Date" means the date on which the Closing is scheduled to take place.
"Completion' means the point in time when all of the following shall have occurred:
(I) issuance of a certificate of occupancy by the City of Huntington Beach for the Project;
(2) recordation ofa Notice of Completion by Owner or its contractor forthe Project;(3) certification
by the project architect that construction of the Project (with the exception of minor "punchlist"
items) has been completed in a good and workmanlike manner in accordance with the approved
plans and specifications: (4) payment,settlement or other extinguishment,discharge, release,waiver,
bonding or insuring against of all mechanic's liens that have been recorded or stop notices that have
been delivered for the Project; (5) the Project has been constructed in accordance with this
Agreement.the Scope of Development and Plans approved by the City in its independent regulatory
capacity and in its capacity as lender pursuant to this Agreement; (6) Owner has submitted all
documentation of the final Development Costs; and (7) Owner has submitted to the City the
information needed by the City to complete the Rental Set Up and Completion Form — HOME
Program required by HUD.
"Development Costs" means all costs which are actually incurred by Owner for the
acquisition of the Property and the financing, development and construction of the Project, and
includes, without limitation,all of the items of cost set forth in the Project Budget and similar costs,
fees and expenses approved by the City Manager, but not including Operating Costs as defined in the
HOME Note.
"Environmental Indemnity"means an instrument substantially in the form attached tothis
Agreement as Attachment No. 13.
"Escrow Agent" means First American Title Insurance Company or another escrow agent
mutually acceptable to the City and Owner.
AFFORDABLE HOUSING AGREEMENT
131-ACI-I HOUSING PARTNERS LP
PAGE 4
"Extremely Low Income" means persons and families whose income, determined in
accordance with section 6914 of Title 25 of the Calif amia Code of Regulations,does not exceed the
income limits for Extremely Low Income households in Orange County, adjusted for family sire.
published approximately annually by California's (lousing and Community Development
Department. If California's Housing and Community Development Department discontinues
publishing such income limits, the term "Extremely Low Income" shall mean a household income
that does not exceed 30% of the Area Median Income, adjusted for family size.
"Force Majeure Event" has the meaning set forth in Section 602a.
"Hazardous Materials' has the meaning set forth in the Environmental Indemnity.
"HOME Deed of Trust"means the deed of trust securing the HOME Loan, to be recorded
against the Property upon the Closing substantially in the form attached to this Agreement as
Attachment No. 9.
"HOME Loan"means the loan by the City to Owner in the amount and pursuant to the terms
and conditions of this Agreement, which shall be evidenced by the I-IOilv1Pi Note and Secured by the
HOME Deed of Trust and the other HOME Loan Documents. The HOME Loan shall be funded
from the City's allocation of federal HOME Program funds.
"HOME Loan Documents"means the 1 IOME Notc. HOME Deed of Trust. Assignment of
Agreements. and Environmental Indemnity.
"HOME Note"means n the promissory note evidencing the HOME Loan substantially in the
form attached to this Agreement as Attachment No. 8.
"HOME Regulations" means 24 CPR Part 92, as amended from time to time.
"HOME Regulatory Agreement' means the Agreement Containing HOME Program
Requirements to be recorded upon the Closing,substantially in the form attached to this Agreement
as Attachment No. 7.
"HOME Rent" means maximum rents for the HOME Units to be restricted to Low HOME
Income households. including a reasonable utility allowance for utilities and services (excluding
telephone). that meets either(a) or (b) of the following rent requirements:
(a) The rent does not exceed the lesser of(1)30 percent of the annual income ofa
family whose income equals 50 percent of the median income for the area,as determined by
HUD. with adjustments for smaller and larger families, as provided by I-IUD; (2) the fair
market rent for existing housing for comparable units in the area as established by HUD
under 24 CPR 888.1 1 1; or(3) 30 percent of the adjusted income ofa family whose annual
income equals 65 percent of the median income for the area. as determined by I-IUD. with
adjustments for the number of bedrooms in the unit; or
(b) The rent does not exceed 30 percent of the family's adjusted income. If the
Unit receives I-ederal or State project-based rental subsidy and the Very Low Income family
pays as contribution toward rent an amount that is not more than 30 percent of the family's
AFI.ORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNI-RS LP
PAGE 5
adjusted income. then the maximum rent (i.e., tenant contribution plus project-based rental
subsidy) is the rent allowable under the Federal or State project-based rental subsidy
program.
,*HOME Units" means the HOME.-assisted units described in the HOME Regulatory
Agreement, which units are a subset of and included in the Inclusionary Units and which units must
be rented and available to households with incomes that do not exceed Low I TOME Income at rents
that do not exceed HOME Rents.
"HUD" means the United States Department of Housing and Urban Development.
"Improvements"means the improvements to be constructed on the Property in accordance
with this Agreement. including but not limited to the Scope of Development.
"Inclusionary Deed of Trust"means the deed of trust securing the Inclusionary Loan.to be
recorded against the Property upon the Closing substantially in the form attached to this Agreement
as Attachment No. 11.
"Inclusionary Loan" means a loan of Affordable Housing Trust Funds from the City to
Owner in an amount equal to the unpaid principal balance ofthe Inclusionary Acquisition Loan plus
the unpaid interest accrued on the Inclusionary Acquisition Loan from January 29,2020 through the
Closing.
"Inclusionary Loan Documents"means the Inclusionary Note. Inclusionary Deed of Trust,
Assignment of Agreements. and Environmental Indemnity.
"Inclusionary Note" means the promissory note evidencing the Inclusionary Loan
substantially in the form attached to this Agreement as Attachment No. 10.
`Inclusionary Rent' has the meanim, set forth in California Health and Safety Code section
50053(b)(1) for Extremely Low Income households and section 50053(b)(2) for Very Low Income
households. The parties have agreed that rents for the Inclusionary Units will not exceed the
respective amounts set forth in the Amended and Restated Covenants.
"Inclusionary' Units' means the forty-two (42) units that must be rented and available to
Extremely Low Income and Very Low Income households at Inclusionary Rents.
"Investor Limited Partner" collectively refers to the entities identified as the "Limited
Partner' and "Special Limited Partner"(ifany) in Owner's Limited Partnership Agreement and the
related contribution agreement, and their successors and assigns.
"Legal Description"means the legal description of the Property attached to this Agreement
as Attachment No. 2.
"Low HOD1E Income' means household income that does not exceed 50% of the area
median income adjusted for household sire,as determined annually by the United States Department
off-lousing and Urban Development.
AFFORDABLE EIOUSINGAGREEMEN"f
BEACH HOUSING PARTNERS LP
PAGE. 6
"Managing General Partner"means the managing general partner ofthe Owner.which will
be Jamboree Flo using Corporation. unless and until removed or replaced pursuant to the terms ofthis
Agreement and Owner's Limited Partnership Agreement.
"NPLH Loan" means a loan of No Place Like Home funds from Oram-,e County Housing
and Community Development to Owner in the original principal amount of S5.875,538.
`'OCHFT Loan"means a loan of Orange County Housing Finance"trust Funds from Orange
Count), Housing and Community Development to Owner in the original principal amount of
$1.900.000.
"Owner"means Beach Housing Partners LP,a California limited partnership,ora permitted
assignee or nominee.
"Owner's Limited Partnership Agreement" means that certain Amended and Restated
Agreement of Limited Partnership by and between the Managing General Partner and the Investor
Limited Partner dated on or around the Closing Date.
"Permitted Transfer" means any of the following:
a. An assignment of this Agreement and all of Owner's interests in the Property to an
Affiliate or a conveyance back from the Affiliate to Owner;
b. A conveyance of a security interest in the Property or any portion thereof or interest
therein in connection with a Senior Loan or any refinancing of any such Senior Loan
that does not increase the outstanding principal balance of the Senior Loan or impose
an interest rate greater than the prevailing rate of interest for similar refinancing
loans. require a balloon payment or change the loan's maturity date, or the
conveyance oftitle to the Property or Project in connection with a foreclosure,a deed
in lieu of foreclosure or similar conversion of such loan:
C. The inclusion of equity participation by Owner by addition of limited partners or
similar mechanism, and any transfers of limited partnership interests in Owner;
d. The pledge by a General Partner to the Investor Limited Partner of the General
Partner's interest in Owner, as security for the performance of all of the General
Partner's obligations under the Limited Partnership Agreement.
e. the sale, transfer or pledge of a limited partnership interest in Owner or of a
partnership interest in the Investor Limited Partner.
F. The lease for occupancy of all or any part of the improvements on the Property;
g. The granting of easements or permits to facilitate the development of-the Property in
accordance with this Agreement;
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 7
h. The withdrawal,removal and/or replacement of general partner ofOwner pursuant
to the terms of Owner's Limited Partnership Agreement, or a transfer ofa general
partner's interest to the limited partner pursuant to the option provided to it in
connection with Owner's Limited Partnership Agreement, or a conveyance of
Owner's interest in the Property and the improvements or a transfer of limited
partnership interests to a general partner pursuant to the option provided to that
partner in Owner's Limited Partnership Agreement, will not constitute a default
under this Agreement or any of the HOME Loan Documents or Inclusionary Loan
Documents. nor will such actions accelerate the maturity of the HOME Loan or
Inclusionary Loan,provided that any required substitute general partner is reasonably
acceptable to City, as evidenced by the City's written consent, and is selected with
reasonable promptness(except that no such consent shall be required if the substitute
general partner is an Affiliate ofthe Investor Limited Partner);
i. Any dilution ofa General Partner's interest in Owner in accordance with Owner's
Limited Partnership Agreement
j. The transfer of all or any part of the Project or Property to Jamboree Housing
Corporation,or an entity controlled by Jamboree Housing Corporation,or an entity in
which Jamboree Housing Corporation is a general partner or managing member;
k. A transfer otherwise approved in writing by the City Manager or designee, at his or
her sole discretion.
"Person" means an individual, partnership, limited partnership, trust, estate, association,
corporation, limited liability company or other entity, domestic or foreign.
"Plans" means the architectural and construction plans and drawings prepared on behalf of
Owner for the Project in accordance with this Agreement.
"Project" means the financing, planning, construction and use of the Property and the
improvements as described in this Agreement.
"Property" means the real property described in Attachment No. 2.
"Schedule of Performance" means the document attached to this Agreement as Attachment
No. 4.
"Scope of Development"means the document attached to this Agreement as Attachment No.
3.
"Senior Lender" means the maker of a Senior Loan.
"Senior Loan" means such loans as the City reasonably determines are necessary to be senior
in priority to the HOME. Loan and the Inclusionary Loan. With regard to the HOME Loan, the term
"Senior Loan" includes the Bond Construction Loan, the Bond Permanent Loan, the N111-I-1 Loan.
AFFORDABLE HOUSING AGRL'EMEN'r
BEACH HOUSING PARTNERS LP
PAGE 8
and the SNHP Loan,as described in the Method of Financing. With regard to the I tic I us in nary Loan.
the term "Senior Loan" includes the Bond Construction Loan,the Bond Permanent Loan,the NPLI-I
Loan, the SNHP Loan, the HOME Loan, and the OCI-ii-T Loan.
"Senior Loan Documents" means the loan agreements. promissory notes, financing
statements,guaranties,security agreements.assignments, and similar documents and instruments to
be executed by Owner in connection with a Senior Loan.
"Site Map" means the document which is attached to this Agreement as Attachment No. 1.
"SN11P Loan" means a loan of Spccial Needs Housing Program funds from the California
Housing Finance Agency to Owner in the original principal amount of$3,603.160.
"Subordination Agreement"means an instrument in a form approved by the City Manager
or designee,subordinating the lien of the HOME Loan and the Inclusionary Loan(but not the HOME
Regulatory Agreement or Amended and Restated Covenants) to a Senior Loan.
"Title Company"means First American Title Insurance Company or another title insurance
company mutually acceptable to the City and Owner.
"Transfer' means:
a. the sale, agreement to sell, transfer or conveyance of the Property.the Project,or any
portion thereof or interest therein (including. without limitation, a beneficial interest). whether
voluntary, involuntary, by operation of law or otherwise, the execution of any, installment sale
contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all
or substantially all of the Property or Project.
b. `'transfer" also includes the transfer, assignment, hypothecation or conveyance of
legal or beneficial ownership ofany interest in Owner, or any conversion of Owner to an entity form
other than that of Owner at the time ofexecution ofthis Agreement,except that.a cumulative change
in ownership interest of any general partner of Owner of forty-nine percent(49%)or less will not be
deemed a `'transfer" for purposes of this Agreement.
C. Notwithstanding paragraphs a and b,`'transfer"will not include Permitted Transfers.
"Very Low Income" means persons and families whose income,determined in accordance
with section 6914 of Title 25 of the California Code of Regulations, does not exceed the income
limits for Very Low Income households in Orange County, adjusted for family size. published
approximately annually by California's Housing and Community Development Department. If
California's Housing and Community Development Department discontinues publishing such
income limits, the term "Very Low Income' shall mean a household income that does not exceed
50% of the Area Median Income, adjusted for family size.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 9
"Waiver and Concession Agreement' means an agreement between the City and Owner
substantially in the form attached to this Agreement as Attachment No. 14,which sets forth the terms
and conditions for certain waivers and concessions requested by Owner under Government Code
section 65915.
Section 105 The Prooertv
The "Property" is that certain property in the City of Huntington Beach, illustrated on the
"Site Map" (Attachment No. 1) and as described in the "Legal Description of the Property"
(Attachment No. 2). Owner is the owner of fee title to the Property and will continue to own and
have control of the Property as of the Closing.
Section 106 City
a. The City is a municipal corporation, organized and existing under the laws of the
State of California and the Huntington Beach Municipal Code.
b. The address of the City for purposes ofreceiving notices pursuant to this Agreement
shall be c/o City Manager, City of Huntington Beach. 2000 Main Street, Huntington Beach,
California 92648.
C. "City"as used in this Agreement includes the City of Huntington Beach,California.
and any assignee or successor to its rights, power and responsibilities.
Section 107 Owner
a. The Owner is Beach Housing Partners LP, a California limited partnership.
b. Jamboree Housing Corporation, a California nonprofit public benefit corporation
("Jamboree") is a Community Housing Development Organization(CH DO")and either Jamboree
or an affiliate of Jamboree will serve as Owner's managing general partner. The Project is eligible
for HOME funds that are reserved for CHDOs because of Jamboree's affiliation with the Project.
C. The address of Owner for purposes of receiving notices pursuant to this Agreement
shall be c/o Jamboree Housing Corporation, 17701 Cowan. Suite 200. Irvine, California 92614,
Attention: Michael Massie, Chief Development Officer, with a copy to: Rutan K Tucker.
18575 Jamboree Road, 9th Floor, Irvine, California 92612. Attn: Patrick D. McCalla. Iisq.
C. Copies of notices to Owner will be delivered at the same time to the Investor Limited
Partner at the address provided by Owner to the City.
d. Whenever the term "Owner"is used herein.such term shall mean and include:(I)the
Owner as of the date hereof-, and (2) an assignee of or successor to its rights, powers and
responsibilities permitted by this Agreement.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 10
Section 108 Assignments and Transfers
a. Owner represents and agrees that its undertakings pursuant to this Agreement
are for the purpose ofdeveloping and operating the Project and providing affordable housing on the
Property and not for speculation in land holding. Owner further recognizes that the qualifications
and identity of Owner arc of particular concern to the City, in light of the following: (1) the
importance of the improvement of the Property to the general welfare of the community; (2) the
public assistance that has been made available by law and by the City for the purpose ofmaking such
development possible: and (3) the fact that a change in ownership or control of Owner or any other
act or transaction involving or resulting in a significant change in ownership or control ofOwner, is
for all practical purposes a transfer or disposition of the property then owned by Owner. Owner
further recognizes that it is because of such qualifications and identity that the City is entering into
this Agreement with Owner. Therefore. no voluntary or involuntary successor in interest of Owner
shall acquire any rights or powers under this Agreement except as expressly set forth herein.
b. For the reasons cited above.Owner represents and agrees for itself and every
successor in interest that prior to the full reconveyance of" the HOME Deed of Trust and the
Inclusionary Deed of Trust.other than in connection with a foreclosure, a deed in lieu of foreclosure
or similar conversion of a Senior loan; Owner shall not assign all or any part of this Agreement,or
any interest herein. without the prior written approval of the City; provided, however, that with
respect to Permitted Transfers, Owner shall provide notice to City of any Permitted Transfer, and
shall provide to City documentation for City's files effectuating any such assignment or transfer.
C. For the reasons cited above.Owner represents and agrees for itself and every
successor in interest that prior to the full reconvcyancc of the HOME Deed of Trust and the
Inclusionary Deed of Trust, without the prior written approval of the City, there shall be no
significant change in the ownership of Owner or in the relative proportions thereof,or with respect to
the identity of the parties in control of Owner or the degree thereof. by any method or means,except
Permitted Transfers.
d. Any assignment or transfer of this Agreement or any interest herein or
significant change in ownership of Owner,other than a Permitted Transfer,shall require the approval
of"the City. which may be withheld in its sole and absolute discretion. To the extent the City's
approval of an assignment or transfer is required by this Agreement, in granting or withholding its
approval, the City shall base its decision upon the relevant experience, financial capability and
reputation ofthc proposed assignee or transferee,and the effect. ifany,of such proposed transfer on
the public purposes of this Agreement. In addition,the City shall not have any obligation to approve
any assignment or transfer of this Agreement, or any interest herein, or significant change in
ownership of Owner that would result in payment of consideration to any Person from the net
proceeds of a sale or refinance of the Property or the Project, or any portion thereof or
interest therein. if at the time of such assignment or transfer there remains an outstanding
balance on the fIONIE Note or Inclusionary Note.
C. Owner shall promptly notify the City ofany and all changes whatsoever in the
identity of the parties in control of"Owner or the degree thereof,of which it or any of its ofl icers have
been notified or otherwise have knowledge or information. This Agreement may be terminated by
the City if there is any significant change(voluntary or involuntary) in membership.management or
control,of Owner(other than such changes occasioned by the death or incapacity ofany individual)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE I 1
prior to the full reconveyance of the HOME Deed of Trust and the Inclusionary Deed of Trust, if'
such change is not a Permitted Transfer.
f. The restrictions of'this Section 108 shall terminate upon full reconveyance of'
the HOME Deed of Trust and the Inclusionary Deed of Trust.
PART 2. FINANCING
Section 201 Method of Financing
Owner will develop the Project with financing as provided in the Method of Financing
attached as Attachment No. 6. Owner is responsible for all additional costs to complete the
development of the Project pursuant to this Agreement and the Scope of Development. Owner
hereby warrants and agrees that the HOME Loan to be disbursed pursuant to this Agreement shall be
used by Owner solely for the purpose of paying a portion of the Development Costs for the
Affordable Units and for no other purpose.
Section 202 HOME Loan
a. In accordance with and subject to the terms and conditions of this Agreement,
including the Method of Financing, the City agrees to lend to Owner. and Owner agrees to borrow
from the City. the HOME Loan. At or prior to the Closing. the City and Owner shall execute and
deliver such instruments and documents as may be necessary to evidence and secure the HOME
Loan, consistent with the terns of this Agreement, each substantially in the form attached to this
Agreement.
b. The HOME Loan shall be disbursed based on vouchers for actual expenses incurred
or paid. Requests for payment must be submitted by Owner on forms specified by the City. with
adequate and proper documentation ofeligible costs incurred in compliance with 24 CI-R 92.206 and
necessary for HUD IDIS disbursement requirements.The HOME Loan shall be disbursed pursuantto
a detailed schedule approved in writing by the City Manager in his or her reasonable discretion. and
based upon City's receipt of invoices and other information and documentation (e.g., lien releases)
requested or reasonably required by the City Manager. "fhe City shall have the right to condition any
disbursement upon receipt and reasonable approval of such documentation,evidence or information
that the City may reasonably request, including, but not limited to, vouchers, invoices, and
architect's, inspector's and/or engineer's periodic certifications of'the percentage and/or stage of
construction that has been completed.
C. If any portion of the FIOME Loan is to be used for payment ofconstruction costs,then
disbursements shall be made upon Applications for Payment and shall be subject to a ten percent
(10%) retention. The City shall have the right in its sole discretion to make disbursements of funds
directly to third parties entitled to such payment. Owner may submit a final invoice upon
Completion. Final payment, including retention previously withheld. shall be made upon
Completion.
d. The City shall have the right to review and audit all records of Owner pertaining to
any payment by the City. Said records shall be maintained for a period of' five years after
Completion.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 12
C. Each of the HOME Loan Documents and Inclusionary Loan Documents, but not the
HOME Regulatory Agreement or the Amended and Restated Covenants,will be subordinate to: the
lien created by a Deed of Trust securing a Senior Loan; provided,that the Subordination Agreements
contain written commitments reasonably designed to protect the City's investment in the event of a
default. Such written commitments will provide for one or more of the following rights: (i)a right to
cure a default on the senior loan:(ii)a right to negotiate with the senior lender after notice of default
and prior to senior lender commencing foreclosure proceedings: (iii) a right to purchase Owner's
interest in the Property and ['reject at anv time after a default on the senior loan: and/or (iv) an
agreement that if prior to foreclosure of the senior loan, the City takes title to the Owner's interest in
the Property and Project and cures the default on the senior loan, the senior lender will not exercise
any right it may have to accelerate the senior loan by reason ofthe transfer oftitle to the City. At the
Closing, the City Manager or designee will execute a subordination agreement in a form that is
consistent with applicable laws and regulations governing subordination of City loans and mutually
acceptable to the City Manager or designee, the applicable senior lender, and Owner to subordinate
the HOME Loan Documents and the Inclusionary Loan Documents, but not the HOME Regulatory
Agreement or the Amended and Restated Covenants, to the senior Deed of Trust and other Senior
Loan documents.
f. Prior to Closing, the City Manager may,and is hereby authorized to,determine that, if
there is a foreclosure of a Senior Loan or if Owner no longer receives some or all of the rental
subsidy payments that were committed to the Project at Closing. then following such foreclosure or
loss of subsidy, some portion of the Inclusionary Units would be rented to persons and families with
household incomes greater than Extremely Low Income or Very Low Income at Rents that exceed
Inclusionary Rent. The City Manager shall base his or her determination on Owner's demonstration
to the City Manager's reasonable satisfaction that, in order to obtain the necessary financing for
payment of Development Costs, such an adjustment to Inclusionary Units' affordability will be
required. The City Manager will consider appropriate factors such as, but not limited to, the
underwriting standards used by Senior Lender(s), the availability of operating reserves. Owner's
Financial capability,and the continuance ofaffordability restrictions imposed by other lenders to the
Project. If the City Manager determines, in his or her reasonable discretion, that it is necessary to
allow the affordability ofa portion of the Inclusionary Units to be adjusted in the event of foreclosure
of a Senior [..can or the loss of rental subsidy payments, then the Amended and Restated Covenants
attached to this Agreement as Attachment No. 15 will be revised at Closing to incorporate
appropriate language that is acceptable to the City. the Authority. Owner, and the Senior Lenders.
including a description ofthc circumstances that would trigger a change in affordability,the number
of"Inclusionary Units that would be affected, and the maximum household income and maximum
Rents to be imposed following a foreclosure or a loss of rental subsidy. The affordability of the
HOME: Units under the HOME Regulatory Agreement attached to this Agreement as Attachment
No. 7 will be determined at Closing and will not be subject to change.
PART 3. IMPROVEMENT OF THE PROPERTY
Section 30f Land Use Approvals
It is the responsibility of Owner, without cost to the City, to ensure that zoning of the
Property and all applicable City of Huntington Beach land use requirements will be such as to permit
construction and completion of the Project and the use, operation and maintenance of the Project in
accordance with the provisions of this Agreement. The review and approval rights set forth in this
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Part 3 are for the benefit of the City acting in its capacity as a lender to the Project. and will not be
deemed to waive, limit or condition in any way the power and authority of the City of Huntington
Beach. acting in its governmental capacity. Nothing contained herein shall be deemed to entitle
Owner to any City of Huntington Beach permit or other City land use approval necessary for the
development of the Property. or waive any applicable governmental requirements relating thereto.
This Agreement does not (a) grant any land use entitlement to Owner, (b) supersede, nullify or
amend any condition which may be imposed by the City of Huntington Beach in its governmental
capacity in connection with approval of the improvements described herein.(c)guarantee to Owner
or any other party any profits from the development of the Property, or (d) amend any City laws,
codes or rules. This is not a Development Agreement under Government Code Section 65864.
Section 302 Condition of the Property
a. In making the HOME Loan,the City makes no representation or warranty,express or
implied regarding any condition of the Property. It shall be the sole responsibility of Owner, at
Owner's expense, to investigate and determine all conditions of the Property and its suitability for
the uses to which the Property is to be put in accordance with this Agreement. If the conditions of
the Property are not in all respects entirely suitable for the use or uses to which the Property will be
put. then it is the sole responsibility and obligation of'Owner. without cost to the City. to take such
action as may be necessary to place the Property in all respects in a condition entirely suitable for its
development and use in accordance with this Agreement.
b. Owner agrees to perform and be solely responsible for all required clean-up of any
Hazardous Materials on, in, under or within the Property.at the sole cost.risk and expense of Owner.
Owner shall defend, indemnify and hold harmless the City and the Indemnified Parties from any
claims, liability, injury, damages. costs and expenses (including, without limiting the generality of
the foregoing, the cost of any required clean up of 1-iazardous Materials, and the cost of reasonable
attorneys' fees) which may be sustained as the result of the presence or clean up of Hazardous
Materials on. in. or under the Property. As a condition precedent to the Closing, Owner shall
execute and deliver to the City the Environmental Indemnity attached hereto as Attachment No. 13.
Section 303 Scope of Development
The Property shall be developed in accordance with and within the limitations established in
the Scope of Development attached to this Agreement as Attachment No. 3. Owner shall carry out
the development and management of the Property in conformity with all applicable requirements of
the HOME Program.
Section 304 Basic Concept and Schematic Drawings
a. Owner shall prepare and submit Basic Concept and Schematic Drawings and related
documents for the improvements to the Property to the City for review and written approval within
the time established in the Schedule of Performance. Basic Concept and Schematic Drawings shall
include a site plan, elevations and sections of the improvements as they are to be developed on the
Property.
b. The Property shall be improved as established in the Basic Concept and Schematic
Drawings and related documents, except as changes may be mutually agreed upon between Owner
and the City. All such changes shall be within the limitations of the Scope of Development.
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Section 305 Landscaping and Grading Plans
a. Owner shall prepare and submit to the City for its approval preliminary and final
landscaping and preliminary and finish grading plans for the Property. The plans shall be prepared
and submitted within the times established in the Schedule of Performance.
b. The landscaping plans shall be prepared by a professional landscape architect and the
grading plans shall be prepared by a licensed civil engineer. Such landscape architect and/or civil
engineer may be the same firm as Owner's architect. Within the times established in the Schedule of
Performance, Owner shall submit to the City for approval (such approval not to be unreasonably
withheld,conditioned or delayed)the name and qualifications of its architect, landscape architect and
civil engineer.
Section 306 Construction Drawings and Related Documents
a. Owner shall prepare and submit construction drawings and related documents
(collectively called the "Plans") to the City for review (including but not limited to architectural
review), and written approval in the times established in the Schedule of Performance. Such
construction drawings and related documents shall be submitted as 50% and Final Construction
Drawings. Final Construction Drawings are hereby defined as those in sufficient detail to obtain all
building permits.
b. The Plans must comply with the applicable requirements of the Architectural
Barriers Act of 1968 (42 U.S.C. 4151-4157) and the applicable requirements of"title III of the
Americans with Disabilities Act of 1990(42 U.S.C. 12131 et sec.), and federal regulations issued
pursuant thereto.
C. Approval of progressively more detailed Plans will be granted by the City if"
developed as a logical evolution of" Plans theretofore approved. Any items so submitted and
approved by the City shall not be subject to subsequent disapproval.
d. During the preparation of all Plans, the City and Owner shall hold regular progress
meetings to coordinate the preparation of, submission to,and review of Plans and related documents
by the City. The City and Owner shall communicate and consult informally as frequently as is
necessary to facilitate the prompt consideration of'documents submitted to the City.
C. If any revisions or corrections of Plans approved by the City in its capacity as lender
to the Project shall be required by any government official, agency, department, or bureau having
jurisdiction over the development of the Property. Owner and the City shall cooperate in efforts to
obtain waiver of such requirements or to develop a mutually acceptable alternative.
Section 307 Citv Approval of Plans
a. Subject to the terms of this Agreement. the City shall have the right of review
(including without limitation architectural review) of all Plans and submittals, including any
proposed substantial changes to any such Plans or submittals previously approved by the City. The
City shall approve or disapprove the Plans referred to in Sections 304. 305 and 306 of this
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BEACH HOUSING PARTNERS LP
PAGE 15
Agreement within the times established in the Schedule of Performance. Owner, upon receipt of a
disapproval, shall revise the Plans, and shall resubmit to the City as soon as possible after receipt of
the notice of disapproval. The City shall approve or disapprove, in its reasonable discretion, the
revised Plans within twenty(20) days after receipt. Disapprovals shall state in writing the reasons
for disapproval and changes to submitted Plans which the City determines must be made in order to
obtain approval. Such reasons and such changes shall be consistent with the Scope of Development
and all items previously approved hereunder. The City's failure to notify Owner of approval or
disapproval within twenty (20) days shall not be deemed to be approval of any matter.
b. If Owner desires to make a substantial change in the Final Construction Drawings
after their approval, such proposed change must be submitted to the City for approval, which
approval the City will not unreasonably withhold, condition, or delay.
Section 308 Cost of Construction
a. The development costs of the Project, including all offsitc or onsite improvements
required by the City in connection therewith, and the cost of relocation claims (if any) shall be the
responsibility of Owner,without any cost to the City except as expressly set forth in this Agreement.
b. Owner will establish procurement procedures to ensure that materials and services are
obtained in a cost-effective manner. When procuring forgoods and services to be provided under this
Agreement, Owner will comply with the procurement standards at 2 CFR Part 200 §200.318 -
§200.326.
Section 309 Schedule of Performance
a. Each party to this Agreement shall perform the obligations to be performed by such
party pursuant to this Agreement within the respective times provided in the Schedule of
Performance, and if' no such time is provided, within a reasonable time. The Schedule of
Performance shall be subject to amendment from time to time upon the mutual agreement ofthe City
Manager and Owner.
b. After the Closing.Owner shall promptly begin and thereafter diligently prosecute to
completion the Project described in the Scope of Development and the Plans approved by the City.
Owner shall begin and complete all construction within the times specified in the Schedule of
Performance with such reasonable extensions of said dates as may be granted by the City Manager,
provided Owner has submitted a timely written request with substantiating documentation that
establishes good cause for such an extension, and provided such an extension will not have a
detrimental effect on the City's interests.
C. During periods ofconstruction,Owner shall submit to the City a written report of the
progress of construction when and as reasonably requested by the City, but not more frequently than
once every quarter. The report shall be in such form and detail as may be reasonably required by the
City and shall include a reasonable number ofconstruction photographs(if requested)taken since the
last report by Owner.
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Section 310 Indemnification and Insurance
a. Owner's Indemnitv. To the maximum extent permitted by law,Owner agrees to and
shall defend, indemnify and hold harmless the City and its officers, employees, contractors,
attorneys, agents, insurers and volunteers(the`Indemnified Parties") from and against all claims,
liabilities, losses, damages,costs or expenses(including reasonable attorneys' fees and court costs)
("Claims") arising from or as a result of the death of any person or any accident, injury, loss or
damage whatsoever caused to any person or the property of any person resulting or arising from or in
any way connected with the following, provided Owner shall not be responsible for (and such
indemnity shall not apply, to the extent any such Claims arise from the gross negligence or willful
misconduct of the City or the Indemnified Parties:
(1) The existence, release, presence or disposal on, in, under, about or
adjacent to the Property of any Hazardous Materials;
(2) The development,construction, marketing,use,operation or condition
of'the Property and the improvements thereon by Owner, its contractors, subcontractors, agents,
employees or other persons acting on Owner's behalf:
(3) Any accident, personal injury or casualty on the Property or the
improvements thereon;
(4) All Plans or designs for improvements prepared by or on behalf of
Owner or its contractors, subcontractors, agents, employees or other persons acting on Owner's
behalf; including without limitation all errors or omissions with respect to such Plans or designs:
(5) All loss or damage to City resulting from any material inaccuracy in or
material breach of any representation or warranty of Owner,or resulting from any material breach or
default by Owner, under this Agreement;
(6) Any and all actions,claims,damages, injuries,challenges and/or costs
or liabilities arising from the approval of any and all entitlements or permits for the Project.
The obligation to indemnify will not be construed to negate,abridge,or otherwise reduce other
rights or obligations of indemnity which would otherwise exist as to the Indemnified Parties. The
foregoing indemnification will apply to the extent of the violation of a legal duty, including but not
limited to active or passive negligence, strict liability, breach of contract, or intentional or willful
misconduct, by Owner or its contractors, suppliers, or vendors, of any contracting tier, or anyone
directly or indirectly employed by any of them, or anyone for whose acts Owner may be responsible.
The Indemnified Parties will be entitled to recover attorney's fees incurred as a result of Owncr's
failure to provide the defense and indemnity required by this Section 310. The foregoing indemnity
shall survive termination of this Agreement.
b. Insurance Policies.
(1) Commencing upon the Closing,and until the full reconveyance ofthe HOME
Deed of Trust and the Inclusionary Deed of Trust, Owner shall maintain in effect and deliver to the
City duplicate originals or appropriate certificates of the following insurance policies (the
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BEACH HOUSING PARTNERS LP
PAGE 17
"Insurance Policies`) naming the City and the Indemnified Parties as additional insureds or loss
payees. as their interests may appear:
(A) All-Risk Policies: Owner shall maintain or cause to be maintained
coverage of the type now known as All Risk insurance. Such insurance shall insure against direct
physical loss or damage by fire, lightning, wind, storm, explosion. collapse, underground hazards,
flood. vandalism. malicious mischief, glass breakage and such other causes as are covered by such
form of insurance. Such policy shall include (1) an endorsement for broad form property damage.
breach of warranty,demolition costs and debris removal. (2)a`Replacement Cost Endorsement' in
an amount Sufficient to prevent Owner from becoming a co-insurer under the terns of the policy,but
in any event in an amount not less than 100%of the then full replacement cost, to be determined at
least once annually and subject to reasonable approval by City, and (3) an endorsement to include
coverage for budgeted soft costs. The replacement cost coverage shall be for work performed and
equipment, supplies and materials furnished to the Property or any adjoining sidewalks, streets and
passageways,or to any bonded warehouse for storage pending incorporation into the work,without
deduction for physical depreciation and with a deductible not exceeding S25.000 per occurrence
(except that earthquake coverage, if required by the City,shall cam'a deductible not to exceed 25%
of the policy amount, or such other deductible amount as City may reasonably determine is
acceptable, in light of the cost of the premium for such insurance);
(B) Liability Insurance: Liabilitylnsurance: Owner will maintain or cause
to be maintained general liability insurance,to protect against loss From liability imposed by law for
damages on account of'personal injury, including death therefrom. suffered or alleged to be suffered
by any person or persons whomsoever on or about the Property and the business of Owner on the
Property,or in connection with the operation thereof. resulting directly or indirectly from any acts or
activities of Owner. or any person acting for Owner, or under its control or direction. and also to
protect against loss from liability imposed by law for damages to any property of any person
occurring on or about the Property, or in connection with the operation thereof, caused directly or
indirectly by or from acts or activities of Owner or any person acting for Owner, or under its control
or direction. Such property damage and personal injury insurance will also provide for and protect
the Indemnified Parties against incurring any legal cost in defending claims for alleged loss. Such
personal injury and property damage insurance will be maintained in full force and effect until
Completion of the Project in the following amounts: commercial general liability in a general
aggregate amount of not less than Two Million Dollars ($2.000,000). Products and Completed
Operations Aggregate of not less than Two Million Dollars ($2.000.000) and One Million Dollars
(S 1,000,000)each occurrence. Owner agrees that provisions of this paragraph as to maintenance of
insurance will not be construed as limiting in any way the extent to which Owner may be held
responsible for the indemnification ofthe Indemnified Parties or the payment of damages to persons
or property resulting from Owner's activities or the activities of any other person or persons for
which Owner is otherwise responsible.
(C) Automobile Insurance: During all times that Owner has owned
vehicles or has employees, then Owner will maintain or cause to be maintained Commercial
Automobile Liability insurance in an amount of not less than Three Million Dollars ($3.000.000)
combined single limit, including owned,non-owned and hired automobile coverage."These limits can
be provided by a combination of a primary Auto policy and Excess or Umbrella Liability policy
AFFORDABLE HOUSING AGREEMENT
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PAGE 18
(D) Workers' Compensation Insurance: During all times that Owner has
employees.Owner shall maintain or cause to be maintained workers'compensation insurance issued
by a responsible carrier authorized under the laws of the State of California to insure employers
against liability for compensation under the workers' compensation laws now in force in California.
or anv laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such
workers' compensation insurance shall coverall persons employed by Owner in connection with the
Property and shall cover liability within statutory limits for compensation under any such act
aforesaid,based upon death or bodily injury claims made by. for or on bchalfofany person incurring
or suffering injury or death in connection with the Property or the operation thereof by Owner.
Notwithstanding the foregoing. Owner may, in compliance with the laws of the State of Califomia
and in lieu of maintaining such insurance, self-insure for workers' compensation in which event
Owner shall deliver to City evidence that such sell' insurance has been approved by the appropriate
State authorities.
(2) All policies or certificates of insurance shall provide that such policies shall
not be canceled, reduced in coverage or limited in any manner without at least thirty(30)days prior
written notice to City. All fire and liability insurance policies (not automobile and Workers'
Compensation) shall name the City, the Indemnified Parties. and Owner as insureds, additional
insureds. and/or loss payable parties as their interests may appear.
(3) The Insurance Policies shall name as additional insureds the following:
'"The City of Huntington Beach and its officers. employees,
contractors, ascnts and attornevs."
(4) Owner agrees to timely pay all premiums for such insurance and, at its sole
cost and expense,to comply and secure compliance with all insurance requirements necessary for the
maintenance of such insurance. Owner agrees to submit endorsements and binders or certificates
evidencing such insurance to City at least 15 days prior to the Closing. Within thirty (30) days, if
practicable, but in any event prior to expiration of any such policy, copies of renewal policies, or
certificates evidencing the existence thereof, shall be submitted to Citv. All insurance herein
provided for under this Section shall be provided by insurers licensed to do business in the State of
California and rated A-VII or better.
(5) Owner must cause all contractors and subcontractors performing work relating
to the Project to maintain insurance of the types and in the amount described in this Section 310. In
addition, Owner must cause its architects and engineers to maintain Architects and Engineers
Professional Liability (Errors and Omissions) insurance on a "claims made basis' in an amount of
not less One Million Dollars (51,000,000). When coverage is provided on a "claims made basis',
Owner must cause all contractors and subcontractors to continue to renew the insurance, with the
same coverage and limits, for a period often (10)years after Completion of the Project. providing
coverage for all claims arising out of any acts or omissions of Owner, or its officers, employees or
agents.
(6) If Owner fails or refuses to procure or maintain insurance as required by this
Agreement,City shall have the right, but not the obligation,at City's election,and upon ten(10)days
prior notice to Owner, to procure and maintain such insurance. The premiums paid by City shall be
treated as a loan, due from Owner, to be paid on the first day of the month following the date on
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGI 19
which the premiums were paid. City shall give prompt notice ofthe payment of such premiums.
stating the amounts paid and the name of the insured(s).
(7) Owner shall have the right in its discretion to provide the insurance coverage
required by this Section 310 through one or more umbrella policies, so long as the type and level of'
insurance protection to be maintained by Owner in accordance with this Section 310 is not
diminished by so doing (as reasonably determined by the City).
Section 31 1 Nondiscrimination
Owner shall not discriminate on the basis of race, gender,religion, national origin,ethnicity.
sexual orientation, age or disability in the solicitation, selection, hiring or treatment of any
contractors or consultants, to participate in subcontracting/subconsulting opportunities. Owner
understands and agrees that violation of this clause shall be considered a material breach of this
Agreement and may result in termination, debarment or other sanctions. This language shall be
incorporated into all contracts between Owner and any contractor, consultant, subcontractor,
subconsultants, vendors and suppliers.
Section 312 Local. State and Federal Laws
a. Owner hereby agrees to carry out construction,development(as clef incd by applicable
law) and operation ofthe improvements on the Property, including, without limitation, any and all
public works(as defined by applicable law), in conformity with all applicable federal and state labor
laws, including, without limitation if applicable, the pavmcnt of state prevailing wages for the
Project.Owner also covenants and warrants that it will comply with all applicable laws,ordinances.
codes, rules and regulations of the state local and federal governments, including, but not limited to;
Title 8 of the Civil Rights Act of 1968 PL.90-284; Executive Order 11063 on Equal Opportunityand
Housing Section 3 of the Housing and Urban Development Act of 1968; Housing and Community
Development Act of' 1974,as well as all requirements set forth in 24 CFR 92 ofthe HOME Program.
Owner agrees to comply with all applicable standards, orders,or requirements issued under section
306 ofthe Clean Air Act(42 U.S.C. 1857(h)),section 508 ofthe Clean Water Act(33 U.S.C. 1368).
Executive Order 11738.and Environmental Protection Agency regulations(40 CPR part 15).Owner
further warrants and agrees to include or cause to be included the criteria and requirements of this
paragraph in every non-exempt contract in excess of$100,000.
b. Owner hereby agrees that Owner shall have the obligation to provide any and all
disclosures,representations,statements, rebidding,and/or identifications which may be required by
Labor Code Sections 1726 and 1781, as the same may be enacted,adopted or amended from time to
time, or any other applicable provision of law. Owner hereby agrees that Owner shall have the
obligation to provide and maintain any and all bonds to secure the payment to contractors(including
the payment of wagges to workers performing any public work) which may be required by the Civil
Code, Labor Code Section 1781,as the same may be enacted,adopted or amended from time to time.
or any other applicable provision of law. Owner hereby agrees that Owner shall have the obligation.
at Owners sole cost, risk and expense, to obligate any party as may be required by Labor Code
Sections 1726 and 1781. as the same may be enacted,adopted or amended from time to time,or any
other applicable provision of law. Owner shall indemnify, protect. defend and hold harmless the
City and the Indemnified Parties, with counsel reasonably acceptable to City, from and against any
and all loss. liability,damage, claim, cost,expense, and/or"increased costs'(including labor costs,
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 20
penalties,reasonable attorneys fees.court and litigation costs,and fees of expert witnesses)which, in
connection with the construction,development(as defined by applicable law)and/or operation ofthe
Project, including,without limitation,any and all public works(as defined by applicable law),results
or arises in any way from any of the following: (1) the noncompliance by Owner of any applicable
local, state and/or federal law, including, without limitation,any applicable federal and/or state labor
laws (including, without limitation, the requirement to pay state prevailing wages); (2) the
implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted,adopted
or amended from time to time, or any other applicable law; (3) failure by Owner to provide any
required disclosure, representation,statement,rebidding and/or identification which may be required
by Labor Code Sections 1726 and 1781,as the same may be enacted,adopted or amended from time
to time, or any other applicable provision of law; (4) failure by Owner to provide and maintain any
and all bonds to secure the payment to contractors (including the payment of wages to workers
performing any public work)which may be required by the Civil Code, L.aborCode Section 1781.as
the same may be enacted, adopted or amended from time to time, or any other provision of'
applicable law; and/or(5) failure by Owner to obligate any party as may be required by Labor Code
Sections 1726 and 1781,as the same may be enacted,adopted or amended from time to time,or any
other applicable provision of law.
C. It is agreed by the parties that, in connection with the construction, development(as
defined by applicable law) and operation of the Project. including, without limitation. any public
work (as defined by applicable law). Owner shall bear all risks of payment or non payment of state
prevailing wages and/or the implementation of Labor Code Sections 1726 and 1781,as the same may
be enacted, adopted or amended from time to time, and/or any other applicable provision of law.
"Increased costs"as used in this Section shall have the meaning ascribed to it in Labor Code Section
1781.
d. The foregoing indemnity shall survive termination of this Agreement.
Section 313 Permits
Before commencement of construction of any buildings. structures or other work of
improvement upon any portion of the Property, the Owner shall,at its own expense, secure or cause
to be secured, any and all permits which may be required by the City, acting in its governmental
capacity, or any other governmental agency with jurisdiction over such work. The disbursement of
the HOME Loan is subject,among other conditions, to the issuance of all building permits required
by the City for the development and construction of the Project.
Section 314 Disclaimer of'Responsibility by City
The City neither undertakes nor assumes nor will have any responsibility or duty to Owncr or
to any third party to review, inspect, supervise, passjudgment upon or inform Owner or any third
part- of any matter in connection with the construction or development of the Project. whether
regarding the quality, adequacy or suitability of the plans.any labor. service,equipment or material
furnished to the Property,any person furnishing the same,or otherwise. Owner and all third parties
shall rely upon its or their own judgment regarding such matters, and any review. inspection,
supervision,exercise ofjudgment or information supplied to Owner or to any third party by the City
in connection with such matter is for the public purpose of providing financial assistance for
developing the Project for use as affordable housing,and neither Owner(except for the purposes set
AFFORDABLE HOUSING AGREEMENT
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PAGE 21
forth in this Agreement) nor any third party is entitled to rely thereon. The City shall not be
responsible for any of the work of development of the Project.
Section 315 Taxes. Assessments, Encumbrances and Liens
Owner shall pay prior to delinquency, but not later than the imposition ofany penalty,all real
estate taxes and assessments assessed and levied on or against the Property. Prior to the full
reconveyance of the HOME Deed of Trust and the Inclusionary Deed of Trust. Owner shall not
place, or allow to be placed. on title to the Property or any portion thereof.any mortgage,trust deed,
encumbrance or lien not authorized by this Agreement. In addition. Owner shall remove, or shall
have removed, any levy or attachment made on title to the Property(or any portion thereof),or shall
assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder.
Nothing herein contained will be deemed to prohibit Owner from contesting in good faith the
validity or amount of any tax assessment, or to limit the remedies available to Owner in respect
thereto. The covenants of the Owner set forth in this Section 315 shall remain in effect until full
reconvevance of the HOME Deed of Trust and the Inclusionary Deed of Trust.
Section 316 Prohibition against Transfer
a. Prior to the full reconvevance of-the HOME Deed of Trust and the Inclusionary Deed
of Trust, Owner shall not, except for Permitted Transfers or as otherwise permitted by this
Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or
partial sale, transfer, conveyance or assignment of the whole or any part of the Property or the
improvements thereon, without prior written approval of the City.
b. In the event Owner does or attempts to assign this Agreement or any of the rights
herein. or does or attempts to sell, transfer, convey or assign the Property or the buildings or
structures thereon prior to the full reconvevance of the HOME Deed of Trust and the Inclusionary
Deed of Trust, other than a Permitted Transfer, without the approval of the City in violation of this
Agreement, subject to the notice and cure provisions of Section 501, the City shall have the right to
terminate this Agreement.
C. In the absence of a specific written agreement by the City (not to be unreasonably
withheld or conditioned),and except as otherwise provided in this Agreement,no such sale.transfer.
conveyance or assignment ofthis Agreement or the Property(or any portion thereof),orapproval by
the City of any such sale, transfer, conveyance or assignment, shall be deemed to relieve Owner or
any other party from any obligations under this Agreement.
Section 317 Removal of Liens and Encumbrances
Owner shall not allow any liens or encumbrances to be placed on the Property, except as
expressly provided by this Agreement or otherwise approved in writing by the City, and shall
promptly take all necessary actions to remove any such liens or encumbrances. Nothing herein
contained will be deemed to prohibit Owner from contesting in good faith the validity or amount of
any encumbrance or lien, or to limit the remedies available to Owner in respect thereto.
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Section 318 Copeland Anti-Kick-Back Act
Owner shall comply with the provisions of the Copeland Anti-Kick-Back Act (18 U.S.C.
874)as supplemented in the Department of Labor regulations (29 CFR Part 3),as amended. Owner
warrants and agrees to include, or cause to be included. this requirement in every nonexempt
subcontract. Owner also agrees to take such action as the federal, state or local government may
direct to enforce aforesaid provisions.
Section 319 Contract Work Hours and Safety Standard Act
Owner shall comply with the provisions of sections 103 and 107 ofthe Contract Work Hours
and Safety Standard Act (40 U.S.C. 327-330) as supplemented by the Department of Labor
regulations (29 CFR, Part 5). as amended. Owner warrants and agrees to include or cause to be
included this requirement in every nonexempt contract. Owner also agrees to take such action as the
federal, state or local government may direct to enforce aforesaid provisions.
PART 4. USE OF THE PROPERTY
Section 401 Uses
Owner, its successor and assigns shall use the Property only for the uses specified in the
HOME Regulatory Agreement, the Amended and Restated Covenants.. and this Agreement,
specifically including the following:
a. The Property shall be improved for the purpose of' creating a 43-unit affordable
housing project and ancillary facilities, described in the Scope of Development and subject to the
occupancy and rent restrictions set forth in the I-IOME Regulatory Agreement. the Amended and
Restated Covenants and other regulatory agreements recorded against the Property.No change in the
use of the Property shall be permitted without the prior written approval of the City.
b. The maximum incomes of residential tenants eligible to rent the Affordable Units
shall not exceed the lesser of Low HOME Income (if applicable to the unit) and Extremely Low
Income or Very Low Income as those terms may apply to the unit.
C. The maximum monthly rent (including a reasonable utility allowance) that may be
charged to tenants ofthc Affordable Units shall be the lesser of the HOME Rent(ifapplicable to the
unit) and the Inclusionary Rent.
d. The HOME rent limits published by HUD will include average occupancy per unit
and adjusted income assumptions.
C. In accordance with the formula set forth in 24 CFR 92.252(e) and as required by 24
CFR 92.504 (c)(3)(ix), rents charged to tenants of the HOME Units will remain affordable to Low
I-IOh1E Income households pursuant to this Agreement for not less than twenty(20)years following
the date of issuance of a final Certificate of Occupancy by the City of Huntington Beach.
f. Failure tocomplywiththeaffordabilityrequirementsofthisAgrccmentisancventof
default under the terms of the HOME Loan. Pursuant to the HOME Note evidencing the HOME
Loan, the HOME Loan will be due and payable immediately if the Project does not meet the
AFFORDABLE: HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 23
affordability requirements of this Agreement and the HOME Regulatory Agreement, following
written notice and expiration of the applicable cure period.
Owner shall submit its rent schedule and utility allowances thirty (30) days prior to
initial rental of the units and on an annual basis thereafter. "I he City shall review and approve or
disapprove the proposed rent schedule and utility allowances for compliance with the maximum rent
limitations contained in 24 CFR 92.252.
h. The City will provide updated HUD income and rent limits to Owneras they become
available. As of the date of this Agreement, the applicable income and rent limits are as follows:
Orange County
2020 HOME Program Income Limits
Low HOME Income Fligh HOME Income
Household Size (Very Low Income) (Low Income)
1 $44,850 $71,750
2 $51,250 582,000
3 $57,650 $92.250
4 $64.050 S 102,450
5 $69.200 $1 10.650
6 $74.300 $118,850
7 $79.450 $127,050
Orange County
2020 HOME Program Rent Limits
I-Bedroom 2-Bcdroom 3-Bcdroom
Low HOME Rent $1,201 $1,441 $1,665
(Very Low Income)
I-figh HOME Rent $1,541 $1.852 $2.131
(Low Income)
For comparison purposes:
Fair Market Rent $1,785 $2,216 $3,098
65% Rent Limit $1.541 $1.852 $1131
i. Owner shall be responsible for ensuring that the current operative HOME income and
rent limits in effect at the time of'the tenant's rental application will be used to determine initial
tenant eligibility and conformance with HOME affordability requirements and that each tenant
recertification is conducted using current HOME income and rent limits to assure compliance with
HOME Regulations.
j. Income recertification and rental rate adjustments far the HOME Units shall occur not
more frequently than once per year upon I-IUD's annual determination of maximum HOME rent
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 24
limits and in accordance with 24 CFR part 92.252(t) and (g). Any increase in rents for the HOME-
Units is subject to the provisions ofexisting leases. Owner must provide tenants with not less than
thirty (30) days prior written notice before implementing an increase in rents.
k. Owner agrees that, prior to the initial lease-up ofthe project,Owncr shall consult with
and obtain the approval of the City in developing a fair marketing plan for the Affordable Units.
I. The City, and its successors and assigns,shall have the right,but not the obligation,to
monitor and enforce the covenants contained in this Section 401,the HOME Regulatory Agreement.
and the Amended and Restated Covenants. Owner covenants that it shall comply with the
monitoring program set up by the City to enforce said covenants. In complying with such
monitoring program, Owner or its agent shall annually prepare and submit to the City an occupancy
report and financial information and income verification documents foreach tenant ofthe Affordable
Units,and all supporting documentation,on forms provided or approved by the City,setting forth the
required information for the preceding year. The City shall review such reports to confirm the
continuing affordability of the Affordable Units and the eligibility of tenants required by this
Agreement. To defray the City's cost of monitoring the Affordable Units, Owner shall pay to the
City an annual monitoring fee of$1,075, increasing annually at a rate of three percent (3%).
In. No officer, employee, agent, official or consultant of Owner may occupy any of the
Affordable Units.
Section 402 Maintenance of the Propertv
Owner shall maintain the Property in accordance with the requirements of this Agreement,
the HOME Regulatory Agreement and the Amended and Restated Covenants.
Section 403 Obligation to Refrain from Discrimination
Owner covenants and agrees for itself, its successors and its assigns in interest to the Property
or any part thereof, that there shall be no discrimination against or segregation of any person, or
group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status,
national origin,or ancestry in the sale, lease,sublease,transfer, use,occupancy, tenure or enjoyment
of the Property,nor shall Owner itself or any person claiming under or through it establish or pennit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of'tenants, lessees, subtenants, sublessees, or vendces of the
Property.
Section 404 Equal Employment Opportunity
During the term of this Agreement. Owner agrees as follows:
a. Owner will not discriminate against any employee or applicant for employment
because of race. color, religion, sex, or national origin(s). Owner will take affirmative action to
ensure the applicants are employed. and that employees are treated during employment, without
regard to their race, color, religion, sex or national origin(s). Such action shall include. but not be
limited to,the following:employment, upgrading. demotion,or transfer,recruitment or recruitment
advertising: layoff or termination: rates of pay or other forms of compensation: and selection for
training. including apprenticeship. Owner agrees to post in conspicuous places, available to
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 25
employees and applicants for employment, notices to be provided by the contracting officer of the
City setting forth the provisions of this nondiscrimination clause.
b. Owner will. in all solicitations or advertisements for employees placed by or on behalf
of Owner,state that all qualified applicants will receive consideration foremployment without regard
to race. color, religion. sex, or national origin.
C. Owner will send to each labor union or representative of workers with which he has a
collective bargaining agreement or other contract or understanding, a notice to be provided by the
City's contracting officer, advising the labor union or worker's representative of Owner's
commitments under Section 202 of Executive Order No. 11246 of September 24. 1965. and shall
post copies of the notice in conspicuous places available to employees and applicants for
employment.
d. Owner will comply with all provisions of Executive Order 11246 of September 24,
1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.
e. Owner will furnish all information and reports required by Executive Order 11246 of
September 24, 1965, and by the rules, regulations,and orders of the Secretary of Labor,or pursuant
thereto, and will permit access to its books, records, and accounts by the City and the Secretary of
Labor for purposes of investigation to ascertain compliance with such rules, regulations. and order.
f. In the event Owner is found to be in noncompliance with the nondiscrimination
clauses of this contract or with any of such rules, regulations ororders,this contract maybe canceled,
terminated or suspended in whole or in part and Owner may be declared ineligible for further
Government contracts in accordance with procedures authorized in Executive Order 11246 of
September 24, 1965, and such other sanctions maybe imposed and remedies invoked as provided in
Executive Order 11246 of September 24, 1965 or by rule, regulations, or order of the Secretary of
Labor or as otherwise provided by law.
g. Owner will include the provisions of paragraphs(a)through(g)ofthis Section 404 in
every contract or purchase order related to the Project unless exempted by rules, regulations, or
orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of
September 24, 1965, so that such provisions will be binding upon each contractor or vendor
providing services related to the Project. Owner will take such action with respect to any contract or
purchase order as the City may direct as a means of enforcing such provisions, including sanctions
for noncompliance.
Section 405 Effect and Duration of Covenants
The covenants established in this Agreement shall,without regard to technical classification
and designation, be binding for the benefit and in favor of the City for such periods as set forth
herein. Those certain covenants contained in the HOME Regulatory Agreement and the Amended
and Restated Covenants shall remain in effect for the periods specified therein.
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Section 406 HOME Regulatory Agreement
Concurrently with the Closing, Owner and City shall execute and cause the recordation of a
HOME Regulatory Agreement substantially in the form attached to this Agreement as Attachment
No. 7.
Section 407 Labor. Training and Business Opportunity
Owner agrees to comply with the federal regulations governing training, employment and
business opportunities, including but not limited to Section 3 of the (lousing and Urban
Development Act of 1968. to the extent such regulations apply to Owner. Compliance with the
provisions of Section 3, the regulations set forth in 24 Code of Federal Regulations and all applicable
rules and orders of the Department of Housing and Urban Development issued thereunder prior to
the execution of this Agreement shall be a condition precedent to federal financial assistance being
provided to the Projcct as well as a continuing condition.binding upon the applicant or recipient for
such assistance. its successors,and assigns. Failure to fulfill these requirements shall subject Owner,
its contractors and subcontractors. its successors,and assigns to those sanctions specified by 24 Code
of Federal Regulations as well as with any and all applicable amendments thereto.
PART 5. DI FAUI;fS AND RE E'DIES
Section 501 Defaults - General
a. Subject to the extensions of time set forth in Section 602, failure or delay by either
party to perform any term or provision ofthis Agreement constitutes a default under this Agreement.
The party who fails or delays must commence to cure, correct or remedy such failure or delay and
shall complete such cure, correction or remedy with reasonable diligence.
b. The injured party shall give written notice ofdcfault to the party in default,specifying
the default complained of by the injured party. Failure or delay in giving such notice shall not
constitute a waiver of any default, nor shall it change the time of default. Except as otherwise
expressly provided in this Agreement, any failures or delays by either party in asserting any of its
rights and remedies as to any default shall not operate as a waiver of any default or ofany such rights
or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either
party of its right to institute and maintain any actions or proceedings which it may deem necessary to
protect, assert or enforce any such rights or remedies.
C. If a monetary event of default occurs,prior to exercising any remedies hereunder,the
injured party shall give the party in default written notice of such default. The party in default shall
have a period of twenty(20) calendar days after such notice is received or deemed received within
which to cure the default prior to exercise of remedies by the injured party.
d. If a non-monetary event of default occurs,prior to exercising any remedies hereunder.
the injured party shall give the party in default notice of such default. If the default is reasonably
capable of being cured within thirty (30) calendar days after such notice is received or deemed
received, the party in default shall have such period to effect a cure prior to exercise of remedies by
the injured party. If the default is such that it is not reasonably capable of being cured within thirty
(30)days, and the party in default(1) initiates corrective action within said period.and(2)diligently,
continually, and in good faith works to effect a cure as soon as possible, then the party in default
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 27
shall have such additional time as is reasonably necessary to cure the default prior to exercise of any
remedies by the injured party. In no event shall the injured party be precluded from exercising
remedies if its security becomes or is about to become material[),jeopardized by any failure to cure a
default.
e. In the event of a default by Owner, the Investor Limited Partner shall have the cure
rights set forth in the HOME Note and the Inclusionary Note.
Section 502 Institution of Legal Actions
In addition to any other rights or remedies (and except as otherwise provided in this
Agreement), either party may institute legal action to cure,correct or remedy any default,to recover
damages for any default, or to obtain any other remedy consistent with the purpose of this
Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange,
State of California, in any other appropriate court of that county.
Section 503 Applicable Law
The internal laws ofthe State of California shall govern the interpretation and enforcement of
this Agreement, without giving effect to the principles governing conflicts of laws.
Section 504 Acceptance of Service of Process
a. In the event that any legal action is commenced by the Owner against the City,service
of process on the City shall be made by personal service upon the City Manager or in such other
manner as may be provided by law.
b. In the event that any legal action is commenced by the City against the Owner,service
of process on the Owner shall be made by personal service upon the Owner (or upon a general
partner, managing member or officer of the Owner) and shall be valid .whether made within or
without the State of California, or in such manner as may be provided by law.
Section 505 Rights and Remedies Are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in this
Agreement,the rights and remedies of the parties are cumulative,and the exercise by either party of
one or more of such rights or remedies shall not preclude the exercise by it, at the same or different
times, of anv other rights or remedies for the same default or any other default by the other party.
Section 506 Damages
Subject to the notice and cure provisions of Section 501, ifeithcr party defaults with regard to
any of the provisions of this Agreement. the non-defaulting party shall serve written notice of such
default upon the defaulting party. If the default is not cured within the time provided in Section 501.
the defaulting party shall be liable to the non-defaulting party for any damages caused by such
default, and the non-defaulting party may thereafter (but not before) commence an action for
damages against the defaulting party with respect to such default.
AFFORDABLE HOUSING AGREEMENT
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Section 507 Specific Performance
Subject to the notice and cure provisions of'Section 501, ifeither party defaults with regard to
any of the provisions of this Agreement (except with respect to monetary defaults), the non-
defaulting party shall serve written notice of such default upon the defaulting party. Ifthe default is
not cured within the time provided in Section 501, the non-defaulting party, at its option, may
thereafter (but not before) commence an action for specific performance of the terns of this
Agreement pertaining to such default.
Section 508 Non-Recourse Obligation
The obligation to repay the HOME., Loan and the Inclusionary Loan are nonrecwurse
obligations of Owner and its partners. Neither Owner nor any of its general or limited partners, nor
any other party,shall have any personal liability for repayment of the loans. The sole recourse ofthe
City with respect to repayment ofthe HOM E Loan and the Inclusionary Loan shall be the exercise of
its rights against the Property and the Improvements and any related security for the loans.
Notwithstanding the foregoing, the City may:
a. obtain a judgment or order (including, without limitation, an injunction) requiring
Owner or any other party to perform (or refrain from) specified acts other than repayment of the
HOME? Loan and Inclusionary Loan; and
b. recover directly from Owner or any other party:
I. all damages,costs and expenses incurred by the City as a result of fraud or any
criminal act or acts of Owner or any partner, shareholder,officer, director or employee of Owner or
of any general partner of Owner or of any member of a general partner of Owner,
2. all damages, costs and expenses incurred by the City as a result of
misappropriation of funds provided for the construction of the Improvements, as described in this
Agreement, rents and revenues from the operation of the Project,or proceeds of insurance policies or
condemnation proceeds;
3. all amounts owing by Owner pursuant to Owner's indemnification regarding
Hazardous Substances provided to the City in connection with this Agreement; and
4. all court costs and attorneys' fees reasonably incurred in enforcing or
collecting upon any ofthe foregoing exceptions(provided that the City shall pay Owners reasonable
court costs and attorneys' fees if'Owner is the prevailing party in such enforcement or collection
action).
Section 509 Termination by City
a. In accordance with 24 CFR 85.43 and subject to applicable notice and cure periods,
suspension or termination ofthis Agreement may occur ifOwncr materially fails to comply with any
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 29
term ol'the award. and the award may be terminated for convenience in accordance with 24 CFR
85.44. subject to applicable notice and cure periods.
b. Subject to the notice and cure provisions of Section 501. the City shall have the right
to terminate this Agreement prior to Closing by providing written notice to Owner in the event any of
the following occurs:
(1) failure of any condition precedent to the occurrence of the Closing:or
(2) Owner fails to submit to the City the evidence of financing within the
time established therefor in the Schedule ofPerfonnance, and has failed to cure such default within
thirty (30) days after receiving written notice from the City; or
Q) Except for a Permitted Transfer. Owner(or any successor in interest)
assigns or attempts to assign the Agreement or any right therein, or transfers the Property (or any
portion thereof or interest therein), in violation of this Agreement: or
(4) there is substantial change in the ownership of the Owner, or with
respect to the identity of the parties in control of Owner, or the degree thereof in violation of this
Agreement: or
(5) Owner fails to submit any of the plans, drawings and related
documents required by this Agreement by the respective dates provided in Schedule of Performance
therefor,and has failed to cure such default within thirty(30)days after receiving written notice from
the City.
C. After the Closing,subject to the notice and cure provisions of Section 501.the
City shall have the right to terminate this Agreement by providing written notice to Owner, and all
outstanding amounts due under the FIOME Note and Inclusionary Note, including accrued interest,
shall become immediately due and payable by Owner in the event of a default by Owner, including
but not limited to the following:
(1) Owner fails to commence construction of the Project within the time
provided in the Schedule of Performance, subject to Force Majeure delays; or
(2) Owner abandons or suspends the Project for a period of thirty (30)
days: or
(3) except for a Permitted Transfer, there is substantial change in the
ownership of the Owner, or with respect to the identity of the parties in control of Owner, or the
degree thereof in violation of this Agreement; or
(4) except for a Permitted Transfer, Owner assigns or attempts to assign
this Agreement,or any rights herein,or transfer,or suffer any involuntary transferofthe Property,or
any part thereof, in violation of this Agreement; or
(5) Owner otherwise materially breaches this Agreement.
AFFORDABLE HOUSING AGREEMENT
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PART 6. GENERAL PROVISIONS
Section 601 Notices
Formal notices.demands and communications between the City and Owner shall be deemed
sufficiently given ifdispatched by first class mail,registered orcertified mail,postage prepaid,return
receipt requested, or by electronic facsimile transmission followed by delivery of a "hard" copy, or
by personal delivery(including by means of'professional messenger service,courier service such as
United Parcel Service or Federal Express,or by U.S. Postal Service).to the addresses of the City and
Owner as set forth in Sections 106 and I07 hereof. Such written notices, demands and
communications may be sent in the same manner to such other addresses as either party may from
time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission
followed by delivery of a"hard" copy, shall be deemed delivered upon its transmission: any notice
that is personally delivered (including by means of professional messenger service. courier service
such as United Parcel Service or Federal Express. or by U.S. Postal Service), shall be deemed
received on the documented date of receipt: and any notice that is sent by registered or certified mail.
postage prepaid. return receipt required shall be deemed received on the date of receipt thereof.
Section 602 Unforced Delay: Extension ofTimc of Performance
a. Performance by either party hereunder shall not be deemed to be in default where
delays or defaults are due to war, insurrection, strikes, lockouts, riots. floods, earthquakes, fires,
casualties, acts of God, acts of the public enemy, epidemics or pandemics, quarantine restrictions,
freight embargoes, lack of transportation, governmental restrictions or priority, tmusually severe
weather, inability to secure necessary labor, material or tools,delays ofany contractor,subcontractor
or supplier, acts of the other party, or acts or failure to act of the City of Huntington Beach in its
governmental capacity or any other public or governmental agency or entity (except that acts or
failure to act of the City in its capacity as lender to the Project shall not excuse performance of the
City).
b. 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 thin (30)days
of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the
foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such
delay and interference delivers to the other party written notice describing the event, its cause, when
and how such party obtained knowledge,the date and the event commenced,and the estimated delay
resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice
within thirty (30) days after it obtains actual knowledge of the event. Times of performance under
this Agreement may also be extended in writing by the City and Owner.
Section 603 Conflict of Interest
a. No member, official, or employee of the City shall have any personal interest,direct
or indirect, in this Agreement, nor shall any such member, official, or employee participate in any
decision relating to this Agreement which affects his or her personal interests or the interests of any
corporation, partnership, or association in which he or she is, directly or indirectly, interested.
AFFORDABLE HOUSING AGRF..EMEN'I'
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PAGE 31
b. Owner warrants that it has not paid or given.and will not pay or give.any third person
any money or other consideration for obtaining this Agreement.
Section 604 Nonliability of City Officials and Employees
No member,official,agent, legal counsel or employee ofthe City shall be personally liable to
Owner, or any successor in interest in the event of any default or breach by the City or for any
amount which may become due to Owner or successor or on any obligation under the terms of this
Agreement.
Section 605 Inspection of Books and Records
a. Owner shall maintain complete, accurate, and current records pertaining to the
Property for a period of five (5) years after the creation of such records, and shall permit any duly
authorized representative of the City to inspect and copy records,during regular business hours upon
reasonable advance notice. Records must be kept accurate and current.
b. The City reserves the right to inspect. monitor, and observe work and services
performed by Owner at any and all reasonable times upon reasonable advance notice, provided that.
if any such inspection, monitoring. or observation shall occur during the period of construction,
Owner shall have the right to require that a representative of Owner be present.
C. The City reserves the right to audit the records of Owner any time during the
performance of this Agreement and for a period of five years after final payment is made under this
Agreement.
d. If required, Owner will provide the City with a certified audit of Owner's records
representing the July I —June 30 fiscal year during which the Project becomes Complete,pursuant to
the requirements of OMB Circular A-133.
e. Access shall be immediately granted to the City, HUD.the Comptroller General ofthe
United States. or any of their duly authorized representatives to any books, documents, papers.and
records of Owner or its contractors which are directly pertinent to this Agreement for the purpose of
making audit, examination, excerpts, and transcriptions.
Section 606 Approvals
a. Except as otherwise expressly provided in this Agreement,approvals required ofthe
City or Owner in this Agreement, including the attachments to this Agreement, shall not be
unreasonably withheld or delayed. All approvals shall be in writing. Failure by either party to
approve a matter within the time provided for approval of the matter shall not be deemed a disapproval,
and failure by either party to disapprove a matter within the time provided for approval ofthe matter
shall not be deemed an approval.
b. Except as otherwise expressly provided in this Agreement, approvals required ofthe
City shall be deemed granted bythe written approval of the City Manageror designee.The City agrees
to provide notice to Owner ofthe name of the City Manager's designee on a timely basis and to
provide updates from time to time. Notwithstanding the foregoing, the City Manager may, in his or
her sole discretion, refer to the City Council any item requiring City approval; otherwise, "City
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 32
approval" means and refers to approval by the City Manager or designee. The City Manager shall
have the authority to execute any and all documents and instruments necessary to implement this
Agreement.
Section 607 Real Estate Commissions
Neither Owner nor the City shall be liable for any real estate commissions or brokerage fees
which may arise from this Agreement. Owner and the City each represents that it has engaged no
broker, agent or finder in connection with this Agreement.
Section 608 Construction and Interpretation of Agreement
a. The language in all parts ofthis 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 ofarm's length and careful negotiation over a considerable period of time,that each
party has been given the opportunity to independently review 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 ofthis 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.
b. Ifany tern or provision ofthis Agreement,the deletion ofwhich would not adverscly
af7ect the receipt of' any material benefit by any party hereunder, shall be held by a court of
competentjurisdiction to be invalid or unenforceable,the remainder of this Agreement shall not be
affected thereby and each other term and provision ofthis Agreement shall be valid and enforceable
to the fullest extent permitted by law. It is the intention of the parties hereto that in lieu of each
clause or provision of this Agreement that is illegal, invalid, or unenforceable, there be added as a
part ofthis Agreement an enforceable clause or provision as similar in terms to such illegal, invalid,.
or unenforceable clause or provision as may be possible.
C. The captions of the articles, sections, and subsections herein are inserted solely for
convenience and under no circumstances are they or any of them to be treated or construed as part of
this instrument.
d. References in this instrument to this "Agreement' mean, refer to and include this
instrument as well as any riders. exhibits, addenda and attachments hereto (which are hereby
incorporated herein by this reference)or other documents expressly incorporated by reference in this
instrument. Any references to any covenant, condition, obligation, and/or undertaking "herein,"
"hereunder," or"pursuant hereto" (or language of like import) shall mean, refer to. and include the
covenants,obligations,and undertakings existing pursuant to this instrument and any riders,exhibits,
addenda. and attachments or other documents affixed to or expressly incorporated by reference in
this instrument.
C. As used in this Agreement,and as the context may require,the singular includes the
Plural and vice versa, and the masculine gender includes the feminine and vice versa.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE 33
Section 609 Time of Essence
Time is of the essence with respect to the performance of each of the covenants and
agreements contained in this Agreement.
Section 610 No Partnership
Nothing contained in this Agreement shall be deemed or construed to create a partnership,
joint venture, or any other similar relationship between the parties hereto or cause the City to be
responsible in any way for the debts or obligations of Owner or any other Person.
Section 611 Compliance with Law
Owner agrees to comply with all applicable laws and regulations of all municipal, county.
state and federal authorities, pertaining to the Project. The judgment of'any court of'competent
jurisdiction,or the admission of Owner or any lessee or perrnittee in any action or proceeding against
them, or any of them, whether the City be a party thereto or not, that Owner, lessee or permittee has
violated any such ordinance or statute in the development and use ofthe Property shall be conclusive
of that fact as between the Citv and Owner.
Section 612 Bindin, Effect
This Agreement. together with the agreements, covenants and warranties contained herein.
shall be binding on and shall inure to the benefit of the parties hereto and all of their respective
successors and assigns, whether voluntary or involuntary or by agreement or operation of law.
Section 613 No Third Party Beneficiaries
The parties to this Agreement acknowledge and agree that the provisions of this Agreement
are for the sole benefit of the City and Owner, and not for the benefit, directly or indirectly, of any
other person or entity, except as otherwise expressly provided herein.
Section 614 Authority to Sim
Owner hereby represents that the persons executing this Agreement on behalf of Owner have
full authority to do so and to bind Owner to perform pursuant to the terms and conditions of this
Agreement.
Section 615 Incorporation by Reference
Each of the attachments and exhibits attached hereto is incorporated herein by this reference.
Section 616 Counterparts
This Agreement may be executed by each party on a separate signature page, and when the
executed signature pages arc combined, shall constitute one single instrument.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS 1.13
PAGE 34
Section 617 Severability
If any provision of this Agreement shall be held invalid. illegal or unenforceable in any
respect by a court of competentjurisdiction,the remaining provisions ofthis Agreement shall not be
affected thereby, but this Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had not been contained herein,and the remainder ofthis Agreement shall be construed as
if the invalid, illegal, or unenforceable provision had never been contained in it.
PART 7. ENTIRE AGREEMENT. WAIVERS AND AMENDMENTS
a. this Agreement is executed in three(3)duplicate originals,each of which is deemed
to be an original. This Agreement, including all of the Attachments appended to this Agreement,
constitutes the entire understanding and agreement of the parties.
b. This Agreement integrates all of the terms and conditions mentioned herein or
incidental to this Agreement, and supersedes all negotiations or previous agreements between the
parties with respect to all or any part of the subject matter hereof.
C. All waivers ofthe provisions ofthis Agreement must be in writing and signed by the
appropriate authorities of'the City or Owner, and all amendments to this Agreement must be in
writing and signed by the appropriate authorities of the City and Owner.
[Remainder of Page Intentionally Left Blank; Signatures on Following Page]
AFFORDABLE HOUSING AGREEMENT
1317ACI-I HOUSING PARTNERS LP
PAGE 35
PART 8. TIME FOR ACCEPTANCE OF AGREEMENT BY CITY
This Agreement, when executed by Owner and delivered to the City, must be authorized,
executed and delivered by the City and Authority within sixty(60) days after date of signature by
Owner or this Agreement may be terminated by Owner upon written notice to the City and Authority.
IN WITNESS WHEREOF,the City,Authority,and Owner have signed this Agreement as
of the dates set opposite their signatures.
"CITY" "OWNER"
Crrr HUM FOfON BEACH BEACH HOUSING PARTNERS LP
a California limited partnership
By:
Oliver Cht Dated IIA By: JHC-Beach LLC, a California limited
City Manager liability company
Its: Managing General Partner
ATTEST:
y 9��1 ��Q _ By: Jamboree Housing Corporation,
By: L a California nonprofit public
Robin Estanislau benefit corporation
City Clerk
Its: Manager
APPROVED AS TO FORM:
By:—
By: ��1 ,. V a Michael Massie Dated 12ramm
Michael Gates Chief Development Officer
City Attorney
[SIGNATURES CONTINUE ON NEXT PAGEI
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE S-I
A notary public or other officer completing this certificate verifies only the identity
of the individual who signed the document to which this certificate is attached, and
not the truthfulness, accuracy, or validity of that document.
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On February 23, 2021 before me, Donna Switzer, Notary Public, personally
appeared Robin Estanislau and Oliver Chi who proved to me on the basis of
satisfactory evidence to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity
upon behalf of which the persons acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
_DONNA S1MMR
WITNESS my hand and official seal. - ,,, cowissroN.2311WI
NoUry vum`c.crab.
OPAWE COUN"
w�..Ems.Na s.iaxs
(Notary Signature)
"AUT TY"
HUN G BE r!rNG AUTHORITY
Oliver Chi Dated .Z3 Ata�l
Executive Director
ATTFS�
Robin Estanislau
Authority Secretary
APPRjrAS TOTOM:
By:
lkMiXa'e Gates
Authority Counsel
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
PAGE S-2
A notary public or other officer completing this certificate verifies only the identity
of the individual who signed the document to which this certificate is attached, and
not the truthfulness, accuracy, or validity of that document.
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On February 23, 2021 before me, Donna Switzer, Notary Public, personally
appeared Robin Estanislau and Oliver Chi who proved to me on the basis of
satisfactory evidence to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity
upon behalf of which the persons acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
DONNA;;;;R
WITNESS my hand and official seal. commt, a •2311WI
uauy Pta c-C4Wwnr
k"C . Ei ism 5.2023
/ I Seal)
(Notary Signature),
ATTACHMENT NO. 1
SITE MAP
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 1 —SITE MAP
339
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ATTACHMENT NO. 2
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON
BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA,AS PER MAP RECORDED IN BOOK 76,PAGE 4 OF PARCEL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN:159-031-18
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 2 -LEGAL DESCRIPTION
341
ATTACHMENT NO. 3
SCOPE OF DEVELOPMENT
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 3 — SCOPE OF DEVELOPMENT
342
ATTACHMENT NO. 3
SCOPE OF DEVELOPMENT
1. General
The Property is located on approximately 0.78 acre with a wide array of nearby amenities,
including a grocery store,bus stop,park,schools,medical clinic and pharmacy. The Project will consist
of 43 units of multifamily housing to be developed on the Property, comprising 42 one-
bedroom/one-bathroom units and l two-bedroom/one-bathroom manager unit, common areas, and
associated parking. The Project's common areas will include a management office, an outdoor
courtyard area and open space,and 3,800 square feet of community space,including a community room,
full kitchen,TV lounge,computer room, individual counseling offices,and multi-purpose gathering and
meeting rooms.
The building will consist of one level of Type I partial subterranean parking garage with 4-stories
of Type V residential above. The one-bedroom units will be at least 572 square feet. Each residential
unit will have individual heating and cooling controls,separate living,eating,sleeping,bathroom and
cooking areas,and private patios or balconies.Parking will be provided on-site and will consist of 35
spaces, including 5 handicap spaces.
The Project will be designed and developed to promote safety and accessibility for residents
and their guests. The Project will be planned to promote"natural surveillance"of parking,pathways
and other common areas and of entrances to individual residential units. Exterior lighting will be
provided to offer the greatest degree of security without intruding into adjacent properties.
The plans and specifications for the Project shall be subject to the City's approval.
Development of the Property in accordance with this Agreement is subject to the City of Huntington
Beach Site Plan Review, and the City's post approval plan check, the issuance of permits and all
other applicable City of Huntington Beach approvals and permit requirements.
2. Standards, Controls and Restrictions
Standards, controls and restrictions regarding construction and development including,but
not limited to,maximum land coverage, setbacks, and building construction shall be as required by
the Huntington Beach General Plan, Zoning Ordinance, and Municipal Code, and shall be as
mutually agreed upon by the City and Owner in the approved construction drawings, plans and
specifications,and shall be consistent with the approved conceptual development standards and the
Site Plan Review plans and standards, including conditions of approval and environmental
mitigation measures. The following standards shall apply to the Project.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 3 — SCOPE OF DEVELOPMENT
343
a. Architectural Standards
The architecture of all structures shall maintain a high quality of architectural design and
establish visual continuity with existing and proposed developments surrounding the Property.
(1) Form and Scale
The structures on the Property shall combine a form and scale which are
compatible with the adjoining land uses and the street environment.
(2) Street Level Design
The facade as seen from the street shall be such that the shape,exterior design
and exterior finish of the structures are consonant with and visually related to
each other and surrounding developments.
(3) Building Materials
Building materials shall be subject to the City's approval, which approval
shall not be unreasonably withheld or delayed.
(4) Sustainability
Energy efficient features shall be incorporated into the design of the
development including passive energy conservation methods. Developer will
be required to demonstrate consideration of energy features as a part of the
design review and building permit process. Specifically, the Project shall
utilize Energy Star certified appliances exceeding California Code of
Regulations Title 24 standards by at least 15%. Low water landscaping will
be used throughout the Project.
b. Siting and Land Use Standards
(1) Building Location
The location of the building shall relate to and take advantage of
developments and attractions surrounding the Property.
(2) Building Height
The height of the building shall be as pennitted by the Huntington Beach
Zoning Ordinance and the Waiver and Concession Agreement attached to the
Agreement as Attachment No. 14.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 3 — SCOPE OF DEVELOPMENT
344
(3) Views
The structures shall be sited to minimize the impact on the views from
existing and proposed structures surrounding the Property. To the extent
possible, structures shall face open space.
(4) Open Space
Patios, plazas, gardens and other pedestrian oriented open spaces shall be
located throughout the Project with as much open space as practicable in
areas where greater use will be encouraged.
(5) Rooftops
On all buildings whose roof is visible from surrounding structures or
proposed structures, pedestrian ways, streets, etc., exposed duct work for
heating and cooling,mechanical equipment and other roof structures shall be
screened from the direct view of adjacent property or buildings by the
building parapets or in a manner approved by the City in the City's
reasonable discretion.
(6) Parking
All parking for the Project shall be located within the boundaries of the
Property.
C. Streetscape Design Standards
(1) Landscaping
Owner shall provide and maintain landscaping within setback areas along all
street frontages. All landscaping shall be integrated with the existing or
proposed landscaping for adjacent sites in the Project area. Landscaping
includes such materials as paving, trees, shrubs, and other plant materials,
landscape containers, top soil, soil preparation, automatic irrigation, and
landscape and pedestrian lighting.
Landscaping shall carry out the objectives and principles of the Project and
the City's desire to accomplish an aesthetically superior environment.
Developer shall maintain the landscape free from debris and accumulation of
rubble and shall maintain all plant materials in a manicured condition.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 3 — SCOPE OF DEVELOPMENT
345
(2) Vehicular Access
Vehicular access shall be as required by the City's Municipal Code and
Zoning Ordinance. Driveways for parking shall be coordinated with the
design of pedestrian spaces. The City will detennine the number and location
of curb breaks for access to the Property, pursuant to the City's Municipal
Code and Zoning Ordinance,.
d. On-Site Public Improvements and Utilities
Owner shall construct and install all utilities on the Property required by the City's Municpal
Code and Zoning Ordinance, and all other on-site public improvements necessary for the Project,
including, but not limited to:
(1) sewers
(2) storm drains
(3) electricity
(4) gas
(5) telephone
(6) water
(7) curbs
(8) gutters
(9) sidewalks and pavement
3. City Requirements
Owner shall be responsible for complying with all permit and fee requirements of the City of
Huntington Beach and compliance with all conditions of approval for the Project, including the
construction of any required off-site public improvements.
4. Accessibility
At a minimum,the Project shall comply with the accessibility requirements at 24 CFR Part 8,
which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)and,if applicable,
the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as
defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C. 3601-3619).
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 3 —SCOPE OF DEVELOPMENT
346
ATTACHMENT NO. 4
SCHEDULE OF PERFORMANCE
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 4— SCHEDULE OF PERFORMANCE
347
ATTACHMENT NO. 4
SCHEDULE OF PERFORMANCE
1. Submittal - Basic Concept/Schematic Before the City Council's consideration
Drawin.vs. Owner will submit to the City for of the Affordable Housing Agreement.
approval the Basic Concept/Schematic
Drawings and related documents (site plans,
elevations and preliminary floor plans).
2. Approval - Basic Concept/Schematic Within thirty days after submittal by
Drawings. The City will approve or Owner and before the City Council's
disapprove the Basic Concept/Schematic consideration of the Affordable Housing
Drawings and related documents. Agreement.
3. Execution of Affordable Housing Agreement As soon as feasible after submission of
by City. The City will authorize the City executed Agreement by Owner and
Manager to execute and deliver the approval by City Council.
Affordable Housing Agreement to Owner.
4. Low Income Housing Tax Credits. Owner No later than November 30, 2021.
will have been awarded a preliminary
allocation of Low Income Housing Tax
Credits for the Project.
5. Submittal - Annual Project Operating Budget. Not later than thirty days before the
Owner will submit to the City for approval Closing.
the Annual Project Operating Budget for the
first year of operation.
6. Submittal — Final Construction Drawings and Not later than thirty days before the
Specifications. The Owner will prepare and Closing.
submit to the City for approval the Final
Construction Drawings and Specifications.
7. Approval - Final Construction Drawings and Within fifteen business days after
Specifications. The City will approve or submittal to the City.
disapprove the Final Construction Drawings
and Specifications.
8. Submittal - Management Plan. Owner will Not less than thirty days before the
submit to the City for approval the proposed Closing.
Management Plan for the Project.
ATTACHMENT NO. 4
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 4— SCHEDULE OF PERFORMANCE
348
SCHEDULE OF PERFORMANCE
1. Submittal - Basic Concept/Schematic Before the City Council's consideration
Drawings. Owner will submit to the City for of the Affordable Housing Agreement.
approval the Basic Concept/Schematic
Drawings and related documents (site plans,
elevations and preliminary floor plans).
2. Approval - Basic Concept/Schematic Within thirty days after submittal by
Drawings. The City will approve or Owner and before the City Council's
disapprove the Basic Concept/Schematic consideration of the Affordable Housing
Drawings and related documents. Agreement.
3. Execution of Affordable Housing Agreement As soon as feasible after submission of
by City. The City will authorize the City executed Agreement by Owner and
Manager to execute and deliver the approval by City Council.
Affordable Housing Agreement to Owner.
4. Low Income Housing Tax Credits. Owner No later than November 30, 2021.
will have been awarded a preliminary
allocation of Low Income Housing Tax
Credits for the Project.
5. Submittal - Annual Project Operating Budget. Not later than thirty days before the
Owner will submit to the City for approval Closing.
the Annual Project Operating Budget for the
first year of operation.
6. Submittal — Final Construction Drawings and Not later than thirty days before the
Specifications. The Owner will prepare and Closing.
submit to the City for approval the Final
Construction Drawings and Specifications.
7. Approval - Final Construction Drawings and Within fifteen business days after
Specifications. The City will approve or submittal to the City.
disapprove the Final Construction Drawings
and Specifications.
8. Submittal - Management Plan. Owner will Not less than thirty days before the
submit to the City for approval the proposed Closing.
Management Plan for the Project.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 4— SCHEDULE OF PERFORMANCE
349
9. Submittal - Maintenance Program and Annual Not less than thirty days before the
Maintenance Budget. Owner will submit to Closing.
the City for approval the proposed
Maintenance Program and Annual
Maintenance Budget for the Project.
10. Submittal - Evidence of Financing. Owner Not less than twenty days before the
will submit to the City substantially final Closing.
Loan Documents for the construction
financing, a written commitment for the
Permanent Loan and documentation of Owner
Equity, as provided in the Method of
Financing.
11. Approval of Financing. The City will Within ten days after the City's receipt of
approve or disapprove the evidence of such evidence of financing.
financing.
12. Closing. All conditions precedent to the Not later than 180 days after the Owner
Closing will have been satisfied. receives a preliminary allocation of Low
Income Housing Tax Credits.
13. Commencement of Construction. The Owner Within thirty days after the Closing.
will commence construction of the
improvements on the Property.
14. Completion of Construction. The Owner will Not later than twenty-four months after
complete construction of the improvements commencement of construction or such
on the Property. later date as may be approved by the
California Tax Credit Allocation
Committee.
15. Submittal - Tenant Lease. Owner will prepare At least two months before beginning
and submit to the City for approval a tenant selection for lease up of the
proposed tenant lease for the Project that Project.
conforms to the requirements of the HOME
Regulatory Agreement and the Agreement
Containing Covenants.
16. Submittal-Tenant Selection and Eli ig bility At least two months before beginning
Plan. Owner will prepare and submit to the tenant selection for lease up of the
City for approval the proposed tenant Project.
selection and eligibility plan for the Project.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 4 — SCHEDULE OF PERFORMANCE
350
17. Lease-Up. The Owner will have achieved Not later than six months after
lease-up of at least 90% of the units in the completion of construction.
Project.
NOTES:
1. Deadlines set forth in this Schedule of Performance are subject to the enforced delay
provisions of Section 602 of the Agreement.
2. Extensions may be approved in writing pursuant to Section 309 of the Agreement.
3. Descriptions of items of performance and deadlines in this Schedule of Performance
are not intended to supersede more complete descriptions in the text of the Agreement; and in the
event of any conflict between the text of the Agreement and this Schedule, the text of the Agreement
will govern.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 4— SCHEDULE OF PERFORMANCE
351
ATTACHMENT NO. 5
PROJECT BUDGET
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 5 —PROJECT BUDGET
352
ATTACHMENT NO. 5
PROJECT BUDGET
Sources of Funds Construction Permanent
Bank Loan $ 14,000,000 $ 3,812,690
NPLH Loan 5,875,538
SNHP Loan 3,603,160 3,603,160
HOME Loan 2,830,697 2,830,697
OCHFT Loan 1,900,000 1,900,000
Inclusionary Loan 295,303* 295,303*
Tax Credit Equity(Federal) 2,434,212 8,114,041
Deferred Developer Fee 1,511,159 143,102
TOTAL SOURCES $26,574,531 $ 26,574,531
DEVELOPMENT COSTS:
Property Acquisition $ 3,180,000**
Construction Costs 14,707,125
Hard Cost Contingency 719,175
Loan Interest and Fees 826,947
Soft Costs 4,085,440
Soft Cost Contingency 375,844
Developer Fee 2,680,000
TOTAL DEVELOPMENT COSTS: $ 26,574,531
* Includes approx. $126,000 in interest accrued on $2,100,000 Inclusionary Acquisition Loan
from January 29, 2020 to Closing (to be added to principal amount of new Inclusionary Note).
** Includes approx. $54,000 in interest accrued on LMIHAF Acquisition Loan from January 29,
2020 to Closing (to be paid at Closing) plus approx. $126,000 interest on Inclusionary
Acquisition Loan (to be added to principal at Closing).
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 5 —PROJECT BUDGET
353
ATTACHMENT NO. 6
METHOD OF FINANCING
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 6—METHOD OF FINANCING
354
ATTACHMENT NO. 6
METHOD OF FINANCING
This Method of Financing is Attachment No. 6 to the Affordable Housing Agreement dated as of
January 5, 2021 ("Agreement"), among the City of Huntington Beach ("City"), the Huntington
Beach Housing Authority ("Authority") and Beach Housing Partners LP ("Owner"), relating to
Owner's construction of a 43-unit multifamily housing project(one of which units will be a manager
unit), to be rented, at affordable rents, to extremely low and very low income households.
The Project will be financed using the HOME Loan and the Inclusionary Loan from the City and the
additional sources described in Sections 3 and 4 below. Owner may utilize other financing sources
approved by the City, so long as such alternative financing does not result in increased costs or
reduced revenue to the City.
a. Subject to the terms and conditions of the Agreement and this Method of Financing,
the HOME Loan in the anticipated principal amount of$2,830,697 will be funded at Closing and
will convert to permanent financing at Conversion. The Agreement is intended to outline the general
terms, conditions, structure, and pricing of the contemplated transaction. Based upon a preliminary
review of the Development Costs and financing sources proposed by Owner,the City anticipates that
it would provide a loan of HOME Program funds in the amount of $2,830,697. However, this
conditional commitment of HOME Program funds is expressly subject to the City's completion of
the loan underwriting and subsidy-layering analysis required pursuant to Section 92.250 of the
HOME Regulations. In no event will the HOME Loan amount exceed$2,830,697. A portion of the
HOME Loan in the amount of$900,000 will be used to repay the principal balance of the LMIHAF
Acquisition Loan in full at Closing and the remainder of the HOME Loan in the amount of
$[1,930,697] will be applied to repayment of the principal balance of the Inclusionary Acquisition
Loan at Closing. The HOME Loan will be repaid during the Permanent Period from Residual
Receipts according to the terms and conditions of the HOME Note.
The interest accrued on the LMIHAF Acquisition Loan from its funding on January 20,2020 through
Closing will be paid in full at Closing from Owner's other financing sources.
The interest accrued on the $2,100,000 Inclusionary Acquisition Loan from its funding on January
20, 2020 through Closing will be added to the $[169,303] in unpaid principal balance of the
Inclusionary Acquisition Loan at Closing, which total amount will become the original principal
amount of the Inclusionary Loan.The Inclusionary Loan will be repaid during the Permanent Period
from Residual Receipts according to the terms and conditions of the Inclusionary Note.
1. Definitions. Any capitalized term not otherwise defined herein has the meaning
ascribed to such term in the Agreement.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 6—METHOD OF FINANCING
355
"Construction Period" means the time period that begins at Closing and ends at
Conversion.
"Conversion" means the date on which the conditions for funding of the Bond
Permanent Loan have been met or waived by the Bank, and the outstanding balance
of the Bond Construction Loan has been paid in full.
"Permanent Period" means the time period that begins at Conversion.
2. Total Development Costs. The parties estimate that the total Development Costs for
the Project will be approximately$26,574,531.
3. Sources of Construction Financing.
The Parties anticipate that the Development Costs for the Project will be financed during the
Construction Period with the following combinations of funds. Owner must make every reasonable
effort to structure the terms of the construction financing in a way that will minimize the amount of
the HOME Loan needed to fill the financing gap.
(a) A construction loan from [ ] to Owner, in the approximate
original principal amount of$14,000,000, to be secured by a first deed of
trust ("Bond Construction Loan").
(b) A loan of Special Needs Housing Program funds ("SNHP Loan") from the
California Housing Finance Agency to Owner in the original principal
amount of$3,603,160, to be secured by a second deed of trust.
(c) The HOME Loan from the City to Owner in the original principal amount of
$2,830,697 ("HOME Loan"), to be secured by a third deed of trust.
(d) A loan of Orange County Housing Finance Trust Funds ("OCHFT Loan")
from Orange County Housing and Community Development to Owner in the
original principal amount of$1,900,000, to be secured by a fourth deed of
trust.
(e) The loan of Affordable Housing Trust Funds from the City to Owner in the
approximate principal amount of $295,303 ("Inclusionary Loan"), to be
secured by a fifth deed of trust.
(f) Costs deferred to payment at Conversion, consisting of a portion of the
Developer Fee in the amount of$1,368,057.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 6—METHOD OF FINANCING
356
(g) Owner Equity consisting of: (i) advances and capital contributions made by
Owner's Limited Partner, in the approximate amount of$2,434,212 and (ii)
the deferral of a portion of the Developer Fee in the amount of$143,102
("Deferred Developer Fee"), which will be paid from the cash flow of the
Project.
(h) Owner will be solely responsible during the Construction Period to provide
funds if and as needed to pay for cost overruns and contingencies not
otherwise funded by the sources of funds as described herein.
4. Sources of Permanent Financing.
The Parties anticipate that the Development Costs of the Project will be financed during the
Permanent Period with the following combinations of funds. Owner must make every reasonable
effort to structure the terms of the permanent financing in a way that will minimize the amount of the
HOME Loan needed to fill the financing gap.
(a) A permanent loan from [ ], in the approximate original
principal amount of$3,812,690,to be secured by a first deed of trust("Bond
Permanent Loan").
(b) A loan of No Place Like Home funds("NPLH Loan") from Orange County
Housing and Community Development to Owner in the original principal
amount of$5,875,538, to be secured by a second deed of trust.
(c) The SNHP Loan described in paragraph 3(b) above, to be secured by a third
deed of trust.
(d) The HOME Loan described in paragraph 3(c) above, to be secured by a
fourth deed of trust.
(e) The OCHFT Loan described in paragraph 3(d)above,to be secured by a fifth
deed of trust.
(f) The Inclusionary Loan described in paragraph 3(e)above,to be secured by a
sixth deed of trust.
(g) Owner Equity, consisting of(1) the Deferred Developer Fee described in
paragraph 3(g) above (to be paid by Owner to the extent available from the
cash flow of the Project) plus (2) the initial Limited Partner's Capital
Contribution described in paragraph 3(g) above and an additional Limited
Partner's Capital Contribution in the approximate amount of$5,679,829.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 6—METHOD OF FINANCING
357
5. Project Budget. The Parties anticipate that all Development Costs for the Project
will be as set forth in the Project Budget attached to the Agreement as Attachment No. 5.The Project
Budget will be subject to change from time to time, subject to the prior written approval of the City,
which approval shall not be unreasonably withheld or delayed, upon which approval the Project
Budget will be replaced by the approved revised Project Budget. Within the time provided in the
Schedule of Performance, Owner will obtain a written commitment for the Bond Permanent Loan
reasonably acceptable to the City and will demonstrate,to the satisfaction of the City,that all Owner
Equity will be available for payment of Development Costs when and as required by this Method of
Financing.
6. Evidence of Financing. The sum of the financing sources described in Section 3
above must, at all times,be sufficient to pay all Development Costs as set forth in the most recently
approved Project Budget. Before the Closing, Owner will submit for City review and approval
evidence of such financing, including: (a)copies of all documents required by the Bank to obtain the
Bond Construction Loan; (b) the Limited Partnership Agreement and all amendments thereto, and
other documentation necessary to evidence the availability of the Owner Equity; (c) a written
commitment for the Bond Permanent Loan; and, (d)all other documents reasonably required by the
City. The City will not unreasonably withhold its approval of Owner's evidence of financing.
7. HOME Loan.
(a) In accordance with and subject to the terms and conditions of the Agreement
and this Method of Financing,the City agrees to make the HOME Loan to Owner and Owner agrees
to borrow such funds for the payment of Development Costs.
(b) Owner hereby acknowledges that the HOME Loan is a"gap"loan,the amount
of which will be confirmed following completion of the subsidy layering analysis required by the
HOME Regulations and is not to exceed the amount needed to bridge the gap between the total
Development Costs and the maximum construction financing set forth in Section 3 above,but in any
event not to exceed$2,830,697.If at any time Owner obtains additional financial assistance,Owner
will promptly notify the City. The City will determine in City's reasonable discretion if such
additional assistance would result in an over-subsidy of the Project, in which case, the City and
Owner will mutually agree upon appropriate procedures for reducing the HOME Loan to eliminate
the over-subsidy.
(c) Owner must use the HOME Loan exclusively to pay Development Costs
identified in the Project Budget.
(d) At the Closing for the Project, the City and Owner will execute and deliver
such instruments and documents as may be necessary to evidence and secure the HOME Loan
consistent with the terms of the Agreement and this Method of Financing, and in a form that is
acceptable to the City, including the following instruments:
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 6 —METHOD OF FINANCING
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(1) the HOME Regulatory Agreement;
(2) the HOME Note;
(3) the HOME Deed of Trust;
(4) the Assignment of Agreements; and
(5) the Environmental Indemnity.
8. Subordination.
(a) Each of the HOME Loan documents, but not the HOME Regulatory
Agreement, will be subordinate to the Bond Construction Loan, the Bond Permanent Loan, the
NPLH Loan, and the SNHP Loan and each of the Inclusionary Loan Documents, but not the
Amended and Restated Agreement Containing Covenants, will be subordinate to the Bond
Construction Loan, the Bond Permanent Loan, the NPLH Loan, the SNHP Loan, and the OCHFT
Loan;provided,that the subordination agreements contain written commitments reasonably designed
to protect the City's investment in the event of a default. Such written commitments will provide for
one or more of the following rights: (1) a right to cure a default on the Senior Loan; (ii) a right to
negotiate with the senior lender after notice of default and prior to the senior lender commencing
foreclosure proceedings;(Ili)a right to purchase the Property at any time after a default on the Senior
Loan; and/or(iv) an agreement that if prior to foreclosure of the Senior Loan,the City takes title to
the Property and cures the default on the Senior Loan,the senior lender will not exercise any right it
may have to accelerate the Senior Loan by reason of the transfer of title to the City.
(b) At the Closing, the City Manager or designee will execute subordination
agreements in a form that is consistent with applicable laws and regulations governing subordination
of City loans and this Method of Financing and that is mutually acceptable to the City Manager or
designee.
9. Recordation. Upon the Closing, the Title Company shall record the HOME Loan
recordable documents and the Inclusionary Loan recordable documents in accordance with
instructions provided by the City, and shall be prepared to issue to the City ALTA lender's policies
of title insurance, insuring the priority of the HOME Deed of Trust and the Inclusionary Deed of
Trust in amounts and with endorsements as the City may determine is appropriate.
10. Disbursement of HOME Loan. The HOME Loan will be disbursed at Closing for
repayment of the principal balance of the LMIHAF Acquisition Loan and repayment of a portion of
the principal balance of the Inclusionary Acquisition Loan as described earlier in this Method of
Financing. The HOME Loan funds will be held by the City, to be disbursed as provided in this
Method of Financing. The HOME Loan funds are not pledged to the Bank or any other lender, nor
will they constitute security for the Bond Construction Loan or any other loan.
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11. Repayment Terms. The repayment terms of the HOME Loan and the Inclusionary
Loan are set forth in the form of HOME Note and the form of Inclusionary Note attached to the
Agreement as Attachments No. 8 and 10, respectively.
12. Conditions Precedent to Closing
(a) The Closing is conditioned upon each of the following occurring to the
satisfaction of the City prior to the time for the Closing set forth in the Schedule of Performance:
(i) Owner submits evidence that the final working drawings have been
approved by the City;
(ii) Owner submits a copy of the fully executed Development Agreement
between Owner and Jamboree Housing Corporation.
(iii) Owner submits a copy of the fully executed general construction
contract with a licensed general contractor approved by the City in City's reasonable discretion,
covering all construction required by the Agreement and the approved final working drawings;
(iv) Owner submits a final Project Budget,current as of the Closing date,
demonstrating to the reasonable satisfaction of the City the availability of sufficient funds to pay all
Development Costs, including the City's reasonable legal fees;
(v) Owner submits evidence reasonably satisfactory to the City that Owner
has firm financing commitments sufficient to pay all Development Costs in accordance with this
Method of Financing;
(vi) Owner submits copies of final loan documents for each of the loans
described in Section 3 above;
(vii) Owner submits fully executed copies of the Amended and Restated
Limited Partnership Agreement (admitting Investor Limited Partner) or other final limited
partnership agreement, all amendments thereto, and related documents;
(viii) Owner submits evidence of the insurance policies and endorsements
required by Section 310b of the Loan Agreement;
(ix) Owner submits evidence reasonably satisfactory to the City that Owner
has satisfied all conditions precedent to the issuance of all permits necessary for the construction of
the Project, other than payment of fees(for which funds have been budgeted in the Project Budget);
(x) Owner submits an estimated draw schedule for the funding of
Development Costs in accordance with the Agreement and this Method of Financing;
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(xi) Owner deposits into Escrow payment and performance bonds,
including a multiple-obligee rider naming the City of Huntington Beach, in a form approved by the
City in City's reasonable discretion;
(xii) Owner submits for City review and reasonable approval a Maintenance
Program for the Project in accordance with the HOME Regulatory Agreement, including a
Maintenance Budget;
(xiii) Owner submits for City review and reasonable approval an Annual
Project Budget for the Project's first year of operation;
(xiv) Owner submits for City review and reasonable approval a Management
Plan and Management Agreement for the Project in accordance with the HOME Regulatory
Agreement;
(xv) Owner submits for City review and reasonable approval a Social
Services Plan,including a proposed budget,describing the social service programs to be provided to
the Project and identifying the service providers;
(xvi) Each of the lenders and the City agree on a form of Subordination
Agreement for the HOME Loan Documents and the Inclusionary Loan Documents;
(xvii) Title Insurance Company is prepared to issue the title insurance policy
required by the City;
(xviii) Owner duly executes and delivers to the City all of the HOME Loan
documents required by Section 7 of this Method of Financing;
(xix) Owner duly executes and delivers to the City the Inclusionary Note,the
Inclusionary Deed of Trust, the Assignment of Agreements, the Environmental Indemnity, and the
Amended and Restated Agreement Containing Covenants;
(xx) The City deposits into Escrow the LMIHAF Acquisition Note and the
Inclusionary Acquisition Note to be marked as cancelled by Escrow Agent at Closing,reconveyances
of the LMIHAF Acquisition Trust Deed and the Inclusionary Acquisition Trust Deed,a release of the
Memorandum of Option, a release of the Agreement Containing Covenants, a release of the Notice
of Restrictions, a termination of the Assignment of Agreements from Owner to the City dated
January 23,2020,a termination of the Assignment of Agreements from Owner to the Authority dated
January 23,2020, and a termination of the Option Agreement and Joint Escrow Instructions among
the Owner, City and Authority dated January 28, 2020; and
(xxi) The City determines that Owner is not in default of its obligations to
the City under the Agreement.
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Notwithstanding the foregoing,the City may waive any of the foregoing conditions precedent to the
Closing. A waiver of any of the foregoing conditions will not operate in any way as a waiver or
estoppel with respect to any subsequent or other failure to comply with such condition,or any other
condition contained in this Section 12, the Agreement or any of the HOME Loan or Inclusionary
Loan documents.
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ATTACHMENT NO. 7
HOME REGULATORY AGREEMENT
(behind this page)
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Recording Requested by
and When Recorded Return to:
City Clerk, City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
SPACE ABOVE THIS LINE FOR RECORDER'S USE
GOVERNMENT BUSINESS
Free Recording Requested
(Govt. Code §27383)
APN: 159-031-18
AGREEMENT CONTAINING HOME PROGRAM REQUIREMENTS
(24 CFR § 92.504)
THE CITY OF HUNTINGTON BEACH,a municipal corporation of the State of California
("City") and BEACH HOUSING PARTNERS LP, a California limited partnership ("Owner"), in
furtherance of the regulations issued by the United States Department of Housing and Urban
Development set forth in 24 CFR Part 92(the"HOME Regulations"),hereby agree as follows as of
January 5, 2021.
WHEREAS, City is responsible for administering the use of certain funds made available to
the City of Huntington Beach by the United States Department of Housing and Urban Development
("HUD")under the HOME Investment Partnerships Program (the "HOME Program"); and
WHEREAS, Owner is the owner of that certain real property (the "Property") located at
18431 Beach Boulevard,Huntington Beach, California,more particularly described in Exhibit"A"
which is attached hereto and incorporated herein by this reference; and
WHEREAS, pursuant to an Affordable Housing Agreement between the City and Owner
dated as of January 5, 2021, as amended from time to time(the"Affordable Housing Agreement"),
the City has agreed to use its HOME Funds to fund a loan to Owner (the "HOME Loan"), for
payment of a portion of the development costs for the construction on the Property of a 43-unit
multi-family housing project to be used as affordable rental housing, one of which units will be an
on-site manager unit (the "Project"); and
WHEREAS,the parties mutually desire to comply with all applicable HOME Regulations.
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NOW, THEREFORE, the City and Owner hereby agree as follows:
1. Term of this Agreement. In accordance with the formula set forth in 24 CFR
92.252(e) and as required by 24 CFR 92.504 (c)(3)(ix), this Agreement shall remain in effect for
twenty(20)years following the date the City of Huntington Beach issues a certificate of occupancy
for the Project (the "Affordability Period").
2. Affordable Housing Agreement. The Affordable Housing Agreement, as it may be
amended from time to time,including all the attachments appended thereto,is incorporated herein by
this reference.Any capitalized term not otherwise defined herein shall have the meaning ascribed to
such term in the Affordable Housing Agreement.
3. Use of HOME Funds. 24 CFR 92.504(c)(3)(1).
The HOME Funds shall be used exclusively for the payment of costs incurred in connection
with the development of the Project (sometimes referred to herein as the "Project Activities") in
accordance with the Affordable Housing Agreement.
(A) Schedule. The development of the Project shall be accomplished within the time
provided in the Schedule of Performance,which is attached to the Affordable Housing Agreement as
Attachment No. 4.
(B) Tasks and Budget. The tasks to be performed with the use of the HOME Funds, and
the Project Budget,which specifies the line items for which HOME Funds will be used,are set forth
in the Project Budget attached to the Affordable Housing Agreement as Attachment No. 5.
4. Affordability. 24 CFR 92.252; 92.504(c)(3)(ii).
a. The Project will be used exclusively as affordable rental housing as required
by the various regulatory agreements relating to the Project. U units shall be
designated as floating HOME units ("HOME-assisted Units") and restricted as follows:
(_) one-bedroom units for Very Low Income (Low HOME Income) with
income not to exceed fifty (50%) of median family income as determined by the United States
Department of Housing and Urban Development.
b. The maximum rents,including a reasonable utility allowance for utilities and
services (excluding telephone)to be paid by Very Low Income Households must meet either(a) or
(b) of the following rent requirements:
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(a) The rent does not exceed the lesser of(1) 30 percent of the
annual income of a family whose income equals 50 percent of the median income for the area, as
determined by HUD,with adjustments for smaller and larger families,as provided by HUD; (2)the
fair market rent for existing housing for comparable units in the area as established by HUD under 24
CFR 888.111; or(3) 30 percent of the adjusted income of a family whose annual income equals 65
percent of the median income for the area, as detennined by HUD,with adjustments for the number
of bedrooms in the unit; or
(b) The rent does not exceed 30 percent of the family's adjusted
income. If the unit receives Federal or State project-based rental subsidy and the Very Low Income
family pays as contribution toward rent an amount that is not more than 30 percent of the family's
adjusted income,then the maximum rent(i.e.,tenant contribution plus project-based rental subsidy)
is the rent allowable under the Federal or State project-based rental subsidy program.
C. The HOME rent limits provided by HUD will include average occupancy per
unit and adjusted income assumptions.
d. The parties agree that if the Project were placed in service on the date of this
Agreement, the maximum gross rents that would be paid by, and the HOME-assisted Units that
would be occupied by,Very Low Income households pursuant to Section 4.b. would be as set forth
in the table of rents appended as Exhibit B. The HOME rents provided in Exhibit B will be adjusted
to not exceed the maximum rent limits provided by HUD at the date of initial occupancy and will be
adjusted thereafter not more frequently than once per year upon HUD's annual determination of
maximum HOME rent limits and in accordance with 24 CFR part 92.252(f) and (g).
e. Rents for the HOME-assisted Units will remain affordable to Very Low
Income Households pursuant to this Agreement for the term set forth in Section 1 of this Agreement.
f. Failure to comply with the affordability requirements of this Agreement is an
event of default under the terms of the HOME Loan. Pursuant to the HOME Note evidencing the
HOME Loan, subject to the right to cure, the HOME Loan will be due and payable immediately if
the rents for HOME-assisted Units do not meet the affordability requirements of this Agreement.
5. Project Requirements. 24 CFR 92 Subpart F (92.250 - 92.258, 92.504(c)(3)(111)).
Owner shall comply with all applicable requirements set forth in Subpart F of the HOME
Regulations, as provided elsewhere in this Agreement and also including the following:
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a. Maximum Per-Unit Subsidy. 24 CFR 92.250. The amount of the HOME loan
does not exceed the per unit dollar limits established by HUD pursuant to section 22 1(d)(3)(ii)of the
National Housing Act,as implemented in regulations issued by HUD,24 CFR 221.514(b)(1)and(c).
b. Property Standards. 24 CFR 92.251.
(1) The development of the Property shall comply with the City's building
code and all other applicable local codes,rehabilitation standards,ordinances and zoning ordinances
in effect at the time of project completion, and the Property shall be decent, safe and sanitary shall
conform to the following codes that have been adopted by the City of Huntington Beach: Uniform
Building Code(UBC)as adopted by the State of California(California Building Code [Title 24 Part
2], National Electrical Code (NEC), Uniform Plumbing Code (UPC), Uniform Mechanical Code
(UMC) and California Energy Code (CEC).
(ii) The Property shall comply with the accessibility requirements at 24
CFR Part 8,which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)and,if
applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily
dwellings,as defined at 24 CFR 100.201,which implements the Fair Housing Act(42 U.S.C. 3601-
3619).
C. Rental Housing Affordability. 24 CFR.92.252. Any rent charged to a tenant
of HOME-assisted Units shall be affordable to Very Low Income tenants, as provided in Section 4,
above.
d. Tenant and Participant Protections.24 CFR 92.253. The Owner shall comply
with the tenant protection provisions of 24 CFR 92.253.
e. Homeownership Requirements. 24 CFR 92.254. Not applicable to this
project.
f. Converting Rental Units to Homeownership Units for Existing Tenants. 24
CFR 92.255. Not applicable to this project.
g. Faith Based Activities. 24 CFR 92.257. Owner will comply with the
restrictions on the use of HOME Funds for faith based activities as set forth in Section 92.257.
Owner hereby certifies that HOME Funds will not be used for the acquisition, construction or
rehabilitation of structures to the extent that those structures are used for inherently religious
activities. Owner shall use the HOME Funds for the construction of structures only to the extent the
structures are used for conducting eligible activities under 24 CFR Part 92.
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h. Elder Cottage Housing Opportunity Units. 24.CFR 92.258. Not applicable to
this project.
6. Property Standards. 24 CFR 92.504 (c)(3)(iv).
a. Housing Quality Standards. Owner shall maintain the housing in compliance
with applicable property standards as required by Section 92.251.
b. Lead-based Paint. The Project shall comply with the lead-based paint
standards in Section 92.355. Housing assisted with HOME Program funds constitutes HUD-
associated housing for the purpose of Lead-Based Paint Poisoning Prevention Act(42 U.S.C. Section
4821,et seq.)and is,therefore, subject to 24 Code of Federal Regulations Part 35. Accordingly,and
pursuant to Section 92.355 of the Regulations,the Owner hereby agrees to and shall be responsible
for testing and abatement activities specified in the Lead-Based Paint Poisoning Prevention Act and
the regulations set forth at 24 Code of Federal Regulations Part 25 with respect to the construction of
the Property, if applicable.
7. Affirmative Marketing Requirements. 24 CFR 92.351; 92.504(c)(3)(v).
Owner hereby agrees to comply with the City's minority and women business outreach
program in accordance with 24 CFR 92.504 (c)(3)(v).
8. Records and Reports. 24 CFR 92.504(c)(3)(vi); 92.508; 92.61.
To assist the City in meeting its recordkeeping and reporting requirements, Owner shall
prepare, maintain and submit to the City, as appropriate, the following records and reports:
a. Records which demonstrate that the Property meets the property standard
specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355;
b. Records which demonstrate that each family occupying HOME-assisted Units
is income eligible in accordance with 24 CFR 92.203;
C. Records which demonstrate that with respect to the HOME-assisted Units the
Property meets the affordability and income targeting requirements of 24 CFR 92.252 for the Term
of this Agreement. Records shall be kept for each family in HOME-assisted Units;
d. Records which demonstrate that each lease for HOME-assisted Units complies
with the tenant and participant protections,as specified in 24 CFR 92.253. Records shall be kept for
each such family;
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e. Equal opportunity and fair housing records, including, as applicable:
(i) data on the extent to which each racial and ethnic group and single-
headed household (by gender of household head) have applied for, participated in, or benefitted
from, any program or activity funded in whole or in part with HOME funds;
(ii) documentation of actions undertaken to meet the requirements of 24
CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended
(12 U.S.C. 1701u);
(iii) documentation of the actions the City has taken to affirmatively further
fair housing;
f. Affirmative Marketing and MBE/WBE records, including, as applicable:
(1) if applicable, records documenting compliance with the affirmative
marketing procedures and requirements of 24 CFR 92.351;
(ii) if applicable,documentation and data on the steps taken by Owner to
implement the City's outreach programs to minority-owned and female-owned businesses including
data indicating the racial/ethnic or gender character of each business entity receiving a contract or
subcontract of$25,000 or more paid,or to be paid, with HOME funds;the amount of the contract or
subcontract,and documentation of the Owner's affirmative steps to assure that minority business and
women's business enterprises have an equal opportunity to obtain or compete for contracts and
subcontracts as sources of supplies, equipment, construction and services;
(iii) if applicable, records which demonstrate compliance with the
requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition,
including project occupancy lists identifying the name and address of all persons occupying or
moving into the Property on and after the date on which Owner obtained site control;
(iv) if applicable, records demonstrating compliance with the labor
requirements of 24 CFR.92.354, including contract provisions and payroll records;
(v) if applicable, records demonstrating compliance with the lead-based
paint requirements of 24 CFR 92.355;
(vi) if applicable, records which support any exceptions to the conflict of
interest prohibition pursuant to 24 CFR 92.356;
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(vii) debarment and suspension certifications required by 24 CFR Parts 24
and 91.
g. Records,data and documentation as required for the City's performance of its
reporting obligations under the Federal Funding Accountability and Transparency Act of 2006
(FFATA), to the full extent applicable to the Project, which may include but is not necessarily
limited to reporting of executive compensation received by executives of Owner and/or executives of
Owner's partners or members and/or executives of partners or members of any of Owner's partners
or members.
h. Owner shall retain all books and records relevant to the Affordable Housing
Agreement for a minimum of five years after the project completion date, except that records of
individual tenant income verifications,project rents and project inspections shall be retained for the
most recent five-year period until five years after the affordability period terminates, or until the
conclusion or resolution of any and all audits or litigation relevant to the Affordable Housing
Agreement, whichever is later. The City, HUD and the Comptroller General of the United States,
and any of their representatives, shall have the right of access to any pertinent books, documents,
papers or other records of the Owner,in order to make audits,examinations,excerpts and transcripts.
i. Owner shall retain at all times the documentation submitted pursuant to 24
C.F.R. 92.203(a)(1), which provided the basis for determining income eligibility.
9. Enforcement of the Agreement. 24 CFR 92.504(c)(3)(vii).
The Affordable Housing Agreement and all of its attachments, shall be enforceable by the
City in accordance with the terms thereof. Each of the Affordable Housing Agreement, this
Agreement, the HOME Note and the HOME Deed of Trust provide a means of enforcement if the
Owner is in breach of its obligations hereunder and thereunder,including liens on the Property,deed
restrictions and covenants running with the land. Subject to applicable notice and cure provisions,
the City, at its option, may commence an action for specific performance of the terms of this
Agreement pertaining to such default. Failure to comply with the requirements of this Agreement is
an event of default under the terms of the Affordable Housing Agreement, HOME Note and the
HOME Deed of Trust. Notwithstanding anything to the contrary stated herein, a breach of this
Agreement by Owner or its successors and assigns shall in no way defeat, invalidate or impair the
obligation or priority of any mortgage or deed of trust encumbering the Property.
10. Requests for Disbursement of Funds. 24 CFR 92.504(c)(3)(viii).
Owner shall not request disbursement of HOME funds until the funds are needed to pay
eligible costs. The amount of each disbursement request shall be limited to the amount needed. The
City shall have the right to disapprove any request if the City reasonably determines the request is for
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an ineligible item or is otherwise not in compliance with or inconsistent with the Loan Agreement
and this Agreement.
11. Duration of Agreement. 24 CFR 92.504(c)(3)(ix). The Agreement shall remain in
effect for the period of affordability required pursuant to 92.252 as set forth in Section 1 of this
Agreement.
12. Other Program Requirements. 24 CFR 92, Subpart H (92.350 - 92.358).
Owner shall comply with all applicable federal requirements set forth in Subpart H of the
HOME regulations, including the following:
a. Other Federal Requirements and Nondiscrimination.24 CFR 92.350. Owner
acknowledges that 24 CFR 92.350 provides that the Federal requirements set forth in 24 CFR Part 5,
subpart A,are applicable to participants in the HOME program,and that these Federal requirements
include the following:
(i) Nondiscrimination and Equal Opportunity.
(a) Civil Rights, Fair Housing, and Age and Disability
Discrimination Acts Assurances:
During the performance of the Affordable Housing Agreement and to the fullest extent
applicable to senior housing,Owner shall assure that no otherwise qualified person shall be excluded
from participation or employment,denied program benefits,or be subjected to discrimination based
on race, color, national origin, sex, actual or perceived sexual orientation, gender identity, marital
status,age,handicap,religion,religious preference or source of income(including but not limited to
Section 8 Rental Assistance, Temporary Assistance for Needy Families (TANF), Supplemental
Security Income (SSI), Social Security Disability Insurance (SSDI) or earnings from seasonal
employment),under any program or activity funded by this Agreement,as required by state law,the
Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 et seq.,
Executive Order 11063 as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652
and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing
regulations at 24 CFR part 107,title VI of the Civil Rights Act of 1964(42 U.S.C. 2000d-2000d-4)
(Nondiscrimination in Federally Assisted Programs)and implementing regulations at 24 CFR part 1,
the Age Discrimination Act of 1975 (42 U.S.C.6101-6107)and implementing regulations at 24 CFR
part 146, section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing
regulations at 24 CFR part 8, Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42
U.S.C. 3601-20)and all implementing regulations,and the Age Discrimination Act of 1975,and all
implementing regulations.
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(b) Training, Employment, and Contracting Opportunities
Assurance of Compliance:
The Project Activities to be performed under the Agreement are on a project assisted under a
program providing direct federal financial assistance from HUD which is subject to the requirements
of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu
("Section 3"), and the regulations issued by HUD to implement Section 3 (24 CFR Part 135) (the
"Section 3 Regulations"). Pursuant to 24 CFR 135.3,the requirements of the Section 3 Regulations
apply to the recipient of such financial assistance only where the amount of federal assistance
exceeds $200,000, and apply to a contractor or subcontractor of such recipient only where the
amount of assistance exceeds $200,000 and the amount of the contract or subcontract exceeds
$100,000. Owner shall provide,to the greatest extent feasible,training,employment and contracting
opportunities generated by the financial assistance to low-and very-low income persons and business
concerns owned by low- or very-low income persons, or which employ low- or very-low income
persons.
(c) MBE/WBE Affirmative Action Outreach Program:
Owner hereby agrees to comply with the City's minority and women business outreach
program in accordance with Executive Order 11625,as amended by Executive Order 12007(3 CFR,
1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises);
Executive Order 12432 (3 CFR, 1983 Comp.,p. 198)(Minority Business Enterprise Development);
and Executive Order 1213 8,as amended by Executive Order 12608(3 CFR, 1977 Comp.,p.393 and
3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise).
(ii) Disclosure Requirements. The disclosure requirements and
prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR Part 87; and the
requirements for funding competitions established by the Housing and Urban Development Reform
Act of 1989 (42 U.S.C. 3531 et seq.).
(iii) Debarred,Suspended or Ineligible Contractors. The prohibitions at 24
CFR Part 24 on the use of debarred, suspended or ineligible contractors.
(iv) Drug-free Workplace. The Drug-Free Workplace Act of 1988 (41
U.S.C. 701 et seq.) and HUD's implementing regulations at 24 CFR Part 24.
b. Affinnative Marketing. 24 CFR 92.3 51. Owner shall comply with the City's
Affirmative Marketing requirements.
C. Displacement,Relocation and Acquisition. 24 CFR 92.353. Does not apply
to this Project.
d. Labor. 24 CFR 92.354. Does not apply to this Project.
e. Lead-based Paint. 24 CFR 92.355. The Property shall comply with the lead-
based paint standards in 92.355, as provided in Section 6.b., above.
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f. Conflict of Interest. 24 CFR 92.356.
(i) Interest of Employees, Officers and Officials. No employee, agent,
consultant,officer or elected official or appointed official of the City,or employee,agent,consultant
or officer of Owner, and no other public official of the City who exercises any functions or
responsibilities with respect to the activities assisted with HOME funds or who are in a position to
participate in a decision making process or gain inside information with regard to these activities,
during their tenure and for one year thereafter, may obtain a financial interest or benefit from a
HOME assisted activity or have an interest in any contract or subcontract,or agreement with respect
thereto, or the proceeds thereunder, either for themselves or those with whom they have family or
business ties. Owner shall incorporate, or cause to be incorporated, in all such contractors or
subcontracts a provision prohibiting such interest pursuant to the purposes of this Section.
Fulfillment of"sweat equity"obligations as defined in Section 8201 of the HOME regulations shall
not be considered a violation of this prohibition.
(ii) Prohibition Against Occupying HOME-Assisted Units. No officer,
employee, agent, official or consultant of Owner may occupy a HOME-assisted Unit.
(iii) Consultant Activities. 24 CFR 92.358. No person providing
consultant services in an employer-employee type relationship shall receive more than a reasonable
rate of compensation for personal services paid for with HOME funds. In no event,however, shall
such compensation exceed the limits in effect under the provisions of any applicable statute (e.g.,
annual HUD appropriations acts which have set the limit at the equivalent of the daily rate paid for
Level IV of the Executive Schedule). Such services shall be evidenced by written agreements
between the parties which detail the responsibilities, standards and compensation. Consultant
services provided under an independent contractor relationship are not subject to the compensation
limitation of Level IV of the Executive Schedule.
13. Lobbying Prohibition. 24 CFR 91.225.Owner hereby certifies to City,under penalty
of perjury, under the terms of applicable federal law,that at all applicable times before, during and
after the term of this Agreement, that:
a. No Federal appropriated funds have been paid or will be paid,by or on behalf
of it,to any person for influencing or attempting to influence an officer or employee of any agency,a
Member of Congress,an officer or employee of Congress,or an employee of a Member of Congress
in connection with the awarding of any Federal contract,the making of any Federal grant,the making
of any Federal loan,the entering into of any cooperative agreement,and the extension,continuation,
renewal,amendment,or modification of any Federal contract,grant,loan,or cooperative agreement;
and
b. If any funds other than Federal appropriated funds have been paid or will be
paid to any person for influencing or attempting to influence an officer or employee of any agency,a
Member of Congress,an officer or employee of Congress,or an employee of a Member of Congress
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
.ATTACHMENT NO. 7 —HOME REGULATORY AGREEMENT
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in connection with this Federal contract,grant,loan,or cooperative agreement,it will complete and
submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its
instructions; and
C. Owner will require that the above stated language in paragraphs a. and b. be
included in the award documents for all subawards at all tiers, including subcontracts, subgrants,
loans, contracts, and cooperative agreements concerning the subject matter of this Agreement; and
d. Further, Owner and all subawards at all tiers, including subcontracts,
subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this
Agreement,at all times, shall certify compliance with the provisions of 31 U.S.C. §1352 and any and
all terms and conditions of the Byrd Anti-Lobbying Amendment, as amended from time to time.
14. Management and Maintenance Requirements.
a. Owner covenants and agrees (for itself, its successors, its assigns, and every
successor in interest to the Property or any part thereof)that Owner,its successors and assigns shall
use the Property exclusively to provide affordable housing for Extremely Low and Very Low Income
households as provided in the Affordable Housing Agreement.
b. Prior to the Closing, Owner shall submit to the City a Management Plan
describing the proposed plans for managing and operating the Property. Approval of the
Management Plan by the City Manager or designee shall be a condition precedent to the Closing.
Owner shall manage and operate the Property in accordance with the approved Management Plan,
including such amendments as maybe approved in writing from time to time by Owner and the City
Manager or designee, for the entire Affordability Period.
The Management Plan, including such amendments as may be approved in writing by the City,shall
remain in effect for the term of this Agreement. The Owner shall not amend the Management Plan
or any of its components without the prior written consent of the City. The components of the
Management Plan shall include:
(1) Management Agent. The name and qualifications of the proposed
management agent for the Project("Management Agent"). The City shall approve or disapprove the
proposed Management Agent, in writing based on the experience and qualifications of the
Management Agent (such approval not to be unreasonably withheld, conditioned, or delayed).
(2) Management Program. A description of the proposed management,
maintenance, tenant selection and occupancy policies and procedures for the Units, which shall
include procedures to assure that advertising of the Units will reach a broad cross-section of
Huntington Beach residents.
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(3) Management Agreement. A copy of the proposed management
agreement specifying the amount of the management fee and the relationship and division of
responsibilities between the Owner and the Management Agent. The Owner's agreement with the
Management Agent shall provide that it is subject to termination by the Owner without penalty,upon
thirty(30) calendar days' prior written notice. The Owner hereby covenants and agrees that, if the
City determines in its reasonable judgment that the Project is not being operated and managed in
accordance with the Management Plan, the City may deliver notice to the Owner of the City's
determination that the Project's management practices do not conform to the Management Plan
("City Notice"), including a reasonably detailed explanation of such non-conformance. The City and
the Owner shall meet and confer in good faith to identify actions to be taken by the Owner to bring
its management practices into conformance with the Management Plan, which could include
replacing the Management Agent. The Owner shall have thirty(30)calendar days after receipt of the
City Notice (or such longer time as may be granted by the City in City's reasonable discretion) to
either change its management practices to conform to the Management Plan or replace the
Management Agent with a Management Agent approved by the City (such approval not to be
unreasonably withheld, conditioned, or delayed). The Owner shall promptly notify the City upon
learning that there is a change in the management or control of the Management Agent, and, if the
change is unsatisfactory to the City, the City shall be entitled to require the Owner to replace the
Management Agent in accordance with the terms of this paragraph.
(4) Tenant Lease or Rental Agreement. A copy of the proposed tenant
lease or rental agreement to be used in renting the Units. The tenant lease for the HOME-Assisted
Units shall include a HOME addendum in a form approved by the City (such approval not to be
unreasonably withheld, conditioned, or delayed).
(5) Annual Operating Budget. Within the time set forth in the Schedule
of Performance attached to the Affordable Housing Agreement and annually thereafter not later than
fifteen(15)calendar days prior to the beginning of the next fiscal or calendar year of the Project,the
Owner shall submit to the City for review and approval (such approval not to be unreasonably
withheld, conditioned, or delayed) a projected operating budget that shall include all necessary
operating expenses,current maintenance charges,expenses of reasonable upkeep and repairs,taxes
and special assessment levies, monitoring fees charged by the City and other lenders, prorated
amount required for insurance and all other expenses incident to the operation of the Project; and
shall show the expected revenues to pay such expenses,including annual debt service requirements
and reserve fund deposits and balances. After the Owner's initial projected operating budget
submittal, the Owner shall annually reconcile each previous year's projected budget with actual
operating results for the Project ("Budget Reconciliation"). In each Budget Reconciliation, the
Owner shall set forth an explanation for any major discrepancies between projected and actual
AFFORDABLE HOUSING AGREEMENT
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ATTACHMENT NO. 7 —HOME REGULATORY AGREEMENT
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budgets. For purposes of this Agreement, a"major discrepancy" shall mean a line item difference
between projected and actual budgets of twenty percent (20%) or more.
(6) Social Services Program. A description of the proposed social services
to be provided to the tenants, including the proposed scheduling of any classes or programs that will
be offered on a regular basis, a description of any selection criteria for determining who will be
eligible to receive the services, and a description of the proposed staffing level and qualifications of
the providers of the services.
C. The City shall not unreasonably withhold, condition or delay its approval of
any matter for which its approval is required hereunder. Any express disapproval shall be in writing
and contain the City's reasons for disapproval. Notwithstanding the foregoing, if the City has not
expressly approved or disapproved the Owner's projected operating budget within thirty (30)
calendar days after its submittal to the City,then the Owner shall provide a written notice to the City
that it intends to operate pursuant to the projected operating budget and the City shall have an
additional fifteen(15)calendar days within which to approve or disapprove such budget. If the City
has not expressly approved or disapproved the projected operating budget by the end of such
additional 15-calendar day period, then the Owner may operate the Project under its projected
operating budget so long as discretionary amounts do not exceed one hundred ten percent(110%)of
the amount of that line item in the previous year's approved operating budget.
d. Beginning on the date of first occupancy, for each fiscal year of the
Affordability Period, Owner shall also submit on a quarterly basis a quarterly report for the
management of the Project (the "Quarterly Report") in a form that is reasonably acceptable to the
City Manager or designee. The Quarterly Report shall include a profit and loss statement,budget to
date figures, and occupancy report. The City Manager or designee, in his or her sole discretion may
waive the requirement of the Quarterly Report for one or more quarterly reporting periods.However,
such waiver shall not operate to waive any subsequent requirement of the Quarterly Report for the
Restricted Period upon the City's written notice to Owner.
e. Prior to the Closing, Owner shall prepare and submit to the City for review
and approval a program (the"Maintenance Program") for the exterior and interior maintenance of
the Project. The Maintenance Program shall describe in reasonable detail the standards to be
followed in maintaining the interior and exterior of the improvements, including a schedule
indicating the proposed frequency of each element of maintenance,and shall include,at a minimum,
the following:periodic cleaning of the interior and exterior of the improvements,including windows;
removing graffiti; removing debris and waste materials and otherwise maintaining indoor and
outdoor areas of the Property; maintaining any lawns,plants, shrubs and trees or other landscaping
planted on the Property;performing inspections of all exterior features to determine whether repairs
are required; conducting periodic protective treatments such as rust removal and caulking;
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ATTACHMENT NO. 7—HOME REGULATORY AGREEMENT
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conducting repairs to facades,roof,doors,windows and other exterior features;maintaining fencing
and other security devices and systems;periodic repainting of the exterior;periodic repainting of the
interior units and common areas; periodic replacing of the interior unit carpets; checking building
systems, including, but not limited to the heating and cooling systems, smoke alarms and water
heaters;checking interior unit appliances;and monitoring interior unit bathrooms for mold/mildew.
The Maintenance Program, including any amendments proposed by Owner, shall be subject to the
reasonable approval of the City Manager or designee.
f. At all times during the Affordability Period, Owner shall maintain the
Property and the improvements in accordance with the approved Maintenance Program. To
implement this requirement, Owner agrees to budget sufficient funds to pay for all reasonably
anticipated costs (as indicated in the Annual Maintenance Budget). If Owner fails to maintain the
Property and the improvements in accordance with the approved Maintenance Program,and does not
cure such failure within thirty(30)days following notice from the City,the City shall have the right,
but not the obligation, to enter the Property, correct any violation, and hold Owner responsible for
the cost thereof,and such cost,until paid,shall constitute a lien on the Property;provided,however,
Owner shall have such additional time as may be reasonably necessary to cure such default provided
that Owner has commenced to cure within such thirty(30) day period and is diligently prosecuting
the cure to completion. Prior to undertaking any work to correct any such maintenance deficiency,
the City shall provide written notice that Owner must correct the deficiency within a reasonable time.
Owner shall have a reasonable time in which to comply following such notice from the City.
(Remainder of page left intentionally blank.)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
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377
IN WITNESS WHEREOF, the City and Owner have executed this Agreement. This
Agreement maybe executed in multiple counterparts,all of which shall constitute one and the same
instrument and each of which shall be deemed to be an original.
"CITY" "OWNER"
CITY OF HUNTINGTON BEACH BEACH HOUSING PARTNERS LP
a California limited partnership
By:
Oliver Chi Dated By: JHC-Beach LLC, a California limited
City Manager liability company
Its: Managing General Partner
ATTEST:
By: Jamboree Housing Corporation,
By: a California nonprofit public
Robin Estanislau benefit corporation
City Clerk
Its: Manager
APPROVED AS TO FORM:
By:
By: Michael Massie Dated
Michael Gates Chief Development Officer
City Attorney
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 7—HOME REGULATORY AGREEMENT
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Exhibit A
LEGAL DESCRIPTION OF PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN:159-031-18
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 7 —HOME REGULATORY AGREEMENT
EXHIBIT A—LEGAL DESCRIPTION
379
Exhibit B
Affordability Requirements
(24 CFR 92.252; 92.504(c)(3)(iii))
Owner shall submit its rent schedule and utility allowances thirty(30)days prior to initial lease-up of
the Project and on an annual basis thereafter. The City shall review and approve or disapprove the
proposed rent schedule and utility allowances for compliance with the maximum rent limitations
contained in 24 CFR 92.252.
The City will provide updated HUD income and rent limits to Owner as they become available. As
of the date of this Agreement, the applicable income and rent limits are as follows:
Orange County
2020 HOME Program Income Limits
Low HOME Income High HOME Income
Household Size (Very Low Income) (Low Income)
1 $44,850 $71,750
2 $51,250 $82,000
3 $57,650 $92,250
4 $64,050 $102,450
5 $69,200 $110,650
6 $74,300 $118,850
7 $79,450 $127,050
Orange County
2020 HOME Program Rent Limits
1-Bedroom 2-Bedroom 3-Bedroom
Low HOME Rent $1,201 $1,441 $1,665
(Very Low Income)
High HOME Rent $1,541 $1,852 $2,131
(Low Income)
For comparison purposes:
Fair Market Rent $1,785 $2,216 $3,098
65% Rent Limit $1,541 $1,852 $2,131
Owner shall be responsible for ensuring that the current operative HOME income and rent limits in
effect at the time of the tenant's rental application for a HOME-Assisted Unit will be used to
AFFORDABLE HOUSING AGREEMENT
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ATTACHMENT NO. 7 —HOME REGULATORY AGREEMENT
EXHIBIT B —AFFORDABILITY REQUIREMENTS
380
determine initial tenant eligibility and conformance with HOME affordability requirements and that
each tenant recertification is conducted using current HOME income and rent limits to assure
compliance with HOME Regulations.
Income determination and rental rate adjustments shall occur not more frequently than once per year
upon HUD's annual determination of maximum HOME rent limits and in accordance with 24 CFR
part 92.252(f)and(g).Any increase in rents for HOME-assisted Units is subject to the provisions of
existing leases. Owner must provide tenants with not less than thirty(30) days prior written notice
before implementing any increase in rents.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 7—HOME REGULATORY AGREEMENT
EXHIBIT B —AFFORDABILITY REQUIREMENTS
381
ATTACHMENT NO. 8
HOME NOTE
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
382
RESIDUAL RECEIPTS PROMISSORY NOTE
SECURED BY DEED OF TRUST
TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA
3% Huntington Beach,California
$[2,830,697] , 202
FOR VALUE RECEIVED, BEACH HOUSING PARTNERS LP, a California limited
partnership (`Borrower"), hereby promises to pay to THE CITY OF HUNTINGTON BEACH, a
municipal corporation of the state of California ("City"), or order, a principal amount of [Two
Million Eight Hundred Thirty Thousand Six Hundred Ninety-Seven Dollars ($2,830,697)], or so
much thereof as may be advanced by the City to Borrower as the HOME Loan pursuant to the
Affordable Housing Agreement dated as of January 5,2021,(the".Affordable Housing Agreement")
between Borrower("Owner"therein)and the City, incorporated herein by this reference. Borrower
shall pay interest at the rate, in the amount and at the time hereinafter provided.
1. Definitions. Any capitalized term not otherwise defined herein shall have the
meaning ascribed to such term in the Affordable Housing Agreement. In addition, the following
terms shall have the following meanings:
"Assignment of Agreements"means the assignment by Borrower to City of plans, contracts
and permits, dated around the date hereof and securing the HOME Loan.
"Borrower's Limited Partnership Agreement" shall mean that certain Amended and Restated
Agreement of Limited Partnership by and between, Borrower's Managing General Partner and Investor
Limited Partner dated as of 202_].
"City" means the City of Huntington Beach, California, a municipal corporation, and any
assignee of or successor to its rights, powers and responsibilities.
"City's Share of Residual Receipts" has the meaning given to it in Paragraph 7(b) of this
Note.
"Construction Lender" means [ ], or another institutional lender reasonably
approved by the City.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8—HOME NOTE
PAGE 1
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"Construction Loan" means the loan from Construction Lender to pay a portion of the
Development Costs, secured by the Construction Loan Deed of Trust.
"Construction Loan Deed of Trust" means the deed of trust dated around the date hereof
given by Borrower for the benefit of Construction Lender, securing the Construction Loan.
"Deferred Developer Fee"means the portion of the Developer Fee to be paid from the cash
flow of the Project as provided in the final Project Budget approved by the City at the conversion
from construction financing to permanent financing.
"HOME Deed of Trust" means the Deed of Trust given by Borrower for the benefit of the
City dated around the date hereof, securing the HOME Loan.
"HOME Loan"means the loan from the City to Borrower,in the amount and pursuant to the
terms and conditions set forth in this Note and the other HOME Loan Documents.
"HOME Loan Documents"means the Affordable Housing Agreement,this Note,the HOME
Deed of Trust, the Assignment of Agreements, and the Environmental Indemnity.
"HOME Regulatory Agreement" means the Agreement Containing HOME Program
Requirements dated around the date hereof, between the City and Borrower, recorded against the
Property.
"Improvements" means the improvements to be constructed on the Property in accordance
with the Affordable Housing Agreement, including but not limited to the Scope of Development
attached as Attachment No. 3 to the Affordable Housing Agreement.
"Inclusionary Loan" means a loan of Affordable Housing Trust Funds from the City to
Owner in the amount of[$ �.
"Investor Limited Partner"collectively refers to the entities identified as the"Limited Partner"and
"Special Limited Partner" in Borrower's Limited Partnership Agreement and the related contribution
agreement, and their successors and assigns.
"Maturity Date"means the sixtieth (601h) anniversary of the Occupancy Date.
"Net Proceeds"means the amount,if any,by which a refinancing exceeds the amount needed
to repay a Senior Loan in full, including principal and interest, any early redemption or prepayment
penalty,and customary and reasonable fees and costs of the transaction,the costs incurred by Owner
to perform repairs or maintenance to the Project, amounts required by a Senior Lender to be
AFFORDABLE HOUSING AGREEMENT
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ATTACHMENT NO. 8 —HOME NOTE
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deposited into a reserve fund,and the amount paid(excluding voluntary payments)towards the then-
outstanding balance of a Senior Loan.
"Note"means this promissory note evidencing the HOME Loan.
"NPLH Assisted Units"means the residential units in the Project that are designated as such
by Orange County Housing and Community Development.
"NPLH Flexible Operating Reserve Deposits" means deposits, in the amounts and at the
times required by Orange County Housing and Community Development, into a cash-flow funded
reserve established by Borrower to provide a reserve for shortfalls in operations,supportive services,
furnishings, or replacement reserves associated with the NPLH Assisted Units. The amount of the
NPLH Flexible Operating Reserve Deposits is calculated based on the NPLH Loan amount divided
by the total amounts of the NPLH Loan plus the Residual Receipts Loans,multiplied by fifty percent
(50%). For example, if the NPLH Loan amount is $5,875,538 and the total amount of the NPLH
Loan plus the Residual Receipts Loans is [$ ], then the NPLH Flexible Operating
Reserve Deposits will be equal to [ %] of the cash flow remaining after payment of Annual
Operating Expenses and the theretofore unpaid portion of the Deferred Developer Fee described in
paragraph 7(d) below. The NPLH Flexible Operating Reserve Deposits have priority of payment
over the distribution of Residual Receipts for payment of the Residual Receipts Loans.
"NPLH Loan"means a loan of No Place Like Home funds from Orange County Housing and
Community Development to Borrower in the original principal amount of$5,875,538. The NPLH
Loan is non-amortizing and due in full at maturity
"NPLH Transition Reserve"means funds reserved to fund the Project's operating expenses
allocable to the NPLH Assisted Units and subject to the requirements of Orange County Housing and
Community Development.
"Occupancy"means the date on which the City of Huntington Beach issues a Certificate
of Occupancy for the Project.
"OCHFT Loan"means a loan of Orange County Housing Finance Trust Funds from Orange
County Housing and Community Development to Owner in the original principal amount of
$1,900,000.
"Permanent Loan" shall mean the permanent loan from [ ] or another
institutional lender approved by the City, to assist in Borrower's repayment of the construction
financing for the Project and secured by a first priority Deed of Trust on the Property.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
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"Project" shall mean the financing, planning, construction and use of the Property and the
Improvements as provided in the Affordable Housing Agreement.
"Property" shall mean the real property, including all improvements thereon, legally
described as set forth in Attachment No. 2 to the Affordable Housing Agreement.
"Residual Receipts" shall mean, in a particular calendar year, the amount by which Gross
Revenue (as defined below) exceeds the sum of(i)Annual Operating Expenses (as defined below)
plus(ii)the NPLH Flexible Operating Reserve Deposits, as determined by an audit to be completed
not later than ninety(90) days after the end of each calendar year by an independent certified public
accountant first approved in writing by the City,using generally accepted accounting principles and
based on the accrual method (the "Audit").
(i) Gross Revenue. "Gross Revenue," with respect to a particular calendar year, shall
mean all revenue, income, receipts, and other consideration actually received from operation or
leasing of the Project. "Gross Revenue" shall include, but not be limited to: all rents, fees and
charges paid by tenants,rental subsidy payments received for the dwelling units,deposits forfeited by
tenants, cancellation fees, price index adjustments and other rental adjustments to leases or rental
agreements; proceeds from vending and laundry room machines; the proceeds of business
interruption or similar insurance; the proceeds of casualty insurance to the extent not utilized to
repair or rebuild the Project; and condemnation awards for a taking of part or all of the Project for a
temporary period. "Gross Revenue"shall also include the fair market value of any goods or services
provided in consideration for the leasing or other use of any portion of the Project, except that the
value of services provided by the on-site manager(s)shall not be treated as"Gross Revenue"so long
as no more than two dwelling units are leased to or otherwise used by on-site manager(s). "Gross
Revenue"shall not include tenants' security deposits,proceeds from the loans described in Sections
3 and 4 of the Method of Financing attached to the Affordable Housing Agreement as Attachment
No. 6,capital contributions or similar advances,or interest that is earned on and allocated to reserve
accounts.
(ii) "Annual Operating Expenses,"with respect to a particular calendar year means the
following costs reasonably and actually incurred for operation and maintenance of the Project to the
extent that they are consistent with an annual independent audit performed by a certified public
accountant using generally accepted accounting principles:property and other taxes and assessments
imposed on the Project; premiums for property damage and liability insurance; utility services not
paid for directly or reimbursed by tenants,including but not limited to water, sewer,trash collection,
gas and electricity and similar customary utility services; maintenance and repair including but not
limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning,
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
PAGE 4
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common systems repairs, general repairs,janitorial, supplies; any annual lease payment, license or
certificate of occupancy fees required for operation of the Project; general administrative expenses
including but not limited to advertising and marketing, security services and systems,professional
fees for legal, audit, accounting and tax returns for the limited partnership, and similar customary
administrative expenses;property management fees,expenses and costs,not to exceed [six percent]
of Gross Revenue, pursuant to a management contract approved by the City in City's reasonable
discretion; resident supportive services fees as required by Project lenders and the California Tax
Credit Allocation Committee;partnership management fees payable to Borrower's managing general
partner in an amount not to exceed [ Dollars ($ )] in the first year and
increased thereafter at an annual rate of[three percent(3%)]; a cumulative asset management fee to
be paid to the Borrower's Investor Limited Partner in an amount not to exceed [
Dollars ($ )] in the first year and increased thereafter at an annual rate of[three percent
(3%)];cash deposited into a replacement reserve in the amount of[Five Hundred Dollars($500)]per
unit or such higher amounts as are required by Project lenders,the California Tax Credit Allocation
Committee, and the Investor Limited Partner from time to time; cash deposited into an operating
reserve in such reasonable amounts as are required by Project lenders, the Tax Credit Allocation
Committee, and the tax credit investor from time to time, and approved by the City; cash deposited
into the NPLH Transition Reserve in amounts (if any) required by Orange County Housing and
Community Development; a monitoring fee to the City in an amount equal to$1,075,to be increased
at an annual rate of three percent, fixed debt service payments (excluding debt service contingent
upon the availability of residual receipts or surplus cash of the Project)on loans associated with the
Project and approved by the City; all other payments, charges and other amounts becoming due
under the Permanent Deed of Trust; and,payments on loans made by the Investor Limited Partner to
Borrower. "Annual Operating Expenses"shall not include the following:depreciation,amortization,
depletion or other non-cash expenses or amounts expended from a reserve account. Annual
Operating Expenses will be subject to the reasonable approval of the City.
"Residual Receipts Loans"means the HOME Loan,the Inclusionary Loan,the SNHP Loan,
and the OCHFT Loan.
"Senior Lender" means the maker of a Senior Loan, including but not limited to
[ ] as the Construction Lender and the Permanent Lender.
"Senior Loan" means the Construction Loan, the Permanent Loan, the NPLH Loan, the
SNHP Loan, and any other loan secured by a deed of trust or other instrument to which the City
agrees to subordinate this Note and the other HOME Loan Documents.
"SNHP Loan"means a loan of Special Needs Housing Program funds from the California
Housing Finance Agency to Owner in the original principal amount of$3,603,160.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
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2. This Note evidences the obligation of the Borrower to the City for the repayment of
the HOME Loan.
3. This Note is payable at the principal office of City, 2000 Main Street, Huntington
Beach, California 92648, or at such other place as the holder hereof may inform the Borrower in
writing, in lawful money of the United States.
4. This Note shall be secured by the HOME Deed of Trust.
5. This Note shall accrue simple interest at the rate of three percent(3%)per annum on
the principal amount outstanding, from the date of disbursement.
6. The entire unpaid principal balance of this Note and all accrued but unpaid interest
shall be due and payable upon the Maturity Date, and upon the earlier occurrence of the following:
(a) the date the Property or the Improvements or any portion thereof or interest
therein is sold, transferred, assigned or refinanced, without the prior written approval of the City,
except as permitted by the provisions of Section 108 (titled "Assignments and Transfers") of the
Affordable Housing Agreement; or
(b) the date on which there is a default by the Borrower under the terms of this
Note, the Affordable Housing Agreement, the HOME Deed of Trust, the HOME Regulatory
Agreement,or any deed of trust or other instrument securing a Senior Loan or the Inclusionary Loan,
which is not cured or waived within the respective time period provided herein and therein.
7. Except in the event of a default described in Section 12 hereof,no payments will be
due and payable under this Note except to the extent of(a)the City's Share of Residual Receipts,and
(b)any refinancing or Cost Savings, subject to the limitations set forth below. Prior to the Maturity
Date, Borrower shall be obligated to repay the HOME Loan as follows:
(a) Annually, not later than the thirtieth (30th) day of April, beginning with the
year following the year in which the Occupancy Date occurs, Borrower shall submit to the City an
audited Annual Financial Statement for the preceding calendar year,prepared by a certified public
accountant reasonably acceptable to the City, detennining the amount of Residual Receipts, if any,
generated in that year, together with payment of the City's Proportionate Share of such Residual
Receipts. The first such Annual Financial Statement shall be for the partial year beginning on the
Occupancy Date and ending on December 31 of that year. The City shall review and approve such
Annual Financial Statement,or request revisions,within 30 days after receipt. If there is an increase
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8—HOME NOTE
PAGE 6
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in the amount of any payment due and payable to the City (as the result, for example, of a
determination that the actual amount of Residual Receipts to which the City is entitled exceeds the
amount of City's share of Residual Receipts shown in the Annual Financial Statement submitted by
Borrower), Borrower shall promptly pay to the City the difference, with interest, from the date on
which such payment was due,at the rate of one percent(1%)over the Prime Rate announced by the
Permanent Lender, but in any event within ten (10) days of notice of such increase.
(b) Borrower will repay the HOME Loan with annual payments equal to the
City's Share of Residual Receipts. The City's Share of Residual Receipts will be calculated as
follows: a percentage derived from a fraction in which the principal amount of the HOME Loan upon
final disbursement is the numerator and the sum of the HOME Loan plus all other Residual Receipts
Loans is the denominator, multiplied by fifty percent (50%). For example, assuming the principal
amount of the HOME Loan is [$2,830,697],and the total principal amount of the Residual Receipts
Loans is [$ ],the City's Share would be [$2,830,697] divided by[$ ],or
[ ]%, multiplied by fifty percent(50%), which would equal [ %].
(c) All payments to the City shall be applied first to amounts owed under this
Note other than principal and interest, then to accrued interest, and then to reduce the principal
amount owed.
(d) If a portion of the Developer Fee is to be paid from the cash flow of the
Project("Deferred Developer Fee"),then notwithstanding paragraph(b)of this Section 7,Borrower
may first utilize one hundred percent (100%) of the cash flow remaining after payment of Annual
Operating Expenses with respect to a particular calendar year to pay the sponsors of the Project the
theretofore unpaid portion of the Deferred Developer Fee.
(e) If,upon completion of the Project,there are"Cost Savings"as defined below,
Borrower will be entitled to retain fifty percent (50%) of the Cost Savings. A share of the Cost
Savings in a percentage equal to the City's Share of Residual Receipts calculated as set forth in
paragraph(b)of this Section 7 will be applied to the repayment of the HOME Loan;provided that,if
the makers of the NPLH Loan and the Residual Receipts Loans other than the HOME Loan do not
require that they receive a share of Cost Savings, then the City's Proportionate Share of the Cost
Savings will be determined by the formula set forth in paragraph (b) of this Section 7, without
consideration of the amount of such other Residual Receipts Loans or the NPLH Loan,as applicable.
"Cost Savings",as that term is used in this Note,is the difference between the total sources of funds
and the total cost of development as shown in the Borrower's cost certification contained in
Borrower's application to the California Tax Credit Allocation Committee for a Form 8609 for the
Project("Tax Credit Report");provided, however,the Cost Savings will be adjusted to take into
account (i) the loss of any equity investment due to an adjustment in the allowable tax credits;
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
PAGE 7
389
provided that the tax credit factor applied to the required equity contribution will be as set forth in
Borrower's limited partnership agreement;and(ii)any reduction in the first mortgage loan required
by the Construction Loan Documents. The amount payable to the City under this paragraph will be
paid within sixty(60)days following submittal of the Tax Credit Report to the California Tax Credit
Allocation Committee. Such amounts will accrue interest at the default rate of ten percent (10%)
from the date due and payable until paid in full. If Borrower does not obtain tax credit financing for
this Project,Borrower will submit to the City a report that substantially complies with the Tax Credit
Report required by the California Tax Credit Allocation Committee. Such report will be submitted
to the City within one year following completion of construction of the Project. The amount payable
to the City hereunder will be paid within sixty (60) days following submittal of the report to the
City. The City will be entitled to review and approve the report and to require appropriate revisions
to assure that Cost Savings have not been minimized or reallocated. The requirements in the
foregoing paragraph will be applied to the fullest extent permitted by applicable requirements and
restrictions of California's Tax Credit Allocation Committee.
(f) If at any time Borrower refinances the Senior Loan, Borrower will apply the
Net Proceeds of any such refinancing first to pay previously incurred Operating Expenses still owing,
then a share of the Net Proceeds equal to the City's Share of Residual Receipts calculated as set forth
in paragraph(b)of this Section 7 will be paid to the City to pay accrued interest on,and then reduce
the principal amount of the HOME Loan; provided that, if the makers of the NPLH Loan and the
Residual Receipts Loans other than the HOME Loan do not require that they receive a share of Net
Proceeds,then the City's proportionate share of Net Proceeds will be determined by the formula set
forth in paragraph (b)of this Section 7,without consideration of the amount of such other Residual
Receipts Loans or the NPLH Loan, as applicable.
8. Borrower may prepay this Note, or any part hereof, without penalty. However,
prepayment of the obligation evidenced by this Note prior to the expiration of the term of the HOME
Regulatory Agreement will not entitle Borrower to a reconveyance of the HOME Deed of Trust.
9. Prohibition Against Transfer.
(a) Prior to the repayment in full of the City Loan, the Borrower will not assign or
attempt to assign the Affordable Housing Agreement or any right therein, nor make any total or
partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the
Improvements thereon, or any portion thereof or interest therein (referred to hereinafter as a
"Transfer"),without prior written approval of the City,except as otherwise permitted in this Note or
the Affordable Housing Agreement. Consent to one such transaction will not be deemed to be a
waiver of the right to require consent to future or successive transactions. The City will not
unreasonably withhold or delay its consent. If consent is given, any such transfer will be subject to
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8—HOME NOTE
PAGE 8
390
this Section 9,and any such transferee must assume all obligations hereunder and agree to be bound
by all provisions contained herein.
(b) In connection with any assignment that requires City consent, any such proposed
transferee must have the qualifications and financial responsibility necessary and adequate as may be
reasonably determined by the City, to fulfill the obligations undertaken by Borrower in the
Affordable Housing Agreement, the HOME Regulatory Agreement, and this Note. Any such
proposed transferee,by instrument in writing satisfactory to the City and in form recordable among
the official records of Orange County, for itself and its successors and assigns,and for the benefit of
the City must expressly assume all of the obligations of the Borrower under the Affordable Housing
Agreement, the HOME Regulatory Agreement, and this Note, and agree to be subject to all
conditions and restrictions applicable to the Borrower in this Note. There will be submitted to the
City for review all instruments and other legal documents proposed to effect any such transfer;and if
approved by the City,which approval shall not be unreasonably withheld,conditioned,or delayed,its
approval will be indicated to the Borrower in writing.
(c) In the absence of specific written agreement by the City,which agreement will not be
unreasonably withheld, no Transfer, or approval thereof by the City, will be deemed to relieve the
Borrower or any other party from any obligations under the Affordable Housing Agreement or the
HOME Regulatory Agreement.
(d) In the event of a Transfer prior to the time the HOME Loan is paid in full without the
prior written consent of the City(if such consent is required),the remaining principal balance of the
HOME Loan and all accrued but unpaid interest will be immediately due and payable.
(1) As used herein, "Transfer" includes the sale, transfer or conveyance of the
Property, the Improvements, or any portion thereof or interest therein, whether voluntary,
involuntary, by operation of law or otherwise, or any agreement to do so; the execution of any
installment land sale contract or similar instrument affecting all or a portion of the Property or the
Improvements; or the lease of all or substantially all of the Property or Improvements, except the
lease for occupancy of all or any part of the Improvements on the Property.
(ii) "Transfer" will also include the transfer, assignment, hypothecation or
conveyance of legal or beneficial ownership of any interest in Borrower, or any conversion of
Borrower to an entity form other than that of Borrower at the time of execution of this Note, except
for the following: (A) a cumulative change in the ownership interests of any individual limited
liability company member of forty-nine percent or less will not be deemed a"Transfer"for purposes
of this Note; and(B)a transfer of a portion or a majority of stock of any corporation to a trust formed
in connection with a qualified employee ownership plan will not,by itself,be deemed to constitute a
change in ownership for purposes of this Note.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8—HOME NOTE
PAGE 9
391
(ill) Notwithstanding paragraphs (i) and (ii), "Transfer" will not include any
Permitted Transfers, as defined in the Affordable Housing Agreement.
(e) The City will not unreasonably withhold,condition or delay its approval of any matter
for which its approval is required hereunder. Disapprovals will be in writing and contain the City's
reasons for disapproval.
10. Borrower waives presentment for payment,demand,protest,and notices of dishonor
and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of
any extension or extensions of the time of payment or of any due date under this Note,in whole or in
part,whether before or after maturity and with or without notice. Borrower hereby agrees to pay all
costs and expenses, including reasonable attorney's fees, which may be incurred by the holder
hereof,in the enforcement of this Note,the HOME Deed of Trust or any term or provision of either.
11. Upon the failure of Borrower to perform or observe any term or provision of this
Note, or upon the occurrence of any event of default under the terms of the Affordable Housing
Agreement,the HOME Deed of Trust,or the HOME Regulatory Agreement,which remains uncured
after the required notice and expiration of the applicable cure period, the holder may exercise its
rights or remedies hereunder or thereunder.
12. Subject to the extensions of time set forth in Section 13, and subject to the further
provisions of this Section 12,failure or delay by Borrower to perform any material term or provision
of this Note, the Affordable Housing Agreement, the HOME Deed of Trust, or the HOME
Regulatory Agreement constitutes a default under this Note.
(a) The City shall give written notice of default to Borrower, specifying the
default complained of by the City. Delay in giving such notice shall not constitute a waiver of any
default nor shall it change the time of default.
(b) Any failures or delays by the City in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays
by City in asserting any of its rights and remedies shall not deprive the City of its right to institute
and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce
any such rights or remedies.
(c) If a monetary event of default occurs, prior to exercising any remedies
hereunder,the City shall give the Borrower written notice of such default. The Borrower shall have
a period of twenty (20) days after such notice is given within which to cure the default prior to
exercise of remedies by the City.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
PAGE 10
392
(d) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder,the City shall give Borrower notice of such default. If the default is reasonably capable of
being cured within thirty(30)days,Borrower shall have such period to effect a cure prior to exercise
of remedies by the City. If the default is such that it is not reasonably capable of being cured within
thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently,
continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have
such additional time as is reasonably necessary to cure the default prior to exercise of any remedies
by the City.
(e) If Borrower fails to take corrective action or cure the default within a
reasonable time, the City will give the Senior Lender and, as provided in paragraph (f), below, the
Investor Limited Partner,notice thereof Subject to the terms of Borrower's partnership agreement,
the Investor Limited Partner may take such action, including removing and replacing the general
partner or managing member of Borrower with a substitute general partner or member, who will
effect a cure within a reasonable time thereafter in accordance with the foregoing provisions. The
City agrees to accept cures tendered by a Senior Lender or the Investor Limited Partner within the
cure periods provided herein. Additionally, if the Senior Lender or Investor Limited Partner is
precluded from curing a non-monetary default due to a bankruptcy,injunction,or similar proceeding
by or against Borrower or the general partner of Borrower, the City agrees to forbear from
completing a foreclosure(judicial or nonjudicial)during the period during which the Senior Lender
or Investor Limited Partner is so precluded from acting, not to exceed ninety days, provided such
Investor Limited Partner and Senior Lender are otherwise in compliance with the foregoing
provisions. In no event will the City be precluded from exercising remedies if its rights become or
are about to become materially jeopardized by a failure to cure a default or if the default is not cured
within one hundred eighty(180) days after the first notice of default is given.
(f) After Borrower gives written notice to the City that the Investor Limited
Partner has been admitted to the Limited Partnership, the City shall send to the Investor Limited
Partner a copy of all notices of default and all other notices that City sends to Borrower, at the
address for the Investor Limited Partner given in Section 17 of this Note.
(g) A notice of default shall be deemed given only if either(i)dispatched by first
class mail,registered or certified,postage prepaid,return receipt requested,to the addresses specified
for the Borrower and the Investor Limited Partner in Section 17 of this Note, or (ii) by electronic
facsimile transmission to the facsimile numbers specified for the Borrower and the Investor Limited
Partner in Section 17 of this Note,followed by delivery by the method described in clause(1),or(iii)
by personal delivery(including by means of professional messenger or courier service such as United
Parcel Service or Federal Express) to the addresses specified for the Borrower and the Investor
Limited Partner in Section 17 of this Note. Receipt shall be deemed to have occurred on the earlier
of(i)the date of successfully completed electronic facsimile transmission or(ii)the date marked on a
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8—HOME NOTE
PAGE 11
393
written postal service or messenger or courier service receipt as the date of delivery or refusal of
delivery(or attempted delivery if undeliverable). If either party gives notice of a change of address in
the manner specified in this paragraph, all notices, demands and communications originated after
receipt of the change of address(or the effective date specified in the notice of change of address, if
later) shall be transmitted, delivered or sent to the new address.
13. Notwithstanding specific provisions of this Note, non-monetary performance
hereunder shall not be deemed to be in default where delays are due to causes beyond the control and
without the fault of the party claiming an extension of time to perform (an "Enforced Delay"),
provided that they actually delay and interfere with the timely performance of the matter to which
they would apply and despite the exercise of diligence and good business practices are or would be
beyond the reasonable control of the party claiming such interference, including: war; insurrection;
strikes; lock-outs;riots; floods;earthquakes; fires; casualties;acts of God;acts of the public enemy;
epidemics or pandemics; quarantine restrictions; freight embargoes; lack of transportation;
governmental restrictions or priority; litigation including litigation challenging the validity of this
transaction or any element thereof, unusually severe weather; inability to secure necessary labor,
materials or tools;delays of any contractor, subcontractor,or suppliers;acts of the other party;acts or
failure to act of any governmental agency(except acts or failure to act of the City in its capacity as
maker of the HOME Loan shall not excuse performance by the City);the imposition of an applicable
moratorium by a governmental agency; or any other cause which despite the exercise of diligence
and good business practices are or would be beyond the reasonable control of the party claiming such
delay and interference. Notwithstanding the foregoing,none of the foregoing events shall constitute
an Enforced Delay unless and until the party claiming such delay and interference delivers to the
other party written notice describing the event, its cause, when and how such party obtained
knowledge,the date the event commenced, and the estimated delay resulting therefrom. The party
claiming an Enforced Delay shall deliver such written notice within thirty(30)days after it obtains
actual knowledge of the event.
14. If the rights created by this Note are held by a court of competent jurisdiction to be
invalid or unenforceable as to any part of the obligations described herein,the remaining obligations
shall be completely performed and paid.
15. The HOME Deed of Trust securing this Note shall be subordinate and junior to the
Senior Loans,to the extent and in the manner provided in the applicable subordination agreement(s)
dated around the date hereof.
16. The City agrees that the lien of the HOME Deed of Trust will be subordinate to the
extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the
Internal Revenue Code)(the"Extended Use Agreement")recorded against the Project;provided that
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
PAGE 12
394
such Extended Use Agreement,by its terms,shall terminate upon foreclosure under the HOME Deed
of Trust or upon a transfer of the Project by instrument in lieu of foreclosure or comparable
conversion of the Loan, in accordance with Section 42(h)(6)(E)of the Internal Revenue Code. The
following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as
amended,will also apply: for a period of three years from the date of foreclosure,with respect to any
unit that had been regulated by the Extended Use Agreement,(1)none of the tenants occupying those
units at the time of foreclosure may be evicted or their tenancy terminated (other than for good
cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the
Code. Borrower acknowledges and agrees that a default, event of default, or breach (however
such terms may be defined) under the Extended Use Agreement will be an event of default under
this Note and the HOME Deed of Trust and that all costs, damages or other amounts, including
reasonable attorneys' fees incurred by the City as a result of an event of default by Borrower,and all
amounts paid by the City to cure any default under the Extended Use Agreement will be an
obligation of Borrower and become a part of the debt evidenced by this Note and secured by the
HOME Deed of Trust.
17. (a) The obligation to repay the HOME Loan is a nonrecourse obligation of the
Borrower and its partners. Neither the Borrower nor any of its general or limited partners, nor any
other party, shall have any personal liability for repayment of the loan. The sole recourse of the City
with respect to repayment of the HOME Loan shall be the exercise of its rights against the Property
and the Improvements and any related security for the HOME Loan. Notwithstanding the foregoing,
the City may:
(i) obtain a judgment or order (including, without limitation, an
injunction) requiring Borrower or any other party to perform (or refrain from) specified acts other
than repayment of the HOME Loan; and
(ii) recover directly from Borrower or any other party:
(A) all damages,costs and expenses incurred by the City as a result
of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or
employee of Borrower or of any general partner of Borrower or of any member of a general partner
of Borrower;
(B) all damages,costs and expenses incurred by the City as a result
of misappropriation of funds provided for the construction of the Improvements,as described in the
Affordable Housing Agreement,rents and revenues from the operation of the Project,or proceeds of
insurance policies or condemnation proceeds; .
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
PAGE 13
395
(C) all amounts owing by Borrower pursuant to Borrower's
indemnification regarding Hazardous Substances provided to the City in connection with the
Affordable Housing Agreement; and
(D) all court costs and attorneys' fees reasonably incurred in
enforcing or collecting upon any of the foregoing exceptions (provided that the City shall pay
Borrower's reasonable court costs and attorneys' fees if Borrower is the prevailing party in such
enforcement or collection action).
18. (a) The address of Borrower for purposes of receiving notices pursuant to this Note is as
follows: c/o Jamboree Housing Corporation, 17701 Cowan, Suite 200,Irvine,CA 92614,Attention:
Michael Massie, Chief Development Officer. Borrower's facsimile number is [ ].
The addresses for copies of notices delivered to Borrower pursuant to this Note are as follows:
With a copy to:
Rutan & Tucker, LLP
Attn: Patrick D. McCalla, Esq.
18575 Jamboree Road, 9th Floor
Irvine, California 92612
(b) The address of Investor Limited Partner for purposes of receiving notices
pursuant to this Note is as follows: [ ].
19. In addition to the other terms of this Note,Borrower hereby agrees and acknowledges
that, notwithstanding any internal accounting procedures or provision pertaining to the use of
receipts, payments, reserves and distributions contained in its Limited Partnership Agreement or
other organizational document,the terms of this Note and the Affordable Housing Agreement shall
control as to the use of the HOME funds provided under the Affordable Housing Agreement and all
operating income from the Project.
[Remainder of Page Intentionally Left Blank; Signatures on Following Page]
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
PAGE 14
396
IN WITNESS WHEREOF,Borrower has executed this Note as of the day and year set forth
above.
"BORROWER"
BEACH HOUSING PARTNERS LP
a California limited partnership
By: JHC-Beach LLC, a California limited liability company
Its: Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation
Its: Manager
By
Name: Michael Massie
Title: Chief Development Officer
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 8 —HOME NOTE
PAGE 15
397
ATTACHMENT NO. 9
HOME DEED OF TRUST
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9—HOME DEED OF TRUST
398
Recording Requested by
and When Recorded Return to:
City Clerk, City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
SPACE ABOVE THIS LINE FOR RECORDER'S USE
GOVERNMENT BUSINESS
Free Recording Requested
(Govt. Code §27383)
APN: 159-031-18
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(HOME LOAN)
This Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) is
given by BEACH HOUSING PARTNERS LP,a California limited partnership(hereinafter referred
to as "Trustor") (whose address is c/o Jamboree Housing Corporation, 17701 Cowan, Suite 200,
Irvine, California 92614, Attention: Michael Massie, Chief Development Officer; with a copy to
Rutan&Tucker,LLP, 18575 Jamboree Road, 9th Floor,Irvine, California 92612,Attn:Patrick D.
McCalla, Esq., to FIRST AMERICAN TITLE INSURANCE COMPANY, (hereinafter called
"Trustee"), for the benefit of THE CITY OF HUNTINGTON BEACH, a municipal corporation of
the state of California(hereinafter called`Beneficiary'),whose address is City of Huntington Beach,
2000 Main Street, Huntington Beach, California 92648, Attention: City Manager.
Witnesseth: That Trustor IRREVOCABLY GRANTS,TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the
following property(the "Trust Estate"):
(a) That certain real property in the City of Huntington Beach,County of
Orange, State of California more particularly described in Exhibit "A" attached hereto and by this
reference made a part hereof(hereafter referred to as the "Subject Property");
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9—HOME DEED OF TRUST
Page 1
399
(b) All buildings, structures and other improvements now or in the future
located or to be constructed on the Subject Property(the "Improvements");
(c) all tenements,hereditaments,appurtenances,privileges,franchises and
other rights and interests now or in the future benefiting or otherwise relating to the Subject Property
or the Improvements, including easements, rights-of-way and development rights (the
"Appurtenances"). (The Appurtenances,together with the Subject Property and the Improvements,
are hereafter referred to as the "Real Property");
(e) subject to the terms of the assignment to Beneficiary set forth in
Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future
payable with respect to or otherwise derived from the Trust Estate or the ownership, use,
management,operation leasing or occupancy of the Trust Estate,including those past due and unpaid
(the "Rents");
(f) all inventory,equipment,fixtures and other goods(as those terms are
defined in Division 9 of the California Uniform Commercial Code (the "UCC"), and whether
existing now or in the future)now or in the future located at,upon or about,or affixed or attached to
or installed in,the Real Property,or used or to be used in connection with or otherwise relating to the
Real Property or the ownership, use, development, construction, maintenance, management,
operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings,
machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks,
heating ventilating and air conditioning equipment and all other types of tangible personal property
of any kind or nature, and all accessories,additions, attachments,parts,proceeds,products,repairs,
replacements and substitutions of or to any of such property,but not including personal property that
is donated to Trustor (the "Goods," and together with the Real Property, the "Property"); and
(g) all accounts, general intangibles, chattel paper, deposit accounts,
money, instruments and documents(as those tenns are defined in the UCC)and all other agreements,
obligations,rights and written material(in each case whether existing now or in the future)now or in
the future relating to or otherwise arising in connection with or derived from the Property or any
other part of the Trust Estate or the ownership, use, development, construction, maintenance,
management,operation,marketing,leasing,occupancy,sale or financing of the property or any other
part of the Trust Estate,including(to the extent applicable to the Property or any other portion of the
Trust Estate) (i)permits, approvals and other governmental authorizations, (ii) improvement plans
and specifications and architectural drawings, (iii) agreements with contractors, subcontractors,
suppliers,project managers,supervisors,designers,architects,engineers,sales agents,leasing agents,
consultants and property managers, (iv)takeout,refinancing and permanent loan commitments, (v)
warranties, guaranties, indemnities and insurance policies, together with insurance payments and
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9—HOME DEED OF TRUST
Page 2
400
unearned insurance premiums,(vi)claims,demands,awards,settlements,and other payments arising
or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or
damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public
use of any of the Property, (vii)license agreements, service and maintenance agreements,purchase
and sale agreements and purchase options, together with advance payments, security deposits and
other amounts paid to or deposited with Trustor under any such agreements,(viii)reserves,deposits,
bonds,deferred payments,refunds,rebates,discounts,cost savings,escrow proceeds, sale proceeds
and other rights to the payment of money,trade names, trademarks, goodwill and all other types on
intangible personal property of any kind or nature, and (ix) all supplements, modifications,
amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such
property(the "Intangibles").
Trustor further grants to Trustee and Beneficiary,pursuant to the UCC,a security interest in
all present and future right,title and interest of Trustor in and to all Goods and Intangibles and all of
the Trust Estate described above in which a security interest may be created under the UCC
(collectively, the "Personal Property"). This Deed of Trust constitutes a security agreement under
the UCC,conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee
and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and
remedies of a"secured party"under the UCC and other applicable California law. Trustor covenants
and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c)and 9604 of the
UCC.
FOR THE PURPOSE OF SECURING,in such order of priority as Beneficiary may elect,
the following:
(1) due,prompt and complete observance,performance and discharge of each and every
condition, obligation, covenant and agreement contained herein or contained in the
following:
(a) a promissory note in the original principal amount of[$2,830,697],payable
from the residual receipts of the Project("Residual Receipts"), executed by Trustor
(`Borrower"therein) of approximately even date herewith (the"HOME Note");
(b) the Affordable Housing Agreement dated as of January 5, 2021 (the
"Agreement"), between Trustor and the Beneficiary;
(c) the Agreement Containing HOME Program Requirements between Trustor
and Beneficiary recorded concurrently herewith("HOME Regulatory Agreement");
and
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9—HOME DEED OF TRUST
Page 3
401
(2) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of
[$2,830,697] or so much thereof as shall be advanced, evidenced by the HOME Note, with
interest, according to the terms of the HOME Note.
The Agreement, including all Attachments thereto,and the documents and instruments executed by
Trustor in connection with the Project, including the HOME Regulatory Agreement, the HOME
Note,the Assignment of Rents,the Assignment of Agreements,and the UCC 1 Financing Statement,
all as described in the Agreement(collectively referred to as the"Secured Obligations") and all of
their terms are incorporated herein by reference and this conveyance shall secure any and all
extensions, amendments, modifications or renewals thereof however evidenced, and additional
advances evidenced by any note reciting that it is secured hereby. Any capitalized term that is not
otherwise defined in this Deed of Trust shall have the meaning ascribed to such term in the
Agreement.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor shall pay the HOME Note at the time and in the manner provided
therein, and perform the obligations of the Developer as set forth in the Secured Obligations at the
time and in the manner respectively provided therein;
2. That Trustor shall not permit or suffer the use of any of the Property for any purpose
other than the uses permitted by the HOME Regulatory Agreement;
3. That the Secured Obligations are incorporated in and made a part of this Deed of
Trust. Upon default of a Secured Obligation,and after the giving of notice and the expiration of any
applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness
secured hereby to be due and payable.
4. That,subject to the prior rights,if any,of a lender whose lien is senior to this Deed of
Trust("Senior Lender"),all rents,profits and income from the Trust Estate are hereby assigned to the
Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to
Trustor so long as no default exists hereunder after the giving of notice and the expiration of any
applicable cure period, to collect such rents, profits and income for use in accordance with the
provisions of the Agreement.
5. That upon default hereunder or under the aforementioned agreements, and after the
giving of notice and the expiration of any applicable cure period,Beneficiary shall be entitled to the
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appointment of a receiver by any court having jurisdiction, without notice, to take possession and
protect the Trust Estate and operate same and collect the rents, profits and income therefrom;
6. That Trustor will keep the improvements hereafter constructed on the Subject
Property in accordance with the Agreement insured against loss by fire and such other hazards,
casualties, and contingencies as required by the Agreement and/or the HOME Regulatory
Agreement, and all such insurance shall be evidenced by standard fire and extended coverage
insurance policy or policies. In no event shall the amounts of coverage be less than 100 percent of
the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause
with loss payable to the Beneficiary and certificates thereof together with copies of original policies
shall be deposited with the Beneficiary;
7. To pay, at least 10 days before delinquency, all taxes and assessments affecting the
Property;to pay,when due,all encumbrances,charges and liens,with interest,on the Property or any
part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of
this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall
not be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is
contesting the legality thereof in good faith and by appropriate proceedings,and Trustor has adequate
funds to pay any liabilities contested pursuant to this Section 7.
8. To keep the Property in good condition and repair, subject to ordinary wear and tear,
casualty and condemnation,not to remove or demolish any buildings thereon;to complete or restore
promptly and in good and workmanlike manner any building which may be constructed,damaged,or
destroyed thereon and to pay when due all claims for labor performed and materials furnished
therefor;to comply with all laws affecting the Property or requiring any alterations or improvements
to be made thereon (subject to Trustor's right to contest the validity or applicability of laws or
regulations);not to commit or permit waste thereof,not to commit, suffer or permit any act upon the
Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property;
not to permit or suffer any material alteration of or addition to the buildings or improvements
hereafter constructed in or upon the Property without the consent of the Beneficiary;
9. To appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee,and to pay all costs and expenses,including
cost of evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear;
10. Should Trustor fail,after the giving of notice and the expiration of any applicable cure
period, to make any payment or do any act as herein provided, then Beneficiary or Trustee, but
without obligation so to do and without notice to or demand upon Trustor and without releasing
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Trustor from any obligation hereof, may make or do the same in such manner and to such extent as
either may deem necessary to protect the security hereof Following default, after the giving of
notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to
enter upon said property for such purposes, may commence, appear in and/or defend any action or
proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee;
may pay,purchase,contest,or compromise any encumbrance,charge,or lien which in the reasonable
judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may
pay necessary expenses,employ counsel,and pay his reasonable fees.Notwithstanding the foregoing,
in the event of default under this Deed of Trust,the Beneficiary may also require Trustor to maintain
and submit additional records. Beneficiary shall specify in writing the particular records that must be
maintained and the information or reports that must be submitted;
11. Beneficiary shall have the right to pay fire and other property insurance premiums
when due should Trustor fail to make any required premium payments after the giving of notice and
the expiration of any applicable cure period. All such payments made by the Beneficiary shall be
added to the principal sum secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or
Trustee,under permission given under this Deed of Trust,with interest from date of expenditure at
the rate specified in the HOME Note;
13. That the funds to be advanced hereunder are to be used in accordance with the
Secured Obligations and upon the failure of Trustor,after the giving of notice and the expiration of
any applicable cure period,to keep and perform all the covenants,conditions,and agreements of said
agreements, the principal sum and all arrears of interest, and other charges provided for in the
HOME Note shall at the option of the Beneficiary of this Deed of Trust become due and payable,
anything contained herein to the contrary notwithstanding;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be
created against the property subject to this Deed of Trust any lien or liens except as permitted by the
Secured Obligations or otherwise approved by Beneficiary in Beneficiary's reasonable discretion,
and further that it will keep and maintain the Property free from the claims of all persons supplying
labor or materials which will enter into the construction of any and all buildings now being erected
or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed
of Trust, Trustor shall not be obligated to pay any claims for labor, materials or services which
Trustor in good faith disputes and is diligently contesting, provided that Trustor shall, at
Beneficiary's written request,within thirty(30) days after the filing of any claim or lien (but in any
event, and without any requirement that Beneficiary must first provide a written request, prior to
foreclosure)record in the Office of the Recorder of Orange County,a surety bond in an amount one-
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and-one-half (1 1/2) times the amount of such claim item to protect against a claim of lien, or
provide such other security reasonably satisfactory to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered
by the Deed of Trust, and all plans and specifications, comply with all applicable municipal
ordinances and regulations and all other applicable regulations made or promulgated, now or
hereafter, by lawful authority, and that the same will upon completion comply with all such
municipal ordinances and regulations and with the rules of the applicable fire rating or inspection
organization, bureau, association or office;
16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing
representative of the Beneficiary a reasonable charge for providing a statement regarding the
obligation secured by this Deed of Trust as provided by Section 2954,Article 2,Chapter 2 Title 14,
Division 3, of the California Civil Code.
IT IS MUTUALLY AGREED THAT:
17. Should the Property or any part thereof be taken or damaged by reason of any public
improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other
manner, subject to the rights of the beneficiary of any other lien on the Property that is senior to the
lien of this Deed of Trust ("Senior Lender"), Beneficiary shall be entitled to all compensation,
awards,and other payments or relief therefor which are not used to reconstruct,restore or otherwise
improve the Property or part thereof that was taken or damaged, and shall be entitled at its option to
commence, appear in and prosecute in its own name, any action or proceedings, or to make any
compromise or settlement, in connection with such taking or damage. Subject to the rights of the
Senior Lenders,all such compensation,awards,damages,rights of action and proceeds which are not
used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or
damaged, including the proceeds of any policies of fire and other insurance affecting the Property,
are hereby assigned to Beneficiary. After deducting therefrom all its expenses,including attorney's
fees,the balance of the proceeds which are not used to reconstruct,restore or otherwise improve the
Property or part thereof that was taken or damaged, shall be applied to the amount due under the
HOME Note secured hereby. No amount applied to the reduction of the principal shall relieve the
Trustor from making regular payments as required by the HOME Note;
18. Upon default by Trustor in making any payments provided for in the HOME Note
secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the
Secured Obligations,and if such default is not cured within the respective time provided therefor in
Section 34 of this Deed of Trust, below, Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written declaration of default and demand for
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sale, and of written notice of default and of election to cause the property to be sold, which notice
Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust.
Beneficiary shall also deposit with Trustee this Deed, the Note and all documents evidencing
expenditures secured hereby;
19. a. Prior to the repayment in full of the HOME Loan,the Trustor shall not assign
or attempt to assign the Agreement or any right therein,nor make any total or partial sale,transfer,
conveyance or assignment of the whole or any part of the Property, the Project thereon, or any
portion thereof or interest therein (referred to hereinafter as a "Transfer"), without prior written
approval of the Beneficiary,except as otherwise permitted in the HOME Note. Consent to one such
transaction shall not be deemed to be a waiver of the right to require consent to future or successive
transactions. Beneficiary shall not unreasonably withhold or delay its consent. If consent is given,
any such transfer shall be subject to this Section 19, and any such transferee shall assume all
obligations hereunder and agree to be bound by all provisions contained herein, subject to the
provisions of paragraph e(3) of this Section 19.
b. In connection with any assignment that requires Beneficiary consent,any such
proposed transferee shall have the qualifications and financial responsibility necessary and adequate
as may be reasonably determined by the Beneficiary,to fulfill the obligations undertaken by Trustor
in the Agreement and the HOME Loan Documents. Any such proposed transferee,by instrument in
writing satisfactory to the Beneficiary and in form recordable among the land records of Orange
County,for itself and its successors and assigns,and for the benefit of the Beneficiary shall expressly
assume all of the obligations of the Trustor under the Agreement and the HOME Loan Documents,
and agree to be subject to all conditions and restrictions applicable to the Trustor in this Deed of
Trust, subject to the provisions of paragraph e(3)of this Section 19. There shall be submitted to the
Beneficiary for review all instruments and other legal documents proposed to effect any such
transfer; and if approved by the Beneficiary, which approval shall not be unreasonably withheld,
conditioned, or delayed, its approval shall be indicated to the Trustor in writing.
C. In the absence of specific written agreement by the Beneficiary, which
agreement will not be unreasonably withheld, no Transfer, or approval thereof by the Beneficiary,
shall be deemed to relieve the Trustor or any other party from any obligations under the Agreement
or any other HOME Loan Document.
d. In the event of a Transfer prior to the time the HOME Loan is paid in full and
without the prior written consent of the Beneficiary(if such consent is required), the net proceeds
(after repayment in full of the loan from the proceeds of the Permanent Loan and the reconveyance of
the Permanent Deed of Trust), shall be paid to the Beneficiary to the extent necessary to pay in full
the accrued interest, if any, current interest and remaining principal balance of the HOME Loan.
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e. (1) As used herein,"Transfer"includes the sale,agreement to sell,transfer
or conveyance of the Property, the Project, or any portion thereof or interest therein, whether
voluntary, involuntary,by operation of law or otherwise, the execution of any installment land sale
contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all
or substantially all of the Property or Project,except as provided in subparagraph e(3)of this Section
19, below.
(2) "Transfer"shall also include the transfer,assignment,hypothecation or
conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor
to an entity form other than that of Trustor at the time of execution of the Agreement, except that a
cumulative change in ownership interest of any general partner of forty-nine percent (49%) or less
shall not be deemed a"Transfer" for purposes of this Deed of Trust.
(3) Notwithstanding paragraphs (1) and(2), above, "Transfer" shall not
include any of the following Permitted Transfers:
(a) a conveyance of a security interest to the beneficiary of a deed of
trust securing a loan approved by the City to be prior in right to the HOME Loan, or the conveyance
of title to the Property or Project in connection with a foreclosure, a deed in lieu of foreclosure or
similar conversion of such loan;
(b)(i) Subject to subparagraph (b)(ii), below, a conveyance of the
Property or Project to a limited partnership in which the managing general partner is Trustor or
Trustor's General Partner,or a sale back from such partnership to Trustor or such General Partner,or
the substitution of such General Partner as directed by the Investor Limited Partner in accordance
with the terms of the Limited Partnership Agreement.
(ii) Notwithstanding any provision to the contrary contained herein,
any event described in subparagraph (b)(i) shall not be deemed to be a Permitted Transfer unless
Beneficiary reasonably determines, which determination shall not be unreasonably withheld, that
Trustor's General Partner remains, or another entity reasonably acceptable to Beneficiary (which
shall not be unreasonably withheld) becomes, the controlling and managing general partner of
Trustor.
(c) The leasing for occupancy of all or any part of the Property or
Project in accordance with the Agreement and the HOME Regulatory Agreement.
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(d) The inclusion of equity participation by Trustor by transfer or
addition of limited partners to Trustor or similar mechanism.
(e)The pledge by a General Partner to the Investor Limited Partner of
the General Partner's interest in Trustor, as security for the perfonnance of all of the General
Partner's obligations under the Limited Partnership Agreement.
(f) The sale, transfer or pledge of a limited partnership interest in
Trustor or of a partnership interest in the Investor Limited Partner.
(g) The appointment by the Investor Limited Partner, in accordance
with the Limited Partnership Agreement, of an additional or substitute General Partner that is an
Affiliate of the Investor Limited Partner or, if not an Affiliate of the Investor Limited Partner, is
reasonably acceptable to Beneficiary.
(h) The withdrawal,removal and/or replacement of a general partner
of Trustor pursuant to the terns of Trustor's Limited Partnership Agreement, provided that any
required substitute general partner is reasonably acceptable to Beneficiary, as evidenced by the
Beneficiary's written consent, and is selected with reasonable promptness (except that no such
consent shall be required if the substitute general partner is an Affiliate of the Investor Limited
Partner).
(i) A transfer of a general partner's interest to the limited partner
pursuant to the option provided to it in connection with Trustor's Limited Partnership Agreement,or
a conveyance to a general partner of Trustor of Trustor's interest in the Property and the
improvements or a transfer of limited partnership interests to a general partner of Trustor pursuant to
the option provided to that general partner in Trustor's Limited Partnership Agreement.
0)The transfer of all or any part of the Project or Property to Jamboree
Housing Corporation,or an entity directly controlled by Jamboree Housing Corporation,or an entity
in which Jamboree Housing Corporation is the general partner or managing member.
(k) Any dilution of a General Partner's interest in Trustor in
accordance with the Limited Partnership Agreement.
f. Beneficiary shall not unreasonably withhold, condition or delay its approval of any
matter for which its approval is required hereunder.Any disapproval shall be in writing and contain
Beneficiary's reasons for disapproval.
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20. After the lapse of such time as may then be required by law following the recordation
of a notice of default, and notice of sale having been given as then required by law,Trustee,without
demand on Trustor,shall sell the Property at the time and place fixed by it in the notice of sale,either
as a whole or in separate parcels, and in such order as it may determine at public auction to the
highest bidder for cash in lawful money of the United States,payable at time of sale. Trustee may
postpone sale of all or any portion of the Property by public announcement at the time and place of
sale,and from time to time thereafter may postpone the sale by public announcement at the time and
place of sale, and from time to time thereafter may postpone the sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying
the property so sold, but without any covenant or warranty, express or implied. The recitals in the
deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person,
including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the
proceeds of sale to payment of(1)the expenses of such sale,together with the reasonable expenses
of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale,and
the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any
search and/or other evidence of title procured in connection with such sale and revenue stamps on
Trustee's deed; (3) all sums expended under the tenns hereof,not then repaid,with accrued interest
at the rate specified in the HOME Note; (4) all other sums then secured hereby; and (5) the
remainder, if any, to the person or persons legally entitled thereto;
21. Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by Beneficiary,containing reference to this
Deed of Trust and its place of record,which,when duly recorded in the proper office of the county or
counties in which the property is situated, shall be conclusive proof of proper appointment of the
successor trustee;
22. The pleading of any statute of limitations as a defense to any and all obligations
secured by this Deed of Trust is hereby waived to the full extent permissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have been
paid and all obligations secured hereby have been satisfied,and upon surrender of this Deed of Trust
and the HOME Note to Trustee for cancellation and retention and upon payment of its fees,Trustee
shall reconvey, without warranty,the Property then held hereunder. The recitals in such reconvey-
ance of any matters or fact shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled thereto";
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24. The trust created hereby is irrevocable by Trustor;
25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,
their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term
"Beneficiary"shall include not only the original Beneficiary hereunder but also any future owner and
holder including pledgees, of the HOME Note secured hereby. In this Deed of Trust,whenever the
context so requires, the masculine gender includes the feminine and/or neuter, and the singular
number includes the plural. All obligations of Trustor hereunder are joint and several;
26. Trustee accepts this Trust when this Deed of Trust,duly executed and acknowledged,
is made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to
any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall
succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law;
27. The undersigned Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this Deed of
Trust. After Trustor gives written notice to Beneficiary that the Investor Limited Partner has been
admitted to the Trustor,Beneficiary shall send to the Investor Limited Partner a copy of all notices of
default and all other notices that Beneficiary sends to Trustor,at the address for the Investor Limited
Partner as provided by written notice to Beneficiary by Trustor.
28. Trustor agrees at any time and from time to time upon receipt of a written request
from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents,profits,
and operating expenses of the premises, and the names of the occupants and tenants in possession,
together with the expiration dates of their leases and full infonnation regarding all rental and
occupancy agreements, and the rents provided for by such leases and rental and occupancy
agreements,and such other information regarding the premises and their use as may be requested by
Beneficiary.
29. Trustor agrees that the loan secured by this Deed of Trust is made expressly for the
purpose of financing the construction of improvements on the Property,including 42 dwelling units
of affordable housing for extremely low, very low, and low income households, and such dwelling
units shall be occupied exclusively by such persons as set forth in the Secured Obligations.
30. Trustor agrees that, except as otherwise provided in the HOME Note, upon sale or
refinancing of the property, the entire principal balance of the debt secured by this Deed of Trust,
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plus any accrued but unpaid interest thereon, shall at the option of Beneficiary be immediately due
and payable.
31. The obligation to repay the HOME Loan is a nonrecourse obligation of the Trustor
and its partners. Neither Trustor nor any of its general or limited partners,nor any other party, shall
have any personal liability for repayment of the loan. The sole recourse of Beneficiary shall be the
exercise of its rights against the Property and any related security for the HOME Loan.
Notwithstanding the foregoing, Beneficiary may recover directly from Trustor or from any other
party:
(a) all damages, costs and expenses incurred by Beneficiary as a result of fraud or any
criminal act or acts of Trustor or any partner, shareholder, officer, director or employee of
Trustor, or of any general partner of Trustor, or of any member of a general partner of
Trustor;
(b) all damages, costs and expenses incurred by Beneficiary as a result of
misappropriation of funds provided for the construction of the Project, as described in the
Agreement, rents and revenues from the operation of the Project, or proceeds of insurance
policies or condemnation proceeds;
(c) any and all amounts owing by Trustor pursuant to the indemnification regarding
Hazardous Substances pursuant to the Environmental Indemnity; and
(d) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon
any of the foregoing exceptions (provided that Beneficiary shall pay Trustor's reasonable
court costs and attorneys' fees if Trustor is the prevailing party in such enforcement or
collection action).
32. Notwithstanding specific provisions of this Deed of Trust,non-monetary performance
hereunder shall not be deemed to be in default where delays or defaults are proximately caused by
any of the following Force Majeure events,provided such event actually delays and interferes with
the timely perfonnance of the matter, and, despite the exercise of diligence and good business
practices, such event is beyond the reasonable control of Trustor: War; insurrection; strikes; lock-
outs;riots;floods;earthquakes;fires;casualties;acts of God;acts of the public enemy;epidemics or
pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation including litigation challenging the validity of this transaction or
any element thereof,unusually severe weather;inability to secure necessary labor,materials or tools;
delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of
any Governmental Authority(except acts or failure to act of the Beneficiary in its capacity as lender
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shall not excuse performance by the Beneficiary);the imposition of any applicable moratorium by a
Governmental Authority; or any other causes which despite the exercise of diligence and good
business practices are or would be beyond the reasonable control of the party claiming such delay
and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a
Force Majeure Event unless and until Trustor delivers to Beneficiary written notice describing the
event,its cause,when and how Trustor obtained knowledge,the date the event commenced,and the
estimated delay resulting therefrom. Trustor shall deliver such written notice within thirty(30)days
after it obtains actual knowledge of the event.
33. If the rights and liens created by this Deed of Trust shall be held by a court of
competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations,the
unsecured portion of such obligations shall be completely performed and paid prior to the
performance and payment of the remaining and secured portion of the obligations, and all
performance and payments made by Trustor shall be considered to have been performed and paid on
and applied first to the complete payment of the unsecured portion of the obligations.
34. (a) Subject to the extensions of time set forth in Section 32, and subject to the
further provisions of this Section 34, failure or delay by Trustor to perform any term or provision
respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes
a default under this Deed of Trust.
(b) Beneficiary shall give written notice of default to Trustor, specifying the
default complained of by the Beneficiary. Failure or delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default.
(c) Any failures or delays by Beneficiary in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive
Beneficiary of its right to institute and maintain any actions or proceedings which it may deem
necessary to protect, assert, or enforce any such rights or remedies.
(d) If a monetary event of default occurs, prior to exercising any remedies
hereunder,Beneficiary shall give Trustor written notice of such default. Trustor shall have a period
of twenty (20) days after such notice is given within which to cure the default prior to exercise of
remedies by Beneficiary.
(e) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder,Beneficiary shall give Trustor notice of such default. If the default is reasonably capable
of being cured within thirty(30)days,Trustor shall have such period to effect a cure prior to exercise
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of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured
within thirty (30) days, and Trustor (i) initiates corrective action within said period, and (ii)
diligently,continually,and in good faith works to effect a cure as soon as possible,then Trustor shall
have such additional time as is reasonably necessary to cure the default prior to exercise of any
remedies by Beneficiary. If Trustor fails to take corrective action or cure the default within a
reasonable time,Beneficiary shall give Trustor and,as provided in paragraph(f),below,the Investor
Limited Partner notice thereof,whereupon the Investor Limited Partner may remove and replace the
general partner with a substitute general partner, who shall effect a cure within a reasonable time
thereafter in accordance with the foregoing provisions. Beneficiary agrees to accept cures tendered
by the Investor Limited Partner within the cure periods provided in this Deed of Trust or within the
time periods provided in Civil Code Section 2924c,whichever is longer. Additionally,in the event
the Investor Limited Partner is precluded from curing a non-monetary default due to an inability to
remove the general partner as a result of a bankruptcy,injunction,or similar proceeding by or against
Trustor or its general partner,Beneficiary agrees to forbear from completing a foreclosure(judicial or
nonjudicial)during the period during which the Investor Limited Partner is so precluded from acting,
not to exceed 90 days,provided such limited partner is otherwise in compliance with the foregoing
provisions. In no event shall Beneficiary be precluded from exercising remedies if its security
becomes or is about to become materially j eopardized by any failure to cure a default or the default is
not cured within one hundred eighty(180) days after the first notice of default is given.
(f) After Trustor gives written notice to Beneficiary that the Investor Limited
Partner has been admitted to the Trustor, Beneficiary shall send to the Investor Limited Partner a
copy of all notices of default and all other notices that Beneficiary sends to Trustor,at the address for
the limited partner as provided by written notice to Beneficiary by Trustor.
(g) Except as otherwise required to comply with the provisions of California Civil
Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by
electronic facsimile transmission followed by delivery of a"hard"copy, shall be deemed delivered
upon its transmission; any notice of default that is personally delivered (including by means of
professional messenger service,courier service such as United Parcel Service or Federal Express,or
by U.S. Postal Service), shall be deemed received on the documented date of receipt by Trustor;and
any notice of default that is sent by registered or certified mail, postage prepaid, return receipt
required shall be deemed received on the date of receipt thereof.
35. This Deed of Trust shall be subordinate and junior to each deed of trust securing a
Senior Loan("Senior Deed of Trust")The term"Senior Loan"shall have the meaning given to it in
the HOME Note. Following the reconveyance of a Senior Deed of Trust,this Deed of Trust will be
subordinate and junior to the deed of trust in favor of the maker of the permanent or take-out loan
replacing such Senior Loan (each of which permanent or take-out loans is referred to herein as a
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9 —HOME DEED OF TRUST
Page 15
413
"Senior Loan"). Beneficiary shall execute such instruments as may be necessary to subordinate the
lien of this Deed of Trust,to the deed of trust securing a Senior Loan and any regulatory agreement
recorded in connection with the Four Percent Tax Credit (as defined in Section 36 below). In the
event of a default or breach by Trustor of a security instrument securing a Senior Loan described in
this Section 35, Beneficiary shall have the right to cure the default prior to completion of any
foreclosure. In such event,Beneficiary shall be entitled to reimbursement by Trustor of all costs and
expenses incurred by Beneficiary in curing the default. The amount of all such disbursements shall
be a lien against the Property and added to the obligation secured by this Deed of Trust until repaid,
with interest at the highest rate permitted by law.
36. Trustor has informed Beneficiarythat Trustor intends that the Project qualify for an allocation
of low-income housing tax credits under Section 42 of the Internal Revenue Code ("Four Percent
Tax Credit"). Beneficiary acknowledges that Trustor and the Tax Credit Allocation Committee have
or intend to enter into an Extended Use Agreement. Beneficiary acknowledges and agrees that, in
the event of a foreclosure of its interest under this Deed of Trust or delivery by Trustor of a deed in
lieu thereof(collectively,a"Foreclosure"),the following rule contained in Section 42(h)(6)(E)(ii)of
the Code shall apply:
For a period of three(3)years from the date of Foreclosure,with respect to any unit
that had been regulated by the Extended Use Agreement, (i) none of the eligible tenants
occupying those units at the time of Foreclosure may be evicted or their tenancy terminated
(other than for good cause), (ii)nor may any rent be increased except as otherwise permitted
under Section 42 of the Code.
[Remainder of Page Intentionally Left Blank; Signatures on Following Page]
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9—HOME DEED OF TRUST
Page 16
414
IN WITNESS WHEREOF,Trustor has executed this Deed of Trust as of the day and year set
forth above.
"TRUSTOR"
BEACH HOUSING PARTNERS LP
a California limited partnership
By: JHC-Beach LLC, a California limited liability company
Its: Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation
Its: Manager
By:
Michael Massie
Chief Development Officer
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9—HOME DEED OF TRUST
Page 17
415
Exhibit A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON
BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA,AS PER MAP RECORDED IN BOOK 76,PAGE 4 OF PARCEL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN:159-031-18
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 9— HOME DEED OF TRUST
Exhibit A—Legal Description
416
ATTACHMENT NO. 10
INCLUSIONARY NOTE
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
417
RESIDUAL RECEIPTS PROMISSORY NOTE
SECURED BY DEED OF TRUST
TO THE CITY OF HUNTINGTON BEACH
3% Huntington Beach,California
$[TBD—unpaid principal +interest] , 202_
FOR VALUE RECEIVED, BEACH HOUSING PARTNERS LP, a California limited
partnership (`Borrower"), hereby promises to pay to THE CITY OF HUNTINGTON BEACH, a
municipal corporation of the state of California ("City"), or order, a principal amount of
[ ($ )], or so much thereof as may be advanced by the
City to Borrower as the Inclusionary Loan pursuant to the Affordable Housing Agreement dated as of
January 5, 2021, (the"Affordable Housing Agreement")between Borrower("Owner"therein)and
the City,incorporated herein by this reference. Borrower shall pay interest at the rate,in the amount
and at the time hereinafter provided.
1. Definitions. Any capitalized term not otherwise defined herein shall have the
meaning ascribed to such term in the Affordable Housing Agreement. In addition, the following
terms shall have the following meanings:
"Amended and Restated Covenants" means the Amended and Restated Agreement
Containing Covenants (Including Rental Restrictions) between the City, the Huntington Beach
Housing Authority, and Borrower, dated as of January 5, 2021 and recorded against the Property.
"Assignment of Agreements"means the assignment by Borrower to City of plans, contracts
and permits, dated around the date hereof and securing the Inclusionary Loan.
"Borrower's Limited Partnership Agreement" shall mean that certain Amended and Restated
Agreement of Limited Partnership by and between, Borrower's Managing General Partner and Investor
Limited Partner dated as of[ _, 202_].
"City" means the City of Huntington Beach, California, a municipal corporation, and any
assignee of or successor to its rights, powers and responsibilities.
"City's Share of Residual Receipts" has the meaning given to it in Paragraph 7(b) of this
Note.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
PAGE 1
418
"Construction Lender" means [ ], or another institutional lender reasonably
approved by the City.
"Construction Loan" means the loan from Construction Lender to pay a portion of the
Development Costs, secured by the Construction Loan Deed of Trust.
"Construction Loan Deed of Trust" means the deed of trust dated around the date hereof
given by Borrower for the benefit of Construction Lender, securing the Construction Loan.
"Deferred Developer Fee"means the portion of the Developer Fee to be paid from the cash
flow of the Project as provided in the final Project Budget approved by the City at the conversion
from construction financing to permanent financing.
"HOME Loan" means a loan of HOME Program funds from the City to Borrower in the
amount of[$2,830,697].
"Improvements" means the improvements to be constructed on the Property in accordance
with the Affordable Housing Agreement, including but not limited to the Scope of Development
attached as Attachment No. 3 to the Affordable Housing Agreement.
"Inclusionary Deed of Trust"means the Deed of Trust given by Borrower for the benefit of
the City dated around the date hereof, securing the Inclusionary Loan.
"Inclusionsr Loan"means the loan from the City to Borrower,in the amount and pursuant to
the terms and conditions set forth in this Note and the other Inclusionary Loan Documents.
"Inclusionary Loan Documents" means the Affordable Housing Agreement, this Note, the
Inclusionary Deed of Trust, the Assignment of Agreements, and the Environmental Indemnity.
"Inclusionary Loan" means the loan of Affordable Housing Trust Funds from the City to
Borrower in the amount and pursuant to the terms and conditions set forth in this Note and the other
Inclusionary Loan Documents. in the face amount of this Note.
"Investor Limited Partner"collectively refers to the entities identified as the"Limited Partner"and
"Special Limited Partner" in Borrower's Limited Partnership Agreement and the related contribution
agreement, and their successors and assigns.
"Maturity" means the sixtieth (60tb) anniversary of the Occupancy Date.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
PAGE 2
419
"Net Proceeds"means the amount,if any,by which a refinancing exceeds the amount needed
to repay a Senior Loan in full, including principal and interest, any early redemption or prepayment
penalty,and customary and reasonable fees and costs of the transaction,the costs incurred by Owner
to perform repairs or maintenance to the Project, amounts required by a Senior Lender to be
deposited into a reserve fund,and the amount paid(excluding voluntary payments)towards the then-
outstanding balance of a Senior Loan.
"Note" means this promissory note evidencing the Inclusionary Loan.
"NPLH Assisted Units"means the residential units in the Project that are designated as such
by Orange County Housing and Community Development.
"NPLH Flexible Operating Reserve Deposits" means deposits, in the amounts and at the
times required by Orange County Housing and Community Development, into a cash-flow funded
reserve established by Borrower to provide a reserve for shortfalls in operations,supportive services,
furnishings, or replacement reserves associated with the NPLH Assisted Units. The amount of the
NPLH Flexible Operating Reserve Deposits is calculated based on the NPLH Loan amount divided
by the total amounts of the NPLH Loan plus the Residual Receipts Loans,multiplied by fifty percent
(50%). For example, if the NPLH Loan amount is $5,875,538 and the total amount of the NPLH
Loan plus the Residual Receipts Loans is [$ ], then the NPLH Flexible Operating
Reserve Deposits will be equal to [ %] of the cash flow remaining after payment of Annual
Operating Expenses and the theretofore unpaid portion of the Deferred Developer Fee described in
paragraph 7(d) below. The NPLH Flexible Operating Reserve Deposits have priority of payment
over the distribution of Residual Receipts for payment of the Residual Receipts Loans.
"NPLH Loan"means a loan of No Place Like Home funds from Orange County Housing and
Community Development to Borrower in the original principal amount of$5,875,538. The NPLH
Loan is non-amortizing and due in full at maturity
"NPLH Transition Reserve"means funds reserved to fund the Project's operating expenses
allocable to the NPLH Assisted Units and subject to the requirements of Orange County Housing and
Community Development.
"Occupancy Date"means the date on which the City of Huntington Beach issues a Certificate
of Occupancy for the Project.
"OCHFT Loan"means a loan of Orange County Housing Finance Trust Funds from Orange
County Housing and Community Development to Owner in the original principal amount of
$1,900,000.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
PAGE 3
420
"Pennanent Loan" shall mean the permanent loan from [ ] or another
institutional lender approved by the City, to assist in Borrower's repayment of the construction
financing for the Project and secured by a first priority Deed of Trust on the Property.
"Project" shall mean the financing, planning, construction and use of the Property and the
Improvements as provided in the Affordable Housing Agreement.
"Property" shall mean the real property, including all improvements thereon, legally
described as set forth in Attachment No. 2 to the Affordable Housing Agreement.
"Residual Receipts" shall mean, in a particular calendar year, the amount by which Gross
Revenue(as defined below) exceeds the sum of(i)Annual Operating Expenses (as defined below)
plus(ii)the NPLH Flexible Operating Reserve Deposits,as determined by an audit to be completed
not later than ninety(90)days after the end of each calendar year by an independent certified public
accountant first approved in writing by the City,using generally accepted accounting principles and
based on the accrual method(the "Audit").
(i) Gross Revenue. "Gross Revenue," with respect to a particular calendar year, shall
mean all revenue, income, receipts, and other consideration actually received from operation or
leasing of the Project. "Gross Revenue" shall include, but not be limited to: all rents, fees and
charges paid by tenants,rental subsidy payments received for the dwelling units,deposits forfeited by
tenants, cancellation fees, price index adjustments and other rental adjustments to leases or rental
agreements; proceeds from vending and laundry room machines; the proceeds of business
interruption or similar insurance; the proceeds of casualty insurance to the extent not utilized to
repair or rebuild the Project; and condemnation awards for a taking of part or all of the Project for a
temporary period. "Gross Revenue"shall also include the fair market value of any goods or services
provided in consideration for the leasing or other use of any portion of the Project, except that the
value of services provided by the on-site manager(s)shall not be treated as"Gross Revenue"so long
as no more than two dwelling units are leased to or otherwise used by on-site manager(s). "Gross
Revenue"shall not include tenants' security deposits,proceeds from the loans described in Sections
3 and 4 of the Method of Financing attached to the Affordable Housing Agreement as Attachment
No. 6,capital contributions or similar advances,or interest that is earned on and allocated to reserve
accounts.
(ii) "Annual Operating Expenses," with respect to a particular calendar year means the
following costs reasonably and actually incurred for operation and maintenance of the Project to the
extent that they are consistent with an annual independent audit performed by a certified public
accountant using generally accepted accounting principles:property and other taxes and assessments
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
PAGE 4
421
imposed on the Project; premiums for property damage and liability insurance; utility services not
paid for directly or reimbursed by tenants,including but not limited to water,sewer,trash collection,
gas and electricity and similar customary utility services; maintenance and repair including but not
limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning,
common systems repairs, general repairs,janitorial, supplies; any annual lease payment, license or
certificate of occupancy fees required for operation of the Project; general administrative expenses
including but not limited to advertising and marketing, security services and systems,professional
fees for legal, audit, accounting and tax returns for the limited partnership, and similar customary
administrative expenses;property management fees,expenses and costs,not to exceed[six percent]
of Gross Revenue, pursuant to a management contract approved by the City in City's reasonable
discretion; resident supportive services fees as required by Project lenders and the California Tax
Credit Allocation Committee;partnership management fees payable to Borrower's managing general
partner in an amount not to exceed [ Dollars ($ )] in the first year and
increased thereafter at an annual rate of[three percent(3%)]; a cumulative asset management fee to
be paid to the Borrower's Investor Limited Partner in an amount not to exceed [
Dollars ($ )] in the first year and increased thereafter at an annual rate of[three percent(3%)];
cash deposited into a replacement reserve in the amount of[Five Hundred Dollars($500)]per unit or
such higher amounts as are required by Project lenders, the California Tax Credit Allocation
Committee, and the Investor Limited Partner from time to time; cash deposited into an operating
reserve in such reasonable amounts as are required by Project lenders, the Tax Credit Allocation
Committee, and the tax credit investor from time to time, and approved by the City; cash deposited
into the NPLH Transition Reserve in amounts (if any) required by Orange County Housing and
Community Development; a monitoring fee to the City in an amount equal to$1,075,to be increased
at an annual rate of three percent, fixed debt service payments (excluding debt service contingent
upon the availability of residual receipts or surplus cash of the Project)on loans associated with the
Project and approved by the City; all other payments, charges and other amounts becoming due
under the Permanent Deed of Trust; and,payments on loans made by the Investor Limited Partner to
Borrower. "Annual Operating Expenses"shall not include the following:depreciation,amortization,
depletion or other non-cash expenses or amounts expended from a reserve account. Annual
Operating Expenses will be subject to the reasonable approval of the City.
"Residual Receipts Loans"means the Inclusionary Loan,the HOME Loan,the SNHP Loan,
and the OCHFT Loan.
"Senior Lender" means the maker of a Senior Loan, including but not limited to
[ ] as the Construction Lender and the Permanent Lender.
"Senior Loan" means the Construction Loan, the Permanent Loan, the NPLH Loan, the
SNHP Loan, the HOME Loan, the OCHFT Loan, and any other loan secured by a deed of trust or
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10— INCLUSIONARY NOTE
PAGE 5
422
other instrument to which the City agrees to subordinate this Note and the other Inclusionary Loan
Documents.
"SNHP Loan" means a loan of Special Needs Housing Program funds from the California
Housing Finance Agency to Owner in the original principal amount of$3,603,160.
2. This Note evidences the obligation of the Borrower to the City for the repayment of
the Inclusionary Loan.
3. This Note is payable at the principal office of City, 2000 Main Street, Huntington
Beach, California 92648, or at such other place as the holder hereof may inform the Borrower in
writing, in lawful money of the United States.
4. This Note shall be secured by the Inclusionary Deed of Trust.
5. This Note shall accrue simple interest at the rate of three percent(3%)per annum on
the principal amount outstanding, from the date of disbursement.
6. The entire unpaid principal balance of this Note and all accrued but unpaid interest
shall be due and payable upon the Maturity Date, and upon the earlier occurrence of the following:
(a) the date the Property or the Improvements or any portion thereof or interest
therein is sold, transferred, assigned or refinanced, without the prior written approval of the City,
except as permitted by the provisions of Section 108 (titled "Assignments and Transfers") of the
Affordable Housing Agreement; or
(b) the date on which there is a default by the Borrower under the terms of this
Note,the Affordable Housing Agreement,the Inclusionary Deed of Trust,the Amended and Restated
Covenants,or any deed of trust or other instrument securing a Senior Loan or the Inclusionary Loan,
which is not cured or waived within the respective time period provided herein and therein.
7. Except in the event of a default described in Section 12 hereof,no payments will be
due and payable under this Note except to the extent of(a)the City's Share of Residual Receipts,and
(b)any refinancing or Cost Savings, subject to the limitations set forth below. Prior to the Maturity
Date, Borrower shall be obligated to repay the Inclusionary Loan as follows:
(a) Annually, not later than the thirtieth (30th) day of April, beginning with the
year following the year in which the Occupancy Date occurs, Borrower shall submit to the City an
audited Annual Financial Statement for the preceding calendar year,prepared by a certified public
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
PAGE 6
423
accountant reasonably acceptable to the City, determining the amount of Residual Receipts,if any,
generated in that year, together with payment of the City's Proportionate Share of such Residual
Receipts. The first such Annual Financial Statement shall be for the partial year beginning on the
Occupancy Date and ending on December 31 of that year. The City shall review and approve such
Annual Financial Statement,or request revisions,within 30 days after receipt. If there is an increase
in the amount of any payment due and payable to the City (as the result, for example, of a
determination that the actual amount of Residual Receipts to which the City is entitled exceeds the
amount of City's share of Residual Receipts shown in the Annual Financial Statement submitted by
Borrower), Borrower shall promptly pay to the City the difference, with interest, from the date on
which such payment was due, at the rate of one percent(1%)over the Prime Rate announced by the
Permanent Lender,but in any event within ten (10) days of notice of such increase.
(b) Borrower will repay the Inclusionary Loan with annual payments equal to the
City's Share of Residual Receipts. The City's Share of Residual Receipts will be calculated as
follows: a percentage derived from a fraction in which the principal amount of the Inclusionary Loan
upon final disbursement is the numerator and the sum of the Inclusionary Loan plus all other
Residual Receipts Loans is the denominator, multiplied by fifty percent (50%). For example,
assuming the principal amount of the Inclusionary Loan is [$ ], and the total principal
amount of the Residual Receipts Loans is [$ ], the City's Share would be
[$ _ ] divided by[$ ], or [ ]%, multiplied by fifty percent(50%),which
would equal [ %].
(c) All payments to the City shall be applied first to amounts owed under this
Note other than principal and interest, then to accrued interest, and then to reduce the principal
amount owed.
(d) If a portion of the Developer Fee is to be paid from the cash flow of the
Project("Deferred Developer Fee"),then notwithstanding paragraph(b)of this Section 7,Borrower
may first utilize one hundred percent (100%) of the cash flow remaining after payment of Annual
Operating Expenses with respect to a particular calendar year to pay the sponsors of the Project the
theretofore unpaid portion of the Deferred Developer Fee.
(e) If,upon completion of the Project,there are"Cost Savings"as defined below,
Borrower will be entitled to retain fifty percent (50%) of the Cost Savings. A share of the Cost
Savings in a percentage equal to the City's Share of Residual Receipts calculated as set forth in
paragraph (b) of this Section 7 will be applied to the repayment of the Inclusionary Loan; provided
that, if the makers of the NPLH Loan and the Residual Receipts Loans other than the Inclusionary
Loan do not require that they receive a share of Cost Savings,then the City's Proportionate Share of
the Cost Savings will be determined by the formula set forth in paragraph (b) of this Section 7,
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
PAGE 7
424
without consideration of the amount of such other Residual Receipts Loans or the NPLH Loan, as
applicable. "Cost Savings", as that term is used in this Note, is the difference between the total
sources of funds and the total cost of development as shown in the Borrower's cost certification
contained in Borrower's application to the California Tax Credit Allocation Committee for a Form
8609 for the Project("Tax Credit Report");provided,however,the Cost Savings will be adjusted to
take into account (1) the loss of any equity investment due to an adjustment in the allowable tax
credits;provided that the tax credit factor applied to the required equity contribution will be as set
forth in Borrower's limited partnership agreement; and(ii)any reduction in the first mortgage loan
required by the Construction Loan Documents. The amount payable to the City under this paragraph
will be paid within sixty(60)days following submittal of the Tax Credit Report to the California Tax
Credit Allocation Committee. Such amounts will accrue interest at the default rate of ten percent
(10%) from the date due and payable until paid in full. If Borrower does not obtain tax credit
financing for this Project,Borrower will submit to the City a report that substantially complies with
the Tax Credit Report required by the California Tax Credit Allocation Committee. Such report will
be submitted to the City within one year following completion of construction of the Project. The
amount payable to the City hereunder will be paid within sixty(60)days following submittal of the
report to the City. The City will be entitled to review and approve the report and to require
appropriate revisions to assure that Cost Savings have not been minimized or reallocated. The
requirements in the foregoing paragraph will be applied to the fullest extent permitted by applicable
requirements and restrictions of California's Tax Credit Allocation Committee.
(f) If at any time Borrower refinances the Senior Loan, Borrower will apply the
Net Proceeds of any such refinancing first to pay previously incurred Operating Expenses still owing,
then a share of the Net Proceeds equal to the City's Share of Residual Receipts calculated as set forth
in paragraph(b)of this Section 7 will be paid to the City to pay accrued interest on,and then reduce
the principal amount of the Inclusionary Loan; provided that, if the makers of the NPLH Loan and
the Residual Receipts Loans other than the Inclusionary Loan do not require that they receive a share
of Net Proceeds, then the City's proportionate share of Net Proceeds will be determined by the
formula set forth in paragraph (b) of this Section 7, without consideration of the amount of such
other Residual Receipts Loans or the NPLH Loan, as applicable.
8. Borrower may prepay this Note, or any part hereof, without penalty. However,
prepayment of the obligation evidenced by this Note prior to the expiration of the term of the
Amended and Restated Covenants will not entitle Borrower to a reconveyance of the Inclusionary
Deed of Trust.
9. Prohibition Against Transfer.
(a) Prior to the repayment in full of the City Loan, the Borrower will not assign or
attempt to assign the Affordable Housing Agreement or any right therein, nor make any total or
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 10—INCLUSIONARY NOTE
PAGE 8
425
partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the
Improvements thereon, or any portion thereof or interest therein (referred to hereinafter as a
"Transfer"),without prior written approval of the City,except as otherwise permitted in this Note or
the Affordable Housing Agreement. Consent to one such transaction will not be deemed to be a
waiver of the right to require consent to future or successive transactions. The City will not
unreasonably withhold or delay its consent. If consent is given, any such transfer will be subject to
this Section 9, and any such transferee must assume all obligations hereunder and agree to be bound
by all provisions contained herein.
(b) In connection with any assignment that requires City consent, any such proposed
transferee must have the qualifications and financial responsibility necessary and adequate as maybe
reasonably determined by the City, to fulfill the obligations undertaken by Borrower in the
Affordable Housing Agreement, the Amended and Restated Covenants, and this Note. Any such
proposed transferee,by instrument in writing satisfactory to the City and in form recordable among
the official records of Orange County, for itself and its successors and assigns,and for the benefit of
the City must expressly assume all of the obligations of the Borrower under the Affordable Housing
Agreement, the Amended and Restated Covenants, and this Note, and agree to be subject to all
conditions and restrictions applicable to the Borrower in this Note. There will be submitted to the
City for review all instruments and other legal documents proposed to effect any such transfer;and if
approved by the City,which approval shall not be unreasonably withheld,conditioned,or delayed,its
approval will be indicated to the Borrower in writing.
(c) In the absence of specific written agreement by the City,which agreement will not be
unreasonably withheld, no Transfer, or approval thereof by the City, will be deemed to relieve the
Borrower or any other party from any obligations under the Affordable Housing Agreement or the
Amended and Restated Covenants.
(d) In the event of a Transfer prior to the time the Inclusionary Loan is paid in full
without the prior written consent of the City (if such consent is required), the remaining principal
balance of the Inclusionary Loan and all accrued but unpaid interest will be immediately due and
payable.
(i) As used herein, "Transfer" includes the sale, transfer or conveyance of the
Property, the Improvements, or any portion thereof or interest therein, whether voluntary,
involuntary, by operation of law or otherwise, or any agreement to do so; the execution of any
installment land sale contract or similar instrument affecting all or a portion of the Property or the
Improvements; or the lease of all or substantially all of the Property or Improvements, except the
lease for occupancy of all or any part of the Improvements on the Property.
AFFORDABLE HOUSING AGREEMENT
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ATTACHMENT NO. 10—INCLUSIONARY NOTE
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(ii) "Transfer" will also include the transfer, assignment, hypothecation or
conveyance of legal or beneficial ownership of any interest in Borrower, or any conversion of
Borrower to an entity form other than that of Borrower at the time of execution of this Note, except
for the following: (A) a cumulative change in the ownership interests of any individual limited
liability company member of forty-nine percent or less will not be deemed a"Transfer"for purposes
of this Note;and(B)a transfer of a portion or a majority of stock of any corporation to a trust formed
in connection with a qualified employee ownership plan will not,by itself,be deemed to constitute a
change in ownership for purposes of this Note.
(iii) Notwithstanding paragraphs (i) and (ii), "Transfer" will not include any
Permitted Transfers, as defined in the Affordable Housing Agreement.
(e) The City will not unreasonably withhold,condition or delay its approval of any matter
for which its approval is required hereunder. Disapprovals will be in writing and contain the City's
reasons for disapproval.
10. Borrower waives presentment for payment,demand,protest,and notices of dishonor
and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of
any extension or extensions of the time of payment or of any due date under this Note,in whole or in
part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all
costs and expenses, including reasonable attorney's fees, which may be incurred by the holder
hereof, in the enforcement of this Note, the Inclusionary Deed of Trust or any term or provision of
either.
11. Upon the failure of Borrower to perform or observe any term or provision of this
Note, or upon the occurrence of any event of default under the terms of the Affordable Housing
Agreement,the Inclusionary Deed of Trust,or the Amended and Restated Covenants,which remains
uncured after the required notice and expiration of the applicable cure period, the holder may
exercise its rights or remedies hereunder or thereunder.
12. Subject to the extensions of time set forth in Section 13, and subject to the further
provisions of this Section 12,failure or delay by Borrower to perform any material term or provision
of this Note, the Affordable Housing Agreement, the Inclusionary Deed of Trust, or the Amended
and Restated Covenants a default under this Note.
(a) The City shall give written notice of default to Borrower, specifying the
default complained of by the City. Delay in giving such notice shall not constitute a waiver of any
default nor shall it change the time of default.
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ATTACHMENT NO. 10—INCLUSIONARY NOTE
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(b) Any failures or delays by the City in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays
by City in asserting any of its rights and remedies shall not deprive the City of its right to institute
and maintain any actions or proceedings which it may deem necessary to protect, assert,or enforce
any such rights or remedies.
(c) If a monetary event of default occurs, prior to exercising any remedies
hereunder,the City shall give the Borrower written notice of such default. The Borrower shall have
a period of twenty (20) days after such notice is given within which to cure the default prior to
exercise of remedies by the City.
(d) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder,the City shall give Borrower notice of such default. If the default is reasonably capable of
being cured within thirty(30)days,Borrower shall have such period to effect a cure prior to exercise
of remedies by the City. If the default is such that it is not reasonably capable of being cured within
thirty(30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently,
continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have
such additional time as is reasonably necessary to cure the default prior to exercise of any remedies
by the City.
(e) If Borrower fails to take corrective action or cure the default within a
reasonable time, the City will give the Senior Lender and, as provided in paragraph (0, below, the
Investor Limited Partner,notice thereof. Subject to the terms of Borrower's partnership agreement,
the Investor Limited Partner may take such action, including removing and replacing the general
partner or managing member of Borrower with a substitute general partner or member, who will
effect a cure within a reasonable time thereafter in accordance with the foregoing provisions. The
City agrees to accept cures tendered by a Senior Lender or the Investor Limited Partner within the
cure periods provided herein. Additionally, if the Senior Lender or Investor Limited Partner is
precluded from curing a non-monetary default due to a bankruptcy,injunction,or similar proceeding
by or against Borrower or the general partner of Borrower, the City agrees to forbear from
completing a foreclosure(judicial or nonjudicial)during the period during which the Senior Lender
or Investor Limited Partner is so precluded from acting, not to exceed ninety days, provided such
Investor Limited Partner and Senior Lender are otherwise in compliance with the foregoing
provisions. In no event will the City be precluded from exercising remedies if its rights become or
are about to become materially j eopardized by a failure to cure a default or if the default is not cured
within one hundred eighty(180) days after the first notice of default is given.
(f) After Borrower gives written notice to the City that the Investor Limited
Partner has been admitted to the Limited Partnership, the City shall send to the Investor Limited
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Partner a copy of all notices of default and all other notices that City sends to Borrower, at the
address for the Investor Limited Partner given in Section 17 of this Note.
(g) A notice of default shall be deemed given only if either(i)dispatched by first
class mail,registered or certified,postage prepaid,return receipt requested,to the addresses specified
for the Borrower and the Investor Limited Partner in Section 17 of this Note, or (ii) by electronic
facsimile transmission to the facsimile numbers specified for the Borrower and the Investor Limited
Partner in Section 17 of this Note, followed by delivery by the method described in clause(i),or(iii)
by personal delivery(including by means of professional messenger or courier service such as United
Parcel Service or Federal Express) to the addresses specified for the Borrower and the Investor
Limited Partner in Section 17 of this Note. Receipt shall be deemed to have occurred on the earlier
of(i)the date of successfully completed electronic facsimile transmission or(ii)the date marked on a
written postal service or messenger or courier service receipt as the date of delivery or refusal of
delivery(or attempted delivery if undeliverable). If either party gives notice of a change of address in
the manner specified in this paragraph, all notices, demands and communications originated after
receipt of the change of address(or the effective date specified in the notice of change of address,if
later) shall be transmitted, delivered or sent to the new address.
13. Notwithstanding specific provisions of this Note, non-monetary performance
hereunder shall not be deemed to be in default where delays are due to causes beyond the control and
without the fault of the party claiming an extension of time to perform (an "Enforced Delay"),
provided that they actually delay and interfere with the timely performance of the matter to which
they would apply and despite the exercise of diligence and good business practices are or would be
beyond the reasonable control of the party claiming such interference, including: war; insurrection;
strikes; lock-outs;riots; floods; earthquakes; fires; casualties;acts of God; acts of the public enemy;
epidemics or pandemics; quarantine restrictions; freight embargoes; lack of transportation;
governmental restrictions or priority; litigation including litigation challenging the validity of this
transaction or any element thereof; unusually severe weather; inability to secure necessary labor,
materials or tools;delays of any contractor, subcontractor,or suppliers;acts of the other party;acts or
failure to act of any governmental agency(except acts or failure to act of the City in its capacity as
maker of the Inclusionary Loan shall not excuse perfonnance by the City); the imposition of an
applicable moratorium by a governmental agency; or any other cause which despite the exercise of
diligence and good business practices are or would be beyond the reasonable control of the party
claiming such delay and interference. Notwithstanding the foregoing,none of the foregoing events
shall constitute an Enforced Delay unless and until the party claiming such delay and interference
delivers to the other party written notice describing the event, its cause, when and how such party
obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom.
The party claiming an Enforced Delay shall deliver such written notice within thirty(30)days after it
obtains actual knowledge of the event.
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14. If the rights created by this Note are held by a court of competent jurisdiction to be
invalid or unenforceable as to any part of the obligations described herein,the remaining obligations
shall be completely performed and paid.
15. The Inclusionary Deed of Trust securing this Note shall be subordinate and junior to
the Senior Loans, to the extent and in the manner provided in the applicable subordination
agreement(s) dated around the date hereof.
16. The City agrees that the lien of the Inclusionary Deed of Trust will be subordinate to
the extended low-income housing commitment(as such term is defined in Section 42(h)(6)(B)of the
Internal Revenue Code)(the"Extended Use Agreement")recorded against the Project;provided that
such Extended Use Agreement,by its terins, shall terminate upon foreclosure under the Inclusionary
Deed of Trust or upon a transfer of the Project by instrument in lieu of foreclosure or comparable
conversion of the Loan, in accordance with Section 42(h)(6)(E) of the Internal Revenue Code. The
following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as
amended,will also apply: for a period of three years from the date of foreclosure,with respect to any
unit that had been regulated by the Extended Use Agreement,(1)none of the tenants occupying those
units at the time of foreclosure may be evicted or their tenancy terminated (other than for good
cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the
Code. Borrower acknowledges and agrees that a default, event of default, or breach (however
such terms may be defined) under the Extended Use Agreement will be an event of default under
this Note and the Inclusionary Deed of Trust and that all costs,damages or other amounts,including
reasonable attorneys' fees incurred by the City as a result of an event of default by Borrower,and all
amounts paid by the City to cure any default under the Extended Use Agreement will be an
obligation of Borrower and become a part of the debt evidenced by this Note and secured by the
Inclusionary Deed of Trust.
17. (a) The obligation to repay the Inclusionary Loan is a nonrecourse obligation of
the Borrower and its partners. Neither the Borrower nor any of its general or limited partners, nor
any other party, shall have any personal liability for repayment of the loan. The sole recourse of the
City with respect to repayment of the Inclusionary Loan shall be the exercise of its rights against the
Property and the Improvements and any related security for the Inclusionary Loan. Notwithstanding
the foregoing, the City may:
(i) obtain a judgment or order (including, without limitation, an
injunction) requiring Borrower or any other party to perform (or refrain from) specified acts other
than repayment of the Inclusionary Loan; and
(ii) recover directly from Borrower or any other party:
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(A) all damages,costs and expenses incurred by the City as a result
of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or
employee of Borrower or of any general partner of Borrower or of any member of a general partner
of Borrower;
(B) all damages,costs and expenses incurred by the City as a result
of misappropriation of funds provided for the construction of the Improvements,as described in the
Affordable Housing Agreement,rents and revenues from the operation of the Project,or proceeds of
insurance policies or condemnation proceeds;
(C) all amounts owing by Borrower pursuant to Borrower's
indemnification regarding Hazardous Substances provided to the City in connection with the
Affordable Housing Agreement; and
(D) all court costs and attorneys' fees reasonably incurred in
enforcing or collecting upon any of the foregoing exceptions (provided that the City shall pay
Borrower's reasonable court costs and attorneys' fees if Borrower is the prevailing party in such
enforcement or collection action).
18. (a) The address of Borrower for purposes of receiving notices pursuant to this Note is as
follows: c/o Jamboree Housing Corporation, 17701 Cowan,Suite 200,Irvine,CA 92614,Attention:
Michael Massie, Chief Development Officer. Borrower's facsimile number is [ ].
The addresses for copies of notices delivered to Borrower pursuant to this Note are as follows:
With a copy to:
Rutan & Tucker, LLP
Attn: Patrick D. McCalla, Esq.
18575 Jamboree Road, 9th Floor
Irvine, California 92612
(b) The address of Investor Limited Partner for purposes of receiving notices
pursuant to this Note is as follows: [ I
19. In addition to the other terms of this Note,Borrower hereby agrees and acknowledges
that, notwithstanding any internal accounting procedures or provision pertaining to the use of
receipts, payments, reserves and distributions contained in its Limited Partnership Agreement or
other organizational document,the terms of this Note and the Affordable Housing Agreement shall
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control as to the use of the City's Affordable Housing Trust Fund provided under the Affordable
Housing Agreement and all operating income from the Project.
[Remainder of Page Intentionally Left Blank; Signatures on Following Page]
AFFORDABLE HOUSING AGREEMENT
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IN WITNESS WHEREOF,Borrower has executed this Note as of the day and year set forth
above.
"BORROWER"
BEACH HOUSING PARTNERS LP
a California limited partnership
By: JHC-Beach LLC, a California limited liability company
Its: Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation
Its: Manager
By
Name: Michael Massie
Title: Chief Development Officer
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ATTACHMENT NO. 11
INCLUSIONARY DEED OF TRUST
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 11 —INCLUSIONARY DEED OF TRUST
434
Recording Requested by
and When Recorded Return to:
City Clerk, City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
SPACE ABOVE THIS LINE FOR RECORDER'S USE
GOVERNMENT BUSINESS
Free Recording Requested
(Govt. Code §27383)
APN: 159-031-18
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(INCLUSIONARY LOAN)
This Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) is
given by BEACH HOUSING PARTNERS LP,a California limited partnership(hereinafter referred
to as "Trustor") (whose address is c/o Jamboree Housing Corporation, 17701 Cowan, Suite 200,
Irvine, California 92614, Attention: Michael Massie, Chief Development Officer; with a copy to
Rutan&Tucker,LLP, 18575 Jamboree Road, 9th Floor, Irvine, California 92612,Attn:Patrick D.
McCalla, Esq., to FIRST AMERICAN TITLE INSURANCE COMPANY, (hereinafter called
"Trustee"), for the benefit of THE CITY OF HUNTINGTON BEACH, a municipal corporation of
the state of California(hereinafter called`Beneficiary"),whose address is City of Huntington Beach,
2000 Main Street, Huntington Beach, California 92648, Attention: City Manager.
Witnesseth: That Trustor IRREVOCABLY GRANTS,TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the
following property(the "Trust Estate"):
(a) That certain real property in the City of Huntington Beach,County of
Orange, State of California more particularly described in Exhibit"A" attached hereto and by this
reference made a part hereof(hereafter referred to as the "Subject Property");
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(b) All buildings, structures and other improvements now or in the future
located or to be constructed on the Subject Property(the"Improvements");
(c) all tenements,hereditaments,appurtenances,privileges,franchises and
other rights and interests now or in the future benefiting or otherwise relating to the Subject Property
or the Improvements, including easements, rights-of-way and development rights (the
"Appurtenances"). (The Appurtenances,together with the Subject Property and the Improvements,
are hereafter referred to as the "Real Property");
(e) subject to the terms of the assignment to Beneficiary set forth in
Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future
payable with respect to or otherwise derived from the Trust Estate or the ownership, use,
management,operation leasing or occupancy of the Trust Estate,including those past due and unpaid
(the"Rents");
(f) all inventory,equipment,fixtures and other goods(as those terms are
defined in Division 9 of the California Uniform Commercial Code (the "UCC"), and whether
existing now or in the future)now or in the future located at, upon or about,or affixed or attached to
or installed in,the Real Property,or used or to be used in connection with or otherwise relating to the
Real Property or the ownership, use, development, construction, maintenance, management,
operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings,
machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks,
heating ventilating and air conditioning equipment and all other types of tangible personal property
of any kind or nature, and all accessories,additions, attachments,parts,proceeds,products,repairs,
replacements and substitutions of or to any of such property,but not including personal property that
is donated to Trustor(the "Goods," and together with the Real Property, the "Property"); and
(g) all accounts, general intangibles, chattel paper, deposit accounts,
money,instruments and documents(as those terms are defined in the UCC)and all other agreements,
obligations,rights and written material(in each case whether existing now or in the future)now or in
the future relating to or otherwise arising in connection with or derived from the Property or any
other part of the Trust Estate or the ownership, use, development, construction, maintenance,
management,operation,marketing,leasing,occupancy,sale or financing of the property or any other
part of the Trust Estate,including(to the extent applicable to the Property or any other portion of the
Trust Estate) (i)permits, approvals and other governmental authorizations, (ii) improvement plans
and specifications and architectural drawings, (iii) agreements with contractors, subcontractors,
suppliers,project managers,supervisors,designers,architects,engineers,sales agents,leasing agents,
consultants and property managers, (iv)takeout,refinancing and permanent loan commitments,(v)
warranties, guaranties, indemnities and insurance policies, together with insurance payments and
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unearned insurance premiums,(vi)claims,demands,awards,settlements,and other payments arising
or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or
damage to, trespass on or taking, condemnation(or conveyance in lieu of condemnation) or public
use of any of the Property, (vii) license agreements, service and maintenance agreements,purchase
and sale agreements and purchase options, together with advance payments, security deposits and
other amounts paid to or deposited with Trustor under any such agreements,(viii)reserves,deposits,
bonds,deferred payments,refunds,rebates,discounts,cost savings, escrow proceeds,sale proceeds
and other rights to the payment of money,trade names,trademarks, goodwill and all other types on
intangible personal property of any kind or nature, and (ix) all supplements, modifications,
amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such
property(the"Intangibles").
Trustor further grants to Trustee and Beneficiary,pursuant to the UCC,a security interest in
all present and future right,title and interest of Trustor in and to all Goods and Intangibles and all of
the Trust Estate described above in which a security interest may be created under the UCC
(collectively, the "Personal Property"). This Deed of Trust constitutes a security agreement under
the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee
and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and
remedies of a"secured party"under the UCC and other applicable California law. Trustor covenants
and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c)and 9604 of the
UCC.
FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect,
the following:
(1) due,prompt and complete observance,performance and discharge of each and every
condition, obligation, covenant and agreement contained herein or contained in the
following:
(a) a promissory note in the original principal amount of
payable from the residual receipts of the Project("Residual Receipts"), executed by
Trustor(`Borrower"therein)of approximately even date herewith(the"Inclusionary
Note");
(b) the Affordable Housing .Agreement dated as of January 5, 2021 (the
"Agreement"), between Trustor and the Beneficiary;
(c) the Amended and Restated Agreement Containing Covenants (Including
Rental Restrictions)between Trustor,the Huntington Beach Housing Authority,and
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Beneficiary recorded concurrently herewith ("Amended and Restated Covenants");
and
(2) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of
[$ or so much thereof as shall be advanced,evidenced by the Inclusionary Note,
with interest, according to the terms of the Inclusionary Note.
The Agreement,including all Attachments thereto,and the documents and instruments executed by
Trustor in connection with the Project, including the Amended and Restated Covenants, the
Inclusionary Note, the Assignment of Rents, the Assignment of Agreements, and the UCC 1
Financing Statement, all as described in the Agreement (collectively referred to as the "Secured
Obligations") and all of their terms are incorporated herein by reference and this conveyance shall
secure any and all extensions, amendments, modifications or renewals thereof however evidenced,
and additional advances evidenced by any note reciting that it is secured hereby. Any capitalized
term that is not otherwise defined in this Deed of Trust shall have the meaning ascribed to such term
in the Agreement.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor shall pay the Inclusionary Note at the time and in the manner provided
therein, and perform the obligations of the Developer as set forth in the Secured Obligations at the
time and in the manner respectively provided therein;
2. That Trustor shall not permit or suffer the use of any of the Property for any purpose
other than the uses permitted by the Amended and Restated Covenants;
3. That the Secured Obligations are incorporated in and made a part of this Deed of
Trust. Upon default of a Secured Obligation,and after the giving of notice and the expiration.of any
applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness
secured hereby to be due and payable.
4. That, subject to the prior rights, if any,of a lender whose lien is senior to this Deed of
Trust("Senior Lender"),all rents,profits and income from the Trust Estate are hereby assigned to the
Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to
Trustor so long as no default exists hereunder after the giving of notice and the expiration of any
applicable cure period, to collect such rents, profits and income for use in accordance with the
provisions of the Agreement.
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5. That upon default hereunder or under the aforementioned agreements, and after the
giving of notice and the expiration of any applicable cure period,Beneficiary shall be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to take possession and
protect the Trust Estate and operate same and collect the rents,profits and income therefrom;
6. That Trustor will keep the improvements hereafter constructed on the Subject
Property in accordance with the Agreement insured against loss by fire and such other hazards,
casualties, and contingencies as required by the Agreement and the Amended and Restated
Covenants, and all such insurance shall be evidenced by standard fire and extended coverage
insurance policy or policies. In no event shall the amounts of coverage be less than 100 percent of
the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause
with loss payable to the Beneficiary and certificates thereof together with copies of original policies
shall be deposited with the Beneficiary;
7. To pay, at least 10 days before delinquency, all taxes and assessments affecting the
Property;to pay,when due,all encumbrances,charges and liens,with interest,on the Property or any
part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of
this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall
not be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is
contesting the legality thereof in good faith and by appropriate proceedings,and Trustor has adequate
funds to pay any liabilities contested pursuant to this Section 7.
8. To keep the Property in good condition and repair, subject to ordinary wear and tear,
casualty and condemnation,not to remove or demolish any buildings thereon;to complete or restore
promptly and in good and workmanlike manner any building which may be constructed,damaged,or
destroyed thereon and to pay when due all claims for labor performed and materials furnished
therefor;to comply with all laws affecting the Property or requiring any alterations or improvements
to be made thereon (subject to Trustor's right to contest the validity or applicability of laws or
regulations);not to commit or permit waste thereof;not to commit, suffer or permit any act upon the
Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property;
not to permit or suffer any material alteration of or addition to the buildings or improvements
hereafter constructed in or upon the Property without the consent of the Beneficiary;
9. To appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee,and to pay all costs and expenses,including
cost of evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear;
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10. Should Trustor fail,after the giving of notice and the expiration of any applicable cure
period, to make any payment or do any act as herein provided, then Beneficiary or Trustee, but
without obligation so to do and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such manner and to such extent as
either may deem necessary to protect the security hereof. Following default, after the giving of
notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to
enter upon said property for such purposes, may commence, appear in and/or defend any action or
proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee;
may pay,purchase,contest,or compromise any encumbrance,charge,or lien which in the reasonable
judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may
pay necessary expenses,employ counsel,and pay his reasonable fees.Notwithstanding the foregoing,
in the event of default under this Deed of Trust,the Beneficiary may also require Trustor to maintain
and submit additional records. Beneficiary shall specify in writing the particular records that must be
maintained and the information or reports that must be submitted;
11. Beneficiary shall have the right to pay fire and other property insurance premiums
when due should Trustor fail to make any required premium payments after the giving of notice and
the expiration of any applicable cure period. All such payments made by the Beneficiary shall be
added to the principal sum secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or
Trustee,under permission given under this Deed of Trust,with interest from date of expenditure at
the rate specified in the Inclusionary Note;
13. That the funds to be advanced hereunder are to be used in accordance with the
Secured Obligations and upon the failure of Trustor, after the giving of notice and the expiration of
any applicable cure period,to keep and perform all the covenants,conditions,and agreements of said
agreements, the principal sum and all arrears of interest, and other charges provided for in the
Inclusionary Note shall at the option of the Beneficiary of this Deed of Trust become due and
payable, anything contained herein to the contrary notwithstanding;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be
created against the property subject to this Deed of Trust any lien or liens except as permitted by the
Secured Obligations or otherwise approved by Beneficiary in Beneficiary's reasonable discretion,
and further that it will keep and maintain the Property free from the claims of all persons supplying
labor or materials which will enter into the construction of any and all buildings now being erected
or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed
of Trust, Trustor shall not be obligated to pay any claims for labor, materials or services which
Trustor in good faith disputes and is diligently contesting, provided that Trustor shall, at
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Beneficiary's written request,within thirty(30)days after the filing of any claim or lien (but in any
event, and without any requirement that Beneficiary must first provide a written request, prior to
foreclosure)record in the Office of the Recorder of Orange County,a surety bond in an amount one-
and-one-half (1 1/2) times the amount of such claim item to protect against a claim of lien, or
provide such other security reasonably satisfactory to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered
by the Deed of Trust, and all plans and specifications, comply with all applicable municipal
ordinances and regulations and all other applicable regulations made or promulgated, now or
hereafter, by lawful authority, and that the same will upon completion comply with all such
municipal ordinances and regulations and with the rules of the applicable fire rating or inspection
organization, bureau, association or office;
16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing
representative of the Beneficiary a reasonable charge for providing a statement regarding the
obligation secured by this Deed of Trust as provided by Section 2954,Article 2,Chapter 2 Title 14,
Division 3, of the California Civil Code.
IT IS MUTUALLY AGREED THAT:
17. Should the Property or any part thereof be taken or damaged by reason of any public
improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other
manner, subject to the rights of the beneficiary of any other lien on the Property that is senior to the
lien of this Deed of Trust ("Senior Lender"), Beneficiary shall be entitled to all compensation,
awards, and other payments or relief therefor which are not used to reconstruct,restore or otherwise
improve the Property or part thereof that was taken or damaged,and shall be entitled at its option to
commence, appear in and prosecute in its own name, any action or proceedings, or to make any
compromise or settlement, in connection with such taking or damage. Subject to the rights of the
Senior Lenders,all such compensation,awards,damages,rights of action and proceeds which are not
used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or
damaged, including the proceeds of any policies of fire and other insurance affecting the Property,
are hereby assigned to Beneficiary. After deducting therefrom all its expenses,including attorney's
fees,the balance of the proceeds which are not used to reconstruct,restore or otherwise improve the
Property or part thereof that was taken or damaged, shall be applied to the amount due under the
Inclusionary Note secured hereby.No amount applied to the reduction of the principal shall relieve
the Trustor from making regular payments as required by the Inclusionary Note;
18. Upon default by Trustor in making any payments provided for in the Inclusionary
Note secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the
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Secured Obligations,and if such default is not cured within the respective time provided therefor in
Section 34 of this Deed of Trust, below, Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written declaration of default and demand for
sale, and of written notice of default and of election to cause the property to be sold, which notice
Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust.
Beneficiary shall also deposit with Trustee this Deed, the Note and all documents evidencing
expenditures secured hereby;
19. a. Prior to the repayment in full of the Inclusionary Loan,the Trustor shall not
assign or attempt to assign the Agreement or any right therein, nor make any total or partial sale,
transfer, conveyance or assignment of the whole or any part of the Property,the Project thereon, or
any portion thereof or interest therein(referred to hereinafter as a"Transfer"),without prior written
approval of the Beneficiary,except as otherwise permitted in the Inclusionary Note. Consent to one
such transaction shall not be deemed to be a waiver of the right to require consent to future or
successive transactions. Beneficiary shall not unreasonably withhold or delay its consent. If consent
is given,any such transfer shall be subject to this Section 19,and any such transferee shall assume all
obligations hereunder and agree to be bound by all provisions contained herein, subject to the
provisions of paragraph e(3) of this Section 19.
b. In connection with any assignment that requires Beneficiary consent,any such
proposed transferee shall have the qualifications and financial responsibility necessary and adequate
as may be reasonably determined by the Beneficiary,to fulfill the obligations undertaken by Trustor
in the Agreement and the Inclusionary Loan Documents. Any such proposed transferee, by
instrument in writing satisfactory to the Beneficiary and in form recordable among the land records
of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary
shall expressly assume all of the obligations of the Trustor under the Agreement and the Inclusionary
Loan Documents, and agree to be subject to all conditions and restrictions applicable to the Trustor
in this Deed of Trust, subject to the provisions of paragraph e(3) of this Section 19. There shall be
submitted to the Beneficiary for review all instruments and other legal documents proposed to effect
any such transfer; and if approved by the Beneficiary, which approval shall not be unreasonably
withheld, conditioned, or delayed, its approval shall be indicated to the Trustor in writing.
C. In the absence of specific written agreement by the Beneficiary, which
agreement will not be unreasonably withheld, no Transfer, or approval thereof by the Beneficiary,
shall be deemed to relieve the Trustor or any other party from any obligations under the Agreement
or any other Inclusionary Loan Document.
d. In the event of a Transfer prior to the time the Inclusionary Loan is paid in full
and without the prior written consent of the Beneficiary (if such consent is required), the net
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proceeds (after repayment in full of the loan from the proceeds of the Permanent Loan and the
reconveyance of the Permanent Deed of Trust), shall be paid to the Beneficiary to the extent
necessary to pay in full the accrued interest,if any, current interest and remaining principal balance
of the Inclusionary Loan.
e. (1) As used herein,"Transfer"includes the sale,agreement to sell,transfer
or conveyance of the Property, the Project, or any portion thereof or interest therein, whether
voluntary,involuntary,by operation of law or otherwise,the execution of any installment land sale
contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all
or substantially all of the Property or Project,except as provided in subparagraph e(3)of this Section
19, below.
(2) "Transfer"shall also include the transfer,assignment,hypothecation or
conveyance of legal or beneficial ownership of any interest in Trustor,or any conversion of Trustor
to an entity form other than that of Trustor at the time of execution of the Agreement, except that a
cumulative change in ownership interest of any general partner of forty-nine percent (49%) or less
shall not be deemed a "Transfer" for purposes of this Deed of Trust.
(3) Notwithstanding paragraphs (1) and (2), above, "Transfer" shall not
include any of the following Permitted Transfers:
(a) a conveyance of a security interest to the beneficiary of a deed of
trust securing a loan approved by the City to be prior in right to the Inclusionary Loan, or the
conveyance of title to the Property or Project in connection with a foreclosure, a deed in lieu of
foreclosure or similar conversion of such loan;
(b)(i) Subject to subparagraph (b)(ii), below, a conveyance of the
Property or Project to a limited partnership in which the managing general partner is Trustor or
Trustor's General Partner,or a sale back from such partnership to Trustor or such General Partner,or
the substitution of such General Partner as directed by the Investor Limited Partner in accordance
with the terms of the Limited Partnership Agreement.
(ii) Notwithstanding any provision to the contrary contained herein,
any event described in subparagraph(b)(i) shall not be deemed to be a Permitted Transfer unless
Beneficiary reasonably determines, which determination shall not be unreasonably withheld, that
Trustor's General Partner remains, or another entity reasonably acceptable to Beneficiary (which
shall not be unreasonably withheld) becomes, the controlling and managing general partner of
Trustor.
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(c) The leasing for occupancy of all or any part of the Property or
Project in accordance with the Agreement and the Amended and Restated Covenants.
(d) The inclusion of equity participation by Trustor by transfer or
addition of limited partners to Trustor or similar mechanism.
(e)The pledge by a General Partner to the Investor Limited Partner of
the General Partner's interest in Trustor, as security for the performance of all of the General
Partner's obligations under the Limited Partnership Agreement.
(f) The sale, transfer or pledge of a limited partnership interest in
Trustor or of a partnership interest in the Investor Limited Partner.
(g) The appointment by the Investor Limited Partner, in accordance
with the Limited Partnership Agreement, of an additional or substitute General Partner that is an
Affiliate of the Investor Limited Partner or, if not an Affiliate of the Investor Limited Partner, is
reasonably acceptable to Beneficiary.
(h) The withdrawal,removal and/or replacement of a general partner
of Trustor pursuant to the terms of Trustor's Limited Partnership Agreement, provided that any
required substitute general partner is reasonably acceptable to Beneficiary, as evidenced by the
Beneficiary's written consent, and is selected with reasonable promptness (except that no such
consent shall be required if the substitute general partner is an Affiliate of the Investor Limited
Partner).
(i) A transfer of a general partner's interest to the limited partner
pursuant to the option provided to it in connection with Trustor's Limited Partnership Agreement,or
a conveyance to a general partner of Trustor of Trustor's interest in the Property and the
improvements or a transfer of limited partnership interests to a general partner of Trustor pursuant to
the option provided to that general partner in Trustor's Limited Partnership Agreement.
0)The transfer of all or any part of the Project or Property to Jamboree
Housing Corporation, or an entity directly controlled by Jamboree Housing Corporation,or an entity
in which Jamboree Housing Corporation is the general partner or managing member.
(k) Any dilution of a General Partner's interest in Trustor in
accordance with the Limited Partnership Agreement.
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f. Beneficiary shall not unreasonably withhold, condition or delay its approval of any
matter for which its approval is required hereunder.Any disapproval shall be in writing and contain
Beneficiary's reasons for disapproval.
20. After the lapse of such time as may then be required by law following the recordation
of a notice of default,and notice of sale having been given as then required by law,Trustee,without
demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale,either
as a whole or in separate parcels, and in such order as it may determine at public auction to the
highest bidder for cash in lawful money of the United States,payable at time of sale. Trustee may
postpone sale of all or any portion of the Property by public announcement at the time and place of
sale,and from time to time thereafter may postpone the sale by public announcement at the time and
place of sale, and from time to time thereafter may postpone the sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying
the property so sold, but without any covenant or warranty, express or implied. The recitals in the
deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person,
including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the
proceeds of sale to payment of(1)the expenses of such sale,together with the reasonable expenses
of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale,and
the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any
search and/or other evidence of title procured in connection with such sale and revenue stamps on
Trustee's deed; (3)all sums expended under the terms hereof,not then repaid,with accrued interest
at the rate specified in the Inclusionary Note; (4) all other sums then secured hereby; and (5) the
remainder, if any, to the person or persons legally entitled thereto;
21. Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by Beneficiary,containing reference to this
Deed of Trust and its place of record,which,when duly recorded in the proper office of the county or
counties in which the property is situated, shall be conclusive proof of proper appointment of the
successor trustee;
22. The pleading of any statute of limitations as a defense to any and all obligations
secured by this Deed of Trust is hereby waived to the full extent pennissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have been
paid and all obligations secured hereby have been satisfied,and upon surrender of this Deed of Trust
and the Inclusionary Note to Trustee for cancellation and retention and upon payment of its fees,
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Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in such
reconveyance of any matters or fact shall be conclusive proof of the truthfulness thereof. The grantee
in such reconveyance may be described as "the person or persons legally entitled thereto";
24. The trust created hereby is irrevocable by Trustor;
25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,
their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term
"Beneficiary"shall include not only the original Beneficiary hereunder but also any future owner and
holder including pledgees,of the Inclusionary Note secured hereby. In this Deed of Trust,whenever
the context so requires, the masculine gender includes the feminine and/or neuter, and the singular
number includes the plural. All obligations of Trustor hereunder are joint and several;
26. Trustee accepts this Trust when this Deed of Trust,duly executed and acknowledged,
is made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to
any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall
succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law;
27. The undersigned Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this Deed of
Trust. After Trustor gives written notice to Beneficiary that the Investor Limited Partner has been
admitted to the Trustor,Beneficiary shall send to the Investor Limited Partner a copy of all notices of
default and all other notices that Beneficiary sends to Trustor,at the address for the Investor Limited
Partner as provided by written notice to Beneficiary by Trustor.
28. Trustor agrees at any time and from time to time upon receipt of a written request
from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents,profits,
and operating expenses of the premises, and the names of the occupants and tenants in possession,
together with the expiration dates of their leases and full information regarding all rental and
occupancy agreements, and the rents provided for by such leases and rental and occupancy
agreements,and such other information regarding the premises and their use as may be requested by
Beneficiary.
29. Trustor agrees that the loan secured by this Deed of Trust is made expressly for the
purpose of financing the construction of improvements on the Property,including 42 dwelling units
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of affordable housing for extremely low, very low, and low income households, and such dwelling
units shall be occupied exclusively by such persons as set forth in the Secured Obligations.
30. Trustor agrees that,except as otherwise provided in the Inclusionary Note,upon sale
or refinancing of the property,the entire principal balance of the debt secured by this Deed of Trust,
plus any accrued but unpaid interest thereon, shall at the option of Beneficiary be immediately due
and payable.
31. The obligation to repay the Inclusionary Loan is a nonrecourse obligation of the
Trustor and its partners. Neither Trustor nor any of its general or limited partners, nor any other
party, shall have any personal liability for repayment of the loan. The sole recourse of Beneficiary
shall be the exercise of its rights against the Property and any related security for the Inclusionary
Loan. Notwithstanding the foregoing, Beneficiary may recover directly from Trustor or from any
other party:
(a) all damages, costs and expenses incurred by Beneficiary as a result of fraud or any
criminal act or acts of Trustor or any partner, shareholder, officer, director or employee of
Trustor, or of any general partner of Trustor, or of any member of a general partner of
Trustor;
(b) all damages, costs and expenses incurred by Beneficiary as a result of
misappropriation of funds provided for the construction of the Project, as described in the
Agreement, rents and revenues from the operation of the Project, or proceeds of insurance
policies or condemnation proceeds;
(c) any and all amounts owing by Trustor pursuant to the indemnification regarding
Hazardous Substances pursuant to the Environmental indemnity; and
(d) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon
any of the foregoing exceptions (provided that Beneficiary shall pay Trustor's reasonable
court costs and attorneys' fees if Trustor is the prevailing party in such enforcement or
collection action).
32. Notwithstanding specific provisions of this Deed of Trust,non-monetary performance
hereunder shall not be deemed to be in default where delays or defaults are proximately caused by
any of the following Force Majeure events,provided such event actually delays and interferes with
the timely performance of the matter, and, despite the exercise of diligence and good business
practices, such event is beyond the reasonable control of Trustor: War; insurrection; strikes; lock-
outs;riots; floods;earthquakes;fires;casualties;acts of God;acts of the public enemy;epidemics or
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pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation including litigation challenging the validity of this transaction or
any element thereof;unusually severe weather; inability to secure necessary labor,materials or tools;
delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of
any Governmental Authority(except acts or failure to act of the Beneficiary in its capacity as lender
shall not excuse performance by the Beneficiary);the imposition of any applicable moratorium by a
Governmental Authority; or any other causes which despite the exercise of diligence and good
business practices are or would be beyond the reasonable control of the parry claiming such delay
and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a
Force Majeure Event unless and until Trustor delivers to Beneficiary written notice describing the
event, its cause,when and how Trustor obtained knowledge,the date the event commenced,and the
estimated delay resulting therefrom. Trustor shall deliver such written notice within thirty(30)days
after it obtains actual knowledge of the event.
33. If the rights and liens created by this Deed of Trust shall be held by a court of
competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations,the
unsecured portion of such obligations shall be completely perfonned and paid prior to the
performance and payment of the remaining and secured portion of the obligations, and all
performance and payments made by Trustor shall be considered to have been performed and paid on
and applied first to the complete payment of the unsecured portion of the obligations.
34. (a) Subject to the extensions of time set forth in Section 32, and subject to the
further provisions of this Section 34, failure or delay by Trustor to perform any term or provision
respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes
a default under this Deed of Trust.
(b) Beneficiary shall give written notice of default to Trustor, specifying the
default complained of by the Beneficiary. Failure or delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default.
(c) Any failures or delays by Beneficiary in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive
Beneficiary of its right to institute and maintain any actions or proceedings which it may deem
necessary to protect, assert, or enforce any such rights or remedies.
(d) If a monetary event of default occurs, prior to exercising any remedies
hereunder,Beneficiary shall give Trustor written notice of such default. Trustor shall have a period
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of twenty (20) days after such notice is given within which to cure the default prior to exercise of
remedies by Beneficiary.
(e) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder,Beneficiary shall give Trustor notice of such default. If the default is reasonably capable
of being cured within thirty(30)days,Trustor shall have such period to effect a cure prior to exercise
of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured
within thirty (30) days, and Trustor (i) initiates corrective action within said period, and (ii)
diligently,continually,and in good faith works to effect a cure as soon as possible,then Trustor shall
have such additional time as is reasonably necessary to cure the default prior to exercise of any
remedies by Beneficiary. If Trustor fails to take corrective action or cure the default within a
reasonable time,Beneficiary shall give Trustor and,as provided in paragraph(f),below,the Investor
Limited Partner notice thereof,whereupon the Investor Limited Partner may remove and replace the
general partner with a substitute general partner, who shall effect a cure within a reasonable time
thereafter in accordance with the foregoing provisions. Beneficiary agrees to accept cures tendered
by the Investor Limited Partner within the cure periods provided in this Deed of Trust or within the
time periods provided in Civil Code Section 2924c, whichever is longer. Additionally,in the event
the Investor Limited Partner is precluded from curing a non-monetary default due to an inability to
remove the general partner as a result of a bankruptcy,injunction,or similar proceeding by or against
Trustor or its general partner,Beneficiary agrees to forbear from completing a foreclosure(judicial or
nonjudicial)during the period during which the Investor Limited Partner is so precluded from acting,
not to exceed 90 days,provided such limited partner is otherwise in compliance with the foregoing
provisions. In no event shall Beneficiary be precluded from exercising remedies if its security
becomes or is about to become materially jeopardized by any failure to cure a default or the default is
not cured within one hundred eighty(180) days after the first notice of default is given.
(f) After Trustor gives written notice to Beneficiary that the Investor Limited
Partner has been admitted to the Trustor, Beneficiary shall send to the Investor Limited Partner a
copy of all notices of default and all other notices that Beneficiary sends to Trustor,at the address for
the limited partner as provided by written notice to Beneficiary by Trustor.
(g) Except as otherwise required to comply with the provisions of California Civil
Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by
electronic facsimile transmission followed by delivery of a"hard"copy, shall be deemed delivered
upon its transmission; any notice of default that is personally delivered (including by means of
professional messenger service,courier service such as United Parcel Service or Federal Express,or
by U.S.Postal Service),shall be deemed received on the documented date of receipt by Trustor;and
any notice of default that is sent by registered or certified mail, postage prepaid, return receipt
required shall be deemed received on the date of receipt thereof.
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35. This Deed of Trust shall be subordinate and junior to each deed of trust securing a
Senior Loan("Senior Deed of Trust")The term"Senior Loan" shall have the meaning given to it in
the Inclusionary Note. Following the reconveyance of a Senior Deed of Trust, this Deed of Trust
will be subordinate and junior to the deed of trust in favor of the maker of the permanent or take-out
loan replacing such Senior Loan(each of which permanent or take-out loans is referred to herein as a
"Senior Loan"). Beneficiary shall execute such instruments as may be necessary to subordinate the
lien of this Deed of Trust,to the deed of trust securing a Senior Loan and any regulatory agreement
recorded in connection with the Four Percent Tax Credit (as defined in Section 36 below). In the
event of a default or breach by Trustor of a security instrument securing a Senior Loan described in
this Section 35, Beneficiary shall have the right to cure the default prior to completion of any
foreclosure. In such event,Beneficiary shall be entitled to reimbursement by Trustor of all costs and
expenses incurred by Beneficiary in curing the default. The amount of all such disbursements shall
be a lien against the Property and added to the obligation secured by this Deed of Trust until repaid,
with interest at the highest rate permitted by law.
36. Trustor has informed Beneficiary that Trustor intends that the Project qualify for an allocation
of low-income housing tax credits under Section 42 of the Internal Revenue Code ("Four Percent
Tax Credit"). Beneficiary acknowledges that Trustor and the Tax Credit Allocation Committee have
or intend to enter into an Extended Use Agreement. Beneficiary acknowledges and agrees that, in
the event of a foreclosure of its interest under this Deed of Trust or delivery by Trustor of a deed in
lieu thereof(collectively,a"Foreclosure"),the following rule contained in Section 42(h)(6)(E)(ii)of
the Code shall apply:
For a period of three (3)years from the date of Foreclosure,with respect to any unit
that had been regulated by the Extended Use Agreement, (i) none of the eligible tenants
occupying those units at the time of Foreclosure may be evicted or their tenancy terminated
(other than for good cause), (ii)nor may any rent be increased except as otherwise permitted
under Section 42 of the Code.
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IN WITNESS WHEREOF,Trustor has executed this Deed of Trust as of the day and year set
forth above.
"TRUSTOR"
BEACH HOUSING PARTNERS LP
a California limited partnership
By: JHC-Beach LLC, a California limited liability company
Its: Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation
Its: Manager
By:
Michael Massie
Chief Development Officer
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 11 —INCLUSIONARY DEED OF TRUST
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Exhibit A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON
BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA,AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF PARCEL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN:159-031-18
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 11 —INCLUSIONARY DEED OF TRUST
Exhibit A—Legal Description
452
ATTACHMENT NO. 12
ASSIGNMENT OF AGREEMENTS
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 12—ASSIGNMENT OF AGREEMENTS
453
ASSIGNMENT OF AGREEMENTS
FOR VALUE RECEIVED, the undersigned, BEACH HOUSING PARTNERS LP, a
California limited partnership ("Borrower"), assigns to THE CITY OF HUNTINGTON BEACH,
a municipal corporation of the State of California ("City"), all of its right, title and interest in and
to:
1. All architectural, design, engineering and development agreements, and any and all
amendments, modifications, supplements, addenda and general conditions thereto
(collectively, "Architectural Agreements"); and
2. All plans and specifications, shop drawings, working drawings, amendments,
modifications, changes, supplements, general conditions and addenda thereto (collectively
"Plans and Specifications")
heretofore or hereafter into or prepared by any architect, engineer or other person or entity
(collectively "Architect"), for or on behalf of Borrower in connection with the development and
construction of the Project. The Plans and Specifications, as of the date hereof, are those which
Borrower has heretofore, or will hereafter deliver to City.
This ASSIGNMENT OF AGREEMENTS AND PLANS AND SPECIFICATION
("Assignment") constitutes a present and absolute assignment to City as of the date of this
Assignment; provided, however, City confers upon Borrower the right to enforce the terms of the
Architectural Agreements and Borrower's rights to the Plans and Specifications so long as no
default has occurred and is continuing under that certain Affordable Housing Agreement dated as
of January 5, 2021, between City, Borrower, and the Huntington Beach Housing Authority
("Authority") (the "Affordable Housing Agreement"), as well as any future amendments and
implementation agreements between City,Borrower and Authority which refer to this Assignment.
Capitalized terms not otherwise defined herein shall have the meaning set forth in the Affordable
Housing Agreement. Upon the occurrence of a default under the Affordable Housing Agreement,
following written notice thereof and the expiration of the applicable cure period, City may, in its
sole discretion, give notice to Architect of its intent to enforce the rights of Borrower under the
Architectural Agreements and of its rights to the Plans and Specifications and may initiate or
participate in any legal proceedings respecting the enforcement of said rights. Borrower
acknowledges that by accepting this Assignment, City does not assume any of Borrower's
obligations under the Architectural Agreements or with respect to the Plans and Specifications.
Borrower represents and warrants to City that: (a) any Architectural Agreements entered
into by Borrower are in full force and effect and are enforceable in accordance with their terms
and no default, or event which would constitute a default after notice or the passage of time, or
both, exists with respect to said Architectural Agreements; (b) any copies of the Architectural
Agreements and Plans and Specifications delivered to City are complete and correct; and (c)
Borrower has not assigned any of its rights under the Architectural Agreements or with respect to
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ATTACHMENT NO. 12 —ASSIGNMENT OF AGREEMENTS
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the Plans and Specifications except to the City and each Senior Lender under the Affordable
Housing Agreement.
Borrower agrees: (a)to pay and perform all obligations of Borrower under the Architectural
Agreements; (b) to enforce the payment and performance of all obligations of any other person or
entity under the Architectural Agreements; (c)not to modify the existing Architectural Agreements
nor to enter into any future Architectural Agreements without City's prior written approval except
as otherwise may be permitted in the Affordable Housing Agreement; and(d)not to further assign
(other than assignment in connection with any additional loans from the City), for security or any
other purposes, its rights under the Architectural Agreements or with respect to the Plans and
Specifications without City's prior written consent.
This Assignment secures performance by Borrower of all obligations of Borrower under
the Affordable Housing Agreement. This Assignment is supplemented by the provisions of the
Affordable Housing Agreement and said provisions are incorporated herein by reference.
This Assignment shall be governed by the laws of the State of California, except to the
extent that Federal laws preempt the laws of the State of California, and Borrower consents to the
jurisdiction of any Federal Court in the Central District of California, or State Court within the
County of Orange having proper venue for the filing and maintenance of any action arising
hereunder and agrees that the prevailing party in any such action shall be entitled, in addition to
any other recovery, to reasonable attorney's fees and costs.
This Assignment shall be binding upon and inure to the benefit of the heirs, legal
representatives, assigns, and successors-in-interest of Borrower and City; provided, however, this
shall not be construed and is not intended to waive any restrictions on assignment, sale, transfer,
mortgage, pledge, hypothecation or encumbrance by Borrower contained in the Affordable
Housing Agreement.
The attached Architect's Consent, Schedule 1 and Exhibit A are incorporated by reference.
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AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 12 —ASSIGNMENT OF AGREEMENTS
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Executed as of 202_.
"BORROWER"
BEACH HOUSING PARTNERS LP
a California limited partnership
By: JHC-Beach LLC, a California limited liability
company
Its: Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit
corporation
Its: Manager
By
Name: Michael Massie
Title: Chief Development Officer
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 12—ASSIGNMENT OF AGREEMENTS
Page 3
456
ARCHITECT'S CONSENT
The undersigned architect ("Architect") hereby consents to the foregoing Assignment to
which this Architect's Consent ("Consent") is part, and acknowledges that there presently exists
no unpaid claims due to the Architect except as set forth on Schedule l attached hereto, arising out
of the preparation and delivery of the Plans and Specifications to Borrower and/or the performance
of the Architect's obligations under the Assignment.
Architect agrees that if, at any time, City shall become the owner of said Property, or,
pursuant to its rights under the Affordable Housing Agreement, elects to undertake or cause the
completion of construction of the Project on any portion of the Property, in accordance with the
Plans and Specifications, and gives Architect written notice of such election; THEN, so long as
Architect has received, receives or continues to receive the compensation called for under the
Architectural Agreements, City may, at its option, use and rely on the Plans and Specifications for
the purposes for which they were prepared, and Architect will continue to perform its obligations
under the Architectural Agreements for the benefit and account of City in the same manner as if
perforined for the benefit or account of Borrower in the absence of the Assignment.
Architect further agrees that, in the event of a breach by Borrower of the Architectural
Agreements, or any agreement entered into with Architect in connection with the Plans and
Specifications, so long as Borrower's interest in the Architectural Agreements and Plans and
Specifications is assigned to City, Architect will give written notice to City of such breach at the
address shown below. City shall have thirty (30) days from the receipt of such written notice of
default to remedy or cure said default. Nothing herein shall require City to cure said default or to
undertake completion of construction of the Project.
Architect warrants and represents that it/he/she has no knowledge of any prior
assignment(s) of any interest in the Plans and Specifications and/or the Architectural Agreements,
except to City and each Senior Lender under the Affordable Housing Agreement. Except as
otherwise defined herein, the terms used herein shall have the meanings given them in the
Assignment.
Executed as of , 20
By:
Name:
Title:
City's Address:
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
457
SCHEDULE OF UNPAID CLAIMS
Schedule 1 to Assignment of Architectural Agreements and Plans and Specifications dated as
of , 20 between BEACH HOUSING PARTNERS LP, a California limited
partnership, as Borrower, and CITY OF HUNTINGTON, as City.
458
EXHIBIT A
PROPERTY DESCRIPTION
REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 159-031-18
459
ATTACHMENT NO. 13
ENVIRONMENTAL INDEMNITY
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
460
ENVIRONMENTAL INDEMNITY
THIS ENVIRONMENTAL INDEMNITY (this "Indemnity"), dated as of ,
202_ is made by BEACH HOUSING PARTNERS LP, a California limited partnership (referred
to as "Borrower"), in favor of the CITY OF HUNTINGTON BEACH, a municipal corporation of
the State of California ("City").
W ITNES SETH
WHEREAS, Borrower is the owner of real property in the City of Huntington Beach, as
more particularly described on Exhibit A attached hereto and made a part hereof, and the real
property improvements thereon (collectively referred to as the "Property");
WHEREAS, Borrower, City, and the Huntington Beach Housing Authority entered into
that certain Affordable Housing Agreement, dated as of January 5, 2021 (the"Affordable Housing
Agreement"), pursuant to which the City agreed to make a loan of HOME Funds and a loan of
Affordable Housing Trust Funds (collectively, the "Loans") to Borrower for the purpose of
providing financing for the payment of development costs, including property acquisition, for
affordable housing purposes (the Affordable Housing Agreement and the documents and
instruments referred to therein which are being executed by Borrower concurrently herewith are
referred to collectively as the "Loan Documents");
WHEREAS, Borrower has agreed to execute and deliver to the City this Indemnity to
induce the City to make the Loans.
NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual
agreements hereinafter set forth, Borrower hereby agrees with the City as follows:
Section 1. DEFINITIONS
For the purpose of this Indemnity, "Hazardous Materials"or"Hazardous Substances"shall
include,but not be limited to,substances defined as"extremely hazardous substances,""hazardous
substances," "hazardous materials," "hazardous waste" or "toxic substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Sections 11001-11050; the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; and
those substances defined as "hazardous waste" in Section 25117 of the California Health and
Safety Code, as "infectious waste" in Section 25117.5 of the California Health and Safety Code,
or as "hazardous substances" in Section 25316 of the California Health and Safety Code or
"hazardous materials" as defined in Section 353 of the California Vehicle Code; and in the
regulations adopted and publications promulgated pursuant to said laws. Other capitalized terms
used in this Indemnity shall have the meanings ascribed to them in the Affordable Housing
Agreement with the same force and effect as if set forth in full below.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
Page 1
461
Section 2. COVENANTS AND INDEMNITY
The following covenants and indemnities are hereby given and made by Borrower:
2.1 Covenants.
(a) Borrower covenants that it shall comply with any and all applicable laws,
regulations, and/or orders which may be promulgated, from time to time, with respect to the
discharge and/or removal of Hazardous Materials, to pay immediately when due the costs of the
removal of, or any other action required by law with respect to, any such Hazardous Materials, and
to keep the Property free of any lien unposed pursuant to any such laws, regulations, or orders.
(b) Borrower covenants that the Property will not, while Borrower is the owner
thereof, be used for any activities involving, directly or indirectly, the use, generation, treatment,
storage, release, or disposal of any Hazardous Materials, except for de minimis quantities used at
the Property in compliance with all applicable environmental laws and required in connection with
the routine construction, operation and maintenance of the Property.
(c) Borrower further agrees that Borrower shall not release or dispose of any
Hazardous Materials at the Property, except for de minimis quantities used at the Property in
compliance with all applicable environmental laws and commonly used in connection with the
routine construction, operation and maintenance of the Property, without the express written
approval of the City and that any such release or disposal shall be effected in strict compliance
with all applicable laws, and all conditions, if any, established by the City.
(d) The City shall have the right, at any time, to conduct an environmental audit of
the Property at the City's expense, unless Hazardous Materials are found, then at Borrower's sole
cost and expense, and Borrower shall cooperate in the conduct of any such environmental audit
but in no event shall such audit be conducted unless the City reasonably believes that such audit is
warranted. Other than in an emergency, such audit shall be conducted only after prior written
notice has been given to Borrower and only in the presence of a representative of Borrower.
Borrower shall give the City and its agents and employees access to the Property to remove, or
otherwise to mitigate against the effects of,Hazardous Materials, with any and all of such activities
to be conducted in accordance with all applicable laws.
(e) Borrower shall not install, or permit to be installed, on the Property friable
asbestos or any substance containing asbestos and deemed hazardous by applicable federal or state
regulations respecting such material, and, with respect to any such material currently present in
the Property, Borrower shall promptly either (i)remove or cause to be removed any material that
such applicable regulations deem hazardous and require to be removed, or (ii) otherwise comply
with such applicable federal and state regulations,at Borrower's sole cost and expense. If Borrower
shall fail to so do within the cure period permitted under applicable law, regulation, or order, the
City may do whatever is necessary to eliminate said substances from the premises or to otherwise
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
Page 2
462
comply with the applicable law, regulation, or order, and the costs thereof shall be added to the
Obligations (as hereinafter defined) of Borrower under this Section 2.
(f) Borrower must promptly advise the City in writing of any of the following,
upon Borrower's knowledge of the same: (i) any pending or threatened environmental claim
against Borrower or the Property, (ii) any condition or occurrence on the Property that (A) results
in noncompliance by Borrower with any applicable environmental law, (B) could reasonably be
anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use
or transferability of the Property under any environmental law, or (C) could reasonably be
anticipated to form the basis of an environmental claim against the Property or Borrower.
2.2 Indemnity. Borrower shall indemnify, protect, and hold the City and its officials,
officers, employees and agents harmless from and against any and all damages, losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses,judgments, suits, proceedings, costs,
disbursements, or expenses (including, without limitation, attorneys' and experts' fees and
disbursements) of any kind or of any nature whatsoever(collectively, the Obligations) which may
at any time be imposed upon, incurred by or asserted or awarded against the City and arising from
or out o£
(a) The presence of any Hazardous Materials on, in, under, or affecting all or
any portion of the Property or any surrounding areas;
(b) The material breach of any covenant made by Borrower in Section 2.1
hereof; or
(c) The enforcement by the City of any of the provisions of this Section 2.2 or
the assertion by Borrower of any defense to its obligations hereunder.
Subject to the qualifications set forth in Section 2.3, below, Borrower shall be liable for payment
and perfonnance of the Obligations to the full extent (but only to the extent) of the property and
assets (including the Property) which constitute security for such Obligations. If default occurs in
the timely and proper payment and performance of any such Obligations (after notice and
reasonable opportunity to cure), any judicial proceedings brought by the City against Borrower
shall be limited to the protection and preservation of the Property, the preservation, enforcement
and foreclosure of the liens, mortgages, assignments, rights and security interests securing such
Obligations and enforcement and collection of such Obligations for which Borrower remains
directly liable as provided in this Section. If there is a foreclosure of any such liens, mortgages,
assignments,rights and security interests by power of sale or otherwise, no personal judgment for
any deficiency thereon shall be sought or obtained by the City against Borrower, or its officers,
directors, agents, attorneys, servants or employees.
2.3 Exceptions to Non-Recourse Liability. Notwithstanding the foregoing provisions
of Section 2.2 or any other agreements,
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
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463
(a) the City may proceed against any other person or entity whatsoever with
respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement
agreements or similar rights to payment or performance; and
(b) The City may recover personally from any person or entity other than
Borrower's Managing General Partner and Limited Partners:
(1) any damages, costs and expenses incurred by the City as a result of the
negligence of such person or entity,involving, directly or indirectly,the use,generation,treatment,
storage, release, or disposal of any Hazardous Materials by such person or entity or by others;
provided, however, that neither Borrower nor any officer, partner, agent, attorney, servant or
employee of Borrower shall have any personal liability if the act or omission complained of was
performed in good faith and was not reckless, wanton, intentional or grossly negligent;
(2) any damages, costs and expenses incurred by the City as a result of
fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or
employee of Borrower, or of any general or limited partner of Borrower; and
(3) all court costs and attorneys' fees reasonably incurred in enforcing
or collecting upon any of the foregoing exceptions (provided that the City shall pay Borrower's
reasonable court costs and attorneys' fees if Borrower is the prevailing party in any such
enforcement or collection action).
Section 3. BORROWER'S UNCONDITIONAL OBLIGATIONS
3.1 Unconditional Obligations. Borrower hereby agrees that the Obligations will be
paid and performed strictly in accordance with the terms of this Indemnity, regardless of any law,
regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Loan
Documents or affecting any of the rights of the City with respect thereto. The obligations of
Borrower hereunder shall be absolute and unconditional irrespective of:
(a) The validity, regularity, or enforceability of the Loan Documents or any
other instrument or document executed or delivered in connection therewith;
(b) Any alteration, amendment, modification, release, termination, or
cancellation of any of the Loan Documents, or any change in the time, manner, or
place of payment of, or in any other term in respect of, all or any of the obligations
of Borrower contained in any of the Loan Documents;
(c) Any extension of the maturity of the Loans or any waiver of, or consent to
any departure from, any provision contained in any of the Loan Documents;
(d) Any exculpatory provision in any of the Loan Documents limiting the
City's recourse to property encumbered by the Deed of Trust securing the Loans,
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
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or to any other security, or limiting the City's rights to a deficiency judgment
against Borrower;
(e) Any exchange, addition, subordination, or release of, or nonperfection of
any lien on or security interest in, any collateral for the Loans, or any release,
amendment,waiver of, or consent to any departure from any provision of, any other
Borrower or guarantee given in respect of the :Loans;
(f) The insolvency or bankruptcy of Borrower, Borrower, or of any indemnitor
or guarantor under any other indemnity or guarantee given in respect of the Loans;
or
(g) Any other circumstance that might otherwise constitute a defense available
to, or a discharge of, Borrower, Borrower, or any other indemnitor or guarantor
with respect to the Loans or any or all of the Obligations.
3.2 Continuation. This Indemnity(a) is a continuing indemnity and shall remain in full
force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment
in full of the Loans or the release or other extinguishment of any security for the Loans); and (b)
shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment
of any of the Obligations is rescinded or must otherwise be returned by the City upon the
insolvency, bankruptcy, or reorganization of Borrower, Borrower or otherwise, all as though such
payment had not been made.
3.3 Termination. Notwithstanding the payment (and performance) in full of all of the
Obligations and the payment (or performance) in full of all of Borrower's obligations under the
Loan Documents, this Indemnity shall not terminate if any of the following shall have occurred:
(a) The City has at any time or in any manner participated in the management
or control of, taken possession of(whether personally, by agent or by appointment
of a receiver), or taken title to the Property or any portion thereof, whether by
foreclosure, deed in lieu of foreclosure, sale under power of sale or otherwise; or
(b) There has been a change, between the date hereof and the date on which all
of the Obligations are paid and performed in full, in any Hazardous Materials laws,
the effect of which may be to make a lender or mortgagee liable in respect of any
of the Obligations, notwithstanding the fact that no event, circumstance, or
condition of the nature described in paragraph (a) above ever occurred.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
Page 5
465
Section 4. WAIVER
Borrower hereby waives the following:
(a) Promptness and diligence;
(b) Notice of acceptance and notice of the incurrence of any obligation by
Borrower;
(c) Notice of any action taken by the City, Borrower, or any other interested
party under any Loan Document or under any other agreement or instrument relating thereto;
(d) All other notices, demands, and protests, and all other formalities of every
kind, in connection with the enforcement of the Obligations, the omission of or delay in which,
but for the provisions of this Section 4, might constitute grounds for relieving Borrower of its
Obligations hereunder;
(e) The right to a trial by jury with respect to any dispute arising under, or
relating to, this Indemnity;
(f) Any requirement that the City protect, secure,perfect, or insure any security
interest or lien in or on any property subject thereto;
(g) Any requirement that the City exhaust any right or take any action against
Borrower or any other person or collateral; and
(h) Any defense that may arise by reason of:
(1) The incapacity, lack of authority, death or disability of, or
revocation hereof by, any person or persons;
(2) The failure of the City to file or enforce any claim against the estate
(in probate, bankruptcy, or any other proceedings) of any person or persons; or
(3) Any defense based upon an election of remedies by the City,
including, without limitation, an election to proceed by nonjudicial foreclosure or which destroys
or otherwise impairs the subrogation rights of the City or any other right of the City to proceed
against Borrower.
Section 5. NOTICES
Any notice, demand, statement,request, or consent made hereunder shall be in writing and
shall be personally served, mailed by first-class registered snail, return receipt requested, to the
address set forth in the first paragraph of this Indemnity, above, of the party to whom such notice
is to be given (or to such other address as the parties hereto, shall designate in writing):
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
Page 6
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In the case of the City:
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
With a copy to:
City Attorney's Office
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
In the case of Borrower:
Beach Housing Partners LP
c/o Jamboree Housing Corporation
17701 Cowan, Suite 200
Irvine, CA 92614
Attention: Michael Massie, Chief Development Officer
With a copy to:
Rutan & Tucker, LLP
Attn: Patrick D. McCalla, Esq.
18575 Jamboree Road, 9th Floor
Irvine, California 92612
Any notice that is personally delivered (including by means of professional messenger service,
courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall
be deemed received on the documented date of receipt; and any notice that is sent by registered or
certified mail, postage prepaid, return receipt required shall be deemed received on the date of
receipt thereof.
Section 6. MISCELLANEOUS
6.1 Borrower shall make any payment required to be made hereunder in lawful money
of the United States of America, and in same day funds, to the City at its address specified in the
first paragraph hereof.
6.2 No amendment of any provision of this Indemnity shall be effective unless it is in
writing and signed by Borrower and the City, and no waiver of any provision of this Indemnity,
and no consent to any departure by Borrower from any provision of this Indemnity, shall be
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
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effective unless it is in writing and signed by the City, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.
6.3 No failure on the part of the City to exercise, and no delay in exercising, any right
hereunder or under any other Loan Document shall operate as a waiver thereof,nor shall any single
or partial exercise of any right preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the City provided herein and in the other Loan Documents
are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.
The rights of the City under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the City to exercise any of its rights under any other Loan Document
against such party or against any other person or collateral.
6.4 Any provision of this Indemnity that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof and without affecting the
validity or enforceability of such provision in any other jurisdiction.
6.5 This Indemnity shall (a)be binding upon Borrower, and Borrower's successors and
assigns; and (b) inure, together with all rights and remedies of the City hereunder, to the benefit of
the City, and its directors, officers, employees, and agents, any successors to the City's interest in
the Property, any other person who acquires any portion of the Property at a foreclosure sale or
otherwise through the exercise of the City's rights and remedies under the Loan Documents, any
successors to any such person, and all directors, officers, employees, and agents of all of the
aforementioned parties. Without limiting the generality of clause (b) of the immediately preceding
sentence, the City may, subject to, and in accordance with,the provisions of the Loan Documents,
assign or otherwise transfer all or any portion of its rights and obligations under any other Loan
Document, to any other person, and such other person shall thereupon become vested with all of
the rights and obligations in respect thereof that were granted to the City herein or otherwise. Other
than a Permitted Transfer,none of the rights or obligations of Borrower hereunder may be assigned
or otherwise transferred without the prior written consent of the City.
6.6 Borrower hereby (a) irrevocably submits to the jurisdiction of any California or
federal court sitting, in each instance, in Orange County in any action or proceeding arising out of
or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non
convenient or similar rules or doctrines, and(c)irrevocably agrees that all claims in respect of any
such action or proceeding-may be heard and detennined in such California or federal court.
Borrower irrevocably consents to the service of any and all process which may be required or
permitted in any such action or proceeding to the address specified in the first paragraph of this
Indemnity, above. Borrower agrees that a final judgment in any such action or proceeding shall be
inclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
Page 8
468
6.7 The title of this document and the captions used herein are inserted only as a matter
of convenience and for reference and shall in no way define, limit, or describe the scope or the
intent of this Indemnity or any of the provisions hereof.
6.8 This Indemnity shall be governed by, and construed and interpreted in accordance
with, the laws of the State of California applicable to contracts made and to be performed therein,
except to the extent that the laws of the United States preempt the laws of the State of California.
6.9 This Indemnity may be executed in any number of counterparts,each of which shall
constitute an original and all of which together shall constitute one agreement.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
Page 9
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IN WITNESS WHEREOF, Borrower has duly executed this Indemnity as of the date first
set forth above.
"BORROWER"
BEACH HOUSING PARTNERS LP
a California limited partnership
By: JHC-Beach LLC, a California limited liability
company
Its: Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit
corporation
Its: Manager
By
Name: Michael Massie
Title: Chief Development Officer
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
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Exhibit A
LEGAL :DESCRIPTION
REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 159-031-18
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 13 —ENVIRONMENTAL INDEMNITY
Exhibit A—Legal Description
471
ATTACHMENT NO. 14
WAIVER AND CONCESSION AGREEMENT
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 14—WAIVER AND CONCESSION AGREEMENT
472
Recording Requested by
and When Recorded Return to:
City Clerk, City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
SPACE ABOVE THIS LINE FOR RECORDER'S USE
GOVERNMENT BUSINESS
Free Recording Requested
(Govt. Code §27383)
APN: 159-031-18
DENSITY BONUS LAW
WAIVER AND CONCESSION AGREEMENT
THIS DENSITY BONUS LAW WAIVER AND CONCESSION AGREEMENT
("Agreement") dated as of ] 202, is entered into by and between THE CITY OF
HUNTINGTON BEACH,a municipal corporation of the State of California("City"),and BEACH
HOUSING PARTNERS LP, a California Limited Partnership and its successors and assigns
("Owner"), as follows.
RECITALS
A. Owner is the owner of a fee interest in certain real property located in the City of
Huntington Beach, County of Orange, State of California, identified as APN 159-031-18, located
at 18431 Beach Boulevard, Huntington Beach, California and legally described in Exhibit "A"
attached hereto and incorporated by reference ("Property").
B. Owner proposes to construct a 43-unit rental housing development, consisting of
one 4-story Type V residential building above a partially subterranean parking garage plus
associated amenities ("Residential Development"). The project will include 42 one-bedroom
resident units and 1 two-bedroom manager's unit.
C. One hundred percent (100%) of the 42 resident units will be available to and
occupied by senior households whose incomes do not exceed the maximum income of low income
households in Orange County as determined by the California Department of Housing and
Community Development.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 14—WAIVER AND CONCESSION AGREEMENT
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D. The Beach and Edinger Corridors Specific Plan (BESCP) imposes a Special
Building Height Limit (BECSP 2.3.1.3 Building Height) that restricts the height of new
developments that are adjacent to an existing residential building that is three floors or less.
E. Because 100% of the resident units in the Residential Development will be
affordable to low income senior households, Government Code section 65915(d)(2)(D) entitles
the Residential Development to four incentives or concessions. Pursuant to Government Code
section 65915(d)(1) and Huntington Beach Zoning Code, Section 230.14D, Owner has requested
that the City grant a concession on the Special Building Height Limit with respect to the
Residential Development, which would result in identifiable and actual cost reductions to provide
for affordable units and has demonstrated such cost reductions to the satisfaction of the City.
F. City and Owner enter into this Agreement pursuant to and in accordance with
Government Code Section 65915, et seq., and Section 230.14 of the Huntington Beach Zoning
Code, in order to assure that the Residential Development will provide the required number of
units affordable to low income households and that those units will remain affordable for at least
fifty-five (55) years.
NOW,THEREFORE,in consideration of the mutual covenants and provisions contained
herein, the parties agree as follows:
AGREEMENT
1. Recitals. The Recitals set forth above are true and correct, and incorporated herein.
2. Definitions. For purposes of this Agreement, the terms listed below shall have the
meanings thereafter specified:
a. "Adjusted for Household Size Appropriate for the Unit"means a household
of two persons in the case of a one-bedroom unit and a household of three persons in the case of a
two-bedroom unit.
b. "Affordable Rent"means a rent that, when added to the Utility Allowance,
does not exceed thirty (30) percent of sixty(60) percent of the Orange County median income as
determined annually by the California Department of Housing and Community Development,
Adjusted for Household Size Appropriate for the Unit.
C. "Affordable Unit" means a dwelling unit that will be offered for rent
exclusively to an Income Eligible Household at an Affordable Rent pursuant to this Agreement.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 14—WAIVER AND CONCESSION AGREEMENT
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d. "Director"means City's Director of Community Development, or his or her
designee.
e. "Income Eligible Household" means a Low Income Household which is
eligible to rent a particular Affordable Unit.
f. "Low Income Household" shall have the meaning ascribed to "lower
income households" under California Health and Safety Code Section 50105. The upper income
limit for Low Income Households shall be the income limits for such households published
annually by the California Department of Housing and Community Development with adjustments
for household size.
g. "Management Plan"means a plan prepared by the Owner and approved by
the Director describing in detail the management of the Affordable Units, including marketing of
the Affordable Units, tenant selection criteria and process, waiting list management, application
of Utility Allowances in setting Affordable Rents, and similar details of the operation, annual
monitoring inspections and file review, and a schedule of initial rents.
h. "Occupancy Date"means the issuance of a Certificate of Occupancy by the
City.
i. "Owner" means the person or entity defined as such in the introductory
paragraph of this Agreement, and includes all successors and assigns of that person or entity.
j. "Property" shall have the meaning defined in Recital "A," as more
particularly described in Exhibit "A" attached hereto and incorporated herein.
k. "Residential Development" shall have the meaning given in Recital "B".
1. "Utility Allowance"means an amount designated annually by the City as a
reasonable estimate of the cost of utilities for the Affordable Unit, for purposes of calculating
Affordable Rent.
3. Approvals. The Residential Development shall be developed in accordance with
all applicable provisions of the Huntington Beach Zoning Code and the Huntington Beach
Municipal Code.
4. Affordable Units. Owner hereby covenants and agrees that one hundred percent
(100%) of the resident units in the Residential Development(42 units) shall be rented exclusively
to Low Income Households, at an Affordable Rent.
5. Affordable Rents. Affordable Rents for Affordable Units, including Utility
Allowances, shall be based on the Orange County Area Median Income published by the
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California Department of Housing and Community Development, as may be adjusted from time
to time. Affordable Rents may not be increased more frequently than annually to reflect increases
in Area Median Income.
6. Term of Affordability Covenants. The covenants to restrict the rental of the
Affordable Units in accordance with this Agreement shall remain in effect for a term commencing
on the Occupancy Date and continuing for fifty-five (55) years ("Term"). Prior to recording of
this Agreement, Owner must deliver to the City a Lenders Consent and Subordination Agreement
("Lender Consent"), in the form appended to this Agreement, from each lender that will hold a
security interest in the Property. Such Lender Consents shall be recorded as a substantive part of
this Agreement.
7. Management Plan. The Owner shall submit the Management Plan for the
Director's consideration and approval at least one hundred eighty(180) days prior to the date that
the Owner applies for a Certificate of Occupancy for the Residential Development. Such approval
shall not be unreasonably withheld. In addition to other components, the Management Plan shall
contain the following:
a. Selection of Tenants.
i. Owner shall conduct affirmative marketing of the Affordable Units,
as they become available from time to time, including wide circulation of information and public
notice of the availability of Affordable Units for rent during the marketing period required by the
Management Plan.
ii. Owner shall determine eligibility of Low Income Households that
may lease the Affordable Units in accordance with 25 CCR 6914 and the Management Plan.
8. Changes in Tenant Income. A tenant who initially qualified as a Low Income
Household, but who, due to an increase in income, no longer qualifies as a Low Income
Household shall pay as rent an amount that is the lower of the amount that would be payable by
the tenant under (i) low income housing tax credit regulations, or(ii) State law.
9. Utilization of Affordable Rental Units. All Affordable Units required by this
Agreement shall be leased or rented and fully utilized in accordance with this Agreement;
notwithstanding any other provision of law to the contrary,no Affordable Unit shall be withdrawn
from the market or otherwise held vacant, except during reasonable periods of maintenance and/or
rehabilitation.
10. No Sublease. A tenant occupying an Affordable Unit may not sublet the unit
without the written penmission of both Owner and City. The City shall not grant permission to
lease, rent, or sublet the unit if it finds that the prospective tenant or occupant is not an Income
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Eligible Household. Any individual who subleases an Affordable Unit in violation of the
provisions of this Agreement shall be required to forfeit to City all monetary amounts so obtained.
11. Lease Agreement. Owner's proposed lease agreement for the Affordable Units
shall be provided to the City for approval at the same time as Owner's proposed Management
Plan. Once approved, Owner shall not substantially modify the terms of the lease agreement
without prior City approval. City approvals required by this Section shall not be unreasonably
withheld.
12. Maintenance of Units. Owner shall: (a) maintain and operate all units on the
Property so as to provide decent, safe and sanitary housing consistent with federal housing quality
standards and the Huntington Beach Municipal Code; (b) make any required repairs or provide
any required cleanup; and (c) provide the Affordable Units with the same levels of services and
maintenance as are provided to any of the other dwelling units on the Property.
13. Annual Report. Owner shall maintain complete and accurate records pertaining to
the Affordable Units, and shall prepare and provide the Director with a written annual report
commencing one year after the Occupancy Date and continuing every year for fifty-five (55)
years, regarding the rental and occupancy status of the units. The report shall include information
regarding the name, address and income of each resident of the Affordable Units, identify the
number of bedrooms of the unit and the monthly rent paid by the tenant.
14. Federal and State Laws. Notwithstanding the above provisions, nothing contained
herein shall require Owner or City to do anything contrary to or refrain from doing anything
required by Federal and State laws and regulations promulgated thereunder applicable to the
construction,management,maintenance, and rental of Affordable Units in the City of Huntington
Beach.
15. Prohibition Against Discrimination. Except as legally permitted to determine
eligibility for senior housing, Owner shall not discriminate against any tenant or potential tenant
on the basis of sex, color, race, ethnicity, religion, ancestry, national origin, age, pregnancy,
marital status, family composition, sexual orientation, or the potential or actual occupancy of
minor children. Owner further agrees to take affirmative action to ensure that no such person is
discriminated against for any of the above mentioned reasons.
16. Indemnification. Owner shall defend, indemnify and hold harmless the City of
Huntington Beach and its officers, agents, employees, representatives and volunteers from and
against any loss, liability, claim or judgment relating solely to this Agreement, including those
Claims that arise out of either: (a) a breach of this Agreement by Owner; or (b) related in any
manner to the Owner's administration of this Agreement. This indemnification shall not apply to
Claims to the extent arising out of the negligence or willful misconduct of the City, its officers,
agents, employees, representatives or volunteers.
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17. City's Right to Inspect Units and Documents. The City may inspect the Affordable
Units (subject to the tenant's privacy rights and lease provisions) and any documents or records
relating thereto, at any reasonable time and after providing reasonable prior written notice to
Owner in order to determine Owner's compliance with this Agreement.
18. Successors and Assigns. This Agreement and its covenants and conditions shall run
with the land and be binding upon and inure to the benefit of City and Owner, and their respective
successors, owners by deed, deed-in-lieu of foreclosure, foreclosure or otherwise, and assigns.
City reserves the right to designate another public agency within the City of Huntington Beach to
perform City's obligations or to exercise City's rights under this Agreement.
19. Notices. All notices required herein shall be sent by certified mail, return receipt
requested or express delivery service with a delivery receipt and shall be deemed to be effective
on the date received or the date delivery was refused as indicated on the return receipt, as follows:
To Owner: Beach Housing Partners LP
c/o Jamboree Housing Corporation
17701 Cowan, Suite 200
Irvine, CA 92614
Attention: Michael Massie, Chief Development Officer
With a copy to: Rutan & Tucker, LLP
Attn: Patrick D. McCalla, Esq.
18575 Jamboree Road, 9th Floor
Irvine, California 92612
To City: City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attention: Director of Community Development
With a copy to: City Attorney's Office
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
The parties may subsequently change addresses by providing written notice of the change in
address to the other parties in accordance with this Section.
20. Governing Law. The laws of the State of California shall govern this Agreement,
without giving effect to the principles governing conflicts of laws. Any legal action brought under
this Agreement must be instituted in the Superior Court of the County of Orange, State of
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California, in an appropriate Superior court in that County, or in Federal District Court in the
Southern District of California.
21. Default. If a party fails to perform any term or provision of this Agreement, prior
to exercising any remedies hereunder, the injured party shall give the party in default notice of
such default. If the default is reasonably capable of being cured within thirty (30) calendar days
after such notice is received or deemed received, the party in default shall have such period to
effect a cure prior to exercise of remedies by the injured party. If the default is such that it is not
reasonably capable of being cured within thirty (30) days, and the party in default (1) initiates
corrective action within said period, and (2) diligently, continually, and in good faith works to
effect a cure as soon as possible, then the party in default shall have such additional time as is
reasonably necessary to cure the default prior to exercise of any remedies by the injured party.
Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it
change the time of default. City agrees to accept cures tendered by the Investor Limited Partner
of Owner within the cure periods provided in this Agreement.
22. Remedies.
a. If Owner or a tenant of an Affordable Unit rents (including subleasing) an
Affordable Unit in violation of the provisions of this Agreement limiting the amount of rent to be
charged for such unit, then such person shall be required to forfeit to City all monetary amounts in
excess of Affordable Rent that were so obtained and that had not been refunded to the person from
whom the rents were collected.
b. City may institute any appropriate legal actions or proceedings necessary to
ensure compliance with this Agreement, including but not limited to actions for injunctive relief
or damages.
C. It is agreed and understood that the covenants to maintain the Affordable
Units as set forth herein are a requirement of the Huntington Beach Zoning Code and as a condition
to receiving waivers and concessions/incentives under the Huntington Beach Zoning Code. Owner
agrees that a breach of the covenants to maintain the Affordable Units as affordable housing for
the Term specified herein constitutes a violation of the Huntington Beach Zoning Code, subject to
enforcement by all legally available means.
23. Attorney's Fees. In any action brought to declare the rights granted herein or to
enforce or to interpret any of the terms of this Agreement, the prevailing party shall be entitled to
an award of reasonable attorney's fees and costs in an amount determined by the court.
24. Non-Waiver. Failure to exercise any right either Party may have or be entitled to,
in the event of default hereunder shall not constitute a waiver of such right or any other right in
the event of a subsequent default.
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25. Further Assurances and Recordation. The parties shall cause this Agreement to be
recorded in the Official Records of the County of Orange. Owner shall execute any further
documents consistent with the terms of this Agreement, including documents in recordable form
and do such farther acts as the City reasonably determines necessary to effectuate City's purpose
in entering into this Agreement.
26. Entire Agreement. This Agreement, including any Lender's Consent and
Subordination Agreements, and all attached Exhibits, constitutes the entire agreement between
the parties. This Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same instrument. Each party to
this Agreement acknowledges that no representations, inducements, promises or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf of any party,which
are not embodied herein, and that any other agreement, statement or promise not contained in this
Agreement shall not be valid or binding. This Agreement may be amended only by written
instrument signed by both City and Owner.
27. Third Party Beneficiaries. There are no third party beneficiaries of or to this
Agreement.
28. Amendment of This Agreement.
a. Generally. This Agreement may be amended in writing from time to time
in whole or in part by mutual consent of the original parties or their successors in interest, in
accordance with this Agreement,the Huntington Beach Zoning Code and the State Density Bonus
Law.
b. Administrative Amendments. Notwithstanding subdivision a. of this
Section, any amendment to this Agreement, whether requested by Owner or City, which does not
relate to the Term; the number, percentage or type of Affordable Units; or the number or type of
any incentives or concessions given by the City, may be determined by the Director to be an
Administrative Amendment and if so, the Director shall approve the Administrative Amendment
without notice or hearing, and this Agreement and its pertinent exhibits shall be automatically
amended upon mutual written consent of the parties, without further action by the parties. A
memorandum of the amendment shall be executed and recorded to reflect such Administrative
Amendment.
29. Counterparts. This Agreement may be executed by each party on a separate
signature page, and when the executed signature pages are combined, shall constitute one single
instrument.
[signatures follow]
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IN WITNESS WHEREOF, City and Owner have signed this Agreement as of the date set
forth above.
"CITY" "OWNER"
CITY OF HUNTINGTON BEACH BEACH HOUSING PARTNERS LP
a California limited partnership
By: By: JHC-Beach LLC, a California limited
Oliver Chi liability company
City Manager Its: Managing General Partner
ATTEST: By: Jamboree Housing Corporation,
a California nonprofit public
benefit corporation
By: Its: Manager
Robin Estanislau
City Clerk By:
Michael Massie
APPROVED AS TO FORM: Chief Development Officer
By:
Michael Gates
City Attorney
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LENDER'S CONSENT AND SUBORDINATION AGREEMENT
NOTICE: THIS LENDER'S CONSENT AND SUBORDINATION RESULTS IN YOUR
SECURITY INTERESTS IN THE PROPERTY BECOMING SUBJECT TO AND OF A LOWER
PRIORITY THAN THIS DENSITY BONUS LAW WAIVER AND CONCESSION
AGREEMENT
The undersigned ("Lender"), as owner and holder of security interests ("Security Interests")
evidenced by that certain [Deed of Trust With Absolute Assignment of Leases and Rents, Security
Agreement and Fixture Filing] made by Borrower as trustor in favor of
as beneficiary, dated as of and recorded
on as Instrument No. in the Official Records of the County of
Orange, State of California, hereby acknowledges its consent to the terms and provisions of this
Density Bonus Law Waiver and Concession Agreement ("Agreement"). The undersigned further
agrees that its Security Interests are and shall unconditionally be and remain at all times junior,
subordinate and subject to the terns, covenants, conditions and restrictions of this Agreement,
provided that in consideration of Lender's covenants and agreements contained in this Agreement,
City and its designated agencies hereby agree for the benefit of Lender that concurrently with any
notice from City to the Owner that a default or breach exists under the terns of the Agreement,
City shall send a copy of such notice to Lender and Lender shall have the right, but not the
obligation to cure any defaults within thirty (30) days after the expiration of any cure period set
forth in the notice from City to Borrower regarding such Owner default. Lender intentionally and
unconditionally subordinates the lien or charge of the Security Interests in favor of the Agreement.
AGREED AND ACKNOWLEDGED:
Dated as of. "LENDER"
Name:
Title:
[jurats must be included]
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 14—WAIVER AND CONCESSION AGREEMENT
LENDER'S CONSENT AND SUBORDINATION
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EXHIBIT A
Legal Description of Property
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN:159-031-18
AFFORDABLE HOUSING AGREEMENT
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ATTACHMENT NO. 14—WAIVER AND CONCESSION AGREEMENT
EXHIBIT A—LEGAL DESCRIPTION
483
ATTACHMENT NO. 15
AMENDED AND RESTATED COVENANTS
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 15 —AMENDED AND RESTATED COVENANTS
484
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 159-031-18 FREE RECORDING REQUESTED
(Gov't Code Section 27383)
AMENDED AND RESTATED AGREEMENT CONTAINING COVENANTS
(INCLUDING RENTAL RESTRICTIONS)
(18431 Beach Boulevard)
THIS AMENDED AND RESTATED AGREEMENT CONTAINING COVENANTS
(INCLUDING RENTAL RESTRICTIONS) ("Agreement") dated as of December 21, 2020 is
entered into by and between BEACH HOUSING PARTNERS LP, a California limited partnership
("Owner"), THE HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate
and politic ("Authority"), and THE CITY OF HUNTINGTON BEACH, a municipal corporation
of the State of California ("City").
WHEREAS, Owner is the owner of that certain real property (the "Property") located in
the City of Huntington Beach more particularly described in Exhibit "A"which is attached hereto
and incorporated herein by this reference;
WHEREAS,for the purpose of providing housing that will be affordable to Extremely Low
Income Households and Very Low Income Households, the Owner, the Authority, and the City
entered into that certain Acquisition Loan Agreement, dated as of January 23, 2020 (the
"Acquisition Loan Agreement"), whereby the Authority provided financial assistance to Owner to
acquire the Property,using Low and Moderate Income Housing Asset Funds("Authority LMIHAF
Loan"), and the City provided financial assistance to Owner to acquire the Property, using
Affordable Housing Trust Funds ("City Inclusionary Loan");
WHEREAS, the Acquisition Loan Agreement contained certain provisions relating to the
restricted use of the Property for affordable housing purposes and an Agreement Containing
Covenants (Including Rental Restrictions) was entered into between the Owner and the Authority
on January 28, 2020 and recorded in the official records of Orange County on January 29, 2020 as
Instrument No. 2020000038042 ("Acquisition Covenants");
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WHEREAS, the Owner, the Authority, and the City entered into that certain Affordable
Housing.Agreement between the Owner, the Authority, and the City dated as of January 5, 2021
(as amended from time to time, the "Affordable Housing Agreement");
WHEREAS, the Affordable Housing Agreement provides for a loan from the City to the
owner of HOME Program funds for repayment at construction financing of the Authority LMIHAF
Loan and partial repayment of the City Inclusionary Loan;
WHEREAS, the Owner has proposed a change in the affordability mix, and sizes of the
rental units, and the Affordable Housing Agreement restricts the use of the Property accordingly,
consisting of 42 units of one-bedroom affordable rental housing for seniors and one two-bedroom
manager unit; and
WHEREAS, the Owner, the Authority, and the City desire to amend and restate the
Acquisition Covenants in their entirety, in order to reflect the change in size, and affordability of
the units and to extend the affordability period to conform to the City Inclusionary Loan
requirements. Upon the recordation hereof in the Official Records of the County of Orange, the
Acquisition Covenants are hereby replaced and superseded, in their entirety, by this Agreement.
NOW, THEREFORE, THE OWNER, THE AUTHORITY, AND THE CITY
COVENANT AND AGREE AS FOLLOWS:
1. Affordable Units. For the Term of this Agreement, Owner covenants and agrees for
itself, its successors, its assigns and every successor in interest to the Property or any part thereof
or any interest therein, that Owner, its successors and assigns shall use the Property exclusively to
provide forty-two (42) one bedroom Affordable Units (hereinafter defined) that are reserved for
occupancy by Extremely Low Income Households and Very Low Income Households(hereinafter
defined) at an Affordable Rent (hereinafter defined).
"Affordable Unit" shall mean one of the thirty-three (33) one-bedroom rental dwelling
units developed on the Property and restricted to occupancy by Extremely Low Income
Households and one of the nine (9) one-bedroom rental dwelling units developed on the Property
and restricted to occupancy by Very Low Income Households, all at an Affordable Rent. The term
"Affordable Unit" and "Affordable Units" shall be used as the context mandates and shall be
reasonably interpreted in light of the context in which the term appears.
2. Maximum Incomes.
"Extremely Low Income Household" shall mean persons and families whose income,
determined in accordance with section 6914 of Title 25 of the California Code of Regulations,
does not exceed the income limits for Extremely Low Income households in Orange County,
adjusted for family size, published approximately annually by California's Housing and
Community Development Department. If California's Housing and Community Development
Department discontinues publishing such income limits, the term `Extremely Low Income" shall
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mean a household income that does not exceed 30% of the Area Median Income, adjusted for
family size.
"Very Low Income Households" shall mean persons and families whose income,
determined in accordance with section 6914 of Title 25 of the California Code of Regulations,
does not exceed the income limits for Very Low Income households in Orange County, adjusted
for family size, published approximately annually by California's Housing and Community
Development Department. If California's Housing and Community Development Department
discontinues publishing such income limits, the term "Very Low Income" shall mean a household
income that does not exceed 50% of the Area Median Income, adjusted for family size.
3. Maximum Rents. "Affordable Rent" shall mean:
a. For Extremely Low Income Households, rental rates not to exceed the
product of 30 percent times 30 percent of the Area Median Income adjusted for household size
appropriate to the unit.
b. For Very Low Income Households, rental rates not to exceed the product of
30 percent times 50 percent of the Area Median Income adjusted for household size appropriate to
the unit.
For purposes of determining Affordable Rent, the phrase "household size appropriate to
the unit" shall mean the number of bedrooms in the unit plus one,being two persons in the case of
a 1-bedroom unit. Affordable Rent shall include a reasonable utility allowance for tenant-paid
utilities based on the Orange County Housing Authority's published utility schedules.
"Area Median Income" shall mean the area median income of the Orange County
metropolitan statistical area (PMSA), with adjustments for household size, as estimated annually
by the United States Department of Housing and Urban Development pursuant to Section 8 of the
United States Housing Act of 1937 as amended and published by California's Housing and
Community Development Department pursuant to Health and Safety Code Section 50093.
4. Failure to Comply. Subject to the notice and cure provisions herein, failure to
comply with the affordability covenants in this Agreement is an event of default under the terms
of the promissory note evidencing the City Inclusionary Loan. Pursuant to said promissory note,
upon a default under this Agreement not cured within the notice and cure period provided herein,
the City Inclusionary Loan will become immediately due and payable.
5. Nondiscrimination. The Owner covenants and agrees for itself, its successors, its
assigns and every successor in interest to the Property or any part thereof, to the fullest extent
applicable to senior housing,there shall be no discrimination against or segregation of any person,
or group of persons, on account of race, color, national origin, religion or sex in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Owner itself or
any person claiming under or through it establish or permit any such practice or practices of
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discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees of the Property.
14. Management and Maintenance Requirements.
a. Owner covenants and agrees (for itself, its successors, its assigns, and every
successor in interest to the Property or any part thereof) that Owner, its successors and assigns
shall use the Property exclusively to provide affordable housing for Extremely Low and Very Low
Income households as provided in the Affordable Housing Agreement.
b. Prior to the Closing, Owner shall submit to the City a Management Plan
describing the proposed plans for managing and operating the Property. Approval of the
Management Plan by the City Manager or designee shall be a condition precedent to the Closing.
Owner shall manage and operate the Property in accordance with the approved Management Plan,
including such amendments as may be approved in writing from time to time by Owner and the
City Manager or designee, for the entire term of this Agreement.
The Management Plan, including such amendments as may be approved in writing by the City,
shall remain in effect for the term of this Agreement. The Owner shall not amend the Management
Plan or any of its components without the prior written consent of the City. The components of
the Management Plan shall include:
(1) Management Agent. The name and qualifications of the proposed
management agent for the Project ("Management Agent"). The City shall approve or disapprove
the proposed Management Agent, in writing based on the experience and qualifications of the
Management Agent (such approval not to be unreasonably withheld, conditioned, or delayed).
(2) Management Prom. A description of the proposed management,
maintenance, tenant selection and occupancy policies and procedures for the Units, which shall
include procedures to assure that advertising of the units will reach a broad cross-section of
Huntington Beach residents.
(3) Management Agreement. A copy of the proposed management
agreement specifying the amount of the management fee and the relationship and division of
responsibilities between the Owner and the Management Agent. The Owner's agreement with the
Management Agent shall provide that it is subject to termination by the Owner without penalty,
upon thirty(30) calendar days' prior written notice. The Owner hereby covenants and agrees that,
if the City detennines in its reasonable judgment that the Project is not being operated and managed
in accordance with the Management Plan, the City may deliver notice to the Owner of the City's
determination that the Project's management practices do not confonn to the Management Plan
("City Notice"), including a reasonably detailed explanation of such non-conformance. The City
and the Owner shall meet and confer in good faith to identify actions to be taken by the Owner to
bring its management practices into conformance with the Management Plan,which could include
replacing the Management Agent. The Owner shall have thirty(30) calendar days after receipt of
the City Notice (or such longer time as may be granted by the City in City's reasonable discretion)
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to either change its management practices to conform to the Management Plan or replace the
Management Agent with a Management Agent approved by the City (such approval not to be
unreasonably withheld, conditioned, or delayed). The Owner shall promptly notify the City upon
learning that there is a change in the management or control of the Management Agent, and, if the
change is unsatisfactory to the City, the City shall be entitled to require the Owner to replace the
Management Agent in accordance with the terms of this paragraph.
(4) Tenant Lease or Rental Agreement. A copy of the proposed tenant
lease or rental agreement to be used in renting the Units, which shall be in a form approved by the
City (such approval not to be unreasonably withheld, conditioned, or delayed).
(5) Annual Operating Budget. Within the time set forth in the
Schedule of Performance attached to the Affordable Housing Agreement and annually thereafter
not later than fifteen (15) calendar days prior to the beginning of the next fiscal or calendar year
of the Project,the Owner shall submit to the City for review and approval (such approval not to be
unreasonably withheld, conditioned, or delayed) a projected operating budget that shall include all
necessary operating expenses, current maintenance charges, expenses of reasonable upkeep and
repairs,taxes and special assessment levies,monitoring fees charged by the City and other lenders,
prorated amount required for insurance and all other expenses incident to the operation of the
Project; and shall show the expected revenues to pay such expenses, including annual debt service
requirements and reserve fund deposits and balances. After the Owner's initial projected operating
budget submittal, the Owner shall annually reconcile each previous year's projected budget with
actual operating results for the Project ("Budget Reconciliation"). In each Budget Reconciliation,
the Owner shall set forth an explanation for any major discrepancies between projected and actual
budgets. For purposes of this Agreement, a "major discrepancy" shall mean a line item difference
between projected and actual budgets of twenty percent (20%) or more.
(6) Social Services Program. A description of the proposed social
services to be provided to the tenants, including the proposed scheduling of any classes or
programs that will be offered on a regular basis, a description of any selection criteria for
determining who will be eligible to receive the services, and a description of the proposed staffing
level and qualifications of the providers of the services.
C. The City shall not unreasonably withhold, condition or delay its approval of
any matter for which its approval is required hereunder. Any express disapproval shall be in
writing and contain the City's reasons for disapproval. Notwithstanding the foregoing, if the City
has not expressly approved or disapproved the Owner's projected operating budget within thirty
(30) calendar days after its submittal to the City, then the Owner shall provide a written notice to
the City that it intends to operate pursuant to the projected operating budget and the City shall have
an additional fifteen (15) calendar days within which to approve or disapprove such budget. If the
City has not expressly approved or disapproved the projected operating budget by the end of such
additional 15-calendar day period, then the Owner may operate the Project under its projected
operating budget so long as discretionary amounts do not exceed one hundred ten percent (110%)
of the amount of that line item in the previous year's approved operating budget.
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ATTACHMENT NO. 15 —AMENDED AND RESTATED COVENANTS
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d. Beginning on the date of first occupancy, for each fiscal year of the
Affordability Period, Owner shall also submit on a quarterly basis a quarterly report for the
management of the Project (the "Quarterly Report") in a form that is reasonably acceptable to the
City Manager or designee. The Quarterly Report shall include a profit and loss statement, budget
to date figures, and occupancy report. The City Manager or designee, in his or her sole discretion
may waive the requirement of the Quarterly Report for one or more quarterly reporting periods.
However, such waiver shall not operate to waive any subsequent requirement of the Quarterly
Report for the Restricted Period upon the City's written notice to Owner.
e. Prior to the Closing, Owner shall prepare and submit to the City for review
and approval a program (the "Maintenance Program") for the exterior and interior maintenance of
the Project. The Maintenance Program shall describe in reasonable detail the standards to be
followed in maintaining the interior and exterior of the improvements, including a schedule
indicating the proposed frequency of each element of maintenance, and shall include, at a
minimum, the following: periodic cleaning of the interior and exterior of the improvements,
including windows; removing graffiti; removing debris and waste materials and otherwise
maintaining indoor and outdoor areas of the Property; maintaining any lawns, plants, shrubs and
trees or other landscaping planted on the Property; performing inspections of all exterior features
to determine whether repairs are required; conducting periodic protective treatments such as rust
removal and caulking; conducting repairs to facades, roof, doors, windows and other exterior
features; maintaining fencing and other security devices and systems; periodic repainting of the
exterior; periodic repainting of the interior units and common areas; periodic replacing of the
interior unit carpets; checking building systems, including, but not limited to the heating and
cooling systems, smoke alarms and water heaters; checking interior unit appliances; and
monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including any
amendments proposed by Owner, shall be subject to the reasonable approval of the City Manager
or designee.
f. At all times during the term of this Agreement, Owner shall maintain the
Property and the improvements in accordance with the approved Maintenance Program. To
implement this requirement, Owner agrees to budget sufficient funds to pay for all reasonably
anticipated costs (as indicated in the Annual Maintenance Budget). If Owner fails to maintain the
Property and the improvements in accordance with the approved Maintenance Program, and does
not cure such failure within thirty(30) days following notice from the City, the City shall have the
right, but not the obligation, to enter the Property, correct any violation, and hold Owner
responsible for the cost thereof, and such cost, until paid, shall constitute a lien on the Property;
provided, however, Owner shall have such additional time as may be reasonably necessary to cure
such default provided that Owner has commenced to cure within such thirty (30) day period and
is diligently prosecuting the cure to completion. Prior to undertaking any work to correct any such
maintenance deficiency, the City shall provide written notice that Owner must correct the
deficiency within a reasonable time. Owner shall have a reasonable time in which to comply
following such notice from the City.
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 15 —AMENDED AND RESTATED COVENANTS
Page 6
490
6. Term of Covenants. The covenants established in this Agreement and any amendments
hereto approved by the parties hereto shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the Authority, its successors and assigns,
and the City and its successors and assigns. The covenants in this Agreement shall remain in effect
for the longest feasible time,but not less than sixty(60) years from the date the City of Huntington
Beach issues a certificate of occupancy for the Project(the"Term").
7. Enforcement of Covenants. In amplification and not in restriction of the provisions
set forth hereinabove, it is intended and agreed that Authority and City shall each be deemed
beneficiaries of the covenants and agreements provided hereinabove both for and in their own
rights and also for the purposes of protecting the interests of the community. All covenants without
regard to technical classification or designation shall be binding for the benefit of Authority and
City, and such covenants shall run in favor of Authority and City for the entire period during which
such covenants shall be in force and effect, without regard to whether Authority or City is or
remains an owner of any land or interest therein to which such covenants relate. Authority and
City and their respective successors or assigns shall each have the right, in the event of any breach
(or threatened breach) of any covenant or agreement, to exercise all the rights and remedies, and
to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing
of such breach of covenant or agreement including, without limitation, enjoining any actions that
would or do violate the covenants.
8. Covenants Run with the Land. The covenants established in this Agreement, shall,
without regard to technical classification or designation,run with the land,and shall be enforceable
against and be binding on Owner and any successor in interest to the Property or any part thereof
or any interest therein for the benefit and in favor of Authority, City and their respective successors
and assigns.
9. Amendments. Only Authority, its successors and assigns, City, its successors and
assigns, and Owner, and the successors and assigns of Owner in and to fee title to the Property,
shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of
the covenants, easements, or other restrictions contained in this Agreement, or to subject the
Property to additional covenants, easements or other restrictions.
10. Notice and Cure. Failure or delay by Owner to perform, or a breach or threatened
breach of, any term or provision of this Agreement constitutes a default under this Agreement.
Authority or City shall give written notice of default to Owner, specifying the default complained
of by the Authority or City, as applicable. Delay in giving such notice shall not constitute a waiver
of any default nor shall it change the time of default. Any failures or delays by Authority or City
in asserting any of its rights and remedies as to any default shall not operate as a waiver of any
default or of any such rights or remedies. Delays by Authority or City in asserting any of its rights
and remedies shall not deprive Authority or City of its right to institute and maintain any actions
or proceedings which it may deem necessary to protect, assert, or enforce any such rights or
remedies.
If the default is reasonably capable of being cured within thirty (30) calendar days after a
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 15 —AMENDED AND RESTATED COVENANTS
Page 7
491
written notice of default is received or deemed received, Owner shall have such period to effect a
cure prior to exercise of remedies by the Authority or City under this Agreement. If the default is
such that it is not reasonably capable of being cured within thirty(30)days, and Owner(i)initiates
corrective action within said period, and (ii) diligently and in good faith works to effect a cure as
soon as possible, then Owner shall have such additional time as is reasonably necessary to cure
the default prior to exercise of any remedies by Authority or City. In no event shall Authority or
City be precluded from exercising remedies if its security becomes or is about to become materially
jeopardized by any failure to cure a default.
Any notice of default that is personally delivered (including by means of professional
messenger service, courier service such as United Parcel Service or Federal Express, or by U.S.
Postal Service), shall be deemed received on the documented date of receipt by Owner; and any
notice of default that is sent by registered or certified mail,postage prepaid,return receipt required
shall be deemed received on the date of receipt thereof. Notices hereunder shall be sent to the
address(es) set forth in the Affordable Housing Agreement.
11. Severability; Waiver.
a. If any provision of this Agreement shall be invalid,illegal or unenforceable,
the validity, legality and enforceability of the remaining portions hereof shall not in any way be
affected or impaired thereby.
b. A waiver by any party of the performance of any covenant or condition
herein shall not invalidate this Agreement nor shall it be considered a waiver of any other
covenants or conditions, nor shall the delay or forbearance by any party in exercising any remedy
or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or
right.
12. Governing Law. This Agreement shall be governed by the internal laws of the State
of California and without regard to the principles relating to conflicts of law.
13. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall constitute one original and all of which shall be one and the same instrument.
This Agreement may be executed by each party on a separate signature page, and when the
executed signature pages are combined, shall constitute one single instrument.
14. Attorneys' Fees. If any action or proceeding arising out of or relating to this
Agreement is commenced by any party to this Agreement, the prevailing parry shall be entitled to
receive from the non-prevailing party, in addition to any other relief that may be granted, the
reasonable attorneys' fees, costs and expenses incurred in the action or proceeding by the
prevailing party.
[Signatures on Following Page]
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 1.5 —AMENDED AND RESTATED COVENANTS
Page 8
492
IN WITNESS WHEREOF, City, Owner and Authority have entered into this Agreement
as of the dates set forth below.
"CITY" "OWNER"
CITY OF HUNTINGTON BEACH BEACH HOUSING PARTNERS LP
a California limited partnership
By:
Oliver Chi Dated By: JHC-Beach LLC, a California limited
City Manager liability company
Its: Managing General Partner
ATTEST:
By: Jamboree Housing Corporation,
By: a California nonprofit public
Robin Estanislau benefit corporation
City Clerk
Its: Manager
APPROVED AS TO FORM:
By:
Michael Massie Dated
By. Michael Gates Chief Development Officer
City Attorney
"AUTHORITY"
HUNTINGTON BEACH HOUSING
AUTHORITY,
a public body corporate and politic
By:
Oliver Chi Dated
Executive Director
ATTEST:
By:
Robin Estanislau
Authority Secretary
APPROVED AS TO FORM:
By:
Michael Gates
Authority Counsel
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 15 —AMENDED AND RESTATED COVENANTS
Page 9
493
Exhibit "A"
LEGAL DESCRIPTION
REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 159-031-18
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 15 —AMENDED AND RESTATED COVENANTS
EXHIBIT "A"—LEGAL DESCRIPTION
494
ATTACHMENT NO. 16
AMENDED AND RESTATED NOTICE OF RESTRICTIONS
(behind this page)
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 16—AMENDED AND RESTATED NOTICE OF RESTRICTIONS
495
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 159-031-18 OFFICIAL BUSINESS
Document entitled to free
recording per Government
Code Section 27383
Amended and Restated Notice of Affordability Restrictions
on Transfer of Property
NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section
33334.3(f), BEACH HOUSING PARTNERS LP, a California limited partnership is
recording this Amended and Restated Notice of Affordability Restrictions on
Transfer of Property (hereinafter the "Notice") with regard to certain real property
located in the City of Huntington Beach more particularly described in Exhibit "A"
which is attached hereto and incorporated herein by this reference (the "Property").
The Property is subject to the Amended and Restated Agreement Containing
Covenants (the "Covenants") recorded concurrently herewith, which restricts the
use of the Property as follows:
Forty-two (42) one-bedroom Affordable Units (hereinafter
defined) that are reserved for occupancy by Extremely Low Income
Households and Very Low Income Households (hereinafter defined) at
an Affordable Rent (hereinafter defined).
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 16 —AMENDED AND RESTATED NOTICE OF RESTRICTIONS
Page 1
496
"Affordable Unit" shall mean one of the thirty-three (33) rental
dwelling units developed on the Property and restricted to occupancy
by Extremely Low Income Households and one of the nine (9) one-
bedroom rental dwelling units developed on the Property and restricted
to occupancy by Very Low Income Households, all at an Affordable
Rent. The term "Affordable Unit" and "Affordable Units" shall be used
as the context mandates and shall be reasonably interpreted in light of
the context in which the term appears.
"Extremely Low Income Household" shall mean persons and
families whose income, determined in accordance with section 6914 of
Title 25 of the California Code of Regulations, does not exceed the
income limits for Extremely Low Income households in Orange
County, adjusted for family size, published approximately annually by
California's Housing and Community Development Department. If
California's Housing and Community Development Department
discontinues publishing such income limits, the term "Extremely Low
Income" shall mean a household income that does not exceed 30% of
the Area Median Income, adjusted for family size.
"Very Low Income Households" shall mean persons and families
whose income, determined in accordance with section 6914 of Title 25
of the California Code of Regulations, does not exceed the income
limits for Very Low Income households in Orange County, adjusted for
family size, published approximately annually by California's Housing
and Community Development Department. If California's Housing
and Community Development Department discontinues publishing
such income limits, the term "Very Low Income" shall mean a
household income that does not exceed 50% of the Area Median
Income, adjusted for family size.
"Affordable Rent" shall mean:
a. For Extremely Low Income Households, rental rates not to
exceed the product of 30 percent times 30 percent of the Area
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 16—AMENDED AND RESTATED NOTICE OF RESTRICTIONS
Page 2
497
Median Income adjusted for family size appropriate for the
unit.
b. For Very Low Income Households, rental rates not to exceed
the product of 30 percent times 50 percent of the Area Median
Income adjusted for household size appropriate to the unit.
For purposes of determining Affordable Rent, household size
appropriate to the unit shall mean the number of bedrooms in the unit
plus one, being two persons in the case of a 1-bedroom unit. Affordable
Rent shall include a reasonable utility allowance for tenant-paid utilities
based on the Orange County Housing Authority's published utility
schedules.
"Area Median Income" shall mean the area median income of
the Orange County metropolitan statistical area (PMSA), with
adjustments for household size, as estimated annually by the United
States Department of Housing and Urban Development pursuant to
Section 8 of the United States Housing Act of 1937 as amended and
published by California's Housing and Community Development
Department pursuant to Health and Safety Code Section 50093.
The affordability restrictions imposed on the Property by the Covenants are
scheduled to expire on the date that is sixty (60) years from the date the City of
Huntington Beach issues a certificate of occupancy for the Project.
This Notice is recorded for the purpose of providing notice only and it in no
way modifies the provisions of the Covenants.
[Remainder of Page Intentionally Left Blank; Signatures on Following Page]
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 16 —AMENDED AND RESTATED NOTICE OF RESTRICTIONS
Page 3
498
BEACH HOUSING PARTNERS LP,
a California limited partnership
By: JHC-Beach LLC, a California limited
liability company
Its: Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public
benefit corporation
Its: Manager
By
Name: Michael Massie
Title: Chief Development
Officer
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 16 —AMENDED AND RESTATED NOTICE OF RESTRICTIONS
Page 4
499
Exhibit "A"
LEGAL DESCRIPTION
REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF
ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF
PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
APN: 159-031-18
AFFORDABLE HOUSING AGREEMENT
BEACH HOUSING PARTNERS LP
ATTACHMENT NO. 16 -AMENDED AND RESTATED NOTICE OF RESTRICTIONS
EXHIBIT A- LEGAL DESCRIPTION
500
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