HomeMy WebLinkAbout2000-12-12; City Council; 15996; Pacific Vista Las Flores 28 Apartment Units- qcj CITY OF CARLSBAD -AGENDA BILL
AB# 6; 99 6~ TITLE: REQUEST FOR ADDITIONAL FINANCIAL DEPT. HD.
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ASSISTANCE AND APPROVAL OF A LOAN AGREEMENT ?i%- BETWEEN THE CITY OF CARLSBAD AND PACIFIC VISTA CITYATTY.
LAS FLORES, L.P. TO ASSIST THE CONSTRUCTION OF 28
DEPT. H/RED AFFORDABLE APARTMENT UNITS CITY MGR.
I RECOMMENDED ACTION:
That the City Council ADOPT City Council Resolution No.&00 ,375 , APPROVING a request by
Pacific Vista Las Flores, L.P., for additional financial assistance in the amount of $36,193 from the City of
Carlsbad’s Housing Trust Fund; and APPROVING a Loan Agreement, Promissory Note, Deed of Trust
and Security Agreement and Regulatory Agreement and Declaration of Restrictive Covenants between
the City of Carlsbad and Pacific Vista Las Flores, L.P., for the development of the 28 unit Vista Las Flores
Affordable Apartment Project.
I ITEM EXPLANATION
The Vista Las Flores affordable apartment project is a development that will consist of 28 apartment units
affordable to low and very-low income households. In July of 1999, the City Council agreed to provide a
maximum loan of $462,755 to assist in the development of the project (City Council Resolution No. 99-
254). As a condition of the City’s assistance, the Developer (Wakeland Housing & Development
Corporation) was required to apply for additional funding from the Federal Home Loan Banks Affordable
Housing Program (AHP). The City’s financial assistance contribution was to be reduced by the amount of
the AHP contribution. The Developer was successful in receiving $135,000, and the City’s loan amount
was reduced accordingly.
Development of Vista Las Flores will satisfy the inclusionary housing requirement for the larger 146-unit
Mariano Development immediately adjacent to this project. The project site is graded, and the Developer
intends to pull building permits for the subject affordable housing project within the next 30 days.
At the time the project was originally approved for financial assistance from the City, the Developer was
proposing to finance the project in part with funds received from the 9% Federal Tax Credit Program.
Since that time, the Developer has been unsuccessful in three attempts to secure the 9% credits. The
Developer is now applying for funding under the somewhat more certain 4% Tax Credit Program. By
changing to the 4% program, the amount of tax credit equity raised for the project will be significantly less
than that of the 9% program. To account for this shortfall, the rent levels for the project have been slightly revised. Under the original proposal, the average level of affordability was 43% of the San Diego County
Area Medium Income (AMI). Under the new proposal, the average affordability level will be 53% of AMI.
Staff believes that the revised affordability remains acceptable and the original financial assistance
approved by the Council remains appropriate with the reduction as noted.
I Additional Financial Assistance
Similar to all new developments in the City, a condition of project approval requires the payment of the
Public Facilities Fee (PFF) prior to the issuance of any building permit. At this time, the Developer is
requesting that the PFF be waived (see Exhibit 3), as is permitted by City Council Policy No. 17 and Chapter 5.09 of the Carlsbad Municipal Code. The Developer is also required to pay a fee for Bridge and
Thoroughfare District (BTD) #2, prior to the issuance of a building permit. The Developer’s letter requests
that the BTD fee be deferred and repaid from cash flow generated by the project over a period of 40 years. These requests are being made due to increased construction costs for the project.
It is staffs general opinion that the City fees should be paid whenever possible and waived only if no other
options are available to assist an affordable housing project. In some past instances, the PFF has been waived for affordable housing projects per City Council Policy No. 17 and Chapter 5.09 of the Carlsbad Municipal Code. However, more recently (i.e. Laurel Tree), it has been staffs recommendation to use
Page 2 of Agenda Bill No. 6,996
Housing Trust Funds to provide additional financial assistance to a project to pay the PFF rather than
waive it. The Affordable Housing Policy Team (staff) is again recommending that the PFF not be waived
and that additional financial assistance in the amount of $36,193 be provided from the Housing Trust
Fund for the subject project. With regards to the requested deferral of the fee for Bridge and Thoroughfare
District #2, there is neither a Council Policy nor City Ordinance that would support such a request. In
addition, the deferral of the fee would place a significant financial burden on the entire district. Therefore,
staff does not support this request.
Proiect Aqreements
As mentioned above, in July of 1999, the City Council authorized a commitment of financial assistance in
the amount of $327,755 ($11,705 per unit), to be paid from the City’s Housing Trust Fund. The City’s
assistance is structured as a residual receipts loan, with the loan being repaid from the cash flow
generated by the project. The term of the loan is 55-years.
In order for the project to receive the funding, the Developer is required to enter into loan and regulatory
agreements with the City of Carlsbad. These agreements and related documents are attached for review.
As one of the actions set forth within this report, the City Council is being asked to approve, in
substantially the form presented, the Loan Agreement, Deed of Trust, Promissory Note and Regulatory
Agreement which are all attached as Exhibit 2 for review. These documents are explained below:
7. Loan Agreement states the terms and conditions relating to the City’s loan.
2. Regulatory Agreement records the terms of affordability and the operation requirements for the
project.
3. Promissory Note is executed by the Developer and expresses their intent to repay the loan.
4. Deed of Trust is recorded against the property to secure the City’s interest in the subject property and
related improvements.
Subordination of Citv Aqreements
It is important to note that by approving the subject agreements, the Council is also agreeing to
subordinate the City’s loan and agreements to the lien of deeds of trust securing the construction and
permanent financing provided by a private lender. If approved, the attached resolution authorizes the City
Manager, or his designee, to execute subsequent subordination agreements. While the subordination documents will not return to the City Council for review, Staff will take the necessary steps to insure that
the documents provide the City with adequate notice and cure ability. The subordination documents will be reviewed by, and be subject to final approval by, the City Attorney.
FISCAL IMPACT
Through a previous action, the City Council approved financial assistance in the total amount of $327,755
for the subject property. If the subsequent request is approved, the proposed additional financial assistance of $36,193 will increase approved loan amount to $363,948. This action will result in financial
assistance of approximately $13,000 per affordable housing unit. The additional funds ($36,193) will be provided from the City of Carlsbad’s Housing Trust Fund, which has a current undesignated fund balance
of approximately $1.9 million. As stated above, the loan will be in the form of a residual receipts loan and
will be repaid over 55 years.
EXHIBITS
1. City Council Resolution No. amo l 3 75
2. Developer’s letter requesting waiver of the Public Facilities Fee
3. Loan Agreement, Promissory Note, Deed of Trust and Security Agreement, Promissory Note, and
Regulatory Agreement and Declaration of Restrictive Covenants.
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RESOLUTION NO. 2000-375
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, APPROVING A REQUEST BY PACIFIC
VISTA LAS FLORES, L.P. FOR ADDITIONAL FINANCIAL
ASSISTANCE IN THE AMOUNT OF $36,193 FROM THE CITY OF
CARLSBAD’S HOUSING TRUST FUND, AND APPROVAL OF A
LOAN AGREEMENT, PROMISSORY NOTE, DEED OF TRUST AND
SECURITY AGREEMENT, AND REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS BETWEEN THE
CITY OF CARLSBAD AND PACIFIC VISTA LAS FLORES FOR THE
DEVELOPMENT OF THE 28 UNIT VISTA LAS FLORES
AFFORDABLE APARTMENT PROJECT.
APPLICANT: PACIFIC VISTA LAS FLORES,, L.P.
CASE NO: SDP 97-16
WHEREAS, a project known as the Vista Las Flores Apartments has been approved by the City
of Carlsbad City Council for construction of 28 apartment units which will provide housing affordable to
low and very low income households; and
WHEREAS, on July 13, 1999, the City of Carlsbad City Council authorized the appropriation of
$327,755 from the Housing Trust Fund for the purposes of providing financial assistance for construction
of new affordable rental housing units within the proposed Vista Las Flores Project; and
WHEREAS, Pacific Vista Las Flores, L.P., has submitted a request to the City of Carlsbad for
additional financial assistance for the Vista Las Flores Project; and
WHEREAS, on December 12, 2000, the City Council of the City of Carlsbad held a public
meeting to consider the request for additional financial assistance and to approve the related loan
documents; and
WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all
persons desiring to be heard, said Council considered all factors relating to said request for financial
assistance and loan documents.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. The above recitations are true and correct.
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2. The City Council hereby APPROVES a request by Pacific Vista Las Flores, L.P., for
additional fmancial assistance in the amount of $36,193 from the City of Carlsbad’s Housing
Trust Fund, and approval of the Loan Agreement, Promissory Note, Deed of Trust and
Security Agreement, Promissory Note, and Regulatory Agreement and Declaration of
Restrictive Covenants for the development of the 28 unit Vista Las Flores Affordable
Apartment Project.
3. That the City Council authorizes the City Manager or his/her designee to execute all
documents related to provision of the additional City financial assistance, including but not
limited to the Loan Agreement, Promissory Note, Deed of Trust and Security Agreement,
Promissory Note, and Regulatory Agreement and Declaration of Restrictive Covenants in
substantially the form presented to the City Council, and subject to review and approval by
the City Attorney.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the
City of Carlsbad, California, held on the e day of December, 2000 by the following vote, to wit:
AYES: Council Members Lewis, Hall, Finnila, Nygaard and Kulchin.
NOES: None
ABSTAIN: , None
CLAUDE A. L
ATTEST:
+LJ7 .%
WOOD, CITY CLERK
(SEW
3-2 RESO NO. 2000-375
PAGE2
-6XHIBIT 2
Housing and Development Corporation
November 14,200O
707 Broadway, Suite 1230
Box 34, San Diego, CA 92101
Telephone (619) 235-2296
Facsimile (619) 235-5386
Ms. Debbie Fountain RECEIVED
City of Carlsbad, Housing & Redevelopment
2965 Roosevelt Street, Suite B NOV 15 2000 Carlsbad, CA 92008-2389
Subject: Vista Las Flores Public Facilities Fees - Request for Waiver and Deferral
Dear Debbie:
Thank you for your assistance in getting the latest affordable housing project underway. Grading on the
Vista Las Flores Project was started on November 3,200O and we are anxiously looking forward to its completion next year. We expect to pull building permits within the next few weeks.
As you are aware, we were not successful in attempts to obtain tax credit funding and as a result are using
a combination of private and CHFA bond funding. Bond financing has allowed us to increase the rental
rate from 47% to 53% of median income. This will partially offset the recent $130,000 reduction in City financial participation.
It is our understanding that it is possible to request a waiver of public facilities fees pursuant to subsection
5(e) of City Council Policy Statement #17. We have calculated a total of $36,193.02 in Public Facilities
Fees (subject to City confirmation) that could be waived at time of building permit issuance.
We are also requesting to defer the Bridge & Thoroughfare District #2 fee. We have calculated a total of $95,088.00 in Bridge & Thoroughfare District #2 Fee that would be required to be paid at time of
building permit issuance (fee subject to confirmation of the Building Department). This deferral amount
would assist greatly in closing the gap created by the reduction in City participation, and would ultimately
be paid from project revenue.
Our most recent pro forma indicates that the project will begin to generate revenue for payment of the
deferred B&TD #2 fee after year 2006. The deferred amount would be totally be repaid by year 2033.
It is requested that the deferral and waiver requests be processed at your earliest convenience so that we
can avoid delays relating to cash flow. Thank you in advance for your assistance. If you have any
questions or need additional information, please feel free to contact me at (619) 235-2296.
Sincerely,
Kenneth L. Sauder
Executive Director
Wakeland Housing & Development,
General Partner, Pacific Vista Las Flores, LP
5
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I
City of Carlsbad
February 26,200l
Renee Marshall, Escrow Officer
Chicago Title Company
925 “B” Street
San Diego, CA 92101
PICKED UP BY: .R@E~~ rB
DATE: 6 3/&/b h
TIME:
Subject: Vista Las Flores Apartments- Carlsbad, California
Escrow No. 20307163 1
Dear Renee Marshall:
This letter constitutes the escrow instructions of the City of Carlsbad, a municipal
corporation (the “City”) in connection with financing to be provided by the City to Carlsbad
Pacific Vista Las Flores, L.P., a California limited partnership (the “Borrower”). Through this
escrow, the City will provide a loan to the Borrower to finance the construction by the Borrower
of twenty-eight (28) apartments (the “improvements”) on certain property located in the City of
Carlsbad and described in Exhibit A attached hereto (the “Land”). These instructions are to be
read in conjunction with separate escrow instruction from the Borrower and fkom Bank of
America (the “Bank”).
I Loans Through This Escrow.
A. The City will make a Three Hundred Sixty-Three Thousand Nine Hundred Forty-
Eight Dollar ($363,948) loan to the Borrower (the “City Loan”), which will be evidenced by a
promissory note secured by a second deed of trust on the Property.
B. Bank of America (the “Bank”) will make a construction loan to Borrower in the
approximate amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the “Bank
Loan”), which will be evidenced by a promissory note secured by a first deed of trust on the
Property.
C. Standard Pacific Homes will make an approximately Two Million Five Hundred
Thousand Dollar ($2,500,000) loan to the Borrower (the “Developer Loan”), which will be
evidenced by a promissory note secured by a deed of trust on the Property.
2~#%%%lt St., Ste. B l Carlsbad, CA 92008-2389 - (780) 434-2810/2811 - FAX (780) 720-2037 a9
Renee Marshall
Chicago Title
February 26,200l
Page 2
D. Downey Savings will make a loan to Borrower in the approximate amount of One
Hundred Thirty-Five Thousand Dollars ($ 135,000) which will be evidenced by a promissory
note secured by a deed of trust on the Property (the “Downey Deed of Trust”).
II. Deposit of Documents into Escrow.
A. The City, the Bank, Standard Pacific and the Borrower will deposit the following
documents into this Escrow (the “Escrow Documents”):
1. The deed of trust executed by the Borrower as trustor to Chicago Title
Company as trustee for the benefit of the City, to secure a note from the
Borrower to the City in the principal amount a Three Hundred Sixty-Three
Thousand Nine Hundred Forty-Eight Dollar ($363,948) (the “City Deed of
Trust”);
2. The Regulatory Agreement and Declaration of Restrictive Covenants
executed by the Borrower and the City (the “City Regulatory
Agreement”);
3. The deed of trust executed by the Borrower as trustor in favor of the Bank
as Beneticiary, to secure a promissory note executed by the Borrower in
favor of the Bank in the approximate principal amount of One Million Five
Hundred Thousand Dollars ($1,500,000) (the “Bank Deed of Trust”);
4. Subordination Agreement between the Borrower, the City, and the Bank
(the “City/Bank Subordination Agreement”);
5. Downey Deed of Trust;
6. SPH Deed of Trust.
III. Conditions of Closing.
You may close this Escrow only upon fulfillment of all of the following conditions:
A. You hold the documents referred to in Section II above, duly executed and
acknowledged where required, with all appropriate exhibits attached;
B. You have met all of the requirements of the Borrower, the Bank, and the City
pursuant to their escrow instructions (as applicable);
C. You are prepared and unconditionally committed to deliver to the City a 1992
ALTA LP-10 Lender’s Policy on the Property naming the City as insured in the amount of Three
1010\11\140358.2
Renee Marshall
Chicago Title
February 26,200l
Page 3
C. You are prepared and unconditionally committed to deliver to the City a 1992
ALTA LP-10 Lender’s Policy on the Property naming the City as insured in the amount of Three
Hundred Sixty Three Thousand Nine Hundred Forty-Eight Dollars ($363,948) subject only to the
liens of the Bank Deed of Trust, and exceptions numbers l-25,29 and 30 on the preliminary title
report for the Property issued by your company and dated December 6,200O (the “Title Report”),
and with the following CLTA endorsements: modified 100, 102.5 (to be issued at a later date),
116 (to be issued at a later date), 101.6 (to be issued at a later date) and a rewrite of the policy
following completion of the Project and close of permanent financing (the “City Policy”). The
City Policy shall not be subject to mechanics liens rights arising from any work that may
have commenced on the Property prior to recordation of the City Deed of Trust.
D. You have contacted or left a voice message with the City’s representative Craig
Ruiz at (760) 434-28 17, confirming that all conditions of closing required by the City have been
satisfied.
Iv. Recording Requirements.
A. Please insert all dates where there are blanks in the Escrow Documents and
attached correct legal descriptions where appropriate.
B. The City Deed of Trust and City Regulatory Agreement are to be recorded at no
charge pursuant to California Government Code Section 27383. If a recording fee is charged by
the Recorder of the County of San Diego, you are to pay the recording fee and be reimbursed
through this Escrow.
C. Upon meeting the conditions of closing in Section III above, you are instructed to
immediately record in the Official Records of the County of San Diego the following documents
(collectively, the “Record Documents”), in the order set forth below:
1. Bank Deed of Trust;
2. City/Bank Subordination Agreement;
3. City Regulatory Agreement;
4. City Deed of Trust;
5. Downey Deed of Trust; and
6. SPH Deed of Trust.
Immediately upon recordation of the Record Documents, you are instructed to notify, by
telephone, Craig Ruiz at (760) 434-28 17.
1010\11\140358.2
Renee Marshall
Chicago Title
February 26,200l
Page 4
V. Delivery of the Recorded Documents and Policies.
You are instructed to deliver the following documents, which, where applicable, are to
include recording information certified as correct by Chicago Title Company, within seventy-two
(72) hours of the close of escrow:
A.
Policy to:
Copies of all Escrow Documents, the two originals and one copy of the City
Craig Ruiz
Housing and Redevelopment Department
City of Carlsbad
2965 Roosevelt Street, Suite B
Carlsbad, California 92008
VI. Costs, Fees, and Premiums.
All costs, fees, and premiums associated with this Escrow will be paid by the Borrower.
VII. Internal Revenue Code Requirements.
You shall be responsible for complying with the requirements of Section 6045(e) of the
Internal Revenue Code of 1986, as amended, and Section 18802.10 of the California Revenue
and Taxation Code.
VIII. Amendment, Modification or Revocation.
These instructions may be revoked, amended or modified in writing by the City at any
time prior to the close of escrow. The City authorizes the Community Development Director of
the City to sign any revocation, supplement, amendment or modification to these instructions on
its behalf.
Please acknowledge your agreement to and acceptance of these instructions by signing
the enclosed copies of this letter and returning one copy to Craig Ruiz at the City.
1010\11\140358.2
Rekee Marshall
Chicago Title
February 26,200l
Page 5
Thank you for your assistance.
Sincerely,
CITY OF CARLSBAD, a municipal corporation
The undersigned acknowledges receipt of the above instructions and agrees to proceed in strict
accordance therewith.
CHICAGO TITLE COMPANY
By:
APPROVED AS TO FORM:
ROW R BALL, City Attorney
&uty City Attorney
1010\11\140358.2
EXHIBIT A
The Property referred to is situated in the State of California, County of San Diego, City of
Carlsbad, and described as follows:
See Attached
1010\11\140358.2 A-1
LOT 134 OF CITY OF CARLSBAD TRACT 97- 14, UNIT
NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 13840, FILE IN THE OFFICE OF
THE COUNTY RECORDER OF SAN DIEGO COUNTY,
SEPTEMBER 1,1999
LOAN AGREEMENT
BY AND BETWEEN
The City Of Carkbad
and
Pacific Vista Las Flores, L.P.,
a California limited partnership
December 15,200O
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND EXHIBITS .............................................................................. .l
1.1 Definitions ..................................................................................................................... 1
1.2 Exhibits ......................................................................................................................... 2
ARTICLE 2 LOAN .......................................................................................................................... 3
2.1 Amount . ........................................................................................................................ 3
2.2 Interest.. ......................................................................................................................... 4
2.3 Repayment . ................................................................................................................... 4
2.4 Prepayment ................................................................................................................... 5
2.5 Assumption ................................................................................................................... 6
2.6 Loan Disbursement ....................................................................................................... 6
2.7 Use of Loan Proceeds ................................................................................................... 6
2.8 Security for Loan. ......................................................................................................... 6
2.9 Approval of Additional Financing ................................................................................ 6
2.10 Subordination of Deed of Trust .................................................................................. 6
2.11 Subordination of the City Regulatory Agreement. ..................................................... 6
2.12 Reports and Accounting of Surplus Cash. .................................................................. 6
2.13 Developer Fee ............................................................................................................. 7
2.14 Use of Net Proceeds of Permanent Financing. ........................................................... 7
ARTICLE 3 DISBURSEMENT OF LOAN .................................................................................... 8
3.1 Conditions Precedent to Disbursement of Loan Proceeds ............................................ 8
3.2 Procedure for Disbursement of Loan Proceeds ............................................................. 9
ARTICLE 4 DEVELOPMENT OF THE IMPROVEMENTS ...................................................... 10
4.1 Commencement of Construction ................................................................................ 10
4.2 Completion of Construction ........................................................................................ 10
4.3 Construction Pursuant to Plans ................................................................................... 10
4.4 Construction in Compliance with Law ....................................................................... 10
4.5 Changes in Development Budget ................................................................................ 10
4.6 Entry by the City ......................................................................................................... 10
4.7 Equal Opportunity ....................................................................................................... 11
4.8 Mechanics Liens, Stop Notices, and Notices of Completion.. .................................... 11
4.9 Certificate of Completion. .......................................................................................... 11
ARTICLE 5 REPRESENTATIONS AND WARRANT IES OF BORROWER.. ........................ .12
5.1 Representations and Warranties. ................................................................................. 12
ARTICLE 6 CONTINUING OBLIGATIONS ............................................................................. .12
6.1 Applicability. .............................................................................................................. 12
6.2 Compliance with Loan Documents ............................................................................. 13
6.3 Rental of Units ............................................................................................................ 13
6.4 Required Insurance Coverage ..................................................................................... 13
6.5 Insurance Policies and Premiums. .............................................................................. 13
6.6 Proceeds of Insurance. ................................................................................................ 14
December 15,200O
. .
6.7 Taxes and Assessments ............................................................................................... 14
6.8 Compliance with Laws. .............................................................................................. 14
6.9 Changes.. ..................................................................................................................... 14
6.10 Notification of Litigation .......................................................................................... 14
6.11 Indemnity. ................................................................................................................. 14
6.12 Hazardous Materials. ................................................................................................ 15
6.13 Non-Discrimination. ................................................................................................. 16
6.14 Mandatory Language in All Subsequent Deeds, Leases and Contracts.. .................. 16
6.15 Records . .................................................................................................................... 17
6.16 Transfers. .................................................................................................................. 17
ARTICLE 7 DEFAULT AND REMEDIES .................................................................................. 18
7.1 Events of Default ........................................................................................................ 18
7.2 Remedies ..................................................................................................................... 20
7.3 Right of curltl& .......................................................................................................... 21
7.4 Remedies Cumulative ................................................................................................. 21
7.5 Waiver of Terms and Conditions ................................................................................ 21
ARTICLE 8 MISCELLANEOUS ................................................................................................. 22
8.1 Time ............................................................................................................................ 22
8.2 Force Majeure ............................................................................................................. 22
8.3 Notices ........................................................................................................................ 22
8.4 Attorneys’ Fees ............................................................................................................ 22
8.5 No Third Parties Benefited. ........................................................................................ 23
8.6 Actions ........................................................................................................................ 23
8.7 Signs ............................................................................................................................ 23
8.8 Successors and Assigns ............................................................................................... 23
8.9 Construction of Words ................................................................................................ 23
8.10 Partial Invalidity ........................................................................................................ 23
8.11 Governing Law ......................................................................................................... 23
8.12 Amendment ............................................................................................................... 23
8.13 Captions and Headings, ............................................................................................ 23
8.14 Action by the City ..................................................................................................... 24
Exhibit A - Legal Description of the Land
Exhibit B - Permitted Uses of Loan Proceeds
Exhibit C - Form of Certificate of Completion
December 15,200O ii
CITY LOAN AGREEMENT
This City Loan Agreement (“the Agreement”) is entered into as of February 28, 2001,
by and between the City of Carlsbad (the “City”) and Pacific Vista Las Flares, L.P: a California
limited partnership (the “Borrower“).
RECITALS
1. Pursuant to Title 21, Chapter 21.85 of the Carlsbad Municipal Code, the City has
established a Housing Trust Fund administered by the City and used for the purpose of providing
funding assistance for the provision of affordable housing consistent with the policies and
programs contained in the Housing Element of the City’s General Plan.
F
2. Borrower desires to construct twenty-eight (28) residential units in the City of
Carlsbad, of which at least fourteen (13) shall be rented to very low income households at
affordable housing cost and the remainder, excluding a manager’s unit, shall be rented to
moderate income households at affordable housing cost.
3. The City desires to provide financial assistance to Borrower for development
costs in the form of a loan for a total amount not to exceed Three Hundred Sixty Three Thousand
Nine Hundred Forty-Eight Five Dollars ($363,948) (the “City Loan”). The funds utilized to fund
the City Loan are Housing Trust Fund monies and are not federal funds or the proceeds of a tax-
exempt bond issue.
The City intends to utilize the development to obtain affordable housing
producttn credits for the Agency pursuant to Health and Safety Code Section 33413(b)(2)(A)(ii)
as newly constructed housing units located outside of the Carlsbad Village Redevelopment Area
(the “Redevelopment Area”) and available at affordable housing cost to low and moderate
income households. Such units are required to remain affordable to such households for not less
than the period of the land use controls established in the Redevelopment Plan for the
Redevelopment Area. This Agreement and the accompanying City Regulatory Agreement are
also intended to implement this requirement.
ARTICLE 1
DEFINITIONS AND EXHIBITS
1.1 Definitions. The following terms shall have the following meanings in this
Agreement:
(4 “Agreement” shall mean this City Loan Agreement.
(b) “Agency” shall mean the Carlsbad Redevelopment Agency, Carlsbad,
California, a public body corporate and politic.
December 15,200O 1
(4 “Borrower” shall mean Pacific Vista Las Flores, L.P. a California limited
partnership.
(4 of this Agreement.
“Certificate of Completion” shall have the meaning set forth in Section 4.8
(0 “City Deed of Trust” shall mean the deed of trust to be placed on the
Development, in a form to be provided by the City, securing the City Note and naming the City
as beneficiary.
(g) “City Loan” shall mean the loan for an amount not to exceed Three
Hundred Sixty Three Thousand Nine Hundred Forty-Eight Five Dollars ($363,948) by the City
to Borrower, which loan is the subject of this Agreement.
O-4 “City Note” shall mean the promissory note, in a form to be provided by
the City, in the principal amount of Three Hundred Sixty Three Thousand Nine Hundred Forty- Eight Five Dollars ($363,948), evidencing the City Loan.
(0 “City Regulatory Agreement” shall mean the City Regulatory Agreement
in a form to be provided by the City to be recorded against the Development pursuant to Section
3.1 below.
6) . “Construction and Permanent Financing” shall mean any of the following
financing acquired by the Borrower for the purpose of financing the Improvements and approved
by the City, in addition to the City Loan:
G>
(ii)
(iii)
(3
Bank of America construction loan in an amount not to exceed One
Million Five Hundred Thousand ($1,500,000) and
California Housing Finance Agency or other permanent loan(s) in the
approximate total amount of One Million Three Hundred Fifteen
Thousand (Sl,3 15,000); and
Tax credit investor equity funds in the approximate amount of One
Million Four Hundred Thirty-Two Thousand Twenty-Two Dollars
($1,432,022).
Standard Pacific construction and permanent loan in the approximate
amount of Two Million Five Hundred Thousand Dollars ($2,500,000).
(1) “Development” shall mean the Land and Improvements to be constructed
on the Land.
b-4 “Improvements” shall mean the buildings and improvements to be
constructed on the Land, including the Units, and the parking spaces and landscaping
appurtenant to such buildings and improvements.
December 15,200O 2
(4 “Land” shall mean the property on which the Borrower shall construct the
Improvements, which property is more particularly described in Exhibit A attached hereto and
incorporated herein.
(0) “Limited Partner” shall mean the then existing limited partner of
Borrower, including Edison Capital Housing Investments, if and when admitted as a limited
partner of Borrower, and its successors and assigns, provided the limited partner has given the
City written notice of its name and address and that it has been admitted as a limited partner to
the Borrower.
(PI “Loan Amount” shall mean the amount loaned to Borrower pursuant to
Section 2.1 below.
(9) “Loan Documents” shall mean the following documents evidencing the
City Loan: (i) the City Note; (ii) the City Regulatory Agreement; (iii) the City Deed of Trust;
(iv) this Agreement.
(0 “Parties” shall mean the City and the Borrower.
@I “Term” shall mean the term of the City Loan commencing on February 28,
2001 and ending fifty-five (55) years following the date of issuance of a
certificate of occupancb for all Units in the Development.
0) “Unit” shall mean one of the twenty-eight (28) dwelling units located
within the Development.
1.2 Exhibits, The following Exhibits are attached to this Agreement and incorporated
herein:
Exhibit A - Legal Description of the Land
Exhibit B - Permitted Uses of Loan Proceeds
Exhibit C - Form of Certificate of Completion
ARTICLE 2
LOAN
2.1 Amount. The City hereby agrees to loan, and the Borrower hereby agrees to
borrow, an amount not to exceed Three Hundred Sixty Three Thousand Nine Hundred Forty-
Eight Five Dollars ($363,948), subject to the terms and conditions set forth in this Agreement,
and subject further to the terms and conditions set forth within the documents and instruments
executed by the Borrower in connection with this transaction, including:
(a> The City Note;
The City Regulatory Agreement; and
December IS,2000 3
Cc) The City Loan Deed of Trust.
2.2 Interest. The outstanding principal amount of the Loan shall accrue simple
interest at three percent (3%) per annum.
2.3 Renavment.
(a) Repayment of the Loan shall be deferred during construction of the
Improvements. Commencing on the date of issuance by the City of a certificate of occupancy for
all Units in the Development, the outstanding principal and accrued interest on the City Loan
shall be amortized over the next fifty-five (55) years of the Term such that equal payments of
principal and interest (the “Arnortized Payments”) shall be due and payable on June 1”’ of each
calendar year, commencing on the first June 1” following the recordation of the deed of trust
securing the Permanent Loan; provided however, that the Amortized Payments shall be due and
payable only to the extent of seventy percent (70%) of Surplus Cash (as defined below)
generated by the Development in the previous calendar year.
09 “Surplus Cash” means, in a particular calendar year, the amount by which
Gross Revenue (as defined below) exceeds Annual Operating Expenses (as defined below).
(i) Gross Revenue. “Gross Revenue,” with respect to a particdar calendar
year, shall mean all revenue, income, receipts, and other consideration actually
received from operation and leasing of the Development. “Gross Revenue”
shall include, but not be limited to: all rents, fees and charges paid by tenants,
Section 8 payments or other rental subsidy payments received for the dwelling
units, deposits forfeited by tenants, all cancellation fees, price index
adjustments and any other rental adjustments to leases or rental agreements;
proceeds &om vending and laundry room machines; the proceeds of business
interruption or similar insurance; the proceeds of casualty insurance to the
extent not utilized to repair or rebuild the Development; and condemnation
awards for a taking of part or all of the Development for a temporary period.
“Gross Revenue” shall not include tenants’ security deposits, loan proceeds,
capital contributions or similar advances.
(ii) Annual Onerating Exmnses. “Annual Operating Expenses,” with respect
to a particular calendar year shall mean the following costs reasonably and
actually incurred for operation and maintenance of the Development to the
extent that they are consistent with an annual independent audit performed by
a certified public accountant using generally accepted accounting principles:
property and other taxes and assessments imposed on the Development;
premiums for property damage and liability insurance; utility services not paid
for directly by tenants, including but not limited to water, sewer, trash
collection, gas and electricity; maintenance and repair including but not
limited to pest control, landscaping and grounds maintenance, painting and
decorating, cleaning, common systems repairs, general repairs, janitorial,
supplies, and others; any annual license or certificate of occupancy fees
required for operation of the Development; general administrative expenses
including but not limited to advertising and marketing, security services and
4 December 15,200O
systems, and professional fees for legal, audit and accounting; property
management fees and reimbursements including on-site manager expenses,
not to exceed fees and reimbursements which are standard in the industry;
asset management/partnership management fees in an annual amount not to
exceed Twenty Thousand Dollars ($20,000) for the first nine (9) years of the
project and shall be increased by 3% per year thereafter; deferred developer
fees in an amount approved by the City; cash deposited into a reserve for
capital replacements of Development improvements and an operating reserve
in such reasonable amounts as are required by Development lenders and/or
equity investors, and approved by the City; and debt service payments on
financing for the Development approved by the City, including the financing
described above in Section 1.1(i) (excluding debt service due from residual
receipts or surplus cash of the Development). “Annual Operating Expenses”
shall not include the following: ground lease payments, depreciation,
amortization, depletion or other non-cash expenses or any amount expended
&om a reserve account.
6) In the event that seventy percent (70%) of Surplus Cash in any year is less
than the amount of the Amortized Payment due on June 1 of the following year, the difference
between the amount of seventy percent (70%) of Surplus Cash and the Amortized Payment shall be deferred, and shall be paid on the next June 1 when and to the extent Surplus Cash becomes
available. All payments on the City Loan shall be applied first to accrued, but unpaid, amounts
for prior years and then to the current Amortized Payment due, beginning with the earliest year
for which an Amortized Payment accrued.
03 In the event that seventy percent (70%) of Surphts Cash in any year
exceeds the amount necessary to make the Amortized Payment due on June 1 of the following calendar year, plus any amounts due pursuant to subsection (c) above, such excess amount shall
be paid to the City as prepayment of the City Loan. Such prepayment shall not reduce the
amounts of subsequent Amortized Payments due, except to the extent that the City Loan is fully
repaid.
(9 A mandatory partial prepayment of the City Loan may also occur pursuant
to Section 2.14 below. Such prepayment shall not reduce the amounts of subsequent Amortized
Payments due, except to the extent the City Loan is fully repaid.
@I Any portion of the principal and interest on the City Loan not sooner paid
shall be due and payable upon the earlier of: (i) the occurrence of an Event of Default hereunder;
(ii) expiration of the Term; or (iii) sale or transfer of the Development other than a transfer
described in Section 2.5 below.
(is) Repayment of the City Loan shall be nonrecourse to the Borrower as set
forth in Section 10 of the City Note, subject to the exceptions set forth therein.
2.4 Prenavrnent. Borrower may prepay the principal and any interest due the City
under the City Note prior to or in advance of the time for payment thereof as provided in the City
Note, without penalty; provided, however, that Borrower acknowledges that the provisions of the
December 15,200O 5
City Regulatory Agreement will be applicable to the Development throughout the term of the
City Regulatory Agreement even though Borrower may have prepaid the City Note.
2.5 Assumntion. The Loan shall not be assumable by any transferee, except a
transferee meeting the requirements of Section 6.16(c) below.
2.6 Loan Disbursement. Upon satisfaction of the preconditions to disbursement set
forth in Sections 3.1 below and pursuant to the disbursement procedures set forth in Sections 3.1
and 3.2 below, the City will disburse to Borrower the Loan Amount.
2.7 Use of Loan Proceeds. Borrower shall use Loan Proceeds only to pay the costs of
the items set forth in Exhibit B.
2.8 Security for Loan. The City Loan shall be secured by the City Loan Deed of
Trust on Borrower’s fse interest in the Land. The Borrower shall provide the City with a ALTA
lender’s policy of title insurance in an amount equal to the City’s loan, issued by Title Insurer, insuring the City Loan Deed of Trust as a lien against the Borrower’s fee interest in the Land,
subject only to the hen or liens of the Construction and Permanent Financing mortgages. The
City shall not accept any mechanics liens exceptions related to borrowers early start of
construction.
2.9 Approval of Additional Financing. The Borrower shall not place any
encumbrances on the Development other than the Construction and Permanent Financing without
the prior written consent of the City, which consent shall not be withheld unreasonably.
2.10 Subordination of Deed of Trust. The City agrees to subordinate the City Deed of
Trust to the lien of the deeds of trust securing the Construction and Permanent Loans.
2.11 Subordination of the Citv RePulatorv Agreement. The City agrees that the City’s
Housing and Redevelopment Manager shall subordinate the City Regulatory Agreement to the
lien or encumbrance of any private construction or permanent financing provided for the
Development upon the finding of the City’s Housing and Redevelopment Manager that (i) an
economically feasible loan is not reasonably available on comparable terms and conditions
without subordination, and (ii) the mortgage to which the City Regulatory Agreement is being
subordinated contains provisions meeting the requirements of Health and Safety Code Section
33334.14(a) reasonably designed to protect the City’s interests in the event of default under such
mortgage. The City agrees that the City Regulatory Agreement shall be subordinated to any
federal or state governmental agency regulating the Development which requires that the City
Regulatory Agreement be subordinate to such government agency’s documents and liens. The City will execute subordination agreements in a form reasonably acceptable to the City and the
lending entity or government agency requesting subordination of the City Regulatory Agreement
as provided in this Section.
2.12 Renorts and Accounting of Surplus Cash.
(4 Audited Financial Statement. In connection with the annual repayment of the
City Loan, the Borrower shall furnish to the City within one hundred and twenty (120) days after
the end of the Borrower’s fiscal year (ending June 30* of each year) an audited statement duly
December 15,200O 6
certified by an independent firm of certified public accountants approved by the City, setting
forth in reasonable detail the computation and amount of Surplus Cash during the preceding
calendar year.
(3) Books and Records. The Borrower shall keep and maintain at the location of the
General Partners, or elsewhere with the City’s written consent, full, complete and appropriate
books, records and accounts relating to the Development, including all such books, records and
accounts necessary or prudent to evidence and substantiate in full detail Borrower’s calculation of
Surplus Cash. Books, records and accounts relating to Borrower’s compliance with the terms,
provisions, covenants and conditions of this Agreement shall be kept and maintained in
accordance with generally accepted accounting principles consistently applied, and shall be
consistent with requirements of this Agreement which provide for the calculation of Surplus
Cash on a cash basis. All such books, records, and accounts shall be open to and available for
inspection at place of storage by the City, its auditors or other authorized representatives at
reasonable intervals during normal business hours and upon five (5) days prior written notice to
Borrower. Copies of all tax returns and other reports that Borrower may be required to furnish
any governmental agency shall at all reasonable times be open for inspection by the City at the
place that the books, records and accounts of the Borrower are kept and upon 5 days prior written
notice to Borrower. The Borrower shall preserve records on which any statement of Surplus
Cash is based for a period of not less than five (5) years after such statement is rendered.
2.13 Developer Fee. The maximum cumulative developer fee that may be paid to any
entity or entities providing development services to the Development, whether paid up-front or
on a deferred basis (at Borrower’s discretion), shall not exceed Three Hundred Thousand Dollars
($300,000).
2.14 Use of Net Proceeds of Permanent Financing.
00 For purposes of this Section 2.14, the term “Net Proceeds of Permanent
Financing” shall mean the portion of the Construction and Permanent Financing that is not
required to pay the costs of development of the Development (including but not limited to the
funding of reserves, and the developer fee, subject to the cap described in Section 2.13 above).
The Net Proceeds of Permanent Financing shall be utilized as follows:
(i) Borrower may retain one-half of the Net Proceeds of Permanent Financing
for any use it deems appropriate (subject to the limitations on developer fee set forth in Section
2.13 above) and which is approved by the City; and
(ii) One-half of the Net Proceeds of Permanent Financing shall be paid to the
City as a mandatory partial prepayment of the City Loan.
(cl The amount of the Net Proceeds of Permanent Financing shall be
determined by the Borrower and submitted to the City for approval on the date the Borrower
submits the final cost audit for the Development to the California Tax Credit Allocation
Committee. The Borrower shall also submit to the City any additional documentation sufficient
to verify the amount of the Net Proceeds of Permanent Financing. The City shall approve or
disapprove Borrower’s determination of the amount of the Net Proceeds of Permanent Financing
in writing within thirty (30) days of the City’s receipt of Borrower’s cost audit and supplemental
December 15,200O 7
documentation. If Borrower’s determination is disapproved by the City, Borrower shall re-
submit documentation to the City until City approval is obtained. The City’s one-half share of
the Net Proceeds of Permanent Financing shall be due the City from the Borrower no later than
five (5) days following the date v Borrower receives its final capital contribution from the
Borrower’s investor limited partner. As of the date of this Agreement, this final capital
contribution is expected to be received on February 1 ~003
ARTICLE 3
DISBURSEMENT OF LOAN
3.1 Conditions Precedent to Disbursement of Loan Proceeds. The City shall
not disburse Loan proceeds to the Borrower until all of the following conditions precedent are
satisfied.
(a) Budnet. Borrower shall have submitted to the City and obtained City
approval of a development budget for the Development, and the City has determined that the
undisbursed proceeds of the City Loan, together with other tids or fum commitments for funds
that the Borrower has obtained in connection with the Development, are not less than the amount
that the City determines is necessary to pay for the construction of the Development and to
satisfl all of the covenants contained in this Agreement.
09 Comorate Authorization; Good Standing. Borrower shall have provided
the City with a certified copy of a corporate authorizing resolution of the general partner of the
Partnership, approving the Loan and the Borrower’s execution of all Loan Documents, and with
evidence reasonably satisfactory to the City that the Borrower exists in good standing at the time
of the proposed disbursement.
W Purchase of Land. Pacific Vista Las Flores shall hold fee title to the Land.
(d) Close of Construction Loan. Borrower shall have closed the Construction
Loan, or such loan shall close concurrently with the City Loan.
(0 Execution. Delivery and Recordation of Documents. Borrower shall have
executed and delivered to the City the City Note, the City Deed of Trust, and the City Regulatory
Agreement, and any other documents and instruments required to be executed and delivered, all
in form and substance satisfactory to the City, and the City Deed of Trust and the City
Regulatory Agreement shall have been recorded against the Development.
(ii9 Insurance. Borrower shall have furnished the City with evidence of the
insurance coverage required pursuant to Sections 6.4 and 6.5 below.
00 Bonds. Prior to any disbursement for hard construction costs, the City has
received copies of labor and material (payment) bonds and performance bonds, or a dual bond
which covers both payment and performance obligations, with respect to the construction of the
Development in a penal sum each of not less than one hundred percent (100%) of the scheduled
cost of construction. Such bonds must be issued by an insurance company reasonable acceptable
to the City and must name the City as a co-obligee.
December 15,200O 8
(9 Construction Contracts. Prior to any disbursement for hard construction
costs, the City has received and approved all contracts that the Borrower has entered or proposed
to enter into for construction of the Development. All construction work and professional
services shall be performed by persons or entities licensed or otherwise authorized to perform the
applicable construction work or service in the State of California. Each contract that the
Borrower enters for construction of the Development shall provide that at least ten percent (10%)
of the costs incurred shall be payable only upon completion of said contractor’s construction
(unless an early release of retention or no retention for specified subcontractors has been
approved by the City) and shall include the nondiscrimination language set forth in Section 6.14
below. Approval of the construction contract by the City shall constitute City approval of any
early release of retention or no retention for specified subcontractors that is included in the
construction contract.
Cj) Approval of Loan Guarantees. Borrower shall have provided
documentation satisfactory to the City assuring that adequate funding exists to pay for all
construction costs.
(lc) No Default. There shall exist no condition, event or act constituting an
Event of Default (as hereinafter defined) hereunder or which, upon the giving of notice or the
passage of time, or both, would constitute an Event of Default.
3.2 Procedure for Disbursement of Loan Proceeds. Upon satisfaction of the
conditions set forth in Section 3.1 above, the City shall promptly, but in no event later than five
(5) business days after receiving Borrower’s written request and any required documentation
disburse the Loan Amount to Borrower from time to time, but in no event more than monthly (if
Borrower requests), upon receipt of written requests from the Borrower: (a) reaffirming the
accuracy as of the date of the disbursement request of Borrower’s representation, and warranties
set forth in Article 5 below; (b) certifying that Borrower is not in default under the City Loan
Documents or loan documents for other Construction and Permanent Financing; and (c) setting
forth the proposed uses of funds consistent with Section 2.7 above, the amount of funds needed,
and, where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred.
When a disbursement is requested to pay any contractor in connection with the Development, the
written request must be accompanied by certification by Borrower that the work for which
disbursement is requested has been completed (although the City reserves the right to inspect the
Development and make an independent evaluation), and lien releases andlor mechanics lien title
insurance endorsements reasonably acceptable to the City.
December 15,200O 9
ARTICLE 4
DEVELOPMENT OF THE IMPROVEMENTS
4.1 Commencement of Construction. Subject to Section 8.2 below, the Borrower
hereby covenants and agrees to commence construction of the Development no later than thirty
(30) days following the recordation of the City Deed of Trust.
4.2 Completion of Construction. The Borrower hereby covenants and agrees to
diligently prosecute to completion the construction of the Development within fifteen (15)
months from the date of commencement of construction, subject to Section 8.2 below.
4.3 Construction Pursuant to Plans. The Borrower shall construct the Improvements
in accordance with the plans approved by the City in connection with issuance of the building
permit, and with the terms and conditions of all land use permits and approvals required by the
City.
4.4 Construction in Compliance with Law. The Borrower shall cause all work
performed in connection with the Development, including construction of the Improvements, to
be performed in compliance with all governmental requirements, including (without limitation
and where applicable) the following:
60 The prevailing wage provisions of Sections 1770 et seq. of the California
Labor Code and implementing rules and regulations, if applicable. The City is not imposing a prevailing wage requirement independent of any applicable California Labor Code requirement.
(b) All directions, rules, and regulations of any fire marshal, health officer,
building inspector, or other off&r of any governmental agency having jurisdiction.
The work shall proceed only after procurement of each permit, license, or other
authorization that may be required by any governmental agency having jurisdiction, and the
Borrower shall be responsible to the City for the procurement and maintenance thereof, as may
be required of the Borrower and all entities engaged in work on the Development.
4.5 Changes in Development Budget. Developer shall submit all material changes in
the development budget for the Development, as approved by the City pursuant to Section 3.1 (a)
above, to the City for approval, which approval shall not be unreasonably withheld.
4.6 Entrv bv the Citv. Borrower shall permit the City, through its officers, agents, or
employees, at all reasonable times and upon three (3) business days prior written notice to enter
into the Development and inspect the work of construction to determine that the same is in
conformity with the construction plans approved by the City. Borrower acknowledges that the
City is under no obligation to supervise, inspect, or inform Borrower of the progress of
construction, and Borrower shall not rely upon the City therefor. Any inspection by the City is entirely for its purposes in determining whether Borrower is in default under this Agreement and
is not for the purpose of determining or informing Borrower of the quality or suitability of
construction. Borrower shall rely entirely upon its own supervision and inspection in
determining the quality and suitability of the materials and work, and the performance of
architects, subcontractors, and material suppliers.
December 15,200O 10
4.7 Eaual Onnortunity. During the construction of the Improvements there shall be
no discrimination on the basis of race, color, creed, religion, sex, sexual orientation, marital
status, national origin, ancestry, or handicap in the hiring, firing, promoting, or demoting of any
person engaged in the construction work.
4.8 Mechanics Liens, Stop Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Land or a stop notice affecting the
City Loan is served on the City or any other lender or other third party in connection with the
Development, then the Borrower shall, within twenty (20) days after such filing or service, either
pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by
delivering to the City a surety bond in sufficient form and amount, or provide the City with other
assurance satisfactory to the City that the claim of lien or stop notice will be paid or discharged.
0) If the Borrower fails to discharge any lien, encumbrance, charge, or claim
in the manner required in Section 4.3, then in addition to any other right or remedy, the City may
(but shall be under no obligation to) discharge such hen, encumbrance, charge, or claim at the
Borrower’s expense. Alternately, the City may require the Borrower to immediately deposit with
the City the amount necessary to satisfy such lien or claim and any costs, pending resolution
thereof. The City may use such deposit to satisfy any claim or lien that is adversely determined
against the Borrower.
Cc) The Borrower shall file a valid notice of cessation or notice of completion
upon cessation of construction on the Development for a continuous period of thirty (30) days or
more, and take all other reasonable steps to forestall the assertion of claims of lien against the
Land. The Borrower authorizes the City, but without any obligation, to record any notices of
completion or cessation of labor, or any other notice that the City deems necessary or desirable to
protect its interest in the Development.
4.9 Certificate of Completion. When the Borrower has determined it has met its
obligations under this Article 4, the Borrower may request that the City issue a Certificate of
Completion, in the form shown in Exhibit C. Within ten (10) days of such a request, the City shall issue a Certificate of Completion or shall provide the Borrower with a written explanation
of its refusal to issue the Certificate of Completion. If and when the Borrower has taken the
specified measures or met the specified standards, the City shall issue a Certificate of
Completion.
The Certificate of Completion shall not be deemed a notice of completion under the
California Civil Code, nor shall it constitute evidence of compliance with or satisfaction of any obligation of the Borrower to any holder of a deed of trust securing money loaned to finance the
Development.
December 15,200O 11
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER
5.1 Representations and Warranties. Borrower hereby represents and warrants to the
City as follows:
(4 Organization. Borrower is duly formed, validly existing and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted.
PO Author&v of Borrower. Borrower has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
(4 Author& of Persons Executinr~ Documents. This Agreement and the
Loan Documents and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement have been executed and delivered by persons
who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all
actions required under Borrower’s organizational documents and applicable governing law for
the authorization, execution, delivery and performance of this Agreement and the Loan
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement, have been duly taken.
(4 Valid Binding Agreements. This Agreement and the Loan Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Borrower.
(e) Pending Proceedings. There are no claims, actions, suits or proceedings
pending or, to the knowledge of Borrower, threatened against or affecting Borrower or the
Development, at law or in equity, before or by any court, board, commission or agency
whatsoever which might, if determine d adversely to Borrower, materially affect Borrower’s
ability to repay the City Loan or impair the security to be given to the City pursuant hereto.
(0 Financial Statements. The financial statements of Borrower and other
financial data and information furnished by Borrower to the City fairly present the information
contained therein. As of the date of this Agreement, there has not been any adverse, material
change in the financial condition of Borrower from that shown by such financial statements and
other data and information.
ARTICLE 6
CONTINUING OBLIGATIONS
6.1 Applicability. The Borrower shall comply with the provisions of this Article 6
throughout the Term.
December IS,2000 12
6.2 Compliance with Loan Documents. Borrower shall comply with all the terms and
provisions of the Loan Documents.
6.3 Rental of Units. The Borrower shall comply with the occupancy and affordability
restrictions for the rental of the Units as set forth in the City Regulatory Agreement.
6.4 Reouired Insurance Coverage.
(a) Fire and Extended Coverage Endorsement. The Borrower shall during the
Term keep the Development insured against loss or damage by a standard all risk policy in
amounts not less than the replacement value of the Development, or should insurance in such
amount not be reasonably and commercially available, such lesser amount as may be acceptable
to the City. The amount of such insurance shall be adjusted by reappraisal of the Improvements
by the insurer or its designee at least once every five (5) years during the Term, if requested by
the City. If an all risk policy insuring the fill replacement value of the Development is not
reasonably and commercially available, the Borrower shall use best efforts to obtain and
maintain an extended coverage endorsement that ensures the full replacement value of the
Development as soon as such coverage becomes commercially and reasonably available.
(b) Liabilitv and Proper& Damage Insurance. . During the Term, the
Borrower shall keep in full force and effect a policy or policies of comprehensive general
liability and property damage insurance against liability for bodily injury to or death of any
person or property damage arising out of an occurrence on or about the Development. The limits
of such insurance shall be not less than five million dollars ($5,000,000) combined single limit
for bodily injury and property damage. The limits of the insurance shall be adjusted once every
five (5) years if and as reasonably required by the City.
(c) Workers’ Compensation Insurance. The Borrower shall carry or cause to
be carried workers’ compensation insurance covering all persons employed by the Borrower in
connection with the Development and with respect to whom death, bodily injury, or sickness
insurance claims could be asserted against the Borrower or the City.
(4 Builders’ Risk Insurance. During the course of any alteration, construction
or reconstruction, the cost of which exceeds one hundred thousand dollars ($lOO,OOO), the
Borrower shall provide or require any contractor to provide builders’ risk insurance for not less
than, in the event of new construction, the full insurable value of the Development or, in the
event of alteration or reconstruction, the insurable value of the alteration or reconstruction,
insuring the interests of the City, the Borrower and any contractors and subcontractors.
6.5 Insurance Policies and Premiums.
(4 All liability policies required by this Agreement shall name the City as an
additional insured. Duplicate copies of such policies or certificates of such insurance shall be
promptly furnished to the City.
09 To the extent obtainable, any policy of insurance shall provide that any
change or cancellation of said policy must be made in writing and sent to the Borrower and the
December 15,200O 13
City at their respective principal offices at least thirty (30) days before the effective date of any
change or cancellation.
6.6 Proceeds of Insurance. All fire and standard risk or extended coverage (casualty)
insurance proceeds shall be applied to the payment of the costs of repairing or rebuilding that
part of the Development damaged or destroyed if(i) the Borrower agrees in writing within ninety
(90) days after payment of the proceeds of insurance that such repair or rebuilding is
economically feasible, and (ii) each lender of an outstanding Construction and Permanent Loan
permits such repairing or rebuilding, provided that the extent of Borrower’s obligation to restore
the Development shall be limited to the amount of the insurance proceeds. If the Development is
not repaired or rebuilt as provided in this Section 6.6, all such proceeds shall be applied to
repayment of outstanding loans including this City Loan, in the order of lien priority.
6.7 Taxes and Assessments. So long as Borrower owns the Development, Borrower shall pay all real and personal property taxes, assessments and charges and all franchise, income,
unemployment, old age benefit, withholding, sales, and other taxes assessed against it, or payable
by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or
charge from attaching to the Development; provided, however, that Borrower shall have the right
to contest in good faith any such taxes, assessments, or charges. In the event Borrower exercises
its right to contest any tax, assessment, or charge against it, Borrower, on final determination of the proceeding or contest, shall immediately pay or discharge any judgment rendered against it,
together with all costs, charges, and interest. The City acknowledges that Borrower intends to
apply for a property tax exemption for the Development pursuant to California Revenue and
Taxation Code Section 214(g).
6.8 Compliance with Laws. Borrower shall comply with all laws and regulations of
the United States and of California and of any political subdivision thereof, or of any
governmental authority which may be applicable to it or to its business, subject to Borrower’s
right to contest the validity or applicability of laws or regulations.
6.9 Borrower shall promptly notify the City in writing of any changes in Changes.
the location of any place of business or material assets of the Borrower.
6.10 Notification of Litigation. Borrower shall promptly notify the City in writing of
any litigation affecting the Borrower or the Development and of any claims or disputes that
involve a material risk of litigation, which may materially adversely affect the City Loan.
6.11 Indemnity. Borrower shall defend, indemnify, save and hold the City and the
Agency, their councilmembers, boardmembers, officers, employees, agents, and contractors,
utilizing attorneys approved by the City, harmless from any and all claims, actions, demands,
costs, expenses, and reasonable attorneys’ fees, arising out of, attributable to, or otherwise
occasioned, in whole or in part, by any act or omission of Borrower arising from or related to the
Development, except as such claim may arise from the negligence or willful misconduct of an
indemnified party. This Section 6.11 shall not operate to impose personal liability on Borrower
or its partners for nonpayment of principal and interest under the City Note.
December I$2000 14
6.12 Hazardous Materials.
(a) The Borrower shall keep and maintain the Development in compliance
with, and shall not cause or permit the Development to be in violation of, any federal, state, or
local laws, ordinances, or regulations relating to industrial hygiene or to the environmental
conditions on or under the Development, including (but not limited to) soil and ground water
conditions. The Borrower shall not use, generate, manufacture, store, or dispose of, on, under, or
about the Development, or transport to or from the Development, any flammable explosives,
radioactive materials, hazardous wastes, toxic substances, or related materials, including (without
limitation) any substances defined as or included in the definition of “hazardous substances,”
“hazardous wastes,” ” hazardous materials,” or “toxic substances” under any applicable federal or
state laws or regulations (collectively referred to as “Hazardous Materials”) except such of the
foregoing as may be customarily and lawfitlly kept and used in and about multifamily residential
property.
Co) The Borrower shall immediately advise the City in writing if at any time
it receives written notice of: (i) any and all enforcement, cleanup, removal, or other
governmental or regulatory actions instituted, completed, or threatened against the Borrower or
the Development pursuant to any applicable federal, state, or local laws, ordinances, or
regulations reiating to any Hazardous Materials (“Hazardous Materials Law”); (ii) all claims
made or threatened by any third party against the Borrower or the Development relating to
damage, contribution, cost recovery compensation, loss, or injury resulting from any Hazardous
Materials (the matters set forth in clauses (i) and (ii) above are referred to as “Hazardous
Materials Claims”); and (iii) the Borrower’s discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Development that could cause the Development or
any part thereof to be classified as “border-zone property” under California Health and Safety Code Sections 25220 et seq. or corresponding regulations, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability, or use of the Development under any
Hazardous Materials Law.
6) The Borrower shall permit the City to join and participate in, as a party if
it so elects, any legal proceedings or actions initiated in connection with any Hazardous
Materials. The Borrower shall indemnify, defend (with counsel reasonably chosen by the City,
at the City’s option), and hold harmless the City, and the Agency, and their respective
councilmembers, boardmembers, officers, agents, and employees from and against any loss,
damage, cost, expense, or liability directly or indirectly arising out of or attributable to the use,
generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous
Materials on or under the Development, including (without limitation): (i) all foreseeable
consequential damages; (ii) the costs of any required or necessary repair, cleanup, or
detoxification of the Development and the preparation and implementation of any closure,
remedial, or other required plans; and (iii) all reasonable costs and expenses incurred by the City
or the City in connection with clauses (i) and (ii), including (but not limited to) reasonable
attorneys’ fees. This paragraph shall survive termination of this Agreement.
w Without the City’s prior written consent, which shall not be unreasonably
withheld, the Borrower shall not take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Development, nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous Material Claims,
December IS,2000 15
which remedial action settlement, consent decree or compromise might, in the City’s reasonable
judgement, impair the value of the City’s security hereunder; provided, however, that the City’s
prior consent shall not be necessary in the event that the presence of Hazardous Materials on,
under, or about the Development either poses an immediate threat to the health, safety, or welfare
of any individual or is of such a nature that an immediate remedial response is necessary and it is
not reasonably possible to obtain the City’s consent before taking such action, provided that in
such event the Borrower shall notify the City as soon as practicable of any action so taken. The
City agrees not to withhold its consent, where such consent is required hereunder, if either (i) a
particular remedial action is ordered by a court of competent jurisdiction, (ii) the Borrower will
or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action;
(iii) the Borrower establishes to the reasonable satisfaction of the City that there is no reasonable
alternative to such remedial action which would result in less impairment of the City’s security
hereunder; or (iv) the action has been agreed to by the City.
(e> The Borrower hereby acknowledges and agrees that (i) this Section 6.12 is
intended as the City’s written request for information (and the Borrower’s response) concerning
the environmental condition of the Development as required by California Code of Civil
Procedure Section 726.5, and (ii) each representation and warranty in this Agreement (together
with any indemnity obligation applicable to a breach of any such representation and warranty)
with respect to the environmental condition of the Development is intended by the Parties to be
an “environmental provision” for purposes of California Code of Civil Procedure Section 736.
6.13 Non-Discrimination. The Borrower covenants by and for itself and its successors
and assigns that there shall be no discrimination against or segregation of a person or of a group
of persons on account of race, color, religion, creed, sex, sexual orientation, marital status,
ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Development, nor shall the Borrower or any person claiming under or through
the Borrower 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,
subtenants, sublessees or vendees in the Development. Pursuant to the terms of the City
Regulatory Agreement, the foregoing covenant shall run with the land and shall survive
termination of this Agreement.
6.14 Mandatory Language in All Subsectuent Deeds. Leases and Contracts. The
Borrower and its agents shall not, in the selection or approval of tenants or provision of services
or in any other matter, discriminate against any person or group of persons on the grounds of
race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, age,
or disability. All deeds, contracts, or leases made or entered into by Borrower, its successors or
assigns, as to any portion of the Development shall contain the following language:
(a) In Deeds: “Grantee herein covenants by and for itself, its successors and
assigns that there shall be no discrimination against or segregation of a person or of a group of
persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
property herein conveyed nor shall the grantee or any person claiming under or through the
grantee 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, subtenants,
December 15.2000 16
sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with
the land.”
09 In Contracts: “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 or ancestry in the sale, transfer or use of the property.”
(4 In Leases: “The lessee herein covenants by and for the lessee and lessee’s
heirs, personal representatives and assigns and all persons claiming under the lessee or through
the lessee that this lease is made subject to the condition that there shall be no discrimination
against or segregation of any person or of a group of persons on account of race, color, creed,
religion, sex, sexual orientation, marital status, national origin or ancestry in the leasing,
subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall
the lessee or any person claiming under or through the lessee 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 in the land
herein leased.”
6.15 3QmmQ.
00 The Borrower shall maintain complete, accurate, and current records
pertaining to the Revelopment for a period of five (5) years after the creation of such records, and
shall permit any duly authorized representative of the City to inspect and copy records, including
records pertaining to income and household size of residents of the Development. Such records
shall include records regarding the occupancy and rent levels of the residential units in the
Development, as well as records that accurately and fully show the date, amount, purpose, and
payee of all expenditures drawn from Loan funds. Such records shall also include all invoices,
receipts, and other documents related to expenditures from the City Loan funds. Records must
be kept accurate and current.
(b) The City shall notify the Borrower of any records it deems insufficient.
The Borrower shall have fifteen (15) calendar days after the receipt of such a notice to correct
any deficiency in the records specified by the City in such notice, or if a period longer than
fifteen (15) days is reasonably necessary to correct the deficiency, then the Borrower shall begin
to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably
possible.
(cl The Borrower shall promptly comply with all requirements or conditions
of the City Loan Documents relating to notices, extensions, and other events required to be
reported or requested. The Borrower shall promptly supply, upon the request of the City, any
and all information and documentation involving the Development.
6.16 Transfers.
(a) For purposes of this Agreement, “Transfer” shall mean any sale,
assignment, or transfer, whether voluntary of involuntary, of (i) any rights and/or duties under
this Agreement, and/or (ii) any interest in the Development, including (but not limited to) a fee
simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a
security interest, or an interest evidenced by a land contract by which possession of the
December 15,200O 17
Development is transferred and the Borrower retains title. The term “Transfer” shall exclude the
leasing of any single unit in the Development to an occupant in compliance with the City
Regulatory Agreement.
G-9 No Transfer shall be permitted without the prior written consent of the
City, which the City shall not unreasonably withhold, provided that construction of the
Development has been completed, the proposed transferee meets the City’s reasonable standards
regarding creditworthiness, and the proposed transferee has at least five (5) years experience in
the ownership, management, and operation of large affordable housing developments, without
any record of material violations of discrimination laws, housing codes, or other federal, state, or
local laws or regulations applicable to such developments. Pursuant to Section 2.3(e) above, the
City Loan shall automatically accelerate and be due in ml1 upon any unauthorized Transfer.
w The City approves the transfer of limited partnership interests to Edison
Housing Investments or an affiliate of Edison Housing Investments in connection with the low
income housing tax credit syndication of the Development, provided Borrower’s partnership
agreement and related syndication documents are first approved by the City, which approval
shall not be withheld unreasonably.
6) If a Limited Partner removes the general partner of Borrower in
accordance with the terms of Borrower’s partnership agreement, such removal will not constitute
a default under any of the Loan Documents, provided that within ninety (90) days after the
removal of the general partner, Limited Partner shall have selected a substitute general partner
approved by the City, which approval shall not be unreasonably withheld or delayed.
Notwithstanding anything contained in the Loan Documents to the contrary, any assignment or
transfer by Limited Partner of Limited Partner’s partnership or ownership interest in Borrower
pursuant to Borrower’s partnership agreement will not constitute a default or impermissible
transfer under any of the Loan Documents.
(r) The City approves the grant of the security interests in the Development in
connection with the financing described in Section 1.1 (i) above.
ARTICLE 7
DEFAULT AND REMEDIES
7.1 Events of Default. Each of the following shall constitute an “Event of Default” by
Borrower under this Agreement:
(a) Failure to Construct. Subject to Section 8.2, failure of Borrower to
construct all of the Development within the time set forth in Section 4.2 above;
0 Failure to Make Payment. Failure to make prompt payments of the
principal and interest on the City Note when due and such failure having continued uncured for thirty (30) days after receipt of written notice thereof to the Borrower from the City;
(‘3 Breach of Covenants. Failure by Borrower to duly perform, comply with,
or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such
December 15,200O 18
failure having continued uncured for thirty (30) days after receipt of written notice thereof by the
Borrower from the City or, if the breach cannot be cured within thirty (30) days, the Borrower
shall not be in breach so long as Borrower is diligently undertaking to cure such breach and such
breach is cured within ninety (90) days; provided, however, that if a different period or notice
requirement is specified under any other section of this Article 7, the specific provisions shall
control.
(d) Insolvency. A court having jurisdiction shall have made or entered any decree
or order (i) adjudging Borrower to be bankrupt or insolvent, (ii) approving as properly filed a
petition seeking reorganization of Borrower or seeking any arrangement for Borrower under the
bankruptcy law or any other applicable debtor’s relief law or statute of the United States or any
state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower
in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or
liquidation of Borrower, if any such decree or order described in clauses (i) to (iv), inclusive,
shall have continued unatayed or undischarged for a period of ninety (90) days; or Borrower shall
have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily
submitted to or filed a petition seeking any decree or order of the nature described in clauses (i)
to (iv), inclusive. The occurrence of any of the Events of Default in this paragraph shall act to
accelerate automatically, without the need for any action by the City, the indebtedness evidenced
by the Note. The occurrence of any of the events described in this subsection with respect to a
general partner of the Borrower shall also constitute an Event of Default hereunder.
(f) Assianrnent: Attachment. Borrower (or a general partner of Borrower)
shall have assigned its assets for the benefit of its creditors or suffered a sequestration or
attachment of or execution on any substantial part of its property, unless the property so
assigned, sequestered, attached or executed upon shall have been returned or released within
ninety (90) days after such event or prior to sooner sale pursuant to such sequestration,
attachment, or execution. The occurrence of any of the events of default in this paragraph shall
act to accelerate automatically, without the need for any action by the City, the indebtedness
evidenced by the Note.
(g) Susnension: Termination. Borrower (or a general partner of Borrower)
shall have voluntarily suspended its business or, Borrower’s partnership shall have been
dissolved or terminated, other than a technical termination of the partnership for tax purposes.
(h) Liens on Property and the Project. There shall be filed any claim of lien
(other than liens approved in writing by the City) against the Development or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds
of the City Loan and the continued maintenance of said claim of lien or notices to withhold for a
period of twenty (20) days without discharge or satisfaction thereof or provision therefor
satisfactory to the City. In the event that Borrower is diligently working to remove a claim of
lien or to remove a notice to withhold proceeds and the City’s interests under the Loan
Documents are not imminently threatened, the City shall not declare a default under this
subsection.
(0 Condemnation. The condemnation, seizure, or appropriation of all or the
substantial part of the Land and the Development.
December 15,200O 19
CO Unauthorized Transfer. Any Transfer other than as permitted by Article
Six.
00 Representation or Warranty Incorrect. Any material Borrower
representation or warranty contained in this Agreement, or in any application, financial
statement, certificate, or report submitted to the City in connection with any of the City Loan
Documents, proving to have been incorrect in any material respect when made.
(1) Limited Partner Notice and Cure Rights. Notwithstanding anything to the
contrary contained in the Loan Documents, Limited Partner shall have the right, but not the
obligation, to cure defaults of Borrower under any of the Loan Documents and the City agrees to
accept cures tendered by Limited Partner as follows: (a) with respect to any monetary default
under any of the Loan Documents, the City shall notify Limited Partner in writing of the
monetary default and Limited Partner shall have thirty (30) days after the receipt of said notice of
such monetary default to cure such monetary default; and (b) with respect to any breach of
covenant pursuant to Section 7.1(c) above, the City shall notify Limited Partner in writing of the
breach and Limited Partner shall have thirty (30) additional days to cure the breach beyond the
cure periods granted to Borrower under Section 7.1 (c). If a Limited Partner cannot cure a breach
because the Borrower’s general partner is in bankruptcy and/or because the cure requires removal
of the general partner of the Borrower and the Limited Partner is proceeding diligently to remove
the general partner of the Borrower in order to effect a cure of the breach, the cure period shall be
extended for such reasonable time as is necessary for the Permitted Limited Partner to effect a
cure of the breach, but in no event longer than one hundred and eighty (180) days after the date of receipt by the Limited Partner of written notice of the breach. The City agrees that no Event
of Default hereunder shall be deemed to exist until the expiration of any contractual notice and
cure periods provided to Borrower and Limited Partner.
7.2 Remedies. The occurrence of any Event of Default following the expiration of all
applicable notice and cure periods will, either at the option of the City or automatically where so
specified, relieve the City of any obligation to make or continue the City Loan and shall give the
City the right to proceed with any and all remedies set forth in this Agreement and the Loan
Documents, including but not limited to the following:
(a) Acceleration of Note. The City shall have the right to cause all
indebtedness of the Borrower to the City under this Agreement and the City Note, together with
any accrued interest thereon, to become immediately due and payable. The Borrower waives all
right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to
enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a
creditor and secured party under the law including the Uniform Commercial Code, including
foreclosure under the City Deed of Trust. The Borrower shall be liable to pay the City on
demand all reasonable expenses, costs and fees (including, without limitation, reasonable
attorney’s fees and expenses) paid or incurred by the City in connection with the collection of the
Loan and the preservation, maintenance, protection, sale, or other disposition of the security
given for the Loan.
0 Specific Performance. The City shall have the right to mandamus or other
suit, action or proceeding at law or in equity to require Borrower to perform its obligations and
December IS,2000 20
covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in
violation of the provisions of the Loan Documents.
(c> Right to Cure at Borrower’s Expense. The City shall have the right (but
not the obligation) to cure any monetary default by Borrower under a loan other than the City
Loan. The Borrower agrees to reimburse the City for any funds advanced by the City to cure a
monetary default by Borrower upon demand therefor, together with interest thereon at the rate of
three percent (3%) per annum from the date of expenditure until the date of reimbursement.
7.3 Bight of Contest. Borrower shall have the right to contest in good faith
any claim, demand, levy, or assessment the assertion of which would constitute an Event of
Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the City or the rights of the City hereunder.
7.4 Remedies Cumulative. No right, power, or remedy given to the City by
the terms of this Agreement or the Loan Documents is intended to be exclusive of any other
right, power, or remedy; and each and every such right, power, or remedy shall be cumulative
and in addition to every other right, power, or remedy given to the City by the terms of any such
instrument, or by any statute or otherwise against Borrower and any other person. Neither the
failure nor any delay on the part of the City to exercise any such rights and remedies shall
operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right
or remedy preclude any other or further exercise of such right or remedy, or any other right or
remedy.
7.5 Waiver of Terms and Conditions. The City Manager may at his or her discretion
waive in writing any of the terms and conditions of this Agreement, without the Borrower
completing an amendment to this Agreement. No waiver of any default or breach by Borrower
hereunder shall be implied from any omission by the City to take action on account of such
default if such default persists or is repeated, and no express waiver shall affect any default other
than the default specified in the waiver, and such waiver shall be operative only for the time and
to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall
not be construed as a waiver of any subsequent breach of the same covenant, term, or condition.
The consent or approval by the City to or of any act by Borrower requiring further consent or
approval shall not be deemed to waive or render unnecessary the consent or approval to or of any
subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a
cure or a waiver of any default under this Agreement or the Loan Documents, nor shall it
invalidate any act done pursuant to notice of default, or prejudice the City in the exercise of any
right, power, or remedy hereunder or under the Loan Documents.
December IS, 2000 21
ARTICLE 8
MISCELLANEOUS
8.1 Time. Time is of the essence in this Agreement.
8.2 Force Maieure. Performance by either party hereunder shall not be deemed to be
in default where defaults are due to war; insurrection; strikes; lock-outs; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; governmental restrictions or priority; litigation (including suits
filed by third parties concerning or arising out of this Agreement); weather or soils conditions
which, in the opinion of the Borrower’s contractor, will necessitate delays; inability to secure
necessary labor, materials or tools; delays of any contractor, sub-contractor or supplier; acts of
the other party; acts or failure to act of any public or governmental agency or entity (other than
the acts or failure to act of the City); or any other causes (other than Borrower’s inability to
obtain financing for the Development) beyond the control or without the fault of the party
claiming an extension of time to perform. Times of performance under this Agreement may also
be extended in writing by the City and the Borrower.
8.3 Notices. All notices, demands and communications between the Borrower and
the City shall be sufficiently given and shall not be deemed given unless dispatched by certified
mail, postage prepaid, return receipt requested, or delivered by express delivery service with a
delivery receipt, to the principal officers of the Borrower and the City as follows:
Borrower: Wakeland Housing
At&: Ken Sauder
707 Broadway, Suite 1230
San Diego, CA 92101
City: City of Carlsbad
Housing and Redevelopment Department
Attn: Housing and Redevelopment Director
2965 Roosevelt Drive, Suite B
Carlsbad, CA 92008
Such addresses may be changed by notice to the other party given in the same manner as
provided above.
Notice shall be deemed to have been effective on the date shown on the delivery receipt
as the date of delivery, the date delivery was refused, or the date the notice was returned as
undelivered.
8.4 Attorneys’ Fees. If either party brings a legal or administrative action or
proceeding to enforce, protect or establish any right or remedy hereunder or under any of the
Loan Documents, the prevailing party shall be entitled to recover from the other party its costs of suit and reasonable attorneys’ fees which shall be fixed by the court.
December 15,200O 22
8.5 No Third Parties Benefited. There are no third party beneficiaries of this
Agreement, and no person or persons other than the Borrower and the City shall have any right
of action hereon, except with respect to Section 7.1(l), the limited partner of Borrower shall be a
third party beneficiary.
8.6 Actions. The City shall have the right to commence, appear in, or defend any
action or proceeding purporting to affect the rights, duties, or liabilities of the parties hereunder,
or the disbursement of any proceeds of the Loan.
8.7 Borrower agrees that the City may place signs mutually satisfactory to Signs.
Borrower and the City upon the Development at locations selected by Borrower and the City
advising of the financing of the Development by the City. The City may also announce such
placement through press releases to newspapers and trade publications.
8.8 Successors and Assia. The terms hereof shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto; provided, however, that no assignment of Borrower’s rights hereunder shall be made, voluntarily or by operation of law, without the
prior written consent of the City and that any such assignment without said consent shall be void.
8.9 Construction of Words. Except where the context otherwise requires, words
imparting the singular number shall include the piual number and vice versa, words imparting
persons shall include firms, associations, partnerships and corporations, and words of either
gender shall include the other gender.
8.10 Partial Invalidity. If any provision of this Agreement shall be declared invalid,
illegal, or unenfotceable, the validity, legality, and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired.
8.11 Governing Law. This Agreement and the Loan Documents and other instruments
given pursuant hereto shall be construed in accordance with and be governed by the laws of the
State of California.
8.12 Amendment. This Agreement may not be changed orally, but only by agreement
in writing signed by Borrower and City.
8.13 Captions and Headings. Captions and headings in this Agreement are for
convenience of reference only, and are not to be considered in construing the Agreement.
*********
December 15,200O 23
8.14 Action by the Citv. Except as may be otherwise specifically provided herein,
whenever any approval, notice, direction, consent, request, or other action by the City is required
or permitted under this Agreement, such action may be given, made, or taken by the City
Manager, or by any person who shall have been designated in writing to the Borrower by the
City Manager, without further approval by the City Council, and any such action shall be in
writing. The City Manager is also hereby authorized to approve, on behalf of the City, requests
by Borrower for reasonable extensions of time deadlines set forth in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.
BORROWER
Pacific Vista Las Flores, L.P. a Cahfomia
limited Partnership
By: Wakeland Housing and
Development Corporation, a California
Nonnrofit Cornoration
By:
Kenneth L. Sauder, Executive Director
By: San Diego Interfaith Housing
Foundation, a California Nonprofit
Corporation.
CITY
Approved as to Form:
December 15,200O 24
ALL-PURPOSE
State of California
s;t-f, hzJ, 4f-k >
ss. County of
On ;I/&/
Date
personally appeared
&ersonally known to me
Gv 7ZTitEEe
to be the person(llrf whose namedg)@are
subscribed to the within instrument and
acknowledged to me thr&%?sh&bey executed
the same in &&m authorized
capacity(id and that by &VW&+&L
signature@+) on the instrument the person#$ or
the entity upon behalf of which the persoq@
acted, executed the instrument.
Place Nolay Seal Above
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.
Description of Attached Document
Title or Type of Document: 4tmv /t&a--
Document Date: Number of Pages:
Capacity(ies) Clai
Signer’s Name: h?- kLzf--~
El Individual
0 Corporate Officer - Title(s):
0 Partner - q Limited 0 General
Cl Attorney in Fact
cl Trustee
0 Guardian or Conservator
0 Other:
Signer Is Representing: QH-45 4
8 1999 National Notary Association - 9350 De Soto Ave.. P.0. Box 2402 - Chatsworth. CA 913132402 - w.natiinalnotaryorg Prod No. 5907 Reardsr: Cdl Toll-F,ee ,-800-87S6827
-
Decemberl5.2000
EXHIBIT A
Legal Description of the Land
A-l
LOT 134 OF CITY OF CARLSBAD TRACT 97-14, UNIT
NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 13 840, FILE IN THE OFFICE OF
THE COUNTY RECORDER OF SAN DIEGO COUNTY,
SEPTEMBER 1,1999
December15,2000
EXHIBIT B
Permitted Uses of Loan Proceeds
B-l
City Fee: est. $0.00
Developer Overhead Fee $1 oo,ooo.oo
LIHF Repayment est.* $191,090.44
LISC Repayment $50,000.00
CHFA Fees $66,250.00
Bank Loan Fee est. $13,000.00
Bank Legal $1 o,ooo.oo
Bank Other est. $1,500.00
Escrow $2,000.00
Title Insurance est. $4,000.00
Other Unpaid Bills
Architect (Rodriguez & Simon)
Engineer (Hunsaker)
Wall Construction
Fed Ex
Golden State Overnite
Cal Express
Classic Reprographics
N. County Blueprint
Jack Henthorn & Assoc.
Investigative Science Eng.
$2,063.12
$19,252.80
$93,192.75
$32.24
$159.46
$67.31
$4,095.30
$64.65
$5,065.58
$150.00
Vista Las Flores - $ Disbursed @ COE - Revised 1119/01
Total Cost
I
city
$0.00
$100,000.00
$191,090.44
$50,000.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$2,063.12
$19,252.80
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$1541.64
$0.00
$0.00
$0.00
$93,192.75
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Geocon (Soils Eng.) $5,939.50 $0.00 $0.00
Total $567,923.15 $363,948.00 $135,000.00
l Includes estimate of interest due through January 27,200l.
I
$0.00
$0.00
$0.00
$0.00
$41,807.25
$0.00
$0.00
$0.00
$0.00
$0.00
Stan. Pac.
$0.00 $0.00 $0.00 $0.00
$24,442.75
$13,000.00
$1 o,ooo.oo
$1,500.00
$2,000.00
$4,000.00
$0.00
$0.00
$0.00
$32.24
$159.46
$67.31
$4,095.30
$64.65
$3,523.94
$150.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$5,939.50 $0.00
$68,975.15 $0.00
-
EXHIBIT C
Form of Certificate of Completion
Recording Requested By
And When Recorded Mail To:
City of Carlsbad
Housing and Redevelopment Department
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Housing and Redevelopment Director
No fee for recording pursuant to
Government Code Section 27383
CERTIFICATE OF COMPLETION
Pursuant to Section 4.8 of the City Loan Agreement by and between the City of Carlsbad,
a municipal corporation (the “City”), and Pacific Vista Las Flores, a California Limited
Partnership (the “Borrower”), the City certifies that the Borrower has met its obligations under
Article 4 of the Loan Agreement. This Certificate of Completion shall not constitute evidence of
compliance with or satisfaction of any obligation of the Borrower to any holder of a deed of trust
securing money loaned to finance the Development (as defined in the Loan Agreement) or any
part thereof and shall not be deemed either a notice of completion under the California Civil
Code or a certificate of occupancy.
City of Carlsbad, a municipal corporation
By:
Its:
[Notarize signature and
attach legal description]
December 15,2000 C-l
Recorded at the request of
Chicago Title
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
2031J71631- us1 (Space above for Recorder's Use)
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This Regulatory Agreement and Deckration of Restrictive Cw@~ants (the "Agreement")
is made and entered iluo @ of this 28th day of February ,2001, by and between the
City of Carlsbad, a municipal corporation (the "City"), Pacific Vista Las Flores, a California
limited partnership ("Owner").
RECITALS.
1. The City has entered into the Loan Agreement with Owner under whi& the City
will loan funds (the "han") to Owner which will be used, together with finlds obtain& fkom
other sources, for the development and construction of twenty-eight (28) residential uliits known
as Pacific Vista Las Flm ("Development"), located on the real property in the City of Carlsbad,
County of San Diego, more particularly described in Exhibit A attached hereto ad incorporated
herein (the "Property").
2. The funds loaned to Owner pursuant to the Loan Agreement are City Housing
Trust Fund monies. Such funds we required to be utilized to assist housing affordable to lower
income households. This Agreement is intended to implement this requiremait.
3. The City intends to utilize the Development to obtain affordable housing
production credits for the City of Carlsbad Redevelopment Agency pursuant to Health and Safety
Code Section 33413@)(2)(A)(ii) as newly constructed housing units located outside of the
Carlsbad Village Redevelopment Project Area and available at affordable housing cost to low
and moderate income households. Such units are required to remain affordable to such
households for not less than the period of the land use controls established in the Redevelopment
Plan for the Carlsbad Village Redevelopment Project Area. This Agreement is also intended to
implement this requirement.
4. The City has agreed to loan funds to Owner on the condition that the
Development be maintained and operated in accordance with Health and Safety Section 3341 30)
and in accordance with additional restrictions concerning affordability, operation, and
maintenance of the Development, as specified in this Agreement.
December 15,2000
Q0,l 15, (1'1 6 .L '.i ~ ,
<: I, ,: .
1
4612
5. In consideration of receipt of the Loan at an interest rate substantially below the
market rate, Owner has further agreed to observe all the terms and conditions set forth below.
6. Owner holds a fee interest in the Development land, and in all improvements to be
constructed by Owner on such land.
7. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the City and the Owner wish to enter into this
Agreement.
THEREFORE, the City and the Owner hereby agne as follows:
ARTICLE 1
DEFINITIONS
1.1
When used in this Agrgment, the following terms shall have the respective meanings
assigned to them in this Artihe 1. -
(a) "Adjusted Income" shall mean the total anticipat annual income of all
persons in a household, as calculated in accordance with 25 California Code of Regululations
Section 6914 or pursuant to a successor State housing program that utilizes a reas&iy similar
method of calculation of adjusted income. In the event that no such program exists, the City
shall provide the Owner with a reasonably similar method of calculation of adjusted income as
provided in said Section 6914.
(b) "Agency" shall mean the Carlsbad Redevelopment Agency, Carlsbad,
California, a public body, corporate and politic.
(c) "Agrwmmt" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(d) "City" shall mean the City of Carlsbad, a municipal corporation.
(e) "Deed of Tmt" shall mean the deed of trust to the City on the Property
which secures repayment of the Loan and performance of this Agreement.
(0 "Development" shall mean the Property and the twenty-eight (28) units to
be constructed on the Property, as well as all landscaping, roads and parking spaces existing
thereon, as the same may from time to time exist.
(9) "HCD" shall mean the California Department of Housing and Community
Development.
(h) "Loan" shall mean all funds loaned to Owner pursuant to the Loan
Agreement.
December 15,2000 2
4613
(i) "Loan Agreement" shall mean the City Loan Agreement entered into by
and between the City and Owner and dated of even date herewith.
0) "Lower Income Household" shall mean a household with an Adjusted Income that does not exceed the qualifying limits for very low income households as established
and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937,
and as published by HCD.
actual
HCD.
o<) "Median Income" shall mean the median gross yearly income adjusted for
household size, in the County of San Diego, Cdifomia, as published from time to time by
In the event that such income determinations are no longer published, or are not updated
for a period of at least eighteen (18) months, the City shall provide the Owner with other income
determinations which are reasonably similar with respect to methods of calculation to those
previously published by NCD.
(1) "Mvloderate Income Household" shall mean a household whose annual
gross income does not exceed ninety percent (90%) of Median Income, adjusted for household
size.
(m) "Moderate Income Units" shall mean the Units limited to occupancy by
Moderate Income Households pursuant to Section 2.1 below.
(n) "Note" shall mean the promissory note from the Owner to the City
evidencing all or any part of the Loan.
(0) "Owner" shall mean Pacific Vista Las Plores, a California limited
partnership and its successors and assigns to the Development.
(p) "Property" shall mean the real property described in Exhibit A attached
hereto and incorporated herein.
(9) "Rent" shall mean the total of monthly payments by the tenants of a Unit
for the following: use and occupancy of the Unit and land and associated facilities, including
parking; any separately charged fees or setvice charges assessed by Owner 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 Owner, and paid by the tenant.
(r) "Term" shall mean the period of time beginning on the date of recordation
of this Agreement and ending fifty-five (55) years after a Certificate of Occupancy is issued by
the City for all Units.
December 15.2000 3
(s) “Units” shall mean the twenty-eight (28) rental units to be constructed on
the Property by the Owner, but excluding therefrom one (1) resident manager’s unit.
(v) “Very Low Income” shall mean shall mean a household whose annual
gross income does not exceed fifty percent (50%) of Median Income, adjusted for household
size.
(w) Very Low Income Unit” shall mean the Units limited to occupancy by
Moderate Income Households pursuant to Section 2 below.
ARTICLE 2 AFFORDABILITY COWMS
2.1 OCCUD~~CY Reuuirement. Thirteen of the Units shall be rented and occupied by
or, if vacant, available for rental and occupancy by Very Low Income Households. The
remainder of the UNta shall be occupied by Moderate Income Households.
2.2 Allowable Rent.
(a) Subject to Section 2.3 below, the Rent charged the occupants of the Very
Low Income Unit$ shall Bot exceed one-twelfth of thirty percent (30%) of fifty petcent (50%) of
Median Income, adjusted for household size. The Rent charged the occupants of the Moderate
Income Units shall not exceed one-twelfth of thirty percent (30%) of ninety percent (90%) of
Median Income, adjusted for household size.
(b) Subject to Section 2.3(b) below, in calculating the allowable Rent for all
Units, the following assumed household sizes shall be utilized
Number of Bedrooms Assumed Household Size
Studio
One
Two
Three
Four
2.3 Increased Income of Occuwing Households.
(a) In the event, upon recertification of an occupant household’s income, the
Owner discovers that a Very Low Income Household no longer qualifies as a Very Low Income
Household (but does qualify as a Moderate Income Household), such household’s Unit shall be
considered a Moderate Income Unit (and the Rent may be increased to one-twelfth of thirty
percent of ninety percent (90%) of Median Income upon sixty (60) days written notice to the
household) and the Owner shall rent the next available Very Low Income Unit to a Very Low
Income Household to comply with the requirements of Section 2.1 above. In the event that the
income of a Very Low Income Household or a Moderate Income Household increases above the
qualifying limit for a Moderate Income Household, the rent shall remain at the level required for
December 15,2000 4
4615
a Moderate Income Unit and the Unit shall be deemed to be a Moderate Income Unit until the
occupying household vacates the Unit, and the next available Unit shall be rented to a Very Low
Income Household or an Moderate Income Household as necessary to meet the requirements of
Section 2.1 above. Moreover, a Unit occupied by a Very Low Income Household or Moderate
Income Household shall be deemed, upon the termination of such Very Low Income Household's
or Moderate Income Household's occupancy, to be continuously occupied by a Very Low
Income Household or a Moderate Income Household, as applicable, until reoccupied, at which
time the character of the Unit shall be redetermined.
(b) If the Development is subject to federal low income housing tax credit
requirements, the provisions of those requirements regarding assumed household size and
continued occupancy by households whose incomes exceed the eligible income limitations and
rents to be charged to those households shall apply in place ofthe provisions set forth in
subsections 2.20) and 2.3ta) above.
2.4 Lease Provisions. Owner shall include in leases for dl Units provisions which
authorize Owner to immedi$tely terminate the tenanoy of any household one or more of whose
members misrepresented any fact material to the household's qualification as a Very Low Income
Household or a Moderate Income Household. Each lease or rental agreement shall also provide
that the household is subject to annual certification in accordance with Section 3.1 beiow, and
that, if the household's income increases above the applicable limits for a Very Low Income
Household or a Moderate Income Household, as applicable, such household's Rent may be
subject to increase.
2.5 Section 8 Certificate Holders. The Owner will accept as tenants, on the same
basis as all other prospective tenants, persons who are recipients of federal certifi~teg for rent
subsidies pursuant to the existing housing program under Section 8 of the Unit4 States Housing
Act, or its successor. The Owner shall not apply selection criteria to Section B certificate or
voucher holders that is more burdensome than criteria applied to all other prospective tenants,
nor shall the Owner apply or permit the application of management policies or lease provisions
with respect to the Development which have the effect of precluding occupancy of units by such
prospective tenants.
2.6 Condominium Conversio& The Owner shall not convert Development units to
condominium or cooperative ownership or sell condominium or cooperative conversion rights to
the Property during the Term of this Agreement.
ARTICLE 3
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification. The Owner will obtain, complete and maintain on file,
immediately prior to initial occupancy and annually thereafter, income certifications from each
Very Low Income Household and each Moderate Income Household renting any of the Units.
The Owner shall make a good faith effort to verify that the income provided by an applicant or
occupying household in an income certification is accurate by taking one or more ofthe
December 15,2000 5
4616
following steps as a part of the verification process: (1) obtain a pay stub for the most recent pay
period; (2) obtain an income tax return for the most recent tax year; (3) conduct a credit agency
or similar search; (4) obtain an income verification form fiom the applicant's current employer;
(5) obtain an income verification form fiom the Social Security Administration and/or the
California Department of Social Services if the applicant receives assistance kom 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 the City
upon written request.
3.2 Annual Report to City. Each year Owner shall submit an annual report to the
City, in a form approved by the City. The annual raport shall include for each Unit covered by
this Agreement, the Rent and the income and household size of the household occupying the
Unit. The report shall also state the date the tenancy commenced for each rental Unit and such
other information as the City may be required by law to obtain.
3.3 Additional information. Owner shall provide any additional information
reasonably requested by the City. Upon 5 days prior written request and during regular business
hours, the City Wl have the right to examine and make copies of all books, records or other
documents of Owner whit$ pertain to any Unit.
3.4 Records. Owner shall maintain complete, accurate and current reooids pertaining
to the Units, and, upon 5 days prior w-ritten request by the City, shall permit any duly authorized
representative of the City to inspect records, including records pertaining to income and
household size of tenant households.
3.5 WeIE?re Reform Act Cmuliance. Unless Owner is otherwise exempt Rom the
following requirement under applicable law, Owner shall comply with the r&pdmmats of the
Public Responsibility and Work Opportunity Reform Act of 1996, as amended, including,
without limitation, verifying the citizenship or immigration status of prospective tenants in
accordance with the verification procedures established under such Act.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Residential Use. The Development shall be operated only for residential use. No
part of the Development shall be operated as transient housing.
4.2 Compliance with Loan Agreement. Owner shall comply with all the terms and
provisions of the Loan Agreement.
4.3 Property Tax Exemution. Owner shall only apply for a property tax exemption
for the Property under Revenue and Taxation Section 214(g), and not under any other provision
of law, without the City's prior written consent, which consent, shall not be unreasonably
withheld.
December 15,2000 6
4617
4.4 Taxes and Assessments. Owner shall pay all real and personal property taxes,
assessments and charges and all franchise, income, employment, old age benefit, withholding,
sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to
prevent any penalty from accruing, or any lien or charge from attaching to the Property;
provided, however, that Owner shall have the right to contest in good faith, any such taxes,
assessments, or charges. In the event Owner exercises its right to contest any tax, assessment, or
charge against it, Owner, 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.
4.5 Nondiscrimination. All of the Units shall be available for occupancy on a
continuous basis to members of the general public who are inoome eligible. Owner shall not
give preference to any particulm class or group of pepsons in renting or selling the Units, except
to the extent that the Units ace required to be leased to Very Low Income Households and
Moderate Income HousehDlds OT to Carlsbad Raievewont Agency or City displacees pursuant
to Section 4.6 below. There shall be no didmination agaiwt or segregation of any person or
group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status,
national origin, ar ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of any Unit nor shall Owner or any person claiming under or.through the Owner,
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 of persons for the operation and
management of the Development. All deeds, leases or contracts made or entered into by Owner
as to the Units or the Development or portion thereof, shall contain covenants concerning
discrimination as prescribed by the Loan Agreement.
4.6 Erefercnce to Displace@. Owner shall give a preference in the mfai of any Units
to eligible households displaced by activity of the Carlsbad Redevelopment Agency or the City
upon receiving a written request of the Agency or the City regarding such displacement.
ARTICLE 5
PROPERTY MAWAGEMENT AND MAINTENANCE
5.1 Management Resuonsbilitiea. The Owner is responsible for all management
functions with respect to the Development, including without limitation the selection of tenants,
certification and recertification of household size and income, evictions, collection of rents and
deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital
items, and security. The City and the Agency shall have no responsibility over management of
the Development. The Owner shall retain a professional property management company
approved by the City in its reasonable discretion to perform its management duties hereunder,
unless the Owner demonstrates to the City that it has the capacity to self-manage the
Development and receives written City approval for self-management. A resident manager shall
also be required, selection of whom shall be at the discretion of the Owner.
December 15,2000 7
5.2 Management Agent; Periodic Re~orts. The Development shall at all times be
managed by an experienced management agent reasonably acceptable to the City, with
demonstrated ability to operate residential facilities like the Development in a manner that will
provide decent, safe, and sanitary housing (as approved, the "Management Agent"). Prior to the
first occupancy permit for any building within the Development, the Owner shall submit for the
City's approval the identity of any proposed Management Agent. The Owner shall also submit
such additional information about the background, experience and financial condition of any
proposed Management Agent as is reasonably necessary for the 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 set forth above, the City shall approve the proposed Management Agent by notifylng the
Owner in writing. Unless the proposed Management Agent is disapproved by the City within
thirty (30) days, which disapproval shall state with reasonable specificity the basis for
disapproval, it shall be deemed approved.
5.3 Perfmawe p review. The City reSefveS the right to conduct an annual (or more
frequently, if deemed necessary by the City) review of the management practices and financial
status of the Development. The purpose of each periodic review will be to enable the City to
determine if the Development is being operated and managed in accordance with the
requirements and standasds of this Agreement. The Owner shall cooperate with the City in such
reviews.
5.4 Rmlacement of Management Agent. If, as a result of a periodic review, the City
determines in its reasonable judgement that the Development is not being operated and managed
in accordance with my of the material requirements and standards of this Ament, the City
shall deliver notice to Owner of its intention to cause replacement of the Management Agent,
including the reasom therefor. Within fifteen (1 5) days of receipt by Owner of such written
notice, City staff md the Owner shalI meet in good faith to consider methods for improving the
financial and operating status of the Development, including, without limitation, replacement of
the Management Agent.
If, after such meeting, City staff recommends in writing the replacement of the
Management Agent, Owner shdl promptly dismiss the then Management Agent, and shall
appoint as the Management Agent a person or entity meeting the standards for a Management
Agent set forth in Section 5.2 above and approved by the City pursuant to Section 5.2 above.
Any contract for the operation or management of the Development entered into by Owner
shall provide that the contract can be terminated as set forth above. Failure to remove the
Management Agent in accordance with the provisions of this Section shall constitute default
under this Agreement, and the City may enforce this provision through legal proceedings as
specified in Section 6.3.
5.5 Apuroval ofManagement Policies. The Owner shall submit its written
management policies with respect to the Development to the 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.
December 15,2000 8
461 9
5.6 ProDertv Maintenance. ' The Owner agrees, for the entire Term of this Agreement,
to maintain all interior and exterior improvements, including 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, orders and regulations of all federal, state, county,
municipal, and other governmental agencies and bodies having or claiming jurisdiction and all
their respective departments, bureaus, and officials.
The City places prime importance on quality maintenance to protect its investment and to
ensure that all City-assisted affordable housing projects within the City are not allowed to
deteriorate due to below-average maintenance. Normal wear and tear of the Development will be
acceptable to the City assuming the Owner agrees to provide all necessary improvements to
assure the Development is maintained in good condition. ne Owner shall make all repairs and
replacements necessary to keep the improvements in good condition and repair.
In the event @at the Owner breaches any of the covenants contained in this section and
such default continues for-a period of five (5) days after written notice from the City with respect
to graffiti, debris, and waste material, or thirty (30) days after written notice with respect to
general maintenance, landscaping and building improvements, (and subject to any stricter
requirements inclW in any applicable City ordinance) then the City, in addition to whatever
other remedy it may have at law or in equity, shall have the right to enter upon the Property and
perform or cause to be performed all such acts and work necessary to cure the default. Pursuant
to such right of entry, the City 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 attach a lien on the Property, or to assess the Property,
in the amount of the reasonable expenditures arising from such acts and work of protection,
maintenance, and preservation by the City andor costs of such cure, including an administrative
charge equal to ten percent (10%) of such expenditures, which amount shall be promptly paid by
the Owner to the City upon demand.
ARTICLE 6
MISCELLANEOUS
6.1 m. The provisions of this Agreement shall apply to the Property for the entire
Term even if the entire Loan is paid in full prior to the end of the Term. This Agreement shall
bind any successor, heir or assign of Owner, whether a change in interest occurs voluntarily or
involuntarily, by operation of law or otherwise, except as expressly released by the City. The
City makes the Loan on the condition, and in consideration of, this provision, and would not do
so otherwise.
6.2 Covenants to Run With the Land. The City and the Owner 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. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Property or
December 15,2000 9
4 620
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 the City expressly release such
conveyed portion of the Property from the requirements of this Agreement.
6.3 Enforcement bv the City. If Owner fails to perform any obligation under this
Agreement, and fails to cure the default within 30 days after the City has notified the Owner in
writing of the default or, if the default cannot be cured within 30 days, failed to commence to
cure within 30 days and thereafter diligently pursue such cure to completion within ninety (90)
days (and subject also to the notice and cure rights of the limited partner of Borrower set forth in
Section 7.1(1) of the Loan Agreement), the City shall have the right to enforce this Agreement by
any or all of the following actions, or any other remedy provided by law:
accelerate the indebt&% evidenced by the Note, and proceed with foreclosure under the Deed
of Trust.
(a) ins the Loan. The City may declare a default under the Note,
(b) Action to Compel Performame or for Damages. The City may bring an
action at law or in equity to compel Owner's performance of its obligations under this
Agreement, &or for datnages.
(c) Remedies Provided Under Loan Agreement. The City may exwcise any
other remedy provided under the Loan Agreement.
6.4 Attomew Fees and Costs. In any action brought to enforce this Agreement, the
prevailing party MI be @titled to all reasonable costs and expenses of suit, &Mag
reasonable attorneys' fees. This section shall be interpreted in accordance with California Civil
Code Section 1717 and judicial decisions interpreting that statute.
6.5 Recording and Fim. The City and the Owner shall cause this Agreement, and
all amendments and supplements to it, to be recorded against the Property in the Official Records
of the County of San Diego.
6.6 Governinr! Law. This Agreement shall be governed by the laws of the State of
California.
6.7 Amendments. This Agreement may be amended only by a written instrument
executed by all the parties hereto or their successors in title, and duly recorded in the real
property records of the County of San Diego, California.
6.8 m. All notices given or certificates delivered under this Agreement shall be
deemed received on the delivery or refusal date shown on the delivery receipt, iE (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 as shown on the signature
page. 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.
December 15,2000 10
4621
6.9 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.
IN WITNESS WHEREOF, the City and the Owner have executed this Agreement by
duly authorized representatives, all on the date first written above.
BORROWER
Pacific Vista Las Flores, L.P. a California
limited Partnership
By: Wakeland Housing and
Development Corpodon, a California
Nonprofit Corporatiw
By: San Diego Interfaith Housing
Foundation, a California Nonprofit
Corporation.
CITY
City of CarlsbLa municipal corporation
ApproveQas to Form:
By:
December 15,2000 11
4622
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California 1
dpersonally known to me
fl-, Ld& ui sdiislatarg m
to be the person(d whose name@&%€!
subscribed to the within instrument and
acknowledged to me th&-xecuted
the same in &he#I+eis authorized
capacity(iad), and that by@heFC(keic
signaturew on the instrument the personw, or
the entity upon behalf of which the person@
acted, executed the instrument.
Place Notary Seal Abave
OPTIONAL
Though the information below is not required by law. if may prove valuable to persons relying on the document
and could prevent fraudulent removal and reafiachmenl of this form to anofher document. \
Document
Document Date: \. Number of Pages:
Signer@) Other Than Named
Capacity(ies) Claimed by Signer
0 Individual
Signer's Name:
0 Corporate Officer -Title@):
0 Partner - 0 Limited 0 General
0 Trustee
0 Attorney in Fact
0 Guardian or Conservator
0 Other:
Signer Is Representing: w
4623
State of California I
ss.
gproved to me on the basis of satisfactory
0 personally known to me
evidence
to be the person(s) whose name(s)@re
subscribed to the .instrument and
acknowledged to me shelthey executed
the same in @er/their 6thorized
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.
,$AJNESS my hand and official seal.
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
0 1997 National NaLq Arrocialion . 9350 De Sola Ave.. P.O. 80" 2402. ChalnMnh. CA 91313.2402 Pmd. No. 5907 Reorder CaIiToli+lee 1-800-8766827
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.
Description of Attached Document
Title or Type of Document:
Capacity(ies) Claimed by Signer
0 Individual
Signer's Name:
Corporate Officer - Title(s):
Partner - Limited 0 General
Attorney in Fact
Trustee
Guardian or Conservator
13 Other: I I
Signer Is Representing: I
4 624
kALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
dpersonally known to me 0 proved to me on the basis of satisfactory
evidence
to be the person@ whose name(@ is/We
subscribed to the within instrument and
acknowledged to me that helsheltbey executed
the same in hislMrltbeir authorized
capacity(ieS), and that by hisltterltheir
the entity upon behalf of which the person@)
acted, executed the instrument.
.- . .. !. signature@) on the instrument the person@), or
Place Notary Sea Above
Though the infomation below is not required by law. if may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attache
Document Date:
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Capacity(ies) Clai -
Signer’s Name: a. L-,~~ .r
0 Individual d CorDorate Officer - Title(s): .. 0 Partner - U Limited 0 General
0 Attorney in Fact
0 Trustee
0 Guardian or Conservator
0 Other:
Signer Is Representing: Btcsh i-
1997 Nsllonel Notary Asao~elBtion. 9350 De Sola Am, P.O. Box 2402. Chataworth. CA 91313-2402 Prod. No. 5907 Reorder: Call Toll-Free 1-800-876-6821
EXHIBIT A
Property Description
A- 1
4626
LOT 134 OF CITY OF CARLSBAD TRACT 97-14, UNIT
NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 13840, FILE IN THE OFFICE OF
THE COUNTY RECORDER OF SAN DIEGO COUNTY,
SEPTEMBER 1 , 1999
C
CITY NOTE
$363,948 February 28 ,200l
G&bad, California
.t. FOR VALUE RECEIVED, and Pacific Vista Las Flores, a California limited partnership
(“Borrower”), promises to pay to the City of Carlsbad (“City”), or order, the principal sum of
Three Hundred Sixty Three Thousand Nine Hundred Forty-Eight Five Dollars ($363,948), or so
much thereof as is advanced to Borrower by the City pursuant to Section 2 of the Loan
Agreement (defined below), plus simple interest accruing at the rate of three percent (3%) per
annum, commencing upon disbursement.
1. Loan Agreement. This City Note is made pursuant to a City Loan Agreement
dated as of February 28 ,2OCl by and between the Borrower and the City (the “City
Loan Agreement”), and as contemplated by a Regulatory Agreement executed by the Borrower
an the City (the “City Regulatory Agreement”).
2. The term of this City Note (the “Term”) shall commence on the date of this Term.
City Note and shall end on the later of: (i) fifty-five (55) years from the date of issuance of a
certificate of occupancy for all units in the Development (as defined in the City Loan
Agreement).
3. Amount and Time of Pavments. All amounts due under this City Note shall be
due and payable as set forth in Section 2 of the City Loan Agreement.
4. Prepavment. Borrower shal1 have the right to prepay all or a portion of the
principal and interest due under this City Note without any charge or penalty being made
therefor.
Deed of Trust.
(the ‘& Deed of Trust).
This City Note is secured by a deed of trust of even date herewith
6. Acceleration. Upon the occurrence of a default under the City Loan Agreement,
City Regulatory Agreement or City Deed of Trust, and expiration of all applicable notice and
cure periods (an “Event of Default”), the City shall have the right to accelerate the Term of this
City Note and declare all of the unpaid principal and accrued interest immediately due and
payable. Any failure by the City to pursue its legal and equitable remedies upon an Event of
Default shall not constitute a waiver of the City’s right to declare an Event of Default and
exercise all of its rights under this City Note, the City Regulatory Agreement, the City Deed of
Trust, and the City Loan Agreement. Nor shall acceptance by the City of any payment provided
for herein constitute a waiver of the City’s right to require prompt payment of any remaining
principal and interest owed.
December 15,200O 1
7. No Offset. Borrower hereby waives any rights of offset it now has or may
hereafter have against the City, its successors and assigns.
8. Waiver; Attorneys’ Fees. Borrower and any endorsers or guarantors of this City
Note, for themselves, their heirs, legal representatives, successors and assigns, respectively,
severally waive diligence, presentment, protest, and demand, and notice of protest, dishonor and
non-payment of this City Note, and expressly waive any rights to be released by reason of any
extension of time or change in terms of payment, or change, alteration or release of any security
given for the payments hereof, and expressly waive the right to plead any and all statutes of
limitations as a defense to any demand on this City Note or agreement to pay the same, and
jointly and severally agree to pay all costs of collection when incurred, including reasonable
attorneys’ fees. If an action is instituted on this City Note, the undersigned promises to pay, in
addition to the costs and disbursements allowed by law, such sum as a court may adjudge
reasonable as attorneys’ fees in such action.
9. Manner and Place of Pavment. All payments of principal and interest due under
this City Note, as well as any additional payments set forth in the City Deed of Trust, shall be
payable in lawful money of the United States of America at the office of the Housing and
Redevelopment Department, City of Carlsbad, 2965 Roosevelt Drive, Suite B, Carlsbad,
California 92008, or such other address as the City may designate in writing.
10. Nonmcoume Obligation. Except as provided below, neither the Borrower nor, if
the Borrower is a partnership, any partner of the Borrower shall have any direct or indirect
personal liability for payment of the principal of, or interest on, this City Note, the City Loan
Agreement, or the City Regulatory Agreement or the performance of the covenants of the
Borrower under the City Deed of Trust. The sole recourse of the City with respect to the
principal of, or interest on, the City Note and defaults by Borrower in the performance of its
covenants under the City Loan Agreement, City Regulatory Agreement, and City Deed of Trust shall be to the property described in the City Deed of Trust; provided, however, that nothing
contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against
all such security for the City Note of all the rights and remedies of the City thereof, or (b) be
deemed in any way to impair the right of the City thereof to assert the unpaid principal amount
of the Note as demand for money within the meaning and intendment of Section 43 1.70 of the
California Code of Civil Procedure or any successor provision thereto. The foregoing limitation
of liability is intended to apply only to the obligation for the repayment of the principal of, and
payment of interest on the Note and the performance of Trustor’s obligations under the City
Regulatory Agreement and the City Deed of Trust, except as hereafter set forth; nothing
contained therein is intended to relieve the Borrower of its obligation to indemnify the City under
Section 6.11 and 6.12(c) of the City Loan Agreement, or liability for (i) fraud or willful
misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create
liens on the Property that are payable or applicable prior to any foreclosure under the City Deed
of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value
of any personal property or fixtures removed or disposed of by Borrower other than in
accordance with the City Deed of Trust; and (iv) the misappropriation of any proceeds under any
insurance policies or awards resulting from condemnation or the exercise of the power of
eminent domain or by reason of damage, loss or destruction to any portion of the Property.
December 15,200O 2
Pacific Vista Las Flores, L.P. a California limited
Partnership
By: Wakeland Housing and Development Corporation, a
California Nonprofit Corporation
By: J
Kenneth L. Sauder, Executive Director
By: San Diego Interfaith Housing Foundation, a California
Nonprofit Corporation
By:
December 15,200O
Recorded at the request Of
Chicago Title
RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:
SAN DIERI CMRllY REMRDER'S MIE OFFICI& awRDs
City of Carlsbad bEGOR' J. SnITH, wufpl REDRER
City Clerk's Office FEES: 68.00
Attn. City Clerk
1200 Carlsbad Village Drive
Carlsbad. CA 92008
4 627 MY: 2
!. 'I ,' I !
161 :. d 2ts'3~716.3l-L(51 IIMI~~~~l~~~lIIIIRII 2001-0120222 ;
< 7. CITY DEED OF TRUST,AND SECURITY AGREEMENT
OF TRUST AND SECURITY AGREEbfENT ("Deed of Trust") is
by and among Pacific Vista Las Flores, a California Limited Partnership, ("Trust&'), Chicago Title Company , acalifornia Co. ("Trustee"), and the
City of Carlsbad, a municipal corporation ("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Twtor hereby
irrevocably gr-, transfm conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's leasehold interest in the property located in the County of San
Diego, State of California, that is described in the attached Exhibit A, incorporated herein by this
reference (the "Property").
TOGETHER WlTH all interest, estates or other claims, both in law and in equity which
Trustor now has or may h&er acquire in the Property and the rents;
TOGETHER WITH Trustor's interest in all easements, rights-of-way and rights used in
connection therewith or as a means of access thereto, including (without limiting the generality
of the foregoing) all tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH TNSWS interest in any and all buildings and improvements of every
kmd and description now or hereafter erected thereon, and all property of the Trustor now or
hereafter affixed to or placed upon the Property;
TOGETHER WITH Trustor's interest in all building materials and equipment now or
hereafter delivered to said property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
December 15,2000 1
4 628
TOGETHER WITH Trustor’s estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or purchase in lieu
thereof of the whole or any part of such property, including without limitation, any awards
resulting from a change of grade of streets and awards for severance damages to the extent
Beneficiary has an interest in such awards for taking as provided in Paragraph 4.1 herein; and
TOGETHER WITH all of Trustor‘s inkrest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property wbich are necessary t~ the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, and all renewals or replacements thereof or articles in substitution therefor, whether or
not the same are, or shall be attached to said building or buildings in any manner.
All of the foregoing, together with the Property, is herein refared to as the “Security.”
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING:
(a) Payment of just indebtedness of Trustor to Beneficiary as set forth in the Note and
the Loan Agreement (both as defined in Article 1 below) until paid or cancelled. Said principal
and other payments shall be due and payable as provided in the Note and the Loan Agreement.
The Note, the Loan Agreement, and the Regulatory Agreement (defined below), and all their
terms are incorporated herein by reference, and this conveyance shall secure any and all
extensions thereof, however evidenced, and
@) Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor‘s obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein; and
(c) Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Loan Documents (defined in Section 1.2 below).
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1 DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms shall
have the following meanings in this Deed of Trust:
December 15.2000 2
Section 1.1 The term "Loan Agreement" mean t at certain City Loan Agreement
between Trustor and Beneficiary dated as of February j&@l, providing for the Beneficiary
to loan to Trustor Three Hundred Sixty Three Thousand Nine Hundred Forty-Eight Five Dollars
($363,948) for the development on the Property of improvements.
Section 1.2 The term "Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement, and the Regulatory Agreement.
Section 1.3 The term "Note" means the City Note in the principal amount of Three
Hundred Sixty Three Thousand Nine Hundred Forty-Eight Five Dollars ($363,948) dated
which is secured by this Deed of Trust. (A copy of the Note is On file with the Beneficiary and
terms and provisions of the Note are incorporated herein by reference.)
February 28 ,200 I, executed by Trustor in favor of the Beneficiary, the payment of
Section 1.4 The term "Principal" means the aggregate of the amounts required to be
paid under the Note.
Section 1.5 The term "Regulatory Agreement" means the Regulatory Agreement by
and between the Trustor, the Beneficiary, and the City of Carlsbad, of even date herewith.
ARTICLE 2
MAINTENANCE AND MODIFICATION OF THE PROPERTY
AND SECURITY
Section 2.1 Mahtenance and Modification of the Property by Trustor.
The Trustor agreea that at all times prior to full payment of the sUm ow& under the Note,
the Trustor will, at the Tn@tor's own expense, maintain, preserve and keep the Security or cause
the Security to be maintained and preserved in good condition, subject to Mcle 4 below. The
Trustor will from time to time make or cause to be made all repairs, replacements and renewals
deemed proper and necessary by it. The Beneficiary shall have no responsibility in any of these
matters or for the making of improvements or additions to the Security.
Trustor agrees to pay fully and discbarge (or cause to be paid fully and discharged) all
claims for labor done and for material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation
of labor on the work or construction on the Security for a continuous period of thirty (30) days or
more, and to take all other reasonable steps to forestall the assertion of claims of lien against the
Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary
as its agent (said agency being coupled with an interest) with the authority, but without any
obligation, to file for record any notices of completion or cessation of labor or any other notice
that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the
Loan Documents; provided, however, that Beneficiary shall exercise its rights as agent of Trustor
only in the event that Trustor shall fail to take, or shall fail to diligently continue to take, those
actions as hereinbefore provided, after notice and expiration of all applicable cure periods.
December 15,2000 3
Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall
not be obligated to pay any claims for labor, materials or services which Trustor in good faith
disputes and is diligently contesting provided that Trustor shall, at Beneficiary's written request,
within thirty (30) days after the filing of any claim of lien, record in the Office of the Recorder of
San Diego County, a surety bond in an amount 1 and 112 times the amount of such claim item to
protect against a claim of lien, or provide such other security reasonably satisfactory to
Beneficiary.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, righta-of-way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
limitation, water, gas, electricity, sewer, telephone and telegraph, or those muired by law. As to
these exceptions, Beneficiary will grant an&or direct the Trustee to grant such easements.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Chatges.
Trustor &all pay, or cause to be paid, prior to delinquency, ail taxes, asses6lllMts,
charges and levies imposed by any public authority or utility company which are or may become
a lien affecting the Security or any part thereof; provided, however, if such taxes, aswsments or
charges may be paid in installments, Trustor may pay in such installments; a~i provided further,
that Trustor shall not be required to pay and discharge any such tax, as$esmmt, ehatge or levy
so long as Trustor is contesting the legality thereof in good faith and by apwpriate proceedings
and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 3.1. The
provisions of this Section 3.1 shall not be construed to require that Trustor maintain a reserve
account, escrow account, impound account or other similar account for the payment of future
taxes, assessments, charges and levies.
In the event that Trustor shall fail to pay any of the foregoing items required by this
Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the
same, after the Beneficiary has notified the Trustor in writing of such failure to pay and the
Trustor fails to fully pay such items within seven (7) business days after receipt of such notice or,
alternatively, provides Beneficiary with evidence Trustor is contesting such items in accordance
with this Section. Any amount so advanced therefor by Beneficiary, together with interest
thereon from the date of such advance at the maximum rate permitted by law, shall become an
additional obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor
agrees to pay all such amounts.
December 15.2OW 4
Section 3.2 Provisions Respecting Insurance.
Trustor agrees to provide insurance conforming in all respects to that required under the
Loan Documents during the course of construction and following completion, and at all times
until all amounts secured by this Deed of Trust have been paid and all other obligations secured
hereunder fidfilled, and this Deed of Trust reconveyed.
All such insurance policies and coverages shall be maintained at Trustor's sole cost and
expense. Certificates of insurance for all of the above insurance policies, showing the same to be
in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time
prior to the Beneficiary's receipt of the entire Principal and all amounts secured by this Deed of
Trust.
Section 3.3 Advences.
In the event the TmWr shall fail to maintain the full inswe coverap required by this
Deed of Trust, the Beneficiary, after at least seven (7) days prior written notice to Trustor, may
(but shall be under no obligation to) take out the required policies of insurance and pay the
premiums on the wile; and all amounts so advanced therefor by the Beneficiary shall become an
additional obligation of the Trustor to the Beneficiary (together with interest as set forth below)
and shall be sewred hereby, which amounts the Trustor agrees to pay on the demand of the
Beneficiary, and if not so paid, shall bear interest from the date of the advance at the lesser rate
of ten percent (10%) per annum or the maximum amount permitted by law.
ARTICLE 4
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.
All judgments, awards of damages, settlements and compensation made in connection
with or in lieu of (1) taking of all OP any part of or any interest in the Prom by or under
assertion of the power of eminent domain, (2) any damage to or destruction of the Property or
any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the
Property ("Funds") are hereby assigned to and shall be paid to, subject to the requirements of
lienholders senior to Beneficiary, the Beneficiaty by a check made payable to the Beneficiary.
Upon the occurrence of an Event of Default (as defined in the Loan Agreement), the Beneficiary
shall be entitled to settle and adjust all claims under insurance policies provided under this Deed
of Trust and may deduct and retain ffom the proceeds of such insurance the amount of all
expenses incurred by it in connection with any such settlement or adjustment. All fire and
standard risk or extended coverage (casualty) insurance proceeds shall be applied to the payment
of the costs of repairing or rebuilding that part of the improvements on the Property damaged or
destroyed if (i) the Trustor agrees in writing within ninety (90) days after payment of the
proceeds of insurance that such repair or rebuilding is economically feasible, and (ii) each lender
in connection with outstanding Construction and Permanent Financing (as defined in the Loan
Agreement) permits such repairing or rebuilding, provided that the extent of Trustor's obligation
December 15,2000 5
to restore the improvements shall be limited to the amount of the insurance proceeds. If the
improvements are not repaired or rebuilt as provided in this Section 4.1, all such proceeds shall
be applied to repayment of outstanding loans including the loan secured by this Deed of Trust, in
the order of lien priority. Application of all or any part of the Funds collected and received by
the Beneficiary or the release thereof shall not cure or waive any default under this Deed of
Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights of any senior
mortgage lender.
ARTICLE 5
AGREEMENTS AFFECTING TI-IE PROPERTY; FURTHER
ASSURANCES; PAl”ENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.
The Trustor skall duly and punctually perform all terms, covenants, aditions and
agreements binding upon it under the Loan Documents and any other agreement of any nature
whatsoever now or hereafter involving or affecting the Security or any part thereof.
Sectiofi 5.2 Agreement to Pay Attorneys’ Fees and Expenses.
In the event of any Event of Default (as defined below) hereunder, and if the Beneficiary
should employ attorneys or incur other expenses for the collection of amounts due or the
enforcement of performance or observance of an obligation or agreement on the part of the
Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the
Beneficiary the reasonable fees of such attorneys and such other reasonable expenses SO incurred
by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the
indebtedness secured by the lien of this Deed of Trust, and shaI1 bear interst fiom the date such
expenses are incuned at the lesser of ten percent (10%) per annum or the maximum amount
permitted by law.
Section 5.3 Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and at the times set out therein.
Section 5.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall
constitute a fixtures filing under the California Commercial Code. As to any personal property
not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement
under the California Commercial Code.
December 15,2000 6
4 633
Section 5.5 Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are reasonably
required to convey to the Beneficiary a valid perfected security interest in the Security. The
Trustor agrees to perform all acts which the Beneficiary may reasonably request so as to enable
the Beneficiary to maintain such valid perfected security interest in the Security in order to
secure the payment of the Note in accordance with its terms. The Beneficiary is authorized to
file a copy of any such financing statement in any jurisdiction(s) as it shall deem appropriate
from time to time in order to protect the security interest established pursuant to this instrument.
Section 5.6 Operation of the Security.
The Trustor shall op@ate the Security (and, in case of a transfer of a portion of the
Security subject to this LIeed of Trust, the transferee shall operate such portion of the Security) in
full compliance with &e Loan Documents.
Section 5.7 Inspection of the Security.
At any atad all re&onable times upon seventy-two (72) hours prim writtennotice, subject
to the rights of tenants, the Beneficiary and its duly authorized agents, attorneys, egp&ts,
engineers, accountants and representatives shall have the right, without payment of charges or
fees, to inspect the &urity.
Section 5.8 Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there shall bti no dimhination
against or segregation of, any person or group of persons on account of me, color, creed,
religion, age, disability, sex, sexual orientation, marital status, national originor ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the
Trustor itself or any person claiming under or through it 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, subtenants, sublessees or vendees in the Security. The
foregoing covenants shall run with the land.
ARTICLE 6
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default.
The following shall constitute Events of Default under this Deed of Trust: (1) failure to
make any payment to be paid by Trustor under the Loan Documents subject to applicable notice
and cure periods set forth in the Loan Documents; (2) failure to observe or perform any of
Trustor’s other covenants, agreements or obligations under the Loan Documents, including,
December 15,2000 7
4 634
without limitation, the provisions concerning discrimination, subject to applicable notice and
cure periods, if any, included in the Loan Documents; or (3) failure to make any payment or
perform any of Trustor's other covenants, agreements, or obligations under any other debt
instruments or regulatory agreement secured by the Property, which default shall not be cured
within the times and in the manner provided therein.
Section 6.2 Acceleration of Maturity.
If an Event of Default shall have occurred and be continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and the unpaid Principal
of the Note shall immediately become due and payable, upon written notice by the Beneficiary to
the Trustor (or automatically where so specified in the Loan Documents), and no omission on the
part of the Beneficiary to exercise such option when entitled to do so sllall be construed as a
waiver of such right.
Section 6.3 The Beneficiary's Right to Enter and Take Posscssion.
If an Event of Defauit shall have occurred and be continuing, the Beneflciary may:
(a) Either in person or by agent, with or without brinejn, any action or
proceeding, or by a receiver appointed by a court, and without regard to the ade~ua~y of its
security, enter upon the Security and take possession thereof (or any part Ulttreofi, iti it8 own
name or in the name of Trustee, and do any acts which it deems necessary ur darjirabk to
preserve the value or marketability of the Property, or part thereof or interest therein, increase the
income therefrom or protect the security thereof. The entering upon and taking possesion of the
Security shall not cwe or waive any Event of Default or Notice of Default (as de&& below)
hereunder or invalidate any act done in response to such Event of Default or pttramt to such
Notice of Default and, notwithstanding the continuance in possession of the Security, Beneficiary
shall be entitled to exercise every right provided for in this Deed of TntSt, or by law upon
occurrence of any Event of Default, including the right to exercise the power of de;
(b) Commence an action to &reclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
("Notice of Default and Election to Sell"), which notice Trustee or Beneficiary shall cause to be
duly filed for record in the Official Records of San Diego County; or
(d) Exercise all other rights and remedies provided herein, or in any other
document or agreement now or hereafter evidencing, creating or securing all or any portion of
the obligations secured hereby, or provided by law.
December 15,2000 8
4 635
Section 6.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained following an Event of Default, the Beneficiary shall give notice to the Trustee (the
“Notice of Sale“) and shall deposit with Trustee this Deed of Trust which is secured hereby (and
the deposit of which shall be deemed to constitute evidence that the unpaid principal amount of
the Note is immediately due and payable), and such receipts and evidence of any expenditures
made that are additionally secured hereby as Trustee may require.
(a) Upon receipt of such notice ffom the Beneficiary, Trustee shall cause to be
recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then
required by law and by this Deed of Tnrst. Trustee shall, without demand on Trustor, after lapse
of such time as may then be required by Iaw and after recordation of such Notice of Default and
Election to Sell and after Notice of Sale having been given as required by law, sell the Security,
at the time and place ofsak3 fixed by it in said Notiee of Sale, whether as a whole or in separate
lots or parcels or items as Trustee shall deem expedient md in such order as it rimy determine
unless specified oth6rwise by the Trustor according to California Civil Code Seation 2924g(b), at
public auction to fhe highest bidder, for cash in law& mney of the United States payable at the
time of sale. Tmtee shall deliver to such purchaser or purchasers thereof its good and sufficient
deed or deeds mveying the property so sold, but without any covenant or warranty, express or
implied. The reeitals in such deed or any matters of facts shall be conclusive proof of the
truthfulness ther&S Any person, including, without limitation, Trustor, T~~tee or Bwficiary,
may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such
purchaser or purchasers.
(b) After deducaing all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of: (i) theunpaid principal amount ofthe Note; (ii) aI1 othermmts owed to
Beneficiary under the Loan Documents; (iii) all other sums then secured hereby; and (iv) the
remainder, if any, to Trustor.
(c) Trustee may postpone salt. of all or my portion of the Property by public
announcement at such time and place of safe, and ffom time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 6.5 Receiver.
If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of
right and without further notice to Trustor or anyone claiming under the Security, and without
regard to the then value of the Security or the interest of Trustor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part
thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice
of any application therefor. Any such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of
December 15,2000 9
4636
entry as provided herein, and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
Section 6.6 Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
Section 6.7 No Waiver.
(a) No delay or mission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default shall exhaust or impair any right, power or
remedy, or shall be colrspmed to be a waiver of any such Event of Defblt or acquiescence
therein; and every right, power and remedy given by this Deed of TW to the Beneficiary may
be exercised from time to time and as ofien as may be deemed expeditious by the Beneficiary.
No consent or waiver, expressed or implied, by the Beneficiary to any breach by the Trustor in
the performance of the obligations hereunder shall be deemed or construed to be a Consent to or
waiver of ob1ig;Stionri of the Trustor hereunder. Failure on the part of the Beneficiary to
complain of any act or faiFpilwe to act or to declare an Event of Default, imgpective ofhow long
such failure continues, shall not constitute a waiver by the Beneficiary of its right hermder or
impair any rights, power or remedies consequent on any Event of Default by the T-r.
(b) Ifthe Beneficiary (i) grants forbearance or an extension af time for the
payment of any mns mmd hereby, (ii) takes other or additional security or the @pent of any
sums secured hereby, (iii) waives or does not exercise any right granted in the Loan Documents,
(iv) releases any pat% of tbe Security from the lien of this Deed of Trust, or otherwise changes
any of the terms, covenants, conditions or agreements in the Loan Docwnents, (v) consents to the
granting of any easement or other right affecting the Security, or (iv) makes or oonsents to any
agreement subordinating the lien hereof, any such act or omission shall not release, discharge,
modi@, change or affect the obligations under this Deed of Trust, or any other obligation of the
Trustor or any subsequent pur&awr of the Security or any part thereof, or any maker, co-signer,
endorser, surety or guarantor (Uhless expressly released); nor shall any such act or omission
preclude the Beneficiary from exercislqg any right, power or privilege herein granted or intended
to be granted in any Event of Default then made or of any subsequent Event of Default, nor,
except as otherwise expressly provided in an instrument or instruments executed by the
Beneficiary shall the lien of this Deed of Trust be altered thereby.
Section 6.8 Suits to Protect the Security
The Beneficiary shall have power to (a) institute and maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its
interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
December 15,2000 10
4 637
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security thereunder or be prejudicial to the interest of the
Beneficiary.
Section 6.9 Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of the Beneficiary
allowed in such proceedings and for any additional amount which may become due and payable
by the Trustor hereunder after such date.
Section 6.10 Waiver.
The Trustor waives presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, aud diligence in
taking any action to collect any sums owing under the Note or in proceedings against the
Security, in connection with the delivery, acceptance, performance, default, endorsement or
guaranty of this Deed of Tmt.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Amendments.
This instrumat cannbt be waived, changed, discharged or terminated orally, but only by
an instrument in writins signed by Beneficiary and Trustor.
Section 7.2 Reconveyance by Trustee.
Upon written request of Beneficiary stating that all sums secured hereby have been paid
or forgiven, and upon surrender of this Deed of Trust to Trustee. for cancellation and retention,
and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to
Trustor, or to the person or persons legally entitled thereto.
Section 7.3 Notices.
If at any time after the execution of this Deed of Trust it shall become necessary or
convenient for one of the parties hereto to serve any notice, demand or communication upon the
other party, such notice, demand or communication shall be in writing and shall be served
personally or by depositing the same in the registered United States mail, return receipt
requested, postage prepaid and (1) if intended for Beneficiary shall be addressed to:
December 15,2000 11
4638
City of Carlsbad
2965 Roosevelt Drive, Suite B
Carlsbad, CA 92008
Attention: Housing and Redevelopment Director
and (2) if intended for Trustor shall be addressed to:
Ken Sauder
Wakeland Housing & Development Corp.
707 Broadway, Suite 1230
Box 34
San Diego, CA 92101
and to: Edison Capital Nodsing Investments
18101 Vofi Kana& Ave., Suite 1700
Irvine, CA 92612-1046
Attn: Asset Manager-Pacific Vista Las Flores
Any no&%, dematld or communication shall be deemed given, received, made or
communicatedm the date personal delivery is effected or, ifmailed in the maonwherein
specified, on the delivery date or date delivery is refused by the addressee, BS shw OQ the return
receipt. Either party may change its address at any time by giving written notice: of such change
to Beneficiary or Trustor as the case may be, in the manner provided herein, at least tcn (1 0) days
prior to the date such change is desired to be effective.
Section 7.4 Captions.
The captian8 or headings at the beginning of each Section hereof am fm the convenience
of the parties and we not 8 part of this Deed of TrUSt.
Section 7.5 Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any term
or provision hereof is declared to be illegal or invalid for any reasog whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of *e
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, shall be considered to have been first
paid or applied to the full payment of that portion of the debt which is not secured or partially
secured by the lien of this Deed of Trust.
December 15,2000 12
4639
Section 7.6 Governing Law.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California.
Section 7.7 Gender and Number.
In this Deed of Trust the singular shall include the plural and the masculine shall include
the feminine and neuter and vice versa, if the context so requires.
Section 7.8 Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mortgage.
Section 7.9 Acti~lls.
Trustor agrees to appear in and defend any action or proceeding purporting to affect the
Security.
Section 7.10 Sub8titution of Trustee.
Beneficiary may &om time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the suwssor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Tmtee herein named or acting hereunder. Each such appomtment and
substitution shall be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Property is situated, shall be conclusive proof of proper
appointment of the successor trustee.
Section 7.11 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law.
Section 7.12 Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of
proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
December 15.2000 13
4640
Section 7. 13 Restrictions under the Internal Revenue Code.
The parties hereto acknowledge that Section 42(h)(6)(E)(ii) of the Internal Revenue code
of 1986, as amended, does not permit the eviction or termination of tenancy (other than for good
cause) of an existing tenant of any low-income unit or any increase in the gross rent with respect
to such unit not otherwise permitted under Section 42 for a period of three (3) years after the date
the building is acquired by foreclosure or instrument in lieu of foreclosure. Beneficiary agrees
that, in the event Beneficiary acquires the Property through foreclosure or an instrument in lieu
of foreclosure, Beneficiary will refrain for a 3-year period thereafter ffom terminating tenancies
(other than for good cause) or increasing rents in a manner not permitted by Section 42.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year
first above written.
TRUSTOR
Pacific Vista Las Flores, a California limited
partnership
By: Wakeland Housing and lhelopmmt
Corporation, a California Nonprofit Corporation
Kenneth L. Sauder, Ejtecutive Director
By: San Diego Interfaith Housing Foundation, a
California Nonprofit Corporation .
By:
December 15,2000 14
4 641
STATE OF CALIFORNIA )
me, the undersigned, a Notary Public, personally appeared
personally known to me (or roved to me on the hasis of
satisfactory evidence) to be the & subscribed to the within
instrument, and acknowledged the same @er/their
authorized capacity(ies), and the instrument the person(s), or
the entity upon behalf of which the person@) acted, executed the instrument.
IF RNlA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of A\ b@fi n
} ss,
A-
Epersonally known to me 0 proved to me on the basis of satisfactory
evidence
to be the person@) whose name@) is/*
subscribed to the within instrument and
acknowledged to me that he/ahe/Wy executed
the same in hisltpdtbeir authorized
capacity(&), and that by hislkerltheir
signature@) on the instrument the person@), or
the entity upon behalf of which the person@)
cted, executed the instrument.
Place Nolary Seal Above
OPT~NAL
Though the infomation below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and mattachment of this form to anolher document.
Description of Attached Document
Title or Type of Document:
Document Date: Number of Pages:
Signer@) Other Than Named Above:
Capacity(ies) Claimed by Signer
0 Corporate Omcer - Title(s):
U Attorney in Fact
0 Partner - 0 Limited 0 General
0 Guardian or Conservator
Signer Is Representing:
0 1997 National Notary Association. 9350 De SotOAVS., PO Box 2402. ChatrWoiVI, CA 91313-2402 Pmd. No 5907 Reorder: Call Toll-Free 1-800-676-6627
EXHIBIT A
(Legal Description of Property)
The land is situated in the State of California, County of San Diego, and is described as follows:
A- 1
LOT 134 OF CITY OF CARLSBAD TRACT 97-14, UNIT
NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 13840, FILE IN THE OFFICE OF
THE COUNTY RECORDER OF SAN DIEGO COUNTY,
SEPTEMBER 1 , 1999
DOC # 2001-0120227 Recorded at the request d
Chicago Title
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
WICIAL RECOWIS sllll DIEW WUHTY EKUIER'S WIG€
GI(EwRy J. MIM, wu(Ty REW FEES: 26.00 4693
~001-0120227
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
2030?(6:31-
SUBORDINATION AGREEMENT
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 INSTRUMENT.
THIS SUBORDINATION AGREEMENT (the "Agreement") is made this 2eday of February,
2001, by PACIFIC VISTA LAS FLORES, L.P., a California limited partnership, owner of the land
hereinafter described and hereinafter referred to as "Owner", and VISTA LAS FLORES CORP., a
Delaware corporation, present owner and holder of the deed of trust hereinafter described and hereinafter
referred to as "Beneficiary".
WITNESSETH
THAT WHEREAS, Owner did execute a deed of trust dated as of February 13,2001, to Chicago
Title Company, as trustee, for the benefit of Beneficiary which deed of trust was recorded in the Official
Records of San Diego County, California, on February 20, 2001, as Document Number 2001-0096011
(the "Vista Trust Deed"). The Vista Trust Deed encumbers the real property described in Exhibit "A"
attached hereto and by this reference incorporated herein and secures the obligations of Owner under that
certain promissory note dated as of February 13, 2001 in the original principal amount of $2,500,000.00
executed by Owner in favor of Beneficiary pursuant to the terms of that certain Construction Loan
Agreement dated as of February 13,2001, between Owner and Beneficiary.
WHEREAS, Owner has executed, or is about to execute, a deed of trust and note in the sum of
$363,948 in favor of the City of Carlsbad, a municipal corporation, hereinafter referred to as "Lender",
recorded concurrently herewith. The deed of trust to be executed in favor of Lender is hereinafter
payable with interest and upon the terms and conditions described therein, which deed of trust is to be
referred to as the "City Trust Deed"; and
WHEREAS, it is a condition precedent to obtaining said loan that the City Trust Deed shall
unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and
superior to the lien or change of the Vista Trust Deed; and
WHEREAS, Lender is willing to make said loan provided the City Trust Deed securing the same
Trust Deed and provided that Beneficiary will specifically and unconditionally subordinate the lien or
is a lien or charge upon the above described property prior and superior to the lien or charge of the Vista
charge of the Vista Trust Deed to the lien or charge of the City Trust Deed in favor of Lender; and
4694
WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner;
and Beneficiary is willing that the City Trust Deed securing the same shall, when recorded, constitute a
lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the Vista
Trust Deed.
NOW, THEREFORE, in consideration 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 the City Trust Deed 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 Vista Trust
Deed.
(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 between the parties hereto
with regard to the subordination of the lien or charge of the Vista Trust Deed to the lien
or charge of the City Trust Deed in favor of Lender above referred to and shall supersede
and cancel aiy prior agreements as to such, or any, subordination including, but not
the subordination of the lien or charge thereof to a deed or deeds of trust or to a mortgage
limited to, those provisions, if any, contained in the Vista Trust Deed, which provide for
or mortgages to be thereafter executed.
Beneficiary declares, agrees and acknowledges that
(a) Beneficiary hereby consents to and approves (i) all provisions of the City Trust Deed 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;
(b) Lender in making disbursements pursuant to any such agreement is under no obligation
by the person or persons to whom Lender disburses such proceeds and any application or
or duty to, nor has Lender represented that it will, see to the application of such proceeds
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; and
(c) Beneficiary intentionally and unconditionally waives, relinquishes and subordinates the
City Tmst Deed in favor of Lender above referred to and understands that in reliance
lien or charge of the Vista Trust Deed in favor of the lien or charge upon said land of the
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.
-2-
4695
This Agreement may be executed in several counterparts, and all such counterparts shall
constitute the same agreement. It shall be necessary to account for only one such counterpart in
proving this Agreement.
NOTICE:
ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY TO OBTAIN A LOAN A
THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF
THE LAND.
"Beneficiary"
VISTA LAS FLORES CORP.,
a Delaware corporation
"OWnd'
PACIFIC VISTA LAS FLOES, L.P.,
a California limited partnership
t bl By: WAKELAND HOUSING AND By: DEVELOPMENT CORPORATION,
Name:-
Title: VICE PRESIDENT a California non-profit corporation,
its General Partner
By:
Title: PRESIDENT Kenneth L. Sauder, Executive Director
By: SAN DIEGO INTERFAITH
HOUSING FOUNDATION,
a California non-profit corporation,
its General Partner
By:
Matthew B. Jumper, President
-3-
This Agreement may be executed in several counterparts, and all such counterparts shall
constitute the same agreement. It shall be necessaly to account for only one such counterpart in
proving this Agreement.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY TO OBTAIN A LOAN A
PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF
THE LAND.
"Beneficiary"
VISTA LAS FLORES CORP.,
a Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
"Owner"
PACIFIC VISTA LAS FLORES, L.P.,
a California limited partnership
By: WAKELAND HOUSING AND
DEVELOPMENT CORPORATION,
a California non-profit corporation,
its General Partner
By: jd J- 54
Kenneth L. Sauder, Executive Director
By: SAN DIEGO INTERFAITH
HOUSING FOUNDATION,
a California non-profit corporation,
its General Partner
-3-
4697
STATE OF CALIFORNIA
COUNTYOF SA- Die40 ) ss.
on a. ZW/ ,beforeme, C/~~*IS,, 11 Bnm ubk?!?7:9, 'h/m& personally appeared
acknowledged to me that Me/they executed the same in &kr/their authorized capacity(ies), and that
v) to be the person(s) whose name(s)je/are subscribed to the within instrument and
by hi&er/their signature(s) acted, executed the instrument.
personally known to me
WITNESS mv hand and official seal.
Signature CL-S &-"-
STATE OF CALIFORNIA
COUNTY OF ) SS,
on ,before me, personally appeared
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) idare subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in hishedtheir authorized capacity(ies), and that
by hishedtheir signature(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
-4-
4698
On Eb. U, 2001 ,before me, tidu GQI'&~o personally appeared
-e) to be the person($) whose name@ @are subsc-nd
acknowledged to me that @shetmey executed the same in@&eir authorized capacity(@), and that
by hishdtheir signature@) acted, executed the instrument.
k.f*N& L. huLCvr personally known to m'e ( ' of
WITNESS my hand and official seal.
&A.4*4* ***,-.
Signature CINDY J. CAR0FAi.i. Commision it 1M38R2 ~o:ow public: - Cali:ccnb
Son oiio Couriy
U"
STATE OF CALI
COUNTY OF &-D ) ss. 0 A ,\.
, before me, o&hk$.h&n - KiL.. personally (ILLb'DcI appeared
r personally known to me (or broved to me on the basis of
person(6) whose name@) is/* subscribed to the within instrument and
by his/her/tlpir signature(qacted, executed the instrument.
acknowledged to me that he/s)le/tMy executed the same in his/ber/wir authorized capacity(i&.), and that
ITNESS my hand and official seal.
-4-
4699
Exhibit "A"
Description of the Subiect Real Prouerty
The real property that is subject to this Subordination Agreement is that certain real property
situated in San Diego County, California that is described as follows:
Lot 134 of City of Carlsbad Tract 97-14, Unit No. 1, in the City of Carlsbad, County of San
Diego, State of California, according to Map thereof No. 13840, filed in the Office of the County
Recorder of San Diego County, September 1, 1999.
DOC # 2001-0120228 Recorded at the request 01
Chicago Title
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Carlsbad FEES: 26.00
rn1CIk REm
g(Y( DIEM "V IXQNER'S OFFICE IXEW J. #I'M, wwpl REwwlER 4 700
City Clerk's Office
1200 Carlsbad Village Drive
Carlsbad, CA 92008
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
>- 'X, Attn: City Clerk
, I \?;
I, ! 4'
203~71631- U5Z
SUBORDINATION AGREEMENT
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 INSTRUMENT.
THIS SUBORDINATION AGREEMENT (the "Agreement") is made this @day of February,
2001, by PACIFIC VISTA LAS FLORES, L.P., a California limited partnership, owner of the land
hereinafter described and hereinafter referred to as "Owner", and STANDARD PACIFIC CORP., a
referred to as "Beneficiary".
Delaware corporation, present owner and holder of the deed of trust hereinafter described and hereinafter
WITNESSETH
THAT WHEREAS, Owner did execute a deed of trust dated as of February 24, 2000, to Chicago
Title Company, as trustee, for the benefit of Beneficiary which deed of trust was recorded in the Official
Records of San Diego County, California, on March 8,2000, as Document Number 2000-01 18350, which
was amended by that certain Amendment to Performance Deed of Trust and Assignment of Rents, dated
February 13, 2001, and recorded February 20, 2001, as Document Number 2001-0096012 (collectively,
the "Performance Trust Deed"). The Performance Trust Deed encumbers the real properly described in
Exhibit "A" attached hereto and by this reference incorporated herein and secured the performance of
certain of the obligations of Owner under that unrecorded Purchase Contract and Escrow Instructions
dated July 14, 1999, as amended by, among other things, that certain Third Amendment to Purchase
Contract and Escrow Instructions dated as of October 30, 2000, and that certain Fourth Amendment to
Purchase Contract and Escrow Instructions dated as of February 13, 2001, between Owner and
Beneficiary.
WHEREAS, Owner has executed, or is about to execute, a deed of trust and note in the sum of
payable with interest and upon the terms and conditions described therein, which deed of trust is to be
$363,948 in favor of the City of Carlsbad, a municipal corporation, hereinafter referred to as "Lender",
recorded concurrently herewith. The deed of trust to be executed in favor of Lender is hereinafter
referred to as the "City Trust Deed"; and
WHEREAS, it is a condition precedent to obtaining said loan that the City Trust Deed shall
unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and
superior to the lien or change of the Performance Trust Deed; and
-1-
WHEREAS, Lender is willing to make said loan provided the City Trust Deed securing the same
Performance Trust Deed and provided that Beneficiary will specifically and unconditionally subordinate
is a lien or charge upon the above described property prior and superior to the lien or charge of the
the lien or charge of the Performance Trust Deed to the lien or charge of the City Trust Deed 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 City Trust Deed securing the same shall, when recorded, constitute a
lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the
Performance Trust Deed.
NOW, THEREFORE, in consideration 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:
That the City Trust Deed securing said note in favor of Lender, and any renewals or
extensions thereof, shall unconditionally be and remain at all times a lien 01 charge on the
property therein described, prior and superior to the lien or charge of the Performance
Trust Deed.
That Lender would not make its loan above described without this subordination
agreement.
That this agreement shall be the whole and only agreement between the parties hereto
with regard to the subordination of the lien or charge of the Performance Trust Deed to
the lien or charge of the City Trust Deed in favor of Lender above referred to and shall
supersede and cancel any prior agreements as to such, or any, subordination including,
but not limited to, those provisions, if any, contained in the Performance Trust Deed,
which provide for the subordination of the lien or charge thereof to a deed or deeds of
trust or to a mortgage or mortgages to be thereafter executed.
Beneficiary declares, agrees and acknowledges that
(a) Beneficiary hereby consents to and approves (i) all provisions of the City Trust Deed in
favor of Lender above referred to and (ii) all agreements, including but not limited to any
proceeds of Lender's loan;
loan or escrow agreements, between Owner and Lender for the disbursement of the
(b) Lender in making disbursements pursuant to any such agreement is under no obligation
by the person or persons to whom Lender disburses such proceeds and any application or
or duty to, nor has Lender represented that it will, see to the application of such proceeds
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; and
(c) Beneficiary intentionally and unconditionally waives, relinquishes and subordinates the
lien or charge of the Performance Trust Deed in favor of the lien or charge upon said land
of the City Trust Deed 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,
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4 702
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.
This Agreement may be executed in several counterparts, and all such counterparts shall
constitute the same agreement. It shall be necessary to account for only one such counterpart in
proving this Agreement.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY TO OBTAIN A LOAN A
PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF
THE LAND
"Beneficiary"
STANDARD PACIFIC CORP.,
a Delaware corporation
~ifl~: AUTHORIZED AGENT
"OWner"
PACIFIC VISTA LAS FLOWS, L.P.,
a California limited partnership
By: WAKELAND HOUSING AND
DEVELOPMENT CORPORATION,
a California non-profit corporation,
its General Partner
Title: AUTHORIZED AGENT
By:
Kenneth L. Sauder, Executive Director
By: SAN DIEGO INTERFAITH
HOUSING FOUNDATION,
a California non-profit corporation,
its General Partner
Matthew B. Jumper, President ~~
-3-
4 703
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.
This Agreement may be executed in several counterparts, and all such counterparts shall
constitute the same agreement. It shall be necessary to account for only one such counterpart in
proving this Agreement.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY TO OBTAIN A LOAN A
PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF
THE LAND.
"Beneficiary"
STANDARD PACIFIC CORP.,
a Delaware corporation
Title:
By:
Name: Title:
"Owner"
PACIFIC VISTA LAS FLORES, L.P.,
a California limited partnership
By: WAKELAND HOUSING AND
DEVELOPMENT CORPORATION,
a California non-profit corporation,
its General Partner
By: SAN DIEGO INTERFAITH
HOUSING FOUNDATION,
a California non-profit corporation,
its General Partner
-3-
STATE OF CALIFORNIA .
COUNTYOF 546 Dw~ D ) ss.
on /&.,4/w 240) I before me, frl5hA gfq// personally appeared
&un &!w,+.,t 70d.t Pl/nrr*'persona~y known to me P
to be the person(s) whose name(s)je/are subscribed to the within instrument and
by hiflberltheir signature(s) acted, executed the instrument.
acknowledged to me that keCskelthey executed the same in h+her/their authorized capacity(ies), and that
WITNESS my hand and official seal.
Signature E" LG-
STATE OF CALIFORNIA
COUNTY OF ) SS.
on . before me,
personally known to me (or proved to me on the basis of
personally appeared
satisfactory evidence) to be the person(s) whose name(s) islare subscribed to the within instrument and
by hishedtheir signature(s) acted, executed the instrument.
acknowledged to me that he/she/they executed the same in hishedtheir authorized capacity(ies), and that
WITNESS my hand and official seal.
Signature
-4-
4705
STATE OF CALIFORNI
COUNTY OF ~hh~ ) ss.
On I=ib. zb, 06, ,before me, ti Nd b &m personally appeared
4) to be the person@ whose .am@) &are subscribed to the within instrument and N& c. SdCL personally known to 'me ("-his of
acknowledged to me executed the same in &hedtheir authorized capacity$&), and that
by hidherhheir the instrument.
WITNESS my hand and official seal.
Signature I"
STATE OF CALIF0
COUNTY OF sax&&* ) SS.
a;, h?t~b\* personally L appeared
r prdved to me on the basis of
son@) whose name@) islm subscribed to the within instrument and
acknowledged to me that he/ske/tkey executed the same in hismer/tbeir authorized capacityks), and that
by hisApr/their signature(4 acted, executed the instrument.
mESS my hand and official seal.
-5-
4706
Exhibit "A"
Description of the Subiect Real Property
rty that is subject to this Subordination Agreement is thi
situated in San Dikgo- County, California that is described as follows:
The I .ea1 propel kt certain I :ea1
Lot 134 of City of Carlsbad Tract 97-14, Unit No. 1, in the City of Carlsbad, County of San
Diego, State of California, according to Map thereof No. 13840, filed in the Office of the County
Recorder of San Diego County, September 1, 1999.