HomeMy WebLinkAboutC-6377(B) - Regulatory Agreement and Declaration of Covenants and RestrictionsCommonwealth Land Title Company
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Clerk
Re: Contract C-6377
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
11 111111111111 11 11111 1 1111 II I 11NO FEE
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2019000293008 8:00 am 08109119
65 402 Al2 11
0.00 0.00 0.00 0.00 30.00 0.00 0.000.000.00 0.00
Assessor's Parcel Number: 045-114-15 (Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code § 27383)
AMENDMENT NO. TWO TO REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
This AMENDMENT NO. TWO TO REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS ("Amendment") is made and
entered into this l5k day of August, 2019 ("Effective Date"), by and between the CITY OF
NEWPORT BEACH, a California municipal corporation and charter city ("City") and NEWPORT
VETERANS APARTMENTS, LP, a California limited partnership ("Developer").
RECITALS:
A. Developer is the owner of fee title to that certain real property more particularly
described in Exhibit "A", attached hereto and incorporated by reference herein. (the "Site").
B. City and Newport Veterans Housing, LP, a California limited partnership ("Initial
Developer") entered into that certain Regulatory Agreement and Declaration of Covenants and
Restrictions dated as of December 18, 2015, and recorded in the official records of the County of
Orange on December 22, 2015, as Document Number 2015000645086 (the "Initial Regulatory.
Agreement").
C. Initial Developer assigned all of its right, title and interest in, and' duties and
obligations under, the Initial Regulatory Agreement to Developer, Developer accepted such
assignment and assumed all of Initial Developer's right, title and interest in, and duties and
obligations under, the Initial Regulatory Agreement and City consented to such assignment and
assumption pursuant to that certain Affordable Housing Agreement and Joint Escrow Instructions
Assignment and Assumption Agreement dated as of June 28, 2017, and recorded in the official
records of Orange County on June 30, 2017, as Document'Number 2017000273545.
D. The Initial Regulatory Agreement was subsequently amended by that certain
Amendment to Loan Docs by and between City and Developer dated as of May 10, 2018, and
recorded in the official records of Orange County on May 15, 2018, as Document Number
2018000177099 (collectively with the Initial Regulatory Agreement the "Regulatory
Agreement").
Exempt from fee per GC 27388.1(a) (1);
fee cap of $225,00 reached,
-1-
Commonwealth Land Title Company
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Clerk
Re: Contract C-6377 C)� //iewl'
Assessor's Parcel Number: 045-114-15 (Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code § 27383)
AMENDMENT NO. TWO TO REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
This AMENDMENT NO. TWO TO REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS ("Amendment") is made and
entered into this M, day of August, 2019 ("Effective Date"), by and between the CITY OF
NEWPORT BEACH, a California municipal corporation and charter city ("City") and NEWPORT
VETERANS APARTMENTS, LP, a California limited partnership ("Developer").
RECITALS:
A. Developer is the owner of fee title to that certain real property more particularly
described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site").
B. City and Newport Veterans Housing, LP, a California limited partnership ("Initial
Developer") entered into that certain Regulatory Agreement and Declaration of Covenants and
Restrictions dated as of December 18, 2015, and recorded in the official records of the County of
Orange on December 22, 2015, as Document Number 2015000645086 (the "Initial Regulatory
Agreement").
C. Initial Developer assigned all of its right, title and interest in, and duties and
obligations under, the Initial Regulatory Agreement to Developer, Developer accepted such
assignment and assumed all of Initial Developer's right, title and interest in, and duties and
obligations under, the Initial Regulatory Agreement and City consented to such assignment and
assumption pursuant to that certain Affordable Housing Agreement and Joint Escrow Instructions
Assignment and Assumption Agreement dated as of June 28, 2017, and recorded in the official
records of Orange County on June 30, 2017, as Document Number 2017000273545.
D. The Initial Regulatory Agreement was subsequently amended by that certain
Amendment to Loan Docs by and between City and Developer dated as of May 10, 2018, and
recorded in the official records of Orange County on May 15, 2018, as Document Number
2018000177099 (collectively with the Initial Regulatory Agreement the "Regulatory
Agreement").
Exempt from fee per GC 21388.1 (a) (1);
fee cap of $225.00 reached.
-1-
E. City and Developer now wish to amend certain provisions of the Regulatory
Agreement.
AMENDMENT
NOW, THEREFORE, the Developer and City declare, covenant and agree, by and for
themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming
under or through them, that, commencing upon the Effective Date as follows:
Section 2.4 of the Regulatory Agreement entitled "Services" is amended to read as
follows:
"2.4 Services.
a. Services will be provided by Mercy House. A specific detailed
services plan shall be put together based on the needs of the tenants who live at the
Site. The Developer shall commit to providing services as required and in
compliance conditions of CTCAC. Services shall include at a minimum a Service
Coordinator or Other Services Specialist, as further defined herein. Service
Coordinator responsibilities shall include, but are not limited to: (a) providing
tenants with information about available services in the community, (b) assisting
tenants in accessing services through referral and advocacy, and (c) organizing
community -building and/or other enrichment activities for tenants (such as holiday
events, tenant council, etc.). Other Services Specialist shall provide individualized
assistance, counseling and/or advocacy to tenants, such as to assist them in
accessing education, securing employment, securing benefits, gaining skills or
improving health and wellness.
b. Additional services shall be provided by and in coordination with
the United States Department of Veterans Affairs ("VA"). Specifically, residents
participating in the Veterans Affairs Supportive Housing ("VASH") program shall
receive case management services that are included as part of the program."
2. Section 2.4 of the Regulatory Agreement entitled "Conversion of Units" is hereby
renumbered as Section 2.4.1 to read as follows:
"2.4.1 Conversion of Units. No part of the Project will at any time be owned by a
cooperative housing corporation, nor shall the Developer take any steps in
connection with the conversion to such ownership or uses to condominiums, or to
any other form of ownership, without the prior written approval of City which
approval may be given or withheld in its sole and absolute discretion."
3. Section 3.5 of the Regulatory Agreement entitled "Income Computation and
Certification" is hereby amended to read as follows:
"3.5(a) Immediately prior to an Eligible Tenant's occupancy of a Unit, Developer
shall obtain an Income Computation and Certification Form and the required third
party verification requested within the form required by CTCAC (the "CTCAC
-2-
Income Certification Form") from each such Eligible Tenant dated no more than
90 days prior to the date of initial occupancy in the Project by such Eligible Tenant.
Developer shall use good faith efforts to verify that the income provided by an
applicant is accurate by complying with any rules or regulations promulgated by
TCAC for doing so.
3.5(b) Developer shall maintain in its records each Income Computation and
Certification Form obtained pursuant to this section for a minimum of five (5)
years. Developer shall provide a copy of the CTCAC Income Certification Form,
third party source documentation of income and assets and a copy of the executed
lease to City annually upon request."
4. Section 3.10 of the Regulatory Agreement entitled "Maintenance of Records" is
hereby amended to read as follows:
"3.10(a) Developer shall maintain complete and accurate reports pertaining to the
Units.
3.10(b) Developer shall permit any duly authorized representative of the City, upon
twenty-four (24) hours prior notice and during business hours, to inspect the books
and records of Developer pertaining to the Project including, but not limited to,
those records pertaining to the occupancy of the Units."
The following is added as Section 3.15 entitled "VASH Subsidy" of the Regulatory
Agreement to read as follows:
"City recognizes and acknowledges that Developer has secured certain project
based rental assistance through the Veterans Affairs Supportive Housing
("VASH") program (the "VASH Subsidy"). Subject to Section 3.13 hereof, in the
event that the VASH Subsidy is terminated through no fault of Developer, the City
will allow an increase in the income limitation for any Units that were receiving
such rental assistance to sixty percent (60%) of Area Median Income and the
Restricted Unit Matrix shall be modified to reflect the same subject to the following
a. the net operating income for the Site is negative without the VASH Subsidy and
b. Developer demonstrates to the satisfaction of the City, which shall not be
unreasonably withhold or delayed, that Developer has used reasonable efforts to
first obtain a comparable replacement to the VASH Subsidy. This paragraph is
intended to ensure that the Project can continue to pay its operating expenses and
loan obligations in the event that the Rental Subsidy is terminated. Developer
agrees to submit to regular review by the City of the net operating income for the
Site. Upon neutral and/or net positive operating income for the Site, the Units that
were receiving the VASH Subsidy will revert back to thirty percent (30%) of Area
Median Income and the Restricted Unit Matrix shall be modified to reflect the
same."
6. Section 11.1 of the Regulatory Agreement is hereby amended to read as follows:
-3-
"a. With respect to (i) the physical condition of the Site, or (ii) Developer's
Gross Mismanagement of the Project, enter the Site and correct or cause to be
corrected said default;
b. The City may charge the costs thereof (including costs incurred by City in
enforcing this provision) to the account of Developer, which charge shall be due
and payable within thirty (30) calendar days after presentation by City of a
statement of all or part of said costs, and if such bill is not timely paid then to (A)
place a lien on the Site for said amount due plus interest at the maximum legal rate,
or (B) foreclose with respect to City's lien on the Site for said amount due plus
interest at the maximum legal rate;"
7. Section 11.5 of the Regulatory Agreement is hereby amended to read as follows:
"a. Terminate this Agreement by written notice to Developer, and
b. Seek repayment of any remaining principal and accrued interest then owing
on the City Note;"
8. Section 11.6 of the Regulatory Agreement is hereby amended to read as follows:
"With respect to a default for which foreclosure would be an available remedy,
exercise the right to foreclose provided the foreclosure does not interfere with a
senior lienholder's lien priority, or, during the period which is five (5) calendar
days prior to the foreclosure sale date, exercise the right to purchase the Project
from Developer, for a purchase price equal to the appraised value of the Site less
(i) the outstanding amount due under any senior indebtedness, (ii) the amount due
under the City Note, (iii) any delinquent taxes and assessments owing on the Site,
and (iv) any reasonable costs incurred by City to effect the curing of a default and
purchase of the Project, including but not limited to escrow fees and attorney's
fees;"
9. The second paragraph of Section 11.6 of the Regulatory Agreement is hereby
renumbered as Section 11.7 to read as follows:
"11.7 Except as otherwise expressly stated in this Agreement, the rights and
remedies of the parties are cumulative, and the exercise by any party of one or more
rights or remedies shall not preclude the exercise by it, at the same or different
times, of any other rights or remedies for the same default or any other default by
another party."
10. All other provisions of the Regulatory Agreement remain unchanged and in full
force and effect.
11. This Amendment 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.
[Signatures on Following Page]
IN WITNESS WHEREOF, the City and Developer have executed this Amendment to
Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized
representatives on the date first written hereinabove.
"CITY"
"DEVELOPER"
CITY OF NEWPORT BEACH, a California NEWPORT VETERANS APARTMENT,
municipal corporation and charter city LP, a California limited partnership
Dated: August _5, 2019 By: CDP Newport LLC,
A California limited liability company
Its: Administrative General Partner
By:
Gr4y. Leung By: Community Development Partners,
City anager A California corporation
Its: Managing Member
ATTEST:
Dated: August 4p, 2019
By:
ani I. rown
ity Cl
APPROVED AS TO FORM:
Dated: August r�, 2019
BJAaron
Harp
rney
Dated: August_, 2019
Signed In Counterpart
By:
Kyle Paine
Its: President
By: Mercy House CHDO, Inc.,
A California nonprofit public benefit
Corporation
Its: Managing General Partner
Dated: August _, 2019
By: Signed In Counterpart
rr�,i s{qQ A -k0 Ai -
Its: plw,-�?d"Se. de1,Vj
[END OF SIGNATURES]
-5-
IN WITNESS WHEREOF, the City and Developer have executed this Amendment to
Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized
representatives on the date first written hereinabove.
"CITY"
"DEVELOPER"
CITY OF NEWPORT BEACH, a California NEWPORT VETERANS APARTMENT,
municipal corporation and charter city LP, a California limited partnership
Dated: August 2019
IN
Signed In Counterpart
Grace K. Leung
City Manager
ATTEST:
Dated: August , 2019
By: CDP Newport LLC,
A California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
A California corporation
Its: Managing Member
Signed In Counterpart
By:
Leilani I. Brown By
City Clerk
APPROVED AS TO FORM:
Dated: August , 2019
Signed In Counterpart
Aaron C. Harp
City Attorney
Its
Dated: August 5 , 2019
By:
f-
KyIQLainj
Its: President
Mercy House CHDO, Inc.,
A California nonprofit public benefit
Corporation
Managing General Partner
Dated: August _, 2019
Signed In Counterpart
By:
Its: Pfteident
[END OF SIGNATURES]
-5-
lvli lc.�.
[Signatures on Following Page]
IN WITNESS WHEREOF, the City and Developer have executed this Amendment to
Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized
representatives on the date first written hereinabove.
"CITY"
"DEVELOPER"
CITY OF NEWPORT BEACH, a California NEWPORT VETERANS APARTMENT,
municipal corporation and charter city LP, a California limited partnership
Dated: August _, 2019 By: CDP Newport LLC,
A California limited liability company
Signed In Counterpart Its: Administrative General Partner
By:
Grace K. Leung
City Manager
ATTEST:
Dated: August _, 2019
By: Community Development Partners,
A California corporation
Its: Managing Member
Dated: August _, 2019
Signed In Counterpart
By:
Leilani I. Brown By:
City Clerk
APPROVED AS TO FORM:
Dated: August _, 2019
I=
Signed In Counterpart
Aaron C. Harp
City Attorney
Its:
an
Signed In Counterpart
Kyle Paine
Its: President
Mercy House CHDO, Inc.,
A California nonprofit public benefit
Corporation
Managing General Partner
Dated: August, 2019
By:
4MA
Kyle44yre , 5-fy ti.h y .. I Y.
Its: R*0440mt- Q 0krl—
[END OF SIGNATURES]
-5-
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.
STATE OF CALIFORNIA )
)ss.
COUNTY OF (Q(Z,tgr�j & E )
On AU&UST �Q 12019, before me, 3t-:tA a 1 FF -P... ANN M1.%LVEy , Notary Public,
(here insert name and title of the officer)
personally appeared CV _A c. _ K • l t;- V t---1 (. ,
who proved to me on the basis of satisfactory evidence to be the person(.} whose name(*} is/aye
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in
his�her/their authorized capacity(ies), and that by ki&/her/tkeir signature(--) on the instrument the
persor�4, or the entity upon behalf of which the person(.) 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.
WITNESS my
Signature
and officiRl seal.
A notary publicW other offichskmpleting 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
validitv of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF )
On , before me,
.• Je~ Wife A nnr Mulvey
. � COMM #2214138 a
LU Notary Public -California z
(seal) a ORANGE COUNT`!
YCommission Expires Oct 12,2021
(here insert name and title of the officer)
Notary Public,
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
I on
(seal)
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
of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF 012- t,4 t.7E )
On 8 •S 201 -,before me,<, ENtJ\FE2 YANt3 MVQVEH,Notary Public,
(here insert name and title of the officer)
personally appeared k`� �-C C1A PCSE PA t r -A E
who proved to me on the basis of satisfactory evidence to be the person( whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/may executed the same in
his/f=Abj i_r authorized capacity{ es), and that by his/her/thrir signature(} on the instrument the
person(s), 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.
WITNESS my hated official seal.
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.
STATE OF CALIFORNIA
)ss.
COUNTY OF
:.�Jenn fe A n Mulvey
as i�, COMM #2214138
(seal) �,� Notary Public • Callfornla ,
a ORANGE COUNTY -�
MyCommissionE.0"e VMI
On , before me, , Notary Public,
(here insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
M
(seal)
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.
STATE OF CALIFORNIA )
)ss.
COUNTY OF G, n )
On 1p 20) , before me,PWNXj { i (,- C.'auko� , Notary Public,
(he a insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person( whose name is axe
subscribed to the within instrument, and acknowledged to me thatJwW y executed the same
in laic/]0*4reir authorized capacity(ies), and that by.l4s,D/their signature(.s� on the instrument the
person($), or the entity upon behalf of which the person(@)^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.
WITNESSh and official seal.
Signature
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
of that document.
STATE OF CALIFORNIA
)ss.
COUNTY OF
P17ANALILIA CALESTI
0MMiSslon #F 2121926
(seal)�� Notary Public • Calffornia
Oranpa County
Comm. E it 29 2 1
On , before me, , Notary Public,
(here insert name and title of the officer)
personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
0
(seal)
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
All that certain real property situated in the County of Orange, State of California, commonly
known as 6001 Coast Boulevard and described as follows:
Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach,
County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of
Miscellaneous Maps, in the office of the County Recorder of said County.
EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a
depth shown below but with no right of surface entry, as provided in the deeds of record
Depth: 50 feet
EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a
depth shown below but with no right of surface entry, as provided in the deeds of record
Depth: 50 feet
EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a
depth shown below but with no right of surface entry, as provided in the deeds of record
Depth: 400 feet
Assessor's Parcel Number: 045-114-15
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Commonwealth Land Title Company
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Manager
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
ILIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIVIIIIIIIIIIIIIIIIIIIII NO FEE
*$ R 0 0 0 8 0 4 3 9 5 8$
2015000645086 4:20 pm 12122115
232 407 Al2 C39 M2 F14 43
0.00 0.00 0.00 0.00 126.00 0.00 0.00 0.00
f „ (Space Above This Line for Recorder's Office Use Only)
Q
(� zc (Exempt from Recording Fee per Gov. Code § 27383)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement") is made and entered into this I i day of bQU w,tW-y.
("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal
corporation and charter city ("City") and NEWPORT VETERANS HOUSING, LP, a California
limited partnership ("Developer").
RECITALS:
A. Developer is the owner of fee title to that certain real property more particularly
described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site").
B. Pursuant to an Affordable Housing Agreement entered into by and between
Developer and City, dated l ti-�tDkS (the "AHA"), City has agreed to provide
financial assistance to Developer in an amount up to One Million Nine Hundred Seventy Five
Thousand Dollars ($1,975,000.00) (the "City Loan") for the purpose of assisting Developer to
acquire the Site of an affordable rental apartment complex consisting of twelve (12) units (the
"Project"). The AHA requires Developer to enter into this Agreement, which provides, among
other requirements, that twelve (12) of the apartment units within the Project be rented to and
occupied by "Eligible Tenants" (as those terms are defined in Article 1.0 below). The AHA is
incorporated herein by reference.
C. Reference is also made to the following documents, of even date herewith:
(i) Note, by Developer as `Borrower" in favor of the City as lender ("City
Note"). The City Note evidences the City Loan.
(ii) Deed of Trust with Assignment of Rents, by and between Developer as
trustor and City as beneficiary, and recorded in the Official Records of the County of Orange
("City Deed of Trust"). The City Deed of Trust secures (a) repayment of the City Note, and (b)
performance of Developer's obligations hereunder, and under the AHA.
8821036753-0123
2765748.6 a12(16/15 -1-
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code § 27383)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement") is made and entered into this A �L day of
("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal
corporation and charter city ("City") and NEWPORT VETERANS HOUSING, LP, a California
limited partnership ("Developer").
RECITALS:
A. Developer is the owner of fee title to that certain real property more particularly
described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site").
B. Pursuant to an Affordable Housing Agreement entered into by and between
Developer and City, dated �-XCkW ,'A/ 9 Z lrs (the "AHA"), City has agreed to provide
financial assistance to Developer in an amount up to One Million Nine Hundred Seventy Five
Thousand Dollars ($1,975,000.00) (the "City Loan") for the purpose of assisting Developer to
acquire the Site of an affordable rental apartment complex consisting of twelve (12) units (the
"Project"). The AHA requires Developer to enter into this Agreement, which provides, among
other requirements, that twelve (12) of the apartment units within the Project be rented to and
occupied by "Eligible Tenants" (as those terms are defined in Article 1.0 below). The AHA is
incorporated herein by reference.
C. Reference is also made to the following documents, of even date herewith:
(i) Note, by Developer as `Borrower" in favor of the City as lender ("City
Note"). The City Note evidences the City Loan.
(ii) Deed of Trust with Assignment of Rents, by and between Developer as
trustor and City as beneficiary, and recorded in the Official Records of the County of Orange
("City Deed of Trust"). The City Deed of Trust secures (a) repayment of the City Note, and (b)
performance of Developer's obligations hereunder, and under the AHA.
882/036753-0123
2765748.6 a12/16/15 ' 1'
The AHA, the City Note and the City Deed of Trust are referred to herein collectively as
the "City Agreements." The City Agreements are incorporated herein as if fully set forth.
D. To assist Developer with rehabilitating the Project, Developer intends to apply for
an allocation of low income housing tax credits from the California Tax Credit Allocation
Committee (the "CTCAC") pursuant to pursuant to the Tax Credit Program (as defined below).
If Developer is awarded an allocation of Tax Credits Developer will be required to enter into a
regulatory agreement with TCAC (the "Tax Credit Regulatory Agreement") that will be recorded
in the Official Records of the County of Orange.
E. Pursuant to the City Agreements, Developer has agreed to acquire the Site and
thereafter maintain the Project with not fewer than twelve (12) units restricted to rental to and
occupancy by Eligible Tenants.
F. City and Developer now desire to place restrictions upon the use and operation of
the Site, in order to ensure that the Site shall be operated continuously as an affordable rental
apartment complex in accordance with the terms hereof until the expiration of the Term (as
defined below).
AGREEMENT:
NOW, THEREFORE, the Developer and City declare, covenant and agree, by and for
themselves, their heirs, executors, administrators, successors and assigns, and all persons
claiming under or through them, that, commencing upon the Effective Date as follows:
1.0
1.1 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person
or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or
under common control with Developer which, if Developer is a partnership or limited liability
company, shall include each of the constituent members or general partners, respectively,
thereof. The term "control" as used in the immediately preceding sentence means, with respect to
a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of
the voting rights attributable to the shares of the controlled corporation, and, with respect to a
person that is not a corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the controlled person.
1.2 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall
mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed
the maximum allowable rent allowed under the CTCAC to be charged by Developer and paid by
Eligible Tenants.
1.3 AMI. As used in this Agreement, the term "AMI" or "Area Median Income"
shall mean the median family income (adjusted for family size) for the Orange County area
established by the U.S. Department of Housing and Urban Development ("HUD").
1.4 Capital Improvements. As used in this Agreement, the term "Capital
Improvements" means all work and improvements with respect to the Site for which costs and
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expenses may be capitalized in accordance with generally accepted accounting principles as in
effect from time to time, consistently applied.
1.5 City. As used in this Agreement, the term "City" means the City of Newport
Beach, a California municipal corporation and charter city.
1.6 City Manager. As used in this Agreement, the term "City Manager" shall mean
the individual duly appointed to the position of City Manager of the City of Newport Beach, or
his or her authorized designee. Whenever an administrative action is required by City to
implement the terms of this Agreement, the City Manager, or his or her authorized designee,
shall have authority to act on behalf of City.
1.7 CTCAC. As used in this Agreement, "CTCAC" shall mean the California Tax
Credit Allocation Committee.
1.8 Eligible Tenant. As used in this Agreement, the term `Eligible Tenant" shall
mean a "Senior Household" or "Veteran Household", both as defined herein, whose annual
income does not exceed the thirty percent (30%), forty percent (40%) fifty percent (50%) or sixty
percent (60%) of the AMI level designated for the Unit to be occupied.
1.9 Manager's Unit. As used in this Agreement, the term "Manager's Unit" shall
mean a Unit occupied by an on-site property manager who is also an Eligible Tenant.
1.10 Operating Expenses. As used in this Agreement, the term "Operating Expenses"
shall have the meaning ascribed in the City Note.
1.11 Operating Income. As used in this Agreement, the term "Operating Income" shall
have the meaning ascribed in the City Note.
1.12 Qualified Tax Credit Investor. As used in this Agreement, the term "Qualified
Tax Credit Investor" shall mean any entity or entities experienced in investing in projects
financed with Tax Credits which acquires an interest in the owner of the Project and has the right
to receive Tax Credits.
1.13 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit
Matrix" shall mean that certain matrix attached hereto and incorporated herein as Exhibit "C".
This matrix requires the 12 one -bedroom Units at the project site to be the following: 6 Units at
30% AMI, 2 Units at 40% AMI, 3 Units at 50% AMI, and 1 Unit at 60%. This matrix
additionally requires that seven (7) Units be occupied by Veteran Households and five (5) Units
be occupied by Senior Households with a leasing preference for Veteran Senior Households..
1.14 Senior Household. As used in this Agreement, the term "Senior Household"
shall mean any household containing one or more persons who are 62 years of age or older and
meeting applicable provisions of California Civil Code Section 51.3 and the federal Fair Housing
Act.
1.15 Tax Credit Proms. As used in this Agreement, the term "Tax Credit Program"
shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue
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Code Section 42, California Health and Safety Code Sections 50199.4-50199.22, California
Revenue and Taxation Code Sections 12205, 12206, 17057.5, 17058, 23610.4, and 23610.5, and
applicable federal and State regulations.
1.16 Tax Credit Regulatorygreement. As used in this Agreement, the term "Tax
Credit Regulatory Agreement" shall have the meaning ascribed in Recital D of this Agreement.
1.17 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the
low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit
Program.
1.18 Term. As used in this Agreement, the term "Term" shall mean the period
commencing on the execution hereof, and terminating on the fifty-fifth (55`h) anniversary hereof
unless Developer is successful in obtaining an allocation of Nine Percent (9%) Tax Credits in
which case termination shall be on the fifty-fifth (55`h) anniversary of the recording of a Notice
of Completion for the rehabilitation described in the Scope of Work.
1.19 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental
apartment dwelling unit on the Site.
1.20 Veteran Household. As used in this Agreement, the term "Veteran Household"
shall mean any household which includes one or more persons who served in the active military,
naval, or air service of the United States, or as a member of the National Guard who was called
to and released from active duty or active service, for a period of not less than 90 consecutive
days or was discharged from the service due to a service connected disability within that 90 -day
period.
2.0 RESIDENTIAL RENTAL PROPERTY.
2.1 Construction of the Project on the Site. Developer shall acquire and rehabilitate
the Project on the Site in accordance with the City Agreements, including the Schedule of
Performance set forth in the AHA, for the purpose of providing the Units described herein and in
the City Agreements. The Project shall be owned, managed, and operated as a rental apartment
project, with each of the Units rented to and occupied by Eligible Tenants, as provided in this
Agreement.
2.2 Facilities. All of the Units in the Project shall contain facilities for living,
sleeping, eating, cooking and sanitation in accordance with this Agreement, the AHA, the City
Agreements, and all of the permits and approvals for the Project.
2.3 Residential Use. Without the City's prior written consent, which consent may be
given or withheld in its sole and absolute discretion, none of the Units in the Project will at any
time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity
house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park,
nor shall the Units be used as a place of business except as may otherwise be allowed by
applicable law.
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2.4 Services. Services will be provided by Mercy House A specific detailed services
plan shall be put together based on the needs of the tenants who live at the property. The
property shall commit to providing services as required and in compliance conditions of
CTCAC. Services shall include at a minimum a Service Coordinator or Other Services
Specialist, as further defined herein. Service Coordinator responsibilities shall include, but are
not limited to: (a) providing tenants with information about available services in the community,
(b) assisting tenants in accessing services through referral and advocacy, and (c) organizing
community -building and/or other enrichment activities for tenants (such as holiday events, tenant
council, etc.). Other Services Specialist shall provide individualized assistance, counseling
and/or advocacy to tenants, such as to assist them in accessing education, securing employment,
securing benefits, gaining skills or improving health and wellness.
Additional services shall be provided by and in coordination with the United States
Department of Veterans Affairs ("VA"). Specifically, residents participating in the Veterans
Affairs Supportive Housing ("VASH") program shall receive case management services that are
included as part of the program.
2.4 Conversion of Units. No part of the Project will at any time be owned by a
cooperative housing corporation, nor shall the Developer take any steps in connection with the
conversion to such ownership or uses to condominiums, or to any other form of ownership,
without the prior written approval of City which approval may be given or withheld in its sole
and absolute discretion.
2.5 No Preference. Except as set forth in Section 3.4 below, all of the Units will be
available for rental in accordance with the terms of this Agreement, and the Developer shall not
give preference to any particular class or group of Eligible Tenants in renting the Units in the
Project.
2.6 Liability of Developer. Developer and any manager it employs shall not incur
any liability under this Agreement as a result of fraud or intentional misrepresentation by a
tenant.
3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS.
Developer hereby represents, warrants, and covenants as follows:
3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of
this Agreement, the Units shall be continuously occupied or held vacant and available for
occupancy by Eligible Tenants in accordance with the Restricted Unit Matrix.
3.2 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant who
qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as
occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an
Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the
Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an
Eligible Tenant in compliance with the Restricted Unit Matrix. Any vacated Unit shall be held
vacant until re-leased to an Eligible Tenant. Developer shall take any or all of the following
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actions, as necessary, to locate Eligible Tenants for the Project: (i) notification to the City of the
available Unit; and (ii) advertisement of the available Unit in a newspaper of general circulation
in the City.
3.3 Manager's Unit. At all times one (1) unit will be occupied by an on-site property
manager who is also an Eligible Tenant.
3.4 Veteran Preference. In addition to the seven (7) Units restricted for Occupancy
by Veteran Households Developer agrees to the maximum extent permitted by applicable law, to
provide a preference in the leasing of all Units, throughout the Term, to Eligible Tenants that are
also Veteran Households.
3.5 Income Computation and Certification. Immediately prior to an Eligible Tenant's
occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form and
the required third party verification requested within the form required by CTCAC (the "CTCAC
Income Certification Form") from each such Eligible Tenant dated no more than 90 days prior to
the date of initial occupancy in the Project by such Eligible Tenant. Developer shall use good
faith efforts to verify that the income provided by an applicant is accurate by complying with any
rules or regulations promulgated by TCAC for doing so. Developer shall maintain in its records
each Income Computation and Certification Form obtained pursuant to this section for a
minimum of five (5) years. Developer shall provide a copy of the CTCAC Income Certification
Form, third party source documentation of income and assets and a copy of the executed lease to
City annually upon request.
3.6 Recertification. Within sixty (60) days prior to the first anniversary date of the
occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer
shall recertify the income of such Eligible Tenant by obtaining a completed Income
Recertification Form, in the form required by CTCAC. Developer shall provide a copy of the
Income Recertification Form, third party source documentation of income and assets and a copy
of the executed lease renewal to City annually upon request. If any completed Income
Recertification Form indicates that an Eligible Tenant is no longer qualified for a unit at the rent
level to which said Eligible Tenant's Unit is restricted such Unit shall still be deemed in
compliance with this Agreement so long as the next available Unit is rented at the original rent
level of said Eligible Tenant's Unit. Any such Unit shall continue to be in compliance with this
Agreement until such time as the Eligible Tenant's income exceeds 140% of AMI at which time
Developer shall take all legal action available to remove such tenant and rent the Unit to a new
Eligible Tenant.
3.7 Annual Report. The Developer shall file with the City an annual report no later
than sixty (60) days after the end of each fiscal year as established for the Project. The report
shall contain a certification by the Borrower as to such information as the City may then require
including, but not limited to, the following;
a. The fiscal condition of the Project, including a financial statement for the
previous fiscal year that includes a balance sheet and a profit and loss statement
indicating any surplus or deficit in operating accounts; a detailed itemized listing
of income and expenses; the amounts of any fiscal reserves and the total amount
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of Residual Receipts received.
b. The substantial physical defects in the Project, including a description of any
major repair or maintenance work undertaken or needed in the previous and
current fiscal years. Such statement shall describe what steps the Borrower has
taken in order to maintain the Project in a safe and sanitary condition in
accordance with applicable housing and building codes.
C. The occupancy of the Project indicating:
the verified income of each current household; and
ii.. the current rents charged each household and whether these rents include
utilities.
d. General management performance, including tenant relations and other relevant
information.
e. A summary of the information received from the recertification of tenants'
incomes.
f. Evidence that the insurance required by Section 7 below has been maintained.
3.8 Annual Operating Budget. The fiscal year for the Project shall commence on
January 1, and conclude on December 31. No later than sixty (60) days prior to the beginning of
each subsequent fiscal year of the Project, the Developer shall submit to the City a proposed
annual operating budget on a form provided by the City. The proposed annual operating budget
shall set forth the Developer's estimate of the Project's income, operating expenses and debt
service for the upcoming year, reserves, proposed rent adjustments, and a year-to-date operating
statement.
Developer shall operate the Project in accordance with the operating budget on
file with the City. Such budget shall show all anticipated income, debt service and expenses for
management, operations, reserves and maintenance for the first fiscal year or portion thereof
following initial occupancy.
3.9 Determination of Affordable Rent. All Units shall be rented at an Affordable
Rent in accordance with the Restricted Unit Matrix.
3.9.1 Adiustment of Rent. Rent may change as changes in the applicable gross
rent amounts, the income adjustments, or the monthly allowance for utilities and services
warrant. Any increase in rents is subject to the provisions of outstanding leases. Developer must
provide households occupying the Units not less than thirty (30) days prior written notice before
implementing any rent increase.
3.10 Maintenance of Records. Developer shall maintain complete and accurate records
pertaining to the Units, and shall permit any duly authorized representative of the City, upon
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twenty-four (24) hours prior notice and during business hours, to inspect the books and records
of Developer pertaining to the Project including, but not limited to, those records pertaining to
the occupancy of the Units.
3.11 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 the Unit, and that any
material misstatement in such certification (whether or not intentional) will be cause for
immediate termination of such lease. Each such lease shall also include the lease rider attached
hereto and incorporated herein as Exhibit "B" and shall state that occupation of the Unit is
subject to the income restrictions described in this Agreement.
3.12 Remedy For Violation of Rental Requirements.
3.12.1 It shall constitute a default for Developer to charge or accept for any Unit
rent amounts in excess of the amount provided for in Section 3.5 of this Agreement. In the event
that Developer charges or receives such higher rental amounts, Developer shall be required to
reimburse the tenant that occupied said Unit at the time the excess rent was received for the
entire amount of such excess rent received, provided that such tenant can be found following
reasonable inquiry. For purposes of this Section 3.12, "reasonable inquiry" shall include
Developer's review of information provided by the tenant as part of the tenant's application and
forwarding information provided by the tenant, and Participant's reasonable attempts to contact
the tenant and any other persons listed in either of such documents. If, after such reasonable
inquiry, Developer is unable to locate the tenant, Developer shall pay such sums to the City.
3.12.2 Except as otherwise provided in this Agreement, it shall constitute a
default for Developer to knowingly (or without investigation as required herein) initially rent any
Unit to a tenant who is not an Eligible Tenant. In the event Developer violates this Section, in
addition to any other equitable remedy City shall have for such default, Developer, for each
separate violation, shall be required to pay to City an amount equal to (i) the greater of (A) the
total rent Developer received from such ineligible tenant, or (B) the total rent Developer was
entitled to receive for renting that Unit, plus (ii) any relocation expenses incurred by City as a
result of Developer having rented to such ineligible person. The terms of this Section shall not
apply if Developer rents to an ineligible person as a result of such person's fraud or
misrepresentation.
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN THIS
SECTION 3.12 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASONABLE
APPROXIMATION OF THE ACTUAL DAMAGES THAT CITY WOULD SUFFER DUE TO
THE DEFAULTS BY DEVELOPER SET FORTH IN SECTIONS 3.12.1 THROUGH 3.12.2,
CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE
OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE
AMOUNTS TO THE RANGE OF HARM TO CITY AND ACCOMPLISHMENT OF CITY'S
PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO
ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE
ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR
INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.8 SHALL BE THE
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SOLE REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.12. IN PLACING
ITS INITIALS AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY
SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE
AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO
HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES
PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT.
DEVELOPER'S INITIALS: CITY'S INITIALS:
-(Y�- LD6
3.131 Tax Credit Regulatory Agreement. Notwithstanding anything contained in this
Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit
Program and there is a conflict between the requirements of the Tax Credit Program and the
provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall
prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide
for greater, lesser or different obligations or requirements shall not be deemed a conflict unless
the applicable provisions are inconsistent and could not be simultaneously enforced or
performed.
3.14 Inapplicability until the commencement of the Term. Notwithstanding anything
to the contrary contained herein, Developer shall not be bound by the requirements of this
Section 3.0 until the commencement of the Term.
4.0 MAINTENANCE.
4.1 Maintenance Obligation. Developer agrees to and shall maintain all interior and
exterior improvements, including landscaping, on the Site in a first class condition and repair
(and, as to landscaping, in a healthy condition) and in accordance with all of the permits and
approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations
of all federal, state, county, municipal, and other governmental agencies and bodies having or
claiming jurisdiction and all their respective departments, bureaus, and officials. Developer shall
make all repairs and replacements necessary to keep the improvements in good condition and
repair and shall promptly eliminate all graffiti and replace dead and diseased plants and
landscaping with comparable approved materials. In the event that Developer breaches any of
the covenants contained in this Section and Developer does not commence to cure such breach
within thirty (30) calendar days after written notice from City, and after commencing the cure to
diligently prosecute such cure to completion, then City, in addition to whatever other remedy it
may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site
and perform all acts and work necessary to protect, maintain, and preserve the improvements and
landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount
of the expenditures arising from such acts and work of protection, maintenance, and preservation
by City and/or costs of such cure which amount shall be promptly paid by Developer to City
upon demand.
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4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty
(30) calendar days after Developer's receipt of notice thereof, or if Developer fails to timely pay
other sums required to be paid to City under this Agreement when due (after notice and an
opportunity to cure, as set forth in Section 10 or Section 11 (as applicable)), the same shall be
deemed delinquent. Any and all delinquent amounts, together with reasonable attorney's fees,
shall be a lien and charge, with power of sale, upon the property interests of Developer, and the
rents, issues and profits of such property. City may bring an action at law against Developer to
pay any such sums or foreclose the lien against Developer's property interests. Any such lien
may be enforced by sale by the City following recordation of a Notice of Default of Sale given in
the manner and time required by law as in the case of a deed of trust; such sale to be conducted
in accordance with the provisions of Section 2924, et seg., of the California Civil Code,
applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other
manner permitted by law. No lien recorded by City pursuant to this Section 4.2 shall defeat or
render invalid the lien of any senior mortgage or deed of trust.
5.0 MANAGEMENT
5.1 Gross Mismanagement: Requirement to Replace Property Manager. In the event
of "Gross Mismanagement" (as that term is defined below) of the Project, City shall have the
authority to require that such Gross Mismanagement cease immediately, and further to require
the immediate replacement of the property manager. City shall provide written notice to
Developer of the event(s) of Gross Mismanagement occurring and Developer shall have five (5)
calendar days after receipt of such notice to commence to cure, correct, or remedy the event(s) of
Gross Mismanagement identified in the City's notice and to notify the City Manager of the steps
taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or
remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For
purposes of this Agreement the term "Gross Mismanagement" shall mean management of the
Project in a manner which materially violates the terms and/or intention of this Agreement to
operate an affordable rental housing complex of the highest standard, and shall include, but is not
limited to, the following:
5.1.1 During the Term, knowingly leasing a Unit to an ineligible tenant or
tenants whose income exceeds the prescribed levels;
5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels of
two (2) persons per bedroom without taking immediate steps to stop such overcrowding;
5.1.3 During the Term, knowingly allowing a tenant to sublease his or her Unit
at a rent that exceeds an Affordable Rent;
5.1.4 Failing to timely maintain the Project and the Site in the manner required
by this Agreement or failing to submit complete reports;
5.1.5 Failing to timely submit the reports as required by this Agreement;
5.1.6 Fraud in connection with any document or representation relating to this
Agreement or embezzlement of Project monies;
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5.1.7 Failing to timely evict any tenant who has materially violated the terms of
his or her lease or any other rules or regulations of the Property; and
5.1.9 Failing to fully cooperate with law enforcement in its attempts to maintain a
crime -free environment on the Site.
5.2 Qualified Manager. For the extent of the entire Term of this agreement the Property
shall be under management of a "Qualified Manager". For the purposes of this Agreement, the
term "Qualified Manager" shall mean an experienced property management company with a
reputation for honesty and integrity and who has not less than ten (10) years' experience in the
operation and management of first-class quality residential properties, and has the financial
ability to perform its obligations under a conventional management agreement.
5.3 Operation by the Qualified Manager. The Qualified Manager shall continuously
(except for reasonable interruption during repairs, maintenance or renovations and during any
delay caused by an event of Force Majeure) during the Term, diligently operate, or cause to be
operated, the Project in a first-class manner and as otherwise required by this Agreement.
Qualified Manager shall stock adequate working capital, operating equipment, and supplies.
5.4 Management. Developer agrees that at all times during the Term, the Property shall
be managed and operated by Qualified Manager. It shall not be deemed a default by Developer
under this Agreement if at any time during the Term is shall be determined that the then manager
of the Property is not a Qualified Manager so long as the applicable management agreement or
contract shall give the Developer the right to terminate said agreement and Developer shall
promptly take all reasonable steps to terminate said agreement and secure a Qualified Manager.
5.5 Capital Replacement Reserve. Developer shall, or shall cause the Property
Manager to, annually set aside an amount reasonably determined by Developer, or such
increased amount required by CTCAC into a capital replacement reserve account (the "Capital
Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used for Capital
Improvements.
As Capital Improvements become necessary, the Capital Replacement Reserve shall be
the first source of payment therefor.
The non-availability of funds in the Capital Replacement Reserve does not in any manner
relieve Developer of the obligation to undertake necessary capital repairs and improvements and
to continue to maintain the Site in the manner prescribed in this Agreement.
6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS.
6.1 Compliance With Laws. Developer shall comply with (i) all ordinances,
regulations and standards of the City, any regional governmental entity, the State of California,
and the federal government applicable to the Site; (ii) all rules and regulations of any assessment
district of the City with jurisdiction over the Site; and (iii) all applicable labor standards of
California law and federal law; and (iv) the requirements of California law and federal law with
respect to the employment of undocumented workers or illegal aliens.
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6.2 Indemnity. Developer shall save, protect, defend, indemnify and hold harmless
City and the City, in its own capacity, and all of the City's officers, officials, members,
employees, agents, and representatives (collectively, the "Indemnified Parties") from and against
any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without
limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without
limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and
remedial and response costs) (the foregoing are hereinafter collectively referred to as
"Liabilities") which may now or in the future be incurred or suffered by any of the Indemnified
Parties by reason of, resulting from, in connection with, or existing in any manner whatsoever as
a direct or indirect result of (i) Developer's placement on or under the Site of any Hazardous
Materials or Hazardous Materials Contamination, (ii) the escape, seepage, leakage, spillage,
discharge, emission or release from the Site occurring on or after the Effective Date of any
Hazardous Materials or Hazardous Materials Contamination, or (iii) any Liabilities incurred
under any Governmental Requirements relating to the acts described in the foregoing clauses (i)
and (ii).
For the purposes of this Agreement, unless the context otherwise specifies or requires, the
following terns shall have the meanings herein specified:
The term "Hazardous Materials" shall mean any substance, material, or waste which is or
becomes regulated by any local governmental authority, the City of Newport Beach, the County
of Orange, the State of California, a regional governmental authority, or the United States
Government, including, but not limited to, any material or substance which is (i) defined as a
"hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section
25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety
Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter
6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous
material," "hazardous substance," or "hazardous waste" under Section 25501 of the California
Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response
Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of
Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls,
(viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix)
designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C.
§ 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903) or (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. § 9601 et seg.
The term "Hazardous Materials Contamination" shall mean the contamination (whether
presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or
other elements on, in or of the Site by Hazardous Materials, or the contamination of the
buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a
result of Hazardous Materials at any time emanating from the Site.
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The term "Governmental Requirements" shall mean all past, present and future laws,
ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State
of California, the County of Orange, the City of Newport Beach, or any other political
subdivision in which the Site is located, and any other state, county, city, political subdivision,
agency, instrumentality or other entity exercising jurisdiction over the Site.
6.3 Duty to Prevent Hazardous Material Contamination. Developer shall take
commercially reasonable action to prevent the release of any Hazardous Materials into the
environment. Such precautions shall include compliance with all Governmental Requirements
with respect to Hazardous Materials. In addition, Developer shall install and utilize such
equipment and implement and adhere to such procedures as are consistent with the standards
generally applied by apartment complexes in Orange County, California as respects the
disclosure, storage, use, removal, and disposal of Hazardous Materials.
6.4 Obligation of Developer to Remediate Premises. Notwithstanding the obligation
of Developer to indemnify the Indemnified Parties pursuant to Section 6.2, Developer shall, at its
sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or
local governmental agency or political subdivision or any Governmental Requirements and (ii)
all actions necessary to make full economic use of the Site for the purposes contemplated by this
Agreement and the AHA, which requirements or necessity arise from the presence upon, about
or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination. Such
actions shall include, but not be limited to, the investigation of the environmental condition of
the Site, the preparation of any feasibility studies or reports and the performance of any cleanup,
remedial, removal or restoration work.
6.5 Environmental Inquiries. Developer, when it has received any notices of
violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and
desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when
Developer is required to report to any governmental agency any violation or potential violation
of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials
Contamination, shall concurrently notify the City Manager and provide to him/her a copy or
copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating
to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or abatement
orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and reports
filed or applications made pursuant to any Governmental Requirement relating to Hazardous
Materials and underground tanks, and Developer shall report to the City Manager, as soon as
possible after each incident, any unusual, potentially important incidents.
In the event of a responsible release of any Hazardous Materials into the environment,
Developer shall, as soon as possible after it becomes aware of the release, furnish to the City
Manager a copy of any and all reports relating thereto and copies of all correspondence with
governmental agencies relating to the release. Upon request of the City Manager, Developer
shall furnish to the City Manager a copy or copies of any and all other environmental
entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit
applications; permits and reports including, without limitation, those reports and other matters
which may be characterized as confidential.
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7.0 INSURANCE. Developer, for the term of this Agreement, shall procure and keep in full
force and effect or cause to be procured and kept in full force and effect for the mutual benefit of
Developer and City, insurance policies reasonably determined by City and commensurate with
industry standards for the area., that are attached hereto and incorporated herein by reference as
Exhibit "D."
8.0 OBLIGATION TO REPAIR.
8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance.
Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered
wholly or partly uninhabitable by fire or other casualty required to be insured against by
Developer, Developer shall, subject to the rights of any senior lenders, promptly proceed to
obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately
upon receipt of insurance proceeds, to promptly and diligently commence the repair or
replacement of the Project to substantially the same condition in which the Project is required to
be maintained pursuant to this Agreement, whether or not the insurance proceeds are sufficient to
cover the actual cost of repair, replacement, or restoration, and Developer shall complete the
same as soon as possible thereafter so that the Project can continue to be operated and occupied
as an affordable housing project in accordance with this Agreement. Subject to extensions of
time for "Enforced Delay" events (as defined in Section 22 of this Agreement) occurring after
the casualty event, in no event shall the repair, replacement, or restoration period exceed
eighteen (18) months from the date Developer obtains insurance proceeds, unless the City
Manager, in his reasonable discretion, approves a longer period of time. City shall cooperate
with Developer, at no expense to City, in obtaining any governmental permits required for the
repair, replacement, or restoration and, upon issuance of such permits City shall promptly release
control of any insurance proceeds within City's control.
If Developer fails to obtain insurance as required by this Agreement Developer shall be
obligated to reconstruct and repair any partial or total damage to the Project and improvements
located on the site in accordance with this Section 8.1.
8.2 Continued Operations. During any period of repair, Developer shall continue, or
cause the continuation of, the operation of the apartment complex on the Site to the extent
reasonably practicable from the standpoint of prudent business management.
8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance.
Subject to the rights of any senior lender, if the improvements comprising the Project are
completely destroyed or substantially damaged by a casualty for which Developer has not
insured against, then Developer shall not be required to repair, replace, or restore such
improvements and may elect not to do so by providing City with written notice of election not to
repair, replace, or restore within ninety (90) calendar days after such substantial damage or
destruction. In such event, (i) Developer shall remove all debris from the Site; (ii) this
Agreement shall automatically terminate and City shall cooperate to remove it from title; and
(iii) the City, at its option, may compel the Developer to sell the Project pursuant to the terms of
the City Deed of Trust subject to the rights of any senior lien holders and recover any amounts
provided under this Agreement. Alternatively, City may repair the improvements comprising the
Project and recover the costs of said improvements from Developer. As used in this Section 8.3,
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"substantial damage" shall mean damage or destruction which is fifty percent (50%) or more of
the replacement cost of the improvements comprising the Project. In the event Developer does
not timely elect not to repair, replace, or restore the improvements as set forth in the first
sentence of this Section 8.3, Developer shall be conclusively deemed to have waived its right not
to repair, replace, or restore the improvements and thereafter Developer shall promptly
commence and complete the repair, replacement, or restoration of the damaged or destroyed
improvements in accordance with Section 8.1 above and continue operation of the apartment
complex during the period of repair (if practicable) in accordance with Section 8.2 above.
9.0 LIMITATION ON TRANSFERS.
The qualifications and identity of the Developer are of particular interest to the City. It is
because of these qualifications and identity that the City has entered into the AHA and this
Agreement with the Developer. Consequently, no person, whether a voluntary or involuntary
successor of Developer, shall acquire any rights or powers under this Agreement nor shall the
Developer assign all or any part of this Agreement or the Site without the prior written approval
of the City. A voluntary or involuntary sale or transfer of a controlling interest in the Developer
or the Site during the term of this Agreement shall be deemed to constitute an assignment or
transfer for the purposes of this Article 9.0, and the written approval of the City shall be required
prior to effecting such an assignment or transfer. Furthermore, any transaction by which
Developer undergoes a merger or other reorganization, including a sale of all or substantially all
of its assets, wherein Developer is not the surviving corporation (or the stock holders of
Developer immediately before the merger or reorganization do not retain control of the surviving
corporation) shall be deemed, for purposes of the foregoing, a transfer of this Agreement. If
Developer is or becomes a publicly traded entity, any sale or other transfer of any outstanding
stock of, or limited partnership interests in. Developer shall not be deemed an assignment within
the meaning of this Article 9.0 unless said sale or other transfer is made by a person or entity
owning a controlling interest in Developer and results in a change in the person(s) or entity(ies)
having control of Developer. Any purported transfer, voluntarily or by operation of law, except
with the prior written consent of the City, shall be null and void. During the tern of this
Agreement the Developer shall not, except as permitted by this Agreement, assign or attempt to
assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer,
conveyance, or assignment of the whole or any part of the Site or any of the improvements
thereon, without the prior written approval of the City. The consent by City to any transfer,
conveyance, or assignment shall not constitute a waiver of the necessity for such consent to any
subsequent transfer, conveyance, or assignment. This prohibition against assigning shall be
construed to include a prohibition against any sale, hypothecation, transfer of possession, or any
assignment or subleasing by operation of law or otherwise. City shall be deemed to be reasonable
in not granting its consent if the proposed purchaser, transferee, or assignee fails to meet all of
the following criteria:
a. the proposed purchaser, transferee, or assignee, or, if the proposed purchaser,
transferee, or assignee is a wholly owned subsidiary, its parent, or the constituent general
partners of the proposed purchaser, transferee, or assignee shall have a net worth at least equal to
the greater of (i) Ten Million Dollars ($10,000,000.00) (increased each five (5) years from the
Commencement Date by the percentage of any increase over such period in the Consumer Price
Index for All Urban Consumers, Los Angeles -Riverside -Orange County, CA, All Items,
published by the Bureau of Labor Statistics, Department of Labor), or (ii) ten percent (10%) of
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the fair market value of the Project. The successor or most nearly comparable index published by
some other brand or department of the United States Government shall be used if said Bureau
shall cease to publish the Consumer Price Index. For purposes of determining the fair market
value of the Project, such value shall be conclusively determined by the purchase price to be paid
by the proposed purchaser, transferee, or assignee;
b. the proposed purchaser, transferee, or assignee shall either be a Qualified
Manager or, if the proposed purchaser, transferee, or assignee is not a Qualified Manager, shall
have entered into a binding agreement with a Qualified Manager, to manage the Project, it being
acknowledged herein that continued management of the Project by a Qualified Manager is an
affirmative obligation of Developer hereunder; and
C. the proposed purchaser, transferee, or assignee (or, with respect to a transfer of a
Controlling interest under Article 9.0, the person or entity acquiring such Controlling interest)
shall have a reputation for honesty, integrity and sound business practices.
Notwithstanding any other provision of this Agreement to the contrary, City approval of
an assignment of this Agreement or transfer of the Site, or any interest therein, shall not be
required in connection with:
a. the conveyance or dedication of any portion of the Site to the City, or other
appropriate governmental agency, including public utilities, where the granting of such
conveyance or easement permits or facilitates the development of the Project on the Site; or
b. any assignment of this Agreement or transfer of the Site, or any of the
improvements located thereon, to an entity owned and controlled by Developer or the principals
of Developer, including without limitation a limited partnership in which the Developer or an
Affiliate of the Developer is a general partner;
C. any assignment of the limited partner interests in Developer to an entity owned
and controlled by Developer;
d. any mortgage, deed of trust, sale and leaseback, or other form of conveyance
required for any reasonable method of financing or refinancing the development of the Project on
the Site that is contemplated in the Project Budget attached to the AHA or has otherwise been
approved by the City Manager, including all direct and indirect costs related thereto;
e. transfers resulting from the death or mental or physical incapacity of an
individual;
f. transfers in trust for the benefit of a spouse, children, grandchildren, or other
family member, or for charitable purposes;
g. transfers of less than a controlling interest of stock in a publicly -held corporation
or of the beneficial interest in any publicly -held partnership or real estate investment trust;
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h. the admissions of the Qualified Tax Credit Investor to Developer or to a limited
partnership in which the Developer or an Affiliate of the Developer is a general partner as a
limited partner thereof;
i. the transfer by the Qualified Tax Credit Investor to an entity that is an affiliate of
the Qualified Tax Credit Investor; and
j. the removal by the Qualified Tax Credit Investor of the general partner for a
default under the partnership agreement, provided the replacement general partner is reasonably
satisfactory to City.
Notwithstanding anything in this Section 1.5 to the contrary, any transfer or assignment
by Developer or any successor in interest to Developer not requiring the approval by City shall
be effective when made but shall not be deemed to relieve Developer or any successor party
from its obligations under this Agreement unless and until the transferor and transferee execute
and deliver to City, and City acknowledges in writing, an assignment and assumption agreement.
Any transfer or assignment by Developer or any successor in interest to Developer requiring the
approval by City pursuant to this Section 1.5 shall be effective and shall be deemed to relieve
Developer or any successor party from its obligations under this Agreement only upon execution
and delivery to the City by the transferor and transferee of an assignment and assumption
agreement in a form and with content reasonably acceptable to City.
This Article 9.0 shall not be applicable to the leasing of individual Units to Eligible
Tenants in accordance with this Agreement, and no assignment and assumption agreement shall
be required in connection therewith.
10.0 EVENTS OF DEFAULT BY DEVELOPER.
Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one
or more of any of the following events shall constitute an "Event of Default' by Developer
hereunder if Developer shall have not cured, corrected, or remedied such failure within, unless a
shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty
(30) calendar days following the service on Developer of a written notice from City specifying
the failure complained of, or if it is not practicable to cure or remedy such failure within such
thirty (30) calendar day period (which impracticality shall not apply to monetary defaults),
within such longer period as shall be reasonable under the circumstances provided that
Developer has commenced to cure within the same thirty (30) day period and has diligently
prosecuted such cure to completion:
10.1 Developer shall abandon or surrender the Site; or
10.2 Developer is in default of the City Note and has not cured such default within the
cure period applicable to such default as set forth in the City Note; or
10.3 Developer is in default of any of the covenants, terms or provisions of this
Agreement or any of the City Agreements; or
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10.4 Developer voluntarily files or has involuntarily filed against it any petition under
any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60)
calendar days thereafter; or
10.5 Developer is adjudicated a bankrupt; or
10.6 Developer makes a general assignment for the benefit of creditors in violation of
the terms of this Agreement or any of the City Agreements.
10.7 Developer is in default, beyond any applicable cure period, of any of the
following: (i) any senior indebtedness encumbering the Site, (ii) the Tax Credit Regulatory
Agreement, and the other party has not waived the default.
10.8 Developer has not maintained insurance as required by Section 7.0 hereof.
109 Developer fails to commence or complete the applicable Scope of Work within
the time periods required by the AHA.
Notwithstanding anything herein to the contrary, whenever the City shall deliver any
notice or demand to the Developer with respect to any breach or default by the Developer of the
terms hereunder, the City shall at the same time deliver a copy of such notice or demand to the
Qualified Tax Credit Investor, if there is one. The Qualified Tax Credit Investor (insofar as the
rights of the City are concerned) shall have the right, at its option, within thirty (30) calendar
days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such
default. Such cure period shall run concurrently with the Developer's cure period described in
this Article 10.0.
11.0 REMEDIES OF CITY.
In the event Developer defaults in the performance or observance of any covenant,
agreement or obligation of Developer pursuant to this Agreement, and if such default remains
uncured for a period of thirty (30) calendar days after written notice thereof shall have been
given by City (or such lesser period as may apply under Section 4.1), or, in the event said default
cannot be cured within said time period, Developer has failed to commence to cure such default
within the applicable time period and diligently prosecute said cure to completion, then City may
declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or
more of the following steps:
11.1 With respect to (i) the physical condition of the Site, or (ii) Developer's Gross
Mismanagement of the Project, enter the Site and correct or cause to be corrected said default
and charge the costs thereof (including costs incurred by City in enforcing this provision) to the
account of Developer, which charge shall be due and payable within thirty (30) calendar days
after presentation by City of a statement of all or part of said costs, and if such bill is not timely
paid then to (A) place a lien on the Site for said amount due plus interest at the maximum legal
rate, or (B) foreclose with respect to City's lien on the Site for said amount due plus interest at
the maximum legal rate;
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11.2 Correct or cause to be corrected said default and pay the costs thereof (including
costs incurred by City in enforcing this provision) from the proceeds of any insurance;
11.3 Exercise its right to maintain any and all actions or proceedings at law or suits in
equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a
result thereof, including without limitation exercise of City's rights under the City Deed of Trust;
11.4 Have a receiver appointed to take possession of Developer's interest in the Site,
with power in said receiver to administer Developer's interest in the Site, to collect all funds
available to Developer in connection with its operation and maintenance of the Site, and to
perform all other actions consistent with Developer's obligations under this Agreement as the
court deems proper;
11.5 Terminate this Agreement by written notice to Developer and seek repayment of
any remaining principal and accrued interest then owing on the City Note;
11.6 With respect to a default for which foreclosure would be an available remedy,
exercise the right to foreclose, or, during the period which is five (5) calendar days prior to the
foreclosure sale date, exercise the right to purchase the Project from Developer, for a purchase
price equal to the appraised value of the Site less (i) the outstanding amount due under any senior
indebtedness, (ii) the amount due under the City Note, (iii) any delinquent taxes and assessments
owing on the Site, and (iv) any reasonable costs incurred by City to effect the curing of a default
and purchase of the Project, including but not limited to escrow fees and attorney's fees.
Except as otherwise expressly stated in this Agreement, the rights and remedies of the
parties are cumulative, and the exercise by any party of one or more of its rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by another party.
12.0 NONDISCRIMINATION.
Developer covenants by and for itself and any successors in interest that there shall be no
discrimination against or segregation of any person, or group of persons on any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in
Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any
person claiming under or through him or her, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof. The
foregoing covenants shall run with the land.
Developer agrees for itself and any successor in interest that Developer shall refrain from
restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on
the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any
person. All such deeds, leases or contracts shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
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i) In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person or group
of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed, nor shall the grantee or any person claiming under or through him or her, establish or
permit any practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land."
ii) In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions: "That there shall be no discrimination against or segregation of any person or group
of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee himself or herself, or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased."
iii) In contracts: "There shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises which are the subject of this agreement, nor shall the grantee or any
person claiming under or through him or her, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land."
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, its successors
and assigns, the City and any successor in interest to the Site, together with any property
acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants
against discrimination shall remain in effect in perpetuity.
13.0 COVENANTS TO RUN WITH THE LAND.
Developer hereby subjects the Site to the covenants, reservations, and restrictions set
forth in this Agreement. City and Developer hereby declare their express intent that all such
covenants, reservations, and restrictions shall be deemed covenants running with the land, and
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shall pass to and be binding upon the Developer's successors in title to the Site; provided,
however, that on the termination of this Agreement said covenants, reservations and restrictions
shall automatically expire. All covenants established in this Agreement shall, without regard to
technical classification or designation, be binding for the benefit of the City, and such covenants
shall run in favor of the City for the entire term of this Agreement, without regard to whether the
City is or remains an owner of any land or interest therein to which such covenants relate. Each
and every contract, deed or other instrument hereafter executed covering or conveying the Site or
any portion thereof shall conclusively be held to have been executed, delivered and accepted
subject to such covenants, reservations, and restrictions, regardless of whether such covenants,
reservations, and restrictions are set forth in such contract, deed or other instrument.
City and Developer hereby declare their understanding and intent that the burden of the
covenants set forth herein touch and concern the land in that Developer's legal interest in the Site
is rendered less valuable thereby. City and Developer further hereby declare their understanding
and intent that the benefit of such covenants touch and concern the land by enhancing and
increasing the enjoyment and use of the Project by Eligible Tenants, the intended beneficiaries of
such covenants, reservations, and restrictions, and by furthering the public purposes for which
the City was formed.
Developer, in exchange for the City entering into the AHA, hereby agrees to hold, sell,
and convey the Site subject to the terms of this Agreement. Developer also grants to the City the
right and power to enforce the terms of this Agreement against the Developer and all persons
having any right, title or interest in the Site or any part thereof, their heirs, successive owners and
assigns.
The covenants set forth in this Agreement shall remain in effect until the expiration of the
Term.
14.0 INDEMNIFICATION.
Developer agrees for itself and its successors and assigns to indemnify, defend, and hold
harmless the Indemnified/Released Parties from and against any loss, liability, claim, or
judgment relating in any manner to the Project excepting only any such loss, liability, claim, or
judgment arising out of the intentional wrongdoing or gross negligence of any of the
Indemnified/Released Party.
15.0 UTILITIES AND TAXES.
Developer shall remain fully obligated for the payment of (i) real and personal property
taxes and assessments in connection with the Site, and (ii) all charges for all utilities serving the
Site for which the tenants of the Units are not responsible.
16.0 NO ATTORNEYS' FEES.
In the event that a party to this Agreement brings an action against the other party hereto
by reason of the breach of any condition, covenant, representation or warranty in this Agreement,
or otherwise arising out of this Agreement, the prevailing party in such action shall not be
entitled to recover from the other party its attorney's fees and costs, including expert witness
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fees, any attorney's fees on any appeal, and all other costs for investigating such action,
including the conducting of discovery.
17.0 AMENDMENTS.
The Developer and the City agree to mutually consider reasonable requests for
amendments to this Agreement which may be made by either of the parties hereto, or lending
institutions, provided such requests are consistent with this Agreement and would not
substantially alter the basic business terms included herein. The City Manager shall have the
authority to approve, on behalf of the City, amendments to this Agreement that would not
substantially alter the basic business terms or substantially increase the risk or cost to the City.
All other amendments shall require the action of the City Council. All amendments, including
those authorized to be approved by the City Manager, shall be in writing and shall be signed by
authorized representatives of City and Developer.
18.0 NOTICE.
Formal notices, demands, and communications between City and Developer shall be
sufficiently given if (i) personally delivered, (ii) delivered by a reputable same-day or overnight
courier services that provides a receipt showing date and time of delivery, (iii) delivered by
United States mail, registered or certified, postage prepaid, return receipt requested, or (iv)
delivered by facsimile transmission, provided the original of the faxed communication is
delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of
the foregoing. Delivery shall be made to the following addresses:
City of Newport Beach
To City 100 Civic Center Drive
Newport Beach, California 92660
Attn: City Manager
With a copy to: City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: Community Development Director
Newport Veterans Housing LP
To Borrower: c/o Community Development Partners
3416 Via Oporto, Suite 301
Newport Beach, CA 92663
Attn: Eric A. Paine
With a copy to: Law Offices of Patrick R. Sabelhaus
1006 Fourth Street, Sixth Floor
Sacramento, CA 95814
Attn: Stephen A. Strain, Esq.
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Notices that are personally delivered, delivered by messenger/courier, or by fax (provided
there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt.
Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the
addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States
Postal System in the manner described in this Section. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as a party may from
time to time designate by mail.
19.0 NONLIABILITY OF CITY OFFICIALS.
No officer, official, member, employee, agent, or representative of the City shall be
personally liable to Developer, or any successor in interest to Developer, in the event of any
default or breach by City or for any amount which may become due to Developer or successor or
on any obligations under the terms of this Agreement or any of the City Agreements.
20.0 TRANSACTIONS WITH AFFILIATES.
Developer shall have the right to enter into contracts with subsidiaries, affiliates and other
related entities for the purpose of providing cleaning, maintenance and repair services, insurance
policies and other purposes related to the operation of the Site, provided that all such costs and
charges are competitive with the costs, charges, rent and other sums which would be paid by or
to, as the case may be, an unrelated third party. City acknowledges and agrees that Developer
may act as its own general contractor or may engage a third party licensed contractor for the
construction of any improvements on the Site and that will be entitled in so doing to earn a
commercially reasonable fee.
21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION: ENTIRE
AGREEMENT.
21.1 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.
21.2 Waiver. All waivers of the provisions of this Agreement, unless specified
otherwise herein, must be in writing and signed by the appropriate authorities of City or
Developer, as applicable. No delay or omission by either party hereto in exercising any right or
power accruing upon the compliance or failure of performance by the other party hereto under
the provisions of this Agreement shall impair any such right or power or be construed to be a
waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions
or agreements hereof to be performed by the other party shall not invalidate this Agreement nor
shall it be construed as a waiver of any succeeding breach of the same or other covenants,
agreements, restrictions or conditions hereof.
21.3 Integration. This Agreement contains the entire Agreement between the parties
concerning the subject matter hereof and neither party relies on any warranty or representation
not contained in this Agreement.
882/036753-0123
2765748.6 a12/16/15 -23-
21.4 Interpretation. The terms of this Agreement shall be construed in accordance with
the meaning of the language used and shall not be construed for or against either party by reason
of the authorship of this Agreement or any other rule of construction that might otherwise apply.
21.5. Entire Agreement. This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements
between the parties or their predecessors -in -interest with respect to all or any part of the subject
matter hereof.
22.0 ENFORCED DELAY; EXTENSIONS OF TIME.
Performance by a party hereunder shall not be deemed to be in default where delays or
defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires;
casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions;
freight embargoes; lack of transportation; governmental restrictions or priority litigation;
unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other
party; acts or the failure to act of a public or governmental agency or entity (except that acts or
the failure to act of City shall not excuse performance by City unless the act or failure is caused
by the acts or omissions of Developer); or any other causes beyond the reasonable control or
without the fault of the party claiming an extension of time to perform. In the event of such a
delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable
diligence to minimize the period of the delay. An extension of time for any such cause shall be
limited to the period of the Enforced Delay, and shall commence to run from the time of the
commencement of the cause, provided notice by the party claiming such extension is sent to the
other party within fifteen (15) calendar days after the sending party has knowledge, or should
have obtained knowledge, of the commencement of the cause. Times of performance under this
Agreement may also be extended by mutual written agreement by City and Developer. The City
Manager shall also have the authority on behalf of City to administratively approve extensions of
time.
23,0 GOVERNING LAW.
This Agreement shall be governed by the internal laws of the State of California without
regard to conflict of law principles.
24.0 NO MERGER.
The covenants, terms, and provisions of this Agreement shall not merge with any grant
deed or other instrument pertaining to the conveyance of any interest in real property.
25.0 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.
[Signatures on Following Page]
882/036753-0123
2765748.6 a12/16/15 -24-
IN WITNESS WHEREOF, the City and Developer have executed this Regulatory
Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on
the date first written hereinabove.
Dated: 12015
Dated: ✓-a- le , 2015
Dated: 17� / f T
"CITY"
CITY OF NEWPORT BEACH, a California
municipal corpor tion and arter city
By:
Edwar . Selich
Mayor
ATTEST:
APPROVED TO FORM:
2015 By:
((.r)
Aaron C. Harp 4AM M1wIK
City Attorney
882/036753-0123
2765748.6 aIM 6/15 -25-
"DEVELOPER"
NEWPORT VETERANS HOUSING LP,
a California limited partnership
By: CDP Newport LLC,
a California limited liability
Dated: \ Z \ 12015 company
Its: Administrative General Partner
By: Community
Development Partners,
a California corporation
Its: Sole Managing Member
By:
Eric Paine
Its: CEO
By: Mercy House Living Centers,
a California nonprofit public benefit
corporation
Its: Managing General Partner
By: \4/z
L4KHaynes
Its: President
882/036753-0123
2765748.6 a12/16/15 -26-
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
of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF
On Decal, bcr 1 xo IS , before me,£i4 c_Po�ia I rm W i ngtr Notary Public,
(here insert name and title of theoffices er)
personally appeared Eric PuinC
who proved to me on the basis of satisfactory evidence to be the person(4 whose name(c)spare
subscribed to the within instrument and acknowledged to me that(/she/they executed the same
in i ✓her/their authorized capacity(i5A), and that by ti /her/their signatureVon the instrument the
person(A, or the entity upon behalf of which the person(p�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.
WITNESS nly hand and official seal.
SignatureJ:� !Ye —
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
of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF
TIM INIRRER
tiomnYaion i 2099074
Z
mrn• Explm Feb9 2019
On Dr` c_ 11_, . 2 u 1 S before me, jC iV tV r r r2 1\Ivty Notary Public,
(here insert name and title of the officer)
personally appeared D. S E �- t c H
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/shG4h@5 executed the same
in his/herAhcir authorized capacity(ies), and that by his/herAheil signature(s) on the instrument the
person(s3, 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.
WITNESS my han and official seal.
Signature
882/03675M123
2765748.6 al2/16/15 -27-
(seal)
JENNIFER ANN MUWEY
COmm15a10n # 2045022
Z "� Notary Public • California
Orange County
My Comm Expinut Oct 12 2017 1p
'
ACKNOWLEDGMENT
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.
State of California
County of Orange
On Oecaa ber 1$, 2,015 before me, Tim Winger, Notary Public
(insert name and title of the officer)
personally appeared 1mr-P q itagnC.S
who proved to me on the ba§is of satisfactory evidence to be the person(.51 whose name(j( /are
subscribed to the within instrument and acknowled ed to me that 'she/they executed the same in
i&her/their authorized capacity(iA, and that by&her/their signature(4on the instrument the
person(A, or the entity upon behalf of which the person(! j 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.
TIM bn *20YYI# 20
WITNESS my hand and official seal. COIN 810
Y-CNMwma
Qru p CW*
Comm. lZral FM 6 2019
Signature (Seal)
T
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
All that certain real property situated in the County of Orange, State of California, commonly
known as 6001 Coast Boulevard and described as follows:
Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach,
County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of
Miscellaneous Maps, in the office of the County Recorder of said County.
EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a
depth shown below but with no right of surface entry, as provided in the deeds of record
Depth: 50 feet
EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a
depth shown below but with no right of surface entry, as provided in the deeds of record
Depth: 50 feet
EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a
depth shown below but with no right of surface entry, as provided in the deeds of record
Depth: 400 feet
Assessor's Parcel Number: 045-114-15
882/036753-0123
2765748.6 al2/08/15 -27-
EXHIBIT `B"
LEASE RIDER
[See following page]
882/036753-0123
2765748.6 a12/08/15 -28-
COMMUNITY DEVELOPMENT PARTNERS AFFORDABLE HOUSING PROJECT
Lease Rider
RESIDENT:
(if there is more than one adult occupant, each person must sign the rider)
LEASE DATE:
UNIT NO.:
The undersigned tenant(s) hereby certify and agree as follows:
1. Income Certification. The attached income certification is true, correct and complete. I/we
agree to provide a similar certification annually upon request during the term of my
occupancy.
2. Employer Verification. The landlord or property manager has my permission to verify
my/our income from any sources of income Uwe receive.
3. False Statements. If the income certification and/or lease application submitted by me/us is
false, or if Uwe fail to provide annual certifications, the landlord or property manager will
have the right to terminate my/our lease and recover possession of my/our unit. Uwe
understand that the landlord and property manager are relying on this income certification
and the related third -party income and asset verifications in accepting me/us as a tenant, and
the landlord or property manager will be seriously harmed if my/our income does not qualify
the unit for the affordable housing program.
4. This rider shall be considered as part of my/our lease.
Date:
Tenant
Tenant
Tenant
Tenant
882/036753-0123
2765748.6 al2/08/15 —1-
TENANT INCOME CERTIFICATION
❑ Initial Certification ❑ Recertification ❑ Other
Effective Date:
Move -In Date:
(mm-nn_vvvvi
PART I- DEVELOPMENT DATA
Property Name: County: TCAC# CA- BIN #:
Address: Unit Number: # Bedrooms: Square Footage:
PART II. HOUSEHOLD COMPOSITION
Cl Vacant (Check if unit was vacant on December 31 of the Effective Date Year)
HH
Mbr #
Last Name
First Name
Middle
Initial
Relationship to Head
of Household
Date of Birth
(MM/DD/YYYY)
F/T Student
(Y or N)
Last 4 digits of
Social Security #
1
HEAD
2
3
4
5
6
7
PART III. GROSS ANNUAL INCOME (USE ANNUAL AMOUNTS)
HH (A)
Mbr # Employment or Wages
(B) (C)
Soc. Security/Pensions Public Assistance
(D)
Other Income
TOTALS $
$ $
$
Add totals from (A) through (D), above TOTAL INCOME (E):
$
PART W. INCOME FROM ASSETS
HH (F) (G) (H)
Mbr # Type of Asset C/I Cash Value of Asset
(I)
Annual Income from Asset
TOTALS: $
Enter Column (H) Total Passbook Rate
If over $5000 $ X 0.06% _ (J) Imputed Income
Enter the greater of the total of column I, or J: imputed income TOTAL INCOME FROM ASSETS (I{)
$
$
$
(L) Total Annual Household Income from all Sources [Add (E) + (K)]
F
HOUSEHOLD CERTIFICATION & SIGNATURES
The information on this form will be used to determine maximum income eligibility. Vwe have provided for each person(s) set forth in Part 11 acceptable verification of
current anticipated annual income. Vwe agree to notify the landlord immediately upon any member of the household moving out of the unit or any new member
moving in. Vwe agree to notify the landlord immediately upon any member becoming a full time student.
Under penalties of perjury, Vwe certify that the information presented in this Certification is true and accurate to the best of my/our knowledge and belief The
undersigned further understands that providing false representations herein constitutes an act of fraud. False, misleading or incomplete information may result in the
termination of the lease agreement.
Signature
(Date) Signature
(Date) Signature
(Date)
(Date)
TOTAL ANNUAL HOUSEHOLD
INCOME FROM ALL SOURCES:
From item (L) on page t $
Current Federal LIHTC Income Limit per
Family Size: $
Household Income as of Move -in: $
OF INCOME ELIGIBILITY
Unit Meets Federal
Income Restriction at:
❑ 60% ❑ 50%
Unit Meets Deeper
Targeting Income
Restriction at:
❑ Other %
RECERTIFICATION ONLY:
Current Federal LIHTC Income Limit
x 140%:
Household Income exceeds 140% at
recertification:
[]Yes ❑No
Household Size at Move -in:
PART VIII. PROGRAM TYPE
Mark the program(s) listed below (a. through e.) for which this household's unit will be counted toward the property's occupancy
requirements. Under each program marked, indicate the household's income status as established by this certification/recertification.
a. Tax Credit ❑ b. HOME ❑ c. Tax Exempt ❑ d. AHDP ❑ e. ❑
(Name ofPragram)
See Part V above. Income Status Income Status Income Status
❑ 550%AMGI ❑ 50%AMGI ❑ 50%AMGI Income Status
❑ <_60%AMGI ❑ 60%AMGI ❑ 80%AMGI ❑
❑ 580%AMGI
❑ 80%AMGI ❑ OI** ❑ OI**
❑ OI** ❑ OI**
"Upon recertification, household was determined over -income Oq according to eligibility requirements of the program(s)) marked above.
SIGNATURE OF OWNER/REPRESENTATIVE
Based on the representations herein and upon the proof and documentation required to be submitted, the individuals) named in Part II of this Tenant
Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction
Agreement (if applicable), to live in a unit in this Project.
SIGNATURE OF OWNER/REPRESENTATIVE DATE
Tenant Income Certification (January 2015)
PART VI. RENT
Tenant Paid Monthly Rent:
$ Federal Rent Assistance: $_ *Source:
Monthly Utility Allowance:
$ Non-Fedeml Rent Assistance: $ (*0-8)
Other Monthly Non -optional charges:
$ Total Monthly Rent Assistance: $
GROSS MONTHLY RENT FOR UNIT:
*Source of Federal Assistance
(Tenant paid rent plus Utility Allowance &
1 **HUD Multi -Family Project Based Rental Assistance (PBRA)
other non -optional charges)
S 2 Section 8 Moderate Rehabilitation
3 Public Housing Operating Subsidy
Maximum Federal LIHTC Rent Limit for
4 HOME Rental Assistance
this unit:
$ 5 HUD Housing Choice Voucher (HCV), tenant -based
6 HUD Project -Based Voucher (PBV)
Unit Meets Federal Rent Restriction at:
1160% ❑ 50% 7 USDA Section 521 Rental Assistance Program
8 Other Federal Rental Assistance
0 Missing
Unit Meets Deeper Targeting Rent
Restriction at:
❑ Other: % ** (PBRA) includes: Section 8 New Construction/Substantial Rehabilitation;
Section 8 Loan Management; Section 8 Property Disposition; Section 202
Project Rental Assistance Contracts (PRAC)
PART VII. STUDENT STATUS
*Student Explanation:
ARE ALL OCCUPANTS FULL TIME STUDENTS?
If yes, Enter student explanation* 1 AFDC / TANF Assistance
(also attach documentation) 2 Job Training Program
❑ yes ❑ no
3 Single Parent/Dependem Child
4 Married/Joint Return
Enter 5 Former Foster Care
1-5
PART VIII. PROGRAM TYPE
Mark the program(s) listed below (a. through e.) for which this household's unit will be counted toward the property's occupancy
requirements. Under each program marked, indicate the household's income status as established by this certification/recertification.
a. Tax Credit ❑ b. HOME ❑ c. Tax Exempt ❑ d. AHDP ❑ e. ❑
(Name ofPragram)
See Part V above. Income Status Income Status Income Status
❑ 550%AMGI ❑ 50%AMGI ❑ 50%AMGI Income Status
❑ <_60%AMGI ❑ 60%AMGI ❑ 80%AMGI ❑
❑ 580%AMGI
❑ 80%AMGI ❑ OI** ❑ OI**
❑ OI** ❑ OI**
"Upon recertification, household was determined over -income Oq according to eligibility requirements of the program(s)) marked above.
SIGNATURE OF OWNER/REPRESENTATIVE
Based on the representations herein and upon the proof and documentation required to be submitted, the individuals) named in Part II of this Tenant
Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction
Agreement (if applicable), to live in a unit in this Project.
SIGNATURE OF OWNER/REPRESENTATIVE DATE
Tenant Income Certification (January 2015)
PARTLY. SUPPLEMENTAL INFORMATION FORM
The California Tax Credit Allocation Committee (CTCAC) requests the following information in order to comply with the Housing and
Economic Recovery Act (HERA) of 2008, which requires all Low Income Housing Tax Credit (LIHTC) properties to collect and
submit to the U.S. Department of Housing and Urban Development (HUD), certain demographic and economic information on tenants
residing in LIHTC financed properties. Although the CTCAC would appreciate receiving this information, you may choose not to
furnish it. You will not be discriminated against on the basis of this information, or on whether or not you choose to furnish it. If you do
not wish to furnish this information, please check the box at the bottom of the page and initial.
Enter both Ethnicity and Race codes for each household member (see below for codes).
TENANT DEMOGRAPHIC PROFILE
HH
Mbr#
Last Name
First Name
Middle
Initial
Race
Ethnicity
Disabled
1
2
3
4
5
6
7
The Following Race Codes should be used:
I — White — A person having origins in any of the original people of Europe, the Middle East or North Africa.
2 — Black/African American —A person having origins in any of the black racial groups of Africa. Terms such as "Haitian" or "Negro" apply
to this category.
3 — American Indian/Alaska Native — A person having origins in any of the original peoples of North and South America (including Central
America), and who maintain tribal affiliation or community attachment.
4— Asian —A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for
example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
5—Native Hawaiian/Other Pacific Islander— A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other
Pacific Islands.
6 —Other
7 — Did not respond. (Please Initial below)
Note: Multiple racial categories may be indicated as such: 31—American Indian/Alaska Native & White, 41 — Asian & White, etc
The Following Ethnicity Codes should be used:
1— Hispanic — A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race.
Terms such as "Latino" or "Spanish Origin" apply to this category.
2 — Not Hispanic — A person not of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless
of race.
3 — Did not respond. (Please initial below)
Disability Status:
1—Yes
If any member of the household is disabled according to Fair Housing Act definition for handicap (disability):
• A physical or mental impairment which substantially limits one or more major life activities; a record of such an impairment or
being regarded as having such an impairment. For a definition of "physical or mental impainnent" and other terms used, please see
24 CFR 100.201, available at htt ://www.fairhousin .com/index.cfm?method— a e.dis la & a elD=465 .
• "Handicap" does not include current, illegal use of or addiction to a controlled substance.
• An individual shall not be considered to have a handicap solely because that individual is a transvestite.
2—No
3 — Did not respond (Please initial below)
❑ Resident/Applicant: I do not wish to furnish information regarding ethnicity, race and other household composition.
(Initials)
(HH#) 1. 2. 3. 4. 5. 6. 7.
Tenant Income Certification (January 2015)
INSTRUCTIONS FOR COMPLETING
TENANT INCOME CERTIFICATION
This form is to be completed by the owner or an authorized representative.
Part I - Development Data
Enter the type of tenant certification: Initial Certification (move -in), Recertification (annual recertification), or Other. If other, designate the purpose
of the recertification (i.e., a unit transfer, a change in household composition, or other state -required recertification).
Effective Date
Enter the effective date of the certification. For move -in, this should be the move -in date.
Spouse U Unborn Child/Anticipated
For annual income recertification's, this effective date should be no later than one year
0
from the effective date of the previous (re)certification.
Move -In Date
Enter the most recent date the household tax credit qualified. This could be the move -in
Foster child(ren)/adult(s)
date or in an acquisition rehab property, this is not the date the tenant moved into the
N
unit, itis the most recent date the management company income qualified the unit for
tax credit purposes.
Property Name
Enter the name of the development.
County
Enter the county (or equivalent) in which the building is located.
TCAC#
Enter the project number assigned to the property by TCAC. Please include hyphens
between the state abbreviation, four digit allocating year, and project specific number.
For example: CA -2010-123
BIN #
Enter the building number assigned to the building (from IRS Form 8609).
Address
Enter the physical address of the building, including street number and name, city, state,
and zip code.
Unit Number
Enter the unit number.
# Bedrooms
Enter the number of bedrooms in the unit.
Square Footage
Enter the square footage for the entire unit.
Vacant Unit
Check if unit was vacant on December 31 of requesting year. For example, for the
collection of 2011 data, this would refer to December 31, 2011.
Part II - Household Composition
List all occupants of the unit. State each household member's relationship to the head of household by using one of the following definitions:
H Head of Household
S
Spouse U Unborn Child/Anticipated
A Adult Co -Tenant
0
Other Family Member Adoption or Foster
C Child
F
Foster child(ren)/adult(s)
L Live-in Caretaker
N
None of the above
Date of Birth Enter each household member's date of birth.
Student Status Enter "Yes" if the household member is a full-time student or "NO" if the household
member is not a full-time student.
Last Four Digits of Social Security For each tenant 15 years of age or older, enter the last four digits of the social security
Number number or the last four digits of the alien registration number. If the last four digits of
SSN or alien registration is missing, enter 0000. For tenants under age 15, social security
number not required, although please enter 0000.
If there are more than 7 occupants,use an additional sheet of paper to list the remaining household members and attach it to the certification.
Tenant Income Certification (January 2015)
Part IH - Annual Income
See HUD Handbook 4350.3 for complete instructions on verifying and calculating income, including acceptable forms of verification.
From the third party verification forms obtained from each income source, enter the gross amount anticipated to be received for the twelve months
from the effective date of the (re)oertificafion. Complete a separate line for each income -earning member. List each respective household member
number from Part II. Include anticipated income only if documentation exists verifying pending employment. If any adult states zero -income, please
note "zero' in the columns of Part III.
Column (A)
Enter the annual amount of wages, salaries, tips, commissions, bonuses, and other income from employment;
distributed profits and/or net income from a business.
Column (B)
Enter the annual amount of Social Security, Supplemental Security Income, pensions, military retirement, etc.
Column (C)
Enter the annual amount of income received from public assistance (i.e., TANF, general assistance, disability,
etc.).
Column (D)
Enter the annual amount of alimony, child support, unemployment benefits, or any other income regularly
received by the household.
Row (E)
Add the totals from columns (A) through (D), above. Enter this amount.
Part IV - Income from Assets
See HUD Handbook 4350-3 for complete instructions on verifying and calculating income from assets, including acceptable forms of
verification.
From the third party verification forms obtained from each asset source, list the gross amount anticipated to be received during the twelve months
from the effective date of the certification. If individual household member income is provided, list the respective household member number from
Part II and complete a separate line for each member.
Column (F) List the type of asset (i.e., checking account, savings account, etc.)
Column (0) Enter C (for current, if the family currently owns or holds the asset), or I (for imputed, if the family has disposed
of the asset for less than fair market value within two years of the effective date of (re)certification).
Column (H) Enter the cash value of the respective asset.
Column (I) Eater the anticipated annual income from the asset (i.e, savings account balance multiplied by the annual
interest rate).
TOTALS Add the total of Column (H) and Column (I), respectively.
If the total in Column (H) is greater than $5,000, you must do an imputed calculation of asset income. Enter the Total Cash Value, multiply by 0.06%
and enter the amount in (J), Imputed Income.
Row (K) Enter thegreater ojthe total in Column (I) or (J)
Row (L) Total Annual Household Income From all Sources Add (E) and (K) and enter the total
HOUSEHOLD CERTIFICATION AND SIGNATURES
After all verifications of income and/or assets have been received and calculated, each household member age 18 or older must sign and date the
Tenant Income Certification. For move -in, it is recommended that the Tenant Income Certification be signed no earlier than 5 days prior to the
effective date of the certification.
Part V — Determination of Income Eligibility
Total Annual Household Income from Enter the number from item (L).
all Sources
Current LIHTC Income Limit per Enter the Current Move -in Income Limit for the household size — specifically, the max
Family Size income limit for the federal 50% or 60% set aside.
Household Income at Move -in For recertifrcations only. Enter the household income from the move -in certification
Tenant Income Certification (January 2015)
Household Size at Move -in Enter the number of household members from the move -in certification.
Current Federal LIHTC Income Limit x For recertifications only. Multiply the current LIHTC Maximum Move -in Income Limit by
140%
140% and enter the total. 140% is based on the Federal Set -Aside of 20/50 or 40/60, as
elected by the owner for the property, not deeper targeting elections of 30%, 40%, 45%,
50%, etc. Below, indicate whether the household income exceeds that total. If the Gross
Annual Income at recertification is greater than 140% of the LIHTC Income Limit per Family
Size at Move -in date (above), then the available unit rale must be followed.
Unit Meets Federal Income Restriction
Check the appropriate box for the income restriction that the household meets according to
at
what is required by the federal set-wide(s) for the project.
Unit Meets Deeper Targeting Income
If your agency requires an income restriction lower than the federal limit, enter the percent
Restriction
required.
Part VI - Rent
Tenant Paid Monthly Rent
Enter the amount the tenant pays toward rent (not including rent assistance payments such as
Section 8).
Federal Rent Assistance
Enter the meant of rent assistance received from a federal program, if any.
Non -Federal Rent Assistance
Enter the amount of non-federal rent assistance received, if any.
Total Monthly Rent Assistance
Enter the amount of total rent assistance received, if any.
Source of Federal Rent Assistance
If federal rent assistance is received, indicate the single program source.
Monthly Utility Allowance
Enter the utility allowance. If the owner pays all utilities, enter zero.
Other Monthly Non -Optional Charges
Enter the amount of non -optional charges, such as mandatory garage rent, storage lockers,
charges for services provided by the development, etc.
Gross Monthly Rent for Unit
Enter the total of Tenant Paid Rent plus Utility Allowance and other non -optional charges.
The total may NOT include amounts other than Tenant Paid Rent, Utility Allowances and
other non -optional charges. In accordance with the definition of Gross Rent in IRC
§42(g)(2)(B), it may not include any rent assistance amount.
Maximum LIHTC. Rent Limit for this
Enter the maximum allowable gross rent for the unit. This amount must be the maximum
unit
amount allowed by the Current Income Limit per Family Size — specifically, the max rent
limit for the federal 50% or 60% set aside.
Unit Meets Federal Rent Restriction at
Indicate the appropriate rent restriction that the unit meets according to what is required by
the federal set-aside(s) for the project.
Unit Meets Deeper Targeting Rent
If your agency requires a rent restriction lower than the federal limit, enter the percent
Restriction at
required.
Part VII - Student Status
If all household members are full time* students,
check "yes". Full-time status is determined by the school the student attends. If at least one
household member is not a full-time student,
check "no."
If"yes" is checked, the appropriate exemption must be listed in the box to the right. If none of the exemptions apply, the household is ineligible to
rent the unit.
Part VIII — Program Type
Mark the program(s) for which this household's unit will be counted toward the property's occupancy requirements. Under each program marked,
indicate the household's income status as established by this certification/recertification. If the property does not participate in the HOME, Tax -
Exempt Bond, Affordable Housing Disposition, or other housing program, leave those sections blank.
Tax Credit See Part V above.
HOME If the property participates in the HOME program and the unit this household will occupy will count towards the HOME program
set -asides, mark the appropriate box indicting the household's designation.
Tax Exempt If the property participates in the Tax Exempt Bond program; mark the appropriate box indicating the household's designation.
Tenant Income Certification (January 2015)
AHDP If the property participates in the Affordable Housing Disposition Program (AHDP), and this household's unit will count towards.
the set-aside requirements, select the appropriate box to indicate if the household is a VLI, LI or OI (at recertification) household.
Other If the property participates in any other affordable housing program, complete the information as appropriate.
SIGNATURE OF OWNER/REPRESENTATIVE
It is the responsibility of the owner or the owner's representative to sign and date this document immediately following execution by the resident(s).
The responsibility of documenting and determining eligibility (including completing and signing the Tenant Income Certification form) and ensuring
such documentation is kept in the tenant file is extremely important and should be conducted by someone well trained in tax credit compliance.
These instructions should not be considered a complete guide on tax credit compliance. The responsibility for compliance with federal program
regulations lies with the owner of the building(s) for which the credit is allowable.
PART IX. SUPPLEMENTAL INFORMATION
Complete this portion of the form at move -in and at recertification's (only if household composition has changed from the previous
year's cerufrcation).
Tenant Demographic Profile Complete for each member of the household, including minors. Use codes listed on
supplemental form for Race, Ethnicity, and Disability Status.
Resident/Applicant Initials All tenants who wish not to famish supplemental information should initial this section.
Pment/Gumdian may complete and initial for minor child(ren).
Tenant Income Certification (January 2015)
EXHIBIT "C"
RESTRICTED UNIT MATRIX*
Size No. of 30% AMI
40% AMI
50% AMI
60% AMI
Units Veteran
Senior
Senior
Veteran
Household
Household
Household
Household
Unit
Unit
Unit
Unit
Onebedroom 12 6
2
3
1
*At all times one (1) unit shall be occupied by an on-site property manager that is also an
Eligible Tenant.
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EXHIBIT "D"
1. INSURANCE REQUIREMENTS
1.1 Provision of Insurance. Without limiting Developer's indemnification of City, and
prior to commencement of Scope of Development under the AHA, Developer shall obtain,
provide and maintain at its own expense during the term of this Agreement, policies of insurance
of the type and amounts described below and in a form satisfactory to City. Developer agrees to
provide insurance in accordance with requirements set forth here. If Developer uses existing
coverage to comply and that coverage does not meet these requirements, Developer agrees to
amend, supplement or endorse the existing coverage.
1.2 Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact business of insurance
in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial
Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating
Guide, unless otherwise approved by the City's Risk Manager.
1.3 Coverage Requirements.
1.3.1 General Liability Insurance. Developer shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad
as provided by Insurance Services Office form CG 00 01 covering CGL on an "occurrence"
basis, including products and completed operations, property damage, bodily injury and personal
& advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate
limit applies, either the general aggregate limit shall apply separately to this project/location or
the general aggregate limit shall be twice the required occurrence limit.
The City, its officers, officials, employees, and volunteers are to be covered as additional
insureds on the CGL policy with respect to liability arising out of work or operations performed
by or on behalf of the Developer including materials, parts, or equipment fixrnished in connection
with such work or operations and automobiles owned, leased, hired, or borrowed by or on behalf
of the Developer. General liability coverage can be provided in the form of an endorsement to
the Developer's insurance (at least as broad as ISO Form CG 20 10, CG 11 85 or both CG 20 10
and CG 20 37 forms if later revisions used).
1.3.2 Property Insurance. Developer shall maintain property insurance against
"all risk" coverage for full replacement cost with no coinsurance penalty. Such coverage shall
name the City as a loss payee as their interest may appear.
1.3.3 Builder's Risk Insurance. For contracts with property exposures during
construction, Developer shall maintain Builders Risk insurance (Course of Construction)
insurance utilizing an "all risk" (Special Perils) coverage form, with limits equal to the
completed value of the project and no coinsurance penalty provisions. Developer may submit
evidence of Builder's Risk insurance in the form of Course of Construction coverage. Such
coverage shall name the City as a loss payee as their interest may appear. At the discretion of
City, the requirement for such coverage may include additional protection for Earthquake and/or
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Flood. City shall be included as an insured on such policy, and Developer shall provide the City
with a copy of the policy.
1.4 Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
1.4.1 Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or
appointed officers, agents, officials, employees and volunteers or shall specifically allow
Developer or others providing insurance evidence in compliance with these requirements to
waive their right of recovery prior to a loss. Developer hereby waives its own right of recovery
against City, and shall require similar written express waivers and insurance clauses from each of
its subcontractors.
1.4.2 Additional Insured Status. All liability policies including general
liability, excess liability, pollution liability, and automobile liability, but not including
professional liability (if required), shall provide or be endorsed to provide that City and its
officers, officials, employees, and agents shall be included as insureds under such policies.
1.4.3 Primary and Non Contributory. All liability coverage shall apply on a
primary basis and shall not require contribution from any insurance or self-insurance maintained
by City.
1.4.4 Notice of Cancellation. All policies shall provide City with thirty (30)
days' notice of cancellation (except for nonpayment for which ten (10) days' notice is required)
or nonrenewal of coverage for each required coverage.
1.5 Additional Agreements Between the Parties. The parties hereby agree to the
following:
1.5.1 Evidence of Insurance. Developer shall provide certificates of insurance
to City as evidence of the insurance coverage required herein, along with a waiver of subrogation
endorsement for workers' compensation and other endorsements as specified herein for each
coverage. Insurance certificates and endorsement must be approved by City's Risk Manager
prior to commencement of development. Current certification of insurance shall be kept on file
with City at all times during the term of this contract. City reserves the right to require complete,
certified copies of all required insurance policies, at any time.
1.5.2 Enforcement of Contract Provisions. Developer acknowledges and agrees
that any actual or alleged failure on the part of the City to inform Developer of non-compliance
with any requirement imposes no additional obligations on the City nor does it waive any rights
hereunder.
1.5.3 Requirements not Limitine. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage, limits or other
requirements, or a waiver of any coverage normally provided by any insurance. Specific
reference to a given coverage feature is for purposes of clarification only as it pertains to a given
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issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other
coverage, or a waiver of any type.
1.5.4 Self-insured Retentions. Any self-insured retentions must be declared to
and approved by City. City reserves the right to require that self-insured retentions be eliminated,
lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these
requirements unless approved by City.
1.5.5 City Remedies for Non Compliance. If Developer or any subcontractor
fails to provide and maintain insurance as required herein, then City shall have the right but not
the obligation, to purchase such insurance, to terminate this agreement, or to suspend
Developer's right to proceed until proper evidence of insurance is provided. Any amounts paid
by City shall, at City's sole option, be deducted from amounts payable to Developer or
reimbursed by Developer upon demand.
1.5.6 Timely Notice of Claims. Developer shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from Developer's performance
under this Agreement, and that involve or may involve coverage under any of the required
liability policies. City assumes no obligation or liability by such notice, but has the right (but not
the duty) to monitor the handling of any such claim or claims if they are likely to involve City.
1.5.7 Maintenance of General Liability Coverage. Developer agrees to maintain
commercial general liability coverage for a period of ten (10) years after completion of the
project or to obtain coverage for completed operations liability for an equivalent period.
1.5.8 Developer's Insurance. Developer shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own judgment may be
necessary for its proper protection and prosecution of the work under the Scope of Development
as outlined in the AHA.
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