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HomeMy WebLinkAboutCT 13-03; ; 2018-0463930; Affordable Housing-Regulatory Agreement & Dec. of Restrictive CovenantsI • • JI RECORDING REQUESTED BY: DOC# 2018-0463930 111111111111 lllll 111111111111111 lllll lllll lllll lllll 111111111111111111 City of Carlsbad Nov 06, 2018 10:57 AM OFFICIAL RECORDS Ernest J. Dronen burg, Jr., AND WHEN RECORDED MAIL TO: City Clerk SAN DIEGO COUNTY RECORDER FEES $0 00 (SB2 Atkins $0.00) PCOR NIA City of Carlsbad 1200 Carlsbad Village Dr Carlsbad, Ca. 92008 PAGES 18 ·~-=--~~~~~~~r ai7CJYL ~ cument title(s) on ~nc._ti ve. Cov-e..tY)nbJ 1 D Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that is subject to the imposition of documentary transfer tax, or, 2 D Exempt from fee per GC27388.1 due to being recorded in connection with a transfer that was subject to documentary transfer tax which was paid on document recorded previously on _______ (date) as document number ____________ of Official Records, or, 3 D Exempt from fee per GC27388.1 due to the maximum fees being paid on documents in this transaction, or, 4 D Exempt from fee per GC27388.1 due to the maximum fees having been paid on documents in the transaction(s) recorded previously on __________ (date) as document number(s) _______________________ of Official Records, or 5 D Exempt from fee per GC27388.1; document transfers real property that is a residential dwelling to an owner-occupier, or, 6 D Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that is a residential dwelling to an owner-occupier, or, 7 D Exempt from fee per GC27388.l due to it being recorded in connection with a transfer of real property that is a residential dwelling to an owner-occupier. The recorded document transferring the dwelling to the owner-occupier was recorded on __________ (date) as document number(s) ________________________________ , or, 8 D Exempt from the fee per GC 27388.1 (a) (1); Not related to real property, or, 9 [Z] Exempt from fee under GC27388.l for the following reasons: GC27388.1 (2)(0): real estate document recorded by a municipality THIS PAGE ADDED TO PROVIDE SENATEBlll2EXEMPT1ONINFORMAT1ON (Additional recordingfeeapplies) ' ' , RECORDING 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 (Space above for Recorder's Use) REGULATORY AGREEMENT AND DECLARATION OF RESTRICTNE COVENANTS This Regulatory Agrewent and Declaration of Restrictive Covenants ("Agreement") is made and entered into as of this 2 .,, day of AV tr.' 5 'f, 2018, by and between the City of Carlsbad, a chartered municipal corporation ("City"), and Shapell Montecito, LLC, a California limited liability company ("Developer"). RECITALS 1. City and Developer's predecessor-in-interest, Rancho Castera, LLC, a Delaware limited liability company ("Initial Developer") entered into certain Affordable Housing Agreement Imposing Restrictions on Real Property dated March 17, 2014. The City and Initial Developer subsequently entered into that certain Affordable Housing Agreement Imposing Restrictions on Real Property Amendment No. 1 (the "First Amendment") dated November 11, 2016, and recorded in the Official Records as document number 2016-0704052. The AHA, as amended by the First Amendment, is collectively referred to as the "Affordable Housing Agreement". The Affordable Housing Agreement sets forth the affordable housing requirements for the Developer's Robertson Ranch multi-family residential project, located on the real property in the City of Carlsbad, County of San Diego, more particularly described in the Affordable Housing Agreement (collectively, the "Development"). 2. As a portion of the overall Development, Developer intends to develop fifty-six (56) units on a portion of the real property subject to the Affordable Housing Agreement as more particularly set forth on Exhibit A, attached hereto and incorporated herein ("Property"). Of the fifty- six (56) units to be developed on the Property, fifty-six (56) units will be restricted to occupancy by, and affordable to, moderate income households ("Moderate Income Units"). The Moderate Income Units will be developed to meet a portion of the affordable housing obligations for the Development as required by the Affordable Housing Agreement. 3. In accordance with the requirements of the Affordable Housing Agreement, 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. 1 4. 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 Shapell Montecito, LLC, a California limited liability company, and its successors in interest to the Project. (d) "Development" shall mean the real property subject to, and all residential units developed pursuant to, the Affordable Housing Agreement. ( e) "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. (f) "HCD" shall mean the California Department of Housing and Community Development. (g) "Median Income" shall mean the median gross yearly 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. (h) "Moderate Income Household" shall mean a household whose annual gross income does not exceed one hundred twenty percent (120%) of the Median Income, adjusted for household size. (i) "Moderate Income Units" shall mean the residential units in the Project limited to occupancy by Moderate Income Households pursuant to Section 2.1 below. (j) "Ordinance" shall mean the City's inclusionary housing ordinance, set forth in Chapter 21.85.155 of the City's municipal code, as such may be amended, or replaced, from time to time. 2 1010·23 2305296.2 (k) "Project" shall mean the Property, and the fifty-six (56) units to be constructed 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. (l) "Property" shall mean the real property described in Exhibit A attached hereto and incorporated herein. (m) "Rent" shall mean the total of monthly payments by the tenants of a Moderate Income Unit for the following: use and occupancy of the Moderate Income Unit and land and associated facilities, including 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, 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 the tenant. (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 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 2.1 Income Requirements. The Moderate Income Units shall be rented to, and occupied by, or, if vacant, available for rental and occupancy by Moderate Income Households. In accordance with the Affordable Housing Agreement, the Moderate Income Units shall consist of: (i) twenty-one (21) one-bedroom units; (ii) twenty-nine (29) two-bedroom units; and (iii) six (6) three bedroom unit 2.2 Allowable Rent. (a) The monthly Rent charged to the occupants of the Moderate Income Units shall not exceed one-twelfth of thirty-percent (30%) of one hundred ten percent (110%) of Median Income, adjusted for household size. (b) Subject to Section 2.3 below, in calculating the allowable Rent for all Moderate Income Units, the following assumed household sizes shall be utilized: Number of Bedrooms 10102:12:10)2%2 Studio One Two Three Assumed Household Size 3 1 2 3 5 2.3 Increased Income of Occupying Households. In the event, upon annual recertification of the income of a Moderate Income Household, Developer discovers that the occupants of a Moderate Income Unit no longer qualifies as a Moderate Income Household, but the household income does not exceed one hundred forty percent (140%) of the Median Income, such household shall continue to be considered a Moderate Income Household, and the Rent for such Moderate Income Unit shall not exceed the allowable Rent set forth in Section 2.2 above. In the event, upon annual recertification of the income of a Moderate Income Household, Developer discovers that the occupants of a Moderate Income Unit no longer qualify as a Moderate Income Household and the household's income exceeds one hundred forty percent (140%) of the Median Income, such household's Unit shall be considered a Moderate Income Unit, but, notwithstanding anything to the contrary set forth in this Agreement, the Rent may be increased as determined by Developer until such household vacates such Unit, and Developer shall rent the next available Moderate Income Unit to a Moderate Income Household to comply with the requirements of Section 2.1 above. Moreover, a Moderate Income Unit occupied by a Moderate Income Household shall be deemed, upon the termination of such Moderate Income Household's occupancy, to be continuously occupied by a Moderate Income Household, as applicable, until reoccupied, at which time the character of the Moderate Income Unit shall be re-determined based on the new occupant's household income. 2.4 Lease Provisions. Developer shall include in leases for all Moderate 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 Moderate Income Household. Each lease or rental agreement shall also provide that the household is subject to annual recertification in accordance with Section 3.1 below, and that, if the household's income increases above the applicable limits for a Moderate Income Household, such household's Rent may be subject to increase. 2.5 Condominium Conversion. Developer shall not convert the Project or the Moderate Income Units to condominium or cooperative ownership, or sell condominium or cooperative conversion rights to the Property, during the Term. ARTICLE 3. INCOME CERTIFICATION AND REPORTING 3 .1 Income Certification. Developer will obtain, complete and maintain on file, immediately prior to initial occupancy of a Moderate Income Unit and annually thereafter, income certifications from each Moderate Income Household. Developer shall make a good faith effort to verify that the stated income, in a certification provided by an applicant or a household residing in a Moderate Income Unit, is accurate by one or more of the following steps as a part of the verification process: (1) obtain pay stubs for the four (4) most recent pay periods; (2) obtain income tax returns for the two (2) most recent tax years; (3) conduct a credit agency or similar search; (4) obtain an income verification form from the applicant's current employer; (5) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or ( 6) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Copies of tenant income certifications shall be available to City upon written request. 3.2 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 reasonably approved by 4 I 010'2J\2J0~296.2 City. The annual report shall include for each Moderate Income Unit covered by this Agreement, the Rent and the income and household size of the household occupying the Moderate Income Unit. The report shall also state the date the tenancy commenced for each Moderate Income Unit and such other information as City may require. 3.3 Additional Information. Beginning the first February l st after initial occupancy of any Unit within the Project, Developer shall provide any information regarding the Moderate Income Units and Developer's obligations under this Agreement that is reasonably requested by City. 3.4 Records. Developer shall use commercially reasonable efforts to maintain complete, accurate and current records pertaining to the Moderate Income Units, 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 Moderate Income Units. 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 or short-term vacation rentals. 4.2 Compliance with Affordable Housing Agreement and Applicable Laws. Developer shall comply with all the terms and provisions of the Affordable Housing Agreement to the extent applicable to the Property, the 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). 4.3 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, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, or shall acquire such tax credits or other methods of satisfaction of any such tax liabilities, at such times and 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 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. 4.4 Nondiscrimination. All of the Moderate Income Units shall be available for occupancy on a continuous basis to members of the general public who qualify as a Moderate Income Household. Developer shall not give preference to any particular class or group of persons in renting the Moderate Income Units, except to the extent that the Moderate Income Units are required to be leased to Moderate Income Households. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, or any other classification protected by law, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall Developer or any person claiming under or through Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment 5 of persons for the operation and management of the Project. All deeds, leases or contracts made or entered into by Developer as to the Moderate Income Units or portion thereof, shall contain covenants concerning discrimination as prescribed by the Affordable Housing Agreement. ARTICLE 5. PROPERTY MANAGEMENT AND MAINTENANCE 5.1 Management Responsibilities. Developer 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. Developer shall retain the Management Agent (defined below) approved by City in its reasonable discretion to perform its management duties hereunder, unless Developer demonstrates to City that it has the capacity to self-manage the Project and receives written approval from the City for self- management. A resident manager shall also be required, selection of whom shall be at the discretion of Developer. The resident manager shall not be subject to the Moderate Income Household requirements, and the resident manager's unit at the property shall not be deemed a Moderate Income Unit for the purposes of this Agreement. 5.2 Management Agent; Periodic Reports. The Project shall at all times be managed by an experienced management agent reasonably acceptable to and approved by City, with demonstrated ability to operate residential facilities like the Project in a manner that will provide decent, safe, and sanitary housing ("Management Agent"). Prior to the first occupancy permit for any building within the Project, Developer shall submit for City's approval the identity of any proposed Management Agent. Developer shall also submit such additional information about the background, and experience of any proposed Management Agent as is reasonably necessary for City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent as set forth above, City shall approve the proposed Management Agent by notifying Developer in writing. Unless the proposed Management Agent is disapproved by City within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, the Developer's proposed Management Agent shall be deemed approved. Notwithstanding the foregoing, the City has approved Shappell Properties as the initial Management Agent for the Project, and the requirements of this Section shall only apply in the event the Developer desires to utilize any other entity as the Management Agent. 5.3 Performance Review. City reserves the right, upon five (5) business days prior written notice, to conduct an annual, or more frequent review of the management practices of the Project if deemed necessary by City. The purpose of each periodic review will be to enable City to determine if the Project is being operated and managed in accordance with the requirements and standards of this Agreement. Developer shall reasonably 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 Project is 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 its intention to cause Developer's replacement of the Management Agent, including the reasons therefore. Within fifteen ( 15) days after receipt by Developer of such 6 I II I II 23 2305296.2 written notice, City staff and Developer shall meet in good faith to consider methods for improving the financial and operating status of the Project including, without limitation, replacement of the Management Agent. If, after such meeting, City staff reasonably determines that the Management Agent is not adequately performing and requires, in writing, the replacement of the Management Agent, Developer shall promptly dismiss the then Management Agent, and shall appoint as the Management Agent a person or entity reasonably meeting the standards for a Management Agent set forth in Section 5.2 above and reasonably approved by City pursuant to Section 5.2 above. Any contract with a Management Agent for the operation or management of the Project 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 Approval of Management Policies. Developer shall submit its written management policies with respect to the Project 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. 5.6 Property Maintenance. Developer agrees, for the entire Term, to use commercially reasonable efforts to maintain 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. Normal wear and tear of the Project will be acceptable to City assuming Developer agrees to provide all necessary improvements to 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, and any other matter posing a material and imminent threat to the health and safety of the tenants, or thirty (30) days after City has notified Developer in writing of the default or, if the default cannot be remedied within thirty (30) days, the Developer fails to commence to cure such default within thirty (30) days and thereafter diligently pursue such cure to completion as soon as reasonably possible, but in no event to exceed one hundred twenty (120) days without the prior written approval of the City (which shall not be unreasonably withheld, conditioned, or delayed), 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 forty-eight ( 48) hours' prior notice to Developer, and perform or cause to be performed all such acts and work reasonably necessary to cure the default. By execution of this Agreement, Developer hereby grants to the City, and the City's employees and agents, during the Term, 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 reasonably necessary to protect, 7 IOIIJ-23123052%.2 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. City shall indemnify and hold Developer harmless from and against any claims, loss, costs, causes of action, liability, damage, or injury of any kind arising from or relating to any entry onto or work performed on the Property by the City or City's employees, agents, representatives, or contractors pursuant to this Section. ARTICLE 6. MISCELLANEOUS 6.1 Term. The provisions of this Agreement shall apply to the Property for the entire Term as defined in Section I above. 6.2 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 said covenants and restrictions shall expire. During the Term, 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. 6.3 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 as soon as reasonably possible, but in no event to exceed one hundred twenty (120) days without the prior written approval of the city (which shall not be unreasonably withheld, conditioned or delayed), 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. 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 is not adequate to compensate the City for Developer's failure to perform according to the terms of this Agreement. (b) Remedies Provided Under Affordable Housing Agreement and Ordinance. City may exercise any other remedy provided under the Affordable Housing Agreement, or otherwise available under the Ordinance. 6.4 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 8 1 o I o·n·2,052lJ6.2 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 City's in-house counsel and any third-party counsel retained by the City). 6.5 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. 6.6 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. 7 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. 6.8 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. To City: City of Carlsbad Housing and Neighborhood Services Department Attn: Housing and Neighborhood Services Director 1200 Carlsbad Village Drive Carlsbad, CA 92008-1949 To Developer: Shapell Montecito, LLC 1990 S. Bundy Drive, Suite 500 Los Angeles, CA 90025 Attn: Doug Griffith 6.9 Entire Agreement. The Recitals set forth above, and all exhibits attached hereto, are hereby incorporated into this Agreement by this reference. This Agreement, in conjunction with the Affordable Housing 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 as if it had been prepared by one of the parties, but rather as if both parties had prepared it. The parties have 9 IO IO 2:\ ,23052%.2 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. 6.10 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. 6.11 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 ofland 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 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, unless any such loss, liability, damage, or injury arises from the actions or omissions of the City or any of the City's elected officials, employees, contractors, or representatives. 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). 6.12 Hold Harmless; Indemnity. In addition to any obligations set forth in the Affordable Housing Agreement, 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, including: (i) any injury or death of any person or damage to property or other liability of any nature; (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, 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. 6.13 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. 10 IO I (),2,,23052%.2 6.14 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 oflimitation, 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. 6.15 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 Prope11y. 6.16 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. 6.17 State Law Requirements. (a) Enforcements by Certain Third Parties. Pursuant to Health and Safety Code Section 33334.3(t)(7) a default under this Agreement, including the rental of a Unit by the Developer to a household not eligible under this Agreement, may be enforceable by the City, a residents' association, a resident of another affordable unit, a former resident of a Unit, a person on an affordable housing waiting list, and others who are listed in any applicable state law. The Parties agree and acknowledge that such rights shall only exist during such time that the Property is subject to the requirements of Health and Safety Code Section 33334.3(t)(7), or any successor statute. (b) Developer Obligations Prior to Expiration of Term. At least six (6) months prior to the expiration of the Term, Developer shall provide by first-class mail, postage prepaid, a notice to all Tenants in the Moderate Income Units containing: (i) the anticipated date of the expiration of the Term; (ii) any anticipated Rent increase upon the expiration of the Term; (iii) a statement that a copy of such notice will be sent to the City; and (iv) a statement that a public hearing may be held by the City on the issue and that the Tenant will receive notice of the hearing at least fifteen ( 15) days in advance of any such hearing. Developer shall also file a copy of the above- described notice with the City's Department of Housing and Neighborhood Services. In addition, Developer shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11, to the extent applicable. Nothing in this subsection shall be deemed to waive, limit, or otherwise impair the Developer's obligation to comply with Section 21.85.155 of the Ordinance. 6.18 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. IO I 02:1'23052%.2 Remainder of page left intentionally blank 11 12 IO 11123 230:i2%.2 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 ~W.:J Debbie Fountain, Community & By: Economic Development Director APPROVED AS TO FORM: IO I (l\23·2305296.2 Signatures continue on following page Signatures must be notarized 13 DEVELOPER: SHAPELL MONTECITO, LLC, a California limited liability company By: Shappell SoCal Rental Properties, LLC, A Delaware limited liability company Its: Sole Member By: By: Shappell Properties, Inc., a Delaware Corporation Its: Sole Member Name: ____ )-.q~~=-------i..__lj_JA_»_~__;_} Its:: 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. 14 10 I 0'23\2305296.2 . , EXHIBIT A LEGAL PROPERTY DESCRIPTION All of Carlsbad Tract 13-03, Rancho Costera (Robertson Ranch West Village) in the City of Carlsbad, County of San Diego, State of California, according to Map thereof No. 16091 & 16092 filed in the Office of the County Recorder of San Diego County on 2/21/16 as file no. 2016-7000051 & 2016-7000052. Total acres= 197.95 acres more or less A-1 10102:;'23052%.2 ' ' CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 • 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 LG~.-; ~ \e .. 5. On ~s'-'\,_~\ '"2..., 2..U\<( before me, =re~ A--\ -\Cu/\c·V"' 'Nc;;G . ..vv)-P\ .. ,u,y .. ~, c.... ' Date Here Insert Name and Title of tne Officer personally appeared -.Jc,V'--t"l\c-\-e..6 Sc"-~ c~'- Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person,(sr whose name~ isfafe- subscribed to the within instrument and acknowledged to me that hc/she,l:thcy executed the same in his/l'lcritl'leir authorized capacityfies'}, and that by his/+teiftl 1ei1 signatur~ on the instrument the person ts,, or the entity upon behalf of which the personW-acted, executed the instrument. 1············1 ..... .. TINA ATTARIAN : f)~~···' . Notary Public -Californi: f .. --lo""~ ~ : . Los Angelrs County _ . Commission # 2205278 My Comm. Expirts Jul 15, 2021 Place Notary Sea/ Above 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;:r:CN-:___ Q±+Cv\L(Lv-\__. Signature of Notary Public ----------------OPTIONAL---------------- Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: ____________________________ _ Document Date: ___________________ Number of Pages: _____ _ Signer(s) Other Than Named Above: ________________________ _ Capacity(ies) Claimed by Signer(s) Signer's Name: ____________ _ [J Corporate Officer -Title(s): ______ _ [J Partner -• Limited • General lJ Individual • Trustee • Attorney in Fact • Guardian or Conservator •Other: _____________ _ Signer Is Representing: _________ _ Signer's Name: ____________ _ • Corporate Officer -Title(s): ______ _ • Partner -• Limited [] General • Individual • Attorney in Fact • Trustee • Guardian or Conservator n Other: ______________ _ Signer Is Representing: _________ _ ©2016 National Notary Association· www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907 ' •. • it • CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 • 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 \.....oS ~e \.:{S On f"\.v....?)y_S:., 2 1 20 1 ~ before me~~ A"t +a....,--le,_\_..,-, 1 No-tG;;:a ~ C., Date Here Insert Name and Title of the-fficer personally appeared \i~1...l\..,c~ 0C)\L......l.._ \J'.JC~t Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the perso~ whose name~ is/ai=e subscribed to the within instrument and acknowledged to me that hel~heftl-le~ executed the same in hisfhef/tl ,eir authorized capacityfjesr, and that by hisll ,e1 ftl 1eir signature(-s} on the instrument the person(s), or the entity upon behalf of which the person~ acted, executed the instrument. 1············~ .. .. TINA ATTARIAN • @; ·····::.. Notary Public -California z 1 · ~-;t;'• -Los Angeles County ! · • Commission# 2205278 My Comm. Expires Jul 15, 2021 Place Notary Sea/ Above 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. _,_-(l Signature I u/\C2i2f-6,A~ Signature of Notary Public ---------------OPTIONAL--------------- Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: ____________________________ _ Document Date: ___________________ Number of Pages: _____ _ Signer(s) Other Than Named Above: _______________________ _ Capacity(ies) Claimed by Signer(s) Signer's Name: ____________ _ Signer's Name: ____________ _ • Corporate Officer -Title(s): ______ _ • Corporate Officer -Title(s): ______ _ • Partner -• Limited • General • Partner -• Limited • General • Individual • Attorney in Fact • Individual • Attorney in Fact • Trustee • Guardian or Conservator • Trustee • Guardian or Conservator •Other: _____________ _ • Other: ______________ _ Signer Is Representing: _________ _ Signer Is Representing: _________ _ • ©2016 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907