HomeMy WebLinkAboutCT 04-11; Poinsettia Commons LLC; 2009-0123135; 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
1L!P
DGC# 2009-0213135
APR 24, 2009 2:32 PM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
DAVID L. BUTLER. COUNTY RECORDER
FEES: 57.00 WAYS: 2
PAGES:14
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement")
is made and entered into as of this pi O T day of $-Pfc.iL _ , 2009, by and
between the City of Carlsbad, a municipal corporation (the "City"), and Poinsettia Commons
LLC, a Delaware limited liability company ("Owner").
RECITALS
1 . The City and Owner have entered into that certain Affordable Housing Agreement
Imposing Restrictions on Real Property dated May 22, 2007, which was recorded on May 31,
2007, in the Official Records of San Diego County as Document No. 2007-0369346. The
Affordable Housing Agreement and (the "Affordable Housing Agreement") set forth the
affordable housing requirements for the BluWater Crossing (formerly know as Poinsettia
Commons) Project to be developed on Planning Area 6 of the Poinsettia Properties Specific Plan,
located on the real property in the City of Carlsbad, County of San Diego, California (the
"Property").
2. The Owner intends to develop 78 units within Planning Area 6 of the Poinsettia
Properties Specific Plan. Of the 78 units, 12 units ("Low Income Units") will be restricted to and
affordable to low income households. The Low Income Units will be developed to meet the
inclusionary housing requirement of the BluWater Crossing Project.
3. Owner has agreed to observe all the terms and conditions set forth below.
4. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the City and the Owner wish to enter into this
Agreement.
THEREFORE, the City and the Owner hereby agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 Definitions
When used in this Agreement, the following terms shall have the respective meanings
assigned to them in this Article 1.
(a) "Agency" shall mean the Carlsbad Redevelopment Agency, Carlsbad, California,
a public body, corporate and politic.
(b) "Agreement" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(c) "City" shall mean the City of Carlsbad, a municipal corporation.
(d) "Development" shall mean the Property and the 78 units to be constructed on the
Property, as well as all landscaping, roads and parking spaces existing thereon, as the same may
from time to time exist.
(e) "Gross Income" shall mean the total anticipated annual income of all persons in a
household, as calculated in accordance with 25 California Code of Regulations Section 6914 or
pursuant to a successor State housing program that utilizes a reasonably similar method of
calculation of gross income, hi the event that no such successor program exists, the City shall
provide the Owner with a reasonably similar method of calculation of gross income as provided
in said Section 6914.
(f) "HCD" shall mean the California Department of Housing and Community
Development.
(g) "Low Income Household" shall mean a household whose annual Gross Income is
more than fifty percent (50%), but does not exceed eighty percent (80%) of the Median Income
for San Diego County, adjusted for household size, as determined by the U.S. Department of
Housing and Urban Development.
(h) "Low Income Units" shall mean the twelve (12) units limited to occupancy by
Low Income Households pursuant to Section 2.1 below, as more particularly described in Exhibit
A attached hereto and incorporated herein.
(i) "Market Rate Unit" shall mean the units which may be occupied by households
other than Low Income Households, pursuant to Section 2.1 below.
(j) "Median Income" shall mean the median gross yearly income adjusted for actual
household size, in the County of San Diego, California, as published from time to time by the
U.S. Department of Housing and Urban Development. In the event that such income
determinations are no longer published, or are not updated for a period of at least eighteen (18)
months, the City shall provide the Owner with other income determinations which are reasonably
similar with respect to methods of calculation to those previously published by HCD.
(k) "Owner" shall mean Poinsettia Commons LLC, a Delaware limited liability
company, and their successors in interest to the Development.
(1) "Project" shall mean the BluWater Crossing Project which shall not exceed 78
dwelling units.
(m) "Property" shall mean the real property described in Exhibit A attached hereto
and incorporated herein.
(n) "Rent" shall mean the total of monthly payments by the tenants of a Low Income
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 Owner which are
required of all tenants, other than security deposits; an allowance for the cost of an adequate level
of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity,
gas and other heating, cooking and refrigeration fuel, but not telephone service; any other
interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public
or private entity other than the Owner, and paid by the tenant.
(o) "Term" shall mean the period of time beginning on the date of recordation of this
Agreement and ending fifty-five (55) years after the final inspection approval for all Low Income
Units.
ARTICLE 2 - AFFORD ABILITY COVENANTS
2.1 Occupancy Requirement. The Low Income Units shall be rented and occupied by
or, if vacant, available for rental and occupancy by Low Income Households.
2.2 Allowable Rent.
(a) The monthly Rent charged the occupants of the Low Income Units shall
not exceed one-twelfth of thirty percent (30%) of seventy percent (70%) of Median Income,
adjusted for household size. The monthly Rent charged the occupants of the Market Rate Units
shall be established by the Owner, in its sole and absolute discretion.
(b) 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 Assumed Household Size
Studio 1
One 1.5
Two 3
Three 4.5
Four 6
2.3 Increased Income of Occupying Households. In the event, upon annual
recertification of an occupant household's income, the Owner discovers that a Low Income
Household no longer qualifies as a Low Income Household, but the household income does not
exceed 90% of the Median Income, such household's unit shall continue to be considered a Low
Income Unit, and the Rent shall remain at the allowable rent set forth in Section 2.2 above. In
the event, upon annual recertification of an occupant household's income, the Owner discovers
that a Low Income Household no longer qualifies as a Low Income Household and the
household's income exceeds 90% of the Median Income, such household shall be permitted to
continue to occupy the unit, and, upon expiration of the household's lease, and sixty (60) days
written notice to the household, the Rent may be increased to one-twelfth (1/12th) of thirty
percent (30%) of the household's actual Gross Income until the household vacates the unit, at
which time the unit shall be rented to an income eligible household to meet the requirements of
Section 2.1 above.
2.4 Lease Provisions. Owner shall include in leases for all Low Income Units
provisions which authorize the Owner 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. Each such 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 income increases above the applicable limits for a Low Income Household, such
household's Rent may be subject to increase as provided for in Section 2.3 above.
2.5 Section 8 Certificate Holders. For the Low Income Units: (i) the Owner 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, or its successor, (ii) the Owner shall not apply selection criteria to
Section 8 voucher holders that is more burdensome than criteria applied to all other prospective
tenants, nor (iii) shall the Owner apply or permit the application of management policies or lease
provisions which have the effect of precluding occupancy of units by such prospective tenants.
2.6 Condominium Conversion. The Owner shall not, without the City's prior written
consent, sell any Low Income Unit as a condominium or cooperative ownership during the Term
of this Agreement.
2.7 Apartment Sale. Owner may sell all or any portion of the Low Income Units in
bulk to one or more third parties who shall own such Low Income Units subject to the terms of
this Agreement.
ARTICLE 3 - INCOME CERTIFICATION AND REPORTING
3.1 Income Certification. The Owner will obtain, complete and maintain on file,
immediately prior to initial occupancy and annually thereafter, income certifications from each
Low Income Household. The Owner shall make a good faith effort to verify that the income
provided by an applicant or occupying household in an income certification is accurate by taking
one or more of the following steps as a part of the verification process: (1) obtain pay stubs for
the four (4) most recent pay periods; (2) obtain income tax returns for the two (2) most recent tax
years; (3) conduct a credit agency or similar search; (4) obtain an income verification form from
the applicant's current employer; (5) obtain an income verification form from the Social Security
Administration and/or the California Department of Social Services if the applicant receives
assistance from either of such agencies; or (6) if the applicant is unemployed and has no such tax
return, obtain another form of independent verification. Copies of tenant income certifications
shall be available to the City upon written request.
3.2 Annual Report to City. Each year the Owner shall submit an annual report to the
City, in a form approved by the City. The annual report shall include for each Low Income Unit
covered by this Agreement, the Rent and the income and household size of the household
occupying the Low Income Unit. The report shall also state the date the tenancy commenced for
each rental Low Income Unit and such other information as the City may be required by law to
obtain.
3.3 Additional Information. Beginning the first June 1st after the final Certificate of
Occupancy for the Development, the Owner shall provide any additional information regarding
the Low Income Units and the Owner's obligations under this Agreement that is reasonably
requested by the City. Upon 5 days prior written request and during regular business hours, the
City shall have the right to examine and make copies of all books, records or other documents of
the Owner that pertain to any Low Income Unit.
3.4 Records. Owner shall maintain complete, accurate and current records pertaining
to the Low Income Units, and, upon 5 days prior written request by the City, shall permit any
duly authorized representative of the City to inspect records, including records pertaining to
income and household size of tenant households.
3.5 Welfare Reform Act Compliance. If and to the extent applicable, and
unless Owner is otherwise exempt from the following requirement under
applicable law, Owner shall comply with the requirements of the Public
Responsibility and Work Opportunity Reform Act of 1996, as amended,
including, without limitation, verifying the citizenship or immigration status of
prospective tenants for the units in accordance with the verification procedures
established under such Act.
ARTICLE 4 - OPERATION OF THE DEVELOPMENT
4.1 Residential Use. The Low Income Units shall be operated only for residential use.
No part of the Low Income Units shall be operated as transient housing.
4.2 Compliance with Affordable Housing Agreement. Owner shall comply with all
the terms and provisions of the Affordable Housing Agreement.
4.3 Taxes and Assessments. Owner shall pay all real and personal property taxes,
assessments and charges and all franchise, income, employment, old age benefit, withholding,
sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to
prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided,
however, that the Owner shall have the right to contest in good faith, any such taxes,
assessments, or charges. In the event the Owner exercises its right to contest any tax, assessment,
or charge against it, Owner, on final determination of the proceeding or contest, shall
immediately pay or discharge any decision or judgment rendered against it, together with all
costs, charges and interest.
4.4 Nondiscrimination. All of the Low Income Units shall be available for occupancy
on a continuous basis to members of the general public who are income eligible. Owner shall not
give preference to any particular class or group of persons in renting or selling the Low Income
Units, except to the extent that the Low Income Units are required to be leased to Low Income
Households or to Carlsbad Redevelopment Agency or City displacees pursuant to Section 4.6
below. There shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national
origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment
of any Low Income Unit nor shall Owner or any person claiming under or through the Owner,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants,
or vendees of any Low Income Unit or in connection with the employment of persons for the
operation and management of the Development. All deeds, leases or contracts made or entered
into by the Owner as to the Low Income Units or portion thereof, shall contain covenants
concerning discrimination as prescribed by the Affordable Housing Agreement.
4.5 Preference to Displacees. Owner shall give a preference in the rental of any Low
Income Units to eligible households displaced by activity of the Carlsbad Redevelopment
Agency or the City upon receiving a written request of the Agency or the City regarding such
displacement. For the purposes of this Section 4.6, "preference" means moving such persons to
the top of any waiting list and processing applications by such persons ahead of applications
submitted by other persons.
ARTICLE 5 - PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities. The Owner is responsible for all management
functions with respect to the Development, including without limitation the selection of tenants,
certification and recertification of household size and income, evictions, collection of rents and
deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital
items, and security. The City and the Agency shall have no responsibility over management of
the Development. The Owner shall retain a professional property management company
approved by the City in its reasonable discretion to perform its management duties hereunder,
unless the Owner demonstrates to the City that it has the capacity to self-manage the
Development and receives written City approval for self-management. Poinsettia Commons,
LLC and its affiliates are hereby approved by the City to self-manage the Low Income Units.
5.2 Management Agent; Periodic Reports. The Low Income Units shall at all times
be managed by an experienced management agent reasonably acceptable to the City, which may
include self-management by the Owner, with demonstrated ability to operate residential facilities
like the Development in a manner that will provide decent, safe, and sanitary housing (as
approved, the "Management Agent"). Prior to the first occupancy permit for any building within
the Development, the Owner shall submit for the City's approval the identity of any proposed
Management Agent. The Owner shall also submit such additional information about the
background, experience and financial condition of any proposed Management Agent as is
reasonably necessary for the City to determine whether the proposed Management Agent meets
the standard for a qualified Management Agent set forth above. If the proposed Management
Agent meets the standard for a qualified Management Agent set forth above, the City shall
approve the proposed Management Agent by notifying the Owner in writing. Unless the
proposed Management Agent is disapproved by the City within thirty (30) days, which
disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed
approved. For the purposes of this Section 5.2, Julie Ilaoa is approved by the City as the
Managing Agent for the Low Income Units.
5.3 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 Low Income Units. The purpose of each periodic review will be to enable the City
to determine if the Low Income Units are being operated and managed in accordance with the
requirements and standards of this Agreement. The Owner shall cooperate with the City in such
reviews.
5.4 Replacement of Management Agent. If, as a result of a periodic review, the 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,
the City shall deliver notice to the Owner of its intention to cause replacement of the
Management Agent, including the reasons therefore. Within fifteen (15) days of receipt by the
Owner of such written notice, City staff and the Owner shall meet in good faith to consider
methods for improving the financial and operating status of the Low Income Units, including,
without limitation, replacement of the Management Agent.
If, after such meeting, City staff reasonably determines that the Managing Agent is not
adequately performing and recommends in writing the replacement of the Management Agent,
Owner 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 the
Owner shall provide that the contract can be terminated as set forth above. Failure to remove the
Management Agent in accordance with the provisions of this Section shall constitute default
under this Agreement, and the City may enforce this provision through legal proceedings as
specified in Section 6.3.
5.5 Approval of Management Policies. The Owner shall submit its written
management policies with respect to the Low Income Units 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.
5.6 Property Maintenance. The Owner agrees, for the entire Term of this Agreement,
to maintain all interior and exterior improvements, including landscaping, related to the Low
Income Units on the Property hi good condition and repair (and, as to landscaping, in a healthy
condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of
all federal, state, county, municipal, and other governmental agencies and bodies having or
claiming jurisdiction and all their respective departments, bureaus, and officials.
The City places prime importance on quality maintenance to 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 Low Income Units will be acceptable to the City
assuming the Owner agree to provide all necessary improvements to assure the Low Income
Units are maintained in good condition. The Owner shall make all repairs and replacements
necessary to keep the improvements in good condition and repair.
In the event that the Owner 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 the 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 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 related to the Low Income Units on the Property, and to attach a lien on the Low Income
Units, or to assess the Low Income Units, 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 ten percent (10%) of such expenditures,
which amount shall be promptly paid by the Owner to the City upon demand.
ARTICLE 6 - MISCELLANEOUS
6.1 Term. The provisions of this Agreement shall apply to the Low Income Units on
the Property for the entire Term as defined in Section 1 above. This Agreement shall bind any
successor, heir or assign of Owner of the Low Income Units, whether a change in interest occurs
voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by the
City in a writing. In the event that Owner sells, transfers or conveys the Low Income Units to a
third party in accordance with this Agreement, the transferring Owner shall thereafter be released
from any and all liability accruing pursuant to this Agreement from and after such date of sale or
transfer.
6.2 Covenants to Run With the Land. The City and the Owner hereby declare their
express intent that the covenants and restrictions set forth in this Agreement shall run with the
land, and shall bind all successors in title to the Low Income Units, 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 Low
Income Units 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 the City expressly
release such conveyed portion of the Low Income Units from the requirements of this
Agreement.
6.3 Enforcement by the City. If the Owner fails to perform any obligation under this
Agreement, and fail to cure the default within 30 days after the City has notified the Owner in
writing of the default or, if the default cannot be cured within 30 days, failed to commence to
cure within 30 days and thereafter diligently pursue such cure to completion within ninety (90)
days, 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) Action to Compel Performance or for Damages. The City may bring an
action at law or in equity to compel Owner's performance of its obligations under this
Agreement, and/or for damages.
(b) Remedies Provided Under Affordable Housing Agreement. The City may
exercise any other remedy provided under the Affordable Housing Agreement.
6.4 Attorneys Fees and Costs. In any action brought to enforce this Agreement, the
prevailing party shall be entitled to all reasonable costs and expenses of suit, including
reasonable attorneys' fees. This section shall be interpreted in accordance with California Civil
Code Section 1717 and judicial decisions interpreting that statute.
6.5 Recording and Filing. The City and the Owner shall cause this Agreement, and all
amendments and supplements to it, to be recorded against the Low Income Units in the Official
Records of the County of San Diego.
6.6 Governing Law. This Agreement shall be governed by the laws of the State of
California.
6.7 Amendments. This Agreement may be amended only by a written instrument
executed by all the parties hereto or their successors in title, and duly recorded in the real
property records of the County of San Diego, California.
6.8 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 THE CITY OF CARLSBAD:
CITY OF CARLSBAD
Housing and Redevelopment Department
Attn: Housing and Redevelopment Director
2965 Roosevelt Street, Suite B
Carlsbad, California 92008-2389
TO THE DEVELOPER:
Poinsettia Commons LLC
949 South Coast Drive, Suite 400
Costa Mesa, California 92626
Attn: Brad C. Perozzi
10
6.9 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions of this
Agreement shall not in any way be affected or impaired thereby.
IN WITNESS WHEREOF, the City and the Owner have executed this Agreement by duly
authorized representatives, all on the date first written above.
OWNER
POINSETTIA COMMONS LLC, a
Delaware limited liability company
By: SC 102 Poinsettia Limited Partnership,
a Delaware limited partnership, its sole
member
By: TCR Southern California III, Inc., a
Texas corporatioanits^eneral partner
Name:
Title
CITY
CITY OF CARLSBAD, a municipal
corporation
By:
Sandra L. Holder
Community Development Director
APPROVED AS TO FORM:
RONALD JR.
By:
ATTORNEY
Jan^Mobaldi
Assistant City Attorney
If required by City, proper notarial acknowledgment of execution by Developer must be attached.
If a Corporation, Agreement must be signed by one corporate officer from each of the following
two groups.
*Group A.
Chairman,
President, or
Vice-President
**Group B.
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the officer(s) signing to bind the corporation.
11
ACKNOWLEDGMENT
State of California
County of
On beforeme.
(insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)-ie/are
subscribed to the within instrument and acknowledged to me that ho/oho/they executed the same in
bis#»ef/their authorized capacity (ies), and that by-twa/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature o.(Seal)
MARIA C. MENDIVH.
Commission * ) 743572
Noloty Public - California I
Orang* County *
Comm. BO*M JUn2.2011
1
EXHIBIT A
Property Description
Lot 1 of Carlsbad Tract No. CT 04-11, Poinsettia Commons, as shown on Map No.
15593, filed on August 17, 2007, in the Office of the San Diego County Recorder.
BUILDING 1 - LEVEL 2
~ce
CO
ROOF
5
CO
ELEV.
201
UNIT A1
CORRIDOR
202
UNIT A1(R)
ROOF r
203
UNIT A5(R)
204
UNIT A2(R)
205
UNIT A2
BALCONY
~l
206
UNIT A3
ROOF r
BUILDING 1 - LEVEL 3
cc
5
CO
COccs
CO
ELEV.
301
UNIT A4
302
UNIT A4(R)
CORRIDOR
303
UNIT A5(R)
304
UNIT A5(R)
305
UNIT A5 306
UNIT A6
BALCONY
-BALCONY
SCALE: 1" = JO'
PROJECT DESIGN CONSULTANTS
Planning | Landscape Architecture I Environmental I Engineering I Survey
701 B Street, Suite 800
619.235.6471 Tel
San Diego, CA 92101
619.234.0349 Fax
AFFORDABLE HOUSING EXHIBIT A
BLUWATER CROSSING
CARLSBAD, CALIFORNIA
P:\3153\MAPPING\CONDG\CONDOMINIUM PLAN\BUILDING LIMITS (envelope)\Building l.dwg Apr 10, 2009