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HomeMy WebLinkAboutMS 15-12; Casa Aldea Carlsbad LP; 2020-0782148; 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 DOC# 2020-0782148 III 1 11111 11 11 II 1E1 1E1E111111 1111 1111111111 1111111111111 Dec 07, 2020 01:42 PM OFFICIAL RECORDS Ernest J. Dronenburg, Jr., SAN DIEGO COUNTY RECORDER FEES: $0.00 (SE2 Atkins: $0.00) PCORI N/A PAGES: 27 No fee for recording pursuant to Government Code Section 27383 and Government Code Section 27388.1 (Space above for Recorder's Use) REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS This Regulatory Agreement and Declaration of Restrictive Covenants ("Agreement") is made and entered into as of this 3C)11•- day of ,sem.,14 bee. 2020, by and between the City of Carlsbad, a chartered municipal corporation ("City"), and Casa Aldea Carlsbad, L.P., a California limited partnership ("Developer"). RECITALS 1. City and Developer entered into that certain Affordable Housing Agreement Imposing Restrictions on Real Property dated August 3, 2017, and recorded in the Official Records as document number 2017-0370663. The Affordable Housing Agreement sets forth the affordable housing requirements for the Developer's Casa Aldea multi-family residential project (Project No. SDP 15-13), located on the real property in the City of Carlsbad, County of San Diego, more particularly described in the Affordable Housing Agreement (collectively, the "Development"). 2. As a portion of the overall Development, Developer intends to develop ninety-eight (98) units on a portion of the real property subject to the Affordable Housing Agreement as more particularly set forth in Exhibit A, attached hereto and incorporated herein ("Property"). Of the ninety- eight (98) units to be developed on the Property, twenty (20) units will be restricted to occupancy by, and affordable to, low income senior resident households ("Low Income Units"). The Low Income Units will be developed to meet the inclusionary housing obligations for the Development as required by the Affordable Housing Agreement, as well as the conditions of approval of the Development for the assignment of excess dwelling units to said Development. 3. In accordance with the requirements of the Affordable Housing Agreement, 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. 4. In order to ensure that the entire Project will be used and operated in accordance 1 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, together with the Affordable Housing Agreement Imposing Restrictions on Real Property (Affordable Housing Agreement) as set forth in Exhibit B. (b) "City" shall mean the City of Carlsbad, a chartered municipal corporation. (c) "Developer" shall mean Casa Aldea Carlsbad, L.P.,a California limited partnership and its successors in interest to the Project. (d) "Development" shall mean the real property subject to, and all residential units developed pursuant to, the Affordable Housing Agreement. (e) "Gross Income" shall mean the total anticipated annual gross income (pre-tax and other deductions) 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. 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. "HCD" shall mean the State of California Department of Housing and Community Development. (g) "Low Income Household" shall mean a household whose annual gross income does not exceed eighty percent (80%) of the Median Income, adjusted for household size. (h) "Low Income Units" shall mean the residential units in the Project limited to occupancy by Low Income Households pursuant to Section 2.1 below. (i) "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 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. 2 (1) "Ordinance" shall mean the City's inclusionary housing ordinance, set forth in Chapter 21.85.155 of the City's municipal code, as such may be amended, or replaced, from time to time. (k) "Project" shall mean the Property, and the ninety-eight (98) 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. (1) "Property" shall mean the real property described in Exhibit A attached hereto and incorporated herein. (m) "Rent" shall mean the total of monthly payments by the tenants of a Low Income Unit for the following: use and occupancy of the Low Income 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, and paid by the tenant. (n) "Senior citizen" resident shall also mean "elderly" or "qualifying" resident and shall mean a person sixty-two years of age or older; or a person fifty-five years of age or older in a senior citizen housing development. (o) "Senior Citizen Housing Development" means a residential development developed, substantially rehabilitated or substantially renovated, for persons fifty-five years of age or older, that has at least thirty-five dwelling units (rental or for-sale) and at least eighty percent of the occupied dwelling units occupied by at least one person who is fifty-five years of age or older. (P) "Term" shall mean the period of time beginning on the date of recordation 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 of recordation of this Agreement in the Official Records. ARTICLE 2. AFFORDABILITY COVENANTS 2.1 Occupancy Reauirements. (a) Income. The Low Income Units shall be rented to, and occupied by, or, if vacant, available for rental and occupancy by Low Income Households. In accordance with the Affordable Housing Agreement, the Low Income Units shall consist of: (i) seven one- bedroom units (Plan A); (ii) four one-bedroom, plus den units (Plan C); and (iii) nine two- bedroom units (three Plan D1 units, three Plan D2 units, two Plan E units, and one Plan F unit). (b) Senior Occupancy, Developer has elected to operate the Project as a senior 3 housing development and as such to require all Low Income Units in the Project, (which does not include the resident manager's unit), to be occupied or held available for occupancy by Low Income Households containing "elderly" or "senior citizen" residents. Developer shall operate the Project at all times in compliance with the provisions of: (i) the Unruh Act, (ii) the United States Fair Housing Act, as amended, and (iii) the California Fair Employment and Housing Act, which relate to lawful senior housing. Developer shall develop and implement appropriate age verification procedures to ensure compliance with the requirements of this Section. Developer shall provide the City with a copy of its written verification procedures. Developer shall indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the City) the County, and its council members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Developer's failure to comply with applicable legal requirements related to housing for seniors. The indemnification provisions of this subsection shall survive expiration of the Term or other termination of this Agreement, shall remain in full force and effect, and are in addition to the obligations set forth in Section 6.12, below. 2.2 Allowable Rent (a) The monthly Rent charged to the occupants ofthe Low Income Units, shall not exceed one-twelfth of thirty-percent (30%) of seventy percent (70%) of Median Income as determined by the City, and adjusted for household size. The monthly rent for the low income units may be increased no more than one time per year, and only by the amount of the previous year to current year increase in the Median Income for San Diego County as set forth by the City following proper, required notice to the tenant in compliance with state law. (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 2 Two 3 2.3 Increased Income of Occupying Households. In the event, upon annual recertification of the income of a Low Income Household, Developer discovers that the occupants of a Low Income Unit no longer qualifies as a Low Income Household, but the household income does not exceed ninety percent (90%) of the Median Income, such household shall continue to be considered a Low Income Household, and the Rent for such Low Income Unit shall not exceed the allowable Rent set forth in Section 2.2 above. In the event, upon annual recertification of the income of a Low Income Household, Developer discovers that the occupants of a Low Income Unit no longer qualify as a Low Income Household and the household's income exceeds ninety percent (90%) of the Median Income, the Rent may be increased as determined by Developer until such household vacates such Unit. The Developer shall rent the next available comparable market rate unit to a Low Income Household to comply with the requirements of Section 2.1 above. 2.4 Lease Provisions. 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. Each lease or rental agreement shall also provide that the household is 4 subject to annual recertification 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. 2.5 Section 8 Voucher Holders. For the Low Income Units, Developer will accept as tenants, 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 effect of precluding occupancy of Low Income Units by such prospective tenants utilizing Section 8 subsidies. Developer shall also at no time charge Section 8 Voucher Holders higher rent than any other tenant; the "total rent" for Section 8 Voucher Holders will include both the tenant portion and the housing authority portion of the rent. The maximum "total rent" for Section 8 Voucher holders shall be the same as other low income tenants and not exceed one-twelfth of thirty percent (30%) of seventy percent (70%) of Median Income, adjusted for household size. 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 Tenn. 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 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 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 reasonably approved by 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 Low Income Unit and such other information as City may require. 3.3 Additional Information. Beginning the first February 1st after initial occupancy of any Unit within the Project, Developer shall provide any information regarding the Low Income Units and Developer's obligations under this Agreement that is reasonably requested by City. 5 3.4 Records. Developer shall use commercially reasonable efforts to maintain complete, accurate and current records pertaining to the Low Income Units, and, upon five (5) days prior written request by City, shall permit any duly authorized representative of City to inspect such 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, and each Low Income Unit shall be used as the primary residence for each household. No part of the Project shall be used for emergency shelter or transitional housing subject to the Transitional Housing Misconduct Act set forth in California Civil Code 1954.10 (or any successor statute). No part of the project may be used for tourist, or transient, use, or any other short-term rental use, or be listed on any "hosting platform" (as defined in California Business & Professions Code 22590, as may be amended from time to time), including, but not limited to any Internet-based "hosting platform", such as "airbnb.com", or any similar service. 4.2 Compliance with Affordable Housine Aereement and Annlicable Laws. Developer shall comply with all the terms and provisions of the Affordable Housing Agreement to the extent applicable to the Property, the 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 laterenacted). 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 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. 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 and senior households. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, source of income, ancestry, or any other classification protected by local, state or federal law, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall Developer or any person claiming under or through Developer, establish or penpit 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 Project. All deeds, leases or contracts made or entered into by Developer as to the Low Income Units or portion thereof, shall contain covenants concerning discrimination as prescribed by the Affordable Housing Agreement. 6 ARTICLE 5. PROPERTY MANAGEMENT AND MAINTENANCE 5.1 Management Responsibilities. Developer 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 the Management Agent (defined below) 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. The resident manager shall not be subject to the Low Income Household requirements, and the resident manager's unit at the Property shall not be deemed a Low Income Unit for purposes of this Agreement. 5.2 Managemen Agent: Periodic ReDorts. The Project shall at all times be managed by an experienced management agent reasonably acceptable to and approved by City, withdemonstrated ability to operate residential facilities like the Project in a manner that will provide decent, safe, and sanitary housing ("Management Agent") . Prior to the first occupancy permit for any building within the Project, Developer shall submit for City's approval the identity of any proposed Management Agent. Developer shall also submit such additional information about the background, and experience of any proposed Management Agent as is reasonably necessary for 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 as set forth above, City shall approve the proposed Management Agent by notifying Developer in writing. Unless the proposed Management Agent is disapproved by City within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, the Developer's proposed Management Agent shall be deemed approved. Notwithstanding the foregoing, the City has approved R.A. Snyder Properties, Inc. as the initial Management Agent for the Project, and the requirements of this Section shall only apply in the event the Developer desires to utilize any other entity as the Management Agent. 5.3 Performance Review. City reserves the right, upon five (5) business days prior written notice, to conduct an annual, or more frequent review of the management practices of the Project if deemed necessary by City. The purpose of each periodic review will be to enable City to determine if the Project is being operated and managed in accordance with the requirements and standards of this Agreement. Developer shall reasonably 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 Project is 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 its intention to require Developer's replacement of the Management Agent, including the reasons therefore. Within fifteen (15) days after receipt by Developer of such written notice, City staff and Developer shall meet in good faith to consider methods for improving the financial and operating status of the Project including, without limitation, replacement of the Management Agent. If, after such meeting, City staff reasonably deteimines that the Management Agent is not adequately performing and requires, in writing, the replacement of the Management Agent, Developer shall promptly dismiss the then Management Agent, and shall appoint as the Management Agent a 7 person or entity reasonably meeting the standards for a Management Agent set forth in Section 5.2 above and reasonably approved by City pursuant to Section 5.2 above. Any contract with a Management Agent for the operation or management of the Project 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 Approval of ManaQement Policies. Developer shall submit its written management policies with respect to the Project 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. 5.6 Property Maintenance. Developer agrees, for the entire Term, to use commercially reasonable efforts 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 depainnents, bureaus, and officials. 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 material and imminent threat to the health and safety of the tenants, or thirty (30) days after City has notified Developer in writing of the default or, if the default cannot be remedied within thirty (30) days, the Developer fails to commence to cure such default within thirty (30) days and thereafter diligently pursue such cure to completion as soon as reasonably possible, but in no event to exceed one hundred twenty (120) days without the prior written approval of the City (which shall not be unreasonably withheld, conditioned, or delayed), 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 forty-eight (48) hours prior written notice to Developer, and perform or cause to be performed all such acts and work reasonably necessary to cure the default. By execution of this Agreement, Developer hereby grants to the City, and the City's employees and agents, during the Term, 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 reasonably 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. City shall indemnify and hold Developer harmless from and against any claims, loss, costs, causes of action, liability, damage, or injury of any kind arising from or relating to any entry onto or work performed on the Property by the City or City's employees, agents, representatives, or contractors pursuant to this Section. 8 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. 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 said covenants and restrictions shall expire. During the Term, 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 as soon as reasonably possible, but in no event to exceed one hundred twenty (120) days without the prior written approval of the City (which shall not be unreasonably withheld, conditioned, or delayed), 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. City may bring an action at law or in equity to compel Developer's performance of its obligations under this Agreement. 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 is not adequate to compensate the City for Developer's failure to perform according to the terms of this Agreement. (b) Remedies Provided Under Affordable Housing Agreement and Ordinance. City may exercise any other remedy provided under the Affordable Housing Agreement, or otherwise available under the Ordinance. 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 City's in-house counsel and any third-party counsel retained by the City). 9 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 Community Development Department, Housing Services Attn: Housing Services Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008-1949 To DEVELOPER: Casa Aldea Carlsbad, L.P 6102 Gullstrand St San Diego, CA 92122 Attn: Carl Gustafson 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, in conjunction with the Affordable Housing 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 10 operate as a waiver of any future breach of any such provision or any other provisions hereof 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 parties 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 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, unless any such loss, liability, damage, or injury arises from the actions or omissions of the City or any of the City's-elected officials, employees, contractors or representatives. 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). 6.12 Hold Harmless: Indemnity. In addition to any obligations set forth in the Affordable Housing Agreement, 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 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 Property; or (ii) any other any claims arising out of Developer's performance or non-performance of its obligations hereunder, except where the cause of such is the gross negligence or willful misconduct of the City or of any person claiming indemnity hereunder for such claim. The indemnification obligations set forth in this Section shall survive any teirnination 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 Interpretatiorl. 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 amplify 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 11 may require. 6.15 No Limitation on Municipal Powers. Nothing in this Agreement shall limit, 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 depattment 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 Severabilitv. 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) Enforcements by Ce am n Third Parties. Pursuant to Health and Safety Code Section 33334.3(f)(7) a default under this Agreement, including the rental of a Unit by the Developer to a household not eligible under this Agreement, may be enforceable by the City, a residents' association, a resident of another affordable unit, a former resident of a Unit, a person on an affordable housing waiting list, and others who are listed in any applicable state law. The Parties agree and acknowledge that such rights shall only exist during such time that the Property is subject to the requirements of Health and Safety Code Section 33334.3(f)(7), or any successor statute. (b) Developer Obligations Prior to Expiration of Tenn At least six (6) months prior to the expiration of the Teim, Developer shall provide by first-class mail, postage prepaid, a notice to all tenants in the Low Income 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 Community Development, Housing Services. In addition, Developer shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11, to the extent 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 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. 12 City of Carlsbad, a chartered municipal c oration By. -- Jeff Murphy immunity Development Direcio_ Date: IN WITNESS WHEREOF, City and Developer have executed this Agreement by duly authorized representatives, all on the date first written above. APPROVED AS TO FORM: CELIA A. BREWER ITY ATTORNEY By: /. Ron Kemp, Assistant Cc Attorney Date: 10 Signatures continue on following page Signatures must be notarized 13 DEVELOPER: CASA ALDEA CARLSBAD, L.P, a California limited partnership By Esquiline Inc., Its General Partner of Casa Aldea Carlsbad, L.P By: Print Name: Carl Gustafson Title: Vice-President of Esquiline, Inc., General Partner of Casa Aldea Carlsbad, L.P Date: 9 By: Print Name: Date: (Chairman, president, or vice president and secretary, assistant secretary, assistant secretary, CFO, or assistant treasurer must sign for corporations. Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering for officer(s) signing to bind the corporation.) ( (If signed by an individual partner, the partnership must attach a statement of partnership authorizing the partner to execute this instrument.) (Proper notarial acknowledgement of execution by Developer must be attached.) 14 IN WITNESS WHEREOF, City and Developer have executed this Agreement by duly authorized representatives, all on the date first written above. City of Carlsbad, a chartered municipal corporation By: Jeff Murphy, Community Development Director Date: 4 0() g°Z(7 APPROVED AS TO FORM: CELIA A. BREWER, CITY AT ORNEY By: Ron KeppAssistant City Attorney Date: Signatures continue on following page Signatures must be notarized 13 MICHELE DIANE HARDY comm. Q222917 NOTARY PUBLIC-CALIFORNIA SAN DIEGO COUNTY My Comm Expires November 23,2021 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 svi.V,AtAWATTLIA-esAris.WW.C...atermte d*RtestteRtatt..•ateR.V.RC-Ars—Vtia..taile:RCZ.R.: as.C. A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On 1\n-'4 4 2-cz- before me, Date personally appeared T-E4 I IV 0A-ki y Here Insert Name and Title of the Officer j'Vk cl Lc, Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: Corporate Officer — Title(s): Corporate Officer — Title(s): El Partner — E Limited E General Partner — 171 Limited D General El Individual El Attorney in Fact El Individual LI Attorney in Fact El Trustee 17 Guardian or Conservator El Trustee El Guardian or Conservator El Other: El Other: Signer Is Representing: Signer Is Representing: "_, "._, "._,. ©2016 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907 WITNESS my hand and official seal. ; - Sig nature 0E1 Signature of Notary Public") A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of San Diego On September 30, 2020, before me, John Paul Teague, Notary Public, personally appeared, Carl Gregory Gustafson, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. JOHN PAUL TEAGUE Notary Public - California San Diego County Commission #2326845 My Comm. Expires May 20, 2024 k (Seal) WITNESS my hand and official seal. EXHIBIT A PROPERTY LEGAL DESCRIPTION Parcel "A" of Certificate of Compliance Document No. 2010-0225511 of Official Records, Recorded May 5, 2010 in the Office of the County Recorder, County of San Diego. Assessor Parcel Number: 168-360-1600 Address: 2615-2635 Cannon Rd. Carlsbad, CA 92010 15 EXHIBIT B AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY (SEE ATTACHED RECORDED AGREEMENT FOR CASA ALDEA CARLSBAD) 16 RECORDING REQUESTED BY: City of Carlsbad WHEN RECORDED MAIL TO: City of Carlsbad City Clerk's Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, California 92008 DOC# 2017-0370663 1111111111111111111111111111011111111111111111111111 Aug 15, 2017 02:19 PM OFFICIAL RECORDS Ernest J. Dronenburg, Jr., SAN DIEGO COUNTY RECORDER FEES: $36.00 PAGES: 8 (Space above for Recorder's Use) AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY (Mixed Income) This AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY ("Agreement"), entered into this 3 ic day of us T , 2.611, by and between the CITY OF CARLSBAD, a municipal corporation ("City"), and CASA ALDEA CARLSBAD L.P., a California Domestic Limited Partnership, ("Developer") is made with reference to the following: A. Developer is the owner of certain real property in the City of Carlsbad, in the County of San Diego, California ("Property") described in Exhibit "A", which is attached hereto and incorporated herein by this reference. B. Developer currently intends to construct a total of 98 residential senior apartment units on the Property ("Development"). The City has approved the Site Development Plan for the Development. The City issued the approval subject to certain conditions of approval ("Conditions of Approval"), including a condition requiring twenty (20%) percent of the units in the Development to be affordable housing as required by Planning Commission Resolution No. 7114 and City Council Policy No. 43. C. Developer is required by the Conditions of Approval to enter into an Affordable Housing Agreement as required and with the content specified by the City's Inclusionary Housing Ordinance (CMC Chapter 21.85). This Agreement is that Affordable Housing Agreement pursuant to Section 21.85.140 of CMC Chapter 21.85, and shall be executed and recorded prior to the approval of any final map for the Property. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. Satisfaction of Affordable Housing Obligation and Conditions of Approval. In order to satisfy the Conditions of Approval of Site Development Plan SDP 15-13, and the requirements of the City's Inclusionary Housing Ordinance (CMC Chapter 21.85) shall not be satisfied unless twenty (20) units of the Development are constructed for the purpose of CA 2/5/2013 providing housing to be affordable to lower-income households according to the schedule and terms contained herein ("Affordable Units"). A total of seventy-eight (78) market rate units and at least twenty (20) Affordable Units may be constructed with approval of this Agreement. 2. Terms Governing Provision of Affordable Multi-Family Units. Provision of the Affordable Multi-family Units shall be governed by the following terms: 2.1 Size and Bedroom Count. The Affordable Units in the Development shall include twenty (20) units in the numbers and with the square footages indicated in "Exhibit B" to this Agreement. 2.2 Affordability Requirements. The Affordable Units shall be restricted to occupancy by households with incomes not exceeding 80% of the median income for San Diego County, adjusted for actual household size. Monthly rents of the Affordable Units shall not exceed 1/12 of 30% of 70% of the median household income for San Diego County, adjusted for assumed household size appropriate for the unit pursuant to the Regulatory Agreement. For purposes of this Agreement, "Rent" shall include a utility allowance as established and adopted by the City of Carlsbad Housing Authority, as well as all required monthly payments made by the tenant to the lessor in connection with use and occupancy of a housing unit and land and facilities associated therewith, including any separately charged fees, utility charges, or service charges assessed by the lessor and payable by the tenant (but not including fees or charges resulting from any default by the tenant or damage caused by the tenant, or fees or charges paid by the tenant to third party utilities or other providers). Median income figures shall be those published annually by the United States Department of Housing and Urban Development. Assumed household size figures shall be provided by the Developer and approved by the City of Carlsbad Housing and Neighborhood Services Department. With respect to each Affordable Unit, the affordability requirements of this Section 2.2 shall continue for 55 years from the date of issuance of a Certificate of Occupancy by the City for such unit. The affordability requirements of this Section 2.2 shall be continue for fifty-five (55) years from the date of issuance of a Certificate of Occupancy by the City for such unit or another comparable unit based upon substitution provisions pursuant to the Regulatory Agreement. The affordability requirements of this Section 2.2 shall be set forth in the Regulatory Agreement between the Developer or its successors and the City, provided for below, which shall supersede this Agreement upon recordation of the Regulatory Agreement. 2.3 Schedule for Developing Affordable Multi-family Units. Developer shall provide the Affordable Units concurrent with the Project's market rate units. 3. City Approval of Documents. The following documents, to be approved in writing by the City, shall be used in connection with the rental of Affordable Units. 3.1 A marketing plan consistent with the terms of this Agreement, establishing the process for seeking, selecting and determining the eligibility of tenants of the Affordable Units. 3.2 A form of Rental Agreement. 2 CA 5/12/2011 3.3 A Property Management Plan. 3.4 A form of regulatory agreement between the Developer and the City ("Regulatory Agreement"), following a format designated by the City. 4. Compliance Report. Following completion of construction of the Affordable Units, a Compliance Report meeting the requirements of CMC Section 21.85.140 of the Inclusionary Ordinance, verifying compliance of all completed Affordable Units with the terms of this Agreement and certified as correct by a third-party, shall be submitted annually to the Housing and Neighborhood Services Director, commencing on the first Report Date that is twelve (12) months from the completion of construction of the Affordable Units. If similar reports on some or all of the Affordable Units are required for regulatory compliance with other financing programs, those reports may be deemed satisfactory for the purpose of this section by the Housing and Neighborhood Services Director, with respect to the Affordable Units covered by such reports, provided that copies of those reports are provided on an annual basis to the Housing and Neighborhood Services Director with a third party certification addressed to the City. 5. Release of Subject Property from Agreement. The covenants and conditions herein contained shall apply to and bind the Director and its heirs, executors, administrators, successors, transferees, and assignees having or acquiring any right, title or interest in or to any part of Property and shall run with and burden the Property until terminated in accordance with the provisions of Section 13 hereof. The Developer shall expressly make the conditions and covenants contained in this Agreement a part of any deed or other instrument conveying any interest in such property. The burdens of this Agreement, except for such burdens as may be released as set forth above, shall remain in full force and effect and recorded against the Development for the 55-year duration of this Agreement. 6. Default. Failure of the Developer to cure any default in the Developer's obligations under the terms of this Agreement within ninety (90) days after the delivery of a notice of default from the City (or where the default is of the nature which cannot be cured within such ninety (90) day period, the failure of the Developer to commence to cure such default within the ninety (90) day period or the Developer's failure to proceed diligently to complete the cure of such a default within a reasonable time period but in no event greater than one-hundred eighty (180) days) will constitute a failure to satisfy the Conditions of Approval with respect to the Property and the requirements of Chapter 21.85 of the CMC. The City may exercise any and all remedies available to it with respect to the Developer's failure to satisfy the Conditions of Approval and Chapter 21.85 of the CMC, including but not limited to, the withholding of further building permits for the market rate units within the Development until such cure is completed. 7. Appointment of Other Agencies. At its sole discretion, City may designate, appoint or contract with any other public agency, for-profit or non-profit organization to perform the City's obligations under this Agreement. CA 5/12/2011 8. Hold Harmless. Developer will indemnify and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including attorneys' fees and expenses) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating in any manner to Developer's actions or defaults pursuant to this Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. This provision shall survive the term of this Agreement. 9. Insurance Requirements. Developer shall obtain, at its own expense, commercial general liability insurance for development of the Property naming Indemnitees as additional named insureds with aggregate limits of not less than five million dollars ($5,000,000), for bodily injury and death and property damage, including coverage for contractual liability and projects and completed operations, purchased by Developer or its successor or assigns from an insurance company duly licensed to engage in the business of issuing such insurance in the State, with a current Best's Key Rating of not less than A-:VII, such insurance to be evidenced by an endorsement which so provides and delivered to the Housing and Neighborhood Services Director prior to the issuance of any building permit for the Property. 10. Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the party to receive such notice at the addressed set forth below: TO THE CITY OF CARLSBAD: Housing and Neighborhood Services Depai ment Attn: Housing and Neighborhood Services Director 1200 Carlsbad Village Drive Carlsbad, California 92008 TO THE DEVELOPER: Carl Gustafson President, Aldea Partners 6102 Gullstrand St. San Diego, CA 92122 Any party may change the address to which notices are to be sent by notifying the other parties of the new address in the manner set forth above. 11. Integrated Agreement. This Agreement constitutes the entire Agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. 12. Duration of Agreement. This Agreement shall remain in effect for fifty- five (55) years following the date certificates of occupancy have been issued for all Affordable 4 CA 5/12/2011 By: Deb ile Fountain, Housing & Neighborhood Services Director Dated: S TY OF CARLSBAD Units. This Agreement, and any section, subsection, or covenant contained herein, may be amended only upon the written consent of the Developer and the Housing and Neighborhood Services Director. 13. Recording of Agreement. The parties hereto shall cause this Agreement to be recorded against the Property in the Official Records of the County of San Diego. 14. Severability. In the event any limitation, condition, restriction, covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be and remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed as of the day and year first above written. DEVELOPER CASA- 14/-t> A• C-6 SaPt-D L.P. By: Signature Title: aci-__s.zpiwr OF r:r5 G-6mEP4L Dated: -5-/30// 7 By: Siglature Title: Vr-c-E. 2itfta--Defol oF - Ga4..3ea_AL Poci-P---r(OE-& (Chairman, president or vice-president and secretary, assistant secretary, CFO or assistant treasurer must sign for corporations. Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the office(s) signing to bind the corporation.) (If signed by an individual partner, the partnership must attach a statement of partnership authorizing the partner to execute this instrument.) (Proper notarial acknowledgment of execution by Developer must be attached.) APPROVED AS TO FORM Celia A. Brewer, City Attorney By: Dated: Sic? /fl Ron Kemp, Assistant Cit Attorney 5 CA 5/12/2011 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Parcel "A" of Certificate of Compliance Document No. 2010-0225511 of Official Records, Recorded May 5, 2010 in the Office of the County Recorder, County of San Diego. 6 CA 5/12/2011 EXHIBIT B UNIT SIZES AND BEDROOM COUNT 7 Total: "Plan A" One Bedroom Units that are 651 square feet. 4 Total: "Plan C" One Bedroom + Den Units that are 885 square feet. 3 Total: "Plan Dl" Two Bedroom Units that are 956 square feet. 3 Total: "Plan D2" Two Bedroom Units that are 909 square feet. 2 Total: "Plan E" Two Bedroom Units that are 994 square feet. 1 Total: "Plan F" Two Bedroom Unit that is 1,091 square feet. 7 CA 5/12/2011 Signature CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of San Diego On May 30, 2017 before me, M W Walters, Notary Public Date Here Insert Name and Title of the Officer personally appeared Christine Handley and Carl Gustafson Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. M. W. WALTERS Notary Public - California z San Diego County Commission #2191870 My Comm. Expires May 19,2021 WITNESS my hand and official seal. Signature of Notary Public Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Capacity(ies) Claimed by Signer(s) Signer's Name: El Corporate Officer — Title(s): 0 Partner — 0 Limited El General El Individual El Attorney in Fact 0 Trustee [1] Guardian or Conservator 111 Other: Signer Is Representing: Named Above: Signer's Name: CI Corporate Officer — Title(s): 0 Partner — 0 Limited 0 General 0 Individual 0 Attorney in Fact CI Trustee 0 Guardian or Conservator Li Other: Signer Is Representing: ©2014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907