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
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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
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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
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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
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WITNESS my hand and. official seal. 2
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1-1U407405.2
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Notary Public
1-1R/407405.2
LEILANI I. BROWN
Commission# 1336673 z
Notary Public - California
Tf Orange County
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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
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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.