HomeMy WebLinkAboutCT 96-02; Terraces At Sunny Creek, The; 2002-0810029; Affordable Housing-Regulatory Agreement & Dec. of Restrictive CovenantsRECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO: SAN DIEGO C&fi RECORDER'S OFFICE GREGORY 3. SMITH. CWNTY MCDNDER FEES: 44.00 City of Carlsbad 6 Attn. City Clerk City Clerk's Office
Carlsbad. CA 92008
1200 Carlsbad Village Drive
(Space above for Recorder S Use)
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 21st day of August ,2002, by and between the
City of Carlsbad, a municipal corporation (the "City"), and The Terraces at Sunny Creek LLC, a
California limited liability company, ("Owner").
RECITALS
1. The City and Owner have entered into that certain Affordable Housing
Agreement Imposing Restrictions on Real Property dated April 17,2001, which was recorded on
May 10,2001, in the Official Records of San Diego County as Document No. 2001-0294965.
The Affordable Housing Agreement set forth the affordable housing requirements for the Sunny
Creek Development, located on the real property in the City of Carlsbad, County of San Diego,
more particularly described in Exhibit A attached hereto and incorporated herein (the
"Property").
2. Owner has agreed to observe all the terms and conditions set forth below.
3. Owner holds a fee interest in the Development land, and in all improvements to
be constructed by Owner on such land.
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) "Adjusted Income" shall mean the total anticipated annual income of all
persons in a household, as calculated in accordance with 25 California Code of Regulations
August 20,2002 1
Section 6914 or pursuant to a successor State housing program that utilizes a reasonably similar
method of calculation of adjusted income. In the event that no such program exists, the City
shall provide the Owner with a reasonably similar method of calculation of adjusted income as
provided in said Section 6914.
(b) “Agency” shall mean the Carlsbad Redevelopment Agency, Carlsbad,
California, a public body, corporate and politic.
(c) “Agreement” shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(d) “City” shall mean the City of Carlsbad, a municipal corporation.
(e) “Development” shall mean the Property and the fifty (50) 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.
(f) ”HCD” shall mean the California Department of Housing and Community
Development.
(g) ““Lower Income Household” shall mean a household with an Adjusted Income that does not exceed the qualifying limits for low income households as established and
amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and
as published by HCD.
(h) “Low Income Household” shall mean a household whose annual gross
income does not exceed eighty percent (SOYO) of the Area Median Income, adjusted for
household size.
(i) “Low Income Units” shall mean the Units limited to occupancy by Low
Income Households pursuant to Section 2.2 below.
actual
HCD.
6) “Median Income” shall mean the median gross yearly income adjusted for
household size, in the County of San Diego, California, as published from time to time by
~~ ~ In the event that such income determinations are no longer published, or are not updated
for a period of at least eighteen (18) months, the City shall provide the Owner with other income
determinations which are reasonably similar with respect to methods of calculation to those
previously published by HCD.
(k) “Moderate Income Household” shall mean a household whose annual
gross income does not exceed ninety percent (90Yo) of the Area Median Income, adjusted for
household size.
(1) “Moderate Income Units” shall mean the Units limited to occupancy by
Low Income Households pursuant to Section 2.2 below.
August 20,2002 2
(m) "Owner" shall mean The Terraces at Sunny Creek LLC, a California
limited liability company, or its successor in interest in the Property.
(n) "Property" shall mean the real property described in Exhibit A attached
hereto and incorporated herein.
(0) "Rent" shall mean the total of monthly payments by the tenants of a Unit
for the following: use and occupancy of the Unit and land and associated facilities, including
parking; any separately charged fees or 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, television or other subscription
cable services; any other interest, taxes, fees or charges for use of the land or associated facilities
and assessed by a public or private entity other than Owner, and paid by the tenant.
(p) "Term" shall mean the period of time beginning on the date of recordation
of this Agreement and ending fifty-five (55) years after a Certificate of Occupancy is issued by
the City for all Units.
(q) "Units" shall mean fifty (50) rental units to be constructed on the Property
by the Owner, which are offered for rent to and which shall be affordable to low income
households, but excluding there from one (1) resident manager's unit.
ARTICLE 2
AFFORDABILITY COVENANTS
2.1 Occupancv Requirement. The Units shall be rented and occupied by or, if vacant,
available for rental and occupancy by Low Income Households.
2.2 Allowable Rent.
(a) Subject to Section 2.3 below, the monthly Rent charged the occupants of
the Low Income Units shall not exceed one-twelfth of thirty percent (30%) of eighty percent
(80%) of Median Income, adjusted for household size; the monthly Rent charged the occupants
of the Moderate Income Units shall not exceed one-twelfth of thirty percent (30%) of ninety
percent (90%) of Median Income, adjusted for household size;
(b) Subject to Section 2.3(b) below, in calculating the allowable Rent for all
Units, the following assumed household sizes shall be utilized
August 20,2002 3
Number of Bedrooms Assumed Household Size
Studio
One
Two
Three
1
3
1.5
4
2.3 Increased Income of OccuuyinE 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 Area Median Income, such household’s Unit shall continue to be considered a
Low Income Unit, and the Rent may be increased to the levels charged to Moderate Income
Households as described 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 or a Moderate Income Household, such household’s
tenancy shall be terminated upon sixty (60) days written notice, and the Owner shall rent Unit to
a Low Income Household to comply with the requirements of Section 2.2(a) above. In the event,
upon recertification of an occupant household‘s income, the Owner discovers that a Moderate
Income Household no longer qualifies as a Moderate Income Household, such household’s such
household’s tenancy shall be terminated upon sixty (60) days written notice, and the Owner shall
rent the next available Unit to a Low Income Household to comply with the requirements of
Section 2.1 above.
2.4 Lease Provisions. Owner shall include in leases for all Units provisions which
authorize 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 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 or tenancy shall be terminated as stated in Section 2.3 above.
2.5 Section 8 Certificate Holders. The Owner will accept as tenants, on the same
basis as all other prospective tenants, persons who are recipients of federal certificates for rent
subsidies pursuant to the existing housing program under Section 8 of the United States Housing
Act, or its successor. 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 shall the
Owner apply or permit the application of management policies or lease provisions with respect
to the Development which have the discriminatory effect of precluding occupancy of units by
such prospective tenants.
2.6 Condominium Conversion. The Owner shall not convert Development units to
condominium or cooperative Ownership or sell condominium or cooperative conversion rights to
the Property during the Term of this Agreement.
August 20,2002 4
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 and each Moderate Income Household renting any of the Units. The
Owner shall make a good faith effort to verify that the income provided by an applicant or
occupying household in an income certification is accurate by taking one or more of the
following steps as a part of the verification process: (I) 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 andor 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 Citv. Each year Owner shall submit an annual report to the
City, in a form approved by the City. The annual report shall include for each Unit covered by
this Agreement, the Rent and the income and household size of the household occupying the
Unit. The report shall also state the date the tenancy commenced for each rental Unit and such
other information as the City may be required by law to obtain.
3.3 Additional Information. Beginning the first June 1'' after the final Certificate of
Occupancy for the Project, the Owner shall provide any additional information 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
Owner that pertain to any Unit.
3.4 Records. Owner shall maintain complete, accurate and current records pertaining
to the 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 Comuliance. 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 in
accordance with the verification procedures established under such Act.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Residential Use. The Development shall be operated only for residential use. NO
part of the Development shall be operated as transient housing.
August 20,2002 5
4.2 Comuliance 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 Owner shall have the right to contest in good faith, any such taxes,
assessments, or charges. In the event Owner exercises its right to contest any tax, assessment, or
charge against it, Owner, on final determination of the proceeding or contest, shall immediately
pay or discharge any decision or judgment rendered against it, together with all costs, charges
and interest.
4.5 Nondiscrimination. All of the Units shall be available for occupancy on a
continuous basis to members of the general public who are income eligible. Owner 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 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 Unit nor shall
Owner or any person claiming under or through the Owner, establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number,
use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in
connection with the employment of persons for the operation and management of the
Development. All deeds, leases or contracts made or entered into by Owner as to the Units or
the Development or portion thereof, shall contain covenants concerning discrimination as
prescribed by the Loan Agreement.
4.6 Preference to Disulacees. To the extent permitted by law, Owner shall give a
preference in the rental of any Units to eligible households displaced by activity of the Carlsbad
Redevelopment Agency or the City upon receiving a written request of the Agency or the City
regarding such displacement.
ARTICLE 5
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Resuonsibilities. 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 in its reasonable discretion that it has the capacity to
August 20,2002 6
self-manage the Development and receives written City approval for self-management. A
resident manager shall also be required, selection of whom shall be at the discretion of the
Owner.
5.2 Management Agent; Periodic Reports. The Development shall at all times be
managed by an experienced management agent reasonably acceptable to the City, with
demonstrated ability to operate residential facilities like the Development in a manner that will
provide decent, safe, and sanitary housing (as approved, the "Management Agent"). Prior to the
first occupancy permit for any building within the Development, the Owner shall submit for the
City's approval the identity of any proposed Management Agent. The Owner shall also submit
such additional information about the background, experience and financial condition of any
proposed Management Agent as is reasonably necessary for the City to determine whether the
proposed Management Agent meets the standard for a qualified Management Agent set forth
above. If the proposed Management Agent meets the standard for a qualified Management
Agent set forth above, the City shall approve the proposed Management Agent by 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.
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 Development. The purpose of each periodic review will be to enable the City to
determine if the Development is being operated and managed in accordance with the
requirements and 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 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 Owner of its intention to cause replacement of the Management Agent,
including the reasons therefore. Within fifteen (15) days of receipt by 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 Development, including, without limitation, replacement of
the Management Agent.
If, after such meeting, City staff recommends in writing the replacement of the
Management Agent, Owner 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
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.
August 20,2002 7
5.5 Aooroval of Management Policies. The Owner shall submit its written
management policies with respect to the Development to the City for its review, and shall amend
such policies in any way necessary to ensure that such policies comply with the provisions of
this Agreement.
5.6 Prooertv Maintenance. The Owner agrees, for the entire Term of this Agreement,
to maintain all interior and exterior improvements, including landscaping, on the Property in
good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with
all applicable laws, rules, ordinances, orders and regulations of all federal, state, county,
municipal, and other governmental agencies and bodies having or claiming jurisdiction and all
their respective departments, bureaus, and officials.
The City places prime importance on quality maintenance to 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 Development will be acceptable to the City assuming
the Owner agrees to provide all necessary improvements to assure the Development is
maintained in good condition. 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) 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 andor costs of such cure, including an administrative
charge equal to ten percent (10%) of such expenditures, which amount shall be promptly paid by
the Owner to the City upon demand.
ARTICLE 6
MISCELLANEOUS
6.1 Term. The provisions of this Agreement shall apply to the Property for the entire Term
as defined in Section 1 above. This Agreement shall bind any successor, heir or assign of
Owner, whether a change in interest occurs voluntarily or involuntarily, by operation of law or
otherwise, except as expressly released by the City. Notwithstanding the foregoing, upon the
bona fide sale or transfer of ownership of all or any of the Units or Property, the transferring
Owner shall be automatically released from any further obligations or defaults of the successor
owner arising after the effective date of such sale or transfer of the affected Units or Property.
Nothing herein is intended to release any Owner from obligations or defaults occumng or arising
August 20,2002 8
during its period of ownership, even if the default or obligation is not pursued or acted upon until
after the 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 Property, provided, however, that on the
expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Property
or any portion thereof shall be held conclusively to have been executed, delivered and accepted
subject to such covenants and restrictions, regardless of whether such covenants or restrictions
are set forth in such contract, deed or other instrument, unless the City expressly release such
conveyed portion of the Property from the requirements of this Agreement.
6.3 Enforcement by the City. If Owner fails to perform any obligation under this
Agreement, and fails to cure the default within five days as specified in section5.6 or otherwise
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' 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 Property 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
August 20,2002 9
delivered by a commercial service which furnishes signed receipts of delivery or (ii) mailed by
certified mail, return receipt requested, postage prepaid, addressed as shown on the signature
page. Any of the parties may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or communications shall be sent.
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.
DEVELOPER CITY
The Terraces at Sunnv Creek LLC. a CITY OF CARLSBAD, a municipal
limited liability company corporatio
By: GATEWAY IVEY RANCH ASSOCIATES, By: I Sandra L. Holder
Community Development Director
ATTEST: , &(#7- orrai e M. Wood, City Clerk
If required by City, proper notarial acknowledgment of J/ e ecution by contractor must be
attached. If a Coruoration, 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 attach a resolution certified by the secretary or assistant secretary under
corporate seal empowering the offcer(s) signing to bind the corporation.
APPROVED AS TO FORM
RONALD R. BALL. CITY ATTORNEY
By:
YAssistant City Attorney
August 20,2002 10
I
I CALIFORNIA
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
COUNTYOF Sari Diego )
On August 21, 2002 beforeme, Jeanette Taylor, Notary Public
DATE NAME, TINE OF OFFICER - E.G.. “JANE DOE. NOTARY PUBLIC‘
personally appeared, George Szabo, Jr.
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) idare subscribed to the within instrument and acknowledged to me that he/she/
they executed the same in hislherltheir authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which theperson(s) acted,
executed the instrument.
WITNESS my hand and official seal.
(SEAL)
OPTIONAL INFORMATION
TITLEORTYPEOFDOCUMENT RewlatorY Aqreement and Declaration of Restrictive Covenants
DATEOFDOCUMENT 8/21/02 NUMBER OF PAGES
SIGNER@) OTHER THAN NAMED ABOVE -
August 20,2002
EXHIBIT A
Property Description
11
ATTACHMENT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HERIN IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:
LOT 173 OF CARLSBAD TRACT NO. 96-02 (THE TERRACES AT SUNNY CREEK I), IN
THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
ACCORDING TO MAP THEREOF NO. 14060, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, OCTOBER 27,2000