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HomeMy WebLinkAboutSDP 02-13; El Camino Housing Partners; 2005-0946749; Affordable Housing-Regulatory Agreement & Dec. of Restrictive CovenantsI \ CASSIA HEIGHTS 44352 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City Clerk's Office City.of Carlsbad Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad,• CA 92008 No fee for recording pursuant to Government Code Section 27383 ~2.<~bf\. ~~ - DOC# 2005-0946749 I 1111111111111111 11111 1111111111 lllll 1111111111111111111111111 llll llll OCT31, 2005 4:59 PM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE GREGORY J. SMITH. coumv RECORDER FEES: 0.00 PAGES: 23 111111111111111111111111III 1111111111111111111111111 DIii 111111111I 11111 Ull 1111 REGULATORYAGREEMENT AND DECLARATIONOF RESTRICTIVE COVENANTS (El Camino Real) This Regulatory Agreement and . Declaration of Restrictive Covenants (the "Agreement") is made and entered into as of /t>. 3 /. . 2005 (the "Agreement Date .. ), by and among the Carlsbad Redevelopment Agency, a public body, corporate and politic (the "Agency"), the City of Carlsbad, a municipal corporation (the "City"), and El Ca,nino Family Housing Partners-'4 LLC, a California !im!ted liability company (the "Developer"), / .f-thM.er) RECITALS C l. The City and the Developer have entered into a Land Disposition and Loan Agreement dated·as of March 16, 2005, as amended by that certain First Amendment to Land Disposition and Loan Agreement dated of even date herewith (collectively, the "Disposition Agreement") under which the City agreed to ground lease to the Developer certain real property in the City of Carlsbad and more particularly described in Exhibit A attached hereto and incorporated herein (the "Property") and to loan up to One Million Four Hundred Fifty Four Thousand Two Hundred Seventy Six Dollars ($1,454.276) (the ''City Loan")to the Developer to finance the development of a fifty-six (56)-unit affordable apartment complex on the Property (the "Development''). Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Disposition Agreement 2. The City Loan consists of Two Hundred Fifty Thousand Dollars ($250,000) of CDBG funds, Two Hundred Sixty Two Thousand Seventy Hundred Sixty Dollars ($262,760) of HOME funds, andNine Hundred FortyOne Thousand Five Hundred Sixteen Dollars ($941,516) of Agency Housing Fund monies. 3. Pursuant to Health and Safet~•Code Section 33334.3, the Agency must restrict developments assisted with funds from the Agency's Housing Fund, so that the developments remain affordable to tow and moderate income households for the longest feasible time. The Agency intends to restrict twenty-seven (27) oftheunits in the Development to very low income households. • 1010\16\220427.4 44353 4. Pursuant to the regulations governing the use of HOME funds ~et forth in 24 CFR 92 ~ .wt• (the "HOME Regulations"), the City must restrict developments assisted with HOME funds so that the developments remain affordable to low income households for a certain period of time. The Agency intends to restrict two (2) of the units in the development (the "HOME- Assiste4 Units"), This Agreement is intended to implement the HOME Regulations as they apply to the HOME-Assisted Units io the Development. 5. Through this Agreement the Agency is imposing occupancy and affordability restrictions on the Development in order to meet replacement housing requirements applicable to the Redevelopment Arca pursuant to Health and Safety Code Section 3341 J(a), 6. The Agency also intends to utilize the Development to obtain affordable housing production credits for the Agency pursuant to Health and Safety Code Section 33413(b)(2)(A) as newly constructed units located outside of the Redevelopment Area and available at affordable housing cost to very low income households and moderate income households. Such units are required to remain affordable to such households for fifty.five (SS) years. This Agreement is also intended to implement this requirement. 7. The City has agreed to provide the City Loan to the Developer and to ground lease the Property to the Developer on the condition that the Development be maintained and operated in accordance with Health and Safety Sections 33334.2 ~ RQ., l34'l 3(a) and 33413(b)(2)(A), the HOME Regulations, and in accordance with additional restrictions concerning affordability, operation, and maintenance of the Development, as specified in this Agreement, the Ground Lease and the Disposition Agreement. 8. Jn consideration of receipt of the City Loan, the Developer has further agreed to observe all the terms and conditions. set forth below. 9. In order to ensure that the entire Development wi IJ. be used · and operated in accordance with these conditions and restrictions, the Agency the City, and the Developer wish, to enter into this Agreement. THEREFORE, the Agency and the Developer hereby agree as follows: ARTICLE l. DEFINITIONS Section 1.1 Definitions. When used in this Agreement, the following tenns shall have the respective meanings assigned to them in this Article I. (a) ''Actual Household Size" shall mean the actual number of persons in the applicable household. • 1010\16\220427.4 2 \ i 44354 (b) "Adjusted Income" shall mean the total anticipated annual income of all persons ina householdas calculated in accordance with 24 CFR 92.203(b)(l) (which incorporates 24 CFR 813). (c) "Agency" shall mean the Carlsbad Redevelopment Agency, a public body, corporate and politic, (d) "Agreement" shall mean this Regulatory Agreement and Declaration of Restrictive Covenants. (e) "Agreement Date" shall mean the last date opposite the respective signatures of the Developer, the City, and the Agency on this Agreement. (f) "Assumed Household Size"shallmean the assumed household size under the HOME program for a one-bedroom unit, two-bedroom unit, or three-bedroom unit as applicable. (g) "City" shalfmean the City ofCarJsbad, a municipal corporation. (h) "City Loan" shall mean the funds loaned to the Developer by the City pursuant to ·the Disposition Agreement. {i) "Disposition Agreement" shall mean the Land Disposition and Loan Agreement entered into by and between the City and the Developer, dated as of March 16, 2005, as amended by thatcertain First Amendment to Land Disposition and Loan Agreement dated of even date herewith. G) 11Deed of Trust" shall mean the deed of trust of even date herewith in favor of the City on the Developer's lease and interest in the Property which secures repayment ofthe City Loan and the performance of the Disposition Agreement. (k) "Developer" .shall mean El Camino Family Housing Partners, LLC, a California limited liability company, and its pennitted successors and assigns. (l) :"Development" shaJI mean the Property and the fifty-six (56) residential units to be constructed on the Property, as well as any additional improvements, and all landscaping, roads and parking spaces existing thereon, as the same may from time to time exist. (m) "Extremely Low Income Household" shall mean a household whose income does not exceed the quaHfying limits for extremely Jow income households as established and amended from time to time by the Secretary of HUD and defined in Section 5.603(b) ofTUle 24 of the Code ofFederal Regulations. (n) "Extremely Low Income Rent" shall mean the maximum allowable rent for an Extremely Low Income Unit pursuant to Section 2.2(a) below. 1010\16\220427.4 3 \ 44355 (o) "Extremely Low Income Units" shall mean .the Units which, pursuant to Section 2.l(a) below. are required to be occupied by Extremely Low lncome Households. (p) "Forty Percent Household" shall mean a household with an Adjusted Income that does not exceed forty percent (40%) of Median lncom~, adjusted for Actual Household Size. (q) "Forty Percent Rent" shall mean the maximum allowable rent for a Forty Percent Unit pursuant to Section 2.2(b) below. (r) "Forty Percent Units" shall mean the Units which, pursuant to Section 2.1 (a) below, are required to be occupied by Forty Percent Households. (s) "Ground Lease" shall mean the Ground Lease between the Developer and the City dated of even date herewith. (t) "HOME" shall mean the HOME Investment Partnership Act Program pursuant to the Cranston-Gonzales National Housing Act of 1990, as amended. (u) "HOME-Assisted Units" shall mean the Units designated as HOME- Assisted by the City. (v) "HOME Regulations" shall mean the regulations governing the use of Home rnvestment Partnership Act funds as set forth in 24 CFR 92 m~~ (w) "Housing Fund" shall mean the Agency's Low and Moderate Income Housing Fund. (x) "Low Income Householdllshall mean a household with an Adjusted Income that does not exceed the lesser of (I) the qualifying limit for a low income family under the HOME Program as defined in 24 CFR 92.2, or (2) the qualifying limits for lower income households, as established and amended from time to time pursuant to Section 8 ofthe Unit~d States Housing Act of 193 7, and as published by the State of California Department of Housing and Community Dev~lopment. • (y) "Median Income'' shall mean the median gross yearly income, adjusted for ActualHouseholdSize or Assumed Household Size as specified herein, in the County of San Diego, California, as published frorn time to time by the United States Department of Housing and Urban Development ("HUD") and the State of California. In the eventthat such income determinations are no longer published, or are not updated for a period of at least eighteen ( 18) months, the Agency or the City shall provide the Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD and the State. 1010\16\220427.4 4 ( ( 44356 (z) "Other Income Household" shall mean a household with an Adjusted Income which does not exceed ninety percent (90%) of Median Income, adjusted for Actual Household Size, (aa) "Other Income Units" shall mean the Units which. pursuant to Section 2.l(c) below. are required_ to be occupied by Other Households. (bb) "Property"shall mean the real property described in Exhibit A attached hereto and incorporated herein. (cc) "Redevelopment Areatt shall mean Carlsbad Village Redevelopment Project Area and the South Carlsbad Coastal Redevelopment Area, as may be amended from time to time. ( dd) "Rent" shall mean the total of monthly payments by the Tenant of a Unit for the following: use and occupancy of the Unit and land and associated facilities. including parking; any separately charged fees or service charges assessed by the Developer which are required of all Tenants, other than security deposits; an allowance for the cost of an adequate level of service for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service or cable TV; and any other interest, taxes, fees or charges for use of the lan4 or associatedfacilities and assessed by a public or private entity other than the Developer, and paid by the Tenant. (ee) "Tenant" shall mean a household legally occupying a Unit pursuant to a valid lease with the Developer. (tl) "Term" shall mean the term of this Agreement, which shall commence on the Agreement Date and shall continue for fifty-five (55) years. (gg) "Unit(s)" shall mean one (I) or all of the fifty-six (56) rental units to be constructed on the Property. (hh) "Very Lowlncome Household" shall mean a household with an Adjusted Income.that does not exceed the'lesser of (1) the qualifying limit for very low income families under the HOME program as defined in 24 CFR 92.2,or (2) the qualifying limits for very low income households, as established and amended from time to time pursuant to Section 8 of the_ United States Housing Act ofJ937, and as published by the State of California Department of Housing and Community Development. (ii) "Very Low Income Rent" shall mean the maximum allowable rent for a Very Low Income Unit pursuantto Section 2,2(c) below. (ij)' "Very Low (ncome Units"shallmean any of the Units which, pursuant to section 2. l(a) below, arc required to be occupied by Very Low Income Households. 1010\16\220427,4 5 l I I l 44357 ARTICLE 2. AFFORDABILITY AND OCCUPANCY COVENANTS Section 2.1 Occupancy Requirements. The Developer shall regulate the use and occupancy of the Units in the following manner: (a) Units. Fifty-six (56) Units shall be rented to and occupied by or, ifvacant, available for occupancy by households as follows: Extremely Forty Percent Very Low Other Low Income Total One Bedroom 2 2 0 8 12 Two Bedroom 2 2 6 IO 20 Three Bedroom 2 2 9 IO 23 Total 6 6 15 28 ss (+1 Mgr) (b) HOME-Assisted Units. Two (2)ofthe two-bedroom Very Low Income Units described in 2.l(a) above have been designated by the Cityas·HOrvtE-Assisted Units, Section 2.2 Allowable Rent. (a) Extremely Low Income Rent. Subject to Section 2.lbelow, the Rent charged to Tenants of the Extremely Low Income Units shall not exceed one-twelfth.( 1112th) of thirty percent (30%) of thirty percent (30%) of Median Income, adjusted for Assumed Household Size. (b) Forty Percent Rent. Subject to Section 2.3 below, the Rent charged to ' Tenants of the Forty Percent Units shall not exceed one~twelfth (I/12th) of thirty percent (30%) of forty percent (40%) of Median Income, adjusted for Assumed Household Size. (c) Very Low Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Very Low lncome Units shall not exceed one-twelfth (l/12",. of thirty percent (30%) of fifty percent {50%) of Median Income, adjusted for Assumed Household Size. If a Very Low lncome Unit is also a HOME-Assisted Unit, the Rent for such unit shall not exceed the lesser of the amount described in the .previous sentence or the HOME rent limit published by HUD for Very Low Income Units of the specified bedroom size. (d) Other Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Other Income Units shall not exceed one-twelfth (1/12°') of thirty percent (30%) of ninety percent (90%) of Median Jncome, adjusted for Assumed Household s~. • (e) Assumed Household Size. In calculating the allowable Rent for the Units, the following Assumed Household Sizes shall be utilized: provided, however, that household 1010\16\220427.4 6 ( 44358 size assumptions provided under the HOME program shallbe utilized for the HOME-Assisted Units, and the 1.5 persons per bedroom household size assumption may be utilized for any unit which is also regulated by a low income housing tax credit regulatory agreement. (f) Approval of Rents for Units. Initial rents for all Units shall be approved by the Agency and the City prior to occupancy. All rent increases for all Units shall also be submitted to the Agency and the City for approval not less than thirty (30) days before notice is given to the affected Tenant and shall be imposed only if in compliance with this Agreement. The Agency and the City shall provide the Developer with a schedule of maximum permissible rents for the Units annually. Section 2.3 Increased Income ofTenants. (a) Increase Above Thirty Percent of Median Income. In the event, upon recertification of a Tenant's household's income, the Developer determines that a former Extremely Low Income Household no longer qualifies as an Extremely Low Income Household (but does qualify as a Forty Percent Household). such household's Unit shall be considered a Forty Percent Unit, and, upon expiration of the Tenant's lease, and sixty.(60) days' written notice to the Tenant, the Rent may be increased to one-twelfth (I/12th) of thirty percent (30%)of forty percent(40%) of Median Income, and the Developer shall rent the next.available Unit to an Extremely Low Income Household to comply with the requirements of Section 2.1 above. (b) Increase Above Forty Percent of Median Income. In the event, upon recertification of a Tenant's houseljold'sincome, the Developer determines that a fonner Extremely Low ·lncome Household or a Forty Percent Household has an Adjusted Income that is above the qualifying limit for a Forty Percent Household but the household does qualify as a Very Low Income Household, such household's Unit shall be considered a Very Low r ncome Household, and, upon expiration of the Tenant's lease, and sixty (60) days' written notice to the Tenant, the .Rent may be increased to one-twelfth (I/12th) of thirty percent (30%) of fifty percent (SO%) ofMedianJncome, and the Developer shall rent the next available Unit to an Extremely Low Income Household or a Forty Percent Household to comply with the requirements of Section 2.1 above. (c) Increased Income Oyer VeO' Low Income. In the event, upon recertification ofa,Tenant's household's income, the Developer determines that a former Extremely Low Income Household, Forty Percent Household, or Very Low Income Household - has an Adjusted Income that exceeds the qualifying income for a Very Low Income .Household, but has an Adjusted Income not exceeding the qualifying limit for a Low Income Household, upon expiration of the Tenant's lease, and sixty (60) days' written notice to the Tenant, the Rent may be increased to one-twelfth (1/12~ of thirty percent(30%) of sixty percent (60%) of Median Income, and the Owner shall rent the next available Unit to an Extremely Low Income Household, Forty Percent Household, or Very Low Income Household to complywith the requirements of Section 2.1 above. If the Unit is a HOME•Assisted Unit, the Rent shall not exceed the lesser ofthe Rent described in the previous sentence or the maximum rent published by HUD for a HOME-assisted lower income unit. 1010\16\220427.4 7 ( d) Increased Income Oyer Low Income. In the event that, following recertification of a Tenant's income, the Developer dctennines that a fonner Extremely Low Income Household, Forty Percent Household, Very Low Income Household, or Lower Income Household has an Adjusted Income that exceeds the qualifying limit for a Lower Income Household but does not exceed ninety percent(90%) of Median Income, adjusted for Actual Household Size, then, upon expiration of the Tenant's lease and sixty (60) days' written notice to the Tenant, such household's Unit shall b~ considered an Other Unit, and the Rent may be increased to one-twelfth (1/12'11) of thirty percent (30%) of ninety percent (90%) of Median Income, and the Developer shall rentthe next available Unit to an ExtremelyLow Income Household, Forty Percent Household, or Very Low Income Household to comply with the requirements of Section 2.1 above. If the Unit is a HOME-Assisted Unit, the Rent shall be increased to the lesser of the Rent described in the previous sentence or one-twelfth (1/12"') of thirty percent (30%) ofactual Adjusted Income of the Tenant, upon sixty(60) days' written notice to the Tenant. (e) Increased Income over 90% of Median Income. If, upon recertification of a Tenant's income, the Developer determines that a Tenant has an Adjusted Income exceeding ninety percent (90%) of Median Income, adjusted for Actual Household Size, such Tenant shall be pennitted to continue to occupy the Unit, and, upon expiration of the Tenant's lease, and sixty (60) days' written notice to the Tenant, the Rent may be increased to one-twelfth (I/12th) ofthirty percent (30%) of actual Adjusted Income, and the Unit shall continue to be classified as an Other Unit until the Tenant vacates the Unit at which time the Unit shall be re-rented to an income- eligible household to meet the requirements of Section 2.1. (t) Termination of Occupancy. Upon termination of occupancy of a Unit by a Tenant, such Unit shall be deemed to be continuously occupied by a household of the same income·level (e.g., Extremely Low Income Household, Forty Percent House or Very Low Income Household) as-the income level of the vacating TenantJ until such Unit is reoccupied, at which time the income character of the Unit (e.g .• Extremely Low Income Household, Forty Percent House or Very Low Income Household) shall be redetermined. (g) Tax Credit Rules. the extent the provisions of this Section 2.3, regarding increased income of occupants, conflicts with rent and occupancy requirements applicable to any Units regulated by a low income housing tax credit regulatory agreement, such that the Developer cannot comply with both the tax credit requirements and the requirements of this Section 2.3, the Developer shall so notify the Agency and may comply with the tax credit re·quirements regarding increased income in lieu of the requirements ofthis Section 2.3. . . Section 2A J.]nits Available to the Disabled. The Developer shall comply with all requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and its implementing regulations (24 CFR 8). The Developer shall ensure that a minimum of three (3) Units in the Development are fully .accessible to households with a mobHity impaired member and an additional two (2) Units are fully accessible to hearing and/or visually impaired persons. IO I 0\16\220427.4 8 ( ,. I , ( 44360 ARTfCLEJ. INCOME CERTIFICATION AND REPORTING Section 3.1 Income Certification, The Developer shall obtain, complete and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Tenant renting any of the Units(excluding the manager's Unit), The·Developer shall make a good faith effort to verify that the income provided by an applicant or occupying household in an income certification is accurate by taking.one or more of the following steps as a part of the verification process: (1) obtain a pay stub for tbe most recent pay period; (2) obtain an income tax return for the most recent tax year; (3) conduct a creditagency or similar search; (4) obtain an income verification form from the applicant's current employer; (5) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services ifthe applicant receives assistance from either of such agencies; or (6) if the applicantis unemployed and has no such tax return, obtain another form of independent verification. Copies of tenant income certifications shall be available to the Agency and the City upon request. Section 3.2 Annual Report to the Agency. The Developer shall submit to the Agency and the City (a) not later than .the sixtieth (60"') day after the close of each cal~,ndar year, or such other date as may reasonably be requested by the Agency. a statistical report, including income and rent data ·for all Units covered by this Agreement, setting forth the information called for therein, and (b) within fifteen (l5) days after receipt of a written request, any other information or completed forms requested by the Agency or the City in order to comply with reporting requirements of HUD, the State of California, the City, and/or the Agency. Section 3.3 Additional Information. The Developer shall provide any additional information· reasonably requested by the Agency or the City. The Agency and the City shall have the right to examine and make copies of all books. records or other documents of the Developer which pertain to the Development. Section 3A Records. The Developer shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the Agency and the City to inspect records, including records pertaining to income and household size of Tenants. All Tenant lists, applications and waiting lists relating to the Development shall at all times be kept separate and identifiablefrom any other business of the Developer and shall be maintained as required by the Agency, in a reasonable condition for .proper audit and subject to examination during business hours by representatives of the Agency and the City: The Developer shall retain copies of all materials obtained or produced with respect to occupancy ofthe Units for a period ofat least five (S) years. 1010\16\220427.4 9 44361 Section 3.5 On-site Inspection. The Agency and the City shali have the right to perfonn an on-site inspection of the Development at least one ( 1) time per year. The Developer agrees to cooperate in such inspection. If the Agency or the City desires to inspect the interior of the .Units, theAgency or the City shall give Developer sufficient notice to allow the Developer to give seventy-two (72) hours notice to residents. Such right to annual inspect the Development shall be addition to the Cily's right to inspect the Development in accordance with the City's municipal code as may be amended from time to time. ARTICLE 4. OPERATION OF THE DEVELOPMENT Section 4.1 Residential Use. The Development shall be operated only for residential use. No part of the Development shall be operated as transient housing. Section 4.2 Compliance with Disposition Agreement and Qround Lease. The Developer shall comply with all the tenns and provisions of the Disposition Agreement and Ground Lease. Section 4.3 Taxes and Assessments. The Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it,.or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any Hen or charge from attaching to the Property; provided, however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the eventDeveloper exercises its right to contest any tax, assessment, or charge againstit, Developer, on final determination of the proceeding or contest, shall immediately pay or , discharge any decision or judgment rendered against it, together with all costs, charges and interest. The Developer shall not apply for a property tax exemption for the Property under any provision of law, including but not limited to Revenue and Taxation Section 214, without the Agen~y's prior written consent. Section 4.4 Preference to Displacees. The Developer shall give a preference in the rental of any Units to eligible households displaced by activity of the · Agency or the City upon receiving a written request of the Agency or the City regarding such displacement. 1010\16\220427.4 10 ( ( (_ 44362 ARTICLES. PROPERTY MANAGEMENT AND MAINTENANCE Section s~ I Management Responsibilities. The Developer is responsible for all management functions with .respect to the Development, including without limitation the selection of tenants, certification and .recertification of household size and income, evictions. collection of rents and deposits, . ·maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. Neither the City nor the Agency shall have responsibility over management of the • Deyelopment. The Developer shall retain a professional property management company approved by the Agency and the City in their reasonable discretion to perform its management duties hereunder as set forth below. A resident manager shall also be required. Section 5.2 Management Agent. TheDevelopmentshall at all limes be managed by an experienced management agent reasonably acceptable to the Agency alld the City, with demonstrated ability to operate residential facilities like the Development in a manner that will provide decent. safe, and sanitary housing ( as approved, the "Management Agent"). The Devel op~r shall submit for the Agency's (and the City's) approval the identity of any proposed Management Agent. The Developer shall also submit such additional infonnation about the background, experience and financial condition of any proposed Management Agent as is reasonably necessary for the Agency and the City to determine whether the proposed Management Agent meets fhe standard for a qualified Management Agent set forth above. lfthe proposed Management Agent meets the standard for a qualified Management Agent set forth above,the Agency and the City shall approve the • proposed Management Agent by notifying the Developer in writing. Ifthe proposed Management Agent is disapproved by the Agency and the City, the disapproval shall state with reasonable specificity the basis for disapproval. Thereafter, the Developer shall submit a different proposed Management Agent, and submit such additional information about the background, experience and financial condition of the proposed Management Agent as is reasonably necessary for the Agency and the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. Only upon the written approval of the Agency and the City of the Developer's proposed Management Agent shall constitute the Developer's compliance with this Section. Section 5.3 Periodic Performance Reyiew. The Agency and the City reserves the right to conduct an annual ( or more frequently, if deemed necessary by the Agency and the City) review·ofthe management practices and financial status of the Development, including the perfonnance of the Management Agent. The purpose of each periodic review will be to enable the Agency and the City to detennine ff the Development is being operated and managed in accordance with the requirements and standards ofthisAgreement. The Developer shall cooperate with the Agency and the City in such reviews. l010\16\220427.4 11 44363 Replacement of Management Agent. lf, as a result of a periodic review, the Agency and the City determine in its reasonable judgment that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, the Agency and the City shall deliver notice to Developer of its intention to cause replacement of the Management Agent, including the reasons therefor, Within fifteen ( 15) days of receipt by Developer of such written notice, Agency and City staff and the Developer shall meet in good faith to consider methods for improving the financial and operating status of the Development, including, without limitation, replacement of the Management Agent, If, after such meeting, Agency and City staff recommends in writing the replacement of the Management Agent, Developer shall promptly dismiss the then Management Agent, and shall appoint as the Management Agent a person or entity meeting the standards for ·a Management Agent set forth in Section S.2 above and approved by the Agencyand the City pursuant to Section 5.2 above. Any contract for the operation or management of the Development entered into by Developer· shall provide that the contract can be terminated as set forth above. Failure to remove. ·the Management Agent in accordance with the provisions of this Section shall constitute default under this Agreement, and the Agency and the City may enforce th~s provision through legal proceedings as specified in Section 6.8. Section 55 At1proval of Management Policies. The Developer shall submit' its written man~gement policies with respect to the Development to the Agency and the City for their review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement. Section 5.6 Property Maintenance. The Developer agrees, for the entire Tenn of this Agreement, to maintain all interior and exterior improvements, including landscapjng, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules~ ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials, The City and the Agency place prime importance on quality maintenance to protect its investmentand to ensure that all Agency and City-assisted affordable housing projects within the City are not allowed to deteriorate due to below-average maintenance. Normal-wear and tear of the Development will be acceptable to the City and the Agency assuming the Developer agrees to provide all necessary improvements to assure the Dev.elopment is maintained in good condition, The Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair. 1010\16\220427.4 12 ( ( ( 44364 In the event that the Developer breaches any of the covenants contained in this section andsuch default continues for a period often (10) days after written notice from the Cityor the Agency with respect to graffiti, debris, and waste material, orthirty (30) days after written notice with respect to general maintenance, landscaping and building improvements, (and subject to any stricter requirements included in any applicable City ordinance) then the City or the Agency, in addition to whatever other remedy each may have at law or in equity, shall have the right to enter upon the Property and perform or cause to be performed· all such acts and work ·necessary to cure the default. Pursuant to such right of entry, the City and the Agency shall be pennitted (but is not required) to enter upon the Property and petform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and .to attach a lien on the ·Property, or to assess the Property, in the amount of the reasonable expenditures arising from such acts and work of protection, maintenance, and preservation by the City and the Agency and/or costs of such cure, including an administrative charge equal to fifteen percent ( I 5%) qf such expenditures, which amount shall be promptly paid by the Developer to the City and the Agency upon demand. ARTICLE 6. MISCELLANEOUS Section 6.1 Lease Provisions; The Developer shall use ~_fonn of Tenant lease approved by the Agency and the City. The lease shaff not contain any provision which is prohibited by24 CPR Section 92.253(b) as may·be amended from time to time, The form ofTenant lease ·shall also comply with all requirements'of this Agreement, the Ground Lease, and the Disposition Agreement, and shall, among other ·matters: .(a) provide for tennination of the lease and consent by the Tenant to immediate eviction for failure: (1) to provide any information required under this Agreement or reasonably requested by the Developer to establish or recertify the Tenant's qualification, or the qualification ofthe Tenant's household, for occupancy in the Development in accordance with the standards set forth in this Agreement, or (2) to qualify as an Extremely Low Income Household, Forty Percent Household, or Very Low Income Household as a resultofany material misrepresentation made by such Tenant with respect to the income computation or certification; and (bl be for an initial term of not less than one (1) year, and provide for no Rent increase during such year, After the initial year of tenancy, the lease may be month to month by mutual agreement of the Developer and the Tenant, however the Rent may not be raised more often than once every twelve ( I 2) months. The Developer will provide each Tenant with at least sixty(60) days' written notice of any increase in Rent applicable to such Tenant, and with such further notice as, may be required by Section 2.3 above. 1010\16\220427.4 13 44365 (c) any tennination ofa lease or refusal by the Developer to renew shall be in conformance with 24 CFR 92.253(c) and must be preceded by no less than sixty (60) days written notice to the tenant by the Developer specifying the grounds for the action. Section 6.2 Nondiscrimination. All of the Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible. The Developer shall not give preference to any particular class or group of persons in renting or selling the Units, except to the extent thatthe Units are required to be leased to Extremely Low Income Households, Forty Percent Households, and Very Low Income Households. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national' origin, source of income (e.g., SSI)1 age, ancestry. or disabiHty1 in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoymentof any Unit nor shall the Developer or any person claiming under or through the Developer, establish or pennit 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 any Unit or in connection with the employment of persons for the construction, operation and management of any Unit, All deeds, leases or contracts made or entered into by Developer as to the Units or the Development or portion thereof, shall contain covenants concerning discrimination as prescribed by the Ground Lease and the Disposition Agreement. Section,6.3 Section 8 Certificate Holders. The Developer will .accept as Tenants, on the same basis as all other prospective Tenants; persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United StatesHousing Act of 1937, as amended, or its successor. The Developer shall not apply selection criteria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective Tenants,. nor shall the Developer apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Tenants. Section· 6.4 .Torm, The provisions of this Agreement shall apply to the Property for the entire Tenn. This Agreement shall bind any successor, heir or assign of the Developer, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by the Agency and the City. The City makes the City Loan on the condition, and in consideration of, this provision, and would not do so otherwise. Section 6.5 Compliance with Disposjtion Agreement. Ground Lease and Program Requirements. The Oevelopefs actions with respect to the Property shall at all times be in full conformity with: (i) all requirements of the Disposition Agreement and Ground Lease; (ii) all 1010\16'220427.4 14 ( ( \ 44366 requirements imposed on projects assisted under the HOME Investment Partnership Program as contained in 42 USC 12701 ;-m ~-, 24 CFR Part 92, and other implementing rules and regulations; (iii) all requirements imposed on projects assisted und~r the CDBG Program as contained in 42 U.S.C. 530 I et seq., 24 CFR Part 570, and other implementing rules and regulations, and (iv) all requirements imposed on projects assisted with the Agency's Housing Fund monies under California, Health and Safety Code Section 33334.2 et~- Section 6.6 Notice of Etrniration of Tenn. At least six(6) months prior to the expiration of the Term the Developer shall provide by first-class mail, postage prepaid, a notice to all Tenants in the Units containing (a) the anticipated date of the expiration of the Tenn, (b) any anticipated Rent increase upon the expiration of the Term, (c) a statement that a copy of such notice will be sent to the Agency and the City, and (d) a statement that a public hearing may be held by the Agency and the City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance ofany such hearing. The Developer shall also file a copy of the above-described notice with the Agency and the·City. Section 6. 7 Covenants to Run With the Land. The City, the Agency,. and the Developer hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall nm with the land, and shall bind all successors in'title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, sha,1 be held conclusively to have been executed, delivered and accepted subject to such covenants and restrictions. regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the Agency expressly releases such conveyed portion of the Property from the requirements of this Agreement. Section 6,8 Default by the Devel2per; Enforcement by the Agency or City, lfthe Developer fails to perfonn any.obligation under this Agreement (including but not limited to the failure to rent the Units as set forth ·in Section 2.1). and fails to cure the default within thirty (30) days after the Agency or the City have notified the Developer in writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to cure within thirty(JO) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days; or such longer period as approved by the Agency or the City in writing, the Agency or the City shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law: (a) Calling the Cjty Loan. The City may declare a default under the Disposition Agreement. and declare the City Loan due and payable and proceed with foreclosure under the Deed of Trust. 1010\16\220427.4 15 44367 (b) Action to Compel Performance or for Damages. The City may bring an action at law orin equity to compel the Developer's performance of its obligations und.er .this Agreement, and/or for damages. (c) Remedies Provided Under Disposition Agreement or Ground Lease. The City may exercise any other remedy provided under the Disposition Agreement or Ground Lease. (d) AgenRY or City Sublease of Units. If and to the extent necessary to correct any Developer default, the Developer hereby grants to the Agency and the City the option to lease, from time to time, Units in the Development for a rental of One Dollar ($1.00) per Unit per year for the purpose of subleasing such units to comply with Article 2 of this Agreement. Upon the request of the City or the Agency following such default by the Developer, the Developer hereby agrees to execute such documents as reasonably requested by the City or the Agency, as applicable, including but not limited to, rental agreement(s) in 41 fonn prepared by the City, to implement the sublease of the Unit(s). Any rents received by the Agency or the City, as applicable, under any such sublease shall be paid to the Developer after the Agency, or .the City, as applicable, has been reimbursed for any expenses incurred in connection with such sublease. Section 6.9 Recording and Filing. The Agency, the City, and the Developer shall cause this Agreement, and all wnendments, and supplements to it, to be recorded in the Official Records of the County of San Diego. Section 6.1 0 Goyeming Law. This Agreement shall be governed . by the laws of the State of California. Section 6.11 Waiver of Reguiremcnts. Any of the requirements of this Agreement may be expressly waived by the Agency or the City in writing, but no waiver by the Agency or the City of any requirement of this Agreement shall, or shall be deemed to, extend to or affect any other .provision of this Agreement. • Section 6. l 2 ·Amendments. This Agreement may be amended only by a written instrument executed by all the parties h~reto or their successors in title, and duly recorded in the real property records of the County of San Diego. • Section 6.13 Notjces. Any notice requirement set forth herein shall be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows: J0I0\16\220427.4 16 ( ( ( Developer: With a copy to: Agency: City: El Camino Family Housing Partners, LLC r;/o Affirmed Housing Group 200 East Washington. Suite 208 Escondido, CA 92025 Attn: Jim Silvenvood BCCC, Inc. c/o Boston Capital Partners Inc. One Boston Place Boston, MA 02110 Attn: Asset Management Department Carlsbad Redevelopment Agency 296S Roosevelt St., Suite B Carlsbad, CA 92008 Attn: Executive Director City of Carlsbad 296S Roosevelt St., Suite B Carlsbad, CA 92008 Attn: City Manager 44368 Such addresses may be changed by notice to the other party given in the same manner as provided above. Section 6.14 Severability. Ifany provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby. Section 6.15 Multiple Originals; Counterparts. This Agreement may be executed in multiple originals, each of which is deemed to be an originai and may be signed in counterparts. JOI0\16\220427.4 17 44369 IN WITNESS WHEREOF, the Agency, the City and the Developer have executed this Agreement by duly authorized representatives, as of the last date written below; APPROVED AS TO FORM By: Ron~ld Ball, City Attorney By·: ______ _ tOl0\16\220427.4 Developer: EL CAMINO FAMILY HOUSING PARTNERS, LLC, a Cali fomia limited liability company By: AFFIRMED HOUSING GROUP., a California co oration its Manager By: James Silverwood President Agency: CARLSBAD REDEVELOPMENT AGENCY,·apublic body corporate and politic By: Its: City: CITY OF CARLSBAD, a· municipal corporation By: Its: 18 ( ( ( 44370 JN WITNESS WHEREOF, the Agency, the City and the Developer have executed this Agreement by duly authorized representatives, as of the last date written below~ • APPROVED AS TO FORM By: By: Ball,. City Atto~ I of r:u. /or. IOJ0\16\220427.4 Developer: EL CAMINO FAMILY HOUSING PARTNERS, LLC, a California limited liability company By: AFFIRMED HOUSING GROUP., a California corporation; its Manager By: James Silverwood President Agency: Its:. BAYHQND B. PATCHETT, CITY MANAGER City: ~ n Its: • RAYMOND R. PATCHETT, CITY MANAGER 18 ~ 44371 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of Callfomia Countyol 5:io Q\oQ.~Q On Oc±o\>ec ~ ~afore m.e. w-oaa \_ C,rfhc.:e,~:1-n.ty fo.h I; C Dall • Nwni lllf TJ:lt ol Ofk:er (1.g., "JtlNI 0t.. Pulllic") personalty appeared RayroonD.. R llihkJ::\:: , Nll'l'lll(IJ Of Signlf{I) ~ersonally known to me D proved to me on the basis of satisfactory evidence to be the persont,f whose name~ls/anr subscribed to the within lnslrument and acknowledged to me that he/~ executed the same In hls/hedUie{r authorized capacity(JeST. and that by his~ signal~ on the lnslrument the perso~ or the entity upon behalf · of which the personK acted, executed the Instrument. -----------OPTIONAL----------- Though the lnlormatfon bstow fs not requited by law, il may prove valuable to p11rson, ratying on tho document Md could pravont fr,IHlul,nl removal and resttachmant ol lhls form to tmothor document. Description of Attached Document litle or Type of Document: ~\ru\:ar ~ \j-cev-€eVV\.Q. M; Document Date: Oc...-\o\otu: ciCo, 'aDOS Number of Pages: ~ Slgner(s) Other Than Named Above; ___________________ _ Capaclty(les) Clalmed by Signer Signer'sName: Rofro□rnQ R t>a.hba.;\-±: □ Individual □ Corporate OHlcer :-litle(s): -----------------□ Partner -□ Llmiled □ General □ Attorney-In-Fact o Trusre.e ~Guardian or C. • o'\S8rvalor '"I Other: C .l 1-'J \N\o. 00.. 'tf C Signer Is Representing: __________________ _ 0 19911 NllioNI NoCaty ~ • $350 Da 8olD Av,., P.O. Bo~ 2C02 • CNIIWOl1h, CA Ill~ 13·2402 • -.N~.orv ( 44372 ST ATE OF CALIFORNIA ) ) ss. COUNTY OF SANDIEGO ) 0-~·re me, the unders.igned, a Notary Pu. b. lic, per. sonally appeared • . · • . •. . , personally known to me (er pro, ctl te mo eR iheaasis ofsatisfae~ery eitic:lonee) to be the persotJWwhose nam~ is/a,e,subscribed to the within instrument, and acknowledged to me that he/she,lthey. executed the same in his/he#0leir authorized capacity(~. and that by his/lterJtheir signaturep_r'on the instrument the person~, or the entity upon behalf ofwhich the person~ acted, executed the instrument. • · J. GINGER HlfikE eel -Comm. I 1328600 . U) . NOlAR.Y PUlllC-CA. UFORNIA (I) l S111 D1190 Couftlf - 4 • IIJ C~. hplm NDv,S,20051 STATE OF CALIFORNIA ) ) ss .. COUNTY OF SAN DIEGO ) On _______ _. before me, the undersigned, 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. WITNESS my hand and official seal. lOI0\16\220427.4 ' EXHIBIT A (Legal Description) 44373 The land is situated in the State of California, County of San Diego, City of Carlsbad, and is described as follows: • A-1 1010\16\220427.4 ( 44374 EXHIBIT 1W ALL THAT PORTION OF FRACTIONAL NORTHEAST QUARTER OF SECTION 23, TOWNSHIP 12 SOUTH, RAN:GE 4 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS: .BEGINNING AT THE NORTHEASTERLY CORNER OF THE SOUTH 10 ACRES OF SAID FRACTIONAL NORTHEAST QUARTER OF THE SOUTHWEST QUARTER; THENCE ALONG THE NORTHERLY LINE OF SAID SOUTH 10 ACRES WESTERLY TO AN INTERSECTION WITH THE EASTERLY LINE OF ROAD SURVEY NO. lBQ0 .. 1, AS DESCRIBED IN A DEED TO THE COUNTY OF SAN DIEGO, RECORDED DECEMBER 18, 1969 AS FILE NO. 230092 OF OFFICIAL RECORDS; THENCE SOUTHERLY ALONG EASTERLY LINE OF SAID ROAD SURVEY NO. 1800·1 TO AN. INTERSECTION WITH THE SOUTH LINE OF SAID SOUTH 10 ACRES; THENCE EASTERLY ALONG SAID SOUTH LINE TO THE EAST LINE. OF SAID NORTHEAST QUARTER .OF THE SOUTHWEST QUARTER; THENCE NORTHERLY ALONG SAID EAST LINE TO THE POINT OF BEGINNING. (APNi 21S-020-27) DESCt.TR-OS/00/114bk