HomeMy WebLinkAboutHarding Street Neighbors LP; 2013-03-15;R.ec~rding ~eque~ted By:
Fidelity National Title Builder Services
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Carlsbad
Housing and Homeless Services Dept.
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attn: Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE SECTION
27383 and 27388.1
DOC# 2022-0032813
111111111111 11111 11111111111111111111111111111111111111111111111111111
Jan 21 , 2022 04:59 PM
OFFICIAL RECORDS Ernest J. Dronenburg, Jr.,
SAN DIEGO COUNTY RECORDER FEES: $104.00 (S B2 Atkins: $0.00)
PAGES: 31
SPACE ABOVE THIS LINE FOR RECORDER"S USE
MODIFICATION AGREEMENT
CITY LOAN DOCUMENTS
(Pacific Wind)
This Modification Agreement (the "Modification Agreement") is entered into as of
November 15, 2021 (the "Effective Date"), by and among the CITY OF CARLSBAD, a
municipal corporation (the "City"), and HARDING STREET NEIGHBORS LP, a California
limited partnership (the "Borrower"). The City and the Borrower are sometimes referred to
in th is Modification Agreement individually as a "Party" and collectively as the "Parties".
RECITALS
A. The Parties entered into that certain Loan Agreement (Carol-Harding
Duplex Property Acquisition), dated as of March 15, 2013 and recorded on March 15,
2013 in the Official Records of San Diego County (the "Official Records") as Document
# 2013-0168695 (the "Loan Agreement"), relating to a loan by the City to the Borrower
in an amount up to Seven Million Four Hundred Eight Thousand Dollars ($7,408,000)
(the ''Loan") for the acquisition of real property and development of affordable housing
on that property (the "Project"). Pursuant to the Loan Agreement, the Borrower
executed that certain Promissory Note, in the original principal balance of Seven Million
Four Hundred Eight Thousand Dollars ($7,408,000), payable to the City, dated March
15, 2013 (the "Promissory Note"). The Promissory Note is secured by that certain
Deed of Trust with Assignment of Rents and Security Agreement, naming the City as
Beneficiary and the Borrower as Truster, dated as of March 15, 2013 and recorded on
March 15, 2013 in the Official Records as Document# 2013-0168694 (the "Deed of
Trust"). Pursuant to the Loan Agreement, the Parties entered that certain Regulatory
Agreement and Declaration of Restrictive Covenants, dated as of March 15, 2013 and
recorded on March 15, 2013 in the Official Records as Document # 2013-0168693 (the
"Regulatory Agreement"). Together, the Loan Agreement, the Promissory Note, the
Deed of Trust and the Regulatory Agreement are collectively referred to in this
Modification Agreement as the "Loan Documents."
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1603\11\3122934.9
Exempt from fee per GC 27388.1 (a) (1);
fee cap of $225.00 reached.
Recording Requested By:
Fidelity National Title Builder Services
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Carlsbad
Housing and Homeless Services Dept.
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attn : Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE SECTION
27383 and 27388.1
SPACE ABOVE THIS LINE FOR RECORDER'S USE
MODIFICATION AGREEMENT
CITY LOAN DOCUMENTS
(Pacific Wind)
This Modification Agreement (the "Modification Agreement") is entered into as of
November 15, 2021 (the "Effective Date"), by and among the CITY OF CARLSBAD, a
municipal corporation {the "City"), and HARDING STREET NEIGHBORS LP , a California
limited partnership (the "Borrower"). The City and the Borrower are sometimes referred to
in this Modification Agreement individually as a "Party" and collectively as the "Parties".
RECITALS
A. The Parties entered into that certain Loan Agreement (Carol-Harding
Duplex Property Acquisition), dated as of March 15, 2013 and recorded on March 15,
2013 in the Official Records of San Diego County (the "Official Records") as Document
# 2013-0168695 (the "Loan Agreement"), relating to a loan by the City to the Borrower
in an amount up to Seven Million Four Hundred Eight Thousand Dollars ($7,408,000)
(the "Loan") for the acquisition of real property and development of affordable housing
on that property (the "Project"). Pursuant to the Loan Agreement, the Borrower
executed that certain Promissory Note, in the original principal balance of Seven Million
Four Hundred Eight Thousand Dollars ($7 ,408,000), payable to the City, dated March
15, 2013 (the "Promissory Note"). The Promissory Note is secured by that certain
Deed of Trust with Assignment of Rents and Security Agreement, naming the City as
Beneficiary and the Borrower as Truster, dated as of March 15 , 2013 and recorded on
March 15, 2013 in the Official Records as Document# 2013-0168694 (the "Deed of
Trust"). Pursuant to the Loan Agreement, the Parties entered that certain Regulatory
Ag reement and Declaration of Restrictive Covenants, dated as of March 15, 2013 and
recorded on March 15, 2013 in the Official Records as Document# 2013-0168693 (the
"Regulatory Agreement"). Together, the Loan Agreement, the Promissory Note, the
Deed of Trust and the Regulatory Agreement are collectively referred to in this
Modification Agreement as the "Loan Documents."
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1603\11\3 122934.9
Exempt from fee per GC 27388.1 (a) (1);
fee cap of $225.00 reached .
B. On August 10, 2017, the Carlsbad Alliance for Responsible Development
filed a verified petition for writ of mandate and complaint against the City and the
Borrower in San Diego County Superior Court, Civil Case No . 37-2017-00029930-CU-
TT-NC, alleging among other things, violations of the California Environmental Quality
Act with regard to the City's land use approvals relative to the Project (the "Lawsuit").
C. The Lawsuit has now concluded and the Borrower has arranged for equity
and lender financing for the development of the affordable housing contemplated by the
Loan Agreement and consistent with the settlement agreement in the Lawsuit. In
connection therewith, the Parties desire to modify certain terms of the Loan Documents.
D. Capitalized terms not defined in this Modification Agreement shall have
the meanings set forth in the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the
Parties and other valuable consideration, the receipt and sufficiency of which
consideration are acknowledged, the Parties agree as follows:
1. Modification of the Loan Agreement. The Loan Agreement is hereby
modified as follows:
160311113122934.9
a. Recital D of the Loan Agreement is deleted and replaced in its
entirety as follows:
"D . The City loaned Borrower Seven Million Four Hundred Eight
Thousand Dollars ($7,408,000) for acquisition of property to be
used to provide affordable housing opportunities for lower and
moderate income households until such time as the Borrower can
move forward as the developer of eighty-seven (87) new
construction residential units and two (2) substantially rehabilitated
residential units. The Loan was funded solely from local
government sources and not with any federal funds ."
b. The definition of "Approved Financing" in Section 1.1 (c) of the Loan
Agreement is deleted and replaced in its entirety as follows :
"(c) 'Approved Financing' means the City's Housing Trust Funds
set forth herein and a private bank loan for the acquisition of
property and for construction and permanent financing for the
Improvements set forth herein ."
c. The definition of "Improvements" in Section 1.1 (n) of the Loan
Agreement is deleted and replaced in its entirety as follows:
"(n) 'Improvements' means eighty-seven (87) new construction
residential units and two (2) substantially rehabilitated residential
units plus related improvements on the Property."
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d. The definition of "Property" in Section 1.1 (s) of the Loan Agreement
is deleted and replaced in its entirety as follows:
"(s) 'Property' means the real property located in the historic
Barrio neighborhood of the City of Carlsbad , County of San Diego ,
State of California, more particularly described in the attached
Exhibit A."
e. The definition of "Term" in Section 1.1 (v) of the Loan Agreement is
deleted and replaced in its entirety as follows :
"(v) 'Term' means the term of the Loan which commenced on the
date of the Loan Agreement and terminates the earlier of either: 1)
fifty-five (55) years from the issuance of a certificate of occupancy
for the Improvements, or its equivalent; or 2) sixty (60) years from
the date of this Modification Agreement."
f. The definition of "Unit" in Section 1.1 (x) of the Loan Agreement is
deleted and replaced in its entirety as follows:
"(x) 'Unit' means one of the eighty-seven (87) units to be newly
constructed and the two (2) units to be substantially rehabilitated on
the Property, forty-three (43) of which the City has required to be
restricted to lower income occupancy and rented at affordable rents
to lower income households pursuant to Section 50053 of the
California Health and Safety Code, and forty-five (45) of which the
City has required to be restricted to moderate income occupancy
and rented at rents affordable to households with income at or
below 90% of the median income."
g. Section 2.2(a) of the Loan Agreement is deleted and replaced in its
entirety as follows :
"(a) Subject to the provisions of Section 2.2(b) below, the
outstanding principal balance of the Loan shall accrue at the
greater of (i) simple interest at the rate of three percent (3%); and
(ii) the applicable federal rate (AFR) as announced by the Internal
Revenue Service applicable for the date of recordation of this
Modification Agreement."
h. Section 2.3(a) of the Loan Agreement is deleted and replaced in its
entirety as follows :
"(a) The Loan funds were used for acquisition of the Property."
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1603\11\3 122934.9
1. Section 2.6(b) of the Loan Agreement is deleted and replaced in its
entirety as follows:
"(b) Annual Repayments. Commencing on May 1st of 2024 or
May 1st of the first year after completion of the Improvements on
the Property, whichever is sooner, and on each May 1st thereafter
throughout the Term of the Loan, the Borrower shall make
repayments of the Loan to the City equal to sixty percent (60%) of
the Residual Receipts calculated for the previous year (the "City's
Share of Residual Receipts"). The Borrower shall retain forty
percent (40%) of the Residual Receipts (the "Borrower's Share of
Residual Receipts"). The Borrower shall provide the City, by each
May 1st following each fiscal year, a report showing the actual
income and expenditures with respect to the Development for the
immediately preceding fiscal year, the calculation of Annual
Operating Expenses, Gross Revenue, and Residual Receipts
(including, the Borrower's Share of Residual Receipts, if any, and
the City's Share of Residual Receipts), the status of all reserve
funds, including without limitation, an annual audited financial
statement for the Development prepared by a certified public
accountant approved by the City. Payments made to the City shall
be credited first against accrued interest and then against
outstanding principal."
J. Section 2.6(e)(1) of the Loan Agreement is deleted and replaced in
its entirety as follows:
"(1) 'Annual Operating Expenses' with respect to a particular fiscal
year shall mean the following costs reasonably and actually
incurred for operation , maintenance and City-approved repairs of
the Development to the extent that they are consistent with the
annual budget for the Development, approved by the City pursuant
to the Regulatory Agreement and with an annual independent audit
performed by a certified public accountant, reasonably acceptable
to the City, using generally accepted accounting principles: property
taxes and assessments imposed on the Development; debt service
(including required escrow and reserve deposits and trustee and
servicing fees) currently due on a non-optional basis (excluding
debt service due from residual receipts or surplus cash of the
Development) on loans associated with development of the
Development and approved by the City as listed on the Approved
Development Budget attached as Exhibit B to this Agreement;
property management fees and reimbursements , not to exceed
fees and reimbursements which are standard in the industry and
pursuant to a management contract approved by the City;
partnership management fees (including asset management fees)
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1603\11\3 122934.9
payable to any partner or affiliate of any partner of Borrower, if any,
not to exceed a total of Twenty-Five Thousand Dollars ($25,000),
with such fees increasing at the rate of three percent (3%) per year;
payment of any previously unpaid portion of the development fee
not exceeding a cumulative development fee, which such fee is
previously approved by the City; payment of a reasonable fee to a
social service provider for the development, which such fee is
previously approved by the City; premiums for property damage
and liability insurance; utility services not paid for directly by
tenants, including water, sewer, and trash collection; maintenance
and repair; any annual license or certificate of occupancy fees
required for operation of the Development; security services;
advertising and marketing; and cash deposited into reserve for
capital replacements of the Development in an amount not to
exceed the amount required in connection with the permanent
financing approved by the City pursuant to Section 2.1 or by the
City if no other lender or investor requires approvals of such
amount; extraordinary operating costs specifically approved in
writing by the City as part of the annual budget approval process
pursuant to the Regulatory Agreement; payments of deductibles in
connection with casualty insurance claims not normally paid from
reserves ; the amount of uninsured losses actually replaced,
repaired or restored, and not normally paid from reserves ; credit
adjusters from cash flow; operating deficit loans ; and other ordinary
and reasonable operating expenses approved in writing by the City
and not listed above. Annual Operating Expenses shall not include
the following: depreciation, amortization, depletion or other non-
cash expenses; any amount expended from a reserve account; and
any capital cost with respect to the Development, as determined by
the accountant for the Development."
k. Sections 2.9(a) of the Loan Agreement is deleted and replaced in
its entirety as follows:
"(a) Loan Agreement and Deed of Trust. The City agrees that the
City Manager shall have the authority to agree to the subordination
of the Loan Agreement and the Deed of Trust to the liens of the
deeds of trust securing the private and other primary financing , as
appropriate, provided the subordination documents provide the City
with reasonably adequate notice and cure rights to enable the City
to avoid foreclosure of the deeds of trust securing the private or
other primary financing and the loan amount subordinated to by the
City does not exceed Thirty-Three Million Dollars ($33,000,000) of
maximum principal loan proceeds (exclusive of protective
advances , accrued and unpaid interest, loan fees, extension fees,
costs and expenses payable to Lender in connection with the
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I 603\11 \3 122934.9
admin istration, modification and enforcement of the Loan
documents (including without limitation, environmental review fees,
appraisal costs and expenses, third -party inspector fees and
expenses and attorney's fees and expenses) and other similar
amounts which, if unpaid , would be added to the principal), unless
good cause is demonstrated to the City Manager to exceed this
amount. In the case of a foreclosure , all past due late payment
charges and prepayment fees to a lender shall be automatically
deemed subordinate in right of payment to the payment in full of the
City Loan ."
I. Section 2.9(b) shall be amended by replacing "Four million dollars
($4,000,000)" with "Thirty-Three Million Dollars ($33,000,000)."
m. Section 3.1 (b) of the Loan Agreement is deleted and replaced in its
entirety as follows:
"(b) As of July 11 , 2017, the Borrower obtained approvals of all
land use entitlements for the Improvements, as slightly modified by
the settlement of the Lawsuit."
n. Section 3.2 of the Loan Agreement is deleted and replaced in its
entirety as follows:
"Section 3.2 Commencement of Construction.
The Borrower shall cause the commencement of construction of the
Improvements no later than February 28, 2022. For the purposes
of this Agreement, the term "commencement of construction" shall
mean the date the Borrower commences, or causes the
commencement of physical demolition and new construction and
physical rehabilitation work on the Property pursuant to a building
permit or other similar permit."
o. Section 3.3 of the Loan Agreement is deleted and replaced in its
entirety as follows :
"Section 3.3 Completion of Construction.
The Borrower shall diligently prosecute construction of the
Improvements to completion , and shall cause the completion of the
Improvements to occur no later than December 31 , 2024, or four
(4) years after construction financing closing for the Improvements,
whichever is later. For the purposes of this Agreement, the term
"completion of construction" shall mean the date the Development
receives its certificate of occupancy for the Improvements, or the
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1603\ I I \3 122934.9
first date that a tenant is placed in residency within the
Development."
p. Section 3.7 of the Loan Agreement is deleted and replaced in its
entirety as follows :
"Section 3.7 Equal Opportunity.
During the construction of the Improvements, there shall be no
discrimination on the basis of race, color, creed, religion , age, sex,
sexual orientation, marital status, national origin , ancestry, or
disability in the hiring , firing , promoting, or demoting of any person
engaged in the construction or improvement work."
q. Section 3.8 of the Loan Agreement is deleted and replaced in its
entirety as follows :
"Section 3.8 Progress Reports .
The Borrower shall provide the City with quarterly progress reports
regarding the status of the construction of the Improvements,
including a certification that the actual costs for construction
conform to the Approved Development Budget, as it may be
amended from time to time pursuant to Section 3.11 below."
r. Section 3.18(a) of the Loan Agreement is deleted and replaced in
its entirety as follows :
"(a) Upon completion of construction of the Improvements,
Borrower shall operate the Development as multifamily housing
such that forty-three of the Units are rented to eligible lower income
occupants and forty-five of the Units are rented to eligible moderate
income occupants at the following rent levels (including rent, a
utility allowance and related services) pursuant to Section 50053 of
the California Health and Safety Code: forty-three (43) Units shall
have monthly rents not to exceed one-twelfth (1112th) of thirty
percent (30%) of sixty percent (60%) of the area median income for
San Diego County as determined by the United States Department
of Housing and Urban Development, forty-five (45) Units shall have
monthly rents not to exceed one-twelfth (1112th) of thirty percent
(30%) of ninety percent (90%) of the area median income for San
Diego County as determined by the United States Department of
Housing and Urban Development, and one (1) Unit shall be used
as a manager's unit, and in conformity with the Regulatory
Agreement and this Agreement."
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1603\11\3122934.9
s. Section 3.18(e) of the Loan Agreement is deleted and replaced in
its entirety as follows:
"(e) The maximum household income of a household occupying
one of the forty-three Units restricted to lower income occupancy
shall not exceed eighty percent (80%) of the area median income
for San Diego County, as set forth by the United States Department
of Housing and Urban Development, and the maximum household
income of a household occupying one of the forty-five Units
restricted to moderate income occupancy shall not exceed ninety
percent (90%) of the area median income for San Diego County, as
set forth by the United States Department of Housing and Urban
Development."
t. Section 3.21 of the Loan Agreement is deleted and replaced in its
entirety as follows :
"Section 3.21 Developer Fee.
The developer fee to be paid to the Borrower or other related
parties for development of the Improvements shall not exceed the
amount set forth in the Approved Development Budget."
u. Section 4.2 of the Loan Agreement is amended to delete the first
paragraph of Section 4.2 in its entirety and replace it as follows:.
"The qualifications and identity of the Borrower are of particular
concern to the City, in view of:"
v. Section 4.5(b) of the Loan Agreement is deleted and replaced in its
entirety as follows:
"(b) The Approved Development Budget anticipates syndicating
low income housing tax credits that will be generated by the
Improvements. The syndication requires the admission of a tax
credit investor as a limited partner in the Borrower. The City hereby
approves the admission of NEF Assignment Corporation, as
nominee, an Illinois not-for-profit corporation , as the limited partner
investor in the Borrower."
w. Section 5.1 (b)(5) of the Loan Agreement is deleted and replaced in
its entirety as follows:
"(5) Acquisition of Additional Properties. Borrower completed
acquisition of all properties comprising the Property by October 31 ,
2014."
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1603\11\3 122934.9
x. Section 6.1 (a) of the Loan Agreement is deleted and replaced in its
entirety as follows :
"(a) Failure to Obtain Approvals. Inability of the Borrower to
obtain all planning approvals and building permits necessary to
construct the Improvements within the time set forth in Article 3."
y. Section 6.1 (c) of the Loan Agreement is deleted and replaced in its
entirety as follows :
"(c) Failure to Construct. Failure of the Borrower to commence
and complete construction of the Improvements as set forth within
Article 3 of this Agreement."
z. Section 7.8 of the Loan Agreement is amended to delete the first
paragraph of Section 7.8 in its entirety and replace it as follows :.
"Except as may be otherwise specifically provided herein ,
whenever any approval, notice, direction, consent, request,
extension of time , waiver of condition , termination, 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
designee, without further approval by the City Council, and any
such action shall be in writing . The amount of the Loan may not be
increased without prior approval of the City Council."
aa . Section 7.10 of the Loan Agreement is amended to revise the
address for the Borrower (but not the addresses for recipients of
copies of notices to the Borrower) as follows:
"Harding Street Neighbors LP
c/o Innovative Housing Opportunities, Inc.
501 N. Golden Circle, Suite 100
Santa Ana , CA 92705
Attn : President and CEO"
bb. Section 7.14 of the Loan Agreement is deleted and replaced in its
entirety as follows:
"Section 7. 14 Force Majeure.
In addition to specific provisions of this Agreement, performance by
either Party shall not be deemed to be in default where delays or
defaults are due to war; insurrection; strikes; lock-outs; riots; floods;
earthquakes; fires ; quarantine restrictions ; pandemics; freight
9
embargoes; lack of transportation; or court order; or any other
similar causes (other than lack of funds of the Borrower or the
Borrower's inability to finance the construction of the
Improvements) beyond the control or without the fault of the Party
claiming an extension of time to perform. An extension of time for
any cause will be deemed granted if notice by the Party claiming
such extension is sent to the other within ten (10) days from the
commencement of the cause and the Party granting the extension
agrees to the extension in writing. In no event shall the City be
required to agree to cumulative delays in excess of one hundred
eighty (180) days."
cc. Exhibit A. Exhibit A, Property Description, to the Loan Agreement
is hereby deleted and replaced in its entirety with the Exhibit A
attached to this Modification Agreement. The Parties acknowledge
that a new parcel map is being recorded in connection with the
development of the Improvements and agree to take all necessary
actions to replace Exhibit A to this Modification Agreement with the
new legal description as set forth in the parcel map once the parcel
map is recorded .
dd. Exhibit B. Exhibit B, Approved Development Budget, to the Loan
Agreement is hereby deleted and replaced in its entirety with the
Exhibit B attached to this Agreement.
2. Modification of the Promissory Note. The Promissory Note is hereby
modified as follows :
1603\1 1\3 122934.9
a. Section 1 of the Promissory Note is hereby deleted and replaced in
its entirety as follows:
"1 . Borrower's Obligation. This promissory note ("Note")
evidences the Borrower's obligation to pay the City the principal
amount of up to Seven Million Four Hundred Eight Thousand
Dollars ($7,408,000), or so much as is disbursed, for the funds
loaned to the Borrower by City to finance the acquisition of the
Property pursuant to the Loan Agreement between the Borrower
and the City, dated March 15, 2013, as modified by that certain
Modification Agreement (the "Modification Agreement") between
the City and the Borrower, dated as of November 15, 2021
(collectively, the "Loan Agreement"). All capitalized terms not
otherwise defined in this Note shall have the meanings set forth in
the Loan Agreement."
b. Section 2 of the Promissory Note is hereby deleted and replaced in
its entirety as follows:
10
"2. Interest. The outstanding principal balance of this Note shall
bear interest at the greater of (i) simple interest at the rate of three
percent (3%) per annum and (ii) the applicable federal rate (AFR)
as announced by the Internal Revenue Service applicable for the
date of recordation of this Modification Agreement, from the date of
disbursement until paid ; provided; however, if a Default occurs,
interest on the principal balance shall begin to accrue, as of the
date of Default (following expiration of applicable notice and cure
periods), and continuing until such time as the Loan funds are
repaid in full or the Default is cured , at the default rate of the lesser
of ten percent (10%), compounded annually, or the highest rate
permitted by law."
c. Section 3 of the Promissory Note is hereby deleted and replaced in
its entirety as follows:
"3 . Term and Repayment Requirements. The term of this Note
shall commence with the date of this Note and shall expire the
earlier of either: 1) fifty-five (55) years from the issuance of a
certificate of occupancy for the Improvements, or its equivalent; or
(2) sixty (60) years from the date of the Modification Agreement.
This Note shall be due and payable as set forth in Section 2.6 of
the Loan Agreement. Repayment of this Note shall be nonrecourse
to the Borrower pursuant to Section 2.8 of the Loan Agreement,
and subject to the exceptions set forth therein."
d. Section 7(a)(i) of the Promissory Note is hereby deleted and
replaced in its entirety as follows :
"(i) Any failure of the Borrower to obtain all planning approvals
and building permits necessary to construct the Improvements in
accordance with the Loan Agreement;"
e. Section 7(a)(iii) of the Promissory Note is hereby deleted and
replaced in its entirety as follows:
"(iii) Any failure of the Borrower to commence and complete
construction of the Improvements within the timeframes set forth in
the Loan Agreement;"
3. Modification of the Deed of Trust. The Deed of Trust is hereby modified
as follows:
1603\11\3122934.9
a. Section 1.1 of the Deed of Trust is hereby deleted and replaced in
its entirety as follows :
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1603\ 11 \3 122934.9
"Section 1.1 The term 'Loan Agreement' means that certain Loan
Agreement between Truster and Beneficiary, dated as of March 15,
2013, as modified by that certain Modification Agreement between
Truster and Beneficiary, dated as of November 15, 2021 (the
"Modification Agreement"), providing for the Beneficiary to loan to
the Truster an amount not to exceed Seven Million Four Hundred
Eight Thousand Dollars ($7,408,000) for the development of the
Property."
b. Section 1.3 of the Deed of Trust is hereby deleted and replaced in
its entirety as follows:
"The term 'Note' means the promissory note in the principal amount
of Seven Million Four Hundred Eight Thousand Dollars
($7,408,000) dated as of March 15, 2013, executed by the Truster
in favor of the Beneficiary, as modified by the Modification
Agreement, the payment of 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.)"
c. Section 1.5 of the Deed of Trust is hereby deleted and replaced in
its entirety as follows:
"The term "Regulatory Agreement" means the regulatory
agreement by and between the Beneficiary and the Truster, dated
as of March 13, 2013 and recorded in the official records of San
Diego County on March 15, 2013 as Document# 2013-0168693,
as modified by the Modification Agreement."
d. Section 8.3 of the Deed of Trust is amended to revise the address
for the Truster (but not the addresses for recipients of copies of
notices to the Truster) as follows:
e.
"Harding Street Neighbors LP
c/o Innovative Housing Opportunities, Inc.
501 N. Golden Circle, Suite 100
Santa Ana, CA 92705
Attn : President and Chief Executive Officer"
Exhibit A. Exhibit A, Property Description , to the Deed of Trust is
hereby deleted and replaced in its entirety with the Exhibit A
attached to this Modification Agreement. The Parties acknowledge
that a new parcel map is being recorded in connection with the
development of the Improvements and agree to take all necessary
actions to replace Exhibit A to this Modification Agreement with the
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new legal description as set forth in the parcel map once the parcel
map is recorded.
4. Modification of the Regulatory Agreement. The Regulatory Agreement is
hereby modified as follows :
1603\11\3 122934.9
a. Recital 1 of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
"1 . The City and the Developer have entered into a Loan
Agreement dated as of March 15, 2013, as modified by that certain
Modification Agreement (the "Modification Agreement") between
the City and the Developer, dated as of November 15 , 2021
(collectively, the "Agreement") under wh ich the City agreed to loan
up to Seven Million Four Hundred Eight Thousand Dollars
($7,408,000) (the "City Loan") to the Developer to finance the
acquisition of the Property and further described in Exhibit A.
Capitalized terms used but not defined in this Agreement shall have
the meanings set forth in the Loan Agreement."
b. Recital 3 of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"3. The Carlsbad Housing Trust Fund must be used to provide
housing for low and moderate income households for the longest
feasible time, determined to be a minimum of fifty-five (55) years.
The City hereby restricts forty-three (43) of the units in the
Development to lower income households, and forty-five (45) of the
units in the Development to moderate income households at ninety
percent (90%) of the median income. There will be one (1)
unrestricted manager's unit."
c. Section 1.1 (c) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"(c) 'Agreement' shall mean this Regulatory Agreement and
Declaration of Restrictive Covenants, as modified by the
Modification Agreement."
d. Section 1.1 (d) of th e Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"(d) 'Agreement Date' shall mean March 15, 2013."
e. Section 1.1 (e) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
13
1603\11\3 122934.9
"(e) 'Assumed Household Size' shall mean one person per
bedroom plus one additional person for each unit. In the event of a
conflict between the maximum rents between this Agreement and
those allowed under the low income housing tax credit program , the
tax credit program rents can apply."
f. Section 1.1 (h) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
"(h) 'Deed of Trust' shall mean the deed of trust, dated as of
March 15, 2013 , in favor of the City on the Developer's interest in
the Property which secures repayment of the City Loan and the
performance of the Loan Agreement, as modified by the
Modification Agreement."
g. Section 1.1 U) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
"U) 'Development' shall mean the Property and the eighty-nine
(89) residential units and related improvements to be constructed or
substantially rehabilitated on the Property, as the same may from
time to time exist.
h. Section 1.1 (I) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"(I) 'Low Income Household' shall mean a household with an
Adjusted Income that does not exceed eighty percent (80%) of the
Area Median Income for San Diego County, and as published by
the United States Department of Housing and Urban Development."
1. Section 1.1 (n) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"(n) 'Moderate Income Household' shall mean a household with
an Adjusted Income which does not exceed ninety percent (90%) of
Median Income, adjusted for Actual Household Size."
J. Section 1.1 (o) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
"(o) 'Moderate Income Units' shall mean the Units, which
pursuant to Sections 2.1 below, are required to be occupied by
Moderate Income Households."
14
1603\11\3 122934.9
k. 1.1 (q) of the Regulatory Agreement is hereby deleted and replaced
in its entirety as follows:
"(q) 'Rent' shall mean the total of monthly payments on behalf of
the Tenant of a Unit for the following: use and occupancy of the
Unit and land and associated facilities, including parking; any
separately charged fees or service charges assessed by the
Developer which are required of all Tenants, other than security
deposits; an allowance for the cost of an adequate level of service
for utilities paid by the Tenant, including garbage collection, sewer,
water, electricity, gas and other heating, cooking and refrigeration
fuel, but not telephone service , cable TV, or internet; and 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 the
Developer, and charged to the Tenant."
I. Section 1.1 (s) of the Regulatory Agreement is hereby deleted and
rep laced in its entirety as follows:
"(s) 'Term' shall mean the term of this Agreement, which shall
commence on the Agreement Date and terminate the earlier of (1)
fifty-five (55) years from the issuance of a certificate of occupancy
for the improvements, or its equivalent; or (2) sixty (60) years from
the date of the Modification Agreement."
m. Section 1.1 (t) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"(t) 'Unit(s)' shall mean one (1) or all of the eighty-nine (89)
rental units to be constructed or substantially rehabilitated on the
Property; of which the City will require forty-three (43) Units to be
specifically restricted and rented to Low Income Households, and
forty-five (45) Units to be specifically restricted and rented to
Moderate Income Households. There will be one (1) unrestricted
manager's unit."
n. Section 2.1 of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"Section 2.1 Occupancy Requirements.
(a) The Developer shall regulate the use and occupancy
of the Units such that forty-three (43) of Units shall be rented to and
occupied by or, if vacant, available for occupancy by Low Income
Households and forty-five (45) Units shall be rented to and
15
1603\11 \3 122934.9
occupied by or, if vacant, available for occupancy by Moderate
Income Households.
(b) Notwithstanding the occupancy and income
requirements in this Section 2.1, the existing tenants at the time of
acquisition within the Development shall not be required to be
displaced unless required by another public agency."
o. Section 2.2(a) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows :
"(a) Low Income Rent. Subject to Section 2.3 below, the Rent
charged to Tenants of the forty-three (43) Units required to be
occupied by Low Income Households shall not exceed one-twelfth
(1112th) of thirty percent (30%) of sixty percent (60%) of Area
Median Income for San Diego County, adjusted for Assumed
Household Size, pursuant to Section 50053 of the California Health
and Safety Code. In the event of a conflict between the maximum
rents between the Health and Safety Code and low income housing
tax credit program rents, the low income housing tax credit program
rent can apply."
p. Section 2.2(c) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
"(c) Moderate Income Rent. Subject to Section 2.3 below, the
Rent charged to Tenants of the forty-five (45) Units required to be
occupied by Moderate Income Households shall not exceed one-
twelfth (1112th) of thirty percent (30%) of ninety percent (90%) of
Area Median Income for San Diego County, adjusted for Assumed
Household Size. In the event of a conflict between the maximum
rents between the Health and Safety Code and the low income
housing tax credit program rents, the low income housing tax
credit program rent can apply."
q. Section 2.2(d) of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
"(d) Assumed Household Size. In calculating the allowable Rent
for the Units, the following shall be utilized: one (1) person per
bedroom , plus one (1) additional person."
r. Section 2.3 of the Regulatory Agreement is hereby deleted and
replaced in its entirety as follows:
"Section 2.3 Increased Income of Tenants.
16
1603\11\3 122934.9
(a) Increased Income Over Low Income. In the event that,
following recertification of a Tenant's income, the Developer
determines that a former Low Income Household, occupying one of
the forty-three (43) Units required to be occupied by Low Income
Households, has an Adjusted Income that exceeds the qualifying
limit for a Low Income Household, but does not exceed ninety
percent (90%) of Median Income for San Diego County, adjusted
for Actual Household Size, then, upon expiration of the Tenant's
lease, and sixty (60) days' written notice to the Tenant, such
household 's Unit shall be considered a Moderate Income Unit, and
the Rent may be increased to the amount permitted under Section
2.2(c), and the Developer shall rent the next available Unit to a Low
Income Household to meet the requirements of Section 2.1.
(b) Increased Income over 90% of Median Income. If, upon
recertification of a Tenant's income, the Developer determines that
a Tenant has an Adjusted Income exceeding ninety percent (90%)
of Area Median Income for San Diego County, adjusted for Actual
Household Size, such Tenant shall be permitted to continue to
occupy the Unit, and, upon expiration of the Tenant's lease, and
sixty (60) days' written notice to the Tenant, the Rent may be
increased to one-twelfth (1112th) of thirty percent (30%) of actual
Adjusted Income of the Tenant, and the Unit shall continue to be
classified as a Moderate Income Unit until the Tenant vacates the
Unit at which time the Unit shall be re-rented to an income-eligible
household to meet the requirements of Section 2.1.
(c) Termination of Occu anc . Upon termination of occupancy
of a Unit by a Tenant, such Unit shall be deemed to be continuously
occupied by a household of the same income level (e.g., Low
Income Household) as the income level of the vacating Tenant,
until such Unit is reoccupied , at which time the income character of
the Un it (e .g., Low Income Household) shall be redetermined ."
s. Section 6.13 of the Regulatory Agreement is amended to revise the
address for the Developer (but not the addresses for recipients of
copies of notices to the Developer) as follows:
"Harding Street Neighbors LP
c/o Innovative Housing Opportunities, Inc.
501 N. Golden Circle, Suite 100
Santa Ana, CA 92705
Attn: President and Chief Executive Officer"
17
t. Exhibit A. Exhibit A, Property Description, to the Regulatory
Agreement is hereby deleted and replaced in its entirety with the
Exhibit A attached to this Modification Agreement. The Parties
acknowledge that a new parcel map is being recorded in
connection with the development of the Improvements and agree to
take all necessary actions to replace Exhibit A to this Modification
Agreement with the new legal description as set forth in the parcel
map once the parcel map is recorded .
5. City Consent. Pursuant to Section 7.8 of the Loan Agreement, the City
Manager is authorized to sign amendments to the Loan Agreement on behalf of the City
provided that such actions do not increase the amount of the Loan.
6. Effective Date. This Agreement and the modifications described in this
Agreement shall be effective as of the Effective Date.
7. Successors and Assigns. This Agreement shall be binding on and inure to
the benefit of the legal representatives, heirs, successors and assigns of the Parties.
8. Invalidity. Any provision of this Agreement which is determined by a court
to be invalid or unenforceable shall be deemed severed here from, and the remaining
provisions shall remain in full force and effect as if the invalid or unenforceable provision
had not been a part of this Agreement.
9. Headings. The headings used in this Agreement are for convenience only
and shall be disregarded in interpreting the substantive provisions of this Agreement.
10. California Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
11 . Counterparts. This Agreement may be signed by the different Parties in
counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same agreement.
[Signatures on Following Pages]
18
1603\ 11 \3 122934.9
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.
BORROWER:
1603\11\3 122934.9
HARDING STREET NEIGHBORS LP ,
a California limited partnership
By : IHO Harding Street LLC,
a California limited liability company,
its managing general partner
By: Innovative Housing Opportunities, Inc.,
a C · · ~-benefit corporation ,
Its er
By :
R chelle Mills
Pr sident and Chief Executive Officer
By: C&C Harding Street, LLC,
a California limited liability company,
its administrative general partner
By : C & C Development Co ., LLC,
a California limited liability company,
its sole member and manager
By:
By:
Todd R. Cottle, Trustee of the 2007 Todd R.
Cottle and Jennifer N. Cottle Revocable Trust,
its member
-------re-
sarryA.Cottle,Tre of The Cottle Family
Trust Dated 3/8/1987 , its member
[Signatures Continue on Following Page]
S-1
CITY: CITY OF ,
a Califor orporation
By:
. City Manager
APPROVED AS TO FORM:
S-2
1603\11\3122934.9
A notary public or other officer completing this certificate verifies only
the identity of the individual who signed the document to which this
certificate is attached, and not the truthfulness, accuracy, or validity of
STATE OF CALI FORNIA
COUNTY OF Orange.
)
)
)
On Ja nu(fl v~ 14. '2.c, 2 z.. , before me, ~~~,-.....~~~-------' Notary
Public, pers ai(y appeared /'?. o e ,-. . C o ~ , who
proved to me on the basis of satisfactory evidence to be e person@ whose nam~
is/are subscribed to the within instrument and acknowledged to me that he/she/~
executed the same in his/her€Ir)authorized capacity@), and that by his/her,@ID
signature{§} on the instrument the person@, or the entity upon behalf of which the
person® acted , executed the instrument.
I certify UNDER PENAL TY OF PERJURY under the laws of the State of California that
the fo regoing paragraph is true and correct.
WITNESS my hand and official seal.
1603\ I I \3 122934.9
•••••••• f
AMY BERING
Noury Public • California :
Orange County s:
Commission If 2370171 -
y Comm. Expires Aug 8, 2025
A notary public or other officer completing this certificate verifies only
the identity of the individual who signed the document to which this
certificate is attached, and not the truthfulness, accuracy, or validity of
STATE OF CALIFORNIA
COUNTY OF Las &hCJ-RW
)
)
)
On Jat1ug_rg/-, l4 1 2o22.. , before me, ~ 8 e rr'n 9 , Notary
Public, pers ~ ally appeared Roche lie If , who
,.,R(Oved to me on the basis of satisfactory evidence to be the person~ whose name~
<..j§/are subscribed to the within instrument and acknowl~d9ed to me that he~hey
executed the same in hi~heir authorized capacity(~). and that by his@;/their
signature¥)' on the instrument the perso#), or the entity upon behalf of which the
person¢ acted , executed the instrument.
I certify UNDER PENAL TY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITN ESS my hand and official seal.
AMY BERING
Notary Public• California z
Orange County ~
Commission# 2370171
y Comm. Expires Aug 8, 2025
I 603\11\3122934 ,9
A notary public or other officer completing this certificate verifies only
the identity of the individual who signed the document to which this
certificate is attached , and not the truthfulness, accuracy, or validity of
STATE OF CALIFORNIA )
)
COUNTY OF SttY\ 11\e~ )
On ~-\ Cl, ~0d-d-s , before me, tJ\r>v-~e.-VLfy 0::' , Notary
Public, personally appeared Sc..o-t\-DA,o...c\ \&)LCk , who
proved to me on the basis of satisfactory evidence to be the personW whose name"W)
ishlfe. subscribed to the within instrument and acknowledged to me that he/.sbe4hey
executed the same in his/herltt:idr authorized capacitytres-), and that by his/l'lerftheir
signature~) on the instrument the person't's), or the entity upon behalf of which the
personts) acted, executed the instrument.
I certify UNDER PENAL TY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
eeeeeeeeeeee~
, MORGEN FRY ~ · ~otary Public -Callfornla :
·~ ,. San o;eto County ~
z Commission • 2268605 -
•., My Comm. Ex~lros DK 2•. 2022
~~
Na~j Notary ublic
1603\11\3 122934.9
ILLEGIBLE NOTARY SEAL DECLARATION
GOVERNMENT CODE SECTION 27361.7
I CERTIFY UNDER PENAL TY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO
WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS:
NAME OF NOTARY ------=-A"-M,_,_Y-=B=E"--'RI=N=G=--------------------
NAME OF COUNTY _____ ....,,O'""'RA,,__,,___,_NG=E==--------------------
DATE COMMISSION EXPIRES -~8~-8~-=20=2=5 _________________ _
COMMISSION NUMBER 2370171
VENDOR NUMBER _Ji V
SIGNED ----ta{f-7-t;;;;.-,-7V"'-------------------------
NNA1
PLACE OF EXECUTION RIVERSIDE CA ---~~===--=~----------------
DATE --------------=1~2=1~2=2,_ ________________ _
Notary Seal Affidavit (notarysealaff)(04-06)
ILLEGIBLE NOTARY SEAL DECLARATION
GOVERNMENT CODE SECTION 27361.7
I CERTIFY UNDER PENAL TY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO
WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS:
NAME OF NOTARY MORGEN FRY
NAME OF COUNTY SAN DIEGO
DATE COMMISSION EXPIRES 12-24-2022
COMMISSION NUMBER 2268605
VENDOR NUMBER ,p NNA1
SIGNED ~
PLACE OF EXECUTION RIVERSIDE CA
DATE 1 21 22
Notary Seal Affidavit (notarysealaff)(04-06)
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF
CARLSBAD IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL A:
LOTS 1 TO 9, INCLUSIVE, 11 TO 13 INCLUSIVE, AND 24 TO 33 INCLUSIVE, OF
PALM VISTA IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO THE MAP NO. 2969, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 16, 1953.
EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 13 OF PALM VISTA,
ACCORDING TO MAP THEREOF NO. 2969 ; THENCE ALONG THE EASTERLY
LINE OF SAID LOT 13, SOUTH 19°17'11 " EAST 161 .15 FEET TO THE
SOUTHEASTERLY CORNER OF SAID LOT 13, SAID POINT BEING ALSO THE
EASTERLY CORNER OF SAID LOT 14; THENCE ALONG THE SOUTHEASTERLY
LINE OF SAID LOT 14, SOUTH 61 °51 '52" WEST 68.06 FEET; THENCE NORTH
08°26'25" WEST 42.85 FEET; THENCE NORTH 14°49'18" WEST 95.30 FEET;
THENCE NORTH 25°13'44" WEST 26 .19 FEET TO A POINT IN THE
NORTHWESTERLY LINE OF SAID LOT 13, SAID POINT BEARS SOUTH 61 °51 '52"
WEST 55.14 FEET FROM SAID MOST NORTHERLY CORNER; THENCE ALONG
SAID NORTHWESTERLY LINE NORTH 61 °51 '52" EAST 55.14 FEET TO THE POINT
OF BEGINNING.
FURTHER EXCEPTING THEREFROM, THOSE PORTIONS OF LOTS 8, 9, 11 AND
12 AS CONVEYED TO THE STATE OF CALIFORNIA FOR HIGHWAY PURPOSES
AS DESCRIBED IN DEED RECORDED AUGUST 24 , 1967 AS FILE NO. 127829
OFFICIAL RECORDS OF SAID COUNTY.
APN(S): (Lot 1); 204-292-01-00; 204-292-02-00 (LOT 2); 204-292-10-00 (LOT 3); 204-
292-11 -00 (LOT 4 ); 204-292-12-00 (LOT 5); 204-292-13-00 (LOT 6); 204-292-14-00
(LOT 7); 204-292-17-00 (LOT 8); 204-292-18-00 (LOT 9); 204-292-20-00 (LOT 11);
204-292-21-00 (LOT 12); 204-292-22-00 (LOT 13); 204-291 -27-00 (LOT 24); 204-291 -
26-00 (LOT 25); 204-291 -25-00 (LOT 26); 204-291 -24-00 (LOT 27); 204-291 -23-00
(LOT 28); 204-291 -19-00 (LOT 29); 204-291-20-00 (LOT 30); 204-291 -21 -00 (LOT 31);
204-291 -22-00 (LOT 32); 204-291 -14-00 (LOT 33)
PARCEL B:
THAT PORTION OF LOT 236 OF THUM LANDS, IN THE CITY OF CARLSBAD,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP NO. 1681,
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
DECEMBER 9, 1915, DESCRIBED AS FOLLOWS:
A-1
1603\11\3 122934.9
BEGINNING AT A POINT ON THE CENTER LINE OF MAGNOLIA AVENUE, DISTANT
THEREON SOUTH 61 °21 ' WEST, 446.86 FEET FROM ITS INTERSECTION WITH
THE CENTER LINE OF ADAMS STREET, SAID POINT OF BEGINNING BEING THE
MOST WESTERLY CORNER OF THE LAND CONVEYED BY THE SOUTH COAST
LAND COMPANY TO DEAN F. PALMER, BY DEED DATED MAY 5, 1927, AND
RECORDED IN BOOK 1335, PAGE 384 DEEDS, RECORDS OF SAID COUNTY;
THENCE ALONG THE SOUTHWESTERLY LINE OF THE LAND AS CONVEYED TO
SAID PALMER AND THE SOUTHEASTERLY PROLONGATION OF SAID LINE,
SOUTH 28°39 ' EAST, A DISTANCE OF 487.47 FEET, MORE OR LESS, TO AN
INTERSECTION WITH THE NORTHEASTERLY PROLONGATION OF THE
NORTHWESTERLY LINE OF THE LAND CONVEYED BY SOUTH COAST LAND
COMPANY TO LAURA JONES BY DEED DATED MAY 14, 1929, AND RECORDED
IN BOOK 1629, PAGE 431 DEEDS, RECORDS OF SAID COUNTY; THENCE ALONG
SAID PROLONGATION AND THE NORTHWESTERLY LINE OF THE LAND SO
CONVEYED TO SAID JONES, SOUTH 61 °21 ' WEST, A DISTANCE OF 536.38
FEET, MORE OR LESS, TO A POINT ON THE NORTHEASTERLY LINE OF THE
LAND CONVEYED BY SOUTH COAST LAND COMPANY TO P.J. WHELDON AND
MARY H. WHELDON BY DEED DATED JULY 7, 1926, AND RECORDED IN BOOK
1180, PAGE 463 DEEDS, RECORDS OF SAID COUNTY; THENCE ALONG THE
SAID NORTHEASTERLY LINE OF THE LAND SO CONVEYED TO SAID WHELDON
AND ALONG THE NORTHWESTERLY PROLONGATION THEREOF, NORTH 28°39 '
WEST, A DISTANCE OF 487.47 FEET, MORE OR LESS, TO A POINT ON THE
CENTER LINE OF MAGNOLIA AVENUE; THENCE ALONG SAID CENTER LINE
NORTH 61 °21 ' EAST, A DISTANCE OF 536.38 FEET, MORE OR LESS, TO THE
POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION LYING NORTHEASTERLY OF THE
FOLLOWING DESCRIBED LINE:
BEGINNING AT A POINT IN THE NORTHWESTERLY BOUNDARY OF LOT 8 OF
PALM VISTA, ACCORDING TO THE MAP THEREOF NO. 2969, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 16,
1953, SAID POINT BEARS SOUTH 61 °58'46" WEST, 71 .99 FEET FROM THE
MOST NORTHERLY CORNER OF SAID LOT 8; THENCE (1) NORTH 22°36 '42"
WEST, 359.22 FEET; THENCE (2) NORTH 18°34'28" WEST, 131 .94 FEET TO A
POINT IN THE CENTER LINE OF MAGNOLIA AVENUE, LAST SAID POINT BEARS
NORTH 61 °54'01 " EAST, 162.74 FEET FROM THE INTERSECTION OF SAID
CENTER LINE AN THE CENTER LINE OF HARDING STREET, FORMERLY 5TH
STREET, AS SAID STREET IS SHOWN ON THE RE-SUBDIVISION OF A PORTION
OF ALLES AVOCADO ACRES, ACCORDING TO THE MAP NO . 2027, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 1927.
APN(S): 204-292-16-00
A-2
1603\11 \3 122934.9
PARCEL C:
LOT 10 OF PALM VISTA IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP NO. 2969, FILED IN THE OFFICE
OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 16, 1953.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF
CALIFORNIA, PER GRANT DEED RECORDED MAY 9, 1967 AS INSTRUMENT NO.
6467 4 OFFICIAL RECORDS.
APN(S): 204-292-19-00
A-3
1603\11\3122934.9
I 603\ I I \3 I 22934 .9
EXHIBIT B
APPROVED DEVELOPMENT BUDGET
(on following pages)
B-1
I Pacific Wind Apts.
Developer: C&C Oevelopment/IHO
Version: Pre-Construction Closing
I PERMANENT SOURCES
BofA Tax-ExemptPerm Loan
City of Carlsbad
General Partner Loan (State Credits)
Deferred Developer Fee
GP Equity (Income From Operations)
Reimbursable Performance Deposit
General Partner Equity
Limited Partner Equity (Federal Credits)
TOTAL
vs. TDC
Financing Surplus/(Gap)
I CONSTRUCTION SOURCES
BofA Tax-Exempt Const. Loan
Taxable Bonds
City of Carlsbad
Deferred Developer Fee
GP Equity (Income From Operations)
General Partner Equity
Limited Partner Equity
Dev. Fee Deferred Until Completion
Other Costs Deferred Until Completion
TOTAL
vs. TDC
Financing Surplus/(Gap)
Amount
$13,225,000
$7,408,000
$9,724,897
$2,982,073
$1,752,783
$1,000,000
$100
i1915131535
$55,606,388
$55,606,388
$0
Amount
$27,000,000
$2,650,000
$7,408,000
$2,982,073
$1,752,783
$100
$11,708,121
$1,728,231
1)77,080
$55,606,388
$55,606,388
$0
FIie: Copy of 220120_Pacific Wind_Closing Sources Uses.xlsx
1603\11\3 122934.9
Revised:
Pagel of 12
1/20/2022
SOURCES OF FUNDS
Total
Interest
3.76%
3.00%
1.00%
Total
Interest
3.70%
3.70%
3.00%
Term
(Yrs) Comments
40 Base Rate
55
55
Term
Final Approved Loan/Rate
CertlHcated State Credits Credit Pricing: $0.88
Federal Tax Credit Pricing: $0.926
(Mnts) Comments
8-2
30 Bonds sized at 51.37% of Aggregate Basis
30
30
60% of Equity from Federal Credits
Refer to Development Budget for Details.
I Pacific W ind Apts.
Developer : C&C Development/IHO
Version: Pre-Construction Closing
Ite m
ACQUISITION
Property Purchase Price
Dernolltlon
Legal: Acquisition
Subtotal Acquisition
CONSTRUCTION Residential Structures
Rehabilitation ( I Duplex)
Offslte Improvements
Site Work
GC Gen. Requirement • New (6%)
GC Overhead • New (2%)
Contractor Profit -New (6%)
GC Gen. Requirement• Rehab (6%)
GC Overhead -Rehab (2%)
Contractor Profit -Rehab (6%)
Construction Contingency (8%)
Subtohll Construction
SOUCQSTS
Local Development Impact Fees
Local Permit Processing Fees
Environmental Studies
Appraisal
Market study
Engineering
Architectural Deslg n & Supervision
Soils Eng lneer
Relocation
Civil Engineering/Survey/Mapping
Dry Utilities & Noise Consultants
Legal: Construction
Legal: Permanent
Legal: Organization of Partnership
Legal: Syndication
Reimbursable Performance Deposit
Title/Recording/Escrow• Acquisition
Title/Record Ing/Escrow -Construction
Predevelopment Loan Closing Costs
Predevelopment Loan Interest
Const. Loan Interest (60% AOB)
Marketing (lease-up, Advertisement, Setup)
Lender construction Inspection
Insurance Deductible
Builder's Risk & Liability Insurance
Real Estate Taxes
TCAC_App/Allocatlon • (Monitoring Fee Below)
Soft Cost contingency
Investor Due Diligence
Aud II/Cost Certification
Developer Fee (Overhead)
Developer Fee ( Profit)
Subtotal Solt Cost:s
COSTS DEl'ERREO IJNTI~ CONVERSION
Title/Recording/Escrow• Permanent
Operating Reserve
TCAC Monitoring Fee
Perm Conversion Fee
Subtotal Deferred Costs
f'INANCING COSTS
Jssuer Origination Fee
Bond Counsel
Constr. Lender Orig, fees
Constr. Lender Expense
Constr. Lender Legal
Perm Lender Orig. Fees
Perm Lender Legal
Trustee Fees
CDLAC Fee
CDIAC Fee
Issuer Fee During Construct Ion
Subtotal l'lnanclns, Costs
TOTAL DEVELOPMENT COST
Copy of 220120_Paclflc Wind_Closing Sources Uses.xlsx
1603\11 \3 122934.9
Total Project
Costs
$9,595,000
$500,000
$20 000
$10,115,000
$18,802,645
$150,000
$250,000
$3,241,000
$1,344,159
$466,996
$1,427,988
$9,000
$3,000
$9,000
$1 796 212
$27,500,000
$2,578,824
$300,362
$120,000
$51,125
$21,300
$225,000
$829,791
$99,745
$2,000,000
$243,401
$109,401
$570,566
$20,000
$5,000
$41,800
$1,000,000
$15,000
$40,000
$7,500
$37,500
$1,974,146
$50,000
$13,000
$25,000
$300,000
$60,000
$22,075
$533,062
$60,000
$29,879
$1,321,595
SJ 964 786
$16,669,858
$20,000
$311,000
$36,080
S10 000
$377,080
$42,325
$55,000
$296,500
$250,217
$65,000
$132,250
$35,000
$6,750
$9,450
$4,448
$47 510
$944,450
$55 606 388
DEVELOPMENT BUDGET
Depreciable Non -
Residential Depredable Amortize
$0 $9,595,000
$0 $500,000
$0 $20 000
$0 $10,115,000 $0
$18,802,645
$150,000
$250,000
$3,241,000
$1,344,159
$466,996
$1,427,988
$9,000
$3,000
$9,000
$1 796 212
$27,500,000 $0 $0
$2,578,824
$300,362
$51,125
$10,650
$225,000
$829,791
$99,745
$86,957 $1,913,043
$243,401
$109,401
$570,566
$0 $20,000
$0 $5,000
$0 $41,800
$0 $1,000,000
$0 $15,000
$40,000
$0 $7,500
$0 $37,500
$1,295,651
$0
$13,000
$25,000
$300,000
$0
$22,075
$351,350
$0 $60,000
$0
$1,321,595
$3 964 786 so
$12,417,204 $3,074,843 $47,075
$0 $20,000
$0 $311,000
$0 $36,080 so SlO 000
$0 $311,000 $66,080
$0 $42,325
$0 $55,000
$296,500
$250,217
$65,000
$0 $132,250
$0 $35,000
$0 $6,750
$0 $9,450
$0 $4,448
$0 S47 510
$611,717 $0 $332,733
$40 528,921 $13 500,843 $445,888
B-3
Revised:
construction
Expense / Rehab Basis
$0 $0
$18,802,645
$150,000
$250,000
$3,241,000
$1,344,159
$466,996
$1,427,988
$9,000
$3,000
$9,000
$1 796 212
$0 $27,500,000
$2,578,824
$300,362
$120,000 $0
$51,125
$10,650 $10,650
$225,000
$829,791
$99,745
$86,957
$243,401
$109,401
$570,566
$0
$0
$0
$0
$0
$40,000
$0
$0
$678,495 $1,295,651
$50,000 $0
$13,000
$25,000
$300,000
$60,000 $0
$0
$181,712 $351,350
$0
$29,879 $0
$1,321,595
SJ 964 786
$1,130,7315 $12,417,204
$0
$0
$0
$0
$0 $0
$0
$0
$296,500
$250,217
$65,000
$0
$0
$0
$0
$0 so
$0 $611,717
$1 130 7315 $40 528,921
Page 2 of 12
1/20/2022
Aggregate
Basis
$9,595,000
$500,000
$20 000
$10,115,000
$18,802,645
$150,000
$250,000
$3,241,000
$1,344,159
$466,996
$1,427,988
$9,000
$3,000
$9,000
Sl 796 212
$27,500,000
$2,578,824
$300,362 so
$51,125
$10,650
$225,000
$829,791
$99,745
$2,000,000
$243,401
$109,401
$570,566
$0
$0
$0
$0
$0
$40,000
$0
$0
$1,295,651
$0
$13,000
$25,000
$300,000
$0
$0
$351,350
$0
$0
$1,321,595
SJ 964 786
$14,330,247
$0
$0
$0
$296,500
$250,217
$65,000
$0
$0
$0
$0
$0 so
$611,717
S52 5515 964
\ \ FIDELITY NATIONAIJ .LE COMPANY >,,, J..'3()).2 75"7 DO._. tt 2013-01 68694
I 11111111 11111111111111111111111 111111111111111 IIIII IIIII IIIII IIII IIII
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Carlsbad
MAR 15, 2013 4:52 PM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
Ernest J. Dronenburg, Jr., COUNTY RECORDER
FEES: 0.00 WAYS: 3 Housing and Neighborhood Services Depaiiment
~ 1200 Carlsbad Village Drive
\ \ \ Carlsbad, CA 92008
d -l \ ~ Attn: Director
DA: 1
PAGES: 14791
111111111111111111111111111111111111111111111111111111111111111111111111 1111111111111
24
6 y)No fee for recording pursuant to
~\ Government Code Section 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(Carol-Harding Duplex Acquisition)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT ("Deed of Trust") is made as of fntJ..rc?i /S-, 2013, by and among
Harding Street Neighbors, LP, a California limited partnership ("Trustor"), Fidelity National
Title Company , a California corporation ("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, Trustor hereby
iITevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the te1ms and conditions
hereinafter set f01th, Trustor's fee interest in th~ prope1ty located in the City of Carlsbad, County
of San Diego, State of California, that is described in the attached Exhibit A, incorporated herein
by this reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trnstor now has or may hereafter acquire in the Prope1iy and the rents;
TOGETHER WITH 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 any and all buildings and improvements of every kind 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 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,
Caroi-Harding Duplex DOT; Approved by CA 3/11/13 1
14792
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Prope1ty;
TOGETHER WITH all 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 have or
may hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without Jim itation, 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;
TOGETHER WITH all of Trustor's interest in all aiticles 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 which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, 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; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal prope11y to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred 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
(defined in Article I below) until paid or cancelled. Said principal and other payments shall be
due and payable as provided in the Note. Said Note and all its terms are incorporated herein by
reference, and this conveyance shall secure any and all extensions thereof, however evidenced;
and
Carol-Harding Duplex DOT; Approved by CA 3/11/13 2
(b) 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 ofTrustor's obligations 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 ofTrustor 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 I
DEFINITIONS
ln addition to the terms defined elsewhere in this Deed of Trust, the following terms shall
have the following meanings in this Deed of Trust:
Section 1.1 The term "Loan Agreement" means that ce1tain Loan Agreement between
Trustor and Beneficiary, dated of even date herewith providing for the Beneficiary to loan to the
Trustor an amount not to exceed Seven Million Four Hundred Eight Thousand Dollars
($7,408,000) for the development of the Property.
Section 1.2 The term "Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement, the Regulatory Agreement, and any other debt, loan or security instruments between
Trustor and the Beneficiary relating to the Property.
Section 1.3 The term "Note" means the promissory note in the principal amount of
Seven Million Four Hundred Eight Thousand Dollars ($7,408,000 ) dated of even date herewith
executed by the Trustor in favor of the Beneficiary, the payment of 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.).
Section 1.4 The term "Principal" means the amount required to be paid under the
Note.
Section 1.5 The term "Regulatory Agreement" means the regulatory agreement by and
between the Beneficiary and the Trustor, dated and recorded in the official Records of San Diego
County concurrently herewith.
ARTICLE 2
MAINTENANCE AND MODIFICATION OF THE PROPERTY
AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
The Trustor agree that at all times prior to full payment of the sum owed under the Note,
Carol-Harding Duplex DOT; Approved by CA 3/11 /13 3
14793
the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Security or cause
the Security to be maintained and preserved in good condition. 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 agree to pay fully and discharge (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 thi11y (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 appoint, designate and authorize 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.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or
claims as Beneficiary shall specify upon laborers, material men, subcontractors or other persons
who have furnished or claim to have furnished labor, services or materials in connection with the
Security. Nothing herein contained shall require Trustor to pay any claims for labor, materials or
services which Trustor in good faith dispute and are diligently contesting provided that Truster,
upon written request of the Beneficiary, shall, 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 I
and 1/2 times the amount of such claim item to protect against a claim of lien.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, rights-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 required by law and as
approved, in writing, by Beneficiary.
Section 2.3 Assignment of Rents.
As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby
absolutely and unconditionally assign and transfer to Beneficiary all the rents and revenues of the
Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless ofto whom the
rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or
Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of
the Propetty to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that
prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant
or agreement of Truster in the Loan Documents, Trustor shall collect and receive all rents and
revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents
Carol-Harding Duplex DOT; Approved by CA 3/11/13 4
14794
and revenues so collected to the sums secured by this Deed of Trust with the balance, so long as 14 7 9 5
no such breach has occurred, to the account of Trustor, it being intended by Trustor and
Beneficiary that this assignment of rents constitutes an absolute assignment and not an
assignment for additional security only. Upon delivery of written notice by Beneficiary to
Trustor of the breach by Trustor of any covenant or agreement ofTrustor in the Loan
Documents, and without the necessity of Beneficiary entering upon and taking and maintaining
full control of the Property in person, by agent or by a court-appointed receiver, Beneficiary shall
immediately be entitled to possession of all rents and revenues of the Property as specified in this
Section 2.3 as the same becomes due and payable, including but not limited to rents then due and
unpaid, and all such rents shall immediately upon delivery of such notice be held by Trustor as
trustee for the benefit of Beneficiary only; provided, however, that the written notice by
Beneficiary to Trustor of the breach by Trustor shall contain a statement that Beneficiary
exercises its rights to such rents. Trustor agrees that commencing upon delivery of such written
notice of Trustor's breach by Beneficiary to Trustor, each tenant of the Property shall make such
rents payable to and pay such rents to Beneficiary or Beneficiary's agents on Beneficiary's
written demand to each tenant therefor, delivered to each tenant personally, by mail or by
delivering such demand to each rental unit, without any liability on the part of said tenant to
inquire further as to the existence of a default by Trustor.
Except as previously approved by the Beneficiary as set forth in the Loan Agreement,
Trustor hereby covenants that Trustor has not executed any prior assignment of said rents, that
Trustor has not performed, and will not perform, any acts or has not executed and will not
execute, any instrument which would prevent Beneficiary from exercising its rights under this
Section 2.3, and that at the time of execution of this Deed of Trust, there has been no anticipation
or prepayment of any of the rents of the Property for more than two (2) months prior to the due
dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept payment
of any rents of the Property more than two (2) months prior to the due dates of such rents.
Trustor fm1her covenant that Trustor will execute and deliver to Beneficiary such further
assignments of rents and revenues of the Prope11y as Beneficiary may from time to time request.
Upon Trustor' breach of any covenant or agreement of Trustor in the Loan Documents,
Beneficiary may in person, by agent or by a court-appointed receiver, regardless of the adequacy
of Beneficiary's security, enter upon and take and maintain full control of the Property in order to
perform all acts necessary and appropriate for the operation and maintenance thereof including,
but not limited to, the execution, cancellation or modification of leases, the collection of all rents
and revenues of the Property, the making of repairs to the Property and the execution or
termination of contracts providing for the management or maintenance of the Property, all on
such terms as are deemed best to protect the security of this Deed of Trust. In the event
Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor's breach of
any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to
the appointment of such receiver. Beneficiary or the receiver shall be entitled to receive a
reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written notice by Beneficiary
to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan
Documents shall be applied first to the costs, if any, of taking control of and managing the
Property and collecting the rents, including, but not limited to, attorney's fees, receiver's fees,
premiums on receiver's bonds, costs of repairs to the Property, premiums on insurance policies,
Carol-Harding Duplex DOT; Approved by CA 3/11/13 5
taxes, assessments and other charges on the Property, and the costs of discharging any obligation
or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this
Deed of Trust. Beneficiary or the receiver shall have access to the books and records used in the
operation and maintenance of the Prope1ty and shall be liable to account only for those rents
actually received. Beneficiary shall not be liable to Trustor, anyone claiming under or through
Trustor or anyone having an interest in the Property by reason of anything done or left undone by
Beneficiary under this Section 2.3.
If the rents of the Prope1ty are not sufficient to meet the costs, if any, of taking control of
and managing the Prope1ty and collecting the rents, any funds expended by Beneficiary for such
purposes shall become indebtedness of Trustor to Beneficiary secured by this Deed of Trust
pursuant to Section 3.3 hereof. Unless Beneficiary and Trustor agree in writing to other terms of
payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting
payment thereof and shal I bear interest from the date of disbursement at the rate stated in
Section 3.3.
Any entering upon and taking and maintaining of control of the Property by Beneficiary
or the receiver and any application of rents as provided herein shall not cure or waive any default
hereunder or invalidate any other right or remedy of Beneficiary under applicable law or
provided herein. This assignment of rents of the Property shall terminate at such time as this
Deed of Trust ceases to secure indebtedness held by Beneficiary. The rights of the Beneficiary
under this Section 2.3 are subject to the rights of any senior mortgage lender.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
Trustor shall pay, or cause to be paid prior to the date of delinquency, all taxes,
assessments, 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, that Truster
shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a)
the legality thereof shall be promptly and actively contested in good faith and by appropriate
proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant
to this Section 3. I. With respect to taxes, special assessments or other similar governmental
charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any
part of the Security; provided, however, if such taxes, assessments or charges may be paid in
installments, Trustor may pay in such installments. Except as provided in clause (b) of the first
sentence of this paragraph, 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 Truster of such failure to pay and the T rustor fails to
fully pay such items within seven (7) business days after receipt of such notice. Any am ount so
advanced therefor by Beneficiary, together with interest thereon from the date of such advance at
Carol-Harding Duplex DOT; Approved by CA 3/11/13 6
14796
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.
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 fulfilled, 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. Trustee is aware that California Civil Code Section 2955.S(a) provides as follows: No
lender shall require a borrower, as a condition of receiving or maintaining a loan secured by real
property, to provide hazard insurance coverage against risks to the improvements on that real
property in an amount exceeding the replacement value of the improvements on the prope11y.
Section 3.3 Advances.
In the event the Trustor shall fail to maintain the full insurance coverage required by this
Deed of Trust or shall fai I to keep the Security in accordance with the Loan Documents, the
Beneficiary, after at least seven (7) days prior notice to Beneficiary, may (but shall be under no
obligation to) take out the required policies of insurance and pay the premiums on the same or
may make such repairs or replacements as are necessary and provide for payment thereof; 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 fo11h below) and shall be secured 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 of eight percent (8%) per annum or
the maximum rate 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 or any part ofor any interest in the Property by or under
asse11ion of the power of eminent domain, (2) any damage to or destruction of the Property or in
any part thereof by insured casualty, and (3) any other injury or damage to all or any pa11 of the
Property ("Funds") are hereby assigned to and shall be paid to the Beneficiary by a check made
payable to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to
collect and receive any funds and is authorized to apply them in whole or in part upon any
indebtedness or obligation secured hereby, in such order and manner as the Beneficiary shall
determine at its sole option. 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 from the
Carol-Harding Duplex DOT; Approved by CA 3/11/13 7
14 797
proceeds of such insurance the amount of all expenses incurred by it in connection with any such 14 7 9 8
settlement or adjustment. A II or any pai1 of the amounts so collected and recovered by the
Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for
its disposition, and Beneficiary agrees to release Funds to Trustor to be used for the restoration
of the Project so long as Beneficiary is reasonably satisfied that the proceeds of insurance,
together with any additional proceeds made available by Trustor, are sufficient to restore the
Project, subject to the rights of any senior rno11gage lender. 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 THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.
The Trustor shall duly and punctually perform all terms, covenants, conditions 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.
Section 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 pai1 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 shall bear interest from the date such
expenses are incurred at the lesser often percent (10%) per annum or the maximum rate
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 by 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 pai1 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.
Carol-Harding Duplex DOT; Approved by CA 3/11/13 8
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 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 their 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 operate the Security (and, in case of a transfer of a portion of the
Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in
full compliance with the Loan Documents.
Section 5.7 Inspection of the Security.
At any and all reasonable times upon seventy-two (72) hours' notice, the Beneficiary and
its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall
have the right, without payment of charges or fees, to inspect the Security.
Section 5.8 Nondiscrimination.
The Trustor herein covenant by and for themselves, their heirs, executors, administrators,
and assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, age, sex, sexual orientation, marital status, national origin or 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, sub lessees or vendees in the Security. The foregoing
covenants shall run with the land.
ARTICLE 6
HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with, and shall not cause or
permit the Property to be in violation of any federal, state or local laws, ordinances or regulations
relating to industrial hygiene or to the environmental conditions on, under or about the Prope1ty
including, but not limited to, soil and ground water conditions. Trustor shall not use, generate,
manufacture, store or dispose of on, under, or about the Prope1ty or transport to or from the
Property 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
Carol-Harding Duplex DOT; Approved by CA 3/11/13 9
14799
hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily kept
and used in and about multifamily residential property.
Trustor shall immediately advise Beneficiary in writing if at any time they receive
written notice of (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to
any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third paity
against Trustor or the Prope1ty 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 hereinafter referred to a "Hazardous Materials Claims"); and (iii) Trustor's discovery of
any occurrence or condition on any real property adjoining or in the vicinity of the Property that
could cause the Property or any part thereof to be classified as "border-zone property" under the
provision of California Health and Safety Code, Sections 25220 et~., or any regulation
adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership,
occupancy, transferability or use of the Prope1ty under any Hazardous Materials Law.
Beneficiary shall have the right to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to
have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall
indemnify and hold harmless Beneficiary and its boardmembers, supervisors, directors, officers,
employees, agents, successors and assigns 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, under, or about
the Property including without limitation: (a) all foreseeable consequential damages; (b) the costs
of any required or necessary repair, cleanup or detoxification of the Prope1ty and the preparation
and implementation of any closure, remedial or other required plans; and (c) all reasonable costs
and expenses incurred by Beneficiary in connection with clauses (a) and (b), including but not
limited to reasonable attorneys' fees.
Without Beneficiary's prior written consent, which shall not be unreasonably withheld,
Trustor shall not take any remedial action in response to the presence of any Hazardous
Materials on, under or about the Property, nor enter into any settlement agreement, consent
decree, or other compromise in respect to any Hazardous Material Claims, which remedial
action, settlement, consent decree or compromise might, in Beneficiary's reasonable judgement,
impair the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's
prior consent shall not be necessary in the event that the presence of Hazardous Materials on,
under, or about the Property 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 Beneficiary's consent before taking such action, provided that
in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken.
Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if
either (i) a particular rem edial action is ordered by a court of competent jurisdiction, (ii) Trustor
will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required
action; (iii) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no
reasonable alternative to such remedial action which would result in less impairment of
Beneficiary's security hereunder; or (iv) the action has been agreed to by Beneficiary.
Carol-Harding Duplex DOT; Approved by CA 3/11/13 ] 0
14800
The Trustor hereby acknowledges and agrees that (i) this Article is intended as the
Beneficiary's written request for information (and the Trustor' response) concerning the 14801
environmental condition of the Prope11y as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other
Loan Documents (together with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the property is intended by the
Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code
of Civil Procedure Section 736.
In the event that any portion of the Property is determined to be "environmentally
impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or
to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section
726.5(e)(l)), then, without otherwise limiting or in any way affecting the Beneficiary's or the
Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its
rights under California Code of Civil Procedure Section 726.5(a) to (l) waive its lien on such
environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and
remedies of an unsecured creditor, including reduction of its claim against the Trustor to
judgment, and (b) any other rights and remedies permitted by law. For purposes of determining
the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.S(a), the Trustor shall be deemed to have willfully permitted or
acquiesced in a release or threatened release of hazardous materials, within the meaning of
California Code of Civil Procedure Section 726.S(d)(I), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Prope11y and the Trustor knew or should have known of
the activity by such lessee, occupant, or user which caused or contributed to the release or
threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred
by the Beneficiary in connection with any action commenced under this paragraph, including any
action required by California Code of Civil Procedure Section 726.5(b) to determine the degree
to which the Prope11y is environmentally impaired, plus interest thereon at the rate specified in
the Note until paid, shall be added to the indebtedness secured by this Deed of Trust and shall be
due and payable to the Beneficiary upon its demand made at any time following the conclusion
of such action.
ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
The following shall constitute Events of Defau It following the expiration of any
applicable notice and cure periods: (l) failure to make any payment to be paid by Trustor under
the Loan Documents; (2) failure to observe or perform any of Trustor's other covenants,
agreements or obligations under the Loan Documents, including, without limitation, the
provisions concerning discrimination; 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 Propet1y, which default shall not be cured within the times
and in the manner provided therein.
Carol-Harding Duplex DOT; Approved by CA 3/11/13 J)
Section 7.2 Acceleration of Maturity.
If an Event of Defau It 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
pait of the Beneficiary to exercise such option when entitled to do so shall be construed as a
waiver of such right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession.
If an Event of Default shall have occurred and be continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Security and take possession thereof ( or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts which it deems
necessary or desirable 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 possession of the Security shall not cure or waive any Event of Default or Notice of
Default (as defined below) hereunder or invalidate any act done in response to such Default or
pursuant 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 Trust,
or by law upon occurrence of any Event of Default, including the right to exercise the power of
sale;
(b) Commence an action to foreclose 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, in the instruments
by which the Trustor acquired title to any Security, 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.
Section 7.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, 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.
Carol-Harding Duplex DOT; Approved by CA 3/11/13 12
14802
14803"
(a) Upon receipt of such notice from 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 Trust. Trustee shall, without demand on Trustor, after lapse
of such time as may then be required by law 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 of sale fixed by it in said Notice of Sale, whether as a whole or in separate
lots or parcels or items as Trustee shall deem expedient and in such order as it may determine
unless specified otherwise by the Trustor according to California Civil Code Section 2924g(b), at
public auction to the highest bidder, for cash in lawful money of the United States payable at the
time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient
deed or deeds conveying the property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed or any matters of facts shall be conclusive proof of the
truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary,
may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such
purchaser or purchasers.
(b) After deducting 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) the unpaid Principal amount of the Note; (ii) all other amounts 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 sale of all or any portion of the Property by public
announcement at such time and place of sale, and from 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 7.5 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 ofTrustor 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 consent to such appointment and waives fwiher 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
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 7.6 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.
Carol-Harding Duplex DOT; Approved by CA 3/11/13 13
Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default shall exhaust or impair any such right, power or
remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's expressed or implied consent to a breach by Trustor, or a waiver of any obligation
of Trustor hereunder shall not be deemed or construed to be a consent to any subsequent breach,
or further waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure
on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of
Default, irrespective of how long such failure continues, shall not constitute a waiver by the
Beneficiary of its right hereunder or impair any rights, power or remedies consequent on any
Event of Default by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the
payment of any sums secured hereby, (ii) takes other or additional security or the payment of any
sums secured hereby, (iii) waives or does not exercise any right granted in the Loan Documents,
(iv) releases any pa1i of the Security from the lien of this Deed of Trust, or otherwise changes
any of the terms, covenants, conditions or agreements in the Loan Documents, (v) consents to the
granting of any easement or other right affecting the Security, or (iv) makes or consents to any
agreement subordinating the lien hereof, any such act or omission shall not release, discharge,
modify, change or affect the original liability under this Deed of Trust, or any other obligation of
the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-
signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or
omission preclude the Beneficiary from exercising any right, power or privilege herein granted
or intended to be granted in any Event of Default then made or ofany 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 7.8 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
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 7.9 Trustee May File Proofs of Claim .
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, their creditors or their
property, the Trustee, 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
Carol-Harding Duplex DOT; Approved by CA 3/11/1 3 ] 4
14804
Beneficiary allowed in such proceedings and for any additional amount which may become due 14 SQ S
and payable by the Trustor hereunder after such date.
Section 7 .10 Waiver.
The Trustor waive presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, and 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 Trust.
Section 8.1 Amendments.
ARTICLE 8
MISCELLANEOUS
This instrument cannot be waived, changed, discharged or terminated orally, but only by
an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee.
Upon written request of Beneficiary stating that all sums secured hereby have been paid
or forgiven, that all obligations to be performed by the Trustee under the Loan Documents
(including, but not limited to, the operation of the Prope1ty in accordance with, and for the entire
term of, the Regulatory Agreement), 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 8.3 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, by reputable overnight delivery service, 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:
City of Carlsbad
Housing and Neighborhood Services Department
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attn: Housing and Neighborhood Services Director
Carol-Harding Duplex DOT; Approved by CA 3/11/13 ] 5
and (2) if intended for Trustor shall be addressed to:
Harding Street Neighbors LP
C/O Irvine Housing Opportunities
19772 MacArthur Blvd, Suite 110
Irvine, Ca. 92612
Attn: Chief Executive Officer
and copies to:
C& C Development Co
14211 Yorba Street, Suite 200
Tustin, Ca. 92780
Goldfarb & Lipman LLP
1300 Clay Street I I th Floor
Oakland, Ca. 94612
Attn: Luis A. Rodriguez
Goldfarb & Lipman LLP
1300 Clay Street 11th Floor
Oakland, Ca. 94612
Attn: Amy DeVaudrenil
Any notice, demand or communication shall be deemed given, received, made or communicated
on the date personal delivery is effected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as shown on 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 ten ( I 0) days prior to the
date such change is desired to be effective.
Section 8.4 Successors and Joint T rustor.
Where an obligation is created herein binding upon Trustor, the obligation shall also
apply to and bind any transferee or successors in interest. Where the terms of the Deed of Trust
have the effect of creating an obligation of the T rustor and transferees, such obligation shall be
deemed to be a joint and several obligation of the Trustor and such transferees. Where Trustor is
more than one entity or person, all obligations of Trustor shall be deemed to be a joint and
several obligation of each and every entity and person comprising Trustor.
Section 8.5 Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Carol-Harding Duplex DOT; Approved by CA 3/11/13 16
14806·
Section 8.6 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 reason 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 the
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.
Section 8.7 Governing Law.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California.
Section 8.8 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 8.9 Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mo1tgage shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mo1tgage.
Section 8.10 Actions.
Trustor agree to appear in and defend any action or proceeding purporting to affect the
Security.
Section 8.11 Substitution of Trustee.
Beneficiary may from 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 successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place ofrecord, 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 8.12 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.
Carol-Harding Duplex DOT; Approved by CA 3/11/13 ) 7
14807
Section 8.13 Subordination.
The rights and remedies of the Beneficiary under this Deed of Trust shall be subject in all
respects to the terms and conditions of that ce1tain subordination agreement by and among the
Beneficiary, the Trustor, and Bank of America, N .A, as trustee, recorded concurrently herewith.
Section 8.14 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Carol-Harding Duplex DOT; Approved by CA 3/11/13 18
14808
(
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first above written. 14 8 Q 9
TRUSTOR:
Harding Street Neighbors LP,
a California limited partnership
By: IHO Harding Street LLC
Its: managing general paitner
Its: sole member
By: __ __,,,_-=-___.,,,,--=-.l!f,,<~"-""""""-=----
Patricia C. Whitaker
Its: Chief Executive Officer
By: C&C Harding Street, LLC
Its: administrative ~
By: ___ ~ ___ /2----_______ _
Todd R. Cottle
Its: Member
By: The Cw amily Trust dated 3/8/1987
By: ·a ---7~
Barry Aottle
Its: Trustee
PROPER NOTARIAL ACKNOWLEDGEMENT OF EXECUTION MUST BE ATTACHED
Carol-Harding Duplex DOT; Approved by CA 3/11/13 19
ACKNOWLEDGMENT 14810
State of California
County of Orange
on March 13 2013 before me, Rosalba Ruiz, Notary Public
(insert name and title of the officer)
personally appeared Patricia C. Whitaker----------------------------------------------------------
who proved to me on the basis of satisfactory evidence to be the person~ whose name(~<@are-
subscribed to the within instrument and acknowledged to me that l'te/(me'/they executed the same in
rnsQ fue+r authorized capacity(~, and that by Ai~tfleif-signature(51-0n the instrument the
person~er, or the entity upon behalf of which the person(-&, acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
RO SALBA RUIZ
Commission # 1934781 j Notary Public • California i
z Orange County ~ J. ; ~ ·• c ,Mt %0T'D· :xeir:s ,M:y },}~1 tl
(Seal)
(
ACKNOWLEDGMENT 14811
State of California
County of Orange
on March 13 2013 before me, Rosalba Ruiz, Notary Public
(insert name and title of the officer)
personally appeared Todd R. Cottle ----------------------------------------------------------------
who proved to me on the basis of satisfactory evidence to be the personfst whose namefs) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(-+esf, and that by his/her/their signaturefst on the instrument the
personfst, or the entity upon behalf of which the personfst acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
~ .................................. """"~
ROSALBA RUIZ
. Commission # 1934781 j ;-,,; Notary Public • California ~
z · ~ · Orange County ~ J.; ~ · .. ,M1 ~OT~· Pe'r:s.M:xJ,}~1;(
(Seal)
ACKNOWLEDGMENT 14812
State of California
County of Orange
On March 13 2013 before me, Rosalba Ruiz, Notary Public
(insert name and title of the officer)
personally appeared Barry A. Cottle ----------------------------------------------------------------
who proved to me on the basis of satisfactory evidence to be the personW whose namefs) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacityfiesj, and that by his/her/their signatureW on the instrument the
personW, or the entity upon behalf of which the personW acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
ROSALBA RUIZ
WITNESS my hand and official • Commission # 1934781 i '. ·• Notary Public • California ~
z Orange County ?: t • ~ 0 0 !t ~oTru· exgir:s.M:YJ,}~1~
(Seal)
EXHIBIT A
LEGAL DESCRIPTION 14813
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL A:
LOTS I TO 9, INCLUSIVE, 11 TO 13 INCLUSIVE, AND 24 TO 33 INCLUSIVE, OF PALM VISTA IN THE
CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALlfORNIA, ACCORDING TO THE MAP
THEREOF NO. 2969, FILED IN THE OfflCE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
MARCH 16, 1953.
EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 13 OF PALM VISTA, ACCORDING TO MAP
THEREOF NO. 2969; THENCE ALONG THE EASTERLY LINE OF SAID LOT 13, SOUTH 19°17'1 l" EAST
161.15 FEET TO THE SOUTHEASTERLY CORNER OF SAID LOT 13, SAID POINT BEING ALSO THE
EASTERLY CORNER OF SAID LOT 14; THENCE ALONG THE SOUTHEASTERLY LINE OF SAID LOT 14,
SOUTH 61°51'52" WEST 68.06 FEET; THENCE NORTH 08°26'25" WEST 42.85 FEET; THENCE NORTH
14°49'18" WEST 95.30 FEET; THENCE NORTH 25°13 '44" WEST 26.19 FEET TO A POINT IN THE
NORTHWESTERLY LINE OF SAID LOT 13, SAID POINT BEARS SOUTH 61°51 '52" WEST 55.14 FEET
FROM SAID MOST NORTHERLY CORNER; THENCE ALONG SAID NORTHWESTERLY LINE NORTH
61°51'52" EAST 55.14 FEET TO THE POINT OF BEGINNING.
FURTHER EXCEPTING THEREFROM, THOSE PORTIONS OF LOTS 8, 9, 11 AND 12 AS CONVEYED TO
THE ST ATE OF CALIFORNIA FOR HIGHWAY PURPOSES AS DESCRIBED IN DEED RECORDED
AUGUST 24, 1967 AS FILE NO. 127829 OF OFFICIAL RECORDS OF SAID COUNTY.
APN: 204-292-01 (LOT 1); 204-292-02 (LOT 2); 204-292-10 (LOT 3); 204-292-11 (LOT 4); 204-292-12 (LOT 5);
204-292-13 (LOT 6); 204-292-14 (LOT 7); 204-292-17 (LOT 8); 204-292-18 (LOT 9); 204-292-20 (LOT 11 ); 204-
292-21 (LOT 12); 204-292-22 (LOT 13); 204-291-27 (LOT 24); 204-291-26 (LOT 25); 204-291-25 (LOT 26); 204-
291-24 (LOT 27); 204-291 -23 (LOT 28); 204-291-19 (LOT 29); 204-291-20 (LOT 30); 204-291-21 (LOT 31 ); 204-
291-22 (LOT 32); 204-291-14 (LOT 33)
PARCEL B:
THAT PORTION OF LOT 236 OF THUM LANDS, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1681, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 9, 1915, DESCRIBED AS f'OLLOWS:
BEGINNING AT A POINT ON THE CENTER LINE OF MAGNOLIA AVENUE, DISTANT THEREON SOUTH
61°21 ' WEST, 446.86 FEET FROM ITS INTERSECTION WITH THE CENTER LINE OF ADAMS STREET,
SAID POINT OF BEGINNING BEING THE MOST WESTERLY CORNER OF THE LAND CONVEYED BY
THE SOUTH COAST LAND COMPANY TO DEAN F. PALMER, BY DEED DATED MAY 5, 1927, AND
RECORDED IN BOOK 1335, PAGE 384 OF DEEDS, RECORDS OF SAID COUNTY; THENCE ALONG THE
SOUTHWESTERLY LINE OF THE LAND AS CONVEYED TO SAID PALMER AND THE
SOUTHEASTERLY PROLONGATION OF SAID LINE, SOUTH 28°39' EAST, A DISTANCE OF 487 .47 FEET,
MORE OR LESS, TO AN INTERSECTION WITH THE NORTHEASTERLY PROLONGATION OF THE
NORTHWESTERLY LINE OF THE LAND CONVEYED BY SOUTH COAST LAND COMPANY TO LAURA
JONES BY DEED DATED MAY 14, 1929, AND RECORDED IN BOOK 1629, PAGE 43 1 OF DEEDS,
RECORDS OF SAID COUNTY; THENCE ALONG SAID PROLONGAT ION AND THE NORTHWESTERLY
LINE OF THE LAND SO CONVEYED TO SAID JONES, SOUTH 6 I 0 21 ' WEST, A DISTANCE OF 536.38
14814
FEET, MORE OR LESS, TO A POINT ON THE NORTHEASTERLY LINE OF THE LAND CONVEYED BY
SOUTH COAST LAND COMPANY TO P.J. WHELDON AND MARY H. WHELDON BY DEED DATED
JULY 7, 1926, AND RECORDED IN BOOK 1180, PAGE 463 OF DEEDS, RECORDS OF SAID COUNTY;
THENCE ALONG THE SAID NORTHEASTERLY LINE OF THE LAND SO CONVEYED TO SAID
WHELDON AND ALONG THE NORTHWESTERLY PROLONGATION THEREOF, NORTH 28°39' WEST, A
DISTANCE OF 487.47 FEET, MORE OR LESS, TO A POINT ON THJ;: CENTER LINE OF MAGNOLIA
AVENUE; THENCE ALONG SAID CENTER LINE NORTH 6 I 0 21' EAST, A DISTANCE OF 536.38 FEET,
MORE OR LESS, TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION LYING NORTHEASTERLY OF THE FOLLOWING
DESCRIBED LINE:
BEGINNING AT A POINT IN THE NORTHWESTERLY BOUNDARY OF LOT 8 OF PALM VISTA,
ACCORDING TO THE MAP THEREOF NO. 2969, FILED IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY, MARCH 16, 1953, SAID POlNT BEARS SOUTH 61 °58'46" WEST, 71.99 FEET
FROM THE MOST NORTHERLY CORNER OF SAID LOT 8; THENCE (I) NORTH 22°36'42" WEST, 359.22
FEET; THENCE (2) NORTH 18°34'28" WEST, 131.94 FEET TO A POINT IN THE CENTER LINE OF
MAGNOLIA AVENUE, LAST SAID POINT BEARS NORTH 61 °54'0I" EAST, 162.74 FEET FROM THE
INTERSECTION OF SAID CENTER LINE AN THE CENTER LINE OF HARDING STREET, FORMERLY
SHI STREET, AS SAID STREET IS SHOWN ON THE RESUBDIVISION OF A PORTION OF ALLES
AVOCADO ACRES, ACCORDING TO THE MAP THEREOF NO. 2027, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 1927.
APN: 204-292-16
\D flDELl~Y NATIONAL~ 'LE COMPANY l ~3D .Zi"l57
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Carlsbad
Housing and Neighborhood Services Department
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attn: Director
No fee for recording pursuant to
Government Code Section 27383
D ll. .: 1:1: 201 3-01 68693
I IIIIIIII Ill lllll lllll lllll lllll IIIII IIIII IIIII IIIII IIIII IIIII IIII IIII
MAR 15, 2013 4:52 PM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
Ernest J. Dronenburg, Jr., COUNTY RECORDER
. FEES: 0.00 --1 416 7 PAGES: 24
1111111111111111111111111111111111111111111111111111111111111111111111111111111111111
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Carol-Harding Duplex Acquisition)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement")
is made and entered into as of March / $" , 2013 ( the "Agreement Date"), by and
among the City of Carlsbad, a municipal corporation (the "City"), and Harding Street Neighbors
LP, a California limited partnership (the "Developer").
RECITALS
1. The City and the Developer have entered into a Loan Agreement (the
"Agreement") under which the City agreed to loan up to Seven Million Four Hundred Eight
Thousand Dollars ($7,408,000) (the "City Loan") to the Developer to finance the acquisition of
twenty-two (22) duplex dwelling units, forty-four (44) total dwelling units, appurtenances,
landscaping and vacant parcel of land to provide for affordable housing for lower and moderate
income household on property described as Carol-Harding and fm1her described in Exhibit A.
Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the
Loan Agreement.
2. The City Loan consists of Seven Million Four Hundred Eight Thousand Dollars
($7,408,000) of Carlsbad Housing Trust Funds.
3. The Carlsbad Housing Trust Fund must be used to provide housing for lower
income households for the longest feasible time, determined to be a minimum of fifty-five (55)
years. The City intends to initially restrict twenty (20) of the units in the Development to low
income households, and twenty-three (23) of the units to moderate income households, and shall
amend this Agreement to regulate a larger number if a new, larger, and higher density
development is approved for said property. There will be one (1) unrestricted manager's unit.
Carol-Harding Duplex Regulato,y Agreement; Approved by C,i 3/11/13
14768
4. Through this Agreement the City is imposing occupancy and affordability
restrictions on the Development in order to meet the needs for affordable housing in Carlsbad for
lower and moderate income households.
5. In consideration ofreceipt of the City Loan, the Developer has further agreed to
observe all the terms and conditions set forth below.
6. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the City and the Developer wish to enter into
this Agreement.
THEREFORE, the City and the Developer hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1 Definitions.
When used in this Agreement, the following te1ms shall have the resp~ctive meanings
assigned to them in this Article 1.
(a) "Actual Household Size" shall mean the actual number of persons in the
applicable household.
(b) "Adjusted Income" shall mean the total anticipated annual income of all
persons in a household as calculated in accordance with 24 CFR 92.203(b)(l) (which
incorporates 24 CFR 813).
(c) "Agreement" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(d) "Agreement Date" shall mean the last date opposite the respective
signatures of the Developer and the City on this Agreement.
(e) 11Assumed Household Size" shall mean the assumed household size of
three (3) persons for a two-bedroom unit.
(f) "City" shall mean the City of Carlsbad, a mun1cipal corporation.
(g) "City Loan" shall mean the funds loaned to the Developer by the City
pursuant to the Loan Agreement.
(h) "Deed of Trust" shall mean the deed of trust of even date herewith in favor
of the City on the Developer' interest in the Property which secures repayment of the City Loan
and the performance of the Loan Agreement.
Carol-Harding Duplex Regulatory Agreement; Approved by C~ 3/11/13
14769
(i) "Developer" shall mean Harding Street Neighbors LP, a California limited
partnership, and its permitted successors and assigns.
(j) "Development" shall mean the Property and the forty-four (44) residential
units and related improvements to be acquired on the Prope1ty, as well as any additional
improvements in the future, and all landscaping, roads and parking spaces existing thereon, as
the same may from time to time exist.
(k) "Housing Fund" shall mean the City's Housing Trust Fund.
(1) "Low Income Household" shall mean a household with an Adjusted
Income that does not exceed sixty percent (60%) of the Area Median Income for San Diego
County, and as published by the US Department of Housing and Urban Development.
(m) "Median Income" shall mean the median gross yearly income, adjusted for
Actual Household Size or Assumed Household Size as specified herein, in the County of San
Diego, California, as published from time to time by the United States Department of Housing
and Urban Development ("HUD") and the State of California. 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 Developer with other income determinations which are
reasonably similar with respect to methods of calculation to those previously published by HUD
and the State.
(n) "Other Income Household" shall mean a household with an Adjusted
Income which does not exceed ninety percent (90%) of Median Income, adjusted for Actual
Household Size.
(o) "Other Income Units11 shall mean the Units which, pursuant to Section
2.1 ( c) below, are required to be occupied by Other Households.
(p) 11Property" shall mean the real property described in Exhibit A attached
hereto and incorporated herein.
( q) 11Rent11 shall mean the total of monthly payments by the Tenant of a Unit
for the following: use and occupancy of the Unit and land and associated facilities, including
parking; any separately charged fees or service charges assessed by the Developer which are
required of all Tenants, other than security deposits; an allowance for the cost of an adequate
level of service for utHities paid by the Tenant, including garbage collection, sewer, water,
electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service or
cable TV; and 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 the Developer, and paid by the Tenant.
(r) "Tenant" shall mean a household legally occupying a Unit pursuant to a
valid lease with the Developer.
(s) "Te1m" shall mean the te1m of this Agreement, which shall commence on
the Agreement Date and terminate the earlier of (1) fifty-five (55) years from the issuance of a
Carol-Harding Duplex Regulatory Agreement; Approved by C,3 3/11/13
14770
Certificate of Occupancy, or equivalent, or (2) sixty (60) years from the date of this Agreement
and shall continue until the end of the term.
(t) "Unit(s)" shall mean one (1) or all of the forty-four (44) rental units to be
acquired and rehabilitated on the Property; twenty (20) units of which the City will require to be
specifically restricted and rented to lower income households, and twenty-three (23) of which
will be required to be specifically restricted and rented to moderate income households. There
will be one (1) umestricted manager's unit.
ARTICLE 2.
AFFORDABILITY AND OCCUPANCY COVENANTS
Section 2.1 Occupancy Requirements.
(a) The Developer shall regulate the use and occupancy of the Units in the
following manner:
Forty-four (44) Units shall be rented to and occupied by or, if vacant, available for occupancy by
households as follows:
Low Other Income
(Sixty Percent) (Ninety Percent) Total
Two Bedroom 20 23 43
Total 20 23 43
(+1 Mgr Unit)
(b) If the Developer is able to construct the larger development of
approximately 140 units, the City and the Developer will amend these occupancy requirements.
( c) Notwithstanding the occupancy and income requirements in this Section
2.1, the existing tenants at the time of acquisition within the Development shall not be required
to be displaced unless required by another public agency.
Section 2.2 Allowable Rent.
(a) Low, Sixty Percent Rent. Subject to Section 2.3 below, the Rent charged
to Tenants of the Low, Sixty Percent Units shall not exceed one-twelfth (1/lih) of thirty percent
(30%) of sixty percent ( 60%) of Area Median Income for San Diego County, adjusted for
Assumed Household Size.
(c) Other Income Rent. Subject to the provisions of Section 2.3 below, the
Rent charged to Tenants of the Other Income Units shall not exceed one-twelfth (1/lih) of thirty
percent (30%) of ninety percent (90%) of Area Median Income for San Diego County, adjusted
for Assumed Household Size.
Carol-Harding Duplex Regulatory Agreement; Approved by c4 3/11/13
14771
(d) Assumed Household Size. In calculating the allowable Rent for the Units,
the following Assumed Household Size shall be utilized: three (3) persons per two (2) bedroom
unit.
(e) Approval of Rents for Units. Initial rents for all Units shall be approved
by the City prior to occupancy. All rent increases for all Units shall also be submitted to the City
for approval not less than thirty (30) days before notice is given to the affected Tenant and shall
be imposed only if in compliance with this Agreement. The City shall provide the Developer
with a schedule of maximum permissible rents for the Units annually.
Section 2.3 Increased Income of Tenants.
(a) Increased Income Over Low Income. In the event that, following
recertification of a Tenant's income, the Developer dete1mines that a former Low Income
Household has an Adjusted Income that exceeds the qualifying limit for a Low Income
Household but does not exceed ninety percent (90%) of Area Median Income for San Diego
County, adjusted for Actual Household Size, then, upon expiration of the Tenant's lease and sixty
(60) days' written notice to the Tenant, such household's Unit shall be considered an Other Unit,
and the Rent may be increased to one-twelfth (1/Ii11) of thirty percent (30%) of ninety percent
(90%) of Median Income, and the Developer shall rent the next available Unit to a Low Income
Household to comply with the requirements of Section 2.1 above.
(b) Increased Income over 90% of Median Income. If, upon recertification of
a Tenant's income, the Developer determines that a Tenant has an Adjusted Income exceeding
ninety percent (90%) of Area Median Income for San Diego County, adjusted for Actual
Household Size, such Tenant shall be permitted to continue to occupy the Unit, and, upon
expiration of the Tenant's lease, and sixty (60) days' written notice to the Tenant, the Rent may
be increased to one-twelfth (l /1 i 11) of thirty percent (30%) of actual Adjusted Income of the
Tenant, and the Unit shall continue to be classified as an Other Unit until the Tenant vacates the
Unit at which time the Unit shall be re-rented to an income-eligible household to meet the
requirements of Section 2.1.
( c) Termination of Occupancy. Upon termination of occupancy of a Unit by a
Tenant, such Unit shall be deemed to be continuously occupied by a household of the same
income level (e.g., Low Income Household) as the income level of the vacating Tenant, until
such Unit is reoccupied, at which time the income character of the Unit (e.g., Low Income
Household) shall be redetermined.
Section 2.4 · Units Available to the Disabled.
The Developer shall comply with all requirements of the American Disabilities Act.
ARTICLE 3.
INCOME CERTIFICATION AND REPORTING
Section 3 .1 Income Certification.
Carol-Harding Duplex Regulatory Agreement; Approved by c5 3/11/13
14772
The Developer shall obtain, complete and maintain on file, immediately prior to initial
occupancy and annually thereafter, income certifications from each Tenant renting any of the
Units (excluding the manager's Unit). The Developer shall make a good faith effo1i to verify that
the income provided by an applicant or occupying household in an income certification is
accurate by taking one or more of the 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 from the applicant's cmTent employer; (5) obtain an income verification form from the
Social Security Administration and/or the California Department of Social Services if the
applicant receives assistance from either of such agencies; or (6) if the applicant is unemployed
and has no such tax return, obtain another form of independent verification. Copies of tenant
income certifications shall be available to the City upon request.
Section 3.2 Annual Report to the City.
The Developer shall submit to the City (a) not later than the sixtieth (60th) day after the
close of each calendar year, or such other date as may reasonably be requested by the City, a
statistical report, including income and rent data for all Units covered by this Agreement, setting
fo11h the information called for therein, and (b) within fifteen ( 15) days after receipt of a written
request, any other information or completed forms requested by the City in order to comply with
rep01iing requirements of the City.
Section 3 .3 Additional Information.
The Developer shall provide any additional information reasonably requested by the
City. The City shall have the right to examine and make copies of all books, records or other
documents of the Developer which pe11ain to the Development.
Section 3 .4 Records.
The Developer shall maintain complete, accurate and cmTent records pertaining to the
Development, and shall pe1mit any duly authorized representative of the City to inspect records,
including records pertaining to income and household size of Tenants. All Tenant lists,
applications and waiting lists relating to the Development shall at all times be kept separate and
identifiable from any other business of the Developer and shall be maintained as required by the
City, in a reasonable condition for proper audit and subject to examination during business hours
by representatives of the City. The Developer shall retain copies of all materials obtained or
produced with respect to occupancy of the Units for a period of at least five (5) years.
Section 3.5 On-site Inspection.
The City shall have the right to perform an on-site inspection of the Development at least
one (1) time per year. The Developer agrees to cooperate in such inspection. If the City desires
to inspect the interior of the Units, the City shall give Developer sufficient notice to allow the
Developer to give seventy-two (72) hours notice to residents. Such right to annually inspect the
Carol-Harding Duplex Regulatory Agreement; Approved by C{'j 3/11/13
14773
Development shall be addition to the City's right to inspect the Development in accordance with
the City's municipal code as may be amended from time to time.
ARTICLE 4.
OPERATION OF THE DEVELOPMENT
Section 4.1 Residential Use.
The Development shall be operated only for residential use. No part of the Development
shall be operated as short term transient or emergency housing.
Section 4.2 Taxes and Assessments.
The Developer 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 accrning, or any lien or charge from attaching to the Property; provided, however, that
Developer shall have the right to contest in good faith, any such taxes, assessments, or charges.
In the event Developer exercise their rights to contest any tax, assessment, or charge against it.
Developer, on final determination of the proceeding or contest, shall immediately pay or
discharge any decision or judgment rendered against it, together with all costs, charges and
interest. The Developer shall not apply for a property tax exemption for the Property under any
provision oflaw, including but not limited to Revenue and Taxation Section 214, without the
City's prior written consent.
Section 4.3 Preference to Displacees.
The Developer shall give a preference in the rental of any Units to eligible households
displaced by activity of the City upon receiving a written request of the City regarding such
displacement.
ARTICLE 5.
PROPERTY MANAGEMENT AND MAINTENANCE
Section 5. l Management Responsibilities.
The Developer 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 shall have no responsibility over management of the Development. The
Developer shall retain a professional property management company approved by the City in its
reasonable discretion to perform its management duties hereunder as set forth below. A resident
manager shall also be required.
Section 5 .2 Management Agent.
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
Carol-Harding Duplex Regulatory Agreement; Approved by Ct;. 3/11/13
14774
the Development in a manner that will provide decent, safe, and sanitary housing (as approved,
the "Management Agent"). The Developer shall submit for the City's approval the identity of
any proposed Management Agent. The Developer 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 notifying the Developer in writing. If the
proposed Management Agent is disapproved by the City, the disapproval shall state with
reasonable specificity the basis for disapproval. Thereafter, the Developer shall submit a
· different proposed Management Agent, and submit such additional information about the
background, experience and financial condition of the 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. Only upon the City's written
approval of the Developer's proposed Management Agent shall constitute the Developer's
compliance with this Section.
Section 5.3 Periodic Performance Review.
The City reserves 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,
including the performance of the Management Agent. 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 standards of this Agreement. The Developer shall
cooperate with the City in such reviews.
Section 5 A Replacement of Management Agent.
If, as a result of a periodic review, the City determines in its reasonable judgment that the
Development is not being operated and managed in accordance with any of the material
requirements and standards of this Agreement, the City shall deliver notice to Developer of its
intention to cause replacement of the Management Agent, including the reasons therefor. Within
fifteen (15) days of receipt by Developer of such written notice, City staff and the Developer
shall 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, Developer shall 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
Developer shall provide that the contract can be terminated as set forth above. Failure to remove
the Management Agent in accordance with the provisions of this Section shall constitute default
under this Agreement, and the City may enforce this provision through legal proceedings as
specified in Section 6.8.
Carol-Harding Duplex Regulatory Agreement; Approved by C,8 3/11/13
Section 5.5 Approval of Management Policies.
The Developer 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.
Section 5.6 Property Maintenance.
14775
The Developer 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 impo11ance 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 Developer agrees to provide all necessary improvements
to assure the Development is maintained in good condition. The Developer shall make all
repairs and replacements necessary to keep the improvements in good condition and repair.
In the event that the Developer breaches any of the covenants contained in this section
and such default continues for a period often (10) 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 included 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 and/or costs of such cure, including an administrative
charge equal to fifteen percent (15%) of such expenditures, which amount shall be promptly paid
by the Developer to the City upon demand.
ARTICLE 6.
MISCELLANEOUS
Section 6.1 Lease Provisions.
The Developer shall use a form of Tenant lease approved by the City. The form of
Tenant lease shall also comply with all requirements of this Agreement and the Loan Agreement,
and shall, among other matters:
Carol-Harding Duplex Regulatory Agreement; Approved by C,9 3/11/13
14776
(a) provide for tennination of the lease and consent by the Tenant to
immediate eviction for failure: (1) to provide any information required under this Agreement or
reasonably requested by the Developer to establish or recertify the Tenant's qualification, or the
qualification of the Tenant's household, for occupancy in the Development in accordance with
the standards set forth in this Agreement, or (2) to qualify as a Low Income Household as a
result of any material misrepresentation made by such Tenant with respect to the income
computation or certification; and
(b) be for an initial tenn of not less than one (1) year, and provide for no Rent
increase during such year. After the initial year of tenancy, the lease may be month to month by
mutual agreement of the Developer and the Tenant, however the Rent may not be raised more
often than once every twelve (12) months. The Developer will provide each Tenant with at least
sixty (60) days' written notice of any increase in Rent applicable to such Tenant, and with such
fmther notice as may be required by Section 2.3 above.
( c) any termination of a lease or refusal by the Developer to renew must be
preceded by no less than sixty (60) days written notice to the tenant by the Developer specifying
the grounds for the action.
Section 6.2 Nondiscrimination.
All of the Units shall be available for occupancy on a continuous basis to members of the
general public who are income eligible. The Developer shall not give preference to any ·
particular class or group of persons in renting or selling the Units, except to the extent that the
Units are required to be leased tci Low Income Households. There shall be no discrimination
against or segregation of any person or group of persons, on account of race, color, creed,
religion, sex, sexual orientation, marital status, national origin, source of income ( e.g., SSI), age,
ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of any Unit nor shall the Developer or any person claiming under or through the
Developer, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use, or occupancy, of tenants, lessees,
sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons
for the construction, operation and management of any Unit. All deeds, leases or contracts made
or entered into by Developer as to the Units or the Development or pmtion thereof, shall contain
covenants concerning discrimination as prescribed by the Loan Agreement.
Section 6.3 Section 8 Certificate Holders.
The Developer will accept as Tenants, on the same basis as all other prospective Tenants,
persons who are recipients of federal certificates for rent subsidies pursuant to. the existing
housing program under Section 8 of the United States Housing Act of 1937, as amended, or its
successor. The Developer shall not apply selection criteria to Section 8 certificate or voucher
holders that are more burdensome than criteria applied to all other prospective Tenants, nor shall
the Developer 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.
Carol-Harding Duplex Regulatory Agreement; Approved by C}"03/l l/13
14777
Section 6.4 Term.
The provisions of this Agreement shall apply to the Prope1ty for the entire Term. This
Agreement shall bind any successor, heir or assign of the Developer, 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 City Loan on the condition, and in consideration of,
this provision, and would not do so otherwise.
Section 6.5 Compliance with Loan Agreement and Program Requirements.
The Developer's actions with respect to the Property shall at all times be in full
confo1mity with: (i) all requirements of the Loan Agreement; and, (ii) all requirements imposed
on projects assisted with the City's Housing Trnst Fund.
Section 6.6 Notice of Expiration ofTe1m.
At least six (6) months prior to the expiration of the Term the Developer shall provide by
first-class mail, postage prepaid, a notice to all Tenants in the Units containing (a) the anticipated
date of the expiration of the Term, (b) any anticipated Rent increase upon the expiration of the
Term, (c) a statement that a copy of such notice will be sent to the City, and (d) a statement that a
public hearing may be held by the City on the issue and that the Tenant will receive notice of the
hearing at least fifteen (15) days in advance of any such hearing. The Developer shall also file a
copy of the above-described notice with the City.
Section 6. 7 Covenants to Run With the Land.
The City and the Developer hereby declare their express intent that the covenants and
restrictions set f01th in this Agreement shall run with the land, and shall bind all successors in
title to the Prope1ty, 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 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 instrnment, unless the City expressly releases such conveyed p01tion of the
Property from the requirements of this Agreement.
Section 6.8 Default by the Developer; Enforcement by the City.
If the Developer fails to perform any obligation under this Agreement (including but not
limited to the failure to rent the Units as set forth in Section 2.1 ), and fails to cure the default
within thirty (30) days after the City has notified the Developer in writing of the default or, if the
default cannot be cured within thiity (30) days, fails to commence to cure within thirty (30) days
and thereafter diligently pursue such cure and complete such cure within ninety (90) days, or
Carol-Harding Duplex Regulatory Agreement; Approved by Ci'\13/11/13
14778
such longer period as approved by the City in writing, 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:
(a) Calling the City Loan. The City may declare a default under the Loan
Agreement, and declare the City Loan due and payable and proceed with foreclosure under the
Deed of Trnst.
(b) Action to Compel Performance or for Damages. The City may bring an
action at law or in equity to compel the Developer' performance of its obligations under this
Agreement, and/or for damages.
(c) Remedies Provided Under Loan Agreement. The City may exercise any
other remedy provided under the Loan Agreement.
Section 6.9 Recording and Filing.
The City and the Developer shall cause this Agreement, and all amendments and
supplements to it, to be recorded in the Official Records of the County of San Diego.
Section 6.10 Governing Law.
This Agreement shall be governed by the laws of the State of California.
Section 6.11 Waiver of Requirements.
Any of the requirements of this Agreement may be expressly waived by the City in
writing, but no waiver by the City of any requirement of this Agreement shall, or shall be
deemed to, extend to or affect any other provision of this Agreement.
Section 6.12 Amendments.
This Agreement may be amended only by a written instrument executed by all the patties
hereto or their successors in title, and duly recorded in the real property records of the County of
·San Diego.
Section 6.13 Notices. · ·
Any notice requirement set forth herein shall be deemed to be satisfied three (3) days
after mailing of the notice first-class United States certified mail, postage prepaid, addressed to
the appropriate party as follows:
Developer: Harding Street Neighbors LP
C/O Irvine Housing Opportunities
19772 MacArthur Blvd
Suite 110
Irvine, Ca. 92612
Carol-Harding Duplex Regulatory Agreement; Approved by C}"23/I I/l 3
With a copy to:
With a copy to:
With a copy to:
City:
Attn: Chief Executive Officer
C&C Development Co
14211 Yorba Street
Suite 200
Tustin, Ca. 92780
Goldfarb & Lipman LLP
1300 Clay Street 11 th Floor
Oakland, Ca. 94612
Attn: Luis A. Rodriguez
Goldfarb and Lipman LLP
1300 Clay Street 11 th Floor
Oakland, Ca 94612
Attn: Amy DeVaudrenil
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, Ca 92008
Attn: Housing and Neighborhood Services Director
Such addresses may be changed by notice to the other party given in the same manner as
provided above.
Section 6.14 Severability.
14779
If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining p011ions of this Agreement shall not in any way be
affected or impaired thereby.
Section 6.15 Multiple Originals; Counterpai1s.
This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
Carol-Harding Duplex Regulatory Agreement; Approved by Q'33/ 11/13
(
IN WITNESS WHEREOF, the City and the Developer have executed this Agreement by
duly authorized representatives, as of the last date written below.
Developer:
Harding Street Neighbors LP
a California limited paitnership
By: IHO Harding Street LLC
Its manag ing general partner
By: Irvine Housing Opportunities, Inc.
Its:??mber / / /41/-
By: ~t~
Patricia C. Whitaker
Its: Chief Executive Officer
By: C & C Harding Street, LLC
Its administrative gene· partner
By: __________ _
Todd R. Cottle
Its: Member
By: The Cottle Family Trust dated 3/8/1987
~ember
By: Uk~ ~ C::::::-----
.B~ny A. Cottle
Its: Trustee
City:
CITY OF CARLSBAD, a municipal corporation
By:
Its:
Signed in Counterpart
John Coates
City Manager
Carol-Harding Duplex Regulatory Agreement; Approved by Cf43/11/13
14730
(
14781
IN WITNESS WHEREOF, the City and the Developer have executed this Agreement by
duly authorized representatives, as of the last date written below.
Developer:
Harding Street Neighbors LP
a California limited pm1nership
By: IHO Harding Street LLC
Its managing general pmtner
By: Irvine Housing Opportunities, Inc.
Its sole member
Signed in Counterpart By: ___________ _
Patricia C. Whitaker
Its: Chief Executive Officer
By: C & C Harding Street, LLC
Its administrative general partner
Signed in Counterpart By: ___________ _
Todd R. Cottle
Its: Member
By: The Cottle Family Trust dated 3/8/1987
Its: Member s· d . C t By: 1gne in oun erpart
Barry A. Cottle
Its: Trustee
City:
By:
Its:
B~ipal corporation
John Coates
City Manager
Carol-Harding Duplex Regulatory Agreement; Approved by q643/l 1/13
(
APPROVED AS TO FORM
By City Attorney or Assistant City
Attorney
By: ~~ J'-/3-13'
All party signatures must be notarized.
Carol-Harding Duplex Regulatory Agreement; Approved by q,'<§3/11 /13
(
14782
CALIFORNIA ALL-PURPOSE
CERTIFICATE OF ACKNOWLEDGMENT
1478.3
State of California
County of ~LI~~
personally appeared ~ C~
who proved to me on the basis of satisfacto1y evidence to be the person(,BJ"Whose narn~~;~e~~btl.scribed to
the within instrument and acknowledged to me that ~hefthey executed the same in is/ · uthorized
capacit~eSj, and that b~ signaturewon the instrnment the person(,B"r, or the entity upon behalf of
which the personfsracted, executed the instrument.
I ce1tify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph
is true and co1Tect.
WITNESS my hand and official seal.
(Notary Seal)
SHEILA RENAE COBIAN
Commission # 1848471
Notary Public • California ~
San Diego County ~
0My so~~ tx~n:,s ~az 10..221;(
ADDITIONAL OPTIONAL INFORMATION
DESCRIPTION OF THE ATTACHED DOCUMENT
(Title or description of uttaclted document)
(Title or description of attached docnmenl continued)
Number of Pages __ Document Date ____ _
(Additional information)
CAPACITY CLAIMED BY THE SIGNER
D Individual (s)
□ Corporate Officer
(Title)
□ Partner(s)
D Attorney-in-Fact
D Trustee(s)
□ Other _____________ _
2008 Version CAPA vl2. I0.07 800-873-9865 www.NotaryClasses.c_om
INSTRUCTIONS FOR COMPLETING THIS .FORM
Any ock11owledg111ent completed i11 California must contain ver/,iage e.wctly as
appears above i11 the 110/a,y section m· a separale ai:k11owledgme111 .form must be
proper(1' comple!ed and al/ached to !hat docume111. The 011/v exception is !f a
docume/11 is to he recorded 011/side of Cal/fornia. /11 such i11sta11ces, any alternative
acknowledgment verbiage as may be printed 011 such a document so long as the
verbiage does not req11i1·e the notm)' to do something that is illegal for a 11ota1;v i11
Califomia (i.e. certifying the authorized capacity of the signer). Please check the
doc11111enl carefi,i(,,Ji.,r proper notarial wording 011d auach this.form if required.
• State and County information must be the Stnte and County where the document
signer(s) personally appeared before the uotary public for acknowledgment.
• Date of notarization must be the date that the signer(s) personally appeared which
must also be the same date the acknowledgment is completed.
• The notary public must print his or her name as ii appears within his or her
commission followed by a comma and then your title (notary public).
• Print the name(s) of document signer(s) who personally appear at the time of
notarization.
• Indicate the correct singnlar or plural forms by crossing off incorrect forms (i.e.
lte/she/t-l;ey,-is /ftfe) or circling the correct forms. Failure to con-ectly indicate this
information may lea_d to rejection of document recording.
• The notary seal impression must be clear and photographically reproducible.
Impression must not cover text or lines. If seal impression smudges, re-seal if a
sufficient area permits, otherwise complete a different acknowledgment form.
• Signature of the notary public must match the signature on file with the office of
the county clerk.
❖ Additional information is not required but could help to ensure th/s
acknowledgment is not misused or attached lo n different document.
❖ Indicate title or type of attached document, number of pages and date.
❖ Indicate the capacity claimed by the signer. If the claimed capacity is a
corporate officer, indkate the title (i.e. CEO, CFO, Secretary).
• Securely attach this document to the signed document
( (
ACKNOWLEDGMENT 14 7 8 4
State of California
County of Orange
on March 12 2013 before me, Rosalba Ruiz, Notary Public
(insert name and title of the officer)
personally appeared Todd R. Cottle ----------------------------------------------------------------
who proved to me on the basis of satisfactory evidence to be the personfst whose name~) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity{iesj, and that by hi$/hor/their signaturefst on the instrument the
personfst, or the entity upon behalf of which the personfst acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
.}6 ................ ~ ..... ~ ............. -t., ROSALBA RUIZ
... • Commission # 1934781 i · •• -Notary Public -California J
z Orange County ~ J. ; 0 0 0 .Ml ~0T'U· Pe1'!8 ,M!t3-}~1tl
(Seal)
( (
ACKNOWLEDGMENT 14705
State of California
County of Orange
on March 12, 2013 before me, Rosalba Ruiz, Notary Public
(insert name and title of the officer)
personally appeared Barry A. Cottle ----------------------------------------------------------------
who proved to me on the basis of satisfactory evidence to be the personW whose namefs) is/afe
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity~. and that by his/her/their signatureW on the instrument the
personW, or the entity upon behalf of which the personW acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official se
(Seal)
. ·' .-
ACKNOWLEDGMENT 14786
State of California
County of Orange
on March 13 2013 before me, Rosalba Ruiz, Notary Public
(insert name and title of the officer)
personally appeared Patricia C. Whitaker----------------------------------------------------------,
who proved to me on the basis of satisfactory evidence to be the person(~ whose name~
subscribed to the within instrument and acknowledged to me that l'le/~ executed the same in
~heir authorized capacity(ies), and that by h~signature(SJ on the instrument the
person('8}, or the entity upon behalf of which the personE51 acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
i------------"'·"" ROSALBA RUIZ
• • Commission # 1934781 ~ : -a · i, Notary Public -California ~
z -~ · · Orange County ~ t ;·~ .·. fl S0Trz· !xe1r:s ,M!YJ}11 il
(Seal)
EXHIBIT A
(Legal Description)
14787
The land is situated in the State of California, County of San Diego, City of Carlsbad, and
is described as follows:
A-1
Carol-Harding Duplex Regulatory Agreement; Approved by CA 3/8/2013
14738
PARCEL A:
LOTS 1, 3 TO 9, INCLUSIVE, 11 TO 13 INCLUSIVE, AND 25 TO 33 INCLUSIVE, OF PALM VISTA IN
THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
THE MAP THEREOF NO. 2969, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, MARCH 16, 1953.
EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 13 OF PALM VISTA, ACCORDING TO
MAP THEREOF NO. 2969; THENCE ALONG THE EASTERLY LINE OF SAID LOT 13, SOUTH
19°17'11" EAST 161.15 FEET TO THE SOUTHEASTERLY CORNER OF SAID LOT 13, SAID POINT
BEING ALSO THE EASTERLY CORNER OF SAID LOT 14; THENCE ALONG THE SOUTHEASTERLY
LINE OF SAID LOT 14, SOUTH 61°51'52" WEST 68.06 FEET; THENCE NORTH 08°26'25" WEST
42.85 FEET; THENCE NORTH 14°49'18" WEST 95.30 FEET; THENCE NORTH 25°13'44" WEST 26.19
FEET TO A POINT IN THE NORTHWESTERLY LINE OF SAID LOT 13, SAID POINT BEARS SOUTH
61 °51 '52" WEST 55.14 FEET FROM SAID MOST NORTHERLY CORNER; THENCE ALONG SAID
NORTHWESTERLY LINE NORTH 61°51 '52" EAST 55.14 FEET TO THE POINT OF BEGINNING.
FURTHER EXCEPTING THEREFROM, THOSE PORTIONS OF LOTS 8, 9, 11 AND 12 AS CONVEYED
TO THE STATE OF CALIFORNIA FOR HIGHWAY PURPOSES AS DESCRIBED IN DEED
RECORDED AUGUST 24, 1967 AS FILE NO. 127829 OF OFFICIAL RECORDS OF SAID COUNTY.
APN: 204-292-01 (LOT 1); 204-292-10 (LOT 3); 204-292-11 (LOT 4); 204-292-12 (LOT 5); 204-292-13
(LOT 6); 204-292-14 (LOT 7); 204-292-17 (LOT 8); 204-292-18 (LOT 9); 204-292-20 (LOT 11 ); 204-292-
21 (LOT 12); 204-292-22(LOT 13); 204-291-26 (LOT 25); 204-291-25 (LOT 26); 204-291-24 (LOT 27);
204-291-23 (LOT 28); 204-291-19 (LOT 29); 204-291-20 (LOT 30); 204-291-21 (LOT 31); 204-291-22
(LOT 32); 204-291-14 (LOT 33)
PARCEL B:
THAT PORTION OF LOT 236 OF THUM LANDS, IN THE CITY OF CARLSBAD, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.1681, FILED IN THE OFFICE
OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 9, 1915, DESCRIBED AS
FOLLOWS:
BEGINNING AT A POINT ON THE CENTER LINE OF MAGNOLIA AVENUE, DISTANT THEREON
SOUTH 61°21' WEST, 446.86 FEET FROM ITS INTERSECTION WITH THE CENTER LINE OF ADAMS
STREET, SAID POINT OF BEGINNING BEING THE MOST WESTERLY CORNER OF THE LAND
CONVEYED BY THE SOUTH COAST LAND COMPANY TO DEAN F. PALMER, BY DEED DATED
MAY 5, 1927, AND RECORDED IN BOOK 1335, PAGE 384 OF DEEDS, RECORDS OF SAID
COUNTY; THENCE ALONG THE SOUTHWESTERLY LINE OF THE LAND AS CONVEYED TO SAID
PALMER ANO THE SOUTHEASTERLY PROLONGATION OF SAID LINE, SOUTH 28°39' EAST, A
DISTANCE OF 487.47 FEET, MORE OR LESS, TO AN INTERSECTION WITH THE
NORTHEASTERLY PROLONGATION OF THE NORTHWESTERLY LINE OF THE LAND CONVEYED
BY SOUTH COAST LAND COMPANY TO LAURA JONES BY DEED DATED MAY 14, 1929, AND
RECORDED IN BOOK 1629, PAGE 431 OF DEEDS, RECORDS OF SAID COUNTY; THENCE ALONG
SAID PROLONGATION AND THE NORTHWESTERLY LINE OF THE LAND SO CONVEYED TO SAID
JONES, SOUTH 61°21' WEST, A DISTANCE OF 536.38 FEET, MORE OR LESS, TO A POINT ON
THE NORTHEASTERLY LINE OF THE LAND CONVEYED BY SOUTH COAST LAND COMPANY
TO P.J. WHELDON AND MARY H. WHELDON BY DEED DATED JULY 7, 1926, AND RECORDED IN
BOOK 1180, PAGE 463 OF DEEDS, RECORDS OF SAID COUNTY; THENCE ALONG THE SAID
NORTHEASTERL YLINE OF THE LAND SO CONVEYED TO SAID WHELDON AND ALONG THE
NORTHWESTERLY PROLONGATION THEREOF, NORTH 28°39' WEST, A DISTANCE OF 487.47
FEET, MORE OR LESS, TO A POINT ON THE CENTER LINE OF MAGNOLIA AVENUE; THENCE
14739
ALONG SAID CENTER LINE NORTH 61"21' EAST, A DISTANCE OF 536.38 FEET, MORE OR LESS,
TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION LYING NORTHEASTERLY OF THE FOLLOWING
DESCRIBED LINE:
BEGINNING AT A POINT IN THE NORTHWESTERLY BOUNDARY OF LOT 8 OF PALM VISTA,
ACCORDING TO THE MAP THEREOF NO. 2969, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, MARCH 16, 1953, SAID POINT BEARS SOUTH 61"58'46"
WEST, 71.99.FEET FROM THE MOST NORTHERLY CORNER OF SAID LOT 8; THENCE (1) NORTH
22°36'42" WEST, 359.22 FEET; THENCE (2) NORTH 18°34'28" WEST, 131.94 FEET TO A POINT IN
THE CENTER LINE OF MAGNOLIA AVENUE, LAST SAID POINT BEARS NORTH 61°54'01" EAST,
162.74 FEET FROM THE INTERSECTION OF SAID CENTER LINE AN THE CENTER LINE OF
HARDING STREET, FORMERLY 5TH STREET, AS SAID STREET IS SHOWN ON THE
RESUBDIVISION OF A PORTION OF ALLES AVOCADO ACRES, ACCORDING TO THE MAP
THEREOF NO. 2027, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY, MAY 17, 1927.
APN: 204-292-16
PARCEL C:
LOT 24 OF PALM VISTA IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 2969, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, MARCH 16, 1953.
APN: 204-291-27
LOT 2, PALM VISTA, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 2969, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, MARCH 16, 1953.
APN: 204-292-02-00
i l:1 D
DEVELOPING
AFFORDABLE
HOUSING
December 20, 2013
City of Carlsbad
(
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attn: Housing and Neighborhood Services Director
To Whom It May Concern:
This letter is in regards to the loan in the amount of $7,408,000 dated as of March 15, 2013,
pursuant to Resolution Number 2012-235 adopted by the City of Carlsbad on November 6, 2012,
for the acquisition and rehabilitation of the Carol-Harding Duplex Property (the "Loan"), for
which the City of Carlsbad is the lender ("Lender"). The borrower for the Loan is Harding Street
Neighbors LP ("Borrower"). Irvine Housing Opportunities, Inc., a California nonprofit public
benefit corporation, is the Sole and Managing Member ofIHO Harding Street LLC, Borrower's
Managing General Partner.
This letter serves as notice to the Lender that as of November 8, 2013, Irvine Housing
Opportunities, Inc. has changed its name to Innovative Housing Opportunities, Inc. Borrower's
name remains the same.
If you have any questions regarding this name change, please contact:
M David Kroot
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, CA 94612
(510) 836-6336
Sincerely,
Patricia C. Whitaker
Chief Executive Officer
Irvine Housing Opportunities, Inc.
19772 MacArthur Blvd, Suite 110
Irvine, California 92612
1675\03\1435665.2
IHO I www.lHOinc.org
19772 MacArthur Blvd, Suite 110, Irvine, CA 92612 P 949-863-9740 F 949-863-9746
IHO.
13UILDll'-JG
Bf:. r7 U-<-
COMMUNITl[S
•
Fidelity National Title Company
1300 Dove Street, Suite 310, Newport Beach, CA 92660
Phone: (949) 622-5000 • Fax: (949) 477-3600
Debbie Fountain
City of Carlsbad
Housing and Neighborhood Services Department
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Date: May 17, 2013
Escrow No.: 23022757-0t0-VR2
Property Address:
Carlsbad, CA
In connection with the above mentioned property, enclosed please find the following:
Original Note
2 Originals of the Loan Agreement
We appreciate the oppo1tunity of being of service to you. lfwe can be of further assistance, please feel free to call upon us.
Sincerely
Valerie Rapp
VP/Senior Commercial Escrow Officer
VR2
Enclosure( s)
Misc Trans.doc