HomeMy Public PortalAboutC-92-002 - Thomas Safran & Associates Disposition and Development AgreementV
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DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between
CARSON REDEVELOPMENT AGENCY
("Agencyl') ►
and
THOMAS SAFRAN & ASSOCIATES, a Sole Proprietorship
920707 plw b559-3.jar (1)
("Developer").
Exhibit Wo. 7
r
A
TABLE OF CONTENTS
Page
ARTICLE
1.
SUBJECT OF AGREEMENT . . . . . . . . . . . . . .
1
1.1
Purpose of Agreement . . . . . . . . . . . . . .
1
1.2
The Site . . . . . . . . . . . . . . . . . .
1
1.3
Parties to the Agreement . . . . . . . . . . . .
1
1.3.1 The Agency . . . . . . . . . . . . . . .
1
1.3.2 The Developer . . . . . . . . . . .
2
1.4
Limitation on Rights, Duties, and Obligations . .
2
ARTICLE
2.
AGENCY LOAN . . . . . . . . . . . . . . . . . . .
2
2.1
Agency Loan . . . . . . . . . . . . . . . . . . .
2
2.2
Reduction of Agency's Funding Obligation . . . .
2
2.3
Funding of Agency Loan and Disbursement
of Agency Loan Proceeds . . . . . . . . . . . . .
. 2
2.3.1 Conditions to Funding Loan
for Purchase of Site . . . . . . . . . .
. 3
2.4
Interest on, and Maturity of, Agency Loan . . . .
3
2.5
Repayment of Agency Loan . . . . . . . . . . . .
4
2.5.1 Annual Payments . . . . . . . . . . . .
4
2.5.2 Refinancing Payments . . . . . . . . . .
4
2.5.3 Appreciated Value Payments . . . . . . .
4
2.5.4 Developer's Right to Encumber
5
2.5.5 Limitation on Payments . . . . . . . . .
5
2.6
Definitions . . . . . . . . . . . . . . . . . . .
5
2.7
Security for Agency Loan . . . . . . . . . . . . .
8
2.8
Subordination of Agency Deed of Trust and
Regulatory Agreement . . . . . . . . . . . . .
8
2.8.1 . . . . . . . . . . . . . . . . . . . .
. 8
2.8.2 . . . . . . . . . . . . . . . . . . . .
. 8
ARTICLE
3.
FINANCIAL OBLIGATIONS OF DEVELOPER . . . . . . .
9
3.1
Alternate Funding Sources . . . . . . . . . . . .
9
3.2
Front -End Costs . . . . . . . . . . . . . . . . .
10
3.2.1 Initial Front -End Costs . . . . . . . .
10
3.2.2 Additional Front -End Costs . . . . . . .
10
3.2.3 [intentionally omitted] . . . . _ . . .
11
3.2.4 Reimbursement of Initial and
Additional Front -End Costs in
Certain Circumstances . . .
3.2.5 Cancellation and Forgiveness of
Agency Loan . . . . . . . . . . . . . .
11
ARTICLE
4.
ACQUISITION OF SITE . . . . . . . . . . . . . . .
11
4.1
Purchase . . . . . . . . . . . . . . . . .
11
4.2
Remediation of Existing Hazardous Condition . . .
12
4.3
Lot -Tie Agreement . . . . . . . . . . . . . . . .
12
920707 plw b559.3.jar (1) — i —
ARTICLE 5.
DISPOSITION OF THE SITE . . . . . . . . . . . . .
12
5.1
Sale and Purchase . . . . . . . . . . . . . . .
12
5.2
Developer's Purchase Price . . . . . . . . . . .
12
5.2.1 Deposit . . . . . . . . . . . . . .
13
5.2.2 Balance of Purchase Price . . . . . . .
13
5.3
Escrow . . . . . . . . . . . . . . . . . . . . .
13
5.3.1 Instructions . . . . . . . . . . . . . .
13
5.3.2 Recordation of Deed(s) . . . . . . . . .
13
5.3.3 Fees, Charges and Costs . . . . . . . .
13
5.3.4 Escrow Holder's Authority . . . . . . .
13
5.3.5 Termination of Escrow . . . . . . . . .
13
5.3.6 [intentionally omitted] . . . . . . . .
15
5.3.7 Amendments . . . . . . . . . . . . . . .
15
5.3.8 Notices . . . . . . . . . . . . . . . .
15
5.3.9 Liability of Escrow Holder . . . . . . .
15
5.4
Conveyance of Title and Delivery of Possession
15
5.5
Form of Deed . . . . . . . . . . . . . . . . .
16
5.6
Condition of Title . . .
5.6.1 Restrictions and Subordination Thereof .
16
5.6.2 Title and Exceptions Thereto . . . . . .
16
5.6.3 Easements and Dedications . . . . . . .
17
5.7
Time and Place of Delivery of Deed(s) . . . . . .
17
5.8
Title Insurance . . . . . . . . . . . . . . . . .
17
5.9
Taxes and Assessments . . . . . . . . . . . . . .
17
5.10
Occupants of the Site . . . . . . . . . . . . . .
17
5.11
Zoning of the Site . . . . . . . . . . . . . . .
17
5.12
Condition of the Site . . . . . . . . . . .
17
5.12.1 Release of Liability . . . . . . . . . .
18
5.12.2 Completion of Investigations, Tests
and Analysis . . . . . . . . . . . . . .
18
5.12.3 Clean-up of Sherry Property . . . . . .
18
5.13
Pre -Construction Work by the Developer . . . . .
19
5.13.1 License . . . . . . . . . .
19
5.13.2 Access to Information . . . . . . . . .
20
5.13.3 Access of Third Parties . . . . . . . .
20
5.13 .4 Permits . . . . . . . . . . . . . . . .
20
5.13.5 Limitation on Improvements and Work
20
5.13.6 Liens . . . . . . . .
20
5.13.7 Reimbursement of Pre -Construction Costs .
21
5.14
Conditions Precedent . .. . . . . . . . .
21
5.15
Agency's Remedies and Rights of
Termination Prior to Conveyance . . . . . . . . .
22
ARTICLE 6.
DEVELOPMENT OF THE SITE . . . . . . . . . . . . .
22
6.1
Development of the Site by Developer . . . . . .
22
6.1.1 Scope of Development . . . . . . . . . .
22
6.1.2 Schematic Design Documents . . . . . . .
23
6.1.3 Landscaping and Finish Grading Plans
23
6.1.4 Construction Drawings and
Related Documents . . . . . . . . . . .
23
6.1.5 Coordination Between Agency and
Developer . . . . . . . . . . . . . . .
24
920707 p1w b559-3.j8r (1)
920707 plw b559.3.jar {1) — i ii —
6.1.6 Agency Approval of Plans, Drawings
and Related Documents . . . . . . . . .
24
6.2
Construction Contract . . . . . . . . . . . .
24
6.3
Off-site Improvements . . . . . . . . . . . . . .
24
6,4
Plans and Drawings for Off-site Improvements . .
24
6.5
[intentionally omitted] . . . . . . . .25
6.6
Compliance with Project Development Schedule
25
6.7
Completion Bonds . . . . . , . . . . ,
25
6.8
Bodily Injury and Property Damage Insurance . . .
26
6.9
City and Other Governmental Agency Permits . . .
27
6.10
Rights of Access . . . . . . . . . . . .
27
6.11
Local, State and Federal Laws . . . . . . . .
27
6.12
Nondiscrimination During Construction . . . . . .
27
6.13
Waiver of Governmental Fees . . . . . . . . . . .
27
6.14
[intentionally omitted] . . . . . .
28
6.15
Taxes and Assessments. . . . . . . . . . . . . .
28
6.16
Security Financing; Rights of Holder . . . . . .
28
6.16.1 Notice of Default to Mortgage, Deed
of Trust or Other Security Interest
Holder; Right to Cure . . . . . . . . .
28
6.16.2 Failure of Holder to Complete
Improvements . . . . . . . . . . . . . .
29
6.16.3 Right of Agency to Cure Default
under Mortgage, Deed of Trust,
Other Security Interest or Other
Conveyance for Financing . . . . . . . .
29
6.16.4 Right of Agency to Satisfy Other
Liens on the Property After
Title Passes . . . . . . . . . . . . . .
30
6.16.5 Certificate of Completion . . . . . . .
30
6.17
Collateral Assignment of Disposition and
Development Agreement and Agency Consent Thereto
31
6.18
Developer Fee and Payment Thereof . . . . ..
32
6.19
Cost Overruns . . . . . . . . . . . . . . . . .
33
6.19.1 Sharing of Cost Overruns . . . . . . . .
33
6.19.2 Approval and Expenditure of
Contingency Reserves . . . . . . . . . .
33
6.20
Sharing of Cost Savings . . . . . . .
33
6.21
Governmental Approvals . . . . . . . . . . .
34
6.22
Cost Certification/Agency Audit . . . . . . .
34
6.22.1 . . . . . . . . . . . . . .
34
6.22.2 . . . . . . . . . . . . . .
34
6,22.3 . . . . . . .
34
6.22,4 . . . .
35
.
6.22.5 . .
35
6.22.6
35
6.23
Liens.
35
6.24
Certificate ofOccupancy
36
ARTICLE 7.
[INTENTIONALLY OMITTED] : . . . . . .
36
ARTICLE 8.
USE AND RENTAL OF THE SITE . . . . . . . . . . .
36
8.1
Uses . . . . . . . . . . . . . . . . . . . . . .
36
920707 plw b559.3.jar {1) — i ii —
Ll
8.2
Rental Restrictions . . . . . . . . . . . .
36
8.2.1 Units Restricted to Senior Citizen
Rentals . . . . . . . . . . . . . . .
36
8.2.2 Restrictions on Rental of Very
Low/Lower Income Units . . . . . . . . .
36
8.2.3 Restrictions on Rental of Moderate
Income Units . . . . . . . . . . . . . .
36
8.2.4 Definitions . . . . . . . . . . . . . .
37
8.2.5 Initial Rent . . . . . . . . . . . . . .
37
8.2.6 Annual Rent Increases . . . . . . . . .
37
8.2.7 Limitation on Rent Increases . . . . . .
39
8.2.8 Successor Tenants Rents . . . . . . . .
39
8.2.9 Annual Report . . . . . . . . . . . . .
40
8.3
Rental Subsidy . . . . . . . . . . . . . . . . .
40
8.4
Rental Subsidy Program . . . . . . . . . . . . .
40
8.4.1 Payment of Subsidy . . . . . . . . . . .
40
8.4.2 Carryover of Subsidy . . . . . . . . . .
40
8.4.3 Accounting for Subsidy Payments . . . .
40
8.5
Rights of Agency . . . . . . . . . .
41
8.6
Obligation to Refrain from Discrimination . . . .
42
8.7
Form of Nondiscrimination and Non -segregation
Clauses . . . . . . . . . . . . . . . . . . . . .
42
8.8
Effect and Duration of Covenants . . . . . . . .
43
ARTICLE 9.
MANAGEMENT OF THE PROPERTY . . . . . . . . . . .
43
9.1
Operation, Maintenance and Repair . . . . . . . .
43
9.2
Leasing and Occupancy . . . . . . . . . . . . . .
44
9.3
Pre -Leasing . . . . . . . . . . . . . . . . . . .
44
9.4
Management of Project . . . . . . . . . . . . . .
44
9.5
Management Fee . . . . . . . . . . . . . . . . .
45
9.6
Management Agency's Failure to Perform . . . . .
45
9.7
Public Agency Rights of Access for
Construction, Repair and Maintenance
of Public Improvements and Facilities . . . . . .
45
ARTICLE 10.
DEFAULTS, REMEDIES AND TERMINATION . . . . . . .
46
10.1
Defaults46
10.2
Non -Waiver of Rights or Remedies
46
10.3
Legal Actions . . . . . . . . . . . . . . . . . .
46
10.3.1 Applicable Law . . . . . . . . . . . . .
46
30.3.2 Service of Process . . . . . . . . . . .
46
10.4
Rights and Remedies are Cumulative . . . . . . .
47
ARTICLE 11.
GENERAL PROVISIONS . . . . . . . . . . . . . . .
47
11.1 Notices, Demands and Communications Between
the Parties . . . . . . . . . . . . . . . . 47
11.2 Conflict of Interests . . . . . . . . . . . . 47
11.3 Warranty Against Payment of Consideration
for Agreement . . . . . . . . . . . . . . . . . . 47
11.4 Nonliability of Agency Officials and Employees 47
920707 plw 6559-3.}er {l} — iv —
11.5
Enforced Delay; Extension of Times of
Performance . . . . . . . . . . . . .
. . . .
47
11.6
Inspection of Books and Records . . . . .
. . . .
48
11.7
Approvals by Agency and Developer . . . .
. . . .
48
11.8
Plans and Data . . . . . . . . . . . . .
. . . .
48
11.9
Brokerage Commissions. . . . . . . . . .
. . . .
48
ARTICLE 12.
SPECIAL PROVISIONS . . . . . . . . . . .
. . . .
49
12.1
Agency Approval of Covenants, Conditions
and
Restrictions . . . . . . . . . . . . . .
. . . .
49
12.2
Approvals in writing . . . . . . . . . .
. . . .
49
ARTICLE 13.
ENTIRE AGREEMENT, WAIVERS AND AMENDMENT
. . . .
49
ARTICLE 14.
TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY . . .
49
ARTICLE 15.
ASSIGNMENT, TRANSFER AND SALE . . . . .
. . . .
49
15.1
In General . . . . . . . . . . .
.
49
15.2
Consent Prior to Issuance of Certificate
of
Completion . . . . . . . . . . . . . .
. . . .
49
15.3
Consent During 5 Years After Issuance
of Certificate of Completion . . . . . .
. . . .
50
15.4
Consent After 5 Years After Issuance
of Certificate of Completion . . . . . .
. . . .
50
15.5
Transfer Without Consideration . . . . .
. . . .
50
15.6
Assumption of Obligations . . . . . . . .
. . . .
50
920707 plw b559-3.jer (1) —
0
ATTACHMENTS
Page
Attachment
No.
1
Site Map . . . . . . . . . . . . . . . .
1
Attachment
No.
2
Legal Description . . . . . . . . . . . .
1
Attachment
No.
3
Disbursement Schedule . . . . . . . . . .
2
Attachment
No.
4
Promissory Note . . . . . . . . . . . . .
. 8
Attachment
No.
5
Deed of Trust . . . . . . . . . . . . . .
. 8
Attachment
No.
6
Subordination Agreement . . . . . . . . .
. 9
Attachment
No.
7
Front -End Costs Payable By Developer . .
10
Attachment
No.
8
California Environmental ltr. to Sa€ran .
12
Attachment
No.
9
California Environmental ltr. to Hannifin
12
Attachment
No.
10
Grant Deed . . . . . . . . . . . . . . .
16
Attachment
No.
11
Project Development Schedule . . . . . .
22
Attachment
No.
12
Scope of Development . . . . . . . . . .
22
Attachment
No.
13
Collateral Assignment of Disposition and
Development Agreement and
Consent to Assignment . . . . . . . . 31 &
32
Attachment
No.
14
Development Pro Forma . . . . . . . . . .
33
Attachment
No.
15
Regulatory Agreement . . . . . . . . . .
16
Attachment
No.
16
Senior Citizen Rental Assistance Program
40
Attachment
No.
17
Management Plan . . . . . . . . . . . . .
44
Attachment
No.
18
Rental Agreements . . . . . . . . . . . .
44
Attachment
No.
19
Management Agreement . . . . . . . . . .
45
920707 plw b559-3.jer (1) — vi
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into by and
between the CARSON REDEVELOPMENT AGENCY, a public body, corporate
and politic ("Agency"), and THOMAS L. SAFRAN d.b.a. THOMAS SAFRAN
& ASSOCIATES, a Sole Proprietorship, or his permitted assigns
("Developer"). Agency and Developer agree as follows:
ARTICLE 1. SUBJECT OF AGREEMENT
1.1 Put -pose of Agreement. The purpose of this
Agreement is to effectuate the provisions of the Housing Element
of the General Plan of the City of Carson ("City") and the
Community Redevelopment Law by providing for the development of
very low and moderate income senior citizen housing on a site
mutually agreeable to Agency and Developer (the "Site"). The
proposed purchase and development of the Site ("Project")
pursuant to this Agreement, and the fulfillment generally of this
Agreement, are in the vital and best interests of the City of
Carson, California (the "City") and the health, safety, and
welfare of its residents will effectuate Agency's Redevelopment
Plan, as amended, for the Carson Redevelopment Project Area
No. 2 , adopted by Ordinance No. 74-295 on February 19 , 19 74
and is in accord with the public purposes and provisions of
applicable federal, state, and local laws and requirements.
Agency is a public body authorized to acquire property by eminent
domain pursuant to applicable laws. However, nothing in this
agreement constitutes any commitment to acquire any property by
eminent domain. All references herein to acquisition of property
by Agency relate solely to acquisition through a consensual
transaction.
1.2 The Site. The "Site' agreed upon is that certain
real property shown on the 'Site Map" which is attached hereto
and incorporated herein as Attachment No. 1. The Site consists
of two separately owned parcels of land, located at 22127 So.
Avalon Boulevard (currently owned by Allan A. Sherry and
hereinafter referred to as the "Sherry Property") and 22113 So.
Avalon Boulevard (currently owned by Michael J. and Peggy
Quagletti hereinafter referred to as the "Quagletti Property") in
the City of Carson which are identified on the Site Map. A legal
description of the parcels which comprise the Site is attached
hereto and incorporated herein as Attachment No. 2.
1.3 Parties to the Agreement.
1.3.1 The Agency. Agency is a public body,
corporate and politic, exercising governmental functions and
powers and organized and existing under the Community
Redevelopment Law of the State of California. The principal
office of the Agency for purposes of this Agreement is CARSON
REDEVELOPMENT AGENCY, 701 East Carson Street, Carson, California
920707 plw b559-3.jer (1)
90745. "Agency", as used in this Agreement, includes the Carson
Redevelopment Agency, and any assignee of or successor to its
rights, powers and responsibilities.
1.3.2 The Developer. Developer is Thomas L.
Safran, an individual, d.b.a. THOMAS SAFRAN & ASSOCIATES a sole
proprietorship. The principal office of Developer for purposes
of this Agreement is THOMAS SAFRAN & ASSOCIATES, 11812 San
Vicente Boulevard, Suite 600, Los Angeles, California 90049, or
such other address as Developer may designate from time to time.
1.4 Limitation on Rights, Duties and Obligations.
Except as provided in Sections 3.2 and 4.1 and Articles, 10, 11,
14 and 15, the rights, duties and obligations created and imposed
by this Agreement shall be of no force or effect unless and until
the Sherry and Quagletti properties are acquired pursuant to the
terms and conditions of this Agreement.
ARTICLE 2. AGENCY LOAN
2.1 Agency Loan. Agency agrees to loan the Developer
Five Million Dollars ($5,000,000.00), or so much thereof as is
necessary (the "Agency Loan"), for the purposes of acquiring the
Site, constructing thereon the improvements described herein (the
"Improvements"), and for the payment of costs and expenses
related to the development of the Project.
2.2 Reduction of Agency's Fundin obligation.
Developer intends to use his best efforts to obtain a
construction loan (the "Construction Loan") from a conventional
lender (the "Construction Lender") to finance, with the proceeds
of the Agency Loan, the construction of the Improvements. If,
and to the extent, Developer is able to obtain funds pursuant to
Section 3.1 which is consistent with the purposes of the Project
and approved by Agency, the maximum amount to be loaned by Agency
shall be reduced by the net amount obtained from such source.
2.3 Funding of Agency Loan and Disbursement of Agency
Loan Proceeds. Developer shall use reasonable efforts to cause
the Construction Lender to enter into an agreement to disburse
the proceeds from the Agency Loan, as well as the proceeds from
the Construction Loan, on terms and conditions mutually agreeable
to Agency, Developer and the Construction Lender. If the
Construction Lender fails or refuses to enter into an agreement
to disburse the proceeds from the Agency Loan, then Agency shall
disburse the proceeds from the Agency Loan to Developer in
accordance with the terms and conditions of the "Disbursement
Schedule", attached hereto and incorporated herein as Attachment
No. 3. Agency and Developer agree that the proceeds of the
Construction Loan and Agency Loan shall not be commingled and
that the ratio of (i) the proceeds of any disbursement requested
under the Agency Loan to (ii) the proceeds of any disbursement
requested under the Construction Loan, shall be the same as the
ratio of (a) the total principal amount of the Agency Loan to (b)
920707 pLw b559-3.jer (1) — 2 —
the total principal amount of the Construction Loan allocated
Hard Costs (as defined below).
2.3.1 Conditions to Funding Loan for Purchase
of Site. The following conditions precedent must be satisfied or
waived by Agency before Agency shall be obligated to fund the
Purchase Price and sell the Site in accordance with this
Agreement:
(i) Developer shall have obtained a binding
commitment from a Construction Lender of
Developer's choice committing to make a
Construction Loan to Developer for
construction of the Improvements, on terms
and conditions acceptable to Developer in
Developer's reasonable discretion, and
approved by Agency provided that Agency's
approval shall not be unreasonably withheld
if the Construction Loan documentation
contains provisions giving Agency the rights
set forth in Subsections 6.16.2, 6.16.3,
6.16.4 and if the terms and conditions are
acceptable to Developer and are consistent
with the prevailing rates, fees and
requirements of commercial lenders at the
time the Construction Loan is made; and
Developer shall have obtained a binding
commitment from a lender of Developer's
choice committing to make a permanent loan to
Developer to discharge and fully satisfy the
Construction Loan upon the due date of the
Construction Loan, or earlier, on terms and
conditions acceptable to Developer in
Developer's reasonable discretion, and
approved by Agency provided that Agency's
approval shall not be unreasonably withheld
if such terms and conditions are consistent
with the prevailing rates, fees and
requirements of commercial lenders at the
time the loan is made ("the Permanent Loan").
2.4 Interest on, and Maturity of, Ao_ency Loan. The
principal balance of the Agency Loan from time to time
outstanding shall bear 5% simple interest from the date on which
the certificate of occupancy (the "Certificate of Occupancy") is
issued with respect to the Project until repaid in full. The
outstanding balance of the Agency Loan, and all accrued but
unpaid interest thereon, shall be due and payable on the 30th
anniversary of the date on which the Certificate of occupancy is
issued (the "Maturity Date"), or January 1, 2025, whichever first
occurs. If the Developer defaults on the Agency Loan or breaches
this Agreement, or if due to no fault of the Agency the
Certificate of occupancy is not issued by January 1, 1995, then
all sums outstanding on the Agency Loan shall become immediately
due and payable at the option of the Agency.
920707 plw b559-3.jar (1) — 3 —
2.5 Repayment of Agency Loan.
2.5.1 Annual Payments. Developer shall make
annual payments ("Annual Payments") during the term of the Agency
Loan equal to the "Agency's Percentage" (defined in Subsection
2.6.i below) of "Positive Net Cash Flow" (defined below) derived
from the operation of the Project, and Developer shall be
entitled to retain the remainder of such Positive Net Cash Flow.
The first Annual Payment shall be due one year after the issuance
of the Certificate of Occupancy and each Annual Payment
thereafter shall be due on the yearly anniversary of the date on
which the first Annual Payment was due. Any such Annual Payments
shall be applied first to accrued but unpaid interest on the
Agency Loan, and the remainder, if any, shall be applied in
reduction of the principal balance of the Agency Loan. Positive
Net Cash Flow shall be deposited monthly into an interest bearing
account and interest earned thereon shall be added to such
Positive Cash Flow. Notwithstanding the foregoing, from the date
of issuance of the Certificate of Occupancy through the first
anniversary of issuance of the Certificate of Occupancy, Positive
Net Cash Flow (and accrued interest thereon) may be expended for
Total Project Costs (as defined in Section 5.18); thus, the first
Annual Payment from such Positive Net Cash Flow shall be reduced
in an amount equal the product of Agency's Percentage times the
amount of Positive Net Cash Flow expended through the first
anniversary of the issuance of the Certificate of Occupancy to
pay some or all of the Total Project Costs. Developer shall pay
the Agency's Percentage of such Positive Net Cash Flow, plus
Agency's share of interest earned thereon, annually, on such
anniversary date of issuance of the Certificate of Occupancy, and
Developer shall retain the remainder of such Positive Net Cash
Flow, plus Developer's share of interest earned thereon. Agency
shall not be entitled to receive any portion of the Positive Net
Cash Flow following repayment in full of the Agency Loan and all
accrued but unpaid interest thereon.
2.5.2 Refinancing Payments. In the event of
any "Refinancing" (defined below), Developer shall pay the
Agency's Percentage of the "Excess Proceeds" (defined below)
derived from such Refinancing, to the extent that the Agency
Loan, and all accrued but unpaid interest thereon, have not
previously been paid in full, and Developer shall be entitled to
retain the remainder of such Excess Proceeds. Any payment made
to Agency from such Excess Proceeds (a "Refinancing Payment")
shall be made at the close of the refinancing and shall be
applied first to accrued but unpaid interest on the Agency Loan,
and the remainder, if any, in reduction of the principal balance
of the Agency Loan.
2.5.3 Appreciated_ Value Payments. In the
event of any "Sale" (defined below), Developer shall pay the
Agency's Percentage of the Excess Proceeds from such Sale, to the
extent that the Agency Loan, and all accrued but unpaid interest
thereon, have not previously been paid in full, and Developer
920707 plw b559-3.jsr (1) " 4 —
shall be entitled to retain the remainder of such Excess
Proceeds. Any payment made to Agency from such Excess Proceeds
(an "Appreciated Value Payment") shall be made at the close of
the Sale and shall be applied first to accrued but unpaid
interest on the Agency Loan, and the remainder, if any, in
reduction of the principal balance of the Agency Loan.
2.5.4 Developer's Right to Encumber. Subject
to the limitations of this Subsection 2.5.4, Developer may, at
any time and from time to time, with Agency's consent first had
and obtained, which consent shall not be unreasonably withheld,
mortgage, hypothecate, grant control of, or encumber all or a
specific portion of the Site, the Project, the Improvements,
Developer's interest in this Agreement or any of the foregoing,
or any interest in Developer or any partner of Developer.
Notwithstanding the foregoing, Developer shall not enter into any
Refinancing transaction which (i) would cause the aggregate
amount of indebtedness (the repayment of which is secured by an
interest in the Site, the Project, the Improvements, or the
Developer's interest in any of the foregoing) to exceed 80% of
the fair market value of the property so encumbered, or (ii)
cause Developer's net operating income derived from the operation
of the Project (computed without deduction for debt service) to
be less than 110% of all debt service which will be payable
following such Refinancing transaction.
2.5.5 Limitation on Payments. Notwithstanding
anything to the contrary contained herein, Developer shall not be
required to make any payments hereunder (including without
limitation the Annual Payments, the Refinancing Payments, or the
Appreciated Value Payments described in this Section 2.5) to the
extent that the outstanding principal balance of the Agency Loan,
and all accrued but unpaid interest thereon, has previously been
paid in full.
2.6 Definitions. As used herein, the following terms
shall have the meanings ascribed below:
a. "Refinancing" shall mean any act or
process by which Developer borrows any funds, credit or
allowance, repayment or reimbursement of which is secured in
whole or in part by Developer's interest in the Site or the
Project, or by any direct or indirect interest in Developer.
Refinancing shall include any so-called "convertible mortgage",
pursuant to which any person or entity receives an option or
right to acquire any interest in the Site, the Project, the
Improvements, or Developer's interest therein in lieu of
repayment. Refinancing shall not include (i) any Sale or other
transfer of all or any part of the Site, the Project, the
Improvements, Developer's interest in any of the foregoing, or
any interest in Developer or any partner of Developer (including
any transfer of limited partnership interests or transfers to
facilitate the syndication of interests in the Developer or the
920707 p(w b559-3.1er (1) — 5 —
Project) except as collateral securing the performance of any
obligation, or (ii) the Construction Loan.
b. "Excess Proceeds" with respect to any
Refinancing shall mean (i) any and all proceeds, credits, offsets
and allowances directly or indirectly received by or allowed to
Developer from or by any source in any way, relating to any
Refinancing, minus (ii) the sum of (aa) Deductible Expenses
relating to such Refinancing, and (bb) the sum of principal and
interest paid from the proceeds of such refinancing on account of
any and all loans made by any person or entity (other than a
governmental or quasi -governmental entity), repayment of which is
secured by a mortgage or deed of trust encumbering all or any
part of the Improvements, the Site or any interest therein.
C. The term "Excess Proceeds" with respect
to any Sale shall mean (i) the Gross Sales Proceeds, minus (ii)
the sum of (aa) Deductible Expenses relating to such Sale, and
(bb) the sum of principal and interest paid with the proceeds of
such Sale on account of any and all loans made by any person or
entity (other than a governmental or quasi -governmental entity),
repayment of which is secured by a mortgage or deed of trust
encumbering all or any part of the Improvements, the Site or any
interest therein.
d. "Deductible Expenses" shall mean
reasonable, customary and usual expenses actually paid by or on
behalf of Developer in connection with any Refinancing or Sale,
including without limitation reasonable (1) mortgage brokerage or
sale commissions, (2) legal fees, (3) title insurance and survey
fees, (4) escrow fees, (5) transfer and recording taxes and fees,
(6) loan commitment fees, (7) points and/or (8) prepayment
penalties.
e. "Gross Sales Proceeds" shall mean in the
case of a Sale, the gross sales consideration (adjusted for
customary prorations and security deposit credits) realized from
the Sale; provided, however, that if the Sale involves any seller
financing, then the Appreciated Value Payment attributable to
payments made pursuant to such seller financing shall be paid to
Agency only as and if Developer actually receives such payments
(i.e., Agency agrees that Developer shall not be responsible for
making any Appreciated Value Payment from a portion of Gross
Sales Proceeds which might otherwise be attributable to any
payment made pursuant to the terms of any purchase money
financing until and unless Developer actually receives such
payment).
f. "Fair Market Value" shall mean the
appraised fair market value of the Site based on an all-cash sale
of the Site, as of a date not earlier than 30 days prior to the
Maturity Date, performed by an MAI appraiser selected by
Developer and Agency. Such appraiser shall have not less than 10
years experience in appraising residential rental apartment
920707 plw b559-3.jar (1) — 6 —
properties in the geographic market area in which the Site is
situated. In the event that Developer and Agency are unable to
agree upon such MAI appraiser within 10 days after request is
made for such agreement, Developer and Agency shall each
designate in writing within five days thereafter an MAI appraiser
experienced in appraising residential apartment properties in
such geographic market area, and the two appraisers so designated
shall, within 10 days after such designation, choose another
appraiser meeting the qualification requirements set forth above,
which third appraiser shall perform such appraisal. If either
Developer or Agency shall fail to designate an appraiser within
the applicable time period, then the single appraiser designated
shall perform the appraisal. The appraiser, however selected,
shall complete the appraisal no later than 60 days after the date
of request therefor, and such appraisal shall be binding and
conclusive upon the parties.
g. "Positive Net Cash Flow" shall mean the
revenues (without regard to the source) derived from the
operation of the Project minus (i) all real estate and personal
property taxes and assessments, insurance premiums and reasonable
costs of maintenance, operation and management (including without
limitation the management fee provided for in Section 9.5)
incurred by Developer in connection with the operation and
maintenance of the Project, and (ii) the costs of servicing all
loans (other than the Agency Loan) or other sources of financing.
All loans or other sources of financing shall be commercially
reasonable and shall be subject to Agency's approval in
accordance with this Agreement.
h. "Sale" shall mean any sale, land sale
contract, ground lease or any transfer of fee title to all or any
part of the Site, the Project or the Improvements. The term Sale
shall not include (i) encumbrance of the Site pursuant to the
Construction Loan, the Permanent Loan or any Refinancing, (ii)
any transfer of all or any part of the Site, the Project, the
Improvements, Developer's interest in any of the foregoing, or
any interest in Developer or any partner of Developer as
collateral securing performance of any obligation, or (iii) any
transfer of limited partnership interests or transfers to
facilitate the syndication of interests in the Developer or the
Project.
i. "Agency's Percentage" shall be calculated
according to the following ratio, where "AP" equals the Agency's
Percentage, and "AL" equals the principal amount of the Agency
Loan at the time of such calculation (provided, however, that
reductions in the principal amount of the Agency Loan as a result
of payments from Positive Net Cash Flow, pursuant to Subsection
2.5.1 hereof, shall be calculated once each year, on January 1,
and reductions in the principal amount of the Agency Loan as a
result of any other payment hereunder shall be effective as of
the date of such payment);
920707 plw b559.3.jer (1) — 7 —
AL $5.000.000
AP 60%
For example: Assume AL = $4,000,000
$4.000.400 • $5,000.000
AP 60%
AP = 48%
2.7 Security for -Agency Loan. The amounts loaned by
Agency as provided in Section 2.1 above shall be evidenced by a
promissory note and deed of trust in the form attached hereto and
incorporated herein as Attachments Nos. 4 and 5.
2.8 Subordination of Agency Deed of Trust and
Regulatory Agreement. Agency shall, upon Developer's reasonable
request, subordinate the lien of the Agency's Deed of Trust and
the encumbrance of the Regulatory Agreement (as described in
Section 5.6.1 hereof) to the lien of a deed of trust securing
repayment of the Construction Loan and the deed of trust securing
any Permanent Loan, subject to the following terms and
conditions:
2.8.1 With respect to the Construction Loan,
the deed of trust securing the Construction Loan shall contain
provisions giving Agency the rights set forth in Subsections
6.16.2, 6.16.3 and 6.16.4 hereof.
2.8.2 The Construction and Permanent Lenders'
deeds of trust shall provide:
1. that Agency shall have the right, but not
the obligation, to do any act or thing required of Developer in
connection with such loan, following a default by Developer
thereunder and Developer's failure to cure same within 30 days
after Developer's receipt of notice of such default (except in
the case of emergency, in which case Agency may act within a
reasonable time following the notice of default),
2. that upon any default by Developer
(and/or any successors of Developer to the Site) of any or all of
its obligations with respect to the repayment by Developer of the
loan, the Lender shall provide written notice of said default to
Agency, and Agency shall be given the right (but shall have no
obligation) to cure the default prior to the expiration of the
statutory period to cure defaults; such notice shall be
delivered to Agency within the earlier of (A) thirty (30) days
after the date Developer fails to pay any amount due under the
applicable Construction or Permanent Loan (as the case may be),
or (B) concurrently with delivery of any notice of default
delivered to Developer,
920707 ptw b559-3.jor (1) — 8
3. that the Lender shall negotiate with
Agency for up to thirty (30) days following receipt by Agency of
the written notice of default described above, regarding the
obligations of Agency in curing or otherwise satisfying the
default,
4. that if title to the Site and
Improvements is taken by Agency, whether by voluntary or
involuntary transfer, and if Agency timely cures any default on
the loan within the period provided above following a default by
Developer on the loan, then the Lender shall refrain from
exercising any right it may have to accelerate the loan by reason
of the transfer of title to Agency,
5. that Agency shall have the right to
purchase the Site and Improvements from Developer at any time
after a default on the loan which continues beyond any applicable
cure period, and may take title to the Site and Improvements
subject to the Lender's deed of trust and other loan documents,
and
6. that Agency's acquisition of the Site
and Improvements shall not be a default on the loan, and any due
on transfer provision in the Lender's loan documents shall not
apply to a transfer of the Site and Improvements to Agency.
Agency shall have the right to approve the terms and conditions
of any such subordination agreement, which approval shall not be
unreasonably withheld. To effect each such subordination as a
matter of record, Agency shall execute and deliver, without cost
to Developer, a Subordination Agreement in the form attached
hereto and incorporated herein as Attachment No. 6.
ARTICLE 3. FINANCIAL OBLIGATIONS OF DEVELOPER
3.1 Alternate Funding Sources. Developer shall
investigate and attempt to obtain other funding from federal or
state grant programs or other federal or state programs designed
to fund affordable housing projects, for the purpose of funding
the Project. Any such alternate funding shall be approved by
Agency and shall be consistent with the purposes of the Project
and Agency's agreed subsidy thereof. If and to the extent
Developer is successful in obtaining such approved alternate
funding, Developer shall be entitled to the amount of fees, if
any, allowed by the funding source. Any amount of such funding
invested in the Project shall reduce the amount to be loaned by
Agency. If permitted by law, Agency shall supplement from the
Agency Loan, any fee allowed by the funding source so that the
total fee to be paid to Developer shall equal 15% of the funding.
In no event shall Developer be entitled to a•fee (whether paid by
the funding agency and/or from the Agency Loan) in excess of 15%
of the amount of such funding. Any fee payable under this
Section 3.1 shall be in addition to the Developer Fee provided
for in Section 6.18.
920707 ptw b559-3.jar (1) ; 9
3.2 Front -End Costs.
3.2.1 Initial Front -End Costs. Upon and after
the execution of this Agreement, Developer will expend up to
$210,000 to pay the front-end costs listed in Attachment No. 7
hereto (the "Initial Front -End Costs"). In the event that Agency
acquires the Site pursuant to this agreement, then upon the
transfer of fee title to the Site to Developer, Agency shall
reimburse Developer for the Initial Front -End Costs. Any funds
so reimbursed shall constitute an advance under the Agency Loan.
3.2.2 Additional Front -End Costs. Developer
shall request Agency's preapproval in the event that Developer
expects to expend more than $210,000.00 in reasonable front-end
costs for the acquisition and/or development of the Site (any
such preapproved excess reasonable front-end costs are referred
to as "Additional Front -End Costs") at any time prior to the
acquisition by Developer of fee title to the Site. Developer
shall request such preapproval in increments of up to
$100,000.00. Any such request shall be made in writing and shall
include a reasonably detailed description of the purpose for
which such Additional Front -End Costs shall be incurred, the
amount(s) thereof and the estimated payment date of each category
of Additional Front -End Costs. Within ten (10) business days
following its receipt of any such request for preapproval, Agency
shall give Developer written notice of Agency's decision either
to preapprove or reject the inclusion of such costs in Additional
Front -End Costs. If Agency fails to timely notify Developer of
its decision in this regard, Developer shall give Agency a second
notice and if within ten (10) business days of such second notice
Agency shall not have given Developer written notice of Agency's
decision then Agency shall be deemed to have elected to pre -
approve the inclusion of such costs in Additional Front -End
Costs.
(i) If Agency rejects the inclusion of such
costs in Additional Front -End Costs, Agency shall provide
Developer with a reasonably detailed description of the reason
for such rejection; provided, however, that in such event nothing
contained herein shall prevent Developer from incurring
reasonable costs, and funding such costs from the proceeds of the
Agency Loan, following acquisition of fee title to the Site by
Developer.
(ii) If Agency preapproves (or is deemed to
have preapproved) the inclusion of such costs in Additional
Front -End Costs, then at the time of Agency's notice of approval
(or upon request, if,_Agency is deemed to have approved such
Additional Front -End Costs) Agency shall deliver to Developer the
amount of such preapproved Additional Front -End Costs then due
from Developer to third parties, and thereafter, Agency shall
deliver to Developer the amount of any other preapproved
Additional Front -End Costs as and when same become due from
Developer to third parties. Developer shall expend such funds in
920707 p1w b559-3.jor (1) — 10 —
payment of such Additional Front -End Costs. Any funds so
advanced shall constitute an advance under the Agency Loan. The
Purchase Price of the Site, or any portion thereof, shall not
constitute either an Initial Front -End Cost or an Additional
Front -End Cost for purposes of this Agreement.
3.2.3 [intentionally omitted]
3.2.4 Reimbursement of Initial and Additional
Front -End Costs in Certain Circumstances. In the event that the
Agency fails to acquire the Site and transfer the same to
Developer in accordance herewith, or in the event Developer
elects not to acquire the Site pursuant to any right granted
Developer in Sections 5.12.3 and 5.14 hereof, then promptly
following written request therefor (accompanied by reasonable
evidence of expenditure), Agency shall reimburse Developer for
all reasonable Initial Front -End Costs, not to exceed the
$210,000 limit provided for in Subsection 3.2.1. Agency shall
also reimburse or pay (upon presentation of reasonable evidence
of an expenditure or obligation incurred by Developer) any
preapproved Additional Front -End Costs paid or incurred by
Developer, to the extent that such Additional Front -End Costs
have not been previously funded by Agency (that is, to the extent
that such Additional Front -End Costs have not previously been
paid from and treated as a portion of the Agency Loan).
3.2.5 Cancellation and Forgiveness of Agency
Loan. In the event that the Agency fails to acquire the Site and
transfer the same to Developer in accordance herewith, or in the
event Developer elects not to acquire the Site pursuant to any
right granted Developer in Sections 5.12.3 and 5.14 hereof, then
Agency agrees to cancel and forgive the outstanding balance of
Agency Loan. Agency's obligation to make the payments described
in Section 3.2.4 and Agency's agreement to forgive the outstand-
ing balance of Agency Loan is subject to the following conditions
precedent: (aa) Developer shall have complied with the
requirements of Section 11.8 hereof; (bb) Developer shall give,
assign or otherwise transfer to Agency any and all right, title
and interest of Developer to all property which Developer then
may own and which was acquired with the Initial or preapproved
Additional Front -End Costs; and (cc) Developer shall not have
breached any term or condition of this Agreement on Developer's
part to be performed and failed to cure such breach within the
time periods provided herein.
ARTICLE 4. ACQUISITION OF SITE
4.1 Purchase. Agency agrees to use reasonable efforts
to acquire the parcels which comprise the Site for their
appraised values and pursuant to the terms and conditions of the
Purchase and Sale Agreements to be negotiated with the owners of
the parcels which comprise the Site. Notwithstanding anything
provided herein to the contrary, Agency shall have no liability
to any person or entity (including Developer) if it does not
920707 plw b559 -3 -jar (1) — 11 —
purchase the parcels that comprise the Site, except as provided
in Sections 3.2 and 4.1, and Articles 10, 11 and 15. If Agency
is unable to enter into agreements to acquire the parcels by
January 1, 1993, then this Agreement shall terminate.
4.2 Remediation of Existina Hazardous Condition. In
the event that Agency enters into an agreement to acquire the
Sherry property pursuant to this Agreement, then to the extent of
Developer's ability and right to perform hereunder (including
without limitation the right to enter onto the Site) Developer
shall monitor and direct the performance of the tasks described
in (i) the letter, dated August 14, 1991, from California
Environmental to Thomas Safran & Associates, and (ii) the letter,
dated November 27, 1991, from California Environmental to Bret
Hannifin (the "Clean-up Work") attached hereto and incorporated
herein as Attachments 8 and 9 in connection with the remediation
of the existing hazardous condition described in the Phase 1
report prepared by California Environmental. Developer shall be
paid a fee equal to five percent (5%) of the purchase price of
the Sherry Property for the services described in this
Section 4.2, and such fee shall be charged against the Agency
Loan. Such fee shall be payable at the close of escrow for the
purchase of the Sherry Property. Any fee payable under this
Section 4.2 shall be in addition to the Developer Fee provided
for in Section 5.18 hereof.
4.3 Lot -Tie Agreement. In the event Agency acquires
the Sherry and Quagletti Properties, pursuant to this Agreement,
then, prior to the Closing Date, Agency shall use reasonable
efforts to cause a lot -tie agreement, in form and substance
reasonably acceptable to Developer (the "Lot -Tie Agreement"), to
be entered into with respect to the Sherry and Quagletti
Properties. The Lot -Tie Agreement shall be processed according
the City ordinances, rules and policies then in effect, and
Developer pledges to Agency and the City its reasonable
cooperation and assistance in the processing thereof.
ARTICLE 5. DISPOSITION OF THE SITE
5.1 Sale and Purchase. In accordance with and subject
to all the terms, covenants and conditions of this Agreement,
Agency agrees to transfer the Site to the Developer and Developer
agrees to develop the Site for the consideration and subject to
the terms, conditions and provisions set forth herein.
5.2 Developer's Purchase Price. Developer shall pay a
purchase price (the "Purchase Price") for the Site equal to the
sum of (1) the purchase prices, (2) closing costs and (3) costs
of hazardous substance remediation funded by the Agency, which
the Agency has agreed to pay for the Sherry and Quagletti
Properties; provided, however, that the Purchase Price shall in
no event exceed $500,000.00 without Developer's prior written
consent. Developer shall pay the Purchase Price to Agency as
follows:
920707 p[w b559-3.jar (1) — 12 —
5.2.1 Deposit. $1,000 in cash (the "Deposit")
shall be deposited with the Escrow Holder (defined below) by
Developer upon the opening of the Escrow (defined below). Such
Deposit shall be held by Escrow in an interest bearing account,
in a state or national bank which is a member of the FDIC or a
savings and loan institution which is a member of the FSLIC.
Interest earned on the Deposit shall accrue for the account of
Developer. Upon the close of the Escrow, such Deposit, plus all
accrued interest thereon, shall be applied against the Purchase
Price.
5.2.2 Balance of Purchase Price. The balance
of the Purchase Price shall be delivered into Escrow on or before
one business day before the Closing Date (defined below), in cash
or by confirmed wire transfer in immediately available funds.
Such balance shall be funded from the Agency Loan.
5.3 Escrow. Agency and Developer agree to open an
escrow (the "Escrow") for transfer of the Site with Chicago Title
Company (the "Escrow Holder"), upon the later to occur of (i) the
execution and delivery of this Agreement by each of the parties
hereto, or (ii) twenty (20) business days following execution of
agreements between Agency and owners of the parcels that comprise
the Site whereby Agency is entitled to acquire said parcels.
5.3.1 Instructions. Joint escrow instructions
shall be executed by Agency and Developer with respect to the
transfer of the Site and a duplicate original of this Agreement
shall be delivered to the Escrow Holder upon the opening of
Escrow. Agency and Developer shall execute such other escrow
instructions as shall be reasonably necessary and consistent with
this Agreement.
5.3.2 Recordation of Deed(s). The transfer of
title to the Site to Developer shall be made by Grant Deed
(defined below). Upon delivery of the Grant Deed to the Escrow
Holder by Agency pursuant to Section 5.7 of this Agreement (or,
at the Agency's election to transfer by direct deed from each
owner to Developer, upon delivery of appropriate Grant Deeds) in
either case transferring title to the Site to Developer, the
Escrow Holder shall record such Grant Deed(s) when title can be
vested in the Developer in accordance with the terms and
provisions of this Agreement. The Escrow Holder shall cause any
transfer taxes required by law to be paid.
5.3.3 fees, Charges and Costs. Developer
shall pay in Escrow to the Escrow Holder all of the normal and
reasonable fees, charges, and costs of Escrow Holder or otherwise
associated with closing the transaction contemplated hereby,
promptly after the Escrow Holder has notified Developer of the
amount of such fees, charges and costs, but not earlier than
tern (10) days prior to the date for the close of escrow for the
Site. Such fees, charges and costs shall include, but not be
limited to the following:
920707 plu b559-3.jar (1) — 13 —
a. Costs necessary to place the title in the
condition required by the provisions of this
Agreement;
b. The escrow fee;
C. Notary fees;
d. Any State, County, or city Documentary Stamps;
e. The premium for the title insurance policy
provided for in Section 5.8 of this Agreement; and
f. Any prorated Ad valorem taxes, upon the Site for
any time subsequent to conveyance of title.
Notwithstanding the foregoing, Agency shall use reasonable
efforts to cause the entity or entities which transfer fee title
to the Site to Developer to pay for all fees, charges and costs
which are normally and customarily paid by a seller in
transactions involving real property in Los Angeles County,
California (such fees, charges and costs will include the
following, without limitation: (i) costs necessary to place the
title in the condition required by the provisions of this
Agreement; (ii) one-half of Escrow Holder's fees; (iii)
documentary transfer taxes; and (iv) the costs of the title
insurance policy provided for in Section 5.8 (provided, however,
that if Developer elects to require an ALTA policy of title
insurance, Developer shall pay for the costs of upgrading such
policy from CLTA coverage to ALTA coverage)). In any event, any
amount which either Developer or Agency is required to pay in
connection herewith shall be deemed to be part of the Front -End
costs described in Section 3.2 hereof, and shall be funded from
the proceeds of the Agency Loan.
5.3.4 Escrow Holder's Authority. The Escrow
Holder is authorized to:
1. Pay, and charge Developer for any fees, charges
and costs payable under this Section 5.3 of this
Agreement. Before such payments are made, the
Escrow Holder shall notify Developer and obtain
Developer's approval of the fees, charges and
costs necessary to clear and convey title which
approval shall not be withheld if the amounts of
such charges are reasonable and necessary.
2. Disburse funds and deliver documents to the party
or parties entitled thereto when the conditions of
the Escrow have been fulfilled by Agency and
Developer.
3. Record any instruments delivered through Escrow if
necessary or proper to vest title in the Developer
or its nominee in accordance with the terms and
provisions of this Agreement.
5.3.5 Termination of Escrow. If Escrow is not
in condition to permit the conveyance of title before the time
920707 plw b559-3.jar (1) — 14 —
established therefor in Section 5.4 of this Agreement, either
party who then shall have fully performed the acts to be
performed before the conveyance of title may, in writing,
terminate this Agreement and demand the return of its money,
papers, or documents. No termination or demand for return shall
be recognized until ten (10) days after the Escrow Holder shall
have mailed copies of such demand to the other party at the
address of its principal place of business. If any objections
are raised within the 10 -day period, the Escrow Holder is
authorized to hold all money, papers and documents until
instructed by mutual agreement of the parties or upon failure
thereof, by judgement or order of a court of competent
jurisdiction. If no such demands are made, the Escrow Holder
shall perform all acts required by the escrow instructions for
the sale and purchase of the Site as soon as possible.
Notwithstanding the foregoing, any termination by a non -
defaulting party shall not terminate the non -defaulting party's
right to receive damages against the defaulting party for breach
hereof, but damages recoverable by a non -defaulting party shall
be limited to actual damages, and the non -defaulting party shall
not be entitled to recover any consequential damages such as lost
profits.
5.3.6 [intentionally omitted]
5.3.7 Amendments. Any amendment to the escrow
instructions shall be in writing and signed by both Agency and
Developer. At the time of any amendment the Escrow Holder shall
agree to carry out its duties as Escrow Holder under such
amendment.
5.3.8 Notices. All communications from the
Escrow Agent to Agency or Developer shall be directed to the
appropriate address as set forth in Section 1.3 of this
Agreement, and in the manner established in Section 11.1 of this
Agreement for notices, demands, and communications between Agency
and Developer.
5.3.9 Liability of Escrow Holder. The
liability of the Escrow Holder under this Agreement is limited to
performance of the obligations imposed upon it under
Subsections 5.2.1, 5.3.2, 5.3.4, 5.3.5, 5.3.6, 5.4, 5.5, 5.6,
5.7, 5.8, 5.9, and 5.14 of this Agreement.
5.4 Conveyance of Title and Delivery of Possession.
Subject to any mutually agreed upon extension of time, conveyance
of title to the Site in accordance with the provisions of
Subsection 5.3.2 of this Agreement shall be completed no later
than 3 business days after (i) Agency has notified Developer that
Agency is in a position to close escrow on both parcels which
comprise the Site, (ii) all of the terms and conditions of
Subsection 2.3.1 and Section 5.14 have been satisfied (the
"Closing Date"). Developer shall accept title to and possession
of the Site on the Closing Date. Agency and Developer agree to
920707 plu b559-3.jar 0 ) — 15 —
perform all acts reasonably necessary to cause fee title to the
Site to be conveyed to Developer in accordance with the foregoing
provisions. Except as otherwise provided in this Agreement,
possession of the Site shall be delivered to Developer
concurrently with the conveyance of title, except that access and
entry may be granted before conveyance of title as permitted
pursuant to Subsection 5.13.1 of this Agreement.
5.5 Form of Deed. Subject to the terms and provisions
hereof, the Agency shall timely and properly execute,
acknowledge, and deliver to Developer, or its approved assignee,
fee title to the Site by its grant deed or by grant deeds
directly from each owner of the Sherry and Quagletti Properties,
in the condition provided in Section 5.6 of this Agreement, in
the form attached hereto and incorporated herein as Attachment
No. 10 (the "Grant Deed")
5.6 Condition of Title. The Agency shall convey, or
cause to be conveyed, to Developer, or its approved assignee, fee
simple title to the Site subject to all recorded liens,
encumbrances, assessments, easements, agreements to be recorded
pursuant to the terms and conditions of this Agreement, and other
matters which are not objected to by Developer pursuant to
Subsection 5.6.2 hereof.
5.6.1 Restrictions and Subordination Thereof.
Developer acknowledges and agrees that Agency shall restrict, by
deed and/or the Regulatory Agreement attached hereto and
incorporated herein as Attachment No. 16, or other appropriate
means reasonably acceptable to Developer, the Site for use of
senior citizens (defined herein) of very low, lower, or moderate
income (defined herein) for thirty (30) years from issuance of
the Certificate of Occupancy. The ownership and operation of the
Project shall be subject to, and governed by, the terms and
conditions of the Regulatory Agreement. Such Regulatory
Agreement shall be recorded concurrently with Developer's
acquisition of the Site.
5.6.2 Title and Exceptions Thereto. Agency
shall furnish Developer and its counsel within twenty (20)
business days after the final agreement of the parties on the
legal description of the Site a current preliminary title report
and legible copies of the documents reported as exceptions
therein affecting the Site (collectively, the "Preliminary Title
Report"). Developer may elect to obtain an ALTA survey (the
"Survey") of the Site, including all easements, liens and/or
encumbrances thereon. The Preliminary Title Report and the
Survey (if Developer elects to obtain such Survey) are
collectively referred to herein as the "Title Documents";
provided, however, that if Developer fails to obtain such Survey
on or before twenty (20) business days after the final agreement
of the parties on the legal description of the Site, then the
Survey shall be deemed not to constitute a part of the Title
Documents. Developer shall notify Agency in writing within ten
920707 plu b559-3.jar (1) — 16 —
(10) business days after receipt of all of the Title Documents of
Developer's disapproval of any matter disclosed therein and
Agency shall have twenty (20) business days following receipt of
such notice to correct or cure, or cause to be corrected or
cured, any matter objected to by Developer. If Agency fails or
refuses to correct or cure, or have corrected or cured, such
objected to matter within the applicable time period, then
Developer may: (i) terminate the transaction described herein,
and thereafter neither party hereto shall have any further
liability to the other hereunder; or (ii) waive the objected to
exceptions and complete this transaction. Any matter not
disapproved within the applicable time period shall be deemed
approved. Any costs incurred in complying with the requirements
of this Subsection 5.6.2 shall be funded from the Agency Loan as
a part of the Front -End costs provided for in Section 3.2.
Developer shall not disapprove any matter of record that will not
unreasonably interfere with the financing, development and use of
the Site for the purposes of this Agreement.
5.6.3 Easements and Dedications. Developer
acknowledges and agrees that the Agency may reserve from its
grant easements for utility purposes (in locations reasonably
acceptable to Developer) and may obtain dedications of portions
of the Site for public purposes.
5.7 Time -and Place of Delivery of Deed(s7. Subject to
any mutually agreed upon extension of time, Agency shall deposit
or caused to be deposited the Grant Deed or Deeds with the Escrow
Holder on or before the Closing Date.
5.8 Title Insurance. Concurrently with recordation of
the Grant Deed(s) conveying fee title to the Site to Developer,
the Title Company shall provide and deliver to Developer, or its
assignee, a CLTA owner's policy of title insurance, in the amount
of the Purchase Price plus the amounts of the Agency Loan (to the
extent that the Agency Loan is not used to fund the Purchase
Price), and the Construction Loan, or in such greater amount as
Developer may specify subject to approval of Agency, and to the
Agency an LP -1 (ALTA) Lender's Policy of Title Insurance in the
aggregate amount of the Agency Loan, insuring that the fee title
to the Site is vested in Developer, or its assignee, in the
condition required by Section 5.6 of this Agreement, and insuring
the priority of the Agency's Deed of Trust; provided, however,
that Developer may elect to obtain an ALTA Extended Coverage
Policy of Title Insurance on the condition that Developer (i)
provides Title Company with an ALTA survey of the Site, and (ii)
pays the difference in insurance premiums attributable to
obtaining an ALTA policy of title insurance instead of a CLTA
policy of title insurance (any such payment to be funded from the
Agency Loan). Title Company shall provide Developer with an
endorsement to insure the amount of Developer's estimated costs
of constructing the Improvements.
920707 p(w h559-3.jar (1) — 17 —
5.9 Taxes and Assessments. Ad valorem taxes and
assessments, if any, on the Site or a part of the Site and taxes
upon this Agreement or any rights hereunder, levied, assessed, or
imposed for any period commencing prior to the conveyance of
title to Developer shall be borne by Agency or Developer's
predecessor in title. All ad valorem taxes and assessments
levied or imposed for any period commencing after closing of
Escrow through which title is transferred to Developer, or its
assignee, shall be paid by Developer or its assignee as provided
in Section 6.15.
5.10 Occupants of the Site. The Site shall be conveyed
free of any possession or right of possession except that of
Developer, or its assignee.
5.11 Zoning of the Site. As of the Closing Date, the
zoning of the Site shall be such as to permit development and
construction of the Improvements in accordance with the
provisions of this Agreement.
5.12 Condition of the Site.
5.12.1 Release of Liability. The Site shall be
conveyed by Agency to Developer, or its assignee, in an "as is"
condition with no warranty, express or implied, and Developer and
its successors and assigns, releases Agency from any and all
liability to Developer resulting from the condition of the soil,
its geology, the presence of known or unknown faults and/or
hazardous substance conditions of any kind or character. It
shall be the sole responsibility of Developer at its expense to
investigate and determine the soil and seismic conditions of the
Site and the suitability of the Site for the development to be
constructed thereon. If the soil conditions are not in all
respects entirely suitable for the use or uses to which the Site
will be put, then subject only to Subsection 5.12.3, it is the
sole responsibility and obligation of Developer to take such
action as may be necessary to place the Site in a condition
entirely suitable for its development. Developer shall be
responsible for the removal and clearance of any improvements,
paving and debris as well as surface and subsurface obstructions
on or in the Site.
5.12.2 Completion of Investigations. Tests and
Analysis. Any investigations, tests, and analysis with respect
to the Sherry property shall be completed by Developer within
sixty (60) days after Developer is notified that an agreement has
been executed with the owner of the Sherry property which permits
Developer the rights provided for in Subsection 5.13.1. Any
investigations, tests and analysis with respect to the Quagletti
property shall be completed by Developer within sixty (60) days
after Developer is notified that an agreement has been executed
with the owner of the Quagletti property which permits Developer
the rights provided for in Subsection 5.13.1.
920707 plw b559-3.jar (1) — .18
5.12.3 Clean-up of Sherry Property.
Notwithstanding the provisions of Subsection 5.12.1, Developer
may, after 20 days notice to Agency, terminate this Agreement,
and the parties shall have no further liability one to the other
hereunder, except as provided in Section 3.2 hereof, if escrow
has not closed for sale and transfer of the Site to Developer,
and if either (i) Sherry fails to achieve Cleanup Completion
(defined below) of the Sherry Property within one year from the
date on which this Agreement is executed by both Developer and
Agency, or (ii) the total cost of achieving Cleanup Completion
exceeds $214,200.00 by an amount which in the commercially
reasonable judgment of Developer makes completion of the proposed
Project commercially and/or economically impracticable; provided,
however, that Agency may, by written notice to Developer given
within said 20 days, elect to pay all or any portion of the cost
of achieving Cleanup Completion in excess of $214,200, in which
event Developer shall not have the right to terminate this
Agreement pursuant to the terms of this Subsection 5.12.3.
As used herein, the term "Cleanup Completion"
shall be deemed to have occurred as of the date on which (1)
California Environmental (or an alternate environmental engineer
or consultant mutually agreeable to Agency and Developer)
certifies for the benefit of Developer that all of the work and
tasks described in Attachments 8 and 9 have been completed, (2)
appropriate governmental and quasi -governmental agencies having
jurisdiction have issued certificates or other evidence that the
Sherry property complies with all applicable environmental
requirements, and, (3) any excavation shall have been refilled
and the ground shall have been leveled to its prior condition
(provided, however, that at Developer's election and with
reasonable notice to Agency the ground shall be graded to
contours directed by the Developer and consistent with plans to
construct a subterranean garage as a portion of the Project, so
long as any costs of such grading, in excess of the costs which
would be incurred to fill and level the ground to its prior
condition, shall be borne by Developer as part of the Additional
Front -End Costs). Developer shall not have the right to
terminate this Agreement pursuant to the terms of this Subsection
5.12.3 if the certificates have been applied for prior to the
expiration of such one year period provided that such
certificates are issued within one and one-half years of the date
on which this Agreement was executed by both Developer and
Agency.
5.13 Pre -Construction WoXX by tbg Dgvp1ggeX.
5.13.1 License. Prior to the conveyance to
Developer of fee title to the Site, Agency shall use reasonable
efforts to obtain for Developer the right to enter upon the Site,
from time -to -time, at all reasonable times, for the purpose of
obtaining data, making surveys and tests necessary to carry out
this Agreement and commence Site development work pursuant to and
in compliance with Section 5.12 hereof. Developer shall
920707 plx b559-3.jar (l) — 19
indemnify, defend, protect and hold harmless Agency and the
owners of the Site for an losses, costs, or liabilities incurred
or arising by reason of such entries by Developer.
5.13.2 Access to Information. Developer shall
have access to all non -confidential or non -privileged data and
information on the Site available to Agency provided that
Developer shall first submit a written request for such
information. Agency shall make such information available but
does not warrant its accuracy or completeness.
5.13.3 Access of Third Parties. Developer
shall not cause any other party except Developer's duly
authorized representatives, employees, agents and independent
contractors to enter on or use the Site without the prior written
consent of Agency. Developer shall insure that no fires are
lighted on the Site by Developer or its employees, agents, or
authorized representatives and agrees to pay all utility charges,
if any, allocable to its use of the Site.
5.13.4 Permits. Agency shall cooperate with
Developer in obtaining all governmental permits and
authorizations required by any governmental agencies for the
performance of Developer's investigative work on the Site. All
persons who enter upon the Site pursuant to Subsections 5.13.1
and 5.13.3 shall do so at their own risk and shall comply with
any and all instructions and directions of the Agency. Developer
shall cause to be prepared and submitted to the City of Carson,
or other appropriate governmental agency, and Agency shall
cooperate with Developer in the diligent prosecution to
completion or issuance (as the case may be), of any environmental
or mitigation reports, authorizations, licenses and/or permits
(including, without limitation an environmental impact report or
a negative declaration) (collectively, the "Environmental
Permits") which may be necessary in connection with the
development of the Site in accordance with the terms of this
Agreement.
5.13.5 Limitation on Improvements and Work.
Prior to the Closing Date, no structure, signs or other
improvements of any kind shall be constructed on the Site by or
on behalf of Developer, and no grading or moving of earth shall
be undertaken on the Site by or on behalf of Developer, without
the express prior written permission of Agency. Upon completion
of any approved grading, excavation or any soil test boring or
excavation, any exposed opening shall be backfilled and any
disturbed ground shall be leveled to its prior condition.
5.13.6 Liens. Developer agrees that it shall
not permit or suffer any mechanic's or materialmen's or other
liens of any kind or nature to be recorded and/or enforced
against the Site for work done or materials furnished or
authorized by Developer, and Developer shall indemnify and hold
harmless Agency and the Site from and against any and all liens,
920707 plw b559-3.jar (1) — 20 —
claims, demands, costs and expenses related to work done, labor
performed or materials furnished in connection with Developer's
entry on the Site, including without limitation any attorney fees
or costs incurred by Agency in connection therewith.
5.13.7 Reimbursement of Pre -Construction Costs.
The fees, costs and other expenses incurred by Developer pursuant
to this Section 5.13 shall be a part of the Front -End costs
described in Section 3.2 hereof (if incurred prior to the date on
which title to the Site is transferred to Developer), and in any
event shall be funded from the proceeds of the Agency Loan.
5.14 Conditions Precedent. The following conditions
precedent must be satisfied or waived by Developer before
Developer becomes obligated to purchase and/or develop the Site
in accordance with this Agreement:
(i) Developer's approval of the Title Documents
described in Subsection 5.6.2 hereof;
(ii) Developer's approval of soils, toxic waste
and hazardous substance tests and analyses or
such other inspections, tests and analyses as
Developer may perform pursuant to
Subsection 5.12.2 hereof, provided, however,
that Developer must disapprove the condition
of the Site within the time period provided
in Subsection 5.12.2;
(iii) Cleanup Completion as provided in
Subsection 5.12.3 has occurred;
(iv) the Lot -Tie Agreement described in
section 4.3 hereof has been recorded;
(v) Developer shall have obtained a binding
commitment from a lender of Developer's
choice committing to make the Construction
Loan to Developer, on terms and conditions
acceptable to Developer in Developer's
reasonable discretion, and approved by Agency
provided that Agency's approval shall not be
unreasonably withheld (aa) if the
Construction Loan documentation contains
provisions giving Agency the rights set forth
in Subsections 6.16.2, 6.16.3, and 6.16.4,
and (bb) if such terms and conditions are
consistent with the prevailing rates, fees
and requirements of commercial lenders at the
time the Construction Loan is made.
Developer shall use reasonable efforts to
obtain such commitment; and
920707 ply b559-3.jar (1) " 1 —
(vi) Developer shall have obtained a binding
commitment from a lender of Developer's
choice committing to make the Permanent Loan
to Developer to discharge and fully satisfy
the Construction Loan upon the due date of
the Construction Loan, or earlier, on terms
and conditions acceptable to Developer in
Developer's reasonable discretion, and
approved by Agency provided that Agency's
approval shall not be unreasonably withheld
if such terms and conditions are consistent
with the prevailing rates, fees and
requirements of commercial lenders at the
time the Permanent Loan is made. Developer
shall use reasonable efforts to obtain such
commitment.
5.15 Agency's Remedies -and Rights of Termination Prior
to Conve ance. In the event that prior to the conveyance of fee
title to the Site to Developer, and in violation of this
Agreement:
(i) Developer does not submit schematic design
documents, construction drawings or related
documents as required by this Agreement; or
(ii) Developer does not (1) pay the Purchase Price, and
(2) take title to the Site when conveyance is
tendered pursuant to this Agreement; and
if any default referred to in subdivisions (i) and (ii) of this
Section 5.15 shall not be cured by Developer within thirty (30)
days after the date of written demand by Agency, then this
Agreement and any rights of Developer or any assignee or
transferee in this Agreement may, at the option of Agency, be
terminated by Agency by written notice thereof to Developer and
any such assignee or transferee, and Agency shall have no
obligation or liability to Developer by reason of this Agreement.
ARTICLE 6. DEVELOPMENT OF THE SITE
6.1 Development of the Site by Develo er.
6.1.1 Scone of Development. Developer shall
develop the Site within the time limits established in the
Project Development Schedule attached hereto and incorporated
herein as Attachment No. 11 and in accordance with and within the
limitations established in the "Scope of Development" attached
hereto and incorporated herein as Attachment No. 12, and plans
approved by Agency pursuant hereto. The Improvements shall
consist of approximately 88, apartment units (including a
manager's unit which shall not be rented), with each unit
averaging approximately 600 square feet. The Site shall be
developed with the number of parking spaces approved by the
920707 plw b559-3.jor (1) " 22 —
Planning Commission and City Council of the City of Carson.
Provisions shall be made for ingress and egress by physically
disabled persons in accordance with state and local law.
Developer shall have complete and sole discretion with respect to
the selection of each architect, subcontractor, engineer,
consultant or other professional engaged to perform work in
connection with the development of the Site. Agency shall have
the right to approve the general contractor selected by Developer
which approval shall not be unreasonably withheld.
6.1.2 Schematic Design Development Documents.
Developer shall prepare and submit to Agency preliminary
Schematic Design Development Documents illustrating the general
scope, scale and relationship of Project components. These
preliminary Schematic Design Development Documents shall include
conceptual site and building placement; preliminary sections and
elevations; preliminary selection of building systems and
materials; and approximate dimensions, areas and volumes. Upon
Agency approval of such drawings and related documents, Developer
and Agency shall initial and date each page of such drawings and
documents. The Site shall be developed as finally established in
the final Schematic Design Documents, except as changes may be
mutually agreed upon in writing between Developer and Agency.
Any such changes shall be within the limitations of the Scope of
Development.
6.1.3 Landscaping and Finish Grading Plans.
Developer shall prepare and submit to Agency for its approval
preliminary and final landscaping and finish grading plans for
the Site. The landscaping plans shall be prepared by a
professional landscape architect, and the finish grading plans by
a registered civil engineer, either or both of whom may be in the
same firm as Developer's architect. These plans shall be
prepared, submitted, and approved within the times established
therefor in the Project Development Schedule as it may be amended
from time to time by agreement of Agency and Developer.
6.1.4 Construction Drawings and Related
Documents. Developer shall prepare and submit final Schematic
Design Development Documents and Construction Documents to Agency
for review and written approval (including, but not limited to,
architectural approval) as and at the times established in the
Project Development Schedule. Such documents may be approved by
the Executive Director of Agency.
(a) Schematic Design Development Documents
are hereby defined as drawings and other documents to fix and
describe the size and character of the entire development,
including but not limited to plans, sections, and elevations,
exterior material samples, and landscape plans with outline
specifications or material lists to establish final scope and
preliminary details for landscape work.
920707 plw b554-3.411 (1) t 2-3 —
(b) Construction Documents are hereby
defined as drawings and other documents setting forth in detail
the requirements for construction, bidding and contracting for
the construction of the Improvements, and obtaining building
permits for the Improvements.
Approval of progressively more detailed drawings and
specifications will be promptly given by Agency if they
substantially conform to drawings or specifications theretofore
approved. Any items so submitted and approved in writing by
Agency shall not be subject to subsequent disapproval.
6.1.5 Coordination Between Agency and
Developer. During the preparation of all drawings and plans,
Agency and Developer shall hold regular progress meetings to
coordinate the preparation and review of construction plans and
related documents. Agency and Developer shall communicate and
consult informally as frequently as is necessary to insure that
the formal submittal of any documents to Agency can receive
prompt and speedy consideration. If any revisions or correction
of plans approved by Agency shall be required by any governmental
official, agency, department or bureau having jurisdiction, or
any lending institution involved in financing, Developer and
Agency shall cooperate in efforts to enable Developer to develop
a mutually acceptable modification or alternative to any required
revision or correction.
6.1.6 Agency Approval of Plans. Drawings and
Related Documents. Subject to the terms of this Agreement,
Agency shall have the right of reasonable review and approval of
all plans and submissions, including any changes therein.
Developer shall have the obligation to timely submit all plans
and submissions, including any changes therein, for Agency's
review and approval and to clearly indicate in a transmittal
document the date by which Agency approval or disapproval is
required under the Project Development Schedule. Agency shall
approve or disapprove the plans, drawings and related documents
referred to in Subsections 6.1.2 through 6.1.4 of this Agreement
and any proposed changes therein within the times established in
the Project Development Schedule. Failure by Agency to either
approve or disapprove within the times established in the Project
Development Schedule and in the body of this Agreement shall be
deemed an approval. Any disapproval shall state in writing the
reasons for disapproval. Developer, upon receipt of a
disapproval based upon powers reserved by Agency hereunder, shall
revise the plans and drawings and related documents and shall
resubmit such revised documents to Agency within thirty (30) days
after receipt of the notice of disapproval.
6.2 Construction Contract. The Project shall be built
under a negotiated fixed price construction contract with a
general contractor chosen by Developer and approved by Agency.
The contractor shall be bonded as provided in Section 6.7 unless
920707 plw b559-3.jar (1) 4
the Agency's attorney approves a Letter of Credit arrangement to
insure completion of the Project.
6.3 Off-site Improvements. Agency shall pay for and
cause to be constructed for the benefit of the Site all
reasonably necessary and customary off-site improvements such as
storm drains, street lights, curbs, gutters, traffic mitigation
measures, utility installations (up to the point of rough -in
connection) and off-site landscaping. The cost of off-site
improvements shall not constitute a portion of the Agency Loan.
The cost of construction of all Improvements other than as set
forth above shall be borne by Developer. Agency shall cause such
offsite improvement work to be performed at times reasonably
approved by Developer in order to coordinate such offsite
improvements with other development efforts at the Site to avoid
scheduling or design conflicts.
6.4 Plans and Drawincis for Off-site Improvements.
Developer shall prepare and submit for Agency and City approval
detailed plans and drawings for all reasonably necessary and
customary off-site improvements that are shown as the Agency's
responsibility in the Scope of Development, in accordance with
the terms hereof. Such plans and drawings shall be prepared in
conformance with the technical specifications of the City and any
other public agencies that have jurisdiction thereof. Except as
otherwise expressly provided for herein, upon approval of such
plans and drawings and as part of development of the Site,
Agency, or at Agency's election, Developer shall construct or
cause to be constructed all such off-site improvements which
Agency agrees to provide.
6.5 (intentionally omitted]
6.6 Compliance with Project Development Schedule.
After the conveyance of title to the Site, Developer and Agency
shall each promptly begin and thereafter diligently prosecute to
completion all work to be done by each party, respectively,
pursuant to this Agreement. In addition, Developer and Agency
shall begin and complete all construction and development within
the times specified in the Project Development Schedule or such
extension of said dates as may be agreed upon between Developer
and Agency; provided, however, regardless of the Project
Development Schedule, after commencement of such work any
cessation of the work for thirty (30) consecutive days shall be a
breach hereof. The Project Development Schedule is subject to
revision from time -to -time as mutually agreed upon in writing
between Developer and Agency. The parties expressly acknowledge
that their mutual performance hereunder is dependent upon timely
performance by the other party of its duties and obligations as
described in this Agreement and in the Project Development
Schedule. In the event that either party is delayed or is unable
to perform his or its duties and obligations on a timely basis,
the other party is likely to experience delays in completing the
work which such other party is obligated to perform pursuant to
920707 ptw b559-3.jar (1) — 25 —
this Agreement, and the Project Development Schedule shall be
revised to reflect such delays. In addition, such delays by
either party may cause the other party to incur certain costs and
expenses (including, by way of example and not limitation,
unanticipated interest costs, additional office overhead costs
and unexpected loan fees). On or before 20 business days prior
to the date on which either party is to have completed
performance of any task, in accordance with the requirements of
this Agreement and the Project Development Schedule, the other
party shall deliver notice of the estimated costs and expenses
which such other party anticipates are likely to be incurred in
the event that the party receiving such notice is delayed in
completing such tasks on a timely basis; provided, however, that
any such notice shall constitute an estimate only, and shall not
be binding as to the nature, extent and amount of such costs and
expenses. Promptly following receipt of written request
therefor, accompanied by reasonable evidence of expenditure, the
party responsible for any delay shall reimburse the other party
for all reasonable costs and expenses actually incurred by the
other party as a reasonable result of such delay provided the
party responsible for any delay has been furnished the notice
required by this Section 6.6.
6.7 Completion Bonds. Prior to the commencement of
construction of the Improvements by Developer at the Site,
Developer shall obtain or cause its general contractor to obtain
a "Performance Bond" and a "Labor and Material Payment Bond" or
other instruments of assurance as approved by Agency in the
amount of the cost of completion of the improvements, naming the
Agency as a co -obligee. The terms of such bonds or instruments
of assurance shall be subject to approval by the Executive
Director of the Agency. The cost of such instrument of assurance
shall be included in Total Project Costs, and shall be funded
from the Construction Loan.
6.8 Bodily Injury and Property Damage Insurance.
Prior to the commencement of construction on the Site or any
Portion thereof, including, without limitation, any preliminary
work, Developer and/or general contractor shall maintain and have
in full force and effect a "Broad Form Comprehensive General
Liability Policy" in a combined single limit of not less than $10
million dollars and which shall contain a contractual liability
endorsement and a "Builders and Theft policy" in an amount not
less than the agreed costs of constructing the Project as shown
in the Development Pro Forma (as amended from time to time).
Such insurance shall be maintained and kept in force and copies
of such policies, or other evidence thereof satisfactory to
Agency shall be on file with Agency at all times until Agency has
issued its Certificate of Completion for the entire Site.
Thereafter, Developer shall maintain the insurance coverage
required by the Deed of Trust securing the Agency Loan until the
full reconveyance of such Deed of Trust. Agency shall be named
an additional insured on any such policies of insurance required
by this Section 6.8. Such insurance policies shall contain an
920707 piw b559-3.jar (t) — 2 6 —
endorsement providing that the policy shall not be canceled or
the coverage reduced without a prior 30 day written notice to
Agency.
6.9 City and other Governmental Agencv Permits.
Before commencement of construction or development by Developer,
its general contractor and sub -contractors of any buildings,
structures or other work of improvement upon the Site, Developer
shall secure or cause to be secured any and all permits which may
be required by the City or any other governmental agency having
jurisdiction over such construction, development or work.
Developer shall pay costs of engineers and others necessary to
prepare applications for permits. Agency shall provide all
proper assistance to Developer in securing such permits. The
costs of such permits (and the costs and fees of engineers and
others incurred in connection therewith) shall be a cost of
construction, and shall be included in the Front End costs
described in Section 3.2 hereof.
6.10 Rights of Access. Representatives of Agency and
the City shall have the right of reasonable access to the Site or
any part thereof without charge or fee, at normal construction
hours during the period of construction, for the purposes of this
Agreement, including but not limited to the inspection of the
work being performed in constructing the Improvements. Such
representatives of Agency or the City shall be those who are so
identified in writing by the Executive Director of Agency.
6.11 Local, State and FedeFa_1__Laws. Developer shall
carry out the construction of the Improvements in conformity with
all applicable laws, including all applicable federal and state
labor standards and prevailing wage laws.
6.12 NondiscriZination Duriag Construction. Developer
for itself, its successors and assigns, agrees that in the
construction of the Improvements on the Site provided for in this
Agreement, Developer will not discriminate against any employee
or applicant for employment because of sex, marital status, race,
color, religion, creed, or national origin or ancestry.
6.13 waiver of Governmental Fees. Agency agrees to
cooperate with Developer to obtain waivers of any fees which do
not result in a reduction of the City's revenues or funds.
Agency shall waive any fee or charge which it might otherwise
impose in connection with the permits referred to in Subsection
5.13.4 and Section 6.9, and shall cooperate with Developer to
request any other governmental or quasi -governmental entity
having jurisdiction to waive its or their fees or charges in
connection therewith; provided, however, that no fee or charge
payable to, or for the benefit of the City shall be waived, and
Developer shall be responsible for paying all such City fees and
charges (which fees and charges shall be included in Total
Project Costs hereunder). For example, if school fees can be
waived because this is a senior citizens' project and such waiver
920707 plw b559-3.jsr (1) — 27 —
does not result in a monetary loss to the City, then Agency
agrees to use its best efforts to obtain such a waiver.
6.14 (intentionally omitted]
6.15 Taxes and Assessments. Developer shall pay when
due all real estate taxes and assessments on the Site assessed
and levied subsequent to conveyance of fee title to the Site to
Developer, which shall be funded from the proceeds of the Agency
Loan prior to the issuance of a Certificate of Occupancy and
shall be paid from the gross income of the Project thereafter.
Nothing herein contained shall be deemed to prohibit Developer
from contesting the validity or amounts of any tax, assessment,
encumbrance or lien, nor to limit the remedies available to
Developer in respect thereto.
6.16 Security Financin • Rights of Holder.
6.16.1 Notice of Default to Mortgage. Deed of
Trust or Other Security Interest Holder: Right to _Cure. Whenever
Agency shall deliver any notice or demand to Developer with
respect to any breach or default by Developer in construction of
the Improvements, Agency shall at the same time deliver a copy of
such notice or demand to each holder of record of any mortgage,
deed of trust or other security interest authorized by this
Agreement, of which Agency has written notice. Each such holder
shall (insofar as the rights of Agency are concerned) have the
right at its option within sixty (60) days after the receipt of
the notice, to cure or remedy or commence to cure or remedy any
such default and to add the cost thereof to the security interest
debt and the lien securing its security interest. Nothing
contained in this Agreement shall be deemed to permit or
authorize any such holder to undertake or continue the
construction or completion of the Improvements (beyond the extent
necessary to conserve or protect the Improvements already
constructed) without first having expressly assumed by written
agreement satisfactory to Agency all of Developer's obligations
to Agency, with respect to the Site, including, but not limited
to, this Agreement and all agreements attached hereto,
incorporated herein, or implementing the provisions hereof. The
holder in that event must agree to complete, in the manner
provided in this Agreement, the improvements to which the lien or
title of such holder relates, and submit evidence satisfactory to
Agency that it has the qualifications and financial responsi-
bility necessary to perform such obligations. Any such holder
executing such assumption shall succeed to Developer's rights
with respect to construction of the improvements and the
remaining proceeds of the Agency Loan and upon properly
completing such improvements in accordance with the terms and
conditions of this Agreement shall be entitled, upon written
request made to Agency, to a Certificate of Completion from
Agency with respect to such improvements.
920707 plw b559-3.jar (1) — 8 —
6.16.2 Failure of Holder. to _Q=Rlete
Improvements. In any case where, sixty (60) days after default
by Developer in construction of improvements under this
Agreement, the holder of any mortgage, deed of trust or other
security interest creating a lien or encumbrance upon any portion -
of the Site has not exercised the option referred to in
Subsection 6.16.1 or has not proceeded diligently with
construction, Agency may purchase the mortgage, deed of trust or
other security interest, by paying to the holder the amount of
the unpaid debt, plus any accrued and unpaid interest. If the
ownership of the Site has vested in the holder, Agency, if it so
desires, shall be entitled to a conveyance from the holder to
Agency upon payment to the holder of an amount equal to the sum
of the following:
(a) The unpaid mortgage, deed of trust or
other security interest debt at the time title became vested in
the holder (less all appropriate credits, including those
resulting from collection and application of any rentals and
other income received during foreclosure proceedings);
(b) All reasonable expenses incurred with
respect to foreclosure, not to exceed the amounts provided in
Civil Code Section 2924c;
(c) The net expenses, if any (exclusive of
general overhead) incurred by the holder as a direct result of
any subsequent management of the Site;
(d) The costs of any improvements made by
such holder, provided such improvements are in accordance with
the plans, drawings and related documents approved by the Agency
pursuant to Section 6.1;
(e) An amount equivalent to the interest
that would have accrued on the aggregate of such amounts had all
such amounts in (a), (b), (c) and (d) above become part of the
mortgage or deed of trust debt and such debt had continued in
existence to the date of payment by the Agency.
Agency shall exercise such right to purchase the Site from the
holder within 180 days after the holder's acquisition of fee
title to the Site, and if Agency does not tender the required
amounts within such 180 day period, Agency shall thereafter no
longer have any right to purchase the Site.
6.16.3 Right of Agency to Cure Default under
Mortgage. Q2ed of Trust,Other Security Interest or Other
S-anve ance fog Einancing. In the event of a default or breach by
Developer of a mortgage, deed of trust or other security
instrument with respect to the Site or any part thereof prior to
the completion of development of Improvements thereon Agency may
(but shall not be obligated to) cure the default prior to the
completion of any foreclosure. In such event, Agency shall be
920707 plw b559-3.jer (1) — 29
entitled to reimbursement from Developer of all sums paid and all
costs and expenses incurred by Agency in curing the default.
Agency shall be subrogated to all the benefits of the superior
lien upon the Site (including the lien of the superior lien
holder) to the extent of such costs and disbursements paid by
Agency.
6.16.4 Right of Agency to Satisfy other Liens
on the Site After Title Passes. Developer agrees that it will
pay or cause to be paid all costs for work done by it or caused
to be done by it on the Site after the conveyance of fee title of
the Site to Developer and prior to the recordation of a
Certificate of Completion for the construction and development of
the Project, and Developer will keep the Site free and clear of
all mechanic's liens and other liens on account of work done for
Developer or persons claiming under it. If Developer shall fail
to pay any charge for which a mechanic's lien claim and suit to
foreclose the lien have been filed, which claim arises in
connection with work performed after the conveyance of fee title
of the Site to Developer but prior to the recordation of a
Certificate of Completion for the construction and development of
the Project, Developer shall within sixty (60) days after the
filing of such claim either (i) pay and satisfy the same, or (ii)
provide Agency with adequate security for the value, or in the
amount, of the claim, plus estimated costs and interest thereon,
or a bond of a responsible corporate surety in such amount,
conditioned on the discharge of the lien. If Developer fails to
either pay or satisfy such lien, or provide Agency with security
to protect the Site against such claim of lien, Agency shall have
the right (but not the obligation) to pay the amount of any such
lien or encumbrance, and add the amount so paid to the amount the
of indebtedness secured by the deed of trust held by Agency;
provided, however, that nothing in this Agreement shall require
Developer to pay or make provision for the payment of any tax,
assessment, lien or charge so long as Developer in good faith
shall contest the validity or amount thereof, and so long as such
delay in payment shall not subject the Site (or any portion
thereof) to forfeiture or sale.
6.16.5 Certificate of Completion. Promptly
after completion of all construction and development to be
completed by Developer on the Site, as required by this
Agreement, Agency shall furnish Developer with a certificate of
completion (the "Certificate of Completion") upon written request
therefor by Developer. Agency shall not unreasonably withhold
the Certificate of Completion. Such Certificate of Completion
shall be, and shall so state, conclusive determination of
satisfactory completion of the construction required by this
Agreement on the Site but shall not constitute a waiver of
Agency's right to require correction of defects in labor,
materials or equipment furnished. The Certificate of Completion
shall be in such form as to permit it to be recorded in the
Recorder's Office of Los Angeles County, California.
920707 plu b559-3.1er (1) — 30
After the recordation of the Certificate of Completion,
any party then owning or thereafter purchasing, leasing, or
otherwise acquiring any interest in the Site shall not (because
of such ownership, purchase, lease, or acquisition) incur any
obligation or liability pursuant to, or under, this Agreement
with respect to the construction or other development of the
Project. Notwithstanding the foregoing, such party shall be
bound by any covenants and obligations contained in this
Agreement or the Regulatory Agreement, deed, lease, mortgage,
deed of trust, contract, any applicable CC&R's or other
instrument of transfer not related to construction and
development of the Project.
If Agency refuses or fails to furnish a Certificate of
Completion after written request from Developer, Agency shall,
within thirty (30) days of the written request, provide Developer
with a written statement of the reasons Agency refused or failed
to furnish a Certificate of Completion and the action Developer
must take to obtain a Certificate of Completion. If the reason
for such refusal is confined to specific items or materials for
landscaping and the estimated cost thereof shall not exceed
$50,000, Agency will issue its Certificate of Completion upon the
posting of a bond by Developer with Agency in an amount repre-
senting a fair value of the work not yet completed. If Agency
fails to respond to Developer's first request for such
Certificate of Completion within thirty (30) days after written
request therefor, Developer shall have the right to deliver a
second request for such Certificate of Completion to Agency;
provided, however, that if Agency fails to provide Developer with
a Certificate of Completion (or fails to provide Developer with a
written statement of the reasons for such failure) on or before
the expiration of such second thirty (30) day period, then
Developer shall be deemed to be entitled to, and Agency shall be
deemed to have executed, such Certificate of Completion. If
Developer fails to deliver the second request described in this
Subsection, then Developer shall not be deemed to be entitled to,
and Agency shall not be deemed to have executed, such Certificate
of Completion but developer shall not be precluded from
requesting a Certificate of Completion at any future date, in
which event the terms and conditions of this subsection 6.16
shall once again apply.
6.17 Collateral Assignment of Dis osition and
evelopment Agreement and Agency Consent Thereto. Developer may
be required to execute a "Collateral Assignment of Disposition
and Development Agreement" as a condition of obtaining the
construction financing necessary to complete the Improvements
required herein. The Collateral Assignment of Disposition and
Development Agreement and Consent to Assignment shall be in the
general form contained in Attachment No. 13 hereof subject to
reasonable modifications as may be required by the Construction
Lender. Agency agrees to consent to such assignment to a
Construction Lender approved by Agency if such Construction
Lender agrees to the provisions of Subsections 6.16.2, 6.16.3,
920707 ply b559 -3 -jar (I) — 3 1
and 6.16.4. Such consent shall be generally in the form
contained in Attachment No. 13 hereof.
6.18 Developer Fee and Payment Thereof. Developer
shall be entitled to a fee (the "Developer Fee") equal to ten
percent (10%) of the Total Project Costs (defined below),
excluding the amount of the Purchase Price of the Site. Also,
the fee shall not apply to the off-site Improvements referred to
in Section 6.3 unless Agency elects to have Developer construct,
or cause to be constructed, such improvements for the Site. The
Developer Fee shall be payable as follows: one-third (1/3) based
upon Developer's good faith estimate, at such time, of the Total
Project Costs upon the funding of the Construction Loan; one-
third (1/3) based upon Developer's good faith estimate, at such.
time, of the Total Project Costs payable monthly during the
construction of the Project, based upon the percentage of
completion of the Project; and the remainder, less a 10%
retention of the total Developer fee, upon the issuance of a
Certificate of Occupancy. The 10% retention shall be payable
after Developer and Agency have complied with Section 6.22. The
Developer Fee described herein is in addition to, and not in lieu
of, the fee described in Sections 3.1 and 4.2 of this Agreement.
As used herein, the term "Total Project Costs" is an amount equal
to the sum of (a) the Purchase Price, plus (b) the total of
reasonable amounts expended or paid by or for the account of
Developer for Hard Costs and Soft Costs as generally consistent
with the Development Pro -Forma which shall be approved by Agency.
"Hard Costs" means all direct costs actually paid by or on behalf
of Developer for goods, materials and/or labor (whether performed
or stored on or off of the Site) in the construction and
development of the Project (including without limitation the
grading and site preparation of the Site), which (i) are not
included in Soft Costs, (ii) are not reimbursed or reimbursable
by others, and (iii) which otherwise would normally be considered
in the construction trade to be "hard costs" for the construction
of the Project. Without limiting the generality of the
foregoing, Hard Costs shall include all direct costs for labor,
materials and subcontract performance that are used in the
construction of or thereafter incorporated into the Project,
actual construction costs, equipment costs, contractor's fees
and/or cost overruns (but only if Agency has approved a cost
overrun in excess of the agreed construction costs plus
Developer's contingencies) for any of the foregoing. "Soft
Costs" shall mean all indirect costs actually paid by or on
behalf of Developer for construction and development of the
Project, which either (i) are not reimbursed or reimbursable by
others, (ii) are not included in Hard Costs, and (iii) would
otherwise normally be considered in the construction trade to be
"soft costs" for the construction of the Project. Without
limiting generality of the foregoing, Soft Costs shall include
reasonable fees paid to attorneys, architects, engineers,
accountants, consultants and other professionals to the extent
directly attributable to the construction of the Project, the
amount of interest incurred or accrued and actually paid by
9ZD707 p(w b559-3.jer (1) — 32
Developer with respect to financing obtained in connection with
the construction of the Project excluding any interest on Agency
Loan, fees, if any, paid by (but not to) Developer in connection
with raising debt and/or equity capital for the development of
the Project, employee salaries paid for tasks normally associated
with the development of projects similar to the Project and which
would be customarily performed by independent third parties (but
only to the extent such salaries do not exceed the amount which
would have been reasonably and ordinarily paid to an independent
third party for performing the same tasks), and/or cost overruns
(but only if Agency has approved in writing a cost overrun in
excess of the agreed construction costs plus Developer's
contingencies) for any of the foregoing.
6.19 Cost Overruns.
6.19.1 Sharing of Cost Overruns. If the Agency
lends Developer the full $5,000,000.00 principal amount of the
Agency Loan, then Developer shall be responsible for cost
overruns out of the "Contractor" and "Developer" contingency
reserves provided for in the "Development Pro Forma" attached
hereto and incorporated herein as Attachment No. 15. If the
Agency lends Developer less than the full $5,000,000.00 principal
amount of the Agency Loan, then Agency and Developer shall each
be responsible for 50% of any cost overruns incurred in
connection with the development of the Project and Agency's
contribution shall be added to and treated as a part of Agency
Loan under this Agreement, provided, however, that in no event
shall Agency be required to provide more than $5,000,000.00 in
total loan funding for the Project not including the cost of off-
site improvements. In the event Agency elects to fund any
portion of a cost overrun in excess of its $5,000,000 limit on
funding, such amount of funding shall be added to or treated as a
part of Agency Loan for all purposes of this Agreement.
6.19.2 AA2aroval_and Expenditure of Contingency
Reserves. Developer shall have the right to determine, subject
to Agency's approval which shall not be unreasonably withheld,
the amount of the contingency reserves. Developer may apply and
expend all or any portion of any such contingency reserves for
Developer's share of any cost overrun incurred in connection with
the development of the Project.
6.20 Sharing of Cost Savings. Any cost savings based
upon the Construction Contract negotiated by Developer and
approved by Agency and resulting from the development of the
Project pursuant to this Agreement shall be split on a 50/50
basis between Agency and Developer; provided, however, that
Developer may, in its sole discretion, determine to expend any
such cost savings on improvement of the Project, in which case
Agency and Developer shall have no right to receive any portion
of such cost savings. Any such expenditure of savings shall
constitute a portion of the Total Project Costs. The Agency and
Developer shall share cost savings, if any, which shall be
920707 plw B59.3.jar (1) — 33 —
calculated only after Developer pays any contractor and/or
subcontractor its or their negotiated percentage of cost savings,
and shall be paid only upon funding of the Permanent Loan. Any
cost savings paid to Agency shall reduce Agency's Loan.
6.21 Governmental Approvals. Nothing herein is
intended to indicate that the Project is not to be subject to the
same Planning Commission and City Council review and approval
procedures as are applicable to developments similar to the
Project. Approval of any aspect of the Project is not to be
inferred from any provision of this Agreement, or any Attachment
hereto.
6.22 Cost Certification/Agency Audit.
6.22.1 No fewer than 30 days prior to the date
on which Agency is obligated to pay the final installment of the
Developer Fee, Developer shall deliver to Agency a Preliminary
Cost Certification in a form reasonably acceptable to Agency and
Developer together with pertinent materials relating to Total
Project Costs then incurred and an estimate of costs, if any, to
be incurred and paid subsequent to the issuance of the
Certificate of Occupancy. Prior to the release of any funds
retained pursuant to Section 6.18 hereof, Developer shall deliver
to Agency a Final Cost Certification for the Project. Agency
shall have the right to audit or cause an audit to be made (the
"Agency's Audit") of all accounts, books and records of Developer
respecting the development of the Project, in order to ascertain
the actual amount of the Total Project Costs. Developer shall
reasonably cooperate with and assist in such audit, and make all
of its accounts, books and records respecting the development of
the Project available to Agency or its auditor for inspection and
copying in accordance herewith. Agency agrees to cooperate with
Developer in scheduling and conducting Agency's Audit, if any, so
as not unreasonably to interfere with Developer's business
operation.
6.22.2 Developer shall pay the reasonable cost
and expense of Agency's Audit if Agency's Audit discloses (or, in
the event that Developer contests Agency Audit, if the
independent certified public accountant determines) that the
Total Project Costs for the Project as certified by Developer
were overstated by more than four percent (4%) of the actual
amount of such Total Project Costs. In all other cases Agency
shall be solely responsible for the cost and expense of Agency's
Audit.
6.22.3 If Agency's Audit discloses (or, in the
event that Developer contests the Agency's Audit, if the
independent certified public accountant determines) that Agency
has overpaid or underpaid the Developer's Fee, Agency shall
promptly notify Developer of such fact. If Agency has underpaid
the Developer Fee, then at the time Agency delivers such notice
Agency shall also pay Developer the amount necessary to correct
920707 plw b559-3.jar (1) — 34
any such prior underpayment. If Agency has overpaid the
Developer Fee, Developer shall promptly (but in no event more
than 30 days) pay Agency the amount necessary to correct such
prior overpayment.
6.22.4 Developer shall have the right to
contest, at Developer's sole cost and expense, the accuracy of
Agency's Audit. If Developer in its reasonable discretion
determines to contest Agency's Audit, Developer must deliver to
Agency written notice of its intent to contest within 20 business
days after Agency notifies Developer of the results of the
Agency's Audit. If Developer fails to deliver such contest
notice to Agency within such 20 business day period, then
Developer shall be deemed to have waived its right to contest the
Agency's Audit. If Developer timely delivers such contest notice
to Agency, then the issue of the amount and accuracy of Agency's
Audit shall be submitted to an independent certified public
accountant mutually acceptable to Agency and Developer, with
reasonable experience in audits similar to Agency's Audit in
scope, complexity and subject matter, and the finding of such
accountant shall be final. The estimated cost of the independent
certified public accountant selected by the parties shall be
split equally between the parties and each party shall pay his or
its share in advance to the independent certified public
accountant and shall pay his, or its, remaining share, if any,
not covered by the advance payment to the independent public
accountant promptly upon receiving a bill therefor.
6.22.5 If the independent certified public
accountant so selected by the parties determines that the Total
Project Costs for the Project as certified by Developer were
overstated by four percent (0), or less, of the actual amount of
such Total Project Costs, then Agency shall promptly reimburse
Developer for the reasonable fees and expenses paid by Developer
in contesting Agency's Audit, including Developer's share of the
costs and expenses of the independent certified public
accountant. If the independent certified public accountant so
selected by the parties determines that the Total Project Costs
for the Project as certified by Developer were overstated by more
than four percent (4%) of the actual amount of such Total Project
Costs, then Developer shall promptly reimburse Agency for the
reasonable fees and expenses paid by Agency in defending Agency's
Audit, including Agency's share of the costs and expenses of the
independent certified public accountant.
6.22.6 The retention amount described in
Section 6.18 shall be paid to Developer after the provisions of
Subsections 6.22.1 through 6.22.4 have been complied with.
6.23 Liens. Developer agrees that it shall not permit
or suffer any mechanic's or materialmen's or other liens of any
kind or nature to be recorded and/or enforced against the Site
for work done or materials furnished or authorized by Developer,
and Developer shall indemnify and hold harmless Agency and the
920707 plu b559.3.jar (t) — 35
Site from and against any and all liens, claims, demands, costs
and expenses related to work done, labor performed or materials
furnished in connection with its entry on the Site, including
without limitation any attorney fees or costs incurred by Agency
in connection therewith.
6.24 Certificate of Occupancy. Upon completion of
construction, Developer shall obtain a Certificate of Occupancy
from the City of Carson prior to the occupancy of any of the
dwelling units of the Project. In the event a Certificate of
Occupancy is not issued by January 1, 1995, then any date which
is determined and measured from the date of issuance of the
Certificate of Occupancy (i.e., for purposes of Sections 2.4,
6.15, 8.1, 8.2, 8.3 and Subsections 2.5.1, 5.6.1 and 8.4.1) shall
be January 1, 1995, instead of the date of issuance of the
Certificate of Occupancy.
ARTICLE 7. (INTENTIONALLY OMITTED]
ARTICLE S. USE AND RENTAL OF THE SITE
8.1 Uses. Developer covenants and agrees for himself,
his successors, assignees, and every successor in interest that
during construction and thereafter for a period of thirty (30)
years from the date of issuance of a Certificate of occupancy on
the Project, Developer, such successors, assignees and
successor(s) in interest shall devote the Site only to the uses
specified in the Grant Deed, the Regulatory Agreement, and this
Agreement.
8.2 Rental Restrictions. Developer covenants and
agrees for himself, his successors, assignees, and every
successor in interest, that rental of the Project shall be
restricted as provided in this Section 8.2 for a period of thirty
(30) years from the date of issuance of a Certificate of
Occupancy on the Project.
8.2.1 Units Restricted to Senior Citizen
Rentals. All (except the manager's Unit) of the Units in the
Project ("rentable units") shall be rented exclusively to senior
citizens of very low, lower, or moderate income and only such
persons shall be entitled to occupy the Units.
8.2.2 Restrictions on Rental of Very Law Lower
Income Units. Forty-three (43) of the rentable units shall be
rented exclusively to senior citizens of very low, or lower
income (as defined in Subsection 8.2.4) and only such persons
shall be entitled to occupy such Units. The maximum number of
persons who may reside in a Unit is two.
8.2.3 Restrictions on Rental of Moderate
Inco a Units. The remaining forty-four (44) rentable Units shall
be rented exclusively to senior citizens of moderate income (as
defined in Subsection 8.2.4) and only such persons shall be
920707 plw b559-3.jer (1) — 36 --
entitled to occupy such Units. The maximum number of persons who
may reside in a Unit is two.
8.2.4 Definitions.
(i) "Senior Citizens of very low, lower, or
moderate income" means persons whose income do not exceed the
amounts set forth in California Health and Safety Code Sections
50105 (very low income), 50079.5 (lower income) and 50093
(moderate income) for persons and families who have incomes not
greater than the applicable percent of the area median income
(adjusted for family size as appropriate for the Unit) for the
very low, lower, or moderate income categories.
(ii) "Area median income" shall mean the
area median income for Los Angeles County as published by the
Department of Housing and Community Development pursuant to
California Health and Safety Code Section 50093.
(iii) "Family size appropriate to the Unit"
shall mean a household of two persons for a one -bedroom unit.
(iv) "Affordable rent (including a
reasonable utility allowance) for very low, lower, or moderate
income person" means the rent determined under California Health
& Safety Code Section 50053(b) based upon area median income
(adjusted for family size appropriate for the Unit) for the very
low, lower, or moderate income household.
(v) The terms defined in this Subsection
8.2.4 are further defined in Title 25 of the California Code of
Regulations Section 6910, et sea., as from time to time amended,
and any successor regulations thereto. The terms and provisions
of California Health and Safety Code Sections 50093, 50105,
50079.5, and 50053 and Title 25 of the California Code of
Regulations Section 6910, et sett., as amended, and any successor
statutes or regulations thereto, are incorporated herein by this
reference.
(vi) For purposes of this Agreement "senior
citizens" shall mean persons over sixty-two (62) years of age.
8.2.5 Initial Rent. The initial rent for the
Units of the Project shall be as follows:
(a) The initial rental rate for each of the 43
very low/lower income Units shall be $390 per month unless such
rent is lowered by agreement of the parties hereto to comply with
the requirements of other financing sources contemplated and
permitted by Sections 2.2 and 3.1 of this Agreement; and
(b) The initial rental rate for each of the 44
moderate income Units shall be $410 per month.
8.2.6 Annual Rent increases. Developer shall
submit a request for an increase in rents to the Housing
920707 plw b559-3.jar (1) — 37 —
Committee of the Human Relations Commission of the City of Carson
(the "Housing Committee") for review and approval sixty (60) days
prior to each yearly anniversary of the initial occupancy of the
Project ("the Anniversary") and each year thereafter. The
Housing Committee shall review the Developer's request and notify
Developer of either of the following actions within thirty (30)
days after submission: (i) Developer shall be allowed to
increase the then current rental rate of the Units by 2% each
year; or (ii) Annual increases in the then current rent of the
Units in excess of 2% per year shall be allowed if the percentage
increase in the "CPI Adjusted Rent" and the "HUD Factor Adjusted
Rent" (each as defined below), divided by two, exceeds 2% per
year in accordance with the following computations:
(a) As used herein, the "CPI Adjusted Rent" shall
mean the then existing rent rate for any Unit, plus an amount
equal to the product of (A) the then existing rent rate for such
Unit, multiplied by (B) the percentage increase, if any, of the
Consumer Price Index - All Items (1982-1984=100) - All Urban
Consumers - Los Angeles -Anaheim -Riverside, California, as
published by the United States Department of Labor, Department of
Labor Statistics ("the Index"). Such percentage increase shall
be determined by (i) subtracting the Index for the month which is
15 months prior to the month in which such calculation is to be
made, from the Index for the month which is three months prior to
the month in which such calculation is to be made, and (ii)
dividing the remainder by the Index for the month which is 15
months prior to the month in which such calculation is to be
made. An example of the calculation provided for above is as
follows: Assume that the rent for a Unit is to be adjusted as of
April 1, 1992, and prior to April 1, 1992, the rent for such Unit
was $390.00. Further assume that the Index for January, 1991
(15 months prior to the month in which such calculation is to be
made) was 139.9 and the Index for January, 1992 (three months
prior to the month in which such calculation is to be made) was
144.3. Based upon these assumptions the percentage increase in
the Index would be calculated by (i) subtracting the Index for
the month of January, 1991 from the Index for the month of
January 1992 i.e. 144.3-139.9=4.4, and (ii) dividing 4.4 by
139.9=0.031. The CPI Adjusted Rent would be calculated by
multiplying (A) the then existing rent rate ($390.00) by (B) the
percentage increase in the Index (.031$), and adding the result
to the then effective rent rate ($390.00), i.e., $390.00
multiplied by .031%=$12.09 and $12.09 + $390.00=$402.09; and
(b) As used herein, the "HUD Factor Adjusted
Rent" shall mean the product of (i) the then existing rent rate
for such Unit, multiplied by (ii) the Automatic Annual Adjustment
Factor in effect on the date an which such calculation is to be
made for the Los Angeles -Long Beach, California areas, calculated
as if the rent for such apartment unit excluded the highest cost
utility for such Unit. The Automatic Annual Adjustment Factor
shall mean the Annual Adjustment Factors established pursuant to
Section 8(c)(ii)(A) of the United States Housing Act of 1937 (42
920707 plw b559-3.jar (1) — 38 —
U.S.C. 1437f(c)(ii)(A)), as published annually in the Federal
Register (24 CFR 888.202). An example of the calculation
provided for above is as follows: Assume that the Automatic
Annual Adjustment Factor in effect on April 1, 1992 is 1.058.
The HUD Factor Adjusted Rent would be calculated by multiplying
(i) the then existing rent rate ($390.00) by (ii) the Automatic
Annual Adjustment Factor (1.058), i.e., $390.00 multiplied by
1.058=$412.62.
Based upon the examples set forth in (a) and (b) above, the CPI
Adjusted Rent ($402.09), added to the HUD Factor Adjusted Rent
($412.62), and the sum then divided by 2, equals $407.36. The
increase in rent from $390.00 to $407.36 would be an increase of
$17.36, which exceeds 2% of $390.00 ($7.80). Accordingly, in
this example of the calculation to be used in determining annual
rent increases pursuant to this Subsection 8.2.6, Developer would
be allowed to raise the then applicable rent for the subject Unit
to $407.36, despite the fact that such increase is in excess of
2%.
Notwithstanding the foregoing, Developer may not
increase the annual rent for any unit by more than six percent
(6%) in any single year. Annual increases approved by the
Housing Committee may be implemented in full or in part at the
Developer's sole discretion and option. Nothing contained herein
shall obligate Developer to make annual increases in rent, to the
extent that Developer, at Developer's sole and absolute
discretion, believes that such increases may be detrimental to
the operation of the Project. Permitted rent increases shall be
effective on the Anniversary or on the expiration of any rental
increase notice period required by law, whichever is later.
8.2.7 Limitation on Rent Increases.
Notwithstanding the provisions of Subsection 6.2.6, any rental
increase permitted by Subsection 8.2.6 shall not be made if, and
to the extent, the rent to be charged any person who is in
occupancy of a Unit at the time of a rent increase permitted by
Subsection 8.2.6 exceeds the current affordable rent (including a
reasonable allowance for utilities) that may be charged for very
low, lower, or moderate income persons under Health & Safety Code
Section 50053. The rental category (i.e. very low, lower, or
moderate income) under which the occupant of the Unit originally
qualified to rent the Unit shall govern the "affordable rent" (as
defined in Subsection 8.2.4) to be charged for rental of the
Unit.
8.2.8 Successor Tenants Rents. The rent for
qualified successor tenants (applicants approved for occupancy)
upon the vacancy of a Unit shall be equal to the rent paid for
such Unit by the tenant immediately prior to'the vacancy,
provided, however, that if the vacant Unit is to be rented to a
senior citizen in a different income category (e.g., from a lower
income former tenant to a moderate income successor tenant or
vice versa) then the rent to be paid for such Unit by the
920707 piw b559.3.jar (1) — 39 —
successor tenant shall be equal to the current rent being paid
for Units in the same income category (i.e. very low, lower, or
moderate income) at the time the vacancy is filled.
8.2.9 Annual Report. Developer shall submit
to Agency annually, on or before June 30 of each calendar year, a
report setting forth the rental rate of all Units and the income
and number of known occupants of all Units. The income
information required by this Section shall be supplied by the
tenants of the Units in a certified statement on a form from time
to time provided by the Agency.
8.3 Rental Subsidy. Agency agrees to provide a rental
subsidy to the Project of $155,760 per year, in accordance with
the terms and conditions of the Rental Subsidy Program set forth
in Section 8.4 hereof. Such subsidy shall continue for a period
of thirty (30) years from the date of the issuance of a
Certificate of Occupancy on the Project. Agency shall review the
amount of such subsidy at least once each five years, commencing
no later than the fifth anniversary of the date on which the
first Unit is rented, in order to consider whether or not it is
appropriate to increase such subsidy to reflect increases in
consumer prices or other inflation in the costs of housing;
provided, however, that in no event shall the amount of such
subsidy decrease and in no event shall Agency be required to
increase the subsidy but may do so.
8.4 Rental Subsidy Program.
8.4.1 Payment of Subsidy. Subject to the
provisions of the Senior Citizens Rental Assistance Program
(which is attached hereto and incorporated herein as Attachment
No. 17), Agency agrees to pay a monthly rental subsidy of not
more than one -twelfth (1/12th) of the annual subsidy provided for
in Section 8.3. The subsidy shall commence on the date of the
issuance of a Certificate of Occupancy on the Project. Agency's
subsidy obligation shall be reduced by $200 per unit per month
for any Unit(s) that are vacant more than thirty (30) days.
Agency shall receive a rebate of any subsidy over payments
resulting from vacancies.
8.4.2 Carryover of Subsidy. Any rebate that
Agency may be entitled to at any year-end may be used to
subsidize units in a later year (in addition to the total yearly
subsidy obligation provided for in Section 8.3 hereof) or may be
withdrawn by Agency if Agency shall elect to do so. Any rebate
due to Agency shall be paid to Agency within 30 days of the due
date of the accounting report referred to in Subsection 8.4.3.
8.4.3 Accounting for Subsidy PayMents.
Developer shall provide Agency an accounting report showing the
rents and periods of time each unit was rented. The report shall
include a reconciliation of the total subsidy drawn during the
applicable period and the amount of any subsidy to be rebated for
920707 plw b559-3.jar (1) — 4 0
such period. The first accounting period for which a report
shall be made shall end on the last day of the month in which all
of the Units have been initially rented to the first occupants.
An accounting shall be made to Agency within 30 days of such
date. Thereafter, an annual accounting shall be made within 30 -
days of the yearly anniversary of the end of the month for which
the first accounting report was made.
Developer shall maintain a complete and accurate
rent roll listing all rental units, with the forty-three (43)
very low/lower units and the forty-four (44) moderate Units
listed separately, the names of all tenants, the dates of their
tenancies and the amounts of rents charged and collected. Such
records shall be subject to examination by Agency, through its
authorized designee, from time to time at reasonable times during
business hours.
8.5 Ri hts of Agency. Agency or the Housing Committee
shall have the continuing right during the period provided for in
Section 8.2 to verify that the restrictions, limitations and
requirements of this Article 8 are being complied with and to
establish and/or continue a low and moderate income (as defined
in California Health and Safety Code Section 50093) Housing
Program at the project in accordance with the "Senior Citizens
Rental Assistance Program" as it may be amended from time to time
by Agency provided such amendments are consistent with the
provisions of this Agreement. The Senior Citizens Rental
Assistance Program shall provide inter alias
(a) that it is to benefit senior citizens
over sixty-two (62) years of age,
(b) that senior citizens who have resided in
the City of Carson for at least one (1) year prior to occupancy
at the Project shall be given a priority in renting the Units,
(c) that senior citizens who have resided in
the City of Carson and who are determined by the Housing
Commission to be displaced shall be given a priority in renting
the Units,
(d) that senior citizens of very low income
shall be given a priority in renting the forty-three (43) Units
referred to in Subsection 8.2.2, and
(e) that senior citizens of moderate income
who have incomes not exceeding 100 percent (instead of up to 120
percent) of area median income shall be given a priority in
renting the forty-four (44) Units referred to in Subsection
8.2.3.
Any priority provided for above and in the Senior Citizen Rental
Assistance Program shall only be considered if the person to
which the priority applies otherwise qualifies under the rental
criteria established by Developer and approved by Agency for
rental of the Units.
920707 ptw b559-3.jar (1) — 41 —
8.6 Obligation to Refrain from Discrimination. There
shall be no discrimination against any person, or group of
persons, on account of sex, marital status, race, color,
religion, creed, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the
Site, or any part thereof, and Developer (or any person or entity
claiming under or through Developer) covenants and agrees not to
establish or permit any such practice or practices of
discrimination with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants or sublessees of
the Site or any part thereof. The Developer also agrees to
refrain from any form of discrimination as set forth above
pertaining to deeds, leases or contracts.
8.7 Form of Nondiscrimination and Non -segregation
Clauses. The Developer shall refrain from restricting the
rental, sale or lease of the Site, or any portion thereof, on the
basis of sex, marital status, race, color, religion, creed,
ancestry or national origin of any person. All deeds, leases or
contracts shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
1. In deeds: "The grantee herein covenants by and for
himself, his heirs, executors, administrators and
assigns, and all persons claiming under or through
them, that there shall be no discrimination
against or segregation of, any person or group of
persons on account of sex, marital status, race,
color, religion, creed, national origin, or
ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the land
herein conveyed or the improvements thereon or to
be constructed thereon, nor shall the grantee
himself or any person claiming under or through
the grantee, establish or permit any such practice
or practices of discrimination or segregation with
reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the land herein conveyed
or such improvements. The foregoing covenants
shall run with the land."
2. In leases: "The lessee herein covenants by and for
himself, his heirs, executors, administrators and
assigns, and all persons claiming under or through
him, and this lease is made and accepted upon and
subject to the following conditions:
That there shall be no discrimination against or
segregation of any person or group of persons on
account of sex, marital status, race, color,
religion, creed, national origin or ancestry, in
the leasing, subleasing, transferring, use, or
enjoyment of the land herein leased or the
920707 plu b559-3.jar (1) — 42 —
improvements thereon or to be constructed thereon,
nor shall the lessee himself, or any person claim-
ing under or through the lessee, establish or
permit any such practice or practices of
discrimination or segregation with reference to
the selection, location, number, use or occupancy,
of tenants, lessees, sublessees, subtenants or
vendees of the land herein leased or such
improvements."
3. In contracts: "There shall be no discrimination
against or segregation of, any person, or group of
persons on account of sex, marital status, race,
color, religion, creed, national origin or
ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the land or
the improvements thereon or to be constructed
thereon, nor shall the transferee himself or any
person claiming under or through the transferee,
establish or permit any such practice or practices
of discrimination or segregation with reference to
the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or
vendees of the land or such improvements."
8.8 Effect and Duration of Covenants. The covenants
established in this Agreement shall without regard to technical
classification or designation, be binding on Developer, his
successors, assignees, and every successor in interest to the
Site, or any part thereof, for the benefit and in favor of
Agency, its successors and assigns, and the City of Carson.
Except as set forth in the following sentence, the covenants
contained in this Agreement shall remain in effect until the
expiration of the period set forth in Section 8.2, unless this
Agreement provides for their earlier or later termination. The
covenants against discrimination set forth in Sections 8.6 and
8.7 shall remain in perpetuity.
ARTICLE 9. MANAGEMENT OF THE PROPERTY
9.1 Operation, Maintenance and Repair. Developer
shall have full responsibility for the operation and maintenance
of the Improvements throughout the duration of the period
provided for in Section 8.2, and shall perform all repairs,
maintenance and replacements necessary to maintain and preserve
the Improvements in a first class, safe and sanitary condition,
in a manner satisfactory to the Agency and in compliance with all
applicable laws. Developer's responsibilities shall include, but
not limited to, hiring and discharge of employees, salary of
employees, maintenance and repairs including capital
expenditures, the financial operations of the Project, the rental
of the apartment units and all operational, maintenance and
management responsibilities of an owner of a multi -residential
housing project.
9ZD707 plw b559-3.jar (1) — 43 —
Developer shall maintain the Improvements and
landscaping within the public rights of way which may abut the
Site throughout the term of this Agreement without expense to the
Agency, and shall perform all repairs and replacements necessary
to maintain and preserve said Improvements and landscaping in a
first-class, decent, safe, sanitary, attractive, and healthy
condition in a manner reasonably satisfactory to the Agency and
in compliance with all applicable laws, and shall keep the Site
free from any accumulation of debris or waste materials.
The complete work of any reconstruction or
replacement shall be at least equal in value, quality and utility
to the condition of the Improvements or landscaping before the
event giving rise to the work.
9.2 Leasina and Occupancy.. The leasing and occupancy
of the Units shall be in accordance with the approved Management
Plan, attached hereto as Attachment 18. Any modifications or
changes to the Management Plan shall be submitted to the Housing
Committee for approval. The Management Plan shall include the
tenant selection criteria, procedures for tenant selection and
the establishment and maintenance of waiting lists, the lease and
rental agreement, a copy of the House and Ground Rules adopted
for the Project and all policies and procedures to be used to
ensure compliance with the age, income, and any other
requirements set forth as conditions for eligibility or occupancy
in the Project and shall be consistent with the terms and
conditions of this Agreement. The units shall be leased under
Rental Agreements substantially in the form attached hereto and
incorporated herein as Attachment 19, as supplemented by the
provisions and requirements of Section 8.7. Any modifications or
changes in the Rental Agreements shall be submitted to the
Housing Committee for approval.
Agency shall review and approve all policies and
procedures established for the successful management of the
Project. Subject to the rights of the occupants of the Units,
Agency shall have the right to perform an annual on-site
inspection of the Units, common areas and grounds and to perform
an annual tenant file review to ensure that Developer is managing
the Project in accordance with the eligibility requirements set
forth for occupancy.
9.3 Pre -Leasing. Developer shall perform all
advertising and related pre -leasing work as set forth in the
approved Management Plan.
9.4 Management of Project. Developer shall be
completely responsible for the management, administration and
operation of the Project including, but not limited to the hiring
and discharge of employees, salaries and all other related
project expenses, maintenance and repairs, including capital
expenditures, the financial operations of the Project, the rental
and re -rental of the apartment units in accordance with the
920707 plw b559-3.jar (1) — 44 —
occupancy requirements set forth in this Agreement and all
operational, maintenance and management responsibilities of an
owner in a typical multi -family residential housing project.
9.5 Management Fee. Developer may employ a management
company (the "Management Agency") to perform certain obligations
of Developer hereunder with respect to the management and
operation of the Project consistent with the Management Agreement
attached hereto and incorporated herein as Attachment 20 and any
approved amendments thereto. Developer currently anticipates
that it will employ Thomas Safran & Associates, Inc. as the
Management Agency. Any such employment shall not relieve
Developer of any obligation or responsibility imposed upon
Developer by this Agreement or the Regulatory Agreement.
As consideration for performing the management
tasks described herein, Developer shall be entitled to receive 8%
of monthly gross income (for this purpose the monthly subsidy
provided for in Article 8 shall be deemed a part of monthly gross
income) derived from the operation of the Project (the
"Management Fee"). The Management Fee is intended to cover all
of Management Company's office overhead and administration
expenses associated with the supervision and oversight of the
management of the property, including without limitation,
secretarial, accounting, telephone, travel, etc.. However, the
Management Fee does not include the costs of on-site management
expenses, including the cost of an on-site property manager and
on-site maintenance and other operational expenses normally
associated with the property. The Management Fee may be
withdrawn by Developer monthly as a cost of operation. Developer
shall not be entitled to receive a management fee in excess of
the percentage permitted in this Section 9.5 during the period
provided for in Section 8.2.
9.6 Management Agency's Failure to Perform. In the
event the Management Agency appointed by Developer fails to
perform the obligations imposed upon Developer by this Article 9
such failure shall constitute a default under Section 10.1 and if
Developer shall fail to cure such default as provided in Section
10.1., then Agency shall have the right, in addition to any other
remedies of Agency, to require Developer to appoint a substitute
Management Agency, reasonably acceptable to both Agency and
Developer.
9.7 Public Agency Rights of Access for Construction.
Repair and Maintenance of Public Improvenents and Facilities.
Agency for itself and for the City and/or other public agencies
at their respective sole risk and expense, reserves the right to
enter the Site or any part thereof, at all reasonable times and
with as little interference as possible, for'the purposes of
construction, reconstruction, maintenance, repair or service of
any public facilities located or to be located on the Site. Any
such entry shall be made only after reasonable notice to
Developer. Any damages or injury to the Site or to the
920707 plw b559-3.jar (1) — 45 —
improvements thereon resulting from such entry shall be the
responsibility of the public agency making or in whose behalf the
entry is made.
ARTICLE 10. DEFAULTS, REMEDIES AND TERMINATION
10.1 Defaults. The following events shall constitute a
default hereunder: failure of either party to timely perform any
of the provisions of this Agreement; or the filing of a petition
in bankruptcy by or against Developer or appointment of a
receiver or trustee of any property of Developer; or an
assignment by Developer for the benefit of creditors; or
adjudication that Developer is insolvent by a court, and the
failure of Developer to cause such petition, appointment or
assignment to be removed or discharged within ninety (90) days;
or recordation of a Notice of Default under any mortgage, deed of
trust, or security instrument encumbering the Site. If the
default is not commenced to be cured within thirty (30) days
after service of the notice of default and is not cured promptly
in a continuous and diligent manner within a reasonable period of
time after commencement, the nondefaulting party may thereafter
(but not before) commence such action(s) against the
nondefaulting party as it may be entitled to bring under the law.
10.2 Non -Waiver of Rights or Remedies. Except as
otherwise expressly provided in this Agreement, any failure or
delay by either party in asserting any of its rights or remedies
as to any default, shall not operate as a waiver of such default,
or of any such right or remedies, or deprive either party of its
right to institute and maintain any actions or proceedings which
it may deem necessary to protect, assert or enforce any such
rights or remedies.
10.3 Legal Actions.
10.3.1 Applicable Law. The laws of the State
of California shall govern the interpretation and enforcement of
this Agreement.
10.3.2 Service of Process. In the event that
any legal action is commenced by Developer against Agency,
service of process on Agency shall be made by personal service
upon the Executive Director or Secretary of Agency, or in such
other manner as may be provided by law.
In the event that any legal action is commenced by
Agency against Developer or its successor or assignee, (i) if
Developer or its successor or assignee is a partnership, service
of process shall be made by personal service upon any person who
is a direct or indirect general partner thereof, or in such other
manner as may be provided by law, or by personal service upon any
corporate officer of a corporation that is a direct or indirect
general partner thereof, or (ii) if Developer or its successor or
assignee is a corporation, service of process shall be made by
920707 plw b559-3.jar (1) — 46 —
personal service upon a corporate officer of Developer or its
successor or assignee, as the case may be, or in such other
manner as may be provided by law, whether made within or without
the State of California.
10.4 Rights and Remedies are Cumulative. Except as
otherwise expressly stated in this Agreement, the rights and
remedies of each party are cumulative, and the exercise by either
party of one or more of such rights or remedies shall not
preclude the exercise by it, at the same time or different times,
of any other rights or remedies for the same default or any other
default by the other party.
ARTICLE 11. GENERAL PROVISIONS
11.1 Notices Demands and Communications Between the
Parties. Formal written notices, demands, correspondence and
communications between Agency and Developer shall be deemed
sufficiently given two (2) days after deposit in a sealed
envelope in the United States Mail, postage prepaid, by
registered or certified mail, return receipt requested, to the
principal offices of Agency or Developer as set forth in
Subsections 1.3.1 and 1.3.2 of this Agreement, respectively.
Such written notices, demands and communications may be sent in
the same manner to such other addresses as the party to be
notified may from time -to -time designate as provided in the first
sentence of this Section 11.1.
11.2 Conflict of Interests. No member, official or
employee of Agency shall have any personal interest, direct or
indirect, in this Agreement, nor shall any such member, official
or employee participate in any decision relating to the Agreement
which affects his or her personal interests or the interests of
any corporation, partnership or association in which he or she is
directly or indirectly interested.
11.3 Warranty Against Payment of Consideration for
Agreement. Developer warrants that it has not paid or given, and
will not pay or give, any third person, including, but not
limited to, the City Council of Carson, the Agency, the City of
Carson, or any member, official or employee thereof, any money or
other consideration for obtaining this Agreement.
11.4 Nonliability of Agency Offi,,gi at is and Em llooyees..
No member, official or employee of Agency or the City of Carson
shall be personally liable to Developer, or any assignee or
successor in interest, in the event of any default or breach by
Agency or for any amount which may become due to Developer or any
assignee or successor in interest, or on any obligation under the
terms of this Agreement.
11.5 Enforced Dela • Extension of Times of Performance.
Performance by either party hereunder shall not be deemed to be
in default where delays or failure to perform are due to war,
920707 plu b559.3.jar (1) — 47 —
insurrection, strike, lock -out, riot, flood, earthquake, fire,
casualty, act of God, act of the public enemy, epidemic, quaran-
tine restriction, freight embargo, lack of transportation,
unusually severe weather, inability to secure necessary labor,
materials or tools, act of the other party, or any other cause
beyond the reasonable control or without the fault of the party
claiming an extension of time to perform. An extension of time
for any such cause shall only be for the period of the enforced
delay, which period shall commence to run from the time of the
commencement of the cause provided that written notice of such
cause is given to the other party within ten (10) days after the
commencement of the cause. Times of performance under this
Agreement may also be extended in writing by mutual agreement of
Agency and Developer. Failure of Developer to obtain financing
for the Project or Developer's financial inability to obtain such
financing shall not be grounds for excuse or extension.
11.6 Inspection of Books and Records. The Agency has
the right at all reasonable times, upon twenty-four hours advance
written notice setting forth the reason therefor, to inspect the
books and records of Developer pertaining to the Site and
development thereof as pertinent to the purposes of this
Agreement. The Developer also has the right at all reasonable
times to inspect the books and records of Agency pertaining to
the Site and development thereof as pertinent to the purpose of
this Agreement.
11.7 Approvals by Agency and Develo er. Wherever this
Agreement requires Agency or Developer to approve any contract,
document, plan, proposal, specification, drawing or other matter,
such approval, or if appropriate, disapproval, shall be in
writing and shall not be unreasonably withheld or delayed.
11.8 Plans and Data. If Developer does not proceed
with the purchase or development of the Site, and this Agreement
is terminated with respect thereto for any reason, Developer
shall deliver to Agency any and all plans, soil tests and data
concerning the Site and any proposed improvements thereto, and
Agency or any person or entity designated by Agency shall have
the right to use such plans and data without charge by, or
obligation to, Developer. Developer's obligation hereunder is
subject to Agency's compliance with the requirements of Section
3.2.3(ii) hereof.
11.9 Brokerage Commissions. Agency shall not be liable
for any real estate commission or brokerage fees which may arise
here from. Each party represents that he or it has engaged no
broker, agent, or finder in connection with this transaction.
Agency agrees to hold Developer harmless from any claim made by
any broker, agent or finder claiming compensation by reason of
any dealing with Agency, and Developer agrees to hold Agency
harmless from any claim by any broker, agent or finder claiming
compensation by reason of any dealing with Developer.
920707 p[w b559-3.j*r (1) � 48 —
ARTICLE 12. SPECIAL PROVISIONS
12.1 agency AporovalgZ Covenants. Conditions and
P,estr gtigns. Developer shall submit to Agency for approval any
proposed covenants, conditions and restrictions ("CC&R's")
affecting any and all portions of the Site. Such CC&R's shall
incorporate all provisions of this Agreement which run with the
land or are binding on Developer's successors, administrators,
assigns or lessees pursuant to this Agreement.
12.2 Approvals in Writing. Any approvals required or
permitted under the terms of this Agreement shall be in writing
and signed by the party hereto against whom such approval is
asserted, or its or his designed representative, with the right
to approval.
ARTICLE 13. ENTIRE AGREEMENT, WAIVERS AND AMENDMENT
This Agreement is executed in six (5) duplicate
originals, each of which is deemed to be an original. This
Agreement includes Fifteen Articles ( 52 ) pages and plus
attachments Nos. 1 through 19 which constitute the entire
understanding and agreement of the parties related to the
Project. This Agreement supersedes all negotiations or previous
agreements between the parties with respect to all or any part of
the subject matter hereof.
ARTICLE 14. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY
This Agreement, when executed by Developer and
delivered to Agency, may be withdrawn by the Developer on written
notice to Agency if not executed and delivered by Agency within
30 days after the date of submission of the executed Agreement to
Agency. The date of this Agreement shall be the date when this
Agreement is signed by the Agency.
ARTICLE 15. ASSIGNMENT, TRANSFER AND SALE
15.1 In General. Except as herein provided to the
contrary, Developer shall not assign, transfer, or sell this
Agreement or any interest in the Site, the Project, the
Improvements, or any interest in Developer or any partner of
Developer (collectively, a "Transfer"), without Agency's prior
written consent first had and obtained. Any attempted Transfer
in violation hereof shall be ineffective and void and shall
constitute a default and breach of this Agreement by Developer,
and shall terminate any further obligations of Agency hereunder.
15.2 Consent _.F_r`iorto Issuance of Certificate of
COM21eti2ll. For the period from the date hereof through the date
of issuance of the Certificate of Completion, Agency may withhold
its:consent to any Transfer in Agency's sole and absolute
discretion; provided, however, Agency shall not unreasonably
withhold its consent to a Transfer by Developer, prior to
920707 plw b659-3.jor (1) — 4 9
issuance of a Certificate of Completion, of all of his rights and
interest in this Agreement and the Project to any entity
controlled, directly or indirectly, by Developer (including
without limitation any corporation in which Developer has a
controlling interest, or any partnership in which Developer is a
general partner, provided that Developer is responsible for the
day-to-day management of the partnership), provided that the
assignee or transferee assumes all obligations of the Agreement
on Developer's part and delivers a copy of such assumption to
Agency, and further provided that Developer shall jointly and
severally with such transferee remain responsible for the
performance of this Agreement on Developer's part until the
issuance of a Certificate of Completion. If the transferee is a
limited partnership, then the sale of limited partnership
interests in such limited partnership shall not require Agency's
prior consent.
15.3 Consent During 5 -years After Issuance
Certificate of Completion* For the period from the issuance of
the Certificate of Completion through the date that is five (5)
years after issuance of the Certificate of Completion, Agency may
withhold its consent to any Transfer in the Agency's sole and
absolute discretion.
15.4 Consent After 5 Years After Issuance o
.Certificate of Congletion. For the period from the date that is
five (5) years after issuance of the Certificate of Completion
through the end of the term hereof, Agency shall not unreasonably
withhold its consent to any Transfer.
15.5 Transfer Without consideratioll. Notwithstanding
the provisions of Sections 15.1, 15.2, 15.3, and 15.4, Agency
agrees to consent to any Transfer made by Developer without
Developer's receipt of any consideration of all, or substantially
all of the assets of Developer, to any entity which is
beneficially or legally owned by Thomas L. Safran, his spouse,
child, father, mother or grandchild, or a trustee or custodian
acting principally for the benefit of Mr. Safran or for his
lineal issue; provided however, if such Transfer occurs prior to
the issuance of the Certificate of Completion, Developer shall
remain jointly and severally liable with such transferee for the
performance of Developer's obligations set forth in this
Agreement.
15.6 Assumption of obligations. No Transfer permitted
by this Article 15 or otherwise made by Developer at any other
time, shall be effective unless and until the transferee (or any
subsequent assignee(s) or transferee(s)) assumes Developer's
obligations and agrees to be bound by the terms of this Agreement
in a writing duly executed by such assignee or transferee and
delivered to Agency.
920707 piw b559-3.Jsr (t) 50 —
IN WITNESS WHEREOF, the parties have entered into
this Agreement as of the 91"th- day of
CARSON REDEVELOPMENT AGENCY
a public body, corporate and
politic.,
By:W4-k�-'
Its a'rperson
Attest:
Its Seci-etary
Approved as to Form:
RICHARDS, WATSON & GERSHON
Agency Counsel
r
920707 plv b559-3.jar (1) — 51 —
u:nu 1Ab L. SAk' a,
THOMAS SAFRAN S IATES,
a Sole Proprie or ip
State of California }
County of
OnyG `'/ i. , 19 q� , before me, aN,✓.7L' 14F' Gl1c�iA-
, a Notary Public, personally appeared
I
personally known to me (or 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.
WITNESS my hand and official seal.
Signature (1, Live 4= A)�z
(seal)
State of California
County of
On
KENNETH JAN WOLF
COMM. #923604
-s Notary hbk-ca ftrria
Z LOS ANGELES COUNTY i
My comm. expires JUN 09,1995
Mit SAN VICEMT BLV^ 75M Las ANGELES, CA 90049
, 19 , before me,
a Notary Public, personally appeared
personally known to me (or 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.
Signature
(seal)
WITNESS my hand and official seal.
- 52 -
Attachment No. 16
CITY OF CARSON REDEVELOPMENT AGENCY
ENIOR CITIZEN RENTAL ASSISTANCE PROGRAM
I. PROGRAM„DEFINITION
This document constitutes the Senior Citizen Rental Assistance Program for
the City of Carson Redevelopment Agency and the guidelines for
implementation of the Program ("Program Guidelines") established in the
Disposition and Development Agreement ("DDA") executed by Owner and the
Carson Redevelopment Agency.
The purpose of the Program is to provide rental assistance in fixed amounts
to senior citizen tenants ("Tenants") whose incomes do not exceed the
qualifying limits established in the DDA. The California Legislature has
declared that there continues to exist throughout the State a seriously
inadequate supply of safe and sanitary dwelling accommodations for persons
and families of low income. Section 33449 of the California Health and
Safety Code provides that redevelopment agencies may provide subsidies to,
or for the benefit of, persons and families of very low, low -or moderate
income to assist them in obtaining housing in the community. This Program
and the Program Guidelines are designed to facilitate the provision of
housing for senior citizens who are of very low or low income, as defined
in the DDA.
_I. ELIGIBILITY REQUIREMENTS
A Tenant applicant is eligible to receive rental assistance under this
Program ("Rental Assistance Payment") if such applicant satisfies all of
the following conditions:
(1) The Tenant applicant must be a resident of the City of Carson prior to
approval for occupancy in the Carson Senior Housing Project.
(Z) The Tenant applicant must be 62 years of age or older.
(3) The Tenant applicant's income shall not exceed the amounts set forth
in the California Health and Safety Code for persons in the very low,
lower and moderate income cateacries.
III. RENTAL ASSISTANCE PAYMENTS
A. Source of Funds
This Program shall be funded through funds set aside by the Agency which
have been allocated for the provision of housing in accordance with the
purpose of this program.
B. TOM Of the Rental Assistance Proar
Rental Assistance Payments for this Program shall be for a period set forth
in the DDA. Rental Assistance Payments under this Program commence the
first day of occupancy of the first eligible Tenant, and shall continue to
the end of the term of the provided for in the DDA.
C. Maximum Rental Assistance PayMent
The Agency may make Rental Assistance Payments in accordance with the
provisions of this Program for the benefit of those tenants meeting the
eligibility requirements established in Section II hereof, and provided
that all conditions herein are met. The initial Rental Assistance Payment
to any eligible Tenant ("Maximum Payment") shall be $295 per unit per
month.
D. Computation of Rental Assistance yajaMt
The Owner shall compute the maximum Rental Assistance payment for each
eligible Tenant. "Tenant Rent" for eligible Tenants shall equal the
monthly gross rent minus the Rental Assistance payment approved by Agency.
The owner shall submit the assistance computation and request for
assistance payments to the Agency for recordation and approval.
E. Review of Rental subsidy
The amount of rental subsidy being provided by Agency shall be reviewed
every five (5) years as provided in Section 8.3 of the DDA.
IV. PROCEDURES FOR OCCUPANCY
A. Certification of Eligibility
A tenant may not receive rental assistance pursuant to this Program unless
and until the Tenant has been approved by the Owner and accepted for
residency in the Carson senior Housing Project. The Owner shall complete
and have available in the tenant file for Agency review all information
obtained and used by the Owner in qualifying the Tenant for residency.
Said information shall include the name, age and gender of the Tenant and
each member of Tenant's household; address and phone number of Tenant;
verified amount and sources of Tenant's income and that of each member of
Tenant's household; place of residency; Tenant's current housing situation;
and any special needs or circumstances of the Tenant.
Notice to an ineligible Tenant applicant is required and shall include the
reason for ineligibility and the right to appeal the determination with a
higher level management company official.
The Owner's certification of a Tenant's eligibility to receive Rental
Assistance Payments shall be for a period of one year commencing on the
first day of occupancy of the dwelling unit by the Tenant, and ending one
year from such day.
ae Owner shall review the eligibility status of each Tenant on a yearly
basis, and shall recertify a Tenant's eligibility as appropriate. Tenants
must update income information and submit such other information and
records as will be required by the Owner. The Owner shall notify the
Tenant of such recertification and of any change in the amount of the
Agency's Rental Assistance Payment.
The Owner may also review the eligibility status of a Tenant on an interim
basis if there is a substantial change in the composition of the Tenant's
household or an increase in income of the Tenant's household. Each
eligible Tenant shall be required to notify the Owner of any such
substantial change.
If a tenant recertification reveals that they are over the income
eligibility allowed for the Rental Assistance Program, the tenant shall be
notified in writing that their rent will be increased to the then
prevailing rent paid by the non -assisted tenants. In this event, the Owner
shall determine whether any other current tenants qualify for subsidy and
shall make adjustments to ensure that the assistance is being paid on
behalf of the lowest income tenant.
B. Rental Assistance Payments To Owner
Rental Assistance Payments shall be paid to the Owner on the first day of
each month on behalf of the Tenant based upon the monthly rent roll
submitted by the Owner. Rental Assistance Payments shall be due and owing
:rom the date of occupancy by an eligible Tenant, through the last day of
the month in which the Tenant vacates the dwelling unit; except that the
Agency shall not be obligated to pay a Rental Assistance Payment for any
month or portion thereof where the Tenant has vacated the dwelling unit and
the Owner did not give notice to the Agency as required by Section V.A.
below. Owner shall not request a subsidy for any Unit that is vacant more
than 30 days.
V. VACATED DWELLING_UNIT BY TENANT
A. Notice -to Agency by Owner
If a Tenant, receiving rental assistance vacates a dwelling unit for any
reason, the Owner shall notify the Agency immediately upon learning of the
vacancy or prospective vacancy, but in any event within 5 days after the
Owner learns of the vacancy.
If a tenant vacates a dwelling unit pursuant to the terms of a lease or
tenancy agreement between Tenant and Owner, Owner's notice.to the Agency
shall be within 5 days after the Owner receives notice of the vacancy or
prospective vacancy under the provisions of the lease or tenancy agreement.
B. Rental Assistance payments to Owner After Vacancy
`he Owner shall be entitled to retain the whole of a Rental Assistance
Payment made by the Agency for a month whether or not the Tenant resides in
the dwelling unit for the entire month. The Owner shall not, however, be
entitled to retain such Payment, or portion thereof, for any period a
dwelling unit is vacant and the Owner did not notify the Agency as required
by Section V.A above.
If the Owner fails to notify the Agency as required by Section V.A, the
Owner shall be required to prorate the Rental Assistance Payment and retain
only that portion applicable to the period that the dwelling unit was
occupied by the Tenant and to return the balance to the Agency.
VI. FILLING OF VACANCIES.OF RENTAL ASSISTED DWELLING OMITS
If a Tenant receiving Rental Assistance Payments vacates a dwelling unit,
the Owner shall fill the vacancy from the waiting list established and
maintained by the Owner for those applicants meeting the low income
eligibility requirement. Upon completing the income certification and
other eligibility criteria review, the Owner shall notify the Agency of the
new resident approved for rental assistance. A priority shall be given to
those Tenant applicants who qualify under the criteria set forth in Section
8.5 of the DDA_
Rtv. June 30, 1992
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