HomeMy WebLinkAbout; Mirka La Costa, LP; 2026-0111926; Affordable Housing-Regulatory Agreement & Dec. of Restrictive Covenants4/22/26, 10:39 AM Batch 21011861 Confirmation
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL
TO:
City of Carlsbad
Attn. City Clerk
1200 Carlsbad Village Dr.
Carlsbad, CA 92008
No fee for recording
pursuant to
Government Code
Section 27383
DOC# 2026-0111926
111111111111 lllll 111111111111111111111111111111 IIIII IIIII IIIII IIII IIII
Apr 22, 2026 09:57 AM
OFFICIAL RECORDS JORDAN Z. MARKS,
SAN DIEGO COUNTY RECORDER
FEES: $77.00 (SB2 Atkins: $0.00) PCOR: N/A PAGES: 22
(Space above for Recorder's Use)
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(lnclusionary Housing)
This Regulatory Agreement and Declaration of Restrictive Covenants ("Agreement")
is made and entered into as of this day of lrfCl l is-·~2026, by and between the City of
Carlsbad, a chartered municipal corporation ("City"), and Mirka La Costa, LP, a California
limited partnership ("Developer").
RECITALS
1. The City has adopted an lnclusionary Housing Ordinance as Carlsbad Municipal
Code (CMC) 21.85 requiring a percentage of new housing development to be developed as
affordable housing for low-income households.
2. The Project, as defined below, is a portion of a larger housing development
("Master Project") which was approved by Planning Commission Resolution No. 7391 on Dec. •
2, 2020 ("Conditions of Approval"). The Conditions of Approval require the Master Project to
provide 19 units (20% of the total units) restricted as affordable to low-income households
in order to satisfy the requirements of the lnclusionary Housing Ordinance. The Conditions
of Approval further required the Master Project applicant, namely Woodside 05S, LP, a
California limited partnership ("Applicant"), to enter into an Affordable Housing Agreement
as specified in the City's lnclusionary Housing Ordinance (CMC Chapter 21.85). That
Affordable Housing Agreement was entered into by the City and Applicant, and recorded
against the entire Master Project property on Mar. 28, 2023, as Document Number 2023-
0078709.
3. Applicant chose to create a separate parcel for the 19 rental Low-Income Units
required by the Conditions of Approval, which parcel is the Property, as defined below.
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Applicant conveyed the Property to Developer and the Developer assumed the obligation to
provide the 19 rental Low-Income Units required by the Conditions of Approval.
4. Developer is the owner of the Property, as defined below, and as described on
Exhibit "A", which is attached hereto and incorporated herein by this reference. All nineteen
{19) Low-Income Units, will be restricted to occupancy by, and affordable to, Low Income
Households, as defined below, and as required by Carlsbad Municipal Code 21.85.
5. In accordance with the requirements of the Conditions of Approval, Affordable
Housing Agreement and Carlsbad Municipal Code 21.85, Developer is obligated to enter into
this Agreement, for the benefit of the City, and to observe all the terms and conditions set
forth below.
6. In order to ensure that the entire Project will be used and operated in
accordance with these 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) "Agreement" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(b) "City" shall mean the City of Carlsbad, a chartered municipal corporation.
(c) "Developer" shall mean Mirka La Costa, LP, a California limited
partnership, and its successors in interest to the Property.
(d) "Gross Income" shall mean the total anticipated annual income of all
persons in a household, as calculated in accordance with 25 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.
(e) "HCD" shall mean the California Department of Housing and Community
Development.
(f) "Median Income" or "Area Median Income" shall mean the area median
income adjusted for actual household size, in the County of San Diego,
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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 another income determination which is reasonably
similar with respect to the method of calculation to that previously
published by HCD.
(g) "Low-Income Household" shall mean a household whose annual Gross
Income does not exceed eighty percent {80%) of the Area Median
Income, adjusted for household size.
(h) "Low-Income Units" shall mean the nineteen (19) dwelling units,
identified in Exhibit B, which are limited to occupancy by Low-Income
Households and Rent restricted as set forth in this Agreement.
(i) "lnclusionary Housing Ordinance" shall mean the City's inclusionary
housing ordinance, set forth in Chapter 21.85 of the City's municipal code.
(j) "Official Records" means instruments recorded in the Office of the
Recorder of the County of San Diego, State of California.
(k) "Project" shall mean the Property, and the nineteen (19) Low-Income
Units on the Property, as well as all other improvements, landscaping,
roads and parking spaces existing thereon, as the same may from time to
time exist.
(I) "Property" shall mean the real property described in Exhibit A attached
hereto and incorporated herein.
(m) "Rent" means the total monthly expenses required to obtain a unit and
shall include the following: all costs incurred with respect to the use and
occupancy of the Low-Income Unit and land and associated facilities,
fncluding parking; any separately charged fees or service charges
assessed by 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 and cooking fuel, but not
telephone service; any other interest, taxes, fees or charges for use of the
Low-Income Unit, land or associated facilities and assessed by a public or
private entity other than Developer.
(n) "Term" shall mean the period of time beginning on the date of
recordation of this Agreement in the Official Records, and ending on the
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2.1
earlier of: (i) fifty-five (55) years after 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.
ARTICLE 2. AFFORDABILITY COVENANTS
Occupancy Requirements.
(a) Each of the Low-Income Units shall only be rented to, and occupied by, or, if
vacant, shall only be available for rental and occupancy by, Low-Income
Households.
(b) No Owners of Real Property. No Low-Income Unit shall be occupied by any
person who owns real property.
(c) Liquid Asset Limitation. No Low-Income Unit shall be occupied by any person
holding, directly or indirectly, liquid assets whose aggregate value, at the time
of determination of eligibility, exceeds 80% percent {80%) of the annual Area
Median Income, for that household size. Liquid assets refers to cash and
assets which are readily convertible to cash within a reasonable period,
including but not limited to savings and checking accounts, certificates of
deposit of any term, marketable securities, money market and similar
accounts, mutual funds shares, and insurance policy cash values (if a cash out
provision applies). Liquid assets shall not include retirement funds which are
not readily accessible or which cannot be assessed with incurring a penalty.
(d) At initial occupancy of each Low-Income Unit, the following minimum and
maximum occupancies shall be met, unless a reasonable accommodation has
been approved by the Developer, or its agent.
Number of Minimum Maximum
Bedrooms Occupancy at Occupancy at
move-in move-in
One 1 3
Two 2 5
Three 3 7
2.2 Allowable Rent.
(a) The maximum monthly Rent for each of the nineteen (19) Low-Income
Units shall not exceed one-twelfth of thirty-percent {30%) of seventy percent (70%) of Area
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Median Income, adjusted for household size as defined below in Section 2.2(b). The
maximum Rent includes a utility allowance based on the City's published and standard utility
allowance schedule, unless a California Utility Allowance Calculator (CUAC} is approved for
this Project by the California Tax Credit Allocation Committee (CTCAC}.
(b) In calculating the allowable Rent for all Low-Income Units, the
following assumed household sizes shall be utilized:
Number of Bedrooms Assumed Household Size
One 2
Two 3
Three 4
2.3 Lease Provisions. To the extent permitted under applicable law,
Developer shall include in leases for all Low-Income Units provisions which authorize
Developer to immediately terminate the tenancy of any household one or more of whose
members misrepresented any fact material to the household's qualification as a Low-Income
Household. To the extent permitted under applicable law, each lease or rental agreement shall
also provide that the household is subject to annual certification in accordance with Section
3.1 below, and that, if the household's Gross Income increases above the applicable limits for
a Low-Income Household, such household's rent may be subject to increase.
2.4 Section 8 Voucher Holders. Developer will accept as tenants of the
Low-Income Units, on the same basis as all other prospective tenants, persons who are
recipients of federal vouchers for rent subsidies pursuant to the existing housing subsidy
program under Section 8 of the United States Housing Act, or its successor. Developer shall
not apply selection criteria for available Low-Income Units to Section 8 voucher holders that
is more burdensome than criteria applied to all other prospective tenants, nor shall
Developer apply or permit the application of management policies or lease provisions with
respect to the Project which have the intended effect of precluding occupancy of Low-
Income Units by such prospective tenants. In the case of tenants that are Section 8 voucher
holders, Developer shall not accept any subsidy or payment that would cause the Rent
received for any Low-Income Unit to exceed the maximum Rent otherwise allowed under
this Agreement.
2.5 Condominium Conversion. Developer shall not convert the Project or
the Low-Income Units to condominium or cooperative ownership, or sell condominium or
cooperative conversion rights to the Property, during the Term, without first having
obtained all necessary entitlements and approvals from the City and any other applicable
government authority and complying with all then-applicable laws (for example, any
Subdivision Map Act requirements, notices, and any other condo conversion laws and
requirements) and entering into a replacement agreement with the City to ensure the
continued affordability of the Low-Income Units.
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2.6 Right of First Refusal.
(a) Granting of the Right. Developer grants to the City a first right of
refusal ("First Right of Refusal") to purchase the Property on the same terms and conditions
as set forth in any offer to purchase the Property in state defined noticing periods leading
up to the expiration of the Term, which Developer has elected to accept. In such event,
Developer shall deliver written notice ("Notice") of the same to the Housing and Homeless
Services Director of the City (or if such position does not exist, then to the City Manager).
The City shall have the right commencing on the date of delivery of the Notice and for ninety
(90) days thereafter to elect, in City's sole discretion, to purchase the Property on the same
terms and conditions as set forth in the offer to purchase which is identified in the Notice.
(b) Consideration for the Right. The execution of this Agreement and
issuance of the Entitlements is the consideration for the First Right of Refusal. Developer
hereby acknowledges that the City would not enter into this Agreement without the
Developer granting the First Right of Refusal to the City.
(c) Escrow. Within ten (10) days following City's Exercise of the First Right
of Refusal, Developer and the City shall open an escrow at a reputable escrow company in
San Diego County, California. The parties shall sign the escrow instructions prepared by the
escrow holder within ten (10) days of receipt thereof, so long as the instructions (i) state
that it is the sole purpose of the escrow holder to comply with and carry out the terms and
conditions of the First Right of Refusal, and (ii) contain such other general provisions as are
then customarily found in such escrow holder's escrow instructions. Either party failing to
sign the escrow holder's escrow instructions as provided above shall be deemed to be in
breach of this Agreement. The escrow shall provide for a closing on or before ninety (90)
days after it is opened. The escrow holder's escrow instructions signed by the parties shall
state the date escrow was opened. The Property shall be transferred "As-ls", "Where-ls"
without representation or warranty.
(d) One-Time Right. The right provided to the City under Section 2.6(a) is
a one-time right at the end of the minimum affordability period. If the City fails to indicate
its intent to exercise the right in connection with the first notice pursuant to Section 2.6(a)
then the City shall no longer have any rights under this Section 2.6.
ARTICLE 3. INCOME CERTIFICATION AND REPORTING
3.1 Initial Income Certification. Developer shall obtain, complete, and
maintain on file, immediately prior to initial occupancy of the Low-Income Units, copies of
income and asset certifications for each Low-Income Household. Developer shall make a good
faith effort to verify that the stated income and assets, in a certification provided by an
applicant or a household residing in a Low-Income Unit, is accurate by more than one of the
following steps as a part of the verification process: (i) obtain pay stubs for the two (2) most
recent months; (ii) obtain an income verification form from the Social Security Administration
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and/or the California Department of Social Services if the applicant receives assistance from
either of such agencies; (iii) obtain income tax returns for the two (2) most recent tax years;
(iv) conduct a credit agency or similar search; (v) obtain an income verification form from the
applicant's current employer; (vi) if the applicant is unemployed or and has no such tax return,
obtain another form of independent verification. The two most recent bank or brokerage
statements shall be used to verify assets. Copies of tenant income certifications shall be
available to City upon written request.
3.2 Increased Income of Occupying Households. Developer shall re-certify
that the Low-Income Units are occupied only by eligible tenants in compliance with this
Agreement every twelve months. If, upon recertification or otherwise, the Developer
determines that that the Gross Income of the tenant(s) occupying a Low-Income Unit has
subsequently increased so as to exceed the income to qualify as an eligible tenant (an
"Increased Income Occupant"),, then, subject to and to the extent permitted under applicable
law, the Increased Income Occupant shall be given written notice that the Increased Income
Occupant must vacate the Low-Income Unit on the later of the expiration of the Increased
Income Occupant's lease or upon 90 days written notice to the Increased Income Occupant.
Notwithstanding anything to the contrary set forth herein, when a tenant occupies a unit
subject to a regulatory agreement ("TCAC Regulatory Agreement") by and between the
Developer and the California Tax Credit Allocation Committee ("TCAC") pursuant to Section 42
of the Internal Revenue Code, such tenant shall be evicted as a result of such tenant being over
income only as and when allowed by such TCAC Regulatory Agreement or by Federal law,
including 26 U.S.C. §42.
3.3 Annual Report to City. Developer shall submit, no later than February 1
of each year, an annual report to City for the immediately preceding year, in a form approved
by City. The annual report shall include for each Low-Income Unit covered by this Agreement,
the Rent and the reported income and household size of the household occupying the Low-
Income Unit. The report shall also state the date the tenancy commenced for each Low-
Income Unit and such other information as City may reasonably require but solely for the
purpose of verifying Developer's compliance with this Agreement.
3.4 Annual Monitoring Fee. Commencing upon the issuance of certification
of occupancy, and annually thereafter, the Developer shall pay to City an annual monitoring
fee for the Low-Income Units, as determined by City in schedules adopted by City from time
to time. Said fee shall be subject to revision annually. After the first year, the fee shall be due
and payable no later than February 15 of each calendar year when the Annual Report is due.
3.5 Records. Developer shall maintain complete, accurate and current
records pertaining to the Low-Income Units, pursuant to this Agreement, and, upon five (5)
days prior written request by City, shall permit any duly authorized representative of City to
inspect records, including records pertaining to income and household size of tenant
households occupying such Low-Income Units.
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ARTICLE 4. OPERATION OF THE PROJECT
4.1 Residential Use. The Project shall be operated only for residential use.
No part of the Project shall be operated as transient housing such as short-term vacation rental
with tenancy less than 30 days.
4.2 Compliance with Regulatory Agreement and Applicable Laws.
Developer shall comply with all the terms and provisions of this Agreement to the extent
applicable to the Property, the City's lnclusionary Housing 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, or applicable laws or regulations, the City's lnclusionary Housing Ordinance and
the applicable local, state and federal laws and regulations shall apply. In such an instance, any
violation of any term or provision of this Agreement which is required by the City's lnclusionary
Housing Ordinance, or applicable laws or regulations shall not constitute a breach of this
Agreement.
4.3 Taxes and Assessments. Developer shall pay, or cause to be paid, all
real and personal property taxes, assessments and charges and other taxes assessed against
or payable by Developer or the Property, in such manner as to prevent any penalty from
accruing, or any lien 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 event Developer exercises its right to contest any tax, assessment, or charge
against Developer or the Property, Developer, on final determination of the proceeding or
contest, shall immediately pay or discharge any such decision or judgment, together with
all costs, charges and interest. Nothing herein shall be interpreted as prohibiting Developer
from appealing its valuation for the determination of property taxes or applying for the
welfare tax exemption or other property tax relief resulting from the reduced value of the
Low-Income Units.
4.4 Nondiscrimination. All of the Low-Income Units shall be available for
occupancy on a continuous basis to members of the general public who qualify as Low-
Income Households. Developer shall not give preference to any particular class or group of
persons in renting the Low-Income Units, except to the extent that the Low-Income Units
are required to be leased to Low-Income Households. There shall be no unlawful
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, ancestry, or any
other classification protected by law, in the leasing, use, occupancy, tenure, or enjoyment
of any Low-Income Unit nor shall Developer or Developer's agents, establish or permit any
such practice or practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy of tenants or lessees of any 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 leasing,
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occupancy, or tenancy of the Low-Income Units or portion thereof, shall contain covenants
concerning discrimination as prescribed by this Agreement.
ARTICLE 5. PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities. Developer acknowledges and agrees
Developer, and not City, is responsible for all management functions with respect to the
Project, 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.
City shall have no responsibility over the management or operation of the Project. A resident
manager shall also be required, selection of whom shall be at the discretion of Developer.
5.2 Management Agent. The Project shall at all times be managed by (i) an
experienced management agent ("Management Agent") acceptable to and approved in
writing by City or (ii) self-managed by Developer or by an affiliate of Developer (in, each case,
"Self-Management"), provided that the City approves of such Self-Management. The
Management Agent or Self-Management shall have a demonstrated ability to operate
residential facilities like the Project in a manner that will provide decent, safe, and sanitary
housing. City's approval of a Managing Agent or Self-Management will not be unreasonably
withheld, conditioned or delayed. Prior to the issuance of a Certificate of Occupancy for any
building within the Project, Developer shall submit, for City's approval, the identity of any
proposed Management Agent or Self-Management. Developer shall also submit such
additional information about the background, experience and financial condition of the
proposed Management Agent or Self-Management as is reasonably necessary for City to
determine whether the proposed Management Agent or Self-Management meets the
standard for a qualified Management Agent or Self-Management as set forth above. If the
proposed Management Agent or Self-Management meets the standard set forth above, the
City shall approve the proposed Management Agent or Self-Management by notifying
Developer in writing within thirty (30) days of Developer's submission of a proposed
Management Agent or Self-Management.
If City determines that the proposed Management Agent or Self-Management does not meet
the standard set forth above, the City shall notify Developer in writing within thirty (30) days
of Developer's submission of a proposed Management Agent or Self-Management. The City's
notification shall state with reasonable specificity the reasons for the disapproval. Developer
shall have fifteen (15) days to respond in writing to the City's notification of disapproval by
providing documentation to address in good faith the concerns raised by the City. City shall
have fifteen (15) days to respond in writing to the Developer and either approve or provide
final disapproval of the proposed Management Agent or Self-Management.
If the City fails to notify the Developer of the City's approval or disapproval of the proposed
Management Agent or Self-Management within the time limits provided in this Section 5.2,
the proposed Management Agent or Self-Management shall be deemed approved. If City
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disapproves a proposed Management Agent or Self-Management, Developer shall not be in
default under this Section 5.2, so long as Developer actively seeks and submits a new
Management Agent or Self-Management for City's consideration within thirty (30) days of
the City's final disapproval. For the purposes of this Section 5.2, Hyder Property Management
is approved by City as the initial Management Agent for the Project.
5.3 Performance Review. City reserves the right to conduct an annual, or
more frequent review of the management practices of the Low-Income Units if deemed
necessary by City. The purpose of each periodic review will be to enable City to determine if
the Low-Income Units are being operated and managed in accordance with the requirements
and standards of this Agreement. Developer shall cooperate with City in such reviews.
5.4 Replacement of Management Agent. If, as a result of a periodic review,
City determines in its reasonable judgment that the Low-Income Units are not being operated
and managed in accordance with any of the material requirements and standards of this
Agreement, City shall deliver written notice to Developer of any such failure to comply with
this Agreement and provide Developer an opportunity to cure such failure within thirty (30}
days of the notice, provided, however, that if the nature of such failure is such that more than
thirty (30} days are reasonably required for its cure, then Developer shall be provided an
additional ninety (90) days thereafter to diligently pursue such cure to completion. If
Developer is unable to timely cure any such failure identified by the City in writing, then the
City shall deliver a second written notice to Developer. No later than thirty (30} days after
receipt by Developer of such written notice, City staff and Developer shall meet in good faith
to consider methods for improving the operating status of the Low-Income Units, including,
without limitation, the possible replacement of the Management Agent in the in the event
such Management Agent is unable to comply with the requirements of this Agreement.
If, after such meeting, City staff reasonably determines that the Management Agent is
not adequately performing and City requires, in writing, the replacement of the Management
Agent, Developer shall dismiss the Management Agent within thirty-five (35} days of City's
written demand to replace the Management Agent, and shall appoint a replacement
Management Agent, or seek Self-Management, in accordance with the terms set forth in
Section 5.2 above.
Any contract with a Management Agent for the operation or management of the Low-
Income Units 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 City may enforce this
provision through legal proceedings as specified in Section 6.3.
5.5 City Approval of Management Policies. Upon written request by City,
Developer shall submit its written management policies in connection with the rental of Low-
Income Units to City for its review and shall amend such policies in any way necessary to
ensure that such policies comply with the provisions of this Agreement. This includes a
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marketing plan establishing the process for seeking, selecting and determining the eligibility
of tenants of the Low-Income Units.
5.6 Property Maintenance. Developer agrees, for the entire Term, to
maintain the Property and all interior and exterior improvements, including common area
landscaping, 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, order 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.
City places prime importance on quality maintenance to ensure that all affordable
housing projects within the City are not allowed to deteriorate due to failure to properly
maintain, normal wear and tear of the Project excepted. Developer shall assure the Project is
maintained in good condition. Developer shall make all repairs and replacements necessary
to keep the improvements in good condition and repair.
In the event that Developer breaches any of the covenants contained in this section and such
default continues for a period of five (5) business days after written notice from City with
respect to graffiti, debris, waste material, or any other matter posing a threat to the health
and safety of the tenants, or thirty (30) days after written notice from City with respect to
general maintenance, landscaping and building improvements (and subject to any stricter
requirements included in any applicable City Ordinance), then City, in addition to whatever
other remedy it may have at law or in equity, shall have the right to enter upon the Property
(or any portion thereof), following at least seventy-two (72) hours' prior written notice to
Developer, and perform or cause to be performed all such acts and work necessary to cure
the default. Provided however, that if the nature of such failure is such that more than thirty
(30) days are reasonably required to cure the breach, then Developer shall be provided an
additional ninety (90) days thereafter to diligently pursue such cure to completion. By
execution of this Agreement, Developer hereby irrevocably grants the City, and the City's
employees and agents, a right of entry for such purpose. Pursuant to such right of entry, City
shall be permitted (but is not required) to enter upon the Property and perform all acts and
work necessary to protect, maintain, and preserve the improvements and landscaped areas
on the Property, and to demand reimbursement from Developer, in the amount of the
reasonable expenditures arising from such acts and work of protection, maintenance, and
preservation by City and/or costs of such cure, including an administrative charge equal to ten
percent (10%) of such expenditures, which amount shall be promptly paid by Developer to
City upon written demand.
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
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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 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 Ordinance in effect as of the date of this Agreement. The City
may institute any appropriate legal actions or proceedings necessary to ensure compliance
with this Agreement, including, but not limited to, actions to revoke, deny or suspend any
permit or development approval. Any person who sells or rents a Low-Income Unit in violation
of this Agreement shall be required to forfeit all monetary amounts so obtained. Such
amounts shall become part of the City's housing trust fund.
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
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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 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.
6.8
To City:
City of Carlsbad
Housing & Homeless Services Department
1200 Carlsbad Village Drive
Carlsbad, CA 92008-1949
Attn: Housing & Homeless Services Director
To Developer:
Mirka La Costa AGP 1, LLC
c/o Mirka Investments
600 B St., Ste. 300
San Diego, CA 92101
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 City of Carlsbad Municipal Code. This Agreement shall not be construed
13
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 or of partnership or of 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 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 Low-Income Units (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 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 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 document(s). Allegra will revise.
6.11 Hold Harmless; Indemnity. Developer shall indemnify, defend (with
counsel reasonably selected by the City), and hold harmless the City and its council members,
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 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 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
14
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: (a) the City's Building
Department, in connection with the review and approval of any proposed construction
plans for the Property (or any change to such plans), or any use, or proposed use, of the
Property; or (b) any other office or department of the City acting in its capacity as a
governmental regulatory authority with jurisdiction over the development, use, or
operation of the Property.
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 reasonably identified by Developer, stating (a) there are no
defaults by Developer under this Agreement or setting forth the defaults, {b) whether the City
has investigated or whether the City intends to investigate or make, any claim, pursue any
judgment, or cause of action, (c) whether Developer has any unfulfilled monetary obligations
in favor of the City, and (d) any other matter that Developer or any lender, prospective lender,
purchaser or prospective purchaser may reasonably request.
Remainder of page left
intentionally blank
15
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 chartered municipal
corporation
By:
APPROVED AS TO FORM:
City of Carlsbad, Office of the City Attorney
By:
C. Dalton Sorich, Senior Assistant City
Attorney
ATTEST:~
By l ~~ Sh=~
Dated: 0 lf lt1 {21)2.Jo
Signatures continue on following page
Signatures must be notarized
16
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 April 15, 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.
Signatur (Seal)
DEVELOPER:
Mirka La Costa, LP,
a California limited partnership
By: Mirka La Costa AGP 1, LLC,
a California limited liability company,
its Administrative General Partner
VJW By:--~_.__ _____ _
Name: Kursat Misirlioglu
Title: President ---"'--'--'~"--"-'-'-"---
By: ______ _
Name:
Title: ---
Proper notarial acknowledgment of execution by Developer must be attached. If a
Corporation, Agreement must be signed by one corporate officer from each of the following
two groups.
Group A.
Chairman,
President, or
Vice President
Group B. Secretary,
Assistant Secretary,
CFO, or
Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the officer(s) signing to bind the corporation.
8084680.2 17
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 Ma Vu l,.,,\ M I '7-0&before me, Kristin Rhodes Notary Public
(insert name and title of the officer)
personally appeared r:uv~f-[Y LS.I✓ I I ~~l V I
who proved to me on the basis of satisfactory evidence to be e 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.
Signature ---1fli-=-=/VV':'---'--_-~_...___~-~-------.,..---
KRISTIN RHODES
COMM. #2533129 z
Notary Public -California ~
San Diego County ~ ,,,,.~rv My Comm. Expire~ Oct. 19, 2029
(Seal)
EXHIBIT A
LEGAL PROPERTY DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY
OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Parcel A:
Lot 2 of City of Carlsbad Tract No. 2017-0003, in the City of Carlsbad, County of San
Diego, State of California, according to Map thereof No. 16622, filed in the office of the
County Recorder of San Diego County, December 3rd, 2024, as Instrument No. 2024-
7000579 of Official Records.
Excepting therefrom, all minerals, mineral rights, oil, oil rights, natural gas, natural gas
rights, petroleum, petroleum rights, other hydrocarbon substances, geothermal steam,
all underground water, and all products derived from any of the foregoing, in or under or
which may be produced from the property which underlies a plan parallel to and 500
feet below the present surface of the property, together with the perpetual right of
drilling, mining, exploring and operating therefore and storing in and removing the same
from the property or any other land, including the right to whipstock or directionally drill
and mine from lands other than the property, oil, water or gas wells, tunnels and shafts
into, through or across the subsurface of the property, and to bottom such whipstocked
or directionally drilled wells, tunnels and shafts under and beneath or beyond the
exterior limits thereof, and to red rill, retunnel, equip, maintain, repair, deepen and
operate any wells or mines, without, however, the right to drill, mine, store, explore and
operate through the surface or the upper five hundred (500) feet of the subsurface of
the property, as reserved by Daon Corporation in deed recorded June 23, 1983 as File
No. 83-212476 of Official Records.
Parcel B:
A Non-exclusive easement for pedestrian access upon, over and across that portion of
Lot 17 of CARLSBAD Tract 01-09 La Costa town square -commercial, in the City of
CARLSBAD, County of San Diego, State of California, according to Map Thereof No.
15998, filed in the office of the County Recorder of said county on November 5, 2014,
more particularly described as follows: being a 10.00 foot wide strip of land lying 5.00
feet on both sides of the following described centerline: commencing at the Southwest
corner of said Lot 17; thence along the West line of said lot North 34° 57' 39" West, 66.98
feet, thence North 32° 50' 49" East, 16.68 feet; thence North 06° 32' 56" West, 48.93 feet
to the true Point of Beginning; thence leaving said Westerly line North 25° 34' 23" East,
35.81 feet to the beginning of a 25.00 radius curve concave Southeasterly, thence
Northeasterly along the arc of said curve through a central angle of 47° 36' 14" a distance
of 20.77 feet; thence North 73° 10' 37" East, 8.38 feet; thence North 28° 26' 47" East,
70.22 feet; thence North 61 ° 55' 24" West, 29. 70 feet; thence North 28° 39' 08" East,
6.75 feet; thence North 02° 11' 43" East, 56.00 feet; thence North 22° 05' 36" West,
18
119.23 feet; North 03° 11' 49" West, 86.40 feet; thence North 21° 19' 10" West, 16.06 to
the Westerly line of said Lot 17 and the point of terminus.
The sidelines of the herein above described 10.00 foot wide strip of land to be shortened
or extended so as to terminate Northerly and Southerly in the Westerly line of Lot 17.
Parcel C:
An Easement for drainage purposes over, under, upon and across that portion of Lot 15
of CARLSBAD TRACT 01-09 LA COSTA TOWN SQUARE -COMMERCIAL, in the City of
CARLSBAD, County of San Diego, State of California, according to Map Thereof No 15998,
filed in the office of the County Recorder of said county on November 5, 2014, more
particularly described as follows:
Beginning at the Northwest corner of Parcel 3 of Tract No. 04-08 in the City of CARLSBAD,
County of San Diego, State of California, according to Parcel Map Thereof No. 20982 filed
in the office of the County of said county July 11, 2012; thence along said Westerly line of
said parcel South 22° 17' 46" East, 191.06 feet, thence South 13° 16' 26" East, 26.16 feet
to a point on the Northerly right of way line of La Costa Avenue as dedicated per
Document No. 77-281161, said point being the beginning of a non tangent
958.00 foot radius curve concave Northeasterly, a radial lin,e to said point bears South
13° 16' 26" West, thence Northwesterly along the arc of said curve through a central
angle of 16° 24' 20", a distance of 274.31 feet; thence leaving said right of way North 26°
29' 00" West, 8.33 feet, thence North 12° 29' 49" I West, 5.87 feet; thence North 17° 34'
49" East, 70.57 feet; thence South 89° 45' 39" East, 10.42 feet, thence North 71 ° 59' 03"
East, 132.73 feet; thence South 75° 09' 31" East, 6.03 feet; thence South 50° 08' 27" East,
35.79 feet to the Point of Beginning.
Parcel D:
A Non-Exclusive easement for pedestrian and vehicular ingress and egress of the Shared
Parking Stalls and Shared Private Streets, as set forth in that certain Mutual Benefit
Agreement, by and between Mirka La Costa , LP, The Nest at La Costa Association and
Woodside 055, LP and recorded December 3, 2024 as Instrument No. 2024-0334826 of
Official Records.
Said document was amended by a First Amendment to the Mutual Benefit Agreement,
dated April 22, 2025, and executed by Mirka La Costa, LP, The Nest at La Costa
Association and Woodside 055, LP and recorded April 24, 2025, as Instrument No. 2025-
0107344, Official Records
Said document was amended by a Second Amendment to Mutual Benefit Agreement,
dated May 9, 2025, and executed by Mirka La Costa, LP, The Nest at La Costa Association
and Woodside 055, LP and recorded May 12, 2025, as Instrument No. 2025-0124738,
Official Records
APN 2230507600
19
EXHIBIT B
Bed/Bath Sq. ft. Total
1 bed/1 bath 560 5
2 bed/1 bath 765 2
2 bed/2 bath* 775 6
3 bed/2 bath 1,005 6
Total 19
* Includes 1 unrestricted manager's unit
20