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HomeMy WebLinkAboutC-3601(B) - Back Bay Drive, 1121 - Agreement Contaning CovenantsRECORDING REQUESTED BY • FIRST AMERICAN TITLE COMPANY NATIONAiICOMMERC!AL SERVICES COMMERCIAL/INDUSTRIAL DIVISION if97a15(e-03 OFFICIAL. BUSINESS Document entitled to free recording per Government Code Section 6103 Recording Requested by and When Recorded Mail to: CITY OF NEWPORT BEACH P.O. Box 1768 Newport Beach, CA 92658 Attn: City Manager This Document is electronically recorded by Firsnirmerican Title_B Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder HVIHE]®II1YIIIOR 3IIIHVJllI 42.00 2004001052522 01:30pm 11124104 104 27 Al2 13 0.00 0.00 0.00 0.00 36.00 0.00 0.00 0.00 (Space above this line for recording use) AGREEMENT CONTAINING COVENANTS This AGREEMENT CONTAINING COVENANTS (this "Agreement") is made as of this 1st day of November, 2004, by and between NEWPORT HOUSING PARTNERS, L.P., a California limited partnership ("Developer") and THE CITY OF NEWPORT BEACH, a public body, corporate and politic ("City"). RECITALS A. Developer and City have heretofore entered into that certain Development Loan Agreement (the "Loan Agreement") dated June 17, 2003, pursuant to the terms of which the City has agreed to make a $1,250,000 development loan (the "Loan") to Developer for the development of the Site (as such term is defined below), which Site is being ground leased to Developer in accordance with the terms and conditions of the Ground Lease (as such term is defined below). Developer intends to construct a one hundred twenty (120) unit senior's affordable housing project (the "Project") on the Site. B. City and Developer desire to place restrictions upon the use and operation of the Project, in order to insure that the Project shall be operated continuously as an affordable housing project available for rental in accordance with the terms set forth below for the term of this Agreement. I-IRI407405.2 1 TERMS 1. Definitions The following terms, as used in this Agreement, shall have the meanings given unless expressly provided to the contrary: The term "Affordable Rent" shall mean, for each Unit, annual rent that does not exceed thirty percent (30%) of the appropriate percentage (either 50% or 60%, as applicable) of median income for the Orange County, California, Metropolitan Statistical Area, adjusted for Assumed Household Size based on the number of bedrooms in such Unit. The term "Assumed Household Size" shall mean as to any Unit for purposes of determining Affordable Rent for such Unit, that each one (1) bedroom -Unit is assumed to be occupied by two (2) people and each two (2) bedroom Unit is assumed to be occupied by four (4) people. The term "50% Tenant" means one or two individuals at least one of whom is over fifty- five (55) years of age and whose annual income does not exceed fifty percent (50%) of the median income for the Orange County, California, Metropolitan Statistical Area as determined by HUD with adjustments for family size. The term "60% Tenant" means one or two individuals at least one of whom is over sixty-two (62) years of age and whose annual income does not exceed sixty percent (60%) of the median income for the Orange County, California, Metropolitan Statistical Area as determined by HUD with adjustments for family size. The term "Ground Lease" means that certain ground lease of the Site from The Irvine Company, a Delaware corporation, as lessor, to Developer, as lessee. The term "HUD" means the United States Department of Housing and Urban Development. The term "Lease" means the lease entered into between Developer and a Tenant of a Unit. The term "Loan Agreement" shall have the meaning ascribed to it in Recital Paragraph A above. The term "Loan" shall have the meaning ascribed to it in Recital Paragraph A above.. The term "Manager Units" means the Units (not to exceed two (2)) used by the manager(s) of the Project. The term "Project" shall have the meaning ascribed to it in Recital Paragraph A above. The term "Site" shall mean the real property described in Attachment 1 attached hereto. 1-IIU407405.2 The term "Tenant" shall mean either a 60% Tenant or a 50% Tenant. The term "Unit" and "Units" shall mean the one hundred twenty (120) dwelling units comprising the Project and subject to rent restrictions as set forth in this Agreement. 2. Use of Site. Developer, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof, hereby covenants and agrees that the Site shall be developed and used exclusively as rental housing for Tenants at Affordable Rents. 3. Maximum Incomes. Eighty percent (80%) of the Units (excluding the Manager Units) shall be restricted to 60% Tenants and twenty percent (20%) of the Units (excluding the Manager Units) shall be restricted to 50% Tenants. 4. Maximum Rents. Rent charged to any Tenant shall not exceed the "Affordable Rent" for that Unit based upon the Assumed Household Size. 5. Income Computation. Prior to any prospective Tenant's occupancy of a Unit, Developer shall obtain and maintain on file an income computation and certification form for each such prospective Tenant dated prior to the date of initial occupancy in a Unit. Developer shall use its best efforts to verify that the income information provided by an applicant is accurate by taking one or more of the following steps as a part of the verification process: (i) obtain two (2) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either City; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is reasonably satisfactory; or (v) obtain such other information as may be reasonably required. Developer shall update the foregoing records annually and shall provide copies of updated tenant eligibility records to City for review upon request. 6. Maintenance. The Developer shall maintain the improvements on the Site in compliance with all applicable State and local housing quality standards and local code requirements. 7. Maintenance of Records; Providing City with Copies of Annual Compliance Certificates. Developer shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the City to inspect the books and records of Developer pertaining to the Project including, but not limited to, those records pertaining to tenant eligibility and occupancy of the Units. Additionally, Developer shall promptly deliver to City copies of all annual income monitoring reports delivered to the California Tax Credit Allocation Committee from time to time with respect to the Units. 8. Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the Tenant in determining qualification for occupancy of a Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such Lease. 1-IRJ407405.2 3 9. Subordination. This Agreement shall be junior and subordinate to the lien of any Permitted Mortgage (as such term is defined in the Loan Agreement) and such other and further documents, including regulatory agreements (including those required by the California Tax Credit Allocation Committee) as provided under the Loan Agreement. City agrees to execute such subordination agreements as may be required from time to time to effect the priority set forth in this section and as provided by the provisions of the Loan Agreement. 10. Attornevs' Fees. If any action or proceeding is brought by either party against the other under this Agreemeht, whether for interpretation, enforcement or otherwise, the prevailing party shall be entitled to receive from the other party all costs and expenses for such action or . proceeding, including the fees of attorneys and any expert witnesses. This provision shall also apply to any postjudgment action by either party, including without limitation efforts to enforce a judgment. 11. Amendments. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Orange, State of California. 12. Notice. Any notice required to be given hereunder shall be made in writing and shall be given by (i) personal delivery, (ii) courier service that provides a receipt showing date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: City: Developer: City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 Attn: City Manager NewportHousing Partners, L.P. c/o Related/Newport Development Co., Inc. 18201 Von Karman Avenue, Suite 900 Irvine, CA 92612 Attn: Mr. William A. Witte and Las Palmas Foundation 7040 104-343 Carlsbad, CA 92009 Attn: Joseph M. Michaels Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed notices shall be effective on the earlier of receipt or Noon on the second business day following deposit in the United States mail. 1-TR/407405.2 4 • 13. Severability/Waiver/Integration. (a) Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. (b) Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. (c) Integration. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement. 14. Governing Law. This Agreement shall be governed by the laws of the State of California. 15. 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. 16. Recordation Against Leasehold Estate- Termination. This Agreement shall be recorded against the leasehold estate created under the Ground Lease as described in Attachment 2 attached hereto and shall not encumber fee title to the Site. This Agreement shall automatically terminate and shall be of no force or effect on the date that the Loan is repaid, as evidenced by the reconveyance of the deed of trust securing the Loan and encumbering Developer's leasehold interest under the Ground Lease. 17. Age Restriction for any Tenant Subject to Applicable Law. Notwithstanding any provision to the contrary in this Agreement all requirements for any Tenant to be sixty-two (62) years of age or older as provided in this Agreement shall be subject to all applicable laws, including Section 51.3 of the California Civil Code. IN WITNESS WHEREOF, the City and the Developer have executed this Agreement. [Signature Pages Attached] 1-TR/407405.2 Dated: November 1, 2004 APPR,OYBD AS TO FORM: Robin Clauson CITY ATTORNEY ATTEST: BY (44-71414....14 >41/42e719 LaVonne Harkless City Clerk 1-]R/407405.2 "CITY" CITY OF NEWPORT BEACH By: 'c- Tod W. Rid4Gay ;MAYOR By: S-1 Dated: November 1.2004 I-IR/407405.2 "DEVELOPER" NEWPORT HOUSING PARTNERS, L.P., a California limited liability partnership By: Related/Newport Development Co., LLC, a California limited liability company, General Partner By: The Nicholas Company, Inc., a Delaware corporation, General Manager By: William A. Witte, President By: Las Palmas Foundation a California nonprofit public benefit corporation, General Partner S-2 Jo 3 M. Michaels, Pre ident • STATE OF eel) i -(Or\ r q ) ) SS. COUNTY OF lJ can et On 2t0t1 1-by Aber 19i , before me, Li( Lax' a Notary Public, personally appeared 'w i Warn PtW i -k , ' --- , personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me thatO/she-executed the same in liis� = authorized capacit and that by hi /kef signature on the instrument the person, or the entity upon behf of whi h the person acted, executed the instrument. al seal. Notary Public i5 LEAVii1 _ ,'i[r;.'., . Commlubn # 1436563 !frit-25'21 No1ay Public - Catloma Orange County hyCaren, ExceesSep24.200 1-1R1407405.2 STATE OF 0gtC•grv,:a a, ) SS. COUNTY OF ( Tasty_ On it 7 3/W ( , before me, 3. l'ataan44 a Notary Public, personally appearedt . fin. v . tve`v'Anal% and , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she• executed the same in his/her authorized capacity, and that by his/hersignature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and. official seal. 2 otary Public 1-1U407405.2 s EENDVCCAS CommissionP7385087 z z "s,'- � Notary Public - Ca rornia j mil lms Angeles Counlyzeoe rAyC .ExpaeaJula- • STATE OF ekeIr Wtis" SS. COUNTY OF On d9,3 .100 , befpre me, ih kll 1. B 4; a Notary Public, personally appeared lOL) ' F&InVJk9 and , personally known to me (or proved to me on the basis of satisfactory evidence) to be the pe son whose name is scribed to the within instrument and acknowledged to me that ri she executed the same in er authorized capacity, and that by er signature on the instrument the person, or the entity upon behalf of which the person a'ed, executed the instrument. rl WITNESS my hand and official seal. Notary Public 1-1R/407405.2 LEILANI I. BROWN Commission# 1336673 z Notary Public - California Tf Orange County — o My Comm. Expires Jan 25,2008� ATTACHMENT 1 DESCRIPTION OF SITE [ATTACHED] 1-1R/407405.2 DESCRIPTION OF REAL PROPERTY Real Property in the City of Newport Beach, County of Orange, State of Califomia, described as follows: PARCEL 1, AS SHOWN ON EXHIBIT "B" ATTACHED TO LOT LINE ADJUSTMENT NO. LA 2003-11, RECORDED MARCH 19, 2004 AS INSTRUMENT NO. 2004000225274 OF OFFICIAL RECORDS. APN: 440-132-57 AND 440-132-58 NEW PORT SENIORS PAGE 1 OF 1 • M1/4). v'rmlewk ci DESCRIPTION OF LEASEHOLD ESTATE The leasehold estate as created by that certain unrecorded Ground Lease dated November 1, 2004, executed by The Irvine Company, a Delaware corporation, as lessor and Newport Housing Partners, L.P., a California limited partnership, as lessee, as disclosed by a Memorandum of Lease recorded in the Official Records of Orange County, California, concurrently herewith.