HomeMy WebLinkAbout2000-06-13; City Council; 15776; PGP Carlsbad Seniors LTD II-
iB# 1577b TITLE- EXECUTION AND APPROVAL OF A DEPT. HD
ITG. lQ-\3-o” @%illSSORY NOTE, SUBORDINATION AGREEMENT
AND USE OF DOCUMENTS INSTRUCTIONS AND c’-m*T-I-Y.
IEPT. H/RED INDEMNIFICATION BETWEEN PGP CARLSBAD c,Ty MGR
SENIORS, LTD. II AND THE CITY OF CARLSBAD .K
RECOMMENDED ACTION:
ADOPT City Council Resolution No.2000- \“13 APPROVING a Promissory Note,
Subordination Agreement and Use of Documents Insiructions and Indemnification between PGP
Carlsbad Seniors, Ltd. II and the City of Carlsbad.
ITEM EXPLANATION
In April of 1986, the City of Carlsbad approved construction of the 57 unit Jefferson House II
senior apartment project at Jefferson Street and Home Avenue. The project was approved
pursuant to the provisions of the Senior Housing Ordinance in effect at that time. The Senior
Ordinance permitted a density increase for a maximum of 75 dwelling units/acre, and a reduction
in the parking requirement to a ratio of one space per two units. Project conditions of approval
required the applicant to submit (1) a conversion plan for the project in the event the project was
converted to a use other than senior housing, and (2) provide to the City a second trust deed
secured by the property in an amount sufficient to fund the conversion from a senior to a market
rate, lower density project. The second trust deed becomes due and payable to the City should
the property owner fail to maintain the property as required by the terms and conditions of the
conditional use permit approved for the senior housing project.
In 1991, the property owner, PGP Carlsbad Seniors, Ltd. II, refinanced the property. As part of the
refinance, a promissory note, deed of trust and subordination agreement were executed between
the property owner and the City. The subordination agreement allows for the subordination of
the City’s second trust deed to the property lender’s first trust deed. PGP is currently seeking to
refinance the loan for the property, which will again necessitate the execution of a new
promissory note and subordination agreement.
EXECUTION OF DOCUMENTS
The previous subordination agreement required the review and approval of the City Council. This
process of review and approval is costly and time consuming for both the property owner and the
City. Subordination agreements are typically simple documents that can be processed
administratively. Therefore, the attached resolution has been drafted to approve the subject
documents and authorizes the City Manager to execute them. Further, the attached resolution
will allow future subordination agreements or transfers of the subordination agreement to a new
property owner to be reviewed by the Housing and Redevelopment Director, and executed by the
City Manager, subject to the review and approval of the City Attorney.
I
h
Page 2 of Agenda Bill No. 1s I 7 76
FISCAL IMPACT
When the City’s second trust deed was recorded in March of 1991, the amount of the deed was
$1,573,392. S’ once that time, the trust deed has compounded at 10% simple interest per annum.
The current value of the City’s second trust deed is approximately $3.7 million, while the current
total appraised value of the property is $3,858,000 million. PGP is seeking a new loan for the
property in the amount of $2,805,000, or approximately 75% of the value of the property. By
granting the subordination, the value of the City’s security will be reduced to the value of the
equity in the property ($1,053,000) rather than the value of the deed ($3.7 million). The City’s
promissory note states that the loan to which the deed of trust is to be subordinated shall not
exceed ninety percent (90%) of the fair market value of the property at the time of the
subordination. Therefore, approval of the subordination will meet this requirement.
Should PGP cease to operate the property as senior housing as required by their conditional use
permit, the City’s second trust deed becomes due and payable. As permitted by the terms of the
conversion plan, the City may, if necessary, use the proceeds of the second trust deed to convert
the property back to senior housing. Staff believes that the second trust deed security in an
amount equal to the equity in the property ($1,053,000) is more than adequate to ensure the
continued operation of the building as a senior project or to fund any necessary conversion
required to bring it into compliance with the conditional use permit.
EXHIBITS
1. City Council Resolution No. 2000- ! 9 3
2. Subordination Agreement PGP Carlsbad Seniors, LTD. II and the City of Carlsbad
3. Use of Documents Instructions and Indemnification
4. Promissory Note
RESOLUTION NO. zooo-193
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, TO APPROVE A
PROMISSORY NOTE, SUBORDINATION AGREEMENT
AND USE OF DOCUMENTS INSTRUCTIONS AND
INDEMNIFICATION BETWEEN PGP CARLSBAD
SENIORS, LTD. II AND THE CITY OF CARLSBAD
APPLICANT: PGP CARLSBAD SENIORS, LTD. II
CASE NO: RP-CUP 83-02
6 WHEREAS, in 1986 a Senior Housing Project commonly refmed to as Jefferson
7 House II was approved and constructed which allowed for a density bonus and reduced
a parking requirements; and
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10
WHEREAS, the applicant as conditioned, submitted a conversion plan and a
11 subordination agreement naming the City of Carlsbad as the holder of the second trust deed;
12 and
13 WHEREAS, on March 21, 1991, City of Carlsbad City Council approved the
14 recordation of a deed of trust and subordination agreement between PGP Carlsbad Seniors,
15 LTD. II as Trustor and the City of Carlsbad as Trustee, and
16
17
WHEREAS, the property owner is seeking to refinance the funding for the property
and is requesting that a new subordination agreement be executed between PGP Carlsbad ia
19 Seniors, LTD. II and the City of Carlsbad.
20 NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
21 Carlsbad, California, as follows:
22 1. The above recitations are true and correct.
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2. The City Council authorizes the City Manager to execute the Amended Promissory
Note, Subordination Agreement and the related Use of Documents Instructions and
Indemnification between PGP Carlsbad Seniors, LTD. II and the City of Carlsbad in
substantially the form presented to the City Council on June 13, 2000, and subject to
review and approval by the City Attorney.
3. The City Council authorizes future subordination agreements and related documents
for this subject property or transfers of the subordination agreement to a new property
owner to be submitted to the Housing and Redevelopment Director for review, and to
be executed by the City Manager, subject to the review and approval of the City
Attorney.
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Conditions:
1. Prior to the recordation of the subordination agreement, PGP Carlsbad Seniors, LTD.
II shall deliver the executed duplicate original Promissory note to the Housing and
Redevelopment Director.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of
the City of Carlsbad, California, held on the 13th day of June 2000, by the following vote, to wit:
AYES: Council Members Lewis, Hall and Nygaard.
NOES: None
ABSENT: Council Memb
ABSTAIN: None
ATTEST:
&hflw
. WOOD, CITY CLERK
(SEAL)
CC RESO. NO. 2000-193
PAGE 2
A
Picked up the following on 6-21-00:
1. “Use of Documents” Instructions and Indemnification
2. Subordination Agreement (Escrow 203048009-N77 - Jefferson House)
mpany 61 g-282-3200 - Joyce Schrum)
*. " JUN. 5.2000 5:07PM CHUG0 TITLE NO.4565 P. 2/18
Lora ; NC 203048009-N77 ) E ABQ_yE FOR RECORDER’~
NO- THIS SUBORDINATION AGREEMENT RE!WLTS IN
YOUR SECURITY INTEREST IN THE PROPERTY BECOMING
SulMECI’ TO AND OF LOWER PRIORITY THAN THE LIEN OF
SOME OTHER OR LATER SECURITY INSTRUMENT.
THIS AGREEMENT, made this 5th day of June, 2000, by PGP Carlsbad Seniors
LTD. II, a California Limited Partnership owner of the land hereinafker described and
hex&after refirrtd to as “Ownef’, and The City of Carlsbad p-t owner and holder of
the deed of trust and note first hereina& described and here&fter refexred to as
“Beneficiary”;
THAT WHEREAS, PW Carl&ad Seniors LTD. II, a California Limited
Partnership did execute a deed of trust dated February 6, 1991, to SMS Test Deed
Service, a California Corporation, as trustee, covering that certain real property described
as follows:
Lots X4,15,16,17 and 18 of ScheU and Sites Addition to Carlsbad, in the City of
Carlsbad, County of San Diego, State of California, according to Map thereof No. 2145,
filed in the Office of the County Recorder of San &ego County, Febnrary 24 1929.
to secure a note in the sum of $1,573,392.M) dated February 6,1991, in favor of The City
of Carlsbad, which deed of trust was nconkd in the office of the County Recorder of San
Riego County, CaliGmia, on March 21.1991, as FileIPageNo.91-123873; and
WHEREAS, Owner has executed or is about to execute a deai of trust and note in
the sum of !42,805,000.00, dated June $2000, in favor of Financial Institutional Partners
Mortgage Company, LP, herein&r refd to as “Lend&, payable with interest and
upon the terms and conditions descrii therein, which deed of trust is to be recotded
concurrently herewith, and
‘. *' JUN. 52000 5:OBPM CHUG0 TITLE NO. 4565 P. 3118
WHEREAS, it is a condition precedent to obtaining said loan that said deed of
trust above mentiomd shall unconditionally be and remain at alt time a lien or charge
upon the land heretofore described, prior and superior to the lien or charge of the deed of trust first above mentioned, and
WHEREAS, Lender is willing to make said loan provided the deed of trust
seewing the sane is a lien or charge upon the above described property prior and
superior to the lien or charge of the deed of ttust first above mentioned and provided that
Beneficiary will specifically ;tad unconditionally subordinate the lien or charge of the
deed of trust first above mentioned to the lien or charge of the deed of trust in favor of
Lender; and
WHEREAS, it is to the mutual benefit of the parties hereto that Lender make sueh
loan ko Owner; and Beneficiary is willing that the deed of txust securing the same shall,
when recorded, constitute a lien or charge upon said loan which is wxonditionalIy prior
and superior to the lien or charge of the deed of trust first above mentioned.
NOW THEREFORE, in consideration of the nut&al bene6ts accruing to the
parties hereto and other valuable consideration, the receipt and sufficiency of which
consideration is hereby acknowledged, and in order to induce Lends to make the loan
above rcfd to, it is hereby declared, understood and agreed as Mows:
0) That said de4 of trust securing said note in favor of Lender, and
auy renewals or extensions thereof, shall urmnditionally be and remain at all times a lien
or charge on the property therein described, prior and superior to the lien or charge of the
deed of trust first above mentioned.
(2) That Lender would not make its loan above described without this
subordinatkm agreement.
(3) That this agtwment shall be the whole and only agreement with
regard to the subordination of the lien or charge of the deed of trust fm above mentioned
to the lien or charge of the deed of trust in favor of Lender above refmed to and shall
supersede and cancel, but only insofar as would affect the priority between the deeds of
trust heretofore specifically described, any prior agreements as to such subordination
including, but not limited to, those provisions, if any, contained in the deed of trust East
above mentioned, which provide for the subordination of the lien or charge thereof to
another deed or deeds of trust or to another mortgage or mortgages.
Beneficiary declares, agrees and acknowledges that
(a) He consents to and approves (i) all provisions of the note
and deed of trust in fmor of Lender above referred to, and (ii) all agreements, including
but not limited to any loan or escrow agreemmts, between Owner and Lender for the
disbursement of the proceeds of Lender’s low:
‘. '* JUN. 5.2000 5:08PM CHILAGO TITLE - NO.4565 P, 4118
(b) Lender in making disbursements Pursuant to any such
agreement is under no obtigation or duty to nor has Lender represented that it will, see to
the application of such proceeds by the person or persow to whom Lender disburses such
proceeds and any application or use of such proceeds for purposes other than those
provided for in such agreement or agreements shalt not defeat the s&o&a&m herein
made in whole or in part;
(c) He intentionally and anconditionally waives, relinquishes
and subordinates the lien or charge of the deed of trust first above mentioned in favor of
the lien or charge upon said land of the deed of trust in favor of Lender above referred to
and understands that in reliance upon, and in consideration of, this waiver,
relinquishment and subordination specific loans and advances arc being and will be made
and, as part and parcel thereof, specific monetary and other obligations are being and will
be cutered into which would not be made or entered into but for said reliance upon this
waiver, relinquishment and subordi&on; and
03 An endorsement has been placed upon the note secured by
the deed of trust first above mentioned that said deed of trust has by this ittstrummt been subordinated to the lien or charge of the deed of trust in favot of Lender above ref&
to.
,
NOTE& THIS SUBORDINATION AGREEMENT CONTAINS A
PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON
YOUR REAL PROPER= SECURITY TO OBTAIN A LOAN, A
PORTION OF WHICH MAY BE EXPENDED FOR OTHER
PURPOSES THAN IMPROVEMENT OF THE LAND. IT IS
RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS
SUBORDJNATION AGREEMENT, THE PARTIES CONSULT WITH
THEIR ATTORNEYS WITH RESPECT THERETO.
PGP Carlsbad Seniors, Ltd. II,
a California Limited Partnership
By: Pacific Gmwth Properties,
a Califbrnia General Partnership, Gemxal
Loan No: 4000443
Order No.: 203048009-U16
EXHIBIT “A”
In executing this Subordination Agreement, Subordinating Lienholder acknowledges and agrees
that its agreement with borrower and any terms and conditions thereof, whether expressed or
implied, are solely between it and borrower and are of no concern to Financial Institutional
Partners Mortgage Company, LP (in this Exhibit referred to as “FIPMC”); FIPMC is and will be
throughout the term of FIPMC’s loan and any modification, extension or renewal thereof, under
no duty or obligation to assure compliance with the terms and conditions of Subordinating
Lienholder’s agreement with borrower; nor will FIPMC be under any obligation or duty to take
any action or refrain from any action because of any knowledge it has or may have regarding any breach by borrower. Subordinating Lienholder further agrees, notwithstanding anything to the
contrary in law, equity or agreement with borrower that this subordination is not subject to
compliance, substantial or otherwise, with any provisions of such agreement with borrower, whether expressed or implied. Subordinating Lienholder acknowledges that FIPMC considers the
above to be a material condition for making its Joan to borrower.
Initial
Real Estate Broker, Calijbrnia Dept. ofReal Estate-Lit. No. 012372S7 DRE license information telephone no. (916) 227-0931
‘. . .
JUN. 5. 2000 5:08PM CH'YO TITLE NO.4565 P. VI8
State of California )
State of California )
County of San Diego )
On ,2000, behe me, the undersign& a Notary Public in and for
said State, personally appeared personally known to mc or proven to me on the basis of
satisfhctory evidence to be the person(s) whose name(s) is/are subs&bed to the within
instrument and admrswledged to me that he/she/they executai the same in his/hcr&heir
au&o&cd capacity(k), and that by his/he&heir signatur+) on the instrument the
person(s), or the entity upon hehalfof which the person(s) act&, executed the instrument.
WMNESS my hand and ofikial seal.
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CicAa nf
cn1 lrltu 0 $hAA- ILAw
LdL~ before me, 2
personally appeared ah L rnh N-(s) of Srener(s) d ersonally known to me - OR - 0 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.
d and official seal.
OPTIONAL
Though the information below is not required by law. it may prove valuable to persons relying on the document and could prevent
fraudulent removal and reattachment of this form to another document.
Document Date: Number of Pages:
Signer(s) Other Than Named Above:
Cl Individual
Cl Corporate Officer
677
e(s):
Partner - q Limited Et%eneral
Cl Attorney-in-Fact
0 Trustee
0 Guardian or Conservator
Cl Other:
+gJepnting :
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Signer’s Na
0 Individual
0 Corporate Officer
J=(s): I
&Partner - 0 Limited Ei6eneral
Cl Attorney-in-Fact
0 Trustee
Cl Guardian or Conservator
Cl Other:
Si ner Is Representing: 4kw-f
. liwtAJmpz
0 1995 National Nalary Association - 8236 Remmet Ave., P.0. Box 7184 - Canoga park, CA gtgOg-71.34 Prod. No. SO7 F&or&r: Call Toll-Free l-800-8766827
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State of California
County of >
ss.
On ~3-L3/-O0 oats
personally appeared h;‘cY
Name(a) of Signer(s)
M personally known to me
0 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 authorited
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, executgd the instrument.
WITNESS my hand and official seal.
Place Notary Seal Above
OPTlONAL
Though the information betow is not required by law, it may prove valuable to persons reiying on the document
and could prevent fmudulent removal and reattachment of this fom, to another document.
Description of Attached Document
Tile or Type of Document:
Document Date:
Signer(s) Other Than Named Above:
Number of Pages:
Capacity(ies) Claimed by Signer
Signer’s Name:
0 Individual
0 Corporate Officer - Title(s):
q Partner - 0 Limited 0 General
0 Attorney in Fact
Cl Trustee
Cl Guardian or Conservator
Cl Other:
Signer Is Representing:
0 1999 NaIbnal Notary AssoclaUm * 9359 OS Solo Am. PO. Bm 2402. Clmlswv~U~. CA91313-2402. v,wmatiilary.a~ Pmd. No. SW)? Reorder Call T&Free 1.8CQ4764E127
‘. ‘. 1jAV 3 ‘?flO[ 9-134Ii !U. 3551 P. ?A/25 a, .I . ~~S,r,? TITLE ,-
EXHIBIT 2
) crow No: 203048009-N77 1
MENT
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN
YOUR SECURITY INTEREST IN THE PROPERTY BECOMING
SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF
SOME OTHER OR LATER SECURITY INSTRUhlENT.
THIS AGREEMENT, made this day of 2000, by PGP
Carlsbad Seniors LTD. II, a California Limited Partnership owner of the’land hereinafter &scribed and hereinafter referred to as “Owner”, and The City of Carlsbad present owner
and holder of the deed of trust and note first hereinafter described and hereinafter referred
to as “Beneficiary”;
WITNESSETH
THAT WHEREAS, PGP Carlsbad Seniors LTD. II, a California Limited
Partnership did execute a deed of trust dated February 6, 1991, to SMS Trust Deed
Service, a California Corporation, as trustee, covering that certain real property described
as follows:
Lots 14, 15, 16, 1’7 and 18 of Schell and Sites Addition to C&bad, in the City of
C&bad, County of San Diego, State of California, according to Map thereof No. 2145,
filed in the Office of the County Recorder of San Diego County, February 2.0, 1929.
to secure a note in the sum of $1,573,392.00 dated February 6, 1991, in favor of The City
of Carlsbad, which deed of trust was recorded in the office of the County Recorder of San
Diego County, California, on March 21, 1991, as File/Page No.91-123873; and
WHEREAS, Owner has executed or is about to execute a deed of trust and note in the sum of $2,805,000.00, dated , in favor of Financial Institutional Partners Mortgage Company, LP, hereinafter refer& to as “Lender”, payable with interest and upon the terms and conditions described therein, which deed of trust is to be
recorded concurrently herewith; and
‘. MY 3. 2OOC 9: !3AM UilC.4i;? TITLE - JO. 35F 1 P. 30/C!
W&XlUS, it is a condition precedent to obtaining said loan that said deed of
trust above mentioned shall unconditionally be and remain at all times a lien or charge
upon the land heretofore described, prior and superior to the hen or charge of the deed of
trust first above mentioned; and * F,$q : ‘.
5’
9 a JU L
WHEREAS, Lender is willing to make said loan provided the deed trust
securing the same is a lien or charge upon the above described property prior and
superior to the hen or charge of the deed of trust first above mentioned and provided that
Beneficiary will specifically and unconditionally subordinate the lien or charge of the
deed of trust first above mentioned to the lien or charge of the deed of trust in favor of
Lender; and
WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall,
when recorded, constitute a lien or charge upon said loan which is uuconditionahy prior
and superior to the lien or charge of the deed of trust first above mentioned.
NOW THEREFORE, in considerarion of the mutual benefits accruing to the
parties hereto and other valuable consideration, the receipt and sufficiency of which
consideration is hereby acknowledged, and in order to induce Lender to make the loan
above referred to, it is hereby declared, understood and agreed as follows:
(1) That said deed of trust securing said note in favor of Lender, and
any renewals or extensions thereof, shall unconditionally be and remain at all times a lien
or charge on the property therein described, prior and superior to the lien or charge of the deed of trust fkst above mentioned.
(2) That Lender would not make its loan above described without this
subordination agreement.
(3) That this agreement shall be the whole and only agreement with
regard to the subordination of the lien or charge of the deed of trust first above mentioned
to the lien or charge of the deed of trust in favor of Lender above referred to and shall
supersede and cancel, but only insof= as would affect the priority between the deeds of
trust heretofore specifically described, any prior agreements as to such subordination
including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to
another deed or deeds of trust or to another mortgage or mortgages.
Beneficiary declares, agrees and acknowledges that
(a) He consents to and approves (i) all provisions of the note and deed of tmst in favor of Lender above referred to, and (ii) all agreements, including
but not limited to any loan or escrow agreements, between Owner and Lender for the
disbursement of the proceeds of Lender’s loan:
‘. . . MAY. 3. 2OOC !J:G!AM LflJX@ TITLE - !io. 3551 P. 3145
(b) Lender in making disbursements pursuant to any such
agreement is under no obligation or duty to nor has Lender represented that it will, see to
the apphcation of such proceeds by the person or persons to whom Lender disburses such
proceeds and any application or use of such proceeds for purposes other than those
provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part;
w He intentionally and unconditionally waives, relinquishes
and subordinates the lien or charge of the deed of trust first above mentioned in favor of
the lien or charge upon said land of the deed of trust in favor of Lender above referred to
and understands that in reliance upon, and in consideration of, this waiver,
relinquishment and subordination specific loans and advances are being and will be made
and, as part and parcel thereof, specific monetary and other obligations are being and will
be entered into which would not be made or entered into but for said reliance upon this
waiver, relinquishment and subordination; and
(4 An endorsement has been placed upon the note secured by
the deed of trust first above mentioned that said deed of trust has by this instrument been
subordinated to the lien or charge of the deed of trust in favor of Lender above referred
to.
NO-: THIS SUBORDINATION AGREEMENT CONTAINS A
PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON
YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A
PORTION OF WHICH MAY BE EXPENDED FOR OTHER
PURPOSES THAN IMPROVEMENT OF THE LAND. IT IS
RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS
SUBORD1[iSATION AGREEMENT, THE PARTIES CONSULT WITH
THEIR ATTORNEYS WITH RESPECT THERETO.
The City of Carlsbad
By:
Its:
By:
Its;
PGP Carlsbad Seniors, Ltd. II,
a California Limited Partnership
By: Pacific Growth Properties,
a California General Partnership, General
Partner
By:,
John E. Michaelsen, Partner By:
James T. Gianulis, Partner
By:
Frank R. Berlage, General Partner
-7
T-829 8~. 3 5! 1 F-8@. 322 5
Loan No: 4000443
Order No.: 203048009-U 16
In execuring this Subordination Agreement, Subordinating Lienholder acknowledges and agrees
thar irs agreement wirh borrower and any terms and conditions thereat wherher expressed or
implied, are solely beween it and borrower and are of no concern ‘LO Financial Institutional
Parrnen Morrpge Company, LP (in this Exhibit referred to as “FIPMC”); FIPMC is and will be
throughout rhe renn of FlPMC’s loan and any modificarion, extension or renewal thereof, under
no dury or obligation to as‘sure compliance with the terms and conditians of Subordinating
Lienholder’s agreemenr with borrower; nor will RPMC be under any obligation or dury to take
any action or refrain from any action because of any knowledge it has or may have regarding any
breach by bormwer. Subordinating Lienholder fireher agrees, nowfistanding anything to the
contrary in law, equiq or agreement with borrower thar this subordination is nor subject IO
compliance, substantial or otherwise, with any provisions of such agrremmt with borrawer,
w herhcr expressed or implied. Subordinsring Licdholdcr acknowledges that FIPMC c&klers Ihe
abort to be a mare&l condition fat makiny its loan ro borrower.
Initial
(TO BE ATTACHED TO THE S~ORDINATTO~ AGREEMENT PREPARED BY CITY OF
CARL WAD)
&al &SAY~~ &ok CM&rain &a. of Ratal tiare-L IC. No 01237X7 DRE iirrnx- vfOrmili0d Z&ph* Aa (916) 227493 I
JM 5. 2000 5:09PM f ,;ArJO TITLE
Chicago TitIe Company - Park Camino Branch
3703Camino DdRioSa,#1OO,San~o,CA 92108
Phone (619) 282-3200
“USE OF DOCUMENTS” INSTRUCTIONS AND INDEMNIFICATION
DATE: June 5,200O
TO: Chicago Title Co.-Park Camfno Branch
FROM: The City of Carlsbad
I hand you herewith the following ORIGINAL Subordination Agreemeat dated June 5,200O executed by The City of Carl&d.
Such document(s) affect(s) my intered in the real property which is commonly lmown as
2848 Jeffbson Street, Carlsbad, CA, and legally described as:
Lots 14,15,16,17 aud 18 of Schell and Sites Addition to Cadsbad, iu the City of Carlsbad, County of San Dicgo, State of Califotnia, according to Map thereof No. 2145, tiled in the Office of the County Recorder of San Diego County, February 241929.
The City of Carlsbad understands that the execution of the Subordination Agreement will rtsuit in its security interest of in the property becoming subject to and of lower priority than the lien of the new security interest being obtained by new knder. The City of Carlsbad (i) consents to and approves all provision of the note and deed of trust in favor of new Lendcr, (ii) has satisfied itself regarding the purpose of the funds being obtained and the manner in which any/all funds may be expended, and (iii) acknowledges it has been advised to seek the advise of its own independent counsel regarding all ramifications regarding its execution of this document.
You are authorised to use the above docum,ent(s) in connection with your I&row No.
203048009-N77 without demand or coasiderotlon paid to The City of Carlsbrd for . same. Ypo are ~indemanQ& nd held bm adnst rpy loss. clau
vow rem ou
The cost of preparation, pmcessin g and recording, as applicable, of the above documents shall be paid by PGP C&bad Seniors, Ltd. JI, a California Limited Partnership at close
of escrow. In the event of cancellation of this escrow, the document(s) deposited herein
is/are be marked ‘cauctlcd’ and held in this file. Any other disposition of said document(s) requires the mutual written instruction of all parties hereto. The parties acknowledge that in preparing this document escrow holder is doing so only as an
- -4 0 .
JUN. 5. 2000 5:09PM CSICACO TITLE NO. 4565 P. II/i8
accommodation to the parties to complete the escrow rcfmnccd above and has not given
the parties any legal and/or tax advice of any nature.
APPROVED AND ACCEPTED BY:
PGP Carkbad Seniors Ltd. II, a Caliknia Limited Partnership a GeneraI Partnership, GcneraJ Par&n
MAV. 3. 2ooLr 9:43ld WL4i;O TITLE !JO.3551 P. 34/25 -
EXHIBIT 3
Chicago Title Company - Park Camino Branch ”
3703 Camino Det Rio So,, # 100, San Diego, CA 92108
Phone (619) 282-3200
“USE OF DOCUMENTS” INSTRUCTIONS AND INDEMNIFICATION
DATE:
TO: Chicego Title Co.-Park Camino Branch
PROM: The City of Carlsbad
I hand you herewith the following ORIGINAL Subordination Agreement dated
executed by The City of Carlsbad.
Such document(s) affect(s) my interest in the real property which is commonly lmown as
2848 Jefferson Street, Carlsbad, CA, and legally described as:
Lots 14, 15, 16, 17 and 18 of Schell and Sites Addition to Carlsbad, in the City of
Carlsbad, County of San Diego, State of California, according to Map thereof No. 2145,
filed in the Office of the County Recorder of San Diego County, February 20,1929.
The City of Carlsbad understands that the execution of the Subordination Agreement will
result in its security interest of in the property becoming subject to and of lower priority
than the lien of the new security interest being obtained by new lender. The City of
Carlsbad (i) consents to and approves all provision of the note and deed of trust in favor of new Lender, (ii) has satisfied itself regarding the purpose of the funds being obtained
and the manner in which any/all funds may be expended, and (iii} acknowledges it has
been advised to seek the advise of its own independent counsel regarding all ramifications regarding its execution of this document.
You are authorized to use the above document(s) in connection with your Escrow No.
20304800!9-N77 without demand or consideration paid to The City of Carlsbad for
Same. Dndemnified and held harmless against anv loss. claim, oy liabilitv amvour compliance with these instructions and vour reliance OQ
these instructk&s with mature of the undersipned.
The cost of preparation, processing and recording, as applicable, of the above documents shall be paid by PGP Carlsbad Seniors, Ltd. II, a California Limited Partnership at close of escrow. In the event of cancellation of this escrow, the document(s) deposited herein
is/are be marked ‘canceled’ and held in this file. Any other disposition of said
document(s) requires the mutual written instruction of ail parties hereto. The parties acknowledge that in preparing this document escrow holder is doing so only as an
MAY 3. 2ooc 9: !%i CHlXi;O TITLE
accommodation to the parties to complete the escrow referenced above and has not given
the parties any legal and/or tax advice of any nature.
The City of Carlsbad
By:
Its:
By:
Its:
APPROVED AND ACCEPTED BY:
PGP C&bad Seniors Ltd. II, a California Limited Partnership
By: Pacific Growth Properties, a California General Partnership, General Partner
By:.
John E. Michaelsen, Partner By:
James T. Gianulis, Partner
By:
Frank R. Berlage, General Partnet
-EXHIBIT 4
PROMISSORY NOTE
$1.573,392.00 San Diego, California, Februarv 6, 1991
FOR VALUE RECEIVED, the undersigned promises to pay to the CITY OF
CARLSBAD, at Cansbad, California, the sum of $3,840,855.74 with interest at the rate
of ten percent (10%) per annum simple interest until paid or canceled as herein
provided.
This note is given to the city of Carlsbad pursuant to Section 21.18.045 of the
Carlsbad Municipal Code to insure that the maker hereof constructs, operates and
maintains the property described in the deed of trust secured hereby as a Senior
Citizens Housing Project in accordance with the requirements of said Section and
Conditional use Permit 86-3, or if not so constructed, operated and maintained, that the
property is brought up to the standards of the approved conversion plan pursuant to
CUP 86-3 or any other conversion plan approved by the City of Carlsbad.
No payment shall be required on this note except as follows:
1. If the Council of the City of Carlsbad or any successor thereto determines that the property is being operated or maintained in violation of any of the terms of said
Section 21.18.045 or said Conditional Use Permit 86-3, or used for other than a Senior
Citizens Housing Project without the consent of the City Council, the City Council may
declare the whole sum of principal and any accrued interest thereon immediately due
and payable. The maker hereof shall then have the option to elect to pay said principal
and accrued interests in full or within a reasonable time thereafter to convert the project
to meet the approved conversion plan pursuant to CUP 86-3 or any other conversion
plan approved by the City of Carlsbad. Upon said payment in full or conversion of the project to the approved conversion plan pursuant to CUP 86-3 or any other conversion
plan approved by the City of Carlsbad, the City of Carlsbad shall return this note to the
maker and reconvey the lien of the deed of trust securing this note.
2. The entire principal and accrued interest thereon shall become
immediately due and payable at the option of the City of Carlsbad in the event that upon
the sale, conveyance or other disposition of the property described in the deed of trust
securing this note, the buyer fails to agree in writing to accept and abide by all the terms
and provisions of this promissory note.
The maker hereof shall have the right at any time to prepay all or any part of this note or to elect to covert the property to meet the approved conversion plan
pursuant to CUP 86-3 or any other conversion plan approved by the City of Carlsbad.
Upon prepayment in full or such conversion of the property, this note shall be canceled
and the lien of the deed of trust securing this note shall be reconveyed to the maker hereof.
This note is given solely to conform with the provisions of said Section
21.18.045 of the Carlsbad Municipal Code, and neither the maker nor any partner, offricer, agent or employee of the maker shall have personal liability for payment of this
note. The holder hereof shall look only to its interest in the property secured hereby for payment.
If action be instituted on this note, the undersigned promises to pay such
sum as a court may affix as attorneys’ fees. This note is secured by a deed of trust to
SMS Trust Deed Service, a California corporation, as Trustee.
The undersianed acknowledaes and accepts that is note is a duolication
of the oreviouslv executed note and herebv reelaces the oreviouslv executed note dated
Februarv 6. 1991. in the amount of $1.573.392.04
PGP CARLSBAD SENIORS LTD. II, a California
Limited Partnership
BY: Pacific Growth Properties, a General
Partnership, General Partner
By:
John E. Michaelsen, General Partner
By:
James T.Gianulis, General Partner
By:
Frank R. Berlage, General Partner
13