HomeMy WebLinkAbout; TOLL WEST COAST LLC; 2026-0063724; Affordable Housing-Regulatory Agreement & Dec. of Restrictive CovenantsRECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO :
City of Carlsbad
City Clerk's Office
Attn. City Clerk
1200 Carlsbad Village Drive
Carlsbad, CA 92008
No fee for recording pursuant
to Government Code Section
27383
DOC# 2026-0063724
111111111111 lllll 11111111111111111111111111111111111 IIIII IIIII IIII IIII
Mar 09, 2026 10:22 AM
OFFICIAL RECORDS JORDAN Z. MARKS,
SAN DIEGO COUNTY RECORDER
FEES: $68.00 (S82 Atkins: $0.00)
PAGES: 19
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON
REAL PROPERTY
(lnclusionary & Density Bonus)
This AFFORDABLE HOUSING Agreement IMPOSING RESTRICTIONS ON REAL
PROPERTY ("Agreement") is made , and .. entered into as of this S:-1-Vl ,·. , .. day of
.hArA-(vh , 20 '2V> , by and between the City of Carlsbad, a California municipal
corporation and charter city ("City"), and Toll West Coast, LLC, a Delaware Limited Liability
Company ("Developer").
RECITALS
A. The Developer is the owner of the real property as more particularly set forth
on Exhibit A, attached hereto and incorporated herein, and intends to develop
twenty-one (21) for-sale residential units on such property ("Project").
B. The City has adopted an lnclusionary Housing Ordinance as Carlsbad
Municipal Code (CMC) Chapter 21.85 requiring a percentage of new housing
development to be developed as affordable housing for very low and low-
income households.
C. The City has adopted a Density Bonus Ordinance as CMC Chapter 21.86 to
conform with state Density Bonus Law (defined below), which allows increases
to density and concessions and waivers in the development of new residential
housing in exchange for provision of affordable units.
D. The City approved the Project by Planning Commission Resolution No. 7533
on December 18, 2024. As part of the Project, the Developer agreed to restrict
1 unit (5% of the base units to satisfy CMC Chapter 21.86) of the Project to be
affordable to Very Low-Income Households (defined below) and will purchase
two affordable housing credits. This will satisfy the requirements of the
lnclusionary Housing Ordinance that the project provide three (3) units (12.5%
to satisfy CMC Chapter 21.85) as affordable to very low-income households.
E. The number of restricted units was based on provisions in CMC Chapter 21.85
requiring the number of units to be a percentage of the total approved
residential units, including density bonus units.
F. In accordance with Density Bonus Law, the Developer has applied for, and the
City has granted the following regulatory incentives with respect to the Project,
in exchange for the Developer's provision of affordable units: (i) a density bonus
of four (4) additional market-rate units for a total maximum Project size of
twenty-four, Developer has opted to build twenty-one (21) units; (ii) one (1)
incentive/concession, described as follows: waive the requirement that the
current water main servicing the property be upsized from a six-inch water main
to an eight-inch water main.; and (iii) eight (8) waivers or modifications to
development standards, as follows: (a) a waiver of CMC R-3 Standard
21.16.060(A)(1)(b) requiring buildings to observe a distance from the rear
property line the equivalent of twice the required side yard (20 feet rear-yard
setback), (b) a waiver of CMC R-3 Standard 21.16.050(A)(1) requiring a side
yard on each side of the lot ( ... ) not less than ten percent of the width of the lot;
provided, that such side yard shall be not less than five feet in width and need
not exceed ten feet (10 feet side yard setback), (c) a waiver of CMC Planned
Development Standard 21.45.060 (Table C) (C.9) requiring community
recreation space of 150 square feet per unit, (d) a waiver of CMC Planned
Development Standard 21.45.080 (Table E) (E.6) requiring a minimum 10 feet
minimum building separation, (e) a waiver of CMC Planned Development
Standard 21.45.080 (Table E) (E.7) limiting the number of tandem spaces for
residential parking to 25% of units, (f) a waiver of CMC Yards Standard
21.46.120 (3) limiting planting boxes and masonry planters that intrude into
required yards (and building separation for planned development projects) to
42 inches in height and two feet of intrusion, (g) a waiver of CMC Planned
Development Standard 21.45.060 (Table E) (C.6) requiring 0.25 visitor parking
spaces per each unit (requested for four-unit building only to eliminate ADA
parking requirement), and (h) a waiver of CMC Planned Development Standard
21.45.080 (Table E) (C.7) limiting the number of guest parking spaces provided
as tandem in the Beach Area Overlay Zone to 55% of visitor parking spaces.
G. With the city's approval of the project, one (1) of the Project's units, i.e. the Very
Low-Income Unit (defined below), will be restricted to occupancy by, and
affordable to a Very Low-Income Household as required by the Density Bonus
Law and CMC Chapter21.86.
H. With the city's approval of the project, one (1) Very Low-Income Unit will be
described and defined as the "Very Low-Income Unit" below). The Very Low-
Income Unit will be developed to meet the affordable housing obligations for
the Development as required by the Density Bonus Law.
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I. With the city's approval of the project, one (1) Very Low-Income Unit, as
described and defined as the "Very-Low Income Unit" below) will also satisfy
the lnclusionary Housing Ordinance requirement and therefore restricted as
required by the lnclusionary Housing Ordinance and/or CMC Chapter21.85. If
there is any discrepancy between Density Bonus Law and the lnclusionary
Housing Ordinance regarding affordability or occupancy requirements, the
strictest requirement shall prevail.
J. With the city's approval of the project, to satisfy the remaining obligation for the
lnclusionary Housing Ordinance and/or CMC Chapter 21.85, Developer agreed
purchase two affordable housing credits from the Tavarua Affordable Housing
Credit Bank prior to Final Map.
K. In accordance with the requirements of Government Code Section 65915 and
CMC Chapters 21.85 and 21.86, Developer agreed to enter into this
Agreement, for the benefit of the City, and to observe all the terms and
conditions set forth below.
L. In order to ensure that the Project will be used and operated in accordance with
all of the applicable conditions and restrictions, City and Developer wish to
enter into this Agreement.
THEREFORE, City and Developer hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Definitions. When used in the Agreement, the following terms shall have the
respective meanings assigned to them in this Article 1.
(a) "Affordable Housing Cost" shall be calculated in accordance with CMC
Section 21.85.020(A), California Health and Safety Code Section 50052.5,
and Title 25 of the California Code of Regulations, Section 6918 (or
successor provision), and, in accordance with Section 4.3 below.
(b) "Agreement" shall mean this Affordable Housing Agreement Imposing
Restrictions on Real Property.
(c) "City" shall mean the City of Carlsbad, a California municipal corporation
and charter city.
(d) "Density Bonus Law" shall mean the City's Density Bonus Ordinance,
set forth in CMC Chapter 21.86, as it may be amended from time to time,
and California Government Code Sections 65915 -65918.
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(e) "Developer" shall mean RREG Investments Series, LLC Series I042.a
Delaware limited liability company, and its successors in interest to the
Property.
(f) "Development" shall mean the real property identified in Exhibit A and
all residential units developed pursuant to the conditions identified in
Planning Commission Resolution 7533.
(g) "Eligible Buyer" shall mean the household determined to be qualified,
by the city to purchase the Very-Low Income Unit
(h) "Gross Income" shall mean the total anticipated annual income of all
persons in a household, as calculated in accordance with Title 25 of the
California Code of Regulations, Section 6914, or pursuant to a
successor State housing program that utilizes a reasonably similar
method of calculation of gross income. In the event that no such
successor program exists, City shall provide Developer with a
reasonably similar method of calculation of gross income as provided in
said Section 6914.
(i) "HCD" shall mean the California Department of Housing and Community
Development.
0) "lnclusionary Housing Ordinance" shall mean the City's inclusionary
housing ordinance, set forth in CMC Chapter 21.85, as it may be
amended from time to time.
(k) "Median Income" or "Area Median Income" shall mean the area
median income adjusted for actual household size, in the County of San
Diego, California, as determined from time to time by the U.S.
Department of Housing and Urban Development and published by HCD.
In the event that such income determinations are no longer published or
are not updated for a period of at least eighteen (18) months, City shall
provide Developer with other income determinations which are
reasonably similar with respect to methods of calculation to those
previously published by HCD.
(I) "Project" shall mean the twenty-one (21) units to be constructed on the
Property for the Development, as well as all other improvements,
landscaping, roads and parking spaces associated with the twenty-one
(21) units, as the same may from time to time exist.
(m) "Property" shall mean the real property described in Exhibit A attached
hereto and incorporated herein.
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(n) "Qualified Non-profit Housing Corporation" shall have the same
definition as in Density Bonus Law, California Government Code 65915,
as it may be amended from time to time.
(o) "Term" shall mean the period of time beginning on the date of
recordation of this Agreement in the Official Records, and ending on the
earlier of: (i) fifty-five (55) years after either the final inspection approval
by the City for the Project, or the issuance of the certificate of occupancy
for the Project (or equivalent documentation from the City evidencing
that the Project may be utilized for multifamily housing); or (ii) fifty-seven
(57) years after the date of recordation of this Agreement in the Official
Records.
(p) "Very Low-Income Household" shall mean a household whose annual
Gross Income does not exceed fifty percent (50%) of the Area Median
Income, adjusted for household size.
(q) "Very Low-Income Unit" shall mean the unit limited to occupancy by
Very Low-Income Households and restrict.ed to an affordable housing
cost as set forth Section 4.3 below.
ARTICLE 2. TERM
2.1 Term. The provisions of this Agreement shall apply to the Property for the
entire Term. This Agreement shall bind any successor, heir or assignee of Developer,
whether a change in interest occurs voluntarily or involuntarily, by operation of law or
otherwise, except as expressly released by City in writing and recorded in the Official
Records.
ARTICLE 3. DEVELOPMENT OF VERY LOW-INCOME UNIT
3.1 Size and Bedroom Count. The developer shall build twenty (20) market-rate
units providing a mix of 2, 3 and 4-bedroom condominium (for-sale) units ranging in size
from approximately 1,460 square feet to 2,354 square feet. The Very Low-Income
Affordable Unit (for-sale) in the Development shall include only 1 (one) 2-bedroom unit at
approximately one thousand four hundred and sixty (1,460) square feet. The affordable unit
shall be integrated into the market rate, condominium development and located on the
same property set forth within Exhibit "A"
3.2. Schedule for Developing Affordable Unit. Per the lnclusionary Housing
Ordinance), the Developer shall provide the Affordable Unit concurrent with the Project's
market rate units. Per Density Bonus Ordinance, CMC Chapter 21.86, Section 21.86.100,
the city may not issue building permits for more than fifty percent (50%) of the market rate
units until it has issued building permits for the affordable unit, and the city may not approve
any final inspections or certificates of occupancy for more than fifty (50%) of the market
rate units until it has issued final inspections or certificates of occupancy for f the lower
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income affordable unit. The Density Bonus Ordinance requirements for schedule of building
permit release and final inspections or Certificate of Occupancy shall serve as the alternate
schedule for concurrent construction to meet the requirements of both the lnclusionary
Housing and Density Bonus Ordinances.
3.3. Interior and Exterior Appearance. Per the CMG Section 21.85, and, CMG
Section 21.86, the internal and external design of the Very Low-Income Unit shall be
reasonably consistent with the design of the total project. Interior finishes and amenities
may differ from those provided in the market rate units, but neither the workmanship nor the
products may be of substandard or inferior quality
ARTICLE 4. GENERAL TERMS OF AFFORDABLE OWNERSHIP UNITS
4.1 Occupancy Requirements. The Very Low-Income Unit shall only be sold to and
occupied by a Very Low-Income Household. If the unit is not purchased by an income eligible
buyer within 180 days of issuance of the certification of occupancy, the unit may be
purchased by a Qualified Non-Profit Housing Corporation, defined in Article 1, and pursuant
to California Government Code Section65915(c)(2)(A)(ii).
4.2 Selection of Eligible Buyer. Developer has two options in the selection of an
Eligible Buyer. Developer must notify City of which option they select sixty (60) days prior to
anticipated issuance of certification of occupancy.
4.2. (a). Developer may utilize the City Affordable Housing list. The City will
qualify the eligible buyer and work with the city's real estate agent and lender on the
sales transaction. Developer shall pay real estate agent fee of eight thousand, two
hundred and fifty ($8,250).
4.2. (b). Developer may market, select, and qualify the buyer. The City will
provide final approval of the eligible buyer. To utilize this option, all of the following
conditions below must be met.
(i) Marketing Plan. The Developer shall submit a marketing plan
establishing the process for seeking, selecting and determining the
eligibility of the proposed buyer. The marketing plan must be
submitted to the Director of Housing & Homeless Services for
review and approval a minimum of thirty (30) days prior to the
availability of applications for initial sale.
(ii) Advertising. The Developer shall advertise the availability of the
affordable unit for a minimum of two consecutive weeks in a local
newspaper or other local media platform. The Developer may
employ additional marketing methods that are in accordance with
professional standards. The City may also advertise the affordable
unit to provide contact information to interested households. The
Developer advertisement must include the following details: unit is
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subject to affordability restrictions, application deadline, contact
information, fair housing statement, and application instructions.
City shall approve advertisement prior to publication. Developer
shall maintain a record of all interested households and
applications. Developer must provide such documentation to the
City upon request.
(iii) Notice. Developer shall provide City with notice of not less than
thirty (30) days prior to advertising the availability of the affordable
unit.
(iv) Conflict of Interest. Developer is prohibited from selling the
affordable unit to a family member, relative, employee, or any pre-
determined household. A 'pre-determined' household is any
household with a pre-existing relationship with the Developer, such
a friend, associate, or any other household that has an existing
relationship with the Developer whose occupancy of the affordable
unit would decrease their availability to the general public as
intended by Density Bonus Law and the City's lnclusionary Housing
Ordinance.
(v) Documents. Developer must provide documentation that the
Eligible Buyer meets all eligibility requirements as specified in the
City of Carlsbad Resale Program Guidelines, approved by the City
Council. Developer must also provide marketing plan, interest list
by which the eligible buyer was selected, advertising materials,
purchase and sales agreement for approval of the City.
4.3 Calculation of Affordable Sales Price. The maximum affordable sales price
for the Very Low-Income Unit shall be calculated in accordance with California Health
and Safety Code Section 50052.5 and Title 25 of the California Code of Regulations,
Section 6920 (or successor provision), and, in accordance with these provisions, shall
result in housing cost that does not exceed 30 percent (30%) of 50 percent (50%) of
Area Median Income, adjusted for assumed household size and shall include the
following: mortgage principal and interest, use and occupancy of the unit and land and
associated facilities, including parking; any separately charged fees or service charges
assessed by Developer and subsequent HOA which are required of all occupants;
property taxes; insurance; an allowance for the cost of an adequate level of service for
utilities paid by the owner, including garbage collection, sewer, water, electricity, gas and
other heating, cooking and refrigeration fuel, but not telephone service; any other
interest, taxes, fees or charges for use of the land or associated facilities and assessed
by a public or private entity other than Developer and paid by owners. For purposes of
Section 4, "appropriate for the unit" shall mean for a household of one person for a
studio unit, two persons for a one-bedroom unit, three persons for a two-bedroom unit,
four persons for a three-bedroom unit and five persons for a four-bedroom unit.
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4.4 Terms for Initial Sale of Affordable Unit. For Very Low-Income
Households whose gross incomes do not exceed the maximum income for very low
income (fifty percent (50%) of the area median income adjusted for family size
appropriate for the unit), the product of 30 percent (30%) times 50 percent (50%) of
the area median income adjusted for family size appropriate for the unit shall be the
affordability for the for-sale Affordable Unit. For purposes of this section, "adjusted for
family size appropriate to the unit" shall mean for a household of one (1) person for a
studio unit, two (2) persons for a one-bedroom unit, three (3) persons for a two-
bedroom unit, four (4) persons for a three-bedroom unit and five (5) persons for a
four-bedroom unit. The Schedule of Maximum Eligible Buyer Incomes and Affordable
Subsidized Purchase Prices (the "schedule") attached hereto and incorporated herein
as Exhibit "B" sets forth the city's requirements for determining the maximum
household income of buyers of the Affordable Unit ("Eligible Buyers") and the
methodology for calculation of the subsidized purchase prices of the Affordable Unit
which will be affordable to each of the Eligible Buyers (the "Affordable Purchase
Prices"). The Schedule also includes initial estimates of Eligible Buyer actual incomes
and the corresponding Affordable Purchase Price. The Final Schedule shall be
established prior to sale of the Affordable Units based on the San Diego County Area
Median Income established by the U.S Department of Housing and Urban
Development and published by the State Department of Housing and Community
Development, and the cost factors applicable at the time. The Final Schedule shall be
submitted by the Developer and approved by the city's Housing and Homeless
Services Director prior to the marketing of the Affordable Unit (for-sale unit).
The Developer shall sell the Affordable Unit only to Eligible Buyers whose
household incomes have been verified by the City. The purchase price for an Affordable
Unit (the "Market Purchase Price") shall be the market price charged for a comparable
unit (and not to exceed fair market value); provided, however, that the Developer shall
carry back financing equal to the difference between the Market Purchase Price and the
Affordable Purchase Price for the particular Eligible Buyer (the "Primary Affordability
Subsidy"). The carryback financing shall be assigned by the Developer to the city and
shall be evidenced by a promissory note from the Eligible Buyer to the city, secured by a
second mortgage deed of trust on the Affordable Unit (the "City Second Mortgage"). The
balance of the Market Purchase Price shall be paid by the Eligible Buyer to the Developer
in cash, utilizing down payment monies and first mortgage proceeds.
4.5 Terms for Re-Sale of Affordable Units. After the initial sale of the Very Low-
Income Unit at a price affordable to very-low income households (at fifty (50%) or less of
San Diego Area Median Income), the unit shall remain affordable to subsequent Very-Low
income Eligible Buyers pursuant to a resale restriction for a minimum term of fifteen (15)
years, with the exception that if the City provides a direct financial contribution to the
housing development through participation in cost of infrastructure, write-down of land
costs, or subsidizing the cost of construction, the Affordable Units shall remain affordable
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to a low income households for a minimum of fifty-five (55) years. Beginning in the
sixteenth (16th) year after the initial purchase of an Affordable Unit (or fifty-sixth 56 th year,
if applicable), for-sale units may be sold at a market price to other than a lower income
household provided that the sale shall result in the recapture by the city or its designee of
a financial interest in the units equal to the amount of subsidy necessary to make the unit
affordable to the designated income group and a proportionate share of any appreciation.
For the purposes of this section, the city's proportionate share of appreciation shall be
equal to the ratio of the city's initial subsidy to the fair market value of the home at the time
of initial sale. Funds recaptured by the city shall be used in assisting other eligible
households with home purchases at affordable prices. To the extent possible, projects
using for-sale units to satisfy inclusionary/density bonus requirements shall be designed
to be compatible with conventional mortgage financing programs including secondary
market requirements.
ARTICLE 5. OPERATION OF AFFORDABLE UNIT
5.1 Compliance with this Agreement and Applicable Laws. Developer shall comply
with all the terms and provisions of this Agreement to the extent applicable to the Property
and/or Development, the City's lnclusionary Housing Ordinance and Density Bonus
Ordinance, and all applicable local, state, and federal laws and regulations governing the
ownership, use, and occupancy of the Project (whether existing as of the date of this
Agreement or later enacted). In the case of an inconsistency or conflict between this
Agreement and the City's lnclusionary Housing Ordinance, Density Bonus Ordinance, or
applicable laws or regulations, the City's lnclusionary Housing Ordinance, Density Bonus
Ordinance and applicable local, state and federal laws and regulations take precedence. In
such an instance, violation of any term or provision of this Agreement shall not constitute a
breach of this Agreement.
5.2 Taxes and Assessments. Developer shall pay, or cause to be paid, all real and
personal property taxes, assessments and charges and all franchise, income, employment,
, 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 lien or charge from attaching to the
Property prior to close of Very-Low Income Unit; provided, however, that Developer shall
have the right to contest in good faith, any such taxes, assessments, or charges. In the event
Developer exercises its right to contest any tax, assessment, or charge against it, 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.
5.3 Assessment Limitation. Developer shall include language in the Conditions,
Covenants and Restrictions (CC&Rs) pursuant to California Civil Code Section 5605 that
prohibits the Homeowners' Association from imposing a regular assessment against a Very-
Low Income Unit that is more than five percent (5%) plus the percentage change in the cost
of living, not to exceed ten percent (10%) greater than the preceding regular assessment.
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5.3. (a). For purposes of Section 5.3, "percentage change in the cost of living" means the
percentage change from April 1 of the prior year to April 1 of the current year in the
regional Consumer Price Index for the region where the residential real property is
located, as published by the United States Bureau of Labor Statistics. If a regional index is
not available, the California Consumer Price Index for All Urban Consumers for all items,
as determined by the Department of Industrial Relations, shall apply.
5.3. (b). The Homeowners' Association may impose an assessment against a Very-Low
Income Unit that is lower than the assessment imposed against other owners according to
the proportional ownership of total subdivision interests subject to assessments.
5.4 Nondiscrimination. The Very Low-Income Unit shall be available for occupancy
to members of the general public who qualify as a Very Low-Income Household. Developer
shall not give preference to any particular class or group of persons in selling the Very Low-
Income Unit, except to the extent that the Very Low-Income Unit is required to be sold to
Very Low-Income Households. There shall be no unlawful discrimination against of any
person or group of persons, on account of race, color, creed, religion, sex, sexual orientation,
marital status, national origin, ancestry, or any other classification protected by law, in the
selling, nor shall Developer or Developer's agents, establish or permit any such practice or
practices of discrimination with reference to the selection of tenants of the Very Low-Income
Unit or in connection with the employment of persons for the operation and management of
the Project. All deeds, leases or contracts made or entered into by Developer as to the sale
of the Very Low-Income Unit or portion thereof, shall contain covenants concerning
discrimination as prescribed by this Agreement.
ARTICLE 6. MISCELLANEOUS
6.1 Covenants to Run With the Land. City and Developer hereby declare their
express intent that the covenants and restrictions set forth in this Agreement shall run 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, this Agreement and said covenants and restrictions
shall expire. On the expiration of the Term of this Agreement, Developer may deliver a written
notice to City requesting a termination agreement or such other commercially reasonable
instrument requested by Developer or a title insurance company to terminate and remove
this Agreement from the real property records. Each and every contract, deed or other
instrument hereafter executed covering or conveying the Property or any portion thereof shall
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 City expressly releases such conveyed
portion of the Property from the requirements of this Agreement.
6.2 Enforcement by City. If Developer fails to perform any obligation under this
Agreement, and fails to cure the default within thirty (30) days after City has notified
Developer in writing of the default or, if the default cannot be cured within thirty (30) days,
fails to commence to cure within thirty (30) days and thereafter diligently pursue such cure to
completion within ninety (90) days, or such mutually agreeable period as is necessary so
long as Developer continuous and diligently pursues such cure, 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) Action to Compel Performance or for Damages. City may bring an action at law
or in equity to compel Developer's performance of its obligations under this Agreement,
and/or for damages. Developer acknowledges that any breach in Developer's performance
of Developer's obligations under this Agreement shall cause irreparable harm to the City and
materially impair the public policy objectives set forth in the Carlsbad Municipal Code.
Therefore, Developer agrees that the City is entitled to equitable relief in the form of specific
performance, and that an award of damages may not be adequate to compensate the City
for Developer's failure to perform according to the terms of this Agreement. Notwithstanding
the foregoing, the City, in its sole and absolute discretion, may elect the appropriate remedy
for Developer's default under this Agreement.
(b) Remedies Provided Under Ordinance. City may exercise any other remedy
available under the lnclusionary Housing Ordinance or the Density Bonus Law in effect as of
the date of this Agreement.
6.3 Attorneys' Fees and Costs. In the event any action or proceeding in court or
other dispute resolution mechanism permitted under this Agreement is commenced by either
party to interpret or enforce the terms of this Agreement, the prevailing party therein shall be
entitled to recover from the non-prevailing party all of the prevailing party's reasonable costs
and expenses in connection therewith, including on any appeal and including expert witness
fees, document copying expenses, exhibit preparation costs, carrier expenses and postage
and communication expenses, and reasonable attorneys' fees and costs for the services
rendered to the prevailing party in such action or proceeding (which shall include the
reasonable costs for services of the prevailing party's in-house counsel and any third-party
counsel retained by the prevailing party).
6.4 Recording and Filing. City and Developer shall cause this Agreement, and all
amendments and supplements to it, to be recorded against the Property in the Official
Records.
6.5 Governing Law: Venue. This Agreement shall be governed by the laws of the
State of California. Venue for any dispute arising out of this Agreement shall be San Diego
County.
6.6 Amendments. This Agreement may be amended only by a written instrument
executed by all the parties hereto or their successor in title, duly recorded in the Official
Records.
6.7 Notice. All notices given or certificates delivered under this Agreement shall be
deemed received on the delivery or refusal date shown on the delivery receipt, if: (i)
personally delivered by a commercial service which furnishes signed receipts of delivery; or
(ii) mailed by certified mail, return receipt requested, postage prepaid, addressed to the party
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to receive such notice at the addresses set forth below. Any of the parties may, by notice
given hereunder, designate any further or different addresses to which subsequent notices,
certificates or communications shall be sent.
To City:
City of Carlsbad
Attn: Housing & Homeless Services Director
1200 Carlsbad Village Drive
Carlsbad, CA 92008-1949
To Developer:
Toll Brothers
Attn: Thuan Vo, Project Manager
350 Commerce, Suite 200
Irvine, CA 92602
6.8 Entire Agreement. The Recitals set forth above, and all exhibits attached
hereto, are hereby incorporated into this Agreement by this reference. This Agreement
contains the entire agreement between the parties as to the subject matter hereof and
supersedes any and all prior arrangements and understandings between the parties, and no
other agreement, statement or promise made by either party hereto which is not contained
herein shall be binding or valid provided, however, that nothing in this Section limits the effect
or enforceability of the Carlsbad Municipal Code. This Agreement shall not be construed as
if it had been prepared by one of the parties, but rather as if both parties had prepared it. The
parties have read and reviewed this Agreement and agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party (including but not limited
to Civil Code Section 1654 as may be amended from time to time) shall not apply to the
interpretation of this Agreement.
6.9 Waiver. The waiver of or failure to enforce any provision of this Agreement shall
not operate as a waiver of any future breach of any such provision or any other provisions
hereof.
6.10 Relationship of Parties. Nothing contained in this Agreement shall be deemed
or construed by the parties or any third party to create the relationship of principal and agent,
partnership, joint venture, or of association. The relationship of the parties is that of an owner
and developer of real property and an administrator of a California municipal inclusionary
housing program; furthermore, the parties agree and acknowledge that this Agreement is in
furtherance of the inherent power of City to regulate the use of land within City's jurisdiction.
Developer further acknowledges, understands and agrees that the City does not undertake
or assume any responsibility for or duty to Developer to select, review, inspect, supervise,
pass judgment on, or inform Developer of the quality, adequacy or suitability of the Very Low-
Income Unit (or any other portion of the Property). The City owes no duty of care to protect
Developer against negligent, faulty, inadequate or defective building or construction or any
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condition of the Property and Developer agrees that neither Developer, or Developer's heirs,
successors or assigns shall ever claim, have or assert any right or action against the City for
any loss, damage or other matter arising out of or resulting from any condition of the Property
and will indemnify, defend, and hold the City harmless from any liability, loss or damage as
set forth below. Any review by the City of any documents submitted by the Developer to the
City pursuant to this Agreement, including, but not limited to the form of any tenant lease, is
solely to confirm compliance with the requirements of this Agreement and shall not be
deemed to be a representation of any kind of the validity, business advantage, or legal
enforceability of such documents.
6.11 Hold Harmless; Indemnity. Developer shall indemnify, defend (with counsel
reasonably selected by the City), and hold harmless the City and its councilmembers,
officers, officials, agents, and employees against any and all liability, claims, actions, causes
of action or demands whatsoever against any of them, for the following: (i) any injury or death
of any person or damage to property or other liability of any nature arising out of Developer's
ownership or operation of the Property, Development, or Project; (ii) any claims arising out
of Developer's performance or non-performance of its obligations hereunder; or (iii) otherwise
related to Developer's ownership or operation of the Property or Project, except where the
cause of such is the gross negligence or willful misconduct of the City. The indemnification
obligations set forth in this Section shall survive any termination or expiration of this
Agreement.
6.12 Time is of the Essence. In all matters under this Agreement, the parties agree
that time is of the essence. References in this Agreement to days shall be to calendar days.
If the last day of any period to give or reply to a notice, meet a deadline or undertake any
other action occurs on a day that is not a day of the week on which the City of Carlsbad is
open to the public for carrying on substantially all business functions (a "Business Day"),
then the last day for giving or replying to such notice, meeting such deadline or undertaking
any such other action shall be the next succeeding Business Day. In no event shall a
Saturday or Sunday be considered a Business Day.
6.13 Interpretation. The use in this Agreement of the words "including", "such as" or
words of similar import when used with reference to any general term, statement or matter
shall not be construed to limit such statement, term or matter to the specific statements, terms
or matters, unless language of limitation, such as "and limited to" or words of similar import
are used with reference thereto. The headings of this Agreement are for convenience only
and do not in any way limit or amplify the terms or provisions hereof. All pronouns and
variations thereof shall be deemed to refer to the masculine, feminine, or neuter, and to the
singular or plural, as the identity of the party or parties may require.
6.14 No Limitation on Municipal Powers. Nothing in this Agreement shall limit, waive,
or otherwise impair the authority and discretion of the City, including but not limited to its
elected officials, officers, directors, employees, agents, board members, commissioners,
interns, volunteers, departments and offices with their actions, decisions, votes, reviews and
approvals regarding the Property or Developer.
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6.15 Severability. If any 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.
6.16 Counterparts. This Agreement may be executed in multiple originals, each of
which is deemed to be an original, and may be executed in counterparts, which shall
constitute one and the same agreement.
6.17 Project Financing. No later than thirty (30) days after Developer's written
request for an estoppel certificate, the City shall provide an estoppel certificate to the
Developer in favor of any person identified by Developer, that (except as set forth on a
schedule to the estoppel certificate) there are (a) no defaults by Developer under this
Agreement, (b) the City has neither made nor investigated nor is the City about to make, any
claim, pursue any judgment, cause of action, and Developer has no unfulfilled monetary
obligations in favor of the City, any of which such matters have arisen out of or related to this
Agreement, except as set forth in the copy of the attached instrument, (d) the attached copy
of the Agreement is a true and correct and complete copy of the Agreement, and (e) any
other matter that Developer or any lender, prospective lender, purchaser or prospective
purchaser may reasonably request.
6.18 Release of Subject Property from Agreement. The covenants and conditions
herein contained shall apply to and bind the Developer and its heirs, executors,
administrators, successors, transferees, and assignees of all the parties having or acquiring
any right, title or interest in or to any part of Subject Property and shall run with and burden
the Subject Property until terminated in accordance with the provisions hereof. Prior to the
issuance of building permits, the Developer shall expressly make the conditions and
covenants contained in this Agreement a part of any deed or other instrument conveying any
interest in the Subject Property. Notwithstanding anything to the contrary set forth in the
Agreement, individual purchasers of market rate units pursuant to an approved public report
in compliance with the California Subdivided Lands Act, and mortgage lenders holding deeds
of trust on such individual units after sale to such purchasers, shall not be subject to the
terms of this Agreement; and the terms of this Agreement shall be of no further force or effect
with respect to such completed unit on the date of the recordation of a deed to the individual
purchaser. Upon issuance of certificates of occupancy for the one (1) Affordable Unit, the
entire Subject Property, with the exception of the property subject to the approved Site
Development Plan or Village Review Permit, shall be released from the burdens of this
Agreement. The burdens of this Agreement shall remain in full force and effect and recorded
against the property subject to the approved Site Development Plan or Village Review Permit
in accordance with the terms of this agreement. The burdens of this Agreement shall remain
in full force and effect and recorded against the affordable unit for fifty-five (55) years if the
unit is sold.
[Remainder of page left intentionally blank]
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IN WITNESS WHEREOF, City and Developer have executed this Agreement by
duly authorized representatives, all on the date first written above.
CITY:
CITY OF CARLSBAD,
a California municipal corporation and charter city
By: -~ iQ0-~
sfuilf:\§obian, Assistant City Manager
Dated 3/SIJ, 0 ,2 &_
APPROVED AS TO FORM:
By:
C. Dalton Sorich, Assistant City Attorney
Dated: _7_._I -C.<1(:,__"2-_fJ_U ___ _
ATTEST:
~~,fu
Dated: .3 l l, l').O)-lp
Signatures continue on following page
Signatures must be notarized
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ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of San Diego
On March 5, 2026 before me, Shelby Nelson, Notary Public
(insert name and title of the officer)
personally appeared _S_h_e_i_la_C_o_b_i_a_n ____________________ _
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal. 1·······••==-~ , SHELSY MEI.SOM -a Not.ry ~ublk • C.tllfornia : i S•n Ot"!)o C•unty s:
Comminton • 2s2,06~ -
My Cemm. Exotrt<Auf 31, 2029
(Seal)
DEVELOPER:
TOLL WEST COAST, LLC,
a Delaware Limited Liability Company
By: Gregory M. Deacon, Vice President
Dated: ,:::t":-b J 1, "2o Z,.b
16
State of CJ~.\cf-orn, • a.
County of Qr GLnS)Q
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document, to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
On __,~~-=cc....=-=--=-~ ~_..i.;~..L.J,...£_--1-~,,...._.=--l.-"'=!.:~---i.---' a Notary Public,
personally appeared ---'~~.d..<l-~.l.q,---1..-::,,-'-~=~4--\.---who proved to me on the basis of
satisfactory evidence to be the pers (s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of Qi,ltfor(IJ -(J that the
foregoing paragraph is true and correct.
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EXHIBIT A
LEGAL PROPERTY DESCRIPTION
Lot 2 in Block "Q" of Palisades No. 2, in the City of Carlsbad, County of San Diego,
State of California, according to Map thereof NO. 1803, filed in the Office of the County
Recorder of San Diego County, August 25, 1924.
APN: 204-240-22-00
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