HomeMy Public PortalAboutA 2013-12-17LHA-SPThis Agenda contains a brief general description of each item to be considered. Copies of the Staff reports
or other written documentation relating to each item of business referred to on the Agenda are on file in the
Office of the City Clerk and are available for public inspection. A person who has a question concerning any
of the agenda items may call the City Manager at (310) 603-0220, ext. 200.
Procedures for Addressing the Commissioners of the Housing Authority
IN ORDER TO EXPEDITE LYNWOOD HOUSING AUTHORITY BUSINESS, WE ASK THAT ALL
PERSONS WISHING TO ADDRESS THE AUTHORITY FILL OUT A FORM PROVIDED AT THE DOOR,
AND TO TURN IT IN TO THE AUTHORITY SECRETARY PRIOR TO THE START OF THE MEETING.
FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE
COMMISSIONERS OF THE AUTHORITY IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE
AUTHORITY.
AGENDA ITEMS ON FILE FOR CONSIDERATION
AT THE REGULAR MEETING OF
THE LYNWOOD HOUSING AUTHORITY
TO BE HELD ON DECEMBER 17, 2013
6:30 P.M.
PLEASE NOTE THE LATER START TIME
LYNWOOD CITY HALL
11330 BULLIS ROAD, LYNWOOD, CA 90262
AIDE CASTRO
CHAIR
EDWIN HERNANDEZ
VICE CHAIR
MARIA TERESA SANTILLAN-BEAS
COMMISSIONER
INTERIM EXECUTIVE DIRECTOR
RICHARD N. WARNE
AUTHORITY SECRETARY
MARIA QUINONEZ
OPENING CEREMONIES
CALL TO ORDER
2. ROLL CALL OF MEMBERS
Aide Castro
Edwin Hernandez
Salvador Alatorre
Maria T. Santillan-Seas
Jose Luis Solache
CERTIFICATION OF AGENDA POSTING BY SECRETARY
A
DEC 1 2 2013
CITY OF LYNWOOD
CITY CLERKS OFFICE
1-1
SALVADORE ALATORRE
1410 TOUM6IC[eli,RU:
JOSE LUIS SOLACHE
COMMISSIONER
AUTHORITY COUNSEL
FRED GALANTE
AUTHORITY TREASURER
PUBLIC ORAL COMMUNICATIONS
(Regarding Agenda Items Only)
NON -AGENDA PUBLIC ORAL COMMUNICATIONS
THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD
HOUSING AUTHORITY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD HOUSING
AUTHORITY AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE
SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY THE LYNWOOD HOUSING
AUTHORITY, BUT LYNWOOD HOUSING AUTHORITY COMMISSIONERS MAY REFER THE MATTER
TO THE STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING.
(The Ralph M. Brown Act, Government Code Section 54954.2 (a).)
PUBLIC HEARING
4. JOINT PUBLIC HEARING TO CONSIDER THE APPROVAL OF A SECOND AMENDMENT TO
THE AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT AND
RELATED AGREEMENTS BETWEEN THE LYNWOOD HOUSING AUTHORITY AND AMCAL
PARK PLACE FUND, L.P.
Comments:
On March 16, 2010, at a duly noticed public hearing, the former Lynwood Redevelopment Agency
("Agency') approved a Disposition and Development Agreement ("DDA") with AMCAL Park Place
Fund, LP ("AMCAL") for the disposition of approximately 4.26 acres of land owned by the Agency at
the northeast corner of Atlantic Avenue and Carlin Avenue commonly referred to as 12139 -12225
Atlantic Avenue and 4317- 4332 Carlin Avenue). The disposition of the property allowed for AMCAL
to develop a ninety-nine (99) unit affordable housing project with ninety-eight (98) apartments to be
restricted to rent to very low- and low-income households for a period of 55 years. (CD)
Recommendation:
Staff recommends that the Lynwood Housing Authority Board and City Council adopt the attached
resolution entitled: "A JOINT RESOLUTION OF THE LYNWOOD HOUSING AUTHORITY AND
THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING A SECOND AMENDMENT TO
THE AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT AND
RELATED AGREEMENTS BETWEEN THE LYNWOOD REDEVELOPMENT AGENCY AND
AMCAL PARK PLACE FUND, L.P. PROVIDING CONSENT TO AMCAL TO PROCEED WITH
HUD/FHA PERMANENT MORTGAGE AND CONSENTING TO A HUD SUBORDINATION
AGREEMENT AND AMENDMENT TO RESTRICTIVE COVENANTS AS PART OF THE
COMPLETED AFFORDABLE RENTAL HOUSING UNITS AT ATLANTIC AVENUE AND CARLIN
AVENUE."
CONSENT
5. MINUTES OF THE PREVIOUS MEETING:
Regular Meeting of December 3, 2013
ADJOURNMENT
THE LYNWOOD HOUSING AUTHORITY MEETINGS WILL BE POSTED AS NEEDED. THE NEXT
MEETING WILL BE HELD IN THE COUNCIL CHAMBERS OF CITY HALL, 11330 BULLIS ROAD, CITY
OF LYNWOOD, CALIFORNIA.
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DATE:
TO:
APPROVED BY:
PREPARED BY:
AGENDA STAFF REPORT
December 17, 2013
Honorable Mayor and Members of the City Council
Honorable Chair and Members of the Housing Authority Board
Richard Warne, Interim City Manager/Executive Director
Sarah M. Withers, Director of Community Development
SUBJECT: JOINT PUBLIC HEARING TO CONSIDER THE APPROVAL OF A
SECOND AMENDMENT TO THE AMENDED AND RESTATED
DISPOSITION AND DEVELOPMENT AGREEMENT AND
RELATED AGREEMENTS BETWEEN THE LYNWOOD HOUSING
AUTHORITY AND AMCAL PARK PLACE FUND, L.P
Recommendation:
Staff recommends that the Lynwood Housing Authority Board and City Council adopt
the attached resolution entitled: "A JOINT RESOLUTION OF THE LYNWOOD
HOUSING AUTHORITY AND THE CITY COUNCIL OF THE CITY OF LYNWOOD
APPROVING A SECOND AMENDMENT TO THE AMENDED AND RESTATED
DISPOSITION AND DEVELOPMENT AGREEMENT AND RELATED AGREEMENTS
BETWEEN THE LYNWOOD REDEVELOPMENT AGENCY AND AMCAL PARK
PLACE FUND, L.P. PROVIDING CONSENT TO AMCAL TO PROCEED WITH
HUD/FHA PERMANENT MORTGAGE AND CONSENTING TO A HUD
SUBORDINATION AGREEMENT AND AMENDMENT TO RESTRICTIVE
COVENANTS AS PART OF THE COMPLETED AFFORDABLE RENTAL HOUSING
UNITS AT ATLANTIC AVENUE AND CARLIN AVENUE."
Background:
On March 16, 2010, at a duly noticed public hearing, the former Lynwood
Redevelopment Agency ("Agency") approved a Disposition and Development
Agreement ("DDA") with AMCAL Park Place Fund, LP ("AMCAL") for the disposition of
approximately 4.26 acres of land owned by the Agency at the northeast corner of
Atlantic Avenue and Carlin Avenue commonly referred to as 12139 -12225 Atlantic
Avenue and 4317- 4332 Carlin Avenue). The disposition of the property allowed for
AMCAL to develop a ninety-nine (99) unit affordable housing project with ninety-eight
(98) apartments to be restricted to rent to very low- and low-income households for a
period of 55 years.
ITEM
On July 1, 2010, the Agency, at the request of AMCAL, amended the original DDA by
approving the use of $191,711 in HOME funds to supplement the funding for the
Project. The amended DDA approval provided AMCAL with a development loan from
the Agency in an amount not to exceed $7,591,398 to develop the project. The
development loan was equal to the value of the Agency Owned properties, and was to
be repaid from residual receipts over the 55 year affordability period.
Subsequently, on March 15, 2011 AMCAL requested additional Agency funding in the
amount of $3,000,000 for the Project in order to be more competitive for the Tax Credit
Allocation process. The $3,000,000 request was provided from the Agency's Taxable
Tax Allocation Bonds (Housing Series B) and/or the Agency's reserve funds. The
requested first amendment to the amended and restated disposition and development
agreement was appropriate to address changes to certain financial terms of the DDA by
confirming the: 1) commitment of available Taxable Tax Allocation Bonds and/or the
Agency's reserve funds for the Project in the amount of $3,000,000; 2) modification of
the terms of the Agency investment of set a -side funds to the Project; and 3) confirms
that the DDA obligated up to 49% of the units to be covenanted as low rental housing
units in conformance with Article 34 of the California Constitution, with the balance of
the units being subject to the agreement that was executed as part of the application
that was provided to the Tax Credit Allocation Committee.
Discussion & Analysis:
This project satisfies the obligations of the former Agency to create affordable housing
its former Project Areas or surrounding areas by creating 98 affordable apartment units
(the 99 unit will be reserved for the onsite manager). As the site, consisting of 4.26
acres at the northwest corner of Atlantic Boulevard and Carlin Avenue (12139-12225
Atlantic Avenue and 4317- 4332 Carlin Avenue), is within the former Redevelopment
Project Area "A ", this project was found to directly benefit the Project Area and assist in
creating affordable housing for the Alameda project area.
AMCAL was successful in completing the 99 -unit affordable high quality apartment
development and child care center, which includes one unit reserved for the on-site
manager. The other 98 units are restricted for rent to low-income households for a
period of 55 years. Forty-seven (47) of the units are restricted for rent to Very Low
Income Households and fifty-one (51) of the units are restricted for rent to Low Income
Households. The one manager's unit is not income restricted. There are 6, 1 bedroom
/1 bathroom units; 61, 2 bedroom / 1 bathroom units and 31, 3 bedroom /2 bathroom
units in a 3 - story building. The surface parking lot has 203 spaces — 195 spaces for
residents and 8 spaces dedicated to the childcare facility. The development now boast a
100% occupancy.
The project was also successful in utilizing local hire during the construction with local
hire accounting for 49% of the construction hours. However, AMCAL indicated that it
experienced some unexpected and sizable cost overruns during construction, which
were attributed to a combination of factors including unanticipated site work expenses
K
and an environment of increasing construction costs industry -wide. Nonetheless,
AMCAL remained on schedule and deferred its general contractor fees in an amount
equal to approximately $1.6 million, and covered approximately $1.5 million.
Although initially acquired by the Agency using the former Low and Moderate Income
Housing Fund ("LMIHF"), after approval of the Disposition and Development Agreement
(DDA) and first amendment to the DDA for development of the project, a California
State Supreme Court ruling on the constitutional validity of two 2011 legislative budget
trailer bills, ABX1 26 (Chapter 5, Statutes of 2011) and ABX1 27 (Chapter 6, Statutes of
2011), resulted in the outright elimination of all 425 redevelopment agencies in the State
of California. The dissolution procedures under ABX1 26 include a process for the
disposition and/or transfer of assets, including property holdings of former
redevelopment agencies. Subsequent legislation, AB 1484 (Chapter 26, Statutes of
2012), which was passed, signed, and enacted on June 28, 2012, made significant
changes to the provisions of ABX1 26, including the process for asset
management/disposition/transfers. Under AB 1484, the DDA and related agreements,
assets and rights are considered a "housing asset". As a housing asset, on February 1,
2012 (the effective date of the Agency's dissolution), the DDA and related agreements,
assets and rights, by operation of law, were effectively transferred to the Lynwood
Housing Authority ("Housing Authority"). The State Department of Finance ("DOF") is in
concurrence. As such, the Housing Authority is the contract party for the disposition
and development of the Site, which include the Agency Parcels.
Under the current financing structure, these overruns will result in approximately $2.1
million in deferred fees. AMCAL specifies that the deferral of their fees has unfortunately
changed the financial profile of the development. Payments from residual receipts to the
Housing Authority will not begin until the deferred fees are paid in full in accordance with
the DDA and the AMCAL Park Place Fund, L.P. partnership agreement. These current
financial projections showed that residual receipts to the Housing Authority would not
begin until the 13th year of operation (2025).
However, to more aggressively resolve this matter, AMCAL has identified a few different
permanent mortgage loan programs as alternate sources of permanent financing that
will restore the financial health of the project. The HUD 223 (f) and Freddie Mac
program both offer a permanent mortgage that is sized using generous underwriting
terms including a 35 year amortization schedule, 85% Loan to Value, and approximately
5.00% interest rate.
Utilizing these terms, AMCAL believes that the loan could be conservatively sized at
approximately $5.9 million. This would result in approximately $2.1 million more than the
permanent loan approved at the close of the transaction. Furthermore, due to favorable
loan terms of the proposed programs, the debt coverage ratio should not materially
increase from the original underwriting in 2011, and allow the property to operate at a
healthy 1.18 debt coverage ratio. The City/Authority's consultant, Milan L. Garrison of
MG Resolutions, Inc., has reviewed the proposed loan terms and is in agreement.
AMCAL proposes that the additional loan proceeds will be used to cover the transaction
3
costs, AMCAL's loan to the property, and then used to pay off the deferred fees. The
proposed revised financial structure would allow for residual receipt payments to the
Housing Authority to be made in the first year of operations as originally projected in the
2011 underwriting, as further confirmed by MG Resolutions, Inc.
Fiscal Impact:
The site was purchased in FY 2005 -2006 and FY 2009 - 2010 with Low — Mod Housing
Funds. The value of the site was $7,060,000, per the appraisal conducted on March 1,
2010. Additional financial assistance of $3,000,000 from the Agency's Taxable Tax
Allocation Bonds proceeds, and $191,711 was provided from HOME funds. Total
contribution was approximately $10,251, 171. The request to consent to AMCAL's
proposed alternate permanent financing with HUD/FHA and subsequently executing the
Subordination Agreement and Amendment to Restrictive Covenants will not have a
negative fiscal impact on Housing Authority finances, as confirmed by MG Resolutions.
No additional financial assistance is requested or authorized by this proposed
amendment. If successful, the Housing Authority will begin to receive its 20% of residual
receipts in year one of stabilized operation of the project, as opposed to year 13 (2025).
Coordinated With:
City Manager/Executive Director
City Attorney/Authority Counsel
Attachments:
Resolution
Second Amended Disposition and Development Agreement
HUD Subordination Agreement and Amendments to Restrictive Covenants
Original Cash Flow @ Closing
Cash Flow @ Current Financing
Cash Flow with New HUD/FHA Loan
4
RESOLUTION NO.
A JOINT RESOLUTION OF THE LYNWOOD HOUSING AUTHORITY AND THE CITY
COUNCIL OF THE CITY OF LYNWOOD APPROVING A SECOND AMENDMENT TO
THE AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT
AGREEMENT BETWEEN THE LYNWOOD REDEVELOPMENT AGENCY AND
AMCAL PARK PLACE FUND, L.P. PROVIDING CONSENT TO AMCAL TO
PROCEED WITH HUD/FHA PERMANENT MORTGAGE AND CONSENTING TO A
HUD SUBORDINATION AGREEMENT AND AMENDMENT TO RESTRICTIVE
COVENANTS AS PART OF THE COMPLETED AFFORDABLE RENTAL HOUSING
UNITS AT ATLANTIC AVENUE AND CARLIN AVENUE
WHEREAS, in accordance with the California Community Redevelopment Law
Health & Safety Code § 33000, et seq., the City Council of the City of Lynwood adopted
the Redevelopment Plan for the Redevelopment Project Area "A" in the City of Lynwood
on July 10, 1973, as established by Ordinance No. 945 of the City Council, and as
amended from time to time; and
WHEREAS, on March 16, 2010, to effectuate the Redevelopment Plan, the
Agency approved a Disposition and Development Agreement ("DDA") with AMCAL Park
Place Fund, LP ("Developer ") for the disposition of approximately 4.26 acres of land
owned by the Agency at the northeast corner of Atlantic Avenue and Carlin Avenue, as
more specifically described in the DDA ("Site"), from Agency to Developer to allow
Developer to construct a ninety-nine unit affordable housing project with ninety-eight
apartments to be restricted to rent to very low- and low-income households for a period
of 55 years; and
WHEREAS, on May 18, 2010, the City Council approved a HOME Funds
Reservation and Commitment Agreement for the use of $191,711 of HOME Investment
Partnership Program funds ("HOME Funds') received from the United States
Department of Housing and Urban Development ("HUD") to be used to supplement the
funding for the Project pursuant to an Amended and Restated DDA and toward the
development of an assisted income rental unit in the Project in accordance with HUD
rules for the use of HOME Investment Partnership Program funds ("HOME Funds");
WHEREAS, On July 1, 2010, pursuant to an Amended and Restated DDA, the
City Council approved a HOME Funds Reservation and Commitment Agreement for the
use of $191,711 of HOME Funds received from HUD to be used to supplement the
funding for the Project in accordance with HUD rules; and
WHEREAS, on March 15, 2011, the Agency Board and City Council conducted
and concluded a duly noticed joint public hearing pursuant to Section 33433 of the CRL
considering the First Amendment to the Amended and Restated DDA to address
additional changes to financial terms of the DDA; and
WHEREAS, although initially acquired by the Agency using the former Low and
Moderate Income Housing Fund ("LMIHF"), after approval of the DDA for development
of the project, a California State Supreme Court ruling on the constitutional validity of
two 2011 legislative budget trailer bills, ABX1 26 (Chapter 5, Statutes of 2011) and
ABX1 27 (Chapter 6, Statutes of 2011), resulted in the outright elimination of all 425
redevelopment agencies in the State of California;
WHEREAS, the dissolution procedures under ABX1 26 include a process for the
disposition and/or transfer of assets, including property holdings of former
redevelopment agencies. Subsequent legislation, AB 1484 (Chapter 26, Statutes of
2012), which was passed, signed, and enacted on June 28, 2012, made significant
changes to the provisions of ABX1 26, including the process for asset
management/disposition/transfers;
WHEREAS, under AB 1484, the DDA and related agreements, assets and rights
are considered a "housing asset" and, as such, on February 1, 2012 (the effective date
of the Agency's dissolution), the DDA and related agreements, assets and rights, by
operation of law, were effectively transferred to the Authority, as approved by the State
Department of Finance ("DOF") is in concurrence. As such, the Lynwood Housing
Authority ("Authority") is the contract party for the disposition and development of the
Site, which include the Agency Parcels;
WHEREAS, Developer has now indicated that it experienced some unexpected
and sizable cost overruns during construction, which were attributed to a combination of
factors including unanticipated site work expenses and an environment of increasing
construction costs industry -wide, but Developer nevertheless remained on schedule and
deferred its general contractor fees in an amount equal to approximately $1.6 million,
and covered approximately $1.5 million;
WHEREAS, to resolve the cost overruns, Developer identified a loan program
through the HUD 223(f) program as an alternate source of permanent financing that will
restore the financial health of the project, which is sized using generous underwriting
terms including a 35 year amortization schedule, 85% Loan to Value, and approximately
5.00% interest rate ("New Loan");
WHEREAS, on December 171h, 2013 the Authority Board and City Council
conducted and concluded a duly noticed joint public hearing concerning the Second
Amendment to the First Amended and Restated DDA in accordance with applicable law
to allow for the approval of the New Loan; and
WHEREAS, all legal prerequisites to the adoption of this Resolution have
occurred.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD,
CALIFORNIA AND THE LYNWOOD HOUSING AUTHORITY DO HEREBY RESOLVE
AS FOLLOWS:
Section 1. The above recitals are all true and correct and are hereby adopted as
findings.
Section 2. That a Mitigated Negative Declaration analyzing the potential impacts
of the development of the project contemplated in the DDA meeting all of the
requirements of the California Environmental Quality Act was ("CEQA") adopted and
approved by the Lynwood Planning Commission on February 9, 2010 and there is no
potential for any environmental impact as a result of the approval of the subordination
agreements hereunder and thus do not require further CEQA analysis.
Section 3. The Housing Authority Board of Directors and the City Council hereby
approve the Second Amendment to the Amended and Restated DDA and the
instruments referenced therein, a copy of which are on file in the office of the City Clerk.
The Second Amendment to the Amended and Restated DDA authorizes Developer to
proceed with HUD/FHA permanent mortgage, as further described in such Second
Amendment, and the related subordination agreement and amendments to restrictive
covenants as part of the completed affordable rental housing units at Atlantic and Carlin
Avenue.
Section 4. The Authority Chair and Executive Director and Mayor and City
Manager are authorized and directed to take such actions and execute such documents
as may be necessary to implement and effect this Resolution and the Second
Amendment to the Amended and Restated DDA on behalf of the Authority and City,
including authorized to implement any non -substantive changes to same.
Section 5. The Authority Secretary and City Clerk shall certify to the passage
and adoption hereof.
PASSED, APPROVED AND ADOPTED this 17th day of December, 2013.
ATTEST:
Maria Quinonez
City Clerk and Secretary
APPROVED AS TO FORM
Fred Galante
City Attorney and Authority Counsel
Aide Castro, Mayor and Chair
Richard Warne
Interim City Manager/Executive Director
APPROVED AS TO CONSENT:
Sarah M. Withers
Director of Community Development Director
ATTEST:
State of California )
County of Los Angeles ) SS
City of Lynwood )
I, City Clerk of the City of Lynwood, California and Secretary
of the Lynwood Housing Authority, do hereby certify that the foregoing Resolution
No. was duly approved and adopted by the
City Council of the City of
Lynwood and the Governing Board of the Lynwood Housing Authority at a regular
meeting of said Council and Board held on the day of ,2013,by the
following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
City Clerk and Secretary
SECOND AMENDMENT TO AMENDED AND RESTATED DISPOSITION AND
DEVELOPMENT AGREEMENT
(Park Place)
THIS SECOND AMENDMENT TO AMENDED AND RESTATED DISPOSITION
AND DEVELOPMENT AGREEMENT ("Agreement") is entered into as of December 17, 2013,
by between the LYNWOOD HOUSING AUTHORITY, a public body, corporate and politic
("Agency'), and AMCAL PARK PLACE FUND, L.P., a California limited partnership, (the
"Developer"), and the CITY OF LYNWOOD, a California municipal corporation ("City'). The
parties agree as follows:
RECITALS
A. On March 16, 2010, to effectuate the Redevelopment Project Area "A" in the City
of Lynwood, the former Lynwood Redevelopment Agency (`Agency') and City approved a
Disposition and Development Agreement ('Original DDA") with Developer for the disposition
of approximately 4.26 acres of land owned by the Agency at the northeast comer of Atlantic
Avenue and Carlin Avenue, as more specifically described in the Original DDA ('Site"), from
Agency to Developer to allow Developer to construct a ninety-nine unit affordable rental
housing project with ninety-eight apartments to be restricted to very low- and low-income
households for a period of 55 years ('Project").
B. On July 1, 2010, pursuant to an Amended and Restated DDA, the City Council
approved a HOME Funds Reservation and Commitment Agreement for the use of $191,711 of
HOME Investment Partnership Program funds ('HOME Funds") received from the United States
Department of Housing and Urban Development ('HUD") to be used to supplement the funding
for the Project in accordance with HUD rules.
C. To address additional changes to financial terms of the DDA, on March 15, 2011,
the Agency Board and City Council conducted and concluded a duly noticed joint public hearing
pursuant to Section 33433 of the Community Redevelopment Law and approved a First
Amendment to the Amended and Restated DDA (collectively, the Original DDA, Amended and
Restated DDA and First Amendment to the Amended and Restated DDA shall be referred to
herein as "DDA").
D. Although initially acquired by the Agency using the former Low and Moderate
Income Housing Fund ("LMIHF"), after approval of the DDA for development of the project, a
California State Supreme Court ruling on the constitutional validity of two 2011 legislative
budget trailer bills, ABXI 26 (Chapter 5, Statutes of 201 l) and ABXI 27 (Chapter 6, Statutes of
2011), resulted in the outright elimination of all 425 redevelopment agencies in the State of
California. The dissolution procedures under ABXI 26 include a process for the disposition
and/or transfer of assets, including property holdings of former redevelopment agencies.
Subsequent legislation, AB 1484 (Chapter 26, Statutes of 2012), which was passed, signed, and
enacted on June 28, 2012, made significant changes to the provisions of ABXI 26, including the
process for asset management/disposition/transfers. Under AB 1484, the DDA and related
agreements, assets and rights are considered a "housing asset". As a housing asset, on February
//0.0
1, 2012 (the effective date of the Agency's dissolution), the DDA and related agreements, assets
and rights, by operation of law, were effectively transferred to the Authority. The State
Department of Finance ("DOF") is in concurrence. As such, the Authority is the contract party
for the disposition and development of the Site, which include the Agency Parcels.
E. Developer has successfully completed the Project containing 99 -unit affordable
high quality apartment units and child care center, which includes one unit reserved for the on-
site manager.
F. However, Developer indicated that it experienced some unexpected and sizable
cost overruns during construction, which were attributed to a combination of factors including
unanticipated site work expenses and an environment of increasing construction costs industry-
wide. Nonetheless, Developer remained on schedule and deferred its general contractor fees in
an amount equal to approximately $1.6 million, and covered approximately $1.5 million.
G. To resolve this matter, Developer identified a loan program through the HUD
223(f) program as an alternate source of permanent financing that will restore the financial health
of the project, which is sized using generous underwriting terms including a 35 year amortization
schedule, 85% Loan to Value, and approximately 5.00% interest rate ("New Loan").
H. Utilizing these terms of the New Loan, Developer believes that the loan could be
conservatively sized at approximately $5.9 million, resulting in approximately $2.1 million more
than the permanent loan approved at the close of the transaction. Developer believes the debt
coverage ratio should not materially increase from the original underwriting in 2011, allowing
the property to operate at a healthy 1.18 debt coverage ratio.
I. The New Loan will allow for residual receipt payments to the Housing Authority
to be made in the first year of operations as originally projected in the 2011 underwriting and
would not change the total amount of financial assistance to be provided by the Authority or
City, but would require the Authority and City to consent to subordinate its interests to the lender
and HUD.
J. On December 17`h, 2013 the Authority and City conducted and concluded a duly
noticed joint public hearing concerning the Second Amendment to the First Amended and
Restated DDA in accordance with applicable law.
NOW THEREFORE, the Authority and Developer agree to amend the DDA, as
amended, as follows:
I. The Authority Board and City Council hereby consent to the New Loan, as
evidenced in Attachment 12 and the approval of the Subordination Agreement in substantially
the form attached hereto as Attachment 12, the Amendment to Restrictive Covenants - Agency
Covenants in substantially the form attached hereto as Attachment 13 and the Amendment to
Restrictive Covenants - HOME Regulatory Agreement in substantially the form attached hereto
as Attachment 14.
2
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2. The DDA shall be amended to include the following additional attachments,
which are attached hereto, evidencing the New Loan:
a. Attachment 12: "Subordination Agreement'
b. Attachment 13: "Amendment to Restrictive Covenants - Agency
Covenants"
C. Attachment 14: "Amendment to Restrictive Covenants - HOME
Regulatory Agreement'
3. Except as expressly provided herein, all other terms and conditions of the
Loan Agreement shall remain in full force and effect.
[signatures appear on following page]
3
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as
of the date first written above.
"AUTHORITY"
LYNWOOD HOUSING AUTHORITY
M
ATTEST:
Authority Secretary
APPROVED AS TO FORM
Authority Counsel
Chair
"DEVELOPER"
AMCAL PARK PLACE FUND, L.P.,
a California limited partnership
By: AMCAL Multi -Housing, Inc.,
a California corporation,
its general partner
4
//0.0
Arjun Nagarkatti, Executive Vice President
David Yarden, Vice President and General
Counsel
Attachment 12
"Subordination Agreement"
[see following pages]
Recording Requested by and
When Recorded Mail to:
Vorys, Sater, Seymour and Pease LLP
301 East 4th Street, Suite 3500
Cincinnati, Ohio 45202
Attn: David E. Barnes
Subordination Agreement U.S. Department of Housing
and Urban Development
Office of Housing
OMB Approval No. 2502-0598
(Exp. 04/30/2014)
Public Reporting Burden for this collection of information is estimated to average 0.5 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing
the collection of information. Response to this request for information is required in order to receive the benefits to be derived. This
agency may not collect this information, and you are not required to complete this form unless it displays a currently valid OMB
control number. While no assurance of confidentiality is pledged to respondents, HUD generally discloses this data only in
response to a Freedom of Information Act request.
Project Name: Park Place
HUD Project No:
THIS SUBORDINATION AGREEMENT ("Agreement') is entered into this 1st
day of January, 2014 by and among (i) Walker & Dunlop, LLC, a Delaware limited
liability company, ("Senior Lender"), (ii) Lynwood Housing Authority, a public
body, corporate and politic, as successor in interest to Lynwood Redevelopment
Agency, a public body, corporate and politic ("Subordinate Lender"), and (iii)
AMCAL Park Place Fund, L.P., a California limited partnership ('Borrower").
Recitals
WHEREAS, Borrower is the owner of that certain 99 unit residential rental
development known as "Park Place Apartments" ("Project'), located at 12139 —
12225 Atlantic Avenue and 4317 — 4332 Carlin Avenue, Lynwood, California.
Senior Lender has made or is making the senior mortgage loan as described on
Schedule A hereto ("Senior Indebtedness") to Borrower in the original principal
amount(s) as shown on Schedule A, evidenced by the Note described in Schedule A
("Senior Note"), and secured by, among other things, the Security Instrument as
described in Schedule A (collectively, "Senior Security Instrument'), covering the
property described in Exhibit A attached hereto together with all improvements thereon
and personal property used relative thereof, all as more particularly described in the
Senior Security Instrument ("Mortgaged Property").
Subordination Agreement HUD -92420M (04/11)
2
WHEREAS, Borrower has requested Senior Lender to permit Subordinate Lender
to make a subordinate loan to Borrower in the amount of $10,956,150.00 ("Subordinate
Loan") and to secure the Subordinate Loan by, among other things, placing a mortgage
lien against the Mortgaged Property.
WHEREAS, Senior Lender, with the approval of the U.S. Department of Housing
and Urban Development ("HUD"), has agreed to permit Subordinate Lender to make the
Subordinate Loan and to place a subordinate mortgage lien against the Mortgaged
Property subject to all of the conditions contained in this Agreement and in accordance
with Program Obligations. "Program Obligations" means (1) all applicable statutes
and any regulations issued by the Secretary pursuant thereto that apply to the Project,
including all amendments to such statutes and regulations, as they become effective,
except that changes subject to notice and comment rulemaking shall become effective
only upon completion of the rulemaking process, and (2) all current requirements in
HUD handbooks and guides, notices, and mortgagee letters that apply to the Project,
and all future updates, changes and amendments thereto, as they become effective,
except that changes subject to notice and comment rulemaking shall become effective
only upon completion of the rulemaking process, and provided that such future updates,
changes and amendments shall be applicable to the Project only to the extent that they
interpret, clarify and implement terms in this Agreement rather than add or delete
provisions from such document. Handbooks, guides, notices, and mortgagee letters
are available on HUD's official website:
(http://www.hud.gov/offices/adm/hudclips/index.cfm, or a successor location to that
site).
NOW, THEREFORE, in order to induce Senior Lender to permit Subordinate
Lender to make the Subordinate Loan to Borrower and to place a subordinate mortgage
lien against the Mortgaged Property, and in consideration thereof, Senior Lender,
Subordinate Lender and Borrower agree as follows:
1. Definitions.
In addition to the terms defined in the Recitals to this Agreement, for purposes of
this Agreement the following terms have the respective meanings set forth below:
(a) "Affiliate" is defined in 24 CFR 200.215, or any successor regulation.
(b) "Bankruptcy Proceeding" means any bankruptcy, reorganization,
insolvency, composition, restructuring, dissolution, liquidation, receivership,
assignment for the benefit of creditors, or custodianship action or proceeding
under any federal or state law with respect to Borrower, any guarantor of any of
the Senior Indebtedness, any of their respective properties, or any of their
respective partners, members, officers, directors, or shareholders.
(c) "Borrower" means all entities identified as "Borrower" in the first
paragraph of this Agreement, together with any successors, heirs, and assigns
(jointly and severally). Borrower shall include any entity taking title to the
Mortgaged Property, whether or not such entity assumes the Senior Note,
provided that the term "Borrower' shall not include Senior Lender in the event
Subordination Agreement HUD -92420M (04/11)
that Senior Lender may acquire title to the Mortgaged Property. Whenever the
term "Borrower" is used herein, the same shall be deemed to include the obligor
of the debt secured by the Senior Security Instrument.
(d) 'Business Day" means any day other than Saturday, Sunday or any
other day on which Senior Lender or HUD is not open for business.
(e) "Covenant Event of Default" is defined in the Senior Security
Instrument.
(f) "[INTENTIONALLY OMITTED]"
(g) "Entity" means an estate, trust, partnership, corporation, limited liability
company, limited liability partnership, governmental department or agency or any
other entity which has the legal capacity to own property.
(h) "[INTENTIONALLY OMITTED]"
(i) "Monetary Event of Default' is defined in the Senior Security
Instrument.
Q) "Non -Project Sources" means any funds that are not derived from
Project Sources.
(k) "Project Sources" means the Mortgaged Property (as defined in the
Senior Security Instrument), any proceeds of the Senior loan, and any reserve or
deposit made with Senior Lender or any other party as required by HUD in
connection with the Senior loan.
(1) "Senior Indebtedness" means all present and future indebtedness,
obligations, and liabilities of Borrower to Senior Lender under or in connection
with the Senior loan or Senior Loan Documents.
(m) "Senior Lender" means the Entity named as such in the first
paragraph on page 1 of this Agreement, its successors and assigns.
(n) "Senior Loan Documents" means the Senior Note, the Senior
Security Instrument, and the Regulatory Agreement between Borrower and HUD,
as such documents may be amended from time to time and all other documents
at any time evidencing, securing, guaranteeing, or otherwise delivered in
connection with the Senior Indebtedness.
(o) "[INTENTIONALLY OMITTED]"
(p) "Senior Security Instrument Default' means a "Monetary Event of
Default' or a "Covenant Event of Default' as defined in the Senior Security
Instrument.
(q) "Subordinate Indebtedness" means all present and future
indebtedness, obligations, and liabilities of Borrower to Subordinate Lender
under or in connection with the Subordinate Loan or the Subordinate Loan
Documents.
Subordination Agreement HUD -92420M (04/11)
(r) "Subordinate Lender" means the Entity that qualifies under Program
Obligations and named as such in the first paragraph on page 1 of this
Agreement.
(s) "Subordinate Loan Documents" means the Subordinate Note, the
Subordinate Mortgage, and all other documents at any time evidencing,
securing, guaranteeing, or otherwise delivered in connection with the
Subordinate Indebtedness.
(t) "Subordinate Loan Enforcement Action" means the acceleration of
all or any part of the Subordinate Indebtedness, the advertising of or
commencement of any foreclosure or trustee's sale proceedings, the exercise of
any power of sale, the acceptance of a deed or assignment in lieu of foreclosure
or sale, the collecting of rents, the obtaining of or seeking of the appointment of a
receiver, the seeking of default interest, the taking of possession or control of
any of the Mortgaged Property, the commencement of any suit or other legal,
administrative, or arbitration proceeding based upon the Subordinate Note or any
other of the Subordinate Loan Documents, the exercising of any banker's lien or
rights of set-off or recoupment, or the taking of any other enforcement action
against Borrower, any other party liable for any of the Subordinate Indebtedness
or obligated under any of the Subordinate Loan Documents, or the Mortgaged
Property.
(u) "Subordinate Mortgage" means that certain Deed of Trust with
Assignment of Rents and Rider Attached Hereto, dated December 14, 2011,
between Borrower and Lawyers Title Insurance Corporation for the benefit
of Subordinate Lender.
(v) "Subordinate Mortgage Default' means any act, failure to act,
event, conditions, or occurrence which allows (but for any contrary provision of
this Agreement), or which with the giving of notice or the passage of time, or
both, would allow (but for any contrary provision of this Agreement), Subordinate
Lender to take a Subordinate Loan Enforcement Action.
(w) "Subordinate Note" means that certain Agency Note, dated
December 9, 2011, made by Borrower to Subordinate Lender.
(x) "Surplus Cash" is defined herein to mean the same as that term is
defined in the Regulatory Agreement between Borrower and HUD.
Subordination Agreement HUD -92420M (04111)
2. Permission to Place Mortgage Lien Against Mortgaged Property.
Senior Lender agrees, subject to the provisions of this Agreement, to permit
Subordinate Lender to record the Subordinate Mortgage and other recordable
Subordinate Loan Documents against the Mortgaged Property (which are subordinate in
all respects to the lien of the Senior Security Instrument) to secure Borrower's obligation
to repay the Subordinate Note and all other obligations, indebtedness and liabilities of
Borrower to Subordinate Lender under and in connection with the Subordinate Loan.
Such permission is subject to the condition that each of the representations and
warranties made by Borrower and Subordinate Lender in Section 3 are true and correct
on the date of this Agreement and on the date on which the proceeds of the Subordinate
Loan are disbursed to Borrower. If any of the representations and warranties made by
Borrower and Subordinate Lender in Section 3 are not true and correct on both of those
dates, the provisions of the Senior Loan Documents applicable to unpermitted liens on
the Mortgaged Property shall apply.
3. Borrower's and Subordinate Lender's Representations and Warranties.
Borrower and, with respect to subsections (a) through (d) below, Subordinate
Lender each make the following representations and warranties to Senior Lender:
(a) Subordinate Loan Documents. The Subordinate Loan is evidenced
by the Subordinate Note and is secured by the Subordinate Mortgage.
(b) Terms of the Subordinate Loan. The original principal amount of
the Subordinate Note is $10,956,150.00. Interest on the Subordinate Note
accrues monthly at the rate of three percent (3%) per annum. The Subordinate
Note is due and payable in full on
("Maturity"). The principal of the Subordinate Note and any accrued interest
will be due at Maturity. The promissory note evidencing the Subordinate Note
obligates Borrower to make payments as follows: annual payments shall be
made on June 1 of every year commencing in the year after the Prosect
receives its Certificate of Completion in an amount equal to twenty percent
(20%) of Residual Cash Flow (as defined in the Subordinate Note) for the
preceding calendar year, subject to available Surplus Cash and such
payments shall be credited first against accrued and unpaid interest and
then against outstanding principal. As long as HUD is the insurer or holder of
the Senior Note on FHA Project No. , any payments due from
project income under the Subordinate Note shall be payable only (i) from Surplus
Cash of the Project; but in no event greater than seventy-five percent (75%) of the
total amount of Surplus Cash; or (ii) from monies received from Non -Project
Sources. No prepayment of the Subordinate Note shall be made until after final
endorsement by HUD of the Senior Note, unless such prepayment is made from
Non -Project Sources and is approved in writing by HUD. The restriction on
payment imposed by this paragraph shall not excuse any default caused by the
failure of the maker to pay the indebtedness evidenced by the Subordinate Note.
Subordination Agreement HUD -92420M (04/11)
(c) Relationship of Borrower to Subordinate Lender. Subordinate
Lender is not an Affiliate of Borrower.
(d) Term. The term of the Subordinate Note ends on June 1st, 55 years
after the first payment is made under the Subordinate Note.
(e) Subordinate Loan Documents. The executed Subordinate Loan
Documents are substantially in the same forms as those submitted to, and
approved by, HUD prior to the date of this Agreement. Upon execution and
delivery of the Subordinate Loan Documents, Borrower shall deliver to Senior
Lender an executed copy of each of the Subordinate Loan Documents, certified to
be true, correct and complete.
(f) Senior Loan Documents. The executed Senior Loan Documents
are the same forms as -approved by HUD prior to the date of this Agreement.
Upon execution and delivery of the Senior Loan Documents, Borrower shall deliver
to Subordinate Lender an executed copy of each of the Senior Loan Documents,
certified to be true, correct and complete.
4. Deliveries.
Borrower shall submit the following items to Senior Lender and HUD not
later than ten (10) Business Days after the date of the initial disbursement of
proceeds of the Subordinate Loan.
(a) Title Policy Endorsement. An endorsement to the policy of title
insurance insuring the lien of the Senior Security Instrument which insures that
(i) the lien of the Subordinate Mortgage is subordinate to the lien of the Senior
Mortgage, and (ii) this Agreement has been recorded among the applicable land
records.
(b) Certification. A certification from Borrower and Subordinate
Lender to HUD that the Subordinate Loan Documents do not contain any
changes from the Subordinate Loan Documents submitted to, and approved by,
HUD, before the date of this Agreement.
(c) Loan Documents. A complete set of the Subordinate Loan
Documents.
5. Terns of Subordination.
(a) Agreement to Subordinate. Senior Lender and Subordinate
Lender agree that: (i) the indebtedness evidenced by the Subordinate Loan
Documents is and shall be subordinated in right of payment, to the extent and in
the manner provided in this Agreement, to the prior payment in full of the
indebtedness evidenced by the Senior Loan Documents, and (ii) the Subordinate
Mortgage and the other Subordinate Loan Documents are and shall be subject
Subordination Agreement HUD -92420M (04/11)
VA
and subordinate in all respects to the liens, terms, covenants and conditions of the
Senior Security Instrument and the other Senior Loan Documents and to all
advances heretofore made or which may hereafter be made pursuant to the
Senior Security Instrument and the other Senior Loan Documents (including but
not limited to, all sums advanced for the purposes of (1) protecting or further
securing the lien of the Senior Security Instrument, curing defaults by Borrower
under the Senior Loan Documents or for any other purpose expressly permitted by
the Senior Security Instrument, or (2) constructing, renovating, repairing,
fumishing, fixturing or equipping the Mortgaged Property).
(b) Subordination of Subrogation Rights. Subordinate Lender agrees
that if, by reason of its payment of real estate taxes or other monetary obligations
of Borrower, or by reason of its exercise of any other right or remedy under the
Subordinate Loan Documents, it acquires by right of subrogation or otherwise a
lien on the Mortgaged Property which (but for this subsection) would be senior to
the lien of the Senior Security Instrument, then, in that event, such lien shall be
subject and subordinate to the lien of the Senior Security Instrument.
(c) Payments Before Senior Security Instrument Default. Until
Subordinate Lender receives a default notice of a Senior Security Instrument
Default from Senior Lender, Subordinate Lender shall be entitled to retain for its
own account all payments made under or pursuant to the Subordinate Loan
Documents provided that such payments are otherwise permitted under the terms
of this Agreement.
(d) Payments After Senior Security Instrument Default. Borrower
agrees that, after it receives notice (or otherwise acquires knowledge) of a Senior
Security Instrument Default, it will not make any payments under or pursuant to the
Subordinate Loan Documents (including but not limited to principal, interest,
additional interest, late payment charges, default interest, attorney's fees, or any
other sums secured by the Subordinate Mortgage) without Senior Lender's prior
written consent. Subordinate Lender agrees that, after it receives a default notice
from Senior Lender with written instructions directing Subordinate Lender not to
accept payments from Project Sources on account of the Subordinate Loan, it will
not accept any payments under or pursuant to the Subordinate Loan Documents
(including but not limited to principal, interest, additional interest, late payment
charges, default interest, attorney's fees, or any other sums secured by the
Subordinate Mortgage) unless either (i) such payment is being made solely from
Non -Project Sources or (ii) such payment is made with Senior Lender's prior
written consent. If Subordinate Lender receives written notice from Senior Lender
that the Senior Security Instrument Default which gave rise to Subordinate
Lender's obligation not to accept payments has been cured, waived, or otherwise
suspended by Senior Lender, the restrictions on payment to Subordinate Lender in
this Section 5 shall terminate, and Senior Lender shall have no right to any
subsequent payments made to Subordinate Lender by Borrower prior to
Subordinate Lender's receipt of a new default notice from Senior Lender in
accordance with the provisions of this Section 5(d).
Subordination Agreement HUD -92420M (04/11)
(e) Remitting Subordinate Loan Payments to Senior Lender. If, after
Subordinate Lender receives a default notice from Senior Lender in accordance
with subsection (d) above, Subordinate Lender receives any payments under the
Subordinate Loan Documents (other than payments permitted under subsection
(d) above), Subordinate Lender agrees that such payment or other distribution will
be received and held in trust for Senior Lender and unless Senior Lender
otherwise notifies Subordinate Lender in writing, will be promptly remitted, in kind
to Senior Lender, properly endorsed to Senior Lender, to be applied to the
principal of, interest on and other amounts due under the Senior Loan Documents
in accordance with the provisions of the Senior Loan Documents. By executing
this Agreement, Borrower specifically authorizes Subordinate Lender to endorse
and remit any such payments to Senior Lender, and specifically waives any and all
rights to have such payments returned to Borrower or credited against the
Subordinate Loan. Borrower and Senior Lender acknowledge and agree that
payments received by Subordinate Lender, and remitted to Senior Lender under
this Section 5, shall not be applied or otherwise credited against the Subordinate
Loan, nor shall the tender of such payment to Senior Lender waive any
Subordinate Mortgage Default which may arise from the inability of Subordinate
Lender to retain such payment or apply such payment to the Subordinate Loan.
(f) Agreement Not to Commence Bankruptcy Proceeding.
Subordinate Lender agrees that during the term of this Agreement it will not
commence, or join with any other creditor in commencing any Bankruptcy
Proceeding with respect to Borrower, without Senior Lender's prior written consent.
6. Default Under Subordinate Loan Documents.
(a) Notice of Default and Cure Rights. Subordinate Lender shall
deliver to Senior Lender a default notice within five Business Days in each case
where Subordinate Lender has given a default notice to Borrower. Failure of
Subordinate Lender to send a default notice to Senior Lender shall not prevent the
exercise of Subordinate Lender's rights and remedies under the Subordinate Loan
Documents, subject to the provisions of this Agreement. Senior Lender shall have
the opportunity, but not the obligation, to cure any Subordinate Mortgage Default
within 60 days following the date of such notice; provided, however that
Subordinate Lender shall be entitled, during such 60 -day period, to continue to
pursue its rights and remedies under the Subordinate Loan Documents, subject to
the limitations set forth in Section 6(b) below.
(b) Subordinate Lender's Exercise of Remedies After Notice to
Senior Lender. If a Subordinate Mortgage Default occurs and is continuing,
Subordinate Lender agrees that it will not commence foreclosure proceedings with
respect to the Mortgaged Property under the Subordinate Loan Documents or
exercise any other rights or remedies it may have under the Subordinate Loan
Documents with respect to the Mortgaged Property, including, but not limited to
accelerating the Subordinate Loan, collecting rents, appointing (or seeking the
Subordination Agreement HUD -92420M (04/11)
E
appointment of) a receiver or exercising any other rights or remedies thereunder
without Senior Lender's prior written consent. However, the preceding sentence
shall not (i) limit Subordinate Lenders right to bring an action seeking recovery
solely from Non -Project Sources or (ii) preclude Subordinate Lender from
exercising or enforcing all the rights available to Subordinate Lender under the
Subordinate Loan Documents and/or under applicable law to enforce covenants
and agreements of Borrower relating to income, rent or affordability restrictions.
7. Default Under Senior Loan Documents.
(a) Notice of Default and Cure Rights. Senior Lender shall deliver to
Subordinate Lender a default notice within five Business Days in each case where
Senior Lender has given a default notice to Borrower (provided that Senior Lender
shall have no liability to Borrower, Subordinate Lender or to any other Entity for
failure to timely give such notice). Failure of Senior Lender to send a default notice
to Subordinate Lender shall not prevent the exercise of Senior Lenders right and
remedies under the Senior Loan Documents, subject to the provisions of this
Agreement. Borrower agrees that Subordinate Lender shall have the opportunity,
but not the obligation, to cure either a Monetary Event of Default or a Covenant
Event of Default within 30 days following the date of such notice, or any time prior
to an assignment of the Senior Security Instrument from Senior Lender to HUD,
whichever date is later. Subordinate Lender acknowledges that Senior Lender
shall be entitled during such period described above to continue to pursue its
remedies under the Senior Loan Documents. Subordinate Lender shall have the
opportunity to cure a Covenant Event of Default during such period described
above so long as there is no Monetary Event of Default under the Senior Loan
Documents. All amounts paid by Subordinate Lender to Senior Lender to cure any
default under the Senior Loan Documents shall be deemed to have been
advanced by Subordinate Lender pursuant to, and shall be secured by the lien of,
the Subordinate Mortgage.
(b) Cross Default. Subordinate Lender agrees that, notwithstanding
any contrary provision contained in the Subordinate Loan Documents, a Senior
Security Instrument Default shall not constitute a default under the Subordinate
Loan Documents if no other default occurred under the Subordinate Loan
Documents.
8. Conflict.
Borrower, Senior Lender and Subordinate Lender each agrees that, in the
event of any conflict or inconsistency between the terms of the Senior Loan
Documents, the Subordinate Loan Documents and the terms of this Agreement,
the terms of this Agreement shall govern and control solely as to the following: (a)
the relative priority of the security interests of Senior Lender and Subordinate
Lender in the Mortgaged Property; and (b) solely as between Senior Lender and
Subordinate Lender, the notice requirements, cure rights, and the other rights and
obligations which Senior Lender and Subordinate Lender have agreed to as
Subordination Agreement HUD -92420M (04111)
10
expressly provided in this Agreement. Borrower acknowledges that the terms and
provisions of this Agreement shall not, and shall not be deemed to: extend
Borrower's time to cure any Senior Security Instrument Default or Subordinate
Mortgage Default, as the case may be; give Borrower the right to notice of any
Senior Security Instrument Default or Subordinate Mortgage Default, as the case
may be other than that, if any, provided, respectively under the Senior Loan
Documents or the Subordinate Loan Documents, as applicable; or create any
other right or benefit for Borrower as against Senior Lender or Subordinate Lender.
9. Rights and Obligations of Subordinate Lender under the Subordinate
Loan Documents and of Senior Lender under the Senior Loan Documents.
Subject to each of the other terms of this Agreement, all of the following
provisions shall supersede any provisions of the Subordinate Loan Documents
covering the same subject matter:
(a) Protection of Security Interest. Subordinate Lender shall not,
without the prior written consent of Senior Lender in each instance, take any action
which has the effect of increasing the indebtedness outstanding under, or secured
by, the Subordinate Loan Documents, except that Subordinate Lender shall have
the right to advance funds to cure Senior Security Instrument Defaults pursuant to
Section 7(a) above and advance funds pursuant to the Subordinate Mortgage for
the purpose of paying real estate taxes and insurance premiums, making
necessary repairs to the Mortgaged Property and curing other defaults by
Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of: a taking or threatened
taking by condemnation or other exercise of eminent domain of all or a portion of
the Mortgaged Property (collectively, a "Taking"); or the occurrence of a fire or
other casualty resulting in damage to all or a portion of the Mortgaged Property
(collectively, a "Casualty"), at any time or times when the Senior Security
Instrument remains a lien on the Mortgaged Property the following provisions shall
apply:
(1) Subordinate Lender hereby agrees that its rights (under the
Subordinate Loan Documents or otherwise) to participate in any proceeding
or action relating to a Taking and/or a Casualty, or to participate or join in
any settlement of, or to adjust, any claims resulting from a Taking or a
Casualty shall be and remain subordinate in all respects to Senior Lender's
rights under the Senior Loan Documents with respect thereto, and
Subordinate Lender shall be bound by any settlement or adjustment of a
claim resulting from a Taking or a Casualty made by or with the written
consent of Senior Lender: and
(2) all proceeds received or to be received on account of a
Taking or a Casualty, or both, shall be applied (to payment of the costs and
expenses of repair and restoration and/or to payment of the Senior Security
Subordination Agreement HUD -92420M (04/11)
11
Instrument) in the manner determined by Senior Lender in its sole
discretion; provided, however, that if Senior Lender elects to apply such
proceeds to payment of the principal of, interest on and other amounts
payable under the Senior Security Instrument, any proceeds remaining after
the satisfaction in full of the principal of, interest on and other amounts
payable under the Senior Security Instrument shall be paid to, and may be
applied by, Subordinate Lender in accordance with the applicable
provisions of the Subordinate Loan Documents. Any proceeds then
remaining after the satisfaction in full of the principal of, interest on and
other amounts payable under the Subordinate Loan Documents shall be
paid by the Subordinate Lender to Borrower.
(c) No Modification of Subordinate Loan Documents. Borrower and
Subordinate Lender each agrees that, until the principal of, interest on and all
other amounts payable under the Senior Loan Documents have been paid in full, it
will not, without the prior written consent of Senior Lender in each instance,
increase the amount of the Subordinate Loan, increase the required payments due
under the Subordinate Loan, decrease the term of the Subordinate Loan, increase
the interest rate on the Subordinate Loan, or otherwise amend the Subordinate
Loan terms in a manner that creates an adverse effect upon Senior Lender under
the Senior Loan Documents. Any unauthorized amendment of the Subordinate
Loan Documents without Senior Lender's consent shall be void ab initio and of no
effect whatsoever.
10. Modification of Senior Loan Documents; Refinancing of Senior
Indebtedness.
Subordinate Lender consents to any agreement or arrangement in which Senior
Lender waives, postpones, extends, reduces or modifies any provisions of the Senior
Loan Documents, including any provision requiring the payment of money. Subordinate
Lender further agrees that its agreement to subordinate hereunder shall extend to any
new mortgage debt which is for the purpose of refinancing all or any part of the Senior
Security Indebtedness in accordance with Program Obligations (including reasonable and
necessary costs associated with the closing and/or the refinancing); and that all the terms
and covenants of this Agreement shall inure to the benefit of any holder of any such
refinanced debt; and that all references to the Senior Indebtedness, the Senior Note, the
Senior Security Instrument, the Senior Loan Documents and Senior Lender shall mean,
respectively, the indebtedness related to the refinance loan, the refinance note, the
security instrument securing the refinance note, all documents evidencing securing or
otherwise pertaining to the refinance note and the holder of the refinance note.
Subordination Agreement HUD -92420M (04/11)
12
11. Default by Subordinate Lender or Senior Lender.
If Subordinate Lender or Senior Lender defaults in performing or observing any of
the terms, covenants or conditions to be performed or observed by it under this
Agreement, the other, non -defaulting Lender shall have the right to all available legal and
equitable relief.
12. Notices.
Each notice, request, demand, consent, approval or other communication
(hereinafter in this Section referred to collectively as "notices" and referred to singly as a
"notice") which Senior Lender or Subordinate Lender is required or permitted to give to
the other party pursuant to this Agreement shall be in writing and shall be deemed to
have been duly and sufficiently given if: (a) personally delivered with proof of delivery
thereof (any notice so delivered shall be deemed to have been received at the time so
delivered); or (b) sent by Federal Express (or other similar national overnight courier)
designating next Business Day delivery (any notice so delivered shall be deemed to have
been received on the next Business Day following receipt by the courier); or (c) sent by
United States registered or certified mail, return receipt requested, postage prepaid, at a
post office regularly maintained by the United States Postal Service (any notice so sent
shall be deemed to have been received two Business Days after mailing in the United
States), addressed to the respective parties as follows:
With a copy to:
SENIOR LENDER
Walker & Dunlop, LLC,
7501 Wisconsin Ave., Suite 1200E
Bethesda, Maryland 20814
U.S. Department of Housing and Urban Development
Director - Office of Multifamily Asset Management
Room 6160
451 Seventh Street, S.W.
Washington, DC 20410
SUBORDINATE LENDER:
Lynwood Housing Authority
c/o City of Lynwood
11330 Bullis Road
Lynwood, CA 90262
Subordination Agreement HUD -92420M (04/11)
13
Either party may, by notice given pursuant to this Section, change the person or persons
and/or address or addresses, or designate an additional person or persons or an
additional address or addresses for its notices, but notice of a change of address shall
only be effective upon receipt.
13. [Intentionally Omitted.]
14. General.
(a) Assignment/Successors. This Agreement shall be binding upon
Borrower, Senior Lender and Subordinate Lender and shall inure to the benefit of
the respective legal successors and assigns of Senior Lender and Subordinate
Lender.
(b) No Partnership or Joint Venture. Senior Lender's permission for
the placement of the Subordinate Loan Documents does not constitute Senior
Lender as a joint venturer or partner of Subordinate Lender. Neither party hereto
shall hold itself out as a partner, agent or Affiliate of any other party hereto.
(c) Senior Lender's and Subordinate Lender's Consent. Wherever
Senior Lender's consent or approval is required by any provision of this
Agreement, such consent or approval may be granted or denied by Senior Lender
in its sole and absolute discretion, unless otherwise expressly provided in this
Agreement. Wherever Subordinate Lender's consent or approval is required by
any provision of this Agreement, such consent or approval may be granted or
denied by Subordinate Lender in its sole and absolute discretion, unless otherwise
expressly provided in this Agreement.
(d) Further Assurances; UCC Financing Statements. Subordinate
Lender, Senior Lender and Borrower each agree, at Borrower's expense, to
execute and deliver all additional instruments and/or documents reasonably
required by any other party to this Agreement in order to evidence that the
Subordinate Loan Documents are subordinate to the lien, covenants and
conditions of the Senior Loan Documents, or to further evidence the intent of this
Agreement. Senior Lender is hereby authorized to file any and all UCC financing
statement amendments required to reflect the priority of the Senior Indebtedness.
(e) Amendment. This Agreement shall not be amended except by
written instrument signed by all parties hereto.
(f) Governing Law. This Agreement shall be governed by the laws of
the State in which the Mortgaged Property is located, except as, so long as the
Senior loan is insured or held by HUD, and solely as to rights and remedies of
HUD, federal jurisdiction may be appropriate pursuant to any federal
requirements. The State courts, and with respect to HUD's rights and remedies,
federal courts, and governmental authorities in the State in which the Mortgaged
Property is located, shall have exclusive jurisdiction over all controversies which
Subordination Agreement HUD -92420M (04/11)
14
shall arise under or in relation to the Subordinate Loan Documents. Borrower
irrevocably consents to service, jurisdiction, and venue of such courts for any
such litigation and waives any other venue to which it might be entitled by virtue
of domicile, habitual residence or otherwise.
(g) Severable Provisions. If any provision of this Agreement shall be
invalid or unenforceable to any extent, then the other provisions of this Agreement,
shall not be affected thereby and shall be enforced to the greatest extent permitted
by law.
(h) Term. The term of this Agreement shall commence on the date
hereof and shall continue until the earliest to occur of the following events: (i) the
payment of all of the principal of, interest on and other amounts payable under the
Senior Loan Documents; (ii) the payment of all of the principal of, interest on and
other amounts payable under the Subordinate Loan Documents, other than by
reason of payments which Subordinate Lender is obligated to remit to Senior
Lender pursuant to Section 4 hereof; (iii) the acquisition by Senior Lender of title to
the Mortgaged Property pursuant to a foreclosure; or (iv) the acquisition by
Subordinate Lender of title to the Mortgaged Property pursuant to a foreclosure or
a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the
Subordinate Mortgage, but only if such acquisition of title does not violate any of
the terms of this Agreement. Notwithstanding the foregoing, in the event the
Senior Indebtedness is refinanced, the term of this Agreement shall continue and
the Subordinate Indebtedness and Subordinate Loan Documents shall be
subordinate to any such indebtedness related to the refinance loan as provided in
Section 10 above.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original for all purposes;
provided, however, that all such counterparts shall together constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
(COUNTERPART SIGNATURE PAGES TO FOLLOW]
Subordination Agreement HUD -92420M (04/11)
15
[COUNTERPART SIGNATURE PAGE TO SUBORDINATION AGREEMENT]
SENIOR LENDER
Walker & Dunlop, LLC,
A Delaware limited liability company
By: _
Name:
Title:
Subordination Agreement HUD -92420M (04/11)
16
[COUNTERPART SIGNATURE PAGE TO SUBORDINATION AGREEMENT]
SUBORDINATE LENDER
Lynwood Housing Authority, a public body,
corporate and politic, as successor in interest to
Lynwood Redevelopment Agency, a public
body, corporate and politic
By: _
Name:
Title:
Approved as to form:
Aleshire & Wynder, LLP
Lynwood Housing Authority Counsel
State of California
County of
On January_, 2014, before me,
personally
appeared the
of Lynwood Housing Authority, 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 (Seal)
Subordination Agreement HUD -92420M (04/11)
17
[COUNTERPART SIGNATURE PAGE TO SUBORDINATION AGREEMENT]
BORROWER
AMCAL Park Place Fund, L.P.,
a California limited partnership
By: AMCAL Multi -Housing Inc., a California
corporation, Administrative General
Partner
in
F_'Wk
Arjun Nagarkatti, President
By: Foundation for Affordable Housing
VIII, Inc., a California nonprofit public
benefit corporation, Managing General
Partner
Deborrah A. Willard, President
State of California
County of
On January _, 2014, before me, , personally
appeared Arjun Nagarkatti, the President of AMCAL Multi -Housing Inc., a California
corporation, the Administrative General Partner of AMCAL Park Place Fund, L.P., a
California limited partnership, 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
(Seal)
Subordination Agreement HUD -92420M (04/11)
m
State of California
County of )
On January _, 2014, before me, , personally
appeared Deborrah A. Willard, the President of Foundation for Affordable Housing VIII,
Inc., a California nonprofit public benefit corporation, Managing General Partner of
AMCAL Park Place Fund, L.P., a California limited partnership, 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
(Seal)
Subordination Agreement HUD -92420M (04/11)
19
EXHIBIT A
Mortgaged Property Legal Description
All that certain real property situated in the County of Los Angeles, State of California,
described as follows:
That portion of Lot 2 of the J.J. Bullis Tract of San Antonio Rancho, in the City of
Lynwood, County of Los Angeles, State of California, as per map recorded in book 3,
pages 612 and 613 of Miscellaneous Records, in the office of the county recorder of said
county, the exterior lines of which are more particularly described as follows:
Commencing at the intersection of the centerline of Carlin Avenue, 100 feet wide, and
Atlantic Avenue, 100 feet wide, as shown on map of Tract No. 68944, as per map
recorded in book 1351, pages 22-24 of Maps, in the office of the county recorder of said
county; thence, along the centerline of said Carlin Avenue, north 71 010'40" west 244.83
feet; thence, leaving said centerline, North 18058'30" east 50.00 feet to the northerly line
of said Carlin Avenue and the true point of beginning for this description; thence, along
said northerly line, north 71°10'40" west 223.97 feet; thence, leaving said northerly line,
north 18058'30" east 496.57 feet; thence, south 71 010'39" east 191.80 feet; thence, north
18°58'30" east 50.00 feet; thence, south 71 010'39" east 227.00 feet to the westerly line of
said Atlantic Avenue; thence, along said westerly line, south 18°58'30" west 373.72 feet;
thence, leaving said westerly line, north 71010'40" west 194.83 feet; thence, south
18058'30" west 172.85 feet to the true point of beginning.
Said land is shown as Parcel A of that certain Lot Merger/Lot Line Adjustment, City of
Lynwood, County of Los Angeles, State of California, Certificate of Approval of Lot
Merger No. 2011-01, recorded November 10, 2011 as Instrument No. 20111531045 of
Official Records.
Also except therefrom one-half interest in all the oil, natural gas, petroleum and similar
products pertaining to said premises as described in said documents and in all oil rights
pertaining thereto, for a period of 10 years from the date of the Deed hereinafter referred
to. It being understood that the grantors therein shall have and retain a perpetual right to
one-half of all benefits accruing from any oil development, commission or bonus, or
commission paid or agreed to be paid, prior to the expiration of this reservation and that
the grantors and the grantees shall have equal rights in regard to said oil, gas and
petroleum products, as reserved in the Deed from Harry E. Mangold,
Registered September 23, 1922, as Torrens Document No. 29000, under Certificate of
Title No. AV17737, on file in the Office of the Registrar of Titles of the County of Los
Angeles.
APN: 6186-012-041 & 6186-012-042
Subordination Agreement HUD -92420M (04111)
W
SCHEDULE A
Description of Senior Indebtedness
1. $ .00 Mortgage Loan from Walker & Dunlop, LLC, Delaware
limited liability company ("Senior Lender") to AMCAL Park Place Fund, L.P., a
California limited partnership ('Borrower"), as evidenced by that certain Note
(Multistate) from Borrower to Senior Lender in the in the original principal amount
of $ .00 and as secured by that certain Multifamily Deed of
Trust, Assignment of Rents and Security Agreement (California), dated as of
January 1, 2014 and recorded concurrently herewith in the records of Los Angeles
County, California.
Subordination Agreement HUD -92420M (04/11)
Attachment 13
"Amendment to Restrictive Covenants - Agency Covenants"
[see following pages]
//0.0
Recording Requested by and
When Recorded Mail to:
Vorys, Sater, Seymour and Pease LLP
301 East 4th Street, Suite 3500
Cincinnati, Ohio 45202
Attn: David E. Bames
AMENDMENT TO RESTRICTIVE COVENANTS
This AMENDMENT TO RESTRICTIVE COVENANTS is made as of January 1,
2014, by AMCAL Park Place Fund, L.P., a California limited partnership ("Borrower")
and the Lynwood Housing Authority, a public body, corporate and politic, as successor
in interest to Lynwood Redevelopment Agency, a public body, corporate and politic,
("Agency").
WHEREAS, Borrower has obtained financing from Walker & Dunlop, LLC, a
Delaware limited liability company ("Lender") for the benefit of the project known as
Park Place Apartments ("Project"), which loan is secured by a Multifamily Deed of Trust,
Assignment of Rents and Security Agreement (California) ("Security Instrument") dated
as of January 1, 2014, and recorded in the Registrar-Recorder/County Clerk's Office of
Los Angeles County, California ("Records") on as Document Number
, and is insured by the United States Department of Housing and
Urban Development ("HUD");
WHEREAS, Borrower has received a loan from the Agency, which Agency is
requiring certain restrictions be recorded against the Project; and
WHEREAS, Borrower entered into that certain Regulatory Agreement and
Declaration of Covenants and Restrictions ("Restrictive Covenants") with respect to the
Project, as more particularly described in Exhibit A attached hereto, dated as of
December 14, 2011, and recorded in the Records;
WHEREAS, notice of the Restrictive Covenants is provided in that certain Notice
of Affordability Restrictions on Transfer of Property ("Notice") dated as of December 14,
2011, and recorded in the Records;
WHEREAS, HUD requires as a condition of its insuring Lender's financing to the
Project, that the lien and covenants of the Restrictive Covenants be subordinated to the
lien, covenants, and enforcement of the Security Instrument; and
WHEREAS, the Agency has agreed to subordinate the Restrictive Covenants to
the lien of the Mortgage Loan in accordance with the terms of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and for other
consideration the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
(a) In the event of any conflict between any provision contained
elsewhere in the Restrictive Covenants and any provision contained in this
Amendment, the provision contained in this Amendment shall govern and be
controlling in all respects as set forth more fully herein.
(b) The following terms shall have the following definitions:
"Code" means the Internal Revenue Code of 1986, as amended.
"HUD" means the United States Department of Housing and Urban Development
"HUD Regulatory Agreement" means the Regulatory Agreement between Borrower and
HUD with respect to the Project, as the same may be supplemented, amended or
modified from time to time.
"Lender' means Walker & Dunlop, LLC, a Delaware limited liability company, its
successors and assigns.
"Mortgage Loan" means the mortgage loan made by Lender to the Borrower pursuant to
the Mortgage Loan Documents with respect to the Project.
"Mortgage Loan Documents" means the Security Instrument, the HUD Regulatory
Agreement and all other documents required by HUD or Lender in connection with the
Mortgage Loan.
"National Housing Act" means the National Housing Act of 1934, as amended.
"Program Obligations" has the meaning set forth in the Security Instrument.
"Residual Receipts" has the meaning specified in the HUD Regulatory Agreement.
"Security Instrument" means the mortgage or deed of trust from Borrower in favor of
Lender, as the same may be supplemented, amended or modified.
"Surplus Cash" has the meaning specified in the HUD Regulatory Agreement.
(c) Notwithstanding anything in the Restrictive Covenants to the contrary, the
provisions hereof are expressly subordinate to (i) the Mortgage Loan Documents,
including without limitation, the Security Instrument, and (ii) Program Obligations (the
Mortgage Loan Documents and Program Obligations are collectively referred to herein
as the "HUD Requirements"). Borrower covenants that it will not take or permit any
action that would result in a violation of the Code, HUD Requirements or Restrictive
Covenants. In the event of any conflict between the provisions of the Restrictive
Covenants and the provisions of the HUD Requirements, HUD shall be and remains
entitled to enforce the HUD Requirements. Notwithstanding the foregoing, nothing
herein limits the Agency's ability to enforce the terms of the Restrictive Covenants,
provided such terms do not conflict with statutory provisions of the National Housing Act
or the regulations related thereto. The Borrower represents and warrants that to the
best of Borrower's knowledge the Restrictive Covenants impose no terms or
requirements that conflict with the National Housing Act and related regulations.
(d) In the event of foreclosure (or deed in lieu of foreclosure), the Restrictive
Covenants (including without limitation, any and all land use covenants and/or
restrictions contained herein) shall automatically terminate, subject to California law
requirements to maintain fifty-five (55) year covenants against properties assisted with
former Redevelopment Low and Moderate Income Funds.
(e) Borrower and the Agency acknowledge that Borrower's failure to comply
with the covenants provided in the Restrictive Covenants does not and shall not serve
as a basis for default under the HUD Requirements, unless a default also arises under
the HUD Requirements.
(f) Except for the Agency's reporting requirement, in enforcing the Restrictive
Covenants the Agency will not file any claim against the Project, the Mortgage Loan
proceeds, any reserve or deposit required by HUD in connection with the Security
Instrument or HUD Regulatory Agreement, or the rents or other income from the
property other than a claim against:
i. Available surplus cash, if the Borrower is a for-profit entity;
ii. Available distributions of surplus cash and residual receipts authorized for
release by HUD, if the Borrower is a limited distribution entity; or
iii. Available residual receipts authorized by HUD, if the Borrower is a non-
profit entity.
(g) For so long as the Mortgage Loan is outstanding, Borrower and Agency
shall not further amend the Restrictive Covenants, with the exception of clerical errors
or administrative correction of non -substantive matters, without HUD's prior written
consent.
(h) Subject to the HUD Regulatory Agreement, the Agency may require the
Borrower to indemnify and hold the Agency harmless from all loss, cost, damage and
expense arising from any claim or proceeding instituted against Agency relating to the
subordination and covenants set forth in the Restrictive Covenants, provided, however,
that Borrower's obligation to indemnify and hold the Agency harmless shall be limited to
available surplus cash and/or residual receipts of the Borrower.
[COUNTERPART SIGNATURE PAGES TO FOLLOW]
[COUNTERPART SIGNATURE PAGE TO AMENDMENT TO RESTRICTIVE
COVENANTS]
BORROWER
AMCAL Park Place Fund, L.P.,
a California limited partnership
By: AMCAL Multi -Housing, Inc.,
a California corporation
Title: Administrative General Partner
By:
Name: Arjun Nagarkatti
Title: President
UILD
By: Foundation for Affordable Housing VIII, Inc.,
a California nonprofit public benefit corporation
Title: Managing General Partner
By:
Name: Deborrah A. Willard
Title: President
STATE OF CALIFORNIA
COUNTY OF
On , 201_, before me, , a Notary
Public in and for said State, personally appeared Arjun Nagarkatti, who proved to me on
the basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacity and that by their signature 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.
WITNESS my hand and official seal.
Signature
(Seal)
STATE OF CALIFORNIA
COUNTY OF
On , 201_, before me, , a Notary
Public in and for said State, personally appeared Deborrah A. Willard, who proved to
me on the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that they executed the same in their
authorized capacity and that by their signature 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.
WITNESS my hand and official seal.
Signature
(Seal)
[COUNTERPART SIGNATURE PAGE TO AMENDMENT TO RESTRICTIVE
COVENANTS]
AGENCY
Lynwood Housing Authority,
a public body, corporate and politic,
as successor in interest to Lynwood Redevelopment Agency,
a public body, corporate and politic
M
Title:
STATE OF CALIFORNIA
COUNTY OF
On , 201, before me, , a Notary
Public in and for said State, personally appeared who proved to me
on the basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacity and that by their signature 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.
WITNESS my hand and official seal.
Signature
(Seal)
Exhibit A
Legal Description
All that certain real property situated in the County of Los Angeles, State of California,
described as follows:
That portion of Lot 2 of the J.J. Bullis Tract of San Antonio Rancho, in the City of Lynwood,
County of Los Angeles, State of California, as per map recorded in book 3, pages 612 and
613 of Miscellaneous Records, in the office of the county recorder of said county, the
exterior lines of which are more particularly described as follows:
Commencing at the intersection of the centerline of Carlin Avenue, 100 feet wide, and
Atlantic Avenue, 100 feet wide, as shown on map of Tract No. 68944, as per map
recorded in book 1351, pages 22-24 of Maps, in the office of the county recorder of said
county; thence, along the centerline of said Carlin Avenue, north 71 010'40" west 244.83
feet; thence, leaving said centerline, North 18°58'30" east 50.00 feet to the northerly line of
said Carlin Avenue and the true point of beginning for this description; thence, along said
northerly line, north 71 01040" west 223.97 feet; thence, leaving said northerly line, north
18058'30" east 496.57 feet; thence, south 71 010'39" east 191.80 feet; thence, north
18°58'30" east 50.00 feet; thence, south 71 010'39" east 227.00 feet to the westerly line of
said Atlantic Avenue; thence, along said westerly line, south 18°58'30" west 373.72 feet;
thence, leaving said westerly line, north 71 01040" west 194.83 feet; thence, south
18°58'30" west 172.85 feet to the true point of beginning.
Said land is shown as Parcel A of that certain Lot Merger/Lot Line Adjustment, City of
Lynwood, County of Los Angeles, State of California, Certificate of Approval of Lot Merger
No. 2011-01, recorded November 10, 2011 as Instrument No. 20111531045 of Official
Records.
Also except therefrom one-half interest in all the oil, natural gas, petroleum and similar
products pertaining to said premises as described in said documents and in all oil rights
pertaining thereto, for a period of 10 years from the date of the Deed hereinafter referred
to. It being understood that the grantors therein shall have and retain a perpetual right to
one-half of all benefits accruing from any oil development, commission or bonus, or
commission paid or agreed to be paid, prior to the expiration of this reservation and that
the grantors and the grantees shall have equal rights in regard to said oil, gas and
petroleum products, as reserved in the Deed from Harry E. Mangold,
Registered September 23, 1922, as Torrens Document No. 29000, under Certificate of
Title No. AV17737, on file in the Office of the Registrar of Titles of the County of Los
Angeles.
APN: 6186-012-041 & 6186-012-042
12/10/2013 18070166
Attachment 14:
"Amendment to Restrictive Covenants - HOME Regulator Agreement"
//0.0
Recording Requested by and
When Recorded Mail to:
Vorys, Sater, Seymour and Pease LLP
301 East 4th Street, Suite 3500
Cincinnati. Ohio 45202
Attn: David E. Barnes
AMENDMENT TO RESTRICTIVE COVENANTS
This AMENDMENT TO RESTRICTIVE COVENANTS is made as of January 1,
2014, by AMCAL Park Place Fund, L.P., a California limited partnership ("Borrower")
and the City of Lynwood, a California municipal corporation ("Agency").
WHEREAS, Borrower has obtained financing from Walker & Dunlop, LLC, a
Delaware limited liability company ("Lender') for the benefit of the project known as
Park Place Apartments ("Project"), which loan is secured by a Multifamily Deed of Trust,
Assignment of Rents and Security Agreement (California) ("Security Instrument") dated
as of January 1, 2014 and recorded in the Registrar-Recorder/County Clerk's Office of
Los Angeles County, California ("Records") on as Document Number
, and is insured by the United States Department of Housing and
Urban Development ("HUD");
WHEREAS, Borrower has received HOME funds from the Agency, which Agency
is requiring certain restrictions be recorded against the Project; and
WHEREAS, Borrower entered into that certain HOME Regulatory Agreement and
Declaration of Covenants and Restrictions ("Restrictive Covenants") with respect to the
Project, as more particularly described in Exhibit A attached hereto, dated as of
December 14, 2011, and recorded in the Records;
WHEREAS, HUD requires as a condition of its insuring Lender's financing to the
Project, that the lien and covenants of the Restrictive Covenants be subordinated to the
lien, covenants, and enforcement of the Security Instrument; and
WHEREAS, the Agency has agreed to subordinate the Restrictive Covenants to
the lien of the Mortgage Loan in accordance with the terms of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and for other
consideration the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
(a) In the event of any conflict between any provision contained
elsewhere in the Restrictive Covenants and any provision contained in this
Amendment, the provision contained in this Amendment shall govern and be
controlling in all respects as set forth more fully herein.
(b) The following terms shall have the following definitions:
"Code" means the Internal Revenue Code of 1986, as amended.
"HUD" means the United States Department of Housing and Urban Development
"HUD Regulatory Agreement" means the Regulatory Agreement between Borrower and
HUD with respect to the Project, as the same may be supplemented, amended or
modified from time to time.
"Lender" means Walker & Dunlop, LLC, a Delaware limited liability company, its
successors and assigns.
"Mortgage Loan" means the mortgage loan made by Lender to the Borrower pursuant to
the Mortgage Loan Documents with respect to the Project.
"Mortgage Loan Documents" means the Security Instrument, the HUD Regulatory
Agreement and all other documents required by HUD or Lender in connection with the
Mortgage Loan.
"National Housing Act" means the National Housing Act of 1934, as amended.
"Program Obligations" has the meaning set forth in the Security Instrument.
"Residual Receipts" has the meaning specified in the HUD Regulatory Agreement.
"Security Instrument" means the mortgage or deed of trust from Borrower in favor of
Lender, as the same may be supplemented, amended or modified.
"Surplus Cash" has the meaning specified in the HUD Regulatory Agreement.
(c) Notwithstanding anything in the Restrictive Covenants to the contrary, the
provisions hereof are expressly subordinate to (i) the Mortgage Loan Documents,
including without limitation, the Security Instrument, and (ii) Program Obligations (the
Mortgage Loan Documents and Program Obligations are collectively referred to herein
as the "HUD Requirements"). Borrower covenants that it will not take or permit any
action that would result in a violation of the Code, HUD Requirements or Restrictive
Covenants. In the event of any conflict between the provisions of the Restrictive
Covenants and the provisions of the HUD Requirements, HUD shall be and remains
entitled to enforce the HUD Requirements. Notwithstanding the foregoing, nothing
herein limits the Agency's ability to enforce the terms of the Restrictive Covenants,
provided such terms do not conflict with statutory provisions of the National Housing Act
or the regulations related thereto. The Borrower represents and warrants that to the
best of Borrower's knowledge the Restrictive Covenants impose no terms or
requirements that conflict with the National Housing Act and related regulations.
(d) In the event of foreclosure (or deed in lieu of foreclosure), the Restrictive
Covenants (including without limitation, any and all land use covenants and/or
restrictions contained herein) shall automatically terminate, subject to HUD requirements
to maintain twenty (20) year covenants on properties assisted with HOME funds.
(e) Borrower and the Agency acknowledge that Borrower's failure to comply
with the covenants provided in the Restrictive Covenants does not and shall not serve
as a basis for default under the HUD Requirements, unless a default also arises under
the HUD Requirements.
(f) Except for the Agency's reporting requirement, in enforcing the Restrictive
Covenants the Agency will not file any claim against the Project, the Mortgage Loan
proceeds, any reserve or deposit required by HUD in connection with the Security
Instrument or HUD Regulatory Agreement, or the rents or other income from the
property other than a claim against:
i. Available surplus cash, if the Borrower is a for-profit entity;
ii. Available distributions of surplus cash and residual receipts authorized for
release by HUD, if the Borrower is a limited distribution entity; or
iii. Available residual receipts authorized by HUD, if the Borrower is a non-
profit entity.
(g) For so long as the Mortgage Loan is outstanding, Borrower and Agency
shall not further amend the Restrictive Covenants, with the exception of clerical errors
or administrative correction of non -substantive matters, without HUD's prior written
consent.
(h) Subject to the HUD Regulatory Agreement, the Agency may require the
Borrower to indemnify and hold the Agency harmless from all loss, cost, damage and
expense arising from any claim or proceeding instituted against Agency relating to the
subordination and covenants set forth in the Restrictive Covenants, provided, however,
that Borrower's obligation to indemnify and hold the Agency harmless shall be limited to
available surplus cash and/or residual receipts of the Borrower.
[COUNTERPART SIGNATURE PAGES TO FOLLOW]
[COUNTERPART SIGNATURE PAGE TO AMENDMENT TO RESTRICTIVE
COVENANTS]
BORROWER
AMCAL Park Place Fund, L.P.,
a California limited partnership
By: AMCAL Multi -Housing, Inc.,
a California corporation
Title: Administrative General Partner
Bv:
Name: Arjun Nagarkatti
Title: President
AND
By: Foundation for Affordable Housing VIII, Inc.,
a California nonprofit public benefit corporation
Title: Managing General Partner
By:
Name: Deborrah A. Willard
Title: President
STATE OF CALIFORNIA
COUNTY OF
On , 201_, before me, , a Notary
Public in and for said State, personally appeared Arjun Nagarkatti, who proved to me on
the basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacity and that by their signature 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.
WITNESS my hand and official seal.
Signature
(Seal)
STATE OF CALIFORNIA
COUNTY OF
On , 201, before me, , a Notary
Public in and for said State, personally appeared Deborrah A. Willard, who proved to
me on the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that they executed the same in their
authorized capacity and that by their signature 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.
WITNESS my hand and official seal.
Signature (Seal)
[COUNTERPART SIGNATURE PAGE TO AMENDMENT TO RESTRICTIVE
COVENANTS]
AGENCY
City of Lynwood,
a California municipal corporation
In
STATE OF CALIFORNIA
COUNTY OF
On , 201_, before me, , a Notary
Public in and for said State, personally appeared who proved to me
on the basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacity and that by their signature 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.
WITNESS my hand and official seal.
Signature (Seal)
Exhibit A
Legal Description
All that certain real property situated in the County of Los Angeles, State of California,
described as follows:
That portion of Lot 2 of the J.J. Bullis Tract of San Antonio Rancho, in the City of Lynwood,
County of Los Angeles, State of California, as per map recorded in book 3, pages 612 and
613 of Miscellaneous Records, in the office of the county recorder of said county, the
exterior lines of which are more particularly described as follows:
Commencing at the intersection of the centerline of Carlin Avenue, 100 feet wide, and
Atlantic Avenue, 100 feet wide, as shown on map of Tract No. 68944, as per map
recorded in book 1351, pages 22-24 of Maps, in the office of the county recorder of said
county; thence, along the centerline of said Carlin Avenue, north 71 010'40" west 244.83
feet; thence, leaving said centerline, North 18°58'30" east 50.00 feet to the northerly line of
said Carlin Avenue and the true point of beginning for this description; thence, along said
northerly line, north 71 010'40" west 223.97 feet; thence, leaving said northerly line, north
18058'30" east 496.57 feet; thence, south 71 010'39" east 191.80 feet; thence, north
18°58'30" east 50.00 feet; thence, south 71 010'39" east 227.00 feet to the westerly line of
said Atlantic Avenue; thence, along said westerly line, south 18058'30" west 373.72 feet;
thence, leaving said westerly line, north 71 010'40" west 194.83 feet; thence, south
18058'30" west 172.85 feet to the true point of beginning.
Said land is shown as Parcel A of that certain Lot Merger/Lot Line Adjustment, City of
Lynwood, County of Los Angeles, State of California, Certificate of Approval of Lot Merger
No. 2011-01, recorded November 10, 2011 as Instrument No. 20111531045 of Official
Records.
Also except therefrom one-half interest in all the oil, natural gas, petroleum and similar
products pertaining to said premises as described in said documents and in all oil rights
pertaining thereto, for a period of 10 years from the date of the Deed hereinafter referred
to. It being understood that the grantors therein shall have and retain a perpetual right to
one-half of all benefits accruing from any oil development, commission or bonus, or
commission paid or agreed to be paid, prior to the expiration of this reservation and that
the grantors and the grantees shall have equal rights in regard to said oil, gas and
petroleum products, as reserved in the Deed from Harry E. Mangold,
Registered September 23, 1922, as Torrens Document No. 29000, under Certificate of
Title No. AV17737, on file in the Office of the Registrar of Titles of the County of Los
Angeles.
APN: 6186-012-041 & 6186-012-042
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DATE: December 17, 2013
TO: Honorable Chair and Members of the Lynwood Housing
Authority
APPROVED BY: Richard Warne, Interim Executive Director
PREPARED BY: Maria Quinonez, Secretary J'�
Alicia Duarte, Executive Assistant to the City Clerk
SUBJECT: Lynwood Housing Authority Minutes
Recommendation:
Staff recommends that the Lynwood Housing Authority approve the following
minutes:
• Regular Meeting — December 3, 2013
Background: N/A
Discussion & Analysis: N/A
Fiscal Impact: N/A
Coordinated With: N/A
AGENDA
ITEM
LYNWOOD HOUSING AUTHORITY
REGULAR MEETING
December 3, 2013
The Housing Authority of the City of Lynwood met in a regular meeting at Bateman Hall,
11330 Bullis Road on the above date at 7:57 p.m.
Chair Castro presiding.
Commissioners Alatorre, Castro, Hernandez, Santillan-Beas and Solache.
Also present were Interim Executive Director Warne, Authority Counsel Galante, and
Authority Secretary Quinonez.
Authority Secretary Quinonez announced that the Agenda had been posted in
accordance with the Brown Act.
PUBLIC ORAL COMMUNICATIONS
(Regarding Agenda Items Only)
NONE
PUBLIC ORAL COMMUNICATIONS
NONE
CONSENT CALENDAR
It was moved by Commissioner Santillan-Beas, seconded by Commissioner Alatorre to
approve the consent calendar and received and file staff reports.
AYES: COMMISSIONERS ALATORRE, CASTRO, HERNANDEZ, SANTILLAN-
BEAS AND SOLACHE
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
Item #4. MINUTES OF PREVIOUS MEETING
Regular Meeting of October 1, 2013
Item #5. APPROVAL OF AN AGREEMENT TO CONTINUE PROVIDING
PROFESSIONAL SERVICES REGARDING HOUSING RELATED
PROJECTS FOR THE LYNWOOD HOUSING AUTHORITY AND GRANT
SUPPORT SERVICES
RESOLUTION NO. 2013.002 ENTITLED:
A JOINT RESOLUTION OF THE CITY OF LYNWOOD (CITY), AND THE CITY OF
LYNWOOD HOUSING AUTHORITY (LHA) APPROVING THE AGREEMENT WITH
MDG ASSOCIATES, INC. FOR ON-CALL SERVICES FOR THE HOUSING
REHABILITATION PROGRAM, AFFORDABLE HOUSING RELATED SERVICES, AND
GRANT RELATED SERVICES
CLOSED SESSION
NONE
ADJOURNMENT
Having no further discussion, it was moved by Commissioner Santillan-Beas, seconded
by Commissioner Alatorre, and carried to adjourn the regular Lynwood Housing
Authority meeting at 7:58 p.m.
Aide Castro, Chair Maria Quinonez, Authority Secretary