HomeMy WebLinkAboutSDP 2022-000; Fenton Ponto LLC; 2024-0243319; Affordable Housing-Regulatory Agreement & Dec. of Restrictive CovenantsRECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Carlsbad
City Clerk's Office
Attn. City Clerk
1200 Carlsbad Village Drive
Carlsbad, CA 92008
No fee for recording pursuant to
Government Code Section 27383
DOC# 2024-0243319
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Sep 10, 2024 02:39 PM
OFFICIAL RECORDS
JORDAN Z. MARKS,
SAN DIEGO COUNTY RECORDER
FEES: $0.00 (SB2 Atkins: $0.00)
PCOR: N/A
PAGES: 20
(Space above for Recorder's Use)
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Inclusionary & Density Bonus)
This Regulatory Agreement and Declaration of Restrictive Covenants ("Agreement") is made
and entered into as of this £, day :;:.t::r:.__, 2az.g. by and between the City of Carlsbad, a
chartered municipal corporation ("City"), and Fenton Ponto LLC, a California limited liability
company ("Developer").
RECITALS
1. The City has adopted an Inclusionary Housing Ordinance as Carlsbad Municipal Code (CMC)
21.85 requiring a percentage of new housing development to be developed as affordable housing for very-low
and low-income households.
2. The City has adopted a Density Bonus Ordinance as CMC 21.86 to conform with state density
bonus law (Government Code Sections 65915 -65918), together referred to herein as the "Density Bonus
Law" which allows increases to density and concessions and waivers in the development of new residential
housing in exchange for provision of affordable units.
3. The City approved Project by Planning Commission Resolution No. 7482 on May 3, 2023. As
part of the Project, the Developer agreed to restrict 13 units (15% of the total units) to be affordable to low-
income households.
4 . In accordance with Density Bonus Law, the Developer has applied for, and the City has
granted the following regulatory incentives in exchange for the Developer's provision of affordable units: (1) a
density bonus of 16 additional market-rate units; (2) one incentive/concession, described as follows: allow
fencing up to 12 feet in height: (3) two waivers or modifications to development standards, as follows:
reduced set-backs and waiver from requirement of providing infiltration prior to implementation of
biofiltration BMPs ; and (4) parking ratios and standards consistent with Density Bonus Parking Law.
5. The Developer is the owner of, and intends to develop eighty-six (86) units on the real
property as more particularly set forth on Exhibit A, attached hereto and incorporated herein ("Property"). Of
the eighty-six (86) units to be developed on the Property, thirteen (13) units, i.e. the Low Income Units
(defined below), will be restricted to occupancy by, and affordable to, lower income households as required by
the Density Bonus Law and/or Carlsbad Municipal Code 21.85.
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6. Eleven of the thirteen Low Income Units will be identified as "Density Bonus
Affordable Units" (which are described and defined as the "Density Bonus Low Income Units" below)
and therefore restricted to a lower rental restriction than required by the Inclusionary Housing
Ordinance ( defined below). The Density Bonus Affordable Units will be developed to meet the
affordable housing obligations for the Development as required by the Density Bonus Law.
7. Two of the thirteen Low Income Units will be identified as "Inclusionary Affordable
Units" (which are described and defined as the "Inclusionary Low Income Units" below) and therefore
restricted as required by the Inclusionary Housing Ordinance.
8. In accordance with the requirements of Government Code Section 65915 and Carlsbad
Municipal Code 21.85 and 21.86, Developer is obligated to enter into this Agreement, for the benefit
of the City, and to observe all the terms and conditions set forth below.
9. In order to ensure that the entire Project will be used and operated in accordance with
these conditions and restrictions, City and Developer wish to enter into this Agreement.
THEREFORE, City and Developer hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Definitions. When used in the Agreement, the following terms shall have the
respective meanings assigned to them in this Article 1.
(a) "Agreement" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(b) "City" shall mean the City of Carlsbad, a chartered municipal corporation.
(c) "Density Bonus Law" shall mean the City's density bonus ordinance, set forth in
Chapter 21.86 of the City's municipal code and California Government Code
Section 65915.
(d) "Density Bonus Low Income Units" shall mean the units limited to occupancy by
Low Income Households and restricted in rental cost pursuant to Section 2.2 (a)
below.
(e) "Developer" shall mean Fenton Ponto LLC, a California limited liability company,
and its successors in interest to the Property.
(t) "Development" shall mean the real property identified in Exhibit A and all
residential units developed pursuant to the Conditions identified in Planning
Commission Resolution 7482.
(g) "Gross Income" shall mean the total anticipated annual income of all persons in a
household, as calculated in accordance with 25 California Code of Regulations
Section 6914, or pursuant to a successor State housing program that utilizes a
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reasonably similar method of calculation of gross income. In the event that no
such successor program exists, City shall provide Developer with a reasonably
similar method of calculation of gross income as provided in said Section 6914.
(h) "HCD" shall mean the California Department of Housing and Community
Development.
(i) "Median Income" or "Area Median Income" shall mean the area median income
adjusted for actual household size, in the County of San Diego, California, as
determined from time to time by the U.S. Department of Housing and Urban
Development, and published by HCD. In the event that such income
determinations are no longer published, or are not updated for a period of at least
eighteen (18) months, City shall provide Developer with other income
determinations which are reasonably similar with respect to methods of
calculation to those previously published by HCD.
G) "Low Income Household" shall mean a household whose annual Gross Income
does not exceed eighty percent (80%) of the Area Median Income, adjusted for
household size.
(k) "Low Income Units" shall mean the thirteen units, as identified in Exhibit B,
limited to occupancy by Low Income Households and restricted in rental cost as
set forth in this Agreement.
(1) "Inclusionary Low Income Units" shall mean the units limited to occupancy by
Low Income Households and restricted in rental cost pursuant to Section 2.2 (b)
below.
(m) "Inclusionary Housing Ordinance" shall mean the City's inclusionary housing
ordinance, setforth in Chapter 21.85 of the City's municipal code from time to
time.
(n) "Project" shall mean the Property, and the eight-six (86) units to be constructed on
the Property, as well as all other improvements, landscaping, roads and parking
spaces existing thereon, as the same may from time to time exist.
( o) "Property" shall mean the real property described in Exhibit A attached hereto and
incorporated herein.
(p) "Rent" means the total monthly expenses required to obtain a unit and shall
include the following: use and occupancy of the Unit and land and associated
facilities, including parking; any separately charged fees or service charges
assessed by Developer which are required of all tenants, other than security
deposits; an allowance for the cost of an adequate level of service for utilities paid
by the tenant, including garbage collection, sewer, water, electricity, gas and
other heating, cooking and refrigeration fuel, but not telephone service; any other
interest, taxes, fees or charges for use of the land or associated facilities and
assessed by a public or private entity other than Developer.
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(q) "Term" shall mean the period of time beginning on the date ofrecordation of this
Agreement in the Official Records, and ending on the earlier of: (i) fifty-five (55)
years after the final inspection approval by the City for the Project, or the issuance
of the certificate of occupancy for the Project ( or equivalent documentation from
the City evidencing that the Project may be utilized for multifamily housing); or
(ii) fifty-seven (57) years after the date ofrecordation of this Agreement in the
Official Records.
ARTICLE 2. AFFORDABILITY COVENANTS
2.1 Occupancy Requirements.
Each of the Low Income Units shall only be rented to, and occupied by, or, if vacant, shall only be
available for rental and occupancy by Low Income Households.
2.2 Allowable Rent.
(a) The maximum monthly Rent for each of the eleven (11) Density Bonus Low
Income Units shall be calculated in accordance with California Health and Safety Code Section
§50053 and Title 25 of the California Code of Regulations, Section 6918 (or successor provision),
and, in accordance with these provisions, shall result in a maximum monthly rent charged the
occupants of the Density Bonus Low Income Units which does not exceed one-twelfth ofthirty-
percent (30%) of sixty percent (60%) of Area Median Income, adjusted for household size as defined
below in Section 2.2(c). The maximum Rent includes a utility allowance based on the City's
published and standard utility allowance schedule.
(b) The maximum monthly Rent for each of the two (2) Inclusionary Low Income
Units shall be calculated in accordance with Carlsbad Municipal Code Section 21.85.020 (A),
California Health and Safety Code Section §50053 and Title 25 of the California Code of
Regulations, Section 6918 (or successor provision), and, in accordance with these provisions, shall
result in a maximum monthly rent charged the occupants of the Inclusionary Low Income Units
which does not exceed one-twelfth of thirty-percent (30%) of seventy percent (70%) of Area Median
Income, adjusted for household size as defined below in Section 2.2(c). The maximum Rent includes
a utility allowance based on the City's published and standard utility allowance schedule.
(c) Subject to Section 2.3 below, in calculating the allowable Rent for all Low
Income Units, the following assumed household sizes shall be utilized:
Number of Bedrooms
Two
Three
Four
Assumed Household Size
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3
4
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2.3 Increased Income of Occupying Households. Developer shall re-certify that the
Low Income Units are occupied only by eligible tenants in compliance with this Agreement every
twelve months. If, upon recertification or otherwise, the Developer determines that that the Gross
Income of the tenant(s) occupying a Low Income Unit has subsequently increased so as to exceed the
income to qualify as an eligible tenant (an "Increased Income Occupant"), but the Increased Income
Occupant's Gross Income does not exceed 120 percent of Area Median Income, adjusted for
household size, then, to the extent permitted by applicable law and notwithstanding Sections 2.1 and
2.2, the rent may be increased to 30 percent of the Increased Income Occupant's actual Gross Income,
minus the applicable utility allowance, on the later of the expiration of the Increased Income
Occupant's lease or upon 90 days written notice from Developer to the Increased Income Occupant. In
the event that the Increased Income Occupant's income exceeds Area Median Income, adjusted for
household size, then, subject to and to the extent permitted under applicable law, the Increased
Income Occupant shall be given written notice that the Increased Income Occupant must vacate the
Low Income Unit on the later of the expiration of the Increased Income Occupant's lease or upon 90
days written notice to the Increased Income Occupant.
2.4 Lease Provisions. To the extent permitted under applicable law, Developer shall
include in leases for all Low Income Units provisions which authorize Developer to immediately
terminate the tenancy of any household one or more of whose members misrepresented any fact
material to the household's qualification as a Low Income Household. To the extent permitted under
applicable law, each lease or rental agreement shall also provide that the household is subject to annual
certification in accordance with Section 3.1 below, and that, if the household's Gross Income increases
above the applicable limits for a Low Income Household, such household's rent may be subject to
mcrease.
2.5 Section 8 Voucher Holders. Developer will accept as tenants of the Low
Income Units, on the same basis as all other prospective tenants, persons who are recipients of
federal vouchers for rent subsidies pursuant to the existing housing subsidy program under Section 8
of the United States Housing Act, or its successor. Developer shall not apply selection criteria for
available Low Income Units to Section 8 voucher holders that is more burdensome than criteria
applied to all other prospective tenants, nor shall Developer apply or permit the application of
management policies or lease provisions with respect to the Project which have the intended effect
of precluding occupancy of Low Income Units by such prospective tenants.
2.6 Condominium Conversion. Developer shall not convert the Project or the
Low Income Units to condominium or cooperative ownership, or sell condominium or
cooperative conversion rights to the Property, during the Term, without first having obtained all
necessary entitlements and approvals from the City and any other applicable government
authority and complying with all then-applicable laws (for example, any Subdivision Map Act
requirements, notices, and any other condo conversion laws and requirements) and entering into
a replacement agreement with the City to ensure the continued affordability of the Low Income
Units.
ARTICLE 3. INCOME CERTIFICATION AND REPORTING
3 .1 Income Certification. Developer will obtain, complete and maintain on file,
immediately prior to initial occupancy of a Low Income Unit and annually thereafter, income
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certifications from each Low Income Household. Developer shall make a good faith effort to verify
that the stated income, in a certification provided by an applicant or a household residing in a Low
Income Unit, is accurate by one or more of the following steps as a part of the verification process:
(1) obtain pay stubs for the four (4) most recent pay periods; (2) obtain income tax returns for the two
(2) most recent tax years; (3) conduct a credit agency or similar search; (4) obtain an income
verification form from the applicant's current employer; (5) obtain an income verification form from the Social
Security Administration and/or the California Department of Social Services if the applicant receives assistance
from either of such agencies; or (6) if the applicant is unemployed/or and has no such tax return, obtain another
form of independent verification. Copies of tenant income certifications shall be available to City upon written
request.
3.2 Annual Report to City. Developer shall submit, no later than February 1 of each
year, an annual report to City for the immediately preceding year, in a form approved by City. The
annual report shall include for each Low Income Unit covered by this Agreement, the Rent and the
reported income and household size of the household occupying the Low Income Unit. The report
shall also state the date the tenancy commenced for each Low Income Unit and such other information
as City may reasonably require but solely for the purpose of verifying Developer's compliance with this
Agreement.
3.3 Records. Developer shall maintain complete, accurate and current records
pertaining to the Low Income Units, pursuant to this Agreement, and, upon five (5) days prior
written request by City, shall permit any duly authorized representative of City to inspect records,
including records pertaining to income and household size of tenant households occupying such
Low Income Units.
ARTICLE 4. OPERATION OF THE PROJECT
4.1 Residential Use. The Project shall be operated only for residential use. No
part of the Project shall be operated as transient housing such as short term vacation rental with
tenancy less than 30 days.
4.2 Compliance with Regulatory Agreement and Applicable Laws. Developer
shall comply with all the terms and provisions of this Agreement to the extent applicable to the
Property, the City 's Inclusionary Housing Ordinance and Density Bonus Ordinance, and all
applicable local, state, and federal laws and regulations governing the ownership, use, and
occupancy of the Project (whether existing as of the date of this Agreement or later enacted). In the
case of an inconsistency or conflict between this Agreement and the City's Inclusionary Housing
Ordinance, Density Bonus Ordinance, or applicable laws or regulations, the City's Inclusionary
Housing Ordinance, Density Bonus Ordinance and applicable local, state and federal laws and
regulations take precedence. In such an instance, violation of any term or provision of this
Agreement shall not constitute a breach of this Agreement.
4.3 Taxes and Assessments. Developer shall pay, or cause to be paid, all real and
personal property taxes, assessments and charges and all franchise, income, employment, old age
benefit, withholding, sales, and other taxes assessed against it, or payable by it, or shall acquire
such tax credits or other methods of satisfaction of any such tax liabilities, at such times and in such
manner as to prevent any penalty from accruing, or any lien or charge from attaching to the
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Property; provided, however, that Developer shall have the right to contest in good faith, any such
taxes, assessments, or charges. In the event Developer exercises its right to contest any tax,
assessment, or charge against it, Developer, on final determination of the proceeding or contest,
shall immediately pay or discharge any decision or judgment rendered against it, together with all
costs, charges and interest. Nothing herein shall be interpreted as prohibiting Developer from
appealing its valuation for the determination of property taxes, or applying for the Welfare Tax
Exemption or other property tax reliefresulting from the reduced value of the Low Income Units.
4.4 Nondiscrimination. All of the Low Income Units shall be available for
occupancy on a continuous basis to members of the general public who qualify as a Low Income
Household. Developer shall not give preference to any particular class or group of persons in
renting the Low Income Units, except to the extent that the Low Income Units are required to be
leased to Low Income Households. There shall be no unlawful discrimination against or segregation
of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation,
marital status, national origin, ancestry, or any other classification protected by law, in the leasing,
use, occupancy, tenure, or enjoyment of any Low Income Unit nor shall Developer or Developer's
agents, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy of tenants or lessees of any Unit or
in connection with the employment of persons for the operation and management of the Project.
All deeds, leases or contracts made or entered into by Developer as to the leasing, occupancy, or
tenancy of the Low Income Units or portion thereof, shall contain covenants concerning
discrimination as prescribed by this Agreement.
ARTICLE 5. PROPERTY MANAGEMENT AND MAINTENANCE
5 .1 Management Responsibilities. Developer acknowledges and agrees Developer,
and not City, is responsible for all management functions with respect to the Project, including
without limitation the selection of tenants, certification and recertification of household size and
income, evictions, collection of rents and deposits, maintenance, landscaping, routine and
extraordinary repairs, replacement of capital items, and security. City shall have no responsibility
over the management or operation of the Project. Developer shall retain a third party property
management company approved by City in its reasonable discretion to perform its management duties
hereunder, unless Developer demonstrates to City that it has the capacity to self-manage the Project
and receives written approval from the City for self-management. A resident manager shall also be
required, selection of whom shall be at the discretion of Developer.
5.2 Management Agent. The Project shall at all times be managed by (i) an
experienced management agent ("Management Agent") acceptable to and approved in writing by City
or (ii) self-managed by Developer or by an affiliate of Developer (in, each case, "Self-Management"),
provided that the City approves of such Self-Management. Management Agent or Self-Management
shall have a demonstrated ability to operate residential facilities like the Project in a manner that will
provide decent, safe, and sanitary housing. City's approval of a Managing Agent or Self-
Management will not be unreasonably withheld, conditioned or delayed. Prior to the issuance of a
Certificate of Occupancy for any building within the Project, Developer shall submit for City's
approval the identity of any proposed Management Agent or Self-Management. Developer shall also
submit such additional information about the background, experience and financial condition of the
proposed Management Agent or Self-Management as is reasonably necessary for City to determine
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whether the proposed Management Agent or Self-Management meets the standard for a qualified
Management Agent or Self-Management as set forth above. If the proposed Management Agent or
Self-Management meets the standard set forth above, the City shall approve the proposed
Management Agent or Self-Management by notifying Developer in writing within thirty (30) days of
Developer's submission of a proposed Management Agent or Self-Management.
If City determines that the proposed Management Agent or Self-Management does not meet the
standard set forth above, the City shall notify Developer in writing within thirty (30) days of
Developer's submission of a proposed Management Agent or Self-Management. The City's
notification shall state with reasonable specificity the reasons for the disapproval. Developer shall have
fifteen (15) days to respond in writing to the City's notification of disapproval by providing
documentation to address in good faith the concerns raised by the City. City shall have fifteen (15)
days to respond in writing to the Developer and either approve or provide final disapproval of the
proposed Management Agent or Self-Management.
If the City fails to approve or disapprove the proposed Management Agent or Self-Management within
the time limits provided in this Section 5.2 it shall be deemed approved. If City disapproves a proposed
Management Agent or Self-Management, Developer shall not be in default under this Section 5.2, so
long as Developer actively seeks and submits a new Management Agent or Self-Management for
City's consideration within thirty (30) days of the City's final disapproval. For the purposes of this
Section 5.2, HG Fenton is approved by City as the initial Management Agent for the Project.
5 .3 Performance Review. City reserves the right to conduct an annual, or more
frequent review of the management practices of the Low Income Units if deemed necessary by City.
The purpose of each periodic review will be to enable City to determine if the Low Income Units are
being operated and managed in accordance with the requirements and standards of this Agreement. Developer
shall cooperate with City in such reviews.
5.4 Replacement of Management Agent. If, as a result of a periodic review, City
determines in its reasonable judgment that the Low Income Units are not being operated and
managed in accordance with any of the material requirements and standards of this Agreement, City
shall deliver written notice to Developer of any such failure to comply with this Agreement and
provide Developer an opportunity to cure such failure within thirty (30) days of the notice, provided,
however, that if the nature of such failure is such that more than thirty (30) days are reasonably
required for its cure, then Developer shall be provided an additional ninety (90) days thereafter to
diligently pursue such cure to completion. If Developer is unable to timely cure any such failure
identified by the City in writing, then the City shall deliver a second written notice to Developer. No
later than thirty (30) days after receipt by Developer of such written notice, City staff and Developer
shall meet in good faith to consider methods for improving the operating status of the Low Income
Units, including, without limitation, the possible replacement of the Management Agent in the in the
event such Management Agent is unable to comply with the requirements of this Agreement.
If, after such meeting, City staff reasonably determines that the Management Agent is not
adequately performing and City requires, in writing, the replacement of the Management Agent,
Developer shall dismiss the Management Agent within thirty-five (35) days of City's written demand
to replace the Management Agent, and shall appoint a replacement Management Agent, or seek Self-
Management, in accordance with the terms set forth in Section 5 .2 above.
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Any contract with a Management Agent for the operation or management of the Low Income
Units entered into by Developer shall provide that the contract can be terminated as set forth above.
Failure to remove the Management Agent in accordance with the provisions of this Section shall
constitute default under this Agreement, and City may enforce this provision through legal
proceedings as specified in Section 6.3.
5.5 City Approval of Management Policies. Upon written request by City,
Developer shall submit its written management policies in connection with the rental of Low Income
Units to City for its review, and shall amend such policies in any way necessary to ensure that such
policies comply with the provisions of this Agreement. This includes a marketing plan establishing
the process for seeking, selecting and determining the eligibility of tenants of the Low Income Units.
5 .6 Property Maintenance. Developer agrees, for the entire Term, to maintain all
interior and exterior improvements, including common area landscaping, on the Property in good
condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all
applicable laws, rules, ordinances, order and regulations of all federal, state, county, municipal, and
other governmental agencies and bodies having or claiming jurisdiction and all their respective
departments, bureaus, and officials.
City places prime importance on quality maintenance to ensure that all affordable housing
projects within the City are not allowed to deteriorate due to below-average maintenance. Normal
wear and tear of the Project will be acceptable to City assuming Developer agrees to provide all
necessary improvements to assure the Project is maintained in good condition. Developer shall make
all repairs and replacements necessary to keep the improvements in good condition and repair.
In the event that Developer breaches any of the covenants contained in this section and such default
continues for a period of five (5) business days after written notice from City with respect to graffiti,
debris, waste material, and any other matter posing a threat to the health and safety of the tenants, or
thirty (30) days after written notice from City with respect to general maintenance, landscaping and
building improvements (and subject to any stricter requirements included in any applicable City
Ordinance), then City, in addition to whatever other remedy it may have at law or in equity, shall have
the right to enter upon the Property ( or any portion thereof), following at least seventy-two (72) hours'
prior written notice to Developer, and perform or cause to be performed all such acts and work
necessary to cure the default. Provided however, that if the nature of such failure is such that more
than thirty (30) days are reasonably required to cure the breach, then Developer shall be provided an
additional ninety (90) days thereafter to diligently pursue such cure to completion. By execution of
this Agreement, Developer hereby irrevocably grants the City, and the City's employees and agents, a
right of entry for such purpose. Pursuant to such right of entry, City shall be permitted (but is not
required) to enter upon the Property and perform all acts and work necessary to protect, maintain, and
preserve the improvements and landscaped areas on the Property, and to demand reimbursement from
Developer, in the amount of the reasonable expenditures arising from such acts and work of
protection, maintenance, and preservation by City and/or costs of such cure, including an
administrative charge equal to ten percent (10%) of such expenditures, which amount shall be
promptly paid by Developer to City upon written demand.
ARTICLE 6. MISCELLANEOUS
6.1 Term. The provisions of this Agreement shall apply to the Property for the
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entire Te1m as defined in Section 1 above. This Agreement shall bind any successor, heir or assign of
Developer, whether a change in interest occurs voluntarily or involuntarily, by operation of law or
otherwise, except as expressly released by City in writing and recorded in the Official Records.
6.2 Covenants to Run With the Land. City and Developer hereby declare their
express intent that the covenants and restrictions set forth in this Agreement shall run with the land,
and shall bind all successors in title to the Property, provided, however, that on the expiration of the
Term of this Agreement, this Agreement and said covenants and restrictions shall expire. On the
expiration of the Term of this Agreement, Developer may deliver written notice to City requesting a
termination agreement or such other commercially reasonable instrument requested by Developer or a
title insurance company to terminate and remove this Agreement from the real property records. Each
and every contract, deed or other instrument hereafter executed covering or conveying the Property or
any portion thereof shall be held conclusively to have been executed, delivered and accepted subject
to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in
such contract, deed or other instrument, unless City expressly releases such conveyed portion of the
Property from the requirements of this Agreement.
6.3 Enforcement by City. If Developer fails to perform any obligation under this
Agreement, and fails to cure the default within thirty (30) days after City has notified Developer in
writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to
cure within thirty (30) days and thereafter diligently pursue such cure to completion within ninety (90)
days, or such mutually agreeable period as is necessary so long as Developer continuous and
diligently pursues such cure, City shall have the right to enforce this Agreement by any or all of the
following actions, or any other remedy provided by law.
(a) Action to Compel Performance or for Damages. City may bring an action at
law or in equity to compel Developer's performance of its obligations under this Agreement, and/or for
damages. Developer acknowledges that any breach in Developer's performance of Developer's
obligations under this Agreement shall cause irreparable harm to the City, and materially impair the
public policy objectives set forth in the Carlsbad Municipal Code. Therefore, Developer agrees that
the City is entitled to equitable relief in the form of specific performance, and that an award of
damages may not be adequate to compensate the City for Developer's failure to perform according to
the terms of this Agreement. Notwithstanding the foregoing, the City, in its sole and absolute
discretion, may elect the appropriate remedy for Developer's default under this Agreement.
(b) Remedies Provided Under Ordinance. City may exercise any other remedy
available under the Ordinance in effect as of the date of this Agreement.
6.4 Attorneys' Fees and Costs. In the event any action or proceeding in court or
other dispute resolution mechanism permitted under this Agreement is commenced by either party to
interpret or enforce the terms of this Agreement, the prevailing party therein shall be entitled to
recover from the non-prevailing party all of the prevailing party's reasonable costs and expenses in
connection therewith, including on any appeal and including expert witness fees, document copying
expenses, exhibit preparation costs, carrier expenses and postage and communication expenses, and
reasonable attorneys' fees and costs for the services rendered to the prevailing party in such action or
proceeding (which shall include the reasonable costs for services of the prevailing party's in-house
counsel and any third-party counsel retained by the prevailing party).
6.5 Recording and Filing. City and Developer shall cause this Agreement, and all
amendments and supplements to it, to be recorded against the Property in the Official Records.
6.6 Governing Law; Venue. This Agreement shall be governed by the laws of the
State of California. Venue for any dispute arising out of this Agreement shall be San Diego County.
6.7 Amendments. This Agreement may be amended only by a written instrument
executed by all the parties hereto or their successor in title, duly recorded in the Official Records.
6.8 Notice. All notices given or certificates delivered under this Agreement shall be
deemed received on the delivery or refusal date shown on the delivery receipt, if: (i) personally
delivered by a commercial service which furnishes signed receipts of delivery; or (ii) mailed by
certified mail, return receipt requested, postage prepaid, addressed to the party to receive such notice at
the addresses set forth below. Any of the parties may, by notice given hereunder, designate any further
or different addresses to which subsequent notices, certificates or communications shall be sent.
To City:
City of Carlsbad
Housing & Homeless Services Department
1200 Carlsbad Village Drive
Carlsbad, CA 92008-1949
Attn: Housing & Homeless Services Director
To Developer:
Fenton Ponto LLC
c/o H.G. Fenton Co.
7577 Mission Valley Rd.
San Diego, CA 92108
Attn: General Counsel
6.9 Entire Agreement. The Recitals set forth above, and all exhibits attached hereto,
are hereby incorporated into this Agreement by this reference. This Agreement contains the entire
agreement between the parties as to the subject matter hereof, and supersedes any and all prior
arrangements and understandings between the parties, and no other agreement, statement or promise
made by either party hereto which is not contained herein shall be binding or valid provided, however,
that nothing in this Section limits the effect or enforceability of the City of Carlsbad Municipal Code.
This Agreement shall not be construed as if it
had been prepared by one of the parties, but rather as if both parties had prepared it. The parties have
read and reviewed this Agreement and agree that any rule of construction to the effect that ambiguities
are to be resolved against the drafting party (including but not limited to Civil Code Section 1654 as
may be amended from time to time) shall not apply to the interpretation of this Agreement.
6.10 Waiver. The waiver of or failure to enforce any provision of this Agreement
shall not operate as a waiver of any future breach of any such provision or any other provisions hereof.
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6.11 Relationship of Parties. Nothing contained in this Agreement shall be deemed
or construed by the parties or any third party to create the relationship of principal and agent or of
partnership or of joint venture or of association. The relationship of the parties is that of an owner and
developer of real property and an administrator of a municipal inclusionary housing program;
furthermore, the paiiies agree and acknowledge that this Agreement is in furtherance of the inherent
power of City to regulate the use of land within City's jurisdiction. Developer further acknowledges,
understands and agrees that the City does not undertake or assume any responsibility for or duty to
Developer to select, review, inspect, supervise, pass judgment on, or inform Developer of the quality,
adequacy or suitability of the Low Income Units (or any other portion of the Property). The City
owes no duty of care to protect Developer against negligent, faulty, inadequate or defective building
or construction or any condition of the Property and Developer agrees that neither Developer, or
Developer's heirs, successors or assigns shall ever claim, have or assert any right or action against the
City for any loss, damage or other matter arising out of or resulting from any condition of the Property
and will hold the City harmless from any liability, loss or damage as set forth below. Any review by
the City of any documents submitted by the Developer to the City pursuant to this Agreement,
including, but not limited to the form of any tenant lease, is solely to confirm compliance with the
requirements of this Agreement and shall not be deemed to be a representation of any kind of the
validity, business advantage, or legal enforceability of such document(s). Allegra will revise.
6.12 Hold Harmless; Indemnity. Developer shall indemnify, defend (with counsel
reasonably selected by the City), and hold harmless the City and its councilmembers, officers,
officials, agents, and employees against any and all liability, claims, actions, causes of action or
demands whatsoever against any of them, for the following: (i) any injury or death of any person or
damage to property or other liability of any nature arising out of Developer's ownership or operation of
the Project; (ii) any claims arising out of Developer's performance or non-performance of its
obligations hereunder; or (iii) otherwise related to Developer's ownership or operation of the Project,
except where the cause of such is the gross negligence or willful misconduct of the City. The
indemnification obligations set forth in this Section shall survive any termination or expiration of this
Agreement.
6.13 Time is of the Essence. In all matters under this Agreement, the parties agree
that time is of the essence. References in this Agreement to days shall be to calendar days. If the last
day of any period to give or reply to a notice, meet a deadline or undertake any other action occurs on
a day that is not a day of the week on which the City of Carlsbad is open to the public for carrying on
substantially all business functions (a "Business Day"), then the last day for giving or replying to such
notice, meeting such deadline or undertaking any such other action shall be the next succeeding
Business Day. In no event shall a Saturday or Sunday be considered a Business Day.
6.14 Interpretation. The use in this Agreement of the words "including", "such as" or
words of similar import when used with reference to any general term, statement or matter shall not be
construed to limit such statement, term or matter to the specific statements, terms or matters, unless
language of limitation, such as "and limited to" or words of similar import are used with reference
thereto. The headings of this Agreement are for convenience only and do not in any way limit or
ainplify the terms or provisions hereof. All pronouns and variations thereof shall be deemed to refer to
the masculine, feminine, or neuter, and to the singular or plural, as the identity of the party or parties
may reqmre.
6.15 No Limitation on Municipal Powers. Nothing in this Agreement shall limit,
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waive, or otherwise impair the authority and discretion of: (a) the City's Building Department, in
connection with the review and approval of any proposed construction plans for the Property ( or any
change to such plans), or any use, or proposed use, of the Property; or (b) any other office or
department of the City acting in its capacity as a governmental regulatory authority with jurisdiction
over the development, use, or operation of the Property.
6.16 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement
shall not in any way be affected or impaired thereby.
6.17 State Law Requirements.
(a) Developer Obligations Prior to Expiration of Term. At least six (6) months
prior to the expiration of the Term, Developer shall provide by first-class mail, postage prepaid, a
notice to all Tenants in the Units containing: (i) the anticipated date of the expiration of the Term; (ii)
any anticipated Rent increase upon the expiration of the Term; (iii) a statement that a copy of such
notice will be sent to the City; and (iv) a statement that a public hearing may be held by the City on the
issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any
such hearing. Developer shall also file a copy of the above-described notice with the City's
Department of Housing and Neighborhood Services. In addition, Developer shall comply with the
requirements set forth in California Government Code Sections 65863.10 and 65863.11, to the extent
then applicable. Nothing in this subsection shall be deemed to waive, limit, or otherwise impair the
Developer's obligation to comply with Section 21.85.155 of the Inclusionary Housing Ordinance.
6.18 Counterparts. This Agreement may be executed in multiple originals, each of
which is deemed to be an original, and may be executed in counterparts, which shall constitute one and
the same agreement.
6.19 Project Financing. No later than thirty (30) days after Developer's written
request for an estoppel certificate, the City shall provide an estoppel certificate to the Developer in
favor of any person identified by Developer, that ( except as set forth on a schedule to the estoppel
certificate) there are ( a) no defaults by Developer under this Agreement, (b) the City has neither made
nor investigated nor is the City about to make, any claim, pursue any judgment, cause of action, and
Developer has no unfulfilled monetary obligations in favor of the City, any of which such matters have
arise out of or related to this Agreement, except as set forth in the copy of the attached instrument, ( d)
the attached copy of the Agreement is a true and correct and complete copy of the Agreement, and ( e)
any other matter that Developer or any lender, prospective lender, purchaser or prospective purchaser
may reasonably request.
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EXHIBIT A
LEGAL PROPERTY DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF
CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL 1:
Parcel "B" as shown on Parcel Map No. 4383 in the City of Carlsbad, County of San
Diego, State of California, filed in the office of the County recorder of San Diego
County, January 14, 1976.
PARCEL 2:
That parcel of land, situated within a portion of the South half of Southwest quarter
of Section 28 and within a portion of the South two-thirds of Lot 4 Southeast quarter
of Southeast quarter-of Section 29, Township 12 South, Range 4 West, San
Bernardino Meridian, according to Official Plat thereof, in the County of San Diego,
State of California, and more particularly described as a whole as follows:
Beginning at the corner common to Sections 28, 29, 32, and 33, in said Township and
Range, thence along the Southerly line of said Section 28 North 89°59'20" East 250
feet, more or less, to the Southwesterly corner of that strip of land 200 feet wide,
described in Deed to the Atchison Topeka and Santa Fe Railway Company, recorded
March 30, 1946 as Instrument No. 34729, in Book 2059, Page(s) 466 of Official
Records; thence along the Southwesterly line of said 200 foot strip of land North
21 °08'18" West 856.60 feet, more or less, to the Northeasterly boundary of the 200
foot right of way of the Atchison Topeka and Santa Fe Railway Company formerly
California Southern Railroad Company, as said right of way was granted by Act of
Congress and as shown on original right of way map thereof approved by the
Department of the Interior, United States of America, on May 12, 1881; thence along
said railway boundary South 4°40'18" East to the Southerly line ofsaid Section 29;
thence along said Southerly section line South 89°49' East to the point of beginning.
PARCEL 3:
All that portion of the South two-thirds of Lot 4 (Southeast quarter of the Southeast
quarter) of Section 29, Township 12 South, Range 4 West, San Bernardino Meridian,
in the County of San Diego. State of California, according to the United State
Government Survey approved October 25, 1875, described as follows:
Beginning at the intersection of the South line of said Section 29, with the Westerly
line of the abandoned portion of the Atchison, Topeka and Santa Fe Railway
Company's (formerly the California Railway Company) right of way across the
South two-thirds of said Lot 4, said point being distant along said Southerly line
North 89°49' West 209.69 feet from the Southeast corner of said Section 29; thence
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along the Westerly line of said abandoned railroad right of way, North 4°40'18"
West to the Northerly line of said South two-thirds of Lot 4, being the South line of
land conveyed to Herbert J. Estes by Deed recorded December 3, 1936 in Book 600,
Page 65 of Official Records; thence retracing South 4°40'18" East a distance of
600.00 feet to the true point of beginning: thence continuing South 4°40'18" East
159.19 feet; thence South 15°17' East, 188.48 feet to the North line of the South 40.00
feet of said Lot 4; thence along said North line South 89°49' East 162.60 feet to the
Easterly line of said abandoned right of way; thence along said Easterly line North
4°40'18" West 343.26 feet to a point bearing South 89°40'18" East 200.00 feet from
the true point of beginning; thence North 89°40'18" West 200.00 feet to the true
point of beginning.
APNs: 214-160-25, 214-160-28, 214-171-11
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EXHIBIT B
Unit Type Bedroom/ Density Inclusionary Affordability
Bathrooms Bonus Low Low Income Rent Level
Income Units Units
Rowhomes (Buildings No. 1-6)
Plan RI 3/3 3 Same Units 60%
PlanR2 4/3.5 2 Same Units 60%
Townhomes (Buildings No. 7-15)
Plan Fl 3/3.5 2 Same Units 60%
Plan F2 4/3.5 3 Same Units 60%
Triplexes (Buildings No. 16-23)
Plan Tl 2/2 1 Same Unit 60%
Plan T2 3/2.5 0 1 70%
Plan T3 4/3 0 1 70%
Total 11 13
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